BusinessDay 13 Nov 2019

Alaghodaro 2019: Reforms, people-oriented policies will earn me 2nd term - Obaseki

…as Edo APC suspends Oshiomhole following vote of no confidence … We’ll empower 18,000 women with micro-grant – Halima Dangote IDRIS MOMOH

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he Edo State Governor, Godwin Obaseki has said far-reaching reforms and people-oriented policies that have changed the fortunes of the state and restored hope, are among the many reasons that would earn him a second term in office.

Governor Obaseki said this at the Alaghodaro 2019 Summit held in Benin City, the Edo State capital, to celebrate his third year in office.

Obaseki said, “In spite of the very difficult and uncertain political environment in which we have operated in the last one year, we are grateful to God that we are able to achieve all these successes recorded, particularly engendering hope in the youths and people of Edo State by showing them pathways to fulfilling and successful lives.

“Next year is an election year in Edo State. Despite the anxieties associated

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news you can trust I **WEDNESDAY 13 NOVEMBER 2019 I vol. 19, no 434

I N300

L-R: Jibril Aku, vice chairman, FMDQ Group, representing chairman, FMDQ Group; Patience Oniha, director-general, DMO; Babajide Sanwo-Olu, governor, Lagos State; Mary Uduk, acting director-general, SEC, representing vice president of Federal Republic of Nigeria; Bola Onadele. Koko, MD/CEO, FMDQ Group, and Emmanuel Ukeje, special adviser to the CBN governor on financial markets, representing the CBN governor, at the presentation of the FMDQ Markets Enabler Award to the Lagos State governor at the 2019 FMDQ GOLD Awards in Lagos.

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L-R: Osman “OZ” Tat, political/economics section chief, United States Consulate General, Lagos; Gino Butera, vice president, power-system, Cummins Incorporated, United States; Ajayi Oladele, special adviser to the Lagos State governor on commerce, industry, and co-operatives, and Idris Salako, commissioner for physical planning and urban development, Lagos State, at the official commissioning of Cummins West Africa Limited’s ultra modern facility in Lagos.

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Inside Interswitch, Visa in strategic partnership - $40.254bn to expand digital P. 2 Foreign Reserve payments across Africa Cross Rates - GBP-$:1.29 YUANY-N 51.57

Aramco IPO prospectus says Senate may approve penalty oil demand to peak by 2035 death for ‘Hate Speech’ Pic by Olawale Amoo

Commodities Cocoa

Gold

Crude Oil

US$ 2,517.00 $1,456.27 $62.35

as Nigeria remains unprepared for demise of fossil fuels

DIPO OLADEHINDE

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i g e r i a may hav e ju s t 10 to 15 years before d e ma n d f o r i t s m o s t prized export oil plateaus, and

begins to drop as a result of technological innovation and d e vel op ment of alte rnative energy sources according to an assessment included in the prospectus for Saudi Aramco’s

initial public offering (IPO) seen by BusinessDay. The release of the Saudi Aramco IPO prospectus is putting a fresh spotlight on the big question; the date when global oil de-

mand will peak, a development Africa biggest oil-producing country may not be prepared for.

The Kingdom of Saudi Ara-

Continues on page 38

…urges FG to ban importation of foreign textile materials See story on p.2

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Wednesday 13 November 2019

BUSINESS DAY

news Investors should watch inflation, interest rate, others in 2020 - RMB …Average consumer’s wallet remains squeezed HOPE MOSES-ASHIKE

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R-L: John Odigie-Oyegun, former national chairman, All Progressives Congress; Godwin Obaseki, Edo State governor; Philip Shaibu, deputy governor; his wife, Maryann Shaibu, and Frank Okiye, speaker, Edo State House of Assembly, at the Edo Summit, to mark Alaghodaro 2019, in Benin City, yesterday.

Interswitch, Visa in strategic partnership to expand digital payments across Africa

...Visa to acquire significant minority equity stake in Interswitch SEGUN ADAMS

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nterswitch Limited (“Interswitch” or the “Company”), a leading technology-driven company focused on the digitisation of payments in Nigeria and other countries in Africa, and Visa Inc. (“Visa”), the world leader in digital payments, on Tuesday announced a strategic partnership that will further advance the digital payments ecosystem across Africa.

As part of the agreement, Visa will acquire a significant minority equity stake in Interswitch. The investment makes Interswitch one of the most valuable African FinTech businesses with a valuation of $1 billion. Visa will join globally renowned investors, Helios Investment Partners, TA Associates and IFC, as shareholders in Interswitch, alongside

Company management.

Founded in 2002, Interswitch disrupted the traditional cash-based payments value chain in Nigeria by introducing electronic payments processing and switching services. Today, Interswitch is a leading player in Nigeria’s developing financial ecosystem with omnichannel capabilities across the payments value chain, processing over 500 million transactions per month in May 2019.

In 2018, electronic payments in Africa accounted for only 12 percent of transactions by volume, compared to 54 percent in Europe and 79 percent in North America.

Sub-Saharan Africa is the fastest-growing digital payments market in the world, with electronic payment volume expected to grow at a CAGR of approximately 35 percent

from 2018 to 2023 in the region (excluding South Africa).

This progress is expected to be driven by the deepening payments infrastructure, population and urbanisation growth, GDP growth above the global average, increased mobile and internet penetration, as well as a supportive regulatory landscape for electronic payments and financial inclusion.

Interswitch’s core market, Nigeria, is the largest economy in Africa with a rapidly growing electronic payments market. Point of Sale (“POS”) and ATM transactions per adult grew at a CAGR of 94 percent and 59 percent from 2013 to 2018, respectively. In Nigeria, there were only 11 card transactions per adult per annum in 2018 compared to 92 in markets like South Africa, 126 in Brazil and 465 in the UK. Despite this market under-penetration, POS card

transactions in Nigeria are expected to grow at a CAGR of 63 percent between 2018 and 2023.

In addition to its switching and processing services, Interswitch owns Verve, the largest domestic debit card scheme in Africa with more than 19 million cards activated on its network as of May 2019. The business also operates Quickteller, a leading multichannel consumer payments platform, driving financial inclusion across Nigeria with over 270,000 access points, as of 2018, from which consumers can initiate peerto-peer transfers, bill payments, airtime purchases, and other e-commerce transactions, processing over 42 million transactions monthly as of 31 July 2019 (equivalent to over NGN560 billion (US$1.5

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Senate may approve death penalty for ‘Hate Speech’ …urges FG to ban importation of foreign textile materials Solomon Ayado, Abuja

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law to establish a National Commission for the Prohibition of Hate Speech has passed first reading on the floor of the Senate. The Bill is being sponsored by the the Deputy Chief Whip of the Senate, Aliyu Sabi Abdullahi.

The 8th Senate tried without success to pass the Bill in 2017. The same Senator Abdullahi had sponsored it.

The lawmaker, who was the spokesman of the last Senate, had proposed a death penalty for people found guilty of Hate Speech. Following a nationwide outcry that greeted the move, however, the then Presi-

dent of the Senate, Bukola Saraki, blocked the consideration and passage of the Bill.

Although the details of the Bill is yet to be made public as at the time of filing in this report, there are claims that the death penalty proposed in the botched Bill may have been smuggled in.

The Senate on Tuesday also urged the Federal government to ban the importation of foreign textile materials in the country.

The Senate said it was disturbed that all textile manufacturing industries in the country are comatose and importation of foreign fabrics is on the rise.

Consequently, the Up-

per Chamber said the Federal Government should urgently revamp the Kaduna, Kano, Aba, United Nigeria textiles among other industries to promote local textile production.

The decision of the Senate followed a motion by Senator Barkiya Abdullahi Kabir (Katsina Central) on the urgent need to revamp the nation’s comatose textile industry.

Leading the debate, Kabir argued that between 1960 and 1970, the textile industry played a significant role in the manufacturing sector of the country’s economy with well over 140 functional companies.

According to him, the

industries recorded an annual growth of 67 percent as at 1991 and had also created massive employment.

He further posited the discovery of oil affected the textile industry as a result of decline in cotton production which was major source of raw material.

“Government policies like increase in taxation, high cost of production, trade liberalization resulting in massive importation of textile materials has negatively affected the production of local textile materials.

“Revamping the textile industry will provide huge

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nvestors have been urged to put a watch on inflation, interest rate and other key macroeconomic indicators, in their investment decisions in the year 2020.

“Inflation will be a key variable to watch in 2020 given recent fiscal pronouncements and relationship with interest rates,” Gbenga Sholotan, head, Rand Merchant Bank Nigeria (RMBN) stockbroker’s research said.

Headline inflation is expected to average 11.4 percent in 2019e, closing the year at about 12 percent, he said. On a wage adjusted basis, 2020e headline inflation could average 13 percent (Year end:14%), to be driven by food inflation at 16 percent (vs 13% base case).

Following the border closure, Nigeria’s inflation rate, a measure of composite changes in the prices of consumer goods and services, increased by 11.24 percent in September from a year earlier compared with 11.02 percent in August, according to the National Bureau of Statistics (NBS).

In August, President Muhammadu Buhari ordered the partial closure of Nigeria’s border with the Republic of Benin to curb smuggling of rice and other commodities, and also directed the Central Bank of Nigeria (CBN) to stop providing dollars to import food items in a bid to ramp

up local farm production and attain full food security.

Apart from border closure impacting on food prices, other key issues that would impact inflation rate as outlined

by Sholotan included Value Added Tax (VAT) increase in electricity tariff, minimum wage and deregulation.

Making a presentation on macro review at RMB private capital markets business breakfast session in Lagos, Sholotan said diversification of the economy away from telecoms and agriculture will unlock growth and offer opportunity for investments.

He said that interest rates are likely to go up as CBN attempts to attract Foreign Portfolio Investment (FPI) flows to keep a stable Naira, and deliver real return to investors.

“The average consumers’ wallet remains squeezed.

Corporates with adaptive pricing (low price-points) and retail distribution strategy will win,” he said.

Global economic recovery is on the horizon, but there are some risks. Risks to global growth forecasts include: weaker-than-expected commodity prices, global policy uncertainty; Trade wars, geopolitical tensions, while Risks to Nigeria’s growth forecasts include: fiscal tightening, monetary and fiscal regulatory uncertainty, and broader security challenges.

•Continues online at www.businessday.ng

NNPC assures of transparency in selection of Lead Insurer for oil assets …as 42 firms bid HARRISON EDEH, Abuja

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he selection of insurers for the Nigerian National Petroleum Corporation’s (NNPC) assets in the 2020/2021 fiscal year would be transparent, the National Oil Company has said, as it commences the bidding process which saw 42 firms bid for the contract.

The Group Managing Director of NNPC, Mele Kyari, gave the assurance on Tuesday in Abuja, during the public bid opening exercise for companies that participated in the expression of interest as lead insurer for the corporation’s oil assets for 2020/2021.

“I am reassuring this country and the rest of our stakeholders that we are poised to make sure that this company acts and works transparently; we will remain accountable to our stakeholders. As a matter of duty for me and the management team, we will deliver

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on this,” Kyari stated.

He advised the companies that participated in the bid to accept the results as only the best would emerge winner.

Also speaking at the event, the Chief Financial Officer of the corporation, Umar Ajiya, said a key attribute of an organization like the NNPC was the protection of human assets, adding that the exercise was in pursuance of that objective.

He disclosed that a total of 42 companies submitted bids for the lead insurer contract, adding that each of the bids would be assessed on its own merit.

On hand to witness the bid opening process to ensure conformity with the public procurement law were representatives of the Bureau of Public Procurement (BPP), the Nigeria Extractive Industries Transparency Initiative (NEITI), National Insurance Commission, and civil society organisations.

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Butterflies are no birds Small Business handbook

Emeka Osuji

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utterflies are no birds, and no matter what they eat, they will not grow into birds and begin to rule the airwaves.

And if they try to rule the airwaves, some big bird may show up to swallow them. A corollary to the above caption is what has been capsulated in an Igbo proverb to the effect that two singlets cannot make a shirt. So, it is foolhardy for a group of butterflies to aggregate and try to sing the son of birds.

Even worse is for singlets, the sleeveless and neckless inner wear of men that is no longer trending, to aggregate and hope to replace a shirt. It is lack of wisdom.

The efficacy of microfinance, as a remedy to poverty, is coming under considerable fire. Its capacity to help curb poverty has been attacked and derided, such that people now wonder whether microfinance is a successful instrument of poverty reduction, or a promoter of poverty. A service provided unsustainably or in short supply may exacerbate the problem it sought to cure.

My view is that microfinance remains an efficacious instrument of social welfare improvement, if properly provided. It depends on how the programme is delivered. The effectiveness and delivery of microfinance services is however, shaped by a number of factors, including culture, environment and leadership.

If microfinancing fails to focus on the poor, then these doubts become germane. That is happening rapidly today.

In 2005, when Obasanjo solved the Paris Club debt riddle of this country, Nigeria also achieved another milestone in the finance sector – the introduction of the National Policy on Microfinance.

The policy was a culmination of many years of public discourse on the need to adequately canalize financial resources to the informal sector. Such discourse had been most probably pioneered by the work of Dr Chu Okongwu, a Harvard-trained economist and former Finance and Petroleum Minister, of Nigeria. He had worked extensively with President Babangida, on the reform of the finance sector and they created many new financial institutions and instruments. Some of the reforms introduced by Babangida include the Value Added Tax, the Peoples Bank, licensing of finance and mortgage companies, and community banks, which were novel initiatives at the time because the informal sector was in need of funding.

The microfinance initiative in Nigeria was one of the most heralded and celebrated policy ideas of recent times, comparable only to the introduction of the Pension Reform Act and the Collateral Registry law. A number of reasons made the microfinance reform very popular and welcome. It was introduced when white collar jobs were getting scarcer and private enterprise was on the rise, partly because the economy was weakening and self-employment seemed to be the more viable option.

Another impetus to the rise of microfinance was the fact the community banks, and finance companies, failed to deliver effective services to the poor and appeared destined not to improve.

In the midst of stagnant economic development and liquidity constraint

among banks, credit to the informal sector had become much limited. The business of the economically active poor in the informal sector was hardly a priority to the formal banking institutions. Even if they tried, they could not finance micro and small businesses, which incidentally dominate the Nigerian landscape. Microfinance banks were therefore like a rescue team for the micro and small enterprises in need of support. They became the most welcome approach to poverty reduction.

Accordingly, many community banks metamorphosed into microfinance banks, reformed and recapitalised. The central bank policy of making sure they were widely, even if not evenly, distributed around the country, helped to bring financing to many local communities. The idea was to ensure that the active poor people in our communities had access to finance for their small economic activities. That’s how commercial microfinance took the driver’s seat in an industry that was originally predominated by NGO and donor financing. Unfortunately, the arrival of commercial microfinance brought its own problems. The microfinance banks (MFBs) have since run away with their new title – Bank. They are now feeling like commercial banks and acting like banks. They now focus their financing efforts on the same category of customers that took bank attention away from microenterprises. They now finance more medium, than small businesses.

Not only are the MFBs concentrating in the urban centres, they focus on financing the same segment of society that is getting the most support from deposit money banks – the middle and large enterprises. It has become fashionable to go about feeling like a bank ad doing commercial banking, albeit at micro level. Micro commercial banking

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It has become fashionable to go about feeling like a bank ad doing commercial banking, albeit at micro level. Micro commercial banking has got the better of most MFBs and they are getting carried away.

Butterflies are no birds and two singlets will not make a shirt

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

Menaces to society

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e live in a society which believes you’re nothing if you don’t have money or power. We have an educational system which does little or nothing to ingrain the concept of team spirit and other crucial leadership ideals in the mindset of our children, the leaders of our tomorrow. So, they graduate from school albeit top of their class, already shackled by the self-serving mindset of a ruler rather than that of a leader. Next, they enter the job market and strive admirably hard to reach the top of their chosen profession, primarily pushed by the all-consuming belief that in this environment, only money and power which come with position actually matter. When they eventually get there however, what do they do? What do you expect a person already driven by a ruler’s mindset to do when he eventually gets his hands-on power? I’m sorry, I can’t offer any medals for answering that correctly.

Truth is, one thing man wasn’t created or instructed to have dominion over was his fellow man. Everything else, yes. And that’s why globally, there have always been conflicts; because we continue to try. Unfortunately, we’re yet to fully understand this and until we do, our society will continue to suffer because oppression will know no bounds. Obeying or upholding the rule of law, strict adherence to laid out procedures, best practices and all that mean nothing to a ruler except of course when it becomes a handy tool to silence dissenting voices and to emasculate opposition. This explains why I’ve been known to “throw” deadly frowns of disapproval to those who are so quick to introduce me or refer to me as a motivational speaker. I can think of no greater disservice to humankind than to motivate a rogue into believing he can make it by simply sticking fast to my magic formula for success.

I mean no disrespect to motivational speakers as we all need them once in a while but I

strongly believe that to substitute the development of character and adoption of wholesome values as the starting point, can only be to our detriment. Let’s not put the cart before the horse. Big ups to Theodore Roosevelt from whose quote I borrowed the title of this piece.

I never get tired of quoting him where he said, “to educate a man in mind and not in morals is to educate a menace to society”.

We find ourselves in a pathetic place where leading figures in the seven spheres of society (Religion, business and media to name a few) have perfected the art of normalising wrong and our youths are gleefully gobbling it all up, hook, line and sinker. Outright stealing and cheating in commercial transactions has been euphemised as “business”. Unabashed cross carpeting and political prostitution where ideology is all but bereft now parades itself as “just politics”. I believe you get my meaning.

I must commend all our corporate organisations who do their worthy bit in terms of Corporate Social Responsibility (CSR). God knows we need it, especially in a nation where governments find themselves hampered by the twin “evils” of inadequate revenue and crass kleptocracy which leaves little to actually utilise, at least for those who have any intention of positively impacting the lives of their people. Just recently, the man of the moment, the current Governor of Oyo state, Seyi Makinde, who so far appears to be amongst the most forthright, purposeful and sincere in this current crop of Governors, though it’s still early days, shot a vicious salvo at his predecessor.

He claimed that in Ajimobi’s administration, contracts were executed from the 10 percent remaining after various deductions had been made by “interested” parties; meaning it wasn’t even the entire 10 percent that was used to execute because the contractor too would still take his profit from that 10 percent! And we wonder

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why roads don’t last more than a month or two before potholes reappear. It’s simple; what you put in will determine what you get out of it. Anyway, back to the CSR matter. Building classrooms, mini parks and the like are fantastic projects but my concern is the mindset of the beneficiaries of these laudable projects.

I just believe that programs which focus on developing the character of the beneficiaries and other stakeholders will help the physical projects to endure and succeed in serving their purpose. Yes, it’s irrefutably true that our illiteracy level is shamefully high but to be honest, the main deficiency amongst our so-called leaders isn’t one of academic credentials but of critical leadership qualities and glaring moral redundancy. We have a beautiful state of the art hospital built in Akwa Ibom by the immediate past administration. This health facility is truly one of its kind in this country. There’s just one problem. It hasn’t operated for one day. After all the billions pumped into it.

I feel piqued when I see adverts on bill boards, BRT buses and other mediums, where the same corporate organisations that carry out all these commendable projects opt to employ the services of celebrities with highly questionable character to advertise their products; thereby inadvertently contributing in raising generations of Nigerians whose moral emptiness can only result in the failure and decay of the same infrastructural projects they spent so much to develop.

To name one, is this Naira Marley fellow. This is someone currently facing a case of internet fraud with EFCC and is still wanted in London for robbery and sexual assault by the Lewisham police. His fans nauseatingly call themselves Marlians and their ever-increasing number speaks volumes. Call me old fashioned but this obvious reference to the legendary Bob Marley especially offends my sensibilities. The iconic

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has got the better of most MFBs and they are getting carried away. Butterflies are no birds and two singlets will not make a shirt.

Except for the big microfinance banks with national licenses, and a few of the state MFBs, the myriad of unit MFBs are merely busy running around urban centres and looking for a share of the business of the middle-class and their big businesses. The active poor in the rural areas remain where they are. A recent survey we carried out in parts of Lagos show that the attitude of microenterprises in Lagos towards banks has not changed much since 2005, when the policy was introduced. Most microentrepreneurs still rely on family and personal savings to start their businesses, and would rather go to friends than MFBs for additional capital.

Elsewhere, in this column in the past, I had drawn analogies from a comparative review of the Nigeria microfinance industry and that of South Africa, our nearest economic rival. I noted that when the later was at the stage where we currently are – the growth stage – they had over 3500 microfinance institutions.

That provided them the room to remain robust after an unavoidable consolidation that always happens. At less than one thousand, despite out huge size relative to them, how are we going to serve our active poor when consolidation happens as I believe it will, before very long?

The industry has grown and been fairly well structured to play a leading role as agents of development. However, there is room for improvement, which will propel the sector to maximally blossom.

It begins when all animals accept their nature and be who they are.

Character Matters with Daps

Dapo Akande musical artiste and world-renowned activist was and continues to be celebrated for a more noble worldview. Naira Marley on the other hand ascended new heights of infamy when he recently pronounced that a woman is far better off having a big backside than having a Master’s degree.

Ironically, as odious as this may sound, he may not be that far off, if we’re to go by our prevailing moral standards. It’s just a shame that the concerned organisations either don’t care or are oblivious to just how much damage their actions continue to cause by promoting such people as role models to our children.

Commerce must have boundaries which should not be crossed no matter the financial appeal, as there must be a place reserved for ethical behaviour if we don’t want to sear our collective conscience completely. At this point I’m constrained to repeat what I said earlier; what you put in will determine what you get out of it. Seeds will always produce fruits of their kind so we better be extra careful of the kind of seeds we sow.

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

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Border closure: The wrong solution to a pressing issue Olanrewaju Rufai

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ew weeks ago, the Nigerian government announced the closure of the country’s land borders to all goods. While the decision has been severely criticized by economic experts, the Buhari administration has justified the decision as a tactic to stem the influx of smuggled goods from neighbouring countries.

That the border closure is an economic aberration is not in question.

Countries seldom close their borders for trade-related reasons as a border closure often comes with significant economic and socio-political consequences. Nevertheless, the Nigerian government has doubled down on this policy, arguing that the decision was taken to protect Nigerians and Nigerian businesses from negative business practices, particularly the smuggling of cheap, low-quality products into the Nigerian market.

Nigeria’s decision to close the border was predicated on the claim that neighbouring countries do not just serve as bases for entrepôt trade – the importation of goods and the subsequent re-exporting of same goods to other markets; but that goods imported into these countries are mostly not re-exported to Nigeria via legal and

conventional means, but often illegally via smuggling. While this claim is not baseless, it is pertinent to understand why this situation persists.

For decades, neighbouring countries have profited from dysfunctions in the Nigerian economy. For instance, the inefficient state of Nigerian ports actively encouraged Benin to adopt an economic strategy centred on being entrepôt state re-exporting to Nigeria.

In addition, other Nigerian economic dysfunctions including the continued subsidy of petroleum products which makes petroleum products in Nigeria substantially cheaper than in neighbouring countries have further facilitated a conducive environment for illegal cross border transactions.

Therefore, while the Nigerian government’s claims that neighbouring countries serve as bases for smuggling and illegal cross border transactions are not totally false, the closure of the nation’s land borders fails to address the root causes of this issue. Rather the government’s decision to close the nation’s land borders is akin to treating the symptoms of an illness while allow its actual cause to fester.

The effects of the border closure have been significant. Since the announcement of the border closure, the nation’s inflation rate has been on an upward trajectory. Already, basic commodities including food, transportation etc. have become more expensive, with the severest effects suffered by the nation’s poor.

This does not bode well for a nation which was only recently adjudged the poverty capital of the world.

In addition to these, the border closure has also had severe effects on local production. Factories and traders have struggled to import key raw materials and have had to devise alternative routes for their exports. Overall, all of these do not bode well for the Nigerian populace and the Nigerian economy.

It is noteworthy that the government’s decision to close the nation’s land borders is that similar to other policies formulated and implemented by the Buhari administration, in that the government formulates a policy aimed at solving a problem, however the formulated policy only treats the symptoms of the problem but fails to address the root cause of the malaise. Therefore, while cross border smuggling is an issue to be addressed, border closure is hardly the solution.

In fact, the border closure is an implicit admission of the incompetence of the Nigeria Customs Service. Smuggling is only rife at the nation’s borders due to the inability of the authorities to adequately protect the border. If the nation’s Customs Service were efficient, there would be no reason to close the nation’s border for an extended period to curb smuggling. Furthermore, it is no secret that the nation’s land borders are porous, with numerous illegal paths through which smuggled goods can be transported. This is also another issue which needs to be tackled, not only for the protection of the economy against smuggling, but also as a matter of national security.

Therefore, there is a need to strengthen the capacity of the Nigeria Custom Service to protect the country’s borders.

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While the Nigerian government’s claims that neighbouring countries serve as bases for smuggling and illegal cross border transactions are not totally false, the closure of the nation’s land borders fails to address the root causes of this issue

The professionalisation of the Nigerian customs service in line with global best practices, along with the use of modern technology for border control will go a long way in achieving this. In addition, there is a need for significant investments in information technology and formal management procedures which will improve security, accountability and transparency at the nation’s borders.

The case for improved port logistics as well as linked rail and road infrastructure can also not be overemphasised.

Smuggling across the land borders thrive because the Nigerian ports are inefficient to deal with the imports demands of the large Nigerian population.

Therefore, there is a need to undertake fundamental infrastructure development projects at Nigeria’s ports to improve their efficiency.

Overall, the government’s decision to close the nation’s land borders does not address the actual factors responsible for smuggling and illegal cross border transactions. Instead, the government has implemented a “solution” which in reality fails to solve any of the factors responsible for illegal cross border transactions and other malaises. Therefore, there is a need to there is a need to actually resolve the key factors responsible for illegal cross border trades. A failure to do this would only mean that when the borders are eventually reopened, the nation would be back where it started.

Rufai holds a first class degree in Management and Masters degrees in Management and Finance. He is a finance and strategy analyst and can be found on Twitter @LanreRufai_.

Laws are sometimes not implemented because they are bad

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ome magic recently happened in Nigeria. In a matter of one month, the President sent a bill to the national assembly, it was “debated”, passed by both the Senate and Reps and signed by the President himself after Abba Kyari, his red cap-wearing Rasputin, hand-delivered it to him in London to save money on courier costs.

This “historic” feat of a broke government raiding oil companies for taxes kicked off a number of articles. Abba himself fired the starting gun with one of his usual articles written in very nice and mild English, to mask his underlying communism. Summary of it is that something this is a new deal for Nigeria. Because of reasons. One part of it was particularly funny: As a result of this amendment, Nigeria could earn an extra billion dollars a year from our oil. These are funds that will help restore our schools and hospitals.

That’s right, the same government that reduced education spending in its 2020 budget is going to take this oil money and spend it on schools. It definitely makes sense.

The next article came from Bola Tinubu. He is not someone that any serious person should waste time reading. But if you insist — here is his own piece. Just remember that any minute of your life you spend reading an article by Tinubu is a minute you can never get back. But it’s your call. I won’t query your life choices.

Which brings me to the piece I want to comment on. It’s by my Egbon, Waziri Adio, the Executive Secretary of NEITI. I have a lot of time and respect for him — he is a serious person and is definitely one of the people I count as a credit to the current government.

And my disagreement is on a general principle. One of the reasons given for this rush PSC amendment act is that it is long overdue.

In Section 16, the law had two trigger clauses or conditions for the review of terms

“to such an extent as the PSCs shall be economically beneficial to the Government of the Federation”: when oil exceeds $20 per barrel, in real terms, and (irrespective of if this happens), fifteen years after and every five years thereafter. As stated earlier, the $20/ barrel (adjusted for inflation) threshold was reached in 2004, but no review happened. On 26 July 2007, a letter from the Department of Petroleum Resources gave notice to the contractors that the 15-year mark would be attained on 1st January 2008 and the review would commence. But nothing of such happened on that date. If the 2008 review had taken place, two other reviews would have been necessary for 2013 and 2018. Needless to say, that nothing of such happened Rasputin also alluded to this in his piece Crucially, the 1993 contract provided only for a review of terms. Oil passed $20 barrel in 2003 but companies could, and did, refuse to accept any changes. The ‘business as usual’ lobby made sure that every attempt until now to amend the law ended in failure It’s a clever way of framing the argument because it means that the bill escapes being judged on its own merits. In that sense, the Buhari government is ‘merely’ doing something that should have been done long ago. But here’s my point — reviewing the law every 5 years is a bad law and that’s why it wasn’t implemented.

Consider something like the death penalty.

Nigeria definitely has capital punishment in its laws. But since the return of democracy in 1999, Nigeria has pretty much stopped executing people even though there have been many death sentences since then. Yet only a couple of decades ago, people used to go watch firing squads at the Bar Beach as some form of free public entertainment. We don’t do that anymore because it really is not something that has a place in a 21st-century civilised society. Yet

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there is nothing in the law that says criminals cannot be publicly executed. Nigeria has taken those things as bad law and has done what many countries do to bad laws — ignore them and leave them unimplemented.

Or consider Nigeria’s ridiculous anti-gay law. It really is a stupid law and should not have been passed. But it is there on the books as the laws of the land. Imagine you become President and you really have no problem with gay people and you definitely don’t want them locked up. You are faced with a choice — take on the law by trying to have it repealed or ignoring it. You have many other priorities of course and the challenge with trying to repeal it is that you will suddenly acquire yourself many mischievous enemies especially religious ones who will accuse you of trying to infect Nigeria with gayism and turn every Nigerian gay. And then the argument breaks out again with people calling you all sorts of names saying you want to tear the moral fabric of Nigeria’s culture and so on. In such a case, by far the easier option is to simply leave the law unenforced and move on to other things. You can appoint an IG of Police and as you are fixing his epaulettes in Aso Rock, you whisper into his ear “please don’t go after anyone for being gay. Just onlook that nonsense law” Some offshore oil investments are for 40 years. It is hard enough to predict what will happen to oil prices over such a long time period. But you then make it worse by having your investments reviewed for taxes every 5 years.

That is a bad law. When 5 years come around, you can be sure the government is never giving any tax reduction — the best you will get away with is that they leave the tax rates alone even if the circumstances call for a reduction.

In another 5 years, you will dance the dance again. The taxes will only ever go up. This is a good enough reason not to implement such a

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FEYI FAWEHINMI law and just ignore that clause even though it is written there in black and white.

Nigeria is not an easy place to do business and over the years, there has been a lot more competition for investments. This new tax is planned to collect $1billion a year in the future.

That alone is enough to make anyone wonder whether it is really worth the risk. $1billion as an investment will not get you oil out of Nigeria’s deep-water. You will need multiples of that. That is, you only need to lose one investment for this tax to become counterproductive. These things also take a long time — Egina which started producing oil last year was discovered in 2003 and it cost close to $4bn. There are several undeveloped offshore fields that will suddenly now look pointless, not just because the government has raised taxes on them significantly with this new law, but because this is potentially not the last tax rise, they will see.

The jury is out on this law and whether it will even raise any money. The PSCs were a godsend for a perpetually broke country like Nigeria that never has money to invest in anything serious.

Note: The rest of this article continues in the online edition of Business Day @https://businessday.ng

Feyi Fawehinmi is an accountant and public affairs analyst.

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Wednesday 13 November 2019

BUSINESS DAY

Editorial JAMB lessons for Nigerian public service Publisher/CEO

Frank Aigbogun editor Patrick Atuanya

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

Bashir Ibrahim Hassan

GM, BUSINESS DEVELOPMENT (South) Ignatius Chukwu

P

erformance-wise, the Joint Admissions and Matriculation Board (JAMB), the body in charge of conducting qualifying examinations into Nigerian universities and polytechnics, has so improved in the past three years that it holds out lessons for other public sector operators and institutions.

Besides an impressive improvement in the method of conducting its examinations which, before now, was a mess, the board has also raised the bar in its revenue generation. And this is quite significant.

Between 2010 and 2016, the board which was set up in 1978, remitted only N50 million to the federal government coffers, but in just two years (2017 and 2018), under a new management, it has been able to remit N15.6 billion to the federal purse.

Similarly, before now, JAMB was a nightmare to all young Nigerians wishing to enter the universities and polytechnics through its qualifying examinations. JAMB exams usually began from the long, tortuous and tasking paper work (filling forms) that made near-impossible demands from the candidates.

The examination proper was

a whole lot of drudgery. Question papers were served along with answer sheets containing tiny boxes arranged with the first five letters of the alphabets as optional answers to choose from. A candidate’s success or failure in the exams started from here.

But the introduction of technology into JAMB operations has changed all that. In particular, the use of computer-based tests (CBT) in place of the voluminous paper work has changed the narrative for both the candidates and the examining body.

Though challenges remain, given the Nigerian environment, JAMB and its current management should be commended for the phenomenal change and improvement that they have brought into public service.

What Nigeria and Nigerians have seen from JAMB in the last couple of years simply underpins what are possible in Nigeria under right and committed leadership.

Their actions uphold and refuel the belief in most quarters that Nigeria’s problems do not consist in lack of ideas or the manpower/ know-how, but centrally in lack of the right leadership to provided right, purpose-driven and resultoriented direction.

Like most other Nigerians, we are quite excited by the leader-

ship that Ishaq Oloyede, the JAMB Registrar, has provided in the examination body that accounts for this, comparatively, superlative improvement in the fortunes of the board.

Oloyede is just an Islamic scholar and a Professor of Islamic and Arabic studies. He is a fully ‘home grown’ scholar with all his major academics achievements from the University of Ibadan; not Harvard, Cambridge, Oxford, or Yale, meaning that the Hood does not always make the Monk.

What makes the Monk, in our view, especially in the case of Oloyede, his integrity, strength of character, visionary leadership and forthrightness which are glaringly lacking in Nigerian public service.

Oloyede’s activities, since taking over the leadership of JAMB, have been revolutionary and ingenious.

As a leader, he has been exemplary and the difference he has made has been phenomenon.

His strides so far are uncommon and it was pleasantly surprising when he revealed recently at his 2020 budget defence at the National Assembly that JAMB is now fully self-funded, taking care of its capital expenditures and overheads.

Added to that, the body is also remitting N3 billion to federation account besides another N2 bil-

lion which the government has approved for their capital projects.

All these come from the body’s internally generated revenues in 2019 only.

Considering that it is the same staff of the exam body that Oloyede is still working with, it becomes easy to see what competent leadership can achieve. What he has been able to do in three years and how he has been able to do them are strong lessons all should learn from there, especially public and political office holders at all levels – federal, state and local governments.

The professor has brought his personality, integrity and character to bear on the organisation he heads such that the same old staff members have realised that a new sheriff is in town; not a pretender.

Again, he has not sat back to blame the mess he met on ground on the old leadership of the exam body as it is the fashion in the macrocosm called Nigeria where old sheriffs, demagogues, ethnoreligious bigots are presiding and blaming all their failings on the long ago and far away.

It is our opinion, and we hold it strong, that all of them in public service, without exception, should learn from JAMB and its leadership the lessons of integrity and commitment. That is new Nigeria spirit.

