BusinessDay 14 Nov 2019

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news you can trust I **THURSDAY 14 NOVEMBER 2019 I vol. 19, no 435

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Registrars frustrate SEC’s effort as unclaimed dividends hit N126bn T

ignore 3-day timeline to process e-dividends as investors wait up to 3 months for feedbacks

Iheanyi Nwachukwu

he effort of Nigeria’s Securities and Exchange Commission (SEC) to either eradicate or reduce to the barest minimum the incidence of unclaimed dividend is being stifled by interests of some share registration companies.

Till date, unclaimed dividend remains one of the undesirable features of the Nigerian capital market as it denies investors/ shareholders the gain of participating in the capital market.

SEC makes effort to eradicate unclaimed dividends The electronic-Dividend Mandate Management System is one of such initiatives by SEC to eradicate

or reduce unclaimed dividend because the e-dividend payment system allows investors’ accounts to be credited immediately they are mandated with the registrars and the relevant banks.

Unclaimed dividend still increasing The value of unclaimed dividends rose from N5.1 billion to N103.1 billion between 2002 and

November 2016, compared with the value of N2.09 billion in 1999.

As at September 2018, unclaimed dividends remained high at N100 billion, and rose to N126.03 billion as at March 2019 despite the mechanisms put in place by the SEC to address the issue of the rising value of unclaimed dividends.

E-dividend system and how Babatunde Fashola (2nd l), minister of works/housing; Abubakar Aliyu (l), minister of state in the ministry, and ministers from other member countries of the Trans Sahara Road Liaison Committee being briefed by Ishaq Mohammed (r), director, road sector development team of the Ministry of Works and Housing, at the inspection tour of the ongoing construction work on the expansion of 5.4Km of AbujaKeffi Expressway and dualisation of Keffi-AkwangaLafia-Makurdi Road in Nasarawa State.

Nigeria yields slide to 3-year low as Emefiele’s gambit pays off

it should work All registrars’ offices/accredited outlets are points of upload of completed e-Dividend Mandate forms by investors who may alternatively approach their banker to process their completed eDividend Mandate Form(s).

Every registrar is expected to

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Abusive words, discrimination, ethnic hatred now ‘hate speech’, according to Bill …as Nigerians in diaspora raise alarm …FG disowns proposed death penalty

SOLOMON AYADO, TONY AILEMEN, Abuja, & ENDURANCE OKAFOR, in London

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thnic hatred, discrimination and use of abusive words against any person or persons from an ethnic group in Nigeria are major infractions that can be regarded as hate speech for which the Senate is proposing death penalty.

Other acts that can be regarded as hate speech include use of threatening words intended to stir up hatred.

A Bill to establish a Commis-

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Inside

…unleashes N2trn in demand for T-bills …firms to borrow cheaper, stocks may gain Nigeria requires $900m ernment debt.

Wednesday, 91-day and 182-day LOLADE AKINMURELE & OLUWASEGUN OLAKOYENIKAN

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he interest rates on Nigerian Treasury Bills have collapsed to within single digits for the first time since 2016 and that may be only the beginning of a lengthy slide.

At a primary market auction

bills fell to 7.8 percent and 9 percent, respectively, the lowest rate since June 15, 2016, while the rate on the 364-day bill crashed to 10 percent, the lowest since 2015.

Buying interest from the pension funds and insurance companies and other non-bank investors fuelled the rate crash,

MARKETS

as they are now banned by the Central Bank of Nigeria, under Governor Godwin Emefiele, from purchasing short-dated bills issued by the apex bank, otherwise known as OMO bills.

Traders tell BusinessDay they are now rotating into gov-

“The CBN’s OMO ban for nonbank institutions has rendered some N2 trillion idle with almost nowhere to go for now but into Treasury-bills, and that’s why rates are crashing,” a money manager who did not want to be named

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to close electricity metering gap P. 2

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Thursaday 14 November 2019

BUSINESS DAY

news FEC approves increase of Nigeria’s share capital in IBRD to 3,230

L-R: Mariam Katagun, minister of state for industry, trade and investment; Uchechukwu Ogar, minister of state for mines and steel development, and Zainab Ahmed, minister of finance, at the Federal Executive Council meeting at the Presidential Villa in Abuja, yesterday. NAN

....value of capital now $50.6m Tony Ailemen, Abuja

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Nigeria requires $900m to close electricity metering gap …as tariff, NEMSA charges constitute new obstacles ISAAC ANYAOGU

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igeria’s Electricity Supply Industry requires about $900 million to meet its electricity metering gap, operators have said.

At a panel session at the 2019 Future Energy Nigeria conference devoted to discussing the Meter Asset Provider regulation unveiled by the Nigerian Electricity Regulatory Commission (NERC), Michael Onuorah, programme manager at Mojec International, citing studies by operators, said between $700 million and $900 million was required to close a 6.2 million metering gap in Nigeria.

The MAP regulation issued by NERC took effect in May 2018 to fast-track the roll-out of end-use meters through the engagement of third-party investors for the financing, procurement, sup-

ply, installation, and maintenance of electricity meters.

The programme first ran into troubled waters when the Ministry of Finance reviewed upwards the import levy on electricity meters from 10 percent to 45 percent this year and the Nigerian Customs Service began immediate implementation of the tariff.

The consequence is that the Meter Asset Providers are unable to clear the meters at the ports as the new tariff has made their market projections obsolete. Some of the meter providers too are cash-strapped and unable to fulfil orders for meters.

According to Onuorah, this situation is further complicated by the decision of the Nigerian Electricity Management Services Agency (NEMSA), the body required to certify meters, to raise the cost of certifying meters by 33 percent and impose on operators the burden of

sealing the meters to forestall tampering.

NEMSA charges about N430 for a batch of 10 meters they certify for DisCos. However, since MAPs regulation came into effect, this government agency has hiked the cost of testing by N130 for each meter tested.

This does not look like a significant increase but a meter provider who has to certify 100,000 meters could find himself paying additional N13 milion that was not captured in his projections and for which he will not be repaid from the market as the meter cost is fixed.

Prior to NEMSA raising the charges for certifying meters, the agency also carried out sealing of individual meters to avoid tampering by customers, but it has also passed on the functions to the meter providers who say it means additional costs as they now have to hire people to undertake this task.

he Federal Executive Council on Wednesday granted approval for the additional share capital granted Nigeria by the International Bank for Reconstruction and Development (IBRD), an arm of the World Bank Group which offers cheap loans to middle-income developing countries.

Zainab Ahmed, minister of Finance, Budget and National Planning, while presenting a memo on additional capital increase for Nigeria by the IBRD, announced that prior to now, Nigeria had a share capital of 1,687 shares at the IBRD. FEC approved the new capital increase which was earlier adopted in October

“This situation has made the operating environment challenging for us,” said Onuorah.

Continued from page 1 But this situation creates an opportunity for local validate an investor’s Sharemeter assembling firms who holder Account Number, are only charged 5 percent Name, Signature and Clearduty for importation of semi ing House Number (CHN). knocked-down components This is followed with upload (SKDs) required to assemble of scanned copy of completed e-Dividend Mandate meters.

Local meter ‘manufac- Form(s) on to the portal for turers’ in Nigeria merely immediate access by the assemble SKDs for two- and investor’s nominated bank three-phase prepaid meters; for the verification of his/ they also carry out injunction her bank account details.

Registrars are to exercise moulding for the manufacture of meter boxes that are caution when validating mountable on electricity names generated by the syspoles, and assemble SKDs tem for the Clearing House Number, Shareholder Acinto metal boxes.

Representatives from lo- count Number and Bank cal meter assembling plants Account Number against the physical form to ensure at the conference said the there is a reasonable level of new tariff is not making life congruence before the docueasy for them as demand is ment is accepted and saved far higher than supply. on the portal.

Investors are to be edu•Continues online at www.businessday.ng cated to complete separate forms for each shareholder account number, as upload of e-Dividend Mandate Forms is to be on the basis their numbers on the social media of individual shareholder platform to express their opposi- number and company of tion to the bill, making the word investment indicated by ‘Nigerians’ to be among the most the investor on the physical e-Dividend Mandate Form. trending words on UK twitter.

The receiving bank may “Hate speech is the problem of reject the mandate uploaded Senator Aliyu,” a UK-based Nigeby presenting registrars if the rian tweeted. “This man needs to signature on the mandate be recall, before he grows wings does not tally with the specito propose a bill to checkmate the men signature of the account amount of oxygen we are breath- holder in the bank. ing in.”

To mitigate errors in the There is “no death penalty for treatment of e-Dividend those looting the nation dry, no Mandate Forms, registrars penalty at all, but death penalty for are to institute a marker‘hate speech’?” another tweeted. checker system that enables “This is no more democracy, the verification and upload no more,” Kingsley Efe (not real of e-Dividend Mandate names), a London-based Nigerian, Form(s) by a registrar uploader subject to confirtold BusinessDay on Wednesday.

Besides hate speech, the bill mation and approval by a points out other culpable acts registrar checker.

Where banks upload esuch as ethnic discrimination, Dividend Mandates to regContinues on page 42 istrars for investor detail

Registrars frustrate SEC’s effort as...

Abusive words, discrimination, ethnic hatred now ‘hate speech’, according to Bill Continued from page 1 sion for the Prohibition of Hate Speeches passed first reading in the Senate on Tuesday. The bill was first introduced by the 8th Senate but was not passed to become law.

The re-introduction of the bill in the 9th Senate, sponsored by the Deputy Whip of the Senate, Aliyu Sabi Abdullahi (Niger North), is aimed at instituting stiffer penalties to curb the ugly trend of hate speech.

Specifically, the law is purportedly being proposed to regulate unwarranted acts by persons who often display acts to cause disrelish.

The proposed law, exclusively obtained by BusinessDay, further considers publishing of any material, presentation or play of any performance, as well as production and distribution of written or visual materials to spark disaffection as hate speech.

According to the bill, hate speech can be regarded as when “a person uses, pub-

lishes, presents, produces, plays, provides, distributes and or directs the performance of any material, written and or visual which is threatening, abusive or insulting or involves the use of threatening, abusive or insulting words or behaviour”.

“A person commits an offence if such person intends to stir up ethnic hatred, or having regard to all the circumstances ethnic hatred is likely to be stored up against any person or person from such an ethnic group in Nigeria,” the bill said.

The bill further explained that “ethnic hatred means hatred against a group of persons from any ethnic group indigenous to Nigeria”.

Following the bill’s passing of first reading on Tuesday, Nigeria began to trend on twitter in the United Kingdom the country’s citizens in diaspora raised the alarm over the proposed law.

Nigerians in the UK came out in www.businessday.ng

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2018, raising Nigeria’s capital to 3,230 shares both for general and selected capital increase.

Briefing State House correspondents after the FEC meeting, the fourth consecutive weekly FEC presided over by Vice President Yemi Osinbajo, Ahmed said the increase brings Nigeria’s share capital at the Bretton Woods institution to a total of $50,637,747.60.

The additional subscription is necessary to strengthen the country’s position in the global financial architecture, she said.

The minister also formally announced that Nigeria is now a middle-income country based on its Gross Domestic Product GDP of $397bn and per capita income of $1,960.

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validation, such mandates must be confirmed by the receiving registrar authoriser within 72 hours (three days) of transmission by the presenting bank authoriser.

Shareholders’ experience Jide, a shareholder who owns stocks in MTN Nigeria and Dangote Cement for which United Securities are their registrars, shared details of his frustrating experience trying to get electronically mandated for dividends he is due by the registrar and the back and forth e-mail messages between his stockbrokers and United Securities Registrar.

The shareholder filled his e-Dividend Mandate Forms in early August this year (2019), which was stamped by his bank (GTBank) and uploaded to the NIBBS portal. The forms were then taken to his stockbrokers who scanned them and sent to Central Securities Clearing System (CSCS) and the registrar.

However, the registrar (United Securities) demanded a ‘so-called’ signature specimen form. The shareholder returned to his stockbroker and filled the form in mid-August which were duly scanned and passed on to the registrar.

Two months later (October) after numerous back and forth between the registrar and his stockbrokers who were trying to confirm the status of his e-dividends, the registrar responded to a mail saying: “We are pleased to inform you that your mandate has been processed and confirmed on the NIBSS portal by your bank; however, we were unable to process your e-man-

Continues on page 42

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news

Sokoto to host Nigerian Guild of Editors’ conference 2019

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he 2019 All Nigeria Editors’ Conference (ANEC), the annual flagship conference of the Nigerian Guild of Editors (NGE), will hold at the international conference centre, Sokoto, from Wednesday, November 27 to Sunday, December 1.

Acting president of the Guild, Mustapha Isah, said Governor Aminu Waziri Tambuwal had confirmed the readiness of Sokoto State to host this year’s ANEC as a mark of his strong belief in the media as a strategic partner in nationbuilding and strengthening of the nation’s democratic structures.

The theme of this year’s conference is: A Distressed Media: Impact on Government, Governance and Society.

The keynote speaker is Gbenga Adefaye, a multiple-award winning editor, Fellow of the Guild and currently Editor-inChief of Vanguard newspapers.

This year’s ANEC, the 15th in the series, would be chaired by former Governor of Ogun State, Aremo Olusegun Osoba.

Osoba is a widely travelled journalist of repute and the first Nigerian journalist to win the Nieman Fellowship for

Journalism at Harvard.

Other speakers include John Momoh, founder/CEO of Channels TV, Nduka Obaigbena, publisher Thisday newspapers and chairman of Newspaper Proprietors’ Association of Nigeria (NPAN), Mr. Dapo Olorunyomi, Publisher Premium Times, representatives of Broadcasting Organisations of Nigeria (BON), Advertising Practitioners Council of Nigeria (APCON), etc.

A statement signed by the Publicity Secretary of the Guild, Ken Ugbechie, said the theme was chosen to reflect the prevailing realities and challenges in the Nigerian media.

The statement stressed that the theme was informed by an urgent and compelling need for editors and other stakeholders in the society to examine the state of the media which has in recent years come under inclement economic and regulatory circumstances.

In explaining the reason for the focus on the media, the Acting President said: “The choice of this year’s conference is deliberate. The Nigerian media is distressed and its capacity to play the watchdog role in society is being eroded and

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challenged on several fronts and by multiple factors. We have reached the point where all media stakeholders must come together to seek answers to the many questions and puzzles that threaten media practice in Nigeria.

“We have carefully assembled the crème of outliers in the profession drawn from print, broadcast and new media to share their thoughts and perspectives with Nigerian editors so that collectively we can proffer solutions to our challenges,” Isah said.

ANEC was first held in 2004 at Ada, in Osun State. Since then, it has been held in different parts of the country. It brings together no fewer than 400 editors and other media professionals from all over the country and beyond to focus on a designated national issues that affect the future and wellbeing of our country.

The conference also attracts foreign speakers and editors from organizations such as the West Africa Editors Forum (WAEF), the African Editors Forum (TAEF), the World Editors Forum (WEF) and the World Association of Newspapers (WAN).

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news

Nigeria to get first AI book for elementary schools … as DSN moves to create one million AI specialists in 10 years Jumoke Akiyode-Lawanson

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n furtherance of its vision to democratise Artificial Intelligence (AI) and position Nigeria as a future global powerhouse in the fourth industrial revolution, the convener of Data Science Nigeria (DSN), Olubayo Adekanmbi, has released a first-of-its-kind book that simplifies AI for primary and secondary schools pupils.

This effort is in alignment with DSN’s roadmap to build a community of one million talented AI specialists in Nigeria during the next 10 years, which will position Nigeria as one of the top 10 AI talent destination in the world, with significant GDP multiplier across all industries.

The book is an effort towards AI knowledge democratisation as it simplifies the concept of artificial intelligence in a friendly manner for the young ones, with a view to stimulating their curiosity and drives their interest in learning about AI. The book starts with generic introductions to the core concepts including machine learning, deep learning and reinforcement learning, and then introduces step-by-step programming using the Python programming language.

“My intention is to go beyond the traditional code-first approach and motivate readers

by helping them to understand what the knowledge of coding can do particularly in AI as a way to build an application-focused mindset,” the author said.

The book is driven by a sense of higher purpose to catalyse nationwide capacity building with the skills of the future.

Adekanmbi says, “By creating pervasive knowledge across the country, we will open opportunities for every Nigerian to build the skills of the future.

I believe that Nigeria’s population of 200 million, with median age of about 18 years, is a huge strategic advantage that will position Nigeria as one of the top 10 AI knowledge centres in the world, especially if we proactively re-tool and reskill our young ones with relevant skills that can drive increased employability, foreign exchange inflows, AI-enabled start-ups, and enhance the general quality of life through solutionoriented AI applications in health, agriculture, financial inclusion, smart cities, and more. This will greatly benefit lives of Nigerians, starting with those who train as data scientists and artificial intelligence specialists.”

With this book, Nigerian students who want to learn Big Data, Data Science, Machine/ Deep Learning and other advanced analytics tools can now

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access to easy-to-understand simple learning materials with relevant practical exercises.

The book is fully supported by Softcom, and will be distributed free in Nigerian schools.

Adekanmbi is an experienced hands-on data scientist, doctoral researcher and business leader with 20 years of experience.

He has led the DSN nonprofit vision, which in the last two years of operation has distinguished itself with its transformational initiatives including the 1st Intercampus Machine Learning competition that involved over 10,000 students from 95 universities and polytechnics, dedicated Artificial Intelligence Community Hub, AI Summer Schools for Kids, AI Masterclass sessions for top business executives in Nigeria, industry-oriented hackathons, Learningbased Kaggle competitions, a Mentorship programme, development of Nigeria-centric Machine Learning/Deep learning curriculum/online learning platform, AI+ Clubs in secondary schools, and its highly successful all-expensespaid Artificial Intelligence Bootcamp.

The book will be unveiled at the annual Artificial Intelligence Summit, scheduled to hold on Tuesday 19 November 2019 in Lagos.

‘Undue interference discouraging banks from agric funding’ … recommends minimal collateral for agric loans RAZAQ AYINLA

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anaging director of Standard Chartered Bank, Lamin Manjang, says agriculture may not be adequately funded in Nigeria in as much as the government unduly interferes in how the agricultural funds are managed by the bodies saddled with the responsibility of managing various agricultural financing programmes.

Manjang says undue bureaucracy and unnecessary bottlenecks being created by either the government or its officials in the whole ecosystem of agricultural value chain and funding constitute a major drawback to the effective funding meant for agriculture, saying such a trend repels financial institutions from providing tangible funds for agriculture.

Speaking at the first quarterly lecture of the Africa Centre for Excellence in Agricultural Development and Sustainable Environment (CEADESE) held at the Federal University of Agriculture, Abeokuta (FUNAAB) on Tuesday, Manjang notes that potentials of agriculture must be harnessed by the Federal Government through a welldesigned funding initiative.

The managing director, who

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spoke ‘Making Agricultural Funding Work in Nigeria,’ says Nigeria has the largest economy in Africa with a Gross Domestic Product (GDP) of $397 billion and noted that the country’s GDP could grow at near double digit with the right economic policies via robust investment in agriculture as the sector requires more stakeholders’ training, funding, better mechanisation, good road infrastructure, transportation system and year-round storage system in order to realise full potentials of the sector.

“The agricultural sector has the capacity to generate more employment opportunities, contribute more substantially to the GDP of the nation and become a strong source of foreign exchange earnings if well harnessed.

“The relevant government agencies and participating financial institutions should demonstrate greater commitment and focus on these agricultural funding programmes as tools for economic growth.

More funds, including investments in data mining, technology and effective strategies should be deployed to make them work,” he said.

According to him, “Administrators of the schemes and

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participating lending institutions should create a framework to simplify and make it easier for all value chain players to access credit with minimal collateral requirements. This rides on the back of an improved credit culture based on some of the policies of the Central Bank of Nigeria to encourage and strengthen good credit behaviour.

“There should be greater autonomy for relevant bodies managing the agricultural financing programme. Undue government involvement and bureaucracy constitute a major drawback for such programmes. This leads to apathy of participating financing institutions and the lack of discipline and commitment of beneficiaries, impacting both uptake and repayment.”

Manjang believes, “There should be greater awareness for the various funding programmes for agriculture.

These programmes have remained largely under-reported. Participating financial institutions and the relevant government agencies should invest more in enlightenment campaigns through trade unions, associations and cooperative societies. This will deepen penetration.”

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RESEARCH&INSIGHT

In association with

A WEEKLY PUBLICATION OF BUSINESSDAY RESEARCH & INTELLIGENCE UNIT(BRIU)

briu@businessday.ng

08098710024

Changing trends in global labour force people (11 per cent)were contributing family workers and 99 million people representing 3 per cent, were employers; all of whom are subsumed under 61 per cent informal workers and 39 per cent formal workers.

No less than one quarter (1/4) of workers in low and middle income countries lived in extreme or moderate poverty, 16 per cent were moderately poor and 74 per cent were categorised as “not poor”.

Employment growth continued to decline as it is currently at 1 per cent in 2018. Labour force growth on the other hand slowed to 1.3 per cent between 2013 and 2018: a projection to fall even further to 1.1 per cent by 2030.

“In general, employment growth cannot persistently exceed labour force growth because otherwise the employed population would eventually be larger than the labour force, which by definition

ADEMOLA ASUNLOYE

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owadays, paid work is the main source of income for the vast majority of households across the world; hence, organisation of work can help to reinforce the core principles of equality, democracy, sustainability and social cohesion. With an estimated 7.74 billion people in the world, there is need to “promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all”, Sustainable Development Goal (SDG) 8.

The number of workers living in extreme poverty has declined dramatically over two decades, despite the lasting impact of the 2008 economic crisis and global recession. However, as the global economy continues to recover, we are seeing slower growth, widening inequalities, and inadequate jobs to keep up with the growing population.

In developing countries, the middle class makes up more than 34 percent of the total employment—a number that has almost tripled between 1991 and 2015.

The least developed countries experienced annual Gross Domestic Product (GDP) growth rate of less than 5 per cent over the past five years, which means they have fallen short of the SDG 8 target of at least 7 per cent growth per annum.

Not more than 3.5 billion people (45.51 per cent) of the of the circa 7.59 billion people in the world are in employment in 2018; an insignificant 0.05 negative percentage change from the 7.51 billion people in 2017. Within the last 8 years, population growth had increased at an average rate of 1.17 per cent while global labour/work force at an average rate of 0.01 per cent; whereas, the ratio of the work force to the population had remained at an average of 45.46 per cent within the same period.

Analysis on the gender gap in labour statistics showed that the gap in labour force participation remains wide as the labour force continues to expand.

Progress has been made in closing the gender gap participation rates until it stalled after 2003.

According to a report from International Labour Organisation (ILO) 2019, the global gap in labour force participation rates between women and men stood at 27 percentage points in 2018. This is

less than half of all the working-age women (48 per cent) that participated in the labour market; whereas, three-quarters of men (75 per cent) participated in the labour market in the same year.

The gender gap has been narrowing over two decades, mainly because the decline in the participation rate for women between 1993 and 2003 was much smaller than that for men.

Across the countries in 2018, there have been deficits of decent work as many took up unappealing jobs that were characterized by low pay, even as they experienced financial dissatisfaction, financial stress, unequal opportunities, financial insecurity, subjective economic wellbeing, substandard living, dissatisfaction with material possessions, economic deprivation, and economic insecurity, among others.

The global working-age population from 15 years and older across gender was 5.7 billion in 2018—out of which 172 million people (5 per cent global employment rate)were unemployed and 3.3 billion people (57.89 per cent) were in employment. These figures added up to the tune of 3.5 billion global labour force which represents a labour force participation rate of 61.4 per cent.

The remaining 2.2 billion people (38.6 per cent) of working age were outside the labour force. They include those engaged in education, unpaid care work and those in retirement. Within this group, 140 million people comprising 85

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million women and 55 million men were categorised as potential labour force— people who are looking for a job but are not yet available to take up employment, or who are available but are not looking for a job.

Of the 3.3 billion that were employed in the year under review, 1.72 billion people (52 per cent)were waged and salaried workers, 1.12 billion people (34 per cent) were own-account workers, 360 million

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is not possible”, according to the World Employment Social Outlook 2019.

Labour market challenges vary across countries and regions despite the continued decrease in the global unemployment rate. Consequently, there is need to achieve sustainable development through the fostering of production, innovation, and optimisation of resource efficiency, as well as prioritising the wellbeing of the less affluent.

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comment is free

comment If Lagos should RUN…and our ministers and the truth!

Send 800word comments to comment@businessday.ng

ik MUO

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ometimes in September 2019, I left Olabisi Onabanjo University at 3pm, hoped to get to Lagos around 5pm but I was on the road till 11pm! That day, I spent 3 hours at Shagamu. On 8/11/19, I came in from the East, got to Ijebu-Ode around 11am but I could not get to Lagos until 4 hours later. Ijebu-Ode to Lagos ordinarily takes 1 hour. On 9/11/19, I left Kingsway Road Ikoyi around 8pm, got to Carter Bridge within 15 minutes but I was in traffic for 2 hours on Carter Bridge without covering up to 500 meters.

Of late, moving into, out of or within Lagos has become an impossible task.

The government (federal and state), just got up one morning and decided to construct all the roads in and around Lagos simultaneously and they are doing so at a snail-speed. Thus, Lagos to Ibafo, Oworonsoki-Anthony-Oshodi-Cele route; the Aponpon axis in the Island, the Agege Motor Road and Badagry expressway are all under construction.

All these entail total and partial closure of roads. Unfortunately, the Ikorodu to IjebuOde and Shagamu routes cannot be described as roads even by the most charitable commentator. It was when I was thinking about these, as I was stranded on Carter Bridge on 9/11/19, that I remembered an article with the above title which I wrote in 2002. (See Ik Muo, if Lagos should Run, The National Interest (of blessed memory), 8/3/02, p11). Whenever I resort to my archives, I want you to determine for yourself how far we have progressed or regressed as a nation. So, read on.

During the Biafran war of self-preservation, a town is said to have “RUN” if it was overtaking by the rampaging and brutal federal troops. Frightened and displaced residents clutching their miserable possessions, with their mal-

nourished and Kwashiorkor-friendly kids in tow, would troop to any village as far as their strength would allow, where they become refugees. It was then common to say that Town X or Town Y “a gbago oso” (had run). I recalled this scenario about 4 years ago (1998) and wondered what it would look like if Lagos should RUN! In fact, I started this article then but it became an abandoned project.

That was the day one container fell on a car at the stadium flyover, Surulere (as they still do in 2019)! Somebody had invited me for a chat at his office in Surulere and I had promised to be there within 30 minutes. Everything was moving smoothly until I got to Alaka Bus-Stop.

What I saw defied any form of explanation or rationalisation. Everybody was driving in every direction, blaring their horns, with their full and hazard lights on, making U-Turns and literarily throwing all driving principles and practices, and even common sense, upside down. This was caused by drivers from Ojuelegba (mostly commercial busses) taking over both sides of the road and forming about 10 lanes. The oncoming vehicles did not have the good luck of even a single lane and as a result, CHAOS became manifest. When I got to Surulere around 9pm (the journey started around 3.30pm), my friend had gone home for the day and I returned home at Okota around 12 midnight because the single stadium madness affected all parts of Lagos.

Even without an extreme traffic crisis like this one, just try and observe the traffic situation at Mile 2, Ojota, Oshodi, CMS or Ago-Palace way, at either 7am or 7pm, Monday to Friday and imagine what would happen if a whistle were blown and everybody asked to get out of Lagos. If this happens, you will be sure that nobody will leave because nobody will allow anybody else to leave! This will be due to gross indiscipline, disregard for traffic rules and I before others mentality which makes common sense, very scarce.

There is poor road network with limited exit routes (and Lagos-Ibadan Express Way has been taken over by Churches, which always disperse when the road is at the busiest. Other factors include self-imprisonment with barricades in the name of security, lack of

emergency and crises management skills, institutions and awareness, too many vehicles on the road (some are vehicles only in name), excesses of the drivers, policemen who will run away before anybody and of course, area boys who will mount toll gates every inch of the way. I prayed that Laos would never have to “run” even though I had a feeling that it was a possibility though with a low probability.

However, on 27/1/02, it happened!

An act of men (carelessness, sabotage, mischief, negligence power-play) led to a horror that affected only a small part of Lagos (The Ikeja bomb blast) and more people died in the process of trying to escape than by the actual explosion.

May be, I was lucky. I was returning from IgboUkwu development Union meeting and saw people driving furiously along the Ago-Palace at around 6.45pm on that day and when nobody could tell me the why, what and where of the run, I decided to drive on and got home in one piece.

That was partly because I remembered one day when I missed my way and made a U-Turn and immediately all the vehicles behind me automatically made U-turns.

It is in our character as Lagosians. Panic and confusion took over the land as people ran without knowing what they were running from or where they were running to; public information was poor as all sorts of frightening speculations had free reign; security agencies were as usual caught napping and coordination as haphazard.

Even as I write this 12 days later, it has been a theatre of the absurd. The national mourning was half-heartedly declared and there was no evidence of its observance; the presidential relief committee is based in Abuja, about 1000km away from the “war-front”, relief efforts are not being properly coordinated as various bodies and organs appear to be pursuing different relief agenda and even the ethics of distributing the materials is a very big issue.

The wind has blown and we have seen the anus of the foul. Our tendency to run whenever others are running, the insensitivity and lackadaisical attitude of government agencies, the absence of any serious emergency management system, poor maintenance culture and lack of

‘

The wind has blown and we have seen the anus of the foul.

Our tendency to run whenever others are running… are the root causes of this self-inflicted injury and as in our character, we will soon forget about the incident and life goes on

attention to potentially dangerous issues are the root causes of this self-inflicted injury and as in our character, we will soon forget about the incident and life goes on.

We will not learn any lessons from the sad incidence; we will not even know the real causes of the calamity; nobody will be cautioned for criminal negligence or nonperformance and nothing will be done to make us better equipped to handle this kind of emergency in future.

What happened was very monumental but we will still count ourselves lucky.

What if Nigeria had been “Afghanistanised” and bombs exploded simultaneously at Oshodi, Orile, 3rd mainland bridge, CMS and Ojota? What if we had an earthquake which many countries “enjoy” regularly? What if the Mozambican flood had “visited” us? We thank God that all the armouries in Lagos did not explode on that day, for the rapid response of local divers who were not waiting for orders from above and were not grumbling over unpaid salaries; that it happened on a Sunday when many schools and offices were closed and Oshodi was not so busy, for our unusual ability to absorb all sorts of shocks, for the members of the international community who literally wept more than the bereaved and for the Red Cross unfettered by officialdom and the ever-generous Nigerians that donated and donated So, almost 18 years later, what will it look later of Lagos should RUN? Other matters: Buhari’s ministers and the NEW truth About 2020 years ago, Pilate asked Jesus Christ, that amateur carpenter from one small village and who confounded the great religious leaders and lawyers of his days, what is truth? (John, 18:38) In this year of our Lord 2019, one of my colleagues. Professor Abosede believes that there are three sides to the truth: my side, your side and the other side. I have not interrogated the matter myself or asked him whether it is possible for these three sides to conjoin.

Note: The rest of this article continues in the online edition of Business Day @https://businessday.ng Dr Muo is of the Department of Business Administration, OOU, Ago-Iwoye

Deeper networks & relationships: How non-profits can increase their social impact “If you want to go fast go alone. If you want to go far, go together.” – African Proverb on-profit organisations are an important element of society. Their roles besides advocating for the vulnerable and effectively filling gaps which neither government nor for-profit organisations cannot fill include influencing policies and programs for the common good of everyone. There are a number of hindrances to attaining their objectives. Although most blame their inadequacies on a lack of funds, they may be overlooking an important aspect of running a sustainable non-profit which is forming meaningful relationships.

Many non-profits having impact still, suffer cash flow problems but are able to deliver credible results. What they lack in finance, they have gained in well structure governance, clarity, local knowledge, skill and change in focus from growing themselves to building partnerships with like-minded donors and peers. Interestingly, a non-profit that seeks to have an impact does not need to be large. It can be small with a focused system that allows it to expand its reach and even gain a wider source of financing.

Here are some of the ways these organisations can build relationships to increase their social impact.

Seek collaboration not competition: While competition exists across all sectors, the case is slightly different with not-for-profits. These

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organisations consistently compete against each other. They compete for donors, grants, and volunteers. They compete for the public’s attention to get their vision supported. But they can form partnerships amongst themselves for the greater good. There are benefits attached to this. One is the possibility of a diverse skillset and experiences which will make room for a great think tank. Also, funders will be happier to donate to organisations that have come together to pursue similar causes knowing that donations will be better utilised. And if the partnership is well managed, there will be reduced cost, a stronger alliance, increased opportunities and sustained effort.

A partnership with another organisation offering complimentary services is a good idea too.

For instance, one working for the sexually abused can team up with another offering free legal service for sexual assault victims. This way there is an expansion in value proposition when seeking partnerships with corporate organisations.

Although forming partnerships is critical to the success of a non-profit’s vision, managers, among other things should consider compatibility, role definition, and a mutually beneficial relationship.

Seek partnerships with for-profit organisation: Another way these managers can utilise networking is to seek partnerships with for-profit organisations. Corporate organisations now need more than just revenue to thrive. With the recent boom in consumer awareness, companies need the goodwill that investing in corporate social

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responsibility programs bring as evidenced in the CSR reports they publish and the sustainability practices they now adopt. As always, these companies seek non-profit partners whose values align with theirs, and with whom they can leverage on their existing capacity in terms of relationship with the target population they wish to reach, a robust volunteer pool as well as expertise.

Non-profits can use this to their advantage, in a manner that their proposal to these companies presents a symbiotic long-term relationship. However, they must be well-positioned. It is important to state that for-profit and non-profit partner structure does not have to be a funder-fundee relationship, where the latter consistently solicits for funds or the former imposes its interest. Nonprofits can provide services to these companies and receive financial support that matches the services they have rendered. For instance, a nonprofit can co-market products.

By hosting events that will see sponsor companies attract and recruit new talent, they ultimately help them grow their talent pool. As the non-profit continues to engage with its partners while working towards mission-related activities, it is able to make a social impact, gaining brand equity while its partner improves its public image, is able to penetrate a new market, increase its sales which ultimately yields to a better bottom line.

Stay visible and active: The non-profit sector keeps evolving. New ways of accepting donations are emerging with technology. Donors

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OSAYI ALILE keep changing their minds on the causes that matter to them. With these changes, non-profits cannot afford to work alone. Working with other organisations allows them not only to stay visible, but they also gain access to information exchange. Managers need to be well-informed about happenings around, so that they can plan ahead and stay solid against any impending disruption. Get a social media profile and use it as a platform for impact reporting. Doing this is one of the easiest and cost-efficient ways to meet potential partners.

Non-profits will only make as much impact as the strength of their network system. It cannot afford to work alone. Collaborating with colleagues in the industry and partners in the corporate sector as well as staying socially active are ways they can achieve more.

Alile is the CEO ACT Foundation and consultant for Access Bank Plc on its CSR projects, Ms. Alile was the Executive Director of FATE Foundation, a leading private sector led not-for-profit organisation in Nigeria

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What led to Nigeria’s civil war? (1)

Remi Adekoya

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ast series, we discussed the 1962-63 census controversies which after all said and done, showed the north with 29.7 million of Nigeria’s 55.6 million-strong population at the time.

This meant the north kept its majority 174 of 312 available seats in the federal parliament.

In the first years of independence, Ahmadu Bello’s Northern People’s Congress (NPC) ruled Nigeria in coalition with Nnamdi Azikiwe’s National Council of Nigeria and the Cameroons (NCNC) party. However, by 1963, the coalition had begun to fragment. With Obafemi Awolowo’s Action Group (AG) party now virtually decimated and Awo in prison for treason, Bello and his NPC colleagues knew they had a ready southern partner in the new political boss of the west – Samuel Akintola, the region’s premier. This emboldened NPC’s northern politicians, many of who had never liked Igbos in the first place, to start treating NCNC politicians as irrelevant.

As a result of their lowly status in the governing coalition, the experience of the 1962-63 census fiascos and upcoming federal elections in 1964, NCNC thus decided to team up with what was left of its former bitter rival, AG, as well as with some northern minority parties to form the United Progressive Grand Alliance (UPGA). UPGA presented

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itself as an alternative to Hausa-Fulani domination of the federal government.

Its main goal was to wrest control of the centre from NPC, rendering the stakes high for Bello’s party, which faced potential national-level marginalisation if UPGA triumphed.

Bello announced his party would have no further dealings of any sort with NCNC because “the Igbos have never been true friends of the north and never will be.” Predictably, he joined forces with Akintola’s new political vehicle, the Nigerian National Democratic Party (NNDP), and a few other small southern parties to form the Nigerian National Alliance (NNA).

NNA’s objective was simple: maintain the status quo at the centre with Bello’s NPC in charge and a junior southern coalition partner, this time Akintola and his party.

The 1964 federal election was characterised by ethnic-baiting and electoral malpractices of all sorts. A 1964 The Times editorial described the campaign thus: “Party manifestos have long since been forgotten in the heat of the battle.

The overwhelming emphasis laid by all campaigners on tribal and regional disputes and prejudices indicate the real points at issue. The Northerners are concentrating their fire on fears of everyone else of ‘Ibo domination’, wooing Yorubas of Western Region by playing on their dislike of the Ibos and arguing that victory for Akintola’s NNDP would ensconce Yoruba influence in the government whereas votes for the Action Group merely tie the divided Yoruba people to the chariot wheels of Ibo aggrandizement.”

At a rally in October 1964, Bello said NCNC wanted Igbos “to dominate the rest of Nigeria.” After the break-down of the NPC-NCNC coalition, Igbos thus resumed their role as the primary enemy of the north.

Using their power at the federal lev-

el, Bello’s NNA deployed intimidation tactics against UPGA politicians who were sometimes physically prevented from entering the north to campaign or even being able to register their candidacy. Meanwhile, in the west, Akintola put in place the machinery required to rig the election on behalf of NNA. Commenting the 1964 campaign in the west, Guardian stated: “An unpopular [Akintola-led] government regarded by many people as stooges of the North must try to cajole or to threaten the population to vote for it. A system of creating private armies of thugs under the name of ‘party stalwarts’ is in place. They are on the payroll of the party; they are mobilized, and they are armed with knives and guns. Their job is to break up rival party meetings and intimidate the population in general. Thugs beat up opposition leaders or members methodically. It is public knowledge how the elections are to be rigged. Voters are instructed not to put their [ballot] papers in the ballot box but to hide them. They are told to hand the paper to the head of their compound. He in turn is expected to deliver all the ballot papers of his compound to a party official who will then put several hundred papers into the Government box.”

Ultimately, 88 of 174 seats were declared “unopposed” in the north after local officials hindered the registration of UPGA candidates. Meanwhile, Akintola declared 30 percent of seats in the west unopposed using similar tactics.

