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news you can trust I **THURSDAY 11 OCTOBER 2018 I vol. 15, no 159 I N300

Nigeria’s uncompetitiveness hinders AfCTA signing … MAN says FG never consulted private sector ENDURANCE OKAFOR, BUNMI BAILEY, CYNTHIA IKWUETOGHU & MICHEAL ANI


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Stocks may follow historical selloff path despite Q3 scorecards Iheanyi Nwachukwu and Bala Augie


his prognosis might be too early to churn out but it is better told that stock investors should expect negative returns this

October and even November, in line with past trends. BusinessDay checks on the stock market performance in the month of October in the past five years show the Nigerian Stock Exchange (NSE) All Share Index

(ASI) yielded negative returns in three out of the five years. Amidst scarcity of positive macro stories, the aforementioned trend has reawakened many analysts to reiterate their cautious outlook for domestic

equities, with selloffs likely to persist ahead of the 2019 elections. In October 2013, the NSE ASI at 37,622.74 points represented positive return of 2.84percent; Continues on page 38


igeria’s delay in signing and ratifying the African Continental Free Trade Area Agreement (AfCFTA) is due to the need to create a well prepared and competitive market, Chiedu Osakwe, chief trade negotiator and director-general, Nigerian Office of Trade Negotiation, said at the BusinessDay annual CEO Forum, yesterday in Lagos. “Where we are as a government of the country in the Africa free trade negotiation is that we are creating an elaborate proContinues on page 38

Inside Insight: Why Vision2010 oil target of 4m barrels daily remains P. 2 frictional

L-R: Mohammed Garuba, partner, CardinalStone; Frank Aigbogun, publisher/CEO, BusinessDay; Oluwasegun Osidipe, director, economics and statistics, Manufacturers Association of Nigeria (MAN); Mauricio Alarcon, managing director, Nestle Nigeria plc; Seni Adio, managing partner, Copley Partners; Chiedu Osakwe, chief trade negotiator, National Office of Trade Negotiations; Lanre Kolade, managing director, Vodacom Nigeria; Onyekachi Onubogu, executive director, commercial, TGI Group, and Mathias Althoff, partner, Tundra Fonder, during the 2018 BusinessDay CEO Forum Nigeria, with the theme “Leadership in Unfamiliar Terrain” in Lagos, yesterday. Pic by Olawale Amoo



Thursday 11 October 2018

Q3 results unlikely to push up market, analysts explain David Ibidapo & Emeka Ucheaga


s fourth quarter (Q4) of the year begins, the stock market awaits the declaration of Q3 earnings by companies listed on the Nigerian Stock Exchange (NSE). While earnings season is a unique period that determines to an extent the direction of the nation bourse, analysts are however sceptical that the effect of Q3 earnings in pushing the market higher is momentary. Paul Uzum, a Lagos-based stock broker, explained that “investors reaction to Q3 earnings will be momentary as results soon to be announced will not be a shocker however with exception of very few companies.” Among other factors, analysts believe that current political uncertainty and instability coupled with negative foreign investor’s sentiments currently influence more the performance of the stock market. “Two major things driving the performance of the market are political issues and negative sentiments of foreign investors fuelled by CBN actions on MTN, among other factors,” Uzum said. “In times like this, politics is a big business wherein big investors in the market with liquid cash are involved in politics one way or the other leaving retail investors who cannot significantly push market up,” he said further. BusinessDay’s review of post Q2 market performance revealed that despite impressive results released by some companies, especially banks, the all share index still dipped by 14 percent between July and August 2018. Henry Ogbuaku, group head, GDL Asset, said, “I do not see investors taking position prior to company earnings declarations giving that the major drivers of the market are foreign portfolio investors (FPIs) who are not eager to come back to Nigeria due to perceived political risk and volatile nature of the economy. “The only thing currently driving the economy is oil price, and if there is a major drop in price or production, the economy will suffer and this has increased the risk premium of Nigeria leaving FPIs not eager to return.”

The analysts are however optimistic that the banking sector will maintain positive trend in earnings while companies in the manufacturing space will still struggle to roll out good earnings reports. “The bad Q1 and Q2 results of PZ are an indication of the bad state of the manufacturing sector of the economy, and this is unlikely to change in Q3. The inability to access long-term credit funding from banks by manufacturing companies have contributed to a large extent to the poor earnings recorded so far. Manufacturing companies are therefore left with the option of buying and selling and trading in securities,” Ogbuaku said. Recently released Q1 PZ Cussons result on the NSE revealed a record of N204.6 million as loss for the period. Loss during the period was up 66 percent from initial loss of N123 million in Q1 2017. PZ was largely affected by a significant decline in revenue for the period, as revenue declined by 14.3 percent to N15.9 billion from N18.5 billion. PZ, which is a consumer goods company, largely depends on the economic growth and rising consumer confidence to boost sales. Economic growth in the country has been slow and consumer confidence remains weak. According to 2018 GDP report of the National Bureau of Statistics (NBS), the manufacturing sector of the economy grew at a decelerating rate of 0.68 percent making the sector the second slowest growing sector among sectors with positive growth in Q2. On an average, the sector grew 2.04 percent, reaching its 5 quarters highest of 3.39 percent in Q1 2018 since Q1 2017. While analysts see the current fragile state of the economy as a major factor hindering FPIs into the country, however, some domestic investors are perceived to be taking advantage of lower stock prices believing prices will rally in the long run. The analysts expect companies to begin rolling out earnings performances by next month. If companies continue to grow earnings, sooner or later the political cloud will stop raining uncertainty on the market and we can begin to see stock prices recover again, one analyst told BusinessDay.

Nigeria’s uncompetitiveness hinders AfCTA... Continued from page 1

cess of improving the country’s preparedness. “We are also working on the competitiveness programmes by updating the schedule of tariff concessions for trading goods not only for the AfCTA but also, the transition period for the common external tariff of ECOWAS that will come to an end next year. “Furthermore, we have formalised a four-month process to update Nigeria’s schedule of specific concessions commitment for trade and services. Finally, we

have just completed the desire of a careful rules-based trade remedy mechanism for Nigeria based on which we shall be able to save Nigeria’s economy from trading counterparts that should and should hit against industries and manufacturers,” Osakwe said. According to Osakwe, some of these initiatives that are being implemented include the industrial policy and competitiveness advisory council, which is being chaired by two private sector Continues on page 38

L-R: Joe Mekiliuwa, non-executive director, Emerging Africa Capital Ltd (EACL); Funmbi Akinluyi, non-executive director, EACL; Nike Akande, chairman, Emerging Africa Capital Group; Toyin Sanni, group CEO, Emerging Africa Capital Group, and Abayomi Adeboye, non-executive director, EAC, after the inaugural board meetings of Emerging Africa Capital Ltd held yesterday at the company’s office in Ikoyi, Lagos.

Insight: Why Vision2010 oil target of 4m barrels daily remains frictional DIPO OLADEHINDE & DAVID IBIDAPO


wenty two years after the much popular Vision2010 set a production target of four millions barrels per day (bpd), the vision remains vague as Nigeria’s oil production continues to hover around two million bpd. It was former military dictator Sani Abacha who donated Vision2010 to Nigeria and thereafter formed a committee headed by former head of interim government Ernest Shonekan which developed a blueprint that was supposed to transform the country and place it firmly on the route to becoming a developed nation by the year 2010. According to the Vision2010 plan, Nigeria’s proven oil reserves should be about 40 billion barrels in 2010 from the 1996 level of about 22 billion barrels while daily crude output is expected have risen to about four million barrels per day from two million barrels produced in 1996. The magical year of 2010 which

seemed to dwell in the realm of a futuristic impossibility is eight years behind and the country appears to have remained rooted on the same spot over the years or even below the heights of 1996. Ayodele Oni, energy partner at Bloomfield law practices said progress in the oil industry is being stalled by inadequate funding, mistrust and loss of confidence between the Government and the joint venture operators. “The non-passage of the Petroleum Industry Bill (PIB) also gives a sense of uncertainty and new investments have stalled. “Notwithstanding the massive investment in refineries, the sub-sector is in a state of decay due to poor operating conditions, inadequate funding, vandalisation and bureaucratic interventions,” Oni at Bloomfield law practices said. Ayodele Oni noted that subsequent governments need to look beyond political bias and take steps to ensure completion of development programmes which have remain stagnated with abandoned

projects and policy reversals as subsequent governments at both state and federal levels are of the habit of abandoning projects started by their predecessors in favor or creating similar projects under different brands. Before the convening of the Vision2010 committee which comprised 248 members, including 25 foreign stakeholders resident in Nigeria in 1996, crude oil production stood at about 2.2 million bpd including condensates in 1996 compared to second quarter 1.8m bpd announced by the Nigeria Bureau of Statistics (NBS). “Some key governmental and policy issues such as government misplacement of priorities, lack of plan discipline, lack of self-reliance and public service inefficiency should be adequately addressed,” Oni said. “Since the public service is the institution that implements the development plans, any efforts at improving our implementation record

Continues on page 38

Nigeria’s net debt to rise to 25.6% of GDP in 2 years – IMF ... advises reduction in tax evasion, corruption, increase tax on tobacco, alcohol, revisit stamp duty Hope Moses-Ashike, in Indonesia


he International Monetary Fund (IMF) on Wednesday said Nigeria’s net debt would rise to 25.6 percent of its Gross Domestic Product (GDP) in the next two years (2020) from 17.5 percent in 2017. IMF puts Nigeria’s current net debt to GDP at 21.6 percent in 2018. Kenya’s net debt, which is currently at 51.6 percent of GDP, is expected to drop to 51.2 percent by 2020. Ghana’s net debt also is to drop to 59.5 percent of GDP by 2020 from 64.4 percent in 2018. The numbers were tracked from the fiscal monitor report released after a briefing by Victor Gaspar, director, fiscal affairs department, IMF. According to Gaspar, global debt has continued to rise in 2017, reaching a new record high at $182 trillion and that in the last 10 years between

the Asian financial crisis and the global financial crisis, global debt has more than doubled. The Fund urged Nigerian government to reduce tax evasion, increase taxes on tobacco and alcohol, increase its tax audit as well as reduce corruption as part of measures to enhance its tax administration. Paolo Mauro, deputy director, fiscal affairs department, IMF, gave the advice at a press briefing on fiscal monitor at the ongoing IMF/World Bank Group annual meetings in Bali, Indonesia. “We have been discussing over the years with the government, and we see the priorities in tax administration, but there are also aspects of tax policy that would help. So, certainly, in the tax administration, to increase the compliance rate, something that could be done is to increase tax audits, to use e-filing to a greater extent,” Mauro said. Speaking further, he said, “I think

it is not just the revenue side; it is also the spending side. Clearly, improving the choices that one makes on which infrastructure projects, how does one go about selecting the ones that are really going to boost growth? So, I think, definitely, it is a priority to increase revenues, but also to be careful about, what are the ways in which we can make spending more efficient.” Looking at low-income developing countries, Gaspar said a key challenge for this group of countries was to improve people’s livelihoods by meeting the Sustainable Development Goals (SDGs) by 2030. To him, most low-income developing countries face substantial spending needs to achieve SDGs. These additional spending needs for some specific sectors represent 14 percentage points of GDP in the aggregate, and that correspond to $520 billion, or about 0.5 percent of global GDP.

Thursday 11 October 2018






Obaseki lauds Ehiagwina’s performance in NNPC Science Quiz Competition

L-R: Mohamed Ibrahim, general manager, construction sales, Mantrac Nigeria Ltd; Ahmed Ragab, managing director, Mantrac Nigeria Ltd, and Adetutu Mesele, sales manager, construction sales, Mantrac Nigeria Ltd, at the Mantrac Nigeria New Generation press conference and launch, In Lagos.


Air passengers stranded as unions shut down MMA2 IFEOMA OKEKE


housands of air passengers were stranded at the Murtala Muhammed Airport Terminal Two (MMA2) Wednesday as aviation unions picketed the terminal over the disengagement of some workers of Bi-Courtney Aviation Services Limited (BASL), operator of MMA2. The unions involved in the activity were the Air Transport Services Senior Staff Association of Nigeria (ATSSSAN), the National Union of Air Transport Employees (NUATE) and the National Association of Aircraft Pilots and Engineers (NAAPE). This is as the affected airlines yesterday landed and took off at the General Aviation Terminal (GAT), thereby making the terminal saturated.

… airlines move to GAT A visit to the terminal yesterday showed numerous stranded passengers raining curses on union members, as unions used their vehicles and personnel to block the entrance gate to the terminal. Kingsley Ezenwa, public relations officer of Dana Air, also confirmed the development to BusinessDay, saying the airline found a way to operate its first flight this morning amid the challenges on ground, but regretted that the situation had become worse as other flights of the airline and other airlines remained affected. Airlines affected by the action included Arik Air, Medview Airline, Azman Air, Max Air, Dana Air and Aero Contractors, which operate flights from the terminal. There was heavy presence of security operatives includ-

ing the Police and officers of the Nigeria Air Force in the area during the protest. Frances Akinjole, general secretary, ATSSSAN, said the unions were compelled to carry out the action following the refusal of the BASL management to accede to their demands. Akinjole said, “This issue started since May when these workers were laid off for indicating interest to belong to unions. We met the management asking them to reinstate them and recognise their rights to join unions but they refused. “The regulator of the industry, the Nigerian Civil Aviation Authority (NCAA) as well as aviation security agencies have intervened in series of meetings, but BASL management has refused to do the needful to avert this

crisis.” He denied knowledge of any court order restraining the unions from carrying out the action, stressing that what they were doing had legal backings. However, Steve Omolale, Bi-Courtney’s spokesman in a statement, said the company had obtained a court order from the Federal High Court, Lagos, restraining the unions from shutting down Nigeria’s only privately owned terminal. The unions had given notice that they would disrupt operations at MMA2 from Wednesday over the disengagement of some workers of BASL who they said were disengaged for their alleged attempt to join them, but who the company said had attained retirement age or were found not to be diligent in their duties.

NESG announces new board chair


oard of Directors of the Nigerian Economic Summit Group (NESG) has announced the appointment of Asue Ighodalo as its new chairman. This follows previous chairman Kyari Bukar’s resignation on September 17, 2018. Asue Ighodalo is a founding partner of Banwo & Ighodalo, one of the foremost commercial law firms in Nigeria. He obtained his first degree in Economics from the

Wednesday 10 October 2018

University of Ibadan, a law degree from the London School of Economics and Political Science, and was admitted into the Nigerian Bar in July 1985. His core areas of practice are Corporate and Project Finance, Securities and Capital Markets, Energy and Natural Resources, and Mergers and Acquisitions. He is a member of the Nigerian Bar Association (immediate past chairman of the Section on Business Law

of the Nigerian Bar Association), International Bar Association (Section on Energy and Natural Resources Law), Association of International Petroleum Negotiators, Institute of Directors, Nigeria, Nigerian Economic Summit Group (Vice Chairman), Commercial Law and Taxation Committee of the Lagos Chamber of Commerce and Industry and Chartered Institute of Taxation of Nigeria. Ighodalo is the chairman,

Board of Directors, Sterling Bank plc, Dangote Flour Mills plc and Global Mix Limited. He also sits on the boards of other public and private companies, non-governmental organisations and a statutory body including Mainstreet Technologies Limited, Okomu Oil Palm plc, Ensure Assurance Company Plc, Christopher Kolade Foundation, FATE Foundation and the Nigeria Sovereign Investment Authority (NSIA).

do State governor, Godwin Obaseki, has lauded the performance of Edo State representative in the Nigerian National Petroleum Corporation’s (NNPC) National Science Quiz Competition, Alikah Joseph Ehiagwina, for his impressive outing in the competition and making the state proud. The governor said Ehiagwina’s feat was worth emulating as he rose through the various stages of the competition to emerge top three among his peers drawn from different parts of the country. Ehiagwina, a student of Don Bosco Science Academy, Ukhun, clinched the third place at the contest held at the Amphitheatre in the NNPC Towers, Abuja, in the presence of former heads of state, Yakubu Gowon, Abdulsalami Abubakar; minister of state for petroleum resources, Ibe Kachikwu, and group managing director, NNPC, Maikanti Baru, among

others. Okeke Tony Kabilan of Enugu State came first, while Igban Emmanuel from Ogun State took the second spot. The governor noted that the performance was a testament to the indomitable spirit of Edo people, and the unrelenting commitment to learning and personal development, which the state is famed for. According to Obaseki, “I congratulate Alikah Ehiagwina for putting a good showing in the NNPC National Science Quiz competition, in which he emerged third after a keenly contested final. He was dogged, determined and proved to be a true champion with an excellent display of sportsmanship and intellect. “His performance goes to show the true spirit of the Edo man: a detailed, confident and undeterred soul, always searching for knowledge and applying same for personal and national development.”

Edo upholding dignity of girl child with fight against human trafficking, others – Obaseki


overnor Godwin Obaseki of Edo State says the ongoing fight against human trafficking in Edo State is in recognition of the dignity of the girl child and her capacity to contribute to the growth and development of society. Obaseki said this in Benin City, in commemoration of the International Day of the Girl Child celebrated by the United Nations and its global partners on October 11, each year. He noted, “the fight against human trafficking and illegal migration requires the support of everyone as the menace debases the essence of our common humanity.” The governor further said that his administration has demonstrated the readiness to attend to the peculiar challenges faced by girls and women in the state with the appointment of 19 female aides on gender issues, who have been enriching government policies and programmes with the needs of girls and women.

“We are empowering our girls and their male counterparts through the new basic education sector transformation (Edo-BEST) initiative of our administration; the various skills acquisition and job creation programmes of EdoJobs, an agency of the state government and we are committed to protecting our young girls in schools with the Child’s Rights Act, amongst other initiatives,” he said. He added that the landmark judgements secured against child molesters in the state is a testament to the commitment to protecting the girl child from social vices, noting that even more policy measures will be adopted to give the girl child a broader space to realise her potential. He described as apt, the theme of the 2018 International Day of the Girl Child, With Her: A Skilled GirlForce, and in consonance with the underlying philosophy of his administration’s well thought out programmes for the girl child.

Thursday 11 October 2018






IMF sees Nigeria exchange rate as shock absorber to external environment ... advises on strong reserve buffers HOPE MOSES-ASHIKE, in Indonesia


nternational Monetary Fund (IMF) on Wednesday said Nigeria allowing exchange rate to act as a shock absorber was helping the economy adjust to the new external environment. Anna Ilyina, division chief, monetary and capital markets department, IMF, said this on the sideline of a press briefing on the Global Financial Stability Report (GFSR) by Tobias Adrian, financial counsellor and director, monetary and capital markets department, at the ongoing IMF/World Bank Group annual meetings in Bali, Indonesia. “In terms of policy responses, of course, flexible exchange rate is the first line of defence. In terms of FX interventions, of course, FX

interventions might make sense in certain circumstances, but then one has to consider how exchange rate is valued relative to fundamentals. What is the level of reserves, whether there may be other policy tools that might be more appropriate in country-specific circumstances, and so on so forth,” she said. Nigeria’s external reserves have declined to $43.6 billon as of October 8, from the peak of over $48 billion in May. She said one important driver that always affected Nigeria’s external borrowing costs and economic conditions more broadly, was oil, and so Nigeria being an oil exporter was obviously very sensitive to changes in oil prices. “Another thing that I wanted to mention is that given that we are still sort of

in the relatively early stage of monetary policy normalisation in advanced economies, one can expect global financial conditions and external financial conditions for emerging markets to remain challenging going forward. “So, this is likely to be a sort of relatively protracted period of volatile capital flows and pressures in the markets, and therefore in this situation, one should use foreign exchange reserves judiciously while thinking about future, maybe more extreme periods and bouts of volatility,” Ilyina said. The Fund has advised Nigeria, and other low-income and frontier market countries to build strong reserve buffers that will help them increase resilience to external shocks.

Rig operators plead for upward spending limit from 40% cut as oil price surges to $80 IGNATIUS CHUKWU & FORTUNE OKORIE


ig operators serving in the Nigerian oil industry want the Federal Government through the Nigerian National Petroleum Corporation (NNPC), which had slammed a 40 percent cost cut when oil went down to $40 per barrel, to move up the cut limit now that oil is doing 100 percent of that. The call was made in Port Harcourt, Rivers State, at the 2018 general meeting between the Department of Petroleum Resources (DPR) and rig owners/operators at Jevnik Place on Tombia Street in the GRA II section. The call came from Ote Enaike, chairman, Interna-

tional Association of Drilling Contractors (IADC), who said the Federal Government through the NNPC slammed the cut on oil corporations who passed same to drillers. The order was for operators to cut down expenses by 40 percent when oil prices came down as low as $40 per barrel. During this period, he said, it was difficult for drillers, as they had to reduce workers and still maintained oil industry standards in terms of rig efficiency. He said the over 30 drillers in Nigeria and several drilling operators were surprised that despite the increase of oil prices to about $80 per barrel, no order has

come to raise the spending limits. The danger, he said, is that the drillers are struggling to up their game with the old spending. He said it makes it difficult to get quality personnel and to upgrade equipment. According to Enaike, it is also difficult to convince those laid off to return to an industry that caused them pains. To recruit new workers has been tough due to the cost of training them to required standards. So far, the number of rigs in Nigeria which fell to as low as 12 in 2016 when oil prices fell badly has surged to 32, the 2015 level. He said the number fell from 50 at the rosy levels.

Unity Bank partners Selah Gardens to promote empowerment, Green Initiatives


nity Bank plc, in line with its commitment to promote eco-friendly initiatives, partners Selah Gardens to hold an open day and exhibition for gardeners and stakeholders in the Botanical and Horticultural fields. The Open Day was conceived to promote entrepreneurship among florists, plant farmers, garden furniture makers, hand crafters, landscape artists, and dealers in garden equipment and accessories, who participated in the tradeshow to display their wares and designs at the two-day exhibition and fair.

As a further demonstration of the bank’s commitment to supporting agriculture and SMEs in general, the event formed part of efforts by the bank to promote sustainable agriculture and preserve, restore, beautify and enhance the environment. Speaking on the collaboration, Tomi Somefun, managing director/CEO the bank, stated that the event was not only part of its corporate social responsibility but also a further demonstration of its commitment to supporting agriculture and SMEs. She said, “The bank is convinced that the impact of this initiative will

be well felt in a number of areas as it falls within the bank’s core strategic focus, agriculture and its extended value chain.” It would be recalled that Unity Bank has been in the forefront in promoting access to finance by players in agriculture and agribusiness, leveraging on the bank’s rich history and experience in supporting agricultural businesses through robust financial inclusion strategy, and extensive branch network in Nigeria’s agricultural belt and a supporting technology that enables it reach millions of small holder farmers in rural Nigeria.

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Nigeria air suspension: 1st letter to FEC: What happened?

CHRIS ALIGBE Aligbe is an Aviation Consultant and wrote via


n the middle 80s, the then Military Head of State, Gen. Ibrahim Babangida, faced with the challenge of communicating and convincing the Nigerian public of the benefits of his economic policies which were tied to the IMF dictates, appointed an acquitted journalist, Prince Tony Momoh, his Information Minister. Momoh had the uphill task of defending Naira devaluation with its devastating impacts; increase in fuel pump price and liberalization as well as commercialization and privatization of government-owned companies; as well as general decline in economic life of the citizenry. To do this, required thinking out of the box since the usual run-off the mill press release, publications, features and articles could not do. Momoh came up with a novel idea titled “Letter To My Countryman”, in which he sought to directly address the citizenry on government’s policies, policy actions, intended objectives and benefits in short and long terms. Then, working as senior press secretary to Momoh, along with my senior and junior colleagues, we had the uphill task of providing the huge basic data the minister needed for his “letters” which he wrote himself. It was novel and impactful, though not devoid of heart aches and disappointments. I have therefore decided to pull out from Momoh’s archives, this unpatented concept of “letter” to engage the FEC, stakeholders and the general public on specific issues in aviation which will include, but not limited to, national carrier – Nigeria Air, state of airline services in Nigeria, airport concession and maintenance, repairs and overhaul (MRO) centre, aircraft leasing, safety and regulations. Since the most trending issue is Nigeria Air, my first set of letters will focus on this. Just like Obasanjo did in 1999,



hile people were busy reading Elon Musk’s tweets, Audi AGwas unveiling its Tesla challenger, the E-tron. One of the most interesting bits of the glitzy launch concerned simply plugging the thing in: The carmaker, it turns out, has teamed up with Inc. to install home chargers for E-tron buyers. While Amazon helping to get

Buhari even before assumption of office had muted his interest in bringing back a national carrier to meet the yearnings and aspirations of Nigeria air travel public as well as use it to catalyze the aviation sector. Like Obasanjo, Buhari’s plan was in response to the aspiration of millions of Nigerians at home and in the diaspora who feel the devastating impact of the absence of a national carrier or a formidable, reputable Nigeria private international operator since the ill-advised liquidation of Nigeria Airways. Since its liquidation, some domestic private airlines had done a great deal to provide services at the domestic level and, limitedly, at the regional level. But attempts on international level have been somewhat woeful try as much as the two airlines that attempted did. Today, there is no Nigerian domestic airline operating inter-continental flights in spite of the fact that seven of them are designated on over 20 international and regional routes. So, when the President appointed Hadi Sirika as the Minister of State, Transport, with specific responsibility for Aviation, quite many a person believed that the President had an eye on the sector. This perception was re-enforced by Sirika, when in 2016, at the Shehu Yar’dua Conference Centre, Abuja, he unveiled a comprehensive aviation roadmap in an event that was pack-full of stakeholders, which included airline operators, aviation unions, service providers, bankers regulators, travel agencies, serving and retired professionals in all facets of the aviation sector. In fact, the who and who in the industry were there. Again in April, 2018, the Minister, at the newly built Air Force Conference Centre, Abuja, unveiled the six transaction advisers approved and appointed in all the areas of the roadmap following the advertised call for expression of interest and competitive bid. In that forum were the elites and the unions of the industry. There were legislators, bankers, service providers, airline operators and industry professionals, serving and retired as well as two main regulators: the NCAA and the ICRC. The Minister had promised to hold another stakeholders’ forum when the transaction advisers’ report was ready. When in August, Sirika, un-

From Lai, the Nigeria Air was stepped down because there were no investors while from Hadi, there were at least six potential investors which included two reputable airlines, three reputable financial institutions and the two leading global aircraft manufacturers, who all have not only expressed interest in Nigeria Air but have offered incentives

veiled the Logo, livery, ownership structure and funding requirement at the 2018 UK Farnborough air show, a good number of Nigerians were taken aback, arguing that “charity should have begun at home”; that unveiling should have been done at home first. Despite the spontaneous criticism of the unveiling abroad, millions of Nigerians heaved a sigh of relief as they looked forward to a new dawn, a new national airline that would, as it were, wipe away tears and national shame. The support for Nigeria Air was so overwhelming that it almost drowned the voices of the few but well-placed vociferous critics. This is why when, on Wednesday September 19th, 2018, the aviation minister put out a terse press statement to the effect that the federal government has suspended the Nigeria Air project, both the few happy and applauding critics of the suspension as well as the millions of the expectant joyful Nigerians who were looking forward to a new dawn were awe-struck and bewildered. The first group who clapped saw the suspension as a prophesy come true and prayers answered. While the second group saw it as hopes dashed and future truncated. Even at all these, everybody today is still at a loss over what happened, more so as Sirika gave no explanation. This worrisome situation has further been pushed almost to the limits

by the discordant tunes coming from the ministers of information and aviation, Lai Mohammed and Hadi Sirika respectively. From Lai, the Nigeria Air was stepped down because there were no investors while from Hadi, there were at least six potential investors which included two reputable airlines, three reputable financial institutions and the two leading global aircraft manufacturers, who all have not only expressed interest in Nigeria Air but have offered incentives. This discordance has also made Nigerians curious on why the suspension of Nigeria Air was not part of the usual post-FEC meeting press briefing that fateful Wednesday which such a major decision should have been. All these have unfortunately given rise to six dangerous schools of thought that have left Nigerians wondering whether the Nigeria Air suspension is a kind of the elephant which the six blind men of Indostan went to see. The prevailing schools of thought are listed below: The first is that Nigeria Air was ab initio a hoax, a political gimmick designed at best to enlarge the ruling party’s agenda and at worst an individual’s agenda designed to create a pool of funds for electioneering campaign. This position has the following of cynics who hold that “Nigeria Air was created on paper, unveiled on Facebook and died on a Twitter” as well as the following of some politicians and political activists who have said all sorts of noteasily imaginable things and have called for the arrest and prosecution of Sirika over N1.2billion they claimed he spent on the project. The second school holds that for the first time, the opponents of Nigeria Air, mainly members of the airline operators have successfully infiltrated the FEC and lobbed some of its critical members to find a way to ensure that it is a non-starter. This group points to the fact that the leadership of the operators has always advanced arguments of the need for government to direct its funds to areas of health, education, airport infrastructure, etc as well as create a level playing field. This school point to the usual argument by the perceived “mind infiltrators” that national carrier idea is moribund and that any floatation should go to the market. This school of thought whose singular objective is the protection of its business interest has wooled it up in a cloak of national interest.

The third school holds the position that the suspension of Nigeria Air arose from a crisis of poor communication which led to no-buy-in by stakeholders and the Nigerian public. They hold that if it had been otherwise, Nigerians would have risen with a loud voice to pressure and demand the immediate restoration of the Nigeria Air Project. They argue that it is not too late to correct and put back on track, as the baby must not be thrown away with the bath water. The fourth school advances a conspiracy theory to the effect that there is a co-operation between internal and external forces of very strong members of FEC and some influencers outside the FEC who strongly believe that they would not have any decision-making role in Nigeria Air if Sirika is allowed to go the way he wants to go. The idea is to delay implementation till Buhari’s second term, to enable them take control of the process. This school believes that there is nothing fundamentally wrong in what has been done so far, since necessary approvals were given by the FEC and the process deviation noticed is not such that should derail the project. The school believes that in the next dispensation, Sirika may not occupy the Aviation portfolio even if he remains in the cabinet. It is this school that moved to use the issue of Nigeria Air not being in 2018 budget as an alibi. The fifth school of thought is held by those who strongly believe that Nigeria Air is a victim of poor relationship management by Sirika. That he failed to identify some of his colleagues in the cabinet who he needed to court and lobby. His not doing this was considered as arrogance. Members of this school point out that this frosty relationship started with the separation of the aviation schedule from transport and was exacerbated by the Abuja Airport resurfacing among other issues. They point out that ego issues and power play arose all of which led to the high stake lynching of Nigeria Air. The school believes that it would take time to douse the interplay of egotic forces in order to save Nigeria Air and that this will not happen in Buhari’s first term. Note: The rest of this article continues in the online edition of Business Day @

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Why Nigeria, other oil producers should worry about Amazon’s battery play new plugs put into garages may not scream revolution, it should still worry the likes of Exxon Mobil Corp. The oil industry has long been more concerned with generating supply than encouraging demand—why bother, when drivers had no alternative? The hassle of charging has long been one of the things holding back the electrical vehicle market. Amazon’s entry will make that a whole lot easier, potentially representing a major threat in oil’s biggest market. The fossil fuel industry should be worried about a company such as Amazon encroaching on

its territory. Back in the summer of 2008, three of the world’s five most valuable companies produced oil and gas. Exxon was No. 1. Today, four years after a global collapse in oil prices, Big Tech dominates and Exxon struggles to stay in the top 10. Amazon momentarily puzzled investors in June 2017 when it announced it would spend $14 billion on the grocery chain Whole Foods; its stock has virtually doubled since. Bubbly this may be, but that’s beside the point: If you’re reading this online, you’re enjoying the legacy of one of the biggest bubbles ever.

What matters is that Amazon has taken a toehold in yet two more businesses: energy and transportation. Its shareholders won’t care, but Big Oil should. * Alexa, Can You Charge My Car? Speaking at a London conference, Nathaniel Bullard of Bloomberg New Energy Finance listed some ways Amazon might make EV ownership more attractive. What if Alexa could place your Whole Foods order while you were on your way to the store? Or start charging your car when electricity prices are lowest? * Reined in spending on upstream oil and gas development has declined by $308 billion since

2014. Why invest so much in reserves if demand for oil might falter? *Over the top Ten years ago, the phrase “peak oil” referred to supply. Today it’s more often used in the context of peak demand—a much less cheery prospect for the fossil fuel industry. * Big oil meets big tech In the summer of 2008 fossil fuel companies ruled the capital markets. Today they’re lucky if they can still compete with the biggest players, almost all of which serve the digital economy.

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Thursday 11 October 2018





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Is the CBN crying wolf about the economy?

UCHE UWALEKE Uche Uwaleke is a Professor of Capital market and the Chair of Banking and Finance Department at the Nasarawa State University Keffi


irst was the salvo of warnings from the external front. A few weeks ago, the Economist Intelligence Unit (EIU), the research arm of The Economist Magazine and the HSBC, a multinational banking and financial services company, had in separate reports on Nigeria, raised an alarm concerning the deteriorating state of the economy. But the reports lacked credibility not least because they adorned political garbs suggesting that a second term for President Muhammadu Buhari would be detrimental to Africa’s largest economy. Little wonder the government scoffed at the reports describing that of HSBC in particular as tantamount to “no more than an expression of frustration over measures put in place by the Buhari administration to tackle corruption and money laundering which this bank thrives-on in many countries”. Now the warning is coming from the home front. At the end of the September meeting of the Monetary Policy Committee, the Central Bank Governor, Mr Godwin Emefiele, was reported to have expressed concern about sliding output growth and the high chance of the economy relapsing into recession if the trend was not arrested. Just how justified is this fear? Many centuries ago, a story of a boy tending sheep is told by AePOSITIVE GROWTH WITH BABS

BABS OLUGBEMI Babs Olugbemi FCCA, the Chief Responsibility Officer at Mentoras Leadership Limited and Founder, the Positive Growth Africa


very October 5 is the World Teachers’ Day and Nigerian teachers trooped out in mass to celebrate the day at the various venues for the gathering of teachers. For some time, the pass rate in WAEC and NECO examinations, which is the benchmark of performance for the students at the secondary schools level has been a source of concern for Nigerians due to the high failure rate year on year. There are also concerns in other exams like the Law school final bar examinations. The failure rate of our potential

sop, the ancient Greek philosopher. The little shepherd, the story goes, became bored at some point and sought to attract attention by warning of an approaching wolf so many times that when the animal finally appeared and attacked his flock, no one believed him. So, is the CBN crying wolf about the economy when there is none in sight? The last economic recession came on the heels of plummeting crude oil prices. No doubt, the story is different today. For an oil-dependent economy, the current high crude oil price is good news. Not too long ago, improved oil exports and increased capital inflows, although dominated by non-resident portfolio capital, helped the CBN rebuild external reserves. This dynamics has supported exchange rate stability and led to some convergence in the foreign exchange market. Headline inflation, despite remaining double digit, has moderated considerably from a peak of 18.72 per cent in January 2017. Since the country’s exit from recession, the purchasing managers index has been in excess of the 50 points threshold. Unfortunately, that is where the good news ends. These moderate gains have come under serious threat of reversal. Downside risks are on the rise exacerbated by developments in the US in particular. Recent reports by the National Bureau of Statistics provide evidence of weakening fundamentals. The economy is losing steam. From a post-recession peak of 2.11 per cent in the last quarter of 2017, the economy has slowed to 1.95 per cent and 1.50 per cent within the first and the second quarters of 2018 respectively. The marked decline in Q2 2018 GDP growth has a lot to do with shortfalls in crude oil output. The latest NBS report disclosed that ‘’in the second quarter of 2018, average daily oil production was recorded at 1.84 million barrels per day (mbpd) lower than

Nigeria’s public debt… climbed to over N22.3 trillion as at June 2018 up from N19.6 trillion the preceding 12 months. Last year, the government spent a whopping N1.8 trillion servicing this debt from total revenue of circa N2.7 trillion...

the production volume of 2.0 mbpd seen in the first quarter of 2018’’. The report added that the fall in oil GDP happened despite the fact that ‘’crude oil price (Brent) maintained steady rise from USD 65.32 per barrel in January to USD 74.4 per barrel in June’’. The federal government budget projects crude oil output to average about 2.2 mbpd this year. In the wake of renewed disruption to oil infrastructure in the Niger Delta, exports are likely to weaken with government revenues also taking a hit. Motivated, in part, by normalization of interest rates in the United States of America, capital flow reversal has intensified as evident in a bearish equities market with Year-to-Date loss at over 14 per cent. Currently, investor sentiment is very low. The heightening political tension provides little confidence that the haemorrhage in the stock market will end soon. External reserves are currently under pressure and have slipped from over USD 48 billion to under USD 45 billion within a few months.

