BusinessDay 11 Sep 2019

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DANGFLOUR NESTLE NN22.25 5.95%pc N1080.00 27,047.58

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Foreign Reserve - $43.10bn Cross Rates - GBP-$:1.24 YUANY-N 50.97 Commodities Cocoa

US$2,287.00

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$1,491.48

₦3,627,373.21 -0.29pc

$62.43

I N300

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$-N 357.00 360.00 £-N 439.00 450.00 €-N 390.00 400.00

Crude Oil

news you can trust I **WEDNESDAY 11 SEPTEMBER 2019 I vol. 19, no 391

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Spot ($/N)

I&E FX Window CBN Official Rate Currency Futures

($/N)

361.80 306.85

NGUS NOV 27 2019 363.97

FG admits facing ‘significant mid-term fiscal challenges’ ONYINYE NWACHUKWU, CYNTHIA EGBOBOH, Abuja, & LOLADE AKINMURELE, Lagos

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igeria’s finance m i n i s t e r, Z a i n ab Ahmed, said Tuesday that the Federal Government faces “significant medium-term fiscal challenges, especially with respect to revenue generation and rapid growth in personnel costs”.

To clean up the government ’s ugly balance sheet, Ahmed said key reforms would b e i m p l e m e nt e d w i t h “ i n c re a s e d v ig ou r t o i mp rove revenue collection and expenditure management”.

She said improving transparency regarding government

Continues on page 39

Abubakar Suleiman (m), chief executive officer, Sterling Bank; Akinyinka Akintunde (l), business development manager, AFEX Commodities Exchange Limited, and Quan Le (r), CEO, Binkabi, at the formal unveiling of SABEX Platform during Agriculture Summit Africa powered by Sterling Bank in Abuja.

3M -0.98 11.11

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20 Y 0.00

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NGUS FEB 26 2020 364.42

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Projects N8.908trn expenditure for 2020

fgn bonds

Treasury bills

NGUS SEP 30 2020 365.47

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Tension, mixed expectations as Buhari, Atiku know fate today FELIX OMOHOMHION, INNOCENT ODOH, Abuja, & INIOBONG IWOK, Lagos

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nxiety has heightened and expectations have reached fever pitch as the Presidential Election Petitions Tribunal sitting in Abuja is set to give judgment in the petition filed by Atiku Abukakar, presidential candidate of the People’s

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Inside Xenophobic attacks: First batch of Nigerian returnees arrive today P. 2

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Wednesday 11 September 2019

BUSINESS DAY

news L-R: Seyi Makinde, governor, Oyo State; Kabiru Adeniyi Yagboyaju, general manager, treasury services, Federal Mortgage Bank of Nigeria, and Abubakar Musa Omar, group head, National Housing Fund, during the bank management team’s visit to the governor’s office in Ibadan.

Non-implementation of Minimum Pension Guarantee deprives 2,801 retirees MODESTUS ANAESORONYE

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he non-implementation of the Minimum Pension Guarantee (MPG), one of the pension protection policies that came with the 2014 Pension Reform Act, has shut out 2,801 retirees from having pensions in retirement.

The MPG was meant to ensure support for eligible retirees by augmenting the balance in their Retirement Savings Accounts (RSAs) to enable them qualify for a reasonable monthly pension payment.

But according to figures released by the National Pension Commission (PenCom) for the second quarter of 2019, the retirees were paid off en-block because the balance in their RSA was not sufficient to provide them

pension in retirement, as provided in the law.

PenCom in the report stated that the Commission granted approval for the payment of the entire RSA balances of these categories of retirees whose RSA balances were N550,000 or below and considered insufficient to procure a Programmed Withdrawal or Annuity of a reasonable amount over an expected lifespan.

Accordingly, the sum of N665.38 million was paid to 2,801 retirees, including foreigners leaving Nigeria, which comprised 173 from the public sector retirees (Federal and State) and 2,628 from the private sector.

This brings the number of retirees that have so far received en-block payments to 109,284, having collected payments totalling N27.09 billion from inception to the

end of the second quarter of 2019.

Pius Apere, managing director/CEO, Anchor Actuarial Services Limited, said the implementation of the MPG would create excitement and build contributor confidence, whether in the formal or informal sector.

He noted that the regulation for protection fund needs to be simple with less documentation, stating that adequate periodic reviews and monitoring the effective implementation of the MPG would be required.

“The implementation of GMP will also help to bring confidence in the Contributory Pension Scheme (CPS),” Apere said.

Misbahu Yola, managing director/CEO, FCMB Pensions Limited, had said at the inclusion of the MPG in the Act that the creation

of the Pension Protection Fund (PPF) and MPG was a welcome development for all stakeholders in the pension industry and would give more security to low level contributors.

He also noted that funding the scheme would require political will and commitment, stating that it would foster greater confidence in pension administration and attract more participation.

To fund the MPF and MPG, there was to be an annual subvention of one percent of the total monthly wage bill payable to employees in the Public Service of the Federation that was to be set aside by FG, but this has yet to take off.

Besides that, there was also to be a levy paid by the

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Xenophobic attacks: First batch of Nigerian returnees arrive today IFEOMA OKEKE

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he first batch of Nigerians living in South Africa who registered for evacuation from the former apartheid enclave will arrive Nigeria today.

The returnees are being evacuated via Air Peace, Nigeria’s largest carrier.

The Air Peace flight was scheduled to depart the Murtala Muhammed International Airport (MMIA) Lagos at 11.30pm on Tuesday, land at O. R. Tambo International Airport, South Africa, in the early hours of today, and arrive at the cargo area of MMIA in the afternoon.

Following the xenophobic attacks on Nigerians in South Africa, the Federal Government had granted approval that any Nigerian in South Africa willing to return home

should indicate interest. More than 600 Nigerians have reportedly registered for evacuation from the country.

The inaugural evacuation was delayed till Tuesday following information that some Nigerians planning to leave South Africa had expired travel documents and may need to get travel certificates if they were to return.

BusinessDay’s checks show that the Air Peace, which will be airlifting the passengers using its Boeing 777, cannot take the stranded 614 passengers at once, so it may have to make a return trip to take the remaining passengers.

Investigations show that it took some time for the Nigerian High Commission in South Africa to register the Nigerians at Johannesburg and Pretoria billed to travel. www.businessday.ng

“The Air Peace flight to South Africa will take off from Lagos and land in Johannesburg, South Africa and back.

As earlier stated, the take-off would be on Tuesday. This is because the Nigerians in South Africa have to take travel certificate because many of them don’t have travel document and their passports have since expired,” a source close to the government said.

“Air Peace who volunteered this incredible feat has readied its Boeing 777 aircraft for the flight since Tuesday but the Nigerian High Commission needed time to register the Nigerians billed to travel. They are already doing that in Johannesburg and Pretoria,” the source said.

Allen Onyema, Air Peace chairman, said he was doing this to support the Federal Government.

“We want to send a signal to the world that Nigerians are their brothers’ keepers and I support the Federal Government and the president who would have done the same as private citizen. Buhari under Shagari drove away insurgents,” Onyema said.

Onyema had warned Nigerians not to fall prey to fraudsters who were demanding monies from Nigerians and are bent on sabotaging efforts to save Nigerians.

“We are offering free trip to Nigerians in South Africa to return home after going through the traumatic experience of the attacks. Air Peace has said this is free and we are doing it in solidarity with the Federal Government,” Onyema said.

•Continues online at www.businessday.ng

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Two months after, AirPeace maintains flight frequency to Dubai …records 60% load factor IFEOMA OKEKE

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wo months after Nigeria’s largest carrier, Air Peace commenced operations to Sharjah, the carrier has maintained its three weekly flights it started with. The airline is also seeing a load factor of 60 percent and above.

While AirPeace continues to operate three times weekly to Sharjah; TuesDays, Fridays and Sundays, from only Murtala Muhammed International Airport (MMIA) Lagos, Emirates operates two daily flights from both MMIA and Nnamdi Azikiwe International Airport is an international airport, Abuja, amounting to 14 frequencies in a week.

Stakeholders in the aviation sector had raised doubts on whether the carrier will sustain the route and frequency into the destination as a result on aero politics on the route.

But Allen Onyema, chairman, Air Peace restated that Air Peace is well prepared to ride the storm.

Onyema said: “Before you go into any business, you need to study the business and the environment. You have to know that airline business, for

example, is a risky one. What are the factors that have made many airlines in Nigeria to fall by the way side? You really need to know where you are coming from; where the other airlines are coming from and what has been responsible for their failure.”

This is also as the airline has kept its ticket fares relatively lower than its major competitors in the market.

BusinessDay’s checks show that a return ticket on LagosDubai route using high-end airlines such as Emirates and Qatar Airways costs between N300,000 to N370,000, which between 32 percent and 27 percent decrease compared to AirPeace who is offering its passengers between N203,000 to N270,000 for a return ticket on the same route.

A travel agent who craved anonymity told BusinessDay that when the carrier started it had high patronage because the airline charged as low as N155,000 to N175,000 for a return ticket on Sharjah route but the airline is currently charging over N200,000, making the average passenger book for ticket months ahead using Emirates or other high end carriers in a bid to get cheaper rates.

•Continues online at www.businessday.ng

Oil price rebound may put Nigeria back to sleep STEPHEN ONYEKWELU

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il prices have increased in the last two days thanks to Saudi Arabia’s renewed commitment to output cuts. But such gains in prices often have the negative effect of making Nigeria’s economy managers lose a sense of urgency in steering Africa’s most populous nation towards economic prosperity.

Oil prices rose about 2 percent on Monday after Prince Abdulaziz bin Salman, the new Saudi energy minister, confirmed expectations that he would stick with his country’s policy of limiting crude output to support prices.

Abdulaziz, son of Saudi King Salman and a longtime member of the Saudi delegation to the Organisation of Petroleum Exporting Countries (OPEC), replaced Khalid al-Falih on Sunday.

“The weekend announcement of a change in leadership within the Saudi oil ministry was accompanied by strong suggestions that production restraint would continue until the market achieves a better balance,” Jim Ritterbusch, president of Ritterbusch and Associates, said in a note.

Brent crude futures @Businessdayng

gained $1.05, or 1.7 percent, to settle at $62.59 a barrel, while US West Texas Intermediate (WTI) crude futures rose $1.33, or 2.4 percent, to settle at $57.85 a barrel. On Tuesday, Brent crude futures sustained gain at $62.92, and West Texas Intermediate at $58.21.

However, gains in oil prices may not save Africa’s biggest oil exporter that needs to grow by 5 percent per annum in order to be able to create 3 million jobs per year for its teeming youthful population. Latest gross domestic product data, for the three months ending in June (Q2), showed economic growth slowed to 1.9 percent from a revised 2.1 percent in the first quarter. Experts say higher oil prices can only be good news for Nigeria if it is ploughed into education, health, and infrastructure.

The country has an infrastructure deficit that requires $100 billion annually for the next 30 years, according to the African Development Bank.

The countr y’s education and health systems are collapsing. One of every five out-of-school children in the world is in Nigeria, according to the United Nations International Chil-

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Wednesday 11 September 2019

BUSINESS DAY

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BUSINESS DAY

AFEX ComX Weekly Report

September 9, 2019

AFEX Commodities Index - ACI

300.00

250.00

200.00 161.25 150.00

2016=100

100.00

50.00

Maize

0.00 Dec-16

Feb-17

Apr-17

Jun-17

Aug-17

Soybean

Oct-17

Dec-17

Feb-18

Paddy rice

Apr-18

Jun-18

Composite

Aug-18

Oct-18

Dec-18

Feb-19

Apr-19

Jun-19

Aug-19

Composite |N104.32|161.25pts Season-till-date

1.38%

Week-on-week

0.00%

Maize |N84.00|176.16 pts Season-till-date

5.62%

Week-on-week

0.00%

ยนSoybean |N140.00|195.24pts Season-till-date

16.67%

Week-on-week

0.00%

2

Paddy rice |N125.00|124.96 pts

Season-till-date Week-on-week

3

0.00% 0.00%

Sorghum

4

Cocoa

83.00

700.00

301.00

Week-onWeek (%)

0.00

0.00

0.00

marketdata@afexnigeria.com +234 903 000 1333 AFEX Nigeria @AFEXNigeria @afexnigeria | www.afexnigeria.com The information contained in this report has been compiled for the purpose of ease of access and understanding, and exempts the contributor from taking any responsibility for accuracy of the content. Users accept that errors or omissions cannot be the basis of any legal claims, demands or actions.

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Ginger

Price (N)

Note Season; starts in December of each year; all prices in Kilogram Index weight; Maize-58%, Paddy rice-36%, Soybean-6% Data reported as at Monday of each week MT: metric tonnes; Pts: points; All executed prices inclusive of indicative logistics cost.

1Price reported as at last traded date; September 6, 2019 2 Price reported as at last traded date; July 12, 2019.

3 Price reported as at last traded date; April 15, 2019.

4 Price reported as at last traded date; January 28, 2019.

5Price reported as at last traded date; March 1, 2019.

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news AfCFTA opens opportunity for export-oriented firms Blessing Bala

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xport-focused companies and small businesses in Nigeria are expected to gain from the imminent African Continental Free Trade Area (AfCFTA).

Companies that are likely to take a large chunk of the AfCFTA include: Flour Mills of Nigeria, De-United Foods, British American Tobacco, Indorama Eleme Fertilizer and Chemicals, and Dangote Group.

The Nigerian National Pe t ro l e u m C o r p o rat i o n (NNPC)/Petroleum Investment Management Company (PPMC) will equally benefit as it has the opportunity to expand export of naphthalene, a chemical product obtained from petroleum distillation. This was Nigeria’s biggest export product in the second half of 2017, said the Nigerian Export Promotion Council (NEPC).

Export-led SMEs, which form at least 80 percent of the lot, can tap into regional export destinations and use them as stepping stones for expanding into overseas

markets, experts say.

“Mostly multinationals and large enterprises are in a better position to gain from AfCFTA because their economies of scale will improve. They have the big market and the capacity,” Muda Yusuf, directorgeneral, Lagos Chamber of Commerce and Industry (LCCI), said in a telephone interview.

“The continental trade is more about economies of scale and the amount of what you produce. The higher you produce, the lower the unit cost, which is why small companies will benefit but not as much as large firms,” Yusuf said.

British American Tobacco Nigeria Limited has dominated the tobacco space in Africa, earning $145.48 million in 2017 from exporting tobacco products to Liberia, Guinea, Ghana, Cameroon, Cote D’ivoire and Niger, according to the CBN Annual Report.

The AfCFTA seeks to liberalise trade among African countries. It is targeted at a ‘borderless’ Africa, with an eye on a single market for goods and services on the continent. www.businessday.ng

Edo fine-tunes strategies for sustainable FG initiates move for Nigeria to access oil palm sector, revamp of forest belt oil spill funds for polluted communities

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do State government says it is strengthening partnerships to engender a sustainable oil palm sector and safeguard its forest belt so as to create wealth and conserve its delicate ecosystem.

The senior special assistant to the Governor on Investment Promotion and Head of Edo State Investment Promotion Office (ESIPO), Kelvin Uwaibi, who said this during a stakeholders’ meeting on the African Palm Oil Initiative (APOI) platform held in Government House, Benin City, explained that the government’s commitment to a robust oil palm sector was evident on the APOI platform.

The stakeholders’ meeting was attended by officials of the Ministry of Agriculture, Plantation Owners Forum of Nigeria (POFON), Oil Palm Growers Association of Nigeria (OPGAN), Okomu Oil, PRESCO Nigeria, and non-governmental organisations (NGOs).

Uwaibi said the Central Bank of Nigeria (CBN) was ready to support the state in expanding oil palm production, noting, “At the national level, Edo State is a key driver of oil palm production. The CBN has given us a commitment that they are happy to support oil

palm production in the state.

This is a presidential directive.”

He said Governor Obaseki has contributed immensely to ensuring a sustainable oil palm sector in the state, “Governor Godwin Obaseki recently sponsored six persons from Government and NonGovernment Organisations (NGOs) to the RSPO-Round Table on Sustainable Palm Oil Technical Meeting in Ghana.

In fact, he was the only Governor who was physically present at that meeting.

According to Uwaibi, “This goes to show how ready he is in taking this initiative to the next level. As we try to expand oil palm production in the state, the governor came up with a decision to allocate 118,000 hectares for oil palm production.

“The hectares of land will also accommodate the smallholder farmers.”

Kadiri Bashiru, former permanent secretary, Ministry of Agriculture and Natural Resources, shared government’s plans to map out the forest reserves in the state, stressing, “The governor has a soft spot for conservation because he has a family background that invested in conservation. He is determined to do whatever it takes to rescue our forests.

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AMAKA ANAGOR-EWUZIE

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orried by the inability of Nigeria to have access to global funds for cleaning polluted communities in the country, the Federal Government has initiated move aimed at ensuring that victims of oil spill and polluted communities in Nigeria will begin to access the International Oil Pollution Compensation (IOPC) fund of the International Maritime Organisation (IMO).

Speaking in Lagos on Tuesday at a three-day workshop jointly organised by the Nigerian Oil Spill Detention and Response Agency (NOSDRA) and the Nigerian Maritime Administration and Safety Agency (NIMASA) in partnership with the Global Initiative for West, Central and Southern Africa (GIWACAF), Mohammad Mahmood Abubakar, minister of environment, said the objective of the workshop was to draw Nigeria’s attention to the scope and implementation of the IOPC fund, focusing on the procedure related to liability and compensation in an event of an oil spill.

Abubakar, who was represented by the director-general @Businessdayng

of NOSDRA, Idris Musa, said consideration should also be given to the damaging effects oil spill had on the ecosystem.

“The devastating impacts of oil spills on the environment, health and livelihoods of our rural and urban communities have led to land degradation, loss of lives, destruction of habitats, loss of bio-diversity, incidence of diseases, poor sanitation, loss of livelihoods as well as the depletion of national revenue base,” he said.

According to him, the need to work out modalities on how to adequately and fairly compensate both victims of oil spill pollution and the environment is the reason we are here today.

“Our peculiar circumstances in Nigeria demand for a Convention that will give attention to liability and compensation regime for oil spills which occur from Floating Production Storage and Offtake (FPSO), which is also a loading point for crude oil tankers,” he said.

Abubakar however said consideration should not only be given to socio-economic losses suffered by individual or communities, but also to ecological damage by way of effective restoration of the damaged ecosystem.

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Understanding the need for capital adequacy in microfinance banks SMALL BUSINESS HANDBOOK

EMEKA OSUJI

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he microfinance industry in Nigeria is evolving significantly and rapidly too. As of the moment, over 1,000 entities have been licensed and are operating at different levels of efficiency in the industry. Although there have been some fatalities along the way, it is appropriate to say that the industry is growing. Operators are making their mistakes and learning from them.

Organisationally, the industry is doing well under a well-established operators’ umbrella organisation – the Association of Microfinance Banks (MFBs) – with presence in all the geopolitical zones. There is also evident interaction between operators and the regulators – Central Bank of Nigeria (CBN) and the Nigeria Deposit Insurance Corporation (NDIC).

Essentially, one could say that the microfinance industry in Nigeria is in expansion mode, which is one of the recognised early stages in the development of the industry.

However, it has struggled and is still struggling with some challenges relating to capacity – financial and technical – as well as leadership and governance. These problems are not unique to the industry but tend to get amplified because of the object of their trade – money and credit issues.

It is however important for operators to appreciate the full circum-

stances surrounding their industry. If they do not do so, it will be difficult to get their cooperation. Worse still, their investments will be placed at greater risk. First, they have to understand the risk posed by poor leadership and governance, both to the industry and its players. Much of the recent failure experienced in the deposit money banking sector have been traced to poor corporate governance.

Needless to say, that those who devote their hard-earned resources to float an enterprise may as well say goodbye to such resources if they are unwilling to allow management best practices to reign supreme.

Operators in the microfinance sector have been told this in so many words and in fairness, they are doing their best to comply or adapt, in a harsh economic environment. The regulators have not only spoken of the importance of effective board and management, but they have also gone ahead to mount training sessions for directors of MFBs. That is a right foot put forward by the regulators that require complementary actions by operators. It is now up to the operators to give ascendancy to the idea of good corporate governance and effective leadership.

Secondly, the issue of weak capital bases has been with the industry for too long. It is also important for operators, who are in the business for the long haul, to appreciate the need for proper capitalisation. Even among the deposit money banks, it is a truism that shallow pockets shut operators out of good business opportunities.

A strong capital base speaks to a number of issues. It shores up the business when some lending decisions turn out to be wrong or developments in the market damage good

credit outings. Without the financial strength provided by strong capital and shareholders’ funds, a lender is exposed to the harsh weather of business, especially in the lending areas.

This is more so in a country hurrying to bring more people into the financing loop. Financial inclusion presupposes that those being brought into the financial system will have their needs met by financial institutions. Only strong financial institutions can be there for such people.

The government of Nigeria has realised that it is going to be difficult to reach the citizens with any welfare programme, if they are financially excluded.

There is now no controversy about the advantages of economic democracy epitomised by financial inclusion. The government has set a date for itself; some serious deadlines have been outlined to achieve certain welfare-oriented landmarks in the economy, including raising the number of those included in the financial system by next year to about 80 percent. It hopes to achieve this high target of financial inclusion of its population by 2020 through operators in the financial sector. These include deposit money banks, microfinance banks, agent banks, and other nonbank financial institutions.

Every link in the chain must be strong for us to have a successful implementation of the programme. The financial inclusion strategy currently under execution was first adopted in 2012. Its main aim is to reduce the proportion of adult Nigerians that are financially excluded from 46.3 percent in 2010 to 20 percent in 2020.

This target will not be achieved if microfinance banks do not live up to the expectation of being strong and able to service the poor. The

‘

Needless to say, that those who devote their hard-earned resources to float an enterprise may as well say goodbye to such resources if they are unwilling to allow management best practices to reign supreme

CBN realises this strategic position of microfinance banks and has decided to help them through regulations to build capacity, to meet their objectives. One of the core objectives is the canalisation of financial resources to micro, small and medium enterprises (MSME).

Nigeria microfinance banks are currently engrossed in the business of recapitalisation, an overdue step that is necessary to restore the past glory of the sector. The CBN which has responsibility for licensing and regulating the subsector had on October 22, 2018, issued a circular pursuant to its Microfinance Policy, Regulatory and Supervisory Framework of April 2011.

The circular announced the reviewed minimum capital requirement of MFBs, operating in the country.

This regulation, reinforced in 2019, reviewed upwards the capital requirements of each category of MFBs. It also broke the unit banks into two ties, ostensibly to reflect the argument that those operating in the rural areas as unit banks (Tier II) do not need as much capital as those doing the same business in the urban centers.

There is however a body of opinion that even the N50 million required by the circular for tier II MFBs may be inadequate for their operations.

That leaves room for improvement anyway. The attached table gives the new capital requirements at a glance.

It is hoped that operators will do their best, even as things get tougher in the country, to meet the set capital requirements because at the end of the day they will be the better for it.

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

The health sector and the negligence of the health personnel

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t was on a cloudy Sunday morning I rushed to the hospital for medical attention and unfortunately, there was power outage leaving the entire hospital in darkness with a little array of light through the window blinds.

I sat in pains, fatigued and my aching body dripping with sweat for I was hot despite the cold weather. Alas! The nurse on duty called out to the security man who doubles as the man in charge of the power generating set. After ten minutes there was no sound that the generating set was put on. At this point, I couldn’t bear the heat and I decided to step out to get some fresh air. Maryann, the nurse, then flared upon seeing the discomforting state I was in, calling out to the security man and asking why it took him forever to put on the generator.

I was bewildered when the young man stepped out of his abode by the entrance gate majestically without any sense of guilt, then went to the generating set. Of course, he took yet another ten minutes before the hospital eventually had light.

In this scenario, I was pained and asked myself if this is the attitude that would be displayed during a critical emergency when a patient is between life and death. He was neither in a hurry nor was he remorseful. Rather he went to the powerhouse grumbling and making some funny statements which I pretended not to have heard.

After receiving attention and placed on three days of injection, I left a bit relieved. As I arrived on the third day, I presented my card to the receptionist who collected and, in a few minutes, returned it and said I would be attended

to shortly. After 20 minutes, I beckoned on her and she assured me that in another five minutes I would be called on. While I sat, I noticed the nurses parading around without attending to anyone but flaunting their assets like bees hovering around.

Finally, I lost my patience. I went straight to the lady and I exclaimed how much longer would I have to wait to be administered my last injection? Without remorse she responded sarcastically, “are you not seeing the doctor?” I sighed, nodded my head in pity. Then I wondered if she didn’t understand what was written in my file.

Eventually, she brought a file to show that she had presented it to the doctor only for me to see another patient’s name. In disdain, I brought out my hospital card and asked her if the name was the same on the file. She walked away without an apology for the mix-up. In the long run, I was given the injection and it was a wrap for me.

The crust of this article is not to reiterate the failed state of our health sector, which has been reported repeatedly but to review the depth of negligence, a cankerworm which has penetrated the attitudes of our health practitioners.

No doubt that the health sector ranks amongst those given the least attention resulting in an increase in medical tourism. While the sector is experiencing the least governmental attention, the practitioners themselves are a course of worry as human lives are valueless to them.

Two things I drew from my recent experience: the security man was ignorant of the importance of his role in the hospital’s value chain which contributes to quality service. For the recep-

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tionist, her lack of attention to detail is a subtle reminder that people’s health conditions have been jeopardised and made worse owing to wrong medication as a result of file mix up. This is what negligence can cause, a grave danger to the health of Nigerians.

Every hospital claims to provide quality health services to her patients. This assertion can only come alive if the personnel take on themselves the mission and vision statements in their practice. People (job seekers) end up making promises of upholding the values of the organisation but the story changes once they have the job. Instead of the promised diligence to work, negligence becomes the order of the day as they sing the usual chorus, “no be my papa work.”

Negligence by health workers has become an epidemic that kills even faster than any common ailment in our society. Hardly is there a Nigerian family that has not lost a loved one due to negligence. Of course, no one has been sanctioned professionally; hence, poor health workers place less value on the lives of their patients.

Half the time, negligence is blamed on doctors because it is their show. The act is practiced like a norm by most workers in the hospitals – the gateman, cleaners, nurses, pharmacists, laboratory attendants, and others. They need to be told that the reason why the word “staff” has no plural is because all employees of an organisation, irrespective of their positions, are working for a common goal to fulfil the vision and mission statements.

It is time to put things in perspective by having the concerned government authorities

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KENNETH ADEJUMOH and stakeholders wade into the matter, to cure our hospital personnel of nonchalance in the discharge of their duties both in public and private hospitals.

Any employee who puts is negligent should be shown the door if that would help to reduce the careless deaths of our people. I have come to know that people are hired for their skills but fired for their attitude.

With Muhammadu Buhari’s charge during the inauguration of the National Economic Council (NEC), listing the health sector as one of the areas of priorities, it suffices to say that this next level agenda will act in revamping the health sector.

A state of emergency in the sector will not be a bad idea if indeed we value the lives of Nigerians who cannot seek medical attention outside the country.

Adejumoh is a Public Relations Practitioner. He enjoys contributing to national issues through his articles. He is the Corporate Communications Manager at Nosak Group

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Wednesday 11 September 2019

BUSINESS DAY

COMMENT No, don’t dance for me

CHARACTER MATTERS WITH DAPS

DAPO AKANDE

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elieve me; I’m fully aware of the need for business people to do just about anything within the ambit of the law to attract attention to their products and services.

There is however something that gets to me whenever I’m unlucky enough to come across it and it’s the raucous roadshows You know the ones. Awareness campaigns usually for fast-moving consumer goods. The most nauseating part is not the loud music per se, though that at best is a mild irritant, but the sight of the ladies and young men dancing frantically to attract the attention of passers-by. It reminds me of the way oyinbo used to mock the black, playing us some rhythmic music to keep us happy and suppress the urge to agitate for better treatment, while we foolishly dance to our heart’s content and forget our troubles.

As I watch these young people dance so energetically to earn their keep, it always strikes me as no less demeaning. In equal measure I also find it insulting as a member of the public, whose attention they are so desperately try to attract.

Are you telling us that we’re really that simple-minded? So, the best possible way to draw our attention to your product is to position a van on

the street with music blaring from it and have a bunch of young men and women dance so frantically you could swear their lives depended on it? Is the Nigerian public that unsophisticated?

So, we’ve been reduced to easy pickings by youths gyrating and genuflecting as if demon-possessed?

Wearing misfitting clothes reminiscent of rags worn by those who’ve lost their minds as sometimes depicted in Nollywood movies, it becomes quite obvious these youths have been told that the more ludicrous they look, the more they are likely to grab the attention of passers-by. What a pity.

Nigerians should be accorded dignity always. Not taken advantage of by their compatriots or even foreigners for that matter, just because they’re a little hard up. When oyinbo does it we label them racists or social Darwinists who believe in their heart of hearts that some people are inferior to others. This erroneous notion lies at the root of most ethnocentric biases. There’s always a risk when you judge others by your own customs and standard that you’ll come to that conclusion and that usually spells the beginning of racism.

The Europeans, buoyed by their claim to civilisation, came to this conclusion when they encountered the “uncultured” and uneducated Africans. If that was their excuse to treat the Africans with such disdain back then, what is our excuse for doing the same to each other now?

Commercial organisations in Nigeria have for as long as I remember employed the use of trailers to

transport their workers to and from work. In developed countries it has for long become an offense not to use one’s seat belt when sitting in the rear seat of a vehicle, not to talk of the front seat. Here in Nigeria many organisations still get away with herding human beings back and forth in trailers like cattle! Something the foreign ones amongst them can’t do in their home country. I’ve said it before, whether our governments stand up for our rights or not, as they have been voted into power to do, Nigerian lives still matter.

Social media was recently awash with the news of xenophobic attacks in South Africa, especially against Nigerians. How proud we would have felt as Nigerians if all media, local and foreign, regaled us of how our government swiftly moved like a knight in shining armour, not only to protect our people’s lives but to safeguard our honour. Alas, it wasn’t to be. Typical of what we have all come to expect of this government, for several days it was a deafening silence.

Distress calls from our compatriots over there in SA appeared not to have been heard and many, within a twinkling of an eye, lost all they had.

By the time the lion woke up from its slumber with a muted roar, many of its cubs had already suffered fatal injuries. For many, the government’s feeble retaliatory action of withdrawing from the World Economic Forum being hosted by the South Africans represented a classic case of too little coming too late.

As if to buttress how little the value placed on Nigerian lives really is, it

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As I watch these young people dance so energetically to earn their keep, it always strikes me as no less demeaning. In equal measure I also find it insulting as a member of the public, whose attention they are so desperately try to attract

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2013 until the date of the final award and thereafter payment.

The seat of arbitration One particular point was fatal to Nigeria’s strategy in the arbitration i.e. the seat of the arbitration. The seat of arbitration is a notional concept and not a physical one. It refers to the juridical context of an arbitral proceeding. The choice of the seat determines, for example, which court can grant an order in aid of arbitration or which court can exercise supervisory, curial jurisdiction over an arbitral proceeding.

In the P&ID arbitration, because Nigeria’s lawyers sought and obtained these orders in Nigeria and succeeded here with an order restraining the parties in the suit from seeking and or continuing with any step, directly or indirectly in the arbitral proceedings pending the hearing and determination of this suit.

The tribunal, relying on the UNCITRAL model law which forms the basis of the Nigerian Arbitration Act and also on the Nigerian Supreme Court case of Nigerian National Petroleum Corporation (NNPC) versus Lutin Investments held that the choice of London as the place of arbitration (and not merely the venue for particular steps in the proceedings) and the fact that the Nigerian government had acted in the proceedings on the assumption that London was the seat of the arbitration made London, England the seat.

The proceedings in Nigeria were a waste of time and resources.

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I also fear that the current approach by the government in addressing the fall out of the case (which is now a judgment of the High Court of England) may suffer the same fate if not properly directed. Officials have made statements like, “the underhanded manner in which the contract was negotiated and signed.” … “Indications are that the whole process was carried out by some vested interests in the past administration, which apparently colluded with their local and international conspirators to inflict grave economic injury on Nigeria and its people.”

These may well be true. Available record on P&ID and its now late Chairman, Michael “Mick” Quinn paint a picture of a tapestry legal form utilised basically as a conduit to siphon public funds from Nigeria through contracts and dodgy arbitration references.

Based on the vague provisions of the GSPA in relation to the seat of arbitration that Nigeria had a good chance to determine the seat before submitting to Tribunal’s arbitral jurisdiction, it could have at least attempted to agree on a seat before submission. It is not clear that it did this.

More importantly, Nigeria should have clearly chosen Nigeria as the seat of its arbitration, in the GSPA. If, for example, the negotiating team had exercised a bit more diligence, it would have known that the promoters of P&ID had previously entered into a $5 million deal with Nigerian Airforce and under similar circumstances

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wasn’t long before news circulated about how as a last-ditch effort to escape lynching, Nigerians flocked to the surest refuge they could think of, the Nigerian embassy, but were allegedly turned back. Still, we wonder why foreigners treat us the way they do. We do worse to ourselves. No matter how tough things are in the country every Nigerian deserves to be treated with dignity.

