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Zenith appoints Onyeagwu Group CEO

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enith Bank plc has announced the appointment of Ebenezer Onyeagwu as the Group Managing Director/ CEO of the bank effective June 1, 2019, subject to approval by the Central Bank of Nigeria (CBN). T h e appointment is consistent with the bank’s tradition Onyeagwu and succession strategy of grooming leaders from within. Onyeagwu replaces Peter Amangbo, whose tenure expires on May 31, 2019. Amangbo leaves the bank at the end of Continues on page 34

Inside Despite oil rally, concerns for Nigeria’s future linger P. 2

L-R: Yinka Ikenze, guest; Asue Ighodalo, chairman, board of directors, DO.II Designs Limited; Ifeyinwa Ighodalo, MD/CEO, DO.II Designs Limited; Christopher Kolade, chairman of the occasion, and his wife Beatrice, at the Thanksgiving and Dedication of DO.II Flagship Store in Lagos. Pic by Pius Okeosisi

Private developers’ encroachment into airport land threatens security at MMIA T IFEOMA OKEKE

he continued unchecked encroachment of private developers into the airport land at the Murtala Muhammed International Airport (MMIA) in Lagos could further weaken security at the

Experts intensify call for secondary fence

airport. Coming at a time when airline operators and passengers have repeatedly complained about stolen cargo at the airside, industry experts say private developers erecting structures on

the airport land could lead to serious security breach. The experts have been lamenting that the absence of comprehensive security and perimeter fencing at the airport gives unscrupulous people un-

due access to restricted areas of the airside, heightening insecurity at the airport. BusinessDay visit to the airside last week showed a number Continues on page 34


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NEWS Apapa gridlock, smuggling dampen sugar sales in 2018 . . smuggled sugar repackaged with popular brand names BUNMI BAILEY

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he persistent gridlock in and around Apapa port environment and the high rate of smuggling of cheap unlicensed sugar into the country combined to affect the sales revenue of Nigeria’s top local sugar producers in 2018. The three major sugar producers in the country are Dangote Sugar Refinery plc, a subsidiary of Dangote Industries Limited, Golden Penny Sugar, a subsidiary of Flour Mills of Nigeria (FMN), and BUA Sugar Refinery Limited. Proceeds from Dangote Sugar’s sales dropped by 26 percent to N150.4 billion in 2018, from N204.4 billion in 2017, according to the company’s full-year 2018 financial report. Similarly, Golden Penny Sugar’s sales declined by 13.5 percent to N9.6 billion

in the first nine months of 2018, from N68.9 billion in the same period of 2017. Dangote Sugar noted in an email presentation last week that its sales were affected by the challenges from illegal, low-quality imports which put pressure on its selling price and a traffic jam around its production site in Lagos which hampered delivery to customers. Access roads to Apapa, Nigeria’s premier port, have been riddled with perennial traffic which continues to cause delays and add to the cost of doing business in the port city. But not only Dangote – analysts in the consumer space said Golden Penny Sugar also faced similar challenges. Ayorinde Akinloye, a consumer goods analyst at Lagos-based CSL Stockbro-

Continues on page 34

Sub-Saharan economic growth recovery to take longer – World Bank

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he World Bank has cut its growth forecast for sub-Saharan Africa this year to 2.8 percent from an initial 3.3 percent, it said on Monday. The commodity price slump of 2015 cut short a decade of rapid growth for the region, and the bank said growth would take longer to recover as a decline in industrial production and a trade dispute between China and the United States take their toll. The bank’s 2019 forecast means economic growth will lag population growth for the fourth year in a row and it will remain stuck below 3 percent, which it slipped to in 2015. In its latest report on the regional economy, the bank also cut its 2018 growth estimate to 2.3 percent from last October’s prediction of 2.7 percent growth for last year. “The slower-than-expected overall growth reflects ongoing global uncertainty, but increasingly comes from domestic macroeconomic instability including poorly managed debt, inflation and deficits,” the bank said. Nigeria, South Africa and Angola, which make up about 60 percent of sub-Saharan Africa’s annual economic output, were all facing various challenges, curbing their contribution to the growth momentum, the bank said. “This downward revision reflects slower growth in Nigeria and Angola, due to challenges in the oil sector, and

subdued investment growth in South Africa, due to low business confidence,” it said. Nigeria’s economy grew by an estimated 1.9 percent last year, up from 0.8 percent the previous year, the World Bank said, reflecting a modest pick-up in the non-oil sector. South Africa came out of recession in the third quarter of last year but investors were still cautious due to policy uncertainty, the bank said. In the meantime Angola, the region’s third-biggest economy, remained stuck in recession, as oil production remained weak. High inflation and heavy debt loads discouraged investors in economies such as Zambia and Liberia, hitting their growth prospects, the World Bank said. Rates of debt in the region are growing and the type of borrowing that countries are undertaking is exposing them to vulnerabilities, it said. “External debt is shifting from traditional, concessional, publicly guaranteed sources to more private, marketbased, and expensive sources of finance, putting countries at risk,” the bank said. “By the end of 2018, nearly half of the countries in subSaharan Africa covered under the Low-Income Country Debt Sustainability Framework were at high risk of debt distress or in debt distress, more than double the number in 2013.”

President Muhammadu Buhari (m); Saif bin Zayed Al Nahyan, UAE deputy prime minister (2nd l); Evo Morales, President of Plurinational State of Bolivia (r), and other delegates, at the Dubai Annual Investment Meeting, yesterday. NAN

Insurers lose N220bn to rate-cutting in 5yrs on motor, fire business MODESTUS ANAESORONYE

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he nation’s insurance industry may have lost an estimated N220 billion in the past five years to rate-cutting on its two major business lines, fire and motor businesses, BusinessDay learnt. The insurance brokers, who are the major intermediaries in the business of insurance contract, also lost between N15 billion and N22 billion on commissions during in the same period (20142018) as a result of rate-cutting, according to a report by Simba Chinyemba, Zenith General Insurance chief actuary.

formance year-on-year basis. Motor business contributed N39.29 billion gross premium as at the end of 2017, out of the total N203 billion generated by the entire industry, while fire contributed N35.38 billion during the same period. Industry analysts are optimistic that if the industry harnesses all the potential in motor business, given that third party is compulsory for motorists in Nigeria, by checking fake insurance policies, expanding to areas in the country where insurance accessibility is poor, as well as adequate pricing, the sector could generate over N100 billion annually from that line of

business. “I agree with the findings of the actuary, and it may even be underestimation,” Augustine Ebose, managing director/CEO, Anchor Insurance Company Limited, told BusinessDay in an interview. Ebose noted that underpricing of risk is a major problem of the insurance industry, expressing concern that in the midst of all these, claims are coming in their numbers. Kehinde Borishade, managing director/CEO, Zenith General Insurance Company Limited (ZGIC), had during a broker’s forum organised by his company identified cut-

Continues on page 34

Despite oil rally, concerns for Nigeria’s future linger STEPHEN ONYEKWELU

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ven though Nigeria will benefit from oil rally in the short term, concerns are rising regarding what would become of the country as the world moves beyond oil as a major source of fuel for vehicles and towards electric cars. Higher oil prices have often meant Nigeria, Africa’s biggest oil producer, can earn more in foreign exchange and fund its budget deficit. This is because oil accounts for 90 percent of Nigeria’s foreign exchange. The most recent exports are led by crude petroleum which represents 76 percent of the total exports of Nigeria, followed by petroleum gas, which accounts for 13.8 percent. Hopes have been rising for the country as oil price last week hit a five-month high of •Continues online at $70 per barrel thanks to powww.businessday.ng litical tensions in Libya, USA www.businessday.ng

Rate-cutting, meaning under-pricing of risk to outsmart competitor, is a highly dreaded monster causing major pain to the nation’s insurance industry. This has remained incurable as a result of high level competition in the industry that has pinched on pricing rather than innovation. Rate-cutting is a major reason the industry growth is very slow and why many insurance companies cannot meet claims obligations, according to the National Insurance Commission (NAICOM). Motor insurance and fire business are the second and third largest premium contributors to the overall industry per-

sanctions against Iran and Venezuela and the continuing OPEC+ supply cuts. Brent crude, the international benchmark, traded at $71.03 as of 5:15pm local time on Monday. This represented a 0.98 percent increase. The West Texas Intermediate (WTI) traded at $64.17 as of 5:15pm Monday, up by 1.73 percent. While this is welcome news for Nigeria given how a handsome chunk of export revenues are sourced from oil sales, fears for the country’s future earnings linger as the world embraces alternative sources of fuel. Electric cars outsold fossil fuel vehicles for the first time in Norway last month. The announcement from the Norwegian Electric Vehicle Association makes it the first time that more than half of the cars sold in the Norwegian market were fully electric. “While appreciating oil

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prices provide foreign exchange stability, ability to implement 2019 budget and economic growth, it still leaves the country vulnerable to external shocks,” Lukman Otunuga, analyst at FXTM Research, said in a note to BusinessDay. “Nigeria still needs to break away from oil to derive growth from other sustainable sources,” Otunuga said. Again, the factors driving oil rally have limits and cracks are emerging in the Organisation of Petroleum Exporting Countries and allied countries (OPEC+) ‘Declaration of Cooperation’ to cut oil supply by as much as 1.2 million barrels. Saudi Arabia is having a hard time convincing Russia to stay much longer in the OPEC-led pact cutting oil supply, and Moscow may agree only to a three-month extension, three sources familiar with the matter said. The United States of @Businessdayng

America’s Shale production reached a global record of 12.2 million bpd in March and concerns over plateauing global growth are stimulating fears of reduced demand for crude; the current upside on Brent crude may be limited. “Any fresh signs of world growth cooling or global supply outpacing demand may end up dragging prices back below the $70 per barrel level,” Otunuga said. The challenge for Nigeria is not necessarily what happens now, but what happens when oil price crashes to its barest minimum with increasing attractiveness to produce electric cars from Europe to America and Asia. A majority of these advanced countries are also considering a ban on the sale of petrol-powered cars, which could lead to lower oil demand and excess crude oil supply, a situation that will automatically crash oil prices.


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Conversation on street children STRATEGY & POLICY

MA JOHNSON

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lobally, so many children are living on the streets. These children are popularly referred to as “street children.” This group of children are in most countries of the world-developed and developingwhere there is poverty and hunger. Street children, according to Wikipedia, are “children experiencing poverty, homelessness or both, who are living on the streets of a city, town or village.” This definition of street children is contested, but it is stated “that many practitioners and policy makers use UNICEF’s concept of boys and girls, aged under 18 years, for whom “the street” (including unoccupied dwellings and wasteland) has become home and/or their source of livelihood, and who are inadequately protected or supervised.” Children whose basic material needs cannot be provided within the household move to the street. We have street children in all the 36 states of Nigeria including the federal capital territory. They are in millions, according to reports. And some are on the streets due to conflict in the North Eastern part of Nigeria where about 3 million children cannot go to school. Hundreds are facing starvation everyday while many struggle in temporary camps where disease and hunger are

rife, according to a report. It is on the streets that these children are subjected to abuse, neglect, exploitation, or, in extreme cases, murder by unidentified persons. Poverty, hunger and sorrow make these children and perhaps, their parents miserable in a nation of huge resources. While Thailand takes the prize as the least miserable country in the world, according to the 2018 Steve Hanke’s Annual Misery Index, Nigeria was the sixth miserable country behind Turkey, Brazil, Iran and Venezuela. In the 2018 Global Hunger Index, Nigeria was reported to be suffering from a severe level of hunger as the country ranks 103 out of 119 qualifying countries. There is a rise in the number of Nigerian children who are on the streets hawking. The International Labour Organization estimates that about 14 million children between the ages of five and 14 are involved in one form of economic activity or the other on the streets. Due to increase in the number of political thugs, armed robbers, kidnappers, fraudsters within the country, this writer feels that local, state and federal governments must pay more attention to street children. Why? It is on the streets these children imbibe the “street culture” of killing, maiming, gang raping, glue sniffing, and stealing among other heinous crimes. The street is the production arena of children who are involved in crimes and criminality in the country. If effective approaches by governments and NGOs are not adopted to address the needs of these children, they will grow up becoming “professional” criminals later in life. In order to feel the pulse of Nigerians on ways of taking these children off the streets, this writer sent a message on his tweeter account on 2 April,

2019, as follows: “Compulsory education for all children up to secondary level in all 36 states. This will take the children out of the streets. Education is very basic to all other things. So can we have national and state assemblies legislate that all children should be in school for 12 years?” By 4 April 2019, there are 13,906 impressions and 227 engagements on tweeter. A few comments that will fit into the space provided in this column have been selected. Please read on: Juliet Kego: “Sir, the challenge is actually in implementation. Child Rights Act (CRA) already makes provision for a lot of these but about 12 states are yet to domesticate it and those who have, do not necessarily implement. A lot of schools are dilapidated. Teachers unpaid/owed/poorly trained.” OrukAnam: “I think the last sentence captures the real problem. A lot of schools are not of acceptable standard. There are cultural and economic angles but we have to get the schools working first- otherwise insisting children are in school is an empty exercise.”` Zeala: “Even the Universal Basic Education (UBE) Act legislates it…….. like you said, implementation is the issue.” Lady Sotaria: “With all due respect, the school standard at the moment is appalling, it will take a swift dip if this is implemented.” Fribone: “Not just compulsory education sir, but one of good standard. The current situation is dead and can’t be resuscitated. We need to plan for the future like the Japanese and UAE are doing, our kids deserve more than we give them.” TayoAro: “NASS members don’t care, their children are not in public schools.” Citizen Olufemi: “This should be the goal of the educational sector. Oil

The International Labour Organization estimates that about 14 million children between the ages of five and 14 are involved in one form of economic activity or the other on the streets

is not our power in Nigeria, it is the 200 million Nigerians. Educate the citizens and Nigeria would be great. Education is light and freedom from the shackles of ignorance. Education is the solution to terrorism and bloodshed….” “…..Solution to terrorism: Educated people are hard to be indoctrinated and brainwashed. Boko Haram won’t be able to recruit new people if they are educated. Education is the solution to political thuggery. How many graduates have you found among political thugs...?” “Solution to bloodshed: Herdsmen-farmer clashes are as a result of ignorance and outdatedness. If they are empowered with the knowledge of how cattle are reared in the 21st Century, there would be no clashes. Adult vocational education is needed. Ordinary agric science can solve this.” Oki Sam: “This will be a serious threat to the feudal system of the core North and so would not be applicable nationwide! The Northern cultural establishment is averse to such ingenious modules….particularly on mass education that will eliminate the almajiris, used only for voting!” Dr Magpi: “This is the foundation of all things good in the future of any nation.” Disciples Atiku: “Great, education is the bedrock of development but if we are all educated, who will be the political thug? Who will do the dirty political jobs? Who will be the spoilers? That is the reality. If we are serious about education, every one of us will be involved.” Gnavasuko: “Compulsory education with the inclusion of being free……” •To be continued Johnson is an author and a retired naval engineer who has passion for African development and good governance

Multiple directorships: Striking a balance

BISI ADEYEMI

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t has been argued that serving on multiple Boards afford Directors the benefit of diverse experience that impacts positively on their individual performance and that of the respective Boards on which they serve. The recourse to insight garnered by a Director from dealing with a particular problem on one Board would certainly come handy when a similar problem surfaces on another Board. Companies with “well-connected” Directors inevitably benefit from more networking opportunities as well as access to strategic insights. However, multiple directorships may become a cause for concernwhere the Director findshimself in situations bordering on conflict of interest. The Securities and Exchange Commission (SEC) Code of Corporate Governance provides that Directors should not be members of Boards of companies in the same industry to avoid “conflict of interest, breach of confidentiality and misappropriation of corporate opportunity”. Indeed, the NAICOM

Code of Corporate Governance for Insurance Companies provides that in selecting a Director, “limited insider relationships and links with competitors” should be considered. Directors are expected to devote adequate time and resources to their oversight responsibilities. Whilst the SEC Code does not expressly limit the number of concurrent directorships a director may hold, it recognizes that “concurrent service on too many boards may interfere with an individual’s ability to discharge his responsibilities”. The Code enjoins the Board and shareholders to carefully consider other directorships in assessing the suitability or otherwise of nominees for appointment to the Board. The question then is should numerical limits be set for Directorships? According to a publication in Business Times, a study of U.S. firms (Too busy to mind the business?) did not find any association between multiple directorships and securities fraud litigation. Yet another study of U.S. initial public offerings (Are busy boards detrimental?) concluded that multiple directorships are not only common among newly-listed companies, but also add value to these companies. There is no limit on multiple directorships in the US. However, Malaysia’s Main Market restricts a director to no more than five directorships in listed issuers. The Securities Exchange Board of India recently imposed a limit of seven listed directorships. The UK Corporate Governance Code states that a full time executive director should not take on more than one non-executive directorship or chairmanship

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in a FTSE 100 company. In Zimbabwe, the Corporate Governance Code prohibits directors from serving on more than six boards, while the Singaporean Corporate Governance Code leaves it to the Boards to “determine the maximum number of listed company board representations which any director may hold”. Interestingly, the Companies and Allied Matters Act Amendment Bill now before the House of Representatives sets a limit of five directorships for Directors on the Boards of Public Companies. According to a recent research by Inoxico an online credit bureau that specializes in risk management solutions - each director of the 20 largest companies in South Africa sits on 14 other boards.In response to concerns about directors sitting on too many boards, the Kuala Lumpur Stock Exchange, as part of its listing rules, has limited the number of directorships that any individual can hold to no more than 10 in listed companies and no more than 15 in non-listed companies. The recently introduced Nigeria Code of Corporate Governance, 2018 provides that concurrent service on too many Boards may interfere with an individual’s ability to discharge his/her responsibilities. To assist the Board in determining the appropriateness of concurrent directorships, it recommends that prospective Directors should disclose memberships on other Boards, and current Directors should notify the Board of prospective appointments on other Boards. The Board should then consider the disclosed directorships, taking into account the number of other directorships and the responsibilities held,

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and determine whether the individual can discharge his/her responsibilities and contribute effectively to the performance of the Board before recommending such a person for appointment or continued service. It has been argued that the size and complexity of a company would determine the level of demand on the timeand attentionof Directors. Accordingly, concurrent service on the Board of several SMEs should not detract from a Director’s ability to perform effectively on the Board of one or two public companies. Some proponents of multiple directorships have also argued that spending more time on Board activities is in itself not a panacea for corporate failure. However, given the significant responsibilities and time commitment required to function effectively in that office – including reading through and digesting board packs to ensure meaningful participation at Board and Committee meetings, attendance at Board and Committee meetings, participation at Board Strategy sessions and Director Development programmes – the Board should consider setting a numerical limit of concurrent Board memberships for prospective Board nominees. An effective performance appraisal of the Board and individualDirectors is one way ofensuring the right balance. If directors are performing well, the number of boards on which they serve become immaterial. Adeyemi is the Managing Director, DCSL Corporate Services Limited. Kindly forward comments and reactions to badeyemi@dcsl.com.ng

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South Africa – Will Ramaphosa bring down the house? (1)

RAFIQ RAJI

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n mid-February, Bantu Holomisa, president of the United Democratic Movement (UDM), a political party, exclaimed “we now know the cost of state capture…billions of rands have been stolen and state-owned enterprises (SOEs) have been weakened”. Holomisa made these remarks at UDM’s manifesto launch in Port Elizabeth against the backdrop of renewed load shedding by the country’s state power utility monopoly, Eskom, which the UDM president attributed to state capture. “Like Prasa, Eskom is no longer able to perform service as it should”. He was only stating the obvious. At his second State of the Nation Address (SONA) a week before, President Cyril Ramaphosa addressed the matter quite succinctly. “The revelations emerging from the Zondo com-

mission of inquiry into state capture and other commissions are deeply disturbing, for they reveal a breadth and depth of criminal wrongdoing that challenges the very foundation of our democratic state”. More importantly, “where there is a basis to prosecute, prosecutions must follow swiftly and stolen public funds must be recovered urgently”, the president added. Incidentally, Holomisa’s speech a week after, happened at exactly the same time the ruling African National Congress (ANC) president was addressing party faithfuls at their own manifesto rollout in Limpopo. “President Ramaphosa may be a decent man, but he is just one man”, Holomisa remarked. “There is nothing to stop the ANC from deciding to remove him just as they recalled Thabo Mbeki and replaced him with a person facing over eight hundred criminal charges”, the UDM president added. Holomisa was also speaking from personal experience: the ANC expelled him in 1996, after he testified before the Desmond Tutu-led Truth and Reconciliation Commission. Incidentally, Ramaphosa had, only just days before, during his response to the SONA debate in the South African parliament, been defending himself against accusations by Congress of the People (COPE) president Mosiuoa Lekota, a former member of the ANC and former min-

ister of defence, that he betrayed his struggle comrades to the apartheid regime when he was a student leader. Ultra-leftist Economic Freedom Fighters (EFF) party has called for a judicial commission of inquiry into the accusations by Lekota. And about a month before, EFF leader Julius Malema also asked Ramaphosa to clear the air on the actual relationship between his son Andile and Bosasa (registered as “African Global Operations”), a facilities management firm implicated in state capture that was recently liquidated by its sponsors after banks refused to do business with it. In light of this context, how far will Ramaphosa go to fight corruption within the ruling ANC and the state? How far can he really go? New African posed these questions to top political analysts. Treacherous politics “Ramaphosa has already started to tackle corruption by replacing the boards of corrupted firms and hiring credible prosecutors”, says Adeline Van Houtte, Africa analyst at The Economist Intelligence Unit (EIU) in London. “Cracking down on corruption and prosecuting offenders remain key elements of Ramaphosa’s agenda”, she adds. “But whether Ramaphosa succeeds depends on elections outcome on May 8th. But even if the ANC wins, he will face ferocious opposition to the clean-up from within

Ramaphosa is constrained in different ways in terms of combating corruption at the state level and within the ANC itself

his party. He will therefore need to tread carefully as it would be easy for rivals to remove him from the party leadership”. Thus, “Ramaphosa is constrained in different ways in terms of combating corruption at the state level and within the ANC itself”, says Oxfordbased Jason Robinson, a senior Africa analyst at Oxford Analytica. Langelihle Malimela, Johannesburg-based senior economics and country risk analyst at IHS Markit, provides additional context. “It is all likely to drag though, for some time. In other words, it will be some time before many prominent people are actually put on trial.” “What Ramaphosa has done is to place emphasis on building institutions and following due process. It has served him well in the sense that, when he has gone after someone, such as his firing of the SARS [South African Revenue Service] commissioner, he has prevailed in the ensuing legal storm.” “On the downside, it makes him appear indecisive and slow. But he is trying to ring-fence these institutions and put them on solid footing in case he is removed in future by the party.” •An edited version was published in the March 2019 issue of New African magazine “Dr Raji is chief economist at Macroafricaintel. He was previously an Africa Economist at Standard Chartered Bank, London, UK. (Twitter: @ DrRafiqRaji)”

The metamorphosis of Nigerian comedy and DStv as a platform for exposure MAYOWA OWOJAIYE

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ohn Chukwu (JC) is regarded as one of the founding fathers of stand-up or modern-day comedy in Nigeria but chances are if you weren’t born before or around the 80s, you would not have heard of him. He was Ali Baba’s contemporary. The Greeks and Romans confined their use of the word “comedy” to descriptions of stage-plays with happy endings. In the Middle Ages, the term expanded to include narrative poems with happy endings. As time progressed, the word came more and more to be associated with any sort of performance intended to cause laughter. During the Middle Ages, the term “comedy” became synonymous with satire, and later with humour in general. Though the history of stand-up comedy in some form can be traced as far back as the 1800s, stand-up, as it is known today, did not really make any meaningful impact until the 1970s. Patrick Bromley states that in the United States of America, for instance, the 1970s marked the birth of modern stand-up comedy, as it witnessed the appearance of a new generation of comedians and the rise of comedy clubs. According to him, unlike the traditional setup/punch-line joke tellers, the new stand-up acts were faster and looser, mixing the confessional with the socio-political, a comedy art form that was

reborn. The new crop of comedians, like George Carlin and Richard Pryor, became not just stars, but icons. Also, comedians like Robert Klein and Jerry Seinfeld ushered in a new style of “observational” comedy – material that sprang from everyday life, accessible to wide audiences that identified with the comics as being just like themselves. In Nigeria, comedians have existed from time immemorial in the form of village spokesmen, especially at ceremonial occasions. These comedians were so recognized that they were paid to perform at events. By the 1950s, the first generation of vocational humour performers were already visible in Nigeria. Names that would come to be associated with this generation included Moses Olaiya [Baba Sala], Usman Baba Pategi [Samanja], James Iroha[Gringory], Chika Okpala [Zebrudaya], Sunday Omobolanle [PapiLuwe/Aluwe], Afolabi Afolayan [Jagua], Kayode Olaiya [Aderupoko], TajudeenGbadamosi [Jacob], and Papa Lolo [Ayo Ogunshina]. There is reason to believe that these individuals had an impressive following up until 1990, theatre performances (both stationary and travelling) constituting launching-pads for the emergence of their comic artistry. The business of comedy began in the 70s with the popular Mazi Mperempe programme on Radio Nigeria and the old Anambra State Television, Enugu. But it was Alleluia Atunyota Akporobomeriere, alias, Ali Baba who made it a career. He had his first show in 1988 at the then Bendel University Ekpoma. Ali Baba dared the odds of negative public perceptions to have a breakthrough in comedy. Today, it is generally agreed that it is Ali

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Baba that gave comedy the reputation it has in Nigeria. However, due credit needs to be given to Opa Williams, for creating the pedestal for the rise and development of modern stand-up comedy. After an experience at the Orthopaedic Hospital, Igbobi Lagos around 1994/95, Opa (as he is popularly called), created Nite of a thousand laughs, a dedicated live event strictly involving only stand-up performances of comedians. He organised the maiden edition in 1995, at the University of Lagos. The event was a success, artistically, but a failure, in terms of financial returns. Despite encountering colossal loss that year, he hung on to the promise of the event, returning in 1996 with some partners. It was yet another huge loss and his partners, understandably, developed cold feet. But Opa was not daunted despite the brick walls he faced in getting sponsors. In his book Opa Williams: Father of Modern Comedy, Zik Zulu Okafor recounts one of such encounters: “He had gone to an electronic company to seek sponsorship. The Indian man asked, “You want people to pay to come and laugh? Laugh is free my friend. Ok, come back in five years if you are serious,” he said, practically making a mockery of the idea. Ten years later, this same Indian would see him and say, “My friend, you are a great man. You are a man of great vision.” Although his company does not sponsor events, he gave Opa a N200,000 cheque and five television sets” Okafor posits that “Night of a Thousand Laughs” has endured because before it, comedians were mere jesters and clowns, used at intervals of events and paid inadequately. Nigerians now pay yearly pilgrimage to “Nite of a Thousand Laughs.” In other words,

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Opa Williams made comedy a veritable business venture; he made Nigerians realise they have to pay to laugh. He created the comedy industry and set up the factory to feed the people. Although Opa started with the likes of late Mohammed Danjuma, Okey Bakassi, Sam Loco Efe, Boma Erokosima, Late Sammy Needle, Late Junior and Pretty, his factory has since produced many more comedians, a great number of them entertaining millions around the globe. Some within the younger generation, like Francis Duru, Yibo Koko, Ayodeji Makun, aka AY, Julius Agwu, Basketmouth, I Go Dye, Bovi, I Go Save, Gandoki, MC Abbey, Gordons, Michael Ogbolosingha, Klint de Drunk, Teju Baby Face, Maleke, Holly Mallam, Elenu, MC Shakara, Onyebuchi Ojieh (Buchi), Emeka Smith, Princess, and Lepacious Bose, among others. In more recent times, just like Opa Williams in the 90s, IK Osakioduwa is starting a comedy club of sorts named Comedy Nites. Not a comedian himself, IK is bringing fresh acts like Senator, Koloman, Larry J, Efe the Warri boy, Dee-One, Josh 2 Funny, Ovy Godwin, Ukodo, Daniel Egwede, KojaKaze, MIC, PHAGE, Damola, Laff Doctor, Whalemouth, Parkhage, Short Family, Ebube, Uwa, Mr. Paul and MCLively. He has already secured a spot on DStv. Comedy Nites is the presenter’s second attempt at TV shows. His first production ‘Highlites with IK’ enjoyed three years on air before the DStv channel paused it. For his latest effort, however, IK is still tilting towards a late-night show format only that in this case, it is strictly comedy. Owojaiye is a Communications Specialist and lives in Lagos Nigeria


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Tuesday 09 April 2019

BUSINESS DAY

EDITORIAL PUBLISHER/CEO

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

Awaiting a presidential post-election address

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he announcement on April 3 of Nyesom Ezenwo Wike as winner of the gubernatorial election in Rivers State ended the 2019 general election cycle. There were many “inconclusive” matters with the elections, but finally it is over. Now is the time for Nigeria to draw the line on the elections and act on the lessons therefrom. One of the significant actions needed to begin the evaluation is an address to the nation by President Muhammadu Buhari. Many issues require the weight of a presidential address. The 2019 general elections marked 20 years of uninterrupted democracy in Nigeria. It is a significant landmark, and the longest stretch of democracy in our land. Military intervention, a regular feature of Nigeria’s political history, disrupted our journey to democracy. And the president played a leading role in this process.

As the one who put a stop to the Second Republic, Buhari is a major player in Nigeria’s political journey and our failed and successful attempts at democracy. The December 1983 coup was followedby15 long years of military rule. The nation then tried a military-supervised democracy. The mutation did not live long, understandably. PMB has been involved in our democratic journey since 2003, after convincing himself that the return to the civilian path in 1999 with the swearingin of a former military ruler like himself was here to stay. Nigerians deserve to be acknowledged for keeping faith with democracy for 20 years. It will take effect from May 29 when the president takes the oath for his second term and a new cycle begins to count for most elected officials. The 2019 general elections was the country’s costliest election ever and the one with the highest number of candidates for many offices. We had the highest number of political

parties on the ballot. We also had the highest number of registered voters. Paradoxically, the elections yielded the lowest voter participation at the polls. The paradox of high registration yet low turnout deserves attention. What went wrong and why? INEC should commence the query by and for itself, but other players in Nigerian democracy need to be part of a thorough going probe into these matters. The quality and conduct of the elections also need to be addressed. Many citizens suffered violence and trauma in the course of the elections. We lost many lives. Mr President’swords could be the balm to soothe the pains of the many persons who suffered during the elections. Nigerians need to get a sense of the direction of the government from the man at the helm. Citizens await indications of the what, where, when, why, who and how of the government Mr President will form next month. Mr Pre sident has s aid

things will be tougher in his second term. A clearer explanation of the ramifications of these tougher times will help us prepare for it. The president has to assure of his government’s capacity and capability to tackle the challenges. Mr President ran the government with same cabinet for four years; despite clear evidences of non-performance and calls for a rejigging. It was either a mark of loyalty to his team or, indolence as many suspect, to refuse to make the required changes. Similarly, there was a little or no activity when it came to carrying out critical policies. The economic indicators, above all, continue to worry individuals and companies; many firms have left and are leaving Nigeria. A Presidential address will show empathy and concern for all. Above all, it will bond the populace with the President and prepare grounds for May 29. Speak to Nigerians now, dear Mr President.

Bashir Ibrahim Hassan

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

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Tuesday 09 April 2019

BUSINESS DAY

Media business Inspiration, courage big idea behind Glo’s Anthony Joshua TVC Stories by Daniel Obi Media Business Editor

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ll our dreams can come true, if we have the courage to pursue them” said Walter Elias Disney, entrepreneur and pioneer of the American animation industry. Most young people have dreams and big dreams but what is lacking is the courage and inspiration to pursue them. While some people look for excuses; blaming family background, the environment or procrastinate on their dreams, others are either inspired by other people, develop the courageous mind-set personally or work through thick and thin to see their dreams come through. It is true that some people regard Nigeria as a difficult environment, still, within the same setting, some people have achieved successes leveraging inspiration and courage. This is part of the message contained in the Anthony Olufemi Joshua TV commercial by Glo, one of Africa’s fastest growing telecommunications companies. The commercial is not only celebrating Nigerian Anthony Joshua, the current World Heavyweight Boxing Champion who moved from

brick-laying job to stardom, but the advert is underscoring the inspiration and determination in the former bricklayer who is today a global champion. Nigerians have always been recognised globally for their determination and doggedness and Anthony Olufemi Joshua re-echoed this in the Ad when he said “there is always been a big piece of my heart as a Nigerian and I do believe that it is that piece that sets me apart. It always says to me, ‘never give up, dream big. We come from a nation of warriors and that is why I believe in Glo. We have that same tenac-

ity, that Nigerian fighting spirit that makes us game changers. We are relentless. We don’t just face our challenges; we step into the ring to win again and again and again. If you believe in yourself, there is no limit to what you can achieve. Yeah, I used to be a bricklayer in England but now I am heavyweight champion of the world” The big message of Anthony Joshua turning from ‘ordinary’ bricklayer to world champion as contained in the TV commercial has caught many Nigerian youth surprised. How did he do it? This is the question on their lips as they

continuously watch the Ad repeatedly on their devices. The reactions on the Glo commercial start with a female university student watching the Anthony Joshua commercial in her tablet. A teenage boy was also seen watching the TVC in his father’s sitting room. It did not stop there; the Ad captured the attention of an Aba tailor, students and athletes, all studying and tapping inspiration from the Glo TV commercial. The bricklayer-turned boxing Champion in the commercial revealed the parallels between him and Glo. Some of these include the never-say-die, can-do spirit of Globacom which undergirds and constitutes the philosophy of the telecommunications giant is shared by the Champ who says in the TVC, “You need strength?” Yeah, that comes from the hard knocks that life throws at us. And we are Nigerians, we know all about that”. With the commercial, Glo which was launched into the Nigerian market 15 years ago with Nigerian identity, has not only revealed its position as champion but inspired many Nigerians on their dreams. With the commercial, Glo is restoring hope to many Nigerian youth that their dreams can be achieved even when they think that the environment is not supportive.

Domino Pizza puts its investment in Nigeria at over N8b, revamps menu for consumers

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he CEO of Eat ‘N’ GO Limited Patrick McMichael, operators of Domino Pizza, leading pizza chain globally has put the company’s investment in Nigeria at N8 billion in the last seven years since it started operation in the country. The company which started operation in Nigeria in 2011 today has over 90 outlets with over 2000 staff. McMichael believed that its total investment in Nigeria could be more when other factors such as human capital development and other infrastructure are factored in. The firm which said it is in constant innovation to continuous delight its customers recently revamped its extensive menu in Nigeria. Labeled the Domino’s Taste the Xtra Menu, the exercise reinforces the company’s commitment to providing the best customer experience through high quality products and customer service. “Domino’s Pizza has uniquely customized its pizzas to suit the taste buds of its Nigerian customers with a significant enhancement of all the pizzas, including new flavors, at a more value driven pricing”.

McMichael further said that improvements in the new menu have been designed to provide customers with better value by providing Xtra toppings, Xtra flavors and Xtra cheese at reduced menu prices to present

customers with a wider selection of quality pizza options that are delicious and affordable, the company said. Also speaking to BusinessDay at the launch of the menu, the

L-R: , Ilyas Kazeem, marketing manager, Domino’s Pizza; Patrick McMichael, CEO, Eat ‘N’ GO Limited and Amalia Sebakunzi marketing director, Eat ‘N’ GO Limited, at the launch of Domino’s Pizza New Menu in Ikoyi, Lagos. www.businessday.ng

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Union Bank named ‘2019 Advertiser of the Year’

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nion Bank has been named ‘Advertiser of the Year’ by CHINI Africa, Cannes Lions Official Festival representative in Nigeria and organisers of the annual Creativity Week. The Bank also received the Bronze category award for ‘Integrated Marketing Campaign’ of the Year. The awards were officially presented at the 2019 Pitcher awards ceremony, in recognition of the brand’s creativity in the development of impressive advertising campaigns; particularly the ‘Clear Your Doubt’ campaign with its popular tagline - Don’t be an Uncle Thomas, and the more recent ‘Enabling Success’ Television Commercial. Both campaigns received wide acclaim from advertising professionals, customers and the general public. The commercial which communicated strong themes of introspection, perseverance, healing and hope of a better future for Nigeria, also emerged the most watched Nigerian Commercial on Youtube in 2018 with over 2.7million views, a statement from the bank said. Receiving the awards, the Head of Corporate Communications and Marketing, Ogochukwu EkezieEkaidem said; “Our brand is an essential part of our identity and we are truly honoured to be recognized as ‘Advertiser of the Year’. We are pleased that our campaigns continue to resonate deeply with audiences across Nigeria and beyond. Union Bank’s goal was to elevate the voice of the everyday Nigerian for whom we have enabled success for over 100 years, and we thank CHINI Africa and the general public for acknowledging our efforts.”