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Review of the exclusive list: An imperative for Nigeria’s sustainable development

Franklin Ngwu

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t a recent roundtable session on the Mining sector organised by American Business Council and attended by all the key stakeholders including very high delegation from the Federal Ministry of Mines and Steel, it was revealed that over 80 percent of mining in Nigeria can be described as artisanal mining (previously known as illegal mining). More interesting is the further revelation that the efforts of the federal government are not receiving the appropriate support from the state governments.

Let us be honest with ourselves and call a spade, a spade, “the state governments are sabotaging the efforts of the federal government”, a very important stakeholder openly lamented. The federal government should get more serious and stop all these artisanal/illegal mining or whatever name you want to call it, another stakeholder fumed! To address the problem, the government should help and organise the artisanal miners as Mining SMEs, another key stakeholder suggested.

Irrespective of the varying views, the question is if the current situation where over 80 percent of the mining activities are artisanal and unaccounted for be

allowed to continue. With the potential revenue that can be generated from Mines and Steel sector far more than what we are presently getting from oil and gas, I do not think that allowing over 80 percent of our mining to be artisanal or illegal is appropriate. Imagine a sector with far more potential than the oil and gas contributing just about 2 percent of our GDP. Of the suggestions above, the encouraging one is the plan to organise artisanal miners into SMEs but the fact remains that it does not address the root causes of the problem and therefore unsustainable.

Like many other economic sectors, the major problem with our mining sector is the structure of ownership and regulation which creates the environment for sabotage and underdevelopment. Principally, the allocation of the mining sector to the exclusive list controlled by the federal government is the fulcrum of the crisis and underdevelopment. In the current structure, there is no incentive for the states to support and cooperate with the federal government to ensure effective exploitation of our mineral deposits. As the states do not have full knowledge or access to the taxes and royalties, they are somehow excluded from the proper and accountable sharing of revenue derived from their communities.

Consequently, most state government functionaries will prefer artisanal or illegal mining which they can personally benefit more from than support a mining sector controlled by the federal government. It is the same reason why the oil and gas sector and other sectors controlled by the federal government are not doing well. In the recent report from Nigeria Extractive Industries Initiative (NEITI), it was stated that Nigeria has

‘

Like many other economic sectors, the major problem with our mining sector is the structure of ownership and regulation which creates the environment for sabotage and under development

lost over $41.9 billion from 2009-2018 due to oil theft and bunkering. Imagine Ondo and Ekiti states celebrating that they have secured the approval of the federal government to construct and toll Akure-Ikere road. Is the federal government not controlling more than it should?

If we really want to pull out Nigeria from the increasing economic crisis and debt entrapment, we cannot continue to be doing the same thing that has failed over these years and still expect a different result. The truth is that there is no reason for our level of underdevelopment, poverty and debt burden if we can agree to make and execute the right decisions. Just as PMB has signed the Deep Offshore and Inland Basin Production Sharing Contract (DOIBPSC) that will give Nigeria additional annual revenue of over $1billion, he needs to be bold and encouraged do more.

PMB and his key government functionaries need to boldly review both the exclusive list with a clear determination to move certain critical development sectors from the exclusive to the concurrent list. The reason is that given our size and plurality, the federal government cannot effectively manage and transform all the sectors in the exclusive list.

Of the over 40 items in the list, the question is which ones the federal government can competently discharge, and which ones should go to the concurrent list or even residual list for the states and local governments respectively. With the aim being for effective and rapid development of Nigeria, I think that items such as construction and maintenance of trunk A roads, Mines and Minerals, Natural Parks, Railways, Commercial and Industrial monopoly, Waterways, Aviation and

Power (Generation, Transmission and Distribution) among others should go to the concurrent list. While the items that can be transferred are many, a good way to start is transferring may be four items as pilot cases to see their economic development impact. The four that stand out are Mines and Minerals, Power, Railway and Construction/maintenance of trunk A roads.

In Mines and Steel, not only will it incentivise the states to properly participate, it will significantly reduce artisanal or illegal mining while improving the revenue of both the states and federal government through taxes and royalties. It will even create a better environment for the formalization of the artisanal miners into Mining SMEs monitored and supervised by the states.

More jobs will be created, and insecurity will reduce.

In the power sector, the reform should be such that will allow the generation, transmission and distribution of electricity within states or regions without first sending the generated power to the Transmission Company of Nigeria and then to the Discos to distribute. As a significant portion of the generated electricity is lost within the transmission process, allowing the states or regions to own the whole process (generation, transmission and distribution) will not only enhance available electricity but will engender competition among the states and regions. To be continued with the other sectors.

Dr. Ngwu is a Senior Lecturer in Strategy, Finance and Risk Management, Lagos Business School and a Member, Expert Network, World Economic Forum.

E-mail- fngwu@lbs.edu.ng

Strategic transport infrastructure in the era of trade politics

O

bjectively speaking, one of the most challenging places to do business in Africa over the last two decades has been Zimbabwe, for reasons that are already widely reported. However, amidst the political chaos and macroeconomic dysfunction, one of the more remarkable observations of any infrequent visitor to the country will be the relatively functional state of major connecting roads. Zimbabwe is an inland entrepot, a geographically important transhipment country for its equally landlocked northern sister-country, Zambia (as well as the inland parts of other neighbouring countries). Trade goods to and from locations as far north as the Democratic Republic of Congo rely on the excellent connecting roads in Zimbabwe for communication with the most important ports in southern Africa.

This critical infrastructure was deliberately designed and built-out over the years, and (even through great adversity) has managed to remain in a sufficient state of maintenance to support transit trade flows through the country. Indeed, in the most recent annual Global Competitiveness Report published by the World Economic Forum (WEF), Zimbabwe is still rated 39 out of 141 countries globally for road connectivity, its highest such ranking of any other condition measured by that report. Various factors have been responsible over the years for this incongruent state of affairs (well-connected and relatively functional commercial road infrastructure, in an economy that has been in turmoil for several decades, and arguably comatose for at least the last one). Not the least of these factors has been clever governance arrangements for road development, funding and maintenance, rendering them somewhat insulated from the broader economic and

political crisis. This approach to road funding and management is a highly recommended strategic one for African countries to follow (and is indeed increasingly common), but this is not the subject for today’s piece.

With the commencement of the tortuous journey towards creating an African Continental Free Trade Area (AfCTA), the important question of relative trade competitiveness between African countries has become a very welcome one for regular commentary. All of this commentary is occurring within a turbulent global environment dominated by questions of trade, politics and protectionism between the largest economies in the world. The respective roles (in this era of trade politics) of tariffs, taxation, intellectual property rights, technological innovation, talent migration, rule of law, human rights, manufacturing value chains, subsidies, and even (now topical in Nigeria) border closures have are all being debated extensively.

In Nigeria, perhaps one area that has not been discussed often enough is the importance of transport infrastructure to trade competitiveness in the emerging African environment.

Nigeria has already been aware (for decades perhaps) that one major consequence of poor and uncompetitive transport connection infrastructure is the migration of trade flows to alternative corridors. Quite apart from arbitrage opportunities created by import restrictions and exchange rate policy, alternative freight corridors have evolved because the vast hinterland of Africa’s largest economy is clearly under-served by appropriate seaport, railway and commercial highway linkages. With a larger, zero tariff trade coalition now evolving outside of its physical land borders, the commercial implications of uncompetitive connecting infrastructure for

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Nigeria’s economic development are quite dire.

Simply speaking, it will become impossible for Nigeria to control its own fate in the future, if critical economic infrastructure is not brought quickly up to competitive levels (to take one grim example: the same WEF report mentioned earlier ranks Nigeria 63rd in the area of road connections, 24 places below Zimbabwe).

Thankfully, it is not too late to correct course; and Nigeria either possesses already or can easily attract the needed expertise and capital for a new direction. Specifically, the very happy recent conclusion (after nearly a decade in development) of the financing agreements for a new deep seaport on the eastern coast of Lagos is very important. It will be the first addition of brand-new vessel handling and freight storage capacity to the entirely clogged coast in decades. But it needs to be followed hand-in-hand with an ambitious program of inland highway development for effective ingress and egress; particularly across the under-developed eastern segment of the Lagos lagoon and towards new and existing trade corridors in the hinterland.

One personal favourite idea of mine (albeit probably too ambitious) is a new 120km road and bridge from the periphery of the new port (and Refinery) area, across the Eastern lagoon to connect with the main existing arteries into the rest of the country.

The still inexplicable absence of rail connectivity between the existing ports at Apapa and inland storage depots also remains to be resolved. More important than grand ideas (of which there is no shortage), is the implementation of a self-sustaining system of road and port development, financing and maintenance in Nigeria. This would be a transparently governed arrangement which extricates an independ-

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Fola Fagbule ent stream of cash flows from user-payments via port fees, road tolls, border levies and fuel taxes, to be applied (along with private sector and capital markets financing) towards critical transport projects, on a multi-year planning basis. This is similar to the method that has been applied successfully elsewhere in Africa and particularly in Zimbabwe (where it is still imperfect and needs improvement).

It is already clear that trade competition is going to deepen within and into Africa over the next few decades (the global direction is already set, and policy makers in most countries are beginning to think about fall-outs and implications). Along with the myriad other important governance and infrastructure conditions, superior quality transport connectivity will remain a critical competitive advantage. Multiple long-term financing options for strategic infrastructure deployment and maintenance in Africa clearly exist, but they do require carefully thought-out and implemented solutions.

Beyond the now ubiquitous Chinese financing sources of funding for ports, roads and bridges (assets for which the Africa Finance Corporation is one the leading private investors in Africa), multiple other strategic paths are available to the best-prepared countries and projects.

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

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Wednesday 13 November 2019

BUSINESS DAY

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India’s cold chain model points way for Nigeria ...experts urge government to see the sector as an integral part of agriculture …call for adoption of innovative solutions Josephine Okojie

F

or Nigeria to address issues of postharvest losses and effectively develop its cold chain sector, experts say the country should learn from the Indian’s biomass model.

The experts say Nigeria must adopt innovative off-grid solutions such as biomass, LPG and solar to effectively develop its cold storage and supply chain sector.

The experts who spoke at the 2nd West Africa Cold Chain Summit and Exhibition (WACCSE) in Lagos recently stated that w i t h t h e s e i n n ov a t i v e solutions the country will be able to address issues of postharvest losses while improving farmers’ income.

“In India, there is a direct subsidy for cold chain which is an ideal that Nigeria can borrow from as well as its b i o m a s s m o d e l ,” s a i d Tunde Okoya, president, Organisation for Technology Advancement of Cold Chain in West Africa (OTACCWA).

“The Indian biomass model is an off-grid solution where farmers burn the waste on their farmland to

generate cooling and we have lots of farm waste in Nigeria,” Okoya said.

“We need to unlock practical cold chain solutions to grow and develop our cold chain industry and impact farmers’ income,” he added.

He stated that the goal of OTACCWA is to shape government policies as regards cold chain through advocacy by ensuring that the country has policies in place that will further reduce investment costs.

According to him, the capacity of the cold chain in Nigeria is estimated to be at 250,000 cubic while the estimated supply-demand gap is between 4-5 billion cubic.

He noted that the huge gap is an indication that the country still has a lot to do in developing its cold storage and logistics industry.

Nigeria postharvest loss is put at 15million metric tons valued at $9billion per annum, experts say.

India, the largest producer of milk and second-largest grower of fruits and vegetables globally, has developed its cold chain industry and increased its cooling capacity to 10 percent using innovative

Alexander Isong, CEO, Alyx Limited; Anurag Agarwal ,CEO , New Leaf Dynamic Technologies Limited, India; Tony Tiyou, CEO, Renewables in Africa Limited; Umeh representative, Asiko Power Limited; Joseph Uwaifo Ajayi, lecturer -dept of Mechanical Engineering, Federal university of Petroleum Resources, Effurun,Warri,Nigeria and Magnus Oshiogwe, MD, Trinitair AgroAviation Enterprises,Benin city,Nigeria during the 2nd West Africa Cold Chain Summit and Exhibition in Lagos recently.

solutions such as biomass.

Anurag Agarwal, CEO, and co-founder, New Leaf D ynamic Technologies Limited, New Delhi, India in his keynote presentation said that the biomass initiative is important to the Indian government and has been in operation in the last 10 years.

“The Indian government is providing financial

assistance for cold chain and educating farmers on the need to store their produce and adopt the biomass solution,” Agarwal said.

He stated that the biomass solution is a cooler convention system that is easily affordable as wastes are used to generate power for storage.

Speaking also, Alexander Isong, CEO, Alyx Limited and

Market access takes centre stage at Agribusiness Institute’s conference Josephine Okojie

F

or Nigeria to diversify its economy through agriculture, its products must be able to access international markets.

On this note, the Institute of Agribusiness Management Nigeria (IAMN) will hold its 2019 agribusiness conference to discuss ways to drive global market penetration of agric

commodities of Nigerian origin.

The conference which is scheduled to from 18th – 21st November 2019 in Abuja with the theme ‘ Think Forward: Driving Nigeria’s Pathway t o P ro s p e r i t y Th rou g h Sustainable Agribusiness’ will have in attendance are professionals working in various agri value chain including crop and livestock, exporters, processors, and logistics firms among others.

Richard Ogundele,

committee chairman, Local O rga n i s i ng C o m m i tt e e re i te rate d t h e n e e d to create global market access for food commodities of Nigerian origin as well as a pathway toward sustainable profitability for entrepreneurs.

Details on export opportunities and certification systems will also be discussed during the conference.

In a statement made available to BusinessDay,

Salihu Jamihu, secretary local organising committee, (left); Richard Ogundele, chairman local organizing committee (second left); Christian Fougner, counsellor, Royal Norwegian Embassy in Abuja (second right); Angela Ajala, vice chairman, local organizing committee (right) and other members of the Institute of Agribusiness Management Nigeria (IAMN) at a press briefing announcing the National Agribusiness Conference recently in Abuja. www.businessday.ng

IAMN hopes that the conference will provide practical solutions to address lingering challenges limiting the agricultural sector, to share good business models with the public and organized private sector actors as a mean of facilitating economic growth and development, using agribusiness as a major platform.

According to the statement, the conference will also include master classes, technical plenary sessions and field visits to reinforce learning in agrotourism, manufacturing and processing, and improved production practices.

IAMN welcomes relevant stakeholders to this conference, it is also inviting key actors to join the institute, think forward and build the sector, the statement states.

IAMN adds that the IAMN tagged its annual national agribusiness conference #ThinkFoward, saying that the country just has to ‘thinkforward-its-way’ out of this agricultural cul-de-sac.

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vice president, OTACCWA said that the country needs to create sustainable power solutions to develop its cold chain sector.

He advised the government to focus on solar and gas to grow the cold chain sector by harnessing the potentials in their production.

“Government should provide the initial capital

outlay for average Nigerians to be able to buy gas off the local market, and then we would be able to develop the sector,” Isong said.

“We have a comparative advantage in gas production and we are currently exporting to other countries. So, the government should focus on LNG as an option in powering the cold chain sector and generally the power needs of the country,” he said.

“Most of the companies that provide cold chain logistics find it difficult to get a loan from the banks because the Nigerian banks do not understand cold chain,” he further said.

He urged the government t o c re a t e a n e n a b l i n g environment by ensuring that NIRSAL, Bank of Industry and Bank of Agriculture provide loans to investors in cold chain logistics.

“Government must see cold chain logistics as an integral part of agriculture.

Cold chain logistics should be their number one primary aim for the government to solve because of its impact on the economy by reducing food waste by 5percent and increasing farmers’ income,” he added.

Kwara spends N5m to boost rice production SIKIRAT SHEHU, Ilorin

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s part of measures to revive agriculture and boost rice production in Kwara, the Kwara state government says it has released N5million to farmers to boost rice production.

Ahmed Mohammed Katsina, permanent secretary, Ministry of Agriculture, who disclosed this in an exclusive interview with BusinessDay on the state’s plan to improve rice production, posited that Governor Abdulrazaq Abdulrahman was determined to restore the lost glory of the state in agriculture.

According to him, Eagle rice a Kwaran brand made the state proud in the 70’s and 80’s but owing to total neglect of agriculture, the production suffered a setback.

“The governor gave farmers in Dukunlade N5million cash to encourage them to put more effort into the production of rice in the state,” Katsina said.

He revealed that the governor has promised to also support the farmers with improved rice seedlings. @Businessdayng

On border closure, Katsina says it is a welcome development, saying that the country’s borders have become so porous that illegal commodities are easily finding its way to markets across the country as well as firearms.

“To me, the decision on border closure is effective and helpful to Nigerians,” he said.

“This is an opportunity for Nigerians to appreciate what they have and then be proud of it as well. What is the essence of asking people to go to the farm and there will be no patronage?” he asked.

He admonished Nigerians to remain calm and accept the recent border closure.

“What we are presently going through that is just for a short time, the hardship is not going to be forever, we shall rejoice in the end as there is no sweet with ought sweat,” he further said.

In his submission, Hameed Ibrahim, director of Veterinary unit in the ministry lauded Buhari as he noted that that, the directive was to checkmate abnormalities and as well attain global standards.

Wednesday 13 November 2019

BUSINESS DAY

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The Coscharis rice revolution Josephine Okojie

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iven the importance of rice as a staple food in Nigeria, b o o s t i n g its production has been accorded high priority by the government in the past seven years.

The country has been making frantic efforts to ensure that agriculture and allied services play a key role in its quest for economic and revenue diversification.

Since then, significant progress has been recorded and rice production in Nigeria reached a peak of 4.7 million tons in 2018, according to data from the United States Department for Agriculture.

To further boost local production and ensure that the country attains selfsufficiency in rice, Coscharis Farms Limited has resolved to boost the production of the crop in the country as it commissioned its N12 billion ultra-modern state-of-theart facility, with a capacity of processing 40, 000 metric tons (MT) per annum.

The mill which is located at Igabraim, Anambra is the first phase of an entire project

expected to have an annual milling capacity of 120,000 MT when completed by the end of 2020.

The investment has already created over 470 direct and indirect jobs as the company participates across the entire rice value chain from seed multiplication to production and processing.

Cosmas Maduka, president, Coscharis Group parent company of Coscharis Farms Limited said during the commissioning that the

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plan to build a rice mill was motivated by the desire to create jobs and contribute significantly to ensuring that the country attains selfsufficiency in rice production.

“The plan to build a rice processing mill is motivated by our desire to fix a problem.

We want to create more jobs and also want to build skills in the region,” Maduka said.

“We want to contribute significantly to the government’s efforts to ensure food sufficiency through local production of rice,” he further said.

He noted that the processing mill has come to stay and improve the quality of life of the indigenes while driving economic growth and development in the region.

He added that the company is out to produce high-quality rice that can compete with any other in the domestic market while creating high-end rice from Nigeria, for Nigerians.

“Agriculture as humanity’s oldest industry has evolved from the early days when everything was done manually; when animals were the only source of manpower and from sowing of seeds by hands to the use of plough and other mechanised implements,” he said.

“At C o s c h a r i s Fa r m s Limited, we embrace challenges and we convert our challenges to positive energy because our vision is to be the best in whatever we do,” he added.

He applauded the Federal Government for its various initiatives in supporting agriculture, saying that the president has a clear agenda of food sufficiency in the country.

Similarly, he appreciated the Anambra State government for supporting

the initiative right from the start and for creating a conducive environment that has made the investment possible.

“Coscharis Farms Limited did not achieve these important milestones alone, we enjoyed the partnership and cooperation of many,” he said.

Ni g e r i a’s m i l l e d r i c e production is currently put at 4.78 million metric tons, while domestic demand is put at 7 million MT per annum, indicating a demandsupply gap of 2.2 million MT, data from the United States Department for Agriculture state.

But with the rice produced and milled by the Coscharis Farms, the country’s deficit will be further reduced.

T h e C o s c h a r i s Fa r m currently has about 3,000 hectares of land for rice cultivation in Anambra state and an irrigation system to ensure all year cultivation of

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the crop.

The highly mechanised f a r m a l s o ha s a ro bu s t o u t- g ro w e r p ro g ra m i n place within Anambra and neighbouring states which is currently empowering thousands of smallholder farmers with key inputs for the cultivation of rice paddy to feed the mill.

Similarly, the farm has developed hybrid rice seeds that yield 8 MT per hectare which is 4MT higher than the country’s average yield per hectare.

E xp er ts say w ith the country’s rice revolution expansion being carried out currently by Coscharis and other agro-allied firms, Nigeria can be self-sufficient in rice production within the next three years.

To s u p p o r t l o c a l investments and boost production, the Federal Government has since August shut down its border to address the issue of smuggling

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through its land borders while also growing the consumption of local rice.

The government had since imposed a 10 percent duty and 60 percent levy on rice imported through the seaports to discourage importation of the produce.

Speaking also during the launch, Godwin Emefiele, governor of the Central Bank said that the project is a national reference to the apex bank as it was funded under the N200 billion Commercial Agriculture Credit Scheme (CACS) intervention of bank.

Emefiele stated that the mill will not only mill rice paddy produced by its farm but also the ones grown by smallholder farmers under the Anchor Borrowers Program.

“The fact that Coscharis Farms Limited is a reality today is an attestation to the fact that the objectives of the administration of President Mohammadu Buhari towards diversifying the Nigerian economy and creating jobs through focused intervention in critical areas is yielding results,” he said From automobile to rice Coscaharis before its voyage into rice cultivation was known as the pharmaceutical of automobile in Nigeria.

“Our core business is we run a business that can be regarded as pharmaceutical of automobile. Anybody that drives a car in Nigeria is our customers and that is what is keeping us going,” said Maduka.

He stated that his vision to invest in the agricultural sector was conceived over 30 years ago when he acquired the lands in which the rice farm and mill are located in Anambra.

“Ou r i nv o l v e m e nt i n agriculture is not an accident as Cosharis as an organisation has been playing a critical role in every sector of the economy,” he said.

“We only waited for the opportunity to present itself and when it was ripened to move into it we did,” he added.

He noted that the company’s first goal is to solve the food problem in Anambra and its environ and learn from the experience to scale production to other parts of the country.

“In future, we will do something in Lagos or southwest area to target those markets. Once we perfect here, we have been given 20,000hecatres of land in Kogi state. We would take them one step at a time.”

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Wednesday 13 November 2019

BUSINESS DAY

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Wednesday 13 November 2019

BUSINESS DAY

COMPANIES & MARKETS

17

COMPANY NEWS ANALYSIS INSIGHT

BANKING

Bank stocks gain most in 5 months after OMO maturities hit market …Access Bank hits over one-year high OLUWASEGUN OLAKOYENIKAN

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here are indications that local non-financial institutions and individuals recently barred from participating in OMO market may have started taking positions in some bank stocks on Nigeria’s stock market with relatively cheap valuations.

The Nigerian Stock Exchange (NSE) Banking Index, which tracks the performance of top 10 most capitalized and liquid companies in the banking sector, jumped 3.91 percent on Friday, the biggest daily gain since May 28, 2019. This delivered a 8.51 percent week-to-date increase in the index.

Friday’s gain was driven by bargain hunting in Access Bank, Guaranty Trust Bank, and Jaiz Bank – the latest addition to the NSE Banking Index.

Access Bank, which is Nigeria’s largest bank by total assets, rose 9.5 percent to hit N9.20.

This is the stock’s highest price since the start of this year. Guaranty Trust Bank appreciated by 5.9 percent to N28.60, while Jaiz Bank surged 5.5 percent to close at 58 kobo.

Following the CBN’s directive to limit the participation in both primary and secondary OMO markets to foreign investors and deposits money banks in the country, the apex bank conducted an OMO auction Thursday, November 7, to rollover the first set of OMO maturities since the circular was released.

However, the auction was

greeted by undersubcription with a bid-offer ratio of 0.77x as some of the maturities owned by pension fund managers and insurance companies but could not be re-invested into the apex bank’s liquidity management tool.

CBN offered N280 billion at the auction but only sold a total of N232.45 billion on the 180 and 362-day maturities with 89-day

bill recording no sale.

“The restriction of key corporates, such as PFAs and Insurance companies, from participation in OMO is likely to free up excess investable cash for allocation to assets beyond fixed income alternatives,” analysts at Lagos-based CardinalStone had said in a note to clients. “We, therefore, see legroom for some flows into fundamentally strong

equity names as treasury yields moderate.”

Access Bank reported a 44.2 percent growth to N90.7 billion on a year-on-year basis in aftertax profit in the nine months to September 2019 buoyed by a 71 percent increase in net interest income in the period.

Similarly, Guaranty Trust Bank, Nigeria’s most capitalised lender, grew net profit marginally by 3.4 percent N147 billion in the nine-month period from N142 billion garnered a year earlier supported by increased net fee and commission income which jumped some 22.9 percent as well as mild improvements in net interest income and operating efficiency.

Also, Jaiz Bank reported an impressive 2019 nine-month result as bank’s profit after tax printed 673 percent growth to N1.25 billion against N161 million realised in the same period last year. This performance was largely triggered by more than N3.36 billion income earned from its investment in Federal Government Sukuk Bonds compared with N829 million achieved in the same period of 2018.

INSURANCE

AXA rakes in $3.1bn from stake sale in Equitable Holdings as Q3 revenue surges 5% OLUFIKAYO OWOEYE

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XA, Europe’s secondlargest insurer, and parent company of Nigeria’s AXA Mansard Insurance Plc says it expects to book net proceeds of $3.1 billion from the sale of a 29percent stake in AXA Equitable Holdings (EQH) According to the French insurer, it sold 144million EQH shares at $21.80 per share to Goldman Sach, the sole underwriter in a secondary public share offering expected to close on Nov. 13.

“As part of the offering, EQH has agreed to repurchase 24million of the 144million shares of common stock from the underwriter. The per-share purchase price to be paid by EQH will equal the per-share purchase price to be paid by the underwriter to AXA in the Offering,” the company noted in a release.

Proceed from this deal is expected to boost the group’s

solvency II capital requirements ratio by six points and that no significant net income impact was expected.

AXA has been selling stakes in EQH to raise funds to pay for its $15 billion acquisition of Bermuda-based rival XL last year.

Figures from its Q3 result for the period ended 30th September shows that revenue was up 5percent with growth across all geographies, P&C Commercial lines revenues up 7percent to Euro 24.9 billion, health revenue up 6percent to Euro 10.7 billion, protection revenues up 3percent to Euro 12.3 billion In 2014, AXA Group made its entrance into the Nigerian market through the purchase of a majority stake in Assur Africa Holdings owners of Mansard Insurance Nigeria.

The company modified its name and corporate identity to AXA Mansard Insurance Plc in July 2015.

AXA Mansard Insurance Plc has two wholly-owned and two

partly owned subsidiaries namely AXA Mansard Investments Limited, AXA Mansard Health Limited, AXA Mansard Pensions

Limited and APD Limited which is a special purpose company, the principal activity continues to be the provision of life and

general business risk management solutions and financial services to corporate and retail customers in Nigeria.

L-R: Folawe Omikunle, CEO, Teach For Nigeria; Gbenga Oyebode, board chairman, Teach for Nigeria; Wendy Kopp, CEO/co-founder, Teach for All, and Dapo Abiodun, Governor, Ogun State during a courtesy visit by the Teach for Nigeria Team to the Ogun State Government.

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Wednesday 13 November 2019

BUSINESS DAY

COMPANIES&MARKETS

Business Event

CONSTRUCTION

Construction firms see mixed 9M performance on cost efficiency difference SEGUN ADAMS

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fter listed construction firms – Julius Berger ( JB) and Arbico – posted weaker profitability footing on the heels of higher cost in half-year 2019, cost efficiency is now setting both firms on different trajectories with Julius Berger on the better course in the three-quarters ended September 30.

JB, the biggest listed player in the construction industry by market value, saw its profit rise by 56 percent to N5.31bn in the nine-month period where revenue grew 62 percent to outpace direct cost which grew by 60 percent.

Arbico, on the other hand, saw profit decline 18 percent to 142.24 million, after a 25 percent increase in revenue was dampened by a 35 percent rise in direct cost leading to a 4 percent decline in gross profit. JB reported a 70 per-

cent growth in gross profit.

The performance translated to a gross margin decrease of 6 percent points year-on-year to 21 percent for Arbico, while JB saw its gross margin increase by a percent point to 22 percent in the same period.

Gross margin shows how much of a company’s revenue is retained after accounting for the direct cost involved in production.

On a quarterly basis, JB posted a 5 percent growth in profit in the third quarter compared to over 300 percent growth in the second quarter, while Arbico in the third quarter, was able push its way out of a loss it slipped into in the second quarter.

“The fortunes of the sector are tied to stronger oil prices and faster economic growth. These are what give impetus to fund more capital projects by the government,” Emmanuel Noko, senior economist at M&C Research Institute told

BusinessDay in August.

N i g e r i a’s e c o n o m y slowed for the second straight quarter to 1.94 percent in the second quarter of 2019. Construction sector slumped to 0.67 percent from 3.18 percent in the same period of 2018.

Analysts expect the sector to pick-up in the third quarter, following on-going construction activities nation-wide, but say GDP growth may remain tepid.

Julius Berger saw net income climb 9 percent higher to N2.8 billion in the six months through June 2019, from N2.6 billion a year before, while Arbico incurred N38 million net losses, after posting N71 million profit in the corresponding period of 2018.

Subsequently, the net margin of Julius Berger slumped to 2.2 percent mid-year 2019 from N3.6 percent in half-year 2018, while Arbico reported a loss margin of 1.4 percent compared with 3.3 percent in the same period.

L-R: Gabriel Idahosa, chairman, Trade Promotion Board, Lagos Chamber of Commerce and Industry (LCCI); Lola Akande, commissioner for commerce, industry and co-orporatives, Lagos State; Paul Ruwase, president, Lagos Chamber of Commerce and Industry (LCCI), and Toki Maboguje, deputy president, LCCI, during the closing ceremony of the 2019 Lagos International Trade Fair held in Lagos. Pic by Olawale Amoo

L-R: Naveen Joshi, service manager, Bhojsons Care; Vishant Dalamal, MD, Bhojsons Plc; Rajneesh Gupta, Business head, Power, Bhojsons Plc, and Balaji Thiruvenkatam, product head, Bhojsons PowerHub Kirloskar, at the exhibition of Kirloskar Remote Monitoring System(KRM) at the recently concluded Medic West Africa Conference in Lagos

COMPANY RELEASE

Africa’s largest beauty exhibition set to hold November 20 DESMOND OKON

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he second edition of Africa’s biggest beauty exhibition, Beauty West Africa (BWA) is set to take place in November 20th with over 200 international exhibitors taking part from across the world, including local exhibitors from across Nigeria.

The success of the first edition of the exhibition (held last year) in promoting the Nigeria’s beauty market, connecting stakeholders, and bringing manufacturers to buyers as well as investors was a motivation for this year’s edition.

BWA 2019 which will run from November 20th to 22nd is expected to be bigger covering over two exhibitions at the Landmark Centre in Lagos, with over 3,500 attendees from the West African Beauty Industry.

The organisers said the three-day event will also feature a full conference programme featuring talks from industry players, with the aim of addressing key challenges in the industry, pushing indigenous African brands, education of human capital, and new technologies in the sector.

BWA is organised by BtoB

Events. Jamie Hill, MD, BtoB Event Limited, said the conference was a platform for the West African Beauty sector to come together under one roof to discourse best practices, network, share knowledge, and do new businesses in the hope that we will continue to drive the beauty business here in Nigeria.

“Our ultimate goal is to promote, empower and connect businesses here to try and drive their business forward and make lots of new exports from Nigerian to the ECOWAS and also for international brands looking to gain entry into the Nigerian markets, we like to introduce our international partners to local representative and distributors here, in the hope that they would continue to excel in their businesses in Nigeria and begin to locally set up business with the hope of manufacturing in the future.

Speaking at a press conference in Lagos, Hill said emphasised that the conference (mentioned earlier) has been designed to empower Nigerian SMEs and Nigerian businesses within the beauty sector.

According to him, it will cover the whole business arena and will be to promote and support Nigerian busi-

nesses to reach their full potential and take Nigerian brands and Nigerian beauty to the rest of the world.

“We have some special initiatives that will go on at the exhibition where we work with SMEs businesses in Nigeria, to try to present them alongside some of the larger local companies here in Nigeria and international companies from across the world,” said Hill.

Addressing the significance of the event to the Nigerian market, and the reason the country is playing host, Tokunbo Chiedu, CEO, Compass Global said the population of Nigeria, and the beauty sector’s contribution towards Nigeria’s GDP, pegged at about a billion dollars annually, and its vast natural resources suited for the manufacturing of beauty products, positions Nigeria to lead Africa and the conversation on beauty to the world.

She added that the event deserves the support of the government. “I think government should support our effort, the players who are all creating jobs and driving this economy,” she said.

31 countries across continents –Asia, Africa, Europe, America, and Middle East are expected to participate.

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L-R: Bassey Etim Bassey, deputy manager, SEPLAT JV, Nigerian Petroleum Development Company; Chima Njoku, GM, western assets, Seplat Petroleum Development Company Plc; Chioma Nwachuku, GM, external affairs and communications, SEPLAT; Emmanuel Amgbaduba, commissioner for Oil and Gas, Delta State; Jimoh Ijegbai, commissioner for Education, Edo State; with students of Don Bosco Science Academy Ekpoma, Peniel Academy Agbor and Depper Life High school Opete, at the closing ceremony of 2019 SEPLAT PEARLS Quiz CSR programme at Imaguero College Benin City

L-R: Phillips Oki, chief financial officer, 9mobile; Ore Olajide, company secretary and director, legal services, 9mobile, receiving the award for ‘Best In-House Legal Team of the Year’ in Nigeria (Telecom Sector) from Yinka Omoregbe, attorney general and commissioner for justice, Edo State, at the ESQ Nigeria Legal Awards 2019 in Lagos.

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36

Wednesday 13 November 2019

BUSINESS DAY

FINANCIAL INCLUSION

& INNOVATION

Mobile banking: Solution to Nigeria’s financial exclusion - stakeholders Stories by Endurance Okafor

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or Nigeria to achieve its financial inclusion goal, i n d u str y stakeholders have advised the country to maximize the potential of mobile banking technology in deepening access.

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

Arif Sheikh, Vice President, Digital Banking, CR2 “this is because the operating costs of ‘brick-and-mortar banks’ are higher due to clients’ smaller account balances, hence, the reduction in outlets.”

But Sheikh noted that mobile banking is now modelled as the best option of driving

financial inclusion and reducing cost.

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

The Central Bank adopted the NFIS in 2012. The strategy was launched to reduce the percentage of adult Nigerians who do not have access to financial services from 46.3 percent in 2010 to 20 percent in 2020.

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

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

Sheikh, who was in Nigeria recently noted that all hands

must be on deck to realise the Central Bank of Nigeria (CBN), Governor Godwin Emefiele’s target of the country attaining 95 percent financial inclusion by 2024.

