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news you can trust I ** thursDAY 16 january 2020 I vol. 19, no 478

Poor infrastructure impedes passenger growth at Lagos airport IFEOMA OKEKE


he state of infrastructure at the Murtala Muhammed International Airport, (MMIA) Lagos, Nigeria’s busiest airport, has continued to slow down passenger growth and movement. BusinessDay’s checks show that infrastructure, which can help ease passenger movement and growth at the airport, is either absent or not adequate enough to meet demand. Some of the infrastructure includes inadequate checkingin counters; inadequate passengers screening checkpoints and screening machines or unserviceable screening ma-




$-N 359.00 362.00 £-N 470.00 479.00 €-N 392.00 400.00


Crude Oil $ 64.05






Spot ($/N) 362.60 306.90

Currency Futures

NGUS mar 25 2020 364.46



0.00 4.97



NGUS jun 24 2020 365.37



10 Y 0.00

30 Y -0.17



NGUS jan 27 2021 367.48


Supreme Court judgment on Imo: Continuation of Nigeria’s political paradox

Ihedioha lost on technicality, legal incompetence – Ikonne Judgment did not come as a surprise – Balarabe Musa Innocent Odoh, Solomon Ayado & James Kwen, Abuja, Ini Iwok, Lagos, Godfrey Ofurum & Saby Elemba, Owerri


Continues on page 35


Corrupt Immigration officers who flatter to deceive and their bribe-seeking police, army counterparts P. 4

3M 0.00 3.94

I&E FX Window CBN Official Rate ($/N)

fgn bonds

Treasury bills

President Muhammadu Buhari, at the wreath laying, during the 2020 Armed Forces Remembrance Day celebration at Eagle Square in Abuja, yesterday. Pic by Tunde Adeniyi

he Supreme Court’s verdict two days ago that sacked Emeka Ihedioha as governor of Imo State has extended Nigeria’s political chase board of imponderables that ordinary mortals fail to understand. Some people are shocked; some are in disbelief, while others are exasperated over a decision that catapulted a contestant in a race from the fourth to the first position, some 10 months after the race ended. Yesterday, January 15, 2020, Continues on page 35


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news Silent killer: How lifestyle changes can reduce diabetes rate in Nigeria ANTHONIA OBOKOH


L-R: Paschal Nwachukwu, head, finance and performance management group; Cordelia Ekeocha, head, marketing and corporate communications group; Tokunbo Bello, executive director, technical/operations; Ganiyu Musa, group managing director/CEO, all of Cornerstone; Olumide Bolumole, head, listing business division, NSE; Olufunmilayo J. Amanwa, head, central claims group and special risks underwriting Cornerstone; Adewale Foster-Aileru, group head, strategy, investor relations and enterprise risk management, Cornerstone, and Jude Chiemeka, head, trading business division, NSE, at the closing gong ceremony by the Cornerstone at the Nigeria Stock Exchange in Lagos. Pic by Pius Okeosisi

Undercover Investigation (II)

Corrupt Immigration officers who flatter to deceive and their bribe-seeking police, army counterparts

In this concluding part of this two-part series that began last week, IBRAHIM ADEYEMI recalls his encounter with Immigration officers who initially appeared ethically promising but ultimately took bribes to wave illegal migrants on. He also reports how other security operatives — apart from officials of the Nigeria Immigration Service — participate in the bribery-for-passage highway transactions endangering the lives of innocent Nigerians.


f you go scot-free passing through other immigration checkpoints without paying, you can’t escape this one we’re heading to,” Jamiu, the middle-aged man who drove us during my first trip from Lagos to Sokoto, said of the Kebbi State Immigration checkpoint, Yauri. “Those immigration boys at Yauri are bastards of ribbah,” the driver stressed.

Before we were flagged down by the immigration officers, the driver had readied N2,000 for them. “No! It’s no more a matter of money. This country is under pressure of border closure now; everybody should come down. Come down. Come down now!” said one of the officers, emphatically. For the first time in all of my travel days on the highways, an immigration officer

acted differently and decently. He made a valid point: Everything is not about money (bribery). He began his checks by asking each individual questions about their nationalities. For half an hour, the officer asked one question after the other and in just a few minutes, he identified four illegal immigrants in the bus. He set them aside. “You, where are you from?” he asked one passenger.

“I’m from Dambuwal in Sokoto,” the passenger replied. “Where is your ID card?” “I don’t have an ID card; I only have my voter card.” “Voter card is not enough evidence. Election has come and gone, hasn’t it?” The passenger remained silent and the immigration officer went ahead to engage others in the bus. When he

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How NDDC awarded over N1trn contracts in 7 months, against N400bn budget in 2019

… contract verification committee says overtrading, other vices nearly shut down Commission Ignatius Chukwu, Port Harcourt


s forensic auditing of the finances of the Niger Delta Development Commission (NDDC) gathers momentum, it has been revealed that the sacked acting managing director of the Commission and his team awarded emergency contracts worth over N1 trillion in just seven months of 2019. This is said to be against an annual budget of about N400 billion. The acting executive director, projects, Cairo Ojougboh, who declared this during a press briefing at the Commission’s headquarters in Port Harcourt Wednesday, said the emergency contracts system was aimed at attending to some urgent situations through some contracts. In recent years, the presidency had discouraged the award of new contracts to en-

able the Commission focus on wiping out abandoned projects and sanitising the system. However, new MDs prefer to award fresh contracts. Some thus used the emergency contract system to give massive award of contracts. “In 2017, the NDDC awarded a total of 201 emergency contracts valued at N100.39 billion; in 2018, total 1,057 emergency contracts valued at N162.68 billion were awarded; and in just seven months of 2019, it awarded a total of 1,921 emergency contracts valued at N1.07 trillion,” he said. “We are talking about a total of over N1.3 trillion in less than three years. The yearly budget of the NDDC is hardly above N400 billion and a situation where contracts that do not qualify for emergencies were fraudulently awarded to over one trillion naira value

in less than one year amounts to not only stealing from the pulpit but stealing the entire pulpit.” The ED said President Muhammadu Buhari saved the NDDC from being shut down due to over trading, bloated contracts, and other sharp practices in the Commission. He said the Commission was sinking and would have been “killed and buried” but for the President’s intervention. He said Buhari had ordered a forensic audit of the Commission and appointed an interim management Committee (IMC), headed by acting managing director, Joi Nunieh, with other members, including Ibanga Etang (finance/administration). He said the inauguration of the contracts verification committee was part of strategies to kick-start the forensic audit, though critics say some

of the members were rather part of the racket in the Commission. Ojougboh, who is the chairman of the Committee, however explained that the twoweek exercise would cover all completed, as well as on-going projects and programmes of the Commission. He emphatically declared that the NDDC has not delivered on its mandate, 19 years after. “At best, it has been a lacklustre performance with very little to show for the humongous resources that have accrued to it over the past 19 years. Stories of pervasive corruption, flagrant abuse of due process, abandoned projects, poor quality project delivery, etc. at the NDDC, have adorned our media space over the years.”

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ccording to Diabetes Association of Nigeria (DAN) estimates, one in every 11 Nigerians has diabetes, and type 2 diabetes is quietly becoming more prevalent because patients are often asymptomatic. The challenge is that even thosewhohavebeendiagnosed struggle to check their blood glucose level and that is the part of the problem of continual effort in developing better care for diabetics patients, experts say. Diabetes is a chronic disease caused by the body’s inability to produce required amounts of insulin – the hormone that regulates blood sugar – or to efficiently use the insulin it produces, according to the World Health Organisation (WHO). These are called type 1 and type 2 diabetes, respectively. Based on reality, diabetes care is not where it should be in Nigeria, as too many people are dying of the disease. The good news, however, is that early diagnosis of diabetes generally increases the chances for successful treatment, while if not well controlled, diabetes may cause blindness, kidney failure and lead to limb amputation, in addition to other long-term consequences. Afokoghene Rita Isiavwe, consultant endocrinologist and medicaldirectorofRainbowSpecialist Medical Lekki, Lagos, says delaysinpresentationoftentimes lead to amputations as a means of saving the person’s life, or even death. Diabetes mellitus is the leading cause of non-traumatic lower limb amputation worldwide, including in Nigeria. “If you live with diabetes,

form the habit of inspecting your feet regularly, and even more if you already have reduced sensation or poor blood flow on your feet. Seek medical advice promptly if you notice any change in colour of your feet or blisters or wound. Do not delay,” she advises. Living with a chronic condition also means that patients need to manage the disease themselves between their regular doctor appointments, which represent the majority of the time. However, fear of the outcome of diagnosis, religious beliefs, financial constraints and low awareness of diabetes signs, symptoms and facilities are some of the reasons for the delay in diagnosis. Experts say education and screening are major componentsofearlydetectionandpeople need to adopt better lifestyle choicestoreducetheprevalence of diabetes in Nigeria. According to Ebun Bamgboye, consultant physician and nephrologists/clinical director at St. Nicholas Hospital, Lagos, who recently spoke about the burden of diabetes, its related issues and how it can be tackled with proper diagnosis and prevention on Doctors on Air on Wednesday on Classic FM 97.3 hosted by Pamela JacksonAjayi, founder and managing director, Synlab Nigeria, says only about 50 percent of those who have diabetes are aware they have it, noting that every diabetic that is diagnosed, there is one going around the society not realising that he or she has this relatively dangerous illness.

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Petrobras sells $1.5bn assets in Nigeria, ends activities in Africa DIPO OLADEHINDE


razil’s state-controlled oil company, Petroleo Brasileiro SA, has finalised the sale of its shares in Petrobras Oil & Gas B.V. (PO&GBV), the company producing in Nigerian oil assets, thereby ending its activities in Africa. The Brazilian state-controlled firm had 50 percent of the company, in a joint venture with BTG Pactual E&P B.V, and sold its shares to Canada’s Africa Oil Corp. for $1.45 billion. BTG, Brazil’s largest independent investment bank owns the other 50percent stake in Petrobras Africa, whose core assets are stakes in offshore fields that produce Nigerian oil grades Agbami, Egina and Akpo. According to a note released Tuesday evening (January 14) by Petrobras, the transaction “is in line with the optimisation of the portfolio and the improvement in the company’s capital allocation, @Businessdayng

aiming at generating value for its shareholders.” The primary assets of Petrobras are an indirect 8 percent interest in Oil Mining Lease 127, which contains the producing Agbami Field with 250,000 barrels per day (bpd) capacity, operated by affiliates of Chevron Corporation, and an indirect 16 percent interest in OML 130, operated by affiliates of TOTAL S.A., which contains the producing Akpo and Egina fields. Akpo produces 130,000 barrels per day (bpd) of condensate, while Egina, which started last year, will produce roughly 200,000 bpd. Agbami, with 250,000 bpd of light, sweet crude, is the most prized part of the asset. In November last year, BusinessDay reported the sale of Petrobras Nigerian oil assets is not going according to plans after Petrobras, former partner, Africa Oil, said it would conclude the $1.5 billion purchase alone, but the company is scrambling for cash, a factor that may yet further delay the sale.

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Thursday 16 January 2020



Nigeria can be AfCFTA’s top gainer if it implements these NESG’s recommendations ENDURANCE OKAFOR


n view of the findings by the Nigerian Economic Summit Group (NESG) that Nigeria’s economy may be negatively impacted when the AfCFTA agreement comes into force, the NESG has outlined measures given the need to make the economy more competitive. The policy advocacy group says it recognised the potential of AfCFTA to broaden and strengthen the scope for intraAfrican trade as well as improve the well-being of African people and thus, conducted an impact assessment study of the AfCFTA on Nigeria’s industrial sectors, agriculture sector, and the Nigerian economy at large. On the back of the findings from the survey, the Lagos-based Group recommended massive infrastructure upgrade, institutional reforms, a more businessfriendly environment and reduction of existing binding trade constraints as catalysts that can make Africa’s largest economy a

top gainer of the free trade. “Given the finding that Nigeria’s GDP will be negatively exposed to free trade if the country joins the AfCFTA, and considering the need to make the economy more competitive; we recognise that relying on the inflow of foreign saving to grow the economy may not readily pay-off,” NESG noted in a recent published technical report. President Muhammadu Buhari signed the African Continental Free Trade Area (AfCFTA) agreement in July 2019, several months after the Nigerian leader initially refused to sign, which was already signed by 52 other African countries. While acknowledging the free trade agreement as pivotal to job creation, growth and health of the economy, Buhari said he delayed in signing the agreement because more consultations were necessary before Nigeria could append its signature to it. Commenting on the several policy recommendations that emanated from key findings of the study by NESG, the Group

noted that because Africa was still characterised by significant nontrade barriers such as transportation challenges, high transaction costs at the borders, the policy implementation would help exploit the benefits accruable to the Nigerian economy. “We strongly believe that the recommendations are feasible,” its aid in the report. Addressing Nigeria’s infrastructural challenges, the study by NESG suggested that infrastructure upgrade could be realised through the concession of major infrastructural projects (electricity, roads, bridges, airports, seaports, etc.) to the private sector. “The concessions must, however, be complemented by strong institutional reforms to effectively regulate the operations of the private sector,” the report read. According to the report, producing highly competitive products in the foreign market also require strengthening government regulations and internal quality control of products produced in the country.

New Finance Act: FMCG, others to apply caution in price hike over VAT increase to 7.5% … not to overburden consumers, NECA welcomes Act with caution Daniel Obi & Joshua Bassey


anufacturing companies, especially in the FMCG sector, say they are presently studying the Finance Bill signed into law by President Muhammadu Buhari with caution not to hike product prices with intention not to overburden the consumer. The Finance Act directs an increase in the VAT rate from five per cent to 7.5 per cent and the 2020 Appropriation Bill is based on this new VAT rate. This means that there will likely be increase in price of products. But a source in a top FMCG company told Busin e ss Day ye ste rd ay t hat manufacturers will be cautious in effecting changes in price as consumers are

already overburdened. “The Finance law through which government is trying to raise money to finance critical infrastructure will definitely raise our operational cost and overhead cost but it will be difficult to pass them on to the consumer”, the source said. The source said that the company is planning other options but said the company will try to bear the additional cost that the Finance law will bring. In addition to VAT increase, Federal Government had in June, 2019, on the recommendation of the Tariff Technical Committee of the Ministry of Finance, approved an increase to the excise duties on tobacco and alcoholic The increase in the ex-

cise duty are introduced in phases over a three-year period (from 2018 to 2020) to lighten the impact of the increment on the price of the products for consumers. For instance, Beer and Stout would in 2018 pay N0.30k per centiliter (“Cl”) and pay N0.35k per Cl for both 2019 and 2020. Wines would pay N1.25k per Cl in 2018 and N1.50k per Cl for both 2019 and 2020. In his reaction to the new Act, Timothy Olawale, Director General of NECA warned that government should not see the private sector as a “cash cow” in its drive to raise revenue, as it will do more harm to the already burdened private sector and further impoverish the citizens that the President promised to take out of poverty.

USADF, All On open 2020 edition of $100,000 Nigeria Off-Grid Energy challenge Isaac Anyaogu


he US African Development Foundation (USADF) and All On have officially opened the application window for the 2020 Nigeria Off-Grid Energy Challenge, which will provide up to $100,000 in blended finance per enterprise for successful applicants. The 2020 application window opens on January 15 and closes on February 29, 2020. The Rockefeller Foundation is also providing funding support for the 2020 edition of the programme. USADF, a founding member of Power Africa and an independent United States of America Government agency established

by Congress to support and invest in African owned and led enterprises and All On, an off grid energy impact investing company seeded by Shell in Nigeria, established the challenge as a multi-year partnership to identify and help scale innovative off-grid solutions to “power up” unserved and underserved areas in Nigeria. Now in the third year of the partnership, the parties will jointly provide funding to 100% African owned and operated small and medium enterprises that improve energy access through off-grid energy solutions spanning solar, wind, hydro, biomass and gas technologies. The enterprises may be developers of their own technology and/or acquiring and

implementing technologies developed elsewhere. To benefit, applicants need to be legally registered in Nigeria, demonstrate the capacity to track and manage project resources and operate in good standing with the local governments in their areas of operation. Up to $50,000 per selected company will be provided in the form of convertible debt along with up to $50,000 of grant capital. Sixteen Nigerian companies have been selected through the 2018 and 2019 editions. The winners of the 2019 Nigeria Off-Grid Energy Challenge were ICE Commercial Power, Sosai Renewables, Greenage Tech, Pirano Energy, Sholep Energy, Entric Power Systems, ACOB Lighting, NexGenEnergy and Protergia Nigeria.


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MSMEs get relief through Finance Act Gbemi Faminu


he signing of the 2019 finance bill into law has been well received by business owners in the Micro, Small and Medium Scale Enterprises (MSMEs). This is due to the significant relief it provides for their business, especially on tax issues. The Finance Act grants a VAT registration threshold for MSMEs with an income of less than N25 million per annum as well as an amendment of excess dividend tax rules that results in double taxation. In addition, it provides an incentive of 2 percent bonus for early tax payment by mediumsized companies and 1 percent for large companies, while also reducing the corporate tax rate for MSMEs from 30 percent to 20 percent for firms with turnovers of between N25 million – N100 million annually, and exempting firms with income less than N25 million. Furthermore, the Act aims to achieve objectives which majorly cut across supporting MSMEs in line with the ease of doing business reforms. These include reforming domestic tax laws to align with global best practices, introducing tax incentives for investments in infrastructure and capital markets and promoting fiscal equity by mitigating instances

of regressive taxation. Over the years, the establishment of MSMEs has been on the continuous rise globally especially in emerging and frontier economies especially as they are being recognised as a catalyst which has significantly contributed to economic growth. However, business owners, especially under the SME category, have challenges bordering tax, ranging from tax multiplicity to high tax rates, which significantly erode their profits. Consequentially, these business owners dread activities and discussions relating to tax payment. Muda Yusuf, director-general, Lagos Chamber of Commerce and Industry (LCCI), in a statement, said the MSMEs, which constitute a greater part of the business environment suffers from high tax rates and tax multiplicity which are partly hurting the capacity of these businesses to survive and to achieve their aims and objectives. The Manufacturers CEOs Confidence Index (MCCI) for the third quarter of 2019 compiled by the Manufacturers Association of Nigeria (MAN), shows that manufacturers pay over 30 different taxes, levies, and fees to agencies of the federal, state and local governments which limit productivity in the sector.

Flour Mills to raise N50bn in Bond-sale programme - Bloomberg OLUFIKAYO OWOEYE


lour Mills of Nigeria, the country’s biggest miller by market value, says it will raise N50b through a bond-sale programme, Bloomberg reported Wednesday. A n d re s K r i st i a n ss o n , chief financial officer of Nigeria’s largest miller, said the company would raise N20 billion in the first tranche, beginning in the first three months of this year. Kristiansson said Flour Mills would issue the debt at

about 11percent with a tenor of as long as five years. Proceeds from the sale will be used to refinance debt and buffer working capital amid low borrowing costs, he said. Flour Mills’ products include Golden Penny Pasta, Golden Fertilizer, Golden Sugar, Pure Vegetable oil and Golden Penny Spread. Shares of the company closed unchanged at N24 in Lagos trading. The All-Share Index of the Nigerian Stock Exchange fell a second day, losing 0.65 percent, after an 11-day bull run.

CBN positions to mop up excess liquidity as N630.84bn hit system today HOPE MOSES-ASHIKE


entral Bank of Nigeria (CBN) will today mop-up the excess liquidity from the financial system as N630.84 billion is expected to hit the market. This amount is expected from combined maturities of Open Market Operation (OMO) and the Nigerian Treasury Bills (NTB). At the primary market auction held yesterday, the CBN offered NT-Bills worth N225.45 billion across 91-day (N5.85 billion), 182-day (N26.60 billion) and 364-day (N193 billion) tenors. The FSDH Research show that the NT-Bills market closed on a positive note on Wednesday with average yield declining by 2

percent basis point and settling at 4.44 percent from 4.46 percent on the previous trading day. Buying interest was witnessed on 30-Jan-20 and 13-Feb20 maturity NT-Bills, compressing yields by 15 bps and 11bps, respectively. The average OMO yields rose by 31bps to 13.11 percent from the last close 12.80 percent. Average OMO yields on the short-term, mediumterm, and long-term maturities increased by 48 bps, 37 bps and 10bps, respectively. On Wednesday, Overnight (O/N) rate increased by 0.75 percent to close at 14.17 percent from 13.42 percent the previous day while Open Buy Back rate also increased by 1.00 percent to close at 13.33 percent as against 12.33 percent the previous day.

L-R: Seyi Makinde, governor of Oyo State; Olusegun Obasanjo, former president, and Olayiwola Olakojo, former secretary to the Oyo State government, after the governor had a two-hour closed-door meeting with the former president at the Olusegun Obasanjo Presidential Library (OOPL), Abeokuta.

Nigeria scores lower than SA, Ghana in World Bank’s Women, Business, Law 2020 HOPE MOSES-ASHIKE


igeria scored 63.1 points in the World Bank’s report on Women, Business and the Law 2020, which is lower than some of its African peers like South Africa with 88.1 points and Ghana 75.0 points. Women, Business and the Law report released last night measures laws and regulations that constrain women’s entrepreneurship and employment. This year’s data set and report cover 190 economies. The data set and analysis can be used to support research and policy discussions around the ways in which the legal environment influences women’s economic activity. Thirty-five data points were scored across eight indicators of four or five binary questions, with each indicator representing a different phase of a woman’s career. The eight indicators include mobility where Nigeria scored

50 points, South Africa 100 and Ghana 100; workplace, Nigeria scored 75 points, South Africa 100 and Ghana 100; for pay indicator, Nigeria and Ghana scored 50 points, while South Africa scored 100; and on marriage, the three countries got 100 points. Other indicators are parenthood where Nigeria scored zero, South Africa 80 and Ghana 20 points; for entrepreneurship Nigeria and Ghana score 75 points each while South Africa stood at 100 points; Assets, Nigeria and Ghana scored 80 point each and South Africa got 100 points and for pension indicator, Nigeria and Ghana scored higher at 75 point than South Africa with 25 points. The report is based on an analysis of domestic laws and regulations that affect women’s economic opportunities. The indicators were selected through research and consultation with experts. They are also

Analysts advocates sensitisation, more time for Finance Act HOPE MOSES-ASHIKE


ollowingthesigningintolaw, theFinanceAct,byPresident Muhammadu Buhari on Monday, analysts in the financial services sector are calling for sensitisation and more time for implementation. As part of efforts to consolidating some macroeconomic effects and to help reduce budget deficits, President Buhari submitted a Finance Bill to the National Assembly, to amend various tax laws in the country. Consequently, with the signing into law, the Finance Act 2019 is expected to set the tone for Nigeria’s fiscal policy for 2020. “Given that the Bill has just beensignedintolaw,itisimportant to allow some time before it comes intoeffecttoensurereadinessboth on the part of the tax authorities and taxpayers,” Taiwo Oyedele, head of Tax and Corporate Advisory Services at PwC said. Also, he said there should

be a nationwide sensitisation to create awareness and educate affected stakeholders while seeking feedback on areas for future amendments as implementation takes hold. Oyedele said the signing of the Finance Bill into law is a welcome development particularly with respect to the provisions designed to promote fiscal equity, support Micro, Small and Medium Enterprises (MSMEs) and modernise the tax system. It is expected that the additional revenue to be generated will help fund the new minimum wage especially at the sub-national level. Gabriel Okeowo, Principal Lead, BudgIT, in his response to BusinessDay said that the increase in the VAT is a welcome development as it will help raise revenues but stressed the need for government to ensure effective use of incomes generated to strengthen institutions that will boost productivity of businesses in Nigeria.

inspired by the international legal frameworks set out in the Convention on the Elimination of All Forms of Discrimination against Women (CEDAW), the Committee on the Elimination of Discrimination against Women General Recommendations (CEDAW GR), the UN Declaration on the Elimination of Violence against Women (DEVAW), the International Labour Organization (ILO) Equal Remuneration Convention, 1951 (No. 100), the Maternity Protection Convention, 2000 (No. 183), and the Violence and Harassment Convention, 2019 (No. 190). “Legal rights for women are both the right thing to do and good from an economic perspective. When women can move more freely, work outside the home and manage assets, they are more likely to join the workforce and help strengthen their country’s economies,” said World Bank Group President,

David Malpass. “We stand ready to help until every woman can move through her life without facing legal barriers to her success.” According to the report, 10 other economies in SubSaharan Africa implemented 13 reforms enhancing gender equality, with many placing among the top reformers in the Women, Business and the Law 2020 index. For example, in 2019 São Tomé and Príncipe adopted a new labour code to meet job market demands and bring laws into compliance with international standards. The legislation lifted restrictions on women’s ability to work at night, in mining, and in jobs deemed hazardous. It now restricts only work that is likely to “pose a risk to the genetic heritage of the worker,” without specifying gender. The new labour code further prohibits the dismissal of pregnant workers.

Lagos to leverage PPP to bridge infrastructure deficit JOSHUA BASSEY


agos, Nigeria’s biggest subnational economy and business hub, says it will be leveraging Public Private Partnerships (PPP) to bridge its huge infrastructure gap. The government in 2018 estimated that the state would need an investment of over $50 billion for five years to address its infrastructural deficit. “Assumingtheentirebudgetfor 2018(N1.04trillion)isspentonlyon infrastructuredevelopment,Lagos will be left with a deficit of about N14.47 trillion and an additional 19 years of similar expenditure to bridge the infrastructure deficit,” said Akinwunmi Ambode, immediate past governor of Lagos, in 2018. Speaking in similar tone at a stakeholders’ engagement, organised by the Lagos State Infrastructure Maintenance and Regulatory Agency (LASIMRA), @Businessdayng

on Tuesday, the state governor, Babajide Sanwo-Olu said he was considering PPP as a model to tackle the infrastructure gap. The governor told participants at the meeting that LASIMRA will also ensure that businesses across the state thrive using technology will as an enabler. He said: “What we are doing is toensurethatwebringaboutaPPP model to solve our infrastructure challenges. It is also in that same vein that we will be using a PPP modeltoalsofast-tracktechnology. “We believe that technology can be a major lead for us and you are in that critical sector where we can use technology as an enabler. For technology to live and survive, it has to have a strong backbone which is also in infrastructure.” He urged the participants to embrace policies of the governmentandconsiderthemasmeant to make life better for Lagosians while also assuring that his administration will deliver on all the promises made.


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Thursday 16 January 2020




In association with


RMBNS’ economic outlook for 2020: some growth, but not enough


he year 2019 was volatile for global growth as a result of trade tensions, civil unrest and weak investment sentiments. Towards the end of the year, the US reported its weakest manufacturing output levels in a decade. On the back of these uncertainties, major global research bodies repeatedly revised global growth lower as downside risks dominated 2019 discussions. In 2020, global growth is projected to improve to 3.5% from the 3.2% forecast for 2019, according to the International Monetary Fund (IMF). Despite the improved growth projections, downside risks that were a key feature of growth in 2019, are expected to persist, making growth expectations volatile. To put the magnitude of the downside risks into perspective, 70% of the increase in global growth in 2020 relative to 2019 is dependent on the stabilisation or recovery in stressed economies (Argentina, Turkey, Iran, Venezuela, Euro Area, Emerging Europe and Latin America) across the world. The key themes impacting global growth remain trade and technology tensions that have negatively impacted investment sentiment, driving a risk aversion outlook. Weak growth in major world economies: Notwithstanding improved global growth projections in 2020, growth in major economies like the US, China and Japan is expected to weaken in 2020. Growth in the US is projected to decline to 1.9% in 2020 (2019: 2.6%) as the impact of the fiscal stimulus unwinds. China will see growth decline to 6.0% (2019: 6.2%) as the impact of trade tensions continues to permeate the economy, despite

the monetary and fiscal stimulus of the Chinese, a result of the government having increased tax rate in October 2019, from 8% to 10% - the first increase in five years. Across Europe, growth in 2020 is expected to be mixed. Resilient demand and rising wages in Central and Eastern Europe will see growth increase to 2.3% in 2020 (2019:1.0%). The Euro Area’s growth is projected to increase to 2.3% bps to 1.6% as the impact of vehicle emission standards rules wanes and Germany sees higher car registrations. The Euro Area growth projection also assumes no fresh protests in France similar to the Yellow vest movement protest. In the United Kingdom, growth is projected at 1.4% (2019: 1.3%) subject to an orderly Brexit. Sub-Saharan is projected to deliver 3.6% growth in 2020, up from the 3.4% estimated for 2019. This will be driven by growth expectations in the region’s two largest economies. Nigerian economy: Sub 3% growth till 2021e We see modest economic growth of 2.3% for Nigeria in 2020e. We, however, expect much better growth of 2.8% in 2021e, mostly supported by output from the 650kbpd Dangote Refinery. Inflation will be a hotbed in 2020 - we forecast a base headline inflation average of 12%, higher at 12.6% (year-end: 14%) on a wage-adjusted basis. In our view, the strength of the naira will be tested in 2020e, which could force further regulatory interventions. We estimate the fair value of the naira at N445/USD (NAFEX: 375) by 2020 (year-end). The fragility of public finances continues to be a focal point; revenue remains below expectations, debt accumulation has been rapid to N25.7trn (N30.6trn,

adjusted for CBN net advance to government at 3% of GDP) at 18% of GDP, more than double 2013 levels. An adjusted debt service to revenue of about 70% (unadjusted: 45%) calls for urgent, but unpopular steps such as gasoline and electricity subsidy removal. We estimate the former at N1.1trn (52% of fiscal deficit) in 2020e. We recall in 2019 revised the country’s outlook to Negative (from Stable), indicating further deterioration in public finances could lead to a ratings downgrade. As such, we believe these amber indicators should be on the minds of investors as we navigate 2020 where we see some growth, but not enough. We overweight (OW) Nigerian equities in 2020e: Broadly, the Nigerian equities market is cheap, trading on a 2020e P/E of 7x, a 40% discount to peer African markets. While we do not call for the convergence of multiples across markets, we expect our coverage universe, 74% (10/01/2020), to appreciate 21% in 2020e on a market cap weighted basis from current levels. We believe local pension funds and asset managers will increase their allocation to equities, from 5% ,in 2020e as yields of treasury and money markets securities have collapsed. Within our coverage, our top picks, in no particular order are, GTB (OW, TP: N54), Zenith (OW, TP: N28), Lafarge Africa (OW, TP: N22), Seplat (OW, TP: 260p, N1,232), MTNN (OW, TP:N145) and Nestlé (OW, TP: N1,642). Our next rated stocks, based on certain milestones are UBA (OW, TP: N14), Dangote Cement (EW, TP: N188), and Nascon (EW, TP: N15). Fluidity of regulations remains a concern for Nigerian banks We expect e-banking income

growth to slow to 12% in 2020e (2019e: 53%) following the CBN’s downward review of bank charges. We also find that any plan to raise the loan-to-funding ratio to 70% will impact our coverage’s capacity adequate ratio by 400 bps. Valuation wise, our coverage is cheaper on a 2020e P/B of 0.9x relative to the 1.1x for Kenyan banks on similar ROE are trading at. We continue to prefer quality names [GTB (OW, TP: N54) and Zenith (OW, TP: N28)] in the banking sector. We like GTB for its operational efficiency and robust capital and see Zenith as an attractive dividend yield play in 2020e. In Nigeria Cement sector, price competition will intensify in 2020 as BUA ramps up production, and price rebates and discounts become deeper. The sector will remain oversupplied at a utilisation rate of 43%, on our estimates, which implies only 2% y/y volume growth in 2020. We downgrade Dangote Cement to EW, TP: 188 (from N218) mostly on valuation grounds; 2020e EV/ EBITDA of 8x compares with GEM peers. We reiterate our OW rating on Lafarge Africa [(TP: N22 (from: N30), 2020e EV/EBITDA of 4.1x, as the company repositions to focus on Nigeria following disposal of the troubled South African operation. In telecoms, regulatory-induced data pricing pressures and competition for data market share will dominate 2020, in our view. For MTNN, we upgrade to OW (TP:145), as we now value the company based on a DCF, rather than relative valuation. This is because we believe the withdrawal of demand by Attorney General (AG) on the$2bn tax matters offers some clarity on cash flows. MTN’s response to declining data market share and the final resolution of the $2bn tax case


that has been passed on to the tax authorities and the Nigerian Custom service will be central to a re-rating. On our estimate, the valuation gap of $1.86bn, from current levels, could be a reflection of the $2bn tax settlement. For oil and gas, the US-Iran hostilities have dominated headlines in early 2020 supporting oil prices. Bloomberg consensus forecasts the 2020 oil price at US$65/bbl. We find Seplat’s (OW, TP, 260p, N1,232) acquisition of Eland as earnings accretive; we estimate about 30% - 50% upsides to 2020e production (64kboepd), revenue ($1.0bn) and EBITDA ($619m) on this basis. However, we find the acquisition to be value dilutive (-9%). Nonetheless, Eland introduces an exciting near-term exploration upside to Seplat’s portfolio, from Amobe prospect and appraisal drilling on Abiala, which could more than double the reserve base of OML 40. Seplat’s valuation is compelling, with a potential upside of 100% and a 7% dividend yield. For the consumer sector, volume growth in 2020e will be stifled as inflationary pressure from land border closures, VAT increase and planned electricity tariff increase, among others, are expected to pressure consumer wallets further. On a positive note, the closure of the land borders offers volume growth benefits for food staple companies such as Dangote Sugar (UW, TP:N13), Flour Mills of Nigeria (UW, TP: N16) and Nascon (EW, TP: N15). In our view, a key risk to watch out for in 2020 in the consumer sector is the direction of the currency. A devaluation will be negative for earnings given that our coverage consumer companies are exposed to imported inputs and trade payables in foreign currency.


