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NGUS JUN 26 2019 360.94



5Y -0.03

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NGUS SEP 18 2019 361.39


10 Y 20 Y -0.21 -0.02 14.43


NGUS MAR 25 2020 362.29


Firms consolidate local input sourcing 3 years after FX crisis ... above 60% for 2018 ODINAKA ANUDU & LOLADE AKINMURELE


t a milk collection centre in Fasola, a tiny community in Oyo State, Sadihu Bello hands over a keg of raw milk to FrieslandCampina WAMCO staff who then subjects it to scientific examination to ensure there are no sediments and debris. This has been the practice since 2012 when WAMCO began to look inwards to hedge against exchange rate risks arising from importing milk used as input. Today, activities like WAMCO’s and many other manufacturers have pushed the local Continues on page 46

Inside AfDB approves $15m investment package for InfraCredit P. 2

Co-founders of JUMIA, Sacha Poignonnec (extreme left), and Jeremy Hodara (extreme right), joined by senior executives of the company including the head of the Nigerian unit of Jumia, Juliet Anammah (centre), at the New York Stock Exchange where stocks of Jumia have now been listed.

IFRS 9 wipes N1trn off banking industry capital base A IFEANYI JOHN, OWOEYE OLUFIKAYO & OLUWASEGUN OLAKOYENIKAN

ccounting standards are set to improve transparency in financial reporting and reveal the true financial position of firms around the world. IFRS 9 sought the proper measure of assets by reclassifying financial instruments

and this has seen 12 Nigerian banks shed a total of N1 trillion from their previous equity position. The implementation of the new accounting standard saw the accumulated profits and regulatory risk reserve of banks drop while other reserves had to be called upon to cushion the effect of this re-measurement. IFRS 9 is an International

Financial Reporting Standard (IFRS) promulgated by the International Accounting Standard Board (IASB). It addresses the accounting for financial instruments. It contains three main topics: classification and measurement of financial instruments, impairments of financial assets and hedge accounting. It replaced the earlier IFRS for financial instruments, IAS 39,

when it became effective in 2018. The new IFRS 9 is a forwardlooking standard that is based on expected loss model aimed at allowing banks to make adequate provision for future losses associated with loans that banks give to their customers, said Gbolahan Ologunro, research analyst CSL Stockbrokers. “With IAS 39, when a loan

Continues on page 35


Tuesday 16 April 2019


NEWS Domestic passenger traffic up 23% in 2018 on economic recovery, political activities IFEOMA OKEKE


irline passenger traffic within Nigeria grew significantly by 23.19 percent to 12,791,639 passengers in 2018, from 10,383,452 in 2017, according to data released by National Bureau of Statistics, (NBS) yesterday. This is also as the total number of international passengers who passed through Nigerian airports reached 4,438,799 in 2018 as against 4,056,717 passengers in 2017, representing 9.42 percent increase. Also, aircraft traffic reached 290,328. The total number of international aircrafts recorded was 55,961 in 2018 as against 40,328 aircrafts in 2017, representing an increase of 38.92 percent. This significant increase, experts say, was driven by economic recovery, political activities in 2018 and remodelling of some of the country’s major airports. “The first quarter of 2018, we technically went out of

recession, which is a major driver. Passenger traffic is driven by economic activities. The major airport that is driving this growth aside from Lagos is Abuja. Politics and budget also increase passenger traffic,” said Tayo Ojuri, CEO of Aglow Aviation Support Services Limited. “There wasn’t any major event but there was politics and economic recovery. I think what we should look at is if this is sustainable. If there is growth, we can now look at infrastructures to accommodate more passengers?” Ojuri said. Henrietta Yakubu, corporate communications manager, Federal Airports Authority of Nigeria (FAAN), said air traffic has gone up because the roads are no longer safe for travelling and the construction of new terminals at Abuja and Port Harcourt airports also encouraged passengers to travel by air. “People are running away

Continues on page 35

Investment interest in real estate grows despite recession CHUKA UROKO


hough the real estate sector of the Nigerian economy remains in recession long after the wider economy exited in the second quarter of 2017, investment interest in the sector continues to grow as individual and institutional investors are upbeat, raising capital and putting into the sector. The property market in the country has been dull following the sector’s continued dwell in negative growth territory. This is reflected in the figures released by the Nigerian Bureau of Statistics showing that the sector grew by -5.92 percent in Q4 2018 as against 2017 full year growth rate of -4.27 percent. In Q1 2018, the sector grew by -9.40 percent, and then -3.88 percent, -2.68 percent and -3.85 percent in Q2, Q3 and Q4 2018, respectively. Full year 2018 growth rate was 4.74 percent. But investors say they are looking beyond either the recession or market slowdown or both. They say they have confidence in the market which derives from their belief that there is demand and they can always identify products where there is demand even in a recession. “The fact that there is a recession does not mean that is how the market is going to be forever. There will be changes and forceful improvements

that will improve project attractiveness,” Obi Nwogugu, head, real estate, African Capital Alliance (ACA), in a recent interview with BusinessDay. “We are not really concerned about where we are right now. We believe that we are investing at the right time; when people are not investing is the right time to invest because that is when you get a better deal for your development,” he explained. ACA, in collaboration with Elalan Group, has raised $165 million to develop the bestin-class Blue Water Lagos that promises to deliver to the mid-income property market about 600 luxury apartments comprising one-, two- and three-bedroom. Investment interest in this sector also derives from investors’ realisation that real estate is not a trade, meaning that as a long-term game, any investor coming into the business has to look at economic cycles rather than any moment in time. “When you are planning any real estate development, you have to do so even to 10year cycle. Usually, when the demand side is strong, that is when the supply side is weak and vice versa. When you plan, you cannot put both the demand and supply side into your cycle,” Paul Onwuanibe, Landmark Group, a real estate investment and development firm, told BusinessDay in an interview.

•Continues online at

L-R: Ayodele Arogbo, partner, Synergy Capital; Faruk Agoro, director, Viathan; Babajide Sanwo-Olu, Lagos State governorelect; Obafemi Hamzat, Lagos State deputy governor-elect; Habeeb Alebiosu, CEO, Viathan, and Chinua Azubike, CEO, InfraCredit, after a meeting to discuss infrastructure development in Lagos.

AfDB approves $15m investment package for InfraCredit HOPE MOSES-ASHIKE


he Board of the African Development Bank has approved a $15-million investment package to Infrastructure Credit Guarantee Company (InfraCredit) to support infrastructure financing through the domestic debt capital markets in Nigeria. The investment package to InfraCredit is comprised of a subordinated loan of $10 million and a risk sharing facility of up to $5 million. This intervention will promote local currency infrastructure financing and further the development of the domestic capital market. InfraCredit is a specialised infrastructure credit guarantee company established to enhance local currency debt instruments, mainly bonds, to finance eligible infrastructure projects in Nigeria. This

is intended to uplift the credit rating of such bonds, allowing institutional investors to include them in their portfolios. InfraCredit was founded by the Nigerian Sovereign Investment Authority (NSIA) in collaboration with GuarantCo (part of the Private Infrastructure Development Group). These initial investors have been joined by the Africa Finance Corporation (AFC) and KfW, the German Development Bank. The African Development Bank’s investment in InfraCredit will catalyse local institutional investor funds, including pension funds, into financing long-term infrastructure projects through the local bond markets. The investment boosts InfraCredit’s qualifying capital base through the subordinated loan; it also improves its capacity to expand its guarantee business through the proposed risk sharing arrangement.

Through this intervention, the African Development Bank is helping to stimulate local currency financing across diverse infrastructure transactions, thereby improving economic diversification and competitiveness, as well as promoting more equitable growth, strengthening local value chains and financial markets in Nigeria. InfraCredit’s operations will catalyse infrastructure investments in critical sectors such as renewable energy, housing, transportation, agricultural infrastructure, and telecommunications, which are critical for the country’s economic development. These also align with the bank’s High 5 agenda. “The bank’s support will strengthen the capital base of InfraCredit, underpinning the expansion of the company’s core business of guaranteeing of bonds issued to fund infrastructure projects,” Stefan Nalletamby, the bank’s

director of the financial sector development, said. “This adds to the bank’s existing initiatives to mobilise domestic institutional savings and stimulate non-sovereign local debt capital market development in Nigeria. This ultimately helps to increase private sector financing for critical infrastructure projects in key sectors including energy, agriculture, water, health and education, through local capital markets,” Nalletamby said. The transaction will also result in the leverage and enhancement of the scope and impact of the bank’s interventions alongside private sector financing, especially from pension funds as well as from co-investment partners. InfraCredit aims to support up to $1.25 billion in infrastructure financing over the next few years, by involving the private sector in infrastructure financing, essential to Nigeria’s economic resilience.

IMF has backpedalled, but can Nigeria save for future generations? STEPHEN ONYEKWELU


ast week, it was reported that the International Monetary Fund (IMF) ranked Nigeria’s Sovereign Wealth Fund (SWF) as the second-worst managed, after Qatar’s, but the Washington-based institution later apologised because it had mistaken the country’s SWF for its Excess Crude Account (ECA). Thought the IMF may have referred to the wrong institution in Nigeria, the Bretton Woods institution

ANALYSIS was right in believing Nigeria’s management of its excess crude oil revenue in the last 15 years has lacked transparency and translated into little human, social and economic capital. Some experts have attributed Nigeria’s tendency towards squandermania to the fact that the country’s constitution does not provide for mandatory savings from excess crude sales. To reverse this tendency, they argue, the Excess Crude Account

needs to be institutionalised through a constitutional amendment. Section 162 of the 1999 Constitution of the Federal Republic of Nigeria (as amended) deals with public revenue management. Sub-section (1) provides for “the Federation Account”; (3) provides that amounts standing to the credit of the Federation Account shall be distributed among the federal and state governments and the local government councils in each state on such terms and in such manner as may be prescribed by the @Businessdayng

National Assembly, and sub-section (4) provides that any amount standing to the credit of the states in the Federation Account shall be distributed among the states on such terms and in such manner as may be prescribed by the National Assembly. The constitution ab initio provides that revenue accruing to the Federation Account should be distributed. This means that the Excess Crude Account, which is revenue accruing to the Federation Account, Continues on page 35

Tuesday 16 April 2019





Tuesday 16 April 2019



Tuesday 16 April 2019



NEWS Kachikwu agrees with World Bank over subsidy removal Olusola Bello & HARRISSON EDEH


inister of State f o r P e t ro l e u m Resource, Emmanuel Ibe Kachikwu, says there has never been any doubt about the logic of trying to remove fuel subsidy but the reality is that Nigeria has a very unique situation. The minister, who reacted to the advised given by the World Bank that the Federal Government should remove fuel subsidy, said the organised labour and others were not

… says Nigeria in unique situation … NUPENG, PENGASSAN insist removal will bring hardship on Nigerians seeing through the economic sense in taking such decision by any President. Kachikwu, who spoke with journalists at the second annual international conference by the Oil and Gas Trainers Association of Nigeria (OGTAN) holding in Lagos, stated: “You saw the reactions of the organised labour. There is a lot of anti populism against the decision, so any president that is going to take that decision must weigh all the factors. So, we have to

look at what the World Bank said and advise the President the best way to go about it.” On the issue of fuel scarcity, he said he went round Lagos Sunday morning and discovered that there were no serious queues as reported in the media. “I know there were some pockets of queues over the weekend but very minor, and this was due to logistics issues and it has been dealt with. I was told that the reserve they have is sufficient for 28 days. The problem in Warri was also

due to vessel logistics because there are about 15 vessels in Warri,” he said. He said there would be occasional difficulties in respect of this logistics, but what was important was that there was immediate reaction and the problem was dealt with, “So it is not because of scarcity of products but logistics. This is the information I have.” However, the leadership of the Nigeria’s oil workers’ unions have opposed the call by the IMF for the removal

of oil subsidy. Leaders of the blue-collar Nigeria Union of Petroleum and Natural Gas Workers (NUPENG), and Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) say removal of the subsidy would bring serious economic hardship upon ordinary Nigerians. The key union representative in Nigeria’s oil and gas sector pointed out that imposing more stringent reforms in domestic revenue mobilization including amongst other in-


crease in value added Tax, VAT and securing more domestic oil revenues through subsidy removal at this time is clearly an attempt to destabilize the nation. The Union representatives in a statement on Monday raised further concern that the IMF advice has already created panic in the country with associated hoarding of petroleum products, panic buying , skyrocketed increases in prices of goods and services in the country.


Tuesday 16 April 2019



Tuesday 16 April 2019





Tuesday 16 April 2019



Transparency, fair prices for medicines advocated at WHO forum CALEB OJEWALE


ach year, 100 million people fall into poverty because they have to pay for medicines out-of-pocket, according to the World Health O rga n i sat i o n ( W H O ) , i n part, now fuelling discourse for transparency and fair pricing for medicines. The affordability of medicines has long been a concern for developing countries, but is now described by WHO as a global one. Highincome countries’ health authorities are increasingly having to ration medicines for cancer, hepatitis C and rare diseases. The problem extends to older medicines whose patents have expired, such as insulin for diabetes. At a g l o b a l f o r u m o n fair pricing and access to medicines, delegates from governments and civil society organisations called for greater transparenc y around the cost of research and development as well as production of medicines,

to allow buyers to negotiate more affordable prices. “Medical innovation has little social value if most people cannot access its benefits,” said Mariângela Simão, WHO assistant director-general for Medicines and Health Products. “This is a global human rights issue – everyone has a right to access quality healthcare.” A report commissioned by WHO in 2017 showed that the cost of production of most medicines on WHO’s Essential Medicines List was a small fraction of the final price paid by governments, patients or insurance schemes. Some delegates at the forum noted that a lack of transparency around prices paid by governments means that many low- and middle-income countries pay higher prices for certain medicines than wealthier countries do. There was consensus that countries can take an initial step towards fostering greater transparency by sharing price information. Countries

from the so-called Beneluxa network have already joined forces to share such information, and the results have been promising. The data highlights discrepancies in what different countries are paying and can serve as a powerful tool to negotiate reduced prices. WHO’s database on vaccine markets and shortages MI4A – was also highlighted at the forum as a useful tool to achieve competitive vaccine prices. Industry bodies at the forum expressed support for the goal of access to medicines for all, and expressed their commitment to the Sustainable Development Agenda, which calls for partnership with the private sector to address global challenges such as access to medicines. WHO says it will launch a public online consultation in the coming weeks to collect views and suggestions for a definition of what actually constitutes a ‘fair price’ from relevant stakeholders.


Tuesday 16 April 2019





Tuesday 16 April 2019



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Our children don’t belong to the streets STRATEGY & POLICY


“Education cost money, but then so does ignorance” - Sir Claus Moser his article is a continuation of last week’s titled Conversation on Street Children. From the conversation, three issues came out clearly as being responsible for the increase in the number of street children on Nigeria: culture, poverty and government funding. Frankly, culture plays a significant role in whatever we do as a people. It is almost becoming a culture of not doing anything well in the country. That is why it has taken the country many years of going through a tortuous path towards sustainable development without much to show for it. Culture and education are mutually dependent. This writer does not believe that there is a culture in any part of Nigeria that prevents children from schooling but encourages them to live on the streets begging. A respected columnist in the Punch Newspaper has this to say about culture and education of our children: “The culture that encourages Nigerian children to hit the streets begging and not to be in schools learning must be annihilated and its designers apprehended. That culture is not just fashioned out of the pit of incognizance; it is flash-out wicked.


It must stop!” What do we mean by culture? There are several definitions of culture out there. The culture of a people is the way of life of that people, the things they value, the things they do not value, their habits of life, their work of art, what they do and what they like.Culture is that complex whole which includes knowledge, belief, art, morals, law, custom and any other capabilities and habits, acquired by man as a member of society.The culture of a society guides its educational pattern. But, if the culture of a society is materialistic, then its educational pattern will be shaped for the attainment of material value which promotes pleasures of senses and material comforts. A society devoid of any culture will have no definitive educational structure. Thus, the culture of a country has a very powerful impact on its educational patterns. While many Nigeria’s public primary and secondary schools are in shambles, almost all the 36 state governors have not paid counterpart funds that will automatically enable them access the Universal Basic Education Commission’s (UBEC) funds. From the UBEC’s website, one could see at a glance that unaccessed matching grant from 20052018 as at 11 September 2018 was almost N87 billion. (See ng) for more details. One could see that a culture has emerged with the yearly non-payment of counterpart fund by most state governors. This is not a political party issue. Neither is it a problem of the North nor South. This article brings to fore the casual attitude displayed by our elected governors on public education. The question that readily comes to mind is: Could there be bureaucratic chal-

lenges faced by the states in an attempt to pay their counterpart fund? A culture of not paying “counterpart fund” by all the 36 state governors including the Federal Capital Territory is worthless. Any culture that does not support compulsory education of the Nigerian child whether the child is from North, South, East or West should be re-examined with immediate effect to identify the causes of failure of the public education system in Nigeria. The suggestion to re-examine our culture is not an attack on the country.The main point is that Nigeria cannot overcome underdevelopment without adapting our culture to modern industrial realities. We may have to look at other cultures that are at the forefront of economic development. We should look at South Korea, Japan, Singapore, Malaysia, Hong Kong, Thailand, and China amongst others, and ask the question: How did these countries make it? It is not through dilapidated public primary and secondary schools. It has been expressed on many occasions in this column that Nigeria must imbibe the culture of using scientific means to solve industrial, medical and management problems. The quality of human resource is not independent of culture. All the newly elected state governors must be prepared to take tough decisions. They must cut their excesses in running cost in order to adequately fund public primary and secondary schools. The 9 years education program as prescribed by the law establishing UBEC to “eradicate literacy, ignorance, and poverty as well as stimulate and accelerate national development, political consciousness and national integration” is out-of-date. Why? The world is changing at a fast-

The culture that encourages Nigerian children to hit the streets begging and not to be in schools learning must be annihilated and its designers apprehended

er rate. No nation will wait for Nigeria to put her house in order. The world is running a knowledge-based economy and it is in the fourth industrial revolution. How will the Nigerian child fit into a technologically-driven world after leaving junior secondary school? It is because most Nigerian children are not well prepared for requirements of the future that is why the country is weighed down by criminals and criminality perpetrated mostly by children who grew up in the streets. This writer is of the opinion that a 12-year compulsory education should be put in place. To this end, it’s imperative for our legislators at the National Assembly and all the states to review the UBE Act. What about the cost implication? That is where the quote above becomes relevant as no amount of money spent on education of a child is too much. Can you measure the benefits accruable to a child who has been in school compulsorily up to the age of 18 years and sponsored by the state government? The benefits are immeasurable. One may argue that most public primary and secondary schools do not have modern facilities and quality teachers for compulsory education of our children. If there was political will on the side of those who govern, there will be success in providing free compulsory education for our children. State governors must find ways and means of reducing cost of governance in their states.Tough decisions must be taken to remove our children from the streets. Our children do not belong to the streets. Thank you! Johnson is an author and a retired naval engineer who has passion for African development and good governance

The rise of alternative investments in Nigeria

Michael Famoroti


igerians do not save enough; that’s what the data says. The World Bank pegged our national savings rate at 17% in 2017, below Angola (26%), our fellow petro-state, and the Heavily Indebted Poor Countries (19%), a cluster of poor countries the World Bank targeted for debt relief. But the data can be deceiving if you don’t look hard enough. For example, a famous Enhancing Financial Innovation & Access (EFInA) report in 2016 estimated that only three out of ten Nigerian adults save in banks. Nigerians have been saving in many ways for years, just not in banks, and a generation of alternative financial technology (Fintech) platforms have exposed this truth. The rise of alternative investments in Nigeria can be linked to a simple truth: Nigerians have always tried to save but had been let down by traditional financial institutions. Fintechs in Nigeria have opened a new world of investment opportunity. Today, a public official in Abuja can invest in a farm in Sokoto, a plot of land in Kwara, an insurance firm in

the United States, or lend money to a stranger in Lagos. The high nominal return to investing in Nigeria has never been in doubt, but there have been obstacles impeding people from investing. Fintech companies have removed these obstacles; for example, by applying data science techniques to create a viable credit rating system—which then allows people to lend money to each other—or by de-risking agriculture investment by securing buyers for the commodity at the start of the farming cycle. In some cases, Fintech companies have taken established investment practices and made them simpler: from automatically locking your savings or enabling you to trade on the Nigerian Stock Exchange. In others, it has opened doors to entirely new territories, like platforms that allow Nigerians to trade in global markets or buy cryptocurrencies. It is not that Nigerians did not want to save or invest, but that they could not find viable opportunities. Look at peer-to-peer lending: I have always lent money to people, but only those in my inner circle that I could trust. Peer-to-peer lenders expand the circle of who I can trust: FINT has a risk-scoring system that allows me to identify strangers’ risk and determine my threshold, while the platform helps me manage my loans and automates the process, making it easier and cheaper to lend and invest. Nigeria’s financial institutions have not only let down those looking to save or invest, but have also made things difficult for borrowers. High interest rates aside, financial products have not been accessible to many

people; nearly four out of ten Nigerians is financially excluded. Take the agriculture sector as an example. The sector got 4% of the loans in Nigeria’s banking sector in 2018, even though it hires nearly half of the working population. We don’t have to go too far to uncover the reason for this problem: asymmetric information means that lenders don’t know which borrower to trust so only give loans to an inner circle. This poor access to credit has created a significant opportunity for fintech firms. Successful alternative investment platforms have found ways of solving the information problem; like agri-tech schemes that manage farmer risk by expanding agriculture extension programs or peer-to-peer lenders that limit the pool of borrowers to salaried workers. And yet, we cannot discount the ecosystem conditions that have facilitated the rise of alternative solutions for borrowers and savers. We have witnessed a substantial improvement in payments infrastructure in recent years, and this has played a critical role in enabling Fintechs focused on providing savings & investment platforms. Besides, human capital in technology has been transformed in the last half-decade, and the availability of developer talent cannot be disregarded. Without this human and technology infrastructure, Fintech firms may have struggled to distribute and optimise their products. You can also observe this alternative investment trend on a Sub-Saharan (SSA) level. PwC estimated that Fintech investment in Africa rose from $200 million to $800 mil-

lion between 2014 and 2016. Again, we can trace the trend to the fact that similar credit market challenges exist across SSA. Farmers all over Africa struggle to access credit, which is why we see Kenyan start-ups like Twiga Foods (raised $3 million in 2018), who connect rural farmers with urban retailers in informal markets. Likewise, other African countries struggle with credit scoring; so you see Tala, a start-up that operates in Kenya and Tanzania, using over ten thousand customer data points to build a credit score. Tala raised $65 million in 2018. Other alternative investments have more international parallels; for example, peer-topeer lending has spread from larger platforms in the United Statesto social lenders in China. For once, Nigeria has not been excluded from the global trend. For a long time, Fintechs have been seen as the future of savings & investment. In 2017, a PwC survey found that retail banking and wealth management was highly at risk of disruption within the next five years. Given the impact of mobile money in Kenya, there were even suggestions that Fintechs would run Nigerian banks out of business. Sensitive to this, Nigerian banks have responded, with many retail and investment banks opting to enter the Fintech space—whether by establishing digital banks or wealthtechs. Nigerian banks are becoming Fintechs, the Fintechs are here to say. Famoroti is a Partner at Stears, a media and data company focused on expanding data-driven journalism and data networks in Nigeria

Tuesday 16 April 2019




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South Africa: Will Ramaphosa bring down the house? (2)

Rafiq Raji


Out of his hands n a nutshell, while Ramaphosa’s position as ANC president may not be secure, he has deftly ensured that his anticorruption effort would be able to take on a life of its own with or without him on the saddle. “South Africa is a constitutional democracy in which the head of government does not decide who gets prosecuted for corruption or any other crime. Not even Jacob Zuma could decide that, much to his regret”, says Steven Friedman, a research professor and renowned

political scientist at the University of Johannesburg. “Ramaphosa did not even appoint the head of the prosecution service alone – he was careful to ensure that she was chosen by a committee consisting mainly of professional lawyers so that he could not be accused of influencing the process”, adds Friedman. “Who is prosecuted will, therefore, be determined by the National Director of Public Prosecutions [Advocate Shamila Batohi], an independent person recently appointed with the support of the entire legal profession”, the UJ professor avers further. Already, the South African president has announced a new special investigative unit to prosecute the state capture allegations: “We have agreed with the new National Director of Public Prosecutions, that there is an urgent need to establish in the office of the NDPP an investigating directorate dealing with serious corruption and associated offences, in accordance with section 7 of the NPA Act.” So, he is certainly heading in the

right direction. The key question is whether he would be able to stay the course as the casualties of his anticorruption war start to get closer to home. Oxford Analytica’s Robinson has cogent views on the question. “While his administration has faced public criticism for not hastening anti-corruption investigations, especially the slow pace of prosecutions or some notable withdrawn cases (e.g., Estina Dairy Farm, Ajay Gupta arrest warrant), the fact is that if Ramaphosa tries to interfere in ongoing investigations he risks going down the path of politicising South Africa’s anti-corruption and law enforcement agencies as his predecessor did – which is what allowed the process of state capture to emerge in the first place.” IHS Markit’s Malimela also has some views on this. “Given the evidence that has come out of the state capture Inquiry, it is hard to see Ramaphosa trying to protect anyone.” “Remember that South African courts are very independent, and while Ramaphosa has a slim majority

The key question is whether he would be able to stay the course as the casualties of his anticorruption war start to get closer to home

in the ANC, the ANC has been losing power overall in any case, and thus in a parliament where they enjoy an ever slimmer majority, it is very difficult from here on, to protect anyone against whom the NDPP finds solid evidence (which won’t be hard).” “The new NDPP is very highly qualified, competent and respected, and has left the ICC [International Criminal Court] where she worked for 9 years to return to the NPA where she began her career. Much is expected of her.” “My point is that, it may not be all up to him, and how far he will go. And that was his intention. He has played it very well in the sense that he is giving law enforcement institutions the space and resources to do their work: and they are starting to. But it will be a marathon, not a sprint.” • An edited version was published in the March 2019 issue of New African magazine “Dr Raji is chief economist at Macroafricaintel. He was previously an Africa Economist at Standard Chartered Bank, London, UK. (Twitter: @ DrRafiqRaji)”

Abike and her traducers Ray Ekpu


bike Kafayat Oluwatoyin Dabiri-Erewa, 56, known for short as Abike DabiriErewa seems to have walked into the trap of tribal jingoists and they want to eat her raw. Abike is the Senior Special Assistant to the President on Foreign Affairs and the Diaspora. In that position she feels able to make occasional comments on issues that relate to her portfolio particularly as they concern Nigerians who live or travel abroad. The most recent of such statements have been on the five young Nigerians arrested in Dubai, United Arab Emirates, for alleged robbery of a Bureau de change. She mentioned their names and all the names sound like Igbo names. Then there was a lady, whose name sounds like a Yoruba name, who was convicted and killed for drug-related offences in Saudi Arabia. Abike mentioned the incident, too, condemned the execution in very strong terms on behalf of the Federal Government of Nigeria. However, she did not disclose the name of the lady. Some fellows, principally Igbo, have accused Abike of discrimination because she mentioned the alleged robbers by name but not the drug convict by name. They think she should have either made full disclosure in both cases or should have hidden the identities of both sets of criminals as evidence of her fairness across board. Aren’t we carrying ethnic jingoism too far? Or are the Igbo who want Abike’s head chopped off suffering from a persecution complex? The logic of those who are putting Abike in the dock of public opinion seems to go like this. Abike is Yoruba. So she hid the identity of the Yoruba woman killed in Saudi Arabia for drug offence. She probably doesn’t like the Igbo. So she revealed the names of the gang of five who are Igbo but who are only arrested but not convicted for the alleged robbery. I haven’t been able to see what Abike has done wrong. She has the option of revealing or not revealing the identity of Nigerians caught for criminal offences abroad. And whether she does the revealing or not the world has reached

such a technological level that almost nothing is hidden under the sun today. I don’t think Abike had any intention of hiding anything even if she felt ashamed that a Nigerian, a fellow female, had brought shame to her country. From time to time cases of Nigerians languishing in prisons and detention centres abroad pop into our consciousness. In the first place every Nigerian is responsible for his or her conduct either here or abroad. The responsibilities of our government to Nigerians abroad are twofold. One, to advise Nigerians to obey the laws of the countries in which they reside or to which they travel. Two, if Nigerians are arrested for civil or criminal offences abroad our embassies in those countries must stand guard over their trial to ensure that there is fair hearing and no miscarriage of justice. It seemed to me to be “medicine after death” when our Ministry of Foreign Affairs invited the Saudi Ambassador to Nigeria for explanation on the conviction and execution of the lady drug convict. The Nigerian Embassy in Saudi Arabia ought to have followed her trial closely since her arrest and until the court reached a decision. This apparently was not the case. It does appear that the Nigerian Embassy in Saudi Arabia was taken unawares. Is it that there are no Nigerian groups in Saudi Arabia known to the Nigerian Embassy that could have informed the Embassy of the arrest and trial of the woman? In this country we have seen how foreign embassies react sharply when their citizens are arrested for civil or criminal offences. They put the cases on their radar until they are disposed off. It is doubtful if Nigerian embassies abroad pay such meticulous attention to the affliction of Nigerians abroad. From what we know so far the five Nigerians arrested in Dubai are suspects. They have not yet been convicted. Nigeria must stand by them and ensure that their rights are protected throughout the trial. We might think that it was an act of foolishness for them to attempt a robbery in a highly automated society like Dubai irrespective of what tricks they may have learnt from Hollywood or Nollywood movies or burglary thrillers. In Nigeria, hoodlums rob banks effortlessly sometimes in broad daylight and most times they get away with it. This is because of the low

safety automation in the banking industry and the generally poor security in the country as a whole. For several years now the Police authorities have been urging the banks to invest more money in security gadgets including bullet proof bullion vans. These pleas have largely fallen on deaf ears even though the banks are making obscene profits yearly. It was an act in futility for the Nigerian government to query the Saudi government on the execution of the Nigerian female drug convict. Saudi Arabia is a conservative society with very strict, stringent and despotic disposition to life. Their laws are Talibanic in nature and anyone who steps on that soil must be ready to submit himself to those primitive laws which, strictly speaking, have no place in a modern society. It is only recently that Saudi women were granted the permission to drive cars, something that women in Nigeria take for granted. The laws in Saudi Arabia and many other Muslim countries are severe but anyone who wants to live there or to do business there must abide by them. All of us must worry about what our brothers and sisters do abroad which tend to bring our country into disrepute. What they do blackens our green passports and makes us all look like criminals. I learn that in some countries officials are specially trained to take a careful look at Nigerian travellers. This puts us in a special group of visitors that our potential hosts treat with suspicion irrespective of what we are at home. In other words, we are considered to be criminals until we actually prove that we are not. This must bother us because we do know that the criminals are a small, negligible population of our huge population. The bulk of us are honest, hardworking people of integrity whether we are Igbo or Yoruba or Hausa or Ijaw or Efik. That is the unvarnished truth. The rest of us who are noncriminals must therefore support the authorities to reduce the level of crime amongst our people whether in Nigeria or abroad. Abike has done nothing wrong. She is a seasoned public official who has an excellent public service record. She worked for NTA for 15 years anchoring the iconic Newsline programme that focused like a laser beam on issues of social justice and the underclass. Then she became a parlia-

mentarian from 2003-2015. While at the House of Representatives she did chair the Committee on the Media and Publicity as well as the Committee on the Diaspora, a position that seemed obscure but which she breathed life into and made it worthy of our close attention and admiration. Abike is a decent person, cosmopolitan, refined and cultured and does not deserve the pidgeon hole that her traducers try to put her in. I don’t see her as a tribalist or someone who seeks to hurt anyone on account of tribe or religion. She is a Moslem but many people do not know. She was born in Jos when Jos was a city for the civilised and the hoodlums and architects of anarchy had not set their feet on that piece of exotic tourists’ haven. The refinement of that environment where she was born has remained with her till this day. I don’t believe that she was profiling or stereotyping the Igbo because she knows that there are millions of decent Igbo who are not stained by the tar of the few wayward ones. This applies to all the other tribes in Nigeria. All of us must recognise and condemn a crime when we see it, irrespective of who the criminal is, what tribal marks he wears or what language he speaks. Some of us have been condemning Fulani herdsmen who maim and kill innocent persons. It does not mean that all Fulanis are criminals but if the specificity hurts may be the decent ones can tell them to back pedal. For centuries the activists in the Niger Delta have been labelled “militants.” Does it mean all Niger Deltans are militants or terrorists? No. Some people in the Niger Delta may feel that they are performing a useful function for the Niger Delta people in which case they are actually “freedom fighters.” But even Niger Deltans including this one call them militants because that is what they are. Abike Dabiri-Erewa did no wrong either by naming or not naming those who bring shame to our dear country. It is her prerogative to decide whether to reveal or not to reveal their names. It has nothing to do with tongue or tribe. It is just an exercise of her discretion as a public communicator. Those who feel offended by it only need to tell those who bring ridicule to our country to desist from doing so. They are leaving the ball and kicking the leg instead


Tuesday 16 April 2019


comment is free comment Are we ready for robotic automation in Nigeria?