Frustrated, southern UPGA leaders called for a boycott of the election.

However, voting went ahead in many places and NNA declared victory.

Prime Minister Tafawa Balewa called on Azikiwe - Nigeria’s ceremonial president since it became a constitutional republic in 1963 - to invite the creation of a government. Zik refused at first due to the events surrounding the election. Ultimately, he relented,

‘ To many southerners, the coup was a welcome end to northern domination.

To many Northerners meanwhile, it seemed a prelude to the Igbo domination they had long feared. Four of the five majors who led the coup were Igbo

and the Bello-led NNA claimed 198 of 312 seats in the federal assembly, going on to form a national government.

However, many southern politicians did not accept what they considered a sham of an election.

The western regional elections of 1965 followed a similar pattern to the 1964 national poll. Akintola’s NNDP party deployed blatant ethnic-baiting, stating that if elected, they would make sure “Yorubas shall never be slaves”, which implied the opposite might be the case if UPGA, which had many Igbo politicians, won power in the west. Again, everything was done to hinder the registration of UPGA candidates. After the vote, both sides declared victory. UPGA leaders were arrested for disregarding the official results. Subsequently, western Nigeria became a battle-zone with widespread riots and clashes with police. By now, many Nigerians were fed up with the political system.

It was in this atmosphere of chaos and violence that the January 1966 coup was launched. Its leaders assassinated those they held primarily responsible for the 1964 and 1965 election fiascos: NPC leader Ahmadu Bello, Prime Minister Tafawa Balewa and Premier Samuel Akintola, among others. But the coup ultimately failed because the plotters failed to seize the capital, Lagos. In effect, the highestranking military officer at the time, Major-General Aguiyi-Ironsi took over as Head of State.

Note: The rest of this article continues in the online edition of Business Day @ https://businessday.ng Dr Adekoya is a journalist and political scientist. He has written for the UK Guardian, Foreign Policy, Foreign Affairs, Washington Post and Politico among others. He tweets @ RemiAdekoya1

Why is there smuggling?

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n August 19, the federal government, citing incessant smuggling, especially of rice, and without recourse to the Economic Community of West African State (ECOWAS) protocol that guarantees free movement of goods and people across the region, shut the Western border with Benin Republic indefinitely. “We cannot allow smuggling of the product at such alarming proportions to continue”, Buhari was quoted as saying in a statement issued by his spokesman. Since then, there has been back and forth argument about the merits and demerits of the action with many sympathising with the government. However, there has been no attempt to look at the problem at its root. Why is there so much smuggling of goods into Nigeria?

The first reason is our dysfunctional ports, which has been adjudged to be the most inefficient and expensive ports in the world. An analysis on overseas cargo and freight costs by MoverBD, an online resource for international shipping, shows that the cost of shipping 20-foot and 40-foot containers to Lagos ports from the United States (Los Angeles & New York) is the most expensive globally.

For instance, in 2018, it costs about $4, 982 to ship a 20 feet container from New York to Apapa, which is about twice the amount to ship a container of the same size to Cape Town, South Africa (at $2, 542). This is despite the fact that New York to Lagos is just 6,516 nautical miles and takes approximately 27 days for a ship to sail the distance while New York to Cape Town is 9,097 nautical miles and takes approximately 38 days to sail.

In Apapa, the inefficiency becomes world class. Average turnaround time for ships at Apapa is estimated in excess of 30 days as against just

two days for the most efficient ports globally.

Also, over twelve government agencies, with each demanding inspection and associated fees, litter the ports causing nuisance and increasing the costs for businesses.

What is more, although the access roads to Apapa and Tin Can ports were originally projected to give access to 1,500 trucks, now about 5,000 trucks seek access to the ports every day, according to reports by the Lagos Chamber of Commerce and Industry (LCCI). The report says Nigeria loses N600 billion in customs revenue, $10 billion (N3.6 trillion) in non-oil export sector and N2.5 trillion in corporate earnings across various sectors on an annual basis due to the poor state of Nigerian ports.

A 2019 survey of the ports by the Convention on Business Integrity (CBI) shows the operations of the ports are still riddled with inefficiency and corruption. Some of these include rampant exercise of discretionary powers by port officials, even in matters where there are verifiable guidelines like fee payments, a bouquet of payments made for services not provided, extended port processing time and port charges due to processing delays, poor subscription standard operating procedure (SOP), capacity utilisation at between 38 percent and 40 percent and generally abuse and manipulation of the system by customs officers, port gate officials, stevedores, document clerks and scanner agents.

Just as Nigerian ports are becoming expensive and inefficient, neighbouring ports in Benin and Togo were increasing their efficiencies and lowering costs to attract Nigerian importers. Naturally then, genuine businesses prefer to import through Benin ports and truck their goods into Nigeria – a

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far less expensive option than landing their goods in Apapa.

Added to the expensive and inefficient nature of the ports, the Buhari government, in 2015, banned rice importation through the land borders and imposed a 70 percent tariff for importation through the ports. This is in addition to the wrongheaded 70 percent tariff on imported vehicles including second hand vehicles, popularly known as Tokunbo cars in local parlance, imposed by the Jonathan administration as part of the automotive policy to support local assembling of cars.

The results have been clear: as legal importation to Nigeria drops drastically, neighbouring countries such as Benin, Cameroon, Niger and others have seen their parboiled rice imports increasing. Ironically, these countries mostly consume white rice (another variant of the staple), whereas they import more parboiled rice, which, considering their population, can last them for a decade. However, they continue to import parboiled rice every year while legal imports continue to decline in Nigeria as smuggling increases exponentially.

What about cars? Since the devaluation of the naira in 2016, car sales have plummeted to about 7000 in 2018.

Even corporates that used to be the biggest buyers of cars in the country for staff and business activities have since cut down on their demand, monitising it for their staff and outsourcing car services.

More unfortunately, even Tokunbo or second hand vehicles are going out of reach of most Nigerians. Now most of the vehicles imported (through the seaports) are very old and accidented vehicles to avoid the punishing tariffs and levies. A visit by

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CHRISTOPHER AKOR

BusinessDay reporters to one of the terminals at the Tin-Can Island Port, Nigeria’s foremost roll-in, roll-out terminals for the importation of vehicles, most vehicles brought in by vessels were mostly low quality and damaged vehicles. The majority of second hand vehicles used by Nigerians are brought in through Benin border or smuggled into Nigeria.

One would think in crafting a solution to the incessant smuggling into Nigeria, the first action point would be to reform the ports to increase efficiency, lower costs and turnaround time. But no, the solution is to blame our neighbours and shut the borders. What is more, it was clear from the beginning that Nigeria has no capacity to satisfy local demand for rice. But in a desperate move to support a powerful cartel of local rice producers, the government is prepared to kill its citizens who will naturally be incentivised to go into smuggling, move millions of its people into extreme poverty and scupper the economic wellbeing of the country just to support some cartels to milk and extort its citizens.

It amazes me how we, at once, advocate for free trade and at the same time, put barriers to free trade all over. By closing our borders and preventing trade, the government did not spare a minute to think about many Nigerian businesses doing businesses and importing goods to our neighbouring countries.

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Thursday 14 November 2019

Editorial Publisher/CEO

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

Bashir Ibrahim Hassan

GM, BUSINESS DEVELOPMENT (South) Ignatius Chukwu

Nigeria needs to move forward, further and faster

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conomies like Nigeria are said to hav e en ormous potential.

We hear that a lot. We hear it so often we’ve taken it for granted? Remaining in potency to catch up, failing to converge, like emerging economies have with developed economies, is to be condemned to perpetual backwardness.

There are advantages to backwardness i.e. sufficient room to catch up or converge. For instance, China was once backward but the adoption and adaption of technology and economic policies have enabled it to achieve unprecedented growth.

The economy of Nigeria has grown, in fits and starts.

And whatever progress there has been few have felt it. What will it take for a bigger portion of Nigeria to move forward, further and faster? Can we catch up? It depends.

It depends on our ability to absorb ideas and knowledge and map out how we intend to catch up. It depends on building capabilities to adopt and adapt technologies to gradually

bridge the distance to the frontier. To be sure, slow growth in developed economies will not cause frontier and emerging economies to leapfrog developed economies. Why? Because developed economies continue to innovate, to attract the best talent in the world, through their immigration policies, and thus renew themselves. In short, as Dani Rodrik, an economist, succinctly puts it “convergence is anything but automatic”.

Take the US and the invention of hydraulic fracturing (fracking), the technology used to fracture shale rocks to release the oil and gas trapped within. The story of George Mitchell, the man who invented fracking, is the typical American Dream.

Mitchell was the son of immigrant parents. His relentless resilience, entrepreneurialism and gamblers’ instinct made him successful in a country with institutions that provide enablers and support enterprise.

The shale revolution is remapping global oil trade and geopolitics. The quality of Nigeria’s growth, the economy’s performance, still

depends on how much crude oil can be extracted and sold, subject to conditions that aren’t within the country’s control. Shale has eroded demand for crude oil. Out of Nigeria, human and financial capital are been flown or shipped abroad, willingly and illicitly.

What you trade to catch up, whether goods or services, matters. So do policy, institutions and macroeconomic stability. To go beyond macroeconomic stability, to diversify and restructure the economy and to increase productivity Nigeria has to capture the gains from “automatic-convergence” industries.

Our largely informal economy must be formalised, agriculture industrialised, and electricity fixed to make leather shoes, plastics, pharmaceuticals and fertilizers.

These domestic job-generators require economic policies some of which the CBN has pioneered – development finance institutions (DFIs), for say, Micro, Small and Medium Enterprises (MSME), intervention funds, Nigerian Incentive-based Risk Sharing System for Agricultural Lending (Nirsal) etc. But

these policies are not easy to manage, for informational and political reasons. How does CBN know where to intervene, how does the apex bank stop rent-seekers from capturing the benefits of its interventions?

Oil, a commodity that Nigeria is overly dependent on, makes it hard to allocate resources into more productive sectors. Though it has spurred growth, poor economic management from this highly profitable sector has retarded productive employment. Unemployment and poverty are evidence that there are no genuine growth generators.

If they were, entrepreneurs, capital and job seekers would be moving into these sectors. To be fair, policies targeted at agro-allied sectors e.g., rice milling, poultry and fast-moving consumer goods (FMCGs) like noodles, pasta, sugar, cement, and beverages are generating benefits.

Even so, few people see these prospects because jobgenerating sectors need a functioning market. Nigeria’s massive and stubbornly difficult to measure informal sector further masks the prospects.

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A different reading of Fashola’s thesis on roads The Public Sphere

CHIDO NWAKANMA

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he spirited effort by Works and Housing Minister Babatunde Raji Fashola to blame the media for the anger his statement on the state of our roads caused has left me even more confused than the initial report itself. Over the weekend, Fashola sent our messages pointing to the speech to claim the media misquoted or misrepresented him.

It will not fly. He still gets it wrong.

Works and Housing Minister Babatunde Raji Fashola put his foot in the mouth with his comment on the state of Nigerian roads. The minister claimed the highways are not as bad as Nigerians perceive them. He has received condemnations as well as invitations to tour the country or travel only by road for the next three months to prove his claim.

Fashola failed the test of communication psychology. The rule in messaging is never to offer the audience a negative. Do not accentuate the negative because it will stick in

the minds of the audience.

Fashola’s statement was an appeal for balance in the media in reporting the bad state of our roads. In doing so, he repeatedly mentioned the poor state of the roads.

Here is what he said: “To appeal to you, yes, we are here to solve problems. Problems (are) headlines for you. But I think, for balance, it is also to show that not all of the roads are bad. Because the focus is on the bad part, but you owe Nigerians, whose taxes we use, to also show them that some works (are) going on. Because it is not all Nigerian roads that are unmotorable.

“On Benin-Warri road, for example, many sections are motorable. It is a part that has caved in and collapsed, and that’s where the pain is, and that’s where we would respond to. Same thing for Lagos-Ibadan.

“It is important for us to have balance in order to encourage people to have hope in the country because it is not as bad as sometimes we portray it. That’s your headline, we know. But it’s important we let them know that on a 100km stretch, maybe 10-15 percent is bad. Maybe you actually drive to that point before you feel the pain. Those are the places we would address. Thank you very much.”

It is difficult to comprehend the effort to change the narrative after the fact. Minister Fashola says that on average 85 percent of the roads deemed obnoxious is in excellent condition leaving only 15 percent as the portions that cause problems

to users. A different presentation of his message would have been to accentuate the positive: “We will fix the 15 percent of bad portions on federal roads that cause users pains”.

Such positive messaging would have spared the embarrassment.

I had a different reading initially of the minister’s statement. I thought he was flying a kite. He made the statement a few weeks after lamenting the poor funding of the ministry against the backdrop of the enormous task at hand. Fashola has also spoken of our country’s need to raise as much as N10 trillion in bonds to provide the infrastructure that we need.

Against that backdrop, I thought he was indirectly reinforcing the message of the inadequacy of the appropriation to the ministr y.

When on Bayo Onanuga, CEO of the News Agency of Nigeria, ended his piece on Facebook ostensibly blasting the minister for the wrong statement by referring to the budget, I thought that was the real message. I still hold on to the notion that Fashola wants to draw attention to the inadequate provision for capital expenditure in 2019 as well as the 2020 budget.

Fashola can still turn this umbrage around. He should come out more forthrightly and speak to the challenge of the expectations of Nigerians versus the reality of inadequate provision for capital projects.

Not much will happen to those roads given what we have allocated for fixing them as well as constructing

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Fashola can still turn this umbrage around. He should come out more forthrightly and speak to the challenge of the expectations of Nigerians versus the reality of inadequate provision for capital projects

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someone who set up a business and takes all the financial risk alone. It is out of context to think someone in employment might not be an entrepreneur except he or she is the owner of the business.

Thus, we have people who are career entrepreneurs. They are in employment intending to get to the top of their careers and not necessarily to set up the businesses of their own. They are like the owners of the company in terms of the involvement and contribution to the brand, customer service, bottom-line and often speak well of the companies that work for. One of the attributes of a career entrepreneur is his or her interest to do something extra for his or her employer outside the agreed primary job functions.

A career entrepreneur will invest in herself, pay to attend the relevant training even if the company does not sponsor her, identify the emerging opportunities, volunteer to start a new department and she is a go-to employee.

A go-to employee will always be interested in what is going on in other aspects of the company, including the profitability of the business.

In my engagement with graduates either at interviews or during my speaking events, I have noticed the pride of wanting to be known as entrepreneurs even without a concrete value proposition. A graduate once disclosed at a meeting that he would instead be an entrepreneur than taking a job with a company which he considered a low-key and one-person business. My question to him was, sell me the products or services of your entrepreneurship efforts and what you are doing to get funding from some of the notable

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institutions that support entrepreneurship development? To my greatest surprise, he has no idea of what he wants to be an entrepreneur in, not to talk about looking for funding opportunities. Yet he declined joining a company with opportunities to learn and develop competencies for adding value to the society.

As graduates from the school system, being an entrepreneur is a journey that starts with your ability to identify what you love to do. Your capacity to identify and know the activities that will fulfil you will determine your eventual vocation or career of fulfilment.

If you are interested in entrepreneurship, it is better you know whether your interest is in being a social, serial, occupation or lifestyle entrepreneur. The next step to identification stage is to develop your interest and learn the skills relevant to the identified area of vocation. This might require you working as a staff of some organisations-small or big to acquire the knowledge and industry expertise to start your business.

Many graduates have disdain for small business or one-person entity. It is good to have a big brand on your resume if you are a career person. However, working at the appropriate work environment to gain knowledge and skill, no matter how small the entity is a panacea to becoming a successful entrepreneur in the future. The advantages of working for a small firm are the opportunity to learn directly from the owners and managers of the business, to understand the value chain process and the nitty-gritty of the industry within a short period. And perhaps if the desire to a business entrepreneur changed, working in a medium-size entity aid career growth faster

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Again, the Enugu airport Work on the reconstruction of critical parts of the Enugu Airport enters the eighth day today, 14 November.

Work commenced on Thursday 7 November. It was precisely 75 days to the shutdown of the airport.

There was so much drama in those 75 days. We want to commend the Minister of Aviation Senator Hadi Sirika for going to Akanu Ibiam Airport to kickstart the repairs. Stakeholders of the Enugu Airport look forward to using it against Easter 2020 (April) and to an airport that works. Commendations also to Governor Ifeanyi Ugwuanyi for doing all that is necessary to ensure there are no excuses. Ahoy.

Nwakanma is a Visiting Member of the BusinessDay Editorial Board and serves on the Adjunct Faculty at the School of Media and Communication, Pan Atlantic University, Lagos. Email chidonwakanma@ gmail.com.

Being an entrepreneur is a service not a slogan ne of the most popular words in this dispensation is “entrepreneur”.

The entrepreneur is becoming a business slogan among people who see it as fanciful and the popular title for people doing well. Whereas a business slogan is to help a company to summarise its product or service offerings to people, create a connection with the customers and drive home a message, entrepreneurship is the act of being productive. We have turned the word “entrepreneur” to a slogan as everyone wants to be an entrepreneur or known as one.

It is not out of context for one to desire to be an entrepreneur. The somewhat inappropriate meaning we have attributed the word entrepreneur is the boss, the freedom of a person to do whatever he or she wants or to have no reporting responsibility to anyone or someone who is “on his own” without taking instruction from any higher authority. It is, therefore, typical for most of our youth and graduates to desire this self-independence even without any concrete vision or product offerings to others. I have seen the so-called entrepreneurs without products or services they are rendering to others but flagging around with saggy trousers claiming to be business owners. We have misused the word entrepreneurship in its real sense.

Entrepreneurship is being productive in rendering services or selling products to others with value for the effort and fulfilment for the entrepreneurs. It could take any form from being self-employed to being in partnership with others or even in the employment with companies or organisations. We have been interpreting being an entrepreneur to

new ones.

In the psychological analysis of communication, emphasis is not on message or the medium but the expectation of the recipients. Nigerians expected Fashola to have a message of hope on the roads. He was defensive and came out with a garbled message. We understand the challenge. Fashola suffers internal contradictions arising from the variance between his boasts before 2015 and the reality of the government in which he serves. He should turn his message around and speak candidly to us. We will understand.

Positive Growth with Babs

Babs OlugbemI

than being in a big entity. After all, one might be better off being a big fish in a small ocean and being an unknown employee with no authority after years of service in a big entity.

My parting shot for our graduates is not to be without alternative skills. There is nothing as job security again but skill security. If you cannot acquire extra skill while in school, the National Youth Service Corps (NYSC) has provided a platform with her Skill Acquisition and Entrepreneurship Development (SAED) Programme. The year of serving Nigeria could be a year of skill re-orientation for our graduates rather than a “Jollof-rice” year for roaming the cities aimlessly.

Finally, as a graduate, do not underrate any employer of labour. Before you turn down the opportunity for the employment, check for the possibility of acquiring a life-long skill in services or products that could be the bastion of your entrepreneurship. Being an entrepreneur is a call to serve others with value and not a slogan for being idle.

Babs Olugbemi FCCA, the Chief Responsibility Officer at Mentoras Leadership Limited and Founder, Positive Growth Africa. He can be reached on babs@babsolugbemi.org or 08025489396.

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14

Thursday 14 November 2019

BUSINESS DAY

COMPANIES & MARKETS

COMPANY NEWS ANALYSIS INSIGHT

HEALTHCARE

May & Baker’s Q3 revenue drops to N5.91bn as new chairman takes over OLUWASEGUN OLAKOYENIKAN

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he revenue of drug maker, May & Baker, dropped 38.05 percent to N5.91billion in the third quarter of 2019 from N9.54bn in the corresponding period of 2018.

The company’s cost of sales reduced 9.63percent to N3.75bn from N4.15bn, while its distribution, sales, and marketing expenses stood at N756.56m from N978.61m, administrative expenses surged to N626.07m from N536.98, net profit stood at N473.57m from N414.75m.

Revenue from its pharmaceutical segment, which is involved in the production and sale of human pharmaceuticals and human vaccines, dropped to N5.85bn from N6.39bn in 2018.

Revenue from its beverage segment, involved in the production of beverage drinks including bottled water stood at N56.79bn from N52.02bn.

May & Baker decided to sell off its food line (Production of Noodles) to Dufil Nigeria Limited for ₦775m. The 100percent acqui-

sition was finalised earlier in the year following the fulfillment of all necessary conditions, which include gaining the approval of companies’ Boards of Directors, their respective shareholders, and the Nigerian Stock Exchange.

The company announced the appointment of Daisy Ehanire

Danjuma as the new chairman after the retirement of erstwhile chairman, T.Y. Danjuma.

It realised N1.86 billion from the just-concluded rights issue which was 76.04 percent successful. Managing Director/CEO, May & Baker, Nnamdi Okafor, said the rights issue would further help

to reduce finance costs, increase capacity and bring greater returns to shareholders.

Okafor noted that the net proceeds of the rights issue will be invested in some key projects including N400 million to finance part of the company’s equity in Biovaccines Nigeria Limited, the

James Odiase, senior manager, commercial, Accugas Limited (middle) receiving an award from Audrey Joe-Ezigbo, president, Nigerian Gas Association (left) and Justin Ezeala, 2nd vice president, Nigerian Gas Association (right) at an event marking the 20th anniversary of the association in Lagos recently.

joint venture company for local vaccine production and over N500 million on capacity expansion for one of its cash cow products, paracetamol for which it is building a dedicated plant.

He added that the company will also use N400 million to offset part of its current loan portfolio of N950 million while N500 million will be invested in marketing and brand building The company in April 2007, entered into a Joint Venture with the Federal Government to engage in the business of production, sale, and distribution of human vaccines.

Under the arrangement, May & Baker is to have 51percent interest in the Company by injecting N520 million in the entity while the Federal Government is to have 49percentAnd as at the 2017 financial year, the Company has only injected a 44percent of the total investment cost due to them into the company.

It also recently signed an agreement with the National Institute for Pharmaceutical Research Development (NIPRD) for the commercial production of NAPRISAN, an anti-sickle cell medication.

INSURANCE

Wren Regent showcases real estate to Nigerians in Canada ENDURANCE OKAFOR

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ren Regent Properties Limited in partnership with the Nigerian Canadian Association, Ottawa, has showcased the opportunity and growth in Nigeria’s real estate sector the country’s citizens in diaspora.

In a Business Consultation Breakfast which held recently in Canada, more attention was directed at educating Nigerians in the country about the dynamic real estate sector in Nigeria and more especially Lagos state.

Giving a keynote speech at the event titled: Wealth Creation through Real Estate Investment in Nigerian and Canada, the Chief Operating Officer of Wren Regent Properties Limited, Amara Musa made a detailed presentation on the opportunities available for diaspora members, and investors who had a keen interest in wealth creation and sustainability in Nigeria’s commercial nerve centre.

In her presentation, Musa addressed the real estate issues faced by diaspora members.

“Lack of reliable representation in Nigeria is the most popular reason behind the lack of confidence for international investors,” she said.

The COO also highlighted the solutions Wren Regent Properties Limited is trying to provide.

According to the Lagosbased real estate firm, some of the solutions it is bringing to the property market include a consistent reporting system, a dedicated representative per transaction, and a transparent management system to boost investor confidence in the sector.

A further focus of the event was placed on developments within Lagos that provided the most value for international investors and in effect provided avenues for wealth creation and high returns on investment.

Valerie Akujobi, Founder of VTA Law Professional Corporation and Toyin Adewoye, a Real Estate Professional of Coldwell Banker Sarazen Realty also graced the gathering and

during their address, they shared valuable insight on the existing opportunities and legal requirements within Ottawa’s vibrant real estate market.

The Business Consultation

Breakfast was highly successful and ‘broke the ice’ for diaspora members within Canada looking to multiply their income by investing in Nigeria’s real estate industry. It also assured that

using a credible real estate firm such as Wren Regent Properties Limited would ensure a secure, safe and rewarding investment experience, the real estate company revealed.

L-R: Damilola Ogunsanya, documenting officer, Project Enable Africa; Ngozi Ukpai-Okoro, community mobilization officer; Ibijoke Sanwo-Olu, first lady of Lagos State; Olusola Owonikoko, project director, and Lanre Olagunju, head of communications, at their courtesy visit to Office of the first lady in Lagos

Thursday 14 November 2019

COMPANIES&MARKETS

BUSINESS DAY

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Business Event

COMPANY RELEASE

FBNQuest Merchant Bank shares insights to generational wealth transfer at customer forum SEYI JOHN SALAU

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BNQuest Merchant Bank, the investment banking and asset management business of FBN Holdings Plc, recently hosted its clients to a Wealth Management Customer Forum, facilitated to share in-depth analysis of the impact of long term wealth preservation and intergenerational wealth transfer.

The Forum, themed ‘Our Customers, Our Strength’ focused on three key topics‘Health is Wealth’ presented

by Consultant Nephrologist, St. Nicholas Hospital Ebun Bamgboye; ‘Benefits of Generational Wealth Transfer’ delivered by Head Private Trust FBNQuest Trustees Mofoluke Keshinro; and ‘Trends & Opportunities in the Global & Local Economy’ by Head Macroeconomic and Fixed Income Research FBNQuest Capital, Gregory Kronsten.

On generational wealth transfer, the forum highlighted some of the challenges individuals and businesses encounter, due to lack of a proper estate plan. According to FBNQuest Trustees, insights have revealed that globally, only 30% of all family-owned businesses survive into the second

generation and only 12% make it to the third generation. It further explained that 72% of family businesses have no formal business continuity plans and only 7% have hired professionals to help deal with family relationship issues involved in planning for the continuation of the business.

The forum also advised on the importance of securing your wealth through the services of professional financial institutions to guarantee successive generational wealth transfer and stable investment growth.

Speaking at the forum, Kayode Akinkugbe, Managing Director/CEO, FBNQuest Merchant Bank, reaffirmed the position of the bank to help customers build more long-term and strong investment portfolios through structured wealth management services. “We work with our clients to provide tailored investments solutions to help build, sustain and transfer wealth across generations.

Over the years, we have actively partnered with both individual and institutional clients to grow financial assets and investment portfolios in line with varying wealth management objectives. We ensure that we seek investments that are safe, liquid

and profitable for long term sustainability”.

D ebbie Irabor, Head, Wealth Management at FBNQuest Merchant Bank, also stated that “the inheritors of a generational wealth transfer must maintain a more global outlook, in ways not only to preserve wealth but investment opportunities to maximise such wealth. This is why we ensure that our wealth management products and advisory services are specifically tailored, as we journey alongside our clients. This customer forum is also for us to engage, get customer feedback, strengthen our relationships, innovate and continue to provide clients with the best solutions required to manage their wealth.

The session also emphasised on the need for individuals to maintain healthy lifestyle habits as a key contributing factor to managing wealth while also highlighting some of the most common health challenges faced in our communities. The FBNQuest Merchant Bank Wealth Management Forum is designed to appreciate the organisation’s customers and educate them on the importance of Wealth Preservation and Wealth Transfer

L-R: Felix King, founder, Felix King foundation; Ere Akinrinmade Project manager, startups africa; Andrew Eiremiokhae, COO, Oracle Experience; Millicent Akwuewanbhor, Project manager, The startups Africa, and Ororo Pattaya, MD, Kurioucity, at the launch of the startups Africa by the Felix King Foundation in Lagos

L-R: Okwudili Onyia, stakeholder relations manager; Nkoyo Etuk, senior manager, stakeholder relations, both of Seven Energy; Charles Udoh, commissioner for Information, Akwa Ibom State, at the 12th Teachers’ Award for Excellence in Akwa Ibom State Public Secondary Schools www.businessday.ng

Adebayo Adedeji (l), CEO, Wakanow; divisional head, corporate banking, First City Monument Bank (FCMB), and Folake Fajemisin, at the launch of a partnership between FCMB and Wakanow on Travel Package covering visa processing, flight and hotel bookings, in Lagos.

L-R: Evah Patrick, participant, MTN Telco Hack Day; Olubayo Adekanmbi, chief transformation officer, MTN Nigeria; Bukola Yeye, participant, MTN Telco Hack Day; Olalekan Olowofela, participant, MTN Telco Hack Day, and Victor Orie-Ononogbu, manager, transformation office, MTN Nigeria, at the MTN Telco Hack Day in Lagos

L-R: Richard Elenor, operations leaders, Asia & Africa, Cummins; Charles Gbandi, executive director, human resources, Africa & Middle East, Cummins; Thierry Pimi, MD, Cummins, African & Middle East; Kwame Gyan, Tawiah, director, Cummins distributions business, Africa & Middle East, and Ade Obatoyinbo, MD, Cummins West Africa Limited, at a press conference announcing its global centenary celebration in Lagos

L-R: Oluseyi Akinbi, managing director, Zedcap Partners and Director Zedcrest Capital; Adedayo Amzat, group managing director, Zedcrest Capital; Oluwatosin Ayanfalu, fixed income dealer, Zedcap Partners Limited, and Lukmon Oloyede, marketing and brand communications officer, Zedvance Limited with Zedcap Partners’ award as the Best Brokerage Service firm at the 2019 FMDQ Gold Awards in Lagos.

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BUSINESS DAY

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Thursday 14 November 2019

BUSINESS DAY

TECHTALK Innovation

Apps

Fin-Tech

Start-up

Gadgets

Ecommerce

IOTs

Broadband Infrastructure

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Bank IT Security

Pantami’s ministry of digital economy is missing a plan and states collaborators … Over 95% of states’ directorates of ICT have no digital plan and website Stories by FRANK ELEANYA

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any say that N i g e r i a’s ICT ministry is off to a good start under the new minister Isa Alli Pantami, following the change of name to the Ministry of Communication and Digital Economy on October 23, 2019.

But the minister who was sworn in since August 21, is yet to release his plan showing how he intends to achieve the digital economy. In a Twitter response to a follower, Pantami said he has developed a draft “National Digital Economy Policy/Strategy,” but in the meantime, the minister is issuing deadlines to the regulator and operators to get them to solve the many problems in the ministry, a move many do not see as collaborative.

Moreover, there are still no concrete steps being taken to get the participation of the states’ ministries overseeing ICT and little in terms of grassroots mobilization to champion the digital revolution.

This reporter recently brought this to the notice of a senior official in the National Information Technology Development Agency (NITDA), the agency in charge of driv-

ing the development activities of the ministry across the country, and he confirmed that while there is yet to be a strategy to compel states to own the digital drive, the gap between states and the ICT ministry at the federal level have widened.

“Changing the name to the Federal Ministry of Communications and Digital Economy rather signposts the priorities of the Minister; not mere whitewashing over meaningful transformation,” said an executive in one of the telecommunications companies who pleaded anonymity to speak freely.

“Broadband infrastruc-

ture is still at abysmal levels with persistent RoW (Right of Way) issues; digital Literacy is non-existent; a significant number of Nigeria’s technology talents have emigrated, while local content is sorely lacking in infrastructure projects; most Government agencies are still offline, and the ICT Masterplan has not been executed but a new name suddenly ushers us into a digital economy.”

Findings from BusinessDay show that over 95 percent of states’ ministries in charge of ICT has no digital blueprints, even as nearly 98 percent have no online presence. Lagos State, one

Tizeti targets improved connectivity with solar-powered 4G LTE

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izeti, an internet service provider is looking to improve its quality of service with the launch of a 4G LTE network in three states including Rivers, Ogun and Edo. The company said in a statement sent to BusinessDay that it is kicking off in Port Harcourt, the capital of Rivers State with a new solar-powered 4G-capable tower which will enable it to provide first 4G and ISP services in the city. New towers are also planned for Ogun and Edo states.

The solar-powered 4G tower may not be unconnected to the inefficient power supply situation in Nigeria which impacts the

services of ISPs. Kendall Ananyi, CEO and co-founder said the strategy is also aimed at driving down the cost of operations of the towers, which achieves self-sufficient energy.

“We can offer customers unlimited internet at 30 to 50 percent of the cost of traditional mobile data plans,” he said.

Tizeti also expects the solar-powered 4G towers to deepen internet penetration in the three states.

“Access to affordable and reliable unlimited internet connectivity has been an intractable problem for a lot of Nigerian businesses and residential customers, especially for

people in Edo, Rivers and Ogun States. To address this and provide a sustainable and cost-effective solution, we leverage our solar-powered, always-on towers and robust internet bandwidth from MainOne to create a low CAPEX and OPEX network of owned and operated towers,” he said.

The price for a Tizeti unlimited plan is N9,500 per month. The company has 1.1 million unique users and internet services that include a new Skype-like personal and business enterprise communications service - WiFiCall.ng and access to video streaming sites such as YouTube, Netflix, and Iroko.

of the very few states with a website, updated the website for the first and last time in 2019 in August when they announced the appointment of the commissioner of the Ministry of Science and Technology which oversees the ICT directorate in the state.

“Ask the states what they are doing about NITDEF?” said the NITDA official who will not be named.

National Information Technology Development Fund (NITDEF) was established by the NITDA Act of 2007 as a levy of one percent before tax collected from companies and enterprises with an annual turnover of

N100 million and above. It is deducted directly as tax from the companies accounts by the Federal Inland Revenue Service (FIRS).

Although the Act empowers the director-general of NITDA to keep proper records of the accounts, sources, and use of the monies and assets of the Fund and render account to the board, from time to time, the management of the fund has yet to show up in the public space.

Efforts by this reporter to get NITDA to show how the fund been managed so fat has met with silence. The only known activity in which the fund is put to some use is the annual NITDA Fund Scholarship.

The scholarship is open for Masters and Doctoral degrees in relevant areas of Information Technology (IT) and ICT Law obtainable in Nigerian (Government and Private) Universities. The award selected only 49 candidates in the 2018/2019 edition.

But in several of its periodic reports, the FIRS has shown that NITDEF is a recipient of billions of contributions.

For instance, the levy went from N6.75 billion in 2016 to N9.87 billion in the first seven months of 2017. In 2018, the FIRS collected N11.7 billion representing a 36 percent rise from the previous year. It still

Olusola Teniola to replace Ndukwe at Alliance for Affordable Internet

A

lliance for Affordable Internet (A4AI) said it has appointed Olusola Teniola, the current President of the Association of Telecommunications Companies of Nigeria (ATCON) as its new national coordinator for Nigeria. He is taking over from Ernest Ndukwe, who has led the coalition since its inception in 2015.

Founded by the Web Foundation in 2013, A4AI is a global coalition with a mandate to drive down the cost of internet access in low and middle-income countries through policy and regulatory reform.

The Alliance has over 80 member organisations from across the private, public, and not-for-profit sectors

in both developed and developing countries, working through a consultative, locally-driven and locally-led process in member countries throughout Africa, Asia, and Latin America.

As National Coordinator, Olusola is expected to oversee the work of the coalition in Nigeria to reduce the cost of internet access in the country. He comes with over 23 years of global ICT experience working in strategic management positions at several major telecom companies.

According to the newly appointed National Coordinator, “I look forward to amplifying the voice of coalition members on key issues impacting affordability in Nigeria through strong col-

Team: Frank Eleanya, frank.eleanya@businessdayonline.com; Caleb Ojewale, caleb.ojewale@businessdayonline.com www.businessday.ng

fell short of the N31 billion target set for NITDEF in 2018.

So what does the ministry do with the remaining funds after funding scholarships for not more than 50 students?

The NITDA official who spoke to BusinessDay said naturally states should be able to have access to the fund but the directorates of ICT in nearly all the 36 states have put up different roadblocks in their bid to enrich themselves from the proceeds of the fund.

“Did you know we had to bribe a director of ICT in one of the states to give him money from NITDEF to execute an ICT project in his state,” the senior official said.

“That’s how bad it is.”

But telecom operators say NITDA and the NCC have not lived up to expectations in terms of efficient engagement of stakeholders in the sector, which underscores why issues such as Right of Way persist. Besides, despite being barely three months as the Minister of ICT, Isa Alli Pantami is not a newcomer to the ministry having spent nearly four years as the director-general of NITDA during the first term of President Muhammadu Buhari. Thus, one would have expected a more robust strategy and an intentional approach to engaging stakeholders in the sector.

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laboration between government, civil society, and private sector players.”

He has contributed to the rollout of mobile and broadband ser vices by World Telecom in Portugal (2003 - 2007) and has served in executive positions at British Telecom, Vodafone, Cisco Inc., and Alcatel-Lucent Technologies.

Sonia Jorge, executive director of A4AI said Olusola’s leadership will support the renewed vision of a digital economy for Nigeria.

Ernest Ndukwe is credited with growing the Nigerian coalition, successfully leading policy change which helped Nigeria to achieve affordable internet data costs of 1.6 percent of average monthly income.

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Thursday 14 November 2019

BUSINESS DAY

ENERGYREPORT Oil & Gas

Power

Renewables

Environment

Why bunkering business remains stagnant despite being major oil producing nation Olusola Bello

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hen about three years ago, the Department of Petroleum Resources came out steaming that it would ensure that legitimate bunkering activities commence in the country, the decision was hailed by oil and gas stakeholders that were present at a workshop which was held at Four Point Hotel, Lagos.

This was because the attendees at the workshop could not just imagine that Nigeria, a major oil producer and with active ports could be losing money through her own negligence of not being a big player in that line of business.

Now, three years down the line the country remains a laughing stock as our neighbouring countries that

have capitalise on this carelessness by the government are now making money to boost their Gross Domestic Product through the revenues that would have

T

Olusola Bello, Team lead,

company.

He also disclosed that the rehabilitation of the Afam road has also been taken up with the Federal government.

While receiving the Minister, the managing director and chief executive officer, O.N. Obademi said the major problem confronting the Afam Power Project is the paucity of funds, pointing out that Afam has 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 for 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.

Graphics: Joel Samson.

lack of political will from the government caused the Department of Petroleum Resource not to move ahead with the planned bunkering project in Nigeria thereby

business line that should not be confused with illegal trade in stolen crude for which the same term has been freely used in the Nigerian lexicon.

It was first introduced in Nigeria in 1979, while the licenses were issued by the DPR, but it was later put on hold in 2000, on account of the subsidy on petroleum products which more or less gave the operators windfall profits that did not trickle down to Government.

Revenue generation, as licensing of bunkers including licence renewals, registrations of vessels for bunkering business by the DPR is expected to generate about N250 million yearly.

The stoppage of this activity by DPR has forced vessels that come to the country as their first place of destination to go after discharging their cargos go to Togo and Benin Republics to refuel.

Local Content ‘’ll cut Nigeria’s crude production cost - Sylva

FG to revive all serviceable generators at Afam Power Plant he Federal Ministry of Power has started the recover y 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 of only 270 MW out of 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 affecting the project have already been presented to Federal Executive Council for deliberations and approval.

Sa l e Ma m ma n c o m mended Afam community for loyalty and support while promising that they would be carried along in the privatisation process of the

ordinarily be for Nigeria.