Thursday 16 January 2020


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Igbo-Ukwu: Around & about in 21 days ik MUO


am proudly a native of Igbo-Ukwu, one of the largest towns in Anambra State situated in the Aguata Local Government Area. Igbo-Ukwu is unarguably, the cradle of Igbo civilization and was hitherto known as Igbo, until the town decided to differentiate itself from the entire Ndi-Igbo by adding UKWU to its name to yield its current name, Igbo-Ukwu, which means the Great Igbo (or IgboBig) The archaeological excavations from IgboUkwu consisting of sophisticated bronze metal-working culture dating to 9th century AD, centuries before other known bronzes of the region, show how far our people have come, especially viz-a-viz the various contenders to the Igbo throne (Shaw, T (1977) Unearthing Igbo-Ukwu: Archaeological Discoveries in Eastern Nigeria; Oxford University Press) I have always been a “village man”. I did not grow up in Igbo-Ukwu because I was following my late father, Sir Ezeamaluchi W.O Muo, (we called him “W.O” behind his back), the original Head Master from one rural community to another (Abba, Ebenator, Osumenyi, Azigbo et al). But Every Christmas, he ensured that we all visited home. One of his co-in-laws a Morris-lorry driver would ferry us all home and we sang and rejoiced as we left wherever his duty post was, to the village, where we would enjoy the Christmas holidays. There, we would mix and play with brothers, cousins and nephews and the elders, Uzoahia, Udoye Emeka, GabrielNwagbe, who would tell us tales and give us the kind of affectionate attention that was scarce with the cane-wielding WO. So, over the years, I have become increasingly in love, and involved, with

Igbo-Ukwu and have attended Igbo-Ukwu meetings and events for the past 43 years. And thus, whenever I have some free time, I wish to spend it at home but the problem is that the time has never been enough. At times I get home on 24th December and disappear on 2nd January, when most of the festivities are just revving up. Christmas, last year, was however a pleasant exception. Our “GO” approved a university holiday from 23/12/19 to 5/1/20. My Oga HOD also approved a part of my annual leave that set me free till the end of January. You are wondering who is our GO? That is our inclusive and open-minded Vice Chancellor whose initials are “GO”. When I heard that appellation for the first time, I was aghast: How can we have a GO in an academic environment? But when I learnt that it was his initial and noticed his pro-people tendencies and attributes, I joined others in calling him the GO. By the way, we have many wonderful names at OOU. We have “The ROC(k)” (a Professor whose initials are ROC); an “MD”( who is just an ordinary student of Business Admin); “Government” ( a hard core sociologist who had worked at the Governor’s office before) DIBIA (I am yet to ascertain whether his is a native or modern dibia) and of course we have the Spirit! So, mobilised my resources and family and an emergency personal driver and set up for IgboUkwu. The first concern was how to make the trip, giving the 60+ security tollgates and the declaration by the IGP that since those of us from the east were the greatest criminals, he would not reduce that armada. So, I took desperate and unusual step of leaving Lagos by 3 am on 22/12/19. (Yes; 3 am) And by the time we drove into the Ago Palace Way in Lagos, there were 1001 vehicles already on the road, all of them headed east and getting out of Lagos took us more than 2 hours. Somewhere around Shagamu, we joined a one-man alarm-blaring convoy and when the man noticed that we were following him bumper-to-bumper, he “adopted” us and told security men at

all the “tollgates” that were a part of his convoy. He led us smoothly to Onitsha, where we shook hands and parted ways around 12noon. That was also where I discharged my emergency driver who headed back to Lagos immediately We got home about an hour later, unpacked our luggage, visited my mother in-law, where we had a sumptuous late lunch, attended evening mass, (since we could not attend mass in the morning), visited some of our neighbours for both routine greetings and Christmas handshake. The following day, we engaged a very dutiful lady to clean and de-dust the entire house and thereafter, settled down for the serious business of holidaying in IgboUkwu. Over the next 20 days, we (self and at times, with the family) moved around and about Igbo-Big from morning (at times straight from the morning Mass, 6pm) till night (at times, up to 10pm and beyond!). It was all about weddings (traditional and modern), (I attended about 5 of them) funeral ceremonies and condolence visits (6), birthday celebrations (4), harvest and bazaar ceremonies (3) (the urban churches will always do theirs before the December Migration while the “village” churches would always wait for the returnees before doing theirs) ozoinitiation ceremonies (6) and meetings, (7) most of which ended up in fundraising. Key activities included the surprise birthday party which some musketeers (including the son of man) organised for Ezenwagu Okafor (26/12/19), my own birthday party on 1/1/20 (the only day I stayed indoors for a WHOLE day and attended by “small medium and large” compatriots, the 76th birthday celebration of my maternal aunt, Lady Rose Nwosu, (29/12/19) and the 5-in1 celebrations by Ezeonyima Igwilo (Birthday of self and spouse, wedding anniversary, award of Moving Patron?? By his club +++). The greatest meeting was the IgboUkwu General Assembly, where and when, in the presence of Anambra State Government representatives, we resolved the 8-year long impasse and elected Christian Ikeh as the President

The weather was dry dusty and cold; NEPA, quite surprisingly gave us light for 80 percent of that period; there was traffic holdup everywhere and only those who knew the terrain very well could move freely and there were police escorts and sirens everywhere

General. The funeral ceremonies of Chief EE Okoye, Odu2 of IgboUkwu took me two days, the first day as a member of the Idu Cabinet and the second as a member of the prestigious nze na ozo society. The highest Ozo initiation ceremony was the initiation of the 4 Ikwuetoghu brothers into the ozo-ship at a sitting, the first in IgboUkwu history. I also had time for my usual academic pursuits as I was the Guest lecturer at the Achina Development Summit, 29/12/19 (A new Model for Achina Development: The need for a paradigm shift) and the Youth Social Club of IgboUkwu 2019 Convention 31/12/19 (Preparing the Youths for Leadership) I actually enjoyed the whole period without the usual stress of lectures, results and meetings. The weather was dry dusty and cold; NEPA, quite surprisingly gave us light for 80 percent of that period; there was traffic holdup everywhere and only those who knew the terrain very well could move freely and there were police escorts and sirens everywhere. Our people are now all doctors, all chiefs, all Sirs so that everywhere you go, you see Chief, Dr. Sir XXX. And the latest status symbol is to have police escorts and sirens. Where did they get all these from? Were all these official? Anyway, by next year, I will have my own; even if they are OOU security personnel or the village vigilante! By 11/1/20, it was time to pack and return to the madness of Lagos. It was not necessarily because of activity drought. My pocket was almost dry; NEPA had taken light for two days; two of my sisters took ill simultaneously and one of them had to be taken to 5 hospitals before being admitted in the 5th. And of course, it was just time to go because of 1001 demands on me and other members of my family. I left IgboUkwu by 7 am and we were on the road for 14 hours, and I was on the steering. Note: The rest of this article continues in the online edition of Business Day @ Dr Muo is of the Department of Business Administration, OOU, Ago-Iwoye

Good repayment history doesn’t predict good customer


f you are involved in matters of finance- in particular, credit disbursement, it is pertinent that you note this revelation- “Good repayment history doesn’t predict good customer”. Financial institutions (lenders) have built some eligibility criteria elements that forms a basis for their credit decisions. This credit criteria are applied some weights in order of importance. This criterion is not limited to good repayment history, age, gender, repayment instrument, credit bureau checks, Debtto-Income ratio, rate of turnover, liquidity ratio, amongst others. Credit decision that surrounds the premise of good repayment history, of course is considered a well-established tradition in finance. A statistic from a renowned financial institution in Nigeria, found that 87 percent of sampled credits in their portfolio were disbursed on the basis of good repayment history of the client. Unfortunately, their analysis does not support the assumption that “applicants with satisfactory repayment history will make a good performance on credit even if other red flags are not put into consideration” It is pertinent to highlight why it is time for this sacred cow (of over-emphasis on good repayment history) to be made into burgers. Don’t overreact - instead examine the reasons why good repayment history doesn’t prognosticate performance.

Mode of repayment dictates performance Past performance is more likely to be an indication of future performance only if the environment doesn’t change. Environment in reference could be the structure of planned repayment. For instance, an initial facility whose repayment plan was based on a “deduction at source” basis (a system that allows for the employer of the client to remit loan repayment to the loan firm) doesn’t exonerate customer’s character. The reason for performance could be validly attributed to the fact that the client had no hold or control of his repayment. As such, it will be foolhardy to conclude on doing business with the same client on the sole basis of good repayment history now that he has control of his repayment. Exposures determines performance Although it might seem counterintuitive, good repayment history simply doesn’t accurately predict whether a loan applicant will perform on the next facility in review. This might be owing the exposure level. It is quite easy to perform on a facility whose repayment has a little impact on a client’s income compared to when the flip side is the case. This explains that it will be myopic to consider the customer’s payment history when the present exposures are evidently on a trajectory increase compared to the past. Client’s economic metrics It is a mistake to assume that years of good repayments automatically means character and capability of subsequent request is assured. The

economic determinants of an individual are subject to changes notably by Needs and Dependents. One of the questions credit companies ask prospective customers at the first contact is the number of dependents- which are put into the credit decision. Overtime this is subject to increase rather than decrease, same as needs. A look at this is worthwhile as a higher need and number of dependents indicates/ poses a higher risk to loan performance. Longevity of relationship may contribute to complacency Although this is more of a qualitative consideration as there is no mathematical or scientific measurement for this. However, it is a phenomenon of human beings. Since the clients are human, it is imperative to give this a thought rather than look this away. Over-familiarisation comes with contempt. Regardless of how long an individual has been loyal in loan repayment, credit risk analyst should always give an allowance of distrust and this should arise from the fact that human beings are adventurous in nature and like to test (most times knowingly) how a loan default would be handled by the lender and their excuse most times arise from the years of loyal relationship. Macro-economic scenes Let’s consider the SME as the client this time and not individual. Credit from financial institutions is a major source of income for SMEs and their successes cum failures by a large extent

Timothy Akinyomi tells on the economy health of country. The loan repayment behaviour for SME customers is heavily dependent on the macro economic variables- inflation rate, rate of unemployment, exchange rate, external debts, trade deficit, budget deficit and the likes. This tells us that the performance of loan is externally determined. As such, a previous good repayment history does not translate to same happening in the future. If your organisation is one of the few adopting a 100 percent data-driven approach to credit decision, the latest revelation should guide your orientation and next action during your next review process. My personal conclusion from this recent research is not that you should completely turn a blind eye to repayment history as a determinant for continuous credit relationship, but you should stop assuming that long time satisfactory repayment history automatically means that the client has more capacity and character to do well. You should be ready and willing to consider other eligibility criteria. “In a rapidly changing business world, anything that happened more than three years ago may be little more than ancient history”– John Sullivan; Professor, Author, Corporate Speaker of HR-Thought Leader.


Thursday 16 January 2020




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The Nigerian middle class and the second exodus (3) CHRISTOPHER AKOR


ver the last two weeks, I have tried to account for the mass exodus of the Nigerian middle class. I argued that military rule combined with poor economic management have been the main factors causing the exodus of the middle class. But I also argued last week that the middle class, as a unit, is not just a victim, but an enabler of the rot and despoliation of the country. Unlike the archetypal middle class in Western countries that act to protect the democratic order by ensuring good governance and accountability of elected leaders, the Nigerian middle class, with few exceptions, use their privileged positions to negotiate good deals for themselves, their families and friends and have thus become the medium through which Nigeria’s politics of plunder, neopatrimonialism and prebandalism is sustained and deepened. But by doing this, they are inevitably committing class suicide because as research has shown, the economic fate of the middle class economic is directly tied to the quality of govern-

ance and economic management. The middle class depends more on public services than the rich or upper class. The rich could, in most cases, opt out of public service but not so the middle class. They could attempt to opt out of public service, as the Nigerian middle class did when the quality of education declined from the late 1980s onwards. But as most of them are now realising, their diminished income cannot provide the kind of private education they enjoyed to their children. But why does the Nigerian middle class always act against its enlightened self-interest? The answer lies in a pathology David Hundeyin calls “culturally embedded pathological selfishness,” a “desperate, individualistic drive to survive in spite of (perhaps at the expense of) everyone else”. He traces the history of this narcissistic attitude to the “Meritorious Manumission Act of 1710 in the United States, which authorised the legal emancipation of slaves or improvement in their status in return for certain ‘good deeds’” such as saving a master’s life, property or snitching on fellow slaves. In reality though, no level of personal emancipation could insulate the slave from the harshness of 18th century American society. As many so-called emancipated slaves later discovered, there can be no personal emancipation outside the group and no matter how they tried, they could not escape the “nasty shared experience of blackness.” That mindset found its way back

across the Atlantic and has taken deep roots in our culture and religion, and has led to the belief that our personal interests comes before the collective; that, in fact, our “case is different” and that in spite of the bleak fortunes of our society, we could prosper and become quite successful as individuals. Needless to say, this perverse mindset only makes us become more vicious and untrustworthy, always willing to cheat, back-stab one another and endanger the interest of the collective for an illusion of personal emancipation. It is this false consciousness that makes a public official thinks he is looking out for his interest and that of his family by embezzling funds meant for social services or infrastructure. It is why the search of lucre has become the main motivation for politics, religion and life generally in Nigeria. Of course, like the 18th century emancipated slaves discovered, personal emancipation outside group emancipation is a mirage. However, the Nigerian middle class is yet to realise that simple fact. We destroy the chance of group emancipation by our utter selfishness but go to church every day to listen to pastors who assure us that we can achieve personal breakthroughs even if the entire society is out of joint. We offer our services to perpetuate military and civilian dictatorships but go to church and mosque to pray for good governance and God-fearing leaders. We sit by idly or even partake in the diversion of funds meant for invest-

‘ Needless to say, this perverse mindset only makes us become more vicious and untrustworthy, always willing to cheat, back-stab one another and endanger the interest of the collective for an illusion of personal emancipation

ments in public infrastructure such as health and roads but we go to the church and mosque daily to pray for good health and for journey mercies when travelling. We sit by and watch as our leaders turn the country to a haven of poverty and unemployment yet go to church and mosque to pray for protection from robbery and burglary. Eventually, when we come up against the harsh reality of what our country has become and our utter helplessness, we want out. We aspire to go live in a country where its middle class are performing their duties of holding their governments accountable and ensuring adequate investments in public infrastructure and services. I’ll end with a personal and painful example. Sometime in 2017, the Lagos state governor invited senior editors of media houses to the government house, Ikeja, to brief them on government’s plan for the state and to get their inputs. At the meeting, I watched with shame as senior journalists and editors suck up to the governor, shamelessly singing his praises and asking for ridiculous favours. My single attempt to ask the governor probing questions on government accountability brought the programme to an end and accusations from my colleagues of embarrassing my host. If senior journalists, whose job it is to hold government accountable, could behave this way, imagine what other professionals do when they come in contact with political leaders.

Uber and competition regulation in Nigeria’s ride-hailing economy (2)


nder Uber’s model, prices are not fixed by drivers, but through an algorithm managed by Uber. Competition authorities may need to investigate whether Uber’s pricefixing algorithm is maneuvered to reduce competition among drivers. If Uber’s algorithm merely changes prices in response to driver demand and supply, then no collusion exists and an occurrence of drivers charging the same price should be regarded as coincidental. However, Uber’s actions suggest that it not only manipulates prices, but also unilaterally offers price discounts and sets minimum prices for routes. For example, in 2017, Uber unilaterally slashed fares in Lagos by 40 percent and fixed minimum fares for certain locations: “Magodo to Gbagada [old price] From N1,100 [new price] From N600”. If the assumption that Uber fixes prices between its drivers is correct (assuming drivers are independent contractors), then section 107 FCCPA is breached. Section 60 Federal Competition and Consumer Protection Act (“FCCPA”) provides some leeway for Uber should its price-fixing system become the subject of competition scrutiny. By that provision, price-fixing arrangements may be valid if the undertakings satisfy the Federal Competition and Consumer Protection Commission (“Commission”) that the arrangement: benefits consumers, improves production or distribution of services or the promotion of technical or economic progress; imposes only restrictions that are indispensable to achieving the objec-

tives in (i) above; and does not afford the undertakings concerned the possibility of eliminating competition in respect of a substantial part of the services concerned. While Uber may successfully show that its business model has brought economic and pro-consumer gains (reduced taxi fares, increased options for consumers), it is unlikely to satisfy the third condition, since the system completely eliminates price competition among drivers. However, a decision of the Luxembourg competition authority suggests otherwise. The decision arose from an inquiry into Webtaxi, a company which provided a platform that linked taxi companies with consumers and fixed fares algorithmically. Notwithstanding a finding that the arrangement was restrictive, the Luxembourg authority granted an exemption on the basis of Article 4 of the Luxembourg competition law, the equivalent of section 60 FCCPA. The authority concluded that there were pro-consumer and efficiency gains (lower prices set by the algorithm, decrease in empty taxis and waiting times). The authority also resolved that the pricefixing was indispensable to achieving the pro-consumer benefits of the arrangement, as these benefits could not be attained by any viable alternative. Certainly, Uber can advance the arguments in this decision in seeking exemption under section 60 FCCPA. Regulatory disparity Uber has also faced resistance from traditional taxis which have alleged regulatory disparity between Uber and taxis.

Here, the complaint against Uber yields at two levels – price competition and market access. The first level is price competition – that Uber does not observe taxi regulations on pricing, and therefore traditional taxis cannot compete with Uber which can make “more competitive prices” according to market needs. In Nigeria, there are hardly any price-fixing regulations for traditional taxis and such taxis are free to compete with Uber by offering lower prices. However, a few instances still exist where taxis have to comply with rates set by regulatory associations. The second level concerns access to the market. Under extant regulations, traditional taxis are licensed as commercial cars, pay regulation fees and are painted in certain colours. These taxis, identified by their colour or other marks, are prohibited from entering certain locations, residential estates or hotels. A good chunk of the market is therefore lost due to compliance with taxi regulations or residential prohibitions. Uber does not have these limitations and is therefore able to provide services to a wider range of customers, enjoying an ostensibly unfair competitive edge over traditional taxis. In March 2019, as a reaction to the divergent regulatory practice at the Abuja airport (taxis paid fees to operate at the airport while Uber drivers did not), taxi drivers began harassing and chasing away Uber drivers from the airport. It is doubtful whether competition law is the appropriate tool to remedy the ‘unfair’ advantages which Uber derives from the asymmetrical regulatory regime. Indeed, the Commission

Ifeanyi Nwankwo

lacks the authority to bring Uber within the ambit of the applicable taxi regulations; such authority seems to reside elsewhere. As the Commission settles into its regulatory function, one expects increased scrutiny of practices in the transportation sector. The relevant authorities may seek to introduce regulations that ensure a balanced platform for competition between Uber and traditional taxis. A regime that would require Uber drivers to comply with certain taxi regulations, such as painting cars a particular colour, may work against Uber’s business model and hamper innovation. A better framework is one that removes obstacles hindering traditional taxis from competing with Uber while encouraging them to evolve to adequately compete in the ride-hailing economy. Prince Nwankwo holds law degrees from Harvard Law School and the University of Nigeria. Currently, he provides legal and technical support to the ECOWAS Regional Competition Authority as a Harvard Orrick Fellow. The author can be reached by email at nwankwokoko@gmail. com.




Thursday 16 January 2020

Editorial Publisher/Editor-in-chief

Frank Aigbogun editor Patrick Atuanya


Bashir Ibrahim Hassan


More must be demanded from local governments


ost Nigerians either aren’t b o t h e re d o r simply don’t know the chairman or councillor of their local government area. It’s a measure of political apathy in the country. Cities, communities and towns across the 36 states of the country are grouped into 774 local government areas. That’s 1,548 people with executive powers, and a budget, who are better placed to respond immediately to the needs of the people. In reality, it’s thousands of elected (appointed or imposed) official ghost workers. Since these absentee executives are unknown, they don’t get called when roads need to be fixed, street lights repaired or health centres supplied with drugs; the state governor or the president is blamed. A doit-yourself or manage-it-likethat mentality is the default response. Several reasons may explain the pervasive attitude of never

expecting anything from government (except petrol subsidy, for those in Lagos and Abuja). It may be a carryover habit learned under military rule; the soldier come; soldier go style of the military does not appreciate that some issues are better solved at local levels. Freedom, speed, action, initiative – the principle of subsidiarity is applied in many fields from government to management. It’s a form of decentralisation whereby the central authority doesn’t perform tasks better done at the local level. In the US, the principle of States’ Rights is guaranteed by the constitution. The adoption of the federal system of democracy was supposed to bring government closer to the people. But the way it has been practised in over 20 years government is a stranger, aloof and impersonal. Alexis Tocqueville in Democracy in America notes that “Decentralisation has, not only an administrative value, but also a civic dimension, since it increases the opportunities for citizens to take interest in public affairs; it makes

them get accustomed to using freedom. And from the accumulation of these local, active, pernickety freedoms, is born the most efficient counterweight against the claims of the central government, even if it were supported by an impersonal, collective will.” One other reason could be because the majority of those living in the LGA don’t have skin in the game, that is, there’s no personal financial implications involved in who becomes councillor (oil revenues and company tax go to the federal government while states collect taxes on salaries and other levies). But a review of federal allocations for 2019 shows one truth that many citizens often overlook. The 36 states and 774 local governments of the country get a significant chunk of the money disbursed to the three ties of government. Last year, was shared among the states and LGAs came N1.365 trillion between January and October, based on data compiled by BudgIT, a nongovernmental organisation. According to it, “Local governments in

Nigeria receive 20.6 percent of the revenue generated by the Nigerian government amounting to billions of Naira monthly. However, there is largely no account to show how these monies are spent.” Add value-added tax and revenues each state generates internally to this mix and it is humungous sums of money going to the states. More importantly, a recent court ruling has recognised the autonomy local governments in Nigeria. It empowers them to conduct independent elections and run their accounts. These are enough reasons to look less to Alausa or Aso Rock when the public schools in your local government area has no windows, blackboards or teachers. Citizens must demand accountability from their LGAs. They must ask what they have done with the huge resources at their disposal. Without an engaged civic society, their budgets won’t scrutinised? No one will demand that the budgets be on accessible websites so citizens can monitor them.

EDITORIAL ADVISORY BOARD Imo Itsueli Mohammed Hayatudeen Afolabi Oladele Vincent Maduka Opeyemi Agbaje Amina Oyagbola Bolanle Onagoruwa Fola Laoye Chuka Mordi Mezuo Nwuneli Charles Anudu Tunji Adegbesan Eyo Ekpo Wiebe Boer Paul Arinze Boye Olusanya Ayo Gbeleyi Haruna Jalo-Waziri Clement Isong

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Thursday 16 January 2020

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Against an Amotekun clone in the South East The Public Sphere



ince the launch of a regional security initiative in the South West, code name Amotekun, Ndigbo have been on the Mountain of Lamentations singing and reading the Book of Lamentations. They vilify the five governors of the South East for not forming a similar one. On several platforms, commentators have engaged themselves in suggesting fanciful titles for the proposed South East regional security framework modelled after Amotekun. Let me pour cold water on this misguided enthusiasm. It is unnecessary and lacking in strategic nous for Ndigbo to replicate Amotekun. Our people say somethings may look alike but be very different. A big surprise for me in the lamentation series was the social media post of a spokesman of one of the South-East governors. He stated, “I love the Yoruba. They didn’t make any noise. They came together and gave us Amotekun. Chew on that!” I chewed on it and found the suggestion contradictory and unnecessary. Please come with me. The most recent statistics on crime across the regions showed that the

South East has the least incidence of robberies and kidnappings. Data compiled by StatiSense on Insecurity in Nigeria in 2019 shows the number of kidnappings by zone. Northwest had 597 (43 percent), South-South 276 (20 percent), North Central 228 (16 percent). Others are North East 180 (13 percent), South West 86 (6 percent) and South East 20 (1 percent). There may be issues with the integrity of the data, but it paints a picture that captures the trend reasonably accurately. The data, supported by claims by the Nigeria Police Force, says the South East is the safest zone in Nigeria. The region has overcome armed robbery and kidnappings. It was never home for banditry. Anambra State is one of the states to claim the prize for safety. Last year the state made heavy publicity weather of the security equipment it bought and handed over to the police and internal security operations. It continues to celebrate the successes with security that made Obinwanne 2019, otherwise known as Christmas Homecoming, such a blast in the state with several cultural events. My understanding is that the South-East states commenced security arrangements individually. Abia State designated a Ministry of Homeland Security. They are still recruiting young people, male and female, across the state to man this new vigilante operation. Enugu State worked on Forest Guards. It promised to equip the Forest Guards and Neighbourhood Watch teams with 18 drones, among other facilities. Ebonyi State did a similar thing, as did Anambra with a very elaborate security arrangement. The difference between the South

East and South West it seems to me, therefore, is approach and terminology. SE governors chose the individual states approach, consistent with our leaning in the South East. Since the region became states, we have always approached matters this way. There is no comment here on whether it is good or bad. SW chose the collective approach. Something exists in the South East. Nothing says each region must follow the same approach. In matters of security, the less noise, the better. I commend the South-West governors for identifying and crafting a framework that meets the needs of their region. They should stay focused and fix the nuts and bolts of the scheme as issues crop up. They include a lack of enthusiasm by some, claims of non-consultation by legislators etc. Proper internal security arrangements in all our regions are essential given the experience of southern Nigeria in the last three years. Unfortunately for our region, people do not believe the governors have done something significant in security management. This lack of awareness or distrust explains the lamentation and the calls. It also explains the fumbling even by government officials in the South East. A high official in Ebonyi State walked the path of needless comparison and unscripted messaging while citizens debated the matter. In seeming defence of the governments of the South East, he claimed that those who boldly launched Amotekun copied the South East’s regional plan that it had not unveiled. How low can you go? How can someone copy what you have not done? The claim contradicted even his correct position

The difference between the South East and South West it seems to me, therefore, is approach and terminology. SE governors chose the individual states approach, consistent with our leaning in the South East. Since the region became states, we have always approached matters this way

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

Is the AU as an institution protecting Chergui?


ne of the great advancements made in the last few years would undoubtedly be the redressing of ill against the female gender that has carried on for as far back as any historian can accurately put. Discrimination against women, suppression, disenfranchisement, marginalization, sexual and physical abuse, shaming and emotional abuse, among many ills are part of a dark past, a continuing reality but an avoidable future woman face. However, in the middle of the last decade, precisely in 2006, Tarana Burke, a civil rights activist from The Bronx, New York, framed two words that would help demand justice for women. Those simple words were: Me Too. These words have been retweeted over a million times and translated into hundreds of languages to give women a voice, a hope, and a power to demand change. It has brought down the great captains of industries or should we say gatekeepers of a patriarchal system that would undermine women. The likes of Harvey Weinstein, Bill O’Reilly, and countless others, whose names no longer matter. The movement, though with its flaws, not only succeeded in tilting the balance of power between oppressors and oppressed, it strengthened the fourth wave of feminism and brought women issues in politics, corporate world, academia and everywhere else into mainstream dialogue. It gave women hope and a voice. But not all women have found their voices yetespecially not the ones in Africa’s highest

sphere of influence and power: The African Union (AU). Ambassador Smail Chergui is a cool, collected looking man who in 2013 was nominated at the head of the AU Commission for Peace and Security. He is also one man fingered at by scores of women who work at the AU for discrimination and sexual crimes, yet he has been protected from the consequences of his actions by the same body that “To promote and protect human and peoples’ rights in accordance with the African Charter on Human and Peoples’ Rights and other relevant human rights instruments.” This would in today’s enlightened society be called “enabling”. It’s meaning is similar to being an accomplice before, during and after the fact. In 2016, Chergui tweeted “We welcome the UNSC Resolution adopted by 14-0 yesterday to combat sexual abuse & exploitation by peacekeepers.” In 2017, he also posted from his tweeter handle “A major step to end sexual exploitation & abuse in peacekeeping missions is to deploy more women in uniform. #AU concurs & we’re doing it.” In January 2018, an AU internal petition signed by 37 women members of the AU Commission condemned discriminatory practices against female civil servants inside the commission. The internal investigation revealed harassment and sexual misconducts. A month after, an internal inquiry was open against women marginalization, sexual and other forms of harassment and a lot of women confidentially gave witness


to Cherugi’s ill-behaviour. Quartz Africa, a media covering continental socio-political and economics events, broke the news of the AU abuse with headline: The systematic discrimination that’s brought the African Union to its own #MeToo reckoning. But that reckoning never came. Quartz’s coverage was on the fact the women felt overlooked for promotions; their contracts ended without explanation, and alleged corruption and manipulation of hiring practices and daily discrimination. The media outlet noted that AU commission deputy chair Kwesi Quartey apologised to the women on May 19, 2018 and promised to investigate the matter. “The commission is the executive body of the union, but the women accusers say it is hamstrung by internal power struggles and boys club.” A year after and there is no redress or justice for the women. Instead, a scapegoat was made of El Ghassim Wane, AUC Chief of Staff and Chief Advisor. Chergui managed to manipulate the situation and steer some charges to Wane, who was his enemy. This forced wane to resign after a career that spanned over thirty years at the AUC. The issue here is not about Chergui or Wane or whichever character has also been named or accused in the suppression of women’s right and freedom at the AU. The point is that nothing has changed and justice still eludes women in Africa. In the continent’s highest body, the practice of “something for something” puts the careers of illustrious, brave and dedicated women at

that the South-East states tackled the matter individually. South-East governors have a perception deficit that they must work hard to remedy. Mind the Gap! The gap between our governors and their citizens, at home and in the Nigerian diaspora, is vast and growing every day. It would make citizen mobilisation difficult in the days ahead when there may be such a need. South-East governors need to communicate better. State governments and governors need to build trust. They need to win the empathy and goodwill of their citizens. It should be that the people believe in them and do not run off on emotionalism calling for a replica of a project elsewhere. Mind the gap. Excellent communication also entails having clear messaging on matters. On matters affecting the entire region, the message should be the same from Abia through Anambra, Ebonyi, Enugu to Imo. The region has tried and tested structures for internal communication. One of those pioneered in the era of the Igbo State Union is the deployment of our towns’ unions. Then the churches and cultural associations. State governments are not communicating. On security, it is imperative to get the buy-in of communities and citizens. This way they can react in a more informed and less emotive manner to developments elsewhere such as Amotekun. The grass is not always greener on the other field.

the mercy of men who believe they are entitled to decide who moves up the rank. The very fact of this injustice puts every female in Africa at risk because if accountability and trust is lost at such level then there is little participation for African women in the benefits their counterparts around the world enjoy in a world woman have now found their voices. Worse would be the fact that this hypocrisy or lip service of AU to be fighting for gender equality would slow progress for women as it gives a form that has no substance. In order words, women would have a false sense of belonging which would perpetuate for as long as they do not come to terms with reality-they are yet to have a place at the table. But let’s make the issue about Chergui for the very purpose of understanding why there is still no justice for women in this landmark case. This case makes one wonder why the AU is yet to take decisive action and if they are indeed protecting a system that undermines the African women. The question a sincere heart would ask is this: Despite all evidence of abuse, is the AU as an institution protecting Chergui? Johnson is a commentator from Lagos



Thursday 16 January 2019


cityfile Ogun: 3 charged with murder of 7-yr boy


n Abeokuta Magistrate Court sitting in Ake, has remanded three men for allegedly kidnapping and killing a seven-year boy, Musa Abdulmalik The defendants, Faruq Sheiidu, 34; Nurah Habbib, 26; and Mohammed Bello, 42, whose pleas were not taken by the court, faced a three-count charge of conspiracy, kidnap and murder. The magistrate, Victoria Williams, ordered that the case file be sent to the director of public prosecutions for legal advice. Williams adjourned the case till March 16 for mention. The police prosecutor, Adekunle Opayemi, told the court that the defendants committed the offences on December 11, 2019 at about 8:00pm at Musa Abdulamid Compound, Oke field area of Abeokuta. According to Opayemi, the defendants kidnapped and killed the boy after his parents could not pay the ransom they asked for. “The trio took the boy to where nobody could have access to him and strangled him to death,” the prosecutor said. He added that the offences contravened Sections 516(A), 23(2), 24(1) and 324 of the Criminal Law of Ogun, 2006 .

Gunmen abduct 2 teachers in Edo IDRIS UMAR MOMOH, Benin


uspected gunmen have abducted two teachers –Dada Okuns and Esther Alabi, in Avbiosi communiy in Owan West local government area of Edo. Chairman of the local government council, Frank Ilaboya, confirmed the incident at Avbiosi on Tuesday, saying Okuns, the NUT chairman in the area, and Alabi were abducted on Monday. Ilaboya said that the abductors stormed the premises of Obi Primary School, Obi Camp, at about 10.30 a.m. and ordered six teachers in the school to follow them, after shooting sporadically. “Four of the six teachers escaped while the gunmen succeeded in taking the two away,” he said. The council chairman however expressed hope that the victims would be released. “All efforts are being made to have the teachers released unhurt. We are on top of the situation and there is hope that they will be out in no distant time. “We will step up the search this morning and no stone will be left unturned until the victims are rescued unhurt,” he said. The police and education authorities in the state are yet to react to the development.

Shina Olukolu (r), commissioner of Police, Oyo State; briefing newsmen during the presentation of some suspects in Ibadan on Tuesday. NAN

Delta set for construction of N5bn film village, leisure park


ith approval now secured from the Delta House of Assembly, the state government is set to mobilise 70 percent funding from private sector investors for the construction of the N5 billion film village and leisure park in the state. The film village and leisure park will be built at Ugbolu, in Oshimili North local government area. The state governor,

Ifeanyi Okowa, had requested the house’s approval for the project. The request of the governor was contained in a letter read by the speaker, Sheriff Oborevwori, during plenary on Tuesday. Okowa said that the project, when completed, would not only boost the revenue base of the state, but would also create jobs for youths of the state. He further explained that the state government would provide 30 per cent of

the funding of the project, while investors would provide 70 per cent. The majority leader of the assembly, Tim Owhefere, moved the motion for the house to receive and adopt the letter. The motion was seconded by the member representing Udu constituency, Peter Uvieijitobor. The request was unanimously adopted by the lawmakers when it was put to voice vote by the speaker.

Farmer/herders clash claims 2 in Edo IDRIS UMAR MOMOH & CHURCHILL OKORO, Benin


clash between herders and farmers reportedly left two persons death at Sobe community in Owan West local government area of Edo State. Frank Ilaboya, chairman of the local government who confirmed the killings said he had since informed the state Commissioner of Police, Lawal Jimeta of the current situation. Ilaboya said the commissioner of police has promised to swing into action to prevent further crisis. It was learnt that trouble started last Sunday when an 11-year boy was alleg-

edly murdered in a bush. According to eyewitness, the boy was murdered when he went to fetch firewood. The witness said, in a reprisal attack, one herder was killed by the boy’s relative and some youths in the community. “Following the death of the child, the boy’s relatives from Kwale mobilised some youths to retaliate, went after the herders and subsequently killed one of them”, the witness said. The local government chairman, who appealed to the warring parties to refrain from further violence, however, thanked security agencies for quick intervention. “There is need for everybody to remain peaceful and calm in the com-

munity. I have personally spoken to the traditional ruler, Odibiado of Sobe, Anthony Ero Aleburu, on the need to mobilise his people to ensure there is no more casualty. “I have also spoken and mobilised the security apparatus in the local government to ensure they are on the standby to forestall further crisis. “Thank God the security agencies quickly moved in, and in conjunction with the Odibiado and the people of Sobe, calm was restored. “This is why I am appealing to all for calm, that people should be refrained from further violence, as violence will not do the community or anybody good,” he stated.


