BusinessDay 16 Oct 2018

businessday market monitor FMDQ Close

Everdon Bureau De Change

Bitcoin

NSE

Foreign Exchange

Foreign Reserve - $43.3bn Biggest Gainer Biggest Loser Cross Rates - GBP-$:1.31 YUANY-N52.77 Unilever FO Commodities N22.25 9.88 pc N41.2 -5.29 pc 32,413.00

Cocoa

Gold

Crude Oil

US $2,135.00

$1,228.85

$80.32

news you can trust I **TUESDAY 16 OCTOBER 2018 I vol. 15, no 162 I N300

PMB’s Executive Order 6 brings back memories of 1984 chido nwakanma

I

n ordering the contravention of the rights of citizens to enter and exit the country allegedly for suspected acts of economic sabotage, President Muhammadu Buhari’s Executive Order 6 has raised concerns for the freedom of citizens as well as the limits of the powers of the Executive. It also has the signature and style of President Buhari dating back to his first coming in 1984.

Executive Order 6 (EO6) mandates the Attorney-General and Minister of Justice to take steps to ensure that no fewer than 50 high-profile persons directly affected do not leave the country until the courts determine their Continues on page 34

Inside Listed firms’ operating profits improve as debt burden drops P. 2

₦2,285,546.95

+1.95 pc

Powered by

@

Buy

Sell

$-N 359.00 362.00 £-N 469.00 477.00 €-N 408.50 416.50

Market I&E FX Window CBN Official Rate Currency Futures

($/N)

fgn bonds

Treasury bills

Spot ($/N)

3M

6M

5Y

363.92 306.50

0.03 12.69

-0.17 13.10

0.07

NGUS DEC 26 2018 364.27

15.12

NGUS MAR 27 2019 364.72

10 Y 0.05

20 Y 0.13

15.29

15.29

NGUS SEP 18 2019 365.62

g

November date for $2bn LagosKano rail rehabilitation doubtful MIKE OCHONMA

T

here are indications that the revised commencement of rehabilitation work by November this year on the 1,800 kilometer Lagos to Kano narrow gauge rail project

FG issues $45m standby credit for interim phase

may suffer a fresh set back, BusinessDay learnt.

This is because SinoHydro, the Chinese firm that should have moved to site to commence rehabilitation of the railway

tracks is yet to do so. In August this year GE dropped its lead role in the consortium given the concession to rehabilitate the rail line to South Africa based railway giant, Transnet.

This led to Federal Government had to enter into another round of negotiation with Transnet to forestall any stoppage of Continues on page 34 L-R: Femi Oyetunji, group managing director, Continental Reinsurance plc; Godfrey Kiptum, acting CEO/commissioner of insurance, Insurance Regulatory Authority (IRA); Sammy Makove, former CEO/former commissioner, IRA, and Steve Mainda, chairman, Continental Reinsurance Limited, Kenya, at the Continental Reinsurance 10 years anniversary in Kenya.

2 BUSINESS DAY NEWS

C002D5556

Tuesday 16 October 2018

In the march to Aso rock, Atiku may have clinched final piece of jigsaw Christopher Akor

F

ormer President Olusegun Obasanjo’s endorsement of Atiku Abubakar last week in Abeokuta, is seen not only as the final piece of jigsaw necessary for sealing the support of the country’s military establishment for an Atiku presidency, but is also necessary for the unlocking of international support and acceptance of an Atiku presidency by the international community, many of whom are reported to have foreclosed the possibility of supporting president Buhari to run for another term in office.

Obasanjo and Atiku fell out at the beginning of their second term in office in 2003 and the former has been opposed to the presidential ambition of his former deputy, whom he accused of corruption. Several attempts by Atiku to reconcile with his former boss was unsuccessful and even as late as August 4, 2018, Obasanjo was reported to have said that “if I support Atiku for anything, God will not forgive me...Atiku can never enjoy my support.”

However, Atiku’s endorsement by the political and military leaders in the north who do not want to countenance another four years for president Buhari has changed the political dynamics.

Although,asoutherner,Obasanjois considered,evenifinformally,thedean of the retired generals and the powerful military god complex, who since 1966, have been, in the words of Chidi Odinkalu and Ayisha Osiri, “the single most organised and dominant actor in Nigerian politics” and have claimed the political space, “with a handful of private businessmen, to sponsor political actors and pre-determine contests for power whether through the gun or through ...elections.” His ultimate buyin is considered critical and necessary for a united front by the ex-generals.

What is more, being the single most influential ex-military and democratic ruler with a wide network of international influence and contact, Obasanjo’s support is critical to winning the support of the international community, who, as being speculated, are desperate for a change of leadership in Nigeria.

Perhaps, it is in recognition of the awesome influence of the former president that even former president Goodluck Jonathan reportedly advised Atiku last year to find a way of reconciling with Obasanjo or forget his presidential ambition; for any politician who ignores Obasanjo does so at his own peril.

Predictably, Atiku has been making the effort since he declared for the presidency to reconcile with Obasanjo and upon his endorsement by a critical section of the northern establishment, and his emergence as the PDP candidate, it was only a matter of time before he got his former boss’ endorsement. He began the charm offensive immediately after picking the ticket of the PDP by paying tribute to Obasanjo.

Expectedly, Obasanjo has begun the task of seeking international support for Atiku. Speaking at the Babacar N’daiye Lecture by the Africa Export-Import bank (AFreximbank) on the sidelines of the International Monetary Fund/World Bank meeting in Bali, Indonesia, Obasanjo said Nigeria will sign the Africa Continental Free Trade Agreement (ACfTA) once Atiku becomes president.

“Wewillhaveapresidentwhowillbe able to sign the Africa Continental Free Trade Agreement, not the one whose

hand is too weak to sign,” Obasanjo was quoted as saying at the event.

The ruling party in Nigeria, the All Progressive Congress (APC) has also been rankled by Obasanjo’s endorsement of Atiku that, just a day after, it accused the former president of pressuring the United States to lift a visa ban on Atiku. In a statement issued by its acting National Publicity Secretary, Yekini Nabena, the party said it stumbled on credible information that showed that Obasanjo had made moves to secure an American Visa for Abubakar.

“It is learnt that the former president, who during and after leaving office insisted on Atiku’s unsuitability to govern Nigeria based on his knowledge of the latter’s extensive corrupt practices while he served as Vice President, is lobbying US authorities to withdraw the ban reportedly placed on Atiku from entering the United States following a 2005 $500,000 bribery scandal that involved Atiku, his fourth wife, Jennifer and former United States Congressman, William Jefferson”, the statement read.

“Former President Olusegun Obasanjo’s intervention in Abubakar Atiku’s ban from the United States of America is evidence of Obasanjo’s legendary hypocrisy and self-serving interest in national affairs,” Nabena concluded.

The former president’s camp deniedthereport.Accordingtohisspokesperson, Kehinde Akinyemi, “Baba cannot be responding to frivolous allegations by a vicious political party.

Let them bring any shred of evidence to back their false claim,” he shot back.

“It is unfortunate that they are trying to distract the attention of Nigerians in the lead up to a general election rather than focus on campaigning on serious issues to lift the country out of its current state, Akinyemi concluded.

President Buhari has been severely criticised for his lethargic governance style, his poor handling of the economy- which is leading to widespread poverty and hopelessness, and his failure to act decisively to stop deadly herdsmen and farmers’ clashes that has led to sharp divisions and mobilisations across ethnic and primordial lines. What is more, there are those who harbour fears that the president may no longer be medically fit to continue in office due to his prolonged stay in a London hospital last year treating an undisclosed health condition.

There are feelers that key members of the international community such as the European Union, the United Kingdom, and the United States are no longer comfortable with Buhari and maywantachangeatthehelmofaffairs of the country. The migration problem and the rise of anti-immigration sentiments in the EU and US has put pressure on the leadership of those countries and they are trying to see how theycanhelptoengendergrowthinthe countries of origins of these migrants to encourage them to stay home. They may have come to the conclusion that Buhari does not have the capacity to grow the Nigerian economy. It is believed the visits of the French president, the British Prime Minister and the German Chancellor to Nigeria this year were part of the efforts to gently advice Buhari not to run for office again.

But it is understood his close aides and advisers, who have enjoyed immense powers and influence under him, have pressured him into running again, disregarding the advices from both his military colleagues and the international community.

Adesola Adeduntan (2nd l), MD/CEO, First Bank of Nigeria Limited/subsidiaries, flanked by Bashirat Odunewu (l), group executive, international banking group, First Bank; Ini Ebong (2nd r), group executive, treasury & financial institutions, and Timi George, group head, financial institutions and multilaterals, at the presentation of Best Bank in Nigeria 2018 award to First Bank in the Global Finance World Best Bank Awards 2018, held on the sidelines of the World Bank/IMF Annual Meetings in Bali, Indonesia.

Listed firms’ operating profits improve as debt burden drops BALA AUGIE

F

irms listed on the Nigerian Stock Exchange (NSE) are paying off their debt and growing operating profit, signalling the end of a credit cycle.

Analysts attribute the improvement in leverage to the relative ease in the foreign exchange market since the introduction of the Investors’ and Exporters’ window in April 2017 and the rebound in crude oil price and output that contributed to the country exiting recession in 2016.

The improved economic environment added momentum to manufacturers’ operating performance as they were able source foreign currency to import equipment and raw materials and pay suppliers.

The cumulative total debt to earnings before interest taxation depreciation and amortization (EBITDA) ratio of the largest firms fell to 3.89 times earnings in June 2018 as against 5.28 in 2017 and 14.29 in 2016, according to data gathered by BusinessDay. “Investors do not want a situation

whereby firms are too leveraged and they are left with nothing to give back to shareholders after paying interest expense,” said Robert Omotunde, analyst at Afrivest Securities Ltd. Debt/EBITDA is measure of a company’s ability to pay off its incurred debt. The ratio gives the investor the approximate amount of time that would be needed to pay off all debt, ignoring the factors of interest, taxes depreciation and amortisation.

Commonly, used by credit ratings agencies to assess a company’s probability of defaulting on issued debt, high Debt/EBITDA ratio suggests that a firm may not be able to service its debt in an appropriate manner and warrants a lowered credit rating.

Combined total debt (long and short term) of firms quoted on the floor of the exchange fell by 2.01 percent to N1.50 trillion in June 2018 from N1.49 trillion in June 2017 and it reduced by 11.15 percent between 2017 and 2016 periods.

However, cumulative EBITDA increased by 36.62 percent to N385.76 billion in June 2018 from N282.36 billion the previous year while it surged

by 215.15 percent between 2017 and 2016 periods.

Christian Orajekwe, equity analyst at Cordros Capital said that improved EBITDA can be largely attributed to price increases in key products by manufacturers in between late 2016 and 2017 in order to absorb rising costs.

“We saw 70 percent adjustment in price that fed into operating profit and margins in those periods. A lot of firms have been paying down debt. Nestle hasbeenabletogrowearningtoreduce interest expense,” said Orajajekwe.

Dolapo Ashriu, managing director and CEO of Nirvana Consultants argued that a slew of rights issue by firms has paid off given improved leverage while low consumer confidence could undermine future margins.

Flour Mills of Nigeria raised N39.9 billion by way of rights issue while Guinness Nigeria offered 684,494,631 ordinary shares of 50 kobo each at N58 per share to existing shareholders to raise about N39.7 billion.

•Continues online at www.businessdayonline.com

Lack of clarity on minimum wage causing higher economic uncertainty EMEKA UCHEAGA & BUNMI BAILEY

B

usinessesareconcernedabout the lack of clarity and timelines for the ongoing minimum wage negotiation between the government and organised labour.

While the federal government offered to increase minimum wage to N24,000, State governments proposed N20,000 accordingtoNigeria’sministeroflabour and employment, Chris Ngige.

The gap between what the government is offering and what the labour unions are demanding is not far apart bringing hope that a compromise will soon be struck between both parties. Ngige told reporters that organised labour is currently demanding N30,000 while the organised private sector reduced their demand to N25,000.

However, there is still a lack of clarity on how the minimum wage increase proposed by the government will affect its overall wage bill

or how it plans to fund this increase.

“The government needs to say how much this will affect the overall wage bill. Right now, It’s very hard to say how much it will affect the standard of living, inflation or growth,” said Charles Robertson, Global Chief Economist, Renaissance Capital.

Many economists expect that any increase in income will add inflationary pressure on the economy which is already experiencing double digit inflation. However, recent history does not support this thesis.

The minimum wage hike in 2011 which led to a 227 percent change in the minimum wage from N5,500 to the current N18,000 only increased inflations by around 100 basis points. A small sacrifice to improve the standard of living for thousands of Nigerians.

“We expect to see minimal pressure on inflation given the percentage increase as well as shrinking consumer demand. Nonetheless, this should boost demand upon implementation

especially States where activities are largely driven by workers’ spending.

Beyond the salary increase, the major factor that will alleviate poverty in Nigeria is the development of infrastructure to ease cost of living and invariable uplift the standard of living,” said Ayodeji Ebo, Managing Director at Afrinvest Securities Ltd. While some economists argue that the minimum wage hike will boost economic growth in the country, others are less optimistic there will be any significant effect on the economy.

Ebo told BusinessDay that “the proposed N24,000 by the government seems realistic than the N56,000 by the NLC. This would have positive impact on the standard of living and increase economic activity, albeit marginal as the value of the new salary in real terms may still be negative given the significant rise in prices of goods and services in the last few years.”

•Continues online at www.businessdayonline.com

Tuesday 16 October 2018

BUSINESS DAY

3

4

BUSINESS DAY

Tuesday 16 October 2018

Tuesday 16 October 2018

BUSINESS DAY

5

6

BUSINESS DAY

Tuesday 16 October 2018

Tuesday 16 October 2018

BUSINESS DAY

7

8

BUSINESS DAY

Tuesday 16 October 2018

Tuesday 16 October 2018

C002D5556

BUSINESS DAY

9

10

BUSINESS DAY

C002D5556

COMMENT

Tuesday 16 October 2018

comment is free

Send 800word comments to comment@businessdayonline.com

With Atiku, we can now balance Nigeria’s political equation

MAZI SAM OHUABUNWA OFR sam@starteamconsult.com

T

he drab Nigerian political environment has lightened up. The expected ‘unexpected’ happened.

Atiku Abubakar, former Vice -President of Nigeria was elected at the PDP primaries held in Portharcourt recently. It looked like this was never going to happen. Not just that this was the fifth attempt of Atiku to become Presidential candidate, but so much obstacle was put on his way by seen and unseen forces. As if those forces were not strong enough, the competition became even stiff in his new ‘old’ party. For the first time in the history of PDP, there were twelve solid contestants, each of whom could easily have become a formidable presidential material.

Indeed, the choice was a very tough one for the party. The party was very conscious that the country was looking up to it to produce a formidable candidate that will square up with President Muhammadu Buhari who has received endorsement from 15 million APC members to stand as the party’s candidate for the 2019 elections.

Talking about 15 million APC members, reminds me of the video I recently watched of one Mr Biggi who was trying to commit suicide by hanging on a plantain stem. A lady perhaps his wife was trying to dissuade him from taking his life. “Mr Biggi, what is your problem?” “How can APC say that 15 million people voted for the president at the congress, when they were only 7000 delegates at the convention? It then means that in the election, they will announce that 100 million people voted for Buhari” Is that all Mr Biggi?

Please do not kill yourself” the woman

STRATEGY & POLICY

MA JOHNSON Johnson is an eclectic researcher, writer and columnist whose articles cover maritime, defence, technology and public policy issues and other areas of human interests. He is a member of the BusinessDay Editorial Advisory Board)

P

oliticking has started in full swing in the world’s seventh most populous country. The political landscape is fully charged as is the case every four years. One could see drama, and on a few instances, struggle among politicians within political parties across the country for positions in various levels of

pleaded. I responded to the video by saying that Mr Biggi was not serious. If he wanted to commit suicide indeed, why would he choose to hang from a plantain stem? Nevertheless Mr Biggi made his point. Not a few Nigerians marvelled at APC’s 14.8 million voters for the president at the primaries.

Another commentator in another medium concluded that APC was only preparing our minds. I did not quite understand what he meant by “preparing our minds” The PDP primary, as I said, was keenly contested. The venue for the convention which had earlier been decided upon was reopened leading to some controversy. Luckily this potentially divisive issue was settled.

Then the gambles as to who would win the day intensified. On Saturday/ Sunday -6/7 October PDP organized what has been dubbed the most free and transparent primaries, though some argue that given the allegations of delegate buying, how free could the election be? Others however counter that delegate buying or vote buying which has become part of Nigeria’s political culture is a common denominator and therefore cancels itself out as a significant determining factor.

When the results were released, most Nigerians were pleasantly surprised that all the twelve distinguished contestants accepted the verdict without as much as a grumble. This is unusual, as in Nigeria’s political culture, no one loses elections fair and square.

Again this seems to be an evolving trend with PDP. Since President Jonathan set the record of accepting defeat without a whimper, it seems that a new culture may well be on its way. Chairman Uche Secundus and leaders of PDP deserve some commendation for this great feat. May be PDP has learnt some lessons!

This contrasts sharply with the APC primaries. Virtually all the primaries except for the 15 million-man affirmation of the president were enthralled in controversies, though the 15 million votes announced has itself generated debates across the aisle. Indeed the way some of the primaries were conducted made

‘

...the Nigerian political equation which, in one of my recent dispatches, was described as difficult to balance, now looks solvable as the number of variables has declined, while constants have increased

’

many Nigerians very sad. In Lagos, the chairman of the electoral committee sent to conduct the elections announced that no primaries were held. But three hours later following consultations with Abuja, the man shamelessly announced the results of an election which he had said never held. In Imo, the ‘militant’ national chairman announced to the world that the results submitted by two factions of the electoral committee were fake giving credence to my earlier question: is Nigeria a fake nation or a nation of fakes? The chairman of the electoral committee announced the result of his own elections in Abuja instead of in Owerri where the election was supposed to have been held citing security concerns. The secretary of the committee and other members sat in Owerri and wrote up a new set of figures that favored governor Rochas Okorocha’s son-in-law.

After the governor went to see the president, a rerun was ordered, which was boycotted by one faction, giving Okorocha’s faction leeway to return Uche Nwosu. The story is similar in many states and in Zamfara, things were so bad that even this INEC had to rule APC out of order, virtually foreclosing the possibility of APC fielding candidates in the 2019 elections.

I believe this is only a bluff by INEC as it is certain that INEC would be overruled by Abuja. Indeed APC made a real mess of its primaries that the president’s wife Aisha could not keep her cool. In

her characteristic forthrightness she blasted APC for rigging its own primaries. This is really painful as it has already began to taint the credibility of the 2019 elections. With Ekiti and Osun elections still fresh in people’s minds, the sanctity of the 2019 election results is already being put to test.

Every well meaning Nigerian must be praying that this APC government will conduct national elections that will not produce fake results. They must aim at equalling if not doing better than PDP’s performance in 2015.

Atiku’s victory has brightened up the political space. Nigerians now have a lot to talk about in beer parlours, social media, radio/TV houses, markets, motor parks and in offices. There is excitement and animation in the polity. But within one week of his emergence as PDP presidential candidate, Atiku has hit two bull eyes. First, he got President Olusegun Obasanjo to support his candidacy. This is a most significant accomplishment, almost like a miracle.

Since 2003 when Atiku as Vice President threatened to displace Obasanjo prematurely but later reneged after Obasanjo “prostrated” for him, OBJ has been at daggers drawn with Atiku. He has painted Atiku with the brush of corruption and has done everything to demonize him. Despite several apologies by Atiku and several visits to Obasanjo’s hill top mansion, Baba Iyabo had refused to forgive. As recently as one month ago, OBJ reiterated his opposition to Atiku ever becoming the President in his life time, even saying that God will not forgive him if he supports Atiku.” But within one week of winning the primary, Atiku has mobilized all the resourceshuman, material and spiritual to make OBJ swallow his words. That is certainly not a mean achievement and perhaps exemplifies Atiku’s character as a man who will not give up on any problem and who knows how to mobilize forces to move mountains. The second bull was the choice of Peter Obi, former governor of Anambra as his running mate.

Truly the South East has great men and women who could pair with Atiku but to be true, none beats Peter Obi. Peter is a tested hand who gave a sterling account of himself as the governor of Anambra

state. His landmark achievements in Anambra remain visible and audible.

He was an effective governor, he was prudent and remained ‘human’ in and outside office. Peter belongs to that rare class of state governors who governed well, brought development, security and peace to their states exhibiting the highest levels of prudence and efficient resource management. Today, Peter is very well respected and regarded not only in the South East but in most regions of Nigeria as a politician with integrity. Yes his opposition to the second term of the incumbent governor of Anambra may have rubbed off some of his cult following in Anambra state. But he remains perhaps the most popular and well respected past governor in the South East. Therefore the choice of Obi has been acclaimed all over the nation and there is a consensus that given his private sector background in banking, business and investment he will prove a very capable Vice President and will ably help the president manage the economy if they win the election.

Therefore it is looking to me like the Nigerian political equation which, in one of my recent dispatches, was described as difficult to balance, now looks solvable as the number of variables has declined, while constants have increased. Yes we have so many other presidential candidates from the newer and smaller parties, great people like Kingsley Moghalu, Oby Ezekwesili, Sowore, Fela Durotoye, Donald Duke, Olusegun Mimiko etc, the 2019 presidential elections may just be a duel between Buhari and Atiku. The third force of course, could play the role it played in Osun.

Nevertheless, it is too early to predict the outcome but it will be a real fight.

As long as INEC avoids the predicted and predictable shortcomings and bobby traps, the first real political contest between a sitting President of Northern Nigeria extraction and another candidate from the North promises to be a real derby and may turn out to be quite decisive for the future of Nigeria.

Send reactions to: comment@businessdayonline.com

It’s expedient to focus on the nation’s economy government. Politicians, young and old are neck deep into a frenzy of indirect and direct primaries that ended about a week ago in controversies.

Politicking has divided the attention of elected and appointed political office holders. Since the first quarter of 2018, much attention has not been paid to the country’s economy. With a population of almost 200 million, changes in Gross Domestic Products, income and wages, unemployment rate, inflation, interest rates, consumer purchasing index, currency strength and balance of trade, among others should be the focus of any responsible government. But political uncertainties as a result of politicking have created negative effects on the economy of the largest market in Africa. This necessitated the Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, to hint those in the government about the state of the economy.

The Governor of the CBN says that “the exit from recession may be under threat as the economy has grown by 1.5 percent in the second quarter, slower than the 1.9 percent growth recorded in the first quarter of 2018”. This, to the understanding of this writer, is that productivity generally within the economy is slowing down. Emefiele however, adduced several reasons such as the slowdown in the oil and gas sector, late implementation of the 2018 Budget, negative impact of flooding on agriculture, weak demand and low consumer spending caused by low wages, security challenges in the country, and America’s increased interest rates, among others.

The stock market is not spared from the frenzy of political activities.

The country’s stock market has lost billions of Naira worth of shares as a result of political tension. Nigerian stock market is now ranked the worst performing in Africa in 2018 contrary to its performance in 2017.

A pity, you may say. We know that

the price of oil is an important factor that affects Nigeria’s economic condition. Nigeria’s economy as an oil exporting nation reacts to changes in oil prices in the international market. Despite reports that the price of crude oil is steadily rising globally in addition to the relative peace in the Niger Delta, all have not resulted in higher revenue for the country. At the time of writing, crude oil production in Nigeria has dropped to about 1.9 million barrels/day. Despite the drop in crude oil production, the country is having difficulties getting buyers for this commodity in the international market. So, with Nigeria’s inability to control international market realities in the sale of crude oil, her economy faces significant risks in the days ahead. The reason is that Nigeria has not effectively diversified her economy. Nigeria’s economy is still largely tied to the sale of crude oil in the international market.

The proceeds from the sale of crude oil is closely tied to Nigeria’s

foreign reserve. There is drop in the country’s foreign reserve as a result of portfolio investors exiting the market. The foreign reserve has declined from US$ 47.8 billion in July 2018 to about US$ 43.61 billion in September 2018. So, to arrest the drop in the foreign reserves, the CBN suggested a further restriction on consumer goods at its last Monetary Policy Committee meeting. Yet, productivity level in the country’s consumer goods sector is low as goods already produced are in warehouses. Locally produced goods are not competitive because of high production cost. The implication of all these is that the country will continue to experience an inflow of cheap smuggled goods through neighboring countries into her economy.

Note: the rest of this article continues in the online edition of Business Day @https://businessdayonline.com/ Send reactions to: comment@businessdayonline.com

Tuesday 16 October 2018

C002D5556

COMMENT

BUSINESS DAY

11

comment is free

Send 800word comments to comment@businessdayonline.com

[#StopTheKillings]On Nigeria and the AfCFTA

RAFIQ RAJI “Dr Raji is chief economist at Macroafricaintel. He was previously an Africa Economist at Standard Chartered Bank, London, UK. (Twitter: @ DrRafiqRaji)”

O

n-the-record conversation with Ambassador Chiedu Osakwe, Chief Trade Negotiator & Director-General, Nigerian Office for Trade Negotiations, at the Financial Times Nigeria Summit on 31 May 2018 What are the specific concerns of the Nigerian government about the AfCFTA? Well, we have to break the notion of the concept of Nigeria down. If you are speaking about the private sector, if you are speaking about the stakeholders in the economy, they actually support Nigeria joining the agreement establishing the African Continental Free Trade Area. I have just been, as directed by President Buhari, I have just been on a nationwide sensitization in the six geopolitical zones that culminated in Lagos yesterday [30 May].

There is no opposition in the consultations that I led and

RÉMY EJEL Rémy Ejel is the Market Head of Nestlé Central and West Africa Ltd.

H

unger is on the rise and the number of undernourished people has returned to levels from almost a decade ago. According to the Food and Agriculture Organization of the United Nations, the number of people facing chronic food deprivation has risen to nearly 821 million in 2017, compared to 804 million the year before. In Central and West Africa alone, about 98.9 million people are undernourished.

In parallel, obesity is a global health issue that has nearly tripled worldwide since 1975, according to the World Health Organization.

In Africa, obesity rates are rapidly increasing, particularly in urban areas.

World Food Day, with the theme ‘zero hunger world by 2030 is possible’ reminds us of the imperative to put people’s wellbeing at the heart of our food system.

The solutions exist. What we

undertook, on the basis of the directive from the president on the AfCFTA. However, what a number of stakeholders are ultimately saying is there should be greater attention by government to the longstanding systemic problems in the Nigerian economy that have an effect on competitiveness; reduce the cost of money, improve security, with regard to security of life and property, number three, energy must be predictable and must be cost-effective, continue with the good work of the government on improving the enabling environment for business, put in place trade remedy infrastructures to offset dumping in the Nigerian economy to countervail trade distorted subsidised products in the Nigerian economy and also set up a system of global safeguards with regard to any import surges that would affect the Nigerian economy.

What they have also given us as feedback in this extremely valuable nationwide exercise is to establish a mechanism for coordination, inter-agency coordination in the course of implementing the agreement establishing the African Continental Free Trade Area and make sure that the mechanism also engages in monitoring the effects from the AfCFTA. So, just to repeat, this has been a 2-month exercise that ended yesterday [30 May 2018], hugely valuable, great feedback, no opposition, I mean there are individual voices here and

‘

Can I tell you that many of my African counterparts, the chief trade negotiators, are now in regular contact with me, asking me if I could share the Nigerian model of domestic sensitization and consultation that they now need to use it domestically

’

there, ideologically inclined, who consider that trade openness is an issue.

But since Nigeria led the negotiations and had some time to maybe get some of these inputs and feedback, and what is on top of most peoples’ minds and what they wonder, is why didn’t that occur before?

Well, the question is a very simple one. There were consultations at the general level before the framework agreement was finalised in the negotiations on the 8th and 9th of March in Kigali. Remember that I am the chairman of the negotiating forum that put that agreement

together. So, there were interagency consultations, amongst the agencies in Nigeria here that I basically led. I sent regular reports to the economic management team of the country. But the purpose of this particular consultations that was directed by the president is also absolutely, absolutely correct, after the framework had emerged before we now go into the specifics regarding the application of the modalities in the framework you then need to get the specific feedback from the stakeholders.

So here is the issue. Of course we consulted on the framework, but you could not consult on the specifics which had not yet emerged and you could not also consult on the framework that was adopted before it was actually adopted. So, what is happening is frankly normal.

This is the way it should be. And the process has now been completed. That is the process of sensitization on the substance of the framework agreement and what we need to do over the next few days would be to prepare a report for the review of the presidential committee on the agreement establishing the African Continental Free Trade Area and it would be submitted to Mr President by the ministers with competent responsibility.

What timelines are you looking at towards eventually signing the agreement?

Well, the timeline would be a decision by the president. The president is the elected head of the federal government of

Nigeria. He decides one way or another.

Final question, thank you for your time. Were other African countries surprised by Nigeria’s seeming reluctance at first to sign the agreement and why perhaps wasn’t the president advised to do like the South African president did, which is to go there, endorse it but not sign the actual agreement?

Couple of points. Nigeria is sovereign. This is a sovereign country and Nigeria decides what it does and when it does it. Secondly on the question of the surprise of other African countries. I mean, I am in touch with most of them. A number of them also understood that what Nigeria decided to do, that is to sensitize and consult, nation-wide, industry-wide, and sector-wide, was entirely consistent with the way a treaty change of this magnitude should be handled. So, there is understanding. In fact, the element of surprise that may have been there is no longer there. Can I tell you that many of my African counterparts, the chief trade negotiators, are now in regular contact with me, asking me if I could share the Nigerian model of domestic sensitization and consultation that they now need to use it domestically. And a number are inviting me to their own countries to assist in their sensitization and consultation process.

Send reactions to: comment@businessdayonline.com

World Food Day: A zero hunger Africa is possible by working together need now, is for all stakeholders, from farm to fork, to join hands so that everyone in Africa can thrive and live a healthier, happier life.

Affordable nutrition for all At the top of the agenda is a demand to make healthy, nutritious and affordable food accessible to everyone on the African continent. Harnessing the power of the private sector, Partners in Food Solutions works with the Bill and Melinda Gates Foundation, Dangoté and TechnoServe in Nigeria to combat malnutrition by promoting fortified foods for local markets, as part of the Strengthening African Processors of Fortified Foods project.

In Central and West Africa, Nestlé is also helping to do this through its well-known brands, such as Maggi, Milo and Nido.

Last year, it sold 67 billion fortified food servings most of which were ‘popularly positioned products’, i.e. smaller servings of affordable nutrition.

Decent living for all food workers This is critical to encourage more investment at every step along the

food value chain, and to ensure the sustainability of our food supply in Africa. Central to this is the creation of good jobs and provision of decent living conditions for all food workers.

To encourage the generations to come to continue farming, farmers must earn a decent living. Investing in local food transformation is also important to boost local employment while reducing food waste and increasing the affordability of food and beverages.

Working with independent partners like the Fair Labour Association, International Cocoa Initiative, World Cocoa Foundation and UTZ Certified, the Nestlé Cocoa Plan in Côte d’Ivoire and Ghana helps farmers to live a better life by increasing increase profitability through training programmes and addressing issues such as child labour, gender inequality and poor social conditions.

Seed the future Research & development is also critical. Focusing on the production of foods that are more nutritious, increasing yield and producing climate resistant crops will go a

long way in ensuring that there is sufficient food to feed the population in 2050.

HarvestPlus develops and promotes biofortified food crops that are naturally rich in vitamins and minerals. Partnerships with the private sector helps sustain its impact.

Nestlé is leveraging this pioneering work by integrating biofortified maize richer in vitamin A in one of its beloved brand in Nigeria, Golden Morn.

