BusinessDay 20 Aug 2019

How Nigeria got into $9bn mess – PDP … Emefiele says FG will apply for stay of execution

LOLADE AKINMURELE, DIPO OLADEHINDE, Lagos, & TONY AILEMEN, Abuja

S

pokesperson of for mer President Goodluck Jonathan of the People’s Democratic Party (PDP), Reno Omokri,

has laid the blame of Nigeria’s $9bn legal dispute with Irish gas company, Process and Industrial Development Ltd (P&ID), at the

feet of a cabal he claims is working with President Muhammadu Buhari’s administration, while exonerating his former boss.

Dayo Apata, Solicitor General of the Federation and permanent secretary, Federal Ministry of Justice, had on Friday said the

court ruling which was as a result of the Federal Government’s inactions over a gas deal with P&ID was inherited from the previous administration by the Continues on page 38

businessday market monitor

Biggest Loser

Biggest Gainer MTNN N138.70 2.74pc

NESTLE N1113.9 27,115.89

-2.55pc

Foreign Reserve - $44.38bn Cross Rates - GBP-$:1.21 YUANY-N 51.59 Commodities Cocoa

US$2,191.00

Gold

$1,505.20

L-R: Abba Kyari, chief of staff; Boss Mustapha, secretary to the government of the federation; Adams Oshiomhole, national chairman, All Progressives Congress, and others welcoming President Muhammadu Buhari and Vice President Yemi Osinbajo to the Presidential Retreat for ministersdesignate, permanent secretaries and top government functionaries at the State House Conference Centre in Abuja, yesterday. NAN

₦3,784,248.60 +2.98pc

Foreign Exchange

Buy

Sell

$-N 357.00 360.00 £-N 438.00 450.00 €-N 392.00 404.00

Crude Oil

$ 59.83

news you can trust I **TUESDAY 20 AUGUST 2019 I vol. 19, no 375 I N300

FMDQ Close

Everdon Bureau De Change

Bitcoin

NSE

Market I&E FX Window CBN Official Rate Currency Futures

($/N)

g

Spot ($/N)

3M

363.32 306.95

2.97 15.02

NGUS OCT 30 2019 362.03

6M

5Y

0.24

0.00

15.03

14.48

NGUS JAN 29 2020 362.48

@

g

www.

fgn bonds

Treasury bills

10 Y 0.00

20 Y 0.00

14.24

14.46

NGUS AUG 26 2020 363.53

g

Cargo congestion worsens at Apapa on stranded empty containers BUNMI BAILEY & OLUFIKAYO OWOEYE

I

feanyi Sunday is a truck driver on the ever-busy Apapa ports road in Lagos. On a normal day, it takes Sunday between three and four hours after loading his container for onward movement from the ports. Sadly, it now takes an average of two days to get goods out of the ports.

“And if you paid N75,000 to transport your goods before this

FG asks for the impossible in tax revenue targets

Continues on page 38

Inside

See story Zenith Bank shares rise at on p.2 NSE following proposed 30kobo interim dividend P. 2

TONY AILEMEN, Abuja

The Federal Government is making moves to stop execution

2

Tuesday 20 August 2019

BUSINESS DAY

news FACT CHECK Contrary to Buhari’s claim, Nigeria is food insecure!

OLUWASEGUN OLAKOYENIKAN

P

resident Muhammadu Buhari on Tuesday, August 13, 2019, said his administration has achieved food security as he directed the Central Bank of Nigeria (CBN) to stop providing foreign exchange (forex) for importation of food into the country.

A statement issued by Garba Shehu, senior special adviser to the president on media and publicity, quoted President Buhari to have said this in Daura, Katsina State, as he hosted the All Progressives Congress (APC) governors to an Eid-el-Kabir lunch.

“Don’t give a cent to anybody to import food into the country,” the statement quoted the President Buhari as saying. “We have achieved food security, and for physical security, we are not doing badly.”

The presidential spokesperson also tweeted the statement in a series of tweets via his official Twitter handle. A copy of the statement was also shared on Facebook.

President Buhari was sworn into office for his first term on May 29, 2015, after he defeated former President Goodluck Jonathan in the 2015 presidential election.

This marked the beginning of

his administration as a democratically elected president of Nigeria.

Verifying the claim Food security is a concept that has varying definitions.

According to the internationally accepted definition established in 1996 by the Food and Agriculture Organization (FAO) Committee on World Food Security (CFS), food security exists when all people, at all times, have physical and economic access to sufficient, safe and nutritious food to meet their dietary needs and food preferences for an active and healthy life.

To the United States Department of Agriculture (USDA), food security means that people have access, at all times, to enough food for an active, healthy life for all household members.

No Nigerian agency has a definition for food security.

However, based on similarities in the commonly used IHEANYI NWACHUKWU, JOSHUA definitions, food security in- BASSEY, ODINAKA ANUDU, LOLADE cludes availability, access, AKINMURELE, ISAAC ANYAOGU & utilisation, and stability, ac- ENDURANCE OKAFOR cording to a policy brief by igeria’s Federal FAO. This implies a country Government would be considered to have may be realisattained food security when it ing a little too has achieved the four compolate that its nents of food security. earlier target of achieving higher non-oil revenues •Continues online at through taxes is a herculean www.businessday.ng task which is only possible if it creates an enabling environment where businesses thrive and pay more taxes.

President Muhammadu Buhari, through Abba Kyari, his chief of staff, in an August 8, 2019 letter queried Babatunde Fowler, electronic products in- the executive chairman of creased by N17 billion or Federal Inland Revenue 168 percent, from N10 billion Service (FIRS), over what recorded in H1 2018 to N27 he described as the revenue billion in H1 2019, demon- agency’s inability to meet

…economy casts doubt on possibility ...Abba Kyari’s query exposes govt ignorance of business challenges and Value Added Tax (VAT) holding Tax (WHT), VAT, …Fowler responds to query make up the second and PPT), Personal Income Tax

N

…H1 pre-tax profit rises to N111.7bn …to boost lending as ratio falls below CBN benchmark

T

he shares of Zenith Bank plc, one of Nigeria’s tier-one lenders, were on demand at the Nigerian Stock Exchange (NSE) on Monday following the bank’s proposal to pay interim dividend of 30 kobo per share for the halfyear (H1) period ended June 30, 2019. The share price went up by 40 kobo or 2.41 percent, from day open price of N16.6 to N17.

The proposed interim dividend will be paid to shareholders whose names appear in the register of members as at the close of business on August 29, 2019.

The bank’s audited financial statement for the half-year period shows its gross earnings grew by 3 percent, from N322.2 billion to N331.6 billion driven by a significant growth of 24 percent year-on-year (YoY) in non-interest income from N88.6 billion in H1 2018 to N109.7 billion in H1 2019.

In particular, fees from

Pic: Pius Okeosisi

FG asks for the impossible in tax revenue targets

Zenith Bank shares rise at NSE following proposed 30kobo interim dividend

Iheanyi Nwachukwu

L-R: Mitchell Elegbe, GMD/ founder, Interswitch Group; Cherry Eromosele, group chief marketing and communication officer, Interswitch; Ola Orekunrin-Brown, MD/founder, Flying Doctors Nigeria, and Ayokunnu Ojeniyi, project manager, enabling business environment secretariat, office of the vice-president, at the InterswitchSPAK 2.0 Masterclass in Lagos, yesterday.

strating significant progress in the bank’s retail banking initiatives.

Zenith Bank’s topline growth filtered through to the bottom-line as Profit Before Tax (PBT) increased to N111.7 billion, reflecting a 4 percent growth over N107.4 billion reported in H1 2018 with earnings per share (EPS) increasing by 9 percent to N2.83 in H1 2019 from N2.60 compared to the prior period.

The bank plans to accelerate lending in the second half after its loan-to-deposit ratio fell short of the regulator’s minimum target.

The bank’s loan book dropped 3 percent to N1.95 trillion ($5.4 billion) for the six months through June, while customer deposits increased by the same percentage to N3.8 trillion.

•Continues online at www.businessday.ng www.businessday.ng

set target revenue from 2015 to 2018.

Fowler responded to the query yesterday (Monday, August 19), linking the variance in the budgeted and actual revenue collection performance of the Service for the period 2016 to 2018 to the low inflow of oil revenues for the period, especially Petroleum Profit Tax (PPT). He said it was due to fall in price of crude oil and reduction of crude oil production; and the Nigerian economy which went into recession in the second quarter of 2016, slowing down general economic activities.

There are three main sources of tax revenue for the Federal Government.

First is Petroleum Profit Tax and Royalties, while Company Income Tax (CIT),

third.

The PPT and Royalties are derived from oil and form the major chunk of taxes. Over the past 10 years, this source has accounted for at least half of total tax collections by FIRS. Interestingly, the FIRS chairman noted that higher tax revenue collection such as CIT and VAT are a function of economic activities.

BusinessDay checks show that there is a cumulative N3.9 trillion of unmet tax revenue target for the said four-year period (2015 to 2018). When the current FIRS administration came on board in August 2015, the targets for the two major non-oil taxes were increased by 52 percent for VAT and 45 percent for CIT. Taxes collected by the government are: CIT, With-

(PIT), Stamp Duties, National Information Technology Development Levy (NITDL), Tertiary Education Tax (ET), and Capital Gains Tax (CGT).

In the quest to boost non-oil revenue, reduce budget deficit and end the country’s rising debt profile, Nigerian government increased the revenue target from tax remittance by 56.02 percent from N5.32 trillion in 2018 to N8.3 trillion in 2019, the all-time highest the country will be remitting from tax in the review period.

Businesses wobble Latest report by the National Bureau of Statistics (NBS) and the Small and Medium Enterprises Development Agency (SMEDAN) Continues on page 37

MTN is Nigeria’s largest listed company, for now …as market cap surges to N2.82trn OLUWASEGUN OLAKOYENIKAN

T

hree months after listing on the Nigerian Stock Exchange (NSE), MTN Nigeria Communications Plc has emerged Nigeria’s largest listed company on the bourse, thanks to its imminent inclusion into the Morgan Stanley Capital International (MSCI) Frontier Markets Index.

The telecommunications company’s stock sustained its bullish trend Monday at the NSE with a 2.74 percent gain to close at N138.70 per share, adding N75.3 billion to investors’ wealth and bringing the firm’s market value to N2.82 trillion ($7.72 billion).

Similarly, shares of Dangote Cement, Nigeria’s big-

gest cement producer formerly occupying the top spot, gained 0.30 percent to settle at N164.50 per share at the close of business. However, the positive performance, which brought the cement giant’s market capitalisation to

MARKETS N2.80 trillion ($7.67 billion), was not enough to keep the company at the top position.

“It’s an interesting race to watch out for,” Gbolahan Ologunro, an equity research analyst at Lagos-based investment house, CSL Stockbrokers Limited, told BusinessDay. “Unlike what we had in the past when the most capitalised stock was held by Dangote Cement, both stocks

https://www.facebook.com/businessdayng

would now rotate the title.”

With MTN’s latest share price increase, the stock stood as the most valuable company on the NSE with over N20 billion worth of value to beat its closest competitor.

MTN is Nigeria’s largest telecoms firm by market share. The firm’s share price has continued to rally in the days leading to August 27 ahead of its official inclusion on the MSCI index to join 9 of the existing Nigerian largest and most liquid companies on the index including, Dangote Cement, Guaranty Trust Bank, Nestle, Zenith Bank, Nigerian Breweries, Stanbic IBTC Holdings, Seplat, First Bank of Nigeria Holdings, @Businessdayng

and Ecobank Transnational Incorporated.

The company listed 20.35 million existing shares at N99 by introduction at the NSE on May 16, 2019, in a move that temporarily returned the market to the positive territory having booked its longest losing streak in almost a year.

Since then, MTN has gained as much as 54.11 percent in value.

MTN’s stock was the toast of investors at Monday’s trading session as more than 12.37 million units of shares valued at N1.7 billion were transacted before the sounding of the closing gong, making the telecoms company the most traded stock by value.

Besides the telco’s forthcoming inclusion into the

Continues on page 38

Tuesday 20 August 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

3

4

Tuesday 20 August 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Tuesday 20 August 2019

BUSINESS DAY

5

news

Nigeria needs 303,000 doctors to meet WHO’s standard ANTHONIA OBOKOH

N

igeria needs about 303,000 medical doctors to meet World Health Organisation’s (WHO) standard says a new survey by the Nigerian polling organisation (NOIPolls), to avert health challenges.

This implies that this puts at risk rural patients who suffer because of an urban-to-rural doctor density ratio and Nigeria’s poor doctor-population ratio of 1:6000 as compared with the WHO standards of 1:1000.

… has only 35,000 The WHO study on Medical Doctors in each country, by every 1,000 people, as published by an index-based Twitter page, Spectator’s Index reveals that Nigeria produces 0.37 Medical Doctors in every 1,000 people.

In a bid to measure the scope of the trend in emigration of the Nigerian healthcare workforce, particularly medical doctor issue that has been a lingering problem in the country, the organisation spots an analysis of the doctors’ emigration Survey

reports on the twitter handle of NOIPolls.

“Finding reveals that Nigeria needs 303,000 doctors to meet the WHO Standard of doctors to patients’ population, as at 2017 we only had 72,000 doctors registered with the medical and dental council of Nigerian, out of the 72,000, only about 35,000 are in Nigeria,” said Chike Nwangwu, CEO of NOIPolls Limited, a Nigerian public opinion polling company.

Nwangwu further said, “If the issues pointed out by the doctors were 50 percent addressed, the impact in terms of

doctors that will be willing to stay back will be a lot because most people are forced to move because they see colleagues who have moved and are doing better.

“There is an urgent need to look into the current doctor to patient population in Nigeria.

To be specific, 91% of junior level doctors, 83% of mid-level doctors and 73% of senior doctors are considering work opportunities outside Nigeria, this figures are alarming,” he said.

The survey conducted on medical doctors is to assess the prevalence with which medical

doctors pursue work opportunities abroad and probable reasons why.

It found that at least 10 in 26 doctors interviewed mentioned Low work satisfaction as the foremost reason doctors pursued work opportunities abroad and many even placed low work satisfaction above poor remuneration.

Nwangwu added that the doctors’ emigration Survey found that 88% of medical doctors interviewed said they were currently considering work opportunities abroad; and this particular finding cuts

What your credit score says about your financial health GBEMI FAMINU redit score is coming into everyday usage, thanks to the proliferation of financial technology (fintech) start-ups such as Carbon (formerly Paylater), Mamamoni and Renmoney that advance micro-credit to customers.

This has necessitated the need for quicker assessment of the credit worthiness of potential borrowers.

A poor credit score could mean paying higher interest rates on credit facilities or loans if even approved at all. While a high credit score means borrowing money at a much lower rate because you appear more financially responsible.

The knowledge that both financial and non-financial institutions are using a number to determine if people living in Nigeria can access loans, credit facilities or postpaid services or not is not common knowledge. It is until they need credit facilities like loans or post-paid products that they are made aware of its existence and how important it is, to their financial lives and access to finance for both personal and business needs.

There is still a perception that loan granting is based on ‘Man know Man,’ which for the most part, is no longer the case at least for the average Nigerian.

Credit scores are provided by credit bureaus. The CRC Credit Bureau provides this service at N400 (four hundred naira). The CRC score is a three-digit number ranging from 300-850 that summarises a borrower’s history of borrowing and paying back loans or post-paid services by allocating a 3-digit number that represents how risky it is to do business with such an individual.

“It is also a credit grading system, with 300 being the lowest grade like an ‘F’ in a report card and 850 being the highest, which would be an ‘A’ or distinction in your report card,” Tunde Popoola, managing director/CEO, CRC Credit Bureau, says, noting, “The CRC Score powered by FICO is easily accessible to everyone and can be bought via the CRC Credit Bureau website.”

C

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

across the junior, mid-level and senior level doctors in both public and private medical institutions.

“The major reasons most doctors gave for emigrating included; better facilities and work environment, higher remuneration, career progression and professional advancement, and better quality of life.

“We are at a critical point in the health sector in Nigeria where we need to consider and do something to stop the brain drain of doctors leaving the country,” he said.

6

Tuesday 20 August 2019

BUSINESS DAY

news Auldon Toys partners Polesie Europe to expand production across Africa

A

uldonToys,Nigeria’stoycompany, has signed a memorandum of understanding with Polesie, one of Europe’s biggest toy manufacturers to retail and start local assembling of high-quality toysthatmeetallinternationalsafety standardswithinNigeria.

The partnership, which was sealed with both parties, signing the dotted lines in Kobrin, Belarus, will see Polesie JV Limited introduce their toys into the Nigerian market with Auldon Toys as country agent.

Theoneofakindcollaboration will also witness the launch of an ultramodern assembly plant that willeventuallymetamorphoseinto a full production plant in Nigeria thatwillserviceotherregionalmarketswithinAfrica,amovethatboth firmssaywillbemutuallybeneficial to all, going by their pedigree and individualcommitmenttofirst-rate quality toys.

Speaking during a press conference to announce the partnership, the Commercial Director of Polesie,VladimirKivakasaid:“We arehappytobepartneringAuldon

Toys, a Nigerian wholly indigenous company that has over the years shown strong commitment to providing high quality toys to the Nigerian children. These core values of Auldon Toys fit ours and that is why everyone at Polesieare thrilled at this new venture”.

We have followed keenly, Auldon’ssteadyascendsandpopularityastheleadingToysdealerwithin the West African sub-region and decided to partner with them in order to get our quality products into a flourishing market, though dominated by cheap Chinese toys that mostly do not meet international safety standards.

CEO Auldon Toys, Paul Orajiaka,wasequallypleasedwiththe partnership as he acknowledged the strength and expertise, Polesie isknownforacrossEurope,stating that a partnership with a major European toy manufacturer as Polesie will provide quality toys, provide skill acquisition and most importantly further expand Nigeria’s manufacturing sector by the time the local manufacturing phase sets in.

Sahara Group’s Babatomiwa Adesida named among Most Influential People of African Descent Segun Adams

S

ahara Foundation’s Private Sector Engagement Specialist, Babatomiwa Adesida, has been selected as one of the 2019 Most Influential People of African Descent (MIPAD) in recognition of his contribution to humanitarian work and promotion of the Sustainability Development Goals (SDGs).

Sahara Foundation is the social responsibility vehicle of Sahara Group, a leading energy and infrastructure conglomerate with operations in over 38 countries across Africa, Asia, Europe and the Middle East.

Adesida’s recognition was announced by The Most Influential People of African Descent (MIPAD) 100, a global civil society initiative in support of the implementation for the International Decade for People of African Descent as proclaimed by the United Nations General Assembly

resolution 68/237.

“I am very flattered by this award and humbled by the opportunity Sahara Foundation has given me to serve humanity. I am extremely passionate about Social Reconstruction, particularly in developing nations and nothing gives me more joy than the success Sahara Foundation has achieved in terms of transforming the lives of over 2,000,000 beneficiaries across our locations. I dedicate this recognition to Sahara Foundation as well as all our partners and stakeholders across the globe,” Adesida stated.

MIPAD publishes a unique global 100 list that identifies outstanding individuals of African descent worldwide, pairing those based in the Diaspora with their counterparts inside Africa across four categories: Politics & Governance, Business & Entrepreneurship, Media & Culture, and Humanitarian & Religious.

Mopheth clears air on expired product video Segun Adams

L

agos-based pharmacy, Mopheth Nigeria Limited, has stated its position on a video making the rounds on social media. The three-minute video shared by a customer details a conversation between a sales agent and the customer about an expired product found on the pharmacy’s shelf.

In a statement signed by the company’s retail manager, Oluremi Oreagba, the management of Mopheth confirmed that the video was recorded at its store at Adeola Odeku in Victoria Island, Lagos. The company also expressed shock at the incident and pledged that no effort will be spared at getting to the root of the matter.

“We regret the inconve-

niences and embarrassment caused our numerous customers and stakeholders as a result of this video,” a statement from the company read.

Upon discovery of the products, Mopheth immediately launched an investigation into the incident and had removed all products received from the supplier who supplied the controversial product from its store.

“In line with our commitment to safety and quality control, we immediately launched an investigation into the incident. We also reported the matter to some of the relevant government agencies, including the National Agency for Food and Drug Administration and Control (NAFDAC), to get to the bottom of the matter, the statement said. www.businessday.ng

Inflation nears 4-year low of 11.08% in July on favourable harvest … single digit rate unattainable until reforms, analysts say ISRAEL ODUBOLA

N

igeria’s inflation slowed to 11.08 percent in July, its lowest in 42 months, buoyed by lower food prices on account of favourable harvest.

Figures released by the National Bureau of Statistics (NBS) show inflation decelerated for second straight month, nearing the Central Bank of Nigeria’s (CBN) 6-9 percent target.

But analysts say it is unlikely for the average change in prices of market basket of consumer goods and services to drop to single digit in near term.

Food inflation trended to an eight-month low of 13.39 percent in July, even as core inflation that excludes the prices of volatile agricultural produce further eased to 8.8 percent to reach its lowest level in over three years.

The inflation aligned with

experts’ projection of tangible moderation in prices of goods and services following the commencement of harvest season.

Analysts at Lagos-based advisory firm, Financial Derivatives Company, had earlier predicted a drop in inflation figure to 10.98 percent.

“The probability that headline inflation will fall below 10 percent and stay there is unlikely at this time soon,” they said in a note to clients.

Their reasons being that the economy will be impacted by higher liquidity resulting from the payment of new minimum wage to low-grade workers as well as CBN’s drive to spur lending to real sector.

The last time Nigeria recorded a single-digit inflation figure was in January 2016, when general prices grew 9.62 percent.

Analysts at the research arm of First Securities Discount House (FSDH) project inflation moder-

ating to 11.01 percent, saying an increase in inflation rate is not totally bad but a mild increase in general prices is needed to facilitate output.

They stress that a single-digit rate is no sight for the economy at the moment.

The Godwin Emefiele-led CBN has in the last five years been aggressive in boosting local agricultural output and lessening reliance on oil.

This action, experts say, is deliberate, knowing that food prices drive inflation.