Thursday 16 January 2020




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N15.175 trillion




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MTNN, UBA, ETI, Zenith, Dangote Cement, others outperform market Iheanyi Nwachukwu


espite record profit taking s een two days ago on the Nigerian Bourse, the stock market still showed impressive level of positive returns at +9.09 percent year-to-date (YtD). While tracking equities performance this year, INVESTOR found stocks that have outperformed the NSE benchmark indicator –the All Share Index (ASI). The share prices of UACN, MTNN, Okomu, UBA, ETI, Zenith, Flourmills, Dangote Cement, C& I Leasing, Africa Prudential, Cornerstone Insurance, Ekocorp, FBN Holdings, May & Baker, Nascon,, Vitafoam, and Unity Bank have increased well above 10 percent this year. “ We e x p e c t d e m a n d i n high dividend-paying stocks, example MTN, Zenith, UBA as well as interest in Dangote Cement and BUA Cement due to recent corporate action to sustain moment in the equities market. However, we do not rule out profit-taking,” according to Lagos-based analysts at United Capital. “We expect a mixed performance as investors are likely to take profits due to relatively high stock prices”, said Afrinvest Research analysts in their January 13 note. The NSE ASI closed in the red

on Tuesday January 14, thereby opposing the record bullish performance seen in previous trading days of this year. As at that date, investors have made money in stocks like Access Bank which shows price gain of +5 percent year-to-date (YtD),

Africa Prudential (+15percent), AIICO (+6.9percent), Beta Glass (+9.7percent), and recently listed BUA Cement (+11.3percent). CAP Plc share price has gained +4.2perent this year, Caverton (+9percent), Champion Breweries (+3.2percent),

Chams (+3percent), and C&I Leasing (+24.6percent). The ra l l y y e a r- t o - d a t e h a s a l s o favoured investors in Conoil (+8.1p e rce nt) , Co r n e rsto n e Insurance (+17.8percent), Cutix (+7.5percent), Dangote Cement (+19.7percent), Dangote


Sugar (+8.8percent), Ekocorp (+22.4percent), and ETI (+20percent). Other stocks that have impressed the market this year and the rate of their increase are FBN Holdings (+13.8percent), FCMB (+3.8percent), Fidelity B a n k ( + 2 . 4 p e rc e n t ) , Fl o u r Mills (+21.8percent), GTBank (+6.4percent), Honeywell (+4percent), and Jaiz Bank (+3.2percent). Also included in the basket of equities with prices showing positive trajectory this year are Julius Berger (+9.8percent), La sa co ( + 8 p e rce nt) , L ea r n Africa (+7.1percent), Livestock Feeds (10percent), AXA Mansard (+8.1percent), May & Baker (+12.4percent), MTNN (+18.3percent), Nahco (+1.7percent), and Nascon (+15.8percent). The list of positively performing stocks shows NPF Microfinance Bank (+7percent), Okomu Oil Palm (+18.7percent), Presco (+10percent), PZ (+3.5percent), Royal Exchange (10percent), S overeig n Tr ust Insurance (10percent), Stanbic (+3.7percent), Transcorp (+4percent), UACN (+28.5percent), UBA (+15.4percent), Union Bank (+2.5percent), United Capital ( + 8 . 7 p e rc e nt ) , U n i t y Ba n k ( + 1 2 . 5 p e rc e nt ) , U n i v e r s i t y Press (+1.6percent), Vitafoam (+10.9percent), Wapic (5.9percent) and Zenith Bank (+14.5percent).


Thursday 16 January 2020


Investor Helping you to build wealth & make wise decisions

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United Capital Investment Views

Nigerian equities on steroid


he past week in the equities market was rather eventful as the first full trading week of the year recorded a 9.1percent weekon-week (w/w) surge to close at 29,415.4 points. The market capitalization also expanded to N15.2trillion, following the N1.18trillion listing of BUA CEMENT. The market was abuzz with activity as the average value traded increased by 28percent to N6.9billion and average volumes traded increased by 4percent to 600million units. Four out of the five sectors under our coverage closed positive. The industrial sector (+22.3percent) recorded the highest gain on the back of the new listing of BUACEMENT (+17.1percent), DANGCEM (+21.13percent) and JBERGER (+9.80percent). The Banking sector (+8.4percent) followed suit driven by ZENITH (+13.5), FBNH (+15.9percent) and GUARANTY (+6.1percent). The Insurance sector (+2.1percent) was driven by ga i n s i n M A N S A R D (+2.5percent), CORNERST (+9.4percent). The consumer goods sector (+0.8percent) was not left behind with

Money Market: Open Buy Back (OBB) and Over Night (O/N) rate spikes to 10.2percent For the previous week, overall system liquidity remained elevated, as naira inflows in the form of OMO maturities (N469.8bn), outweighed naira outflows such as the FX Wholesale auction and OMO sales (N411.0bn). However, the average interbank funding rate at the close of the week increased to 10.2percent (up 7.5percent w/w). In terms of primary market activities, the CBN floated an OMO auction, with N350billion on offer and a total subscription of N411.1billion. Notably, demand was heavily skewed towards the 362-day bill (bid to cover: 1.2x), with no sale on the 180-day and an unimpressive demand for the 89-day (bid to cover: 0.01x). Also, the Apex bank was able to guide stop rates lower, at the long end, by 1basis point (bp) to 13.25percent. Elsewhere, the secondary Nigeria Treasury Bill (NTB) market remained tight, as local participants held onto existing bills. However, we saw a bit of buying interest, as average yield declined by 37bps w/w to 4.2percent. Likewise, the

FLOURMILL (+16.5percent) and HONYFLOUR (+7percent) driving gains. The oil and gas (-2bps) sector, on the other hand, declined marginally due to FO (-6.1percent) and SEPLAT (-0.4percent). Investors’ sentiment was clearly bullish, indicated by a market breadth of 3.2x as 38 stocks advanced against 12 decliners. This week, we expect demand high dividend-paying stocks (e.g.) MTN, ZENITH, UBA) as well as interest in DANGCEM and BUA CEMENT, due to recent corporate action, to sustain moment in the equities market. However, we do not rule out profit-taking.

average yield in the secondary OMO market dropped by 37bps w/w to 12.7percent, as eligible investors latched onto existing bills. As a result, total value traded for OMO and NTB bills increased 35.7percent and 6.7percent w/w, to N1.2trillion and N70.8billion respectively. This week, we expect activities at the primary NTB market to take a bullish turn, as the DMO seeks to rollover a total of N201.5billion. Also, we expect the CBN to float at least one OMO auction, with OMO maturities worth N434.7bn scheduled to hit the system on Thursday. Elsewhere, bond coupon payment worth N106.3billion is expected,

further elevating system liquidity. In all, on the back of the buoyant level of liquidity in the system, we expect rates to continue to moderate. Bond Market: Sovereign Eurobond rallies as average yield dips 29bps Sentiments in the secondary bond market were upbeat during the previous week, as investors continued to scramble for available outlets. Notably, buying interests were seen across all tenors, as average yield declined by 29bps w/w, to settle at 10.4percent. However, the total value of bonds traded declined by 18.6percent w/w to N428.1billion. At the Eurobond market, Nigeria’s sovereign debt rallied, as average yield declined 29 bps, to 5.9percent. This was as the negative effect from a drop in Brent crude oil prices (-4.7percent w/w to $65.4/b), was outweighed by positive sentiments from the expected U.S.-China Phase one trade deal signing. Notably, this rally was seen across sovereign Eurobond issuances in Africa under our coverage. At the other end of the spectrum, the average yield on Corporate Eurobonds recorded a bearish performance, ticking up 5bps to 5.1percent. E ls ewhere, follow ing the release of the Lagos State Government’s plan to issue N100billion, from its N500billion Debt Issuance Programme, the National Pension Commission (PENCOM) issued a circular noting that the Lagos state government had failed to meet the minimum requirement for qualified investments by PFAs. However, this was reversed following communication by the Lagos Government with PENCOM clarifying its position. Looking ahead, we expect interests in the secondary bond market to remain significant, as a result of the buoyant level of system liquidity. For Eurobonds, following the expected signing of the U.S.China phase one deal this week, we could see continued fund flows to developing and emerging market assets like Nigeria. However, the trajectory of oil prices could cap overall interests. Currency Market: Local unit holds firm The performance of the naira was stable across the three segments of the FX market.

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Economy & Markets

Fixed income, currency market review shows N16.45trn in December Iheanyi Nwachukwu


urnover in the Fixed Income and Currency (FIC) markets for the month ended December 31, 2019 was N16.45trillion, representing a month-on-month (MoM) decrease of 23.88percent (N5.16trillion) on the turnover recorded in November 2019 (N21.61tr illion), FMD Q Securities Exchange report shows. The record turnover in December represents a yearon-year (YoY) decrease of 7.11percent (N1.26trillion) in comparison to the turnover recorded in December 2018 (N17.71trillion). Foreign Exchange (FX) and OMO bills were the most traded products jointly accounting for 63.79percent of the total FIC market turnover recorded in December 2019. FX Market Total FX market turnover i n D e c e mb e r 2 0 1 9 wa s $18.49billion (N6.74trillion), representing a 10.30percent ($2.12billion) MoM decrease from the turnover recorded in November 2019. Analysis of FX market tu r nove r by t ra d e t y p e indicated MoM decreases across all categories, with InterMember trades recording the highest percentage MoM decrease at 12.56 percent ($0.38billion), while MemberClient trades recorded the highest MoM decrease in dollar (nominal) terms, at $1.41billion (11.68percent). Additionally, analysis by product type indicated that the MoM decrease in FX turnover was driven by the 15.73percent ($1.87billion) and 2.88percent ($0.25billion) decrease in FX Spot and FX Derivatives turnover, accounting for 88.18percent and 11.82percent of the MoM decrease in total FX market turnover respectively In December 2019, the Naira-settled OTC FX Futures Contract (NGUS DEC 24 2019) with total open contract value of $1.71billion matured and was settled, and a new contract, NGUS Jan 27 2021 for $1billion at $/N367.48 was introduced. This brings the total value of open OTC

FX Futures Contracts to c. $9.67billion, while the total value of contracts settled from inception to date stands at c. $33.62billion. The CBN Official Spot rate for $/N remained constant at $/N307 in December 2019, while, the parallel market rate depreciated by $/N2 to close at $/N362 from $/N360 recorded in November 2019. Further, the Naira depreciated against the US Dollar at the Investors’ and Exporters’ (I&E) FX Window by $/N1.70 to close at $/N364.51 in December 2019 ($/N362.81 in November 2019) Fixed Income Market (T.bills, OMO bills and FGN6 Bonds). At the end of December 2019, the outstanding value of OMO bills decreased by 9.15percent (N1.31trillion) MoM to N13.01tr illion, whilst the outstanding value of T.bills remained flat at N2.58trillion. Conversely, the outstanding value of FGN Bonds increased MoM by 3.17percent (N0.29trillion) to close at N9.43trillion in December 2019. Trading intensity for T.bills and OMO bills decreased to 0.19 and 0.27 respectively in December 2019 from 0.86 and 0.28 recorded in November 2019. The substantial decrease in T.bills trading intensity was driven by the 77.48percent (N1.72trillion) MoM decrease in T.bills turnover in December 2019. Conversely, trading intensity for FGN Bonds increased to 0.30 in December 2019 from 0.26 recorded in November 2019. Year-to-Date (YtD) trading intensity for bills (T.bills and OMO bills) and FGN Bonds stood at 5.09 and 1.91 respectively compared to 5.50 and 1.49 recorded in the corresponding period in 2018. @Businessdayng

In December 2019, T.bills and OMO bills within the 6M 12M maturity bracket were the most actively traded among the short-term securities (that is 1M – 5Y) accounting for 32.38percent of the total Fixed Income market turnover, while FGN Bonds within the 20Y – 30Y maturity bracket were the most actively traded among the medium to long-term securities (that is 5Y– 30Y), accounting for 13.69percent of the total Fixed Income market turnover. Weighted average yields on short, medium and longterm fixed income maturities decreased by 0.79percent, 9.66percent and 0.27percent respectively in December 2019. In addition, the stop rates for T.bills at the primary market declined in December 2019 from the rates recorded in November 2019 across all tenors whilst the stop rates for OMO bills declined for the 205day to the 364-day tenor which is attributable to the continued impact of the CBN directive on OMO auctions; no OMO bills were sold for the 82-day to 112-day tenor. Consequently, inflation-adjusted yield was negative across all tenors of the yield curve excluding the 15Y, 20Y and 30Y tenors which remained positive in December 2019. Money Market (Repurchase Agreements/Buy-Backs and Unsecured Placements/ Takings) Total turnover in the Money Market decreased MoM by 51.39percent (N2.84trillion) to N2.68trillion in December 2019, driven by the Repurchase A g re e m e n t s / B u y - B a c k s segment which recorded a MoM decrease of 52.42percent (N2.84trillion) in turnover to N2.58trillion in December 2019 from N5.42trillion in November 2019.

Wednesday 15 January 2020






NSE gains but Oil & Gas, Consumer Goods stocks missing in action SEGUN ADAMS


he rally that lasted 8 days (11 days counting from last year) until Tuesday helped push NSE year’s return to positive region after a disappointing 2019. But stocks in Oil and Gas and Consumer goods sector haven’t benefitted, having declined so far in the year. Oil and Gas stocks have plunged 6.12 percent in 2020 and Consumer Goods have shed 2.3 percent to be only sectors costing investors money amid NSE’s best run since mid-2017. While the laggards are down, Industrial Goods is up 15.37 percent with Banking and Insurance at 8.88 percent and 1.82

percent respectively. Stocks like Unilever (-18.18%), NB (-13.39%), Seplat (-10.61%), Cadbury (-5.21%), and Oando (-4.76%) are among NSE’s worst-performing as of Tuesday. The poor sentiments towards the underperforming sectors point to fundamental-and perhaps perennial-problems that weigh on company performance and limit growth potential. Consumer Goods firms, on one hand, struggle with slower sales on the heels of shrinking consumer wallet, and infrastructure lapses in Nigeria that push their cost up and crimp profit, while downstream Oil and Gas sector players have to operate in an environment where the governmentowned-NNPC is both

regulator and competitor. The decline seen in the stock market last year was heralded by warnings that unclear policy direction and government’s reluctance to allow market forces prevail would negatively impact investor confidence in the economy. In the Nigerian moribund downstream Oil and Gas, Conoil saw its profit growth pare to 7 percent in nine months of 2019, down from 16.9 percent growth the year before. Oando’s profit growth also slowed to 26 percent in 9M 2019 vs 45.9 percent in the corresponding period of 2018, while Mobil’s profit fell 19 percent in 2019. Losses worsened for MRS Oil while Total recorded a loss in the period.

Analysts say government’s pegging Premium Motor Spirit (PMS) at N145 per litre is squeezing margin, and affecting the performance of downstream oil firms which face a high cost from other aspects of their business. Nigeria, unable to refine its crude oil, relies on foreign refineries from which products such as petroleum naphtha, gasoline, diesel fuel, asphalt base, heating oil, kerosene, liquefied petroleum gas, jet fuel and fuel oil are imported into the country, albeit at significant cost. The government has argued that such a cost would be a burden on Nigerians, hence pegged the price of fuel at N145 per litre. The arrangement was not commercially viable

for downstream firms hence they left importation solely to the NNPC. NNPC, therefore, bears the cost of importing fuel (more than N200 per litre at market price) and sells at a lower cost to players in the downstream (called under-recovery) but insists the oil marketers and distributors maintain the N145 per litre maximum selling price. The arrangement analysts say leaves little room for the players who face different kinds of cost (seen in high cost margins) in a business where revenue can only be driven by volumes since the price of their main product has been capped. Economists have said such consumption subsidy is an inefficient use of public resources although the government says it

is concerned about the impact subsidy removal would have on already improvised Nigerians. Meanwhile, changes to fiscal regimes in Nigeria’s upstream driven by government’s quest to boost its revenue is having the unintended consequences of discouraging investment in the oil and gas sector, with IOCs said to be exiting the country. “Nigeria has to be aware that we are competing with other countries for investment,” an economist told BusinessDay. “The government must make hard decisions to make this country attractive to investment and support businesses.” The market declined 1.17 percent in the day’s trading after investors took profit on Tuesday.


After Interswitch deal, Visa to pay $5.3billion for fintech startup OLUFIKAYO OWOEYE


lobal payments tech company, Visa has agreed to acquire Paid, a fintech company, for $5.3billion a deal that will boost the payment giant’s access to the booming fintech space. This new deal is coming months after Visa paid $200 million for 20percent stake in Interswitch,  Nigeria’s largest electronic payments company. Plaid, founded in 2013 and currently connects with over 11,000 financial institutions across the United States, Canada and Europe, With this acquisition, Plaid will be able to use the acquisition to leverage Visa’s global brand in expanding its own business. It provides “aggregator” software that allows fintechs and other financial services companies to access clients’ bank account information. Its

clients include the financial planning apps Mint and Acorns and the money transfer app Venm. The aggregators have long had frosty relationships with banks, which have expressed reservations about the aggregators’ ability to protect customers’ personal information. Of particular concern is “screen scraping,” where consumers provide their bank login details to thirdparty fintechs, rather than using secure APIs (application programming interfaces) that can transmit data from the bank without the release of passwords. JPMorgan Chase recently said it would ban fintechs from using its customers’ passwords to access their accounts. API connections require banks to come to explicit agreements with aggregators and fintechs, which screen-scraping does not. Visa makes almost entirely all of its money from swipe fees it earns from

merchants whenever its cards are accepted. Visa expects the acquisition, which will close in

three to six months pending regulatory approval, to increase the company’s revenue and profits start-

ing next fiscal year. The San Francisco company was already an investor in Plaid, and so is Visa’s

biggest competitor, Mastercard. Both companies invested in Plaid in 2019.

L-R: Mohammed Abdullahi, minister of state science and technology; Muhammed Mahmood, minister of environment, and Ogbonnaya Onu, minister of science and technology, during the Inter-ministerial Committee Meeting on Implementation of the National Policy on Methanol Fuel Production Technology in Abuja.


Thursday 16 January 2020



Business Event


Delta Airlines records $11.4bn in 2019, up 7% over prior year

…earnings per share up nearly 30% IFEOMA OKEKE


elta Air Lines has reported financial results for the December quarter and full year 2019 and provided its outlook for the next quarter.   Total revenue grew to $11.4 billion, up seven percent over prior year when prior year period is adjusted for sale of DAL Global Services (DGS). Adjusted earnings per share of $1.70, a 31 percent increase year over year; above guidance of $1.20 to $1.50 on stronger revenue, lower fuel and a nine-cent net gain related to the unwinding of the GOL relationship To t a l u n i t r e v e n u e (TRASM), adjusted, increased 2.4  percent, exceeding expectations on strong holiday travel demand Non-fuel operating expense on a unit basis (CASMEx) up 4.4 percent compared to the prior year period, in line with the company’s expectations of four  percent to five percent. Full year financial highlights Adjusted earnings per share of $7.31, a 30  percent increase year over year Total revenue increased to a record $47 billion, up 7.5  percent when prior year period is adjusted for thirdparty refinery sales and the sale of DGS. Total expense increased 3.9  percent with CASM-Ex up two percent, in line with the company’s guidance and long-term cost targets. Delta’s

90,000 employees will share a record $1.6 billion profit sharing payout on Feb. 14 The airline generated $8.4 billion of operating cash flow and $4.2 billion of free cash flow and returned $3 billion to shareholders through dividends and share repurchases. “2019 was a truly outstanding year on all fronts – the best in Delta’s history operationally, financially and for our customers.  Our people, and their commitment to bringing best-in-class travel experiences to our 200 million customers, are the foundation for our success.  I’m pleased to recognize their outstanding performance with a record $1.6 billion in profit sharing for 2019,” Ed Bastian, Delta’s chief executive officer, said.  “As we enter 2020, demand for travel is healthy and our brand preference is growing, positioning Delta to deliver another year of strong results, including earnings per share of $6.75 to $7.75.” Revenue environment For the full year, operating revenue grew to nearly $47 billion, up 7.5  percent when prior year period is adjusted for third-party refinery sales and the sale of DGS. Premium product ticket revenue increased nine percent along with strong double-digit percentage increases from loyalty and third-party maintenance revenue. Delta’s operating revenue of $11.4 billion for the December quarter improved 7.2  percent or $768 million over the prior year (adjusted for the sale of DGS). This was driven by a nine percent

increase in premium product ticket revenue, an 18 percent increase in loyalty revenue and a 31  percent increase in third-party maintenance revenue, which was partially offset by 13  percent lower cargo revenue. D ec ember q ua rt er passenger revenue by geographic region: Domestic revenue grew 7.7 percent in the quarter on 1.6 percent higher passenger unit revenue (PRASM) and six  percent higher capacity.  Domestic premium product revenue grew 11  percent and corporate revenue grew six percent, driven by strength in business and leisure demand through the holiday period. Revenue and margin improved in all domestic hubs with revenue up 10 percent in coastal hubs and six  percent in core hubs. Atlantic revenue grew 0.8 percent in the quarter on 2.4  percent higher capacity and a 1.6  percent decline in PRASM, driven almost entirely by foreign exchange rates. Latin revenue grew 6.7 percent on a 6.3 percent increase in unit revenue and 0.4  percent higher capacity.  This revenue improvement was driven by continued doubledigit unit revenue growth in Brazil and Mexico. Pacific revenue was down 0.5  percent versus prior year on a 4.4 percent decline in unit revenue primarily due to continued softness in China.  This was a 3.2 point improvement versus the September quarter on improved trends in Japan and strong Delta Premium Select performance.   

L-R: Olusegun Ogboye, permanent secretary, Lagos State ministry of health; Akin Abayomi, commissioner for health; Obafemi Hamzat, deputy governor of Lagos, and Tayo Lawal, permanent secretary, Primary Health Care Board, during a Health Conference in Lagos.

L-R: Abdulrahman Abdulrazak, governor, Kwara State; Ibrahim Oloriegbe, Senator representing Ilorin West; Mike Omotosho, founder of Mike Omotosho Foundation, and his wife Misi, during the 5th Edition of the Foundation’s  Annual Lecture in Abuja.


Zenith Exhibitions to hold mega expo, targets industrial sector DESMOND OKON


s technological inventions continue to disrupt industries globally, leading to revenue generation for businesses, Zenith Exhibitions is poised to hold the Equipment and Manufacturing West Africa (EMWA) Exhibition and Conference from the 28th of April to the 30th of April, 2020. Slated to hold at the Landmark Centre, Lagos, Nigeria, the 3-day event seeks to unite the markets across West Africa and connect them through face-to-face meetings designed to accommodate their ever-changing market challenges and needs.  Latest technology, equipment and materials in the manufacturing and industrial sectors will be showcased, amid discussions on best practices and global standards in the sector corridors.   The event  will welcome over 2,500 visiting professionals and feature over 85 companies and brands and 4 Country Pavilions across 3,500m2.  BusinessDay further learnt that besides product exhibitions, there will also be lec-

tures to discuss significant trends and issues in the industry. Topics like the impact of financial investment on manufacturing; the future of trade – a perspective on the new decade and the growing marketplace; industrialization: an urgent necessity will be addressed under the  theme:  Industrialization and Innovation: Growth and Development of the Industrial Sector to Unlock Nigeria’s Potential “To prepare for the future of our industrial sector, companies need to focus on building operational excellence by investing in technology and innovation, and taking on new practices,” said Joseph Oru, project director.  He explained that the event will showcase the industry’s best ideas, innovations, technologies and cost-effective solutions to raise productivity within the manufacturing and industrial machinery environment.   Therefore, the event is positioned as a significant platform for the exchange of ideas and innovative thinking, joint development of concrete

solutions, valuable partnerships and new business deals, Oru adds. According to the organisers, EMWA is exclusively dedicated to the entire manufacturing equipment sector, offering specialists, traders and buyers with an all-inclusive category of products and services, but Nigeria will play host to the conference.   “With Nigeria’s demographic advantages and expanding market opportunities, the event is an attractive business hub for industrialists and investors to capitalize on its growth,” the project director said.  The Equipment and Manufacturing West Africa was saWid to be born from the audacious idea that something phenomenal can come out of West Africa with Nigeria as the trigger, the organisers said.  “This is coupled the overwhelming need for a meeting point for captains of industries, professionals and enthusiasts to converge and touch on industry trends, share knowledge, experience, and discuss happenings within their different spheres of operation.

Shuaibu Ibrahim (l), director-general, National Youth Service Corps (NYSC), presenting a souvenir to Chidi Ibe, guest lecturer, during an opening of the NYSC Skill Acquisition and Entrepreneurship Development (SAED) stakeholder’s meeting/Desk officers training in Abuja.

Aliyu Magaji, chairman, house committee on power, (m) and other members of the Committee, during the investigative hearing on the proposed upward review of electricity tariff by DisCos at the National  Assembly on 14th Jan. 2020.

Thursday 16 January 2020



LegalBusiness BD Business Law Industry Report Practice Intelligence Partnerships

Why we cannot ignore the persistent disregard for the rule of law by current administration – JRP


he Nigerian Constitution is said to be the supreme law  of the  Federal Republic of Nigeria and the foundation of its government. To this end, its provisions are believed to be sacred and binding on all authorities and persons throughout the Federal Republic of Nigeria. Further more, one of the cardinal tenets enshrined by the constitution is the principle of separation of powers where each arm of government; Legislative, Judiciary and Executive, is an equal partner in the running of a successful government. It is for this reason that the recent executive subversion of the principle of separation of powers, as in the case of Omoyele Sowore, has attracted the fury of eminent senior lawyers, who consider the act a betrayal of the same constitution that the President of Nigeria has sworn to uphold and defend. Amongst those who have spoken vehemently against the continuous disregard of the rule of law, are members of the Justice Reform Project (JRP) who believe that the persistent abuse of power by public officials in Nigeria is an aberration which has attained notoriety as part of the fabric of our society. They maintain that equality before the law is the only true protection against the spectre of oppression and undue influence that those in positions of authority would otherwise dangle over the heads of ordinary Nigerians. In a recent statement titled ‘Assault on the Rule of Law in Nigeria by Its Own Government, the group condemned amongst other things, the abominable invasion of a Nigerian courtroom by the Department of State Services (DSS), describing the action as a crude, vicious and unlawful bid to effect the unconstitutional re-arrest of human rights activist and journalist, Omoyele Sowore. The statement read in part, “It is now impossible to ignore the persistent disregard by the current administration for the rule of law. This is particularly exemplified by

Funke Adekoya SAN, Chairperson, Justice Reform Project

its frequent disobedience of Court orders relating to bail of Nigerians in criminal proceedings initiated by the Federal Government. A government outside the law, is no government at all.” It continued, “Both at home and abroad, this badge of shame stains our collective national consciousness and makes a daily mockery of our selective adherence to the rule of law. Nevertheless, the recent egregious display of executive lawlessness by the DSS in a Nigerian courtroom must give us all pause as we contemplate both how we have come to this and what steps next to take both as individuals and as those who sit in positions of moral and legal authority in this country.” Providing a a global perspective,

JRP stated that the magnitude of this betrayal, as it plays out before an international audience is not to be trivialized and will have dire consequences on the legitimacy of the Buhari-led administration moving forward. It would be recalled that on December 6, 2019 during a court session presided over by Hon. Justice Ijeoma Ojukwu of the Federal High Court Abuja, officers of the DSS mounted a gestapo style raid on the Nigerian judiciary, causing members of the public, lawyers and a sitting judge to flee for safety. In the ensuing mayhem, Omoyele Sowore was physically dragged out of court by officers of the DSS and rearrested under the guise of a failure to meet bail conditions. Thus, began

a new dark and dangerous chapter in the decline of our nation-state and the recent series of affronts against the rule of law by the current administration. At the time of his purported rearrest, Sowore was said to have satisfied the stringent bail conditions imposed by the Abuja Division of Federal High Court where he is standing trial. In the days that followed the grant of his bail a succession of contrived rationalizations were supplied by the DSS for its failure to release him. Only when the Court affirmed its order with a 24-hour ultimatum did the DSS simulate compliance with the lawful order of bail. This was shortly followed by the now infamous events of December 6. Members of the JRP believe that apar t from the President who seems to have abdicated his responsibility to ensure good governance in accordance with the law, it is a matter for regret that the Attorney General of the Federation, Abubakar Malami, SAN has also continued to turn a blind eye to the persistent disobedience of Court orders by this President and his DSS. “As the chief law officer of our country, it is the AG’s sworn duty to ensure the maintenance of law and constitutional order. Although the AG’s recent gesture in taking over from the DSS the prosecution of all charges against Mr. Sowore is a positive step, it comes as only very little very late,” they said. In closing, the group urged the AGF to pay more than eye service attention to Nigerians and the growing global audience to prove that the rule of law is alive and well in Nigeria, He also urged citizens and lawmakers who represent them to begin to consider whether the actions of this President will continue unsanctioned, or whether these seeming acts of gross misconduct constitute sufficient grounds for the institution of formal proceedings to sanction the President’s actions.


Thursday 16 January 2020





Whither is the Electric Power Sector in Nigeria Bound?

O Proem

ne often hears the phrase, “motion without movement”. The term is typically used to depict a lot of activity without any real effect. As far as the electric power sector in Nigeria is concerned, there have been several stakeholder events, conferences and talk shows/ talk shops on moving the power sector forward. However, it appears that, apart from substantially privatizing the sector, not much progress has been made. There have been emotions and energies, at times, dissipated on several programs which are either not well implemented or suspended mid-way into being implemented. At some point, there was a lot of talk and motion around the grid, but recently it has been mostly off-grid, solar and mini-grids. The writer believes that (and research has confirmed this) no country can truly industrialize without sufficient, stable, efficient and high quality grid electric power supply and since energy insufficiency has been linked with poverty, we may be in for a long lasting battle with poverty in the country. Herein, lies the tragedy! Even if most people try to emigrate, only a handful compared to the total population of poor people, can actually achieve this and where people do, they would still have relations who just can’t afford the cost of emigrating or do not have the wherewithal, to do so. Also, considering that the rule of thumb is that, on the average 1mw of power should serve a thousand people, we may be quite far from economic prosperity and the toga of having the World’s highest number of extremely poor people. Mind the words, not highest number of poor people, but highest number of ‘extremely’ poor people! The Blame Game and Plausible Considerations So far, almost every stakeholder or participant in the sector, is or has in the past blamed the other for the lack of sufficient progress made in the electric power sector. The Transmission Company of Nigeria (the “TCN”) is being blamed by the electricity distribution companies (the “Discos”) for not being able to deliver the volume of power demanded daily by each Disco at the periods same is required. The Discos contend that the System Operator (a part of the TCN) misconstrues energy readings by miscalculating drops in electricity demand (load) from customers at night as load rejection. The Discos also contend that the TCN seeks to ‘dump’ load by delivering electricity to substations in network areas that Discos know are not commercially attractive, with the customers in such areas not willing to pay their

electricity bills or indeed, for the electricity they consume. On the flip side and not totally inaccurately, the TCN accuses many Discos of rejecting power load. Specifically, customers/ consumers, who severally complain about the lack of efficient power supply are a part of the problem as electricity theft is more prevalent than thought. From the writer’s experience, a lot of people steal electricity via various means. Another part of the problem is that there is no synchronized power system planning between the Discos, (the Bulk Trader) and TCN such that there is a coordination in expenditure, load delivery and general power supply. Simply put, power system planning is the establishment of goals and objectives, by seeking to predict environmental and other factors within the electricity supply market, and then selecting actions that result in the accomplishment of these goals and objectives. Good and coordinated power system planning makes it possible to supply electric power from the most economical sources and to operate generating stations elastically, allowing for optimization of the overall reliability of the electricity supply industry in Nigeria. System planning will allow for more load during the day in different areas, divided along the lines of commercial, residential and co-residential and commercial. It will help understand what optimal and cost-efficient investments can be made, despite the insufficiency of funds. Funds that will then be spent will be efficiently expended. With good power system

ning, the very minimal investments that can be done will then be given priority and same aligned to allow consumers feel the impact of the reforms undertaken in the electric power supply industry. Interestingly, very recently, the Nigerian Electricity Regulatory Commission (“NERC”) issued a set of guidelines around Integrated Power System Plans and we hope that same will be well utilized to generally improve the availability of electric power where and when same is needed. The Nigerian Electricity Regulatory Commission and Disco Conundrum NERC, exercising its power pursuant to Section 74 of the Electric Power Sector Reform Act (“EPSRA”) and the terms and conditions of electricity distribution licenses issued by it to the DisCos, issued a Notice of Intention to Cancel Electricity Distribution Licences, dated 8th of October 2019 to eight (8) Discos, for the breach of their respective distribution licenses and the 2016 – 2018 Minor Review of the Multi Year Tariff Order (“MYTO”) and Minimum Remittance Order for the Year 2019 (hereinafter called the “Order”). It is pertinent to note that, before exercising its powers under the EPSRA, NERC is obliged to allow the licensee an opportunity to demonstrate, within sixty (60) days of said notice, that conditions have changed such that the proposed cancellation of license is no longer requisite. The EPSRA also empowers NERC to allow the

license remain in force, instead of revoking it, subject to imposing further terms and conditions which shall form part of the license. The Discos acknowledge (albeit do not admit complicity) that they are actually in breach of the MYTO and Order mentioned above but claim that this has been as a result of several reasons outside their control, including the failure of ministries, departments and agencies of the federal government of Nigeria. An easy way to have this reasonably resolved is to have the federal government of Nigeria make deductions from source (to the extent feasible under the Treasury Single Account Policy). Furthermore, the lack of cost reflective tariffs has also been a good explanation by the Discos. The cost of distributing each unit of electricity, in the perspective of the Discos, is higher than the tariffs they have been forced to receive. Although, tariffs have been adjusted upwards recently, the argument of the Discos is that this should have been done a few years back and the current tariff is outdated and would have only worked if same had been the case much earlier. In addition to this argument is the fact that the Discos believe that the remittance level set by NERC is unrealistic and cannot be sustained. They further claim that same is to ensure only the benefits of NERC without really taking into consideration NBET’s costs, those of fuel suppliers and the TCN. Some progress is now being made as regards the ongoing conversations. The Bright Spot of Off-Grid Currently, a lot is being done regarding the provision of support to off-grid and mini-grid electric power solutions with policies geared towards encouraging renewables. The challenges with grid extension alongside current government policy which encourages off-grid power supply make off-grid alternatives such as mini-grids homes systems which are yet to fully penetrate the rural market attractive. It is also the case that as a result of poor grid power supply, domestic and commercial consumers spend an estimated 40% of running costs on power supply. Research has shown that up to 64% of people living in rural areas, who spend 70 cents to 1 dollar per kWh on small generating sets for their electricity needs, are better served via off-grid means such as micro-grids and solar homes systems at rates up to 60% of the cost of using small generating sets run on fossil fuels. Many business owners list electricity supply challenges as their most significant impediment to doing business in Nigeria and research has further shown that nearly US$30 billion @Businessdayng

economic loss is suffered annually from poor power supply in Nigeria. Considering the reduced costs, interest of development finance institutions and several donor agencies, mini-grids appear to provide an alternative to the costly grid expansion projects and a relatively quick fix to the rural electrification challenge. It must be said that the Rural Electrification Agency (“REA”) is not doing badly in this respect. Such projects can provide more cost-effective options to the grid and small generating sets and provide viable opportunities for investment and the development of the economy. In addition to the case made above, rural consumers already spend so much on self-generation of electricity and can therefore pay for mini-grid and other cheaper off-grid options, provided that they can be shown that those are cheaper options for them. Based on research by GIZ of Germany, there are already 30 solar minigrids with a total installed capacity of 1mw serving 6,000 customers. The Nigerian mini-grid market is estimated to have the potential of N2.8trillion (approx. $8 billion) in annual revenues. This is, indeed, a bright spot in the Nigerian Electricity Supply Industry. However, the writer is of the belief that off-grid power cannot replace substantial power supply from the grid, especially where industrialization is being considered. The Conclusion- Where headed and Way Forward Despite the challenges in the power sector in Nigeria, the minigrid space is not doing badly. However, there have been accusations and counteraccusations which have been the lot of the Nigerian Electricity Supply Industry post-privatization. Nonetheless, it is germane to note that every participant in the sector, including consumers, are at fault in having the power sector remain in this state. From consumers who steal electricity, to the regulator not doing enough in ensuring substantial attractiveness of the sector, to the government not keeping some of its promises and the Discos, not showing enough discipline in the use of limited resources, we are all to blame. To make progress and take us out of the doldrums, there is an urgent need for serious alignment, alliance and co-operation throughout the value chain with a view to ensuring that every constraint adversely affecting the adequate and efficient demand and supply of electricity becomes a thing of the past.