BusinessDay investigation however revealed that paucity of fund, bureaucratic bottlenecks among intergovernment agencies and

making the country to loss colossal sum of money to neighbouring countries.

The DPR had in 2017 said that it was going to facilitate bunkering business in the country after realising that the country was losing huge sum of money to countries like Togo and Benin Republic.

Bunkering is a downstream business involving the fueling of ships of all kinds on the high seas, inland waterways and within the ports. It means vessels coming to Nigeria are able to refuel from the country before going back to the country where they come or vessel passing through the country may stop by to refuel and then move on to its destination.

Fuels to be supplied include Automotive Gas Oil (AGO) or diesel, Low Pour Fuel Oil (LPFO) and Liquefied Natural Gas (LNG).

Bunkering is a legitimate

T

he Federal Government will deepen the implementation of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act because it is an effective strategy for lowering Nigeria’s high crude oil production cost, the Minister of State for Petroleum Resources, Timpre Sylva has said.

The Minister stated this at the conclusion of his first working visit to NCDMB’s head office in Yenagoa, Bayelsa State, its new 17-storey headquarters building and other project sites.

Emphasizing that Government’s primary target in the sector is to significantly reduce the unit cost of producing per barrel of crude oil, Sylva stated that ”local contractors tend to be cheaper than expatriates and international contractors and that’s why we want to encourage Local Content and give more opportunities to local contractors. By extension we will reduce the cost of doing business in the oil and gas industry in Nigeria.

“Local Content is part of cost reduction strategy.

That’s why I came here, to encourage more local participation in the activities of the

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industry.”

The Minister also lauded the NCDMB for epitomizing its mandate by using an indigenous contractor to develop its new headquarters.

He described the edifice as world class and a clear demonstration of the capacity of Nigerians contractors. Such superlative performance on projects would pave way for the engagement of other local contractors in the oil and gas and construction sectors, he suggested. ”When you have seen one contractor perform this good, you are encouraged to patronize more local contractors.”

He expressed confidence that the new NCDMB structure will attract a flurry of oil industry activities to Bayelsa State. He noted that the problem we have had over the years was that the region where oil production takes place did not have proper structures to promote lots of events. That why you see oil and gas events going to Abuja and Lagos. But when you have a befitting facility here, going forward there will be a lot of oil and gas related activity in the Niger Delta.”

The Minister commended the NCDMB for the numerous achievements it had recorded

in the implementation of the NOGICD Act. He said,” I am quite impressed with what they have done in a very short time of existence. The new headquarters building is a testament to that impressive performance and of course, you have the 10 mega watts independent power plant. It is a modular plant that can be increased up to 25 megawatts.”

In his remarks, the Executive Secretary of NCDMB, Simbi Kesiye Wabote confirmed that Local Content implementation lowers the cost of crude oil production, particularly in the long run.

He listed other key elements that contribute to high crude oil production cost in Nigeria to include security and infrastructural challenges as well as protracted contracting cycle.

He affirmed that several Nigerian oil service companies had executed several projects at costs much lower than their international counterparts. He also clarified that countries like Brazil, Malaysia and Norway that had practiced Local Content in their oil sector for decades had long enjoyed significant cost reduction in their per barrel cost.

Email: energyreport@businessdayonline.com, Tel: +234-8023020011

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Wabote also explained that Local Content serves as an opportunity cost for the Federal Government to empower its citizens and get them involved in the activities of the oil and gas industry.

He added that Local Content guarantees security of supply in the industry, recalling that local service companies and skilled Nigerians personnel ensured that operations of the oil and gas industry continued apace during the height of restiveness in the Niger Delta region a few years ago, when most foreign companies and their staff had pulled out.

Providing details on the new NCDMB facility, the Executive Secretary reiterated that it will be ready in December 2019 but relocation of staff will be in phases.

He stated that the project recorded huge impact on the local community. According to him, ”when we started, we took about 50 youths from the host communities and trained them in carpentry, masonry, laying of tiles and other skills. Today, those youths are working on the facility and because of the skills they have acquired, the contractor will take them to other projects.

Thursday14 November 2019

BUSINESS DAY

Investor

19

In association with

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

Market capitalisation

NSE Premium Index

N11.721 trillion

Week open (01– 11–19)

31,924.51 26,293.30

N12.799 trillion

2,198.18

Week close (08– 11–19)

26,314.49

N12.810 trillion

2,190.73

Year Open

Percentage change (WoW) Percentage change (YTD)

0.08 -16.28

2,241.37

-0.34 -0.20

The NSE-Main Board

1,456.29 1,056.11 1,062.07

0.56 -26.24

NSE ASeM Index

NSE 30 Index

NSE Banking Index

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

130.95

723.46

NSE Lotus II

NSE Ind. Goods Index

NSE Pension Index

291.84

2,272.45

1,254.54

1,212.79

801.09

1,438.19

426.64

757.63

1,067.28 1,079.92

316.56

119.89

505.82

235.70

1,689.26

1,047.79

941.75

343.49

120.41

475.93

235.12

1,644.89

1,069.22

957.13

8.51

0.43

-5.91

756.26

-0.18 -4.73

1.18 -23.80

-13.90

-4.80

-36.44

-0.25

-2.63

2.05

1.63

-22.20

-26.37

-13.62

-20.73

NSE Q3 ‘Fact Sheet’ shows declining trading activity

CBN endorses ACTN

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Iheanyi Nwachukwu

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he Nigerian Stock E xchange (NSE) has published its ‘Fact Sheet’ for the third quarter (Q3) ended September 30, 2019.

In the review nine months period, the total Market Capitalisation of the NSE stood at N26.96 trillion ($74.62billion) representing a 52-week (October 2018 to September 2019) increase of about 20.64percent.

The NSE Fact Sheet contains a profile of the bourse, an overview of the market capitalisation of all products traded on the Exchange, as well as a snapshot of key market statistics such as total volume traded, total value traded, average daily volume, average daily v​alue, foreign portfolio investments, index performances etc.

The Q3 Fact Sheet shows that average daily value of securities traded on the NSE fell to N2.94 billion ($8.13 million), declining 9.82percent from N3.26 billion ($8.97 million) in Q3 2018. The average daily volume of securities traded also decreased by 11.62percent to 228.08 million units in Q3 2019, from 258.07 million units in Q3 2018.

The equities market capitalisation of N13.43trillion ($37.17billion) represents 52-week increase of about 12.22percent. Large cap stocks value increased to N9.77trillion ($27.03billion), up 23.30percent since October 2018; Mid Cap stocks value at N2.67trillion ($7.40billion) represents a decline of 7.80percent, while Small Cap stocks value at N1.02trillion ($2.83billion) shows they lost 11.16percent of their cumulative value as at October 2018.

L-R: Patrick Ajunwoko, executive secretary/CEO, Association of Corporate Treasurers of Nigeria (ACTN); Benjamin C. Nandi, deputy director, Reserve Management, CBN; Yinka Ogunnubi, member ACTN Governing Council, Zeal Akaraiwe, chairman ACTN Governing Council, Okwu Joseph Nnanna, deputy Governor, Economic Policy, CBN; Kudi Badmus, member ACTN Governing Council and Funso Sobande, member ACTN Governing Council during the courtesy visit of members of the ACTN Governing Council to the Deputy Governor, Economic Policy CBN in Abuja recently.

Exchange Traded Funds (ETF) market capitalisation was N6.83trillion ($18.89billion) in the review period while the Bonds Market Capitalisation of N12.82trillion ($35.48billion) implies an increase of about 23.60percent in the same 52 week to September.

Amid the aforementioned positives, the Exchange noted that global trade uncertainty, rising interest rates in advanced financial markets as well as aftermath of the Nigeria’s 2019 elections led to a decrease in trading activity on the NSE in Q3 2019 compared with the corresponding period in 2018.

At the end of the quarter, the

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average price-to-earnings (PE) ratio of the Exchange’s listed equities stood at 23.94 compared to 18.83 in the previous year. The dividend yield for the 52-week period ended September 30, 2019 was 4.03percent.

The NSE has 13 indices that track market and sector performance. They are: the NSE All Share Index (ASI), the NSE 30 Index, the NSE Pension Index, the NSE Banking Index, the NSE Consumer Goods Index, the NSE Industrial Index, the NSE Insurance Index, the NSE Oil and Gas Index, the NSE Lotus Islamic Index, the NSE Premium Board Index, the NSE Main Board Index, the NSE ASeM Index and the NSE Corporate Governance (CG)

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Index. The main index is the NSE 30 Index. The Fact Sheet shows 52-week movements of all these indices are in the red. The NSE-30 Index at 1,147 points represents a 52-week decline of -22.16percent. All Share Index at 27,630.56 points as at September 30 shows it was down by -15.67percent in one year.

Others show: NSE Premium Board Index at 2,271.74 points (-3.55percent); NSE Main Board Index at 1,131.04 points (-22.63percent); NSE ASEM Index stood at 774.30 points (-2.93percent); while NSE Pension Index at 993.24 points represents -19percent decline in a 52-week period.

@Businessdayng

he Central Bank of Nigeria (CBN) has endorsed the Association of Corporate Treasurers of Nigeria (ACTN).

Okwu Joseph Nnanna, Deputy Governor, Economic Policy, CBN made this known to the members of ACTN governing council during their courtesy visit to him in Abuja last week.

While urging ACTN to be research oriented, consider how it could institute corporate governance, he said that ACTN should interface with CBN in the partnership through the Financial Markets Department of CBN. The Association of Corporate Treasurers of Nigeria is an association established to foster the interests of Corporate Treasurers in the Nigerian financial markets by providing a platform for policy advocacy, discussions on issues of mutual interest, education and standard development of the corporate treasury function.

Zeal Akaraiwe, chairman of ACTN governing council who led the ACTN team noted that the association could play a vital role in partnering with CBN in the area of providing CBN with feedback on policy issues.

He reiterated the value the ACTN could be adding to the process and quality of policies if CBN could depend on the ACTN for certain statistics they would require for more informed policies.

The CBN Deputy Governor who agreed that CBN would partner with ACTN also requested that CBN be put on notice regarding the ACTN activities. He also stated that ACTN would be for CBN the heartbeat of the real sector in measuring market sentiments.

As a result, the apex bank has asked the ACTN to provide CBN with information on the impulse of the real sector regarding exchange policies and other issues the members were facing in accessing foreign exchange.

The CBN Deputy Governor told the members of ACTN governing council that CBN was trying to de-risk the real sector and expressed willingness to partner with ACTN in that regards to move the economy forward.

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Thursday 14 November 2019

BUSINESS DAY

Investor Helping you to build wealth & make wise decisions

Investor’s Square

United Capital Investment Views

Equities market: A great week for banking stocks

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he performance of the equity market was mixed in the prior week as investors simultaneously sold positions and locked in gains. Thus, the Nigerian Stock Exchange (NSE) All Share Index (ASI) appreciated by 8basis points (bps) week-on-week (w/w), settling at 26,314.49 points.

Also, the year-to-date (YtD) loss improved to -16.3percent.

Market capitalisation followed suit, amassing value worth N10.3billion, to close at N12.8trillion. Greater activity was seen in the market last week, as average volume and values traded increased by 36.1percent and 13.5percent, to settle at 411.2million and N3.7billion respectively.

Across the sectors under our coverage, a divergent performance was observed, as 3 of the 6 sector indices closed higher. The week was fantastic for the Banking (+8.5percent) sector, as Guaranty (+13.5percent), Access (+18percent), UBA (+13.8percent), Jaizbank (+18.4percent) and FCMB

of corporate actions, Dangote Sugar Refinery Plc announced a business combination with its subsidiary, Savannah Sugar Company Limited.

Investor sentiment was broadly positive, shown by a market breadth of 1.2x, as 28 stocks advanced w/w, while 24 stocks declined. This week, we expect investors to continue to act on the recent results released, and policy pronouncements in the fiscal space. With excess liquidity in the overall financial system, and the ripples occurring in the fixed income market, we could see continued interests in the local equities.

Money Market: Bearish performance at the primary and secondary market Similar to the prior weeks, overall liquidity in the system was buoyant, as naira inflows outweighed outflows. Inflows into the system included OMO maturities (N351.7billion) and retail FX refunds (about N300bn) which bolstered liquidity, on the other hand, outflows from the system i n c l u d e d O M O au c t i o n (N232.5billion) on Thursday

(+16.3percent) surged w/w. The Industrial goods (+2percent) and Insurance (+0.4percent) sector indices also appreciated, driven by CCNN (+10.1percent), WAPCO (+5percent) and Law Union (+31percent).

However, the Consumer goods (-5.9percent) and Oil & Gas (-0.2percent) sectors fell, owing to International Breweries (-25.4percent), Unilever (-26.6percent) and MRS (-9.7percent). The Telecoms sector was also down, as MTNN (-2.8percent) lost value. Elsewhere, in terms

and the bi-weekly retail FX auction conducted on Friday, which mopped out the inflows from FX refunds. In sum, average interbank funding rates –open buy back (OBB) and Over Night (O/N) rates edged upwards to 5percent (previous Friday: 3.5percent).

At the primary market segment, demand at the OMO auction held during the previous week was tepid, as the average bid to cover ratio on all maturities offered was 0.8x. The CBN offered a total of N280.0bn, excluding 89day bill (No sale), while total

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subscription was N232.5bn.

The 362-day bill received the most interest (bid to cover: 0.9x), while demand for the 182-day bill was lackluster (bid to cover: 0.3x). Despite the faltering demand, the CBN was able to guide rates lower, as stop rates across the tenors offered were; 11.7percent for 180-day (previously 11.8percent) and 13.3percent for 362-day (previously 13.32percent).

The secondary NTB market was largely bearish, market participants continued to struggle with the CBN’s directive on the OMO market.

With operational challenges around separating OMO bills from NTB bills in the secondary market as well as the general market uncertainty, bears outweighed the bulls, as average T-bills yield rose by 68bps to 13.1percent.

Notably, the CBN released a circular regarding secondary market activities for OMO noting that the apex bank will, henceforth, provide one-way quotes to buy OMO bills from banks to increase secondary market liquidity for OMO Bills.

However, the CBN noted that DMBs should come to them as a last resort.

This week, we expect activities at the primary NTB market to tilt towards a bullish run, as the DMO seeks to reinvest a total of N125.2billion in NTB maturities. Also, we expect the CBN to float at least one OMO auction, with OMO maturities worth N405.9billion set to hit the system. Going forward, we expect rates in the market to be lower, as excess funds find a way to smaller amounts of available instruments Bond Market: Investors continue to cherry-pick bonds Sentiments in the secondary bond market were upbeat during the previous week, as investors continued to plough into longer-term instruments. Buying interests were seen across all tenors, as average yield shed 26basis points (bps) w/w, to settle at 12.9percent.

However, the total value of bonds traded, according to FMDQ’s data, declined by 66.1percent w/w, to N218.8billion.

•Have you been shabbily treated by your registrar, stockbroke r or other capital market operators?

Let us know and investor will help you investigate and report back.

E-mail: iheanyi.nwachukwu@businessdayonline.com

Economy & markets

Revisiting MSCI equity indexes review Iheanyi Nwachukwu

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ecently, Morgan Stanley Capital International (MSCI), a leading provider of research-based indexes and analytics, announced the results of the November 2019 Semi-Annual Index Review for the MSCI Equity Indexes.

MSCI is a leading provider of critical decision support tools and services for the global investment community.

The review includes the MSCI Global Standard, MSCI Global Small Cap and MSCI Micro Cap Indexes, the MSCI Global Value and Growth Indexes, the MSCI Frontier Markets and MSCI Frontier Markets Small Cap Indexes, the MSCI Global Islamic and MSCI Global Islamic Small Cap Indexes, the MSCI PanEuro and MSCI Euro Indexes, the MSCI US Equity Indexes, the MSCI US REIT Index, the MSCI China A Onshore indexes and the MSCI China All Shares Indexes. All changes will be implemented as of the close of November 26, 2019.

MSCI Frontier Markets Indexes: There will be four additions to and eight deletions from the MSCI Frontier Markets Index. The three largest additions to the MSCI Frontier Markets Index measured by full company market capitalisation will be Nova Ljubljanska Banka (Slovenia), Ho Chi Minh City Dev Bank (Vietnam) and Commercial Bank Ceylon (Sri Lanka).

There will be 13 additions to and 17 deletions from the MSCI Frontier Markets Small Cap Index. Ecobank Transnational Incorporated Plc (ETI) and FBN Holdings Plc are two NSE listed stocks t hat w i l l e x i t t h e M S C I f ro n t i e r m a rk e t s i n d e x .

The exiting stocks have far underperformed the NSE benchmark index (-16.68 percent) year-to-date (ytd).

ETI at N7 per share has lost 50percent of its year open value while FBN Holdings at N5.45 per share has decreased this year by 31.3percent.

Planned weight increase of China A shares in Emerging Markets: MSCI will implement the third step of the previously announced weight increase of China A shares in the MSCI Emerging Markets Indexes.

Two hundred and four China A shares, 189 of which

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are Mid Caps, will be added to the MSCI China Index and the inclusion factor for 268 existing constituents will be increased from 0.15 to 0.20. China A shares will have weights of 12.1percent and 4.1percent in the MSCI China and MSCI Emerging Markets Indexes, respectively.

In addition, the list of pro forma China A securities for the November 2019 SemiAnnual Index Review has been updated MSCI Global Standard Indexes : 278 securities will be added to and 69 securities will be deleted from the MSCI ACWI Index.

In the MSCI World Index, the three largest additions measured by full company market capitalization will be Blackstone Group (USA), Match Group (USA) and Pinterest A (USA). The three largest additions to the MSCI Emerging Markets Index measured by full company market capitalization w ill b e Cs c Financial A (Hk-C) (China), Hansoh Pharmaceutical (China) and Sbi Life Insurance Co (India).

MSCI Global Small Cap Indexes: There will be 311 additions to and 234 deletions from the MSCI ACWI Small Cap Index.

MSCI Global Investable Market Indexes: There will be 493 additions to and 207 deletions from the MSCI ACWI Investable Market Index (IMI).

MS CI Glo bal All Cap Indexes: There will be 343 additions to and 208 deletions from the MSCI World All Cap Index.

M S C I G l o b a l Is l a m i c Indexes : Twenty-seven securities will be added to and 64 securities will be deleted from the MSCI ACWI Islamic Index. The three largest additions to the MSCI ACWI Islamic Index measured by full company market capitalization will be Constellation Software (Canada), Wuxi Apptec Co H (China) and Wuxi Apptec A (HkC) (China). There will be four additions to and four deletions from the MSCI Gulf Cooperation Council (GCC) Countries IMI Islamic Index.

MSCI US Equity Indexes: There will be eight securities added to and five securities deleted from the MSCI US Large Cap 300 Index.

The three largest additions to the MSCI @Businessdayng

US Large Cap 300 Index measured by full company market capitalization will be Blackstone Group, Ihs Markit and Sba Communications A. Twenty securities will be added to and 19 securities will be deleted from the MSCI US Mid Cap 450 Index. The three largest additions to the MSCI US Mid Cap 450 Index measured by full company market capitalization will be Zoom Video Comm A, Dish Network A and Incyte Corp.

Seventy-four securities will be added to and 35 securities will be deleted from the MSCI US Small Cap 1750 Index. The three largest additions to the MSCI US Small Cap 1750 Index measured by full company market capitalisation will be Stericycle, Acuity Brands and Highwoods Properties.

There will be 20 additions to and 33 deletions from the MSCI US Micro Cap Index.

For the MSCI US Investable Market Value Index, there will be 131 additions or upward changes in Value Inclusion Factor (VIFs), and 106 d e l e t i o n s o r d o w n w a rd changes in (VIFs). For the MSCI US Investable Market Growth Index, there will be 138 additions or upward changes in Growth Inclusion Factors (GIFs), and 141 deletions or downward changes in GIFs. MS CI US REIT Index : There will be three additions to and no deletions from the MSCI US REIT Index. The additions to the MSCI US REIT Index will be City Office Reit, Jernigan Capital and Global Medical Reit.

MSCI China A Onshore Indexes: There will be 47 additions to and 38 deletions from the MS CI China A Onshore Index. The three largest additions to the MSCI China A Onshore Index will be Csc Financial Co A, Avary Holding Shenzhen A and Shenzhen Huiding Tech A. There will be 320 additions to and nine deletions from the MSCI China A Onshore Small Cap Index.

MSCI China All Shares Indexes: There will be 62 additions to and 20 deletions from the MSCI China All Shares Index . The three largest additions to the MSCI China All Shares Index will be Csc Financial Co A, Hansoh Pharmaceutical and Shenzhen Huiding Tech A. There will be 330 additions to and 37 deletions from the MSCI China All Shares Small Cap Index.

Thursday14 November 2019

BUSINESS DAY

21

Investor Helping you to build wealth & make wise decisions

Analysis

When stakeholders agree Nigeria is still compelling destination of capital Iheanyi Nwachukwu

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ast week, stakeholders in Nigeria’s capital market gathered at the 2019 FMDQ Nigerian Capital Markets Conference in Lagos.

The conference themed “Nigeria : A compelling Destination of Capital” had panel sessions which looked at: financial market infrastructures; building a thriving derivatives market; and a green path to economic development in Nigeria.

At the conference organised by FMDQ Securities Exchange, the Federal Government restated the need for mobilisation of domestic savings and foreign capital to finance the country’s needs in infrastructure, agriculture, housing SMEs and other services.

Despite the challenges facing both the local and global economies, stakeholders, speakers and participants at the conference acknowledged that Nigeria still has the potential to attract capital.

FMDQ Securities Exchange mission is to empower the financial markets to be innovative and credible, in support of the Nigerian economy.

In his keynote address delivered at the conference Vice President, Yemi Osinbajo, represented by Mary Uduk, acting DirectorGeneral, Securities and Exchange Commission (SEC) said that the country needs to mobilise more funds to address its needs, adding that Nigeria as a country requires more capital to grow, develop and attain its potentials.

“We need to mobilise domestic savings and capital as well as attract the necessary foreign capital to finance our needs in the areas of infrastructure, agriculture, mining, industry, housing, SMEs, information and communication technology, transportation and other services,” he said.

L-R: Adeyemi Dipeolu, special adviser to the President on Economic Matters; Bola Onadele Koko, managing director, FMDQ Securities Exchange; Mary Uduk, representative of the vice president and acting director General Securities and Exchange Commission; Jubril Aku, vice chairman FMDQ Securities Exchange and Emmanuel Ukeje, special adviser on Financial Market to Central Bank of Nigeria governor, at the FMDQ 2019 Nigerian Capital Markets Conference in Lagos.

The Vice President who said that the administration of President Muhammadu Buhari is doing everything possible to close the gap in infrastructure deficit explained that this is being done through direct expenditure and also by incentives given to private investors, domestic and foreign, to invest in the critical sectors of the economy.

“The Economic Recovery and Growth Plan (ERGP) (2017-2020) has a major objective of building a globally competitive economy through investment in infrastructure, improvement in business environment and promotion of digital-led growth.

“No doubt, this objective requires fresh and adequate capital. This approach to diversifying our sources of capital has assisted in making our country a destination of capital and further deepening our capital market.

“Private issuers are also encouraged to issue these instruments, leaning on the success recorded by the Federal Government. The www.businessday.ng

secondary markets of some of these instruments are also getting more liquid as observed on the Exchanges,” Osinbajo added.

He said that government had increased allocation to capital projects in annual budget to boost infrastructure development.

“For instance, we have been allocating, on the average, close to 30 percent of our expenditure to capital projects.

We are proposing about 21 per cent of the N10.33 trillion of the 2020 budget as capital expenditure,” he stated.

Speaking on some of government’s plan for 2020, Osinbajo said that the Federal government would sustain growth and ensure creation of more jobs in 2020.

“However, we recognise that government alone cannot muster and deploy enough resources that are necessary for Nigeria’s development. This is due to competing and rising needs as well as challenges in revenue sources and collection,” he said.

Earlier, in her opening address, Uduk said that the

Capital Market Master Plan (2015-2025) was launched to transform the Nigerian capital market to make it more competitive, while contributing its quota to developing the nation through funds mobilisation.

She said that the plan was hinged on four strategic themes, namely; Contribution to National Economy, Competitiveness, Market Structure and Regulation & Oversight.

Uduk said that SEC In partnership with the market had worked on initiatives that simplified the process of raising capital and reduced time to market in contributing to the national economy.

“The recent efforts towards developing the Nigerian commodities ecosystem and the Fintech space are also important contributions to the Nigerian economy.

“In order to enhance market competitiveness, the minimum capital requirements for capital market operators were raised, transaction costs have been re-

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duced for both equities and fixed income segment of the market, a robust complaint management framework was introduced and various other initiatives are being implemented to enhance liquidity.

“Towards improving the market structure, minimum operating standards for all market operators have been implemented. “Some of the ongoing initiatives such as the e-dividend, multiple subscription, direct cash settlement and electronic distribution of companies’ annual reports are geared towards achieving an innovative market structure,” she said.

Afolabi O lowookere, Head, Economic Research and Policy Management, Securities and Exchange Commission, Nigeria, said the country needs foreign direct investment that will go into production, adding that the federal government has to set up a regulatory environment that will help boost investor confidence in the system.

“We need direct invest@Businessdayng

ment because it directly goes to our production activities,” Olowookere said. “We have a lot of people that are unemployed; we need to get them employed.”

He said the country needs to ensure investors have confidence in the market, adding that a way to go about it is setting up a central counterparty that adheres with international standards, and proper corporate governance. Olowookere further said that government is seeking to do infrastructure bond in 2020, and urged states in the federation to tap into the debt market.

Also, Emmanuel Ukeje, the Special Adviser to Central Bank Governor, Godwin Emefiele, said that government has ensured that those repatriating their money did not suffer exchange rate risk.

Ukeje represented Emefiele at the conference.

“We have seen inflation rate fall to 11.24 percent, but still below the target range of 6 percent to 9 percent regulatory limit,” Governor Emefiele, who was represented at the conference, said. “The central bank has been able to create a conducive environment for foreign investors to bring in their money.”

Speaking further on the achievements of the apex bank through its policies, Emefiele pointed out that the Investors’ and Exporters’ (I&E) window of the country’s foreign exchange market has recorded a total investment transaction of about $50 billion since its establishment.

The apex bank had introduced the I&E window in 2017 to boost liquidity in the foreign exchange (FX) market and ensure timely execution and settlement of eligible transactions. This was part of CBN’s continuing efforts to deepen the FX market and accommodate all FX obligations.

“As at the last count, we have had the flow through this particular window of an amount very close to $50 billion in and out since its establishment in April 2017,” the CBN governor said.

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Thursday 14 November 2019

BUSINESS DAY

INTERVIEW Investors have become more conscious of the state of their financial health-Irabor In this interview with BusinessDay journalist, Bala Augie, the head of FBNQuest Wealth Management, Debbie Irabor talks about wealth management and emerging trends in the financial services industry.

Can you give a background on wealth management and why this is an ideal investment solution for high net worth individuals to grow and maximize wealth? ealth Management is the consultative process of providing advisory financial services and solutions which includes financial planning, to Ultra High Net Worth (UHNW) and High Net worth (HNW) clients. It is not a one-size-fits-all service, so we have to understand the investment needs and lifetime financial goals of our clients to enable us to provide the appropriate services and solutions.

The primary objective of the Wealth Management division of FBNQuest Merchant Bank is to provide the holistic approach that Ultra High Net worth and High Net worth clients and their families are increasingly looking for by helping them sustain, grow, manage, and transfer their wealth across generations.

What are some of the wealth management solutions available within FBNQuest Merchant Bank and how long has the Wealth Management division of FBNQuest Merchant Bank been in operations?

FBNQuest Merchant Bank was borne out of the 100 percent acquisition of Kakawa Discount House Ltd

by FBN Holdings Plc, and Kakawa’s subsequent merger with FBN Capital Ltd. As such, the Wealth Management division dates back to over 25 years, from the inception of both institutions whose businesses were merged to become FBNQuest Merchant Bank.

The bank leveraged the combined strengths of both institutions, to offer bespoke Wealth Management financial services and solutions to meet the investment needs and lifetime financial goals of clients.

The experience gained from serving our clients over the years has enriched our understanding of their need for preservation, growth, and transfer of their wealth to future generations. We are client-driven in our approach, so we create the atmosphere and flexibility that makes it easy for our clients to enjoy their wealth anywhere in the world, efficiently and cost-effectively.

To enable us to achieve this, we work very assiduously with our team of in-house experts to bring our clients Wealth Management financial services & solutions anchored on the pillars of Private Banking, Transactional Banking, Fiduciary Services, and Extended Services.

Our Private Banking solution provides clients with the opportunity to maximize the yield on their investments through our FBN Premium Deposits which is a fixed-term investment at competitive and fixed yield and tenor. Our FBN Easy Retirement Package was designed to help clients meet their needs for estate planning,

W

Debbie Irabor

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experts in the Health & Wellness industry, and also through sponsorships of sporting events. We leverage every engagement we have with our clients to add value and provide with a holistic view of happenings in the local and global financial markets. I believe this was evident from the activities at our Customer Forum today.

Looking at the trend in the financial services industry over the years, would you say a lot of people are aware of the different wealth management solutions available and the long and short term benefits of managing wealth?

The fact remains that the changing needs of clients and demographics have the greatest impact on the

‘

Investors have become more conscious of the state of their financial health and the investment opportunities available to them

‘

and protect their loved ones from unwanted third parties’ access to their wealth upon the client’s demise. We also offer Cash Management services through our Liquidity Management Service account and provide opportunities for investments in Government Securities like Treasury Bills and Bonds.

Through our Transactional Banking services and solutions, we process Domestic & International Payments for invisible trades e.g. Medical & School Fees on behalf of our clients.

We provide opportunities for foreign currency investments in Eurobonds – Sovereign & Corporate, Domiciliary accounts, and Fixed Deposits, and Commercial Papers issued by highly rated companies.

Furthermore, we leverage our Corporate Banking business to meet the short-term financing needs of the businesses and corporate entities of our UHNW and HNW clients when required.

We offer our Fiduciary Services and solutions through our Trustee business, which provides the platform for Private Trusts and Estate Planning services to meet the needs of our clients. We leverage the strengths of our subsidiaries, FBNQuest Asset Management and FBNQuest Securities to provide Discretionary and Non-Discretionary Portfolio Management, Mutual Funds, and Equities Brokerage services.

We also provide Extended Services by creating and providing opportunities like the Wealth Management: Customer Forum, an event where our clients can connect with, and engage

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development of the Wealth Management industry over time, in terms of products and service offerings. Let’s take a look at the following factors; Digitalisation has changed the Wealth Management industry, providing various platforms for Wealth Management service providers to disseminate information on their products and services.

In addition to that is the fact that we are now in an era of betterinformed investors. Every Wealth Management or prospective Wealth Management client irrespective of age has access to financial information through various communication channels and data sources.

As such, investors have become more conscious of the state of their financial health and the investment opportunities available to them. This is opening up more people to the concept of investing, and it also makes the future of the Wealth Management industry brighter.

The financial needs of existing or potential investors could vary based on market insights, industry regulations or individual and organisational objectives. As a leading wealth management organization in Nigeria, how are you ensuring customized solutions are provided to help investors achieve their financial goals?

Client Experience will determine their level of loyalty to an organization. Wealth Management clients expect unique, tailor-made services suitable to their individual investment needs and lifetime financial goals. They care for a trusted and experienced professionals who can interpret and explain the impact of the changes in the environment, and propose strategies and solutions to enable them to make informed decisions.

To enable us to help our clients achieve their objectives, we collaborate with our team of in-house experts to bring our clients customised Wealth Management financial services & solutions.

It is not just about the products and services offered, but about the overall experience of the customer pre and post-sales service.

This underscores the role and importance of an individual or one-onone approach in FBNQuest Wealth Management based on trust and long-term relationship between the Relationship Manager and the client.

When we talk about economic stability, this can be dependent on the wealth of individuals and the productivity of different industries in Nigeria for example. What role is FBNQuest playing to ensure more Nigerians are educated on the importance of wealth management and investments?

At FBNQuest Wealth Management, we identify opportunities for and provide Financial Advisory Ser@Businessdayng

vices and solutions through our Retirement and Financial planning sessions & solutions to major Oil & Gas producing and service companies, and other major companies across the different sectors of the economy.

We also offer these services to some associations of Nigerian professionals abroad to enable individuals to meet their lifetime investment goals.

On a wider level, the bank is very supportive of the CBN in its financial literacy drive across the nation, going to areas that are not our target market as a Merchant Bank to perform financial enlightenment exercises.

The market information provided

by FBNQuest research team has been positively impactful on both individuals and companies. 0Also, there are radio and newspaper financial enlightenment series provided by some FBNQuest entities, for example, the FBNQuest Trustees Legacy Series radio show. We leverage every engagement we have with our clients to add value and provide a holistic view of happenings in the local and global financial markets.

With the recently introduced restriction on Open Market Operation (OMO) by the CBN, do you think this decision may influence individuals’ wealth management plans?

The decision by any Wealth Management client to invest in any financial instrument is driven by their investment objectives, risk appetite, and lifetime financial goals. FBNQuest provides a bouquet of products and services offerings both in local and foreign currencies for Wealth Management clients to invest in, and maximize their earnings. As such, in my opinion, the recent restriction on OMO by the CBN will not influence an individual’s wealth management plans.

The investment banking landscape both locally and internationally is beginning to embrace innovative technologies in the provision of varying financial solutions. How is the wealth management business within FBNQuest maximizing technology for internal operations?

The financial industry is one of the pioneers of digital transformation and digitization. However, if you look back, things remained relatively traditional for some areas of the industry like Wealth Management and Private Banking until a few years ago.

FBNQuest Wealth Management has embraced technology especially in terms of automation, digital integration, and data gathering to create personalized and dynamic end-toend experiences for our clients, and to enhance relationship management and marketing efforts.

We continually rethink and reshape our approach to how we can use technology to our advantage especially to accommodate clients’ needs and the next generation of investors, the millennials.

Thursday 14 November 2019

BUSINESS DAY

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BUSINESS TRAVEL Four priorities for African aviation by IATA Stories by IFEOMA OKEKE

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he International Air Transport Association (IATA) called on governments and industry in Africa to focus on four priorities to allow aviation to drive economic and social development on the continent, enrich people’s lives and enable the United Nations Sustainable Development Goals (UN SDG’s).

The four priorities are safety, cost-competitiveness, opening the continent to travel and trade, and gender diversity.

“Across the African continent, the promise and potential of aviation is rich. Already it supports 55.8 billion dollars in economic activity and 6.2 million jobs. And, as demand more than doubles over the next two decades, the critical role that aviation plays in Africa’s economic and social development will grow in equal proportion.

“With the right tax and regulatory framework, the opportunities aviation creates to improve people’s lives are tremendous,” Alexandre de Juniac, IATA’s Director

General and CEO said in a keynote speech at the 51st Annual General Assembly of the African Airline Association (AFRAA) in Mauritius.

Safety IATA highlighted three priorities to improve aviation safety in Africa.

More states need to incorporate the IATA Operational Safety Audit (IOSA) into their safety oversight systems. Mozambique, Rwanda, Togo and Zimbabwe have done so.

Smaller operators should consider becoming IATA Standard Safety Assessment (ISSA) certified. ISSA provides a valuable operational benchmark for carriers not eligible for IOSA. African states need to implement ICAO standards and recommended practices in their regulations. Currently, only 26 states meet or exceed the threshold of 60 percent implementation.

“Our top priority is always safety. And we must never forget that global standards have helped to make aviation the safest form of longdistance transport. There is a good example of that in the safety performance of African airlines.

“The continent had no fatal jet accidents in 2016, 2017

and 2018. That is largely due to the coordinated efforts of all stakeholders with a focus on global standards, guided by the Abuja Declaration.

But there is still more work to do. Taking these three steps will raise the safety bar even higher,” de Juniac said.

Cost-competitiveness IATA highlighted the need for a cost-competitive operating environment for airlines in Africa.

“African carriers lose $1.54 for every passenger they carry.

High costs contribute to these losses Flying is not a luxury—it is an economic lifeline for this

continent. That’s why it is critical for governments to understand that every extra cost they add to the industry reduces aviation’s effectiveness as a catalyst for development,”de Juniac said.

IATA called on African governments to follow ICAO standards and recommended practices for taxes and charges; disclose hidden costs such as taxes and fees and benchmark them against global best practice, and eliminate taxes or cross-subsidies on international jet fuel.

IATA also called on governments to follow treaty obliga-

tions and ensure the efficient repatriation of airline revenues at fair exchange rates. Currently funds are blocked in 19 African states. “It is not sustainable to expect airlines to provide vital connectivity without reliable access to their revenues,” de Juniac said.

Opening the continent to travel and trade IATA also called on governments to liberalize intra-Africa access to markets and urgently implement three key agreements which have the potential to transform the continent.

“My message to governments on this triumvirate of

agreements is simple—hurryup! We know the contributions that connectivity will make to the UN SDGs. Why wait any longer to give airlines the freedom to do business and Africans the freedom to explore their own continent,” de Juniac said.

Gender Diversity IATA also called for the industry to do more to improve its gender diversity and for airlines in the region to support the recently launched 25by2025 campaign.

The 25by2025 campaign is a voluntary program for airlines to commit to increasing female participation at senior levels to at least 25 percent or to improve it by 25 percent by the year 2025. The choice of target helps airlines at any point on the diversity journey to participate meaningfully.

“It is no secret that women are under-represented in some technical professions as well as in senior management at airlines. It is also well-known that we are a growing industry that needs a big pool of skilled talent.

“Africa can be proud of its leadership in this area. But we need to do more. The 25by2025 initiative will help move our industry in the right direction,” de Juniac said.

Turkish Airlines sponsors 2019 African Economic Congress in Abuja

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urkish Airlines, the airline that flies to more countries and international destinations than any other airline in the world, recently became the official Airline sponsor of the African Economic Congress, which held at the Musa Yar’ Adua Centre in Abuja.

Thus, the flag carrier showed its continual support of the growth of the African continent and its commitment to being a part of it. In June, Turkish Airlines launched flights to Port Harcourt, its third destination in Nigeria, connecting the city to over 300 destinations world-

wide.

With over 500 participants, the three-day event which was themed “Building the Africa we want: A Scheme into Africa’s Investment Process and Drive”, focused on promoting essential collaborations between Africa and the world while addressing challenges in areas like trade and investment, agriculture, and economic policy.

Speaking at the event, Mehmet Asik, general manager, Turkish Airlines, Abuja, said “Nigeria remains one of our foremost markets, and we continually improve our services to meet the growing demand for travel in order to foster trade relations.”

“At Turkish Airlines, we

recognize the importance of tourism and connectivity and that is why we pay extra attention to our excellent service and exciting brand experience.