President Muhammadu Buhari last week directed the apex bank to halt supply of foreign exchange for food importation, saying Nigeria was now food secured.

Tackling inflation in Nigeria requires efforts from the fiscal authorities to address structural issues in fixing infrastructure and encouraging backward integration, the effect that will make it

easier for manufacturers to access raw materials locally.

The monetary authority may also have to decide if a shift to flexible exchange regime may pull inflation down to a single digit.

Egypt’s experience in addressing structural challenges, which has seen inflation slow further to 8.7 percent in July, holds lessons for Nigeria.

Faced with acute forex shortage and sluggish economic growth in 2016, Egypt, Africa’s third biggest economy, slashed energy subsidies that had earlier pressured public finance. The country floated its currency and introduced welfare programmes as palliative measures.

The Arab nation is now reaping the long-term benefits of these bold reforms after in terms of stronger Egyptian pounds, low inflation and faster economic growth. The country is on course to remove subsidies completely

by September.

L-R: Rachei Hui, chief operating officer, Institute of Banking and Finance, Singapore; Uche Olowu, FCIB, president/chairman of council, Chartered Institute of Bankers of Nigeria; ‘Seye Awojobi, registrar/CEO, CIBN, and Geraldine Ong, senior manager, standards, accreditation and certification, Institute of Banking and Finance, Singapore, during the CIBN Stakeholders Engagement with the Institute in Singapore, recently.

Nigeria’s laggard health insurance coverage to receive boost as NNPC enters ANTHONIA OBOKOH

N

ational Health Insurance Scheme (NHIS) has granted the Nigerian National Petroleum Corporation (NNPC) accreditation to operate its Health Management Organisation (NNPC-HMO) to provide qualitative healthcare services to Nigerians.

Nigeria’s health sector gears towards the achievement of Universal Health Coverage (UHC) and continues its quest to increase the number of Nigerians covered by health insurance to increase access to care.

This implies a major boost in the NHIS coverage devoting attention to increasing enrolment, and it will help reduce out-ofpocket payments of Nigerians.

However, less than 5 percent of the population is covered by health insurance.

According to NNPC, operating a functional HMO comes as a forerunner to the enviable plan by the corporation to activate a first rate medical delivery system across the country with potential to halt the ugly trend of medical tourism by Nigerians to other jurisdictions.

“We are confident that our entry into the market will increase the national coverage statistics by at least 1 – 2 digits.

We have better knowledge of the Oil and Gas Sector that can attract active participation within this sector for the scheme,” said Musa Ribadu, managing director of the NNPC HMO, while receiving the certificate of ac-

https://www.facebook.com/businessdayng

creditation at the NHIS headquarters in Abuja.

According to Ribadu, NNPC, being a corporation known for quality performance, was ready to improve the scheme and offer real-time value to the prospective beneficiaries of its packages.

“The NNPC HMO Limited is poised to be the most preferred HMO in Nigeria and a role model that NHIS would be proud of its unique healthcare offerings adding that the initiative to invest in this venture was part of NNPC’s plans to diversify its revenue base and contribute to the corporation’s bottom line,” he said.

Muhammed Nasir Sambo, executive secretary, NHIS, in his remarks expressed confidence in the capacity of the NNPC to fully utilise the opportunity of@Businessdayng

fered by the NHIS accreditation to operate an efficient HMO that would delivered the much desired first rate services to its clientele.

Sambo commended the corporation for its track record over the year, wishing the National Oil Company well in its future undertakings.

“I am not unaware that NNPC is one of the most organised organisations in Nigeria and since they are well organised we have no doubt in our minds that NNPC will do whatever it takes to uphold the virtues and tenets of health insurance in Nigeria,’’ he said.

He also acknowledged the corporation’s long-standing culture and track record in delivery of functional Corporate Social Responsibility (CSR) initiatives.

Tuesday 20 August 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

7

8

Tuesday 20 August 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Tuesday 20 August 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

9

10

Tuesday 20 August 2019

BUSINESS DAY

COMMENT

comment is free

Send 800word comments to comment@businessday.ng

Human capital and the future of work in Africa (1) STRATEGY & POLICY

MA JOHNSON

S

ometime in this column, we acknowledged that culture plays a significant role in the development of a society. Closely linked to culture is the issue of human resources.

Frankly, the quality of a human resource is largely defined by the culture of the people in a given society. One wonders how Africans will cope with technological and economic developments in a world that is changing rapidly if drastic steps are not taken to build human capital.

In any knowledge-driven economy, knowledge is often embodied in human capital in the form of labour skills, management expertise, general experience and practical knowledge.

If one may ask: What then is the quality of Africans in general and Nigerians in particular, from a standpoint of modern society in which manufacturing industries are expected to be dominant? Without any iota of doubt, the motive force in the technological and economic development processes is human capital. One of the ways of building human capital is through education which accelerates the pace of invention and productivity.

Any business environment that does not support production and productivity through extant laws, improvement in technology, consistent

government policies, market, and socio-economic trends will stifle development. Productivity which is a measure of efficiency and a key determinant of long term development is increased if workers produce more for the same or less time, effort or resources. Increased productivity is either achieved through better ways of working or the use of more and improved technology. These are conditions that are just gaining grounds in the African continent.

For many years, most African countries have consistently produced the worst-performing economies with some experiencing negative economic growth. So while developed and newly industrialising countries are getting richer by the day, some development experts say that most African countries are getting poorer relatively and absolutely. One will not agree less with views expressed by experts after a study of the report recently released

by World Bank titled “Future of Work in Africa: Harnessing the potential of digital technologies for all.”

The report is structured around the human capital needs of a young and rapidly growing largely low-skilled labour force, the prevalence of informal workers and enterprises and the social protection policies to mitigate risks resulting from disruptions to labour markets. This writer is concerned about the substance of the report particularly what was reflected under the heading: “Investment in early childhood development- A bottleneck to building human capital.”

Paraphrasing this aspect of the report, with nearly 130 million children under the age of six Africa is already lagging in building foundational skills, which is responsible for bottlenecks in building and developing advanced

skills for the future. The report shows that the quality of education at the primary and secondary levels is abysmally low such that: “In 6 out of 10 countries in the region, nearly 40 percent of the students, by the time they reach grade 4, cannot read a single letter, 70 percent cannot read a paragraph, a staggering 90 percent cannot read a complete paragraph, and only 5 percent can solve a mathematical word problem.”

On teachers, the report has it that they teach too little at the fundamental level, and even when they do teach, they lack the instructional knowledge and skills to teach effectively.

“On average, about 6 percent of teachers possess 80 percent of the knowledge equivalent to a fourth grader and only a paltry 7 percent possess the minimum requisite knowledge for teaching, based on a survey of teachers in primary schools in seven countries in the region (representing 40 percent of the region’s population).

Only 11 percent of the teachers surveyed could interpret data in a graph, and only 15 percent could solve a difficult math story problem.”

Additionally, only 31 percent of the teachers surveyed understand Venn Diagrams, and only 35 percent can solve algebra. Although, gross enrolment in primary education is rapidly expanding, the primary education sector, largely managed by the public sector, is weakly governed and so the quality remains poor, according to the report.

The report says that 41 percent of adults in Nigeria are illiterate, 51 percent of Ethiopians and 81 percent in Niger. With a population of almost 200 million, one can say that Nigeria is graciously endowed with human resources. Most Nigerians have mis-

‘

The country’s large population to be synonymous with generous human resource endowment. It has not really dawned on us that the development of any nation depends on the quality and quality of those gifted rather than mere

construed the country’s large population to be synonymous with generous human resource endowment. It has not really dawned on us that the development of any nation depends on the quality and quality of those gifted rather than mere physique of the people.

The notion that Nigerians are hardworking needs to be interrogated against the backdrop of the nation’s human capital; as measured by health, education and quality of standard of living. Considering the health, education and quality of standard of living of our citizens, one can say without any fear of contradiction that the country’s stock of human capital has not performed satisfactorily. That is why Nigeria is ranked 157 out of 188 countries in the 2019 Human Capital Index of the World Bank.

Some subjective evidence may suffice here to support the argument that the quality of our human capital is not above acceptable threshold. Bearing in mind abysmal performance in education, health and standing of living of citizens, how is Nigeria preparing its citizens to be part of the fourth industrial revolution? (To be continued).

Please, note that in seeking other alternatives to meet local dairy production in Nigeria, the National Animal Production Research Institute (NAPRI), Zaria is the appropriate research institute, not the Raw Materials Research and Development Council (RMRDC) as erroneously stated in my last article published in this column on Tue, 13 August 2019. The error is highly regretted.

Johnson is an author and a retired naval engineer who has passion for African development and good governance

Three reasons to take a holiday — especially a short one

I

know a man who used to deal with a stressful job, working 15-18 hour days in a senior role, by slipping away to a rented house near Richmond Park in London.

There, he refused to be interrupted by messages except during office hours, spent time playing bridge well and golf badly, and he ensured that the location of the hideaway was a well-kept secret. The few colleagues who did visit were strictly banned from talking about work. Yet despite his apparently laid-back approach, this fellow got results.

To be clear, I know this person only by reputation; Dwight Eisenhower died before I was born. But this is how he responded to the burdens of being supreme allied forces commander during the second world war.

He found it essential to take time off.

We would all like to feel that our work is essential and our personal contribution irreplaceable. But, as Alex Soojung-Kim Pang, author of Rest: Why You Get More Done When You Work Less, notes, we’re unlikely to be doing quite as essential a job as Eisenhower’s. If he benefited from some down time, so might we.

But what sort of break is best? Should we be thinking of long sabbaticals, or is it enough to keep evenings and weekends free? Perhaps the ideal compromise is Bridget Jones’s dream of a “full-blown mini-break holiday weekend”?

The simple answer is all of the above.

There’s something fractal about rest: we need it daily, weekly and yearly. That said, my reading of the (slim) evidence is that if you can bear the cumulative expense and the travel time, frequent short breaks beat the occasional elongated vacation.

Reason one: holiday memories tend to depend not on how long the holiday was, but on the intensity of the experiences.

What matters is not how long you went away, but just how exciting and different the most exciting and different moments were. The first day of a visit to somewhere new will typically be more memorable than the tenth.

Reason two: a change of activity can be a spur to creativity. This need not be a long holiday; even an engaging hobby will do.

Nobel Prize-winning scientists are much more likely to have serious arts and crafts hobbies than other scientists, who are in turn more likely to have serious hobbies than the rest of us.

Still, a holiday can help. Lin-Manuel Miranda was taking his first vacation for several years, at a resort in Mexico, when he read Ron Chernow’s biography of Alexander Hamilton, and was inspired to start working on what became the musical phenomenon, Hamilton. “The moment my brain got a moment’s rest, Hamilton walked into it,” he explained.

Intriguingly, Hamilton is, among other things, a musical about the importance of taking proper holidays. www.businessday.ng

“Take a break,” sings Hamilton’s wife, Eliza to her workaholic husband. “Run away with us for the summer, let’s go upstate.” Hamilton decides he needs to keep working instead and then makes sleepdeprived errors that led to his downfall.

Eisenhower’s aim in relaxing in his hideaway seems to have been to maintain his energy and good judgment. In short, he rested so that he could be a better general when he was working.

That leads us to reason three for taking a short break: if we need rest to prevent exhaustion, a single, long vacation won’t do the trick. Jessica de Bloom of the University of Groningen has found that the recuperative effects of a vacation tend to wear off in just a few weeks. You can’t store up the benefits of a long holiday any more than you can sleep for 24 hours then stay awake and sharp for the rest of the week.

All this raises another question, though: what should we do while we’re taking a break? According to Mr Soojung-Kim Pang’s survey of the available research, the ideal break offers relaxation, control, mastery and mental detachment.

By relaxation he simply means something that requires little conscious effort — from a walk to watching television. Control means autonomy over how you spend your time. Mastery refers to immersion in a challenging and absorbing task. An active holiday of skiing, sailing or rock climbing might do the trick — but so might a weekend of

https://www.facebook.com/businessdayng

TIM HARFORD

home improvements, assuming you’re better at putting up shelves than I am.

Finally there’s mental detachment — disconnecting from the responsibilities of the office. Such disconnection is harder than ever these days but it can help, even when the break is otherwise anything but relaxing. Business trips can be exhausting yet even they have been found to reduce burnout and stress, because they provide a break from day-to-day responsibilities.

And one 1998 study — by Professors Dalia Etzion, Dov Eden and Yael Lapidot — discovered that men called up for active reserve duty in the Israeli army found that the experience provided the same relief from burnout and stress in their normal lives that a holiday would have done.

It’s not that serving in the army is relaxing but that it provides a sense of distance from the day job. Unless, of course, your day job is in the army. In that case I recommend that you emulate Ike and enjoy a game of golf or bridge.

@Businessdayng

Tuesday 20 August 2019

BUSINESS DAY

COMMENT

11

comment is free

Send 800word comments to comment@businessday.ng

Nigerian Banks – Emefiele 2.0

I

RAFIQ RAJI

n late June, Godwin Emefiele, governor of the Central Bank of Nigeria (CBN), unveiled a five-year policy roadmap to guide his second 5-year term.

Mr Emefiele desires faster economic growth, slower inflation, more non-oil sector output, greater financial inclusion, ample jobs, stronger banks and more private sector credit extension.

To these ends, he announced a raft of new regulatory measures in early July.

Nigerian banks would be required to maintain a minimum loan-todeposit ratio (LDR) of 60 percent by end-September. The LDRs would be reviewed quarterly afterwards. In the computation of the LDR, a greater weighting of 150 percent would also now be assigned to lending to small and medium-sized firms, and that for retail, mortgage and consumption purposes. Should a bank not meet these new criteria, half of the shortfall would be parked at the central bank by way of an additional cash reserve requirement.

The central bank also announced

modalities for a single-digit long-term financing initiative for the information technology, movie, and fashion sectors. To engender greater financial inclusion and meet its 80 percent target by 2020, banks are also now not required to seek prior regulatory approval to offer mobile money services.

Of much interest is the CBN’s recapitalisation drive for banks. While the new minimum capital threshold is yet to be announced, Mr Emefiele’s ambition of having Nigerian banks amongst the top 500 global banks suggests it might be high indeed. What do analysts and portfolio investors think?

I asked Malte Liewerscheidt of Teneo, a consultancy in London and Wale Okunrinboye, head of investment research at Sigma Pensions in Lagos.

Malte Liewerscheidt, Vice President at Teneo By advancing new measures, pushing banks to extend their lending activities, the CBN is filling the policy void in the prolonged absence of a new cabinet. Unfortunately, neither the new minimum loan-to-deposit ratio nor the reduced maximum amount for which banks will receive interest on their deposits with the CBN change the underlying conditions that make it unattractive for banks to lend in the first place. In fact, the CBN’s obsession with the exchange rate has led the

apex bank to sell more and more OMO securities that offer a high-yield, riskfree alternative for banks, effectively preventing them from handing out more loans to the real economy.

Wale Okunrinboye, Head of Investment Research at Sigma Pensions I found the substance of the plan a little unchanged from his inaugural statement in 2014: bold and ambitious about his desires but without the recommended dose of realism that Nigeria’s increased vulnerability to external shocks require. The plan seeks to pursue single digit inflation, high growth and increased banking sector involvement with the economy but makes little mention as to likely trajectory of the key policy anchor (the exchange rate). In line with historical trends, the exchange rate is the eternal obsession of the CBN and one which assumed a larger than life status under his first term.

At the heart of the present FX strategy is a play on offering a high interest rate differential on OMO bills to foreign portfolio investors to shore up the naira at its increasingly overvalued level. This tactic, which is not a radical departure from policy under Sanusi, is essentially an enlarged bet that external conditions remain benign (dovish Fed plus above $60/barrel oil price) over the medium term. That

‘

In line with historical trends, the exchange rate is the eternal obsession of the CBN and one which assumed a larger than life status under his first term

said, the quantum of these FPI inflows into short dated CBN T-bills (>$16b) have become significant relative to FX reserve levels ($45b) which means that any adverse change on the external front would easily derail the plan.

On growth and inflation, to drive a large expansion in the former, we need to see some sizable fiscal policy adjustments which may be potentially inflationary (flexibility around fuel and electricity prices) and will work to limit the scale of any dovish monetary policy aspirations. Not doing them means economic growth remains at this ‘Ijebu’ 2 percent level.

Lastly, just as we are now used to multiple exchange rates, I think we are likely to increasingly see multiple interest rates (one based on CBN intervention funds and another based on market conditions). In all my thoughts are we are likely to see greater unorthodoxy in the event of an unfriendly external environment: not that orthodox solutions offer much hope when fiscal policy makers are not sincere about reforms but an orthodox approach assures on the credibility of CBN forward guidance which markets require.

“Dr Raji is chief economist at Macroafricaintel.

He was previously an Africa Economist at Standard Chartered Bank, London, UK. (Twitter: @ DrRafiqRaji)”

The Merkel-Siemens solution to Nigeria’s electricity Crisis

O

n the sidelines of the June 2007 G8 Heiligendamm Summit, Chancellor Angela Merkel met with President Shehu Musa Yar’Adua who had just been elected. In response to a question by Chancellor Merkel to President Yar’Adua on how her government could be of support to Nigeria, President Yar’Adua said he needed power. A shocked Merkel quipped, “But you are already the President.”

Realizing that he had been misunderstood

by Merkel, Yar’Adua clarified that he wanted support to solve Nigeria’s electricity problem.

This sort of misunderstanding of jargon is not unusual, as power in Nigeria is used to refer to electricity, while in other advanced nations, including Germany, energy is broadly used to refer to the diverse existing resources and potentials through which electricity and other forms of energy can be derived. It is from this concept that Germany’s energy transition – Energiewende was coined.

The perception or “misunderstanding” of energy in Nigeria is principally responsible for the structural problems in Nigeria’s energy system. We have separate Ministries of Petroleum Resources, Water Resources, Power and then an Energy Commission whose influence is insignificant when it comes to energy policies and implementation of power or electricity generation projects. This imbalance leads to bureaucratic challenges for effective collaboration and coordination in harnessing Nigeria’s energy resource potentials.

Yar’Adua secured Merkel’s promise and commitment to help solve Nigeria’s electricity challenges. Within a year after the Heiligendamm Summit, Nigeria and Germany signed the German-Nigerian Energy Partnership in 2008. The focus of this partnership which was renewed in 2013 was to purse joint projects for the rehabilitation and further

development of electricity production in Nigeria – especially through renewable energy and improved energy efficiency projects.

An important aspect of this partnership to Germany was that the projects undertaken would have a greater involvement of German companies.

It has been 12 years since that 2007 Heiligendamm Summit meeting with President Yar’Adua, in addition to several other meetings and bilateral talks between Nigeria and Germany. Merkel has delivered on her commitment to Nigeria in getting leading German energy firm, Siemens AG, to sign the Nigeria Electrification Roadmap (NER) with the Nigerian government in a new partnership that hopes to transform Nigeria’s electricity sector.

The roadmap which is a three-phase programme aims to ensure that all electricity transmission and distribution challenges are solved, existing generation assets and distribution capacities optimally operationalized to 11,000MW by 2023 and finally upgrading and expanding of the grid capacity – generation, transmission and distribution networks to 25,000MW. The NER which complements the Nigeria Energy Support Programme II (NESP II) sponsored by the German government is the very first strategic, feasible, integrated, workable electricity sector plan undertaken by the Buhari government after the $350 million World Bank sponsored Nigeria Electrification Project (NEP) partly dedicated for mini grid development – which is a component of the unrealistic Power Sector Recovery Programme (PSRP). For the very first time, government is finding a solution to the inadequate transmission and distribution networks to get the stranded generated electricity at the electric power stations down to the consumers.

www.businessday.ng

Sometime in early 2017 when I visited an electric power substation in Nigeria’s Federal Capital Territory, Abuja for a study, the duty engineer informed me that out of the 50MW supplied to the substation, only 14MW was being distributed for use by the distribution company (Disco) that operates in the region.

On enquiry, the engineer mentioned that the Disco lacked the required infrastructure to evacuate the entire 50MW; and for corrupt reasons preferred to only bill and collect the fixed charges from customers without prepaid meters - which they wouldn’t have to remit and account for to the Nigerian Electricity Supply Industry (NESI).

This meant that the 36MW not distributed must be paid for by government; in this case, NBET using the Payment Assurance Guarantee (PAG) which pays for the revenue shortfalls to generating companies (Gencos).

In simple terms, it’s impossible for the NESI to be solvent without fixing the transmission and distribution challenges which government neglected over years while focusing on increasing generation supply.

While the roadmap is highly commendable and should be supported by all NESI stakeholders, there are still areas of significant concern that government must take note of for it to solve the problems it was designed for.

First, tackle the corruption and accounting indiscipline of the Discos. Second, respect and uphold the independence and regulatory authority of the Nigerian Electricity Regulatory Commission (NERC) to sanction non-complying NESI actors especially Discos when they default without the usual interference from the executive arm.

Third, develop a fail-proof system of ensuring that all electricity consumers especially big consumers – the privileged rich and

https://www.facebook.com/businessdayng

AKACHUKWU OKAFOR influential, including government MDAs, pay for electricity consumed – which has not been so. Fourth, work closely with law enforcement and the judiciary to ensure that consumers and persons who commit crimes that impede the effective performance of the NESI are lawfully prosecuted. An important aspect of this is respect for the rule of law in Nigeria.

Fifth, ensure that the process of implementing of NER is appropriate and adequate for the transfer of technology through targeted capacity building and involvement of local Nigerian companies for sustainability purposes.

Finally, government must fully commit to the effective implementation of grid complementary – off-grid and decentralized electricity projects across the country to help reduce the pressure on the grid, and increase access to electricity services to consumers who wouldn’t be easily served by the grid.

These measures will help in stabilizing and transforming Nigeria’s grid infrastructure for optimal efficiency, and also help accelerate the integration of renewable energy solutions to the electricity market using mechanisms such as net metering and feed-in-tariff.

Okafor is the Founder and Principal Partner, Change Partners International, aka@changepartnersintl.com.