Dr. Ayodele Oni (ayodele.oni@, a commercial lawyer, specializes in international energy investment law.

Thursday 16 January 2020






Grow or Die!


or many in business and the services sector, it is not really a start but a continuation, as they have had to continue to dole out value, albeit, at a slower tempo. The noise of the newness of a thing may distract one from the fact that a baton of responsibility always accompanies every change, turn, process and in this case, a year. As the new year begins and young lawyers, dust off wigs and gowns, launder white shirts and polish their brief cases and bags, it is important that they note that the same process of preparation is required for their minds which is their most vital tool in the business that they do. There is indeed the need to dust-off irrelevant information, undertake a laundry process of reviewing mistakes and ensuring that lessons are learnt are digested for application and polishing minds by scouting for “mind shines” which would include new information, courses, training and any opportunity for growth. In a world where the pace of growth ranges between 2 months – 2 years, one can get dizzy from knowledge or stuck in the past. I have learnt that ignorance is no longer an excuse, it is at the very least, a crime! The demands of work are no longer as we know it and many of us will be shut out or struggle for positioning if we do not get in line. Getting in line is honestly not as difficult as it seems; this, I have learnt from trying many times and FAILING. You see, the aim is not to spurt but to blossom. The process of blossoming involves progression. I must say that if you do have the capacity to spurt, please do so, but please do not stay static because you are trying to achieve BIG, LOUD and suddenly. Your life is a journey and so is your career. You start at some point and then you move. The strategy for growth is peculiar to individuals and

have to rise up to the higher calling of processing and converting our experiences to fertilisers. Work: Work is a very hard negotiator, we assume it gets easier as we grow; lie! Have you noticed that older lawyers do not really get less busy? They just adopt new functions and roles! Let us bring it home, even you! You are busier now than you have ever been, and it will progress. That is why retirement is still an event worth celebrating. Provided that you remain in the game, demands will be made and the more often you show up and show up correct, the better your reward, the better your chances. Now, work must be smart not just hard! There are principles of smart work and those, you learn from experience. Young lawyers sometimes idealise things and want to “go-inhouse”, “become an entrepreneur”, “start my own law firm”. These are just as challenging and demanding. Work is the currency of the day and we must pay if we want to remain relevant. I hope these tips help you reset, adjust and pump in some energy into the version of 2020 that you are writing. I wish you all the best. Happy New Year! I do hope that you have had a great start. must be customised for optimal effect. There are however common indices that a lawyer who wants to feel the heartbeat of the law today must include in their strategy. Just in case you do not have one, it is now time to catch one. Akin to the system used for early education, I will coin an acronym for my suggested strategy for growth in 2020 and it is, R.A2.W. representing the words, Retrain, Assess and Apply, Work. Retrain: I bet you know that with the advent of technology, we are almost illiterates versus the machines and their creators. For instance, for many of us, the tech. buzzwords, AI, machine learning, analytics, integration, virtual reality,

etc. mean nothing or at the best, they are series of alliterations. In a world that is pivoting on technology, there is no smarter move than learning the language of the age, growing capacity for relevance and undertaking the skill of futurism so that you can anticipate and adapt. With the speed of innovation, we can no longer play catch up. It is almost spooky! You barely master one and another one is out; the game is changing quickly. You only stand a chance of you train and retrain. Master what you know, learn what you do not know and make the connections. It is critical. If you do not grow, you die. Assess and Apply: Without assessment, data is in-

formation, almost useless. There is need to back up what you learn with application and then review, for impact. I have since found out that the progressive thinkers, managers and successful people are people who ask why, learn why and apply lessons they learn. Harness opportunities (or better still, create them) to review your experiences and of course, errors and convert the errors to lessons. Then apply these lessons! You need to stop and think and then act and repeat this process eternally. The speed and demands of work make these almost impossible but that is why we repeat our errors and find ourselves in the very same spot we swore to banish to the past. We just

OYEYEMI ADERIBIGBE is a Senior Associate at Templars. She is also the current Vice-Chairman of the Young Lawyers’ Forum of the Nigerian Bar Association -Section on Business Law and the Young Lawyers’ Committee Liaison Officer of the African Regional Forum of the International Bar Association. Feedback –; yemiimmanuel@yahoo. com.


Thursday 16 January 2020





Federal Government of Nigeria Appropriation Act 2020 – Implication for Investors and Nigerian Businesses


he 2020 Appropriation Bill, “budget of sustainable growth and job creation”, was presented by the President to the National Assembly on the 9th of October 2019 along with the draft Finance Bill (which has now been passed into law as Finance Act,2019) which is intended to effect crucial changes to the existing fiscal laws that will enable the Federal Government increase its revenue generation capacity . The Appropriation Bill was signed into law by the National Assembly on the 5th December, 2019 and assented by the President on the 17th December 2019. The Appropriation Act, which authorizes government expenditure for each financial year, took effect from the 1st January 2020 breaking a historical pattern of approval delays that had lasted about 2 decades (including the last 5 consecutive years) contrary to statutory budgetary calendar cycle provided in the constitution (Section 82.1). BUDGET APPROVAL PROCESS

Historically, some of the fiscal assumptions underpinning the budget proposal fall short relative to actual performance. In 2018 for instance; the projected GDP growth rate was 3.5% whilst the actual rate achieved was 1.93%; oil production was 2.3MBPS whilst actual was 1.83MBPS. Inflation rate, exchange rate and oil benchmark rate however performed above expectation. Many economic analysts have queried the projected GDP growth and oil production rates. We note that production reached its peak in June of 2019 with a record 2.3MBPD was at 2.3MBPD recorded in June, thereafter production declined and maintained a stable range of about 2.1MBPD for the rest of the year with relative calm in the Niger Delta region production. It is our opinion that the oil production assumptions are not overly optimistic, we also note, given the brewing crisis between Iran that the US price of brent crude may actually outperform the benchmark price. Where this is

• MDA- Ministries, Departments and agencies • FEC- Federal Executive Council • GOE- Government Owned Enterprises • NASS - National Assembly

the case, many eyes will be on the Federal Government to see how it would manage/ utilize the excess crude revenue.

CORE OBJECTIVES OF THE BUDGET The President in his budget presentation speech noted the underlisted as the key priorities for the Federal Government: Fiscal Consolidation and strengthening of the macro-economic environment; Invest in critical infrastructure and human capital development (especially job creation) Incentivize private sector investment; Enhance social investment programmes to deepen their impact on the poor and vulnerable. These objectives are fairly demonstrable from the allocation of resources in the budget and the bounty of tax and other incentives in the accompanying Finance Act

The Finance Act Though passed by the National Assembly in November, 2019; it was only assented by the president on the 13th January 2020. Inspite of the bouquet of tax and other incentives in the Act, the increase in the VAT rate from 5% to 7.5% which seems to have received significant backlash from the citizenry given the untold hardship it will cause in an already depressed economy. Below is a summary of the fiscal changes proposed in the Finance Act that are expected to enhance revenue collections



The National Assembly, in the exercise of its oversight powers (under the constitution Section 81 and Section 18 (1)the Fiscal Responsibility Act effected a few statutory amendments to the budget (including a NGN3Billion increase to its own expenditure allocation) to cater for additional interventions in national security, road infrastructure, health and social welfare. Key Elements of the Budget The budget has an aggregate expenditure of N10.59 trillion shared primarily into debt servicing, recurrent expenditure, capital expenditure and statutory transfers. The budget (revenue and expenditure) framework is as follows:

FUNDING OF DEFICIT Based on the projected revenue framework the budget has a deficit of N2.28Trillion. This projection is based on a best case scenario assuming that revenue assumption parameters are accurate. Historically we have always recorded shortfalls in projected revenue which will materially balloon the deficit. The main revenue streams elucidated in the budget include; Oil revenue which is to generate N2.64 trillion, Non-Oil tax revenue which is estimated at N1.8 trillion and other revenue estimated at N3.6 trillion. The Minister of Finance, Budget and National Development, Zainab Ahmed, has noted the deficit would be funded with domestic and foreign debt. Whilst a detailed borrowing plan is yet to be submitted to the National Assembly for consideration and approval; the Minister has hinted the intention to seek only concessionary foreign debt at not commercial lending rate. Budget Performance: Critical Success factors The early passage of the 2020 Appropriation Act is very impressive and has set the Government on a path to efficiency in fiscal management. Nonetheless, the early passage alone will not guarantee the successful implementation of the Budget. The Federal Government needs to: a. take immediate plans to finalize its Borrowing Plans and present same for legislative approval (it is

worth mentioning that the 2016 – 2018 medium term external borrowing plan resubmitted to the National Assembly by the President in November 2019 was not approved). b. facilitate the implementation of the Finance Act; as it remains core to the Government’s policy drive entrench transparency and accountability within the MDAs and the GOEs to ensure fiscal discipline. c. ensure prioritization and timely commencement of the capital projects which have been appropriated. d. demonstrate capacity to realize its projected revenue. Toward the end of 2019, Moody (a global credit rating agency) downgraded its outlook on Nigeria from stable to negative on grounds of the perceived risk to the Government’s fiscal strength and external position. e. ensure that its social intervention schemes have a broad and far reaching impact on the citizens given the growing unemployment rate and poverty index; priority must be given to alleviating the suffering of the poor and vulnerable and improving the living standards of the citizenry generally Efforts should also be made to reduce the cost of governance The Recurrent (Non-Debt) Expenditure is almost twice the size of its projected capital Expenditure for the year (N2.465 trillion). The implication of this is that even the rise in VAT rate to 7.5% may still not be sufficient to raise non-oil revenue which has been underperforming for the past five years. WHAT INVESTORS AND BUSINESSES SHOULD EXPECT 1. Positive Impact of the Early Passage of the Budget: It is proven that budget delays come at the cost of loss of Foreign Direct Investment and domestic investment lethargy. Record of slow economic and investment activities prior to passage of the budget underpin the importance of timely budget passage to economic activities. It is therefore visibly noticeable that unlike previous years many enterprises hit the road running in 2020 having sufficient information to chart the course of Government’s economic plan, fiscal and monetary policy drive, from the budget. In comparable terms we expect the Gross Domestic Product growth rate in Q1 to outperform preceding years. 2. Aggressive Revenue Drive: Given the Non-Oil Tax revenue assumptions of N1.8 trillion in the budget, it is expected that the Federal Government will pursue aggressively collection of tax income Principally VAT, Stamp duties and Company Income Tax by putting in place appropriate framework to harness the anticipated benContinues on page 24

BusinessDay LEGAL INTEL is supported by the Research/Market Intelligence team at DealHQ – a boutique transaction advisory/ commercial law firm in Lagos, Nigeria. Contact:


Thursday 16 January 2020




Tech law firm gets new managing partner


he law firm of Duale, O via & AlexAdedipe (DOA) has announced the appointment of Adeleke Alex-Adedipe as its new Managing Partner, effective Monday January 6th 2020. Speaking about the appointment, immediate past managing partner, Adeniyi Duale said, “After four years as managing partner, I will be handing over the leadership of the firm to Adeleke. He is highly regarded by our clients and the legal industry at large. The Partners of the firm have no doubt that his leadership will extend the frontiers of the progress we have made from inception.” He also restated the firm’s commitment to continue to provide its highly diversified clients with the quality of legal services they are accustomed to not just locally, but globally too. Newly appointed managing partner, Adeleke Alex-Adedipe said, “I am delighted and humbled by this leadership responsibility. I look forward to a more promising, interesting and prosperous era for the Firm. The trio of Duale, Ovia, AlexAdedipe and their team have become notable in the TMT industries, as they continue to display extensive understanding of the market, ranging from electronic commerce, online gaming, online trading, online payment systems, electronic banking systems, social media

platforms, mobile communication system, internet platforms and other information technology opportunities and platforms. With the right mix of indus-

Top UK law firms fall out of M&A top 10 rankings


or the first time in at least seven years, none of the magic circle firms have appeared in a list of the top 10 practices to advise on mergers and acquisitions, with Freshfields Bruckhaus Deringer and Allen & Overy slipping down the league table. Freshfields fell from sixth to 12th place on Mergermarket’s 2019 global league table of legal advisers, with the total value of its deals falling by 27% to $307m. Meanwhile, Allen & Overy slipped from 10th to 16th place, with its deal value falling by almost 30% to $234m. Slaughter and May and Clifford Chance crept up the list – to 14thand 17th place respectively – while Linklaters did not appear anywhere in the top 20. US firms have dominated the M&A league table for several years, but this is the first


Sanwo-Olu appoints Pinheiro Chairman, Lagos State Law Reform Commission


agos State governor, Babajide Sanw o-O lu on Tuesday appointed Lagos lawyer, Kemi Pinheiro, SAN as chairman, Lagos State Law Reform Commission. This appointment takes immediate effect. In the letter of appointment, Governor Sanwo-Olu conveyed his approval of Pinheiro’s appointment as chairman of the Lagos State Law Reform Commission on Part-time basis for a three-year term with effect from 12th December, 2019”. The letter further stated, “In approving your appointment, due cognizance has been taken

of your integrity, selfless service, and record of impressive performance. I, therefore, have no doubt that you will bring your wealth of experience to bear on the work of the commission and continue to justify the confidence reposed in you by Mr governor”. Pinheiro has contributed immensely to the development of law and society in the state. On September 24, 2019, he delivered a 40-page paper at the Lagos State Judiciary 2019/2020 Legal Year Stakeholder’s Summit, titled “The admissibility of confessional Statements: Imperatives of trial within a trial”.

try knowledge and experience of TMT transactions, the firm has provided proficient advice to both local and international companies and multinationals.

Allen & Overy joins forces with Shanghai law firm


time since 2013 – when figures became available – that a magic circle firm has not been ranked among the top 10. Wachtell, Lipton, Rosen & Katz, which operates from a single office in New York, topped the rankings, followed by Sullivan & Cromwell, which is also headquartered in New York. According to the Mergermarket report, the US accounted for 47% of global M&A activity in 2019, the highest share since 2001. Meanwhile, Europe was ‘hampered by sluggish Eurozone growth’ and ‘suffered from a lack of big ticket deals’, reporting a 22% decrease in deal value to $750.5bn. The report also says that China and Hong Kong’s market share shrunk to 8.8% in 2019 (down from 11.4%), blaming geopolitical tension between the US and China and six months of anti-Beijing protests.


agic circle firm Allen & Overy has partnered with a practice based in Shanghai, saying the Chinese market is a ‘global strategic priority’. The Shanghai Bureau of Justice has approved joint operations between Allen & Overy and Shanghai Lang Yue Law Firm. The practice will be known as Allen & Overy Lang Yue (FTZ) Joint Operation Office and will operate in Shanghai’s free trade zone. The joint enterprise will provide clients with domestic and international legal services covering M&A, private equity, venture capital investments, capital markets, regulatory advisory and compliance. Under current Chinese rules, only lawyers who qualify in China are entitled to give formal legal opinion in the country, which inhibits the presence of foreign practitioners. However, a growing number of international firms are partnering with do-

mestic practices. Herbert Smith Freehills, KPMG Law, Ashurst, Bird & Bird and Linklaters have all struck deals with Chinese businesses. Victor Ho, Allen & Overy’s Beijing & Shanghai managing partner, said: ‘Allen & Overy has been on the ground in China for over 30 years and growing our China practice remains one of our global strategic priorities. Our joint operation with Lang Yue, a firm we have success@Businessdayng

fully worked with on a significant number of client matters, will take our China offering to the next level. ‘The joint operation will give our considerable roster of international and the People’s Republic of China clients an even deeper and broader set of capabilities to support their activities in China and globally.’ LAW SOCIETY GAZETTE


Thursday 16 January 2020





‘Publish your assets within 7 days’, SERAP tells Buhari, Osinbajo, others


ocio-Economic Rights and Accountability Project (SERAP) has sent Freedom of Information requests to President Muhammadu Buhari, Vice-President Professor Yemi Osinbajo, 36 state governors and their deputies, urging them to use their good offices to: “provide information on summary of the assets, specifically property and income, contained in your asset declaration forms submitted to the Code of Conduct Bureau (CCB) since your assumption of office.” SERAP is also asking them to: “clarify within 7 days of the receipt and/or publication of this letter, if you have had any reason to review and update the asset declarations submitted to the CCB, and to provide the summary of any such review; failing which we will take all appropriate legal action to compel you to comply with our request.” SERAP said: “The summary of assets to be disclosed include, where applicable, the following: savings and other liquid assets, all immovable property and shares and actions in any private and public companies; property purchased by way of tender from any publiclaw entities and information about businesses owned.” In the FoI requests dated 3 January 2020 and signed by SERAP deputy director Kolawole Oluwadare, the organization said: “The Constitution of Nigeria 1999 (as amended), the FoI Act, and the African Charter on Human and Peoples’ Rights, which is part of our laws, read together, impose transparency obligations on all public officials to publicly disclose information concerning their asset declarations submitted to the CCB, and to clarify any updated review of such assets.” SERAP also said: “The nonpublic disclosure by public officials of their summary of assets seriously undermines the effectiveness and integrity of the constitutional and statutory obligations to submit asset declarations, especially given

that declarations are designed to curb grand corruption. The non-disclosure of assets also undermines the authority of the CCB and weakens the public trust in the asset declaration regimes.” In the specific FoI request to President Buhari, SERAP noted his “public promise to make specific details of your assets public, and urge you to consider this FoI request as a unique opportunity to fulfil the promise made to the Nigerian people.” The various FoI requests read in part: “Our FoI request does not clash with the rights to privacy and data protection. Both rights are not absolute and can be restricted provided there is a basis in law and a legitimate public interest justifies the restriction. Prevention of grand corruption and exposing unexplained wealth of officials are serious and legitimate public interests.”

“We would also like you to clarify if you have encouraged members of your cabinet to also submit their asset declarations to the CCB and to make such declarations public. If so, we would like you to provide information on the details of those that have made submissions.” “We would also like you to clarify whether a declaration has been submitted as constitutionally and statutorily required, the date of any such submission, and if you have received any confirmation of the verification of your asset declaration by the CCB.” “The general public has a legitimate interest in ascertaining and scrutinising the veracity, exactitude and honesty of information contained in asset declarations submitted by public officials to the CCB. Without public disclosure of summary of assets, this would have no practical importance.” “Public disclosure of summary

of assets submitted to the CCB would help uncover any irregularities and trigger formal verification of declarations by the CCB and other anti-corruption agencies.” “The information requested is the summary of assets submitted to the CCB pursuant to constitutional and statutory provisions. Providing the information will meet the constitutional objective of giving the public a reasonable picture of your detailed asset declaration lodged with the CCB as well as serve the purpose of providing a safeguard against abuse of the asset declaration process.” “This would in turn serve as an incentive to public officials to provide exact information when filing and submitting their asset declarations.” “The advantages that the general public would gain from being informed about the summary of assets declaration submitted to the

CCB outweigh any inconvenience that may occur if the information is disclosed, pursuant to our FoI request.” “We believe that the Nigerian Constitution, the FoI Act and the African Charter grant the right to obtain information on the summary of assets of all public officials occupying a position of trust and discharging public functions.” “Any perceived claim of interference with the right to privacy are sufficiently foreseeable for the purposes of the legal requirements for asset declarations by public officials, given that public-disclosure of summary of assets would undoubtedly contribute to the legitimate aim of asset declaration regimes to prevent corruption, as it would ensure transparency regarding the details of those assets.” “SERAP notes that a decision to run for public office is an occasion when people knowingly or intentionally involve themselves in activities which are or may be recorded or reported in a public manner.” “It is in the nature of the democratic political process that Nigerians may legitimately be interested in the conduct of public officials. The issue of the asset declarations of persons holding public offices is one of legitimate public interest and concern, and serves the purpose of ensuring transparency in the exercise of public functions.” “By Section 1 (1) of the FoI Act, SERAP is entitled as of right to request for or gain access to information, including information on the summary of the asset declaration submitted to the CCB.” “By Section 4 (a) of the FoI Act when a person makes a request for information from a public official, institution or agency, the public official, institution or urgency to whom the application is directed is under a binding legal obligation to provide the applicant with the information requested for, except as otherwise provided by the Act, within 7 days after the application is received.”

Federal Government of Nigeria Appropriation Act 2020... Continued from page 22

efits of the Finance Act. 3. Active Monitoring of Revenue Performance Of MDAs And GOEs: The Federal Government has indicated the revenue performance of Government Owned Enterprises and MDAs will come under heavy performance scrutiny as it will form a significant source of revenue generation outside oil In the presentation of the Budget, the President talked tough about the implementation of a new performance management framework that would regulate cost to revenue ratios for GOEs and MDAs noting further that there would be severe consequences for failure to achieve revenue target.

Penalty for Tax Defaulters: It is expected that the Federal Inland Revenue Service (FIRS), in turn with the pressure from the Federal Government to meet up with its revenue target will come heavy on tax offenders whilst incentivizing early tax remittance as provided for in the Finance Act. The new FIRS Boss, Muhamman M Mani, who took over from Mr. Tunde Fowler following the expiration of his tenure, noted in his acceptance speech that his mandate remains to Facilitate economic recovery through increased revenue generation”. Government Borrowing To finance the budget deficit of N2.2trillion, the Federal Government has indicated that it intends to borrow a total of N1.92 trillion from the domestic

and foreign debt market. It is expected that a total of N745Billion will be raised locally. The nations debt profile which stood at N25.7 Trillion as at half year 2019 is expected to grow to about N27.62 Trillion (recording a 128% increase in 5years). Despite concerns about the Nations debt profile, the Debt Management Office as assured that the Nation’s debt to GDP ratio remains within permissible threshold. It is expected that there will be a very conservative approach to the pricing of debt to be sourced by the Federal Government. Having stated clearly that the Federal Government will be seeking concessionary rates for its foreign borrowing it will not also be the usual for investors who may be taking positions

to participate from local borrowings. Given the optics from the monetary policy rate it is expected that the rate of Government Bonds and Treasury bills to hit an all time low. Full Draw on Recurrent Expenditure: It is expected that there will be a full draw on recurrent expenditure whether or not government revenue projections are realized. This reflects adversely on the performance of capital expenditure which represents just 13% of the expenditure. As at December 2019, the capital expenditure spent was N1.2 trillion out of the budgeted N2.1 trillion which shows a performance of circa 55%. With the deficit and a history of not meeting revenue targets, the government may

be faced yet again with having to fully draw on recurrent expenditure and leave the capital expenditure under-performed. Oil benchmark price: The projected oil production rate of 2.18 million barrels per day at the price of USD57 per barrel may be attainable especially considering recent tensions in the Middle East. However, the oil market remains very volatile and once relative peace returns to the region the current price escalation may revert. The Organization of Petroleum Exporting Countries (OPEC) in its December 2019 report projected that there would be a temporary glut in the oil market in the beginning of this year; where the current Iranian crisis abates therefore, we may experience a climb down in oil prices.

Thursday 16 January 2020

Harvard Business Review




Spotlight on the loyalty economy: Are you undervaluing your customers? ROB MARKEY


he true purpose of a business, Peter Drucker said, is to create and keep customers. Most managers understand this, but few behave as if they do. Under relentless earnings pressure, they often feel obliged to produce quick profits by compromising product quality, imposing onerous fees and otherwise shortchanging their customers. This short-termism erodes loyalty, reducing the value customers create for the firm. It should not be this way. Earning customer loyalty is firmly in the interest of both shareholders and management. My research shows that “loyalty leaders” — companies at the top of their industries in net promoter scores or satisfaction rankings for three or more years — grow revenues roughly 2.5 times as fast as their industry peers. Yet companies and investors continue to prioritize quarterly earnings over customer relationships, for three main reasons: Public company financial disclosure rules and corporate accounting practices require little to no reporting on customer value; most firms lack the capabilities needed for managing it; and organizations’ traditional structure puts functional priorities before customer needs. Now, though, at least some investors and CEOs are beginning to acknowledge the idea that customers are the ultimate source of corporate value. In August 2019, the Business Roundtable, representing many of the largest U.S. firms, issued a statement on the purpose of the corporation in which members put delivering value to customers, among other goals, on equal ground with creating shareholder value. I have identified four broad strategies that loyalty leaders rely on for superior performance. Those leaders create systems for measuring customer value and invest in the necessary enabling technology, use design thinking methods to build customer loyalty, organize the business around customer needs and engage the organization and stakeholders — employees, board members, investors — in the transformation. Before we examine each one, let’s take a closer look at customer value. ACCOUNTING FOR CUSTOMERS I use the term “customer value” to mean the total lifetime value of a company’s customer base. Companies can increase this value by acquiring more customers, earning more business from existing ones and so on. Customer-focused leaders such as’s Jeff Bezos have long understood the importance of concentrating on customer value as an asset rather than pursuing short-term profits or

quarterly earnings. Companies can destroy customer value in a variety of ways: To boost revenue, enterprise software companies sometimes charge corporate customers change fees that can raise the total cost of ownership to as much as three times the original bid. To cut labor costs, call centers often give agents incentives to minimize call-handling times. Such tactics may even lead to short-term earnings growth. But they also scare off potential customers, encourage defection and make the company vulnerable to poaching by customer-centric competitors. Given the importance of customer value, leaders should track it as rigorously as they track other key assets, such as inventory. They also should disclose it in their quarterly and annual earnings releases in consistent formats so that investors can make informed judgments about company performance. But most companies wrongly believe that measuring customer value is too difficult or costly. They continue to rely on a centuries-old accounting tradition that emphasizes physical and financial assets, neither of which offer much visibility into the value of a company’s customers. As investors wake up to the importance of customer value, however, many growth-stage companies preparing for an initial public offering now explicitly direct investors’ attention to success in growing the value of their customer base. Some public companies, such as AMC Entertainment Holdings and American Express, increasingly report various types of customer value metrics. This is a start, but because there are no customer-value reporting standards or requirements, investors still have an incomplete picture. Over the years the International Accounting Standards Board and others have attempted to improve reporting on intangible assets including customer value. Those efforts have consistently run into challenges related to valuation methodology, among others. I propose an approach to disclosure that simplifies the accounting task

for companies and places the burden of valuation onto investors. WHAT INVESTORS NEED TO KNOW While we await clear standards and rules, companies should take the lead, disclosing information about the progress they are making growing customer value as part of their earnings releases. Only then can investors systematically reward those investments. Three new, auditable metrics would suffice in most instances: — Number of gross new customers acquired during the reporting period and number of net new customers remaining at period end. — Number of existing (or tenured) active customers (existing customers are those who have been customers for a year or more; active customers have made a purchase in the past year). — Revenue per new and existing customer. MANAGING FOR CUSTOMER VALUE Let’s turn now to the four strategies used inside a company to achieve consistent and sustained growth in customer value. 1. DEVELOP ROBUST CUSTOMER-VALUE MANAGEMENT PROCESSES AND TOOLS To engage employees in the work ahead and to sell investors on the necessary investments, leadership first needs a clear understanding of the size of the prize: the current total lifetime value of the customer base and the potential financial value that lies in increasing customer loyalty. New accounting tools and technologies enable managers to model customer value and report regularly on the impact of their actions. For example, to improve the loyalty and profitability of new customers, managers need periodic reports on the performance of each new-customer cohort. How much did it cost to acquire new customers in each cohort? What percent of customers in each remains active? What is the revenue per customer? By comparing the performance of different cohorts, managers can

monitor real-time improvements. Managers can also use analytics and reporting to track how experiments and changes in products, pricing and services affect each cohort’s performance over time. 2. COMBINE DESIGN THINKING WITH LOYALTY-EARNING TECHNOLOGIES Companies earn loyalty when they anticipate and meet customer needs. Doing this depends on two sets of capabilities: design thinking and careful application of cuttingedge technologies. “Design thinking” is about seeing the world through customers’ eyes and learning through direct observation. Managers, front-line employees and even C-level executives should engage in the exploration and design process. Design thinking combined with a constant flow of customer feedback helps product groups create highly personalized offerings. The goal is not simply to induce customers to buy. It is to improve their lives so effectively that the company earns their trust and continued business. Data, analytics and artificial intelligence capabilities are key to human-centered design. Consider how an insurance company might use AI to enrich service interactions. A customer, Mary, calls with a question related to a recent claim. Before she even speaks to a live rep, the AI-enhanced routing system predicts what her need is on the basis of her profile data, latest mobile and web interactions, and recent purchases. The system uses this context to route Mary not to the next available agent but to the one whose interaction style and technical proficiency are best suited to the issue at hand. Once the call is connected, an AI-enabled coaching system analyzes Mary’s tone of voice and rate of speech during the call and provides guidance to the agent in real time about ways to improve her experience. 3. ORGANIZE AROUND CUSTOMER NEEDS Rich customer-value data and design-thinking practices will remain locked in silos unless companies embrace new operating

models that push decision-making down to front-line employees, reduce cross-functional friction and focus the organization on customers. Large companies have long employed operating models built around functional and product expertise and accountability. Finance, sales and other functional departments generally control resource allocation, goal setting and decision-making. This structure fosters localized accountability and expertise. However, the model also gives rise to silos, each of which seeks to optimize its own performance. In-group bias — the tendency to favor one’s own group and view others with suspicion — leads to conflicts among silos. Instead of fighting or ignoring in-group bias, some companies now harness it for the benefit of customers by aligning cross-functional teams around a specific customer need. Although members are drawn from different functions, they are fully dedicated to the team. Many digital-native firms, such as Warby Parker, are organized around teams whose “products” are better described as customer experiences, including try-on programs in which eyeglass frame options are shipped to customers’ homes for consideration. Team members, whatever their functional provenance, view addressing the customer need as their primary goal, with individual performance measured and rewarded through their contributions to the team’s results. 4. LEAD FOR LOYALTY The job of leadership in any major organizational shift is to articulate an inspiring vision and engage every employee in the work ahead. The first thing leaders must do is get everybody on board. Building the case for customer value should be easy: When a company focuses on loyalty, it makes customers’ lives so much better that they keep coming back, and they bring their friends. Employees become inspired by the satisfaction that comes from making customers’ lives better. Furthermore, loyalty leadership requires ongoing attention to the actions of employees across the organization — changing decision criteria, supporting policy changes and celebrating customer loyalty wins. This signals commitment to customers and gives employees confidence that the loyalty strategy is not an empty promise.

Rob Markey is a partner and director at Bain & Company and the founder of the firm’s Global Customer Strategy and Marketing practice. He is a co-author of the book “The Ultimate Question 2.0: How Net Promoter Companies Thrive in a Customer-Driven World” and is the host of the Net Promoter System podcast. He is based in New York.


Thursday 16 January 2020



Delta unveils consumer innovations at CES 2020, world’s largest tech stage Stories by IFEOMA OKEKE


n the world’s largest tech stage, Ed Bastian, Delta CEO announced several technology innovations that are transforming the future of travel, rolling out this year and beyond, including transformation of the Fly Delta, Parallel Reality display screens, captivating entertainment options, fullbody wearable exoskeletons and an AI machine learning operations platform. Delta Airlines is transforming its popular Fly Delta app into a digital concierge that anticipates customer needs, offers convenient services like a ride to the airport and delivers thoughtful notifications, keeping customers moving seamlessly on their journey. “Customers tell us they want Fly Delta to become their ‘home base’ for managing their travel day,” Ed Bastian said. “That’s why we’re evolving the app to become the ultimate travel companion for all points of your journey – with an eye on expanding the convenience and value of using miles as a form of payment

for services with Delta and partners, throughout.” During the CES 2020 opening keynote, Bastian shared the airline’s plans to take a big first step in building its digital concierge by deepening its industry-leading partnership with Lyft. Offering customers multiple points within the Fly Delta app to link Delta SkyMiles and Lyft accounts will make it easier for customers to earn miles during Lyft rides. Other features being explored include providing estimated arrival times powered by Lyft, testing a dedicated premium Delta-Lyft experience at some of the busiest U.S. airports, and offering the option to pay for rides using miles. The next step comes lat-

Air Peace commences AbujaWarri-Abuja flights


n keeping with its vision to provide seamless connections to Nigerians, West Africa’s largest carrier, Air Peace, has commenced AbujaWarri-Abuja flights. Stanley Olisa, the airline’s Corporate Communications Executive, disclosed this in a statement. Olisa, who revealed that this new connection is operated daily, noted that Air Peace has provided a direct connectivity between the two destinations. He added that the airline kicked-off the new connection in response to requests from Nigerians asking for flight connections between both cities. “Air Peace is determined to interconnect every part of Nigeria. It is our own way of uniting our nation and promoting

healthy socio-economic exchanges between different cities”, he affirmed. Olisa stated that the airline has new local and international routes in the offing, including Ilorin, Makurdi, Ibadan, Congo DRC, Congo Brazzaville, Douala and Johannesburg. He asserted that the airline has a ‘no-city-leftbehind’ initiative which is driving its rapid route expansion. The spokesperson restated the airline’s commitment to providing its customers with best-in-class flight experience, adding that some of its planned routes will be activated in the first half of 2020. It can be recalled that Air Peace, just in December 2019, announced that it will begin flights into Ibadan from Kano, Owerri and Abuja.

er this month, when virtual queuing launches in Fly Delta to notify customers when their seat – not just their flight – is boarding. This adds to recent upgrades like integrating TSA wait times in select markets, offering pre-select meals and international auto-check-in – all designed to make travel more personal. “Instead of checking one app for traffic, another for airport parking and a third for TSA wait times, Delta is building the capability to simplify travel by helping you manage everything from ridesharing and in-flight entertainment to bag delivery and hotels,” Bastian said. “We’re excited to start exploring these possibilities

with an innovative leader like Lyft, with whom we share a passion for making the customer travel experience even more rewarding.” “Lyft and Delta share a commitment to bring hospitality and innovation to our communities,” said John Zimmer, Co-Founder of Lyft. “That is why today we’re excited to expand our partnership and progress toward our goal of transforming the industry with the world’s best transportation.” Delta and Lyft’s commitment to finding new ways to boost the customer experience together is backed by Delta’s independent research showing that ridesharing helps reduce stress on travel days and makes for a more

enjoyable experience. It also highlights the value each brand places on being central to the multi-modal future of transportation. The airline is also investing in renewable and natural environment solutions to offset emissions for its flights to and from Las Vegas during the week of Jan. 6, building on the company’s long-running investments in sustainability. Delta also will make investments in verified projects to offset the carbon footprint associated with Global Citizen’s year-long Global Goal Live: The Possible Dream campaign which supports the United Nations Sustainable Development Goals. “There is just no substitute for the power that travel has

to change lives and make the world a better place. And we’re committed to making our business of connecting people to the world one that also is environmentally minded,” Ed Bastian, Delta CEO said. “Starting with voluntarily capping our carbon emissions at 2012 levels, we continue to reduce our footprint and invest in natural climate solutions as well as projects that support local economies worldwide.” Delta will invest more than $100,000 into The International Small Group & Tree Planting Program (TIST), a program that supports subsistence farmers in countries such as Kenya and Uganda to reverse the devastating effects of deforestation, drought and famine through tree planting and conservation farming. The investment covers carbon associated with all Delta flights into and out of Las Vegas during CES 2020. The investments were announced as part of Bastian’s opening CES keynote address, during which he discussed how Delta is transforming the future travel experience for customers across all points of the journey through technology and innovation.