Campaign: Kwesé iflix to reward consumers Marketing Manager, Domino’s Pizza Nigeria, Ilyas Kazeem, said “Our menu revamp is aimed at reaffirming our continuous quest for providing only the best quality pizzas to our customers. We are passionate about delivering hot, fresh, delicious, cheesy & juicy pizzas with loads of toppings to provide happiness in every bite. Also, reducing the prices of our pizzas is a way of ensuring that more people can afford yummy pizzas, and enjoy extra value.” “We are super excited to introduce our Domino’s Taste the Xtra Menu which is loaded with Xtra flavors, Xtra cheese and Xtra toppings. We invite our customers to Taste the Xtra as our menu is now bursting with delightful flavours. As a brand, we listen to our customers, and following their requests, we have improved our whole menu to ensure that our Pizzas deliver an Xtraordinary experience to all our customers. We welcome our customers to explore our new pizzas and begin to find new favorites in them,” he added. @Businessdayng

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wesé iflix has introduced an Easter Egg Hunt to reward loyal users of the mobile television app. The promo launched on 26 March and will end on 22 April. This Easter, three lucky subscribers will win a one-year VIP Kwesé iflix subscription while 100 subscribers will receive an Uber voucher in the Kwesé iflix Easter Egg Hunt. Giving details of the promotion, Ngozi Madueke-Dozie, general manager Kwesé iflix (West Africa) in a statement said “Somewhere in the Kwesé iflix app are hidden special Easter eggs. When Kwesé iflix users find them, they will need to send a direct message to our Facebook, Twitter or Instagram pages with their full name, mobile number, email address and the special Easter egg code. They will be entered into a draw and the winners will be announced on 22 April via our social media platforms.” Kwesé iflix viewers can stream any of the live religious channels including EWTN and TBN or On-Demand programmes, such as ‘Enjoying Everyday Life with Joyce Meyer’ to recharge their spirits.


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Tuesday 09 April 2019

BUSINESS DAY

Branding Coollink introduces new prices in Workforce Group challenges organisations to equip employees with future work competences Nigerian market, makes satellite Stories by DANIEL OBI

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orkforce Group, a foremost HR and business consulting firm has urged organisations to start investing on their employees to inspire the necessary skills required to thrive in the future marketplace. This declaration was given at the Workforce Group third annual learning and development leaders’ conference in Lagos. Speaking on the topic ‘building a future-fit workforce through organisational learning agility’, the Chief Executive Officer of Avon Healthcare, Adesimbo Ukiri emphasised that organisations must be prepared enough to equip their employees with a variety of skills for jobs that do

not exist today if they are to thrive in the future of work. According to her, “A knowledgeenabled learning-based workforce offers a unique competitive advantage in today’s rapidly evolving marketplace.” Lending his voice to the discussion, the Deputy Managing Director, Workforce Group, Foluso Aribisala, shared a few tips on the best and next practices for organisations to optimise the return from their leadership development investments. He underscored the importance of leaders developing next leaders by deliberately cascading the leadership philosophy across their organisations. The 2-day event themed: The Future is Now: Learning and Development as a Catalyst for Shaping the Future of Work and Organisational

Performance attracted learning and development heavyweights across a broad spectrum of industries and sectors. The impressive gathering of CEOs and learning and development professionals discussed how forces of disruption and innovation are reshaping the world of work and the pivotal role of Learning and Development in building competencies required to drive high performance and long term competitiveness. Other notable speakers at the forum include the CEO of CARS45, Etop Ikpe; Regional Head, Learning & Talent Management, PZ Cussons, Temitope Adedayo-Ojo; Head, Learning & Development, Ecobank, Ayotunde Opeoluwa; Head, Learning & Development, Sterling Bank, Adewunmi Oluremi and Head, Talent Management & Career Development, Airtel, Tonye Boham.

L—R: Head, Talent & Career Development Airtel, TonyeBoham; Head Dangote Academy, Juliet Oshagbemi; Head Learning & Development Ecobank, AyotundeOpeoluwa; Regional Head Learning & Talent Management PZ Cussons, TemitopeAdedayo-Ojo; Head Learning & Development Sterling Bank, AdewunmiOluremi; Head HR FMDQ, FunlolaAkintonde; Director Learning & Development Workforce Group; Olasunkanmi Adenuga all panelists at the 3rd Annual Learning & Development Leaders Conference Organised by Workforce Group in Lagos recently.

broadband more affordable

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n a bid to make more Nigerians who now heavily rely on internet, Coollink and Konnect Africa, industry partners for more than 2 years now, have introduced new reduced prices. This is an attempt to bring connectivity everywhere in Nigeria. The company told journalists in Lagos that it is pleased to offer Nigerians new ASTA packages and equipment prices, to make satellite internet more affordable for subscribers in Nigeria. This new positioning is to further bridge the connectivity gap in the country by enabling both professional and residential customers to benefit from pocket friendly offers. With packages starting from N5,500 and equipment from N36,000, consumers can surf on speeds of up to 20Mbps wherever they are in Nigeria. Furthermore, subscribers will still enjoy free internet browsing from 12am to 6am daily. “This offer represents another giant stride from Coollink, the first and only satellite broadband provider to offer data rollover for consumers in the market. This data rollover will still be available for ASTA customers on the new package prices. Providing broadband through satellite technology, ASTA service is available to everyone in Nigeria no matter how remotely located they are”. Shahin Nouri, Chief Executive Officer of Coollink added: “in late 2017, we successfully transformed Satellite Broadband Services in Nigeria. We simplified purchasing,

installation and data plan subscription processes. Indeed, with our online shop, Asta.ng, customers can order high-speed Internet connections from anywhere in Nigeria and be connected within 2 to 5 business days. “Today we are improving further on the pricing front by reducing and subsidizing heavily price of equipment and subscriptions, reducing equipment price from N99,000 to N36,000 and introducing a 5GB plan at N5,500. I am very proud to say that with Konnect

Africa’s partnership we improved the whole customer journey and offer affordable satellite broadband to everyone. Jean-Claude Tshipama, Chief Executive Officer of Konnect Africa, noted: “Nowhere is the digital divide felt more than in Africa. On this rapidly developing, young and vibrant continent, every business and individual is keen to reach their potential. An affordable high-speed internet connection is essential to their success”

Arnold and Son demonstrates mechanical, innovative strength at Basel Watch, Jewellery show 2019

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ast month’s Watch and Jewellery Show usually held in Basel, Switzerland was not only exhibition of pieces with array of tints, magnificence and attractiveness but display of innovations backed by technologies. Heavy weights in watch manufacturing were in Basel event, the gathering of international watch and jewellery industry, to continuously make statements on their technologies which have become pride of individual personalities. High technology has penetrated all sectors and watch industry has since embraced it to develop pieces hard to resist in spite of proliferation of timing gadgets and cells. The watches are beyond the celebration of rhodium imbued pieces with alluring straps but evidence of reliability, water resistance, accuracy and durability. At Basel, were retailers and watch connoisseurs including Polo’s management led by Managing Director, John Obayuwana and Executive Director, Jennifer Obayuwana. Time piece manufacturers came with genre

of pieces to satisfy their different consumers since watches, like other wears are personal with individual tastes in design, colour and style. One of the dominant names in time piece, Arnold & Son had another opportunity to reveal itself and new technologies at the Basel event held between 21st and 26th March 2019. It came with array of product designs to consumers delight. Its HM Perpetual

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Moon Aventurine was “revealed as a spectacular solid gold moon phase harmonizing with a sparkling blue aventurine quartz dial and paired with an in-house Arnold & Son mechanical calibre”, says Michael Weare in Watchuseek Website. “Beyond technological aspects of the HM Perpetual Moon Aventurine, the entire rhodium plated movement features hand finishing including

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chamfered with polished edges, Côtes de Genève and fine circular grained bridges, circular-grained wheels, blued screws with polished and chamfered edges”, Weare further writes. Other displays show Arnold & Son reinterpreting its emblematic symmetrical skeleton Nebula watches in new proportions. Information available reveals that the threedimensional, openwork movement and dial of the Nebula offer views into the very heart of the in-house manufacture calibre. “Its gold case has been reinvented in a 38 mm diameter, magnifying the hypnotic micro-mechanical spectacle of the hand-wound movement “Besides the careful attention to equilibrium, the powerful allure of the Nebula also derives from the calculated proportions and ratios of diameter versus height, size and placement of every gear and wheel. Rather than being an assembly of disparate components – case, dial, and movement – Nebula was designed from the ground up to be completely holistic, with all components blend@Businessdayng

ing harmoniously into one. For instance, no less than ten bridges of this complex calibre form the dial. Deftly blending its British heritage with its Swiss watchmaking savoir-faire, Arnold & Son offers a new calibre to its Time Pyramid collection. With a skeletonized pyramidshaped tourbillon seemingly floating between two sapphire crystals, the Time Pyramid Tourbillon is a true rendition of technical prowess and sleek elegance. The Time Pyramid Tourbillon presents a cohesive combination of watchmaking feats organized in a pyramidal architecture. The tourbillon and the two power reserve indicators are superposed by a sapphire crystal dial indicating the hours itself, crowned with a rhodium plated ring for the minutes. This exclusive construction offers a lively-look and three-dimensional face to the timepiece and, to further enhance the balance and symmetry. Watches are pieces of engineering marvel and exhibitors at the Basel event including Arnold & Son and other exhibitors were able to display the master piece in watches.


Tuesday 09 April 2019

BUSINESS DAY

COMPANIES & MARKETS

15

CBN to continue mop up as N33bn matures this week

COMPANY NEWS ANALYSIS INSIGHT

Pg. 17

Sector series

The Companies & Markets team is publishing a series on the various sectors of the Nigerian economy to evaluate the financial health of companies playing in each of the sectors using a number of key metrics that would depend on the specific sector. This week we begin with Downstream Oil and Gas... Continued from Monday, April 8, 2019. 

Downstream Oil & Gas: A tale of shrinking margins DIPO OLADEHINDE & OLUWASEGUN OLAKOYENIKAN

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Operating Margin he operating margins of listed players operating in Nigeria’s downstream sectors witnessed a general contraction in 2018, unlike other margins where at least a company recorded improved performance. The average operating margin for the whole downstream sector declined from 5.19 percent in 2017 to 3.19 percent in 2018 which reflects how poorly firms generate profit on every naira earned from sales, after paying administrative costs of running the business, workers’ salaries, cost of production and other operating expenses, excluding interest payment and taxes. The margin, which could be referred to as return on sales, is also a profitability ratio gives investors an idea of the competency and the flexibility of the company’s management, the higher the operating margin, the more profitable a company’s core business is and vice versa. Our analysis reveals that all the six oil and gas firms considered were affected by shrinking operating margins worsened by declines in operating profits in some of the companies. But in spite of this, 11 Plc shed 2.41 percentage points to generate 8.04 percent return on its sales in 2018 compared to 10.5 percent in 2017, overtaking Oando with 6.48 percent as the company with the highest operating margin. Only Forte Oil and 11 Plc grew operating profits in 2018. Forte Oil’s earnings before interest and taxes surged 1.52 percent to N2.68 billion, while that of 11 Plc was up 1.15 percent to N13.24 billion, the highest in the subsector after Oando’s N44 billion. MRS moved from 0.09 percent operating margin in 2017 to a negative margin

in 2018 owing to an operating loss of N1.48 billion recorded for the year, while Forte Oil and Total’s returns on sales dropped 1.07 percentage points to 1.99 percent and 3.19 percent in 2018 from 3.06 percent and 4.26 percent in the previous year, respectively. “It’s not just a firm problem it’s an industry problem which is another reason why it’s more worrisome.

If we don’t find a solution quickly as possible, they might go bankrupt,” Charles Akinbobola an energy expert at Lagos based Cinovate Energy Limited. Eterna’s operating margin fell the least having recorded a marginal decline of 0.75 percentage point in 2018 to 1.1 percent as against 1.86 percent, indicating the firm realised a naira as profit before pay-

ing interest and taxes from every N100 earned from sales in 2018. “Although the government needs to do more by creating a more enabling environment for them to operate, however, some of these companies also need to be more creative in how they make profit and leverage more on technology to reduce cost,” Akinbobola told BusinessDay.

When compared to the average operating margin in the industry in the year under review, Total Nigeria, which was below an average of 5.19 percent in 2017, joined Oando and 11 Plc that have consistently positioned themselves above the business’ average. Akinbobola added, “it’s very sad that the majority of the petrol stations in Nigeria are still performing the

majority of their operations manually.” Oando Plc had the highest revenue in the downstream sector with a 36.60 percent increase to N679.47 billion from N497.42 billion in 2017. Oando’s losses narrowed to N18.3billion ($59.8million) for 2018 as its auditor, Ernst & Young, questioned its “going concern” status, saying that its current liabilities were in excess of its current assets. MRS recorded a -16.38 percent decline in revenue from N107.09 billion in 2017 to N89.55 billion in 2018 while Total recorded a 6.92 percent increase in revenue from N288.06 billion in 2017 to N307.99 billion in 2018. 11 Plc had a 31.41 percent increase in revenue to N164.61 billion in 2018 from N125.26billion in 2017 while Forte Oil and Eterna recorded 56.32 percent and 45.57 percent revenue increase to N134.7 billion and N251.88 billion respectively. Price-Earnings and Price-to-Book ratios Further analysis into the performance of the key players in Nigeria’s downstream oil & gas industry to show their respective values indicates investors’ mixed perception of the oil companies. Using the price-earnings ratio, a key valuation ratio for measuring the current share price of a company relative to its earnings per share, it was apparent that investors are willing to pay more on Forte Oil, MRS Oil and Total Nigeria for every naira of their current earnings than their peers. For instance, after the close of business on Friday at the Nigerian Stock Exchange (NSE), the priceearnings (P/E) ratio of Forte Oil stood at 100.27x; MRS Oil, 17.41x; and Total Nigeria, 8.35x. These compare with Eterna Oil at 6.89x; 11 Plc, 5.68x; and Oando, 2.52x, lower than the industry average of 23.52x, and

Editor: LOLADE AKINMURELE (lolade.akinmurele@businessdayonline.com) Graphics: David Ogar

Continues on page 17


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Tuesday 09 April 2019

BUSINESS DAY

COMPANIES&MARKETS Downstream Oil & Gas: A tale of shrinking... Continued from page 15 8.17x when Forte Oil’s P/E is ignored. Similarly, a look into the companies’ price-to-book (PB) ratios, another valuation metric that measures the value investors attach to a company’s market value relative to the book value of its equity, shows that the share prices of Total Nigeria and Forte Oil were valued more than twice of their book values. The book value, also called net asset value, serves as the total value of the company’s assets that shareholders would theoretically receive if the company liquidates its assets and paid off all its debts. The PB ratios of Total Nigeria, Forte Oil and 11 Plc stood at 2.17x, 2.13x and 1.90x, respectively, higher

than the industry average of 1.20x, while the market prices of Eterna, Oando and MRS Oil are priced lower at 0.40x, 0.31x and 0.28x, respectively. The implication of these is that companies with PB ratios above 1x could mean their stocks are overvalued and investors are eager to pay more for the companies than the worth of their net assets. On the other hand, companies with stocks having less than 1x PB ratios could be undervalued, implying the companies’ shares are selling for less than their assets are actually worth. Based on the above ratios, Total Nigeria and Forte Oil are potentially overvalued stocks despite losing 15.9 percent and 31.5 percent in the last one year to close at N196 and N27.4 on Friday, respectively. Eterna Oil has lost more than 31.8 percent of its market value to close at N4; Oando’s one-year return

remained at the negative territory of 17.36 percent to settle at N4.95, making stocks of the two oil firms undervalued, MRS dropped 26.5 percent to N20.85. However, in the last 52 weeks, 11 Plc gained 4.86 percent to close at N170, outperforming the NSE Oil & Gas index which was 18 percent down from its level a year ago. Four takeaways from analysis of Nigeria’s downstream sector After a lucid analysis of industry margins and listed company margins of 2018 financial reports, here are the major takeaways for investors, financiers, consultants, contractors, advisers, policymakers and other stakeholders in Nigeria downstream sector.

Many of the downstream firms need to be more imaginative in expanding revenue by looking beyond PMS to grow revenue by exploring and investing more in other products like aviation fuel, lubricants, diesel, liquefied petroleum gas, bitumen and petrochemical products. For practical example are 11plc and Forte Oil that had better margins than other firms due to an increasing performance from other products apart from PMS. Fuel subsidy still hangs over the sector despite Nigerian National Petroleum Corporation (NNPC) assuming sole importer of petrol since October 2017, when it became obvious that the independent oil marketers were having challenges relating to their capacity to cope with the harsh realities of doing business in the sector. Although the issues surrounding fuel scarcity is no

longer a usual occurrence, however, stakeholders are of the opinion that the current model is shortchanging the sector from recording improved margins. Recall, Africa biggest oil producing country spent N730.9 billion on subsidizing price of fuel in 2018, an amount which was far higher than funds allocated to education, health, infrastructure and other key ministries and parastatals that would have increased operating margins of downstream which could have a multiplier effect on Nigeria economy. Another major reason behind the shrinking margins is the lack of deregulation in the sector. Industry experts believed deregulation will improve the efficient use of scarce economic resources by

subjecting decisions in the sector to the operations of the forces of demand and supply which will attract new sellers, buyers and investment/investors into the market, thereby increasing completion, promoting overall higher productivity and consequently, lowering prices over time. The ultimate effect of this chain of activities is to increase gains of Nigeria’s increasing population who would be getting the most out of their natural resources. Debts profiles on account of unpaid subsidy arrears of over N130.7 billion by the government still posing huge financial challenges to downstream sector. In November 2018, Banks confiscated multibillion naira worth of assets, including 79 filling stations and nine tank farms from fuel marketers as the lenders intensified collateral take-over spree in the downstream oil and gas industry.

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L-R: Mr. Kassim Adeleke, Chief Executive Officer, Crown Refinery and Petrochemicals (CRP) Limited and Governor Oluwarotimi Akeredolu  of Ondo State, During a partnership  signing agreement by Crown Refinery and Petrochemicals (CRP) Limite and Ondo State Government for the construction of a Refinery at the governors office in Akure.

MARKETS

CBN to continue mop up as N33bn matures this week ... Inter-bank rate to remain high HOPE MOSES-ASHIKE

The money market would be awash with liquidity this week as N33.0 billion worth of instruments is expected to mature on the 11th of April 2019. However, the Central Bank of Nigeria (CBN) is expected to mop up the excess liquidity using Open Market Operation (OMO). The CBN resumed its OMO auctions last week, after holding no auction in the prior week. The auction was held on the 4th of April for two instruments, 203-day and 304-day, which were auctioned at discount rates of 13.0 percent and 13.04 percent respectively. The total amount allotted for the instruments were N24.6bn (203-day) and N176.4bn (304-day). Consequently, the money market rates – Open Buy Back (OBB) and Overnight (OVN) rose significantly during the week, settling 9.9 percent and 10.2 percent higher by the end of the week to 19.7 percent and 21.0 per cent respectively. “We expect rates to remain elevated this week”, said analysts at Afrinvest Securities Limited. A report by Afrinvest shows that the secondary market moved in line with liquidity levels at the start of the week

as average yield in the market declined by 0.2 percent to 13.4 percent. However, as liquidity levels moderated through the week, yields trended upwards, before paring on the final day of the week to settle the average yield at 13.4 percent. The CBN held a primary market auction on Wednesday, offering 91-day, 182-day and 364-day instruments, which closed at marginal rates of 10.3 percent 12.6 percent and 12.9 percent respectively. There was oversubscription recorded across all instruments on offer: 91-day (2.0x bid-to-offer), 182-day (1.3x bid-to-offer) and 364-day (2.3x bid-to-offer) with a total amount of N95.7 billion successfully allotted in line with the offered amount. At foreign exchange market, naira maintained its stability even in the absence of regular intervention last week by the CBN. The stability in the naira was as a result of the about US$698.4 million increase in foreign reserve levels to US$44.4 billion (29/03/19) largely driven by the continuous increase in foreign portfolio buying interest in the relatively attractive fixed income market. Consequently, the Naira in the parallel market remained

flat at N360.00/US$1.00, while CBN spot rate depreciated 5kobo W-o-W to N307.00/ US$1.00. At the Investors and Exporters Window (I&E), the NAFEX rate appreciated 38 kobo W-o-W to N360.30/ US$1.00 from N360.68/US$1.00 in the prior week. Activity level in the market improved as total turnover increased to US$1.2 billion, up 11.4 percent W-o-W from US$1.1bn in the prior week. However, total subscriptions in the FMDQ OTC futures market increased 3.7 percent W-o-W to US$7.7 billion from US$7.4 billion largely driven by investor buying interest in the March 2020 instrument, which was up 315.2 percent to US$147.5 million from US$35.5 million in the prior week. The CBN on Friday injected the sum of of $247.8million in the retail Secondary Market Intervention Sales (SMIS) and CNY 34.8million in the spot and short tenored forwards segment of the inter-bank foreign market. The intervention was for requests in the agricultural and raw materials sectors. The Chinese Yuan, on the other hand, was for Renminbi denominated Letters.

Investment One launches USSD code to drive financial inclusion MICHAEL ANI

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nvestment one financial service limited has just launched its USSD, *5678#, to drive financial inclusion and provide seamless financial services to its customers. Speaking during the launch, Managing Director of Investment One, Ezekiel Oluyori, said the USSD code is geared towards effective financial inclusion and is easy to use and most of all, user friendly, “this USSD code is a service geared towards effective and efficient seamless financial transaction. It has been creatively coined and designed to be easy, stress free and user friendly, strategically providing a world class service,” Oluyori said. According to him, Invest-

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ment One is one of the leading financial institutions that have creativity and innovation at their fingertips. “Our financial institution has swerved her way to the very top. We create and provide innovative services to the delight of our customers,” he said. The Chief Technical Officer, Investment One financial services, Fagbemi Fisayo, stressed that the USSD code which is the first of its kind, was created tactically by their IT experts to provide maximum security on the platform. “We also recommend that customers keep their pin secret.” He further said, “We have developed this as the first of its kind, where you can transact without necessarily having to go to the bank or stockbrokers. It can be done in the comfort of your home. We are reaching strategic @Businessdayng

goals by making it accessible to everyone.” He added that its USSD code functionalities and features varies from, opening an account, to checking account balance, and creating pin for security amongst other things. More so, it provides trading services, value added services and non-trading services. According to Fisayo, retail trading is low in Nigeria, and this product has been as well created to address the retail sector, making it easy and convenient for them to buy and sell. “We have strategically been able to handle and address this critical part of the retail sector, making it easy and convenient to buy and sell. Interestingly also, the ease of being able to open an account with this code has made us the market leader.”


Tuesday 09 April 2019

BUSINESS DAY

LEGALPERSPECTIVES With Odunayo Oyasiji

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Case Review

Bolanle Abeke V. The State (2007) LPELR-SC.271/2005

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hat to note: This is a matter that was concluded at the Supreme Court. It bothers on a common occurrence in business or commercial transactions- issuance of dud cheque. This Supreme Court authority will give an insight into its legal implication and further shed light on the criminal aspect to it. Facts Bolanle Abeke obtained a loan of N2000 from Ganiyu Ajani (in the presence of his wife) on September 4, 1981. The purpose of the loan was for her to execute the a contract awarded to her by the Ogun State Ministry of Agriculture. A week after, she approached him for another loan of N2000 but he gave her N1300. He requested that the loan transaction be documented and the appellant decided to give a post-dated cheque of N3300 in favour of Ganiyu Ajani. The appellant being an illiterate sought the assistance of Ganiyu Ajani (in the presence of his wife) for him to help write out the cheque so she can sign. He rendered the help. He (Ganiyu Ajani) presented the cheque on the due date and same was not honoured as Bolanle Abeke does not have enough funds to pay the amount on the face of the cheque. He mounted pressure on the appellant to pay the back the loan but she didn’t. Instead, she sent people to him pleading for more time. In 1989, Ganiyu Ajani discovered that the Ogun State Ministry of Agriculture had paid the appellant on the contract she executed. Yet, the appellant refused to pay back the loan. Therefore, Ganiyu Ajani instituted an action for the recovery of the money. In reaction to that, the appellant reported to the police that Ganiyu Ajani stole her cheque. He was arrested and prosecuted. However, he was discharged and acquitted based on the evidence of his wife and the confirmation by a handwriting analyst that the signature on the cheque belonged to the appellant. Based on the foregoing, Bolanle Abeke (the appellant) was charged and convicted of an offence under Section 1(1)(b) of the Dishonoured Cheques (Offences) Act No. 44 of 1977 by justice Popoola of the High Court of Ogun State, Abeokuta judicial division. The appellant was sentenced to a two-year term of imprisonment. The appellant being dissatisfied with the ruling appealed to the Court of Appeal. The Court of Appeal dismissed the Appeal and affirmed the sentence of the High Court. The Appellant still not satisfied decided to appeal to the Supreme Court. Issues for determination The appellant formulated one issue for determination. The issue was “Whether the learned Justices of the Court of Appeal were right in affirming the decision of the trial court that the prosecution had proved its case beyond reasonable doubt in the circumstance of this case.”

law. I am unable to accept the argument of appellant’s counsel that the cheque issued by the appellant was to be seen only as a documentation of the loan transaction between the appellant and P.W.2 (Ganiyu Ajani); and that exhibit ‘B’ (the dishonoured cheque) be held not to possess the attributes ascribed by law to such an instrument.” The court further held that the submission of the appellant is not reasonable as it was not her first time of handling a cheque. Therefore, she has a full understanding of its implication. On this basis, the court held that the standard of the law as to her liability will stand i.e. as stated under Sections 1(1),(2) and (3) of the Dishonoured Cheques (Offences) Act, Cap. 102, Laws of the Federation 1990-

The respondent agreed with the sole issue formulated by the appellant. Aruguement/Submission The appellant’s counsel argued that the court should not view the dishonoured cheque as a means of payment of the loan by the appellant. It is merely meant to document the loan transaction between the parties. It is meant to show that the appellant received the sum on the face of the cheque from Ganiyu Ajani. He stated that this could be inferred from the record of court i.e. “A week later she again begged for another N2,000.00 but he asked her to come back and he later

However, in the face of overwhelming and uncontroverted evidence of a handwriting analyst, it became obvious that she signed the cheque. Also, she gave contradictory evidences with regards to reporting the stolen cheque to the police in 1981. She stated that it was reported in writing and later claimed that it was just oral

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gave her N 1,300.00 because that was what he could afford. His wife was present on both occasions - but he on the second occasion insisted to have both documented - but accused said instead she would issue a post-dated cheque for both amounts. She opened her bag and brought out the cheque book but said she could only sign her name and put her stamp but could not write and even in the Bank she is always assisted to write her cheques. He obliged her and she signed the cheque and stamped it with her stamp and delivered same to him a post-dated cheque dated 29/9/81.” Judgement of Court The Court stated that the defence being put forward by the counsel to the appellant defers from the defence of the appellant herself. Her defence is that she did not issue the cheque and that same was stolen by Ganiyu Ajani. However, in the face of overwhelming and uncontroverted evidence of a handwriting analyst, it became obvious that she signed the cheque. Also, she gave contradictory evidences with regards to reporting the stolen cheque to the police in 1981. She stated that it was reported in writing and later claimed that it was just oral. The court held that “The issuance of a cheque has certain connotations in law. A cheque issued by a drawer and accepted by the drawee serves two purposes. One is that of documenting the particular transaction. The other is that, it is a medium of payment, the issuance of which has far reaching implications in

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“1.(1) Any person who (a) obtains or induces the delivery of anything capable of being stolen either to himself or to any other person; or (b) obtains credit for himself or any other person, by means of a cheque that, when presented for payment not later than three months after the date of the cheque, is dishonoured on the ground that no funds or insufficient funds were standing to the credit of the drawer of the cheque in the bank on which the cheque was drawn, shall be guilty of an offence and on conviction shall:(i) in the case of an individual be sentenced to imprisonment for two years, without the option of a fine, and (ii) in the case of a body corporate be sentenced to a fine of not less than N5,000.00. 2. For the purposes of subsection (1) of this section (a) the reference to anything capable of being stolen shall be deemed to include a reference to money and every other description of property, things in action and other intangible property; (b) a person who draws a cheque which is dishonoured on the ground stated in the subsection and which was issued in settlement or purported settlement of any obligation under an enforceable contract entered into between the drawer of the cheque and the person to whom the cheque was issued, shall be deemed to have obtained credit for himself by means of the cheque notwithstanding that at the time when the contract was entered into, the manner in which the obligation would be settled was not specified. 3. A person shall not be guilty of an offence under this section if he proves to the satisfaction of the court that when he issued the cheque he had reasonable grounds for believing, and did believe in fact, that it would be honoured if presented for payment within the period specified in subsection (1) of this section.” The Supreme Court dismissed the appeal for lack of merit.

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Tuesday 09 April 2019

BUSINESS DAY

What men really want: More time with their children Employers are out of step with a changing workforce that values paid paternity leave PILITA CLARK, FT

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he other week I was dawdling into work, thinking of nothing in particular, when I became aware that two people walking behind me were having a spectacularly interesting conversation. “I really want kids,” said one, in what sounded like a male voice. “Same here,” said the second, also sounding a lot like a man. “But the thing is,” said the first, “I’m not sure if she is that keen and I don’t want to be stuck home doing all the childminding. I really like my job.” I immediately stopped walking and started pretending to scrabble around in my bag so I could see who these people were. Sure enough, it was a pair of young men. Utterly ordinary, probably in their late twenties, dressed for a day in the office. As they wandered past, I stared at them, dumbfounded. This was an unfamiliar species. Obviously, I know a lot of younger men are more interested in parenting than their fathers. I have seen research from Google claiming millennial fathers watch more parentrelated videos on YouTube than mothers. And surveys showing young Britons are far more likely than baby boomers to think paid parental leave should be divided between a mother and father. Yet that snatch of conversation underlined how profoundly the workforce is changing — and how slowly politicians and business leaders are changing with it.

I was reminded of this again last week when the latest dismal batch of gender pay gap figures came out. Ye t a ga i n t h e nu m b e r s showed that men earn more than women on average, often by a whopping margin. This time we also learnt the gap has widened at thousands of companies. The difference persists for a lot of complicated reasons but much of it boils down to children: women still look after them more than men do and end up being paid less as a result. The discrepancy takes off after women give birth and continues to rise so that by the time

According to the European Commission, the evidence shows that when a new father takes parental leave, mothers go back to work more easily, female employment is higher and the gender pay gap is lower

a child is 12 years old, the gap is around 33 per cent. Yet governments, and companies, still cling to maternity leave that encourages women to do more parenting. The British government pays 26 times more to a mother on the average wage in the first year after a birth than a father, according to family researcher Duncan Fisher, one of a growing number of men calling for the scales to be balanced. In the US, a former CNN correspondent named Josh Levs says men “cried on the phone” to him after he went public with a legal battle he launched in 2013 over the broadcaster’s policy of offering biological fathers fewer weeks of paid leave than mothers and any parents who adopted. Men told “heartbreaking stories” of the pressure they felt to rush back to work and leave

their wives at home with their children, Mr Levs wrote in last month’s Harvard Business Review. Men are not just fed up in the US, the only country in the developed world that does not require companies to offer paid parental leave to either mothers or fathers. In the UK next month, the Court of Appeal is due to consider the cases of two fathers, a police constable and a call centre worker, who both claim to have suffered discrimination after being offered less shared parental leave pay than female colleagues on maternity leave. I doubt they will be the last to take such action. There is clearly pent-up demand from men to do more parenting. When Aviva, the British insurer, started offering men the same generous parental leave as

women last year, nearly half the UK-based staff who took time off in the first 10 months of the scheme were men. Diageo, the drinks group, announced a similar policy last week, just days after O2, the mobile operator, boosted its paid paternity leave. But those companies are still a minority. This needs to change. More countries should follow Sweden, a pioneer of well-designed paternity leave policies, and home to some of the EU’s highest female employment levels. According to the European Commission, the evidence shows that when a new father takes parental leave, mothers go back to work more easily, female employment is higher and the gender pay gap is lower. Something else should also be clear by now: a lot of men will be much happier.

Recruiters/tech: Disrupters derailed Personnel management needs real humans

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overs meet via phone a p p s. A m a z o n h a s shaken up shopping. Technology also helps match gig economy workers with employers. So digital disruption surely looms for employment services companies Randstad, Adecco and Manpower? Or maybe not. The three companies’ share prices have fallen sharply since early 2018, underperforming global equity indices by 15 per cent or more.

The trigger was not fears about business models, however. Rather, it was Europe’s economic outlook. Randstad and Adecco are focused largely in the continent’s biggest countries. Manpower is US listed, but its largest market is France. Forget fancy valuations or predictions about technology. These stocks are “80 per cent macro plays”, reckons Barclays. The best guide to their share prices are eurozone PMIs, or

purchasing managers’ indices, which gauge economic activity. When activity picks up, companies first take on temporary staff. When business slows, they are the first to be cut. PMIs have indicated bleak prospects for eurozone economies and employment companies. It’s that simple. The three have invested in technology to speed job matching and cut costs, but evidence of digital disruption is limited. One reason is job market di-

vergence. Uber’s ride-hailing service has hit regulatory snags. In recruitment, it is harder still to build platforms that work across borders. An engineer from Eindhoven is not the same as an engineer from Essex. True, LinkedIn and Google for Jobs are replacing newspaper job adverts. But Randstad and rivals operate behind the scenes, managing companies’ varying labour requirements.

Pers onnel manag ement needs real humans. Profit margins have remained steady over the past decade. Share prices have recovered this year but the big three all trade at only about 11 times forward earnings, well below their five-year averages. Investors could reflect on whether they might even benefit from disruption — helping reskill work forces, handling talent and shortages. Or just judge when PMIs will rise.


BUSINESS DAY

Tuesday 09 April 2019

19

How to study an MBA for free Scholarships are helping more students to attend business school without building up debt

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ebbie Craven was beaten to university by her daughter, who is midway through a psychology degree. But Ms Craven senior, who left school at 16 and last year started a master of business administration degree at Reading university’s Henley Business School, has one big advantage: unlike her daughter, she is not paying any tuition fees. Until 1998, undergraduates in the UK did not pay tuition fees. And historically business school was also often free for students. Employers would pay for two-year, full-time postgraduate courses, which were seen as the best way to build leadership skills for highflying executives destined for a place on the board. This practice has waned as companies have been forced to cut costs, particularly in the wake of the financial crisis. Most of the people who want to attend business school have had to fund themselves. Recently, though, the idea of MBA candidates being paid to study has been revived, this time with the help of scholarship funds built up by schools to help applicants who would not otherwise be able to afford it, and from funds accrued in governmentbacked schemes designed to boost training. Ms Craven, a 50-year-old hospital director, works for Ramsay Healthcare, one of the world’s largest private healthcare groups. The company must set aside money for workplace training under the UK’s apprenticeship levy scheme and it is using some of the cash to send executives to business school. “I have wanted to do an MBA for years but financially it was not previously possible, especially with the cost of bringing up children,” Ms Craven says. She is enrolled on a part-time executive MBA, and Henley now offers a variety of scholarships and bursaries to support the most promising candidates not able to access apprenticeship levy funds, and who would struggle to pay for the course. Henley’s dean, John Board, says the apprenticeship levy has helped improve the quality of the school’s intake. Sponsoring employers are

Debbie Craven had wanted to do an MBA for years but was deterred by the costs

selecting their MBA candidates from a wide variety of people with a diverse range of life experiences. “Every business school makes as much use as it can of scholarships and bursaries to encourage the kind of people they want to come on their courses”, he says. “We say, ‘if you want to come on the course we will find a way’.” In the US, scholarship funds have become a key tool for business schools to attract a mix of students to their MBA programmes, including more people from outside the traditional banking and consultancy sectors. A record 60 per cent of this year’s MBA class at Duke University’s Fuqua School of Business received scholarships, some with full payment of their fees. The school completed a $127m fundraising campaign last year, with the largest slice of money earmarked for student support. Bill Boulding, Fuqua’s dean, says scholarship fundraising has turned into an “arms race”, driven by a combination of rising tuition fees and declining applications demand for business schools in the US. “The reality is that there are schools with very deep pockets and they have the ability to offer quite a bit of scholarship support,” he says.