Send 800word comments to

Jude Adigwe


utomation is a topic that has gained global attention for quite some time. This topic and conversations around it births mixed feelings just as the reports are mixed. There are mixed feelings because of the tremendous advantages it offers businesses and the threat it poses to many job holders. The McKinsey report as mentioned by BBC News on 29 November, 2017 states that “up to 800 million global workers will lose their jobs by 2030 and be replaced by robotic automation…” While this might seem alarming, it is not unexpected given the spate of technological advancements and disruptions in contemporary times. It is crucial to understand that organizations (save not-for-profit organizations) exist to make profit and this requires reducing costs to a manageable minimum while increasing revenue. This is where automation of business functions comes in -- it guarantees efficiency and increase in productivity which consequently impacts positively the bottom line. Though neat on paper, some considerations would have to be made as is the case with every business investment. Given a particular

job, is robotic automation better than human performance? If it is better, is the timing right? I would offer my opinions on these two questions taking into consideration critical factors in the Nigerian context. In Nigeria, is robotic automation (artificially intelligent or non-artificially intelligent) better than human performance? It depends. This could be answered from financial and nonfinancial perspectives. However before I address this question, it is important to mention that robotic automation do not necessarily imply artificial intelligence -- not all robots are programmed to carry out robust and complex tasks that mimic human intelligence which is the goal of artificial intelligence. Financially, robotic automation is better if it reduces cost for companies (especially in the long run), it increases productivity (which must be evident in the amount of revenue and profit obtained) as well as if it is affordable. A quick look at the Nigeria business space shows that the bulk of businesses are made up of micro, small and medium enterprises (MSMEs). According to the 2013 report by the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), and the National Bureau of Statistics (NBS), Micro, Small and Medium Enterprises (MSMEs) in Nigeria was 37,067,416 companies and the total number of persons employed by this sector was 59,741,211 which represents 84.02% of the total Nigeria labour force. Interestingly, micro businesses (companies with less than 10 employees and less than N5million in assets excluding land and building) accounted for 36,994,578 of the companies in this sector. Given the structural and economic challenges bedeviling

our business context (especially this sector that constitutes the largest share of businesses in Nigeria), is deployment of robots financially feasible and sustainable? Well, organizations will have to engage in financial costbenefit analyses to adequately make this decision. From a non-financial perspective, it is paramount to take culture into consideration. Nigerians just like many Africans are by nature (to a large extent) gregarious. This permeates into business transactions as evidenced by informal conversations even within formal organizations…the occasional use of vernacular in transactions et cetera. In a study of B2B and B2C organizations by Uzo and Adigwe (2016), it was evident how cultural norms impact business transactions. This means that in the quest to automate work tasks, Nigerian business owners and foreign firms operating in Nigeria must pay special attention to the cultural dynamics that is an integral part of work life. Consideration must also be given to transactional preference(s) of customers who are embedded in this same cultural context. Are we as a people predisposed to transacting with robots (even those with artificial intelligence algorithms)? This question is connected to the next question. Is the timing right for robotic automation? This question is asked against the backdrop that automation leads to loss of jobs as well as the creation of new ones. In a country with an unemployment rate of 23.1% as stated by the National Bureau of Statistics (NBS) and reported by The Guardian on 19 December, 2018, one cannot help but ask how prepared is our country for the displacement of workers that

…our readiness for robotic automation would depend on affordability vis-a-vis profitability, cultural suitability and appropriateness of timing

will be caused by robotic automation. This question should not be much of a concern to business owners as it should be to the government because the primary focus of organizations would be to minimize cost, improve efficiency and maximize profits. The government would have to contend with an increase in unemployment rate and its attendant problems like crime (which sadly poses a threat to businesses et cetera). With the creation of novel jobs (owing to disruptions by robotic automation) comes another challenge, the need for skill upgrade and dynamism. The Nigeria education system still contends with a few challenges (structural, financial etc) that makes optimum performance impossible and this makes one wonder how realistic it is to achieve skill upgrade and dynamism needed to address the challenges that will be caused by automation in the years to come. With globalization, it is certain that automation would eventually become a reality. However, the prevailing culture, financial capability of businesses (which takes into consideration the economic situation of the country et cetera) vis-a-vis the profitability of investing in robotic automation etc. may pose a challenge to the rate of acceptance and adoption. In succinct terms, our readiness for robotic automation would depend on affordability vis-a-vis profitability(as determined by so many factors), cultural suitability and appropriateness of timing. These should be top concerns to government and entrepreneurs. Adigwe is a certified Human Resource Management (HRM) professional and an IndustrialOrganizational Psychologist. He runs a website on HRM and OB issues

Fasinro and the death of Lagos Encyclopedia

Rasak Musbau


n September 13, 1919 was born a great man of letters, a consummate and dedicated Administrator, a dye in the wood progressive, a versatile Islamic Scholar and an encyclopedia of Lagos history and one of the founding fathers of modern Lagos. His name is Hassan Adisa Babatunde Fasinro, popularly called HAB. To many, it was like a part of the sky above the city of Lagos had collapsed when on the evening of Sunday, 31st of March, 2019, it was announced that like all mortals, HAB had answered the supreme call in deference to his Creator. Though the physical demise was expected, the passing away of Pa Fasinro was shocking. Senator Fasinro was one of the few men this nation has produced who are giants, men who stand tall and magnificent, above pettiness, self-centeredness and bigotry of the elite in today’s Nigeria. The late Alhaji Fasinro attended Methodist Boys High School Lagos before proceeding to study Law in London in 1942. He was called to the Bar and admitted into the Lincoln Inn in 1951. He returned to Nigeria and became a Crown Counsel in the old Western Region where he became a Queens Counsel ( the equivalent of the present day Senior Advocate of Nigeria) from where he was appointed as the Town Clerk of the then Lagos City Council, succeeding late Barrister Mayaki.

His tenure as Town Clerk was very remarkable and eventful. With him as Town Clerk under the Chairmanship of late Alhaji Ganiyu Dawodu and other notable Lagosians including late Raufu Williams, Taorid Lawal-Akapo, T.B.Lawal, Ojekunle Pereira, Prince Tajudeen Olusi as Councillors, he ensured the laying of the foundation Stone of the Lagos City Hall in 1965 and interestingly, HAB supervised its completion and commissioning in 1968. It is worthy of note that Alhaji Fasinro received the new administration of then Major Mobolaji Johnson following the creation of Lagos State in 1967. His nine year tenure as the Lagos Town Clerk of the then Lagos City Council not only raised the bar of Local Government Administration in the country, but also elevated the status of Lagos to an enviable level. At the most concrete level, late HAB had an ineradicable impact on politics in Nigeria. He was elected as the Second Assistant General Secretary of the Action Group in 1953 under the leadership of the late sage, Chief Obafemi Awolowo. Well loved and respected by the party hierarchy, Fasinro contested the 1954 bye-election to the Lagos City Council. Other Councilors also elected at the time were M. Animashaun, K.B. Shomade, N.A. Taiwo, Mrs. E. Femi Pearse and S.I. Martin. Of the lot, H.A.B. Fashinro was the only University graduate. He served as an elected Councilor in 1954 as well as in 19761979. It is remarkable that Alhaji Fasinro donated all his allowances as Councilor to charitable organisations. The Lagos Town Council was first and foremost distinguished by the caliber of men that ran it. They were mostly highly trained lawyers, engineers, medical doctors, accountant, town planners, and environmental officers. Apart from training its own staff locally, it was training sanitary inspectors for Ghana, Sierra-Leone, Liberia, Gambia, among others. The famous Health Per-

sonnel Training Institute at Harvey Road, Yaba, which today trains Sanitary Inspectors Nurses for the nation was established and owned by the Council before it was taken He contested for the Senate in 1983 under the banner of the UPN under the leadership of Chief Obafemi Awolowo and defeated the late Dr. Wahab Dosunmu of the NPN. He was in the Senate with other prominent Nigerians such as the late Dr. Olushola Saraki, Senators Jonathan Odebiyi, Abraham Adesanya and a host of others. HAB was no less distinguished in religion, sports, writing and other pursuits. He led the secular and spiritual segments of the society simultaneously and creditably. Alhaji Fasinro was a front line member and leader of the AnwarUl-Islam Movement of Nigeria. He was elected President of the movement in 1988. It is instructive to note that he was in the forefront of the establishment of the foremost Ahmadiya now Anwar- Ul- Islam group of Primary and Secondary Schools. Alhaji Fasinro was also elected President of the Nigerian Muslim Council in 1992 in recognition of his contributions to the development of Islam in the country and was also an Executive member of the Nigerian Supreme Council for Islamic Affairs. Although born during the reign of Eshugbayi Eleko, H.A.B Fasinro lived to witness the reigns of Oba Ibikunle Akintoye (1925-1928) and Oba Sanusi Olusi (1928 – 1931) and the second tenure of Eshugbayi Eleko (1931-1932). It is also on record that he knew Oba Falolu (1932-1949) clearly as a young charming Prince when he was resident at Eletu Iwashe Street, a place where Akobo House now stands. His recollection of him was that of a man of style, character, and of good and princely disposition. And by the time, Prince Musendiku Buraimoh Adeniji Adele was formally installed as the Oba of Lagos on October 1, 1949; he was then 30 years old, already pursuing a degree in Law. And when Oba Adeyinka Oyekan was in-

stalled on February 15, 1965, H.A.B Fasinro was serving as the Town Clerk of the Lagos City Council. On May 24, 2003 when Oba Rilwan Babatunde Akiolu I was installed as the 20th Oba of Lagos, H.A.B Fasinro had joined the rank of Octogenarian Lagosians. From Eshugbayi Eleko to Akiolu I, H.A.B Fasinro was quite knowledgeable about the politics and intrigues of the Lagos monarchy and had, in fact, become a philosopher and historian of sorts. His works, Ahmadiyya (as I See It); Achievements and Conflicts (1994); and Political and Cultural Perspectives of Lagos (2004), are major contributions to historical knowledge. Pa S.L. Edu described H.A.B Fasinro as a “highly knowledgeable and historically minded man.” Although, it was not clear whether elaborate plans are in place to mark his 100 years in September, there are, however, insinuations that Lagos State Government would ordinarily have honoured him and also recognised his contributions to the development of the state, if he had lived up to 100 years. While Pa Fasinro lived a life of humility, commitment and unparalleled public service example for the generation behind to emulate, unfortunately death pulled him out of the race among those Nigerians that are currently edging towards 100 years. It would be recalled that late Chief Hannah Idowu Dideolu Awolowo, wife of the founder of Action Group (AG), Chief Obafemi Awolowo, died few days away from attaining 100 years. HAB paid his dues and has left his footprints on the sands of time. He received several national and international awards including the National Award of the Order of the Federal Republic of Nigeria (OFR) in 2001. Lagos will always remember and honour him for all he did for the State. May his soul Rest in Peace. Musbau is of Features Unit, Lagos State Ministry of Information and Strategy, Alausa, Ikeja

Tuesday 16 April 2019





Bashir Ibrahim Hassan

GM, BUSINESS DEVELOPMENT (South) Ignatius Chukwu

Sudan and Algeria: Growing people power across Africa


he growing mass movement of citizens forcing longterm rulers out of office in Africa berthed in Sudan in the first week of April and by April 11 they got President Omar Hassan al-Bashir out. The exit of al-Bashir followed quickly after the success of the revolt of the street in Algeria. The Algerian citizens’ revolt saw to the end of the 30-year reign of President Abdelaziz Bouteflika. The movements in both countries represent a significant awakening that is wholesome for the lessons they teach. The question across Africa is who is next? The fall of al-Bashir has raised once again the spectre of military rule in Africa. The military took over and announced April 11 a two-year transition programme. Protests over the continued stay in power of President alBashir commenced in December 2018. It owed to worsening economic conditions and the increased price and unavailability of the world’s number one staple, the humble but powerful bread. Bread was scarce or unavailable. There was no money for bakeries to buy wheat. Prices were high where the product is available. Resistance to the high price

of bread caused the first demonstration in Atbara on December 19, 2018. It grew in intensity. The Sudanese insisted on getting al-Bashir out with the battle cry, “Just fall, that’s all”. The strong message resonated with all citizens. President al-Bashir rose to power following a military coup in 1989. He ruled Sudan with a strong arm since then. The breakup of Sudan owed in part to the strictures of his style. He then fought a bitter war with South Sudan over many years. President Omar al-Bashir had a stronger hold on power in Sudan and a perverse incentive to hold on despite the protests than President Bouteflika did in Algeria. Mr al-Bashir runs the risk of prosecution and indictment by the International Criminal Court now that he has lost the immunity the presidency offers. His carefully selected acolytes holding significant positions in the country could not save him despite their vested interests and efforts to ensure he remains in power. The Sudanese took many risks on the streets to get their president out. There were signs that al-Bashir would not go down smoothly over the weekend of April 5-7, 2019. It manifested with the presence on the streets of Khartoum of the Janjaweed militia. The Janjaweed are no-

torious for the atrocities they committed in Darfur. The Government has renamed them as the Rapid Support Forces. The conduct of the Janjaweed is one of the reasons the West treated Mr. al-Bashir and his country as pariahs. Sudan also hosted Osama Bin Laden when he was the most wanted man in the world. President al-Bashir stands alone amongst leaders of nations wanted by the International Criminal Court. The court has indicted him for crimes against humanity and genocide for the atrocities in Darfur. The ICC holds that al-Bashir played “an essential role” in that crisis and the ugly way it played out. Records show officials killed 60 persons since the commencement of the protests. The number is probably more. The Government’s crackdown included the declaration of a state of emergency in February 2019 and replacement of civilian governors with military officers. The resolve of the citizenry benefitted from a division in the ranks of the military. The Army provided cover for the demonstrators and prevented other arms of the government from chasing them away. The Army then stepped in on April 11 to end the al-Bashir. There was also the young Alaa Salah, a 22-year old Engineering student whose image standing on

a vehicle in defiance went round the world as a symbol of resistance and defiance. In Algeria, the significant risk is instability from a hiatus in leadership. Protesters want the entire system pulled down rather than have Bouteflika’s men take over. Bouteflika wanted a fifth term after 20 years in power. Significant lessons abound in the movements in Algeria and Sudan. Which country is next in Africa is blowing in the wind. The only certainty is that it would happen elsewhere on the continent. Rulers must pay attention to the stomachs of their citizens — the economic conditions of man condition all his other conditions. While citizens of most African states live seemingly joyfully with obtuse leadership and low standards of performance, they react to existential threats such as deprivation of livelihood. Citizens must work against tenure elongation for any leader, no matter how popular or well-intentioned his motivation. Every official must respect the integrity of term limits. It is usually one step to impunity when they dislodge the boundaries of the constitution. Citizens should also be vigilant. It will be salutary for all Africa if the movements in Sudan and Algeria lead to improvements in both countries.


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Tuesday 16 April 2019



Tuesday 16 April 2019




Lenders see backward integration helping local industries cut production costs Pg. 16



Nigerian banks rake N858bn profit as tier-2 lenders gain more ground …GTBank, Zenith Bank’s profits account for over 44% OLUWASEGUN OLAKOYENIKAN


igerian banks jointly increased their profit by more than a quarter to N858 billion in 2018, but that came with a price for the country’s biggest banks as they lost some ground to smaller lenders in the sector’s profitability war. The biggest banks, which are often regarded as tier-one lenders, grew their aggregate profit by 17 percent to N611 billion in the year as against a 61 percent increase in total profit to N246 billion posted by the mid-tier lenders, indicating a faster pace than the tier-one banks. As a result, the percentage share taken by the country’s five biggest banks to the total profit accrued by all publiclyowned banks in the Nigeria’s banking industry shrank to 71 percent in 2018 from 78 percent. The major banks comprising First Bank of Nigeria Holdings (FBNH),

Source: Companies’ Financials, BusinessDay

United Bank for Africa (UBA), Guaranty Trust Bank (GTBank), Access Bank and Zenith Bank collectively increased their net income by N86.6 billion in the year com-

Source: Companies’ Financials, BusinessDay

pared with N93.3 billion upsurge achieved by the mid-tier banks, thanks to Ecobank’s N32 billion added profit that made that happen. Nigerian banks have continued to dominate the list of most profitable firms in the country amid increased competition in the space, prompting individual lender to adopt strategies to shore up profit using customer deposits. A n a na l y s i s o f t h e after-tax profit of these major lenders show Access Bank grew the most profit, rising by 58 percent to N94.98 billion in 2018 from N60 billion garnered in the previous year. FBNH trailed with 31.4 percent profit growth to N59.7 billion from N45.5 billion. Nigeria’s largest banks by total assets, Zenith Bank, and by market capitalisation, GTBank, retained their positions as the most profitable lenders in the country in the year with Ecobank, which

gained N102 billion, displacing UBA to occupy the third place. Zenith Bank’s net income for the year stood at N193.4 billion, the second-biggest profit recorded by any Nigerian listed firm, while GTBank gained N184.6 billion. That brings the aggregate net profit of the two banks to N378 billion and accounts for more than 44 percent of the entire profit made by all the banks in 2018. When compared to the previous year, the proportion of profit realised by Zenith Bank and GTBank to the total banks waned marginally from 50 percent. Meanwhile, as at the close of business on Friday, shares of GTBank appreciated by 2.34 percent to N35.05, Access Bank gained 3.48 to close at N5.95 percent, while UBA rose 0.78 percent to N6.50. H o w e v e r, F B N H plunged 3.85 percent to settle at N7.50, while Zenith Bank remained unchanged at N20.45.



GSK selects Fidson Healthcare as Nigeria manufacturing partner

SMEDAN boosts MSMEs with provision of workspace to young business owners



laxoSmithKline Consumer Nigeria Plc has announced the selection of Fidson Healthcare Plc as its local content manufacturing partner as part of its restructuring exercise with effect from the third quarter of 2021. The new appointment followed an earlier announcement by GSK to restructure its supply chain operating model. According to a statement by GSK Friday, the manufacturing of its wellness and respiratory products will be “transitioned” to Fidson Healthcare. “Until then it would be business as usual at the Agbara factory plant as GSK continues to ensure supply continuity for all its locally manufactured brands,” the company said. GSK had earlier announced plans to restruc-

ture its supply chain operation effective in the third quarter of 2021. Analysis of GSK’s financial results shows possible reasons for this restructuring. The consumer health care segment posted N112.49 million in loss in 2018 however an improvement in loss position by 83 percent compared to N701.960 million in 2017. Operating expenses increased by 22 percent on a year-on-year basis to N3.13 billion as against N2.56 billion recorded a year earlier, this saw the segment recording a loss of N37.6 million in operating profit. During the period, growth in operating expenses outpaced that of revenue as segment’s top line grew 12.5 percent. In the last 4 years, the consumer health care segment contributed to an average 32 percent to total revenue of

GSK, while pharmaceutical segment contributed about 68 percent on the average to total revenue. The pharmaceutical segment recorded a whopping N1.89 billion loss in 2016. Being a segment for imported GSK goods, the loss was due to foreign exchange scarcity witnessed in Nigeria in 2016 which saw the naira depreciate significantly in value against the U.S dollars on negative shock in the crude oil market. However, loss position of the segment improved significantly as the Nigeria economy bounced back from recession in 2017, although the segment still recorded a loss of N15.5 million during the period. Fidson’s shares were traded at N4.30 on the floor of the Nigerian Stock Exchange as at Friday, while shares of GSK traded at N9.35 on Friday.



he Small and Medium Enterprises Development Agency (SMEDAN) has begun provision of workspace for the young business owners in a boost for small businesses burdened by an inability to afford decent office space. The move is targeted at reducing unemployment rate which rose to a six year high of 23 percent in the third quarter of 2018, and to improve economic productivity. The provision of workspace to the young business owners was initiated under the Young Business Owners in Nigeria (Y-BON) as part of Federal Government economic policies to empower business owners between the ages of 20 and 45 with a view to reducing unemployment and improving on the self dependence among the youths.

Speaking at the sensitization programme held for the Young Business Owners in Nigeria (Y-BON) in Abeokuta, Ogun state capital, Dikko Radda, Director General of SMEDAN, declared that the programme was initiated to reduce unemployment and increase working hours of Nigerians as well as contribute immensely to gross domestic product through the provision of conducive workspace for the entrepreneurs. Radda, represented by Ime Etop-Andy, Asst. Director, Enterprises Development and Promotion Department, stated that the programme started in 2018 with the provision of workspace for a total of 460 young business owners in Anambra, Kebbi, Kogi, Cross River and Osun States, adding that three States including Ogun, Bayelsa and Kaduna, have been selected

for such an empowerment in this year. He said, “It is towards addressing the economic challenges that Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) has initiated the Young Business Owners in Nigeria (Y-BON). “It is designed to provide a platform where existing entrepreneurs either as stand alone or cooperative societies will be comparatively selected for further supports. The support package is aimed at reducing some of the fundamental challenges that usually confront MSMEs. “Essentially, the target beneficiaries are young people between the ages of 20 and 45. The focus on this target is because of the need to create new opportunities for employment and enterprises growth which are usually not easily realizable in start-ups.

Editor: LOLADE AKINMURELE ( Graphics: David Ogar


Tuesday 16 April 2019



Lenders see backward integration helping local industries cut production costs Head, Conglomerates and Industrials, Stanbic IBTC Bank PLC, BOLATITO AJIBODE, in this interview with Olufikayo Owoeye says diversification and backward integration strategy will significantly reduce cost of production for local industries, make them more competitive and enable them generate foreign exchange. (Excerpts)


lease can you give us an overview of the Industrials and Conglomerates business at Stanbic IBTC Bank? The Industrials and mining business in Stanbic IBTC is quite extensive. It is an arm of the business units in Corporate and Investment Banking that delivers comprehensive banking services to clients in Diversified Industries, for example - Conglomerates, Paper and Packaging, Automobile, Maritime, Aviation, Logistics, Chemicals, Healthcare, Iron and Steel sectors. The team also manages Real Estate portfolio for the bank and lately, is responsible for developing the Mining sector. We have built a leading franchise supporting our clients in maximizing value in their businesses, through our specialized offerings and creative solutions in Global Market and Investment Banking. This has earned us the status of a trusted partner to our corporate clients from our diverse industries. Lo o k in g ac r o ss t he banking sector, NPL (Non-Performing Loans) remain a major issue. Risk levels vary from sector to sector; how strong is your risk assessment framework for your portfolio? Risk and Conduct is one of our strategic business drivers. We pride ourselves of doing the right business the right way and our clients have come to appreciate us for that. Whilst our risk framework is very robust and flexible to meet ever changing risk conditions, our Fitch rating is AAA. Over the years, Government has been talking about diversification of the nation’s economy, the solid mineral industry in Nigeria is still largely untapped but what is its current contribution to the GDP and what in your opinion is the real economic potential of the industry? According to the Government Sector Strategy document, mining accounts for 0.55% of GDP. This is abysmal when compared to its contribution of about 18% for South Africa; 25% for DR Congo and 40% for Botswana. The Government aims to improve the contribution to GDP to about 3% ($27 billion) by 2025. To demonstrate the po-

lifestyle changes towards wellness and convenience. All these have greatly influenced consumer preference. Stanbic IBTC had identified the sector as strategic to the FMCG multinational corporates and developed a value proposition to partner with the industry leaders across the key packaging segments - can, glass, metals and plastics. Our team has in-depth sector knowledge and the ability to partner with product partners across our full range of products, including corporate financing, Global Markets, treasury operations, wealth management, personal banking, capital market equity raising, Insurance, Trusteeship, and so on.

Bolatito Ajibode

tential in just two minerals, out of forty-four (that is - Iron ore and Coal) using a production rate of 2% and average commodity price, our reserves would have grown by $4.5billion from the two commodities between 2015 and 2017, due to the lack of an active mining industry. How much of this has impacted the local industries and will diversification allow sufficient supply for local consumption and exports at the same time? Nigeria’s oil earning contributes 80% to government revenue; hence we experience shocks every time there is global slump in oil price. Government needs to diversify its revenue to mitigate


Africa is our home, we drive her growth” echoes our deep commitment to the growth of the continent and Nigeria in particular, being a growth region. Stanbic IBTC’s mining desk offers a unique value proposition, leveraging on mining expertise of Standard Bank across the continent

the concentration risk and susceptibility to commodity swing. This is already being vigorously pursued, going by recent efforts to increase tax base as well as grow other critical sectors of the economy that have direct impact on industries - agriculture and mining sectors. Industrial players typically suffer oil price impact considering that foreign inputs account for about 70% of raw materials. Some of the key players have also embraced backward integration strategy by sourcing their major raw material inputs locally. We have witnessed this in food and beverages, where conglomerates and Large Local Corporates are supporting out-grower schemes to support farmers for their inputs. In paper and packaging, operators are recycling used cartons as against importing tons of craft paper from across the globe. In iron and steel, we have seen the entrance of other players recycling scrap metals to reinforced bars, angles and channels for construction. Lately, there has been keen interest and huge investment in iron ore mining and production of steel products. Simply put, industrial diversification is the use of cheaper production inputs, and being competitive to facilitate local consumption, consequently significantly reducing reliance on imported products and driving the export potentials of made-in-Nigeria goods. There’s been improvement in accessing forex compared to the years of recession. What has been the experience for your clients?

As you may know, Stanbic IBTC Nominees, our Investors services/custody business, controls about 50% of nominees’ business in Nigeria. In the heat of foreign exchange scarcity in 2016, 2017 and 2018, our clients benefitted immensely from our access to foreign exchange. We not only met their needs within the bank, but also sold foreign exchange to other banks to meet their needs. What lessons can Nigeria learn from other African nations especially the ones in which Standard Bank operates and where mining and solid mineral industry is at very advanced levels? Anyone would be right to describe Standard Bank as a mining bank, having supported mining activities in South Africa for over 100 years. Other African nations have leveraged on Standard Bank’s depth of knowledge in mining and Nigeria has a lot to benefit from the same. Thankfully, Stanbic IBTC is a member of Standard Bank, and therefore well positioned to provide the required support in this area. The packaging sector is another thriving industry in Nigeria. How would you appraise the sector and how is Stanbic IBTC Bank playing in this space? The packaging sector is very resilient to economic cycles given 95% exposure to food and beverages industries. Opportunities for market growth are numerous due to a rising middle-class resulting in higher disposable income, increasing urbanisation giving rise to

Over the years, Stanbic has been involved in projects like the malls; with the likes of Actis and a few other developers across the country. In spite of the prevailing economic challenges, more malls are still being developed to drive retail. How has the bank been able to rise above these peculiar challenges? Stanbic IBTC has supported and will continue to support development of malls and commercial real estates in Nigeria to bridge the huge gap. We have a strong Real Estate Finance team who are experienced in appraising and structuring a Real Estate project. The team collaborates with their counterparty in Standard Bank to deliver world-class malls and first class commercial properties across Lagos and Abuja. How many of these malls have Stanbic IBTC Bank been involved with? We have our signature on major malls in Lagos and Abuja. In Lagos, we financed Ikeja City Mall, Novare Lekki Mall and Circle Mall Lekki, and also First Festival Mall in Amuwo Odofin. In Abuja, we sponsored developers of Apo Mall, Gateway Mall, Jabi Lake Mall and Central Office Park. A few years ago, Stanbic IBTC organised an Iron and Steel session, seemingly a one-off, since the initiative was not sustained. Any particular reason why the bank didn’t consolidate on this platform and are there other things Stanbic IBTC Bank is @Businessdayng

doing to stimulate the sector? Stanbic IBTC bank is a key player in the iron and steel sector. The initiative is primarily to discuss how to move the industry forward. Stanbic IBTC has been having strategic engagement with operators, supporting them. We are particularly keen to support the sector because there is a direct correlation between per capital consumption (PCC) of steel and national development. Nigerian PCC is 7.0kg compared to South Africa at 89kg. We can only experience real growth if we grow the sector that feeds other sectors – that is, grow construction, transport (automobile, maritime and aviation) oil and gas, white goods (refrigeration and electronics) and packaging. Given the specialised nature of the segment you oversee and the type of clients you manage, is the expertise resident within Stanbic IBTC or do you rely on Standard Bank to drive this segment? You are right to describe my portfolio (Industrials, Real Estate and Mining sectors) as being specialised. The portfolio is equally diverse, hence there are dependencies and supports from in-country specialists and Standard Bank. One of our strategic intents is client centricity; we not only meet the clients’ expectations, we do our best to surpass it. We therefore reach out to our product and sector specialists across Standard Bank group in South Africa, London, Beijing and New York to deliver bespoke products and services to our clients. How committed and well positioned is Stanbic IBTC Bank and Standard Bank to support driving this industry in Nigeria? Our purpose, “Africa is our home, we drive her growth” echoes our deep commitment to the growth of the continent and Nigeria in particular, being a growth region. Stanbic IBTC’s mining desk offers a unique value proposition, leveraging on mining expertise of Standard Bank across the continent. Our existing and prospective clients will have direct access to our team of experts in Mining Geology, Mining Engineering, Project Finance and Commodity Trading.

Tuesday 16 April 2019




Business Event


Dangote Refinery will absorb 2000 engineers when operational


he coming on stream of the Dangote Refinery and Petrochemicals will go a long way in bringing the much desired resolution to the unemployment crisis ploughing the nation as the company would engage about 2000 personnel in the field of engineering only. Group Executive Director, Strategy, Portfolio Development & Capital Projects, Dangote Industries Limited, Devakumar Edwin, disclosed this while receiving the officials of Petroleum Trust Development Fund (PTDF) who paid a visit to the head office of the Dangote Group in Lagos at the weekend. According to him, opportunities for thousands of indirect jobs is huge given that there is a fertilizer and petrochemical complex within the refinery. He explained that the 650,000 barrels-per-day Dangote Refinery currently under construction, is 50 per cent bigger than the cur-

rent largest single train refinery in the world; and has the latest technology to challenge any such plant in Europe. Giving an overview of the Dangote Refinery to the visiting Head, Press & External Relations, PTDF, Kalu Otise and Lawal Ibrahim of the same unit, the Dangote boss said “although most refineries abroad tend towards mass production of diesel, the Dangote Refinery is designed to produce gasoline more than diesel, which is unique to us. “Also, for every barrel of crude that goes in, we want to extract the maximum number of products to boost the return on investment. Our refinery products can be sold in any part of the world.” He also noted that because of the technology deployed in the construction of the Dangote Refinery (which will be the world’s largest single-train refinery upon completion), the personnel had to be trained from scratch, with engineers sent to India and South Africa.

According to him, “From Nigeria, our people have gone throughout Africa and beyond for training. They are trained and equipped, they can do exceedingly well. In oil and gas, there is an advantage because there is already some level of expertise there.” Concerning the refinery workforce, Edwin explained that “we adopted the highest level of employment standard from both Europe and America. On our manpower requirement, we got thousands of applications, and the applicants were put through a rigorous process and sent in batches to India and other countries for training.” Commending the PTDF for the quality of its graduates, the Dangote boss, who noted that the company needs close to 2,000 engineers, said, “In any company, the human beings are the most important and the success of any organisation depends on the team work. I believe in the importance of the people”.

L-R: Chidi Izuwah. DG/CEO, Infrastructure Concession Regulatory Commission; Njide Ndili, country director, PharmAccess Foundation , and Hawuru Yahaya, emir of Shonga, special guest of honour at the presentation of Policy Dialogue, with theme,   disrupting health care PPPs as model for health system strengthening in Nigeria by PharmAccess Foundation in Lagos. Pic by Pius Okeosisi

IFCs critical to Investment and Economic growth in Nigeria, Africa -Ocorian forum SEGUN ADAMS


conomic advancement of Nigeria, and Africa at large, is in many ways dependent on the role of International Financial Centres (IFCs) in unclogging the pipeline of capital flow into the domestic market. Speaking at the maiden edition of Ocorian forum in Nigeria, Keynote speaker, Tonye Cole, the founder of the Nehemiah Youth Empowerment Initiative and Former Executive Director and Co-founder of Sahara Group, explained that co-existence of government as formulators of policies to drive growth, and the private sector as frontline implementers of the policies, was inescapable. However, the constraints faced by the private sector in accessing capital to fund crucial projects and businesses has slowed the pace of progress so far achieved, necessitating the effort

of IFCs in bridging the gap. The growth of businesses in Africa has huge economic and social development implications. ‘’Domestic market sector and capital market do not have the full capacity to finance all projects and infrastructure development in the local market,’’ Cole said. He explained that high cost of borrowing in the local economy stifles entrepreneurship, demanding the mobilization of foreign capital in achieving desired growth.  Ahead of the 2030 deadline for the sustainable Development Goals, the United Nation estimates capital required for investment in Africa to be $11.5 trillion. “The reality however is that international investors are reluctant to invest in developing countries,” Cole said, highlighting the high risk inherent in developing economies especially political and macroeconomic instabilities.

“IFCs therefore need to provide the necessary infrastructures, a deep liquid and sophisticated capital market and tax and regulatory regimes to support foreign investments,” the keynote speaker underscored. In addition, IFCs were identified as having a significant role to play in mitigating investment risks associated with developing countries. Acting as mediators between developing countries and international finance, IFCs provide a neutral location for funds to be amalgamated from multiple investors and channeled into developing countries, Cole explained. Also at the event, Richard Arlove, Regional CEO, Africa Middle East and Asia (AMEA), Ocorian, underpinned the developmental impact of alternative investment on corporates, financial institutions and the development of the African Continent.

R-L: Bayo Yusuf, managing director, UBA Pensions; Adaora Ude, head strategy, Sigma Pensions; Dave Uduanu, chief executive officer, Sigma Pensions; Ada Akonobi, corporate strategy analyst, Sigma Pensions, and Chukuma Amaonwu, head business development East, at the Sigma Walk to live Health walk in Enugu

L-R: Okpetu Monday, sales officer, Slot Systems Limited; Nwaochei Genevive, senior administrative officer, National Lottery Regulatory Commission; Kola Ogunwumi, marketing manager, Redington (Telco, West Africa), and Olafisayo Fapohunda, marketing executive, Redington Apple-Business, at the fifth SLOT-Phone-A-Car raffle draw in Lagos


Dufil consolidates on land acquisition, commences compensation payment to farmers in Edo state DANIEL OBI


ollowing its acquisition of 17,954 hectares of land from the Edo state government for Palm oil cultivation, Dufil Prima Foods Plc, maker of Indomie Noodles, has embarked on a crop compensation payment for 1,628 farmers across14 communities in Ovia North East local government area of Edo state. The payment exercise, which is being overseen by the Ministry of Agriculture in the state, according to a statement, commenced recently and it’s expected to continue for another 3 weeks The move which crystalis-

es Dufil’s backward integration drive, particularly with respect to oil palm cultivation, is also in line with the Federal government’s drive for increased activities and revenue from agriculture. This laudable project being undertaken by Dufil will see massive investment being introduced into the region. The project will not only help create job opportunities for indigenes of Edo state but also serves to cut the importation of oil palm; a development which is in sync with the Federal government’s efforts to reduce importation. Chief Operating Officer,

Dufil Prima Foods Plc, Madhukar Khetan, said in the statement that the project marks another significant milestone in Dufil’s commitment to attaining a further backward integrated and self-sustaining system that supports the Nigerian economy by creating employment opportunities, reducing importation and doing so in a sustainable manner. He added that crop compensation exercise which is being carried out marks another achievement in the oil palm plantation project which will include installation of an integrated palm oil mill.

L-R: Ubong King, Director, Nigeria-South Africa Chamber of Commerce; Iyke Ejimofor, Executive Secretary, NigeriaSouth Africa Chamber of Commerce; Dr. Ebun Sonaiya, Director, Nigeria South Africa Chamber of Commerce; Dr. Ije Jidenma, CEO - Leading Edge Consulting/Director of NSACC);Foluso Phillips, Chairman, Nigeria-South Africa Chamber of Commerce and Osayaba Giwa-Osagie, Director, Nigeria-South Africa Chamber of Commerce at the Chamber’s breakfast forum sponsored by Leading Edge Consulting.