Dana Air bags ATQ’s Most Stable Domestic Carrier award


igerian carrier, Dana Air has won an award as the Most Stable Airline in Nigeria at the 2019 Air Transport Industry Awards held recently at the Prestigious Welcome Centre & Hotels, Lagos.

Prince Supo Atobatele, the Editor-in-Chief of Air Transport Quarterly Magazine, while speaking during the ceremony said the award is in honor of some of the industry’s finest individuals and Corporate bodies whose penchant for hard work, innovation and

capacity building has not only greatly improved the business of air transport but enhanced safety of the air space. According to him, Dana Air bagged the award as a result of her consistency and stable operations offering safe and reliable air transport in the past

L-R Fola Akinkuotu, The managing director of Nigeria Air Space Management Agency (NAMA) .presenting the award of the most stable domestic airline to the Communications Kingsley Ezenwa, manager of Dana Air at the 2019 Air Transport Industry Award. With them are Chikodi Ofomata and Supo Atobatele, the Editor in chief of Air Transport Quarterly magazine.


few years. Reacting to the airline’s award as the most stable domestic carrier, Kingsley Ezenwa, the Media and Communications Manager of the airline, said, ‘’the reward for hard work is more work. There is no better way to end the year 2019 than a recognition like this. “We have been here for the past 11 years doing what we know how to do best passionately and persistently. With a fleet size which we have progressively grown to 9 aircraft, our target is to hit about 7.2m flown passengers by the first quarter of 2020. We are orderly and we like to take one step at a time. We are presently consolidating while sticking to our strategic fleet and route expansion plan.’’ Ezenwa dedicated the award to the airline’s customers for their loyalty and support for the last 11 years and reassured them of the airline’s commitment to continue providing safe, comfortable, on time and reliable air transport.

Thursday 16 January 2020



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.’

At $15bn, Aliko Dangote is worth more than 8 African countries


Nigeria requires $15 billion (N4.59 trillion at N306 to a dollar) worth of investments annually for 15 years in order to adequately develop its infrastructure nationwide


ccording to Bloomberg Billionaire index, Aliko Dangote be came $4.3 billion richer in 2019 as he ended the decade with a net worth of almost $15 billion, making him the 96th wealthiest man in the world. The staggering $15 billion is more the GDP of eight African countries, while the International Monetary Fund (IMF) has lowered the outlook for the continent, but economists see the economies of Rwanda, Ivory Coast, and Ethiopia to grow in 2020. Africa’s GDP was $2.45 trillion in 2019, per latest data from the International Monetary Fund (IMF), and Aliko Dangote net worth is 0.61 percent of that figure. Compared to Nigeria, the continent’s largest economy with a GDP of $441.91 billion in 2018, the business magnet’s market cap represents 3.30 percent. Interestingly, Aliko Dangote’s market value is 2.20 percent of Economic Cooperation of West African States (ECOWAS) GDP of $668.60 billion GDP in 2019 as he is richer than 8 African countries. Somalia has a GDP of $7.90 billion, Eritrea, ($7.71 billion); Malawi, ($7.43 billion); Togo, ($5.59 billion); Mauritania, (5.56 billion); Eswatini, ($4.46 billion); Sierra Leone, ($3.99 billion); Burundi ($3.57 billion); Liberia, ($3.22 billion). Other countries’ economic sizes are as follows: South Sudan, ($3.15 billion); Lesotho, ($2.81 billion); Djibouti, ($2.39 billion); Central African Republic, ($2.28 billion); Cabo Verde, ($2.04 billion);The Gambia, ($1.74 billion); Seychelles, ($1.65 billion); Guinea-Bissau,

($1.53 billion); Comoros, ($726 million), and São Tomé and Príncipe, ($477 million). Aliko Dangote’s net worth is 38 percent of the Nigeria’s external reserve of

$38.61 billion. The country’s external reserves has been falling since October last year as crude oil price continues to be volatile, and the bedlam in the Middle East that

sent oil price temporarily upwards wasn’t enough to add strength to the foreign exchange reserves. Analysts call on policy makers to jettison the multiply exchange rate because

it makes foreign loss confidence in the economy, hence, undermining foreign direct investment. Lack of policy direction on the part of government is also responsible for investor apathy towards the country’s equity market. The 62-year-old billionaire and Africa’s richer man with interests in cement, flour, and sugar estimates group revenue hit $30 billion by 2021, thanks to earnings from a new oil refinery and petrochemical plant due to start production next year. He is building a $12 billion, 650,000 barrel-a-day refinery in Lagos, Nigeria’s commercial capital. Dangote plans to expand his cement business so as to increase a share of the market and the company is the largest producer of the building material in Sub Saharan Africa. Last year, he told shareholders that he plans to add six million tons in Nigeria next year, taking volume in the company’s home market to 35 million tons.



The rest of the expansion is planned mainly in West Africa, including Niger and Cote d’Ivoire. Two years ago, he told shareholders in the company would open plants in Nigeria that would allow it export clinker to grinding plants in Cameroon and West Africa. The cement business has strong export potential as capacity utilisation in Nigeria is a notch below 50 percent, as the company said it would employ unutilised capacity in Nigeria to export clinker to its grinding plants located across West African Coasts – Togo, Ivory Coast, Liberia, and Ghana. Analysts expect a rampup in production in Tanzania, Sierra Leone, and Congo to help support sales volume in Pan Africa. Analysts at Cordros Capital said in a recent report that the company’s scale, superior margin, and exceptional portfolio diversification isolate it from peers in the Nigerian cement market. “In our view, the company is firmly positioned to benefit from our projected cement demand growth, given its bourgeoning investments in trucks, which makes product delivery across the country seamless,” said analysts at Crodros Capital. The country’s huge infrastructure deficit and Federal Government proposed infrastructure spend are expected to accelerate demand for building material, a boon for Dangote cement and peer rivals. Nigeria requires $15 billion (N4.59 trillion at N306 to a dollar) worth of investments annually for 15 years in order to adequately develop its infrastructure nationwide, the Financial Derivatives Company, an economic and financial research firm.


Thursday 16 January 2020


TECHTALK Innovation







Broadband Infrastructure

Bank IT Security

RoW hike by 14 states could derail new FG’s fixed broadband push Stories by FRANK ELEANYA


he decision by fourteen states in Nigeria to increase Right of Way (RoW) charges is likely to be the biggest obstacle to a new push by the federal government to increase investment in fixed broadband. The Nigerian Communications Commission (NCC) said on Friday it plans to invest 265 billion naira ($732 million) in broadband infrastructure over the next four years as the government sets its sights on nationwide coverage and boost the economy. According to Umar Danbatta, the chief executive officer of NCC, the government will provide 65 billion naira for the project and six private infrastructure companies the balance under a public-private partnership. In a telephone interview with Bloomberg, Danbatta said the plan is to roll out an additional 30,000 kilometers (19,000 miles) of fiber across the 774 local governments, taking the total to 71,000 kilometers by 2024. The penetration rate could rise to 65% from 38%, he said. However, unless the federal government addresses the hike on Right of Way (RoW) earlier in the year, the latest plans would have great difficulty. The 14 states including Lagos, Kano, Ondo, Cross River, Adamawa, Osun, Kaduna, Enugu, Ebonyi, Imo, Kebbi, and Gombe increased the cost of RoW from the initial fee of between N300 to N500 per linear metre to between N3,000 and N6,000 per linear metre. News of the hikes have fanned consumer speculations that operators might resort to increase in broadband service fees in order to

mitigate the added cost. But experts say this is unlikely. “There won’t be any increase in service fees. Right of Way is the small part of the cost of deploying fibers but the administrative overhead can be quite exhausting,” said Adedeji Olowe CEO of Trium and a consultant for telecommunication companies. He, however, notes that the fiber cable operators may have no choice but to pay the new fees as there is no better or more reliable technology with the capacity of optical fiber. The minister of Communication and Digital Economy has yet to respond to the states’ decision. Harmonising Right of Way fees is a mission the minister said in 2019 he intends to pursue to a logical end once the new National Broadband Development Plan is drafted in March 2020. The sector also risks losing the

momentum it has achieved which reflected in its 2019 contribution to GDP. The telecom’s contribution to the GDP by the second quarter of 2019 was 11.39 percent making it one of the best performing sectors of the economy in the year. Unfortunately, much of that contribution came from investment activities in the startup space which led Africa by attracting the most investment. For the telecommunication space, only a few companies like MTN and MainOne made new investments in mobile money agent networks and satellite broadband respectively. Investment in fixed broadband stayed below 1 percent. Later in the year 2019, the government through the minister of Communication and Digital Economy expressed confidence recently that investment activities would soon pick up across the country

as plans are already in motion to address all the problems operators face in the sector. The latest development, however, is sure to put the government’s resolution into the great test as stakeholders say that Right of Way issues are responsible for about 70 percent of the costs in the sector. Fixed broadband delivered mostly through fibre optics cables is widely acknowledged as the best way to deliver reliable, limitless and fast internet to homes compared to mobile wireless and satellite technology. The alternatives to fiber face headwinds that fiber does not, including limited bandwidth, attenuation, noise, upstream/downstream asymmetry, and latency. Nigeria has five major fibre cable operators; MainOne (10Tb), SAT3/ SAFE (800Gb); WACS (14.5Tb); Glo1 (2.5Tb); and ACE (5Tb), with a combined capacity of 32.800Tbps. So far,

less than 10 percent of their capacity has been deployed. A major clog in the wheel is the problems surrounding Right of Way. To lay fibre optic cables in Nigeria, an operator would need to make an application to a host state or to the federal government if the cables are to pass through a federal road. A guideline issued by the federal government in 2012 pegged that chargeable access for laying of ICTSP ducts and cables at N145 per linear metre and N20 per linear metre as annual maintenance access fees. Usually, cables run through an intersect of states and federal roads. In essence, operators laying cables for broadband would necessarily have to pay the various parties; federal, state and local governments, the stipulated fees. Although the federal guideline stipulates that the amount to be charged, states naturally exploit the fact that the guideline is not mandatory but advisory. For instance, Lagos State during the days of Babatunde Fashola charged N500 per linear metre, but the Akinwunmi Ambode government jerked it up to N3000. The current administration under Babjide Sanwo-Olu has hiked it to N5000. The federal government had condemned states’ attitudes towards Right of Way charges. “If a State is charging for rightof-way from communications companies and is hindering the laying of cables and other broadband infrastructure as an IGR measure, permit me to say that that will be penny wise and pound foolish,” Prof Temi Osinbajo, Nigeria’s Vice President said in 2019. But the government at all levels and broadband operators have to come together and map out a way forward for RoW.

Western Digital unveils enhanced innovations in storage technology at CES 2020 CALEB OJEWALE


ome cutting edge innovations in storage solutions for everyday consumer use were recently showcased by Western Digital, during the Consumer Electronics Show 2020. This included a demonstration of what the company describes as the world’s highest capacity pocket-sized, portable SSD prototype featuring a SuperSpeed USB 20Gbps interface. The company also released the 1TB SanDisk Ultra Dual Drive Luxe, a USB Type-C drive for smartphones and laptops. “Consumers are generating more content than ever and require more advanced solutions to help them capture, access, share and manage it all. Our top priority is to empower people by giving them

complete control of their content, so they have peace of mind that it’s reliably stored and at their fingertips when and where they need it,” said David Ellis, vice president, product marketing, Western Digital. Western Digital’s portfolio now offers a range of storage solutions for every type of usage, from mobile to highly specialized performance drives. At CES 2020, the company showcased some of it new consumer storage solutions from its G-Technology, SanDisk, WD and Western Digital brands. Some of these include: Groundbreaking SanDisk 8TB SSD Prototype Continuing what it describes as “its legacy of technology milestones”, the company demonstrated what it calls the world’s highest capacity, pocket-sized SuperSpeed

USB 20Gbps portable SSD. Combining its expertise in flash memory with skillful design, the company says it will continue to be at the forefront of developing revolutionary solutions that keep up with and surpass today’s consumer needs. An extensive lineup of portable SSDs was also showcased. All-New 1TB SanDisk Ultra Dual Drive Luxe USB Type-C Launching at CES, the SanDisk brand released its newest dual connector drive that works with the latest USB Type-C smartphones and laptops. • All-metal, high-capacity drive allows consumers to capture more photos and videos, and easily transfer content between USB Type-C smartphones, tablets and laptops and USB Type-A computers. • Designed to fit on a keychain,

the drive offers massive space in a tiny form factor so consumers have extra storage for content whenever they need it. Industry-First WD_Black P50 Game Drive SSD, with SuperSpeed USB 20Gbps The WD_Black portfolio caters to performance, capacity and reliability that allows PC and console gamers to drive their game and play without limits. Five gaming solutions from the WD_Black shown include: • WD_Black P50 Game Drive SSD, which is now available to consumers, is the industry’s first game drive to feature a SuperSpeed USB 20Gbps interface. • Two Xbox-licensed drives, the WD_Black P10 Game Drive for Xbox One and WD_Black D10 Game Drive for Xbox One, both of which come with an Xbox Game Pass Ul-

timate trial membership**. Ibi, a SanDisk brand device for photos and videos ibi is a smart photo management device from SanDisk that offers consumers local storage that works like a personal cloud for photos and videos. Features include: • Companion app, which allows consumers to wirelessly connect their phone for automatic back up with an intuitive interface to help people seamlessly collect, organize and privately share their photos and videos. • Ability to aggregate content from various locations including laptops, USB drives, social media and cloud accounts – all stored on ibi and viewable in the app • 1TB of storage that can store up to 250,000 photos or 100 hours of video

Team: Frank Eleanya,; Caleb Ojewale,


Thursday 16 January 2020



Live @ The Exchanges Market Statistics as at Wednesday 15 January 2020

Top Gainers/Losers as at Wednesday 15 January 2020 LOSERS
















































ASI (Points) DEALS (Numbers) VOLUME (Numbers) VALUE (N billion) MARKET CAP (N Trn)

29,062.50 4,345.00 360,075,638.00 2.834

Global market indicators FTSE 100 Index 7,642.80GBP +20.45+0.27%

Nikkei 225 23,916.58JPY -108.59-0.45%

Generic 1st ‘DM’ Future 29,048.00USD +114.00+0.39%

Deutsche Boerse AG German Stock Index DAX 13,432.30EUR -24.19-0.18%

S&P 500 Index 3,294.70USD +11.55+0.35%


Securities lending report shows 20.78m units available Stories by Iheanyi Nwachukwu


o fewer than 20.78million units of ten listed companies shares were available for lending on the Nigerian Stock Exchange (NSE) as at January

10, 2020. Securities lending is the market practice of temporarily transferring securities, for a fee, from their holder (the lender) to another party (the borrower), with the borrower agreeing to return the securities to the lender either on-demand or at the end of the agreed loan term.

This practice usually requires the borrower to collateralise the transaction with cash or other securities of a value equal to or greater than that of the lent securities, in order to protect the lender against counterparty credit risk.​The securities that were available for lending as at that date are: CAP (21 units), Dangote

Cement (1,652,000 units), Dangote Sugar (700,000 units), Flourmills (100,000 units), GTBank (8,439,000 units), MTNN (2,378,000 units), Nigerian Breweries (200,000 units), Okomuoil (2,340,000 units), Presco (4,075,000 units) and UBA (900,000 units). The Nigerian Stock Exchange’s Securities Lend-

L – R: Paschal Nwachukwu, head, Finance and Performance Management Group, Cornerstone Insurance Plc; Cordelia Ekeocha, head, Marketing and Corporate Communications Group, Cornerstone Insurance Plc; Toks Bello, executive director, Technical/Operations, Cornerstone Insurance Plc; Ganiyu Musa, group managing director/chief executive officer, Cornerstone Insurance Plc; Olumide Bolumole, head, Listings Business Division, The Nigerian Stock Exchange (NSE); Olufunmilayo J. Amanwa, head, Central Claims Group & Special Risks Underwriting, Cornerstone Insurance Plc; Adewale Foster-Aileru, group head, Strategy, Investor Relations & Enterprise Risk Management, Cornerstone Insurance Plc; and Jude Chiemeka, head, Trading Business Division, NSE at the Closing Gong Ceremony during the company’s courtesy visit to The Exchange, Lagos.

Shanghai Stock Exchange Composite Index 3,090.04CNY -16.78-0.54%

Market dips by N114bn as profit taking continues ing and borrowing report is prepared on a weekly basis, with data collected from the market’s Securities Lending Agents. The historical securities lending and borrowing transaction report shows that as at January 18, 2019 135 units of Lafarge Africa were lent. Others securities lent and their dates are: 100 units of Africa Prudential, FCMB (100 units), and Fidelity Bank (100 units). They were lent on January 18, 2019. On November 12, 2019, 1,000 units of FBN Holdings were lent; on September 27, 2019, 10,000 units of Access Bank were also lent, while on October 28, 2019, 50,000 units of FBN Holdings were lent. Securities lending plays an important role in capital markets by providing liquidity, which in turn reduces the cost of trading and promotes price discovery.​Global Master Securities Lending Agreement (GMSLA) and its Nigerian Addendum is the standard contract document that binds lender and borrower in a Securities Lending arrangement. ​​​


he Nigerian stock market on Tuesday January 15 recorded another session of profit taking activities by investors. This resulted to a dip by 0.75percent and N114billion seen in the Nigerian Stock Exchange (NSE) All Share Index (ASI) and the Market Capitalisation respectively. With most key indicators still pointing towards waning investor sentiment and profittaking inclinations, market watchers expect the ASI to extend its decline into Thursday’s session. MTNN stock price recorded the highest decline from N124.2 to N120.5, losing N3.7 or 2.98percent; BUA Cement followed after it dropped from N38.95 to N38, losing 95kobo or 2.44percent, while ETI followed after it decreased from N7.8 to N7.2, losing 60kobo or 7.69percent. Beta Glass was rallied most, from N59 to N64.9, adding N5.9 or 10percent; followed by Forte Oil, which increased from N17.85 to N19, adding N1.15 or 6.44percent, and GlaxoSmithKline Consumer Nigeria which moved up from N5.6 to N6, adding 40kobo or 7.14percent.

SEC, ICPC to strengthen collaboration


he Securities and Exchange Commission (SEC) and the Independent Corrupt Practices and other Related Offences Commission (ICPC) are to collaborate in combating crime in the Nigerian capital market. This agreement was reached when the management of the SEC met with the management team of the ICPC in Abuja, Wednesday. Mary Uduk, acting directorgeneral of SEC said the visit was necessary in order to seek collaboration, and also leverage on the expertise and mandate of the ICPC in tackling corrupt practices especially fraud, which has been prevalent in the Nigerian Capital Market and which is a major obstacle to the actualization

of the objectives of the Commission Uduk said the objective of regulating the capital market is to protect investors, maintain fair, efficient and transparent Market by ensuring integrity in the market place and by preventing fraudulent practices. This shared goal she added, has necessitated a collaboration with relevant anti-corruption and law enforcement agencies in a bid to ensure that the market is fair to all investors According to her, “we are aware that your agency is established to curb corruption in the public sector, but as an agency of government we owe investors the duty to protect their investments, hence the need for this collaboration.

L-R: Ifeayinwa Anikpe, head, Capital Market, First-Ally Capital; Jerry Chukwueke, chairman, Board Committee on Business and Strategy, Salus Trust HMO; Peter Oriavwote, CEO, Salus Trust HMO; Debo Adebayo, CEO, SPNS Consulting; Joe Osi. executive director, J3 Consulting, at the unveiling of new logo ceremony of Salus Trust HMO recently in Lagos.



Thursday 16 January 2020


Retail &

consumer business Luxury




Spending Trends


Dying Nigerian mall go under the hammer of court BALA AUGIE


he default by one of Nigerian malls maybe a harbinger of trouble nationwide as a wave of debt from last decade borrowing binge comes due for shopping centre. A Federal High court has sealed off Abia shopping mall over failure to honour obligation to Ecobank, leaving customers bewilderedly stranded, that the most frequented stores was under lock and keys. A notice on the front security room read, “Possession taken by receiver manager of Ecobank over Abia Retail Co Limited by order of court dated 17/12/19, FHC/L/LC/19”. Abia Mall, located at Uwalaka Street by Old Garki Road, Umuahia, Abia State, was opened in 2016, the year that the country slipped into its first recession. While workers of the mall refused to comment on the development, a lot of experts said failure to honour obligation is

responsible for the barricade. The income level within a locality will spur consumer demand. Abia people are civil servant and the state has been in difficult situation due to poor governance, according to Johnson Chukwu, managing director and CEO of Cowry Assets Management Corporation Limited. “A lot of people are unable to pay rents to landlord, which is why it is difficult to pay service charge in malls” said Chukwu. Analysts said that malls across the globe are struggling, as high rents, heavy competition and defection of shoppers to online outlets are responsible for record pace in bankruptcies. In 2017, over 14 chains in the United States said they would seek court protection as retailers such as Apparel Retail, The Limited Wet Seal, BCBG Max Azria, and Vanity Shop of Grand Forks seek protection. Fleetwood Industries Inc., one of the biggest retailers in the United States, joined retail apocalypse when it as much as $50 million each in assets and

liabilities in its bankruptcy petition. Abiola Gbemisola, consumer goods analyst with Chapel Hill Limited said Abia malls could be facing visibility problems as people may not be taking up shops. The economic spending power of the people could be seasonal. “You need a good location matters a lot in this business. For instance, Ikeja mall is in the heart of the

city where people can easily access it at will,” said Gbemisola. Analysts say the overall economy is in a weak circle and that the inflation and hike in fuel price have eroded the purchasing power of consumers.That means tenants are grappling with low patronage as cash flows continue to shrink. The country hasn’t recovered from the precipitous drop in crude oil price

off mid 2014 that stoked a severe dollar scarcity, depleted the external and paralyzed business activities. While Nigeria’s economy expanded by 2.38 percent in the third quarter of 2019, it is still below the 6.28 percent growth in the corresponding period of 6.28 percent. Unemployment rate has risen to 23.10 percent while over 50 percent of a population of 200 million live on less than $1.90 a day as the country overtook India to become the poverty capital of the world. As a result of the above myriad of challenges, Nigerian mall tenants are groaning under huge service charge as vacancy rates are mounting. A total of 9 stores at the Shoprite malls in Surulerea commercial city in Lagos centre- are empty while 3 are sealed, some of them the vacant spaces are large enough to take 2 offices. The stores are on the same floor with KFC Foods, but the 26 stores at Leisure mall have tenants. A visit to the Apapa Malls shows a total of 19 stores are without tenants, even

the cinema hall has been sealed. Some of the top brands that have evacuated include: Ruff and Tumble, the seller of kid clothes, Samsung Phones, and Cash and Carry. Experts attribute the vacancies in Apapa to the menacing gridlock in the town as a lot of high end earners have relocated to other parts of the state, while those that stay very close to the city rather go shopping in other malls or conventional markets. According to a report by Northcourt Retail Estate, Novare Mall came has a vancenc y rate of 28 percent, down from 47 percent at the end of 2017.Artee’s Port Harcourt Mall, Big Treat and Genesis Centre had 8 percent, 15 percent and 25 percent respectively. The report further stated that Ceddi Plaza and Gateway Mall in Abuja recorded 21 percent and 38 percent respectively. Abuja’s largest mall – Jabi Lake (20,000sqm) recorded the highest vacancy rate in city – 40 percent due to a number of stores that closed down in Q1 and high rentals.


2020: Weaker consumer spending to put regulators on hedge, test resolve SEYI JOHN SALAU


s Nigerian consumers continue to seek palliative measures to cushion the effects of the new Finance Bill recently signed into law by President Muhammadu Buhari, the resultant effects of the bill would be a weaker consumer spending that will put regulators on the hedge and test their resolve to protect consumers. Under the new bill, consumers are expected to pay 7.5 percent Value Added Tax (VAT) on products and services. However, the threshold for the N 50 stamp duty on receipts was raised to N10, 000 from its initial N1, 000. These charges, especially the n50 point-of-sale (pos) charges will be passed on to the consumers by the mer-

chants in an attempt to grow their bottom line (profit). Hence, the needs for regulatory authorities like the Federal Competition and Consumer Protection Commission (FCCPC) and the Lagos State Consumer Protection Agency (LASCOPA) to up their game. Expectedly, the president explained that the finance bill will reform Ni-

geria’s tax laws to align with global best practice, support MSMEs, incentivize investments in infrastructure and capital markets, and raise government revenues. “It is a good development for us as regard the stamp duty and that means event have over taken the initial legal action initiated by the agency; but none the less, I think it is important

we still have engagement with the merchants,” said Kemi Olugbode, the general manager of the Lagos State Consumer Protection Agency (LASCOPA). According to her, the agency was keen on persecuting merchants for infractions on the N50 Point-ofsale (PoS) charges before the quick intervention of some critical stakeholders

who calls for caution and advised that LASCOPA delay the legal action pending the signing into law of the new Finance Bill. Earlier in the month, LASCOPA engaged stakeholders in the banking sector on the several complaints raised by Lagosians on the N50 PoS charges and stamp duty. However, as a following up to that engagement, LASCOPA will further engage merchants and other stakeholders on its resolve to protect Lagosians against unfair trade practices in the state. “We scheduled a meeting with them for 31 January to let them know the present position of things. It is a good development,” said Olugbode, positing that it is better to engage all parties involved before pressing charges for infractions. Olugbode further stated that LASCOPA will continue to engage and en@Businessdayng

courage merchants that it is very wrong to partake in these infractions; as it clearly amount to an unfair trade practice that can be regarded as exploitation of the consumers, which is not acceptable by the agency. Similarly, the Lagos Chamber of Commerce and Industry (LCCI) had earlier warned of a weaker consumer spending in its forecast for 2020. “We expect economic growth to remain subdued at around 2 per cent by 2020 as consumer demand, as well as private sector investment, will most likely remain weak. We are of the view that failure by the government to fix structural constraints with regards to fixing power challenges and rehabilitating deplorable road networks will perpetuate the poor productivity and performance of the sector,” said Muda Yusuf, the DG of the LCCI.

Thursday 16 January 2020


Retail &


consumer business


Greeting cards fall out of favour as retailers cut card shelves on low patronage OLUFIKAYO OWOEYE


ave greeting cards become a thing of the p a s t ? Hav e they become a tradition that will be completely wiped out by the rise of the internet and social media? These were some of the questions running through the mind of this writer during a visit to purchase a greeting card during the yuletide season at one of the popular malls in Ikeja. The shelves for cards are fast disappearing on low patronage from shoppers. More and more people are now using text and email and e-cards, and fewer people are buying cards, so that would be one area to cut

back, Mercy Obi a shop attendant said. No thanks to the younger tech-savvy generation who seems to have abandoned sending these cardstock creations in favour of e-cards, as they can be customized to fit a diverse number of occasions. Interestingly, more millennial are also embracing newer digital greeting card apps that allow people to send personalized cards with a click of a button. The idea of a holiday greeting card, also known as the Christmas card, was conceptualized by Henry Cole in 1843 when he hired artist John Calcott Horsley to create a holiday greeting that he could distribute among his friends and family. Horsley liked the idea of a greeting

card, as he did not have the time to personally write a holiday wish for friends and family. To this day, greeting card companies like Hallmark generate the highest sales during Christmas time, followed by Valentine’s Day. Currently, the once-thriving industry is struggling to

remain relevant in the age of digital technology, and with significant changes in lifestyle, demographics and the economy, greeting card sales are declining faster than ever. Hallmark, the largest greeting card company, stated in its July 2016 trend report that its revenues have

declined to $401.7 million in the past five years, a decline of six percent. The company also cut about 28 percent of its retail square footage from 2013 to 2018. Also, industry’s secondlargest maker, American Greetings Corp., sold a majority share of itself in April to

private equity firm Clayton, Dubilier & Rice. IBISWorld estimated that American Greetings’ revenue declined by about 16percent over the last four years. According to Mercy, more young people are starting their own companies that make new kinds of cards that feature pop-up 3D images, hand-painted artwork, LED lights, sounds and even animated cartoons that can be accessed with a mobile phone. “Their goal is to create a more personalized experience and make cards that are more relatable to younger people,” she said. Stores are now looking at reducing the space it gives to greeting cards as they’re not selling as much, instead put more health-focused and family products there.


Makers of FMCGs face tougher choices as VAT increase kicks in ...prices likely to go up in 2020 BUNMI BAILEY


igeria’s listed Fast Moving Consumer Goods (FMCG) companies may anticipate a tougher year in 2020, if they decide to increase prices of products, according to consumer experts. On Monday, President Muhammadu Buhari signed into a bill that among other things has effectively made possible an increase in Value Added Tax (VAT) from 5.0 to 7.5. This may prompt FMCG companies to immediately pass on the cost to end users by increasing prices. “The expected decision is based on recent policy actions of government and also on the fact that they are not making money as before,” said Abiola Gbemisola, analyst at Lagos-based Chapel Hill Denham. The year 2019 was horrendous for the consumer goods space as industry players faced myriad challenges from fragile economic

growth to unfavourable protectionist policies of government – border closure and foreign exchange restriction for food imports. And due to the week purchasing power in the economy, FMCG firms could not increase prices of their products. According to experts, FMCGs could experience further decline in revenues and margins this in attempt to hike prices of their products.

Damilola Adewale, a Lagos-based economist and independent consultant said that if the companies attempt to raise prices, they should expect lower sales revenue as consumers will most likely switch to cheaper substitutes. “The decision to hike prices will put industry players in a tight corner given the price-sensitive nature of Nigerian consumers,”

Adewale said. Beer makers in Nigeria have been experiencing a decline in revenues. For example, Guinness Nigeria’s revenue fell by 4 percent to N26.9billion from N28billion in the same period in 2018 citing excise duty for the decline. BusinessDay review of the results of 10 listed players between January and September 2019 was un-

impressive as only three – Nestle, Cadbury and UACN recorded uptick of 11.2 percent, 276.9 percent and 30.2 percent in post-tax profit year-on-year. The brewery sub-sector churned out the most disappointing numbers in the first nine months of 2019 as all players in this space recorded drastic decline in their net income. Nigerian Breweries’ bottom-line fell by 17 percent; Guinness by 47 percent and International Breweries had the greatest decline of 130 percent. Others players such as Flour Mills of Nigeria, Dangote Sugar, Unilever and PZ Cussons all saw their net income trend downwards in the review period. Ayodeji Ebo, managing director at Afrinvest Securities Limited posited that if companies make this move, it could further exacerbate the earnings performance of industry players. “It will further impact negatively on their earnings because the economy is not growing significantly. They

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


will further experience low patronage, weaker sales and if this persist for long they will cut down their cost of production which will led them to downside by cutting staffs,” Ebo argued. The Nigerian economy is yet to recover fully from a recent recession as growth of the wider economy which printed at 2.28 percent in the third quarter of 2019 underperforms population growth rate estimated at some 3 percent. This indicates that Nigerians are getting poorer even as gross domestic product (GDP) per capita or income per head, (a proxy for living standard), fell by 40 percent between 2014 and 2018, official data show. According to the World Bank, Nigeria’s tepid growth is driven by weak consumer demand combined with low private investment and contracting net exports. The bank expects Nigeria to expand by 2.1 percent by 2020-end, implying that an average Nigerian might get poorer in the New Year.


Thursday 16 January 2020



Road to davos

WEF as global partner in shaping history


h e Wo r l d Ec o nomic Forum has launched a book to mark the 50th of the organization created in 1971 as the European Management Forum. In 1987, The European Management Forum was renamed the World Economic Forum and the European Management Symposium became the annual meeting, reflecting the expansion of the Forum’s scope and focus. In the 50 years that have passed, numerous business, government and civil society leaders have made their way to the Swiss Alpine resort of Davos for the annual meeting that has become a critical platform for furthering peace and reconciliation in many parts of the world, promoting understanding around the world. In a forward to the almost 400-page book, chairman of the Forum, Klaus Schwab said, “Davos has been a place where incipient changes in the world are first discerned and where ideas for changes that have shaken the world have been conceived or refined.” According to him, “what has never changed since its beginning is the forum’s

dedication to collaboration among stakeholders, the steadfast adherence to high-level participation of leaders sharing the forum’s commitment to improving the state of the world, and the forum’s trust in the power of dialogue and exchange based on mutual respect and civility to bridge divides and shape actionable solutions to global

from the compilation of impressions, insights and memories is that the forum has evolved from a modest yet groundbreaking attempt to bring European corporate managers and their stakeholders together to discuss business strategies into an organization that today is widely regarded as the world’s foremost multistakeholder platform for ad-

challenges.” The book titled “ The World Economic Forum: A Partner in shaping history,” provides a year-by-year summary of the highlights of the five decades of the forum and tells the story of the forum through the eyes of members. Schwab the German engineer and economist who took degrees from Harvard and the University of Geneva, said “what is clear

dressing the most pressing issues on the global agenda.” The European Management Forum was initially established as a foundation nominally based in Chur, the cantonal capital on the 8 February 1971 by an official document dated just 10 days earlier with an initial endowment of a mere 25,000 Swiss francs. From the very beginning, what was to become known as the Davos spirit, the con-

cept of multi-stakeholder participation, collaboration and congenial exchange, was the foundation of the forum. The first meeting of the forum which held in Davos from January 24 to February 7 was intended to allow top managers of corporations to interact with all their stakeholders. It was planned as an opportunity for senior European managers to learn about the latest management techniques and concepts from the most engaging thought leaders in business, including prominent professors from the top US business schools and the meeting featured 450 participants from 31 countries joined by 50 faculty members and the media. The reader will find from the book that Klaus and his wife Hilde have had a long-standing romance with Davos. It was in this alpine resort that they both married in 1971. The book is an excellent guide to the making of history and features comments, messages and impressions of great world leaders from Ronald Regan to Edward Heath and Nelson Mandela and Yitzhak Rabin.