@Businessdayng

12

Tuesday 20 August 2019

BUSINESS DAY

EDITORIAL PUBLISHER/CEO

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

Enthroning values and ethics in public office in Nigeria

T

he change of government in Oyo and Imo states, among others, has thrown up news of a toxic variety concerning the conduct of public officeholders.

In both, officials accuse the former holders of impropriety in the acquisition of or transfer of properties belonging to the state. The list of assets involved makes for sober reading. It speaks to a hiatus of ethical conduct at the highest political levels in the country.

In Oyo state, the current and past governors and state officials have engaged in heated exchanges about corralling official vehicles. While the previous governor and his officials see nothing wrong in apportioning those vehicles to the departing officers as a gift, the new men on the seat submit that they went beyond the bounds of the acceptable in taking cars that have hardly run up any mileage on their amortisation.

The Imo state government accuses the former governor

of appropriating vast resources of the state and taking away even items that beggar the imagination and reduce it to brigandage.

What is more disturbing for Nigeria is the absence of outrage and the intrigue of the silence of the middle class represented in professional associations, as well as social platforms. Where are the voices of the Nigerian Bar Association, the Nigerian Society of Engineers, the Institute of Directors, the Rotary and Lions Clubs and the various groups that aggregate the interests and opinions of the middle class?

Can’t they see the implications of what is currently passing as mere brickbats for governance and the society? Or, we fear even the thought, are these acceptable standards of conduct for the managers of the Nigerian economy in both public and private spheres and thus do not raise any eyebrows?

Ethical values and standards matter and do so even more in public office. Officials at our Executive and Legislative levels control huge resources on behalf of citizens and serve as compass

and standard bearers. Citizens, from school children who read about them in classes, to workers at various levels look up to them.

There is also the expectation that they would manage the resources society has entrusted to them with great care. We expect that they should observe all ethical codes and go beyond that to set benchmarks for probity and right conduct. Their behaviour should draw from and enthrone the highest of our values, mores and norms. Values draw from culture.

Because values are cultural, they speak to the traditions and standards all citizens uphold.

We invoke the involvement and participation of our professional and social bodies for reason of our commonly held values.

BusinessDay submits that Nigeria stands at a point where noninvolvement in public affairs can no longer be an option for professionals and the middle class.

We must expect and demand honest conduct from public officeholders. It would enable public confidence and trust in the integrity, objectivity and im-

partiality of government. There should be a distinct difference between the public and private assets of public officeholders.

Even with the many services that the state provides as benefits for holding office in Nigeria, we should draw a line. Officers should open themselves and be subject to scrutiny to ensure the maintenance of this divide between public and private.

We must declare a definite stand on gifts and benefits that overcome various excuses such as “culture”. It would be contrary to accepted codes for public office holders to solicit or accept transfers of economic gain. It is time now to send incidental gifts, customary hospitality or such benefits of nominal value should to an open pool for distribution to hospitals, schools, rehabilitation centres and similar institutions.

Civil society is best placed to initiate conversations on the matter of values and ethics for public office holders. It is critical to have clear values and ethical codes for public office holders in Nigeria to avoid these awkward exchanges.

Time to act is now.

DIGITAL SALES MANAGER Linda Ochugbua GM, BUSINESS DEVELOPMENT (North)

Bashir Ibrahim Hassan

GM, BUSINESS DEVELOPMENT (South) Ignatius Chukwu 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 08169609331 08116759816 08033160837

} Lagos Abuja

ADVERTISING 01-2799108 08034743892 08033225506 SUBSCRIPTIONS 01-2799101 07032496069 07054563299 DIGITAL SERVICES 08026011296 www.businessday.ng 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.businessday.ng

Tuesday 20 August 2019

BUSINESS DAY

COMMENT

comment is free

13

Send 800word comments to comment@businessday.ng

Government accountability and its impact on voluntary tax compliance (2)

I

DAYO ADENIJI & AMINAT JEGEDE

n recent times, there has been an increased demand for transparency and accountability from government at all levels by Nigerians. More citizens are becoming aware of the extravagant activities of government officials thanks to the instant access to information via social media. Thus, Nigerians can easily compare the remuneration of their public officials to that of their contemporaries in other similar developing nations. There have also been instances of trending videos of alleged lavish lifestyles of public office holders and their family members, which seem to validate the perception of the citizenry that its public officials may be wasteful.

Although the sources of the bulk of the information (in the form of pictures and videos) remain largely unverified, the consensus is that public funds are being siphoned for personal gains.

As a result, there has been increased agitation for government officials to deliver on electoral promises and for the overall development of the nation’s infrastructure from the revenue generated from all sources, especially taxes.

A review of the Constitution of the Federal Republic of Nigeria (FRN) (1999 as amended) reveals that the Constitution does not specifically mandate the three tiers of government to be accountable to the citizenry.

However, section 14 of the Constitution pronounces that the FRN shall be a State based on the principles of democracy and social justice. The State is, therefore, responsible for security and welfare of the people. In addition, the State is to control the national economy

in such a manner as to secure the maximum welfare, freedom and happiness of every citizen based on social justice and equality of status and opportunity.

Citizens, on the other hand, are expected to declare their income honestly and pay their taxes promptly. The above notwithstanding, section 22 of Chapter II of the Constitution provides that “the press, radio, television and other agencies of the mass media shall at all times be free to uphold the fundamental objectives contained in this Chapter and uphold the responsibility and accountability of the government to the people”.

In addition to the above, Nigeria voluntarily signed up to the global Extractive Industries Transparency Initiative (EITI) in 2003. The implementation of the EITI led to the introduction of the Nigeria Extractive Industries Transparency Initiative (NEITI). The NEITI Act was enacted in 2007, with the aim of institutionalising accountability mechanisms and processes, aimed at instilling a culture of transparency in Nigeria’s extractive sector for the benefit of all Nigerians.

NEITI achieves its objective through annual audits, identification of areas requiring remediation and adopting an engagement-oriented approach, towards achieving meaningful impacts in the lives of the citizens. While the aim of setting up the NEITI is commendable, its limitations are far-reaching.

Its mandate is restricted to the extractive industry, thus, it is unable to drive accountability in other sectors.

Furthermore, beyond determining the accuracy of payments to the federal government, it is unable to monitor the utilization of the funds, a crux of accountability.

Tax compliance in Nigeria One of the factors that have contrib-

uted to the country’s low tax-to-GDP ratio, especially when compared to similar emerging economies, is the low level of voluntary compliance. Despite the various enlightenment schemes on the importance of tax compliance, an average Nigerian does not see the need to pay taxes when he or she is still responsible for providing basic amenities, such as portable water, power, security and even good roads!

Take the case of Mr Sadiq, who lives in the suburbs of Lagos. He has had to employ the services of a security guard to protect his family and himself at his home. He is also responsible for generating his own electricity using two generator sets to meet his family’s daily needs. Mr Sadiq has also contributed, on several occasions, to fix the road leading to his estate. He patronises a nearby merchant to supply portable water to his home. Mr Sadiq’s children attend a private school and the fees leave a hole in his pocket every term.

Nonetheless, Mr Sadiq’s employer deducts the applicable personal income tax from his salary every month and remits it to the State Internal Revenue Service. Mr Sadiq is currently dissatisfied with the amount he pays as taxes monthly and has dialogued with his employer on numerous instances on the best way to reduce his tax burden, because the government has failed in its responsibilities of providing social amenities for his family and himself.

Mr Olajide, a friend to Mr Sadiq, is a businessman who resigned from his paid employment to pursue his entrepreneurial dreams. Just like Mr Sadiq, he provides his family with basic amenities of life ranging from electricity supply to portable water. However, Mr Olajide is one of the many Nigerians who do not voluntarily pay taxes because of the expectation of a ‘quid pro

‘

Citizens, on the other hand, are expected to declare their income honestly and pay their taxes promptly. ....“the press, radio, television and other agencies of the mass media shall at all times be free to uphold the fundamental objectives contained in this Chapter and uphold the responsibility and accountability of the government to the people

Note: the rest of this article continues in the online edition of Business Day @ https://businessday.ng Adeniji and Jegede are, respectively, Senior Manager and Manager at KPMG Nigeria

The MultiChoice way of growing Nigeria’s creative industry

T

he history of the Nigerian creative industry is shaped by ups and downs and tales of neglect. Until recently, the creative industry was given little or no attention. It sailed the rough tides of lack of funding and inadequate technical know-how for many years. But it did not falter or fall in its march to global limelight.

Nollywood, a critical appendage of Nigeria’s creative industry, has since grown in leaps and bounds - its movies are known internationally and have been at the vanguard of showcasing Nigeria’s vibrant culture and talent, challenging dominant discourse and stereotypes about Nigeria and the African continent. Nollywood has many times also been a case study on how nations can diversify their economies through cultural elements with little or no government intervention.

Nollywood is reputed to be the second largest employer in Nigeria, after the agriculture sector. With an estimated 50 films produced per week, it is the second largest film industry in the world after Hollywood and has recently been identified as Nigeria’s next “mineral resource” because of its huge economic prospects in a digital economy.

According to a report by the United Nations Conference on Trade and Development (UNCTAD), the media and entertainment industry will top the digital industry. The report suggests that cultural goods have become economic drivers in today’s digital age. Increasingly, the entertainment industry has proved to be the oil that will lubricate the knowledge-based economy. Analysts also believe that while the media and entertainment industry was among the first sectors of businesses to navigate digital

disruption, its transformation is far from over.

In its annual “2018 Media & Entertainment Outlook,” PwC projects that industry revenues will reach $792.3 billion by 2022, up from $666.9 billion in 2017.

The Nigerian creative industry has a lot to offer in tomorrow’s digital economy. Since content will be the backbone of the digital economy, the creative industry will supply the content. In Africa, for example, the PwC entertainment and media outlook for 2017-2021 forecasts growth in Nigeria’s film and music industry, and most of the content will be accessed online to satisfy the tastes of local fans.

The report which expressed concerns about piracy in Africa’s most vibrant music scene, reports growth of digital music over physical musical revenue since 2013 and forecasts a further growth for the musical scene at a healthy pace, mostly from mobile ring back tones, another huge boost to the digital economy. “Total music revenue in Nigeria rose 9 percent in 2016 to reach $39 million and is set to rise at a 13.4 percent CAGR to $73 million in 2021”, according to PwC. The Nigerian film industry, on the other hand, is projected to continue growing at a rapid pace.

Equally, an IMF report released in the summer of 2016 posits that Nollywood now accounts for 1.4 percent of GDP in Nigeria. PwC’s entertainment and media outlook puts total cinema revenue at US$22 million in 2021, “rising at 8.6 percent CAGR over the forecast period as Nigerian films gain international recognition and investment increases.”

PwC concludes that with a 12.1 percent CAGR Nigeria will be the world’s fastest growing E&M market over the coming five years. This

www.businessday.ng

growth will be strongly influenced by increased spending on mobile internet access. Already, the industry has seen the first sampling of an indigenous production on Netflix, when the streaming service bought the rights to ‘Lion Heart’ by Genevieve Nnaji.

However, the Nigerian creative industry still suffers from age-long challenges of poor funding and lack of private investment and underperformance in the telling of Nigerian stories. The creative industry has also not been fully professionalised like other sectors of the Nigerian economy. There is no fixed minimum standard of entry into the industry and the range of government support to cushion the range of risk investment in the sector carries is unavailable.

While there have been improvements in the quality of films produced in the industry, there are still many low-quality movies. The most despondent of the Nigerian creative industry story, is the difficulty faced by many creatives in getting a return on investment.

Fortunately, companies like MultiChoice Nigeria have intervened in the myriad challenges plaguing the Nigerian creative industry.

In keeping with its core values of enriching lives, a year ago MultiChoice launched the MultiChoice Talent Factory, a Corporate Social Value programme targeted at helping Africa’s creative industries grow into vibrant, economic powerhouses. The 12-month fully-funded programme was created to ignite Africa’s creative industries to boost the quality of local film and a platform for creating great stories.

At the unveiling of the academy, the Chief Executive Officer, MultiChoice Nigeria, John Ugbe, explains that “the African development

https://www.facebook.com/businessdayng

quo’ relationship with the government.

According to the International Monetary Fund (IMF), only 10 million persons out Nigeria’s labour force of 77 million are registered for tax purposes.

This constitutes about 12.9 percent of the country’s labour force. The government and tax authorities (both federal and states) are aware of the low voluntary compliance level especially in the country’s informal sector and have made some efforts to address the issue.

One key intervention programme is the tax amnesty scheme rolled out between 2016 and 2017. The most recent is the Voluntary Asset and Income Declaration Scheme (VAIDS), which was introduced in July 2017 via Executive Order 004 of 2017. The VAIDS initially offered a nine-month window (i.e. July 2017 to March 2018) for taxpayers to regularise their tax status relating to previous tax periods by paying all outstanding tax liabilities without fear of criminal prosecution for tax offences.

The window was, however, extended by an additional three months, ending in June 2018. The VAIDS also provided the additional benefit of interest and penalties waiver due on the outstanding taxes. The main objective of this exercise was to bring more individuals/ businesses into the tax net with the aim of improving compliance, going forward. However, the jury is out on whether the scheme achieved this objective.

BABATUNDE ARIBIDO

story has been defined by investment in the vast mineral wealth on the continent, leaving our creative industries to fend for themselves on the fringes of economic development for too long.

As a result, the film and television industries have not developed at the same rate as other industries on the continent, and not for lack of talent, passion or imagination.”

The MultiChoice Talent Academy is in line with the company’s new strategy of furthering investment in the development of original African programming and showcasing it on the DStv and GOtv platforms across 49 sub-Saharan African countries.

The pay-entertainment company has also established a platform to honour and encourage creative minds in the country. The Africa Magic Viewers’ Choice Awards, affectionately dubbed ‘the Oscars of Africa”, are an annual celebration of the best creative talent in Africa’s film and television industry. Established in 2013, the AMVCA promotes skills, talent and social cohesion on the continent and restates, once again, MultiChoice’s commitment to providing a platform for the nurturing and showcasing of local talent. These awards serve as an exposure to excellence in the industry.

Note: the rest of this article continues in the online edition of Business Day @https:// businessday.ng Babatunde Aribido, is a Lagos based Media and Communications Practitioner

@Businessdayng

14

Wednesday 24 July 2019

BUSINESS DAY

COMPANIES & MARKETS

COMPANY NEWS ANALYSIS INSIGHT

CONSUMER GOODS

Pressure builds on sugar sweeteners’ cost, revenue as raw prices rise, smuggling lingers …analysts downbeat on full year outlook ISRAEL ODUBOLA

N

igeria’s listed sugar sweeteners spent over 70 percent of revenue on direct cost midyear 2019, with top-line and input costs expected to remain pressured going forward on continued smuggling and possible higher raw sugar prices.

A dive into earnings scorecards of listed players - Dangote Sugar Refinery Plc and McNichols Plc, revealed that these firms have been grappling with higher costs over the years, with mid-year direct cost margin averaging 75 and 80 percent respectively, in the last five years.

Expressed as a percentage, direct cost margin indicates what portion of each revenue naira accounting for only those expenses incurred for production of goods and services.

Both companies saw contraction in cost of sales in the review period, thanks to relative stability in raw sugar prices that traded within the band of $11.55 and $13.44 per bushel (lb) in the period. Raw sugar prices/lb up 9 basis points to $11.64 last Friday, according to data sourced from Bloomberg.

But a deeper look into the numbers showed the industry leader – Dangote Sugar- direct cost jumped

13 percent in second quarter of the year impacted by higher raw materials amid stable sugar prices, while McNichols in similar quarter had some 21 percent cut.

“We anticipate cost pressure will remain given expected increase in raw sugar prices,” said analysts at Lagos-based CSL Stockbrokers in a note to clients.

According to them, sugar prices will trend upwards for the rest of the year due to cuts in supply from major producers like Brazil as they now divert capacity into production of Ethanol due to better margin.

The Nigerian sugar industry is an oligopolistic market dominated by three players – Dangote Sugar Plc, Golden Sugar Limited and BUA Sugar Limited with a total refining capacity close to 2.8 million metric tonnes (MMT).

Despite over 50 years of existence, the industry is stuck at infant stage, supplying less than seven percent of national demand, according to estimates by USDA Foreign Agricultural Service (FAS).

The 10-year National Sugar Master Plan (NSMP) drives the country’s sugar industry, aiming to locally produce about 1.79 MMT of sugar by 2020 The plan, approved in 2012, is meant to facilitate Nigeria’s domestic sugar production, predicated on backward integration

programme (BIP), import regulation via quota and granting fiscal incentives to players.

However, Nigeria’s government policies such as NSMP designed to boost domestic sugar output is somewhat ineffective as the country still relies on major suppliers such as Brazil, United States and Thailand to meet local demand.

The country imported about 1.6 MMT of raw sugar from major producers in 2018 according to figures sourced from USDA FAS, with local production of about 80, 000MT way below 1.7MMT domestic consumption level.

T h e g o v e r n m e n t ’s backward integration pro-

gramme (BIP) for sugar cane production is marred by weak infrastructure, poor policy formulation as well as implantation, limited funding and insecurity in some sugarcane producing areas.

In addition, high transport and production costs for hauling harvested sugarcane to the mills, coupled with low capacity building are set-backs.

The issue of land acquisition has also been a threat to domestic sugar production expansion. Sugarcane farms are transitioning into residential housing developments, which experts say is making it difficult for private investors to acquire lands for sugar processing

facilities.

Smuggling along Nigeria’s porous border, flooding and insecurity in raw sugar producing regions, collapsing infrastructures and logistic turbulences staged by Apapa Gridlock dampens growth prospects of sugar makers.

Perhaps, if Nigeria’s Central Bank doubles efforts in its fight against smugglers it may provide respite for players struggling with weaker margins and dwindling profit.

Sales proceeds of Dangote Sugar, the country’s largest processor with over 70 percent market share, dipped 4 percent half-year 2019, while that of McNichols plunged 17 percent.

Analysts say revenue growth concerns will linger going forward, dampening full year outlook of industry listed players.

While shares of McNichols has gained 4.3 percent since January, Dangote Sugar hard hit by market rout, has shed 37 percent year long, underperforming the Lagos equity index has returned 14 percent losses.

The sugar industry is growing albeit lower pace and sub-sectors that rely on the industry for inputs are positioning themselves to meet growing demand, driven by population growth and increasingmiddle class for consumeroriented staples.

BANKING

Path Solutions elevates Jaiz Bank’s core banking platform in expansion push ISRAEL ODUBOLA

G

lobal Islamic financial software firm, Path Solutions, has upgraded the core banking platform of Jaiz Bank to facilitate innovation that would meet evolving customers’ needs as Nigeria’s pioneer non-interest lender seeks expansion into new markets.

The specific IT requirements of Jaiz Bank were evaluated by the Kuwait-headquartered Path Solutions and adapted them to the latest iMAL R14.1 version.

Given this upgrade, Jaiz Bank now has the capacity to deploy latest technology to better value creation for customers.

According to the lender’s managing director, Hassan Usman, Jaiz Bank will continue to scale in line with its growth strategy and stay ahead of industry as it continues expanding into new segments.

“We are pleased with the successful upgrade to iMAL R14.1 on Oracle in a smooth and timely manner,” Usman said, adding that the result from the verification of all

channels and surround systems was satisfactory.

The bank’s chief noted that with the new sharia-complaint core banking platform, customers will benefit from the best practices and enhanced features Path Solutions has invested since the last implementation.

On his part the Group Chairman of Path Solutions, Mohammed Kateeb, noted that collaboration is key to surviving in a dynamic and competitive environment, saying engagement in strategic partnership has helped

the global software solution provider identify customers’ expectation that will enhance their daily processes and interactions.

“Investing 30 percent in research and development will retain our leadership status in Islamic financial software solution. The result will be a dynamic ecosystem of innovation that will drive growth and customer satisfaction,” Kateeb said.

Path Solutions has been aggressive in promoting Islamic finance industry globally, through maintaining presence

by partnering companies in other locations. It has research & development centers in London, Cairo, Dubai and Riyadh and four others.

Despite the paucity of non-interest banking liquidity instruments, Jaiz Bank saw profit hit a four-year of N815.6 million mid-year 2019, driven by surge in proceeds from investment activities.

The lender is on course to deliver half-year profit in excess of N1 billion if it maintains tempo going forward.

A further dive into Jaiz’s earnings report showed that

the lender paid N1.19 billion as profit to investment account holders to bring its share as an equity investor to N4.55 billion, doubling that of last year.

The lender within six months through June 2019 invested almost N18 billion in a 7-year Federal Government Sukuk with 15.74 percent return.

Jaiz Bank, established 16 years ago, has expressed commitment to support small and medium-sized businesses amid sluggish recovery of Nigerian economy.

Editor: LOLADE AKINMURELE (lolade.akinmurele@businessdayonline.com) Graphics: Samuel Iduh

Tuesday 20 August 2019

BUSINESS DAY

COMPANIES&MARKETS

15

Business Event

BANKING

FCMB upgrades mobile app to boost customer experience MICHAEL ANI

N

igerian mid-tier lender, First City Monument Bank (FCMB) Plc, has upgraded its new mobile banking app to include additional cutting-edge capabilities in a bid to enhance customer experience.

The new app delivers easier, faster and more convenient solutions to streamline and make financial transactions very exciting, the lender said in a statement.

FCMB explains that the new self-service, stress-free and secured app is built to offer the most captivating virtual banking user experience with a vast bouquet of functionalities for all classes of customers. It is currently available for download at Android OS (Google play store) and iOS (Apple app Store).

The app can be used by customers to carry out several exciting activities beyond basic banking services. Among these features and benefits are dispute

transactions, increase transaction and card limits, manage cards, even to apply for a loan, start a target savings account and generate transaction receipts on the go without hassles.

The additional benefits complement the existing ones, which include, funds transfer, account opening, account balance enquiry, airtime and data purchase, bills payment, wallet deposit and withdrawal, among other value-added services, the lender said.

Commenting on the launch of the FCMB New Mobile App and its significance, the Managing Director of the Bank, Adam Nuru said, the new mobile banking app is an important milestone in the banks journey to becoming a digital first financial institution.