Guiding consumers to make the right food choices is the last frontier. Including nutrition education in school curriculums, building parents’ health knowledge and providing easy to understand nutrition information on packages are easy ways to help families adopt healthier diets.

Call to action Overall, there is a need for multistakeholders to work closer with each other. Governments can create a conducive environment for a healthy, sustainable food system through the right regulatory & policy framework.

Food companies can further the nutritional value of their

products by fortifying them with vitamins and minerals, renovating them to include more fruits and vegetables, promoting nutritious foods choices through their close relationships with consumers and adopting responsible marketing practices such as the Nestlé Policy on Marketing Communication to Children.

Retailers can also make h e a l t h i e r f o o d s m o re v i s i b l e and more attractive at point of purchase and reduce impulsive purchase of foods that are high in salt, fat and sugar. Investing in nutrition and focusing on the health, means nurturing healthier future generations, healthier future populations and wealthier economies.

With a purpose of enhancing quality of life and contributing to a healthier future, Nestlé will continue to play its part, and advocate for collaboration by all actors to build sustainable food systems. There is no doubt that businesses are a vital part of the solution to achieve a zero hunger world by 2030.

Send reactions to: comment@businessdayonline.

12

BUSINESS DAY

C002D5556

Editorial PUBLISHER/CEO

Frank Aigbogun EDITOR Anthony Osae-Brown DEPUTY EDITORS John Osadolor, Abuja Bill Okonedo NEWS EDITOR Patrick Atuanya EXECUTIVE DIRECTOR, OPERATIONS Fabian Akagha EXECUTIVE DIRECTOR, DIGITAL SERVICES Oghenevwoke Ighure GENERAL MANAGER, ADVERT Adeola Ajewole ADVERT MANAGER Ijeoma Ude FINANCE MANAGER Emeka Ifeanyi MANAGER, CONFERENCES & EVENTS Obiora Onyeaso SUBSCRIPTIONS MANAGER Patrick Ijegbai CIRCULATION MANAGER John Okpaire DIGITAL SALES MANAGER Linda Ochugbua GM, BUSINESS DEVELOPMENT (North)

Bashir Ibrahim Hassan

GM, BUSINESS DEVELOPMENT (South) Ignatius Chukwu

Tuesday 16 October 2018

Nigeria’s poor economic performance

A

recent analysis

by BusinessDay sh o w s that th e economic policies of the Buhari administration have had a deleterious effect on the stock market over the last three years. The Nigerian Stock Exchange broad index has only gained one percent in the last three years compared to the gains under former president Jonathan and Obasanjo which returned 29.7 percent and 904.2 percent respectively.

The stock market index is popularly used as a proxy for the performance of companies in a country as stock prices are determined by estimating the present value of future cash flow of a business. If investors feel that companies will do well over a foreseeable future, stock prices typically rally. The index tends to retreat when risks are higher and the tendency for companies to perform well financially is lower.

Also, during the same period, the stock market returned just three percent making it the worst market performance by any democratic President of Nigeria excluding former President Musa Yar’Adua who died in power.

The conclusion is inescapable: Despite stated attempts of the government to improve the ease of doing business, Nigeria has been quite inconducive for businesses since 2015 and this is traceable to the policy actions and inactions of the government.

Upon ascending to power in 2015, it took six long months for the Presidency to name, screen and approve cabinet ministers, a process that never exceeded 2 months since 1999. The political uncertainty during this period pulled the index down by around 14.87 percent before the ministers were finally appointed in November 2015.

More trouble followed in 2016 as the problem moved from political to economical.

The continued decline in crude oil prices, followed by the first economic recession in 25 years weighed heavily on stock prices in 2016. Also in 2016, Nigeria suffered the biggest currency devaluation since 1999 in 2016 when official Naira to US Dollar exchange rate moved from the official figure of 197 N/$ to 305 N/$. In the parallel market, the Naira at a time exchanged for N500 to the Dollar.

The inflation rate in the country doubled as a result of huge currency devaluation as inflation

neared 20 percent at its peak in 2016.

As a result of the economic headwinds, 2016 became the year of the great loss for companies on the local bourse. A total of 17 companies from the NSE 30 index reported significant losses on the books as the economy slumped to a full year negative growth of -1.6 percent.

The stock market fell by around 9.41 percent in the first five months of 2016 as the administration delayed five months to pass an economic stimulus budget to pull the economy out of recession. The stock market rallied 4.56 percent till year end after the budget signing which helped to offset some of the losses earlier in the year, bringing the total market loss in 2016 to 5.27 percent.

In 2017 as the economy rebounded to a full year growth of 0.8 percent, the stock market rallied 42 percent as investors got excited by the economic recovery story which was largely supported by the strong rebound in crude oil price.

The stock market this year has given up a significant amount of its gains from last year as the NSE index is down 9.36 percent year to date largely due to the political upheaval in the country as the

general elections draw closer.

The average economic growth during President Olusegun Obasanjo’s regime was 8.5 percent between 1999 and 2007. Under the stewarship of President Goodluck Jonathan between 2011 and 2015, Nigeria’s economy expanded an average of 4.7 percent, almost half the growth achieved by his predecessor. But under President Buhari, average economic growth fell to a paltry 0.61 percent between 2015 and 2017. If economic growth improves to 2.1 percent this year, average economic growth under Buhari will improve to 0.98 percent.

With analysts expecting stock prices to decline further as political uncertainty ravages the stock market, it is not unlikely that come February next year, the market performance under the current administration will fall into negative territory.

These evidences are clear enough: the administration has not managed the economy well.

But rather than listen and turn a new leaf, it continues on the same ruinous path while disingenuously blaming past administrations for the woes of the country.

With such an attitude, no one needs a prophet to know that things will only get bad!

HEAD, HUMAN RESOURCES Adeola Obisesan

EDITORIAL ADVISORY BOARD Dick Kramer - Chairman Imo Itsueli Mohammed Hayatudeen Afolabi Oladele Vincent Maduka Keith Richards Opeyemi Agbaje Amina Oyagbola Bolanle Onagoruwa Fola Laoye Chuka Mordi Mezuo Nwuneli Charles Anudu Tunji Adegbesan Eyo Ekpo

ENQUIRIES NEWS ROOM 08023165438 08169609331 Lagos 08033160837 Abuja

}

ADVERTISING 01-2799108 08034743892 08033225506 SUBSCRIPTIONS 01-2799101 07032496069 07054563299 DIGITAL SERVICES 08026011296 www.businessdayonline.com The Brook, 6 Point Road, GRA, Apapa, Lagos, Nigeria.

01-2799100 LEGAL ADVISERS The Law Union

MISSION STATEMENT To be a diversified provider of superior business, financial and management intelligence across platforms accessible to our customers anywhere in the world.

OUR CORE VALUES

BusinessDay avidly thrives on the mainstay of our core values of being The Fourth Estate, Credible, Independent, Entrepreneurial and Purpose-Driven.

• The Fourth Estate: We take pride in being guarantors of liberal economic thought • Credible: We believe in the principle of being objective, fair and fact-based • Independent: Our quest for liberal economic thought means that we are independent of private and public interests.

• Entrepreneurial: We constantly search for new opportunities, maintaining the highest ethical standards in all we do • Purpose-Driven: We are committed to assembling a team of highly talented and motivated people that share our vision, while treating them with respect and fairness. www.businessdayonline.com

BUSINESS DAY

Tuesday 16 October 2018

Advertising spend in 2017 drops by 3.3 per cent Stories by DANIEL OBI Media Business Editor

N

igerian advertisers spent less on Abovethe-Line product promotions last year compared to 2016. At N88 billion in 2017, the figure was less 3.3 percent less than N91 billion spent in 2016.

Advertising spend in 2017 was the lowest spend figure in the last five years while the highest spend was in 2013 at N103.8 billion While the country was said to have gotten over the economic recession in 2017, only the spend on the TV medium grew among the other media vehicles in the Above-the-line components -Radio, Press and Billboard.

Television spend grew from N31.5 billion in 2016 to N33.5 billion in 2017.

Spend on radio reduced from N12.6 billion to N12.4 billion, spend on Outdoor went down from N28.8 billion to N24.6 billion while

Omotola Bamigbaiye-Eletu, marketing manager, Malta Guinness & APNADS; Bilikiss AdebiyiAbiola, general manager, LASPARK; Akintunde Oyebode, executive secretary/CEO LSETF, at the LASPARK ‘Fair in the Park’ that held recently at Kanu Ndubuisi Park, Alausa, Lagos.

spend to Press decreased from N18.1 billion to N17.6 billion.

According to figures in Mediafacts released by

MediaReach for advertising spend, first and second quarters of 2017 were sluggish recording advertising spend of N21 billion and

Marketers continue to struggle with integrated campaigns - Survey

F

ewer than one in five marketers are very confident in their ability to integrate data for insights, impacting the ability to measure and prove ROI. Marketers globally continue to struggle to assess their marketing performance due to disconnects in strategies for reaching consumers. A failure to understand cross-channel behaviour and uncertainty around optimising their media investment are the primary reasons.

The findings are according to the Insight Division at Kantar’s latest annual state of marketing study, Getting Media Right, released recently.

Kantar which is part of WPP is foremost world data, insight and consultancy company.

The result in these disconnects is that many marketers are missing opportunities for growth, with 40% still using ROI measurement approaches that are primarily focused on short term-sales, despite an overwhelming majority of respondents, 85%, saying that

the most important approach to ROI is a blend of both short and long-term measures.

The report said Getting Media Right examines the current state of marketing in a connected world and it is based on input from 468 senior marketers spanning advertiser brands, media companies and agencies globally. It reveals an industry that continues to diversify its media usage and increasingly requires better understanding of how ideas, content and media need to be activated in tandem to create holistic marketing that drives brand growth.

Key findings include: While confidence has grown from last year, less than half of advertisers are sure of their ability to create insights from data. Even within agencies and media, fewer than 20% are very confident, indicating the industry is struggling to manage all the data that is available. It is also found out that creating insights is dependent upon pulling together the right information and tools to monitor and

optimize campaigns, yet marketers are struggling to connect the dots on performance across channels. 78% strongly or somewhat agree that it is difficult to assess how well brands perform across channels.

The study also revealed that 47% of marketers say they have moved the optimisation process up earlier in their campaigns than they were doing last year, with most now starting in the ideas and strategy phase. Female marketers are leading the charge on earlier optimisation, with 50% indicating it has moved earlier in the campaign lifecycle (vs. 44% of male marketers) Advertiser confidence in their media mix has grown slightly from last year, but 45% are still not confident that their organization has the optimal media mix, of which only 13% say they have very integrated media strategies.

Eighty-two percent of marketers believe they have integrated marketing strategies, but their efforts are not translating fully to consumers.

20.8 billion respectively.

Third and fourth quarters spend were N22.9 and N23.3 billion respectively.

The Mediafacts shows

that regional spread of the total spend shows that advertisers spent N56.1 billion for Lagos market alone accounting for 63.7 percent of total spend. Spend in North Central was N7.9 billion accounting for 8.9 percent while spend in South South region was N7.3 showing 8.3 percent.

Spend in South West media channels was N 6.7 billion, South East N5.5 billion, North West N4 billion while North East was N0.5 billion.

The study by MediaReach further reveals that GSM service sector was the highest spender at N15.4 billion out of the total spend of N88 billion accounting for 17 percent. Personal Ad, Corporate and Banking and finance followed with distance of N7 billion, N6.2 b and N6.1 billion respectively. Cable TV spent N3.4 billion, Lager Beer category spent N3.2 billion while Soft drinks category spent N3.1 billion. Noodles sector spent N2.5 billion in 2017 while Public sector spent N1.1 accounting for one percent.

13

Digital PR summit to explore future of AI on communication professionals

T

he Lagos State Chapter of the Nigerian Institute of Public Relations, is set to host the third Lagos Digital Public Relations Summit, themed: The Future of the Communication Professional: Artificial Intelligence, Augmented Reality, Machine Learning & Data Driven Content.

The Lagos Digital Public Relations Summit is a twoday experiential gathering of communicators focused on achieving collective intelligence to equip communicators in corporate and public affairs with high-level digital public relations strategies, tactics and how-to’s so they can do their jobs better and lift their social media campaign results.

The Summit is open to Generation X and Millennials managing communications for government, corporate, media and non-governmental organizations to equip and expose them to contemporary techniques and glean new insights into the fast-growing digital media space for modern-day strategic communication practice.

The Chairman, Lagos State Chapter, Olusegun McMedal, said that, “The third Lagos Digital PR Summit intends to demystify the concept of machine learning and artificial intelligence (AI).

New Television brand, TCL enters Nigerian market

I

n its quest to redefine Nigerian viewing experience, The Creative Life Television otherwise known as TCL TV has been unveiled in Lagos.

The launch of the product was witnessed by major home appliance dealers across Nigeria and top business leaders.

The new television brand which presently is rated number 3 in the world and Americas fastest growing band birthed in Nigeria with improved picture resolution, viewing experience and a value based pricing model.

While introducing the product to media and dealers in Lagos, the Chairman of TCL, Adnan Mehdi said, “TCL

the fastest growing brand in technology is growing to become the number one in the nearest future. We are doing everything possible to offer this premium brand to home in Nigeria.”

Hassan Mehdi MD said “We have established a new entity for TCL to build trust , transparency and confidence.

We hope you enjoy this experience.”

TCL being a global manufacturer of smart products and provider of internet application services was founded in 1981. It has grown from a small joint venture producing audio tapes in Huizhou into a global corporation, which engage in a wide range of

business such as telephone, TV, mobile phones, refrigerators, washing machines, air conditioners and many more.

According to Mehdi, ever since its invention in 1981, the brand has globally gained recognition with 19 years of international development history that has produced 13,173,307 sets taking 27 per cent in the North American Market, South America 47 per cent and Europe 73 per cent.

He said the brand is looking to take a major chunk of the entire African market with its entry through Nigeria.

The marketing manager of TCL, Jeff Yao said, this brand has been designed to meet consumers’ television demand. “Our cumulative investment is over $278 million and we are committed to serving our customers to bring our global community together” he said.

To achieve this, we have designed corporate social responsibility activities that will directly impact the communities and innovative advertising techniques that will help dealers and retailers penetrate the market.”

14

BUSINESS DAY

C002D5556

Tuesday 16 October 2018

BRANDING

How Local affinity strengthened FoodCo Stores in Nigeria’s formal retail market Between 1960s and now, Nigerian formal retail market has witnessed entry and exit of various stores. In the last 10 years, the formal retail market is re-emerging strongly due to a number of factors which include cashless transaction. But in the last 36 years, FoodCo stores, a local brand retail outlet with dominance in Ibadan, Oyo State of South West Nigeria is still growing strong.

With one store in Jericho of Ibadan in 1982, it now has seven outlets, all domiciled in Ibadan. This report assesses the formal retail market and identified local affinity as FoodCo market strength.

W

ith an estimated population of about 170 million people and rapid urbanization, Nigeria’s formal retail sector is widely acknowledged as an exciting and lucrative prospect for investors. Rising from the ashes of foreign owned chain stores like Leventis, UTC, Kingsway amongst others that ruled the organized retail space from the 60s-80s, the sub sector is witnessing a resurgence of sorts. The entry of foreign owned retail outlets like Shoprite, Spar, Game and others within the last 10 years seem to have infused a breath of fresh air. Local supermarket chains with branches scattered across the country are also joining the fray. These include brands like Addide, Best Choice, Good Price and a host of others largely positioned in the small neighbourhood store category. Currently, there are more than 20 of such local retail brands in operation across Nigeria and more are expected to spring up in the sector.

Presently, Nigeria’s informal retail sector, which comprises stalls, kiosks, open markets amongst others accounts for about 80 percent of the retail market but experts opine that the dominance may be fast eroding. In fact, The BusinessDay Nigerian Retail Sector Report, a report that x-rayed Nigeria’s retail sector, not only affirmed that the emergence of local and foreign owned retail chain stores and other structured retail outlets was not only eroding Nigeria’s traditional or informal retail space but the country has the capacity to support the entry of even more formal sector players. That was in 2014. Since then more retail chains have made their way into the market. Some of the factors responsible for the growth of the organized retail space are convenience, enhanced shoppers experience, neat and comfort, ambience, reasonable guarantee of topquality products amongst others. However, for most players, the real battle ground is in pricing. Indeed, the cost element has become one of the strongest weapons the retail outlets deploy in their quest to win the pocket share of consumers.

L-R: Femi Odugbemi, director of Academy, MultiChoice Talent Factory; Lagos State Commissioner for Arts, Culture and Tourism, Steve Ayorinde; deputy minister of Tourism, Arts and Culture Ghana, Ziblim Barri Iddi and John Ugbe, managing director, MultiChoice Nigeria during the launch of MultiCoice Talent Factory in Lagos recently.

MultiChoice Talent Factory opens W/Africa Academy to change poor African narratives

T

Still, most of the operators have had to dig deep and seek out other creative ways of staying ahead of competition.

Take FoodCo Nigeria limited, a diversified consumer goods company with interests in retail, fast food and manufacturing, based in Ibadan, Oyo State. Established back in 1982 as a fresh food store providing meat and chicken, FoodCo is today one of the top-10 leading supermarkets chains across the country and the second largest supermarket chain in South-West, Nigeria, outside of Lagos. Additionally, it is the number-one retail chain in Ibadan and, by extension, Oyo State.

Over its 36-year-old history in Ibadan, FoodCo has forged a strong equity for itself, one that has endeared it to the people of city. It would appear that the special connection with the people of the city is one of the brand’s biggest strength, especially in a highly competitive market like Ibadan. FoodCo recently opened a new outlet in Akobo area of Ibadan, increasing its chain of stores to seven outlets in the city. The throng of people that trooped to the new outlet was testimony of the brand’s popularity in Ibadan.

And the crowd wasn’t just there to witness the birth of another FoodCo baby into the boisterous city. For most of the day, the supermarket complex was busy as the sales attendants could barely keep up with the demands of the customers trying to take advantage in on the bargain deals on offer.

Speaking on FoodCo’s longevity, Ade Sun-Bashorun, Executive Director of FoodCo Nigeria Limited stated that

the supermarket and its fast food arm has been able to serve generations of families residing in Ibadan. He said: The longevity of our business has allowed us to serve families for generations. Now we have almost a third generation of families that are now our customers. So customers who were young mothers or young folks in the 80s when we started, their children grew up shopping here and more importantly they grew up socializing. Now they have children who are 10, 12, 14 and those children also are shopping here.

According to him, the brand’s longevity has allowed it to build not just professional relationships but also personal relationships with customers. He said: “Affordability, quality products and convenience are really the elements we are driving on to deliver on this vision. But for us it’s beyond just growing an enterprise. It’s about what we do for our people and for our communities. So we spend a lot of time and energy training staff, helping them develop, putting tools in place for them to continue their education and we also spend a lot of time and energy for our communities and things we can do to develop them and make contributions back to them for supporting us.

We have been able to provide such a large array of products and more importantly at very affordable prices not only because it is a core of our strategy but also because since we have been around now for 36 years, we have a deep history with over 300 suppliers who range from large, national

manufacturers as well importers of the variety of goods which we don’t procure or produce locally.

Some of trade partners commended Foodco for weathering the environmental storm in the last 36 years, serving customers. Dayo Omoluyi, territory sales manager for Reckitt Benckiser in Oyo State said Reckitt Benckiser has been partnering with FoodCo since the birth of the food company. The partnership with FoodCo has been good because FoodCo is another outlet for the multinational company to serve the customers.

Imogiri Eriaka, channel manager for West region, Unilever said with super market channel coming up as a modern trade business Unilever focuses more on top chain outlets like FoodCo that has many branches saying that since January, 2018 FoodCo business has doubled in size with Unilever. Also Kayode Olalekan, sales development manager for Cadbury South West said the partnership with FoodCo has been successful.

“Today FoodCo business is fast growing and I see FoodCo as Nigerian Walmart as it is ready to expand beyond the South West region.

The company identifies its strong brand equity with the people and it is leveraging that strength to be the foremost retailer of consumer products in South-West Nigeria and beyond.

As formal retail market evolves, price, quality of products and convenience will continue to strengthen relationship and create traction to consumers.

he MultiChoice Talent Factory Academy in West Africa was officially opened recently at a highly-anticipated launch ceremony in Lagos. The launch of the Academy, expected to provide Africa’s next generation of film and television storytellers with a 12-month training programme, attracted commendation for MultiChoice by the Lagos State Government.

Speaking at the launch of the MultiChoice Talent Factory Academy (MTF), the Lagos State Commissioner of Tourism, Arts and Culture, Steve Ayorinde, commended MultiChoice Nigeria for giving young Nigerians selected from across the country an opportunity to understand the business of film production.

“What MultiChoice did deserves huge commendation and these 20 students should consider themselves lucky.

They need to acknowledge the fact that stakeholders in the entertainment industry in Nigeria and across the continent expect a lot from them and the students on their part should make good use of this opportunity given to them” he said.

While expressing his appreciation to MultiChoice for organising this laudable initiative

in Nigeria, Ghanaian Deputy Minister of Tourism, Arts and Culture, Ziblim Iddi, congratulated the 20 students selected for the inaugural edition of the MTFA and charged them to be committed to learning as this is a life changing opportunity.

Managing Director, MultiChoice Nigeria, John Ugbe said: “The film and television industry is the pioneer of creative industries in Africa and it is particularly relevant as a tool for shaping the African narrative. We have been telling authentic and wellproduced stories that only Africans themselves can tell.

Nevertheless, there is a lot of raw talent that need to be nurtured and polished. The Academy will give such talent the opportunity to hone their skills, thereby increasing the pool of world-class talent within the industry.

It’s also about teaching the selected candidates the business of film and television”.

Ugbe further praised the support of critical partners saying, “We are incredibly fortunate to have the calibre of broadcast partners that we do in M-Net and Africa Magic who believe in this project and have been on this journey with us from the very beginning”.

Kufre Ekanem departs Nigerian Breweries, kickstarts Philosoville Limited

A

fter five years as Corporate Affairs Adviser and member of the Executive Committee of Nigerian Breweries Plc, Kufre Ekanem has resigned from the brewing giant with effect from October 1, 2018.

According to sources close to the respected communications expert and poet, Ekanem completed his notice period on September 30 and has since commenced his consulting dream with Philosoville Limited, a Culture, Marketing and Public Relations consultancy company.

In a pre-exit send-forth bar party organised for him, the Managing Director of Nigerian Breweries Plc, Jordi Borrut Bel, while thanking Ekanem for his impactful service to the company, said: “In his five-year career in Nigerian Breweries, Kufre introduced

Kufre Ekanem

a proactive, non-crisis stakeholder relations programme to the company which ensured that NB had a robust, solutionfocused relationship with government, regulatory organisations, host communities and media across all authority levels around the country.

“Under his leadership, NB enjoyed positive media narratives across platforms and channels year on year, suffered no community-based disruption of operations and faced zero penalties from regulatory investigations or infractions.

BUSINESS

Tuesday 16 October 2018

COMPANIES & MARKETS

DAY

15

Philips launches first appbased portable ultrasound system

Pg. 17

C O M PA N Y N E W S A N A LY S I S A N D I N S I G H T

Citigroup net income rises 12% on low effective tax rate, cost of credit in Q3 CYNTHIA IKWUETOGHU

C

itigroup Inc., the parent company of Citibank Nigeria weekend, reported a 12 percent growth in net income for the third quarter 2018 of $4.6 billion as compared with its previous figure in the same period in 2017.

The increase in net income reflected a lower effective tax rate as well as lower expenses and cost of credit, as revenues remained largely unchanged, as explained in a press release from the group. The group’s effective rate was 24 percent in Q3 2018 as compared with 31 percent in Q3 2017.

According to the press release, revenues of $18.4 billion were largely unchanged from the prior-year period. Excluding the gains on sale of about $580 million of a fixed income business in 2017 period and $250 million of an asset management business in Mexico as well as the impact of foreign exchange translation, revenues increased 4 percent driven by growth in Institutional Clients Group (ICG).

“Our results this quarter showed solid year-on-year revenue growth across many of our businesses including Fixed income, Treasury and

L-R: Gregory Jobome, member, board of trustee, Risk Management Association of Nigeria (RIMAN); Christian Okoye, deputy director, banking supervision, Central Bank of Nigeria (CBN); Uche Olowu, president/chairman of council, Chartered Institute of Bankers of Nigeria, and Magnus Nnoka, president, RIMAN, during a mandatory Seminar for Certified Risk Managers in Lagos.

Trade Solutions, Securities Services, the Private Bank and our consumer franchise in Mexico,” Michael Corbat, CEO of Citigroup said.

Cost of credit was approximately $2 billion, a 1 percent decrease primarily driven by lower reserve builds in Citi Retail Services and Citi-Branded Cards in North America Global Consumer

Banking(GCB)andpartiallyoffset by a net reserve build in ICG. Operating expenses of $10.3 billion in the third quarter 2018 also declined by 1 percent, as higher volume-related expenses and investments were more than offset by efficiency savings and the wind-down of legacy assets, the group explained further.

“We also grew loans and deposits while continuing to prudently manage risk as demonstrated by the stability of our credit portfolio. We returned $6.4 billion of capital to common shareholders through buybacks and dividends during the quarter,” Corbat said.

Total loans and deposit in the third quarter got a boost by

3 percent and 4 percent respectively with Loans totalling $675 billion and deposits totalling $1.005 trillion.

“And over the past twelve months, we’ve reduced our common shares outstanding by over 200 million or 8 percent. Through a combination of earnings growth and capital return, our earnings per share

were 22 percent higher than one year ago.”

Earnings per share increased by 22 percent to $1.73 from $1.42 per diluted share in the prior-year period, driven by the growth in net income and an 8 percent reduction in average diluted shares outstanding.

For nine months ended September 2018, the CEO said the group had grown their consumer and institutional revenues by 4 percent and operated with an efficiency ratio of 57.3 percent and a return on Tangible Common Equity of 11.2 percent.

Citigroup’s net income increased by 14 percent to $13.7 billion as compared with $12.1 billion in the prior-year period and revenue rose marginally by 1 percent to $55.7 billion as of September 2018.

“We are firmly on track to deliver on our full year 2018 financial targets. At the same time, we continue to make targeted investments which will fund future growth and enhance our ability to serve clients,” Corbat said.

Shares of Citigroup rose 2.14 percent to N69.84 at the close of the market on Friday in New York Stock Exchange. The stock had declined 6 percent this year through Friday (i.e. year-to-date).

Good Citizen Radio partners Domino’s Pizza for giveaways

Avon HMO partners Piggybank.NG to improve healthcare access for Nigerians

T

ith less than 5 percent of the Nigerian population under any sort of healthcare cover, Piggybank.NG and Avon Healthcare Limited (Avon HMO) have announced a strategic partnership that will make a significant dent in this statistic.

This partnership will provide health insurance plans to users with flexible monthly payments. The companies collaborated to create a unique health care plan called AvonFlex, which is focused on affordability and flexibility for Piggybank.NG users.

Nigeria is home to over 67 million youth, with deeply limited understanding of the importance of health insurance and equally limited healthcare coverage. While Avon HMO has used its platform to advocate for health education in part by pioneering the sale of healthcare plans online and launching straight to consumer retail plans, it is pushing the boundaries further by leveraging on

he Good Citizen Radio Show, a show promoting active citizenship, created by CSR-in-Action Advocacy, and sponsored

by ACT Foundation, has partnered Domino’s Pizza for giveaways.

With this partnership, callers on the show will stand a chance to win boxes of Domino’s new American Classic Cheeseburger pizzas through proffering correct answers to weekly quizzes. Also, participants who engage us via our various Good Citizen social media platforms by providing correct answers to questions posed also stand a chance of winning Domino’s Pizza.

Seeing as the show is aimed at young adults, the partnership with Dominos would mean that they get rewarded while they enjoy interesting discussions from the show’s presenters, Bekeme Masade (chief executive of CSR-in-Action) and Tosyn Bucknor (popu-

lar on-air personality).

The Good Citizen Radio Show was launched in May 2018 in partnership with Inspiration FM and is a first of its kind radio show, geared towards the discourse around practical active citizenship opportunities, and through that, motivates Nigerian citizens to adopt good ethics and values, towards the transformation of our nation.

This will encourage a unified and collective approach for solving national issues, stimulate community dialogue and discussions on good citizenship and recognise and reward outstanding efforts. The show airs at 8p.m. every Friday.

The chief executive, CSRin-Action, Bekeme Masade, stated, “I love cheeseburgers, and I’m sure that show enthusiasts would be happy to share in the cheesy delight that are Domino’s’ American Classic Cheeseburger pizzas. I truly believe that this partnership will

foster progress in promoting good citizenship across the nation.”

In the same vein, marketing manager of Dominos Pizza, Ilyas Kazeem, asserted that “their support of the Good Citizen Radio Show is in line with their brand strategy of creating happy moments in the society via their brand offerings in promoting togetherness and increase in love and friendship amongst Nigerians, which is intended to result in socio-economic development. The pizza thus serves as a morale booster in this regard.”

The show, which airs every Friday on Inspiration 92.3FM, with intensive studio discussions with hosts Bekeme and Tosyn, on leadership, democracy, gender equity, payment of taxes, waste management other aspects of active citizenship, has gained a lot of listenership with over 500,000 listeners every episode since June 2018.

W

‘fin-tech’ to improve healthcare access.

With Piggybank.NG widely trusted by millennials as Nigeria’s fastest growing digital savings platform, both companies believe that the gap between access and affordability by can be further bridged with AvonFlex.

According to Adesimbo Ukiri, CEO of Avon HMO, “After awareness of healthcare plans and their impact, affordability is the second greatest impediment to more widespread healthcare coverage among Nigerians. AvonFlex is a healthcare plan that allows Piggybank.NG users pay for comprehensive health coverage in installments, instead of a yearly lump sum.

With some plans starting as low as N60/daily, AvonFlex offers value, flexibility and yet another viable option to access healthcare.”

“Partnering with Avon HMO to democratise access to and payment for healthcare plans was a no-brainer for us,” Terry Kanu, head of Business Development, Piggybank.NG,

says, noting, “Avon HMO is a market leader, and exactly the type of innovative partners we like to work with.

“We are constantly looking for new ways to better serve and bring millennials into these financial services.

With this new partnership, Piggybank.NG users will not only continue to save, but also have access to affordable health care.”

AvonFlex provides an option that directly addresses the needs of previously unserved consumers such as entrepreneurs, young adults, students, domestic staff, and others who cannot pay the lump premium required to get a healthcare plan.

Piggybank.ng is an automated savings platform that gives Nigerian millennials the opportunity to save money periodically towards a target.

Piggybank.ng provides a free platform that allows users to put aside as little as N100 a day to save up to a target and restricts withdrawals until a convenient date set by the user.

16

BUSINESS DAY

C002D5556

Tuesday 16 October 2018

COMPANIES & MARKETS FG considers saving more, investment more to raise fiscal buffers ... to revive aluminium sector by privatising ASCON HOPE MOSES-ASHIKE in Bali, Indonesia

T

he Federal Government on Sunday said it was looking at saving more and investing more in order to build its fiscal buffers against imminent shocks from external environment, as advised by the International Monetary Fund (IMF).

This was disclosed at a joint press conference of the Ministry of Finance and the Central Bank of Nigeria (CBN) held on the sideline of the IMF/World Bank Group annual meetings in Bali, Indonesia.

Zainab Ahmed, minister of finance, who disclosed this also said the next wave of recession that might hit the global economy might not be the one that any country could quickly come out from unless the country had sufficient buffers.

“So, as a country, both the federal and the state, we have to look at how to save more and we have to look at how to invest more in critical infrastructure that will yield revenue,” she said.