“We consider it is important that our passengers have an unparalleled travel experience when they are on-board our aircraft. We understand our positon within Africa’s aviation landscape and our support to the African Economic Congress is a way of demonstrating that.”

This is coming on the heels of global carrier’s latest destination in Nigeria, Port Harcourt, where the airline has continued its operation of connecting people to the world.

Global passenger demand continues on moderate upward path

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he International Air Transport Association (IATA) has announced global passenger traffic results for September 2019 showing that demand (measured in revenue passenger kilometers or RPKs) climbed 3.8 percent compared to the same month last year, broadly unchanged from August’s performance.

Capacity (available seat kilometers or ASKs) increased by 3.3 percent, and load factor climbed 0.4 percent per-

centage point to 81.9 percent, which was a record for any September.

“September marked the eighth consecutive month of below average demand growth. Given the environment of declining world trade activity and tariff wars, rising political and geopolitical tensions and a slowing global economy, it is difficult to see the trend reversing in the near term,” Alexandre de Juniac, IATA’s Director General and CEO said. www.businessday.ng

September international passenger demand rose 3.0 percent, compared to September 2018, which was a decline from 3.6 percent yearover-year growth achieved in August. All regions recorded traffic increases, led by airlines in North America. Capacity climbed 2.6 percent, and load factor edged up 0.3 percentage point to 81.6 percent.

European carriers experienced a 2.9 percent rise in September traffic, the region’s

weakest performance this year and a decline from the 4.2 percent year-over-year rise recorded in August. In addition to slowing economic activity and faltering business confidence in many of the key European economies, the result was also affected by the demise of a number of airlines, along with pilot strikes. Capacity rose 2.5 percent, and load factor climbed 0.3 percentage point to 86.9 percent, which was the highest among regions.

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Air Peace wins ‘Company of the Year’ award

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igeria’s leading carrier, Air Peace, has emerged company of the year at the 2019 Business Hallmark People of the Year Awards, organised by the Hallmark Newspaper Group.

The event took place on Sunday, November 10, 2019, at Civic Center, Victoria Island, Lagos.

While receiving the award, Ejiroghene Eghagha, the Chief of Finance and Administration, Air Peace, expressed gratitude to the organisers of the award. She stated that it was a great delight to know that Air Peace was being recognised as the company of the year. @Businessdayng

Eghagha said, “It gladdens me and, of course, the entire team to know that Air Peace, West Africa’s largest carrier, is being recognised today as an airline that has significantly contributed to the growth of Nigeria’s aviation industry”.

Eghagha noted that the five-year journey of the airline has not been devoid of challenges but collective determination and visionary leadership have kept us soaring to the top and achieving more firsts. She added that the airline will continue to blaze the trail in the provision of safe and best-in-class flight services to all its customers.

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Thursday 14 November 2019

BUSINESS DAY

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Thursday 14 November 2019

Retail &

BUSINESS DAY

consumer business Luxury

Malls

Companies

Deals

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Spending Trends

Spending Trends

At 75 percent, EKO Atlantic Mall has the highest vacancy rate

conventional markets.

“Even if economic activities pick, the gridlock will continue to discourage people from coming here to shop,” said Adebukunola Taiwo, an Architect and Head of the Apapa Management Office.

Over a decade ago, Nigeria was at cusp of an economic boom as investors had wagered that the country’s rapidly expanding middle class, and a copious young population that craved for consumption would spur growth.

Developers began to respond to the aforementioned benign environment and positive optimism by building American style shopping mall, home to famous end brand stores, movie theatres and large supermarket chains.

In short Chinese developers and other Asian investors were looking to invest in the country’s malls.

However, the economic recession of 2016 that stoked a severe dollar scarcity that paralyzed business activities have crimped consumer spending, and the once thriving malls are not a shadow of themselves.

Nigerians are getting poorer as over 50 percent of a population of 200 million live on less than $1.98 a day; little wonder the country has overtaken India as the world’s poverty capital.

Unemployment rate is at an all-time high of 23 percent, and to further exacerbate the already anaemic situation of consumers is the incessant fuel hike and devaluation of the currency.

The country’s economy has been growing sluggishly as GDP slowed to 1.94 percent in the third quarter, this compared to the 2.10 percent expansion in the second quarter of the year.

Experts are proffering solutions to of high rent for would be tenant retailers, and they said has to formulate policies that will help spur consumer spending.

Dolapo Omidire, lead researcher at Estate Intel, said investors would have to build less elaborate and smaller malls of around 7,000 square meters —around half of the size of typical large malls— and simply focus on delivering space at affordable rates. ”If I build a $100 million mall and people are showing up just to take pictures, then it’s a big problem” said

Omidire, in a recent interview with Quartz.

There are potentials in the Nigerian retail industry as consumers are price sensitive and they crave for shopping.

Experts say the tenant mix matter a lot that people shouldn’t be selling identical products. Malls in the United States, Asia and the Europe houses recreational centres, big parking lots and lounges to relax.

“There are has to be banks, a nice car space, hyper supermarket where people can get what they want, and saloons,” said Abiola.

According to Nielsen Shopper Trends syndicated study, Nigerians shop 30 times per month and they want value and assortment when they shop.

The impact of the country’s first economic recession has left some of Nigeria’s biggest malls sitting half empty. Rising unemployment and inflation rates have shown in a significant decline in footfalls in the big malls, leading to high vacancy rates, a half year report on the performance of the real estate market has shown.

Big malls in the three major cities of the country, including; Lagos, Abuja and Port Harcourt, were the hardest hit by the economic recession.

Novare Lekki Mall, a 22,000 square metre retail facility has a 57 percent vacancy rate as at June 2017, slightly reduced from the 63 percent figure recorded in December 2016.

to cheaper brands, while industry players could lose market share to smaller brands.

Guinness plans to increase its share of income from spirits, and Nigerian Breweries in focusing on its premium Heineken, stout and malt drinks.

In May, Nigerian Breweries had said it was mulling a hike in product to compensate for inflation and heavy levies.

“While a price increase is positive for Guinnees, but it is losing market share to the other players. So a price increase might be offset by a stepper volume decline,” said Yinka Ademuwagun, analyst at United Capital Limited.

The rate of growth in the Nigerian economy has been slow, unemployment high, poverty high, while the new minimum wage has not been implemented.

GDP expanded by 1.90 percent in the second quarter of 2019, a decline of 2.10 in the first quarter (Q2) of 2018, and below 2.38 percent growth in the fourth quarter of 2018, according to data from the National Bureau of Statistics (NBS) The manufacturing industry contracted by 0.13 percent, and another contraction means the industry will slip into a recession.

The proposed plan by the Federal Government to increase Value added Tax (VAT) to 7.50 percent from 5 percent, hike electricity tariffs could damp consumer spending in a country where over 50 percent of its population live on less than $1.59 a day.

The future of economic growth and development in Nigeria lies in the private sector, thus we believe the

federal government must begin to implement policies that would foster a more accommodating business environment, according to analysts at CSL Research Limited.

The report also revealed that beer makes up just 16 percent of alcohol consumption in Nigeria, while other drinks make up 84 percent due to the high popularity of home-brewed beverages in the country Nigeria has an average beer consumption of 12.28 litres per year, the largest in Africa, according to a report by the Market Research Group There are over 8 functional breweries in Nigeria with a cumulative production capacity of over 17.72 million hl/a majority. The majority of these breweries are situated in Southern part of Nigeria.

BALA AUGIE

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enants are deserting Nigeria’s new large sized malls with alacrity, signalling dwindling consumer purchasing power and the deteriorating state of the economy.

With a vacancy rate of 75 percent, Atlantic Mall in Lagos, which is reputable to be one of the largest malls in Africa in West Africa, are top on the list of retail outlets unoccupied, according to a report

by Northcourt Retail Estate.

The Mall has a 107,500 square meters retail facility, and it includes a vast array of amenities and entertainment, with ample on-site parking.

Novare Mall came in at 28 percent, down from 47 percent at the end of 2017.

Artee’s Port Harcourt Mall, Big Treat and Genesis Centre had 8%, 15 percent and 25 percent respectively.

Ceddi Plaza and Gateway Mall in Abuja recorded 21% and 38% respectively.

Abuja’s largest mall – Jabi Lake (20,000sqm) recorded the highest vacancy rate in city – 40 percent due to a number of stores that closed down in Q1 and high rentals.

The high vacancy rate is largely driven by spiralling service charge as a stuttering economy makes it difficult for tenants to break even.

Shoppers seen at Malls are

low income earners who buy basic food items as rising inflation and hike in the fuel price has put them in check.

The economy doesn’t support growth and a lot of companies are closing down due to high cost of production. We don’t have the amenities and tenants can hardly survive, according to Otukoya Abiola, Centre Manager Leisure Sulure, and Lagos.

Next year will be tougher because the Value added Tax (VAT) increase will result in increased price of diesel, which means the service charge will further go up. The service charge would have gone down if there was no need to run the generator,” said Abiola.

Abiola said that Landlords will have to bear the burden of overhead cost so that tenants can stay. It is another form of subsidy.

Service charge as much as

N120, 000 and N150, 000, but it has been increasing every year.

A total of 9 stores at the Shoprite malls are empty while 3 are sealed, some of them the vacant spaces are large enough to take 2 offices.

The stores are on the same floor with KFC Foods, but the 26 stores at Leisure mall have tenants.

A visit to the Apapa Malls shows a total of 19 stores are without tenants, even the cinema hall has been sealed.

Some of the top brands that have evacuated include: Ruff and Tumble, the seller of kid clothes, Samsung Phones, and Cash and Carry.

Experts attribute the vacancies in Apapa to the menacing gridlock in the town as a lot of high end earners have relocated to other parts of the state, while those that stay very close to the city rather go shopping in other malls or

Company

Brewers are walking on tight rope BALA AUGIE

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few years ago, brewers were optimistic that a burgeoning young population that for consumption would spur investment as they launched new products and embarked on restructuring.

The prognosis for the economy were benign that ABInBEV- the world largest beer maker- decided to merge three subsidiaries in Nigeria (International Breweries, Pabod Breweries and Intafact Breweries), and it also spent $250 million on the construction of three new plants.

As at today, however, a stuttering economy, deteriorating consumer spending, stiff competition, slow volume growth, higher material costs, and higher excise du-

ties, have eroded the earnings of beer makers, making the sector the worst performer among the fast moving consumer goods firms.

The numbers from the Nigeria Stock Exchange (NSE) are bad, sending a chill down the spine of investors.

For instance, the combine revenue of the three largest players (Nigerian Breweries Nigeria Plc, Guinness Nigeria Plc, and International Breweries) increased by 4.81 percent as at September 2019.

That compares with an uptick of 21.33 percent recorded in 2018-17 financial year and 16.50 percent increase in 2017-16.

Guinness and International Breweries recorded losses of N370.15 million and N16.44 billion in the first nine months of the year, while Nigerian Breweries saw a 17.01 www.businessday.ng

percent drop in net income, as margins continue to deteriorate.

The cumulative average net profit of the largest beer makers stood at (0.045 percent) as at September 2019, which means they are not turning each Naira invested sales into higher profit.

International Breweries may continue to struggle as it has a debt load of N243.82 billion as at September 2019, which is 13 times higher than total equity of N18.17 billion, as it a step away from technical insolvency.

With the terrain still challenging, analysts believe brewers will be cautious on price increase as they look to pass on the burden of increase in alcoholic beverage and fend off the effect of rising inflation.

Also, consumers are likely to respond a hike by switching

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Thursday 14 November 2019

BUSINESS DAY

Retail &

consumer business cOMPANY

Rite Food ignites competition in chapman drink market with Bigi chapman Until the introduction of Bigi Chapman into the market, Smoov, a product from La Casera Company was the only player in that market segment.

Chapman is a non-alcoholic drink, that comes in a blend of fruity flavour, usually of the red color. It is often described as Nigeria’s favourite drink and though predominantly served without alcohol, it can also be served with a hint of vodka or rum.

Not ready to relinquish its market leadership to Bigi Chapman, Smoov has

OLUFIKAYO OWOEYE

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fter disrupting the carbonated soft drink market, which has seen the two heavyweights, Pepsi and Coca-Cola swallow their pride and re-adjust their earlier price change; Rite Foods is not slowing down at least not anytime soon.

The launch of Bigi Chapman into the market is set to ignite competition in the silent Chapman drink segment.

increased its quantity by 20percent to keep its customer base from dumping its product for Bigi Chapman.

Both companies offer their products for N100.

Bigi and La Casera have been sworn enemies since the entrance of Bigi into the drink market. Bigi launched the Bigi Apple to challenge the dominance of La Caser in the market.

This is a huge success as it has left La Casera to play only on the fringes of the market, as efforts by La Casera to rebrand has yielded little or no result.

Also, industrial disputes between the management and its workers that led to a shutdown of its factory in the past have further worsen its chances in the market.

Rite Foods, a Ess-Ay Holdings was established in 2007, offering sausage rolls, but Bigi didn’t become a household name until the company made inroads into the carbonated drinks market in 2016 and three years into the soft drink market, it has continued to challenge big players in the consumer space.

Malls

Nigeria drops three places in global retail ranking as economic woes bite …industry sales down by $20bn in 3yrs BUNMI BAILEY

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igeria moved three places downwards in the newly released global retail development index (GRDI), indicating that the woes facing players in the retail space is not yet over.

Of the 30 countries surveyed by A.T. Kearney, an American-based management consulting firm, Nigeria ranked 30th, falling steadily from 19th and 27th position in 2016 and 2017 respectively.

“The consistent drop in Nigeria’s rating is an affirmation of weak purchasing power. Our growth of about two percent did almost nothing to spur aggregate demand,” said Damilola Adewale, a Lagos-based economist.

Adewale noted that the high vacancy rate in Nigeria’s malls is another contributory factor. “You cannot expect a super performance in empty halls.

Vacancy rate in Palms mall and Atlantic mall, for instance, is over 70%.”

Aggregate sales revenue

in Nigeria’s retail space has headed south at least in the last three years, dropping by $4 billion to $105 billion in 2019, from $109 billion and $125 billion in 2017 and 2016 respectively.

The GRDI ranks 30 developing countries on a scale of zero to 100, the higher the ranking, the more urgency to enter a country. Countries are selected from 200

nations based on three criteria which are country risk, population size and wealth.

Out of a total score of 100, the country dropped to 35.6 in 2019 from 39.9 and 43.8 in 2017 and 2016 respectively.

In 2015, it ranked 23rd position but it improved to 19th position in 2016.

Nigeria was in recession for five consecutive quarters but returned to a

positive growth territory of 0.72 percent in the second quarter (Q2) 2017 from -0.67 percent in Q1 2016. Also, the Nigeria’s per capita income declined to $2,049 in 2018 from $3,268 in 2014, according to the International Monetary Fund (IMF).

According to Ayorinde Akinloye, a consumer analyst at CSL Stockbrokers, the fundamentals of the

consumer goods and retail industry which are job creation, poor income growth and unemployment has been very weak and weak job creation and unemployment has led to pressured consumers’ income and ultimately weakened demand.

“Most companies implemented significant price hikes in 2016 which has impacted volume growth.

Furthermore, while we have the population, the poor income characteristics have ensured the quality of consumers in the Nigerian market remains poor,” So really, while the consumer space has grown horizontally, vertical growth has been absent and that basically describes why retail sales in Nigeria is dwindling and why the market is becoming unattractive,” Akinloye further explained.

Data from the National Bureau of Statistics on Gross Domestic Product (GDP)

by Income and Expenditure approach at 2010 purchaser’s values show that consumption expenditure of households has been declining at varying pace

Team Lead: Bala Augie, Olufikayo Owoeye; Analyst: Bunmi Bailey; Graphics: Fifen Eyemisanre Famous www.businessday.ng

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since it rose by 1.5 per cent in 2015.

“This just shows that other countries’ GDP per capita is rising faster than Nigeria’s own. And moreover, our GDP per capita has been shrinking since 2014 because our population is growing but GDP per capita is relatively slow,” Eronmosele Aziba, Consumer analyst, Tellimer Group, said.

Aziba further said that the retail segment of Nigeria, which is the bulk, is still facing economic pressures because people don’t have enough to spend.

According to data from National Bureau of Statistics, Nigeria’s trade sector which comprises of wholesale and retail trade is the second largest sector after agriculture, accounting for up to 16 percent of GDP and since 2016; the country has witnessed negative growth in 8 of the last 12 quarters.

Ghana was ranked the fourth country on a list of 30 countries making it the top African country based on the potential for strength and investment in their domestic retail markets.

Thursday 14 November 2019

BUSINESS DAY

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LegalBusiness BD Business Law Industry Report Practice Intelligence Partnerships

PUBLIC INTEREST & DEVELOPMENT LAW:

Akpata calls on stakeholders to seek innovate ways to resolve C-H-C disputes

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he Immediate past Chairman of the Nigerian Bar Association Section on Business Law (NBA-SBL), Olumide Akpata has called on legal practitioners and Alternative Dispute Resolution (ADR) experts to devise innovative and practical methods for managing and resolving Companies-HostCommunities (C-H-C) Conflicts.

Akpata, who made this call at the annual conference of the NBA Section on Public Interest & Development Law (SPIDEL) in Abia State last week, stated that in the absence of structured, institutionalised ADR process for settling C-H-C conflicts, the responsibility has fallen on those who play in the dispute resolution space to devise innovative and practical processes to avoid C-H-C conflicts altogether (if possible); detect potential C-H-C conflicts before they crystalize; and resolve the conflicts if they crystalize without destroying relationships.

The Templars’ Partner who spoke on the topic, “Alternative Dispute Resolution: Utilizing Institutional And Legal Strategies For Managing

Olumide Akpata speaking at the SPIDEL conference

And Resolving CompaniesHost-Communities (C-H-C) Conflicts”, broached the topic by first, weighing whether any institutionalised alternative dispute resolution strategies for C-H-C conflicts presently exist.

Akpata stated matter-of-factly, that there was no well-defined legal or institutional framework for resolving C-H-C conflicts outside of litigation, even though such conflicts have the tendency to be combustive if not properly managed.

“This may be contrasted, for

example, with trade disputes where there are defined procedures for dialogue, negotiations and even industrial actions. Indeed, there is even a dedicated piece of legislation – the Trade Disputes Act, for good measure”, he said.

He further disclosed that the lot of C-H-C conflicts, have been dependent on loose negotiations between the affected companies and host communities at the very best, or claws-out litigation as a middle ground, or outright resort to self-help at the very worst.

Realigning Business Strategies for Law firms T he age-old argument whether Law is simply a noble profession or a business, has been long laid to rest. Law is both a noble profession and a multi Dollar business. Only a well-run business can be an efficient and successful professional firm. A Law firm is not run on technical knowledge alone but on sound business skills, knowledge and practices. The health of any business depends on the skills of its management team – its Leaders, its Partners. Whether a business was set up with the simple objective of making money or to render vital not-for-profit services, the safest way to succeed is to be highly efficient in order to deliver good services. To reposition the Bar in its critical role in economic and social development, law practices must strive for excellence.

Many lawyers, no doubt have difficulties balancing the technical and the management functions of running a law firm. A wise lawyer

Members of the NBA-SBL Law Practice Management Committee on a courtesy visit to AIG Imoukhuede

who wants to be successful in the business or practice of law must admit his/her shortcomings and constantly strive to improve on them. Research has shown that people who are exceptionally good in business are not so because of what they know but because of their insatiable need to know more. To be good at the business of law, we must be willing www.businessday.ng

to move out of our comfort zones and embrace new knowledge and perspectives.

Law practice management is concerned with bringing best business and management practices into the legal context, focusing on such topics as strategic planning, financial management; people management – talent recruitment, development and https://www.facebook.com/businessdayng

“It is, of course, not entirely strange to find a hybrid of sorts that incorporates elements of all three options in some C-H-C conflicts”, he said, stating that in the more complex cases that cut across multiple host communities, it has been helpful also to obtain affected host communities’ consent to appoint an independent-minded third party (typically someone from the host communities’ region) to serve as a co-ordinating counsel on behalf of the host communities for the

retention, business development and marketing, information technology, operations, facilities and space management, succession planning, etc. The law firm today requires multi-disciplinary business skill to thrive and remain attractive to the next generation of lawyers The Law Practice Management Committee of the NBA Section on Business Law (“SBL-LPMC”) in collaboration with Association of Law Firm Administrators, Nigeria (“ALAN”), is organising a workshop on Tuesday, November 19, 2019 by 9am with the theme “Realigning Business Strategies for Law firms” at The Wheatbaker, 4 Onitolo Road, Ikoyi, Lagos. The moderator of the workshop will be Aigboje Aig-Imoukhuede, FCIB, CON The theme is informed by the many challenges faced by the legal community on how best to incorporate business principles and good governance into the @Businessdayng

settlement of the dispute.

The former NBA-SBL Chairman noted however that, the specific approaches for achieving these goals necessarily differ, citing his firm’s experience in dealing with host communities’ conflicts.

“Our firm’s approach, however, which has been deployed successfully in practice for different clients across different industries and sectors, has been to establish from the outset a mutually-acContinues on page 33

practice of law. The workshop will focus on the evolving and the multi-disciplinary nature of legal practice as well as the critical need for innovation and capacity building in the legal profession with a view to developing a wide range of management practices as an indispensable tool for successful law firms. We have a panel of seasoned legal practitioners from different sized firms, in house and external counsel who will be sharing their experiences and taking on hard questions. They include Soji Awogbade, Partner, Aelex; Seye Kosoko, Company Secretary, FBN Holdings Plc.; Jumoke Lambo, Partner, Udo Udoma & Belo Osagie; Odunola Onadipe, Lead Operating Officer, Detail Commercial Solicitor; Afolabi CaxtonMartins, Partner, ACAS LAW; Fola Akande, Company Secretary, Cadbury Plc; Demola Akinrele, SAN, Partner, F.O Akinrele & Co; and Chinyere Okorocha, Partner, Jackson, Etti & Edu.

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Thursday 14 November 2019

BUSINESS DAY

CASEREVIEW

BD

LegalBusiness

Adebayo Adelabu & Ors Vs Seyi Makinde & Ors: a review of the decision of the court of appeal TOLULOPE ADEREMI

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he media (as now styled; the traditional and new media) has been inundated with commentaries over the recent judgment of the Court of Appeal in respect of an appeal by the All Progressives Congress and Mr. Adebayo Adelabu against the judgment of the Election Petition Tribunal of Oyo State, which declared Seyi Makinde as the winner of the gubernatorial election.

In its judgment, the Court of Appeal granted (albeit substantially) the prayers of the appellants, but in the same breath, reportedly ordered parties to maintain the status quo ostensibly because it notes that it (the court) was caught by time to order a retrial. It is noteworthy that the judgment in the ratio of the lead judgment to dissenting judgment, was four to one.

The lead judgment indeed raises interesting issues of law, which are now hereunder considered.

I must say that, having not read the full text of the judgment (as same has not been made public), my views are somewhat restricted to various reportage and as such this opinion, at least for now, is only preliminary and subject to a further review when the judgment of the Court is made public. This discourse is therefore limited in scope and only to matters which is already made public (by witnesses of the proceedings). This notwithstanding, the Court of Appeal’s judgment was reported to have come to its conclusion to wit: a) That the Tribunal’s decision was perverse because the Tribunal did not properly evaluate some exhibits/documents before it; b) That the Court is unable to order a retrial because the Tribunal had exhausted its 180 days’ period; and c) That rather than upturn the Tribunal’s decision, the Court of Appeal ordered parties to maintain status quo.

These three issues will be discussed seriatim.

The judgment of a Court can only be held to be perverse by a higher Court after the evaluation of the evidence upon which the trial Court or Tribunal based its findings. What then constitutes a perverse decision and what should an appellate court do when faced with a similar

Makinde-left-and-Adelabu.

situation? In the case of Atolagbe v Shorun (1985) 2 (Pt 2) 360, the Supreme Court held, per Oputa JSC, that ‘a decision may be perverse where the trial court took into account or where the judge shuts his eyes against the obvious.’ Whilst some reports have it that some documentary evidence tendered before the Tribunal were not properly evaluated, it may just have been the case, if indeed this is true, there may have been an oversight of a very fundamental evidence. A plethora of case laws speaks to the role of an appellate Court on evaluation of evidence.

In the case of Otu & Ors. v Otu & Ors. (2018) LPELR 45169(CA), the Court of Appeal restated its role, to the effect that ‘the appellate Court such as ours, cannot be at large over the decision of the lower Court. The role of the appellate Court is to scrutinize to see if in the case at hand, the Court below gave a proper assessment and evaluation of the evidence placed before it and properly apply the necessary laws to excavate from the rubbles of evidence the justice of the matter…this Court will not disturb or unsettle the findings of the Court of probative value to such evidence as this is the priwww.businessday.ng

mary function of the trial Court…

It is only when the trial Court failed to evaluate such evidence properly that an appellate Court can re-evaluate evidence.’

The incursion of the appellate Court into re-evaluation of evidence of the trial Court is usually largely dependent on whether the evidence is viva voce or documentary. When documentary evidence is improperly evaluated by the trial Court, the appellate Courts have the vires to re-evaluate the evidence since it is permitted to take judicial notice of every document before it in the record of appeal. See Garuba v Omokhodion (2011) LPELR 1309 SC. However, where the evidence is one of oral evidence, then an appellate Court will be handicapped to re-evaluate the evidence since it does not have the opportunity to observe the demeanour of the witness(es) who gave the evidence. It is not absolutely clear whether the evidence which the Court of Appeal in Ibadan held to have been wrongly evaluated as to occasion the perversity of the judgment of the Tribunal is purely oral, documentary or both.

Until that is resolved when the judgment is made public, the is-

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sue is best left hanging.

On the second issue of the Court’s refusal to order a retrial because the Tribunal has exhausted its 180 days. The Court must be right in its decision not to order a retrial. In the case of ANPP v Goni (2012) 7 NWLR (Pt 298) 147, the Supreme Court held that ‘the time fixed by the Constitution is like the rock of Gibraltar or Mount Zion which cannot be moved.’ It follows that the Court of Appeal cannot extend time to rehear the case before the Tribunal. It is self-evident that the time bar has foisted a fiat accompli on the Court of Appeal since the Tribunal’s time had elapsed. The Supreme Court had also cautioned the Court of Appeal against ordering retrials where the time of the Tribunal has elapsed. It did so in the case of ANPP v Goni (supra) where it noted that: “It is my considered opinion that by the lower Court ordering a retrial by a tribunal which had ceased to have jurisdiction in a matter, it attempts to create jurisdiction in the said tribunal by operation of a court order which is not only very erroneous but unacceptable.”

The pertinent question therefore is, whether the Tribunal having run out of statutory time @Businessdayng

allowed, the Court of Appeal may have rectified what now appears to be a manifest injury. It is my view that the Court of Appeal is imbued with the jurisdiction to invoke its original jurisdiction to seat as the Court of first instance to admit evidence which were not properly tendered or evaluated by the trial Court. Section 16 of the Court of Appeal Act grants the Court general powers, including the power to sit as a Court of first instance. Whilst this is hardly invoked in practice, I take the firm view that the interest of justice in the case of the appeal under examination should have been one of such rare occasions where the Court of Appeal should have bent over backwards to invoke its powers under this section.

The third issue is whether the Court of Appeal can make a judgment antithetical to its findings. It is my view that this is most unlikely. Bowen LJ, in the case of Cropper v Smith (1884) 26 Ch. D 700, echoed that it is the primary duty of the Court to decide the rights of parties. If the findings of the Court were that the judgment of the Tribunal is perverse, it will similarly appear perverse for an appellate court to endorse such a judgment as that will become a judicial endorsement of what was found to be perverse. An appellate Court cannot perpetuate itself in what it perceives as the error of the lower Court by sitting on the fence and ordering parties to maintain ‘the status quo’.

Be that as it may, the Court of Appeal has delivered its judgment, and the judgment is to the effect that status quo be maintained.

Status quo has been interpreted by the Supreme Court in Ojukwu v Military Governor of Lagos State (1986) 2 SC 277 to be the state of affairs before the institution of the suit. The state of affairs to be maintained is therefore the declaration of Mr. Seyi Makinde as the democratically elected governor of Oyo State. Whilst APC and Mr. Adebayo Adelabu has a right to appeal to the Supreme Court, the state of affairs until the Supreme Court holds otherwise, is that Mr, Seyi Makinde remains the governor of Oyo State.

It is therefore apposite to congratulate His Excellency, Engineer Seyi Makinde and his deputy, Engineer Rauf Olaniyan on this victory.

Thursday 14 November 2019

BUSINESS DAY

GREYMATTER

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LegalBusiness

Central Bank of Nigeria automates Nigerian Export Proceeds Form (“Form NXP”) for Commercial Exports ADEOYE ADEFULU

O

n Monday, October 28, 2019, the Central Bank of Nigeria (“CBN”), pursuant to powers conferred on it by the Foreign Exchange (Monitoring & Miscellaneous Provisions) Act, 1995 to issue guidelines regulating export and import trade transactions in collaboration with relevant governmental entities, issued a circular tagged “Automation of Form “NXP” on the Trade Monitoring System (“TRMS”) (the “Automation Circular”).

As provided in the CBN’s Revised Foreign Exchange Manual, 2018 (the “Revised FX Manual”), any person intending to export any product from Nigeria shall, in the first instance, process the Nigerian Export Proceeds Form (generally known as “Form NXP”) through an Authorized Dealer Bank, irrespective of the value and whether or not payment is involved. Form NXP is used for commercial exports.

Overview of the provisions of the Automation Circular Pursuant to the Automation Circular, with effect from Thursday, October 31, 2019, e-Form ‘NXP’ has replaced the hard copy Form NXP hitherto used for processing commercial exports (including oil & gas and non-oil & gas exports) from Nigeria. As from that commencement date of the automation process, a fee in the sum of Five Thousand Naira (N5,000.00) shall be charged per declaration for e-Form ‘NXP’.

Henceforth, as stated in the Automation Circular, all Authorized Dealers are required to ensure that: Form ‘NXP’ for commercial exports are only processed electronically on the CBN’s TRMS; Every export-customer obtains a valid Tax Identification Number (“TIN”) from the Federal Inland

Revenue Service /Joint Tax Board, as the TIN shall constitute a condition for access to the TRMS; Adequate web-based system is put in place in order to allow exporters to initiate and generate the e-Form ‘NXP’ from the comfort of their various locations; A direct debit mandate is emplaced whereby the fee charged for each declaration for e-Form ‘NXP’ will be debited first to the relevant Authorized Dealer’s current account

of the Revised FX Manual. However, the only difference is that, after the transition period, such extension will no longer be granted in respect of any unutilized hard copy Form NXP. With the establishment of the automation process, inter-agency inspection and regulation required in export processing arrangements are expected to become a lot more seamless and the length of time required to process export documents

regulatory action undertaken by NAFDAC and CBN (apparently in furtherance of the objectives of the TRMS), all e-permits/licenses/notices issued by NAFDAC in respect of NAFDAC-regulated products were, in September 2019, integrated with the CBN’s e-Form ‘M’ on the Nigeria Single Window Trade Portal.

Obviously, automation of Form ‘M’ and (now) Form ‘NXP’ will enhance the country’s rate of Trading Across Borders – one of the reform

before the charge is subsequently recovered by the Authorized Dealer from the export-customer; and Charges imposed on exportcustomers in relation to the e-Form ‘NXP’ are separated from other charges levied by the Authorized Dealer.

substantially reduced because the TRMS, as a digital platform, provides all the agencies and intermediaries involved online real-time access to uploaded documents, such as the e-Form ‘NXP’.

Depending on the nature of goods being processed for export from Nigeria, the agencies and intermediaries involved in the process include the CBN, Authorized Dealer Banks, Nigeria Customs Service, Pre-shipment Inspection Agents, Shipping Lines & Airlines, National Agency for Food and Drug Administration and Control (“NAFDAC”), Standard Organization of Nigeria, Department of Petroleum Resources, Nigerian Port Authority, National Bureau of Statistics and the Nigerian Export Promotion Council.

initiatives of the Presidential Enabling Business Environment Council (PEBEC) being implemented by the Enabling Business Environment Secretariat (EBES) through the various National Action Plans on the Ease of Doing Business in Nigeria.

Going forward, exporters are advised to take immediate steps towards complying with the new regime of e-Form ‘NXP’ while also ensuring that hard copy Forms NXP already established are utilized within the 90-day transition period.

Transitional Matters The Automation Circular provides for a 90-day transition period within which all hard copy Forms NXP, established prior to the commencement of the automated system (that is, on or before October 30, 2019), must be utilized. Thus, from October 31, 2019, all existing hard copy Forms ‘NXP’ are required to be utilized within 90 days of their establishment, failing which they will be deemed to have been cancelled.

Commentary We note that the 90-day transition period aligns with the number of days within which an expired Form NXP can be extended, in the first instance, under Memorandum 10 www.businessday.ng

The TRMS was developed and is being deployed to facilitate automation of all foreign exchange forms in Nigeria, which include Form ‘M’ (for Imports); Form ‘NXP’; Form ‘NCX’ (for Non-Commercial exports); and Form ‘A’ (for Invisible Trades).

Please recall that, in a coordinated

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The Grey Matter Concept is an initiative of the law firm, Banwo & Ighodalo.

DISCLAIMER: This article is only intended to provide general information on the subject matter and does not by itself create a client/attorney relationship between readers and our Law Firm or serve as legal advice. We are available to provide specialist legal advice on the readers’ specific circumstances when they arise.

@Businessdayng

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Thursday 14 November 2019

BUSINESS DAY

PHOTOFILE

BD

LegalBusiness

Photos from SBL Club, Uniben Chapter;

L-R: Niyi Immanuel, Senior Associate, Streamsowers & Kohn;Prof. Amos Enabulele, LLM, PhD, Professor of Public International Law, Faculty of Law, University of Benin; Abolanle Ayoola, Associate, Odujinrin & Adefulu; Oyeyemi Aderibigbe, Senior Associate, Templars; Caleb Adebayo, Associate, Templars; Nnenna Udoye, Programme Officer, NBA-SBL; E. Eboigbe, Lecturer, Department of Business Law, Faculty of Law, University of Benin; Senator Ihenyen, Lead Partner, Infusion Lawyers

L-R: Zaiynarb Mukhtar, Former Student Coordinator, SBL Club, Uniben Chapter; Caleb Adebayo, Associate, Templars; Oyeyemi Aderibigbe, Senior Associate, Templars; Abolanle Ayoola, Associate, Odujinrin & Adefulu; Niyi Immanuel, Senior Associate, Streamsowers & Kohn; Nnenna Udoye, Programme Officer, NBA-SBL; Senator Ihenyen, Lead Partner, Infusion Lawyers

NBA Port-Harcourt branch invites Akpata to speak on the place of lawyers in Nigeria’s economy Olumide Akpata was the guest speaker at the NBA Port-Harcourt Branch Monthly Meeting recently where he spoke about ‘The Place of Lawyers within Nigeria’s Economy’.

The meeting which held at the NBA Port-Harcourt House in old G.R.A was hosted by Letam Saronwiyo and Femi Adegbite. See excerpts of Akpata’s very insightful presentation in our next edition.

A cross section with the final year law students

Law & Finance Managing Partner of Metropolipan Law Firm, Ummahani Ahmad Amin (Middle), spotted at the 2019 SUKUK summit in Luxembourg, where she spoke on the green sukuk panel. Amin was also the convener of the just concluded 4th AICIF Conference which held the Eko Hotel & Suites in Lagos, Nigeria.

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@Businessdayng

Thursday 14 November 2019

BUSINESS DAY

INDUSTRYFILE

BD

33

LegalBusiness

GEPLAW trains power sector stakeholders on bilateral trading … Provides insight on structuring bankable transactions within the eligible customer regime

G

eorge Etomi & Partners (GEPLAW) recently organised a two-day workshop on “Bilateral Trading In The Power Sector: Structuring Bankable Transactions Within The Eligible Customer Regime”.

The workshop, which was facilitated by experts, drawn from regulatory bodies, consultants and operators within generation companies and distribution companies, addressed amongst other things, the legal and commercial framework for the Eligible Customer regime, Transaction Structuring & Funding, The discourse centred on Investor Concerns, Project Bankability, Financial Structuring and Stakeholders’ Perspectives on the Regime.

Ahmadu Zubairu, the General Manager of the Legal, Licensing and Compliance department in the Nigerian Electricity Regulatory Commission (NERC), who rep-

Participants and facilitators at the workshop

resented the Commissioner, Dafe Akpeneye was the key facilitator of the workshop.

In his presentation, he highlighted the intent of the Regulator in using the Eligible Customer Regulation as a tool for encouraging investment and participation in the sector. Detailed analysis of the provisions of the Regulation,

the current low state of participation, latest developments and challenges encountered in the regime were discussed.

It was noted that the general climate of the power industry had a direct impact on the level of participation within the Eligible Customer regime. It was also agreed that the framework for Com-

petition Transition Charge is vital to securing adequate participation of stakeholders, among other factors.

Other critical developments such as the release of the Franchising Regulation, the NERC Minor Review for cost-reflective tariffs and the agreement between the Nigerian and German govern-

ments for investment were cited as reassuring factors to encourage more investment in the sector.

Participants were trained on the dynamics of deal structuring for captive power, funding considerations and sector-specific investor concerns. In addition, stakeholder views were heard from the Generation companies and the Distribution companies regarding the impact of the Regulation on their operations.

It was agreed that the settlement of the existing challenges with the commercial and industrial consumers, which constitute the Eligible Customers, will unlock the potentials of Regulation and attract untapped investments into the sector. The workshop was of utmost benefit to participants and appropriate feedback was given to the Regulator on measures to secure increased participation under the regime. w

Public Interest & Development Law: Akpata calls on stakeholders.....

Continued from page 29

tually-acceptable, overarching contractual framework (usually a Memorandum of Understanding) to govern the relationship of our clients and their host communities,” he said.

According to Akpata, the contractual framework would establish, among other things, channels of communications and feedback between the companies and their hosts, so that grievances are relayed effectively before they become protests.

He continued, “It would also establish appropriate protocols for interface between the companies and their host communities at different, ascending levels, including providing for Liaison Officers to be appointed to the companies by the host communities”.

These Liaison Officers serve as the conduit for day-to-day interface between the companies and their hosts and have proved quite effective in resolving minor run-ins between member of the communities and the companies.

“For conflicts that require stronger intervention, the relevant traditional institutions of

host communities—the Palace, council of elders, assembly of village heads, youth associations, etc., could be enlisted to play mediatory roles, especially if these institutions were involved (as they should) at the time the memorandum of understanding was concluded. Usually, these institutions can weigh in on brewing conflicts before they escalate and proffer helpful ways to manage them”, Akpata said “Overall, by following a relationship-building approach with host communities that, fundamentally, channels negotiation and mediation, we have been able to successfully manage and resolve C-H-C disputes that could have resulted in potentially protracted litigation at a minimum,” Akpata thus proposed a concerted, co-ordinated approach among the key players of Government, relevant companies and the host communities.