Global leaders seek to refine capitalism in quest for a cohesive, sustainable world


olitical and business leaders gathering in Davos, Switzerland for the annual meetings of the World Economic Forum Annual Meeting 2020 holding from 21-24 January, will focus on establishing stakeholder capitalism as a way of addressing the world’s greatest challenges, from societal divisions created by income inequality and political polarization to the climate crisis faced by the world today. According to a statement by the organisers, underpinning thi0.s year’s meeting will be the Davos Manifesto 2020, a document that builds on the original Davos Manifesto of 1973, which set out for the first time the stakeholder concept that businesses should serve the interests of all society rather than simply their shareholders. The Davos Manifesto 2020 provides a vision for stakeholder capitalism that touches on a range of important issues of our time, including fair taxation, zero tolerance for corruption, executive pay and respect for human rights. “Business has now to fully embrace stakeholder capitalism, which means not only maximizing profits, but use their capabilities and

resources in cooperation with governments and civil society to address the key issues of this decade. They have to actively contribute to a more cohesive and sustainable world,” said Klaus Schwab, Founder and Executive Chairman of the World Economic Forum. The programme for this year’s annual meeting focuses on achieving maximum impact on the Forum’s platform for public-private cooperation across six core areas of activity: Ecology, Economy, Society, Industry, Technology and Geopolitics. More than 160 individual initiatives, each capable of delivering system-wide transformation, are active on the Forum platform. Significant advances in a number of these, especially in the fields of responsible business, the environment and social mobility, are expected to be confirmed during the meeting. Among the initiatives to be launched at the Annual Meeting is one that aims to plant 1 trillion trees over the next decade and to equip 1 billion people with the necessary skills in the age of the Fourth Industrial Revolution. More details on this and the others will be disclosed at the meeting. Nearly 3,000 leaders will

participate in this year’s Annual Meeting and they include Donald Trump, President of the United States of America ; Han Zheng, Vice-Premier of the People’s Republic of China; Angela Merkel, Federal Chancellor of Germany; Giuseppe Conte, Prime Minister of Italy; The Prince of Wales; Ursula von der Leyen, President of the European Commission; Pedro Sanchez, Prime Minister of Spain; Simonetta Sommaruga, President of the Swiss Confederation; Mohammad Ashraf Ghani, President of the Islamic Republic of Afghanistan; Sebastian Kurz, Federal Chancellor of Austria. Other confirmed world leaders heading to Davos are Ivan Duque, President of Colombia; Felix Tshisekedi, President of the Democratic Republic of the Congo; Lenin Moreno Garcés, President

of Ecuador; Sanna Marin, Prime Minister of Finland; Nana Addo Dankwa AkufoAddo, President of the Republic of Ghana; Kyriakos Mitsotakis, Prime Minister of Greece; Barham Salih, President of Iraq; Leo Varadkar, Taoiseach of Ireland; Omar Al Razzaz, Prime Minister of Jordan; Khaltmaagiin Battulga, President of Mongolia; Mark Rutte, Prime Minister of the Netherlands; Erna Solberg, Prime Minister of Norway; Imran Khan, Prime Minister of Pakistan; Mohammad Ibrahim Shtayyeh, Prime Minister of the Palestinian National Authority; Andrzej Duda, President of Poland; Maxim Oreshkin, Minister of Economic Development of the Russian Federation; Macky Sall, President of Senegal; Lee Hsien Loong, Prime Minister of Singapore; Kais Saied, President of Tunisia; Volodymyr Zelenskyy, President of Ukraine, Antonio Guterres, SecretaryGeneral, United Nations. They will be joined by more than 1,680 leaders from the private sector. Adding a new dimension this year is the Arts and Culture Festival. Running alongside the Annual Meeting, the Festival will feature a number of sessions and immersive art installations.

Business environment to practise more M&As going forward Gbemi Faminu


ollowing trends and activities in the economy and business environment, business experts project that going forward, mergers and acquisitions (M&A) deals will be on a continuous rise, as companies scramble to retain position in the market. A report from the Global Capital Confidence Barometer survey, compiled by Ernst & Young (EY), a professional services firm, says going forward, M&A will be on a continuous rise, especially as companies, will scramble for larger market shares as well as larger resources, It added that portfolio optimisation will be a key driver of M&A as companies continue to divest low-margin businesses to maximise profitability. “The manufacturing sector is an industry in transformation, driven by the need to become more efficient and the rapidly growing potential of digital technologies. AM players are expanding their revenue streams and the ways in which they meet rising customer expectations. Several manufacturing companies have resorted to megamergers to optimize economies of scale and cost efficiencies,” the report says. In Nigeria, many companies, especially in the manufacturing and banking sectors, are struggling to stay afloat due to the recurrent challenges inherent in the business environment as well as the economy. In their bid to survive, these companies merge with other companies and carry on with their activities. “Companies are clearly

looking to M&A to navigate current and potential barriers to growth. Indeed, dealmaking is often the fastest route to build the optionality that companies need to proactively respond to evolving challenges,” Steve Krouskos, Vice-Chair: Transaction at EY says in a public statement. Furthermore, in terms of technology, prevalent infrastructural challenges have hindered older companies from the quick adaptation of technological advancement forcing them to follow up with a slow pace while start-ups have a competitive edge on technology. As a result, companies are looking to M&A as the fastest routes to get the transitional capabilities that will augment and accelerate their own growth agendas and digital strategy. A report on Nigeria’s mergers and acquisition market released by Udo Udoma and Belo-Osagie, a corporate law firm, says the M&A and investment transaction structures have evolved to address possible exposure to current economic challenges. “M&A activity in specific sectors may be spurred by legal and regulatory policies targeting struggling businesses in certain sectors, such deals may create or lead to stronger entities emerging from on-going mergers, consolidations and restructuring initiatives aimed at buoying struggling businesses,” the report says. Data from Global Transactions Forecast report released by Baker McKenzie and Oxford Economics, a global law firm shows that M&A deals in 2017 amounted to $469.8 million in Nigeria and rose by 475 percent to $2.7 billion in 2018.

Nigerian reported to be involved in Ukrainian crash says he is alive IFEOMA OKEKE


Nig er ian rep or te d to be among the victims of the recent Ukrainian plane crash says he is alive. The alleged dead man, A d e y e y e O l a y i n k a B e rnard, whose picture was used on social media and some national dailies, said he was embarrassed and since his life and that of his family had ne ver been the same again, as people now look at them with strange faces. At a media briefing in L a g o s We d n e s d ay , B e rnard wore the same shirt on the picture used to confirm that he was the person in the fake news published. He explained that he now wore face caps to c ov e r h i s f a c e w h e n h e w a l k s o n t h e s t re e t b e cause he was being called ‘dead man walking’. According to Bernard, the picture that was used was taken on his birthday @Businessdayng

with his wife. So far, he had received many calls f ro m f r i e n d s a n d o t h e r family members wondering when he travelled out of the country and started working for Boeing as a trainee. He said his mother fainted when the picture was shown to her that the son had died in a plane crash. Femi Martins, a counsellor to Bernard, described the development as the height of irresponsible blogging and journalism, and must be condemned. The repor t was a national embarrassment for the fact that most of the captions of the fake publications had the name of the country, Martins said. Martins advised bloggers and media outfits saddled with the task of diss eminat ing in fo r mation to ensure due diligence by verifying stories at their disposal before disseminating such information to the public.

Thursday 16 January 2020





Thursday 16 January 2020


news Corrupt Immigration officers who flatter... Continued from page 4

was sure that he had fished out four illegal migrants who were supposedly in the bus, he walked up to the driver and the immigrants, and what ended their conversations was a bribe offer of N2,000, which he confidently collected and pocketed. As Jamiu sped away from the checkpoint, I asked him if he was aware of the implications of conniving with — and bribing — immigration officers to encourage illegal migration. “Am I the government?” he replied. “Am I the one to do the work of the government?” A Nigerien miraculously turns Nigerian No one could have thought that there was an extra Nigerien in the bus that conveyed us from Lagos to Sokoto during the November trip. Everybody’s thought was that there were only four ‘illegals’: Idrisa, Ismaila, Kamilu and Hamidu. But there was another: Ahmidu, a Nigerien claiming to be a Nigerian. He had already escaped six checkpoints of the Nigeria Immigration Service (NIS) without being found out. We left the Yauri immigration checkpoint and headed for Koko, another town in Kebbi. Along Koko-Bagudo Road, we came across yet another immigration checkpoint. The officer who stopped us had already collected N1,000 from the driver before asking us to “park; park now and let me check by myself”. Before the officer could utter a word, the identified four illegal migrants quickly raised their hands, to indicate that they were Nigeriens but had paid to the driver, who in turn paid the immigration officer on their behalf. “Hey, you! Who are you? Where are you from?” the officer fired at Ahmidu. “Come down now!” “I am from Kebbi,” Ahmidu answered. “Where in Kebbi?”

“Kalgo.” “Which area in Kalgo?” the officer probed further. There was silence. Ahmidu no longer had an answer and had gone dumb. “Where is your ID card?” the questioning continued. “I don’t have,” he said reluctantly. “Where are you going?” “I’m going to Niger, through Sokoto.” “But you said you’re from Kebbi,” the officer pressed further. “What are you now going to do in Niger?” Ahmidu stuttered, kept quiet for a few seconds, then muttered: “My mother is from Niger but my father is a Nigerian…” “Shut up, you liar!” the officer yelled. Other officers then joined the conversation. Everyone was already suspecting that Ahmidu wasn’t really a Nigerian. “Abi osiere ni; mo ro wipe won s’epe fun o?” the bus driver swore and cursed him in Yoruba. When the young man realised that he had been found out, he confessed he was indeed from Niger Republic. He threw himself to the ground, rolling from side to side to the sympathy of some of the Nigerian passengers. “Don’t beg for him? They’re not worth begging for,” one officer asserted angrily when some passengers started to beg on Ahmidu’s behalf. “Who knows if this idiot is a Boko Haram member? If you were the one in their country, in this position, you are in trouble. They don’t take sh*t over there.” To the frustration of us all, the Nigerien was detained for over an hour. We couldn’t journey on without him, so, technically, he had held the rest of us to ransom. The officers searched him, but not thoroughly. In the end, for lying to be Nigerian, he was asked to pay N1,000, which he did amid sobs before promptly joining us for continuation of the journey. ‘Help, please help; my

Stranded Illegal migrants on the highway

Facts About Immigration Service Highway Corruption


Going by these calculations, therefore, the seven bribe-taking Immigration checkpoints confirmed by BusinessDay earn no less than N10.08million as bribes in 12 months.



Therefore, in one year, each immigration checkpoint receives at least

Therefore, in 24 hours, each Immigration checkpoint receives at least N120,000 in bribes collected from illegal immigrants on the highway from Lagos to Sokoto

In every one hour, at least five bus drivers pay bribes to Immigration o cers at their checkpoints to set illegal immigrants free

N1.44million in bribes


taken from illegal immigrants



Infographics:David Ibemere

Source: BusinessDay’s Investigation

brother is dying!’ Only a man with no blood running through his veins would ignore the wails of Zibo, Zakariyau’s younger brother. Our vehicle had developed some technical problems along the Koko-Jega Road and the driver had vanished from the scene to search for a repairer. We were stranded. But among the stranded passengers was Zibo, dying of a mysterious stomach upset. No one seemed to have the ability to save the life of the illegal migrant, who would still have to travel more than a thousand kilometres to get to his country, Niger. This happened on December 4, during my second trip to Sokoto from Lagos. It was sunny in the terrain; the time was 12:15pm. As minutes passed, Zibo held his stomach tightly, rolling on the ground by the roadside. He cried and screamed heavily for help. How on earth do we cure an undiagnosed ailment without any forewarning? I had pitifully thought. On the advice of a passenger, Zakariyau, the brother of the sick boy, had run to purchase some tins of milk but his efforts were fruitless. The condition got worse. “Help, please help; my brother is dying!” he wailed. I personally thought the young man had passed away, until other passengers confirmed he was still breathing; he had only lost consciousness. The driver resurfaced after some two hours, with a mechanic; he uttered no word of apology until the repair was done and the journey resumed. Zakariyau spoke to me about his plight as an illegal immigrant in Nigeria. He told me how he had been deceived to leave Niger Republic for Nigeria to “come and work to get big money in Lagos”, only for him to end up as a jack of all trades in the state. “Na market we dey carry for Idumota,” he said, when asked about his business in Lagos. He lamented the hike in bribes being paid to the Immigration officers these days. “The last time I travelled, we paid bribes of N1,000 as a group at each checkpoint,” he said. This N2,000 bribe

At least N1,000 is paid as bribe by a bus driver at an Immigration checkpoint

they’re suddenly asking for, I don’t know why,” he said in the little English language he could speak. Illegal migrants kick against illegal fees A soft protest erupted in the bus when we moved towards Jega, from Koko. The driver had asked the illegal migrants to contribute an extra N200 each to settle other Immigration officers at Jega and Sokoto, and particularly to get his own commission of the money — for bribing the officers on their behalf. Zakariyau was the first to kick against the idea. “See now, one person N2,000; This one who is sick and I will pay N4,000,” he lamented, stressing the health condition of his brother who coughed in the bus intermittently. “These people think once you’re coming from Lagos, you already looted all the banks in the state.” What followed Zakariyau’s lamentation was a wave of uproar from other illegal migrants. Most of them said they lacked the funds to travel back to their homes let alone pay an extra charge of N200. “These people are merci-

less,” Ismaila, one of them, said. The driver taunted the illegal migrants, saying: “These bastards do not know they are exhibits. Do they expect me to pay the Immigration men for them? Or should I not get my own share of the money to at least buy paracetamol after all the stress I have passed through?” “I will drop all of you now!” he threatened. Following the threats, the illegal migrants had no other choice than to cooperate with the driver. They raised his money, and the journey continued. ‘Permission of illegal immigrants is illegal’ Saddled with the responsibility of implementing the country’s diplomatic policies, among other functions, the Federal Ministry of Foreign Affairs condemned the granting of thoroughfare to illegal migrants by NIS officials. Ferdinand Nwoye, spokesman of the Ministry, told BusinessDay that illegal immigrants should not be condoned or permitted in the country. “Illegal immigrants are not allowed all over the world,” he said. “While you use the word

Bribe-seeking Army and Immigration officers

Zibo sleeps off after wailing over myterious stomach pain


‘illegal’, it should be noted that migration is something that should be done according to the specified laws of both the immigrating country and the emigrating country.” Highlighting some of the implications of illegal immigration, he said: “Illegal immigrants are found all over the world and there are so many implications. “Once you have a lot of immigrants that are not documented, statistically, it will be very difficult to plan, because you will not know the actual number of people that are residents in your country. “Again, illegal immigrants, when they come into a country for a job that a native of the land will do for N10, they can do it for like N2 because they are desperate. They are just looking for survival. So there would be pressure and there would be unhealthy competition.” On the security implications of illegal immigration, he said: “When someone is coming in illegally, you don’t know if he’s coming with arms and weapons. As you can see, Nigeria closed its borders. According to the statement coming from government offices, it has reduced the number of light arms and weapons that are coming into the country, which in turn gives the relative peace we have for some time now.” When asked if he was aware that some Immigration officers were sabotaging the government’s efforts to eradicate illegal immigration by permitting and extorting illegal migrants on Nigeria’s highways, he said: “permission of illegal immigrants is also illegal”. He added, though, that with the Economic Community of West African States (ECOWAS) protocol of free movement, there was a level of freedom to be enjoyed by migrants who possess ECOWAS passport. “That is left for the immigration officer, because I know that part of their duties is to check such practices and I know they should be doing that,” he said. “But if there is any lapse discovered somehow or somewhere or the other, I think it should be directed to them. At least the authorities should now have a thing to say.” Army, police officers caught in the act Like the bribe-and-pass immigration officers, Nigerian soldiers and policemen are other racketeers conspiring with drivers to smuggle illegal immigrants in and out of Nigeria. Away from the corruptionthriving checkpoints of the Immigration patrol officers on the highways, we passed through a number of checkpoints manned by soldiers and policemen without any enforcement of the law in particular. “Bring that phone!” a soldier had ordered me as we

Continues on page 35

Thursday 16 January 2020



news Poor infrastructure impedes passenger... Continued from page 1

chines resulting in manual

screening; inadequate aircraft boarding gates; inadequate aircraft parking areas; inadequate ground handling equipment or facilities, and absence of taxiways or sufficient links from aprons to runways. Two weeks ago, a Qatar Airways Boeing 787 filled with holidaymakers and school children returning to Nigeria was unable to find a parking spot at MMIA after a ninehour trip from Doha, Qatar. Airport officials claimed the airport was congested but experts said the situation spoke of the rot that had been the lot of Nigeria’s busiest international airport, and deflated talks of becoming a regional air hub. Ado Sanusi, the CEO of Aero Contractors, explains that Nigeria has flying public and can still cultivate more and grow passenger traffic to 10 million per annum if it has the right infrastructure. “We must also make sure we have the infrastructure so that when people enter the airport they will be happy with what they see. We must also have the confidence of the flying public so that they will feel comfortable flying our airlines. With all these in place, the introduction of new airplanes will definitely allow growth in the market,” Sanusi states. Further checks show that many of the airports in Nigeria do not have runway lights and navigational landing aids, meaning such airports are only open between 7am and 6pm daily. “Airlines can’t fully utilise their airplanes for 24-hour operations. No airplane or factory machine can be profitable only from 7am to 6pm daylight operations,” Nogie Meggison, chairman, Airline Operators of Nigeria (AON), says. Meggison therefore calls for the provision of airfield lighting and navigational landing aids at all airports in Nigeria to reduce delays and cancellations and allow for a 24-hour operation and better utilisation of airplanes. According to the latest record released by the Consumer Protection Department of the Nigerian Civil Aviation Authority (NCAA), domestic airlines operating in Nigeria recorded 7,926 cases of delayed flights in the first quarter of last year (between January and March 2019) alone. This represents more than 50 per-

cent of the flights within the period under review. These data confirm that flights hardly take off at scheduled time in Nigeria, and more worrisome is that all the aforementioned airlines operated an average number of four aircraft or less during this period, except Air Peace, which operated about 18 aircraft on domestic routes and recorded about 90 flights a day. In Nigeria, passengers spend unduly long time at security screening points because of insufficient number of X-ray machines. Therefore, passengers are forced to queue at security screening points, especially at peak hours. In other climes, it takes between 30 seconds and two minutes to get screened, but in Nigerian airports it takes between five and 15 minutes to get screened, depending on the number of passengers waiting to be checked. For example, Air Peace and Arik Air face a lot of delay processing passengers at the General Aviation Terminal (GAT) of the Murtala Muhammed International Airport, Lagos, because there is only one functional X-ray machine at any point in time, and hundreds of passengers going to different destinations during the morning rush hours must pass through one functional X-ray machine at each of the terminals at the GAT. John Ojikutu, member of aviation industry think tank group, Aviation Round Table (ART) and chief executive of Centurion Securities, lists infrastructure gaps at the airport to include inadequate skilled manpower to man most of these facilities, as system can cause delays, especially the passengers screening checkpoints where the International Civil Aviation Organisation (ICAO) recommended standard is at least five, but nearly all Nigerian airports have two or three persons. Other factors, he mentions, include, “Airspace management; inadequate and inexperience air traffic controllers, particularly for aerodromes, and approach control can cause delays if the traffic volume is beyondthecapacityandcapability of the controllers, especially if there is no supervisors that can always intervene; inadequate and inefficient landing aids, poor communication both at terminal and en route, and poor weatheratdestinations,enroute and at alternative airports.”

Corrupt Immigration officers who flatter... Continued from page 34

were flagged down at a military checkpoint at the YauriKoko Road in Shanga local Government Area of Kebbi State. “Who are you calling? Are you a Boko Haram terrorist?” he asked. I submitted the phone to him but he didn’t check anything; he rather stretched his hand through the driver’s window and collected a N200 note. “You’re welcome,” he

said, as he received the money and gave the phone he had seized to the driver, who returned it to me. The next checkpoint, some yards away, was also supposedly monitored by soldiers. One of the officers quickly welcomed the passengers as we stopped at the checkpoint, and the driver, as usual, gave a N200 note to the soldier and then collected N100 change, bidding him farewell. We drove speedily still on

L-R: Isyaku Tilde, acting executive commissioner of operations, Securities and Exchange Commission (SEC); Mary Uduk, acting director-general of SEC, and Bolaji Owasanoye, chairman, Independent Corrupt Practices and other Related Offences Commission (ICPC), during a meeting between SEC and ICPC, in Abuja. Pic by Tunde Adeniyi  

Supreme Court judgment on Imo... Hope Uzodinma, the candidate of the All Progressives Congress (APC), received his Certificate of Return from the Independent National Electoral Commission (INEC), as the Supreme Court ordered in declaring him the real winner of the March 2019 gubernatorial poll in Imo. That ended the tenure of Ihedioha, the candidate of the People’s Democratic Party (PDP), after just eight months. The 7-man Supreme Court judges in a unanimous judgment read by Justice Kudirat Kekere-Ekun on Tuesday, declared that Uzodinma was validly elected even when official results declared by the INEC had placed him in the fourth position. In the landmark judgment the apex court agreed that results in 388 polling units were unlawfully excluded during the collation of the final governorship election result in Imo. In upholding Uzodinma’s appeal, the Supreme Court agreed that 236,600 votes in his favour were omitted in the 388 polling units. When added to his initial result of 96,458, it gives a total of 333,058, helping Uzodinma leapfrog Ihedioha (with 283,404 votes), Uche Nwosu (with 190,364 votes) and Ifeanyi Araraume (with 114,676 votes) and go from fourth to first.

However, when the results tendered by Uzodinma, which the Supreme Court upheld, are accounted for, total votes at the election go up to 950,926 which is the sum of 236,600 and the 714,326 votes recorded by INEC. In Owerri, the Imo State capital, the verdict has been felt fully. On Tuesday night as the pronouncement came from Abuja, businesses were shut abruptly. Hilary Eziefula, an Owerri-based accountant, noted that Owerri Municipal, which is always a beehive of activities, especially in the night, was like a ghost town, that Tuesday night. Eziefula said people were angry because they believe that the change of guards would drag the state backwards. The feeling of mourning continued the day after the verdict, as Imonites gathered in groups, blaming the Presidency and the judiciary for the fate that befell Ihedioha – and themselves. Nkwazema Tony Opara, a prominent businessman in the state, described the Supreme Court judgment as a rape of democracy. “Imo has been plunged into another dark era, poverty and another era of unrestricted property looting,” he said. Similarly, Bernard Diala, a community leader from Obiagwu in Ngor/Okpala Local Government Area of

the state, said another era of “darkness has enveloped” the State and that Imo would be worse off now economically. “Under 8 months of Ihedioha, civil servants and lowincome masses of Imo State got their full salaries,” said Emeka Njoku, a resident of the capital. Katch Ononuju public affair analyst, described it as a “state capture.” He wondered how the Supreme Court came about the number of accredited voters with which it declared Hope Uzodinma winner when recorded number of accredited voters by INEC was less. Judgment painful but legally correct verdict Ikonne However, an Abuja-based prominent legal luminary, Kenneth Ikonne, said the Supreme Court judgment, though very painful, was legally correct. Ikonne described the judgment as a perplexing paradox, stressing that Uzodinma might not have won the 2019 Imo State governorship election, yet the Supreme Court, on the facts, was right in declaring him the winner of that election in law. According to Ikonne, the error was not the Supreme Court’s, but that of Governor Emeka Ihedioha’s legal team, and it was a crucially fatal error. “What happened was this: during the governorship election in Imo State, apparently concocted results, perhaps

the same road and arrived at yet another military checkpoint, where a soldier was sighted being backhanded by a truck driver who loaded a horde of people, suspected to be illegals. After passing the said truck, he moved closer to us to collect another N100 from the driver. On a spree movement towards Koko, we also encountered a number of policemen hanging their rifles on their shoulders but only to collect N100 notes from passing drivers. Like other drivers, the

man who drove us didn’t pass any police checkpoint, especially on this road, without parting with cash to woo the policemen and other security operatives. Two Nigerian soldiers and a policeman, who were collecting their own shares of the highway ‘illegal tenders’, were filmed in the act as our vehicle drove on the road. In a few hours, we arrived at Jega in Kebbi State, and before heading forth to Sokoto, just some 15 kilometres after Jega junc-

tion, we met yet another Immigration officer who, this time, collected N1,000 for 10 illegal migrants. As if that was not enough, at another immigration checkpoint in Sokoto, N2,000 was given in exchange for freeing the illegal immigrants and allowing us move on without much hindrances. At 2:32pm, we entered Sokoto city against all odds, free to individually proceed with our journeys to wherever, including the Republic of Niger.

Continued from page 1


not having any basis whatsoever in reality, but signed by INEC presiding officers, were turned in from more than 350 polling units, giving Hope Uzodinma of the APC an incredibly unassailable lead. “When those results were transmitted to the wards collation centres, the collation officers, who had no power in law to cancel or reject them, rejected the said polling units results, and refused to collate them, thereby effectively excluding them from the total tally of the governorship result that was eventually declared by the Returning Officer. “In the aftermath of the said exclusion, the Independent National Electoral Commission declared Governor Ihedioha the winner of the election. “The exclusion of the results of those polling units was the fulcrum of the petition presented at the Tribunal by Hope Uzodinma. “Without a cross petition praying for the nullification of those results, the law forbade Governor Ihedioha as respondent from raising the issue of the alleged serial corrupt practices and irregularities marring the said results, in a mere statement of defence; that was a new issue not nominated by Uzodinma as petitioner. “Ihedioha, being a Respondent, could only have competently raised them via a cross petition, being a new issue not nominated by Uzodinma, the petitioner. “Tragically, Ihedioha’s legal team forgot to include the pivotal cross petition. And in the absence of a cross petition, the Supreme Court was right in law, painfully though it may seem, to rely on the presumption of regularity and correctness enshrined by both the Electoral Act and Evidence Act in favour of the said results, and to reckon with them and add them up to the final result, since Ihedioha’s legal team had woefully failed to effectively attack the results and rebut that presumption.

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Thursday 16 January 2020



Crew kidnappings in Gulf of Guinea grew by 50% in 2019 amid global drop in piracy – IMB AMAKA ANAGOR-EWUZIE


espite decline in the number of piracy incident recorded in 2019, there was an alarming increase in crew kidnappings across the Gulf of Guinea, according to International Chamber of Commerce’s International Maritime Bureau’s (IMB) annual piracy report. The report revealed that the number of crew kidnapped in the Gulf of Guinea increased by more than 50 percent from 78 recorded in 2018 to 121 in 2019. “This equates to over 90 percent of global kidnappings reported at sea with 64 crew members kidnapped across six separate incidents in the last quarter of 2019 alone. The Gulf of Guinea region accounted for 64 incidents including all four vessel hijackings that occurred

in 2019, as well as 10 out of 11 vessels that were reported to have come under fire,” the IMB stated. According to IMB report, there was decline in number of global piracy incident as about 162 incidents of piracy and armed robbery against ships worldwide was recorded in 2019 as against to 201 reported incidents in 2018. “The incidents include four hijacked vessels, 11 vessels fired upon, 17 attempted attacks, and 130 vessels boarded, according to the latest IMB figures. While the overall decline in piracy incidents was an encouraging development as vessels remained at risk in several regions, especially the Gulf of Guinea,” IMB report stated. “We remain concerned that this region has recorded an unprecedented rise in crew

kidnaps. These latest statistics confirmed the importance of increased information exchange and coordination between vessels, reporting and response agencies in the Gulf of Guinea Region,” stated Michael Howlett, director of the ICC IMB. According to him, “Without the necessary reporting structures in place, we will be unable to accurately highlight the high-risk areas for seafarers and address the rise of piracy incidents in these persistently vulnerable waters.” IMB however urged all shipmasters and owners to report all actual, attempted and suspected piracy and armed robbery incidents to the IMB PRC. “This first step in the response chain is vital to ensuring that adequate resources are allocated by authorities to tackle this crime.”

Government to charge 7.5% VAT on transactions before presidential assent 7.5% VAT is factored into cost of transaction Felix Omohomhion


ove r n m e nt w i l l have to factor the new 7.5% Value Added Tax (VAT) into the cost of transactions procured but not paid for before the new finance bill was signed into law by President Buhari last Monday. The Accountant-General of the Federation, Ahmed Idris, who announced this during a chat with journalists on Wednesday in Abuja, said the new VAT rate is already being implemented in retrospect. He said since the bill

has become an Act, it was important for his office to obey the law which now also applies to all unpaid goods and services before the Monday signing. Idris said in line with the new law, he had to halt the payment of a certain amount on Tuesday since the transaction was processed based on the initial five per cent VAT. “You must charge VAT at the point of payment and that is how we have been doing that. “I pay all capital payment over and above N250 million, I pay them for all agencies, so it is when I come to pay that I see

whether the calculation of VAT and withholding tax are correct and if they are correct whether they are deducted correctly. “At the same time I pay a contractor, I pay for VAT and withholding tax. That has been how it is done all through, even when we were dealing on analog basis. “If you are talking of VAT in a super market that is how it’s done. If you are talking of government there is VAT that must be paid, there is withholding tax and we pay at the same time we are paying the service provider,” the AGF explained.

How to sustain Nigeria’s fragile unity - Sanwo-Olu JOSHUA BASSEY


agos State governor, Babajide Sanwo-Olu, says the best way to keep Nigeria as one entity is for the citizens to make sacrifices towards its unity. He said every Nigerian, irrespective of political leaning or creed, must therefore desist from actions capable of dividing the country along its fault lines. He spoke on Wednesday after laying wreath at the Independence Arcade, Tafawa Balewa Square (TBS), Lagos, to commemorate the 2020 armed forces Remembrance Day. The Armed Forces Remembrance Day is marked January 15 of every year. It is held to honour soldiers and officers who died in the course of carrying out their constitutional duty. According to Sanwo-Olu, the citizens have a responsibility to keep Nigeria on the path of sustainable unity. “This is the best way to honour the patriotism and bravery of men of the armed forces who died in the course of

securing the country,” he said. He observed that labour of the fallen heroes would not be in vain if citizens remained resolute in defending the unity of Nigeria. “Today’s event is very significant, because it is being held in honour those who laid down their lives to defend our country and keep it united. We will continue to celebrate their bravery and appreciate them for their efforts. As a nation, we must continue to ensure that all their efforts did not go unnoticed. “The event is also an evidence for brave men and women that are currently serving in the armed forces, that government will certainly not forget their service to our fatherland. Therefore, to ensure that our fallen soldiers did not labour in vain, we must make sacrifice for peace and unity of this country.” The governor also used the occasion to restate commitment to work with security agencies to strengthen professionalism in the discharge of their constitutional duties.

FOU Customs intercepts contraband worth over N67m in one week AMAKA ANAGOR-EWUZIE


he Federal Operations Unit (FOU), Zone A of the Nigeria Customs Service said on Wednesday that it intercepted various kind of contraband worth over N67 million in one week from January 7 to 14, 2020. A statement signed by Jerry Attah, public relations officer of the Unit, stated that barely one week after Usman Yahaya, resumes as the acting Customs Area Controller of the Unit, has continued to live up to his statutory responsibilities especially in the area of anti-smuggling operations. “His quest for outstanding performance using credible intelligence has begun to yield positive results with

the interception of 2,065 jerrycans of vegetable oil 25liters each; 1,185 bags of 50kg foreign parboiled rice; 1,500 jerrycans (25lts) of diesel; all with a duty paid value of 67,362,500.00,” Attah stated. According to him, the feat was as a result of series of meetings held with the unit’s sectional heads, team/patrol leaders where he unveiled the management’s mandate which include blockage of all revenue leakages, trade facilitation and intensification of anti-smuggling operations at various entry points; seaports, land borders, and airport within its jurisdiction in the South-West zone. Yahaya warned smugglers of the danger that lies ahead for them if they do not engage in legitimate trade.

L-R: Adaeze Ume, group head, consumer banking. Access Bank plc; Rob Giles, head, retail products capabilities and insights, Access Bank plc; Ibebuike Clara, winner; Busola Ogundipo, woman banking representative, and Njideka Esomeju, regional sales director, Lagos 1, at the the Diamondxtra prize presentation ceremony 2020. Pic by Pius Okeosisi

ECOWAS urged to focus on convergence criteria as they meet on Eco controversy Onyinye Nwachukwu, Abuja


s member countries of AnglophoneEconomic Community of West African States (ECOWAS) meet Thursday to possibly take a position on the controversial Eco currency project, experts say top on their discussions should be how to quickly meet the critical convergence criteria precedence to forming a common economic bloc. Experts premise their advice on huge criticisms following recent decision by eight Frenchspeaking ECOWAS members to dump the CFA franc and adopt the Eco as their common currency - seemingly hijacking over 20 years single currency project of their English speaking neighbours. “To me, they have given themselves the project to create a single currency and adopted a set of convergence criteria and those are paramount. “I advise they look at these

criteria again and see how they can encourage their member states to accelerate convergence and to set the deadline to meet the criteria. “They should develop a strategy by which they can reach those conditions in good time and form a single currency,” Obadiah Mailafia, an economic analyst and former deputy governor at the Central Bank of Nigeria (CBN), advised. ECOWAS member countries had initially agreed to adopt a single currency –proposed as the Eco in 2020. But Zainab Ahmed, Nigeria’s minister of finance, budget and national planning, said last month that the project was no longer feasible this year since member countries were yet to meet some agreed convergence criteria – including a set of four primary and six secondary convergence criteria critical before a common monetary integration happen in the sub-region. The primary criteria include; Budget Deficit/GDP ratio (ex-

cluding grants) of less or equal to 4 percent; Inflation rate of less or equal to 5 percent; Central Bank Financing of Budget Deficit of less or equal to 10 percent of previous year’s Tax Revenue, as well as Gross External Reserves of greater than or equal to 6 months of imports cover. The secondary criteria include; Prohibition of new arrears and liquidation of all outstanding ones; Tax Receipts/GDP ratio of greater or equal to 20 per cent; Salary Mass/Total Tax Receipts ratio of greater or equal to35 per cent; Public Investments financed from internal resources/Tax Receipts ratio of greater or equal to 20 percent; Positive Real Interest Rates; and Real Exchange Rate Stability. Only Togo met all the criteria in the last two years. However, there have been fears that the early adoption by the French-speaking ECOWAS countries was simply hijacking the process and that France was planning to have control over the new currency. @Businessdayng

The Nigerian government said it was reviewing the development, though critics expected Nigeria to have come out forcefully to take a position on the development, a response that elicited huge criticism on grounds that Nigeria has been championing the regional economic integration effort. “As far as I am concerned, the West Africa Eco is an Eco with a small E, because part of the arrangement was not that CFA will now be renamed Eco and then everybody will come and join if they so wish under the supervision of France. “That is an insult,” he submitted, wondering how France could be part of the West Africa project since they were not initially part of the plan. “Yes, we welcome the reform of the CFA and the dismantling of some of the colonial tracking of the CFA,” Mailafia said, emphasising that it was wrong for the Francophone bloc to have called their transformed currency Eco.