“This will see us build the capabilities needed to develop and deploy an array of digitized products that are simple and easy to use. By leveraging emerging technologies and data analytics, we will increase engagement with our existing

and prospective customers to exponentially scale up customer acquisition and transactions at a lower cost to serve,” he said.

To download the app, all that is required is to visit the respective stores (Google play store or Apple app store), and search for the App, using the keyword “FCMB”. This is followed by a tap on the FCMB new mobile app icon, click install/get to download, then open/launch the app when download is complete. Customers are required to register with the Bank to fully commence the use of the app.

FCMB’s mobile banking penetration has been on the increase since its emergence as a leading retail Bank in Nigeria. The lender provides one of the best alternate channels banking services cutting across ATMs, mobile banking, internet banking and the dedicated code, *329# Unstructured Supplementary Service Data (USSD) platform.

Continue online @www. businessday.ng

REAL ESTATE

Landwey acquires 25% stake in Vistafront IFEOMA OKEKE

L

agos-based real estate investment company, Landwey has acquired 25 percent stake in Vistafront, a tech platform that funds real estate projects online.

Speaking on the decision to acquire a stake in the company that is currently causing a disruption on the startup scene, Olawale Ayilara, Founder of Landwey said, “we are always proud when we spot opportunities for our clients and followers to be more involved in real estate projects that will give them the best returns for their money.

In a bid to ease investment in real estate, which is capital intensive for many, Vistafront was established to give people the opportunity to fund real estate projects from the com-

fort of their mobile devices and earn good returns at the end of the project cycle.

We understand the need to continually evolve as we serve the industry. We are glad that withthispartnership,wecanfully supportandencourageeveryone to fund real estate projects.”

Vistafront will be gleaning from the wealth of experience that Landwey has in the real estate business, to launch different projects that will be made available for funding on the platform.

There is an on-going project called Bloom 1, it is a bridge financing for land acquisition for 14,000 square meters nested in the heart of Lekki Epe Expressway, Lagos State, Nigeria. With as low as N25,000 per unit you can fund as many units as you like and make 12% return in 6 months.

With a mission to provide quality infrastructure for all, with Vistafront, one percent of every unit customers fund goes toward Social Infrastructure Impact Project (SIIP) like schools, community homes, hospitals and other social amenities accessible to the less privileged.

However, once one percent of client’s total funding reaches N10,000 for any project, Vistafront will automatically place a cap so that the total amount you pay for SIIP does not exceed N10,000 irrespective of the number of units funded.

Segun Ajuwon, Managing Director of Vistafront says, “We have gotten a lot of positive feedback since we launched and we have plans to continue to launch new projects.

Continue online @www. businessday.ng

SMEs

L-R: Bayo Olugbemi, 1st vice president, The Chartered Institute of Bankers of Nigeria (CIBN); Magnus Nnoka, president, Risk Management Association of Nigeria (RIMAN); Usman Muhammad, inductee; Tokunbo Martins, director, OFISD, CBN; Akinsowon Dawodu, managing director, Citibank Nigeria; Aghogho Etakibuebu, inductee; Greg. Jobome, executive director, risk management, Access Bank, at the Certified Risk Manager (CRM) Professional Certification 2019 Induction organized by RIMAN and CIBN in Lagos.

L-R: Schalk Viljoen, director, lead strong business consulting & wealth consultant for Standard Bank; Binta Max-Gbinije, head, commercial banking & public sector group, business banking, Stanbic IBTC Bank PLC; Ayodele Ojosipe, head, enterprise banking and trade finance, Stanbic IBTC Bank PLC, and Ed Jordan, global head, wealth experience, Standard Bank, during the capacity building session organized by Stanbic IBTC tagged Wealth Master Class in Lagos.

Pic by Pius Okeosisi

Babajide Sanwo-Olu, governor, Lagos State (right), presents a plaque to Mohammed AjibolaOlagbaye, president, ALAHOSPS, during a courtesy visit by board of trustees and executive committee of the Association of Lagos State Retired Heads of Service and Permanent Secretaries (ALAHOSPS) at Lagos House, Alausa, Ikeja, at the weekend.

Redrick PR identifies 14 SMEs with high growth potentials KELECHI EWUZIE

D

etermined to support the profitability of small and medium scale enterprises in Nigeria, Redrick PR limited has recognised 14 SMEs with high growth potential as part of its annual “14 Brands We Love” campaign.

The initiative according to Redrick PR limited is aimed at showcasing highly prospective brands in Nigeria and to appreciate companies and their Chief Executive Officers for their exemplary efforts in promoting the private sector.

Ijebusonma Balogun, chief executive officer, Redrick PR limited says the 14 brands selected

in this year were chosen for their innovative ideas, dynamism, motivation and ambition to push the private sector revenue generation potential in Nigeria and promote entrepreneurship amongst Nigerian youth.

According to PWC,”The SME sector is the backbone of major developed economies, as well as important contributors to employment, economic and export growth.

In Nigeria, SMEs contribute 48 percent of national GDP, account for 96 percent of businesses and 84 percent of employment. Small and medium scale enterprises (SMEs) in Nigeria have contributed about 48 percent of the national GDP in the last five years.

With a total number of about 17.4 million, they account for about 50 percent of industrial jobs and nearly 90 percent of the manufacturing sector, in terms of number of enterprises.”

Balogun stated that the ‘14 Brands We Love includes: DO.II Designs, a one-stop shop that locally manufactures home and office furniture for the corporate, hospitality and residential markets.

DolphinSwimSchool,which provides women and children only swim lessons taught by trained and certified instructors inasafeandsecureenvironment with an array of programs ranging from beginners to advance.

Continue online @www. businessday.ng

www.businessday.ng

AbdulRahman AbdulRazaq, governor, Kwara State (r); welcoming Azeez Musibau, director, Agricultural Business Processing and Marketing, (m), and Okokon Udo, chairman, Agricultural Credit Guarantee Scheme Fund (ACGSF), to Government House, Ilorin, the State Capital, during a courtesy visit on Friday.

https://www.facebook.com/businessdayng

@Businessdayng

16

Tuesday 20 August 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Tuesday 20 August 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

17

18

Tuesday 20 August 2019

BUSINESS DAY

Media business Prolong of payment period by clients threatens marketing communication industry Daniel Obi

M

any of the operating agencies, from Outdoor, Creative to Public Relations businesses in Nigeria’s multi-billion Naira marketing communication industry are complaining but not stridently over the poor payment attitude of their clients.

Both local and multinational companies who contract the agencies for professional media businesses have in the recent time extended period of payment to these agencies from 30 days to 90 days to 180 days (6 months) and sometimes 10 months.

“While the agencies and the media were believed to have fulfilled their own part of the contractual agreement by executing the contracts, they are now faced with the challenge of getting the clients honour their own part of the bargain by paying the invoices that have over -stayed agreed working grace period

of 45 days”, an analyst said recently.

This can be described as being against ethical standard.

This is obviously negatively impacting the operations of the agencies, especially when it is considered that the agencies borrow money from banks and other financial institutions as high as 25 per cent interest rate to finance the given contracts from clients.

What these companies in vari-

May and Baker M & B Paracetamol media account goes to Canod Advertising Daniel Obi

R

enowned Pharmaceutical company, May and Baker (M & B) Plc, has appointed Canod Advertising, as its agency to handle its prized M & B Paracetamol campaign.

The appointment, according to a statement followed a rigorous pitch process that involved four other media agencies at which CANOD Advertising emerged victorious and the subsequent hard negotiations that further confirmed CANOD as an agency deserving of the M & B

Tony Udenze

Paracetamol Media Account.

The pitched brand, M & B Paracetamol, “the Red one”, has fast acting and effective tablets as well as pleasant tasting pineapple flavoured syrup for children. May and Baker’s avowed aim to sustain its dominance of this particular market category with “the Red one” led to its resolve to partner with an efficient agency hence the need for the pitch and the eventual triumph of CANOD. The campaign which commenced in the last week of July this year pan Nigeria was on both Television and Radio with its execution in both English and vernacular languages to effectively penetrate the target markets.

CANOD Advertising is a young gency resourced by the smart and brightest led by Tony Udenze. It is a team of consummate marketing communications practitioners with over 30years experience that cuts across FMCG brands, Telecommunications, Hair & Beauty Care, Pharmaceuticals; Banking & Financial Services; Government & Public sector, Electronics and Insurance.

Industry watchers are of the view that the partnership between May & Baker, a pioneer and market leading player in the Nigerian Pharmaceutical industry and CANOD Advertising will help to reinforce the M & B Paracetamol, “the Red one” brand’s promise and make it the preferred choice of consumers in no distant future.

ous sectors are doing is to use our capital to finance their marketing businesses instead of going to the banks themselves to borrow money, one of the worried operators told BusinessDay in Lagos.

“Many of us owe salaries, it is threatening our business and this clients’ attitude is gradually forcing some agencies to head southwards”, he said. Unfortunately, when the clients pay for the job executed af-

ter many months, the money goes to finance the interest accrued on the borrowed money, another perturbed practitioner said.

The agencies are not complaining loudly to avoid being labelled ungrateful as clients see jobs given to them as favour instead of professional service to grow the clients business.

Another practitioner who spoke on the issue said some of the ways to obviate the clients’ excesses is to spell out clearly the payment duration during the signing of contract document. This way, he believed that client will be legally constrained to pay as at when due.

He also believed that the clients are unfriendly on payment because the industry associations have not taken strong position on the issue.

“When the industry takes a strong stand on the issue, the clients will respect us”, he said.

Recently, BusinessDay reported that Nigeria’s marketing agencies have started to cut workers’ salaries to stay afloat, BusinessDay has gathered.

Global visitors, experts for 2019 ABELA & Conference

I

n what looks like the highest gathering of business owners and leaders in government and management, the 2019 edition of African Business Excellence and Leadership Award (ABELA) & Conference, slated for Abuja on 30th of August will play host to 6000 visitors, including 50 experts drawn from 8 countries of the world.

The one-day conference and award, which is being put together

by Hexagon Development Company Ltd in conjunction with World Trade Organization (W.T.O), with the theme; ‘Strategic Options for Business Transformations & Emerging Technologies’ is being organized to showcase African businesses and leaders.

Speaking at a press briefing in Lagos to herald the conference, which will also reward exemplary leadership, innovation and excellence, the Chairman, Awards General Committee of Abela and Conference, 2019, Bobby Martins, said the conference was specially packaged to focus on strategies, resolutions and way forward to promote businesses within Africa and in the international community.

BD Brand Talk Good Ads and bad Ads: Learning from facial coding Mike Umogun

T

he Yoruba ethnic group in Nigeria is strong believer in the power of the eyes in storytelling and approval. The people are of the opinion that a person’s position on an issue can be deduced by the facial expression and you cannot hide your true emotion. Their local polygraph technology predates what the Central Intelligence Agency (CIA) is doing at its Langley firm today One of the principles applied to innovation at Kantar Millward Brown is that any new technique has to be scalable, ideally on a global basis.

This was why we were the first major consumer insight firm to partner with other marketing scientists to apply the automated coding of facial expressions into our Link pre-test.

30,000 TV ads later and that learning has scaled well beyond providing feedback on individual executions.

The facial coding employed in Link is a true System 1 measure of people’s instinctive emotional response. Changes in facial expression are recorded in real time as people watch a test video (recordings are

made with the respondent’s approval) and coded automatically into 7 discrete emotions. At an overall level we find that the more an Ad energizes people the more effective it is likely to be in driving sales (particularly for established brands).

Beyond this overall finding, facial coding has confirmed many of the principles learned from testing a total of over 150,000 ads around the world.

Dear marketers the following findings are worth keeping in mind when you develop new content for TV. Make it easy to understand By all means use intrigue and mystery to engage people but make sure there is a clear resolution to the story because if people do not easily understand what is going on then the Ad is less likely to be effective. Videos that people report are difficult to understand evoke a lot more frowns and less attention. Holding people’s attention is particularly important for TV ads given that they rely on a narrative or story that evolves over time. According to Ugo Geri-Robert Head of Kantar Millward Brown Nigeria viewers must not break their heads to understand your comms.

Brand status matters

Established brands elicit more smiles and as a consequence higher valence and expressiveness compared to new brands, which instead elicit more disgust, frowns, and sadness. This suggests it is harder for new brands to breakthrough as they do not have the same emotional foundation that established brands do. Users are more likely to recognize and respond to a brand with which they have a preexisting affinity.

Testing rough executions works well Just as with comparisons of selfreported data facial coding finds virtually no difference between testing rough and finished executions. Slightly higher valence is observed for finished films, which reflects our original finding that a finished film can improve overall enjoyment due to production values.

Bottomline line for the brand manager is that you are testing your Ad at two levels, first by what the respondents have told you and second by what the faces are telling you. In essence you are killing a bird with two stones. God help the poor bird!

Umogun works with Millward Brown, part of Kantar Group

Over 500 Bravery stories clocked enter for 2019 Indomie Heroes Awards

T

he nationwide search and call for entry for the 2019 edition of the Indomie Independence Day Award (IIDA) of Dufil Prima Foods has finally come to an end. Over 500 inspiring and heroic stories have been gathered from different states and locations across the six geo-political zones of Nigeria.

IIDA is a national award event which identifies, celebrates and rewards the exemplary accomplishments of children who have shown courage and determination in situ-

https://www.facebook.com/busi-

ations that ordinarily would bring fear. The award also encourages excellence and diligence in children.

A breakdown of the stories gathered revealed that majority of the stories came from the field search exercise with 403 entries. The South-West geo-political zone had 99 entries, followed by the North-West (85 stories), South-East (77 stories), South-South (74 stories), North central (68 stories) while the online and social media platforms matched with 102 entries, totalling 505 inspiring stories. @Businessdayng

Speaking on the concluded nationwide search exercise and call-forentry, the Group Public Relations and Events Manager, Dufil Prima Foods, Tope Ashiwaju, in a statement said that the progress report which the brand has received from the search team, right from the commencement of the search which kicked-off about three months ago, has once again proven that children across this great nation exhibit several outstanding acts on a daily basis which should be rewarded.

Tuesday 20 August 2019

BUSINESS DAY

19

Branding One Planet, One Health is our commitment to consumers, environment – Barrere Increasingly dramatic events like snowstorms in the middle of summer in some parts of the world have led to climate activists and concerned citizens calling for government and organisational action to take better care of the planet with hopes of reducing the adverse effects of human actions on our planet. In this interview, Herve Barrere, Managing Director, Fan Milk Plc, explains the actions the company is taking to play its part in caring for the environment as a responsible corporate citizen.

Tell us a little bit more about your One Planet. One Health? an Milk Plc, is a part of Danone and for us One Planet, One Health is a rallying call to join the ongoing Food Revolution and create a movement aimed at nurturing the adoption of healthier and more sustainable eating and drinking habits. To join us in unleashing the power of food and drink to change our lives and the world, driven by the same pioneering spirit that dates to our roots. In 1972, Antoine Riboud said: “There is only one Earth.

We only live once”, so, for us, One Planet means that we embrace the vision for sustainable business practices, ensuring that our business activities do not have a negative effect on our communities and our planet, the only planet we have.”

In what ways is the team at Fan Milk bringing this to life now?

Locally, we are contributing our quota to preserving and renewing the planet resources by putting our resources behind the recycling of plastics and freezers. Working with partners with passion, we reduce plastic footprint by collecting plastics and bringing back for recycling thereby reducing waste to landfill, improving environmental sanitation, creating wealth through waste and obeying extended Producer Responsibility tenet.

Recently, we also signed an agreement with Hinckley recycling to recycle our used freezers responsibly to ensure that they do not constitute a harm to the environment. We have a strong belief that the health of people and the health of the planet are interconnected, and we hold on to our unwavering commitment to manufacturing and marketing healthy, nourishing, refreshing and enjoyable dairy food products in an environmentally responsible manner.

Do you feel that there are still more opportunities for you to work with other likeminded organisations in this space?

It is important to say that we already have some great partners as I have mentioned before.

F

Herve Barrere

However, this is a journey and we recognise that there will always be a need to work with others to make the greatest impact – from other organisations, to governments and even to individuals.

We will continue to review our progress in this area and look for opportunities to partner as and when the need arises and in alignment with our overall business and environmental objectives.

During the launch event for One Planet One Health, you also celebrated 100 years of Danone, tell us a little bit more about that?

We celebrated 100 years of Danone yoghurt this year and this is a global celebration that took place across our offices around the world. In Nigeria, as part of our celebration of World Environment Day and the launch of One Planet One Health, we marked the occasion with a tree planting ceremony. In partnership with Lagos State Parks and Gardens Agency (LASPARK), and the Ministry for the Environment, we planted trees and unveiled the adoption of a green space. We www.businessday.ng

felt that this was a befitting way to celebrate, especially in line with the theme for 2019 World Environment Day which was Air pollution.

Trees play a very important role is combating air pollution and when you think of the popular Chinese proverb that says: “The best time to plant a tree was 20 years ago.

The second best time is now,” our actions are testament to our desire to make a positive impact in our planet.

How have you been able to get this commitment to caring for the environment into the organisational culture with staff?

Our staff are aware of and are

“

committed to One Planet One Health because they have been part of putting it together. Caring for our consumers and our planet is something that every Fan Milk and Danone staff is passionate about and they have played an important role in championing this vision so it is not just something that someone somewhere in the company manages alone but rather something that is jointly owned by our staff across various levels throughout our organisation.

As a result of this co-ownership approach, there is a high level of passion and commitment to One Planet One Health and in bringing that to life across our business.

In recent years, there has been an increase in calls for corporations to do more in the fight against climate change and in caring more for the environment in general. What will you say to other organisations to encourage them to take actions like you have taken ?

Let me first say that there are lot of organisations both in Nigeria and across Africa and the world that are making giant strides in this space and we are honoured that we can do the same. Having said that, over the years it has become clear that the actions that we take at every level, not just as organisations, but also as individuals and communities and societies will have an impact on our planet, as such anyone that is aware of something they can do differently to make that impact a positive one must do so. It is important to know that we are not only doing this for ourselves but for the future generations as well.

This is something that we feel particularly passionate about at Fan Milk and that is the driving

We have a duty to educate and enlighten youth so that they are well-equipped to tackle some of the challenges they may face in the future in this area

https://www.facebook.com/businessdayng

@Businessdayng

force behind our sponsorship of the Wetlands & Biodiversity for Secondary Schools programme which is run in partnership with the Lagos State Ministry for the Environment. We have a duty to educate and enlighten youth so that they are well-equipped to tackle some of the challenges they may face in the future in this area.

We have been speaking about corporations all this while, on an individual level what can people do to contribute their quota in caring for our environment?

It is often said that little changes over a long time can make a big difference. So, things like using water responsibly, being more conscious to recycle, reducing our plastic waste in the home etc. all these things can make a difference if individuals and communities come together to take collective action.

In your opinion, as the leader of a business that has been in Nigeria now for almost 60 years, what do you think it takes to run a successful business in Nigeria?

I think attitude is very important for any entrepreneur. You must have the right attitude and see opportunities and risks from the right perspective. Just like in many societies where opportunities abound, there is a need to be persistent, keep focused despite failures, rejections and challenges.

You must stay focused and keep going even through those tough times.

What else can we expect from Fan Milk as part of the One Planet. One Health movement?

In addition to these, we have some exciting programmes lined up which we will execute under the One Planet One Health banner and so I will say watch this space as we roll these out over the coming months.

What else can we expect from Fan Milk as a business? Any new products or innovations coming up soon that you can share with us?

As a Company focussed on innovation and value creation for our esteemed consumers; we have exciting products in our innovation pipeline and again I will say watch this space.

20

Tuesday 20 August 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Tuesday 20 August 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

21

22

Tuesday 20 August 2019

BUSINESS DAY

EDUCATION

Weekly insight on current and future trends in education

Primary/Secondary

Higher

Human Capital

‘School enrolment, teacher quality challanges await new education minister’ KELECHI EWUZIE

S

takeholders in the education sector after a cursory look at the sector performance in Nigeria in the last four years, insists that infrastructure, literacy, enrolment, participation, efficiency and quality of skilled teachers remains huge talking points as the new education minister assumes office this month.

According to them, the rate of school drop-outs is on the increase, giving rise to the rate of delinquency and crime in the society.

A London-based Minority Rights Group International (MRGI), in a report that was prepared in collaboration with UNICEF, shows that about 50 to 70 percent of the million children out of school are from minority or indigenous peoples in developing countries such as Nigeria which has the highest number of school drop-outs The report also expresses doubt that the Millennium Development Goals, (MDGs) will be met by the 2020 deadline especially if the right policies targeted at these groups of people are not properly implemented.

Tolu Odugbemi, former vice-chancellor, University of Lagos observes that the consistent low percentage in the budgetary allocation to the education sector has left the sector handicapped.

Odugbemi said the statistical figures for the budget as proposed by government in the last four years represent a clear indication of the almost disregard that successive govern-

L-R: Comfort Akinkodojutimi, assistant Head Teacher, Akowonjo Primary School; Adenugba Abosede, representative, Local Government Education Authority (LGEA), Alimosho School Support Service; Patricia Obozuwa, chief communications & Public Affairs Officer, GE Africa; Remi Erinle, member, GE Volunteers Council and Aameenah Yunus-Ali, programmes manager, United for Kids Foundation, at the launch of a Mobile Library donated by GE held at Akowonjo Primary School premises, Lagos.

ments place on the education sector.

He observes that the challenges against qualitative education in the country affect all categories of students, adding that poor infrastructure is one of the major problems facing tertiary education in Nigeria. There are about 130 universities owned by Federal and state governments, and over 300 polytechnics and colleges of education spread across the nation belonging to governments of the federation.

Odugbemi opines that managers of univer-

sities have over the years, unable to diversify their means of providing hostel accommodation and associated facilities to students.

There has been over the last two decades an upsurge of students’ population in almost all Nigerian universities, but there was no commensurate improvement in accommodation and other students’ services.”

He added: As a result, there is rapid deteriorating of hostel facilities, overcrowding and undue congestion in rooms, over-stretched lavatory, laundry facilities and poor sanita-

tion.