“On Government’s part, there is need for a regulatory framework that would obligate companies to engage with their host communities as well as prescribe the parameters and mechanism under which companies www.businessday.ng

and host communities must notify each other of disputes and make good-faith attempts to resolve them. For example, we could imagine a regulatory framework which imposes specific pre-action protocols on host communities and companies, as a pre-condition to validly exploring litigation.

“Such a protocol could, require host communities to appoint representatives who must liaise with their guest companies and through whom notice of any dispute must be communicated; obligate both companies and host communities to respond in a timely manner to notifications of disputes received from each other; and impose some form of mediation process (to be administered by an independent third party) in which the decisionmaking representatives of both the companies and the host communities must participate” he said.

According to him, given the strides that court-ordered mediation has made in settling civil cases, it is not inconceivable that such a framework could significantly reduce the potential for C-H-C conflicts to spiral out of

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control.

On the other hand, he urged companies to devote due attention to their interactions with host communities in project planning and execution. In other words, as a conflicts-avoidance tool, the interest and well-being of host communities should form an integral part of a company’s operations rather than be treated as a collateral matter.

Further, being able to connect with the traditional institutions in the host communities from the outset, and to carry them along throughout the lifespan of the project, is usually a priceless tool for companies to manage CH-C conflicts if they arise.

Akpata also highlighted other measures such as, strict compliance with international best practices in executing projects, to ensure that the host communities’ environment suffers minimal degradation, as well as establishment of Corporate Social Responsibility initiatives that mainly respond to needs identified by the host communities themselves rather than those assumed by the companies.

“Finally, host communities, at a minimum, stand to gain @Businessdayng

when they co-ordinate their institutions and interest groups to ensure that communications and engagements with their guest companies are undertaken through mutually-recognised channels. Our experience shows that seemingly intractable C-HC conflicts tend to be fuelled by cracks, rebellion and factions among relevant host communities’ institutions. As such, eliminating discord among members of host communities is a critical step towards an enduring management/resolution of C-H-C conflicts”, he said.

The former Chairman of the NBA-SBL concluded with a note, that there was no hard or fast rule about resolving C-H-C conflicts, given that there was also no statutory or institutionalised framework for managing these disputes.

As such, regardless of the alternative dispute resolution process that one fancies, the fundamental strategy in our experience is to ensure that the host communities’ buy-in into that process was secured at the earliest stages of the companies’ operations and is sustained for as long as the companies operate in their hosts’ territory.

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Thursday 14 November 2019

BUSINESS DAY

Corporate Social Impact

Daddy Femi and DJ Cuppy Drop N5billion like it’s hot Stories by ONUWA LUCKY JOSEPH

W

ith the Otedolas, it’s either grand, it seems, or nothing. Not for them small, patchy measures that barely hold things in place. This much was evident again at the Gold Gala organised by the DJ Cuppy Foundation where her father Femi Otedola donated N5bn and his bosom buddy, DJ Cuppy’s godfather, Aliko Dangote, shelled out another N100m, all to help support the children in Nigeria’s North East where for many years many children have dropped out of school due to the combined activities of Boko Haram, ISWAP and Fulani bandits.

This surge of criminal activities has left many families displaced; thousands of breadwinners dead or unaccounted for and children who should be children become untimely brides or untimely breadwinners.

The big presentation was made on daddy’s behalf by Cuppy’s older sister, Tolani, who made the point about her father being “at the forefront of supporting worthy causes.

It is in this spirit that he will be donating the sum of N5bn to the children of Borno, Adamawa and

Katsina through Save the Children.” Clap, clap, clap….

Alhaji Dangote, while making his own remarks recalled how Cuppy’s ‘big heart’ had compelled her to visit with the displaced children in Borno IDP Camps where she spent 4 days comforting them and generally getting abreast of their issues. The

fabled billionaire admitted that that it was in light of this grand gesture of hers and the fact that he needed to ‘be here supporting my brother Femi’ that he was giving N100m as his own token.

Lots of young people everywhere are keyed into the suffering and privations experienced by the

vast majority in the global South particularly in Sub Saharan Africa.

This has made people particularly those in the Western hemisphere to devote a good chunk of their charitable moneys and activities towards lifting black people up from poverty. It is instructive to note that the DJ Cuppy Foundation is passing on the donations from her father and Aliko as well as others on to Save the Children UK which is hard at work in North East and North West of Nigeria helping to rebuild lives destabilized by the Boko Haram trauma.

The hope is that more Nigerians will in due course develop the expertise and resource base for going themselves to solving these issues.

For now, though, it’s kudos to DJ Cuppy and her benevolent family.

Every Nigerian will however do well to remember are the words of the Vice-President who was very present in the star studded audience. He reminded those present how “It is obvious that government cannot do it alone. So, we don’t (all) need to be billionaires (to do our part). It is time for every one of us to decide to make a difference to ensure that the poor and vulnerable are given a decent life.”

Well said, sir!

WeForGood Announces Winners of its Sustainable Solutions Africa 30 Under 30 Project

F

ollowing the successful completion of the Sustainable Solutions Africa 30Under30 Project, an initiative launched by WeForGood International and its partners to promote skills for sustainable development, the organisation held a pitch and wrapup event to announce its fellows and grant awardees. Earlier in the year, in commemoration of the United Nations’ World Youth Skills Day, WeForGood International, in partnership with IHS Nigeria, had hosted leading experts and entrepreneurs at the Sustainable Solutions Africa Conference which took place on Monday 15th July, 2019 at Four Points by Sheraton Hotel, Victoria Island, Lagos.

Delivered as a blended fellowship and accelerator programme, the initiative was targeted at youths who have developed skills with which they create opportunities for themselves and others. With the 30under30 project, WeForGood worked directly with select 30 young founders aged 18-29 with great initiatives from all over Africa, empowering them to amplify their impact through training, coaching, community and financial support.

Over the period of three months, from August to Octo-

L-R: Olufemi Arosanyin, Chief Commercial Officer, IHS Nigeria; Temitayo Ade-Peters, WeForGood International; Mohammad Darwish, CEO IHS Nigeria, Cima Sholotan, Senior Manager, CSR, IHS Nigeria, at the Sustainable Solutions Africa Project Wrap Up and Fellows Pitch recently held in Lagos

ber 2019, these founders were coached in different areas including Business Management; Strategy; Communication; Personal Branding; The Sustainable Development Goals; Business Development; Innovation; Managing Finance; Fundraising; Customer Experience Management; Understanding Competitive Advantage; Emotional Intelligence; Digital Marketing; Leveraging Technology for Business Success; Creating Shared Value; Sales and Marketing; Negotiation; The Future of Work; Legal Aspects of Business and Tip for Accessing Sustainable Funding. www.businessday.ng

The project had a line up of exceptional coaches including Seyi Akinyoyenu; Adebola Adeyinka; Adedoyin Jaiyesimi; Temitayo Ade-Peters; Dominic Odunuga; Ayo Jolayemi; Zainab Olisamah; Abosede Alimi; Fola Onasanya; Enahoro Okhae; Modupe Ogunyemi; Emmanuel Ukpong; Cima Sholotan; Martin Abraham; Kemi Afesojaiye and Natalie Beinisch.

Speaking about the project, Temitayo Ade-Peters, CEO WeForGood International said, “We are very honoured to be a part of the success journeys of these

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young African founders and social entrepreneurs who in spite of the challenging environment, continue to push through to provide sustainable solutions on the continent. We are very grateful to our coaches, industry leaders who served as mentors over 3 months, from August to October, with the aim of empowering the fellows to amplify their impact.

Also commenting on the partnership with IHS, she stated, “Words are not enough to describe the positive effect of IHS Nigeria’s support in the lives of these young African founders.

The impact of the training and coaching on the fellows over the 3 months period was immediately noticeable, with the new level of confidence and commitment to growth that the fellows displayed even as they pitched for the grant and a share of the prize money.

Furthermore, the fellows were overjoyed by the announcement regarding the N3Million grant for each of them, and we strongly believe that just like the CEO, Mr. Mohamad Darwish stated, the funds will serve as a great push to help them scale their ventures, a backing for which I am personally grateful.” @Businessdayng

According to the CEO of IHS Nigeria Limited, Mr. Mohamad Darwish, “As an organisation which champions economic development, IHS Nigeria Limited has been at the forefront of youth empowerment in the communities where we serve. Our support for this project is a further demonstration of our commitment to this cause.”

In addition to the N3M seed grants awarded to the fellows who pitched, $5,000 was also up for grabs as reward for the pitch.

Subsequently, post collation of the results as assigned by the judges, points allocated to the community development initiatives carried out by the fellows during the course of the project and their attendance, the winners were announced: 3rd Place Winner ($1,000) was Sarah Kuponiyi of Adolescent Reproductive Health and Rights Initiative; 2nd Place Winner ($1,500) was Emele Augustina Chidinma of CHAIS Health Initiative; and 1st Place Winner ($2,500) was Babajide Oluwase of RenewDrive.

This initiative is part of WeForGood International’s agenda to champion the emergence of a new crop of African leaders committed to its sustainable development.

Thursday 14 November 2019

BUSINESS DAY

Corporate Social Impact

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Onuwa Lucky Joseph (08023314782) Editor.

How do we feed the world without destroying the planet?

BOB GELDOF

H

unger and the climate crisis are inextricably linked - the challenge is how to solve one while not exacerbating the other Hunger is the most awful and profound expression of poverty.

It exists in every country. It is something that most people can identify with on some perhaps primordial level. The fear of hunger is etched into our DNA, passed down the generations from hungry, scared ancestors.

It is in our bones. It is in my Irish bones.

First, the good news. For several decades global hunger has been decreasing. This is mostly thanks to the sweat and ingenuity of the 500 million smallholders who produce 80% of the food consumed in the developing world.

It is also thanks to the work of exceptional NGOs, to economic growth and to the innovation of businesses all along the supply chain. It’s thanks, too, to the support of governments and international organisations. And to increased political stability in some places.

Bob Geldof

But there is very bad news.

More recently hunger has started to increase. Again. On World Food Day on Wednesday, 820 million people face chronic hunger. That’s the equivalent of the population of the US and the EU combined. This is daily, frightening, fatiguing, persistent hunger.

Day after day, 820 million people will not get enough to eat. Night after night, famished mothers and fathers put their children to bed with empty stomachs.

I suspect this shocks no one these days. Just as I suspect the specter of climate crisis evokes yawns. Yet the two are inextrica-

bly linked in a kind of existential tango happening too slowly for us to register.

The increase in global hunger is in part triggered by the climate emergency. There have been more floods, more droughts, and more frequent, fiercer storms.

Small farmers are being hit first and hardest as once-in-a-century extreme weather events become almost routine.

At the same time food production is a major cause of climate change, whether it be the methane gas production of cows or the tearing down of forests to grow crops.

So, humanity faces a profound challenge. How do we feed the world without destroying it?

From next year there will only be 10 years left to achieve the sustainable development goals established by UN member states. If these goals are to be more than bureaucratic niceties and political platitudes, there must be immediate and powerful action to stop the goal of zero hunger going into reverse.

The German government aims to catalyse the global response. Next June it will host an international event to push for action to boost agriculture and tackle hunger in low-income countries, while staying within the environmental boundaries that our planet can cope with. More power to them.

Those who attend will need to confront the challenge of underperforming agricultural development and the weaknesses of the international system. That means getting hard cash to the smallholder farmers who are too often bypassed by funding that goes either to governments or big business. It means leveraging

government and private investment all along the supply chain and learning from what works and what doesn’t.

The Global Agriculture and Food Security Programme, which we successfully fought for alongside President Obama, will be critical. It has resulted in a decade of experience in encouraging increased impact from the international system in exactly the way we need. In the face of the dual challenges of climate change and hunger, it is perhaps more relevant today than at its inception.

Whatever happens with Brexit, the German gathering will be an opportunity for us to come together to tackle one of the great 21st-century challenges. It’s a century that has stumbled to begin. It is finally taking shape, but is still a plastic thing. It will see mindboggling technologies emerge and profound cultural shifts.

But what’s the point if we can’t beat humanity’s oldest foe, hunger? Surely it is a modest thing to suggest that next year would be an excellent time to start doing just that.

(Culled from The Guardian of London)

Sustainability Experts at NSE Training insist that “Sustainability is Business”

T

he concept of CSR/Sustainability is one that lots of corporations are still grappling to come to terms with. While some see it strictly from the do-good angle, which is not bad, but which tells only half the story, it is important to clarify that for businesses, sustainable business practices are essentially about business being in harmony with the environment such that due to its conscious steps taken by the business, the right conditions invariably exist for repeat and new business to be conducted and profits gained.

In other words, ‘sustainability is business’.

That last bit was taken directly from a paper, “The Synergy Between Sustainability & Finance Functions”, delivered by Eunice Sampson and Oliver Obu at a Nigerian Stock Exchange-organised (with support from Dangote Group) training on sustainability for financial analysts, accountants and communications practitioners.

Clearly, the NSE takes its remit strongly to help ensure that companies listed on the exchange are habitually responsible while being profitable. The NSE knows that only when sustainability is treated as a serious matter will Nigeria, with albeit the largest economy in Africa, be able to play in the same corporate league as the more advanced nations of the world. It was an enlightening affair, the core lessons from the paper which we here try to render.

WHAT SUSTAINABLITY IS FROM A BUSINESS PERSPECTIVE It is the ability to exist constantly by building a culture of sustainable practices which include at the minimum, not harming people or the planet, and

at best, creating value for stakeholders.

It is also ability to focus on continuously improving environmental, social, and governance (ESG) performance as well as managing any negative material environmental or social impact (in a company’s operations, products, or across the value chain).

MYTHS ABOUT SUSTAINABILITY Amongst the myths is that Sustainability is an unnecessary drain on corporate finances, as well as the other one from some finance types who argue stridently that the practice does not have any direct positive impact on business bottom-line. Eunice and Oliver then go on later in the paper to show how those myths had been overturned by some of the world’s most successful corporations.

They argue instead that Sustainability has become, for good provable reasons, an important factor in business strategies, for which reason large multinationals and mid-sized companies are increasingly taking long-terms view towards managing environmental and social risks.

As well, many companies recognize that by addressing environmental and social issues, they can achieve betwww.businessday.ng

Ndidi-Nnoli-Edozien Group Chief Sustainability and Gvernance at Dangote

ter growth and cost savings, improve their brand and reputation, strengthen stakeholder relations, and boost their bottom line.

They are also of the view that strategic integration of sustainability prepares companies to better anticipate and understand long-term trends and to better predict the effect of resource use, and to address stakeholder expectations THE RESULTS ARE IN: HOW SUSTAINABILITY HELPS FINANCIAL INDICES DuPont–Improvement in resource efficiency DuPont is a US company that makes industrial chemicals, synthetic fibres, petroleum-based fuels, lubricants, pharmaceuticals, building materials, packaging materials, cosmetics ingredients, agricultural chemicals, etc. Studies have shown that improvements in resource efficiency in energy and water have led to significant cost savings and lower environmental impact. DuPont cut costs by $2 billion in the last 10 years by investing in energy efficiency equipment while reducing greenhouse gas emissions by 75 percent.

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British Petroleum (BP) –Erosion of Brand value & Bottom line BP is a good example of how a company’s brand value can be eroded by poor sustainability policies. Its vessel was involved in the 2010 incident, considered to be the largest marine oil spill in history (4.9 million barrels). Due to the Gulf of Mexico oil spill, BP lost more than $32 million a day in brand value. BP’s market value dropped from $184 billion to $96.5 billion, roughly 48 percent in a period of two months. It also resulted in $4.525 billion in fines and penalties. And as of 2018, cleanup costs, charges and penalties had cost the company more than $65 billion.

Wal-Mart –Cost Savings on Logistics Wal-Mart aimed to double fleet efficiency between 2005 and 2015 through better routing, truck loading, driver training, and advanced technologies.

By the end of 2014, they had improved fuel efficiency by approximately 87% compared to the 2005 baseline. In that year, these improvements resulted in the avoidance of 15,000 metric tons of CO2 emissions that could have been emitted in business operations and also resulted in nearly $11 million in savings.

Dangote Example - Its 7 Pillar approach is intended to infuse sustainable culture into every aspect of its business.

By leveraging its growing sustainability management system and structures, the Dangote Group is able to identify risks and opportunities, and proactively minimize the risks and optimize the opportunities. Its sustainability practices is helping improve its engagement with stakeholders, giving it listening ears to their concerns and compelling the company to manage its externalities better WHY FINANCE EXPERTS @Businessdayng

SHOULD INVEST IN SUSTAINABILITY Essentially, sustainability is about contributing to a better and safer environment. Hence finance experts are encouraged to support investments in sustainable projects and ideas, not because this is a ‘nice to have’, but because it helps ensure that the business remains compliant and does not fall foul of the laws, helps avoid big fines and penalties that could cripple the business, supports proactive risk management and avert risks with potential to bring down the business, sustains the business’ social license to operate, builds public goodwill and customers loyalty that sustains the business’ profit and sustainable growth.

CONCLUSION The authors concluded by citing the results from a major 2015 study carried out by the Ellen MacArthur Foundation and McKinsey which demonstrated that the adoption of sustainable practices could help boost Europe’s resource productivity by 3 percent by 2030, generating cost savings of €600 billion a year and €1.8 trillion more in other economic benefits.

On a corporate level, developing a good environmental and social reputation can contribute to a willingness among customers and investors to pay a price premium, which directly affects the company’s bottom line.

On the contrary, poor sustainability practices result in damaging incidents and non-compliance issues that could completely crumble the business and take it out of operations. The old myth that sustainability is optional is no longer tenable. Sustainability is business

(For feedback, contact us at csrmomentum@gmail.com / 08023314782)

36

Thursday 14 November 2019

BUSINESS DAY

UNDERSTANDING NIGERIA’S

DAIRY VALUE CHAIN

Unlocking the potential impact of artificial insemination in Nigeria’s Dairy Sector engender the exponential growth of the local dairy industry. Development organizations are needed to fund any large-scale interventions, and the implementation of these projects will need the involvement of private sector actors.

Oluwafisayomi Kayode

A

rtificial insemination (AI) is one of the most efficient tools available foe dairy farmers worldwide to boost livestock yields. Rather than just an alternative way of impregnating cattle, it is a method of livestock enhancement. In artificial insemination, semen from bulls of superior quality is collected and used to inseminate females to conceive offspring with desired traits, such as high milk yield and disease resistance. Artificial insemination increases the efficiency of bull usage as semen collected from bulls can be diluted to make hundreds of doses from one ejaculate. These doses can be easily transported and stored over long periods, allowing for a single bull to be responsible for the insemination of many cows regardless of their location. The usage of artificial insemination is also extremely cost-effective as farmers are spared the expenditure of maintaining and breeding bulls. The transmission of disease between mating cows is avoided as well, as the semen used for AI is inspected for quality and monitored for infections. The wide-scale adoption of AI in Nigeria would see the development of a more productive cattle population. Currently Nigerian cows produce an average of 1 litres of milk a day which is a negligible quantity when compared to cows in the USA for example, where cows yield 28 litres a day on average.

Constraints to the Development of AI and how to address them Despite the benefits of practising AI, the adoption of the method in

Nigeria has been slow. Several factors are restricting the widespread use of AI in Nigeria: (1) unavailability of skilled professionals (2) low awareness of the benefits of AI, and (3) large initial capital outlays. All of which can be overcome through government intervention and proper management. To begin with, the proper implementation of AI requires highly skilled and trained AI technicians. Unfortunately, there are few Nigerian AI service providers, and the number of experts and technicians in the country is not sufficient for wide-scale adoption. An additional roadblock to widespread adoption is a lack of awareness about the benefits of AI. It is imperative to sensitize farmers on the implementation advantage.

Many Nigerian dairy farmers are traditionalists, who are wedded to norms and beliefs that have been upheld for generations. This

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coupled with negative past experiences from failed AI interventions increases the resistance of farmers to any further attempts to introduce the method. Extension services can be used to educate farmers on the benefits of breeding through AI. The dissemination of this information was a key component of the Nigerian Dairy Development Program (NDDP) implemented by Sahel Consulting in partnership with FrieslandCampina Wamco and L&Z Integrated Farms. NDDP trained 15 youth in Oyo and 5 in Kano as AI technicians to provide AI services to smallholder dairy farmers in selected dairy clusters, with the expectation of continued support after the program’s termination.

The program encouraged adoption by sensitizing dairy farmers and providing them with manuals and videos on the procedures for AI. By the end of the first phase

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of the program in June 2019, over 3,000 cows had been inseminated, translating into around 1,200 crossbreeds. Participating farmers now own crossbred calves that are both adapted to the harsh local conditions and have increased levels of dairy productivity.

Furthermore, it is difficult to preserve and transport semen under severe climatic conditions like those prevailing in most parts of Nigeria.

The preservation of semen samples requires cold storage – bull semen can be frozen and stored indefinitely at consistently low temperatures.

This presents a challenge in Nigeria given persistent access to energy serves is a limiting factor. As a result, it is expensive to acquire the necessary equipment to implement AI without significant external investment. To improve AI adoption, the government must work with dairy processors, farmers and livestock professionals such as veterinarians to make AI more accessible. The establishment of AI service centres for the collection, storage, and sale of semen of exotic breeds, as well as training for AI technicians, would go a long way towards the improvement of milk production in the country.

To this effect, the Nigerian government recently inaugurated the National Livestock Transformation Plan (NLTP) on September 10, 2019.

The NLTP is to be implemented in Adamawa, Benue, Kaduna, Plateau, Nasarawa, Taraba and Zamfara. If successfully implemented, the NLTP expects to develop market-driven ranches in the seven states, establish 63 pasture lands and 1 semen bank in each target state, and artificially inseminate at least 170,000 cows. These developments have the potential to @Businessdayng

Effects of Successful AI Implementation The wide-scale adoption of AI in Nigeria would see the development of a more productive cattle population. The immediate benefit to farmers is the increased income they would receive from the augmented production levels of these cows. The costs of raising cattle would also fall, as fewer cows would be able to achieve current output levels. As dairy farmers care for fewer cattle, there will be less pressure on grazing spaces. This slows the rate of desertification caused by overgrazing, mitigating the effects of climate change in a sensitive region. A knock-on effect of this is that as in the long term there will be more grazing space available, and farmers may curb their migratory tendencies to settle on parcels of land instead. Consequently, conflicts between herders and farmers will be reduced, as the pastoral method loses popularity over time.

Also, as the usage of AI increases, the demand for veterinary services and AI technicians would follow.

The dairy sector would become a more significant contributor to the economy as the viability and profitability of dairy farming becomes more apparent. As such, artificial insemination is an opportunity for job creation in marginalised communities, reducing the unemployment rate. Nigeria’s dairy sector has a bright outlook, but it will require the cooperation of federal and state governments, initiatives like NDDP, private dairy entrepreneurs and other livestock professionals to make it a reality in the coming years.

Oluwabomi Fagbemi Sahel Consulting Agriculture & Nutrition Limited www.sahelconsult.com

Thursday 14 November 2019

BUSINESS DAY

37

Access Bank Rateswatch Market Analysis and Outlook: November 8 – November 15, 2019

KEY MACROECONOMIC INDICATORS GDP Growth (%)

1.94

Q2 2019 — lower by 0.16% compared to 2.10% in Q1 2019

Broad Money Supply (N’ trillion)

35.03

Decreased by 0.53% in Sep’ 2019 from N35.22 trillion in Aug’ 2019

Credit to Private Sector (N’ trillion) Currency in Circulation (N’ trillion)

25.47 2.01

Increased by 2.61% in Sep’ 2019 from N24.82 trillion in Aug’ 2019 Decreased by 0.66% in Sep’ 2019 from N2.02 trillion in Aug’ 2019

Inflation rate (%) (y-o-y)

11.24

Increased to 11.24% in September 2019 from 11.02% in August 2019

Monetary Policy Rate (%) Interest Rate (Asymmetrical Corridor)

13.5 Adjusted to 13.5% in March 2019 from 14% 13.5 (+2/-5) Lending rate changed to 15.5% & Deposit rate 8.5%

External Reserves (US$ million) Oil Price (US$/Barrel) Oil Production mbpd (OPEC)

40.23 62.7 1.86

COMMODITIES MARKET

STOCK MARKET Indicators

Friday

Friday

8/11/19

1/11/19

NSE ASI Market Cap(N’tr)

26,314.49 12.81

26,293.30 12.80

0.08 0.08

Volume (bn)

0.43

0.25

71.37

Value (N’bn)

5.58

3.75

48.89

Change(%)

MONEY MARKET NIBOR Tenor

November 6, 2019 figure — a decrease of 0.5% from November start November 7, 2019 figure— an increase of 5.45% from the previous wk September 2019 figure — a decrease of 0.85% from August 2019 figure

Friday Rate (%)

Friday Rate (%)

Change (Basis Point)

Indicators

8/11/19

1-week Change

YTD Change

Crude Oil $/bbl) Natural Gas ($/MMBtu) Agriculture Cocoa ($/MT) Coffee ($/lb.)

Cotton ($/lb.)

Sugar ($/lb.)

Wheat ($/bu.)

Metals Gold ($/t oz.)

Silver ($/t oz.)

Copper ($/lb.)

62.70 2.80

(%) 5.45 7.28

(%) (2.73) (8.38)

2460.00 112.60 64.21 12.35 510.75

0.94 10.55 (0.50) (0.88) 0.34

27.07 (13.52) (17.15) (19.44) 17.82

1466.40 16.98 270.60

(3.02) (6.14) 2.60

11.30 (1.22) (17.45)

8/11/19

1/11/199

OBB

4.43

3.00

143

NIGERIAN INTERBANK TREASURY BILLS TRUE YIELDS

O/N CALL 30 Days

5.57 4.94 13.25

4.07 3.75 12.09

150 119 115

Tenor

8/11/19

1/11/19

90 Days

13.95

12.51

144

1 Mnth 3 Mnths 6 Mnths

12.22 0.00 12.65

11.48 0.00 11.72

74 0 92

9 Mnths 12 Mnths

13.11 11.98

11.90 12.14

121 (16)

Friday (N/$)

Friday (N/$)

1 Month Rate (N/$)

8/11/19

1/11/19

8/10/19

Official (N) Inter-Bank (N)

306.90 362.77

307.00 362.22

306.90 362.45

BDC (N) Parallel (N)

0.00 360.00

0.00 360.00

0.00 360.00

Change

(%)

(Basis Point)

ACCESS BANK NIGERIAN GOV’T BOND INDEX

Indicators

Friday

Friday

(%)

BOND MARKET AVERAGE YIELDS Tenor

Friday

(%)

FOREIGN EXCHANGE MARKET Market

Friday

Friday (%)

Friday (%)

Change (Basis Point)

8/11/19

1/11/19

3-Year 5-Year

0.00 12.07

0.00 12.81

0 (74)

7-Year 10-Year 20-Year

12.34 12.81 13.19

12.77 13.18 13.38

(42) (37) (19)

30-Year

13.81

13.91

(10)

(%)

Change (Basis Point)

8/11/19

1/11/19

Index

3,111.80

3,079.32

1.05

Mkt Cap Gross (N'tr) Mkt Cap Net (N'tr)

9.72 6.32

9.62 6.23

1.05 1.46

YTD return (%) YTD return (%)(US $)

26.68 -29.11

25.36 -30.78

1.32 1.67

TREASURY BILLS (MATURITIES)

Disclaimer This report is based on information obtained from various sources believed to be reliable and no representation is made that it is accurate or complete. Reasonable care has been taken in preparing this document. Access Bank Plc shall not take responsibility or liability for errors or fact or for any opinion expressed herein .This document is for information purposes and private circulation only and may not be reproduced, distributed or published by any recipient for any purpose without prior express consent of Access Bank Plc.

Tenor

Amount (N' million)

Rate(%)

91 Day

28,018.96

Date

10.8

30-Oct-2019

182 Day

10,615.40

11

30-Oct-2019

364 Day

93,915.15

12.94

30-Oct-2019

Sources: CBN, Financial Market Dealers Association of Nigeria, NSE and Access Bank Economic Intelligence Group computation.

Global Economy In the UK, the Bank of England's Monetary Policy Committee voted by a majority of 7-2 to hold Bank Rate at 0.75% during its October policy meeting, amid Brexit uncertainties and global trade wars. The Bank also cut its GDP forecasts, which now points to 1% expansion by the end of this year, 1.6% by the end of 2020, 1.8% by the end of 2021, and 2.1% by the end of 2022.

Policymakers noted that monetary policy could respond in either direction to changes in the economic outlook in order to ensure a sustainable return of inflation to the 2% target.

Elsewhere, data from the General Administration of Customs revealed that China trade surplus expanded, the largest trade surplus since July. Trade surplus widened to $42.81 billion in October of 2019 from $32.97 billion in the corresponding month a year earlier, as exports declined 0.9% year-on-year to $212.93 billion, while imports dropped at a faster 6.4% to $170.12 billion. In a separate development, Moody's Investors Service changed India's sovereign credit rating outlook to negative from stable and affirmed the debt grade at 'Baa2'. It cited that the main trigger behind the revision was increasing risks that economic growth will remain materially lower than in the past, partly reflecting lower government and policy effectiveness at addressing long-standing economic and institutional weaknesses than Moody's had previously estimated. This has led to a gradual rise in the debt burden from already high levels.

Domestic Economy The Development Bank of Nigeria (DBN) has announced that it is partnering with the Nigerian Stock Exchange to explore ways of building capacity and bringing Micro Small and Medium Enterprises (MSMEs) to the floor of the Exchange. Speaking during the closing gong ceremony at the Exchange last friday, Chief Executive Officer, DBN, explained that the proposed collaboration with the NSE will involve sourcing or prospecting for SME companies. He added that the collaboration is in line with the NSE's objective of trying to bring SMEs to the stock market while adding that the Bank is working with them in that area as well as other areas to see how Information Technology (IT) can make an impact in that segment. He further revealed that DBN has plans of listing its shares on the Exchange in the long term so as to raise capital beyond its current funding. In a separate development, the total value of banking sector credit to the private sector rose by 2.6% or N646 billion to N25.466 trillion at the end of September, up from the N24.819 trillion recorded at the end of August. The Central Bank of Nigeria (CBN), in its money and credit statistics report attributed the rise in lending to the aggressive push for banks to lend to the real sector of the economy, which necessitated the hike in the minimum loan-to-deposit (LDR) ratio. The Central Bank had raised the minimum LDR to 65percent, with a December 31,2019, up from the 60percent it had prescribed. It recently debited 12 banks a total of N499billion for failing to meet the September 30 deadline to meet he LDR target. The policy was to encourage lending to SMEs, retail, mortgage and consumer lending. The CBN had vowed to impose stiffer sanctions on any commercial bank and blacklist customers that flout the policy, after it debited the 12 banks for defaulting.

Stock Market Indicators at the local stock exchange witnessed a positive turnaround for the first time in a month following the positive sentiment for high cap stocks that supported the benchmark index rise. Consequently, the All Share Index (ASI) climbed 0.08% to 26,314.49 points from 26,293.30 points the preceding week. Similarly, market capitalization rose 0.08% to N12.81 trillion from N12.80 trillion the prior week. This week, we anticipate further

positive momentum as macroeconomic indicators look seemingly positive ahead of Monetary Policy Committee statements and economic reforms.

Money Market Cost of borrowing went up slightly as a result of Retail Secondary Market Intervention Sales (SMIS) that held last week. Short-dated placements such as Open Buy Back (OBB) and Over Night (O/N) rates rose slightly to 4.43% and 5.57% from 3% and 4.07% respectively the previous week. The 30-day and 90-day Nigeria Interbank (NIBOR) rate also increased to 13.25% and 13.95% from 12.09% and 12.51% the prior week. This week, we envisage that rates will remain at single digit level barring any unusual open market operations from the Central Bank.

Foreign Exchange Market The naira went in varying directions for the week ended November 8th, 2019. The official window saw an appreciation as it went up by 10 kobo to settle at N306.90/$. At the NAFEX window, saw a depreciation of 55 kobo to close at N362.77/$. The parallel market remained unchanged at N360/$. The relative stability of the local currency continues to be supported by the intervention of the apex Bank across various market segments. This week, the naira is expected to remain around prevailing levels due to the apex bank's sustained supply of liquidity.

Bond Market The Bond market traded with bullish sentiments last week following speculations which suggested a likely prohibition of retail and corporate client from investing in Treasury Bills. The panic buying interest was observed for all maturities across the curve.

Yields on the five-, seven-, ten- twenty-year, and thirty-year debt papers closed lower at 12.07%, 12.34%, 12.81%, 13.19% and 13.81% from 12.81%, 12.77%, 13.18%, 13.38% and 13.91% respectively the previous week The Access Bank Bond index increased by 32.47 points to finish at 3111.80 points from 3079.32 points the previous week. This week, we expect the market to remain bullish in the absence of a reversal in the recently introduced CBN policy Commodities Oil price spiked last week as signs of a trade breakthrough between the U.S. and China continue to gain steam and OPEC hints at making deeper production cuts. Bonny light, Nigeria's benchmark oil crude, went up $3.24, or 5.45%, to $62.70 a barrel. In the same light, precious metal prices tapered further weekon-week as traders chose riskier equities after the market sentiment improved. Gold dipped to $1,466.40 an ounce, down 3.02% from the previous week's price, while the silver settled lower at $16.98 per ounce, compared to the preceding week's close of $18.09 per ounce.

This week, we anticipate that oil prices might trend upwards as OPEC's largest producer and de facto leader Saudi Arabia will be pressuring non-compliant cartel members to fall in line with their quotas, but will nevertheless seek higher oil prices ahead of the listing of Aramco expected for December. Precious metal prices are expected to remain pressured by strengthening U.S dollar

MONTHLY MACRO ECONOMIC FORECASTS Variables

Nov’19

Dec’19

363

362

363

Inflation Rate (%)

11.3

11.3

11.4

Crude Oil Price (US$/Barrel)

65

66

67

For enquiries, contact: Rotimi Peters (Team Lead, Economic Intelligence) (01) 2712123 rotimi.peters@accessbankplc.com

www.businessday.ng

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Jan’20

Exchange Rate (NAFEX) (N/$)

@Businessdayng

38

Thursday 14 November 2019

BUSINESS DAY

Bayelsa/Kogi guber watch

US warns against electoral fraud …Threatens sanctions against perpetrators Iniobong Iwok

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head of Saturday’s gubernatorial election in Bayelsa State, the United States has warned political actors in the country against undermining the electoral process that would guarantee free and fair polls.

Recent elections in Nigeria have become violenceprone; a final report on the 2019 general elections by the European Union Election Observation Mission had said that the elections were marred by violence and intimidation with the role of security agencies becoming more contentious as the process progressed.

However, Claire Pierangelo, U.S Consul General in Nigeria, during a press briefing, Wednesday, ahead of Saturday’s election held at the US Consulate in Lagos,

urged stakeholders not to violate the rules that would affect the smooth conduct of the governorship election.

Pierangelo said that United States would work with other stakeholders to identify and sanction politicians who perpetrate electoral fraud and undermine the credibility of the polls.

According to her, “Those folks who disrupt the elections, engage in vote-buying; anyone who we can verify that undermined the electoral process we would consider consequences for such individual,” Pierangelo said.

The Consul-General, however, restates the US long term commitment to free and fair elections in the country, stressing that the Bayelsa election would not be different.

“I would like to reiterate the U.S. Mission’s longstanding commitment to

Bayelsa guber: Gunshots as PDP campaigns in Nembe Samuel Ese, Yenagoa

T

here was real apprehension at Ogbolomabiri in Nembe Local Government Area of Bayelsa State as gunmen sporadic shots dispersed people who gathered at the King Koko Square, venue of the campaign on Wednesday.

A community source said the shooting actually started on Tuesday night and that it did not bode well for free and fair election on Saturday if the People’s Democratic Party (PDP) would be barred from campaigning in the ancient city.

It was gathered that some persons were injured in the ensuing confusion as they scampered for safety and even journalists who were there to cover the campaign had to take refuge inside the General Hospital, Nembe.

Amayanabo of Nembe and former Petroleum Minister, Edmund Daokoru and his Council of Chiefs condemned the violence and urged the people to conduct themselves peacefully during the electoral process.

Meanwhile, there was reported shooting at Igbogene in Yenagoa, the state capital, on Tuesday as some

armed thugs were alleged to have tried to create tension as the All Progressives Congress (APC) conducted their campaign.

Igbogene is the residence of the APC governorship candidate, David Lyon, although it did not deter the surveillance contractor from addressing thousands of Bayelsans at the mega rally at the Ox-Bow Lake Pavilion in Yenagoa.

In another development, two policemen were attacked along Ogbia Road on Tuesday, killed and their guns carted away, an incident that has been linked to the Saturday’s governorship election.

This is coming as policemen drafted to the state for the election started arriving in droves, although the security agencies are yet to shed light on the gory incident.

In a related development, the APC has assured that they would go about their preparations for the election despite an Abuja court ruling disqualifying Lyon’s running mate, Degi Eremienyo.

APC state publicity secretary, Doifie Ola urged party faithful and supporters to remain calm as the party would appeal the judgment by the court of first instance. www.businessday.ng

Mahmood Yakubu, INEC chairman

support free, fair, transparent, and peaceful elections in Nigeria. It is our desire to see nothing less during the

November 16th election in Bayelsa State.

“The U.S. government has assisted Nigeria with

strengthening the electoral process since 1999 and from that time, robust U.S. election-related diplomacy and programmes have sought to advance three main objectives.

“We support a free and fair electoral process, including technical assistance to Nigeria’s election institutions and civil society in addition to our active monitoring of both general and off-cycle elections.”

She further said that the United States would continue to support and partner with political stakeholders and civil societies for the expansion of the country’s political space to guarantee more inclusiveness.

Pierangelo said that free and fair elections were imperative for the electorates in the Bayelsa State to elect credible leaders, while advocating for more involvement of the youth in the electoral process.

“I encourage all eligible voters in Bayelsa to participate in the upcoming election and exercise their political franchise. A large turnout will enhance the credibility of the election and Nigeria’s democratic reputation. I would especially ask that every effort be made to boost the participation of women, youth and people living with disabilities.

“We encourage an expansion in Nigerian civic and political engagement, including support to Nigerian civil society’s election observation efforts and parallel vote tabulation, as well as campaigns such as ‘Vote, Not Fight’ that promote peaceful political involvement by Nigerian youths.

“I recently returned from Bayelsa as part of my first trip to the Niger Delta region since assuming my role as the Consul General,” she added.