Following the monetary policy normalisation, some concerns were raised at the annual meetings that the adverse consequences of the policy would eventually spread to Eu-

rope and could create more problems for emerging market economies.

Briefing journalists at the conference, Godwin Emefiele, governor of the CBN, said it was observed that the adverse consequences of the US policy normalisation had resulted in capital flow reversals, particularly for emerging markets, resulting in some cases, currency depreciation in those economies.

This they say has resulted in interest rate hikes and monetary policy tightening measures in these economies, and it is expected that public debt service will rise for the emerging market economies, possible resulting in weakening of assets in various banking system and weakening in financial conditions in the emerging and frontier economies.

Concerns were raised about debt vulnerabilities as it affected the emerging and frontier markets.

“Although Nigeria’s debt to GDP remains fairly okay, debt service concerns were raised and we also told them we are doing everything possible to broaden the revenue base so as to improve the tax to GDP ratio.

“In general, advice was given that countries must continue to build buffers and that different countries should

L-R: Kemi Ogunnubi, managing director, CAP Plc; Muhibat Abbas, managing director, UNICO CPFA Ltd; Olukayode Pitan, managing director/CEO, Bank of Industry; Abdul Bello, group chief executive officer, UAC of Nigeria Plc, and Dele Ajayi, managing director, UAC Foods, during a working visit of the UAC of Nigeria Group to the Bank of Industry Marina Head Office in Lagos.

implement country-specific policies to protect against this shocks that is expected to take some time and its consequences might be adverse on different economies. We were also advised to build fiscal and structural reforms to ensure growth in our economy,” Emefiele said.

“There are only a few countries in the world that have saved so much in the world

World Bank to support Nigeria, Africa fill infrastructure gap HOPE MOSES-ASHIKE in Bali, Indonesia

T

he World Bank Group on Saturday said it was looking at the different ways of supporting Africa, including Nigeria, fill infrastructure gap.

The bank said it was working with Africa to mobilise resources and improve its regulatory framework.

Hafiz Ghananem, vice president, Middle East and North Africa, World Bank Group, said this at an event - State of the Africa Region: Boosting Productivity in Africa: The Role of Human Capital, held on the sideline of ongoing International Monetary Fund (IMF)/ World Bank Group annual meetings in Bali, Indonesia.

Ghananem said African countries had to invest in digital infrastructure, and that the continent needed

digital skills and competences.

Having visited digital incubators in Lagos and other parts of African countries, Ghananem saw young Africans who are digitally very savvy and said there was need to equip these young people and support them to develop the world.

He asked African countries to develop platforms in the area of e-governance, financial services and using technology in schools.

“Having digital leapfrog is possible and we should make it happen,” he said.

The cause of fragility is huge in Africa and that the drivers of fragility are youth unemployment and climate change, among others he said, saying, “We need to address the root cause of fragility. We need to be much more ambitious.

Africa has the resources. We need to eliminate poverty in the continent. We have the know-how and the capacity to achieve that.”

Speaking at the event, Albert Zeufack, chief economist, Africa, World Bank Group, said most African countries were growing at a very high rate, such as Kenya and Ghana, among others.

What is new is that the continent is facing new set of risks - from change in capital flow to Africa and change in composition of debt, Zeufack said, noting African countries need to increase efficiency of public spending in health and education.

Furthermore, he said the continent needed to deepen resources, improve investment climate, increase private sector led investment and create more high productivity jobs.

According to Zeufack, investing in human capital is not only good economy but smart economy, as “we have to stop referring human capital sector as social sector.”

that any shock will not affect.

So, we have to do this to protect ourselves from external shocks now we are seeing increase in rates in the US and so of the shocks we can get also nationally. And some of those shocks are caused by natural occurrences. So, we all need to be really ready,” Ahmed said.

Responding to the issue of mint, Emefiele said, “CBN is the

majority shareholder in mint and it was thought fit that being the majority shareholder and given that mint is an important national asset, that Bureau of Public Enterprises should divest from mint, and that is why that happened.

“But on this issue of whether more and more of this will be coming! I am aware as a member of National Council

on Privatisation that more are coming and I believe in due course the BPE will make this available for us.

“I also aware of the situations like ASCON that has been burned by takeovers and that is also on the cart for a total review of the process of privatization and making payment so that our aluminium sector can eventually come to live”.

NLNG spends N1.2bn on 3,246 scholarship beneficiaries IGNATIUS CHUKWU & INNOCENT ETENG

N

igerian Liquefied Natural Gas (NLNG) says it has spent at least N1.2 billion financing the education of 3,246 indigenes who are beneficiaries of its scholarship scheme.

This was revealed last week in Port Harcourt during the celebration of the company’s first Scholars Day, in commemoration of its educational intervention targeted, mostly, at indigenes of its host communities.

According to Sadeeq MaiBornu, NLNG’s deputy managing director, the money was spread over a period of 20 years (1998-2018) on different scholarship schemes that include post-primary scholarship (secondary education), undergraduate scholarship and postgraduate scholarship.

Breaking down the numbers, Mai-Bornu said within the said period, 2,956 scholars benefited from the undergraduate category, 222 from the post-primary category and

68 from the postgraduate category - all studying in the UK. The high number of undergraduate beneficiaries, MiaBornu explained, was because until 2012, the post-primary and postgraduate categories were not incorporated into the scheme.

Meanwhile, 12 of the postgraduate scholars received their awards yesterday under the 2018 batch. Each postgraduate beneficiary receives between $45,000 (N16,200,000) and $67,500 (N24,300,000) yearly.

“The NLNG Post-Primary Scholarship started in 2012 to help high performing Primary six pupils in our host communities to access secondary education. The scheme started with 28 beneficiaries and in 2017, this number grew to 222 beneficiaries with a total sum of about N800 million spent to date.

“Twenty-six of the pioneer scholars of this scheme completed their secondary education in June this year and some have been admitted into various courses in different universities,” he said.

Continuing: “The NLNG Post Graduate Scholarship programme was put in place to support the emergence of Nigerian experts in such fields as Environmental Studies, Engineering, Management, Accountancy, Economics, Information Technology, Geology, Banking, Law and Medicine.

The scheme was launched in October 2012 with an annual intake of between 10 and 15 beneficiaries to study in leading universities in the UK. “The value of the scholarship is between $45,000 and $67,500 per awardee each year, depending on the course of study. Fifty-six young Nigerians have so far benefited from this scholarship. The 12 scholarships to be awarded today will bring the total number of beneficiaries of this particular programme to 68.

NLNG will be spending about N200 million to cater for tuition, accommodation, living expenses and return tickets to and from UK for all beneficiaries; bringing the total expenditure on this scheme since inception to about N1.2 billion.”

Tuesday 16 October 2018

BUSINESS

COMPANIES & MARKETS

Business Event

DAY

17

Philips launches first app-based portable ultrasound system CYNTHIA IKWUETOGHU

P

hilipsAfricahasannounced the introduction of Lumify, its first app-based ultrasound system that will extend the reach of ultrasound applications to a broader network of healthcare providers using mobile technology.

Unveiled last week during Medic West Africa 2018 in Lagos, Nigeria, the Philips’ Lumify is an entirely new way of delivering ultrasound technology to healthcare providers and their patients; offering high-quality imaging on a compatible smart device through a subscription model.

Philips’ new ultrasound approach brings together mobile applications, advanced ultrasound transducer technology, integrated IT, training, education and support services to help healthcare providers improve care and reduce costs.

Lumify is designed for emergency departments and urgent care centers, as well as other clinical settings, and will operate from a compatible smart device connected to a Philips ultrasound transducer.

Users will also have access to an online portal where they can manage their device and access Philips’ support, training and IT services.

The first-generation Lumify transducer is now commercially available across East Africa. The L12-4 transducer supports a variety of clinical applications, including soft tissue, musculoskeletal, lung and vascular scanning. The C5-2 offers abdominal with lung and gallbladder pre-sets and Ob/Gyn capabilities.

Whereas Lumify’s newest transducer, the S4-1, has presets for cardiac and FAST exams. All the applications and services are available through Philips’ new appbased portal.

“Our Lumify ultrasound is designed to drive transformation in care delivery and digital health – a dynamic combination that can extend the reach of ultrasound in a remarkable way,” Jasper Westerink, CEO, Philips Africa, said.

“Lumify’s unique combination of connectivity, simplicity, portability and flexibility enables clinicians to perform ultrasound examinations across a variety of

clinical settings, from cardiology suites down to under resourced semi-urban and rural areas. Finally, clinicians as well as family doctors at small outpatient clinics can perform scans themselves, speeding up the diagnosis process and possible treatments,” Westerink said.

Cloud-enabled and tablet technology allows Lumify to offer users vast connectivity, flexibility and mobility.Asacustomizedapp-based solution,Lumifyisdesignedtoseamlessly integrate with patient profiles and a health system’s equipment using cloud-enabled technology.

“The versatility, portability and safety of point of care ultrasound, has made it one of the most widely used first-line diagnostic tools,” Wale Olusanya, centre manager BT Health and Diagnostic Centre, Lagos State University Teaching Hospital, said.

“In a resource constrained environment, technology like Lumify can strengthen referral pathways affording quick diagnosis in emergency departments in major towns, or with time even in more remote areas improving patient outcomes,” Olusanya said.

L-R: Lokman Jouni, director of sales, Mikano International Limited; Mayssaa Hermes, head of marketing and communications; Carol Chukwurah, assistant marketing manager, and Wura Orimolade, assistant manager, advertising, at the press conference to announce the activities to celebrate Mikano 25years anniversary in Lagos.

Dettol calls for habit change in commemoration of global hand-washing day SEYI JOHN SALAU

D

ettol, an antibacterial brand, has called on Nigerians to imbibe the hand-washing habit as a day-to-day activity, a practice that will reduce the incidence of communicable diseases by 59 percent according to recent findings of the World Health Organisation.

This call comes as Nigeria joins the rest of the world in celebrating the 2018 Global Handwashing Day (GHD), on October 15.

Dettolhasbeenpromotinggood hygiene practices among millions of Nigerians, especially children in the last eight years, through regular school outreaches and its School Hygiene Programme.

The brand has also executed

various activities promoting healthy lifestyle such as donation of hand wash sites to schools, organising workshops for nursing mothers and partneringwiththeNigerianMedical Association (NMA) among others.

Dayanand Sriram, the general manager, RB West Africa, while speaking on the 2018 GHD, said, “Dettol has been the trusted champion for good health and hygiene for over 50 years in Nigeria, and we believe that it is important to inculcategoodhabitssuchasproperhand washing at an early age.

“A simple act of washing hands with soap can prevent illnesses and arrest diarrhoea related deaths. This is why we are continuing with the traditionofdrivinghabitchange,and provision of needed infrastructure.

“Over the past years, Dettol has provided handwashing sites and educated over 7 million children, parents and teachers about the importance of hand washing through the School Hygiene Program, which is a mass education program about proper hand washing and hygiene habits.”

The brand has been running health and hygiene programmes across Nigeria where new mothers are educated from pregnancy to the birth of the child on healthy hygiene habits across various milestones of their newborn’s life. Over 1 million mothers are engaged every year through the programme in public hospitals and clinics across Nigeria.

L-R: Titi Ogungbesan, chief executive, Stanbic IBTC Stockbrokers Limited (SISL); Shuaib Audu, executive director, investments, Stanbic IBTC Asset Management Ltd (SIAML); Nkolika Okoli, head, personal banking, Stanbic IBTC Bank Plc; Ovie Adasen, acting head, innovation digital enablement & analytics, Stanbic IBTC, and Damilola Teidi, director, incubation, Co-Creation Hub Ltd, during the ‘Stanbic IBTC Innovation Challenge’ in Yaba, Lagos.

Total launches second edition of Startupper Nigeria CYNTHIA IKWUETOGHU

T

he Total Companies in Nigeria have launched the second edition of the StartUpper of the Year challenge.

Following the success of the first Startupper of the Year Challenge in 2015 in more than 30 African countries, Total is bringing it back this year in nearly 40 countries across the continent and 60 worldwide.

The 2018-2019 Startupper of the Year by Total Challenge will support and reward young local entrepreneurs in any business sector with a project or business less than two years old. In each participating African country, a local jury comprised of experts from Total, specialists from incubators and accelerators, business leaders and local community stakeholders will select three winners. The projects will be assessed based on their: Innovative nature, Social and community impact, Feasibility and development potential.

Each winner will be awarded the “Startupper of the Year

by Total” label and receive financial support of at least N2.6 million plus professional coaching and extensive publicity to advertise their project.

The initiative is part of Total’s strategy to promote youth entrepreneurship and development in Africa. The StartUpper of the Year Challenge by Total is intended to empower young Nigerians aged 35 years and below who aspire to start their own businesses and to build a brighter future.

A competitive process, StartUpper of the Year by Total identifies, rewards and provides support to the best business creation and business development ideas. The winning ideas will be granted the StartUpper of the Year label, as well as financial assistance and mentorship from experienced business leaders.

New this year: To support women entrepreneurs, the jury will also designate a Top Female

Entrepreneur in each country.

This special award, which is in addition to the other awards, is Total’s way of encouraging more women to take part in the Challenge.

A grand jury will meet subsequently to select three grand winners for the entire continent, from among the first-prize winners in each country.

Morethanjustabusinesschallenge,the2018-2019Startupperof the Year by Total Challenge also reaffirms Total’s commitment to capacity building in the countries where it operates, worldwide. By helping innovative young entrepreneurs to realise their projects, the Challenge strengthens the local social fabric.

The registration portal through which applicants can showcase their ideas will be open from October 9, 2018 and can be accesseddirectlyonlineat:http:// startupper.total.com/Candidates willhavefiveweekstosubmittheir applications after which the best will be shortlisted

L-R: Tam Tamunokonbia, deputy director legal services, Consumer Protection Council (CPC); Ola Raheem, director planning, research and strategy; Babatunde Irukera, director-general; Anders Einarsson, managing director Promasidor Nigeria Limited (PNG); Andrew Enahoro, PNG’s head of legal and corporate communication, and Kelechi Oko, CPC’s deputy director, quality assurance and development, during the courtesy visit to CPC by the PNG team in Abuja.

L-R: Precious Minimah, analyst, Go-To-Market, Youth Segment, MTN Nigeria; Tara Durotoye, make up entrepreneur and lawyer; Omotayo George, senior manager, youth segment, MTN Nigeria; Steve Harris, life and business strategist, and Femi Adesina, analyst, youth segment, MTN Nigeria, during the MTN Pulse Campus Invasion, University of Calabar, Calabar, Cross River State, recently.

18

BUSINESS DAY

AVIATION

GUIDE

C002D5556

in association with

NTM stirs aviation stakeholders on the need for corporate governance IFEOMA OKEKE

A

s part of its contributions to deepening conversations on the challenges and development of the aviation sector, NigeriaTravelsMart, an online aviation and travel publication held yet another edition of her annual colloquium at Eko Hotels and Suites, Victoria Island, Lagos.

A collection of stakeholders and experts gathered to examine the theme: “Corporate Governance and Airline industry development in Nigeria.” with Ahmed Lawan Kuru, the managing director of Asset Management Corporation ofNigeria (AMCON) as the guest speaker.

In his welcome speech, Simon Tumba, the CEO / publisher of NigeriaTravelsmart.com said, “Generally corporate governance in most private enterprise in Nigeria is weak, but the airline industry in Nigeria is worse. We believe it is a major contributory factor to the dwindling fortunes of the industry or its stunted

growth, or lack of it.

“I strongly believe that we have the potential to have a very vibrant airline industry. All we need amongst others is to be consistent in our policies, be more innovative and creative, with strong regards to corporate governance.”

Speaking at the Colloquium, Ahmed Kuru, the managing director of AMCON stressed that for any change to be effected in the

corporate governance of the Airline, it must be regulatory-driven as selfregulation has not worked so far “The aviation sector is a catalyst for the economic development of nations. It is a wheel that drives economic activities. It facilitates trade, tourism, boosts productivity in the economy, improves efficiency in the supply chain; it is an enabler for investments and can spur innovation. Critically, it is a source of qual-

ity employment. For these reasons, it is a strategic sector deserving of a careful plot to greatness if Nigeria is to occupy its rightful place in the comity of nations.”

In his presentation, Chris Amenechi, the vice president, pricing and revenue management Copa Airlines, Panama, examined the need for the airlines to hire the right executive management teams, best executives to remain in business.

Amenechi in his words said, The industry needs investors, to hire the right management with a good compensation structure and a good financial plan that factors in growth strategy, deployment of information technology strategy, regulatory strategy as well as approved capital strategy.

Other discussants at the event who shared their opinions on the issue facing the aviation industry includes Dapo Olumide, chief executive officer, Ropeways Transport Limited ; Lawrence Fubara Anga, partner , AELEX and Kolawole Ayeye, chief executive officer , Growth and Development Asset Management (GDL).

Lufthansa Group optimises hub management of network airlines IFEOMA OKEKE

L

ufthansa Group has continued to consistently optimize the management of its hubs in Munich, Frankfurt, Zürich and Vienna. The main focus is on the flexible multi-hub system: newly integrated processes mean that Lufthansa Group is increasingly able to move fleets and traffic wherever the conditions are best for quality, growth and cost effectiveness.

Specifically, the Lufthansa Executive Board decided to accelerate its growth at the Munich location and develop the Bavarian capital into a hub with a focus on Asia.

Lufthansa Group anticipates high single-digit year-over-year growth for the network airlines at this hub for 2019.

In addition to increased frequencies in the flights offered from Munich to Seoul and Singapore, Summer 2019 will see the first ever daily connection from

Tuesday 16 October 2018

Munich to Bangkok.

These flights can be booked as of 4 October 2018 and to further strengthen the portfolio of flights to Asia, the connection to Osaka (Japan) will be moved from Frankfurt to Munich.

The transfer of five Airbus A380 aircraft from Frankfurt to Munich in Summer 2018 was very well received on the market and has been a resounding success. In view of these results, Lufthansa is considering transferring additional A380 aircraft from Frankfurt to Munich in 2020.

Three Airbus A320 are being moved from the Frankfurt hub to Munich to support the expansion of feeder traffic while three smaller Bombardier CRJ900 will be transferred from Munich to Frankfurt in exchange.

As a “5-Star” location, Munich will also be reinforced with additional First Class offerings. To support this, the majority of the Frankfurt-based A340-600 fleet will be moved to Munich.

The strategic focus of the Frankfurt hub will continue to be on optimising the destination mix in terms of increased quality. Lufthansa will curb its growth at this hub in order to improve on-time ratings and operational stability.

For 2019, Lufthansa Group anticipates low single-digit year-over-year growth for the network airlines at this hub.

Lufthansa is starting into the 2018/19 winter season with four new destinations from Frankfurt. Eilat (Israel), Agadir (Morocco), Trieste (Italy) and Thessaloniki (Greece) are new additions to the flight program.

Lufthansa is also further expanding its route network to the USA. Starting 3 May 2019, the airline will offer its first connections from Frankfurt to Austin (USA).

There are plans to expand on the growth trajectory at the Lufthansa Group hub and home base of Swiss

International Air Lines in Zürich. Due to its very successful development over the past years, the aim here is to continue to bank on moderate growth.

The main focus in this is on the expansion of activity in Europe. The 2018/19 winter flight schedule includes a new destination: Bremen. And SWISS is now offering Bordeaux (France), Kiev (Ukraine), Brindisi (Italy) and the German island of Sylt as attractive yearround destinations.

Austrian Airlines in Vienna will be significantly expanding its European route network in the upcoming 2018/19 winter flight schedule.

Beginning in late October 2018, more than 40 additional flights per week will be taking off for 14 destinations, including cities in Germany such as Berlin, Düsseldorf and Hamburg but also other European destinations such as Copenhagen (Denmark), Kiev (Ukraine), Athens (Greece) and Kraków (Poland).

Emirates Airline offers first class products for passengers’ comfort

T

ake home a piece of Emirates’ iconic first Class amenities this month. Shop at the Emirates Official Store for some of the airline’s most exclusive items, provided exclusively as part of the First Class travel experience. From Bowers & Wilkins PX headphones, hydra-active sleepwear pyjamas and warm, fluffy blankets – ultimate travel luxury products are right at your doorstep!

Bowers & Wilkins PX Headphones The Bowers & Wilkins PX headphones are made to suit every environment you’re in. With 22 hours of battery life, and 3 noise cancellation modes – these headphones have you covered whether you’re in the office, city streets or any flight. Available in two colours with an exclusive Emirates travel case – grab a pair quickly before your next adventure! Available in all Emirates Official Stores and www.emirates.store, these musthave headphones retail at AED 1,799.

Hydra-active Sleepwear (First Class Pyjamas) Relax in the world’s first moisturizing sleepwear range to ever be developed for an airline, and drift off like you’re up at 40,000 feet in hydraactive sleepwear pyjamas. Designed to prevent skin dehydration, you’ll feel rested and refreshed every morning. The fabric is crafted with the use of natural ingredients – Shea Buter and Argan Oil – which are released with every motion, keeping your skin moisturized and protected. The patented Microcapsule Technology locks in the natural benefits, allowing you to wash the pyjamas and use them again them again.

Catering to female and male sizes – the pyjamas come in four sizes and in a jersey travel pack. The dark grey men’s pyjamas come with wide leg pant and ribbed collar, while the female’s pyjamas come in a light grey tapered pant and reverse darker colour collar.

First Class Blanket As the winter and the festive season approaches, grab yourself a warm blanket for those special chilly nights spent at home with family and friends. When open, the cream coloured, furry blanket has armholes and pockets to keep hands and feet warm. This essential item can also be converted into a travel pillow, providing ultimate comfort and support for the neck.

BDTECH

BUSINESS DAY

Tuesday 16 October 2018

19

In association with

Microsoft drives financial inclusion with AI at Data Science Nigeria BootCamp Stories by JUMOKE AKIYODE-LAWANSON

M

icrosoft says that its Artificial Intelligence (AI) platform, Azure, will help Nigeria achieve its goal of reducing the financial exclusion rate to 20 percent by 2020.

The company which sponsored the Data Science Nigeria (DSN) Financial Inclusion Summit held in Lagos recently says AI is a necessity in today’s world, especially as it promotes enhancement in technology which helps to improve human ingenuity.

It was revealed during the summit that Microsoft’s AI tools are rapidly changing several industries including financial institutions and how they operate, manage data, and interact with customers. The revolution brought by AI – a blend of three advanced technologies: machine learning, natural language processing and cognitive computing – has huge implications for the financial services industry in Nigeria.

Akin Banuso, country manager, Microsoft Nigeria, said during his presentation that; “With the use of modern tools like Microsoft’s Azure Machine Learning platform, Financial Service Providers (FSPs) can crunch large volumes of data faster and more accurately, which considerably lessens time-to-market to de-

L-R: Alkassim A Umar; head compliance monitoring ( NCC), Falilat Madaki Taiwo; director of administration (PCC), Usman Mallah; CoS to the EVC (NCC), Nnamdi Nwokike; director, public affairs (NCC), Chile Igbawa; chief commissioner (PCC), Umar Danbatta; executive vice chairman, NCC, Bala Mohammed; secretary to PCC, Stella Ezejiofor; director, planning, research, statistics and ICT(PCC), Ewa Udu; director public relations, foreign supports and inter agency collaboration (PCC), Felicia Onwuegbuchulam; director cab (NCC), Lanre Funso; head of legal services (PCC), during a courtesy visit by the management of Public Complaints Commission to the Nigerian Communications Commission on October 10, 2018 at the NCC headquarters in Abuja.

liver products and services.

“AI has the potential to advance nearly every field of human endeavour and address countless societal challenges. This is why we are investing in not only making the technology more accessible, but also building capacity in the use of machine learning concepts to address analytical gaps in financial inclusion

and other areas,” Banuso said.

To build this capacity, Microsoft, through its 4Afrika Initiative, has since 2013 been aggressively upskilling the African developer community in their use of modern technologies. Through its 16 AppFactory academies (including two in Nigeria), Interns4Afrika, MySkills4Afrika, Microsoft Virtual Academy

and AI PopUp Lab programmes, it is pairing developers with technical experts to gain skills in AI, cloud computing, secure coding, machine learning, bot framework and data analytics – and encouraging them to innovate in fields such as financial services.

Expanding further on the features of Microsoft’s portfolio of AI tools and services, Banuso says that one of the challenges of FSPs is how to capture the unbanked population in the informal sector as they usually do not have formal identifiers.

However, with the AI and machine learning capabilities offered by Microsoft Azure, FSPs can use facial recognition algorithms to eliminate duplication of persons. Similarly, FSPs can rewrite credit-scoring algorithms to better capture current realities based on observed customer patterns through the platform.

“AI makes it possible to circumvent traditional challenges with onboarding the unserved and underserved population,” he added.

Speaking to Journalists at the event, Bayo Adekanbi, convener of Data Science Nigeria, said the boot camp was organized in order to use the application of AI to solve local problems.

“Microsoft has developed a lot of tools and the company is also supporting the boot camp by providing experts who have flown to Nigeria to support these young talents who will get the opportunity to

learn from the best, as far as emerging trends, tools, applications and methodologies are concerned, both for research and industry use cases perspective,” Adekanbi said.

According to him, the Artificial Intelligence boot camp was organized based on the need to compliment traditional learning that Nigerian students have from school.

“We understand that there are some global topics that are not available in Nigerian schools based on the current syllabus, so the only thing we can do is to work with global experts and create a tailor made syllabus that can allow the youth to learn and compete globally. Over 10,000 students in Nigeria participated and then we selected the best 150 students after another competition where we tested the ability for them to apply knowledge. These 150 students would then be trained at the boot camp for five days, after which we believe they will be fit enough to do internships in various companies and be able to apply their knowledge to solve local problems,” he said.

The five-day residential AI boot camp and Hackathon will feature face-to-face teaching, virtual online classes, and a hands-on hackathon using the Kaggle.com platform. Distinguished data scientists from leading research and academic institutions from the United States of America, the United Kingdom and South Africa will facilitate the sessions.

Hitachi addresses importance of data maximisation for return on investment …To showcase big data filtering solution at Insight Day

T

hrough its data analytics seminar tagged Insight Day, which comes up in Lagos this Thursday, Data solution provider, Hitachi Vantara has concluded plans to take top executives of high profile Nigerian organisations on how not to waste data but maximise its potentials for return on investment.

Wale Awosokanre, regional managing director, Hitachi Vantara, West Africa, says his company was worried that many Nigerian companies are not aware of the level of wealth that can be

derived from the data they generate and apparently waste on daily basis.

The company says many organisations fail to maximise their potentials for lack of knowledge on how to store, enrich, analyse and monetise a huge volume of data they generate from their everyday operations.

Awosokanre says that his company, in order to salvage the situation, has decided to organise a data analytics insight seminar which will gather Nigerian business and technology leaders to enhance their knowledge on data maximisation.

The event which holds at the Radisson Blu, Victoria Island on Thursday 18, October 2018, will showcase a solution from Hitachi that filters information or data irrespective of the quantity, separate and analyse them with the sole purpose of creating value for companies.

According to Awosokanre, “the purpose of Insight day is to help people scale into the untapped potential of data riding on Hitachi Vantara’s experience on how they store, enrich, activate and monetize data from the business landscape.

“By attending this conference, participants will have the opportunity to network, contribute and learn from data experts within and outside the country specific to their industries, because it will offer a hightouch environment with meaningful interaction with experts from many industries” he added.

Part of the high profile participants to the event, included the Commissioner of Science and Technology Lagos State, Hakeem Fahm, who will kick start the event.

Fahm is specifically considered for

this event because of his portfolio as the formulator, executor that monitors and evaluates policies relating to Science & Information Communication Technology, ICT, for Lagos state.

According to the organisers, some other benefits of the event include: data-driven decisions that will steer people toward results.

Being an event for digital revolution, it is expected to also offer business leaders who embrace the digital economy and base decisions on data to consolidate on their gains and successes.

20

BUSINESS DAY

Tuesday 16 October 2018

BDTECH

E-mail: jumoke.akiyode@businessdayonline.com

Blockchain technology - Beyond the hype BINA IDONIJE Guest writer

T

hese days, it seems like everywhere you turn, you’ll find some kind of media reference to blockchain technology. If you are like a lot of people I’ve come across, these concepts may appear to be nothing more than fancy buzzwords that people throw around these days to make themselves sound technologically trendy. The reality though, is that this emerging technology holds pivotal potential and offers transformational solutions to numerous world problems. With the World Economic Forum recently asserting that blockchain solutions could add a staggering $1 trillion dollars to the world economy within the next 10 years (2028), it seems prudent for economic players around the world to stop and pay attention to this emergent technology.

So what is blockchain technology? At a macro level, blockchain refers to an encrypted digital ledger, which tracks interrelated transactions carried out on it, and is accessible across multiple computer networks (distributed access). A rudimentary way to think of it is to imagine an online Smartsheet (only, it isn’t a Smartsheet) which is duplicated across multiple computer networks and can be accessed and updated by multiple authorized users from anywhere in the world, in real time. Blockchain is sometimes referred to interchangeably with the term “Distrib-

uted Ledger Technologies”.

It is characterized by the key properties of immutability and transparency. Transactions recorded on blockchain cannot be reversed (immutability), and any changes made on the platform are visible across the platform in realtime (transparency).

The economic applications of blockchain technology are varied and cuts across several industries. For example, the United Nations is looking to curb human trafficking by leveraging blockchain technology to provide 1.1 billion people around the world with a legal form of identification. For governments, blockchain could help with the fight against corruption, by driving improved traceability of government spending. Blockchain has the potential to relegate the requirement for intermediaries in certain cases, which, in the context of the global

financial services industries, could have far reaching implications. Perhaps no greater promise of blockchain has been touted, than the benefits it holds for the improvement of supply chains, healthcare delivery and the insurance industry. For supply chain management, every single transaction of a given product from manufacture, to packaging, to delivery, may be immutably recordable on blockchain, making it easier to track the lifecycle of the product, including when and how it changes hands. This could help drastically reduce incidents of loss and unaccountability that plague many supply chains. Adoption of blockchain in the healthcare space could see patients having direct access from anywhere in the world, to their health records held by health institutions, securely encrypted on blockchain. In the world of insurance, fraudu-

lent claims is a top challenge; it is thought that insurance claims predicated on the infrastructure of blockchain technology, could leverage blockchain’s feature of immutability and transparency to identify and eliminate common sources of fraud.

With one technology holding so much promise of a better way of doing things, it is easy to get starry-eyed and carried away. Hence, we must stop and ask: Is Blockchain technology the panacea to all of the world’s economic inefficiencies? The answer is no, not by a long shot. Blockchain technology for all its touted benefits, is not necessarily the right solution for all and sundry. Blockchain solutions is suitable where a permanent historical record is crucial to the effectiveness of a venture or to guarantee performance without the need to rely on trusted third party verification systems (which is why

blockchain is sometimes referred to as a ‘trustless’ system). Even where the business need meets the above criteria, businesses looking to adopt blockchain solutions must consider whether there are other more effective solutions than blockchain. This is because businesses need to make sound decisions which promote optimal performance for their ventures, including improving their overall bottomline. A blockchain solution that isn’t the most efficient or cost effective option as compared to other solutions, is obviously not the best business solution.

The World Economic Forum has put forward a decision tree of sorts to help businesses determine whether blockchain solution is right for them The parameters set forth by WEF include, but is not limited to, the following: * Is the business looking to do away with the services of intermediaries or brokers? * Is the business asset primarily manageable as a digital asset, as opposed to purely physical assets? * Is rapid high performance transactions a requirement? * Is there a business requirement to store large amounts of data?

If the responses to above scenarios is ‘No’, then blockchain solutions may not be the right one for the business.

Bina Idonije is GE’s legal counsel responsible for the full spectrum of Labour & Employment matters in Sub- Sahara Africa.