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

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

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

The latest figures by EFInA put Nigeria’s financial inclusion rate at 63.2 percent, meaning as much as 36.8 percent of adults still lack access During his visit to Nigeria to announce the complete upgrade of Access Bank’s digital and technology plat-

form via the CR2, Sheikh stated that CR2 is an Irish firm that delivers omnichannel banking software and solutions, to over 100 banks in 60 countries with a global presence in Africa.

He noted that studying 250 banks in Africa on their mobile banking strategy, Ovum TMT Intelligence, showed that mobile investment had the highest percentage with 23 percent of acquiring new customers, it presents 22 percent ability to introduce new products and 21 percent of remaining relevant to customers.

According to him, CR2 is fully localised in the Nigerian market and has over 1,000 customisations done to suit the requirements for digital channels, cards, and ATMs. It has also reduced customer servicing costs benefit.

“Our integrated self-service banking platform has revolutionised the interaction between banks and their customers at every touchpoint.

With our omnichannel banking software, banking becomes personalised, efficient and instant,” sheikh stated.

TLG Capital to invest in Branch to improve financial inclusion

Jaiz Bank to deepen financial inclusion with expansion initiatives

ranch Nigeria, a Fintech company t hat g ra n t s b e tween N1,000 and N200,000 loans repayable over a period of 4 weeks to 15 months, will receive an equity investment from TLG Capital, a London-based private equity firm, a source has told BusinessDay. The operation will be carried out via a Credit Opportunities Fund owned by

he management of Jaiz Bank Plc led by its Managing Director/Chief Executive Officer, Hassan Usman, has said the major player in the non-interest banking sector plans to expand its operations across the country.

At a recent parley with the media in Lagos, Usman said efforts would be made to sensitize Nigerians on the need to embrace products of the financial institution, saying they were open to everyone irrespective of creed or personal beliefs.

According to him, Jaiz Bank, which is an Islamic bank, operates like the conventional financial institution despite its peculiarities in terms of operations.

Making a distinction between the two types of the banking system, Usman said “conventional banks were known for their loan contracts through current accounts and terms with the promise of interests, but on the part of an Islamic bank, it does something similar (taking deposits on current accounts) without request for additional returns.”

However, he said if a cus-

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TLG and focused on companies established in its main operating markets.

Maria Rotilu, CEO of Branch Nigeria, said “Over 800,000 Nigerians have accessed capital via Branch’s Android app to fuel microbusiness growth or invest in their family’s wellbeing. We are delighted to partner with TLG to further access capital in Nigeria.”

The initiative represents

TLG Capital’s 25th investment in Africa and its 6th in the financial services sector in Nigeria. In June 2018, local media reported that Branch Nigeria had granted more than 100,000 loans, for a total amount of N1 billion.

The company, which began its operations in Nigeria in 2017, is a subsidiary of the American fintech Branch International Inc. also present, on the continent in, Kenya.

Visa acquires 20% stake in Interswitch with $200m

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lobal payments giant Visa is paying $200 million for 20percent stake in Interswitch, Nigeria’s largest electronic payments company.

According to a statement

by UK’s Sky News, the investment places a billion-dollar valuation on 17-year old Interswitch and is a major boon ahead of a proposed initial public offering slated for the London Stock Exchange next year.

While Visa’s stake purchase would confirm Interswitch’s unicorn status, the company was reportedly set to be valued at as much

as $1.5 billion ahead of a planned IPO for 2020.

According to industry data, Interswitch would not be the first Africa-focused tech company to achieve the billion-dollar ‘unicorn status’. Jumia, the e-commerce company, led by a mix of international executives and investors listed for over $1.4 billion in April.

Visa’s investment in Interswitch changes the fintech landscape “significantly” and confirms the strategic interest of global payment giants in Africa’s financial services industry says, Victor Asemota, a veteran tech investor.

“We were once talking about validation but we have moved way past that now to strategic positioning by major players. It is no longer a case of “let’s see where this is going.” It is now a case of jumping on the bandwagon.

The company’s services range from powering online payment platforms and point-of-sale terminals to a debit card network with 19 million active cards. Given its sheer size, strength, and lifespan, Interswitch is often thought of as part of the establishment, alongside traditional banks, that fintech startups might be looking to disrupt.

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T

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tomer seeks remuneration from Jaiz Bank for deposits, a different contract would be established where the deposit is exposed to look like equity, with the bank acting as an agent to trade the money, sharing proceeds from the investment between both parties.

“We have already started a pilot financial inclusion drive. We are also going to use agenc y banking to reach those people in places where we are not physically present,” he said, adding that despite the absence of physical presence in some parts of the country, the bank was still serving the needs of many through mobile and Internet banking.

“We are also intervening to provide finance to women group,” he stated.

Speaking on challenges faced by the lender in its emerging years, the bank chief said one of them was the lack of investment instruments such as treasury bills and bonds. However, he said in the last 18 months, the financial institution has been able to get over this with the issuance of the first and second tranches of @Businessdayng

Sukuk by the Central Bank of Nigeria (CBN).

Speaking on intervention funds, Usman said the bank had been able to work with the central bank and the Bank of Industry (BoI) to support critical sectors of the economy.

According to him, the BoI provided a N3 billion financing facility for the development of the Micro, Small and Medium Enterprises sector of the economy, which he said would go a long way to make things better.

Usman assured that Jaiz Bank would continuously redefine standards in all it does, stating that the company was poised to creating a responsible business that better meets its customers’ needs and a culture where its employees put customers first.

The MD of the Islamic bank also stated that the aim of the bank was to hold its role as a leader in the ethical banking sector in Sub-Saharan Africa and also strive to be the best financial service provider for customers to the bank, for employees to pursue careers and for shareholders to invest.

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Wednesday 13 November 2019

BUSINESS DAY

interview ‘Telcos are the hardest hit by heavy taxes and levies’ Rotimi Akapo, a partner at Advocaat Law Practice and an expert in telecommunications law, in this interview with Jumoke Lawanson, speaks on the legal implication of multiple taxation, illegalities of shutting down base stations, data protection and privacy, amongst other issues. Excerpts: Operators in Nigeria’s telecommunications industry have continued to lament the huge tax burdens, especially levies unrelated to the sector. What is the legal implication of overburdening a particular industry with taxes and levies? he foundation for any tax should be a law authorising that particular type of tax. Unfortunately, in the telecommunications industry, we have come to identify two different types of taxes: the normal tax that all companies that operate in Nigeria pay, such as the companies income tax, pay as you earn, contributions to pension schemes, and some other levies charged on various things. There are also specific, sector-focused taxes and levies that are only paid by telcos, such as the AOL, spectrum fees, numbering fees and others paid to the Nigerian Communications Commission (NCC).

As at the last count, there is a minimum of 38 different taxes and levies that are paid by telcos. These exclude some of these taxes that are just levied by local governments that creep up on them. The way Nigeria is structured – because we operate a federal system of government, certain things are on the exclusive list while other things are on the concurrent list. The federal government is responsible for making laws on the exclusive list. In that respect, for telcos there is a schedule in the taxes and levies act that lists all the taxes that everybody is supposed to pay, including telcos.

So it is up to the telcos to identify those specific taxes that are applicable to them. In a sane country, that is what should happen. However, what is happening in Nigeria is that apart from the taxes on that list, states have the responsibility of making laws on the concurrent list and that is where you have things like urban planning levies, etc.

A lot of states are now using that opportunity to start imposing all sorts of different levies. Recently, there was a court judgment against one state that made a law stating that base transceiver station (BTS) sites which only host equipment were business premises. IHS went to court to challenge this and the court granted that the BTS sites are not business premises.

When state governments make a law, they try to make it legal but what happens is that even though the fees are legal, telcos usually get higher pricing for those fees which are unreasonable even though it is a legal fee. So we see cases where the request itself from the ab initio is legal but the amount of money they are being charged is unreasonable and if the telcos don’t pay, the law is not followed when trying to get the money for the government.

What is supposed to happen is that due process should be followed and defaulters should be taken to

have been done in the first place.

The first thing is the cybercrime act provides that the president, based on the advice of the national security adviser, can designate telecoms infrastructure as critical national infrastructure and once it is declared critical infrastructure and someone tampers with it, they can get up to 10 years in prison, but that has not been done. There is a critical national infrastructure bill that has been with the National Assembly since about 2014 or 2015 and the bill has not been passed. So the legal framework is not there, that is why everybody thinks that they can mess with telecoms infrastructure.

If the framework was completed, then telcos will have a legal basis for prosecuting people that tamper with infrastructure. What is being done now is an ad hoc thing that they can accuse people of committing trespass or damage to the site, but for now, those sites are still not regarded as critical infrastructure.

For the NCAA, I think it is just a threat so that they can get the telcos to come to the table and negotiate something because all those BTS sites are not new, they have been there since when telecommunications licences were issued.

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Rotimi Akapo

court but what happens in Nigeria is that strong-arm tactics would be used by either shutting down base stations or locking up offices.

So, telecoms operators are specifically targeted because everybody thinks they are making so much money. They look at the revenue but never look at the outgoings.

There seems to be no synergy between state and federal governments, and telcos have struggled with multiple taxation from all levels of government. What’s your view on this and how best can these issues be rectified?

Synergy between different levels of government is very critical, because what a lot of people don’t understand is that, as a lawyer, I believe in certainty. If I am starting a business, I want to be aware of all my obligations to the government.

If that list changes every day, then it is difficult for me to advise my client. For example, the federal government stipulates that Right of Way (RoW) of about N145 per square metre should be paid as a one-off fee; however, some state governments demand annual renewal. Unfortunately, I think our problem stems from the fact that we operate a federal system of government and these states believe that because they are autonomous and they are independent, they can determine whatever they want to do. For example, Lagos State has signed a memorandum of understanding (MoU) with the telcos and they agreed on N500 per linear metre, so you can imagine if an MTN, for example, pays N145 on federal highway and in Lagos www.businessday.ng

which is a commercial capital, where they probably make a lot more revenue than a lot of other states, they pay N500 and then they are now asked to pay up to N4,000 in another state, for example. It becomes entirely disjointed.

The federal government has tried to bring a lot of these state agencies to work together with them so that there will be a framework. It doesn’t have to be exactly the same amount in all states, because the costs of doing business in different states vary but there needs to be a framework where all government agencies will agree on price points. However, they have not been able to achieve that because everybody sees telecoms as a cash cow and they want a big bite of the apple but they are not being realistic. This is mainly because government agencies are very short-sighted. We have to realise that the telcos will push all these costs to the customers who are the end-users, or they would simply walk away from operating in a particular state and then it is your citizens that would suffer poor service and not have the kind of facilities needed for development.

What are the legal implications of shutting down telecommunication base stations and sites which have been identified as critical infrastructure, and what impact does that have on quality of service?

Clearly it is illegal. In fact, to even say that you are going to shut down BTS sites, particularly those close to airports, is reasonable because you are putting people’s lives at risk. However, a few things need to

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Would you say that taxes and levies in Nigeria are broad-based and fairly distributed, or are some specific industries such as telecommunications operations being targeted with high taxes?

The telcos are the hardest hit by these heavy taxes and levies.

Another industry that might have suffered a similar fate is the petroleum industry. The informal levies target the petroleum and telecoms industry. Because of the nature of their operations, the telecoms operators need to be all over the place in every part of the country and because they are everywhere, they are easily targeted to pay those taxes and levies.

With telcos handling data of over 170 million mobile network subscribers, do you think Nigeria’s data protection policies are of world standard, especially as there is no specific or comprehensive data privacy or protection law in Nigeria? How important is it for us to have specific policies such as the GDPR in the EU? I think the challenge in Nigeria is that there is not a single law providing for data protection, privacy, and related matters. What has been done over the years is people have been looking for either sectorspecific guidelines or regulations.

In January 2019, National Information Technology Development Agency (NITDA) issued the national data protection regulation, and that is the most recent instrument in that area. Prior to that, the telecoms industry with NCC as a forward-looking regulator had the consumer code, and in that code, @Businessdayng

there were quite a few provisions on how you should deal with data of consumers. There is also the SIM card registration regulation which provides for how personal customer information should be dealt with and for how long they can keep it and how they need to transmit it to the NCC. One of the important provisions of both the consumer code and the subscriber registration regulation is that third parties must not have access to any information with the mobile network operators without the consent of the data subject. And it goes further to provide that they cannot take such data out of the country without the consent of the NCC. So to some extent, for the telecoms subscribers, there is some sort of protection, but because these are from guidelines and regulations, even though they have some force of law, it would still be preferable if there was a specific law for data protection. Because if you look at the UK for instance, there is an independent body that is responsible for data protection which is the information commissioner’s office but we don’t have anything like that here.

From a legal perspective, how is Nigeria doing in terms of regulation of network infrastructure, consumer protection, competition, universal access and resolution of industry disputes? Is there even a legal framework for telecommunications in Nigeria?

Because government has not provided the backbone telecom infrastructure for MNOs, these operators have had to invest heavily in building infrastructure in the country. What the NCC is now doing in terms of infrastructure is to have a level playing field by licensing infrastructure companies (InfraCos). If the seven licensed InfraCos take off and things go the way they are supposed to go, there would be some sort of balancing; because we would now have an independent third party that has the infrastructure and all telcos have to do is just plug to the source.

One of the licensing terms for the InfraCo is that it is an open model, so all operators would be charged the same rate. So it must be fair, equitable and non-discriminatory. For competition, to a large extent, I think the regulator is doing its best. In 2010 and 2013, the NCC did some competition study to try to determine if the telecoms industry in Nigeria is competitive, and based on those studies, certain decisions were taken. For example, I think the 2013 study discovered that MTN was dominant in voice, so there were certain decisions that were taken such as the rule that there must be accounting separation, so the money made from voice should not be used to subsidise money made from data.

I hear that there might be another study very soon.

Wednesday 13 November 2019

BUSINESS DAY

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INTERVIEW ‘We leverage technology to provide solutions in the downstream sector’ DOLAPO ADEYEYE is founder and technical director of Smartflow Technologies Ltd and co-founder of Energy360 Africa Ltd, a software company providing integration and software services to the downstream oil and gas companies for inventory control, management and visibility. Prior to starting Smartflow in 2009, he was able to within the course of seven years save Bristow several millions of dollars, whilst improving operational delivery times by deploying new processes and cost-saving measures. In this interview with DIPO OLADEHINDE, Adeyeye speaks on the challenges and successes of the last 10 years and his plans for Smartflow Technologies for the next 10 years. Excerpts:

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martflow recently celebrated its 10th anniversary. What are your thoughts when you think about the journey so far?

Smartflow’s biggest strength today is its people; we recognize the contribution of people who have been very key and important in our 10-year journey so far at Smartflow Technology. My family and friends have been very supportive so far while my pioneer staff members have also been very supportive, including other staff members who joined us along the way. I must also recognize and pay tribute to our suppliers and our clients that have been there for us from the very beginning. At Smartflow, we remain committed to the development and training of our staff which are also very essential in our next phase of operations.

What made you start Smartflow Technologies?

The idea for Smartflow Technologies came to me approximately 12 years ago in my last job where I was in aviation working as an aircraft engineer. From time to time I had to handle and deal with fuel losses and I soon realised that the only solution to this problem was technology. I tried looking for technology in Nigeria but I could not find any, so I immediately spotted the gap. Thereafter, I started researching and I realised this could be an opportunity, that’s how the idea of Smartflow Technologies came about.

What was your vision in 2009 when you first started Smartflow Technologies and how have you met or surpassed it?

My vision in 20o9 was to educate my potential clients on better ways of working in the downstream sector. Also, part of our vision was to make the downstream sector much more digital in the way they operate and to provide players in the sector with a lot more information and data at their fingertips by introducing a lot of automation in the industry. Today, I can say we have done that but I also have to point out that we still have a long way to go in order to increase the number of people that work in these intelligent ways. It’s still a work in progress.

What are some of the biggest challenges you have faced in the last 10 years as a business?

Retaining the number one spot in the business that we operate in has been our biggest challenge so far.

How has Nigeria’s oil and

Dolapo Adeyeye

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In the next 10 years, I envisage Smartflow in many other African countries; I also even envision Smartflow in other international countries outside of Africa. We want to leverage technology in providing as many solutions as possible in the downstream sector across the globe

gas industry evolved over the last 10 years as a result of Smartflow’s solution?

Over the last 1o years we have had quite a lot of customers working with Smartflow Technologies. As

at this moment, we have on our database over 7,000 customers, with quite a lot of them in the retail industry and a few of them in other sectors but mostly in the oil and gas. These customers have been able to use our equipment, technology and solutions a lot better in the market which has also driven the need for others to meet up and perform better. So, we have had a huge growth in our business in the last few years because of rising competition in the industry; our solutions are giving our customers competitive advantage which is very exciting as it continues to play out. But it also means that competition has risen for us, but we have managed to remain top in the industry.

Part of the challenges Smartflow Technologies faces is also resistance to the adoption of technology. Also, some of the biggest challenges we also face are when we had really bad economic downtimes when the business had to push itself to survive.

What is it like working on Smartflow Technologies’ products? What inspires your products?

Beyond using technological products to provide services for our customers, we use technology to also manage our business as well

so we are excited about technology. We continue to innovate and improve on this to develop better solutions for the downstream sector.

All of our products are inspired by the commitment to provide accurate solutions to real customer needs. Everything we do at Smartflow Technologies is done with the mindset of solving a problem or fixing a difficult situation. So when we listen to our customers and hear some of the challenges they face, we on our own part have to analyse, understand and create a product that will solve it, which is where we get our inspiration from.

Does Smartflow Technologies manufacture locally?

Yes, we do manufacture locally because all our panels are made in-house. We do buy components for the panels locally although on some rare occasions we sometimes get some components outside the country. However, these panels are put together, tested and released out of our workshop in Lagos Nigeria.

What is your favourite part of your job? What excites you most?

Meeting customers’ expectations has always been a delight to me. I get excited when I see the figures

my clients are saving or when I get good feedback from my clients.

For example, one of our clients told us how they were saving $2 million from deploying some of our technological systems around his stations. It reminds us we are creating value and the huge potentials in the sustainability of the work we do.

What is the best piece of leadership advice you have received?

There is nothing like a stupid idea.

The quest for knowledge includes failure and just because one person knows less than others does not mean they should not ask a question or seek clarification when necessary. In many cases, multiple people may not know but they are too afraid to ask. In Smartflow, we tolerate all ideas irrespective of whom it’s coming from.

Where do you expect to go in the next 10 years? In what ways do you expect to grow?

In the next 10 years, I envisage Smartflow in many other African countries; I also even envision Smartflow in other international countries outside of Africa. We want to leverage technology in providing as many solutions as possible in the downstream sector across the globe.

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Wednesday 13 November 2019

BUSINESS DAY

MARITIMEBUSINESS Shipping

Logistics

Maritime e-Commerce

Nigeria-South Korean bilateral trade volume hits $5.6m in 3 years …As new Korean firms seek to expand to Nigerian market amaka Anagor-Ewuzie

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he volume of import and export trade between Nigeria and South Korea has amounted to $5,573,490million in the past three years, 2016 to 2018, the Korean Trade Investment Promotion Agency (KOTRA), has said.

A breakdown shows that trade amounting to $985,673 million import and export trade were recorded in 2016; $2,622,405million recorded in 2017 while $1,965,412 was recorded in 2018.

On export from South Korea to Nigeria, about $460,813 was recorded in 2016, $2,121,967 recorded in 2017 and $917,850 was recorded in 2018, amounting to total of $3,500,630million in three years.

Also, import from Nigeria to South Korea shows that $524,860 was recorded in 2016, total of $500,438 was recorded in 2017 and $1,047,562 was recorded in 2018, totaling $2,072,860 million worth of trade in three years.

According to KOTRA, the trade volume in the first eight months of 2019, Janu-

ary to August, amounted to $984,871 which represents $540,627 worth of export from South Korea to Nigeria and $444,244 worth of import from Nigeria to South Korea.

Meanwhile, South Korean government has intensified moves to strengthen its business relationship with Nigeria in key area of the economy. This was the thrust of a forum organised

by KOTRA in Lagos recently with the theme ‘Sustainable Business for Economic Development,’ which was attended by among others, the potential Korean companies willing to invest in Nigeria.

Speaking at the event, In-Tae Lee, South Korean ambassador to Nigeria, said both countries have proven to the world that more can be done in areas like ship building, ports development, rail construction, power and renewable energy, gas pipeline and others.

He pointed out that areas like education, culture and e-government training exchanges are crucial to development of bilateral relations between Nigeria and South Korea.

Lee further disclosed that Nigeria is the second largest trade partner of South Korea in Africa and the biggest construction market on the

Stakeholders want FG to restore OMS operations in Lagos SAA SEYI JOHN SALAU

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ollowing the recent controversies trailing the security services rendered at the Secure Anchorage Area (SAA) in the Lagos ports, freight forwarders have called on the Federal Government through the Nigerian Ports Authority (NPA) to restore the operation of Ocean Marine Solutions Limited (OMS).

To them, OMS operations have brought some level of security assurance to maritime operators, especially freight forwarders who consider OMSL operations to be beneficial to the industry.

Contrary to claims that the SAA is leading to increase in cost of shipping, they say security of ships at the SAA by the Nigerian Navy, using platforms provided by OMSL is helping multinational shipping lines to save about $225,000 per trip to Lagos ports.

Increase Uche, president of the National Association of Government Approved Freight Forwarders (NAGAFF), who briefed newsmen in Lagos, said that canceling of the operation will result in diversion of Nigerian cargo to neighbouring countries.

“We do not want this SAA to be disrupted in order not to expose our cargoes to the risk of hijacking of ships and kidnapping of crew. If the SAA is disrupted, ships will begin to go to neighboring ports of Cotonou, Togo and Ghana. We don’t want to go back to the old order. We are asking the Federal Government to look critically on this issue,” Uche, who spoke for port users, said.

Recall that the Senate recently opened an investigation into the alleged diversion of N263.89 billion by a company offering security services at the safe anchorage area in Lagos ports.

The Senate had insisted that it is only the Nigeria Maritime Administration and Safety www.businessday.ng

Agency (NIMASA), the Nigerian Navy and Maritime police that have the statutory responsibility of providing security in the Nigeria’s territorial waters.

The Senate also alleged that OMS Limited charges ship that anchored in the SAA $2,500 on the first day and $1,500 on subsequent days, which OMS said was to cover the cost of providing services at the SAA. According to Uche, OMS service is not compulsory and equally at no cost to government.

“The SAA is also helping to cut the shipping lines’ overhead cost, because they will not need to hire mercenaries to come to Nigerian waters at over 300 percent of what OMS charges. Before SAA, vessels coming to Lagos carry mercenaries onboard, to provide security. One of such mercenaries would cost $2,500 and a ship would carry three for a period not less than 30 days, spending as much as $225,000 and more,” he said.

continent.

Bu s i n e s s Day u n d e rstands that aside the Korean companies presently in Nigeria, an additional seven Korean firms with interests in finance, medical equipment manufacturing, information technology, agricultural equipment, fashion and beauty, participated at the event.

They include Ace Global Company; Furaha, a beauty manufacturing brand; Paylink, which deals in mobile money transaction; Samsung Construction, and Shinhan Bank, a leading financial institution, ranked 67th out of top 500 global banking brands.

Others include Creativehill, an IT service company that creates value in Agri business; blockchain technology, and Gyeongsangbuk that partners Dangote in agriculture.

Adeshina Emmanuel, director, Investment Promotion at Nigeria Investment Promotion Commission (NIPC), listed the nation’s large population, sophisticated financial market, improving business climate, strategic location and generous investor protections as advantages of investing in Nigeria.

According to him, the two decades of political stability, Nigeria’s target to be the

14th largest economy in the world by 2050 and running a private sector-led economy makes the country attractive.

Yusuf Bashar, Customs assistant comptroller general in charge of ICT, spoke on the service modernisation and its existing partnership with Korean Customs Service. He also gave advice on efficient clearing process at the ports.

Jean Bakole, director of ECOWAS for United Nations Industrial Development Organisation (UNIDO), who spoke on Nigeria Country Programme that is driven

by UNIDO, highlighted business opportunities for Korean companies and available partnership potentials.

Finding shows that notable Korean companies like Samsung Heavy Industries, Daewoo and Expression have made marks in Nigeria’s oil, maritime and fashion sectors, and some of them have received honours for creating employment opportunities with transfer of knowledge through training to Nigerians.

For instance, Expression, a firm that produces female hair accessories, was said to have provided not less than 10,000 direct employments to youths in the country.

IMO, NIMASA push for inclusion of maritime transport in economic plan amaka Anagor-Ewuzie

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h e Int e r nat i o na l Maritime Organisation (IMO) has in partnership with the Nigerian Maritime Administration and Safety Agency (NIMASA) begun the push for mainstreaming of maritime transportation into the national economic plan of countries in West and Central African region.

This was the focal point of a regional workshop held in Lagos on Monday, on United Nations Sustainable Development Cooperation Framework with special focus on mainstreaming the maritime transportation into the National Economic Plans of African countries.

Declaring the workshop open, Rotimi Amaechi, minister of transportation said Nigeria and many other maritime states in the region, have dedicated considerable attention in recent years to the

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development, drafting and implementation of national and regional strategies to give expression to the Sustainable Development Goal.

Amaechi, who was represented by Dakuku Peterside, director general of NIMASA said Nigeria is already working on Maritime Transport Plan and Strategy, which when completed, will provide robust enabling framework for achieving Nigerian Maritime Objectives.

“More importantly, the Maritime Transport Plan and Strategy will foster publicprivate sector collaboration and inter-regional cooperation on sustainable development across the continent,” he said.

Amaechi described the workshop as an essential step in continuing shift in strategic thinking about the sustainable development of nations, and will no doubt, provide an opportunity for stakeholders present at the workshop to develop the much needed @Businessdayng

cooperation framework in addressing the sustainable development goals.

He however stated that in the push for the phase 11 negotiations for the creation of the African Continental Free Trade Area (AfCFTA), that maritime sector remains critical to seamless trade and effective economic integration between African nations.

Earlier in his welcome address as the host, Peterside, said that African leaders need to understand the critical roles maritime transportation plays in economic development and in facilitation of economic growth.

“We have identified where we want to be as a nation.

And we accepted to host this workshop because we want to help our leaders to understand the critical and strategic role maritime transportation can play in facilitating economic growth. And also understand why it is important to mainstream maritime in the economic plan,” he said.

Wednesday 13 November 2019

BUSINESS DAY

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MARITIMEBUSINESS Shipping

Logistics

Maritime e-Commerce

Border closure: Shippers’ Council says Nigeria not benefiting from ECOWAS protocol amaka Anagor-Ewuzie

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assan Bello, executive secretary of the Nigerian Shippers Council (NSC), has said that rather than benefit from the ECOWAS protocol, Nigeria has become a victim.

Speaking in Lagos at the weekend during the stakeholders’ meeting held to proffer solutions and way forward to the partial border closure, Bello said Nigeria is a nation that respects laws, agreement and treaties but unfortunately, it is not the case for our neighbouring countries.

Bello, who called for a review of the protocol, said if Nigeria continues to allow the lawlessness in international trade to happen, the country will be in trouble as jobs will continue to be exported.

“We cannot depend on import alone. It is about time we try to export for us not to perish. We must insist on our rights as a country with regard to international trade and ascend to the let-

ters of agreement,” he said.

According to him, the Council is more concerned about what is happening at the ports after the partial closure of the land borders.

He pointed out that the border closure had caused pain on Nigerians but was necessary as government

was sourcing means of revenue diversification, the maritime economy was next to be trapped into.

Kunle Folarin, chairman, Ports Consultative Council (PCC), called for a strategic planning and implementation of outcome of the meeting, adding that there

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reight forwarders operating at Onne Port, Rivers State have commended the West Africa Container Terminal (WACT) for improving service delivery that has resulted in reduction in waiting time of ships, leading to reduced vessel turnaround time.

They also commended WACT for its investment in cargo handling equipment in response to unprecedented growth in container volume at the port.

This year, WACT has invested $14million (N5 billion) in the acquisition of modern cargo handling equipment including two Mobile Harbour Cranes, 14 specialised terminal trucks and two reach stackers.

“There has been sub-

to help boost our international trade,” he said.

Kayode Farinto, national vice president, Association of Licensed Customs Agent (ANLCA), said the closure of border without ports being accessible would have negative effect on the country.

“There is need for Cus-

L-R: Eno Williams, 1st vice president, Shipowners Association of Nigeria (SOAN); Mkgeorge Onyung, president, Shipowners Association of Nigeria and Hassan Bello, chairman, Nigerian Fleet Implementation Committee (NFIC), during a meeting between NFIC and SOAN in Lagos recently.

Freight forwarders commend WACT for improved service delivery amaka Anagor-Ewuzie

should be compliance with the trade protocols.

“Nigeria is signatory to up to 13-protocol and treaties on so many subjects but unfortunately they are not complying with it. The country must also strike trade alliances with counterparts in other countries

stantial increase in import volume and to measure up with that, they have acquired a lot of equipment to ease cargo clearance.

They are doing very well and every week, they receive between three to four ships. They are keeping up with the demand, they can receive vessels, do loading and drop containers for examination, all at the same time,” Gabriel Okonkwo, chairman, Association of Registered Freight Forwarders of Nigeria (AREFFN), Onne Port, said.

Emma Nnwamkpa, chairman, National Association of Government Approved Freight Forwarders (NAGAFF), Onne Port, said that WACT brought new equipment over the last six months in order not to have any delays in working at the facility. www.businessday.ng

Also, Adolphus Ugwu, chairman, Flat and Cargo Trailer Drivers Association, said the upgrade and massive investment at the terminal have brought about high level of efficiency at the port.

“WACT has improved on their operations seriously.

Initially, we used to face occasional delays but now they are doing well because they have acquired a lot of equipment. We don’t have much traffic inside the terminal. Presently, cargo volume in Onne has increased, but WACT is well positioned to handle it without any issues,” he said.

According to him, WACT is also working with Customs and the Nigerian Ports Authority (NPA) to address the issue of longstanding containers that are blocking a lot of slots in the terminal.

toms to review its operations, review port development policies, have good road network, ensure interconnectivity in the issue of transportation to aid trade,” he said.

Ogbonnaya Gordon, a former border coordinator, called for a window that would help importers evacuate their trapped goods at the border.

“This policy is good but notice was not given. Importers are dying in silence due to borrowed money, so government should look into this and consider opening the border for a short period for people to evacuate their trapped cargoes,” he said.

Bello Jibo, head, Revenue Seme Customs Command, said apart from illicit trade, security is a major reason for the border closure.

According to him, transit procedure has to do with transporting goods in its original form but unfortunately this has not been so.

“Proper transit procedure must be adhered to and anything coming into Nigeria must come in its original form,” Jibo said.

Shippers frown at Customs’ double examination of containers for ICDs amaka Anagor-Ewuzie

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hippers under the aegis of Shippers Association of Lagos State have faulted the new directive of the Nigeria Customs Service (NCS), mandating its men to open and examine containers as well as other cargoes destined for inland container depots (ICDs) also known as Dry Ports.

The directive, which was issued by Hameed Ali, comptroller-general of Customs, has enabled Customs officials in Apapa and Tin-Can Island Ports as well as other approved entry points to hold, open and examine all containers and other transit cargoes destined to inland dry ports at Kaduna and Kano.

“This new directive is counterproductive and will scare away our cross border trade involving the movement of transshipment cargoes from Nigerian ports to Niger Republic, which the Nigerian Shippers Council

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(NSC) has in partnership with the Kaduna State Government, have been fighting hard to achieve,” said Jonathan Nicol, president of the Shippers’ Association of Lagos State.

“The international best practice is that a container on transit would not be opened until it gets to the final port of destination, and if the cargo is on transfer, it will go with escort,” he said.

Citing example, Nicol said moving transit containers from Lagos using the rail, the management of the Nigerian Railway Corporation (NRC) would ensure the container go with escort till it gets to the port of destination.

Nicol, who sp oke to BusinessDay in a tele phone inter view, questioned how many times the Nigeria Customs, would perform examinations on one cargo.

He however said that N i g e r i a C u s t o m s S e rvice must have received a security report, which @Businessdayng

prompted them to take precautionary measures to avert delivery of dangerous substances in Nigeria.

“It comes occasionally but not a blanket directive as received recently. Shippers Association would want the Customs Service to encourage trade in Nigeria and not the other way round,” he said.

“The introduction of International Cargo Tracking Code (ICTN) is necessary now, provided the shipper is not made to pay the cost. It will take care of the mechanical approach of conducting physical examinations for transit cargo,” he added.

Nicol, who stated that Shippers Association has supported the Nigerian Shippers’ Council in its drive to make way for Ease of Doing Business in Nigeria, said the Council is negotiating with shipping companies and terminal operators to reduce costs of doing business at the ports.

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Wednesday 13 November 2019

BUSINESS DAY

BANKING Rising bank’s consumer complaints call for attention Stories by HOPE MOSES-ASHIKE

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lmost on a daily bases, Nigerian bank customers have one complaint or the other regarding their banking experience.

Greater number of consumer complaints about banking services relate to excess charges, Automatic Teller Machines (ATMs) issues, Point of Sale (PoS), Bank Verification Number (BVN), cheque related issues and fraud among others.

A total of 1,612 complaints from consumers of financial services were received in six months of the second half of 2018, indicating an increase of 173 complaints or 12.02 per cent over the 1,439 received in the first half of 2018.

The Financial Stability Report (FSR) of the Central Bank of Nigeria (CBN) for December 2018, revealed that out of this number, 1,602 complaints or 99.38 per cent were against banks, while 10 complaints or 0.62 per cent were against Other Financial Institutions (OFIs). The complaints were in various categories, such as Excess/Unauthorised charges, Frauds, Guarantees, Dispense errors, Funds Transfers.

A total of 1,496 complaints were successfully resolved or closed in the period under review, compared

with 4,723 in the first half of 2018, indicating a decrease of 3,227 or 215.71 per cent.

Total claims made by complainants during the period amounted to N7.995 billion and US$1.767 million, while the sums of N3.093 billion and US$1.724 million were refunded to customers, the CBN report stated.

Umar Ibrahim, managing director/CEO, Nigeria Deposit Insurance Corporation (NDIC), said as at June, 2019, the Corporation received a total number of 35 petitions/complaints from banks customers on various issues such as ATM frauds, unauthorised funds transfers, cheque related issues and much more.

Advancement in technology is providing convenient options and changing the way people live. As financial institutions adopt these new methods that make lives better, fraudsters are also keeping up with technology and finding new ways to exploit unsuspecting individuals, businesses and corporations by robbing them of their hard-earned money.

Access Bank plc said it is at the forefront of creating awareness and educating the public on how to protect themselves and their money from fraudsters.

Consequently, the bank has issued a guide to customers aimed at describing the most common methods

UBA reiterates support for intra-African trade, financial inclusion in Africa

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he United Bank for Africa (UBA) said will continue to support intra-African trade and increase financial inclusion in Africa by providing services that encourage investment and trade on the continent.