Kogi polls: Trouble makers must face the wrath of the law – IGP …As thugs prevent SDP candidate, Akpoti, from attending INEC, stakeholders’ meeting VICTORIA NNAKAIKE, Lokoja

A

head of the gubernatorial election in Kogi State on Saturday, the Inspector-General of Police, Mohammed Adamu has warned politicians embrace peace, saying that trouble makers during and after the election would face the wrath of the law.

Adamu gave the charge a meeting between the Independent National Electoral Commission (INEC) and stakeholders in Lokoja, stressing that the command is aware of some activities of hoodlums that were armed by politicians to terrorise innocent people during this period, and that those involved in such act should in their own interest handover their guns before the law catches up with them.

“We are fully ready for this election. Deployment of my men is in progress; we will ensure a level playing ground is provided for all the contestants to ply their trade. Every polling unit will be adequately secured; we will also ensure the security of INEC staff, NYSC mem-

bers and voters during this period,” he said.

The Inspector-General police also added that his command would not tolerate act of vote-buying by politicians, pointing out that anybody caught in the process will be arrested and prosecuted according to the law.

“We are aware there are plans to disrupt proceedings at the collation centres; we are aware some politicians are planning to bring thugs to help their master to cause violence during the period; we will do everything to checkmate them. Do not even attempt to do that, for we will foil it before you act,” he said.

Adamu warned those with gun or prohibited materials by law on such day to, in their own interest, submit it to the appropriate authority, noting that the command will not tolerate movement of people, except those accredited by INEC. He also said that political office holders are not permitted to move around during the period.

“No movement of individual from polling unit to polling unit. If you are on essential duty, carry your tag

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that is accredited by INEC. Don’t try our gut, it will not please you,” he said.

The stakeholders’ meeting was marred by the activities of thugs, as hoodlums prevented Natasha Akpoti, the Social Democratic Party (SDP) candidate, from entering the venue.

Trouble started when the governorship candidate got to the event held inside the hall of Idrinana Hotel, and met some “unruly youths”, forming a barricade at the entrance of the hall, chanting slogans and war songs.

In the process, altercation between Akpoti and security personnel at the entrance ensued, with the security personnel trying to prevail on her to go back, a plea she rejected, saying she was duly invited for the meeting.

However, the police operatives released tear gas to disperse the surging crowd while all those at the high table, including the IGP and INEC Chairman, Professor Mahmud Yakubu, governorship candidates and others remained calm in the hall.

The SDP candidate later withdrew from the venue and zoomed off to unknown place, threatening to for@Businessdayng

mally lodge a complaint on the incident to IG who was also at the venue.

The state Chairman of SDP, Mouktar Atimah was manhandled and beaten up while trying to mediate in the crisis.

Atimah told journalists that what transpired showed the extent to which the Nigerian society had gotten bad.

The SDP chairman, who was obviously shaken because of the action of the unruly youth is yet to gain enough strength to talk extensively of the incident.

The INEC Commissioner in charge of Kwara, Kogi and Nassarawa, Haruna Mohammed in his remarks said the arrangement for the Saturday election in the state had been concluded, with the necessary materials deployed to the needed areas, adding that the sensitive materials are in the custody of CBN and would be offloaded as the law demanded.

The stakeholders and INEC meeting is the second in the series of an attempt to update the concerned citizens on the preparedness of the umpire and to ensure a peaceful and violence-free election in the state.

Thursday 14 November 2019

BUSINESS DAY

news Firm canvasses sustainable, environmentfriendly building designs for emerging cities CHUKA UROKO

A

rchitecture and building design-focused firm, Design Genre Limited, is canvassing sust a i na b l e, e nv i ro n m e ntfriendly building designs and materials as part of steps towards reducing the negative impact of buildings on the environment, especially in emerging towns and cities in Nigeria.

Nigeria, especially Lagos, has seen the emergence of new towns and cities in what is now commonly known as New Urbanism with little consideration for their impact on both aquatic and human environments. In most cases, whole environment is distorted by man for selfish-ends.

To underscore the importance it attaches to environmental safety and sustainability, Design Genre instituted an Architecture Students’ Award, now in its fourth edition, at the Obafemi Awolowo University, (OAU), Ile-Ife, Osun State.

The award, the firm explained in a statement in Lagos Wednesday, is an endowment by the company aimed to raise future architects who will adopt

the idea of sustainable designs that suits the lifestyle of a truly modern and safer city.

“We need to think about evolving a sustainable architecture designs through efficiency and moderation in the use of materials, energy, and our development spaces. This is germane to aligning to the global quest for a safer city so that we will not compromise a safer living and eco-friendly environment,” said Anthony Okoye, managing director of the company.

Okoye spoke at the prize presentation to winners of the Architecture Students’ Award where Adeola Oderinde and Bidemi Ariyo, both MSC 1 students of OAU, emerged first prize winners in a highly charged race that featured five teams pitching their creative ideas to a panel of judges which included lecturers and practicing Architecture professionals.

The winners were judged for creating a building project with sustainability ingenuity and ecological features capable of promoting good health for occupants of the building as well as reduce the building’s negative impact on the environment.

Dayo Oduleye, an Associate Director of the company,

highlighted the company’s determination to continue sponsoring the competition, explaining that the whole idea of the competition was to connect the town and the gown.

“We are delighted and determined to continue to provide the platform for Architecture students to have practical experience of how the built industry works. The contestants were made to go through real-life business pitch and presentations.

“We are offering the students an experience to connect the theories being taught in classes and the practical as it works in the industry as at today. A sort of connection between academics and the real industry,” he explained further.

Oduleye stated further that award was a give-backto-the society initiative as Okoye, an accomplished architect and built design expert with landmark projects to his credit, was an alumnus of the Architecture Department of OAU. “By this endowment, we are hoping to continue to nurture emerging talents who will continue to bring fresh perspectives to the built environment,” he said.

necessity, begin to be more deliberate and strategic in defining the message it wants to communicate about itself and its people; determine the audience for all its communication, especially within the scope of attracting global financing for the continent and also determine how to most effectively reach this global audience given the plethora of media within the landscape.

“As an investment destination, Africa is perhaps the last frontier in many areas that present amazing opportunities. There are about six key areas of brand property ownership and opportunities and our narrative ought to be focused on projecting these on medium and long term basis. The African middle class is growing and with certain expectations; Africans are getting more educated, urbane and professional; Africa also has the largest population of young people under the age of 25; Africans are becoming more brand conscious and

sophisticated in taste; These are affecting retail businesses in fashion, lifestyle products, etc. These are keeping retailers busy as they anticipate the needs of this growing list of new consumers”.

While he noted that Africa has huge opportunities in the energy, technology, supply chain design and the agriculture value chain, he lamented the continent’s crippling infrastructure deficit, a factor he blames for the difficulty in harnessing opportunities that will enable the continent take advantage of the maturity and saturation of developed economies Highlighting what he termed the continent’s “soft infrastructure deficit, he insisted that the continent could no longer take data gathering for granted in such critical areas as credit and risk information, market data, consumption pattern, among others, because of their importance to policy formulation and planning as well as business decision-making.

of the rail tracks.

The Jibowu axis, according to a statement from the state ministry of transport, would be closed down on November 16, while the Yaba axis of the rail will equally be shut on November 23.

The routes would be closed at night to ensure smooth and uninterrupted flow of work on the rail tracks.

The statement further notes that the routes would

be used interchangeably as alternative routes for motorists, such that when one axis is under construction, the other will be opened for motorists.

“The Lagos State government hereby appeals to road users to bear with the government as it takes steps to create proper road infrastructure that will ultimately improve the traffic situation in the state,” the statement states.

At African Investment Forum, Lolu says Africa must own its narrative to develop Daniel Obi

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he quest by Africa as a continent to overcome its current development challenges can only become realisable with the development and deployment of engagement strategies that will ensure the continent owns and tells its own stories, pioneer chief executive of the rebranding Nigeria Project and Chairman, Prima Garnet Group, Lolu Akinwunmi has said.

Akinwunmi, according to a statement who spoke as one of the panellists at the recently concluded African Investment Forum organized by the African Development Bank in Johannesburg, South Africa noted that the continent will not always be the provider of raw materials for developed nations and must take clear and well defined steps towards changing the Africa narrative.

For the Advertising guru, Africa must, as a matter of

Lagos shuts Yaba/Jibowu axis for rail project Joshua Basssy

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n furtherance of the Nigerian Railway modernisation project (LagosIbadan section) with extension to the Apapa Lagos Port, the Lagos State government will be closing traffic on the Yaba and Jibowu/Ogunmorin axis from November 16 to 23.

The closure will be from 8:00pm to 6:00am daily, for the level cross construction

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news

Emzor promotes all-round wellness with support for LWR 2019

Edo proposes N177.6bn budget for 2020 fiscal year

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IDRIS UMAR MOMOH & CHURCHILL OKORO

mzor Pharmaceuticals, manufacturer and distributor of medicine, surgical equipmentand medicalsupplies, in a bid to enthrone wellness among Nigerians, especially women, threw its weight behind the just concluded Lagos Women Run 2019 (LWR 2019).

The 10-kilometre run, an initiative of the Gym Assured and MARRCOM Marathon and Road Race Company in partnership with the Lagos State government, held November 9, 2019. The race started at Tafawa Balewa Square and finished at Teslim Balogun Stadium, Surulere. This year, the run witnessed massive turnout of women from all walks of life, with over 15,000 participants.

The marathon had two categories - the main category, open to all, and the veteran category for women who are 44 years and above. Some of the highlights of the race were the presentation of prizes to the winners by Stella Okoli, Emzor’s founder/managing director, and Maxwell – the Emzor brand mascot, appeared with the Emzor cheerleaders to boost runners’ morale. The Emzor VIP section hosted dignitaries and the Emzor Wellness corner gave health checks and provided free Emzor medications to participants.

Cheptoeck Careen of Kenya emerged as the winner of this

year’s edition. She completed the race in 28 minutes 55 seconds, taking home the grand price of N750,000 and other gift items such as the Emzor hamper, which contained Emzor branded souvenirs and wellness medications, while Deborah Pam and Elizabeth Nuhu were first and second runners up, respectively, and were rewarded accordingly.

For the veteran race, Genevieve Njoku emerged as the winner with AunSeriki and Bolanle Karim finishing first and second runners up, respectively.

Okoli, who presented the prizes to the winners alongside the first lady of Lagos State, Ibijoke Sanwo-Olu, said, “The Lagos Women Run is a laudable initiative and I have a passion for supporting and empowering women. That is why I came here today to witness this race for myself.”

On Emzor’s sponsorship of this year’s edition, she explained, “The initiative fits perfectly into Emzor’s drive to ensure overall wellness of African’s, especially women, through exercise and accessibility to quality and affordable medicine. This is why Emzor did not hesitate to throw its weight behind the 2019 edition of the race. We commend the organizers and the Lagos State government for this amazing platform.”

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do State governor, Godwin Obaseki, on Wednesday presented the 2020 budget estimates of N177.6 billion to the Edo State House of Assembly for consideration and approval.

The 2020 budget estimates of N177.6 billion as against the 2019 budget estimates of N175.7 billion originally presented to the House by the governor and later increased to N183.74 billion.

Obaseki said the 2020 budget was reduced by 3.34 percent compared with the 2019 budget estimates. The budget is made up of N85.5 billion for recurrent expenditure and N92 billion for capital expenditure.

The governor noted that the 2020 fiscal year budget was based on $60 per barrel of crude oil benchmark and an average daily production of 2.3 million barrel per day as well as increase in internally generated

revenue as a result of reforms in the state’s revenue collections.

According to Obaseki, the total projected revenue for the fiscal year is N145 billion, out of which N68 billion from Statutory allocation, N14.5 billion from Value Added Tax (VAT), N40.3 billion from internally generated revenue and N18.6 billion from grants and other sources, while the balance of N32.6 billion will be sourced from development financing.

He also said the government expected 10 percent increase in the Federal Government allocation revenue to the state, which include statutory allocation and VAT. He further stated that with the review of VAT rate by the Federal Government from 5 percent to 25 percent, the Federal Government expect 50 percent increase in VAT receipts while the state VAT receipt was projected at 10 percent.

He explained that the main objectives of the budget were to deepen the state government

resolved to deepen socio-economic development and consolidate on the march towards a productive and progressive state.

The governor said one of the key priorities of the budget’s capital expenditure was to strengthen the capacity of the state to meet all its obligations by allocating resources to projects that would impact on the greatest numbers of Edo people.

He also listed the priorities areas to include security, expected to be re-launched in 2020, and gave the sectoral breakdown of the budget to include, security N2 billion, pensions and gratuities N1 billion.

He said 21 percent increase was proposed to personnel cost due to government commitment to the implementation of the new minimum wage.

Allocation to pensions and gratuities are increased to 60 percent to enable the regular monthly payment of pension, government monthly remit-

tance to the pension fund administrators to the newly employees under the contributory pension scheme, he said.

He said the sum of N1 billion was proposed to primary healthcare reforms, N3 billion for the hosting of the 2020 National Sports Festival and Under 20 Women World Cup competition.

He also added that N6 billion was proposed for EdoBest, N8 billion for the Abudu, Igueben and Afuze colleges of education, N3 billion as the state equity contribution for Benin Industrial Park.

He however thanked the leadership of the state House of Assembly for its unwavering resolve to support the government in the implementation of its laudable policies and programmes.

In his remarks, the speaker of the House, Frank Okiye, assured that the budget would be thoroughly scrutinised before approval and passage for the benefit of the people of the state.

FAAC disbursement fell to N693.52bn in October Cynthia Egboboh, Abuja

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he Federation Acc ou nt A l l o cat i o n Committee (FAAC) disbursement to the three tiers of government dropped to N693.52 billion in October from N740.87 billion in September 2019.

According the National Bureau of Statistics’ (NBS) report on Wednesday, the total amount disbursed in October was from the revenue generated in September 2019, which comprised of N599.70 billion from the Statutory Account, N92.87 billion from Valued Added Tax (VAT) and N954.20 million exchange gain differences.

A breakdown of the fund shows that Federal Government received a total of N293.80 billion, states received N186.81billion and local governments received

N140.86 billion, while N51.53 billion was shared among the oil producing states as 13 percent derivation fund.

Also, revenue generating agencies such as Nigeria Customs Service (NCS), Federal Inland Revenue Service (FIRS) and Department of Petroleum Resources (DPR) received N5.61 billion, N8.18 billion and N5.70 billion, respectively, as cost of revenue collections.

Further breakdown of revenue allocation distribution to the Federal Government of Nigeria (FGN) revealed that N226.21 billion was disbursed to the FGN consolidated revenue account; N5.32 billion was shared as share of derivation and ecology; N2.66 billion as stabilisation fund; N8.94billion for the development of natural resources, and N6.17 billion to the Federal Capital Territory (FCT) Abuja.

NIPC Q3 pioneer status report reveals 19 new applications for incentives HARRISON EDEH, Abuja

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igerian Investment Promotion Commission (NIPC) has released the report of Pioneer Status Incentive processed between July 1 and September 30, 2019, showing that 19 new applications were received during the period.

According to the report published on NIPC website, one application was granted approval in principle: the company, in the Tourism sector, had a total investment of N3.03 billion, while its staff strength was 65.

The report states that two

applications were granted direct Presidential approval for an extension for 2 years: the two applications had a total investment of N185.63billion, while their staff strength was 3085.

The report reveals further that, during the reporting period, 11 companies were granted Pioneer Status Incentive with confirmed production dates while one application was declined. Forty-one companies are still enjoying the Pioneer Status Incentive, 41 applications were abandoned, while 113 applications are pending, the report states. www.businessday.ng

L-R: Anthony Osagie, director, AnthonyRhodes; Akintunde Marinho, CEO, Utopia Media Group; Ejiro Jakpa, winner of The Mentor Matchup Challenge 2.0; Ezinne Nwazulu, managing partner, 234Finance/founder, The Mentor Matchup Challenge; Ifeanyi Adirika, founder, Native Talk, and Ejike Egbuagu, chief executive, Moneda Invest, at the The Mentor Matchup Challenge 3.0, in Lagos

CDC Group announces new heads of office in Nairobi, Lagos ... appointments advance group’s strategy to invest $4.5bn in Africa by 2022

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DC Group, the UK’s development finance institution, has announced the appointment of Seema Dhanani and Benson Adenuga as heads of office for Kenya and Nigeria, respectively.

The appointees’ deep investment experience and strong local networks will be instrumental in advancing and accelerating CDC’s commitment to invest US$4.5 bil-

lion from 2018 – 2021 across Africa, creating impact that contributes directly towards the UN Sustainable Development Goals.

CDC has invested for impact in Africa for over 70 years. It deploys capital and technical expertise to support the responsible and commercial growth of businesses in some of the world’s most challenged markets where the potential for transfor-

Benson Adenuga_

Seema Dhanani

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mation is significant. CDC works across multiple sectors including financial services, infrastructure, food and agriculture and real estate. By creating jobs, advancing gender equality, strengthening governance standards and optimising environmental impact, CDC is making a significant and meaningful contribution to Africa’s development.

Tenbite Ermias, CDC’s Managing Director for Africa, commented “The appointment of Seema and Benson adds powerful depth to our in-country presence in two leading African markets.

Their expertise and insights will be critical in guiding our origination efforts, portfolio management and stakeholder relationships, ultimately accelerating the pace and scale at which we can act.” @Businessdayng

Seema Dhanani joins CDC from Mauritius Commercial Bank, where she was Chief Representative Officer for East & West Africa, holding responsibility for the bank’s office in Kenya and overseeing governance, reporting, compliance and strategic client and regulatory coverage across East and West Africa for the MCB Group.

Commenting on her appointment, Seema noted “I am delighted to join CDC at such an inflexion point for the organisation. CDC’s commitment to ramp up the pace of its investments as part of the UK’s ambition to become the top G7 investor in Africa by 2022 creates an exciting set of opportunities and I’m looking forward to working with the team to spur the growth of East Africa’s most promising businesses”.

Thursday 14 November 2019

BUSINESS DAY

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news Nigeria yields slide to 3-year low as Emefiele’s...

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said.

“Yields could fall to as low as 5 percent before the market adjusts to the OMO ban,” the person said.

A lower yield environment is positive for government’s ballooning debt service costs and presents a good opportunity for corporates to raise debt at cheaper rates.

However, it creates a conundrum for fund managers, particularly pension funds, who may now be stuck with negative real returns on any new additions to their T-bill holdings of N2.26 trillion.

Real return is deemed negative when it is below the rate of inflation.

As of September, headline inflation printed at 11.24 percent, which means T-bills now offer lower rates than inflation.

There are expectations that inflation could trend higher in the coming months as the impact of the border closure and some fiscal adjustments materialise.

“That will surely present a test for the fund managers and the CBN,” said Wale Okunrinboye, head of research at Lagos-based fund manager, Sigma Pensions.

“If there’s too much money chasing such low returns, it could create a problem for the naira,” Okunrinboye said. “Corporates are well positioned to take advantage of the depressed return in the market to raise debt capital at a cheaper rate.”

The CBN last month issued a directive restricting non-bank financial institutions from purchasing OMO bills, a liquidity management tool of the apex bank.

The move has just about frozen the OMO bills mar-

ket, with the CBN saying last week that it would now play a market-maker role to curtail the illiquidity in the market.

The collapse in interest rates, while forced by the CBN, has positive implications for the economy, according to Phillip Anegbe, head of research at CardinalStone Partners.

“The restriction of local corporates and individuals from participation in OMO is positive for borrowing costs (for corporates and the FGN) as yields are likely to moderate in the near term,” Anegbe said.

The clear delineation of OMO from other money market instruments also allows the CBN to attract Foreign Portfolio Investors with higher rates at a lower cost as the OMO sales are likely to reduce with the restriction placed on domestic nonbank investors.

The restriction of key corporates, such as PFAs and Insurance companies, from participation in OMO is also likely to free up excess investable cash for allocation to assets beyond fixed income alternatives.

“We see legroom for some flows into fundamentally strong equity names as treasury yields moderate,” Anegbe said.

That view is buttressed by the high earnings and dividend yields in the equity market space.

Tier-1 banks are averaging dividend yields of 10.9 percent, while the yield on the one-year T-bills is now below this level.

High dividend yields are likely to attract institutional investors such as PFAs, as the potential for capital gains in fundamentally sound stocks further enhances the appeal of the equity market.

L-R: Osayi Alike, member of panel discussion on Enhancing Social Welfare/CEO, Aspire Coronation Trust (ACT) Foundation; Asue Ighodalo, chairman, ALAGHODARO 2019 - Edo Summit, and Halima Dangote, member of panel discussion/group executive director, commercial operations, Dangote Industries Limited, at the discussion on Enhancing Social Welfare, Alaghodaro 2019 Edo Summit in Benin City, Edo State.

Abusive words, discrimination, ethnic hatred...

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harassment on the basis of ethnicity, offence of racial contempt and discrimination by way of victimisation which can also be regarded as offences that are punishable.

“ Fo r p u r p o s e o f t h i s Act, a person discriminates against another person if on ethnic grounds the person without any lawful justification treats another Nigerian citizen less favourably than he treats or would treat other person from his ethnic or another ethnic group and or that on grounds of ethnicity a person puts another person at a particular disadvantage when compared with other persons from other ethnic nationality of Nigeria.

“A person also discriminates against another person if, in any circumstances relevant for the purposes of any provision referred to in

subsection (1)(b), he applies to the person a provision, criterion or practice which he applies or would apply equally to persons not of the same race, ethnic or national origins as that other.

“A person victimises another if in any circumstance relevant for the purpose of this Act, the person does any act that is injurious to the well-being and esteem of another person by treating the person to less favourably than, in those circumstances, such person treats or would treat other persons,” it stated.

On punishment that goes with hate speech and other related matters, the bill states that “any person who commits an offence under this section shall be liable to life imprisonment and where the act causes any loss of life, the person shall be punished with death by hanging.”

•Continues online at www.businessday.ng www.businessday.ng

Registrars frustrate SEC’s effort as unclaimed dividends...

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date request with us because of the following reason: ‘No signature specimen’.”

This was two months after such specimen had been submitted to the registrar.

The stockbroking firm then proceeded to send hard copies of the mandate form and specimen to the registrar’s office for processing, but there has been nothing done by the registrar, United Securities, till today, according to emails seen by BusinessDay. “It makes a mockery of the entire capital markets that registrars seem to be holding the system to ransom and nothing is being done by regulators to stop this scam. Why can’t dividends be paid into the brokerage accounts of stock market investors, instead of the current sham process of filling paperwork and waiting for months for registrars while they sit on your money and pretend they are working?” said Jide.

“The Nigerian stock market is largely a dividends play.

That is what gets investors excited to invest in the market.

You make it difficult for investors to get their dividends, you then wonder why they are shunning the stock market and buying Treasury Bills where they get their interest instantly, and this nonsense does not happen,” he said.

Another shareholder, Berthram, said he has done his e-dividend mandated for his shares in Union Bank and UBA and has started receiving dividends in his bank account, though it took over one month after he had completed the whole process.

“I just did that of Access Bank,” he said on phone.

A banker’s experience A customer service staff of a bank told BusinessDay that most times, the only challenge they face has to do with portal downtime.

“But as soon as we upload the e-Dividend Mandate, it leaves us and goes to the registrar for them to authorise,” the banker said.

The registrars and their roles Some of the share registration companies in Nigeria are Africa Prudential Registrars plc, APEL Registrars, CardinalStone Registrars, Centurion Registrars Limited, DataMax Registrars, EDC Registrars, First Registrars and Investor Services Limited, Flour Mills Registrars, and Citadel (GTL Registrars Limited).

Others are Sterling Registrars Limited, Unity Registrars Limited, Veritas Registrars Limited, ALL Crown Registrars Limited, GTB Registrars, AXA, Lighthouse Registrars, Mainstreet Registrars, Meristem Registrars, United Securities, and PAC Registrars.

Each of these registrars of shares keep up-to-date record of all stocks investors bought in any company, which include names of individual shareholders, their shareholdings, their addresses, signatures, amongst other salient information.

Among their numerous functions, registrars also transfer shares on behalf of a deceased holder.

SEC extends e-dividend mandate till December 31, 2019 Because the e-dividend initiative remains critical to the elimination of the phenomenon of unclaimed dividend, the SEC management encourages all share-

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holders who are yet to do so to get mandated on the e-Dividend Mandate Management System (e-DMMS) platform before December 31, 2019.

SEC said it recently conducted a strategic assessment of the implementation of the e-dividend initiative across the country and reviewed feedback/observations received from stakeholders and the general public.

The assessment revealed that while remarkable progress has been recorded in concerted efforts through robust enlightenment campaigns to mobilise more shareholders to get mandated on the e-DMMS platform, there remain few pertinent issues that need to be resolved as a precursor to the total discontinuance of the issuance of dividend warrants by registrars.

Consequent upon the foregoing, the SEC management extended the deadline for the discontinuance of the issuance of dividend warrants to December 31, 2019 to enable relevant stakeholders deliberate on and address all outstanding issues.

SEC’s decision is in furtherance of its overriding mandate to ensure that all categories of shareholders and investors are adequately protected.

Reps investigate unclaimed dividend increase despite e-dividend Just last week, the House of Representatives directed its Committee on Capital Market and Institutions to investigate unclaimed dividends in the capital market valued at over N126.03 billion.

This followed the unanimous adoption of a motion @Businessdayng

moved by one of the Representatives, Babangida Ibrahim, at plenary last week.

The motion was tagged ‘Need to Investigate the Rising Value of Unclaimed Dividends, Unremitted Withholding Tax on Dividends and their Attendant Effects on the Nation’s Economy’.

Ibrahim said unclaimed dividends had continued to increase over the years, thus increasing the unremitted withholding tax on dividends in the country.

“The House is aware of the mechanisms put in place to address the issue of the rising value of unclaimed dividends. These include the adoption of electronic dividend payment method, dematerialisation of share certificates, acceptance of dividend warrants in both savings and current accounts,” Ibrahim said.

“Others were the need for the consolidation of accounts by the Central Securities Clearing System and registrars and the need to resuscitate publication of names of owners of unclaimed dividends by companies, all of which had been applied with no significant positive outcome,” he said.

Ibrahim listed the implications of large value of unclaimed dividends on the economic development of Nigeria to include adverse investors’ confidence, decrease in the availability of long-term capital for economic development and the likely volatility in the regulation of the capital market.

The House, therefore, mandated the committee to investigate the rising value of unclaimed dividends and unremitted withholding tax on dividend and their attendant effects on the nation’s economy.

Thursday 14 November 2019

BUSINESS DAY

news

MainOne’s CEO pushes for broadband penetration at Startup South conference

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a i n O n e’s C E O, Funke Opeke, presented a keynote speech at the Startup South Conference held in Uyo, Akwa Ibom State, on November 1, 2019, on the theme “Unlocking the Next 60 Million: Making Broadband Accessible and Affordable.”

The conference was a four-day event created to inspire a generation of young founders, innovators and youths to build scalable and investable businesses across the South-South and South-East states to accelerate development.

The conference, initially conceived as a community project, has evolved into a platform that brings together technology founders, innovators and investors from across Nigeria and beyond to discuss issues focused on deepening broadband access, affordability and youth employment in the South-South/SouthEast states.

Other high-level stakeholders such as Nze Meekam Mgbenwelu, commissioner of technology development, Imo State; Iniobong Essien, commissioner science and technol-

ogy, Akwa Ibom; Sunkanmi Oriyomi, regional manager, Bank of Industry, among many others, engaged in compelling discourse that highlighted the importance of broadband and digital solutions to economic development, stressing the significance of why states across Nigeria should pay attention to enabling broadband in their regions.

The dialogue centred on the notion that the development of the nation’s digital economy lies on extending affordable broadband and the encouragement of innovation hubs, skill development and job creation.

Opeke laid further emphasis to the dialogue by stating, “In this digital age where broadband connectivity is the bedrock of a thriving digital and national economy, we need to focus on increasing access to broadband penetration beyond Lagos and Abuja for our shared economic prosperity, job creation and digital security. We will need to take advantage of the opportunities the digital economy provides if we are to create jobs for Nigerian Youth in the nottoo distant future.”

AXA Mansard emerges as Insurance company of the Year

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he 7th BusinessDay Banks and Other Financial Institutions Award (BAFI) brings together super-achieving deposit, merchant, investment, microfinance banks and other financial institutions to celebrate their contributions as well as that of individuals in the industry, to Nigeria’s economy.

The event, held October 19, 2019 in Lagos, had in attendance dignitaries from the financial and other sectors in the country. Receiving the award on behalf of AXA Mansard Insurance, Yomi Onifade, chief operating officer, said, “We have our esteemed customers to thank for this prestigious award, as they are the reason, we passionately drive towards executing innovative initiatives. We will continue to focus on putting our customers first in everything we do whilst empowering them to live a better life because we believe that therein lies the secret of our success so far.”

While thanking the organizers, he said that “the company is counting on the continued support of our stakeholders to continuously provide superior customer experience as a one-stop, non-bank financial services company”.

The BAFI awards rec-

ognises outstanding performance in Nigeria’s Financial services industry while showcasing excellent work that has been rendered by this industry. The award cuts across banking, insurance, fintech, capital market, markets infrastructure and technology, investment management, pension funds, trustees, registrars and stockbroking.

The CEO, Kunle Ahmed, also commented, “This award is a recognition of our commitment to the delivery of superior customer experience whilst maintaining our position as one of the leading insurance company in the country. We will continue to innovate, create new products and refine our service delivery to ensure we transit from just a payer to a partner for our customers.”

AXA Mansard offers Life as well as Property & Casualty insurance products and services to individuals and institutions across Nigeria.

The Company also offers asset/investment management services, health insurance solutions and pension fund administration through its three subsidiaries - AXA Mansard Investments Limited, AXA Mansard Health Limited and AXA Mansard Pensions Limited, respectively. www.businessday.ng

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L-R: Anya O. Anya, former chairman, NESG/chairman of the Award Ceremony; Priscilla Otti, wife of former GMD, Diamond Bank; Folake Ani-Mumuney, group head, marketing/corporate communications, First Bank of Nigeria Limited, and Marc Wabara, former chairman of Hallmark Bank, at the presentation of the 2019 Professional Excellence in Marketing and Corporate Communications award at the Business Hallmark Awards, to Ani-Mumuney and a wrap-up to the hattrick of awards won by the Corporate Communications guru, in Lagos.

120m Nigerians now have access to internet - NOIPolls … as they spend most time on Twitter, WhatsApp ENDURANCE OKAFOR

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t is correct to say that Nigerians are embracing technology at a pace that is faster than the country’s economy. A new public opinion poll conducted by NOIPolls shows that 61 percent of the country’s population is now using the internet.

This translates to about 120 million Nigerians who are now using the internet, thanks to the affordable and second-hand phones that have found their way into the country.

According to the report released by NOIPolls on Wednesday in Abuja, of the proportion of respondents that claimed to have access to the internet, an overwhelming majority (94 percent) indicated that they mostly access the internet through their mobile phones.

“This proportion was equally

high across the six geopolitical zones, and across age demographics; indicating a wide use of smartphones in the country,” NOIPolls said.

In the report, the Abujabased institution said the wide access to the internet on mobile phones across Nigeria shows that there is a huge market and high demand for smartphones in Nigeria, giving credence to the claim that Nigeria is Africa’s biggest smartphone market.

Analysis of the report revealed that 70 percent of young Nigerians aged between 18 – 35 years have access to the internet compared to the 56 percent for those aged between 36 and 60 years and 28 percent for those aged 61 years and above.

Most of the respondents (95%) who access the internet revealed that they use the internet to engage social networking sites and applications.

“This finding also held true

across geo-political zones and across various age demographics. On the level of awareness, results show that Facebook (95%) and WhatsApp (94%) are the most widely known social networking sites in the country, followed by Instagram (50%), and Twitter (42%), among others,” the report read.

Polls on the proportion of respondents using each social networking platform produced the following results - Facebook (86%), WhatsApp (84%), Instagram (19%), Twitter (11%), and Snapchat (2%).

However, with regards to preference, WhatsApp (51%) is the most preferred social networking site/application, followed by Facebook (45%), Twitter (2%), and Instagram (2%).

Some of the leading reasons Nigerians provided for their preference of WhatsApp, Facebook, Instagram, and Twitter respectively include; “It’s Simple

and Fast” (26%), “Easy to Connect to People With” (20%), “The Platform Allows Government to Obtain Feedback from The Public” (31%) and “It seems more real than other platforms”(47%).

Regarding the average number of hours spent in a day on social media sites/applications, Twitter captured the largest daily cumulative value, as 19 percent of Twitter users disclosed that they spend 10 hours and more engaging in it.

This was followed by WhatsApp with 8 percent of users revealing they spend upwards of 10 hours daily on average.

“Furthermore, the poll results show that respondents considered Facebook (98%), Instagram (88%), WhatsApp (77%), and Snapchat (74%) most effective for advertising, while Twitter (98%) was considered most effective for gaining attention on topical issues and trending subjects.

30% Nigerians in sedentary jobs more prone to diabetes ANTHONIA OBOKOH

... as world celebrates World Diabetes Day

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estimate in the society was about 2.2 percent but recent estimate has indicated a progressive rise and as at now 8.8 percent, almost 10 percent of the population have diabetes.

“Only about 50 percent of those who have diabetes are not aware they have it. So, every diabetic that is diagnosed, there is one going around the society not realising that he or she has this relatively dangerous illness,” he said.

What is more frightening is that there are a certain group of people who works in banks, oil company and other jobs that generally have the sedentary type of lifestyle, and because of relative affluence are able to eat more and eat the wrong things.

“Obesity has increased in the society, so among such group of people is been found to be almost 30 percent diabetic.

Almost one out of every three of them at some stage are found diabetic,” Bamgboye said.

He explained that diabe-

xperts say 30 percent of Nigerians in sedentary jobs are more prone to diabetes, noting that one out of every three of them at some stage is found diabetic.

They say diabetes is a leading cause of blindness, amputation, heart disease, kidney failure and early death, stating simple that lifestyle moderation and screening can reduce the risk, as Nigeria joins the rest of the world to celebrate World Diabetes Day with the theme ‘Diabetes: Protect your family.’

Ebun Bamgboye, consultant physician and nephrologists, Clinical Director at St. Nicholas Hospital, speaks about the burden of diabetes, its related issues and how it can be tackled with proper diagnosis and prevention on Doctors on Air on Wednesday on Classic FM 97.3, hosted by Pamela JacksonAjayi, founder/managing director, Synlab Nigeria.

According to Bamgboye, 20 years ago, diabetes prevalence

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tes, which medically is called diabetes mellitus, a disease that generally part of the more common disease that we call a non-communicable disease, unfortunately for some reason, was becoming much common in Nigeria.

The disease rises as a result of inadequate supply of the hormones call insulin, noting that there are different types of diabetes but the one that is most common is the type 2 diabetes in adults.

However, understanding diabetes, its symptoms and treatment, lifestyle impacts is key for the whole family. People with diabetes should be offered a referral for individualised nutritional education provided by a registered dietician with experience in diabetes management.

Speaking on reasons for screening and addressing the diabetes treatment and management, Shoyingbe Adetola, a diabetes expert, said screening was very important, noting that @Businessdayng

when people are diagnosed with diabetes the functionality of the bitter cells is already reduced by 50 percent.

According to Adetola, another reason for screening will help to know if one is prediabetic and there is a way to reduce the progression to over-diabetes, noting that those with a family history are at high risk of developing the disease.

“If your fasting blood sugar is above 100, but below a 127, we say you have pre-diabetes and if your value is greater than 127, then you are diabetic,” he explained.

The expert explained that over time if blood sugar levels are not controlled the most common complications of diabetes could develop into more serious conditions, including retinopathy, renal failure, and heart attacks and strokes.

He advised that it was important people know their numbers and do blood sugar level regularly.

Thursday 14 November 2019

BUSINESS DAY

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Thursday 14 November 2019

FINANCIAL TIMES

World Business Newspaper ANDRES SCHIPANI

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Bolivian opposition senator took office as interim president on Tuesday, hoping to fill a power vacuum created by the resignation of socialist former leader Evo Morales, who has fled to Mexico after allegations of election fraud.

Jeanine Añez of the opposition Democratic Union party described her move as “a constitutional succession” triggered by “the definitive absence of the president and vice-president” and her position as deputy head of the senate. Amid the continued violence, she added she would “take all necessary measures to pacify the country”, and would call elections as soon as possible.

However, Ms Añez and her supporters lacked the necessary congressional quorum for the move after a defiant Mr Morales arrived in exile in Mexico and ordered his MAS party lawmakers, who hold a majority in the chamber, to boycott the session.

The Bolivian constitutional court issued a statement supporting Ms Añez’s move.

The crisis was triggered by Mr Morales’s resignation on Sunday after he lost the confidence of the main union federation, the Catholic church and the armed forces in the wake of the controversy over last month’s election. His vicepresident and the head of the Sen-

Opposition senator takes office as Bolivia’s interim president Violence continues as Jeanine Añez vows to pacify country and call fresh elections

Jeanine Añez, centre, gestures after saying she was taking office as interim president of Bolivia. She added she would ‘take all necessary measures to pacify the country’ © Reuters

ate, who were constitutionally next in line, resigned at the same time.

Mr Morales denounced the opposition move from Mexico City, where he has been granted political asylum, as “the most deceitful and nefarious coup in history” and vowed continued resistance.

Wall Street firm made its mark with the London whale trade but ran into trouble

Ex-president more radical than ever and his release from jail could galvanise the right

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ess than a day after Luiz Inácio Lula da Silva was released from prison last week, the former Brazilian leader gathered supporters for a fiery stump speech in which he vowed to save the country from “ultra-right” president Jair Bolsonaro.

It was a message rapturously received by the thousands of assembled devotees. But fears are growing that the re-emergence of one of the icons of Latin America’s left after 580 days in jail is more likely to sow discord than unite a bitterly divided nation.

Rather than saving Brazil, Lula — as he is widely known — is poised to polarise it further by preventing the emergence of new leftwing or centrist figures to challenge Mr Bolsonaro and reigniting fears on the right of a return to Workers’ party rule, say political observers.

The situation is further complicated by the nature of his release from prison — it followed a stunning Supreme Court ruling that allows inmates with appeals pending to be freed. The move has been criticised as a blow to governance and accountability in a country plagued by corruption.

“We are going back to business as usual,” said Eduardo Mello, a professor of politics at the Getúlio Vargas Foundation. “[The court

decision] is terrible news for our long-term growth and the development of democracy in Brazil.”

The country’s president during the heady days of the commodities boom from 2003 to 2010, Mr Lula da Silva was last year sentenced to 12 years in prison for corruption, a term subsequently reduced to nine years.