If the last economic recession was not very severe, it was partly due to the contributions of the agric sector. This narrative is changing. As disclosed in the NBS report, ‘’the agricultural sector in the second quarter of 2018 grew by 1.19 per cent (year-on-year) in real terms, a decrease by -1.82 per cent points from the corresponding period of 2017, also a decrease by -1.81 per cent points from the preceding quarter’’. This is not a good commentary for a sector that used to be the star of the Nigerian economy even during the recession (when virtually every other sector was in the negative territory) growing by 4.88 percent in Q3 2016. The continued security challenges in the North-East and North-Central zones in particular pose serious threats to the food supply chain in major food producing states. The recent uptick in headline inflation to 11.23 per cent in August 2018 from 11.14 per cent in July 2018 ‘’despite the underperformance of key monetary aggregates’’ is a source of headache for the Central Bank. Public debt level to GDP may be below the World Bank 56 per cent threshold, but debt service cost is proving to be the key budget risk and a drain on the fiscal framework. Nigeria’s public debt, according to data from the Debt Management Office, climbed to over N22.3 trillion as at June 2018 up from N19.6 trillion the preceding 12 months. Last year, the government spent a whopping N1.8 trillion servicing this debt from total revenue of circa N2.7 trillion as disclosed in the recently published 2017 budget implementation report. This amounts to a debt-service ratio of about 67 per cent, high enough to crowd out spending on critical projects as well as increase the risk of macroeconomic instability and economic recession. As a confirmation, the report by the Budget Office showed that as at 12th June 2018, a total of N1.56 trillion was released and cash

backed to MDAs for their 2017 capital projects and programmes which is less than the over N1.8 trillion spent on debt service alone! With just a few months to the end of the year, there is little to prove that the execution of the capital component of the 2018 Budget has commenced. It is not surprising therefore that unemployment rates are rising amidst a general downturn in economic activities. The CBN, saddled with the responsibility of maintaining price stability, has done its part. Concerned about the negative impact of an interest rate hike on the asset quality of Deposit Money Banks and their ability to perform financial intermediation, the CBN has chosen not to increase the policy rate. At the same time, it is constrained to lower the policy parameters in view of the near-term risks to inflation. Having unveiled several schemes aimed at funneling credit to the real sector as part of its contribution to economic recovery, it is now left for the fiscal authorities to play a complementary role for the economy to gain the needed traction. The takeaway from the warning made by the CBN is that the government should leverage on the current bullish crude oil market to build fiscal buffers while at the same time prioritize the implementation of the 2018 capital budget with a view to reversing the decline in output growth. Unlike the proverbial little boy who cried wolf where there was none, the CBN’s warning can only be ignored at the peril of the nation’s economy. The apex bank raised a similar alarm in 2015 of an impending recession if certain threats to economic growth were not addressed. Apparently, the warning fell on deaf ears and the economy plunged into recession the following year. Will history repeat itself? We pray not.

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Who is helping the teachers? leaders in the examinations has been so worrisome, and the call for a national education summit is much louder than ever. We have seen recent efforts by various organisations, including the government to put the education system back to its glorious days. We want the quality output in terms of qualified and adaptable workforce, morally educated and well-behaved citizens and people who can make Nigeria and Africa proud in the world. The federal government in its 2018 budget allocated a paltry 7% of the total budgeted expenditure for education, contrary to the recommended 26% by the United Nations. We have, however, witnessed increased attention to the quality of our education through the activities of the organisations such as the Nigerian Union of Teachers (NUT), the Teachers’ Registration Council of Nigeria (TRCN) and host others. These efforts are geared toward improving the quality of output of the education system. To complement these efforts is the huge investments of companies in supporting school oriented programmes towards the discovery of unique

talents among the students and the various scholarships in the country. However, teachers as an important value chain component within the school system have not been receiving much of the attention as the focus on the students and must be helped outside the professional regulation. In the new machine age and with the capacity of the 21st century students, we cannot afford teachers without the relevant competence in teaching, and in the skill set required to handle situations in a fast-changing world. I am sure some of the factors that made Singapore to rank top in the global education ranking under the Organization for Economic Cooperation and Development (OECD) are the focus on the teachers and the learning environments. The teachers in Singapore must have been helped in their teaching techniques for the students to be top among the seventytwo participating countries in the Programme for International Student Assessment (PISA) for 2016. This also laid credence to the foundation laid by Lee Kuan Yew and the importance of building institutions for the future development of any society. For students to live successfully in

this age, they must learn and have the core skills of critical-thinking and problem solving, collaboration & communication, creativity & imagination, citizenship, digital literacy and student leadership & personal development as identified by the United Kingdom’s department for international development (DFID) and world bodies like the UNESCO and British Council. Are our teachers equipped to teach in line with these new learning outcomes? How are we helping the teachers who need as much help as the students? I am not sure if we giving enough support to our teachers to teach the core skills and handle the complexity of dealing with the 21st century learners. The teachers must be helped. Who is helping the teachers to be ahead of the learners in preparation for the future? This goes beyond what the government is doing at the present. To buttress the need to update our teachers’ skills, Daniel Goleman claimed that 85% (emotional intelligence) of the skills needed to succeed in life situation are outside what is being taught in schools. Only 15% (cognitive intelligence) are covered by the school curricu-

lums. If this is accepted, then how will the products of the schools be adaptable and exude relevant skills if the teachers are not equipped to teach and imbibe the required skills at this age? I have huge affiliation to Mrs. A. B Amodeni and Mr. J. A. Oni, my school principal and teacher whom I passed through twenty-six years ago. They are the equivalent of the teacher of the former governor of Lagos State, Babatunde Fashola who he invited into his office after thirty-eight years. These teachers must have gone beyond being the sage standing in the front of the students in the classrooms. They must have taken ownership of their students by inspiring them beyond the classroom teaching. Their engagement with the students must have imparted self-beliefs and life skills for the students have had the memories of them many years after parting ways. Note: The rest of this article continues in the online edition of Business Day @

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Bashir Ibrahim Hassan


Thursday 11 October 2018

Nigeria’s fiscal crisis


ast month, the budget office of the federation re l ea s e d t h e 2017 budget implementation report. According to the report, the federal government’s revenue for 2017 was N2.7 trillion, about half of its projected revenues for the year and 36 percent or one third of its projected e xp e n d i tu r e o f N 7 . 4 4 trillion. Faced with the sharp fall in revenues, the government had to cut its expenditure to N6.5 trillion in 2017. The government spent almost a trillion naira less than it planned to spend in 2017 but the final N6.5 trillion spent was still N3.8 trill ion more than the federal government’s total revenues for the year. To fund the deficit, the government had to borrow a total of N2.5 trillion to help fund its financial obligations for the year. Th e g o v e r n m e nt b o rrowed N1.2 trillion from the international capital markets and borrowed the balance of N1.3 trill ion from th e dom e s-

tic capital markets, an amount that is more than the net increase in lending to the private sector in 2017 from financial institutions. The government got about three times more m on e y from th e b anks than the private sector got from the banks. However, the N2.5 trillion that the government borrowed from the banks to fund its deficit was not enough to plug the N3.8 trillion it created spending more than it earned in revenues in the year. This has left the government with a N1.3 trillion hole that it could not close in 2017. This means that there are some contractors sitting out there that have done jobs for the federal government that have not been paid and do not know when they will be paid or if they will ever be paid. The government obviously could not raise the money to pay these contractors. It could have taken on more loans to pay these contractors but apparently felt it was already too over burdened with debts to take on more loans. Contractor debts do not attract interest rates and the government can

usually take its time repaying even though the businesses owed tend to suffer, with some collapsing while waiting to be paid for jobs duly executed. But the government has a reason to be concerned about its debts that keep piling up. As at the end of December 2017, the country’s total debt stock stood at N22 trillion, which is the equivalent of US$71 billion, data from the Budget Office show. The debt stock went up by US$4.4 billion or N1.4 trillion in 2017. A breakdown of the debt shows that US$18.9 billion is owed to external lenders while the balance of N15.9 trillion is owed to domestic creditors. Already, the federal government has exceeded its own target of ensuring that the country’s total debts do not exceed 19.39 percent of economic output or GDP in any year. When the government closed its books in 2017, country’s total debt stood at 20.12 percent of GDP. However, what would have given the government more concern is the rising debt service burden which is beginning to eat up two thirds of govern-

ment revenues. Debt service consumed a total of N1.8 trillion in 2017. This represents 75 percent of th e g o v ernm ent a ctual revenues in 2017. The government is spending an average of eighty kobo of every one naira it earns servicing the debts it is accumulating. The amount spent on debt service is higher than the N1.6 trillion released for capital expenditure in 2017, of which N1.4 trillion was the amount actually utilized. The country is now spending more money servicing debts than putting in place the infrastructure that will help grow the economy to repay those debts. This is enough to s et off alarm bells, but there seem to be a conspiracy of silence. Yet the government has continued to b orrow. Th e fe deral government is currently seeking a fresh $6 billion from the China Exim Bank for the construction of the Ibadan-Kano rail line. At the current rate, Nigeria may be unable to service its debt in the near future and we would be fully back to the debt trap that we exited in 2005.

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Thursday 11 Octoer 2018





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AfDB says Africa needs $170bn annually to bridge infrastructure gap Nigeria ranks 22nd in infrastructure quality in Africa KELVIN UMWENI


ranked second in Africa by the International Telecommunication Union (ITU) on its ICT Development Index and 90th on its scale of 176 countries worldwide. Other countries that emerged best on infrastructure quality ranking are Egypt, Mauritius and Libya with 7.7 score each. South Africa, Tunisia, Algeria and Morocco had scores of 7.3, 7.1, 6.5 and 6.5 respectively. Nigeria, Africa’s largest economy was ranked 22nd position with a score of 3.8 out of 10, slightly above Angola, Uganda and Tanzania with scores of 3.6, 3.5 and 3.3 respectively. The AfDB estimates that Africa needs about US$130bn-US$170bn annually to close its infrastructure gap. “The good news is that this shortfall represents an opportunity for businesses involved in the development or financing of infrastructure projects,” says Celeste Fauconnier and Neville Mandimika, co-authors of the report. RMB believes that there will only be a marginal increase in infrastructure investment between 2018 and 2020 on the continent, as governments focus

on fiscal consolidation to reduce their recently racked-up debt burdens. RMB’s findings are corroborated by the Brookings Institution, an American research group which says that for Africa to sustain economic growth rates between 3 to 3.5 per cent, infrastructure spending as a proportion of GDP needs to be between 5 per cent and 6 per cent annually, from its current 2 per cent. Nigeria’s infrastructural spending as a proportion of GDP is currently less than 1 per cent relative to those of Angola, Mauritania, Togo, Gabon and Cote d’Ivoire, each at above 5 per cent . While the need to address the continent’s widening infrastructure gap has become imperative in the light of the importance it wields in promoting investment and stimulating business activities, certain challenges still exist that daunt the realization of the task, of which the non participation of the private sector in driving infrastructure development is a major challenge. Low involvement of the private sector is fuelled by weak legal, regulatory and institutional frameworks; weak

regional power market, as an example of government’s attempt at increasing energy efficiency and security hence reducing electricity costs, the RMB’s “Where to Invest in Africa” report noted that such arrangements are however hampered by logistical and bureaucratic challenges. As a remedy, RMB admonished interested countries in such arrangement to improve their creditworthiness; strengthen contracts; provide guarantees and engage regional institutions in such collaborative efforts. Encouraging investment in the renewable energy sub-sector will equally soften the challenges inherent in accessing electricity and shrink the deficit between electricity provision, distribution and consumption. In South Africa for example, the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) which involves a competitive tender process designed to facilitate private-sector investment into grid-connected renewable-energy generation aims to tap 17,800MW from renewable energy sources. Kenya’s M-KOSA, since the beginning of 2018, has connected over 600,000 homes to affordable solar power. “M-KOPA Solar brings high-quality solar energy to homes in East Africa by using a pay-per-use instalment plan. For a small deposit, the company sells solar systems to consumers who can then purchase daily credits for less than the price of traditional kerosene lighting. After one year of payments, customers own their solar systems outright and can upgrade to more power,” the report emphasises. While stating that soft infrastructures ought to be given the needed attention just like hard infrastructures, the report decried the neglect of soft infrastructure development in Africa and affirmed that the political nature of soft infrastructure and the lack of sufficient financing options are the major challenges the sector faces. RMB called on governments to partner the private sector in improving the standards of soft infrastructures in their respective countries. “These partnerships could range from the planning or managing of soft projects to their actual construction, operating and monitoring,” RMB analysts said. 12734BDN

ignificant strides have been recorded in African infrastructure development since the 2000s, but the shortage is still stark, obstructing African economies from diversifying, and preventing them from realising their full potential. The eight edition of the Rand Merchant Bank’s (RMB) Where to invest in Africa focuses on the need for efficient infrastructure which is key to uncovering opportunities and unlocking Africa’s growth potential. The report came up with rankings for the 53 economies on the continent based on the measurement of the quality of their infrastructure. “The report encapsulates a wide range of investment opportunities on the continent. It highlights opportunities in Nigeria with a specific focus on infrastructure as a catalyst of economic development”, Michael Larbie, CEO RMB Nigeria, said. RMB’s Where to invest in Africa classifies infrastructure into hard – electricity, Information and Communication Technology (ICT), and water and sanitation – and soft infrastructures which encompass health and education. The report uses Africa Development Bank Group’s (AfDB) Africa Infrastructure Development Index (AIDI), which looks at the quality of electricity, ICT, water and sanitation infrastructure, as a proxy for hard infrastructure development. On the other hand, the Human Development Index (HDI) of the United Nations Development Program (UNDP) was adopted as a measurement of the quality of softinfrastructure development. The ranking thus comprises a simple weighted average of the HDI and AIDI with a score of 10 representing the best quality of infrastructure, and 0, the worst. The top 10 best performing economies on the continent on infrastructure quality are a mix between the island economies, Southern Africa and Northern Africa. Seychelles, came top with a score of 8.6 out of 10, bolstered by its “high-quality tourism infrastructure and strong ICT capabilities” – the island economy of Seychelles was also

infrastructure planning and project preparation; ineffective governance; and corruption. Over the last decade, there has been emphasis on infrastructure development shifting from ICT projects to electricity generation and improvements in road infrastructure. This trend, RMB believes, will continue over the medium term, as badly built – or poorly maintained – roads and the unavailability or irregular supply of electricity proves exceedingly costly to businesses operating in Africa. Electricity, for example, is a vital energy infrastructure needed for industrialization and growth. But the level of electrification in Africa has been relatively slow over the years. In 2016, it was estimated that over 600 million Africans have no access to electricity with per-capita power consumption in Sub-Saharan Africa (excluding South Africa) standing at 180kWh compared with 6,500kWh and 13,000kWh in Europe and US respectively. In the Electricity Composite Index developed by Africa Development Bank Group (AfDB), Nigeria was ranked 30th out of the 53 countries in Africa. About 74 million Nigerians, 10 per cent of Sub-Saharan total, do not have access to electricity. To bridge the chasm between demand for and supply of electricity, research analysts at RMB are pushing for the adoption of energy distribution solutions such as the utilization of micro grids. “The Sustainable Energy for All (former UN Secretary-General Ban Ki-moon’s initiative to realise universal energy access, enhance energy efficiency and extend the use of renewable energy) predicted that Africa will be home to 35,000 micro grids by 2021. Micro grids are expected to play a major role in supporting Africa’s electrification drive and adoption of energy storage across the continent in the future”, the report says. More so, the adoption of collaborative approach to boost regional electricity interconnectivity will go a long way to arresting the age-long problem of power in Africa. While citing the West Africa Power Pool (WAPP), a cooperation of 14 countries (including Côte d’Ivoire, Ghana, Nigeria and Senegal) with 27 national electricity utilities working towards an integrated

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Thursday 11 October 2018


Passengers want more information, automation but human touch still important – IATA vs. global 32%). And when there are travel disruptions 40% of all age groups of passengers want to resolve the situation over the phone and 37% via face-to-face interaction.



he International Air Transport Association (IATA) announced the results of its 2018 Global Passenger Survey (GPS), which showed that passengers are looking to new technology to give them more control, information and improve efficiency when they travel. Based on 10,408 responses from 145 countries, the survey provides insight into what passengers would like from their air travel experience. Passengers said that they want: Real time journey information delivered to their personal devices; biometric identification to facilitate their travel processes, automation of more airport processes , wait times of less than 10 minutes at security / immigration, their bags tracked throughout their journey, a human touch when things go wrong and real time journey information. Passengers want to be kept informed throughout their journey preferably via their personal device. Receiving information on flight status (82%), baggage (49%) and waiting time at security / immigration (46%) were identified as passengers’ top three priorities after booking a flight. Real-time baggage tracking throughout the journey was seen as a must for 56% of passengers. Airlines and airports are facilitating this by implementing tracking at major journey points such as loading and unloading (IATA Resolution 753 ). The industry is also working on developing a global readiness plan for the proposed introduction of RFID

Dapo Olumide, CEO, Ropeways Transport Ltd; Lawrence Fubara Anga, partner, Aelex; Simon Tumba, CEO/ Publisher, NTM; Chris Amenechi, VP, Pricing and Revenue Management, COPA Airlines, Panama; Kolawole Ayeye, CEO, GDL at the 2018 NigeriaTravelsMart (NTM) Colloquium, Lagos.

inlays in all baggage tags manufactured after January 2020 in order to meet passenger expectations for real time baggage tracking. Passengers’ preferred option for receiving information on their baggage and other travel elements was via their mobile device. Receiving information via SMS or Smartphone app was preferred by 73% of passengers. Since 2016 there has been a 10% increase in passengers preferring to receive travel information via a smartphone app. Digital is preferred but privacy concerns increase The majority of passengers (65%) are willing to share personal data for expedited security and 45% are willing to replace their passports with biometric identification.

IATA’s One ID project aims to move passengers from curb to gate using a single biometric travel token (fingerprint, face or iris). But concerns over data protection must be addressed. “As we move more and more towards digital processes, passengers need to be confident that their personal data is safe. IATA is working to establish a trust framework that ensures secure data sharing, legal compliance and privacy,” Nick Careen, IATA’s Senior Vice President for Airport, Passenger, Cargo and Security said. The human touch still important Passengers want more self-service options. Automated check-in was preferred by 84% of passengers. Most (47%) prefer to check in online using a smartphone. Only 16% preferred

Dana Air, Radisson Blu partnership excites guests … airline rewards winners of explore Nigeria campaign


ana Air has partnered Radisson Blu Anchorage to offer its guests an exciting package when they fly from any of its destinations – Owerri, Abuja, PortHarcourt and Uyo to its hub in Lagos. According to Kingsley Ezenwa, the Media and Communications Manager of Dana Air, the airline’s guests can now enjoy an amazing weekend getaway at Radisson Blu Anchorage hotel Victoria Island Lagos. “We are pleased to announce our partnership with Radisson Blu Anchorage to offer our guests an exciting total package when they fly from any of our destinations to Lagos.

“The package which is valid till December 31st 2018, comes with very good discount per booking and complimentary breakfast for two, amazing discounts at voyage restaurant and Spa.’’ Ezenwa noted that the airline had to enter into a partnership with another brand reputed for its world-class services just to offer its guests a whole new getaway experience and the feeling that comes with flying the smartest way. “This is what is expected of a smart airline anywhere in the world. Guests should be able to book and get other value-added services based on the customercentric partnerships of the airline. These packages or benefits could

come in form of cab services, hotel booking or shopping deals. Interested passengers are expected to provide Dana Air boarding passes of recent trips at least 48 hours to making their reservation or send a mail reservation to the required email addresses. Also speaking at the min-event in Lagos, Chibuike Ememta, a Dana Air passenger, said, this is sure an exciting time for us as loyal guests of Dana Air. Before now, you fly into Lagos and begin to search for a hotel but with this partnership, you can arrange your gateway ahead and relax. More exciting is the fact that it extends till December.’’ Meanwhile, Dana Air has rewarded the winners of its explore Nigeria campaign across Nigeria. The campaign which entails youths between 18-30 to do a video and market Nigeria’s tourist attractions at their various locations across Nigeria was in collaboration with Kinabuti, the producers of Dare2dream; a Dana Air sponsored youth empowerment and reality TV initiative. Dana Air is expected sponsor the trips of the winners to the various destinations of their choice.

traditional check-in. Some 70% of passengers want self-service baggage check-in. Only one in three travellers prefers an agent to tag their bag. The electronic bag tag is growing in popularity - favoured by 39% of passengers (up 8 percentage points from 2017). The overall experience with automated immigration procedures was rated favourably by 74% of passengers. A similar percentage (72%) believes that automated immigration processes are faster and 65% believe they enhance security. The human touch is still preferred by some market segments and for certain situations. For example, senior travellers (65 years and older) have a strong preference for traditional check-in (25% vs. global 17%) and bag-drop processes (42%

Consistent shopping experience Some 43% of passengers prefer to use a travel agency, travel management company or corporate travel department to book their flights. IATA’s Airline New Distribution Capability (NDC) is playing a transformational role in evolving the customer air travel shopping experience and closing the content gap between airline websites and travel agent systems through use of a modern (internet) data transmission standard for communications between airlines and travel agents. NDC will enable airlines to display and sell all of their products in the travel agent channel, including options to allow passengers to personalize their journey around their needs. Passenger pain points Passengers identified airport security / border control and boarding processes as two of their biggest pain points when travelling. The top frustrations with security were the intrusiveness of having to remove personal items (57%) the removal of laptops / large electronic devices from cabin bags (48%) and the lack of consistency in screening procedures at different airports (41%). To improve the boarding experience, the top three desires of passengers are more efficient queuing at boarding gates (64%), the availability of overhead space on the aircraft (42%), and not having to queue on the air bridge (33%).

Akwaaba Travel Market partners ADWT for Africa diaspora tourism event in 2019


frica and it’s Diaspora has had a very strange relationship over the years. They need each other in a complimentary way but have not yet worked out how to relate. Tourism could be the sure way to build a sustainable relationship. To help give this a boost, the organisers of Akwaaba African Travel Market have decided to collaborate with US based Africa Diaspora Awards to organise a conference of Africa- Africa Diaspora Tourism Conference. The conference will take place on the 23rd of September 2019 as part of the 15th Akwaaba African Travel Market in Lagos. Kitty Pope, the executive director of Africa Diaspora Awards said “I am so excited to be a part of this project and 2019 marks the 400 years of the Trans-Atlantic slave Trade. This event finally reconnect Africa and it’s Diaspora in the right way through Travel and Tourism.” Ikechi Uko the organiser of Akwaaba African Travel Market in his response said “we organised Africa Travel 100 Women Award in 2017 and women in Tourism groups in Africa took off and in 2018 we organised the Africa Travel 100 Awards for Tour Operators and organised the

first African Tour Operators Summit and this event of Africa Travel 100 global Personalities will finally bring together all the major players in Africa and the Diaspora. “This collaboration with Kitty Pope and her organization will help energize Collaborations across the seas. “AKWAABA Travel Market has grown to become the most important African Tourism marketing platform in the West Africa drawing attendance from numerous visitors from over 20 Countries. “This Travel Fair not only boasts a large amount of visitors but also excels in the promotion of the Exhibitors from the region’s leading Hotels, Airlines, Travel Agents, Tour Operators and similar industry Suppliers that participates in the Event. AKWAABA partners with various African nations and tourism boards to showcase Africa as a choice destination. African Diaspora Tourism is a public relations company with the website AfricanDiasporaTourism. com that is dedicated to promoting the cultural heritage of people of African descent living in the African Diaspora in order to promote tourism to sites, events and other phenomenon related to black cultural heritage and history.


Thursday 11 October 2018



Kano flood victims cry for help ADEOLA AJAKAIYE, Kano


ictims of recent flood disaster in Rimin Gado local government area of Kano State have cried out over lack of support from the state and federal government. According to the victims, they are yet to receive any assistance from two levels of government since flood ravaged their communities in August. One of the victims, Aminu Lawan who lost a house to the flood, said there had been no support to him and other victims. “We heard that Kano State government has released the sum of N100 million to support flood victims in the state, but up until now nothing has been given to us. “The most disturbing issue is that the State Emergency Relief and Rehabilitation Agency had taken our names and the losses we suffered from the disaster but nothing is forthcoming,” he said. Another victim who simply gave his name as Malam Bala lamented that majority of the flood victims were currently squatting with relations and friends. “A number of the flood victims in this area are either living with friends or relations because their houses have been destroyed by the flood,” he said. He urged the government to ensure prompt release of the money it approved to support the flood victims, to alleviate their sufferings. However, when contacted, the executive secretary of the State Emergency Relief and Rehabilitation Agency (SERERA), Ali Bashir said the agency was making effort to assist the victims. “We are making necessary preparations to assist the victims and as soon as we finish the preparations, we will tell you,” Bashir said. Also commenting on the issue, the NEMA head of operations in Kano, Nura Abdullahi said the agency had submitted its report to its headquarters in Abuja. He assured that the agency would soon commence distribution of relief materials to flood victims in the affected areas. The state government had on September 17, confirmed the death of 31 people and destruction of 10, 000 houses by flood in 15 local areas of the state. The government said it had approved the release of N100 million as interim support to flood victims in the state.

Accidents claim 32 lives in Edo — FRSC


do State command of the Federal Road Safety Corps (FRSC) says it recorded 32 deaths in road crashes across the state between July and September. The sector commander, Anthony Oko, made the disclosure in Benin on Tuesday. Oko said that the the figure comprised 28 males and four females resulted from the 50 road crashes recorded within the period under review. According to him, 16 of the 50 cases fatal, 32 serious while two were minor cases. He also said that 147 persons were reportedly injured in the crashes that involved 481 persons, with 179 as total casualties within the period. The sector commander listed speed violation, brake failure, mechanical deficiency and loss of control as major causes of the crashes. Oko advised motorists to always drive within approved speed limit and also ensure that their vehicles were road worthy. He also advised against unnecessary and dangerous overtaking and excessive speed that could lead to loss of control. He further advised parents against allowing their teenage and young children without driving experience and license to drive. He noted that such actions exposed the children to dangers on the road.

Godwin Ehigiamusoe (3rd r), MD/ CEO, LAPO Microfinance Bank, presenting the overall best student award to Stella Eneke, at the 2018 LAPO Scholarship and Skills Acquisition Awards recently.

How female lawyer killed, mutilated hubby’s body – witnesses


friend and two siblings of the 50-year-old lawyer, Symphorosa Otike-Odibi, who was alleged, stabbed to death by his wife, Udeme Otike-Odibi, have narrated to the court how they found Symphorosa’s corpse on his matrimonial bed with his genitals and intestines cut off. Udeme, a 48-year-old lawyer, was on June 13, arraigned by the Lagos State government on a two-count charge of murder and misconduct with regard to a corpse before an Igbosere High Court in Lagos. She pleaded not guilty and was remanded in Kirikiri prison. At the resumed hearing of the case on Monday, Symphorosa’s friend and neighbour, Stanley Grange-Koko, was led in evidence by Adeniji Kazeem, the attorney-general of Lagos State, He told the court how the deceased’s younger sister, Anwuli Akwukwuma, called him at 2.00am on May 2, to go to the deceased’s (Symphorosa) house and check what was happening. Grange-Koko said he rushed out of his car but could not gain access to the compound because no one answered when he knocked the gate and called out the deceased’s name severally. Grange-Koko said he went back to his house but rushed back to the deceased’s house the second time when Akwukwuma called him back. “Akwukwuma called me back and said I

should go back to the deceased house because it seems life is involved. “At this point, I went with my wife, also called the estate security men, we had to climb the fence into the deceased compound. We also broke down the front door to gain access to the house because no one answered our several knocks,” he said. Grange-Koko said that he ran upstairs and saw blood on the floor, adding that he followed the blood trail to the bathroom and to the deceased room. He said both him and the security men had to break the door to the deceased’s room. “I saw the deceased lying on his bed with his wife (the defendant) lying beside him and there was blood everywhere. “The deceased intestines were outside, I ran out and met the deceased sister coming up to the room, I tried to stop her from entering the room but she ran past me and entered,” Grange-Koko said. He said the deceased sister ran out of the room shouting that her brother was dead but the defendant was breathing. Grange-Koko said the defendant was however taken to hospital for further valuation. After Grange-Koko’s evidence, the second witness, Akwukwuma was called. She narrated exactly what Grange-Koko had told the court but added that she called Grange-Koko because he was living in the same estate with the deceased and was a family friend to the deceased.

Akwukwuma also added that she got the information about the problem through her mother whom the deceased called earlier to complain that his wife was hitting him and had a knife. She added “when I got to the deceased house and saw him lying on his bed with his intestines out, I checked him and saw that he was already cold and stretched out. I noticed that he had died for hours and he was holding something in his arm but I couldn’t see what it was because he was already stiff. “The police told me that it was his genitals that he was holding and asked me if there was another person in the room when I got there, I answered no,” Akwukwuma narrated. The prosecutor also called a third witness, a younger brother to the deceased, Andrew Otike-Odibi, who narrated the same story. After listening to the three witnesses, Justice Adedayo Akintoye adjourned further hearing until October 10, 2018. The prosecutor had during arraignment told the court that the Udeme committed the offences on May 3, at Diamond Estate, Sangotedo, Lekki, Lagos. He said that Udeme stabbed her husband and mutilated his corpse by cutting his genitals. The offences contravened Sections 165 (b) and 223 of the Criminal Law of Lagos State, 2015. Section 165 (b) provides five years imprisonment while Section 223 stipulates death penalty for offenders. NAN

15 prisoners get amnesty in Oyo AKINREMI FEYISIPO, Ibadan


ifteen prison inmates in Oyo State can look to some reprieve following the decision of the state governor, Abiola Ajimobi to grant them amnesty. The inmates are currently serving various jail terms in different prisons in Oyo. Eleven of the inmates will enjoy either outright release or reduction in sentence terms while four are to have their death sentences commuted to life imprisonment.

According to Oluseun Abimbola, the commissioner for justice and attorney general of Oyo State, the governor, in exercise of his powers under section 212 of the 1999 constitution granted the amnesty on the recommendation of the State Advisory Council on the Prerogative of Mercy headed by the attorney general, as part of the events commemorating Nigeria’s 58th independence anniversary. The attorney general appreciated the gesture of the governor. He expressed the hope and expectation of the state government that those

to be released would by reason of the good behavior that qualified them for consideration for amnesty, reciprocate with continuing good behaviour as they reintegrate into society. “We expect them to transform to become upstanding members of society, as they would have learnt useful lessons from their time of incarceration to know that crime does not pay. “The exercise of the prerogative of mercy by the governor is a constitutional exercise carefully and responsibly reviewed to ensure the exercise retains its credibility,” Abimbola said.



Thursday 11 October 2018

Thursday 11 October 2018





FBN Nigeria Eurobond offering competitive returns to investors

Pg. 18


Quickteller removes transaction cost for online bill payments JUMOKE AKIYODE-LAWANSON


nterswitch Financial Inclusion Services (IFIS), trading as Quickteller Paypoint, has announced partnerships with key billers in various sectors (Betting, Energy and Electricity, Cable) companies that will enable customers transacting on its platform to conduct financial transactions at no charge. Transactions that will enjoy this new benefit include: utility bill payments, betting, wallet funding, and cable TV subscription. Before now, customers were required to pay a fee of N100 on each payment transaction, Quickteller has now paired with some of the organisation’s biller partners to bear the transaction cost. As a result, customers can now make most of their transactions at no additional cost to them. While this takes off the burden of transaction fees from the customers, the company says it has been carefully

processed to safeguard Quickteller Paypoint agents, such that they are able to retain their customary commission and other incentives. Titilayo Shogaolu, divisional chief executive officer (DCEO) of Interswitch Financial Inclusion Service, said: “At Interswitch Financial Inclusion Service, we are not only committed to closing the financial exclusion gap, we are continuously working to provide convenient services that will enhance the adoption of digital payments and this latest incentive is just one of the many ways through which we are achieving this”. Quickteller Paypoint is a one-stop service that provides electronic payment solutions to the under-banked, through agents who earn exciting commissions and other incentives. The over 16,000 agents, who are spread across the country offer various financial services to customers, such as: bill payment, funds transfer, cash deposits, cash withdrawals, and airtime top-up. The list of the billers

L-R: Muda Yusuf, director-general, Lagos Chamber of Commerce and Industry (LCCI); Toki Mabogunje, deputy president, (LCCI); Olajumoke Fashanu, chairperson, LCCI Women Group; Waqar Ahmed Kingravi, high commissioner of Pakistan to Nigeria, and Saratou Adeoti Kabassi, honorary cosul, honorary consulate of Islamic Republic of Pakistan in Benin, at the business to business meeting with the business delegation from Pakistan pharmaceutical, surgical equipment and manufacturers, organised by LCCI in Lagos. Pic by Olawale Amoo.

that Quickteller Paypoint is partnering with to deliver this value service includes: Eko Electricity Distribution Company (EKEDP), Abuja Electricity Distribution Com-

Dangote urges deepening of African economy through free trade


oremost businessman, Aliko Dangote has in London called for conscious efforts at deepening African regional market by African investors and governments to aid rapid growth and development of the Continent’s economy. Speaking during an interview at the on-going 5th annual Financial Times African Summit, the Nigerian entrepreneur said the key to Africa’s economic growth and strength is in the development of the regional market, saying “Regional markets in Africa must work.” Dangote said Africans must patronize African markets which is why the free trade agreements by African nations is the direc-

tion to go to strengthen African markets. Citing an instance of his own experience, the president of Dangote group referred to the case of neighbouring Benin Republic where the country continues to import cement from China while his Nigerian factory is only 35 miles away from the border. “We need to trade with ourselves”, Dangote stated as he spoke glowingly about the prospect of African economy, the free trade agreement and the availability of huge raw materials to attract investors. Asked about when the much touted listing of Dangote cement on the London Stock Exchange, he told his audience comprising of investors, business magnates,

captains of Industry and African Heads of Government which included President Akufo-Addo of Ghana and Ali Bongo of Gabon, that the listing might happened in 2019. According to him, all hands are on deck to complete the process of listing, the development which he said is being looked towards for by the business community. Prompted by the Editor of the Newspaper, Lionel Barber to speak about difficult markets like Tanzania and Ethiopia, Dangote dismissed the issue difficulty and re-affirmed “our aim is to always provide jobs and worth. As an African investor I don’t want any investor anywhere in Africa to have a bad experience.”