Oracle, LinkedIn collaborate to improve employee experience

O

racle and LinkedIn today announced that they are working together to help Human Resource (HR) professionals meet the shifting demands of the talent economy. A series of new integrations between Oracle’s Human Capital Management Cloud (Oracle HCM Cloud) and Taleo Enterprise Edition, and LinkedIn, will help HR teams attract, engage and retain employees by growing their talent pool, improving the candidate experience, enhancing internal mobility and increasing career development opportunities.

“The world of work is rapidly changing, and this is creating new opportunities and challenges for talent leaders,” said Scott Roberts, vice president of business development, LinkedIn. “We are excited to be work-

ing with Oracle to create better solutions to make hiring and developing talent as seamless and effective as possible.”

Technology continues to transform the global talent marketplace with the rise of automation and the shrinking shelf life of skills. To successfully manage these changes and address escalating recruitment costs and increasing employee turnover, HR teams need to swiftly evolve their strategies and technologies. The new integrations between LinkedIn and Oracle HCM Cloud and Taleo Enterprise Edition address this need by enabling HR teams to take a holistic view of their talent’s experience, skills and career aspirations in order to achieve a meaningful alignment between each employee’s job responsibilities and an organization’s overall business objectives.

“The rapidly changing global talent market is forcing organizations across industries to rethink how they attract, engage and retain employees,” said Nagaraj Nadendla, group vice president, product development, Oracle. “Navigating these changes is one of the biggest challenges organizations face today and requires HR teams to take a holistic view of the candidate and employee experience. Working closely with LinkedIn, we are uniquely placed to help HR teams meet heightened candidate and employee expectations by combining future-proofed Oracle HCM Cloud and Taleo Enterprise platforms with one of the world’s largest talent marketplaces.”

The new integrations between Oracle HCM Cloud and LinkedIn include: Talent

Profile

Import:

Helps organizations enhance internal talent mobility by enabling employees to choose to import key elements of their LinkedIn profiles into their Oracle HCM Cloud Talent Profile.

Recommended Matches and Embedded Search: Helps organizations streamline recruitment by enabling LinkedIn Recruiter seat holders to search LinkedIn members and see those that best match a job requisition or project within Oracle Recruiting Cloud and Taleo Enterprise Edition.

Referral Recommendations: Improves the candidate experience by enabling candidates to apply for a job via Oracle Recruiting Cloud or Taleo Enterprise Edition and identify and contact (via InMail) their LinkedIn connections who can best

refer them for that job.

Recruiter System Connect: Provides a seamless and efficient recruiter experience by surfacing transactional recruiting data, from both Oracle recruiting cloud and Taleo Enterprise Edition, as well as LinkedIn, in LinkedIn recruiter.

Deeper Integration with Oracle Learning Cloud: Increases career development opportunities through access to LinkedIn Learning courses, automatic course catalog integrations, and up-to-date insight on learner engagement within Oracle Learning Cloud.

Part of Oracle Cloud Applications, Oracle HCM Cloud enables HR professionals to simplify the complex in order to meet the increasing expectations of an ever-changing workforce and business environment.

Intermarc Consulting repositions, appoints new MD JUMOKE AKIYODE-LAWANSON

T

he Board of Directors of Intermarc Consulting Limited has announced the strategic repositioning of the company which is expected to launch the organisation into its next phase of growth and expansion.

The firm in almost two decades has focused on electronic business with emphasis on e-banking and e-payment intermediation in Nigeria and across Africa by providing cutting-edge solutions through consultancy services.

According to a statement released by the company, in continuation of the fulfilment of its vision of consistently providing world class skill acquisition, advisory and strategic solutions, the company has now repositioned to focus on Digital Financial Services (DFS) through consulting, specialised research, training and workshops, conferences as well as project management.

This is in line with the company’s partnership with Microsave – the global leader in DFS consulting.

Jacqueline Jumah has now joined the board and management of the company to lead the implementation of the company’s business strategy as the managing director.

Jumah is a renowned Digital Financial Services Specialist who brings to the table her years of experience in the DFS space, most recent of which is her role at Microsave as a senior management staff of the company.

She holds a Bachelor of Science Degree in Applied Statistics and a Master of Science Degree in Finance and Banking, University of Nairobi, Kenya. Her professional skills include Strategic operations in agent distribution network deployment and scale-up, DFS Business Strategy Development, DFS Product Development, Market Research and Risk management gathered over years of work in banks and in the financial services sector and across several countries such as Ghana, Kenya, Nigeria, Zimbabwe, Tanzania, Uganda, Sierra Leone, Malawi, India, Pakistan, Tanzania, Rwanda, Zambia, among others.

Jumah is a certified trainer in DFS Product Innovation and Development, Agent Network Management and Behavioural Science and Design Thinking. She is also a certified product innovation and DFS curriculum developer.

BUSINESS DAY

Tuesday 16 October 2018

21

EDUCATION

Weekly insight on current and future trends in education

Primary/Secondary

Higher

Human Capital

‘Nigeria must adopt global best practice to grow education system’ Stories by KELECHI EWUZIE

E

ducation stakeh o l d e r s h av e called for speedy deployment of global best practice across all levels of Nigeria’s education system in order for its products to remain competitive.

They are of the view that no other activity guarantees individuals the opportunity for social and economic mobility like education adding that the importance of education as the vehicle for transformation cannot be over emphased.

Tolu Odugbemi, former vice chancellor, University of Lagos in a chat with BusinessDay observes that education for transformation of individuals has universal acceptance.

Odugbemi opines that the necessity for education in a country like Nigeria which is endowed with natural resource has never been more topical.

L-R: Jordi Borrut Bel, managing director/CEO Nigerian Breweries; Samuel Popoola, second runner-up; Opeifa Olasunkanmi, 2018 Maltina Teacher of the Year and Olalekan Adeeko, first runner-up and Anthony Anwukah, Minister of State for Education at the grand finale of the 2018 Maltina Teacher of the Year in Lagos

According to him, “The history of the development of education in Nigeria shows that it has moved from being seen as a social process that builds responsible and informed citizens to process that prepares them for the world of work to contribute

to national economy”.

The university don, who traced the challenges that have over the years stale the growth of the Nigeria education system, revealed that weak quality assurance mechanisms despite a plethora of inspection services at

Greensprings School commits to robust child-centred learning environment

I

n furtherance of its commitment to a robust child centered l e a r n i n g e nv i ro n ment, Greensprings School has opened its third campus in Ikoyi to cater for pre-school and elementary sections.

Lai Koiki, executive director, Greenspr ings School says the policy of the school is to improve on the learning experience it gives to the children by adopting new innovations in teaching.

Koiki while speaking to journalists after the launch of the school in Lagos said since inception of the school over three decades ago, the school has ensured that the tradition of excellence is upheld.

She opines that the school is the first thinking school in West Africa adding that there is a revolution in the world today that requires schools to

challenge the way they view thinking.

According to her, “The world around us is changing, everything is changing which means that the education too has to change because we are preparing the children for a world that we don’t even know and so we continue to upgrade our facilities and teachers so that they can fit into that world”.

She further observes that there is a great departure from teaching content which is what the Nigerian curriculum still does because information is readily available online, but the skills to be able to decipher which one is good information or fake information is what thinking will do to them so that they will be able to sort it out, otherwise they will take everything they find on the web as the truth and that is not always the case.

The educationist lauded parents for their support and believe over the years which has made the dream of the new campus a success.

Koiki opines that the schoolremainscommitted to laying a solid foundation for children by its consistent focus on early childhood education.

According to her, “This is very important because, when children adopt a habit of excellence at their formativestage,theystand a better chance of succeeding in any field of interest later in life”.

She further said Greensprings School Ikoyi campus will provides an enabling environment for children to be nurtured towards reaching their full potential.The adoption of growthmindsetandchildcentered learning will adequately prepare students for future exploits.

all levels of the system has affected the performance of the system.

He further said there must be a deliberate focus by managers of the education system on the role quality plays in development of the sector.

Isaac Adeyemi, former vice chancellor Bells University, Otta in proffering ways towards achieving best practice in Nigeria’s educational system maintains that it is important to make the content in education more relevant to the needs of the market.

He calls for partnership between government and the private sector in developing the programmes of skills based education that will yield impressive results as it has done in several countries.

Adeyemi urged State governments to set goals to make teachers accountable for the progress of learners under their care adding that the Ministry of Education through its appropriate agencies must design students’ assessment methods to generate useful sectioning data.

He further called for the decentralisationofauthorityandfundingtoempower school heads and teachers totakepromptdecisionson school matters.

Rome Business School deepens work competencies of Nigerians

A

s part of it drive to provide learning platforms for executives to grow their organisations, Rome Business School Nigeria has commenced its new Marketing and Communication executive programme.

The new programme is specially designed to build Marketing and Communication competencies among managers by enriching them with ethical and value oriented managerial components that could result to successful business.

Humphrey Akanazu, country manager Rome Business School says “The programme is designed to enable business leaders to analyse complex situations and make appropriate strategic recommendations in the area of marketing and communication.

Akanazu while speaking at the orientation of students for the MBA in Marketing and Communication in Lagos says the school is committed to train entrepreneurs, managers and professionals to a level of excellence in their competence

and their ethical approach to business and work.

He further said this will enable Nigeria executives be able to play a part in the development of the economic, humanity and a society more prosperous, fair and respectful of the cultural role of the individual.

According to him, the Rome Business School Nigeria employs university teachers, company trainers, consultants, managers and entrepreneurs chosen because of their proven experience and skills.

“The faculty has a strong multi cultural inclination with representative from diverse background and nationality”, he said. He said that through this programme students would broaden their horizons, improve their business capability to anticipate and manage Small and medium enterprise by mirroring the success of Italy’s business methods.

Akanazu said the Nigeria campus is the only one set up by Rome Business School adding that it offers physical classes and the curriculum is in line with what obtains in Italy.

UBA Foundation Increases scholarship grant for 2018 National essay competition

U

BA Foundation has commenced the 2018 edition of its annual National Essay Competition in Nigeria with a call for entries.

The essay competition, targeted at senior secondary school students is organized annually, as part of UBA Foundation’s Education initiative aimed at promoting the reading culture and encouraging healthy and intellectual competition amongst secondary school students in Nigeria and across Africa.

Speaking at the Media launch to announce the call for entries, held at the Bank’s headquarters’ in Lagos, the Chief Executive Officer of UBA Foundation, Bola Atta, said the essay competition provides an opportunity for students in secondary schools across the country to put in their entries and to win prizes in the form of educational grants to study in any universities based in Africa. This prize, according to her, will encourage them to strive towards their goals in life.

This year, the prize money has increased significantly as the UBA Foundation emphasises that education remains one of the foundation’s key initiatives.

According to Atta, the first prize for the UBA National Essay Competition is a N2 million educational grant for the winner to study in any African university of his or her choice, a 100% increase from N1m which was awarded last year, while the second and third prizes have increased to N1.5 million and N1m educational grants respectively; up from N750,000 and N500,000 previously obtained.

Speaking to the students and participants at the event, Bola Atta said, “We are well aware that if you help get one child educated, you help support an entire family as that child will eventually positively impact his/ her community. The competition is a key aspect of our investment drive in human capital, as we seek to improve knowledge base, allow students to express themselves and write creatively. We will continue to sustain the initiative because education is very important to UBA and we are more than committed to providing the necessary support for students in Nigeria and throughout the African continent,” she noted.

22

BUSINESS DAY

C002D5556

Tuesday 16 October 2018

EDUCATION NB targets capacity among teaching professionals …As 2018 Maltina Teacher of the year winner emerges KELECHI EWUZIE

C

onsistent with its mission to create a network of credible teachers with commitment to drive a positive change in Nigeria’s education sector, Nigerian Breweries Plc has rewarded Olasunkanmi Samuel Opeifa, winner of the 2018 Maltina Teacher of the year with N1.5 million.

Jordi Borrut Bel, managing director, Nigerian Breweries Plc. explained that in line with its philosophy of winning with Nigeria, the company resolved in 1994, to play a more active role in the development of education in Nigeria when it established the Nigerian Breweries – Felix Ohiwerei Education Trust Fund with a commencement capital of N100 million naira.

Borrut Bel says in 2015, the company’s intervention in education was expanded to include teachers, leading to the launch of the ‘Maltina Teacher of the Year’ initiative.

According to him, “The initiative was hinged on the realisation that teach-

Olajumoke Ilori, principal, State Senior High School, GRA Ikeja; Olufunmilayo Onadipe, tutorgeneral and permanent secretary, Education District VI and Steve Babaeko, CEO, X3M Ideas at the commissioning of the Senior Secondary 3 block and Administrative building renovated

by X3M Ideas for its sixth years CSR project recently in Lagos.

ers hardly get the recognition they deserve in spite of the pivotal role they play in determining the quality of education and the future of our country.

He further opines that over the years, the Education Trust Fund has impacted over 25,000 students with over 400 classrooms, 30 li-

braries and laboratories built in over 40 communities across Nigeria.

“The intervention which has become an integral part of our sustainability agenda has covered primary, secondary and tertiary levels of education.

Anthony Anwukah, minister of State for education

CGE, NANS partner on sexual harassment of female students in higher institutions

A

s part of its strategic effort to address the increasing incidence of sexual harassment happening in Nigerian universities, Center for Gender Economics (CGE Africa) partnered National Association of Nigerian Students (NANS) to organise a one-day capacity building workshop for NANS Officials in the South West Region.

Uchenna Idoko, CGE Executive Director while explaining the real consequences of the unholy acts observes that sexual harassment has become so repugnant to the bodily integrity and mental health of female students.

Idoko said it is against the backdrop of the manners of impunity on the part of some university authorities in handling the unholy acts that CGE Africa and NANS took an alternative action of building the capacity of Student Union and NANS officials to arrest this menace.

Idoko said some of the recommendations at the event, include among others, the need to increase sensitisation and awareness on sexual violence institutionally among students in Nigeria

Higher institutions; the need for the government of Nigeria to invoke state obligation to prosecute perpetrators of sexual violence as stated in Articles 2 and 3, of CEDAW, VAPP Act and State Laws.

According to him, “Other recommendation was the need to allocate more funds to the prevention and punishment of sexual violence by the government and the institutions, adding that such would address the silence of unwanted sexual experiences and help move campuses toward an adequate response” “Violence against victims which is referred to as ‘victim blaming’ should be prevented and dealt with by proposed support mechanisms that will be put in place on campuses by NANS and Key stakeholders”.

“This intervention provides student leaders with information on the first actions to take if a student is sexually harassed by lecturers and will also give NANS access to information on confidential national sexual assault hotlines, online resources and centres they can reach out to for both legal and psycho-

social support female students once the need arises”, the CGE Executive Director further disclosed.

The event afforded participants an opportunity to also reflect on the effects of sexual harassment on the mental well-being of victims, their families and university community at large.

Participants, who were full of praises for the organisers, believed that sexual harassment and violence meted on female students by lecturers are the most harmful type of violence in the higher institutions, noting that its mental health impacts cuts across depression, anxiety, post-traumatic stress disorder, suicidal thoughts, among others. It makes the victim lose focus on the primary.

They also expressed concerns over the rising cases of sexual harassments, adding that the victims of rape, families of the victim and even the community have a lot of stigma to suffer at different levels.

NANS officials expressed appreciation to CGE Africa and FIDA for facilitating the event.

in his remarks at the event observes that story of the development of education in Nigeria cannot be complete without Nigerian Breweries.

Anwukah said that the company has been at the forefront of improving the educational sector by continually investing in educational infrastructure,

encouraging teachers and students and the cycle as a whole.

Olasunkanmi Samuel Opeifa, a teacher from Government Day Secondary School, Karu, Abuja aside from emerging winner will also get one million naira every year for the next five years and a block of six classrooms built at his school.

The winner, an English language teacher, commended Nigerian Breweries for the gesture and enjoined other corporate organisations to follow the worthy example. “Today, I am very happy and proud that Nigerian Breweries has shown that teachers’ rewards are both in heaven and on earth,” he said.

The 32 year old teacher maintained that teaching is not about earning a living, but about having a strong passion for humanity and emotional stability to impart knowledge regardless of the challenges.

On the same night, Olalekan Adeeko, a Computer studies teacher from Baptist Boys High School, Abeokuta, Ogun State emerged the first runner-up, while Samuel Temitope Popoola, a Phys-

ics teacher with Deeper Life High School, Akure, Ondo State clinched the second runner-up position.

Apart from the N500,000 reward as State Champion, the first and second runnersup got an additional One Million Naira (N1, 000, 000) and Seven Hundred and Fifty Thousand Naira (N750, 000) respectively.

In total, the ceremony also produced 26 State Champions with each of them receiving a cash sum of Five hundred thousand Naira (N500, 000).

Other dignitaries at the event include Yetunde Odetayi, Permanent Secretary, in the office of the Deputy Governor of Lagos, Boboye Oyeyemi, Corp Marshal of the Federal Road Safety Corps and Honourable Desmond Elliot, member of Lagos State House of Assembly among others.

Since inception, the Maltina Teacher of the Year has produced four grand winners: Rose Nkemdilim Obi from Anambra State (2015), Imoh Essien from Akwa Ibom State (2016) and Felix Ariguzo from Delta State (2017) and the current champion.

X3M Ideas commits to capacity building, educational development JOSEPHINE OKOJIE

X

3M Ideas Limited has raised its Corporate Social Responsibility (CSR) profile when it recently renovated a block of classroom and an administrative building at the State Senior High School, Ikeja, GRA. The renovation of the administrative building and a block of three class rooms gave the school a face lift and ensured that students learn in a conductive class rooms as furniture, light fittings and fans were also provided.

Steve Babaeko, chief executive officer, X3M Ideas Limited while speaking during the donation ceremony said the company clocked six years this year and since inception, the company has made CSR its priority every year and has been consistent with it.

“There is nowhere in the

world where government is able to solve all the problems but, as a corporate citizen I think we all have the responsibility to find what areas we can intervene , that is what we always do,” Babaeko said.

“We know we do not have all the money in the world but it has become like tradition for us to find areas of intervention,” he stated.

He added that the gesture is to make the students better considering the level of deterioration the building was which could not facilitate assimilation.

Olufunmilayo Onadipe, tutor general and permanent secretary, Education District Victoria Island lauded the efforts of X3M Ideas in turning the school to haven.

Onadipe lamented the state of the building before the intervention as an eyesore ‘the building was the oldest in this compound; it was nothing

to write home about. It was always giving us challenge but today you have delighted us with the renovation. The school has the most improved result in the whole state and with this your contribution our result will continue to go up.”

She advised the students to make good use of the facilities so others coming behind can also make use of them.

“Make use of the furniture, building, and gadgets. Don’t spoil them so that others coming behind can use them and when you set up your organisation like X3M Ideas, you will not forget your Alma Mater,” Onadipe said.

She commended X3M Ideas for consistently supporting the district and Lagos State in general adding that the company had donated fully stocked a library within the same complex for its 4th Anniversary CSR two years ago.

Also speaking during the commissioning, Olajumoke Ilori, principal, State Senior High School, Ikeja said “The kind gesture of X3M Ideas limited for renovating of the SSS3 block and administrative building will linger in our memory forever in the history of the school”

Tuesday 16 October 2018

C002D5556

BUSINESS DAY

23

Energy Report Oil & Gas

Power

Renewables

Environment

Petrochemicals party is on but Nigeria finds no seat STEPHEN ONYEKWELU

P

etrochemicals are set to drive growth in world oil demand and Nigeria can benefit in the long run, if it puts its acts together and encourages strategic private sector investment into its petrochemicals industry.

Petrochemicals are components derived from oil and gas that are used in daily products such as plastics, fertilizers, packaging, clothing, digital devices, medical equipment, detergents and tyres.

They are becoming the largest drivers of global oil demand, in front of cars, planes and trucks, according to a major study by the Paris-based International Energy Agency (IEA), ‘The Future of Petrochemicals released October 05.

The Future of Petrochemicals is part of a new

IEA series shining a light on “blind spots” of the global energy system; issues that are critical to the evolution of the energy sector but that receive less attention than they deserve.

Petrochemicals are set to account for more than a third of the growth in world oil demand to 2030, and

nearly half the growth to 2050, adding nearly 7 million barrels of oil a day by then. They are also poised to consume an additional 56 billion cubic metres (bcm) of natural gas by 2030, and 83 bcm by 2050.

“Ou r e c o n o m i e s a re heavily dependent on petrochemicals, but the sector

Benin Disco tests new waters, signs MOU on mini-grid OLUSOLA BELLO

B

enin electricity distribution company (BEDC) has taken a step towards realigning its power solutions with renewable as it signs a memorandum of understanding with Colorado-based Rocky Mountain Institute and Rubitec Nigeria Limited to provide mini-grid electricity to its customers.

With this it plans to connect all communities in its franchise states without electricity supply. Based on this, BEDC is expected to facilitate the choosing of locations for mini-grid solar power.

The tripartite MoU was agreed by Funke Osibodu, the Managing Director/CEO, BEDC, Bolade Soremekun, Rubitec CEO, and James Sherwood, RMI Manager, at the BEDC head office in Benin.

According to the MoU, Rubitec is expected to construct solar mini-grid facilities within BEDC’s licensed area of coverage, while RMI will provide expertise in developing renewable electrical solutions and advise implementation of a pilot mini-grid in the chosen location.

Funke Osibodu in her

remarks at the event said the initiative was aimed at bridging the service gaps for areas within the company’s network with an existing but poorly supplied or non-functional distribution system or those without an existing distribution system.

While expressing delight at the partners based on their pedigree, she said the minigrid initiative was also necessitated by the need to reduce dependency for power supply to customers through the Transmission Company of Nigeria (TCN) source, saying that one community in Edo State would be used as a pilot for the project before it is extended to other locations.

According to her, the project will entail an interconnected mini-grid using BEDC distribution lines in the selected locations to distribute solar power to the residents in the communities who are also expected to sign contract agreement with the suppliers.

The agreement will be completed after the joint visitation by a combined team of BEDC staff and officials of the partnering firms to assess the situation on ground at the locations and determine the feasibility and commencement date of the project.

world. Indorama today is building a petrochemical hub in Africa at Eleme.

“Nigeria spends about $11 billion on imported petrochemical related products in a year. You can understand why Dangote Industries is building one of the largest petrochemical complexes in the world in Nigeria” Emmanuel Anyaeto, director/chief executive officer of California-based Integrated Gas and Energy Services, LLC said in an interview with a Nigerian national daily.

Demand for plastics, the key driver for petrochemicals from an energy perspective has outpaced all other bulk materials (such as steel, aluminium, or cement), nearly doubling since 2000. Advanced economies currently use up to 20 times more plastic and up to 10 times more fertiliser than developing economies on a per capita basis, underscoring the huge potential for global growth.

IEA tips Nigeria, others to drive surge in global oil production

Bolade Soremekun, in his remarks said “Rubitec is very happy to sign this MOU to partner with BEDC and RMI to bring solar mini grid electricity to communities within the franchise area who are unserved or underserved.

“Collectively, Rubitec and our partners are proud to execute the pilot project to provide more knowledge and insight to the interconnected mini-grid space so as to enable more rapid scaling of the concept and model all over Nigeria”.

RMI is excited to support BEDC and Rubitec in this effort, Sherwood said, and sees this as a tremendous opportunity to test a new model for delivering clean, reliable, and affordable power to customers. This will build on the mini-grid implementation work already being done by the Rural Electrification Agency and others across Nigeria and can directly support development of local economies while providing insight that will benefit the entire industry.

Whilst Edo State is the pilot take-off point, other proposed and feasible locations are being explored for pilot takeoff in Ondo, Delta, and Ekiti States, which are within BEDC franchise states.

Olusola Bello, Team lead, Analysts: Isaac Anyaogu, Stephen Onyekwelu, Graphics: Joel Samson.

receives far less attention than it deser ves,” Fatih Birol, the IEA’s executive director said. “Petrochemicals are one of the key blind spots in the global energy debate, especially given the influence they will exert on future energy trends. In fact, our analysis shows they will have a

greater influence on the future of oil demand than cars, trucks and aviation.”

Nigeria built three petrochemical plants in Eleme, Warri and Kaduna.

These plants have combined capacity to produce 240,000 metr ic tons of polyethylene; 130,000 metric tons of polypropylene; and 18,000 metric tons of carbon black per annum.

However, a few years of operation and all the plants became moribund.

A research conducted by the University of Benin, Nigeria, identified the reasons for collapse of the petrochemical plants to include irregular importation of feedstock, poor maintenance and lack of technical and managerial capacity.

One of the plants at Eleme was sold to Indorama Petrochemicals in 2006 and now operates at an annual average availability of 99 per cent, having newly-built largest singletrain fertilizer plant in the

... warns developing countries of risk from higher oil prices ISAAC ANYAOGU

P

aris-based International Energy Association says that oil producing countries like Nigeria, Venezuela, Libya, Iraq and Iran has the potential to drive a surge in global oil production but also that higher oil prices will have consequences for the economies of developing countries.

In the organisation’s latest oil market report, IEA global demand and supply are now close to new, historically significant peaks at 100 million barrels per day (mb/d), and neither show signs of ceasing to grow any time soon.

“In future, a lot of potential supply could come to the market from places like Iran, Iraq, Libya, Nigeria and Venezuela, if their various challenges can be overcome.”

It said oil markets look “adequately supplied for now” after a big production increase in the last six months, but the industry is coming under strain “This strain could be with us for some time and it

will likely be accompanied by higher prices, however much we regret them and their potential negative impact on the global economy,” the IEA said.

For Nigeria, the bulk of its problems are home grown. An inability to pass a comprehensive petroleum sector law has dampened investment appetite and curtails new production that could have grown the country’s reserves. Local oil companies struggle to raise capital to finance projects and multinationals are increasingly finding terms in other African countries more competitive.

The IEA in its market report highlighted that impact sanctions on Iranian oil exports by the United States will have on the global market but it is unlikely Nigeria will ramp production to reap much benefit, raising production by 26,000 bpd production in September.

Supply from Iran during September dropped to a two-and-a-half year low as customers continued to cut back in the run-up to new sanctions, which start on Nov. 4.

Iranian output fell to 3.45 million bpd, down 180,000 bpd month-on-month. Iranian oil exports in September fell to 1.63 million bpd, down 800,000 bpd from recent 2Q18 peaks, the IEA estimated.

“The decline may deepen significantly ahead of US sanctions — and subsequently as final cargoes are delivered,” said the IEA. According to OPEC figures, Nigeria’s oil production in between August and September rose by 26,000 bpd while Libya’s production rose by 103,000 bpd.

Both countries helped OPEC crude production rise by 132,000 barrels per day in September to 32,761,000 bpd.

The organisation however warns, “Nonetheless, our position is that expensive energy is back, with oil, gas and coal trading at multiyear highs, and it poses a threat to economic growth.

“For many developing countries, higher international prices coincide with currencies depreciating against the US dollar, so the threat of economic damage is more acute,” the IEA said.

Email: energyreport@businessdayonline.com, Tel: +234-8023020011; +234-7037817378;

24

BUSINESS DAY

C002D5556

Tuesday 16 October 2018

Energy Report

NDCMB partners Dangote Refinery on local content implementation Stories by OLUSOLA BELLO

D

etermined to stimulate the Nigerian economy through local production, the Nigerian Content Development and Monitoring Board (NCDMB) has declared its intention to partner with Dangote Petroleum Refinery and Petrochemical Free Trade Zone Enterprises (DPRP) on the effective implementation of the Local Content Act in the country.

Akintunde Adelana, director, monitoring & evaluation, NCDMB who disclosed this, said the Dangote Refinery project is expected to close a major gap in the supply of petroleum products in the country.

“We consider this as a very important project and we are willing to partner with the company to ensure full implementation of the local content policy. We embarked on this journey with the company a long time ago and we are ready

to partner with the Dangote Group. Part of what you see to today is part of our efforts to ensure that the company and its contractors comply with the local content policy.”

The director who was representing Simbi Wabote, exe cutive s e cretar y of (NCDMB) described the Local Content Act as the quantum of composite value added to, or created in the Nigerian economy by a systematic development of capacity and capabilities, through the deliberate utilization of Nigerian human, material resources and services in the Nigerian oil and gas industry.

The disclosure was on Friday, during the DPRP Nigerian Content Sensitization/Awareness Creation Programme, titled: “Let’s Walk the Nigerian Content Talk Together,” at Lekki Free Trade Zone, Lagos.

T h e c o u nt r y h e e xplained recorded loses prior to the enactment of the local content policy, which he noted, came from jobs executed abroad by International Oil Companies

(IOCs), operating in the country. “ The nar rative then was that nothing can be done in-country. Plants and modules were fully fabricated offshore without any structure in place to achieve knowledge transfer. Before 2010, we had no active dry-dock facilities. The few we had were abandoned and left to rot away. Today, we have four active dry docking facilities

in Port Harcourt, Onne, and Lagos,” he added.

He said the board’s mandate is to develop local capacity in key areas such as manufacturing and fabrication and promote indigenous ownership of assets and utilization of indigenous assets in oil and gas operations.

Wabote added that the board’s responsibility also include linking the oil and gas industry with other

sectors of the economy, enhance multiplier effect of oil and gas investments in economy and develop pool of competitive supply chain rooted in oil bearing communities.

Reading riot acts to defaulters of the Nigerian Content Policy, Wabote said non-compliance with the law, will result to the suspension of projects/ contracts, penalty of five per cent of project sum,

withdrawal of NCDMB’s services, and project cancellation unrecoverable sunk cost.

Other penalties for noncompliance, according to the Executive Secretary, are escalation to other regulators to withdraw or suspend license, withdrawal of approvals or de-classification of contractor from prequalification list, application of the full weight of the law in accordance with Section 68, and publication of non-compliant operators in newspapers and professional gazettes.

Also speaking at the occasion, Giuseppe Surace the Chief Operating Officer, DPRP, said the programme was organized to create awareness among the company’s contractors on the requirements of NCDMB. “The programme was organized to ensure that our contractors are well informed about the Nigerian Content Act and this is expected to assist them with the execution of not just the Dangote project, but other projects in their portfolio,” he added.

lives of these displaced the Fadama programme.

The World Bank emergency intervention programme for the North East — North East Food Security and Livelihood Emergency Support Project (Fadama) III and Additional Financing — came on board strongly to promote farming in all the affected states.

By most ratings, Borno, which residents are more than 70 per cent farmers, is blessed with rich natural and agricultural resources and it is known for mass production of groundnut, wheat, maize, beans, millet, fish, rice, tomato, cassava, sorghum, pepper and citrus, among other farm produce.

Also, statistics from the Borno Emergency Management Agency and camp officials indicates that more than 80 per cent of those affected by the insurgency are peasants who need Fadama farming to develop.

The agency says there are more than two million people in 21 official Internally Displaced Persons (IDPs) camp in Maiduguri with more than six million others within the host communities and informal camps spread across Borno.

The objective of North East Food Security and Livelihood Emergency Support

Project (Fadama) III and other agencies is to set the agricultural sector of these conflict affected states on strong footing.

The agencies, therefore, take seriously the issue of supporting peasants with their immediate food needs as well as farm and non-farm inputs support to restore their livelihood activities.

They believe the IDPs are starting life afresh, having lost everything to the insurgency and they need sustainable income generation.

Investigations show that with the initiative, presently in Borno, farming activities have picked up tremendously in 166 worst hit communities spread across 24 out of the 27 local government areas of the state.

Observers note that the programme has restored farming activities through provision of starter-packs to affected households to justify why it is an emergency programme designed to respond to the urgent food and livelihood needs of the masses.

According to them, in spite of the imminent collapse of socio-economic and political activities in the areas, Fadama farming has been able to restore hope and self-confidence among the returnee beneficiaries that are picking up life afresh.