I read somewhere that one Martin Niemoller was so disgusted by the silence and failure to act by people of goodwill against the tyrannical rule of the Nazis in Germany that he once said, “First, they came for the socialists, and I did not speak out because I was not a socialist. Then they came for the trade unionists, and I did not speak out because I was not a trade unionist. Then they came for the Jews, and I did not speak out because I was not a Jew. Then they came for me and there was no one left to speak for me.”

Many of us may be too privileged to jump at the chance of a free ride, albeit in a trailer. Neither may we be so hard up as to relish the thought of dancing for a few coins; even if it means laying aside our dignity for an hour or two. But take my word for it, if we continue to keep silent in the presence of such abasement of others, one day we’ll wake up to face a Pharaoh who knows not Joseph.

Changing the nation...one mind at a time.

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

P&ID’s $9.1bn award and Nigeria’s fight against a ‘seat’ he Nigerian Government has taken an uncertain path toward addressing its dispute with Process and Industrial Developments Limited (P&ID), a shadowy British engineering company with whom Nigeria entered into a Gas Sale and Purchase Agreement (GSPA) in 2007.

Under the terms of the GSPA between the parties, the Nigerian Government was to supply natural gas (wet gas), at no cost to P&ID, via a government pipeline, to the site of P&ID’s production facility. P&ID was to construct and operate the facilities necessary to process the wet gas by removing the natural gas liquids (NGLs) contained within it, and to return to the Nigerian government lean gas suitable for use in power generation or other purposes, at no cost to Nigeria.

For its efforts, P&ID was to be entitled to the NGLs stripped from the wet gas. The GSPA was to run for 20 years from the date of the first regular supply of wet gas by the Federal Republic of Nigeria (FRN). The agreement was to be governed by Nigerian law. The stated “venue” of any arbitration was to be London, England.

The arbitration panel concluded that the FRN repudiated its obligations under the GSPA. The company had therefore suffered a loss in income over 20 years from the sale of the NGLs. This amounted to approximately $6.59 billion being the present value of income which would have been earned in Nigeria plus interest at 7 percent per annum from the 20th of March

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OLADIRAN AJAYI as the current case commenced arbitral proceedings against Nigeria and won.

The difference, in that case, was that the seat of arbitration was in Nigeria and the promoters had trouble collecting their award.

A senior executive sent a message to his colleagues stating, “The moral of the story is that ideally, the seat of arbitration should be outside of Nigeria and preferably London.” In the GSPA, he got his wish. A second question is why, if Nigeria has evidence that the contract was concluded in an “underhanded manner”, it did not seek to set aside the award?

Under the UNCITRAL rules, one basis to set aside an award is public policy.

While hard to establish, decision-based on article 34.2.b.ii UNCITRAL fraud may have sufficed.

The cases have held that the act complained of, must be so clear as to be “contrary to the fundamental conceptions of morality and justice” of the forum “shock the conscience” … or is “clearly injurious to the public good. In this respect, the Nigerian security agencies and the Ministry of Justice had a crucial role to play to show proof of the nature of the contract either in the arbitral process or in its immediate aftermath.

Oladiran Ajayi is a Lagos based lawyer with experience in international arbitration

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Wednesday 11 September 2019

BUSINESS DAY

EDITORIAL PUBLISHER/CEO

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

Bashir Ibrahim Hassan

Walking the tight diplomatic rope with South Africa

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s Nigeria begins the evacuation of citizens from South Africa, it sends a positive message of capability and assurance.

About 650 citizens are ready and willing to leave the cities of South Africa following the xenophobic attacks on Nigerians and nationals of other African countries by the South Africans. President Muhammadu Buhari ordered the airlifting by the federal government following on the heels of an offer by Air Peace, an airline.

The evacuation is a commendable step in efforts to douse the tension the unwarranted attacks by South Africans caused in Nigeria and across Africa. We commend the federal government for this demonstration of commitment to the welfare of our citizens. It is a significant step that would reassure all Nigerians, at home and in South Africa, of the determination of their government to work in their interest.

The airlift is a pragmatic

step that the present difficulties demand. It is more in tune with diplomatic best practice and the interests of Nigeria as the government and people walk a tight diplomatic rope in relations with our neighbour south of the equator.

The chairman of the ruling All Progressives Congress Adams Oshiomhole, living up to his previous vocation in unionism, called last week for nationalisation of the assets and investments of South African firms in Nigeria. We think not, and urge that government should pay no heed to such calls at this stage of developments on the matter.

An existing agreement between Nigeria and South Africa on the promotion of trade and protection of mutual investments prohibits the path Oshiomhole suggested. Olusegun Obasanjo for Nigeria and Jacob Zuma for South Africa signed the “Agreement between the Government of the Republic of South Africa and the Government of the Federal Republic of Nigeria for the reciprocal promotion and protection of

investments” in April 2000.

The agreement was for an initial ten-year period, renewable for another ten years unless terminated in writing by either party giving a twelve-month notice.

The Nigeria-South Africa Trade Promotion and Investment Protection agreement is one of the tools that should guide our dealings going forward. It cautioned against the kind of violence that happened in both countries against persons and investments and also provided for restitution by the host country, just as the federal government has requested. It explicitly warned against expropriation or nationalisation of assets.

Nigeria must continue to tread the tried and tested path of diplomacy in handling this prickly matter. Our diplomatic initiatives must go beyond the economic to include people’s diplomacy that emphasises communication, mutual knowledge, influence and promotion of our cultures and people.

Relations between Nigeria and black South Africa go back

to Nigeria’s early independence years. We formalised it from 1994 when black-majority rule began. The relationship has grown in several areas over the years –figures from 2016 show a balance of trade in favour of South Africa. It exported goods worth $438m to Nigeria while Nigeria imported over $2bn worth of goods.

Citizens of both countries live in each other’s lands. On the surface and with the evidence of the streets, Nigeria has more citizens living in South Africa than they do in Nigeria. Even so, it does not excuse the intolerance.

The federal government should continue to manage the matter carefully, on both bilateral and multilateral fronts.

Our national interest must be foremost. Our communication must be credible, transparent, comprehensive and decisive.

We must build confidence in our people with actions such as the evacuation of those in need. Our relationship with South Africa is worth protecting, but we should do it without sacrificing our interests, pride or our people.

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

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100 days in office: Yet no economic development plans from our governors!

FRANKLIN NGWU

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hile w e lament ab ou t t h e s l ow pace of PMB’s government, it is sad to note that most state governments are not any better. Of the 29 governors elected on March 9 and sworn in on May 29, it is difficult to identify states governed through a carefully and strategically crafted economic development plans. Most govern their states in an ad-hoc and reactionary approach though they have spent over a hundred days in office. This does not mean that positive signs from Oyo, Delta, Kebbi, Ebonyi, Rivers and Yobe states are not appreciated, but much is needed and expected given their deplorable situations despite immense resources.

Just as PMB delayed in forming a cabinet, most of the governors such as Abia, Cross River, Enugu, Ogun, Kano, Taraba, Jigawa, Gombe, Nasarawa and Osun are yet to form and inaugurate a cabinet six months after being elected or reelected. Osun is the most notorious with Governor Oyetola seemingly incapable of forming a cabinet and effectively developing the state.

Moreover, this should not be the time for the articulation of policies and the inauguration of cabinets.

It is the time for implementation of articulated policies that should have been formulated before elections and polished within the first thirty days in office with cabinets inaugurated within a week of being sworn-in.

Since states are supposed to be

the primary platforms for Nigeria’s inclusive and sustainable development complementing the macro development initiatives of the federal government, it is said that most of the governors are exhibiting signs of ineptitude and unpreparedness.

Since sustainable development is presently pursued through public-private partnership (PPP), and based on the concept of forwarding guidance to enhance the economic development of our states, our governors should quickly provide us with a clear agenda of their governments.

It will help the private sector, individuals and other public agencies to have a clear idea of the policy direction of the state, plan and contribute effectively. The agenda should have clear and connected objectives as to the kind of states we want in the short-term (first four years), medium-term (five to eight years) and long-term (nine years onwards). And it should cover all aspects of human life and endeavour including where a borehole should be located and economic trees planted in one to fifty years.

That is how to plan for inclusive development and governance that will be sustainable and pro-poor. In the absence or delay in providing a clear agenda for their governments, the current uncertainty and insecurity will prevail and combined with other challenges, escalate our social and development problems. As I genuinely want Nigeria to succeed, let me provide a kind of an abstract of the kind of agenda we expect from our states in the short term, using Enugu state as the focus.

Enugu (the coal city) played host to the advent of modern business in former Eastern Nigeria. Coal was at the heart of the country’s foreign revenue from the 1940s.

Employment in the coal mining industry was about the most prestigious employment outside the civil service. With such history, a landmass of about 7,161 square km,

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It is the time for implementation of articulated policies that should have been formulated before elections and polished within the first thirty days in office with cabinets inaugurated within a week of being sworn-in

a population of about six million people, undulating hills and plains, lush green fields and adventurous topography, Enugu readily became the capital of Eastern region and the nest of Igbo renaissance.

Today, the socio-economic development of the Enugu state can only be achieved through the strategic assessment of her comparative advantages and a determined effort in creating a synergy of the opportunities and potentials. These should be assessed in terms of her competitive niche within the Nigerian and global context, geographical location and heritage, human and physical resources and the market gaps in the local, national and global economy.

This will demand an urgent reassessment of the role of the state government whose focus should be on improving the capacity of the state through a strategic combination of her internal coherence and external connectedness resulting in what can be described as embedded autonomy and associational economy.

The question is how will Enugu deploy her assets like coal, linkage location, and political heritage?

How will it tap the entrepreneurial spirit of Ugwuja in Enugu Ezike and the unquenchable desire for human capital and the moral-oriented society of Udeze in Ezeagu? Is there a plan to attract big-time farmers to develop a rice plantation in Adani?

Adani rice and Ezeagu cashew nuts are consumed by 100 million people in the world every day.

How do we get Cheng from China to build a power plant using coal; excite Mike Adenuga and Shell Plc to re-locate their regional and technical support office to Enugu; lure Zenith, UBA, GTB and Access Bank to always host their annual general meetings at Nike Lake Hotel. Ensure that the trailers of Waziri and Young Shall Grow buses make Enugu their hub to rest and refuel while crisscrossing of Nigeria.

How can Emeka Ekwujuru from Imo and Helen Bassey from Ogoja convince their parents to allow them to study at Enugu State University due to its excellent learning facilities? Can Mbanefo in Onitsha and Elechi in Abakaliki be enticing their husbands to relocate to Enugu while they still work in Awka and Abakiliki respectively as commute time is 30 minutes either way?

Expectedly, sustaining the preference of Enugu and her potential pre-eminence in the committee of states will require the provision of world-class hospitals and medical facilities!

With the above, Enugu state will be repositioned to meet the wishes and aspirations of many and will definitely earn a referral position in Nigeria’s development discourse.

It will be characterised by cyclic employment and wealth generation, the emergence of industrial clusters, infrastructural development, the security of life and property. Enugu will emerge as the food basket of the country, a model for the practice of rule of law and improvements in the general standard of living with inclusive pro-poor growth.

Just as it is possible in Enugu, so it can in the other 35 states. All that is required is the commitment to succeed and the ability of Ugwuanyi and other governors to assemble a competent and moral-oriented team. A team that is humane and pro-poor with an uncommon innovative inclination to generate ideas. And enhance the internally generated revenue (IGR) of Enugu from N20 billion annually to N40 billion in two years and N100 billion in four years.

Dr. Ngwu is a Senior Lecturer in Strategy, Finance and Risk Management, Lagos Business School and a Member, Expert Network, World Economic Forum. E-mailfngwu@lbs.edu.ng,

Nigeria’s 2019 capital expenditure is just about what Trump

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he Federal Government of Nigeria is to spend about $25 billion (N8.83 trillion) in the 2019 fiscal year. Of this amount, $5.4 billion is budgeted to service its debt. This is just about what Trump needs to fund his “vanity” wall. In addition, roughly $5 billion is for capital expenditure and maybe about $2 billion to finance the war against the Boko Haram terrorist group.

What relief will less than $20 billion deliver to about 180 million people?

That’s 3 cents per day for every citizen (or $11 a year).

The 36 sub-regional governments (i.e. the states) will also be spending. But their combined budget is not more than the federal government. Their spending may add about 2 cents to citizens per day.

Not enough? It’s better than nothing for a country seeking to turn around its fortunes from a poverty-stricken economy to a prosperous one.

Jeff Bezos, the world’s richest businessman, is capable of funding this budget more than four times. Nigerian has more than this! It can spend more than this!

However, corruption remains the country’s biggest problem. Corruption has moved (and is still moving) public resources to private tills, and consequently the conversion of public goods into private goods (with most of it based abroad).

For instance, the head of one of Nigeria’s anti-graft agencies, recently claimed N1.3 trillion was stolen in four years by 32 entities. Also, he added that one-third of this money – using World Bank rates and cost – could have been comfortably used to construct well over 500 kilometres of roads, build about 200 schools, educate about 4,000 children from primary to tertiary levels at N25 million per child.

As noted by Michael Peel, a British journalist, “Nigeria’s two main client

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states, the US and Britain, have profited vastly from the systematic plunder of the country’s assets by dictators, governors, and businessmen. A venal western financial system centered in London is allegedly linked to corrupt money which has spread like an oil slick right the way through the international financial system.” More on this in Chapter Six of Peel’s book titled, ‘A Swamp Full of Dollars: Pipelines and Paramilitaries at Nigeria’s Oil Frontier’.

Let’s assume the stealing continues unabated. Should we sit here until we die? Certainly not! There will always be a way out. I’ll make a couple of proposals.

First, mobilise private finance for development by financing Sustainable Development Goals (SDGs). Martin Chrisney, director of the International Development Assistance Services Institute at KPMG, shed some light on this in a Center for Global Development podcast.

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ZUHUMNAN DAPEL

Second, form Aid to BUILD (Better Utilization of Investments Leading to Development) Act. This is a win-win recently passed initiative by the US Congress. Through the recently created US International Development Finance Corporation (USIDFC), the Act promises to fight poverty in the developing world through businesses, by “crowding-in” the vitally needed private sector investment in low and lower-middle-income countries.

Provide means, more loans, grants, and other guarantees for projects that will make a difference for people living in extreme poverty.

Dapel is a past fellow of the Scottish Institute of Research and Economics

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Wednesday 11 September 2019

BUSINESS DAY

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Opportunity mounts for sorghum growers as manufacturers raise local sourcing …brewers substitute barley for sorghum …on US/China trade war JOSEPHINE OKOJIE

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igerian farmers can tap into the fast booming l o ca l a n d g l o b a l sorghum market to create wealth and earn foreign exchange as local manufacturers are increasing their usage of the crop and the heat up of the US/China trade war.

Brewers in the country are now using a larger percentage of the crop in place of barley for brewing beer and malt drinks owing to the central bank’s foreign exchange policy on food imports.

They are now making huge investments in sorghum malting plants in the country owing to their hunt for local substitute in place of barley malt and barley concentrates.

As a result, billions of dollars that would have been spent on importation of barley malt and concentrates will be retained for the growth and development of the Nigerian economy.

“A lot of farmers are now going into sorghum farming because the brewery industry is buying so much from us now than before,” Adamu Bature, secretary, Sorghum, Millet Farmers Association of Nigeria, told BusinessDay in a telephone response to questions.

“Brewers make use of 70 percent of sorghum as by-product for brewing beer and malt. Nigeria Breweries fayrouz is 100 percent sorghum. This shows the huge industrial potentials of the crop.

Also, it serves as raw material for biscuit and noodles production,” Bature said.

He noted that the crop is grown in all the northern states in the country.

Nigeria is the natural habitat for many varieties of sorghum and the world’s second-largest producer and supplier of the crop, churning out 11 million metric tons per annum while demand is put at 12.5 million MT, leaving a gap of 1.5 million MT, according to data obtained from the Federal Ministry Agriculture.

“Nigeria Breweries funded a sorghum research at the institute and we developed a sorghum variety with high malting properties which can be used in place of barley as by-product for brewing beer and malt. So most brewers are increasing their local sourcing for sorghum,” said Ibrahim Umar Abubakar, director, Institute for Agricultural Research, IAR Zaria.

According to the institute, two varieties of sorghum with malting properties have been released.

“The CSR03H and CSR04H are

MAN appoints Anegbe as chairman of food, beverage &tobacco sectoral group JOSEPHINE OKOJIE

used as livestock feeds while the grains are used for poultry feeds production. It has high protein content than maize,” said Aba. Like shea nuts, sorghum has the potential to be a huge export earner for the country, but years of low investment, lack of government support and natural vagaries have limited the huge potentials.

“I have three brewery firms I sell my sorghum to immediately after harvest. The demand is getting higher since the dollar volatility as most of them want to source locally

Crown Flour, AMBCON collaborate to sensitise bakers on food safety management …as Lagos set to commence school feeding programme

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he Manufacturer Association of Nigeria (MAN) has appointed Patrick Anegbe as its new chairman of the food, beverage and tobacco (FBT) sectorial group.

Anegbe now holds the app ointment alongside the position of president, Association of Food and Beverages Tobacco Employers as well as the chairman, Blenders and Distillers Association of Nigeria a sub-sectorial group of MAN. He is currently the managing director/ chief executive officer of Intercontinental Distillers Limited (IDL), a renowned distillery company in the Food and Beverage Industry.

Since he assumed the leadership of IDL as the MD/CEO, the company has witnessed a tremendous turnaround and has grown at the fastest pace both in turnover, profitability and brand portfolio than any o t h e r p e r i o d si n c e t h e

the two varieties we developed with high malting properties and have been released officially,” said Daniel Aba, a sorghum breeder at the Institute for Agricultural Research, Zaria.

Sorghum is a grass of east African origin, which is mainly grown in the northern part of the country.

It is the 4th important cereal after wheat, rice and maize and is used as a maize substitute for livestock feeds because of their similar nutritional values.

“The stalk from sorghum can be

and now substituting sorghum in place of barley,” Liman Mohammed, a sorghum farmer in Borno said “Cu r re nt l y a m e t r i c t o n of sorghum sells for N170, 000 as against N130, 000 sold four months ago. The price keeps rising owing to the increase in demand,” Mohammed said.

Currently, most of the brewery firms in the country are supplying free inputs such as improved seeds varieties to farmers and technical support in the production of sorghum in the country.

Also, since the imposition of a temporary tariff on US imports by the Chinese government, China’s importers of US grains such as sorghum and soybeans have begun looking at other markets for the importation of the crops.

Audu Ogbeh, former Minister of Agriculture and Rural Development, while highlighting the opportunities in Nigeria’s agricultural sector during the 2018 BusinessDay’s Agribusiness conference held in Lagos, said that the China’s government is making a demand for Nigeria’s soybeans and sorghum.

Ogbeh had stated that the Chinese government was requesting for 2,000 tons of soybeans and sorghum.

This means that the market for the crop is huge and growers can take advantage.

JOSEPHINE OKOJIE

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founding of the Company.

Anegbe attendedAuchi Po l y t e c h n i c , E d o s t a t e where he obtained Higher National Diploma (HND) in Electrical Engineering power/machines options. He also bagged an MBA from the Lagos State University, Ojo. He is an alumnus of the prestigious Lagos Business School - Pan African University: IESE Business School, Barcelona -Spain; Harvard Law School, USA; the University of Chicago Booth School of Business, USA; IMD Business School, Brazil and others.

He is also a member of NAFDAC Governing Council and a Knight of Saint Mulumba (KSM) www.businessday.ng

n a bid to ensure that pupils of primary schools across the country consume safe and wholesome bread under the Home Grown School Feeding Programme (HGSFP) of the Federal Government, Crown Flour Mills and the Association of Master Bakers and Caterer O rga n i s at i o n o f Ni g e r i a (AMBCON) have collaborated to sensitise bakers on food safety management.

The bakers were sensitised on quality management, procedures of transportation of the bread to the schools and sanitary and hygiene practice when baking the bread by various experts in the country’s food and safety organisations.

“We are partnering AMBCON to ensure that they meet the standard requirement of the school feeding programme and that the quality of bread produced is safe for consumption for the children,” said Anurag Shukla, managing director and CEO, Crown Flour Mills during the sensitisation program.

“We would continue to supply quality flour to bakers and work

L-R: Anurag Shukla, MD/CEO, Crown Flour Mills; Bunmi Oteju, director, SUBEB Lagos State; Omotunde Raji, chairman, Association of Master Bakers and Caterers Of Nigeria (AMBCON); Bolaji Anifowose, vice president, commercial, Crown Flour Mills, and Rohit Chugh, vice president, grains, Crown Flour Mills and children from various primary schools in Lagos state during the food safety management sensitisation program organised by Crown Flour Mills and AMBCON ahead of the school feeding initiative in Lagos.

with them to ensure they produce safe and wholesome bread for the pupils of Lagos state schools,” Shukla said.

He noted that Crown Flour Mills has a monitoring team who will be checking the activities of the bakers to ensure adherence to standards.

He stated that the bakers present at the sensitisation would go back and train other bakers on what was learnt during the one day-programme.

Sunday Onah, deputy director,

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National Agency for Food and Drug Administration and Control (NAFDAC) sensitised the bakers on processes and procedures for ensuring quality and standards.

Onah said that having quality flour from Crown Flour was not enough to ensure food safety. He advised the bakers to adopt good sanitary and hygiene practice in producing the bread for the school children.

He urged bakers to ensure that consistency and compliance should be their focus in making @Businessdayng

bread for the children.

On behalf of Lagos State, Bunmi Oteju, director of State Universal Basic Education Board (SUBEB), Lagos, appreciated Crown Flour and AMBCON for having the sensitisation program for bakers in the state.

She stated that the HGFSP would soon commence in the state and that bread was one of the meals that would be served to pupils, while appealing to bakers to supply bread with quality and high nutrition to the schools.

Oteju noted that the immune system in children was not as high as that of adults; therefore, she urged the participants ensure consistency in the production of safe and wholesome bread for the pupils.

Also speaking during the programme, Omotunde Raji, chairman, AMBCN Lagos, promised that bakers would adhere to standards in producing the bread that would be supplied to schools across the state.

“We will meet the expectation of the Lagos State government by supplying quality bread to schools. Bakers in the state will not let down the trust placed on them,” Raji, who is also the brand ambassador for Mama Gold, said.

Wednesday 11 September 2019

BUSINESS DAY

15

AGRIBUSINESS ag@businessdayonline.com

‘Youths will find agriculture attractive with technology’ ALIU OLUWAFEMI ROYAL is the chief executive officer of Techie Farmer, a start-up using technology to boost farm productivity. In this interview with Michael Ani, he speaks about youth unemployment and how the government can make agriculture attractive to youths.

W

hat gives you the utmost concern a b o u t

for themselves.

Nigerian youth?

What bothers me the most about the Nigerian youth is that many of them are wasting away. They also do not have platforms to express their innate capability. One of the problems our young people still battle is unemployment or underemployment. In Nigeria alone, more than 30percent of the population is unemployed and this is one of the biggest concerns that give me sleepless nights and its one of the reasons I am working actively towards reducing unemployment in Nigeria.

How can youth unemployment be curbed in Nigeria?

First, I believe that Nigeria can cut down tremendously on youth unemployment by promoting youth engagement in agriculture. This is not just the responsibility of the government but the private sector and donor organisations that can also participate in advocacy, training, capacity building and matching youths with the myriad of opportunities in the sector.

This is what we are currently doing at My Fa r m b a s e A f r i c a , we leverage social entrepreneurship model to increase youth engagement in agriculture exposing them to the opportunities in agriculture. Also, we organise an AgriTech Lab Summit to let youths see how to use

technology as a cheap model to engage in agriculture. We also went further by doing practical training on soilless farming for youths so they can start developing innovative agribusinesses and what we are currently doing is to provide mentorship for them on accessing funding, developing their businesses.

Our audacious goal is that in five years, we would have at least 500 innovative youth-led agribusinesses across Nigeria. We also want another 500 separate youths to take on new jobs locally and globally in the agri and agtech sectors. For instance, there are a lot of agric business companies looking out for agronomists and they find it difficult to

get qualitative agronomists that have sufficient skills, knowledge and capacities to run medium and largescale farms. If we are able to bridge this gap, it would be easy for us to multiply the talents in the system and these organisations would be able to get human resource that will fill those gaps. As an organisation, in the last two months, we have been actively sourcing talents for agricultural companies, especially with respects to handling their digital communications and content creation.

If all the above efforts

by MyFarmbase can be scaled, more youths will be economically empowered and be able to create wealth

How have your trainings and programmes been able to impact the Nigerian economy?

Specifically, I have sighted examples about companies reaching out to recruit talents that would help them drive their business processes. The good thing about this is that it reduces their operational cost of sourcing talents through paying a transaction fee that will use to push their applications out there, and then the evaluation process which is quite elongated.

Businesses connect directly with us because we have a robust ecosystem of young people who are talented in the agric space. That way, we are contributing immensely to the company that is already boosting the GDP of the country.

Another way we contribute to the economy is by the multiple trainings that we do. We focus on practical trainings, like the one we had in Abeokuta recently where we trained 20 people. As I speak to you, about five of them are already working on setting up their own soilless farming enterprises and that essentially means that they will be creating jobs and will also be creating wealth for themselves.

founder, Samson Ogbole whose facilities we used to train our youths for free. We got full support for our agritech Summit from our partners including Sterling Bank, Animal Care, Ministry of Agric, Ope Farms, TechPoint, Binkabi - all the way from London and media Organisations.

We have also received seed grants up to $1,000 from the pollination grants in the US and individuals have respectively supported us.

We look forward to having more support from different organisations around the world who believe that youth unemployment is a major issue. We want to improve youth engagement in agriculture.

agriculture at the Federal University of Agriculture in Abeokuta and upon leaving the university, I did not get what I wanted with respect to trying to build a modern kind of agriculture so I went about to learn from top individuals and organisations in the world. One of them is Binkabi where I learnt about the use of block chain technology in agriculture, and CropIT, where I am currently learning the use of software technology in agriculture.

Have you received any form of support?

Yes, we have received numerous supports. For instance when we did the training in Abeokuta, we received a mutual support f r o m P. S Nu t r a c , c o -

Why are you so passionate about agriculture?

A lot of people have asked me this question because of the way I have been vocal on my social media pages and other communication media. My passion for agriculture stemmed from an initial involvement in agriculture at a very tender age. I grew up in a very local community and a very poor family where we lack the basic resources, so we basically engaged in farming to feed ourselves. The way we practised agriculture at that time was all crude; it did not have any touch of modernity in it. So growing up, I started to read about agriculture and the way it was practised all around the world. I made a decision to do it differently from what we had while I was growing up; this gave me the courage to pursue

What do you think is the future of agriculture in Nigeria?

I t h i n k t h e f u t u re o f agriculture in Nigeria is one that will be hinged on technology and innovation, it’s not going to be business as usual, and definitely not the traditional hoe and cutlass crude farming that we currently operate. It’s going to be about how we can digitalise the entire agro business value chain, from farm to table, it will be about how we can provide financial inclusion services to farmers in a way that we do not have to deal in cash.

They can use mobile money to engage with financial institutions. It’s going to be about how we can tokenise our physical commodities and trade them on a block chain-based exchange, how we can use sensor-based model to track and monitor activities on the farm. So basically, it will be about how we can use technology to digitalise the entire agribusiness landscape and that future is already here!

tonnes per hectare.

In his remarks at the meeting, Sunday Aladele, the Registrar of the committee who is also the director/chief executive officer of NACGRAB, called on plant breeders and crop scientists from within and outside Nigeria to submit their nominations to NACGRAB on time.

Aladele said early submission of varieties for nominations would enable the NVRC to recommend a n d a p p rov e g re a t e r

number of varieties at its next meeting.

T h e re g i s t r a r a l s o insisted that potential crop varieties developers must ensure their nominations complied with the Distinct Uniformity Stability (DUS) requirements from NACGRAB. “The crop varieties must meet the DUS requirements of being distinct, uniform and stable to be accepted not only in Nigeria but in the whole West Africa region,”

he said.

The registrar, whose centre is the secretariat of NVRC, urged developing organizations to follow the guidelines for release and registration religiously if they wanted their varieties to be recommended and approved for release.

The 27th NVRC meeting was attended by representatives of research institutions, universities and private seed companies in Nigeria and abroad.

NVRC releases improved wheat variety REMI FEYISIPO, Ibadan.

N

i g e r i a’s w h e a t production has received a boost as the National Varieties Release Committee has introduced a new improved variety to farmers.

The wheat variety named LACRI WHIT - 11, was recommended for release based on its heat tolerance, high yielding and good baking qualities.

The approval and

releas e of the wheat variety was announced at the 27th meeting of the National Varieties Release Committee (NVRC) held at the National Centre for Genetic Resources and Biotechnology (NACGRAB), Ibadan, Oyo State recently.

O l a d o su Aw oye m i , chairman, NVRC stated that though a total of seven crop varieties were submitted for registration and release, only the wheat variety was approved for www.businessday.ng

release by NVRC. Awoyemi, a professor said LACRI WHIT - 11 was developed by the International Centre for Agricultural Research in the Dry Areas (ICARDA) in conjunction with Lake Chad Research Institute (LCRI), Maiduguri.

According to him the variety has 90 to 95 days maturity period, well adapted to irrigated conditions of the Sudan - Savannah zones, and potential yield of 7.1

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@Businessdayng

16

Wednesday 11 September 2019

BUSINESS DAY

tax issues Enforcement of anti-tax avoidance powers of tax authorities – how far is too far?

“Tis impossible to be sure of anything but death and taxes” – Christopher Bullock (1716) Ademola Idowu, Samuel Yisa, and Chinyere Nwachukwu

T 1.

Introduction here is hardly any government that can thrive without tax revenue, as tax provides the “cheapest” source of funding for public projects. Thus, governments, through their legislature, often enact tax laws to provide frameworks for effectively assessing taxpayers to tax.

These include establishment of tax authorities for the administration and enforcement of tax laws, designation of certain taxpayers as collection agents of the government, establishment of tax dispute resolution mechanisms, etc. Tax authorities, however, have varying degrees of powers in different jurisdictions.

In Nigeria, tax legislation empowers tax authorities to assess taxpayers on best of judgment basis given certain circumstances; appoint taxpayers as agents for collection of taxes; distrain properties of taxpayers, and so on.

The overriding objective of these provisions is to discourage tax evasion, while respecting taxpayers’ rights to object against arbitrary imposition of tax liabilities. As we are in an era of increasing clamor for tax reforms and ambitious tax revenue targets, it is little wonder that tax authorities often seek to pull every weight of the law, albeit inappropriately in some cases, to enforce tax compliance and bolster government revenue.

This article examines the manner of enforcement of statutory powers

by Nigerian tax authorities in certain instances, impacts of such practices on businesses, and best practices that tax authorities can adopt in promoting sound tax systems and an enabling business environment.

2. Some contentious areas of exercise of powers by the tax authorities 2.1 Power to assess taxpayers on a fair and reasonable percentage of revenue Companies are generally required to pay tax on the profits “accrued in, derived from, brought into or received in Nigeria” in respect of any trade or business carried on in Nigeria, after making necessary adjustments, as provided in the Companies Income Tax Act (CITA). The CITA also requires companies to self-determine their tax liabilities and file their income tax returns, annually, with the Federal Inland Revenue Service (FIRS).

To mitigate tax avoidance, the CITA further empowers the FIRS to assess and charge companies to tax on fair and reasonable percentages of their turnover under the following circumstances : - where the assessable profits cannot be ascertained; or - where the trade or business produces no assessable profits; or

- where the assessable profits are less than the profits expected from such business.

The above anti-tax avoidance provision should ordinarily be applied in situation where a taxpayer fails to file its tax returns or where a taxpayer is determined to have deliberately filed misleading tax returns. In these cases, the tax authority should issue an assessment on its best-of-judgment basis, bearing in mind that the assessment should be on a “fair and reasonable” percentage of turnover while considering the specific economic circumstances of the taxpayer. Tax authorities are, therefore, expected to exercise this power judiciously.

However, tax authorities often issue arbitrary assessments to taxpayers even when the taxpayers have provided accurate documentation to support their claims. This is not unconnected with the tax authority’s aggressive drive to ramp up government’s revenue.

State tax authorities, for instance, have continued to issue Pay-As-YouEarn tax assessments to employers based on deemed income, particularly employers who have foreigners in their employment, even when the employers have provided relevant documents to justify the employees’ actual emoluments . Also, in 2016, the FIRS issued several letters to corporate taxpayers purportedly to assess them to income tax on its best of judgment, based on the deemed value of properties owned by the companies. As expected, this resulted in tax disputes that required judicial intervention. A noteworthy example is the Federal High Court (FHC) judgment in the case of Theodak Nigeria Limited and FIRS where the FHC held that the FIRS’ act of unilaterally assessing the company to tax based on the value of its property was oppressive and ultra vires.