Judith Hodara, co-founder of admissions agency Fortuna Admissions, says she has seen a significant increase in scholarships in the 20 years she has been working in the sector. Her MBA clients collectively received a record $6m in financial aid this year, including several full scholarships worth over

Every business school makes as much use as it can of scholarships and bursaries to encourage the kind of people they want to come on their courses

$115,000 at top 10 US schools When Ms Hodara began her admissions career, as an employee at the University of Pennsylvania’s The Wharton School, it was more usual for MBA applicants to be sponsored by their companies, particularly those from overseas. The understanding was that they would return to their home countries and eventually become senior management leaders. “We knew that these were the cream of the crop,” she says. While schools have always tried to find the best talent, Chioma Isiadinso, chief executive of admissions agency Expartus, says the hunt has intensified as tuition fees have risen and students have started to question the return on investment on an MBA. This in turn has led schools to find creative ways to recruit students. Ms Isiadinso says Harvard Business School is among a few leading institutions that invite specific applicants from particular companies, notably private equity groups, to attend information sessions. “Such targeted events ensure that the audience is pre-qualified and that the schools are talking to a competitive pool of prospects,” she says. Columbia Business School’s MBA admissions team are pay-

ing 80 per cent of the tuition fees for Chance Rodriguez, allowing the 24-year-old to leave his job at a real estate investment management company to study full time. Mr Rodriguez covers the balance of the course costs from his personal savings, enabling him to graduate in 2021 debt free. The school’s willingness to fund so much of his student expenses took Mr Rodriguez by surprise. He sidestepped questions about financial support in his application and interview because he did not want it to be a “distraction”. “I wanted to maximise my chances of getting in as opposed to maximising a scholarship,” he says. “These schools are aware of the diminishing returns of the MBA degree, so they are giving as much money as they can afford regardless of whether the student says that they have a need,” Mr Rodriguez says. However, he says the financial support helped him “get over the line” in returning to student life. As a Latino male with high test scores, who is on a fast track in his career, Mr Rodriguez understands his value in terms of course diversity. “I also revealed in my application that I was the youngest analyst to be promoted in my industry.”


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Monday 08 April 2019

BUSINESS DAY

PROPERTY&LIFESTYLE Office space

Build quality, superior façade push The Wings Towers ahead of competition ... offers workstations enhancing tenants’ optimum productivity Stories by CHUKA UROKO

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he office space market in Nigeria has, in the past five to 10 years, witnessed what could be termed a ‘revolution’ with many office towers scrambling for the skyline of the country’s major cities, especially Lagos, whose property market has, within this period, received over 2,000 square metres office space. This ‘revolution’ could be interpreted to mean space suppliers response to demand for Grade A office buildings with international standard which are sought after by foreign institutional and equity investors, corporate organizations, international oil companies, etc who are major players in the economy before the present downturn. These developments which have changed Lagos skyline in Ikoyi and Victoria Island, have brought the city in league with the world’s leading cities which provide occupiers with premium Grade ‘A’ office accommodation as seen in New York, London, Paris, Johannesburg, Singapore and Hong Kong. Some of the developments in Lagos are The Wings Towers which came into the market with 27,500 square metres, Nestoil Tower, 7,500 square metres, Madina Tower, 8,300 square metres and Civic Towers, 8,096 square metres, all in Victoria Island. In Ikoyi, particularly on Kingsway Road, are The Heritage Place which came into the market with 15,631 square

metres and Alliance Place, 6,670 square metres. Others are the Kingsway Tower, 12,000 square metres, Temple Tower, 14,000 square metres, BAT’s Rising Sun, 10,000 square metres, and Lake Point Towers, 13,400 square metres. Among the pack, The Wings Towers, a twin-tower building developed by RMB Westport with Broll Nigeria, Estate Links Limited and Jones Lang LaSalle (JLL) as lead promoters/leasing agents, stands out with its build quality and superior, fascinating façade system. A 14-floor, 27,000 square metre Grade A office complex, The Wings is located on Ozumba Mbadiwe Street in Victoria Island by the Five Cowrie Creek. Wallace Wilkins, a director at RMB Westport , describes the building as “oneof-a-kind development that guarantees its tenants world class experience”. “It is an elegantly designed office building with innovative usage of space to give optimal day-to-day functionality. The building is a seamless business environment that combines functionality, detail, services and comfort for business”, Wilkins added. In addition to its highquality finishing and small office plates of 1000 square metres which features 360-degree views to virtually all workstations in any particular tenant layout, The Wings façade gives an alluring feature view of the Lagos city, offering comfort plus quality of work that is comparable to international standards. “This façade system al-

lows for energy efficiency and adaptability to climatic heat conditions”, explained an official of Stauch Vorster Architects—the architectural consultants that worked on the building. One of the towers is already occupied by Oando Oil, RMB’s development partner. The remaining tower is substantially occupied by other tenants including RMB, JILL, MAN-Diesel, etc. Offices in this building are climatically controlled to facilitate maximum comfort with lighting and visual stimulus aimed at enhancing tenant enjoyment and appreciation of the working environment. The building also offers a high level of security and comfort to businesses with a high priority on secure operating facilities and peace of mind. The building has capacity to improve tenant’s operational efficiency and boost employee productivity. “It is a work environment that is a pleasure to use and interact with on a daily basis, and this will result in better productivity and positive attitude. This building is iconic and easily recognizable, creating an association tenants can market and use to their advantage”,the tauch Vorster official noted. For purposes of security and safety, The Wings has intelligent building management systems (IBMS) which is a system that optimizes the centralized control of heating, ventilation, air conditioning and lighting, thus promoting its functionality. The IBMS is also designed to detect potential thieves as warning signals is triggered if there are any

irregularities from particular areas of the building and these features make it an IBMScompliant building. The Wings is fully sprinkler protected with sprinkler and firewater systems supplied via dedicated pumps and tanks. Each tower is provided with two pressurized emergency routes and a fireman’s lift, together with an analogue smoke detection and voice evacuation system. Separate digital pulse meters are provided to measure individual tenant’s electricity consumption. These digital meters are extremely accurate with negligible errors. Independent meters are provided for every

floor and every tenant, in the unlikely event of meter failure. There are arguments out there on the suitability of its location given the intractable traffic gridlock that Ozumba Mbadiwe Street is known for, but Gbenga Olaniyan, Estatelinks CEO, explains that “The Wings will be providing ferry services to tenants with excellent and easy connectivity between Mainland and Island. The building parades such features as dedicated jetty, restaurant and banking hall which differentiate it from its peers. Others are concierge, Wi-Fi connection throughout the building, cell phone reception boosters, LED lighting,

motion sensors to all public areas, high surveillance CCTV systems, etc. It also offers rental concessions which include tenant improvement allowances and rent-free periods. Apart from these features and facilities, The Wings differs from its peers in its core design, shape and orientation which are configured to provide Grade A commercial office space with multi-tenant flexibility. “Tenants will appreciate the urban views from this high-rise building; there is flexibility and energy efficiency of the floorplate integrated into the design coupled with amenities and lifestyle/work-style possibilities”, the official assured.

Project

A peep into Landmark Village: W/Africa’s destination for business, leisure, lifestyle

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n the quiet corner of Oniru, an emerging upscale enclavesubstantiallybordered by the Atlantic Ocean, by what is now called Upper Victoria Island in Lagos, is the Landmark Village, a new island city being developed and promoted byLandmarkGroup—anambitiousrealestateinvestmentfirm. Unless one visits this vil-

lage, the impression one gets is that the village is just another place where high profile events are regularly held in an imposing building . There is more to the village than meets the eye, especially looking from the undulating road network that leads to the village. “Landmark Village is a one-stop shop live, work and

play destination. The main theme of this development is business, leisure and lifestyle where you can come, conduct your business, and experience leisure and lifestyle,” Paul Onwuanibe, Landmark Group CEO, explained to BusinessDay in an interview last week. To resonate with this theme,, the products and services on offer include residences, hotel, offices, and retail with a new retail boulevard. There are shops; a a department store, a family entertainment centre with an arcade which crosses over all demographics starting from the age of four to 100 who can find his way to the village. Besides the popular Landmark Event Centre where events such as weddings, exhibitions, conferences, corporate affairs, parties and events like basket ball, boxing com-

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petitions are held, the village also has a five-screen cinema which is the first 4D screens that will be in operation in one of Africa’s coastlines to be managed by film-house. Inside the village offering these products and services are such organizations as KFC, Chamberland, Rolex and an ice-ream factory. Hardrock and Shiroh are part of the old names in the village. “We have developed our lifestyle and leisure elements to a great extent,” Onwuanibe disclosed, and unknown to many, an ocean-front beach has been developed in the village with restaurants, bush bars, children’s playground, love garden, mini-golf, etc. “Usually, 1000-2000 people come to this place every weekend to have fun. It is a family affair where fathers, mothers, children and their grannies

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come to spend upwards of six hours and go home. People also come to play football on the football pitch here. “It is always a good entertainment and the tournament is watched by over 150 people. Nigerians from outside the country also come to have fun and leave here quite delighted and wondering that such a place exists in Nigeria”,he noted. The Landmark Village enjoys considerable traffic especially at weekends and this is because “we are one-stop shop; when you come here, you don’t have to go anywhere else for anything until you leave the village or the country as a whole. We have shops, a medical centre, leisure and sports centre, a spare, a gym, bar, offices, a hotel, an event centre, a swimming pool, serviced offices, a beach, a cycling area, a boating area. @Businessdayng

From the live, work and play perspective, there is vitually everything here”, he assured. Argauably, Landmark Village is Africa’s number one destination in the West African coast in terms of business, leisure and lifestyle. Till date, there is nothing like that elsewhere in West Africa. But whereas the use of the beach is more or less free except for registration to come in, if a fun-seeker wants to watch movies, it will cost him N1,500 for two hours. If he eats a burger, depending on where he wants to eat it, it will cost him between N500 and N6,000; if he is staying in a hotel there, it costs N30,000 for a room and N60,000 for a bigger room. Onwuanibe hopes and prayers that more of what they have done come on stream within Lagos and other cities of the country.


Tuesday 09 April 2019

BUSINESS DAY

21

PROPERTY&LIFESTYLE Housing

Banana Island waterfront property in market looking for buyers

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ne of the major multi-unit residential developments in Banana Island, Nigeria’s most exclusive and predominantly residential settlement, is currently in the market looking for buyers with long and patient capital fit for real estate investment asset in this class. Known as Ocean Parade Towers, the waterfront property comprising 24 units of 4-bedroom luxury apartments was developed by the Chagoury Group of companies. South Energyx Nigeria Limited, which is developing Eko Atlantic City, is a subsidiary of this Group. As an estate, Ocean Parade

features a collection of high-rise apartments nestled within a secure and safe environment that defines Banana Island. Its strategic location gives 180 degrees panoramic views of the lagoon. On offer here is a full block of 4-bedroom apartments for sale. Ubosi Eleh+ Co, a firm of estate surveyors and valuers marketing the property, says the facility provides a luxury life style facility for its inhabitants, noting that, by designing and building a ring road around the entire Banana Island complex, the Chagoury Group has ensured that the internal site remains traffic free and only accessible to pedestrians. The location of this im-

posing residential building in Banana Island makes it a good buy for any investor with a long term view of the market. This man-made island that is slightly curved in shape like a real banana, is a narrow but very expensive market which thrives on its special attributes. Part of the attributes of the island is the flexibility of movement that it offers. The island is connected to Ikoyi by a dedicated road which is linked to the existing road network near Parkview Estate. It is considered to be at par with the Seventh ArrondissementinParis,LaJollain San Diego, and Tokyo’s Shibuya andRoppongineighbourhoods. Chudi Ubosi, Principal Part-

nerat UbosiEleh+Co,explained to BusinessDay that property values hardly goes down in Banana Island. “It always goes up or stabilizes depending on the economic swings in the country at the time. Security and quality infrastructure have combined to make Banana Island an expensive market and a highlyexclusiveandsoughtafter address”,Ubosi assured. The implication of this is that buyers of Ocean Parade, which is in the market at the moment for N6,500,000,000, have a lot to gain in a matter of years to come as values appreciate fast and demand is encouraging despite the challenges in close sub-markets like old Ikoyi and Lekki. The Towers is unique real estate development designed and built by ITB Nigeria Limited-- the building and construction subsidiary of the Chagoury Group. As a symbol of luxury and security, it provides luxury life style for its inhabitants. Ubosi explained further that the security need of the estate was carefully thought out, planned and implemented, adding that the facilities provided in the estate are state-of-theart and include an ultra modern adult and children outdoor swimmingpool,twolawntennis andabasketballcourt,agymnasium,24hourselectricitysupply, sewage and water treatment plant, borehole, multi-storey car park, pool side bar, clubhouse, squash court, etc.

Interior Decor

Residential building lead demand in sanitary wares TEMITAYO AYETOTO

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ealers in sanitary wares products have said residential buildings continue to lead demand despite slow rate of housing supply and marginal economic growth limiting disposable income in Nigerians pockets. Compared to the rate orders are received from corporate organisations, Chukwuma Okafor Dofas Technical Nigeria Ltd., a sanitary centred company, said construction of residential apartments has been sustaining the higher volume of demand in the market, although quality class differs. Emmanuel Ejim of Choice Sanitary Wares corroborated him, saying demand continues to grow as more buildings spring up. They, however, say buyers are caught between longing for quality and cheap rates. “Some people want quality products at cheap prices and you cannot have those together. Some are cheap but lack quality,” Okafor explained Although most sanitary

products are imported from China among other countries, he sees Nigeria beginning its production in the near future. Currently in Nigeria, VitrA, Ariston, Creavit, Legrand and Kale are some of the top leading brands common to people. VitrA whose showroom is in Victoria Island is repute for classy, up-to-date and luxury bathroom accessories among propertydevelopersandinterior www.businessday.ng

designers. It supplies millions of pieces of ceramic sanitary wares each year, with 50 percent of the products over 150 showrooms and 2,000 sales points, in major cities of 75 countries. Creavit keenly chases VitrA with focus on producing sanitary solutions of wet areas such as toilet seats, faucets, sinks, shower panel, bathroom accessories like ring towel, tissue holder, tumbler

holder and table sink. In Nigeria, Ariston is a popular brand for water heater products even though it plays provides kitchens to laundry appliances as well. Ariston is a part of the world’s leading global manufacturer of home appliances, with approximately $21 billion in annual sales, 70 manufacturing and technology research centres around the world.

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Infrastructure Maintenance With TUNDE OBILEYE

Undertaking facility condition assessment

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t is a known fact that every facility will deteriorate over time and, therefore, a facility condition assessment (FCA) becomes imperative as part of the processes to preserve the life of the facility and ensure value is maintained. An FCA is part of a complete and multi-disciplinary audit of an organization’s building portfolio. Facilities managers should use the FCA as part of a technical investigation to review assets or systems to understand the root causes of deterioration and as a source for determining a building’s replacement value. Without an FCA and accurate building data, budgeting and capital planning will be based on experience and a general guess. The FCA allows facilities managers to arrive at an estimate of reinvestment costs that are supported with evidence, so the management team of the organization can make decisions to restore, replace or maintain defective assets. It also allows for the use data and reports for prioritizing projects for maintenance, repair or renewal. FCA can include or exclude such information as: •The current condition of assets such as roofing and boilers •Estimation of costs to correct the backlog or part of the backlog of deferred maintenance •A forecast of the effective age of assets and an estimate of future lifespan •Identification of deficiencies that need to be corrected The FCA usually does not include the identification of new opportunities, like opportunities to improve facilities for energy conservation and efficiency. The audit should involve experts in HVAC, plumbing and electricity who can observe, assess, and measure the facilities in the business inventory. Information collected should be standardized. Emphasis in the FCA is always on physical analysis rather than financial analysis. The work is generally carried out by experts in the engineering and technical fields. The final report is likely to include a photographic record of systems and elements of the assets. It generally includes a projected (usually 10 year) @Businessdayng

capital plan for each facility. FCA is formed from a combination of information and data sources. This allows facilities managers to get a holistic understanding of their facilities and how manipulating maintenance variables can impact long-term asset value. Data sources often include visual reviews of a representative sample, documents, interviews, surveys of interested parties and users, satisfaction surveys, operator evaluations and condition monitoring. After sources are collected, there are 5 steps to a successful FCA to follow: 1. Preliminary Preparation •This includes mobilization of the consulting team and arranging site access. 2. Collection of Data •This includes reviewing documents, field visits, interviews, testing and monitoring 3. Analysis of the Data •This includes estimations of quantities and costs based on the collected data and statistical summarization. 4. Preparation of the Report •This includes peer review of the data to assure accuracy and standards conformance. 5. Presentation of the Report •The presentation of the report is usually part of the process, depending on the priority of the report receivers. The FCA is time sensitive and can quickly become stale, especially if corrective action is not promptly taken by facilities managers. FCAs should be regularly updated and confirmed by follow-up to revisit old findings. The process should be subject to regular review and adjustments to reflect changing conditions and circumstances including technology. Ultimately, FCAs can be accomplished with the right planning and course of action to enable facilities managers learn more about how to take their facilities from a reactive to proactive level using audits and inspections. Obileye is a UK-trained lawyer and CEO, Great Heights Property and Facilities Management Limited Email: Tundeobileye@greatheightslimited.com


22

Monday 08 April 2019

BUSINESS DAY

PROPERTY&LIFESTYLE Office Space

Real reasons Nestoil Towers sidesteps peers in prime office market Morgan Holdings ISRAEL ODUBOLA

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f developers have to celebrate projects success stories, developers of Nestoil Towers should be among, as the iconic structure represents a powerful brand of architectural ingenuity and prestige. Home to the corporate headquarters of indigenous oil firm, Nestoil Limited, and sitting at the intersection of two major business districts – Saka Tinubu Street and Akin Adesola Street, one can say, by a mere look, that the high-rise structure is a ‘colossus’ dominating the skyline of Victoria Island. However, the edifice does not stand tall based on aesthetics alone, putting other factors into consideration, it boasts of being among notable developments in the highbrow environment of Victoria Island. Abisola Akran, Sales and Business Development Executive at Fine & Country—the leasing agent on this office complex— told BusinessDay that it is special given its Grade AAA office facilities which provide a therapeutic environment for work. “The developers engaged the best companies in real estate to deliver on this premier office towers who have reputation for sound marketing services and client management of off-plan transactions”, says Akran Designed by Lagos-based architectural firm, ACCL, and constructed by Julius Berger, the tower is the first-certified

green building in Africa’s most populous nation, as it has a silver rating in Leadership in Energy & Environmental Design (LEEDS), established by the United States Green Building Council. As LEEDS-certified, the tower offers occupants the opportunity to respond to major environmental concerns such as climate change, heavy reliance on non-sustainable energy and sources, with ecologically-responsive solutions. This signals the commitment of the Nestoil Towers to promote environmental consciousness in Nigeria. Sitting on a land area of about 3,900 square meters on 15 floors, the edifice is oneof-a-kind mixed use development for commercial and residential purposes. It projects Nigeria’s economic hub, Lagos, as commercial landmark with 9, 904 leasable commercial Grade A office spaces. More so, occupants are provided with flexible accommodation options between commercial and residential purposes as may be required by executives, corporates and expatriates, a feature absent in a number of buildings in Lagos. Going further, the office complex has a state-of- the-art building features including raised floor for underground cabling, flexible configuration of office spaces, boreholes & water treatments, 8 restrooms per floor (including disabled toilets) and storage room per floor. Others are four passengers’ elevators, car packing

canvasses need to address housing gap TEMITAYO AYETOTO

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facilities that accommodates 225 cars on 18 split levels, an exclusive transformer and 1 unit of 910 KVA generating set. Also available on all leasable office floors are doubleglazed curtain wall system to reduce solar heat gains. One of the rarest facilities

in the structure is a helipad for swift and convergent transit to any location across the globe. It is no doubt that the towers is strategically positioned to assist businesses and multinational corporates in need of top brand reformation to be at the centre of their target

market. The edifice comes with accessibility and convenience to financial institutions, firstclass hotels, recreational centers and the Eko Atlantic makes the towers easily accessible in the heart of the commercial business district.

Market Analysis

CBN’s 50bp interest rate cut won’t impact on real estate—industry sources ENDURANCE OKAFOR

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s an economic indicator, real estate is often referred to as a laggard which is why industry sources say, in the immediate term, it will get little or no impact from the first rate cut in Nigeria in almost three years. Lack of favourable policies, slow economic growth and the lagging nature of the real estate sector are the main reasons industry stakeholders don’t see the rate cut having any impact on the sector.

“How much of a stimulus this will give to the sector is yet to be seen and I dare say it will still be a long way out. This is because, given its unwieldy nature, the real estate sector is usually the last to feel the ripple effect of positive monetary policy changes, ”Wole Olabanji, the CEO of CoBuildIT, a real estate firm, said. As a general principle, when lending rates come down, it improves the outlook for capital intensive sectors like real estate because cost of capital is a key driver of project cost.

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Olabanji’sviewwasaffirmed by Olurogba Orimalade, chairman of the Nigerian Institution of Estate Surveyors and Valuers (NIESV) Lagos State Branch as he too did not any impact of the rate cut on the sector. “The reality is that the cost of finance is just a small part of the issues faced in the real estate sector, especially with developers, there are other areas which is stiffening the growth of the sector,” Orimalade said. The monetary committee of the central bank had the lending rate cut to 13.5 percent, the first drop on the key MPR since July 2016 while retaining CRR at 22.5 percent and Liquidity Ratio at 30 percent. The implication of the outcome of the policy-setting committee is that it will make it cheaper to borrow and grow the economy. Though, not too significant at 0.5 percent, this drop should encourage the consumer to spend more, firms to take more loans and open more investment doors. Also commenting on the re-

cent development, Ugochukwu Chime, the Chairman of National Real Estate Data Collation and Management Programme (NRE-DCMP) said, whereas the rate cut is supposed to open up access to more lending for opportunities in the sector, the reverse is the case. “As I speak to you, the price of cement has increased, so the prices of building items are going to increase and will continue to increase until there is a stabilisation in the market, say in two month time,” Chime told BusinessDay. Changes in interbank lending rates either add or reduce the amount of capital available for investment. Interest rates affect capital flows, the supply and demand for capital, and an investor’s required rate of return, and each of this drives property values in a variety of ways. “What they have done is good to increase access to finance, but other social economic factors have come into play, so they need to do more, because for there to be

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impact they have to take into consideration some of these developments,” Chime noted. Checks by BusinessDay revealed that bank lending to the capital intensive sector has been on the downward trend for more than three years. Figures from the National Bureau of Statistics (NBS) for the last quarter of 2018 reveals that the sector only attracted credits ofN622billionwhichaccounted for a 12.3 percent decline from theN710billionitgotinQ32018. The credit share the real estate sector got from the country’s commercial bank in the review quarter represents 4.12 percent of the total N15.13 trillion credits to the entire private sector. “Before you start building something, you must have an effective demand for it and right now the only effective property demand, to a large extent that we are seeing, is from the low income earners, and they are the ones that make the large segment of the country’s population,” Orimalade explained. @Businessdayng

ne of Nigeria’s top real estate players, Palton Morgan Holdings, has canvassed need for adequate provision of quality and affordable housing to tackle lingering shortage in Nigeria. Adeyinka Adesope, group managing director of the company who spoke at the Africa CEO Forum in Kigali, said the firm was responding to the housing needs- the core of its business focus – by ensuring delivery of affordable houses that comply with standards, eliminating some of the bottlenecks associated with acquiring properties in some parts of the country. Palton Morgan Holdings comprises of Propertymart, Grenadines Homes, Mcpalton, Mitcherutti contractors and Paltonloitte. Through its various subsidiaries, the company has been delivering housing initiatives across the country with offerings like PropertyMart Fairmont, one of the fairest deals on the Lekki corridor and Grenadines Homes ‘Oceanna’ amongst others. “Through its membercompanies, the group’s strategic focus and policies rest on the development and completion of major projects in Nigeria and across the globe and the synergy of management and staff has grown the group to be one of the largest real estate investment firms in the country,” he said. While the economy of the nation has been tough on most sectors in the last three years, Adesope said it has been tougher on the real estate sector, stressing it was high time the government woke up to the reality of the impact on the housing sector and the economy as a whole. Speaking further, the chief executive officers urged the government to reconsider the African Continental Free Trade Agreement (ACFTA) yet to be signed, saying the integration of Africa is one of the ways the continent’s developments can be galvanized. Nigeria’s role and participation in the integration will be critical for its success, which is long overdue as African nations need to work as one; for one continent, one currency and one market, Adesope explained. He stated that collaboration amongst African countries must also be embraced by major players in the real estate sector of Nigeria to advance the sector. On the whole, the conference participants urged African governments to take advantage of pension funds to bridge their infrastructure funding shortfall and de-risk pension systems.


Tuesday 09 April 2019

BUSINESS DAY

23

Markets + Finance BD

‘Providing proprietary research, commentary, analysis and financial news coverage unmatched in today’s market. Published weekly, Markets & Finance provides all the key intelligence you need.’

FCMB Group Plc: Growth in non interest income underpins return on equity BALA AUGIE

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irst City Monument Bank (FCMB) Group Plc recorded nearly a 100 percent increase return on average equity (ROAE) for 2018 financial year as the lender continues to magnify shareholders’ earnings. The lender has been utilizing the resources of owners in generating higher profit since surmounting the headwinds brought on by a drop in crude price that battered the asset quality of Nigerian banks. FCMB witnessed good growth in its alternate channels as it continues to focus on improving its service and distribution, leveraging on technology and collaborations while developing products, platforms and solutions to support its chosen segments. There has been strong customer acquisition and migration to digital channels for transactional purposes and increased cost savings, which is why noninterest revenue increased while deposit base widened. For the year ended December 2018, customers using mobile channels surged by 124.69 percent to 2.78 million from 1.23 million the previous year. Further breakdown of the figure shows customer mobile channels spike by 323 percent to 161 thousand in 2016 from 681 thousand in 2016. There has also been an improvement Point

of Sales (POS) transactions in the last years. Value of POS transactions jumped 59 percent to N272.76 billion in December 2018 from N171.13 million as at December 2017. Investment in mobile banking buoy non interest income FCMB’s gross earnings were up 4.34 percent to N177.24 billion in December 2018 from N169.88 billion as at December 2017 despite a reduction interest income. Interest income reduced by a mere 0.5 percent to N131.66 billion in the period under review from N132.35 billion the previous year as a low yield environment continues to undermine net interest margin. Noninterest income was up 23.60 percent to N39.55 billion in December 2018 from N32.0 billion as at December 2017; the growth in non interest income was largely driven by mobile banking and trading income. Fees and commission income increased by 33.20 percent to N21.60 billion in the period under review from N16.22 billion as at December 2017, while foreign exchange income surged by 158.2 percent to N6.19 billion in December 2018 as against N2.40 billion as at December 2017. Reduction in impairment charge underpins profit Profit before interest and tax spiked by 73.15 percent to N18.44 billion in December 2018 from N10.66 billion the previous year. Profit after tax followed the same growth tra-

Ladi Balogun, GMD/CEO, FCMB Group Plc

jectory as it spiked by 73.80 percent to N14.97 billion in December 2018 from N8.61 billion the previous year. The growth in profit was supported by a 37.70 percent reduction in impairment charge on financial assets to N22.66 billion in the period under review as against N14.11 billion the previous year. However, 0perating expenses were up 13.90 percent to N7922 billion in the period under review from N69.53 billion as at December 2017. The growth in operating expenses was due to increase in Asset Management Charge Of Nigeria (AMCON) charges, litigation provisions, brand awareness and expenses on alternate channels development. Strong asset growth validates risk management strategy Total assets grew by 20.39 percent to N1.43 trillion in December 2018 from N1.18 trillion the previous year. The uptick in assets was driven mainly by 19 percent Year on Year (YOY) growth in deposits, while quarter on quarter (QoQ) loan growth is largely due to target growth in some focused sectors. Total Deposit was up 19.18 percent to N821.74 billion in the period under review as against N689.86 billion as at December 2017; the growth in deposits was driven by growth in CASA deposits. Improvement in key ratios FCMB was able to turn each Naira invested in revenue into higher profit as net profit margin increased to 8.44 percent in December 2018 from 5.14 percent the previous year.

Return on average equity (ROAE) increased to 8.10 percent in the period under review as against 4.70 percent the previous year while return on average asset (ROAA) moved to 0.70 percent in December 2018 from 0.70 percent the previous year. Fcmb and Intl Consilium partner to create $100m Africa and Middle East Fund First City Monument Bank Plc, Nigeria (FCMB) and INTL Consilium LLC, Florida, USA has announced a partnership to launch a US$100 million hedge fund investing in Africa and the Middle East. A statement jointly issued by FCMB and INTL Consilium said the fund tagged Legacy Africa Alpha Fund will invest exclusively in Africa and Middle East debt and equity, and will be structured as an absolute return fund. The fund which will place a 30 percent cap on its Middle Eastern weighting to ensure significant exposure to Africa’s fastest growing economies would be officially launched on July 1, 2008 with $100M under management. Commenting on the fund, Jonathan Binder, co-portfolio manager, said, “INTL Consilium is focused on fundamental value assessed through our primary research process integrating top-down and bottom-up analysis. The new Legacy Africa Alpha Fund is a natural extension to our global products as we have been investing aggressively in the region for three years now.” “INTL already has over US$ 450 million invested in the region in both debt and equity securities in over 16 different countries as they were quick to identify value and growth opportunities at a time when many investors shied away. The Legacy Africa Alpha Fund is an exciting venture for our Team, as it will allow us to leverage our existing knowledge and contacts within the region” added Charles Cassel, co-portfolio manager. The Legacy Africa Alpha Fund offers investors a new channel to access Africa and Middle East high-return opportunities. It also increases FCMB’s ability to offer a differentiated asset management proposition to its institutional and high net worth clients. Commenting on the launch, FCMB’s Managing Director/Chief Executive Officer (MD/ CEO), Ladi Balogun said: “Africa is the most exciting investor destination and is likely to remain so for the foreseeable future. We are leveraging on INTL’s experience and track record successfully managing funds for some of the most discerning international institutional investors. We bring access to rare investment opportunities, local knowledge and market insights. INTL and FCMB have had a relationship for over 15 years, which will be a further source of comfort for our investors.”

BD MARKETS + FINANCE Analysts: BALA AUGIE www.businessday.ng

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@Businessdayng


24

Tuesday 09 April 2019

BUSINESS DAY

BDTECH

In association with

SMEs hardest hit by cybercrime, as 60% of Nigerian businesses suffer at…Sophos, Sidmach reveal 92% of malware attacks are delivered via email JUMOKE AKIYODE-LAWANSON

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ybercrime has become the greatest threat to every company and country in the world, as it is estimated that 54 percent of companies globally experience at least one cyber-attack every year. The numbers are even higher in Nigeria, where about 60 percent of firma are affected by cyber attacks. Shockingly, only 38 percent of global organisations claim they have the infrastructure to handle a sophisticated cyber-attack. Meanwhile, 43 percent of cyber-attacks target small businesses, but only 14 percent of these SMEs have effective infrastructure to mitigate cyber risks, vulnerabilities and attacks. These mind bugling statistics were revealed at the one-day Sidmach/ Sophos Lunch and Learn Event held in Lagos on Thursday, February 28, 2019. According to Jimi Falaiye, country manager of Sophos (Nigeria), businesses are often concerned about security of data; unfortunately, 95 percent of security breaches are due to human error. “Cyber-criminals and hackers will infiltrate your company through your weakest link, which is almost never in the IT department”, he said, adding that it takes organisations an average of 191 days to identify data breaches. Falaiye further revealed that 92.4 percent of malware is delivered via

L-R: Opeoluwa Ojumu; Sophos product manager at Mart Networks Nigeria Ltd., Akintunde Opawole; manager, FLIMS Business Unit, Sidmach Technologies Nig. Ltd., Christopher Odutola; sales engineer, Sophos and Lanre Adelanwa; head, marketing at Sidmach, during Sophos/Sidmach Lunch & Learn event in Lagos on 28 February, 2019.

email, even as total cost for cybercrime committed globally added up to over $1 trillion dollars in 2018. Sharing more facts about cyber crimes, particularly as ransomware affects Small and Medium Businesses (SMBs), Nathanael Odofin, market intelligence and research analyst at Sidmach Technologies Nigeria Limited, said that 22 percent of organisations had to cease business operations immediately because of ransomware. “Reports reveal that 81 percent of businesses have experienced ransom-

ware; 66 percent have suffered a data breach; 35 percent were victims of ransomware,” Odofin said. He however said that anti-virus is not enough because most of them are reactive in nature. “Antivirus protects you from classic dangers like known viruses, Trojans, and worms – ‘known’ being the operative word here. An Antivirus cannot protect without a signature database for detection “But, most antivirus programs are reactive. A study has found that a typi-

cal antivirus will only stop 30 percent to 50 percent of new malware when it first appears. Unless the antivirus software has seen a particular threat in the past, it won’t necessarily protect your computer,” Odofin added. Referring to Verizon Data Breach Investigation Report, he reminded businesses in Nigeria that over half of all cyber breaches in 2017 included the use of malware. Malware activities include: stealing credit card details; revealing passwords and spreading spam. “It is why the fortification of antivi-

rus merely is not enough. You need to bolster this layer of defense with another layer (like an onion) – that of an antimalware,” he said. The cyber security experts advised participants and other organisations in Nigeria to deploy software security solutions, which Sophos has developed to “keep a very close eye on what is happening inside your system, blocking both known and unknown malware threats. It also safeguards you against any potentially harmful programs”. Earlier, Peter Arogundade, managing director of Sidmach Technologies, said that the Lunch and Learn event was aimed at assisting IT experts in different organisations to understand cost effective security dynamics, and tools that mitigate latest threats, while receiving insights to have complete visibility and control of their IT Infrastructure. Arogundade who was represented at the event by Olanrewaju Adelanwa, head of marketing, at Sidmach, described the sessions as crucial as they offered the experts new perspective on better architectures for end-to-end networks threats management with a one-stop-solution that Sophos brings. “We are not referring to security for just the hardware, the emails and everything within your network protocol that requires protection. This event, basically, was organised to bring these professionals together and expose them to insights about what is happening in Nigeria and across the world,” he said..

Western Digital unveils world’s fastest 1TB UHS-I microSD™ card

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s consumer demand for high-quality content continues to rise, Western Digital Corp. is enabling a bigger, faster experience with new industry-leading solutions that give consumers the best combination of performance and capacity so they can do more with the rich content they capture. At the recently concluded Mobile World Congress, the company showcased the world’s fastest 1TB

UHS-I microSD flash memory card, the 1TB* SanDisk Extreme® UHS-I microSDXC™ card. The new card features higher speed and capacity for capturing and moving massive amounts of highquality photos and videos on smartphones, drones and action cameras. These impressive levels of capacity and speed give consumers the ability to create all the content they want without worrying about space limitations or long

transfer times. Today’s smartphones and cameras allow consumers to create high-quality content in the palm of their hands, thanks to features like multi-lenses, burst mode capabilities and the 4K resolution. Western Digital says it will continue to deliver the most advanced solutions to ensure consumers can reliably capture and share a special moment or create video content for personal or professional use.

“People trust SanDisk-brand cards to capture and preserve their world. Our goal is to deliver the best possible experience so consumers can share the content that’s important to them,” said Brian Pridgeon, director of marketing for SanDisk-branded products, Western Digital. Designed to help move tons of high-quality content faster than ever, the 1TB SanDisk Extreme UHS-I microSD card reaches

speeds up to 160MB/s. This new card allows consumers to transfer files in nearly half the time over standard UHS-I microSD cards currently on the market. The cards reach these record-breaking speeds by leveraging Western Digital’s proprietary flash technology. The new SanDisk Extreme card will also be available in 512GB capacity, and will feature the A2 specification3 for launching and loading apps at blazing speeds.