FBNInsurance names Festus Izevbizua executive director


BNInsurance has announced the appointment of Festus Izevbizua as executive director, Finance and Administration in the Company, and this has been approved by the National Insurance Commission (NAICOM) Izevbizua’s career started at the prestigious Deloitte Akintola Williams and Co. in 1991 where he was exposed to the basics of Accounting, Auditing and Risk Management. After a five-year stint at Deloitte Akintola Williams, he

joined the banking industry and went on to have a glowing career for over 18 years spanning leading banks including Diamond Bank, United Bank for Africa and Standard Chartered Bank where he was Finance Operational Risk Manager and later Financial Controller before joining FBNInsurance as chief financial officer in 2014. Festus has almost three decades’ experience in Banking, Operational Risk Management, Oil and Gas, Accounting, Tax Matters and International Finance. He

is a distinguished Fellow of the Institute of Chartered Accountants of Nigeria (ICAN), an Associate Member of the Nigerian Institute of Management (NIM) and a Senior member of the Chartered Insurance Institute of Nigeria (CIIN). He holds a Bachelor’s degree in Economics from the University of Benin and an MSc in Finance from the University of Calabar. He is also an Alumnus of Colombia Business School, New York and a Fellow of the Institute of Credit Administration (ICA).

pany (AEDC), Enugu Electricity Distribution Company (EEDC), Jos Electricity Distribution Company (JEDC), WAKABET, BETWAY, Kwese, Ariaria Market Energy Solu-

tions Limited, Rensource and Zola Electric. Shogaolu also spoke on the future plans of Quickteller. She said: “Quickteller Paypoint is not stopping at this. We

are working hard to secure more of such deals in order to deliver better value to our customers, and more profit to our valued agents”

DHL Express awarded most Top Employer certifications on the continent


HL Express has been recognised as a Top Employer in Africa for the fifth consecutive year, at the prestigious Top Employer Africa 2019 certification ceremony, held at the Sandton Convention Centre in Johannesburg Hennie Heymans, CEO, DHL Express Sub-Saharan Africa said that receiving this recognition from the Top Employers Institute for the fifth consecutive year is a huge honour. “At DHL Express we value our employees and constantly strive to ensure they know how much their work matters. We also want them to feel proud to be part of the global DHL team. We couldn’t be happier to have that fact affirmed by the Top Employers Institute.” DHL received 22 certifications in 21 countries across Sub-Saharan Africa this year, including the coveted Intercontinental Award for having the most Top Employer certifications in the continent. Countries for which certifications were received include Angola, Botswana, Cameroon, Cote d’Ivoire, Democratic Republic of Congo, Ethiopia, Gambia, Ghana, Kenya, Madagascar, Mauri-

tius, Mozambique, Morocco, Namibia, Nigeria, Senegal, South Africa, Tanzania, Uganda, Zambia and Zimbabwe. “We attribute this notable achievement to our customer-centric culture adopted across the entire organization, this is without a doubt central to our success. Effective employee engagement programs are integral to maintaining this culture across the globe as it is the people within our business that ensure this culture carries across to our customers,” said Heymans. “Our focus areas remain entrenched in employee motivation and development as this approach has proven to be beneficial to both us and our employees. We operate in a high performance environment and we encourage this culture among our teams as it promotes and drives leadership diversity.” According to Heymans, DHL’s use of employee initiatives and programs, including the company’s Certified International Specialist (CIS) cultural change program has helped to unlock the potential of the company’s employees across Sub-Saharan Africa. “We made the decision a year ago to put an emphasis on

up-skilling and empowering our middle-managers and supervisors as this rung of leadership is crucial to leading our growth drive in the coming years. We count on our middle-managers to garner trust and inspire unsurpassed performance during our growth cycle. The employee initiatives we implement are critical to ensuring that everyone fully understands their role within the business and how to most effectively execute their responsibilities.” DHL also recently completed the annual Employee Opinion Survey, which provides an anonymous platform for personnel to express their opinions about the company. “This is a valuable tool that assists us in identifying what we are doing right, as well as what we need to improve,” added Heymans. Another layer of our employee program is our Employee of the Quarter and Employee of the Year awards which we present to our star performers nominated by fellow employees. “Our network is only as strong as it is because of our incredible people. We believe that no value can be placed on strategic planning and program implementation in this regard.”





Wednesday 11 October 2018

Business Event

FBN Nigeria Eurobond offering competitive returns to investors SEYI JOHN SALAU


he Nigerian investment market is rich and viable, with the money market yields relatively high and quite attractive compared to global interest rates. There has never been a better time for Nigerians, as well as foreign investors, to tap into the strength of the Nigerian investment story. The bonds market is on a strong growth course, equities have a strong long-term potential, and investment options are attractive for offshore investors. If you are looking for new ways to invest your US Dollars (USD) in the ever-changing economic environment, the FBN Nigeria Eurobond (USD) Fund is a credible option. The Fund is Nigeria’s first US dollar denominated mutual fund, invests in Eurobonds (USD denominated debt instruments) issued by Nigerian Sovereign and Corporates.

The Fund generates income as well as capital appreciation, so customers can invest their USD directly and expect to receive attractive returns in the same currency as their initial investment. The FBN Nigeria Eurobond (USD) Fund delivers strong and consistent performance, recording returns of 7.0 percent in its first year and 12.2 percent in its second year. The total return of the fund from inception in January 2016 to 20th of September 2018 is 24.6 percent in dollars. This simply means that USD invested in the FBN Nigeria Eurobond Fund has returned positive growth in that time period, which the investors have enjoyed. With a minimum requirement of only $ 2,500, an individual or corporate can invest through the fund in a broad range of Eurobond instruments which typically would require a minimum investment of $200,000. The FBN Nigeria Eurobond (USD)

Fund also provides a hedge against foreign exchange risk, and supports investors’ objectives to maintain portfolios across currencies. Ike Onyia, managing director, FBNQuest Asset Management, revealed that the Fund provides diversification benefits, as the portfolio invests in Eurobonds from different issuers which reduces risk. According to him, “when you compare the returns on this Fund with returns on an offshore savings/checking account or USD domiciliary account, you will find that the FBN Nigeria Eurobond (USD) Fund offers competitive returns. He further emphasized that the Fund is also not only for individual investors, but is open to corporate organizations’ who have USD liabilities and are looking for dollar investments that can offer competitive returns. Corporate organisations can subscribe to this Fund with a minimum amount of $100,000.

Mypatricia.Com commits to improved e-commerce customers experience KELECHI EWUZIE

M, an ecommerce platform that trade unused iTunes, Amazon and google play gift cards says it is committed to providing solutions for various e-commerce customers. Fejiro Hanu Agbodje, chief executive officer, Mypatricia. com says the information and communications technology firm ensures that customers get credited in less than ten minutes adding that such feat has seen the one year company boast of over a thousand daily transactions. Agbodje observes that the best way to grow the Nigerian e-commerce sector is embedded in one word trust adding that you need to create trust in your potential customers, and

give them assurance. The innovative service allows individuals to swap gift cards for cash while also giving them the opportunity to send gift items to loved ones in the United Kingdom, United States of America, Canada and some selected African and European countries. The ICT company, which recently opened an online luxury clothing store Rooom19, has been described by industry watchers as one of the fastest growing e-commerce firms in Nigeria and Africa. Speaking at the launch of the new service in Lagos, Agbodje, said they would continue to do things different, question the norms, come up with innovations tailored to make life easier for Nigerians through technology.

He said, “At Patricia we will change the world but if we are to succeed we have to change how online businesses are perceived in Nigeria, Simply put, Our Vision is to make the E-commerce system safe for all; to offer peace of mind to “MAN” while doing business with Patricia.” The chief executive officer of further opines that the major challenge face getting Nigerians to do business online is the issue of trust. “Next I would say operations from electricity, internet, human factor and lots more. They can be quite challenging, but we get the job done regardless”, Agbodje said. The e-commerce company says in 5 years time, it will be world leaders and simply put world domination in every facet of their operations.

R-L: Umma Aboki, executive secretary, Kaduna Investment Promotion Agency (KADIPA); Nasir El-Rufai, executive governor, Kaduna State; Andrew Mashanda, executive director, corporate and transactional banking, Stanbic IBTC Bank, and Ayodele Ojosipe, head, enterprise banking, Stanbic IBTC Bank, at the official commissioning of the Kaduna Stanbic-IBTC Entrepreneurship Centre (KADSEC) recently

L-R: Ayo Adegboye. managing director, BCX; Dotun Arifalo, CEO, Leading Ladies Foundation; Ibun Luyide, one of the contestant; Niyi Ajao, executive director, business development, Nigeria Interbank Settlement Systems (NIBSS); Christabel Onyejekwe, xecutive director, technology and operations, NIBSS; Ogboye Godwin, Opeyemi Akinwoleola and Noha Adam-Sadiq of HIS,all team winners of the 2018 NIBSS HACKATHON during the pitch and awards presentation in Lagos.

L-R: Oluseye Odunsi, zonal business manager, West Central, Airtel Nigeria; HRM Oba Enitan Adeyeye Ogunwusi, Ooni of Ife and Femi Oshinlaja, regional operations director, West, Airtel Nigeria during the presentation of Airtel souvenir to the Ooni at his palace in Ile-Ife, Osun State following Airtel sponsorship of Olojo Festival 2018. 

Chartered Arbitrators to discuss mode of enforcing arbitral awards at annual conference


n continuation of her mandate to facilitate and promote the administration and development of Arbitration and other Alternative Dispute Resolution (ADR) practices in Nigeria, Nigerian Institute of Chartered Arbitrators has announced its 2018 Annual Conference to be held in Lagos. Speaking about the event, Shola Oshodi-John, registrar/ CEO of the Institute stated that the conference is specially designed to provide an opportunity for business owners, legal practitioners and other professionals to discuss the current mode of enforcing

arbitral awards and its impact in the economy of West Africa. More specifically, the conference will serve as a platform for positioning WestAfrica as a preferred seat for arbitration proceedings and also ameliorating the drawbacks associated with delay in enforcement of arbitral awards, she said. The conference will hold under the distinguished Chairmanship of Afe Babalola, SAN, OFR,CON,FNIALS, on October 24 & 25 2018 at Oriental Hotels, Lagos. On the theme of this year’s conference “Enforcement of Arbitral Awards and Eco-

nomic Growth in West Africa”, Oshodi-John said that the recent judicial decisions on arbitration related proceedings and awards presents a very disturbing trend that is unfavourable and producing negative impact on the economic viability and growth of WestAfrica’s Economy. This trend places Arbitration and other ADR mechanism on a balance as most awards become subject of litigation in courts. Parties and practitioners are largely disadvantaged by this development and as such, the need to charting a path to address these challenges.

Marvin Abe, managing director of Apapa Bulk Terminal Ltd (ABTL) (l), with Hadiza Bala-Usman, managing director of Nigerian Ports Authority (NPA), during the International Association of Ports and Harbous (IAPH) Regional Conference in Abuja, recently.








Broadband Infrastructure

Bank IT Security


Thursday 11 October 2018


The making of Andela’s first set of developers FRANK ELEANYA


rom the outside, Andela may look like a business run by millennials for millennials, but it is everything more. Inside, Andela has become a culture, a way of life for the more than 65,000 young Africa talents desiring to make their mark in the world of software technology. Recently, the company launched its first set of developers that has successfully completed their four years fellowship. The company which has an ambition to bridge the software talent gap in Africa by training and equipping more than 100,000 people opened its doors to the first set of developers in 2014. “On 21 May, 2014, I took a one-way flight from Torino down to Nigeria,” Nadayar Enegesi, one of the six founders of Andela who was responsible for training the first developers told BusinessDay during a visit to the Epic Towers, headquarters of the company in Nigeria. The building used to be the corporate headquarters of Deloitte Nigeria but a transformation has taken place since Andela moved in. Aside from a 21st century workspace refurbishment that’s the dream

of any employee, hundreds of aspiring developers with laptops move in and out of the building on one Andela assignment or the other. Sitting in one of the private offices, Enegesi recalled the establishment of Andela. It is similar to the story Iyinoluwa Aboyeji, a cofounder and currently the CEO of Flutterwave, wrote in a Medium article. Three founders of the company, Iyinoluwa Aboyeji, Brice Nkengsa and Enegesi connected as students in the University of Waterloo. They agreed to start a distance learning company called Fora together. Enegesi later met Ian Carnevale another co-founder and introduced him to Aboyeji and Nkengsi who accepted him as part of the team. Jeremy Johnson and Christina Sass the remaining two founders met separately and actually came up with the idea of starting a software engineering school for young Africans. Johnson shared the idea with Aboyeji, Nkengsa, Enegesi and Carnevale who embraced it immediately. A company was formed. “He started talking about what if we just built software engineers in Africa that will be a more effective model than what we were currently doing. By the end of it, we

bought into the idea and said ‘let’s test it out’. We tested it out and it was clear that it was going to work out,” Enegesi told BusinessDay. The choice of Nigeria as the birthplace of Andela was an easy one at the time. “If you look at that founding team, two Americans, one Canadian, one Cameroonian, two Nigerians, if you also look at the demographics, Nigeria has the largest youth population on the continent. If the belief that we are operating by is that the brilliance should be evenly distributed, we have to go to a place where there is a lot of people; you

Ericsson, Turkcell win innovation award at telecoms world Middle East CALEB OJEWALE


ricsson and Turkcell have won the telecoms world Middle East 2018 award for innovation, for their work on the Smart Irrigation Hydrant solution in use by the Turkish digital operator. As a long-term partner and R&D collaborator, Ericsson has said it is helping Turkcell create a future-proof, technology agnostic network. Integrated into tradition-

al irrigation systems, Smart Irrigation Hydrant technology enables remote valve ON/OFF, controls water consumption index value and issues warnings to users and suppliers if usage exceeds the pre-set water consumption value. In a press statement made available to BusinessDay, it was noted that Ericsson and Turkcell have been testing the applications of Narrow Band IoT in LTE network since 2017

with the contributions of their own engineers and local business partners. By using Narrowband IoT on existing LTE infrastructure - wide area coverage, low power consumption and secure connections are accomplished. The two companies have jointly developed and deployed several innovative solutions including but not limited to a Smart Parking Lot solution and indoor gigabit connectivity with the deployment of the Ericsson Radio Dot System. Additionally, Turkcell subscribers attending one of Turkey’s best-known arenas – the Ülker Sports Arena in Istanbul - are getting better data user experiences thanks to the implementation of Ericsson Elastic Radio Access Network (Elastic-RAN).

have a higher chance of finding brilliance there. That is one of the reasons why we picked Nigeria. The second main reason is; to operate in a country you have to pick a place where you have people that are familiar with the environment. We had two Nigerians on the team,” he said. Today, Andela has expanded to countries like Uganda, Kenya and Kigali. The search for its first cohort of developers was hinged on three considerations namely grit and persistence; technical aptitude and the ability to learn quickly; and a burning

desire to make the world a better place. “They applied online, we reviewed their applications and we brought them in for in-person interviews where we talked about what they will like to achieve in the world, what sort of experience they had exploring software engineering, what kind of things they have done to honour the desire to be technologists. After that we selected about 20 of them into a bootcamp program. The purpose of the two weeks bootcamp was to observe how quickly they were going to learn in these two weeks while

building real applications in teams. Apart from that what we also looked out for was how they worked with each other in teams because the softer and professional skills at the end of the day will distinguish a rich engineer from a great one. It was from that point we selected the six who went on to be our first cohort,” he said. Six developers began the fellowship, only three made it to the finished. Enegesi noted that it was true with everything in life. People could start a journey and later discover they had other ideas to pursue or some are unable to cope with the pace. “Regardless, we are still super grateful to all six of those, people because not only did they believe in something that was so new and different like Andela, but they dared to believe in themselves and all of them are doing pretty well for themselves right now,” he said. Over 120 global companies are plugged into the Andela developers program. With more knocking on their door, Andela said it is in high need of senior developer instructors to help the young African talents passing through its channel become the best in the world.

Nokia 6.1 Plus released in Nigerian market


he Nokia 6.1 Plus has been unveiled in Nigeria, featuring smart storytelling features and a display that has been described by HMD as “perfect for watching videos, messaging friends and catching up on social feeds.” According to HMD, the phone’s manufacturer, the Nokia 6.1 Plus gives a bigger screen experience without a bigger smartphone design thanks to its notched 19:9 screen ratio. Its 5.8-inch Full HD+ 19:9 screen ratio with 96% colour gamut allows for a vivid viewing experience, making the Nokia 6.1 Plus an ideal device for enjoying immersive content experiences. Olumide Balogun, Head of Marketing, HMD Global, said, “Early this year, we

introduced some devices and our fans around the world made it very clear that they wanted to see more of the same from us. This excitement for cutting-edge smartphones with contemporary designs prompted us to introduce a device using the same formula. We are launching the Nokia 6.1 Plus because you asked for it and we’re excited to continue delivering the first-class experiences and quality expected

Team: Frank Eleanya,; Caleb Ojewale,

from a Nokia smartphone.” The Nokia 6 Plus is powered by the latest Qualcomm® Snapdragon™ 636 Mobile Platform, said to be 40 percent faster than the previous versions, which makes it great for streaming and gaming. The platform delivers first-class graphics and gaming performance alongside battery efficiency enhancements, making it possible for users to enjoy audio and video for even longer. By shipping with Android Oreo™ out of the box, users will be able to enjoy the latest features, including Google Lens, picture-in-picture for multitasking, Google Play Instant to discover and run apps with minimal friction, and battery-saving features like limiting background app use. It is also ready for Android Pie.



Thursday 11 October 2018

Thursday 11 October 2018



INTERVIEW ‘We are telling oil, gas firms that WAV has no right to use vessels belonging to STG’


CHAD GRIFFIN was in 2017 appointed the liquidator of Sea Trucks Group Limited, an oil and gas services firm. Griffin is a partner in FTI Consulting, a global business advisory firm, and is a specialist in restructuring and insolvency work. In this interview with FRANK UZUEGBUNAM, editor, Businessday West Africa Energy Intelligence, Griffin takes us through the controversies, intricate and interwoven relationship between Sea Trucks Group and West African Ventures and its possible impact on how Nigeria is perceived out there. Excerpts:


ow did you first get involve with Sea Trucks Group? I first got involved with Sea Trucks Group (STG) in May 2017 when the bondholders’ lawyers contacted me because there was a real issue in discussions between Sea Trucks, the bondholders owed money by Sea Trucks, Jacobus Roomans and West African Ventures (WAV). At that time, independent directors had been appointed over Sea Trucks and had been attempting to improve corporate governance and put in place an arms-length arrangement between Sea Trucks and WAV. Their relationship had deteriorated and there was a very real fear that actions would be taken, which were not in Sea Trucks’ creditors’ interest. My role was to protect the assets of STG, Sea Trucks’ parent company, from interference by Roomans, because there was a fear that the independent directors were going to be replaced by Roomans, rewinding some of the perceived improvements that have been made. I entered was appointed a liquidator on June 12, 2017 by the British Virgin Island (BVI) Court because BVI was the jurisdiction of incorporation for STG. What is the relationship between WAV and STG? Historically, WAV operated STG’s vessels by bare boat charters. For many years that worked fine. STG was owned by Roomans and WAV was also owned by him. So, it was the left hand talking to the right hand. When the bond was raised, that was just for STG, it was not for WAV. So, there was a situation where $575 million was borrowed by STG, and WAV operated the vessels under charters, with WAV acknowledging the rights of the bondholders over the vessels, when they granted them certain powers of attorney. When we talk about corporate governance, we are talking about things like vessels being moved from STG to WAV, cash being moved from STG to WAV and cash being moved the other way around; lack of appropriate control and ring-fencing, which led to the desire by bondholders to start recognizing that there are different interests. So, there were creditors on one side and WAV with no debt on the other side and you needed to have normal arm length arrangements in order to protect the interests of STG’s creditors. That could have been entirely possible if WAV have been willing to pay for the vessels and there could have been harmony. Unfortunately, they did not do that. We have not received a single dollar since the liquidation. It has been 15 months; the vessels have been in Nigeria and many of them being operated and we have not received a single dollar. There is evidence of poor corporate governance and poor practices. This led to a lack of accountability for the assets of Sea Trucks. The worst of that was the ship building project where the price of the ship was inflated to $90 million as a consequence of a “consultancy” cost. We know from the evidence reviewed that there was no such consultancy service provided. We have a job to recover that money as well. The current situation is that all those bare boat charters between STG and WAV have been terminated. We have really no contractual relationship between Sea Trucks and WAV any longer that would allow WAV to continue to use the vessels; the vessels are registered and belong to STG, and are mostly mortgaged to the bondholders, but WAV physically has control of them. We have demanded they be returned, in accordance with the terms of the

charters, but WAV has refused. There is now no relationship that allows WAV to use these vessels, in the midst of the current legal fight to recover the properties The relationship falls into three phases: before when things were good; then when things started turning bad because of the economy and the oil price crash and when Sea Trucks’ creditors made clear their desire to regularise arrangements, and then when that proved impossible, the current situation where contractual relationships have been terminated and WAV do not have the right to use the vessels. For me, it is a bit intricate trying to understand this relationship. Roomans owns both WAV and STG? You are right, it is a bit complex. Just to make it more complicated, his STG shares were moved into a Trust and his family members are beneficiaries of the Trust as I understand it. So, it is not him personally, it is the Trust to all intent and purpose. What really went wrong? The main reason was probably the drop in oil price. It was difficult for everyone in the industry. I have worked on the restructuring of many oil and gas companies, offshore marine companies, DSV, OSV, CSV, you name it. Most of them borrowed money at the top of the market and when the oil price dropped, they pretty much owed too much debt, which meant that most of them had to be restructured. In these cases, the debt was restructured; the debt was pushed out, in some cases the debt was reduced, and the companies continued to operate. That probably should have happened here, but the reason it did not in my view was because of actions taken by Roomans such as ignoring contracts and matters such as legal ownership of assets, and ignoring bondholder security over Sea Trucks cash, and increasingly taking hostile action in his own personal interest and not the interests of creditors and bondholders.    And that led to the unfortunate event

of liquidation and points to why I think a restructuring did not happen. I think the starting point was probably a general market phenomenon but then in this particular case, the reason there has not been restructuring in a better way is because of Roomans personal actions and the resulting break down in trust with the bondholders.

(“J”) 2, J3, J8, J9, J11, J12, J20, J23, J24, J26, J27, J33, J39, J40, J45, J51, J52, J53, J55, J57, J60, J61, J62, J63, J64, J65, J67, J68, J69, WALVIS 1 and WALVIS 5 (collectively the OOIM Vessels) and the dynamic-positioning vessel, J30 which we are trying to recover. We are also taking action to recover the amounts relating to the misconduct we discussed earlier.

You mentioned that some these problems arose because of the dip in oil prices but we are heading to $100 once again Yes, and that is the sad thing. Now we have a situation where the oil prices are recovering. Nigeria has a lot of developmental opportunities. There is work for these vessels. The IOCs and other users of these vessels are hesitant in many cases about using them because we are telling them that they should not, because WAV has no right to use the vessels. So, they are probably going elsewhere and hiring different vessels. Not all of them, though. Some of them may continue to take the vessels but there is a huge missed opportunity because of the situation of fighting and uncertainty brought about by the litigation which WAV started. I think that is a huge missed opportunity. We have seen that already with contracts that were awarded several years ago that should have been gearing up to start, they are being retendered. We have written to Nigerian Content Development and Monitoring Board (NCDMB) asking them to investigate WAV’s continued non‐compliance with the Nigerian Oil and Gas Industry Content Development Act 2010 particularly its declarations of ownership of OOIM Vessels to NCDMB and its unlawful detention of the OOIM Vessels after the termination (and/or expiry) of the bareboat charterparty agreements (BBCAs). I am also aware that the management of Nigerian Maritime Administration & Safety Agency (NIMASA) recently authorized the revocation/withdrawal of the renewed certificate of Nigerian registry (Bareboat Chartered) issued to WAV in respect of those vessels. For us, that is significant progress.

Why is it proving difficult to get justice? Good question. This has been a long saga. On the legal front, WAV have sought to elongate the Nigerian and English legal processes and have brought more than one action relating to the same matters. The fundamental contracts, which are the vessel charters between STG and WAV are all governed by English law. There is a standard clause that in the event of dispute the jurisdiction to arbitrate is in England. We have done that. We have pursued arbitration. The arbitration verdicts confirmed that Sea Trucks owns the vessels and that WAV has no right to use the vessels. Our next job is to take those rulings to Nigerian court to get recognition and whilst that may be challenging, we will get there at the end. What we also think is very important is that we tell the whole story to people. We hope that we get the kind of assistance from the oil and gas industry that should be forthcoming to any legal owner of a vessel, that is denied access to it by a third party acting illegally. In other words, I hope that stakeholders in the oil and gas industry recognize that contractual rights should be respected and that they understand these are not WAV’s vessels to utilise, but Sea Trucks’. To this end the IOCs have been informed that fundamentally they are doing business with company that has no right to be using these vessels. As well as that the IOCs probably need to think about whether by using WAV, are they complying with local laws? My understanding is that NIMASA has raised serious questions about the Nigerian flag registration for the overwhelming majority of the vessels WAV are using. Are WAV complying with the local content rules? And if not, how is that fair to other local operators that make the effort to comply? So, we are trying to inform people about the true situation. We hope this shines light on a situation that seems not to be in the interest of the Nigerian economy, a situation that is unlikely to inspire international lenders to lend money into Nigeria or give confidence about doing business in Nigeria. The message to the oil and gas industry is that if you are using any of the OOIM Vessels or J30 through WAV, you are trading with a partner that is using them illegally.

What has been happening to the revenue accruing from the operation of those vessels? Well, the beneficiary of those revenues has been WAV. We should have received payment for the hire of the vessels but we have not received anything. I think what we should have been paid from bareboat charters should be about $50 plus million dollars a year. But since they have not acknowledged that they owe us the money, we asked for the vessels back. What is stopping STG from getting hold of the vessels? We need to use legal means. We need to go through proper process. We are substantially a long way on that journey. We have proven beyond doubt that STG does in fact own the vessels. We have proven that and two arbitrations that took place in London in accordance with the terms of contract between WAV and STG, have confirmed it. But WAV is appealing, as they do not like the verdicts. So, we are waiting for the final court hearings although this can take a long time.   WAV in one of its advertorials said that they have paid for the vessels through cash collection? Yes, I have heard that argument. As return of the vessels continues to be the subject of litigation, you will appreciate that I cannot comment on these assertions in detail, but I have looked into that. Is true that when STG

and WAV worked collaboratively that they both received payments from contracts taking place in Nigeria; the US dollar revenue would go to one of the STG companies, and the local currency would go to WAV. In trying to talk about the cash collections, you also need to think about the payments made to cover costs. The US dollar payments were paid by STG while the local currency payments were paid by WAV. So, whilst it is quite a complicated situation when you take account of both collections and payments together, what is the net position? The simplest way of looking at this is; what do the accounts, the audited accounts, of WAV show? If you look at WAV audited accounts which reflect both payments and collections, it is simple; WAV owes Sea trucks over $100 million dollars, and that was before the liquidation. So, that would be significantly higher now. So, the cash pooling argument unfortunately does not hold, quite apart from the fact that that cash pooling served completely different purposes and did not serve as payment for WAV’s use of the vessels. This is supported by the findings of a London arbitration. What is the current situation of things? I am an officer of the Court. I have been working on cases for 20 years and the liquidator’s job is to investigate the situation, find out what assets the company has and ultimately sell them to get as much money as you can get back to the creditors. I have a duty to investigate what went on in the company that led to the liquidation and if necessary, seek recoveries from misconduct. We have investigated everything, we have been involved for 15 months and for us it is crystal clear that Sea Trucks right now own 32 vessels. It does not have

day-to-day physical possession of these vessels. The legal owners are Sea Trucks entities, not WAV. And the bondholders have mortgages over almost all the vessels. Our job is to claim the vessels and recover the properties of Sea Trucks, and realize maximum value for them. We also have been investigating what went wrong. Why did the company end up in this place? And whilst the big picture relates to oil price drop we discussed before we have also unfortunately discovered some transactions that appeared to be taking place for personal reasons. There were payments to family members, a very young child, million-dollar payments, and $18 million payments to Roomans personally under a sham contract, when the money actually belongs to Sea Trucks. We think it is unusual, for a big company with public listed bonds to be paying over $1.5 million to the 3-year old of the CEO and over $5.5 million to the CEO’s life partner, who actually is not active in the business. So, unfortunately it appears that the owner of the business didn’t respect the boundaries between Sea Trucks assets and personal assets, which was made worse by the fact that he borrowed $575 million dollars using the assets of Sea Trucks companies as collateral for the bond debt. However, it very important to note that these matters are now subject to court proceedings and these transactions have been brought to the attention of relevant authorities as well, so we are unable to disclose any further details in relation to these matters or any possible sanction that may occur. What assets is STG really trying to recover? Sea Trucks has 32 vessels in Nigeria c namely Jascon

In effect you are saying that it will have negative impact on Nigeria? Undoubtedly. The Sea Trucks’ bond of $575 million was one of the largest bonds in the market. The bondholders that lent money to Sea Trucks are Western American international lenders, blue chip companies, and many of those companies have a lot of emerging market-African exposure. And I know from speaking to them that case goes against a point of principle for them. When they lend money, and take collateral, if things go wrong, they are expected to be able to fall back on that collateral, if that is not the case, why should they lend money in the first place? Following your appointment as a liquidator, there has been some restructuring. What can you tell us

about that? Following the liquidation, there were four more vessels that Sea Trucks owned. Dynamic positioning (DP3) vessels that were not in Nigeria but were operating all around the world. We decided to run a process to try to sell those vessels. Clarksons, the ship broker, I think the biggest ship broker in the world handled the marketing of the vessels. They ran a comprehensive marketing process for those vessels and the indicative values of the best bids, were shared with the bondholders because all these vessels were mortgaged. Based on the bids received, we asked if the bondholders wanted us to sell the vessels, in accordance with the best bids. We also had independent valuations carried out by an independent vessel valuation agent. Based on the bids received the bondholders decided the values were not sufficient and would rather enforce the mortgages and sell the vessels to a new company that they owned. They choose Telford Offshore, a new company, which is owned by the bondholders including Roomans, as he held bonds in Sea Trucks, and now owns bonds in Telford. The bondholders decided that, they think that they are better holding these vessels and not selling them at the bottom of the market. They enforced their mortgages and the vessels were sold to Telford Offshore by receivers for a total price of $215m, which was far in excess of the bids received. I think it has been described as opaque, but I do not agree with that. I refute any allegation that it was done as a knockdown price. There was a valuation procured and there was an extensive marketing process done by world class brokerage firm.

We just want to recover properties of STG and then sell them to a new operator. And recover as much value to the bondholders as possible. We continue to hope that an amicable solution can be found, we sincerely hope that it is possible. But we need everyone involved to realize the true situation and try to provide the conditions for such as settlement.    There have been some advertorials by WAV and groups said to be sympathetic to it alleging that there was a mistreatment of Roomans? Yes, I have heard that, and I tried to be sympathetic. It is a great shame that somebody who founded a successful business for many years and gave a lot of employment to the Nigerian economy could not repay $575 million that he borrowed, but that is the reality of the situation. Unfortunately, that is the simple, tragic story; Roomans was in control of Sea Trucks, when it borrowed too much money and he was in charge of Sea Trucks when Sea Trucks could not repay the money. What is probably a bit unusual is the action that has been taken by WAV and Roomans to

If you are given a crystal ball, how do see the end? We have no axe to grind, we are not after people personally, and we want to be respectful of the jobs and communities at stake. We need to recover what is ours and we will do so through the courts. We have made numerous attempts to broker a deal with WAV consensually and find peace. Unfortunately to date these attempts have not proved successful. So, whilst we’re still open to finding a solution consensually, if we cannot do so, we will continue to pursue the vessels legally and commercially. How will that end up? That will probably end up in lots of vessels being arrested and out of action; 32 vessels could be out of action until we get them back. That would be unfortunate but that is what the legal route could yield. Ultimately, we will get the vessels back and we will sell them. I think that whatever happens, these vessels will ultimately remain in Nigeria to service the oil and gas industry because these vessels belong in Nigeria and they are a kind of fleet designed for Nigerian market. We do not see these vessels leaving Nigeria, but we need to have them back, recover what is ours and sell them to a new operator, so the bond debt can be repaid. Are you foreclosing the chance of STG continuing doing business in Nigeria? STG will not be doing business. We will be recovering the vessels and then, we will be selling the vessels to somebody else to do business. An indigenous Nigerian company that will comply with the local content, you know Sea Truck is in liquidation and once it recovers its assets, it will sell them to the highest bidder and they will be free and clear of any dispute.

defy the law of contracts and to claim assets that are not theirs, but which were properly offered up by Sea Trucks, led by Roomans, as security for borrowings of over half a billion dollars. For, that, I do not have sympathy. In the end, the allegations of mistreatment of Roomans, of conspiracy and theft of somebody’s business, are actually a smoke screen and don’t really make any sense or stand up to scrutiny. The real story is a lot simpler. Roomans led Sea Trucks into borrowing money, pledged the vessels as collateral for that money and could not repay that money. And the bondholders who lent that money are simply trying to recover the assets that were pledged as security for that money. There is no conspiracy and no mistreatment and no desire to steal someone’s business. It is that simple.