Tuesday 16 April 2019




MISAN REWANE Misan Rewane is co-founder and CEO of WAVE, an organization focused on rewiring the education-to-employment system to create a level playing field for every African youth to access the skills and opportunity to become what they imagine.

et’s say, you’ve entered the dating world and decided to find a boyfriend/girlfriend. Unlike Tolu, our example in the last article, you’ve done the work and know why you need a romantic partner. You have a clear idea about the holes in your life that need filling. You want someone who will be your ‘plus one’ at all your social events; someone who will listen to your problems; cheer you up when you’re sad; snuggle with you while you watch Premier League matches and National Geographic documentaries; and go to Burna Boy concerts with you.That is the job description (JD). In order to find someone who can do those things for you what’s your first step? You must decide which specific traits this love interest must possess in order to fulfill these mandates as your boyfriend/girlfriend. You must set your standards and be clear on what they are. The person must be presentable so you aren’t embarrassed to introduce them to friends or family. They must like to go out to places with you and be in your company. They must be attentive and caring, so they can listen. They must be funny or lighthearted, so they can cheer you up. They must enjoy intimate physical contact, like football, and find documentaries interesting. They must be an Afrobeat fan and not mind being in loud, sometimes crowded places. They must like Burna Boy. Not just Wizkid, Da-

vido or Mr Eazi: Burna Boy. It works the same way in recruitment. You design your JD so you can look at your list of tasks that need to be completed and match each one to the skill required to get it accomplished. You’ve done the work to prioritize ‘needs’ over ‘wants’ over ‘might-as-well-get-done-whilewe’re-at-it’s, so you work from the most important to the least and list your required competencies for each duty that must be fulfilled. Your employees are disorganized? You need someone who can organize and motivate them. Your social media outreach is abysmal though you are in an industry that requires rapid and frequent engagement? You need someone who is adept at navigating and utilising Facebook, Twitter, Instagram, Whatsapp etc, is good at search engine optimization and is on top of the latest online communication trends. The whole point of going to the trouble to create a JD, is so you have a crystal-clear framework you then use to deduce and decide your competencies. CREDENTIALS ARE NOT COMPETENCIES Competencies could be technical (“hard”) skills such as the ability to analyse large data sets or the ability to develop financial statements. However, they could also be “soft skills” like the ability to communicate effectively or work well with others. They could be personality traits such as assertiveness (showing confidence) or flexibility (being easily

adaptable). In your case, they will be whatever combination of these things are tailored to your organisation’s requirements. Defining required competencies is integral in Nigeria because of the fundamental flaw in our education-to-employment pipeline. Our education system teaches students academic theory and neglects practical instruction and the development of industry­-relevant skills. Everyone believes, we, as employers, focus on a university degree as the most relevant qualification for employment. Therefore, young people zone in on this milestone believing it will equip them for the world of work. When we, in turn, do not use competency-based hiring practices which elevate executable talent over academic theory, we perpetuate this misunderstanding. There is no pressure on educational institutions to adapt their curricula for job-preparedness, or partner with our industries in order to create work experience opportunities which will enable graduates to become an optimizable pool of talent for us. Prioritising competencies in the hiring process instead of using academic qualifications as a proxy for skills, is the only way to recruit candidates who can perform the real-life tasks that we require of them in order to meet our business goals. ARE YOUR NEEDS MET BY THEIR SKILLSET? Why are defining the competencies so important? Because

they keep you from getting distracted and wasting your time. Let’s say in your search for the boyfriend/girlfriend we just talked about, you meet someone who is very kind to beggars, has a Phd in engineering, loves gospel music and saves up money to take a trip abroad every year because they want to broaden their horizons. Though these are all positive attributes, they do not match your mandate. Without your list of competencies (presentable, attentive, caring, funny, lighthearted, fan of Afrobeats, concertgoer, lover of Burna Boy) you could very well fall for this generous, well-educated, God-fearing, world traveller. You might be enamored with them in the beginning. However, it will very soon become clear, when they drift off while you are talking about your day, or tell you Afrobeat is demonic, that they are unsuitable for the JTBD. Without deducing and deciding on desired competencies, we disempower ourselves in the recruitment process. With just a JD (what we need to get done) the only question becomes whether the potential talent is willing to do the things we require. We are asking and they are answering. What equally matters is whether they are able to do the things we require.They are seeking and we are choosing. Deciding what we need makes the first step of the recruitment process(creating that JD) worthwhile. It makes the next step (figuring out who we are and our journey to demanding these things) meaningful.


Tuesday 16 April 2019


Business schools in developing markets value traditional teaching Institutions include online elements in MBAs, but remain faithful to in-person tuition ANDREW JACK, FT


n one of Africa’s fastgrowing and congested cities, online business education is on the rise. Lagos Business School is among a number of universities in lower and middle-income countries that are using technology to attract students who are unable or unwilling to attend university full-time. Online education allows people to learn at their own pace and study from wherever they are — whether on business trips, in the office or working from home to avoid wasting hours in traffic to make it to a campus. It also allows them to connect in new ways with universities’ resources. They can watch lectures live or catch up on pre-recorded sessions, and take part in discussions with classmates who are based all over the world. Lagos Business School has so far focused fully-online learning on “open enrolment” classes, says Uchenna Uzo, its MBA director. These are short, online programmes that act as a “teaser” to encourage students to consider taking one of its highervalue courses. “We use online to offer highly subsidised courses to market and generate awareness of programmes for people to come on to campus,” says Mr Uzo. He says the school offers these taster courses in a range of “hot, trendy topics” such as financial inclusion and sustainability, which “students wouldn’t normally get elsewhere”. The programmes typically include five to 10 web-based sessions for up to 100 participants and cost 25,000 naira

A blended approach at Lagos Business School

($69) each, according to Mr Uzo. The school “still values faceto-face teaching” for its degree programmes, yet there is some flexibility for busy students. Much of its part-time executive MBA programme i s o f f e re d o n l i n e, M r Uz o say s. In d e e d , s tu d e nt s o n the school’s modular MBA course mix online learning and webinars with on-campus classes. The pattern is similar elsewhere. Piet Naudé, director of the University of Stellenbosch Business School in South Africa, says it offers some fully online courses in executive education. These tend to be for topics that are heavily fact-based like project management and managerial accounting. The school requires attendance on campus for at least two of the modules in the executive MBA, however. As with Lagos Business School, this is because both students and faculty value inperson teaching and interaction.

The internet has the power to extend the reach of more established business schools, including many in the UK and the US, into developing markets. Angus Laing, dean of Lancaster University’s Management School, says technology helped its part-time, two-year executive

It’s been very valuable at getting academics to think about different ways to deliver content and learning outcomes Angus Laing, Lancaster University’s Management School

MBA programme attract more students — and from further afield. He says that the second cohort of students on the course at Lancaster University Ghana have recently graduated. Students on this course studied in Ghana, but also travelled to the UK and undertook some learning online. “One advantage of being a relatively late entrant to online is that we are developing systems for the current generation of devices from the start,” says Prof Laing. That includes a focus on mobile phones rather than desktop computers, allowing students to join discussions remotely from all manner of locations. Prof Laing says technology has also forced teachers to change their approach. “It’s been very valuable at getting academics to think about different ways to deliver content and learning outcomes.” This has improved interactiv-

ity, engagement and feedback for students, he adds. But technology also comes with some frustrations, notably bandwidth in west Africa. That has led Lagos Business School to offer more pre-recorded sessions that students can watch at any time, rather than only live streaming key events. It has also adjusted its timetables, scheduling online sessions for times when fewer problems with connectivity are expected, notably early mornings and Saturdays. Mr Uzo cautions on the lack of guidance and regulation for online courses in Nigeria and other countries. He notes that some local and regional institutions offer digital degrees that are very cheap, but there is a risk that these will be of poor quality. It remains difficult to provide the same level of quality without at least some attendance in person, says Mr Uzo. “You still need interaction with your peers and networking.”


Tuesday 16 April 2019



Weekly insight on current and future trends in education



Human Capital

Nigeria, others require 9.3m teachers to meet 2030 pre-primary education target …UNICEF targets 501,749 out-of-school children by 2020 Kelechi Ewuzie and Cynthia Egboboh


igeria and indeed the rest of world would need 9.3 million new preprimary teachers to meet the universal target for pre-primary education by 2030.A report by the United Nations children education fund (UNICEF) has revealed. As of today, only 422,000 pre-primary teachers currently teach in low income countries while in West and Central Africa, 2.5 per cent is allocated to pre-primary education, with 70 per cent of children missing out on early education in the region. Nigeria, Africa’s largest economy currently has over 13 million out-of-school children record which is the highest in the world. According to the UNICEF report titled a World Ready to Learn: Prioritising quality early childhood education, “Children enrolled in at least one year of pre-primary education are more likely to develop the critical skills they need to succeed in school, less likely to repeat grades or drop out of school, and therefore more able to contribute to peaceful and prosperous societies and economies when they reach adulthood”. Meanwhile the United Nations children education fund (UNICEF) said it targets to ensure return of about 501,749 out-of-school children to school by 2020 in Kastina, Kebbi, Sokoto, and Zamfara states. Isah Usman, Kebbi state project coordinator

EAC/UNICEF said the cash transfer programme under the “Educate a child” project (EAC) aims at expanding access to quality basic education as well as ensuring improved quality of teaching and learning environment in target states. “The Cash transfer intervention under the EAC aims to reach 41,391 child beneficiaries and their female caregivers in four years: 31,044 in Kebbi State and 10,347 in Zamfara State. In Kebbi State, in the first year the program runs in the local government areas (LGAs) of Danko-Wasagu, Suru and Maiyama and will be expanded to Argungu, Bagudo, Dandi, Gwandu, Koko-Besse and Shanga LGAs in the following years”, he said. Usman presenting the overview of the cash

transfer programme in Kebbi, revealed that Kebbi and Zamfara States have higher number of out of school children, of which majority are girls, despite the fact that primary Education is officially free and compulsory and these States are guided by this policy and the UBE Act (2004). According to him, “Poor education indicators in the States are partly driven by social attitudes towards ‘western’ education, and poverty of parents, especially in rural communities. “The poverty level of rural community members largely restricts their level of participation in the education of their children. Majority of them cannot afford purchases of basic learning materials, not to even support school infrastructural development”.

He said “the Cash Transfer Programme addresses some of the underlying causes of inequalities in education outcomes, such as poverty, social exclusion and malnutrition as it promotes regular source of income, allows extremely poor households to eat better food more regularly, leading to improved nutritional status essential for children’s cognitive development and ability to benefit meaningfully from school”. “Education in turn, will lead to healthier children and these benefits will be passed on to the next generation. “Evidence shows that in Africa, children of mothers who received five years of primary Education are 40% more likely to live beyond the age of five. Speaking further, Usman explained that seven strategic interventions has been selected for the partnership with EAC which will enable UNICEF and its partners to reach more out-ofschool children in Kebbi and Zamfara States adding that the interventions are form of social protection aimed at reducing the financial burden on families to enroll and keep these children in school. “The proposed interventions under the partnership with EAC are in line with UNICEF’s vision and mission of the realization of children’s rights including their right to education and with EAC’s mission, vision and goals, focusing on out-of-school children and quality education for them”. “The major priorities for the project include Massive awareness, Poverty Mitigation, Women self-decorum, Income generation options, increased in Enrolment, improved Learning performance(s) “, he added.

‘Private sector investment will strengthen FoodCo plans scholarship for 1000 indigent competitiveness of next generation youths’ secondary school students in Ibadan KELECHI EWUZIE


ndustry experts insist that continuous investment by private sector in educational development is the best solution for Nigeria if she hopes to grow the next generation of globally competitive youth population. Aminu Mohammed, regional public affairs and communications manager (North), Nigerian Bottling Company Limited, says private sector involvement in education is to complement the efforts of the government in providing necessary educational infrastructure to boost learning. Mohammed who represented Ekuma Eze, Public Affairs and communications director, stated this when NBC donated items including Plasma Televisions and air conditioning systems to the management of Ahmadu Bello University, Zaria as part of its contribution towards empowering youth in the country by improving their learning environment. According to him, “The donation was a demonstration of the company’s confidence in Nigerian youths and support for academic excellence as youth development remains a major focal area of the Company’s Corporate Social Responsibility framework. Mohammed said “Over the years, our community investments have evolved from unconnected philanthropic initiatives to longterm programmes aligned to three key strategic priorities including the empowerment of youth

and women; the creation of a World Without Waste and Water stewardship”. “For youths, we are committed to motivating students and indeed, young people to unleash their potential, this is at the core of what we believe. We sincerely hope that the items donated here today, would go a long way in shaping a better life and future for the students,” he said. Mohammed Dabo, deputy dean, Student Affairs, Ahmadu Bello University in his remarks, expressed appreciation to the management of NBC for their support towards enhancing education for the students. According to Dabo, “The donation of the gift items would improve recreation for the students on the campus”. He described the donation as a huge support which is expected to enrich the learning experience for the students. Dabo said “We applaud the effort of Nigerian Bottling Company Limited to support our students with these items. We know this would go a long way to give them a better experience as students. With this, I am sure our students would be able to relax and enjoy themselves during their leisure period.” He charged the students to make the best use of the items handed over to them by ensuring that the equipment and other facilities are maintained for optimal use. He therefore urged other corporate organisations to take a cue from NBC by lending their support in whatever areas they can to create a conducive learning for the students.

…Announces 50 recipients of the maiden Scholarship Scheme KELECHI EWUZIE


oodCo Nigeria Limited says it plans to offer scholarships that will cover tuition from Junior Secondary School (JSS2) until graduation for 1000 indigent students in Ibadan, the Oyo State capital. The Scholarship aimed at promoting the legacy of the late philanthropist and chairman of the company, Adegbenga Sun-Basorun. Ade Sun-Basorun, executive director, FoodCo Nigeria Limited, speaking during a ceremony to unveil the first batch of 50 recipients, said the late Sun-Basorun was passionate about assisting the less privileged, especially children; and that the scheme will provide a platform for indigent students to actualise their educational aspirations as well as help reduce the burden of out of school children in Oyo State. He said “We are delighted to unveil the first set of beneficiaries of the Adegbenga SunBasorun Scholarship Scheme. The scholarship was thrown open to indigent students from secondary schools located around the eight FoodCo outlets in Ibadan. After a thorough examination and screening process, we are pleased to announce the 50 students selected as the first set of recipients of the award.” He “While FoodCo is involved in several

community partnership initiatives within our host communities, this project is particularly dear to us because it offers a pathway for young bright minds to actualize their academic desires and make something positive from their lives, thereby, immortalizing the ideals of our founding chairman.” Olanike Adam, an official of the Universal Basic Education Commission, lauded FoodCo for the Scholarship initiative, noting that it was a demonstration of the company’s commitment to the Commission’s charge that education should be the responsibility of all. Similarly, Ngozi Akinde, a representative of the Oyo State Universal Basic Education Board, SUBEB, also commended FoodCo for instituting the Scheme. She called on other corporate bodies to emulate the company and advised parents, guardians and the participating schools to ensure that the students maximize the opportunity that the scholarship provides. Beneficiaries of the maiden edition of the Adegbenga Sun-Basorun Scholarship Scheme were drawn from government-owned secondary schools within Ibadan, including Oba Akinyele Memorial High School, Queen’s School, Government College and TL Oyesina Model Secondary School. Others are: Community High School, Alegongo; Methodist Secondary School and Urban Day Secondary.


Tuesday 16 April 2019



EDUCATION FG’s failure to fund education accounts for rising insecurity in Nigeria’ The Union noted that it expected the government to strictly follow the timelines allocated to meeting specific demands now

Akinremi Feyisipo, Ibadan.


he Academic Staff Union of Universities (ASUU) has blamed rising insecurity in the country as one of the consequences of government’s failure to fund education and educate children of the masses. “Nigeria’s future looks bleak with the attitude of her leaders to funding education”, the union added. Deji Omole, chairman ASUU, University of Ibadan chapter expresses the Union’s unhappiness with the percentage allocated to education in the 2019 budget which he said is about the worst in recent past. According to him, “The ruling class should see the rising insecurity as one of the consequences of failing to educate the nation and attending to the welfare of the people. The Union advised the Federal government to pay the N25billion Earned Academic Allowances it agreed to pay before the Union suspended its strike in February, 2019. “While government has released N20billion revitalization fund to Universities, no University has received the N25billion Earned Academic Allowances that government claimed it has released”.

that elections are over. While noting that the Union is discussing renegotiation of its agreements with govern-

L-R: Taiwo Banjoko, ex-officio, PTA, Imaginations School; Inioluwa Adetola, social prefect; Nike Fakorede, MD/CEO, Imaginations School; Dipo Fakorede, chairman; Temitope Tijani, chairperson, PTA, Imaginations School, and Kayode Yeku, vice chairperson, at the Imaginations School PTA Easter family funfair “Tagged” Beyond Your Imagination in Lagos, at the weekend. Pic by Olawale Amoo

Chevron, Lonadek partner to improve local professionals performance KELECHI EWUZIE


hevron Nigeria Limited in a bid to close the gap between expatriates and local competency has partnered with Lonadek Inc. an engineering, technology, and innovation solutions company to boost capacity of local professionals. Speaking during the Drilling and Completion Programme Induction Workshop held recently in Lagos, Principal Consultant, Lonadek, Ibilola Amao, said the purpose of the programme was not to compete with expatriates, but to boost and improve the performance of local professionals. Amao said the programme organisers partnered with institutions, organisations, and clients to develop capacity, capabilities and competencies of professionals in the Nigeria. According to her, “This workshop gives professionals the opportunity to go online and identify role models, mentors and coaches, who are Nigerians, local and in diaspora that will support them throughout the six months programme and the 5 year certification programme. “More so, the programme would also bridge the gap between industry and academia, as it sets to strike top-notch centers of excellence to upgrade designing curriculums and industry interventions to improve the quality of graduates. “It would also promote lecturers skills to provide improved lectures, laboratories, courses and research development and facilitate meaningful durations of equipment sort as materials by higher learning institutions.” She further noted that part of the benefits of the training is that it would house various training opportunities to build experts, rather than having different projects. The Lonadek managing director main-

tained that the programme would not just see to the training of professionals for one year and abandon them, but would up skilled and empower them on their jobs to continue on their own with the support of their training, learning and development managers, human resource managers, and supervisors in their companies. “Chevron has actually invested in Lonadek to proffer innovative and holistic solutions to bridge the gap in drilling and completions”. “We are pulling resources together to enhance performance through collaborations and hope to domesticate technology and expertise in the country, which would result to a pool of highly skilled personnel.


More so, the programme would also bridge the gap between industry and academia “In all of these, we want to see to the establishment of world class centers of excellence with certified lecturers and state of the art facilities, which would produce industry value projects. “We opine that if we empower individuals and their companies in collaboration with their human resource managers, the performance of delivering drilling and completions projects by Nigerians in Nigeria would improve and the cost of projects and contracts would drop at the end of the day,” she added. She opined that the programme would reduce operational capital expenditure with

more Nigerian highly skilled work force, noting that the organisers seeks to reduce the huge funds spent on drilling and completion expatriates. In her remarks, Anike Odunlami, general manager, Nigeria Content Development, Chevron Nigeria, said the initiative was basically to develop and train drilling and completions professionals to become world class professionals in well planning and design, management of well operations, and project management. “This recent development and initiative is actually in compliance with the requirements of the Nigerian Oil and Gas Content Development Act, which was passed into law in 2010 and reflects Chevron Nigeria’s commitment to Nigeria content development. “Chevron in partnership with the Nigerian Content and Human Capital Development (NCHCD) division of the Nigerian Content Development and Monitoring Board (NCDMB) have continued to train and equip Nigerians to deliver value in the oil and gas industry through exposure to executive and management trainings, and professional skills trainings during project executions. She congratulated NCDMB for its contribution to Nigeria content development especially in developing and harnessing incountry capabilities. She commended Lonadek Nigeria Limited, who is the initiative implementing partner for its commitment in providing opportunities for young Nigerian drilling and completions professionals with five to eight years’ experience to acquire skills to excel in the oil and gas industry. However, she stimulated the trainees to participate effectively in all the trainings and leverage on all the platforms available and to also use the opportunity to expand the scope of their knowledge, build competence and expand their horizon.

ment, Omole stated that government should do the needful and implement all outstanding components of the Memorandum “The N20 billion for revitalisation has been sent to the universities. The issue of renegotiation has started. The issue of the payment of Earned Academic Allowances has not been done months after suspending the strike. Government claimed it has released the money but it has not reached the university so that is why we are saying that in terms of the timelines, we can say we have not followed the MOA religiously. But in a country where everything has to stop for elections, we assume government will do the needful and put issues in the MOA behind us by fully implementing it now that elections are over” “We are not happy about 2019 budget to education. They presented this budget while we were on strike. We had assumed that a government that promised change will increase the budgetary allocation to education while the university staffs are on strike. However, we realized that the budget was further cut down in terms of percentage allocated to education. This is about the worst in recent past. You can know that when you have such an attitude from people in Government who feel that they can achieve much without education, the future of that country is bleak” he said.

Public school students receive success tips on Nigerian technology


tudents at the IIupeju Senior Secondary School were recently coached on how to navigate successfully the Nigerian technology space by Renmoney in partnership with Ingentes Technologies. The students were coached on use of Excel, Corel Draw and basic programming. The initiative titled, ‘Tech for the Streets’ exposes secondary school students to technology by teaching them basic coding and providing them with other tips on how to be successful in the Nigerian technology space. Renmoney’s Information Technology Manager, Adija Uzodinma, facilitated a session during the orientation. While addressing the students, Adija said, “Technology skills cannot be ignored today as people who learn even basic technology skills are often viewed as more qualified for complex, higher income roles. I think it’s important that every child, no matter what career path they choose, should have at least one digital/technology skill”. Oluwatobi Boshoro, Renmoney’s CEO said: “We’re really happy to partner with Ingentes Technologies for this initiative because there’s a real need to provide a platforms where young minds can learn the basics from practicing professionals and be mentored to make good career choices”. Ingentes Technologies is an IT solutions company specialising in training, computer sales, repairs and IT support. Tech for the Streets is an initiative aimed at equipping public school students with ICT skills to prepare them to take advantage of future technological opportunities.



Tuesday 16 April 2019



Tuesday 16 April 2019




Fashola, Fayemi, others Famfa Oil Tower elevates prime office space with strong value propositions expected at 2019 architects colloquium Office space



or savvy real estate investors, especially the patient ones with long term view of the market , economic recession or slowdown is a mere cycle that should not affect, significantly, major investment decisions. Some believe that the best time to invest is when an economy is recessing. Such decisions become a lot more compelling in a country like Nigeria where there is demand driven by its large market, strong demographics, a young population with buying power, and a sizeable clan of high networth individuals with strong desire for the new normal. This explains why investment interest as well as confidence is still high in the real estate sector despite reported negative growth in the sector in the last 24 months it has been in recession. In Lagos, Nigeria’s commercial capital, Ikoyi and Victoria Island are the most active sub-markets for prime office space. Whereas Ozumba Mbadiwe Street in VI is home to many institutional Grade A office space, Kingsway or Alfred Rewane Road is the new haven for office space developers in Ikoyi This is where Famfa Oil Tower is sitting on land area measuring 5,695 square metres. This is a 20-floor tower being developed by Dayspring Property Development Company, a real estate investment and development subsidiary of Famfa Oil Limited, with Julius Berger as the main contractor. The sub-contractors on the building project are ACCL as the architects, AA Associates Limited as structural engineer,

and Trevi Foundations Limited as the piling contractor. Julius Berger, the German construction giant, has over three decades experience in construction and civil engineering. It has within this period garnered good reputation that has made it a first consideration for quality construction work. Its involvement in building Famfa Oil Tower speaks much about the quality of the final product that will be delivered. Located strategically on the corner of Kingsway and Olawole Dawodu Roads in Ikoyi, the Tower will have its 3 floors dedicated to Famfa Oil. It will also offer leasable office space and a multipurpose hall, each with a dedicated well-appointed entrance at the ground floor. The office complex promises top-notch amenities and features, including a gymnasium, helipad with a dedicated waiting lounge, 266 car park spaces, raised access floors and select granite finishes. The building’s façade will also comprise of extensive high performance unitized curtain walling with integrated façade lighting, ballistic performance considerations in select areas, and aluminum cladding. The developers are considering a proposal to have Rotary UPS systems in the building as an alternative to generators such that in the event of power outage, there is no interruption of power supply thereby ensuring a seamless flow of electricity. Dayspring Property which is chaired by Folorunsho Alakija, has other iconic properties in its portfolio. These are the Rose of Sharon Tower in Victoria Island and Project Delta in Ikoyi. Alakija, one of the world’s richest women, is a big player



in the property and real estate sector in Nigeria. Having hit it big in the oil sector, she has invested a lot of her wealth in real estate in Nigeria and London. She also has investments in the Middle East. Famfa Oil Tower has come to join in the scramble for the hot Ikoyi skyline where the likes of Heritage Place (15,631 square metres), Alli-

ance Place (6,670 square metres), Kingsway Tower (12,000 square metres), Temple Tower (14,000 square metres), BAT’s Rising Sun (10,000 square metres), and Lake Point Towers (13,400 square metres), have already taken position. Before now, Ikoyi was known as a residential enclave, but changing business dynamics have altered all that. “There

is nothing strange or particularly wonderful about what is happening in Ikoyi; what that simply tells you is that Kingsway is today the most desirable, most sought after office space address in Lagos”, Obi Nwogugu, Head, Real Estate at African Capital Alliance, explained to BusinessDay. “We have seen

Continues on page 24


Technology to define future of real estate as prop-tech gains ground ISRAEL ODUBOLA


he era of traditional methods and conventional practices in the Nigeria real estate sector will soon be overtaken by technology as transactional activities in the sector are, increasingly, being done with property technology

(Prop-tech) which is already getting spirited attention and investment interest. Proptech is a collective term used to define startups offering technologically innovative products or new business models for the real estate market. Because of this, the market is already experiencing a wave of innovation,

investment and entrepreneurial activity The last couple of years have seen increasing role and use of proptech in real estate, creating opportunities for buyers and sellers alike, and leading to the growth of the market. “Proptech is slowly gaining momentum in developed markets, and we feel a developing market like Nigeria can learn and re-calibrate itself for seasoned investors,” Abdulhakeem Sadiq, Proptech pioneer, founder/CEO of new market entrant, Zama, confirmed in Lagos recently. Although, prop-tech has not fully gained ground like financial technology (Fin-tech) in the global space, investment in it has trended upwards in the past nine years, thereby opening the door of opportunities to African economies, particularly Nigeria.

At the maiden edition of a Property Technology Conference organised by Pison Housing Company real estate stakeholders across the value chain who are innovating or at conceptual stages of innovation that will change the narrative in the real estate space gathered to deepen conversation on this new phenomenon. Roland Igbinoba, convener of the confab and Founder of Pison Housing Company, stated that global investment in prop-tech surged from a mere $20 million in 2010 to $14 billion in 2018, and projected to hit $20 billion in 2019. The investments have been witnessed in virtual reality, real estate crowdfunding, big data & analytics, artifical intelligence, smart building technologies and portal listings among others.

“The industry needs to collaborate with government to take the sector to the next level. Government has a lot of data they are yet to use, that is why we bring people who have experience in Prop-tech to develop the industry.” Igbinoba said. According to him, the future is tilting to artificial intelligence, block-chain, and smart technologies. “That is why we organized this event to get emerging participants together to see how we can transform the industry,” he said. Prop-tech is a broader term that encompasses the application of information technology to real estate markets to lessen paper work and make transactions more effective. Tayo Odunsi, Managing Director, Northcourt Real

Continues on page 24 @Businessdayng

abatunde Fashola, minister for power, works and housing, Governors Kayode Fayemi and Ibrahim Hassan Dankwambo of Ekiti and Gombe states respectively, are among several dignitaries expected in this year’s edition of Architects Registration Council of Nigeria (ARCON) annual forum, also called Architects’ Colloquium. Winifred Oyo-Ita, Head of the civil service of the federation is also expected as a guest of honour at the colloquium already slated for Wednesday, April 24 and Friday, April 26, 2019. But the opening ceremony where the dignitaries would feature shall be on Thursday, April 25, 2019 at the Musa Yar’Adua Centre, Federal Capital Territory, Abuja. The theme of this year’s event is ‘Architecture and the National Development Agenda XII’ and, according to Jimoh Faworaja, former president of ARCON and Director of Colloquium, this year’s event is laced with current topical issues in the construction industry. He assured that all participants, including professionals in the building industry, research institutions, educators, agencies responsible for housing and developmental control, students, exhibitors and the public would have a lot to learn. Sub-themes, he explained, would include reworking past architecture, collapsed building, contemporary issues in architecture and sustainability with energy efficiency in buildings. The director added that, the professional AQ Class 19 will be running professional classes in four subject areas including the Public Procurement Act within the framework of procurement planning process; expression of interest and the procurement of consultancy services; goods and services. Other areas include the essence and benefits of the Presidential Order 05; Discrimination against persons with disabilities (Prohibition) Bill 2018 – The responsibility of the architects; Current Trends in Glass and Glazing Technology – Key Insights For Today’s Technology; And the benefits of an in-building solution or neutral DAS solution as a reliable and innovative solution to poor coverage inside high rise buildings. Also, there are plans to have a session with the prospective registered architects with a view to increasing the number of registered architects in Nigeria.


Tuesday 16 April 2019



Here’s what players at Africa CEO Forum propose for real estate sector growth Stories by CHUKA UROKO


hen top players in the Nigerian real estate sector gathered at this year’s Africa CEO Forum in Kigali, Rwanda, their discussion centred on ways to grow the sector, including need for the provision of good, quality and affordable housing for the teeming population of the country. Africa CEO Forum is the continent’s largest international gathering of private sector operators, international investors, experts and highlevel policymakers around the continent and beyond to discuss the possibility of a fully developed Africa and the Nigeria without housing deficits. The forum allows CEOs to benefit from an unrivaled networking platform with top decision-makers, identify new business opportunities with the world’s most influential business leaders and also learn from world-class consultants and experts how to navigate their various companies’ challenges. This year’s edition, which is the 7th in the series, was held in Kigali, Rwanda and had as theme, ‘Shaping the Future of Africa’. It was attended by over 1800 participants who recommended more reforms to accelerate Africa’s

economic integration. Adeyinka Adesope, the GMD/CEO of Palton Morgan Holdings, comprising Propertymart, Grenadines Homes, Mcpalton, Mitcherutti contractors and Paltonloitte, noted on the sideline of the forum, that meeting the housing needs of Nigerians was at the core of the group’s business interest. He disclosed that, through its various subsidiaries, the company had been delivering on various housing initiatives across the country to battle the deficit with offerings like PropertyMart Fairmont, the fairest deal in the Lekki corridor; Grenadines Homes’ Oceanna, amongst others. Adesope said the group had been able to provide for Nigerians affordable houses that meet their standards without the bottlenecks associated with acquiring properties in some parts of the country. He posited that the success recorded so far was due to the way Palton Morgan and other companies under it approach delivering their products under good corporate governance they are known for. “Through its member companies, the group’s strategic focus and policies rest on the development and completion of major projects in Nigeria and across the globe and the synergy of management and staff has grown the group to be one of the largest real estate investment firms in

L-R: Damola Akindolire, ED, Alpha Mead; Femi Akintunde, GMD/CEO, Alpha Mead; Saadiya Aminu, MD/CEO, Urban Shelter, and Adeyinka Adesope, GMD/CEO, Palton Morgan Holdings.

the country”, he said. Continuing, he said, “while the economy of the nation has been tough on most sectors in the last three years, it has been tougher on the real estate sector and the federal government should wake up to the reality of the diagonal impact the housing sector has on the nation’s economy while major players of the sector must eschew operating in silos.” Adesope wants Nigerian government to reconsider the African Continental Free Trade Agreement (ACFTA) it was yet to sign, saying the integration of Africa was one of the ways the continent’s developments could be galvanized. He hoped that Nigeria’s role and participation in the inte-

gration would be critical for its success, which is long overdue as African nations need to work as one; for one continent, one currency and one market. He added that collaboration amongst African nations was key to developing the continent, which must also be embraced by major players in the real estate sector to advance the sector. Participants urged African governments to take advantage of pension funds to bridge their infrastructure funding shortfall and de-risk pension systems. This was one of the proposals by a group of panelists in the second day of the forum at a session called ‘Infrastructure and Local Financing: A $100

Billion Opportunity’. Reforming the pension sector while de-risking and structuring infrastructure projects, they said, would help mobilize the highly needed funds. Africa requires $95 billion every year to cater for its funding needs in energy, roads, ports, railway, and other infrastructure projects. However, they can only raise half of the required amount, which calls to look for more funding alternatives. Corneille Karekezi, the Group Managing Director and Chief Executive Officer of Africa RE, said that since investing in infrastructure requires a lot of liquidity, countries must create vehicles that will help accumulate these resources.

Urban renewal, building collapse in focus as stakeholders gather for LAF


he need for urban renewal or regeneration and building collapse prevention will be the central focus of discussions at this year’s edition of the Lagos Architects Forum (LAF), the organizers have said. The Forum which is already in its 10th edition is an annual event orgainsed by the Lagos State chapter of the Nigerian Institute of Architects (NIA). It provides opportunities for participants and part-

ners to meet with the various players and stakeholders in construction industry. The focus on urban renewal and building collapse is the institute’s response to the frequent building failures that have occurred in Lagos and other parts of the country in recent times. The institute sees every need for builders and government to be educated on what should be done to prevent further occurrence. “We are concerned about the loss of lives and destruction

of property each time a building collapses. We note that most of the buildings that collapse are old and distressed. Again, many of them did not have any professional involvement in both design and supervision,” Fitzgerald Umah, chairman of the Lagos chapter explained to journalists at a press conference in Lagos recently. Umah disclosed that the institute would be presenting a document to the government that would help them to prevent building collapse.

Fitzgerald Umeh (2nd r), chairman, NIA Lagos chapter, flanked by Exco members at the press conference in Lagos recently.

On urban renewal, he revealed further that the forum would also be highlighting the need for urban regeneration, citing an instance of what he called Ethiopian Community as a good model where both the rich and the poor live in the same community, sharing whatever facilities that are available in the community. Expectation is that this year’s edition, which will have high profile personalities in attendance, will provide opportunities for participants to interact and establish bilateral ties as well as follow-on contacts with affiliated companies, service providers, manufacturers, corporate bodies, prospective end-users, clients and other relevant stakeholders. The personalities that are expected at the forum, according to the chairman, are Akinwunmi Ambode, the Lagos State governor, as chief host; Babajide Sanwo-Olu, the state’s governor-elect as special guest. Others are the managing director of Sterling Bank which is the forum’s partner and sponsor, among other dignitaries. Major highlights of this year’s event are a walk and design competition for stu-

dents and young graduates of architecture. Umah explained that the walk which would start from the National Stadium in Surulere to the University of Lagos is aimed to make architects and other professionals exercise. The walk, he added, is aimed to promote good health condition, create awareness on what people need to do when they want to start building their houses, and also to tell builders that every building should have an architect or any other professional in the built environment. The chairman, who was with Abiodun Fatuyi, the chapter’s secretary general, and other Exco members at the press conference, explained that the design competition was aimed to encourage students and young graduates of the architecture profession. The first prize for young graduates attracts N1million; second prize is N750,000 while the third prize winner goes home with N500,000. As for the students, the first prize is N750,000; second prize is N500,000 while third prize is N250,000. “These will be funded with the Sterling Alternative Finance,” Umah informed. @Businessdayng

Famfa Oil Tower elevates... Continued from page 23 some interesting developments on Ozumba Mbadiwe Street in Victoria Island, but Kingsway is the preferred destination”, he added. Expectedly, with the clustering of prime office buildings in these axis, competition is sure to set in and Nwogugu confirmed, saying, “yes, we have seen some competition in the market and that has, increasingly, brought some efficiency into construction; build quality is the in-thing now and a lot is being done to ensure product differentiation.” . He added that more money was being put back into the buyer’s pocket even as he enjoys enhanced asset quality and value. The market is no longer what it used to be as average asking rents for these developments are now on the downward trend in Ikoyi, averaging US$600 - US$850 per square metre per annum, which is about percent lower than what it was a couple years ago. Achievable rents are 8 percent to 15 percent below asking rents. Average asking rents in Victoria Island follows Ikoyi trend, easing by 6 percent to US$780 per square metre per annum. Achievable rents are 10 percent to 20 percent below asking rents. This situation may not persist as it is expected that more office space will coming to the market in the course of the year.