But it was a trial fraught with judicial and political mis-steps.

Leaked recordings released earlier this year appeared to show prosecutors co-operating with Sergio Moro, the presiding judge, who went on to become justice minister in Mr Bolsonaro’s cabinet.

The problems with the case, combined with his longstanding popularity, fuelled an almost fanatical Lula Livre — Free Lula — movement, which this weekend erupted into celebration after his release.

“It is a thrill because it is a return of democracy. Today represents the hope that better days will come,” said Selma Regina Pereira, one of thousands who attended the São Paulo rally clad in the red of Mr Lula da Silva’s Workers’ party.

But the 74-year-old’s swift return to the fray is likely have deep ramifications as he reclaims leadership of the left.

“Since prison, Lula has become increasingly leftwing and increasingly populist. He is a radical Lula now. The result of his release will be more polarisation,” said Prof Mello. www.businessday.ng

Mr Morales and his supporters. In Washington, a senior Trump administration official described Mr Morales’s departure as “a positive step to begin calming the situation on the ground in Bolivia”.

Bolivians were less sure. Some people took to the streets cheering

BlueMountain: the hedge fund that lost its way

Lula’s return to political fray set to deepen Brazil’s divisions BRYAN HARRIS AND ANDRES SCHIPANI

His words drew a sharp rebuke from Luis Almagro, secretarygeneral of the Organization of American States (OAS), who said: “The ones who carried out a coup are those who committed fraud and said they won in the first round” of the election, referring to

and waving national flags on Tuesday night after Ms Añez claimed the presidency. Furious supporters of Mr Morales responded by trying to force their way to the Congress building in La Paz, yelling: “She must quit!”

The OAS, supported by the EU, said that serious and widespread irregularities had marred the result of the October 20 election to such an extent that a fresh vote was required.

Ms Añez said her aim was to pacify the country and to hold fresh elections within 90 days amid calls from the OAS “to ensure the functioning of institutions and to name new electoral authorities to guarantee a new electoral process”.

This will be a serious challenge, given the levels of violence that have plagued the country for the past three weeks, and the depth of its political divisions. Video footage on Tuesday showed police battling supporters of Mr Morales in the city of Cochabamba and masked protesters calling for civil war.

ORTENCA ALIAJ AND JOE RENNISON AND MILES KRUPPA

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hen Californian utility Pacific Gas & Electric filed for bankruptcy protection in January, a once-prominent Wall Street hedge fund was feeling the pain.

BlueMountain Capital, founded in 2003 by two former Harvard Law School students during the halcyon days for the hedge fund industry, reckoned the market was too gloomy on the company that provided gas and electricity to 16m Californians.

After first buying PG&E shares in August 2018, BlueMountain increased its bet last November even as California was again ravaged by deadly wildfires that the utility would eventually shoulder the blame for.

“I still remember the head of distressed [investments] saying they [PG&E] are not going to file for bankruptcy,” said a former BlueMountain portfolio manager.

“Six days later, there it was.”

Nine months on, and the firm has shut its flagship MultiStrategy $2.5bn Credit Alternatives fund after it haemorrhaged half its assets in three years. In October, it completed the sale of the rest of the business to bond insurer Assured Guaranty for $160m.

It was a humbling moment for

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a hedge fund that shot to fame in 2012 after making substantial profits from JPMorgan Chase’s London whale trading debacle.

BlueMountain’s traders went on to assist the US bank in liquidating the calamitous credit derivative positions that chief executive Jamie Dimon was hauled before Congress to explain.

Months later, and riding high on its new-found cachet, BlueMountain poached Jes Staley, now chief executive of UK bank Barclays, from a top job at JPMorgan. Investors followed, pouring money into BlueMountain.

Assets under management But according to six former employees as well as investors, the L ondon whale tr iumph also marked the beginning of troubles that ultimately culminated in a series of botched bets, including stakes in oil shipping companies.

The money managed by the group ballooned to $18bn in 2013 from $12bn the year before, prompting the fund to stray from the corporate bond and derivative trades that were the bread and butter of co-founders Andrew Feldstein and Stephen Siderow and had built its reputation before the financial crisis. Its assets would eventually peak at $23bn in 2016.

“Boatloads of capital have overwhelmed a lot of opportunities that hedge funds used to @Businessdayng

have,” Chris Walvoord, global head of hedge fund research at Aon, said of the dangers funds face from rapid expansion.

Between 2012 and 2018, BlueMountain launched five new strategies, including a systematic equity fund and private capital one. The firm started allocating a portion of the flagship fund to socalled pod traders, where capital is allocated to employees to run their own strategies, according to people familiar with the firm.

Nathaniel Dalton, the chief executive of asset manager Affiliated Managers Group, which bought a stake in BlueMountain in 2007, lamented in May that the firm had moved from its core strengths in credit and volatility trading as AMG disclosed a $415m writedown in the value of its stake.

“There was a lack of direction,” said one former portfolio manager who worked there after the London whale trades. “The firm became very large and they were trying to chase whatever the hot hedge fund thing was.”

Mr Feldstein’s background was rooted in fixed income, having cut his teeth as a credit trader at JPMorgan in the late 1990s.

Former colleagues say he preferred to keep a low profile while Mr Siderow, a former McKinsey consultant, was recognised as the face of the business and was more of a point of contact for investors.

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NATIONAL NEWS

Drastic changes needed to alleviate climate crisis, says IEA Emissions will continue to rise even if governments meet existing environmental targets ANJLI RAVAL

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arbon emissions are set to rise up until 2040 even if governments meet their existing environmental targets, the International Energy Agency has warned, providing a stark reminder of the drastic changes needed to alleviate the world’s climate crisis.

In its annual energy outlook released on Wednesday, the IEA said a rapid reduction in emissions would require “significantly more ambitious policy action” in favour of efficiency and clean energy technologies than those being planned. Until then, the impact of an expanding world economy and growing populations on energy demand would continue to outweigh the push into renewables and lower carbon technologies.

Fatih Birol, IEA executive director, said: “The world needs a grand coalition encompassing governments, companies, investors, and everyone who is committed to tackling the climate challenge. In the absence of this, the chances of reaching climate goals will be very slim.”

The report noted the world’s reliance on fossil fuels remained “stubbornly high”, with a “gap between expectations of fast, renewables-driven energy transitions and the reality of today’s energy systems”. Energy use accounts for almost all global carbon dioxide emissions and about twothirds of all greenhouse gases.

Mr Birol pointed out that the current set of government policies would not bring the world in line

with the Paris climate goals of limiting temperature rises to well below 2C or even a more aggressive 1.5C target to prevent the worst impacts of climate change.

Fossil fuels set to dominate energy demand under current policies Should governments stick with current policies under a “businessas-usual” scenario, carbon emissions from energy would amount to 41.3 gigatonnes by 2040. Yet even if policymakers followed through on the climate measures already announced, the IEA’s calculation was that this figure would only fall to 35.6Gt. Carbon emissions, mostly caused by the burning of hydrocarbons such as oil and coal, trap heat in the atmosphere, which leads to climate change. These emissions grew 44 per cent between 2000-2018 to 33.2Gt. Over the same period, global energy demand — of which fossil fuels made up 80 per cent — increased 42 per cent.

The IEA also modelled a “sustainable development” scenario of stricter energy efficient policies and lower energy demand. While emissions would fall to 15.8Gt under this scenario, critics have said it does not go far enough in mapping the deep cuts needed to limit warming to 1.5C. Although the IEA’s annual survey is considered the definitive assessment of the world’s energy sector, its findings have been under scrutiny from critics who have deemed them too fossil fuel friendly. Even under its most radical scenario, fossil fuels would still make up nearly 60 per cent of the world’s energy mix.

Toshiba launches tender offers for three listed subsidiaries Lossmaking Japanese conglomerate seeks to improve governance amid activist pressure LEO LEWIS AND KANA INAGAKI

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oshiba has launched offers to buy out three of its listed subsidiaries as the lossmaking Japanese conglomerate seeks a definitive break from a 2016 crisis that brought it to the edge of collapse.

The company, which has shed 53 of its 350 subsidiaries in a crash diet of divestments over the past six months, said it would spend ¥200bn ($1.83bn) to take full ownership of the companies in which it holds significant stakes.

Nobuaki Kurumatani, the former banker appointed group chief executive in the wake of the company’s problems, linked the deals to governance, an area in which Toshiba faced severe criticism as it lurched from an accounting fraud scandal to the collapse of its nuclear business in the US and its demotion to the second tier of the Tokyo Stock Exchange.

“The issue of listed subsidiaries is a huge issue for corporate Japan’s governance problem,” he said on Wednesday.

Toshiba launched its tender offers for Toshiba Plant Systems & Services, NuFlare Technology and Nishishiba Electric with hefty premiums of 42, 50 and 60 per cent respec-

tively on the averages of their share prices over the past three months.

Analysts said the generous-looking offers were probably an effort to avoid confrontation with increasingly vocal activist investors camped out on the shareholder registers of the three companies expecting an offer before the end of the year.

The move follows months of mounting pressure from Toshiba shareholders — whose ranks were suddenly joined by activist funds after the company rescued its balance sheet with an emergency issuance of $6bn of new shares in 2017.

“We are very happy with what they are doing. I think the independent directors are really doing their job,” said one Toshiba shareholder who has held the stock through the company’s crisis, referring to its new board where 10 out of 12 directors are independent.

An additional factor in the pressure on Toshiba has been the progress of its close rival Hitachi, another Japanese conglomerate that grew to a wildly ungovernable size and came close to collapse. Hitachi’s decade-long process of thinning itself down through sales or buyouts of listed subsidiaries is widely viewed as a model of how radically some Japanese companies need to pare themselves back to become competitive and profitable. www.businessday.ng

Recep Tayyip Erdogan is keen to find common ground with Donald Trump again © Reuters

Turkey’s Erdogan eyes ‘new era’ with Trump

US president to discuss sanctions and missile systems with Turkish leader AIME WILLIAMS AND LAURA PITEL

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head of a meeting on Wednesday at the White House with US president Donald Trump, Turkish leader Recep Tayyip Erdogan acknowledged that the relationship between the two countries had gone through some “painful” times.

Last month Mr Trump suspended negotiations on a $100bn trade deal and promised to destroy the Turkish economy after Mr Erdogan sent troops into north-east Syria to attack US-allied Kurdish militias. Turkey agreed to halt the offensive a week later but Mr Erdogan still faces the threat of punitive sanctions from US lawmakers who were infuriated by the assault.

Now the Turkish president hopes the two leaders can again find common ground. “Despite the foggy weather in our relationship, we are agreed on the need to solve our problems and improve our relations,” Mr Erdogan said ahead of the meeting at the Oval Office. “We want to embark upon a new era in security issues for both countries.”

Despite deep antipathy towards Turkey among many in Washington, Mr Trump and Mr Erdogan have cultivated a strong personal relationship based on a shared appreciation for transactional politics. Mr Erdogan is the type of strongman leader that the US president is often said to admire and the two men have had a succession of recent phone calls.

Several of those calls have culminated in diplomatic victories for Mr Erdogan, including, most recently, what Mr Trump’s critics said amounted to a “green light” for Mr Erdogan’s invasion

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of north-east Syria when the US moved its troops back from the Turkish border.

Mr Trump’s decision to withdraw the troops provoked widespread anger from American politicians, including prominent Republican lawmakers normally aligned with the president, such as Senator Lindsey Graham.

In response, the US House of Representatives last month overwhelmingly passed a bill setting out harsh financial penalties for Turkey, including freezing the assets of senior Turkish officials, banning arms transfers to the country and threatening large Turkish banks with big fines. US senators have sponsored a bill putting forward similar measures.

Mr Erdogan has said that he plans to use Wednesday’s meeting to raise an ongoing US court case against one of Turkey’s largest banks, Halkbank, for alleged money laundering and Iran-sanctions busting. The men are also expected to discuss Ankara’s decision in July to take delivery of a Russian missile defence system called the S-400.

In private, US officials said that the purchase did qualify as a “significant” transaction with Moscow under the Countering America’s Adversaries Through Sanctions Act, which aims to stymie Russian influence. So far, the Trump administration has refrained from enforcing the sanctions, although many lawmakers are in favour.

According to one state department official, the US is still seeking to convince Turkey, a Nato member, to abandon the system. Turkey should “never have acquired [the missile system] in the first place”, the official said. “There’s still work to get the @Businessdayng

Turks to walk away.”

Robert O’Brien, White House national security adviser, publicly increased the pressure on Ankara on Sunday: “If Turkey doesn’t get rid of the S-400 . . . there will likely be sanctions,” he told CBS News. Punitive measures could strike a blow to Turkey’s economy, which is still recovering from a currency crisis that wiped almost 30 per cent off the value of the lira last year.

Mr Trump wants Turkey to buy the US-manufactured Patriot missile system and abandon the S-400. But, while Mr Erdogan said last week that Ankara was still open to acquiring the Patriot system “if the conditions are right”, he suggested that the Russian purchase was not up for discussion.

Analysts say that although the often pragmatic Turkish leader may want to strike an agreement with the US, his room for manoeuvre is limited by the need to not anger Vladimir Putin, the Russian president, with whom he has grown increasingly close.

“Erdogan is quite susceptible to Russian pressure in Syria,” said Asli Aydintasbas, a senior policy fellow at the European Council on Foreign Relations.

Mr Erdogan’s previous visit to Washington resulted in a fight between protesters and the Turkish president’s security detail. This time Ms Aydintasbas said that she expected “smiles and cute statements and a handshake to suggest that all is well”.

“The real test will be over the next couple of months,” she said.

“Erdogan is reaching the limits of a policy of being able to leverage relations with Russia against his ties with Nato. He’s done that very skilfully until now but it’s getting more and more difficult.”

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FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

China-backed JV wins rights to prized Simandou iron ore project Award to SMB-Winning consortium moves Guinea mine closer to development NEIL HUME AND NEIL MUNSHI

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Chinese-backed joint venture has secured the rights to develop Simandou, one of the world’s biggest untapped deposits of steelmaking ingredient iron ore.

The award to the SMB-Winning consortium, whose investors include Chinese aluminium producer Shandong Weiqiao and the Yantaï Port Group, brings the development of a mine a step closer.

Simandou is estimated to contain 2bn tonnes of iron ore and is one of the great prizes in mining.

Over the past decade the deposit has attracted interest from billionaires and major miners but development has been stymied by legal rows and concerns about costs.

As part of its successful bid, SMBWinning said it would build a 650km railway and a deepwater port on the Guinean coast to transport the ore out of the country and to key markets including China, the world’s biggest consumer of iron ore.

The government has long made a trans-Guinean railway a requirement of the long-delayed Simandou project — despite a price tag estimated at over $20bn. The alternative, shorter route, through neigh-

bouring Liberia, would deprive Guinea of some of the economic activity and infrastructure associated with the mine.

The Simandou tender comes as Guinea has been rocked by street protests, in which nine people were killed last month, according to Amnesty International. Tens of thousands have taken to the streets against President Alpha Condé, who has hinted that he may attempt to change the constitution in order to run for a third term next year.

“The Simandou Project will be crucial for Guinea’s future,” said Sun Xiushun, chief executive of the SMB-Winning. “With the Transguinean railway, Guinea will now have a real lifeline linking four Guinean regions, accelerating administrative and economic decentralisation and strengthening the country’s rail network.”

SMB is Guinea’s leading producer of bauxite, a key ingredient needed to make aluminium. It employs 9,000 people in the Boke region, where it has invested $1.5bn and built two river terminals.

It saw off competition from Australian iron ore producer Fortescue Metals Group to win the tender to develop blocks 1 and 2 of Simandou.

Google in talks to move into banking Move follows Apple’s credit card launch and Facebook’s proposed TIM BRADSHAW

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oogle is talking to US banks about offering current accounts to its customers, accelerating Silicon Valley’s incursion into financial services after Apple’s credit card launch and Facebook’s proposed digital currency Libra.

Google’s move could further alarm lawmakers already anxious about the concentration of increasingly intimate personal information within a few big tech companies.

After Facebook has run into widespread resistance to Libra, Google has said it wants to “partner deeply” with existing financial services providers.

Many regulators in the US and Europe believe that Google’s tactic of bundling new products with widely used services such as its search engine and Android smartphone software is anti-competitive. The European Commission has levied billions of dollars of antitrust fines against Google in recent years after investigations into its search, advertising and Android businesses.

Google’s latest inroads into financial services come as Alphabet, its parent company, is stepping further into healthcare, with a new cloud computing partnership with US health provider Ascension and the planned acquisition of fitness tracker pioneer Fitbit.

While mobile and online payments such as WeChat Pay and Alipay are already widely used in China, Silicon Valley companies have thus far made slower progress into the highly regulated world of financial services. Earlier this year, Apple and

Goldman Sachs teamed up to launch a credit card, offering cash back on purchases of Apple devices and an iPhone app to track spending.

European “challenger banks” such as Revolut, N26 and Monzo have raised hundreds of millions of dollars to lure customers away from traditional financial institutions by offering apps and services that are often cheaper or more user friendly than the incumbents, while US ecommerce groups such as PayPal and Square offer debit cards to certain customers.

Google’s new banking effort, code-named Cache, is the $900bn company’s latest attempt to crack the personal finance industry. It first unveiled Google Wallet back in 2011 as a way for users to send money to each other. But it did not gain real traction in the market until the introduction of Google Pay, which like its chief rival Apple Pay allows smartphones to be used to pay for purchases online and offline. Google Pay has tens of millions of users around the world and is especially popular in India.

Last December, Google obtained an emoney licence in Lithuania, enabling it to process payments and offer digital wallets across the EU, and a separate authorisation from Ireland’s central bank under the second Payment Services Directive.

“Our approach is going to be to partner deeply with banks and the financial system,” Caesar Sengupta, Google’s general manager of payments, said in an interview with the Wall Street Journal. The WSJ also reported that Google was talking to banks including Citigroup about offering current accounts. www.businessday.ng

Moral Money: infighting undermines ESG standardisation push Your guide to the investment and business revolution you can’t afford to ignore GILLIAN TETT, BILLY NAUMAN AND PATRICK TEMPLE

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f you want more Moral Money content throughout the week, check our hub page regularly at ft.com/moralmoney for breaking news, analysis and curated commentary on this bubbling revolution. Follow us on Twitter @ftmoralmoney, forward this newsletter to colleagues who you think would find it valuable, and sign up here if you haven’t already.

Friendly fire from ‘warrior accountants’ Who is best placed to try to change the world? In decades past, the usual answer to that question has been “politicians” or “activists” — or non-governmental groups.

Now, however, another tribe is entering the fray: accountants.

Yes really. These days a wave of initiatives are seeking to embed sustainability ideas into how companies measure themselves and report their activities to investors.

If these fly that could potentially change behaviour more effectively than any policy measure; or so is the hope among these “warrior accountants”.

But there is a catch: as these efforts to build a better accounting system gather pace, there is also inevitable infighting. That could make companies more wary of these measures — and hurt the overall campaign.

Peter Bakker, chief executive for the World Business Council for Sustainable Development (WBCSD) and vice-chair of the International Integrated Reporting Council, is unusually outspoken about the problem. Speaking to Moral Money this week, he warned that businesses may soon ditch these disclosure requests and band together to set their own standards, since there is an “urgent need” to rationalise this space.

“The number of surveys is driving them crazy,” he said. “We make this all way too difficult.”

The would-be standard-setters — such as the Global Reporting Initiative, the Sustainability Accounting Standards Board, CDP (formerly known as the Carbon Disclosure Project) — all share a similar goal, but their inability to co-operate is undermining the entire project, according to Mr Bakker. “They need to come to their senses,” Mr Bakker said.

“They claim to be talking to each other but if you are inside the machinery you know better.”

Some (valiant) efforts are under way to broker a peace. Next week the Impact Weighted Accounts Initiative piloted by Ronnie Cohen and Harvard Business School will hold an important meeting in Argentina that aims to pull these systems together.

The CFA Institute is also throwing its hat into the ring and trying to establish a standardised way for asset managers to report their ESG performance. This system, which is currently under develop-

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ment, hopes to mirror the success of the CFA’s Global Investment Performance Standards (GIPS), which allows investors to know that managers’ performance data are comparable from one fund to another.

Let us hope these efforts make progress: the stakes are huge, Mr Cohen warns. Without a rigorous way to measure impact, it will be impossible for businesses to make the progress they need to keep the system from collapsing.

“If we don’t find different ways of dealing with poverty, a curtain of fire will come to separate rich from poor,” Mr Cohen said, noting that the uprising in Chile has forced his group to move its impact investing conference from Santiago to Buenos Aires. “The reason for this unfair distribution of outcomes . . . is the premise of the system optimising risk and return alone.” (Billy Nauman) Swiss group responsAbility disburses $10bn in impact projects Another notable number has emerged from the impact investing world: Swiss impact investor responsAbility has disbursed more than $10bn worth of private debt and equity into projects ranging from renewable energy programmes to microfinance deals with coffee farmers.

This highlights the fact that investors are demanding sustainable investments like never before, responsAbility chief executive Rochus Mommartz told Moral Money.

Co-founded by Credit Suisse in 2003, responsAbility offers investment products to retail investors, private banking clients and big institutional investors.

Earlier this year, a responsAbility fund received a $20m investment from Starbucks for debt financing to small coffee producers. With the investment from the Seattlebased coffee chain, responsAbility added $1.6m in financing for Great Lakes, a coffee processor and trader for thousands of farmers in Uganda.

One of the biggest developments in impact investing is the emergence of the giant private equity groups such as KKR and TPG, Mr Mommartz said. With those groups hunting to buy sustainable businesses, new potential for equity exits have emerged, he said.

“Could I imagine in two to three years down the road a company picked up by one of those @Businessdayng

players? Yes, that could happen,” Mr Mommartz said.

His group’s work has drawn international attention. Earlier this year, Australian retirement fund Christian Super took an equity stake in responsAbility, marking the asset manager’s first international shareholder. (Patrick Temple-West) The capitalist reformers who would replace shareholder primacy with something that pays more heed to employees, customers, suppliers and the planet have clearly gained ground this year.

However, they lack a crucial feature: a snappy name for the model.

So can a company with a century of branding experience help?

Perhaps. The (very) private company behind M&Ms and Maltesers has been working for a decade on turning a principle called “mutuality” into a formal business model.

Five years ago it engaged the University of Oxford’s Saïd Business School to quantify how financial growth and creating value for society could go hand in hand, and now it is going a step further.

In an interview with the FT, fourth-generation chairman Stephen Badger (pictured) revealed that it planned to turn its in-house think-tank into an institute in Switzerland to push the economics of mutuality as a new economic school of thought, opening up its findings to any company looking “to solve the problems of people and planet profitably”.

Mr Badger said his family company was not trying to make this “the Mars version of capitalism 2.0” but to “unlock the secret sauce to this issue so we can spread it throughout businesses around the world”.

Mars is not known for giving away secret sauces. If nothing else, that looks likely to attract interest in its mutual model. (Andrew Edgecliffe-Johnson) Tech tops list of ESG stalwarts Paul Tudor Jones’ JUST Capital released its new ESG rankings this week and it makes striking reading — not least because the tech sector once again has dominated the list, accounting for eight of the top 10 companies. The ranking looks at how companies perform on five different “stakeholder dimensions” — including how they treat their workers, shareholders and customers, as well as how they impact their communities and the environment.

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Thursday 14 November 2019

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ANALYSIS

Battle-hardened investors edge back into European equities Recent run of inflows comes after $180bn of outflows over past 2 years ANNA GROSS AND ROBIN WIGGLESWORTH

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he European stock market has long seemed like a classic value trap for many global investors who remember how Japanese equities — despite sporadic rallies — are stuck well below their record highs.

Although the FTSE Eurofirst 300 has enjoyed fitful recoveries over the past decade, it remains adrift of its precrisis peak. The pan-European equity benchmark has still not managed to surpass its 2000 highs, while the S&P 500 has doubled over that period.

But some analysts and investors think change may be afoot. They note that the continent is still experiencing anaemic economic growth and rising political tensions, but see reasons for optimism. And as the European Central Bank continues to keep a lid on bond yields through its latest burst of stimulus, some investors are being tempted by equities that offer a 3.6 per cent average dividend yield.

The FTSE Eurofirst is up almost one-fifth this year, nearly keeping up with the rally on Wall Street. European equity funds have now enjoyed three consecutive weeks of inflows totalling $3.4bn — the longest and strongest streak in a year and a half.

“European equities have been in the freezer sentiment-wise for a very long time,” said Kasper Elmgreen, head of equities at Paris-based Amundi, which manages €1.6tn of assets.

“I don’t think we have enough data points to call it a trend reversal . . . but there are a lot of things pointing in the right direction. From my perspective European stocks are very attractive.”

Analysts point to a calming of economic headwinds as a major factor in improved sentiment towards eurozone stocks. Citi’s Economic Surprise Index, a measure of whether indicators are ahead of or below expectations, has been negative for most of 2018-19, but has recently seen a bounce into positive figures as data has started to improve.

A graphic with no description European banks, shunned by many investors since the eurozone crisis, are a good example of the shift.

Although they remain unloved in general, down close to 80 per cent from their pre-crisis peak, bank stocks across the eurozone have jumped almost a fifth since mid-August, led by near-40 per cent surges for Bank of Ireland, CaixaBank of Spain and Italy’s UniCredit.

The international backdrop has also brightened. As more than half of European companies’ sales are from overseas, markets have also responded warmly to an easing of trade tensions between the UK and the EU, and the US and China.

That brighter global picture has “eliminated at least some of the economic fears we had just a few weeks ago”, said Wayne Wicker, Washington DC-based chief investment officer at ICMA-RC, which manages about $50bn of assets.

Nonetheless, pessimism on Europe remains endemic and entrenched — with some justification.

The IMF made a gloomy assessment of the continent in its latest regional economic outlook, urging governments to make plans for a “synchronised fiscal response” if growth falters further.

Alibaba gets Hong Kong exchange green light for share sale Chinese group aims to raise up to $15bn in one of world’s biggest fundraisings this year DANIEL SHANE AND MERCEDES RUEHL

A

libaba has won approval from the Hong Kong stock exchange for a secondary listing in the city to raise as much as $15bn, according to two people familiar with the matter, in what is set to be one of the world’s biggest fundraisings this year.

The Chinese ecommerce company will start a week-long investor roadshow on Wednesday ahead of bookbuilding, after it secured approval for the mammoth fundraising from the Hong Kong stock exchange’s listing committee, said one of the people.

Pricing is expected to be confirmed on November 20 with the shares to start trading on the Hong Kong exchange in the week of November 25, the person said.

The listing approval and timeline were first reported by the SCMP, the Hong Kong English-language newspaper owned by Alibaba.

Alibaba and the Hong Kong stock exchange both declined to comment.

The Chinese group, which listed on the New York Stock Exchange five years ago, had sought to take advantage of positive momentum following its annual Singles’ Day event on Monday. The annual retail extravaganza, the world’s biggest, saw shoppers spend a record $38bn on goods through Alibaba’s online platforms.

Alibaba originally filed for a Hong Kong listing in June and had hoped to raise up to $20bn before

plans stalled amid deepening political unrest in the Chinese territory.

The company is now aiming to raise between $10bn and $15bn, though people with knowledge of the matter have said that the size of the deal will probably be closer to the lower end of that range.

The share listing would also be a big win for the Hong Kong bourse, which has seen fundraising activity rebound since September following a quiet summer. A series of $1bnplus listings in the past few months have taken funds raised from listings this year to $21bn, according to Dealogic data — although that still trails the $32bn raised in Hong Kong in 2018.

However, the Alibaba share sale comes as months of political unrest have hit equity market sentiment in the Asia finance hub, with violence increasing sharply in recent days.

Protests have crippled Hong Kong’s transport network this week, after a police officer shot an unarmed demonstrator and a man was set on fire by protesters after a confrontation. The benchmark Hang Seng index is down almost 4 per cent since Monday.

“With the political situation in the city increasingly taking a turn for the worse, Alibaba’s secondary listing could be facing significant headwinds,” said a Hong Kong-based former head of Asian equity capital markets. “Even though this will be a big, eye-catching offer by one of China’s best-known companies, it is possible that the transaction size may have to be revised, in light of the ongoing unrest and deteriorating situation.” www.businessday.ng

Vulnerable satellites: the emerging arms race in space With few rules to guide conduct, powerful nations are taking measures to protect a cog of communications technology MICHAEL PEEL, CHRISTIAN SHEPHERD AND AIME WILLIAMS

H

alf a century after the first moon landing, there is a surprising entry into the geopolitical tussle over space

— Norway.

The Nordic nation plans to launch two satellites in 2022 to bring strong broadband coverage to its strategically important Arctic north. Satellites were once able to roam freely without fear of interference, but that is no longer the case as the great powers fight for supremacy in space.

As a result, Norway is taking undisclosed defensive measures.

These could include anti-jamming and anti-radiation technologies as well as other new systems to protect its satellites.

“We never thought about it before, but now the issue of security has come into space,” says Colonel Stig Nilsson, head of the defence ministry’s space programme for Norway, a Nato member that borders Russia.

“It’s the dilemma that the more dependent you become on technology, the more you need to build resilience — so technology doesn’t become your Achilles heel.”

Space has long been a forum for geopolitical competition, but in the past few years it has become emblematic of a brittle international order where assertive countries such as China and Russia are looking for new ways to challenge American military dominance.

A graphic with no description The starting gun was China’s 2007 test of an anti-satellite missile, which thrust the issue of satellites’ safety to the top of the military agenda.

The emerging arms race has now evolved to include the development of electronic warfare, directed energy weapons and cyber assaults, according to a report published by the US Defense Intelligence Agency this year.

Over the past decade, militaries have grown increasingly dependent on satellites to monitor troop movements, detect missile launches and organise battlefield communications. But those same satellites have become more vulnerable to attack or disruption by rivals.

“In space, we [in the west] still collectively maintain the edge,” says one European military official. “The problem is that edge is a target.”

The gradual build-up in space capabilities has gathered pace.

President Donald Trump invited mockery last year when he an-

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nounced the creation of a dedicated US “space force”, but it is an initiative that has been copied in some respects by allies, notably France.

Nato launched its first ever space policy this year and diplomats from the western alliance’s member states say there is a good chance a leaders’ meeting in London in December will declare space a “domain” of operations. That would give it the same status as land, sea, air and cyber space, where an assault on one country would trigger a collective response — as happened after the September 11 2001 terror attacks.

Yet for all the attention now paid to space, there are few rules or procedures to manage disputes, or even to deal with the growing amount of debris, such as collision damage or disused satellites.

“We are absolutely going to see space playing a role in future conflicts on Earth,” says Brian Weeden, a space expert at the Secure World Foundation, adding that satellite-jamming was coming within reach of militant groups such as Isis. “It’s easy to do — and it’s relatively cheap.”

The significance of space has risen as societies have become more dependent on signals directed through constellations of governmental and commercial satellites. They have a host of uses, from entertainment to navigation, but they are also central to military operations. “Everything we count on — rapid deployment, intelligence sharing, pictures of the Baltic Sea and the Black Sea — all of these have space-based platforms,” says General Ben Hodges, former commander of US Army Europe.

That increased reliance on space is evident in the growing hazard presented by defunct craft and other waste. The European Space Agency said earlier this year that there are now about 5,000 satellites in space.

More than 3,000 of these are no longer operational. Break-ups, explosions, collisions and other events mean about 34,000 pieces of debris, longer than 10cm, 900,000 between 1cm and 10cm and 128m between 1mm and 1cm are estimated to be in orbit — all capable of causing damage.

Bar chart of Satellites by purpose and user, as of March 31 2019 showing China has almost 300 satellites in orbit Recent headlines highlight the tensions. In July, the EU’s Galileo satellite navigation system suffered almost a week-long outage, although officials insisted there was no evidence of foul play. In September, the ESA had to perform its first ever @Businessdayng

avoidance manoeuvre to protect a spacecraft from a possible collision with a vessel in another satellite constellation.

Skirmishes between rival countries have grown as the means of interference with space infrastructure have become more sophisticated.

Last year, Florence Parly, France’s defence minister, accused Russia of spying when it manoeuvred a craft to eavesdrop on a Franco-Italian military communications satellite called Athena-Fidus in 2017 — an allegation the Kremlin denied.

It is an indication of the lack of regulation in a zone owned by no one and still governed largely by general principles first enshrined in the 1967 Outer Space Treaty. Article 1 says “the exploration and use of outer space, including the moon and other celestial bodies . . . shall be the province of all mankind”. But the only explicit restriction on the use of weapons outside the Earth’s atmosphere is a ban on nuclear arms.

The combination of the rising importance of space and the light regulation of it has opened up many opportunities for ambitious governments — most notably China and Russia.

In the case of China, President Xi Jinping has prioritised and accelerated Beijing’s space programme, which included the first landing on the far side of the moon last year.

Beijing even recorded more rocket launches than the US last year — 38 versus 34 — although it still lags far behind American rocket power.

The Chinese leadership has set still more ambitious goals in an effort to become an “all-round space power” by 2030. It aims to complete its global navigation satellite system Beidou by 2020, an operating space station by 2025 and a permanent lunar research station by 2035.

Russia’s own renewed effort marks a revival after a slump in research and funding that followed the collapse of the Soviet Union, three decades after it had beaten the US into manned space flight with the 1961 voyage of Yuri Gagarin. While there are still areas of co-operation with Washington — US Atlas rockets are powered by Russian-made RD180 engines, for example — there is also a hardening edge of rivalry.

In May, Russian president Vladimir Putin said the “preservation of strategic stability and military parity” depended on Russia’s “ability to effectively resolve security tasks in outer space” and develop military and dual-purpose spacecraft.

Thursday 14 November 2019

BUSINESS DAY

49

Garden City Business Digest Eye on partnership:

What NIWA saw at Naval Shipyard in Port Harcourt • And how Moghalu plans to revive water travels to save the roads • The Commodore says Navy, Nwakama Dredge Ltd are ready Ignatius Chukwu

I

t was getting dark but the newly appointed CEO of the Nigeria Inland Waterways Authority (NIWA), George Moghalu (PhD), made sure he successfully led his team to the all-important but sensitive facility in downtown Port Harcourt, the Naval Shipyard in Reclamation Road that juts into the waters through a modern jetty.

Moghalu was received by a Commodore, Bolaji A. Orederu, who is the Managing Director/Chief Executive Officer of the Naval Shipbuilding Limited (NSL). The Naval officer later told journalists what he showed to the NIWA delegation, thus: “What we have shown to the Managing Director of NIWA are the facilities of the Naval Shipyard Limited (NSL). We also talked about the history of the yard.

“The NSL is one of the subsidiary companies of the Navy Holdings Ltd based in Abuja. This has several companies like the Naval Dockyard in Lagos, the Admiralty University in Ibuzo, Delta State, Navy Building and Construction Company (with other construction concerns under the group).

“Our task is to carry out maintenance, repairs, and construction of boats, ships and crafts, both for the Navy and the entire maritime community. That is what we have been doing over the years.

“By 2013, the Navy decided to take it to the next level by going into partnership with a Chinese company, China Shipbuilding and Offshore International Limited (CSOIL). The outcome of the partnership is a Special purpose Vehicle (SPV) called ACSOIL (Admiralty China Shipbuilding and Offshore International Limited), which is a Joint Venture (JV) between the Nigerian Navy and the Chinese company. It is based on this JV that the Chinese company has

MD of NIWA, George Moghalu (m) flanked by the right by far right my Uche Amadi, GM Business Devt of NIWA; CEO of Naval Shipyard Limited, Abolaji Orederu and left by Osita Anazodo, Technical Adviser to MD of NIWA. The trip was at the instance of Nwakama Dredge Nigeria Limited which has entered into technical collaboration with the NLS for fabrication of watercrafts that may be used by NIWA and other clients.

supported us with some infrastructure which we went to see. These include the 272-meter Jetty, the 5000 ton floating-dock and the integrated workshop which we have seen. These are aimed at upgrading the NSL Yard to a world class facility where we can carry out all those things we said we can do.

“Apart from boats and ships that we are into, we are also looking at playing an active role in the oil and gas industry through marine fabrication and construction of offshore structures like self-propelled barges that we are talking about with NIWA and other marine crafts that we can do here.

“Those are the areas that we are looking at, now. The future looks bright because of the Nigerian content law and other incentives for Nigerian companies. There are many things we can do. Through encouragement and support, we can get them done.”

On his own, the Moghalu explained to

newsmen what a partnership with NSL would mean to NIWA’s mandate. “It means quite a lot, we are talking about the naval dock here, about an establishment that would help us to address the challenges of building new barges, ship repairs, new floating residences in waters, etc. For us, this visit is quite educative, intriguing and educative.”

On fears that of waters due to risks and huge insecurity and what NIWA’s plans were, the new CEO said: “We are into water already, not venturing into it. Our principal responsibility is to make water travels possible and viable. We have always said that we have over 10,000 km waterway and about 3600 of it are navigable.

We want to ensure this is done all year round.

“Security is being addressed. The Marine Police has a duty in it. We are engaging the Navy to play expected roles so that our waterways will be safe. Waterways hold a lot of potential in water transportation in cargo and passenger

movement. It is our desire to make water transportation as one of choice. We are pursuing it gradually.”

On what the nation would expect after the PH visit, he said; “The visit to PH area office is the second after my visit to Barau River Port that was completed and commissioned. We want to see things for ourselves and know where we are today to move. We are consulting and relating with agencies of government involved in water transportation.”

Addressing fears over water hyacinth (weeds) clogging the waterways, Moghalu said it is not only water hyacinth but floating debris, wrecks on water. “The last tender few days back, we opened the tech bid on the tender in circulation. Four items there have to do with water hyacinth, wrecks and floating debris. You do this on regular basis. Water Hyacinth comes every season. You keep fighting it. We are determined to ensure that our waterways are navigable all year round.

We have a target, we have the determination, and we have the ambition to ensure that that transportation is safe and navigable all year round.”

While showing the NIWA boss around, the Superintendent said most of the equipment imported into Nigeria could be made in Nigeria because it did not require rocket science.

Officials of Nwakama Dredge told newsmen on the sidelines that the visit is a timely one as it is likely to provide the opportunity for Nwakama Dredge Nigeria Limited and Naval Shipyard Limited to offer their expertise in design and construction of dredging vessels and selfpropelled barges critically required by NIWA to drive the inland waterways transportation.

“This is at a time that the Federal Government is determined to make NIWA make effective use of the waters for active water transportation to compliment the rising return of the railway system of transport so as to reduce dependence and pressure on roads.”

Asa-North brainy boys take 3rd in Shell Quiz, cry to ‘big boys’ back home to give peace a chance Port Harcourt

by Boat

IGNATIUS CHUKWU

T

wo students of Community Secondary School, Asa in Asa North of Imo State, participated for the first time in Shell Quiz Contest but surprised everyone by coming third at the grand finale at Shell Industrial Area in Port Harcourt.