The bank is excited about the possibilities the future holds for intra-African trade, with the required number of countries ratifying the African Continental Free Trade Area Agreement (AfCFTA).

The agreement will create a single African market of more than a billion consumers with a total GDP of over $3 trillion.

“UBA is well positioned to support individuals and businesses when AfCFTA comes into force,” Chiugo Ndubisi, group executive, transformation and resources, said during the Africa Day Celebration, at the just concluded 2019 Lagos International Trade Fair, with the theme Boosting Intra Africa Trade: Institutions, Finance and

Technology.

He said financial inclusion is one of the major channels through which technology can affect trade within Africa. This, he said will ensure improved access to financial services across Africa, especially with the growing adoption of mobile financial services, which increases reach.

Financial institutions like the United Bank for Africa have taken up the Financial Inclusion challenge, using different digital channels to expand access to financial services.

“Our USSD banking service *919# enables people to perform banking transactions on their phones without internet access, allowing us to reach a significant percentage of Nigerians who have been previously excluded from financial services,” Ndubisi said.

According to him, while the multiplicity of currencies in Africa creates a bottleneck when in our quest to make every UBA branch a home branch to our www.businessday.ng

customers, regardless of the African country they come from, we have recorded impressive success in this regard, introducing UBAConnect, a service that has effectively supported trade in the Central African Economic and Monetary Community (CEMAC) region.”

On his part, Babatunde Paul Ruwase, president, Lagos Chamber of Commerce and Industry (LCCI), while addressing the participants and business owners said: “The African Continental Free Trade Agreement (AfCFTA) is a welcome development for us, and we are glad almost all African nations has showed interest As of July 2019, there are 27 ratifying countries and 54 signatories to the agreement. We believe the pact will further boost trade in a continent with a population of 1.2 billion and market size of about U$2.5 trillion, as it allows members to specialize in their areas of comparative advantage.”

used by fraudsters and how they can avoid being a victim.

Most common types of fraud Smishing This is a text message, often purporting to be from your bank or a regulator asking you for personal or financial information such as your account or card details.

Phishing The fraudulent practice of sending emails purporting to be from reputable companies to induce individuals to reveal personal information, such as passwords and credit card numbers.

Social Engineering This is the term used for a broad range of malicious

activities accomplished through human interactions.

It uses psychological manipulation to trick users into making security mistakes or giving away sensitive information.

Identity theft Identity theft is the deliberate use of someone else’s identity, usually as a method to gain a financial advantage or obtain credit and other benefits in the other person’s name, and perhaps to the other person’s disadvantage or loss.

Most common types of identity theft Friendly fraud - This refers to a situation in which someone known to the victim perpetuates the fraud.

For instance, friends and relatives who have access to your phones.

Stolen phone - Situations in which phones are misplaced/stolen and not reported to the Bank immediately and subsequently, payments are made to merchants via the phone, commonly airtime purchases and bill payments.

Sim swap - SIM take over without customer’s knowledge.

Detecting smishing/ phishing You should regard urgent security alerts and you-mustact-now offers or deals as warning signs of a hacking attempt.

No financial institution or merchant will send you a text message asking you to update your account information or confirm your ATM card PIN. If you get a message that seems to be from your bank or a merchant you do business with, and it asks you to click on something in the message, it’s a fraud. Call your bank or merchant directly if you are in doubt.

Threat to close down your account. No financial institution wants to lose their customers, so nobody is going to close your account unduly.

“Refuse to take the bait— simply don’t respond and delete such emails immediately. Report all smishing attacks to your bank by providing the phone number that sent the text message,” the bank stated.

Ecobankmobile promotes music, creative industry

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cobankmobile is partnering with the All Africa Music Awards (AFRIMA)

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2019 to boost the creative industry. AFRIMA, Africa’s most glamorous music event with the theme, “Feel Africa”, slated for Lagos Nigeria from 20th through 23rd, November, is an annual celebration of African talents from all regions of the continent.

Patr ick Akinwuntan, managing director, Ecobank Nigeria, said it is one of the several initiatives by the Pan African Bank to boost tourism, culture and the entertainment industry in Africa. He said it is also in line with Central Bank of Nigeria (CBN)’s initiative for banks to support the growth of the creative industry in the county.

According to Akinwuntan, Ecobankmobile *326# is pleased to support the growth of the creative and @Businessdayng

music industry which is a key driver of Africas history and rich culture and most significantly youth engagement and empowerment. “As the Pan-African bank, Ecobank is proud to partner with Africa’s most renowned music awards, which is a symbol of our support to building the family and lifestyle of Africans. Ecobankmobile *326# is joining AFRIMA to ensure that the Lagos show is a success.“ He stated.

Further, Akinwuntan said Ecobankmobile *326#, Ecobankpay, Ecobankmobile App, Ecobankxpress Account are bringing easy, affordable and convenient financial services to the youth, entrepreneurs and businesses, both local and foreign which are expected at the events.

Wednesday 13 November 2019

BUSINESS DAY

PENSION today

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In Association With

Understanding the plight of pensioners

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he plight of pensioners, issues around accrued rights and the future of the pension system in Nigeria continue to engage the thoughts of experts and analysts. Paddy Ezeala, a communication and development specialist based in Abuja reviews the situation and offer solutions to address some of the lingering challenges.

A governor in one of the states in the southeast, more than a decade ago, in the full glare of television cameras said that it was better for him to take care of current workers in his state than to devote state resources to pay gratuities to those who were already retired from service. This governor never had any paid employment in his life; neither did his parents nor siblings.

A retirement benefit to him was more or less an unwarranted distraction. In this state no retiree till date has received any gratuity since the year 2000. Many retirees have since died without collecting their entitlements. Current workers are also not that hopeful that they would be receiving their entitlements as and when due on retirement. Even salaries are not received regularly. The horizon has been gloomy.

This sentiment represents the disposition of various tiers of government in Nigeria with regard to the need to prioritize pension. Frankly, the old Defined Benefit Scheme put much burden on the Government. Even the Federal Government has been battling to offset the backlog of accrued rights of retired workers.

The lateness in the payment of Accrued Rights to retiring or retired workers is bringing untold hardship to retirees who have to wait for several months before accessing their entitlements. While Accrued Rights are largely entitlement of workers before the advent of the private sector – driven Contributory Pension Scheme (CPS), its late payment by especially, the various tiers of government makes it difficult for Pension Fund Administrators to do the needful with regard to paying retirees. This is because Accrued Rights have to be lumped into Retirement Savings Accounts (RSAs) before lump sum and Programmed Withdrawals can be paid to retirees. All the workers now retiring from government establishments must have worked under both the old Defined Benefit Scheme and the new Contributory Pension Scheme. There is no doubt that the complications arising from harmonising the entitlements of this category of workers

is affecting the smooth running of the new pension scheme. Those who do not understand these intricacies would conclude that the new pension is saddled with so many challenges. But it is not so.

For a proper understanding of the difficulty in which Pension Fund Administrators (PFAs) somehow find themselves, more light should be shed on Accrued Rights or Benefits. Accrued Rights is a total amount of a pension plan as on a specified date. They are usually in agreement with the terms of the pension plan and are based on the participant’s salary package and length of service. In Nigeria, it is not different. It is a term used to describe what the Government owes its workers who have been in service before the advent of the Pension Reform Act, 2004 (Reviewed in 2014). It is recognised as an amount acknowledged through the issuance of Federal Government Retirement Benefits Bonds. When the Government employee retires, the bonds are liquidated and added to the retiree’s balance in his/her Retirement Savings Account (RSA) managed by a PFA. It is the addition of these two that makes up the retiree’s entitlement. Sometimes, the Government finds it difficult to cash back Retirement Benefits Bonds domiciled in the Central Bank.

The truth of the matter is that the retirees bear the brunt of the technical hitches emanating from these delays. With the current economic challenges, it becomes inhumane to obstruct workers income in the guise of retirement.

It should be pointed out that it is only the Federal Government and a few states that are making efforts to offset these Accrued Rights. Many states still do not see any reason to do so. Some states have not even seen any reason to key into the CPS. In some of these states the thought of the new Contributory Pension Scheme comes to mind only when it becomes mandatory for the state to do so in order to access some financial benefits. It is only then that some state governments set up committees to assess PFAs in exercises defined by some weird criteria and extortionist propensities.

Some of these interactions have not yielded any fruits till date. The welfare of the retired workers continues to be relegated to the background.

Another bunch of retirees that have not fared any better is the workers abruptly disengaged from establishments privatized by the President Obasanjo administration. It seems that the new investors acquired the assets and not the liabilities.

While the Pension Transitional Arrangement Directorate (PTAD) has done a

great job of sorting out discrepancies and resolving them and also facilitating payment of deserving retirees, many are getting too old and some others have since died leaving behind their entitlements. A typical example is the Delta Steel Company (DSC) Aladja in Delta State. The place called DSC Township in Ovwian, Aladja has become an abode of poverty and its extended consequences. “Wives have begun to run away from their husbands, children have become miscreants, poverty and sickness have eaten deep and life has come generally unbearable” said one of the former workers of DSC who craved anonymity. “PTAD has been doing a great job, but more is expected so that things don’t get out of hand.”

While accepting that the Contributory Pension Scheme is to a great extent taking care of current workers, we should not lose sight of the liabilities accumulated under the old scheme which is increasingly making life unbearable for a weak segment of our population. The situation qualifies for a national emergency. It should also be noted that paying these entitlements is altruistic and also a way of injecting liquidity into a sagging economy and stimulating productive activities. Not all those retired are tired. Paddy Ezeala can be reached on paddyezeala@yahoo.co.uk (+2348050559960).

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

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Wednesday 13 November 2019

BUSINESS DAY

insurance today

E-mail: insurancetoday@businessdayonline.com

How financial inclusion through insurance can help take people out of poverty …as CIIN considers deepening awareness Modestus Anaesoronye

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inancial inclusion particularly at the grass root has been described as a veritable tool to bring people out of poverty, by ensuring that those factors that make them vulnerable to risks are taken care of through proper risk management.

Anike Okechukwu, vice chancellor, Enugu State University in his presentation at the 2019 Education Seminar of the Chartered Insurance Institute of Nigeria (CIIN) held in Enugu, said at the root of poverty lies the deprivation of people’s access to basic necessities such as food, shelter healthcare, education, security and assets, and to solve these issues there must be concerted efforts toward financial inclusion for all citizens.

Okechukwu noted that financial exclusion is a burden that must be lifted, and which requires adequate financial planning through insurance.

According to him, the strategic importance of financial inclusion as a catalyst for economic growth and development has been well documented, and this explains why it is today widely considered as the right of all citizens to social inclusion, better quality of life and a tool for strengthening the economic capacity and capabilities of the poor.

“Appropriate financial services can help vulnerable households reduce risk, build resilience, smoothen consumption, safeguard savings, better manage the consequences of unforeseen events, and invest in assets and grow businesses.

To achieve these, insurance remains strategic.”

Okechukwu also noted that increased health insurance can ensure adequate healthcare for many families and reduce out-of-pocket expenditure. In fact, health insurance is linked to economic growth, and reduction in poverty.

“Nigeria is battling with a number of scaring health issues including malaria, tuberculosis and infant and maternal mortality, all of which have a sweeping impact on productivity. Insurance services can make a significant difference in the lives of vulnerable individuals by helping households mitigate shocks and improve the management of expenses related to unforeseen events such as medical emergencies and a death in the family, he noted.

Another critical area that insurance could

L-R: Segun Omosehin, chairman, Education committee CIIN; Richard Borokini, director general, CIIN; Muftau Oyegunle, deputy president, CIIN; Luke Okechukwu Anike, vice chancellor, ESUT; Edwin Igbiti, treasurer, CIIN and Sunny Adeda, , past president at the 2019 edition of the CIIN Annual Education Seminar held in Enugu recently.

cover he noted is education, stating that this could ensure that parents and guardians save up enough money to ensure stability in the education of their wards.

“If education insurance is taken up, the stability in providing quality education is guaranteed even in the event of the death of parents and guardians.”

“Housing or property insurance is fundamental in ensuring that a great majority of Nigerians have access to affordable shelter and protection against natural or man-made disasters. Effectively, if one is covered by housing insurance, it will ensure easy access to funds in any event. As you know, many families are homeless today because they are financially excluded.”

Alfred Egbai of AXA Mansard speaking on the them ‘ Financial Inclusion and Insurance: The need for Speed and Simplicity’ said the mass retail market remains out of focus for the conventional insurer, as over 70 million cannot afford conventional products.

He noted that this segment understand that there are risks and are aware of the implications, but have not been properly educated to make use of insurance for risks management.

Egbai suggested that to attract this people, there must be products which are simpler and more flexible, not just smaller.

“Partnerships with players that have a large number of customers trust and embracing processes and IT enables a frictionless experience at low cost”.

Eddie Efekoha in his earlier welcome speech said, the Seminar Theme: “Financial Inclusion and Insurance – Issues, Challenges and Opportunities” has been specially selected to throw further light on the importance of inclusion, the roles of emerging markets and need for creativity in the offering of services by insurance stakeholders in order move the needle and grow the insurance industry.

According to him, it is common knowledge that insurance penetration is nowhere near where it should be in the country. As practitioners, we can also acknowledge that companies are doing all that they can within the tenets of the law to reach out to customers in order to create a sustained demand for insurance products.

“The question is, are our best efforts enough?

What more can we do to improve our lot?

Efekoha said the seminar theme beams a spotlight on financial inclusion as a major fa-

cilitator of the growth of the insurance industry.

“Even the smallest molecule of our operations should be clear and concise to our target audience and our messages should reach them where ever they are. Only then can we truly retain top of mind awareness and agree that we have taken a significant step in what we collectively desire to achieve, an Insurance industry that is a significant contributor in terms of numbers to the economic growth.”

“As risk managers, it is our lot to increase the tempo of our campaigns for insurance awareness and professionalism in order to get more people to stand up and take notice and for more Nigerians to embrace insurance as a profession and as a service offering.”

Efekoha said the CIIN will continue to leverage on all platforms to ensure the propagation of insurance education, awareness and the highest levels of professionalism obtainable in the industry. Chidi Okoro, a customer relations expert in his presentation emphasized the need for insurance companies to be flexible and innovative in their product offering.

“Creativity will unlock the opportunity, access and engagement are key drivers to deepening penetration, he said.

NEM targets promotion of healthy workforce in regular fitness work Modestus Anaesoronye

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L-R: Susan Abisola Giwa-Osagie, deputy managing director, NEM Insurance Plc; Idowu Semowo, DGM, Investment and Risk Management; Stella Omoraro, executive director, Finance; Tope Smart, group managing director/CEO; Olajumoke Philip-Akede, company secretary/legal adviser and others, during NEM Insurance 2019 fitness walk in Lagos at the weekend. www.businessday.ng

nderwriting firm, NEM Insurance over the last two year has developed the culture of holding fitness walk as part of the company’s effort to build a healthy work force, increase staff bonding and deepen awareness about insurance amongst the Nigerian public.

A similar exercise held on Saturday, being the second for the year where staff, beginning with aerobics from its head office on Ikorodu road walked to Maryland and back to the office.

Tope Smart, group managing director/CEO of the Company said this is part of the company’s efforts to build a healthy workforce, which

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impacts positively on productivity.

According to him, the initiative will have a multiplier effect on productivity as it’s targeted at ensuring that staff who could not take advantage of the in-house gym to keep fit, have another avenue to exercise for better productivity.

Smart further stated that beyond ensuring that we build physical and mental health for better productivity, “we are also creating awareness about insurance.”.

He stated that with the walk today, a lot of attention has been attracted, and this helps to build the consciousness about insurance services on the mind of people within the community and passersby.

“We are very proud of our industry and we will continue to promote it, Tope Smart said.”

@Businessdayng

Wednesday 13 November 2019

BUSINESS DAY

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insurance today E-mail: insurancetoday@businessdayonline.com

African microinsurance market undergoing considerable change in uptake Modestus Anaesoronye

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ealth insurance in Africa has exper ienced a boom in the last five years and consolidated into two distinct branches - insurers supporting comprehensive public schemes, on the one hand, and simple, complementary health products like hospital cash and health value-added services on the other, according to the “2018 Landscape of Microinsurance in Africa”.

This latest study in the Microinsurance Network’s World Map of Microinsurance Programme, according to the Middle East Insurance Review shows that in particular, hospital cash products (simple insurance products that offer a cash pay-out per night spent in hospital) have proved remarkably successful.

The 2018 Africa Landscape Study is based on 100 insurers’ self-reported data on the performance of their microinsurance products as of 31 December 2017.

By 2017, health insurance products were respon-

R-L: Shola Tinubu, president N-BA; Feyi Tinubu; Bintu Fatima Tinubu, Iyalode of Lagos and Stephen Forbes, Vice President N-BA and Director Operations, British Council at the 50th anniversary of Nigeria Britain Association in Lagos

sible for the second largest proportion of reported lives covered in the region, at 4.3 million lives covered. This corresponds to 28 percent of reported lives covered in that year, compared to just 14 percent of lives covered through health products in 2014. The 100 insurers,

through their microinsurance activities, collectively covered a total of 15 million lives — almost 2 percent of the estimated 700 million in the low-income bracket in the continent.

Health insurance has joined life insurance as a product line capable of

reaching significant scale.

However, some other product types, particularly crop and livestock insurance, are still struggling to reach scale, with some important and encouraging exceptions.

The previous similar microinsurance study was carried out based on 2014

data. At that time, a new freemium model of distributing free insurance products and paid top-ups through mobile network operators (MNOs) reached its peak. Many schemes were signing up a million or more customers at a time, leading to a boom in the number of lives covered through microinsurance on the continent.

By 2017, the freemium model had largely collapsed and, with it, many large schemes covering millions of customers.

The 2018 report says that this sudden rise and fall in the number of lives covered likely disguises a slower and more durable growth through other models. Several MNO-linked schemes have abandoned the freemium model and proved successful by focusing on paid products. This is likely to continue as increased mobile money use facilitates premium payments.

In addition, new distribution opportunities are emerging through digital platforms, such as digital marketplaces, e-commerce and ride-hailing platforms.

These are already being used by 12 percent of the insurers in this study. The industry may also be seeing a tentative shift towards combined sales models, in which insurers make direct sales to customers of partner institutions.

Claims ratios remain relatively low in most business lines apart from livestock and crop insurance. Nonetheless, the median claims ratio across all product lines of 45 percent represents a welcome return to previous levels, after the median claims ratio dropped to 25 percent in 2014.

Inefficient claims payments continue to be a problem in many countries and affect client experience. The median claims turnaround time for the region was 10 days. Nonetheless, turnaround times varied significantly from just one day to 90 days and there is a particular need to address slow turnaround times in property insurance, for which insurers in this study reported a median turnaround time of about two months.

Allianz posts strong Q3 operating profit despite dip in P&C Modestus Anaesoronye

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lobal insurance giant, Allianz has reported a slight increase in net income to €1.9 billion for the third-quarter of 2019, while operating profit was strong at €3 billion despite a decline in Property and Casualty (P&C).

AllianzOverall, Allianz saw its total revenues increase by just over 8 PERCENT to €33.4 billion in Q3 2019. Operating profit was strong for the quarter and was aided by higher asset under management driven revenues within its Asset Management unit and higher profits in Life/ Health, somewhat offset by a dip in P&C profits in the period.

Oliver Bäte, Chief executive officer (CEO) of Allianz SE, commented: “Allianz has once again delivered very solid results in challenging times. We are proud that so many

customers trust in our products and in our brand.

We are ready to reach the upper half of our operating profit outlook despite a significant increase in external challenges.”

The insurer’s P&C insurance segment has reported an increase in revenues of more than 6% to €13.2 billion in the third-quarter of 2019. However, the underwriting result was hit by a lower contribution from run-off year-on-year, which offset improvements in the expense ratio and accident year loss ratio.

As a result, the unit’s combined ratio increased by 1.2 points to 94.3 percent in Q3 2019 when compared with the same period in 2018.Commenting on the performance of the firm’s P&C unit in the period, chief financial officer (CFO), Giulio Terzariol, said: “I am pleased with the ongoing progress in the productivity efforts within our PropertyCasualty segment. Our business is in good shape www.businessday.ng

as shown by the strong revenue development. Our underwriting remains disciplined, while we benefit from a healthy price momentum which supports our profitability going forward.”

In life/Health, Allianz notes dynamic new business growth and robust margins. The present value of new business premiums grew by more than 20% to € 16.1 billion in Q3 2019, driven mostly by life insurance business in Germany, the U.S., and Italy. Operating profit jumped to €1.083 billion versus €1.052 billion in Q3 2018.

“Our Life/Health business segment recorded a robust new business margin of 3.1 percent in a challenging interest rate environment. We continue to work on our products to provide attractive solutions for both our policyholders and our shareholders. Our Life/Health business is clearly on track to achieve our full-year targets,” said Terzariol.

R-L: Gboyega Olanbiwoninu, chairman Insurance Group & Council Member, Lagos Chamber of Commerce and Industry (LCCI); Jerry Chia, Brightway International Exhibition Corp. Ltd; Toki Mabogunje, deputy president, LCCI and Shade Bembatoun Young, council Member LCCI at the closing ceremony of Lagos International Trade Fair in Lagos

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@Businessdayng

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Wednesday 13 November 2019

BUSINESS DAY

Harvard Business Review

MANAGEMENTDIGEST

Life’s work: An interview with Julia Gillard — part 2 Australia’s former prime minister talks about discipline, resilience and misogyny. ulia Gillard was Australia’s prime minister from 2010 to 2013 and is the only woman to have held the position. Drawn into politics as a student activist, she persevered through early election defeats to win a Labor Party seat and then served as deputy prime minister under Kevin Rudd before eventually challenging him for the top job. In 2012 she gained global fame for a speech decrying misogyny. A year later Rudd won a leadership contest against her, and she left government.

She now focuses on advocacy for causes including education, gender equity and mental health because, as she recently told the Simmons Leadership Conference, “If you are really passionate about something and raise your voice, you can make a difference.”

Q: After you lost the 2013 leadership challenge, why did you leave politics?

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A: I said that if I lost, I would.

I thought it should be a clean decision. I didn’t want to give instability to my political party.

So I exited and laid low, lived my life like a fugitive to make sure that I didn’t get caught by the media and create any distraction during that election. It was kind of an act of loyalty to the Labor Party. And personally, I think that if you’re not on the way up, you’re on the way down, so maybe it’s time to think about a new future.

Q: How did you decide on that second act?

Q: Why did you decide to speak out on sexism when you did?

A: I wish there was some intricate back story. The truth is, I hadn’t decided that it was the moment. That day a man from another party whom I had supported to be speaker of the House of Representatives was unmasked as having sent some sexist text messages. So I was expecting criticism, even though I couldn’t have known about the texts. When we got into question time in Parliament, the opposition leader, Tony Abbott, moved into the debate, and so, whilst he was speaking, I handwrote a reply. Because I’d been expecting him to talk about sexism, I’d had my office give me his top sexist quotes. But it wasn’t some thought-through strategy with a wonderfully chiseled speech that we’d been working on for days. It welled up. I got a blank piece of paper and just scribbled down words to help guide me from one point to another. Looking back, I think it was driven by a deep frustration that after every sexist thing directed at me that I’d bitten my lip on, now I was going to be accused of sexism — the unfairness of that. That anger propelled it.

Q: And how did you deal with the fallout?

A: I thought it was a forceful speech because the opposi-

tion leaders had dropped their heads during it. But I had no sense of how it was going to resonate outside the parliamentary chamber. Afterward, when I sat back in my chair, my deputy prime minister, Wayne Swan, had this odd expression on his face and said, “You can’t give that kind of ‘j’accuse’ speech and then sit down.” Then the leader of government business, Anthony Albanese, said, “Oh, I felt sorry for Tony Abbott.” So I could tell there was something in the air. By the time we’d been released from the debate and I’d walked back to my office, phones were ringing, and people were sending emails. But it was only over the next few days that it was reported around the world. At first I was somewhere between confused and amused that it could get so big. Nowadays, with social media what it is, you might realize. But this was then. Then there was a period when I felt almost resentful about it — “You know, I was in Parliament for 15 years, deputy prime minister for three, prime minister for three, and apparently it all telescopes down to this one speech.” But I’m at peace with it now. At the end of the day, if it’s the only thing people overseas know about Australian politics — and it often is — it’s a pretty good one thing to know. www.businessday.ng

Q: When you were Kevin Rudd’s deputy and didn’t feel that he was leading effectively, how did you make sure that things still got done?

A: For a long period I stepped in behind the scenes as much as I could to try to make up for the deficits — even things like diary management, political communications, intermingling with his staff.

Whilst the workload was intense, it would have been sustainable provided there was a strong bond of trust between Kevin and me. But one fateful day some newspaper coverage indicated that even that had fallen away on his side. And I thought, Well, that means I can’t keep doing all that I am to hold the government and the prime minister up. So there has to be change. As my great Labor predecessor Paul Keating always said, “Not a day to waste.” Political leadership for me was always about what you could achieve through governing, not a status thing.

Q: You stayed quiet for so long about those pressures and your reasons for challenging Rudd. Why? A: Well, when I became prime minister, we needed to get ready to fight an election, and I wanted it to be about the

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big things we believed in and would do as a Labor Party, not about internal matters. Unfortunately, there were several big leaks during the campaign — distorted versions of internal discussions — which kept hijacking the agenda. There was some shock about how I emerged, and all sorts of static around being the first woman prime minister. But I wanted to form a government and get on with governing.

Q: Australia’s carbon tax was a big issue during your administration. Why did you back away from it?

A: My underlying beliefs never changed. Climate change is real, we have to address it, and the best way to do that is through market-based mechanisms. But it takes judgment about the politics, about when you can press and succeed, and when you can’t. And what prevented Kevin Rudd from succeeding with the Carbon Pollution Reduction Scheme was the inability to get it through the Senate. The Conservatives were opposed to it; the Greens refused to support it. In the days of our minority government there was a window to get an emissions trading scheme instead, and we went for it.

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A: I was suspended in time for a period. When you have an absolutely relentless work schedule, you don’t realize how tired you are until you stop.

There’s a physical recovery and an emotional decompression you need to do. After I came through that, I started to think about what in life I wanted to take with me or discard. I didn’t want to be a continuing combatant commentator in Australian politics, but there were some things to which I wanted to contribute. So I structured my new engagements around those, a number of them at a global level.

Q: Do you miss governing or politics?

A: I miss bits of it dreadfully — the ability to do the big things you believe in, the intensity of the bond you have with the best of your colleagues. But the sheer relentlessness of it I don’t miss. I’ve never woken up any morning and said, “Gee, I miss the press gallery.”

Q: You chose the public sector. Is that the best way to make a difference in the world today?

A: I am 100% biased. There are other ways, but I don’t think anything surpasses what politics can bring. At its best, it’s a noble cause; we want the best, brightest, most motivated, passionate, concerned, to go into it. But you can’t insult people’s intelligence by pretending there will be no nasty bit, no gendered bit. The political life is not for everyone. But to lead a nation and make a huge difference to its future is an absolute privilege.

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MANAGEMENTDIGEST

Getting over your fear of talking about diversity DAISY AUGER-DOMINGUEZ

W CONNECTING

hile 27% of chief diversity officers still find themselves having to make the case for diversity, inclusion and belonging in the workplace, the good news is that the majority of top leaders already understand how critical these efforts are. I’ve found many leaders eager for actionable frameworks and advice to help them create more inclusive cultures. But again and again I find one thing plaguing their attempts: fear.

These leaders are so terrified about messing up and saying the wrong thing to all their stakeholders — employees, board members, funders, clients, customers and the wider world via social media — that they’re paralyzed into inaction.

It’s absolutely crucial not to let fear hold you back from full engagement on this issue. Here’s what I tell leaders who are afraid of making a misstep when trying to enhance diversity, equity and inclusion in their workplaces.

— ASK BETTER QUESTIONS: Genuine inquiry can promote trusting relationships and a safe, respectful and supportive work environment, even in times of complex change. And because you don’t have to pretend you’re more knowledgeable about these topics than you already are, asking questions can also help you overcome uncomfortable silences and awkward exchanges regarding power and privilege.

If you’re afraid of making a vo-

cabulary blunder — using the wrong terminology for someone’s race, for example, or misgendering people — just ask them about their pronouns, or what role race plays in how they experience the workplace. For those who have been unduly bearing the burden of marginalization and exclusion, though, some questions may trigger deeply held emotions.

Show courage not just in what you ask but in how you listen. Suspend your judgment, reduce your

instinct to respond reactively and take the time to deeply reflect on what people tell you.

— READ UP: There is no playbook for standing face-to-face with injustice and oppression while running an organization. But there are many resources that can help you better understand the dynamics and voices at play.

— LEAN INTO THE UNCOMFORTABLE: The only way to address the challenges associated with racism,

sexism and other forms of injustice in the workplace is to be open to experiencing this discomfort in an honest and forthright way.

Push yourself to communicate candidly about difficult topics. Accept that you are never going to be perfect. Apologize and admit your mistakes and blind spots, express gratitude when someone corrects you, listen to those who have been injured or silenced and commit to doing better. Then pick yourself up, go back out there and do better. Your actions as a leader are doubly powerful. By standing up for other people, you signal to others that it’s safe for them to do so as well.

— JUST GET STARTED: There are no shortcuts or silver bullets for enabling inclusive workplaces.

But you need to start somewhere.

You can send a powerful message as an ally in a position of power and influence when you’re the one who takes up the work.

Daisy Auger-Dominguez is a human capital executive and the founder and CEO of AugerDominguez Ventures.

How targeted Ads and dynamic pricing can perpetuate bias cesses that rely on automated decision-making.

As advancements in machine learning continue to shape our economy, and concerns about wealth inequality and social justice increase, corporate leaders must be aware of the ways in which automated decisions can cause harm to both their customers and their organizations.

It is more important than ever to consider how your automated marketing campaigns might discriminate against social and ethnic groups. Managers who anticipate these risks and act accordingly will be those who set their companies up for longterm success.

ALEX P. MILLER AND KARTIK HOSANAGAR CONNECTING n theory, marketing personalization should be a win-win proposition for both companies and customers. By delivering just the right mix of communications, recommendations and promotions — all tailored to each individual’s particular tastes — marketing technologies can result in uniquely satisfying consumer experiences.

In new research, we studied the use of dynamic pricing and targeted discounts, and asked if, and how, biases might arise if the prices consumers pay are decided by an algorithm.

In today’s environment — with marketing automation software and automatic retargeting, A/B testing platforms that dynamically optimize user experiences over time, and ad platforms that automatically select audience segments — more of our important business decisions are being made automatically, without any human oversight. And while the data that marketers use to segment their customers are not inherently demographic, these variables are often correlated with social characteristics.

To investigate this phenomenon, we looked at dozens of large-scale e-commerce pric-

I

ing experiments to analyze how people around the United States responded to different price promotions. By using a customer’s IP address as an approximation of his or her location, we were able to match each user to a U.S. census tract, then use public data to get an idea of the average income in the area.

Analyzing the results of millions of website visits, we confirmed that people in wealthy areas responded more strongly to e-commerce discounts than those in poorer ones, and since dynamic pricing algorithms are designed to offer deals to the uswww.businessday.ng

ers most likely to respond them, marketing campaigns would probably systematically offer lower prices to higher income individuals going forward.

What can your company do to minimize these socially undesirable outcomes? One possibility for algorithmic risk-mitigation is formal oversight of your company’s internal systems. Such “AI audits” are likely to be complicated processes, involving assessments of accuracy, fairness, interpretability and robustness of all consequential algorithmic decisions at your organization.

While this might sound costly

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in the short term, it may turn out to be beneficial for many companies in the long term. Because “fairness” and “bias” are difficult to universally define, getting into the habit of having more than one set of eyes looking for algorithmic inequities in your systems increases the chances that you will catch rogue code before it ships. Given the social, technical and legal complexities associated with algorithmic fairness, it will likely become routine to have a team of trained internal or outside experts on hand to find blind spots and vulnerabilities in business pro@Businessdayng

Alex P. Miller is a doctoral candidate at the University of Pennsylvania’s Wharton School. Kartik Hosanagar is a professor at Wharton.

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TRANSPORTATION Motoring

RailBusiness

ModernTravel

Roads

WAAS CEO says Nigeria holds key to Africa’s autoparts market … Receives official endorsement of NADDC

MIKE OCHONMA

MIKE OCHONMA Transport Editor

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igeria presents a very huge potential in the automotive components and spare parts market if properly harnessed, given the number of vehicles in the country which is estimated at over 20 million, so says Jammie Hill, managing director of BtoB Events, organisers of the just concluded West Africa Autoparts Show (WAAS), a new international trade exhibition at the Landmark Centre, Victoria Island, Lagos.

The maiden WAAS show event in Lagos which held from November 6 to 8 did not only pull a large audience and stakeholders from the regional and global automotive sector under one roof, but also had a wide range of exhibitors from the automotive maintenance and repair sector.

In attendance at the exhibition were car parts manufacturers, assemblers, and distributors, commercial garages, retailers, mechanics, fleet operators, and logistics companies of Nigeria and across the world that thronged the arena from the first day of the exhibition.

In the first day, an estimated 100 exhibitors from Nigeria and across the world relocated to Landmark Event exhibition, Lagos, venue of the exhibition, to forge new business ties and show off the latest developments and products in the spare parts and services sector.

It also provided a fertile ground for suppliers, dealers and manufacturers to discuss the best practices for the industry and find out more about the developing local motor manufacturing industry.

Jamie Hill said that the event was put together in the country because organisers of WAAS strongly believe in the Nigerian market and the opportunity it presents. The exhibition

Lagos-Badagry road palliative works exposes security challenges

he said is in line with the federal government’s plans to make sure that a large percentage of cars on roads are made in Nigeria.

Describing Nigeria as a market that needs to be represented by a platform such as an exhibition, Hill said “It is an opportunity to bring the stakeholders under one roof to interface and move their businesses forward”.

On what they intend to achieve with the exhibition, Hill pointed out that, the exhibition is a perfect opportunity for the local automotive industry to strive and get better positioned. ‘’We want to create global recognition to the Nigerian auto parts sector; be they spare parts or auto assembly because we hope a lot more manufacturers are coming up in Nigeria”.

Emphasising that WAAS marketing strategy is to target ECOWAS countries first, Hill however, observed that Nigeria is the power-

house for the exhibition project.

Expressing optimism that the Nigerian government is very proactive in their plans to ensure that more of the cars on the roads are assembled locally, Hill also expressed hope that the WAAS will align themselves with the plans of the government and the National Automotive Design and Development Council (NADDC) so that they can work together.

Describing the Nigerian market, Hill said “There is a significant value for the auto parts market in Nigeria.

There is a lot of value placed in this market from the rest of the world”.

Jet Systems Automobile Industries Limited (JSAIL) was also the major event sponsors. Sanjay Rupani, director, sales and marketing of JSAIL, said the company is part of the sponsorship of this year’s WAAS event.