Isaac Adeyemi, former vice-chancellor of Bells University of science and technology was quick to point that reformatting of teacher education is very urgent. The poor quality of teachers in the Nigerian school system is a major force steering education in the wrong direction.

“Until our teachers are better trained and well-motivated, all efforts to improve the quality of the education system will be severely compromised. In the quest to increase teacher quantity, all manner of persons and all manner of part-time and sandwich programmes (mainly to generate income), are part of the current menu of teacher training”.

He said.

The National Teachers Institute, the colleges of education and the faculties of education are blameworthy in unleashing the army of poorly-trained teachers on our educational system. Reformatting teacher education means a major curriculum overhaul. It means improving the quality of the processing of the poor quality intake into our teacher preparation institutions.

Adeyemi calls for periodic re-certification of teachers, adding that Nigeria should begin to train a new breed of 21st century teachers who are steeped in the use of modern methods of instruction and are at the cutting edge of knowledge in their subject matter.

“We should provide a curriculum running from basic through higher education that will lead students to develop 21st-century skills and make them acquire values for good citizenship”, Adeyemi said.

Oyo to access half $3m World Bank education grant InfoWARE, Pan-Atlantic University partner REMI FEYISIPO, Ibadan

T

he Oyo State government under the Better Education Service Delivery for All (BESDA) will access a $3 million dollar million grant from the World

Bank.

The total grant of the $6 is earmarked for the programme facilitated by the Universal Basic Education Commission (UBEC) for Oyo state.

Gidado Tahir, BESDA, co-ordinator, observes that the programme is not fully funded by the Federal Government due to the budget constraints, adding that the government had to look for credit from the World Bank and it obtained the sum of 600 million dollars for the purpose of this exercise.

Tahir, while speaking during a courtesy visit to Governor Seyi Makinde at the governor’s office Agodi, Ibadan said that the money would be given to 17 states that are involved in the project as a grant and not a loan.

Tahir said the purpose of the visit was to interact with the state’s Ministry of Education and the State Universal Basic Education Board (SUBEB) in order to facilitate better education service delivery for all and to ensure that all out of school children in the state are catered for.

Tahir noted that a plan had been developed which is satisfactory to all the stakeholders saying that although there would be no interference from BESDA, there is a need to sharpen the plan and make it successful before the mid-term of the administration.

While appealing to the government of Oyo

State to be committed and use the money specifically for the purpose it was meant for, further stated that the Ministry of Education has the responsibility to supervise the project and provide the general superintendence to ensure school census.

Yahaya Ismaila, who represented the executive secretary of UBEC, opines that the focus of the programme is to assist states to put up strategies to attract children to school, ensure they stay in school and that they learn effectively.

On the exact amount that the state will access, Ismaila said, “It’s about $6million and the initial take-off as an advance is $3 million, which they are likely to get in the next few days.”

Seyi Makinde, Oyo State governor, referred to BESDA as a very laudable programme which means a lot to the people and government of the state.

Makinde who was represented by Rauf Olaniyan, deputy Governor said that the government has displayed its commitment to education in the state by declaring that not less than 10 percent of its budgetary allocation would go to education, as opposed to what obtained in the past when education used to get about four or five percent. The state SUBEB Chairman, Nureni Adeniran, noted that the current administration is passionate about ridding the state of the menace of out of school children He assured that SUBEB and ministry of education, being major stakeholders in the project, would cooperate and work to ensure the success of the project, assuring that there would be a huge reduction in the number of out of school children by the mid-term of the current administration.

www.businessday.ng

on market data terminal curriculum DIPO OLADEHINDE

I

n a bid to increase the knowledge gap between academic institutions and job market, InfoWARE Limited a financial technology firm has partnered with Pan Atlantic University (PAU) on the integration of Market Data Terminal in its curriculum.

This collaboration will improve the employability of PAU students in the financial market and also help students prepare for the financial sector which will not only make them employable by big players in the asset management space but would also help them garner experience give them a competitive advantage over their peers.

Academic Director Planning of the PanAtlantic University Olusegun Vincent said the innovative partnership is the first of its kind in Nigeria, as PAU will be the first University in Nigeria to leverage the Bloomberg-like terminal.

“The collaboration was designed to provide solutions to banking and companies involved in the financial markets,” Vincent said.

Uwa Agbonile, Chief executive officer, InfoWARE Limited said the essence of the collaboration was to explore how to incorporate Infoware Market Data Terminal (IMDT) into the University academic curriculum.

Agbonile assures that InfoWARE remains committed towards impacting its community, and also ensuring that graduates from PAU have the requisite skills to compete in the global

https://www.facebook.com/businessdayng

market.

Nnenna Okoronkwo, account manager, InfoWARE Solution said the partnership with Pan-Atlantic University was an opportunity to improve the skills of the students in investment banking.

“Most of the capital market in Nigeria runs on the InfoWARE terminal; this will be of benefit to the students when they graduate, as they acquire practical skills and experience in investment banking,” Okoronkwo said.

Okoronkwo also added that the collaboration with the University would impart real-time market knowledge to the students.

Onafowokan Oluyombo, head of department, Accounting, PAU said what the students will benefit from the training is enormous and lauded the company for the opportunity to collaborate, adding that the partnership would help to generate extra income for the faculty.

Also, after students get trained in class, they will have the opportunity to learn how to trade using real-time market data via “GrowMyKudi” - a product InfoWARE would launch in the coming months for students and investment enthusiasts to explore real-time market data to virtually invest and place trades.

Users of the platform would be able to buy and sell underlying assets leveraging Robo-Advisory -instructions, build an investment-based portfolio, execute market orders, get investment education, and access a great community of traders and investment enthusiasts.

@Businessdayng

Tuesday 20 August 2019

BUSINESS DAY

23

EDUCATION Bridge Teacher in first-ever Nigerian teachers TV show KELECHI EWUZIE

T

he first-ever Nigerian teachers’ TV show is being hosted in Abuja, with MaryJane Ikeakaonwu, a Bridge Teacher from Lagos among the contestants.

The show is supported by the Federal Ministry of Education and the Teachers Registration Council of Nigeria.

It is designed to shine a spotlight on the incredible work that teachers do across the country in building the nation’s future.

The competition for the show saw teachers from across Nigeria compete for one of the prestigious fifteen spaces available.

Commenting on MaryJane’s participation in the competition, Rhoda Odigboh, Bridge Nigeria’s Academic Director, said: “We are so proud of MaryJane’s success, to place in the top 15 teachers across the whole of Nigeria is an

incredible achievement. The whole Bridge family across the continent wishes her the best of luck. Bridge believes that all teachers should be given the support to succeed and that with on-going support, training and resources every teacher can excel. MaryJane will have an opportunity to showcase to Nigeria the training and teaching skills that make her and all Bridge teachers so successful.”

Odigboh stated that “Our teachers must take credit for the success of their pupils.

It’s the dedication, passion and hard work of our teachers who enable us to transform the opportunities for children each and every day across Nigeria.

Talking about her excitement at appearing on the first-ever TV show, MaryJane Ikeakaonwu said: “It is amazing that I will get to be a champion for teachers. Teaching is such an amazing job. Every single day I get to help children shape their futures. I am

Mary Jane in the Class 2

educating the lawyers, doctors, engineers that will shape the future of their communities and also help build our great country. It is such a privilege.

I hope that the TV show will help people across Nigeria see what an amazing profession teaching is and encourage them to support the teachers

in their communities, or even become one!”

MaryJane Ikeakaonwu teaches in Bridge International Academies, Daddy Savage in Fagba community, Ifako Ijaiye Lagos. She teaches primary 6. MaryJane’s teaching focuses on the ‘big four teaching moves’ to manage

Students showcase mathematical skills at Cowbellpedia TV quiz show

T

he stage is set as Secondary school students across the country with love for Mathematics have the chance to prove their skills as season five of the Cowbellpedia Secondary Schools Mathematics Television Quiz Show commences in earnest.

With a grand prize of N2million and bragging right at stake, the 108 students who scaled the hurdles of the qualifying examination in February 2019, are optimistic about their chances of becoming 2019 Cowbellpedia champion.

The contestants are also aiming to beat the record set in 2018 by Faith Odunsi of The Ambassador College, Ota Ogun State, who solved 19 Mathematics questions within the 60 seconds of fame segment of the competition.

The quiz show which will run for 12 weeks is divided into nine preliminary stages and three semi-finals before the grand finale in November 2019. The organisers also promised that this year’s edition would be more educative and fun-filled as Cowbellpedia is committed to “nurtur-

ing great inventors”.

Latest contest results show that Okafor Ebubechukwu of Saint Francis Catholic Secondary School, Idimu, Lagos, and Salami Ayorinde of Princely Academy, Ota, Ogun State progressed into the semi-finals of the junior category. In the senior category Uche-Nwichi Jessey, the 2017 junior champion and Iroghama Uyiosa both of Graceland International School, Port Harcourt, Rivers State progressed to the semifinalists.

Aside from the N2 million grand prize, Anders Ein-

Aptech preschool to tackle ‘early years’ learning crisis arsson, managing director, Promasidor Nigeria Limited, disclosed that the winner in each of categories, (junior and senior) will enjoy an allexpense paid educational excursion outside the country at the end of the initiative.

In addition, the first and second runners-up in each category will receive N1.5 million and N1 million respectively, while the teachers of the top prize winners will be awarded N500, 000.

Those of the first and second runners-up will receive N400, 000 and N300, 000 respectively.

Firms commit to tackling digital skills gap, boost employment PEACE Daniel

D

etermined to tackle the digital skills gap in Nigeria and b o ost employment, Digify Nigeria in partnership with Facebook have graduated the third cohort of its eight weeks intensive training on digital skills at the Facebook NG Hub, Yaba.

The programme which runs as an academy according to the organisers have in the last one year empowered over 60 graduates with 80 percent in full time employment.

Florence Atunwa Olumodimu, programme director, DigifyPro Nigeria, while speaking on the journey so

far said tackling the digital skills gap certainly requires industry support.

Olumodimu observes that DigifyPro stands out from other digital skills and training programmes, adding that the programme is largely hands-on and action-learning orientated.

“The programme is very intense, comprehensive and hands-on in response to the skills gap in the industry, and the trainees were immersed in the key pillars to succeed in the digital space which are Live briefs / Workshops / Presentations, and finally placement at an agency/ organisation on a paid work placement for 3 – 6 months or in a junior position, ” Oluwww.businessday.ng

modimu said.

Adaora Ikenze, head, public policy, West and Central Africa for Facebook, says her company believes in supporting Africa’s youth through programmes like Digify Pro that develop and provide young people with the tools they need to build the economy.

“We are proud of the graduates and admire the determination and drive they have shown throughout this programme and we are excited to see them kick-start their careers,” she said.

One of the graduates Mabodu Adenike described the training as a dream come true for her. “I have never been this excited about my future

an effective classroom and improve learning outcomes.

Her teaching success comes from training that is focused on using a modern child-centered teaching philosophy, best practice classroom management techniques.

In Nigeria and elsewhere,

teachers rarely get the support they need to be effective.

MaryJane is lucky to be part of a network where she receives daily and weekly feedback on her teaching; uses technology to help her teach lessons in the best possible way and benefits from on-going training to help her achieve the best learning outcomes possible for her children.

Bridge teachers are proud of their recent success in the National common entrance exam which saw pupils from economically marginalized communities in Lagos excel, winning places at some of the best schools in Nigeria.

In her classroom, MaryJane focuses on narrating the positive, encouraging children and ensuring that no child is left behind using techniques such as scanning and wait time.

Approaches such as corporal punishment are banned in her classroom, as they damage pupil, teacher relationships and undermine a child’s ability to learn.

like this, it is a dream come true, the last 8 weeks as open a new vista in my life and I hope to make the best out of what I have been exposed to,” she said Another elated Augustine Olaniyi a physics graduate who had hoped to leave the programme with skills that will help him fulfill his desire of becoming a business analyst said the programme not only empowered him to do that but gave him additional skills as a digital media strategist.

“Coming to the training my major target is to understand Google analytics and how to analyse audience behaviour using Data, I can do that now and much more,” Olaniyi said.

https://www.facebook.com/businessdayng

G

lobal education and training company Aptech Limited says a product called Aptech International Preschool (AIPS) will tackle preschool education in Nigeria.

According to the firm, AIPS’swhich is now operational in Nigeria, especially in Abuja aims to stimulate young children’s curiosity and provide positive learning experiences through active learning.

In addition to world-class pedagogy, internationally recognised curriculum, AIPS will offer first of its kind App enabling child safety monitoring, live view of child’s activity in class, on-demand child video conferencing, along with host of other features.

Anuj Kacker, executive director, Aptech Limited at the launch said the course curriculum has been developed by a team of experts from Aptech International Preschool, based on Multiple Intelligence Theory, Reggio Emilia Approach and Playway.

According to Kacker, “The pedagogy is oriented towards fostering self-discovery, encouraging active thinking and bringing out the creativity in children under their care.

Kacker further explained that with it’s over 30 years of global experience in education and training, is launching Aptech International Preschool with a vision to provide a safe and proactive learning environment.

“We believe this will instill the joy of learning and stimulate each child to identify their @Businessdayng

talents and unleash their full potential,” he said Growth of mental and physical abilities progress at an astounding rate and a very high proportion of learning occur from birth to age six.

Therefore, it is necessary to facilitate a positive early learning experience and environment to children for a holistic intellectual, social and emotional development.

Such an environment, which lays the foundation for later school success and positive lifelong orientation, also helps to recognize the signs and symptoms that set children with learning difficulties and other challenges apart. With a thorough knowledge of developmental milestones, educators are able to identify and correct developmental delays, if any.

This knowledge equips educators to take appropriate measures to guide the children and create awareness among their families for dealing with such challenges.

Thus, the curriculum at Aptech International Preschool facilitates development of children’ life skills through bonds of friendship, social interactions and celebration of diversity.

AIPS also offers Creche and After School programs that provides a safe and stimulating atmosphere for children; it is empowered by technology that enables Live webcast of the Creche. Moreover, to ensure utmost safety and security of the children, AIPS has a policy under which it only hires women; thus, actively supporting employment.

24

Tuesday 20 August 2019

BUSINESS DAY

STEP 8

Making a Match How will we live together? How will we maintain peace and harmony?

How do we keep the music playing? o there’s this thing that happens in relationships. You do the work to meet the person you love, you get to know them, they get to know you, you guys click, you check for fit, and then decide to make it permanent.

Then you have a big beautiful wedding with turquoise and pink aso ebi where everyone celebrates that perfect match.

You’re now officially husband and wife, ready to begin your lives. Okay, now what? The wedding guests have gone home. Now it’s just the two of you in a house, staring at each other’s faces trying to figure out how to make the marriage work. It’s the same thing in the successful recruitment process, the “hiring” part isn’t all there is to it. Obtaining the right employee is the wedding.

Now, retaining them -- that’s the marriage.

Whether you can retain the employee and make their period of employment mutually fulfilling and satisfying depends on what systems you have put in place. The new hire was vetted for fit and you felt like there was sufficient cultural alignment. But that was a projection you made based on a few interviews, and perhaps a work trial. You made the most educated guess you could. But it was still a guess.

So How Then Shall We Live?

So, how do you ensure that your new hire becomes a productive and engaged employee who enriches your organisation for as long as is mutually beneficial? Well, first we need to decide on our “rules of engagement”, which is more than an offer letter with the terms of employment. It’s important to align on how we will live, or in this case, how we will work, as we kick off the relationship.

Hopefully, they already got a taste of this from the work trial process you used to determine if they possessed the competencies for the role and were a general “fit” with your values and cultures. Now it’s time to spell it out plainly to them, through the onboard-

S

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

www.businessday.ng

ing process. This is where you socialize the new hire to your why, what, how, who and when of working: •Your aspirations for the business, (the why) •Your business model, all the various business units/ functions and how they fit into one big system (the what) •How you get the work done and treat each other and your external clients/ stakeholders while getting work done (the how) •Who does what on the team and when things are expected to happen (standing meetings, townhalls, retreats, paid time off, etc).

Once your new hire has been socialized on how you will live together, it’s important that they know how their performance will be measured and what the consequences will be for playing by the rules versus breaking them. In other words, when we have aligned on “what does good look like”, we need to also align on “how we will be assessed” and “what happens if we are https://www.facebook.com/businessdayng

found wanting or if we exceed expectations?”. No one is psychic and it’s important to give and get feedback on how both parties are performing relative to expectations. That’s right, as an employer you don’t just have to give feedback, you need to ask for it as well. Performance reviews do not have to be these super technical or complex undertakings. On the simple end of the spectrum, you can simply list the 2-3 key performance indicators that let you know whether your new hire is delivering on the job-to-be-done and then rate him/her on those indicators with some commentary on what they could do better.

Most people appreciate when performance reviews are not just about grading them an A or B, but when they are also about helping them get an A, by providing constructive feedback on what they could do better to improve their performance. On the complex end of the spectrum, you might have a performance review process that rates employees

not just on the work they get done but also on how well they live out the culture of the organization. You might have them receive feedback from their managers and their direct reports as well as their organizational peers/colleagues (i.e. a “360-review”). Regardless of your preferences on simplicity of your performance reviews, it’s important to get regular feedback on how well you are delivering on your employee value proposition (the “WIIFM” - what’s in it for me) which you promised the new hire during the recruitment process. Some organizations do this through townhalls, anonymous feedback surveys or during the performance review process itself, which we recommend should take place at least biannually.

Just as with marriages, regul a r c o m mu n i cat i o n ab o u t what’s working vs. not working and how each spouse can better meet the other’s needs, is critical to sustaining healthy alliances between employers and their employees.

@Businessdayng

BUSINESS DAY

Tuesday 20 August 2019

The MBA tutor clowning around in the name of business education

F

or the past eight years, the greatest demand on Ralf Wetzel’s performance skills has been to engage the minds of postgraduate students in MBA classes at Belgium’s Vlerick Business School.

This month, however, the associate professor of organisation and applied arts has swapped the shirt and trousers he wears when lecturing on Vlerick’s Ghent campus for a pink wig and a goofy-toothed mask.

He is performing for a more challenging audience at the Edinburgh Festival Fringe in his one-man “solo mask show”, Absolutely Reliable!.

H i s m a s k e d c h a r a c t e r, George, is a version of a prototypical western man based on Prof Wetzel’s perceptions of the traumas that alpha males face in a business world now shaped by the need to diversify workforces and for managers to be more empathetic.

He also includes his personal experiences of the repression he experienced growing up in communist East Germany, then trying and failing to build a career as a business executive in Switzerland before retraining as a business professor.

But he says his desire to stage a production has also been driven by his academic career, and seeking to make MBA teaching more engaging.

“I want to get business education out of the sterile and polished business school classroom,” Prof Wetzel says. “We need to make our hands dirty.”

The Edinburgh show is a first step towards exploring how he might introduce elements of improvisation and theatre to the lecture hall.

“It is important that we find new ways of expressing ourselves,” he says. He has had an interest in improvised theatre for several years, and met the director of Absolutely Reliable!, Lee Delong, through a clowning workshop he attends near Vlerick’s campus.

“There are not many business schools that would tolerate this,” Prof Wetzel adds.

He might not have embarked on the production without the enthusiastic support of his employer — and students.

“Vlerick’s view was that as long as their clients did not have a problem with me doing something like this then I could

‘

Someone cries out from the back of the room. Later there is laughter and towards the end the audience has relaxed enough to join George as he leads them in a chorus of “Happy Birthday www.businessday.ng

give it a go.”

Prof Wetzel’s hope is that he can use the show to develop a style of leadership training he calls “sensual learning”, using techniques and exercises traditionally associated with applied arts, such as improve and mask work, to train students to follow the impulses from the body rather than the brain.

“There are strong links between the applied arts world and becoming a great leader,” Prof Wetzel says.

“Improv theatre, social dance, clowning and many other fields are all focused around having to act competently in the moment, using your emotional and social intelligence and a strong connection, being comfortable in uncomfortable situations, not being afraid of failure.”

https://www.facebook.com/businessdayng

The Fringe offers a choice of more than 3,500 shows, ranging from touring West End productions to those just starting out in the industry, and is itself a lesson in developing your entrepreneurial skills in order to get bums on seats each evening.

“Each day here teaches me more about competition, guerrilla marketing, mass customisation than [I get] at home,” Prof Wetzel says.

Absolutely Reliable! is about as far away from the MBA case study method of teaching management as it is possible to be.

In the show (tagline: “Visiting the abyss of modern men: dark, sinister, rollicking!”), Prof Wetzel takes on the character of George, a white, middle-aged, middleclass, middle manager desperate for both promotion in his @Businessdayng

25

company and for a relationship in his personal life.

As he gets closer to achieving these goals, George’s inner demons of insecurity, anger and denial get the better of him, to tragic effect.

“I feel a mixture between being excited and terrified,” Prof Wetzel admits as he gets ready for his first performance, a process that involves locking himself in a room for an hour to get into the character of George.

There are 11 people in line to see the inaugural 10 o’clock show, enough to fill about a third of the seats in the tiny theatre space above a café on Edinburgh’s Royal Mile.

The turnout is also better than the previous act, “Britain’s funniest blind theoretical physicist” Richard Wheatley, who had just one person in his audience, a Fringe official who had come to assess his stand-up performance for the Edinburgh Festival’s annual comedy prize.

Those who have paid £11.50 to see Prof Wetzel’s show include a couple on holiday from Leipzig, who explain that they were sold on the show by a man handing out flyers in the street by the fact that the star is German. Isabel, an Australian on a month-long tour of Europe, is the one person in the line apparently excited by Prof Wetzel’s academic credentials.

“That’s great,” she enthuses.

“Could he teach me some economics?”

As the lights dim and Prof Wetzel enters the room in his odd stage costume, someone here is clearly concerned about what they have agreed to watch.

“He’s hideous!” they shout.

It is not certain that anyone else in the audience knows what to make of the production from the silence that follows. About 20 minutes in people seem to warm up.

“That’s weird,” someone cries out from the back of the room.

Later there is laughter and towards the end the audience has relaxed enough to join George as he leads them in a chorus of “Happy Birthday” to him.