How Shell, World Bank are bringing succour to IDPs

P

rompted by largescale humanitarian crisis, the Shell Nigeria Exploration and Production Company (SNEPCo) and employees from across Shell Companies in Nigeria (SCiN) in 2017, contributed $1.1 million to Family Health International (FHI 360), a global relief agency providing humanitarian assistance to IDPs in north-east Nigeria.

More than 50,000 in the Dikwa area of Borno State benefited from a broad range of activities that cut across health, security, water, sanitation, hygiene and nutrition services. The integrated nature of those services was a key factor in the successful containment of a cholera outbreak in Dikwa late in the year.

Separately the Shell Group contributed around $2 million to leading global humanitarian organisation Mercy Corps, to provide emergency assistance to 1,000 vulnerable families. This combined relief effort, led by the two agencies working closely with the SCiN team to carry out interventions, is part of Shell’s social performance strategy in Nigeria. And it’s an example of Shell’s wider efforts, in collaboration with developmental organisations, to contribute to the wellbeing of

communities – often some of the most vulnerable – where we operate.

Remarkably, one successful intervention in Nigeria is the Resilience Training programme, a 14-module Shell training course that’s been modified for use outside of the company and designed to equip participants with mental and emotional skills needed to bounce back and move on with life in the wake of a crisis. Two of the modules have now been translated into the local Kanuri language.

This is evidence in the case of Amina who a year after her abduction by terrorists in March 2016, was rescued during a military raid in North Eastern Nigeria, an area plaqued by terrorist insurgency and confronting the fall out from a crippling humanitarian crisis.

The child conceived during Amina’s forced marriage and born in captivity was rescued along with her. Amina and her daughter are now two of the more than 1.5 million internally displaced persons (IDPs) in this part of Nigeria.

Amina is among those to have benefited. Counselled by one of the case workers at one of the ‘safe spaces’ set up

by Shell for IDPs, she’s gradually been able to overcome the difficult events she’s been

through. (Amina struggled to accept her child, initially referring to her as “Yaron Su”, which, translated from the Hausa language, means “their child”. “Thank you very much for listening and talking to me,” she said to her case worker at the end of one of the sessions.

“I feel so relieved and at peace with myself as I now know it is not my fault nor the fault of my child that she was born in such circumstances. I can now look at my child and not feel bitter. I love her more now and look, I made her hair last night! I no longer feel like a stranger at home. I feel much better now because I know there is hope for me and my child.”

Akin Fajola, regional community Health Manager for Shell Nigeria, said: “What the team has been able to

Osagie Okunbor

achieve through the cascade of resilience training for both the NGO staff on the ground and the displaced persons is truly inspiring. It’s already healing devastated lives and building resilient communities among the internally displaced people. What started as a single experience for selected care workers is changing lives.”

More than 50,000 people in Dikwa have benefited from a range of support, from health to sanitation.

Looking ahead, SCiN plans to further upgrade its current Primary Health Care centre, strengthen the Dikwa community’s agriculture and erect more temporary shelters to meet the high influx of IDPs into the community.

In a similar manner the World Bank is making efforts to enhance the economic

Tuesday 16 October 2018

C002D5556

BUSINESS DAY

25

In association with

Eko Atlantic: Renaissance in a city with its own soul CHUKA UROKO

R

ising on the ‘ashes’ of what used to be Lagos Bar Beach, Eko Atlantic City comes off easily as the most ambitious and iconic project in West Africa delivering quality, high end real estate and offering residential, commercial and retail opportunities to Nigerians and their foreign investor-friends.

Eko Atlantic is the name of this grandiose project aimed to create a new economic capital for Africa. The development includes everything from sky-scrapers to luxury apartments, a new financial district, a private power-grid, and a shopping boulevard in the image of New York’s Fifth Avenue.

Sitting adjacent to Victoria Island, Lagos, Eko Atlantic is quietly evolving into a modern and self-sustaining city with its own soul. On daily basis, Lagos residents pass through the Ahmedu Bello Way which separates the new city from ‘Lagos’ and all they probably see on the right hand side of the divide is an expansive parcel of land with just a couple of structures.

Little do they know that, on the massive land space which stretches 10 million square metres on the shoreline, a renaissance is taking place, reflecting what is possible in Nigeria if only the managers of the country commit to providing the right environment for private capital to lead the economy.

Analysts are of the view that Nigeria will work, the economy will grow and the citizens will flourish if the country gets it right in infrastructure and some critical sectors such as oil and gas, power, health, education and housing, pointing out that Eko Atlantic mirrors how all that could be done.

When BusinessDay took a tour of the city recently, the experience was not only stunning, but also enlightening. The investment, developments and transformation going on there are massive and far-reaching, presenting the city, paradoxically, as a hidden treasure and the best kept secret in the wider Lagos society that is almost bursting at its seams.

“Our major challenge here is perception; a lot of people don’t seem to understand

Infrastructure Maintenance With TUNDE OBILEYE

Importance of equipment and systems inventory in FM

T

Residential towers under construction in Eko Atlantic City (Azuri Penninsula)

what we are doing. There are wrong perceptions and misconceptions; some people, especially the foreign media, speak from preconceived ideas about city development”, Ronald Chagoury Jnr, Vice Chairman, South Energyx Nigeria Limited, developers of the city, told BusinessDay. A major argument against Eko Atlantic City development has always been on its likely impact on the environment.

Human rights groups and environment experts frequently raise concerns, saying that if the project’s Environmental Impact Assessment (EIA) is not duly obtained as speculated, its impacts in the future would be devastating.

But Chagoury Jnr disagrees, insisting that the city’s shoreline protection will rise almost 10 metres above sea level and, therefore, will resist even the severest ocean surge that could happen and impact on the city and environs.

This corroborates what David Frame, also of South Energyx, said at a forum on the evaluation of the city’s environmental impact assessment (EIA) in Lagos a few years ago. “The sea wall is designed and tested to handle the worst

storms in hundreds/thousand years; The Great Wall of Lagos will ensure that everyone living and working within 10 square kilometres (6.2 miles) of reclaimed land for Eko Atlantic and the population of Victoria Island are protected from the sea”, Frame assured.

Chagury Jnr added, “what we have here are sea breakers which do not push water back or sideways, but rather filter water to the bottom”, debunking insinuations in some quarters that the occasional flooding incidents in Lekki and the alpha beach areas are caused by the city development.

The sea wall which has already gone up to 6metres will stretch 10 kilometres and it is a masterpiece of engineering and architecture with its alluring walkway, picturesque and panoramic views of the ocean.

Besides the sea wall, the city boasts top-notch infrastructure where the 8-lane Eko Boulevard connects seamlessly to a good network of roads and also to 14 bridges overlooking an artificial lake which will accommodate four boats moving side-by-side at slow speed.

Eko Pearl Towers is another revelation in the city. This is the second major develop-

ment in the city after the Eko Boulevard. The development is a delightful collection of high rise residential towers with each tower standing on 24 floors. It is situated in the centre of the harbour of the city and comprises five stunning towers including White Pearl Tower, Black Pearl Tower, Indigo Pearl Tower, Champagne Pearl Tower and Aqua Pearl Tower. So far, only two towers— Black and Champagne—are ready and occupied.

Each floor of the towers offers two units of threebedroom two units of twobedroom apartments. The apartments’ amazing views of the Atlantic Ocean, Victoria Island and Lagos Island Central Business District (CBD). The foyer, the sit-out and the swimming pools also provide scenic views of the surrounding sea and especially of ships gliding on water to their Apapa ports destination.

The city which began in 2003 is designed as mixed use development for residential, commercial and retail. Ongoing developments such as Azuri Peninsula will offer both residential and retail facilities Continues on page 26

o develop a comprehensive operations and maintenance plan requires an initial inventory of building systems and utilities. This is necessary because all preventive, predictive and corrective maintenance and operating plans arise from a good understanding of the facility equipment, systems and needs.

Many firms and facilities maintenance personnel whose responsibilities include developing operating plans and procedures clearly do not apply adequate professional resources to this aspect of the work. Without such an exercise, the potential for more problems to come up becomes greater during the life of the equipment and systems.

Comprehensive management plans require all of the operating parameters to be considered when establishing work plans, priorities, and strategies that may affect the long term utilization of the facility. The inventory is, therefore, only the beginning of a detailed process that will achieve best practice for the facilities manager.

This function of facilities management will require the following questions to be considered when such an inventory is being done.

What are the needs of the facility including the specific requirements of each functional area within the facility?

Are the mechanical, electrical and plumbing systems sufficient to meet the needs of the functional areas of operation?

What is the overall quality of the maintenance practices including the current standard for the building systems?

Does the configuration of mechanical, electrical and control systems meet the needs of the facility in a cost effective manner?

Will specialized training be required to provide the needed operational and maintenance practices?

The questions raised above are not limited to the development of an operating strategy for newly constructed or acquired facilities but also serve as reminders of what should be done in any facility operating programme. Buildings being so dynamic in nature require regular and recurring review to ensure adequate and appropri-

ate operating plans are in place.

In as much as preventive maintenance addresses the recurring needs of the systems in place, a regular assessment of the ability of the installed systems to meet the functional needs of the facility is just as important.

Also important, as part of the inventory of building systems, is the condition assessment of each equipment. When the facilities manager carries out an assessment on the condition of the equipment, it serves to define the needs of the installed equipment. The facilities manager is, therefore, able to establish the remaining useful life of the equipment and have a general understanding of the level of maintenance performed to date and whether the equipment is operating in accordance with the design. This is equally vital for newly commissioned installations where the systems and equipment may not have been subjected to the true loads of the facility during the commissioning process.

Having carried out an extensive inventory of the systems and equipment, the facilities manager should arrange a meeting with the senior management team to discuss the findings of the inventory with a view to determining areas of priority in terms of impact on business operations or funding for the various maintenance and management activities required.

The ultimate objective is to ensure an enabling environment for effective, efficient and quality service delivery for the benefits of all end users of the facility at a cost that reflects value to all stakeholders. The extent to which success of this exercise is achieved will depend on how much work the facilities manager and his or her team puts into it. A thorough job will produce a really good result but a shoddy job will lead to not so good a result.

In concluding, the inventory is a very important part of developing a robust and time tested operations and maintenance plan in a cost effective manner.

Obileye is a UK-trained lawyer and CEO, Great Heights Property and Facilities Management Limited Email: Tundeobileye@greatheightslimited.com

26

BUSINESS DAY

Tuesday 16 October 2018

New housing delivery programme targets small, affordable units for workers

… to take 1,400 worker-families off the property market Stories by CHUKA UROKO

I

n the Nigerian housing market, affordability remains a relative term for too long, but in a new ‘National Affordable Housing Delivery Programme for Nigerian Workers’ that will be taking off almost immediately, a clear definition of affordability has been made to mean ‘low cost’ housing for workers.

With N18,000 minimum wage per month, Nigerian workers are among the poorest wage-earners in the world which explains the inability of majority of them to legitimately buy or build their own houses.

In many cities of the country, most residents are renters and, according to a report by the Pison Housing Company on the state of housing market in Lagos, about 80 percent of the city’s residents lives in rented accommodation, spending over 50 percent of their income on house rents.

The new housing delivery programme which was launched by the Federal Mortgage Bank of Nigeria (FMBN) and the Nigerian workers unions comprising the Nigeria Labour Congress (NLC), Trade Union Congress (NUC), and Nigeria Employers Consultative Association (NECA), therefore, seeks to lighten this workers’ burden or, possibly, bring an end to it.

The programme aims to build and deliver decent, safe and quality housing for the workers at a price that they can afford. In line with this goal, the house-types planned for construction under the programme are based on proven social housing models and comprise one-bedroom, twobedrooms and three-bedroom

units with prices ranging from N3.1 million to N8.3 million per unit.

About 100 housing units are to be delivered in the next six months. A groundbreaking event to mark the start of construction activities took place in Nassarawa State on a 5-hectare land along the new Kwandare, Keffi road Lafia. The land was provided by the state government as part of its contribution to the success of the project.

The Nasarawa housing development site is the first of 14 locations under the pilot phase of the programme that is projected to deliver a total of 1,400 housing units nationwide.

This includes 200 housing units in each of the six geopolitical zones in addition to Lagos and Abuja.

This means that, all things being equal, in the next 12 months, 1,400 Nigerian workers will be taken away from the property market and considering an average family size of four persons, about 5,600 persons will have decent and quality shelter over their heads.

Besides that, an unquantifiable number of jobs will be created for all the people involved in the housing construction value chain including architects, engineers, estate surveyors and valuers, bricklayers, carpenters, iron-fitters, manufacturers of the various building components , contractors, input suppliers, and even food vendors.

“The launch of the National Housing Delivery Programme is a momentous development because it marks the first time that FMBN and the labour unions have worked closely with experts and industry stakeholders to develop a realistic and acceptable framework for delivering affordable housing to

L--R: Ahmed Dangiwa, MD/CEO, Federal Mortgage Bank of Nigeria (FMBN); Tanko Al Makura, governor, Nasarawa State, and Ayuba Waba, president, Nigeria Labour Congress (NLC) at the groundbreaking event to mark the start of National Affordable Housing Delivery Programme in Lafia recently.

Nigerian workers”, said Ahmed Dangiwa, FMBN’s MD/CEO, at the groundbreaking event.

“The collaborative spirit which this programme has fostered gave room for labour leaders, who understand the realities and financial challenges that Nigerian workers face, to make constructive inputs to the housing designs, pricing range and other relevant conditions for delivering this project”, he added.

The stakeholder involvement and contributions to the project design, the FMBN boss noted, make the new housing programme a fit-for-purpose tool that will deliver houses that workers can afford as part of the overall national efforts towards redressing the huge housing deficit that experts now estimate to be over 22million housing units.

He added that the project was a significant departure from earlier social housing projects, which failed, in part, because they were executed without taking into cognizance the concerns and economic realities of the Nigerian worker.

Ayuba Wabba, NLC president, commended the FMBN for initiating and driving the partnership, noting that the project was laudable and would touch the lives of many Nigerians. He also commended Nasarawa State governor, Umaru Tanko Al-Makura, for providing the land at zero cost and said that state’s workers who would be beneficiaries of the project would be happy and grateful.

Al-Makura expressed delight at the takeoff of the project and thanked FMBN and the labour unions for choosing the state as the first location

Adron Homes excites property buyers, partners Samsung on free smartphones

A

mid the lull in the Nigerian property market which reflects the state of the economy, Adron Homes, a foremost real estate investment firm, has brought excitement into the market, offering buyers the opportunity to own any of the newest models (X9, J4+, J6) of Samsung smart-phones.

Recently, the company, in commemoration of Nigeria’s 58th independence anniversary, unveiled its Independence Day Promo in collaboration with Samsung, intent on giving out 58, 000 Samsung smart-phones as their own way of adding value to the lives of Nigerians.

The promo provides opportunity for property buyers to own any of the newest models (X9, J4+, J6) of Samsung smart-phone by subscribing to, at least, a plot of land in any of the Adron Homes estates in Abuja, Lagos, Ogun, Oyo, and

Nasarawa states.

“The Adron-Samsung collaboration of giving out 58, 000 mobile phones is intended to demonstrate the Adron philosophy of making the incredible affordable”, Adetola Emmanuel-King, the group managing director (GMD) of Adron Homes, explained to the media in Lagos recently.

He also explained that the choice of Samsung brand was necessitated by a shared spirit and philosophy that naturally bind both brands. “High quality products and services typically rendered by Adron Homes and Samsung are comparatively cheap and affordable to the masses in a system where such products are usually for the rich upper class,” he said.

Emmanuel-King disclosed that the company invested heavily in the provision of modern infrastructure for the benefit of thousands of landlords and residents of its estates, and also

for the host communities.

“At Adron Homes, we believe that independence should symbolize strong values that reawaken the spirit of national unity and patriotism in the minds of the younger generations for whom the future awaits to take baton of leadership to posterity,” he said.

Speaking on the implication of the promo to Nigeria, Emmanuel-King said government cannot be the sole providers of basic necessities of life, especially housing, hence the partnership with Samsung to jointly address the issue of home ownership in the country.

“No country has attained greatness but one whose physical and socio-economic advancement has been a function of multifaceted synergy. Our country has realized this much; the concept and practice of public-private partnership now permeates

virtually all the sectors of our nation, as it is now common to find government and private organisations jointly investing in infrastructure provision,” he noted.

Olumide Ojo, head, business development, technology and mobile, Samsung Electronics West Africa, revealed that Samsung identified with Adron Homes because of their strong belief that corporate organisations have to collaborate to develop Nigeria.

Private organizations, he advised, should independently invest in social welfare of the citizens and their host communities. “Samsung is a global brand, but in every country or region we go to, we like to be local so that the people can understand that this brand is not only for the high class. As a global brand, we like to encourage indigenous brands and businesses,” he assured.

for the pilot and also for the initiative, assuring of the state government’s commitment to its success. The governor granted FMBN’s request for an additional five hectares of land for the provision of relevant facilities as well as speedy facilitation of electricity supply to the estate.

Under the terms of the programme, the FMBN will provide low-interest housing loans to registered contributors to the National Housing Fund (NHF) to enable them to purchase the houses. Eligible workers whose loan requirements fall below N5 million will not be expected to pay any equity contribution to access the facility while those requiring N5 million – N15 million will have to provide only 10 equity contribution instead of the old requirement regime of 20 percent and 30 percent.

Professionals canvass CIDB to breathe life into construction industry

P

rofessionals under the aegis of Nigerian Institute of Quantity Surveyors (NIQS) have canvassed, as a matter of urgency, the setting up of a Construction Industry Development Board (CIDB) which, they hope, will breathe life in Nigeria’s construction industry.

Due largely to the economic dow nturn in the country, the construction industry has been experiencing a slowdown which, expects say, is impacting negatively on the nation’s Gross Domestic Product (GDP).

Obafemi Onashille, NIQS president, explained in a statement obtained by BusinessDay at the weekend that CIDB or Construction Industry Development Council (CIDC) would, apart from breathing life into the construction industry, be responsible for the formulation, implementation and regulation of policies that will galvanize the ailing industry which is regarded as the barometer for measuring the economic health of a country.

He also canvassed government’s partnership with built environment professional bodies and contractors to drive the formation of the board which is expected to play a leadership role in the construction industry.

The construction industry in Nigeria is challenged by a number factors that impede its growth and development and, according to Onashille, these factors include housing deficiency, degradation of the urban environment, overstretched infrastructure, high construction costs, government’s non-patronage of local experts and non-payment of contractors and consultants for completed jobs.

Eko Atlantic: Renaissance in a city with its own...

Continued from page 29

and it is situated in the city’s Marina District which is one of the most stunning residential and commercial hubs, offering city living at its finest.

Arguably, Eko Atlantic is the single most ambitious and comprehensive mixed-use development plan to come on stream in the West Africa subregion in recent times. Modeled after the skyscraper District of Manhattan Island in New York City, it is expected that the new city will be home to no fewer than 500,000 residents, with commuter volume expected to exceed 300,000 people daily.

The uniqueness of the initiative is also in its self-sufficient and sustainable state-ofthe-art urban design, its own power, clean water, advanced telecommunications, spacious roads with about 200,000 trees planned to be planted.

The residential units will be constructed as vertical highrise apartment towers which explains its description as

Africa’s Dubai.

Quite unknown to those who just pass-by the city, a good number of people are already living in the city in the Eko Pearl. Similarly, the 14-floor commercial building also has its tenants and is currently in the market for potential tenants.

The city has enjoyed considerable interest from both local and foreign investors. But in the last two years of economic slowdown in the country, interest has come largely from foreign investors. “What we have today is a foreign market unlike two years ago when the city was a Nigerian market”, Chagoury Jnr confirmed.

Of the various prime island locations in Lagos including Ikoyi, Victoria Island and Lekki, land price in Eko Atlantic is the highest, followed closely

by Banana Island, the most exclusive residential location in Lagos. Experts explain that the high price which land attracts in the city derives from its infrastructure.

Tuesday 16 October 2018

C002D5556

LegalPerspectives

With

BUSINESS DAY

27

Odunayo Oyasiji

Elements of a valid contract

T

he presence of some factors are very important for a contractual agreement between parties to be valid and enforceable.

These are things that should serve as a guide in a contractual relationship. Their absence can invalidate a contract. The elements are discussed below1. Offer- There must be at least two parties to a contract. One of the parties is the person making an offer. It is a proposition made by one person to another person indicating that he is ready to enter into a contract with the other party based on some terms and conditions that are to be accepted by the other party to whom the offer is made. An offer can be express or implied (from the conduct of the parties). The offer can be to one party or to the entire public. In Carlill –v- Carbolic Smoke Ball (1893) 1 QB 256the defendant made an advert in a newspaper to the effect that anybody that uses its product in a specific way for two weeks and still catches influenza is going to be paid the sum of 100 dollars. They further stated that they had already deposited the sum of 1000 dollars at a bank to show their seriousness. The plaintiff bought the product and used it as specified and still caught influenza. She then instituted this action against the company to compel them to pay her the sum of 100 dollars.

The company contended that the advert was a mere puff that was meant to show their confidence in the product and that it is impossible to enter into contract with the whole world. The court held that the advertisement was not a contract with the whole world.

Rather, it is a unilateral offer which automatically means that anyone that performs the terms of the offer is already in a contractual relationship with the company. Therefore, it was held that the company is liable to pay the sum of 100 dollars.

An offer is different from an invitation to treat. Invitation to treat represents a situation where other people are being invited to make an offer. Example of such is displaying of goods on the shelf in a shop, invitation to tender and adver-

tisement of goods and services in a newspaper.

2. Acceptance- A contractual relationship does not come into place without the acceptance of an offer being made by one party.

Acceptance can be express or implied through the conduct of the party concerned. If the method of acceptance is not specified then the postal and receipt rules will apply. The postal rule states that the contract is formed at the point of posting an acceptance letter even if the letter is lost in the post- this applies where it is reasonable to use post for the offer and acceptance.

The receipt rule deals mainly with fax and email i.e. when an acceptance is sent by fax or email it is deemed to be valid at the point when it is received (it doesn’t matter if it is read immediately). It must be noted that a conditional acceptance is not a valid acceptance. Conditional acceptance is when the party to whom an offer is made only accepts part of the conditions stipulated in the offer. This condition only represents a counter-offer to the initial offer that was made. In Orient Bank (Nig) Ltd. V. Bilante International Ltd (1997) 8NWLR, pt.515, the respondent applied to the bank for a loan of 18 million naira. The bank made a formal offer in a letter containing all the terms of the contract. The

letter concluded with an instruction for the respondent to sign and return the duplicate copy of the letter to the bank to signify the acceptance of the offer. The respondent instead of signing the offer letter wrote another letter with new terms to the bank. The court held that this act of the respondent is a counter offer and not an acceptance as it seeks to introduce new terms. If a counter offer is accepted then a valid contract will come into place.

3. Intention to create a legal relationship- In a commercial or business transact ion the parties must show clear intention to create a binding legal relationship. If a valid contract comes into place then it means you have the right to institute an action against the other party if the party fails to perform his obligations under the contract. However, when you see the expressions “Subject to contract” or “Without Prejudice” on documents it simply means that the document is not a contract and the party can withdraw from the negotiation any time before the conclusion and signing of a formal contract. Social and domestic agreements are not intended to create a form of legal relationship and therefore not enforceable. An example of this is in the case of Balfour v Balfour [1919] 2 KB 571, a husband who was working abroad promised to pay a monthly allowance of 30

pounds to the wife who was in England. The wife attempted to enforce the agreement by instituting this action. The action failed on the basis that there was no intention to create a legal relationship.

4. Consideration- This is a form of giving something in return under a contractual agreement. Consideration need not be adequate i.e. if an item is sold below the usual market price the seller cannot come back to recover the balance. Consideration is an essential element of a valid contract as this is the element that is absent in the promise of a gift and thereby making such promise to be unenforceable. Consideration most times comes in form of money, goods and services.

However, It may not be in cash or kind. In Dunton V. Dunton (1915, AC), A man promised his wife from who he had just been divorced an allowance of 6 pounds every month if she conducts herself with sobriety and in a respectable orderly and virtuous manner. It was held that the wife had furnished consideration for the allowance as she no longer owes him such duty.

It must be noted that past consideration will not be a valid consideration. For example, an act that has been concluded before the promise of a thing cannot serve as the consideration for what was promised. In Akenzua II Oba

of Benin V. Benin Divisional council (1957) WRNLR- the defendant asked the plaintiff to use his position to influence a timber company to release some timber forest to the defendant. The plaintiff did this and the defendant released four timber forest to the defendant. The plaintiff later demanded that the defendant should release one of the four forests to him for his personal use. The defendant initially agreed but later withdrew. The plaintiff instituted this action to enforce the agreement on the basis that his act of influencing the release of the four timber forest to the defendant is the consideration for the agreement to give one of the forest to him. The court considered the said consideration as past consideration as same was completed before the new promise.

5. Capacity to contractSome people are considered not to have the capacity to enter into a contract. A minor (someone under 18) or a lunatic are examples of people that do not have the legal capacity to enter into a contract. Contracts entered into by these people are voidable and as such they can avoid their obligations under the contract. The only exception in the case of a minor is if the contract entered into are for necessaries i.e. items like food and clothe. In the case of Labinjoh –v- Abake (1924).

5NLR p.33. – an adult seeks to recover the balance due to him on some goods supplied to a girl. The court held that the Infants Relief Act of 1874 is applicable to Nigeria by virtue of Statute of General Application. Therefore, the contract is not enforceable against the minor.

6. Lawful purpose- A contract must not be for an illegal purpose. This means that it must not violate the law or public policy. For example, a contract with the aim of committing a crime is not a valid contract and cannot be enforced.

7. Free Consent- This means that the contract must be entered into by parties freely i.e. without any form of coercion, undue influence, misrepresentation, fraud or mistake.

28

BUSINESS DAY

Harvard Business Review

C002D5556

Tips & Talking Points Get your colleagues to put down their phones in meetings

TALKING POINTS Top Adviser 85%: American multinational Deloitte provides consulting and financial services to 85% of Fortune 500 companies. + Culture of Curiosity?

52%: In a survey conducted by SurveyMonkey, 83% of executives who responded stated that they foster curiosity, while only 52% of employees agreed. + Social Cost 24%: Social media expenses for U.S. companies comprise 24% of the country’s total digital advertising spend. + Side Hustle 40%: According research from Bankrate, almost 40% of Americans supplement their full-time work with an outside source of income. + Concrete and Jungle 40,000: The Seattle Amazon.com workspace, called the The Spheres, has over 40,000 plants indoors.

Help a direct report who doesn’t have clear career goals

A

I

f you’ve ever wondered whether you have a colleague’s full attention while they’re staring at their phone, stop wondering. You don’t. But instead of getting frustrated that coworkers constantly check their devices during meetings, take action. You might start by sharing research that shows even the mere presence of a cellphone — much less its glowing screen and constant buzzing — is bad for productivity. Then talk with your team about the upsides and downsides of using devices during meetings. Propose ground rules like “Be totally present” and “Keep the phone in your pocket.” The team could also

agree to use a simple phrase like “Tech-check” as a friendly way of reminding someone to put their phone away. Once a few rules are in place, stick to them — and point out when a colleague doesn’t. You might get some annoyed looks at first, but over time the team will set a new norm.

(Adapted from “How to Get Someone to Put Away Their Phone and Actually Listen,” by Joseph Grenny and Kelly Andrews.)

Recognize an employee’s good work by asking how they pulled it off

Working parents don’t have to give up on networking

E

W

mploye e s want to feel appreciated, but a simple “Great job!” isn’t always motivating — especially if you say it all the time. When you want to praise someone for their work on a project, try being curious about how they pulled it off. You might say something like, “That was really impressive. Will you tell me how you did it?”

By showing interest in the story behind the accomplishment, you honor the results as well as the person who reached them. You also get a view into how the person solves problems, what parts of the work they love and what makes

Tuesday 16 October 2018

them feel proud — insights that can be helpful when making assignments. And if the employee suffered any personal costs during the work, acknowledge the toll it took. Whether they gave up time with family or bore the political risks of a highly visible project, talking about the costs will encourage the person to be honest with you in the future.

(Adapted from “What Not to Do When You’re Trying to Motivate Your Team,”

by Ron Carucci.)

orking parents can struggle to find time for networking, especially since it often happens during after-work drinks or faraway conferences.

But there are ways to fit networking into your busy life. The first thing to remember is that it isn’t always about meeting new people; it’s also about maintaining connections. Find people you’ve lost touch with, and look at their social media profiles for updates on their lives. Did someone get married recently, move, or get a promotion? These are all perfect reasons to reach out. Another way to strengthen your existing network is to introduce contacts who

would benefit from knowing each other (just make sure they both know an introduction is coming). And if you’re looking to expand your circle, think beyond the coffee or lunch date. Use video conferencing to meet new people “face to face” without leaving the house or office. The great thing about these strategies is you can do them from almost anywhere, and whenever works best for you.

(Adapted from “Making Time for Networking as a Working Parent,” by David Burkus.)

s a manager, helping your direct reports achieve their career goals is part of your job. But what do you do if they aren’t sure what those goals are?

First, tell the person that it’s OK — and sometimes even preferable — not to have a concrete career path in mind. Being overly attached to a specific plan can cause people to miss opportunities that aren’t on the prescribed route.

Next, ask questions to understand what drives the employee, such as, “What problems excite you?” and “What types of work do you want to do less of and more of?” From there, encourage them to think about the skills they’ll need in the future, focusing on those that will be transferrable to other jobs or roles. Then suggest they try small experiments to learn more about what they like to do and where they need to develop.

(Adapted from “How to Mentor Someone Who Doesn’t Know What Their Career Goals Should Be,” by Tania Luna and Jordan Cohen.)

Pump yourself up before a presentation

G

iving a talk in front of an audience can be stressful, and our bodies react to that stress in different ways. If you’re someone who gets jittery and anxious, or whose energy levels flatline, try an exertion ritual before your next presentation. The ritual is just what it sounds like: You exert yourself in order to get your heart moving, feel in touch with your body and boost your energy. You might do a brief workout before heading to the venue, dance in your hotel room or even jump up and down backstage. An

c 2017 Harvard Business School Publishing Corp. Distributed by The New York Times Syndicate

exertion ritual can amp you up while also reducing your levels of stress hormones. It can be especially helpful if you’re presenting at a high-energy event like a sales conference, or if you feel ambivalent about the subject of your talk and need to project enthusiasm.

Choose an activity that suits you; the key is to tap into what helps you perform at your best.

(Adapted from “How to Pump Yourself Up Before a Presentation (or Calm Yourself Down),”

by Nancy Duarte.)

Tuesday 16 October 2018

BUSINESS DAY

29

30 BUSINESS DAY NEWS

C002D5556

SEC still positive as investors count N1.8trn loss in equities IHEANYI NWACHUKWU

…look to derivatives, commodities

igerian investors are still carrying equity-related loss of N1.8 trillion this year, but its apex regulator - the Securities and Exchange Commission (SEC) - is still seeing positive returns in future.

Mary Uduk, acting director-general, SEC, who acknowledges that the upcoming election may have made some investors hold back their investments “and sell or adopt a wait-and-see strategy until after the elections,” says it is “nothing to worry about.”

“We understand the importance of foreign investors for market efficiency, liquidity and transparency. However, it is also important for us to develop local investors by building their confidence and encouraging their participation,” Uduk said in response to questions from journalists on the sidelines of the just concluded World Bank/IMF Annual Meetings in Bali, Indonesia.