Rupani said they have mutually beneficial relationship with WAAS that they will work with on a long term basis. On why they entered

into the partnership. He admitted that it was necessary to use the platform to showcase the Jet brand that the company is trying to promote.

Rupani said that, Jet Systems Automobile Industries Limited is using the WAAS as a platform to show the world that, the company has product that is not just only good for the road conditions of Nigeria, but can be used for other roads.

“It is a long term relationship and we will be supporting them in all their activities. The aim is to try to enrich and develop local content.

We are very much in support of what they are trying to achieve. We are poundly associating and mentioning that it is a Nigerian brand that we are trying to develop from Nigeria to the world.’.’ Rupani concluded.

It also has the official endorsement of the National Automotive Design and Development Council (NADDC) and backed by many automotive-allied corporate sponsors and partners.

s palliative works on the bad sections of the road along the Lagos-Badagry expressway commences, motorists using the busy international highway appear more concerned about cases of robbery of road users which is a recurring decimal along the corridor especially when there are no functional street lights and effective security patrol by the relevant security agencies at peak periods of the day.

The Lagos state government had last week announced a number of traffic diversions from the major carriageway to the service lane on the Lagos-Badagry expressway between Saturday and Sunday. But checks reveal that even after the 48 hours time frame set aside for the job to be completed, contractor handling the project are still seen on the affected portions of the corridor.

Special adviser to Governor Babajide Sanwo-Olu on works and infrastructure, Aramide Adeyoye said last week that the diversion was to enable the contractors’ launch beams at the Alakija Interchange Bridge.

She advised motorists coming from Agboju to Trade fair to use alternative routes before the Al-

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Ford’s ‘Next Titan TV Show’ committed to entrepreneurship, says Coscharis MIKE OCHONMA

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ontestants from the ongoing entrepreneurial reality TV show, The Next Titan last Friday paid a courtesy call on Coscharis Motors at their Ford office in Victoria Island, Lagos.

The Next Titan, now in its sixth season, is a platform for young entrepreneurs to demonstrate their talent in business. The primary purpose of the programme is to challenge the public’s perception of entrepreneurship, to awaken the nation’s entrepreneurial spirit, to inspire contestants and viewers to strive for success in business, and become masters of their own destinies.

After a grueling screening process which saw thousands of young entrepreneurs between the ages of 21 and 40 compete for a chance to get into the “House”, sixteen participants emerged and have been doing battle in various business tasks, such as strategy, sales, marketing,

‘Next Titan TV Show’ Star Prize

and promotions.

During the competition, participants and viewers get exposure to real-life entrepreneurial challenges through informal training, and a chance to learn from top business leaders. At the end of the contest, only one will emerge as The Next Titan.

Mide Kunle-Akinlaja, executive www.businessday.ng

producer of the show who led the contestants to Coscharis Motors, while thanking the organizations for their support said, “Participation in the reality show year after year only demonstrates Coscharis Motors’ and Ford’s commitment towards emerging entrepreneurs.”

In his remarks during the team’s visitation, Abiona Babarinde, gen-

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eral manager, marketing and corporate communications, Coscharis group said, “We are excited to support the Next Titan reality show once again. Henry Ford once said that, a business that makes nothing but money is a poor business.

Therefore, Coscharis aligns with Ford’s objective as a corporate citizen to support Nigeria’s upcoming business owners with entrepreneurial skills that will make a contribution towards the economy and for them to lead by example.”

The local Ford franchisees in Nigeria and Ford Motor Company are the official automobile sponsors of the entrepreneurial reality TV show, for the fourth consecutive season.

“Since inception of its participation in Next Titan, Coscharis Motors and Ford are proud to have given previous winners, over the past four seasons, Ford vehicles to help run their business. This year, the business will continue the @Businessdayng

momentum and give the winner of Season 6 a brand new Ford Figo.” said Babarinde.

Babarinde went on to say, “Coscharis Motors wishes all participants the best of luck for the competition, We believe that the current contestants will both inspire young entrepreneurs, and educate society on just how much hard work goes into growing a business.

They will push themselves to the limit, digging deep into their minds to discover and exhibit their true entrepreneurial potentials. According to Cosmas Maduka, founder of Coscharis Group, we really don’t know who we are until we see what we can do.”

“Remember, while each and every one of us has the power to impact someone’s life and make the world a better place, it is in combination with the ongoing efforts of others that the collective impact has the potential to be really profound,” He concluded.

Wednesday 13 November 2019

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TRANSPORTATION Motoring

RailBusiness

ModernTravel

Roads

‘Kajola wagon assembly plant will boost local content growth’ ....It will generate about 5000 jobs to Nigerians, says Amaechi

Continued from page 30

MIKE OCHONMA

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igeria is on the match towards breeding life into the country’s railway modernisation system as a viable alternative means of transporation.

This follow’s last weekend’s ground-breaking ceremony of the Kajola wagon assembly plant ceremony performaned by vice-president Yemi Osinbajo in Kajola, Ogun State.

During his address, Rotimi Chibuike Amaechi, Nigeria’s minister of transportation said the upcoming wagon assembly plant will complement the federal government’s quest in local content drive and would be able to conserve the country’s much needed foreign exchange which can be deployed to other areas of development.

The transportation minister recalled that on March 7, 2017, vice president Yemi Osinbajo performed the ground breaking ceremony for the construction of the Segment 2 of the Lagos-Kano Railway Modernization project: the Lagos-Ibadan segment with extension to Lagos ports complex at Apapa which is nearing completion.

The segment holds the key to the development of the economy of the nation from the commercial city of Lagos to another commercial hub of Kano, northern Nigeria.

In a move to meet the increasing demand of both passenger and freight on the new Nigeria standard gauge railway service, the federal government awarded contract for the procurement of rolling stock that is, locomotives, coaches, wagons and contemporary diesel multiple units.

The procured equipments were to enhance the movement of passengers and freight on the Abuja-Kaduna, ItakpeAjaokuta-Warri train services as well as the ongoing LagosIbadan Railway. It will also serve any railway service in the

West-African sub-region.

It was in realisation of meeting the passenger needs of the rail transportation system that, the federal ministry of transportation realized the need of the advantage to set up this type of plant.

This is in consideration of the potential need in view of the on-going rail projects in the country and the subregion that the government encouraged the CCECC to establish the Kajola wagon assembly plant. It is expected that the plant would generate job opportunities for Nigeri-

Lagos-Badagry expressway palliative works exposes...

ans and as well facilitate the much-desired objective of the government towards the local content capacity development.

It was in the pursuit of these objectives that the federal ministry of transportation signed an agreement with the CCECC Nigeria Limited in March, 2018 to establish the plant for the production and assembling of rolling stock, spare parts and maintenance equipment in Nigeria.

Following this development, CCECC conducted a feasibility study in which the choice of Kajola, Ogun State was arrived at as the suitable

location for the project.

The project is a direct investment of Messrs. CCECC Nig. Ltd in the country and would remain as part of the gains from the contract signed for the supply of rolling stock.

This will be the first of its kind in Nigeria and the first batch of the wagons to be assembled from the production line of this plant will form part of the rolling stock for LagosIbadan and Abuja-Kaduna Railway operations. Other rolling stock would be produced as its production capacities increase.

When completed, the facility would be able to generate about 5,000 jobs. At the long run, Nigeria would be able to manufacture rolling stock for domestic use and for export to other African countries.

Among all these, it is cardinal to mention that the sustainability of our railway modernization projects would depend on our ability to develop local capacity to construct, maintain and manage our new railway system. It is on this note that we feel that this project is germane to the railway development in Nigeria and that CCECC should be given every reasonable support to actualize this investment.

The transport minister expressed gratitude to the president and the vice president for their unwavering commitment and support in the execution of railway projects.

akija flyover into the service lane and enjoined motorists to journey through the diversion on the service lane and divert into the main carriageway after the Alakija interchange and continue inward Badagry.

The affected area according to her is the Segment II of Lot 2A (AgbojuTrade Fair) inward Badargy only as the Lagos bound traffic is not affected.

In a statement signed

by Adesegun Ogundeji, deputy director, and public affairs of the ministry, the special adviser appealed to motorists and road users on the axis to bear with government adding that, the measure was appropriate for speedy completion and delivery of the road.

“Palliative works have been carried out on the bad sections of the road such as the intersections into the service lane before Alakija flyover, the junction between the access road into Festac at the 3rd gate and the intersection after the Alakija interchange into the main carriage lane from the service lane. The repair was to effectively manage traffic and reduce the impact of the diversion on road users’’.

She said.

Kia freaks take fesh breathe of new EV SUV Coupe …Concept makes international debut at CIIE 2019 MIKE OCHONMA

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ia Motors has revealed its new Futuron Concept ; an illuminating all-wheel drive SUV coupe which proposes new designs for future electric vehicles.

The concept represents the modern and confident image of a progressive electric SUV coupe envisioned

by Kia. The Futuron name itself is a portmanteau of ‘future’ and ‘on’, hinting at the switched-on, electric nature of future SUV designs from the brand.

With a design based around the notion of dynamic purity, it merges elegant proportions with pure shapes and surfaces. Its lightweight SUV coupe body incorporates a fully-electric all-wheel drive powertrain, wrapped in bold yet modern exterior surfaces, and with a flexible, high-tech interior.

The Futuron makes its public debut last week at

the 2019 China International Import Expo (CIIE) in Shanghai, where it will be on display to the public until Sunday, November 10.

As an electric SUV coupe, it is built around a single, strong ‘360-degree’ design notable for its pure, smooth form devoid of ornament.

The delicate diffusion of the body’s surfaces creates a series of taut, flowing shapes which twist, expand and contract around the body.

The result is a sleek and streamlined shape, creating www.businessday.ng

an aero-efficient profile.

The novel proportions are immediately striking. Its low-profile SUV coupe body makes a strong statement of intent for Kia’s future cars, which will be confident, sporty and modern, yet also elegant.

At 4,850 mm in length, 1,550 mm tall and with a 3,000 mm-long wheelbase, the elevated ground clearance is matched with a low, lean body to create a dynamic, confident posture.

The fully-electric pow-

ertrain makes this shape possible. A high-capacity battery is mounted low in the vehicle’s body, beneath the cabin floor, providing electrical energy to four powerful in-wheel electric motors.

The elevated stance is therefore matched with a low center of gravity and a cutting-edge e-AWD system which delivers lightningfast responses to driver inputs.

A sports car on an SUV platform, combined with

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comfortable, lean-back seats, Futuron offers users a new type of interactive driving experience suitable for urban city environments. Various elements of the vehicle’s structure and design foster the important connection and interaction between car and driver.

The front fender flows backwards from the front of the hood before plunging into the cabin itself, establishing a connection between the driving seat and the road ahead. Its roof is a diamond-shaped panoramic glasshouse which sits atop the 360-degree core, in the best traditions of UFO and flying saucer design.

While flooding the cabin with natural light, it also extends down the bonnet to give drivers an unparalleled view ahead. The glasshouse also incorporates a network of LiDAR (light detection and ranging) sensors capable of providing Level 4 @Businessdayng

autonomous driving features, enabling hands-off and eyes-off driving in most conditions.

The newly-designed front of the car, like that of the Imagine by Kia Concept first revealed earlier in 2019, expresses a new design interpretation for Kia’s future electric vehicles.

With a wider ‘tiger face’ shape, the grille incorporates the Futuron’s headlamps, an innovative ‘Star Cloud’ design which gives the car a dazzling new nighttime identity. The concept’s lighting design not only highlights a new design form for the front of the car, but also embodies a new lighting concept for Kia, taking inspiration from nebulae in the night sky to create a geometric patchwork of matrix LED lighting. The Star Cloud is also incorporated into the rear of the car, displaying a distinct light signature to anyone following the Futuron.

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Wednesday 13 November 2019

BUSINESS DAY

PRIVATEEQUITY &FUNDRAISING

African start-ups secure $699m deals in 10months Stories by MICHAEL ANI

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frican start-ups are on track to set new records in the value of deals recorded

in 2019.

As of October 31, a total of 73 start-ups have secured at least $1 million each in funding and $699 million in total, according to data provided by Maxime Bayenof GreenTecCapital, a research firm that tracks Venture Capital deals across Africa.

That’s a new high compared to the historic $725 million deals raised in the whole of 2018 which at that time was three times the total value of 2017 deals by some counts.

Start-ups in Kenya, Nigeria, South Africa, and Egypt take the shine claiming about 73 per cent of deals that are worth over $1 million, and also, accounting for about 71 per cent of the funding from those deals.

This shows the domineering power of these countries as they continue to dominate Africa’s start-up

scene—though not to the extent they did last year. In 2018, Kenya, Nigeria, and South Africa alone claimed 78 per cent of venture capital funding on the continent.

Tools to help entrepreneurs launch businesses are still concentrated in these regional powerhouses. Of the 643 active hubs offering funding, facilities, and other in-kind support to African innovators, 42 per cent are located in one of the

four leading tech countries.

Cairo, Cape Town, Johannesburg, Lagos, and Nairobi each have 20 or more hubs.

French-speaking countries have lagged their anglophone neighbours in startup funding. Language barriers with potential investors and relatively small economies are challenges to entrepreneurs in West and Central African countries in particular. But 2019 has seen that trend start to

change as Senegal, Côte d’Ivoire, Mali, and Togo— as well as Morocco, Tunisia, and Algeria in North Africa—see growth in their economies and startup ecosystems.

The year 2019 has also seen innovation hubs— incubators, co-working spaces, and other institutions that support entrepreneurs—multiply and mature. The Global System for Mobile Communica-

tions Association (GSMA) counts 643 African tech hubs, up more than 40 per cent from last year.

The start-ups themselves have also reached important milestones. For example, Jumia, an e-commerce platform, became the first African start-up to list on a major stock exchange when it went public in April.

Besides overseas venture capital and private equity, foreign corporations and governments also invest in African startups. Goldman Sachs has led fundraising for two African start-ups this year: a $30 million round for Kenya’s Twiga Foods and a $10 million round for Nigeria’s Kobo360. France has pledged to invest $2.8 billion in African entrepreneurs by 2022.

Four in 10 Africa-focused VC funds are now based in Africa. These points to the young but fast-growing classes of home-grown venture capital funds that are changing the way African start-ups raise capital. Local angel investor networks are also

growing as wealthy Nigerians, Kenyans, and South Africans begin funding new ventures.

The Dakar Angels Network, Lagos Angels Network, Benin Business Angels Network, and Africa Business Angels Network were all founded in the last decade.

In 2018, fintech was the unrivalled leader of venture capital investment in Africa: The industry secured 40 per cent of the funding raised that year. Mobile banking has been incredibly successful in African countries, where apps can provide the financial infrastructure that reaches previously unbanked and underbanked populations.

Fintech’s success in raising capital reflects these platforms’ importance.

While fintech continues to lead in deals in 2019, there are signs that funders are seeking more diverse investments. Just 28 per cent of funding from deals over $1 million went to fintech, and the year’s only $100 million deal went to education software start-up Andela.

15 African deals in October you need to know The month of October was a remarkable one for Private Equity players as it saw the close and/or announcement of various deals as well as exits in the African investment landscape. A compilation of these deals is put forth below.

Deals wiga Foods, a Kenyan B2B food distribution company, raised $23.75 million in a Series B equity round led by Goldman Sachs, with participation from existing investors including the International Finance Corporation, TLcom Capital and Creadev. An additional $6 million in debt was raised from OPIC and Alpha Mundi.

DOB Equity, a Dutch family-backed impact investor in East Africa, invested in Moringa School, the technology learning accelerator, to help it capitalise on the fast-growing demand for technical-skilled professionals. Moringa provides digital and professional training to students, increasing their employability and access to the labour market.

Vantage Capital, Africa’s largest mezzanine fund manager, provided €8 million of mezzanine funding to Equity Invest S.A., the holding company for six Moroccan technology companies. Vantage’s funding has enabled the founder, Ali Bettahi, to secure a controlling equity stake in one of Equity Invest’s flagship subsidiaries by facilitating the buy-back of equity

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from an exiting private equity investor, PME Croissance, managed by AfricInvest.

Moringa, an impact investment fund initiated by the Edmond de Rothschild Group and ONF International, acquired a 46 per cent stake in SOBEMA (Société des Boissons et Eaux minérales du Mali). Created in 2013 by Dino Ballestra, a seasoned entrepreneur with a solid track record in the food industry, SOBEMA is a pioneering Malian company that aims at providing local markets with a range of different beverages, based on locally sourced ingredients.

South Africa’s Agile Capital, through its private equity fund with RMB Corvest, Agile Capital IV, has acquired a significant stake in Averge Technologies. Averge is a specialist solutions provider and distributor of components specific to both the communications industry and the energy sector, additionally providing related consultancy services to its clients.

SweepSouth, the online platform providing on-demand home cleaning services, announced its inten-

tion to grow its market share in South Africa and launch additional services following the closure of a successful funding round that has seen the company raise more than R50 million ($3.3 million) in new investment. The final deal signed in the funding round was with the Michael & Susan Dell Foundation, invested $1 million into the company. This investment follows the June announcement of a R30 million ($2 million) investment by Naspers Foundry. Existing investors Smollan, Vumela, CRE VC, and musician and venture capitalist Black Coffee have also reinvested.

Fundraising The European Investment Bank has approved an equity participation of $50 million into African Development Partners III, a pan-African, generalist, closed-ended private equity fund advised

by Development Partners International (DPI). The fund has a target of $800 million.

Adiwale Partners, the private equity firm focusing on growth capital investments for SMEs in French-speaking West Africa, has announced

the first closing of its first fund, Adiwale Fund I at €50 million. The fund has attracted investors from Africa, Europe and North America.

Investors include development finance as well as commercial investors.

Dutch development bank FMO has announced a €4.40 million investment in the Cathay AfricInvest Innovation fund. The fund, a partnership between private equity fund manager AfricInvest and Cathay Innovation, will contribute to the development and scaling up of innovative companies that demonstrate strong growth in Africa.

The IFC is investing $10 million in CardinalStone Capital Advisers Growth Fund (CCAGF), a private equity fund launched and managed by CardinalStone Capital Advisers. The fund will expand access to finance for high-growth, underserved small and medium enterprises (SMEs) in Nigeria and Ghana. CardinalStone Capital Advisers is seeking $100 million in total for the CCAGF fund.

The Soros Economic Development Fund is injecting $10 million in the Cepheus

Capital Growth Fund, focused on supporting business development in Ethiopia. It will join several leading regional and national development funds as limited partners in the $100 million investment fund launched

by Cepheus Growth Capital Partners.

The European Bank for Reconstruction and Development (EBRD) has revealed it is considering an equity investment of up to $50 million in Lorax Capital Partners Fund II. The fund, which has a target size of $250 million, will seek to achieve long-term capital growth by making equity and quasi-equity investments primarily in Egyptian small and medium-sized enterprises (SMEs) and midcap companies.

Exits Helios Towers last month started trading on the London Stock Exchange after the company raised 288 million pounds ($364 million) in an initial public offering (IPO).

The IPO gave Helios Towers a market capitalisation of 1.15 billion pounds ($1.45 billion). The company’s pre-IPO backers included

private equity firm Helios Investment Partners, Albright Capital Management LLC, RIT Capital Partners plc, Quantum Strategic Partners, the International Finance Corporation, Millicom and Bharti Airtel.

Verod Capital Management Limited, via its sophomore fund, Verod Capital Growth Fund II LP, has completed an agreement and received regulatory approvals to fully exit its ownership of UTL Trust Management Services Limited, a Nigerian trust company based in Lagos. UTL is registered with the Securities and Exchange Commission as trustee and fund/portfolio manager, providing trusteeship, estate administration, fund and portfolio management services to sub-sovereign, corporate and individual clients from a wide range of sectors across Nigeria.

Venture capital firm Newtown Partners has exited its stake in South Africa’s SweepSouth, an online platform providing on-demand and regular home cleaning services. Newtown achieved a more than 10x return on its original investment.

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

Wednesday 13 November 2019

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Wednesday 13 November 2019

BUSINESS DAY

POLITICS & POLICY Lagos PDP crisis: Bode George remains our leader - Party leaders ...Court stops faction’s congress Iniobong Iwok

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hieftains of Lagos State chapter of the People’s Democratic Party (PDP), including a member, party’s Board of Trustees (BoT), Akinremi Akitoye, former deputy governor of Lagos State, Kofo BuknorAkerele, Adegbola Dominic, among others on Tuesday affirmed Olabode George as the leader of the party in the state, just as they dismissed existence of any faction in the fold.

The leaders made the declaration at an emergency meeting of party stakeholders which took place at Ikoyi office of George, against the background of planned congress by some party members in alleged connivance with some politicians within the party headquarters to remove George as the leader of the party in the state and elect new officers.

They also disclosed that

a court injunction had since been obtained stopping the planned congress of the chapter Wednesday with some PDP leaders such as Ben Obi, Biodun Olujimi, Jariga Agoro Jarigbe, Danladi Baidu Tuo and the Independent National Electoral Commission (INEC) named as defendants.

Justice T. A. O. OyekanAbdullahi of the Lagos High Court gave the order.

Addressing newsmen, Dominic, who is chairman of the party, dismissed any plan to remove Bode George as the leader of the party in the state.

According to him, “Today, we got the report that some people have been gathering to get Olabode George out of the way.

“These people are saying they are going to have election and this our leader, Olabode George, is not aware of it”.

Diminic, who acknowledged the leadership qualities in George to include his straight-forwardness, intelligence, openness, among

Bode George

others, said it was unfortunate that some members were trying to betray him, in spite of having benefitted from his large-heartedness.

The party chairman contended that the party had its

rules and regulations and does not believe in groups and factions, stressing that it was based on this that aggrieved members had to go to court to stop those planning to organise the said election.

You are a purveyor of fake news - BMO tells Falana Iniobong Iwok

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he Buhari Media Organisation (BMO) has upbraided Femi Falana (SAN) for his false claim that President Muhammadu Buhari and the All Progressives Congress (APC) were planning a third term in office.

BMO said in a statement signed by its Chairman, Niyi Akinsiju and Secretary, Cassidy Madueke, that “after a careful evaluation of Falana’s address at an event in Lagos recently, we have come to the conclusion that Falana has become a purveyor of fake news in Nigeria, and a very recent example will suffice. He was on record

to have alleged at a public function that the former presidential candidate of the Young Progressives Party (YPP), Professor Kingsley Muoghalu had decamped to the APC. “This fake news elicited many negative reactions from Nigerians against Mr. Falana and he had to apologise for not doing due diligence before making the pronouncement.

“We, therefore, note with sadness that Mr. Falana is once again toeing the same line by alleging that President Muhammadu Buhari has plans for a third term. This unfounded claim is not only malicious and an outright falsehood, but it is also a calculated attempt to drag

Ortom presents N189.4bn as 2020 budget proposal to Benue Assembly BENJAMIN AGESAN, Makurdi

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he Governor of Benue State, Samuel Ortom, on Tuesday in Makurdi presented the 2020 Appropriation Bill of N189.4 billion to the state House of Assembly for passage into law.

The bill was tagged, ‘Budget of Advancement, Growth and Development.’

The governor explained that N48.4 billion would be expended on overhead cost while development funds would gulp N38.1 billion.

He appreciated performance of the 2019 budget,

which he said was made possible by the “steady inflow of federal allocation and the performance of the internally generation revenue firm.”

He, therefore, urged the state assembly to expeditiously pass the appropriation bill in the interest of the Benue people.

Receiving the bill, the speaker, Titus Uba, promised that the bill would receive expeditious consideration and passage.

Uba, however, urged all agencies of government to be prepared for the defence of their sector allocations in the bill to enable its early passage. www.businessday.ng

the name of the President in the mud.”

The group further said: “For the avoidance of doubt, we need to remind Falana that President Buhari remains a man of integrity who will never toe the inglorious path of former President Olusegun Obasanjo who sought a third term or former President Goodluck Jonathan who also wanted an elongation in a six-year single tenure for presidents.

“Buhari is conscious of the trust and mandate Nigerians gave him, and under no circumstances will he renege on the people’s confidence.”

BMO reminded Falana that President Buhari and his team

are focused on changing the lives of Nigerians for the better, and rebuilding the country’s infrastructure and institutions to serve Nigerians.

“He is not in the mould of power-hungry politicians whose only stock-in-trade is to line their pockets with public funds, rather, his foray into politics is altruistic, and he will not deviate from this set goal.”

The group enjoined Nigerians to “totally disregard the falsehood being peddled by Mr. Femi Falana as they are mere conjectures and figment of his own imagination. We can vouch that there is no substance in the claim, rather it is meant to deceive Nigerians into believing fairy tales.

“We don’t believe in groups and factions. We have rules and regulations that must be followed. Some members have to go to court to stop the election and the court has granted our prayers, an injunction that the status quo must remain, and I remain the chairman of the party in the state,” Dominic added.

Speaking further, Dominic contended that leaders emerged naturally and only chairmen and others of party were chosen by elections, declaring that there was no way a party could exist without a leader.

“There is no way we would have a party without having a leader to lead the party. You can elect chairman and others but not leader.

“I don’t know which party would make success without a leader. I want to inform you that there is no problem in the party. We have no group, no faction,” he reiterated.

Also speaking, Akitoye decried the plan to hold congress

by few members of the party, declared that the status quo remained not only at the state level but also at the local and ward levels in the state.

Former deputy governor in the state, Buknor-Akerele, also maintained that the party remained united under the leadership of George, saying that they were determined that the party remains vigorous in the state to enable it present a very strong opposition.

Former Minister of Transportation, Ebenezer Babatope, said sadly that the same plot to change party leadership in Lagos State was being attempted in Osun State to remove the party chairman, Soji Adagunodo.

Babatope said some ambitious party leaders at the PDP headquarters in Abuja are behind the plot, disclosing that they had even scheduled a meeting for Osogbo, the Osun State capital, where they wanted to pick who would come to officiate the aborted election in Lagos.

Appeal Court affirms Nasarawa governor’s election BENJAMIN AGESAN, Makurdi

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he Court of Appeal, Makurdi Judicial Division, has upheld the decision of the Governorship Election Petition Tribunal Lafia, upholding election of Abdullahi Sule as the Nasarawa State governor.

The appeal was filed by David Ombugadu of the People’s Democratic Party (PDP), against the decision of the tribunal.

Attorney-General and Commissioner for Justice Nasarawa State, Abdulkarim Kana, described the ruling

Abdullahi Sule

as an affirmation of the people’s mandate, adding that the legal tussle was “merely fulfilling all righteousness.”

Ayiwulu Baba Ayiwulu, counsel to Ombugadu told reporters that he will consult his client before deciding on the next line of action.

Ajeromi Reps: Lagos tribunal upholds Kolawole Taiwo’s election Iniobong Iwok

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amidu Kunasa, the chairman of the Tribunal of the House of Representatives Election Petition Tribunal, sitting at the Ikeja High Court annex office on the petition challenging the Ajeromi Federal Constituency election cancellation by the Independent National Electoral Commission (INEC), has upheld the election and rerun election that brought in Kolawole Taiwo as the member of the House of Representatives representing Ajeromi.

Kunasa said that the basis by which the Petitioner, Rita Orji premised her petition

are largely not valid, citing the fact that INEC acted within the confines of constitutional frameworks in both the election of 23rd February 2019 and the consequent supplementary election held on April 27th 2019.

He also faulted the petitioner praying a court in Kubwa Abuja on a post election matter which is really a preserve of the tribunal.

The tribunal also discountenanced the petitioner’s call for being declared winner of the said election as the grounds of argument are of no value, the first respondent (INEC) was also absolved of any involvement in corrupt practices in the conduct of the elections.

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According to Justice Kunasa, the Petitioner failed to prove any of the three counts, so this tribunal upheld INEC’s decision of Kolawole Taiwo as the validly elected Honourable member at the Federal House of Representatives for Ajeromi Ifelodun Federal constituency.

Speaking after the judgment has been served, the INEC’s Counsel, Tijani Ishola expressed confidence in the decision of the tribunal.

“The laws are very clear with regards to election petitions and it is the duty of any party who alleges to prove his case and when you listen to the judgment from the beginning to the end.

“The tribunal has done justice by resolving all is@Businessdayng

sues raised by the petitioner and the respondents and the beauty of election petitioner in this case is that they look at the facts on ground and facts adduced by the party, so that at the end of the day, every party involved will believe strongly that justice has been done.

“In these our case, although it has taken us a long while but we are happy today that we are having the day and regardless of where the pendulum is swinging, judgment has been done.”

The winner, Kolawole, expressed joy that the case was laid to rest, as better part of his time can now be devoted to thorough representation at the green chamber.

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Bayelsa/Kogi guber watch Court disqualifies Bayelsa APC deputy governorship candidacy Felix Omohomhion, Abuja

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Federal High Court, Abuja, on Tuesday disqualified the Bayelsa State deputy governorship candidate of the All Progressives Congress (APC), Senator Biobarakuma DegiEremienyo, from contesting the November 16 governorship election over false information in his CF0001 form submitted to the Independent National Electoral Commissioner (INEC) to contest the election.

Justice Inyang Ekwo, in a judgment, said that there were discrepancies in the certificates submitted to secure clearance for participation in the November 16 election.

He held that all his documents bore different names.

He therefore, disqualified him on the ground that he provided false information to the electoral umpire to stand for the election.

The People’s Democratic Party (PDP) had sued the Bayelsa APC governorship candidate, David Lyon, DegiEremienyo and INEC, seeking the disqualification of DegiEremienyo.

Justice Ekwo held that the name on his school leaving certificate obtained in 1978

was different from his WAEC/ GCE he obtained in 1984 as well as first degree and Master’s certificates.

“I further hold that the information given by the 3rd defendant on Form CF.001 that the documents thereto attached have not by any iota of credible evidence been so established.

“The information is false in all material particular as none of the said documents have any nexus with the name of the 3rd defendant on the said Form CF001. It is common knowledge that CF001 is validated by oath before it can be acceptable by INEC. “The consequence of lying on oath is grave,” the court held.

Justice Ekwo stated further “that where a candidate is found to have lied on oath, a court must issue an order disqualifying such a candidate from contesting the election.”

Justice Ekwo held that “A declaration is hereby made that the information which the 3rd defendant submitted to the 2nd defendant in his INEC Form CF001, that, affidavit in support of personal particulars of person seeking election to the office of the Deputy Governor of Bayelsa State is false contrary to section 31(5) of the 2010 Electoral Act (as amended).

Biobarakuma Degi-Eremienyo

“A declaration is hereby made that by virtue of the mandatory constitutional and statutory provisions of sections 6(6) and 187(1) and (2) of the 1999 Constitution (as amended), the 3rd defendant, who swore on oath vide his 2019 INEC Form CF001 - affidavit in support of Personal Particulars of persons seeking election to the Office of the Deputy Governor that he obtained his First School Leaving Certificate

in 1976 and presented to the 2nd defendant a First Leaving School Certificate of one Degi Biobaragha other than the one bearing his name Biobaragha Degi-Eremieoyo as shown in his INEC Form CF001, has presented false information to the 2nd defendant contrary to the provisions of section 31(5) and (6) of the 2010, Electoral Act (as amended).”

He also said: “A declaration is hereby made that the

3rd defendant cannot present his names, official documents and, or educational certificates to the 1st and 2d defendants in the following variations as: (a.) Biobarakum Degi-Eremienyo (b) Degi Biobaragha, Degi Biobarakuma, Adegi Biobakunmo, DegiEremienyo Wangagha all variously contained in different certificates or personal documents being paraded by the 3rd defendant and presented documents bearing all the said names to the 1st and 2nd defendants without any valid change of name.

“A declaration is hereby made that by virtue of the mandatory constitutional and statutory provisions of sections 6(6) and 187(1) and (2) of the 1999 Constitution (as amended), and section 31(5) and (6) f the 2010 Electoral Act (as amended), the 3rd defendant, who swore on oath vide his 2019 INEC Form CF001 - affidavit in support of Personal Particulars of persons seeking election to the Office of the Deputy Governor that he obtained his West African Examinations Council General Certificate of Education in 1984 and presented to the 2nd defendant a GCE certificate of Adegi Bibakuo other than the one in his name Biobarakuma Degi-Eremieoyo as shown in his INEC Form CF001, has

presented false information in support of his nomination to the 2nd defendant contrary to section 31(5) and (6) f the 2010 Electoral Act (as amended).

“A declaration is hereby made that by virtue of the mandatory constitutional and statutory provisions of sections 6(6), 186 and 187(1) and (2) of the 1999 Constitution (as amended), the 3rd defendant stands disqualified from contesting the forthcoming Bayelsa State Governorship election as Deputy Governor, slated for November 16, 2019 or any other state thereabout on the platform of the 1st defendant or any other political party by reason of the fact that the 3rd defendant has presented false information as to his educational qualifications or name in INEC Form CF001 in support of his nomination contrary to section 31(5) and (6) of the 2010 Electoral Act (as amended).

“An order is hereby made disqualifying the 3rd defendant as the Deputy Governorship candidate in the November 16, 2019 Bayelsa State governorship election by reason of the 3rd defendant presenting false information to the 2nd defendant (INEC) in support of his nomination contrary to section 31(5) and (6) of the 2010 Electoral Act (as amended).”

authority.

“In 2015 only few women contested for gubernatorial election. Unfortunately, the situation has not improved as only six women have been shortlisted as contestants during the November governorship election.

“Since the creation of the state in 1991, no woman has been able to emerge as senator from the state, same thing with the House of Representatives and even the state House of Assembly. Within the three arms of government and tiers of government, Kogi women have been abysmally represented.”

“Despite the consistent rise in registered female voters in Kogi, the women have not been rewarded. They disregard the security treats, vote and have not been rewarded for their royalty”.

“Women are keeping watch on the process of recruitment of party agents and other stakeholders during election. Women have vowed to hold political parties accountable for any breach of peace during the election”.

“We are calling on political parties to support women’s participation in the state politics. There is need for protection against all forms of violence during and after the election. We are soliciting for peaceful conduct during the November off-cycle gubernatorial election

Kogi women decry militarised electoral process …Seek adequate protection, consideration in November 16 polls VICTORIA NNAKAIKE, Lokoja

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matter of days to the November 16 gubernatorial election in Kogi State, women from the state have decried the militarised electoral processes in Nigeria and called for a conducive environment for women and other marginalised groups to vote in dignity and peace.

The call was made at a one-day consultative meeting on ‘Election Coverage from Gender Perspective’ held in Lokoja, Kogi State capital, organised by Search for Common Ground (SCG) in collaboration with Challenged Parenthood Initiative (CPI) and the Nigeria Association of Women Journalists (NAWOJ) Kogi State chapter, supported by EECSP, National Democratic Institute, YIGAA and CDD The women pointed out that in the election planning, an inter-agency consultative committee on election security should ensure that women are sufficiently involved in order to give confidence and dignity to women to vote in peace.

They urged enforcement agencies to be more womenfriendly, saying this effort will encourage the women folk to come out en masse during elections.