Non-resident Companies (NRCs) operating in different sectors of the economy have equally not been spared the fury of arbitrary tax assessments.

For instance, the FIRS has persistently adopted a deemed profit margin of 20%, which translates effectively to a 6% tax rate, for assessing NRCs to income tax. This is regardless that the rate is alien to the tax legislation as it was only brought into effect through the 1996 Budget Pronouncement, which was merely a policy statement www.businessday.ng

of the Federal Government of Nigeria.

Hence, assessing NRCs to tax at 6% of turnover without due consideration for their economic situations and ability to pay is neither fair nor reasonable.

2.2 Power of substitution The tax laws empower the federal and states tax authorities to appoint any person to be the agent of any taxpayer for the purpose of remitting taxes due, on behalf of the taxpayer, if the person so appointed is in custody of monies belonging to the taxpayer.

This is referred to as the “power of substitution”.

The law empowers tax authorities to recover the tax due from the agent so appointed, where the agent fails to remit the tax due from monies in his custody. Directives issued by the tax authorities in this instance are, however, subject to objection and appeal process under the law.

The FIRS recently exercised its power of substitution by appointing banks as tax collecting agents for some customers maintaining bank accounts with such banks. The FIRS alleged that the affected customers failed to remit taxes due and therefore mandated the banks to place a lien on relevant accounts and remit alleged tax liabilities on behalf of the account holders. The FIRS further directed the banks not to honour any mandate issued by the customers on their accounts until the alleged liabilities were defrayed.

The manner in which the FIRS exercised its power of substitution certainly generated many concerns.

For instance, the FIRS’ directive to ‘freeze’ taxpayers’ accounts without recourse to the taxpayers, and without establishing that the alleged liabilities are indeed final and conclusive, constitutes a breach of the taxpayers’ right to fair-hearing as guaranteed by the tax legislation and the Constitution of the Federal Republic of Nigeria. Similarly, the FIRS allowed the banks only 7 days to comply with its directives failing which the banks would be penalized. This is contrary to the provisions of the tax legislation that typically allow taxpayers 30 days to review and respond to tax assessments. Also, the FIRS’ directive could expose the banks to risks where it is later established

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that the taxpayer has no liability, or less liability than demanded. Such mandate could also cause the banks to be in breach of their fiduciary obligations to their customers. It is, therefore, no surprise that the FIRS had to suspend its wide-spread “freeze order” following several commentaries by stakeholders, even though some taxpayers have continued to experience restrictions on their accounts.

The FIRS would have done well to painstakingly review and establish that a tax liability is final and conclusive as provided in law, and that the taxpayer has failed to pay the amount due within the statutory timeline before invoking its power of substitution.

Anything outside of this would deviate from the intention of the law.

2.3 Power to distrain properties of taxpayers The law empowers tax authorities to distrain the properties of delinquent taxpayers as a last resort in recovering established tax liabilities. For this power to be validly exercised, the tax authority must establish that an outstanding liability is final and conclusive, it must have issued an assessment, and the taxpayer has defaulted in paying the assessed amount within the statutory timeline. The law also imposes obligation on State tax authorities to obtain an order of a High Court for the distrain to take effect.

In many unrelated cases, however, tax authorities have disregarded the above conditions and exercised the power to distrain taxpayers in unwieldy manners. Simply put, allegations of tax default have been the basis upon which the distrains have been effected, and in some instances, without any court order and without affording taxpayers their right to object and appeal.

There have also been instances where taxpayers have received letters of distrain while a tax liability is still in dispute. In the Court of Appeal case between the Ekiti State Board of Internal Revenue (ESBIR) and Guaranty Trust Bank (GTB), where the ESBIR sought to distrain the properties of GTB, for instance, the Court entered judgment in favour of GTB that the ESBIR failed to fulfill the conditions in the Personal Income Tax Act (as described above) which @Businessdayng

are precedent to its invocation of the power of distrain under the law.

Also, the FIRS recently affixed notice of distrain on the premises of many insurance companies in Nigeria based on allegations of outstanding stamp duties liability. This is a clear violation of the distrain process as provided in the law.

3. Impacts on businesses The social contract between citizens and the government is such that the former should pay its fair share of taxes, while the latter should create an enabling environment by applying its resources towards developmental outcomes. Anything outside of these will hamper the economic potentials of businesses and will be counterproductive to the government’s revenue generation drive in the long-run.

Actions of tax authorities involving disruption to taxpayers’ business activities, unnecessary freezing of bank accounts, issuance of arbitrary tax assessments, and so on, will defeat the government’s agenda of increasing the tax base, bolstering tax revenue and improving the overall ease of doing business in Nigeria.

The overwhelming pungent narrative of tax authorities’ power-play would discourage existing and intending investors, who typically make tax environment an important parameter in evaluating their investment decisions. Considering that Nigeria’s Foreign Direct Investment in recent years has been anything but progressive, tackling the regressive practices of tax authorities must be a priority for governments at all levels.

4. Recommendations/Way Forward It is imperative for tax authorities to operate an all-inclusive administrative system by proactively engaging with stakeholders on tax matters that affect their businesses with a view to eliciting voluntary compliance. Further, tax authorities should infuse more rigour and thoughtful planning into their systems and processes. They should also set good example for taxpayers by adhering to the provisions of the law on tax administration and enforcement. In this regard, they could borrow a leaf from the Swedish Tax authorities.

Taxpayers, on their part, must fulfill their obligation under the social contract by paying the right amount of taxes and filing relevant tax returns as and when due. This will give them the moral grounds to challenge any austere directive issued by tax authorities. The legislature would also do well to amend inimical tax law provisions, which may be relied on by tax authorities to perpetuate unfair practices, or taxpayers to evade taxes. Overall, the judiciary must continue to play its role as the last resort and an unbiased umpire in tax disputes between taxpayers and tax authorities.

Ademola is a Manager; Samuel and Chinyere are Senior Associates, all at KPMG in Nigeria

Wednesday 11 September 2019

COMPANIES & MARKETS

BUSINESS DAY

17

COMPANY NEWS ANALYSIS INSIGHT

TECHNOLOGY

Improved fundamentals earn Interswitch B2 rating by Moody’s SEGUN ADAMS

I

nterswitch Limited, a Nigerian integrated payment and transaction processing company, on Monday was assigned a B2 corporate family rating by Moody’s on the back of improvements in the company’s fundamentals and positive industry prospects.

The rating is on par with Nigeria’s sovereign rating (B2 stable) and reflects the inter-linkage between Interswitch’s main clients, Nigerian banks and Nigeria, and the fact that most of Interswitch’s revenue is generated in the country.

Rating agencies, like Moody’s, assesses the financial strength of corporate and governmental entities to meet their obligations.

This means they determine the credit risk of bond issuers especially their ability to pay back principal and interest.

Moody’s on Monday also assigned senior unsecured programme ratings of B2 (provisional rating) and Aa3.ng national scale programme ratings to Interswitch Africa One Plc’s NGN30 billion programme; Interswitch Africa One Plc’s is a special purpose vehicle owned by Interswitch.

The rating agency says

the issuer outlook is stable on expectations that its business and profitability will benefit from growing electronic transaction volumes, offsetting risks arising from a more leveraged balance sheet.

A B2 is a Speculative Grade Credit Quality and debt instruments in this category may lack sufficient margins of protection such as structural or legal protec-

tions necessary to ensure a timely repayment.

On the other hand, an Aa3 means issuers (or supporting institutions) are rated as Prime-1 and such obligor has a very strong capacity to meet its financial commitments. It is only three ratings lower than Aaa, the highest-rated. Aa3.ng means Interswitch is very strong relative to Nigeria’s rating.

Int e r s w i t c h’s rat i n g comes amid possible plans by the company to tap into the debt market in an expansion bid.

Last week, Interswitch announced that through the incorporation of Interswitch Africa One PLC, it registered a debt issuance programme with the Securities and Exchange Commission of Nigeria (SEC) to explore strategic options for its busi-

ness, which may include the possibility of issuing debt securities to institutional investors and the general public.

As part of the registration process, Interswitch was assigned an “Aa” (stable) ratings by Agusto & Co., another international rating agency.

For Moody’s, the assigned Provisional rating of B2 senior unsecured programme

L-R: Hadiza Balarabe, deputy governor of Kaduna State; Nasir El-Rufai, governor of Kaduna State; Steen Hadsbjerg, vice president (Sub Saharan Africa Region), Arla Foods, and Jesper Kamp, ambassador of Denmark to Nigeria, at the MoU Signing on Partnership between Arla Foods and Kaduna State Government on the Development of Local Dairy Value Chain in Kaduna

ratings reflects positive secular industry shifts that will support Interswitch’s business, the firm’s strong market position and solid profitability, and its solid liquidity profile, supported by good cash flow generation capacity.

Although less than 10 percent of total transactions in Nigeria, the increasing use of electronic and digital payment channels supported Moody’s view; Moody’s believes the trend would support business generation and sustain the financial performance of Interswitch, with about 90 percent share of the electronic payment market, in periods of an economic slowdown.

Moody’s says it expects Interswitch’s profitability to soften given that higher interest cost for the upcoming bond issuance will consume a meaningful portion of its earnings but notes that the company’s solid liquidity is supported by strong cash flow generation.

The rating agency, however, balances Interswitch strengths against r i s i n g l e v e ra g e a s t h e company implements its expansion strategy, high operational, regulatory and technological risks, and a high geographical industr y and customer concentrations.

FINANCIAL SERVICES

CashBox aims to double customer base organically by year-end MICHAEL ANI

C

ashBox, a Nigerian-based digital savings platorm, aims to double the number of customers saving on its platform by yearend by leveraging more on technology and constantly delivering customer-centric services.

The firm hopes to increase its user base to 20,000 from its current 10000.

“We are investing hugely in secured technology in ensuring that our customers get improved quality services which would help us achieve growth and double the registered users before the year runs out,” Sydney Aigbogun, CEO, for the firm said in an interview with BusinessDay

in the firm’s office in Lagos.

CashBox is a secured online platform, designed to inculcate and promote the habit of savings in users while earning interest. The tech start-up rewards as much as 15 percent annually while allowing users save as low as N100.

Aigbogun explained that the reason for the establishment of the tech start-up firm is to encourage the habit of savings in an economy that has been challenged by falling disposable income and low purchasing power, so as to enable them cushion effect of shocks from arising unforeseen circumstances.

There are three plans for users who wish to save on Cashbox; the first is the regular saver designed mainly for sal-

ary earners. The Regular Saver allows users save any amount as low as N100 regularly on a daily, weekly, or monthly basis, depending on the one convenient for the user.

Users on this plan earn between 7 to 10 percent interest annually and are at liberty to suspend their savings at any time. They are also entitled to make four withdrawals at no cost, on the first day of the last month of every quarter, which is March, June, September and December.

However, any withdrawal done outside these days attracts a 5 percent charge on the account.

According to the online savings tech boss, the reason for the 5 percent deduction outside the free withdrawal

days was to discourage users from seeing the platform as a traditional back by curtailing all forms of unnecessary withdrawals.

The second plan is the Locked Savings which works like a normal fixed deposit account of Deposit Money Banks (DMBs). Nonetheless, users get their interest upfront and minimum tenor for the plan is 90 days.

The plan also allows users lock a fixed sum of money for any time frame above 90 days, get their interest upfront and locked funds at maturity. Users of the plan can earn as high as 15 percent interest per annum depending on the length of time and are open to the option of rolling-over or withdraw their savings at maturity.

The last being the Instant Savings, which gives users the opportunity to add more funds to their saving plan or, save any amount instantly, while still running their regular saver account.

CashBox was officially launched this year after being licenced under the corporative Licence Act, Aigbogun said. Card payments under the platform are secured using Paystack and Flutterwave.

“Funds saved under our platforms are safe and securely held with our partner bank which is the Nigerian Deposit Insurance Corporation (NDIC) insured,” he said.

“Our site was also built using Bank Grade security features, with user’s card and bank de-

tails secured using Paystack and Flutterwave, which operates one of the best payment technologies in the world and being used by top companies like Uber, Booking.com and many more.”

Aigbogun explained that users fund is kept in the bank and are invested in in risk free asset.

Unlike other savings online platforms, CashBox was one of the early introducers of the use of bank transfers for customers who don’t want to use a debit card. It also introduced a situation where users can transfer between plans.

Aside residents in the country, Nigerians in Diaspora can also save on the platform as long as they have a Master or Visa card.

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

18

Wednesday 11 September 2019

BUSINESS DAY

COMPANIES&MARKETS

Business Event

FINANCIAL SERVICES

Firms to combat money laundry as brokers undergo AML/CFT training

I

ISRAEL ODUBOLA

n compliance with the requirement of the National Insurance Commission, the regulatory body of the insurance industry, members of the Lagos Area Committee (LAC) of the Nigerian Council of Registered Insurance Brokers (NCRIB), underwent a training on Anti-Money Laundering and Combating Financing of Terrorists (AML/CFT) at the Insurance Brokers House in Yaba, Lagos, last Thursday.

The training is essentially to ensure that brokers are consciously or unconsciously not used to launder illicit money not used as conduit pipes to finance terrorism.

Welcoming participants to the training, Bukola Ifemade, the Lagos Area Committee Chairman, explained that the training is in compliance with the requirements of the National Insurance Commission (NAICOM).

“By regulatory requirements, it is very important for us to attend at least one training in a year like this one which is organised in partnership with AXA Mansard,” she said, adding that, “It is the wish of the executive members of the Lagos Area Council of NCRIB to see every broker do well and free from sanctions as a result of

infractions. I welcome each of us to this training I wish us the best and a very nice day.”

The full-day training was facilitated by LeishTon Centre for Leadership and Governance Thinking and fully attended by members of the LAC. McLeish Otuedon, Director, LeishTon Centre for Leadership and Governance Thinking, led the highly engaging and interactive training. Brokers were provided leading practice insights into the world of AML/CFT as well as the legal and regulatory frameworks guiding it, money laundering offences, predicate offences and sanctions, risk-based approach to effective to effective AML/ CFT among others.

In a chat with the media, Ifemade while further giving rationale behind the training said that every year, practitioners in the industry, particularly brokers, being the professional marketing arm are mandated to have these trainings at least once in a year, with certificates.

Trainings are to be provided by certified personnel or organisation on anti-money laundering.

She added that it is also in line with meeting the requirements of the InterGovernmental Action Group Against Money Laundering

in West Africa (GIABA).

“Particularly at this time, aside meeting the regulatory requirements, there is going to be an international body, GIABA, coming into the country to measure or assess the anti-money laundry exercise in Nigeria.

“You know Nigeria has been facing this corruption issues and one of the ways of checkmating this is through anti-laundering efforts like this. GIABA officials are coming in October to do an assessment of the country. An assessment of the country means, they are going to assess the financial operators of which insurance brokers are one.”

She further stressed that the training is done in partnership with corporate organisations to ease costs members would have incurred going for such on their own.

“Many of our members do not have the financial capacities to meet up with many of these regulatory requirements. To attend this training on their own is going to dig a huge hole in their pockets.

These people already have their own regular expenses they expend in running their regular day to day operations.

They have a lot of subscriptions to be paid to regulators and government, etc.”

L-R: Leke Ogunlewe, executive director, global banking, Standard Chartered (SC) Nigeria; Bill Winters, group CEO, SC plc; Abba Kyari, chief of staff to the president of the Federal Republic of Nigeria; Lamin Manjang, CEO, SC Nigeria, and Ibrahim Yusuf, head, public sector and development organization, SC, at a courtesy visit to the office of the President in Abuja recently.

L-R (front row): kayode Asanmo, deputy director, Central Bank of Nigeria (CBN); Haruna Mustafa, deputy director, CBN; Aminu Gwadabe, president, Association of Bureaux De Change Operators of Nigeria (ABCON); Teju Sobande, manager, Travellex World Wide Money; Back row (L-R): Uduma Cletus, executive secretary, ABCON, and Adewunmi Adewale, national accountant, ABCON, at the CBN sensitization workshop on Anti-Money Laundering/Combating the Financing of Terrorism (AML/ CFT) and Inter-Governmental Action Group against Money Laundering in West Africa (GIABA) Mutual Evaluation workshop for bureaux de change operators in Nigeria South-west zone in Lagos.

AGRICULTURE

BATN launches N5m grants for youth agripreneurs JOSEPHINE OKOJIE

T

he British American Tobacco Nigeria (BATN) Foundation has launched the Farmers for the Future (F4F) grant aimed at giving youths the opportunity to access funds to establish their viable agricultural enterprises.

The scheme, which is an annual competition organised by BATN for final year students of agriculture in various Nigerian tertiary institutions and recent graduates in the National Youth Service Corps (NYSC), seeks to promote the interest of youths in the sector.

According to the organisers, interested candidates that are eligible for the competition will develop creative

agribusiness proposals and fill an online application form on wealthishere.net.

Ten finalists will be selected to present their ideas during an interview with the Project Management Committee (PMC) and the best three candidates will be selected and presented to the public at an award ceremony, a statement states.

Group entries may be considered. However, each group or team should not exceed three members, and each member is mandated to meet the eligibility criteria.

Individuals that are willing to partake in long-term agricultural career and who have measurable experience in agribusiness are also qualified for the competition.

The star prize is N5 million; the second prize is N1.5 million, while the third prize winner gets a N1 million.

In addition to the prize, the scheme will provide technical support to establish an agribusiness enterprise.

Support to participate in capacity building programmes such as : boot camp/internship programme; mentorship programme with an established agripreneur will also be given to the winners.

Similarly, winners will also enjoy automatic membership of the F4F alumni network; agriculture training programmes; and attendance of agricultural forums.

Application deadline is September 13th, 2019.

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L-R: Olusesan Ogunyooye, head, marketing and corporate communications, Alpha Mead Group; Ngozi Anyogu, MD, AG Mortgage Bank; Niyi Akinlusi, MD, Trustbond Mortgage Bank Plc; Damola Akindolire, MD, Alpha Mead Development Company (AMDC), and Dada Thomas, chairman, AMDC, at the groundbreaking ceremony of AMDC›s affordable housing scheme, Green Park Homes in Lagos.

L-R: Damilola Ogunbiyi, MD, Rural Electrification Agency, and Evangelos Kamaris, MD, METKA Power West Africa, at the Energizing Education Programme (EEP) Solar Hybrid Project Commissioning at Bayero University, Kano, Nigeria recently.

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Wednesday 11 September 2019

BUSINESS DAY

COMPANIES&MARKETS

19

Business Event

TECHNOLOGY

SystemSpecs shows commitment for technology advancement IZUCHUKWU VICTORY

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ystemspecs, a Lagos based fintech company has showed commitment towards promoting Nigeria’s technological industry by organizing a two week summer coding classes for secondary school students in ten states and the Federal Capital Territory (FCT) Abuja.

The program co-hosted with TechQuest Academy, selected participants from 18 different high schools across Nigeria, and charged with the training of people on coding, by using robots and other gadgets.

TaggedRemitaSummerCoding Camp, the two-week camp was purposed to open the mind of the children to latent opportunities in the technology space and creatively expose them to the technological world while arousing their interest in exploring the world of innovations, creativities and developments.

According to John Obaro, Managing Director/ CEO of SystemSpecs, the summer coding was organized to engage the students, build their skills and create in them the desire t be creative and innovative while guiding them towards exploring the world of technology.

“We just saw this coding camp as part of the opportunity to work with the kids, to show them what the future is and encourage them to embrace software development since everything around us these days is technology-enabled.

So being able to give these young ones the opportunity to understand what it is and being ready to take over the future of technology,” he said.

Olumide Aderewale, Techquest Operations Manager and one of the facilitator at the summer camp pledged the company’s commitment towards a continuous followup on the students after the summer camp.

“This is just an introduction to whet the appetite of the students and to create a hunger for them to learn. With this training, they will be able to think creatively, work collaboratively and even build simple solutions”.

“After the two week intensive sessions, they will also grow with the support of follow-up from us and their parents who will support them by getting the necessary resources. On our part, we have a link posted online that the kids can continue to learn under our tutelage”, he said.

One of the parents who accompanied Aishat Lawal, a participating student, to the camp, Olajide Lawal told the media that he purposely brought his 12-year old daughter who is in JSS3 at the Federal Government College, Ibillo, Edo State, to the camp to learn how to write a line of code.

Lawal said that he had to register his ward when he learnt about the opportunities available to students who are digitally-inclined in this present digital age.

“I see a lot of opportunities

that are lacking in my local government and brought Aishat here to build her capacity in addition to what she is being taught in Federal Government College”, Lawal said.

Lawal who brought his daughter from Ifelodun Local Government to Lekki, venue of the coding camp said he was satisfied with the high level of facilitators who administer the coding classes.

“Aishat told me that they were taught how to build animation, games, 3D printing and many other things. I know that after the two weeks, she would have learnt a lot of things”, Lawal explained.

Speaking with the media during the summer camp, 13 years old ss1 student of International School, University of Lagos, Diekoloreoluwa Ajayi shared the impact of the summer camp.

“I have learnt a lot. I have learnt how to build blocks from Scratch. There is a programming language called Scratch.

You don’t have to start building from Scratch. With the programming language called Scratch, you don’t have to write code, you just have to bring out the blocks. So I have learnt how to put blocks together”.

“I have learnt how to make games with the programming language. I have learnt how to put words together to make sense. I have learnt how to make a questionnaire; like my character can interact with you. It can also ask you questions and give you specific instruction,” he explained.

R-L: Bayo Williams Olugbemi, 1st vice president, CIBN; Uche Olowu, president/chairman of Council, CIBN; Isaac Babatunde, executive director, Agusto Consulting, and Olusegun Owadokun, chief operating officer, Agusto Consulting at the CIBN accreditation ceremony Lagos.

L-R: Hauwa Abbas, commissioner North West,World Hepatitis Eradication Commission; David Nwedu, project consultant; Mike Omotosho, president, Nigerian Commission; Zainab Shinkafi-Bagudu, wife of Kebbi State governor, and Oye Oyewo, Rotarian Hepatitis Action Group, at the recognition of Zainab Shinkafi-Bagudu as Hepatitis Zero ambassador by World Hepatitis Eradication Commission in Abuja.

Pic by Tunde Adeniyi.

OneWildCard creative agency unveils new office space

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igerian creative agenc y, O neWildCard has unveiled its allnew workspace, located in Opebi, Lagos. The new office, which features some eye-catching and conceptual bit of interior decoration, is a marvel to behold.

It is an expression of the company’s strong culture of open communication and creative collaboration.

The company has been on a steady rise since its inception back in 2017.

Renowned for executing the unconventional, OneWildCard prides itself on being able to solve marketing communication problems with thought-provoking digital communication strategies. This approach has seen the brand become one of the fastest-growing creative outfits in Nigeria.

In the last 12 months, the company has executed

great creative and communication campaigns for some of Nigeria’s biggest brands, such as Leadway Pensure PFA, Kilimanjaro Restaurants, The Burna Boy show, NETng Honours, among others.

The new office space is a testament to the years of hard work and consistency by the great minds at OneWildCard.

“We still have a long way to go, but we have made some giant strides in the last year. This new office space is a perfect home for the company we want to be.

We hope to do even greater, more impactful work from this workspace. To all the brands that have given us the chance to contribute to your services, we say a big thank you and we promise to continue delivering even more creative and exciting works.” said Kayode Olowu, the CEO and Founder of www.businessday.ng

OneWildCard.

Kayode is an internationally trained creative, and the leading mind behind the success of Onewildcard. His illustrious career included a stint in Germany, where he won awards including ADC, Germany, D&AD, Young Guns and CLIO. He and his small team of creatives have constantly defied expectations to rise above the odds and stake their claim as one of the fastest-growing agencies in West Africa.

Onewildcard is a creative design agency that combines intuition, culture, and intelligence, to solve communication, process and service challenges for brands as well as bringing their ideas to life. The brand prides itself in giving its clients an unfair advantage through its offerings ranging from identity design, communication design, to process design.

L-R: Olusegun Fafore, executive senior assistant to Lagos State governor on New Media and Public Relation; Steve Ayorinde, former Lagos State commissioner for Arts & Culture; Folarin Adeyemi celebrant/immediate permanent secretary, Lagos State Ministry of Information & Strategy, and Gbenga Omotoso, commissioner for information & strategy, at the retirement and Pen down ceremony in honor of Adeyemi and public presentation of his book, in Lagos.

L-R: Atiku Bagudu, governor, Kebbi State; Asue Ighodalo, chairman, Sterling Bank Plc, and Abubakar Suleiman, MD/CEO Sterling Bank Plc, during the Sterling Bank Agriculture Summit Africa held in Abuja. Pic by Tunde Adeniyi

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20

Wednesday 11 September 2019

BUSINESS DAY

Wednesday 11 September 2019

BUSINESS DAY

21

ONYECHE TIFASE

CEOINTERVIEW

MD and chief executive of Siemens Limited

Interview with Private Sector Leaders

‘How government, Siemens power deal will impact economy’ ONYECHE TIFASE is the managing director and chief executive of Siemens Limited Nigeria, the company with which the Federal Government recently signed a power deal that is expected to extend the national grid to 11,000mw of electricity. In this interview with OLUSOLA BELLO, she gives insights into how the deal was struck and its potential impacts on the economy. Excerpts:

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ell us how the deal was struck and what it is intended to achieve.

The initiative originated from the meeting that President Muhammadu Buhari had with the German Chancellor, Angela Markel, when she visited Nigeria last year.

The German chancellor came with a delegation from Germany and in her delegation was the president and CEO of Siemens Joe Kaeser. At that meeting, there was a discussion between President Buhari and the German Chancellor, Angela Markel, about how Germany could support Nigeria and they decided to focus on energy and infrastructure in particular. Soon after their discussions, there was a presentation from Joe Kaeser to those present at the meeting and he spoke about what the company had done in Egypt.

So in summary what the company achieved in Egypt was within 27 and a half months. It delivered 14,000megawatts of electricity to the grid.

The company supplied about 14,000mw of electricity to the grid. There are two different power generation plants. This achievement helped to boost economic development in Egypt. The company is also supporting this with a very robust vocational training concept that would eventually be delivered with the cooperation of the German government.

Certain schools in Germany now deliver vocation training for apprentices that can work in the power sectors and other sectors of the economy.

The intention for the vocational training is to create thousands of jobs for young qualified and highly skilled Egyptians.

He also spoke about the impact that this has had on the Egyptians economy. It was a game-changer for the Egyptian economy, a game-changer for the Egyptians themselves because it offered small and medium-scale entrepreneurs a lot of opportunities. They have an excess capacity which they can export o other countries.

Also what was critical in that project was that there was knowledge and technology exchange. Thousands of SMEs in Germany and in Egypt are collaborating now and are able to grow their businesses through that project.

The Siemens CEO spoke about these with many details and I think at the end of that presentation the president got more interested and decided to ask the CEO to support Nigeria with the same concept. So from that moment, we started working with the president’s office and through the Chief of Staff’s office. There and then we started coming up with the concept of what we thought Nigeria could achieve. There were several workshops with the government, all stakeholders, Transmission Company of Nigeria, all the 11 distribution companies and Bureau for Public Enterprises (BPE).

The BPE is also co-ordinating these efforts on behalf of the government. There were meetings also with the Ministry of Power and Nigeria Electricity Regulatory Commission (NERC). It has been very supportive, and they submitted several recommendations and fi-

nally came up with a road map for the Nigeria electricity industry. This road map details how in three phases Nigerian power sector will expand its grid and could increase generation capacity to achieve competitiveness. This is because without sufficient electricity we can’t achieve economic competitiveness.

Obviously the issue we are facing now is that with the grid, we discovered that it is not really about additional generation as it was in Egypt, but about fixing and ensuring that stranded power gets to end-users.

So in the first place, we would be fixing the transmission and distribution grids in such a way that would enable evacuation of additional capacities, that is stranded right now.

Operational capacities are being upgraded but cannot get to consumers. So by fixing transmission and distribution infrastructure would raise peak capacities from 5000mw to 7000mw in the first phase.

In the second phase, we would know that other plants are coming on and consumers would be switching on additional capacities as new projects in the works may come on stream. We have the Mambila hydropower projects. There are other power plants that have their phases two and three yet to take up.

So there are plans to extend the grid by additional 11,000megawatts capacity. Before we get to phase two we would do detailed studies to understand what is really required for us to revalidate the assumptions, so that we would probably have much more robust projects for phase two which would enable us to achieve expansion and double that capacity from 7 to 11 gigawatts (7,000mw to 11,000mw) From Phase three we have 11 gigawatts of electricity and probably by that time we would have about 13,000mw generating capacities working.

If you look at all the plants and where the power purchase agreement has been signed there are a lot of projects that are planned to come online. By the third phase we would be looking at extending the grid from11 gigawatts installed capacity to probably be around 13 gigawatts or more and we expand that to 25 gigawatts. So this is really about expansion. I have seen certain newspaper publications that are just adding these targets, the ultimate aim is to achieve 25 gigawatts for Nigeria in the medium to long term and to do it in a very strategic and integrated manner.

It is a comprehensive approach to resolving the issues that exist and to also ensure that whatever additional capacity comes online is guaranteed that it is transmitted and distributed to the consumers. Because when you have gaps or lose power then the sector becomes unbankable and it is not a viable sector any more. We just have to ensure an efficient and high-quality grid.

To complement this, the other thing we are doing is you have to understand that there is a lot of human intervention and you can have the best technology, the most modern infrastructure, but without having the right skills to operate it, it will all be lost. www.businessday.ng

All the11 discos have been carried along, they understand very well where we are headed and have established lines of communications with their managements and technical teams. As I said, we will even be carrying out deeper investigations as we go on to understand in details what is required specifically to move further on the programme.

To the Discos, I think they are very eager to work with us. They also realise that they would have a say in whatever is delivered. We would not go against their requirements. We have seen a lot of tractions, they have been very supportive and engaging and give us inputs where they can and shared with us their experiences and some of the assumptions we made they have clarified them.

We went in with a very questioning and open mind too to really understand what their challenges are. We are not trying to force our solutions on the Discos or use what is popularly published in the press as a basis for engagement. We understand that these Discos are trying their best with the resources they have and they need support and we are trying to provide that support.

Does Siemens have the personnel required on the ground to carry out this task?

The idea is that we need to know where is Siemens strength and the areas we need support. We know we need to work with a lot of local companies and we find out that a lot of companies could be our potential partners. We have a robust system of assessing the market to know who we could work with to ensure that the jobs are well delivered effectively.

So we would be looking for a few partners as time goes on. Of course, just as we did in Egypt, those resources don’t exist but we have to train, you have to develop. But we have confidence that Nigerians are enterprising, smart and hard-working. Those resources we need are here, it is just that we would have to upscale them to make sure they are up to the Siemens standard and they can be effective contributors to the programme.

We also provide a very comprehensive technical training concept for the employees of Discos, TCN and possibly other agencies that support TCN and Discos and ultimately we would also complement that with a similar vocational concept as we have done in Egypt. Right now we have somebody who is doing studies and visiting different Discos and training agencies to try and understand what is on the ground for them and what the gaps are so that we can provide something that complements what is already available so as not to duplicate efforts. There would be a lot of cooperation with the existing training centre. We would, therefore, want to upscale the existing employees and plan for future employees and make sure the skills are in place when the new infrastructure comes in into the country.

Who Finances the project?

Well, the project is a government-to-government initiative. It kicked off as a conversation after the visit of the German Chancellor to Nigeria. However, there will be German Export Credit Agency (ECA) financing. It would be one of those agencies financing the

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initiative, so whatever other credit instruments are required we would secure as we go along but in the initial phase we see a bulk of it coming from the German Export Credit Agency (ECA) What has been said is that it would take care of Transmission and distribution but what level of co-operation are you getting from the Discos?

We have seen a lot of eagerness from the Discos to resolve the challenges they are facing. They understand that this a very competitive proposal, it is very low-interest financing, the products would be high-quality products of German and all European equivalent standard and they understand also that it is not business as usual. We have shown them a depiction in a graph where Nigeria GDP continues to grow at a very minimum rate similar to where it is going now and the impact of having the project done. The impact on the reduction of ATC and C (Aggregate Technical, Commercial and Collection) loses which is where the discos are also losing revenues. They also understand that with the equipment to be put in place they will recover revenues. So they also understand the potential in this programme, so they are willing to work with us.

They know we have a say in everything we do and we engaged very frequently with the discos.

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There is this school of thought that the cost of the project is $3 billion. Is that all that is required?

There is no figure in the implementations agreement. I think what people have simply done is a simple assumption that to generate one megawatt of electricity will cost $1 million. Perhaps that is what they have used to arrive at such a figure because the government’s target is 25,000 megawatts. But this is not generation, we are simply fixing the grids so no prices, no figures have been proposed now but this will be the next stage we are getting to. In essence, we are getting to a point where there will be figures and agreements with the Discos, on these figures there will be an agreement with the Transmission Company of Nigeria and also with the government and ultimately we would enter into a firm agreement with the government.