Total transactions on the Nigerian Stock Exchange (NSE) declined from January high of N394.44 billion to N133.84 billion in

August. Foreign portfolio investors who brought in N437.14billion into the equities market as at August rather took N469.71billion out of the same market, the trading figures from major custodians and market operators on their Foreign Portfolio Investment (FPI) flows show.

More domestic stock investors have ahead of Nigeria’s 2019 general elections joined their foreign counterparts in their cautious walk on Custom Street.

Investors’ concerns mostly relate to heated political space which has shown the opposition PDP successfully altering the narrative that threatens the President Muhammadu Buhari winning machine of 2015 and the growing internal squabbles of the ruling APC which is seen taking a huge toll on its reputation.

While at record lows, the stock market seems not attractive for both new issuers and investors, Uduk said the SEC is exploring avenues to deepen the market, through the introduction of different products like derivatives, non interest capital market products and

N

commodities and finalising rules on derivatives as well as have a standing Committee in developing a vibrant Commodity Ecosystem.

The declined GDP in second-quarter (Q2) also raises fears over listed companies churning out impressive third-quarter (Q3) financials that are capable of changing the story of trading on the nation’s Bourse.

From a year-open high of N13.609trillion, the value of Nigeria’s stock market has depleted to N11.849 trillion due to increased sell off. Nigeria’s Gross Domestic Product (GDP) grew by 1.50 percent in the second quarter of 2018, a downturn from 1.95 percent in the first quarter. Equity research analysts believe election fever has helped dampen investors’ confidence on Custom Street.

Following persisted selloffs driven by the Foreign Portfolio Investors (FPIs), negative returns from equities reached 15.13percent year-to-date (YtD) while the NSE All Share Index (ASI) touched 32,456.98 points as at October 12, 2018.

Order barring 50 Nigerians from travelling is unconstitutional

T

he Federal Government released list of 50 Nigerians it barred from foreign travel, through a Presidential Executive Order (PEO), is said to be unconstitutional and undemocratic.

While Access to Justice supports efforts to fight corruption in the most vigorous way possible, the PEO is an unconstitutional overreach of the executive powers of government, according to Joseph Otteh, director, Access to Justice.

“It usurps legislative and judicial powers, and particularly emasculates the powers of courts to determine cases against those named in the

PEO and exercise its’ inherent jurisdiction to control conditions related to how undertrial (accused) persons exercise their rights to liberty and movement.

“The PEO is also a gratuitous piece of dangerous precedent that opens the door to an uncontrollable dictatorship; it can be used arbitrarily and vindictively to fight and muzzle political opposition, and promote wholly politically partisan objectives. It is unquestionably anti-democratic and a veiled snare for citizens’ rights,” Otteh said.

It is also legally warrantless; the government claims the judgment of Hon. Justice

Ijeoma Ojukwu on the case involving PEO 6, gives it authority to bar the named persons. This is so very untrue: the judgment clearly required the government to implement PEO 6 in a way that is consistent with the rule of law; the court ruled that the government (Attorney General) could not block, freeze or confiscate any funds or assets without an order of court! If the government cannot take property without an order of court, how could it legitimately bar persons (presumed innocent by the law), from exercising their rights to liberty and movement without an order of court?

Aboyeji resigns as CEO of Flutterwave JUMOKE AKIYODE-LAWANSON

I

yinoluwa Aboyeji has resigned his position as CEO of Flutterwave, a leading online payment technology solution company, yesterday.

Aboyeji, who is also a cofounder of Andela, a company that specialises in training technology software developers, says he decided to step down from his role as CEO to focus on giving back to startup community, where he owes so much of his success.

Flutterwave is an API that allows businesses and individuals’ process credit card and local alternative payments, like mobile money and ACH, across Africa. They make it possible for global merchants to process payments like a local African company.

In a statement made available to BusinessDay, Aboyeji said, “just a little over 2 years ago in May of 2016, myself and my co-founders at Flutterwave started on this unlikely and amazing journey to build payments technology and infrastructure that could connect Africa to the global economy and usher in a new wave of prosperity across Africa. We knew it would be an incredibly difficult and intriguing mission but we never imagined we would have the kind of impact we did so quickly.

Two years later the team at Flutterwave has built one of the world fastest growing payments business of all time from Africa, processing over 700 billion naira in payments across over 50 million transactions generating revenues in the billions of naira. Be-

yond its scale, its human impact has been profound, from connecting thousands of riders and drivers to daily enabling thousands of families in diaspora share prosperity with their love ones at home.

It has been an incredible privilege to lead the team through an era of incredible growth and impact. I wouldn’t trade this experience for the world.”

He expressed gratitude to the hard working and dedicated team at Flutterwave, investors and advisors, saying that; “the success of Flutterwave would have been impossible without the hard work and genius of the talented team of young people who are Flutterwave, the incredible support of our investors and advisors and the good will of so many who have been our biggest champions and advocates.”

Tuesday 16 October 2018

Tuesday 16 October 2018

C002D5556

31 NEWS

BUSINESS DAY

West African nations collaborate Disappearance of Saudi journalist Start-ups compete to represent Nigeria could unsettle global oil market at Seedstars regional Africa summit to reduce election cost JAMES KWEN, Abuja

W

est Africa countries have gone into collaboration to reduce the high rising cost of elections in the region through offering technical and professional support to one another.

The countries under the auspices of the Economic Community of West African States (ECOWAS) Network of Electoral Commissions (ECONEC) had initiated a two-year work plan between 2016 and 2018, borne out of serious concern by all Electoral Commission in the subregion about the sparingly cost of conducting elections.

Mahmood Yakubu, president of ECONEC and chairman, Independent National Electoral Commission (INEC), said the ever rising cost of voter registration and the compilation of the voters register, recruitment and training of electoral officials, provision of electoral logistics, election security, civic and voter education, procurement of sensitive and non-sensitive materials, deployment of election technology, undertaking regular engagement with stakeholders, among others had been

enormous.

Yakubu spoke at a workshop in Abuja on Monday to validate Study on Elections in the ECOWAS Region with Benin Republic, Cape Verde, Guinea Bissau, Liberia, Nigeria and Senegal as case studies.

He explained that the study explored what should be known by election managers working together with national stakeholders and development partners to find ways to reduce the cost of election without jettisoning new innovations or compromising the quality, transparency and credibility of elections.

According to him, ECONEC has undertaken this assessment, solidarity and midterm review missions in several member states and the purpose is for electoral bodies to share experiences, expertise and even pull resources towards ensuring best practices and also reducing the cost of elections amongst member states.

The ECONC President recounted that, “Burkina Faso assisted Niger republic with ballot boxes and the printing of the voter register for the February 2016 Presidential and Parliamentary elections.

ISAAC ANYAOGU

A

nalysts are concerned that the disappearance of Saudi journalist, Jamal Khashoggi, could unsettle the global oil market, one of the clearest indication yet of how volatile the crude oil market has become.

The concern is that the ongoing standoff between Western countries and Saudi Arabia over the journalist disappearance could derail talks in the coming weeks between OPEC and non-OPEC on how to deal with the US sanctions on Iran. There are fears also that it could promote instability among the club of oil producers if Saudi Arabia is weakened.

“For the global oil market, this situation is a direct threat to current market stability too. With OPEC’s leading producer, and proponent of the current oil production deal with Russia, weakened or even threatened by regime implosion, the sharks will be hunting very soon,” observes Cyril Widdershoven, energy analyst and founder of Dutch consultancy, Verocy.

Widdershoven further notes, “Several OPEC members will not be totally un-

happy with the volte face of MBS, as some indicated. An instable Saudi Arabia gives room to manoeuvre for Iran, Qatar and Venezuela. These three will be looking for any weak point in the Saudi power constellation, as this will weaken the Moscow-Riyadh link too.”

On Sunday, the stock market in Saudi Arabia plunged 7% on Khashoggi fallout; the biggest drop since 2014, and analysts believe oil could take a beating next.

Robert Carnell, chief economist head of research said that the incident “opens a new source of risk.”

“Any Saudi retaliation will presumably mainly come through reduced oil supply and higher prices. That won’t help market sentiment,” he wrote in a note on Monday.

Relations between Saudi Arabia and Western countries have deteriorated rapidly, after Khashoggi, who writes a column for the Washington Post, disappeared on October 2 after visiting the Saudi Consulate in Istanbul, Turkey, with many speakers and delegates threatening to pull out of the Riyadh for the Future Investment Initiative 2018 coming up in less than two weeks.

GBEMI FAMINU

S

eedstars World, the largest seed-stage startup competition for emerging markets and fastgrowing start-up scenes, has ended its scouting and is left with 10 start-ups to compete at the sixth edition of Seedstars Lagos.

With the support of Seed space Lagos, Seedstars World will be holding a competition on October 19 to choose the country’s Best Start-up, with 10 of Nigeria’s best seed-stage start-ups as participant competitors, the winner will be chosen to represent Nigeria at the Seedstars Regional Africa Summit and also be given the opportunity to compete at the Seedstars Summit in Switzerland for the title of Seedstars Global Winner and also win up to $1 million in equity investments, among other prizes.

According to Alessia Balducci, General Manager of Seedspace Lagos, she said “Seedstars World is a platform that connects investors and stakeholders with the next generation of entrepreneurs.

Since this will be our 6th time organizing the event at Lagos, the stakes are high and we are very excited. We’ve been in

this ecosystem for more than 6 years now and know there are companies in Nigeria developing high-quality products. We are looking for the best and will take it with us to Switzerland in 2019!”

The startups will pitch in front of a jury including Ahmed Umar, COO at Wennovation Hub, Ifeyinwa Ugochukwu, Director, Partnerships and Evaluation at The Tony Elumelu Foundation, and Chike Asiodu, Managing Director at TextNigeria and more. On October 16, Cisco a supporter of the program, will host a boot-camp for the event.

The competitors include: Aspire Power Solutions, which works to eliminate the barriers that limit access to clean, affordable and reliable energy sources; Beat Drone: Beat Drone uses drones to improve harvest yields and reduce production cost, thus making food affordable and eliminating hunger and poverty ;Biyabot: Biya is a chatbased payment platform that allows users make payments as well as allow merchants request and receive payments via messaging; BridgeBooks: BridgeBooks provides SMEs a platform to structure their business finances, Access

32 BUSINESS DAY NEWS

C002D5556

Tuesday 16 October 2018

Lawyers insist Buhari’s travel ban violates extant laws … CACOL backs President JOSHUA BASSEY, INIOBONG IWOK & ODUNAYO OYASIJI

R

ecently, President Muhammadu Buhari, while delivering a speech at the 2018 annual conference of the Nigerian Bar Association (NBA) said “rule of law must be subject to the supremacy of the nation’s security and national interest… where national security and public interest are threatened or there is a likelihood of their being threatened, the individual rights of those allegedly responsible must take second place, in favour of the greater good of society.”

However, based on the above comment by President Buhari, last Saturday’ decision ordering the placement of 50 politically-exposed persons (PEP) on travelling freeze and their accounts on moratorium and security watch, pending the full determination of their corruption cases, ongoing or under investigation, did not come as a surprise.

The President through his senior special assistant on media and publicity, Garba Shehu, had said the move was part of the implementation of Executive Order Number 6, which seeks to ensure that all assets within a minimum value of N50 million or equivalent, subject to investigation or litigation are protected from dissipation by employing all available lawful means, pending the final determination of any corruption-related matter.

This move has been criticised across the country and seen as capable of undermining the importance of the rule of law, thereby lending credence to arbitrary rule.

The main opposition People’s Democratic Party (PDP), through its spokes-

man, Kola Ologbodiyan, had described the move as the height of autocracy, despotism, fascism, and a plot to railroad Nigeria into a banana republic, urging all democratic minded citizens to rise against the ban.

While the executive order does not empower the President to make, interpret and execute the law at will, the move by the President cannot be justified by the recent court order legalising Executive Order 6, as the order states that Attorney General of the Federation is to approach the court for orders of court before proceeding with the purpose of the order.

It is however imperative to note that Section 41(1) of the Constitution of Nigeria 1999 (as amended) provides for the freedom of movement of every Nigerian. The Constitution in Section 1(3) also states that “If any other law is inconsistent with the provisions of this Constitution, this Constitution shall prevail, and that other law shall, to the extent of the inconsistency, be void.” This provision obviously decides the fate of the presidential ban (based on Executive Order 6) as against the provision of the constitution in section 41 (1), which guarantees the right to move freely.

While senior lawyers and politicians in the country have admitted that there was the need to check the rising corruption in the country, they however, described such move by the president as dictatorial and draw back to the military era.

John Bayeishea, a senior advocate of Nigeria, said it was the first time such large number of high profile Nigerians would be ban from leaving the country.

L-R: Ugbaja Joseph, group head, civil and building engineering, Standards Organisation of Nigeria (SON); Makwe Matthias, deputy director, Standards Organisation of Nigeria (SON); Yetunde Odejayi, permanent secretary, office of deputy governor, Lagos State; Joseph Majoku, group managing director/CEO, Dangote Cement Plc; Rasheed Adebowale, national president, National Block Makers of Nigeria, and John Meheux, assistant corps marshal/zonal commanding officer zone 2, Lagos/Ogun State, Federal Road Safety Corps (FRSC), during the Launch of Dangote BlocMaster Cement in Lagos, yesterday.

‘Nigeria needs to ride on back of gas next 50 years to diversify economy’ FRANK UZUEGBUNAM, SOLA BELLO, HARRISON EDEH, Abuja

A

mid concerns of dwindling fortunes of oil revenues, stakeholders at the ongoing Nigeria Gas Association Conference and Exhibitions say Nigeria needs to ride fast on the back of gas in the next 50 years to diversify the economy and grow the gas sub-sector.

The stakeholders unanimously agreed that the diminishing relevance of oil resources with greater attention on clean energy models by global companies is opening the door for Nigeria’s gas diversification, with gas value chain linking key sectors of the economy such as agriculture, power supply and other domestic energy utilities.

Speaking at one of the panels, Gaius Obaseki, lead moderator of the panel and former group managing director of the Nigerian Nation-

2018 Alaghodaro Summit to focus on impact of governance on Edo people

E

do State government has announced that the focus of the 2018 edition of Alaghodaro Summit will be Edo people and will showcase how the state is designing and implementing policies, programmes and initiatives to improve the lives of the people, engender inclusive growth and enhance law and order.

In a statement, special adviser to the Governor on Media and Communication Strategy, Crusoe Osagie, says the 2018 Alaghodaro Summit will shed light on the various policies and reforms undergirding the state government’s commitment to the people.

According to Osagie, “The

2018 Alaghodaro Summit will redefine the face of government relations with the people as it will provide the platform to dissect policies on the fight against human trafficking, efforts to maintain law and order through novel policy formulation and implementation, skills development and jobs creation, among others.

“The 2017 summit focused on investment promotion and engagement with the private sector, laying the groundwork for the various landmark investment deals the state government has entered into. But this year, we are focused on our people, their welfare and wellbeing.

It is pertinent to restate that nothing beats the investment

in people, which the state government has embarked upon,” he said.

He maintained that the state government is keen on deepening investment in human capital and building an equitable society, adding, “We have shown commitment to the people with the huge investment in capacity building for teachers through the Edo Basic Education Sector Transformation (Edo-BEST), the Edo Healthcare Improvement Programme (Edo-HIP), the Edo State Taskforce Against Human Trafficking (ETAHT) and the various trainings and jobs through EdoJobs, and other such programmes that elevate the dignity of man in Edo State.”

al Petroleum Corporation (NNPC) calls on the Federal government to ensure that the Gas Infrastructure is properly linked to off takers.

“Focus on domestic energy demand is very vital for Nigeria due largely to the growing population, and the large market and the expansion rate of the Gas value chains, which inter-linked largely with the petro-chemicals, power sector and other Gas for domestic usages,” he said.

Also speaking, Tony Attah, managing director/CEO, Nigeria LNG Limited and the vice president of Bonny Gas Transport, said Nigeria had ridden on the wings of petroleum to fly in the past 50 years, while revealing that Nigeria needed to fly on the wings of gas in the next 50 years to consolidate its economic diversification journey.

The CEO said, “Energy demand will grow by 30% and Nigeria must be read for that huge market opportunity. LNG is ready to lead

the way in that respect given the huge investments running into billions we have put down in the sector.

“We must get prepared for that future by ensuring that we are prepared. The World need energy but not at all costs. The Trinidad and Tobago success story as the wealthiest country in the Caribbean hinging its economic success story on gas evolution.”

According to Attah, oil will loose its value up to 50% in no distance time, but the value of the gas revenue is increasing because of global attention to clean energy and de-carbonisation.

“The focus on domestic Gas in Nigeria should take us to that diversification we needed in the gas. We must create the enabling environment for the gas diversification to happen.”

Also in his remarks, Gbite Adeniji, senior special assistant to the minister of state for petroleum resources

who represented the minister, said the government was worried by the inability of offtakers to take the available gas, stating that the government was working hard on ensuring security of payment of off-takers to guarantee availability of domestic gas.

He pointed out further that the Federal government is willing to settle tariff methodologies to attract investments into the Gas value chain. In his earlier remarks, Dada Thomas, president, Nigerian Gas Association, said there was a direct correlation between power consumption and the Gross Domestic Product (GDP).

He said, “Assuming that some 23% of global primary energy consumption was from natural gas in 2017 then there is a correlation between gas consumption and GDP. This is even more so for Nigeria where currently some 80% of grid power is generated from gas fired power plants.

Oil rises towards $85 as Asian shares slip on lingering trade, US rates worries

A

sian shares slipped on Monday as worries over Sino-US trade disputes, a possible slowdown in the Chinese economy and higher US borrowing costs tempered optimism, despite a rebound in global equities.

Not helping the mood, oil prices jumped and Saudi Arabian shares tumbled on rising diplomatic tensions between Riyadh and the West.

The situation arose after the monarchy warned against threats to punish it over disappearance of a journalist. Oil prices reversed their downtrend since early this month.

Brent crude futures rose

to $81.82 per barrel. Investors were also bracing for a European Union summit meeting from Wednesday.

MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.3 percent while Japan’s Nikkei dropped 0.9 percent.

MSCI’s broadest gauge of the world’s stock markets , was off 0.1 percent after a sizable 3.87 percent decline last week to a one-year nadir, and marking its biggest weekly fall since March.

The market shakeout has been blamed on a series of factors, including worries about the impact of a USChina trade war, a spike in US bond yields this week and caution ahead of earnings season.

Although selling appeared to have abated on Friday, partly after Chinese trade data showed strong growth in September, many investors remained cautious.

“Some people say markets drew comfort from China’s exports data. But to me it seems so obvious the numbers were inflated by front-loading ahead of the introduction of tariffs,” said Norihiro Fujito, chief investment analyst at Mitsubishi UFJ Morgan Stanley Securities.

Fujito said the trade war was starting to take a toll on growth in China, noting that data released later on Friday showed auto sales in China posted the biggest drop in seven years.

Tuesday 16 October 2018

C002D5556

33 NEWS

BUSINESS DAY

Boko Haram executes another aide worker, says Leah will live as slave

T

L-R: Chairman, Energy Institute of Nigeria, Osten Olorunsola FEI; CEO, Energy Institute London, Louise Kingham; president, Nigeria Gas Association, Dada Thomas; managing director, Energy Institute of Nigeria; Yewande Abiose, former minister of power, Federal Republic of Nigeria, and Lanre Babalola, at the Energy Institutes Inaugural Energy Sustainability Conference held in Lagos, recently.

Regulators turn blind eye as substandard products flood market ODINAKA ANUDU

S

ubstandard products are all over the Nigerian market owing to the seeming lack of capacity of regulatory agencies to contain the dangerous trend.

From electric bulbs to cables and wires, down to television sets and leather shoes, Nigerian consumers are compelled to replace the same products now and again with huge negative impact on their shrunken wallets.

Today, most of imported energy bulbs hardly last beyond three weeks, just as a number of phones manufactured by China, sold between N25,000 and N40,000, develop faults few weeks after purchase.

In the Prohibition List of the Nigeria Customs, tomato paste, ball point pens, corrugated paper and paper boards, soaps and detergents in retail packs, all

types of footwear, bags and suitcases (excluding safety shoes used in oil industries, sports shoes, canvass shoes all completely knocked down) are banned from being imported, but substandard versions of these items are ironically finding their ways into the Nigerian market as a result of laxity and lack of capacity of the Customs to deal with the situation.

Also, the Standards Organisation of Nigeria (SON) has improved infrastructure and laboratories for product testing across the country, keying into the EU-funded and UNIDO-administered National Quality Infrastructure Project, but the body is underfunded and lacks capacity in terms of technology and personnel to check imported Chinese goods, analysts say.

The National Agency for Food and Drug Administration and Control is not exempted from this situation,

with a number of low-quality food products in the market.

“How can they do with so much with little funds and few personnel,” Muda Yusuf, director-general of Lagos Chamber of Commerce and Industry (LCCI), told BusinessDay on the phone.

“There are close to 4,000 borders. Many of these regulatory agencies need funding and logistics to work week, but these days, they are even supported by the private sector who they are supposed to regulate,” Yusuf said.

Double-digit inflation (11.23%) and states’ inability to pay salaries have eroded incomes of consumers. The World Bank puts textiles smuggled into Nigeria through Benin Republic alone at $2.2 billion a year.

This is against local textile production worth $40 million annually.

“It is all down to two things: price and quality.

You cannot want a low price and a high quality at the same time. You must trade off one,” Ike Ibeabuchi, chief executive of MD Services Limited, a manufacturing and services firm, said.

Regulators say they are putting up a good fight to combat substandard products. Sources in SON complain that the ouster of the agency from the ports has had a negative impact on the economy.

“We have found out that unscrupulous people bring in the containers from the seaports, lock themselves in warehouses to forcefully unstuff the tyres, wrap and label them before loading to markets all over Nigeria,” Osita Aboloma, director general, SON, said in July.

Mojisola Adeyeye, director-general of NAFDAC, said in an interview with BusinessDay that there have been many weak prosecutions in the country.

Two pipeline accidents, 60 lives lost in 90 days raise red flag STEPHEN ONYEKWELU

T

wo oil and gas pipelines have exploded, taking with them at least 60 lives in the last 90 days in Nigeria, raising questions about safety of lives and property.

At least, 60 people were killed in an oil-pipeline explosion in Nigeria’s south-eastern Abia State, a spokesman for the National Emergency Management Agency said as reported by Bloomberg. The pipeline belongs to the stateowned oil company, Nigerian National Petroleum Corporation (NNPC). NNPC confirmed the explosion, which took place on Friday, in a statement, without disclosing the death toll. Villagers were believed to have been skimming oil from a leak in the

pipeline when the explosion occurred and ignited a massive fire.

Similarly, a petrol pipeline exploded July 9, in Dango Dagbe village, in Niger state, central Nigeria, leaving three people wounded. Ibrahim Yahaya, a spokesman for the Nigeria Security and Civil Defence Corps, had said by email. Cause of explosion was unknown and the NNPC was reportedly investigating the incident.

“Nigeria loses over 10 – 15 percent of crude oil to pipeline vandalism and crude theft. When you factor in about 90 days needed to bring back on-stream shut-in pipelines, we are talking large magnitude of losses,” Abdulrazaq Isa, chairman/CEO of Waltlersmith Limited, an indigenous exploration and

production (E&P) company, said in a separate interview with BusinessDay. On June 20, 2013, Nigeria’s daily crude oil output declined by 150,000 barrels, when Shell Petroleum Development Company of Nigeria Limited (SPDC), joint venture, said it had shut the Trans Niger Pipeline (TNP) following an explosion and fire at a crude theft point on the 28” section of the facility at Bodo West in Ogoni land.

According to a statement, Tony Okonedo, then corporate media relations manager, prior to the incident, SPDC had shut down the 28” TNP to remove crude theft connections, and had closed the 24” TNP as a precautionary response to the fire.

People with deep knowledge of Nigeria’s oil and gas

industry have suggested innovative ways to solve the recurrent decimal of crude theft and pipeline vandalism.

Esimaje Brikinn, general manager, policy, government and public affairs of Chevron Nigeria Limited, has emphasised the value of participatory partnerships in combating the menace of oil theft and pipeline vandalism in oil and gas operations, especially in the Niger Delta.

Brikinn noted that every international oil company in Nigeria has been affected in one way or the other by the activities of oil thieves, engaging in illegal bunkering and “local refining” operations adding that their activities continue to cause significant damage to the environment and affect revenue streams leading to loss of benefits.

he Islamic State West Africa Province (ISWAP), a faction of Boko Haram, has executed Hauwa Leman, an aide worker with the International Committee of the Red Cross (ICRC), TheCable reported Monday evening.

The terrorists also vowed to keep Leah Sharibu, the Dapchi schoolgirl, as “a slave for life”, TheCable exclusively gathered.

In a short clip seen by a special correspondent of TheCable, Leman was forced to kneel down, with her hands tied inside a white hijab which has a crest symbol, and then shot at a close range.

In September 2018, the insurgent group killed Saifura Ahmed, one of the three humanitarian workers abducted in Rann, Kala Balge local government area of Borno state, in March 2018, in a similar manner.

Leman, a 24-year-old midwife and student of health education at the University of Maiduguri, was in the group that was abducted.

Four soldiers, four policemen and three humanitarian aid workers were killed in the attack. Toafic Toure, ICRC operational communication delegate, Maiduguri sub-delegation, had on Sunday pleaded with the federal government to avert Leman’s killing as the Monday deadline given by the insurgents approached.

ISWAP, in a short statement, said: “We have kept our word exactly as we said, by killing another humanitarian worker, Hauwa Leman, who is working with the International Committee of the Red Cross (ICRC) that were abducted during a raid on a military facility in Rann, Kala Balge in March 2018.

“Saifura and Hauwa were killed because they are considered as Murtads (apostates) by the group because they were once Muslims that have abandoned their Islam,

the moment they chose to work with the Red Cross, and for us, there is no difference between Red Cross and UNICEF. “If we see them, we will kill the apostates among them, men or women, and chose to kill or keep the infidels as slaves, men or women.”

‘Leah and Alice will be our slaves’ Meanwhile, ISWAP has threatened to keep Sharibu as a slave. She is the only Christian among the 110 girls abducted at the Government Girls’ Science and Technical College, Dapchi, Yobe state, on February 19, 2018.

While other girls were released, she was kept back because she refused to renounce her Christian faith.

There has been a global plea for her release.

The group said in the statement that Alice Ngaddah, a Christian who works with UNICEF, will also be kept as a slave.

“From today”, ISWAP said, Sharibu, 15, and Ngaddah, a mother of two, “are now our slaves”. “Based on our doctrines, it is now lawful for us to do whatever we want to do with them,” the group further said.

‘Tell my parents i’m in trouble’ In the audio sent to one of her male friends when she was captured in March, Leman, who spoke in Hausa, said her parents should be informed that she had been kidnapped.

Running and panting, the victim said: “We are under attack in Rann. They are shooting everywhere please pray for me; please go and tell my parents that I am in trouble.

“Please, look for Fatima and tell her they are taking us away. They have entered here now…”

At that point, a male voice ordered her to keep quiet and not to move an inch.

That was the last that was heard from her.

Ambode tasks judges on fair, speedy justice delivery JOSHUA BASSEY

L

agos State governor, Akinwunmi Ambode, says it is time the judiciary devised innovative ways of addressing delays in justice delivery and its negative impact on the nation’s judicial system.

Ambode spoke Monday at a special service to mark the official commencement of 2018/2019 legal year of Lagos State judiciary, saying all hands need to be on deck towards building confidence in the legal system.

According to Ambode, being the economic hub of Africa, Lagos must be at the vanguard of judicial reforms, and therefore its justice sector must be sound, fair and effective.

“As our state remains the cynosure of excellence and the economic hub of Africa, our judiciary must continue to be at the forefront of judicial reforms to meet the expectations of the modern day justice sector. My lords, we bear the responsibility of 24 million people who look up to you and I to protect them with the law.

Our justice system must remain sound, fair and effective.

“The plague of delay in justice delivery is still of major concern. All stakeholders in the sector must ensure that the issue of delay is tackled vigorously by creating innovative models for achieving speedy and efficient justice delivery system, which can be replicated more broadly across the country.

34 BUSINESS DAY NEWS

C002D5556

November date for $2bn Lagos-Kano rail...

Continued from page 1

the rehabilitation of the combined 3,500 kilometers narrow gauge

lines across the country.

A top official of Transnet told BusinessDay on the sidelines of FT Africa summit that the company has formally written to Ministry of Transportation and has gotten approval to lead the $2 billion railway rehabilitation work.

GE was initially the lead in the consortium, which has SinoHydro, a leading infrastructure construction services corporation, Transnet, a leader in transportation and logistics infrastructure management and APM Terminals, a global port, terminal and intermodal inland services provider as members.

According to the Transnet top official, the Federal Ministry of Finance has already issued a $45 million standby credit for the interim phase of the railway rehabilitation project to take off in November.

Out of the $45 million, about $19 million is to be given to Transnet to bring in about 200 flatbed wagons

to move containers from the Apapa ports, another $20 million is to be given Chinese SinoHydro for the rehabilitation of the railway tracks up to Ilorin in Kwara state while the balance of $6 million will be given to GE to rehabilitate 10 coaches. JP Morgan is supposed to monetise the US$45 million standby letters of credit.

However,plansfortheinterimphase of the project to take off in November could be delayed if the repairs to the tracksarenotcompletedbeforethatdate, the top official told BusinessDay. He said that there would be no need to bring new wagons into the country if the tracks are not reliable.”

We would not want new wagons to be brought only for them to derailed” He disclosed that the federal government is eager that the project commences ahead of the election but chances are slim that it would commence given that there is no indication that SinoHydro has moved to site.

Fidet Okhiria, managing director of Nigeria Railway Corporation (NRC) said he was in a meeting and could not speak when BusinessDay contacted him to confirm when

SinoHydro will move to site.

But Abdul Omayele Usman, a keen follower of ongoing railway rehabilitation projects across the country who spoke to our reporter disclosed at the time of filing this report, that, there is no sign that preliminary refurbishment has commenced on the narrow gauge lines.

In the interim phase of the rail concession, Remedial Works will be carried out on part of the narrowgauge rail line system to make it technically and economically operable.

In addition, a joint operation will be established between the Consortium and the Nigeria Railway Corporation (NRC) with an initial supply of 10 locomotives and 200 wagons to augment the existing rolling stock in Nigeria.

The program is expected to deliver an increase in the number of available locomotives, thus increasing the frequency of passenger and freight rail services. In addition, freight haulage capacity by the end of the first 12 months of the interim phase is expected to increase roughly tenfold, from its current less than 50,000 metric tonnes per annum to about 500,000 metric tonnes per annum.

Over the decades, Nigeria’s dilapidated rail system which serves as the

L-R: Maikanti Baru, group managing director, NNPC; Luis Rafecas, secretary-general, International Gas Union, and Dada Thomas, president, Nigerian Gas Association (NGA), at the opening of the 11th International Conference and Exhibition of the NGA in Abuja, yesterday.

NAN

PMB’s Executive Order 6 brings back...

Continued from page 1

cases. It immediately ran into a storm of protests by the opposition

party, lawyers, human rights activists and citizen’s groups.

EO6 follows fast upon E05 that imposes taxation in Nigeria on the assets of Nigerians living abroad. The rate is 30 percent.

What is at stake and what can the Executive Orders do or not do?

First, the Government in commencing enforcement of EO6, claims legal validity. Justice Ijeoma Ojukwu of the Federal High Court, Abuja on Wednesday, October 10 ruled that the President has the powers to roll out Executive Order 6. The Constitution grants the President powers to issue executive orders to enable execution of itspolicies.Therewasasignificantcaveat.

The Honourable Judge insisted that the AG must exercise the powers he wields courtesyofEO6inlinewiththeconstitution. It means that the AG cannot order the seizure of any property without a court order.