Kogi women equally emphasise that it is the duty of security agencies to make commitment to women that election will be conducive for women to exercise their franchise, adding that security agencies should treat women responsibly and fairly within polling units.

Media The forum stated that generally, the media has a constitutional mandate of holding all the stakeholders accountable to women.

They revealed their observations that the media has not been able to effectively discharge this mandate, saying women need to express confidence that the media is their greatest ally in their bid to ensuring increased women participation in politics.

They also examined the media’s constitutional obligations as regards the forthcoming gubernatorial elecwww.businessday.ng

tion in the state. “According to the code of ethics for Nigerian journalists, the media is expected to have editorial independence, accuracy, fairness, privacy, decency, press freedom and responsibility, among others.

INEC The forum equally reminded the Independent National Electoral Commission (INEC) of its gender policy, saying it has become necessary to address the continuous low representative of women in the political space, especially in Kogi State.

The challenge of INEC in implementing its own policy is responsible for low representation of women at the state level.

They called on INEC to protect women polling officials from all forms of electoral violence before, during and after elections, adding that women look forward to gender disaggregated election data.

They also emphasised on the need to give women the opportunity to assume position of REC, Administrative

Secretaries and other key positions for a better Nigeria, The forum also lamented the unavailability of information for women candidate as they urged the commission to ensure women have access to documents, processes and also be mindful of instances of fraud that aims to deny women candidate their votes and take remedial actions.

However, the forum advised INEC to support the professional development of women through mentoring and training (work exchange programmes and network).

Politicians The forum expressed its disappointment over the sustained low representation and participation of women in Kogi State. This observation is coming as a result of the number of women running for the 20th gubernatorial election in the state.

“Even Natasha Akpoti that came out has been suppressed from all angles.

Political parties have been called upon to ensure absolute inclusion of women into various positions of

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@Businessdayng

Foreign and domestic observers The women called on wouldbe domestic and foreign observers in the forthcoming election in Kogi and Bayelsa States to ensure that women are given adequate consideration in all spheres to enable them participate fully in the exercise. They also noted with dismay the habit of electoral umpire intimidating women at polling units forcing them back home and preventing them from exercising their voting rights.

They reminded the observers of the need to give special consideration to pregnant women, nursing mothers, the aged and people with disabilities during the exercise.

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news

DataPro rates SFS Fixed Income Fund AA REMI FEYISIPO, Ibadan

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igeria’s foremost investment fund, SFS Fixed Income Fund, has been rated AA by DataPro, a Lagosbased rating agency.

DataPro in a recent rating report highlights good credit quality, good liquidity and experienced fund managers as key strengths of the N2.2 billion-worth Fund, which has grown from a base point of N960 million in 2015.

SFS Fixed Income Fund, an open-ended collective investment scheme launched in May 2014 and registered by the Securities and Exchanges Commission (SEC), is managed by SFS Capital Nigeria Limited. It is targeted at investors with low risks investment appetite who require liquidity and optimal benefits for their investments.

The long-term rating of

AA indicates lower risk and is assigned to Funds deemed to have very good financial strength, operating performance and profile.

In arriving at the score, DataPro took cognisance of relevant qualitative and quantitative factors to arrive at the assigned risk factor, with risk factors assessed by considering the credit risks, interest rate risk, liquidity risk, regulatory framework, and the operating performance of the manager.

“This Fund, in our opinion, has strong ability to meet its ongoing obligations,” Oladele Adeoye, chief rating officer, DataPro, said.

Aside the fund managers, other parties to the fund are: United Securities Limited (Registrar); Stanbic IBTC Bank plc (Custodian), STL Trustees Limited, and Sterling Partners & Co (Auditors).

Importers of frozen food divert contraband consignment to Lagos airport … as NCS records N47.7bn revenues in 10 months IFEOMA OKEKE

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mporters of frozen foods have devised another means of carrying out their illegal activities by diverting their consignments to the nation’s international airports, especially the Murtala Muhammed Airport (MMA), Lagos.

This is according to the Nigeria Customs Service (NCS), MMIA Command, who also said it had earned at least N47.7 billion in revenues between January and October 2019, surpassing the 2019 target set for it with 110 percent.

In the past two days the MMIA Command had intercepted two consignments of frozen foods with one of them disguised as vegetables with total duty paid value at N68,850,000.

The other consignment was abandoned at the Gate 13 of the airport by the importer or

its agents, probably because of the close monitoring on their activities by the officials of the command.

Wale Adeniyi, Customs area comptroller, told journalists in a joint press briefing at the Federal Operating Unit (FOU) of NCS in Lagos that the first consignment containing meat, chicken, turkey and other frozen foods was discovered on South African Airways on November 10, 2019.

According to Adeniyi, the command’s tarmac operatives intercepted, which was indicated as perishables, and therefore qualified for pre-release at the cargo wing of the airport.

He explained that its officers at the command insisted on inspecting the items before transferring them, stressing that in the cause of inspection, it was discovered that the items included 40 cartons of beef, pork and fish fillets.

Border closure: House urges Nigerian Customs to review ban of petroleum supply James Kwen, Abuja

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ouse of Representatives has urged the Nigerian Customs Service to review its ban on the supply of petroleum products to border communities as it contravened the provisions of the Customs and Excise Act as amended.

The House also mandated its Committees on Interior, Customs abs Excise and Petroleum Resources (Downstream to engage the Minister of Interior, the Minister of State for Petroleum, the Comptroller General of the Nigerian Customs and the Group Managing Director of National Petroleum Corporation (NNPC) with a view to reviewing the situation and ameliorating the suffering of Nigerians living in the border towns and report back within two weeks

for further legislative action.

These resolutions were reached Tuesday at plenary sequel to a motion of urgent public importance on the review of the directives of Comptroller General of the Nigerian Customs Service on the suspension of Petroleum Products supply to Filling Stations within 20 Kilometers to the Nation’s Borders, moved by Sada Soli (APC, Katsina).

Soli in a lead debate stated that the inhabitants of these border towns are already feeling the brunt of the border closure and to now deny them petroleum products which would adversely affect hospitals, businesses and the supplementing of the source of epileptic power without due consultation and enlightenment, was most insensitive to the plight of these Nigerians. www.businessday.ng

L-R: Abimbola Ogunbanjo, chairman, Nigerian Stock Exchange; Danladi Verheijen, co-founder/CEO, Verod Capital; Celestina Eke, head, technical, department of public building and housing (DPBH) Federal Ministry Works and Housing; Uju Ifejika, chairman/CEO, Brittania-U Nigeria Limited, and Asue Ighodalo, founding partner, Banwo & Ighodalo, at a plenary session at the 2019 edition of Wimbiz annual conference.

TEF trains over 7,500 entrepreneurs in 5yrs as commitment to Nigeria remains strong BUNMI BAILEY

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ony Elumelu Foundation (TEF) Entrepreneurship Forum, as part of its investment commitment to the Nigerianeconomythroughentrepreneurship, has achieved more than three-quarter of its decade long plan within five years.

The Foundation has trained more than 7,500 entrepreneurs withinthespaceoffiveyears,making a larger chunk of its original plan to train 10,000 entrepreneurs in ten years.

“We said in 10years, we are targeting 10,000 entrepreneurs and in five years, we have already done more than 7,500 and that excludesthe2,000and3,000mentionedandthe100,000UnitedNations Development Programme (UNDP) partnership,” Tony Elu-

melu, founder, TEF said.

He also acknowledged the partnerships that have grown the programme from accepting 1,000 entrepreneurs to accepting 3,000 such as the UNDP, the African, Caribbean and Pacific Group of States and African Development Bank (AfDB).

The forum in its fifth edition started on July 26, 2019 in Abuja at the Congress Hall of the Transcorp Hilton Hotel in Abuja, Nigeria. The forum was a two-day event which was themed ‘Empowering African Entrepreneurs,’ hosted the largest gathering of entrepreneurs, policymakers, and business leaders.

Some of the speakers at the forum were Yemi Osinbajo, Nigeria’s Vice President, Aisha Buhari, Nigeria’s First Lady, Elumelu, Tedros Ghebreyesus,

Director-General, World Health Organisation and Akinwunmi Adesina, president, AfDB. The forum features a masterclass, a dynamic pitching competition, panel debates, and a presidential debate. It engaged an audience of 5,000, comprising of start-up entrepreneurs, development institutions, and policymakers.

In a CNN documentary that aired over the weekend Elumelu is seen boarding his private jet from Lagos to Abuja to the forum, while his excitement starts to build. “I am very happy today because I will be seeing successes,” he said.

While at the event,heengages and takes pictures with participants. And during the mainstay of the event, he is very busy as he has to play host to many very important guests whether is dinner with

Uganda president, Yoweri Kaguta Museveni , guiding a tour for the presidentof DemocraticRepublic of the Congo, Félix Tshisekedi , getting on stage with Nigerian music star, Wizkid, and sitting for interview questions with CNN. Despite all the entertainment and activities happening at the forum, one of the main events is when Elumelu himself get to address the main aspiring entrepreneurs in attendance.

“To me I believe the best legacy is the lives that we touch. As I would often say the success of Nigeria is fairly and indeed in your hands. So you can imagine what is about to happen in Africa,” he expressed.

The questions and answers session is what the participants from all over the world look forwardtooasitgivethemtheopportunitytopitchtheirbusinessideas.

Kyari tasks NNPC Retail’s board on Minister charges power infrastructure companies to produce transformers locally unadulterated products Olusola Bello

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etermined to sanitise its downstream o p e ra t i o n s, Me l e Kyari, group managing director, Nigerian National Pe t ro l e u m C o r p o ra t i o n (NNPC), has challenged the Board of Directors and management of the NNPC Retail Limited to sustain the company’s culture of delivering unadulterated petroleum products to Nigerians in its filling stations nationwide.

He gave the charge in Abuja during the inauguration of a new Board of directors for the company, according to a release signed

by Samson Makoji, the corporation’s acting group general manager, Group Public Affairs Division.

The NNPC boss said the confidence of Nigerians in the company’s commitment to delivering highquality products and the right quantity at the right

prices was a great asset that the new management could leverage on to achieve the target of growing market share to 30 percent.

“We have to maintain our viable operational strategies to advance our cause.

N N P C R e t a i l L i m i t e d ’s management must focus to ensure that products are not adulterated and metres for both our own and our affiliate stations are not tampered with so that those who buy our products can derive maximum value for their money,” Kyari stated.

He said NNP C Retail Limited occupied a strategic position in the energy matrix of the country, adding that as a first-line company with strong brand in petroleum products supply and distribution across the country, there was need to expand its scope and capture at least 30 percent market share within the shortest time possible for the benefit of Nigerians.

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ISAAC ANYAOGU

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inister of power, Sale Maman, has charged power equipment companies to begin producing transformers locally in order to create jobs and enable skill transfer in the sector.

Ma m m a n m a d e t h i s known while commissioning office facility of Skipper Seil Electricals, an Indian integrated electricity firm into engineering and manufacturing of distribution and transmission assets in Lagos on Tuesday. He pledged government’s support for companies who go into local production.

“We encourage you to continue with your investments in Nigeria as no economy can progress without power,” the Minister said.

Skipper Seil group, which has its global footprints through its subsidiaries in India, Nigeria, Ghana and the Middle East, says it has already begun producing these transformers locally. The company @Businessdayng

said it had produced at least 750 transformers in its factory at Ikorodu and employed over 1,000 Nigerians.

Skipper’s growth strategy for Nigeria involves partnering with public and private stakeholders to develop the end-toend value chain of power from generation to transmission to distribution and value-added services, the company said.

Mamman commended the company and urged them to do more. “It is also important that you maintain standards and use Nigerian cable in your operation and I assure you that you will get government support,” he told the company.

The company representatives while conducting the minster round their facility spoke of the deleterious effect the influx of inferior brands was having on their plans to expand production in the country. They called for the government’s support to make the environment competitive for investments.

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@Businessdayng

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news Alaghodaro 2019: Reforms, people-oriented ...

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with the forthcoming elections, I want to assure you, our partners and other would-be investors, that because of the foundational and fundamental reforms, which we have undertaken that are very popular with our people, the chances of continuity of these policies and programmes are very high. We therefore encourage you to continue with your various investment programs.”

The governor continued, “In the last three years, we have been guided and governed by certain key values and tenets such as accountability, transparency, and probity in the conduct of state matters. This may not have gone well with few actors in our society. Today we can boldly tell you that when we came to office, the total revenues by all local governments in the state was N31 million monthly, but as at October 2019, we stood at a monthly revenue of N205 million. We are not there yet because there is still room for improvements.

We will continue to grow.

“After three years in office, we have established credibility, not only with our civil servants, retirees, and contractors, but we have continued to promote reliability in the flow of services and commercial transactions. This is the basic minimum expectation that we have set for ourselves so that we can build on the fundamental reforms, which we embarked upon to transform Edo into a predominantly private sector driven economy, capable of creating jobs, improving the quality of lives and reducing insecurity.”

Chairman, Alaghodaro: Edo Summit, Asue Ighodalo, said that the event was organised for communicating and reviewing the progress recorded by the Governor Obaseki-led administration in Edo State.

Noting that the government has recorded impressive achievements to place the state on the path of growth, he said, “We have done a lot in

the education sector, so much so that people from different parts of the world are coming to learn from us in Edo State.

The achievements are visible in basic education, health and industrial sectors.”

This comes as the All Progressives Congress (APC) in Edo State suspended the National Chairman of the party, Comrade Adams Oshiomhole, over his role in the crisis rocking the state chapter of the party.

The decision followed the vote of no confidence passed on Comrade Oshiomhole by the Chairmen of the APC in the 18 Local Government Areas (LGAs) of Edo State.

According to a statement signed by Edo APC Chairman, Anselm Ojezua and Assistant State Secretary, Ikuenobe Anthony, “Consequent on the development, the State Executive Committee has adopted the vote of no confidence passed on him and the subsisting suspension order from the organs of the party in the state.”

They said the decision was necessary to prevent a repeat of what happened in Zamfara State, where the party was unable to field any candidate in elections. “Comrade Adams Oshiomhole is the one behind the crisis in Edo APC. We have passed a vote of no confidence on him and he stands suspended from the party.We don’t want what happened in Zamfara State or other parts of the country to happen in Edo State.”

Meanwhile the Group Executive Director, Dangote Industries Limited, Halima Aliko-Dangote, has said that the Aliko Dangote Foundation will provide 18,000 women across the 18 local government areas of Edo State with microgrants to improve their livelihood.

Dangote, who is also an Executive Director of the Aliko Dangote Foundation, said this during a plenary session on ‘Enhancing Social Welfare in Edo State,’ at the Alaghodaro 2019 Summit, held in Benin City, to mark Governor Godwin Obaseki-led administration’s third year anniversary.

Senate may approve death penalty for ‘Hate...

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employment opportunities and reduce some of the social vices we have in the country today,” he stated.

Senator Kabir added that if the textile industries are resuscitated, it will boost the nation’s economy and raise the revenue bar.

Concurring on the motion, Senate Deputy Leader, Senator Ajayi Borofice opined that the “if the country’s borders remain closed, it will encourage local textile production.”

However, Senate Minority leader, Enyinnaya Abaribe argued that the closure of textile

industries in Nigeria has nothing to do with closure of borders. He argued that the main challenge that brought textile decline was lack of adequate power supply which he said happened since 1982.

“I support the motion but I stand to disagree that border closure can encourage textile production, it is not border closure but the issue of power.

Around 1982, textiles industries collapsed because there was lack of power supply to run production of textile industries.

•Continues online at www.businessday.ng www.businessday.ng

R–L: Ajoritsedere Awosika, non-executive director, Access Bank plc; Roosevelt Ogbonna, group deputy managing director, Access Bank; Bolulope Adebiyi, founder, Cotton Loops/winner of the 2019 Womenpreneur Pitch-A-Ton; Seyi Kumapayi, chief financial officer, Access Bank, and Vivian Awiti Owuor, head, SME banking specialist, International Finance Corporation (IFC), at the presentation of the grand prize of the 2019 W Initiative Womenpreneur Pitch-A-Ton at Access Bank’s office in Lagos, yesterday.

Aramco IPO prospectus says oil demand to peak...

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bia last week officially launched the IPO for its state-owned oil company Saudi Aramco, announcing that a domestic listing will happen in early December.

The document revealed Aramco used a forecast from industry consultant IHS Markit Ltd which forecasts oil demand to peak around 2035 before levelling off, but that the inflection point could occur by the late 2020s.

The timing of peak demand has big repercussions for the planet and the strategy and future of oil producers most especially countries like Nigeria which currently utilizes proceeds from the sale of the commodity to fund up to 60 percent of it national budget and 90 percent of the budget for a majority of the 36 States in the country.

The 658 page prospectus seen by BusinessDay makes the case that the world’s biggest oil producer Saudi Arabia is very nicely positioned to increase market share in a world where the global thirst for oil is flat or declining.

For many industr y watchers, Aramco’s prospectus and the flop of Brazil’s big offshore auct i o n lat e la st w e e k a re signs and expectations on the part of many investors that oil has entered its twilight years.

Roughly 3,000 new offshore projects sanctioned between 2010 and 2014 have either barely generated any value for oil companies or are expected to generate none at all, according to a recent study published by Rystad Energy, a Norway based consultancy firm said.

Apart from Saudi Arabia, another oil-producing nation, Norway has a firm petrol car ban deadline of 2030. China, the world’s largest car market plans to ban the production and sale of vehicles powered only by fossil fuels. So are India, France and Britain.

Also, Oil majors such a s E x xo n Mo b i l a n d BP e n g i n e e r s a re w o rk i n g on advanced batteries while Royal Dutch Shell scientists are working on hydrogen fuel cells.

How e v e r i n a s i t u a tion where other bigger oil-producing countries are reducing their economic risk to crude oil or a scenario where the state-ow ned behemoth Nigeria National Petroleum Corporation (NNPC) keep making losses, stakeholders have questioned why the government keeps spending money it doesn’t have on new exploration of oil rather than creating a favourable investment climate to attract investors.

After about 40 years, NNPC returned the search for oil in the North in February 2019, a decision which generated debate concerning the investment decision and viability of the search, primarily championed by President Muhammadu Buhari.

Buhari had insisted that the need to explore oil in the frontier inland basins remained a national priority that must be sustained for the country’s economic benefits, adding that oil and gas were critical to Nigeria’s economy of today and the future.

Ademola Henry, Team leader at the Facility for Oil Sector Transformation (FOSTER) said other stateowned oil companies like Saudi Aramco and Norway’s Equinor are looking

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at life beyond So what’s NNPC understanding on the future of oil?

“Other Oil corporations are investing in renewable energy, what is Nigeria doing?” Henry asked.

Another worrisome fact is the fact that India, the largest consumer of Nigerian oil plans to ban petroleum-powered cars in 2030. Early this year, the Indian government approved the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles scheme, offering subsidies based on the battery capacity for automobiles, a scenario that means Nigeria might struggle to find buyers for crude oil in the near future.

Currently, data from Debt Management Office (DMO) revealed the country has a total debt of N25.7 trillion, most of which has largely been spent on recurrent expenditure, and not on critical infrastructure needed to diversify its economy and attract investments to grow its non-oil sector. The countr y’s refineries are in a shambles, necessitating imports of the products and subsidy, which deprived the economy of N10 trillion between 2006 and 2018, according to civil organization BudgIT. The developments have already pushed the number of poor Nigerians to 91 million, while unemployment figure settles at 20.9 million.

“Nigeria needs to ensure sustainable fiscal management that is resilient to global oil price c ycles.

Improving tax collection and administration have be come imperative for achieving national growth objectives,” PricewaterCorporation (PwC) said in its publication Nigeria: Looking Beyond Oil. @Businessdayng

Interswitch, Visa in strategic partnership ...

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billion) through direct, indirect and Paypoint channels).

Interswitch’s unique market capabilities and strong consumer proposition have enabled it to deliver consecutive years of sustainable profitable growth.

The partnership will create an instant acceptance network across Africa to benefit consumers and merchants and facilitate greater connectivity for communities.

Both parties will also retain their respective independent solutions, and Interswitch will retain its scheme neutral strategy.

“Sub-Saharan Africa is the fastest growing payments market in the world, with growth driven by a young and dynamic population, rapidly evolving consumer behaviour, and an increasing desire for payment solutions that can be accepted across the continent and abroad,” Mitchell Elegbe, founder and chief executive of Interswitch, said. “I am delighted that Interswitch has formed a partnership with Visa, with whom we plan to drive the next phase of transformation in the African payments landscape.”

Andrew Torre, regional president CEMEA, Visa, said: “Africa is a priority region for us, and we continually seek strategic partnerships with local players to further strengthen our leadership position and enhance the payments ecosystem across the continent. This partnership aligns with our global strategy to work with and invest in innovative partners, and we look forward to working with Interswitch to provide new consumer and merchant experiences and support the rapid growth of digital commerce across Africa.”

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news

Veritas Kapital appoints new MD, ED Finance/Investment

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he management board of Veritas Kapital Assurance has appointed Kenneth Edore Egbaran and Wole Onasanya as the managing director (MD) and executive director (ED) Finance and Investment, respectively.

Egbaran is an insurance practitioner with over 30 years’ experience in reinsurance, underwriting and broking. Before his appointment as the MD of Veritas Kapital Assurance plc, he was the managing director of Goldlink Insurance plc.

He started his career as a senior superintendent with Nigeria Reinsurance Company before joining A&G, where he rose to the position of marketing director. He has worked with Afribank Insurance Brokers, Crusader Insurance plc now Custodian Insurance plc, and was the managing director of Mainstream Global Insurance Brokers Limited.

Egbaran has an HND in insurance from Lagos State Polytechnic and an alumnus of the Lagos State University, where he obtained an MBA in 2008. He became an associate of the Chartered Insurance Institute of Nigeria and London in 1986, and Associate of Chartered Insurance Brokers in 2004.

He is bringing his wealth of experiences in the various sec-

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tors of the insurance industry to bear in Veritas Kapital Assurance as the new managing director Wole Onasanya is an insurance strategy and finance executive with over two decades experience acquired in Nigeria and the United States in insurance product development and pricing; corporate transaction execution; insurance strategy development and implementation, and strategic planning.

Onasanya joins Veritas Kapital Assurance as executive director Finance and Investment. He previously worked as a director at the New York office of American International Group (AIG) and as an investment banker with Credit Suisse in New York, where he closed several corporate transactions.

He began his career as an analyst at the Lagos office of Arthur Andersen (now KPMG) before joining Ocean and Oil Holding as an investment associate and worked on corporate development and MBA transactions.

Onasanya has a MBA from Kellogg School of Management and a Bachelor’s degree in Economics with second class upper division from the University of Ibadan. He is a Chartered Accountant with the Institute of Chartered Accountant of Nigeria (ICAN).

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L-R: Shedrach Odoh, group executive director, Morning Side Group; Kai Willems, country representative, Liebherr Nigeria; Andrew Scott, chairman, Panafrica Group; Doris Mbadiwe, trustee, Inter-Bau Foundation; Ann Okechukwu, patron, Inter-Bau Foundation; Mark Okoye, commissioner, economic planning, budget and development, Anambra State; Dele Kelvin Oye, 2nd deputy president, NACCIMA; Olubunmi Adegoke, director-general, Federation of Construction Industry (FOCI), and Kingsley Uwaoma, director, Lagos Migration Resource Centre, at the official launch of INTER-BAU FOUNDATION in commemoration of INTER-BAU CONSTRUCTION GROUP’s 35th year anniversary, in Lagos.

BCE gets N8.14bn Supreme Court order against NNPC 20 years after STEPHEN ONYEKWELU, with agency report

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igeria’s Supreme Court on Tuesday upheld its earlier judgment ordering the Nigerian National Petroleum Corporation (NNPC) to pay $22.6 million (N8.1bn) in damages to BCE Consulting Engineers over a failed consultancy service contract.

The contract was sealed on May 20, 1999, with respect to SNEPCO Bonga Field Development Project in Oil Prospecting License (OPL), 212.

However, the NNPC through its counsel approached the Supreme Court seeking a review of the July 5, 2019, judgment over an alleged error of facts.

Judicial Review is a procedure provided under the Supreme Court Civil Procedure Rules for review of extant judg-

ments.

The counsel argued that the court did not hear their preliminary objection and that their cross-appeal was dismissed with hearing.

However, Justice C. C. Nweze, while delivering the judgment dismissed the appeal, saying, “This apex court cannot be cajoled with this kind of application; it is an abuse of justice.”

Nweze, therefore, awarded costs of N500,000 to be paid personally by counsel to the NNPC. Meanwhile, BCE in its counter-affidavit requested the court to disregard NNPC’s application but urged it to uphold the award of the N8.1 billion judgment sum because NNPC breached an agreement with it.

In July 1999, BCE filed an action at the Federal High Court, Lagos, in Suit No. FHC/L/C/ I316/2000 against NNPC fol-

lowing the Corporation’s termination of the contract at the directive of the Federal Government.

On March 7, 2002, the Court directed NNPC to pay BCE the sum of $22.6 million in damages for the illegal cancellation of the agreement.

The Court of Appeal directed NNPC to deposit the Judgment sum of $22.6 million into court as a condition for the appeal to which NNPC complied.

On June 9, 2011, the Court upheld NNPC’s appeal on grounds that the Federal High Court lacked jurisdiction over disputes arising from simple contracts.

On June 13, 2011, BCE applied to the Supreme Court to set aside the previous judgment in favour of the Corporation.

Upon delivery of the judgment of the Supreme Court

dated July 5, 2019, NNPC alongside its counsel, Babalakin and Co reviewed same and had good reason to believe that substantial miscarriage of justice had been done by the terms of the said judgment.

Accordingly, NNPC (through its counsel) applied for Judicial Review, which is a procedure provided under the Supreme Court Civil Procedure Rules for review of extant judgments.

Also, the Corporation submitted an independent request, addressed to the Chief Justice of the Federation, seeking intervention to facilitate timely action.

“We confirm that sequel to the above application for Judicial Review of the Supreme Court judgment; BCE had filed a counter-affidavit dated October 10, 2019, in which it requested the court to disregard

BPP rates Nigeria high on Public Funds Expenditure SEGUN ADAMS

… seeks continuous training for procurement officers

ureau of Public Procurement (BPP) Tuesday said Nigeria had made tremendous improvement in the expenditure of public funds through Public Procurement.

Director-general of BPP, Mamman Ahmadu, who disclosed this at the opening ceremony of the second edition of the 2019 conversion training programme for Procurement Officers in the Ministries, Departments and Agencies (MDAs), held in Lagos, said the support of the Federal Government to BPP had boosted the success rate of the Procurement Reforms and would continue to promote the implementation of the Public Procurement Act (PPA), 2017.

Ahmadu, who was represented by BPP director, Energy and Infrastructure, Babatunde Kuye, said the training, started by the BPP about nine years ago, was key to the institutionalisation of procurement reform in

the Federal Civil Service.

According to Ahmadu, the training would equip the participants with the right skills to carry out their responsibilities in line with the PPA, 2007 provisions.

He said: “The Civil Service being the heartbeat of any nation’s Public Service Administration is central to the implementation of political and economic plans of Governments such as the present Next Level thrust of President Muhammadu Buhari. It is important we get things right in the allocation or use of resources, hence the BPP is strengthening the Public Procurement Reform through continuous training. This three week conversion and certification course geared towards providing the needed expertise in the implementation of the Procurement Reform is a case in point.”

Explaining how procurement process works, Ahmadu said: “It is good to note that when

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allocations are made in budgets, we do not simply write out letters awarding contracts to contractor A or B based mostly on personal interest as was the case before the reform but based on Due Process of PPA, 2007. It is also noteworthy to mention that the nine essential steps of public procurement start with efficient procurement plan driven by needs assessment.

“Then there has to be adequate appropriation, followed by advertisement, and transparent pre-qualification. Bid submission and bid opening process followed by bid evaluation process have to take place as well. Afterwards we have Tender Board or Federal Executive Council (FEC) Approval, and then contract execution. This is becoming entrenched in the Public Service as good credit for the reform.”

He said henceforth, on certified Procurement Officers would be allowed to be posted @Businessdayng

as Procurement Officers adding that the Head of Procurement Department reports directly to the Accounting Officer of their respective MDAs. Where there are no certified Procurement Officers, the schedule officer in charge will have to take responsibility in the meantime and report to the Accounting Officer as appropriate adding that it will be business as usual.

He said that transparency, competition, quality and the attainment of value-for-money are central to the Procurement Process. “We therefore do not have an alternative route to good Public Procurement practice. It is for this reason that we must continue to harp on its importance and internalize its details in order to effectively implement it. The Public Service is the engine room for change, and it is our collective responsibility to ensure that all sections of the law governing Public Procurement are fully put into practice.”

Wednesday 13 November 2019

BUSINESS DAY

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Minister says reconstruction of Trans Sahara Highways within Nigerian territory 80% ready HARRISON EDEH, Abuja

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orks and housing minister, Babatunde Fashola, says reconstruction of major highways that link Nigeria’s borders with the six member states of the Trans Sahara Road namely: Chad, Niger Republic, Tunisia, Mali and Algeria is 80 percent asphalted.

Fashola made the disclosure at the opening ceremony of the 70th session and meeting of the Trans Sahara Road Liaison Committee (TRLC), Nigeria is hosting in Abuja.

The ministers in charge of roads in the six countries are taking part at the meeting.

The objective of the meeting of the TRLC member countries was to discuss and share knowledge on how to improve African connectivity, integration and trade.

Fashola in a statement on Tuesday noted that the over 9000kms Trans Sahara Road, which serves about 37 regions in Africa and connects about 74 urban cities and 60 million people across six countries if completed would create immense opportunities in agriculture, information technology and the fashion industry, among others, adding that most of the roads that were plied by horses and camels were presently motorable.

According to the minister, “Now if you appreciate that these roads, roads of horses and camels are now

the roads of vehicles and trucks, you can imagine the opportunities that lie ahead as we converge here.”

He further noted that Nigeria was part of the large urban network of opportunity, as the rehabilitation and reconstruction of the Trans Sahara Road would intensify cultural and economic exchange of goods and services across the African region.

The minister also stated that the reconstruction of these major roads were due to their busy nature, adding that heavy duty trucks of about 5000 in number ply these roads on a regular basis.

He listed some roads in the Trans Saharan route as: the Abuja- Kaduna- Kano, Lagos - Ibadan-Ilorin-Jebba, among others, which are at different stages of completion.

In his address, secretary general of the Trans Sahara Road Liaison Committee, Ayadi Mohammed, commended President Muhammadu Buhari, Fashola, the minister of State for Works and Housing, Abubakar Aliyu, and the management and staff of the Federal Ministry of Works and Housing for their hospitality and reception given to the delegates.

He said the member countries of the Trans Sahara and Committee had the task to build excellent relationship that would stimulate trade in the region.

FG starts recovery, reactivation of Afam Power Plant OLUSOLA BELLO

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ederal Ministr y of Power has started the recovery and reactivation of some generation plants at Afam Power stations to restore the plants to full generating capacity.

At the moment, only one of the five plants is working with an output o f o n l y 2 7 0 mw o u t o f Afam installed capacity of about 1000mw of electricity.

During an inspection visit to Afam, the minister of power, Sale Mamman, stated that the power project was still under the privatisation process, the government had approved funds to carry out major repairs on some of the plants.

He disclosed that some of the issues affe cting the project had already been presented to Federal Executive Council for deliberations and approval.

Mamman commended Afam community for loyalty and support while promising that they

would be carried along in the privatisation process of the company, and disclosed that the rehabilitation of the Afam Road had also been taken up with the Federal Government.

W h i l e re c e i v i ng t h e minister, O.N. Obademi, managing director/CEO, said the major problem c o n f ro n t i n g t h e A f a m Power Project was paucity of funds, pointing out that Afam had not received a single budgetary allocation or receipts since 2012.

He revealed that out of the five plants installed at various times in Afam only Afam IV was functional with an output of 110MW, while Afam V, installed in 2012 with capacity to generate 276mw was being overhauled.

Obademi said the company was unable to source funds from the Capital Markets or banks because of its ownership issues.

Transcorp, which is the company’s preferred bidder, was yet to pay and assume ownership of the plant. www.businessday.ng

L-R: Alero Balogun, head, corporate communications, Oando; Akinbambo Ibidapo-Obe, general manager commercial, Oando; Ngozi Okonkwo, chief legal officer, Oando; Olusegun Obasanjo, former president of Nigeria; Ainojie Irune, chief operating officer, and Elizabeth Ofili, corporate communications, Oando, at the recently concluded Africa Oil Week in Cape Town, South Africa.

N40bn abandoned Baro River Port project gets Senate’s investigation Solomon Ayado, Abuja

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he Senate on Tuesday commenced investigation into the abandoned Baro River Port project of the Lower River Niger that was awarded at the cost of N40 billion.

To conduct the probe, the Senate has mandated its committees on Marine Transport; Works, and Public Procurement to investigate the National Inland Waterways Authority (NIWA) to carry out the exercise.

Specifically, Senate wants the Federal Government to provide the needed funds to contractors handling project so as to complete the job.

Also, Senate is disturbed that the Federal Government has not transferred the roads project to Presidential Infrastructure Development Fund (PIDF) for better funding.

To further salvage the situation, the Senate is urg-

ing the Federal Government to rehabilitate the Narrow Gauge Railway in Baro to ensure rapid socio-economic growth of the country. Also, it says the Rivers Niger and Benue should be dredged by NIWA immediately.

The decision of the Senate followed a motion by Muhammad Bima (APC Niger South) and 22 other senators.

The motion is on the “urgent need to complete all the necessary components of Baro River Port project of the Lower River Niger.”

Leading the debate, Bima disclosed that over N40 billion had already been expended on the project even as work on it was yet to be completed.

The lawmaker averred that “contract for the project was awarded by the Federal Government for the dredging of the Lower River Niger, construction of the Baro Port, instal-

Access Bank sponsors 9th edition of Africa International Film Festival

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frica’s largest retail bank, Access Bank plc, has partnered the continent’s most innovative film festival, the Africa International Film Festival (AFRIFF), to sponsor its 9th edition that kicked off on Sunday, November 10, and will run through to November 16, 2019.

The week-long festival celebrates the diversity of African films, including documentaries and short films while connecting various stakeholders within the African film industry through a cinematic experience.

Group managing director, Access Bank, Herbert Wigwe, highlighted the role of the festival in projecting African stories to the world, while acknowledging those who had invested in building a film industry that continued to be celebrated

globally.

“Apart from serving as a platform to share the African culture with the world, the industry has launched a value chain for writers, cinematographers, actors, producers, while also contributing to the economy, creating employment opportunities, and promoting investment,” he said.

According to Wigwe, “Through AFRIFF, Access Bank is proud to support millions of creatives in the industry towards achieving their goals while providing economic benefit to them and many others across the world.”

The bank has consistently supported the AFRIFF, and the partnership is built on its commitment to promoting genuine African stories and also creating a platform for film makers to connect, learn, and showcase their projects.