Thursday 11 October 2018

Spending Trends

Walmart Canada ponders possibility of selling Cannabis products …Unit has no plans to sell cannabidiol products at this time …CBD thought to help with symptoms such as pain, sleeplessness


almart Inc.’s Canadian arm has been investigating the possibility of selling cannabis-based products but doesn’t intend to get into the much-hyped business yet. “As we would for any new industry, Walmart Canada has done some preliminary fact-finding on this issue, but we do not have plans to carry CBD products at this time,” spokeswoman Diane Medeiros said in an email, referring to cannabidiol, a non-psychoactive compound found in cannabis plants. Interest in CBD has been booming as Canada prepares to legalize recreational marijuana next week and several large alcohol and

ing CBD-infused drinks through its partnership with Canopy Growth Corp., and Molson Coors Canada Inc. has formed a joint venture with Hexo Corp. to develop cannabis beverages. When PepsiCo Inc. said last week that it has no plans to invest in cannabis, its shares took a dip.

consumer products companies have indicated they’re studying CBD’s commercial possibilities. Coca-Cola Co. said last

month that it’s “closely watching the growth of non-psychoactive CBD as an ingredient in functional wellness beverages

around the world.” Constellation Brands Inc., the maker of Corona beer and Robert Mondavi wine, has indicated an interest in sell-

day season. Indian investments in Asia: Ikea plans to spend nearly USD400 million to open three packing warehouses in Mumbai, Bengaluru and Delhi. By 2025, the Swedish furniture giant wants have over 25 stores across the country with both online and offline approaches. Delivery project: Amazon has introduced Armada in India. The programme allows sellers on the platform to use their own delivery trucks. Meanwhile, Microsoft is investing in Southeast Asian ride-hailing firm Grab to collaborate on technology initiatives, including big data and artificial intelligence. Gourmet destinations: The parent company of gourmet food chain Dean and Deluca has formed an exclusive franchise tie-up with

Lagardère Travel Retail, under which they plan to open 150 airport outlets across the world over the next five years. Saving the planet: Lidl Belgium has launched a home delivery service of groceries by bicycle in the city of Ghent. Across the channel, British supermarket leader Tesco will remove best before dates from hundreds of fruit and vegetables in its latest push to cut down on food waste. Robotic cleaner: Walmart has unveiled a new automated machine that will clean and polish store floors, that works similar to a selfdriving car. The machine, which resembles a minirobot, will free up staff time for customer service and is said to be rolled out from currently 78 stores to 360 additional locations soon. Security hack in United

Functional Ingredient Other Canadian retail outlets are moving into the pot space. Shoppers Drug Mart, the drugstore chain owned by Loblaw Cos., last month received approval from Health Canada to become a licensed medical marijuana producer, opening the door for its pharmacies to dispense medical cannabis to patients. While CBD doesn’t get you high like its cousin THC, it’s thought to help

with a wide range of ailments ranging from pain and inflammation to anxiety and sleeplessness. Its therapeutic effects are the subject of several clinical trials being conducted by Canadian cannabis companies, including a Canopy study on sleep and Tilray Inc. research into Dravet syndrome, a rare form of pediatric epilepsy. “Health and wellness consumers are beginning to find value and use cases from CBD-based oil extracts, tinctures, topicals and capsules to improve everyday life,” Cowen & Co. analyst Vivien Azer wrote in a research note Tuesday. “We expect to see CBD used as a functional ingredient in non-alcoholic beverages.” Culled from Bloomberg

Global retail update


ollowing Walmart, more global retail giants, among them Carrefour and Shoprite parent Wakefern, have joined the IBM cloud network for promoting food safety. Other laudable initiatives include grocer Tesco’s latest push to cut food waste and discounter Lidl’s launch of grocery deliveries on a bicycle in Belgium. Target and Amazon are each exploring the vast potential of their own private label brands, snack manufacturer Walkers is looking at ways to make the humble crisp packet sustainable, and a quirky viral video opens up new marketing ideas for books. Below are the updates:Focus on high street in Europe: Amazon is looking for a ‘significant number’ of retail sites across the UK to bring its cashierless shops to the country. In an unusual move, Tesco-boss Dave Lewis, has called for a tax on products sold on the internet, the so-called Amazon tax, to shift the burden away from traditional retail. Below targets: In an unscheduled release, German international electronics giant Ceconomy said that operating profit for the 201718 fiscal missed the targets. Earnings before interest, taxes, depreciation and amortisation totalled EUR 630 million, down from an ad-

justed figure of EUR 714 million. Going public: Belarus grocer Eurotorg is set to become the country’s first company to list on an overseas stock market, as it prepares to go public in London this week. The retailer, which was valued at up to USD 1.5 billion, expects to raise around USD 200 million in new money. Scandinavian tie-ups: Coop Denmark has partnered with pharmacy chain Apotekeren to offer healthcare services a number of its Kvickly stores, where pharmacy shops will be launched. In neighbouring Sweden, payment start-up Klarna has picked up fashion chain H&M as a strategic investor. Transparency matters in US, Canada: US retail group Wakefern and grocery purchasing organisation Topco have joined the IBM Food Trust network, a blockchainbased cloud service for food safety. French retail giant Carrefour is also part of the initiative and will reportedly start to track and trace chicken, eggs and tomatoes. Gearing up: Target takes on its discount rivals with Smartly, a new value-focused brand due to launch this weekend. The label focuses on daily household essentials and includes more than 70 items. The retailer is also hoping to beat Amazon and Walmart on the delivery front in the upcoming holi-

States: The US government has come out in support of tech majors Apple and Amazon who have been fiercely denying allegations made by news outlet Bloomberg that the Chinese military have infiltrated their data centres via malicious microchips. A UK cyber security agency has also backed the denials of the global giants. Exclusive branding: Bigbox retail chain Target is set to launch Smartly, a new discount brand of consumer staples that will sell for USD 2 or less. Amazon is also quietly working away at growing its own private label business through an accelerator programme which will generate USD 25 billion by 2022. Trials and tribulations in Europe: British supermarket Waitrose is trialling a new in-home delivery service that gives drivers access to customer’s homes to drop off groceries and put away chilled foods. Tesco CEO Dave Lewis is acknowledging no-deal Brexit fears and admits that ensuring an uninterrupted food supply is the ‘single biggest challenge’ facing British supermarkets. Green initiatives: Food manufacturer Walkers has responded to consumer pressure and is set to offer a free national recycling scheme for potato crisp packets. Meanwhile, the British government is probing the ten largest UK clothing retailers on manufacturing ethics, pollution and sustain-

ability practices. Pushing ahead: Russia’s X5 Retail Group is opening a new distribution centre in Yaroslavl, Central Russia. The facility boasts a 34,000 square metre site and will serve 500 Pyaterochka stores. The grocer has also revealed plans to develop logistics and infrastructure to ensure the smooth operation of its stores. Welcome back: After falling into administration in 2016, British Home Stores is planning a comeback, as part of an alliance with Bournemouth-based department store Beales. Concessions will be set up as part of a trial in nine Beales’ stores. Grey area in Asia, Australasia: Merchants using Alibaba and are apparently exploiting a legal loophole allowing thousands of prescription drugs to be sold through the platforms. While online sales of pharmaceuticals are illegal in China, drugs bought via the websites are paid for on delivery, meaning technically the transaction is offline. Spin off: Australian supermarket Coles is set to demerge from parent company Wesfarmers and plans to build robot-operated warehouses and launch new store formats as part of its standalone makeover. It hopes to better compete with nemesis supermarket chain Woolworths who has outperformed Coles in the last seven quarters.

Thursday 11 October 2018


Laundry experience takes a new leap with LG Twinwash


t home, laundry time is usually perceived generally as stressful, especially when the kind of washing machine that would make laundry experience well-coordinated and less stressful is unavailable. ‘‘There are different types of washing machines; LG TwinWash comes with difference which is clearly seen as an ideal washing machine to handle all kinds of laundry issues at home,’’ says LG manufacturers. According to a loyal consumer of LG Electronics products, who identified herself as Mummy B, LG Twinwash washing machine is one of the best gifts she had received from her husband. “This machine has been very helpful,’’ said Mummy B. ‘‘I do not have to wash and wait for the sun to dry it anymore. The two compartments for washing and drying of fabrics simultaneously have taken care of that.’’ “I highly recommend TwinWash to all my friends especially those who are tired of the conventional way of doing their laundry,” she added. Over the years, LG Electronics have distinguished itself as a leader in home appliances with numerous cutting-edge products. This, the company says, is evidence in the World’s First LG TWINWash™ washing machine, which gives users the opportunity of washing two

loads at the same time. ‘‘With the constant demand for time and energy saving homes appliances, this washing machine is all about efficiency and innovation, helping to get more clothes cleaner in lesser time,’’ says the company. ‘‘It is unique and redefines the concept of laundry. LG is raising the bar to a new level of home appliance innovation generating a whole new set of washing options.’’ Esther Ekuku, another LG consumer, said the ability of the TwinWash washing machine to multi-task at the same time is a game changer when it comes to washing experience. ‘‘Washing and drying at the same time saves one a lot of time and energy,’’ said Ekuku. “For me laundry time has been quite exciting due to the comforting feeling I get whenever am using the TwinWash.”

‘‘It is interesting to note, TWINWash™ offers a new dimension of convenience and time saving by significantly cutting down on washing time as multiple loads of laundry can now be done simultaneously,’’ the company said. ‘‘The powerful main washer handles the bulks of the laundry, while the TWINWash Mini can be set to run a different wash cycle. ‘‘Smaller loads can be washed when needed without having to wait until a full wash load has accumulated, saving user time. It is perfect for delicate or specialized fabrics that require wash setting such as lingerie or baby clothes and even the gym wear which can also be separated from whites.’’ However, the washing machine also features LG’s unique TurboWash™ 2.0 technology with its Nozzles posi-



Jennifer Garner’s baby food brand closes $20 Million investment tioned inside the drum of the main washer spray a concentrated solution of detergent directly onto the clothes, improving the unit’s cleaning performance. Another high pressure nozzle sprays tiny water particles through the clothes during high spin cycles for more effective rinsing. The revolutionary Inverter Direct Drive motor at the heart of the LG TWINWash™ is attached directly to the drum, improving efficiency and reducing the number of moving parts, leading to enhanced durability. Also, the washing machine’s Energy Monitoring feature provides helpful data while LG’s proprietary HomeChat™ service allows users to check the status of their washing machine using everyday natural language. In addition to its fashioned Premium Ergonomic Design, The LG TWINWash™ is fitted in the space of a typical front load washing machine so nothing is sacrificed for the added convenience. The door of the main washer is aligned with the drum’s center, positioned higher than on conventional models and tilted at an angle to make loading and unloading the main drum easier. Home owners will never have to think of laundry the same way ever again because with TWINWash™, laundry day can be any day of the week. It’s this kind of innovative thinking that has propelled LG to the front of the pack in the washing machine market.

…Once Upon a Farm to expand product development, distribution …Cavu Venture Partners sees company leading baby food space


nce Upon a Farm, the organic baby food line co-founded by actress Jennifer Garner, snagged a $20 million investment from Cavu Venture Partners as it plans hard growth for the softfood company. The investment will help it build distribution and develop new products, said Chief Executive Officer John Foraker, who previously led natural mac-and-cheese maker Annie’s Inc. Once Upon a Farm makes cold-pressed baby food, applesauce and smoothies packaged in refrigerated pouches. It’s starting a new line of baby food cups that will be in stores next year and will move beyond the refrigerated section to the baby aisle with coolers. The company’s presence in retailers such as Whole Foods Market and Walmart Inc. has grown sharply over the past year, jumping from 300 locations to more than 8,500, Foraker said. “The baby food category has lacked real product innovation for quite some time,” said Brett Thomas, managing partner at Cavu, a private equity firm specializing in consumer-brands. He said he sees Once Upon a Farm moving to “disrupt and lead in this space.”

Organic Push Consumers are shifting away from traditional packaged food staples toward the perimeter of grocery stores, where fresh products are sold. The trend is the same for baby food. Sales of organic baby and toddler fare in the U.S. are climbing as conventional baby food demand slips, Berkeley, California-based Once Upon a Farm said in a company presentation. “We know that there’s this big white space around better fresh baby food and also better fresh kid food,” said co-founder Foraker, who previously led organic label Annie’s, which General Mills Inc. bought in 2014. “We want to make sure the pipeline of products is there.” One potential area for expansion -- packaging products for adults. Garner said it “makes sense” to eventually offer the smoothies in bottles and in larger sizes for bigger kids and grown-ups. “It’s been an unexpected boon” how adults are gravitating toward the company’s products, she said in an interview. Even on set, “I can’t tell how often I peek around the corner and someone is having the smoothies.” Culled from Bloomberg

Living under poverty line How Nigerians are struggling to survive

If you want to contact the writer of this story call: +234(0) 803 889 1567, +234(0) 8155184838

Driver needs help to fund dialysis, surgery Name: Wale Ogungbesan State of Origin: Ogun Age: 44 Dependents: Wife, children and siblings Occupation: Driver I used to work in an insurance company in Lagos as a contract staff but for the past four months, I have not been to work because of my sickness. How did it start? It started on the 9th of June, 2018. I travelled to Abeokuta for an official assignment. When I came back, I had a terrible stomach upset. I could not sleep, stand or even do anything. When I got home the second day, the pain was so severe and I had to visit a private hospital beside my house at Sango in Ogun State. I was given some drugs to ease the pain but the pain did not stop. The next day, I was asked to run some tests since the pain

was still excruciating and I did. I was sweating profusely and breathing very fast. After the test, they said the problem might be with my appendix and they started treating appendicitis. But, the pain continued. I later went to Access hospital behind Sango garage, Abeokuta where they detected my two kidneys were not working fine. I was told I needed dialysis. I was coughing and vomiting blood. My friends, children and wife rushed me to Dialyzer specialist medical centre. I did the tests again and the hospital confirmed that I had problem with my kidneys. What explanation did the doctors give? Doctors say the stress coupled with hypertension which I have suffered for a long while contributed to the kidney problem. When I started working, I borrowed

money from cooperative and bought a car. So, if I’m going to work at 4.30am, I would pick passengers from Abeokuta to Oshodi. When I get to the office, I park my car and on my

way back home in the evening, I would pick passengers back to Abeokuta to make extra income. When things got tough, I sold my car for N250,000 and almost sold my house but was

advised against it. What is the cost implication? I spend N71,000 twice every week when there is money. N36,000 for two pints of blood and N35,000 for dialysis. I cannot cope with the bills. So, I do it once it in a week. Sometimes when there is no money, I will just stay at home. If it’s up to a week and I don’t do the dialysis, my leg will begin to swell up. I will start vomiting blood and my breathing will be fast. At that point, my family will quickly rush me down to the Lagos from Ogun State for dialysis. How have you coped so far? I get help from the office, my secondary school association, church, my friends, colleagues and wife’s relatives. At a stage, they said they don’t have money. My wife is a petty trader.

Analysts: Chinwe Agbeze, Stephen Onyekwelu, David Ibemere, Graphics: Joel Samson

She helps with the feeding and her family assists us by giving us money for food. So, we don’t have to worry about food. A plea for help I beg individuals, corporate organisations and the government to please help me. The only thing that can make me live is dialysis or transplant. The doctor advised I go for transplant. I have seen a donor but I need N10m. Nigerians, please help me so that I can live and take care of my family. My 20-year-old son is in his 300-level studying computer science at Ogun State University, but he has been at home since because I cannot afford to pay his school fees. The money I get from people is what I use for my dialysis. Help me, so I can fulfil the promise of God in my life. Pease, don’t allow me to die.



Thursday 11 October 2018

Thursday 11 October 2018





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

Year Open


Market capitalisation

N13.609 trillion

NSE Premium Index

The NSE-Main Board

NSE ASeM Index




Week open (28 – 09–18)


N11.962 trillion




Week close (05– 10–18)


N11.822 trillion




Percentage change (WoW) Percentage change (YTD)

-1.17 -15.32

-1.55 -9.57

NSE Lotus II

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NSE Banking Index

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




1,473.63 1,457.49





NSE 30 Index







-0.65 -14.06

-1.01 -11.02


-0.32 -22.56









Election fever dampens investors’ confidence …impressive Q3 scorecards may not reverse negative sentiment IHEANYI NWACHUKWU


tock investors in Nigeria will continue to sit on the fence and carefully watching developmentsinthepolitical space. Amid their lukewarm feeling towards investing in equities and other Naira asset classes, the bears will continue to reign supreme till after election next year. Though there could be pockets of gains but that will not be enough to reverse recorded level of loss this year. “Stock market is dominated by preserver investor type: actions driven by loss aversion; concerned about short term performance in a bearish market; and flight to safe haven. Rising rates in advanced economies will exacerbate declining foreign participation in the local bourse”, Financial Derivatives Company analysts noted in their October 3 presentation at LBS titled “No Stability, No Democracy: Bumpy Road Ahead, Fasten Your Seat Belts”. Nigeria’s political scene has shown the opposition successfully altering the narrative threatening the winning Buhari machine of 2015, the Financial Derivatives analysts observed, adding that the “growing internal squabbles of the APC is taking a huge toll on its reputation. The analysts believe that election fever helped dampen investors’ confidence on Custom Street. The market capitalisation of listed equities

L – R: Olufemi Shobanjo, head, broker dealer regulation, Nigerian Stock Exchange (NSE); E.O. Fadipe, board member, Capital Bancorp plc; Oscar N. Onyema, CEO, NSE; Olutola Mobolurin, chairman, Capital Bancorp plc; Aigboje Higo, MD/CEO, Capital Bancorp plc; Babatunde Pearse, board member, Capital Bancorp plc, and Abimbola Abdulazeez Babalola, head, market surveillance, NSE, during a Closing Gong Ceremony in commemoration of 30th year in operation at the Exchange, recently.

on the Nigerian bourse declined by 5.97percent in September; down by N760billion to N11.96trillion while the NSE ASI decreased to 32,766.37points. The NSE ASI shows negative return in excess of 15.16percent as at Tuesday October 9. Also in their view, Cordros Securities research analysts who noted that the APC and PDP have been, and remain the two parties to watch out for in 2019, said “while the APC remains a strong force – making statements with the recent gubernatorial elections in Ekiti and Osun States – the emergence of ATIKU has unarguably increased the

chances of the main opposition.” “Nigerian equities are down 15percent year-to-date (YtD), with sell-offs started by the Foreign Portfolio Investors (FPIs). The locals joined subsequently, with the retail investors leading most of the recent sell-offs, according to the NSE data. Looking through historical data on monthly equities market performance, we find that October and November are selloff months, while December typically delivers positive return. As we head for fourth-quarter (Q4) 2018, will the trend continue, and even when it does, is it likely that monthly sell-offs

would be as heavy as in the recent past quarters”, Cordros Securities analysts stated further. Asset managers are nervous Asset managers are already nervous looking at their allocation to various asset classes. They reduced allocation to equity due to bearish sentiment; while the fund anagers are seen playing at the long end of the yield curve. Asset managers allocation to equity valued at N150.98billion in September from N163.23billion in July represents 8percent decline; while that of Money Market was N200.25billion

in September against July level of N236.06billion, down by 15percent; Fund Managers allocation to FGN Bond increased to N1.204trillion in September from a low of N1.116trillion in July, up by 8percent. Treasury bills (T-Bills) allocation at N286.90billion in September against N316.27billion in July represents a decline of 9percent; while their allocation to Mutual fund was N11.07billion in September against N10.85billion in July, up 2percent. In their October outlook for equities, Financial Derivatives Company analysts said the stock market will remain deeply in negative territory in October. “Market will remain highly volatile as investor confidence ebbs. Technical analysis will determine most investment decisions. Q3’18 financial performance will be largely positive. Impressive performance will not overturn market’s negative sentiment,” according to Financial Derivatives Company analysts. “While we expect 9month 2018 earnings numbers to start trickling in going forward, a mixed theme is anticipated this week as investors hunt bargains on notable tickers as concerns in the polity persist,” said analysts at United Capital Plc. “Due to the sell-offs witnessed in the prior week, we anticipate bargain hunting in bellwethers this week. Track to date, the performance of stocks on our equity watchlist is as follows: UBA (-2.4percent), Guinness (-1.3percent), Custodian (-1.3percent), Guaranty (-0.4percent) and Okomu (-3.7percent)”, Afrinvest Research stated in its October 8 note to investors.




Thursday 04 October 2018


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United Capital investment views

Domestic Financial Markets Review and Outlook Bears dictate proceedings, NSEASI dips 1.2percent weekon-week


ast week was profoundly bearish on the domestic bourse as the main equity index recorded declines on all trading days of the holiday-shortened week. The Nigerian Stock Exchange (NSE) All Share Index (ASI) plunged 1.2percent week-on-week (w/w) to end the week at 32,383.2points while market capitalisation diminished N139.3billion to N11.8trillion. Thus, year-to-date (YtD) return nosedived to -15.3percent. Activity level waned as average value traded contracted 30.9percent to N1.96billion while average volume traded shrank 13.6percent to 159.8million units. The bearish theme on the main board pervaded all sector indices, except the Oil & Gas index, which closed the week unscathed, u p 1 . 1 p e rc e n t w / w a s p r i c e appreciation in FO (+10.2percent) and OANDO (+4percent) buoyed the index. The Insurance (-1percent) and Agriculture sector (-2percent) indices led the laggards consequent on w/w declines in LAWUNION (-15.4percent), NIGERINS (-18.9percent) and OKOMUOIL (-4.9percent). The Banking (-0.7percent), Industrial Goods (-0.4percent) and Consumer Goods (-0.3percent) indices also trended southwards w/w owing t o p ro f i t t a k i ng i n STA N BI C (-7.6percent), UBA (-2.4percent), UBN (-1.9percent), DANGCEM (-2.4percent), HONYFLOUR (-2.8percent) and NB (-1.9percent). Investors’ sentiment waned as market breadth doused to 0.9x (previously 0.7x); 27 stocks advanced while 31 declined. While we expect 9M-18 earnings numbers to start trickling in going forward, a mixed theme is anticipated this week as investors hunt bargains on notable tickers as concerns in the polity persist. Money Market: Liquidity & pre/post-NTB sentiments guide proceedings in the money market Markets remained sufficiently liquid as OBB and overnight rates averaged 10.9percent (vs. an average of 11.4percent in the preceding week). System liquidity was guided by Inflows from OMO maturities (N268.2bn) and outflows from CBN’s wholesale SMIS and OMO auction. Meanwhile, the CBN floated just one OMO auction on Thursday to mop-up the excess liquidity from maturing OMO bills; the auction was met with N553bn demanded of the N400bn offered and the CBN ended up selling to all subscribers at an average stop rate of 13percent (182-day – 12.5percent, 364-day – 13.5percent). Furthermore, the Apex bank conducted its bi-monthly NTB auction, wherein it successfully re-financed N133.5bn. Demand was robust with an average bid-tocover ratio of 3.3x compared to 2.4x in the previous auction with the 365-day bill mostly demanded (bidto-cover ratio of 3.7x). The auction was carried out at the following stop rates: 91-day (10.9percent vs. 11percent at the last auction), 182day (12.1percent vs. 12.2percent at the last auction) and 364-day (13.33percent vs. 13.475percent at the last auction). In the secondary T-bills market, liquidity sentiments and sell-offs in anticipation of the Wednesday PMA guided sentiments during the week. Overall, average T-bill yield edged lower by 17bps to close the week at 13.6percent. (91-day (down 4bps to 12.7percent), 182-day (up 19bps to 13.4percent) and the 364-day (down 66bps to 14.8percent). In the coming week, inflows from OMO maturities (N227.1bn) is expected to hit the system and we expect the CBN to maintain its spate on OMO and FX interventions in the market.

We expect the tempo of these events to guide trading sentiments through the week. Bond Market: Renewed bond supply to guide sentiments this week In the bonds space, trading sentiments remained order driven as average bonds yield inched lower by 7bps to end at 14.9percent. Looking ahead we anticipate the release of the Q4 FGN bond calendar with expectations of relatively higher levels of planned borrowings considering the 2018 budget deficit. What’s more, we also anticipate the announcement of the second tranche of the FGN Sukuk bond. Overall, further upticks in yields are probable towards the yearend, these renewed bond supply, as well as inflationary pressures, relatively weaker growth, as well as the global tightening in liquidity and added political risks as we near the February 2019 presidential election. Foreign Exchange: Mixed theme across FX windows In the Foreign exchange market, naira closed the prior week mixed even as Brent price traded above $80/b throughout the week. Also, in a bid to further support the naira amid lack of growing demand for FX, the CBN sustained its weekly FX intervention in the wholesale

suspended temporarily pending the expiration of the 30-days pre-action notice shareholders of insurance companies served the commission. In the political space, most political parties conducted their primary elections for all elective positions for the 2019 general elections, ahead of the October 7th deadline earlier stipulated by the Independent National Electoral Commission (INEC). Notably, the Lagos state governorship primary election of the ruling All Progressives Congress (APC) ended with the sitting governor losing his second term bid to Babajide Sanwo-Olu. This week, the spate of economic data releases are expected to be lite as only the H1-18 job creation report is anticipated to be published by the National Bureau of Statistics. Global Market Review and Outlook Global equities close mixed as the US replaces NAFTA with the USMCA Reports that the US had reached a new trade agreement with Mexico and Canada (the USMC A) to replace the North America Free Trade Agreement (NAFTA) buoyed sentiments earlier in the week, this was a relief to investors in the wake of trade tensions that had been spooking the markets. Elsewhere,

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NASD OTC records outstanding Q3 performance HEANYI NWACHUKWU


he NASD OTC Securities E x c h a n g e r e c o r d e d an outstanding performance in the third-quarter (Q3) to September 30, 2018 compared to previous years, despite a flurry of political activities and the much discussed economic malaise within Nigeria. Olutola Mobolurin, chairman of NASD Board of Directors and the current chairman of Capital Bancorp Plc told INVESTOR on the sideline of a recent briefing that NASD is a vehicle that “we are discussing with the Securities and Exchange Commission (SEC) to allow NASD trade shares of all public companies whether registered with SEC or not, but SEC said no!”. H e s a i d , “ We a r e

still arguing but we hope both institutions will come to amicable situation where the interest of investors will be protected. I believe that in the long r un, we have to step up the tempo of the market. We need venture capital funds to get more Nigerians into business. NASD is vehicle that can help countries develop companies that are ripe for listing”. The total market capitalisation and Unlisted Securities Index (USI) for the third-quarter came to N480.88billion and 710.60 points respectively. This significantly surpassed Q3 per for mances for 2017 and 2016 which recorded market capitalisation of N406.075billion and N411.28bn respectively. In the year 2018, Q3 also recorded a 9percent increase from Q2’s performance (market capitalisation

N441.018billion and USI at 651.69points. There are currently 38 admitted securities on this platform ; 244 registered brokers, and 130 Participating Institutions (PIs). The volume of trades recorded on this OTC Exchange year-to-date ( Ytd) stands at 18.18 billion, while number of trades (YtD) stands at 2,328 and the value traded (YtD) stands at N18.98 billion. As the year 2018 winds down, there is a sense of hopeful expectation in anticipation of Q 4 ’s p e r f o r m a n c e . Regardless of approaching festivities, the economic and political climate, the NASD OTC c o u l d y e t a ga i n p u l l off a remarkable performance in stark contrast to prevalent economic happenings and dour performances within other markets, the Exchange noted.

FBNQuest Capital Research and retail FX market, further pressuring the nation’s FX reserves down to $44.0bn, as at Wednesday. Overall, the naira traded sideways in the parallel market to settle at N360.0/$1, while rates at the Interbank FX window depreciated marginally by 2bps to close at N306.4/$1. Contrariwise, rates at the Investors’ & Exporters’ FX window appreciated marginally by 2bps to finish at N363.8/$1. Looking ahead, we expect the sustained weekly FX intervention by the CBN to continue to put pressure on FX reserves as pressure on the local unit persists. Macro Highlights and Outlook During the week to 5th, Oct18, the Central Bank of Nigeria (CBN) released the Purchasing Managers Index (PMI) for September indicating the economy expanded at a slower pace as both the manufacturing and nonmanufacturing PMI for the month dropped to 56.2pts and 56.5pts from 57.1pts and 58.0pts respectively in August. Also, the CBN published its Credit Condition Survey for Q3-18 indicating the availability of secured credit to households and corporates increased during the period, thanks to improving economic outlook, changing sector-specific risks, improving liquidity conditions, and changing appetite for risk. In other news, the National Insurance Commission’s (NAICOM) implementation of the proposed Tier-Based Minimum Solvency Capital (TBMSC) model for the Insurance sector which ought to have taken off on October 1, was

monthly US job reports showed that the unemployment rate declined to 3.7percent in September, the lowest in the past 48 years. The job report showed an increasingly tightening labour market and a potential pressure on wages. The 10-year U.S. Treasury yields climb to a seven-year high as investors perceived the tightening job markets to reinforce the Fed’s path for raising rates. Hence, major US equity indices reversed gains recorded earlier in the week; the NASDAQ (-4percent), S&P 500 (-1.2percent) and DJIA (-0.4percent) diminished w/w respectively. Trade negotiation between the EU and UK weighed on European markets even as pressure on Prime Minister May from the conservatives intensifies as the Brexit negotiations entered what she referred at as the “toughest” final phase. Elsewhere, Tesco bank in the UK was fined £16.4mn over cyber-attack while concerns on Italy’s fiscal deficit lingered. Consequently, UK’s FTSE (-2.6percent), the European STOXX (-1.8percent) and Germany’s DAX (-1.1percent) declined w/w. In the Emerging markets, Turkey’s September inflation soared to c.25percent, the highest in almost 15 years as the country struggles with a currency crisis. Consequently, the Turkish Borsa Istanbul Index slumped 5.1percent w/w. India’s SENSEX (-5.1percent w/w), Russia’s RTSI (-2.7percent w/w) and South Africa’s JALSH (-2.3percent) also diminished w/w while Brazil’s IBOV (+3.8percent) advanced w/w.

The elections and the macro (2)


n our search for macro slippage, we devote the second of our daily notes on the run-up to the Nigerian presidential elections of April 2007, April 2011 and March 2015 to inflation. In our first note we examined total FGN spending (Good Morning Nigeria, 14 September 2018). The said fallout from elections has become the principal reason for the monetary policy committee to brush aside an easing stance. The committee’s latest communique cited the threat to inflation from a surge in preelection spending by the g ov e r n m e nt s a n d t h e candidates. Fo o d p r i c e s, g i v e n their heavy weighting

in the index , tell part of the story. On a m/m basis, they contracted from October 2006 through to January 2007, and registered very small increases in both Q4 2010 and Q4 2014. We may not see this bonus ahead of the forthcoming elections in view of the clashes between farmers and herdsmen in important growing areas. When w e looked at FGN spending, we noted a rise in the build-up to the elections in 2011 due to the substantial increase in the national minimum wage, currently topical, approved by the National Assembly. Other than benign food prices, the main reason for the containment of inflation ahead of

elections has been the exchange-rate regime. In contrast to Turkey, where the regime is (close to) floating and inflation is around 25percent year-on-year (y/y), the exchange rates in Nigeria a re p ay i n g d i v i d e n d s in terms of the limited passthrough to prices. Underpinning the regime, of course, has been a fir m oil pr ice. Bonny Light (spot) av e r a g e d U S $ 6 1 / b i n the eight months before the 2007 polls, US$99/b in the run-up to 2011’s and US$68/b in the third eight-month period. As we approach voting next year, all the indications are that a robust oil price will again be supportive of the CBN’s exchangerate preferences.

Thursday 11 October 2018





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Dangote Cement: Valuation remains attractive IHEANYI NWACHUKWU


he valuations of Dangote Cement Plc stock by many analysts based on the company’s first-half (H1) scorecards remain a t t ra c t i v e. A l s o t h e i r recurring “buy” ratings for the stocks suggest an upside potential when c o m p a re d t o c u r re n t market price –impressive for value hunters. These positives come ahead of the expected release of third-quarter (Q3) financials of Dangote Cement Plc. Investors on Customs Street are currently awaiting the third-quarter results of the largest cement maker which according to the NSE rules entered closed period since Thursday October 4. The closed period is intended to prevent trading in the company’s shares by its insiders/interested parties ahead of the public dissemination of its financial results. At the Nigerian Bourse, Dangote Cement Plc stock was priced at a 52-week low of N200 on Tuesday October 9 as against 52week high of N290. Despite this new lows, research analysts at Lagos-based CardinalStone still see “value” in the stock saying its outlook remains “broadly positive”. They urged investors to “buy” the stock following their new target price of N275.49. The stock is considered highly undervalued, but with strong fundamentals. “To a large degree, we have seen our expectations play out in DANGCEM this year. Earnings have continuously impressed as volumes ramp up and improved cost efficiency remains a key driver of bottom-line growth. For us, we expect the narrative in H2’18 to remain unchanged, as we remain o p t i m i st i c o n f u r t h e r

volume growth despite expected seasonality effect in third-quarter (Q3),” CardinalStone Research analysts said in their August 29 note. Also, Vetiva Capital research analysts maintained positive outlook for the company’s earnings “despite mild miss in H1”. They maintained their “Buy” rating for the stock with target price (TP) of N276.28, according to Onyeka Ijeoma’s team of equity research analysts at Vetiva in their July 23 note. The stock has declined by 13percent this year while the NSE ASI shows negative return in excess of 15.16percent. Dangote Cement is the highest capitalised stock listed on the Nigerian Stock Exchange with market capitalization in excess N3.4trillion and shares outstanding of 17,040,507,405units. London IPO becomes feasible in 2019 Aliko Dangote, chairman, Dangote Cement Plc said on Monday that Bank of America Merrill Lynch and Standard Chartered are among the banks organising the 2019

London public listing of Dangote Cement. While speaking at the FT Africa summit, Dangote added the listing would go ahead in 2019 after the Nigerian elections, but he could not say when exactly. Asked who the bankers could be for the IPO, Nigerian businessman Dangote said “the usual ones...Bank of America Merrill Lynch, Standard Chartered.” Bloomberg had earlier reported in July that Dangote Cement might carry out its longplanned listing of shares in London after Nigerian elections early next year, as it considered expansion through takeovers. “We are working on it and we will look at it in 2019. We have grown to this extent mostly via Greenfield investments. To grow much more, we’d probably have to do it via acquisitions,” E d w i n D e v a k u m a r, group executive director at Dangote Industries Limited, was quoted as saying in an interview in Lagos. He said a number of banks had approached the company to arrange the

IPO, though none had been mandated and there had been no decision about how much to raise. On track for a strong FY’18 performance The cement maker commenced this year on an upbeat note - over the first half of 2018, the company grew its top line by 16.9percent year-on-year (YoY) to N482.4 billion. In this second-half (H2) of 2018, analysts expect the narrative to remain largely unchanged. In fact, they look to increased volumes growth in the Nigerian market, following stronger than expected pick up in volumes in the first half of the year. Dangote Cement Plc recorded N185.5billion pre-tax profit in the first-half (H1) of 2018, a remarkable advance from N155.5billion PBT a c h i e ve d i n H 1 ’ 2 0 1 7 . Recall that the successful business of Africa’s largest cement maker in 2017 enabled the company to pay a whopping dividend of about N180billion to its shareholders, the largest of such payment since this year’s annual general meetings season.

The dividend paid is 90 percent of the group’s profit and represented N10.5 per share. Its financial highlights show group revenue increased by 16.9percent to N482.4billion compared to N412.676billion in the firsthalf of 2017. The group’s gross profit increased to N284.844billion from N235.127billion in H1’2017. Its after-tax profit for the first-half period printed at N113.164billion well ahead of N109.71billion in the corresponding period H1 of 2017. The group’s earnings before interest, tax, depreciation and amortization (EBITDA) which measure its operating performance went up by 20.8percent to N246billion, 51percent margin; Nigeria EBITDA increase by 19.3percent to N226.9billion, 65.9percent margin; while Pan-African EBITDA was up 31.9 percent to N25.9billion, 18.7percent margin. Looking further into the group’s scorecards revealed that in the first-half of 2018, the group’s cement sales volume increased to 12.362million tonnes from

11.509million tonnes in the corresponding first-half period of 2017. Out of total revenue of N482.439billion in the first-half of 2018, N344.104billion came from Nigerian market while N138.685billion was earned from Pan African market. While the group revenue from the sale of cement increased to N482.284billion in the first-half of 2018 as against N412.557billion in H1’17 revenue from the sale of ‘other products’ rose to N155million against N119million in first-half of 2017. Profit from operating activities in Nigerian market was N203.511billion while profit from Pan African market was N2.858billion. In t h e f i r s t- h a l f o f 2018, Dangote Cement Plc successfully issued N50billion Commercial Pa p e r ( C P ) u n d e r i t s N150billion Programme; largest-ever issuance by a Nigerian company. The Commercial Paper listing on FMDQ OTC Plc on Thursday July 19, 2018 was seen as great news for the Nigerian debt markets. “Our first-half performance was ver y strong and dr iven by an excellent recovery in Nigeria, where our sales volumes increased by nearly 14percent and revenues rose by more than 18percent. Pan-African operations saw a slight fall in volumes but both revenues and EBITDA i n c re a s e d b e cau s e o f better pricing and currency conversion effects”, said Joe Makoju, Group Chief Executive Officer, Dangote Cement Plc. “In addition, we achieved the largest-ever issuance of Commercial Pa p e r b y a N i g e r i a n company when we issued N50billion Series 1 and 2 Notes at the end of June, with a discount rate that reflected the strength of our Company and its excellent credit ratings”, he added.