In specific terms when are we going to begins see the works happening?

I think we have done a lot of work and what is being appreciated is the volume of work into this agreement. We have been working since September last year. We had several workshops and with Discos we have done a lot of investigative studies and these things cost a lot of time and efforts but Siemens has done these as a partner to the government.

So where is groundbreaking for Nigeria?

We understand in much details where and how this problem should be solved. It is not a conceptual document anymore; it is a project plan. What is left is cost, the plan, and to secure its financing and ensure it is implemented. What we have done right now already is a necessary step to ensure we can deliver the project. What we are now trying to do is to hit the ground running: start this grid studies which would give us enough transparency and fits into the environment.

Sometimes there is a risk of over-specifying

or over-delivering. However, we want to be sure that every gap identified is adequately resolved.

There are also priority areas such as urban centres. Where are the biggest loads? Where would the biggest impact be if we mobilise?

How can we provide an adequate solution for those rural areas that are far away from the urban centres so that pricing is affordable and dependable and is not overly expensive but something that is competitive?

I think we have done that work. There is a lot of pressure from the government. This whole project is being spearheaded by the President himself. He witnessed the signing and I believe he would be monitoring the progress of the project.

We also heard our global CEO made a very clear commitment to getting this project take off the ground. He made a very clear commitment that Siemens was going to work with the Nigerian government to deliver this initiative. I think from both sides there is that commitment already spelt out and which was formally acknowledged in our implementation agreement. We are working at speed and we would be engaging with the government as often as possible to ensure that everything that is required for this initiative to move forward is put in place Siemens restructured recently. Which of the sectors has Nigeria operation fallen into?

I cannot say much about that programme apart from what has been published in the papers. But beyond what we are trying to do is to ensure that Siemens and its partner businesses are set up to succeed in whatever market they are, so they are using their different strengths for their different markets. That level of independence gives them more entrepreneurial freedom. This is the intention in the segmentations of Siemens power from the

When are you taking off effectively?

Exactly where we are now is to sign implementation agreement; this gives us the platform to start engaging more intensively to achieve financial clauses and essentially enter into a contractual agreement with the government to get this project delivered. What we would be doing over the next four months would be to be structuring the financing and ensuring that all the capacities required are in place whether it is local or international. The other things we would be doing is that we would ensure that the studies we did are executed so that in a few months we are able to have a better view of all those issues involved in phase II. For phase I, we are already clear where we are headed and what needs to be done. This is why implementation agreement basically provides the platform for the execution of Phase I. So we are working out what is coming into a firmed co-operation with the government. Right now we are still at the point to secure the financing basically. This is where we are. Once the financing is secured, we would enter into firm cooperation with the government. And that time a lot of planning and efforts would be in place to ensure that those resources, power equipment which have been produced are delivered and those plans for the project developed would be immediately rolled out.

traditional Siemens business. What we have is the traditional Siemens business, which is more of digitalization and automation, which is the core area of Siemens Power and Gas. But what I can assure you is that all those businesses would be represented in Nigeria and good evidence is this power programme.

What is the current situation with your participation with light-up Lagos?

I think the Lagos State Government is still trying to ensure sufficient electricity for the state.

We had meetings with Lagos State Governor and he has expressed his interest to deliver electricity. What we are trying to do now is to come up with the concept for the government.

We are also willing to work with the Lagos State Government to ensure the project is accomplished.

It is not a Lagos-wide project. It is targeted at areas in the state where electricity is a big problem and has to be resolved immediately.

The government has just appointed its commissioners. The one responsible for energy would come up with areas where they think we can intervene. We have expressed our wiliness to work with them and also share with them studies we have already done on Lagos State and this programme we are handling currently.

I think Siemens is best positioned right now to support Lagos state government in its efforts, because again, in Lagos State a lot of issues have to do with the grid. Generation is important but it is complemented by the availability of infrastructure to ensure you can evacuate to end consumers. So generations is not a problem, it is the easiest part of the job.

I always think of how to ensure end consumers get affordable and reliable electricity. We have a highly comprehensive concept in this regard.

Whatever is proposed to Lagos State would tie into the broader objective of the national project. So whatever that is proposed would be highly beneficial on how they can generate electricity for Lagosians and even export to other states if the state wishes to.

How do we ensure that Lagos receives electricity in the most efficient manner? We have seen where some IPPs have been developed but have not been able to run successfully in the long run, maybe because people have been able to find alternatives and those plants become redundant. We have to ensure that whatever infrastructure that is developed is really required and also recovers the investment for that power infrastructure because it will be an integral part of the grid.

Cost-reflective tariff: are you going to advise the government to let that happen?

On the matter of reflective tariff, I think NERC is doing a good job on that issue. We have engaged with NERC. We know it is a critical part of the success story that we are trying to develop for the sector. We are happy to provide whatever inputs that are required.

We have met with NERC on a number of times. I think it has the responsibility and the resources to come up with an appropriate tariff that is viable and for different categories of customers that can afford to pay while the payment is channelled across the value chain of the power sector.

We are saying that the infrastructure we are putting in place will drastically reduce the loses. It gives room for a cost-reflective tariff that will ensure all value chain, including consumers, are adequately addressed.

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22

Wednesday 11 Seprtember 2019

BUSINESS DAY

MARITIMEBUSINESS SHIPPING

LOGISTICS

MARITIME e-COMMERCE

Volume of containerised import cargoes drops 50.3% to 192,164TEUs in Q1 … As non-oil import, export cargoes fall 0.3% 18.67MMT AMAKA ANAGOR-EWUZIE

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he volume of c o nt a i n e r i s e d cargoes imported into the country in the first three months (January to march) of 2019 dropped by 50.3 percent to stand at a total of 192,164 twenty-foot equivalent unit (TEUs), from 387,016 TEUs recorded same period in 2018, the latest port statistics released by the Nigerian Ports Authority (NPA) has stated.

According to the NPA, this volume amounted to a total of 2,818,990 metric tonnes of imported containerised goods while a total of 486,978 metric tonnes of containerised goods cargo were exported in the period under review.

Also, the volume of nonoil cargoes handled in the nation’s seaports in the period under review dropped by 0.3 percent to a total of 18,674,534 million metric

tonnes.

A breakdown of this shows that a total of 11,212,281 million metric tonnes of non-oil cargoes were imported while 7,462,253 million metric tonnes of non-oil cargoes were exported in the first quarter of the year.

Surprisingly, in the period under review, the number of ship calls recorded in the nation’s seaports increased by 6.09 percent to stand at a total of 1,045 vessels with

gross registered tonnage of 32,994,368 metric tonnes of cargoes as against the 985 ship calls with 31,693,650 metric tonnes of cargoes were discharged in the nation’s ports in the first quarter 2018.

A further breakdown shows that general cargo that was brought into the country stood at 1,379,894 metric tonnes while a total of 367,425 metric tonnes of non-crude oil general

cargo was exported out of the country during the period under review.

NPA further disclosed that in terms of dry bulk cargo, a total of 1,888,446 metric tonnes were brought into the country while a total of 223,355 metric tonnes were exported within the period under review.

Importers also brought in a total of 5,124,951 metric tonnes of liquid imports while exporters took out

a total of 6,384,495 metric tonnes of liquid export.

Speaking on the business activities at the ports in the first half of the year, Adekunle Oyinloye, group general manager of SIFAX Group, said terminals recorded a slight drop in the volume of business activities due to expansion of other ports and diversion of transit cargo to more efficient ports by cargo owners from landlocked countries.

He identified the bad state of the access roads to the TinCan Island Port, especially Apapa-Oshodi Expressway, as a major challenge as consignment spend days at the port than necessary.

Oyinloye called on the government to consider linking Tin-Can Port by rail to make evacuation of cargo a lot easier. “It has become saddening that some ports in West Africa have taken the shine off Nigeria despite the size of the Nigerian economy in the region. For instance,

Lome Port has now become a hub,” he said.

Road congestion, he said, made it near impossible for cargo owners to take delivery of their consignments, adding that importers are now diverting transit cargoes to more efficient ports in the West African region.

Hadiza Bala-Usman, managing director of the NPA, has said that the nation’s seaports were losing ship and cargo traffic because of government policies that are discouraging importation.

“We have noted a reduction in traffic coming into our ports. We attribute this to the fact that Nigeria has been advocating for self-sustenance in terms of manufacturing and consuming what it produces,” said Bala-Usman during NPA’s 2019 budget defence before the House of Representatives Committee on Ports, Harbours and Waterways in Abuja earlier in the year.

NIMASA reiterates commitment to safety on Nigerian waterways TAAM confab to seek sustainable growth in maritime sector

...As IoD calls for collaboration SEYI JOHN SALAU

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n line with its mandates of promoting maritime safety and building indigenous commercial shipping capacity for international and coastal shipping, the Nigerian Maritime Administration and Safety Agency (NIMASA) has reiterated its commitment to ensuring safe shipping on Nigerian waterways.

Dakuku Peterside, director-general of NIMASA said the recent signing of the Suppression of Piracy and other Maritime Offences Bill (Anti Piracy Bill) into law by President Muhammadu Buhari in June 2019, was geared towards dealing with the menace of piracy and related crimes in the Nigerian maritime domain.

Peterside stated this at the September 2019 Members’ Evening of the Institute of Directors (IoD) Nigeria with the theme, “The Activities of the Maritime Administration and Safety Agency.”

He said that currently the NIMASA Act 2007, Merchant

Dakuku, DG of NIMASA

Shipping Act 2007 and Cabotage Act 2003 as well as regulations made pursuant thereto are being reviewed.

“The Coastal and Inland Shipping (Cabotage) Act 2003 is meant to increase indigenous capacity in tonnage, manning, building, and ownership of ships,” said Peterside, who was represented

by Ahmed Gambo, executive director, Maritime Labour and Cabotage Services of NIMASA. Peterside stated that yearly Certificate of Competency (CoC) examination is conducted at the Maritime Academy, Oron leading to the issuwww.businessday.ng

ance of different categories of CoC to successful candidates.

“However, to maintain high standards and give credibility to the CoC issued by NIMASA and to sustain the CoC online verification portal, the agency is working out modalities on external audit of all its examiners,” he said.

He said that in 2017, NIMASA introduced the new Cabotage Compliance Strategy (CCS) for a successful coastal and inland trade regime, thereby halting consideration of application for grant of waiver on manning for prescribed category of officers on vessels engaged

in Cabotage trade. “The New Cabotage Compliance Strategy has ensured that a significant number of seafarers are on board different Cabotage vessels.

“NIMASA is currently engaging with the Nigerian Content Development Monitoring Board to drive the 5-year Strategic Plan for cessation of grant of Cabotage waivers as this is geared towards building capacity in the maritime industry and to harmonise the enforcement processes of both agencies, in driving compliance with the Cabotage Act 2003,” he added.

Chris Okunowo, the president and chairman governing council of the IoD, said the strategic importance of the Nigerian maritime sector to the growth and stability of the economy is attested to by its value in the upstream sector of the oil industry.

“Nigeria, with its vast water resources and a prospect to generate over $8 billion yearly, has a maritime sector that has the resources to propel the desired growth in the nation’s economy,” he stated.

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he promoters of Taiwo Afolabi Annual Maritime (TAAM) Conference have concluded plans to hold the fourth edition of the event geared towards boosting the growth of the nation’s maritime sector through reforms.

The conference, which is an initiative of the Maritime Forum of the University of Lagos and SIFAX Group, will hold this Friday, September 13, 2019 at the University of Lagos, in honour of Taiwo Afolabi, Group executive vicechairman of SIFAX Group.

At this year’s event, Olasupo Shasore, former attorney general and commissioner of Justice, Lagos State will deliver the keynote address, and lead other eminent maritime industry leaders, legal experts, academics and university students drawn from over 10 institutions to discuss on the theme, ‘Innovations and Practical Reforms Towards Sustainable Growth in Nigeria’s Maritime Sector’.

Taiwo Afolabi, Group executive vice-chairman of SIFAX Group, said the need to deepen discourse on topical issues in the nation’s @Businessdayng

maritime industry, as well as proffering practical solutions to them, gave birth to the conference.

He said the event would dwell on issues bordering on innovations and practical reforms needed for sustainable growth of the maritime sector.

“To sustain growth, we need to invest in innovations and reforms. The 2006 reform, which gave birth to concessioning of the ports, has yielded great gains for Nigeria. Nigeria’s port concession has served as a model for many other African countries. Now that we have seen the fruits of concession, we need to embark on more aggressive reforms and innovations that will make the maritime sector the major earner for the government,” he said.

On his own part, Gbenga Akinlade, president, Maritime Forum, said the conference would be beneficial to both the industry and students due to its objective of being an avenue to stimulate intellectual discussions between maritime experts and the university community.

Wednesday 11 Seprtember 2019

BUSINESS DAY

23

MARITIMEBUSINESS SHIPPING

LOGISTICS

MARITIME e-COMMERCE

Timely, affordable cargo delivery key to global competitiveness - CRFFN AMAKA ANAGOR-EWUZIE

T

he ability to timely deliver goods and services at affordable costs to shippers has been identified as a major indicator that a nation’s logistics supply chain is globally competitive, the Council for the Regulation of Freight Forwarding in Nigeria (CRFFN), has said.

Samuel Nwakohu, registrar of the CRFFN, said while delivering a paper titled: ‘The Role of the CRFFN in Cargo Distribution and Logistics Chain Management in Nigeria’, at the 2019 National Annual Bonded Terminal/Logistics Conference, that freight forwarding facilitates trade by ensuring that goods and services are moved across international borders at competitive costs, in the right way and at the right time in line with relevant regulations.

In Nigeria, he said, port operators and us-

L-R: Hadiza Bala Usman, managing director of NPA, presenting an award for the Best Practice Financial Reporting Unit to Sunday Oyeyipo of the Account Division of NPA, during the NPA Long Service & Merit Award in Lagos at the weekend.

ers of port services have been facing several challenges, particularly with respect to the quality of services offered by freight forwarders.

He blamed these challenges on the fact that a majority of freight forwarders lacked the capacity for processing

shipment efficiently.

Conventionally, he said, the role of a freight forwarder is to ensure efficient movement of goods, adding that logistics which is a major component of the supply chain is crucial to economic development of any nation.

Nwakohu further stated that Nigeria presently ranks 110 out of the 166 countries in the World Bank’s Logistics Performance Index (LPI), which means that the nation’s trade quality is poor due to high cost and slow speed of clearance at ports.

“This is in spite of the

fact that ECOWAS has identified Nigeria as the most active West African country in trade, accounting for 76 percent of shipping activities undertaken in the whole of West Africa,” he disclosed.

Nwakohu however said CRFFN was working with the Nigeria Shippers’ Council (NSC) and Nigerian Railway Corporation (NSC) to promote the use of Kaduna Inland Dry Port (KIDP). “This will greatly reduce costs, congestion and accidents on the road network and also create jobs and facilitate import and export trade.

On the recently signed Africa Continental Free Trade Area (AFCFTA), he said that it is a wakeup call for all involved in the freight forwarding activities to explore the new opportunities that come with AFCFTA bearing in mind that promotion of trade and economic activities can only be practical when there is provision of a conducive, friendly and compliant environment”.

“Human capacity de-

velopment is critical to promoting efficiency in cargo movement. Therefore, in compliance with the enabling Act, the Council has set educational standards by developing and implementing courses in Freight Forwarding, Logistics and Supply chain management which cuts across legal, dangerous goods management and ICT applications and among others,” he said.

He further disclosed that by 2021, anyone without FIATA Diploma in Freight Forwarding and Supply Chain Management qualifications will not be allowed to practice freight forwarding in Nigeria.

Ambrose Obioma Okehi, convener/CEO of Richword Communication and Media Services, said the aim of the event is to remind stakeholders and government on the need to come to the aid of private investors, who sometimes borrowed money to establish bonded terminals.

NPA commits to workers’ wellbeing, recognises long-serving staff

H

adiza Bala Usman, managing director of the Nigerian Ports Authority (NPA) has reiterated management’s commitment to recognising efforts of its workforce, who contributed positively to its quest of attaining hub status in the West African region.

Speaking during the 2017 /2018 Long Service/ Merit Award Ceremo-

ny held in Lagos at the weekend, Usman said her management would continue to strive at improving the welfare of the staff.

She further motivated the NPA staff to work hard in all spheres towards the sustainability and realisation of reforms embarked on by the authority to meet international best practices in port business.

She disclosed NPA’s intention to build a well-motivated workforce with the requisite character, competence and capacity to optimise Nigeria’s rich maritime endowment by sustaining the reforms the authority has undertaken so far.

“Without a sustainable reform, the goals NPA wants to achieve as enunciated in the 25-year port development plan

would remain unattainable,” she said.

Boss Mustapha, secretary to the Government of the Federation, who commended the board and management of the NPA for putting together the award, stated that the event showed that the Authority places high premium on its human resource.

He charged the award-

ees to reciprocate the gesture of appreciation by bearing in mind the copious role the maritime sector plays in the realisation of the Federal Government’s Economic Recovery and Growth Plan (ERGP).

Chris Ngige, Minister of Labour and Productivity, who applauded the Authority for aligning with the objective of

the Federal Government in the area of improved workers’ welfare, assured that the present administration would continue to invest in the welfare of the Nigerian workers.

This, he further stressed, had been exemplified through the recent approval of the National Minimum Wage and resolution of pending industrial disputes.

VESSELS EXPECTED AT LAGOS PILOTAGE DISTRICT SHIP

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VEGA HERCULES

FURUHOLMEN IVER AMBASSADOR TERN PARKGRACHT DONG BANG GAINT NO 1 GUO RUI MEDI BANGKOK JPO PISCES CMA CGM. OPAL CMA CGM.JAMAICA KONRAD SCHULTE ANL WYONG JPO VELPECULA GREEN BODO FURUHOLMEN DESERT CALM NAVIG 8 PRESTIGE MOSUNMOLA FURUHOLMEN MSK CUNENE MSK COTONOU KOTA LAGU KOTA BUANA KOTA KASTURI KOTA SETIA KOTA SEMPENA POLAR PACIFIC

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OBSERVATOR GUO SHUN CMA CGM.TOPAZ CMA CGM HERODOTE COSCO KOBE SONGATOSCANA

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ALLRINE

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140M

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ALLRAY BLUESEAS BLUESTAR BLUESTAR BLUESTAR BLUESTAR BLUESTAR CMA CGM.NIG CMA CGM.NIG CMA CGM.NIG CMA.CGM. NIG CMA.CGM.NIG COSCO EKENEL NIG LTD ELOHIM GOLDEN INTRSHIP INTERSHIP PEAK MAERSK MAERSK PIL PIL PIL PIL PIL SUPERMARITIME

ABTL WABECO GDNL DAN. REF DAN. REF DAN. REF GDNL APMT APMT APMT APMT APMT APMT ENL ABTL ABTL SBM PWA NOJ APMT APMT APMT ENL APMT APMT APMT ENL

7991MT 3500MT 30144MT 3195MT 3783.604MT 13108.75MT 46200MT 600FCL 530FCL 600FCL 300FCL 500FCL 761FCL 700MT 1000MT 4739.38MT 89000MT 10,000MT 6200MT 380FCL 350FCL 550FCL 2337.45MT 540FCL 530FCL 560FCL 30,000MT

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09/09/19 19/09/19 08/09/19 09/09/19 15/09/19 15/09/19 09/09/19 07/09/19 12/09/19 17/09/19 08/08/19 18/09/19 12/09/19 06/09/19 19/09/19 16/09/19 06/09/19 07/09/19 09/09/19 09/09/19 07/09/19 08/09/19 10/09/19 15/09/19 20/09/19 28/09/18 09/09/19

145M 110M 190M 169M 136M 155M 190M 264M 260M 264M 179M 261M 265M 109M 145M 194M 250M 145M 145M 249M 249M 260M 180M 233M 228M 228M 180M

BASEOIL BITUMEN B/WHEAT G/CARGO G/CARGO G/CARGO B/GYPSUM CONT CONT CONT CONT CONT CONT F/FISH BASEOIL B/WHEAT PMS AGO BASEOIL CONT CONT CONT G/CARGO CONT CONT CONT G/CARGO

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17189MT 2500MT 560FCL 500FCL 579FCL 799FCL

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05/09/19 02/08/19 05/09/19 26/08/19 30/08/19 02/09/19

191M 169M 260M 170M 260M 255M

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www.businessday.ng ALRAINE BLUE STAR CMA CGM.NIG CMA CGM.NIG COSCO COSCO

https://www.facebook.com/businessdayng

@Businessdayng

CRNAPP CRNAPP

24

Wednesday 11 Seprtember 2019

BUSINESS DAY

FEATURE

FG’s green bond advances learning through off-grid hybrid power plant Nigeria’s tertiary education sector received a boost recently as the Federal Government of Nigeria commissioned Africa’s largest off-grid solar hybrid power plant (7.1MW) at the Bayero University, Kano. STEPHEN ONYEKWELU writes that this will improve learning and research with spin-off social and economic development impact on host communities.

O

ver fifty-five thousand students and 3, 077 members of staff of the Bayero University, Kano (BUK) will now have access to clean, sustainable, reliable electricity supply from the institution’s 7.10 megawatts (MW) solar hybrid power project that was commissioned by the Federal Government of Nigeria, recently.

This is part of President Muhammadu Buhari-led administration’s effort to supply clean power to 37 Federal Universities and seven University Teaching Hospitals across the country through the Energising Education Programme (EEP), implemented by the Rural Electrification Agency, which is tasked with the electrification of un-served and underserved communities.

The project includes the provision of an independent power plant, upgrading existing distribution infrastructure, street lighting to improve security within the universities’ campuses, as well as the development of a best practice training centre on renewable energy for each university.

This programme is being deployed in three phases and funded by the Federal Government of Nigeria, the World Bank and the African Development Bank. On September 3, Federal Government of Nigeria commissioned Africa’s largest off-grid solar hybrid power plant at the BUK. Bayero University, Kano is the second project to be commissioned under Phase 1 of the EEP that will deliver clean and sustainable energy using solar hybrid coupled probably with gas-fired captive power plants.

The BUK commissioning included the launch of 11.41 kilometres of street lighting as well as a world class renewable energy training centre.

A major highlight of the event was the graduation of 20 female students who participated in the female science, technology, engineering and mathematics (STEM) students’ internship programme. The female students, who received practical training during the course of the project construction, were awarded certificates of completion.

“The Energising Education Programme is strategic to fulfilling Nigeria’s commitment to the Paris Agreement on Climate Change as it aims to reduce Nigeria’s carbon footprint using renewable energy technologies, in line with the Federal Government’s mandate and unwavering efforts to increase renewable energy,” Yemi Osinbajo, vice president of the Federal Republic of Nigeria said during the commissioning. He noted that this was part of the Next Level Roadmap.

Osinbajo pointed out that the installed 7.1MW decentralised solar hybrid power plant funded by the FGN’s green bond will supply over 58,000 students and staff with clean, safe and reliable electricity. “I am sure that the entire student body, management and staff of Bayero University are proud to be beneficiaries of this, most especially as the only Federal University in Kano State and one of the longest standing ones.”

Nigeria plans to reduce carbon emissions by 20 percent unconditionally and 45 percent with international support by 2030 to limit the damaging effects of climate change. Leveraging of renewable energy technologies is in line with the Federal Government’s mandate and

Centre: Anita Otubu, executive director at Rural Electrification Agency; Damilola Ogunbiyi, managing director of the Rural Electrification Agency with all twenty-one female STEM participants trained by Rural Electrification Agency who received certificates of completion for renewable energy training at the event.

related activities.

“The ultimate goal is to increase access to modern technical education in safe and illuminated learning environments, empower the girl child, and create jobs in the power sector value chain, amongst others,” Osinbajo said.

The project at BUK has created 182 energy related jobs from power system engineers to electricians as well as trained 20 young female STEM students with the skills to contribute to strengthening the energy sector.

Sale Mamman, the minister of power and coincidentally an alumnus of BUK noted that he was delighted to be part of the historic moment. Mamman said the Ministry Power’s policy specifically targets education to ensure that all federal universities, to begin with, have access to reliable electricity.

Notably, the Energising Education Programme was designed to involve students from project inception for project sustainability. “I am delighted to be back at my Alma Mater as we commission this 7.10 MW solar hybrid power plant, world class workshop and training centre and solar powered streetlights under the EEP. It was just a few years ago that I, too, was a student here without access to reliable electricity,” Mamman said. “I am privileged to take on this mantle to ensure that the policies established to promote electricity access in our country bring forth impactful and sustainable results.”

Damilola Ogunbiyi, managing director of the Rural Electrification Agency said it was a privilege to commission another university project, under Phase 1 of the Energising Education Programme (EEP), at Bayero University, Kano (BUK). “The EEP project at BUK is the second to be commissioned as we recently commissioned the first project - a 2.8MW solar hybrid plant at Alex Ekwueme Federal University, Ndufu-Alike Ikwo, and Ebonyi State on the 2nd of August 2019. It is noteworthy that this particular project here at Bayero University with an installed capacity of 7.1MW, is the largest off-grid solar hybrid power plant in Africa.” This furthers President

Buhari-led administration’s Economic Recovery and Growth Plan (ERGP).

According to Ogunbiyi, the Ministry of Power has focused on nurturing this emerging off-grid sector with the right policy initiatives aimed at providing access to power across Nigeria in rural communities, economic hubs and, in this case under the EEP, federal universities and university teaching hospitals.

“Under my leadership, the Rural Electrification Agency’s mandate under the Energising Education Programme is clear: to provide clean, reliable, safe and sustainable electricity to selected federal universities and teaching hospitals. We must rehabilitate existing electricity distribution infrastructure, illuminate university campuses for improved security and construct renewable energy training centres,” the REA boss said.

Ogunbiyi was glad that 20 BUK female students under the Female STEM Internship Programme under the tutelage of solar energy developers received hands-on field and classroom training through the course of the project’s implementation. She equally praised President Buhari for driving the initiative.

The Governor of Kano State, Abdullahi Umar Ganduje stated that the State is committed to fostering technical and practical training, therefore, the EEP programme is strategically aligned and would help build the State’s job creation and capacity building objectives. “This is an absolute privilege for the student body and management of Bayero University Kano, especially as one of the oldest Federal Universities in Nigeria and I am grateful it was earmarked to benefit from the Energising Education Programme.

“I commend this initiative of the federal government because energising education is energising the youth and once the youths are energised you are de-energising armed robbery, bandits, kidnapping and etcetera.

There is no doubt that it will have a multiplier effect on the social economic and will provide a conducive environment for the academic community.”

The Governor believes the STEM training facilitated by REA has impacted on female students in the state and erased the notion that women are not good in technical education.

“This has boosted their morale to see themselves of being capable in any field,” he said.

Ganduje commended the Rural Electrification Agency for its dedication in ensuring the project was delivered in its full capacity. “Now our students can study round the clock without fear of power failure or insecurity within the university campus, thanks to the reliable electricity and installation of 11.4km of streetlights across the campus. This is a testament to the Buhari Administration’s Next Level Roadmap which is delivering results through best practice infrastructure development.”

In his brief remarks, Muhammad Yahuza Bello, vice-chancellor, Bayero University, said he was delighted about the history made by his institution. “The Federal Government of Nigeria’s EEP project could not have been implemented at a better time for BUK, where over 55,000 students and 3,000 staff will now experience teaching, learning and research in a more conducive and safer environment with access to clean and reliable electricity.”

Bello said the Energising Education Programme supports BUK’s mission to address developmental challenges in Nigeria, through cutting-edge research, knowledge transfer and training. “This is a joyous moment for not just our university, but also for Kano State, Nigeria’s second largest industrial centre. I am very excited for the expected positive impact this initiative will have in transforming the way we teach, learn, and live on our campus. Also, under the EEP, students will be responsible for the project’s sustainability thanks to the technical and practical training our students received through construction.”

Evangelos Kamari, Managing Director, METKA West Africa Limited, the EPC contractor said the BUK solar hybrid power plants installations are state-of-the-art and “will result in carbon dioxide savings of 108,875,120Ibs, a feat we as green contractors are proud of.”

Wednesday 11 September 2019

BUSINESS DAY

PENSION today

25

In Association With

Employees falling back on pension savings for survival over job loss ‌as 10,673 unemployed make withdrawals in Q2 Modestus Anaesoronye

T

he challenging economic environment and survival difficulties being faced by small to large businesses is worsening the social welfare of many Nigerian households, as employee who lose job continue to fall back on their pension savings for survival.

While the increasing level of vices as a result of youth unemployment have not been contained by government, creating serious concern among the populace, a future danger is in the offing when people increasingly spend pensions ahead of retirement.

Statistics made available by pension authorities, the National Pension Commission (PenCom) reveal that during the second quarter of 2019 approval was granted for payment of N5.28 billion to 10,673 Retirement Savings Account (RSA) holders who were under the age of 50 years, and were disengaged from work and were unable to secure another job within 4 months of disengagement.

The figure in the first of 2019, shows that 10,733 RSA holders were granted approval for payment, taking away N4.5 billion.

According to the Commission, the cumulative total number of RSA holders who have so far collected their benefits for temporary loss of job was now 324,141 and were paid a total of N113,21 billion being 25 percent of the balances of their RSAs as prescribed by the Pension Reform Act 2014.

A further analysis shows that the private sector accounted for 95.33 percent of those who benefitted from these payments while the public sector accounted for 4.67 percent, underling the difficulty being faced by businesses in that space that have been squeezed by high cost of electricity as they run on diesel generators to carry out operations, other infrastructures, as well as, high interest rates on loans and poor access to finance.

During the Second quarter 2019 under review, total monthly pension contributions received from both the public and private sectors was N5.45 trillion. This

shows an increase of N169.90 billion representing 3.22 percent growth over the total contributions as at the end of the previous quarter.

During the second quarter of 2019, the total contributions received from the public sector amounted to N72.42 billion (42.63 percent) while the private sector contributed N 97.48 billion (57.37 percent). A review of the aggregate total contribution received shows that N2.73 trillion or 50.09 percent of the contributions came from the public sector, while the private sector contributed the remaining 49.91 percent (N2.72 trillion).

Section 16(5) of the Pension Reform Act 2014 says that any employee who disengages or is disengaged from employment before the age of 50 years and is unable to secure another employment within four months ofsuch disengagement may make withdrawal from his retirement savings account in accordance with the provision of section 7(2) and 3 of this Act. “Where a Retirement Savings Account (RSA) holder is temporarily unemployed before the retirement age (i.e. he/she is voluntarily/involuntarily disengaged, downsized, retrenched etc.) and has

remained unemployed for a period of at least four (4) months without securing another employment, such an individual may apply for 25 percent of his/ her current RSA balance, one of the PFAs explained in its website.

As at the end of third quarter 2018, unemployment rate in Nigeria increased to 23.10 percent from 22.70 percent in the second quarter of 2018, averaging 12.31 percent from 2006 until 2018, reaching an all time high of 23.10 percent in the third quarter of 2018 and a record low of 5.10 percent in the fourth quarter of 2010.

Joshua Ezeala, who confirmed development said really, the current rise in job lose has serious implication on our business. “Firstly, it would have impacted on our investible fund when a lot of people are coming to access 25 percent of the funds in their RSA, and secondly, is that the number of enrolment would be affected if unemployment rate is high.

It will have impact on the pension funds, particularly if there are many who could not secure another job after some time.

The objectives of the Pension Scheme is to ensure that every person who worked in either the public Service of the Federation, Federal Capital Territory, States and Local government or the Private Sector receives his retirement benefits as and when due ; and to assist improvident individuals by ensuring that they save in order to cater for their livelihood during old age.

The provisions of this Act shall apply to any employment in the public service of the Federation, the public Service of the Federal Capital Territory, the Public Service of the state, the public service of the local governments and the private sector.

In the case of the Private Sector, the Scheme shall apply to employees who are in the employment of an organization in which there are 3 or more employees.

Notwithstanding the provision of subsection (2) of this section, employee of organization with less than three employees as well as self-employed persons shall be entitled to participate under the scheme in accordance with guidelines issued by the commission.

IS NOW RC634453

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

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

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

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

26

Wednesday 11 September 2019

BUSINESS DAY

insurance today

E-mail: insurancetoday@businessdayonline.com

Post re-capitalistion: The big game on micro insurance for increased penetration Modestus Anaesoronye

C

ome June 30, 2020 when the insurance industry recapitalization would have come to an end, the sector is expected to bubble with a lot of funds that will enable surviving players undertake strategic initiatives to enhance their services and also make profit for shareholders.

The exercise is expected to cover the shortfall of approximately N169.1 billion, where the current capital is at estimated N300 billion, with the shortfall representing the different between the existing capital and the new capital, according to Coronation research.