Thursday 16 January 2020





World Business Newspaper MAX SEDDON


ussian prime minister Dmitry Medvedev has resigned hours after Vladimir Putin said he planned a referendum to approve major changes to the constitution, in a sign that the president intends to extend his 20year rule in a new capacity when his term of office expires in 2024. In a move that paves the way for the biggest political shake-up in Russia in a decade, Mr Medvedev stepped down along with the entire cabinet. Mr Putin said his prime minister would take up a newly created position as deputy head of the Kremlin’s security council, and asked the government to remain in post until a new administration was appointed. Mr Medvedev said the cabinet wanted to “give our country’s president the chance to make all the necessary decisions” regarding the constitutional change. The changes came after Mr Putin said in his annual state of the nation address that he would put a raft of constitutional changes to a “people’s vote”. The long-rumoured steps would weaken presidential power to the benefit of parliament, the prime minister and the State Council, an advisory body, said Mr Putin. The changes envisaged by Mr Putin include limiting future presidents to two terms in office; allowing the Duma, the lower house of parliament, to appoint the prime minister and the cabinet; and giving the upper house the power to confirm the heads of Russia’s powerful security services and judges. Immediately after Mr Putin’s announcement, the head of Russia’s election commission said

Russian PM Medvedev quits as Putin plans vote to change

Shake-up suggests president plans to extend his 20-year rule in a new capacity

Dmitry Medvedev, left, with Russian president Vladimir Putin on Wednesday © Dmitry Astakhov/AFP/Getty

she was prepared to hold the referendum “at any moment” as soon as the changes were ready. “That’s our job,” Ella Pamfilova told Interfax. Mr Putin, 67, has long been coy about whether he intends to stay on after 2024, when he is legally obliged to step down as president. But the decision appeared to confirm longtime speculation that he intends to either become prime minister for a second time or head a revamped State Council as a supreme leader figure in the model of China’s Deng Xiaoping. Some analysts had also speculated he could change the constitution to run for a third straight

term or become head of a proposed joint state with neighbouring Belarus. The Kremlin has struggled with boosting Mr Putin’s flagging approval ratings, hovering near record lows, amid a stagnant economy where real incomes have fallen for half a decade. During Wednesday’s address Mr Putin made a concession to Russians facing hard times by announcing major social spending on child welfare, public sector salaries and free school lunches. Anton Siluanov, finance minister, said the promises would cost Rbs400bn to Rbs500bn ($6.5bn to $8.1bn), close to 4 per cent of

Russia’s gross domestic product. Mr Putin first publicly floated the constitutional changes in December at his heavily choreographed annual press conference, when he suggested banning future leaders from following his example and ruling for two terms. After serving his first two terms, Mr Putin installed Mr Medvedev as president from 2008 to 2012, then swapped jobs with him in a move known as the “castling”, after the chess move. “The transition of power is certainly underway, and Medvedev has been removed from the transition conversation,” said Tatiana Stanovaya, founder of Russian

political analysis firm R. Politik. “Everyone has been sick of Medvedev for ages. He should have resigned after the [2018] presidential elections, but Putin needed to resolve who his replacement would be and where he would put Medvedev. Now Putin has decided what to do with his future and they are going their separate ways.” In his speech, Mr Putin appeared to confirm that Russia would continue the authoritarian and confrontational stance with the west that began after his return to the Kremlin. Future presidents will be required to have lived in Russia for the preceding 25 years and never held a foreign passport or residence permit. Russia’s constitution will also take precedence over international law, meaning Moscow could spurn rulings from courts including the European Court of Human Rights. With heightened fears of a renewed arms race after the US withdrew from a key cold war-era missile ban treaty last year, and another agreement signed during Mr Medvedev’s presidency set to expire in December, Mr Putin also said Russia was confident of its superior weaponry. “For the first time in all history of nuclear weaponry, including the Soviet period, we aren’t playing catch-up with anyone. Other states have yet to create the weapons that Russia already has,” he said.

US and China prepare to seal ‘phase one’ trade deal Hard-fought agreement brings fragile truce but tough problems remain unresolved JAMES POLITI


he US and China are set to sign a hard-fought agreement to halt their trade war, ushering in a fragile truce and a testy period of reconciliation between the world’s two largest economies after months of confrontation that cast a cloud over global growth. The “phase one” deal, to be formalised on Wednesday at a White House ceremony scheduled for 11.30am, is the result of a limited compromise between Washington and Beijing at a time when both countries feared the economic and financial fallout from escalating tensions. It commits China to making $200bn in additional purchases of US goods, including farm products, and other pledges on currency and intellectual property, in exchange for a small rollback in some tariffs and an indefinite hold on further punitive measures out of Washington. The agreement, however, falls far short of a lasting peace to end a trade

The ‘phase one’ US-China trade agreement leaves in place the vast bulk of tariffs imposed on $360bn of Chinese products by US president Donald Trump © AP

war that has lasted nearly two years, bruising trust in both countries and disrupting businesses on both sides of the Pacific. It leaves in place the vast bulk of tariffs imposed on $360bn of Chinese products by President Donald Trump — and yields few Chinese concessions on key aspects of its economic model that have most frustrated the US, from the use of subsidies to rampant cybertheft.

It is also unlikely to halt the deeper strategic rivalry between the two powers, which has accelerated during Mr Trump’s presidency on military matters and primacy in advanced technologies from 5G communications to artificial intelligence. “The signing of this truce, while welcome, does not obviate the reality that both countries view one another in increasingly antagonistic terms,”

said Ali Wyne, a policy analyst at the Rand Corporation, a think-tank in Washington. “Washington regards Beijing’s economic ascendance as a threat to its national security and that of its allies and partners; Beijing, meanwhile, considers the acceleration of indigenous innovation and the cultivation of alternative export markets to be existential imperatives.” The agreement will offer some respite to investors in financial markets, which have see-sawed, at times dramatically, as the negotiations between the two capitals have unfolded. However, US and Chinese officials have offered few clear indications on the timing and prospects for a second phase of negotiations, which could bring about some greater certainty for businesses with supply chains, production and consumers in both countries. Beijing has been looking for a more rapid phase-out of levies after Wednesday’s deal, but the US has resisted, in a bid to ensure that China respects its commitments. Mr Trump has suggested there could be @Businessdayng

no agreement on the second tranche of talks until after the 2020 November presidential election. “From a market perspective [the deal] removes some important clouds, but from a deeper macroeconomic perspective I would be doubtful this is enough for firms to restart investment, to reopen their wallet and start spending. They will wait for something more definitive,” said Nathan Sheets, chief economist at New Jersey-based PGIM Fixed Income. The deal has already been touted by Mr Trump as a political victory, having promised to take a tough line on China throughout his presidency and during the 2016 campaign. But it is unclear whether the bet will pay off during his campaign for a second term. Mr Trump has exposed himself to criticism that the trade war was economically reckless, inflicting some damage on states reliant on farming and manufacturing even if it did not lead to a full-blown recession. Democratic critics are likely to stress that all of Mr Trump’s bluster yielded few big Chinese concessions.


Thursday 16 January 2020




US prosecutors recommend no jail time for ‘flash crash’ trader Navinder Singh Sarao’s ‘extraordinary co-operation’ cited ahead of sentencing KADHIM SHUBBER


S prosecutors have recommended that Navinder Singh Sarao, the UK trader linked to the 2010 “flash crash”, should get no jail time, citing his “extraordinary co-operation” in their crackdown on market abuse. Mr Sarao pleaded guilty in 2016 to US “spoofing” charges related to his trading in E-Mini S&P 500 futures over five years. Spoofing involves placing and withdrawing bids in the market at a rapid pace to manipulate prices. The case drew attention as Mr Sarao unsuccessfully fought extradition from the UK to the US and was controversially linked to the 2010 flash crash, when the US stock market suddenly plunged in value before quickly recovering. “The defendant’s co-operation has spanned years — from November 2016 through at least April 2019 — and has been extraordinarily timely, complete, truthful, and helpful to the government,” prosecutors wrote in a memo filed late

on Tuesday, ahead of Mr Sarao’s sentencing this month. Mr Sarao was arrested in the UK in 2015 and spent four months in jail before being bailed ahead of his extradition. His case was part of a US crackdown on spoofing, which was first made illegal in 2010 by the post-crisis Dodd-Frank reforms. The 41-year-old, dubbed by the British press as the “Hound of Hounslow”, had built a lucrative trading career off S&P 500 E-Mini futures from his parents’ home in west London. His spoofing techniques included using software to place orders he did not intend to fulfil near the prevailing market price and constantly moving them as the market moved, ensuring they would never be executed. Prosecutors said he made $70m in profits, $12.8m of that unlawfully, but lost a large chunk of the money when he was defrauded by several fake investment schemes. Despite the huge sums of money, Mr Sarao did not live “anything approaching an extravagant lifestyle”, prosecutors said, noting that his only significant purchase was a £5,000 second-hand Volkswagen.

Navinder Singh Sarao unsuccessfully fought his extradition from the UK to face the US charges © Reuters

He has forfeited $7.6m, “his only remaining trading profits”, according to the government. His co-operation included testifying last year in the case of Jitesh Thakkar, who was accused of aiding Mr Sarao’s spoofing by building custom software. Mr Thakkar was ultimately acquitted after the trial

ended with a hung jury. Mr Sarao, who has autism, continues to live with his parents and his primary source of income is $336 a month in government benefits, his lawyer, Roger Burlingame, said in his own sentencing memo. “Nav is profoundly remorseful

for what he did,” Mr Burlingame wrote. “Nav’s fate is knowing that he unthinkingly hurt innocent victims, caused enormous pain to his family, and threw his life away for, essentially, nothing — to get the high score on what was, to him, nothing more than another video game.”

Tullow will struggle for capital in a decarbonising world

Oil explorer has little chance of securing transformational transaction at a good price MATTHEW VINCENT


limate change is different,” wrote Larry Fink this week. “Companies, investors . . . must prepare for a significant reallocation of capital,” said the chief executive of $7tn investor BlackRock. He couldn’t have been referring to fossil-fuel explorer Tullow Oil, though. Investors have already reallocated so much capital from its shares that its market value fell 70 per cent, or £1.4bn, last month. And the company is already reallocating — and reducing — its own capital expenditure, after writing down £1.5bn of producing assets, exploration costs and reserves on Wednesday. Analysts at Citigroup said the writedown — while only an accounting measure, and half down to lower oil price assumptions — “highlights the disappointing record of capital allocation over the past few years”. For those investors who still hold equity in the FTSE 250 explorer, then, the question is whether a further reallocation of their own capital would be advisable this year. December’s changes to pro-

duction guidance suggests it would. Tullow admitted that producing almost a third less oil in 2020 — just 70,000 to 80,000 barrels of oil equivalent a day, down from nearer 100,000 — could neither sustain the dividend, nor the careers of chief executive Paul McDade and exploration head Angus McCoss. It was not its first

admission of over-optimism, either: it was the fourth cut to fullyear guidance that shareholders had endured, leading analysts at broker Stifel to conclude “the market has completely lost trust in the company”. No wonder: the market is being paid no dividend while it waits in the hope that an oil company’s shares can be re-

rated in a decarbonising world. BlackRock might still take this risk — it remains Tullow’s fifthlargest shareholder — but few others would. However, Wednesday’s update suggests some shareholders might not want to reallocate their capital just yet. Tullow — under its now executive chair

Dorothy Thompson, former boss of biomass power group Drax — said it is reviewing all aspects of its operations and cost base, to bring overheads in line with lower production, and keep those 70,000-odd barrels just as profitable at lower prices. It was confident enough to reiterate current year production, reserves and cash flow. It also indicated that it would look at whether it can monetise oil assets more quickly by selling for cash rather than going into production. Previously, some had speculated about rights issue plans — which the company denied — or a deal for all of the business. But what are the chances of any transformational transaction, at a good price, in the current climate? Even before this week, market sentiment had been turning against oil companies, amid concerns over demand and sustainability. Now, according to Mr Fink, “as we pursue the path to a low-carbon world, investors are asking how they should modify their portfolios”. For many, buying into Tullow’s assets is unlikely to be one of those modifications.

Thursday 16 January 2020





US tech backlash forces China to be more self-sufficient Beijing embracing open-source collaboration and wooing scientists from overseas YUAN YANG


he acrimony between China and the US over technology transfers has created plenty of losers during the past year. There are the US companies which have missed out on business as a result of sanctions, and the Chinese groups that have had to find alternative supplies. But there is one group that has emerged as a winner: the security hawks who say they saw it coming and who are now pushing Beijing to be more self-sufficient. Since the start of 2019, Washington has used sanctions to cut Chinese companies out of US supply chains, denting the telecoms group Huawei, China’s supercomputer groups and eight of the country’s leading artificial intelligence surveillance companies. For many policymakers in Beijing, the inevitable trend is towards more decoupling of the two countries’ tech supply chains. A truce in the trade war is unlikely to diminish the Trump administration’s drive to place controls on exports of advanced technologies. The result has been a decisive shift in China’s approach to the industry. Beijing is accelerating its drive for technological “autonomy” to boost its control over its own supply chain in the face of political risks, such as further US embargoes. To achieve technological autonomy, Beijing is pursuing strategies that often tread an uneasy balance between increasing its engagement with the outside world and shutting it out. For all the accusations China has faced about stealing other countries’ technology, Beijing is now embracing international open-source, or free to use, collaborations. China is also tapping overseas markets for talent, investing more in countries other than the US. This acceleration of decoupling will not only affect US groups that rely on China’s custom, it will also start to reconfigure the world’s tech supply chain, as Chinese companies turn to countries they view as safer allies. The two superpowers are already bullying countries they buy from, and sell to, to take sides. “Three years ago, there may have been more people thinking that we could rely on some US technologies rather than developing our own,” says Yan Ming, a director at the China Computer Federation, a research alliance. “Now if someone is still saying that, I suppose they have just been sleeping for the past three years.” The Trump administration has justified its sanctions so far on the basis of national security

concerns surrounding Huawei, as well as a foreign policy objective of preventing Chinese government repression of Uighur Muslims and others in the northwestern region of Xinjiang, which is facilitated by surveillance companies. But within China, these justifications are seen as excuses for a broader agenda: preventing the rise of China as a challenger to the US as a tech superpower. China’s fears are not unjustified. In November, the US commerce department proposed rules that would give the agency the power to review and block any transaction involving “information and communications technology and services” from a “foreign adversary”. US officials have expressed national security fears over a range of Chinese companies, from software tech giants Tencent and Alibaba to the state-owned China Railway Rolling Stock Corp, which is pursuing an estimated $1bn contract with the Washington DC subway. The officials say their concern is not limited to a few tech companies, but that all Chinese companies could be seen as threats because they are potentially subject to the ruling Communist party’s control. As a result a whole host of Chinese groups are assessing their dependency on US technologies. The largest gap is in hardware, especially the design and manufacture of semiconductors and high-end chips, where China lags far behind the US. They also relies on the US for software, from Google’s mobile apps for Android smartphones — which are now sorely lacking from Huawei’s handsets — to Microsoft’s Windows operating system and its Office suite. Bar chart of Change in annual venture capital investments from 2018 to 2019 ($bn) showing Chinese funds find alternative places to invest More broadly, the Chinese and

US tech industries benefit from knowledge sharing. That includes informal discussions within industry alliances and standardssetting bodies, some of which have already been curtailed by export controls on Huawei and other companies. Although not subject to the same controls, US-origin software developed under opensource licences supports much of the basic infrastructure of the internet, and Chinese developers worry that their access may soon be blocked. Beijing’s response to the threat of decoupling dovetails with an ambition enshrined in its 2017 Cybersecurity Law, to ensure components of “critical” infrastructure are “secure and controllable” and “autonomous and controllable”. In light of US sanctions, Chinese experts now argue that the risk of supply-chain disruptions for political reasons should be taken into consideration when vetting components. That includes the knock-on impact of Washington’s pressure on non-US companies. US officials have been pressuring their counterparts in Taiwan to stop its largest chipmaker from selling to Huawei. “Developing autonomous and controllable technology is a solution to being controlled by others,” says Mr Yan. He adds that the Trump administration “taught China a lesson” when it temporarily imposed sanctions on telecoms equipment maker ZTE in 2018, taking the company to the brink of collapse. The lesson was: “If you continue like this, you are controlled by others and you won’t survive if I cut your supply chain,” he says. Although foreign products could in theory be certified as “secure and controllable”, this push largely means stripping out foreign vendors, say cyber security companies. In a confidential directive revealed by the Financial Times, the central government told its departments and public

institutions to replace existing computers and software with domestically made versions. “We’re being uninvited to bid. We’re not being allowed to even participate any more,” Cisco’s chief executive Chuck Robbins told analysts in August, referring to the company’s business with Chinese state-owned enterprises. For many countries, technology development nearly always requires piggybacking on international expertise. This year, China has driven engagement with opensource research collaborations — where individuals from around the world can contribute — as a way to circumvent US export sanctions. Chips are a crucial part of China’s drive for self-sufficiency because they are the building blocks for all forms of computer. In October, China’s annual governmentrun World Internet Conference in Wuzhen, near Shanghai in eastern China, debated an open-source chip design project. Born at the University of California, Berkeley, RISC-V is a research collaboration that develops free-for-use designs for the basic architecture used in microprocessors — potentially meaning the end of reliance on Intel and Arm’s proprietary designs. Ni Guangnan, an IT industry veteran, argued at the Wuzhen conference that China has several options when it comes to chip design. Those designed by Intel and the UK-based Arm are subject to possible US sanctions, he said, while chips wholly designed in China, such as by Loongson and Sunway, are rarely used. But, Mr Ni concluded, Chinesemade chips based on RISC-V architecture are not controlled by other countries and have a future in emerging markets. China has faced plenty of other problems developing a competitive domestic chip industry. Companies such as Xiaomi and Huawei already use their own inhouse designs for chips used in

their smartphones. But designing other high-end chips, such as microprocessors used in high-speed servers that will be competitive with Intel’s, could be more than a decade away, says Dan Wang, a tech analyst at the consultancy Gavekal Dragonomics in Beijing. Chinese venture-capital investment in the US has fallen substantially over the past year as the money instead flows to countries that investors consider beyond US sanctions. “The Chinese are scouring the world for non-US semiconductor technologies to bridge the gap,” says Bas Fransen, lead analyst at the consultancy TenX2, who has helped introduce Chinese investors to Indian chip designers. “Particularly in Bangalore, you come across many Chinese company reps and also government officials looking for start-ups to acquire or invest in, and to persuade to move to China.” But beyond chip design, Beijing sees open-source projects as an opportunity for China’s tech sector to expand. Not only does it underpin much of the technology behind the modern internet, but open-source software is also, for now at least, exempt under US export controls. The ministry of industry and information technology, China’s tech industry regulator, has recently encouraged Microsoft’s GitHub, the world’s biggest codesharing platform and host of opensource collaborations, to expand in China. GitHub’s chief operating officer Erica Brescia says Chinese officials told the company that open-source projects give a “sense of security” because of the lack of trade restrictions. “[Due to] the trade war, China’s government and its big tech companies have realised it needs to push the development of its own

Continues on page 40


Thursday 16 January 2020




Iran’s supreme leader faces public wrath Ayatollah Ali Khamenei confronts one of biggest challenges of three-decade rule NAJMEH BOZORGMEHR


n his more than three decades in charge of the Islamic Republic of Iran, Ayatollah Ali Khamenei has battled to consolidate power at home and expand the regime’s influence across the region. But the 80-year-old leader is facing his toughest challenge yet as he seeks to unify a fractured establishment and calm people angry at the alleged cover-up of the cause of a plane crash last week. In recent days, public mourning at the US assassination of military commander Qassem Soleimani has turned to rage after it emerged that Iran had mistakenly shot down a Ukraine International Airlines jet, killing 176 people. “The relationship between the nation and the state has never been as split as it is today, while even inside the political system, politicians accuse each other of hiding and pretending,” said one reformist analyst. There are now “accusations that the state is systematically lying and hence Ayatollah Khamenei has become the main target of public wrath [as the top leader] and the government of [Hassan] Rouhani is seen as too lame to make any changes”. Under Iran’s theocratic rule, the supreme leader is seen as infallible, enjoying “absolute” authority over all the country’s affairs including the military. After the death of Soleimani, he authorised the Islamic Revolutionary Guard Corps to launch missile attacks on US forces in Iraq. No American soldiers were killed and Iran sent a message to the US that that would be the only direct military retaliation if the US did not itself retaliate. The supreme leader won plaudits at home for a strategy that saw him avenge Soleimani’s death, but

avoid war with the US. “Which regional leader, or any leader in the world, would ever dare to challenge the US the way Mr Khamenei did?” said one regime insider. “Nobody.” A clerical student of Ayatollah Ruhollah Khomeini, the founder of the Islamic republic, Mr Khamenei spent years in jail before the 1979 revolution. Since then, he has held several positions in government and was acting head of the Revolutionary Guard before serving as president and then supreme leader in the wake of Khomeini’s death. With the Revolutionary Guard’s admission that the Ukrainian plane had been mistakenly shot down, thousands took to the streets, many chanting abusive slogans not just against the guards but also the supreme leader himself. “The crash was like a huge earthquake that . . . showed all the system’s inefficiencies, corruption and the lack of co-ordination between the military and public sectors,” said the analyst. For many people, what was worse than the crash was the alleged cover-up of the cause, not only from the people but also from Mr Rouhani, the centrist president re-elected in 2017 in a landslide. In theory second-in-command to the supreme leader, Mr Rouhani had been undermined by hardline forces and humiliated, analysts said. “Running the country like this has no [good] result as we are facing widening splits,” Ali Shakouri-Rad, a reformist politician, said in a post on Twitter. “Hiding the reality over firing missiles is like throwing acid in the face of the Islamic Republic of Iran. The only solution is good governance.” As public anger grows — and the economy is squeezed by US sanctions — the supreme leader, known for his pragmatism, may make small reforms to relieve ten-

A demonstration in Tehran on Saturday to remember the victims of a Ukrainian plane shot down by an Iranian missile © AP

sions but is unlikely to institute larger changes. “If street protests get out of control, we shall see a brutal crackdown similar to China’s Tiananmen [in 1989], ” said the analyst. “Reformists should say goodbye to politics and leave,” said the insider. The supreme leader remains focused on regional policy, as executed through the Revolutionary Guard, which remains unconditionally loyal to him. The plan is for “the US’s withdrawal of forces from the region in the long run while our midterm focus will be on Iraq”, said the insider. What Iran wants from the Iraqi government is to “stop its inactive approach and act to get rid of both the US and its own US-, UK-educated and tie-wearing politicians”, he said. Under this new approach, he added, Iran would, despite its years

of support for the Assad regime in conflict-torn Syria, effectively leave Syria to Russia. “In a choice between military might and reforms, Mr Khamenei has chosen rising military power for which it needs to keep good relations with Russia and China,” said the analyst. On the home front, reformists suspect the supreme leader may authorise hardliners to purge an older generation of politicians — conservatives and reformists mostly in their sixties or seventies — and empower younger politicians close to the guards. Last year he vowed to build “a great Islamic Iran”, relying on the “religious and revolutionary youth”. This week, about a third of sitting members of parliament were banned from participating in the parliamentary poll next month. Even if Mr Khamenei allows reformist candidates — as he has done in the past to help boost

turnout — many people have concluded that the polls no longer make a difference in their lives. “Massive disqualification of reformist candidates shows . . . the next parliament should be controlled by ‘the religious and revolutionary youth’ favoured by the supreme leader,” Mostafa Tajzadeh, a reformist politician, said in a post on Twitter. “He wants the country not to deviate from the goals he has set for the next 40 years.” Over his three-decade rule, the supreme leader has worn a keffiyeh — a chequered Palestinian black and white scarf — under his robe in a symbolic gesture of support for “resistance” groups in the Middle East. “This keffiyeh shows clearly in which direction his foreign policies go,” said the analyst. “At home, the Islamic republic will neither collapse nor reform itself — at least as long as Mr Khamenei is alive.”

to attract specialist tech workers. Chinese government-backed recruiters have, over the past year, been more cautious about operating in the US. But while the Trump administration has scrutinised university staff with Chinese state funding, it does not seem that the US government is concerned about Chinese engineers leaving the country. China’s private sector is still able to move quickly to mop up talent — although companies under export sanctions, such as Huawei, are careful not to hire competitors’ engineers who could be accused of bringing sanctioned technical knowledge to the country. This push for chip self-sufficiency has boosted smaller private Chinese companies in the industry, according to Charles Kao, a private equity investor formerly on the board of Applied Materials.

“The drive for tech decoupling has increased demand for Chinese start-ups,” says Mr Hao. “They used to be thought of as too highrisk and so had no market to sell to; now they’re developing because there’s demand domestically.” Some Chinese academics talk optimistically about trying to “recouple” rather than “decouple” from the US — a reference to welcoming in more American investment and US companies, hoping this will add to the lobbying pressure in Washington from the parts of tech sector that wants to deal with China. Examples of this trend include the central bank’s decision to allow PayPal to become the first foreign company to acquire payment processing licences, as well as the Foreign Investment Law, which was pushed through in March in a bid to calm overseas investors’ concerns.

The law promises that all sectors are open to foreign investment unless they are named on a “negative list”, flipping the previous presumption of industries being closed unless otherwise stated, and fulfilling a longstanding US demand. Yet experts say this strategy comes into conflict with ensuring technologies China relies on are “secure and controllable”. Politicians abroad have compared buying Huawei’s equipment to giving China an “off switch” for a country’s telecoms network. The Chinese government faces a similar conundrum: if it really wants to allow foreign tech companies to gain market share in China, it must recognise that Washington will have potential influence over crucial technology. Chinese policymakers increasingly believe they cannot bear the risk.

US tech backlash forces China... Continued from page 39 domestic open-source ecosystem,” says Mark Ma, chief executive of Open Source China. The government is also stepping up its talent-poaching programmes to try to bring Chinese emigrants home and attract foreign expertise. Among them is the Thousand Talents Plan, which has continued despite the government telling civil servants and state media to stop mentioning it by name last year because of criticism in the US. Headhunters in Silicon Valley describe how increased difficulties in the US, such as the tightening of visa rules for talented workers, have led to more Chinese engineers returning home after finishing their studies in the US. “Some of these [Chinese] researchers in the US do not feel fully safe [any more],” says Zhang

Monan, chief researcher on US and Europe at the China Center for International Economic Exchanges in Beijing, a governmentsponsored think-tank. The Chinese recruitment schemes offer a range of incentives, from tax subsidies and research grants to topping up wages in co-operation with large private sector employers. They often also provide office and laboratory space, and even help with recruiting local researchers. Last year, the government announced a tax subsidy scheme designed to lure overseas talent to the Greater Bay area on China’s south coast, giving high earners an effective tax rate as low as Hong Kong’s, according to calculations by KPMG. Elsewhere, officials in Ningbo, near Shanghai, has said it will pay relocation costs of between Rmb150,000 ($21,000) and Rmb8m ($1.2m)


Thursday 16 January 2020





Thursday 16 January 2020


Garden City Business Digest Business:

Vacate Fed High Court order first before you can investigate Rivers govt officials – Msirim

Rivers set to be ‘Champion State’ via ‘Ease of Doing Business’

•Says Magu should desist from arrogating Judicial Powers to himself

• As Gov Wike flags off council on EoDB Ignatius Chukwu


ivers State has set out to achieve the status of a ‘Champion State’ in the area of business by the inauguration of a council to drive ‘Ease of Doing Business’. The council is headed by the deputy governor, Ipalibo Harry Gogo Banigo, who has vowed to work hard with the council members to transform Rivers State’s business landscape. At the inauguration ceremony at the Government

House in Port Harcourt on Monday, January 13, 2020, the deputy governor said; “The focus will be on deepening the reforms already started across the MDAs (ministries, departments and agencies) to drive productivity, create jobs, restore investor-confidence, and increase foreign direct investment (FDI) in the state”. The strategy, she explained, is to engage with public and private stakeholders to ensure that the right policies and programmes were created for the good of Rivers people. Inaugurating the council,

Gov Nyesom Wike charged the members to improve the investment environment of the state, saying the council is critical to the economic development of Rivers State, to improve the investment climate of the state; and to create the environment for investors to come to the State. He said: “The council will draw up programmes and policies to create the platform for the ease of doing business in Rivers State”, noting that the membership of the council is drawn from the public and private sectors, to ensure that all sectors are accommodated

Gov Wike inaugurating the Rivers State Ease of Doing Business Council (EODBC), at the Government House Port Harcourt on Monday

in the drive to enhance business opportunities in the state. He hoped that the carefully selected members would deliver, saying the choice of his deputy as chairman of the council shows how important it is to the state government. Responding, the deputy governor assured of developing policies that would attract investors to the State. She talked about evolving ‘implementable strategies’ for businesses to thrive in the state. “Your Excellency’s policies in the harmonization of taxes, infrastructural development, social sectors of health, education, security and the issuance of Certificate of Occupancy, are pointers towards advancing an enabling environment for businesses to thrive in the State.” She frowned at demarketing Rivers State. Other members of the council include: Commissioner of Finance (Isaac Kamalu), Attorney-General (Zaccheus Adangor), Commissioner of Commerce and Industry (Ifeyinwa Nwamkpa), House Committee on Commerce and Industry (Ezu Chibudhom), President, Nigeria Entrepreneurs and Investment Forum (Nabil Saleh), chairman, Rivers Internal Revenue Service (RIRS) (Adaoge Norteh), and branch controller of the Central Bank of Nigeria (CBN), R.A Randle.


he Economic and Financial Crimes Commission (EFCC) must first manage to vacate the judgment of the Federal High Court which debars it from investigating any official of the Rivers State government, so said the state’s information and communications commissioner, Paulinus Msirim. Reacting to statements credited to the Acting Chairman of EFCC, Ibrahim Magu, the state Commissioner for Information and Communications, Pastor Paulinus Nsirim, stated that the EFCC boss cannot be act as judicial authority and also a complainant. He said: “Magu cannot claim that that judgment cannot stand, except he wants Nigerians to believe that he has started issuing instructions to the Supreme Court. “It is unfortunate that in a democracy someone holding a public office would want to muzzle the Court”. On the allegation that Rivers State is the second capital of money laundering in Nigeria after Lagos, the Information boss wondered how the EFCC arrived at that conclusion. “To justify this allegation, the EFCC should make public the names of people they have arrested

Paulinus Nsirim

and prosecuted in Rivers State over money laundering. If this is not done, Magu’s statement would just be seen as mere playing to the gallery to enjoy cheap publicity”. He stated that the Rivers State Government would support EFCC to fight corruption within the ambit of the law, but would reject any attempt to subvert the rule of law in the state. The Commissioner advised the EFCC boss to be patient and desist from the illegality of arrogating to himself the judicial powers of courts. “The EFCC should desist from self help and unnecessary political propaganda, as it will yield no results, “ he stated.

Valentina’s show of dream and determination that landed her in Indorama Port Harcourt by Boat



alentina Ikejiobi left Nekede Poly with one dream, to do her industrial training (IT) in a big company such as a multinational corporation. She wanted to learn the ways of ‘big business’. She made this dream clear to anybody who cared to listen. This made those around her to steer clear of her dreams and ambitions because it looked too difficult. The young lady followed her dream up with determination. She photocopied her IT letter and stood at the gate of the estate. According to her, she handed a copy to every car that passed. She did not mind any undue attention and some giggling that goes with it. After all, she was no hooker but a young lady out to extract her share

from the fatherland. Somewhere in the Public Affairs Department of the Indorama-Eleme Petrochemicals Limited (IEPCL) is an urgent need for an IT person. By their strict due process, this must be vied for by all eligible candidates. Valentina’s letter landed at that moment and she was short-listed and invited. According to the lady, the invitation from IEPCL was the first soon after broadcasting her letters. She prepared herself and went for the test and screening. Late in December 2019 when Valentina was being sent forth by the department after completion of her training service, the head of department, Jossy Nkwocha, Africa’s first doctorate degree holder in Public Relations, said Valentina was presented to him as the best. Further tests were administered and she excelled. It was offered to her. Her result was shown to all others to prove that it was purely on merit. Testifying, Valentina said she never knew anybody at IEPCL but that her faith was strong, very strong, in making it. She stated at the brief ceremony to honour her that she never knew that in Nigeria, things can still be done right. At school, all they hear is that nothing goes for nothing; man know man, money for hand, back for ground, etc. She said she believed that nobody would give you a chance to prove yourself but that any such offer must come through sorting or knowing the big man.

Coming to Indorama shocked her back into believing once again in Nigeria, at least some few corners of Nigeria. Indorama brought due process, Valentina brought brilliance, the rest is a tour of duty in IEPCL. Valentina is a twin and her twin sister is Vivian. While at Indorama, she came face-to-face with precision and an attempt at perfectionism. She said she would cover an in-house event, write all the grammar she knew, but the boss would tear it to pieces for her to start afresh. The red bic would crisscross the pages and point at various angles she ignored. She would start afresh, and afresh. She said it

Valentina Ikejiobi (left) and her twin sister, Vivian at the sendforth event

happened many times until she realized the hard fact that a news copy is regarded as a near-perfect piece of report. She said she learnt the hard way. Concurring, the boss (Dr Jossy as he is called everywhere) said Valentina has learnt that in the department, there is no space for half-measures because no section of IEPCL would accept anything short of standards. This is a company that does never miss its turn around maintenance (TAM) schedules no matter what. That could be the reason why the selection process was difficult in the first place. Speaking also, Chinedu Emeanaa, the second in command, said the tasks and demands of the department seemed to make the place the toughest newsroom in the land. He said it is a place that drills one inside-out on every editorial task. Valentina, he affirmed, proved equal to these challenges. By the time she was going, she had become a darling of the department and other units that she had editorial contact with. Evidently, she can handle any gadget and could shoot moving objects from any angle, just to submit a publishable piece and something acceptable to Dr Jossy who worked in the Vanguard and ended up as a general editor in Newswatch; something not a mean feat, at all. The boutique event was witnessed by other departmental members including Michael Achaziem.