EO6 draws on powers the Constitution confers on the President in Part Two, Section 5. It states, (1) Subject to the provisions of this Constitution, the executive powers of the Federation: (a) shall be vested in the President

and may subject as aforesaid and to the provisions of any law made by the National Assembly, be exercised by him either directly or through the VicePresident and Ministers of the Government of the Federation or officers in the public service of the Federation; and (b) shall extend to the execution and maintenance of this Constitution, all laws made by the National Assembly and to all matters with respect to which the National Assembly has, for the time being, power to make laws.”

Part Two, Section 5 grants the National Assembly primacy in legislation.

Second, the Executive Order tries to force the matter of action on corruption away from the jurisdiction of the courts.

Snippets from the initial list of persons affected by EO6 show that they are matters still undergoing court processes.

A further consideration is that EO6 follows upon the insistence of the Government to try and force extra-legal procedures on the grounds of national interest. National interest is the justification for E06.

Presidential spokesman Garba Shehu stated: “It is instructive to note that EO6 was specifically directed to relevant law enforcement agencies to ensurethatallassetswithinaminimum value of N50m or equivalent, subject to litigationareprotected from dissipation byemployingallavailablelawfulmeans

pending final determination of any corruption-related matter.

“The Buhari administration reassures all well-meaning and patriotic Nigerians of its commitment to the fight against corruption, in accordance with the 1999 Constitution (as amended) and the General Principles of the Rule of Law.” AttherecentconferenceoftheNigerian Bar Association, President Buhari canvassed the case for going outside the law in pursuit of matters of national interest. Lawyers and the citizenry shot him down, saying the Government cannot infringe on the rights of citizens under any guise or justification.

Right to personal liberty and ownership of property is one of the fundamental rights the 1999 Constitution grants citizens. Rights under Chapter 1V include the right to life, the right to dignity of human persons, right to acquire and own immovable property and the right to freedom of movement, among others.

Section 44 of Chapter 1V proclaims that “No moveable property or any interest in an immovable property shall be taken possession of compulsorily and no right over or interest in any such property shall be acquired compulsorily in any part of Nigeria except in the manner and for the purposes prescribed by a law.”

The Federal Government could likely point to Section 44, sub-section

artery of any economy has given rise to man hours lost on the road due to its bad condition.

Patrick Adenusi, chief executive officer, Safety Beyond Borders commended the concession deal reached between both parties, describing it as one of the best ways to go.

According to him, it will make the haulage of goods and services easier

Tuesday 16 October 2018

and at a cheaper, reduce fatalities and reduce vehicular pressure on the road.

He expressed worry that Nigeria has lost enormous resources by not investing in the rail network, spending huge sums of resources in building roads that cannot be maintained and wasting huge amount of resources on rickety trucks importation which constitutes safety hazard.

Stocks with high volatility show mixed performance on the market f you bought low beta stocks earlier in the year hoping to protect yourself from market volatility, there’s a 50 percent chance you took a wrong bet.

BusinessDay analysis shows that many low beta stocks underperformed the Nigerian Stock Exchange broad index this year.

Low beta stocks are stocks with a beta score less than one. This means that the stocks are less volatile than the market. Investors buy such stocks as a way of diversifying risk in the portfolio.

In a bear market, like we are currently experiencing, these stocks tend to outperform the market. At least in theory.

However, year to date analysis of stocks listed on the NSE30 index shows that out of 21 companies with beta values lower than 1.0, 10 of these companies were currently underperforming the market. The NSE All Share index is currently down 15.28 percent year to date as at Monday close of trading.

The NSE30 includes the top 30 companies in terms of market capitalisation and liquidity on the NSE Among the low beta under-performers, forte oil with a beta value of 0.75 emerged as the biggest underperformer with a negative return of 53.4 percent.

Others companies that had negative returns includes; International Breweries (-44%, 0.86), PZ cusson (-38%, 0.62), UBN (-36.5, 0.89), Dangote Flour (-32.7%, 0.90), Presco (-22.6%, 0.40), Dangote Sugar (-22.4%, 0.55), Flour Mill (-21.2%, 0.63), Access Bank (-19.3%, 0.77), and Total Nigeria (-15.6%, 0.44).

Paul Uzum, a Lagos based stockbroker explains, “Theories most of the time doesn’t apply to the Nigerian stock exchange market. What we are seeing now on these stocks is more of a heavy price correction as most of these stocks experienced a bullish run last year despite not having any solid fundamental to justify their movements”.

“FX challenge last three years which discouraged the importation of palm oil caused companies like Presco and Okomu oil to make significant income, however this is not the case now for a company like Presco” he added.

Still, the theory held in the market at least 50 percent of the time. 11 low beta stocks still outperformed the market despite massive sell off trends witnessed on the nation’s bourse.

Amongst such companies are Okomu Oil, Stanbic IBTC, NASCON, Unilever, Ecobank, and Seplat which had positive year to date returns of 22 percent,11percent,7percent,4percent, 3 percent and 3 percent respectively.

OkomuOilstoodasthebiggestgainerin the market amongst companies listed on the NSE30 index of the market.

“Strong earnings reported by Okomu oil this year have been fantastic and this is the reason for the gains made in the market since the beginning of the year. Also some institutional investors have strong demand and interest for the stocks currently” BusinessDay analysis also revealed that of the nine high beta stocks with beta greater than one on NSE 30, only First Bank of Nigeria Holdings (FBNH) outperformed the market with return of 6.7 percent and a beta value of 1.34.

(k) that makes an exception in cases “k) relating to the temporary taking of possession of property for the purpose of any examination, investigation or enquiry”.

EO6 states that it aims to protect the properties while cases are still on.

EO6 eerily sounds like the infamous State Security (Detention of Persons) Decree 2 of 1994. Decree 2 of 1984 prepared the ground for repression by cancelling all fundamental rights of citizens granted by the 1979 Constitution. It was promulgated on February 9, 1984, but took retroactive effect from December 31, 1983. It allowed the military to detain, indefinitely and without trial, any person suspected to be involved in “acts prejudicial to state security or (who) has contributed to economic adversity”.

On January 20, 1994, Buhari’s government detained 600 politicians, held 300 for questioning while keeping 71 others, including former Vice President Alex Ekwueme, at Kirikiri Maximum Prison. The then government justified the action with Decree 2, which was not yet ready at the time.

Executive Orders are an American tradition. President Donald Trump has drawn attention to them through Executive Orders that excited negative attention. Trump deployed Executive Orders to stop Obamacare but the courts ordered ultravires his use of the same orders to stop citizens from certain countries entering into the

United States of America.

American history shows the use of Executive Orders by presidents since George Washington. An Executive Order is a presidential directive that has the same effect as federal law.

Often, the Courts had to intervene over Executive Orders. Also, the American Congress would take a close look at Executive Orders and override some.

The literature shows that President Harry Truman mandated equal treatment of all members of the armed forces through executive orders. However, the Supreme Court in 1952 invalidated one of Truman’s executive orders. The Court also defined the limits of such orders.

“The Court ruled in Youngstown Sheet and Tube Co. v. Sawyer that an executive order putting steel mills during the Korean War under federal control during a strike was invalid.

“The President’s power to see that the laws are faithfully executed refutes the idea that he is to be a lawmaker,” Justice Hugo Black said in his majority opinion”,according to Constitution Centre.

“President Truman issued a robust 896 executive orders over almost eight years in office. President Barack Obama issued 277 orders during his presidency. His predecessor, President George W. Bush, issued 291 orders over eight years, while President Bill Clinton had 364 executive orders during his two terms in office.

David Ibidapo & Emeka Ucheaga

I

Politics & Policy Tuesday 16 October 2018

C002D5556

BUSINESS DAY

35

Executive Order 6: Plaintiffs appeal judgment FELIX OMOHOMHION, Abuja

T

he National Chairmen of the Action People’s Party (APP), Ikenga Imo Ugochinyere and the Action Alliance, Kenneth Udeze, who are plaintiffs in the suit challenging the legality of the Executive Order No. 6 of 2018, dismissed last week by a Federal High Court in Abuja, have gone on appeal.

The Executive Order 6 (EO6), signed into law recently by President Muhammadu Buhari for the preservation of assets connected with corruption and other related offences from being disposed, is meant to prevent politicallyexposed persons, who are linked to corruption from perverting the course of justice.

The plaintiffs, who are both lawyers, are praying the appellate court to set aside the judgment of Justice Ijeoma Ojukwu delivered on October 11, 2018.

Justice Ojukwu, who dismissed the suit, held in her judgment that it was within the powers of the President, as granted by the Constitution, to issue Executive Orders for the execution of executive policies, as long as such orders do not offend the doctrine of separation

Abubakar Malami

of powers.

The trial judge, who held that the Order which empowers the Attorney-General of the Federation (AGF) and Minister of Justice to take steps, in liaisoning with relevant investigative agencies, to temporarily seize property linked with corruption pending investigation and conclusion of trial to prevent the dissipation of such assets, however noted that the power must be exercised in accordance with

the provisions of the Constitution.

The judge held that the AGF must, at all times, obtain a court order before seizing any asset and added that, such application for the court’s permission to seize any suspected asset could be made exparte and held that the Order did not violate the rights of citizens to own property, but was informed by the President’s willingness to preserve suspected property from being dissipated.

NUJ threatens to boycott coverage of political parties in Kwara SIKIRAT SHEHU, Ilorin

T

he Nigerian Union of Journalists (NUJ), Kwara State Council, has threatened to withdraw coverage of political parties in the state if assault on its members by supporters of political parties and suspected thugs continue unabated.

The union, which condemned in strong terms what it described as “unwarranted” assaults on some journalists in the state in the last two weeks, stated that it would no longer tolerate such uncivilised act by any group of persons, organisation, or institutions.

The affected journalists included Correspondents of Daily Trust Newspaper, Channels Television, TVC News, African Independent Television (AIT), Core TV and their

cameramen in the state.

While the crew of the affected Television stations was attacked at the venue of the just concluded APC Governorship Primaries at Oko-Erin ward located at Ilorin Grammar School (IGS), Ilorin, Daily Trust Correspondent was reportedly assaulted at a rally organised by the supporters of one of the governorship aspirants.

The NUJ while reacting to the development in a statement in Ilorin by its state Chairman, Umar Abdulwahab and Secretary, Deacon Tayo Ayanda said, the reports received at its Secretariat indicated that about eight journalists have suffered physical and emotional assaults in the hands of party supporters and suspected political thugs while carrying out their constitutional duties in the state.

It condemned any form of as-

sault on its members and called on all political parties to caution their members.

The statement reads in “We want to state clearly that the leadership of the union vehemently frown at the situation whereby political thugs or their supporters would assault , brutaliz and molest our colleagues who are carrying out their constitutional duties.

“The action of the APC supporters is unacceptable for whatever reason, as the era of intimidation and harassment of journalists are over. The NUJ will no longer stand and fold its hands and watch its members being harassed by political thugs.

“We therefore, call on APC leadership to call their members to order to forestall a re-currence of the act or else we shall have no option than to direct our members to stop all coverages of the party events”.

2019: PDP will reclaim Osun central seat from APC - OlaOluwa BOLADALE BAMIGBOLA, Osogbo

C

andidate of the People’s Democratic Party (PDP) for Osun Central Senatorial District in the forthcoming 2019 general election, Ayobami Ganiyu OlaOluwa has expressed confidence in his party reclaiming the seat it lost to the ruling party almost eight years ago.

The former Olorunda Local Government chairman said regardless of who the All Progressives Congress (APC) fields against PDP, the ruling party will still lose the poll

slated for next year February.

Olaoluwa, in an interview with newsmen in Osogbo, said his confidence is based on his performance while in office as chairman.

He said several years after exiting office many people still refer to his many life-changing initiatives, which he said could not be matched by those that came after him in office.

He restated readiness to change the face of governance by providing responsible representation for the people of the Central Senatorial District in the Senate, if elected.

OlaOluwa said: “No candidate can be a threat to me. This is not my first time of contesting. I once contested the post of local government chairman and I won. I contested for the post of PDP chairman in this state, and by the grace of God, I also won.

“Going into this poll is not a big deal. I will win.

I am the candidate to beat. My people love me, they have tested me in some capacities before and I did not let them down. My legacies are all over Olorunda local government.”

But, the plaintiffs in a motion of injunction pending appeal, want an order of the court restraining the President and AGF or any of their agents from enforcing, executing or any other manner whatsoever giving effect to the Presidential Executive Order No 6, pending the determination of their appeal filed on Monday at the Abuja Division of the Court of Appeal against the judgment of the trial court.

The plaintiffs, in the appeal, which was hinged on four grounds said the decision of the trial court was a clear violation and encroachment upon the rights of the citizen and the constitution and that citizens are entitled to be accorded fair hearing before they can be made to suffer any legal disability as a result of any allegation or charge.

They held in their notice of appeal that Justice Ojukwu misinterpreted Section 5 of the 1999 constitution upon which the President derived the power to make Executive Order No. 6 of 2018 which is only for the execution and maintenance of the constitution and all laws made by the National Assembly and not to turn the executive into a law making organ.

According to the notice of appeal, the trial judge erred in law and thereby occasioned a miscar-

riage of justice when she found that the Executive Order No. 6 of 2018 did not violate the rights of citizens to own property.

The plaintiffs also contended that judge erred in law also when she unilaterally varied and modified the express terms of Executive Order No. 6 by issuing judicial caution, that the powers of the AGF must be exercised in accordance with the provisions of the constitution, instead of nullifying the Executive Order.

They argued that the lower court does not have the powers to issue advisory opinion on what the law ought to be as in the present circumstances and added that the Executive Order 6 violates the doctrine of separation of powers and all tenets of the constitutional democracy.

The appellants noted that the trial judge shut her eyes against the materials placed before the court and deliberately failed and/ or refused to make specific findings of fact on the issue they submitted before the court, in view of the fact that, “none of the persons listed at the First Schedule of the said Presidential Executive Order No. 6 of 2018 have been found guilty as charged, as their respective trials are still ongoing in various courts in Nigeria”.

Critics of social investment programme are enemies of the people - BMO

T

he Buhari Media Organisation (BMO) has described the virement of funds from the Social Investment Programmes (SIP) budget by the National Assembly to fund the INEC 2019 Elections Budget as an anti-masses and a vengeful move by the Bukola Saraki-led Senate.

The group in a statement signed by its Chairman Niyi Akinsiju and Secretary Cassidy Madueke stated that National Assembly’s virement of funds from the Social Investment Budget reflected an anti-people posturing which is ironical with the role they are supposed to play as representatives of the people.

“The Social Investment funds are meant for improving the wellbeing, welfare and living standards of the poorest Nigerians; any Nigerian, especially one who is in position of leadership, that does not see the importance of these programmes and the need for adequate funding of them, should not be leading in the first place,” the group said.

“The very existence of those in government is to see to the betterment of the lives of the everyday Nigerian people, especially the poorest in the society. The virement of funds from the Social Investment budget is a move against Nigeria’s poor population and shows how far some members of the National

President Buhari

Assembly are from the people they are supposed to represent.”

The group noted that the Social Investment Programme introduced by the Buhari administration is the most ambitious, yet the most successful social investment scheme Nigeria has ever had. It went further to state that over 9 million children in public primary schools are being fed, with over 500,000 previously unemployed graduates now engaged on the NPower scheme and almost a million traders having accessed collateral and interest free loans.

“Over 290,000 of the poorest households in Nigeria are receiving a social welfare package of 5,000 Naira monthly, which has improved their living standards and reflected in significant improvement in the well-being of the beneficiaries.”

Tuesday 16 October 2018

FT

C002D5556

BUSINESS DAY

FINANCIAL TIMES Tesco’s former chairman describes discovery of accounting issue

A1

Future of food: inside agritech’s Silicon Valley

Page A3

Page A4

World Business Newspaper

Trump sends Pompeo to Saudi Arabia as king orders Khashoggi probe King Salman intervenes on disappearance of prominent journalist in Turkey GEORGE PARKER AND ALEX BARKER

P

resident Donald Trump has dispatched his secretary of state to meet King Salman of Saudi Arabia over the disappearance of journalist Jamal Khashoggi on the day the kingdom ordered an investigation into the case.

Mr Trump posted on Twitter on Monday that he had spoken to King Salman and was “immediately sending” secretary of state Mike Pompeo to meet him as the kingdom faces a mounting international backlash over the incident.

The internal probe into the fate of Mr Khashoggi, who disappeared after entering the Saudi consulate in Istanbul earlier this month, was ordered by King Salman, a Saudi official said.

The move came as a growing list of senior business executives pulled out of high-profile investment conference in Riyadh later this month, which is closely associated with Crown Prince Mohammed bin Salman, the king’s son.

King Salman’s conservations with Mr Trump and Turkish president Recep Tayyip Erdogan, who he spoke to at the weekend, suggest the Saudi monarchy is trying more actively to manage the diplomatic fallout from the disappearance of Mr Khashoggi.

Turkish officials have said they believe the journalist, who was a US resident living in self-exile, was killed and his body dismembered while he was inside the consulate.

On Monday, two of the world’s most high-profile financiers — Blackstone’s Stephen Schwarzman and BlackRock’s Larry Fink — joined Jamie Dimon, chief executive of JPMorgan Chase, and Ford chairman Bill Ford in pulling

Jamal Khashoggi disappeared after visiting the Saudi consulate in Istanbul in early October © AP

out of the Future Investment Initiative conference, dubbed “Davos in the Desert”.

A spokesperson for the FII insisted the event was going ahead.

“Whilst it is disappointing that some speakers and partners have pulled out, we are looking forward to welcoming thousands of speakers, moderators and guests from all over the world to Riyadh from October 23rd to 25th.”

Saudi Arabia, the world’s top oil exporter and one of its biggest buyers of arms, has repeatedly denied any involvement in the journalist’s disappearance. But the kingdom has been under increas-

ing pressure from its western allies to explain what happened.

Saudi Arabia has forged close ties with the Trump administration and is its key Arab ally. Mr Trump chose Riyadh as the destination for his first foreign trip as president, while Jared Kushner, his son-in-law, has developed a strong relationship with the crown prince.

Mr Trump on Saturday warned Riyadh that it would face “severe punishment” if the government was involved in killing Mr Khashoggi, who wrote regular columns for the Washington Post and was critical of Saudi authorities.

The UK, France and Germany issued a joint statement on Sunday saying they were treating the incident with “the utmost seriousness” and “expect the Saudi government to provide a complete and detailed response”.

Mr Khashoggi’s disappearance has increased scrutiny on the direction the crown prince is taking the country.

The heir-apparent has pledged to modernise the conservative kingdom with a range of ambitious economic reforms. But under his watch, Riyadh has also pursued a markedly more assertive foreign policy and displayed increasingly

autocratic tendencies as the authorities have cracked down on all forms of dissent, with members of the royal family, powerful businessmen, academics, clerics and activists being jailed.

While King Salman is the country’s ultimate ruler, Prince Mohammed has been viewed by many as the kingdom’s de facto leader.

During the call, King Salman and Mr Erdogan also discussed launching a joint Turkish-Saudi investigation into Mr Khashoggi’s disappearance, which the two sides had previously agreed in principle.

Sears files for bankruptcy protection as it buckles under debt

Carlyle dealmaker puts $100m of his cash into own fund

Billionaire chair unable to win backers for revival plan ahead of $134m loan repayment

JAVIER ESPINOZA AND ANJLI RAVAL

ALISTAIR GRAY ears, the department store chain that once dominated the US retail landscape, filed for bankruptcy protection on Monday as it finally succumbed to a crushing debt burden and failure over several years to adapt to upheaval in the industry.

Tens of thousands of workers are facing an uncertain future after Sears’ billionaire chairman and chief executive Eddie Lampert, who has led the group for about 14 years, was unable to persuade creditors and directors to back his latest revival plan.

The retailer, which had limped on despite racking up more than $10bn in losses since

S

the turn of the decade, made the Chapter 11 filing in a US Bankruptcy Court in New York the same day as a $134m loan was due.

“Some of the lenders have sort of said, ‘You’ve had enough second chances — this is the end of the line’,” said Hugh Ray, head of the bankruptcy practice at law firm McKool Smith.

Some lenders and investors warn that the retailer could be heading for an outright liquidation, but Mr Lampert remains hopeful the company can escape such a fate by restructuring “around a smaller store platform”.

“The Chapter 11 process will Continues on page A2

Marcel van Poecke is contributing to group’s $4bn international energy fund

The

head of private equity group Carlyle’s energy division is contributing $100m of his own money to its latest $4bn fund, as investors ratchet up pressure on top dealmakers to invest more out of their own pocket.

Marcel van Poecke, who oversees Carlyle’s international energy fund, has committed a similar amount from his personal fortune to the latest fundraising as he did in the last one, according to two people familiar with the matter.

Private equity investors expect senior managers, such as those at Carlyle, to deploy their personal wealth into deals they pursue and contributions are increasing as the size of funds swell.

“Investors want to ensure alignment of interest between themselves and the executives who manage their money,” said a veteran corporate lawyer.

Mr van Poecke is one of the most prominent energy dealmakers in the private equity industry globally. He founded and ran Swiss-based oil refiner Petroplus before selling it to Carlyle and its former New York-based partner Riverstone in 2005.

He left Petroplus in late 2007 following its listing on the Zurich stock exchange. Carlyle and Riverstone made healthy profits on the deal, but the company went bankrupt five years later.

The 58-year-old is also the chairman of AtlasInvest, a private holding company he founded over a decade ago, and chairman of Oranje-Nassau Energie, an AtlasInvest portfolio company with oil and gas assets in the North Sea and west Africa.

Married with six children, he recently purchased a $22.3m mansion in Palm Beach, Florida, therealdeal.com reported, citing property records. His non-executive roles include those at Argos-

North Sea Group, Hestya, Varo and Discover Exploration.

“The notion of ‘skin in the game’ is an important one and investors want a meaningful proportion of net wealth to be put on the line so as to ensure that executives are focused on downside risk as well as upside returns,” the corporate lawyer said.

The new fund under Mr van Poecke will invest in oil and gas assets outside North America, aiming to fill a gap left by international energy companies that are keeping a tight grip on their purse strings after a multiyear downturn.

The fund will buy companies that are active in all parts of the energy supply chain, from exploration and production, refining and marketing to oilfield services.

Mr van Poecke’s commitment to the fund comes as private equity groups are raising record amounts of cash at their fastest pace thanks to investors seeking profitable investments in a low-interest rate environment. Carlyle declined to comment.

A2

BUSINESS DAY

C002D5556

NATIONAL NEWS

FT Sears files for bankruptcy protection

EU gives UK 24-hour Brexit deadline Brussels waits to see if Theresa May can muster cabinet support for exit deal

Continued from page A1 give [Sears] Holdings the flexibility to strengthen its balance sheet, enabling the company to accelerate its strategic transformation, continue right sizing its operating model, and return to profitability,” Mr Lampert said in a statement.

Lenders have stumped up $300m in so-called debtor-inpossession funding to allow the retailer to keep operating during the bankruptcy. As part of the arrangement at least 142 stores will close and liquidation sales will begin shortly.

Mr Lampert himself, who is also Sears’ largest creditor, may contribute a further $300m in such funding through his ESL hedge fund to help the company continue to do business through the crucial festive season. This would be subject to court approval, however. Mr Lampert is stepping down as chief executive and his role will be split between three senior executives.

ESL could yet purchase some of the assets out of bankruptcy.

It is in talks about making a socalled stalking-horse bid for the purchase of a “large portion” of the company’s store base, the company said.

Sears traces its roots back to a mail order company in the 1880s and went on to become the country’s largest retailer. The brand was a byword of suburban postwar consumerism and the eponymous tower that housed its head office in Chicago was once the world’s tallest building.

But the company floundered in its efforts to compete first with lower cost rivals such as Walmart and Costco in the 1970s and 1980s, and more recently with online retailers such as Amazon.

Sears Holdings was created by a combination engineered by Mr Lampert in 2004 of Sears and Kmart, another big box department store chain.

“It was like two drunks holding each other up,” Mr Ray added. “Instead of taking care of the overwhelming debt, they simply kicked the can down the road.”

Sears, now based in suburban Chicago, is the latest casualty in an industry grappling with the rise of ecommerce, and the most high profile since the liquidation of Toys R Us last year. The outlook for the rest of the sector has looked brighter in recent months, however, as a robust US economy has encouraged consumers to spend.

Weil, Gotshal & Manges is serving as legal counsel, M-III Partners as restructuring adviser and Lazard Frères & Co as investment banker. William Transier, a restructuring expert, is joining the board.

Tuesday 16 October 2018

MEHREEN KHAN, ALEX BARKER AND GEORGE PARKER

B

Mohammed bin Salman, Saudi Arabia’s crown prince, and Donald Trump, US president © AFP

Trump’s dangerous reliance on Saudi Arabia Do not expect radical shifts in US Middle East policy despite Khashoggi scandal GIDEON RACHMAN

T

he disappearance and probable death of Jamal Khashoggi is a tragedy and a mystery. It is also a grievous blow to American policy in the Middle East.

To the extent that the Trump administration had a Middle East strategy, it centred on Saudi Arabia and the mercurial figure of Prince Mohammed bin Salman — or MbS, as he is always known. The Saudi crown prince was meant to be the man who would rally an alliance against Iran, make peace with Israel, take on the clerical establishment in his own country and help to crush Isis at home and abroad. By his own account, he would also liberalise Saudi society and transform the economy — delivering juicy deals to US companies in the process.

The centrality of Saudi Arabia to Donald Trump’s world view was underlined when the US president made his first official trip overseas to Riyadh, the Saudi capital. MbS quickly struck up a close relationship with Jared Kushner, Mr Trump’s son-in-law.

Both men are in their thirties and together they plotted to remake the geopolitics of the Middle East.

The MbS charm offensive went well beyond Mr Trump’s family.

The crown prince held court with

star-struck western journalists.

He sent chatty texts to Washington insiders. On a trip to the US, MbS rubbed shoulders with American royalty — Bill Gates, Mark Zuckerberg and Rupert Murdoch.

However, even some of the MbS fan club reserved judgment.

As one western observer of Saudi Arabia puts it: “My question was always where to place him on the spectrum between Lee Kuan Yew and Saddam Hussein.”

In other words, should MbS be seen as a visionary nation builder or an out-of-control despot?

Those who argued that the Saudi leader was, above all, dangerous had plenty of disquieting evidence to point to: a spiralling war in Yemen that has produced a humanitarian disaster; a bitter feud with neighbouring Qatar, culminating in a Saudi-led blockade; the temporary imprisonment of the prime minister of Lebanon; a shakedown of many of Saudi Arabia’s richest businessmen; and the imprisonment of journalists and human rights activists — some of whom, like Mr Khashoggi, had fled abroad.

Yet, despite all this, the conventional wisdom on MbS in western foreign ministries remained that he was basically “a good thing”

— if a little impetuous. The crown prince’s decision to allow women to drive was a masterstroke in the battle to influence world opinion.

His tacit alliance with Israel in checking Iran was also critical in keeping him in the good books of the White House. But the apparent murder of Mr Khashoggi has already transformed western attitudes to MbS. For all the sophistication with which he has manipulated opinion-formers in the US and Europe, the crown prince clearly failed to understand the potential impact of an action that was so brutal and brazen.

Unlike the Yemeni families who have fallen victim to Saudi bombs, Mr Khashoggi had a column in the Washington Post. The American media is now in full cry and Congress is threatening to impose sanctions on Saudi Arabia. Even Mr Trump has promised “severe” consequences if Saudi guilt is proved.

Nonetheless, even though the US will now have to shed its illusions about MbS, it may not ultimately shift its policies all that much. Western officials are keenly aware of the economic and strategic importance of Saudi Arabia.

The kingdom is the world’s largest exporter of oil and its largest importer of arms.

Carl Icahn renews fight against Michael Dell, opposing IPO plan Activist investor discloses 8.3 per cent stake in tracker stock to be used for offering CAMILLA HODGSON

A

ctivist investor Carl Icahn took a renewed stand against Michael Dell on Monday, announcing he would fight against a controversial plan to take the eponymous computer company Dell public again.

In an open letter, Mr Icahn said he intended to vote against the company’s intention to buy shares which track half of Dell’s stake in VMware Inc — a key step in the plan to return Dell to the stock market after five years as a private company.

Mr Icahn said he had increased his stake in the tracker stock to 8.3 per cent, and called the shares “massively” undervalued.

Dell used the tracking stock — treated as a class of the parent company’s old stock — to help finance the acquisition of the storage company EMC in 2016, when it lacked a publicly traded stock of its own to help fund the highly-leveraged deal.

Instead, Dell used the tracking stock, which now trades under the ticker DVMT, to capitalise on the majority stake in listed company VMware it

was picking up under the EMC deal.

As Dell now seeks to return to the public markets itself, it is trying to simplify its capital structure — and get rid of the tracker stock, the value of which has lagged behind that of VMware.

The complex deal involves Dell swapping its own common stock for the tracking shares. Holders of the tracking stock had previously expressed upset at the terms, arguing Dell’s offering price was insufficient and based on an inflated view of what Dell’s own common stock was worth.

On Monday, Mr Icahn said the tracker stock should be trading at around $144 per share rather than its current trading price of $94.50 per share. Because of the way the value of the stock was calculated at the time of the EMC deal, voting in favour of the proposed plan would deliver a windfall of around $11bn to Mr Dell and his private equity associates Silver Lake at the expense of shareholders, he said.

This “distortion” was a result of three things, he said: the market’s lack of trust in Mr Dell and Silver Lake, following their decision to take the company private in 2013; inves-

tor nerves about the tracker being “trapped within a capital structure that has some of the worst corporate governance in America”; and the impact of the “scare tactics” used by Dell and Silver Lake over the past year to “destroy the value of the tracker.”

The letter said investor fears were “overdone,” and that “strong activism combined with litigation, if necessary, can mitigate the governance risks.”

Mr Icahn said shareholders should not accept any deal that did not contain a “very, very substantial increase” in price. He also said he was considering offering a competing partial bid for DVMT shares, in the event that some shareholders wanted to sell but others did not.

A Dell initial public offering would “face significant challenges and trade very poorly,” he added.

In 2013, Mr Icahn strongly opposed Mr Dell’s plan to take the company private.

His tone on Monday was equally combative: “It is better to have peace than war, but be assured, I still enjoy a good fight for the right reasons, and in the current situation, I do not see peace arriving quickly!”

russels is giving Britain a day to settle its position on Brexit before deciding how to respond to Prime Minister Theresa May’s dramatic move to “disengage” from talks on an EU exit agreement.

The UK-EU negotiations broke down on Sunday — just days before a set piece summit — when the UK prime minister dispatched Dominic Raab, her Brexit secretary, to Brussels to make clear that she could not sign up to a “backstop” plan to avoid a hard border on the island of Ireland.

Following one of the biggest setbacks since the UK voted to leave the EU in 2016, Mrs May will address the House of Commons on the state of the negotiations on Monday afternoon and is due to convene a cabinet meeting on Tuesday.

Sabine Weyand, the EU’s deputy chief negotiator, told EU27 diplomats that Brussels would now wait to see if Mrs May could muster the support of her cabinet and her allies in the Democratic Unionist party for an exit deal.

“We decided to let a day pass to see what happens in London,” said a senior EU diplomat.

Responding to the deadlock, Leo Varadkar, Ireland’s prime minister, suggested that a deal on the backstop might not be agreed for weeks.

“The initial target if you like was October,” Mr Varadkar told reporters in Dublin on Monday. “That’s now slipped to November.”

He added that the consequences of a no-deal cliff-edge Brexit would be potentially catastrophic — “really bad for Ireland, relatively bad for the EU but quite a disaster for the UK, and I’m absolutely sure that the British government is motivated to make sure that we don’t end up in a no deal.”