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lation of cargo handling equipment and connecting access roads to ensure movement of goods and services to the Northern p a r t s o f t h e c o u nt r y i n addition to the general i m p rov e m e n t o f s o c i o economic activities of the region.”

It was awarded in 2015 and 2018 for LambataBida and Agaie-KatchaBaro, respectively, said Bima.

However, Bima decried that the two major access roads, Lambata-Agaie and Agaie-Katcha-Baro were only worked to 20 percent and 2 percent progress.

“Baro Port project is expected to create 3,000 direct jobs and many more indirect jobs as well as improving our roads network by keeping heavy duty trailers and trucks off roads, thereby expanding the life span of the roads,” he stated.

“The capital dredging of the Lower River Niger from Warri to Baro had been completed while the Baro Port and its cargo handling equipment have also been completed and commissioned on January 19 by President Muhammadu Buhari,” he said.

Revealing further, Bima disclosed that N670 million and N4.5 billion had so far been released for the project, out of the contract sum of N17 billion and N33 billion.

Adamu Aliero (APC Kebbi Central), in his contribution, concurred that the project was awarded during the administration of late President Musa Yar’Adua to create jobs and ensure easy movement of goods from Baro to other parts of the North.

For Mohammed Musa (APC Niger East), the project is laudable, and urged the Federal Government to ensure early completion of it.

Afreximbank, Thelo DB sign MoU for Africa railway development HOPE MOSES-ASHIKE frican-Export Import Bank (Afreximbank) and South Africa-based Thelo DB Proprietary Limited on Tuesday in Johannesburg, South Africa, signed a memorandum of understanding (MoU) to develop, finance and operate railway projects in Africa.

Under the terms of the MoU, signed on the side lines of the ongoing Africa Investment Forum, Afreximbank and Thelo DB will collaborate to support the modernisation of the continent’s railways as a catalyst to promoting trade, investment and economic skills development, recognising the urgent need for implementation of efficient and effective transportation and logistics solution in Africa, with particular emphasis on the freight railway sector.

Speaking during the signing ceremony, Benedict Oramah, president of Afreximbank, described the event as timely, given that the continent was in the

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process of operationalising the African Continental Free Trade Area agreement.

According to Oramah, it is imperative that critical trade enabling infrastructure be put into place to facilitate the flow of tradeable goods and services along Africa’s trade corridors. He noted that Afreximbank’s strategic plan, IMPACT2021, sought to dramatically improve intra-African trade.

Ronnie Ntuli, chairman of the Board of Thelo DB, welcomed the opportunity to work with “this leading and prestigious African multilateral development finance institution” and said that the strategic collaboration between the two organisations provided Thelo DB with the prospect to enhance the technical value chain of services that it offered to the African railway sector.

“Through this critically important relationship, we are able to offer to the continent, not only the best technical solutions for the railway sector but also introduce financing solutions to finance railway projects across the continent.”

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tax issues KPMG Tax Insight

TAT judgement on taxation of dividend paid from tax-exempt income

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he Tax Appeal Tribunal (TAT) sitting in Lagos recently delivered judgement in the consolidated tax appeals filed by United Capital Asset Management Limited (UCAM) and United Capital Trustee Limited (UCT), jointly referred to as “the Appellant”, against the Federal Inland Revenue Service (FIRS) or “the Respondent”.

The key issues for determination were: whether the provision of Section 19 of the Companies Income Tax Act (CITA) was properly applied by the FIRS in assessing the Appellant to income tax; and whether the Appellant was entitled to relief sought under the Executive Order No.004 of 2017 on Voluntary Assets and Income Declaration Scheme (VAIDS).

Facts of the case The FIRS issued notices of assessment for additional income tax liabilities, inclusive of interest and penalty, to the Appellant following conclusion of its desk review of the Appellant’s financial records for 2011 to 2016. The FIRS based its assessment on Section 19 of CITA because the Appellant distributed dividend to its parent company in excess of its total profits. Section 19 treats dividend distributed as a company’s total profits in any year of assessment where such company has no total profits or where its total profits are less than the amount of dividend paid.

The Appellant disagreed with the additional assessment but failed to object in writing to the assessment within the statutory 30-day period or pay the alleged additional liability. Consequently, the FIRS maintained that the assessment had become final and conclusive, and pasted noncompliance stickers at the Appellants’ headquarters.

The Appellant subsequently negotiated a payment plan with the FIRS and filed individual appeals at the TAT. The TAT consolidated the appeals as they relate to similar issues and the entities belong to the same group.

The Appellant argued that the FIRS wrongly assessed its income derived from government and corporate bonds to tax under Section 19 when such income is

specifically exempted from income tax by the Companies Income Tax (Exemption of Bonds and Short-Term Government Securities) Order 2011 (“Exemption Order”). The Exemption Order was issued by the President pursuant to his power under Section 23(2) of the CITA. Also, the FIRS rejected the Appellant’s application to regularise its tax positions under the Voluntary Assets and Income Declaration Scheme (VAIDS or “the Scheme”) in order to enjoy certain tax benefits under the Scheme, including exemption from payment of interest and penalties on outstanding tax liabilities on the basis that the Appellant did not meet specified requirements of the Scheme.

The VAIDS program was introduced by the Federal Government through the Executive Order No.004 of 2017 and lasted from 1 July 2017 to 30 June 2018.

TAT’s decision After considering the arguments of both parties, the TAT held that: 1. Section 19 of CITA does not concern itself with the source or origin of the dividend paid. Rather, Section 19 is applicable once the dividend declared and paid is higher than total profits.

2. Executive Orders, in the nature of the Exemption Order, are inferior to CITA. Therefore, its provisions cannot override or supersede the provisions of CITA, including Section 19.

3. The tax liabilities had become final and conclusive due to the Appellants’ failure to file an objection notice to the FIRS within the statutory timeline; and the Order of the TAT extending the time for appeal cannot be construed as extending the timeline to object to the assessment.

4. The Appellant is eligible to seek amnesty under Paragraph 4(f ) of the Executive Order on VAIDS, which the FIRS prematurely denied the Appellant. Therefore, the Appellant is not liable to interest and penalty on the outstanding tax liabilities.

Comments 1. The TAT’s judgement that Section 19 of CITA does not concern itself with the source or origin of dividend paid, but only with whether the dividend declared and paid is higher than total profwww.businessday.ng

its, is consistent with recent judgements delivered by the Federal High Court (FHC) and the TAT on the matter.

Despite the judgements, the matter remains contentious as the indiscriminate application of such interpretation of Section 19 will inevitably result in double taxation, where the dividend is paid from profits on which tax has been paid in prior years. This will particularly be the case if a company would not have been liable to excess dividend tax if it had distributed all the profits as dividends in the year they were earned, rather than retain them in the business.

2. The TAT’s decision that the Exemption Order is a subsidiary legislation whose provisions are inferior to, and cannot supersede CITA’s provisions actually did not consider the legal status of the Executive Order in the context of Section 23(2) of CITA. Section 23(2) of CITA specifically empowers the President to exempt “all or any profits of any company or class of companies from any source”, from tax through an Order.

Given that the President issued the Exemption Order in the exercise of his power under this provision, the Order is part and parcel of CITA and must be accorded equal legal status as other provisions of CITA. Consequently, the Tribunal should not have declared the Exemption Order inferior to CITA. Thus, subjecting income exempted from tax under the Order, which is an extension of CITA, to tax under another provision of CITA is uncalled for. Indeed, the TAT should have extended to the Exemption Order the same treatment it rightly gave the Executive Order No. 004 of 2017 on VAIDS by which it overruled the FIRS for denying the Appellant’s application for amnesty under the Order and reversed its assessment of penalty and interest on their tax liabilities under CITA. In effect, the TAT upheld the provision of the Executive Order on VAIDS on waiver of penalty and interest on tax liabilities notwithstanding the extant provisions of CITA on penalty and interest.

3. Furthermore, the decision of the Tribunal to the effect that “we hold that the

dividends declared by the Appellants were properly subjected to tax under Section 19. The Section does not concern itself with the source or origin of any distribution.

Once either of the situations prescribed in the Section occurs, the provisions of the Section are triggered and are applicable. For this reason, the Appellants’ Counsel’s invitation to distinguish the three Oando cases referenced in Paragraphs 6.43 to 6.47 of the Appellant’s Final Address is declined” is very concerning, especially in terms of its implications for investment holding companies (Holdcos). What it means is that a Holdco whose source of income is exclusively dividends from its subsidiaries, which Section 80(3) exempts from further tax, is

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nonetheless taxable under Section 19, because Section 19 does not distinguish the source or origin of dividends distributed in excess of taxable profits.

But the question is, can the same legislation which declares in one vein [Section 80(3)] that the withholding tax paid on dividend income is the final tax, subject the same dividend to tax in another vein [Section 19]? This cannot be so in the face of the unambiguous provision of Section 80(3) of CITA to the effect that “dividend received after deduction of tax … shall be regarded as franked investment income … and shall not be charged to further tax as part of the profits of the recipient company.”

The foregoing is a clear pointer to the fact that the

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last word has not been heard yet on Section 19 of CITA. While the TAT might have been constrained by the precedents in the judgements of the FHC in Oando v. Federal Inland Revenue Service (Appeal No. FHC/L/6A/2014) and Court of Appeal in Appeal No. CA/L/409/2008, it might have gone further to distinguish this case, which deals with statutorily tax-exempt income. As it is uncertain when the Court of Appeal will give its judgement in the pending appeal against the FHC’s decision in the Oando case referenced above, the time has come for legislative intervention to reverse the undesirable consequences of the prevailing interpretation and application of Section 19 of CITA by the FIRS and the courts.

Wednesday 13 November 2019

BUSINESS DAY

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Wednesday 13 November 2019

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Wednesday 13 November 2019

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FINANCIAL TIMES

World Business Newspaper

JIM PICKARD, SEBASTIAN PAYNE

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he UK Labour party suffered what it described as a “sophisticated and large-scale cyber attack” on its digital platforms on Monday, it has revealed.

The party said it was confident that its security systems prevented any data breach but said it had reported the attack to the National Cyber Security Centre, part of the UK’s communications and signals intelligence service GCHQ. Speaking at an election campaign event in Blackpool, northwest England, the Labour leader Jeremy Corbyn said: “If this is a sign of things to come in this election, I feel very nervous about it all because a cyber attack against a political party in an election is suspicious and something one is very worried about.”

He added that the party was investigating who may have been behind the attack.

According to party and security officials, the incident was a distributed denial of service attack — where vast volumes of data are directed at computer servers overwhelming them and causing websites to slow down or crash.

But while a malicious denial of service attack can be effective it is considered by cyber experts to be relatively unsophisticated.

Attribution may be more difficult compared with other types of cyber attack, security officials said.

The BBC quoted a Labour party

Labour hit by ‘sophisticated and large-scale cyber attack’ Party believes it prevented any data breach but alerts National Cyber Security Centre

Jeremy Corbyn: ‘A cyber attack against a political party in an election is suspicious’ © Phil Noble/Reuters

“source” who said the attack could have come from “Russia or Brazil”, but security officials said there was no evidence at this stage that the attack had come from a hostile state such as Russia.

The incident nevertheless underlines the nervousness around

possible cyber attacks during the general election. In recent weeks the NCSC has briefed all the main political parties on the threat posed to the election and campaign teams by cyber attackers.

Last year the UK joined the US in attributing the 2016 hack on the

Democratic National Committee to Russian military intelligence.

Niall Sookoo, Labour’s executive director of elections, wrote to campaigners to explain why systems were working slowly on Monday.

“Yesterday afternoon our se-

curity systems identified that, in a very short period of time, there were large-scale and sophisticated attacks on Labour party platforms which had the intention of taking our systems entirely offline,” he wrote.

“I would I like to pay tribute to all the teams at Labour HQ who identified this risk and acted quickly to protect us.”

In a statement the party said: “We have experienced a sophisticated and large-scale cyber attack on Labour digital platforms.

We took swift action and these attempts failed due to our robust security systems.

“Our security procedures have slowed down some of our campaign activities, but these were restored this morning and we are back up to full speed.”

Separately The Times revealed on Tuesday that Labour had published the names of people who had donated through its website in what could — according to experts — be a breach of the EU’s General Data Protection Regulation rules.

Labour removed the information from its website after being alerted by journalists.

Hong Kong police warn city is on ‘brink of total collapse’

China’s $1tn scramble for convertible bonds reflects hot market Transport chaos and violence as protesters block roads in financial district Bidding for new deals including Shanghai Pudong Development Bank stuns investors HUDSON LOCKETT

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ew debt and equity offerings often draw a crowd.

But when investors last month placed more than $1tn worth of orders for a convertible bond issued

by Shanghai Pudong Development Bank, about 140 times the $7bn raised, it was enough to shock even the most seasoned China investor.

That $1tn is almost as large as the entire stock-market capitalisation of Apple or Microsoft — two of the biggest companies in the world. “It was a ridiculous amount,” said Gerry Alfonso, head of research at Shenwan Hongyuan Securities in Shanghai.

As so often with runaway deals, the over-bidding in part reflects quirks in the way new debt and equity end up in investors’ hands. But it also reflects a surge in issuance of these equitylinked instruments in China — a rise helped by an unusual embrace of the product by policymakers better known for cracking down on financial innovations to ensure stability.

So far this year, Chinese companies have issued a record $40bn in convertible bonds, up more than 80 per cent from the full-year total in 2018, according to Dealogic.

Convertible bonds typically carry a lower coupon payment than normal bonds but they offer investors the right to switch them for equity if a company’s shares rise to a certain price. For companies, convertibles of-

fer a way to raise money more cheaply than by issuing regular debt and do not immediately dilute shareholders’ equity.

Ronald Wan, chief executive at Partners Capital in Hong Kong, said Chinese convertibles had become more attractive to investors thanks to this year’s stock rally, while the government was promoting the instruments as a way to rein in financing done off-balance sheet, or through a fragile shadow banking sector.

Chart showing the outstanding balance for a Suntak Technology convertible bond maturing in 2023 (in million Renminbi). Bond lists with face value of 800 million Renminbi, and redeemed with remaining balance of 4.7 million in October 2019.

Another chart below shows share price and conversion price in the same time frame.

But Mr Wan cautioned that convertibles’ performance “depends on the quality of the issuer”, with investors typically favouring large banks and big blue-chip companies over small and mid-sized issuers.

Mr Alfonso eachoed that, warning that while large issuers such as Shanghai Pudong have seen ample liquidity in their convertibles after listing, investors in smaller issuers faced the prospect of taking heavy losses in the event of a sell-off.

“The liquidity is bad but there is liquidity,” he said. “The thing is, the price you’re going to get there is pretty horrendous.” www.businessday.ng

ALICE WOODHOUSE AND NICOLLE LIU

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ong Kong police have warned that the city is “on the brink of total collapse”, after a second consecutive day of transport chaos and violence across the city.

A police shooting of a protester on Monday morning unleashed a wave of clashes across the Chinese territory that continued overnight, with police firing tear gas at demonstrators at two universities and in the central business area on Tuesday.

The MTR, the city’s metro network, closed multiple stations and reduced the frequency of trains, forcing some commuters to walk along rail tracks to the next stop.

Many schools were also closed across the city.

“Over the past two days, our society has been pushed to the brink of a total breakdown as rioters went on a rampage,” Kong Wing-cheung, a senior police superintendent, said in a press conference.

The latest disruption came as the US appealed for calm on both sides following a steep escalation of violence since pro-democracy protests began in June. Demonstrators clashed with police on Monday and a man was set alight

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by people following scuffles with protesters. A police officer was also suspended after video footage appeared to show him riding his motorbike into a number of protesters.

A total of 128 people were hospitalised after Monday’s clashes.

The shot protester and the man who was set alight were both in a critical condition, according to the Hospital Authority.

Morgan Ortagus, a US State Department spokeswoman, said Washington was watching the situation with “grave concern”, adding that the polarisation “underscored” the need for dialogue between the government, protesters and other members of the public.

“We condemn violence on all sides, extend our sympathies to victims of violence regardless of their political inclinations, and call for all parties — police and protesters — to exercise restraint,” Ms Ortagus said.

Carrie Lam, Hong Kong’s chief executive, called protesters “extremely selfish” for paralysing transport networks in her weekly press conference on Tuesday. A day earlier, she had branded the demonstrators “enemies of the people”, saying they would never achieve their aims through violence.

Ms Lam confirmed the city planned to hold crucial local elec@Businessdayng

tions on November 24, the first electoral test of public opinion since the anti-government protests began in June, despite the growing violence.

“On the whole, we will try our very best to ensure the election will continue in a safe and orderly manner,” Ms Lam said in her press conference, adding she would consider advice from the election committee.

A record number of pro-democracy candidates are standing and there has been an increase in voter registrations. However, there have been at least eight attacks on pro-democracy political figures and candidates in recent months.

Last week, Junius Ho, an outspoken pro-establishment lawmaker, was stabbed while campaigning for a colleague.

“We are quite disappointed the government has not taken any substantial action,” said Alice Mak, a pro-establishment lawmaker, adding that authorities had talked about stopping the violence but the situation remains “messy”.

A newspaper advertisement signed by more than 100 public figures, including the former finance secretary, called on the government to ensure the elections go ahead to prevent any further divisions in society.

48

BUSINESS DAY

FT

Wednesday 13 November 2019

NATIONAL NEWS

US companies stay cautious on spending under strain of trade war Executives signal further pullback in capital expenditure for fourth quarter RICHARD HENDERSON AND JENNIFER ABLAN

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he chill in spending on new factories and equipment by big US companies appears to have persisted through the third quarter of 2019, according to the latest round of earnings reports, which featured warnings from executives that budgets are likely to slow further in the final months of this year.

Capital expenditure grew 3.2 per cent in July to September, judging from the four-fifths of S&P 500 companies that have so far released earnings for the period, as tracked

by Refinitiv. That is roughly in line with the previous quarter — which marked the lowest growth rate in two years — but is far behind the double-digit growth in capex that accompanied last year’s tax reform initiated by President Donald Trump.

Company executives have also indicated during earnings season that the pace of growth will slump to 1.8 per cent in the fourth quarter, underlining the shadow cast on boardrooms by trade wars and other global factors.

“Corporate cash spending will continue to face pressure as management teams deal with persisting uncertainty,” David Kostin, chief US equity strategist for Goldman Sachs, said in a research note. On thirdquarter earnings calls “many executives highlighted deferring capital expenditures as they approached investments with increased caution”, he said.

Column chart of Quarterly yearover-year growth in capital expenditure for S&P 500 companies (%) showing Companies slow capex spending Mr Kostin pointed to companies across a range of sectors as evidence of the trend, including the banking giants JPMorgan Chase and Citigroup, the tobacco group Philip Morris and the aircraft makers Boeing and Textron, a Rhode Island-based manufacturer known for the Cessna brand.

Scott Donnelly, Textron’s chief executive, said on the group’s thirdquarter earnings call that the USChina trade negotiations and Brexit were weighing on decision makers.

Businesses “are deferring capex investments, be it business jets or otherwise, because of [these] uncertainties”, he said.

Sputtering growth in capex and the lowest level of CEO confidence in a decade have failed to subdue investors’ appetite for US stocks, with the S&P 500 benchmark hitting a record high on Friday.

Confidence over the strength of demand tends to drive spending decisions, which in turn can improve a company’s productivity, said Nancy Tengler, chief investment officer for Laffer Tengler Investments in Phoenix, Arizona. Having both fall in tandem is “worrying”, she said.

Corporate leaders appear to be waiting for greater clarity on the trade negotiations between the US and China before committing to new projects, Ms Tengler added. “It looks like CEOs have thrown in the towel until trade is settled,” she said.

Israel braces for new fighting after killing Gaza leader Assassination of Palestinian militant in air strike prompts retaliatory rocket attacks MEHUL SRIVASTAVA

I

srael assassinated a senior leader of an Iran-backed militant group in the Gaza Strip in an air strike on Tuesday morning, prompting dozens of retaliatory rockets and concerns of a new escalation in hostilities with the Palestinian territories.

The Israeli military said it had killed Baha Abu Al-Ata of Palestinian Islamic Jihad, one of several militant groups operating in the blockaded territory. It said Al-Ata was a “ticking time bomb” responsible for several rocket attacks into southern Israel in the past few months.

Militants in the Gaza Strip responded with rocket attacks against Israeli targets prompting concerns of renewed fighting, after a period of relative calm.

“Israel is not interested in escalation, but we will do everything required to protect ourselves,” Prime Minister Benjamin Netanyahu told reporters at military headquarters. “This could take time. What is needed is stamina and cool-headedness.”

The air strike against Al-Ata at about 4am targeted his home and also killed a woman living there, the Gaza health ministry said.

Sirens sounded across southern Israel soon after the raid, sending residents to air raid shelters while some roads bordering the Gaza Strip were closed.

Schools and offices were shut

as far north as Tel Aviv, where air raid sirens rang out and schoolchildren were rushed home. Israel’s military said it was preparing for several days of war.

Assassinations of senior leaders in the Gaza Strip are rare and considered a serious escalation.

Jonathan Conricus, an Israel Defense Forces spokesman, said the death of Al-Ata should not be seen as a return to a “strategy of targeted killings”.

The strike that killed Al-Ata threatens a prolonged retaliation from Islamic Jihad. It has built up an arsenal of thousands of rockets, some of which are considered accurate enough to target Israeli cities.

“Our inevitable retaliation will rock the Zionist entity,” Palestinian Islamic Jihad said in a statement.

Mr Conricus said the decision to kill al-Ata was made after Israeli intelligence intercepted a plot that involved him and the use of snipers, improvised explosive devices and rockets against Israeli soldiers.

Islamic Jihad is a rival of Hamas, the militant group that controls the Gaza Strip, which has been involved in behind-thescenes negotiations with Egyptian intermediaries to broker a ceasefire with Israel.

But Hamas and Islamic Jihad often co-operate, especially during hostilities with Israel, which have resulted in three full-blown wars since 2007. www.businessday.ng

© FT montage; Andre Hunter

Shares in students: nifty finance or indentured servitude?

Yield-starved investors are taking slices of graduates’ future income ARCHIE HALL

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ombine a crisis in college affordability with yield-starved investors and you get one of the more unusual financial products of the past decade: shares in students.

Income share agreements are an alternative to student loans that are gaining ground in the US. From only a handful several years ago, this academic year almost 50 American universities and technical academies offer them. Next year, about 100 will.

A student funding their education with an ISA gets money upfront in exchange for offering a share of their income after graduation — ranging from nothing if they are unemployed or on a low salary to potentially several multiples of what they received. Graduates continue paying a slice of their income until the ISA expires, usually after about a decade, or when they hit a repayment cap. Risk, in short, is shifted from borrower to lender.

“They might go backpacking for eight years and not pay you a dime, they’d be well within their rights,” said Charles Trafton, president of Edly, a recently-launched marketplace in New York that connects investors with ISA programmes.

ISAs are not a new idea — Yale briefly offered one in the 1970s — but today a group of universities, investors, and start-ups claim they have managed to make ISAs work.

If they are right, ISAs could be part of the answer to the mounting US student debt burden, sitting at more than $1.5tn, that has become a central issue for those competing for the Democratic presidential nomination.

ISAs are also attracting rare bipartisan interest in Washington. A bill being considered in Congress to give ISAs a regulatory framework has been co-sponsored by the Republican senator Marco Rubio and Christopher Coons, a Democrat. Nonetheless, proponents of widespread debt forgive-

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ness such as Elizabeth Warren and Bernie Sanders are wary.

Yet for now ISAs remain a niche product with much to prove; they compete in the $10bn-a-year private debt marketplace, rather than with $100bn-a-year governmentsubsidised loans. Borrowing from a bank or the government is still the dominant way to fund higher education in the US. A graphic with no description The most common way to administer an ISA is through a university or technical school, which will usually determine eligibility and co-invest alongside external investors. Some companies, though, offer direct-to-consumer ISAs, where students apply for the money directly.

Paul Laurora, a recent graduate of Purdue University in Indiana, said university involvement in ISAs gave them credibility in the eyes of students.

“Purdue is not going to be involved with an Enron Corporation that will screw you over,” he said.

He took out an ISA for $33,000 to cover his tuition fees after exhausting federally-subsidised loans.

A university-administered ISA also appears to align the incentives of universities and students.

The better that universities prepare students for the workforce, the greater the returns they will reap from their ISA programmes.

ISAs have become particularly popular at institutions that offer crash courses in professionallyoriented skills such as coding or welding.

Mr Trafton is eager to stress the benefits for investors: “They’re totally unique assets, high quality, uncorrelated with anything else [prospective buyers] are investing with.”

As major government bond markets offer negligible returns, the ground is certainly fertile for products that promise much more.

ISAs for undergraduate degrees offer investors yields in the high single digits, said Mr Trafton, while those for technical schools offer @Businessdayng

yields in the low double digits.

Line chart of Outstanding student loans per college graduate ($000) showing High costs of funding a US degree The tiny size of the market is a key impediment for major institutional investors. So far, only a handful of smaller investors have taken the plunge.

Peter DeCaprio, president of Crow Point Partners, a $1bn Massachusetts asset management company, is one. He invests in a blend of university and coding school ISAs. “You have to take small bites.

You can’t put $20m-$40m to work in a month,” he said. “We’re lucky that we’re small and can take smaller bite sizes, that’s been helpful.”

Michael Prober, a family office investor, is also a buyer. “I felt that you could get equity mezzanine type rates of return for credit risk,” he said, adding: “There’s a window in this asset class, maybe it’s a year, maybe it’s three years, where you can make nice rate of return before capital markets swallow it.”

Mr DeCaprio concurs: “Selfishly, I hope people take their time. We have the asset class to ourselves.”

Anyone entering the market faces major risks. There is no case law on ISA defaults, nor bespoke regulation — although legislation currently in Congress may change that. Many institutions issuing them are only a few years old.

“Some of the breathless coverage of investor interest, it doesn’t materialise, and it makes you look foolish as a breathless coverer. It can’t happen that quickly if you do it responsibly,” said Tonio DeSorrento, chief executive of Vemo Education, which administers Utah and Purdue’s ISAs. Marketing ISAs directly to students, without university involvement, is a more scalable but also more challenging model. “How do I even underwrite 3,000 students from 3,000 different schools from 3,000 different majors? It’s a credit card portfolio of twenty-somethings,” Mr Trafton of Edly said.

Wednesday 13 November 2019

BUSINESS DAY

49

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

EIB/natural gas: scorched earth policy Despite drawbacks, the fuel has role to play as stepping stone to cleaner renewables PETER WELLS

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y 2050, global natural gas consumption will have expanded by over 40 per cent, outpacing other beleaguered fossil fuels, says the US Energy Information Agency.

That idea does not please worrywarts at the European Investment Bank. The multilateral lender could soon stop funding infrastructure projects involving natural gas. This week it will consider tightening lending standards for infrastructure projects involving natural gas.

It would be a mistake to clamp down on the fuel. Natural gas has big drawbacks. It also has a role to play as a stepping stone between dirtier hydrocarbons and cleaner renewables.

The EIB could tighten its policy on CO2 emissions. This would more than halve its 2015 limit from 550g of CO2 per kilowatt hour generated to 250g. Greens dislike the fact that natural gas is largely composed of methane. This generates half the CO2 of coal when burnt. When leaked, it contributes heavily to global warming.

Tougher standards would prevent the EIB from lending to natural gas pipelines and efficient gas-fired power plants. The current higher

limit has already prevented some lending to geothermal projects, the EIB admits.

The EIB lends less than €2bn annually for natural gas infrastructure.

That can be covered from other sources. Nevertheless, raising the threshold would send a bad signal to the EU countries that are EIB shareholders. Several are trying to wean themselves off dirty coal, Germany and Poland included.

Both rely more on coal power than they should. Although coal is declining in Germany, it still generates 35 per cent of electricity. Renewables have grown rapidly here, but CO2 emissions have fallen less than 5 per cent in the past decade.

Coal fuels 80 per cent of Poland’s power. Green energy cannot solve its needs overnight. Natural gas will be needed as buffer in both countries.

Politicians and public lenders need to grow backbones to manage decarbonisation. Oil companies claim spurious planet-friendly credentials by cutting operational emissions even as they tap new pollutants. Deep greens despise everything except wind and solar.

The centre ground is a lonely place.

But it is where policymakers must pitch their camp.

Gold slips as upbeat mood prevails in global markets

Precious metal trading close to its lowest level in three months

NEIL HUME

G

old was trading close to its lowest level in three months on Tuesday as an upbeat mood prevailed in global markets.

The precious metal has been one of the best performing commodities of 2019 but it dropped 3.7 per cent last week investors rediscovered their animal spirits amid easing geopolitical tensions and signs of stabilisation in the global economy.

“Equities are gaining and safe haven assets are under pressure, as the market has moved into risk-on mode, with the twin headwinds of trade and Brexit risk perceived to have eased,” said analysts at Morgan Stanley.

President Donald Trump is due to speak on Tuesday and could provide further detail on the progress of trade negotiations with China.

Gold was trading at $1,454 a troy ounce on Tuesday, more than 6 per cent below the six year peak it reached in September.

For most of this year investors and central banks have been steadily accumulating gold, its appeal burnished by the huge stock of bonds trading at negative yields.

However, its lustre has started to fade as several big banks, including JPMorgan and Citi, have

turned negative.

“With speculative long positions near record highs and the [US] Federal Resource now on hold, gold may be vulnerable to correction if we see further improvement in growth and/ or easing of geopolitical risks,” JPMorgan said last week, as it moved to an “underweight” recommendation in gold.

Meanwhile, nickel was headed for its worst run a year, on concern about slowing demand in China and a pick-up in supplies.

It fell 1 per cent to $15,430 a tonne.

The metal, which is used to make stainless steel, rose to a five-year high above $18,000 in September after Indonesia announced plans to ban ore exports.

“After the suspension two weeks ago, Indonesia has allowed exports to resume from nine companies — at least until 1 Jan 2020, when the broader export ban comes into force,” said Morgan Stanley.

“The partial lift of the suspension, plus rising China imports from elsewhere (imports from New Caledonia, Australia and the Philippines gained 13 per cent month-on-month in September), supports our view that China will have sufficient ore inventory to maintain a nickel pig iron production through 2020 at around 500,000 tonnes.” www.businessday.ng

Xavier Niel tightens grip on Iliad with €1.4bn buyback French billionaire offers big premium for a fifth of his telecoms group’s share capital HARRIET AGNEW

I

liad founder Xavier Niel will finance a €1.4bn buyback of a fifth of the French telecoms group’s share capital, increasing his stake and putting the stock on track for its biggest single-day rise since the company listed 15 years ago.

Iliad said it planned to repurchase about 11.7m shares on the open market at a price of €120 per share. This represents a premium of 38 per cent on the volume-weighted average price over the past three months and a level not seen since January.

However, it is a long way off Iliad’s all-time high of €238.70 in June 2014. The shares gained as much as a fifth in morning trading on Tuesday.

The transaction will tighten Mr Niel’s grip on the group, which shook up the French mobile market with its low-cost service Free, and marks a vote of confidence in Iliad by the telecoms entrepreneur.

His stake in Iliad could rise from just over 52 per cent to as much as 72 per cent, depending on the uptake of the share buyback by investors, according to Russell Waller, an analyst at New Street Research.

The transaction will be fully financed by a share issue at the same price, representing the same amount as the buyback offer, open to all Iliad sharehold-

Xavier Niel’s stake in Iliad could rise from just over 52 per cent to as much as 72 per cent © Reuters

ers and guaranteed by Mr Niel, who will not tender his own shares. The repurchased shares will be cancelled so Iliad’s total number of shares will remain unchanged.

“We think Xavier Niel is sending a very strong signal that he thinks the shares are undervalued,” Mr Waller said in a note on Tuesday.

“Iliad denied . . . that they were thinking of taking the company private but given the market’s unwillingness to reward Iliad’s ‘good’ capex and long-term free cash flow return, this must surely have been considered in our view.”

Iliad burst on to the scene with Free mobile in 2012, launching a brutal price war with rivals Orange, Altice’s SFR and Bouygues that has eaten into its profitability.

The announcement comes

as the telecoms group, which has roughly a fifth of the mobile market share in France, tries to turn round its performance after a difficult period. The group has faced shareholder concern about its commercial strategy, its ability to generate cash, an insider trading conviction for its chairman and a controversial pay scheme for its senior management.

After losing subscribers in recent months, Iliad on Tuesday reported better than expected results for the third quarter. It gained 32,000 net new broadband subscribers in France during the three months, boosted by its fibre business. Overall Iliad had 19.72m total subscribers in France at the end of the third quarter, slightly ahead of analysts’ estimates of 19.68m, according to a company-compiled consensus.

Pallinghurst and Traxys to invest $2bn in battery materials HARRY DEMPSEY

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allinghurst Group, the investment group chaired by former BHP boss Brian Gilbertson, have announced plans to invest up to $2bn in mining projects for battery materials, including copper and nickel.

The Pallinghurst-Traxys Battery Materials joint venture will look to take controlling stakes in lithium, graphite and cobalt projects in developed countries and invest in associated facilities that process and improve ore.

“The electric vehicle and energy storage revolution is gaining pace. The future demand for the critical battery grade materials is set for explosive growth,” said Arne Frandsen, co-founder of Pallinghurst.

The launch comes as the Trump administration and other western countries seek to develop their own supply chains of responsibly sourced minerals critical to meet the boom in

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demand driven by electrification and green technologies.

The companies will not be targeting investments in continents such as resource-rich Africa and Latin America through the venture but only projects in North America, Europe and Australasia.

David Merriman, a battery metals analyst at Roskill, a consultancy, said “there has been a real focus on regional supply chains for more ethical reasons . . . but also due to a number of more economic and technical benefits.”

Under the deal, Pallinghurst will identify and manage projects, while Traxys will help to market and deliver the minerals to end users. This will allow Traxys to broaden the range of materials it supplies to battery manufacturers, which is currently limited to cobalt, copper and nickel.

Pallinghurst had already pledged $1bn in July to develop projects to extract battery metals @Businessdayng

and the most recent deal sees Traxys matching the investment fund’s commitment.

Mr Merriman said it is a good time to invest as the market capitalisation of projects to extract raw materials for batteries have “dropped to more reasonable levels” after a wave of investor excitement.

The London investor has made two investments into Canadian battery metal miners this year. It acquired about 20 per cent in Nouveau Monde Graphite, which is developing the Matawinie graphite project near Montreal, and has invested C$337m ($258m) in Nemaska Lithium, a venture backed by Japan’s SoftBank that hopes to develop a lithium project in Quebec.

It is engaged in exclusive negotiations until the end of the year with Nemaska for a further C$600m ($452m) investment that would enable the miner to complete construction of its lithium mine.

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Wednesday 13 November 2019

BUSINESS DAY

FT

ANALYSIS

Non-English speakers are shut out of the top jobs Staff who are asked to work in the language develop new hierarchies based on fluency MICHAEL SKAPINKER

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peaking at a conference in Dubai last week, I was struck by the ubiquity, confidence and fluency of non-native English speakers. Emiratis talked in English to Indians, Kazakhs to Egyptians.