Harvard Business Review

Thursday 11 October 2018

Global Business Perspectives CONNEC TING








Why doctors shouldn’t dismiss the Apple watch’s new ECG App CHRISTOPHER WORSHAM


pple recently announced a new feature for the Apple Watch: The latest version will be able to measure heart rhythms and notify patients about abnormal, and potentially harmful, patterns. Doctors, however, are skeptical. Their biggest concern is that the feature hasn’t been rigorously tested and could provide unreliable data, creating a false sense of risk among users and leading patients to ask for unnecessary tests. While these concerns are valid, doctors shouldn’t be too quick to dismiss the new feature, particularly as it appears amid growing consumer enthusiasm for wearable devices that measure health behaviors. The Apple Watch has the potential to provide valuable data that benefits the entire health care community. MONITORING THE HEART The ECG app, debuting later this year in the new Apple Watch Series 4, allows users to generate an ECG in 30 seconds. ECG stands for electrocardiogram, a recording of the electrical activity of the heart. While the ECG in the Apple Watch is much simpler than the one performed in a doctor’s office, it can still be used to detect certain abnormal heart rhythms. The app is being billed as primarily able to detect atrial fibrillation — the most common arrhythmia that affects about 1% of Americans, mostly older adults, putting them at risk for complications such as stroke. When initially developed, ECGs were exclusively interpreted by physicians, but advances in technology have made it possible for computers to interpret ECG data. Although computerized interpretations of ECG data aren’t perfect, they have now been part of routine health care for decades. A 1991 study showed that computerized algorithms were almost as accurate as cardiologists (and in some cases, bet-

ter) in detecting cardiac rhythm anomalies on ECGs, and ECG technology has only improved since then. Still, atrial fibrillation in particular has been historically difficult to detect accurately with computer algorithms, and the ECG app will be no exception. One study of the Apple Watch ECG showed that about one-third of its ECG recordings were “noninterpretable” by the algorithm (i.e., the app couldn’t determine what type of heart rhythm was present), and when they were interpretable, the algorithm still made errors. The U.S. Food and Drug Administration has “cleared” the app for commercial use (which is not the same as formally approving it for medical use), but says that it is not intended to provide diagnoses. The agency has stated that patients still need to see their doctors to determine whether they truly have atrial fibrillation, and if so, if they need treatment — a potentially difficult and costly task. In many cases the Apple Watch ECG will incorrectly inform patients that they may have atrial fibrillation, which is why doctors are concerned about the stress that the app could place on their patients, their practice and

the health care system. THE BENEFITS OF MORE DATA While doctors are right to be concerned about a rise of falsepositive tests, the ECG app could still be hugely beneficial to the health care community. The sheer number of individuals who purchase Apple Watches — an estimated 18 million in 2017 — could generate unprecedented data. The most obvious benefit is that the watch may detect atrial fibrillation in patients not known to have the disease, which could lead to earlier treatment and reduction of stroke risk. But there are other ways in which the ECG could ultimately be used. In theory, for a patient with chest pain, an emergency physician could pull up an ECG taken by the patient before he arrived at the hospital, helping the physician to make a better diagnosis and expedite treatment, perhaps by identifying specific heart rhythms that are seen in conditions like heart attacks. ECG data could also be useful in the case of sudden cardiac death — an important, often unheralded and sometimes-addressable cause of death among

young adults, precisely the population likely to wear the watch. If a particular patient recorded an ECG before she died, medical examiners could review the data and gain more insight into the cause of death, including, for example, whether it was a heritable condition. Aside from utility in single patient encounters, data could be aggregated across watch users, linked to clinical information and analyzed to better understand how often heart abnormalities are the root cause of patient morbidity and mortality. We already know, for example, that underlying heart rhythm abnormalities can signal downstream adverse health outcomes, like heart attacks, sudden cardiac death and mortality from lung clots. But if data on these outcomes could be linked to ECG data from the Apple Watch, it’s possible that these adverse health outcomes could be predicted. Collecting and sharing large amounts of health data can benefit everyone. We’ve seen this in other areas of health. In 2012, for example, the Global Lung Function Initiative released data from almost 100,000 normal breathing tests of male and female patients of various ages, heights and eth-

2017 Harvard Business School Publishing Corp. Distributed by The New York Times Syndicate

nic backgrounds, allowing doctors to make better, more personalized diagnoses of patients with shortness of breath. The Apple Watch could record millions of ECGs to build a massive database spanning different populations, allowing for a future with highly personalized ECG interpretation. Researchers could also use ECGs collected from Apple Watches to study changes in the heart’s electrical activity in large numbers of patients who have other noncardiac diseases, who are taking specific medications, who live in certain areas, who eat certain diets, and so on — the possibilities are difficult to predict. New algorithms could detect patterns or abnormalities that are too small or subtle for human interpreters to see, but that can be picked up by a computer. The Apple Heart Study, which is ongoing at Stanford University and will end in 2019, will look at data collected from older models of the Apple Watch that detect heart rates but do not collect ECGs. Future studies that include ECG data from the newest Apple Watch could take years to perform but have the potential to provide useful information and ultimately improve patient care. Mobile devices, apps and other technologies that monitor human health are growing rapidly. As doctors reasonably question whether these technologies will lead to unnecessary doctor’s visits, testing and patient anxiety, it’s important to recognize the opportunities they provide and to push for the creation and sharing of the unique data they generate.

Christopher Worsham is a critical care physician at Massachusetts General Hospital and Harvard Medical School. Anupam B. Jena is the Ruth L. Newhouse associate professor of health care policy at Harvard Medical School and an internist at Massachusetts General Hospital.

Thursday 11 October 2018




LegalBusiness BD Business Law Industry Report Practice Intelligence Partnerships


Re-examining the purport of the Executive Order No. 6 of 2018


ithout doubt, the key objective of the Executive Order No. 6 of 2018 (“EO6” or the “Order”) reflects a major thrust of the administration of President Muhammadu Buhari. The Order seeks to preserve suspicious assets connected with corruption and other relevant offences, by restricting dealings in them in any way until the final determination by a court of competent jurisdiction of any corruption related matter against the owners of such assets. The Order particularly focuses on Nigerian citizens who are either past or current government officials, politicians and politically exposed persons. However, unlike the five EOs issued before it, the EO6 has attracted criticisms from many quarters. While some claim the President seeks to arrogate judicial powers to himself in violation of the Constitution, others believe there is no need for the EO6 as there are sufficient statutes specifically covering the issues the Order intends to address. Does the EO6 actually grant to the President power, which is ultra vires that granted by the Constitution of the Federal Republic of Nigeria 1999 (as amended)

(the “Constitution”)? Is the Order a necessary complement to existing legislation on corruption? Is the making of the Order as a whole unconstitutional? Of what importance is the Order to the development of the Nigerian economy? This article seeks to re-examine the general purport of the EO6 and assess its usefulness to good governance, equity and the rule of law. SYNOPSIS OF THE ORDER The EO6, which was signed by the President on July 5, 2018, contains six (6) sections and two (2) schedules. Essentially, the legal basis and moral justification for the Order are stated in the recital, where the President made proclamation and declared as follows: “By the powers vested in me under Section 5 of the 1999 Constitution as amended which extends to the execution and maintenance of the Constitution,

all Laws made by the National Assembly (including but not limited to Section 15(5) of the Constitution) to, abolish all corrupt practices and abuse of power, it is the duty of any responsible government to restrict dealings in suspicious assets subject to corruption related investigation or inquiries in order to preserve same in accordance with the rule of law and to guarantee and safeguard the fundamental human rights”. The gist of the EO6 is contained in sections 1 to 5 wherein provisions were made on the objectives, scope, framework for implementation and sanctions for contravention of the Order. Provisions were also made in for means by which aggrieved persons may seek legal redress against actions taken pursuant to the Order while major terms used in the EO6 are also defined such as: asset; corruption or corrupt

practices; enforcement authority; entity; other relevant offences; and person. Section 6 states the effective date of the EO6 (the date the Order was signed) and section 7 states its title as: “Preservation of Suspicious Assets Connected with Corruption and Other Relevant Offences, 2018”. The First and Second Schedules to the EO6 create respectively a list of pending cases (155 cases in total) to be immediately affected by the Order; and a list (subject to alteration from time to time by the Honourable Attorney General of the Federation “HAGF”) of agencies of the Federal Government of Nigeria (“FGN”) charged with the responsibility for implementing the Order. Accordingly, without prejudice to any laws or existing suits as well as any rights arising therefrom, with the coming into effect of the Order: All assets within the territory

of Nigeria belonging to any Nigerian citizen who is responsible for, complicit in, or directly or indirectly engaged in corrupt practices and other relevant offences are to be protected from dissipation forthwith. Where the person linked to corrupt practices is not the owner of the connected assets, it suffices that he exercises control over, or is in possession of the assets. This extends also to any person under investigation for having materially assisted, sponsored or provided financial or technological support for the person linked with suspicious assets. Particular reference is made to suspicious assets linked to a current or former government official and politically exposed person or any person acting on behalf of the official; The HAGF is to coordinate enforcement of the Order on behalf of the FGN by employing all available lawful or statutory means, including seeking appropriate orders of court where necessary. In preserving suspicious assets from dissipation, the FGN shall ensure that they are not withdrawn or transferred from the jurisdiction of Nigerian courts or dealt with in any way until the final determination of any associated case by a Continues on page 31

New NBA leadership begins journey towards financial governance and accountability …Engages Accounting Firm, PricewaterhouseCoopers THEODORA KIO-LAWSON


he leadership of the Nigerian Bar Association (NBA) has taken its first step towards financial governance and transparency with its official engagement of international accounting firm, PriceWaterCoopers (PwC) to oversee the financial management of the association. The President of the Bar, Paul Usoro, SAN in an official statement dated October 6th, 2018, revealed that PwC was officially engaged on Thursday October to him,

this move is According to him, the PwC engagement is in furtherance of the commitment the new leadership made to the effect that transparency and accountability would be the administration’s watchword at all times. He said, “Earlier, during the campaigns, I pledged to strengthen the NBA’s finance governance structures by, amongst others, preparing and publishing quarterly financial statements which would contain sufficient information that meets International Ac-

counting Standards and best practices.” Outlined in the PwC Letter of Engagement (LoE), is a detailed scope of work, which includes, preparation of financial statements; and adjustment journal entries for various accounts, ledgers and sub-ledgers; update the respective schedules accordingly; and prepare an updated trial balance and financial statement for the period from August 1st to August 31st, 2018; Other deliverables inPaul Usoro

Continues on page 32



Thursday 11 October 2018




Banker-customer disputes resolution in Nigeria- is arbitration the way forward? whereas litigation is often a catalyst for permanent deterioration in the parties’ relationships.



n Nigeria disputes between banks and their customers are typically resolved through litigation in the courts. By section 251(1) of the Constitution of the Federal Republic of Nigeria 1999 the Federal High Court has exclusive jurisdiction to entertain disputes between banks and other financial institutions, but the section contains a proviso which confers concurrent jurisdiction on the Federal and State High Courts for matters between a customer and his bank in respect of transactions between the customer and the bank. Due to the typical relationship between a bank and its customer, banker-customer disputes are almost invariably commercial disputes, which usually ought be resolved within a reasonable period of time. However, over the years, the sheer number of cases filed in both the Federal High Court and State High Courts (particularly Lagos) in Nigeria has meant that the wheels of justice tend to grind much slower than expected by commercial litigants. With the passage of time and unabated increase in the number of cases filed in the courts, it is not difficult to predict that the already significant delays in the conclusion of cases are more than likely to increase in severity. As a consequence, the exploration and consideration of alternative mechanisms of resolution of banker-customer disputes is not only desirable but also a necessity. Why are banker-customer disputes not usually resolved by arbitration? The issue of jurisdiction is one that is typically most hotly contested by lawyers in Nigeria, irrespective of whether a genuine question of jurisdiction actually exists, as a result of which, for whatever it is worth, it is important to briefly address the point here. It is the law in Nigeria that an arbitration clause does not have the effect of ousting the court’s jurisdiction to entertain the same dispute that is subject to the arbitration clause. Therefore, either party to such an agreement may, before a submission to arbitration or an award is made, commence legal proceedings in respect of any claim or cause of action included in the submission. See CITY ENGINEERING (NIG.) LTD V. FHA. Consequently, the referral of a banker-customer dispute, which is essentially contractual, to arbitration does not have the effect of ousting the jurisdiction of the Federal or State High Courts to entertain such disputes and are arbitrable under Nigerian law. Banking sector disputes in Nigeria are numerous and usually arise from a myriad of issues deriving from relationships between banks and their customers, employeremployee relationships, inter-bank interactions, intra-bank relationships and sometimes from interactions between banks and the Central Bank of Nigeria (CBN) in the course of the CBN’s performance of

its statutory regulatory functions in relation to the banks. The overwhelming majority of banker-customer disputes in Nigeria revolves around loan facility defaults by bank customers or inappropriate loan facility management by the banks and is the focus here. In most of these cases, the default dispute resolution mechanism, after negotiation, is litigation. For the banks, available options generally include debt recovery actions, winding up or receivership proceedings, while for the customers, options include counterclaims in bank loan recovery actions or pre-emptive actions against the banks. In all of these scenarios, the parties usually seldom consider the option of arbitration as a possible mechanism for the resolution of their disputes. The principal reason why most banker-customer disputes are not resolved by arbitration is that most of the loan facility agreements, from which such disputes arise, do not usually contain arbitration clauses. Having regard to the fact that loan facility agreements are almost invariably drawn up by the banks, the reason for the exclusion of arbitration clauses from such agreements is best known by the banks. In this respect, there is a distinct possibility that the banks do not believe that arbitration is an effective dispute resolution mechanism for disputes that may arise pursuant to loan facility agreements. Another possible reason for this behaviour of banks is that litigation very often results desirable outcomes for the lender,

which is usually the party with the dominant bargaining power in loan agreements. Should more banker-customer disputes be arbitrated? In a banker-customer dispute, litigation does have benefits for the banks. For instance, litigation offers banks the possibility of obtaining summary or default judgments from the court, where the circumstances so allow. In such circumstances, banks are able to obtain judgment from the courts relatively quickly and in a manner that brings about speedy disputes resolution, as usually required by commercial disputes. However, the present reality is that, by commercial standards, the likelihood of a quick resolution of banker-customer disputes through litigation is rapidly declining, as the courts’ dockets continue to swell yearly. As a result, it is not uncommon for banker-customer disputes to remain pending in court system and unresolved for upwards of ten years. Having regard to the average time it presently takes for a commercial case to make its way through the court systems, surely, there are more than enough reasons for more banker-customer disputes to be resolved by arbitration, as opposed to litigation. One of such reasons is the fact that arbitration affords the parties the opportunity to have their commercial disputes resolved by experts in the filed of the subject matter of the dispute, as opposed to a judge who is trained to deal exclusively with legal issues, due

to the fact that the parties are able to agree as to the qualifications of the arbitrator(s). Also, arbitration proceedings are not as prone to the factors that tend to cause delay in litigation proceedings, such as unnecessary adjournments, unending jurisdictional or procedural objections and interlocutory appeals. In many banker-customer disputes, the question is not as to whether a liability exists, but as to the extent of that liability, which has already be acknowledged by the parties to exist. In this respect, the inherent nature of banking transactions means that the resolution of extent of liability disputes will involve the consideration of technical aspects of banking and finance. However, in as many of such cases, where the parties have resorted to litigation, this narrow issue of extent of liability often gets lost in the procedural skirmishes between the parties, such that even upon the conclusion of the litigation the issue remains unresolved, despite several years of litigation. In contradistinction to litigation, where the issue between the parties is the determination of extent of liability, arbitration affords the parties the opportunity to narrow their focus to the real issue in controversy, with the possible benefit of having that issue resolved by an arbitrator most equipped to deal it. A collateral benefit is also that arbitration, due to its less adversarial nature in comparison to litigation, may have the effect of preserving the relationship between the banker and its customer even after the resolution of the dispute,

Will anything change? In banker-customer disputes, particularly ones with high value subject matters, the parties (especially the banks) generally prefer litigation due to their ability to leverage on the coercive powers of the court, especially where preservative orders are required. Having regard to the fact that most agreements on which banker-customer relationships are based are drawn up by the banks, in view of the inherent benefits of arbitration, it is left to be seen whether banks will be disposed to giving up the significant leverage that litigation affords in the resolution of banker-customer disputes. However, notwithstanding some positive judicial reforms, particularly in Lagos State, in the absence of more radical reforms in the administration of civil justice in Nigeria, there is little expectation of any significant improvements to the speed of justice delivery in commercial disputes. In such a scenario, dealing with the question of adoption of ADR mechanisms, such as arbitration, to the resolution of banker-customer disputes is fast becoming more necessary than desirable. The tragic consequence of delay in the determination of commercial disputes in Nigeria is that several trillions of Naira remains trapped in the court system, with no route to exit in sight. As a result, an approach to the resolution of banker-customer disputes that ensures that the amount of money trapped in the courts does not increase but reduces is most certainly one that is not only welcome but also most necessary. A possible option may be for the Central Bank of Nigeria, as the market regulator, to issue regulations providing that arbitration should be the default dispute resolution mechanism for certain types of banker-customer disputes, as it has already done with the E-Payment Dispute Arbitration Framework, provided the fundamental arbitration principle of party autonomy is preserved. Ultimately, however, the development of banking and finance arbitration rests largely on the expertise and commitment of the arbitrators and the preparedness of the courts to allow arbitration thrive through a non-interventionist approach to the litigation of arbitration matters. In this regard, there is no question that the market possesses great capacity in terms of arbitrators with the experience and expertise to resolve banker-customer disputes and the courts are gradually adopting a non-interventionist approach to the litigation of arbitration matters. Both of these positives are helpful but perhaps their benefits are yet to be seen because the scope for improvement is much greater.

Mofesomo Tayo-Oyetibo, ACIARB

Thursday 11 October 2018






Re-examining the purport of the Executive Order.... Continued from page 29

Million Naira (N50,000,000) or its equivalent in foreign currency; (ii) any misappropriation of government asset and corruption related to government contracts or bribery; or (iii) the transfer or the facilitation of the transfer of the proceeds of corruption. Similarly, “other relevant offences” is defined as any act, which may constitute an act of terrorism, financing of terrorism, kidnapping, sponsorship of ethnic or religious violence, economic sabotage, cases of economic and financial crimes, including acts contributing to the economic adversity of the Federal Republic of Nigeria as defined by relevant laws. LEGAL ISSUES AROUND THE ORDER Essentially, the legal issues arising from the EO6 have been whether or not it violates the provisions of the Constitution, particularly the fundamental right of citizens to own movable and immovable properties which shall not be subject to expropriation except in accordance with law, and the age-long principle of separation of powers among the executive, legislative and judicial arms of government. Critics of the EO6 have outlined several concerns on its legality. By creating rights, obligations, powers and sanctions by executive fiat under which private properties of citizens can be confiscated, it has been argued that the Executive seeks to usurp the legislative powers of the Federation in violation of section 4 of the Constitution. In the same vein, strong opposing views have been advocated to the effect that the powers granted to the HAGF in the EO6, to use all available “legal” means to place restriction on assets of persons where the HAGF has reasonable suspicion that such assets are corruption related, violates the constitutional presumption of innocence, smacks off arbitrariness and totalitarianism, imposes the subjective view of one government official on the general public and seeks to usurp the judicial powers of the Federation in contravention of section 6 of the Constitution. As previously noted, there is another school of thought which opines that the EO6 is unnecessary as there are sufficient extant primary legislations dealing with what the Order seeks to achieve. Notably, agencies of the FGN such as the Economic and Financial Crimes Commission (EFCC),

court of competent jurisdiction. Furthermore, the HAGF is empowered, subject to the powers granted under section 174 of the Constitution, to approach the court for an order blocking or freezing or confiscating any fund or asset within Nigeria, which he has reasonable cause to believe is connected with corruption, pending the conclusion of an investigation or legal action; Enforcement Authorities (including but not limited to the 19 Agencies of the Government listed in the Second Schedule to the EO6) are directed to diligently and rigorously collaborate with the Federal Ministry of Justice in implementing the Order; Any person who contravenes the provisions of the Order by: (i) interfering with the free exercise of the authorities of the Office of the President (ii) destroying evidence (iii) corruptly inducing witnesses through cash/kind, and (iv) generally perverting the course of justice; shall be prosecuted in line with the provision of applicable extant laws; and In line with constitutional provisions, any person who alleges that his rights have been, are being or are likely to be contravened by any of the provision of the EO6 may apply to a competent court in his jurisdiction for redress. Under the EO6, a “person” means a natural or juristic person. An “asset” means all properties including funds, liquid assets (bank balances), receivables, stocks and bonds held in portfolios, insurance policies, shares in listed or unlisted companies, and all manners of fixed assets held directly or indirectly through corporate entities, trust structures and intermediaries. An “entity” means a partnership, association, trust, joint venture, corporation, group, subgroup, or other organization. Furthermore, the meaning of “corruption or corrupt practices’’ under the EO6 is that ascribed to it under any enactment, and includes (i) any corrupt activity generally involving economic sabotage, human trafficking, drug trafficking and terrorism involving funds or assets in the sum or value in excess of Fifty

Independent Corrupt Practices and other Related Offences Commission (ICPC), National Agency for Food and Drug Administration and Control (NAFDAC), National Drug Law Enforcement Agency (NDLEA), and other similar statutory bodies are empowered under their Establishment Acts and some enabling laws to confiscate suspicious assets, albeit upon an order of a court of competent jurisdiction, pending investigation, enquiry or trial. In summary, critics believe that the EO6 is ultra vires the executive powers of the Federation vested in the President by section 5 of the Constitution. From the Government’s pivotal position, the EO6 is adjudged legal and constitutional having laid its foundation upon sections 5 and 15(5) of the Constitution as stated in its previously quoted recitals. It is equally important to note that the fundamental right granted in section 42 of the Constitution to own private property and the guarantee provided against expropriation of property, are limited under certain circumstances. The exemptions to the general rule against expropriation of property include (i) contrary actions taken pursuant to the execution of judgements or orders of court; and (ii) the temporary taking of possession of property for the purpose of any examination, investigation or enquiry. The thrust of the EO6 could therefore be validly rooted in these two exemptions which are provided in sections 42(2)(e) & (k) of the Constitution. Interestingly, the courts in various judicial decisions have readily held that security and law enforcement agencies (like the EFCC), acting pursuant to the asset freezing/forfeiture provisions in their Establishment Acts or any other enabling law, have powers to confiscate suspicious assets subject to validly made court orders, without violating the provisions of section 42 of the Constitution. See the case of Esai Dangabar v Federal Republic of Nigeria (2014) 12 NWLR (Pt. 1422) 575. Also, the powers of the President to execute and maintain the

Constitution and to execute all laws made by the National Assembly as well as all matters with respect to which the National Assembly has power to make laws (which is the primary objective for issuing the EO6 and addressing it to the Ministries, Departments and Agencies (“MDAs”) of Governments); has been vehemently advocated by the Executive as counter-argument against allegation of usurpation of the powers of the Judiciary. Advocates of the EO6 have maintained that the powers granted to the HAGF are not arbitrary as they are to be exercised subject to extant laws and constitutional provisions. They also argue that the “reproduction” of the provisions of section 46 of the Constitution in section 3 of the Order, whereby aggrieved citizens are enjoined to approach the court for redress, shows that the EO6 is not conceived to be an extrajudicial instrument by the Government. CONCLUSION Corruption is a social menace with crippling effects on economic growth. High incidence or perception of corrupt practices in a country erodes the confidence of foreign investors and development partners, thereby impeding inflow of needed capital for development. Available statistics indicates how much damage corruption (with associated vices including bribery, fraud, economic sabotage, poor corporate governance, conversion/looting of public assets by government officials etc.) has done to the nation. Transparency International, the global anti-corruption watchdog ranked Nigeria low in its 2017 Corruption Perception Index (CPI); placing the country in 148th position out of 180 countries ranked in order of perceived transparency in its public sectors. Similarly, the 2017 National Corruption Survey released by the Nigeria Bureau of Statistics (NBS) indicted public and government officials with their private sector cronies for high level bribery and corruption. It is therefore axiomatic that any well-meaning Government (particularly the

President Muhammadu Buhari administration which prides itself on its zero tolerance for corrupt practices) would be mindful of eradicating corrupt practices by all means possible. However, care must be taken to ensure that anti-graft policies are executed through legal and constitutional means, as extrajudicial execution of well-intended policies may produce unintended consequences which may stifle both domestic and foreign investments. For instance, the right to own private property without the fear of possible confiscation in breach of extant laws is a corollary of an open economy. Incidentally, private capital follows open economies run on the basis of rule of law. Looking at the wide definitions given to the words “assets” and “entity”, it is also axiomatic that implementation of the Order would be of great interest to investors and development partners around the world and could either enhance or inhibit the progress already recorded under the Government’s Ease of Doing Business initiatives. Thus any attempt to restrict dealings in suspicious assets of persons in Nigeria must be unquestionably rooted in law. We note, to the extent that the President issued the EO6 pursuant to his powers under the Constitution and directed MDAs under the purview of the Executive to implement same, the Order remains valid and applicable unless and until declared void by a court of competent jurisdiction. Whether critics will succeed in obtaining appropriate judicial pronouncements against the Order, and whether the Executive will implement the Order in a lawful and equitable manner to engender stability and confidence respectively in the Nigerian political and economic landscapes; are two things which remain to be seen.

The Grey Matter Concept is an initiative of the law firm, Banwo & Ighodalo DISCLAIMER: This article is only intended to provide general information on the subject matter and does not by itself create a client/attorney relationship between readers and our Law Firm. Specialist legal advice should be sought about the readers’ specific circumstances when they arise.




Alleged Sexual Assault: HEDA invokes FOI on LASU, seeks report of investigation on varsity lecturer


he Human and Environmental Development Agenda (HEDA) Resource Centre, which is a non-governmental organization and non-partisan human rights and development league, has issued a Freedom of Information request to the authorities of the Lagos State University (LASU), seeking the report of

investigation on allegation of rape, ungodly sexual assault and harassment made against one its lecturers, Dr Gbeleyi Emmanuel. The FOI request, which was dated 12th September, 2018 and signed by the Chairman of the Resource Centre, Mr Olanrewaju Suraju, stated that allegations of such nature are capable of creating diffidence in the general society on the education of the girl child and more devastating effect on the confidence of students in higher institutions of learning. The request read: “Our office received a victim’s report on grounds of anonymity detailing how the above-named lecturer, Dr. Emmanuel injects his female students with unknown drugs in the name of experimentation and forcefully raping them without their consent when they become unconscious, due to the effect of the said injection. “The victim who made the report claims that several students have fallen victim of this nefarious acts of the lecturer. As a civil society organization poised towards enthroning human rights and condemnation of its violation in any form, we condemn the

Thursday 11 October 2018

New NBA leadership begins journey towards financial governance Continued from page 29

alleged actions of Mr. Emmanuel in its entirety, as we also vehemently insist that the alleged act is the height of violation of the student-teacher relationship, a corruption of the educational values of the institution and an incorrigible exploitation of naïve and unsuspecting students. We submit that these issues have a ripple effect on society in general and all efforts must

be made to rid our institutions of learning of persons of questionable character who predates on naïve and innocent students.” The group added, “We need not point out the fact that rape, sexual assault, harassment or intimidation of any form in a student-lecturer relationship normally result in a wide-ranging number of psychological effects on a student victim, from irritation, frustration to anxiety, stress, trauma and can even lead to extreme psychological damage in future while the impact on a victim’s academic career may be significant and leave them in total ruins, posing great problems both for the victims, the higher education institutions and the labour market in Nigeria. ‘We do not want such for our daughters, sisters, friends and relatives who are students of LASU and in view of recent studies that show an upward trend of occurrence of rape, sexual assault and harassment in higher education institutions in South West, Nigeria, we were reliably informed by the victim that an official report was filed with your good office, demanding investiga-

tion into the particular case and other cases involving Dr. Gbeleyi. It is imperative for your good office to ensure an immediate and urgent action with a view to rid the institution of undesirable elements seeking to add the institution to the growing statistics. Furthermore, we wish to suggest that you use your good office to ensure the development of key anti-sexual

harassment policies for the institution, establishment of telephone hotlines for the report of cases and employment of trained counsellors to attend to victims in relevant cases.” The Centre also stated its demands to the authorities to include: “Reported cases of Lecturer-student rape, sexual assault and harassment in the institution in the last five years; Reported cases of rapes and sexual harassments particularly against Dr. Gbeleyi; The actions taken by the management with respect to these cases; and details of the mechanisms and policies currently in place to curb, address or offer redress with respect to cases of rape, sexual assault and harassment in the institution. “We make the above request pursuant to the provisions of Section 2, 3, and 4 of the Freedom of Information Act, 2011 and look forward to the prompt receipt of the requested information and in any event, within seven (7) days of this application as provided under the Freedom of Information Act, 2011,” HEDA said.

clude gathering data and other relevant information through interviews and walkthroughs to gain understanding of and insight into the current finance operations and processes of the NBA; assess the adequacy and effectiveness of the finance function and its operating model including its, revenue collections; payment processes; treasury management; enabling technology; and also identify gaps, areas of inefficiencies, revenue leakages, control weaknesses, risk exposures, and make recommendations to address them. Usoro also disclosed that PwC will begin its work by obtaining relevant financial information such as, the previous year ‘s current and non-current assets; current and non–current liabilities, and net assets; review and validate key financial assets; current year ‘s trial balance Supporting schedules for current year ‘s trial balance, accounts, ledgers, and subledgers, Bank statements, bank account and ledger account reconciliations, Fixed

asset register, amongst other things. He further said, “The PwC engagement marks the beginning of our journey towards those promised standards of financial probity, accountability and transparency. Upon the submission of the PwC Deliverables, as detailed in the afore-excerpted Project Scope/ Work Plan, we would promptly publish and make them readily available to our members; these would also constitute agenda items for discussion at the immediately following National Executive Committee meeting.” The NBA under the leadership of Paul Usoro, SAN plans to institutionalise these standards of financial governance, probity and transparency in the psyche of the association and make them irreversible at the national level within the 2-year tenure of this administration in the hope that these would rapidly percolate down and become pervasive in the branches and other organs of the Association.

Thursday 11 October 2018






Thursday 11 October 2018

Thursday 11 October 2018




Live @ The Exchanges Stock market extends loss path IHEANYI NWACHUKWU


n additional loss of about N13billion recorded at the sound of closing gong Wednesday further proved that the bears still control stock trading on the Lagos Bourse. This fourth quarter got off to a bearish start and the stock market has continued to shed its value. The Nigerian Stock Exchange (NSE) All Share Index (ASI) depreciated by 0.11percent to 32,382.58 points as against 32,417.70 points recorded previously. With market activity moderating week-on-week (w/w) and investor sentiment remaining tepid, equity research analysts at Lagos-based Vetiva Capital who had anticipated a negative start to this week, said “the quarter maintains a bearish course.” Despite that 21 stocks

gained as against 17 losers, the Nigerian equities market still closed on a negative note. The market’s year-todate (YtD) returns currently stands at -15.32percent. The value of listed stocks decreased from N11.835 trillion to N11.822 trillion. Nestle Nigeria Plc led the advancers list after its share price increased from N1405 to N1420.3, representing an increase of N15.3 or 1.09percent. Chemical and Allied Products Plc increased from N30 to N33, representing N3 or 10percent increase. Flour Mills Nigeria Plc stock price rose from N19.9 to N20.4, up by 50kobo or 2.51percent. Unilever Nigeria Plc stock price increased from N42 to N42.5, up by 50kobo or 1.19percent; while Red Star Express Plc increased from N4.3 to N4.6, up by 30kobo or 6.98percent. Nigerian Breweries Plc stock price decreased from N88 to N85.5, down by N2.5

L – R: Oladele Afolabi, director, portfolio management, Debt Management Office; Titi Odunfa Adeoye, CEO, Sankore Investments; Oscar N. Onyema, CEO, Nigerian Stock Exchange; Nnamdi Okonkwo, MD/CEO, Fidelity Bank plc, and Jubril Enakele, CEO, Zenith Capital, during NSE Bloomberg CEO Roundtable at the Exchange yesterday.

or 2.84percent. Transcorp Hotel Plc stock price declined from N6.75 to N6.1, down by 65kobo or 9.63percent. UAC of Nigerian Plc stock price also dipped

We have embraced cloud-based technologies –NSE CEO


scar N. Onyema, Chief Executive Officer, Nigerian Stock Exchange (NSE) has noted that the Exchange has embraced cloud-based technologies “by building our own Data Centre to provide a number of services ranging from cloud computing, storage and database offering, networking, and management tools, to mention a few.” He noted that the Exchange has also acquired SMARTS, a robust market surveillance technology with Artificial Intelligence to monitor and prevent marker abuse by fraudsters. “This technology helps NSE to proactively forestall market manipulation, spoofing and so on. This has elevated the investor protection systems at the

NSE to the same level as the exchanges in the Intermarket Surveillance Group (ISG), a global organisation which monitors for manipulative and fraudulent market practices, and shares information between international members,” the NSE CEO said. Onyema disclosed this at the 4th edition of NSEBloomberg CEO Roundtable themed, “Reshaping the Nigerian Economy for Sustainable Growth: Leveraging the Fourth Industrial Revolution as a Catalyst for Advancement”. Ideas generated in the past editions of the CEO Roundtable provided the Exchange with more insights in carrying out its advocacy efforts with policy makers, and some of these ideas have been implemented and have gone ahead to spur a rebound

of the economy, Onyema noted. “A recurring theme in previous editions of the CEO Roundtable has been the dependence of the Nigerian economy on a singular commodity, the inability to extract value across supply and value chains as well as unfavourable business conditions to create a diversified economy”, he noted. In order to capitalise on the opportunities presented by the Fourth Industrial Revolution, the Exchange is investigating the market potential of key emerging technologies in order to deploy solutions which will: empower a larger proportion of the populace to access the capital market; and unlock efficiencies in product and service delivery for capital market operators.

Eterna proposes N10bn Commercial Paper issuance


terna Plc proposes to issue N10billion 270-day Commercial Paper (CP). The company told the Nigerian Stock Exchange (NSE) in a notice signed by its Managing Director/CEO, Mahmud Tukur that funds raised in the CP will be used for working capital and general corporate purposes. The company is listed on the Petroleum and Petroleum Products subsector of the NSE Oil and Gas sector.

With share price at N6.2kobo as at October 9, 2018, the 1,304,144,647 outstanding shares of Eterna Plc are valued at N8.085billion. The Company which has acquired extensive experience over the past thirty years in the energy business is repositioning its operations to respond to the challenges in the sector. It is taking advantage of strategic opportunities to meet the needs of customers and increase returns to shareholders.