Simon Coveney, Ireland’s deputy prime minister, also voiced the “ frustration” of many countries over what he described as Britain’s decision to in effect “disengage” from the talks before the EU’s 27 remaining member states begin a summit on Wednesday.

EU ambassadors were told that Mr Raab’s meeting with Michel Barnier, the EU’s top negotiator, went badly, throwing into doubt several elements of the deal that had been expected to take shape.

Some Eurosceptic Tory cabinet ministers have threatened to resign unless Brussels agrees to put a firm end date on the “temporary” customs union between the EU and UK which forms part of the backstop.

Sammy Wilson, Brexit spokesman for Northern Ireland’s DUP, said that a no-deal exit was “probably inevitable” because of “intransigence” from EU negotiators in Brussels.

The DUP, which props up Mrs May’s government, has threatened to bring down the prime minister unless she drops a linked proposal to keep the region in the EU’s single market during the backstop period, putting a regulatory border in the Irish Sea. Speaking at a meeting of foreign ministers in Luxembourg, Miroslav Lajcak, Slovakia’s deputy prime minister, said: “I still believe that there is enough responsibility on both sides to know that no deal would be the worst outcome for everyone. There is no reason to panic. There is still time”.

Mrs May has been invited to Brussels on Wednesday to address EU leaders before their Brexit dinner. But no further talks are scheduled ahead of the summit, raising the prospect of a complete breakdown in the Brexit process.

Tuesday 16 October 2018

C002D5556

BUSINESS DAY

FINANCIAL TIMES

A3

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Tesco’s former chairman describes discovery of accounting issue Richard Broadbent tells court of unexpected call from chief executive in September 2014 JANE CROFT

T

he former chairman of Tesco has told a court about the moment when he learnt of a report suggesting the supermarket chain had improperly recognised millions of pounds of commercial income before it was earned.

Richard Broadbent was testifying at the criminal trial of two former Tesco executives who are accused of fraud and false accounting linked to a 2014 accounting scandal in which the retailer was found to have inflated its profits by £250m.

Chris Bush, who was managing director of Tesco UK, and John Scouler, who was UK food commercial director are being prosecuted by the Serious Fraud Office for their alleged role. The two men deny the charges in the trial at Southwark Crown Court.

Sir Richard said he was at a conference in Italy on September 19 when he was called unexpectedly by chief executive Dave Lewis, who was less than three weeks into the job, about a report he had just received from an employee suggesting Tesco was improperly

booking commercial income.

He likened the phone call to a “[Houston] . . . we have a problem” moment and told the court he cut short his trip and immediately flew back to the UK, where Tesco had assembled a large team to verify the report — including bringing in Deloitte as independent accountants. “This was clearly a serious situation and the board had to be convened,” he said.

A corrected stock market statement subsequently issued by Tesco revealed a £250m hole in its accounts, causing the retailer’s share price to fall by 12 per cent and wiping £2bn off its value, the court has heard.

Sir Richard also told the court on Monday that Mr Lewis’s start date was brought forward to early September 2014, in the face of an increasingly difficult trading environment and after a profit warning in August 2014.

During cross examination by Mr Bush’s barrister Adrian Darbishire QC, Sir Richard described Chris Bush as a talented man and an excellent leader.

The trial, which is expected to last until December, continues.

Stocks to watch: Superdry, ConvaTec, Babcock, IMI, Ralph Lauren Avoid engineers exposed to a short-term slowdown, says Merrill Lynch BRYCE ELDER

S

uperdry hit its worst level since 2015 after warning that hot weather over the summer had reduced sales by £10m, and that currency hedges had failed at a further cost of £8m. The retailer also announced a £5m investment plan aimed at broadening its product range, increasing marketing and improving back-office systems.

Peel Hunt cut its earnings per share forecast for Superdry’s current year from 108.9p to 84.9p.

A valuation of 10 times currentyear earnings “underplays the strength of the group’s balance sheet and the global prospects, although investors will need to see an acceleration in performance over peak to re-instil confidence in execution”, it said.

ConvaTec hit a record low after the medical products maker cut earnings guidance because of poor sales across all three of its product lines and announced the exit of its chief executive Paul Moraviec with immediate effect.

Greencore retreated from an eight-month high after the sandwich maker agreed to sell Peacock Foods, its US division, for $1.1bn. The buyer, Hearthside Food Solutions, was itself bought earlier this year by Charlesbank Capital Partners, the private equity group that sold Peacock to Greencore for $748m in 2016.

Investors had been buying Greencore shares in recent weeks on speculation that any bid might be for the entire company rather than just a division.Defence outsourcer Babcock dropped

after the Sunday Times picked up a critical report from Boatman Capital, an anonymous and previously unknown research group. Among the report’s claims were that Babcock was using its Appledore shipyard in Devon as a “piggy bank” by extracting dividends while failing to win new business, and that the company faced a £100m hit relating to delays to the commissioning of the Devonport dry dock.

“We believe that there is nothing new in the note,” said Liberum. Investors know about the potential closure of Appledore, which may result in a £20m exceptional charge but would not incur significant additional costs given the yard generated only £14m of sales in the last financial year, it said. The broker also argued that delays to Devonport were the responsibility of the Ministry of Defence, not the contractors.

Sellside stories Merrill Lynch cut IMI and Atlas Copco to “neutral” from “buy” in a capital goods sector review.

Weakening lead indicators and concerns over China, auto markets and semiconductor demand make it sensible for investors to maintain a bias towards quality companies exposed to longer spending cycles, said Merrill.

It turned negative on Atlas based on headwinds to its semiconductor business and downgraded IMI due to the short-cycle nature of its precision engineering operations.

Spectris was raised to “buy” as part of the same research, with Metso and Wartsila both upgraded to “neutral”.

Richard Broadbent, pictured in 2014, shortly after he stepped down from his role as chairman of Tesco © AFP

EM currencies rally to 2-month high on lira gains Executives at US lender ‘hunker down’ after missing out on booming M&A market PAN KWAN YUK

E

merging market currencies rallied to a two-month high on Monday, as investors took heart from signs of a thaw in US-Turkish relations and weaker than expected US data that helped beat back expectations on interest rate rises The JPMorgan Emerging Market Currencies index rose as much as 0.6 per cent to 62.43 — the highest level since August 16.

The push higher was led by the Turkish lira, which climbed as much as 2.1 per cent to briefly reach a two-month high of 5.7520 — before trimming that gain to just 1.4 per cent. The advance comes after the US and Turkey on Friday struck an agreement for the release of US pastor Andrew Brunson, potentially paving the

way for the removal of sanctions that Washington had placed on the country.

Other notable moves include the Brazilian real, up 1.3 per cent at 3.7376 per dollar. The South African rand trimmed a gain of as much as 1.1 per cent to trade up 0.7 per cent. The rouble firmed 0.5 per cent to 65.67, having touched a session high of 65.28 earlier.

The rally was boosted by the weaker dollar, which came under pressure after US retail sales undershot expectations for a second straight month. The report, coming on the heels of soft inflation data last week, is likely to reinforce the Fed’s plans to stick with — rather than step up — the gradual pace of rate tightening it has outlined.

High US rates as well as concerns over slowing growth in China

had prompted a sell-off in EM assets this month. A fall in oil prices also appears to be helping sentiment. While higher oil prices are a boon for exporters like Colombia, it adds pressure on importers like India, Indonesia and Turkey.

Brent crude had jumped as much as 2 per cent as the market reopened on Sunday, following a threat from Saudi Arabia it would use its economic firepower if targeted by US sanctions over the disappearance of journalist Jamal Khashoggi.

But crude has reversed the move, with Brent trading 0.5 per cent lower and West Texas Intermediate down 0.4 per cent after President Donald Trump took a softer stance on Monday, saying he has dispatched his secretary of state to meet King Salman of Saudi Arabia.

Total underlines Russia commitment despite sanctions Chief Patrick Pouyanné wants group to be largest foreign oil and gas player in country HENRY FOY

F

rench oil and gas company Total has underscored its commitment to Russia despite fears over international sanctions and geopolitical pressures that have provoked a steady retreat by other foreign energy majors.

As some international energy rivals have reduced their exposure to Russia or withdrawn altogether, Total has emerged as one of the most prominent foreign players in the country’s vast but highly political hydrocarbon industry.

“Total has great ambition in this country, we want to be the largest foreign oil and gas player here,” the company’s chief executive Patrick Pouyanné said on Monday at the launch of a factory outside Moscow.

“And to do that we need a local plant,” he said. “This is a real adventure for Total in Russia.”

Total’s biggest exposure to Russia is its 19.4 per cent stake

in Novatek, the country’s second largest gas producer. Novatek is sanctioned by the US in response to Moscow’s 2014 annexation of Crimea.

The French group also owns 20 per cent of Yamal LNG, a $27bn liquefied natural gas project in the Arctic run by Novatek, and this summer said it would buy a 10 per cent stake in the company’s new Arctic LNG 2 project.

Draft bills in the US Congress calling for new sanctions against Russia in response to the country’s alleged meddling in the 2016 US election call for deeper and broader restrictions on co-operation with the country’s oil and gas producers.

“We do our best for each country in which we are investing,” Mr Pouyanné said.

“We have had a huge success in Yamal. Nobody was believing in the project, and now it is a great success.”

“It is a question of global risk management, but today

our two largest countries for investment are Russia and the US.” While US and EU sanctions were designed to cut off Russia’s lucrative oil and gas industry from western finance and technology, the restrictions do not affect large parts of the sector. At the same time, some European measures are less stringent than American curbs.

Other foreign interests include BP’s 18.5 per cent stake in Kremlin-controlled Rosneft, the country’s largest oil producer, while ExxonMobil and Shell have investments in oil and gas projects in Sakhalin.

Total’s newest investment in Russia, a $50m factory producing lubricants, was praised on Monday by President Vladimir Putin as an example of how the country was still attractive for foreign investors.

“It is good to capitalise on our reputation in the country in order to grow the business,” Mr Pouyanné said.

A4

BUSINESS DAY

FT

C002D5556

Tuesday 16 October 2018

ANALYSIS How Europe has become a powerhouse in luxury LVMH, Kering and Richemont dominate, but fears of trade war hit record valuations RACHEL SANDERSON

I

Future of food: inside agritech’s Silicon Valley Investors are flocking to a Dutch university at the centre of a food production revolution EMIKO TERAZONO

B

y altering the colour of lights in his indoor grow-room, Leo Marcelis can change the smell, taste and even the vitamin content of his tomatoes.

For more efficient growth, switch on the red light; to develop shorter plants with higher levels of antioxidants, use more blue; and for a long-stemmed plant with fewer branches, turn on the dark red.

“It’s about the balance between the different colours,” says the professor of crop production at Wageningen university in the Netherlands, as he surveys a climate-controlled room with shelves laden with tomato seedlings.

“If that slice of tomato has double the amount of vitamin C, then it might help a large portion of the world population that doesn’t get enough.”

Wageningen may not be a household name, but it is at the heart of a new revolution that is starting to have an impact on both the food industry and agricultural production. Alongside University of California, Davis, and Cornell University in the US, it is one of the world’s leading research centres for food technology.

Although Wageningen is surrounded by the flat plains that stretch across this corner of northern Europe, it enjoys the nickname “Food Valley” — a nod to the Silicon Valley-style innovation and start-up frenzy that is beginning to take shape in the sector.

Some investors believe the food business is about to face disruption of the sort that Silicon Valley has already visited on hosts of other industries.

Tony Fadell, who worked on the first generation of the iPod before starting Nest, the smart thermostat business bought by Google in 2014, compares “big food”, including both the multinational food business and the large agricultural trading groups, to the technology companies of the 1970s. Agricultural production is ripe for the kind of innovation that changed finance in the 1980s, personal and business communications in the 2000s and social life this decade, he says.

“All the big agricultural companies are like the mainframe IT companies of the 70s — waiting to be disrupted,” says the American engineer, who is now an investor in start-ups based in Paris.

The flurry of interest in agricultural and food technology is the result of several powerful trends.

Growing demand for protein, especially from the developing world, is putting pressure on food supply. At the same time, consumer tastes in the western world are shifting from mass-produced brands towards healthier and more unique products.

Into that mix comes a burst of scientific innovation, ranging from gene editing, artificial intelligence and digital technology, that is now being applied to food production and crops.

As one of the hubs of agricultural research, Wageningen now finds itself trying to adapt to a different world where start-ups and venture capital are eager to make their mark.

“Until 10 years ago, agriculture was not sexy enough to talk about it,” says Ernst van den Ende, one of Prof Marcelis’s colleagues. “When I started studying at Wageningen, my classmates, said ‘why you’re going there? It’s only for farmers’.

But that’s changed.”

Once an unfashionable backwater, agricultural technology has started to capture the imagination of investors.

Around the globe, money is rushing into new forms of agriculture and food distribution, funding projects ranging from vertical farms and agricultural robots to alternatives to meat. In the five years to 2017, annual global investment in food tech, from farm management systems to robotics and mechanisation, more than tripled to $10bn, according to AgFunder, a venture capital tracker.

New technology led to a green revolution in the 1960s, when a focus on higher-yielding strains and new fertilisers drove sharp increases in production in the developing world. Now some observers are hoping that technology can help find ways to feed a global population predicted to hit almost 10bn by 2050 at a time when climate change and environmental pollution are causing land degradation and limiting access to water.

The near-$1bn purchase by Monsanto, the seed and farm chemical company, of US-based Climate Corporation in 2013 highlighted the demand for new ways of producing food and helped catalyse interest in the sector.

“Entrepreneurs have arrived, big investors have arrived and some big exits have occurred,” says Adam Anders, founder of Anterra Capital, a food and agriculture venture fund that set up in the Netherlands in 2009.

The Netherlands is one of the nations best placed to take advantage of this surge in interest. The country has made food science one of its strategic priorities and boasts one of the world’s most efficient agricultural systems. It is the largest exporter of vegetable seeds and its farmers use a fraction of the water of their counterparts elsewhere.

This proficiency in agriculture, combined with a leading trading port at Rotterdam and the fact that Rabobank is one of the biggest lenders to the food industry, has drawn agricultural traders,

researchers and food companies to the small European nation.

“Massive changes will occur through the combination of technologies and new technological platforms, like combinations of genetics and sensors and AI to monitor the nutritional status of plants, animals and humans,” says Louise Fresco, president of Wageningen university and its research institutes.

One of the main challenges, she says, is the soaring demand for protein products, especially meat, as the populations of developing nations become wealthier. The total amount of meat consumed globally is expected to increase by 76 per cent by 2050, according to a UN Food and Agricultural Organization review.

Shifting tastes away from the heavy emphasis on meat and dairy is key, she says, adding: “We obviously need a mix [of different forms of proteins].” This would include plants, fish and insect-based products. “I’m not saying everybody should be vegetarian, but we need a balance,” she adds.

In one lab, Atze Jan van der Goot, the university’s professor of sustainable protein technology, holds up what looks like a large slab of salt beef. His team was researching how to make long threads of protein from dairy products when it stumbled on a process to make soy protein into meat-like fibres.

“We believe this technology allows the formation of larger pieces of meat,” Mr van der Goot says, adding that a tender yet flavourful product with the mouthfeel of meat should be ready to come on to the market “a couple of years from now”.

His team has paired with a group of eight companies for the €6m project, from the Netherlands-based poultry processing machine manufacturer Meyn, which is backed by Warren Buffett, to Givaudan, the Swiss flavour and fragrance specialist, and consumer goods giant Unilever.

In another lab, Rick van de Zedde is working on a robot arm, equipped with an array of sensors to tell when a pepper is ripe and should be picked. “We are looking to see whether we can measure, non-destructively, the quality of fruit and vegetables without squeezing them,” he says.

Robotics is one area of technology that is expected to ease the labour shortage some parts of the agricultural sector is facing. Given that fruits and vegetables are not of uniform shape and ripeness, the technological challenges are extensive. On top of the mechanical dexterity and spatial cognition that the machines need to demonstrate, researchers hope that AI can help them learn to pick only the ripe fruit and vegetables.

n the shadow of Italy’s Dolomites mountains sits the Thelios luxury eyewear factory owned by LVMH. The world’s largest luxury goods group by sales opened the gleaming white and steel building less than a year ago. But projected demand for luxury eyewear, such as €400 Céline cats eye sunglasses, means chief executive Giovanni Zoppas says he is already looking at plans to double the factory in size.

“We are expecting 4 to 5 per cent growth in the industry for the foreseeable future,” Mr Zoppas told the Financial Times on a recent tour. He sees “massive consolidation” reshaping the fashion eyewear industry, shrinking 150 individual brands today to less than 20. LVMH, with its Louis Vuitton, Dior and Céline brands, plans to emerge a winner from this market shift.

The outlook for LVMH’s eyewear business is symbolic of a wider transformation of the global luxury goods industry and one where Europe has emerged the unrivalled leader.

The recent growth of Europe’s luxury industry is in stark contrast to

Globalisation of demand and technological disruption, such as online shopping and social media’s role as a driver of voracious consumer appetite for ever faster trends, has meant that gains from Europe’s luxury resurgence are not being shared equally.

Just as with the segment of the luxury eyewear, these forces are helping the winners, who have the capital to extend their footprint in stores and online, to take market share from smaller brands, which are struggling to adapt their business models, said Mr Fujimori.

The looming prospect of US-China trade wars and fears of a related Chinese slowdown in spending are expected to accelerate this trend.

Brokers at Morgan Stanley downgraded the luxury goods sector to “underweight” last week as luxury stocks sold off amid growing US-China trade war fears. “A material slowdown in China presents the biggest risk to the sector,” Morgan Stanley said in its note, highlighting “stretched” valuations in the luxury industry.

“When the environment becomes less favourable, luxury consumers become more selective in their purchases and the strongest brands with

A model in Paris wears a dress by Louis Vuitton, one of the big fashion houses enjoying a post-crisis resurgence

a decade ago when the ravages of the financial crisis crashed share prices and valuations amid doomsday predictions that most consumers would balk at shelling out for a €2,000 Louis Vuitton handbag, let alone a €700 pair of Gucci sneakers.

The global luxury industry has tripled in size since 1996, according to consultants Bain & Co. Bain forecasts the industry will be worth €280bn in 2018, rising to a total value of €390bn by 2025.

This has been fuelled most recently

by Chinese shoppers, especially Chinese millennials.

Indeed, millennials have been the growth engine for luxury in the past two years and now account for 40 to 60 per cent of global sales for big brands, Louis Vuitton, Gucci and Cartier, said Rogerio Fujimori of RBC, the Canadian bank. Their weight was even higher for luxury sales in China, he added.

US tax cuts have helped too by boosting the spending power of wealthy Americans.

A swoop by US fashion group Michael Kors on Italian brand Versace for $2.1bn last month underlines the animal spirits at play — and the desire of US players to get in on the European luxury party.

The valuation, equivalent to 22 times forward earnings, was significantly higher than the nine times paid by Tapestry, a US group formerly known as Coach, for US fashion brand Kate Spade last year.

But beneath the top line there is a more turbulent shift taking place, which underlines the vulnerability of Europe’s luxury boom.

more exclusive distribution tend to outperform,” said Mr Fujimoriat RBC. One result of the recent boom in European luxury is that the biggest groups — LVMH, Kering and Richemont — are operating as true cross-border groups, where country boundaries are increasingly irrelevant.

LVMH and Kering have headquarters in Paris and Richemont in Switzerland, but most manufacturing is Europe wide, while stores are global.

They have also traditionally drawn on European creative talent.

The flip side of this trend is an increase in consolidation, not seen for almost a decade since the Bulgari family sold out to LVMH, as independent brands scramble for refuge in bigger groups at a time when valuations are at record highs.

Along with Versace, family-owned Missoni sold a minority stake to an Italian private equity firm in July and designer Dries Van Noten sold a majority of his shares to Spanish group Puig. All three sellers had always previously insisted they would never sell.

Florentine shoemaker Salvatore Ferragamo, leather goods company Tod’s, which also owns Roger Vivier and Hogan, and potentially also Prada, are seen by bankers as the next targets.

Ferruccio Ferragamo, chairman of Ferragamo and scion of the dynasty, had admitted he had received approaches from private equity and big “French groups” but reiterated that he would not sell. Diego Della Valle, owner of Tod’s, and Patrizio Bertelli, co-owner of Prada, have also ruled out sales.

BUSINESS DAY

C002D5556

NEWS YOU CAN TRUST I TUESDAY 16 OCTOBER 2018

INSIGHT/INNOVATION

Let’s have an “Atikulated� plan

OGHO OKITI Dr.  Okiti  is  the  president,  Time  Economics  Ltd @  Dr_Okiti   081.7153.0058

F

ollowing the emergence of Atiku Abubakar at the keenly contested presidential primaries of the People’s Democratic Party (PDP) two weeks ago, he has moved quickly to start building a coalition that has former President Olusegun Obasanjo. Very quickly after that, he picked the former governor of Anambra State Peter Obi as his running mate for the February 2019 elections.

While all these are good for the optics, it does not diminish our stark reality, which is, whoever wins the next general election will have serious economic and political crisis to deal with. Indeed, I recently wrote that four issues would dominate the campaign, because they represent, in broad terms, the challenges facing the country. As suspected, the number one challenge is the continuing economic fragility in the country.

Since the last election, the highest quarterly growth rate recorded was 2.84% in the third quar-

PROPHYLAXIS

AYULI JEMIDE Ayuli  Jemide  is  Founder  and  Lead  Partner  of  Detail  Commercial  Solicitors.  An  entrepre-­ neur,  public  speaker,  author  and  adjunct  faculty,  Lagos  Business  School.  Email:  AJ@ayulijemide.org  Twitter:  @JemideAyuli

I

n emerging economies, Small and Medium Enterprises (SMEâ&#x20AC;&#x2122;s) contribute up to 60% of total employment and up to 40% of national income (GDP) and these numbers are significantly higher when informal SMEs are included in the data. In Nigeria, as at 2017, 37 Million SMEâ&#x20AC;&#x2122;s existed and accounted for about 48% of Nigeriaâ&#x20AC;&#x2122;s GDP. A recent survey revealed that Nigeria has 37 million small businesses employing 58 million persons â&#x20AC;&#x201C; an average of <2 people per SME. This data is corroborated by a World Bank survey in 2015 which revealed that in Nigeria 99.6 percent of firms have fewer than 10 workers.

This survey also makes a contrast with the United States, where the modal size for a manufacturing firm is 45 workers. The key thing about all this data is that SMEâ&#x20AC;&#x2122;s are major employers of labour and the right target if we desired a short cut to create employment multipliers. It is therefore a no-brainer that one of the fastest ways to reduce unemployment in Nigeria is to grow

ter of 2015, and the country endured a painful 5-quarter economic recession, followed by a tepid recovery. Following this, the incoming government has a very serious and potentially distabilising twin problems of unemployment and poverty. Indeed, a recent Brookings report, authored by Homi Kharas, Kristofer Hamel, and Martin Hofer, all associates of the World Data Lab, found that Nigeria has overtaken India to become the country with the largest population of people living in extreme poverty. We therefore need an economic plan to reduce poverty in the long term, and not based on trader moni.

The incoming president will also have to fight corruption. The background here is that President Muhammadu Buhari won his 2015 elections largely on the back of his perceived integrity and his ability to deal with corruption. He has followed up this perception by aggressively pursuing those the government thinks are corrupt, especially those in opposition. And in the last two weeks, they have ramped up the rhetoric on corruption given the perception Nigerians have about the PDP presidential candidate on corruption. There is also a list of 50 names that are not allowed to travel on account of corruption cases, but without the name of the Atiku Abubakar.

I reckon though that the approach towards dealing with corruption should be beyond the executive orders and noises on corruption made by this administration. I hope we can have a plan that deal with corruption through the reform of the oil and gas industry in relation to licencing, joint ventures, production and downstream activities, the reform of the Land Use Act, have a process of full disclosure and public registration of properties in the country, end the high level of informality of the bureau de change to deal with the storage of corruption proceeds, and provide right policies and environment in the

I reckon though that the approach towards dealing with corruption should be beyond the executive orders and noises on corruption made by this administration. I hope we can have a plan that deal with corruption through the reform of the oil and gas industry in relation to licencing, joint ventures, production and downstream activities, the reform of the Land Use Actâ&#x20AC;Ś banking system that ensures heavy fines for the promotion of corruption. That is how you deal with corruption and this government has not made any attempt at reforms to deal with these.

Third, there is no doubt that the country needs progress on economic and political reforms. As it is, Nigeriaâ&#x20AC;&#x2122;s political and economic spaces are too tight. So, although there is no clear nationwide definition or agreement on the nature and description of the structural changes required, the common theme is devolution of powers from Abuja to the states within the federation. I will argue that the basis should be on providing the states with powers to create economic incentives within the states, be competitive, and have differences in approach that is based on local peculiarities.The debate and attention on this issue requires elevation following recent escalation of insecurity, and poor economic conditions that is exacerbating poverty.

Finally, we need a security plan. President Buhari, as a former army general, won over the electorates in 2015 also because they thought he

was better placed to solve the many security challenges facing the country. However, while Boko Haram has been slightly weakened in the past three years, a bloodier conflict has erupted in the Middle Belt in the form of violent attacks on many communities, largely by herdsmen. Nigeria does need a comprehensive plan on internal security.

In addition to these critical issues, it is important to remind whoever is going to be President that some key problems on the economy are brewing and will have greater implications after the elections. After the elections in 2019, three issues will become urgent. The rising national debt will have severe implications for fiscal policy and expenditure after the general elections in 2019.

The next government will also have to deal with the issue of fuel subsidies. Since the rise in the price of crude oil last year, the Nigerian government has started to pay subsidies on petroleum products in order to maintain the fuel pump price at N145. The decision to raise the price of fuel, liberalise the downstream sector, or be transparent about the level of subsidies will emerge after the elections. Third, and in the power sector, the government has stalled on the multi-year tariff order (MYTO) that seeks to ensure a cost reflective electricity pricing. This is imposing serious economic strain on the power sector chain.

In conclusion, I will argue that we have seen all that President Muhammadu Buhari has to offer. It is clear that President Buhari will not continue in office next year by carrying out structural reforms, nor institute state police. He will also not reform the Nigerian National Petroleum Company (NNPC), nor liberalise the oil sector, remove subsidy or allow very flexible pricing in the power sector. We also know that he will continue to be ambivalent about herdsmen and farmers clashes in the Middle Belt. To deal with all these issues and more, we therefore need, very urgently, an Atikulated plan.

Of SMEâ&#x20AC;&#x2122;s, employment and jobs SMEâ&#x20AC;&#x2122;s. It would also, in my view, be much faster to grow employment by focusing on supporting established entrepreneurs (people who have done business successfully for a minimum number of years and generated a minimum amount of income) to avoid the entrepreneurial risks that come with startups.

Let us imagine that we can support 1000 existing SMEâ&#x20AC;&#x2122;s to employ just 10 more people, we would have created 10,000 jobs.

The question is how can we support SMEâ&#x20AC;&#x2122;s to enable them employ more people? I am certain for most people the answer to this question would be to provide them access to capital via loans or grants. I think however that given the previous failed attempts to finance small scale industries and the sad story of many intervention funds in Nigeria we may need to take a different approach. In 1999, the Central Bank came up with the SMIES scheme requiring all banks in Nigeria to set aside 10 percent of their Profit After Tax for equity investment and promotion of small and medium enterprises.This was not very successful. So, let us take our minds away from financing and think more about creating an enabling environment for SMEâ&#x20AC;&#x2122;s.What kind of support am I talking about?

Some people donâ&#x20AC;&#x2122;t have a job because they simply do not have readily employable skills or they have skills in areas that are nonspecialist or saturated. We need to realign some intelligent people to acquire skills in areas where the demand is in excess

My first thought is in relation to Route to Market. Many SMEâ&#x20AC;&#x2122;s have great products that are sold to a limited number of customers because they do not seem to know how to advertise or create public platforms for people to know what they sell. Or even if they do, they donâ&#x20AC;&#x2122;t have the capital to do so. We can only patronize a business we know about. If government would create virtual and physical platforms for SMEâ&#x20AC;&#x2122;s to advertise their products (locally and internationally) we could increase their market share within the domestic and export market - increased customers means increased production and employment.

A series of small government sponsored trade fairs or free virtual platforms where SMEâ&#x20AC;&#x2122;s can advertise their products and services is surely something government can afford. When was the last time we heard of a government sponsored trade fair targeted at SMEâ&#x20AC;&#x2122;s?

The second idea is for government to create more clustered industrial/commercial estates for SMEâ&#x20AC;&#x2122;S to carry on their businesses in a place where they can enjoy shared services and the economies of scale. If SMEâ&#x20AC;&#x2122;sare in an environment where they contribute a few Naira monthly or daily or weekly to enjoy several hours of shared power, shared internet facilities and more, it surely saves on the capital expenditure required to provide standalone infrastructure. In Nigeria, when we think of industrial parks we usually think about the huge factories who employ 1000 people as suitable offtakers. That paradigm should change.

The third possible way is to grow more SMEâ&#x20AC;&#x2122;s in sectors that are not capital intensive but create exportable skills. India has mastered this strategy in IT, telephone call centers and several other areas. Indiaâ&#x20AC;&#x2122;s outsourcing industry is worth over $150 billion and in 2015, $98.1 billion was generated from outsourcing exports. Our IT professionals in Nigeria can hold their

own anywhere in the world and we are articulate enough to man call centers for any company. Creating high-quality, lowcost technology skills has proven to be an engine of wealth and job creation in many countries.

The fourth thing government should do is to create more learning and development hubs, particularly in the IT space. The truth is that there are many jobs available in many sectors for which there are only few people with the skills sets and many Nigerian companies are still outsourcing to India and other places. Some people donâ&#x20AC;&#x2122;t have a job because they simply do not have readily employable skills or they have skills in areas that are non-specialist or saturated. We need to realign some intelligent people to acquire skills in areas where the demand is in excess. For example, if you have ever sought to employ an App Developer or an IT manager you will know that the good ones are few and far between. It is important to note that IT is the future of modern economies. To buttress this point, take a company called VFS Global (you will know them if you apply for visas).VFS Global was established in India in 2001, when it set up three Visa Application Centres for its first client â&#x20AC;&#x201C; the United States of America. This SME today has 2722 Application Centres, operates in 139 countries, serves 60 governments, has processed over 180 million applications, has 1450 websites in 54 languages. They now simply refer to themselves as â&#x20AC;&#x2DC;â&#x20AC;&#x2122;the worldâ&#x20AC;&#x2122;s leading outsourcing and technology services specialist for governments and diplomatic missions worldwideâ&#x20AC;&#x2122;â&#x20AC;&#x2122; and have 8789 employees worldwide including 140 Nigerians.

Is the exponential growth of VFS more about grit and hard work or about their strategic outsourcing services being in high demand? Or both?Did VFS benefit from an enabling environment for outsourcing in India?

Published  by  BusinessDAY  Media  Ltd.,  The  Brook,  6  Point  Road,  GRA,  Apapa,  Lagos.   Ghana OIĂ&#x20AC;FH Business  Day  Ghana  Ltd;Íž  ABC  Junction,  near  Guinness  Ghana  Limited,  Achimota  â&#x20AC;&#x201C;  Accra,  Ghana.  Tel:  +233243226596:  email:  PDLO#EXVLQHVVGD\RQOLQH FRP   Advert  Hotline:  08034743892.  Subscriptions   01-­2950687,  07045792677.  Newsroom:  08169609331 (GLWRU $QWKRQ\ 2VDH %URZQ.   All  correspondence  to  BusinessDAY  Media  Ltd.,  Box  1002,  Festac  Lagos.  ,661