Given the industry penetration rate of 0.31 percent in a country of over 170 million people, the potential is hugely untapped.

Everyone who has looked at the market including experts and researchers have pointed to the fact that the growth of the industry lies in exploring the micro insurance space, as this will be the right platform to educate and build trust among the populace.

According to Guy, Czartoryski, head, Coronation Research, “to position the sector for radical growth, one must consider the lessons learned in Asian markets of India, and also in West Africa Ghana which shows how insurance can be rolled out to tens of millions of customers.

He said that cooperation between regulators is critical, as are distribution partnerships with banks and telecom companies.

“Fresh capital is necessary for develop-

ment, but a fresh strategic approach is required to reach the industry’s potential, and this he said is rolling out products and strategies that unbundles micro insurance consumers.

Pius Apere, managing director/CEO, Achor Actuarial Services Limited had asked the National Insurance Commission not to throw away companies that may not meet the recapitalization requirement, as he believes that they could be useful in unbundling the micro insurance space, which he said hold key to growth of the industry.

Apere said that the current capital requirement for micro insurance license prescribed

by NAICOM, put between N15million to N200 million for life business, and N25 million to N400 million for general business, depending on the coverage area and space is small and not enough to deepen penetra-

tion, or even become profitable companies.

“The above capital is not enough to acquire the necessary infrastructural technology and hire and train large number of sales agents to sell the products, so converting few existing conventional insurers with their already developed infrastructure and human capacity to micro insurance will make the miracle, Apere said.

The question is, ‘what role is the new ‘big’ capital going to play in developing the micro insurance market’?

Are conventional insurance players allowed by law to do micro insurance?, now that the ANSWER IS NO, how do they get into doing micro insurance?

Does this mean that every conventional player that wants to play in micro space needs a micro insurance license? This may be the thinking of forward looking companies

like Consolidated Hallmark Insurance Plc that has applied for micro insurance license ahead of the new capital requirement in the industry. This may be the way to go.

NAICOM had early last year given June 30, 2018 deadline to non-life insurance companies to unbundle microinsurance products for standalone license.

At the moment, only two stand alone applications have been approved, which according to expert are not sufficient to achieve the strategic intent of the micro insurance project, which is to reach the mass of uninsured and increase penetration.

The Revised Microinsurance Guideline which became effective 1st January, 2018 further stated that, “No person shall commence or carry on any class of Microinsurance business without being registered or authorized by the Commission.

Section 10, sub section 1 and 2 of the revised Microinsurance guidelines released

by NAICOM said “Existing Conventional microinsurers shall wind down their window operations for non-life classes within 18 months from the effective date of these guidelines and in not later than 24 months transfer the life classes to a dedicated microinsurance company.”

Low-income households and micro, small and medium enterprises are particularly vulnerable to risks, be they related to health, agriculture, property or death. These risks often carry heavy financial implications as individuals, businesses and households attempt to deal with them. Since very few of these groups have access to efficient and effective formal risk management and social protection mechanisms, recuperating losses and recovering from shock is at best difficult, and more often impossible.

According to the microinsurance network, Microinsurance provides poor and low-income households with the means to protect themselves against the effects of risk.

The role of microinsurance must therefore be viewed alongside government provision of basic health services, employment and education, etc., all of which go towards alleviating poverty.

There are many microinsurance schemes around the world today, but they still only meet a fraction of the overall need. It is difficult to estimate how many people are still uninsured or inadequately insured from risks.

AIICO announces the appointment of Olusola Ajayi as ED Modestus Anaesoronye

T

he Board of Directors of AIICO Insurance Plc has announced the appointment of Olusola Ajayi as executive director(ED) following a successful assessment and due approval by the National Insurance Commission (NAICOM).

Olusola is an experienced business leader with over fifteen years’ leadership positions in management consulting and insurance in Nigeria and the United Kingdom. He joined AIICO in 2009 as head of the Business Strategy and Transformation teams.

In 2013, ‘Sola assumed leadership of

the retail life insurance business, and has led the transformation of the agency business, by deploying cutting-edge solutions and enabling capabilities which has resulted in significant growth in the company’s annual premiums and asset under management (AUM).

Prior to joining AIICO, he worked at the prestigious consulting firm Accenture (Lagos) in the Financial Services market unit, before joining Deloitte Consulting (London, UK). As a business consultant in both firms, he supported/led business transformation initiatives in Strategy, Process Optimization and Technology Deployments.

In this new position, he will oversee the Group Retail Division, with a mandate to drive growth across the group retail businesswww.businessday.ng

Olusola Ajayi, ED, AIICO Insurance Plc

https://www.facebook.com/businessdayng

es and retaining AIICO as an industry leader.

Olusola currently serves as Chairman of the Board of AIICO Multishield Limited, the Group’s Health Maintenance Organization (HMO). He holds an MBA from INSEAD and obtained his first degree in Chemical Engineering from the University of Lagos. Sola is a certified Project Manager as well as a Senior Member of the Chartered Insurance Institute of Nigeria.

AIICO Insurance Plc., a leading composite insurer in Nigeria, commenced operations in 1963. AIICO provides life insurance, health insurance, general insurance, wealth management and pension management services as a means to create and protect wealth for individuals, families and corporate customers. @Businessdayng

Wednesday 11 September 2019

BUSINESS DAY

27

insurance today E-mail: insurancetoday@businessdayonline.com

Takaful: Let those who have the licence play up the market …potential consumers still ignorant Modestus Anaesoronye

W

ith approval in principle granted to Cornerstone Takaful Insurance Company Ltd and Salam Takaful Insurance Company Ltd as composite takaful operators to transact both family and general takaful businesses in Nigeria, there are now four companies in the space with Noor Takaful and Jaiz Takaful having licensed in 2016.

All of these were yet to translate to any visible activity in that space, and closer interaction with potential consumers still show high level ignorance, not because there is reluctance but because they have not been engaged and no any strategic effort found in terms of awareness creation and enlightenment.

So, players in these space must lighten up the market with activities for awareness and education, and this is the only way efforts which the regulator, the National Insurance Commission(NAICOM) to deepen financial inclusion and penetration can make meaning and yield expected result, market observers have said.

Babatunde Omosola, of

the Oyo State Chapter of the CIIN had said SouthEasterners have embraced Takaful insurance products because of its simplicity, calling for strategic investment by operators.

He noted that though Takaful which means joint guarantee or share responsibility in Arabic, operates in according to Islamic laws, the products are designed to carter for Muslims and non- Muslims, adding that the products are meant to encourage saving culture and build capital, over a period of time to meet personal or business needs.

He said: “Under Takaful plan, you can save regularly for a fixed period that is convenient for you, and the accumulated targeted amount can be used to fund obligations such as purchase of land, house, marriage or hajj.

It could also be used to meet other long term financial objectives, such as retirement, children education, travelling expenses as well as expected commitment.”

He noted that reports have shown that in many countries, Takaful products have been bought by non Muslims due to some of its attractive features, which are not offered under conventional products, adding that the implication of this trend is that there

is a promising market and potential growth for takaful business in Nigeria.

The expert had noted that in the Eastern part of the country, the product is a hot cake. “The attraction of Easterners, he observed was the profit sharing characteristic as well as protection under the poll, which is nonexistent with the conventional insurance.

For the northern part of the country, he said the attraction is the cultural belief. The cultural belief of the north is another factor said to be driving the sales of the products, as investment of Takaful funds is done in compliance with sharia law, which prohibits gambling and profiteering and consumption of alcohol. The funds are not

invested in economic activities that negate Islam and Sharia, including brewing alcohol.

NAICOM how has said says it’s planning to license more Takaful Insurance companies, as this is a major expansion and penetration strategy under its Market Development and Restructuring Initiative (MDRI), targeted at reaching the uninsured population as well as those who avoid conventional insurance as result of their religious belief.

The Commission at the introduction of Takaful and Micro insurance in the Country said it was an attempt to reach the segment of the market that is either hitherto reached or not comfortable with the

conventional insurance products.

The Commission therefore urges people across the country to embrace Takaful for their protection against risks, adding that Takaful is both ethical financing and cooperative risk protection methods that are superior alternatives, because they reinvigorate human capital, human solidarity, emphasize dignity, community self-help and economic self-development, generating manifold benefits which appeal not only to Muslims but all.

The Commission also said it’s elated at this positive development which is a bold step towards the growth and development of the Takaful market in Nigeria.

According to NAICOM, the development of Takaful operations in Nigeria could not have been achieved without the provision of an enabling framework for its takeoff, stressing that the Commission in collaboration with development partners such as Enhancing Financial Innovation & Access (Efina) and GIZ developed and released the Takaful Insurance Guidelines to enable smooth operation.

The Commission in March 2015 inaugurated the Takaful Advisory Council of Experts (ACE) saddled with the responsibility of review, endorsement of policies and guidelines related to the principles underpinning Takaful insurance operation. The ACE is made up of eminent scholars with deep knowledge of Islam and Sharia,” he said The insurance product line which was awakened by the development of economic activities and establishment of Islamic banks in the seventies and known as joint guarantee or share responsibility in Arabic operates according to Islamic laws. The products are designed to carter for Muslims and non- Muslims, and are meant to encourage saving culture and build capital, over a period of time to meet personal or business needs.

Reinsurance Broker unveils new technology to help clients in next year’s renewal

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einsurance Broker, Aon has announced the launch of auction technology which it is making available for clients to use at the upcoming January 2020 reinsurance renewals.

The company said that it will continue to invest in technology developments as a way to provide additional options to help secure pricing for its insurance ceding company clients.

Andy Marcell, CEO of Aon’s Reinsurance Solutions business, commented on the

news, “We constantly strive to transform the way we do business and enhance the placement experience for our clients. Our investment in technology gives insurers the power to choose how to secure robust reinsurance protection while continuing to benefit from their Aon broker’s commitment to client advocacy.”

Aon said that the auction technology can help clients to reduce the timeframe surrounding pricing negotiations and contract certainty.

The platform will alwww.businessday.ng

low blind-bidding for both non-concurrent (where reinsurers receive different pricing based on the quotes provided) and concurrent placements (where the technology helps by finding a consensus bid, so each reinsurer gets the same price across the layer).

Aon said insurers will continue to benefit from access to its brokers as part of the auction process. Brokrs will guide and manage the entire reinsurance placement for clients, but Aon said it will reduce the expense

of alternative distribution channels.

Trading partners will access auctions via the brokers ABConnect Placements reinsurance placements e-trading platform.

Aon said this means a single platform that provides data and placement across a reinsurer’s entire portfolio, whether through an auction process or a traditional reinsurance placement.

Brokers were always destined to add placement technologies to their toolboxes, as they need to compete with

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other independent providers.

Offerings such as Tremor’s programmatic risk auction and placement marketplace are already gaining traction, having placed a number of programs and received broad backing from industry participants.

It raises interesting issues around the use of algorithms for pricing that are set by a broking house, but the result of this should be increased transparency, as we’re sure cedants will need to ask a lot of questions before placing business through the system. @Businessdayng

The question of whether the placement of reinsurance and the transaction itself could eventually move further out of the control of brokers remains, as technology provides input to the optimisation of placing risk with capital.

But in coming out early with an offering Aon aims to demonstrate how this can benefit its clients, which should only boost prospects for others creating auction and exchange technology platforms for the reinsurance and risk industry.

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Wednesday 11 September 2019

BUSINESS DAY

Harvard Business Review

MANAGEMENTDIGEST

The #MeToo Backlash

I

n the fall of 2017, when The New York Times and other media began reporting on widespread sexual harassment and assault by powerful male entertainment figures, many people were heartened.

The conventional wisdom was that bringing the issue to light and punishing those responsible would have a deterrent effect. Leanne Atwater, a management professor at the University of Houston, had a different response. “Most of the reaction to #MeToo was celebratory; it assumed women were really going to benefit,” she says. But she and her research colleagues were skeptical. “We said, ‘We aren’t sure this is going to go as positively as people think — there may be some fallout.’”

In early 2018 the group began a study to determine whether their fears were founded. They created two surveys — one for men and one for women — and distributed them to workers in a wide range of industries, collecting data from 152 men and 303 women in all.

First the researchers sought to understand whether men and women held different views about what constitutes sexual harassment. They took this tack because men accused of the behavior frequently claim they didn’t understand how their actions were being perceived, while women who report it are sometimes deemed overly sensitive. The surveys described 19 behaviors — for instance, continuing to ask a female subordinate out after she has said no, emailing sexual jokes to a female subordinate and commenting on a female subordinate’s looks — and asked people whether they amounted to harassment. For the most

part, the two genders agreed.

For the three items on which they differed, men were more likely than women to label the actions harassment. “Most men know what sexual harassment is, and most women know what it is,” Atwater says.

“The idea that men don’t know their behavior is bad and that women are making a mountain out of a molehill is largely untrue. If anything, women are more lenient in defining harassment.”

Next the researchers explored the incidence of harassment in the workplace.

Sixty-three percent of women reported having been harassed, with 33% experiencing it more than once. A woman’s age, the supervisor’s gender, whether the woman filled a blue-collar or a white-collar role, and whether she was married had no bearing on the likelihood that she had been harassed.

Just 20% of women who had been harassed reported the

episode; among those who didn’t, the chief deterrents were fear of negative consequences and apprehension that they would be labeled troublemakers. Five percent of men admitted to having harassed a colleague, and another 20% said that “maybe” they had done so.

The study’s biggest surprise has to do with backlash. Respondents said they expected to see some positive effects of the #MeToo movement: For instance, 74% of women said they thought they would be more willing now to speak out against harassment, and 77% of men anticipated being more careful about potentially inappropriate behavior. But more than 10% of both men and women said they thought they would be less willing than previously to hire attractive women. Twenty-two percent of men and 44% of women predicted that men would be more apt to exclude women from social interactions, such as after-work drinks;

and nearly one in three men thought they would be reluctant to have a one-on-one meeting with a woman. Fiftysix percent of women said they expected that men would continue to harass but would take more precautions against getting caught, and 58% of men predicted that men in general would have greater fears of being unfairly accused.

Because the data was collected soon after the #MeToo movement gained momentum, and because much of it focused on expectations, the researchers conducted a follow-up survey (with different people) in early 2019. This revealed a bigger backlash than respondents had anticipated.

For instance, 19% of men said they were reluctant to hire attractive women, 21% said they were reluctant to hire women for jobs involving close interpersonal interactions with men (jobs involving travel, say) and 27% said they avoided one-on-one meetings with female colleagues; only one

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of those numbers was lower in 2019 than the numbers projected the year before. The researchers say that some of the behaviors are manifestations of what is sometimes called the Mike Pence rule — a reference to the U.S. vice president’s refusal to dine with female colleagues unless his wife is present. “I’m not sure we were surprised by the numbers, but we were disappointed,” says Rachel Sturm, a professor at Wright State University who worked on the project. “When men say, ‘I’m not going to hire you, I’m not going to send you traveling, I’m going to exclude you from outings’ — those are steps backward.”

The researchers have several recommendations for organizations looking to reduce harassment, a number of which involve prevention training. Their study shows that traditional sexual harassment training has little effect, perhaps because much of it focuses on helping employees understand what constitutes harassment, and the data shows they already do.

Instead, the researchers say, companies should implement training that educates employees about sexism and character. Their data shows that employees who display high levels of sexism are more likely to engage in negative behaviors, and they believe training can reduce those levels. Their data also shows that people of high character — those who display virtues such as courage — are less likely to harass and more likely to intervene when others do.

“Though character building in organizations is on the cutting edge and consultants are just learning how to do this, there are training resources available,” the researchers write.

Wednesday 11 September 2019

Harvard Business Review

BUSINESS DAY

29

MANAGEMENTDIGEST

To build an inclusive culture, start with inclusive meetings KATHRYN HEATH AND BRENDA F. WENSIL

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CONNECTING f an organization desires a more inclusive culture, meetings are the place to start. But, from what we’ve seen, executives often miss the mark.

Our 2012 study of 360-degree feedback collected from over 1,000 female executives told us why some people feel shut out in meetings. We learned that women are often uncomfortable speaking up and are more than twice as likely to be interrupted in group dialogue — particularly in industries and organizations that are maledominated.

Our more recent coaching experiences reveal that men from minority groups feel similarly. If organizations fail to address this issue, women and minorities will remain on the periphery, and creativity and innovation will suffer.

Setting a diverse workforce up for success requires a commitment to the practices of inclusion. We coach leaders to focus on three key areas: 1. CUSTOMS Focus on structural behaviors that make people feel comfortable, such as sending a

premeeting email to inviting attendees to come “ready to share as well as listen.”

Leaders should demonstrate “gracious authority” — a polite demeanor that nonetheless leaves little doubt about who is in charge. Welcome people by name as they enter the meeting room, and make sure the seating accommodates everyone.

During the meeting, let people know they can speak openly and offer dissenting opinions without fear of retribution. If

you have introverts in the room, start with a brief round robin activity that helps the attendees get to know one another better.

2. CONDUCT Leaders need to manage conduct. In many cases, one alpha individual dominates the conversation. In other cases, there’s a group of allies who support the same ideas and speak up inordinately, drowning out differing viewpoints.

It’s your job to step in. Here’s how:

— Set clear ground rules and stick to them. This puts offenders on notice and makes all those in attendance aware of their rights and responsibilities.

— Watch for dominators and interrupters. If someone tries to control the dialogue, interject and redirect the conversation back to the broader group.

— If someone is interrupted, step in quickly. You might say, “Back up. I’m intrigued by what Luke was telling us. Luke, can you finish your thought?”

3. COMMITMENT Most organizations have already committed to diversity in hiring practices and creating diverse teams. The same needs to happen for inclusion. If you’re a leader, start with yourself: — Explicitly define inclusivity.

— Be clear and transparent about what it looks like in meetings.

— Model the behavior you expect to see from others.

— Hold teams accountable for following through every time.

Leading an inclusive meeting is a skill you have to develop and refine. Find out what’s working and what isn’t by asking your team members for feedback — either at the end of your meetings, or with an email or app that allows anonymity.

Meetings have morphed over the years. Yet they’re still the prime venue to build and foster a fully inclusive culture that engages and equips people to do their very best at work. As a leader, it’s your job to make sure they do.

• Kathryn Heath is a principal of Flynn Heath Holt Leadership. Brenda F. Wensil is a partner there.

Being nice in a negotiation can backfire tiations are a combination of value-creating and value-claiming, of making the overall pie bigger and securing a slice of it for ourselves. Negotiators should recognize that being nice may make it more difficult to claim a lot of value, particularly in a purely competitive context.

MARTHA JEONG, JULIA A. MINSON, MIKE YEOMANS AND FRANCESCA GINO

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egotiation experts have long confirmed the intuition that being warm and friendly pays off at the bargaining table, leading us to gain concessions and capture a larger chunk of value. Similarly, in our own research, we’ve found that people tend to believe niceness will buy them better deals. But when put to the test, this prediction turns out to be wrong.

Across four experiments with more than 1,500 participants, we tested the economic and interpersonal implications of being warm and friendly in a negotiation. One of our studies was a field experiment conducted via Craigslist.com. We had a research assistant using a genderneutral name (“Riley Johnson”) send messages from a fictitious Gmail account to actual sellers of smartphones on the platform.

We randomly varied Riley’s communication style in the initial message, but Riley always asked for an 80% discount from the sellers’ original price. We tracked whether sellers were willing to make a counteroffer lower than their original price and, if they did, we measured that discount. “Riley” emailed 775 sell-

ers, sending warm messages to half of them and tough messages to the other half.

We found that warm and friendly messages were just as likely to elicit a counteroffer as tough and firm messages (around a 31% probability in either case).

But whereas firm messages got more active rejections, or outright noes (24%), than warm messages (14%), warm messages were more likely to be completely ignored (54%) than firm messages (45%). And in this kind of online context, it’s arguably better to get an active rejection than to simply be ghosted, because with a rejection you at least get a response that you can then try to www.businessday.ng

negotiate on.

When sellers did offer a discount, it was larger when Riley’s message was tough and firm. Sellers were more willing to accept the 80% discount offer when it came from a tough buyer (about 13%) than from a friendly buyer (less than 9%). The results suggest that being firm can sometimes lead to better deals, at least in a distributive negotiation, than being warm.

We subsequently conducted a laboratory study to observe the entire negotiation process. We brought in 140 participants and paired them up to negotiate together anonymously online. They were randomly assigned to play

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the role of either a buyer or seller, and they were given incentive to reach the best deal for a bowl.

Buyers were told to make the same first offers and to use different communication styles.

Warm and friendly negotiators ended up paying 15% more for the same item as compared with tough and firm negotiators. This is because sellers made more aggressive initial counteroffers and won more concessions from friendly buyers over the course of the 10-minute negotiation.

Although our findings highlight the clear economic costs of being “warm and friendly,” they do not imply that everyone should become a jerk. All nego@Businessdayng

• Martha Jeong is an assistant professor of management at the Hong Kong University of Science and Technology. Julia A. Minson is an assistant professor of public policy at the Harvard Kennedy School. Mike Yeomans is a postdoctoral fellow in economics at Harvard University. Francesca Gino, a professor of business administration at Harvard Business School, is the author of “Rebel Talent.”

30

Wednesday 11 September 2019

BUSINESS DAY

TRANSPORTATION Motoring

RailBusiness

ModernTravel

Roads

Toyota keen on prioritising efficiency, not volume … Not perturbed about global top-spot

MIKE OCHONMA

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MIKE OCHONMA Transport Editor

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n today’s corporate world, many organisations strive to maintain a fair balance between where they are and where they are headed to in terms of returns on investment and volume so as not to compromise operational processes and efficiency to maintain their corporate bottom line and surpass the expectations of their customers and individual and institutional investors.

Back in 2008, Toyota Motor Company feared turning into the next General Motors when it passed the U.S. automaker to become the world’s largest, by annual volume.

This time around, no doubt Akio Toyoda; the CEO of Toyota and his managers will ber more relieved now that the Volkswagen group has passed Toyota to occupy the top spot a few years later. The Japanese giant is not interested in wholly owning more brands.

Rather, it is keen on operationalizing processes and maximising efficiency to be among the gloal top three.

Currently, the VW Group now is leading the march from internalcombustion engines to electric vehicles but being number one according to industry followers doing it any favours.

Today, electric and automated vehicle technology or self-driving electric city cars are cutting into every major automaker’s bottom line, let alone one that has suffered more than $30 billion in fines so far in the U.S. and European Union as a result of the diesel cheating scandal.

GM and Ford Motor Company are paying for EV/AV development

with fat truck and SUV profits. On the other hand, Toyota, known for efficiently making mainstream cars and trucks that last forever has long been a profit-making machine, churning out high-volume models on its own while it teams up with smaller manufacturers for niche segments.

As a forward thinking automaker that prioritises efficiency Toyota is seen as a sort of Japanese auto industry godfather, stepping in when the smaller companies are in trouble, such as when GM sold off its minority interest in Subaru and Isuzu after the American automaker’s 2009 bankruptcy.

It would be recalled that not long ago, the leading Japanese automaker took a stake in Fuji Heavy Industries (now officially called Subaru) and they jointly developed the Toyota 86 Subaru BRZ.

The Subaru Ascent was supposed to be built on the Highlander platform, which would have meant an inline-four and maybe a V-6, instead of its turbocharged flat-four engine, but at the end Subaru developed its big SUV itself.

Japan’s government remains protective of its singular auto industry. Global industry follwers believe that, if its locally dominant automaker, Toyota, can smoothen out market fluctuations by rationalizing assembly-plant output and maintaining a stable supply chain with these alliances, Japan might remain the only developed economy that can survive the uncertainty of the 2020s auto industry.

It is not that, the automaker has not heard its fair share of lows from time to time. For some time, Toyota has come under criticism

for choosing to partner with BMW towards the development of the new Z4-based Supra sports car, but it has long favoured sharing manufacturing and development resources. Yamaha built the 196770 2000GT sports cars for Toyota, and the two have long collaborated on engine development and manufacturing, motorsports, and marine engines.

Lately, Toyota struck a marriage of convenience deal with Suzuki in the area of cross-border funding in the vital areas that both parties are convinced will further their business interest.

Under the capital alliance announced recently, Toyota will purchase $908 million in Suzuki shares, or a 4.8 percent stake, and Suzuki will purchase $455 million in Toyota shares, or about 0.2 percent.

Carmakers team up to prevent child heatstroke deaths MIKE OCHONMA

B

y the 2025 model year, nearly all new vehicles sold in the US and some parts of the global automotive market will come with electronic alerts to remind people to not leave children behind in the back seats.

This is because twenty carmakers representing 98 percent of new vehicles sold have agreed to install reminders in an effort to stop heatstroke deaths. So far this year, 39 children have died in the US after being left alone in cars during hot weather.

In what could go down as a warning signal to families, the advocacy group Kids and Cars says a record 54 children were killed last year.Vehicles would give drivers audible and visual alerts to check

Kia Pegas sedan arrives Nigeria 2020

back seats every time they turn off the ignition.

According to David Schwietert, interim CEO of the Alliance of Automobile Manufacturers (AAM); www.businessday.ng

“Automakers have been exploring ways to address this safety issue, and this commitment underscores how such innovations and increased awareness can help

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children right now”.

AAM is a trade group that includes a dozen large car companies. Members of Global Automakers, an association of manufacturers based outside the US, also are taking part.

Carmakers say the voluntary agreement will get the alerts installed faster than a government regulation, which takes four to eight years. Only Tesla didn’t agree to the reminders, but it is not a member of either trade association.

Several carmakers already are offering such a feature. General Motors, for instance, has a reminder on all of its four-door sedans, trucks and SUVs starting with the 2019 model year. The system issues alerts if the rear doors were opened before the start of a trip. Hyundai has pledged to make a similar system standard on its vehicles by 2022. @Businessdayng

ollowing the successful launch of the new Kia Pegas in Jordan recently, the new model is expected to hit the Nigerian market by the first quarter of 2020.

Entirely new to the region, the Kia Pegas is a smart, spacious, economical and highly practical option for young families in urban areas. It features a big personality, compact dimensions, and generous storage and cabin space.

The Kia Pegas boasts a stylish exterior design and a spacious interior, as well as an array of convenience features and technologies to please B-segment sedan customers. Built by Kia in China, the car was introduced to several international markets in 2017.

According to James Kim, head of Kia’s Middle East and Africa regional headquarters, “Pegas will be a great option for young families looking for a practical car that delivers the perfect combination of comfort, space, and the latest technologies’’.

Kim believed that, this important new model will enhance the diversity of Kia’s model line-up in the region and will further strengthen the brand’s image. As the newest arrival goes on-sale in the Middle East, Kia now offers customers a greater choice of high-quality vehicles than

ever before.”

Flaunting stylish, aerodynamic exterior design, Pegas offers buyers in this class a uniquely stylish design, with sculpted body panels and bold character lines complemented by a striking color palette and a carefullybalanced sedan silhouette. The aerodynamic front of the Pegas, with a drag co-efficient of just 0.29 Cd, presents a bold ‘face’ to the world.

Its deep bumpers incorporate sporty air curtain intakes in each corner, and a large trapezoidal air intake. The wide ‘tiger-nose’ grille extends into the headlamps, enhancing the sense of width and stability.

Viewed from the side, the profile of the Pegas gives it a finely-balanced silhouette. Its definitive character lines give the impression of motion, even while it sits stationary. The relatively long wheelbase and sloping tailgate visually enhances the length of the Pegas.

The rear of the car is characterized by its sedan tailgate, with a subtle yet sporty ducktail profile to the trailing edge of the trunk lid and a pair of neat rear combination lamps.

Depending on market, the Pegas is offered with a choice of up to seven paint colors, ensuring there is a color for every personality. The car runs on 14-inch steel or aluminum alloy wheels.

Inside, the cabin of the Pegas offers occupants maximum space and convenience. The center fascia has been designed to enhance ease-of-use, with many of the car’s functions controlled with clear, ergonomic buttons. It has space, convenience and technology and a capacious trunk.

Wednesday 11 September 2019

BUSINESS DAY

31

TRANSPORTATION Motoring

RailBusiness

ModernTravel

Roads

TCAN set agenda on functional rail lines … Lauds Amaechi’s return, Saraki’s appointment

MIKE OCHONMA

A

MIKE OCHONMA Transport Editor

T

ransport Correspondents Association of Nigeria, TCAN has tasked the federal government on the need to construct more rail lines across the country as well as speed up the construction of the standard gauge rail project to suit the change mantra.

The association also lauded President Muhammadu Buhari administration for appointing Rotimi Amaechi and Gbemisola Saraki as the minister of transport and minister of transport respectively.

Appreciating president Buhari on the choice of the two ministers, Transport Correspondents Association of Nigeria chairman, Augusta Uchedinunuor expressed confidence that many pending projects would be completed as well as another ones springing up for better Nigeria.

She stressed that the assemblage of a star studded team in the duo of Rotimi Amaechi and Gbemisola Saraki reflects the unflinching commitment of the present administration to take the nation’s transportation sector to the NEXT LEVEL agenda.

According to her, we believe Saraki will also bring her experiences and competence to bear in supporting Amaechi who has, from the outset when he joined the Buhari government in 2015, showed a great zeal and passion for the transportation sector.

“With Amaechi and Saraki in

the saddle, our nation’s transportation sector can only get better.

We urge the duo to draw up a roadmap to deliver the country a transportation sector that every Nigerian will be proud of.

The completion of the Lagos - Ibadan project will boost economic growth and to a large extent reduce traffic gridlock that has remained a regular feature of Apapa and Tin can Island seaports.

Augusta Uchedinunuor said that, the inclusion of the extension of the ongoing construction

of standard gauge railway line to Apapa as an addendum by the present administration bears testimony to the fact that government intends to reduce the cost of doing business at our ports”. She added.

The TCAN boss expressed hope that, the minister will accomplish the plan to extend the Warri to Itakpe standard gauge railway line to Abuja and Warri port.

She commended the decision to establish a manufacturing factory for coaches at Kajola, Ifo area of Ogun state as well as establishment

Flights grounded as 4000 BA pilots down tools

of the University of Transportation in Daura, Kastina State, which according to her will add to the rail transportation system value-chain.

A ground-breaking ceremony of the Lagos-Ibadan standard gauge rail project took place March 7, 2017, and the railway was scheduled for completion in December 2018. Construction was delayed by heavy rains last year, and the federal government had to deploy soldiers to protect the railway workers from hoodlums and armed robbers.

total of 4000 pilots represented by the British Airline Pilots Association at British Airways have begun a two-day strike as tens of thousands of passengers have been told not to go to airports. Most travellers have made alternative arrangements.

Pilots walked out at midnight in a dispute over pay and conditions.

It is the first pilot strike in the history of the airline, which is celebrating its centenary this year.

Both the carrier and union have said they are willing to renew talks, while British prime minister, Boris Johnson, last week urged them to “sort out” their differences.

Nonetheless, the vast majority of British Airways flights taking off from the UK on Monday and Tuesday have been cancelled, while there was also a knock-on effect to flights on Sunday, because planes and pilots needed to be in position for prior and subsequent journeys.

Dozens of flights were cancelled, and further unforeseen cancellations could happen today, the airline said.

Almost all of the 1,600 flights that were due to fly will be grounded.

In a statement, British Airways said: “We understand the frustration and disruption Balpa’s strike action has caused you. “After many months of trying to resolve the pay dispute, we are extremely sorry that it has come to this.

“Unfortunately, with no detail from Balpa on which pilots would strike, we had no way of predicting how many would come to work or which aircraft they are qualified to fly, so we had no option but to cancel nearly 100 per cent our flights. “We remain ready and willing to return to talks with Balpa.” The statement said.

N24m new Mercedes CLA is technologically, digitally enhanced MIKE OCHONMA

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eststar Associates Limited, authorized General Distributor of Mercedes-Benz in Nigeria has announced the arrival of the first units of the all-new CLA into the market.

The all-new CLA comes with striking features that emphasize making an already great car even better; the new dynamic design underlines the coupé character with its stretched form and design elements such as the bonnet with powerdomes or the rear license plate which has been moved down.

Dealership insists that, it is the most intelligent and emotive car in its class as the automaker continues its dominance in the compact car class with the introduction of the model.

Building on the success of the first generation which sold over 750,000 units worldwide, it represents an improvement in an already crowded auto market.

It comes with more space at many spots in the interior; at the front., with the headroom has increased by 17 mm and elbow room by 35 mm, and thanks to a wider opening (+262

mm), the boot compartment is now more convenient to load than the predecessor model.

The Mercedes-Benz User Experience (MBUX) has been updated with an interior assistant which recognizes operating requests from movements, this makes various comfort and MBUX functions even simpler and more intuitive.

Lastly, the all-new CLA relies on four-cylinder petrol engines which in comparison to the previous generation, are characterized by significantly increased power and improved efficiency.

The exterior gives it the potential to become a modern design icon.

As a four-door coupé, the new CLA intrigues with its purist and seductive design; the flat headlamps with the striking daytime running lamps together with the low slung bonnet and the diamond radiator grille with central star create the vehicle’s sporty face, which has clear echoes of classic Mercedes-Benz sports cars.