Tuesday 09 April 2019

BUSINESS DAY

BDTECH

25

E-mail:jumoke.akiyode@businessdayonline.com

Cisco Meraki targets MSMEs with simplified technology solutions JUMOKE AKIYODELAWANSON

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isco Meraki, the leader in cloud controlled WiFi, routing, and security, is targeting the millions of Micro, Small and Medium size enterprises (MSMEs) in Africa by offering its simplified cloud managed IT solutions that provides unified management of mobile devices, Macs, PCs, and the entire network from a centralized dashboard, which will be of immense relief to small businesses struggling with funding for advanced digital solutions. During a round table conference held in Lagos on Tuesday 26 February 2019, to announce the offerings, Cisco said that it had become important for Meraki to provide a simplified path to powerful technology; such that can enforce device security policies, deploy software and apps, and perform remote, live troubleshooting on thousands of managed devices through a small team managing a wider network. According to Cisco, digitization is the big trend of today and it is important for businesses, whether big or small to adopt digitization. The new Meraki offerings are designed to simplify IT

L-R: Steven Kewley; EMEAR commercial regional manager, Cisco, Olakunle Oloruntimehin; general manager, Nigeria and West African Countries, Cisco, and Nick Malherbe; territory manager for Nigeria, Ghana East and Sub-Saharan Africa at a press conference held in Lagos to launch Cisco Meraki on Tuesday February 26, 2019.

solutions for small and medium businesses even in the absence of an IT specialist. The technology provides complete network visibility and control - no hardware controllers or overlay software required. Configurations and management are easily performed remotely or on-site, while trouble shooting can be done in a fraction of the time with advanced networking analytics, allowing businesses to focus on more projects that are impactful. Speaking at the event, Olakunle Oloruntimehin, general manager of Cisco

Nigeria, said, “Cisco Meraki creates the simplest, most powerful solutions, helping everyone from small businesses to global enterprises save time and money. It helps organizations to rapidly roll out digital initiatives, delivering real business value. We are committed to helping our customers overcome challenges and achieve their goals. Technology can connect us, empower us, and drive us. At Cisco, we believe that by simplifying powerful technology, we can free passionate people to focus on their mission and reach

groups previously not utilizing technology”. All Cisco Meraki devices are centrally and securely managed from the cloud using a single web-based dashboard. Their featurerich, intuitive architecture enables customers to save time, reduce operating costs, and scale as a business grows. Substantiating the importance of simplified IT solutions, Nick Malherbe, the territory manager for Nigeria, Ghana, east and sub-Saharan Africa, explained the need for businesses to use data smartly

and securely for business success. “In Nigeria, small and medium businesses account for 84 percent of employment attesting to the fact that they contribute greatly to the GDP of the economy. The success of this sector is key for the success of our economy, it is therefore imperative that these businesses use IT solutions that are secure, simple and intelligent. With Cisco Meraki, these MSMEs can enjoy agility, operational efficiency, and most importantly, data security that they require to accelerate their digital transformations. Our goal is to help customers benefit from digitization by simplifying IT solutions,” Malherbe said. Since inception in 2006, Meraki has grown to become an industry leader in the IT space, with over 230,000 customers and 3 million network devices and counting online around the world. Meraki was acquired by Cisco in 2012. The Company’s comprehensive set of solutions includes wireless, switching, security, communications, EMM, and security cameras, all managed through Meraki’s web-based dashboard interface which allow customers to seize new business opportunities and reduce operational costs.

Huawei showcases 5G, SoftCOM AI solutions at #MWC19

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uawei Technologies has wrapped up its four-day exhibition at the Mobile World Congress 2019 (MWC19) in Barcelona, Spain where it displayed its new innovative 5G products and other IT solutions including SoftCOM AI. Aside delivering keynotes at the sessions during the conference, the technology firm also held a wide range of discussions on its endto-end 5G products and solutions with operator customers and partners from around the world. Among the new offerings were simplified 5G sites, architecture, protocols, and operations & maintenance (O&M). Huawei said the new offerings will help operators quickly deploy 5G networks on a large scale. At the event, it also

launched the SoftCOM AI solution, which will help build autonomous driving networks of the future and maximize the value of telecom networks. Huawei also expressed its commitment to helping operators expand their business boundaries and achieve new growth through innovations in networks, services, and business models. At this year’s event, Huawei showcased its endto-end 5G products and solutions, ranging from simplified 5G sites and 5G integrated transport, to 5G cloud core and simplified 5G O&M. It also demonstrated its core technologies behind the new products and solutions, including radio frequency, optical transmission, IP, and IT. Similarly, Huawei demonstrated 8K high-definition (HD) live streaming on Vo-

dafone Spain’s 5G network, and showcased new applications such as Cloud VR, cloud gaming, and cloud PCs. Under the support of Huawei, multiple European operators, including Vodafone, announced that 5G networks are now ready for commercial use. In addition, Huawei presented its idea for autonomous driving networks, as well as its full-stack, all-scenario SoftCOM AI solution, with the aim to significantly improve operating efficiency, network performance, O&M efficiency, and user experiences. The SoftCOM AI solution enables “0 bits,0 watts” and adaptive beam adjustment, thereby maximizing the value of telecom networks. Huawei is actively innovating networks, services,

and business models. It works with customers to redefine the business models and boundaries of the telecom industry, and ultimately help operators succeed. This, the company says, will be achieved through a portfolio of innovative business solutions, including IoT cloud services, personal mobile services, five-star premium home broadband, and cloud-network convergence. Huawei also signed 5G contracts with many operators from around the world. So far, Huawei has signed over 30 commercial 5G contracts with operators around the world, and shipped over 40,000 5G base stations. Its aim is to help operators jump start 5G and deliver a highquality 5G user experience. This is the first time that all of Huawei’s three business groups (BGs) – Carrier

BG, Enterprise BG, and Consumer BG –have participated in the Mobile World Congress (MWC). Huawei’s Enterprise BG showcased four star products: the industry’s fastest OceanStor Dorado series – all flash storage; the world’s first AI-powered data centre switch; the world’s first WiFi 6 access point (AP) for commercial use; and the X series cameras – the world’s first AI-powered softwaredefined cameras. Huawei’s Consumer BG showcased multiple popular devices, and launched the world’s first foldable 5G smartphone. It will be recalled that Huawei was the first company in the industry to launch commercial 5G chips and devices, and has worked with the industry to drive 5G maturity and commercialization.

Startups showcase transformative technologysolutions at ISW 2019

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echnology startups, businesses and industry representatives gathered at the first ever Innovation Showcase Week 2019 (ISW 2019), to witness the latest transformative technologies that will redefine industries and revolutionalise the economy by solving some of the most pressing business and consumer challenges in Nigeria. Over 20 exhibiting technology startups showcased the latest tech innovations to some 400 business and industry representatives at the home of West Africa’s first deep tech accelerator - NG_ HUB by Facebook. Innovation Showcase Week tagged ‘ISW 2019’ is the first technology product showcase exhibition out of the startup support programs by tech innovation centre CoCreation Hub (CcHUB) and global enterprise, Facebook. “We recognised the urgent need to accelerate innovation support to medium and large corporates who are positioned to secure significant gains for the economy through smart application of technology”, said ‘Bosun Tijani, CEO and Founder of CcHUB, “ hence, ISW was organized to close the gap between corporates and startups by being an unprecedented platform where industry leaders can experience and adopt homegrown innovations and solutions first hand”. Startups at ISW unveiled their ground-breaking innovations built in Facebook’s deeptech startup program -FBStart Accelerator - and theCcHUB 2018 Incubation program. The products on display leveraged advanced technologies such as Data Science, Internet of Things, VR and AI across 8 categories including Healthcare, Agriculture, Mobility, Energy, Education, Safety Training and, Security. These solutions proffer break-through advances to business and consumer challenges in Nigeria. On the ISW 2019 showfloor, exhibiting Artificial Intelligence (AI) and Security-focused startups Chiniki Guard, SayPeace, Identity Tech, E-Estates, DeepQuest AI and Insyt demonstrated AI’s promising power. Other products displayed for the Health and Agriculture sectors include Vetsark, Doctoora, Plantheus, TrepLabs, Gricd and Truppr. Energy and Mobility dedicated areas had Upnepa, Smart Electricity, Hydrolite, Cycles and Lara products on display and the Virtual reality and Safety Training section showcased immersive solutions from Quadron VR, Kanji Drive and Project Move.


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Tuesday 09 April 2019

BUSINESS DAY

BDTECH E-mail: jumoke.akiyode@businessday.com

Microsoft: Getting behind AI growth in Africa

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he impact of artificial intelligence (AI) dominated discussions at this year’s World Economic Forum in Davos – with delegates touching on everything from ethics to democratization and workforce re-skilling. While AI is primed to be the driving force of the Fourth Industrial Revolution, its widespread acceptance and adoption among businesses is still in early stages. The year 2018 was an important one in shifting current perceptions around AI, demonstrating it as a technology that is here to augment human capabilities, not replace them, and to benefit the speed and scale of any organization, large or small. These conversations have carried weight. In just four years, the number of global organizations deploying AI has increased by 270 percent. In Africa, the momentum is similar, and continues to grow as access to high quality broadband and cloud computing improves. Organizations are recognizing AI’s ability to help with some of the continent’s most pervasive problems, from reducing poverty to improving healthcare and enhancing crop yields to feed a growing population. Microsoft, through initiatives such as 4Afrika, has its sights set on making AI available to everyone on the continent, in line with our global mission to empower every person and organization on the planet to achieve more. We are partnering with forward-thinking policy makers, innovative startups, technology partners, civil society groups and stakeholders to promote the growth of a vibrant AI ecosystem in Africa – one that

seekers. Applications that have already been created include Smart Mapokezi, which manages schedules for the allocation of food at the refugee camps.

enables inclusive growth and provides a clear and trusted path to digital transformation. Promoting innovation with AI Many of our local partners, including SMEs and startups, have already begun their AI journeys. Nigerian startup, MyMusic, has experimented with chatbots to help users discover new local music. And fintech startup, MoVAS Group, who we first met in 2016, is now building AI into their credit-scoring algorithms, enabling more unbanked farmers and small business owners to access loans the first time. In the finance industry, 66 percent of the population in sub-Saharan Africa is listed as unbanked. The proliferation of mobile banking across the continent has in-

creased financial inclusion, and AI powered intelligent applications are now taking this further. AI can capture and crunch large volumes of non-traditional data, such as mobile wallet transactions, that enable service providers to make automated loan decisions to new customers, with no previous financial track records, in seconds. Across the Middle East and Africa, a projected $28.3 million will be spent on developing AI solutions in the financial sector – and organisations are ramping up efforts to ensure young developers are well equipped for the task. At the recent AI Bootcamp, hosted by Data Science Nigeria and sponsored by Microsoft, for example, local developers were upskilled in using deep learning concepts to drive financial inclusion. Developing this kind of AI

Developing the right skills and data sets Without the skills to build homegrown applications, organizations are likely to import machine-learning algorithms developed elsewhere, which are trained on biased data sets that lack local context. This could have severe consequences in industries like healthcare. What Africa needs is a richer pool of local data, coupled with AI applications that are built by skilled local teams with diverse demographic, gender, ethnic and socio-economic backgrounds. To achieve this, outdated processes need to

be digitised, education systems need to adapt quickly, and digital literacy programmes need to be more far-reaching. Local organisations are making good headway. The Centre for Proteomic and Genomic Research (CPGR) in South Africa recently collaborated with Microsoft to build a first-for-Africa technology platform on Azure, which is enhancing the storage and processing of African genomic datasets. With this data and computing power, the CPGR is running more ground-breaking biomedical research in local disease development and prevention. In Malawi, the United Nations High Commission for Refugees (UNHCR) has opened a Microsoft AppFactory at the Dzaleka camp, which is bringing skills in coding and data analytics to young refugees and asylum

via http://boict.nigeriacommunicationsweek.com.ng Nwogbo said, adding that the theme for this year’s lecture is “Telco and Bank Partnership to Drive Financial Inclusion” Now in its tenth year, this year award will start with the distinguished lecture series. The lecture and award are slated for Saturday, April 27, 2019, at the Eko Hotels

and Suites, Lagos. The Beacon of ICT Distinguished Lecture is designed to explore efforts to put Nigeria on the global Information and Communications Technologies map. The lecture series is reserved for distinguished achievers. Past Keynote lecturers include: Ernest Ndukwe; the former executive vice

capacity in Africa is essential, not only to ensure our 200 million-strong youth population is equipped for jobs of the future, but also to ensure local AI systems themselves are unbiased and inclusive.

Policies for an AI-enabled future As AI opens up new frontiers for economic and social transformation, policy makers will need to ensure that this new data-driven ecosystem is governed by a strong code of ethics. We need to ensure that ethical AI systems are reliable, secure, private, transparent, accountable and beneficial to all. Across Africa, Microsoft is supporting government bodies in developing necessary policy frameworks. Initiatives such as the Microsoft Policy Innovation Centre at Strathmore University in Kenya are providing forums to discuss policy issues surrounding the digital transformation of industries and countries. Together with Access Partnership, we also recently commissioned a white paper on the implications of AI in Africa, which will be presented to South African Government delegates in March, during an event dedicated to addressing AI policy advancements. Putting humans at the center Through Microsoft’s various programs, from skills development initiatives to growing the startup ecosystem, we are working to help make an AI-enabled future in Africa a reality. In every AI endeavor, our goal is to augment and amplify human ingenuity, accelerate economic and social prosperity. African innovators revolutionized the way mobile technology is used, and we look forward to seeing what they’ll do next with AI.

Voting opens for BoICT Awards 2019

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he board and management of CommunicationsWeek Media Limited, a certified global ICT company with over two million online subscribers, has opened its portal to the general public to vote for nominees of this year’s Beacon of ICT (BoICT) Awards. The Beacon of Information and Communication

Technology awards series are widely regarded as the most prestigious annual event available in the ICT industry in Nigeria. The awards ceremony rewards best practices and recognises outstanding contributions to the growth of the sector. Announcing the commencement of the voting process, Ken Nwogbo, chief

executive officer and editor in chief, CommunicationsWeek Media Limited, the organisers of the event, said the BoICT Awards winners had always emerged through a transparent voting process that involves business leaders and readers, with independent quality experts. Business leaders and readers can cast their votes

chairman of the Nigerian Communications Commission (NCC), Yomi Bolarinwa; former director-general of National Broadcasting Commission (NBC), Jean Luc Fort; CEO, OR System France and specialist in Counterpart Risk and Chris Nwagboso; chairman, Knowledge Factory International, United Kingdom, among others.


Tuesday 09 April 2019

BUSINESS DAY

Investments

ENERGY INTELLIGENCE OIL

GAS

PETROCHEMICALS

27

Market Insight Companies Commodity Tracker Policy

POWER

MARKET

Petrol subsidy in 2018 higher than health, education, infrastructure and defence spend

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frica biggest oil producing country spent N730.9 billion on subsiding price of fuel in 2018, an amount which was far higher than funds allocated to education, health, infrastructure and other key ministries and parastatals that would have increase the economic growth or standard of living of its 0ver 180 million people. Over the years, the Nigerian government subsidizes things like electricity and petrol paying the difference between the cost to produce and the cost charged to customers in order to make them more affordable, but in the end is it worth the cost? BusinessDay analysis of the latest financial records of Nigeria National Petroleum Corporation (NNPC) showed that in 2018, the government spent  N730.9billion on subsidy popularly called “Under Recovery” alone which is far higher than total budget  of Ministry of Education (N651 billion), Ministry of Health (N356 billion), Ministry of Transportation (N267 billion) and Ministry of Agriculture and Rural Development (N203 billion). In 2018, the amount spent on subsidizing petrol was six times    more than the total 2018 combined allocation of the country’s top 10 universities of N112.6 billion which include University of Ibadan N12.9billion;University of Lagos N11.6 billion; University of Nigeria N16 billion; Ahmadu Bello University N17.4 billion; Obafemi Awolowo

University N17.4 billion; University of Benin N13.4  billion; University of Jos N11.7  billion; University of Calabar N14 billion; University of Ilorin of N8.8 billion; University of Abuja of N6.8 billion. Also, subsidy payment is far more than the total allocations to    National Health Insurance Scheme (NHIS) of N 999 million, the agency responsible for the health insurance of its over 190 million people. It’s also 28 times more than the total allocation of N25.4 billion allocated to National Primary Health care Development Agency (NPHCDA) in 2018, the agency responsible for primary health care development

in Nigeria. The subsidy money of N730.9 billion is seven times higher than the N102.9 billion capital allocation for the Federal Ministry of Education in the 2018 budget and eight times higher than the N86.485 billion allocated to the Federal Ministry of Health for capital expenditure. 2018 under recovery deduction is three times the N203 billion capital allocations for the Federal Ministry of Agriculture and rural development and four times N155 billion allocated to Federal Ministry of Water Resources in 2018 budget. 2018 under recovery of  N730.9  billion was also higher

than N715 billion total allocation of both capital and recurrent expenditure of Ministry of Power, Works and Housing, a very key and important ministry for any country interested in economic development. Further analysis revealed the 2018 subsidy was higher than N576 billion allocated to Ministry of Interior and Ministry of Defense respectively. Wumi Iledare, a professor of Petroleum Economics and Policy Research at the Centre for Petroleum Energy Economics and Law, University of Ibadan said payments of subsidy is a gorilla that will swallow our economy and as lead to the col-

lapse of education institutions, road infrastructures and health facilities because we spend more than one quarter of the budget subsidizing petrol which benefit the elites more than the populist. “Ghana our next door neighbour doesn’t control the price of petrol, so why do we,” Iledare asked. Nigeria’s poor rely primarily on public transportation as such their per capita fuel consumption is significantly less than the country’s rich, who generally use private vehicles. Neighboring countries also benefit significantly from Nigeria’s fuel subsidy through smuggling. The need to make NNPC curtail losses, improve transparency, attract investors, stimulate growth and increase government revenues have lead to agitation for reforms in the oil and gas sector stipulated in the Petroleum Industry Bill (PIB). Africa largest oil producing oil country has been on a perpetual voyage with PIB which is one of its most important bills ever to be contemplated in Nigeria’s history in a journey that began sixteen years ago with a lot of anticipation and promises. The bill is still stuttering through legislation after passing through four presidents, five presidential terms and five legislative tenures however the governance aspect of the bill which is Petroleum Industry Governance Bill (PIGB) is currently awaiting President Buhari (who is also the Minister of Petroleum) signature before it becomes a law.

NEWS

Nigerian businesses suffer two-week power outage every month ISAAC ANYAOGU

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usinesses in major cities in Nigeria suffer an average monthly power outage of 239 hours equivalent to two weeks, raising operational costs and impacting negatively on profits, analysts at FBN Quest has said citing industry sources, in a note sent to BusinesDay. “Therefore, self-generation and the associated cost are unavoidable, depleting profit margins of businesses,” the analysts said. Power is a major constraint to Nigeria’s economic growth and limits its ambition to be one of the world’s top 20 economies by 2020. In many industrialized nations, for every thousand of population, 1MW is required so Nigeria’s energy need is actually 180,000MW

given its population of 180million. However, Nigeria’s Vision 2020 report and the road map for powers sector reform set the target of 40,000MW by the year 2020. This has since been revised to 25,000MW by 2020. Currently, power generation capacity from the grid stands at around 7,000MW while distribution capacity is still below 5,000MW. This low capacity in power generation and distribution has forced many businesses to increasingly rely on alternative power sources. Sanusi Ohiare, executive director, Rural Electrification Agency (REA) said businesses in the country spend an estimated N5trillion annually importing, fuelling and maintaining generators. In March, power generation suffered some setback due to www.businessday.ng

gas supply shortage, gas supply declined to 17.5 million standard cubic feet (mmscf) compared with 21.5mmscf in February. “Aside from gas shortages, the

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sector suffers from poor liquidity across its value chain. This is partly linked to non-reflective cost tariffs as well as commercial losses aggravated by consumers’ @Businessdayng

apathy to making payment. As at end-December 2018, DISCOs had collectively paid only 28% of their N1.08trn debt to the Nigerian Bulk Electricity Trading Plc (NBET),” said the analysts. There is growing interest around off-grid solutions. “We understand that Borno State has unveiled a solar panel factory with the capacity to produce 40 Megawatts (MW) of panels annually. The goal is to achieve self-sufficient power generation over the next three years as Borno requires about 120MW to 150MW to power its industrial drive,” the analysts said. FBN Quest analysts say a better energy mix would reduce operating costs for businesses and boost productivity. The manufacturing sector grew by 2.4% y/y in Q4 2018.


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Tuesday 09 April 2019

BUSINESS DAY

ENERGY INTELLIGENCE Market

OPEC pumps least oil volumes in four years last month survey participants said they see little reason for optimism. Many of the upgraders are expected to remain offline, the April 28 US sanctions deadline for non-US entities to wind down their transactions with PDVSA is rapidly approaching, and the continued deterioration in the country’s infrastructure has likely led to some permanent loss of production capacity, analysts said. Saudi Arabia, OPEC’s largest producer by far, dropped its production by 280,000 b/d in March to 9.87 million b/d, the survey found. That is the kingdom’s lowest since February 2017. Saudi energy minister Khalid alFalih has said the country aims to “lead by example” on OPEC’s production cut agreement, which is aimed at draining global oil inventories and bolstering the market, despite pressure from US President Donald Trump to keep prices low. OPEC and 10 non-OPEC allies agreed in December to cut a collective 1.2 million b/d in supplies through June, and Falih has said he would like to see the deal extended when the coalition meets June 25-26 in Vienna to maintain bullish momentum in the market. Oil prices have risen almost 30% since the beginning of the year, briefly surpassing $70/b on Thursday, largely due to the OPEC/non-OPEC produc-

ISAAC ANYAOGU with Wire Reports

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he 14-country oil producers cartel, the Organisation of Petroleum Exporting Countries (OPEC) in March cut 570,000 barrels per day from its February output level, the most in four years as Saudi-let cuts and outages from Venezuela’s weighed on supply. A survey by S&P Global Platts survey found pumped 30.23 million b/d in the month, the lowest in more than four years, with crisis-hit Venezuela contributing most to the decline Once OPEC’s third-largest crude producer years ago and still with world’s biggest reserves, Venezuela in March plummeted to 10th, with production falling to 740,000 b/d. That is the lowest in more than 16 years, when a crippling industry strike caused output to fall to 650,000 b/d in January 2003 said Platts. The country experienced at least 10 days of widespread power blackouts, shutting down its extra heavy crude upgraders, and state oil company PDVSA also exhausted its reserves of naphtha diluent by mid-month, according to status reports seen by Platts. While Venezuela was able to maintain relatively steady crude exports in the month by drawing from storage,

tion cuts. The agreement exempts Venezuela, Iran and Libya, and the 11 OPEC members with quotas under the deal achieved 124% compliance in March, up from 79% in February, primarily thanks to Saudi Arabia?s overcompliance. The kingdom’s March production level was 440,000 b/d below its quota of 10.31 million b/d. Iraq, OPEC’s second largest producer, moved closer to compliance with its output cap, as rough weather shut in some production and some voluntary cuts were made, according to the survey. Iraq pumped 4.57 million b/d in the month, a 100,000 b/d decline from February, though still above its quota of 4.51 million b/d. Iran, which has been under US sanctions since November, produced 2.69 million b/d in March, the survey found. Its output has held relatively steady the last few months, as sanctions waivers the US granted to eight countries to continue purchasing Iranian oil have staved off declines. The waivers are set to expire in early May, and the US has not announced whether it will renew them. Libya was the most significant gainer in March, according to the survey, with the restart of the Sharara field pushing the country’s crude output up to 1.06 million b/d.

What is driving the surge in oil prices?

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il prices gained around 30 percent in the first quarter this year, with both WTI and Brent posting their best quarterly performance in a decade— since the second quarter of 2009. At the start of the second quarter of 2019,  WTI Crude  had already topped $60 last week and has been trading above that level in the first week of April, while Brent Crude has been flirting with the $70 mark for days. At the end of last year, the analysts predicting such a fast rise in oil prices in 2019 were in the minority, after market participants panicked over gloomy forecasts about slowing oil demand growth this year that sent oil tumbling nearly 40 percent in Q4 2018. A quarter into this year, signs have started to appear that concerns over faltering demand growth may have been overblown. Demand has been resilient-actually it has been holding more resilient than many pundits had expected at the end of last year. Coupled with a tightening market due to OPEC and allies’ cuts and U.S. sanctions crippling Venezuelan and Iranian oil sales, oil prices may have surprised to the upside many forecasters. Higher oil prices have naturally led to higher gasoline prices, and forecasts suggest that U.S. drivers should brace for further increases in gas prices as spring comes and motorists drive more.

Refinery maintenance season in the U.S. is also weighing on gasoline stocks and prices, AAA said in an update on April 4. “Until refineries return to normal operations, which will take a few weeks, American motorists should expect pump prices to continue increasing as gasoline demand gains steam,” according to AAA. Patrick DeHaan, head of petroleum analysis for GasBuddy,  said  on April 1: “There’s no fooling motorists, gas prices have continued to surge. For the seventh straight week the national average has continued to rise, unabated, due to seasonal impacts. The run-up this spring has felt worse than prior years, and thus far, the national average is up nearly 50 cents per gallon from our 2019 low.” “Unfortunately, this a rut we’ll be stuck in yet for at least a few more weeks,” DeHaan noted. One of the drivers of higher oil prices so far this year has been “very resilient demand,” Michele Della Vigna, head of EMEA natural resources research at Goldman Sachs, told CNBC this week. “Everybody came into the year with a very negative view and actually demand has been resilient,” della Vigna said. “Demand remains robust particularly in the emerging markets, which continue to buy a lot of crude,” Goldman’s expert noted. www.businessday.ng

The current price level works for everybody on the producer front—it helps to manage deficits in some OPEC members to sustainable levels, it is actually very profitable for the industry, and it’s enough for U.S. shale to keep growing, della Vigna told CNBC. Goldman Sachs doesn’t see Brent Crude prices breaking significantly above $70 or below $60 a barrel in the coming weeks. But there are events expected in coming weeks and a couple of months that could impact global oil supply and determine the trend in oil (and gasoline) prices into the summer. Assuming that demand growth holds, as Goldman says it has so far this year, supply is expected to further tighten with the U.S. sanctions on Venezuela and the upcoming review of the U.S. waivers for Iranian oil customers. The Trump Administration is not expected to cut off all Iranian buyers in early May, considering President Trump’s aversion to high gasoline prices and the current Brent price a hair’s breadth away from $70 a barrel. OPEC and its Russia-led nonOPEC allies will review their production cut pact in late June, but at that meeting they will have a clearer picture of where supply might be going, because the U.S. will have already decided whether to extend and to whom to extend waivers for Iranian oil purchases. OPEC leader Saudi Arabia has

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made it crystal clear that it would do whatever it takes to rebalance the market, with cuts potentially going through the end of 2019, while non-OPEC leader Russia is, as usual, signaling its reluc-

tance over continued cuts. On the demand side, there is always weakening global economic growth and the U.S.-China trade war lurking in the shadows to spook the oil market again.

U.S. hits Venezuela with new sanctions, more still on table

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ice President Mike Pence announced that the United States will add 34 PDVSA owned  or operated vessels to the sanctions list on Friday, according to Reuters. The announcement came during the Vice President’s Friday Venezuela-focused speech at Rice University’s Baker Institute of Public Policy in Houston—an invitation-only event. The sanctions not only target the 34 PDVSA vessels but also two firms that transport Venezuela crude oil to neighboring Cuba, Pence said, adding that this may not be the final thing added to the sanctions, as the US mulls even more sanctions, this time targeting the financial sector. The event on Friday at Rice likely met with a captive audience, as Houston is home to a very large Venezuelan population in its Katy suburb dubbed  Katyzuela. Naturally, many Venezuelan’s fleeing their homeland had  served in its oil business, and Houston had @Businessdayng

much to offer along that line of the work. The US originally levied sanctions against Venezuela to get Nicolas Maduro to step down. The United States and many other nations have since recognized Maduro’s opposition, Juan Guaido, as the legitimate president of Venezuela. Maduro has yet to succumb to international pressure even as its financial means come up short. Maduro has responded only by cracking down on his opposition, first by slapping him with a travel ban, second from holding public office, and most recently stripping him of his parliamentary immunity. Guaido and Maduro both remain undeterred by the external pressures placed on them. Venezuela’s oil industry, on the other hand, has proven less resilient. Venezuela’s crude oil production has taken quite a hit, with March’s production dropping to 740,000 barrels per day—a 16 year low—according to an S&P Platts survey published on Friday.


Tuesday 09 April 2019

BUSINESS DAY

29

OFFGRID BUSINESS Explainer

As electric cars outsell petrol vehicles in Norway, should Nigeria worry? DIPO OLADEHINDE

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he fear of what will happen to Nigeria if the world moves beyond oil seems to be becoming a reality as electric cars outsold fossil fuel vehicles for the first time in Norway last month. On numerous occasions, Nigeria’s depleting oil reserves have been extensively discussed as the unrelenting reduction without replacement had become worrisome however this fears are becoming real as Norway recorded 8.4 per cent share of sales in March which was “historically high.” The announcement from the Norwegian Electric Vehicle Association makes it the first time that more than half of the cars sold in the Norwegian market were fully electric. Why electric car is gaining momentum in Norway? Norway is the world leader in the sale of Electric Vehicles (EVs). According to estimates by the International Energy Agency (IEA), in 2017 it accounted for 39 percent of the market share of EVs, far ahead of Iceland in second place with 14 percent. The Scandinavian country is popularly known for providing big incentives to boost electric car

sales, waiving hefty vehicle import duties and reducing sales and registration tariffs while owners of electric vehicles are also allowed to circulate on bus lanes and are exempted from road tolls. In 2018, the market share rose to 49 per cent, above Iceland’s 19 per cent and Sweden’s 8.2 percent as Tesla’s Model 3 accounted for almost half of the 10,732 zeroemission vehicles registered in Norway in March. To further strengthen its drive for renewables, the Norwegian government has outlined plans to see only zero-emission vehicles

sold in the country by 2025. What other countries are doing right? Apart from Norway other countries are also strengthening their commitment towards renewables with the UK pledging half of all new cars to be hybrid or electric by 2030. Although the move angered environmental campaigners however it was welcomed by the car industry, the UK revised its “Road to Zero” plan and stopped short of a complete ban on the circulation of petrol and diesel vehicles in 2040.

Also, Germany is trying to respond to a diesel emissions cheating scandal that has engulfed the auto industry in the last three years by boosting electric car sales. Government subsidy schemes have helped lift sales but even so, Germany accounted for less than 2 per cent of total EV sales last year. The European Union has agreed to cut carbon dioxide (CO2) emissions from new cars by 37.5 per cent by 2030. Car-producing nations including Germany, the Netherlands and Denmark, have sought laxer time limits.

Implication for OPEC members In the event that oil disappears due to lower demand which could lead to access excess supply, Organization of Petroleum Exporting Countries (OPEC) nations such as Algeria, Venezuela and Nigeria, with no plans to diversify away from fossil fuel production as the core of the national economy will be left vulnerable to harsh economic reality. However the reverse is the case for OPEC leader Saudi Arabia and its Gulf allies who have spent the past few decades investing their oil profits in massive sovereign wealth funds prepped for a “rainy day” in the desert. These states will be able to exploit the savings to keep it together as they spearhead internal economic revolutions without oil. Implication for Nigeria The challenge for Nigeria is not necessarily what happens now, but what happens when the oil price crashes to its barest minimum with increasing attractiveness to produce electric cars from Europe to America and Asia. A majority of these advanced countries are also considering a ban on the sale of gasolinepowered cars, which could lead

ANALYSIS

Battery storage, recycling set to create next wave of boom ...as oil majors take position, increase market share STEPHEN ONYEKWELU

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nergy transition from fossil fuels to renewables has set the stage for a boom in the battery market, both for storage and recycling. French oil and gas supermajor Total wants to capture more of the growing Chinese battery market and has struck two separate deals to gain market shares in the world’s largest electric vehicle (EV) market and the world’s top liquefied natural gas (LNG) demand centre. To achieve this, Total’s subsidiary Saft has signed an agreement with China’s privately held Tianneng Group to create a joint venture (JV) to expand their lithium-ion battery production, the supermajor has said. Manufacturing will take place at the Changxing Gigafactory, with

a potential capacity of 5.5 gigawatt hours (GWh), several GWh of which are already in operation. British Petroleum (BP) is also investing in batteries. Last year, the company announced the acquisition of a US$20-million stake in StoreDot, a developer of ultrafast charging battery technology. Ultrafast charging is at the heart of BP’s electrification strategy. StoreDot’s technology shows real potential for car batteries that can charge in the same time it takes to fill a gas tank. The total size of the battery storage market will increase from $1.98 billion in 2018 to $8.54 billion in 2023. According to an estimate from GTM Research, total U.S. storage deployment should increase from 1.2 GWh in 2018 to more than 10 GWh by 2023. Investment in battery storage was $440 million in 2017, and will increase to $3.1 billion by

2022 to meet the surge in demand. Growth in battery storage market has been in lockstep with growth in the battery recycling market too. A recent report from Allied Market Research calculated the lithium ion battery recycling market would reach US$2.27 billion by 2025. That is up from US$138.6 million in 2017, which means a compound annual

ANALYSTS: Isaac Anyaogu (Team Lead), Stephen Onyekwelu, Dipo Oladehinde

growth rate of almost 42 percent. This is an impressive growth rate that will necessitate better recycling methods such as the one developed by the Rice University researchers in the United States of America, especially if the methods are cheap and less harmful to the environment than established processes. A materials science lab at Rice

University has developed a relatively green lithium ion battery recycling process that allows for the retention and subsequent reuse of valuable component elements such as cobalt. The method involves a so-called deep eutectic solvent - a compound that freezes at much lower temperatures than its constituent compounds - that can dissolve a variety of metal oxides, and the researchers reported that it had successfully extracted a substantial portion of the cobalt used in lithium batteries. Battery recycling certainly looks like the next frontier in energy storage and electronics. As the race to make batteries more reliable and longer-lasting continues, another one is beginning that will seek to find out how to better dispose of these longer-lasting and more reliable batteries once their life is over.

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email: isaac.anyaogu@businessdayonline.com, stephen.onyekwelu@businessdayonline.com, oladehinde.oladipo@businessdayonline.com


30

Tuesday 09 April 2019

BUSINESS DAY

BOOK SERIALISATION

W H Y N OT Citizenship, State Capture, Creeping Fascism, and Criminal Hijack of Politics in

Continued from yesterday

Chapter I A Haunting Metaphor

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iscouraging me from running because the corrupt who rule the parties would block the process seemed to pump up the old juices that made my early life one of protest. Should we accept that the Nigerian tragedy was irredeemable? But how do you prosecute a revolution without a strategy? Or, where are all the overly pessimistic? Did Adams Oshiomhole not work to have reformer technocrat Godwin Obaseki as Governor in Edo State? They cannot all be that stupid, surely? It was Leo Stan Ekeh, the ICT Entrepreneur, who put it well. I had checked in with him for his impression of my considering the run and if I could draw on his strong network and some financial contribution as well as keep him and a few others posted on what I was considering. I had briefed Aliko Dangote and one or two other friends from big business circles. But Leo Stan caught on quickly and stated that APC’s salvation journey would be elevated if they could find a few high-quality people of integrity. “If you are available, with your following in the country and reputation, if they have enough sense to embrace you and two or three others like you, that will reshape their fortunes.” So, is that good motivation to take this pressure to run more seriously? But how did it all start? Traveling the Path How did I find myself here struggling with the choice of whether or not to run for Governor of Delta? Evidently, many were troubled by the tradition of governing Delta with little progress. It was not hard to see why. The corporate exodus from Delta State can be seen on the streets. When Shell decided to leave Warri, it seemed the public officers were more interested in acquiring the assets Shell would be leaving behind than providing incentives for it to stay and keep the many jobs that would be lost directly and in support services, not to mention taxes. Many projects in Delta State were abandoned or in stages of revision and there seemed to be no vision propelling it in a particular direction like its neighbours – Anambra and Edo States – that only received a small fraction of what Delta was allocated, as a major oil-bearing state, under the derivation principles.

I have been open to be judged most of my adult life. To be fair, people have been kind and generous in their evaluation, perhaps much better than I deserve. I have also heard some incredible judgement that made me wonder, ‘Could that be me?’ Some comments have also come from extremely ignorant people. Tired of being judged and convinced I had enough to justify my claim to humanity with due solidarity to the race and certain audacity about pursuit of the common good, I thought I could justify to myself and my creator, a pacing down. I was also worried about legacy. In 1991 I had given an interview that would define how I see my purpose. It was not designed to be a philosophical journey. One of the reporters I had mentored from his undergraduate days wanted what I presumed was a lifestyle interview. It was to be published in a magazine for men, Mr Magazine. But Paul Arinze asked a question about purpose, about what motivates one to be so passionate, especially about Nigeria. Almost flippantly, but with a bit of thoughtful reflection, as I had just come out of weeks of hospitalisation after an automobile accident in which I was feared clinically dead at some point, I replied in words that captured my essence, thus; The purpose of being was the pursuit of immortality. Man was created to seek to live forever. The true reason for existence is for man to struggle to establish his personal purpose and live it such that long after his body had returned to dust, he would still be alive. He could live in the heads and hearts of men for his works, which I called material immortality, or he could attain spiritual immortality, which for most people of faith is to see God face to face and get the welcome, good and faithful servant acclamation from the Creator. Entering middle age meant more concern with immortality. I should be more concerned with how to live forever, and politics did not seem to be the best path, unless a Paul Kagame, Mahathir Mo-

hammed or Inatio Lula da Silva type transformation of the lives of people were highly probable. Already, I had taken principled stands that led to active canvassing of a takeover of the presidency when infirmity got the better part of a man who may have made a good President, Umaru Yar’Adua. I worked with the Save Nigeria Group and others to break the cabal’s hold on the Yar’Adua presidency. That did not stop me from concluding, like quite a number of others, that the will to do right by that government was so low that the idea of anybody but Jonathan was a welcome one five years later. When I began to feel frustrated that the government of Muhammadu Buhari did not seem engaged with the issues I had canvassed for years so we could prevent what I often referred to as the revenge of the poor, a paced disengagement from public life played high in my personal game plan. I was working on a plan to quietly stay away from public life while finding other ways of offering legacy building and immortality supporting service to God and neighbour when the solicitations regarding Delta State started. They started with the visits from individuals and groups to discuss the trouble with Delta. Some of the earliest came from Anioma people. These were my ethnic group leaders who had complained through the years that I ignored “my people” and focused on the broad canvas of Nigeria.