Eterna Plc is a manufacturer and distributor of premium lubricants, importer and /retailer of petroleum products including Premium Motor Spirit (“PMS”), Automotive Gas Oil (“AGO”), Aviation Turbine Kerosene (“ATK”) Low Pour Fuel Oil (“LPFO”), Base oils, bitumen and supplier of sub-sea production chemicals. The Company also trades across the barrel including Crude Oil, Condensate, LPG and Naphtha.

from N11.5 to N11, down by 50kobo or 4.35percent; FBN Holdings Plc declined from N9.45 to N9.2, down by 25kobo or 2.65percent; while Mobil Nigeria Plc

stock price declined from N175.2 to N175, down by 2kobo or 0.11percent. In 2,760 deals, stock traders exchanged 134,568,772 units valued

at N1.935billion. FCMB Group Plc, Fidelity Bank Plc, FBN Holdings Plc, and GTBank Plc were actively traded stock.

Bank, said, “We are very excited to hold the first of its kind Mortgage Fair in the Nigerian Banking Industry. Our mortgage proposition to our clients includes interest rates from 17.5percent percent ; clients can secure loans of up to N100million and can make outright purchases of properties in Lagos and Abuja. The panelists were Adebisi Adeniji, Deputy Registrar, Titles; TPL Osifuye Adesanya Olufunmiloayo, General Manager, Lagos State Physical Planning Permits Authority; Adeola Olusodo, DGM, Lagos State Development and Property Corporation; Joke Gbenro, Managing Partner, Adebanke Adeola & Co. The fair also had exhibition booth allowing clients process loan applications on the spot with immediate

free consultation from real estate developers, real estate lawyers and officials from the Lagos State Government. “In addition, we are also offering clients the flexibility of securing mortgages not just as individuals but together with their spouses but with their parents, siblings or even children. For us at Standard Chartered Bank Nigeria Limited, convenience, ease of doing business and access to finance are just some of the added values and best in class services and products we bring to our clients,” Faloye. The Bank is currently offering various investment products and working closely with the lands registry in select states to ensure owning a home in Nigeria becomes achievable.

Standard Chartered hosts first of its kind mortgage fair in Nigeria


t a n d a r d Chartered Bank Nigeria Limited hosted clients and members of the public to a first of its kind mortgage fair in Nigeria recently. The fair which held in Federal Palace Hotel, Victoria Island , brought together key stakeholders from across the country within the real estate and property development sector. Highlight of the fair was the interactive panel session where clients and members of the public received detailed information on due diligence around property ownership; the role of banks; compliance with government regulations and the benefits of insurance and legal counsel. Speaking at the event, Mobola Faloye, Executive Director, Risk of the




Thursday 11 October 2018

GARDEN CITY BUSINESS DIGEST Sustainable Development Goals:

Air pollution in Niger Delta takes front burner as 1000 non-state actors brainstorm in PH INNOCENT ETENG, FAVOUR ICHEMATI & KELECHI ANOZIE


conomic development for Nigeria is said to be beyond brick and mortar affair but a strategy of sustainable development embracing many facets. Thus, as the world came together, on Tuesday, September 25, in commemoration of the Global Day to Act for the Sustainable Development Goals (#Act4SDGs) and to galvanize support towards their rapid implementation; for some civil society organisations across Nigeria, it was not time to dance haphazardly. Instead, they felt it was rather time to be strategic, mirror down to one of Nigeria’s most pressing needs and push for solution. Inclusiveness is the rallying cry, and development must touch all aspects including bringing out the human in all of, according to the lead organizer, Mina Ogbanga, south-south coordinator of the SDGs. So resource persons and civil society organization traveled to the South-South zone, a place rife with environmental pollution, to have a policy dialogue with

stakeholders on the issue of air pollution, which fall under goals 11 (Sustainable Cities and Communities) and 13 (Climate Action). The dialogue took place at the Rivers State House of Assembly complex in Port Harcourt, with participants cutting across the six SouthSouth states and ranging from government representatives to media personnel, pro-SDGs groups, the academia, students, and nonprofits among others. Ogbanga said: “The peculiarity of our situation in the South-South defined the choice of the priority we want to act on. Now, more than ever, flood is threatening our existence. Climate change, due to various factors, has been on the fore. This cannot be underestimated. Considering that nine out of 10 people breathe polluted air daily simply made it a priority for attention.” “ This policy dialogue seeks to achieve two broad objectives; ignite the CSCSD (Civil Society Coalition on Sustainable Development) regional assembly and redefine discourse on critical issues like air pollution,” added Ogbanga, Zonal Convener of CSCSD, under whose aus-

Mina Ogbanga, coordinating, CSCSD for South-South pices the CSOs met with stakeholders on the theme, “Strengthening Capacity of Civil Society to Localize, Monitor and #Act4SDGs to #Stop Air Pollution”.

CSCSD is a coalition of over 1000 CSOs coming together, primarily, to work and monitor the implementation of the SDGs across Nigeria. The SDGs are a set of 17 goals

mapped out by the United Nations and agreed upon by 193 countries in 2015. They constitute a-15-year agenda aimed at achieving sustainable development globally, between 2015 and 2030 (Agenda 2030). The 17 goals build on the eighth Millennium Development Goals (SDM) that existed between 2000 and 2015 but were later said to be narrow and not widely implemented as expected. Apart from those that fall under CSCSD’s dialogue, the rest of the 17 goals are: No Poverty (goal one); Zero Hunger (two); Good Health and Well-being (three); Quality Education (four); Gender Equality (five); Clean Water and Sanitation (six); Affordable and Clean Energy (seven); Decent Work and Economic Development (eight); Industry, Innovation and Infrastructure (nine); Reduced Inequality (10); Responsible Consumption (12); Life Below Water (14); Life on Water (15); Peace, Justice and Strong Institutions (16); Partnership for the Goals (17). Delegates agreed to work together believing that partnership and individual responsibility were key to ending air pollution and by exten-

sion implementing the SDGs. “Goal 17 of the SDGs is one of the most important goals of the SDGs - partnership to be able to achieve the SDGs. So we are interested in partnering with the private sector, in partnering with civil societies to achieve the SDGs. This is a springboard for us,” said Toru Ofili , the special adviser to Rivers State governor, Nyesom Wike, on the SDGs. “It feels good to see an array of development actors desirous of a better South-South.” National coordinator of CSCSD, Tola Winjobi, said the UN was awakening a sense of urgency for all and sundry to consciously act for the goals, hence CSCSD was invited by the UN to work in that direction. “In August, we received a memo from the UN DESA and UN Action Campaign calling all to action for the SDGs. CSCSD was specifically invited to consider joining the Global Day to #Act4SDGs by taking action. We did not flinch in getting across to our members across Nigeria to take action to #Act4SDGs in their various states and communities. One of those efforts is what you are experiencing here today with our SouthSouth coalition putting this together,” he said.

Media access: The sorry side of the PH convention

Port Harcourt by Boat With



hey say there are almost 200 million Nigerians. So, anywhere a big event was being held, how many journalists would be enough to ‘see’ things for Nigerians? The PDP determined that at least 400 persons (delegates) should represent the 200m Nigerian to express their choices. Even the APC that did direct primaries where 14m allegedly voted, they still needed 7000 delegates to go affirm what the 14m said earlier. By this simple logic, Nigerians needed at least 4000 journalists (media men) to go see how the next likely president or the great challenger would be selected. But, the number of journalists that went there was less than 500.

Why then was it difficult to allow them? Even during accreditation, the national publicity chairman the PDP with the publicity sub-committee chairman was said to have sent only 20 such cards to Rivers State. PH alone has over 500 journalists. Many other ones were expected from nearby states. What a planning strategy. But in international events, the organisers would advertise media accreditation and receive requests to enable them. They can reject some requests based on principles, but anyone that was approved was given access. Not in Nigeria of anything can go. You just determined that 20 was good enough for the Niger Delta region. We later learnt that seeing the folly, they allowed people without accreditation cards, but rejected those that had it; an irony too. Next, the Adokiye Amesiamaka stadium located at the womb of the mega city Chibuike Amaechi was trying to build was designed to accommodate 40,000 sitting spectators. Now, the number of expected delegates was 4000 but at last, only 3,272 were accredited at last. This means that there were

at least 336,000 vacant seats in there. So, what did the organisers, especially Gov Ifeanyi Okowa, the chairman of the planning committee, instruct the gate keepers that made them not to allow media people in? Of a truth, media people were allowed earlier in the day, far before the time of starting. The event had been advertised for 11am with entry to be from 7am. Later, the organisers shifted it to 3pm, and later 6pm, yet it did not start before by that time. The reason Okowa gave was that many states arrived very late. It could be true because flights going to PH were out of stock in many cities especially Abuja. Many states had to resort to road, but remember that most highways into Port Harcourt are kidnap zones. Nobody travels through routes like Ahaoda to PH, Owerri to PH or Okpala to Ph (via Iguruta) by as early as 8pm and hope to make it alive. On these routes are hordes of kidnappers and ritual killers harvesting human organs openly and recklessly. Some of those arrested say they had been commissioned to provide 100 female human heads, just in one camp. Most

criminal gangs so far busted have confessed to having camps in bushes along these highways. No helicopter has tried to do an over-fly with cameras to expose what these bushes that ought to be yielding food plants contain. There have been no efforts to comb these forests and save hundreds tied to stakes and languishing therein. Was it not the manhunt of Osisikankwu that exposed the Evil Forest of Obingwa where people were trapped, tied to trees, and killed at will? So, how would anybody expect the delegates and journalists to make it through these forests and routes by night, in order to meet up on time to gain access? Often, Nigerians hardly think through their policies, and this seems to be the bane of development implementation. Besides, many things were happening at the same time in hotels around town where delegates were camped, where one aspirant alone was said to have bought up 2000 hotel rooms to put those that would accept his hand of fellowship. Many meetings were going on to harmonise camps and one big meeting was going on as at 7pm to reach a consensus and come

to announce it at the venue. Some top journalists therefore chased these hints around town. Also, miles of spaces near the venue had been blocked, requiring people to come down from their vehicles to trek to the only entrance alowed into the 40,000-sitting capacity stadium. Media men who got there by 4pm or so were not allowed to enter, and nothing would change the decision. Journalists waved their accreditation cards plus their media house cards, but these meant nothing to the gatekeepers. Even when one senior DSS operative gathered the media people and took them to the so-called VIP gate and begged, the almighty gatekeepers would none of it. He salted away, his tail between his legs. Some observers milled around from the delegates gate to the VIP gate, but nobody wanted to look at them. A team of officials and technicians with valid-looking accreditation cards joined in begging and pleading, but nobody cared. Journalists tired of being pushed about went home. Some of these victims came from far and did not intend to look for rare hotels but wanted

to enter into the stadium and camp there till whenever the convention would end and go back to their states from there. It has always been so. Without being allowed to get into the stadium, how would they cope? They were seen lying on the grass verge outside the stadium, a sorry site. What was perplexing to some Rivers State government officials who eventually learnt of this tragedy is that the stadium was empty. With over 36,000 seats untouched, why would any gate official stop media men, observers, and officials who possessed valid accreditation and ID cards? Some journalists lost items and phones when pushing was going on. There was enough space inside and outside. Why were media men stopped, then? These are some of the baffling decisions made only in Nigeria. The refrain running through most journalists’ lips was; see why this party lost the last election? They became too proud and uncaring. The question now is, has anybody learnt any lesson? Else, why would an opposition party wishing to win hearts treat media people this way?

Thursday 11 October 2018




INVESTING IN RIVERS STATE Foreign investments:

ELANO forges bond with OFALARUN Eleme USA to develop Eleme IGNATIUS CHUKWU & GODWIN EGBA


rospects for massive foreig n investments into Eleme near Port Harcourt rose very high recently following visits by Eleme sons and daughters in the USA in a meeting facilitated by an indigenous investment company, Elano. This is said to be aimed at correcting bad habits and activities that may have hindered economic development of the area over the years. In the new thinking, peace and need to eschew violence seem to be on the front burner. Now, some few Eleme sons and daughters who have travelled beyond the shores of Nigeria and have been baked with sound education seem to wake up to tell their people that, “We must all rise up and take our destiny in our hands; we must break the shackle of underdevelopment sinking us and our generation.” A group of individuals of this class are the ELANO Investment Limited, Ofalarun Eleme U.S.A, and the O’ E-La Obor Eleme (a socio – cultural group) among others. Recently the chairman of the Board of ELANO Investment Limited, a chief, Gomba Okanje, played host to the leadership of Ofalarun Eleme USA INC. and O’Ela Obor Eleme and some American investors on a courtesy visit to the headquarters of ELANO in Port Harcourt. Ofalarun Eleme USA is an organization of Eleme people resident in the United States of America. It was a unique meet between Okanje and his August visitors as they struck a common bond towards the development of Eleme land and its people. In his usual character of open mindedness, Okanje assured the Ofalarun Eleme U.S.A group without

Gomba Okanje, chairman, Elano Investment mincing words that, “Our Company, ELANO, is ready to partner with you and your development programmes for Eleme Local Government Area”. Eleme Local Government Area is one of the 23 local councils that make up the present Rivers State. It is located about 21 km (13miles) South East of Port Harcourt, capital of Rivers State. It covers about 4,000 square kilometres of land mass with an estimated population of over

5,000,000 people. Economic analysts describe the place as a veritable treasure strove of oil, gas and petrochemical - rich industries - among them Eleme Indorama Petrochemicals Nigeria Limited, Nigeria’s Premier Port Harcourt Refinery Limited and Onne Oil and Gas Free Zone housing about 200 multinationals in on/offshore operations as well as the second largest sea port (NPA Onne).

These unique dollar-spinning facilities on Eleme land have earned it as a critical economic heartbeat and an engine room of Nigeria’s economy. It is a critical economic heartbeat and an engine room of Nigeria economy. Its economic endowment has etched the name in the global business community like other industrial cities of China, Singapore, United Arab Emirate (UAE) among others whose citizenry and geographical land space are feeding fat from robust socio – economic development. On the contrary, Eleme, with all its riches and well educated people, has been held back by poverty and wide spread corruption in Nigeria. Its socio – economic development seems slow. As a result, it is seen as a local council area of paradoxes. A first visit to the geographical habitation of Eleme with 10 major communities would drop a visitor’s jaw as he or she would utter, “is this Eleme I have been hearing abou?” Its internal access roads are as old as the creation of the place. Access to portable water, power (electricity), health facilities, among others, are still luxuries far from the poor. Majority of the people are contending with environmental pollution, ill health, and unemployment. One would be tempted to believe or say that both the governments of the past and the private sector operators have been reserved for some persons in the community as the gap between the poor and rich grows wider. Even blind people are seeing and bemoaning over the lack of cooperate social responsibility initiatives of private investors in the land. The chairman of Elano said further, “We will key into whatever programmes you have and see how we can improve upon the development

of Eleme,” He recalled that in 2017 when Ofalarun Eleme USA supplied hospital equipment to Nchia General Hospital and educational materials to the displaced people of Ekporo Clan, it was Elano Investments Limited that provided the logistics for the clearing of the equipment and the successful delivery of same to their destinations. The Elano chairman however said that the people themselves must be prepared to develop, otherwise any effort made to develop them would. He pointed out; “Until you tell yourself that you are ready to do something nobody will force you to do it.” Earlier, the President of Ofalarun Eleme USA, also a chief, Benjamin Osarolai, had thanked ELANO for the assistance it offered the organisation when they delivered hospital and educational equipment to Eleme He also appealed to the people of Eleme to embrace peace as no meaningful development can thrive where there is no peace. He assured them that Ofalarun Eleme USA would facilitate foreign investments in Eleme if there was peace. He described Elano Investments Limited as a very important development institution in Eleme. Earlier Ofalarun Eleme had presented a plea seeking partnership with Elano especially in its annual delivery of hospital equipment to Nchia General Hospital, Ogale; it’s educational initiative programme which it intends to extend beyond Ekporo to other communities in Eleme; and in the collaboration with its investment partners from the United States. One of Ofalarun Eleme’s investment American partners, Adolf Newman, disclosed plans to invest in housing estates, skills development centres, and shopping centres in Eleme. Other members of the Ofalarun Eleme USA delegation were Joe Obarichinwi (Secretary), John Gomba Abbey (Coordinator of the Home Based) and Nellie Newman. The O’E-la Obor Eleme team had its President General, Elder Israel Gomba Abbey, Vice-President, Michael Okereke and Mrs. Peace Olaka in attendance.

provide education to children, which ultimately improves the social condition of the family and in the long term, the community.“ Though Total will monitor the success of the scheme, Le-Cocq admonished the women to act as ambassadors of the future and do the company proud: “by utilising the facilities judiciously in their businesses, so as to be able to raise their level of income and be able to repay the loans, in order to enable others benefit.” Even as young boys and girls danced in Opobo traditional attires celebrating the venture, Orubo could not just speak for herself; instead, she volunteered to speak for others as well. “We want to thank Total because they are interested in the poor. They love the poor. We are so excited, the women are happy. You have done so much by empowering these women. At least those Who have not been able to continue their businesses would start again. “We are going to keep to the

rules. They are going to do all that it takes to make the cooperatives move forward. When you come back here, you will see the cooperatives moving and you will add more (money) and more and more,” she said excitedly, amidst cheers. Meanwhile, congratulating the women, Philippe Desriac, whose message was relayed through the company’s Business and Enterprise Development Monitoring Officer, Bassey Udohnyah, thanked stakeholders in the community, especially: “Royal fathers and traditional rulers for their continuous support and the time they have dedicated to work with us in realising this microcredit scheme and the other MoU (memorandum of understanding) items within their domain.” Opobo is one of the recent communities Total has replicated the scheme after the scheme recorded success in several other host communities, including Egi community that was, for several months, rife with cult-related killings and abductions.

Total takes micro-credit to Rivers islands IGNATIUS CHUKWU & INNOCENT ETENG


rancois Le-Cocq, Deputy Managing Director of Total E&P Nigeria Limited, feels that the United Nations’ observation that: “Rural women are key agents for development’ is just apt. The Un also says this category of humans play catalytic role towards achievement of transformational economic, environmental and social changes required for sustainable development. The CEO also knows that limited access to credit, health and education are among the challenges they face. Empowering them is essential, not only for the well-being of individuals, families and rural communities, but also for overall economic productivity”. Felicia Ama-Opu Orubo is one of such women with impeded access to microcredit loans. Worse, she is shut up in Opobo town, an ancient island in Opobo Nkoro Local Government Area of Rivers State where entry into the community can only be by water.

Like most African business and farming women, Orubo had faced much difficulty accessing microcredit to start a business and support her family. If it is difficult for women in road-accessible rural communities to get loans for business, why should she hope for much? she finally reasoned. But for women in Opobo, help has come as Le-Cocq also announced Total’s credit intervention for 80 women in in the community, on September 27. Orubo happened to be one of the beneficiaries. The intervention is through a micro-credit scheme that trains and allows women in Opobo to access business funding through four Total-registered and funded, but women-controlled cooperative societies. The women pay back their loans gradually with one percent interest rate. According Le-Cocq, as the women show commitment by paying back the loans, more funds would be injected into the cooperatives to enable the women access more funds

and further expand their businesses. Le-cocq, who was represented by the company’s Business and Enterprise Development Manager, Philippe Desriac, said the reason for focusing on women is because the company: “Recognises the potential of our women to impact the well-being of their families and direct the possibilities of lifting the family economically to new heights” and eradicate poverty in Total’s host communities, which Opobo is one. “This scheme is therefore designed to provide access to finance to our women who are often overlooked by the regular financial institutions because they (women) lack the required collateral, assets or verifiable credit history to be considered for loan, thus (Total is) creating an ever expanding pool of credit for new entrepreneurs within the rural community,” he added. He noted that the scheme will be beneficial to the women because: “From the income generated from their micro businesses, they would be able to fend for the household,

38 BUSINESS DAY NEWS Stocks may follow historical sell-off path... Continued from page 1

October 2014 it was 37,550.24 points (-8.88percent); while in October 2015 it stood at 29,177.72 points and represented a negative return of 6.53percent. In October 2016, the NSEASI was 27,220.09 points (-3.94percent); while in same month of 2017 it was 36,680.29 points, which implies positive return of 3.50percent. Christian Orajekwe’s team of analyst at Cordros Capital confirmed that historical data on monthly equities market performance shows that October and November are sell-off months, “while December typically delivers positive return”. Amid a dearth of positive triggers, they noted that the month of October is showing its true colour for a negative return following an all-red session in the first trading week. FSDH research analysts in their recent outlook said the performance

of the equity market in the last five years “shows that the market recorded negative performances in three of the five years between September and October. “Given, the current bearish trend in the market, the equity market may follow the downward trend recorded in 2014, 2015 and 2016”, FSDH research added. The value of listed equities on the Nigerian bourse declined by 5.97percent in September; down by N760billion to N11.96trillion, while the NSE ASI decreased to 32,766.37points. The NSE ASI shows negative return in excess of 15.16percent as at Tuesday October 9. Analysts say portfolio inflows into the Nigerian equity market will remain subdued over the rest of the year and they anchored their expectations on political uncertainties as well as the trade spat between the United States and China. “Higher yields in developed


economies and tensed political climate in the country were the major reasons for investors pulling out despite the relative stability in exchange rate”, Damilare Asimiyu, economist and research analyst at GTI Group, said in recent note. Foreign portfolio investors who brought in N437.14billion into the stock market as at August, took N469.71billion out of the same market, according to the trading figures from major custodians and market operators on their Foreign Portfolio Investment (FPI) flows. Total transactions on the Nigerian Bourse declined from a January high of N394.44billion to N133.84billion in August. Lagos-based Financial Derivatives Company analysts said, “The stock market will remain deeply in negative territory in October. “Technical, analysis will determine most investment decisions. Third-quarter (Q3) 2018 financial performance will be largely positive. Impressive performance will not overturn the market’s negative

sentiment,” Financial Derivatives Company noted. Many companies have issued notices of their closed period, signposting time to release their ninemonth 2018 scorecards. The closed period is intended to prevent trading in the companies’ shares by its insiders/interested parties ahead of the release of their financial results. GTBank, Seplat, Dangote Cement, Diamond Bank, Zenith Bank, FBN Holdings are among many companies that have issued notices to that effect. On the back of a sluggish economy expansion, some analysts expect Custom Street traders to prepare for another round of slow growth in profit for Nigerian companies in the third quarter of this year. There is the possibility of seeing pockets of gains, though this may not be sustained, as most share prices which are in the oversold positions are attractive to domestic bargainhunting investors. Furthermore, some analysts do

Thursday 11 October 2018

not expect investors to sell-off on stocks that are known for delivering good numbers in the third quarter. Nigeria’s economy remains fragile, as Gross Domestic Product (GDP) grew by 1.50 percent in the second quarter of 2018, a downturn from 1.95 percent in the first quarter. Consumer goods firms are grappling with unsold stock, caused by low consumer spend and the receding revenue will deal a great blow on their margins. “As we head for fourth-quarter (Q4) of 2018, will the trend continue, and even when it does, is it likely that monthly sell-offs would be as heavy as in the recent past quarters? Nigerian macros have not been impressive this year and likewise earnings. Macro outlook is positive, but not bullish. And the political space is predictably charged, with recent events, in our view, raising concerns importantly around how easy it will be to accept defeat at the polls, ” the FSDH analysts said in their October 9 note to investors.

Insight: Why Vision2010 oil target of 4... Continued from page 2

L-R: Bawa Bwari, minister of state for solid minerals and steel development; Ibe Kachikwu, minister of state for petroleum resources; Khadija Ibrahim, minister of state for foreign affairs, and Suleiman Adamu, minister of water resources, during the Federal Executive Council meeting at the Presidential Villa in Abuja, yesterday. NAN

Nigeria’s uncompetitiveness hinders AfCTA... Continued from page 2

persons. In 2012, Heads of State and Governments of African countries resolved to establish the Africa Continental Free Trade Agreement treaty to create a single continental market for goods and services in member nations of the African Union, with free movement of businesspersons and investments using a single currency. Consultations and negotiations for establishing the treaty commenced in June 2015 during the 26th Ordinary Session of the AU Assembly of Heads of State and Government in Johannesburg, South Africa. After several years, the draft agreement was finally signed on March 21, 2018 during the 18th Extraordinary Session of the Assembly of AU Heads of State and Governments in Kigali, Rwanda. Meanwhile, the Manufacturers Association of Nigeria (MAN), has hinted that the federal government never made any consultation whatsoever with the private sector and industry players. Before such an arrangement should have been considered, the Federal Government has done more studies on its impact.

“We in the private sector space was never carried along in the process. Also, a defensive and offensive study was not considered, whether it will benefit manufactures in the Nigerian economy or not,” said Segun Sodipe, representing the director-general of MAN. To him, there was not enough justification to back the reason why Nigeria should agree to a 90 percent market access. He noted that “Moving 90 percent of a country’s tariff line to zero percent within five years, might inflict some major pains in the economy not just the manufacturing sector. Also, government will loss revenue because tariff is the duty that you pay and you get to zero there will be no revenue because they get huge source of their revenue from duties. “The proper thing to do when people are entering an agreement, whether bilateral and multilateral is to carry along your private sector stakeholders and secondly, the need to conduct a study to ascertain whether you will benefit or “you will lose from the agreement,” Sodipe cited. So far, 49 out of 54 African countries have signed for the establishment of AfCFTA, which

would make it one of the largest free trade blocs in the world today. Countries that signed the AfCFTA Consolidated Text earlier are Niger, Rwanda, Angola, CAR., Chad, Comoros, Congo, Djibouti, The Gambia, Gabon, Ghana, Kenya, Mauritania, Mozambique, Cote’d’Ivoire, Seychelles, Algeria, Equatorial Guinea, Morocco, Swaziland, Benin, Burkina Faso, Cameroon, Cape Verde, DRC, Guinea, Liberia, Libya, Madagascar, Malawi, Mali, Mauritius, South Sudan, Uganda, Egypt, Ethiopia, Sao Tome and Principle, Togo and Tunisia. South Africa, Sierra Leone, Namibia, Lesotho and Burundi signed the AfCFTA at the summit Nouakchott. Chad and Swaziland ratified the agreement, which brings the total number of ratifications to six. A minimum of 22 ratifications is required to enable the AfCFTA to come into force, while 15 ratifications for the protocol on free movement of persons, right of residence and right of establishment. However, President Muhammadu Buhari has said Nigeria will only be signatory to the Continental Free Trade Agreement if the nation’s national interests as well as regional and international obligations are balanced.

must begin with the public service.” Between the years 1996 and 2010, BusinessDay analysis reveals crude oil production grew only by 23 percent to an average of about 2.5 million bpd. This represents a short fall of 1.5 million barrels proposed by Vision2010. “The issues around the Petroleum Industry Bill need to be resolved and the economy diversified without just lip-service paid to diversification of the economy,” energy partner at Bloomfield law practices said. Ademola Henry, Team Leader at Facility for Oil Sector Transformation (FOSTER) said vision 2010 plans were not matched by action, as there was no system put in place on how things would work. “When there is an inefficient fiscal system that doesn’t take into cognisance what the key issues are ,we are bound to have the kind of challenges we currently face. “How will investors take us forward in a country in which rig counts and oil reserves are falling constantly?” Henry, Team Leader at FOSTER asked. Recent data showed short falls in crude oil production have widened further to a deficit of 2.16 million barrels, as against the Vision2010 committee goal of four million bpd. According to data released by the NBS, crude oil production declined below two million bpd in the second quarter of 2016 after crude oil production fell by 12 percent to 1.81 million bpd. It increased in Q2 2017 reaching a seven quarter high of two million bpd in Q1 2018 which further declined by 8 percent to 1.84million bpd. Data from the Organisation of Petroleum Exporting Countries (OPEC) also showed Nigeria’s oil reserves had remained almost stagnant, hovering in the region of 37 billion barrels, as analysts say the corruption and government shenanigans have decreased growth in the sector. According to statistics from OPEC, Nigeria oil reserves decreased to 36.247 billion in 2011 from 37.200 billion recorded in 2010, while in 2012 there was relative improvement to 37.139 billion but this went down again to 37.071 billion in 2013. In 2014, it stood at 37.448 billion before sliding down to 37.billion in 2015 while in 2016 it stood at 37.453 billion. Nigeria’s inability to attract fresh investment in the oil and gas sector

or expand existing ones has left the country in a precarious situation. The loss for Nigeria has become the gain of other countries, including, Ghana, Libya and Angola, which have become new frontiers for oil exploration in Africa as investors, especially those operating in upstream, have found new haven in these countries. In this time period (2006–2016) total African reserves increased to 128 billion barrels from 116.9 billion barrels largely led by Angola and Libya. “Just like savings and earnings, the oil reserves and daily production are vital to creating energy security, increasing the income from crude oil, boosting economic development and showcasing an index that is capable of wooing investors into the country,” a Lagos based oil and gas analyst told BusinessDay. Just like Vision2010, other previous development plan like import substitution, Green Revolution, Structural Adjustment Program (SAP), Operation Feed the Nation (OFN), Seven-Point Agenda, Transformation Agenda, SURE-P, 6-3-3-4 system of education, Vision2010, and Vision20:20, have not brought significant level of development to Nigeria. In 2009, Nigeria had a vision2020 which seeks to place Nigeria among the 20 most developed economies in the world. While presenting the draft of the Vision2020 then Minister of National Planning, Shamsuddeen Usman, said former President Olusegun Obasanjo threw away the Vision 2010 document prepared by the late General Sani Abacha regime because he didn’t want to hear anything linked to the former Nigerian Head of State. Nigeria looks far away from being among the 20 most developed economies in the world with Vision2020 just two years away, as the nation seems to have jettisoned the vision for a much broader plan called Economic and Growth Recovery Plan (ERGP) which projected crude oil output to rise from about 1.8 million bpd in 2016 to 2.2 million bpd in 2017 and 2.5 million bpd by 2020. “Achieving vision 2020 is not a possibility currently in Nigeria as the government doesn’t seem to take the vision seriously, as it is impossible to increase production without increasing participation and participation cannot be increased without good fiscal policy, tax regime and administration,” Henry, Team Leader at FOSTER concluded.

Thursday 11 October 2018


Telcos set up financial inclusion committee, applaud CBN regulatory tweak LOLADE AKINMURELE


igeria’s GSM operators - Glo, 9Mobile, Airtel, MTN Nigeria and Ntel, have inaugurated the Telecommunications Financial Inclusion Committee and laid out the roadmap for deepening financial inclusion and financial literacy across Nigeria. The committee has set out three key mandates. First is to drive an awareness programme that will deepen financial literacy across the country, within the next 3 months. Second is to leverage the committee’s assets in order to deliver the promised access to financial services to 90 million Nigerians over the next 30 months, through a combined mobile base, Integrated Identity systems, and distribution network. Lastly, the committee will work in collaboration with other stakeholders and

engage proactively with the government to ensure the telecommunications sector contributes its quota to the national goal of attaining 80% total financial inclusion and 70% formal financial inclusion by 2020. Over the last decade, financial inclusion has been a target pursued across the world. Progress is being made globally, with 3.8 billion people (69% of all adults) now with a bank account or mobile money provider, up from 62% in 2014, according to Global Findex. About 1.2 billion adults across the world have obtained some sort of formal financial account since 2011, when the rate of global financial inclusion was just 51%. Africa is not left out of this growth – for example, in Kenya, with the introduction of M-Pesa, which reformed the country’s financial system, the number of financially-served individuals in the country has risen significantly to its current

rate of 82.5 percent. In spite of these giant strides, 1.7 billion people around the world remain outside the formal financial system, with more than half of them living in Asia & Africa. The inclusion gap between high-income economies, like the United States and Austria, and developing economies like Nigeria is vast: an average of 94% of adults in developed countries have bank accounts, compared to an average of only 63% in the latter. While others make progress in financial inclusion, Nigeria went from bad to worse after the country’s inclusion rate went from 44 percent in 2014 to 41 percent in 2017. A myriad of challenges from the slow adoption of digital financial services to lack of financial literacy have contributed to hindering financial inclusion in Africa’s most populous nation. In the short-term, the committee aims to deliver

financial services to up to 35 million Nigerians and increase financial literacy and awareness within 12 months. The longer term goal of delivering access to 90 million people across 773 local government areas by 2020 will be achieved through the conversion of its over one million airtime agents to mobile money agents. The inauguration of the committee is a necessary first step to achieving Telcos’ goals of improving financial inclusion and literacy, according to Gbenga Adebayo, Chairman of ALTON. “We are focused on delivering sustainable solutions to achieve long-term results,” Adebayo said. “The telecommunications subscribers’ database is the most comprehensive, our coverage is vast and this speaks to the potential that we have as a group to truly contribute to solving some of the challenges that have been faced so far.”

NLNG spends N1.2bn on 3,246 scholarship beneficiaries IGNATIUS CHUKWU & INNOCENT ETENG


he Nigerian Liquefied Natural Gas (NLNG) has spent at least N1.2 billion financing the education of 3,246 indigenes who are beneficiaries of its scholarship scheme. This was revealed on Wednesday, in Port Harcourt during the celebration of the company’s first Scholars Day, in commemoration of its educational intervention targeted, mostly, at indigenes of its host communities. According to Sadeeq MaiBornu, NLNG’s deputy managing director, the money was spread over a period of 20 years (1998-2018) on different scholarship schemes that include post-primary scholarship (secondary education), undergraduate scholarship and postgraduate scholarship. Breaking down the numbers, Mai-Bornu said within the said period, 2,956 schol-

ars benefited from the undergraduate category, 222 from the post-primary category and 68 from the postgraduate category - all studying in the United Kingdom. The high number of undergraduate beneficiaries, Mia-Bornu explained, was because until 2012, the postprimary and postgraduate categories were not incorporated into the scheme. Meanwhile, 12 of the postgraduate scholars received their awards yesterday under the 2018 batch. Each postgraduate beneficiary receives between $45,000 (N16,200,000) and $67,500 (N24,300,000) yearly. “The NLNG Post-Primary Scholarship started in 2012 to help high performing Primary six pupils in our host communities to access secondary education. The scheme started with 28 beneficiaries and in 2017, this number grew to 222 beneficiaries with a total sum of about N800 million spent to date.

Court orders FG to serve criminal charges on FELIX OMOHOMHION, Abuja


L-R: Akin Odusami, director, LASACO Assurance plc; Sani Ndanusa, director; Gertrude Olutekunbi, company secretary; Aderinola Disu, chairman; Segun Balogun, managing director; Rilwan Osinusi, DMD, corporate services, and Razzaq Abiodun, DMD, technical, at the extraordinary general meeting of LASACO Assurance in Lagos, yesterday.



Federal High Court sitting in Abuja on Wednesday asked the Federal Government to serve criminal charges on two senators, Ike EKweremadu, and Bassey Akpan, through the clerk of the National Assembly. At resumed hearing yesterday, the Federal Government complained to the court that Ekwerewadu and Akpan had been evading the service of the criminal charges on them. In two separate ex-parte motions argued before Justice Binta Nyako, counsel to the Federal Government, Selsus Ukpong, prayed the court for permission to serve the defendant the two count criminal charge through sub-

stituted service, the Clerk of the National Assembly. He claimed that the Deputy Senate President had allegedly thwarted all efforts to serve him with the charge to formally kickstart his trial on refusal to declare his asset before the Special Presidential Investigation Panel for the recovery of public property. The two-count charge against Ekweremadu was filed last month but had not been served. Justice Nyako, after listening to the counsel argument on the alleged evasion of service of the charge granted the federal government’s request and ordered that the charge be served on Ekweremadu through the Clerk of the National Assembly.