Thetwo-piece,narrowtaillampsand thenumberplatehousedinthebumper ontherearemphasizethewidthmaking it appear flatter and sportier with good presence on the road.

Its interior exudes themes of ‘high tech’ and ‘youthful avant-garde’, even www.businessday.ng

as it reveals a technologically and digitally enhanced interior with the Widescreen display standing out as a major highlight, while the dashboard comes with more width, creating a generous sense of space.

Space and comfort is highly guaranteed with the standard seat with straight stitching, and comfort seat with double topstitching (available with the Progressive equipment line), the backrest of the rear seats is 40:20:40 foldable providing even

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more space for the trunk whenever the need arises.

The Mercedes-Benz User Experience (MBUX) continues its development even as the multimedia infotainment system has been updated with two striking new features in the MBUX Interior Assistant and the newly improved “Hey Mercedes” voice control.

Commenting on the new arrival, Mirko Plath, CEO, Weststar Associates Limited, said that the whole @Businessdayng

Weststar team is happy to bring the latest Mercedes-Benz compact car to Nigerian roads.

He also stressed the importance of the CLA to the brand portfolio, adding that globally many people who purchased the first generation of the CLA bought another MercedesBenz as their next car.

He is confident the success story will continue especially in the local market. The all-new CLA gives another glimpse into the future with its superior technology, luxurious materials and performance output.

For a compact car it clearly stands out as the best in its class, doing justice to an already established vehicle.

The all-new CLA is now available at Weststar authorized Mercedes-Benz dealerships across Nigeria with the best aftersales service experience.

It has more powerful and efficient engines in comparism to its predecessor. For the Nigerian market the all-new CLA comes in 4-cylinder gasoline engines. The M282 gasoline engine has an output of 100kw/136hp – 120kw/163hp and a peak torque of 200 - 250nm coupled with the 7G-DCT dual clutch transmission, this forms the point of entry for engines in the CLA 180 and CLA 200.

32

Wednesday 11 September 2019

BUSINESS DAY

FINANCIAL INCLUSION

& INNOVATION

Big banks deepen financial inclusion as e-transact earnings hit N78bn in H1 Stories by ENDURANCE OKAFOR

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he advent of technology is making huge impact in Nigerian financial industry as earnings from e-transactions of the five biggest banks in the country grew by 73.89 percent in one year.

The commercial banks have continued to introduce digital products into their operations, driven by the need to eradicate long queues in banking halls, make cash transactions easier, faster and resolve other issues associated with payments and financial transactions.

BusinessDay’s analysis of the annual financial reports of Nigeria’s tier-one banks revealed that the country’s largest banks grew their earnings from electronic transaction to a record high of N78.44 billion in the first half of 2019 from the N45.11 billion reported in the corresponding period of 2018.

Zenith Bank, First Bank and United Bank for Africa (UBA) topped the chart as they reported highest revenue from their e-transactions in H1. The lenders reported N27.08 billion, N21.83 billion and 16.86 billion in H1 respectively.

This is compared to the N10.08 billion reported by Zenith in H1 2018 and the N14.92 billion and N12.15 billion reported by both

First bank and UBA in the review period.

“Nigeria has a large mobile market, the huge number provides an opportunity to use it in deploying easy-touse technology that can improve access to financial services across Nigeria’s mobile financial service platform and could be the answer to bridging the gap in inclusion level,” Oghogho Osula, financial expert and former Managing Director/Chief Executive Officer of Coronation Trustees Limited said.

According to data by Nigerian Communications

Commission (NCC), the total number of subscribers per each individual telecoms operator as at June 2019 stood at 173.75 million.

A further dive into the half-year financial reports of Nigeria’s biggest lender revealed that Guaranty Trust Bank (GTB) and Access Bank also made progress in their earnings from electronic transactions. GTB reported N7.14 billion in H1 2019, 67.21 percent increase when compared to the N4.27 billion it reported in 2018.

Access Bank followed

in line with 49.86 percent surge in earnings from electronic business, from N3.69 billion in H1 2018 to N5.53 billion in H1 2019.

“With most banks rolling out products like USSD, financial service Apps and POS, transactions through the convenient mediums are beginning to return good earnings for the banks and with the amount of investments Fintech are attracting, it tells you that financial technology is the way to go,” a player in the financial industry who asked not to be identified said.

According to the CBN’s guidelines on bank charges, which took effect on May 1, 2017, withdrawals from other banks’ ATMs within the country, attracts N65 charge after the third withdrawal within the same month.

According to the guidelines, bills payment on electronic channels of the banks also attracts N50 for transactions below and above N10bn, while real-time gross settlement attracts N550 per transaction.

The apex bank stated that alerts on transactions should not be more than N4 per SMS, while bulk payments such as salaries and dividends attract a maximum of N50 per beneficiary, which is paid by the sender.

In January, 2012, the Central Bank directed banks to begin full implementation of electronic payments of suppliers, all form of taxes, salaries and pensions, by both private and public organizations with more than 50 employees/ pensioners in the country.

The then Deputy Governor of CBN in charge of Operations, Tunde Lemo restated the apex bank’s commitment to embark on the implementation of the policy in order to explore its potential benefits to banking system and the economy.

“We want to eradicate dominance of cash and paper-bas e d activities

in the economy, manual operations and delays in clearing time of cheques, infrastructural bottlenecks, sharp practices and insider abuses, shortage of technical personnel and low confidence in the banker’s clearing system” he said.

In the same year, the apex through its collaboration with industry stakeholders launched the National Financial Inclusion Strategy (NFIS) in which it set a target to ensure it include 80 percent of Nigerians into the financial cycle.

Latest figures by EfInA put Nigeria’s financial inclusion rate at 63.2percent, meaning that as much 36.8 percent adults still lack access.

At a recent Financial Services Agents Forum for North-Central on, Ashley Immanuel, EFInA head of programs said their last survey showed over 36m adults in Nigeria were still completely financially excluded.

“They do not use bank accounts, Microfinance Banks, may be they save under their pillows, they borrow from family and friends. They do not use any form of financial system,” she stressed.

If the apex bank is to achieve its 20 percent exclusion rate by 2020, the lender would have to ensure it bridge the 16.8 perecnt inclusion gap in less than five months.

How EcobankPay is bridging financial inclusion gap

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cobank Nigeria Limited, a subsidiary of the Pan-African Ecobank Transnational Inc has it is bridging Nigeria’s inclusion gap through its EcobankPay, the lifestyle digital payments and collections service.

The Deposit Money Bank said it is leveraging technology to push the frontiers of financial inclusion in the country, targeting the unbanked and under-banked.

In a recent presentation, Patrick Akinwuntan, Managing Director of Ecobank Nigeria while speaking on the topic Leveraging Fintech Innovation for Unlocking Growth and Competitiveness in Nigeria’s Mobile & Payment

Ecosystem said the country remains a dynamic market with a lot of opportunities for digital financial expansion.

“Ecobank has built an ecosystem that leverages digital technology to bring affordable, easy and convenient financial services to the people and businesses. The bank is currently pushing EcobankPay, Xpress Agency Points and other digital platforms as key solutions to address the rapid shift to mobile payment and the adoption of digital channels across the country,” Akinwuntan.

According to the MD, EcobankPay, is a lifestyle scan and pay digital payment and collection

service which accepts payments from other platforms; mVisa, Masterpass, and mCash. “Payment can be made with any phone by scanning the QR code or using USSD at merchant locations.”

The product’s unique offer ing, Akinwuntan stressed, is its interoperability, as “all bank customers in Nigeria can pay through their accounts in other banks. It is free to set up, as the shop owner only needs his/her QR code and phone for notifications to start receiving quick and easy payments.

Merchant QR can also be set up via Facebook Messenger as well as USSD payment for low-income phone users.”

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EcobankPay, he assured, “is currently available at over 90,000 merchant locations across the country. This is in addition to over 6,000 Xpress point agent locations in the country.

“Also, we have over 8 million mobile banking subscribers across the Ecobank Group. Our Ecobank Mobile App is unique, as it is one universal App available in 33 countries where we operate in Africa.”

According to the lender, it has so far set up EcobankPay Zones in over 50 locations in different parts of the country. These are digital hubs enabling businesses within a location.

Akinwuntan said also that the banks’ strategy in-

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cludes collaborating with Fintechs to surmount the financial inclusion and adoption of financial services challenge.

Quoting the EFInA Fintech 2018 report, he said that there is an increased partnership with Fintechs as Nigeria is currently home to over 250 Fintechs and approximately 60percent of them are supporting payments and lending capabilities. The cumulative Fintech funding by banks in Nigeria has surpassed $250m in the past five years, he pointed out.

In a goodwill message at the financial inclusion forum, Musa Jimoh, Deputy Director, Payment System Department of the CBN lamented about @Businessdayng

the cost of financial services. He said the cost of the service is one of the reasons why people refuse to embrace some banking services including mobile money.

“So we came out with guidelines on bank charges to make sure that we regulate the charges and we have also come out with some other initiatives under the cashless scheme to see how we can bring people to the digital channel and reduce the high cost of operations in the bank,” Jimoh said. Adding that the apex bank is pushing out a lot of initiatives to ensure the mobile money operators grow and help deepen financial inclusion.

Wednesday 11 September 2019

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BANKING Rising payday loan: Need for enhanced regulation Stories by HOPE MOSES-ASHIKE

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he Nigerian Payday Loans Industry has witnessed a rapid growth in recent times and is expected to grow considerably by 2020 and beyond.

These loans are designed to meet the short-term needs of an individual until the next payday, when the loan is usually repaid in full.

Payday Loans, referred to as salary advances, payroll loans and payday advances, are typically small, short-term unsecured loans that are tied to a borrower’s payday according to Agusto & Co. These short-term loans given out by banks non-alternative traditional lenders have grown in prominence. They have taken advantage of the gap created by traditional banks, and other traditional financial institutions’ apathy towards lending. They have also developed on the back of the emergence of Fintech companies. So essentially you have a situation where customers can access payday loans within minutes.

There are a number of countries like U.S, Canada, Netherland and UK where payday loan lenders have come under scrutiny largely because of high interest rate they charge. Their interest rate can be as high as 35 percent annually to as high as 1,000 percent.

Because this scrutiny, the regulators of

these countries had taken a formal stands on monitoring payday loan lenders and their activities.

Essentially, greater emphasis has been placed on consumer protection, responsible lending and customer education. A lot of payday lenders abroad are now mandated to educate the customers on what they are actually getting into in terms interest rate, rollover facilities, and implications of taking on a payday loan facility.

“What payday loan lenders are to developed countries is what we have in Nigeria as

Access Bank deepens customer experience with W hotline

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he W initiative of Access Bank remains the pioneer women market programme in Africa with a focus on creating bespoke financial and lifestyle solutions to suit the dynamic needs of women across its focus segments.

To further reiterate the bank’s commitment to women, the W initiative has introduced the W hotline on +234 1 227 3005.

This line is a dedicated customer service helpline created to give women quick and direct access to information on all W offerings including the W Power Loan, Maternal Health Service Support, Business Support Service, Capacity Building workshops, Networking events and lots more.

Following the merger, the bank now caters to 31 million customers with a large portion of its customer base being female. In order to ensure that no woman is left out, the W hotline was created as a targeted approach to cater to enquiries revolving around the W initiative;

NPF Microfinance Bank rolls out KEA to promote access to education financing

Speaking on Access Bank’s dedication to cater to the Women’s Market across Africa, Victor Etuokwu, Executive the ban’s Director, Retail Banking, said: “At Access Bank, we consistently focus on improving customer experience and forestalling any form of dissatisfaction for our customers. Hence, the adoption of the W hotline to ensure women get information that can help them access financial and non-financial services seamlessly.

Etuokwu continued, “The W Hotline is the first of its kind in the industry, dedicated to provide support for women across our focus segments. The hotline is managed by trained and qualified gender specialists who are solely tasked to attend to W enquiries.

Access Bank has an unflinching commitment to empower women and contribute immensely to the growth of the women market in Nigeria and beyond for accelerated social and economic growth.

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microfinance banks. While MFBs serve the poor and the disadvantaged economically, payday loan lenders abroad focus on lowincome earners, poor households and provide support for them,” said Osaze Osaghae, an analyst at Agusto & Co, said recently.

He noted that payday loan lenders are highly regulated in these countries. However, in Nigeria, regulation is still relatively weak.

“Payday loan is not an industry perceived but remains a product handled by a number of financial institutions across the different

facets of the financial services sector,” he explained.

Since the 1990s, commercial banks dominated the financial services landscape with a focus mainly on providing financial services to corporate clients and to a significantly lesser extent retail customer.

Around 2000s, the CBN introduced microfinance policy in recognition of the dearth of financial services available to retail customers. The focus was mainly on the low-income and the economically disadvantaged.

In 2018, the CBN revoked the licences of 153 MFBs while a few new ones were licensed. As a result of these developments, there was a decrease in the number of MFBs in operation from 1,008 as at 31st December, 2017 to about 888 as at 31st December, 2018, the summary of 2018 annual report by the Nigeria Deposit Insurance Corporation (NDIC) revealed.

The year 2010 witnessed the entry of pioneer payday lenders such as Renmoney, Credit Direct, Zedvance and Page International, boosted by rising prominence of Fintech, evolving customer expectations and social norms and unmet demand for loans.

It is expected that by 2020 and beyond, there would be a considerable growth in the number of payday lenders, driven by rising competition from commercial banks and nano (micro) lenders leveraging Fintech, as well as increased regulation of payroll loan products.

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he Nigeria Police, Microfinance bank, has initiated a robust children’s education financing facility which aims at supporting parents to pay school fees seamlessly. Known as ‘Kid’s Education Account’ (KEA), the bank came up with the idea after realising that despite great efforts by government at the three-tier level to enable significant enrolment in schools, millions of Nigerian children are still denied their right to education, essentially due to poverty level restrictions.

According to the bank, restricted access to education is one of the surest ways of transmitting poverty from generation to generation and that education is a vital human right, enshrined in the Universal Declaration of Human Rights and the United Nations Convention on the Rights of the Child.

In designing the product, the bank believed that every child should have the right to quality education so that they can have more chances in life, including employment opportunities, better health and also to participate in the political process.

Early childhood education and care as conceptualised and incorporated in the features of the product makes it a unique financing option currently being offered in the banking industry, the bank said in a statement.

The KEA, which is about to be unveiled encourages institutions and parents to open account with the bank to have unbridled access to finance education of their children and wards.

Though there are similar existing facilities offered by financial institutions in the country, the bank said the product has exceptional attractive features that would be exciting to

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parents and guardians.

One of the sterling features is access to up to 50 per cent school fees which is offered as loan to interested parents. The Kid’s Education Account is also specifically conceived offering high interest rates on savings meant for the purpose of the account.

The bank said it had taken the burden of the generous interest offering to encourage parents operate their accounts as it realizes that education reduces poverty, boosts economic growth and increases income and more so increases a person’s chances of having a healthy life, reduces maternal deaths, and combats diseases.

“Education can promote gender equality, promote peace and it is one of the most important investments parents can make and parent’s engagement in children’s education is progressively viewed as an essential support to children’s early learning, care, and education programmes.

Effective parent engagement during the period from preschool through the early grades is a key contributor to children’s positive intellectual, socio-emotional skills outcomes, and healthy development” the bank said in a statement.

In addition, the bank said its Personnel After Service Account, PASA, is another unique product designed to help people retire to happy life.

Under the PASA arrangement the bank allows contributors to access up to 30 per cent loan for business after retirement while offering high interest rate on savings.

The bank also accepts the account as collateral for loan and offers more incentives than the Contributory Pensions Scheme or the currently launched MicroPension.

@Businessdayng

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Wednesday 11 September 2019

BUSINESS DAY

cityfile Nasarawa: DPR seals 20 gas, petrol stations

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Students of St. Kizitos Catholic Primary School on the assembly ground as school resumed new academic calendar in Lagos.

Kaduna: Police arrest 25 kidnap suspects

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aduna State police command, said it arrested 25 notorious suspected kidnappers in different operations in the state.

T h e c o m m a n d ’s pu b l i c re l at i o n s o f f i cer, Yakubu Sabo, who made this known, said three other attempted kidnap incidents were also neutralised and suspects arrested following a raid on their hideouts.

Sabo said the raid was conducted by police operatives of the command led by the IGP special tactical squad attached to ‘Operation Puff Adder.’

According to him, the police acted on in-

telligence repor t and raided the criminal hideouts at Kingimi and other surrounding villages in Igabi local government area of the state.

He explained that in t h e p ro c e s s, o n e B u h a r i B e l l o, a 3 4 - y e a r notorious kidnapper and seven others were arrested.

“Upon interrogation, it was revealed that they belong to the gang of notorious kidnapp e r s / a r m e d ro b b e r s that have been terrorising Kaduna-Abuja and Kaduna-Zaria expressways. “ I nv e s t i g a t i o n f u rther revealed that the suspects were responsible for the recent kidnap of Suleiman Dabo,

a m e m b e r o f t h e Ka duna State House of Assembly. The sum of N450, 000 has been recovered from one of the suspects which he confessed to be his share of the ransom paid by the victim,” said Sabo.

He noted that efforts were on to apprehend other gang members and recover their operational weapons.

He said combined teams of policemen from the command, IGP’S IRT, Special Forces and some hunters/ vigilantes were mobilised for the operation.

“In one of the fierce encounters, the operatives succeeded in neutralising the bandits, killed about three, recovered two AK47 rifles

and three operational motorcycles.”

T h e o p e rat i v e s, h e said, also raided Barebri and other bandits’ camps within Buruku axis and arrested eighte en kidnap susp e cts on Sept. 7.

“O n i n t e r ro g a t i o n , they revealed that they were responsible for the kidnapping incident of August 26, along Kaduna -Abu ja ro a d w h e re six persons were kidnapped including three ABU students, killing of a police inspector and carting away his AK47 Rifle.

“The suspects are currently helping police investigation and will be prosecuted accordingly.”

Flooding: Oyo to channelise major rivers REMI FEYISIPO, Ibadan

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s part of efforts to checking and attendant loss of lives and property in Oyo, the government is considering channelising major rivers in the state to increase flood water runoff capacity.

The rivers being considered are River Ona, Agodi Channel, River Ogbere, Kudeti Channel, among others.

Commissioner for environment and natural resources, Kehinde Ayoola says the government is

also commencing public enlightenment to draw attention to the hazards of poor sanitation on the environment.

He spoke at a sensitisation programme in Ibadan, the state capital, on Monday, where also disclosed that the governor, Seyi Makinde has approved the establishment of four tribunals to enforce environmental laws.

Ayoola said the vulnerability of Ibadan to river and urban flooding is induced by the city’s topography, indiscrimiwww.businessday.ng

nate waste disposal and construction of houses on flood plains, aggravated by global climate change.

“It is in the light of this that the government is committed to the full implementation of the Ibadan urban flood management project, the state-owned flood risk mitigation project with funding and technical assistance from the World Bank,” said Ayoola “The proposed channelisation of major rivers and water channels in Ibadan is being processed and would soon commence.

“However these efforts would amount to nothing without the people fulfilling their own part of the bargain. Our people are required now, more than before, to clear their surrounding and street drain channels, avoid dumping waste improperly, ensure that each household keeps a dustbin and patronise government-approved waste disposal contractors, avoid floodplains, obtain building approvals from relevant statutory bodies before commencing building,” he said.

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epartment of Petroleum Resources (DPR) has sealed off 13 petrol stations and seven Liquefied Petroleum Gas (LPG) refilling outlets in Nasarawa for violating operational guidelines.

Abdulrahman Mohammed, the operations controller of DPR in the state, told newsmen in Lafia, Monday, that the action followed a monitoring by the agency recently, to rid the state of illegal outlets.

According to Mohammed, six of the gas outlets sealed were illegal skid LPG refilling points located in Nasarawa Eggon, Akwanga, Keffi and Karu Local Government axis, while one LPG plant was sealed in Lafia.

He noted that the petrol stations were involved in adulteration of product, non-compliance with safety standards,

renovation without approval, operating without current license as well as operating illegally.

He said that the department, in collaboration with the Nasarawa Urban Development Board (NUDB) and the Ni g e r i a S e c u r i t y a n d Civil Defence Corps (NSCDC)), would go out on another aggressive exercise, to dismantle all illegal petrol and LPG stations that failed to comply with the sealing order of the board.

He warned illegal operators in the petroleum and gas business to desist or be ready to face the wrath of the law.

“Anyone caught engaging in the illegal business henceforth would be charged to court, to serve as a deterrent to others nursing such idea.

“I want to let the public know that DPR has since stopped the approval of LPG skid refilling points,” he said.

PHEDC seeks consumers’ support to fish out corrupt staff MIKE ABANG, Calabar

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ort Harcourt Electricity Distribution Company (PHEDC) is soliciting the support of consumers in fishing out corrupt officials extorting money from the public.

This is against the backdrop of rising complaints from electricity consumers of extortion by some officials of the organisation, especially as it relates to maintenance of transformers and other power installations.

At a stakeholders’ forum in Calabar, the Cross River State capital, Joseph Ayikowe, general manager, commercial, PHEDC,

said the organisation has zero tolerance for corruption and consumers should help them identify corrupt staff for prosecution.

“I have said several times and can be quoted anywhere; people are being dismissed on weekly or monthly basis when they go astray.

“I will not be able to state the exact figures but it’s a routine. When you are caught, we dismiss you, take you to the police and have you prosecuted.

If somebody goes around and says he is a PHEDC staff, identify the person and let us know and we will discipline him, extortion is unacceptable to us”, he said.

Three arrested for robbing, strangling driver

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he police in Niger State have arrested three suspecte d a r m e d ro b bers for allegedly robbing and strangling a commercial vehicle driver.

Spokesperson of the police in Niger, Muhamm a d u A b u b a k a r, d i s c l o s e d t h i s i n Mi n n a , Monday. He said that the suspects were nabbed on @Businessdayng

August 31, by a team of police from GRA division through information from the public.

Abubakar explained that the suspects confessed to have chartered a Golf car with registration number JJJ 247 AX from Bauchi to Kano under the guise of being militar y personnel from Shadawanka Barrack.

Wednesday 11 September 2019

BUSINESS DAY

PRIVATEEQUITY &FUNDRAISING

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Affirma Capital buys minority stake in Prodapt Solutions for $75m ... The transaction was advised by Mumbai-based financial services firm Avendus Capital ... Marks Affirma Capital’s fourth investment in India in the past twelve months MICHAEL ANI

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rivate equity firm Affirma Capital has bought a significant minority stake in Chennai-based Prodapt Solutions Pvt. Ltd, both firm confirmed in a statement.

Affirma Capital, without disclosing the deal size, said it had invested in Prodapt, a specialized IT services firm in an all-cash deal.

Sources familiar with the

deal disclosed is worth about $75 million.

“A key part of our investing strategy for Affirma Capital in India is around export oriented themes. Prodapt fits in very nicely with this given that the company works with leading telcos and digital media companies across US and Europe,” said Udai Dhawan, co-founder and head of India at Affirma Capital.

The Jhaver Group-promoted Prodapt Solutions provides end-to-end IT/software archi-

tecture consulting, application development, systems integration, testing, maintenance and support solutions to its telecom and cable clients in North America, Europe, India, and Africa. The firm employs close to 2,000 people across its regional offices around the world.

“We also really like the fact that they have strong domain expertise and are focused on digital and next generation technologies which help their customers take advantage of

Arla Foods signs $100m deal with Kaduna state to source milk locally MICHAEL ANI

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r l a Fo o d s, t h e world’s largest producer of organic dairy products, has signs a Memorandum of Understanding (MoU) with Kaduna State government to source milk locally.

The deal would enable the Denmark-based diary firm, change livestock production into business through the use of modern tools, Nasir El-Rufai, Governor of Kaduna state said on his official twitter account.

“Today, we signed an MoU with Arla for a project

that uses modern tools to change livestock production from a culture into a business, sedentary the nomads and promote jobs, economic development and security,” Elrufai said on his official twitter account.

Sources close to the Kaduna state government disclosed that the deal is worth about $100 million and would enable the firm source milk locally from a Rural Grazing Area (RUGA) settlement in the state.

The source noted also that “with the proposed restriction by the Federal government on forex, the firm is being are compelled

to get their milk here just like they do in their Indian plant,”.

The deal was led by Steen Hadsberg, Vice President, Sub-Sahara Africa Region and Managing Director, Arla Global Dairy Products Africa, and witnessed the presence of the Ambassador to Denmark, Jesper Kamp.

“I thank Jesper Kamp, the Ambassador of Denmark, for his support for our efforts to use a business model to promote jobs and development in our agriculture sector. We are delighted by his presence at the MoU signing,” El-Rufai said.

the changing global telecom & medial landscape,” he added.

The transaction was advised by Mumbai-based financial services firm Avendus Capital.

The latest investment is in line with Affirma Capital’s mandate, which focuses on four themes — financial services, consumer, export-oriented themes and healthcare and pharmaceuticals, and invests between $25 million and 75 million in mid-sized firms that require growth capital.

With assets under management worth $3.6 billion and over $700 million set aside for deals in emerging markets, Affirma has more than 50 investments across six regions (China, India, South East Asia, South Korea, SubSaharan Africa and the Middle East), and has a team of 52 investment professionals.

This marks Affirma Capital’s fourth investment in India in the past twelve months.

Its past investments include nutraceuticals firm Tirupati

Medicare, in which it invested about $50 million in August.

Affirma completed its management buyout from Standard Chartered Bank, led by its seven partners and backed by Intermediate Capital Group’s Strategic Equity funds, through the acquisition of the majority of the bank’s private equity portfolio worth $1 billion in August. The PE firm is now an independent entity owned and operated by the senior leadership team of Standard Chartered Private Equity.

Private Equity giant Carlyle Group acquires majority stake in IsoMetrix MICHAEL ANI

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he Carlyle Group, a global investment firm with $223bn of assets under management, has acquired a majority stake in IsoMetrix, an Environmental, Health and Safety (EHS) software vendor.

Although, the amount of the transaction were not disclosed, the deal was done through the through its $698m Carlyle Africa (Buyout) Fund.

The investment will equip IsoMetrix for further growth, enabling the company to compete more aggressively for outright leadership within the EHS and integrated risk management software arena through accelerated software development.

Madison Park Group served as exclusive financial advisor to IsoMetrix on the transaction and existing

shareholders and management retain a significant stake in the business.

The acquisition also offers synergies with occupational health and safety (OHS) risk management solutions provider NOSA - another recent Carlyle Group acquisition.

IsoMetrix and NOSA will continue to operate independently, however, they will collaborate in developing and cross-selling to enterprise clients across mining, oil & gas, power and transport sectors offering a suite of technologyenabled managed solutions designed to address environmental and occupational health and safety risks.

By working together, IsoMetrix and NOSA, with more than 1,000 client deployments across the world, will pioneer the development of digital EHS managed services to

cross-sell EHS and risk software to both IsoMetrix and NOSA’s global customer base, empowering companies across industries to achieve a proactive view of integrated risk to achieve safer, more resilient business models.

IsoMetrix has offices in South Africa, the USA, Canada and Australia and was recently included in the 2019 Verdantix EHS Leaders Quadrant.

The Carlyle Group will support the continued growth of IsoMetrix and NOSA through its Sub-Saharan Africa fund and its global network.

As companies face increased scrutiny of their Environmental, Social & Governance performance, IsoMetrix is well-positioned to provide relevant metrics, data-driven insights and expert advice on sustainability and corporate responsibility.

BusinessDay PRIVATE EQUITY & FUNDRAISING (Team lead: LOLADE AKINMURELE - Analysts: MICHEAL ANI, DIPO OLADEHINDE, ENDURANCE OKAFOR, DAVID IBEMERE ... Graphics: SAMUEL IDUH ) Businessday’s Private Equity and Fundraising section is a weekly publication that provides in-depth analysis on private equity trends and tracks deal activity in Nigeria.

Email the PE & F team loladeakinmurele@gmail.com

Continues on page 34

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Wednesday 11 September 2019

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news

Buhari seeks accountants’ partnership in anti-corruption war Onyinye Nwachukwu, Abuja

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resident Muhammadu Buhari on Tu e s d a y c a l l e d corruption, a violation of human, as he sought the cooperation of Nigerian Accountants to help rid the country of the monster.

He was speaking at the ongoing 49th annual conference of the Institute of Chartered Accountants of Nigeria (ICAN), which focused on ‘Building Nigeria for sustainable Growth and Development’ and hosting over 5,000 delegates in Abuja.

“I urge you now to always see corruption in its true colour as a gross violation of human right,” the President, who was represented at the event by Boss Mustapha, Secretary to the Government of the Federation, said.

Corruption is the country’s greatest enemy and will certainly fight back, “but we must continue to fight to effect a change to our value system.

“For the majority of our people, the millions that are

in hardship, the sick, the helpless, corruption is the major reason why they cannot go to school, Why we have few equipment and doctors in our hospital. Corruption diverts public resources thereby causes much suffering, deprivation and unnecessary death in the country,” according to the President.

He said viewed this way, people can begin to appreciate the gravity of the destructive nature of corruption, saying, “This should provoke us to fight it with the same zeal and doggedness we deeply deploy in the difference of fundamental human rights,” and urged, “If we do not slay corruption with the passion it deserves, we will not get the result that we need.”

He noted that government’s fight against corruption was in reality a struggle for nation building and the future.

“Corruption and impunity becomes widespread when accountability is disregarded.

Disrespect for accountability also strives when people

get away with all manner of questionable things and accountants are unable to check them,” he stressed while commending ICAN accountability index as another great initiative to support the government to reed our country of corruption.

“I have no doubt that if this initiative of ICAN continues, it will greatly assist government at all levels to be more transparent and accountable to the people of this great nation.”

The President also pointed out that his government was deeply worried with the state of infrastructure in the country and had taken bold steps to address some of the infrastructure gaps through our massive investments in roads and rails, which are at different levels of completion.

He recalled that in order to achieve rapid realization of the need to fill the gap in infrastructure, government has signed the Executive Order 407 of 2019 on road infrastructure development and rehabilitation investment tax credit scheme.

A dozen killed by police on Ashura procession across the nation - IMN … sect holds peaceful procession in Abuja, Jos, others Innocent Odoh, Abuja

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he Islamic Movement in Nigeria (IMN), popularly called Shiites, has claimed the killing of at least a dozen of the sect members in some states of the nation by the police during Tuesday’s Ashura mourning procession to commemorate the death of their revered Shia imam, Hussein Ibn Ali, who died in the battle of Karbala in Iraq.

A statement issued on Tuesday by its spokesman, Ibrahim Musa, noted that at least three people were confirmed killed by the police in Kaduna and 10 others injured, some fatal, when thousands

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of Muslim brothers and sisters trooped out in the early hours of Tuesday to commemorate the tragic events of Ashura.

He said further in Bauchi, reports also had it that three people were killed during the Ashura procession when the police attacked the mourners.

Likewise, three other people were killed by the police in Azare, also in Bauchi State.

Another three were killed by the police in Gombe, Gombe State.

“One person was reportedly killed by the police in Illela, during the Ashura procession there, and another person was killed in Goronyo all in Sokoto state. In Malumfashi, Katsina state also another person was killed. In Katsina town however, several people sustained bullet wounds when the police opened fire on the mourners, not only during the mourning procession, but afterwards as the well armed policemen attempted to forcibly make their way into the Islamic centre of the Movement,” the statement added.

He noted that these ca-

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sualty figures may however rise due to the fatal gunshot wounds sustained by some of the peaceful mourners.

“This year’s Ashura procession was held in all the state capitals of the North and Abuja.

It ended peacefully in Abuja, Jos, Kebbi, Minna, Lafia, Yola, Gusau, Zaria, Kano, Jalingo, Damaturu, Hadejia and Potiskum.

“Today’s show of shame and rage by the police across the states was sequel to the tragic orders given to it by the Inspector general of police, Mohammed Adamu to brutally attack the peaceful Ashura mourners.

“That the mourning procession ended peacefully in places not attacked by the police is sufficient evidence as to who the instigators of violence are whenever we are carrying out our legitimate religious duties,” the statement added.

The group expressed gratitude to Allah the Almighty that had granted the members the courage to come out in several cities and villages across the country to commemorate the brutal killing of Imam Hussein (AS), the grandson of Prophet Muhammad (S) as it is done in several cities across the globe, despite intimidation and threats by the federal government and its agents, acting on behalf of the Saudis by proxy.

Meanwhile, the group ignored warning issued on Monday by the Inspector General of Police (IGP) Mohammed to desist from their planned procession on Tuesday or face the consequences as such action will be treated as terrorism.

The IGP gave this warning in a statement issued on Monday by Force Public Relations Officer Frank Mba, adding that the group remains proscribed by the law. https://www.facebook.com/businessdayng

@Businessdayng

Wednesday 11 September 2019

BUSINESS DAY

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news Tension, mixed expectations as Buhari, Atiku...