Thursday 16 January 2020



Investing in Rivers State OML 11 action is Gov Wike’s resource control struggle style – Aide Ignatius Chukwu


he sweeping decision to submit a bid of about N47Bn to acquire SPDC’s 45 per cent equity in Oil Mining Lease 11 (Ogoni field) worth about 260,000 bpd by the Rivers State government in September 2019, is being seen as Gov Nyesom Wike’s style of fighting for resource control. In a six-page article, Simeon Nwakaudu, the governor’s media aide, argued that different leaders and activists in the oil region have over the years launched different strategies to capture control of oil resources but with varying degrees of success or results. He said the overall objective of any strategy boils to the desire to draw down values and benefits to the communities that own the oil assets. Summarizing the age-old case, Nwakaudu said; “The fight for OML 11 situated in Ejama Ebubu community in Eleme Local Government Area and the adjoining Ogoni and other communities of Rivers State was tortuous. It lasted for about three decades. The people traversed different courts before they won the matter. Many of those who started the case in court have since departed the world.” He said on the 11th of January 2019, Shell’s appeal was dismissed at the Supreme Court of Nigeria. “The judgments of the High Court, the Court of Appeal and the Supreme Court were registered in the United Kingdom for enforcement over there against SPDC parent companies domiciled outside Nigeria’s shores. Outlining the various steps taken by the community to get justice, the media aide said the judicial victory

Governor Nyesom Wike

set the stage for any true resource control-minded administration to act to create a new direction in the oil region. He said SPDC so lost that they invited the community and offered them N7Bn as against the judgment debt of N194Bn, which the community rejected. At this point, the only action left was to auction SPDC’s stakes in OML 11, and this process was activated. Thus, bearing in mind the importance of Rivers State and its people to become key players in the oil sector for the empowerment of the people, Gov Wike took what he called the beneficial decision of acquiring the auctioned stakes of SPDC in OML 11. He pointed at several reasons that justified the acquisition, arguing that the reasons centred on the development of the oil bearing communities, their peace and the overall economic development of the country.

He said: “That rather than standby and watch other persons or group purchaser SPDC 45 per cent interest in that OML 11 and further exacerbate the poverty of the people of the State, a responsible and responsive State Government should weigh in and bid for the purchase of SPDC interest already set down for auction. He insisted that the action was taken with full sense of responsibility. “This action was taken by the administration to safeguard the interest of Rivers communities. It was taken with every sense of responsibility. It sent a clear message to international oil companies that the Rivers State Government is always on the side of the people, ever ready to stand with them. “The action was necessary as it emphasised that Rivers people will always be the centrepiece of governmental engagements.” He quoted the

governor to have said that without any doubt, this is a profound economic investment with profound and enduring positive implications on peace, security, development and prosperity for the oil-bearing communities of OML 11, the entire Rivers State and our country. Nwakaudu argued that the resource control struggle pertaining OML 11 is not unilateral. “All the key stakeholder communities have been brought on board in Gov Wike’s commitment to right the wrongs of the past. He said that Gov Wike assured the Ejamah Community and other host communities of OML 11 that the Rivers State Government would defend their right in any ensuing legal battle over the oil facility. The Ejama community is said to have visited the governor in appreciation where Gov Wike was said to have commended the community for standing firm and fighting through established due process. “While I remain Governor, one thing I will never do is sell the interest of our people. The property of SPDC was auctioned and the Rivers State Government submitted a bid and acquired it. There will be legal battles. The Rivers State Government will stand for Rivers people”, he said. He promised to extend some percentage to the host communities to give them a sense of belonging. He praised Ejamah community for engaging in the legal battle for 29 years and refusing to be swayed by financial proposals by SPDC. He reminded the people that OML 11 is not only for Ogoni, it extends to Okrika, Andoni, Oyigbo and Ikwerre. “Any community linked to OML 11 should be eternally grateful to you.

I know some communities that only N300million will change them. You refusal to collect N7billion led to the auctioning of Shell Interest. “If the FG wants to talk, it is the Rivers State Government it should talk with, because we have acquired Shell’s interest. I am with you. God knows I have no personal interest.” Interacting with the Etche Ethnic Nationality, part owners of OML 11, Gov Wike said the efforts of the Rivers State Government were geared towards ensuring that the communities got the best from the acquisition of OML 11. On this, he observed that all host communities have shown support for the acquisition by the state government. He said the governor was aware of what he called clandestine and negative propaganda against the action. Nwakaudu mentioned one Ogoni son who he said fronted for an oil company during the settlement of the issues on the re-opening of OML 25 is the lead negative propaganda tool. “Since he is not a leader of any of the stakeholder communities, he comes under a propaganda trading organisation, which is well financed by the dislodged interest groups. The media chief rather said the new approach adopted by Gov Wike to promote and defend the interest of Rivers State yields best results. “With the legal acquisition of the controlling stakes at OML 11, the development process can no longer be halted.” Going forward, he deposed, the respect for the rule of law, constructive engagement and dialogue would displace recourse to violence in the resolution of conflicts relating to oilfields and other related matters. “This is an outstanding legacy that Gov Wike is cultivating in the Niger Delta”.

Gov Wike meets traders, residents over 3 flyovers project • But appeal for resettlement persists as demolition threats increases Ignatius Chukwu


raders have become the first victims of the highly applauded decision to build three flyovers in the Rivers State capital; two on Aba Road and one on Ikwerre Road at Rumuokoro round about. The governor said demolition would start immediately, meaning hundreds of traders would be cut off from economic activities and daily income. The government argues that it has compensated the landlords who own the buildings to be demolished and had no responsibility but some social critics insist that the numerous traders were also stakeholders who should be considered. Omas Gerry argued that the traders were paying taxes but a government supporter argued that paying tax did not qualify the traders for government care or resettlement. Gerry however insisted that environmental impact assessment of such a project was compulsory by

a 1992 law and that it ought to be published 21 days for review and reaction by members of the public. Others supporting government help to the traders pointed at some oil companies that helped displaced traders and occupants at Robertkiri Island to relocate after

the company had paid the landlords. They called it social responsibility, whether the traders and residents were landlords or not. Gov Wike who signed the N21Bn flyover contracts and paid 70 per cent upfront to Julius Berger has however called on traders and

Rivers State Governor, Nyesom Ezenwo Wike ( r) seeking the cooperation of traders at the sites of Rebisi and Rumuogba Flyover Bridges for the demolition of marked buildings in Port Harcourt on Thursday

residents to cooperate with the Rivers State Government to deliver the Rebisi, Rumuogba and Okoro-Nu-Odo Flyover Bridges on schedule. Gov Wike last week Thursday moved from shop to shop at Rebisi (former Garrison) and Rumuogba (former Artillery) Flyover Bridges sites, personally appealing to the traders and residents to vacate the buildings marked for demolition. The Governor urged the traders and residents to make sacrifices, since the Flyover Bridges will be in the interest of all residents of the state. He said: “I have come to speak to them, let them appreciate our efforts better. Now times are hard, but they have to understand with us. I took it upon myself to personally explain to them that the time we notified them has elapsed. But I have extended it to Tuesday next week (January 14, 2020) after which demolition will start. I am here because I don’t want Julius Berger to have excuses. These bridges must be delivered on schedule”. @Businessdayng

Gov Wike said that though the exercise was painful, all residents must contribute to ensure the Flyover Bridges are delivered. “I am here to personally appeal to the people because I feel their pain. But this is a sacrifice everyone must make for the State to move forward. “To do three Flyover Bridges the same time is not an easy task. Therefore, we must work hard to achieve the target. The Target is that Julius Berger must hand over the three Flyover Bridges on 20th February, 2021. “It is about one year from now, the time will elapse and people will start saying nothing was done. We don’t want such a situation”. Gov Wike said that the Rivers State Government has paid compensation to the owners of the marked houses, pointing out that they were duly notified that the demolition would take place. He, however, said that he decided to visit the traders to give the entire process a human face. You supported me, but this is for the good of the people”.


Thursday 16 January 2020


POLITICS & POLICY Controversy trails attorney-general’s pronouncement of ‘Amotekun’ as illegal INIOBONG IWOK (Lagos), and REMI FEYISIPO, Ibadan


rominent Nigerians and senior lawyers have expressed divergent views on the legality or otherwise of the South-west regional security outfit ‘Amotekun’ banned Tuesday by the Federal Government through a letter by Attorney-General of the Federation and Minister of Justice, Abubakar Malami. Recall that last week, governors of the South-west states launched ‘Amotekun, the Western Nigeria Security Network (WNSN), in Ibadan, Oyo State. The six state governors had constituted the outfit to tackle the challenges of insecurity, including kidnapping and banditry in the region. But the initiative has attracted criticism and condemnation from some section of the country, especially some leaders in the North, who say such arrangement was unconstitutional in a federal state and called for its scrapping. In a statement Tuesday night, the Federal Government declared the paramilitary outfit as illegal; the government said it was not backed by any known law in the land. Olawale Oshun, chairman of Afenifere Renewal Group (ARG), has described Malami’s statement that ‘Amotekun’, is illegal as rubbish. While challenging Malami to declare Hisbah Corps, (a religious police force responsible for the enforcement of Sharia) and Civilian Joint Task Force among others in the Northeast illegal, said: “He is talking arrant nonsense.” According to him, let him declare Hisbah police in the 10 Northern states illegal

and also let him declare the Civilian Joint Task Force in the Northeast, those are not Nigerian police institutions and they are not Nigerian security institutions but they were created because there is a need; urging the governors of the Southwest to go ahead with the implementation of the Amotekun, he noted that it was created because there is a need for it. Aare Ona Kakanfo of Yorubaland, Gani Adams has written an open letter to Malami, saying: “I find it disturbing your statement of Tuesday, January 14, 2020, declaring the security initiative of South-West governors ‘Amotekun’ as illegal. “You also threatened that the full course of the law will be applied to anybody promoting the Amotekun security initiative. Maybe you have forgotten. I need to remind you that you are the Attorney-General of the country, not a section of the country. “So, your outburst against the governors who were elected, not selected or appointed is against the spirit of the 1999 Constitution (as amended). The right to life is universal and no government can legislate against that. I don’t need to bother you about killings, kidnappings, banditry and other criminal vices in the SouthWest recently. “Even Funke Olakunrin, the daughter of Yoruba leader, Reuben Fasoranti, was killed and nobody has been arrested in respect of all these killings. One thing is clear: Nigerians have the right to protect themselves. Not only that: South-West people have a right to protect and defend themselves against attacks. Amotekun is an initiative by the South-West governors to defend our people. Where you are getting it

wrong is this: The Amotekun initiative has nothing to do with the territorial integrity of Nigeria. If there is a breach of the territorial integrity of the country, the military will come in immediately. “So, nobody is rising against Nigeria, as your letter to the governors, directly or indirectly, implied. What is happening is that our people no longer feel safe because the land has been invaded by some elements from within and outside the country. As a lawyer and a Senior Advocate, you should know that you are not the law. You are only the Attorney-General, not a court. It is only a court of competent jurisdiction that will decide if what an individual, group of individuals, an entity or a state does is legal or otherwise. So, it is only a court that can invalidate the South-West joint security initiative, not you. I want to establish this fact that the Yoruba have a right to protect themselves from attack or violence of any sort.”

The Southern and Middle Belt Leaders Forum (SMBLF) said government’s declaration that the security outfit was illegal was an indication of a further evidence of a state-backed injustice in the polity. Speaking in separate interviews with BusinessDay, Wednesday, some politicians and senior lawyers said the initiative was not an alternative or rival to the Nigeria Police and not a violation of the law, stressing that it was laudable in view of the security challenges bedeviling the region and the country. John Baiyesha, a senior advocate of Nigeria (SAN), said the initiative did not violate the constitution because the security outfit was not an alternative to the Nigeria Police. According to him, “The only thing that the law says you cannot do is that you cannot have regional police, but you can decide to have a vigilance group. Looking at the security of the people to the communal level, for

example, look at Hisbah in some states in the North. “They have it in Kano, Zamfara, Sokoto, and Niger States. They enacted laws to set up even court for such purposes. Nobody talked about it, and then look at the areas where terrorism is high in the North-east. “They had vigilante Joint Task Force, who are providing security because they know the terrain, they know the area and they can enter the bush. “You know it is like gorilla war. If you have to declare this illegal you have to declare everything illegal and unconstitutional, it is not wrong. They are not police; they don’t have powers of police and just want to help their people. “The police cannot even enter where they would operate; they enter the buses and make sure that people are not kidnapped and take for ransom. They should even be commended,” Baiyesha said. Second Republic governor of Kaduna State, Bal-

L-R: Hadiza Balarabe, deputy governor of Kaduna State; the Most Reverend Nichola Okoh, primate of the Church of Nigeria (Anglican Communion), and Nasir El-Rufai, governor of Kaduna State, during Archbishop Okoh’s visit to the governor.

arabe Musa, described the initiative as illegal which could give rise to anarchy in the country. “For me ‘Amotokun’ is illegal; such initiative could give birth to the Wide-Wide West which led to the civil war in the First Republic and the leaders could not manage the crisis that arose from it. “It is the North and South West that are leading the county; if they cannot solve the security challenge of the country, it is a big shame on them,” Balarabe said. Moshood Salvador, a chieftain of the ruling All Progressives Congress (APC) in Lagos State, who had spoken to BusinessDay before the Federal Government pronounced the outfit illegal, said that such arrangement was not new in a federal state. According to him, “In any federal setting you would have all sorts of security arrangement agencies it is just additional to security. The moment they know that this people are protecting the interest of the people in the South-west there would be certain fear. “Mere hearing about the outfit would put fear in them. I am not surprised about the opposition; even in America, the Republicans are calling the Democrats terrorists’ friends.” Salvador’s views were, however, countered by Sanni Yabagi, national chairman of Action Democratic Party, who said that the SouthWest governors should have collaborated with the Federal Government on the outfit. “What they have done is illegal; if you look at the concurrent list, it does not give states powers to set up security outfit that would rival the police. So, where did they get their powers from? I think we need to do things within the law,” Yabagi said.

Operation ‘Amotekun’ has come to stay, AGF should wake up from slumber - Makinde RAZAQ AYINLA, Abeokuta


overnor Seyi Makinde of Oyo State has replied the AttorneyGeneral of Federation and Minister of Justice, Abubakar Malami over the statement credited to him that the recently established Western Nigeria Security Network code-named ‘Operation Amotekun’ is illegal

and not backed by the 1999 Constitution of the Federal Republic of Nigeria. Governor Makinde of Oyo State, one of the six Southwest governors and the host of the recently launched Operation ‘Amotekun’ in Ibadan last week, wondered how the AGF would just wake up in the mid of sleep and declared Operation ‘Amotekun’ is illegal and unconstitutional.

The governor, who paid a courtesy call on former President Olusegun Obasanjo at his Penthouse located within the Olusegun Obasanjo Presidential Library (OOPL) in Abeokuta on Wednesday, said that the pronouncement of the regional security outfit as illegal was a joke taken too far and a pronunciation which was not backed by official statement from the Presidency.

“My personal position is that you actually don’t run a government on the social media. If I see a letter or if I get a call from the AGF telling me what you (journalists) just said then it will be a different type of reaction. “I have been reading just like you (journalists) read on the social media. I haven’t seen anything official to that effect. “Besides, I don’t think

for a country like Nigeria, the AGF will just wake up and make his own laws. He may interpret and advise the President if there are legal issues but I haven’t seen anything that gives that power to the AGF to make such declaration. “This outfit is complimentary to the efforts of the Nigeria Police and other Security agencies in fighting insecurity in the Southwest region.” @Businessdayng

Bu s i n e s s Day re p o r t s that though the Oyo state governor, who visited the former president in company of former Secretary to the Oyo State Government, Olayiwola Olakunjo and Fatai Owoseni, the special adviser on Security Matters to Oyo state governor, held a two-hour closed door meeting, the details of the meeting were not disclosed to the waiting journalists.


Thursday 16 January 2020



Thursday 16 January 2020



Live @ The STOCK Exchanges Prices for Securities Traded as of Wednesday 15 January 2020 Company

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PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 362,561.30 10.20 -2.86 413 52,474,760 UNITED BANK FOR AFRICA PLC 290,695.08 8.50 3.03 431 31,969,428 ZENITH BANK PLC 670,315.14 21.35 0.23 572 31,554,525 1,416 115,998,713 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 251,267.05 7.00 -0.71 256 6,922,077 256 6,922,077 1,672 122,920,790 TELECOMMUNICATIONS SERVICES MTN NIGERIA COMMUNICATIONS PLC 2,452,718.82 120.50 -2.98 114 1,005,371 114 1,005,371 114 1,005,371 BUILDING MATERIALS DANGOTE CEMENT PLC 2,896,886.26 170.00 - 63 304,428 LAFARGE AFRICA PLC. 241,616.93 15.00 - 140 5,140,710 203 5,445,138 203 5,445,138 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 346,005.40 588.00 - 21 80,020 21 80,020 21 80,020 2,010 129,451,319 REAL ESTATE INVESTMENT TRUSTS (REITS) SKYE SHELTER FUND PLC 1,710.00 85.50 - 0 0 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 10,175.81 40.70 - 0 0 UPDC REAL ESTATE INVESTMENT TRUST 9,338.94 3.50 - 6 55,065 6 55,065 6 55,065 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 6 55,065 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 5 2,000,000 62,958.06 66.00 - 14 86,697 OKOMU OIL PALM PLC. PRESCO PLC 52,250.00 52.25 - 16 67,206 35 2,153,903 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 8,500.00 4.25 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,500.00 0.50 -9.09 8 302,540 8 302,540 43 2,456,443 DIVERSIFIED INDUSTRIES JOHN HOLT PLC. 217.92 0.56 - 2 660 S C O A NIG. PLC. 1,903.99 2.93 - 0 0 TRANSNATIONAL CORPORATION OF NIGERIA PLC 43,899.83 1.08 4.85 75 17,855,896 U A C N PLC. 30,829.87 10.70 -3.17 208 6,280,598 285 24,137,154 285 24,137,154 BUILDING CONSTRUCTION ARBICO PLC. 521.24 3.51 - 4 106,005 4 106,005 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 28,842.00 21.85 - 32 466,392 ROADS NIG PLC. 165.00 6.60 - 0 0 32 466,392 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 2,598.40 1.00 - 9 49,768 9 49,768 45 622,165 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 7,672.91 0.98 - 0 0 GOLDEN GUINEA BREW. PLC. 242.22 0.89 - 0 0 GUINNESS NIG PLC 66,149.56 30.20 - 17 36,666 INTERNATIONAL BREWERIES PLC. 78,222.34 9.10 -1.09 18 1,107,503 NIGERIAN BREW. PLC. 408,641.69 51.10 - 32 73,174 67 1,217,343 FOOD PRODUCTS DANGOTE SUGAR REFINERY PLC 174,000.00 14.50 -2.03 61 1,230,477 FLOUR MILLS NIG. PLC. 98,409.11 24.00 - 79 506,223 HONEYWELL FLOUR MILL PLC 8,168.10 1.03 - 29 1,182,000 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 766.26 4.30 - 0 0 NASCON ALLIED INDUSTRIES PLC 39,741.58 15.00 - 26 198,769 UNION DICON SALT PLC. 2,993.06 10.95 - 0 0 195 3,117,469 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 18,782.02 10.00 - 24 172,939 NESTLE NIGERIA PLC. 1,165,125.42 1,469.90 - 25 11,110 49 184,049 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 6,104.12 4.88 - 26 237,220 26 237,220 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 23,227.29 5.85 - 15 111,524 103,410.10 18.00 - 11 94,984 UNILEVER NIGERIA PLC. 26 206,508 363 4,962,589 BANKING ECOBANK TRANSNATIONAL INCORPORATED 132,116.77 7.20 -7.69 53 1,902,399 FIDELITY BANK PLC 63,165.06 2.18 3.81 97 6,343,656 GUARANTY TRUST BANK PLC. 935,911.50 31.80 0.63 255 6,063,670 JAIZ BANK PLC 18,857.12 0.64 -1.56 20 1,213,522 STERLING BANK PLC. 52,974.37 1.84 -3.16 96 6,518,456 UNION BANK NIG.PLC. 179,092.63 6.15 - 29 54,108 UNITY BANK PLC 8,416.32 0.72 - 4 3,503 WEMA BANK PLC. 27,387.87 0.71 -2.74 27 1,051,563 581 23,150,877 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 1 20 AIICO INSURANCE PLC. 5,336.26 0.77 1.30 21 5,272,983 AXAMANSARD INSURANCE PLC 22,260.00 2.12 -0.93 10 746,513 3,170.70 0.39 2.63 2 150,311 CONSOLIDATED HALLMARK INSURANCE PLC CONTINENTAL REINSURANCE PLC 22,820.04 2.20 - 0 0 CORNERSTONE INSURANCE PLC 8,543.11 0.58 9.43 8 234,000 GOLDLINK INSURANCE PLC 909.99 0.20 - 0 0 GUINEA INSURANCE PLC. 1,228.00 0.20 - 0 0 INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 0 0 LASACO ASSURANCE PLC. 1,977.33 0.27 -7.41 25 6,125,606 LAW UNION AND ROCK INS. PLC. 2,148.17 0.50 - 1 5,250 LINKAGE ASSURANCE PLC 3,840.00 0.48 -8.33 4 500,049 MUTUAL BENEFITS ASSURANCE PLC. 2,234.55 0.20 - 4 1,316,343 NEM INSURANCE PLC 10,825.03 2.05 - 3 2,883 NIGER INSURANCE PLC 1,547.90 0.20 - 0 0 PRESTIGE ASSURANCE PLC 2,906.58 0.54 - 1 10,171 REGENCY ASSURANCE PLC 1,333.75 0.20 - 0 0 SOVEREIGN TRUST INSURANCE PLC 2,272.89 0.20 -9.09 8 1,703,962 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 - 2 7,360 UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 0 0 UNIVERSAL INSURANCE PLC 3,200.00 0.20 - 1 100 VERITAS KAPITAL ASSURANCE PLC 2,773.33 0.20 - 0 0 WAPIC INSURANCE PLC 4,683.96 0.35 -2.78 30 777,746 121 16,853,297 MICRO-FINANCE BANKS NPF MICROFINANCE BANK PLC 2,812.56 1.23 - 6 55,000 6 55,000

MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 4,200.00 1.00 - 1 2 ASO SAVINGS AND LOANS PLC 7,370.87 0.50 - 0 0 INFINITY TRUST MORTGAGE BANK PLC 5,796.93 1.39 - 1 674 RESORT SAVINGS & LOANS PLC 2,265.95 0.20 - 0 0 UNION HOMES SAVINGS AND LOANS PLC. 2,949.22 3.02 - 0 0 2 676 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 9,200.00 4.60 - 43 379,272 CUSTODIAN INVESTMENT PLC 34,997.09 5.95 - 5 20,084 DEAP CAPITAL MANAGEMENT & TRUST PLC 540.00 0.36 - 0 0 FCMB GROUP PLC. 38,021.20 1.92 -0.52 62 1,544,488 ROYAL EXCHANGE PLC. 1,697.97 0.33 - 0 0 STANBIC IBTC HOLDINGS PLC 446,461.11 42.50 - 22 398,104 UNITED CAPITAL PLC 15,840.00 2.64 1.15 72 2,157,973 204 4,499,921 914 44,559,771 HEALTHCARE PROVIDERS EKOCORP PLC. 2,592.72 5.20 - 1 17 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 746.16 0.21 - 3 1,194,993 4 1,195,010 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 494.58 0.50 -10.00 3 126,773,565 3 126,773,565 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 FIDSON HEALTHCARE PLC 5,424.54 2.60 -5.45 10 228,281 GLAXO SMITHKLINE CONSUMER NIG. PLC. 7,175.26 6.00 7.14 48 1,593,366 MAY & BAKER NIGERIA PLC. 3,743.76 2.17 - 10 109,255 NEIMETH INTERNATIONAL PHARMACEUTICALS PLC 968.57 0.51 - 3 27,497 NIGERIA-GERMAN CHEMICALS PLC. 556.71 3.62 - 0 0 PHARMA-DEKO PLC. 325.23 1.50 - 0 0 71 1,958,399 78 129,926,974 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 781.44 0.22 - 0 0 0 0 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 1,323.81 0.45 - 2 600 2 600 IT SERVICES CWG PLC 6,413.06 2.54 - 1 2 NCR (NIGERIA) PLC. 437.40 4.05 - 5 85,402 TRIPPLE GEE AND COMPANY PLC. 287.07 0.58 - 4 9,034 10 94,438 PROCESSING SYSTEMS CHAMS PLC 1,596.66 0.34 2.94 15 3,864,448 E-TRANZACT INTERNATIONAL PLC 10,962.00 2.61 - 0 0 15 3,864,448 TELECOMMUNICATIONS SERVICES AIRTEL AFRICA PLC 1,123,311.48 298.90 - 12 858 12 858 39 3,960,344 BUILDING MATERIALS BERGER PAINTS PLC 1,956.31 6.75 - 9 44,645 BUA CEMENT PLC 1,286,845.45 38.00 -2.44 186 12,562,001 CAP PLC 17,500.00 25.00 - 17 23,362 MEYER PLC. 244.37 0.46 -8.00 3 101,999 PORTLAND PAINTS & PRODUCTS NIGERIA PLC 1,769.32 2.23 - 0 0 PREMIER PAINTS PLC. 1,156.20 9.40 - 0 0 215 12,732,007 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,256.91 2.09 - 0 0 CUTIX PLC. 2,518.69 1.43 - 15 195,052 15 195,052 PACKAGING/CONTAINERS BETA GLASS PLC. 32,448.18 64.90 10.00 18 252,009 GREIF NIGERIA PLC 388.02 9.10 - 0 0 18 252,009 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 0 0 0 0 248 13,179,068 CHEMICALS B.O.C. GASES PLC. 2,289.35 5.50 - 5 137,713 5 137,713 METALS ALUMINIUM EXTRUSION IND. PLC. 1,781.64 8.10 - 0 0 0 0 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 0 0 0 0 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 77.00 0.35 - 0 0 0 0 5 137,713 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,252.54 0.20 - 25 1,009,741 25 1,009,741 INTEGRATED OIL AND GAS SERVICES OANDO PLC 45,374.66 3.65 -3.95 65 1,587,644 65 1,587,644 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 53,332.04 147.90 - 12 1,417 CONOIL PLC 13,879.04 20.00 - 23 27,371 ETERNA PLC. 4,694.92 3.60 - 3 6,500 FORTE OIL PLC. 24,747.14 19.00 6.44 81 574,274 MRS OIL NIGERIA PLC. 4,663.23 15.30 - 2 388 TOTAL NIGERIA PLC. 36,328.84 107.00 - 27 18,297 148 628,247 238 3,225,632 ADVERTISING AFROMEDIA PLC 1,509.28 0.34 - 1 10 1 10 AIRLINES MEDVIEW AIRLINE PLC 15,796.05 1.62 - 0 0 0 0 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 235.27 0.20 - 0 0 0 0 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 2,623.26 4.45 - 6 52,727 TRANS-NATIONWIDE EXPRESS PLC. 421.96 0.90 - 0 0 6 52,727 HOSPITALITY TANTALIZERS PLC 642.33 0.20 - 0 0 0 0 HOTELS/LODGING CAPITAL HOTEL PLC 4,259.15 2.75 - 2 502 IKEJA HOTEL PLC 2,328.25 1.12 - 1 4,979 TOURIST COMPANY OF NIGERIA PLC. 7,076.28 3.15 - 0 0 TRANSCORP HOTELS PLC 33,821.80 4.45 - 3 10,202 6 15,683 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 4,320.00 0.36 - 0 0 0 0 PRINTING/PUBLISHING ACADEMY PRESS PLC. 223.78 0.37 - 0 0 LEARN AFRICA PLC 933.45 1.21 - 1 420 STUDIO PRESS (NIG) PLC. 1,183.82 1.99 - 0 0 UNIVERSITY PRESS PLC. 560.83 1.30 2.31 12 1,704,890 13 1,705,310 ROAD TRANSPORTATION ASSOCIATED BUS COMPANY PLC 745.97 0.45 - 2 19,500 2 19,500 SPECIALTY INTERLINKED TECHNOLOGIES PLC 688.80 2.91 - 0 0 SECURE ELECTRONIC TECHNOLOGY PLC 1,126.31 0.20 - 0 0


industry Insight

BUSINESS DAY Thursday 16 January 2020

Ajaokuta Steel: Reviving Nigeria’s failed industrial project Michael Ani


hen the framework of Nigeria’s largest steel mill was unveile d in the late 60s and early 70s, it was as if the country had woken up to take its place in the League of Nations and was moving on the path of industrialization. But more than 50 years down the line, the hope of that dream has remained in limbo as talks about its revival failed many times. The Ajaokuta Steel Company, located in Nigeria’s confluence state, Kogi, is unarguably Nigeria’s largest industrial project, envisioned to serve as the ‘bedrock of Nigeria’s industrialisation’. The decision to kick-start the project could be traced to the year 1967 after a team from the defunct Soviet Union discovered large deposits of iron ore in Itakpe, Kogi state. In 1975, a contract was signed between the Nigerian government and a Soviet state-owned company, Tiajpromoxpor t (TPE), and in 1979, under the then executive government of Shehu Shagari, work on Ajaokuta Steel started officially. At the time, Nigeria became the cynosure of all eyes in the global economy, taking the center stage on academic discourse, as the project was seen as strategic for industrialisation, job creation and foreign exchange saver and earner. It was also envisaged that the project would increase the productive capacity of the nation through its linkages to other industrial sectors by providing materials for infrastructural development, technological acquisition, human capacity building, income distribution, regional development and employment generation. The Ajaokuta steel mill has a vast complex site on 24,000 hectares and cost Nigeria about an estimated $8 billion dollars to build, according to data in a documentary by Qatar-funded broadcast agency, Al Jazeera. The steel mill has a 68-kilometer road network and another 24-kilometer road network underground, and known to be the country’s biggest mineral resource investment with the coke oven and byproducts plants, larger than all refineries in Nigeria combined. The project was closely situated in a location that makes it

almost independent of imports as 80 percent of the raw materials needed are within the factory’s 60 kilometer radius. In order to supply the Ajaokuta Steel Mill with raw materials and connect it with the world market, a contract was awarded in 1987 for the construction of Nigeria’s first standard gauge railway, from the iron mines at Itakpe to the steel mill at Ajaokuta. There was also the dredging of the river Niger and an establishment of an inland port at Lokoja and Baro, to facilitate movement of the material. Ajaokuta has the capacity to produce 10 million metric tons (MT) of steel per annum from its 43 different plants. This would have been a game changer for Nigeria to take the front seat among steel producers in the world. Data from the World Steel Association (WSA) on steel production by countries shows that South Africa produced about of 6.1 million tons of steel in 2016, while Egypt (Cairo) produced 5 million tons in the period. China, which is the world’s largest producer of steel, churned out 808.4 million MT, about 50 percent of the global steel output in the period, while Japan and India produced 104.8 and 95.6 million tons respectively within the period, putting both nations as second and third respectively. While the Ajaokuta project would directly employ about 10,000 staff at the first phase of commissioning, the upstream

and downstream industries were supposed to engage not fewer than 500,000 employees. But it wasn’t long that hopes from this ambitious project were short-lived due to lack of political will, corruption and the juicy revenue from oil, which made the government less bothered about the project. Successive governments turned blind eyes to the big dreams of the Ajaokuta Steel project as the country enjoyed sweet dollars coming from proceeds of crude oil sales. That didn’t make Nigeria better. It rather made the country a mono-product economy that depends on only oil alone as the major source of its revenue. In the 2000s, the oil sector accounted for over 85 percent of FX earnings and about 70 percent of the entire revenue of Nigeria, while the mines and steel industry was abandoned. According to the Manufacturers Association of Nigeria (MAN), Ajaokuta could easily have supplied over 50 percent of inputs to several companies in the country. It could also have enabled Nigeria to become steel sufficient and a major exporter of the product across the continent. The urgent need to diversify the economy away from the oil sector became more paramount in 2016 when prices of crude oil crashed to as low as $30 per barrel while average daily oil production fell to 1.28 million barrel on destruction of oil pipelines by Niger Delta militants. The deleterious effects of this

were almost six quarters of negative growth, falling government revenues and an acute dollar shortage that led to the devaluation of the naira. This made the Nigerian government start looking at other sources than oil to grow its economy. Although Africa’s biggest economy is still largely dependent on oil, discussions focusing on non-oil sector like mines and steel industry and the agric sectors are gradually gaining government attention and intervention. Ajaokuta steel, a project, which started off 50 years ago, and which as of 1994 was said to have reached up to 98 percent completion level, is still uncompleted and has not produced a single sheet of steel since its creation. It is one of such that would help in giving the Nigerian economy a facelift. Incidentally, as reported by BusinessDay in 2019, some export grants were allocated to the complex last year despite that it was not even producing anything. Nigeria will be signing a Memorandum of Understanding (MoU) with the Russian government to facilitate the completion of Ajaokuta Steel before the end of January, according to Olamilekan Adegbite, minister of Mines and Steel Development. Speaking in an interactive session with journalists in Lagos, Tuesday, Adegbite said the completion would be on a government-to-government basis. The MoU, he said, was a fall-

out from a trip made by President Muhammadu Buhari to Russia in October last year. “By the end of this month, an MoU with the Russian government will be signed in order to enable us complete the project,” he said. According to the minister, part funding for the project would come from Afreximbank while the repayment would come from the Ajaokuta project when it starts operations fully. Afreximbank will be pumping in $1 billion while the Russian government is bringing in $460 million with an interest payment of less than five percent, the minister said. He noted that the project would be on Built, Operate and Transfer (BIT) basis. The Russian government would complete the project, operate it for an agreed period of time and then transfer it to the Nigerian government. On the benefit of the project, he said it would create jobs for the country’s population and help in achieving the government’s mandate of lifting over 100 million people from poverty in 10 years. Nigerians expect the completion of the project and will be happy to see that all legal cases are fully resolved before the Russian deal. Also, Nigerians will be happy to see that the federal government stops spending public funds on Ajaokuta which has failed to live up to expectations. More so, Nigerians want the National Assembly not to stall this arrangement.

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BusinessDay 16 Jan 2020  

BusinessDay 16 Jan 2020