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I knew my dilemma with identity politics in Nigeria. Cosmopolitan in the classic sense of the word, in education, upbringing and places of domicile, I probably had not spent up to two full weeks in one stretch since 1968 in my place of origin I filled in all the forms I was required to complete. I cared for that identity and worked to advance the possibilities for advancement of my people. But I knew I did it also as a general part of human solidarity which I held for all men. Still, it was the basis for being sucked in and beaten over the head until my home in Lagos became the place for meeting of different groups advancing progress for Anioma or Ibusa people. Hardly did any week pass without one such meeting being held in my Lagos home. The early conversations were around how the incumbent Governor Ifeanyi Okowa, of Anioma stock, was wasting the Anioma turn by not assiduously developing the area and generally by governing poorly. My first response was to reach out to Okowa and extend my network and platforms to facilitate his governing much better.

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I facilitated a Lagos Business School initiative to bring him and his government closer to the private sector and draw investors into Delta State. The process resulted in a joint LBS/NESG breakfast briefing session for the Governor. The night before the breakfast session I hosted the Governor and his team to dinner at my home and invited leading diplomats and business people. At the LBS/ NESG session a young Delta State originating investment banker, Chuka Mordi, who was investing next door in Edo State called me out of the hall. Outside, he lamented that the lady from the BBC sitting by him was punching holes in just about everything the Governor was saying. Why can they not do a more decent job of a small thing like this, he queried. I had no answer, I just thought I was doing my citizen’s duty to expose the state to opportunity. It was not until a non-Anioma group began to challenge me about the state of Delta that I really began to worry and to feel guilty. Then came the group that really drew the patriot in me out of the shell. They were not even familiar enough to have my contact or


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BOOK SERIALISATION telephone numbers, so they had to find someone who found a person that gave them my number. What is really more important is; why I would take such effort more seriously? This is rooted in how I believe leaders emerge in contexts of service. I am convinced that in organisational and community settings, people can see leadership and identify leaders even when the people have no titles or authority. From the first day, I read Robin Sharma’s book, The leader who had no title, I was sure I had found the title for leadership. A person who can get things done without need for a title. I had always been firm in my view that when groups spot such talent, they should rally around such a person to advance the common good. I had led many such efforts in my life. An example I like to cite is the most seamless transition in leadership succession of the Igbo socio-cultural organisation, Ohaneze Ndigbo. The election of the PresidentGeneral of Ohaneze had become well known for the rancour associated with it even though the process had been reformed to reduce the challenges by an order of rotation in alphabetical order across states that were Igbo bearing. When the Anambra turn passed and the Anioma people were to produce a President-General I chose to make it my duty for Anioma to show example. I began with visiting the Asagba of Asaba Obi, Professor Chike Edozien. I briefed him on what I planned doing, outlining criteria such as making all Anioma people have a sense of inclusion. That made me give special preference to a Ndokwa or Ika person, so they did not feel that they were on the margins bothering our neighbouring non-Igbo speaking groups. I had other criteria around a strong sense of service and a certain level of personal prestige, integrity and independence of thought, so that the governors did not feel that they could pocket him with the dangling of some money. With the buy-in of the Asagba, I began direct conversations with people like Fortune Ebie and Felix Osifo, the founder of Osiquip. Then I moved to Ralph Uwechue. I was glad that Chief Uwechue told the story himself at the World Igbo Congress meeting in Orlando Florida in 2012. I called him and asked for where he was and a time to visit with him. He said he was in Abuja and that the following day was good. I then flew from Lagos to Abuja. I cut through the chase quickly and told him I had come to ask him to lead Ohaneze for the Anioma people and gave him reasons why he should. He then told me a number of things about why it seemed a problematic proposition even though he was disposed in principle. I assured him I would do the necessary work to clear the path. I returned to Lagos and then flew to Asaba to tell Asagba what the outcome of my efforts were. He also briefed me about some inter-

ested parties who had approached him. I assured him I would visit those people and review matters regarding the more suitable of the candidates. All went smoothly and Asagba came to Lagos to host a meeting of Anioma elite for briefing. All were in agreement. The Uwechue ascendency in Ohaneze would thus be the smoothest of PresidentGeneral elections in Ohaneze tradition. After the President-General took office, I hosted him to dinner at my Lagos home in 2009 to build into his network a younger group of Igbo business elite and then detached myself. Even when I was candidate for public office in 2011, I did not try to reach the PresidentGeneral to influence thinking in Ohaneze. I had not only promoted the idea of identifying people and persuading them to take on roles we thought they were suitable for but had myself been drawn into service in that manner. When I first served as VicePresident, and later, President of the University of Nigeria Alumni Association in Lagos, I had no such plans. When I was nominated by one of the elders and someone else was nominated, I actually voted for the other person. The majority chose me, and I had no choice, but to serve. More than a decade after I had served as President, I was again approached by some elders to return to the position to give it teeth even though several others were running for the position. When I saw the consensus, I thought it civic duty to oblige against my personal preference. It was not by accident therefore that my 1997 autobiography – To Serve is To Live – Autobiographical Reflections on the Nigerian Condition was centred around duty and the obligation to selflessly give of self to advance the common good. When the group of Govern-

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I had other criteria around a strong sense of service and a certain level of personal prestige, integrity and independence of thought, so that the governors did not feel that they could pocket him with the dangling of some mone

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ment College Ughelli Old Boys came to see me, I felt a sense of déjà vu. As the story goes, Johnny Esike was lamenting the state of Delta State and its politics. Ajiri Aluta, a friend of his, pointed him in my direction for where liberation could come from. I had never met Aluta and he had no clue how to reach me. As the conversation developed the group of the Old Boys thought one old boy who was not from Delta State, Philip Ikhile would be able to reach me. Philip knew me well but had lost my telephone number. He reached out to a former colleague from their banking days who was a mutual friend, Tony Nnacheta, who gave him my number and promised he would help soften the ground for their mission. They arrived as a group of about six people one late afternoon to make their pitch to persuade me to run for Governor of Delta State. When two years later the socalled cabal treasonably reduced the Delta State primaries of APC to charade and mockery of democracy, one of that group, Fiddles Akpoimare, called to share with me the depths of his pain at the development. He recalled how I was reluctant to embark on the journey when they came to see me. I assured him I had no regret and believed there was a purpose for what was going on. Had I not come on that journey, I would never have come to the kind of knowledge of the possibilities of human treachery, considered norm in Nigerian politics, a laboratory of which the process had exposed me to. I told him that now I had evidence to support my statement that Nigeria often seemed all dressed up with nowhere to go. Values, I was confident, shaped human progress, and seeing the values of those who emerged as gatekeepers into public office was enough to tell that progress was not in sight so the revolution needed to be reconsidered. To make the point that this kind of democracy is a dead end without the evidence I was now witness to would have been faulty. At the least now I had touched the Soul of our national Failure. We were beyond theory. I remembered how I thought a run for office was not the optimal choice even though I had a sacrificial commitment to a change in the political culture that was slowing down progress. Was it not better to allow the system inching Nigeria towards the ultimate blowout, with the revenge of the poor to play out? Was listening to Esike and his friends not defeat for the thesis that the system should just be allowed to move towards implosion, then the serious people left can work on reconstructive surgery. I had tracked the fault lines in the nature, structure and character of the Nigerian enterprise for a while. Did patchwork salvage effort from inside make sense? If in a governorship role, example could be shown, may be the high cost to life and property of the revenge of the poor that was bound

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I had not only promoted the idea of identifying people and persuading them to take on roles we thought they were suitable for but had myself been drawn into service in that manner

to come, in Robert Kaplan’s vision of The Coming Anarchy, would be mitigated. Should I take this kind of trouble? In my watch of the fault lines I had seen the class of state capture upfront. I had seen the gangster groups tagging along. I knew without a doubt that they found thinking people and straight arrows troubling around the lever of power. They knew they needed them for legitimacy. They also knew that there were enough of such people with whom they could earn legitimacy, who were less threatening to the status quo. ‘The poor and the greedy professors,’ as one professor-friend put it. They felt that they could find the dissenting voices that they could incorporate and squelch their voices, but they were quick to study the sample groups. I knew many found me threatening and believe many knew I would resist being incorporated. I had studied the corporatist state in post-colonial Africa and I was determined not to be incorporated and my voice silenced. My chosen strategy was to penetrate the extant order without becoming incorporated, and to use what I learnt from the penetration to structure a liberation initiative. I found, contrary to notions from the protest movement in which some of the days of my youth were framed that it was not just that the class of capture and their coconspirators were wicked, greedy and unpatriotic people. What I discovered were people also wanted to see their country make progress but had been spoiled by easy money that came from being in power when oil money poured into state coffers. These people were afraid of returning to the desert. Or in China Achebe, speak into the rain from which they had found cover. In the house of rent made assessible by power. In their self-love, a kind of petty narcissism, they found comfort in the impunity that allows self to be

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first. It was the culture of post-civil war Nigeria, a conflict that allowed the political power wielders of the time to consolidate power and personalise influence, and would dominate elite ethos. The district of intellect and the open public sphere became an approachavoidance conflict. They liked the idea of The Guardian Newspaper but despised some of the ideas expressed in it which started out with a commitment to growing the marketplace of ideas and making the public sphere more robust. They showed this in the many travails of The Guardian Newspaper, which went through a season of being prohibited and another of attempted assassination of its publisher by agents of state terror, the same set of assassins as were given the mandate for my own elimination because of my outspokenness and role in founding The Concerned Professionals (CP). They even tried Arson in which the Guardian premises were target. Having come to know the driving forces of power well, I thought I might want to leave public office alone and find less threatening ways of making tomorrow better than yesterday for all, no matter the size of their bank account, the faith they profess or confess and the tongue that put out words to communicate meaning. I had also seen cracks opening. One ‘okay’ person here and another there. Could the range of time we figured our pushing against the wall would take to make change happen, be getting shorter? I had become more convinced about my thesis on the class of capture when my friends thought our work of restoring Nigeria was done with General Abdulsalami Abubakar announcing the return to civilian rule in 1998. We had chosen to wind down CP with that announcement and leave politics to the politicians, even though some among our group had asked that we transmute into a political party. The class of capture would capture the main platform emerging at the time, the People’s Democratic Party, PDP, and install their own, Olusegun Obasanjo, as President. But many of the gangsters who were their cronies as soldiers in power filled the spaces of public life, making us realize we may have made a mistake in not listening to our colleagues like Waziri Mohammed and Donald Duke. The return of the concerned professionals, the banner under which we resisted military rule as educated professional men and women, now as the restoration group, a political movement had led to my being urged to run for the office of the president. Our clear purpose was to set the agenda for the 2007 elections, and, in the event of a statement, which we thought plausible in 2007, become a swing factor. Even with our agenda limited as it were, we wanted to run a serious campaign. I was going to campaign in every state of the federation. Continues on Wednesday


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NEWS Bayelsa community flays Kachikwu over comments on OML 29 lease Samuel Ese, Yenagoa

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inister of State for Petroleum Resources, Ibe Kachikwu, has come under attack over his statement that the litigation over the lease of OML 29 to Aiteo will not affect crude oil production. Kachikwu made the statement while speaking with journalists on the sidelines of the Nigerian Oil and Gas Opportunity Fair (NOGOF) in Yenagoa last week, saying he was yet to be served the processes. He had stated that the disagreement between the host community and the operators of the oil bloc will not affect the licensing process, saying, “To start with, I have not been served with the court processes and the case cannot affect oil production; we cannot halt oil production because there is a disagreement with the community.” But, the Opu-Nembe Kingdom of Bayelsa State, which is one of the

host communities of OML 29, has described Kachikwu’s statement as shocking, according to one of their legal counsels, Iniruo Wills. Wills, who is also president of the Ijaw Professionals Association (Homeland chapter), said: “That is a careless lie and a shocking disregard for the legal process and rule of law. “It unveils the minister’s sheer contempt for oil producing communities of the Niger Delta, and is extremely insensitive coming from such a highly placed public policy executive, especially a very senior lawyer, for its obvious potential to provoke host communities to take matters into their own hands, which we do not encourage and must do everything to avoid, including the plaintiff communities’ adoption of the legal process that Ibe Kachikwu is now thumbing his nose at.” It would be recalled that the people of Opu-Nembe (NembeBassambiri) in Bayelsa State on March 26 urged the Federal High

Court, Yenagoa, to halt the renewal of lease for OML 29 to Aiteo pending the outcome of a substantive suit before the court. The development is sequel to plans by the Minister of Petroleum Resources to renew the lease of OML 29 oil bloc to Aiteo for $82 million without regard to the position of the community in Suit No. FHC/ YNG/CS/62/2015. The plaintiffs are Ikaonaworio Eferebo-Igoma, Iyerite Chiefson Awululu-Atubu, Ayebaesin Edoghotu-Omoh, Markson AmaegbeOrutari, B.C. Benwari-Yousuo and Doibo Evans, representing OML 29 host communities. The defendants are AttorneyGeneral of the Federation, Minister of Petroleum Resources, Federal Ministry of Environment and Shell Petroleum Development Company of Nigeria. Others are Aiteo Exploration and Production Limited, AttorneyGeneral of Bayelsa State and The Deeds Registrar, Bayelsa State Ministry of Lands.

Trade Ministry clarifies status of NSEZCO … says Ministry of Finance is a shareholder HARRISON EDEH, Abuja

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ederal Ministry of Industry, Trade and Investment has made clarification against the backdrop of reports about the status of Nigeria SEZ Investment Company Limited (NSEZCO), also known as Nigeria Special Economic Zones Company Limited. The NSEZCO, the Ministry said, was incorporated as a special purpose vehicle to deliver Project MINE (Made in Nigeria for Exports), a Presidential initiative. The Ministry in a statement last week stated that the Federal Government’s Economic Recovery and Growth Plan (ERGP) identified the development of Special Economic Zones (SEZs) as a major stra-

tegic tool to accelerate the implementation of the Nigeria Industrial Revolution Plan (NIRP). Project MINE, against this backdrop, was envisioned by the Ministry of Industry, Trade and Investment to develop SEZs to world-class standards and position Nigeria as the preeminent manufacturing hub in sub-Saharan Africa and a major exporter of made in Nigeria goods and services regionally and globally. Project MINE was necessitated by lack of operating competitiveness that limits the growth of the zones, despite the presence of generous fiscal and regulatory incentives. It was further necessitated by the absence of a deliberate strategy to attract investors, create clusters or encourage the development of local value chains using

SEZs, and therefore the lack of appropriate link between the industrialisation strategy of government and the Free Trade Zones. Recall, in June 2018, the Federal Executive Council (FEC) approved NSEZCO, with the endorsement of the Economic Management Team, as the holding entity for FGN investments and proprietary interests in existing and future SEZs. The FEC approval also provides that all current and future capital appropriations for Project MINE should be transferred to NSEZCO’s account, as soon as opening formalities are completed. NSEZCO, as a result became the platform through which Federal Government’s capital budget appropriations for SEZs are converted into long-term value creating investments.

Solid Minerals business Cadastre Office to launch automated website to make mining application easier JOSEPH MAURICE OGU

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igerian Mining Cadastre Office of the Ministry of Mines and Steel Development will soon launch its automated website so as to make mining applications easier for potential investors who wish to apply for mining licenses. Obadiah Simon Nkom, director general of Nigeria Mining Cadastre Office, said this while addressing members of the Nigerian Mining and Geoscience Society (NMGS) recently. According to Nkom, when launched, applicants could submit, track and verify their

applications online. “This will eliminate the troubles of waiting for months before decisions are taken. With the automated website, decisions are reached in weeks,” Nkom said. In addition, the ministry is currently building offices across the six geopolitical zones in order to bring government closer to the people. According to Nkom, the new offices will make data available for the general public as investors would not have to travel to Abuja to get the same information. The director charged members of NMGS to rise to the occasion by providing the nec-

essary geoscience data for the ministry to work with. He acknowledged that Nigeria has a favourble geology but not enough data on mineral occurrences. Even where data exist, institutional and legal framework seem to be lacking, he said. “What process in respect to regulatory, institutional and legal framework have been put in place to be able to develop these minerals in orderly manner?” the director asked. When this is in place, according to Nkom, it will harness the industry from local investors to foreign investors, which will ultimately develop the industry to the benefit of the country.

Mining companies comply with government directives, evacuate from mining sites in Zamfara arely 24 hours into the 48-hour deadline given by the Fe d e r a l G o v e r n ment to all mining companies to leave mining sites in Zamfara State, mining companies have complied with government directives. The Federal Government had sighted security reasons for its decision to ban all mining activities in the state and ordered all mining companies to evacuate the mining areas within 48

(MAN), confirmed that miners have obeyed government directives and have started leaving the mining sites. “Everything is under control and people have started complying,” he said. According to him, the association applauded the development because it was in the interest of national security. Dele Ayanleke, secretary, MAN, said the directive is a welcome development but added that government should have carried the association along before making

Mines and Steel Development which is directly in charge of mining activities in Nigeria, has not officially communicated with the miners. He said the pronouncement further buttresses the association’s cry over the years that illegal miners have taken over mining activities in many parts of the country. Kankara said it was unacceptable where foreigners could possibly connive with illegal miners to cheat Nigerians of their valuable minerals. “A situation where for-

hours, so as to fight bandits who have unleashed mayhem on the state in their struggle to control gold mining areas. Kabir Mohammed Kankara, national president of Miners Association of Nigeria

the pronouncement. “Government was supposed to carry us along before the ban,” he said. He added that apart from the announcement made by the police, the Ministry of

eigners might be conniving with some dubious Nigerians who are not known to us to siphon billion of naira in the form of mineral resources outside the country is not acceptable,” he said.

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SYNLAB targets robust client experience with new offce

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YNLAB, formerly Pathcare Laboratories, says client experience is at the heart of its relocation, as the company, known for high-quality clinical laboratory testing, resumed service at the new address on 64 Adetokunbo Ademola Street, Victoria Island, Lagos. Tolulope Adewole, executive director, operations, SYNLAB Nigeria, said, “Our beautiful new location is more spacious with more than double the previous phlebotomy room capacity, reducing waiting time for our clients. ‘The new location offers

better parking facilities, while the modern interior and improved customer care is poised for a better customer experience.” He urged residents and those who work on the Isl a n d t o “c o m e a n d v i s i t us at our new home and experience healthcare as it should be, and not what we know it as.” It presently offers access to more than 5,000 tests, including some of the most advanced genetic tests. The company prides itself in the reliability and accuracy of their test results. In line with its vision to

make healthcare accessible, it has also opened a new ultramodern laboratory in Abuja and a patient care centre in Calabar during the first months of 2019. Construction is already underway on its Abeokuta facility. Over the past 15 years, SYNLAB has brought international expertise, world-class healthcare, new specialised services and enhanced medical diagnostic to Nigerians. The SYNLAB Group, Europe’s number one medical diagnostics provider, operates in more than 40 countries across four continents.

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Tuesday 09 April 2019

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NEWS PDP asks National Assembly to probe Buhari over N24trn debt profile OWEDE AGBAJILEKE, Abuja

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eople’s Democratic Party (PDP) has tasked the National Assembly to investigate President Muhammadu Buhari over alleged unwholesome borrowings leading to the escalation of the nation debt stock from N12.12 trillion in 2015 to N24.38 trillion in 2018. The main opposition party described as saddening and devastating the nation’s debt stock under the All Progressives Congress (APC)-led Federal Government. A statement on Monday by Kola Ologbondiyan, PDP National Publicity Secretary, also asked the Legislature to probe the terms of the borrowing and the handling of the funds in the present government. “The National Assembly should also save the future of our nation by restricting the Buhari administration from taking further loans on behalf of our country until explanations are provided on the terms and handling of the borrowed funds. “Nigerians cannot afford to continue to bear burden of an incompetent and insensitive administration and that is why they eagerly await the retrieval of our stolen mandate at the Presidential election petition tribunal. “Since President Buhari assumed office in 2015, there have been a culture of unexplained borrowings leading to a steep rise in the debt stock from N17.5 trillion in 2016 to N21.72 trillion

in 2017 and a huge N24.387 trillion in 2018. “It is shocking and completely insupportable that our nation’s debt had risen from N21.72 trillion in December 2017 to N24.387 trillion in December 2018, showing an accumulation of a whopping N2.66 trillion in a space of one year,” the statement reads. The Debt Management Office (DMO) had last week disclosed that Nigeria’s public debt had risen to N24 trillion as of December 2018. According to the party spokesperson, the borrowings and unbearable tax regimes by the present government have not only crippled productivity but also caused untold hardship and mortgaged the economic future of Nigerians. The party insisted that President Buhari’s administration lack the initiative to stimulate and run a productive economy. The statement added: “President Muhammadu Buhari-led administration therefore has a huge explanation to make to Nigerians for its borrowing spree, especially as it cannot point to any meaningful development project into which the borrowed funds were invested. “This is particularly against the backdrop of allegations in the public space that the borrowed funds, which were taken as development funds, were diverted to 2019 general elections campaign activities of the APC, a huge part of which ended in private pockets of corrupt APC leaders.

Pension reform: Edo presents N21.5m to families of deceased civil servants … showcases Edo’s exciting business opportunities at Dubai Investment Meeting

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o further demonstrate the state government’s commitment to driving pension reforms for the benefit of the state’s civil servants, Edo State acting governor, Philip Shaibu, has disbursed N21.5 million to eight families of deceased civil servants who are covered by the Group Life Insurance Policy and died while in active service. Presenting the cheques to the families, Shaibu said the event was the third time cheques would be presented to families of deceased civil servants. He noted that the state government had so far paid N28.7 million to families of deceased civil servants who were beneficiaries of the state contributory pension scheme. The acting governor expressed appreciation to Metropolitan Life Insurance Company for providing cover for all the employees enrolled under Edo

State Contributory Pension Scheme, adding, “This will be the third time Edo State Government will be giving out cheques to families of deceased civil servants since the state commenced the contributory pension scheme. “The first beneficiaries got their cheques on the 31st of July 2018; the second batch got theirs on the 30th of October 2018, while the third batch of cheques is presented today 8th of April 2019. The total we have disbursed so far is N28,700,450.64k. Today we are presenting N21,594,575.20k to eight families of deceased civil servants,” he noted. The State Head of Service (HoS), Isaac Ehiozuwa said the Contributory Pension Scheme provides that 300 per cent of the deceased’s salary be paid to his or her family, adding, “Today we have eight beneficiaries to receive cheques and this is the third time we are doing this.”

One of the beneficiaries, Peter Monday, expressed appreciation to the state government for doing the needful, noting, “We thank the state government for responding within six months after we lost our loved ones.” Meanwhile, pitching the state as an investor’s delight in Nigeria, Edo State governor, Godwin Obaseki has taken time off from his annual vacation to step up engagement with prospective investors for the array of blossoming industrial and enterprise parks in the state at the 9th edition of the Annual Investment Meeting holding from April 8 to 9, in Dubai, United Arab Emirates. The annual meeting in Dubai, according to its organisers, is “the largest gathering of corporate leaders, policymakers, businessmen, regional and international investors, entrepreneurs, leading academics and experts showcasing up-to-

date information, strategies and knowledge on attracting FDI.” Nigeria’s delegation to the meeting themed ‘Mapping the Future of Foreign Direct Investments (FDI): Enriching World Economies Through Digital Globalisation’ are President Muhammadu Buhari; Minister of State for Mines and Steel Development, Abubakar Bawa Bwari; executive secretary/ CEO, Nigerian Investment Promotion Commission (NIPC), Yewande Sadiku and Group Chief Executive, Oando plc, Nigeria, Wale Tinubu, among others. Governor Obaseki, at the meeting, engaged with investors on prospects of investing in the Benin Industrial and Enterprise Park; Benin River Port; Benin Auto Park; technology hubs and parks; housing estates and other projects to drive industrialisation and sustainable development in the state.

Fashola orders suspension of work on National Housing Project

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inister of Power, Works and Housing, Babatunde Fa s h o l a, ha s ordered the immediate suspension of work at the Abuja National Housing project in Gwagwalada, FCT. Fashola gave the order during the inspection of the ongoing Abuja Mass Housing project in Gwagwalada, on Monday. The News Agency of Nigeria reports that the Federal Capital Development Authority (FCDA) had written ‘Stop Work Inscriptions’ on buildings at the construction site. He said the suspension became necessary in order to settle any development control issues with the ministry and FCDA through due process. “As you can see, there are Development Control inscriptions on the buildings and it means there are development issues by the FCDA. My staff tell me that the issue has been resolved, but I also respect the law that says every development control restriction inscriptions must be complied with. “‘So, I am not going into that building; and I have ordered

the head of unit here to stop work immediately until these inscriptions are removed and I see documents to that effect. “This is one of the many ways that we can begin to take our laws seriously because this is a government development project and we need to respect the laws we make,’’ Fashola said. The minister said the construction of the mass housing project was ongoing in 33 states across the country where lands had been made available. He stated that aside from artisans involved in the project, contractors were engaged in the pilot scheme to deliver quality work. “The last time I was here, I was satisfied with the quality of work and I saw carpenters that were seriously engaged in the construction work. “That is what the Federal Government wants to achieve; to use housing schemes to stimulate employment in the country. “The Federal Mortgage site is a different concept entirely, they do not only lend money, but help you to build for people who want to pay rent,’’ he said. www.businessday.ng

L-R: Afolasade Alonge, divisional head, corporate and specialised banking, Heritage Bank Plc; Kikanwa Akpenyi, group head, customer experience and analytics; Soline Niyirahabimana, minister of gender and family promotion; Mother Dan-Egwu, group head, Experience Centre Coordination, and Uche Juliet Ajirison, Port Harcourt coordinator of African Women in Leadership Conference (AWLO), during the African Women in Leadership Organisation Conference held in Kigali, Rwanda, yesterday.

NERC’s mass metering via MAP to close metering gap by 25% HARRISON EDEH, Abuja

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he Nigerian Electricity Regulatory Commission’s (NERC) commencement of mass metering of electricity consumers beginning May 1 through the Meter Asset Provider (MAP) initiative is expected‎ to close metering gap by 25 percent, industry analyst says. Chuks Nwani, energy lawyer and power sector analyst, says the NERC has taken a bold initiative but the government needs to do more on metering consumers, re-set the tariff to enhance efficiency in the power sector value chain. According to Nwani, “The

government could source for a cheaper fund through the bond market and close the metering gap, while re-setting the tariff and ensuring consumers pay for the meter at a subsidised cost. Government can get cheaper funds than the private sector to support metering initiative thereby addressing liquidity concerns in the sector.” Notably, the NERC will begin mass metering for electricity consumers by May 1, to bridge the metering gaps in the country. Usman Arabi, NERC general manager, public affairs, in a statement says the metering will be executed under the

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MAP programme of the Federal Government. “The commission issued permits to MAPs on April 5, in accordance with Section 4(3) of the MAP Regulations 2018, to MAPs that were successful in the procurements. “The procurement was conducted by Abuja Electricity Distribution Company plc (AEDC) and Jos Electricity Distribution Company plc (JEDC). “Section 4(3) of the MAP Regulation 2018 requires all electricity distribution licensees to engage MAPs that would assist, as investors, in closing the metering gap. “AEDC has appointed Mojec @Businessdayng

International Limited, Meron Consortium and Turbo Engineering Limited to provide 487,000, 213,000 and 200,000 meters, while JEDC has appointed Triple 7 and Mojec International Limited consortium to provide 500,000 meters,” Arabi said. According to Arabi, customers of AEDC and JEDC should expect meters to be installed in their premises within 10 working days of making payment to MAPs. He said the payment and installation of the meters within the time frame were in accordance with Section 18 (3) of the MAP Regulations 2018.


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Tuesday 09 April 2019

BUSINESS DAY

NEWS Private developers’ encroachment ... Continued from page 1

of buildings have sprung

up very close to the airside, while some others still had scaffolding. This is in gross violation of provisions of International Civil Aviation Organisation (ICAO) as contained in documents 8973 on Aviation Security, which state that private and public structures including roads should have a space of at least 6 metres from the airport perimeter fences. Another document as provided by ICAO 11.2.2.9 states: “Whenever possible, the ground on both sides of a perimeter fence should be cleared in order to establish an exclusion zone (a distance of about 3 metres from the fence is recommended) that would remove cover for any intruders, and should be kept clear of obstructions, such as lamp posts, signposts, equipment, vehi-

cles, and trees, that may assist an intruder to climb the fence. The fence may have to be set from the actual site boundary to leave an unobstructed area outside the fence.” While our correspondent was unable to ascertain how the private developers got the land in the first place, experts say irrespective of how they got it, the development questions the ability of the Federal Airports Authority of Nigeria (FAAN) to adequately secure the airport. John Ojikutu, aviation security consultant and secretary-general of the Aviation Safety Round Table Initiative (ASRTI), told BusinessDay that these ICAO provisions are not adhered with at MMIA, “from Ikeja along and Santos Estates to Akowonjo, Egbeda, Shasha, Ejigbo, Ajao Estate, amongst others”. “How we get over the various ICAO security audits on

these, from 2008 when I started getting involved in Nigeria airports security audits, beats my imagination. FAAN needs to do more work that has remained unattended to for nearly 20 years,” Ojikutu said. The failure to adhere to these provisions is adding to the security woes experienced at the airport as several citizens have had sad tales in recent times. Atedo Peterside, chairman of ANAP Jets, last week said his jet was robbed on the tarmac of MMIA in Lagos while awaiting approval for take-off. According to him, the incident occurred at about 8:00p.m last Sunday, and he was amazed at the ability of unscrupulous persons to gain access to the airport. Peterside stressed that the incident showed that the Lagos airport was insecure and as the nation’s busiest airport, concerned authorities should be worried about what happened.

“When they opened the cargo hold, they saw only one bag in it and they took it. They would have taken all the bags if there were more bags there. What this shows is that Lagos airport is vulnerable in terms of security. If the security at the airport is fortified, they should not have been able to enter there at all,” he said. He also expressed concern over the untamed bushes that grow around the airport and said these bushes provide thieves areas to hide and carry out their unscrupulous acts. Early in December 2017, there were reports that a private jet was attacked on the runway18R of the airport by unknown bandits while taxiing to the hangar of Evergreen Apple Nigeria (EAN) Ltd. The jet was said to be arriving from Istanbul between 2110 and 2130hrs after landing in Lagos. Last year, a private jet conveying two known Nigerian musicians, Tiwa Savage and Wizkid, from Uyo, the Akwa

Ibom State capital, was allegedly robbed while taxiing on the runway. “The airport is within complicated road networks and uncontrolled urban development. Rather than the airport to develop into its own land, unfortunately, the private developers are encroaching into the airport land without restrictions from the responsible airport authorities,” Ojikutu said. “It is very doubtful if the airport authorities have sufficient documents to prove the extent and ownership of the land said to be designated as either Ikeja Airport or later Murtala Muhammed Airport. FAAN has a lot of work to do to get those who have encroached into its land around the airport,” he said. He also suggested that FAAN should begin to consider the provision of a secondary fence as security fence if enhancing the perimeter fence as security fence is not

Zenith appoints Onyeagwu Group... Continued from page 1

a very successful career

spanning over 27 years, with the last five years as GMD/ CEO. Ebenezer Onyeagwu is a vastly experienced banker and financial expert, trained in reputable institutions of learning in Nigeria, the United Kingdom and United States of America. He is an alumnus of the prestigious University of Oxford, England, from where he obtained a Postgraduate Diploma in Financial Strategy, and certificate in Macroeconomics. He also undertook extensive executive level business education in Wharton Business School of the University of Pennsylvania, Columbia Business School of Columbia University, the Harvard Business School of Harvard University (all in the United States) and

Lagos Business School of the Pan African University, Nigeria. Onyeagwu is a chartered accountant and was named a Fellow of the Institute of Chartered Accountants of Nigeria (FCA) in 2003. As deputy managing director, Onyeagwu has oversight over the bank’s financial control and strategic planning, risk management, retail banking, institutional and corporate banking business portfolios, IT group, credit administration, treasury and foreign exchange trading, as well as general administration of the bank, among others. With nearly 30 years’ experience in the banking industry in Nigeria, Onyeagwu, who is a graduate of accounting from Auchi Polytechnic, began his career at the defunct Financial Merchant Bank in 1991 and later held several management positions in the erst-

Insurers lose N220bn to rate... Continued from page 2

throat rate-cutting and declining underwriting standards as some of the major challenges facing insurance business in Nigeria. Borishade said these challenges are real threats to the survival of our industry, calling for innovative ap-

proach to the business. “We must continue to innovate better ways of managing our business in the most efficient, sustainable and profitable way, using best global practices as well as adapting these standards to our local environment,” Borishade said.

Apapa gridlock, smuggling dampen... Continued from page 2

kers, said the influx of smuggled sugar into the country has negatively affected most sugar processing companies. “A lot of these confectionery companies use these unlicensed sugars because it is cheaper. Dangote Sugar and Golden Penny are more expensive than those ones. And that is why Dangote had to cut prices last year,” Akinloye said.

“Also, smuggling and the Apapa gridlock were big issues for them last year. They had issues with their distribution network owing to the gridlock. So it affected distribution which also affected their volumes and sales,” he said. Although Nigeria banned packaged-sugar imports to protect local industries and diversify the economy, importers take advantage of the www.businessday.ng

feasible because of the magnitude of the violations of the standards along the length of the perimeter fence. “The perimeter fences are obligations to standards Annex 14 (Aerodrome Standards) while the provision of security fence is an obligation to standards in Annex 17 (Aviation Security). If we cannot or have not enhanced the perimeter of the airports or provide a secondary fence as the security fence, we are not complying with the minimum standards,” he said. However, Henrietta Yakubu, general manager, corporate affairs of FAAN, told BusinessDay that the recent cargo theft at the airport has nothing to do with the encroachment of buildings into the airside, adding that there are fences round about MMIA. “We have done an expansion and the airside is completely blocked and there is no access to the airside. I can tell you that there are no incursions,” Yakubu insisted.

while Citizens International Bank Limited until 2002. He joined Zenith Bank plc in 2002 as a senior manager in the Internal Control and

Audit Group of the bank. His professionalism, competence, integrity and commitment to the set objectives of the bank saw him rise swiftly between

2003 and 2005, first as assistant general manager, then deputy general manager, and eventually as general manager of the bank. In these capaci-

ties, he handled strategies for new business and branch development, management of risk assets portfolios, treasury functions, strategic top-level corporate, multinationals and public institutional relationships, among others. He was named executive director of the bank in 2013 and put in charge of Lagos and South-South Zones as well as strategic groups/business units of the bank, including financial control and strategic planning, treasury and correspondent groups, human resources group, oil and gas group, and credit risk management group, etc. He was named deputy managing director of the bank in 2016. Onyeagwu is on the board of Zenith Bank Ghana, Zenith Pensions Custodian Limited, Zenith Nominees Limited and African Finance Corporation. He brings to his job strategic thinking, inspirational leadership, energetic and entrepreneurial skills.

In 2017, NAICOM issued the price guide for compulsory insurances in a bid to end rate-cutting, unhealthy competition and inability of operating companies to meet claims obligation to policyholders. NAICOM, whose core responsibility is to protect insurance consumers that pass their risks to insurance

companies, warned operators to ensure strict compliance, assuring that the commission would monitor adherence. Affected policies include statutory Group Life Insurance, Builder’s Liability Insurance, Occupier’s Liability (public building) Insurance, Healthcare Professional Indemnity Insurance and motor

third party. In a circular signed by Leonard Akah of NAICOM, statutory Group Life Insurance, which is a fallout of the Pension Reform Act 2004 as amended in 2014, shall be 6.8 per mil. Rate for Motor Third Party, which incidentally has been the most abused, shall be for private motors

N5,000.00; commercial motors (own goods) N7,500.00; commercial motor (staff bus) N7,500.00; commercial motor (trucks/general cartage) N25,000.00; motor trade (road/premises risks) N5,000.00; special types (ambulance/hearses) N5,000.00; motorcycle (power bike) N1,500; and official ride N1,500.00.

nation’s porous borders to bring in the product. “Apart from smuggling and the Apapa gridlock, the new challenge that we noticed is that some of the smuggled sugar will be re-bagged into Dangote or Golden Penny packages and sold. The money is not going into the producer’s pocket but they are selling it to the consumers as that,” Yinka Ademuwagun, a consumer analyst at United Capital, said. Ademuwagun suggested

that the Nigerian borders need to be tighter so that they will be less tolerant to smuggling. Last year, Aliko Dangote, president of Dangote Group, urged the Federal Government to intensify actions against dumping of goods on Nigeria smuggled through the Republic of Benin. Also, FMN said it would partner with regulatory agencies to help curb smuggling. Smuggling has always been an issue in Nigeria as

it affects local production. It robs the nation of revenue and so affects provision of social services to entire community. Nigeria smuggles a lot of products such as textiles, sugar, pasta, vegetable oil, arms, ammunition, etc. And most of these items are banned in the country. Dangote Sugar Refinery plc, the largest sugar refining company in sub-Saharan Africa, was founded in 2000. The company manufactures and sells refined sugar to

consumers and industrial markets in Nigeria. Golden Penny Sugar Company was commissioned in 2013. Both firms are located in Apapa, Nigeria’s economic gateway. As at the close of trading session yesterday, Dangote Sugar’s share price traded at N13.75 with market capitalisation of 165 billion on the Nigerian Stock Exchange (NSE). FMN traded at N17.00 with a market capitalisation of 69.70 billion. Golden Penny is not trading on the NSE.