Technology to define... Continued from page 23 Estate, noted that Proptech accounts for about 15 percent of venture capital funding in the world. Nigeria accounts for 52 percent of internet usage in West Africa, according to him, citing rising mobile phone use, decrepit real estate startup, big data analytics, customer experience and emergence of new technologies, as drivers of prop-tech growth. James Dearsley, global prop-tech influencer, maintained that prop-tech is a segment of the wider digital transformation of the property industry, adding that prop-tech companies aim to provide global solutions to local problems. Speaking on the feats of Unissu, a global leader in Prop-tech information, research & data, Dearsley disclosed that the platform has 268, 000 members in 97 cities across the globe. The platform has also raised $8.1 billion in funding and 22 percent of revenue comes from enterprise businesses. “We are moving from transactional-based business models to one that almost focuses on exclusive service business”, he said, noting that mentality and infrastructure define Prop-tech adoption globally.

Tuesday 16 April 2019




In association with

Cybercriminals launch 5million attacks on cloud server honeypot in 30 days Stories by Jumoke Akiyode Lawanson


yber attacks on cloud security using honeypot systems are on the rise, as a recent report reveals that cybercriminals attack one cloud server honeypot every 52 seconds and more than five million attacks attempted within a 30-day period. A honeypot is a network-attached system set up as a decoy to lure cyber attackers and to detect, deflect or study hacking attempts in order to gain unauthorized access to information systems. Sophos, a global leader in network and endpoint security, found after carrying out a study in Sao Paulo Brazil, that, on average, the cloud servers were hit by 13 attempted attacks per minute, per honeypot. The honeypots were set up in 10 of the most popular Amazon Web Services (AWS) data centers in the world, including California, Frankfurt, Ireland, London, Mumbai, Ohio, Paris, Sao Paulo, Singapore, and Sydney over a 30day period. A honeypot is a system intended to mimic likely targets of cyber attackers, so that security research-

L-R: Jay Liu, country manager, Infinix Mobility; Amanda Zhang, marketing manager; Opeyemi Adewunmi, marketing executive, Infinix Mobility Nigeria, and Benjamin Jiana, managing director, Infinix Mobility, during the launch of Infinix Mobility S4 in Lagos. Pic by OlawaleAmoo

ers can monitor cybercriminal behaviors. In the study, more than 5 million attacks were attempted on the global network of honeypots in the 30-day period, demonstrating how cybercriminals are automatically scanning for weak open cloud buckets. If attackers are successful at gaining entry, organisations could be vulnerable to data breaches. Cyber-

criminals also use breached cloud servers as pivot points to gain access onto other servers or networks. “The Sophos report, Exposed: Cyberattacks on Cloud Honeypots, identifies the threats organisations migrating to hybrid and all-cloud platforms face. The aggressive speed and scale of attacks on the honeypots shows how relentlessly persistent cybercriminals are and indicates they are using botnets to target

an organisation’s cloud platforms. In some instances, it may be a human attacker, but regardless, companies need a security strategy to protect what they are putting into the cloud,” said Matthew Boddy, security specialist, Sophos. “The issue of visibility and security in cloud platforms is a big business challenge, and with increased migration to the cloud, we see this continuing,” he added.

Visibility into weaknesses Continuous visibility of public cloud infrastructure is vital for businesses to ensure compliance and to know what to protect. However, multiple development teams within an organisation and an ever-changing, auto-scaling environment make this difficult for IT security. Sophos is addressing security weaknesses in public clouds with the launch of Sophos Cloud Optix, which leverages artificial intelligence (AI) to highlight and mitigate threat exposure in cloud infrastructures. Sophos Cloud Optix is an agentless solution that provides intelligent cloud visibility, automatic compliance regulation detection and threat response across multiple cloud environments. “Instead of inundating security teams with a massive number of undifferentiated alerts, Sophos Cloud Optix significantly minimises alert fatigueby identifying what is truly meaningful and actionable,” said Ross McKerchar, CISO, Sophos. “In addition, with visibility into cloud assets and workloads, IT security can have a far more accurate picture of their security posture that allows them to prioritize and proactively remediate the issues flagged in Sophos Cloud Optix,” he said.

Infinix targets youth population with 32MP, Artificial intelligence selfie camera smartphone


nfinix Mobility Limited, has launched its latest S4 smartphone with 32 megapixels, artificial intelligence (AI) selfie camera, aimed at enabling its young customers to live a smart life. The phone also comes with a 6.2’ H.D+ waterdrop display screen, a triple rear camera for better portrait images, a fast octa-core processor, a 4000mAh battery power and an upgraded XOS 5.0 software for a seamless operation experience. Infinix is set to assert its authority in the competitive smartphone market providing its customers with

an empowerment device that would not just elevate the user’s selfie skills, but also help position them on the spotlight. The launch event held in Lagos recently, witnessed an impressive turnout of key stakeholders within the entertainment, fashion and tech industry amongst others and they were all brimming with eagerness, ready to behold and have a firsthand experience of the smartphone that can empower the user to live the smart lifestyle. Speaking at the launch event, Benjamin Jiang, global head, Infinix

Mobility, mentioned that the Infinix S4 has a remarkable selfie camera and in this era of digitalisation serves as the perfect tool to help the user actualise their aspirations “The amazing possibilities are endless with the S4 and its features from the 32MP A.I selfie camera, 6.2 H.D+ waterdrop display, 4000mAh battery, triple rear camera can empower and propel its user to great heights notwithstanding their area of expertise” The S4 branched out of the S series to focus on selfie optimisation. According to the company, the S4 is

all about creating the ultimate superior selfie for a purpose. “When a selfie is taken on the S4, it is expressed elegantly and is capable of elevating the user from a rising star to being part of the golden generation.” Better selfies are captured with the 32MP A.I selfie camera with its 1.6um ultra pixels and an F2.0 aperture. The camera has a higher capacity for light intake and absorption, producing surreal selfies. The advanced 5P optical lens gives the best contrast and resolution ratios for optimal image refinement. The triple rear camera


(13MP+8MP+2MP) is an added bonus, permitting the capturing of far wider angles than what is normally possible with an ordinary dual camera. The triple cameras are responsible for depth, distance and field of view respectively, with the S4 allowing for up to 120°capture. The S4 has infused an algorithm that can detect up to 1024 data points on the face, significantly increasing its facial detection accuracy. The face unlock function in combination with the fingerprint lock technology, together provide solid security for all the data stored in the device.


Tuesday 16 April 2019




Why better network solutions create better experiences Jumoke Akiyode-Lawanson


emand for more positive experiences by users of mobile devices connecting to Wi-Fi requires that organisations offering Wi-Fi services embrace technologies that are able to deliver advanced solutions. This was the focus of a technology interactive session by experts from Ruckus Networks for internet service provisers (ISPs) and organisations, hosted by Dizengoff Nigeria in Lagos last weekend. According to Riaan Graham, sales director for Ruckus Networks, sub-Saharan Africa; Wi-Fi and networking technologies have initially been seen as purely for data requirements, however, in recent years given the convergence of networks, the increase in data and the demands on businesses, Wi-Fi and networking solutions have become critical backbone infrastructure for companies today – across all sectors. Globally, Wi-Fi technologies are known to experience challenges in high density areas with lots of interference. This could be stadiums, warehouses

L-R: Kezia Anim-Addo; communications manager for Sub-Saharan Africa, Sherry Dzinoreva; head of policy programs, Africa, Adaora Ikenze; head of public policy, West and Central Africa, and Kiran Yoliswa; strategic partner manager, communities, Sub-Saharan Africa, all of Facebook, at the It’s Your Facebook Pop-up media launch in Lagos on Thursday April 11, 2019.

and ports. Interference and sheer volume of traffic in such environments makes it extremely difficult to achieve high quality voice and data experience with most technologies for users connecting to Wi-Fi. This is where Ruckus has an edge. With innovations like smart roaming and band steering, and patented Beamflex+ adaptive antenna technology, they have the ability to give everyone a strong, consistent connec-

tion to deliver full HD video and voice. This has been evident in the number of clients that have invested in Ruckus in these high-dense environments globally. “Our ability to have focused signal strength on mobile devices have allowed more users connecting to Wi-Fi in high density environments to have positive experiences where Ruckus is deployed. Each network may look similar, but business challenges are

‘It’s Your Facebook’ pop-up space comes to Lagos Jumoke Akiyode-Lawanson


iding on a successful tour across three cities in Europe and the Middle East, Facebook is set to hold the Lagos edition of ‘It’s Your Facebook’ pop-up showcase – the first in Africa. The two-day program unveiled on Thursday 11, April 2019, at an exclusive preview event, aims to educate users in a fun, interactive space and to showcase some of Facebook’s most loved products including stories, communities and watch. The city of Lagos is the next city on the list of Facebook’s pop-up global tour which has seen similar events hosted across Dublin, Cologne and Dubai. Commenting on the two-day event, Kezia An-

im-Addo, Communications Manager for Sub-Saharan Africa said: “We’re thrilled to be here in Lagos, the first African country in our It’s Your Facebook tour. We look forward to welcoming Lagosians to our pop-up space.” Also available will be drop-in sessions for the public to come down and get advice on their most burning Facebook related questions – whether around protecting their information on Facebook, or getting practical advice on everything from personalising newsfeed, to security settings or setting up business pages. The pop-up space at African Artists’ Foundation in Victoria Island Lagos was opened to the public on Friday, April 12 and Saturday, April 13 between 09.30am – 12.45pm, attendees were required

different and its critical that a solution that caters for that unique business challenge is deployed,” Graham added. Guy Rabinovich, general manager, technology and innovation, Dizengoff Nigeria, who also spoke at the event said; “Nigeria is a rapidly growing market with very huge potentials. With increasing internet penetration in the economy and expansion in users of mobile devices connect-

ing to Wi-Fi, organisations and ISPs are under pressure more than ever before to invest in technologies that are able to deliver more positive experiences.” “However, choosing the most suitable Wi-Fi technologies to deploy in different environments require organizations to be able to identify the right technologies that can better deliver solutions that create the best experiences for their users,” Rabinovich said.

Identifying the peculiarities of different markets and their needs, the experts indicated that Ruckus has different options for diverse markets and challenges particular to them. However, the uniqueness of the Ruckus technology offering enables its customers to save cost on their networking needs based on its ability to cover large areas. Ruckus Networks says it is redefining connectivity by bridging the digital divide and connecting people around the world. The company offers a complete line of high-performance network access infrastructure. Its product portfolio includes Wi-Fi controllers, indoor and outdoor access points, wired Ethernet switches, an IoT suite and private LTE (CBRS). It also offers network security, detailed analytics, open APIs and management software, along with professional services and support. Ruckus continuously innovate across both wireless and wired technologies to meet the evolving needs of the enterprise and service providers by enabling network convergence at the edge. Dizengoff is a member of the Balton CP Group - a distributor of Ruckus Networks in Nigeria.

StarTimes rewards customer loyalty in Easter promo ODINAKA ANUDU

to register beforehand to secure their space at the Drop-in Sessions. A number of training sessions took place at the ‘It’s your Facebook’ popup, in partnership with Facebook’s local raining partners including Afrinolly, Re:Learn and the Facebook Community Leadership Circle Lagos. This included free sessions focused on SMBs and building online businesses, building engaging communities, youth safety online and dedicated workshops for creatives. Speaking at the unveil event, Kezia Anim-Addo, said: “ ‘It’s Your Facebook’ pop-up experience further highlights our commitment to supporting and investing in communities here in Nigeria. We are thrilled to welcome people through our doors this weekend.”


tarTimes has continued to show strength, devising measures to have a larger share of the market through rewards to loyal customers. In the spirit of the Easter celebration, the pay TV company is offering an upgrade on all its bouquets for subscribers starting from April 1 to May 15. The promo gives customers the opportunity to pay for subscription package on Nova, Basic, Smart and Classic bouquets and get an instant upgrade to view a higher bouquet within hours of activation. According to the company, the purpose of the promo is to allow its subscribers enjoy the Easter holiday with access to an array of channels on a higher bouquet than they normally watch and unlim-

ited entertainment at a very little cost. Explaining further, Kunmi Balogun, company’s public relations manager, said: “When you pay N1,800 for two months on Nova bouquet you get to enjoy all Basic bouquet channels for 2 months. Subscribers who pay N2,600 for two months on the Basic bouquet will enjoy all Classic bouquet channels for two months and customers who pay N2,850 for one month and half on the Classic bouquet would enjoy two months’subscription.” He said, “Subscribers who use the dish platform would pay just N2,850 to watch the Smart bouquet for two months while paying for one and half months on the Super bouquet gives you two extra weeks at no cost.” He enjoined subscribers to take advantage of the promo, noting that this was an opportunity to @Businessdayng

watch more channels on a higher bouquet for less of what it would originally cost. Meanwhile StarTimes has continued its expansion drive as it recently unveiled the newest generation of television set, StarTimes Smart TV. Recall that Chinese president Xi Jinping recently promised that China would implement access to satellite TV for 10,000 villages across Africa. Out of the 10,000 villages, Nigeria was given 1,000 and StarTimes has been handed the contract for this project, not just for Nigeria but also across the continent. Just recently too, the management of StarTimes Nigeria reduced the price of its highest bouquet price, a development likely to further boost the relationship between the brand and patrons of Pay TV in the country.

Tuesday 16 April 2019



Markets + Finance

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

Stanbic IBTC Holdings Plc:Excellent risk management strategy pays off as NPLs Improve BALA AUGIE


tanbic IBTC Holdings Plc just released its 2018 audited financial statement that showed there were improvements in key ratios. The lender has maintained its position as the bank with the strongest return on equity (ROE) in the industry, a stellar performance that shows management and board of directors have deployed the resources of owners in generating higher profit. Little wonder its price to book was trading at 2.10 times as at April 12, this compares to Guaranty Trust Bank (GTBank) 1.83 times, Zenith Bank,0.78 times; Access Bank , 0.31 times, and United Bank for Africa (UBA), 0.45 times. This means equity investors are paying more for each Naira in Stanbic IBTC’s net assets than its peers, which is why its shares have been appreciating on the floor of the bourse. Stanbic IBTC has an excellent risk management strategy as its Non Performing Loans (NPLs) of 3.90 percent as at December 2018 is not only lower than the 5 percent threshold, it is the lowest in five years. The Bank has N3.22 trillion assets under management (AuM) while assets under custody (AuM) stood at N4.89 trillion, and its retirement savings accounts hit 1.69 million as at December 2018. Stanbic IBTC Holdings continues to drive digital transactions as customers become more comfortable using its alternative channels as reflected in the 24 percent growth in Digital transactions between the first and last quarter (Q1&Q4) and 4.5 percent drop in branch transactions between Q1&Q4. Steady Growth in Gross Earnings amid declining yield environment Gross earnings increased by 4.98 percent to N222.36 billion in December 2018 from N212.43 billion in December 2017; the growth in revenue was largely driven by an uptick in noninterest revenue.

Yinka Sanni, chief executive officer of Stanbic IBTC Holdings

However, net interest income was down by 6 peercent as interest income declined by 4 percent to N118.4billionin December 2018 from N122.90 billion as at December 2017, largely due to declining interest rate environment and asset pricing. Noninterest revenue was up 15.05 percent to N102.60 billion in the period under review from N89.18 billion as at December 2017. The growth in interest income was largely driven by an 18.15 percent and 7.2 percent increase in fees and commission income and other income to N69.84 billion and N31.31 billion in December 2018 from N59.08 billion and N29.14 billion in December 2017. Stanbic IBTC said that asset management, custody, brokerage and capital market businesses witnessed improved business patronage which

contributed to the growth in non-interest revenue. Strong growth in profit despite increased operating expenses Stanbic IBTC Holdings profit before tax increased by 44.12 percent to N88.15 billion in the period under review from N61.16 billion the previous year. Profit after tax followed the same growth trajectory as it surged by 53.86 percent to N74.44 billion in the period under review from N48.38 billion as at December 2017. The growth in profit is coming amid rising operating expenses. Total Operating expenses were up 11.11 percent to N95.60 billion in the period under review from N86.0 billion the previous year. A breakdown of total expense figure showed staff cost was up 19 percent to N43.02 billion in the period under review due to one-time adjustment to staff salaries to cushion the effect of currency devaluation and inflation. Other operating expenses increased by 5.67 percent to N49.74 billion due to growths in information technology cost, Asset Management Charge of Nigeria and charges and deposit insurance premium customer deposits. As a result of growth in operating expenses, cost to income ratio increased to 52.90 percent in the period under review from 49.80 percent in the previous year. Good asset quality validates risk management strategy Stanbic IBTC excellent risk management strategy paid off as Non Performing Loans (NPLs) fell to 3.90 percent in December 2018 from 8.90 percent the previous year. Impairment on financial assets improved by over 100 percent from N25.6 billion charges in full year 2017 due to a write back of N2.9 billion in full years of 2018, thanks to recovery efforts and strategy. Total loans and advances to customers were up 15.60 percent to N441.25 billion in December

2018 from N381.70 billion as at December 2017; the growth in loans shows the Bank has a voracious appetite for lending as the economy improves. Stanbic IBTC’s total asset increased by 20.28 percent to N1.66 trillion in the period under review as against N1.38 trillion the previous year while total equity was up 29.40 percent to N239.67 billion in the period under review from N185.21 billion as at December 2017. Improvement in Key profitability ratio Stanbic IBTC’s return on equity (ROE) increased to 34.50 percent in December 2018 from 28.90 percent the previous year, thanks to consistent growth in profit. Return on asset followed the same growth trajectory as it moved to 4.80 percent in the period under review from 3.80 percent as at December 2017, thanks to asset utilization. About Stanbic IBTC Holdings Stanbic IBTC Holdings PLC (“Stanbic IBTC”) was incorporated as a Public Limited Liability Company on 14 March 2012. Stanbic IBTC is the holding company for the entire Stanbic IBTC Group and its subsidiaries. The Company was listed on the Floor of The Nigerian Stock Exchange on 23 November 2012, following the delisting of the Group’s erstwhile holding company, Stanbic IBTC Bank PLC (“the Bank”), pursuant to its compliance with the CBN Regulation on Banking and Ancillary Matters No. 3 of 2010. The Bank on the other hand, was incorporated as Investment Banking and Trust Company Limited (“IBTC”), a private limited liability company, on 2 February 1989. IBTC was granted a merchant banking licence in February 1989 and commenced operations on 1 March 1989. IBTC’s merchant banking licence was converted to a universal banking licence in January 2002, pursuant to the universal banking guidelines of the Central Bank of Nigeria (“CBN”). In 2005, IBTC became a public company and its shares were listed on The Nigerian Stock Exchange (“The NSE” or “The Exchange”).




Tuesday 16 April 2019


INTERVIEW ‘When Nigeria’s energy mix is developed and efficiently utilised, we will have energy security’

DEBO FAGBAMI is the Chairman, Society of Petroleum Engineer (SPE), Nigeria Council, and also Chief Operating Officer at Xenergi Limited. In this interview with FRANK UZUEGBUNAM, Fagbami talks about development of Nigeria’s energy sector in 2019, impact of renewables in Africa, energy security in the country, amongst other issues. Excerpts: What are your expectations for the development of Nigeria’s energy sector in 2019? he year 2019 comes on the back of two years of relative stability and progress in the energy sector. This comes against the backdrop of positive reforms in the power sector since the return to civil rule in 1999. There was an increase in daily crude oil production in 2018 from 2017 levels and a corresponding increase in revenue across the same period. The passage into law of the PIGB (a sub-set of the PIB) though awaiting Presidential sign-off, is expected to create a more efficient and effective working environment within the industry with separation of roles to create a more commercially driven and business-oriented national oil entity. This would in turn promote accountability and transparency across the entire value chain, thus, creating the right environment for oil and gas operations and investments. Having said this, the delayed Presidential sign-off of the PIGB into law is raising doubts amongst investors who may begin to look outside Nigeria and into the emerging markets in other parts of the continent. Another developmental driver in Nigeria’s energy sector is the flare gas regulation that was gazetted into law under the National Flare Gas Commercialization Program (NGFCP). Under the NGFCP, the federal government is able to take ownership of all flare points free of cost and pulled into a basket for interested parties to bid competitively. This regulation would eliminate gas flares and any identified flare points post implementation would be subject to severe tax penalties on the part of successful bidders. Projects that would evolve out of the NGFCP would also further increase the energy resource base of the country with attendant job creation across the entire value chain and lead to acquisition of new skill set and/or skills conversion in certain cases. Overall, the energy sector in 2019 is geared towards positive growth and development, buoyed by the impending kick off of the PIGB as well as other innovative regulations and reforms to stimulate economic activity. How do you see renewables impacting Africa’s power scenario in the next 10-15 years? First, the global shift to renewable sources of energy is bound to have a ripple effect on Africa. The cumulative power generation of sub-Saharan Africa currently stands at 40 GW if you exclude South Africa and according to IEA, to meet Africa’s energy needs would require a yearly spend of close to $50b. The implication of this is that African countries, particularly the new kids on the block would need to invest a significant portion of their windfall from oil sales into power generation, transmission and distribution projects. Renewables would have a significant role to play in power generation, although it is important to recognize that though the developmental costs of renewable energy projects have dropped due to advancements in research and technology, the costs remain high in comparative


Debo Fagbami

terms to fossil fuels particularly for African countries. Power projects in Africa are infamous for taking a long time to go from planning to completion. How do think operators and investors should cope with these issues and how can governments mitigate these problems? The key to ensuring the successful execution of power projects lies in formulating the right policy framework (fiscal and legal) to encourage investments and drive sustainable activity in that sector. The value chain must be set up in such a way as to deliver affordable and sustained power to the last mile consumers while allowing operators to recover their investment, thus, creating a viable commercial ecosystem for all stakeholders including government. Governments of African countries need to create an enabling environment free of severe risk to investors so as to stimulate activity and grow the sector exponentially. The Nigerian model of having a bulk electricity purchaser provides a platform for operators to sell and deliver power directly to the grid thus ensuring security of power offtake on a grand scale. How are greater environmental awareness and tighter regulations resulting in gas comprising a greater proportion of the energy mix in Nigeria? Regulation and/or legislation has not created the desired impact in developing gas as a key portion of the energy mix in Nigeria. The government’s driver for enforcing the development of gas has always been linked to the negative impact of gas flaring on the environment and from these we have had a succession of gas flare-out directives and legislations that have had little or no impact in changing the status quo.

I would say that the recent initiative from Nigeria’s Honorable Minister of Petroleum Resources via the National Gas Flare-out and Commercialization Program (NGFCP) has been by far the most encouraging and stimulating program to drive gas development projects on a sustainable economic basis. The NGFCP is linked to an economic driver which allows for the transparent commercial bidding for all unutilized gas flares by interested parties who are able to demonstrate prior experience and capability in developing gas projects either alone, in alliance or consortium basis. Energy poverty remains a serious obstacle to economic and human development in the country. Do you see a disconnect policies? Policy drives socio-economic development and its sustainability is largely dependent on formulation of the right policies to allow for efficient business operations. Citizens of all nations as well as businesses require access to reliable energy at affordable prices on a sustainable basis with minimal risk and supply interruptions. From this standpoint, Nigeria remains in a situation of serious energy deficit and the key to unlocking the power potential of a country blessed with an abundance of the resources required to deliver on its power needs is hinged on policies that would sufficiently drive investments and enforce transparency, accountability and sound management of its resource base. Why is local content regulation necessary? What is your definition of a fair and effective local content policy? First, I must draw a distinction between Nigerian Content and Local Content to put things in the proper perspective. Nigerian Content is the quantum of composite value added to or created in the Nigerian economy through a targeted utilisation of Nigerian human and material resources, while Local Content is adding and/or creating value in the Nigerian economy through a deliberate use of Nigerian entrepreneurship in a similar context. This distinction points to the fact that without indigenous players or entrepreneurs, there is no local content. Nigerian content requirements can be met by non-Nigerian entities but this is not the case with local content. A fair and effective local content policy must thus take into cognizance the need to grow indigenous capacity particularly in the area of provision of services to the oil and gas industry. There has been an active drive by Nigerian entrepreneurs to promote local content, with the Petroleum Technology Association of Nigeria (PETAN) taking an active lead in this regard. On its own part, government, through the Nigerian Content Monitoring and Development Board (NCDMB) must create a framework to integrate government policy with the technology needs of the industry, identify competent Nigerian entities with sufficient capacity to take the drivers’ seat while ensuring effective monitoring and compliance by oil and gas operators to ensure that this process is not circumvented or undermined.

Please give us an overview of SPE’s presence in Nigeria? SPE started in Nigeria as the Lagos Section in 1973 and since then it has evolved into 5 Sections or geographic clusters – Abuja, Benin, Lagos, Port Harcourt and Warri. These 5 Sections cover a total of 34 Student Chapters which include mainly Universities and Polytechnics with Petroleum Engineering as part of their curriculum. The member count in Nigeria currently stands in excess of 11,000 members and students with membership open to all professionals engaged in energy resources development and production. Our activities in Nigeria include our traditional flagship programs for students, young professionals and other professionals, development programs like short courses, monthly technical meetings and distinguished lecture series. Finally, there are a variety of young member development programs targeted at Universities, Secondary Schools and Primary School students to aid their developmental flair for science, technology, engineering and mathematics


The government’s driver for enforcing the development of gas has always been linked to the negative impact of gas flaring on the environment and from these we have had a succession of gas flare-out directives and legislations that have had little or no impact in changing the status quo (STEM) subjects. What are your expectations for the SPE #OLEF2019 and how can it foster the growth of Nigeria’s energy economy? The objective of SPE’s Oloibiri Lecture and Energy Forum (OLEF) 2019 is to stimulate discussions on how Nigeria’s energy sector can move forward along a path to sustainability. Through OLEF, SPE is providing the platform for government, regulatory agencies, captains of industry, and practitioners at all levels to sit together to discuss and come up with ways Nigeria can develop energy that has little or no carbon footprint, develop efficient systems that require lesser energy to run and on how we can use Nigeria’s oil and gas resources to support the nation’s economic growth for the benefit of all stakeholders. We believe that when Nigeria’s energy mix is developed and efficiently utilised, we will have energy security, green jobs, greater national wealth for the people and foster sustainable growth and development in Nigeria.



Tuesday 16 April 2019



Oando, FirstBank, others receive recognition at PEBEC awards DIPO OLADEHINDE


ice President Yemi Osibanjo on Wednesday, April 3, presented a special recognition award to Oando alongside other private sector companies at the recently concluded Presidential Enabling Business Environment Council (PEBEC) awards ceremony held at the State House Banquet Hall in Abuja, for their support of the PEBEC initiative. The event marked the second annual PEBEC awards ceremony. PEBEC was set up in July 2016 by President Muhammadu Buhari to remove critical bottlenecks and constraints to doing business in the country, and drive reforms to make Nigeria a progressively easier place to do business. The Council is an inter-governmental and inter-ministerial one that is chaired by Vice President Osinbajo, and comprises 10 ministers, the Head of the Civil Service of the Federation, the governor of the Central Bank of Nigeria, representatives from Lagos, Kano State governments, the National Assembly and the private sector. As of July 2016, Nigeria didn’t rank highly on the World Bank Doing Business Index (DBI), at position 169 out of 190 countries. However, following implementation of the over 140 reforms on ease of doing business, the country moved up the ladder by 23 places to position 146 in the World Bank’s 2019 Doing Business Index (DBI) ranking, four places above the PEBEC target for 2018. The report, which was released on October 31, 2018, made this ranking following the as-

sessment of 190 countries in the 2017/2018-reform year. The Doing Business Index (DBI) is an annual ranking that objectively assesses prevailing business climate conditions across 190 countries based on 10 ease of doing business indicators. The Index captures ease of doing business reforms that have been validated by the organized private sector, and offers comparative insights based on private sector endorsement in the two largest commercial cities in countries with a population higher than 100 million; for Nigeria the two commercial cities were Lagos and Kano. Some of the successful reforms include, the ability to complete the registration of a company within 24 hours online; the ability to apply for and receive approval of a visaon-arrival electronically within 48 hours; ability to file and pay taxes online amongst others. The awards ceremony recognised MDAs and sub-nationals that implemented impactful and landmark reforms in 2018; as well as key members of the private sector who particularly contributed to driving PEBEC’s overall reform initiatives. In the “World Bank 2018 Subnational Ranking Award” category which considers how well State Government laws and regulations are designed for efficiency, transparency, accessibility, enforceability in courts and easy implementation, Kaduna, Enugu, Lagos, Abia and Anambra were recognised as the top five most reformed states in Nigeria for advancing the most towards the frontier of global good practices.

Shaibu advocates more budgetary allocation for military ...assures of Edo’s support for late David Ejoor’s funeral


do State acting governor, Philip Shaibu, has called for more budgetary allocation for the Nigerian military to enable it effectively combat the security challenges confronting the country. The acting governor made the submission during a courtesy visit by the Chief of Army Staff, Yusuf Buratai, to the Government House, in Benin City, on Monday. He noted that the Nigerian Army had restored hope to Nigerians as a result of their role in sustaining peace and stability in the country, noting that their effort had contributed immensely to the peace enjoyed across the South-South. “Thank you for what you have done in the North-East and we also appreciate you for the peace in the South-South. “Your leadership has ensured a cordial relationship between the Army and civilians. You have reinforced the rules of engagement in our system and it has given us a good image in the international community,” he said. On budgetary provision for the Army, the acting governor urged members of the National Assembly to increase funding for the military to enable them discharge their duties effectively.

“Edo State government joins in the appeal to members of the National Assembly to increase the military budget so they can effectively deal with the security issues confronting the country,” he noted. He assured that the state government would contribute to ensuring a successful burial ceremony for late General David Ejoor, who served as the sole administrator of old Bendel State (now Edo and Delta states). Chief of Army Staff, Buratai, said he was on a visit to the state to deliver an inaugural lecture at the Centre for Security Affairs, in Igbinedion University, Okada. He said he would also pay a condolence visit to the family of late Gen. David Ejoor, who served as Chief of Staff, Nigerian Army, between January 1971 to January 1975, adding, “The loss of late Gen. Ejoor is a sad moment not only for Edo and Delta states or the Army but for Nigeria. We request the full participation of the Edo State Government to ensure a successful burial.” Buratai noted that he will use the opportunity to tour some military formations and units in the South-South region to review their general administration and operational capabilities.

Meka Olowola, managing partner, Zenera Consulting (m), welcomes Godman Akinlabi, lead pastor, The Elevation Church (l), and Segun Adebutu, chairman, Petrolex Oil and Gas Limited (r), during a reception held in honour of Bekeme Olowola on her appointment to the board of the Global Reporting Initiative, Amsterdam, recently.

Senate moves to pass new PIGB, reduces revenue generated by PRC from 10 to 5% … insists on single regulator for oil, gas sector OWEDE AGBAJILEKE, Abuja


ith less than two months to the end of the eighth National Assembly, the Senate has not foreclosed the approval of the muchawaited Petroleum Industry Governance Bill (PIGB). In what appears a last minute effort to ensure the bill, which holds so much for the nation’s oil sector, is passed before the end of the eighth National Assembly in June, the Senate said it would reduce revenue generated by the Petroleum Regulatory Commission (PRC) from 10 percent to 5 percent in the new PIGB and immediately pass and transmit to President Muhammadu Buhari for assent. Nigeria is reported to be losing over N3 trillion annually for failing to put in place a proper legislation for the oil and gas industry. The Senate had last Wednesday adopted the report of the Technical Committee on Declined Assents to Bills. The PIGB is one of the

37 bills passed by the National Assembly but rejected by the President. The report, however, disagreed with President Muhammadu Buhari by insisting on a single regulator for the oil and gas industry. In August 2018, President Buhari had withheld his assent from the PIGB because of ‘legal and constitutional reasons’. Spe cifically, he kicke d against the provision of the bill permitting the regulatory commission to retain as much as 10 percent of the revenue generated and expanding the functions of the Petroleum Equalisation Fund (PEF). But in a 34-page report seen by BusinessDay, the David Umaru-led panel agreed with the President’s submission that the percentage to the Commission was too high. “On Mr President’s observation in paragraph (a), the Committee is of the view that retention of 10% revenue generated by the Commission is quite high in view of the fact that in addition to the percentage to be retained, the Commission is

also entitled to annual budgetary allocations. Therefore, the Technical Committee hereby proposes 5% instead of the proposed 10% in the Bill. “On observation in paragraph (b), it is our concerted view that Petroleum Equalisation Fund (PEF), which was introduced in Part IV of this Bill is inappropriate as PEF itself is primarily established to handle ad-hoc assignments designed for a specific matter and for a specific period of time. As such, it should not form part of the legal structure of the Commission. Therefore, it should be expunged from the Bill. It is also important to note that PEF cannot exist under the deregulation policy of this administration,” the report reads. On Mr President’s observation opposing the establishment of a single regulator for the upstream, midstream and downstream sectors, the Technical Committee, however, insists that this was the way to go. “A single regulator will reduce bureaucracy and increase efficiency in the system. This is also in consonance with trans-

parency guidelines, which this new regime will key into, with the passage of this Bill,” the report adds. Speaking after the document was adopted last Wednesday, Senate president, Bukola Saraki, assured that the Senate would expedite action within the remaining period of the eighth Senate to reconsider, pass and transmit the bill to the President for assent. However, with less than two months to the end of the current National Assembly, it remains to be seen if the Legislature will match words with action. The PIGB is a fraction of a more comprehensive Petroleum Industry Bill (PIB), one of the longest standing bills in the National Assembly. It was first introduced into the National Assembly in 2008 as an executive bill by then president, Umar Yar’Adua. The sixth National Assembly (2007 – 2011) failed to pass the bill. It was re-introduced into the National Assembly in 2012 by former President Goodluck Jonathan.

tried internally, but would also face criminal prosecution in the convention court of law, as extra-judicial killing runs contrary to the ethics of the police force. He said available record showed that police officers in Lagos had performed creditably but the activities of few unscrupulous ones had dented the good work of others. “We are to serve members of the public; we are not their masters, we are their servants. The officers and men in Lagos State have been doing a lot of good job in fighting crime and they have been succeeding, but the acts of few officers are denting the good works that others have done. “Recently, we have had

some overzealous officers who went out of their way in the course of performing their duties; they shot a lady and she died and we felt that that is not acceptable, it is unbecoming and I had to come down to talk to officers and men to remind them of their duties and to tell them that anybody that go out of his way to commit extrajudicial killing, such a person is on his own and he has to face the wrath of the law and in this particular case, the officers that were involved have been arrested; they have been tried in our internal way of dealing with such issue and at the same time, they would be charged to court,” he said. He also commended Ambode’s continued support to

the police and other security agencies in Lagos, saying the successes recorded in keeping the state safe would not had been possible without the support of the governor. Ambode on his part commended the IGP for promptly addressing the extra-judicial killings in the state despite his responsibilities across the country, saying it showed responsiveness and seriousness with which the issue was being handled by the police chief. “I want to commend the IGP for this visit. Beyond the fact that this is a courtesy visit and like he has said, he is coming promptly to address the issue of extra-judicial killings that have actually taken place in the last few weeks.”