As we file out of the room into the Royal Mile, mingling with tourists exiting the military tattoo at Edinburgh Castle, everyone I ask says they enjoyed the performance. Prof Wetzel bounds out of his changing room after the show.

“That was incredible,” he says.

“What I am trying to do is to explore the struggles of modern masculinity created by things like the #MeToo movement and men being unable to explain themselves.

“I think what we have created here is on to something.”

26

Tuesday 20 August 2019

BUSINESS DAY

property&lifestyle

Standardisation, low entry barrier issues remain in FM industry amid growth prospects CHUKA UROKO

D

espite its strong growth prospects reflected in increased assets base and growing sophistication in both residential and commercial buildings, the facilities management (FM) industry in Nigeria is still struggling with lack of standardization and low entry barrier as key issues.

Though there are multiple efforts working towards standardisation within the market space, the impact of these efforts are not seen because many of such efforts are in silos typical of Nigerian professionals.

A recent report, ‘The Nigerian Facilities Management Report’, compiled by the Institute of Workplace and Facilities Management (IWFM) notes that low entry barriers is a key problem facing the industry as unskilled individuals that pose as facility management professionals offer poor services.

IWFM is the professional body for workplace and facilities practitioners that exists to promote excellence among a worldwide community and to demonstrate the value and contribution of workplace and facilities management.

The body empowers professionals to scale up and reach their potential for a rewarding, impactful

career by advancing professional standards, offering guidance and training, developing new insights and sharing best practice.

The report which was released just a few days ago suggests that an ‘arrow organization ‘ working collectively with the entire industry is required to ensure best practices are standardized, explaining that the practices and standards need to be set up to create barriers that stop wrong people or just anyone from participating.

The FM industry in the country is challenged almost at all fronts and these have pulling down effect on the industry. Besides lack of acceptable standards, the pool of excellent subcontractors with the ability to support the execution of a facilities management contract is exceptionally shallow with a disorganized supply chain.

“Without quality and capacity within this segment growing, it is almost impossible for the performance of the entire industry to improve; extremely low barriers to entry for artisan work also means the market standard for skills is anchored to the floor,” said the IWFM report.

Nigeria is a very challenging business environment and it is all the more tasking for the FM practitioners who operate in the real estate space where maintenance culture is

poor and regulatory environment is very weak.

According to the report, this poor maintenance culture within the Nigerian real estate space shortens the life span of typical assets and besides the lack of a pool supply of quality contractors and subcontractors, where there is quality, many market participants are hesitant to pay a premium.

It explains that weak enforcement of best practice in building and finishing standards from regulatory bodies also make the management of property once completed harder than it typically should be, adding that this typically results in greater wear and tear, putting the longevity of the asset in jeopardy.

Another major challenge in this industry is energy which is said to constitute about 40 percent of overall maintenance cost. The Energy Architecture Performance Index published by the World Economic Forum ranked Nigeria 110 of 127 countries in 2017. The index is a tool for decision makers to help better understand energy systems and to assess the current energy architecture performance of individual nations.

In the same year, Nigeria generated an average of 3,841MW of power even though there is an installed capacity of over 12,000MW and an estimated demand of 92,000MW. The mis-

Israel Odubola

T

match in demand and supply of power, the report says, mean that ‘blackouts’ or power cuts are a norm in Nigeria and that most commercial property require backup diesel generators to ensure business or other activity is not brought to a standstill.

But amidst these challenges, there are still strong growth prospects for both the industry and the professionals therein, especially with the penetration of technology, offering internet services through internet of things (IoT).

The industry has a promising future with immense investment opportunities.

The value of the industry globally is estimated at $1.1 trillion. Africa alone harbours about 1.4 percent of this global value which is about $700 billion. With technology and the right expertise, local practitioners can tap into this.

According to the report, internet of things comes with advantages. “The interconnectivity and control that comes from otherwise dormant devices means that building management can be more efficient for facility managers and individuals alike. A prime example of this is Ring, a video doorbell service,” the report explained.

Tenants Guide: Reasons renters need to research properties, agents Temitayo Ayetoto

T

he adoption of digital marketing mostly for property leasing and sale has brought more visibility and dynamism to the real estate market in Nigeria.

Data from Nigeria Property Centre (NPC), a property search website in 2018, for instance, indicated that the site attracted 7.4 mil-

lion visits which generated 929,000 enquiries for property listed on the website.

The number of visits to the site was up by 64 percent while the number of enquiries generated was up by 165 percent compared to 2017. There were 129,000 property listings added to the website in 2018.

But this closer-to-user method has also come with a baggage of fraud

www.businessday.ng

for many house hunters.

Fake developers and agents are increasingly masking their mischievous intent behind screens, placing fake properties on online for widespread promotion and unsuspecting renters falling for the ruse. More often than not, the red flags are there but they are easily ignored.

Leveraging the digital opportunity without fall-

Town Planners canvass priority on physical planning to complement economic development

ing prey to rental scam will require renters going the extra mile to carry out due diligence on selected properties, experts say. While the onus lies on promotional websites to conduct background checks and verification of claims of property companies or agents, before making that deposit or that transfer, Arasi Abimbola, deputy managing director at PropertyMart Real Estate Investment Limited says it’s necessary to be familiar with the entities involved. “ You have to ch e ck whom you are dealing with because anyone can place anything on the internet.

If you are not familiar with them you might not have anyone accountable if anything goes wrong,” he said.

“Platforms have a duty to check the people they put their properties online to be sure that they don’t scam people. They can do this through profiling. You

https://www.facebook.com/businessdayng

have to check the track record. Has the person been doing it for a while? Do they have a good reputation?

Do they have customers to testify? It takes a lot of effort because in this part of the world, you don’t totally have that structure,” he added.

For marketers, Chidinma Enyinnaya, business development analyst at Realtor.ng said a proper verification process should involve screening the CAC of an enterprise to confirm it is actually registered in Nigeria as an agent.

It should also assess the landowner document and physical checks.

However for renters, she says, “our job is just to link the agent and the property.

Always try to do your own research. Ask for direct owners. If there is an agent you can meet face-to-face, it is better so that there is Continues on page 27 @Businessdayng

own planners under the aegis of Nigerian Institute of Town Planning ( N I T P ) h av e c a l l e d o n g ov e r n m e n t a t a l l l e vels to prioritize physical planning to complement economic development.

The charge came at the institute’s press conf e re n c e, w h i c h h e l d at its secretariat in Alausa, Lagos on its forthcoming Nigerian Green Cities Summit with the theme, ‘Brown to Green: Enhanci n g We l l n e s s a n d L i vability’.

The first vice president of the institute, Toyin Ayinde, noted that Nigerian cities are cluttered and improperly planned due to the neglect of physical planning on the part of policy makers.

According to him, physical planning is paramount to economic development, as every policy decision must be carried out on land.

“As you are aware, one of the issues that has received global and national attention is that of climate change and the need to evolve adaptation strategies for combating it.”, Ayinde said.

“The summit shall develop strategies for combating the various problems militating against evolving energy efficient, green friendly, pollution free, livable and investment-friendly towns and cities across Nigeria”, he added.

The summit is scheduled for August 27 and 29, 2019 at the Central Bank Int e r nat i o na l T ra i n i n g Institute, Abuja.

The NITP’s chief, who is a former Lagos State Commissioner for Physical Planning and Urban Development, noted that the high level of degradation seen in Nigerian cities emanated from abuse of the environment coupled with poor planning strategies to meet the fast-rising urbanization as well as inadequate infrastructure.

This, according to Ayinde, led the town planners to hinge the summit o n h o w Ni g e r i a n s c a n protect themselves and their environment from the adverse impact of climate change.

The 3-day event will h o l d p l e na r y s e s s i o n s, technical & panel discussions with case studies, and site tours.

Tuesday 20 August 2019

BUSINESS DAY

27

property&lifestyle Expectations as Grenadines Homes readies for market with The Oceanna Endurance Okafor

A

proposed mixed-use development of commercial and residential resort, The Oceanna, is being developed as a 4-tower edifice, architecturally inspired by the sculpted beauty of seashells to redefine the skyline of Lagos.

Being developed by Grenadines Homes, the property is located on Water Corporation Drive in Oniru, which punctuates the shores of Victoria Island, as well as the artful personality of colonial houses of Ikoyi.

The Oceanna is a conglomeration of man-made innovation and organic, natural beauty displayed in luxury apartments in Lagos.

The Landmark Waterview, The Empire Residences II, The Signature Apartments

by Deluxe Residences and the massive cathedral development of Love of Christ generation church are some other developments located along Water Corporation

Drive where The Oceanna is being built.

While Cappa and D’Alberto Plc is serving as the main contractor handling the project, Ecad Architects in conjunction with HOK Architects (who designed the Emirates Stadium), Morgan Omonitan & Abe Ltd, Trevi Foundations Limited among others, are the other members of the construction team.

The resort which consists of 4 towers including The Oceanna Cerulean, The Oceanna Indigo, The Oceanna Aqua and The Oceanna Azure is scheduled to be completed in the third quarter of 2022.

With specially designed residences, unique offices, and luxury retail and boundless recreation opportunities, The Oceanna is being designed with the function to inspire through innovation.

Residents, workers and visitors alike will have the opportunity to enjoy an unrivalled 360-degree experience; one that is yet to be seen in the region, and a match for its global mixed-

use counterparts.

Whether overlooking the blue expanse of the Atlantic Ocean or the extensive greenery of Victoria Island, according to Grenadines Homes, The Oceanna is a community with an innate connection to Lagos, encouraging business synergy and convivial community.

Among the four towers, The Cerulean, a mixed-use tower sitting on a footprint of 650sqm is expected to be the first that will see the light of day and will feature 17 floors of office and residential space. Facilities available include a gym/spa, swimming pool and children’s play area among others.

Construction is currently ongoing with the foundation which consists of 200 Piles, 32 meters below the ground (which is similar to the height of a ten storey building) done by Trevi Foundations Limited. Currently, construction is at the 5th floor and is estimated to be completed in the first quarter of 2021.

The Cerulean tower offers 112 apartments of studio, 1

bedroom, 2 bedroom and 3 bedroom units and, according to Grenadines Homes, it is already 85 percent sold out.

The Indigo is a 24-floor hotel tower building sitting on a footprint of 1,084sqm consisting of branded studio and 1 & 2 bedroom luxury units and would feature restaurants, gym, spa, swimming decks, concierge and valet service, meeting rooms, a tennis court, art gallery, and a helipad.

The hotel studio units are currently priced at N150 million per unit. However, in a co-ownership scheme

by Grenadines Homes, each unit can be divided into 20 lots which currently cost N7.9 million per lot. Piling will begin in the first quarter or next year and the estimated construction period is 30 months.

Grenadines Homes has commissioned W Hospitality Group to source for 5- star luxury hotel brands to manage the hotel.

The Azure and Aqua towers are currently conceptual with implementation ex-

Architects Council wants interlocutory injunction on qualifying examination vacated CHUKA UROKO

T

he Architects Registration Council of Nigeria (ARCON) has initiated a process aimed to challenge and vacate a court order forbidding it from conducting any qualifying examinations for Nigerian architects, pending the determination of the suit.

The council which regulates the practice of Architecture profession in Nigeria considers the court order as averse to justice

and a clog in the wheel of progress of architecture practice in Nigeria.

Justice Muawiyah Baba Idris of a High Court at the Federal Capital Territory, Abuja Judicial Division, gave the order recently in a suit initiated by 13 persons who sued ARCON, the Nigerian Institute of Architects (NIA), Dipo Ajayi, the ARCON president, and Njoku Adibe, president of NIA. The plaintiffs who are all architects include Ibrahim Kabir, Ayodeji Kolawole, Andy Imafidon, Dike

Dipo Ajayi www.businessday.ng

Emmanuel, Opiribo West, Abimbola Ajayi and Emmanuel Ekeruche.

Others are Nicholas Musa, who sued for himself and other interested registered architects; Ademakinwa Olajumoke, Babjide Awonubi, Siyanbola Kukola and Emmanuel Adewunmi, who also sued for himself and other aggrieved person that sat and passed the qualifying examinations conducted by the Nigeria Institute of Architects (NIA).

Following a motion ex parte by the plaintiffs which was filed on May 30, 2019 and moved to July 30, 2019, Justice Idris, a vacation Judge, after hearing plaintiffs’ counsel, ordered: “An order of interlocutory injunction restraining ARCON from conducting and/or purporting to conduct any qualifying professional examinations by whatever name or form for the registration of architects in Nigeria whether by themselves, agents, servants, and/or privies, whatsoever and howsoever from purportedly conducting such examination pending the hearing and determination of the originating summons.”

The matter was then adjourned to August 8, 2019.

But for some reasons, it was learnt that the matter could not go on as planned, lead-

ing to the fixing of a new date on Thursday, August 22, 2019.

ARCON has, in its reaction, filed a preliminary objection challenging the order. Specifically, according to the registration council, two requests have been placed before the court.

One is an order of the court dismissing or striking out the whole matter for want of justice and, secondly, an order discharging and/ or setting aside the court’s interlocutory order dated July 30, 2019.

The council, which is also a federal government’s agency, is also asking the court for such more orders it may deem fit to make in the circumstances.

Justifying its reasons for the objection, ARCON said the court lacks the requisite jurisdiction to adjudicate on the matter ab initio since the Federal High Court has the exclusive jurisdiction.

It added that the plaintiffs/ respondents lack the locus standi to institute the action.

“Both the third and fourth defendants – Ajayi and Adibe were not personally served with the originating process in accordance with the rules of the court,” the council noted, adding that the matter was fixed for hearing during the annual vacation of the court

https://www.facebook.com/businessdayng

pected soon.

Nigeria has one of the most expensive property markets in the world. It is the second most expensive in Africa after Angola and the reasons for this go beyond just the construction cost which is also a factor.

Other factors, which are extraneous, include high cost of funds, government charges, high cost of land, and market uncertainty or the shelf life of the property which means the time the property has to stay in the market before it is sold.

Tenants Guide: Reasons renters need to research...

Continued from page 27

somebody that can be accountable. The victims have every right to sue agent because that’s fraud.”

Rental scam begins with a fraudulent activity by a person who claims to rent out a property that isn’t their brief, doesn’t exist, or is their brief but is different from what’s advertised. The main goal of a rental scam is to obtain money in the form of application fees, pet fees, security deposits and rent from a prospective tenant without providing the advertised rental property.

The red flags come in the form of permanent vacancy, ghost rentals, bait-andswitch, hijacked adverts, already leased or missing amenities.

Fraudsters could show an apartment to prospective renters, collect application fees and never rent it out. Some of those properties can be on the market for years without ever being rented. In other cases, fake listings for places that don’t exist or aren’t for rent could be created.

A property advertised is not the same property that the victim is signing a lease for. Sometimes victims are even shown the apartment, but it’s different from the one stated in their contract.

An instance is 11, Abeni Close, Asha Estate, Gbagada, where over 75 rent@Businessdayng

ers who picked interest in the yet-to-be-completed one-storey-building were defrauded of a total payment of over N20 million in June.

The property was listed mostly on various property websites which are considered to be non-classified marketplaces because of the loose framework of operation and lack of accountability to users in the event of a bad transaction.

Through agents who subscribe to these platforms for widespread promotion, renters including those outside Lagos got in contact with a certain landlord named Mr Bobby and Olaleye Aderonke, his supposed sister. The duo interfaced with renters and pressured them into paying upfront or risk losing out to the rush. In less than a month of flooding the Stanbic IBTC bank account of Olaleye payments, she disappeared without a trace, her account balance empty.

Upon arrest by officers of the Ifako-Ijaiye Police Station in Gbagada, Bobby the property owner disclaimed having any family tie with Aderonke, saying she is a trusted developer whom he has worked with for a long time. The police charged Bobby to court, with the case, adjourned till the August 23, 2019 for further hearing.

28

Tuesday 20 August 2019

BUSINESS DAY

Markets + Finance

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

Only Leadway Assurance meets minimum capital requirement among composite insurers BALA AUGIE

T

he harsh regulatory environment is spending a predawn chill down the spine of operators in the insurance industry.

Na t i o n a l I n s u ra n c e Commission (NAICOM) has jerked up the minimuim capital requirement for insurers in all categories of business, a new rule that has forced companies scampering to raise money either from their owners or the capital market.

A lot of insurers have a very weak capital that prevents them from taking on more risks, as a torrid operating macroeconomic environment makes it practically difficult for them to deliver higher returns to shareholders in form of share appreciation and robust dividend

payment.

Experts identify factors militating against the growth of the industry to include: low consumer purchasing power, poor regulations, apathy towards insurance, high cost of doing business, and systematic risks.

Little wonder the industry contributes less than 1 percent to the country’s GDP and its penetration remains low when compared with some sub Saharan African countries.

While other insurers are struggling to meet the new minimum requirement set by regulator, Leadway Assurance Limited has effortlessly scaled the hurdles.

Leadway is arguably the most successful insurance company in Nigeria as it has the largest total assets, total equity, and premium incomes, thanks to a robust product portfolio, focus and market penetration strate-

gies, and a talented workforce.

A recent report by Chapel Hill Denham Limited shows Leadway is the only composite insurer with a surplus after deducting the new capital requirement from total equity and qualifying capital.

According to NAICOM, qualifying capital is the summation of share capital, share premium and retained earnings, while according to accounting principles, the shareholders funds is the summation of owners’ capital in the balance sheet.

According to the investment house, Leadway shareholders’ fund of N46.49 billion as at December 2018 exceeds the new minimum capital requirement of N18 billion, resulting in a surplus of N28.49 billion. This means it is not under financial stress and it doesn’t necessarliy have to meet shareholders

Oye Hassan-Odukale, managing director/CEO, Leadway Assurance

to raise money.

According to the same report, Leadway Assurance’s qualifying capital of N29.96 billion in the same period under review is more than new capital requirement, hence a surplus of N11.96 billion, while other peer rivals in the composite business fell off the cliff.

For instance, AXA Mansard’s shareholders’ fund of N18.17 billion and qualifying capital of N12.0 billion are less than the minimum requirement, resulting in deficits of N570 million and N6 billion.

AIICO Insurance has a shareholders’ fund of 16.01 billion and qualifying capital- as at June 2019- of N16.01 billion and N8.43 billion, which are lower than the requirement and resulted in shortfalls of N2.92 billion and N9.56 billion.

Lasaco Assurance shareholders’ fund and qualifying capital of N8.97 billion and N6.10 billion are less than the minimum capital, resulting in short falls of N7.43 billion and N11.82 billion.

Cornerstone Insurance has a shareholders’ fund of N9.37 billion and qualifying

capital assets of N5.33 billion, resulting in short falls of N9.51 billion and N12.67 billion.

Niger Insurance has shareholders’ fund of N7.41 billion and qualifying capital of N3.91 billion, which is lower than minimum capital requirement, and resulting of short falls of N14.09 billion and N10.85 billion.

Gold link insurance’s negative shareholders’ fund and qualifying capital- as of September 2018- of N6.33 billion and N3.90 billion is lower than the regulatory requirement hence resulting in shortfalls of N24.35 billion and N25.93 billion.

Analysts at Chapel Hill are of the view that the well capitalized insurance companies have the capacity to acquire the small players with shortfalls of less than N3 billion while they added that it will be quite difficult for listed insurers with shortfalls of over N5bn to raise additional equity capital from the weak stock market.

“Thus, we expect the insurers that are unable to raise capital the required capital to seek mergers and acquisitions, in the absence

BD MARKETS + FINANCE Analysts: BALA AUGIE www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

of strategic investments, as against losing their investment,” said analysts at Chapel Hill.

Leadway maintains efficient underwriting capacity LeadWay is one of the most efficient insurer in Nigeria, thanks to an efficient underwriting capacity as it continues to meet obligation to policy holders.

For instance, the insurer has a combined ratio of 64 percent as at December 2018, that compares with Zenith Insurance, (125.89 percent); AIICO Insurance, (1.12 percent);AXA Mansard, (1.08 percent); Wapic Insurance, (1.33 percent), Consolidated HallMa (2.35 percent), Law Union Rock , (1.16 percent), and Sovereign Trust Insurance, (91.25 percent).

The combined ratio is the summation of underwriting expenses, management expenses and claims expenses divided by net premium income and a ratio below 100 percent means the insurer earns more in premiums than it pays out in claims.

As a result of a steady increase in premium income, and efficient expense management, leadway recorded an underwriting profit of N2.96 billion from a loss of N10.40 billion the previous year.

The management and boards of directors of the company have been taking advantage of a high interest rate by investing money in bonds and equities as investment income stood at N22.90 billion in December 2018, which represents a 36.15 percent as against N16.36 billion.

Because underwriting profit is most times slim after accounting claims and expenses incurred in generating premium income, insurers (including the foreign players) use the investment income to underpin profit.

Tuesday 20 August 2019

BUSINESS DAY

BDTECH

29

In association with

E-mail: jumoke.akiyode@businessdayonline.com

Pushing the boundaries of Fintech in Nigeria JUMOKE AKIYODE-LAWANSON

F

or centuries, technology has changed the way we live, communicate, work, play, interact and do business. Although there are still many ways that we are trying to catch up with technological advancements, many sectors have evolved with technology resulting in ease of operations and better customer service.

The financial industry is one of such sectors that has grown at an exceptional rate.

In the last few years, traditional banks have joined forces with Fintech companies to utilize more financial technology offerings. For one thing, there was a need to eradicate the long queues in banking halls, make cash transactions easier and faster without a visit to the banking hall and resolve other issues associated with payments and financial transactions.

In 2015, an article in the Huffington Post stated, “Fintech is beginning to disrupt the financial world as we know it. The financial industry is now more focused than ever on technological innovation than at any other time”. The same article goes on to define Fintech as “financial technology; a digital revolution.