Ayman Sejiny (l), CEO, Islamic Corporation for the Development of the Private Sector (ICD), and Basheer Oshodi (r), group head, non-interest banking investments and products, Sterling Bank plc, during the signing of MoU by Sterling Bank and ICD in Marrakech, Morocco, at the weekend.

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Tuesday 09 April 2019

BUSINESS DAY

OPINION Government delivery units as tool for performance.... Continued from back page

public sector services and a set of strategic enablers (see Figure 2) which we believe are essential to delivering the ‘customer promise’ and consider the innovation of utilizing a GDU to bring about monumental change and provide excellence in service delivery for governments of today. Key features of successful Government Delivery Units We set out below the key features of successful delivery units. The starting point for any public sector organisation must be to set out a vision and mission which will energise its key stakeholders to action. The GDU team will be able to assist the Government in setting out and validating a clear strategy and mandate for the Government which will include the formulation of a strong and clear vision and mission and more importantly assist in guiding implementation. Apart from a clear vision and mission; highlighted below are six critical success factors for an effective GDU at the heart of Government. Case study of successful government delivery unit in action Under Governor O’Malley’s administration as Governor of Maryland, he recorded key success which he reportedly attributed to the efficiency of the Governor’s Delivery Unit he established. Governor O’Malley received several award for excellence in Governance Service Deliver and ranked #1 for innovation and entrepreneurship for three years in a row, according to the U.S. Chamber of Commerce. Maryland also ranked as one of the top three states for economic mobility based on workers’ ability to move up the earnings ladder, according to the Pew Center on the States, and Maryland achieved a faster rate of job creation than its neighbours Virginia or Pennsylvania. Limitations of Government Delivery Units It is to be noted that GDU’s are not responsible for setting the tone or having the strong political will to drive the agendas of the day, this is the sole responsibility of the political leader. The GDU will only be as strong and effective as the political leader allows them to be. Moreover, delivery units must be given powers and mandates to carry out their jobs unfettered without hindrances from politicians who want to push their personal agendas. The objective is to drive implementation towards policies that would impact most citizens. As noted above, GDUs are often positioned so as to regularly advise senior policy makers, and potentially craft solutions, solve complex problems. It is crucial to their success that the GDU is given full support of the highest level of the executive, and be located (both in proximity and given unfettered access to the political leader, either President, Governor or whoever’s mandate they are there to deliver. PwC Expertise: Our first hand experience managing Delivery Units at State level in Government Our team has extensive and unrivalled experience and expertise in setting up and delivering Government Delivery Units. We have a team of experts and specialists who have worked with a number of State Governments in Nigeria. Set out below are some of the deliverables provided to some of our State Government Clients. The PwC team were engaged to: Set up and run the Governor’s Delivery

Restructuring Nigeria: The irony ... Continued from back page

Delivery units must be given powers and mandates to carry out their jobs unfettered without hindrances from politicians who want to push their personal agendas Unit whose role is to: •Serve as a Central Policy and Strategy ‘Think-Tank’; •Provide coordination across all Ministries Departments and Agencies of government; •Provide oversight of the progress and implementation of the Governor’s priorities under the key strategic pillars; •Assist with the formation and management of a Finance and Development Commission. • Set up and provide terms of reference for a Governor’s Advisory Council. • Provide Subject Matter Experts (SMEs) with relevant expertise and industry knowledge to review, provide insight, give presentations and make recommendations to the Governor on their areas of specialism as required by the Governor. •As required, provide additional services on request in relation to the implementation of specific projects. • Provide analytical support and recommendations to overcome key delivery challenges. It is worthy to stress here that the GDU’s are not set up to compete in anyway with existing formal structures of government such as the Executive Council or the Ministries, Departments and Agencies, contrary to this, they are infact set up to support these essential and critical arms of government. GDUs by their nature require holistic, ‘entire-government’ perspective and sufficient authority to ensure all key officials across government are all on board to ensure the removal of all obstacles, deepen internal relationships by ensuring all arms of government are united and working towards the same mandate, improve coordination to avoid silo-working mentality. GDUs are often referred to as the ‘fire-fighting’ engine room for Government to rely on as they help ministries think through and resolve problems preventing them from achieving their objectives, provide advisory services to program managers and directors as well monitor, evaluate and keep government accountable on its stated objectives, and manifesto promises. Our experience suggest that, by using the knowledge of new innovations and constructs such as a GDU, Governments, whether at state or federal level can continuously improve their own service delivery models to directly impact the lives of the citizens who voted them into power –not by trial and error, but by adopting proven best practice models from around the world. Understanding learnings from Governments and Countries across the globe that you aspire to emulate should serve as inspiration to implement the same innovations and reforms they have adopted in order to ensure the success of your own administration. www.businessday.ng

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pital bills and food. Just like companies, individuals must have revenues that surpass their costs. Understanding this revenue-cost relationship helps predict circumstances where the likelihood of corruption will be high. For example, if a police recruit in Nigeria earns N10,000 naira and Corporals earn about 40,000 to 50,000 naira per month. (approximately $120 dollars) but has a cost structure that demands he spends N200,000 a month, he will be susceptible to corruption, regardless of what the laws dictate.This would also apply to a poorly paid judge or a judge with a high cost structure. Third, people hire corruption because most individuals — regardless of income level — will subvert the law to make progress or benefit themselves. According to Harvard academics Edward Glaeser and Andrei Shleifer, when confronted with a law that limits our ability to do what we want to do, most of us make a mental calculation: Do I need to obey this law, or can I get away with disobeying it? And which way will I be better off? If the scale tips toward disobedience, then it is irrational for the individual to obey the law, no matter how “good” it might seem. In Nigeria when the seat belt was introduced years ago many people got caught by police officers for

President Muhammadu Buhari driving without seat belts, but as people began to rationalize and conclude that wearing the seat belt is easier than bribing a police officer, we all wore our seatbelts and today it has become a habit. The book drew some interesting conclusions about the fight against corruption: Firstly, that 79 percent of the 7.6 billion people in the world live in countries with “corrupt” governments and more than two-thirds of the countries measured by global anti-corruption group Transparency International score lower than 50/100 on the annual Corruption Perceptions Index. The average score worldwide is 43. So, corruption is pervasive worldwide. Secondly that development often precedes successful anti-corruption programs, not the other way around. Once enough markets are created, markets provide jobs that give

people a viable alternative to accumulating wealth through corrupt means. There was a time when corruption in America rivaled corruption in some of the poorest countries today. Anti-corruption in America was not triggered by legislation or increased law enforcement; it came about because the fundamental equation of how Americans could make money, make progress, and make a living changed.The book used Taiwan as another example of a country that has reduced corruption by development – corruption reduced as citizens have options to grow wealth and wages grew across board. I believe and emphasize that any anti-corruption war that does not include increasing wealth creation opportunities with shorter cycles in predictable environments is in for a long expensive war,which unfortunately has bleak pros-

Audu Ogbeh’s devaluation... Continued from back page

low productivity in the first place, countries are forced to adjust their rates in order to remain competitive and continue to be able to import the goods they need for their industries. The problem is that, as often as Nigeria devalues, we fail to put in place and pursue the policies that make countries richer. Instead, we engage in populist economic policies such as subsidising petroleum consumption, subsidising rail tickets from Abuja to Kaduna, wastage of oil resources by the same ministers providing devaluation excuses, provide no concrete investment in education, and continue to tolerate an unproductive civil service. I have noticed that our politicians are very quick to make populist statements, and this government has mastered the act more than any other. In the same statement in which the Minister is complaining about too much importation, he’s also complaining that the “Harvard” economists want

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Audu Ogbeh

the government to devalue its currency further. That’s inconsistent, because further devaluation is expected to lead to increase in exports. And in the same week the video came out, Bloomberg did a very interesting story about US $300 million worth of cashew bound exports wasting at our ports. Instead of the minister ranting about imports, he should tell us how the government is helping exporters, for which their progress will mean increasing our capacity to keep our exchange rates stable. It is the policies that drive exports, competitiveness, and productivity that countries focus @Businessdayng

on. But here, we refuse to learn and our trade policies over the years have been limited to either ban or increase in tariffs. While these trade policies are in place, a sensible government would have a plan to drive up production and competitiveness, but not in Nigeria. Economics don’t work that way. The only way successful importers and even smugglers can make money is because it’s still competitive to do so. Finally, as the minister is particularly interested in the rate at which we trade, can someone please ask him where is Nigeria’s comprehensive trade strategy?Because how we want to trade is more important, and it’s broader than at the rate we want to trade. But we do not have one. That’s why when we do not know what we stand to gain with the African Continental Free Trade Agreement (AfCTA), we cried wolf in response. But serious countries are formulating their comprehensive strategies for engagement.

I thank you.


36

Tuesday 09 April 2019

BUSINESS DAY

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Trades

Volume

PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 199,053.26 5.60 -1.75 217 24,885,593 UNITED BANK FOR AFRICA PLC 205,196.53 6.00 -3.23 390 19,381,410 ZENITH BANK PLC 634,209.17 20.20 -0.74 279 26,640,919 886 70,907,922 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 262,035.64 7.30 -0.68 343 21,592,999 343 21,592,999 1,229 92,500,921 BUILDING MATERIALS DANGOTE CEMENT PLC 3,161,014.12 185.50 -1.85 85 670,864 LAFARGE AFRICA PLC. 186,045.04 11.55 - 44 272,438 129 943,302 129 943,302 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 347,182.29 590.00 - 8 648 8 648 8 648 1,366 93,444,871 REAL ESTATE INVESTMENT TRUSTS (REITS) SKYE SHELTER FUND PLC 1,710.00 85.50 - 0 0 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 11,300.89 45.20 - 3 6,800 UPDC REAL ESTATE INVESTMENT TRUST 14,408.66 5.40 - 2 2,700 5 9,500 5 9,500 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 5 9,500 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 0 0 OKOMU OIL PALM PLC. 76,312.80 80.00 - 24 33,101 PRESCO PLC 62,750.00 62.75 - 8 1,764 32 34,865 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 511.20 4.26 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,590.00 0.53 - 8 105,410 8 105,410 40 140,275 DIVERSIFIED INDUSTRIES A.G. LEVENTIS NIGERIA PLC. 820.66 0.31 - 4 1,018 JOHN HOLT PLC. 202.36 0.52 - 1 181 S C O A NIG. PLC. 1,903.99 2.93 - 0 0 TRANSNATIONAL CORPORATION OF NIGERIA PLC 46,338.71 1.14 -1.72 122 11,406,388 U A C N PLC. 20,601.27 7.15 -2.72 95 1,701,665 222 13,109,252 222 13,109,252 BUILDING CONSTRUCTION ARBICO PLC. 711.32 4.79 - 1 30 1 30 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 36,300.00 27.50 - 8 12,890 ROADS NIG PLC. 165.00 6.60 - 0 0 8 12,890 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 4,313.34 1.66 - 1 10,212 1 10,212 10 23,132 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 10,334.94 1.32 - 17 480,210 GOLDEN GUINEA BREW. PLC. 242.22 0.89 - 0 0 GUINNESS NIG PLC 131,422.97 60.00 -3.92 25 110,718 INTERNATIONAL BREWERIES PLC. 202,002.76 23.50 - 7 19,704 NIGERIAN BREW. PLC. 479,814.12 60.00 - 82 3,740,394 131 4,351,026 FOOD PRODUCTS DANGOTE FLOUR MILLS PLC 42,500.00 8.50 -0.58 59 1,604,935 DANGOTE SUGAR REFINERY PLC 165,000.00 13.75 -1.08 57 5,273,480 FLOUR MILLS NIG. PLC. 69,706.45 17.00 -1.73 36 594,994 HONEYWELL FLOUR MILL PLC 8,723.22 1.10 -5.17 35 837,869 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 766.26 4.30 - 4 73,000 NASCON ALLIED INDUSTRIES PLC 52,988.77 20.00 - 16 26,095 UNION DICON SALT PLC. 3,676.41 13.45 - 1 345 208 8,410,718 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 19,721.12 10.50 - 7 15,082 NESTLE NIGERIA PLC. 1,149,351.57 1,450.00 - 80 130,155 87 145,237 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 4,815.75 3.85 - 14 154,800 14 154,800 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 38,910.68 9.80 - 28 99,000 UNILEVER NIGERIA PLC. 201,075.19 35.00 - 30 98,343 58 197,343 498 13,259,124 BANKING ECOBANK TRANSNATIONAL INCORPORATED 206,432.45 11.25 -3.02 28 2,729,126 FIDELITY BANK PLC 56,211.11 1.94 -2.51 66 2,363,031 GUARANTY TRUST BANK PLC. 1,000,660.09 34.00 -2.86 528 78,326,102 JAIZ BANK PLC 14,732.12 0.50 2.00 22 2,589,723 SKYE BANK PLC 10,687.83 0.77 - 0 0 STERLING BANK PLC. 74,567.18 2.59 -0.38 51 93,423,721 UNION BANK NIG.PLC. 189,284.89 6.50 -7.14 27 571,215 UNITY BANK PLC 8,533.22 0.73 - 13 184,648 WEMA BANK PLC. 26,616.38 0.69 - 28 1,914,335 763 182,101,901 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 1 200,000 AIICO INSURANCE PLC. 4,504.63 0.65 1.56 15 542,426 AXAMANSARD INSURANCE PLC 21,000.00 2.00 - 6 15,351 CONSOLIDATED HALLMARK INSURANCE PLC 2,032.50 0.25 -7.41 3 701,000 CONTINENTAL REINSURANCE PLC 19,811.94 1.91 - 0 0 CORNERSTONE INSURANCE PLC 3,093.20 0.21 -4.55 6 575,268 GOLDLINK INSURANCE PLC 2,001.98 0.44 - 1 20 GUINEA INSURANCE PLC. 1,228.00 0.20 - 0 0 INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 0 0 LASACO ASSURANCE PLC. 2,123.80 0.29 3.57 20 11,021,750 LAW UNION AND ROCK INS. PLC. 2,191.13 0.51 - 4 109,036 LINKAGE ASSURANCE PLC 4,000.00 0.50 - 1 23,000 MUTUAL BENEFITS ASSURANCE PLC. 1,760.00 0.22 10.00 13 9,783,800 NEM INSURANCE PLC 12,303.57 2.33 - 17 183,920 NIGER INSURANCE PLC 1,625.29 0.21 5.00 5 365,870 PRESTIGE ASSURANCE PLC 2,960.40 0.55 - 0 0 REGENCY ASSURANCE PLC 1,533.81 0.23 4.55 4 1,050,100 SOVEREIGN TRUST INSURANCE PLC 1,918.39 0.23 -4.35 178 15,342,152 STACO INSURANCE PLC 4,483.72 0.48 - 0 0 STANDARD ALLIANCE INSURANCE PLC. 2,582.21 0.20 - 2 20,000 2,800.00 0.20 - 0 0 SUNU ASSURANCES NIGERIA PLC. 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 - 0 0 WAPIC INSURANCE PLC 5,353.10 0.40 - 13 699,934 289 40,633,627

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MICRO-FINANCE BANKS FORTIS MICROFINANCE BANK PLC 11,799.67 2.58 - 0 0 3,109.83 1.36 -8.72 3 151,800 NPF MICROFINANCE BANK PLC 3 151,800 MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 3,780.00 0.90 - 0 0 ASO SAVINGS AND LOANS PLC 7,370.87 0.50 - 0 0 5,922.05 1.42 - 0 0 INFINITY TRUST MORTGAGE BANK PLC 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 7,240.00 3.62 -3.72 71 2,370,532 CUSTODIAN INVESTMENT PLC 35,879.37 6.10 -0.81 16 4,275,048 DEAP CAPITAL MANAGEMENT & TRUST PLC 660.00 0.44 - 0 0 FCMB GROUP PLC. 37,031.07 1.87 1.08 86 3,897,126 ROYAL EXCHANGE PLC. 1,492.16 0.29 - 0 0 442,391.89 43.20 -6.59 20 3,645,844 STANBIC IBTC HOLDINGS PLC UNITED CAPITAL PLC 15,600.00 2.60 -1.89 114 4,721,018 307 18,909,568 1,362 241,796,896 HEALTHCARE PROVIDERS EKOCORP PLC. 1,680.29 3.37 - 0 0 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 781.69 0.22 -4.35 26 3,670,473 26 3,670,473 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 544.04 0.55 - 0 0 0 0 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 6,075.00 4.05 -10.00 15 223,822 FIDSON HEALTHCARE PLC GLAXO SMITHKLINE CONSUMER NIG. PLC. 11,360.83 9.50 - 26 199,977 3,968.04 2.30 - 14 119,183 MAY & BAKER NIGERIA PLC. NEIMETH INTERNATIONAL PHARMACEUTICALS PLC 1,063.53 0.56 9.80 12 595,283 NIGERIA-GERMAN CHEMICALS PLC. 556.71 3.62 - 0 0 325.23 1.50 - 0 0 PHARMA-DEKO PLC. 67 1,138,265 93 4,808,738 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 710.40 0.20 - 0 0 0 0 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 1,470.89 0.50 - 0 0 0 0 IT SERVICES CWG PLC 6,413.06 2.54 - 1 5 NCR (NIGERIA) PLC. 648.00 6.00 - 0 0 346.47 0.70 -9.09 7 60,000,000 TRIPPLE GEE AND COMPANY PLC. 8 60,000,005 PROCESSING SYSTEMS CHAMS PLC 1,220.98 0.26 8.33 16 13,712,919 E-TRANZACT INTERNATIONAL PLC 11,088.00 2.64 - 0 0 16 13,712,919 24 73,712,924 BUILDING MATERIALS BERGER PAINTS PLC 2,622.90 9.05 - 11 100,119 CAP PLC 23,590.00 33.70 - 3 2,110 CEMENT CO. OF NORTH.NIG. PLC 223,439.52 17.00 - 48 487,870 FIRST ALUMINIUM NIGERIA PLC 675.31 0.32 -3.03 4 145,858 MEYER PLC. 286.87 0.54 - 1 100 1,999.41 2.52 - 2 100 PORTLAND PAINTS & PRODUCTS NIGERIA PLC PREMIER PAINTS PLC. 1,279.20 10.40 - 2 40 71 736,197 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,256.91 2.09 - 0 0 3,170.38 1.80 - 6 152,814 CUTIX PLC. 6 152,814 PACKAGING/CONTAINERS BETA GLASS PLC. 29,173.37 58.35 - 5 2,050 GREIF NIGERIA PLC 388.02 9.10 - 0 0 5 2,050 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 0 0 0 0 82 891,061 CHEMICALS B.O.C. GASES PLC. 1,577.57 3.79 - 1 199 1 199 METALS ALUMINIUM EXTRUSION IND. PLC. 1,803.64 8.20 - 0 0 0 0 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 0 0 0 0 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 55.00 0.25 - 0 0 0 0 1 199 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,252.54 0.20 - 7 31,009 7 31,009 INTEGRATED OIL AND GAS SERVICES OANDO PLC 62,157.06 5.00 1.01 67 1,033,425 67 1,033,425 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 61,661.79 171.00 0.59 17 1,915,976 CONOIL PLC 15,960.90 23.00 - 17 32,550 ETERNA PLC. 5,542.61 4.25 6.25 30 8,272,740 FORTE OIL PLC. 35,101.87 26.95 -1.64 47 450,610 MRS OIL NIGERIA PLC. 6,354.80 20.85 - 1 350 TOTAL NIGERIA PLC. 66,546.28 196.00 - 28 19,040 140 10,691,266 214 11,755,700 ADVERTISING AFROMEDIA PLC 2,219.52 0.50 - 0 0 0 0 AIRLINES MEDVIEW AIRLINE PLC 17,551.17 1.80 - 1 200 1 200 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 376.43 0.32 - 0 0 0 0 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 3,242.23 5.50 - 2 14,000 TRANS-NATIONWIDE EXPRESS PLC. 323.50 0.69 - 3 161,248 5 175,248 HOSPITALITY TANTALIZERS PLC 642.33 0.20 - 0 0 0 0 HOTELS/LODGING CAPITAL HOTEL PLC 4,801.22 3.10 - 1 200 IKEJA HOTEL PLC 4,698.08 2.26 - 2 510 TOURIST COMPANY OF NIGERIA PLC. 7,862.53 3.50 - 0 0 TRANSCORP HOTELS PLC 41,042.18 5.40 - 5 11,000 8 11,710 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 4,800.00 0.40 - 8 30,000 8 30,000 PRINTING/PUBLISHING ACADEMY PRESS PLC. 199.58 0.33 - 1 1,350 LEARN AFRICA PLC 1,033.74 1.34 8.94 4 206,316 1,183.82 1.99 - 0 0 STUDIO PRESS (NIG) PLC. UNIVERSITY PRESS PLC. 780.85 1.81 - 7 74,612 12 282,278 ROAD TRANSPORTATION ASSOCIATED BUS COMPANY PLC 795.70 0.48 - 5 101,500 5 101,500

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BUSINESS DAY

Tuesday 09 April 2019

NEWS Regulatory inconsistency, tariff mismatch worsening Nigeria’s power sector woes’ … analysts call for resetting of electricity market HARRISON EDEH, Abuja

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igeria’s power sector’s poor performance six years post- privatisation has been largely linked to regulatory inconsistencies, alongside tariff mismatch, which most industry watchers identify as key factors militating against the progress of a sector that is at the heart of Nig‎eria’s industrialisation journey. Industry watchers have further attributed the general inefficiency in the sector to lack of appropriate price regime for the sector, and weak infrastructure investment on the part of the Discos. “I can tell you that in power sector today, the retail price is far more lower than production cost. If the selling price is lower than the buying price, so as distributors, if the cost I am selling electricity is lower that than the cost I am allowed to buy, that is selling at a lost. This is fundamental economics theory, and it is fuelling inefficiency of the sector,” Sunday Oduntan, executive secretary of Association of Nigeria Electricity Distributors of Nigeria, told BusinessDay. According to Oduntan, “The consequence of this huge short-

fall is inefficiency of the sector, because efficiency is largely linked to pricing. Secondly, this is why you see communities contributing money to repair their own transformer, and people buying their cables, which they are not supposed to do. This is because the entity that should carry this load, cannot carry it amid the huge shortfall, and inappropriate pricing.” ‎By 2005, the extant laws than govern the power sector came into effect, which is the Electricity Power Sector Reform Act, while empowering the regulator to enact laws that govern and guide the sector. In the regulation, there is an establishment of a multiyear tariff order, which ought to factor in exchange rate differentials, inflation rates as well as lending rates to reflect the appropriate price regime that ought to move the sector forward. BusinessDay findings reveal that the inability of the regulator to effect a Multi-Year Tariff Order (MYTO) since February 2016 had resulted in the accumulation of over N1.4 trillion shortfall in the nation’s electricity market. “The MYTO is a legal directive and ought to be reviewed every six months.

“In the MYTO, there is a requirement for what is called minor review of the tariff. That should happen every six month, it may interest you to know that the current tariff that we have came on board on February 4, 2016, and there has never been a single minor review,” Oduntan said. The minor review would have to consider the power generation level in the country, inflation, foreign exchange, lending rate and other index, he said. He said anything short of a six monthly review period for the sector would not be ideal, adding that records showed over N1.4 trillion had been accumulated as shortfall in the value chain as a result of non-review of tariff since February 2016. Coming on the heels of this development, power sector analysts have called for the resetting of the power sector market by the Federal Government to get liquidity back to the sector, since the balance sheet of the Discos, Gencos and gas companies and key players in the value chain are all in negative, as they have individual debt the market is owing them.

FG discovers high quality platinum mineral in Niger

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ederal Government says it has discovered high quality of platinum group elements in a village in Niger State. Abubakar Bwari, minister of state, Mines and Steel Development, announced this on Monday at the groundbreaking ceremony of AG Vision Mining Site in Suleja Local Government Area of the state. Bwari said the large mineral deposit was discovered at Kuchiko village in Suleja, adding that the quality of the discovery was higher than that of South Africa, regarded as the highest deposit of the mineral in the world. “A preliminary report by the company shows high deposit of minerals we are looking for. “From what we have seen, the results are quite encouraging. The platinum group they have seen so far, the quality we have is higher than that of South Africa. And they are world largest producer of platinum group metal. “That goes to show that Nigeria is highly endowed with this mineral. But what we are looking for now is the commercial viability of the mineral,’’ he said. He said the discovery was made by AG Vision Mining, awarded the exploration project in 2018. He said the Federal Government had earmarked N15 billion for exploration of minerals

in Nigeria to generate detailed geo-science data of quality and quantity of available minerals in the country. He said the project aimed at addressing one of the key challenges in the development of the solid minerals sector, which was the absence of bankable mineral data. “No investor will take us seriously if we are unable to provide the kind of accurate, verifiable data that speaks to both the quality of mineral we have in Nigeria. “This project is the biggest exploration activity of its kind ever embarked upon by the ministry,” he said. According to him, the project is domiciled in the Nigerian Geological Survey Agency (NGSA) and it is being supervised by the MMSD, it is also funded through the Natural Resources Fund. The News Agency of Nigeria reports that the N15 billion was drawn from the Natural Resource Development Fund to the ministry as intervention fund to focus on exploration, which is the heart of mining. He said that the project was designed to be executed and funded in phases, from the desktop studies, geological mapping among others. The state minister said that all exploration companies and consultants handling exploration projects should provide reports at the end of each pro-

ject phase. “The objective of the project is not limited to the generation of detailed geo-science information like ore reserves, mineral occurrences, discovery and reporting of new minerals, quality and grade of ore and minerals. “The objective is to also improve the geological knowledge of the locality, generate wealth and employment along value chain; the outcome of the project will be used for policy and research purpose.” Abubakar Mua’zu, permanent secretary of the ministry, said the project was timely, as it would attract more mining investors into the country. Abdulrazak Garba, director-general, Nigeria Geological Survey Agency (NGSA), said the project was initiated to bridge the gap between exploration data and mining development. Garba said the project was also designed to know locations of minerals such as gold, lead and zinc, silver, copper, tantalite among others in Nigeria. Fadi Ghazale, managing director, AG Vision Mining, said the event was another landmark in the roadmap towards development of Nigeria’s solid minerals industry. According to Ghazale, AG Vision Mining is currently exploring in many states, such as Niger, Ogun and Oyo states.

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Tuesday 09 April 2019

BUSINESS DAY

NEWS FG urged to harness women’s potential for socio-economic sustainability SEYI JOHN SALAU

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he Federal Government has been urged to harness the immense potential of the women population in terms of their multi-tasking ability, intuitiveness, diligence, integrity, and organisational capacity, as Nigeria continues to build towards economic growth and sustainability. This position was stated by Ahmed Rufai Mohammed, president and chairman, governing council, Institute of Directors (IoD) Nigeria at the 2019 women directors’ luncheon in Lagos with the theme, ‘Are You Board Ready?: Strategies for Success.’ According to Mohammed, no nation can afford to ignore half of its population in its economic activities, especially when a reasonable number of that population is acknowledged to have the physical and intellectual ability to contribute towards nation building. “The persistent lack of diversity in many of our corporate boardrooms is an issue that requires

continuing focus until our corporate boardrooms (in both private and public sectors) reflect the diversity in our population and take advantage of the potential of our female gender who are increasingly becoming highly educated, sophisticated and professional like their male counterparts,” Mohammed said. Idiat Oluranti Adebule, deputy governor of Lagos State, said women were known to be more emphatic, assertive and persuasive as well as having strong interpersonal skills to ensure successful implementation of policies and programmes for the growth and development of the society. Adebule said the focus should be to increase the number and influence of women in politics and business leadership positions. “What needs to be done is to take leadership amongst women to the next level and we must adopt the right approach and embrace practical solutions that can improve women’s path to leadership role in proportion to our numbers.

Branch International announces strategic partnership with Visa …raises $170m Series C financing led by Foundation Capital, Visa

DANIEL OBI

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ranch, the most downloaded finance app in Africa, has announced a new global partnership and investment with Visa. The two companies share a vision of bringing financial access to billions of people still unreached by banks. Visa’s investment in Branch International will help expand financial access across the Africa, while fuelling new expansion in India and Latin America. Branch and Visa will team up to offer virtual prepaid debit card numbers to customers around the world. This enables unbanked Branch customers the option to receive credit at any physical ATM, bypassing the need for a bank account. “We started Branch in Kenya, where M-Pesa gives anyone with a phone - including the unbanked - access to digital credit. Unfortunately, mobile money isn’t available in most countries. With the help of Visa, now we can send cash to any ATM and reach the underserved around the planet,” Matthew Flannery, CEO/co-founder of Branch, says in a statement. “Traditional barriers such as

a credit score and bank account make financial accessibility a challenge for over 2 billion people in the world. Yet many in underserved markets have a financial tool right in their pocket - their mobile phone. By tapping into the rise of mobile technology worldwide, Branch aims to radically expand financial access, making full global inclusion a reality in our lifetime. “At Visa we believe financial empowerment is an essential passport out of poverty,” Bill Sheedy, executive vice president of Strategy at Visa, says. “Our partnership with Branch provides Visa a key distribution mechanism to reach people that were previously out of reach and help shape the future of microfinance.” Branch, founded in 2015, which delivers world-class financial services to the mobile generation, also in the statement announces the close of its Series C financing, a $ 170 million round led by Foundation Capital and Visa. It says joining this round of investment are existing investors, Andreessen Horowitz, Trinity Ventures, Formation 8, the IFC, CreditEase, and Victory Park as well as new investors, Greenspring, Foxhaven, and B Capital.

Fire engulfs Sam Mbakwe Airport, Owerri IFEOMA OKEKE

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here was chaos at the Sam Mbakwe International Cargo Airport in Owerri, Imo State, yesterday after the airport was engulfed by fire. A statement sent by Henrietta Yakubu, general manager, corporate affairs, Federal Airports Authority of Nigeria (FAAN), confirmed the incident. According to the Authority, it wishes to inform passengers and the general public that there was a fire incident that affected some parts of the terminal building of Sam Mbakwe International Cargo

Airport, Owerri, at about 1400hours on Monday. “The fire was however curtailed swiftly by officers of the Aerodrome Rescue and Fire Fighting Services Department of FAAN. There was no casualty and normal operations have since resumed at the airport. “The Authority has commenced preliminary investigations into the cause of the incident,” Yakubu said, and assured that FAAN was committed to its core values of safety, security and comfort. The facility is the first stategovernment built airport but was later taken over by the Federal Government and handed over to FAAN to manage. www.businessday.ng

L-R: Bolaji Osime, board member, Ituah Ighodalo Foundation; Ituah Ighodalo, senior pastor, Trinity House, his wife Ibidun Ighodalo, and Yunus Abidemi Ibrahim, awardee, at the conferment of the best accountancy graduating student of the University of Lagos award by the Ituah Ighodalo Foundation to celebrate Ituah’s birthday, during the 2019 Trinity House Word and Power Conference ‘Theme The Set Time” in Lagos. Pic by Olawale Amoo.

Buhari seeks regulation for safe digital economy Tony Ailemen, Abuja

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resident Muhammadu Buhari has called on world leaders to come up with proposals to create a digital world that is accessible, inclusive and safe to all. President Buhari said this in his keynote address at the 2019 Annual Investment Meeting (AIM) in Dubai on Monday. Speaking on the theme: Mapping the Future of Foreign Direct Investment: Enriching World Economies through Digital Globalisation, the President said a certain level of regulation was needed to preserve the integrity of the digital economy. Acknowledging that digital globalisation is transforming the world almost every day with innovations and transformative ideas, the Nigerian leader cautioned that the cyber world would remain a constant threat

if left unregulated. He decried the use of the cyberspace to manipulate elections, subvert the democratic rights of citizens as well as propagate violence, lamenting the steady rise in fake news and cybercrimes, particularly when platforms were hijacked and manipulated by criminals. He, therefore, called for collective efforts led by both public and private sector leaders to address the emerging threats of digital globalisation. ‘‘Today, we have a cyberworld that is intangible but real. This borderless world is powerful, and it impacts the lives of billions of people, no matter how remote their physical locations are. ‘‘People work in it. People socialise in it. And people invest in it. This presents enormous opportunities. But it also remains a constant threat if left unregulated.

‘‘On the one hand, it has made the human race more productive and more efficient. Today, we have digital banking, virtual currencies and many social platforms that connect people and cultures. ‘‘On the other hand, we have seen platforms hijacked and manipulated as evidenced by the steady rise in fake news and cybercrimes. ‘‘More recently, we are also witnessing the use of the cyberspace to manipulate elections, subvert the democratic rights of citizens as well as propagate violence. ‘‘In effect, the digital world has become the new frontier for both good and evil. Therefore, the challenge for world leaders must be to ensure that this space is inclusive, accessible and safe,’’ the President told the ninth edition of AIM, attended by world leaders in both the public and private sectors.

He used the occasion to reflect on the digital revolution in Nigeria, buoyed by impressive statistics on mobile phone penetration, technology hubs and the advent of young entrepreneurs attracting investments of over $100 million to the country. “In Nigeria, our mobile phone penetration exceeds eighty per cent. This means the majority of Nigeria’s one hundred and ninety million citizens are fully connected to this new digital world, especially our youth. ‘‘Sixty-five percent or one hundred and seventeen million Nigerians are under the age of 25 years. These bright minds are the drivers of this emerging digital sector. ‘‘Today, Nigeria has close to ninety technology hubs and every day, new ones are coming up and they are all developing solutions for Nigerian, and indeed global problems.

East Africa outperforms African peers in AfDB’s regional economic outlook … poor transparency, political instability weaken W/Africa’s resource mobilisation ISRAEL ODUBOLA

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conomic growth in East Africa outperforms peers at close to 7 percent, the regional economic outlook reports of the African Development Bank (AfDB) show, putting growth in other region on a positive but cautious scale. The bank launched four of its five regional economic outlook reports this week in Abuja, Yaoundé, Nairobi and Pretoria, with forecasts for Central, West, East and Southern Africa. AfDB envisions that the East Africa, with an estimated growth of 5.9 percent in 2019 and 6.1 percent in 2020, will soon be an attractive destination for foreign

investment in the continent. The region is expected to expand on the back of improved services sector performance in Tanzania and Kenya, higher agricultural output and bettered consumption. Ethiopia is tipped to lead the region with a predicted 8.2 percent growth in 2019, ahead of Rwanda (7.8%), Tanzania (6.6%), Kenya (6%), Djibouti (5.9%) and Uganda (5.3%). West Africa’s 15 economies seem to be diverse across many dimensions of development, with per capita income spanning between $452 in Niger to $3,678 in Cabo Verde. The regional economy notched up to 3.3 percent in 2018 from 2.7

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percent in 2017, and predicted to hit 3.6 percent in 2019 and 2020. On why institutional mechanism in West Africa is weak, the outlook says, “Weak transparency and accountability and political instability and fragility have historically prevented West African countries from mobilising enough domestic resources to meet developmental needs.” The West Africa Regional Outlook charged governments within the region to devise creative means of expanding revenue through reforms that enhance tax collection, curb tax evasion and illicit monetary flows. The report for the Central @Businessdayng

Africa reveals that growth in the region is gradually picking up, buoyed by rebound in oil prices. The region expanded 1.1 percent in 2017 to 2.1 percent in 2018, and projected to grow by 3.6 percent and 3.5 percent in 2019 and 2020, respectively, if only the region can leverage macroeconomic reforms, natural resources and rising oil prices. Despite being among the least integrated in Africa and faced with myriad of challenges such as insecurity, poor business climate, poor infrastructures and weak diversification, the region still has potentials for reforms and vibrant linkages, the report notes.