Lagos extra-judicial killings: IGP pledges officers to face prosecution JOSHUA BASSEY


nspector General of Police (IGP), Adamu Mohammed, says all officers of the Nigeria Police Force (NPF) found culpable in all of the extrajudicial killings recorded in Lagos in recent times will face prosecution. Mohammed was in Lagos on Monday and took time off to visit the State House, where he met with Governor Akinwunmi Ambode, and held discussions over spate of extra-judicial killings in the state by operatives of the Lagos Police Command. The police chief, who was accompanied by top ranking officers, said the affected officers had been arrested and


Tuesday 16 April 2019



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

Continued from Monday

Chapter IV The Complicit Middle


ost of the giving of Nigerian business to matters of nation-building and a better Nigeria is, unfortunately calculated. They contribute to both sides of a political campaign giving more to those they think will win even if those are more likely to cripple the environment of business. They feign neutrality when the kind of idea Okoloko suggested for post 2019 elections gets raised and when good aspirants come to them for support, they hide behind a nice cliché “we have a policy to support only those who have secured nomination.” Indeed, they say so, knowing that few good candidates will secure nomination without some financial support. So, the a dvance fee fraudsters and drug addicts mobilise their resources and acquire the nomination and they come forward to fund them. It is a measure of their lack of generosity towards the common good that they do not grudge-give or shame-give from their fortunes – even two or three million naira to the good aspirant. This is an amount that that probably will not make an iota of difference to them, but they have managed to tell the cock and bull story of waiting for the result of primaries before they move forward, and thus, depriving them of much needed support. Nothing better defines the selfcentred and wrong-headed private sector disposition of how it perceives risk in dealing with truth and national progress than the question of commercial support for Patito’s Gang. The concept was, from beginning, aimed at speaking truth through uncensored passionate expression of viewpoints from several perspectives. Several private sector leaders expressed admiration for what Patito’s Gang was doing to elevate the public sphere, bringing vigour to discussions on public policy. Many of the discussions affected business and helped to grow the culture of entrepreneurship in Nigeria. Yet remarkably, it did not strike these businessmen desiring to look good, that by avoiding truth being told to government that they were shooting themselves in the foot. The few who advertised were from agencies led by people of conviction. They were Bureau of Public Enterprise (BPE) under Nasir El-Rufai, Nigerian Communications Commission (NCC) under Ernest Ndukwe and Nigeria Ports Authority (NPA) under Bello Gwandu. More curious was the fact that private commercial ventures on whose Boards I sat, and who felt it a point of duty to support, did so but the others

did not seem to notice that no harm came to them from their support. The only thing they seemed to have to fear was the self-inflicted fear. And that, it seemed to me, was the antithesis of the entrepreneur which these business friends were supposed to be. I still draw strength, till date, from the fact that industry notables told me in 2000 that I could not sustain the production of Patito’s Gang. In 2002, it cost me about $23,000,000 (twenty-three million US dollars) to produce and air it on all the major television networks in Nigeria. This money was largely from what I earned deploying other talents to service my private sector friends who wanted the safety of neutrality, in spite of its prideful place in the hell of Dante’s inferno. A successful institutional advertising project for Nigeria Breweries titled Leadership Reflections would be the source of revenues that kept it on air that year. My limited regard for those who wear, this fear of reprisal from power, on their chest like a badge of honour, should be understood. Religious Leaders and a Flock Marooned If the business stakeholders of project Nigeria have been less than diligent in advancing the cause of the citizen, the religious leaders have continually sent confusing signals. Only a few of those who have acquired power and used it to plunder rather than advance the common good have gotten there without having at some point knelt before some religious leaders. The question now is: why don’t these religious leaders use


Indeed, they say so, knowing that few good candidates will secure nomination without some financial support

this influence to hold them to account for their stewardships? Obviously, the blame is not a onesize fits all. Some men of the clothe are more the types that power hunters turn to rather than others. Some make significant material profits from ‘praying for politicians.’ One story told to me by APC Chairman Adams Oshiomole, is of a Pastor in Benin that prays for politicians and the millions of dollars’ politicians from Delta State. These politicians have been known to pay to him for keeping them before the throne room of anointing, some incredible amounts in US Dollars. So how does such a pastor get the said politician to be accountable if he abused public trust? The case of the religious leaders in Nigeria and the depressed conditions of human existence is particularly peculiar. This is because the religious leader is often the closest to feeling the pain of the people. We have seen this passion of religious leaders push them to the edge as the case of liberation theology in Latin America where priests took up arms against oppressive governments.

96 In less violent forms, faith leaders like Jaime Cardinal Sin in the Philippines, inspired the lay faithful, especially women to take to the streets with their rosary beads and candles. The President at the time, the dictator Ferdinand Marcos, ordered the army out on the nonviolent women. At a point, the general commanding the army, Fidel Ramos, turned his tanks around from the women to the Presidential Palace and that brought an end to the Marcos era. In Ukraine, which was observing the colour revolution of Eastern Europe; a Nigerian pastor, Sunday Adelaja of the Embassy of the Blessed Kingdom of God for All Nations, a mega church in Kiev, played a prominent role in the Orange Revolution. Gatherings at his church have been credited with being the arrowhead of the revolution. Yet misery continues to thrive in Nigeria as politicians line their pockets, whilst legal and illegal religious leaders seem sedated as they watch their congregations live in abject poverty. The Facebook Army The number of Nigerians active on Facebook is



stunning for the presumptions about internet penetrated and the challenge of the digital divide. According to Chukwuemeka Afigbo, manager of the development programme at Facebook, 26 million Nigerians (as at May 2018) now log on to Facebook every month. The jump from 16 million people in 2016 to 26 million people within two years is attributed to the spread of smartphones. But what do these people do on Facebook, Twitter, Instagram etc? Most of the time they are expressing anger. Sadly, that anger has not been properly marshalled to bring about positive change. It would seem that many of the savvier internet users who gained prominence were now in a rush to be accepted by the establishment. They then quickly aligned with certain governors, some of who were cultists. More progress would be made if the leadership material among the Facebook army organise, mobilise and deploy both the technology and the youthful energies of many on social media platforms to educate the rest in favour of action. These should include physical and virtual protests to sanction impunity, enthrone the rule of law and build a society whose values point it towards sustainable human progress. The Media and Civil Society StakeholderSometimes it seems that so much is expected of the media. In the middle of the Gideon Project to rescue Delta State, I took out time to give a lecture at the University of Nigeria, Nsukka, on the subject. That excursion was an advance portion of this section and I reproduce it now in full. These are interesting times in Nigeria. In many ways, they are troubling times. But if history teaches anything, it is that trouble can become opportunity. The apparent threat to human progress by extant reality in Nigeria could be the point of surge for progress, or if inappropriately handled the curvature from which we either tip into a Jared Diamond type Collapse or Robert Kaplan predicted anarchy. Given the multifaceted nature the challenges confronting nationbuilding and economic development in Nigeria, both being effort at explication of the nature of the crisis and paths to solution, must be multidisciplinary. I am fortunate, therefore, that I came to the issue with a multidisciplinary academic tooling, beginning at UNN with mass communication and then spreading to policy economics, political science and business administration. I have in fact found that I have followed enough economic historians that I now find myself being referred to as

Tuesday 16 April 2019



BOOK SERIALISATION a historian. In many ways though, a good mass communication person needs to be a bit of all of those, and much more. These will facilitate the meaning that value is to be transmitted from its source to the receivers of what we push through the channels that are infected by all kinds of physical and semantic noises that impact the fidelity of the message. Besides, the superior logic of a multidisciplinary approach to reflecting on the media’s role in assessing and shaping development draws us to that approach. Much of what was media and society research, was led by scholars from other disciplines. When Ithiel de Sola Pool died of cancer at the age of 66, in 1984, I related with the much-celebrated MIT political scientist, at that time, with a PhD in political science. I first encountered this author of the 1973 “Handbook of Communication” as an undergraduate in mass communication in UNN, after the return of Ralph Chude Okonkwor inspired a select number of my classmates such as Ike Emeagwali, Isah Momoh and I to take an interest in media and society research. Indeed, it is worthy of mention here that my first two publications, which were in a refereed European academic journal, within two years of my leaving UNN, started their journey from the library of the Jackson School. The piece “Historical-Philosophical Foundations of Media Ownership in Nigeria” whose first draft was written in my final year, here at UNN, was of a multidisciplinary conception, drawing from my interest in history, political science and public administration, in addition to media studies. I am pleased therefore to turn, today, to structural economics, international political economy, institutional economics, history and comparative politics to suggest how the media may shape the agenda that could determine whether Nigeria claims the promise of the dawn of selfgovernment or tip over into anarchy. We shall turn next to the state of the economy and the process of media influence to establish the context of the dilemma of progress in Nigeria. What is the Current State of the Economy? An incredible test of the current state of things is how citizens vote with their feet. There is an exodus from Nigeria at the bottom and the middle levels of society. The statistics of the upper middle class, well educated, well paid managers and executives emigrating to Canada almost mimics the sense of scramble off a sinking ship. Why are IBTC managers, former bank MDs abandoning Nigeria even at middle age? At the bottom, we are regaled daily by images of Nigerians being repatriated from Libya after going through a tortuous time crossing the desert and tasting of slavery in the process. This is even far less gory than images of drowning and dead bodies being scooped from the Mediterranean. The perception that things are not just bad but are likely to get worse keeps driving these choices. I have numerous anecdotal personal encounters, from a couple in the New York subway last September to that which led to my op-ed piece “The generation that left town.”


That can damage the incentive structure of society that is at the core of the production of goods and services

Should a country endowed so generously be the domain of such economic underperformance? Why are nations poor? How do rising expectations and global media impact the sense of self-worth in a country managed such that it is performing way below potential? It leaves its people dispirited, destitute and easy recruits for terrorism, insurgency and criminal gangs that are involved in armed robbery, kidnapping and political thuggery. In 1996, I wrote the book, Why Nations are Poor and several years later even dared to suggest in another book that Nigeria acts as if it desires to be poor, despite the abundance of the resources – human and material – that could make her a very wealthy country. Mass Media Society Theory and Media Influence If the foregoing be the state of the human condition in Nigeria, largely captured from political economy perspectives, how can media be used to influence the course Nigeria could travel in the face of these realities? More importantly, how can journalism or mass communication be taught here in a way that may affect those who move from the den to the arena of praxies and can have impact that could orient the path of history. I would like to open this section of the discussion with two caveats that provide some insight into my view of the essence of the university and its influence; and my view of how history aids explanation of social phenomena. About 18 years ago, I returned to the green hills of Nsukka as speaker to give one of the lectures to mark 40 years of the University of Nigeria. Back then Karl Maier’s book: This House has Fallen – Midnight in Nigeria had just been published. A few years earlier, I had also responded to a request from the Enugu campus to share the podium with Justice Chukwudifu Oputa to speak on the idea of a university, revisiting John Henry Cardinal Newman and the mission of the university. I drew from Maier’s charge and my summation of Newman to title that lecture “The Falling Walls of Nigeria and the Nehemiah Syndrome” suggesting there that part of the purpose of the university is to equip its graduates to go out there, like the prophet Nehemiah and rebuild the fallen walls of society. I still hold that perspective as my urging of an understanding of media theory is to

show how graduates can take advantage of such knowledge to build the walls of progress in a Nigeria whose walls are fallen in most places and still falling in others. The second caveat draws from the indelible mark left on me as a graduate student in the late 1970s by the great sociologist, C Wright Mills. His point, in the sociologicalimagination that history essentially comes alive at the nexus of the grand flow of statistics and the personal trouble of individuals, defines how I read history. As those who write the first draft of history – journalists, take on their task, a robust sociological imagination is needed and only multidisciplinary preparation could make that possible. Also, key to effectiveness would be understanding the path of media Influence. So, what are those linkages between phenomena that denote whether or how and when the media has influence on society? Incidentally, my classmate and friend, Isah Momoh has done a nice job of compiling and explaining the dominant theories of communication which include the theories of media influence, in his books: A survey of Communication Theories, and An Introduction to Media and Communication. For my purpose here, the question is, does the media have enough influence to affect the choices we make, as a country, through our institutions and through individual action to advance the course of nation-building and economic development? The history of media influence research suggests that the media does have influence, which means that influence can be deployed into building Nehemiahs. It is the nature of that influence that has been in question. A better understanding of the nature of this influence should facilitate how it is deployed. Media Influence Early in the twentieth century, it was taken for granted that powerful newspapers had direct and powerful influence on their readers. The general thesis that captured the phenomenon was likened to how a hypodermic needle delivered medicine in an injection. But the veracity of such views was challenged by occasions of powerful newspapers like the New York Times endorsing candidates for elections in New York and the voters, their readers, voting for the other candidate. This influenced research which resulted in new questions being posed. The outcome of the studies was to suggest that the opinions formed and choices we make were the outcome of opinion leaders modulating the information received from the media. Communication, it seemed, was in two steps from media through opinion leaders to the people. Paul Lazars Feld, Bernard Berelson and Hazel Gaudet offered the two-step flow thesis in the 1944 book: The People’s Choice. Later studies would establish that the modulation of flow could be more than one point and that opinion leader impact could actually be a multistep flow. These points remain germane today. How did the US media not see the victory of Donald Trump in November 2016? Some had even in their files covered stories about America’s first

female president, Hillary Rodham Clinton. It is the same phenomena at play, but much more is even explained by latter day theories that we shall return to. Some of these are the spiral of silence thesis which made opinion polls misleading, because of people whose values disposed them to voting for Trump were either too ashamed to admit their inclination or feared that as “minorities” they may look bad. If the media did not exercise direct influence, it seemed to have influence through its gatekeeper role. The editors determine what goes out as news. So, if they had a policy not to report 419 kingpins, they denied them social influence that comes from the halo effect that flows from the status conferral function of the media. When the gatekeepers celebrate crooks who can splash money around, those socialites become role models. That can damage the incentive structure of society that is at the core of the production of goods and services. So, gatekeepers were considered key to the social value frame. When I arrived in the United States in 1978 to commence graduate studies, the man frequently voted the most trusted man in America was CBSTV Evening News Anchor, Walter Cronkite. He ended his broadcasts by saying, “That’s the way it is.” The gatekeeper had influence. Choice of policies in the economic arena had to have been impacted by decisions of the gatekeeper. So, any way Cronkite said it was, was the way it was presumed to be. The gatekeeper value of the media is today challenged by the phenomena of social media that gives everybody with a cellular telephone or computer the possibility of being both the source and gatekeeper of the flow of information. With such a variegated gatekeeping access mode, a new order reigns. What this new order particularly challenges, is the structure of the public sphere. No one better understands that, in my view, than the German philosopher, Jurgen Habermas. The philosopher of social theory focused on how to transform the world and arrive at a more humane and just order. He rightly focused on the benefits of democracy and modernity based on communication reason and communication rationality. This is


I would like to open this section of the discussion with two caveats that provide some insight into my view of the essence of the university and its influence; and my view of how history aids explanation of social phenomena


because the marketplace of ideas and thought leadership are infinitely capable of orienting society towards the common good, and a productive use of the resources of the earth to advance the quality of life of citizens. I believe that the incidence of fake news and abuse of channels of communication will ultimately reduce the value of social media as source of credible information even though it will broaden the scope of gatekeeping. In the face of this the communication village square, traditional and new, will inevitably witness the ascendance of thought leaders that can point society in the direction of the kind of society Habermas advocates. A society witnessing the coming of capitalism and democracy and creating a pub¬lic sphere of citizen’s exchange of information and ideas distinct and separate from the state. Whereaspeople like John B Thompson of Cambridge University criticise Haberman’s idea of the public sphere as challenged by the nature of mass media, I take the view that invariably the Tower of Babel media society will find social progress hampered enough that the creation of Thought Leaders will approximate the Habermas notion of the public sphere. This idea of the public sphere as domain of reasoned discussion and arrival at a choice in the public interest is captured in debate in the US on the law of eminent domain. The gatekeeping function as path to influence was only a part of the more definite thesis that media has influence because of the many things that happen every day. Only the ones the media choose to focus on become part of society’s priorities. This is the Agenda-Setting function of the media. For years, the people of the Congo Democratic Republic had been dying of Ebola; it did not become a global health crisis until it entered the radar of global media. This is just as Nigerians had been wallowing away in slavery in Libya, but it was not an issue until CNN Freedom Project brought its Sudanese born correspondent Nima Elbagir to the table and it came to the limelight. The agenda-setting function has always been my favourite media influence thesis because it holds the more plausible explanatory power of the contending theories. I like to joke that I am stuck there because that was the dominant paradigm in media influence studies in the late 1970s before my academic interests shifted to development economics. The agenda setting paradigm is even more interesting in how dominant media set the agenda of other media through agenda-surfing and agenda-cutting. This has brought frustration to those who see the agenda of national media set by an old boy network in dominant media groups. One of the most remembered frustrations expressed about this are in the words of US Vice-President Spiro T Agnew who served under Richard Nixon. He lashed out at the eastern seaboard press as “nattering nabobs of negativism.” Similar feelings have been expressed by some about the “Lagos-Ibadan” media axis in Nigeria. Trump’s assault on America’s liberal media also highlights the agendacutting thesis. Continues on Wednesday



Tuesday 16 April 2019






Market Insight Companies Commodity Tracker Policy



Nigeria, other Sub-Saharan countries record gaps in applying extractive sector laws ISAAC ANYAOGU


n analysis by the Natural Resource Governance Institute (NRGI), a natural resources watchdog, of the extractive industries in 28 sub-Saharan African countries reveals that all but two – Botswana and Zambia – are failing to deliver the standards laid down in their laws. The rest including Nigeria record low levels of compliance with their own extractive sector laws. As a result, these countries are failing to reap benefits from their wealth of endowments of oil and minerals fuelling poverty in the African continent that accounts for 30 percent of the world’s oil supply. The NRGI created a Resource Governance Index (RGI) in 2017 to assess how 81 resource-rich countries govern their oil, gas and mineral wealth using three broad indicators of value realisation, resource management and enabling environment. Sub Saharan countries have generally performed poorly on the RGI but this analysis now say some countries like Ghana have reformed and modernized laws governing the extractive industries. This has produced stronger, transparent and accountable rules than most other parts of the world, but there have been gaps in implementation. “If countries in sub-Saharan Africa closed the ‘implementation gap’ and fully implemented their own laws, they could generate greater income from natural resources. They could also better combat the negative human and environmental impacts of extraction,” said Silas Olan’g, Africa CoDirector for the NRGI said in a

release. With only 14 percent of the world’s population, Sub Saharan Africa is currently responsible for 24 percent of new births and on track to have 86 percent of the world’s poor by 2050, a recent study by the Bill and Melinda Gates Foundation found. Yet more than half the exports of many countries in sub-Saharan Africa come from natural resources and as much as 90 percent in the most oil-dependent countries, making implementation of these laws critical to their economicwellbeing. Mineral reserves represent a large share of government revenues across the region and have the potential to become even more important in countries with recent discoveries, such as oil and gas in Tanzania and Uganda, and large reserves of strategic minerals such as cobalt in the Democratic Republic of Congo. However much of these wealth

cannot translate to value for over 1billion people in the region because governments are failing to fulfil the legal requirements to transfer revenues collected to local authorities and publicly disclose information on social and environmental impacts. The researchers found that half of the 28 countries studied do not disclose environmental and social impact assessments, even though this is a legal requirement in many countries. “Trust in government and companies erode when legal reform is not followed and citizens are left in the dark. Closing the ‘implementation gap’ is in everyone’s interests because ultimately it enables countries to reap the benefits that their mineral wealth should offer,” said Olan’g. Nigeria’s poor management of commodity booms in the 1970s led to crippling structural policies in its macro economy, including currency devaluation because the

boom years were accompanied by reckless spending resulting in budget imbalance and high public debt. The same scenario is replicated in many Sub Saharan African countries because governments fail to comply with fiscal rules to stabilise public finance. This raises the question of whether these governments had established appropriate monitoring mechanisms or the rules were fit for purpose. Absence of transparency also impacts how compliance is monitored. The researchers also found that governments in the subregion tend not to respect rules for managing assets held in natural resource funds and for disclosing conflicts of interest, particularly where corruption is poorly con-

trolled. Governance of state-owned mining and oil companies and natural resource funds were weak in countries like Angola, Gabon and Nigeria. “Building capacity and allowing space for independent oversight is critical for holding government institutions accountable in resourcerich countries. Official audit bodies and non-state actors like the media play an important role here,” said Olan’g. Olan’g said that if managed well, natural resources offer the potential for driving economic development. “Governments in sub-Saharan Africa are well-placed to build on the strong laws they have developed, but this review of the index shows how they now need to turn greater attention to implementation.”


Botswana or Gabon: Nigeria’s oil, gas pathway to prosperity is closing STEPHEN ONYEKWELU


otswana and Gabon present Nigeria with two examples of how a country can either decide to deliberately leverage its natural resources to create shared prosperity for citizens or sit back and watch them descend into poverty. One of the world’s poorest countries at independence in 1966, Botwana, a Southern African country of 2.30 million people rapidly became one of the world’s development success stories. Botswana is heavily dependent on its diamond resources, which according to the World Bank, is responsible for 25 percent of the country’s gross domestic product (GDP), approximately 85 percent of exports earnings and about one-third of the government’s revenues. To avoid the common pitfalls associ-

ated with discovery of natural resources called ‘resource curse’ or the ‘Dutch disease’, Botswana deliberately pursued clear objectives: steered the country away from external debt, stabilise growth and encourage economic diversification. To achieve this, the country designed economic policies that avoided excessive expenditure during boom periods, accumulated international reserves, and ran budget surpluses earmarked for stability spending during leaner periods. Gabon a Central African country is categorised as an upper-middle-income country of 2.03 million people. The fifth largest oil producer in Africa, it has had strong economic growth over the past decade, driven by its production of oil and manganese. The oil sector has accounted for 80 percent of exports, 45 percent of GDP and 60 percent of fiscal revenue on

erage over the past five years. However, the country is facing a decline in its oil reserves; the Gabonese government has based a new economic strategy on diversification. But, the poor quality of Gabon’s business climate is a major barrier to the diversification of its economy. Gabon ranked 167 out of 190 countries in the 2018 Doing Business report. The government’s strategy for the promotion of non-oil sectors has so far been based on the granting of specific incentives to foreign investors. The population of both countries (a little above 4 million) put together is less than the population of Lagos State, Nigeria. So, it is easy to argue that the relatively smaller population of these countries is an advantage in terms of governance. Both countries have a little over two

million people yet the story of natural resource governance in each is different. This means a smaller population does not necessarily translate into better natural resource governance. Institutionalised savings, reinvestment and provision of social goods (education, healthcare) from natural resource revenue, such as oil are two factors that create wealth for both present and future generations. Nigeria, Africa’s largest crude oil producer has lessons to learn from both countries as it faces a closing window of opportunity with regards reforming the oil sector to attract more investment. Africa’s most populous nation’s oil reserves have remained stagnant at 37 billion barrels for decades. At an average of 1.70 million barrels a day, Nigeria has less than 50 years of oil production left. And there has been no fresh investment @Businessdayng

in the sector and no new oil discoveries. A Premium Times Centre for Investigative Journalism (PTCIJ) report showed that Nigeria earned $109.37 billion, approximately N15.274 trillion, as excess crude money between 2004 and 2018. According to the report, the fund reached its peak with a real inflow of $18.16 billion in 2008. Excess crude money is the difference between the budget benchmark and actual crude oil price. Crude oil benchmark for the 2019 budget is $60 per barrel. So, if oil price goes above this amount the difference goes to the excess crude account (ECA). Unfortunately, Nigeria has failed to transform decades of oil earnings into sustainable development, despite being the largest producer and exporter of petroleum in Africa and one of the ten largest producers in the world.

Tuesday 16 April 2019




Why Nigeria oil rigs might be nearing an all time low DIPO OLADEHINDE


ack of incentives from government, delay in passage of the Petroleum Industry Bill (PIB) among many other factors is taking its toll on Africa’s biggest oil producing country as  the country’s rig count is nearing an all time low.   Data obtained from Baker Hughes Incorporated and the Organization of Petroleum Exporting Countries (OPEC) showed since the beginning of 2019 Nigeria’s oil rig, which is a reflection of the level of exploration, development and productive activities occurring in the oil and gas space has been hovering around 14 rigs count, a sharp decline from a three-year high of 35 rigs count recorded in February 2018. Wunmi Iledare, Ghana National Petroleum professor and chair, University of Cape Coast’s Institute of Oil and Gas, said a number of factors contributed to the decline in Nigeria’s rig count ranging from poor investment clouds due to lack of reforms, lack of passage of the petroleum industry bill (PIGB), and

the need to renew some OMLs due for renewal. “The activities levels in other places are higher because Nigeria has not given out any oil leases in recent times and, once the contract expires they (rigs) move to another

location where they are needed,” Iledare told BusinessDay. As at March 2018, Iran had the highest rig drilling activities of 157 rig count; followed by Saudi Arabia with 115 rig counts; while Iraq, United Arab Emirates (UAE) and

Algeria all had 67 rig counts, 57 rig counts and 52 rigs counts respectively to make up the top five countries with the highest rig counts among OPEC members countries. Also, Kuwait recorded 41 rig counts; Venezuela recorded 22 rig

counts; Libya recorded 15 rigs counts; while Nigeria, Ecuador, Gabon, Angola, Congo, Equatorial Guinea had 14, 7,7,5,4 and 1 respectively to make up OPEC countries with the lowest number of rig count. Abayomi Fawehinmi, an energy analyst in a Lagos based oil firm said oil rigs are indications of drilling activities going on in a country’s oil sector however it can be very dodgy at times. “Some rigs are like beasts and drill faster, cheaper and better than the others while some other rigs can also be docile,” Fawehinmi said. The 14 OPEC members recorded a total of 564 rig counts in March as against 561 recorded the previous month with Algeria and Libya both recording the highest marginal increase of  8 rig counts and 6 rigs count respectively. Non-OPEC members had a decrease of increase of 95 rigs, from 1,901 rig counts recorded in February 2019 to 1,806 rig counts recorded in March. World rig count also recorded a decrease of 92 rig counts, from 2,462 rig counts in previous month to 2,370 rig counts in March.



ExxonMobil debunks speculations that it is leaving Nigeria

The IMF has apologised but can Nigeria save for future generations?



xxonMobil Nigeria has debunked speculations that it is moving its operation outside Nigeria contrary to rumours that made the rounds in the past three weeks that the company was considering exiting Nigeria. Richard Laing, executive director and production manager of ExxonMobil Nigeria on the occasion of Ibe Kachikwu, minister of state for Petroleum Resources visit to the ERHA FPSO operated by ExxonMobil Nigeria firmly debunk the unsubstantiated rumor about the Organizations exit from Nigeria. Laing further said that the ERHA field, located in Oil Mining Lease (OML) 133 and in which ExxonMobil Nigeria holds a 56.25% participating interest while Shell Nigeria Exploration and Production Company (SNEPCO) holds the remaining 43.75% share will continue production. The Floating, Production, Storage and Offloading (FPSO) has about 2.2 million barrels of storage capacity making it one of the largest of its kind, globally, said Laing. According to a release sent by the Ministry of Petroluem Resource the visit by Kachikwu not only marks a defining one for the Nation but also highlights a personal achievement for the Minister considering that he took on his current portfolio from his then position as

the Executive Vice Chairman of Mobil Producing Nigeria Unlimited and General Counsel for ExxonMobil Nigeria affiliate Upstream and Downstream Companies in Nigeria. This latest round of visits to the FPSO’s is to provoke the Oil Production Fields of Nigeria to ramp up their crude production and unlock gas in line with the Gas Revolution Agenda of the #7BigWins, the ministry said. Laing and other top officials of ExxonMobil took him and his delegation on a tour of the FPSO.  While addressing key business concerns of ExxonMobil Nigeria, Kachikwu urged them to not only focus on the profitability of the firm but also on giving back to the society having been doing business around the country for a long time. He commended the crew on behalf of the Federal Government of Nigeria for their sacrifice, urgency of attention and value addition while conveying President Muhammadu Buhari’s deep commitment to the welfare of those on the production fields.   Kachikwu name-checked the Department of Petroleum Resources’ automation initiatives that include Crude Oil and LNG Tracking (COLT), Automatic Downstream System (ADS) and Accelerated Lease Renewal Program (ALRP). He also referenced the community engagement drive of the organization evidenced by the peace and harmony seen in operating areas.



ast week, it was reported that the IMF ranked Nigeria’s Sovereign Wealth Fund (SWF) as the second worst managed, after Qatar’s but turned around to apologise because the Washingtonbased Institution had mistaken the SWF for the Excess Crude Account (ECA). The International Monetary Fund may have referred to the wrong institution in Nigeria; however, the Bretton Woods Institution is right in believing Nigeria’s management of its excess crude oil revenue in the last 15 years has lacked transparency and translated into little human, social and economic capital. Some experts have attributed Nigeria’s squander manic tendency to the fact that the Constitution of Federal Republic of Nigeria does not provide for mandatory savings from excess crude sales. And to reverse this tendency, the Excess Crude Account needs to be institutionalised through a constitutional amendment. Nigeria’s 1999 Constitution as amended Section 162 deals with public revenue management. Subsection of Section 162 (1) provides

for “the Federation Account”; (3) provides that amounts standing to the credit of the Federation Account shall be distributed among the Federal and State Governments and the Local Government Councils in each State on such terms and in such manner as may be prescribed by the National Assembly. Sub-section (4) provides that any amount standing to the credit of the States in the Federation Account shall be distributed among the States on such terms and in such manner as may be prescribed by the National Assembly. The Constitution ab-initio provides that revenue accruing to the Federation Account should be distributed. This means that the Excess Crude Account, which is revenue accruing to the Federation Account, should be distributed according to the established revenue sharing formula. There is no Constitutional backing to save money from sales of crude oil above the budget benchmark, which is $60 dollars for the 2019 budget. “There is no legal backing for the excess crude account, the Constitution says revenue accruing to the Federation Account should be shared, there is no provision to save for future generations” said @Businessdayng

Oby Ezekwesili, who was part of the economic team under president Olusegun Obasanjo that proposed the establishment of ECA. The States in the Federation normally demand that withdrawals be made from the account to augment low revenues distributed monthly at the Federation Accounts Allocation Committee (FAAC), where Federation revenues are collated and distributed among the Federal, States and Local Governments. In principle, accruals in the account domiciled a the Central Bank of Nigeria (CBN) are supposed to be transferred to the Sovereign Wealth Fund to be managed by the Nigeria Sovereign Investment Authority (NSIA), which is mandated to deploy such funds in commercially viable investments at home and abroad for the benefit of all Nigerians. But successive administrations have routinely shared such accruals every month during the Federation Accounts Allocation Committee (FAAC) meeting attended by the three tiers of government. The current administration has also been accused of illegally using part of the funds in the ECA without the approval of the National Assembly.


Tuesday 16 April 2019



At NEF 2019, life after donor grant has off-grid investors concerned Stories by ISAAC ANYAOGU


t the fourth edition of the Nigerian Energy Forum (NEF) held in Lagos from April 9-10 in Lagos, it was revealed that over $300m new funding was coming to the sector in the coming months but these funds would come in the form of grants and low interest loans from private equity funds abroad and development agencies like the World Bank and African Development Bank. Wiebe Boer, CEO of All On, an impact investment firm seeded by Shell, in a keynote address said: “There is over $200 million in grant capital coming through the REA’s Nigeria Electrification Program. There is another $80 million in debt capital coming through the EU/ AFD’s SUNREF program through Access and UBA. The EU is announcing another funding window tomorrow through Electrifi. There is the AfDB’s Off Grid Energy Fund. DeutscheBankis coming with a debt fund. Sterling Bank is the first Nigerian commercial bank to lend to the space in a serious way.

L-R: Wiebe Boer (GVE Director & CEO of All On), Christian Okoli, Clement Ilechukwu, Gloria Chukwudebe (Board Chairman of GVE), Ifeanyi Orajaka (CEO of GVE) & Quentin Antoine (Senior Investment Manager of EU ElectriFI) pose for a picture at GVE’s execution booth during the 4th Nigeria Energy Forum and launch of the €30million ElectriFI Clean Energy Investment Fund for Nigeria. “Persistent Energy Capital now has an office in Nigeria. Acumen has moved from Accra to Lagos and is actively seeking off grid energy investment opportunities. Leading local PE firm Verod just made a big investment in Daystar. Helios has invested significant capital in Starsight. NorFundand Breakthrough Energy Ventures have both just made their first investments in the

Nigerian off grid energy space. It is big and is only going to get bigger,” said Wiebe. But there is concern over what will happen when these funding begins to dry up. Grants and donor funds usually help start-ups to get off the floor but it will require much more to get an industry going. Wiebe alluded to this in his address. “So, even if the goodwill

goes, and if the donor funding and investment capital reduces or dries up, we understand that in spite of it all, the burden rests on us squarely to get the work done and commit to leaving no Nigerian in darkness. This is a revolution, and we are the army to get it done. During panel discussions at the event, this issue was brought to the fore. Commercial banks in Nigeria

are yet to be convinced of the viability of the sector. This is why few banks including Sterling and First Bank have programmes to address funding in the sector. The issue for most banks is how to get the money bank back. At the recent launch of Azuri solar-powered television in Lagos, First Bank of Nigeria officials who were providing financing for the project said a challenge funding renewable energy projects in Nigeria is because they are not bankable. This is worsened by poor regulation of the sector. Policy implementation has proven to be untidy with government ministries failing to converge around a coherent plan. While the ministry of trade and investment is granting the sector pioneer status, the custom is enforcing new tariffs. Nigeria’s Energy demand is expected to double over the next 10 years and consumers are willing and able to pay for alternate sources of power hence this presents massive opportunities but the sector is constrained by poor government policy including an obnoxious solar panel tariff enforced last year by the Nigerian customs.


N1bn BOI/All On Off-grid energy fund is now operational


he N1billion fund for off-grid developers in the nine states of the Nigeria established in February by the Bank of Industry (BOI), a Nigerian development finance Institution and Shell-seeded All On, an impact investment firm, is now operational the institutions have said. According to the terms of deal, developers would bid to execute off-grid projects in the Niger Delta and obtain funding at 10% interest rate. The loan will be repayable over seven years with a 1 year moratorium. Developers would have to set sustainable tariffs to successfully access funding. While All On and BOI contributed N500m each to raise the N1bn financing, BOI will act as the fund manager and the development bank had previously said it is willing to increase funding after the initial N1bn financing, called the Niger Delta Off-Grid Energy Fund, is depleted.   At the agreement signing ceremony two months ago, Olukayode

Pitan, managing director of BOI said developers would decide what source of renewable energy will be best suited for the community they choose to bid. Options include solar, wind, gas and biomass.   Wiebe Boer, CEO of All On, said the BOI who already has a big

footprint in funding the off-grid space will leverage its experience to reach more communities in the Nigeria Delta. “Bank of Industry will manage the funds, so developers will need to apply through the different branches of the bank. We want this to take

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

off very quickly as soon as the operations side has been completed,” said Boer. According to Boer, the N1billion in financing is capable of producing up to 15 mini grid plants as well some solar home system solutions and single systems for small busi-

nesses. The funding will be made available for projects in all six states of the South South geopolitical zone: Akwa Ibom, Cross River, Bayelsa, Rivers, Delta and Edo). Others are Ondo, from the South West geopolitical zone and two states from the South East zones, namely Abia and Imo.   Pitan said this funding round can be considered a pilot phase as the bank has experience managing funding for off grid projects. “We have had success in two UNDP partnered projects and what we have learned is that as long as you have capacity to collect tariff, the project will be sustainable.” To qualify, applicants who could be developers of their own technology or acquiring and implementing technologies developed elsewhere, need to be legally registered in Nigeria, demonstrate a capacity to track and manage project resources and operate in good standing with local governments in their areas of operation.