It is about major changes to asset

L-R: Henry Nkemadu; director public affairs, Nigerian Communications Commission (NCC), Sola Aderounmu; dean, faculty of technology, Obafemi Awolowo University Ile-Ife, Haru Alhassan; director, new media and information security, NCC, Yusuf Kazaure; managing director, Galaxy Backbone Ltd, Umar Garba Danbatta; executive vice chairman, NCC, Sahalu Balarabe Junaidu; head, department of computer science, Ahmadu Bello university Zaria, Ephraim Nwokonneya; director, research and development, NCC, Salihu Tanko Yakassai; special adviser to the executive governor of Kano state, Chris Uwaje; Africa chair, Institute of Electrical and Electronics Engineers Internet of Things (IEEE IoT) at the Emerging Technologies Research and ICT Innovation Forum held in Kano State on August 14, 2019.

management, business and personal loans, fund raising, money transfers, and the way to invest.

Fintech involves disputing the way all business operate, as well as our personal finances”.

Indeed, the financial industry is growing so fast with technology. Banks are now able to deal with changing customer expectations and are able to recruit new customers based on varied offerings that meet the diverse customer needs. Beyond banks, other corporations and service companies are able to provide simpler payment solutions because of financial technology.

Initially, customers were apprehensive about using Fintech services. There were issues about trust of the system, fraud, system hacks and failed transactions.

However, with technological advancement, many of these issues have been minimized.

In Nigeria, financial technology has greatly influenced e-commerce and payment solutions. According to a PWC 2017 Fintech Survey Report, over 62% of customers will make use of mobile applications for financial transactions within the next five years. This implies that Fintech companies are going to do more

for customers especially on mobile.

Another implication of this is the rise of a shared economy.

For example, Cable TV Companies collaborate with banks and Fintech Companies to provide a platform where customers can pay for their cable TV on the Bank’s Mobile App platforms.

This shared economy is being witnessed across sectors - power, education, environment, health, transportation and even entertainment.

Financial technology has huge benefits for all businesses, especially new startups or small-

scale businesses. With Fintech, these small businesses are exposed to a world of benefits in terms of access to funding, ecommerce, online order/supply channels, crowd sourcing and customer transactions options.

Fintech also helps businesses to have improved payment systems and, customer relationship management. Consumers can now carry out transactions through their mobile devices, thus improving response/feedback time.

When it comes to the unbanked and underbanked, some Fintech companies have made efforts to develop and provide solutions that gives them access to financial services, thus contributing to efforts for financial inclusion.

One of such Companies making efforts to develop new and innovative ways to deliver Fintech solutions that are convenient and easy to use is itex Integrated Services Limited. Itex is an innovative Fintech Company that designs and deploys secure solutions to diverse Pan-African customers.

Itex has for several years focused on the development and deployment of convenient, reliable and secure payment solutions to its customers in Nigeria and across Africa. In fact, the Company played a critical role in the implementation of the ‘Cashless Nigeria’ initiative. Itex

is one of the first organizations to successfully deploy and manage Point of Sales (POS) terminals in Nigeria. Until date, the Company continues to make custom payment applications to ease electronic payments, revenue collection, payment of utility bill and value added services payments such as airtime, electricity, cable TV, tariffs, toll payments, etc.

Most commendable about Itex’s efforts is the Company’s extension of financial services into rural areas such that the unbanked become the banked and, areas without access to banks can still enjoy financial services without entering the banking hall.

Efforts like this need to be encouraged. Fintechs should get the needed support from both government and private corporations. The education on the need to be financially included and on the need to embrace financial technology need to be taught to people across levels and especially in the rural areas.

The impact of financial technology on the economy cannot be over emphasized. Several research and evidences point to the fact that Fintech is the future of the business economy. This is the time therefore, to grow our technological strength and support Fintech Companies to drive us to that growth that Fintech will bring about.

Verve global card launches first international transaction in New York, USA …rides on global partnership with Discover Network

V

erve, a leading payments technology and card business in Africa, and Discover Global Network, the payments brand of Discover have launched the Verve global card which provides acceptance in more than 190 countries and territories and will expand Verve’s existing suite of tailored payment products and solutions for its customers.

Ordinarily, the Verve card is a local payment card that is not accepted everywhere in the world. However, the

agreement with Discover Global Network will facilitate new international and cross border transaction capabilities for Verve Global Card customers, meeting the needs of its increasingly global customer base.

Holders of the new card can make payments outside Africa on the Discover Global Network which includes anywhere Discover, Diners Club International and Pulse and affiliate network cards are accepted. Verve Global Card also delivers additional

www.businessday.ng

benefits to cardholders including broad reward and loyalty schemes; benefits that are available both locally and internationally.

The first transaction occurred on Monday 12 August 2019, at Swarovski in New York City. Senior executives from First Bank, Access Bank and Fidelity Bank purchased various items from Swarovski using their Verve Global Card on the Discover Global Network.

Mitchell Elegbe, managing director, Interswitch

Group, commented on the announcement: “The agreement with Discover Global Network will enable Verve to compete with other global card offerings, providing cardholders with an enhanced customer experience when transacting globally outside Nigeria.

Creating a solution which facilitates international payments for our consumers will help to eliminate existing barriers and simplify the process when transacting abroad.”

https://www.facebook.com/businessdayng

“It is important to us that we are working with groups around the world to extend acceptance for their cardholders,” said Ricardo Leite, senior vice president of international markets at Discover. “At Discover, we recognize the importance of being able to use your card of choice no matter where you are traveling.”

Mike Ogbalu III, divisional chief executive officer, Verve International also commented on the announcement saying, “The

@Businessdayng

launch of the Verve Global Card, provides consumers with the ability to transact globally across the US and other countries, addressing challenges that many Nigerians have experienced while travelling abroad.

Our partnership with Discover Global Network will help us to optimize the overall experience of every Verve Global card holder by guaranteeing consistent and efficient payment solutions regardless of where they are in the world”.

30

Tuesday 20 August 2019

BUSINESS DAY

BDTECH

E-mail: jumoke.akiyode@businessdayonline.com

‘With our LTE infrastructure, VDT is at a vantage position for the introduction of 5G in Nigeria’ Abiodun Omoniyi is the managing director and CEO od VDT Communications, a leading broadband communications service provider. In this interview with JUMOKE AKIYODE-LAWANSON, he talks about VDT’s recently launched retail data network 4G LTE advanced service, Nigeria’s telecommunications sector challenges and the company’s plans for 5G in the future. Excerpts.

W

hat is the acceptance rate of VDT services since it launched a month ago into the retail broadband internet market?

The market has responded quite well to our introduction and we have seen an increase in market uptake of the product. We are also getting good feedback about the service from customers, in the sense that there is nothing like hearing from the customers. We do pride ourselves in our customer service and customer feedback is very important. VDT is an ISO certified organisation and what ISO focuses on is making sure that the customer is the centre of activity before you can be certified. We have experienced increase in sales and this has afforded us the ability to hear feedback from the customers which we use in refining the product for a better quality service.

What are the steps VDT is taking to make sure that it does not struggle to survive in this tough operating environment and that it gains a wider reach to all Nigerians?

We are quite happy to be part of the market development of broadband services in Nigeria; in the sense that there is a lot of yearning to deepen broadband penetration, and we can see that the totality of all the different operators cannot meet the demand right now, especially when it comes to the quality of service, coverage and spread.

We are just trying to contribute our own quota to this – trying to make sure that there is availability of service, better penetration of signal and that internet services are a lot more qualitative. VDT prides itself in providing a more qualitative service than others. To expand this service, we are planning to invest more and we have also taken steps to assure our investors that once we are able to show the rate of uptake in Lagos, it will be a lot easier for us to move on to other cities across the country. We have a plan to expand to five other cities in Nigeria before the end of the year. However, our aspiration is far more than that because our license is national which is why we also need cus-

nite resource, so you want to make sure that people use their fair share.

What would be the point of having an unlimited internet service valid for 30days which doesn’t work properly for some days out of the month?

Abiodun Omoniyi, MD/CEO, VDT Communications Limited.

tomers’ attestation that the market is truly there, and the only way you can know that is in recording good sales. Our plan is to move next to Abuja, Port Harcourt, Kano, Ibadan and Benin.

What is VDT’s unique selling point considering that there are so many other internet service providers in this market?

There is a gap in Nigeria’s internet service market, and that is the need for good quality service. If you know and understand VDT’s history, you know that we would never launch unless we can provide that good quality service. Everybody says they provide quality service but what do they actually mean by quality service? Customers want to be able to stream videos seamlessly without buffering. This is what VDT is offering, because we have provided adequate bandwidth to every customer’s access, and we continue to monitor that, and make sure that it delivers. We also provide available and affordable service for different segments of the market.

What prompted VDT to move from serving only corporate clients to playing in the retail space for the provision of broadband services?

Apart from wanting to bridge the gap in providing quality internet service to all, we have ensured that we have a bouquet of several plans to address the needs of different people. Families that are home only after work in the evenings are being offered our free night service plan from 8pm to 7am. We are the only network that provides free night service from as early as 8pm in the evening. Discerning customers know that if you must provide good quality service, you cannot give fully unlimited service because there is what is called the fair usage policy which means that you still need to put some economics behind what you call ‘unlimited’. As a service provider, you will not want some people to take more than their fair share. When you put more and more people on a bandwidth, then it becomes limited because it is a fi-

VDT is operating in a tough sector. What challenges do you think can impede the growth of Nigeria’s telecommunications and broadband industry if not duly addressed by either the government or stakeholders?

The issue of security of lives and property is a big challenge in Nigeria which needs to be addressed.

But particularly in our sector, telecom infrastructure needs to be protected, especially right now when we are pushing a lot of data traffic and need to be able to provide uninterrupted service. In a situation where digging and fibre cuts are not monitored and prevented, there will always be service disruptions. Also, power infrastructure affects every sector including the telecoms sector and because we have found a way to generate our own power in this sector, it drives up the cost of provision because the multiple base stations need to be constantly powered, maintained and secured. Another major challenge in this sector is the issue of multiple taxation. However, in the last few months, this has been a bit mellowed. We are just hoping that the government agencies can come together and earmark what taxation they want players to pay, rather than coming up arbitrary charges that we need to pay. These things actually disrupt services.

VDT is a strong player in terms of 4G service, especially since the acquisition of 2.3GHz spectrum from the Nigerian Communications Commission (NCC) in 2016. What preparation is the company making towards the future deployment of 5G services in Nigeria?

We are still grappling with deploying 4G generally around the world and not just in Nigeria. 4G has not really been dense enough world over.

However, the direction eventually is 5G and I believe we would get there.

For us to have autonomous vehicles, Artificial Intelligence and others, 5G needs to come in. VDT is at a vantage position to be a foremost company in the introduction of 5G in

Nigeria because the infrastructure that we have built is built from the ground up. We don’t have 3G, our infrastructure is built on the Long Term Evolution (LTE) foundation and 5G is coming on this new LTE foundation so we would be one of the first companies to provide this service when it comes. In fact, what we are currently providing is actually a 4G advanced service which is also known as 4G plus.

Is VDT partnering with any Original Equipment Manufacturers (OEMs) to ensure that adequate devices for your advanced 4G service are readily available for customers in this market?

In the telecom world, you can’t do it alone. Even the bigger Mobile Network Operators (MNOs) actually work through the sellers. We are using the same kind of model to move the service. VDT is currently partnering with OEMs, supermarkets and others to ensure wide spread across the city. We have signed about 45 resellers and 50 sales outlets in Lagos.

How does VDT come up with investments in its business and is the company looking at the possibility of going to the capital market in the future?

VDT has operated in this market for more than 18 years, and one thing we believe in is building a legacy, and the only way to do that is to open up the business to raise more investible funds. We have advisers that will let us know the appropriate time to go into the capital market.

We are not opposed to listing on the stock exchange but we need to do it in a way that does not crash the system. VDT is operating for the long run, so we will definitely come to the market at the right time.

Is VDT interested in playing in the space of payment service banking?

We are interested in playing in everything digital and not just being a digital payment service provider and that is why we are currently working on customer acquisition.

Many of these digital services such as artificial intelligence, autonomous vehicles and the likes are going to be driven by the connectivity companies.

Realtor.ng revamps dynamic website to enhance buyer search JUMOKE AKIYODE-LAWANSON

R

ealtor.ng, a real estate technology company committed to leveraging the use of technology in the real estate industry in Nigeria, has launched its newly redesigned website, www.realtor.ng, offering innovative features, a sim-

plified buyer search, and a network of trusted real estate agents.

The upgraded realtor.ng website enables buyers to search for property for rent, for sale, and for shortlet in any location. The website also enhances the search journey for buyers by allowing users to search by price, specifications, and even send www.businessday.ng

specific requests to their network of reliable real estate agents in Nigeria.

This contemporary design allows buyers to search efficiently for the property types they desire without having to weave through properties that they are not interested in viewing.

Speaking on the recent relaunch of

https://www.facebook.com/businessdayng

www.realtor.ng, Diran Otegbade, the founder and CEO of Realtor. ng, says, “We are committed in our vision of leading a revolution of efficiency, trust, and transparency in the real estate industry in Nigeria.

Our relaunched website reduces the time it takes for tenants and buyers to find a place and also decreases @Businessdayng

the transaction time for prudent sellers and real estate agents”.

The website includes an energized aesthetic that provides a userfriendly experience for both property searchers and real estate agents in Nigeria. Additionally, the modified design delivers an optimal viewing and search process from any device.

Tuesday 20 August 2019

BUSINESS DAY

Investments

ENERGY INTELLIGENCE

Market Insight Companies Commodity Tracker Policy

OIL

GAS

31

PETROCHEMICALS

POWER

PROJECT

NNPC secures contract with Halliburton to test appraisal at Kolmani River-2 DIPO OLADEHINDE

S

tate-owned Nigerian National Petroleum Corporation (NNPC) subsidiary Frontier Exploration Services (FES) has awarded a contract to America’s multinational corporation, Halliburton, to test an appraisal of Shell’s Kolmani River gas discovery which is located on the Gongola basin of Benue Trough in Bauchi state.

Prospecting for oil and gas in Kolmani river-2well is one of the recent forays of the government into inland exploration in northern parts of the country.

According to intelligence report from Norwegians based Upstreamonline, Exploration Services Unit of the NNPC has awarded contracts to one of the world’s largest oil field service companies Halliburton to run Drill Stem Tests (DSTs) and Tubing Conveyed Perforation (TCP) on the Kolmani River-2, in Bauchi State, at the Gongola Basin, in the country’s northeast region.

Also, Africa Oil and gas report also quoted sources as saying the application of DST (a tool for measuring reservoir flow rates), is usually an indication that the results of wireline logging have signalled that the well has encountered some commercial pool of hydrocarbon.

“The sand is better developed at

this location and when we were to hang the 9 5/8 inch casing at some few feet deeper than 10,000feet (3,048metres), we were hardly able to find a shale level to hang”, one source told Africa Oil and gas report .

“We are drilling with a waterbased mud, so there are no issues about the stability of the wellbore”.

The story changed in the 8 ½ inch hole, according to our findings.

The rate of penetration of the drill bit was so low from 13,100ft to 13, 250ft, according to field report,

indicating tighter formation.

The company has kept a tight lid on information, but Africa Oil+Gas Report learns that several feet of natural gas and oil may have been encountered, although the case for commerciality is up in the air.

Kolmani River-2 will be appraising the 1999 gas discovery made by Shell in Kolmani River-1.

The Anglo Dutch major drilled the well to a depth of 3,000metres.

Although there were no tests, the company booked 33Billion stand-

ard cubic feet of gas as possible estimated recoverable reserves based on some petrophysical results.

The Kolmani River-II Well, according to projections, is one of four oil and gas wells that the Nigerian National Petroleum Corporation NNPC said were being planned for drilling this year on the Gongola Basin to further test the prospects identified around Kolmani River-1, Nasara-1 and Kuzari-1 In February, President Mu-

hammadu Buhari had flagged off the spud-in (drilling) of the Kolmani River II Well, which is located on the Gongola basin of B enue Trough in Bauchi state.

The river basins include the Chad Basin, Gongola Basin, Anambra Basin, Sokoto Basin, Dahomey Basin, Bida Basin and the Benue Trough.

“The main purpose of this well is to start some massive appraisal of the discovery that was made way back in 1999 of some gas reserves in Kolmani River 1 and, so far, the drilling has been going on smoothly to enable exploration,” former Group Managing Director of NNPC Maikanti Baru said in February.

Reiterating the presidential directive, the NNPC GMD said a deeper search for oil in the north will enable the corporation to extensively appraise the gas reserves discovered in the region in 1999.

He said drilling on the Kolmani River-II site has been going on smoothly, adding that as at Wednesday morning, the corporation had reached depths of 10,075 feet, with a target to reach 14,270 feet.

Shedding more light on the investment opportunities in Nigeria, Baru observed that the NNPC’s Frontier Exploration Service is currently drilling the Kolmani River-2 Well, where desktop estimates revealed about 400 billion cubic feet (Bcf ) of gas.

MARKET

OPEC forecasts bleak prospects for oil market till end of 2019 ISAAC ANYAOGU with Agency reports

T

he Organisation of Petroleum Exporting Countries (OPEC), the fourteen member cartel that controls the bulk of oil supply cut forecast for global oil demand growth by 40,000 barrels per day (bpd) to 1.10 million bpd an indication that the market will be bearish going into 2020.

OPEC in its latest oil market report says slowing economies in the face of US-China trade dispute and Brexit could push OPEC and its allies including Russia to extend supply cuts so as to shore up prices.

“While the outlook for market fundamentals seems somewhat bearish for the rest of the year, given softening economic growth, ongoing global trade issues and slowing oil demand growth, it remains criti-

cal to closely monitor the supply/ demand balance and assist market stability in the months ahead,” OPEC said in the report.

Reuters report that It is rare for OPEC to give a bearish forward view on the market outlook and oil pared an earlier gain after it was released to trade below $59 a barrel.

Despite the OPEC-led cut, oil www.businessday.ng

has tumbled from April’s 2019 peak above $75 pressured by trade concerns and an economic slowdown.

OPEC, Russia and other producers have since Jan. 1 implemented a deal to cut output by 1.2 million bpd.

The alliance, known as OPEC+, in July renewed the pact until March 2020 to avoid a build-up of inventories that could hit prices.

https://www.facebook.com/businessdayng

OPEC left its forecast for 2020 oil demand growth at 1.14 million bpd, up slightly from this year. But OPEC added that its forecast for 2020 economic Regrowth faced downside risk.

“The risk to global economic growth remains skewed to the downside,” the report said. “Especially trade-related developments will need to be thoroughly reviewed in the coming weeks with some likelihood of a further downward revision in September.”

OPEC trimmed its global economic growth forecast to 3.1% from 3.2% and, for now, kept its 2020 forecast at 3.2%.

The report also said oil inventories in developed economies rose in June, suggesting a trend that could raise OPEC concern over a possible oil glut.

Stocks in June exceeded the five-year average - a yardstick @Businessdayng

OPEC watches closely - by 67 million barrels.

This is despite the supply cuts of OPEC+ and additional involuntary losses in Iran and Venezuela, two OPEC members which are under U.S. sanctions.

OPEC deepened its cuts in July, the report showed. According to figures OPEC collects from secondary sources, output from all 14 members fell by 246,000 bpd from June to 29.61 million bpd as Saudi Arabia cut supply further.

OPEC and its partners have been limiting supply since 2017, helping to clear a supply glut that built up in 2014-2016 when producers pumped at will, and revive prices.

The policy has been giving a sustained boost to U.S. shale and other rival supply, and the report suggests the world will need significantly less OPEC crude next year.

32

Tuesday 20 August 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Tuesday 20 August 2019

BUSINESS DAY

33

ENERGY INTELLIGENCE COMPANY NEWS

Netherland firm to supply two gas lift jumpers in Okwori field future pipeline needs,” McCafferty said in a statement.

According to Airborne Oil & Gas, this is the first time one of its TCP technologies has been ordered through its newly launched “Jumper on Demand” service which sees long lengths of its Jumpers being manufactured, prepared with dedicated end-fittings and held in stock.

“This allows for a significantly improved turnaround of pipe supply, termination and installation in any location,” statement

DIPO OLADEHINDE

N

etherland based Airborne Oil & Gas limited has agreed a contract with Addax Petroleum for the supply of gas lift jumpers for Okwori field development offshore Nigeria, within an eight week timeframe.

The two 180-m (590-ft) long, Thermoplastic Composite Pipeline (TCP) jumpers will be delivered to support Addax petroleum’s operations in offshore Okwori field located in OML 126, which started producing in February 2005 via the BW Offshore-owned Sendje Berge Floating Production, Storage and Offloading (FPSO) unit.

“The flexibility and ease of retermination makes TCP a great product for gas lift and other applications within Addax in Nigeria.

It allows us to cut pipe to length and install quickly, thereby ensuring that production is maintained with minimum disruption,” Technical Advisor at Addax Petroleum Tony Kirkby, said.

A i r b o r n e O i l & Ga s Vi c e

MARKETS

President for Europe & Africa, Paul McCafferty, said the scope of work for Addax involves the delivery of two TCP Jumpers within a very short timeframe, which in turn provide s th e suppor t the Sinopec Group

subsidiary require in the most optimal way.

“Throughout this project we look forward to further developing our client relationship while delivering our effective high-quality TCP technology to support their

Will NNPC gas pipeline deal with Morocco avoid challenges of WAGP? STEPHEN ONYEKWELU

S

tate-controlled Nigerian National Petroleum Corporation (NNPC) has embarked on another ambitious international gas pipeline project that will take gas from Nigeria, through some West African countries to Morocco in North Africa. But the success of this project may be doubtful given the poor performance of a similar project, the West Africa Gas Pipeline (WAGP).

The Nigeria-Morocco Gas Pipeline (NMGP), which was mentioned by Mele Kyari, group managing director of the NNPC at a recent meeting, this August, with representatives of Morocco National Office for Hydrocarbons and Mines and executives of International Oil Companies operating in Nigeria is a sequel to an earlier meeting between President Muhammadu Buhari of Nigeria and King Hassan VI of Morocco on a Pipeline Cooperation Agreement (PCA).

“We have a lot of stranded gas particularly in the deep-water that we need to put on the table. This project will enable us to have more gas for domestic consumption so that we can improve power supply and gas power to industry,” Kyari said.