I have written about the misunderstandings between native and non-native English speakers — and the non-natives’ relief when the born anglophones, with their incomprehensible phrasal verbs and figurative speech, are not there.

But what of the tens of millions of non-native speakers, whose daily conversations account for the majority of business conversations in English? Are they divided by levels of fluency and their striving for the best globally oriented jobs?

A recent study looked at what happened when a Chilean engineering company, the subsidiary of a US group, changed its corporate language from Spanish to English.

The motivations were the usual ones: to become more global, to win non-Spanish speaking clients and to facilitate communications with the US corporate headquarters.

The company put an unusual effort into ensuring that everyone became competent in English, particularly given its small size. It hired three language specialists for its 60 staff and scheduled hours of lessons each week. The language specialists observed meetings and conference calls and ran workshops on functional vocabulary.

They rearranged seating to put fluent English speakers next to less

advanced colleagues. They created glossaries for employees and posted English-language invoices and quality control documents on the company intranet. Six months after the change, the company ordered that all internal emails should be in English.

How did the staff fare? The researchers, Sebastian Reiche of Iese Business School and Tsedal Neeley of Harvard Business School, studied the employees’ progress for two years, looking at how attitudes to the language change affected learning progress and whether staff stayed with the company or left.

The change was an anxious one for many. A memo from the language experts noted that “employees expressed dissatisfaction, anger, frustration and fear of making mistakes as people attempted to get the job done while also learning English”. A meeting between lowfluency Chilean employees and US colleagues resulted in “communication failures and a disheartened feeling”.

Unsurprisingly, those who felt least negative about the language switch made the most progress. That did not mean it was always easy for the best English speakers. Those who had a higher level to start with became frustrated by their struggle with what the researchers called “abstractions and nuances in the language”. This is a familiar feeling to anyone who has learnt another language. Even after years of progress, you have conversations that leave you disheartened as your language falls apart during more complex conversations.

Cerberus pushes for Paul Achleitner to leave Deutsche Bank Other top shareholders also want chairman to change but not immediately OLAF STORBECK AND LAURA NOONAN

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erberus has lost faith in Deutsche Bank’s chairman Paul Achleitner and is pushing for him to be replaced, according to three people familiar with the worsening relationship between the US private equity firm and Germany’s biggest bank.

The desire for regime change has hardened since Deutsche abandoned merger talks with Commerzbank in April, these people said, scuppering the plans of Cerberus, which is Deutsche’s third-largest shareholder with a 3 per cent stake and the secondbiggest shareholder in Commerzbank. Mr Achleitner endorsed ending the talks.

Deutsche Bank’s other big shareholders — two members of the Qatari royal family, funds managed by former JPMorgan Chase executive Doug Braunstein and asset manager BlackRock — also have an increasingly negative view of Mr Achleitner’s performance, according to people familiar with their views, which have been expressed in informal talks between the top investors.

Since Mr Achleitner became chairman of Deutsche Bank in 2012, the bank has accrued losses of more than €10bn, fired three chief executives and paid out €83m in severance pay to 17 executives who left the bank early.

It also embarked on five new strategies and raised €20bn in fresh equity while its share price

collapsed by three quarters.

However, although the other large shareholders would like Mr Achleitner to step down before his term ends in 2022, they are not convinced that now is the right time for change.

“Cerberus is much more pushy [than the others],” said one person close to a top five investor, adding that such a move could further destabilise the struggling lender during the most radical restructuring in its 149-year history, which involves cutting 18,000 jobs, shrinking its balance sheet by more than a fifth and cutting €6bn in costs.

“Deutsche is under a lot of pressure and strain already, and we need to make sure we are not adding to this,” said a second person close to the matter, adding that “different [investors] have different views on this matter”.

At the bank’s annual shareholder meeting in May, 90 per cent of the investors present voted against a motion to remove Mr Achleitner from the board.

Cerberus has paper losses of more than half a billion euros since it built its stake two years ago. Unusually, it was also hired

by Deutsche as an adviser on how to cut costs and shrink its balance sheet.

The views of Cerberus on Deutsche’s operations have not been appreciated by everyone inside the bank. “They are behaving as if they owned a 30 per cent stake, not a 3 per cent one,” said one person close to the matter. www.businessday.ng

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Australia: the campus fight over Beijing’s influence Clashes between pro- and anti-Hong Kong demonstrators have renewed scrutiny over China’s role in western universities JAMIE SMYTH

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rew Pavlou is an unlikely threat to the Chinese Communist party. The 20-year-old arts student at Australia’s University of Queensland has never even been to the country. But his decision to organise a campus demonstration in support of Hong Kong pro-democracy protesters has sparked a diplomatic incident between Canberra and Beijing and put him on a collision course with the Chinese authorities.

The July 24 protest turned violent, with clashes between pro- and antiBeijing students. The organisers were subsequently accused by China’s consul-general in Brisbane, Xu Jie, of being “separatists” and “anti-China activists”.

Mr Pavlou has lodged a police complaint against Mr Xu alleging that the consul-general’s statement exposed the young student to death threats. It claims that the statement is evidence of efforts by Beijing and its network of foreign representatives to silence critics and limit freedom of speech on campuses.

The arts student is also urging the university to close its Confucius Institute, a Chinese language and cultural centre on campus funded by Beijing, and reverse its decision to appoint Mr Xu as an adjunct professor.

A separate legal action lodged

by Mr Pavlou against Mr Xu will be heard on November 22 at Brisbane Magistrates Court. The student has asked the court to issue a form of restraining order against Mr Xu that would require him to stop any activity that threatens to cause harm to Mr Pavlou. But the senior Chinese official has not yet said whether he will attend court or defend the action.

The spillover of tensions generated by the Hong Kong protests at colleges in Australia, New Zealand, Canada, the US and elsewhere has

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intensified a global debate about Beijing’s influence at western universities where annual enrolment of Chinese students doubled to 869,000 in the decade to 2017, according to the Centre for Independent Studies, a Sydney-based think-tank. It is a concern that extends beyond Beijing’s monitoring of its own citizens on overseas campuses: bleeding into areas such as research and development and cyber security.

“Australian academic independence is being bought by the Chinese government,” says Mr Pavlou.

“Beijing exercises so much financial leverage over our universities that it can stifle all criticism of the Chinese government on campus.”

The university strongly rejects Mr Pavlou’s criticisms, saying it is committed to free speech and insists its ties with Mr Xu and the Confucius Institute are entirely appropriate.

But the violent scenes have alarmed Australia’s conservative government, which rebuked Mr Xu for his comments and has created a foreign interference task force staffed by security service personnel and academics to monitor the university sector.

It is expected to issue guidelines by the end of November on how to strengthen cyber security on campuses, reduce the risk of sensitive military and dual-use intellectual property being obtained by the Chinese government or military, and safeguard academic freedom at colleges.

Canberra’s focus on rooting out foreign influence, first in politics and now universities, has angered Beijing and alarmed some Australian academics, who warn it risks labelling all Chinese students as spies, promoting xenophobia and causing irreparable damage to bilateral relations, with two-way trade worth A$213bn last year. But critics counter that universities are turning a blind eye to Beijing’s alleged interference on campus because the sector has @Businessdayng

become dependent on Chinese money.

“This is a wake-up call for all of us, whether it be government, the university sector or business,” says Dan Tehan, Australia’s education minister. “We need to understand the best way we can deal with the threat [of foreign interference].”

The influx of Chinese students buoyed college coffers at a time when many western governments were cutting education budgets in the wake of the 2008 financial crisis.

Universities say Chinese students make a valuable contribution beyond fee income by fostering diversity, new ways of thinking in classes and personal links to the world’s second-biggest economy.

But they do also make a substantial financial difference, paying at least three to four times more in fees than domestic students.

In 2017 the University of Sydney generated about A$500m in fees from Chinese students — almost a quarter of its total A$2.3bn revenue for the year. Foreign students contributed A$32bn to Australia’s economy in the year to the end of June 2018.

Critics counter that the surge in Chinese student numbers, who make up one in 10 of those enrolled at Australia’s top eight universities — raises questions about the sector’s reliance on Chinese funding, cyber security and the extent to which the ruling Communist party seeks to influence student organisations and quash criticism of Beijing on campuses.

Such concerns are not restricted to Australia. In Canada, which is embroiled in a diplomatic spat with Beijing following the arrest of Huawei chief financial officer Meng Wanzhou, a declassified report by the national spy service warned last year that China is targeting its “diaspora as a means of increasing international influence”.

Wednesay 13 November 2019

BUSINESS DAY

Live @ The Exchanges Large cap stocks seen drive market’s N68bn gains Stories by Iheanyi Nwachukwu

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igeria equities market recorded about N68billion gain on Tuesday November 12 as investors increased their equity stake in most of the largely capitalised stocks.

After last Monday’s public holiday to mark the 2019 Eidul-Maulud, stock trading began Tuesday on the Nigerian Stock Exchange (NSE).

The NSE All Share Index (NSE) which opened the week at 26,314.49 points gained 0.54percent to 26,456.39 points at the sound of the trade closing gong.

Likewise, the value of listed equities increased from N12.810trillion to N12.878trillion, increasing by about N68billion. Cement Company of Northern Nigeria Plc recorded the highest

price advance from N17.5 to N19.1 after it added N1.6 or 9.14percent. Dangote Cement Plc followed after its share price moved up from N145.8 to N147.2, adding N1.4 or 0.96percent.

Nigerian Breweries Plc rallied from N46.5 to N47.2, after adding 70kobo or 1.51percent, Access Bank Plc advanced from N9.2 to N9.55, adding 35kobo or 3.80percent, while UAC of Nigeria Plc moved up from N6.2 to N6.5, adding 30kobo or 4.84percent.

The stock market’s negative return year-to-date (ytd) moderated to -15.83percent.

Market watchers believe that barring negative price movement in large cap stocks, the market will continue its upward trajectory on Wednesday November 13 as the local bourse continue to experience positive/strong sentiment and renewed buying interest.

However, the possibility of

profit taking on gains made in recent sessions cannot be ignored.

The volume of stocks traded decreased by 12.52percent from 432.47million to 378.34million, while the total value of stocks traded increased by 28.17percent from N5.57billion to N7.15billion in 4,798 deals.

On the laggards list, Lafarge Africa Plc led the pack after its share price declined from N14.7 to N14.15 losing 55kobo or 3.74percent. FBN Holdings Plc followed from N5.8 to N5.6, losing 20kobo or 3.45percent.

ETI Plc decreased from N7 to N6.9, losing 10kobo or 1.43percent, Ikeja Hotel Plc dropped from 97kobo to 88kobo losing 9kobo or 9.28percent, while FCMB Group Plc stock price moved down from day open level of N1.86 to N1.8, losing 6kobo or 3.23percent.

L – R: Olumide Bolumole, head, Listing Business Division, The Nigerian Stock Exchange (NSE); Oye Oyeniyi, head, Membership Committee, Chartered Institute of Stockbrokers (CIS); Abiola Adekoya, chairman Annual Conference Organizing Committee, CIS; Bola Adeeko, head, Shared Services Division, NSE; Dapo Adekoje, President, CIS; Fiona Ahimie, Council Member, CIS; Tunde Amolegbe, 1st vice president, CIS; Oluwole Adeosun, 2nd vice president, CIS; and Olufemi Balogun, head, Market Services, NSE during a Closing Gong Ceremony to commemorate CIS 2019 Annual Conference in Lagos.

FCMB partners Wakanow on convenient, affordable travel package

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ustomers of First C i t y Mo n u m e n t Bank (FCMB) who plan to travel abroad at highly convenient and affordable arrangements now have the opportunity to do so.

This follows a new partnership between FCMB and Wakanow, Africa’s leading online travel agency, for the purpose of offering tourist visa processing, flight bookings, hotel bookings and related travel packages for prospective travelers to countries in Europe, America, Asia, Australia as well as Africa.

The development is aimed at boosting the hospitality business in Nigeria, while also delivering high quality service and satisfaction for the generality of the people.

Already, FCMB and Wakanow have established travel desks at twenty (20) select branches of the Bank across Lagos, Abuja, Rivers, Oyo, Kano,

Ogun, Anambra and Abia States to offer this value-added travel package. It can also be seamlessly accessed on the Bank’s mobile and internet banking platforms.

Speaking at a recent event in Lagos which heralded the launch of the partnership, the Divisional Head, Corporate Banking, FCMB, Folake Fajemisin, described the deal as another demonstration of the dynamism and commitment of the Bank to meet the needs of its array of growing customers.

A c c o r d i n g t o h e r, “ w e recognise that several of our customers travel all-round the year for holidays. Our partnership with Wakanow gives them an advantage. It is essentially borne out of the need to give Nigerian travelers the best offerings possible when making their travel arrangements. Through our

partnership with Wakanow, we are optimistic the objective will be achieved and further enhance the experience of our customers, considering the company’s pedigree and contributions to the hospitality/tourism industry in Africa. As an inclusive and customer-centric Bank, we will continue to innovate ways to impact the lives of Nigerians across segments’’.

On his part, the Chief Executive Officer of Wakanow, Adebayo Adedeji, said, ‘’we are excited to officially launch this partnership with FCMB to bring Wakanow’s travel services closer to our customer base and the public at large. At our desk within the branches of FCMB, customers can conveniently enjoy our travel products which include flights, hotels, prepaid cards and travel Sim and visas to over 50 destinations.

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Wednesday 13 November 2019

BUSINESS DAY

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Wednesday 13 November 2019

BUSINESS DAY

53

Live @ The STOCK Exchanges

Prices for Securities Traded as of Tuesday 12 November 2019 Company

Market cap(nm)

Price (N)

Change

Trades

Volume

Company

Market cap(nm)

Price (N)

Change

Trades

Volume

PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 339,456.90 9.55 3.80 480 73,034,374 UNITED BANK FOR AFRICA PLC 235,976.01 6.90 4.55 307 17,406,132 ZENITH BANK PLC 546,298.99 17.40 1.46 773 86,545,989 1,560 176,986,495 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 201,013.64 5.60 -3.45 317 10,711,292 317 10,711,292 1,877 187,697,787 TELECOMMUNICATIONS SERVICES MTN NIGERIA COMMUNICATIONS PLC 2,484,268.32 122.05 0.04 152 7,300,342 152 7,300,342 152 7,300,342 BUILDING MATERIALS DANGOTE CEMENT PLC 2,508,362.69 147.20 0.96 77 1,301,787 LAFARGE AFRICA PLC. 227,925.31 14.15 -3.74 71 2,408,506 148 3,710,293 148 3,710,293 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 332,471.18 565.00 - 9 7,417 9 7,417 9 7,417 2,186 198,715,839 REAL ESTATE INVESTMENT TRUSTS (REITS) SKYE SHELTER FUND PLC 1,710.00 85.50 - 0 0 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 10,175.81 40.70 - 0 0 UPDC REAL ESTATE INVESTMENT TRUST 11,873.80 4.45 - 0 0 0 0 0 0 OTHER FINANCIAL INSTITUTIONS NIGERIA ENERYGY SECTOR FUND 411.91 552.20 - 0 0 VALUEALLIANCE VALUE FUND 3,312.39 103.20 - 0 0 0 0 0 0 0 0 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 0 0 OKOMU OIL PALM PLC. 50,509.53 52.95 - 32 53,172 PRESCO PLC 34,600.00 34.60 - 9 12,849 41 66,021 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 8,520.00 4.26 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,440.00 0.48 - 15 274,909 15 274,909 56 340,930 DIVERSIFIED INDUSTRIES A.G. LEVENTIS NIGERIA PLC. 741.24 0.28 - 1 1,000 JOHN HOLT PLC. 217.92 0.56 1.82 4 193,916 S C O A NIG. PLC. 1,903.99 2.93 - 4 3,363 TRANSNATIONAL CORPORATION OF NIGERIA PLC 40,647.99 1.00 -0.99 96 15,291,668 U A C N PLC. 18,728.43 6.50 4.84 44 1,185,717 149 16,675,664 149 16,675,664 BUILDING CONSTRUCTION ARBICO PLC. 711.32 4.79 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 24,486.00 18.55 - 26 76,187 ROADS NIG PLC. 165.00 6.60 - 0 0 26 76,187 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 2,520.44 0.97 - 8 46,980 8 46,980 34 123,167 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 7,751.20 0.99 - 2 61,000 GOLDEN GUINEA BREW. PLC. 242.22 0.89 - 0 0 GUINNESS NIG PLC 51,035.92 23.30 - 46 135,180 INTERNATIONAL BREWERIES PLC. 80,801.10 9.40 - 23 25,223 NIGERIAN BREW. PLC. 377,453.78 47.20 1.51 79 36,019,661 150 36,241,064 FOOD PRODUCTS DANGOTE FLOUR MILLS PLC 111,250.00 22.25 - 0 0 DANGOTE SUGAR REFINERY PLC 119,400.00 9.95 - 67 220,174 FLOUR MILLS NIG. PLC. 62,325.77 15.20 - 47 249,370 HONEYWELL FLOUR MILL PLC 8,088.80 1.02 4.08 29 6,365,182 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 766.26 4.30 - 0 0 NASCON ALLIED INDUSTRIES PLC 39,344.16 14.85 - 13 26,000 UNION DICON SALT PLC. 3,321.07 12.15 - 0 0 156 6,860,726 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 16,903.82 9.00 - 27 164,251 NESTLE NIGERIA PLC. 911,554.69 1,150.00 - 114 341,344 141 505,595 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 3 230 VITAFOAM NIG PLC. 4,440.50 3.55 - 6 6,954 9 7,184 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 22,036.15 5.55 - 15 47,964 UNILEVER NIGERIA PLC. 112,602.11 19.60 - 57 373,693 72 421,657 528 44,036,226 BANKING ECOBANK TRANSNATIONAL INCORPORATED 126,611.90 6.90 -1.43 74 1,501,359 FIDELITY BANK PLC 53,023.88 1.83 0.55 102 17,706,827 GUARANTY TRUST BANK PLC. 844,674.84 28.70 0.35 215 37,134,332 JAIZ BANK PLC 16,499.98 0.56 -3.45 33 2,315,522 STERLING BANK PLC. 63,338.92 2.20 - 31 1,223,265 UNION BANK NIG.PLC. 203,845.27 7.00 - 64 1,990,723 UNITY BANK PLC 6,546.03 0.56 -1.75 6 324,432 WEMA BANK PLC. 24,301.91 0.63 6.78 47 3,689,427 572 65,885,887 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 0 0 AIICO INSURANCE PLC. 5,059.05 0.73 1.39 27 2,732,292 AXAMANSARD INSURANCE PLC 17,325.00 1.65 - 6 42,672 CONSOLIDATED HALLMARK INSURANCE PLC 3,414.60 0.42 7.69 3 600,000 CONTINENTAL REINSURANCE PLC 24,479.68 2.36 -0.84 15 2,060,720 CORNERSTONE INSURANCE PLC 7,806.64 0.53 8.16 11 1,593,650 GOLDLINK INSURANCE PLC 909.99 0.20 - 0 0 GUINEA INSURANCE PLC. 1,228.00 0.20 - 0 0 INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 0 0 LASACO ASSURANCE PLC. 1,977.33 0.27 3.85 6 1,178,000 LAW UNION AND ROCK INS. PLC. 2,362.98 0.55 - 9 47,045 LINKAGE ASSURANCE PLC 4,080.00 0.51 - 4 21,050 MUTUAL BENEFITS ASSURANCE PLC. 2,234.55 0.20 - 14 5,055,397 NEM INSURANCE PLC 10,561.01 2.00 - 21 112,127 NIGER INSURANCE PLC 1,547.90 0.20 - 0 0 PRESTIGE ASSURANCE PLC 2,745.10 0.51 - 0 0 REGENCY ASSURANCE PLC 1,400.44 0.21 - 5 96,840 SOVEREIGN TRUST INSURANCE PLC 1,668.16 0.20 - 2 7,500 4,483.72 0.48 - 0 0 STACO INSURANCE PLC STANDARD ALLIANCE INSURANCE PLC. 2,582.21 0.20 - 0 0 SUNU ASSURANCES NIGERIA PLC. 2,800.00 0.20 - 0 0 516.46 0.20 - 0 0 UNIC DIVERSIFIED HOLDINGS PLC. UNIVERSAL INSURANCE PLC 3,200.00 0.20 - 0 0 VERITAS KAPITAL ASSURANCE PLC 2,773.33 0.20 - 0 0 WAPIC INSURANCE PLC 4,282.48 0.32 3.13 20 5,737,562 143 19,284,855

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MICRO-FINANCE BANKS NPF MICROFINANCE BANK PLC 2,515.30 1.10 - 3 8,500 3 8,500 MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 4,200.00 1.00 - 1 4,500 ASO SAVINGS AND LOANS PLC 7,370.87 0.50 - 0 0 5,796.93 1.39 - 0 0 INFINITY TRUST MORTGAGE BANK PLC RESORT SAVINGS & LOANS PLC 2,265.95 0.20 - 0 0 2,949.22 3.02 - 0 0 UNION HOMES SAVINGS AND LOANS PLC. 1 4,500 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 7,800.00 3.90 -1.27 69 3,190,950 CUSTODIAN INVESTMENT PLC 32,350.25 5.50 - 10 79,025 660.00 0.44 - 0 0 DEAP CAPITAL MANAGEMENT & TRUST PLC FCMB GROUP PLC. 35,644.88 1.80 -3.23 86 3,542,370 ROYAL EXCHANGE PLC. 1,029.07 0.20 - 2 139,917 388,565.07 37.10 0.27 28 1,773,925 STANBIC IBTC HOLDINGS PLC UNITED CAPITAL PLC 12,600.00 2.10 - 115 2,789,165 310 11,515,352 1,029 96,699,094 HEALTHCARE PROVIDERS EKOCORP PLC. 1,680.29 3.37 - 0 0 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 852.75 0.24 9.09 4 403,900 4 403,900 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 494.58 0.50 - 0 0 0 0 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 FIDSON HEALTHCARE PLC 7,302.26 3.50 - 16 650,450 GLAXO SMITHKLINE CONSUMER NIG. PLC. 7,534.02 6.30 - 24 279,764 3,381.46 1.96 - 14 154,010 MAY & BAKER NIGERIA PLC. NEIMETH INTERNATIONAL PHARMACEUTICALS PLC 740.67 0.39 - 30 482,519 NIGERIA-GERMAN CHEMICALS PLC. 556.71 3.62 - 0 0 PHARMA-DEKO PLC. 325.23 1.50 - 0 0 84 1,566,743 88 1,970,643 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 745.92 0.21 -8.70 5 986,113 5 986,113 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 1,470.89 0.50 - 0 0 0 0 IT SERVICES CWG PLC 6,413.06 2.54 - 0 0 NCR (NIGERIA) PLC. 486.00 4.50 - 0 0 316.77 0.64 - 0 0 TRIPPLE GEE AND COMPANY PLC. 0 0 PROCESSING SYSTEMS CHAMS PLC 1,127.05 0.24 -4.17 22 3,449,330 E-TRANZACT INTERNATIONAL PLC 9,996.00 2.38 - 1 1,500 23 3,450,830 TELECOMMUNICATIONS SERVICES AIRTEL AFRICA PLC 1,157,510.66 308.00 - 16 176,175 16 176,175 44 4,613,118 BUILDING MATERIALS BERGER PAINTS PLC 2,173.68 7.50 - 12 17,302 CAP PLC 17,010.00 24.30 - 89 2,089,977 CEMENT CO. OF NORTH.NIG. PLC 251,040.87 19.10 9.14 290 8,803,043 MEYER PLC. 313.43 0.59 - 0 0 1,769.32 2.23 - 0 0 PORTLAND PAINTS & PRODUCTS NIGERIA PLC PREMIER PAINTS PLC. 1,156.20 9.40 - 0 0 391 10,910,322 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,256.91 2.09 - 0 0 CUTIX PLC. 2,377.78 1.35 - 19 344,600 19 344,600 PACKAGING/CONTAINERS BETA GLASS PLC. 26,898.49 53.80 - 12 40,962 GREIF NIGERIA PLC 388.02 9.10 - 3 99,996 15 140,958 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 0 0 0 0 425 11,395,880 CHEMICALS B.O.C. GASES PLC. 2,547.42 6.12 - 4 19,492 4 19,492 METALS ALUMINIUM EXTRUSION IND. PLC. 1,781.64 8.10 - 1 50 1 50 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 0 0 0 0 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 83.60 0.38 - 0 0 0 0 5 19,542 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,252.54 0.20 - 2 80 2 80 INTEGRATED OIL AND GAS SERVICES OANDO PLC 41,396.60 3.33 0.60 68 2,178,709 68 2,178,709 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 53,332.04 147.90 - 15 2,910 CONOIL PLC 10,686.86 15.40 - 30 62,018 ETERNA PLC. 3,716.81 2.85 - 13 23,542 FORTE OIL PLC. 20,709.45 15.90 - 30 37,310 MRS OIL NIGERIA PLC. 4,663.23 15.30 - 6 12,000 TOTAL NIGERIA PLC. 41,829.09 123.20 - 19 21,963 113 159,743 183 2,338,532 ADVERTISING AFROMEDIA PLC 1,642.45 0.37 - 0 0 0 0 AIRLINES MEDVIEW AIRLINE PLC 17,551.17 1.80 - 0 0 0 0 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 270.56 0.23 - 0 0 0 0 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 2,623.26 4.45 - 8 39,550 TRANS-NATIONWIDE EXPRESS PLC. 398.52 0.85 - 1 40,000 9 79,550 HOSPITALITY TANTALIZERS PLC 642.33 0.20 - 1 80,000 1 80,000 HOTELS/LODGING CAPITAL HOTEL PLC 4,259.15 2.75 - 0 0 IKEJA HOTEL PLC 1,829.34 0.88 -9.28 4 246,000 TOURIST COMPANY OF NIGERIA PLC. 7,862.53 3.50 - 0 0 41,042.18 5.40 - 1 1,500 TRANSCORP HOTELS PLC 5 247,500 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 4,800.00 0.40 - 1 200 1 200 PRINTING/PUBLISHING ACADEMY PRESS PLC. 205.63 0.34 - 1 160,000 LEARN AFRICA PLC 902.60 1.17 - 5 240,000 1,183.82 1.99 - 0 0 STUDIO PRESS (NIG) PLC. UNIVERSITY PRESS PLC. 616.92 1.43 - 4 26,031 10 426,031 ROAD TRANSPORTATION ASSOCIATED BUS COMPANY PLC 745.97 0.45 - 6 43,994 6 43,994

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BUSINESS DAY Wednesday 13 November 2019 www.businessday.ng

Richard Thaler: ‘If you want people to do something, make it easy’ The master of behavioural economics on the power of the nudge — and why Remain was destined to lose Tim Harford

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dramatically increases when people must explicitly opt out if they are not to be automatically enrolled.

Thaler cultivates a happygo-lucky persona, a man whose own weaknesses help him understand the weaknesses of others. “You assume that the agents in the economy are as smart as you are,” he once told Robert Barro, one of the pillars of the economics establishment, “and I assume that they’re as dumb as me.” Barro was happy to agree with that.

This sunny July, however, Thaler is a model of selfcontrol. “Notice how many nuts I’ve had so far,” he announces, 20 minutes into our conversation. He gestures for emphasis. “Zero.”

I’m not surprised by that, although I am when Thaler — who struck me as a bon vivant — admits that he has been skipping lunch entirely. He’s in London for a fortnight, teaching a course at the London campus of the University of Chicago Booth School of Business, and after a generous breakfast he says he has neither the need nor the time for lunch.

This may also explain his lack of interest in the restaurant itself. We meet at the business school, and he’s chosen the closest place — announcing “it’s me again” to the waitress who stands outside. I don’t even glimpse the interior of The Anthologist, because she promptly directs us to a pavement table, which has a large masonry wall on one side and on the other — if you squint — a view down Gresham Street to a back corner of the Bank of England.

The scooters and trucks roar past a couple of yards away, but Thaler has no trouble making himself heard.

He used to squeeze more out of his annual fortnights in London. “I would spend the morning with the Behavioural Insight Team” — the famous

“nudge” unit established by David Cameron and inspired

by Thaler’s book with the law professor Cass Sunstein — “then come and teach all afternoon. And then half the nights there would be dinners with friends. And I was comatose at the end of the first week.”

He does admit to having a few dinners planned, though — and to timing his visit to coincide with the Wimbledon Men’s Final. He and his wife, the photographer France Leclerc, had Centre Court tickets. Was he a fan of Djokovic or Federer?

“We support Rafa. Although if he had been playing in a match like that it might have got too much for my wife. She would have been hiding somewhere by the fifth set.”

It was the same on election night: the Trump/Clinton contest reduced his wife to a nervous wreck.

“And who were you supporting in that one?” I ask.

He gives me a withering look. “At least credit me with sentience.”

President Barack Obama seemed to appreciate behavioural economics and gave Thaler’s co-author, Cass Sunstein, a senior appointment.

The Trump administration, observes Thaler, has no interest in behavioural economics.

“Look, there’s no demand for expertise of any sort . . . The lack of competence and expertise is like nothing anyone has ever seen.”

Whitehall’s Behavioural Insight Team seems to be displaying more longevity than the White House equivalent.

“The key move they made very early on was to extricate themselves from government.” They’re now a semiautonomous social enterprise in which the Cabinet Office retains a stake. They made that move, of course, before Cameron’s referendum-induced autodefenestration. “I will say that David

Cameron never talked to anybody at the Behavioural Insight Team about the Brexit referendum”.

And what should they have said if he had?

“One thing for sure is Remain is a horrible name.

It’s weak. Whereas Leave is strong.” Thaler has written about the referendum before in the Financial Times.

He reminds me that Theresa May said, before the referendum: “The reality is that we do not know on what terms we would have access to the single market.”

The waiter interrupts us and presses Thaler to order some wine. He waves him away. “No, I have to teach for the next three hours.”

We return to May, and her explanation that a vote to Leave would be a vote for

”

he Anthologist doesn’t serve cashew nuts, so I order a bowl of smoked almonds instead. When they arrive, caramelised and brown as barbecue sauce, I ask for them to be put right in front of Richard Thaler. He protests that the waiter isn’t in on the joke.

The readers will be, I assure him. “The educated ones, perhaps,” he concedes.

Those educated readers may know that Professor Thaler is a Nobel laureate economist, but even more famous as the co-author of Nudge. They may even know — from his later book, Misbehaving: The Making of Behavioural Economics — that the 73-year-old is fond of telling an anecdote about a bowl of cashew nuts that sheds light on his approach to economics.

He served the notorious bowl to some guests while dinner was roasting in the oven, then watched everyone compulsively munch on the nuts and gradually spoil their appetites. So Thaler decided to remove the temptation by hiding the cashews in the kitchen.

His guests thanked him.

It would be an unremarkable tale, except that such behaviour simply does not fit the rational economic model of human behaviour. Either eat the cashews or don’t eat the cashews, says classical economics, but don’t thank the person who moves them out of easy reach.

Reflecting on such stories helped Thaler create “behavioural economics” — a branch of the discipline that aims at psychological realism. Doing so also helped him with the equally difficult task of persuading other economists to take the behavioural view seriously.

True, it’s just a story about cashews — but if you don’t think short-termism and weak willpower are economically significant in the grand scheme of things, I have a payday loan, a pension drawdown scheme and an autorenewing gym membership to sell you.

And, sure enough, Thaler’s ideas about the importance of realistic human behaviour have permeated into the economic mainstream, particularly the study of finance.

His policy proposals have influenced tax collection, organ donation, energy efficiency drives — and most notably pensions, where participation in workplace schemes

You assume that the agents in the economy are as smart as you are,” he once told Robert Barro, one of the pillars of the economics establishment, “and I assume that they’re as dumb as me

something undefined and unknowable. Yet as prime minister, she felt that it was quite sufficient to declare that Brexit means Brexit.

“Brexit means Brexit — that is one of the dumbest statements that has ever been uttered by a head of state. And I’m aware that there are thousands of tweets one could compare it with. I mean, it’s simultaneously meaningless and wrong.”

The waiter finally manages to get us to order something. Thaler goes for a crispy duck salad. “It’s called salad, you know it has at least the illusion of being healthy”. I’m tempted by the Wagyu beef burger but feel ashamed (social pressure means nothing to homo economicus but is a powerful nudge for human beings), so I order some cod with samphire. The waiter is keen to upsell. Spritzer?

Some halloumi?

Thaler and I are baffled by the suggestion of halloumi with cod and duck, although I would have cracked if the waiter had tried to sell us French fries.

We turn to the state of economics, and how it became so wrapped up in the idea of rational agents.

Some of those models have a hypnotic pull, I suggest: they’re so ingenious, so difficult, and once you’ve understood how they work you don’t want to abandon them in favour of the bowlof-cashews guy.

I’m recalling a time I was reading a classic article by Barro — in the emergency room, having dislocated my jaw after a spectacular yawn, which I protest was unconnected to the research paper in question.

I don’t get far. “ You should change this story!” hoots Thaler. “It should be that you read this paper and, literally, your jaw dropped.”

It’s a reminder that Thaler is a storyteller as well as a sharp theorist. Misbehaving is full of stories.

“I decided to just start writing things that would amuse me,” he says — including an account of a huge academic bunfight over the allocation of corner offices at the University of Chicago economics department that cannot fail to provoke Schadenfreude. “I sent that to my friend Michael Lewis. I said, ‘How much of the book could be like this?’ and he said ‘All’.”

Lewis isn’t a bad sounding board: he’s the author of Liar’s Poker, Moneyball and The Big Short. He also wrote a biography of Thaler’s friends and colleagues, the psychologists Daniel Kahneman and Amos Tversky. I wouldn’t mind getting him to look over my first drafts.

When it arrives, the cod is pleasant enough, but there isn’t much of it. I’m regretting not ordering the fries.

The smoked almonds look tasty, but they’re across the table sitting beside Thaler’s left hand. He hasn’t so much as twitched towards them.

Th e ke y m e s s a g e o f Nudge was that governments could improve the health and wellbeing of their citizens without infringing on their liberty, simply by more thoughtfully designing their rules, procedures, or even labelling.

“If you want pe ople to do something, make it easy.” Put the cashews in the kitchen and the fruit by the cafeteria checkout.

More recently, Thaler has been thinking and writing about what he calls “sludge”.

It’s the same procedure in reverse: if you want people not to do something, make it difficult.

Reaching for an example, Thaler has a bone to pick with The Times. The first review of Misbehaving was published there, and Thaler’s editor sent him a link.

“And I can’t get past the paywall without subscribing.”

But then he notices there’s an offer of a month’s trial subscription at an introductory rate. “But I read further, having written a book about this, and I see that it will be automatically renewed.”

Not only that, it will be renewed at full price, “and that in order to quit, I have to give them 14 days’ notice.

So the one month free trial is actually two weeks. And I have to call London [from Chicago] in London business hours, not on a toll free line.”

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