Continued from page 1

Democratic Party (PDP), and his party challenging the declaration of President Muhammadu Buhari of the All Progressives Congress (APC) as winner of the February 23, 2019 election.

The tribunal in a notice of hearing conveyed to parties

in the petition through text messages and telephone calls, Tuesday, announced its resolution to make its findings and final decision on the petition known today (Wednesday).

A notice sighted by our correspondent, Tuesday, reads, “Re: CA/PEPT/ 002/2019 – ATIKU ABUBAKAR & 1 OR. VS INEC & 2 ORS TAKE NOTICE that judgment in the above petition has been slated for Wednesday, 11 September 2019 at the Court of Appeal/ Presidential Petition Tribunal by 9.30am.”

Eddy Olafeso, Southwest vice chairman of the PDP, expects the judiciary to uphold justice and give judgment in favour of the PDP, saying such judgment had become imperative for the country’s survival.

“We expect the judiciary to uphold justice, clean and clear, because it is only if they do the needful that this country can survive. If it is based on what transpired at the presidential election, we know how that election was conducted,” Olafeso said.

Ebenezer Babatope, a former minister of transport, said Nigerians can only hope and pray for the best.

“Wednesday is the day.

Don’t forget that I am a member of the PDP. But under this Buhari-led administration, let’s leave everything to God, I believe he would do it,” Babatope said.

But Biodun Salami, publicity secretary of the APC in Lagos State, said the party was hopeful of victory at the tribunal because it genuinely won the presidential election.

“I can’t say much, let’s wait for the judgment, but I am hopeful we would get a favourable judgment because we won on the field,” Salami said.

Section 134 (1) to (3) of the Electoral Act provides that an election petition should be filed, heard and determined within 180 days. In the Buhari/ Atiku case, the 180 days will elapse on Sept. 15.

Atiku had on March 18, 2019 filed a petition at the tribunal claiming that he and his party defeated President Buhari, who was declared the winner of the election by the Independent National Electoral Commission (INEC).

The tribunal, headed by Justice Mohammed Garba, which began its inaugural sitting on May 7, reserved the petition for judgment on August 21 after hearing the arguments of the parties before it.

During the hearing of the petition, Atiku called 62 witnesses out of the 400 he promised to present.

On the other hand, Buhari called six. However, both INEC and APC did not call any witness. Counsel to INEC, Yunus Usman (SAN), told the tribunal that it was not necessary to call witnesses, having extracted useful information from evidence given by the petitioners’ witnesses.

In the course of presentation of arguments, the PDP presidential candidate and his party said the election was marred by irregularities.

They held that Buhari was not qualified and should not have been allowed to contest the election. They argued that President Buhari lied on oath in his form CF001 which he presented to INEC before standing for the contest.

In the final address presented on their behalf by lead counsel, Levy Uzuokwu (SAN), they drew the attention of the tribunal to a portion of Buhari’s form with INEC where he claimed to have three different certificates comprising primary school leaving certificate, the West African Examination Council (WAEC) certificate and Officer Cadet’s certificate.

Uzuokwu, therefore, urged the tribunal to nullify the participation of Buhari in the election on the grounds that he lied on oath to deceive Nigerians and to secure unlawful qualification for the election.

The PDP presidential candidate also faulted the claim

by INEC that it had no central server, saying that a server is a storage facility including computers where database of registered voters, number of permanent voter cards and election results amongst others are stored for references.

He, therefore, urged the tribunal to uphold the petition and nullify the participation of Buhari in the election on the grounds that he was not qualified to have stood for the election, in addition to malpractices that prompted his declaration as the winner.

But INEC claimed not to have officially transmitted results of elections in 2019 electronically.

Counsel to INEC, Usman (SAN), urged the tribunal to dismiss the petition with substantial cost because the electoral body conducted the election in total compliance with the Nigerian constitution and Electoral Act 2010.

Usman insisted that INEC did not transmit election results electronically because doing so was prohibited by law and that the commission did not call any witness because there was no need to do so.

INEC further explained that there was no way Atiku could have won the election, adding that he was not declared winner of the exercise because it was satisfied that the PDP candidate did not secure majority of lawful votes during the election.

•Continues online at www.businessday.ng www.businessday.ng

L-R: Olabode Adebayo, adviser; Elijah Olu Omirin, adviser; Ifeoluwa Okunnu, ex-officio; Olusegun Kafaru, immediate past chairman; Bukola Ifemade, chairman; Leishton Academy facilitator; Tunde Oguntade, past chairman; Femi Oduwole, treasurer; Omotayo Dada, adviser; Rotimi Olukorede, vice chairman, and Yemi Faturoti, financial secretary, at the training on anti-money laundering and combating financing of terrorism (AML/CFT) of over 300 brokers sponsored by Axa Mansard, during the September 2019 general meeting of The Nigerian Council of Registered Insurance Brokers – Lagos Area Committee (NCRIB-LAC) in Lagos.

Fiscal concerns force FG to cut 2020 budget ...

Continued from page 1

finances is a good place to start.

“It is proposed that the FGN budget from 2020 will reflect the revenues and expenditures of GOEs and the multi-lateral/bi-lateral projected loans and related expenditures,” Ahmed said.

“Achieving fiscal sustainability and macro-fiscal objectives of government will require bold, decisive and urgent action. Government is determined to act as may be required,” she said.

Dwindling government finances have taken a toll on public infrastructure and economic growth.

The government has failed to meet revenue projections for the past three years and there are no signs the trend will reverse this year.

In the first six months of 2019, the government raised N2.0 trillion, 30 percent off the mark of projected revenues of N2.9 trillion for that period and N6.9 trillion for the fullyear, according to data by the Ministry of Finance.

Despite the revenue failings over the years, the government

expects revenue to rise 10 percent in 2020.

Revenue is estimated at N7.63 trillion from N6.9 trillion target for 2019.

The government, however, plans to spend less in 2020, with expenditure target of N8.9 trillion. The decrease is mainly stoked by a decline in capital spending.

In 2020, the Federal Government plans to cut a whopping N1.16 trillion off capital expenditure from N2.92 trillion in 2019 to N1.76 trillion.

This will see capital expenditure dropping to 21 percent of total expenditure in 2020 compared to 32 percent in the 2019 approved budget.

The revenue framework shows that the share of oil revenue has been projected at N2.36 trillion, share of minerals and mining at N1.89 billion, share of dividend (NLNG) at N124 billion, share of VAT at N292 billion, share of Company Income Tax at N839 billion, customs at N368 billion, and share of federation account levies at N54 billion, respectively. Other revenue projections are N36 billion from grants and donor, stamp duty at N200 billion, N237 bil-

lion from domestic recoveries and fines, N939 billion from signature bonus and renewals, N345 billion from FGN share of actual balance in special account, N300 billion from special levies account, N849 billion from independent revenue, and N990 billion from top 10 GOEs. In the key assumptions of the 2020 budget which was presented by Ahmed, the government targets oil production of 2.18mbpd, which is lower than the 2.3mbpd for 2019.

Ahmed said that the oil production target appears to be more realistic as the actual daily crude oil production and exports have been well below budget projections since 2013.

Ahmed also said that a lower oil price at $55/barrel has been assumed for 2020 against $60/b considering the expected oil glut next year, as well as the need to cushion against unexpected price shock.

GDP growth rate is put at 2.93 percent in 2020, lower than the 3 percent target for 2019.

Ahmed also said the government is currently reviewing the quantum of waivers, but will not just withdraw its decision on granting pioneer status accorded to some investors.

Non-implementation...

Oil price rebound may put Nigeria back ...

Continued from page 2 dren’s Emergenc y Fund (UNICEF).

Nigeria does not have a track record for saving its oil windfalls. An oil windfall in this context is any amount in excess of the budget benchmark. This is $60.00 per barrel of oil in the 2019 federal budget. Brent crude futures sustained gain at $62.92 on Tuesday. This is $2.92 above the 2019 budget benchmark and would have gone to the Excess Crude Account, from where it would be channeled into profitable investments.

“There is no legal backing for the excess crude account. The Constitution says revenue accruing to the Federation Account should be shared; there is no pro-

vision to save for future generations,” said Obiageli Ezekwesili, who was part of the economic team under former President Olusegun Obasanjo that proposed the establishment of ECA. Section 162 of the Nigerian 1999 constitution as amended deals with public revenue management. Subsection 162 (1) provides for “the Federation Account”; (3) provides that amounts standing to the credit of the Federation Account shall be distributed among the federal and state governments and the local government councils in each state on such terms and in such manner as may be prescribed by the National Assembly; while sub-section (4) provides that any amount

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“The idea is to see which one we can begin to pull back and throw away from the pool to reduce the cost on government – but to encourage businesses and to make Nigeria competitive, some of them are essential,” she said.

Also from 2020, budgets of all MDAs and Government Owned Enterprises (GOEs) will now be contained and published in the nation’s annual budget, the minister equally announced.

Ben Akabueze, directorgeneral, Budget Office, in his remark stressed that efforts are ongoing to ensure Nigeria returns to a JanuaryDecember budget cycle effective from 2020.

He said the key reforms such as the strategic revenue growth initiative will be implemented with increased vigour to improve revenue collection and expenditure management.

“In furtherance of our objective of greater comprehensiveness and transparency in the budget process, it is proposed that the government budget from 2020 will reflect the revenues and expenditure of government-owned enterprise and the multi-lateral/bilateral project-tied loans and related expenditures,” he said.

standing to the credit of the states in the Federation Account shall be distributed among the states on such terms and in such manner as may be prescribed by the National Assembly.

The constitution ab-initio provides that revenue accruing to the Federation Account should be distributed. This means the Excess Crude Account, which is revenue accruing to the Federation Account, should be distributed according to the established revenue-sharing formula.

What this means, ultimately, is that there is no constitutional backing to save money from sales of crude oil above the budget benchmark, which is $60 for the 2019 budget. @Businessdayng

Continued from page 2

Commission and all licensed pension operators at a rate to be determined by the Commission from time to time, as provided in section 84 of the PRA 2014 to fund the protection policies, but these have yet to become effective.

The objective of the pension scheme is to ensure that every person who worked in either the public service of the federation, Federal Capital Territory, states and local government or the private sector receives his retirement benefits as and when due. It is also to assist improvident individuals by ensuring that they save in order to cater for their livelihood during old age.

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Wednesday 11 September 2019

BUSINESS DAY

FINANCIAL TIMES

World Business Newspaper MEHREEN KHAN IN BRUSSELS

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a r g r e t h e Ve stager is to get another stint as the EU’s antitrust enforcer and a beefed-up role as the bloc’s tech tsar in Ursula von der Leyen’s incoming European Commission, a move likely to spark criticism from the White House.

Ireland’s Phil Hogan has been nominated as trade chief — a role that will put him in charge of negotiating any future EU-UK trade deal after Brexit — as Ms von der Leyen, the commission’s president-elect, reshuffles jobs in Brussels.

Ms Vestager has been dubbed the “tax lady” by US President Donald Trump, who has also said the Dane “hates the US” after clashes with American tech companies. During her time as competition enforcer Ms Vestager has dished out record fines for Google and demanded that the Irish government claws back taxes from Apple.

As well as policing mergers and state aid for a further five years, Ms Vestager will also lead Brussels’ digital policy as an executive vice-president in the new commission.

Ms von der Leyen said Ms Vestager’s expanded portfolio of digital and competition issues was a“perfect combination”.

“There is a huge field in front of her. The only aspect that mat-

Margrethe Vestager holds on to EU’s top competition role

Decision to retain antitrust enforcer likely to spark criticism from White House

Margrethe Vestager has been dubbed the ‘tax lady’ by Donald Trump, who has also claimed that she ‘hates the US’ © Kay Nietfeld/dpa

ters on portfolios is quality and experience. Margrethe Vestager has done an outstanding job as a commissioner for competition,” she added.

In other big moves by Ms von der Leyen, Italy’s nominee Paolo

Gentiloni will become the EU’s economics chief — a role that has often involved close scrutiny of Rome’s finances.

France’s Sylvie Goulard will lead the bloc’s push to create an industrial policy, leading on

defence and the single market.

Belgium’s Didier Reynders and the Czech Republic’s Vera Jourova will both oversee compliance with the rule of law.

In her new role, Ms Vestager will be in charge of devising

new tech regulations including a sweeping Digital Services Act to police companies such as Facebook and YouTube. She will also manage issues like cyber security, and enforce a competition rule book that has already led to multibillion-dollar fines for tech companies.

Responding to her appointment, Ms Vestager said in a tweet: “Integrity, independence and confidentiality of our law enforcing procedures are nonnegotiable.”

The choice of an Italian in the economics job is a controversial move as successive Italian governments have been at loggerheads with Brussels over its compliance with budgetary rules.

Ms von der Leyen said the role of enforcing and reforming the budget rulebook would be “balanced” with Valdis Dombrovskis, an executive vice-president in charge of financial services and the euro from Latvia.

The UK, which is due to leave the bloc on October 31, did not nominate a commissioner. Ms von der Leyen said Brexit was in a “difficult process”.

Tradeweb lines up new benchmark for $16tn Treasuries market Gold price could smash records Move aims to reduce reliance on informal prices from a range of data providers PHILIP STAFFORD IN LONDON

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nvestors and traders in the $16tn US Treasuries market — which sets borrowing costs for the government, while also providing a starting point to price trillions of dollars in other assets — now have a daily “closing price” to use as an independent benchmark.

Until this point asset managers, clearing houses, banks and traders have relied on informal, composite prices from providers such as Bloomberg or Refinitiv, to keep track of the value of their securities, monitor compliance and manage their portfolios.

Now Tradeweb, a New Yorkbased bond and derivatives trading venue, has created a new product in conjunction with IBA, the global benchmark administration business owned

by Intercontinental Exchange.

“The global financial system [needs] a reliable price for the day at one moment in time,” said Tim Bowler, president of IBA. Since 2012, when authorities began doling out billions of dollars of fines to banks for attempts to manipulate vital currency and

lending rates, administrators of benchmarks have been forced to tighten standards. The two companies said the new product, which launches on Tuesday, would be the first benchmark for Treasuries built on principles developed by Iosco, the umbrella group for global markets watchdogs.

Some $500bn is traded in Treasuries each day around the world, with transactions spread across a number of systems.

Tradeweb itself handles about $80bn a day in deals related to Treasuries, mainly between banks and large investors, using prices from roughly 30 dealers.

Prices for the new benchmark will be collated from deals on Tradeweb at 3pm Eastern Time, typically the hour large US banks close their books to begin valuations for index pricing. It will be published just before 4pm.

“There’s demand for a closing price from exchange traded funds and passive investors,” said Colm Murtagh, head of institutional rates at Tradeweb.

“There’s a large amount of ETF flow that has to be done at the close, to reduce tracking errors.” www.businessday.ng

at $2,000, says Citi

Precious metal has rallied after big purchases from central banks, including China’s HENRY SANDERSON

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he price of gold could hit a record high of $2,000 an ounce within the next two years as US economic growth fades and the Federal Reserve cuts interest rates, according to analysts at Citigroup.

The New York-based bank said in a Monday research note that the precious metal could top levels last seen eight years ago, when gold surged to $1,900 an ounce, as uncertainty over the 2020 presidential election combines with a sputtering domestic economy.

Investors around the world have been drawn to gold at a time of negative bond yields, which have increased the appeal of yieldless assets such as gold. Around $15.3tn of bonds are trading at levels that guarantee buyers a loss, if the bonds are held to maturity.

The gold price has risen by 17 per cent this year to trade at $1,495 a troy ounce, putting the precious metal on track for its best year since 2010.

Citi said a combination of lower rates, growing risks of a global downturn, and strong de-

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mand among central banks could push prices higher still. Central banks are buying more gold this year than any year in the past nine, according to the World Gold Council.

“We expect spot gold prices to trade stronger for longer . . . posting new cyclical highs at some point in the next year or two,” strategists including Aakash Doshi said in Citi’s note.

Big foreign-exchange holders such as China, which has $3.1tn in reserves, have been keen to diversify their portfolios to limit exposure to the US dollar. China’s central bank has bought $4.8bn worth of gold over the past nine months.

“It does seem that gold’s status within the portfolio has been reignited,” said Suki Cooper, an analyst at Standard Chartered in New York.

The People’s Bank of China increased its holdings of gold to 62.45m ounces in August, from 59.24m in November, according to a weekend notice on its website.

That takes the bank’s total gold holdings to around $94bn at current prices.

Last year, central banks bought @Businessdayng

the most gold in 50 years, led by Russia, whose holdings of gold are now worth around $100bn.

Alistair Hewitt, a director at the World Gold Council, said that central banks across emerging markets are attracted by the liquidity of the gold market and its lack of default risk. Countries such as Russia have also adopted a clear policy of “de-dollarisation,” he said.

China is the world’s biggest producer and consumer of gold, but the precious metal makes up just 2.7 per cent of its official reserves, which are worth more than $3tn.

“Their FX reserves are so large [diversification is] going to take decades and decades,” said Bernard Dahdah, a commodities analyst at Natixis.

The precise composition of China’s foreign exchange reserves is a state secret, but officials have previously said that the currency mix is broadly in line with the composition of global reserves as indicated by IMF data collected from member countries. US dollar assets comprised 64 per cent of allocated reserves by the end of 2016, according to the latest data.

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Wednesday 11 September 2019

BUSINESS DAY

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Wednesday 11 September 2019

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NATIONAL NEWS

Who can fix Nissan?

The carmaker wants a leader who can restore a Japanese icon and break from Carlos Ghosn KANA INAGAKI IN TOKYO, PETER CAMPBELL IN FRANKFURT, LEO LEWIS IN HONG KONG AND DAVID KEOHANE IN PARIS

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or almost a year, Hiroto Saikawa defied gravity.

Against expectations, Nissan’s chief executive survived the ousting of Carlos Ghosn, a damning corporate governance probe, accusations that he signed off falsified documents, a collapse in investor support and a 95 per cent plunge in quarterly profit at the Japanese carmaker.

But Mr Saikawa’s admission last week that he was improperly overpaid finally tipped the scales.

The board unanimously agreed on Monday to remove him in a week’s time, ending a two-and-ahalf-year tenure overshadowed by quality scandals and persistent doubt about his management capability following the arrest of Mr Ghosn.

Mr Saikawa’s forced departure and the search for a new chief are pivotal events for the company and for its alliance with France’s Renault.

His exit leaves Nissan looking for a leader who can pull off the triple feat of resuscitating a Japanese icon, navigating a potential four-way global merger and making a clear break with the Ghosn era.

The new chief, who the Japanese carmaker aims to identify by the end of next month, is set to face challenges that are potentially more complex than when Mr Ghosn rescued the group from near bankruptcy in 1999.

Back then, Nissan’s financial troubles were even deeper, requiring a capital injection from Renault.

But Mr Ghosn’s solution — deep cuts in the workforce, car plants and suppliers — was straightforward at a time when the automotive industry was focusing on combustion engine vehicles.

Two decades on, in an industry facing fundamental disruption from the shift towards electric and self-driving vehicles, Nissan’s nomination committee is scrambling to find a new saviour from at least six candidates, according to people familiar with the search.

Names in the frame include Nissan’s former sales and marketing boss Daniele Schillaci; former Renault executive Carlos Tavares, who heads Peugeot owner PSA; and Toyota executive Didier Leroy, the people said.

Whoever gets the job will inherit a daunting in-tray.

The Japanese carmaker is struggling in almost all its key markets, and in July said it would cut 12,500 jobs globally in a broad overhaul.

As its performance stalled, management was preoccupied with a 10-month internal investigation into Mr Ghosn and with the breakdown in ties with Renault.

“From rebuilding its businesses in the US and Japan, product development, and management structure to recovering profitability and brand value, there are loads of issues the new CEO will need to address,” said Koji Endo, head of equity research at

SBI Securities.

The rewards could be significant if the Japanese group can find a permanent fix to its in-limbo relationship with Renault, which historically was held together by Mr Ghosn’s diplomatic skill and force of will. Mr Saikawa’s exit, people close to the companies say, could also revive negotiations over the future of an alliance that has the potential to evolve into the world’s largest car group.

But in the short term, the new boss will have the awkward task of appearing in the Tokyo district court to plead guilty, on behalf of the company, to charges that Nissan falsified Mr Ghosn’s pay in its financial statements.

Mr Saikawa has not been accused of any wrongdoing, but internal calls for his resignation grew after he admitted to improperly receiving extra pay of about $440,000 in 2013 as part of an incentive scheme that paid out cash depending on Nissan’s share price performance.

Morale within the business and regard for Mr Saikawa among staff had sunk to dismal lows. One employee responded to Monday’s news of the chief executive’s impending departure by sending pictures of champagne to friends.

With the criminal trial set to begin sometime next year, Mr Ghosn’s defence team has said he will vigorously defend against allegations of financial misconduct, all of which he denies. The legal battle also could shine an uncomfortable light on Nissan’s co-operation with Tokyo prosecutors in the recently concluded probe of its former chairman.

“The trial will obviously be a huge time diversion for anybody who wants to focus on improving the core business,” said Macquarie analyst Janet Lewis.

While Nissan has been distracted, there have been a flurry of deals as the automotive industry shifts towards electric vehicles. Toyota invested in Uber’s self-driving unit and smaller rival Suzuki, while Ford and Volkswagen have strengthened their ties to collaborate on electric vehicles and self-driving technology.

“With so many doubts about Mr Saikawa’s future, Nissan has not been in a situation where it can focus on its turnround plan,” said Takaki Nakanishi, an automotive analyst who runs his own research group. “In this age of rapid changes, a delay of three months can be fatal and Nissan has already lost valuable time.”

Nissan’s alliance with Renault was badly fractured by Mr Ghosn’s abrupt arrest and subsequent abortive merger talks between its French partner and Italy’s Fiat Chrysler Automobiles.

With the FCA keen to revive talks with Renault, people close to Nissan say the new chief must possess an international background and tough negotiation skills to demand a fix to its capital structure with Renault before any such talks resume. Renault owns a 43 per cent stake in Nissan, contrasting with the Japanese group’s 15 per cent non-voting stake in the French carmaker. www.businessday.ng

Boris Johnson is holding a series of meetings with European leaders © John Thys/AFP

Boris Johnson intensifies efforts to find a new Brexit deal PM seeks a fresh solution to the Irish border issue as DUP influence wanes

JIM PICKARD IN LONDON

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oris Johnson has vowed to double down on attempts to secure a new Brexit deal in the coming weeks, with Downing Street insisting the “priority” was to avoid leaving the bloc without a deal.

The prime minister is seeking a fresh solution to the Irish border issue, which derailed three attempts by his predecessor Theresa May earlier this year to push a deal through parliament.

Mr Johnson met Leo Varadkar, the Irish Taoiseach, on Monday and will hold talks with Arlene Foster, leader of Northern Ireland’s Democratic Unionist party, and her deputy Nigel Dodds, on Tuesday afternoon in

Number 10.

A Downing Street spokesman said Mr Johnson would be talking to other European leaders in the coming weeks to try to find a deal that other parties could support.

“We are now seeing progress beginning to take place but there is still a long way to go,” he said.

“It is going to take a lot of hard work to be able to conclude or reach a deal at that summit in mid-October.”

The UK government has insisted that the Irish backstop, designed to prevent a hard border on the island of Ireland, must be abolished. Instead officials have been floating the idea of an arrangement based on checks on agrifoods alone, along with different measures such as trusted

trader schemes and new technology, but Dublin and Brussels have voiced scepticism about the plan.

The spokesman also denied speculation that the UK could be seeking to return to the EU’s proposal for a Northern Irelandonly backstop, which is opposed by the DUP. But the DUP’s influence over the Conservative party may have waned in recent days, because its power came from giving the Tories an effective majority in the House of Commons — which it has now lost.

“The Tory party is no longer dependent on the DUP for its majority, it doesn’t have a majority,” said Nick Boles, a former Conservative minister who now sits as an independent MP.

Jack Ma retires from Alibaba Move marks first succession at one of China’s tech giants LOUISE LUCAS IN HONG KONG

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libaba, China’s most valuable public tech company, will mark its 20th birthday on Tuesday with a rite of succession: its founder Jack Ma will retire as executive chairman and hand the reins to chief executive Daniel Zhang.

It is the first transition at the top of a big Chinese tech company — peers Tencent and Baidu are still run by their founders Pony Ma and Robin Li — and in many ways the toughest to pull off.

The 55-year-old Mr Ma, China’s richest man, is a charismatic leader who built Alibaba from a shared apartment into a company worth $462bn. His successor is a low-key former accountant.

But Alibaba’s investors are unfazed. The company’s share price has risen 9.4 per cent in the year since he announced he would retire

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and Alibaba is woven into the fabric of daily life for hundreds of millions of Chinese as means of buying and selling goods, making payments and as a source of entertainment.

The company runs like a machine, say its supporters, blending the idealism and blue-sky thinking of Mr Ma with his successor’s pragmatic, bottom-line approach. Besides, as a life-long member of the partnership that controls Alibaba, Mr Ma will remain in the wings.

“Jack has left a very deep imprint across every square inch of Alibaba,” said Alan Hellawell, a partner at Jakarta-based Alpha JWC Ventures, who followed the company as an analyst from its early days.

The succession has been carefully planned and Alibaba often talks about its deep talent pool.

But Mr Ma also leaves his successor some lofty targets: by 2036 the Alibaba “economy” will create @Businessdayng

100m jobs, support 10m profitable businesses and serve 2bn customers around the world by 2036, up from around 654m currently.

Nearer term, it is targeting $1tn in gross merchandise value, the value of the goods sold on its platforms, this year, up from $853bn last year.

Mr Ma’s longer term pledges look increasingly heroic in today’s climate. The US-China trade war is souring globalisation — and has already claimed another Alibaba pledge — to create 1m jobs in America by giving small businesses there a route to sell their goods in China.

Alibaba’s own globalisation efforts closer to home, in south-east Asia and India, have yet to bear much fruit; ecommerce platform Lazada has been through various iterations since Alibaba acquired it. Overseas markets are key if Alibaba is to meet its target on 2bn customers.

Wednesday 11 September 2019

BUSINESS DAY

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FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

China scraps purchasing cap for approved foreign investors Beijing courts greater international investment as economic growth slows HUDSON LOCKETT IN HONG KONG

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hina is scrapping a quota system for foreign institutional investment, freeing fund managers to buy up stocks and bonds without a hard limit as Beijing seeks to cushion the impact of an economic slowdown and its trade war with Washington.

The State Administration of Foreign Exchange said on Tuesday evening that it had decided to scrap the overall ceiling of $300bn on total asset purchases under its qualified foreign institutional investor, or QFII, scheme.

“Henceforth, foreign institutional investors with the relevant qualifications can simply remit funds to carry out investment in securities in compliance with regulations,” the regulator said in a statement after markets in Shanghai and Shenzhen had closed.

Safe added that the move would “greatly enhance” the convenience of participating in China’s onshore market for foreign investors.

The QFII programme, launched in 2002, allows broad access to onshore stocks and bonds but participation is limited to an approved list of institutions and, until Tuesday, these were technically subject to a dollar-denominated cap on total purchases of Chinese assets. A renminbi-denominated cap applied to a parallel “RQFII” programme, initiated in 2011, was also scrapped on Tuesday.

The moves appear to be designed to “shore up” China’s balance of payments, said Stephen Gallo, European head of FX strategy at BMO Capital Markets in London, “given global trade tensions and the apparent drain on its FX reserves.”

The removal of quotas may not unleash a flood of foreign investment, however. Quotas rose dra-

matically as the twin investment programmes expanded over the years, but by the end of last month just $111bn of the total $300bn quota for all QFII investments had been used, according to Safe data.

Even so, Paul Sandhu, head of multi-asset quant solutions at BNP Paribas Asset Management in Hong Kong, said that the decision to lift QFII and RQFII limits, combined with last week’s move

by China’s central bank to cut reserve requirement ratios for most commercial banks, made it “clear that [the country] is strategically making a positive push towards adding liquidity to the financial markets and renewing [the] flow of investment into China”.

Such efforts “bode well for reducing some of the risk in the market caused by the US-China trade negotiations, among other things”, he said. He added that in the short term, a more stable exchange rate — implying steady inflows under the QFII programme — would function as a “litmus test on whether the strategy is working”.

In August the onshore renminbi, which floats within a managed trading band, saw its steepest monthly fall in more than 25 years, after Beijing allowed it to drop past Rmb7 per dollar for the first time since the global financial crisis. Analysts suggested the weakening reflected a desire by China to make its exports more competitive, offsetting the effects of US tariffs, but have warned that continued falls in the currency could encourage Chinese households and companies to pull funds from the country.

On Tuesday the onshore renminbi, which Beijing allowed to drop past Rmb7 a dollar for the first time since the global financial crisis early last month, was 0.2 per cent firmer late in the Asia day at Rmb7.1054.

WeWork bonds tumble as fears for IPO grow The property company’s largest outside investor has urged the group to shelve the IPO ERIC PLATT AND JAMES FONTANELLA-KHAN IN NEW YORK

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eWork bonds tumbled on Tues day after the Financial Times reported that the unprofitable property company faced pressure from its largest outside investor to pull a hotly anticipated initial public offering.

SoftBank, which together with its Saudi Arabia-backed Vision Fund have ploughed more than $10bn into New York-based WeWork, has urged the group to shelve the IPO after it received a cool reception from potential investors, several people briefed on the matter said.

Prices for the bonds, which WeWork sold last year, had surged above the 100 cent mark on the dollar last month after the com-

pany unveiled its IPO plan and a new $6bn debt facility. However, the $6bn borrowing is contingent on the group raising at least $3bn in its flotation.

The more than $702m of debt, which WeWork borrowed last year, dropped roughly 3 cents on the dollar to trade at 98 cents on Tuesday, according to bond trading platform MarketAxess.

Advisers to WeWork were still testing investor appetite for the IPO at a drastically lower valuation of between $15bn and $20bn.

The group, which is led by its co-founder and chief executive Adam Neumann, was valued at $47bn when SoftBank injected $2bn into the group earlier this year.

The drop in the bond prices sent the yield up roughly 70 basis points to 8.3 per cent. www.businessday.ng

During her time as Federal Reserve chair, Janet Yellen warned the US Congress of the dangers of bumping up against debt limits

Why aggressive monetary easing is pushing on a string Japan’s experience shows that incentives do not work when people are very wary of debt RICHARD KOO

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he fear of “Japanisation” has, once again, prompted monetary authorities on both sides of the Atlantic to consider additional monetary easing — but for all the wrong reasons. The extended periods of slow growth and low inflation seen in Japan since 1990 and in the west since 2008 are caused by the disappearance of borrowers, not by the lack of lenders. Monetary policy, which controls the availability of financing, does not work well when there is no appetite for debt.

The Japanese demand for borrowing disappeared after the bursting of its bubble in 1990. During the process, commercial real estate prices fell almost 90 per cent nationwide, falling back to the levels of 1973, destroying the financial health of all those who borrowed to purchase property and those who used it as collateral for borrowing.

With pre-1990 liabilities still on the books but no assets to show for them, millions of borrowers started to pay down debt to remove their debt overhang, even with zero or negative

interest rates. It was a journey that took nearly two decades to complete.

Regaining financial health is a must for individual households and businesses. But when everybody does it at the same time, not only do borrowers disappear, but the economy also implodes. This happens because at the national level, if someone is saving money, including paying down debt, someone else must be borrowing and spending those funds to keep the economy going.

In an ordinary economy, interest rates adjust, often with central bank help, to make sure that all saved funds are borrowed and spent. For example, when the economy is strong, with too many borrowers relative to savers, interest rates are raised to discourage some borrowers. Where there are not enough borrowers, the reverse applies.

When a large part of the private sector is preoccupied with debt overhang and not borrowing money, the un-borrowed savings stuck in the financial sector become a leakage to the income stream, pushing the economy into

a deflationary spiral called a balance sheet recession.

During the Great Depression, which was the last time this type of recession was allowed to continue unattended, the US lost 46 per cent of its nominal gross national product from 1929 to 1933.

Post-1990, Japan suffered balance sheet damage that was three times larger as a percentage of gross domestic product than the damage the US sustained during the Great Depression. But instead of shrinking 46 per cent, Japan’s GDP in both nominal and in real terms never fell below the peak of the bubble, and its unemployment rate never rose above 5.5 per cent.

This miraculous achievement in the face of massive private sector deleveraging was made possible by the government borrowing and spending the excess savings in the private sector.

Today, Japan’s unemployment rate is 2.3 per cent and private sector balance sheets are fully repaired. But businesses are still not borrowing because of the trauma created by the dreadful experience of paying down debt. The Ameri-

L Brands chief Wexner ‘embarrassed’ by Epstein relationship Billionaire behind Victoria’s Secret seeks to distance himself from disgraced financier ALISTAIR GRAY IN NEW YORK

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es Wexner, the 82 year-old head of Victoria’s Secret owner L Brands, has said he is “embarrassed” by his relationship with “depraved” money manager Jeffrey Epstein.