Feedback: 07037817378, 08137433034, 08135447789


Tuesday 16 April 2019



NEWS IFRS 9 wipes N1trn off banking industry... Continued from page 1

goes bad and it crystallises, the bank is forced to book it as non-performing loans in which case they will now have to raise capital to write it off their books,” Ologunro said. According to BusinessDay analysis,12banksadjustedtheir retained earnings to the tune of N889.33 billion and N202.63 billion in regulatory reserves on the impact of re-measuring financial instruments. Retained earnings are undistributed earnings that have not been paid to stockholders or transferred to a surplus account. They are part of a bank’s net worth, or capital and surplus. Ecobank, First

Bank and GTBank represented 60 percent of total adjustments as N642.39 billion was wiped off their books due to implementing the new accounting standard. “IFRS 9 stipulates that you need to be more aggressive with your impairment that you take,” Fola Abimbola, a research analyst at FBNQuest, told BusinessDay. “The CBN said rather than taking impairment from the income statement, they can just take it from their equity position.” Uchenna Minnis, chief market analyst at Eagle Global Markets, said the IFRS-9 enables lenders estimate their total asset portfolio to reflect

their actual strength and plan ahead for possible prospective risks. Ecobank felt the impact of IFRS 9 the most as the bank had to take a total of N278.50 billion off its accumulated profit of N216.14 billion at the end of the 2017 financial calendar. First Bank took a big hit as it had to take a total of N212.63 billion out of both its retained earnings and credit risk reserves after implementation of the standard was complete. GTB was not left out of the top three write-offs as it had to take out a total of N151.35 billion from its retained earnings and credit reserves. Minnis said since the previous method of reporting does not really focus on actual strength position of the bank

in terms of its risk exposure, “it only make sense that we see such decline in those released numbers”. Outside the top three write-offs, Union Bank adjusted its capital base downwards to the tune of N132.99 billion coming from its retained earnings and credit risk reserve, followed by Zenith Bank (N108.11 billion), Access Bank (N80.63 billion), UBA (N48.64 billion), Fidelity Bank (N28.39 billion), FCMB (N25.14 billion), Sterling Bank (N10.45 billion), Stanbic Bank (N10.17 billion), Wema Bank (N2.87 billion), and Unity Bank (N2.14 billion). According to Gbolahan, with IFRS 9, the standard is that at the point of granting loans to customers, banks

have already made adequate provision that take into account foreseeable future losses. “If the loan goes bad, the bank may not necessarily have to raise capital and for first-time adoption, you will have to take a haircut on shareholders’ fund. That is what happened to some banks that affected that capital,” he said. The transition to the new standard resulted in lower capital position in view of the shift from Incurred Loss to Expected Credit Loss (ECL) model. In a move to cushion the effect of the ECL provisions on tier-1 capital, the CBN introduced a four-year transitional arrangement which will

Firms consolidate local input sourcing... Continued from page 1

input sourcing for major

manufacturing firms to 60.3 percent in 2018. It has stayed above 60 percent mark since the foreign exchange crisis of 2015/2016. The data from the Manufacturers Association of Nigeria (MAN), comprising about 2,500 members, show that local input sourcing rose from 47 percent to 52 percent between 2014 and 2015, and then 60.4 percent to 63.2 percent between 2016 and 2017, and stood at 60.3 percent in 2018. “Our business has consistently sourced all its core ingredients such as sorghum and malt extract locally through the various local raw material chains,” Baker Magunda, managing director/chief executive officer, Guinness Nigeria, said in January, at a partnership meeting between the brewer, CBN and Stanbic IBTC Bank Plc. “Currently, our local content sourcing is 75 per cent, and we plan to increase this significantly within the next couple of years,” he added. Manufacturers scrambled for dollars in 2016

when the country fell into an avoidable recession resulting from what analysts say was policy inactions and lack of economic direction of the federal government. About 64 small-scale manufacturers shut down in eight months to end of 2016 as they could not produce or stay afloat. At least 222 small-scale businesses closed shops, leading to 180,000 job losses, according to a report by NOI Polls. The trend has forced manufacturers to begin to pump billions into local inputs to beat future dollar crunch. Nigerian Breweries is the biggest buyer of cassava starch from Psaltery International Limited, followed by Nestle Nigeria Plc and Yale Foods, Ibadan. Jordi Borrut Bel, managing director of NB, plans to raise NB’s local input preference from 50 to 60 percent. Cassava starch is used by manufacturing companies as binder and to produce maltose (a form of sugar). “We have two lines producing 20-30 metric tons per day, which is a total of two trailer loads every

Domestic passenger traffic up 23% in... Continued from page 2

from kidnappers and armed robbery on the highway. People look for money by all means to fly because it is safer. In the news today (Monday), Nasarawa was attacked. It is no longer safe travelling by road,” Yakubu said.

She assured that the ambiance across the airports has improved, especially with the opening of the new terminals in Abuja and Port Harcourt, making it more attractive for passengers. “People are expectant because the infrastructures are top notch. The toilets are

XXXXXXX Continued from page 2

should be distributed according to the established revenue sharing formula. There is no constitutional backing to save money from sales of crude oil above the budget benchmark, which is $60 for the

2019 budget. “There is no legal backing for the Excess Crude Account. The constitution says revenue accruing to the Federation Account should be shared; there is no provision to save for future generations,” said Oby

Akinwunmi Ambode (m), governor, Lagos State, flanked by Mohammed Adamu (l), Inspector General of Police (IGP), and Taiwo Lakanu, deputy Inspector General of Police, logistics and supply, during the IGP’s visit to the governor at the Lagos House, Alausa, Ikeja, yesterday.

require banks to hold static the Adjusted Day One impact of IFRS 9 impairment figures and spread it over a four-year period. Consequently, capital position of banks will improve relative to the figures that were published for the 2018 reporting periods. On the longer term, Minnis believes it is a more transparent methodology which would further increase business and customer confidence as stakeholders would be working with impactful tangibles. On the other hand, Abimbola said the profit and loss accounts of the banks might subsequently come under pressure from the aggressive impairment as a result of the new reporting standard. impact of rising local input sourcing. “Local corporates are supporting out-grower schemes to support farmers for their inputs. In paper and packaging, operators are recycling used cartons as against importing tons of craf paper from across the globe,” Bolatiti Ajibode, head, conglomerates and industrials, Stanbic IBTC Bank PLC, told BusinessDay. To help shore up local production and input sourcing and also cut imports, the CBN restricted 41 items from palm oil to margarine, from accessing the FX market. This pushed up local sourcing and raised production. Remi Emeh, CEO of Remi Emeh Enterprises, said he and other palm oil millers could not even meet demand from manufacturers of food and beverages in 2016. “But the trend is changing with smuggling of Malaysian palm oil through Kano,” he said. “This is hurting large corporates like Okomu, Presco and PZ Wilmar, including small-scale millers like us,” he added.

day. The annual capacity is 10,000 metric tons but we are doing 6,000 metric tons now,” Oluyemisi Iranloye, MD/CEO of Psaltery International, said at a factory tour. Nestlé Nigeria, a food manufacturing giant, sources 80 percent of its maize, sorghum, millet, soya, cassava starch, cocoa powder, and palm olein from more than 41, 600 local farmers and processors scattered across the country. These crops serve as inputs for the Fast-Moving Consumer Goods (FMCGs) giant.

Nestlé Cereals Plan project has over 30,000 farmers who supply 100 percent of the grain requirement for Golden Morn Maize. Through its Sorghum and Millet in the Sahel (SMS) project, now called Nestlé Nigeria & IFDC / 2Scale Project Sorghum & Millet, the food and beverage giant has engaged up to 10,671 farmers. “The Industry has huge needs and we must help farmers improve their yields to meet them. To achieve real success with connecting farmers to industry, a

360 degree approach which will include the aggregators, processors, and logistics suppliers must be considered within this value chain,” says Mauricio Alarcon, CEO of Nestlé Nigeria Plc. PZ Wilmar’s investments has continued to plant oil palm to serve as input for its vegetable oil and other products. Santosh Pillai, managing director of PZ Wilmar, told BusinessDay that his firm has pumped approximately $150 million into oil palm plantations. Banks are also seeing the

clean and everything about the new terminals is a great improvement from the previous ones. A lot of people are curious and people are more interested in travelling now than they were before,” she added. According to the NBS data, the total number of domestic aircraft grew by 11.24 percent to 234,367 in 2018, from 210,693 aircraft in 2017.

Cargo traffic grew by 1.94 percent in 2018 compared to 2017, while there was a 19.96 percent increase in total mail traffic in 2018 compared to 2017. Chris Iwarah, corporate communications manager, Air Peace, however, thinks there is no significant growth in domestic traffic despite the data released

by NBS. According to him, Air Pe a c e o p e rate d ab ou t three-quarters of domestic air flights in Nigeria two years ago and that has not changed. “We have had 100 to 130 passenger load. I will not say there is any significant rise in flight movement, until I go through our records again,”

Iwarah said. “Although we have increased our fleet size, don’t forget that some other airlines have reduced capacity. At some point we had about eight active scheduled operators but I don’t think we have up to that now. Even those operating have reduced their flights,” he said.

Ezekwesili, who was part of the economic team under former President Olusegun Obasanjo that proposed the establishment of ECA. The states in the federation normally demand that withdrawals be made from the account to augment low revenues distributed monthly at the Federa-

tion Accounts Allocation Committee (FAAC), where federation revenues are collated and distributed among the federal, states and local governments. In principle, accruals in the account domiciled at the Central Bank of Nigeria (CBN) are supposed to be transferred to the

Sovereign Wealth Fund to be managed by the Nigeria Sovereign Investment Authority (NSIA), which is mandated to deploy such funds in commercially viable investments at home and abroad for the benefit of all Nigerians. But successive administrations have routinely

shared such accruals every month during the Federation Accounts Allocation Committee (FAAC) meeting attended by the three tiers of government. The current administration has also been accused of illegally using part of the funds in the ECA without the approval of the National Assembly.



Tuesday 16 April 2019


Live @ The Exchanges Market Statistics as at Monday 15 April 2019

Top Gainers/Losers as at Monday 15 April 2019 LOSERS

















VOLUME (Numbers)







VALUE (N billion)



















N8.4 N8.85


ASI (Points)



DEALS (Numbers)

29,495.91 3,175.00 223,777,641.00 1.785 11.078

Zainab Shamsuna Ahmed, Minister of Finance (middle) flanked by Christine Lagarde, managing director, International Monetary Fund (IMF) in a group photograph with world finance and economic leaders at the 2019 Spring Meeting of the IMF/World Bank in Washington DC, USA.

Stock market fails to sustain gains Stories by Iheanyi Nwachukwu


i g e r i a’s stock market was unable to sustain gains recorded the preceding trading day as many investors chose to take profit in some bellwether stocks. A late session dip in

Dangote Cement Plc reversed earlier session gains, causing the stock market to retreat after gaining for the three consecutive sessions at the end of last week. At the sound of closing gong on the Nigerian Stock Exchange (NSE) on Monday April 15, the All Share Index (ASI) and equities market capitalisation decreased from preceding day high of 29,560.47

points and N11.103 trillion to 29,495.91 points and N11.078trillion respectively. The ASI was down by 0.14percent while the market cap lost N28billion. Year-to-date (ytd), the market return is in negative of 6.08percent. Bond market capitalisation closed at N10.750trillion while the value of listed Exchange Traded Fund (ETFs) stood

at N5.621billion. Nestle Nigeria Plc declined most from N1456 to N1452.2, losing N3.8 or 0.26percent. Flourmills Nigeria Plc followed after its share price dropped from N16.85 to N16.4, losing 45kobo or 2.67percent. FBN Holdings Plc also dipped from N7.5 to N7.25, losing 25kobo or 3.33percent. Dangote Cement Plc

Global market indicators FTSE 100 Index 7,436.87GBP -0.19+-0.00% S&P 500 Index 2,899.73USD -7.68-0.26% Generic 1st ‘DM’ Future 26,350.00USD -58.00-0.22%

followed after its share price moved down from N189 to N186, losing N3 or 1.59percent. Flourmills Nigeria Plc was also down, from N16.85 to N16.4, losing 45kobo or 2.67percent. ETI Plc also decreased from N10.7 per share to N10.35, down 35kobo or 3.27percent, while UBA Plc dipped from N6.5 to N6.2, losing 30kobo or 4.62percent. On the gainers table, Nigerian Breweries Plc advanced most from N60.2 to N64, adding N3.8 or 6.31percent. Cement Company of Northern Nigeria Plc followed after its share price advanced from N16 to N16.9, adding 90kobo or 5.63percent. Cadbury Nigeria Plc also rallied from N10.1 to N11, adding 90kobo or 8.91percent. Dangote Flourmill Plc advanced from N8.4 to N9.2, adding 80kobo or 9.52percent. PZ Cussons Nigeria Plc increased from N8.85 to N9.45, adding 60kobo or 6.78percent. “We expect to see profit taking activities in some bellwether stocks which could potentially drive negative returns in the NSE ASI. However, we maintain a cautiously optimistic outlook as investors’ sentiment show signs of improvement”, said Afrinvest Research analysts in their April 15 note.

AACN organises 8th investors’ forum in London


high profile investors’ conference in London will highlight a chain of activities to commemorate the 10th anniversary of the Association of Assets Custodians of Nigeria (AACN). ‘Nigeria: the Economics of the Capital market’ is the key theme to be explored at the Annual Nigerian Investors Day in London holding on Thursday, May 9, 2019 at the London Marriot Canary Wharf Hotel & Executive Apartments, London, according to the Association. The one-day forum is aimed at availing the global audience of up-to-date information on the Nigerian capital market. Against the backdrop of the successful

L-R: T.C. Awagu, past president, Nigerian-British Chambers of Commerce, Arc.; Akinola Olawore, president and chairman of Council, NBCC; Emeka Anyaoku, patron, NBCC, GCVO, CFR, CON; Akinola Akintunde, past president, NBCC, and Adeyemi Adefulu, past president, NBCC, during the induction ceremony of the Chambers Patrons in Lagos.

conduct of general elections in Nigeria, the forum will seek to reassure international investors of the safety of their investments in the country, while highlighting the huge potential to undecided investors. The forum will also bring together investors to engage with each other, share information, review the Nigerian policy and economic environment as well as peruse economic opportunities. Leading voices from the securities services in Nigeria and abroad are expected to provide a full overview of the leading trends and challenges facing the industry. @Businessdayng

Deutsche Boerse AG German Stock Index DAX 12,020.28EUR +20.35+0.17% Nikkei 225 22,169.11JPY +298.55+1.37% Shanghai Stock Exchange Composite Index 3,177.79CNY -10.84-0.34%

FCMB wants SMEs to drive economic growth


irst City Monument Bank (FCMB) has urged small and medium scale enterprises (SMEs) to take the lead in driving the diversification and growth of the Nigerian economy. This, according to the Bank, is due to the catalytic role they play in the lives of people and the society. SMEs over the years, have stimulated national and economic development in the areas of production, employment and income generation. This is while making serious contribution to exports as well as facilitating equitable distribution of income, among other significant impacts. Towards this end, FCMB has reiterated its commitment to sustain the level of its support to SMEs through increased lending, capacity building, advisory and value-added offerings that would boost their performance. The Bank gave the assurance during the fifth in its series of free capacity building programmes, tagged ‘’Business Enterprises and Sustainability Training (BEST)’’ organised for existing and startup SMEs in Lagos on April 13, 2019. This followed the success of the previous editions of the training last year across the country. The initiative, led by FCMB Training Academy, the Bank’s Business Banking Group and seasoned facilitators, focused on business and skills development, marketing, finance and accounting for SMEs. It covered various topical areas such as identifying business opportunities, surviving in a harsh business environment, improving productivity, raising capital, optimising sales, cost and revenue management, among others. Speaking on the BEST initiative, the Executive Director, Business Development of FCMB, Bukola Smith, said the Bank recognises the increasing role and impact of SMEs.

Tuesday 16 April 2019





World Business Newspaper

Lighthizer faces crunch time as US-China trade talks near finish Trump’s trade chief under pressure from all sides to deliver a deal JAMES POLITI AND TOM MITCHELL


hen US President Donald Trump announced in the Oval Office this month that it might take until May to seal a deal to end the trade war with China, Robert Lighthizer had every reason to exhale. The 71-year old US trade representative — an Ohio native known for his coarse voice and protectionist worldview — had just secured more time to eke out extra concessions from Beijing, prevailing over other Trump administration officials who have pushed for a faster agreement. “There are still some major, major issues left, but we’re certainly making more progress than we would’ve thought when we started,” Mr Lighthizer said in front of the president. “I think that’s a fair statement”. Mr Lighthizer’s stature within the Trump administration has been steadily growing since the US president launched a series of trade disputes with strategic rivals such as China and allies like the EU last year. In December, Mr Trump put him in charge of leading the talks with Beijing, after previous efforts to reach a settlement driven by Steven Mnuchin, the Treasury secretary, and Wilbur Ross, the commerce secretary, had failed. The coming weeks will determine whether Mr Trump’s bet on Mr Lighthizer has paid off. If the US trade representative pushes the Chinese too far, the talks could collapse, which would deal a big blow to Mr Trump’s top political priority and the heart of his trade agenda.

If Mr Lighthizer settles too easily, Mr Trump can expect a domestic backlash for having struck a weak agreement, which would also create a problem for him heading into the 2020 re-election battle. “I think he will deliver a deal, but the question is whether it will, to put it nicely, pass the ‘straight-face’ test,” said one former senior trade official. “Trump will say whatever they sign is the greatest thing ever, but the jury is still out on whether this will be a real, substantial deal that people take seriously.” In at least two phone conversations in recent days, Mr Lighthizer, flanked by Mr Mnuchin, was again pushing Liu He, the top Chinese negotiator, to give some additional ground. The two sides have been close to a final deal for weeks, but have continued to haggle on the biggest sticking points in the talks, including big structural changes to Chinese economic policy and regulation demanded by the US, as well as a scheme to enforce the agreement and the fate of existing tariffs. This month, pressure from Mr Lighthizer led to some additional concessions from China on digital trade, particularly on non-discriminatory treatment for US cloud computing companies, which had emerged as another key point of contention in the talks. People familiar with the talks say that Mr Lighthizer has delegated much of the responsibility for negotiating large-scale purchases of US goods by Chinese buyers to US commerce department officials. This part of the accord is being drafted

Paul Rawlinson, 56, led one of the world’s largest law practices


aul Rawlinson, the head of the international law firm Baker McKenzie, passed away on Friday, the firm said in a statement. Rawlinson, who was 56, was the first UK-based global chair of the firm. He had worked for more than three decades at Baker McKenzie, one of the largest law firms in the world, with 4,700 lawyers and $2.9bn in revenues. “It is with great sadness that we convey to you the news of the unexpected passing of Paul Rawlinson,” a spokesperson said on Monday. “The firm’s thoughts are with Paul’s wife Alison and their two children, whom the firm will be helping through these very difficult times. “For all of us Paul was a visionary, a true leader and a good friend. He will be greatly missed.” Rawlinson went on leave on health grounds six months ago in what was expected to be a temporary absence. At the time, the firm said he would be focusing on a “personal medical issue”. It added: “Based on the advice of his doctor, in response to medical issues caused by exhaustion, Paul has decided to take a step back from firm leadership and client responsibilities to make his

if the unpredictable president does not follow his recommendations or changes his mind on the verge of an agreement with Mr Xi, pulling the rug out from under negotiators’ feet. But people close to the talks say that Mr Trump has shown himself to be exceptionally careful in dealing with Mr Lighthizer, compared with the treatment he has reserved for others. “Trump has given Bob a little bit more space because he knows that if Bob walks, the deal is dead. It has no credibility,” said one person close to the negotiations. There are other potential pitfalls. Mr Lighthizer has been negotiating a significant deal within a dysfunctional administration, where there

has been a big divide on how to approach trade with China and high turnover among key staff and cabinet officials. Meanwhile, congressional pressure has been mounting rapidly, mostly for Mr Lighthizer and the White House to remain as tough as possible in the final stretch. “I commend the Trump administration for entering into these difficult and very important negotiations with China, and I encourage the administration to stay strong and to pursue long-term meaningful structural changes in that relationship,” Rob Portman, a former US trade representative and a Republican senator from Ohio, recently said on the Senate floor.

Focus on retail banking part of chief Solomon’s goal to ‘diversify our business mix’

health and recovery his immediate priority.” Jaime Trujillo, who was appointed global acting chair of Baker McKenzie in Rawlinson’s place in October 2018, will continue in the role while the law firm identifies a permanent successor. Baker McKenzie said it would not be commenting further for the time being. Rawlinson, an intellectual property lawyer, led Baker McKenzie’s global IP practice group from 2004 to 2010 and was its lead partner for a number of the firm’s largest clients, including Unilever, L’Oreal and BAT. He was London managing partner from 2013 to 2016 before being elected global chair. Away from the office, Rawlinson was a lifelong Manchester City fan who was also renowned for his prowess on the piano and in the karaoke bar. Colleagues said his party piece was “Bohemian Rhapsody”, and he was particularly fond after a law firm event of dividing the bus into two halves for a startto-finish rendition. Comprehensive-educated and northern-accented, he was untypical for the head of an international law firm. He was bilingual in English and French, with Spanish that could withstand a media interview.

to satisfy Mr Trump’s appetite for a reduction in the bilateral trade deficit, but Mr Lighthizer sees it as less central to the negotiations. “Bob is focused on the things that are really important, and he has the benefit of leverage that the rest of us would loved to have — he is trying to get fundamental structural changes enforced and accomplished,” said another former senior US trade official. “The biggest risk he faces in the China negotiations is not necessarily from the other side of the table but from his side of the table, from being undermined at home.” Among the dangers for Mr Lighthizer at this stage is that he could find himself at odds with Mr Trump

Goldman Sachs profits fall by a fifth in tough trading conditions

Global head of law firm Baker McKenzie dies BARNEY THOMPSON

Robert Lighthizer wasn’t China’s first choice of negotiating partner for the trade talks, but now the country sees him as one of the few Trump administration officials to deliver a deal © Bloomberg



oldman Sachs’ new chief executive David Solomon has postponed an eagerly awaited strategic update by a year while promising the Wall Street bank would be “focused on new opportunities” such as retail banking after profits slumped by a fifth in the first quarter. Despite the fall in earnings, Goldman’s profits were better than expected by analysts, in part after it cut pay costs by 20 per cent. The bank was hit by tough conditions for its trading business, lower private equity profits and smaller transaction revenues in its investment and lending divisions. The fall in profits will raise questions about whether Goldman’s business focus and strategic priorities are appropriate for market conditions, in particular after rival JPMorgan set the record for the highest ever quarterly profit of a US bank during the same period. “We are focused on new opportunities to grow and diversify our business mix and serve a broader range of clients globally,” said Mr Solomon, who promised a ‘front to back’ review of all of Goldman’s businesses soon after he took over in October. “With improving momentum

across our businesses, we are confident that Goldman Sachs will generate attractive returns for our shareholders,” he added. Monday’s results included a brief overview of that review and gave some new detail, including an aspiration to increase UK and US deposits at its retail bank Marcus by more than $10bn a year “in the next few years” to help diversify Goldman’s funding mix. Goldman promised to finalise its performance targets and review its financial disclosures “in the coming months”, ahead of an “comprehensive strategic update” in the first quarter of 2020. The detail of the first-quarter earnings included net revenues of $8.8bn, in line with analysts’ expectations but down 13 per cent from a year earlier, as almost all of its key divisions posted lower levels of activity. Net income fell 21 per cent year on year, to $2.25bn. The bank delivered earnings per share of $5.71 against the $4.89 expected, after cutting operating expenses by 11 per cent including the 20 per cent cut in compensation and benefits expenses. Shares were down 2 per cent in pre-market trade. “Expense savings came through a lower employee compensation ratio this quarter, which we believe @Businessdayng

can be sustained,” said Marty Mosby, analyst at Vining Sparks. Revenues in fixed income trading — an area where Goldman has struggled in recent years — fell 11 per cent year on year to $1.84bn, better than the 18 per cent fall in fixed income trading revenues reported by JPMorgan Chase last week. Goldman’s equities trading revenues were 24 per cent lower year on year, at $1.77bn, “primarily due to significantly lower net revenues in equities client execution, particularly in derivatives, compared with a strong prior year period”, the bank said. JPMorgan’s equities revenues were down 14 per cent for the year. Investment banking — which covers everything from advising clients on M&A to dealmaking — was up 1 per cent year on year to $1.8bn, including a 51 per cent rise in the financial advisory business driven by strong M&A volumes. Litigation reserves for the quarter were $37m, down $7m from the same period in 2018, suggesting the bank has not made material new provisions to deal with the fallout from Malaysia’s 1MDB case, for which it is being sued in Malaysia and facing potential action from the US justice department. The bank booked $516m of litigation reserves in the fourth quarter.



Tuesday 16 April 2019


China’s SenseTime sells out of Xinjiang security joint venture Facial recognition group’s move follows scrutiny of treatment of Uighur people CHRISTIAN SHEPHERD


ne of China’s leading artificial intelligence start-ups, SenseTime, has sold out of a security joint venture in Xinjiang after an international outcry over the surveillance and mass detention of local Uighur people in the far-western Chinese region. SenseTime, a facial recognition software company that supplies Chinese police, set up a “smart policing” company with Leon, a major supplier of data analysis and surveillance technology in Xinjiang, in November 2017. It has now sold its 51 per cent stake in the joint venture, Tangli Technology, to Leon, which said Tangli would continue with its strategy and that its research team had mastered key technologies. A previously unreported statement, released at the end of last month, said SenseTime had decided to sell for “reasons relating to SenseTime’s own development”. SenseTime’s international backers include Fidelity International and Qualcomm, and analysts said it may have been wary of putting off foreign investors as it plans for an IPO. The company announced a partnership with Massachusetts Institute of Technology last year. Beijing has faced criticism from human rights groups, international bodies and western governments over its behaviour in Xinjiang, where the government has built a network of extra-legal internment camps that hold an estimated 1.5m Uighurs and is monitoring the movements of the local population with facial recognition cameras. SenseTime’s decision to step back from the joint venture marks the first time a major Chinese technology has opted out of operations in the region. A spokeswoman for SenseTime, which has its headquarters in Hong Kong, said the move was part of a

strategy review and that the company “no longer works with Leon and barely has any business in Xinjiang”. Police in Xinjiang have deployed mobile phone scanners, security cameras with facial recognition and big data software designed to generate lists of “untrustworthy” people based on their behaviour. A recent data leak suggested that authorities are closely tracking the locations of individuals in the region on a grand scale. Platforms being rolled out across the region that integrate data streams being collected can, for example, flag individuals of interest to the police based on criteria such as having relatives abroad, wearing traditional Islamic clothing or having submitted petitions complaining about the government. Such lists are then used to select people to stop and search or interrogate at numerous police checkpoints in the region’s cities and on its roads. Crackdown in Xinjiang: Where have all the people gone? US lawmakers, led by Republican Marco Rubio, an influential China hawk, have taken a tough stance on US investment funds backing Chinese technology companies deemed to have “problematic” ties with Chinese police, intelligence or military. Large funds have pulled out of investments in Hikvision, a security camera and surveillance technology company. China has defended its camps in Xinjiang, saying they provide “vocational training” and that the measures are necessary to fight “terrorism, separatism and religious extremism” in the region. Universities in the US, Australia and the UK have also pulled back from working with Chinese technology companies. MIT recently cut ties with Chinese telecoms groups including Huawei and ZTE after the US government accused the companies of stealing US technology and breaking US sanctions against Iran.

Credit Suisse to take majority stake in Chinese joint venture Latest sign China is opening up its financial sector to overseas competition STEPHEN MORRIS


redit Suisse is poised to take majority control of its Chinese investment-banking joint venture, the second major international lender to do so as the country opens up its financial sector to overseas competition. The Swiss bank has reached an agreement with partner Founder Securities to increase its stake in their joint venture to 51 per cent from 33.3 per cent, a previous limit for non-Chinese companies, by way of a capital injection of about SFr94m ($94m), according to statements from both parties on Monday. The deal still has to be approved by regulators, expected in August. Credit Suisse follows local rival UBS, which won approval from regulators to take a controlling stake in its own joint venture in December. The presence of another international bank onshore in China shows the eventual success of a decades-long lobbying

campaign in Beijing, which argued the country’s nascent capital markets would benefit from foreign investment and expertise. Despite numerous setbacks, pressure has recently built on China’s top leadership to open their markets if they expect reciprocal treatment overseas. Regulators vowed to speed up the process and a year ago gave clearer timeframes for allowing banks, securities companies, asset managers and insurers to take full ownership of their local operations. Of other international banks, only HSBC has been granted permission to take a 51 per cent stake in a national-level securities joint venture, taking advantage of special rules for Hong Kongfunded institutions. JPMorgan and Nomura have received permission to expand, but have not yet reached agreements with other shareholders to acquire majority stakes. Goldman Sachs and Morgan Stanley have said they are considering similar moves.

German prosecutors charge former Volkswagen chief with fraud Charges relate to emissions rigging scandal that engulfed German automaker PATRICK MCGEE


erman prosecutors have charged former Volkswagen chief executive Martin Winterkorn and four other people with fraud for their alleged role in the decade-long diesel scandal. The indictment from prosecutors based in Braunschweig, near VW’s Wolfsburg headquarters, marks the first time a VW board member has been charged in Germany. Former Audi CEO Rupert Stadler was arrested by Munich prosecutors last year, but he was never charged and later released. The US Environmental Protection Agency first exposed the cheating in September 2015, when it laid out how VW had designed and then covered-up the use of illegal “defeat devices” from 2006 to 2015. Mr Winterkorn stepped down within days, saying: “I am shocked by the events of the past few days.” Prosecutor Klaus Ziehe told the

German press agency that the district court had received the indictment on Friday. Mr Winterkorn’s lawyer, Felix Dörr, could not be reached for immediate comment but Volkswagen has previously strenuously denied any involvement from senior figures in connection to the scandal. Volkswagen plead guilty to three criminal counts in March 2017. The scandal has cost the carmaker around $30bn so far, including penalties and car repurchases. It is still defending itself in multiple jurisdictions. Compliance chief Hiltrud Werner told the FT last December that 2019 would be “most difficult year ever” in terms of legal complexity, as dozens of Volkswagen engineers are expected to go to trial for the first time. At the time prosecutors in Braunschweig and Munich collectively had about 70 current and former employees under suspicion. Mr Winterkorn was charged with alleged conspiracy and wire fraud by US prosecutors in May 2018. This action has not proceeded due to jurisdictional issues. Just last month

the US Securities and Exchange Commission sued Volkswagen and Mr Winterkorn, alleging investors had been defrauded; claims which are being contested. According to a legal document from last year which lays out Volkswagen’s defence, top managers at the German carmakers had been blindsided by the revelations of cheating and a cover-up, which until then had been considered a small issue concerning emissions regularities. The document said Mr Winterkorn participated in day-long meetings on Sept 19-20 2015, asking engineers for an account of what had happened. “When this account had ended and he had realised the entire dimensions of the problem,” the filing says, “he addressed one of the VW engineers who was involved by name and asked him verbatim, ‘Man, why didn’t you tell me all that?’” Volkswagen declined to comment on the charges against Mr Winterkorn, describing the charges

Nader tells US lawmakers to return contributions from Boeing Veteran consumer advocate steps up campaign to keep the 737 Max out of the skies PATTI WALDMEIR AND KIRAN STACEY


alph Nader, the consumer advocate whose grandniece was killed in the crash of a 737 Max in Ethiopia last month, is calling on US legislators to return campaign contributions from Boeing, after two deadly accidents were blamed on safety lapses. In an interview with the Financial Times, the 85-year-old activist and former US presidential candidate promised to expand his campaign to prevent the grounded 737 Max fleet from ever getting back into the skies. Boeing’s close relationship with its regulator, the Federal Aviation Administration, has become a focus of investigations into the approval process for the 737 Max, while the company’s extensive contacts on Capitol Hill have also been noted by critics. Mr Nader said that hundreds of lawmakers had taken contributions from Boeing. “We are going to call on Congress to return all Boeing contributions,” he said. “Congress is complicit in all this.” Mr Nader’s grandniece, Samya Stumo, was among the 157 people who died in the crash of Ethiopian Airlines flight 302 on March 10. She

had been flying to Kenya for work as a health financing analyst with ThinkWell, a non-profit group focused on improving healthcare in low and middle-income countries. Her family is suing Boeing in federal court in Chicago, one of a number of lawsuits filed in connection with the crash and an earlier 737 Max accident in Indonesia which killed 189. “All the investigations can be pulled back politically,” Mr Nader said. “The one attack on Boeing that can’t be pulled back politically is the civil lawsuits.” Boeing’s campaign contributions have flowed to politicians on both sides of the aisle, including Donald Trump, Beto O’Rourke, one of the Democratic challengers for president, and Maria Cantwell, the most senior Democrat on the Senate commerce committee. From 2016 to 2018, the company donated $4.6m in total. Roger Wicker, the Republican chairman of that committee received $10,000 from Boeing’s political action committee in the last election cycle. Mr Wicker employs John Keast, who previously lobbied on behalf of Boeing, as director of staff on his committee. Mr Wicker is planning a hearing on aviation safety, though aides say he @Businessdayng

wants to allow the FAA investigation to take place first. Mr Nader said investors were underestimating the damage that the 737 Max crisis had done to Boeing’s global reputation with passengers. Preliminary crash investigations implicated the aircraft’s anti-stall software, called MCAS, in both incidents. The company has been testing a software fix, but it remains unclear how long it might take for regulators in the US and elsewhere to approve the changes and allow the fleet back into the air. The manufacturer “put profits before safety” in rushing to market a plane whose design, Mr Nader said, was aerodynamically flawed. As a result, Boeing was suffering “brand stigmatisation” with ordinary passengers and consumers should boycott the aircraft, he said. In a statement, Boeing said that the 737 Max “was certified in accordance with the identical FAA requirements and processes that have governed certification of all previous new airplanes and derivatives”, adding that the administration “considered the final configuration and operating parameters of MCAS during Max certification, and concluded that it met all certification and regulatory requirements”.