Shell challenges committal order on MD, others Obaseki sets aside N6bn for revamp of schools, as Edo OLUSOLA BELLO


hell Petroleum Development Company (SPDC) has challenged the committal order of a High Court of Rivers State on Tuesday sentencing the company’s managing director, Osagie Okunbor, and two other senior officers of the company to prison for three months for disobeying a court order. “We do not accept that SPDC has disobeyed any lawful court order and we have accordingly appealed this judgment,” the company’s spokesperson, Bamidele Odugbesan, said in a statement on Tuesday, adding: “SPDC has utmost respect for the courts and the laws of Nigeria.” Some members of Bonny

… files stay of execution Community in Rivers State had asked the court, presided over by Justice George Omeriji, to commit the SPDC officers to prison for disobeying a High Court order of 2008, asking the company to forfeit the land where one of Nigeria’s biggest oil terminals, Bonny Oil Terminal, is located. “We have appealed against the order and applied to suspend its execution pending the outcome of the appeal,” the SPDC spokesperson said. Odugbesan explained that the said 2008 judgment was settled between SPDC and the landlord families of the land in 2014. “An amicable resolution and settlement agreement was signed by the parties in 2014 after which SPDC paid

all the rents due on the land up to 2019,” he said. He cited a paid public notice by the landlord families in the October 24, 2014 edition of the Guardian newspaper acknowledging the settlement with SPDC. The Bonny Oil Terminal is a critical national asset in which the Federal Government has 55 percent interest. It receives crude oil from international and local oil companies through the Trans Niger Pipeline and the Nembe Creek Trunk Line for export. A Port Harcourt High Court on Tuesday sentenced the managing director of SPDC and two others to three months in prison with hard labour.

graduates 7,000 digital teachers


do State governor, Godwin Obaseki, has said that the state government will set aside N6 billion for the renovation of primary schools across the state, within six months and fit them with essential tools for learning so that the state can reap the full benefits from the 7,000 teachers who have undergone training under the Edo Basic Education Sector Transformation (EDOBEST) programme. Obaseki said this at the graduation ceremony of 7000 digital teachers under the Edo-BEST programme, which held at the main bowl of the University of Benin (UNIBEN) Sports Complex, in Ugbowo, Benin City, the

Edo State capital. According to him, N3 billion will be sourced from the Paris Fund Refund while the state government will provide the balance N3 billion for the revamp of primary schools in the 18 local government areas of the state. “President Muhammadu Buhari has mandated that N3 billion from the Paris Club Refund should be used to refurbish primary schools in Edo State. We commend the President for the gesture and we will ensure that we provide desks, chairs, teaching aids and renovate all our classrooms,” he assured. The governor further said that more teachers would be hired while those who were yet to be trained on the digi-

tal teaching method would be exposed to the training which will be extended to public secondary schools soon. He described the event a major milestone since the repositioning of the State Universal Basic Education Board (SUBEB), assuring that the deployment of digital teaching method will transform the face of education in the state. He added that the state government is fully committed to basic education, which is justified in the investment being made and the feedback from parents, who have relayed the improved outcomes from interactions with their children.

Thursday 11 October 2018






Senate may approve 2019 INEC budget Thursday

L-R: Iliemene - Ejike Irene, student of St. Thomas Aquinas, Lagos; Charity Ilevbare-Adeniji, group brand development and activation manager, PZ Cussons, and Nwachukwu Mercy Onyinye, student Penny International College, Lagos, at the presentation of gifts to top female candidates in the PZ Cussons Chemistry Challenge to commemorate the International Day of the Girl Child 2018 in Lagos.



Lessons for Nigeria from Germany on circular economy, waste management CHUKA UROKO


n Europe, particularly in Germany, circular economy is top priority for environmental policy and the country’s ability to transform its waste management into a resource management system where about 14 percent of the (non-energy) raw materials used in its economy are recovered from waste is a huge lesson for Nigeria. Circular economy demands that a country like Nigeria should be efficient with its resources. To achieve this, Nigeria should make laws to promote investment in recycling because billions of wealth can be generated for the economy, leading to the creation of thousands of new jobs if companies and individuals focus on building circular supply chains to increase the rate of recycling, reuse and re-manufacture.

Waste management in Nigeria, especially in big cities like Lagos, the country’s economic capital, is still a big challenge. The capacity and technology to convert waste to wealth are neither here nor there despite efforts at deploying them to address the intractable problem. Lagos, a sprawling city of over 20 million population, has become a case study on a degraded environment where waste management has failed unlike Germany where it has evolved into a large and powerful economic sector. “There are more than 270,000 people working in some 11,000 companies with an annual turnover of around 70 billion Euros. More than 15,500 waste management facilities help to conserve resources through recycling and other recovery operations,” Gafar Odubote, a director at Junior Chamber In-

ternational (JCI) Nigeria, said in an interview in Lagos. “Germany’s high recycling rates of 67 percent for household waste, around 70 percent for production and commercial waste, and almost 90 percent for construction and demolition waste speak for themselves,” he said. Odubote does not, however, blame the waste management situation on one level of government alone because, according to him, responsibility for waste management should be a collective effort among the federal, states and local authorities. He is of the view that the local government should be empowered to have responsibility for household waste which includes collecting and transporting waste; measures to promote waste prevention and recovery and the construction and operation of waste disposal

facilities. To ensure efficient waste management system, the government must provide the needed infrastructures and attract investors that will support proper wastes collection, sorting and recycling. Odubote sees separate collection of waste as key to achieving recycling, biowastes, paper, glass, metal and plastics, noting that these wastes should be collected separately on pre-determined specific dates. As it is done in other societies, he recommends that Nigeria should introduce landfill limiting policies. Waste going to landfill must be pre-treated in mechanical, biological treatment plants so as to prevent any biological conversion processes from occurring so as to reduce landfill gas as was experienced recently at the Lagos Olusosun landfill.

FG spends N460bn from 2018 budget on capital projects HOPE MOSES-ASHIKE, Bali, Indonesia


he Federal Government on Wednesday said it had released over N460 billion from the 2018 national budget, which Udoma Udo Udoma, minister for budget and national planning, said was spent on capital projects. This is coming as President Muhammadu Buhari on Tuesday asked lawmakers to approve the issuance of a $2.79 billion Eurobond to help finance the budget deficit and to fund infrastructure projects. Udoma, who spoke on the sidelines of the ongoing International Monetary Fund (IMF)/World Bank Group annual meetings in Bali, Indonesia, said, “We have to keep on growing, we are focused on working and are not

Thursday 11 October 2018

distracted by electioneering. The president has instructed us to remain focused. We are happy IMF has spoken well about Nigeria. “We expect that by the end of this year, we will be growing by 2.1 percent, things are going well in Nigeria, not as well as we want to be, we are working hard to improve things. We are in stronger position than 2015. Our foreign reserves are $44 billion and we have a trading surplus whilest our imports are not increasing; we have been able to manage those imports. All the indices are positive.” Also speaking with journalists in Bali, Zainab Ahmed, minister of finance, disclosed that there were discussions around the possibility of Nigeria increasing its shareholding, just like Afrexim that had a very large portfolio of about

40 percent in Nigeria. She also disclosed that there were discussions around setting up some industrial parks in partnership with the Federal Ministry of Industry, Trade and Investment in three centres: Lekki, Kano and Kaduna. On the issue about raising the Federal Government stake at the bank, she said, “When we have a consensus, we will join. That discussion is being driven by the federal ministry of Industry, Trade and Investment. That we will need to consider increasing our shareholding in the bank because there is a lot of value that we are getting from Afreximbank. “Other things we discussed included setting up a medical park in FCT which is a discussion that has been going on for quite

a long time, there is also some quality assurance centres in Ogun and some other parts of the country.” Benedict Oromah, president of Afreximbank, said in terms of business in Nigeria, the bank had exposure of more than $3.2 billion. “We are supporting virtually all the banks in terms of lines of credit to be able to do import and export and support SMEs. We also support private businesses in manufacturing. “Beyond that, we are pursuing other impactful initiatives. We are finalising arrangements to begin developing a centre of excellence for healthcare. We want Nigeria to have facilities to take care of complex diseases, oncology, haematology, cardiovascular and other complex diseases,” Oromah said.

enate may approve the N143.3 billion INEC budget for the conduct of the 2019 general elections on Thursday. Chairman of the Committee on Appropriations, Danjuma Goje, gave the assurance on Wednesday in Abuja at a meeting of the committee. The committee, he said, is determined to ensure that the report is presented by Thursday. It would be recalled that the National Assembly Joint Committee on INEC had in August slashed the 2019 elections budget from N143.5 billion to N143.3 billion, representing a slash of over N200 million. Senate President Bukola Saraki, who presided over the session, asked the Gojeled panel to submit its report within 24 hours. Saraki also referred the

President’s request to borrow $2.86 billion external loan to the Committee on Local and Foreign Debts and report back on Tuesday. President Buhari had written to the Senate, seeking approval for $2,868,540,000 external borrowings. The request was contained in a letter to both chambers of the National Assembly, which was read by Saraki at plenary on Tuesday. This, the President said, would be used to partly fund the 2018 budget. Giving a breakdown of the loan, Buhari explained that while $2.786 billion would be borrowed from the international capital market, the Federal Government would raise another $82.54 million from the international capital market to refinance the balance of $500 million mature Eurobond in the international capital market.

Nigerian Gas conference to shape West African gas future FRANK UZUEGBUNAM


he Nigerian Gas Association forthcoming conference with the theme ´Shift to Gas Economy: Pace and Scale of Innovation in the West African sub-region’ will help to shape future direction of gas industry for West African region. The leading gas companies in Nigeria that make up the vast gas-value chain, starting from gas exploration and production companies (Upstream), to gas processing and transportation companies (Mid-stream), and including the various end consumers ranging from power generation companies (Gencos), Gas-Based Industries (Fertiliser, Methanol, Petrochemical, etc.), and Industrial and Commercial Consumers (Mini/Micro LNG, CNG/LPG, etc.), will be very active at the 2day event. Confirmed international and national guest speakers to join the Group Managing Director of Nigeria National Petroleum Corporation Maikanti Baru on ways to re-energise

and maximise our natural gas potentials as we Shift to gas economy include the Secretary General of International Gas Union Luis Bertron; CEO of Ghana National Gas Company Mr. Ben Asante; Managing Director of West African Gas Pipeline Company Mr. Walter Perez; and the High Commissioner of Trinidad and Tobago to Nigeria Wendell Vincent Carlton De Landro; Others are; the Country Chair of Shell Companies in Nigeria Mr. Osagie Okunbor; the managing director of Nigeria LNG Limited, Tony Attah and chairman of Chevron Nigeria Limited, Jeffrey Ewing, among others. This year’s conference to features a vastly expanded agenda representing the full energy value chain from upstream, through mid-stream transportation to power generation with perspectives from end-users and financiers’ leaders to provide the broadest possible debate in shaping the future direction of the industry for our west African region.

BusinessDay journalist wins 2018 PwC Media Excellence Award


usinessDay’s energy and environment reporter, Isaac Anyaogu, has won the SMEs category of the PwC Media Excellence Award, 2018 beating 25 other entrants to claim the top prize, the second time in a row, in an award ceremony October 5, in Lagos. Anyaogu’s entry titled, ‘A harvest of Sunshine,’ which featured activities of companies who are innovating smart solutions to meet energy needs of rural communities in Nigeria and help solve the problem of food waste, was judged the best category and awarded the top prize of N500,000 and a plaque. In other categories, Nwok-

eji Chimaroke of Nigerian Tribune emerged winner in tax reporting, Stanley Opara of Punch won the capital market reporting while Kemi Busari of Premium Times won in the Business & Economy category. Chinwe Agbeze, also of BusinessDay emerged second runner up in the Business & Economy category of the PwC Media Excellence Award. Isaac Anyaogu studied Mass Communication at the University of Nigeria, Nsukka, and started his journalism career with BusinessDay in 2016. Last year, Anyaogu emerged finalist in three categories at the PwC Media Excellence Award and won in the SME category.

Politics & Policy Thursday 11 October 2018




PH court nullifies APC congresses; voids guber, assembly nominations IGNATIUS CHUKWU & FAVOUR ICHEMATI


loom may descend on the A l l P ro g re ssives Congress (APC) in Rivers State as a Port Harcourt high court has nullified the nomination of Tonye Cole as the governorship candidate of the party in Rivers State on the ground that his nomination was a function of illegality and unconstitutional acts. This is according to a statement issued by the Rivers State Government House by Governor Nyesom Wike’s special assistant on electronic media, Simeon Nwakaudu. The statement read in part: “The Court also nullified the Rivers State APC Senatorial, House of Representatives and House of Assembly Primaries conducted on the premise of the illegal ward congresses.” The High Court further

nullified all the elections of Rivers APC Ward Executives, Local Government Executives and State Executive Committee that arose from the illegal ward congresses. In a judgment delivered by Justice Chiwendu Nwogu in a suit filed by Ibrahim Imah and 22 others against the APC, the Court declared that the ward congresses of Rivers APC were illegal because they were not conducted in line with the APC Guidelines and Constitution. Nwogu set aside the ward congresses of Rivers APC on May 19, 2018, Local Government Congresses of May 19, 2018 and State Congress of the party of May 21, 2018. He stated that all actions taken by the APC during the pendency of the suit have been set aside because they are illegal and unconstitutional. Justice Nwogu declared that all those who purchased nomination forms for the

Tonye Cole

ward congresses were entitled to contest the ward congresses of May 19, 2018, but were unjustly excluded by the party. He said: “The Rule by

might must be checked by the rule of law. We must restore the hope of the common man in the justice system”. Justice Nwogu, who based

his judgment on the Amaechi versus INEC Matter of 2007, noted that having studied the submissions in the matter, he was bound to make consequential orders to ensure that justice was done in the case. He stated that the High Court has jurisdiction to entertain the matter as an Appeal filed by the respondents at the Court of Appeal, Port Harcourt to stop proceedings on the suit was rejected by the Appellate Court on September 21, 2018. He stated that all through the hearing, the APC filed no counter-affidavit denying the facts of the matter as presented by the applicants in the originating summons. Justice Nwogu said that it is trite law that facts not disputed are deemed admitted. On the suit filed in an Abuja High Court by a faction of the APC, Justice Nwogu declared that the court is of coordinate jurisdiction with the High

Court in Port Harcourt and cannot sit in appeal over it. He added that the suit filed by Ibrahim Imah, preceded that of the Abuja High Court by a faction of the Rivers State APC. Earlier before the delivery of the judgment, a counsel to the APC, Prince OSM Azunda moved a motion seeking to stop the delivery of the judgment. However, Justice Nwogu dismissed his application which he termed as a ploy to arrest the judgment. Following the judgment, the APC no longer has a candidate for the governorship, Senate, House of Representatives, House of Assembly Elections in the forthcoming 2019 general election. The APC also has no State Working Committee, Local Government Working Committees and Ward Executives. The APC executives said they would react soon.

2019: Atiku’s emergence will strengthen Kwara PDP congratulates Secondus over successful convention opposition, say Fasehun, Afenifere INIOBONG IWOK


ounder of the Oodua People’s Congress ( O P C ) F re d e r i ck Fasehun and leader of pan-Yoruba socio-cultural group, Afenifere, Reuben Fasoranti, have said that the emergence of Atiku Abubakar as the presidential candidate of the main opposition People’s Democratic Party (PDP) would strengthen the opposition in the country. Atiku, who was former Vice President of Nigeria in the Olusegun Obasanjo administration, last Sunday in Port Harcourt defeated 11 other aspirants to emerge the presidential candidate of the PDP. But in a press statement in Lagos, Fasehun said that Atiku had the required qualities and experience to defeat incumbent President, Muhammadu Buhari, of the ruling All Progressives Congress (APC), stressing that the party had taken a decision which was the wish of the generality of Nigerians. “PDP has done the very needful by giving Nigerians a formidable opposition candidate who not only is capable of giving the ruling All Progressives Congress (APC) a good fight at the general election but stands an enormous chance of actually winning

the coming presidential poll,” Fasehun said. Fasehun urged the eleven other PDP presidential aspirants who lost in the primaries to respect the wishes of the party’s delegates, and throw their weight behind Atiku toward his victory in the election. “The task to enthrone a truly democratic government of Nigerians, by Nigerians and for Nigerians will not be an easy one, and all hands must be on deck to give Nigerians a government of their dream,” the OPC founder said. He praised the PDP convention for once more demonstrating that the party remained the country’s foremost custodian of democracy, an a party with an unbroken consistence in maintaining internal democracy. “The task to enthrone a truly democratic government of Nigerians, by Nigerians and for Nigerians will not be an easy one, and all hands must be on deck to give Nigerians a government of their dream,” the OPC founder said. “I became familiar with Atiku Abubakar in the Third Republic, when we were both leading figures in the Social Democratic Party (SDP).” “The Atiku I know is an experienced businessman, a detribalised Nigerian and

a conscientious politician who, given the chance, is capable of taking the country to greater heights in the areas of the economy, education, security and infrastructure,” Fasehun said He further said that although OPC was non-political, the organisation would extend a hand of fellowship towards the enthronement of a truly democratic and progressive leader for the country. Also speaking with BusinessDay, leader of Afenifere, Fasoranti, said that Atiku’s support for restructuring of the country would give him an edge, against other presidential aspirants, adding that the opposition camp would equally receive a boost. When asked if the group would support the former Vice President or back Bola Ahmed Tinubu’s support for Buhari’s re-election bid, Fasoranti stressed that the group was never in alliance with Tinubu or President Muhammadu Buhari and would take a decision soon on who to support. “Atiku’s emergence is good for the country, even the opposition camp, it is right; he is in support of restructuring which we want, but we have not taken a position on who to support.



h e Kw a r a S t a t e chapter of the People’s Democratic Party (PDP) has congratulated the National Chairman of the party, Uche Secondus over the successful organisation of the party’s national convention. The Kwara PDP in a statement by its Publicity Secretary, Tunde Ashaolu, also commended the Governor Ifeanyi Okowa-led National Convention Planning Committee for conducting a free, fair, transparent and rancour-free presidential primaries. It equally lauded the party members and delegates from the 36 states of the federation and FCT for conducting themselves in a peaceful

and democratic manner and freely electing their choice aspirant during the convention. “The success of our National Convention is no doubt a victory for democracy, as it met global standards. We also urge the Independent National Electoral Commission (INEC) to learn from this process as it prepares to conduct the 2019 general election. “We also note that the credibility and transparency of the exercise has clearly shown that the PDP is truly a reformed, repositioned and democratic party that is ready to take over the governance of the country from the inept and clueless All Progressives Congress government.” The party also congratulated former Vice President Atiku Abubakar on his emer-

gence as the party’s presidential candidate for the 2019 general election. It expressed the confidence that Atiku would defeat “the incumbent President Muhammadu Buhari in next year’s elections, and provide purposeful leadership that will return Nigeria to the path of progress and prosperity.” The Kwara PDP also praised the Senate President, Bukola Saraki and the other 10 presidential aspirants for accepting the outcome of the primary election and for running decent campaigns and giving a good fight at the convention. The party noted that though only one candidate could emerge through the process, all the aspirants were eminently qualified to become Nigeria’s president.

Kaduna governor honours Benue indigene …Over role in rescue of Dornier 228 aircraft survivors BENJAMIN AGESAN, Makurdi


he Governor of Kaduna State, Nasir El-Rufai, has honoured a Benue indigene, 2nd Lt, Chia Detimbir, the then 14-year-old boy who discovered the Nigerian Air Force Dornier 228 aircraft which crashed on the Ngokugh Hills in Benue State

while working on his family farm in 2006 while El-Rufai was the Minister of FCT. Governor El-Rufai gave the reward yesterday at the Government House in Kaduna, the state capital. After the plane crash, five officers were rescued, courtesy of a telephone call from the crash site by Chia Detimbir who led a rescue operation

that saved the survivors. Detimbir last week graduated from the Nigerian Defence Academy and was commissioned into the officers’ cadre. Governor El-Rufai congratulated 2nd Lt Detimbir and described him as a hero for making the call to rescue the survivors from the crash site at a young age.




Thursday 11 October 2018

Thursday 11 October 2018






World Business Newspaper

Mnuchin warns China on currency devaluations US Treasury secretary says in interview he wants issue raised in trade talks SAM FLEMING


he US Treasury secretary has warned China not to engage in competitive devaluations of the renminbi as the two countries spar over their economic relations and engage in an escalating trade war. Steven Mnuchin said in an interview with the Financial Times that the Treasury monitored currency issues “very carefully” and noted that the Chinese renminbi had fallen “significantly” during the year, adding that he wanted to discuss the currency with Beijing as part of trade talks. He acknowledged there were several drivers behind the falls in the renminbi, including the country’s own economic issues. “As we look at trade issues there is no question that we want to make sure China is not doing competitive devaluations,” he said ahead of meetings of the G20, IMF and World Bank in Bali, Indonesia. The onshore renminbi has weakened by 10.9 per cent from its strongest point this year in late March to Rmb6.9213 per dollar. Investors and analysts have raised concerns that the currency is approaching Rmb7 against the greenback — an important psychological mark that would be its weakest level since 2008. The currency has come under pressure this year as a result of the China-US trade war, a slowdown in Chinese economic growth and the broader emerging market sell-off exacerbated by the strengthening dollar. “The renminbi has depreciated significantly during the year. There are various factors for that which we look forward to discussing with them,” said Mr Mnuchin. “One of those factors has to do with their own economic issues and what has gone on in the Chinese economy. “We are going to absolutely want to make sure that as part of any trade understanding we come to that cur-

Steven Mnuchin, the US Treasury secretary, says any trade deal with China will ‘absolutely’ involve a discussion of renminbi weakness © Bloomberg

rency has to be part of that.” The Treasury is due to put out its regular report on currency issues this month, which will be closely watched for its analysis of trends in the Chinese currency. Despite sabre-rattling by US President Donald Trump, the Treasury has shied away from formally accusing Beijing of manipulating its currency in the reports. Mr Mnuchin declined to discuss the impending report, beyond saying that he expected it to be published soon. He also did not specifically refer to currency manipulation. The Treasury secretary said he had seen no signs of damage to the US economy from the trade war outside of the specific local markets that had been directly targeted by the Chinese, such as the lobster trade

in Maine and the bourbon industry. Mr Mnuchin played up the positive developments elsewhere on Washington’s trade arena, including the new agreement between the US, Mexico and Canada, and a revised trade agreement with South Korea. “If we are successful in reaching an agreement with the EU and Japan there is continued upside for the economy on all of this,” he said. While he struck an upbeat tone about the US economy amid continued above-trend growth, Mr Mnuchin highlighted risks from Europe. “We have a significant desire to stay on top of these issues and make sure there are not spillover issues, whether it is Italy or Brexit,” he said. “Neither one of these is a significant concern at this time.” Among the topics on the agenda for the Bali talks is the future of the

IMF, which has begun seeking support from members for a renewal of its funding. The US is the fund’s biggest shareholder, giving it an outsize role in the discussions. While the Trump administration has taken an adversarial approach to its relations with a host of multilateral organisations, Mr Mnuchin and Christine Lagarde, the IMF’s managing director, have stressed their positive dealings. The Treasury secretary said he wanted to come to an understanding with the fund to ensure the organisation had sufficient resources to deal with any systemic issues. But he indicated that Europe’s own efforts to strengthen its crisisfighting mechanisms would affect the US judgment over how much extra funding would be needed. “One significant issue is Europe has

set up their own mechanism to deal with European issues,” he said. Mr Mnuchin also stressed the need for any recipients of IMF bailouts to be transparent about their indebtedness to other institutions. Pakistan has indicated it may need an IMF bailout, but the US is concerned about liabilities owed by the country to the Chinese. “To the extent that there is lending from the IMF, we are going to want to make sure we know where that lending is going, and that it is not being used to bail out other creditors,” he said. The Bali meetings are also likely to dwell on America’s increasingly aggressive sanctions programme, including its attempts to crack down on Iran following its withdrawal from the multilateral nuclear agreement earlier this year.

US-Russia tensions threaten nuclear arms curbs, says Moscow

IMF urges governments to focus on state assets

Breakdown in relations puts treaties at risk, says Kremlin deputy foreign minister




ritical elements of the arms control regime intended to prevent nuclear war between Russia and the US risk falling apart because of poor relations between the two countries, Moscow has warned. As US and Russian officials begin talks in Geneva on Wednesday to try to shore up a largely cold war-era system for limiting nuclear weapons, Sergei Ryabkov, Russia’s deputy foreign minister, said a “complete malfunction of the American system” meant key treaties could lapse and leave nuclear powers without constraint in the event of a conflict. “We could lose several elements on arms control infrastructure,” Mr Ryabkov said in an interview. “The building is shaky.” Each side has accused the other of violating the Intermediate-Range Nuclear Forces (INF) Treaty, an agreement signed by the US and

Soviet Union in 1987 that banned land-fired missiles with a range of up to 5,500km. If launched from Russia, such missiles could reach Europe or Alaska. Nato officials said last week that Russia had developed a new missile system that was capable of carrying nuclear warheads and whose potential range breaks the treaty. The US argues Russia has contravened the arms control treaty for years and is struggling to find ways to bring Moscow back into compliance. Last week, Jim Mattis, US defence secretary, said such “blatant violation” was “untenable” just two days after Kay Bailey Hutchison, America’s ambassador to Nato, said the US was prepared to “take out” the missiles if Russia did not remove them. “Russia must return to compliance with the INF treaty or the US will need to respond to its cavalier disregard to the treaty’s specific Continues on page A6

Approach puts Japan net worth above Germany’s while US, UK and France in negative terrain


ash-strapped governments could find a huge new source of revenues if they managed their assets more professionally, the IMF said on Wednesday. The potential receipts, equivalent to an average of 3 per cent of national income in 31 countries, would be available if state-owned companies produced returns half as good as private ones and improved their financial asset management correspondingly. The call to manage assets better is part of an IMF drive for a private sector approach to public finances that properly accounts for total assets and liabilities rather than simply concentrating on borrowing and debt. The approach also alters countries’ ranking in the league table for net worth. “It’s not only what you owe, it’s also what you own,” Vitor Gaspar, head of fiscal affairs at the fund, told the FT. The countries in the IMF survey represent 61 per cent of the world’s

economy and collectively their governments control $101tn in assets. This is more than twice the combined national income of the countries involved. The fund has long recommended that governments should look at their entire balance sheets, but few states do so rigorously. Mr Gaspar said measures of net worth better reflect countries’ longterm financial position than the usual metrics of deficits and debt. He added that research showed that “countries with stronger balance sheets pay lower interest on their debt” and also benefit from “shorter and shallower recessions”. By contrast, a focus solely on government debt, can lead to poor outcomes such as efforts to privatise assets to reduce financial liabilities at almost any price — which can damage a country’s net worth. The balance sheets published by the IMF also change the ranking of many countries in international league tables. Japan has roughly zero net worth, placing it mid table,

rather than at the bottom of the league when its gross debt of 238 per cent of the size of its economy is the chief focus. By contrast Germany ranks lower on the league table of net worth because it has few assets despite low debt levels of 44 per cent of national income. A third of countries for which the IMF had sufficient data, including the UK, US and France, had negative net worth. Ian Ball, professor of public financial management at Victoria University in New Zealand, said the IMF’s focus should help end countries’ exclusive focus on debt and cash flows to measure their financial performance. “If companies tried to argue this they would be ridiculed, and government fiscal positions are degrees of magnitude more complex,” he said. If returns were half as strong as the average private company, stateowned companies could increase public revenues by 1 percentage point of gross domestic product on average, the IMF calculated.






US-Russia tensions threaten nuclear...

Inside Darktrace, the UK’s $1.65bn cyber security start-up

Continued from page A5 limits,” Mr Mattis told Nato defence ministers last week. Ms Hutchison later said she was not advocating a pre-emptive military strike but said the US would match any Russian capability. The Trump administration earlier this year announced it would develop its own so-called tactical, lower yield submarine-launched nuclear weapons to counter Russian threats. Sea-launched missiles would not be in technical breach of the INF, which covers only groundbased missiles. Moscow also claims that US land-based missile defence systems deployed in Europe could target Russia. Tensions between Russia and the west have sunk to a new low following the attempted murder of former Russian spy Sergei Skripal in the UK, allegedly by Russian military intelligence operatives using the banned nerve agent novichok, and US allegations that Russia interfered in the 2016 US election. Mr Ryabkov said Moscow would not be swayed by Dutch, British and US claims that its agents had also sought to hack into the computer network of The Hague-based Office for the Prevention of Chemical Weapons as it investigated the attack on Mr Skripal. “If some believe that this makes an impression on Russia and somehow causes Russia to hesitate, then that is a very wrong conclusion. On the contrary, a consolidated effort to pressurise Russia only diminishes chances of any real engagement towards resolution,” he said. Donald Trump, US president, previously hailed a “deeply productive dialogue” with his Russian counterpart Vladimir Putin at their bilateral summit in Helsinki in July and appeared to take at face value Mr Putin’s denial of Russian meddling in the 2016 election. But any signs of an opening with the Trump administration following the meeting quickly evaporated, Mr Ryabkov said. The administration imposed additional sanctions on Russia in August for breaching the international chemical weapons convention and the US Congress is considering further penalties over election interference. “Even the very initial, even rudimentary sign of prospects of continuous dialogue were immediately torpedoed by those who don’t believe in any future of the American-Russian relationship,” said Mr Ryabkov. “We have a situation that is much, much worse than even during the most heated moments, or rather the coldest moments, of the past.” The breakdown of the relationship posed a real threat to progress on buttressing nuclear arms controls treaties, since the Trump administration had refused to engage in substantive talks, he said. Security experts say the mutual mistrust has left the two nuclear superpowers at risk of an unmanageable escalation in the event of a crisis, while a new generation of weapons and cyber warfare capabilities could leave existing arms-control treaties in tatters. The two sides have also not yet started substantive discussions on what to do when the New Strategic Arms Reduction Treaty (New START), under which they cut their nuclear arsenals to 1,550 deployed warheads as of February this year, expires in early 2021.

Thursday 11 October 2018

The fast-growing company distances itself from Autonomy heritage ALIYA RAM

W Zambian President Edgar Lungu meets Chinese workers from Aviation Industry Corporation of China (AVIC Intl) during a walk on a main road in Lusaka, Zambia, last month. China is a big lender to and investor in Zambia, where many public tenders are awarded to Chinese bidders © AFP

Zambia faces battle to avoid default on foreign debt Hefty borrowing from China may push Lusaka to seek help from IMF JAMES KYNGE


ebt stress in Zambia is set to escalate next year as the burden of hefty borrowings from China starts to weigh, throwing the copper-exporting African nation into a struggle to avoid default on its hard currency debt, analysts said. Opinions diverge on whether default can be evaded, partly because certain factors are subject to both market fluctuations and political uncertainties. But stress is building as the kwacha, the national currency, depreciates against the US dollar, making repayments of an official $9.4bn in debt more expensive in local currency terms. “My view is that Zambia will not default on its eurobonds, but the country has a few very difficult years ahead,” said Gregory Smith, analyst at Renaissance Capital, an investment bank. “The government has presented next year’s budget, but we think it falls short of an adequate survival plan,” he added. John Ashbourne, Senior Emerging Markets Economist at Capital Economics, a research firm, said Zambia’s

debt problems are so severe that it will probably have to seek emergency assistance from the IMF, which imposes strict conditions in return for bailing out governments hit by balance of payments crises. “A combination of currency weakness and dwindling foreign exchange reserves — which now cover less than two months of imports — will probably force the government to seek emergency IMF assistance,” said Mr Ashbourne. Any IMF assistance — although intended to stabilise the country over the longer term — could trigger some defaults because some of Zambia’s loans are unlikely to meet the organisation’s sustainability thresholds, Mr Ashbourne said. The predicament that Zambia faces has been precipitated largely by a recent borrowing binge from Chinese creditors which, in contrast to the World Bank and the African Development Bank, appear to have lent at commercial rather than concessional rates, analysts said. In many cases, the Chinese creditors have not divulged the details of their loans, but Mr Smith has used estimates derived from Zambian

sources to show the sharp pick-up in debt repayment costs the country faces between now and 2022 (see chart). China’s share of total debt amortisation — which includes payment of interest and principal — appears set to rise from 35 per cent in 2019 to 50.4 per cent in 2021 as an increasing number of Chinese loans finish their grace period and need to be repaid, according to Mr Smith’s calculations. Zambia has projected that it will need ZMW14.9bn in 2019 to honour its external debts. Mr Smith estimates that at ZMW12.5 to the US dollar, the government will have to find $1.2bn to meet such repayments, up from the $680m Lusaka estimated in the 2018 budget. Such an outlay would eat away a big chunk of the country’s foreign exchange reserves, which stood at $1.82bn in June this year — equivalent to about two months of imports. The kwacha stood at ZMW11.9 to the US dollar in late afternoon trade on October 9, down from ZMW10.2 on September 1st. Mr Smith says that it would take a further depreciation to ZMW13-14 to the US dollar before an IMF bail out would start to look likely.