BUSINESS DAY

Tuesday 09 April 2019

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NEWS PDP asks National Assembly to probe Buhari over N24trn debt profile OWEDE AGBAJILEKE, Abuja

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eople’s Democratic Party (PDP) has tasked the National Assembly to investigate President Muhammadu Buhari over alleged unwholesome borrowings leading to the escalation of the nation debt stock from N12.12 trillion in 2015 to N24.38 trillion in 2018. The main opposition party described as saddening and devastating the nation’s debt stock under the All Progressives Congress (APC)-led Federal Government. A statement on Monday by Kola Ologbondiyan, PDP National Publicity Secretary, also asked the Legislature to probe the terms of the borrowing and the handling of the funds in the present government. “The National Assembly should also save the future of our nation by restricting the Buhari administration from taking further loans on behalf of our country until explanations are provided on the terms and handling of the borrowed funds. “Nigerians cannot afford to continue to bear burden of an incompetent and insensitive administration and that is why they eagerly await the retrieval of our stolen mandate at the Presidential election petition tribunal. “Since President Buhari assumed office in 2015, there have been a culture of unexplained borrowings leading to a steep rise in the debt stock from N17.5 trillion in 2016 to N21.72 trillion

in 2017 and a huge N24.387 trillion in 2018. “It is shocking and completely insupportable that our nation’s debt had risen from N21.72 trillion in December 2017 to N24.387 trillion in December 2018, showing an accumulation of a whopping N2.66 trillion in a space of one year,” the statement reads. The Debt Management Office (DMO) had last week disclosed that Nigeria’s public debt had risen to N24 trillion as of December 2018. According to the party spokesperson, the borrowings and unbearable tax regimes by the present government have not only crippled productivity but also caused untold hardship and mortgaged the economic future of Nigerians. The party insisted that President Buhari’s administration lack the initiative to stimulate and run a productive economy. The statement added: “President Muhammadu Buhari-led administration therefore has a huge explanation to make to Nigerians for its borrowing spree, especially as it cannot point to any meaningful development project into which the borrowed funds were invested. “This is particularly against the backdrop of allegations in the public space that the borrowed funds, which were taken as development funds, were diverted to 2019 general elections campaign activities of the APC, a huge part of which ended in private pockets of corrupt APC leaders.

Pension reform: Edo presents N21.5m to families of deceased civil servants … showcases Edo’s exciting business opportunities at Dubai Investment Meeting

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o further demonstrate the state government’s commitment to driving pension reforms for the benefit of the state’s civil servants, Edo State acting governor, Philip Shaibu, has disbursed N21.5 million to eight families of deceased civil servants who are covered by the Group Life Insurance Policy and died while in active service. Presenting the cheques to the families, Shaibu said the event was the third time cheques would be presented to families of deceased civil servants. He noted that the state government had so far paid N28.7 million to families of deceased civil servants who were beneficiaries of the state contributory pension scheme. The acting governor expressed appreciation to Metropolitan Life Insurance Company for providing cover for all the employees enrolled under Edo

State Contributory Pension Scheme, adding, “This will be the third time Edo State Government will be giving out cheques to families of deceased civil servants since the state commenced the contributory pension scheme. “The first beneficiaries got their cheques on the 31st of July 2018; the second batch got theirs on the 30th of October 2018, while the third batch of cheques is presented today 8th of April 2019. The total we have disbursed so far is N28,700,450.64k. Today we are presenting N21,594,575.20k to eight families of deceased civil servants,” he noted. The State Head of Service (HoS), Isaac Ehiozuwa said the Contributory Pension Scheme provides that 300 per cent of the deceased’s salary be paid to his or her family, adding, “Today we have eight beneficiaries to receive cheques and this is the third time we are doing this.”

One of the beneficiaries, Peter Monday, expressed appreciation to the state government for doing the needful, noting, “We thank the state government for responding within six months after we lost our loved ones.” Meanwhile, pitching the state as an investor’s delight in Nigeria, Edo State governor, Godwin Obaseki has taken time off from his annual vacation to step up engagement with prospective investors for the array of blossoming industrial and enterprise parks in the state at the 9th edition of the Annual Investment Meeting holding from April 8 to 9, in Dubai, United Arab Emirates. The annual meeting in Dubai, according to its organisers, is “the largest gathering of corporate leaders, policymakers, businessmen, regional and international investors, entrepreneurs, leading academics and experts showcasing up-to-

date information, strategies and knowledge on attracting FDI.” Nigeria’s delegation to the meeting themed ‘Mapping the Future of Foreign Direct Investments (FDI): Enriching World Economies Through Digital Globalisation’ are President Muhammadu Buhari; Minister of State for Mines and Steel Development, Abubakar Bawa Bwari; executive secretary/ CEO, Nigerian Investment Promotion Commission (NIPC), Yewande Sadiku and Group Chief Executive, Oando plc, Nigeria, Wale Tinubu, among others. Governor Obaseki, at the meeting, engaged with investors on prospects of investing in the Benin Industrial and Enterprise Park; Benin River Port; Benin Auto Park; technology hubs and parks; housing estates and other projects to drive industrialisation and sustainable development in the state.

Fashola orders suspension of work on National Housing Project

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inister of Power, Works and Housing, Babatunde Fa s h o l a, ha s ordered the immediate suspension of work at the Abuja National Housing project in Gwagwalada, FCT. Fashola gave the order during the inspection of the ongoing Abuja Mass Housing project in Gwagwalada, on Monday. The News Agency of Nigeria reports that the Federal Capital Development Authority (FCDA) had written ‘Stop Work Inscriptions’ on buildings at the construction site. He said the suspension became necessary in order to settle any development control issues with the ministry and FCDA through due process. “As you can see, there are Development Control inscriptions on the buildings and it means there are development issues by the FCDA. My staff tell me that the issue has been resolved, but I also respect the law that says every development control restriction inscriptions must be complied with. “‘So, I am not going into that building; and I have ordered

the head of unit here to stop work immediately until these inscriptions are removed and I see documents to that effect. “This is one of the many ways that we can begin to take our laws seriously because this is a government development project and we need to respect the laws we make,’’ Fashola said. The minister said the construction of the mass housing project was ongoing in 33 states across the country where lands had been made available. He stated that aside from artisans involved in the project, contractors were engaged in the pilot scheme to deliver quality work. “The last time I was here, I was satisfied with the quality of work and I saw carpenters that were seriously engaged in the construction work. “That is what the Federal Government wants to achieve; to use housing schemes to stimulate employment in the country. “The Federal Mortgage site is a different concept entirely, they do not only lend money, but help you to build for people who want to pay rent,’’ he said. www.businessday.ng

L-R: Afolasade Alonge, divisional head, corporate and specialised banking, Heritage Bank Plc; Kikanwa Akpenyi, group head, customer experience and analytics; Soline Niyirahabimana, minister of gender and family promotion; Mother Dan-Egwu, group head, Experience Centre Coordination, and Uche Juliet Ajirison, Port Harcourt coordinator of African Women in Leadership Conference (AWLO), during the African Women in Leadership Organisation Conference held in Kigali, Rwanda, yesterday.

NERC’s mass metering via MAP to close metering gap by 25% HARRISON EDEH, Abuja

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he Nigerian Electricity Regulatory Commission’s (NERC) commencement of mass metering of electricity consumers beginning May 1 through the Meter Asset Provider (MAP) initiative is expected‎ to close metering gap by 25 percent, industry analyst says. Chuks Nwani, energy lawyer and power sector analyst, says the NERC has taken a bold initiative but the government needs to do more on metering consumers, re-set the tariff to enhance efficiency in the power sector value chain. According to Nwani, “The

government could source for a cheaper fund through the bond market and close the metering gap, while re-setting the tariff and ensuring consumers pay for the meter at a subsidised cost. Government can get cheaper funds than the private sector to support metering initiative thereby addressing liquidity concerns in the sector.” Notably, the NERC will begin mass metering for electricity consumers by May 1, to bridge the metering gaps in the country. Usman Arabi, NERC general manager, public affairs, in a statement says the metering will be executed under the

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MAP programme of the Federal Government. “The commission issued permits to MAPs on April 5, in accordance with Section 4(3) of the MAP Regulations 2018, to MAPs that were successful in the procurements. “The procurement was conducted by Abuja Electricity Distribution Company plc (AEDC) and Jos Electricity Distribution Company plc (JEDC). “Section 4(3) of the MAP Regulation 2018 requires all electricity distribution licensees to engage MAPs that would assist, as investors, in closing the metering gap. “AEDC has appointed Mojec @Businessdayng

International Limited, Meron Consortium and Turbo Engineering Limited to provide 487,000, 213,000 and 200,000 meters, while JEDC has appointed Triple 7 and Mojec International Limited consortium to provide 500,000 meters,” Arabi said. According to Arabi, customers of AEDC and JEDC should expect meters to be installed in their premises within 10 working days of making payment to MAPs. He said the payment and installation of the meters within the time frame were in accordance with Section 18 (3) of the MAP Regulations 2018.


40

Tuesday 09 April 2019

BUSINESS DAY

Live @ The Exchanges Market Statistics as at Monday 08 April 2019

Top Gainers/Losers as at Monday 08 April 2019 LOSERS

GAINERS Opening

Closing

Change

Company

Opening

Closing

Change

N170

N171

1

DANGCEM

N189

N185.5

-3.5

ETERNA

N4

N4.25

0.25

STANBIC

N46.25

N43.2

-3.05

LEARNAFRCA

N1.23

N1.34

0.11

GUINNESS

N62.45

N60

-2.45

GUARANTY

N35

N34

-1

CAVERTON

N2.52

N2.6

0.08

UBN

N7

N6.5

-0.5

NEIMETH

N0.51

N0.56

0.05

Company MOBIL

ASI (Points) DEALS (Numbers) VOLUME (Numbers) VALUE (N billion) MARKET CAP (N Trn)

29,162.24 3,993.00 455,875,448.00 5.257

…investors lose N171bn as NSE kicks off week in red

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he spate at which investors are sellingoff their stocks on the Nigerian Stock Exchange (NSE) should be a source of concern. The market-wide sell-offs seen lately follow the recently concluded general elections and almost concluded corporate earnings season. The persisting negatives have now created murky outlook for the direction of the market. The equity market kicked off this week in the red as the All Share Index (ASI) continued to trade below the 30,000 mark. It declined by 1.53percent and stood at 29,162.24 points at the close of trading on Monday April 8; as against preceding week high of 29,616.38 points. In a session characterized by sell-offs across the board, the value of listed equities decreased from N11.124 trillion to N10.953trillion, representing a loss of about N171billion. The year-to-date (ytd) returns stood further negative at -7.22percent. Stock traders in 3,993 deals, exchanged 455,875,448 units valued

at N5.257billion. Sterling Bank Plc, GTBank Plc, Tripple Gee & Co Plc, Zenith Bank and Access Bank Plc were actively traded stocks. Zenith Bank Plc announced the appointment of Ebenezer Onyeagwu as Group Managing Director/Chief Executive of the Company with effect from June 1, 2019 subject to the approval of the Central Bank of Nigeria (CBN). Onyeagwu replaces Peter Amangbo, whose tenure expires on May 31, 2019. Also, Fidelity Bank Plc announced the appoint-

ments of Gbolahan Joshua, Obaro Odeghe and Hassan Imam as Executive Directors. Their appointments by the Board of Directors of the bank at the meeting held on Tuesday March 19, 2019 is subject to the approval of the Central Bank of Nigeria. Thirteen (13) stocks gained as against 29 losers. Dangote Cement Plc led the basket of losers after its price declined from N189 to N185.5, losing N3.5 or 1.85percent. Stanbic IBTC Holdings Plc followed after declining from N46.25 to N43.2, down by N3.05

or 6.59percent. Guinness Nigeria Plc followed after its share price dropped from N62.45 to N60 , losing N2.45 or 3.92percent. Also, GTBank Plc declined from N35 to N34, losing N1 or 2.86percent; while Union Bank of Nigeria Plc was also down from N7 to N6.5, after losing 50kobo or 7.14percent. Meanwhile, Mobil Oil Nigeria Plc advanced from N170 to N171, adding N1 or 0.59percent; while Eterna Plc followed from N4 to N4.25, adding 25kobo or 6.25percent. In their April 8 note on what shapes the market today, Vetiva analysts said: “As market-wide sell-offs persist, with no significant catalyst to the rescue, market will likely trade the same in the same pattern we have seen in previous session.” “We are also not ruling out bargain hunters coming into the market as we continue to see valuations get better on decent counters. It is noteworthy to say that the All Share Index (ASI) has not spent an extended period (more than two sessions) below the 30,000 level since 2017, however we may see a longer stay below this mark in the coming sessions”, Vetiva analysts added.

NSE lifts suspension on shares of Afromedia

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he Nigerian Stock Exchange (NSE) has notified the dealing members of the lifting of suspension placed on the trading in the shares of Afromedia Plc. The Exchange referred to its Market Bulletin dated April 9, 2018 wherein it notified Dealing Members of the suspension of Afromedia Plc for non-compliance with Rule 3.1, Rules for Filing of Accounts and Treat-

ment of Default Filing, Rulebook of The Exchange (Issuers’ Rules) (Default Filing Rules”), which provides that: “If an Issuer fails to file the relevant accounts by the expiration of the Cure Period, The Exchange will: (a) send to the Issuer a “Second Filing Deficiency Notification” within two (2) business days after the end of the Cure Period; (b) suspend trading in the Issuer’s securities; and (c) notify the www.businessday.ng

Securities and Exchange Commission (SEC) and the Market within twenty- four (24) hours of the suspension.” “Afromedia Plc has now filed its outstanding Financial Statements to The Exchange. In view of the submission of the Company’s outstanding financial statements and pursuant to Rule 3.3 of the Default Filing Rules, which provides that the suspension of trading in

the Issuer’s securities shall be lifted upon submission of the relevant accounts provided The Exchange is satisfied that the accounts comply with all applicable rules of The Exchange. The Exchange shall thereafter also announce through the medium by which the public and the SEC was initially notified of the suspension”, the NSE said in a notice signed by Elizabeth Ekpo for Head, Listings Regulation Department.

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FTSE 100 Index 7,451.89GBP +5.02+0.07% S&P 500 Index 2,886.29USD -6.45-0.22% Generic 1st ‘DM’ Future 26,292.00USD

10.953

Market-wide sell off persists on Nigerian Bourse Stories by Iheanyi Nwachukwu

Global market indicators Deutsche Boerse AG German Stock Index DAX 11,963.40EUR -46.35-0.39% Nikkei 225 21,761.65JPY -45.85-0.21% Shanghai Stock Exchange Composite Index 3,244.81CNY -1.76-0.05%

SEC urges youths to invest in capital market

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he Securities and Exchange Commission (SEC) has encouraged Nigerian youths to invest in the capital market instead of indulging in wagering of money . Acting Director General of SEC, Mary Uduk who stated this, said there are various products and funds available in the Market that would appeal to the youth populace in Nigeria. Uduk therefore encouraged them to take advantages of these opportunities and invest wisely. According to her “We have mutual funds and it covers every asset in the capital market. Whether it is money market, insurance, capital market, real estate, infrastructure among others. The youths can invest in

The Acting DG disclosed that the Commission has commenced investor education and enlightenment for Nigerians to understand the benefits of these funds which gives more interest that saving money in bank accounts. She also urged those already invested in the market to register to claim their dividends electronically as a means of reducing the unclaimed dividends profile. “For every account that is mandated all accrued dividends is automatically paid. Then there is the use of regularization of multiple accounts. We discovered that while dividend is growing and it is increasing unclaimed dividends, the pace is not as

these, rather than leave your money in savings account you can invest in mutual funds. It runs like savings account and after three months you can withdraw your money same way as you do with the banks. “You don’t have to go and gamble, there are so many products in the capital market that they can invest in rather than going to gamble and losing their money. We have various products that are very attractive where they can invest their money.

satisfactory as when we observe that multiple accounts which have not been claimed for many years are still being paid dividends. “Those people that have multiple accounts can only lay claim on dividends in one account, all the others will keep warehousing dividends as long as they are not regularized. “We therefore urge all those with multiple accounts to regularise such accounts so that they can also claim their dividends”

@Businessdayng


Tuesday 09 April 2019

FT

BUSINESS DAY

41

FINANCIAL TIMES

World Business Newspaper

Warren Buffett urges Wells Fargo to look beyond Wall St for next chief Top shareholder in US bank says new leader should not come from JPMorgan or Goldman ROBERT ARMSTRONG, ERIC PLATT AND OLIVER RALPH

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arren Buffett, the largest shareholder in Wells Fargo, has called on the US bank to look outside Wall Street for a new chief executive who can restore its battered reputation. “They just have to come from someplace [outside Wells] and they shouldn’t come from Wall Street,” Mr Buffett said of the bank’s next leader in an interview with the Financial Times. “They probably shouldn’t come from JPMorgan or Goldman Sachs.” Wells Fargo’s former chief executive, Tim Sloan, stepped down last month after coming under pressure from both Congress and regulators. He has been replaced by Wells’s general counsel Allen Parker on an interim basis. The bank has struggled to recover from a fake accounts scandal, in which branch employees, hoping to hit incentives targets, illicitly opened millions of accounts for customers without their consent. The wrongdoing first emerged in 2016 under the previous chief executive, John Stumpf. But the decision to replace Mr Stumpf that year with Mr Sloan, a 25-year veteran of the bank, antagonised some politicians. Mr Buffett, who has held shares in

Wells since 1989, now prefers the new leader to be an outsider and one who has not worked in investment banking, saying this would be like a red rag to a bull in Washington. “There are plenty of good people to run it [from the Wall Street banks], but they are automatically going to draw the ire of a significant percentage of the Senate and the US House of Representatives, and that’s just not smart,” said Mr Buffett. Excluding Wall Street bankers would eliminate many of the potential candidates floated by analysts and investors to run the fourth-largest US bank by assets. On that list are former Goldman executives Gary Cohn and Harvey Schwartz, former JPMorgan banker Matt Zames and current JPMorgan chief financial officer Marianne Lake. One potential candidate from outside Wall Street whose name has been raised by analysts is Bill Demchak, a former JPMorgan executive who is now chief executive of PNC Financial, a Pittsburgh-based bank. Mr Buffett owns almost 10 per cent of Wells’s shares, worth about $22bn. He believes that the bank’s competitive position remains strong, despite the damage done by the fake accounts scandal that broke over two years ago. “If you look at Wells, through this whole thing they’re uncovering a whole lot of problems, but they aren’t

Turkish president appears to back demands for full recount of city’s mayoral election

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urkish president Recep Tayyip Erdogan on Monday raised the stakes in an escalating dispute over Istanbul’s mayoral election, describing the poll as riddled with irregularities. Mr Erdogan had previously appeared sanguine about the apparent loss of Turkey’s biggest city after local elections, telling supporters that the opposition candidate would be a “lame duck” due to the ruling party’s continued majority in the municipal council. But speaking after his Justice and Development party (AKP) applied for a full recount in Istanbul, he said on Monday that there was evidence of “organised crimes” during the vote. “There were not some irregularities,” he said, according to a report of his remarks by the state-run Anadolu news agency. “Almost all of it was irregular.” The president’s comments came after his party said that it would apply to the high election board for a recount of all votes in Istanbul after initial results showed that Ekrem Imamoglu, an opposition unity candidate, last week emerged as the surprise winner by a narrow margin. Istanbul has been controlled by Mr Erdogan’s AKP and its political forebears for the past 25 years. Losing the metropolis, which is Turkey’s cultural and economic powerhouse, would compound the pain of elections that also saw the AKP suffer defeat in Ankara,

the nation’s capital. Following the Istanbul result, the AKP has pushed for a series of partial recounts in the city of 16m people. As the process has neared completion, the already slim gap between the two candidates has narrowed. But Mr Imamoglu on Sunday remained in the lead by just under 16,000 votes, according to the opposition People’s Republican party (CHP). Mr Imamoglu has continued to insist that he won the contest, and has urged the governing party to accept defeat. Addressing the ruling party on Sunday, he said: “Enough is enough. Don’t do this.” But Mr Erdogan on Monday rejected his pleas. “With a difference of 13,000 to 14,000 votes, no one has the right or the authority to say: I won,” he said, speaking to reporters before departing for Moscow to meet Russian president Vladimir Putin. The Turkish leader even alluded to the possibility of a full rerun of the entire Istanbul election. He claimed that, in the US, elections were rerun if there was a “problematic” vote gap between rival candidates. The decision over whether to accept the demand for a full recount will be a critical test for Turkey’s election board (YSK). The AKP insists that the body is independent. After the ruling party initially claimed victory in the Istanbul contest, the YSK came out in support of Mr Imamoglu, confirming that its count put him in the lead. www.businessday.ng

losing any customers to speak of,” he said. “They are losing the ones in the public sector . . . but one household out of every three does business with Wells one way or another.” The bank still holds more than $900bn in customer deposits. Only hours before Mr Sloan announced his intention to depart, Mr

Buffett had given the former chief executive his support in an interview with CNBC television. Betsy Duke, the bank’s chair, has said the board is only considering external candidates. On the same day last month that Mr Sloan received a grilling before the House financial services committee, regulators at the Office of the

Comptroller of the Currency issued a highly unusual statement saying it was “disappointed” in the bank’s efforts to reform its governance. Two senior Democrats — Maxine Waters, chair of the House financial services committee, and presidential candidate Elizabeth Warren — had both called for Mr Sloan’s departure.

Emmanuel Macron ponders his de Gaulle moment with Brexit

Erdogan says ‘almost all’ of Istanbul vote was irregular LAURA PITEL

Warren Buffet prefers the new leader of Wells Fargo to be an outsider and one who has not worked in investment banking © Reuters

Fears grow that French president will say ‘Non’ and bundle UK out of the EU door ALEX BARKER AND VICTOR MALLET

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think this man has gone crazy — absolutely crazy,” the British prime minister said of the French president. “He is inventing any means whatever to knock us out and the simple thing is he wants to be the cock on a small dunghill instead of having two cocks on a larger one.” The year was 1963 and Harold Macmillan was venting his frustrations on a call to the White House. Within weeks Gen Charles de Gaulle of France had vetoed Britain’s bid to join the European Economic Community — the first of the two occasions on which he said “Non” to the British — blindsiding his five fellow leaders in the club. Half a century later, Britain is seeking to leave the EU at a time of its choosing, and once again finds its European destiny beholden to the calculations of a charismatic French leader — a president who sees de Gaulle as his role model. De Gaulle said No to the UK’s entry. Will French president Emmanuel Macron have a de Gaulle moment, say No to the UK leaving when it wants, and bundle the British out of the door? Mr Macron has certainly taken the hardest line in public against a long delay to a UK exit date, first scheduled for March 29, postponed to April 12, and which UK prime minister Theresa May

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now wants to delay until June 30. Even in private he has told other EU leaders that it may be best to get Brexit over with rather than let Westminster hold the other 27 member states hostage. But senior officials and diplomats in Paris, Brussels and other European capitals doubt that Mr Macron will stand alone against more emollient EU leaders in countries such as Germany, Poland and Ireland and be the one to finally pull the plug on the British. Mr Macron’s overtly hard line is seen partly as a traditional piece of Gaullist grandstanding in the centuries-old tradition of AngloFrench rivalry. “It is part of the job description for every French president to humiliate the Brits,” said one senior EU official. Nor are the French afraid to take the lead in such negotiations. “We are a little bit British in this — we are not afraid to be alone,” said one senior French official. Yet the French stand is also seen as good diplomacy and good politics, because Mr Macron wants to put pressure on the British so that Mrs May does not come yet again to Brussels without a plausible plan to justify an extension — whether it be a Brexit plan that wins the support of the House of Commons, or an agreement for a second referendum. “Our nightmare is if she comes with nothing in her pocket,” said the French official. An outright rejection of the UK @Businessdayng

request would also badly damage EU unity, which has been carefully nurtured through the Brexit process. Mr Macron would need to publicly overrule the Irish taoiseach Leo Varadkar, who wants more time to avoid the inevitable economic and political disruption from a no-deal exit, including threats to peace in Northern Ireland. Mr Macron met Mr Varadkar at the Elysée palace last week and said he would “never abandon Ireland or the Irish people, no matter what”. With his “Jupiterian” view of the French presidency and his championing of the EU, Mr Macron has cast himself as a worthy successor to the man who so appalled Macmillan — “a sort of modern-day de Gaulle, who will rescue Europe from its demons, and conjure hope from crisis”, in the words of his biographer Sophie Pedder. Mr Macron likes to quote de Gaulle, and as soon as he took office in 2017 he chose to place a copy of the general’s memoirs in the background for his official photographic portrait. “It is a very political. He will be tempted,” said one person who has spoken to Mr Macron about the Brexit extension request. “We cannot exclude that the political context leads him to veto. If the UK cannot provide justification for a long extension, then it is a political question for the French president.”


42

Tuesday 09 April 2019

BUSINESS DAY

FT

NATIONAL NEWS

Fintech start-up Branch raises funding for EM lending push New alliance with Visa helps loan provider pursue new markets TIM BRADSHAW

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ranch International, a Silicon Valley-based start-up that offers loans to first-time borrowers and customers without bank accounts in Africa, India and Mexico, has raised $170m in new financing. The deal, which is made up of a combination of equity and debt, forms part of a new alliance with payments group Visa. “It’s tough to convince VCs in Silicon Valley to invest in something for Africa, and it’s tough to get lenders to lend due to the risk,” said Matthew Flannery, Branch founder. Branch is vying with its California-based rival Tala to become the first provider of financial services to the emerging middle class in developing markets, who are underserved by traditional banks. This latest round brings Branch’s total financing to $260m, comprised of $100m in equity and $160m in debt. The company started operating in Kenya in 2015, led by Mr Flannery, who had previously co-founded Kiva, the microfinance non-profit platform. Branch collects data from potential borrowers’ Android smartphones, including the contents of their text messages, address books and other apps they have installed, to assess their likely creditworthiness. Interest rates can range between annual rates of 12-180 per cent, with rates highest for first-time borrowers then falling as customers repay more loans. “To use a few buzzwords, we literally are using deep learning to do the underwriting,” Mr Flannery

said, referring to one form of artificial intelligence that also analyses how borrowers use the Branch app and contact networks. “If people are careful using the app, if they look at the financial screens, the repayment plans, the terms and conditions, then they almost never default.” Branch expects to lend about $350m this year, usually in small loans of $20-$40, which are primarily financed by its own borrowings. The new venture round, which was led by Foundation Capital and Visa with participation from existing investors such as Andreessen Horowitz and Formation 8, will be used to develop new markets after recently expanding from Africa into India and Mexico. “We want to set an example that this is a good market,” said Mr Flannery. “You can invest in low-income people in India.” Branch is expanding in the wake of infrastructure such as smartphone penetration, low-cost mobile payments systems like M-pesa, and government biometric databases. Its new partnership with Visa will offer “virtual” prepaid debit cards to 2m people that allow Branch customers to withdraw their loans using a cash machine, even if they do not have a bank account. “By focusing on digitising payments, we aim to build a more digitally inclusive ecosystem,” said Otto Williams, Visa’s vice-president of strategic partnerships, fintech and ventures. Charles Moldow, a general partner at Foundation Capital who is joining Branch’s board, said the company was “poised to become the cross-border financial super-app”.

China sounds alarm over bad-loan surge at small banks Fresh questions over bailouts and failures as bad-debt rate tops 40% at some lenders banks,” said Richard Xu, a China DON WEINLAND AND financial sector analyst at Morgan SHERRY FEI JU Stanley. “We’ve been highlighting hina’s central auditing author- this as something policymakers ity has sounded the alarm on should be watching.” Financial authorities have dea surge of bad debt at small banks around the country, raising vised a number of methods for paring the question of whether Beijing will bad debt levels. Last year the volume continue to bail out struggling lend- of bad loans reaching the market for ers or eventually allow some to go distressed debt hit a two-decade high of Rmb1.75tn ($258bn) as regulators bankrupt. The National Audit Office said promote the transfer of NPLs from that some banks in Henan province banks to private investors. Ultra-high rates of bad debt above in central China had recorded 40 per cent of their loan books as bad debt 40 per cent have prompted questions by the end of 2018, the first official over whether some banks could be disclosure in decades of such high allowed to fail. In recent years, banks in dire straits have been consolidated rates of toxic assets. The province was home to 42 with others and recapitalised but banks with non-performing loan none has been allowed to go under rates that had “crossed the warning since the collapse of Hainan Develline” of 5 per cent, 12 banks with rates opment Bank in 1998. In response to the central audiabove 20 per cent, and “a few” with NPLs exceeding 40 per cent, accord- tor’s report, an op-ed on Saturday in the influential Chinese newspaing to the audit authority’s report. Solving China’s bad debt problem per The Economic Observer called is a top priority for Beijing, which for permitting small banks to exit views it as a core component to main- the market if warranted by market taining financial and social stability principles. The government’s tolerance for in the country. Many large banks have brought allowing state-owned companies to NPLs under control, but city com- default on bonds has increased over mercial banks and rural financial the past year, as shown by a number institutions, which make up more of missed payments. One such comthan 26 per cent of China’s total pany failed to repay a US dollar bond banking assets, have continued to in Hong Kong in February, the first record higher rates of soured loans offshore default in 20 years and a sign that the government was not rushing as economic growth cools. “The key risk right now is regional to rescue state groups.

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Larry Fink says China wants greater participation of global companies in its domestic asset management market

Larry Fink says BlackRock aims to control a Chinese asset manager

World’s largest investment group ‘very engaged’ with local regulators PETER SMITH

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arry Fink says BlackRock is “very engaged” with Chinese regulators as the world’s largest asset manager attempts to take control of a local investment group. The BlackRock chief executive said in his annual letter to shareholders that his ambitions in China — forecast to be the world’s second largest investment market behind the US in less than two years — had not been dented by the US-China trade war. “If anything the Chinese are looking for greater participation of global firms in their asset management space because they also have a growing retirement crisis,” he said. “We hope to have a majority-controlled asset management [business] in China and we are very engaged with the Chinese regulators.” In the annual letter, published on Monday, Mr Fink said BlackRock aimed to be one of China’s top asset managers as the Asia region, driven by China, comes to account for an ever growing share of global assets. Beijing said in late 2017 that international asset managers would soon be able to own up to 51 per cent

of a domestic fund management company, and 100 per cent in three years. However. none of the large foreign asset managers operating in the country, including JPMorgan Asset Management which has a stake in China International Fund Management, have applied to the China Securities Regulatory Commission for permission to move to 51 per cent. BlackRock has held talks with CICC Fund Management, a wholly owned subsidiary of state-backed investment bank China International Capital Corps, about buying a majority stake in the investment unit, according to people close to the situation. The CICC unit is the first mutual fund management company established by a single shareholder under China Securities Regulatory Commission rules. BlackRock has also held talks with a handful of other Chinese groups, according to a person close to the New York-listed group, which declined to comment on its interest in CICC Fund Management. BlackRock already owns 16.5 per cent of Bank of China Investment Management, part of Bank of China. However, it is regarded as a legacy holding after being inherited when

it bought Merrill Lynch Investment Managers in 2006. Lifting its holding to 51 per cent is seen as unlikely. Peter Alexander, managing director of Z-Ben, a consultancy that advises foreign asset managers in China, said the CICC unit was unusual in China as most local fund management companies had four or five shareholders. “Global asset managers should be planning for a scenario whereby 100 per cent retail mutual fund licences in China are granted more quickly than currently expected,” Mr Alexander said. BlackRock’s Chinese expansion is led by Geraldine Buckingham, the former global head of corporate strategy who recently took over from Ryan Stork as Hong Kong-based head of Asia-Pacific. It already has a large team in China with about 40 staff. BlackRock has a “private fund management” registration that allows it to make and distribute investment products to qualified Chinese investors, and last year launched a quantitative fund investing in Chinese equities. The Asia-Pacific region accounted for $430bn of BlackRock’s $6tn of assets under management at the end of 2018 and $678m of its $14.2bn of 2018 revenues.

Hedge fund Renaissance pulls back on hunt for market trends Once highly successful strategy of latching on to patterns in futures has faltered LAURENCE FLETCHER

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enaissance Technologies, one of the world’s most influential and secretive hedge fund firms, has sharply cut back its use of strategies that bet on patterns in futures markets, a big sign of such strategies’ waning popularity. US-based Renaissance, founded by former cold war codebreaker Jim Simons and with about $60bn in assets, reduced its use of such strategies in its Renaissance Institutional Diversified Alpha (RIDA) fund by two-thirds near the end of last year, say people familiar with the matter. The news has not previously been reported. The move comes after a long period in which hedge funds’ timehonoured strategy of following market trends has struggled to replicate past returns in markets dominated by central bank stimulus. Such funds, pioneered by the

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likes of billionaire John Henry and the founders of Man Group’s AHL fund — David Harding, Martin Lueck and Michael Adam — use complex computer models built by teams of PhD scientists to try to latch on to trends and other patterns in futures markets. Such funds made double-digit gains in the market meltdown of 2008, profiting from falling equity and oil prices, while most other investors suffered large losses. Those gains helped engender a belief that trend followers could help protect investors during periods of market turbulence, helping such funds attract tens of billions of assets in the wake of the credit crisis. But despite strong returns in 2014, many have otherwise delivered largely lacklustre returns, sparking concerns over overcrowding in the sector. The drab performance has prompted some managers, notably London-based Winton Capital, to @Businessdayng

cut back or alter their use of trendfollowing models. Renaissance’s RIDA fund trades stocks around the world, balancing out bets on rising and falling prices, and also seeks to capitalise on trends and other patterns in futures markets, which provide the means to lock in financial-market prices for future dates. As a result of Renaissance’s decision, only a very small portion of RIDA’s assets are now invested in such futures strategies. Instead, Renaissance will trade more in Japanese and Hong Kong stocks. Renaissance’s decision is based on the performance of the futures strategy, two of the people familiar with the matter said. RIDA gained 3.23 per cent in returns last year, a bright performance compared with an average 4.75 per cent loss among hedge funds overall, according to data group HFR, and amid falling stock markets. This year the fund is up 1.35 per cent.


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COMPANIES & MARKETS

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Fed unveils plan to lower foreign bank requirements Vice-chair Quarles says proposal aims to ensure ‘strong resiliency’ of financial sector KIRAN STACEY AND SAM FLEMING

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ome of the world’s largest banks will no longer have to hold as much capital in the US under plans by the Federal Reserve to regulate foreign banks according to the size and complexity of their US businesses. The US central bank on Monday unveiled proposals that it said would reduce some foreign banks’ capital requirements and the costs of complying with rules such as drawing up so-called “living wills”. And while the Fed plans to introduce tougher liquidity rules for many of these companies, it has been criticised by one of its own governors for shying away from the question of whether local branches should be included in those standards. Randal Quarles, the Fed’s vice-

chair for bank supervision, said in a statement: “The proposals seek to increase the efficiency of the firms without compromising the strong resiliency of the financial sector.” But the plans were criticised in a statement by Mr Quarles’ fellow board member Lael Brainard. Ms Brainard called for the Fed to make sure assets held by bank branches across the US were also included in any new liquidity rules, warning that not doing so could encourage them to move assets away from the main holding company and into their local networks. The Fed said on Monday it would consider such a move, but did not make a recommendation either way. Ms Brainard said: “I am disappointed the proposal today does not address this important outstanding vulnerability and therefore does not represent a balanced package.”