Passing through the maze of what Shell Headquarters in Nigeria looks like alone could throw any rural-based teenager off balance, let alone sitting in the majestic restaurant hall to face seasoned quiz masters like Emma Dorgbaa and the the anchor, Gladys Amu-Nnadi whose diction and syntactical flow could confound any unprepared youth like they were in London.

Yet, the Asa kids surfed the waves and carted away the of endless rows of computes and schooling items back to their Asa enclave.

By this, the lads chose to rewrite the disturbing narative that Asa seems to post to the Nigerian community.

Asa North is emerging as a community with top prospects, if the youths of the area would give the Gas Plant coming up there a chance. Of all the over five gas experimental projects earmaked in Nigeria, Asa North Project is said to be the first coming on stream.

The construction stage is said to be about two years being built by Shell in the plan to transit to domestic gas. Instead, various youth groups armed to the teeth are said to fight over the huge payouts meant for their cluster from the Glomal Memorandum of Understanding (GMoU) projects.

Shell usually allocates hundreds of millions to host communities on regular basis to plan and execute their own projects to move their communities up where any Shell projects go on ; no more the MoU template that allowed Shell execute for them. They now allow them to chose their cluster chairman, choose their projects within budget, choose their contractors, and alow them execute the projects with the supervision of a monitoring NGO. But, Asa youths seem to trust in their guns rather than on consensus, thus always engaing in violent conflicts witin thmselves and levying the outcome on contractors executing jobs for Shell, through constant shut-down

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actions. The cluster heads seem to spar with the chiefs while the youths are divided on loyalty lines ; guns seem to speak louder. But, as the school lads joined the rest of the region to come test their brains, the experience seemed to bring a new vista in their undertanding of the external environment.

The principal of the school, Kate Ucheegbulem, told newsmen that the school had little time to prepare for the contest, saying if they could take third position within such time, that the future seemed bright. They came behind Community Secondary School, Rumukwurushi (2nd) in Port Harcourtand Community Secondary School, Aleto (1st).

The Asa boys told newsmen that they have now been fired up to pursue academics and

The Asa team: James Claver and Miracle Okemma with their prncipal, KateUcheegbulem (m) admiring their trophy in the Shell Quiz

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civilised methods. Claver particularly said he would go home to appeal to the big boys of the area to please find peaceful ways of implementing the GMoU and allow the younger ones to study in peace and grow into good adults and leaders of tomorrow so they can meet up with their counterparts from other regions. It was so touchy.

The GM, external relations of Shell, Igo Weli, seemed to read the minds of the Asa North boys when he told newsmen that Shell has options for survival with presence in 70 countries, but that the young lads sprouting like flowers in the Niger Delta may not have it. « The focus is on public schools because we believe that that is where the attention is needed. We do some assessment to select the finalists. I believe in one thing; in terms of the quality of the Nigerian human capital, there is no doubt that we have quality human capital, even at levels you cannot believe.

“So, the future is bright when you look at quality human capital, but the enabling environment is also key. Why is it that when people leave here and go to other countries, their performance is exceptional? What are the things that we do that discourage people to grow? We need to ask ourselves questions.

What are the things we are doing in the Niger Delta that is making the region unattractive for investment? These are the questions we must begin to ask.

@Businessdayng

50

Thursday 14 November 2019

BUSINESS DAY

Investing in Rivers State Engineer says Stockgap lpg facility in PH is a breakthrough by Nigerian companies •As Gov Wike admonishes youths on kidnapping; wants jobs for the boys Stories by Ignatius Chukwu

W

hat is being described as a major breakthrough for Nigerian engineers and companies took place last week in Port Harcourt, Rivers State, when a liquefied petroleum gas (lpg) facility belonging to Stockgap Fuels Limited was commissioned by the Nigeria Liquefied Natural Gas (NLNG) at Rumuelumeni area of the Garden City.

The NLNG top managers described it as a transition to domestic gas market revolution; the Rivers State government described it as stamp that Port Harcourt is safe for investments going the shear size of the investment; and the company that built it, Caska Engineering, described it as stamp on the ability of Nigerian engineers and companies to start and finish a huge project in oil and gas, including funding.

The CEO of Caska Engineering, Phillip Yaro, named two Nigerian engineers he said must be in the hall of fame for the massive breakthrough in the Stopgap gas project as Boni Ladi and Sampson oladipo.

He said: “What has happened here today is a big deal for Nigeria workers who delivered this project, especially because it has been delivered as a safe facility. It is essential to note that what makes this as a breakthrough is for trusting Nigerian companies to deliver this sensitive complex. The Department of Petroleum Resources (DPR) monitored every single detail to a perfect finish.

“It is number one integrated facility in Nigeria. Another one is coming up in Lagos. This is the best terminal

Gov Nyesom Wike (2nd L); MD of NLNG Tony Attah (L), Chairman of Stockgap, Obiomarije Stanley (2nd R); and MD of Stockgap, Chinyere Stanley during the Maiden NLNG DLPG Delivery to Stockgap Terminal.

technology in town. Foreign companies jostled to build this and even fund it, but this chairman (Stanley Obiamerije of Stopgap Ltd) trusted Nigerians to do it. Caska Engineering is a Rivers company, and we have worked here for 30 years. The lpg tanks here were built to full guarantee of 30 years.”

The future is gas - Stopgap chairman: Stanley Obiamerije The future is gas. By this project, we reduce gas emission. The project began in 2013 when we acquired the land here and was completed in 2019.

The impetus to embark upon this came when the FG asked NLNG to dedicate a portion of its gas to domestic use and also to replace existing gas

cylinders used in homes.

Key benefits to NLNG include that they can now create access to its gas to Nigerians. This will create massive jobs. And, Rivers State is to become a viable destination of investments. Channel clearing is one of the benefits. We thank the governor for fulfilling his promise to deepen the water channel. Now, lpg is to come to our doorsteps. It is the energy of the future.

Now again, NLNG is global player from Nigeria – Tony Attah Today is a special day for us at the NLNG, for Rivers State and for Nigeria because this is another remarkable display of being a global player from Nigeria. The lpg is a source of cleaner

energy. This is domestic gas revolution; it marks the beginning of another 30 years of the NLNG. This will save foreign exchange (forex) for importation of kerosene and to save lives in smokes. It will create over 10,000 jobs during construction and would attract over $10Bn investment. Nigeria has been riding on the back of oil for 50 years, it is now time to fly on the wings of gas.

PH is a better place to invest Gov Wike I simply lack words today. I just marvel at the sheer wonder of this breakthrough here. I salute the investors that have shown the courage to invest here because not many people want to embark on this level

of investment.

This has doused my anger when the NLNG celebrated their 30 years anniversary in Abuja instead of in PH, I am happy because of this project (Stockgap Limited) and for making the Train-7 project a reality.

Port Harcourt is a better place to invest. Many people like our gas but do not like our people. Stockgap Limited has done well. The FG has not given their part of the Bonny Road fund, maybe because it is Rivers State.

Bonny Channel? The FG/NPA is only interested in collecting fees but they expect us to dredge the channel.

Look, has been killed and you are developing another port in Lagos, because we are Rivers State? I will construct this road to facilitate movement of trucks for gas.

Let’s work to reduce kidnapping I urge the youths to shun kidnapping and work. I see that most of them now prefer kidnapping to working because with one operation, some make N5m. So, what is work to him?

I however urge you to project that is in your area, but the company should give jobs to our people. Give jobs to Nigerian engineers. See this wonder here. I am proud to commission this because of this aspect. We will partner with you (Caska Engineering) to train our boys in welding.

Investors in this project will benefit well. Settling people makes kidnapping thrive. Youths prefer to kidnap than to work. So, stop paying kidnappers. Partner with the state government to achieve best results when there is kidnap of your relation. Leave crime alone. Do not kidnap people, though things are hard. Striving to create jobs and run a successful company makes one grow grey hairs but it is a good one.

Port Harcourt points to ‘Innovative Products for Today’s Market’ •As PHCCIMA’s Nabil Saleh unveils international trade fair logo in Port Harcourt

T

he president of the Port Harcourt Chamber of Commerce, Industry, Mines and Agriculture (PHCCIMA), a chief, Nabil Saleh, says the important focus of the 2019 Port Harcourt International Trade Fair is the search for innovative products for today’s market. In essence, those exhibiting in PH would aim to seek solutions to today’s challenges in their product engineering.

Saleh made this known when he and others unveiled the logo of the trade fair at the PHCCIMA Hall in Garrison area last week. He disclosed that 2019 would be unique in PH, saying goods would be coming from all over the world and buyers would have wide range.

Share knowledge: A striking feature would be the sharing of knowledge all through the trade fair days that would spike business growth.

There is provision also for relation and leisure with the best entertain-

ers coming.

He made it clear that trade fairs create jobs, contacts, confidence, etc.

It is going to be a world class meeting place.

Rivers is safe: Another major significance of the PH trade fair is to show to the world that Rivers State is safe to live and do business in. “Support the government to move Rivers

Nabil Saleh, PHCCIMA President www.businessday.ng

forward. Gov Nyesom Wike is very supportive of businesses.”

He however reminded the business community that PHCCIMA has sole right to trade fairs and exhibitions. “Any other group is wrong to stage trade fairs. Contact us or you will be handled like illegal people”.

This seems to be a serious reminder because some credible organizations are staging annual exhibitions in the city, and some of them are also members of the PHCCIMA. Maraizu Uche: Trade fair strategist The making of an international trade fair PHCCIMA with about 2500 member companies (CEO) is one of the leading chambers in Nigeria. It is dedicated to the growth and development of businesses in PH. It now has a One-Stop-Shop centre which allows organizations to come to PHCCIMA and access all members. Training and seminars are now a common feature

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especially with Google.

We are working with the government to find out what the private sector can handle for them. Youth programmes and women issues are included. There are international contacts and partnerships with big corporations such as the NLNG, Shell, etc.

There is strong and professional leadership led by the president, Nabil Saleh, plus others with different skills.

They come together to move things.

We are first e-Chambers in Nigeria; computer network, e-platform, attendance clocking, member data base, e-magazine, active trade groups with specializations as main hubs of the activities. There are large families of partnerships around the world.

Trade fair is the flagship of the activities. It is by law for Enugu, Lagos, Abuja and Port Harcourt. We are focusing on innovative products. Selling points for PH International Trade Fair; PH is safe for business with @Businessdayng

many positives; More businesses, more jobs more safety. Increase in business is decrease in insecurity; Companies from the USA, EU, China, etc, are coming; We have a scheme for young ones called ‘From Classroom to Boardroom’.

Mike Elechi: Chairman of trade fair planning committee: This is to appeal to the media for more support. Its about partnership, to make the trade fair a success.

Embassies and companies from Taiwan, Namibia, Thailand, China, Syria, Lebanon, are expected to attend. Ghana pulled out because of border closure because they could not make it to the Lagos International Trade Fair.

Note that the key objective of the trade fair is innovation and alternatives, not necessarily cheap products.

US travel ban rather points out PH as safe. It is remarkable.

The focus of the fair is innovation and alternatives, not cheap products.

Thursday 14 November 2019

BUSINESS DAY

51

Live @ The Exchanges Market Statistics as at Wednesday 13 Nov. 2019

Top Gainers/Losers as at Wednesday 13 November 2019 LOSERS

GAINERS Company

Opening

Closing

Change

GUINNESS

N23.3

N23.7

0.4

ZENITHBANK

N17.4

N17.8

0.4

ACCESS

N9.55

FBNH VITAFOAM

N9.85

0.3

N5.6

N5.7

0.1

N3.55

N3.65

0.1

Company

Opening

Closing

Change

TOTAL

N123.2

N110.9

-12.3

DANGCEM

N147.2

N145

-2.2

UNILEVER

N19.6

N18.5

-1.1

GUARANTY

N28.7

N28

-0.7

N5.55

N5

-0.55

PZ

ASI (Points) DEALS (Numbers) VOLUME (Numbers)

26,339.11 5,031.00 610,575,893.00

VALUE (N billion)

11.104

MARKET CAP (N Trn)

12.821

Profit taking in mid-to-large cap stocks seen drive Index lower by 0.37% … Total, Dangote Cement, Unilever, GTB, PZ top laggards Stories by Iheanyi Nwachukwu

N

igeria’s stock m a r k e t closed negative (-0.37percent) on Wednesday, thereby reversing the previous day’s record gains.

This southward close was fueled by investors’ decisions to take profit in stocks like Total Nigeria Plc, Dangote Cement Plc, Unilever Nigeria Plc, GTBank Plc and that of PZ Cussons Plc. The value of listed equities stood at N12.821trillion from a preceding day high of N12.878trillion, representing a decline of N57billion.

“The performance of the ASI can be largely attributed to the decline in market heavyweight (Dangote Cement) as well as profit taking by investors in some of the counter that rallied in recent session.

“However, with an increase in transaction sizes in

recent sessions and continued buy interest in banking stocks, we expect the ASI to return to the positive side on Thursday in the absence of sell offs in heavyweight stocks”, said market analysts at Lagos-based Vetiva Securities.

The NSE All Share Index (NSE) which opened at 26,456.39 points decreased to 26,339.11 points at the sound of the trade closing gong. In 5,031 deals, equity dealers exchanged

610,575,893 units valued at N11.104billion.

Total Nigeria Plc led the losers table after its share price declined from N123.2 to N110.9, losing N12.3 or 9.98percent, followed by Dangote Cement Plc which dropped from N147.2 to N145, after losing N2.2 or 1.49percent. Unilever dropped from N19.6 to N18.5, down by N1.1 or 5.61percent, GTBank declined from N28.7 to N28, losing 70kobo or 2.44per-

cent, while PZ Cussons Plc was also down from N5.55 to N5, losing 55kobo or 9.91percent.

Meanwhile, Zenith Bank Plc rallied most after its share price moved from N17.4 to N17.8, adding 40kobo or 2.30percent, followed by Guinness Nigeria Plc which advanced from N23.3 to N23.7, after adding 40kobo or 1.72percent and Access Bank Plc which rallied by 30kobo or 3.14percent, from N9.55 to N9.85.

NSE gains sustainability eminence with Head Corporate Communications elected into GRI, Amsterdam

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he thought leadership demonstrated

by Nigeria’s premier bourse, The Nigerian Stock Exchange (NSE), in the field of sustainability, is gaining global attention as its Head of Corporate Communications, Olumide Orojimi was recently elected into the Stakeholder Council of Global Reporting Initiative (GRI), Amsterdam, Netherlands, for a three-year term, commencing January 1, 2020. The election announcement was made via a press release posted on the GRI website announcing departing and joining new members of its various governance bodies.

GRI is an international independent standards organization that helps businesses, governments and other organizations understand and communicate their impacts on issues such as climate change, human rights and corruption. The Stakeholder Council draws up to 50 diverse members from all United Nations-defined regions: East Asia and Pacific, Europe and Central Asia, Latin America and the Caribbean, Middle East and North Africa, North America, South Asia and SubSaharan Africa. The Council is one of GRI’s three governance bodies that advise the Board on strategic issues.

The Stakeholder Council’s www.businessday.ng

key governance functions include appointing Board members and making recommendations on future policy, business planning and activity.

According to his LinkedIn page, Orojimi has 18 years’ experience as a leader in triple-bottom-line (People, Planet and Pros-

perity) business practice.

He started out his career on the Advisory services side working in Advertising, Public Relations and Experiential Marketing. He was headhunted by one of his financial services client (3rd most capitalized bank then) as Corporate Brand, Events and Sponsorship Manager.

The switch marked a new career in brand management, events, investor relations, public relations and sustainability. He later joined Africa’s leading indigenous integrated energy company, where he managed the corporate brand as well as marketing communications for some of its subsidiaries.

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Global market indicators FTSE 100 Index 7,352.97GBP -12.47-0.17%

Nikkei 225 23,319.87JPY -200.14-0.85%

Generic 1st ‘DM’ Future 27,657.00USD -6.00-0.02%

Deutsche Boerse AG German Stock Index DAX 13,230.94EUR -52.57-0.40%

S&P 500 Index 3,091.91USD +0.07+0.00%

Shanghai Stock Exchange Composite Index 2,905.24CNY -9.58-0.33%

Nigerian-British Chamber of Commerce inaugurates 16th President

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he Nigerian-British Chamber of Commerce (NBCC) will host its members and distinguished guests to its Presidential Inauguration Dinner tomorrow Friday, November 15, 2019 at Eko Hotel and Suites, Victoria Island, Lagos.

The Annual Presidential Dinner is the premier event of the Nigerian-British Chamber of Commerce held to celebrate excellence in the Nigerian Business Sector and to promote AngloNigerian business relationships.

This year, the dinner is set to be even more symbolic with the Inauguration of the Chamber’s 16th President – Kayode Falowo, and the decoration of His Excellency, the Governor of Lagos State, Babajide Sanwo-Olu as a Patron of the Chamber.

Speaking at the NBCC October Breakfast Meeting, Kayode Falowo noted that the Presidential Dinner “is not only to celebrate and honour the President but also hold a grand and befitting event to showcase the Chamber and its activities”.

This year’s dinner promises

to be a riveting experience with Niyi Adebayo, Minister of Industry, Trade and Investment as the Special Guest of Honour and Martin Sorrell, Executive Chairman of S4 Capital as the Guest Speaker.

Chairman of the Presidential Inauguration Dinner Committee, Olufemi Olubanwo confirms that the Committee intends to showcase the NBCC as the foremost bilateral Chamber in Nigeria, diligently striving to deepen Anglo-Nigerian trade and investment.

For over 40 years, the Chamber has committed itself to fostering goodwill and increasing trade and investment between Nigeria and Britain. The Chamber currently has about 300 members from diverse sectors of the economy. The NBCC is an international affiliate of the British Chamber of Commerce (BCC) which gives members access to a network of 53 Chambers of Commerce across the United Kingdom and 49 other international affiliates around the world.

Stanbic IBTC wins 5 awards at 2019 FMDQ Gold Awards

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tanbic IBTC Holdings Plc, member of the Standard Bank Group won five awards at the 2019 edition of the FMDQ Gold Awards which held recently in Lagos.

Stanbic IBTC Bank Plc, a subsidiary of Stanbic IBTC Holdings Plc, emerged the overall winner in the Secondary Market category, winning the ‘FMDQ Dealing Member of the Year’ award, for the second year running. The company also won the award for ‘FMDQ FX Market Liquidity Provider’ of the year.

The annual FMDQ Gold Awards recognises stakeholders whose participation in the fixed income, foreign exchange and derivatives markets, have supported and fostered growth and development of these markets as well as the Nigerian economy.

The inaugural edition was held in 2018.

Stanbic IBTC Capital Limited, another subsidiary of Stanbic IBTC Holdings, won the ‘FMDQ Capital Markets Securities Origination’ award, thereby emerging the overall winner of the Primary Market category. The company also won the ‘FMDQ Registration Member (Quotations) @Businessdayng

Award’.

Stanbic IBTC Pension Managers Limited won the ‘Most Active Buy-side Participant in the Fixed Income Market” award.

Dignitaries that attended the event included Governor of Lagos State, Babajide Sanwo-Olu and Mary Uduk, the Acting Director-General of the Securities and Exchange Commission. Both dignitaries presented awards to Stanbic IBTC. Funso Akere, Chief Executive, Stanbic IBTC Capital said the awards would further spur the company to continue providing excellent services across the financial services spectrum. He said: “The five awards we have won will have a positive impact on our operations.

This means raising the bar in terms of service delivery. It is a challenge to continually create innovative solutions for our clients. As long as we keep delivering innovative solutions to our clients, they will continue to engage us and we will continue to do transactions.”

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Thursday 14 November 2019

BUSINESS DAY

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Thursday 14 November 2019

BUSINESS DAY

53

Live @ The STOCK Exchanges Prices for Securities Traded as of Wednesday 13 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. 296,802.63 8.35 0.60 304 45,615,447 UNITED BANK FOR AFRICA PLC 215,456.35 6.30 -2.33 211 59,055,076 ZENITH BANK PLC 544,729.17 17.35 0.29 426 26,457,816 941 131,128,339 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 195,629.35 5.45 -0.91 206 8,828,034 206 8,828,034 1,147 139,956,373 TELECOMMUNICATIONS SERVICES MTN NIGERIA COMMUNICATIONS PLC 2,503,605.11 123.00 -0.81 92 5,432,589 92 5,432,589 92 5,432,589 BUILDING MATERIALS DANGOTE CEMENT PLC 2,520,291.05 147.90 -1.07 70 426,305 LAFARGE AFRICA PLC. 225,509.14 14.00 - 43 351,690 113 777,995 113 777,995 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 332,471.18 565.00 - 5 199 5 199 5 199 1,357 146,167,156 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 - 3 8,300 3 8,300 3 8,300

OTHER FINANCIAL INSTITUTIONS NIGERIA ENERYGY SECTOR FUND 411.91 552.20 - 0 0 3,312.39 103.20 - 0 0 VALUEALLIANCE VALUE FUND 0 0 0 0 3 8,300 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 0 0 OKOMU OIL PALM PLC. 50,509.53 52.95 - 14 4,804 PRESCO PLC 34,600.00 34.60 -9.90 58 138,718 72 143,522 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 8,520.00 4.26 - 5 400 5 400 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,380.00 0.46 - 6 75,870 6 75,870 83 219,792 DIVERSIFIED INDUSTRIES A.G. LEVENTIS NIGERIA PLC. 741.24 0.28 - 0 0 JOHN HOLT PLC. 214.03 0.55 - 3 2,847 S C O A NIG. PLC. 1,903.99 2.93 - 3 3,680 41,460.95 1.02 3.03 39 13,035,768 TRANSNATIONAL CORPORATION OF NIGERIA PLC U A C N PLC. 17,864.04 6.20 - 30 187,410 75 13,229,705 75 13,229,705

BUILDING CONSTRUCTION ARBICO PLC. 711.32 4.79 - 1 8 1 8 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 24,486.00 18.55 - 9 46,533 165.00 6.60 - 0 0 ROADS NIG PLC. 9 46,533 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 2,520.44 0.97 - 12 251,123 12 251,123 22 297,664 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 - 5 33,050 GOLDEN GUINEA BREW. PLC. 242.22 0.89 - 0 0 GUINNESS NIG PLC 51,035.92 23.30 - 66 641,780 INTERNATIONAL BREWERIES PLC. 88,107.58 10.25 -9.69 9 113,409 NIGERIAN BREW. PLC. 371,855.95 46.50 - 39 278,771 119 1,067,010 FOOD PRODUCTS DANGOTE FLOUR MILLS PLC 111,250.00 22.25 - 0 0 DANGOTE SUGAR REFINERY PLC 124,200.00 10.35 - 48 455,421 FLOUR MILLS NIG. PLC. 62,325.77 15.20 0.33 25 940,591 HONEYWELL FLOUR MILL PLC 7,771.59 0.98 - 12 1,421,400 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 - 17 67,542 UNION DICON SALT PLC. 3,321.07 12.15 - 0 0 102 2,884,954 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 18,030.74 9.60 - 21 208,814 NESTLE NIGERIA PLC. 911,554.69 1,150.00 - 42 264,468 63 473,282 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 4,440.50 3.55 1.43 18 284,439 18 284,439 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 22,036.15 5.55 - 13 25,723 UNILEVER NIGERIA PLC. 138,167.38 24.05 - 31 131,561 44 157,284 346 4,866,969 BANKING ECOBANK TRANSNATIONAL INCORPORATED 128,446.86 7.00 - 31 41,943 FIDELITY BANK PLC 50,995.64 1.76 -6.88 67 6,528,936 GUARANTY TRUST BANK PLC. 772,568.45 26.25 0.77 215 19,699,533 JAIZ BANK PLC 15,616.05 0.53 -5.66 30 6,574,900 STERLING BANK PLC. 63,338.92 2.20 - 300 10,338,086 UNION BANK NIG.PLC. 203,845.27 7.00 - 21 94,778 UNITY BANK PLC 6,779.82 0.58 - 10 152,321 23,144.68 0.60 1.67 24 3,443,588 WEMA BANK PLC. 698 46,874,085 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 1 200 4,712.54 0.68 2.94 28 2,249,259 AIICO INSURANCE PLC. AXAMANSARD INSURANCE PLC 17,325.00 1.65 - 2 1,750 CONSOLIDATED HALLMARK INSURANCE PLC 3,333.30 0.41 - 2 7,200 CONTINENTAL REINSURANCE PLC 24,272.22 2.34 - 2 73,770 CORNERSTONE INSURANCE PLC 7,217.46 0.49 8.89 8 200,800 909.99 0.20 - 0 0 GOLDLINK INSURANCE PLC 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 12 2,201,974 LAW UNION AND ROCK INS. PLC. 2,148.17 0.50 8.70 2 104,000 LINKAGE ASSURANCE PLC 4,080.00 0.51 - 1 2,500 MUTUAL BENEFITS ASSURANCE PLC. 2,234.55 0.20 - 3 1,152,552 NEM INSURANCE PLC 10,561.01 2.00 - 19 429,835 NIGER INSURANCE PLC 1,547.90 0.20 - 1 300 PRESTIGE ASSURANCE PLC 2,745.10 0.51 - 0 0 REGENCY ASSURANCE PLC 1,333.75 0.20 - 4 387,000 SOVEREIGN TRUST INSURANCE PLC 1,668.16 0.20 - 1 8,000 STACO INSURANCE PLC 4,483.72 0.48 - 0 0 STANDARD ALLIANCE INSURANCE PLC. 2,582.21 0.20 - 0 0 SUNU ASSURANCES NIGERIA PLC. 2,800.00 0.20 - 0 0 UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 0 0 UNIVERSAL INSURANCE PLC 3,200.00 0.20 - 0 0 VERITAS KAPITAL ASSURANCE PLC 2,773.33 0.20 - 0 0 WAPIC INSURANCE PLC 4,282.48 0.32 -5.88 34 2,271,528 120 9,090,668

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MICRO-FINANCE BANKS NPF MICROFINANCE BANK PLC 2,721.10 1.19 - 4 6,501 4 6,501 MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 4,200.00 1.00 - 1 500 ASO SAVINGS AND LOANS PLC 7,370.87 0.50 - 0 0 INFINITY TRUST MORTGAGE BANK PLC 5,796.93 1.39 - 0 0 RESORT SAVINGS & LOANS PLC 2,265.95 0.20 - 0 0 UNION HOMES SAVINGS AND LOANS PLC. 2,949.22 3.02 - 0 0 1 500 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 7,900.00 3.95 - 23 135,743 CUSTODIAN INVESTMENT PLC 29,409.32 5.00 - 25 326,985 DEAP CAPITAL MANAGEMENT & TRUST PLC 660.00 0.44 - 0 0 FCMB GROUP PLC. 34,456.72 1.74 1.75 59 2,322,201 ROYAL EXCHANGE PLC. 1,080.53 0.21 - 2 2,400 STANBIC IBTC HOLDINGS PLC 395,896.48 37.80 -3.08 23 4,542,314 UNITED CAPITAL PLC 12,960.00 2.16 0.47 57 2,140,030 189 9,469,673 1,012 65,441,427 HEALTHCARE PROVIDERS EKOCORP PLC. 1,680.29 3.37 - 0 0 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 852.75 0.24 - 0 0 0 0 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 7,510.90 3.60 - 7 56,759 GLAXO SMITHKLINE CONSUMER NIG. PLC. 7,534.02 6.30 - 18 20,731 MAY & BAKER NIGERIA PLC. 3,381.46 1.96 - 6 6,104 NEIMETH INTERNATIONAL PHARMACEUTICALS PLC 740.67 0.39 - 7 53,285 NIGERIA-GERMAN CHEMICALS PLC. 556.71 3.62 - 0 0 PHARMA-DEKO PLC. 325.23 1.50 - 0 0 38 136,879 38 136,879 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 816.96 0.23 - 3 13,500 3 13,500 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 TRIPPLE GEE AND COMPANY PLC. 316.77 0.64 - 1 2,000 1 2,000 PROCESSING SYSTEMS CHAMS PLC 1,080.09 0.23 -4.17 10 222,920 E-TRANZACT INTERNATIONAL PLC 9,996.00 2.38 - 0 0 10 222,920 TELECOMMUNICATIONS SERVICES AIRTEL AFRICA PLC 1,157,510.66 308.00 - 5 1,153 5 1,153 19 239,573 BUILDING MATERIALS BERGER PAINTS PLC 2,173.68 7.50 - 6 43,899 CAP PLC 17,885.00 25.55 - 15 36,407 CEMENT CO. OF NORTH.NIG. PLC 215,553.42 16.40 - 31 146,847 MEYER PLC. 313.43 0.59 - 1 2,000 PORTLAND PAINTS & PRODUCTS NIGERIA PLC 1,769.32 2.23 - 0 0 PREMIER PAINTS PLC. 1,156.20 9.40 - 0 0 53 229,153 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,256.91 2.09 - 0 0 CUTIX PLC. 2,465.85 1.40 - 11 213,099 11 213,099 PACKAGING/CONTAINERS BETA GLASS PLC. 26,898.49 53.80 - 3 25,000 GREIF NIGERIA PLC 388.02 9.10 - 0 0 3 25,000 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 0 0 0 0 67 467,252 CHEMICALS B.O.C. GASES PLC. 2,547.42 6.12 - 5 3,133 5 3,133 METALS ALUMINIUM EXTRUSION IND. PLC. 1,781.64 8.10 - 0 0 0 0 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 2 37,000 2 37,000 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 83.60 0.38 - 0 0 0 0 7 40,133 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,252.54 0.20 - 1 8,000 1 8,000 INTEGRATED OIL AND GAS SERVICES OANDO PLC 41,893.86 3.37 - 35 384,133 35 384,133 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 53,332.04 147.90 - 13 3,391 CONOIL PLC 10,686.86 15.40 - 8 25,703 ETERNA PLC. 3,716.81 2.85 - 7 95,832 FORTE OIL PLC. 20,709.45 15.90 - 17 35,192 MRS OIL NIGERIA PLC. 4,663.23 15.30 - 5 1,154 TOTAL NIGERIA PLC. 41,829.09 123.20 - 9 11,085 59 172,357 95 564,490 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 - 4 20,190 TRANS-NATIONWIDE EXPRESS PLC. 398.52 0.85 - 1 9,000 5 29,190 HOSPITALITY TANTALIZERS PLC 642.33 0.20 - 0 0 0 0 HOTELS/LODGING CAPITAL HOTEL PLC 4,259.15 2.75 - 0 0 IKEJA HOTEL PLC 2,224.31 1.07 - 2 2,890 7,862.53 3.50 - 0 0 TOURIST COMPANY OF NIGERIA PLC. TRANSCORP HOTELS PLC 41,042.18 5.40 - 2 803 4 3,693 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 4,800.00 0.40 - 0 0 0 0 PRINTING/PUBLISHING ACADEMY PRESS PLC. 205.63 0.34 - 0 0 LEARN AFRICA PLC 902.60 1.17 - 6 11,117 STUDIO PRESS (NIG) PLC. 1,183.82 1.99 - 1 10 UNIVERSITY PRESS PLC. 616.92 1.43 - 1 950 8 12,077 ROAD TRANSPORTATION ASSOCIATED BUS COMPANY PLC 729.39 0.44 - 3 43,922 3 43,922

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industry Insight

BUSINESS DAY Thursday 14 November 2019 www.businessday.ng

The place of comparative advantage in Nigeria’s development ODINAKA ANUDU

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types of food through the African Growth and Opportunity Act (AGOA).

The idea was that countries in SSA would export up to 7,000 products to the U.S. without paying any duty or tariff.

The arrangement was supposed to end in 2015 but it was extended to 2025 to enable SSA countries, which did not take full advantage of the first tranche, to do so.

Some of the products/commodities that qualify for export to the U.S. market are poultry, bees, meat of goats, fresh, chilled or frozen, turkeys, live ornamental fish, other than freshwater, mackerel and sardines.

Others are fresh or chilled swordfish other than fillets, milk and cream, yoghurt in dry form, butter, cocoa powder (sweetened or not), guava, apples, ginger, juice and pine apple, among many others.

By opening borders to Africa, the US is simply saying that its consumers and citizens need these items. The US was never thinking of producing them locally because it might just not be able to produce them. Even if it does produce them, perhaps, they would not be able to compete with those from Africa. In spite of President Trump’s protectionism, the AGOA is still on.

For comparative or competitive advantage to exist, issues such as quality, distribution, certain types of infrastructure and branding, among others, must be in place, say economists. If, for instance, Benin Republic cannot produce bathroom slippers with good standards, or distribute them efficiently, it still does not have competitive advantage on bathroom slippers.

The reason is that the poor

quality will undo the products in the global market.

Think about Germany for a while. The European giant manufactures and exports vehicles, but it also imports vehicle parts. A 2018 data show that the US, Germany, China, Mexico, Canada, Spain, France, UK , Japan, Italy and Poland, among others, paid most for auto spare parts in 2018. Yet some of those countries produce automobiles.

The reason is simple: Germany may produce MercedesBenz, but it won’t stop citizens from driving Toyota cars from Japan. So, those driving Toyota cars must, from time to time, need their parts.

But this is not the case with Nigeria. The ‘average Nigerian’ and his policy maker, in the name of patriotism, stand logic and economics on their heads.

”

he cacophony of voices speaking about economic issues in Nigeria points to one fact : Many are ignorant of the simple principle of comparative or competitive advantage.

David Ricardo, an English political economist, proposed the principle of comparative advantage in 1817 to help nations play to their strengths.

The gentleman, through this principle, encouraged nations to allocate their scarce resources to products or services which they can produce at lower opportunity costs than their trade partners. Without dabbling into complex economics jargon, what Ricardo proposed was that it would be better for Benin Republic to specialise in the production of bathroom slippers if it could produce them at lower costs than Nigeria. Nigeria, therefore, should specialise in the production of textiles if it could produce them at lower costs than Benin Republic. By doing this, Nigeria can supply textiles to Benin Republic and Benin can trade with Nigeria on slippers efficiently.

Ricardo argued that world productivity and output could only increase when nations stop wasting their time on products or services they could not produce efficiently and concentrate on the ones they can, with minimum factors of production.

Though this principle has some shortcomings, it has an advantage of helping nations play to their strengths.

Developed countries became what they are today on the basis of comparative advantage and another concept called competitive advantage, which, according to Investopedia, means producing a good or service of equal value at a lower price or in a more desirable fashion.

The United States of America is world biggest economy with a gross domestic product of almost $20 trillion. It exports automobiles, computers, industrial machines, food, beverages, aircraft and pharmaceuticals.

But it does not claim to produce everything. Though it exports pharmaceuticals, it also imports certain types of drugs that it cannot manufacture locally at a comparative or competitive advantage. Drug import to the US in 2018 was valued at $116.3 billion, while export was just about $48.4 billion, according to data from the International Trade Centre, obtained by worldtopexports.com.

The US knows it cannot produce all forms of food, which is why it opened up opportunity for sub-Saharan African (SSA) countries to bring in certain

Rather than wallow in the illusion of producing everything, which is impossible, can Nigeria begin to play on its strength by identifying products or items it can produce at comparative and competitive advantages and reducing obsession on those it cannot

For them, Nigerians must produce all they consume and consume all they produce—a clichéd expression which makes little economics sense.

In Nigeria’s manufacturing sector today, there are about 77 sub-sectors, with each asking for government support—mostly bans and import restriction.

Yet, many of them cannot, with credible facts, tell the current local demand and supply of their sub-sectors.

Unfor tunately, monetar y policy makers who are expected to know have fallen for this trick by restricting a retinue of items that Nigeria cannot even produce competitively. The central bank has stopped providing foreign exchange for items from milk to palm oil.

But how many of the restricted items can Nigeria produce at comparative and competitive advantages? Cold rolled steel?

Wheelbarrows? Private jets?

Tiles? Clothes?

Take dairy, for instance. Nigeria does not have many dairy cows like India, Botswana, and the US. The dominant milk producing system in Nigeria is the Fulani nomadic system whose cows have a milk yield of a litre per day. But the average milk yield per day from exotic/ crossbred cows in India, United States, the Netherlands, Turkey, China and India is between 30 litres and 90 litres per cow per day, statistics shows.

Nigeria produces 700,000 metric tons (MT) of dairy products annually but demand stands at 1.3 million MT, according to the Federal Ministry of Agriculture and Rural Development. This means there is a shortfall of 600,000 MT. At the moment, only FrieslandCampina WAMCO gets raw milk locally but the com-

pany can’t even get 5 percent of raw milk from them—despite pumping huge amount into the project. There are other dairy firms such as Promasidor, Fan Milk, Chi Limited, among others, who, for years, showed no interest in that. The simple reason is that they could not invest billions in getting local raw milk when doing so would decrease their competitiveness by raising their costs further up.

The closure of Nigeria-Benin border is in line with Federal Government thinking that the country, as the giant of Africa, must produce all it consumes, especially rice. A number of Nigerians have said this should continue forever, asking the government to extend it to all the products, including textiles, to encourage local manufacturers.

But if all borders are closed, will Nigerian consumers have all products at cheaper prices?

Ironically, rice prices have been rising at astronomical rates since the border closure, revealing the shortcomings of such a policy decision.

It is high time Nigerians understood basic economics.

In his seminal work entitled ‘Principles of Economics’, Havard professor Gregory Mankiw established 10 principles guiding economic decisions. The fifth of the 10 principles, which is of interest in this piece, is that trade can make everyone better off. In simple terms, it means that a country stands to gain when there is an exchange of goods and services with other nations. This principle works on comparative and competitive advantages.

Rather than wallow in the illusion of producing everything, which is impossible, can Nigeria begin to play on its strength by identifying products or items it can produce at comparative and competitive advantages and reducing obsession on those it cannot? Rather than becoming a paint-producing giant, why not think of becoming a major producer of palm oil— which is not getting enough support at the moment? This does not diminish the importance of paint manufacturing but stresses the importance of palm oil, which is used in producing almost every food or beverage. Nigeria is the fifth producer of palm oil, but firms struggle to get quality oil, and smuggling is still rife.

The country’s biggest non-oil earner in the past decade has been cocoa. Why not pay a closer attention to that dying industry—with old trees, aged farmers and little investments in the last decade? These are Nigeria’s strengths. Yet they are ignored and neglected, despite having more value chains and export capacities than rice.

Published by BusinessDAY Media Ltd., The Brook, 6 Point Road, GRA, Apapa, Lagos. Advert Hotline: 08033225506. Subscriptions 01-2950687, 07045792677. Newsroom: 08169609331 Editor: Patrick Atuanya. All correspondence to BusinessDAY Media Ltd., Box 1002, Festac Lagos. ISSN 1595 - 8590.