Burger King looks to expand in sub-Saharan Africa World’s No. 2 burger chain sees ‘huge opportunity’ in countries including Nigeria ALISTAIR GRAY, JAMES FONTANELLA-KHAN AND NEIL MUNSHI


urger King is in talks to open restaurants in sub-Saharan African countries, including Nigeria, as the US fast-food group accelerates its international expansion to better compete with rival McDonald’s. Daniel Schwartz, chief executive of parent company Restaurant Brands International, told the Financial Times that the world’s second-biggest hamburger chain was “significantly under penetrated” in the continent, where it had a “huge opportunity”. Burger King is one of many global companies drawn to Africa’s demographics. The UN predicts that the world’s 10 fastest-growing cities between 2018 and 2035 will be in the continent. With a median age of 19, Africa’s population is expected to double to more than 2bn by 2050 and to double again by the end of the century. Burger King, majority owned by the Brazilian private equity group 3G via Toronto-based RBI, is adding about two or three restaurants per day globally. Openings are expected to come in at about 1,000 this year, up from little more than 600 in 2015. Most of new foreign stores will be in Asia and Europe. The hamburger chain

has opened about 600 restaurants in Russia from a standing start eight years ago, and is on track to open its 1,000th outlet in China by the end of the year. However, the Whopper maker’s global footprint of fewer than 17,000 restaurants — nearly all of them franchised — is less than half of McDonald’s, which has more than 37,000 restaurants, of which more than 3,000 are operated by the company itself. Shares in RBI have underperformed McDonald’s by 9 per cent in the past four years, in part because of difficulties at the Canadian coffee chain Tim Hortons, which it also owns. Intense competition in its home US market has added to the pressure. RBI’s $14.5bn market capitalisation is little more than a tenth of McDonald’s. “We are so under penetrated around the world relative to our peers — and ourselves in the US,” said Mr Schwartz, 38. “We’re just scratching the surface.” José Cil, president of Burger King, said fast-food restaurants “aren’t really well penetrated yet” in sub-Saharan Africa. He added: “We think Nigeria is an amazing opportunity, we think east Africa as well.” Burger King has been moving into the region over the past 18 months, striking a deal with Servair to expand

in markets including Kenya and Ivory Coast. Nigeria, Africa’s largest economy, was “one of the places I try to go to as often as possible to meet investors and potential partners,” said Mr Cil, adding that Burger King had “a lot of work to do” in Nigeria “in terms of infrastructure and supply chain”. “We want to do it right — and we want to do it in a big way,” he said. “We want to scale quickly. So, we’re excited about the potential.” Burger King’s interest in expanding in Africa’s most populous nation comes as Nigeria’s economy is inching out of a recession brought on by the oil price crash. Unemployment has soared to more than 18 per cent. President Muhammadu Buhari’s administration has come under fire recently for its treatment of South African telecoms company MTN, the country’s largest mobile operator with more than 50m subscribers, and among its biggest non-oil foreign investors. In August, the central bank accused MTN of illegally repatriating $8.1bn in dividends. A week later, the attorneygeneral’s office slapped the company with a bill for $2bn in back taxes. Executives in the commercial capital of Lagos have warmed that the moves will spook foreign investors.

hen a mid-sized company in West London was worried about the security of its computer network, Darktrace seemed to have the answer. Today, the company spends around $10,000 a month with the $1.65bn cyber security start-up. But one engineer at the business, who asked not to be named, said it sends so many false alerts that many IT staff ignore it. “Half my team won’t look at it once during the day . . . I do think it’s very expensive, I’m not going to lie,” he said. Darktrace is one of the UK’s most promising tech start-ups, with clients including parts of the National Health Service, Gatwick airport and Drax, the UK’s biggest power station. But for the company to compete with its rivals in the US, it needs to both keep winning new clients and to persuade customers such as the engineer to remain loyal. AI works like ‘human immune system’ Darktrace, according to its promotional material, is “modelled on the human immune system” in the way it uses artificial intelligence to detect viruses and cyber threats inside a computer network. Its customers are offered a threeweek free trial and asked to plug a Darktrace box into their network. The AI studies how employees behave on their computers and then draws up a gaming-style visualisation of where there are issues. Dave Palmer, a former British intelligence employee who is Darktrace’s director of technology, describes this as the “canvas on which the AI explains why it’s worried about problems.” When IT staff click on alerts, they see detailed activity logs, which they can ask Darktrace staff to help analyse for a fee. “People generally like the interface, they think it’s sexy . . . it demos well,” said Lawrence Orans, a network security research analyst at Gartner. “[Darktrace] are really strong in marketing . . . they were the first network security vendor really to promote or advertise the fact that their solution is heavily based on machine learning,” he added. He added that many AI cyber security products throw off false alerts. “Invariably you’ll have alerts about things that aren’t really a problem.” ‘You can end up creating a product people don’t understand.’ But another cyber security researcher, who asked not to be named, nevertheless said that he had “heard feedback that it is very difficult to cut through the noise of false positives and get at the problem [with] Darktrace”. A former Darktrace employee said companies with smaller IT departments might not be able to use the system to its full advantage. “For all the hype, it’s not just about getting the security product into your system . . . you can end up creating a product [people] don’t really understand,” the person said. IT staff who struggle to use the system can ask Darktrace to analyse its results for a fee. But co-chief executive Poppy Gustafsson said the analysis service comprises a small part of overall revenues: “We don’t do consulting,” she said to the FT in the summer. “Our tech is not just about detecting cyber threat but also to autonomously respond.”

Thursday 11 October 2018







SoftBank in talks to invest $10bn in WeWork Investment could lead to the Saudi-backed fund owning a majority of US office group ARASH MASSOUDI AND KANA INAGAKI


apan’s SoftBank and its Saudi Arabia-backed Vision Fund are in talks to invest a further $10bn in office space and co-working group WeWork, a deal that would provide fresh capital to the lossmaking business and delay a stock market listing. Negotiations between US company WeWork and SoftBank’s Vision Fund have been going on for months and initially revolved around a smaller investment round led by SoftBank that would have valued the New Yorkbased start-up at up to $40bn. People close to the matter said those discussions have shifted to talks about a much larger investment, which could reach as much as $10bn. The SoftBank investment would be phased over a two-year period, one of these people said. The valuation being discussed was not immediately clear, though one person added that SoftBank would seek to make the deal at a favourable valuation. People close to the matter said the investment discussions are serious but no deal is guaranteed. Shares in SoftBank fell 5.4 per cent on Wednesday in Tokyo trading, after the Wall Street Journal reported that the company was in talks to invest $15bn-$20bn to obtain a majority stake in WeWork. SoftBank and WeWork declined to comment. An investment would mark a significant expansion of SoftBank’s bet on WeWork, with the Japanese group and its $93bn Vision Fund having agreed to place $4.4bn into the company last year at a $20bn valuation.

Depending on the investment size, SoftBank would control a large minority stake in WeWork and may even gain control of more than half of the company’s equity. It would also delay discussions over a potential listing of WeWork. One person close to the company said that WeWork has been receiving pitches from investment bankers about a deal to go public as soon as late next year. Meanwhile, WeWork’s net losses continue to grow as it focuses instead on aggressive overseas expansion and the acquisition of new properties and leaseholds. In the first half of 2018, losses at WeWork rose more than fourfold from the same period a year ago to $723m. Its rapid pace of expansion has raised concerns about the company’s frothy valuation as WeWork grapples with a jump in costs and large fixed investments in office buildings. The negotiations on the SoftBank side are being led by Ron Fisher, vicechairman of the Japanese group and one of a handful of executives who have worked by the side of SoftBank’s founder Masayoshi Son over the past two decades. Mr Fisher and Mark Schwartz, a former Goldman Sachs executive who is also on the SoftBank board, became WeWork directors last year as part of the $4.4bn investment. For SoftBank, an investment of a near majority stake in WeWork would mark a departure from Mr Son’s strategy of taking 20-30 per cent stakes in technology start-ups through the Vision Fund without the Japanese group itself having to manage the individual companies.

Competition and Markets Authority launches investigation into audit sector Fevertree shares dip as investors sour on tonic-maker NAOMI ROVNICK


hares in Fevertree, the British premium soft-drink maker whose stock market value long ago eclipsed that of its larger rival Britvic, fell as much as 7 per cent on Wednesday, continuing a steep sell-off of the popular share that has run for five trading sessions. The drop in Fevertree’s share price came after data released last week showed that rapid growth of the group’s products had started to stall, while investors also sold out of other consumer companies valued at high multiples of forecast earnings, such as Games Workshop. Shares in Fevertree, whose bottled tonics and other mixers have grown in popularity alongside the trend for British pubs and bars to sell new ranges of premium and artisan gins, hit an all-time high of £41.20 on September 12, which was more than 30 times their November 2014 IPO price. The stock fell as much as 6.8 per cent on Wednesday and was still down 6 per cent at £27.72 by lunchtime in London. Over the past five trading sessions, Fevertree has

fallen by 23 per cent. “A lot of it is do with a market sell-off of high-multiple stocks,” said Berenberg analyst Ned Hammond, who recommends investors continue buying Fevertree shares. Shares in fast-growing fantasy figurines retailer Games Workshop have also fallen 12 per cent in the last week. Mr Hammond added investors were spooked by data from market researcher Nielsen showing Fevertree’s sales to so called off-trade customers, such as grocery chains and off-licences, had slowed to 38 per cent in the four weeks to early September, compared with 75.2 per cent growth in the previous four weeks. The premium mixers maker is still valued at around 56 times forecast earnings for next year, however, compared to 13 times for traditional soft-drink maker Britvic. Fevertree, whose market capitalisation remains £1.4bn higher than Britvic’s £2bn valuation, reported an operating profit of £56.4m for the year to last December. Britvic made £163m, although this represented an earnings decline while Fevertree’s profits grew by 64 per cent.

Sony chief executive Kenichiro Yoshida: ‘We need to change to become flatter, speedier and more collaborative’ © Tokuyuki Matsubuchi/FT

Yoshida promises a speedy Sony

Fifth PlayStation on the way, Goodbye Google+, Microsoft grabs a stake in Grab SIMON MUNDY


enichiro Yoshida faced a daunting challenge when he became Sony’s chief executive earlier in April. The Japanese group had sustained cumulative losses of $8.8bn during a “lost decade” in which it shed 35,000 employees, as well as its laptop and battery businesses. In his first one-on-one interview as chief executive, Yoshida told the FT that Sony is working on a successor to the PlayStation 4, in defiance of those who are reading the last rites for gaming consoles. There had been rumours that Sony would instead create a tablet that could connect to other devices. His update on the console business came amid a broader discussion of Sony’s future, which Yoshida says needs to change its culture and become “flatter, speedier and more collaborative”. This will mean breaking down the barriers between business divisions, which he says have long operated in silos. “There is a sense of urgency,” Mr Yoshida said, insisting that improving earnings must not lead

to complacency within the group. Flag as Important Goodbye Google+ It was once billed as a potential rival to Facebook, but the Google+ social network has been shut down after news of a security flaw that gave outside developers access to private user data for three years. Meanwhile, it emerged that a Google employee had argued internally that disclosing the leak would cause political problems. The state of AI Today’s Big Read looks in depth at the current state of artificial intelligence. A fatal crash earlier this year showed the risks inherent in relying on humans as backups for autonomous vehicles. Some experts warn that expectations around the pace of AI development have become overheated. But others note that the only thing stopping the deployment of fully autonomous weapons systems, destroying targets without human control, is our discomfort with the idea. ““You can’t say the technology itself can only be used in a defensive way and under human control,” says

one. “It’s not true.” Microsoft invests in Grab Microsoft is joining the ridehailing revolution, by taking part in a $500m funding round by Singapore-based Grab. The US group contributed about $200m of that. The remainder came from other investors including SoftBank — which already has big stakes in Grab’s peers Uber and Ola. Forwarded The Stripe story Wired UK takes a deep look at Stripe, the payments company founded by two brothers from a small Irish village, and now valued at $20bn, handling payments for some of the biggest groups on the web. Amazon’s growing AI clout Artificial intelligence has played a key role in making Amazon a trillion-dollar company, and will be central to its future growth, says this report from Fast Company. Its innovations range from Deep Lens, a video camera system that users can programme to automate basic tasks, to incremental improvements to warehouse efficiency that are adding to the company’s formidable logistical strengths.

Stocks to watch: Sophos, Smurfit Kappa, Dixons Carphone, LVMH Packaging makers slump on fears of oversupply and Chinese competition BRYCE ELDER


ophos led the FTSE 250 gainers after hosting a customer event in London on Tuesday, where the security software group launched its Endpoint Detection Response suite for spotting and analysing malicious code. The stock had dropped last month on worries that a recent slowdown in billings was due to increased competition and pricing pressure, which would force a reset of guidance when Sophos delivers thirdquarter results later this month. Credit Suisse left the meeting “feeling confident in the continued structural growth of the industry and in Sophos’s ability to capitalise upon this through ongoing cross-selling and the introduction of new . . . products”. The bank was “encouraged that, despite the recent slowdown, new business growth is still double-digit and customer enthusiasm for Sophos remains high. As such, we are confident that Sophos remains one of the best medium-term growth stories in the sector.”

Packaging makers including Smurfit Kappa, Mondi and DS Smith slumped for a second day on worries that a glut of containerboard would drive prices sharply lower. The retreat follows Nine Dragons, the largest Chinese containerboard producer, saying on Monday that it would acquired a paper mill in Wisconsin to making containerboard. Goldman Sachs downgraded US-listed International Paper to “neutral” from “buy” as it cut target prices across the sector. The broker said it had “underestimated the speed and severity” of containerboard supply coming on to the market in response to the ecommerce boom, and was “incrementally concerned by the pace of recent new supply announcements as well as the fact that Chinese entrants are now entering the US market for the first time”. “Over the past 15 months we have had 12 new capacity projects announced with another seven companies . . . exploring further new capacity additions. Each of these projects is relatively small

(around 1 per cent of North American capacity), but in aggregate they are likely to result in oversupply at some point in the 2020-2022 time period even if demand growth remains at recent circa 2 per cent rates” Goldman Sachs LVMH was the Stoxx 50’s sharpest faller after third-quarter results from the luxury goods giant showed slowing growth across all sectors apart from its wine and spirits divisions. Quarterly sales growth for the group was 9.6 per cent, slightly below a 9.8 per cent consensus. “The quarter is likely to mark the beginning of the cyclical sales growth slowdown for LVMH and for the sector,” said Société Générale. Sellside stories HSBC upgraded Dixons Carphone to “buy” from “hold” with a 195p target price. A new bonus structure tied to free cash flow rather than earnings per share suggests management under new chief executive Alex Baldock is more ambitious than the current price suggests, HSBC said.





Thursday 11 October 2018

ANALYSIS Iran gets creative to beat sanctions and keep oil flowing Tehran seeks ways to circumvent ‘Great Satan’ and maintain economic lifeline NAJMEH BOZORGMEHR

W Guggenheim Securities: Wall Street and the risk of huge incentives The dealmaker has become a force in US M&A but it offers big commissions to its bankers



uring the financial crisis a decade ago, big banks were brought to their knees by reckless traders who made outsized bets on complex mortgage securities. For the dealmakers in other parts of these financial groups, who specialised in advising companies on mergers and acquisitions, this created an additional problem. They were trapped — first by the crippling debts accumulated by their colleagues and, over time, by tighter regulation of compensation. Alan Schwartz hoped to be part of the solution. He was a prominent M&A banker who served as the last chief executive of Bear Stearns, succeeding Jimmy Cayne, a cigar-chomping trader of the old school. After Bear collapsed and was sold to JPMorgan Chase in 2008, Mr Schwartz turned down suitors such as Goldman Sachs and opted instead to run Guggenheim Securities, the small broker-dealer arm of Guggenheim Partners, a Chicago money manager. His goal when he joined Guggenheim in 2009 was audacious — to build a dealmaking firm with the capabilities of a Bear, but without the big leveraged bets that wrecked it. The results provide an insight into the health of Wall Street a decade after the crisis. At a time when M&A activity is booming, firms such as Guggenheim have demonstrated an ability to generate substantial revenues without excessive leverage. But Guggenheim also points to the way that crisis-era curbs on pay and incentives in investment banking have started to erode. Mr Schwartz has made Guggenheim Securities into a formidable M&A player — ranking 11th in revenues among US advisers from 2014-16 — but not without paying a very pretty penny to certain prized new hires. Guggenheim recruited teams of prominent dealmakers by offering them a chance to “eat what they killed” in the parlance of Wall Street, keeping a bigger cut of their deal fees than they could at more regulated Wall Street banks. The annual pay for one M&A banker at Guggenheim, who was not even part of senior management, was more than that of the chief executive of Goldman, who last year earned $24m. Another banker at Guggenheim also has a potential pay deal worth tens of millions of dollars. “There was a certain type of person out there in our industry that missed what our industry was when they grew up in it,” Mr Schwartz, 68, told the FT during an interview at Guggenheim’s New York office. “And I just felt

like if you created the one thing that was the most like what some of us got to be part of building in our careers, that was just going to be very attractive to people. And that’s what happened.” The danger with Guggenheimstyle incentives is that they can risk encouraging dealmakers to be too quick to pull the trigger on transactions and thereby earn their fees. The commission created by the US Congress to investigate the financial crisis concluded that paying bankers too much, too soon had impaired decisionmaking. It also noted that Bear awarded Mr Schwartz and four other top executives $1.4bn in cash and stock in the eight years before the company’s downfall. “Compensation systems — designed in an environment of cheap money, intense competition and light regulation — too often rewarded the quick deal, the short-term gain, without proper consideration of long-term consequences,” said the Financial Crisis Inquiry Commission. Last month, Guggenheim Securities sought an injunction against the Financial Times to prevent publication of purportedly confidential information. The application has been resolved on mutually agreed terms. Guggenheim’s sales pitch for prospective bankers was meant to distinguish it both from the traditional powers on Wall Street as well as the new crop of M&A advisory shops. It promised greater riches than big banks subjected to the new forms of oversight — which included, for a time, a “pay tsar” for banks receiving federal bailouts. At the same time it sought to avoid offering substantial financial guarantees to lure away talent. Instead, Guggenheim promised generous commission rates, particularly for early recruits. While a competitor might allocate a quarter or a third of a fee to a senior banker who worked on a transaction, Guggenheim in one instance credited well over 60 per cent of the fees from one early deal to the “bonus pool” created for an entire newly arrived team (the overall take-home pay for the team was somewhat lower due to certain operating costs). Guggenheim’s compensation gambit, like those of other boutique operations, represented a departure from the ways of traditional Wall Street investment banking partnerships. The old guard avoided making big promises to fresh recruits, says Roy Smith, a business professor at New York University and a former Goldman partner. “Compensation in the old investment banking partnerships was based on low salaries with no guarantees, but a healthy bonus for individuals who were seen to be pulling their own weight,” he

says. “Some modern boutiques look at compensation the other way around — they pay a lot to bring in people who are rainmakers who can bring in business, and hope that will be enough to gather some quick market share.” The hazards of this approach were evident even to Guggenheim. It made sure that the cut of deal fees for bankers’ bonus pools fell over time. A dealmaking team which was allocated 60 per cent of transaction revenue for their bonus pool saw their share fall to about 40 per cent over time, say people familiar with the matter. Guggenheim claims its ratio of compensation as a proportion of revenue has been at the lower to middle end of the average for boutique Wall Street firms. “Our job was to convince people that if they bought into what we were saying then we were the only place to go to be part of that for their future,” says a senior executive at Guggenheim Securities. “We said [to potential hires], you’re going to have to risk more than you do somewhere else to make similar to what you would make somewhere else . . . It was a way for us to filter for who was really buying in.” The business model that has developed at Guggenheim Securities reflects these opportunistic instincts. Unlike other new boutiques such as Centerview Partners and Moelis & Co, Mr Schwartz decided against creating a “monoline” that would advise clients on M&A and do little else. Guggenheim set out to add banking capabilities over time if it saw a profitable opportunity. The goal was to create a full-service investment bank that could trade and underwrite as well as advise clients on deals. As a result, Guggenheim is a bona fide M&A specialist. It advised Walt Disney on its $89bn acquisition including debt of 21st Century Fox’s assets, and Chubb in its $30bn sale to rival Ace in 2015. But it also specialises in arranging corporate loans, underwriting equity issues and even securitising fast-food royalties for the likes of Domino’s Pizza and Dunkin’ Donuts. This year, it reached a deal to acquire Millstein & Co, a 30-person debt restructuring boutique founded by former Treasury department official Jim Millstein, which would be expected to profit in a downturn. “I just don’t believe in monolines,” says Mr Schwartz. “I believe that to be a true thought partner — which is what we believe we have been with our clients — you need to have a full access to the markets and understanding of the markets and participate in them. So we set out to build what we thought was a very differentiated model which was a full-service investment bank driven by intellectual property, not balance sheet.”

hen Donald Trump’s sanctions hit Iran’s oil exports next month, the Islamic republic will not just scramble to find alternative revenues to provide an 80m-strong population with medicine and other vital commodities. Tehran is also keen to make sure the president of the country they call the “Great Satan” fails in his goal to shut down Iran’s main economic lifeline. “Trump must and will definitely suffer an embarrassing failure by not being able to bring down Iran’s oil exports to zero,” said a senior energy businessman close to the regime. “We will achieve this even if [we have] to barter crude for Russian weapons or store our crude in Malaysia and Thailand.” Iran, which derives a large part of its foreign currencies and state revenues from oil exports, is seeking creative ways to sell its oil ahead of the reimposition of US sanctions on November 4. At stake are Iran’s hopes of maintaining some leverage in negotiations with the Trump administration. Insiders believe any talks with Washington could only happen once Iran has shown it can withstand the new sanctions and, as a result, not have its hands tied at the negotiating table. Plans under consideration to circumvent the sanctions include an initiative to revive “middlemen” who would be allowed to buy barrels of crude through a domestic energy exchange, or “bourse”, and sell them in world markets under the guise of Iran’s “private sector”. Established in 2012, the bourse has not traded oil since at least 2015, when Iran agreed to curb its nuclear ambitions in exchange for the lifting of crippling international sanctions. The measure is a sign of how desperate the regime is to maintain even the smallest amount of oil exports. Babak Zanjani, a local

businessman, is facing a death sentence for refusing to pay back $2.8bn worth of crude he sold to Asian buyers and never paid back the state under the previous sanctions era. “Selling crude through the energy bourse is more symbolic to show that Iran is diversifying channels to sell crude and its determination to circumvent sanctions,” said Saeed Laylaz, a reform-minded analyst of Iran’s political economy. “In practice, however, anyone who cannot buy crude from the National Iranian Oil Company would not buy it from those affiliated to the armed forces, either, unless Iran decides to create other Zanjanis.” The punitive measures against Opec’s third-largest oil producer are expected to be more harshly felt than a first wave of economic sanctions imposed in the wake of Mr Trump’s decision in May to withdraw from the 2015 Iranian nuclear accord. Iran’s ability to more than double its oil exports following the Vienna agreement helped the Islamic republic drag itself out of a deep recession and rein in 40 per cent inflation. Tehran politicians say they have been encouraged by Britain, France and Germany, the other nuclear deal signatories, who have sought to set up a financial mechanism to help Iran to continue to export oil to Europe and Asia. “European governments’ support umbrella will embolden companies — in particular those which do not have interests in the US such as smalland medium-sized companies — to help Iran sell crude,” insisted Mohammad Ali Khatibi, who was in charge of selling crude under the previous sanctions in 2011 and 2012. “This era [of sanctions on Iran’s oil] is not going to last too long. In the worst-case scenario we will sell at least 1m bpd,” he added optimistically.

MANTRAC introduces new CAT product to Nigerian market


ANTRAC Nigeria ltd. recently introduced into the Nigerian construction industry a new series of excavators, Next Generation Cat Excavators (320GC, 320 and 323). The new sets of excavators help enhance operating efficiency, lower fuel and maintenance costs, and improve operator comfort compared to previous models. Ahmed Ragab, the MD of MANTRAC Nigeria ltd, said “These novel excavators present unique combinations of purpose – built features expressly designed to match customers’ productivity and cost targets”. According to Ragab, the new series boast the industry’s highest level of standard factory – equipped technology to boost productivity. He opined that all models come with the famed integrated CAT connect technology for operating efficiency by up to 45% over traditional grading operations. “Offering guidance for depth, slope and horizontal distance to grade, the CAT GRADE with 2D system helps operators reach desired grade quickly and accurately. With

the system’s E-fence feature the machine is empowered to work safely under structures or near traffic by preventing any part of the excavator from moving outside operator defined set points. The standard 2D system can be upgraded to CAT GRADE with Advanced 2D or CAT GRADE with 3D,” said Ragab. The new CAT provides fuel saving capability up to 25% reducing maintenance costs by 15%, making the new excavators designed to increase operator performance. The flag off was organized with ‘New Range New Rules’ campaigns. The Operator Challenge coming up on October 11 -13, is designed to give machine operators the opportunity to experience the innovative and breakthrough technology present in these excavators. Certificates and prizes will be awarded to the best operators during the challenge A VIP event is planned for the Oniru beach in Victoria Island on 18 October to introduce the products to select customers. There will be product demonstrations and information sharing led by product experts from caterpillar.




Opinion Atiku and his perception problem?

CHRISTOPHER AKOR Chris  Akor,  a  First  Class   graduate  of  Political  Science,   holds  an  MSc  in  African  Studies   from  the  University  of  Oxford  and   is  BusinessDay’s  Op-­Ed  Editor


ince the PDP primaries on Sunday that threw up Atiku Abubakar as the main challenger of president Buhari in the 2019 presidential elections, there’s been noticeable excitement in the camp of the opposition PDP, or at least a section of it if one factors the dissatisfaction of the Wike and Fayose camps. Abubakar, a veteran politician and presidential aspirant, earned his victory. From experience he knew it would be impossible to contest a primary election with a sitting president and win and was the first among the dissatisfied APC bigwigs to move to the PDP. That early move gave him time to do the groundwork of convincing the PDP delegates that were going to elect the party’s flag

bearer. So the contest, despite the presence of very eminent Nigerians in the mix like Kingsley Moghalu, Oby Ezekwesili, Obadiah Mailafia, Donald Duke and others, appear to be a straight fight between Buhari and Atiku. But there’s a snag. Atiku has a corruption perception problem, which has refused to go away. His former boss, Olusegun Obasanjo, has almost successfully painted him as a corrupt individual and power monger who cannot be trusted to govern the country. The two men sensationally fell apart during their second term in office as they both traded accusations of corruption against each other. While Atiku surreptitiously worked to scuttle Obasanjo’s third term ambition, Obasanjo in retaliation, thwarted Atiku’s presidential aspiration not just in 2007, but even subsequently. In the run up to the 2011 election when Atiku was selected as the Northern consensus candidate, Obasanjo’s retort when asked to comment on it was to mock his former vice president by laughing throughout before saying in pidgin English: “I dey laugh O!� Of course, Obasanjo had the last laugh as Atiku was defeated in the presidential primary election. Obasanjo took it a step further by detailing Atiku’s alleged character flaws, vaunting ambi-

tions, dalliances with marabouts and spiritualists, and above all, various corrupt dealings covering various sectors of the economy in his memoirs “My Watch�. Although the two have met severally after leaving office, it appears Atiku has been unable to convince his former boss to


Atiku appears to have learnt valuable lessons from the APC campaign of 2015. He has begun to engage Nigerians in sensible conversations and has been fighting really hard to remove the corruption tag placed on him by his former boss and many others


support his presidential aspiration. And as Goodluck Jonathan advised him recently, Obasanjo’s support is critical to his realising his presidential ambition. Regardless how his reconciliation with the “boss of bosses� goes, Atiku faces a formidable challenge of refurbishing his reputation and removing the corruption tag placed around his neck. But he has a precedent

to learn from. Atiku may have a lesson or two to learn from his former party – the All Progressive Congress (APC). In deciding to go for Muhammadu Buhari, leaders of the party were well aware of the cult-like following the retired General had in the north of Nigeria. The only problem however, was the General’s perception – partly fuelled by years of PDP campaign propaganda - as an ethnic champion and religious bigot. In fact, many members of the APC had previously expressed views about the unelectability of Buhari in the past. For instance, Mallam Nasir Elrufai, in a repost to Buhari in 2010 reminded him of his “perpetual unelectability because of his record as military head of state... [and] his insensitivity to Nigeria’s diversity and parochial focus...� Therefore, for the party to stand a chance of defeating the incumbent, it must not only sweep the north (which it was sure of doing) but also split the southern votes with the incumbent. To do that however, the party must first successfully remove the ethnic and religious toga hung around the neck of its candidate in the South of Nigeria. They promptly hired prominent international political consultants, AKPD Message and Media, a firm co-founded by David Axelrod, who was chief strategist for the Barack

Obama presidential campaign and went on to become senior adviser to Obama to help with the party’s and especially Buhari’s campaign, public affairs messaging and political advertising. The party successfully leveraged the firm’s skills, experience and expertise throughout the campaign circle to sell their candidate to Nigerians. Just like the party intended, Buhari’s clannishness, provinciality and religious bigotry was never an issue in the election. The issue was on corruption and Buhari’s strong anti-corruption records and integrity. The campaign was not only expertly managed, but the candidate himself was prevented from talking too much in the campaign trials or making extempore remarks that will give him away. He stuck to what he was told to do and say and to wear attires prescribed for him for every occasion. The rest, as they say, is now history. Atiku appears to have learnt valuable lessons from the APC campaign of 2015. He has begun to engage Nigerians in sensible conversations and has been fighting really hard, through social media advertorials, to remove the corruption tag placed on him by his former boss and many others. He has continued to remind Nigerians that he was a very wealthy individual before joining government and does not

need to steal government money to lead a meaningful life and has challenged anyone with any evidence of corruption against him to come forward with such evidence. True, it is to his credit that all the corruption cases against him have failed in court. One observation though. Nigerians feel very strongly about corruption and deeply despise so-called corrupt politicians. Buhari may have succeeded in dispelling the provinciality and religious bigot tag, but it remains to be seen whether Atiku can successfully remove the corruption tag. Luckily for Atiku however, unlike in 2015 when the election discourse was focused on corruption, the 2019 election discourse is more focused on the economy, employment and poverty – issues where Atiku seems to be strong and Buhari weak. According to Williams and Associates, an opinion research and consulting firm, “unlike 2015, corruption as an issue is considerably less important than employment and poverty alleviation- the people are looking for a president who can address these issues�. What’s more, according to the firm, a research it conducted shows that over 6/10 Nigerians believe the country is going in the wrong direction and two thirds of the country do not believe Buhari deserves re-election.�

What research has joined together, let no methodology put asunder

BELL IHUA Dr.  Bell  Ihua  is  a  public   opinion  polling  and  social   research  expert.  He   writes  from  Abuja.  


ne of the common sins of social researchers is that after several years on the job, they begin to see human beings as tools to be used to achieve their research objectives. They no longer see the human side of their participants, but see them as mere puns on their chess board; just for the purpose of accomplishing a great research piece for publication or one that the client would be happy with when delivered. Unless social researchers train themselves consciously, they would find themselves guilty of this sin. I confess, I’m sometimes guilty. Ever so often, I catch myself veering off at events. Instead of relaxing and enjoying the moment, I seat there wishing I could share a few questionnaires, conduct a quick focus group or personal interviews to capture people’s opinions on any subject; especially when I have spotted a few folks in the crowd who seem quite opinionated. Of

course, in a country like Nigeria, there are so many issues and concerns that could form the basis of conceptualizing an on-the-spot research project. You wouldn’t want to know some of the weird things cooking up in the mind of social researchers. A fellow researcher told me he had once imagined visiting the mortuary to interview corpses on causes of their death! Luckily for me, I learnt very early in my research career that there’s so much more to people than seeing them as mere toolsrespondents, participants and interviewees. My Professor, Andrew Fearne, modelled this a lot. He was the sort of researcher that made friends and built relationships alongside his academic and research journey; and the result was evident in the kinds of consulting assignments he was called on to handle, the number of external examiner roles and visiting professorships he received, the amount of research grants he won, and the exceptional collaborations he had with other academics and institutions across town and gown. So, I decided I wasn’t going to be a straight-jacket researcher, who only focuses on his research outcomes and deliverables, without seeking to touch base with the people I came in contact with on my research journey. Fast forward to 2013, when ENABLE, a DFID programme in Nigeria, commissioned my firm to conduct a study on the impact of the MYTO II electricity tariff regime on SMEs in the country. One of the locations I had to visit was Bauchi State. The mandate was clear; (1) to meet and interact

with members of the state branch of the National Association of Small and Medium Enterprises (NASME), and (2) to interview owner-managers of SMEs in the state. Interestingly, I had the opportunity of meeting and interviewing several MDs and heads of leading Bauchi-based businesses, such as Alind Wires, Superior Core Industries and Bauchi Furniture to mention a few. However, on that journey, one particular interview left an indelibly remarkable impression on me. It was the session with Hajiya Aishatu Garba Lili, the owner of popular Al-Barka Bakery in Bauchi. It was a sunny afternoon, and I visited Hajia Aishatu in the company of the NASME State Assistant Secretary at the time, one Alhaji Suleiman Gambo. On arrival at Hajia’s home, he did the initial introduction, explaining how I was an Abuja-based researcher visiting town to conduct a study on impact of the power sector and new electricity tariff on SMEs in Bauchi. His introduction was instantly met with stiff resistance. Hajia quipped “you people have come again. Many researchers have come here to interview us, and after they finish, we never see them again or see any changes in the challenges that we face.� Thank goodness, it wasn’t my first time hearing that sort of statement, so I simply smiled and watched quietly as she spoke. I sat in her lounge for close to an hour as she went back and forth attending to other issues and reverting at intervals. She decried the poor state of infrastructure, epilepticpower supply, rising cost of raw materials (particularly

flour and sugar), incidence of multiple taxes, and the lack of credit bedeviling the industry and hampering their operations. Things were tough, the economy was tight, and she had recently downsized and cut over half of her employees. What do you do when you’re faced with this kind of situation on the field? Sometimes, researchers must learn to empathize with respondents. I could see that her initial resistance and apathy wasn’t because she had anything against me, but it was borne out of the frustrations, struggles and challenges of being a manufacturer in a country like Nigeria. I could tell that beyond the resistance was a kind-hearted woman, caring mother and community leader who many people looked up to for their survival. So, I sat patiently, smiled and gazed as she bore her heart on the challenges facing her bakery operations. Then after about an hour she turned and said to me, “what did you say your name is again?� I responded, and she retorted “I hope you’re not offended with me? It’s just that we’ve seen several researchers like you in the past, promising to address our issues, but after the interview, we never hear from them again.� I made her a candid promise, I wasn’t going to be a one-hit researcher, but I’ll keep in touch even after completing the assignment. Her eyes brimmed, I could tell she was happy, and she proceeded to answer my questions; even granting me access to site and take shots of electricity bills covering the period under investigation. I successfully conducted the interview and made

a new friend in the process. I took pictures with her, and she gifted me with three loaves of her vintage Al-Barka Bread. She also shared her plans to apply for the YouWin Women entrepreneurs grant, of which I encouraged her to give it a shot! This marked the beginning of a long son-and-mother relationship between Hajia Aishatu and I. The weeks, months and years that followed became one of friendship, family and bonding. It never mattered if she was Muslim and I a Christian. She called at intervals to checkup on me, and I would do the same as time permitted. It became a standard rule amongst my colleagues, that anyone visiting Bauchi on projects must go pay homage to my mother, Hajia Aishatu. Suffice to say, she won the YouWin grant and rang me excitedly on phone to break the good news. She visited me in the office, at home, and met with my family several times. There was no time she visited Abuja that she wouldn’t call, bringing me bread, dried meat (Kilishi) and shredded beef (dambu nama), all the way from Bauchi. Once I received her calls, I would drive down to wherever she was lodged and spend some time with her. Similarly, when it was Eid celebration, I would send funds to Alhaji Gambo to buy a ram and deliver to her home. She never ceased calling and praying for me and my family. However, sometime in late 2016, I received a call from her daughter, that Hajia was involved in an accident and hospitalized in Jos. I spoke to her on phone and prayed with her. She was later brought to Abuja to receive further treatment. My

wife and I paid her a visit at Garki Hospital, spent some time with her, and had the opportunity of meeting her husband for the first time. Apparently, he had heard about me and said, “So you are the Dr. Bell I’ve been hearing about. It’s good to meet you.� Her health picked up afterwards and she returned to Bauchi. Sadly, on 13th November 2017, I received a call from one of Hajia’s nieces informing me of her demise. I immediately rang her daughter, who confirmed the news. I was broken, I was shattered, I wept like a baby; it was black Monday. My beloved Hajia Aishatu Garba Lili, was no more, and I never had the opportunity to say farewell. Regrettably, I was too broken at the time that I was unable to write her a tribute. But as we come close to her 1st year memorial in about a month’s time, I have spent some time reflecting on my relationship with Hajia. This was truly one relationship research joined together, and I pray for God’s continued strength on her family. In conclusion, social researchers often find themselves excessively bogged down with trivial details bordering on methodological correctness and ethical concerns, that we tend to lose sight of the human angle of our work. I believe this is a critical aspect of social research, we have to be in touch with people. It is important to realizethat human existence and relationships supersede any gratification that may come from producing an award-wining research piece. As Dike Chukwumerije aptly puts it, there’s no culture older than being human.

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BusinessDay 11 Oct 2018  
BusinessDay 11 Oct 2018