City of London alarmed at EU’s no-deal Brexit equity trading plan

Watchdogs list 6,200 securities that EU banks and investors must trade in the bloc PHILIP STAFFORD

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und managers holding European equities are praying that a no-deal Brexit is avoided this week. Europe operates the world’s most integrated cross-border share trading marketplace but the UK’s possible sudden departure from the EU would cleave this network into two: EU and non-EU markets. Today, an asset manager in Paris can ask a London bank to buy a Spanish stock in Madrid. It may sell the same stock hours later in the UK or in Dublin. London’s investment banks and asset managers make the City the system’s nexus and it handles most of the €2.2tna-month market. In the event of a no-deal Brexit, EU watchdogs produced a list of 6,200 “most liquid” securities that EU banks and investors must trade in the bloc, and included 14 of the UK’s biggest stocks, such as BP, Royal Dutch Shell and AstraZeneca. EU investors could not use the London Stock Exchange, for example. Senior City executives describe it as a “nakedly political” grab for London’s business. UK regulators are likely to have to follow suit with their own list, which will contain more European names because of London’s dominance. If so, CBOE Europe, the region’s largest cross-border exchange, will relist EU shares in London later this year, it said on Friday. Fund managers on both sides of the Channel are alarmed. Also on

Friday, Efama, a trade lobby group, warned the European Commission a split would cost on average €165m per EU27 fund every year. Underlining the City’s heft, Efama also estimated the average fund manager would take at least 240 days to unload a holding of AstraZeneca shares in the EU, compared to a maximum 37 in London. But these statistics do not even touch on the biggest problem — the daily closing auction. Portfolios worth billions of euros are benchmarked to the final prices set in auction on national exchanges. It accounts for nearly a fifth of daily business. Without cross-border access, asset managers would be shut out and the UK more affected. None of the solutions to preventing a huge drop off in liquidity are clean or clear. Fund managers could set up a subsidiary in the right jurisdiction but it is legally complex and time-consuming. They could turn to banks and highfrequency traders to take on the risk for settling their trades against closing prices. Indeed, some are exploring the option, but the rules may not permit it. Brussels is trying to clamp down on off-market activity, not ramp it up. A deal between the UK and EU this week would likely keep European share trading in London, so regulators will need to find a longerterm solution that will satisfy them. To avoid chaos next week regulators could call a truce and temporarily agree not to implement the rules. Without it, investors may pay the price. www.businessday.ng

Saudi Aramco opens up debut bond sale to investor orders Oil company sets initial pricing levels in line with Saudi government bonds ROBERT SMITH

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audi Aramco has begun taking orders for its debut international bond sale, with the world’s largest oil producer marketing the US dollar deal in line with where Saudi government debt trades. The Saudi oil company began marketing the deal to investors last week, in a series of meetings across Europe, Asia and the US. Its decision to tap international capital markets for the first time has seen it open up its financial information from a shroud of secrecy, revealing it to be the most profitable company in the world. Bankers managing the debt opened up the deal to investor orders on Monday afternoon in London, with Aramco looking to sell six bonds

ranging from three to 30 years. Initial pricing levels across these tranches range from 75 basis points over US Treasuries, or 2.375 per cent yield, on the three-year to 175 bps over Treasuries, or 3.375 per cent yield, on the 30-year. These pricing levels are in line with where Saudi government bonds trade, according to a banker on the deal. As borrowers typically look to drive in pricing levels over the course of a bond sale, it suggests that Aramco is ultimately targeting a cheaper borrowing cost than the Saudi government. Aramco is aiming to wrap-up the debt sale on Tuesday. The bond includes a clause allowing investors to ask for their money back if the Saudi government ever jettisons control of the group. The highly anticipated debt sale has already attracted around $30bn

of preliminary indications of interest from investors, who have been lured in by the disclosure of hefty profits for the oil company, backed by a high, “single-A” credit rating. Aramco has told investors that credit rating agency Moody’s would have given it a top-notch triple-A credit rating, if not for its close links to the Saudi state. The bond sale is intimately tied to Saudi Crown Prince Mohammed bin Salman’s vision to open up the desert kingdom’s economy to the wider world, with his grander plan of listing a stake in Aramco on stock markets having faltered. Saudi Aramco’s treasurer has told investors that the company does not need to raise the funding, because of its “fortress-like corporate position”, and is focused solely on opening up the historically secretive group to public investors for the first time.

Stocks shy of highs as earnings season looms MICHAEL HUNTER AND ALICE WOODHOUSE

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tocks slipped back from multi-month highs on Monday, with investors looking for a new catalyst for further gains with the start of US earnings season due later this week. Brent crude oil touched a new peak for 2019. up 0.6 per cent at $70.72. The prospect of tighter supply amid worsening conflict in Libya added to expectations for

continued Opec supply cuts, as well as hopes for stronger demand in line with any breakthrough in trade relations between the US and China. Equities looked reluctant to make further progress without clear signs of progress in talks between the world’s two biggest economies. Wall Street’s S&P 500 slipped 0.2 per cent in initial trade. The Europe-wide Stoxx 600 slipped 0.1 per cent, while Frank-

furt’s Xetra Dax 30 edged 0.3 per cent low after weaker-than-forecast export data. London’s FTSE 100 ticked up 0.1 per cent. Mainland China’s CSI 300 reached a new year-high before falling back by 0.1 per cent overall for the session. The pattern came amid concern about an increase in bad loans at small banks in the country Hong Kong’s Hang Seng was flat overall, having touched a near 10-month high earlier.

Holland & Barrett consistently pays suppliers late, watchdog says Healthfod chain ‘doesn’t care about its suppliers or take prompt payment seriously’ ANDY BOUNDS

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ealth food chain Holland & Barrett consistently delays paying its suppliers, a government commissioner said in his first naming and shaming of a big company over a major complaint of smaller businesses. Paul Uppal, who was appointed the first small business commissioner in December 2017, said the retailer “doesn’t care about its suppliers or take prompt payment seriously” after investigating a complaint and analysing the chain’s invoice data. A London-based technology consultancy lodged a complaint with the commissioner after a £15,000 invoice

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for search-engine optimisation was not paid within the agreed 30 days. Mr Uppal contacted Holland & Barrett, which then paid in full 28 days later, 67 days after the invoice was submitted. Mr Uppal said the company refused to meet him to discuss its payment practices and on Monday published his report about the complaint. He said that analysis of Holland & Barrett’s payment practice reporting data, which most businesses are required to submit to the government, showed that the company took an average of 68 days to pay invoices and 60 per cent of invoices were not paid within agreed terms. Holland & Barrett said its stan@Businessdayng

dard payment terms were 90 days, although shorter for small suppliers such as the business that complained. It had agreed 30 days with the company that complained. The invoice that was the subject of the complaint was “lost in our payment process in the run-up to the busy Christmas period. Once we established what had happened we resolved it very quickly”. The unnamed small business was quoted in Mr Uppal’s report as saying “a late payment of the amount in this case can have quite a big impact on us. What was particularly frustrating was that we felt Holland & Barrett were completely ignoring us and we were at risk of never being paid”.


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ANALYSIS FT Investors should beware the behemoths rushing to market Lyft, Uber and Airbnb impress in almost every respect — but they do not make money JOHN THORNHILL

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he whole world and his dog condemn the evils of financial short-termism, most often with much reason. But another phenomenon is becoming increasingly unnerving: excessive long-termism. We worry when companies squeeze too much juice out of their existing assets damaging their long-term health. But we should focus, too, on a growing cohort of companies that constantly postpone the juice-extraction process, promising to switch on the monetisation machine at some point in the fathomless future. That is worth thinking about as a herd of unicorns gallops towards the public markets in the US and elsewhere. These private companies are all looking to raise billions of dollars in a series of initial public

sumer habits and litigious lawyers but they still produce lavish payouts for shareholders. From that perspective, massively lossmaking, venture capital-backed companies seeking to cash out on the public markets near the top of the cycle should probably be avoided like drunk drivers on a Saturday night. Lyft and Uber look more like philanthropic organisations, extracting money from rich VCs and subsidising urban transport for millions of users. One of the loudest voices in Silicon Valley arguing why such thinking is simplistic, if not dead wrong, is Reid Hoffman, the co-founder of LinkedIn and author of Blitzscaling. His case is that we have gone from a world of first-mover advantage to one of first-scaler advantage. The company that achieves market dominance in a lucrative sector by attracting billions of dollars of “ir-

Ride-hailing company Lyft raised more than $2bn at a valuation of $24bn in spite of losing $1.50 on every ride © AP

offerings by selling shares to stock market investors. The likes of Lyft, Uber, Slack, Pinterest, and Airbnb are all impressive businesses in almost every respect save one: they do not make much, if any, money. That, though, does not seem to unsettle market investors much. Profits, after all, are so 20th century. A study by Jay Ritter, a business professor at University of Florida, noted that in 1980 only 25 per cent of US companies had negative earnings when they came to market. Last year, it was 80 per cent. Lyft confirmed the trend in its recent IPO when it successfully raised more than $2bn at a valuation of $24bn in spite of losing $1.50 on every ride. The most extreme example of a company in apparent financial distress promising stock market success is the rival ride-hailing company Uber. Founded in 2009, it has never made a profit in the past decade. Last year it recorded $3.3bn of losses on revenues of $11bn. Yet reports suggest it is aiming to float at a valuation of $120bn later this year. The old-fashioned Lex columnist in me has a certain respect for companies that make money. When I was learning about finance I understood that a company’s valuation mostly depended on predictions of its future cash flow, profitability, and dividends. For sake of comparison, Uber’s anticipated valuation would roughly equal that of Philip Morris International, which made operating income of about $11bn last year. Tobacco companies may be slowly being snuffed out by changing con-

rational capital” should generate fantastic returns in a winner-takesall economy. The most stunning example of how such platform dominance has rewarded equity market investors is Amazon. When it went public in 1997 it achieved a valuation of about $400m. It is now worth $900bn, although much of that value derives from its cloud computing business, which was built long after its market debut. Prof Ritter argues that the current wave of IPOs differs from the internet bubble of 1999-2000 in several respects. Most importantly, those companies going public today are older, bigger and generate far more revenue. The median sales of the tech companies floating today are about 10 times those of the bubble era. “Back in 1999 a lot of the companies were going public when it was not clear who the winner would be, if anybody. Now it is often clear who has won,” he says. That may mean these companies carry less operational risk for public investors, but it also implies lower financial rewards given that they have stayed private for longer. None of these companies can possibly emulate Amazon’s stock market performance. Buying into these latest IPOs is not so much a bet on foreseeable financial flows as it is on unforeseeable market structures. Can today’s investors predict what new technological innovations are around the corner, how competition is going to mutate, or how regulators are going to respond? That truly is betting on the long-term. www.businessday.ng

Indian election: the mixed verdict on Narendra Modi

As the country’s prime minister seeks a second term, there are deep divisions among the electorate AMY KAZMIN

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nder the shadow of Jodhpur’s imposing Mehrangarh Fort, the Pokar Sweet Home is famous for its traditional Indian snacks: thick creamy lassis, batterfried stuffed chilli peppers and chickpea flour dumplings. But these days, the food shop founded 80 years ago has a new stream of thoroughly modern visitors: young men — clad in the bright red and orange T-shirts of rival foreignbacked food delivery services Zomato and Swiggy — collecting orders placed online by customers across the city. Om Prakash Bhati, the 51-yearold son of Pokar’s late founder, says the recent launch of Zomato, Swiggy and Uber Eats in Jodhpur has boosted his sales dramatically, after a turbulent period when his business was hit by a draconian 2016 cash ban and a complicated overhaul of India’s tax system. “People who would never come here because of parking issues, they just order on line,” says Mr Bhati, sitting under a tree and constantly checking the large tablet where the orders from Zomato and Swiggy ping in. But if united by food, Pokar’s owner and the young couriers who deliver his delicacies differ sharply when it comes to their assessment of Prime Minister Narendra Modi, now seeking a second term in a general election contest whose weeks-long voting process starts on Thursday. Mr Bhati, who voted for Mr Modi in 2014, is bitterly disappointed with what has happened over the past five years. He believes that despite official figures India’s economy slowed sharply due to the premier’s mis-steps while promised jobs and investments have not materialised. “Modi raised expectation that he was going to transform the country,” he says. “But India has gone backwards under him. He is lying about the GDP numbers. People who have done MBAs are working as waiters.” The Zomato and Swiggy delivery boys, however, brim with enthusiasm for Mr Modi, especially his recent authorisation of a missile strike on an alleged terrorist training camp in neighbouring Pakistan. Their excitement is mirrored by Akshay Bhati, 25, whose father supplies milk to the shop. “The power of the nation has gone up,” the younger Mr Bhati says. “Before, any enemy country would come and attack India and just get away with it — India would not do anything. Now, we will enter your

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house and kill you.” The divergent views among the evening crowd at Pokar’s reflects the deep faultlines among India’s 900m eligible voters, as they gear up for what has become an unusually personality-driven general election contest. The voting will serve as a national assessment of how well the charismatic populist Mr Modi has lived up to the high expectations he raised of a “New India”, when he took power in 2014 after 10 years of disappointing rule by the Congress party. Known for his decisiveness, risktaking and his highly-personalised operating style, Mr Modi has dominated India’s political landscape like no other leader since Indira Gandhi, who is still remembered for her own strong, authoritarian streak. He has mesmerised the public with a vision of an India which enjoys a modern, developed economy, an efficient honest government and global stature, while remaining rooted in the traditional values and social mores of its Hindu majority. The premier’s Bharatiya Janata party, with its deep pockets and sophisticated political machinery, is urging India’s voters to give Mr Modi another five years in power to continue his efforts to remake India. Fragmented opposition parties — including the BJP’s arch-rival Congress, led by Rahul Gandhi, and a diverse array of smaller regional parties — are trying to counter by accusing Mr Modi of failing to live up to expectations, and inflicting unnecessary misery on the population, while simultaneously taking potshots at one another. Results will be known only on May 23, as voting is spread over six weeks. “It is undoubtedly a referendum on Mr Modi,” says Ashutosh Varshney, director of the Center for Contemporary South Asia at Brown University, of the contest. “It’s a very presidential style election.” Mr Modi swept to power in New Delhi in 2014, pledging to bring acche din, or good times, for India, with accelerated economic growth and millions of new jobs. But his record of delivery on these promises is highly contentious. The prime minister insists India’s economy has grown faster under his leadership than ever before, with an average annual GDP growth of 7.3 per cent, compared with an annual average of 6.7 per cent under the previous Congress-led government. But many economists have questioned the credibility of official data, amid perceptions of unprecedented political interference. Even by New Delhi’s own numbers, India’s GDP @Businessdayng

growth slowed to 6.6 per cent in the three months ending December 31, its slowest pace in five quarters. New Delhi has also suppressed a major report which apparently indicated rising joblessness among youth. In a Pew Research Center survey of 2,521 Indians last summer, 76 per cent cited lack of employment opportunities as a major concern. “The gap between the hype and the promises was clearly wide and clearly visible,” Mr Varshney says. Farmers have been squeezed hard as part of the effort to curb once rampant inflation, their anger displayed in a series of large-scale protests. “We are very unhappy”, says Lakshman Ram, a 61-year-old farmer at the Jodhpur spice market, where he was selling a mound of fragrant cumin seeds to traders. “He has killed us farmers. He has finished us. I’m just waiting for Congress — they think about us.” Indeed, when rural anger helped Congress unexpectedly win three state elections in former BJP strongholds in December, it suggested that Mr Modi was politically vulnerable and the national polls could be more competitive than expected. But since the February 14 terrorist attack that killed 40 Indian paramilitaries in the disputed Kashmir region, Mr Modi has deftly turned public attention away from his controversial economic record towards national security. His approval of an air strike on an alleged Pakistani terror training centre in Balakot on February 26 elated Indians long frustrated with New Delhi’s traditional restraint after provocations such as the 2001 attack on parliament and the 2008 attacks in Mumbai. New Delhi’s claim that its missiles killed 300 Pakistani terrorists — which is doubted by western governments — has found a receptive domestic audience, and even been celebrated in a catchy Bollywoodstyle music video widely circulating on social media. Overall, the missile strike — whatever its real impact on the ground — has undoubtedly boosted Mr Modi’s popularity, reinforcing his image as a bold and decisive leader. He sought to consolidate this with a national broadcast on March 27, when he announced that New Delhi had just successfully tested an anti-satellite missile, joining what he called the space “super-league”. The showdown with Pakistan, and subsequent sharp focus on national security, has had the added bonus of galvanising BJP workers and volunteers.


Tuesday 09 April 2019

BUSINESS DAY

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Tuesday 09 April 2019

BUSINESS DAY

EDUCATION

Weekly insight on current and future trends in education

Primary/Secondary

Higher

Human Capital

Despite attacks, Yobe tops states with highest JAMB admission rate OLUWASEGUN OLAKOYENIKAN

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obe state may have come under serious attacks by the Islamic terrorist group, Boko Haram, in the last one decade; it is retaining more candidates seeking admission for tertiary education into its schools than any other state in the country, checks by BusinessDay show. For every 100 candidate that sought admission into different tertiary schools within the state in 2018, more than 60 were granted admission to pursue their respective degree programmes. This places the state above any other state in the country. The implication of this is that you stand better chance in the state than any other state in Nigeria to gain admission to study a first degree programme when you apply to write the Joint Admissions and Matriculation Board (JAMB) examination. Yobe state is one of the three northeast states ravaged by the activities of the Boko Haram jihadists with the most recent attack launched in Feb 2019 and claimed at least six military officers. A year earlier, the insurgents kidnapped 110 students of Government Girls’ Science and Technical College, Dapchi, five died, and they released 104 with Leah Shaibu, one of the school girls, still in their custody. Available data from the National Bureau

L - R: Matt Kelly, EMEA (Europe, Middle-East and Africa) Market Intelligence Manager, Canon; Engineer Obafemi Omokungbe, Rector, Yaba College of Technology and Nizar Abdoui, Product Manager, Canon during the commissioning of Yaba College of Technology-Canon Printing Academy in Lagos.

of Statistics (NBS) on JAMB applications and admitted candidates in 2018 revealed that the admission board received a total

of 15,536 applications from Yobe State in 2018, of which 9,338 candidates were admitted, bringing the percentage of admitted

candidates to applications received in the state to 60.1 percent as against 33.3 percent for the country. Although when compared to 2017, the rate reduced by 5 percentage points from 65.1 percent, more candidates were still interested to study in the state as its 2018 applications represents a 12.8 percent growth from 13,767 applications received by the admission board in 2017, that’s the biggest application leap in Nigeria. The state was trailed by Bauchi state having recorded 11,845 admitted candidates in 2018 out of 24,902 applications received, representing 47.6 percent admission rate as against 53.5 percent in 2017. Adamawa state came third as it could only admit 10,055 candidates out of 2,223 that applied to state’s tertiary schools in 2018. Conversely, Benue state overtook Akwa Ibom to become state with the least rate of admission in the review year. Benue could only admit 16,356 candidates out of 63,116 people that applied for the 2018 JAMB examination. Delta state retained its position in 2018 with the second-least rate of admission, 22,879 got admitted in the state compared with 80,131 people that wished to study in the state’s tertiary schools. Meanwhile, a total of number of 1.65 million candidates, representing a 4 percent decline from 2017, submitted their applications to JAMB across the country in 2018, but out of this number, only 549,763 were admitted.

Canon, Yabatech partner to develop student Professionals learn before students as Univ Nigeria Forum treats workplace evolution talents for careers in printing technology KELECHI EWUZIE

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anon Central and North Africa (CCNA) a leader in imaging solutions, has signed a 3 year partnership agreement with Yaba College of Technology (Yabatech)to support students in their professional development by conducting print workshop training with Canon specialists. Under this partnership, Canon will be holding print training for students at Yaba College of Technology which is Nigeria’s first higher institution to have established a centre for entrepreneurship development. Yabatech is an extension of Canon’s Miraisha Sustainability Programme. The initiative, launched in late 2014, aims to build the capacity and talent of people in the African countries in which Canon operates by leveraging the company’s imaging heritage, advanced technological strengths and innovations. The programme aims to improve the knowledge of digital printing and related technical skills of 80 Nigerian students specializing in this sector. The first activity to be run under this partnership is specialty training that will last one week and will be conducted by a professional print manager from Canon. The theme of this training will be colour management and will alternate between practical and theoretical courses. It will enable students to acquire the knowledge and skills necessary to understand and manage colour parameters in digital documents and printing, which will allow them to further improve the quality of printing and

offer an ever more qualitative service to their future customers. The main goal of this partnership is to support students in their training and facilitate their professional integration in the industry by offering access to professional machines and a space for meetings and experience with experts. With the third-largest youth population in the world and a median age standing at about 18 years, Nigeria’s development is dependent on its youth. Indeed, over 70 percent of the country’s population is under the age of 30 according United Nations (2015). It is important that students receive the necessary training to be able to succeed and support the economic development of the country. Roman Troedthandl, managing director, CCNA, said, “During our collaboration with the prestigious College, Yabatech, we will provide a platform to develop the printing skills and give new opportunities to students. This will be achieved by providing them with innovative tools, practices and modern – skills necessary for proactive participation in the economy. Indeed, the training workshop will offer unparalleled prospects for graduates to broaden their horizons and take advantage of employment opportunities that support this remarkable population growth. “ Adeyemi Kunle, Dean of School of Arts, Design and Printing Yabatech said “I am very delighted that my students from the school of Arts, Design and Printing, Yaba College of Technology can benefit from training provided by Canon’s experts in the professional printing industry.

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nowledge sharing took an unusual twist at the Pan Atlantic University as distinguished professionals from varying fields of science, economy, law, politics and humanities learnt from students’ presentations, the evolution taking place with how work is performed. Dubbed “Getting Down to Business: the Transformative Power of Work”, the second edition of the Univ Nigeria conference brought together student representatives across various universities, reflecting on how information technology, shifting social demographics and globalisation impacts on the future of work. The professionals and proven entrepreneurs including Ohimai Atafo, founder and CEO Mai Atafo, Lawrence Amadi, partner, Technology Advisory KPMG, Ayodele Akinwunmi, research head at FSDH Merchant Bank Ltd. in all of the presentations constituted a panel, giving constructive criticisms and fresh angles about pragmatic solutions. With a special focus on ‘Robotics as a Tool for Work’, Joshua Aghaedo, a 300 level mechanical engineering student of the University of Lagos said jobs that were hitherto handled by human beings will give way to robots in the strive for high efficiency, precision, productivity as well as safety. Citing instances of surgeries and sterling constructions works like the 2717 feet tall Burj Khalifa building being handled by Robots in Dubai, he laid to rest worries about Robots hijacking human jobs, explaining that the introduction of robotics equally reels out new jobs in areas of programming and software

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development among others. In his evaluation of Aghaedo’s presentation, Adetunji Adegbesan, chief executive officer, Gidi Mobile Ltd. and panelist said while concerns about jobs are genuine in view of limited opportunities open to a huge population size; people must begin to nurture ideas on how their skills will be relevant in the new world of work where robotics will lead operations. “The greatest crisis for me is Job. About 28 million people are unemployed while the entire banking industry and telecommunications can barely absorb a substantial number of these people,” he said. “Yes, a lot of opportunities will come with robotics in the workplace but what we can’t be sure of is whether the people who lose their jobs in the adoption of Robots will also be included in the new jobs being created. This means people must transform their skills too.” Addressing waste management and recycling using technology, Charles Aguri, a 500 level student of chemical engineering at the University of Benin built his advocacy around reusing waste as raw material for innovative products to contain the challenge of environmental degradation plaguing the country. Aguri who had created a phone stand and cardboard holder from plastic waste believes waste engagement would grow to become one of the most engaged activities for solving real problems such as electricity generation. Speaking to the generality of requirements for the future of workplace, Uche Attoh, faculty, Human Resource Management, Lagos Business School highlighted qualities such as social intelligence, novel and adaptive thinking and cross-cultural competencies as necessary to stay ahead.

@Businessdayng


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EDUCATION JAN to improve delivery of practical entrepreneurial education for 1M young adults …Kicks off 20th year anniversary activities KELECHI EWUZIE

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unior Achievement Nigeria (JAN), a non-profit economic education focused organisation, says it is committed to reach one million Nigerian youths and young adults with improved delivery of practical education particularly entrepreneurial education in order to address Nigeria’s youth bulge and growing rate of unemployment. Simi Nwogugu, executive director, JAN, made the pledge at a press briefing to mark the organisation’s 20th anniversary. According to her, “The organisation is dedicated to empowering young people to succeed in a global economy and has helped bridge the gap between the classroom and the workplace. Since its launch in 1999, JAN has reached over 900,000 children and young adults across the nation. The theme for the Anniversary celebration coming up later in June is ‘20 Years of Impact, Partnering for Growth’ as it will present an opportunity to emphasise the organisation’s commitment to youth empowerment. Nwogugu said, “After two decades, our core aim of preparing young people for the

L-R: Blessing Omosebi, Uchechukwu Fredricks, Ebuka Ughamadu, Sarah Onabanjo, Emmanuel Anyanwu, all of Caro Favoured College - 2018 winners of the JA Africa Company of the Year with Simi Nwogugu, Executive Director, Junior Achievement Nigeria (JAN), during a Media Parley to announce activities for JAN’s 20th anniversary.

real world remains as important as ever. We are thrilled that for the past 20 years, our programs have supported our incredible youth by

showing them how to generate and effectively manage wealth, create jobs for their communities and how to apply entrepreneurial thinking

Public schools require 8 years of holistic intervention for significant results - Adegoke KELECHI EWUZIE

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or there to be any significant improvement in Nigeria’s public school system, it will take at least eight years of holistic intervention education experts have

said. Adekanla Adegoke, Head of Oando Foundation said research has shown that it takes eight years to move a school from zero to 80 per cent adding that managers of Nigeria public school system cannot achieve 100 per cent if the teachers themselves do not have the requisite skills competencies to promote quality teaching and learning experiences. Adegoke speaking during her Masterclass session at the 2019 Women in Development Summit in Lagos said Oando Foundation - an independent charity established by Oando Plc

have since inception in 2011 been investing in Basic Education. Apart from the funding that the Foundation provides for its adopted schools, Adegoke said the Foundation leverages strategic partnerships with various local/international organisations to bring in more resources to the schools. For instance, she mentioned that the Foundation’s partnership with Sumitomo Chemical, one of Japan’s leading chemical companies, has resulted in the provision of ICT centres in three of its adopted schools annually since 2017, impacting over 7,000 beneficiaries to date. “So we get into a school, improve the infrastructure, train the teachers, empower the school based management committee, and keep improving the school and the Education Management Support System at the State and Local levels,” she said. She further said the Foundation is also utilising its proof of concept to advocate for project

Hansatu Adegbite, executive director, Women In Management, Business & Public Service (WIMBIZ); Adekanla Adegoke, Head of Oando Foundation, and Debola Deji-Kurunmi, executive director, Ideation Hub Africa, during a panel session at the Women in Development Summit 2019 held at the LCCI Conference and Exhibition Centre, Lagos. www.businessday.ng

Meadow Hall bags 2019 outstanding School of the year award

replication with various state governments. “To run effective non- profits, structure, networking and providing evidence are all important”. She encouraged the participants who were mostly young women in the development sector to operate a well-structured, non-profit organisation in order to attract productive and sustainable partnership in the interest of their core beneficiaries. The Women in Development Summit 2019 edition which was themed “Women-led Business as a Tool for Social change and Nation building” had a faculty of women speaking on various topics such as “Are Women Entrepreneurs Ready to Drive Social Change in Nigeria? What would it Take”? “New Media: Platforms for Entrepreneurial Opportunity”. Hosted by Ideation Hub Africa, the summit is a high-octane networking conference for women working across Africa on development and social-change in NGOs, social enterprise, public sector as well as corporate organizations; providing a rallying point for change-makers working actively for social good. Speaking during her Masterclass session on the topic “Strategic Alliances: Activating Partnerships Between Nonprofits and Businesses, Adegoke encouraged mentees present at the Summit to have a global outlook to their social work without losing focus of local programming implementation approaches and their operating environment. She spoke on the power of association through volunteering activities and the need to be passionate about the cause they choose to support. The keynote speaker at the Summit, Hansatu Adegbite, said effective communication was key to NGOs getting the kind of funding they needed to run. In her address, Adegbite reiterated that there was an abundance of financial resources in the private sector that could be spent on developmental issues if the right message got to them.

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to the workplace. Skills that are so important in securing their financial future.” While expressing confidence that the nonprofit organisation would achieve its objective of reaching a million young adults, she called on key players in the private and public sectors to partner with JAN to achieve this. According to her, “Every year, over 1 million would-be university students enter the workforce without tertiary education or appropriate training. The inability of many young men and women to obtain the requisite STEM skills that are in high demand has rendered them unattractive to the 21st century employer. This is why some of our programmes will focus on digital to unlock its potential for the benefit of the country. We are more committed than ever to our mission of ensuring our youth have the values, skills and confidence to secure their financial future.” In 2018, JAN students and programmes won several awards including the first Google Impact Challenge in Nigeria, JA Africa Company of the Year Award (Best Student Company in Africa) and the FedEx Access Award which recognises the business that best demonstrates the ability to cross national boundaries and succeed as a global business.

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eadow Hall has won the award for “2019 Outstanding School of the Year”. The school won the award at The Africa Top Schools Award held in Lagos. Joseph Ayodele, executive secretary of Africa Brands Review (ABR), while disclosing this in Lagos said Meadow Hall was rated outstanding in all performance indicators of a 21st Century school, adding that the school received this distinction based on an assessment and judgment by a panel of industry experts on five different criteria. Ayodele lauded the school for the quality and dedication in raising excellent, godly and well-rounded children. He traced the history of the annual award to 2012 and plans to make the Top Schools Report and Africa Top Schools Award a yearly event. Kehinde Nwani, CEO/Founder of Meadow Hall Group while responding after her school won the 2019 outstanding school of the year at Africa Top Schools Award. Said “Meadow Hall is committed to excellence and is passionate about the holistic development of children, and as such we have set high standards for the school, which all members of staff work towards to ensure we exceed expectations at all times. According to her, “At Meadow Hall, we have a Quality Assurance and Control department that monitors and ensures that everyone does things right. This has helped us greatly in being consistent in the quality of education we offer and in maintaining high standards, always”. She thanked all members of staff for their commitment and passion in service delivery while also reassuring stakeholders that Meadow Hall will continue to set high standards and exceed expectations. Likewise, in 2018, Meadow Hall was rated “Outstanding” by the Lagos State Ministry of Education after a Whole School Evaluation. The school was also awarded a Patron’s Accredited Member status by the Council of British International Schools (COBIS) in 2018.

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Tuesday 09 April 2019

BUSINESS DAY

OPINION Audu Ogbeh’s devaluation message

OGHO OKITI

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udu Ogbeh, a veteran politician and Nigeria’s agricultural and rural development minister since 2015 has been trending lately. There are two videos of him trending on social media platforms. The first was the very laughable video about Nigerians importing Pizza from London with the help of British Airways. The second is of him in the national assembly, I suspect at a public hearing, providing a convoluted narrative of naira’s devaluation and its implications for the Nigerian economy. It is worth reiterating here. In the video, he argued that the tragedy of Nigeria started in 1986 with the introduction of the Structural Adjustment Programme (SAP) under President Ibrahim Babaginda. According to the programme, with persuasion from Harvard trained economists, the naira should be devalued, and we have devalued our currency virtually every week for over 32 years. Consequently, the naira that was the equivalent to the dollar then, and close to parity with the UK sterling is now about 357 and 469, respectively.

According to the Minister, following the devaluation of the naira, Nigerians are now so poor and dependent on imports for food and toothpicks. As a result of these devaluation episodes, interest rates rose to 30 percent in the country and no one could build factories to make the things that Nigerians need. Before we begin to interrogate Ogbeh’s narratives, let me point out that the motivation for this piece is not the narrative provided by him, but the reception by many Nigerians. The video is trending and very popular, even amongst many educated Nigerians. If we are not careful, even in a country of many educated people, populist narratives have the potential to drive us down a pathway to economic ruin. Just ask Venezuelans. The first is that the exchanges referred to by Ogbeh are two important points in 1986 and today. But the two

The US $ is currently equivalent to 1144 South Korean Won. That is, on paper, the Won is weaker than the naira. However, the per capita income in South Korea is currently about US$30,000, about the same with the US

exchange points do not tell us much. What tells us much is how the exchange has changed over time because that reflects the values of the comparative currencies over time, which depends on the underlining fundamentals – economic growth and inflation, both underlined by changes in productivity. Coincidentally, as I write this piece from South Korea, the US $ is currently equivalent to 1144 South Korean Won. That is, on paper, the Won is weaker than the naira. However, the per capita income in South Korea is currently about US$30,000, about the same with the US. Now, let me complete my response by noting that I am not a believer in devaluation as the answer to all balance of payment problems. Yes, currency adjustments help in the short time, but the long-term work required is a policy response that increases productivity overtime. So, while I do not think Ogbeh is right in blaming naira’s devaluation for all our economic woes, the World Bank and IMF were not right to focus almost entirely on the adjustments as the means towards sustainable economic recovery. Mere adjustments do not work because it often seems to only address aggregate demand in the short time. The second point is the narrative that devaluation led to poverty. Devaluation in itself does not lead to poverty. However, in the absence of growth, reflecting Continues on page 35

Dr. Okiti is the president, Time Economics Ltd @ Dr_Okiti 081.7153.0058

Restructuring Nigeria: The irony of corruption PROPHYLAXIS

AYULI JEMIDE

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recently read a book titled: The Prosperity Paradox: How Innovation Can Lift Nations Out of Poverty co-authored by Clayton Christensen, Efosa Ojomo and Karen Dillon. Several of the conclusions in this book buttress some of my views about corruption in Nigeria. The first paradigm the book throws out there is that corruption doesn’t result from a lack of ethics or knowledge and people in societies where corruption is common are not missing the fundamental moral fiber of those in non-corrupt societies, nor are they simply ignorant that there is a better way. Corruption is just a workaround chosen by people when they have few better options. One of the authors (Clayton) told a story of when he was a missionary in South Korea in the 1970s, a man visited them monthly to sell “safety” insurance. If you paid him, he guaranteed that your home would not be robbed; if you didn’t, somebody picked your house clean. Clayton says ‘’making sure that our modest possessions were not taken away was important for our survival, so we paid’’. Clayton came to the conclusion

about this story that ‘’It’s only in hindsight that I see we were willing participants in a form of low-grade corruption — the kind that establishes a power balance in a community, makes lives easier (or harder, for those who don’t participate), and keeps the economic wheels of daily life greased. On either side, corruption was, and continues to be, a matter of survival’’. Clayton has clearly identified that both the burglar who sold safety insurance and the people who paid for the safety insurance did it as a matter of survival.They both had to survive! In Nigeria today I can boldly say that a lot of the pervasive corruption (low and high levels) is simply a question of survival. If you don’t bribe the clerk in the civil service your files will constantly go missing. The clerk must

Development often precedes successful anti-corruption programs, not the other way around. Once enough markets are created, markets provide jobs that give people a viable alternative to accumulating wealth through corrupt means

demand money to retrieve your ‘’lost’’ file because they cannot survive on their meagre salary. Everybody is just trying to survive! The book posits that corruption is in most cases a hired tool for a job to be done - to help people make progress in a particular circumstance. The research done by the authors found that there are three powerful reasons why people hire corruption. First, everybody in society want to make progress. From the jobless person looking for employment to the wealthy person looking to gain more status, we want to improve our financial, social and emotional well-being. When society offers few legitimate options to make progress, corruption becomes more attractive. Nigeria needs to create more avenues for people to make legitimate progress from the sweat of their brows. People out of job, or not paid or poorly paid will find a way to make progress and corruption is a shortcut. Second, every individual, just like every company, has a cost structure. In business, a company’s cost structure is the combination of fixed and variable costs it incurs to run its business. Individuals have also a cost structure — how much money they spend to maintain their lifestyle — and it includes rent or mortgage payments, school fees, hosContinues on page 35

Ayuli Jemide is Founder and Lead Partner of Detail Commercial Solicitors. An entrepreneur, public speaker and writer. Email: AJ@ayulijemide.org Twitter: @JemideAyuli

Government delivery units as tool for performance enhancement

SHULI ADEBOLU Summary s political landscapes change, political leaders increasingly grapple with demanding political environments where public bodies and Governments will be required to change and evolve in order to address the Country’s growing economic needs. Citizens yearn for Governments that are adaptive to their circumstances and ready to deliver on its defined purpose in the face of a world in constant change. A Government innovation which seems to be gaining popularity internationally due to noted successes in seemingly transforming governance is the construct of a ‘Government Delivery Unit’(“GDU”) at the heart of Government (Figure 1). Originating in the UK under Tony Blair’s Government in 2001, GDU’s are small teams embedded at the heart of Government which help to drive implementation and ensure each of the mandate, manifesto promises, and agenda of the Government of the day are realized. Credible examples to site a few successful GDU’s in motion can be found in Sierra Leone where the President set up a new delivery unit in 2015 to help revive the national economy in the wake of the Ebola epidemic. Canada’s newly elected Prime Minister adopted the PM’s delivery unit model in early 2016 as part of an effort to restore public trust in Government.

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What are Government Delivery Units? Government Delivery Units are small specialist teams enlisted to assist political leaders stay focused on the delivery and implementation of their key agenda and priority items. GDUs at the granular level also serve as a function to hold government accountable and ensure transparency in processes and functions of government. With elected leaders going in and out of government without fulfilling their mandate and promises, citizens decry the non-performance of government and increasingly attach this nonperformance to the failure of political leaders. The nature of the priorities on the ‘customer promise’ has never been more challenging! The ‘NewNormal’? Budgetary constraints, global competition for investment, public sector reform programs and changing demographics are forcing changes in the environment for public service delivery. Underpinning these were heightened expectations of citizens which transcended economic status, geographies and the different methods of funding and delivering public services. Financial crisis, a great recession and an overhang of debt in the developed world mean that governments face very different futures from those we might have envisaged in the past, with assumptions underlying apparently successful models of the past. How will these, or new, drivers re-define the landscape that government and public sector organisations will face in the next four years? We have examined the drivers for change in Continues on page 35

Shuli Adebolu is Associate Director, Government & Public Sector Services, PwC

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