The billionaire was for decades a client of Epstein, who committed suicide last month while awaiting trial on charges of sex trafficking underage girls.

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Mr Wexner used introductory remarks at L Brands’ investor day in Ohio on Tuesday to further distance himself from the indicted sex offender.

The chief executive said he had been “taken advantage of”

by Epstein, describing him as “depraved” and his behaviour “abhorrent”. It was “something that I’m embarrassed I was even close to,” he said at the event, adding it was “in the past”.

In August Mr Wexner wrote @Businessdayng

in a letter to members of the Wexner Foundation that Epstein had “misappropriated vast sums of money” from him and his family. He said it came to light in 2007 when Mr Wexner sought to unwind his relationship with the money manager.

“We are all at some point betrayed by friends,” he added on Tuesday. “Everyone has to feel enormous regret from the advantage that was taken of so many young women.”

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Wednesay 11 September 2019

BUSINESS DAY

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Wednesday 11 September 2019

BUSINESS DAY

45

Live @ The Exchanges Market Statistics as at Tuesday 10 September 2019

Top Gainers/Losers as at Tuesday 10 September 2019 LOSERS

GAINERS Company

Opening

Closing

Change

N21

N22.25

1.25

MTNN

N138.05

N138.5

FBNH

N4.65

GUARANTY ZENITHBANK

DANGFLOUR

Company

ASI (Points)

Opening

Closing

Change

NESTLE

N1136

N1080

-56

0.45

CCNN

N17.4

N16.25

-1.15

N5

0.35

DANGCEM

N155.7

N155

-0.7

VOLUME (Numbers)

N26.5

N26.85

0.35

FO

N14.5

N14

-0.5

VALUE (N billion)

N18

N18.2

0.2

UACN

N6.6

N6.2

-0.4

DEALS (Numbers)

MARKET CAP (N Trn)

27,047.58 4,629.00 364,217,529.00 4.862

Global market indicators FTSE 100 Index 7,267.95GBP +32.14+0.44% Generic 1st ‘DM’ Future 26,848.00USD +8.00+0.03% S&P 500 Index 2,968.75USD -9.68-0.32%

13.158

Deutsche Boerse AG German Stock Index DAX 12,268.71EUR +42.61+0.35% Nikkei 225 21,392.10JPY +73.68+0.35% Shanghai Stock Exchange Composite Index 3,021.20CNY -3.54-0.12%

Nestle, CCNN, 10 others cause stock market’s additional N20bn loss

C&I Leasing files application with SEC for N3.2bn Rights Issue

Iheanyi Nwachukwu

Iheanyi Nwachukwu &I Leasing Plc has notified its esteemed shareholders, stakeholders, the Nigerian Stock Exchange (NSE) and the general public, that the Company has filed an application with the Securities Exchange Commission (SEC) for approval.

C&I Leasing Plc is seeking approval to undergo a Rights Issue of 539,003,333 ordinary shares of 50kobo each at N6 per share.

The rights issue to existing shareholders will be on the basis of 4 new ordinary shares for every 3 ordinary shares held. The qualification date for the Rights Issue is Wednesday September 4, 2019, according to Septem-

ber 9 notice at the Exchange signed by Mbanugo Udenze & Co, Company Secretary.

Subject to the approval of the SEC, the company shall hold a signing ceremony to execute all offer documents before opening the offer in line with the approval obtained.

Rights circular will be distributed to shareholders while application forms would also be made available on the website of the company’s Registrars for ease of access.

Before now, D ealing Members of the Exchange were notified that C&I Leasing Plc through its Stockbroker, CSL Stockbrokers Limited, submitted an application to the Nigerian Stock Exchange for the approval and listing of the Rights Issue.

for data and detailed disclosure information to make sound investment decisions. This is one of the ways we are contributing to the attainment of Nigeria’s National Financial Inclusion Strategy of reducing the proportion of adult Nigerians that are financially excluded to 20 per cent in the year 2020”, he said.

Chiemeka noted that the app will support “our efforts at financial literacy and inclusion by bringing the capital market to the fingertips of market enthusiasts and spark new interest for potential investors”.

“X-Mobile will complement the NSE website and other NSE

portals currently being used to provide information to market stakeholders. We will continue to leverage technology with a customer-centric focus to make financial services more inclusive and to provide a superior customer experience in the access and use of capital”, he further added.

On his part, the Head of Strategy and Research at the NSE, Okon P. Onuntuei, stated that “we are extremely excited about launching X-Mobile.

This app is one of many ways of reaching our ambitious goal to enlighten 25 million retail investors in Nigeria and diaspora.

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igerian stock investors booked another N20billion loss on Tuesday September 10 following a persisting bearish trend on the local Bourse.

This cumulative loss comes despite the market recording 18 gainers as against 12 losers.

Amid stubborn sell pressure the equities market closed on a negative note as the benchmark performance indicator – the NSEASI – depreciated by 0.16percent to close at 27,047.58 points as against preceding day high of 27,089.84 points.

The stock market’s year-to-date (YtD) return currently stands at -13.94percent. The value of Nigeria’s listed stocks decreased to N13.158trillion from preceding day high of N13.178trillion.

Nestle Nigerian led the league of laggards after its share price moved down from N1136 to N1080, losing N56 or 4.93percent, followed by Cement Com-

...4 new ordinary shares for every 3 held

pany of Northern Nigeria which dipped from N17.4 to N16.25, after shedding N1.15 or 6.61percent; and Dangote Cement Plc which declined from N155.7 to N155, losing 70kobo or 0.45percent.

Some market watchers expect equities to remain pressured in the short term despite their attractiveness from fundamental and technical analysis perspective.

It is worthy to note that the current price levels offer investment opportunity for bargain hunters.

Also on the losers table is Forte Oil Plc which dropped from N14.5 to N14, down by 50kobo or 3.45percent, while UACN made the top laggards table, from N6.6 to N6.2, losing 40kobo or 6.06percent.

On the gainers table, Dangote Flourmills Plc led the pack after its share price moved from N21 to N22.25, up by N1.25 or 5.95percent.

MTNN Plc followed, from N138.05 to N138.5, up by 45kobo or 0.33percent, while FBN Holdings Plc rose from N4.65 to N5, adding 35kobo

or 7.53percent.

Also, the share price of GTBank Plc advanced from N26.5 to N26.85, adding 35kobo or 1.32percent, while that of Nigerian Breweries Plc moved up from N50.55 to N50.75, after adding 20kobo or 0.40percent.

In 4,629 deals, equity traders exchanged 364,217,529 units valued at N4.862billion.

GTBank Plc, Courtville Plc, Access Bank Plc, Zenith Bank Plc, and FBN Holdings Plc were actively traded stocks on the Nigerian Stock Exchange (NSE) on Tuesday.

NSE to boost investors’ participation with mobile app Iheanyi Nwachukwu

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he Nigerian Stock Exchange (NSE) is set to launch X-Mobile, a dynamic and userfriendly mobile app, to enhance investors’ participation in the Nigerian capital market.

The NSE mobile app which is currently in its Beta state will be launched at the 2019 NSE Market Data Workshop taking place on Wednesday, September 11, 2019 in Lagos.

X-Mobile is designed to provide market participants, especially retail investors, convenient, faster and real-

time access to The Exchange’s activities. It features market snapshots, stock prices, market analytics, financial news, dealing members directory and trade simulation.

With X-Mobile, users can create personalized watch lists to keep track of chosen securities, eliminating the need to access multiple information sources. X-Mobile is available free of charge on Google Play store for download for Android smartphones. The IOS version is now in the testing phase.

Speaking on the launch of X-Mobile, the Divisional Head, Trading Business, NSE, Jude Chiemeka, noted that the www.businessday.ng

delivery of the NSE Mobile App is consistent with NSE’s new strategic intent to leverage on the Fourth Industrial Revolution (4IR) and the era of Digitisation to enhance the

operation of the market. “ The introduction of X-Mobile is part of our engagement strategy with existing and potential investors who now have increased thirst

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46

Wednesday 11 September 2019

BUSINESS DAY

news

‘Think automation first to increase productivity, improve bottom-line’ KELECHI EWUZIE

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eading professionals in consulting, audit, tax and advisory services have identified the adoption of Robotic Process Automation (RPA) as a critical requirement to increase productivity and improve the bottomline for Nigerian businesses.

They observe that RPA enables machines mimic human actions and judgment with robots (software codes) using automation, insights and engagement to drive real business outcomes.

In addition, RPA leverages advanced software algorithms like artificial intelligence and machine learning capabilities to handle high-volume, repetitive tasks that previously required humans to perform. These tasks can include queries, calculations, and maintenance of records and transactions.

Yemi Saka, consulting leader, Deloitte West Africa, says there is an accelerated demand to simplify business processes, increase efficiency and reduce cost within organisations.

Saka, while speaking at a CSuite breakfast session hosted

by Deloitte in partnership with

UiPath in Lagos, highlighted the readiness of Nigerian businesses to embrace RPA. The programme with the themed “Think Automation First” showcased RPA technology and how businesses across industries can streamline processes, increase productivity and improve the bottom-line.

Deloitte, among other services, drives and shapes today’s marketplace - delivering measurable and lasting results that help reinforce public trust in the capital markets, inspires clients to see challenges as opportunities to transform and thrive and help lead the way toward a stronger economy and a healthy society.

Speaking at the event, Sumeet Sangawar, UiPath Customer Success Director MEA, said RPA would definitely transform businesses for the better, and further explained that through the partnership with Deloitte more businesses in Nigeria would be able to take advantage of the latest RPA trends.

Deloitte and UiPath representatives, using insightful and interactive use case demonstrations, showcased how RPA could increase productivity across industries.

L-R: Greg Anyaegbudike, Federal Team Leader, PERL; Benjamin Ogu Okolo, national coordinator and OGP Point of Contact (PoC) Nigeria; Seun Ojo, representing co-chair; Edet Ojo, executive director, Media Rights Agenda; Abubakar Malami, minister of justice; Dasuki Ibrahim Arabi, director-general, Bureau of Public Service Reforms, and Anne Nzegwu, director, reform coordination and service improvement, Federal Ministry of Finance, Budget and National Planning, at the Stakeholders validation retreat to finanlise the 2nd Nigeria Open Government Partnership (OGP) National Action Plan (NAP) at Transcorp Hilton, Abuja.

CBN to subsidise mortgage rate to single digit in 2019 Endurance Okafor

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entral Bank of Nigeria (CBN) is at the final phase of commencing mortgage subsidy, with plans for the country to have a single-digit interest rate before the end of 2019, an Abuja-based industry player told BusinessDay on Tuesday.

According to the source that is part of the committee working on the mortgage policy in Nigeria, the recent removal of the cap MRP+ 5 percent on mortgage interest rate by the apex bank is in line with the plans for the regulator to achieve the single-digit mortgage rate.

“The new policy is in preparation for the single digit interest on mortgages. The CBN has gotten to the board of governance for approval and before

Sylva confirms FG’s plans to tackle crude oil theft, attract key investment HARRISON EDEH, Abuja

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inister of State for Petroleum Resources, Timpreye Sylva, has disclosed the Federal Government plans to deliver Final Investment Decisions (FIDs) on at least four key projects within the nation’s oil and gas industry by the end of last quarter this year.

Sylva, who represented President Muhammadu Buhari, said this while speaking at the ongoing 24th World Energy Congress (WEC) in Abu Dhabi, United Arab Emirates, on Tuesday.

Sylva said his vision was to bequeath a vibrant petroleum industry, which shall guarantee long-term strategic investments and prosperity for Nigerians.

“My plan is to ensure that during my tenure, four Final Investment Decisions (FIDs) are taken. I am sure that within the next quarter, we should be able to conclude on some of these FIDs so as to grow the industry,” the minister stated.

He highlighted gas development as part of government priority to fast track the indus-

trialisation drive of the country.

“As you are aware, we are focusing on the Ajaokuta-KadunaKano (AKK) pipeline project which will address some of our power issues and encourage the setting up of local industries and businesses along different areas in Nigeria.”

The minister also shed more light on the imperative of rehabilitating the nation’s refineries, saying that it was unsustainable for Nigeria to continue to import petroleum products.

He further stated that while private investment in the refining sector was encouraged, government should focus more on the repair of its existing refineries.

“People are talking about modular refineries, we know that modular refineries are part of the solution but they can only be part of the solution and not the solutions themselves. So, we are going to try to encourage modular refineries but before that, we are going to really focus on repairing the existing refineries to ensure that we are back on stream very shortly,” he said.

ALAT by Wema bags Best Digital Platform Nigeria 2019 Award

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LAT by Wema, Africa’s first fully digital bank, has emerged Best Digital Platform in Nigeria 2019 by International Business Magazine, a leading global journal that promotes flagship talent bearers from across the globe.

Having met the award criteria for the year under review, the banking platform powered

by Wema Bank was judged the winner by a deciding panel in recognition of its simplicity and refreshing service delivery.

ALAT by Wema is a borderless banking app that offers an easy signup process, exciting saving options and other benefits to help customers achieve their personal and financial goals.

Created in 2017, ALAT has continued to attract international recognition as a unique digital banking platform in the country. The platform is part of Wema Bank’s vision to be the financial institution of choice in service delivery and superior returns.

the year ends they would have commenced the subsidy and mortgages will be accessed with single digit interest,” the source said on the condition of anonymity.

High mortgage rate is considered one of the key culprits of Nigeria’s housing challenge. Typical mortgage in Nigeria ranges between 7-10 percent for Federal Mortgage Bank of Nigeria (FMBN) and between 15-25 percent for commercial mortgage institutions, one of the highest in the world.

This has made mortgage as a means of acquiring properties in Nigeria a less attractive option especially for many whose purchasing power was eroded from the country’s five quarter recession.

With the highest population in Africa, Nigeria has housing deficit of more than

YOA Insurance Brokers takes insurance advisory to NBA confab Daniel Obi

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OA Insurance Brokers Limited took its insurance advisory services to the recently concluded 2019 General Conference of the Nigerian Bar Association (NBA). The weeklong event, with the theme ‘Facing the Future’ was borne out of the pressing need to lay a sustainable foundation for an optimistic future.

The event took place between August 23 and 29, 2019, in Lagos, with the exhibitions holding at the Harbour Point Event Centre, Lagos.

According to a statement, the NBA conference participants avidly took turns to visit the YOA Insurance Brokers booth where they were exposed to a dossier containing a comprehensive collection of statutory and voluntary insurance benefits products and solutions. The products offered, help employers reduce costs associated with human resources administration and offer the employees benefits that will improve engagement, productivity

www.businessday.ng

and loyalty.

As a foremost provider of insurance and re-insurance services, YOA advocates that professionals should embrace insurance to minimize risks to their businesses as detailed in the bouquet of Employee Benefits solutions they exhibited at the NBA 2019 Conference.

Afam Linus Anijekwu, managing solicitor of Afam Law Consult, according to the statement, appreciated the team for an excellent outing at the conference and noted that there was a need for more organisations like YOA to help in making more information available so that more lawyers could tap into the world of insurance. He also observed that insurance knowledge is still at its young stage in Nigeria.

Nneka Obike, law officer, Ministry of Justice, who also commended the YOA team said, “I feel that, with more of this kind of presentation, insurance in the next five years would be better perceived and received and there will be renewed confidence in the insurance sector.”

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17 million units and more than 90 percent of new homes that are built in the country utilise funds from personal savings.

With single-digit interest rates in some other countries, mortgage industry contributes a significant amount to economic growth and development this is however not the case in Nigeria as the roaring inflation rate and the attendant high mortgage rate has not only dampened housing demand but has reduced developers’ investment appetite.

Africa’s largest economy has one of the world’s lowest mortgages to Gross Domestic Product (GDP) ratio at 0.6 percent. This lags Ghana’s 2 percent, South Africa’s 30 percent and crawls after the US and UK rates of 60 percent and 70 percent, respectively.

“The biggest problem in the sector is high cost of the very

limited mortgage that is available. If they can develop policy to ease housing finance, it will be impactful,” Wole Olabanji, the CEO of CoBuildIT, a Lagosbased real estate firm, said.

On the September 6, 2019, the CBN said in a circular signed by Kevin Amugo, director, financial policy and regulation department, that the “maximum MPR + 5%” was no longer applicable to all financial institutions in Nigeria.

According to industry players, the new CBN policy could see mortgage rate climb even higher than the current rates, as financial institutions will no longer have a regulated cap added to the MPR. “I think the Central Bank is trying to see if the market can regulates itself,” Roland Igbinoba, founder, Pison Housing Company, told BusinessDay by phone.

BoI increases intervention in ravaged Northeast with N2.4bn to restore economic activities HARRISON EDEH, Abuja

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ank of Industry (BoI) has increased intervention in the ravaged North-eastern Nigeria with about N2.4 billion committed so far, geared towards embarking on rebuilding the economic life in the ravaged region.

Olukayode Pitan, managing director of the bank, gave the information on Tuesday in Abuja while speaking on the topic: “Investment and entrepreneurship for resilient communities - the missing link,” during a BoI organised event geared towards the restoration of economic life of the people in the ravaged area.

The fund, he said, is designed as a base for kick starting local commerce within the ravaged region while addressing concerns of persons affected by conflict.

Pitan recalled that in the last four years the bank had provided assistance of about $2 billion to over 7,000 enterprises in the country, while creating job for over 2.7 million persons.

He noted that the BoI has been involved in several pov@Businessdayng

erty reduction initiatives. The bank has been working with the Presidency on N-Power and Growth Enhancement and Empowerment programme, which has seen lending of over N51 billion to over 2.3 million entrepreneurs.

He informed that the bank had been involved in the economic rebuilding plan of the North East, through the North East rehabilitation fund.

Through this initiative, the bank has committed over N4 billion of its fund, which is easily accessible, collateral free interest loans.

It would be noted that more than 2 million persons have been displaced, while creating massive humanitarian crisis.

At the root of these crisis, the bank’s managing director pointed out two critical issues of unemployment and rising poverty as a major source of concern fuelling the crisis.

According to Pitan, “Unemployment is quite high in Nigeria at 23.1%, and the highest unemployment rate in the last 10 years.

Roughly 21 million Nigerians are unemployed. This is the highest recorded in recent times.”

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news

2020 budget tops agenda, as Buhari holds first cabinet meeting Tony Ailemen, Abuja

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L-R: Oladipo Maiye, partner/head, oil/gas and power, Andersen Tax; Joshua Banfo, partner/head, transfer pricing, Andersen Tax; Michael Ango, associate director, Andersen Tax; Chioma Okey Agwu-Gwu, head, South West office, NITDA; Ogochukwu Isiadinso, associate director, Andersen Tax; Femi Daniels, desk officer, data protection, NITDA, and Chinedu Ezowike, partner/ head, commercial practice, Andersen Tax, at the data protection sensitisation seminar in Lagos.

Pic by Pius Okeosisi

Investors see opportunities for construction industry in Nigeria’s housing deficit, population CHUKA UROKO

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oreign investors, especially those involved in construction, are increasingly looking to Nigeria with a view to investing in the country to tap into the huge opportunities, which they see in the country’s housing deficit and its growing population.

Nigeria’s growing housing deficit, estimated at 20 million units, is a big challenge to all housing sector stakeholders in the country, but construction industry investors see it differently. The country’s population is also growing and, according to figures from the National Bureau of Statistics (NBS), the population is growing faster than the country’s GDP at 2.1 percent per annum.

Ben Greenish, senior vice president of dmg events, organiser of the ongoing ‘The Big

5 Construct Nigeria’ workshop and products exhibition in Lagos, says the housing deficit presents a huge opportunity that shows the future of the construction industry in Nigeria is as bright as it is promising.

Greenish, who spoke with BusinessDay on the sideline of the construction event, hinges his argument on the growing population which, he explains, is a demand driver for housing which, in turn, would increase activity in the construction industry for the provision of housing and infrastructure.

In his keynote speech at the workshop, Abdulla Al Mandoos, the Consul General at UAE Consulate in Nigeria, corroborated Greenish’s views, noting that Nigeria’s population had been projected to hit 400 million by 2050, stressing it would create huge demand for housing.

The Consul General pointed

out, however, that the country needed to build more infrastructure, saying, “We see a huge demand in both housing and infrastructure and government is keen on developing infrastructure. No economy will develop without infrastructure.

“The country needs proper infrastructure to develop the economy. The country wants foreign investors to come and open businesses here. The investors need proper infrastructure and they also need housing.”

Al Mandoos disclosed that the housing industry was one of the priority industries for them at UAE. Others are oil and gas, agriculture, entertainment and new media. “But we need a partnership with the government to ensure that this is properly done. We have started discussion on this with the government; the process has already started,” he said.

The envoy, who spoke on ‘Financing, Promoting and Expanding the UAE-Nigeria Trade,’ disclosed further that UAE was planning to create a trade hub that would make the trade relationship between the two countries easy, safe and innovative.

He added that the UAE had a fund donation, which they were working hard to see how Nigeria could benefit from.

head of the planned return to the January to December budget cycle, the 2020 budget is expected to top agenda, as President Muhammmadu Buhari and his ministers meet for the first Federal Executive Council (FEC), since the inauguration of the President for second tenure.

The cabinet is expected to use the meeting to cover lost grounds, coming more than 100 days after the President’s inauguration President Buhari had charged the ministers on their inauguration, to ensure they work to achieve the target of delivering on Federal Government policies and projects as listed for the periods of 2019 -2023.

Already, the Economic Management Team (EMT), headed by Vice President Yemi Osinbajo had met consistently in the past few weeks to fine tune the 2019 - 2021 Medium-Term Expenditure Framework and Fiscal Strategy Paper, a necessary precursor to the presentation of the budget, for approval, at today’s meeting of the FEC. The Medium-Term Ex-

Nigeria lags 110 countries in IMF’s maiden trade uncertainty index SEGUN ADAMS

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ising global trade tension puts Africa’s biggest economy at risk as Nigeria comes behind 110 other countries in the International Monetary Fund’s (IMF) new measure for the level of trade uncertainties across the world.

Nigeria improved quarteron-quarter to an index point of 6.237 in the second quarter of 2019, but lags the global average of 3.028, data published by the Washington-based fund Monday show.

The World Trade Uncertainty Index is a quarterly data that tracks trade uncertainty across 143 countries and is acclaimed by the IMF to be a pioneering measure of uncertainty related to trade among a large set of advanced and developing economies. A higher score connotes a greater level of uncertainty.

The newly minted measure has been created amid a trade war between the United States and China that has depressed global financial markets and dampened the

growth of economies around the world. The importance of the index according to the IMF is a relationship between the increase in uncertainty and significant output declines.

Already the effect of the tariff war is weighing on the outputs of China and United States, the biggest economies in the world; Beijing’s economy slowed to a 27-year low while Washington’s also disappointed in the second quarter. The ripple effect of trade uncertainties is felt in other parts of the world- mostly in advanced economies.

“Based on our estimates, the increase in trade uncertainty observed in the first quarter of 2019 could be enough to reduce global growth by up to 0.75 percentage point in 2019,” the IMF said. It maintains a pessimist outlook on global growth with forecast at 3.2 percent in 2019, picking up to 3.5 percent in 2020.

The index assesses trade uncertainty from 1996 but shows increased uncertainty starting around the third quarter of 2018; the period coinwww.businessday.ng

cides with a heavily publicised series of tariff increases by the United States and China.

Trade uncertainty, however, declined in the fourth quarter of 2018 following announcements of a truce by the US and Chinese officials at the G-20 meeting in December in Buenos Aires however the respite was brief as uncertainty surged significantly in the first quarter of 2019 following a substantial expansion of American tariffs on imports from China on March 1.

For Nigeria, the level of uncertainty spiked to 11.252 in the first three months of 2019 as global risk soared to an alltime high by IMF’s measure.

This was the first time since 1996 the measure was greater than zero and Nigeria ranked 117 out of 143 countries, according to BusinessDay computation.

As global uncertainty level fell, Nigeria was able to improve six notches lower as the country cut its gap to the world average by half to 3.209. The deviation to global levels was by 6.612 basis point in the first quarter. https://www.facebook.com/businessdayng

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penditure Framework (MTEF) and Fiscal Strategy Paper (FSP) is a three-year transparent planning and budget formulation tool used for linking policy, planning and budgeting over a medium-term.

The policy consists of the macroeconomic model that indicates estimates of revenues and expenditures, fiscal targets, risks as well as government financial obligations.

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Thebigread J&J: The next target of anger over America’s opioid crisis?

BUSINESS DAY

Wednesday 11 September 2019 www.businessday.ng

Trust in one of the nation’s most trusted brands has been eroded by a court ruling in Oklahoma Hannah Kuchler in New York

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hen Alex Gorsky, chief executive of Johnson & Johnson, spoke to a room full of business leaders last year, he described the company’s 75-year old “credo” as its “special sauce”. It was this statement of corporate social responsibility — crafted decades before the term became overused PR — which he said had guided the world’s largest healthcare company to become a solid, long-term investment.

He told the group that the document was so important that it rated employees with a “credo score” linked to their performance.

But J&J’s prized reputation as a trusted consumer and pharmaceutical brand is now under threat, after a judge in Oklahoma found late last month that the company had played an important role in the biggest public health crisis in the US: the opioid epidemic that killed close to 50,000 people in 2017 alone, according to the US Centers for Disease Control and Prevention.

The verdict — and the $572m it has been ordered to pay in recompense — is just the beginning of what could be years of lawsuits examining how the company sold its opioid products and manufactured raw ingredients which it sold to larger opioid makers including Purdue Pharma. The family-friendly J&J brand risks being scarred by the accusation, levelled at it in the Oklahoma trial, that it has behaved as a “drug kingpin”.

Patrick Trucchio, an analyst at Berenberg, says that even though J&J was a smaller player in the sale of opioids, the Oklahoma case shows there is so much “anger” about the crisis that you can get “wild” verdicts. He believes J&J’s solid business will weather the storm — but warns that investors are “terrified” such a safe bet now looks more risky.

“They want to make sure it’s a sleepy, boring bond-like equity, not something that will turn into Bayer with Monsanto,” he says, referring to the German chemical company’s legal battles over whether its Roundup herbicide causes cancer.

The opioid lawsuits come as J&J is fighting on several legal fronts. It is fighting a string of lawsuits from parties who claim that its trademark talcum powder contained asbestos and caused cancer, with the US Department of Justice also probing the allegations. The group has faced other suits that claim it failed to warn that its blood-thinner Xarelto increased the risk of internal bleeding, which J&J and Bayer settled in March for $775m, and that it did not adequately list the risks of its vaginal mesh implant.

J&J denies these charges and

has already won appeals in some of the cases — but the allegations could linger in the minds of Americans who are already critical of the wider pharmaceutical industry.

Pharma companies have a “public responsibility”, says Lewis Nelson, chair of the department of emergency medicine at Rutgers New Jersey Medical School.

“Unfortunately, pharma companies aren’t like other companies.

Just like doctors aren’t like other people, we take an oath and are bound by it,” says Dr Nelson. “The opioid epidemic is a great example of how everything can go wrong.

They all got on the gravy train behind Purdue and, unfortunately, they are suffering for being part of the problem.”

J&J was never a large part of the opioid market in the US — it had less than 1 per cent of the market in Oklahoma — but the judge in the case did find that it followed a similar marketing plan to other larger manufacturers.

The state showed the court a presentation developed by McKinsey in 2002 for a series of workshops with J&J. The consulting

sets in the manufacture of the raw material for opioids — Tasmanian Alkaloids and Noramco — to SK Capital, a private investment firm.

In a 1998 letter exhibited at the trial, an executive from Noramco wrote to Purdue Pharma — then known as Purdue Frederick — to say that “gaining access to raw materials on a worldwide basis . . . simply cannot be provided by any other company”.

Sabrina Strong, outside counsel for J&J, said consultants present many ideas that go unused but that the products were marketed responsibly within a strictly regulated environment. She added that Noramco’s sales of raw materials were authorised by the US Drug Enforcement Agency, there was no evidence that it broke any rules and it was never Purdue’s sole supplier.

Shares in J&J initially rose after the Oklahoma judgment as analysts wrote that the $572m abatement plan was lower than some had expected — and far less than the $17bn the state had requested.

J&J also plans to appeal.

But the judgment opened the way for far more uncertainty. The

just how many more lawsuits are to go before the end of the road,” says Harry Nelson, a lawyer and author of The United States of Opioids.

J&J is likely to be able to shoulder the immediate financial costs of more cases — it had $14.4bn in cash and equivalents at the end of the last quarter. But it also faces much greater reputational damage.

The lawyers in the Oklahoma case — the first against J&J to go to trial — saw exposing the group’s role in the opioid market as crucial. “In this case, justice included showing the world in broad daylight exactly how J&J created the crisis in Oklahoma and profited hugely from doing so,” says Brad Beckworth, a partner at Nix Patterson and one of the lead trial lawyers for the state. “Very few people were even aware of J&J’s dominant role in the opioid epidemic.”

Elizabeth Burch, a law professor at the University of Georgia, says that even if the Oklahoma trial does not set precedents, it has exposed evidence that few people were aware of, such as J&J’s previous ownership of two subsidiaries that were major players in the manufac-

About 2m Americans are addicted to opioids. The epidemic cost the country $500bn in 2015, say economists © Reuters

company suggested that J&J target “high abuse-risk patients (eg males under 40)” with its drug Duragesic, a patch based on fentanyl, an opioid that is 50-100 times more potent than morphine. According to the plaintiffs. J&J explored questions such as: “are certain physician specialitiesmore or less likely to prescribe long-acting opioids?”; and “can we influence flows to take advantage of this difference?”.

In 2015, J&J started to move away from its opioid businesses.

It sold the US rights to Nucynta, opioid-based pills and an oral solution, to California-based Depomed for just over $1bn. It stopped marketing Duragesic in 2008, though it still sells it.

A year later, it divested its as-

company is already named in a mass litigation brought by 2,000 municipalities, set for trial in October. Legal experts believe the verdict could incite the interest of more plaintiffs, including state attorneys-general who have so far focused on Purdue Pharma, the maker of the OxyContin opioid, owned by members of the billionaire Sackler family. While Purdue — which has offered between $10bn and $12bn to settle outstanding opioid legal actions according to people familiar with the matter — is considering bankruptcy, J&J and its deep pockets are a more attractive target for litigants.

“When I look at the share price going up, I think that’s a sign that people aren’t fully comprehending

ture of raw opioid materials.

The Sackler family had been targeted with protests in galleries, which bear the philanthropists’ name, and Purdue had a giant sculpture of a heroin spoon dropped outside its headquarters, but activists have yet target J&J. That may be to about to change.

Nan Goldin, the photographer who leads the Pain activist group against opioid makers, says the focus of protests is extending beyond Purdue. She has a blunt message for Mr Gorsky: “Pay back the money you’ve made. You’ve deceived the public enormously.”

After a criminal contaminated some Tylenol bottles in Illinois in 1982, J&J pulled the painkiller from shelves across the country.

It sacrificed a core product, which made almost 20 per cent of its sales for customer safety, enhancing its reputation and becoming a business school case study in the process.

Taking action to address its current troubles is more complicated.

A legal strategy to fight lawsuits that could ultimately save it billions of dollars runs the risk of causing more damage to its reputation.

Morning Consult, a survey company, says it has not yet seen any dent in its reputation — probably because its brands are “deep rooted” in American households.

Yet the Reputation Institute, another company that does surveys on behalf of big brands, says J&J’s reputation had fallen from “strong” to “average” as the Oklahoma trial opened in May. In 2016, the company had been in their top 10 most reputable companies in the US. Now it is not even in the top 100.

Rupert Younger, director of Oxford university’s Centre for Corporate Reputation, says J&J faces “heightened expectations” because of its own history and the push to hold companies more accountable to stakeholders. Mr Gorsky was a spokesperson for the Business Roundtable when it announced last month that the purpose of a company was not just to make money for shareholders.

“It is a new world for executives.

Pharma is undoubtedly going to have a real transition period,” says Mr Younger.

J&J is running an advertising campaign to defend its talcum powder. “Our talc is safe,” says one ad in major print and online outlets. Alexandra Lahav, a law professor at the University of Connecticut, says the ads imply there is no evidence of bad conduct at the company. But should any evidence come to light about hidden or manipulated evidence, she says, it would be “really bad for their brand” — even if the science was on their side.

David Vinjamuri, an adjunct assistant professor of marketing at NYU and a former J&J employee, says the group’s “halo” came from the consumer side of the business, especially the “careful nurturing of the whole baby franchise” that was crafted to give it a gentle, caring reputation. He says this carried over to the pharmaceutical and medical device business, where executives were able to sell products with “a brand name these people knew when they were children”.

J&J says it has to fight the talcum and opioid cases because it believes it is right. A spokesperson adds that it must “responsibly address litigation . . . This means being willing to go to trial when the science, facts and law are on our side, but also being open to resolving cases through settlement as necessary”.

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