Tuesday 16 April 2019






Stocks rise on trade optimism and China export rebound

Bid accepted after rival approach from Occidental Petroleum was rejected MICHAEL HUNTER AND SIDDARTH SHRIKANTH


tocks rose on Monday, with sentiment supported by encouraging US signals on trade talks and news of a rebound in Chinese exports. Attention remained on the banking sector in New York. First quarter numbers from Goldman Sachs showed profits slumped by a fifth, after which its shares fell 2.7 per cent. The S&P 500 fell 0.1 per cent overall. The Europe-wide Stoxx 600 remained near highs touched earlier in the month, which were its best readings since August. The index ticked up 0.1 per cent for the session. Frankfurt’s Xetra Dax rose 0.2 per cent, while London’s FTSE 100 was flat.

The dollar inched back overall, with the index tracking it against six currencies easing back 0.1 per cent. Brent crude oil also cooled from some of its highest levels of 2019, down 0.6 per cent at $71.14 a barrel. China’s CSI 300 ended down 0.3 per cent after a twisting run, which took it to within 1 per cent of the one-year high it touched last Monday before momentum faded. Data released on Friday showed a rebound in Chinese exports, while the country’s new bank loans also exceeded forecasts in March. Investors took heart from signs over the weekend that the US is willing to meet Beijing’s demand for a “two-way” enforcement mechanism for a future agreement.

Greek debt touches lowest yield since 2005

UK parliament to look into £7.5bn railway pension shortfall JOSH SPERO


he chair of parliament’s work and pensions committee has written to the Pensions Regulator to ask it to explain the “staggering, parlous state of the Railways Pension Scheme”. After the Department for Transport disqualified Stagecoach from

three bids to run railway franchises last week, it emerged there was a £7.5bn shortfall in the pension scheme. Stagecoach had refused to bear responsibility for the share of the shortfall which might fall to it. Frank Field’s letter to the regulator’s chief executive Charles Counsell asked him to outline “the extent of the deficit and [the regulator’s]

actions and future plans to work with firms and the Department for Transport to address this shortfall”. In additional comments, Mr Field said “the one positive” from Stagecoach’s disqualification was “the clear signal from government to industry of further, heavy consequences for so badly mismanaging a pension scheme”.

Crisis-ridden eurozone member attracts investors as growth returns SARAH PROVAN AND ADAM SAMSON


reek bond yields hit the lowest level in nearly 14 years, highlighting a comeback for the country that was the focal point of a debt crisis which crippled the eurozone a decade ago. The benchmark 10-year yield fell 3 basis points to 3.274 per cent, its lowest since September 2005, according to Refinitiv data. The fall, which comes as a result of a rally in the price of the government paper, marks a stark contrast from eight years ago, when yields climbed above 40 per cent. Athens was then at the epicentre of the eurozone debt crisis that began in 2009. The country went through a deep recession and a trio of IMF bailouts, the last of which it emerged from in the summer. The eurozone member, along with others on the region’s “periphery”, such as Portugal, has experienced a marked brightening in fortunes. Athens successfully tapped the international fixed income market last month, selling its first 10-year bond in nine years. It raised €2.5bn in a sale that attracted robust demand and was seen as an important moment for the Mediterranean country. Greece has entered a “period of economic growth that puts it among the top performers in the eurozone”, an IMF report in March said, highlighting the sense of recovery. The fund projects real gross domestic product growth of 2.4 per cent for 2019. Investors have also been

cheered by Greece’s fiscal reform programme. Moody’s cited the country’s “record of strong fiscal performance”, which is “firmly established and is likely to be sustained” when it upgraded Greece’s credit rating by two notches to B1 last month. S&P Global Ratings, which is due to publish its latest ratings report on Greece this month, rates it B+ with a “positive” outlook. Fitch has a stronger BB- rating on the sovereign. The rally in Greek government debt comes amid broad gains in the sovereign bond market, prompted by expectations that major global central banks, including the US Federal Reserve and European Central Bank, will continue their dovish monetary policies for longer. The German 10-year Bund yield, seen as a eurozone benchmark, slipped into negative territory last month for the first time since 2016. Greek equities have been in vogue this year as well. MSCI’s index of Greek stocks has soared by almost a fifth in 2019, compared with less than 15 per cent for the benchmark provider’s broad All-World index. Still, some analysts remain wary of the Greek economic situation. “The economy has returned to growth but is not as dynamic as had been hoped,” said Luka Raznatovic at Oxford Economics. “However, unless Greece can kick-start the economy and significantly expand its narrow tax base, it will remain trapped in a high-debt/low-growth environment.”

Glencore to resume DRC cobalt exports NEIL HUME


lencore has resumed shipments of cobalt from its giant Kamoto mine in the Democratic Republic of Congo. The Swiss miner and commodity trader was forced to halt sales late last year after discovering traces of uranium in cobalt. It said production would be stockpiled until a new system, called an ion exchange, was built to remove the contaminants. Glencore was then told in January to stop working on the system after the DRC’s ministry of

mines raised technical concerns. Kamoto is one of the world’s largest producers of cobalt, a material needed to make the batteries that power electric vehicles. It is 75 per cent owned by Katanga Mining, a Canada-listed Glencore subsidiary, and Gecamines, the DRC’s state mining company. While Glencore and G e camines have been trying to address those issues, they have also been exploring ways to restart shipments, they revealed on Monday. “Through interim operational solutions, Kamoto has produced

approximately 930 tonnes of contained cobalt that complies with applicable Regulations since January 2019. This represents approximately 22.5 per cent of the total production of contained cobalt since January 2019,” Katanga said in a statement. “As confirmed by the competent DRC authorities, KCC will resume the export of its cobalt hydroxide complying with the applicable regulations with immediate effect. Such resumption of exports remains subject to the regular DRC export procedures.” Shares in Glencore were down 0.3 per cent at 331p.

The quality of chart needed to raise $2m in an ICO JEMIMA KELLY


rime is an inevitable part of any kind of mania, and, as we know, crypto mania is no exception. Especially when it comes to chart crime. Last April, $2m was raised in an Initial Coin Offering (ICO) for a crypto token called Thor, which promised to “fix the gig economy”. But as of last week, the project is no longer. Thor CEO David Chin announced its closure in a post last week, citing “many regulatory challenges...that prevented us from achieving what we set out to in our white paper”. The idea of Thor, according to the aforementioned white paper, was to give temporary workers access to the kinds of benefits normally reserved for permanent employees, like pension plans, healthcare, and parental leave. All via the unique magic

of the blockchain and “tokenomics”. By April, the crypto market had taken a big dive from the dizzy heights of late 2017 and early 2018, and the idea that you could put your money into literally any ICO and the token would automatically go up in price had run out of steam. About a third as much money was raised in April as had been raised in January, according to tracker site So raising $2m in this market wasn’t bad. You might think that some time was taken in producing the white paper -- the document ICOs use to flog their mystical ledger-beans. Not so much. Here’s the first graph in it (shout out to Eric Turner, research director at industry site Messari Crypto, for drawing our attention to this chartological crime): The white paper also con@Businessdayng

tained other stuff that it clearly took a considerable amount of time to come up with, like this, in the table of contents The $2m the company says it raised has been reported as $21m across other media sites, but the company insists that’s wrong, adding that the money “turned into $1M during the crypto bear market”. The crypto market actually had a surge in April, in the weeks after the ICO, so the company would have had to keep most of the money in crypto to support the claim that the money they raised halved in value. But that would seems a little odd, given that presumably they would have actually had to spend some of it (most of it was raised in NEO tokens, so highly un-spendable). And it sounds like they indeed did spend it, given that there is now no money left.


Tuesday 16 April 2019




BlackRock moves to hire GF Securities boss for China operations

US group approaches veteran investor Tang Xiaodong to beef up mainland business HENNY SENDER


lackRock is moving to beef up its understrength Chinese operations by approaching Tang Xiaodong, a veteran investor with experience on both sides of the Pacific, to run its operations on the mainland, according to people briefed on the move. Until recently, China was not a top priority for BlackRock. At the end of last year, it had less than $430bn of its assets under management in Asia, down from $471bn at the end of the previous year, primarily as a result of outflows from China and market changes. The US fund manager had less than 7 per cent of its $6tn of total assets in Asia.

in its annual report last week. Mr Fink said BlackRock was focused on “building an onshore presence” in China, adding that it aimed to become “one of the country’s leading global asset managers”. Mr Fink said Asia was expected to generate half of the total organic growth in assets under management for the global asset management industry over the next five years, which he predicted would be “largely driven by China”. BlackRock has held talks with CICC Fund Management, a wholly owned subsidiary of state-backed investment bank China International Capital Corp, about buying a majority stake in the investment unit, according to

Tang Xiaodong worked for the Chinese Securities Regulatory Commission from 2009 to 2014 © Bloomberg

However, as China opens up its markets to foreign investors the region is becoming increasingly important for asset managers, including BlackRock. In the next four years, assets overseen by fund managers in Asia are expected to grow at a 12 per cent annual rate — or twice the rate of growth in the US — mainly driven by China. Mr Tang spent years on the derivatives desk of JPMorgan Chase in New York and then as a managing director at RBS Greenwich Capital before returning to China, where he worked for the Chinese Securities Regulatory Commission from 2009 to 2014. He then ran Beijing-based China Asset Management, the wealth management arm of the powerful Citic group, for the next four years. During the meltdown of the Chinese equity markets in 2015, the CSRC sought to bring him back without success. Most recently, he ran the securities operations of GF Securities in Hong Kong, where he oversaw the wind-down of an out of control internal hedge fund that had losses in complicated foreign exchange derivatives trades. Those trades were put in place before Mr Tang joined the firm. Larry Fink, BlackRock’s chief executive, identified China as “one of the largest future growth opportunities for BlackRock”

people close to the situation. The move to hire Mr Tang comes as China opens its markets wider to investors as a result of regulatory changes and the fact that the country’s debt and equity markets are increasingly part of both emerging market and world indices. Foreign investment accounts for only about 2 per cent of the Chinese stock and government bond markets, but that figure is expected to increase rapidly. So-called QFII quotas, once jealously handed out to foreign investors so they could invest a certain amount in Chinese securities, are far more generous today than a few years ago. That trend will only intensify as China’s big current account surplus approaches zero and needs to attract capital to finance coming deficits, as is expected this year. The asset management industry in China meanwhile is slowly coming of age. “Inefficient markets and a lack of strong corporate governance create an opportunity for active managers to generate Alpha,” noted a recent joint research report from Morgan Stanley and Oliver Wyman. “We expect the onshore China asset pool to grow from $3.8tn to $7tn by 2023 and we forecast a 10 per cent market share for foreign asset managers by 2023 and revenues of $4tn versus $1tn today.”

Lex in depth: can Snap survive? As pressure from Facebook intensifies, the group has three years to make a profit before it will need to raise fresh funds ELAINE MOORE AND TIM BRADSHAW


n the spring of 2017, global markets crowned Evan Spiegel the new boy king of tech. At just 26, Mr Spiegel took his Los Angeles based photo message and camera company Snap public for $24bn, making it the biggest IPO in years. The lossmaking company was valued more highly than Facebook, with a market capitalisation nearly 60 times bigger than sales. By the end of the year, stock-based awards made Mr Spiegel the highest-paid chief executive in the US. Two years on, Snap has suffered an executive exodus including two chief financial officers, the chief strategy officer and the head of human resources. After a disastrous redesign, user numbers have stopped growing. Shares now trade 30 per cent below the listing price. The social media network has gone from scrappy start-up to multibillion-dollar public stock to plotting its own recovery in the space of just eight years. The compressed timeline illustrates the late stage of Silicon Valley’s current investment cycle. This year is expected to set a record for tech IPOs from the likes of Lyft to Pinterest, Slack and Uber in terms of money raised and the size of listings. Like Snap, most are not yet profitable. All hope to be valued at large multiples of sales. But Snap’s experience over the past two years suggests their finances may be judged more harshly once they swap the Silicon Valley bubble for public life. Mr Spiegel promises a turnaround in 2019. User numbers have steadied and the share price is rising. Problems at larger rival Facebook could present an opportunity. But the clock is ticking. According to a Financial Times analysis, the company has just over three years to become cash flow-neutral before it will need to raise fresh funds. In that time, Snap must raise user numbers and cut costs while fighting off Facebook’s plan to neutralise all and any competition. From the beginning, Mr Spiegel’s fortunes have been entwined with Mark Zuckerberg’s social media giant. His pedigree as an elite college dropout allied with a hit social media idea echoes Mr Zuckerberg’s almost perfectly. Snap’s smartphone-designed, camera-centric messaging app Snapchat made Facebook look oldfashioned when it gained popularity in 2012. Teenagers flocked to the new network, delighted that their parents, who were panicked by the idea that it was a sexting app, did not understand how it worked. By 2013, around 400m photos and videos per day were being sent via Snapchat — more than the number shared on Facebook-owned Instagram. Brands and media companies like CNN, BuzzFeed and Starbucks were lining

up to sign deals. Facebook’s response was to try to buy the upstart. When rebuffed, it swiped Snapchat’s most creative features, including cute, animal ear selfie filters and collections of disappearing pictures and videos called Stories for Instagram. The cut and paste job was shameless. But it was both legal and effective. Instagram Stories now has more users than Snapchat. Snapchat is still popular. Over 186m people use it each day — 60m more than use Twitter. But while user numbers are high, they are declining. This is a bigger impediment to a steep valuation than financial losses. Around 5m people have stopped using the app since last year, all but destroying the notion that Snap is a Facebook-killer. While Facebook’s market value has grown to reach the equivalent of over $250 per user, Snap’s is less than $90. “Facebook has taken so much oxygen that everyone else is having trouble breathing,” says Aswath Damodaran, finance professor at New York University. “Snapchat is still attuned to a certain young demographic — it was the first video social media company. But it now needs to . . . find its niche and survive.” When Snap listed, there were plenty of jokes about the uncanny similarities between a company that created self-destructing messages and the risks involved in investing in a lossmaking organisation with few assets. The revenue multiple it sought was higher than both Twitter and Facebook’s had been when they listed and it was losing more money. Its founders retained near total control by only selling shares with no voting rights. Yet the chance to buy into a new social media platform encouraged investors to throw caution to the wind. On the first day of trading the stock rose 44 per cent. In many ways Snap looks a good bet. Social media networks are still growing. China’s WeChat, developed by Tencent, has over 1bn monthly users. YouTube has close to 2bn. Facebook has over 2bn monthly users across all its platforms. The success has encouraged new entrants like video platform TikTok. Like other social media companies Snap makes most of its money by selling adverts. And digital advertising is booming. This year, the market will exceed traditional ad spending in the US for the first time, according to eMarketer. By 2020 it is estimated to reach $150bn. Even better, Snap brims with so many ideas that it tends to make its competitors look slow and tired. Features like augmented reality rainbow vomiting clouds painted over videos and photos were an instant hit. The control wielded by Mr Spiegel and co-founder Bobby Murphy has made some uneasy. The pair hold @Businessdayng

roughly 97 per cent of voting rights, up from 88.5 per cent at the time Snap listed. That is largely to do with early investors with voting rights switching to non-voting shares in order to sell them. Without recourse to votes, the majority of investors have no say in the company’s direction. That means Snap’s decision to cover the costs of operating an aircraft owned by Mr Spiegel is not up for discussion. The perk is not uncommon for executives of large companies. But it is a questionable luxury at a business with negative operating cash flow. Snap’s rapid and sustained share price fall since listing has deterred other tech founders from trying to claim similar voting rights, says Anne Sheehan, chair of the SEC’s Investor Advisory Committee. Lyft, the ridesharing company, opted for dual class shares but the founders did not seek the same level of control. “I think even if the stock had performed well that share class arrangement would be a one-off,” she says. “Snap pushed the issue over the edge.” Shares have begun to recover in recent months with the company tightening its grip on finances — a shift credited to chief financial officer Tim Stone, who joined the company last year. Some costs however, cannot be cut. Snap expanded quickly by using external servers from Google and Amazon Web Services. This cost increases as it grows more ambitious and gains more users. Hosting costs accounted for 70 cents per user in 2018 — up from 60 cents the previous year. But negative operating cash flow also improved, by $50m in the last quarter, amid job cuts. Snap has lowered barriers for advertisers, moving from a direct sales ad team to an automated platform and cut prices. Even as user numbers have stalled revenue, at $1.2bn in 2018, has risen. And there are more advertisers to attract. In the US, Snapchat reaches more 13-24-year-olds than Instagram yet only a quarter of marketers use Snap while two-thirds use the rival platform. Since Snap listed its average monthly cash burn — the rate at which costs exceed money generated — has been $68m. If it can maintain the last quarter’s tight cost controls then this can slow to $33m — giving Snap more than three years to raise user numbers before it requires new funds. By that point it may be profitable. If not the company should take a leaf out of Tesla’s book and consider issuing convertible debt, which carries lower interest rates than plainvanilla bonds. To raise user numbers Snap needs old people. In social media terms that is anyone aged over 35. They may be less proficient at taking selfies but they do tend to be loyal to the platforms they adopt and appreciate the privacy afforded by Snapchat’s default to deletion and messaging system.

Tuesday 16 April 2019



NEWS Oyo steps up agric production with 33 Cat Next Generation excavators from Mantrac


yo State government has officially taken delivery of 33 Caterpillar Next Generation excavators from Mantrac Nigeria Limited at a ceremony held at the governor’s office Agodi, Ibadan. The 33 Cat Excavators were formally presented to the 33 local government areas by the state governor, Abiola Ajimobi at the event graced with the presence of top government officials, traditional and religious leaders. A delegation of Mantrac Nigeria Limited, the sole authorised dealer for Caterpillar products and services in Nigeria, led by its public sector manager, Alex Nwoko, was present for the formal hand over. In his address, Governor Ajimobi said, “The Excavators were acquired by the government to boost agricultural production, improve rescue operations, urban renewal and for other environmental intervention purposes.” He recalled that one of the Excavators was effectively deployed for rescue operations during a recent building collapse in Ibadan. It helped in rescuing victims from the rubble alive. He said, “The latest investment is in addition to the 33 Cat Machines earlier purchased. The Excavators will be used by the 33 local governments and the 35 local council development areas (LCDAs). He acknowledged the quality of Caterpillar.

“We are proud to be associated with you at Mantrac Nigeria, your products and your professionalism. 1The 33 Excavators we are inaugurating today are another unprecedented feat,” Ajimobi said. Bimbo Kolade, state commissioner for local government and chieftaincy matters, said it was not just another first in Oyo State, but in Nigeria, saying, “There has not been a single government in Nigeria that has at one time commissioned 33 Excavators. “These are not just excavators but the latest of their kind anywhere in the world. Indeed, this is another first for us. Each Excavator comes with full automation, that is, it can be controlled such that it can only move within the desired limit.” Nwoko described the occasion as ‘a great honour’ “We are proud to highlight that this is the highest single investment by any state or Federal Government in road construction in over 20 years, so we are happy to be part of this partnership. It is also remarkable to note that the Excavators are Caterpillar Next Generation of Excavators (NGE) and I am proud to announce that Oyo State government is one of its first and largest users in African. “It reduces maintenance cost by up to 25%, increases operators efficiency up to 40% and increases fuel efficiency by up to 15%, over previous models.”

‘Despite shrinking markets, Nigeria’s Brent crude maintains global edge’ HARRISON EDEH, Abuja


lobal oil outlook has shown that Nigeria’s Brent crude remains a ‘hot market brand’ in international oil markets, despite shrinking demands, according to oil industry experts. This is coming despite recent concerns that Nigeria is already losing ground on its traditional oil markets following decision by Indian oil, a major buyer of Nigeria’s crude, to look towards the United States of America for purchase of 600,000 barrels of oil per day. Oil industry watchers are however of the opinion that Nigeria’s crude oil will not suffer from India’s decision, as Nigeria can look towards Europe and Asian countries. The Brent crude, which is light, is seen as choice of virtually most oil companies in Europe and Asia. BusinessDay findings reveal that in as much as Indian oil

is looking towards the United States, Ukraine alongside the Chinese government is looking towards Nigeria to buy its ‘sweet crude’. “It is not a problem if India is buying from America. America, yes, used to be our biggest customers. But the advantage we have over a whole lot of other countries is that our Brent crude is ‘sweet oil’. It is light and unlike every other oil that may be difficult to process. That is why our oil sells fast at Rotterdam markets, because it is sweet crude,” Hakeem Ali, oil sector analyst, says in an e-mailed response. The Nigeria’s Brent is a sought after global brand coming on the heels of it being a sweet crude and light for refining, Hakeem states further. “We go to the market directly using the IoCs. Just like India is looking towards America, Ukraine is looking towards Nigeria, China is looking towards Nigeria. The exit of India is not a major problem. Saudi Araibia is the only country that can rival us

globally in terms of sweet crude. If you look at the volume of oil India is buying from us, it is not going to have adverse effects on us, as other countries are also looking towards Nigeria’s oil such as Ukraine and China,” he says. Also, Adeola Adenikinju, a professor of Energy Economics at the University of Ibadan, says Nigeria may not experience a major setback in losing its traditional oil markets, but there is an urgent need to re-think the oil strategy. ”Nigeria’s Bonny light is great, with no sulphur and easy to refine. That is not to say that there would not be competition. Nigeria needs to balance between domestic processing and export of crude to address concerns of volatility. Nigeria should see crude and gas as engine for domestic growth. “We need to have our refineries working, revive the gas stream sector, as well as have direct link with refineries

abroad, so we don’t sell crude directly. We could process and sell there and make more gains. We must re-think our strategy,” Adenikinju notes. Available data show, “For India in 2018, Nigeria exported 121 million barrels of crude to India. For other countries the total exports for 2018 show: The United States bought 87 million barrels of oil, Spain bought 61 million barrels, Netherlands 65 million barrels, France 45 million, South Africa 33 million, the United Kingdom 26 million, Canada 22 million, Indonesia 22 million, with Italy making purchase of 16 million barrels of oil.” Further records show that Nigerians consume 445,000 barrels per day, which still raises concern because they have to be refined outside the country before bringing them in for consumption, which is also taking its toll on the overall economy, as we lose out in the possible gains and value added benefits.

NigerStar 7 announces acquisition of pipelay vessel SEGUN ADAMS


igerStar 7 has announced the acquisition of the pipelay vessel -Seven Antares. The vessel will provide both NigerStar 7 and Nigeria a fully owned versatile pipelay vessel ideal for conventional, heavy lifting and hook-up projects. The Seven Antares was built in 2009, has a 300t main crane capacity and is a 120t S-lay vessel with capacity to lay pipe of up to 60-inch diameter; with an accommodation area in excess of 330 berths and a deck area of over 1300m². The acquisition of the Seven Antares adds up to other recent investments made by NigerStar 7 to strengthen its local fleet and its commitment to the development of Nigerian offshore oil and gas industry, this reinforces the company’s leading role in the ownership of Nigerian flagged vessels and reflects its strategy of domiciling its fleet with the objective of meeting

clients’ needs and the requirements of the Nigerian Local Content Act. Derek Izedonmwen, sales and marketing director of NigerStar 7, said: “The Seven Antares acquisition is a very important milestone for us. I’m deeply proud of this investment, as it reinforces NigerStar 7 commitment to invest in Nigeria through the acquisition of strategic local assets and to continue to invest and to develop our people. The Seven Antares is currently laying pipe for one of our clients and I’m sure she will be kept busy supporting the growth of Nigeria’s energy industry.” NigerStar7 Limited is a Nigerian company that brings together the engineering, installation and project management expertise of Subsea 7, with the fabrication capacity and capability of Nigerdock (a subsidiary of Jagal). Based in Lagos, NigerStar 7 is dedicated to serving Nigeria’s offshore oil and gas industry to execute the largest and most complex offshore projects.

L-R: Shileola Ibironke, MD/CEO, Micromedia Marketing Limited; Toyin Odulate, CEO, Olori Cosmetics; Elizabeth Osho, CEO, SoMe Solutions; Jovita Madojemu, MD, Pundit Book-Keeping Services, and Lehle Balde, senior associate, BusinessDay Media, at the BusinessDay millennial hangout with the theme: Balance For Better, at Impact Hub in Ikoyi Lagos. Pic by David Apara

AfDB approves $15m investment package for InfraCredit Hope Moses-Ashike


oard of the African Development Bank (AfDB) has approved a $15 million investment package to Infrastructure Credit Guarantee Company (InfraCredit) to support infrastructure financing through domestic debt capital markets in Nigeria. The investment package to InfraCredit is comprised of a subordinated loan of $10 million and a risk sharing facility of up to $5 million. This intervention will promote local currency infrastructure financing and further development of the domestic capital market.

InfraCredit is a specialised infrastructure credit guarantee company, established to enhance local currency debt instruments - mainly bonds, to finance eligible infrastructure projects in Nigeria. This is intended to uplift the credit rating of such bonds, allowing institutional investors to include them in their portfolios. The Nigerian Sovereign Investment Authority (NSIA) in collaboration with GuarantCo (part of the Private Infrastructure Development Group) founded InfraCredit. The Africa Finance Corporation (AFC) and KfW, the German Development Bank, have joined these initial investors. The AfDB’s investment in

InfraCredit will catalyse local institutional investor funds, including pension funds, into financing long-term infrastructure projects through the local bond markets. The investment boosts InfraCredit’s qualifying capital base through the subordinated loan; it also improves its capacity to expand its guarantee business through the proposed risk sharing arrangement. Through this intervention, the African Development Bank is helping to stimulate local currency financing across diverse infrastructure transactions, thereby improving economic diversification and competitiveness, as well as promoting more equitable growth, strengthening @Businessdayng

local value chains and financial markets in Nigeria. InfraCredit’s operations will catalyse infrastructure investments in critical sectors such as renewable energy, housing, transportation, agricultural infrastructure, and telecommunications, which are critical for the country’s economic development. These also align with the Bank’s High 5 agenda. Stefan Nalletamby, the bank’s director of the Financial Sector Development, said, “The Bank’s support will strengthen the capital base of InfraCredit, underpinning the expansion of the Company’s core business of guaranteeing of bonds issued to fund infrastructure projects.


Tuesday 16 April 2019


Live @ The STOCK Exchanges Prices for Securities Traded as of Monday 15 April 2019 Company

Market cap(nm)

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Market cap(nm)

Price (N)




PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 213,271.35 6.00 0.84 148 6,753,956 UNITED BANK FOR AFRICA PLC 212,036.41 6.20 -4.62 225 13,652,834 ZENITH BANK PLC 643,628.12 20.50 0.24 257 5,580,341 630 25,987,131 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 260,240.87 7.25 -3.33 296 9,765,644 296 9,765,644 926 35,752,775 BUILDING MATERIALS DANGOTE CEMENT PLC 3,169,534.38 186.00 -1.59 54 253,788 LAFARGE AFRICA PLC. 193,293.55 12.00 - 48 400,534 102 654,322 102 654,322 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 347,182.29 590.00 - 6 1,917 6 1,917 6 1,917 1,034 36,409,014 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 - 5 514,500 UPDC REAL ESTATE INVESTMENT TRUST 14,408.66 5.40 - 0 0 5 514,500 5 514,500 OTHER FINANCIAL INSTITUTIONS NIGERIA ENERYGY SECTOR FUND 411.91 552.20 - 0 0 VALUEALLIANCE VALUE FUND 3,312.39 103.20 - 0 0 0 0 0 0 5 514,500 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 1 100 OKOMU OIL PALM PLC. 76,312.80 80.00 - 15 19,046 PRESCO PLC 62,750.00 62.75 - 9 7,420 25 26,566 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 511.20 4.26 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,650.00 0.55 - 11 1,016,358 11 1,016,358 36 1,042,924 DIVERSIFIED INDUSTRIES A.G. LEVENTIS NIGERIA PLC. 741.24 0.28 -9.68 4 103,919 JOHN HOLT PLC. 202.36 0.52 - 4 2,296 S C O A NIG. PLC. 1,903.99 2.93 - 0 0 TRANSNATIONAL CORPORATION OF NIGERIA PLC 48,777.59 1.20 0.84 92 8,303,197 U A C N PLC. 20,169.08 7.00 -0.71 70 609,814 170 9,019,226 170 9,019,226 BUILDING CONSTRUCTION ARBICO PLC. 711.32 4.79 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 36,300.00 27.50 - 21 58,508 ROADS NIG PLC. 165.00 6.60 - 0 0 21 58,508 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 4,313.34 1.66 - 14 216,465 14 216,465 35 274,973 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 10,334.94 1.32 - 2 192 GOLDEN GUINEA BREW. PLC. 242.22 0.89 - 1 180 GUINNESS NIG PLC 131,422.97 60.00 - 16 40,921 INTERNATIONAL BREWERIES PLC. 202,002.76 23.50 - 3 5,520 NIGERIAN BREW. PLC. 511,801.73 64.00 6.31 120 1,260,040 142 1,306,853 FOOD PRODUCTS DANGOTE FLOUR MILLS PLC 46,000.00 9.20 9.52 92 1,571,353 DANGOTE SUGAR REFINERY PLC 165,000.00 13.75 0.36 42 707,241 FLOUR MILLS NIG. PLC. 67,246.23 16.40 -2.67 50 1,740,942 HONEYWELL FLOUR MILL PLC 9,357.63 1.18 -0.84 14 577,950 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 766.26 4.30 - 1 3,600 NASCON ALLIED INDUSTRIES PLC 50,471.80 19.05 - 19 84,910 UNION DICON SALT PLC. 3,676.41 13.45 - 0 0 218 4,685,996 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 20,660.22 11.00 8.91 28 240,288 NESTLE NIGERIA PLC. 1,151,095.41 1,452.20 -0.26 29 241,301 57 481,589 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 4,815.75 3.85 - 6 7,714 6 7,714 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 37,521.01 9.45 6.78 35 194,499 UNILEVER NIGERIA PLC. 192,457.68 33.50 - 29 143,106 64 337,605 487 6,819,757 BANKING ECOBANK TRANSNATIONAL INCORPORATED 189,917.86 10.35 -3.27 61 7,451,513 FIDELITY BANK PLC 55,921.36 1.93 2.66 88 3,991,070 GUARANTY TRUST BANK PLC. 1,033,034.39 35.10 0.14 163 14,356,126 JAIZ BANK PLC 14,437.48 0.49 2.08 16 825,800 SKYE BANK PLC 10,687.83 0.77 - 0 0 STERLING BANK PLC. 74,855.09 2.60 -0.38 22 10,256,047 UNION BANK NIG.PLC. 199,477.16 6.85 5.38 60 26,217,807 UNITY BANK PLC 9,234.58 0.79 - 9 110,749 WEMA BANK PLC. 27,773.62 0.72 1.41 35 1,283,456 454 64,492,568 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 0 0 AIICO INSURANCE PLC. 4,851.14 0.70 2.94 18 347,035 AXAMANSARD INSURANCE PLC 19,950.00 1.90 - 19 166,172 CONSOLIDATED HALLMARK INSURANCE PLC 2,113.80 0.26 8.33 5 761,150 CONTINENTAL REINSURANCE PLC 19,811.94 1.91 - 0 0 CORNERSTONE INSURANCE PLC 2,945.90 0.20 - 6 109,069 GOLDLINK INSURANCE PLC 2,001.98 0.44 - 0 0 GUINEA INSURANCE PLC. 1,228.00 0.20 - 0 0 INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 0 0 LASACO ASSURANCE PLC. 2,197.03 0.30 - 8 134,635 LAW UNION AND ROCK INS. PLC. 2,320.02 0.54 - 7 131,250 LINKAGE ASSURANCE PLC 4,000.00 0.50 - 4 13,200 MUTUAL BENEFITS ASSURANCE PLC. 1,680.00 0.21 -4.55 9 540,720 NEM INSURANCE PLC 10,613.81 2.01 - 14 270,295 NIGER INSURANCE PLC 1,547.90 0.20 -9.09 3 571,006 PRESTIGE ASSURANCE PLC 2,960.40 0.55 - 5 130,593 REGENCY ASSURANCE PLC 1,733.88 0.26 4.00 16 2,210,615 SOVEREIGN TRUST INSURANCE PLC 2,001.80 0.24 -4.17 11 45,715,904 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 - 3 4,990 UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 0 0 UNIVERSAL INSURANCE PLC 3,200.00 0.20 - 0 0 VERITAS KAPITAL ASSURANCE PLC 3,189.33 0.23 4.55 3 660,525 WAPIC INSURANCE PLC 5,353.10 0.40 - 12 495,866 143 52,263,025 MICRO-FINANCE BANKS FORTIS MICROFINANCE BANK PLC 11,799.67 2.58 - 0 0 NPF MICROFINANCE BANK PLC 3,361.36 1.47 - 5 117,500 5 117,500

MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 3,780.00 0.90 - 0 0 ASO SAVINGS AND LOANS PLC 7,370.87 0.50 - 0 0 INFINITY TRUST MORTGAGE BANK PLC 5,922.05 1.42 - 0 0 2,265.95 0.20 - 0 0 RESORT SAVINGS & LOANS PLC UNION HOMES SAVINGS AND LOANS PLC. 2,949.22 3.02 - 0 0 0 0 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 7,740.00 3.87 1.84 50 752,718 36,467.56 6.20 -2.36 22 323,285 CUSTODIAN INVESTMENT PLC DEAP CAPITAL MANAGEMENT & TRUST PLC 660.00 0.44 - 0 0 FCMB GROUP PLC. 35,842.91 1.81 0.56 71 2,119,836 ROYAL EXCHANGE PLC. 1,183.44 0.23 -8.00 11 712,288 STANBIC IBTC HOLDINGS PLC 473,113.55 46.20 0.43 16 605,597 16,800.00 2.80 - 44 463,147 UNITED CAPITAL PLC 214 4,976,871 816 121,849,964 HEALTHCARE PROVIDERS EKOCORP PLC. 1,680.29 3.37 - 0 0 817.22 0.23 - 17 4,039,400 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 17 4,039,400 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 544.04 0.55 - 0 0 0 0 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 FIDSON HEALTHCARE PLC 6,450.00 4.30 - 8 13,912 11,002.06 9.20 -1.60 30 164,306 GLAXO SMITHKLINE CONSUMER NIG. PLC. MAY & BAKER NIGERIA PLC. 4,916.92 2.85 5.56 36 1,851,036 1,063.53 0.56 - 5 20,632 NEIMETH INTERNATIONAL PHARMACEUTICALS PLC NIGERIA-GERMAN CHEMICALS PLC. 556.71 3.62 - 0 0 PHARMA-DEKO PLC. 325.23 1.50 - 0 0 79 2,049,886 96 6,089,286 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 710.40 0.20 - 2 110 2 110 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 1,470.89 0.50 - 0 0 0 0 IT SERVICES CWG PLC 6,413.06 2.54 - 1 50 648.00 6.00 - 0 0 NCR (NIGERIA) PLC. TRIPPLE GEE AND COMPANY PLC. 346.47 0.70 - 0 0 1 50 PROCESSING SYSTEMS CHAMS PLC 1,408.82 0.30 7.14 91 36,842,171 11,088.00 2.64 - 0 0 E-TRANZACT INTERNATIONAL PLC 91 36,842,171 94 36,842,331 BUILDING MATERIALS BERGER PAINTS PLC 2,622.90 9.05 - 15 37,786 23,625.00 33.75 - 6 1,435 CAP PLC CEMENT CO. OF NORTH.NIG. PLC 222,125.17 16.90 5.63 18 338,385 738.63 0.35 9.38 2 171,953 FIRST ALUMINIUM NIGERIA PLC MEYER PLC. 313.43 0.59 - 4 8,795 PORTLAND PAINTS & PRODUCTS NIGERIA PLC 1,999.41 2.52 - 15 91,830 1,279.20 10.40 - 0 0 PREMIER PAINTS PLC. 60 650,184 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,256.91 2.09 - 1 20 CUTIX PLC. 2,747.66 1.56 -3.11 30 1,260,492 31 1,260,512 PACKAGING/CONTAINERS BETA GLASS PLC. 29,173.37 58.35 - 7 7,093 GREIF NIGERIA PLC 388.02 9.10 - 0 0 7 7,093 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 0 0 0 0 98 1,917,789 CHEMICALS B.O.C. GASES PLC. 1,577.57 3.79 - 1 5,717 1 5,717 METALS ALUMINIUM EXTRUSION IND. PLC. 1,803.64 8.20 - 1 10 1 10 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 0 0 0 0 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 55.00 0.25 - 5 108,771 5 108,771 7 114,498 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,252.54 0.20 - 0 0 0 0 INTEGRATED OIL AND GAS SERVICES OANDO PLC 60,292.35 4.85 -1.02 75 967,806 75 967,806 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 64,149.90 177.90 - 18 39,196 CONOIL PLC 15,960.90 23.00 - 19 47,522 ETERNA PLC. 5,346.99 4.10 - 28 306,301 FORTE OIL PLC. 35,101.87 26.95 - 31 220,593 MRS OIL NIGERIA PLC. 6,354.80 20.85 - 1 645 TOTAL NIGERIA PLC. 66,546.28 196.00 - 24 32,169 121 646,426 196 1,614,232 ADVERTISING AFROMEDIA PLC 2,219.52 0.50 - 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. 376.43 0.32 - 4 20,000 4 20,000 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 3,242.23 5.50 - 1 6,500 TRANS-NATIONWIDE EXPRESS PLC. 351.64 0.75 - 0 0 1 6,500 HOSPITALITY TANTALIZERS PLC 642.33 0.20 - 0 0 0 0 HOTELS/LODGING CAPITAL HOTEL PLC 4,801.22 3.10 - 1 50 IKEJA HOTEL PLC 3,471.59 1.67 - 2 116,273 TOURIST COMPANY OF NIGERIA PLC. 7,862.53 3.50 - 2 210 TRANSCORP HOTELS PLC 41,042.18 5.40 - 1 299 6 116,832 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 4,800.00 0.40 - 0 0 0 0 PRINTING/PUBLISHING ACADEMY PRESS PLC. 199.58 0.33 - 1 100 LEARN AFRICA PLC 1,126.32 1.46 - 1 13,209 STUDIO PRESS (NIG) PLC. 1,183.82 1.99 - 0 0 UNIVERSITY PRESS PLC. 780.85 1.81 - 7 69,893 9 83,202 ROAD TRANSPORTATION ASSOCIATED BUS COMPANY PLC 596.77 0.36 -10.00 11 368,100 11 368,100 SPECIALTY INTERLINKED TECHNOLOGIES PLC 766.91 3.24 - 0 0 SECURE ELECTRONIC TECHNOLOGY PLC 1,126.31 0.20 - 0 0 0 0


Tuesday 16 April 2019





Tuesday 16 April 2019


Media business

How far can Guinness Gold go? Stories by Daniel Obi Media Business Editor


ome events in the Nigerian beverage market especially the beer category are pushing good observers to sometimes question the creativity in the industry. Some of the major players are repackaging old and waning brands with new identity, copying or just want to be seen as following trends with introduction of new products with little efforts to rejuvenate the old brands. NBL recently launched series of new products including Tiger and Stella Beers but its Ace Root which it launched in 2015 as a response to Guinness Orijin bitter drink is either consumed by competition or perhaps performing poorly in the market. It seems there is no effort to revitalise the product. Also, Guinness Nigeria recently entered the market with Guinness Gold, a brand new larger beer. At the launch of the new brand, Adenike Adebola Marketing Director, Guinness Nigeria Plc. was reported saying that the company is “thrilled to see the great interest in Guinness Gold” While delighted about the launch of Guinness Gold, Adenike may have avoided talking about the fate of Harp, Gordon Spark and Satzenbrau, its beer brand that was launched in early 90s with so much elaboration and pomp but which unfortunately had a short market life span. One of the major challenges of Satzenbrau was aiming to challenge Gulder by NBL instead of creating its own value for consumers. This is the same root Ace Roots took. The consumers of Satzenbrau also had their complaints against the ‘Final Word’ that made the brand lose large appeal in the Nigerian market but whatever the complaints were, some analysts believe that the brand owners did not really tap into the Nigerian consciousness. Today, it is not sure whether the new Guinness Gold is repackaged Harp, Gordon Spark or Satzenbrau , but the brand owners said the new product is infused with crystal malt and amber malt and that Guinness Gold has a depth of flavour that no other lager beer anywhere can lay claim to. The question is why does Guin-

ness need to introduce new product in the market when it is struggling to invigorate some of its other brands in that beer category? Perhaps its plan is to re-enact its magic with Orijin. Though research can motivate the introduction of new product in the market to meet consumer needs, but a brand owner also needs the same consumer insight, backed by research to keep old products alive in the market place. After all, the introduction of those old products was informed by market research. Guinness Nigeria had in 2013 introduced Orijin bitter drink which recorded huge success in the market. Packaged in glass and pet bottle, the drink unlike beer, does not contain barley or hops, rather it was marketed as “a bittersweet blend with flavours of African herbs and fruit. The drink resonated with desires of consumers especially African men. “Folks have been buying and drinking Orijin. The patronage and love shown towards this brand is so strong it could almost be patriotic! Everyone has a good story to tell about Orijin. It is not sure if Guinness ever knew what was going to happen about the brand at the time of launch. They could never have. Although learning points may have been taken from how competition in the brand of Alomo Bitters has been able to make hay in Nigeria, Guinness would never have imagined the instant success that greeted Orijin’s

take off. “Each passing day, more and more people have been switching. And as the switch happens, stories around the brand keep getting more excitingly intricate. Stories of libido and health enabler are some of the strongest here. People associate the brand with sex enhancement. They also say it has cleansing effects on excess body sugar”, a brand analyst said. It was amazing how Orijin, immediately after launch, gained such instant acceptance, but it appears that taste rather than advertisement was the magic for Orijin. If not, how come many advertisements on TV, newspapers and billboards failed to jolt the consumption of other brands such as Harp, Gordon Spark and Satzenbrau. This does not mean that advertisement is not a stimulus but advertisement that resonates with consumers coupled with taste. It is not known the strategy which Guinness Nigeria wants to employ this time to create the necessary traction for its new Guinness Gold product which it did not apply to Harp, Gordon Spark and Satzenbrau brands. But one thing is sure; Guinness Gold will meet strong competition in the Nigerian marketplace. If Guinness Nigeria is serious to push Guinness Gold to be competitive in Nigeria’s intensive beer war, the international company needs to shift from its conservative approach to marketing to be more

L-R: Olaniyi Alabi, manager, sales & trade development sales & distribution, MTN Nigeria Communication Ltd; Felicia Ayara, director of admin, communication facilitators Ltd; Anthony Nwocha, overall best sim registration officer (SRO) communication facilitators Ltd; Adewole Ayara, MD/CEO, Communication Facilitators Ltd and Obianuju Gozie- Iwudoh, manager, customer acquisition and compliance, MTN Nigeria Communication Ltd, at the Communication Facilitators Ltd.

open- minded. Perhaps, Guinness needs to re-examine itself, its marketing strategy and its engagement with various stakeholders including its teeming consumers and the media. The Diageo subsidiary seems to be too cautious and conservative with its engagement with the public in an internet-dictated world when the youth, with its large population wants to bubble. Kola Oyeyemi, a marketing expert has always believed that: “Technology is reversing age-old marketing conventions. The era of competitive advantage is gone” “The youthful profile of the Nigerian market is redefining how companies sell their products and services. How to speak to, attract and sell to these young chaps is a new challenge for firms. The young folks of today were born to the technology era. If we are going to serve them then we will have to unlearn a lot of and social devices and systems including Big Data analytics tools and technologies will certainly help us to achieve this.” Proper engagement in all fronts and touch points is absolutely essential. It is acknowledged that Guinness Nigeria is a respected brand but the firm appears to be dictated to or taking some of its marketing strategies either from London or approved from London for other markets. This may have its merits and demerits, but locally generated marketing strategies are likely to resonate more with specific markets especially in Africa. Guinness therefore needs to step up and rejig its consumer-engagement drive in specific countries like Nigeria with locally developed ideas and countryspecific concepts that will engage and resonate with consumers. As Guinness thinks of retracing its steps in reclaiming lost grounds, it needs to think outside the box and create programmes that will resonate with the public the way ‘Udeme My Friend’ did. The days of conservatism in marketing are over. This is the time for the youth. They need appropriate engagement to connect properly with the brand. Guinness Gold can become another ‘Orijin’ in terms of acceptability in the Nigeria’s competitive but bourgeoning beer market if appropriate marketing is done.

Firms, schools, banks, retailers dealing on children products to converge on Lagos for W/African Baby Fair


layers on baby products across Nigeria and West Africa, including manufacturers, retailers, banks with baby products and services, schools, manufacturers of medication, clothing, diapers, cots, feeding equipment, toys and gadgets for children among other products will converge on Lagos in August this year for supposedly the biggest Baby Fair. The fair envisioned to be the largest child-focused trade fair in W/

Africa, according to the organisers will offer participants the opportunity to showcase their products and services and to network and interact with their consumers. The organisers said the three-day event slated for August 2-4 at Muri Okunola Park on Victoria Island, is expected to feature array of products and services for early-child needs as well as side attractions and crawling competitions for children. The project director, Tolupe

rundero told BusinessDay in Lagos that the fair intends to provide an organised single meeting point for young parents and sellers of kiddies’ items as well as service providers to meet current and potential clients. “We particularly want to encourage SMEs that have grown their businesses using social media. We also intend to expand the scope of the event industry in Nigeria” as event industry is one of the fastest growing in the world and holds a lot of

promise. “A key part of the Baby Fair is the social impact and philanthropy initiative wherein the general public is encouraged to donate items that they no longer use for their babies and infants. Such items will be distributed among orphanages and other less-privileged individuals” Also speaking, Jide Benson, a communication expert who is part of the project team said more than 50 exhibitors are expected as the venue. @Businessdayng

Street Project Foundation partners AAAN-Womenin-Advertising on digital amazons


treet Project Foundation, an organization committed to youth employment and cross-cultural dialogue through creative arts, has announced a partnership with the Association of Advertising Agencies of Nigeria’s (AAAN) Women-in-Advertising (WIA) on the launch of its new initiative, “Digital Amazons”. Digital Amazons is a three-week capacity building programme for 18-25 year old females, who exceptionally gifted in different areas of the Creative Arts. The goal is to expose participants to latest digital skills that will prepare them for work in Advertising and the creative industry at large. Call for applications kicked off on 1 April, with the deadline for applications for the first cohort fixed for 28 April. The first cohort is expected to run from scheduled from 13 -31 May at NG_HUB from Facebook, Yaba, Lagos. Speaking on the initiative, WIA Chairperson, Tope Jemerigbe said in a statement: “We embraced this initiative by Street Project Foundation because it aligns with our objective to bring more women into our profession and improve their skill-sets.”

Chain Reactions Nigeria shines with SABRE, Pitcher Awards


t was double honours for Chain Reactions Nigeria, one of the country’s foremost public relations and integrated communications consulting firms and the West Africa’s partner of Edelman, the world’s largest PR firm with presence in 65 countries across the globe, at the SABRE and Pitcher Awards. This is as SABRE Awards, the world’s largest and most sought-after public relations awards competition which recognises superior achievement in branding and reputation, recently awarded Chain Reactions a Certificate of Excellence in the 2019 Sabre Awards Africa in the Technology Category for its excellent work on Facebook.

New Chivita Ice Tea pack draws appreciation from consumers


long with its promise of refreshingly natural goodness, Chivita Ice Tea’s recent visually disruptive packaging design that is modern, aspirational and trendy, is helping the brand stand out in a competitive marketplace. A cross-section of consumers who offered their perspective on the new look Chivita Ice Tea, according to a statement noted that they were excited by the brand’s new positioning under the Chivita Masterbrand. Its new package design is a bold statement of its premium quality, health benefits and consumers’ benefits that has made the product visually appealing to consumers as it maintains its front shelf space and preference.

Tuesday 16 April 2019



Branding It is not easy for SMEs in Nigeria to secure bank loans - Dennis Okorie Dennis Okorie is the founder and chief executive officer of Mac-Den Limited, a major distributor of alcoholic beverages in Nigeria. With over 18 warehouses located across the country, Mac-Den is one of the biggest distributors of International Breweries PLC products. In the 2019 edition of distributors gala hosted by the company, Mac-Den clinched first prize as the best performing distributor and went home with prizes, including a six ton canter truck, a Tata truck, tricycles and the star prize of the night; a Prado SUV, 2018 edition. He spoke on the journey so far. Excerpts. Congratulations on being the best performing dealer for 2018. Please tell us about yourself and how you started this business? y name is Dennis Okorie, I am from Ihiala in Anambra State and I am a business man. I started the distributorship business in 2012 in Ihiala. That was where I had my first warehouse and from there, I began to expand until I moved to Enugu where I continued to manage the business in Enugu and Ihiala. We currently have about 18 warehouses across the country and we still have plans to open more branches in other areas, including Lagos state where we currently have two warehouse locations. So how did your relationship with international Breweries PLC begin? When I started the business, it was on a very small scale and as a young man I was looking up to those people who have been in the business before me and striving to be like them. I was one of the youngest distributors then. But with the zeal I had and the determination to work hard and succeed, my efforts did not go unnoticed by International Breweries. They started supporting me with vehicles and other things I needed to grow. Is the business very capital intensive? This business is not what you will just start without much preparation. Yes it is capital intensive but it also takes a lot of determination and the Grace of God. We thank God that we began to make headway and gradually began to expand. Loans are very difficult to come by and even when the bank gives you a facility, the interest rates are very high and it is very discouraging. But we continue to persevere and give it our all. You just won a brand new SUV and loader trucks for yourself as the best performing distributor of 2018. How will these vehicles impact your business going forward? I will say kudos to International Breweries and they should keep it up. For us to win this award it means we are doing something right and I believe we will double our performance next year. It is very good of IB to present these things to us because it will motivate us to work even harder and serve our customers even better. We are confident that we will clinch more prizes by the time they host us to the C19 awards. What is your assessment of distribution and logistics in Nigeria today and to what extent has this situation affected your business? For logistics, we are doing very well just that the challenge we have currently is offloading our products. We currently don’t have forklifts in all our warehouses but thanks to International Breweries, they have promised to deploy some forklifts to those places where we need them the most. Aside from infrastructure, what other major challenges do you face as a distributor in the country? In Lagos for instance, for us to move from Agege where our warehouse is to Isolo, it takes a long time because of the traffic situation. Traffic in major cities is one of the big-


L-R: Annabelle Degroot, managing director, International Breweries Plc; Dennis Okorie, winner of IB’s distributors National Award; Adaobi Okorie, managing director, Mac-Den Ltd, and Godwin Oche, national sales director, at IB’s distributors’ gala night held in Lagos, recently.

gest factors that impede us from meeting out targets and meet customers demand in good time. Other than the traffic situation, the road network too is a problem. Some roads can be quite narrow and we will need smaller trucks to ensure that our products get to the customers. As it stands now, we still require different trucks for our different operations and that is why we are happy with the truck we won during the award ceremony. Another major challenge we face is having good and hon-

Considering my humble background, I never knew I will be a big time distributor of International Breweries products and for this I am eternally grateful to them and to my family, especially my wife who has been a huge support and understands the demand the business sometimes have on my time

est drivers who will not try to short-change the business in the course of doing their job. They move your goods to sell but at the end of the day the returns will not equal the goods sent out and they are not able to account for difference. It is a major challenge for most distributors but we try to find a way around it so the business keeps moving. Are there any major regulatory/ government agency challenges you face as a distributor? We do not have any problem with the government or its agencies. We pay our regular charges due to government and our taxes so we do not have any issues at all with government. What advice will you offer young entrepreneurs who are desirous of success? I will advise them to be hard working and not be discouraged especially when they see bigger distributors who may have been in the business for more than 20 years pushing volumes. They should believe in themselves and not be intimidated by the people already in the business. What is your staff strength like? Currently, we have about 300 staff in total across all our warehouses and about 15 of them are in managerial positions that handle the day-to-day running of the business. As CEO of Mac-Den Limited, your head office is Lagos. How do you coordinate all your branches efficiently? We have a system that we operate and with this system, we are able to have a bird’s eye view on our operations nationwide. We are even planning to upgrade the system so that from here, while I am in Lagos, I can easily know what is happening in my other warehouses, how the trucks are being loaded and moved and so on. In addition, International

Breweries has promised to support us with DMS software that will make coordination even more efficient. How easy is it for you to get loans from the banks? It is not easy at all to get loan from banks in Nigeria as a small and medium scale enterprise (SME) owner. This is why I am really grateful to international Breweries because they give us credit facilities with which we do our business. It is with this facility that we are able to succeed at what we do. Getting loans from banks are not only difficult but the interest rates are cut-throat and that erodes the profit margin. As long as we trade with the facility granted us by IB, we enjoy profits but with bank loans, the profit margin is very small. Don’t forget that for a business such as this, one needs to get vehicles, pay staff salaries, coupled with the issues we have with bad truck drivers and so on. Remember also that the trucks will have to be serviced. Sometimes our trucks go to the mechanic causing delays in supply and so on. By the time you take bank loans, you may end up servicing the interests before the facility is due for repayment and will most likely end up not recording much profit. So here, IB has really come to our aid and their facility to us is helping in no small measure. Any last words? First of all, I must thank God for everything because he is the one that has been my help up to this position where I currently find myself. Considering my humble background, I never knew I will be a big time distributor of International Breweries products and for this I am eternally grateful to them and to my family, especially my wife who has been a huge support and understands the demand the business sometimes have on my time.



Tuesday 16 April 2019



Tuesday 16 April 2019



POLITICS & POLICY INEC hires El-Rufai’s lawyer to defend case at tribunal …Shehu Sani raises alarm Abdulwaheed Adubi, Kaduna


enator representing Kaduna Central Senatorial district at the Upper Chamber of the National Assembly and the candidate of the People’s Redemption Party (PRP) in the last National Assembly elections, Senator Shehu Sani has raised the alarm over the hiring of Governor El-Rufai’s lawyer, A.U. Mustapha (SAN) by the Independent National Electoral Commission (INEC), for the ongoing tribunal cases. Shehu Sani disclosed this while briefing newsmen in his Kaduna residence on Monday. According to him, his legal team has already written to the commission on the matter titled:

‘An Expose of Ground Conspiracy against Senator Comrade Shehu Sani by Independent National Electoral Commission and Government of Kaduna State’. While lamenting the conspiracy between Kaduna State Governor, Nasir Ahmed El-Rufai and the Commission, he said: “We have documents to demonstrate that our claims are true, and that the said lawyer is a personal lawyer to the governor. “Of all lawyers in the country, why must INEC hire El-Rufai’s lawyer in a case that involved one of his aides.” The Senator said despite the intimidation, he would never relent, or remain silent in the struggle to get justice and reclaim his stolen mandates. “I will not remain silent when

Bauchi low IGR, economic activities worry Bala Mohammed Haruna Ningi, Bauchi


ow Internally Generated Revenue (IGR) and lack of micro-economic activities are causing concern for the Bauchi State Governor-Elect, Senator Bala Abdulkadir Mohammed. He expressed the concern last the weekend at an interactive session with members of Body of Bauchi Lawyers of Conscience (BOBALAC) who promised to provide him and the PDP with free legal service at the Election Petition Tribunal. Recall that members of the association promised to provide 50 lawyers at no cost to defend the governor-elect on the petition filed by the APC and Governor Mohammed Abdullahi Abubakar challenging his election. He lamented that Bauchi State is ranked among states with the lowest Internally Generated Revenue (IGR) because of its low microeconomic activities to drive its economy. He added that the state also lacks investment and industries to provide employment and income to the teeming unemployed youths in the state. He also decried the exponential increase in the state’s monthly wage bill from a little over N2 billion in 2015 to N5.2 billion in the last four years. Bala disclosed that despite be-

I discover that INEC and El-Rufai are planning to further suppress the will of the people. “Without any doubt, I am the winner of the February 23 Kaduna Central Senatorial election. Nothing will silence us from reclaiming our mandate”, he said. The lawmaker, who is currently in court with the governor over defamation of character, stressed that the National Assembly election that was conducted on the said date was marred with massive rigging. He further explained that the last election was massively manipulated to wrest power from the likes of him and planted stooges to do the governor’s bidding. “My votes were not counted. My votes were subdue,” he emphasised.

Shehu Sani

Edo 2020: Group, Obende galvanise support for Obaseki/Shaibu re-election

ing endowed with fertile land and natural resources, the state still relies on traditional subsistence agriculture with no investment in processing or manufacturing. The governor-elect however, said that the state should have drawn investors in agriculture, solid minerals and other sectors if its opportunities have been properly utilised. He promised to engage professionals to develop an economic blueprint and investment roadmap for the state to enable it shore up its IGR and improve its overall economic status. Bala also said that he has plans to address revenue leakages by taking measures that will ensure proper remittance and accountability. According to him, the move is necessary because whether now or in the near future, Nigeria will be restructured. “You will eat what you produce. I intend to make myself a ‘messiah’ and produce a roadmap for Bauchi State. I don’t want to disclose my plans to my detractors. “The issue of accountability is paramount. The day of judgment is here. Especially, if you shortchanged the state, you must pay for it,” he said. He also promised to address the issue of over 1.3 million outof-school children and provide infrastructure and other necessary incentives to address the challenges in the education sector.


ouths under the aegis of Obaseki/Shaibu Movement (OSM) and a Chieftain of the All Progressives Congress (APC) in Edo State, Senator Domingo Obende, have thrown their weight behind the re-election of Governor Godwin Obaseki, pledging to mobilise support for the governor and his deputy, Rt. Hon. Philip Shaibu ahead of the 2020 gubernatorial election in the state. They made the submission during an interactive session with journalists in Akoko Edo, declaring that Governor Obaseki has brought a rare panache to governance, which

has engendered development in different parts of the state. Obende, who is the Grand Patron of OSM, described Edo people as progressives, who support good governance which Obaseki’s government embodies, noting that their support for him is devoid of political, religious or regional differences. He said that Governor Obaseki, as a leader, has a mission to move the state forward, noting, “We are proud of the meaningful projects executed by the Obaseki/Shaibu administration in the state and assure Edo people of more people-

oriented projects.” Senator Domingo said OSM is working hand-in-hand with all stakeholders to ensure the successful re-election of the Obaseki/ Shaibu administration. State Coordinator, OSM, Hon. Miracle Ogbebor, said the group is out on an enlightenment campaign to educate the people on achievements recorded by Governor Obaseki in the state. He said that the group was set up to ensure the re-election of Governor Obaseki and his deputy, Shaibu, in the 2020 gubernatorial election.

Crisis engulfs Lagos PDP

…As Adewale, Dominic battle over chairmanship position Iniobong Iwok


eeks after the conclusion of the 2019 general election, a major crisis has erupted in the Lagos State chapter of the main opposition People’s Democratic Party (PDP); this is just as two chieftains of the party are currently on each other’s jugular over the chairmanship position. Agboola Dominic, who currently occupies the position, was chosen by leaders of the party after the defection of the former state chairman, Moshood Salvador, to the ruling All Progressives Congress (APC) last November. Dominic had benefited from a power-sharing formula between the Bode George-led faction and Aduke

Maina faction in the state. While George’s faction was to take 65 percent of the executive’s positions including the chairmanship, the Aduke Maina faction took 35 percent of the executive’s positions. But Segun Adewale, popularly known as AEROLANE, described the arrangement that brought Dominic into power as illegal and not in line with the party’s constitution, stressing that he was not duly elected by members of the party, but was imposed by Bode George. Adewale, who was speaking in an interview with BusinessDay, Monday, stressed that after the resignation of Salvador he was supposed to assume the chairmanship position because he was duly elected chairman of the party

in the 2016 state congress. “I am the Lagos State PDP chairman based on the 2016 state congress of the party where I was elected as a member of the Ali Modu Sheriff faction in Lagos State. After Salvador left the party I was supposed to assume the position, but because I was in Ekiti State and time had gone I did not intervene,” Adewale said. He said the party had retrogressed in recent times, blaming the PDP’s poor performance in the just concluded general election in Lagos State on the inability of Dominic and Bode George to lead the party. “Bode George picked Dominic, he was never elected by any party member in a state congress and that tenure expired recently. Anybody saying that I am not a member of the PDP is confused.

NIP guber candidate in Oyo, Sarumi-Aliyu, defects to join PDP, gives reasons Akinremi Feyisipo, Ibadan


overnorship candidate of the National Interest Party (NIP) in the March 9th governorship election in Oyo State, Bolanle Sarumi-Aliyu has defected to the People’s Demo-

cratic Party (PDP). Sarumi-Aliyu, while saying that the decision was arrived at after due consultation noted that “what we stood for, even in NIP was that Oyo State indigenes deserve the very best in terms of governance. And I am sure many people will agree with me

that things can be better than what obtains presently. “We are teaming up with the PDP to take Oyo to the greater heights. It is not all about Sarumi-Aliyu, it is about the love I have for the people Oyo State. Please, don’t forget I am the Jagaban of the poor so my being

in PDP will be to ensure the downtrodden are taken care of. “The conscientious efforts of the Governor-elect, Seyi Makinde to make things better over the years, even when he was not holding any elective position have proved him to be an honourable, forthright and noble@Businessdayng

spirited person”. According to him, “Our presidential candidate actually stepped down for Atiku Abubakar. And I must also state that the move is in the interest of the people. I will assist the governor if given the opportunity so he can serve well.


news you can trust I TUESDAY 16 APRIL 2019




Head or tail, Nigeria loses



he following piece is not new. It is a combination of two of my previous articles. The first was written May 2016, after the government increased the price of petroleum products from N85 to N145. The second section was written in December of the same year. In May 2016, I wrote: “In the meantime, through separate press releases by the Vice President, Yemi Osinbajo and the Minister of State for petroleum resources, Ibe Kachikwu, and other government officials not tainted by past statements and error of judgments, the government has continued to argue that the price increase is not “a removal of subsidy”. Rather, the price changes are related to the price modulation template announced at the start of the year, and this is particularly driven by the inability of independent marketers to source their foreign exchange requirements from the Central Bank of Nigeria (CBN). In other words, this is interbank market exchange rate price adjustment. Time will tell whether it is semantics, half-truth or dithering. But let us examine what these variants mean one after the other. If it is semantics, it means the government has removed the subsidy but does not want to publicly admit it.

For instance, what is the meaning of subsidy if the Nigerian government shifts all price changes, including that relating to exchange rates, crude oil, transports and all other related costs in its template and transferred that to consumers, and says in its statement that it had not removed subsidy? English and mathematics graduates, up to you, because I thought subsidy means that the government bears some of the cost to the Nigerian consumer. It could be half –truth because, as I mentioned last week, the government has not made provision for subsidy in the 2016 budget. It thus mean that except it wants to spend outside of the law or present a supplementary budget at a later date, there is no plan to make any subsidy payment this year. If provision has not been made and all the costs are passed on to Nigerians, I do not understand what it means to say, “this is not a removal of subsidy”. The dithering variant is potentially the worst of all, and this should be the focus of millions of Nigerians, such as myself, that are excited that the government has done the right thing (though it did not look that way, I wanted to believe we finally made progress) and ended this folly subsidy arrangement once and for all. However, our policy victory will be shortlived if what actually looks like a removal of subsidy for good, is a dithering attempt until oil prices trajectory looks good. This argument is important because removal of subsidy actually means different things to different people. In that context, let me tell you what it means to me: the removal of government control on price and supply, and the dismantling of administrative establishments set up to regulate subsidy. When the government says that “any entity can

now import, subject to existing specifications”, if it refers to just quality specifications, it meets, in calculus fashion, the first order condition for the removal of subsidy. However, Kachikwu went further to say “according to Petroleum Products Pricing Regulatory Agency (PPPRA) price template”. This does not meet, also in calculus fashion, the second order condition for the removal of subsidy. These conditions are important because there is a sense in which the government hopes that oil price will not rise because of subsidy but wants it up because of the revenue it badly needs. But as in the past, if subsidy is back because oil prices have gone up and Nigerians would have to pay more without subsidy, the government may be forced to support, and this will quickly erode any fiscal gains from increases in oil prices. In conclusion therefore, if all the government has achieved in the last week is an increase in the price of petrol, it is tantamount to “kicking the can down the road”. As the opening paragraph shows, not only has this problem been with us for forty years, the symptoms remain the same, and the only solution that has eluded us is the complete removal of the control on price and supply. Any semblance or something close to it will not suffice. Whether we like it or not, it is better for President Buhari to succeed in removing the subsidy (never minding the semantics at the moment), just as it would have been better then for President Jonathan to have succeeded in 2012. And as for the convenient explanations by those that opposed the proposals in 2012 but now support it in 2016 on the differences between then and now, they are explanations shrouded in political nuances. It was not sustainable then and

With any increases in the international price of oil, we may yet start another round of rigmarole of subsidy, no subsidies and the erosion of any gains that the increases should confer on us

it is not sustainable now, and may I argue that it will never be sustainable”. In December 2016, I wrote the following: “In May this year, when the government increased the price of fuel at the pumps, many, including myself, see it as a policy victory. I have gone back to the article I wrote following the price increase on the 18th of May, and it appears my worries will be realised. Two key elements were bound to alter the equation. Once price starts to trend higher than the US $50 level, the dynamics of the already settled “subsidy removal will change”. The other is the exchange rate of the Naira to the dollar. What is interesting is how all these are linked. And there are two supply conditions that need to change for the government preferences to succeed. If oil price rise, government revenue also rises. However, in the past, subsidy figures eat deep into these rises, partially because there is no domestic production of petroleum products. It is becoming increasingly obvious that oil, for which reason we have abandoned all sense and forms of reason is not done with us yet. With any increases in the international price of oil, we may yet start another round of rigmarole of subsidy, no subsidies and the erosion of any gains that the increases should confer on us”. Now, in the last two weeks, we are back to the debate on fuel subsidies, especially highlighted by the spring meeting of the International Monetary Fund and the World Bank. But what is very clear from the analysis is that whether oil price is up or down, Nigeria loses. I thank you. Dr. Okiti is the president, Time Economics Ltd @ Dr_Okiti 081.7153.0058

Vagaries of road travel in Nigeria PROPHYLAXIS



t is interesting what perspectives one can gain about any country from embarking on a journey by road. A few days ago, I travelled by road from Lagos to Warri and back. This journey told a small tale about the state of the country. Before I continue let me give you some small context to roads in Nigeria. Nigeria has about 195,000 km road network out of which a proportion of about 32,000 km (16.5%) are federal roads while 31,000km (16%) are state roads. The other 67.5% are local government roads. It is important to note that from available statistics only about 60,000km of the 195,000km road network are paved. One very important thing many people who travel by road in Nigeria must organize is an armed policeman to travel with - ‘’Mopol’’ as we call them. For many (me inclusive) it is simply a case of no Mopol no road travel. I had to ask the Mopol to sleep in my house the night before because I wanted reasonable certainty that he will be available and that we will leave at the crack of

dawn. If he did not show up, I will have to cancel my trip. This is the state of our country Nigeria – it is apt to say we are all petrified at the untold outcomes from road travel. Those who travel by road are afraid of armed robbers, kidnappers and the like. In recent times, you are even afraid of police high-handedness and brutality given the recent trigger-happy killings of innocent citizens by men in uniform. So, one thing your Mopol guarantees you is free passage – no police check point will stop or delay you as you journey on our roads. Talking about police check points my road journey of about 400 kilometers must have had at least 30 check points on the way – customs checkpoint, mobile police check point, normal police checkpoint, army checkpoint and even the Nigerian Security Defense Corp (a band of civilians recently licensed to carry arms who have proven to be more trigger happy than the regular policemen). My Mopol insisted that all these checkpoints are illegal. If he is right, then this is a whole band of people doing their own thing. Some people must be permitting this illegality. These checkpoints have logs of wood strewn on the roads to cause you to slow down and little strips of wood in between as a make shift speed bump. A taste of Nigerian ingenuity at its highest. What goes through my mind each time is why we still have so many kidnappings on these roads despite these checkpoints. I also wonder why some check points are just less than 100 metres from each other. Is this so they can protect each other based

….my road journey of about 400 kilometers must have had at least 30 check points on the way – customs checkpoint, mobile police check point, normal police checkpoint, army checkpoint and even the Nigerian Security Defense Corp

on the safety in numbers concept? I set out early on a Saturday morning heading out through the Epe axis using what is supposed to be a shortcut to bring motorist out directly onto the Lagos Shagamu expressway en-route to Benin. I have not been on this road in several years, but each time it always seems to be in the same sorry state it was the last time I travelled. This road is a state government road – parts of it owned by Lagos State and parts of it owned by Ogun state. The road gets worse somewhere in the middle, almost as if the two states may have a dispute as to whose responsibility it is to pave that part of the road. Being in the car on this bumpy, twisty and windy road - bumping up and down and sideways - is a “good’’ start to my morning– great exercise for all your muscles even gym buffs would envy me. In the course of conversation, just to get to know my Mopol a bit better, I asked him if he has been posted to Boko Haram areas to join the fight against Boko Haram. He says to me he has been twice and he enjoyed it. In his words “oga because there is money there’’. My interest peeked once I heard money. I said what do you mean? Mopol says policemen posted to those areas get 5,000 naira daily as feeding allowance and another 90, 000 naira monthly as pay. So I did the math quickly. This is 240,000 naira a month. I thought to myself quietly our policemen are so poorly paid that 140k a month (which is what an average worker can earn in the

private sector) is deemed as a bounty? No wonder some of them who remain in the city kill people for 500 naira. One lesson you learn quickly with road travel in Nigeria is that self-help is allowed and many times without self-help you may be in traffic for hours on end. On my journey back I had to pass through Benin City which holds good memories for me as an Alumni of University of Benin. At some junction along Sapele road we were in traffic at a standstill for about 15 minutes. It then occurred to me that if I didn’t come down to check what the problem was, we could be there for hours. I got out of the car and walked for about 5 minutes until I saw the bottleneck at a junction with cars coming from 5 different directions including those who had driven against traffic. I instantly became a traffic warden – thankfully I had my Mopol to help with enforcement. I could feel and touch the fumes from the revving vehicles even though it was already dark at this time. I shouted at some drivers, beckoned on others to move it, stood in front of some cars to make them stop, huffed and puffed until we were able to get the traffic moving one lane after the other. My car came through in about 10 minutes, I hopped in and left the others behind to their fate. I thought to myself – Welcome to Benin City! Ayuli Jemide is Founder and Lead Partner of Detail Commercial Solicitors. An entrepreneur, public speaker and writer. Email: Twitter: @JemideAyuli

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