However, this project draws

from Airborne Oil & Gas Company said.

According to petroleum economists, TCP is expected to gain acceptance globally because it offers a combination of high strength, flexibility and ease of termination, giving it the best qualities of conventional metal pipe (strong but rigid) and flexible pipe made from unbonded layers of helically applied metal wires and extruded thermoplastics (flexible but heavy, and very costly to terminate onsite).

attention to the abysmal performance of the West Africa Gas Pipeline Project, which has consistently performed below half its capacity. In the spirit of Economic Community of West African States (ECOWAS), four West African countries, Benin, Ghana, Nigeria and Togo in February 2000, signed an Inter-Governmental Agreement to build a gas pipeline, which will supply Nigerian natural gas on West African markets. This has not been happening.

Last month, the Republic of Benin seeking to reverse a 750-megawatt shortfall and plans to build two Independent Power Producers (IPPs), one of which is being developed by Enterprise Power, backed by the African Infrastructure Investment Managers (AIIM) and wants to use liquefied natural gas regasification to ensure supply reliability.

An independent power producer (IPP) or non-utility generator (NUG) is an entity, which is not a public utility, but which owns facilities to generate electric power for sale to utilities and end-users.

NUGs may be privately held facilities, corporations, cooperatives such as rural solar or wind energy producers, and non-energy industrial concerns capable of feeding excess energy into the system.

Enterprise Power is a Seychelles-registered energy infrastructure developer run by foundwww.businessday.ng

er and partner Nikolai Germann, who has worked on tank farms, oil jetties, pipeline networks and even bio-energy power initiatives with Addax and Oryx in Benin, Ivory Coast, Ghana, and Sierra Leone.

The WAGP was designed to pump 474 million cubic feet per day via a 20-inch diameter pipe with full compression but has never supplied even half of the contracted volumes, averaging less than 100 million cubic feet per day with throughput boosted only when Nigerian Independent Power Producers fail to pay producers that then switch gas for export if they can.

Twelve months ago, Ghana signed a 12-year deal with Russia’s Gazprom for liquefied natural gas (LNG) supply boycotting the WASP and its inefficiencies.

“The gas that will come from Russia to Ghana’s regasification plant will cost $12 per standard cubic feet (SCF). I can put gas at $3 per SCF into the West African Gas Pipeline if it was efficiently managed and with an extra cost of $2 per SCF for transportation cost I can deliver gas to Ghana at $5 per Scf less than half of what the Russian gas will cost” said Austin Avuru, chief executive officer of Seplat, an independent indigenous Nigerian oil and gas exploration and production company in an earlier BusinessDay’s report.

https://www.facebook.com/businessdayng

Mixed fortunes for Nigeria as shale producers run out of ‘sweet spots’ STEPHEN ONYEKWELU

T

he shale oil revolution that initially focused on ‘sweet spots’ with lowercost extraction is running out of steam; faces lower oil prices and lack of investor interest in financing loss-making operations for another season. Outside the sweet spots, there is oil, but it is much more costly to extract.

BusinessDay’s report of August 13 showed how last year, Nigeria lost a 540, 000 barrels per day United States of America (U.S.A) market to shale producers. Shale oil producers have also gone after Nigeria’s traditional Asian and European markets. Nigeria’s crude grades had earned the reputation of containing low sulphur making them easier to refine for petrol, but shale oil possesses this quality too.

In one of the last interviews he granted to BusinessDay’s editor and other media houses, Ibe Kachikwu, former Minister of State of Petroleum Resources stated clearly that shale oil production was a major existential threat to Nigeria’s economy.

“Shale is more of my immediate worry than electric cars.

I worry about oil prices which are beyond our control, and any country that can produce with the minimal level of cost challenges our existence automatically,” Kachikwu said.

This existential threat to Africa’s biggest oil producer may linger to arrive as the Permian Basin and shale oil production face slowing growth. U.S. shale oil output growth is slowing and nowhere is this more evident than in the Permian Basin, where growth will be under 1 percent in August according to the Washington D.C. based Energy Information Administration (EIA). @Businessdayng

The EIA estimated July Permian production reaching 4.23 million barrels per day, twice Nigeria’s daily oil production. This is an increase of 55,000 b/d (barrels per day) on June. In contrast to July, the EIA revised production downwards to 4.17 mb/d forecasting growth of just 34,000 b/d by the end of August.

Two big players in the U.S. shale industry have suggested there is trouble looming. The first said the industry has destroyed 80 percent of the capital entrusted to it since 2008. This came from a chief executive officer no longer in the industry.

The second, Scott Sheffield, pioneer CEO of Natural Resources and one of the largest players in the Permian Basin, the heart of shale oil activity said that the industry is running out of so-called Tier-1 acreage. This is oil-speak for “sweet spots.”

The shale energy revolution is now over a decade old and investors and lenders are becoming impatient for a return rather than laying out more money to compensate for high rates of oil well depletion or finance new wells.

Shale oil producers’ troubles could have served as an opportunity for Nigeria to reposition and retake lost market shares for its sweet crude. But this does not seem to be happening.

“Our oil reserves today is a thirty-year reserve so technically unless there are new serious finds so in 30 years your oil should be dwindling,” Kachikwu had said.

Gas is in 60 years. Luckily gas is seen as a clean fuel but Nigeria has shown a lack of ability to harness it quickly, put infrastructure and replicate its usage. Experts have said the current 2 mb/d is quite ridiculous and needs to move to three mb/d and the refinery programme has to be bullish as well.

34

Tuesday 20 August 2019

BUSINESS DAY

OFFGRID BUSINESS

Why FG’s programme to light up universities, general hospitals matter Stories by ISAAC ANYAOGU

T

he Energising Education Programme of the Rural ElectrificationAgency(REA) is an initiative of the Federal Government to develop offgrid, dedicated and independent power plants, as well as rehabilitating existing distribution infrastructure, to supply clean and reliable power to 37 federal universities and 7 affiliated university teaching hospitals.

The programme will in addition provide street lighting for illumination and safety, as well as training centre at each of the EEP beneficiary institutions. The project is being developed in phases – the first phase is currently under construction, which covers 9 universities and 1 affiliated teaching hospital.

Under Phase 1, seven of nine universities will be powered with electricity from solar hybrid technologies, the other two universities will receive electricity from gas fired power plants. The first 180 female STEM students in Phase 1 have commenced their EEP internship.

On August 3, vice president Yemi Osinbajo commissioned a 2.8MW solar hybrid power plant delivered under the programme at Alex Ekwueme Federal University, Ndufu Alike-Ikwo (FUNAI). The project will almost double present capac-

ity of diesel generators and lead to 8,139,208lbs annual carbon dioxide CO2 savings Benefits to the school are enormous The Energising education programme will benefit over 580,000 students and 80,401 teaching and administration staff who will now have access to uninterrupted power supply. This will lead to shutting down 860 diesel fired generators and the construction of 10,451 street lights across the campuses.

Funding for the project include

contribution from the Federal Government, to construct projects in 9 universities and 1 teaching hospitals, the World Bank will provide funding for projects in 7 universities and two teaching hospitals and the African Development Bank will bankroll projects in 8 universities.

Damilola Ogunbiyi, managing director of the REA said of the pro-

gramme, “The Energizing Economies Initiative (EEI) was launched in September 2017 to increase energy access and economic growth by providing clean, reliable and affordable power to economic clusters; such as markets, shopping complexes and agricultural/industrial clusters.

“EEI is fully private sector funded, which means the investor can only en-

sure return on investment by providing adequate power to the SMEs within these economic clusters. Each customer has a dedicated meter installed under a Pay-as-You-Go model. This private sector-led approach ensures sustainability of the programme.”

Indian firm, Sterling and Wilson Pvt. Ltd constructed solar hybrid project at Alex Ekwueme Federal University, Ndufu Alike-Ikwo (FUNAI). Other local and international players are handling projects under the scheme.

The net effects these projects will have in universities are enormous.

Students will study in more comfortable halls and medical tests and labs will function free of the deafening roar of angry generators.

However, these are not the first initiative of this kind in public institutions.

Similar projects have failed because of a dearth of maintenance culture. But unlike previous projects, the inclusion of the private businesses may help guarantee longevity for the projects.

Nigeria is signatory to the Paris Agreement which seeks to .... one way Nigeria can honour this agreement is through programmes like the EEE which will significantly decrease the country’s carbon footprint.

Alex Ekwueme Federal University, Ndufu Alike-Ikwo (FUNAI).

China is not joking about renewable energy ... Overtakes Japan and US in clean energy investments ... Solar now cheaper than grid in many Chinese cities

I

n terms of both capacity and the country’s share of global markets, China is taking the lead in wind and solar energy investments demonstrating what results to be had with strategic investments into the sector.

China’s wind power capacity soared 22-fold and solar nearly 700-fold in the decade through 2018, according to data from the International Renewable Energy Agency, or IRENA. This was the main driver behind global wind capacity quintupling and solar surging 33-fold over the same period. China accounted for about 30% of the world’s renewables last year, with the U.S. a distant second at 10%.

Renewables form a centerpiece of Chinese President Xi Jinping’s

“Made in China 2025” industrial modernization plan that seeks to

make Beijing the world leader in the high-tech sector. Since meet-

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

ing the nation’s growing energy needs with fossil fuels would exacerbate an already serious air pollution problem, the government aims to increase the total share of solar and wind in the overall power mix to nearly 30% in 2030 from less than 10% last year.

Also in hundreds of Chinese cities, solar energy is now cheaper than electricity supplied by the national grid, and it can even compete with coal-fired power in 75 of them, according to a study published in the journal Nature Energy.

Some 344 Chinese cities were found to have solar systems producing energy at lower prices than the grid, without any subsidies and this could encourage further investment in renewable energy,

the report said.

China has made huge progress in developing solar projects and pledged to invest 2.5 trillion yuan ($367 billion) in renewable power generation — solar, wind, hydro and nuclear — from 2017-2020.

Solar can also compete on price with electricity produced solely from coal in around 22% of these cities, according to the research team led by Jinyue Yan from the Royal Institute of Technology in Stockholm, Sweden.

The Belt and Road infrastructure initiative has helped power China’s renewables sector as well, giving businesses opportunities to export clean-energy technology and take on large-scale electricity projects in emerging countries.

Feedback: 07037817378, 08137433034, 08135447789

email: isaac.anyaogu@businessdayonline.com, stephen.onyekwelu@businessdayonline.com, oladehinde.oladipo@businessdayonline.com

Tuesday 20 August 2019

BUSINESS DAY

35

Live @ The Exchanges Market Statistics as at Monday 19 August 2019

Top Gainers/Losers as at Monday 19 August 2019 LOSERS

GAINERS Company

Opening

Closing

Change

N135

N138.7

3.7

MTNN

Company

Opening

Closing

Change

NESTLE

N1143

N1113.9

-29.1

CADBURY

ASI (Points) DEALS (Numbers)

STANBIC

N33

N34

1

N10.3

N9.3

-1

DANGCEM

N164

N164.5

0.5

DANGSUGAR

N9.6

N9.1

-0.5

ZENITHBANK

N16.6

N17

0.4

WAPCO

N14

N13.75

-0.25

VALUE (N billion)

DANGFLOUR

N20.65

N21

0.35

N2.6

N2.5

-0.1

MARKET CAP (N Trn)

ETERNA

27,115.89

VOLUME (Numbers)

4,116.00 250,743,761.00 4.170 13.214

Global market indicators FTSE 100 Index 7,189.65GBP +72.50+1.02%

Nikkei 225 20,563.16JPY +144.35+0.71%

S&P 500 Index 2,923.04USD +34.36+1.19%

Deutsche Boerse AG German Stock Index DAX 11,715.37EUR +152.63+1.32%

Generic 1st ‘DM’ Future 26,131.00USD +224.00+0.86%

Shanghai Stock Exchange Composite Index 2,883.10CNY +59.27+2.10%

We have to position Nigeria’s capital market to be number one in Africa – FMDQ Endurance Okafor

B

ola Onadele.

Koko, Managing Director/CEO, FMDQ Securities Exchange Plc does not think that any other African country should have financial market better than the Nigerian market.

As a result, he said “We have to position the Nigerian capital market to be number one in terms of governance, in terms of standards and in terms of transparency and we have to work on the liquidity as much as we can.”

Koko disclosed this at a recent media parley to announce an approval of the Securities and Exchange Commission (SEC) to transition FMDQ to a full-fledged ‘securities ex-

L – R: Dayo Obisan, managing director, Greenwich Asset Management Limited; Tubosun Falowo, group executive director, Greenwich Asset Management Limited; Oscar N. Onyema, chief executive officer, The Nigerian Stock Exchange (NSE); Oluremi Festus Omotoso, chairman, Greenwich Trust Limited; Ayo Teriba, non-executive director, Greenwich Asset Management Limited; Tony Uponi , non-executive director, Greenwich Asset Management Limited and Oluwatoyin Alake, head, secondary markets, NSE during the listing of the Greenwich Alpha ETF (“Greenwich Alpha”) at the NSE.

change’.

FMDQ recently secured necessary approvals for a name change to ‘FMDQ Securities Exchange Plc, thereby

aligning its name to its upgraded status in the capital market.

Also in June 2019, the Securities and Exchange Commission (SEC) reg-

Fayemi urges investors to see Ekiti State as destination of choice Iheanyi Nwachukwu

K

a y o d e Fa y e m i , Governor Ekiti State said his administration would introduce relevant policies and legislations that would help the state emerge top three states in the country in ease of doing business.

Fayemi stated this in Lagos during a “Facts Behind the State Economy” presentation at the Nigerian Stock Exchange (NSE).

He added that Ekiti State will continue to partner with the Exchange to grow the economy, while asking more companies and individuals to see Ekiti as a destination of choice for investment.

He noted that the state had a long history of partnership with NSE, adding that the bond Ekiti earlier raised had been fully repaid.

On the ease of doing business, the governor said that the State which formally

ranked 4th before he left office in 2014 later moved down to number 32.

He reassured investors that his administration was working very hard to bring it back to top three by putting in place relevant policies and legislations to improve ease of doing business.

Fayemi also the Chairman, the Nigerian Governors Forum (NGF), said that the state was also committed to creating a conducive environment for investors and businesses. He stressed the need to adopt a comprehensive response mechanism that would tackle the increasing poverty level and inequality in the society to curb insecurity in Nigeria.

He said that security in the state has improved, stating that the government wa s c o l l ab o rat i ng w i t h neighbouring states to ensure the state get rid of criminals and bandits to end the menace of kidnapping.

“We have renewed our focus on peace and security, www.businessday.ng

which is the foundation of any economic development; and started investing in developing the infrastructure required to make Ekiti State a competitive destination for business.

We are quite concerned about the increasing spate of violence against ordinary citizens and it is the duty of the government to provide security and welfare of the citizens.

“The steps we have taken since we assumed office is to work in collaboration with our neighbouring states because those things just cut across, particularly as it affects kidnapping and banditry to make the highways safe,” the governor said.

According to Feyemi, government social investment programmes need to be expanded and made more effective to create jobs for the youths.

He added that government cannot create jobs in massive terms without the collaboration of private sector.

istered its wholly owned central securities depository subsidiary – FMDQ Depository Limited – positioned to provide collateral caching, custodian and set-

tlement services.

According to the 2018 data by African Alliance, the Nigeria Stock Exchange (NSE) had a dollarised return of-20.6 percent which lagged the bourses of South Africa (25.5percent), Uganda (-17.2percent), Tanzania (-15.4percent), Egypt (-14.2percent), and Kenya (-13.5percent).

“The total non-government bond in Nigeria is not up to N1 trillion. In most countries, the percentage of debt to GDP is three digits, whereas in Nigeria it stands at a single digit, so we have not done enough penetration and leveraging on the potential of the Nigerian economy,” Koko said.

“There is no point reinventing the will, the sort of market that we see, is one where there is collaboration between the

Nigeria stock exchange and FMDQ,” Koko explained adding that “once a stock broker has a licence from the NSE, such a person will be able to trade on the FMDQ platform; we don’t need to complicate things for the operators.”

He also mentioned that stakeholders not just the Nigerian investors deserve a clearing house that will match any international standards, “so that is the sort of market we are going to work on in the next 5-15 years.”

“So there is still a lot of work to do on that debt-capital market size, but we cannot grow that debt-capital market if we do not privatise, if we don’t drive infrastructure for private capital perspective, if we do not change the commanding height we are used to in Nigeria,” Koko recommended.

Greenwich Trust lists ‘Greenwich Alpha ETF’ on NSE Iheanyi Nwachukwu

T

he Nigerian Stock Exchange (NSE) has listed on its Daily Official List, the Greenwich Alpha ETF (Greenwich Alpha) by Greenwich Asset Management Limited.

The Greenwich Alpha ETF units were listed at N100 each following an Initial Public Offer (IPO) on Monday, August 19, 2019.

Greenwich Alpha is an open-ended ETF which tracks the NSE 30 Index; an index which constitutes 30 of the most liquid and capitalized stocks trading on the Exchange. It is designed for investors to access the constituent companies of the NSE 30 index, thereby getting the performance of the index.

Speaking at the listing, Dayo Obisan, Managing Director, Green-

https://www.facebook.com/businessdayng

wich Asset Management Limited said, “The Greenwich Alpha ETF Fund is designed for and offered to investors seeking exposure to the Nigerian equities market, particularly to the constituents of the NSE30 index.”

“It offers the full benefits of diversification through a single transaction thereby reducing associated transaction cost and helping investors spread their risk. We will continue to encourage retail and institutional investment in this Fund based on its potentials,” Obisan said.

On his part, Jude Chiemeka, Head, Trading Business Division, NSE said, “We are delighted to welcome Greenwich Asset Management Limited to our growing list of ETF providers.

Globally, ETFs continue to make an impact as effective tools for ac@Businessdayng

cessing the market, diversifying investments, and serves as an alternative investment solution for intermediaries to recommend to their clients. As the leading stock exchange for listing and trading ETFs in West Africa, we will continue to lead innovation in the market as well as support the issuance of products and investment vehicles that meet the objectives of investors.”

“We operate an efficient, orderly and transparent market based on cutting edge technology, to support product development efforts for the benefit of all investors.

We remain resolute in our commitment to partnering with all market stakeholders, to continue to build and develop the Nigerian capital market, while offering a wide range of investment vehicles for all investors”, Chiemeka said.

36

Tuesday 20 August 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Tuesday 20 August 2019

BUSINESS DAY

37

news FG asks for the impossible in tax revenue...

Continued from page 2

puts the number of small and medium businesses that shut down between 2013 and 2017 at 2,877.

Many Nigerian firms have struggled between 2015 and 2018, making it hard for them to pay taxes.

“Nigerian economy was mostly down and in recession.

The small and medium enterprises suffered from shocks in the economy, forcing many to close shop,” Friday Opara, director, strategic partnership, Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), who contributed to the survey, told BusinessDay on the phone.

Findings show that most of the firms closed down between 2015 and 2017 owing to foreign exchange crisis.

Ayodele Oni, energy lawyer and partner at Bloomfield law firm, said taxes cannot rise in an economy that is not growing.

“Oil prices have been dropping and we are not attracting new investments, so naturally earnings will fall and so would taxes,” Oni said.

The Organised Private Sector (OPS) said the query issued to FIRS chairman lacks empirical basis within the context of the Nigerian economy.

According to the business community, only a government with unrealistic expectations would expect higher tax revenues from an economy still on its knees.

Timothy Olawale, directorgeneral of Nigeria Employers’ Consultative Association (NECA), a member of the OPS, said companies’ profits over the last four years have been on a downward trend and “this should be expected to reflect on taxes paid to the government’s coffers”.

He explained that over time, the employers of labour in Nigeria have lamented the challenges bedevilling businesses without anyone paying attention.

“We had also cited dwindled taxation revenue as natural outcome of the problem.

The consequences are beginning to manifest. Considering the forgoing, there is really no basis for vilifying the FIRS chairman except he is expected to operate outside the provision of the tax laws,” he added.

The DG of NECA noted that government will do well by improving the enabling environment for businesses to thrive so they can continue to contribute their quota to national development, which includes higher tax revenue to government’s coffers and improved employment generation.

“The querying of the FIRS chairman seems controversial considering the factors for which he was queried as well as the timing of such query. He is in line for a second term and this could be a possible move to discredit him, thus preventing him from returning to office,” said Ayorinde Akinloye, a Lagos-based research analyst.

Wole Obayomi, partner

and head of tax at KPMG, said tax collection is a function of economic activity and profit which companies make.

“I do not think it is a fair comment to compare the dollar yield of the tax collections because we are talking about two different exchange rate regimes,” Obayomi said.

“During one period you had a naira/dollar exchange rate of N152 and at the other, which is since the last three or four years, you have had an exchange rate of over N305.

So they are probably comparing apples with oranges. Even if you had the same naira amount, the dollar yield will be different for the reason given earlier. In fact, given the performance of the current leadership of FIRS, you can say they have tried in this regard,” he added.

He further explained that the government may have accused Fowler of not being frugal.

Periods of slow economic activity tend to reflect in lower taxes. The South African Revenue Service (SARS), for instance, has experienced two successive years of tax shortfalls: R30-billion in 2016/17 and R49-billion in 2017/2018.

The South African government admitted that the tax shortfalls were due to a struggling economy.

In 2018, the oil sector contributed N2.467 trillion to the share of taxes collected by the FIRS which represents 46.38 percent of the taxes collected in the period.

Though Nigeria’s oil sector accounts for less than 10 percent of the GDP, it contributes 90 percent of Nigeria’s export income and 70 percent of government revenue.

However, the sector is troubled by militancy which leads to the destruction of oil and gas assets and discourages investments. The Nigerian National Petroleum Corporation said it spent over N125bn in one year as repair cost.

According to the NNPC, product theft and vandalism have continued to destroy value and puts the corporation at a disadvantaged competitive position. In the last one year, a total of 2,278 vandalised points have been recorded across various pipelines running through Nigeria.

Oil companies are fleeing onshore areas to deep offshore abandoning fields that would have been producing and earning huge revenues the government can tax.

The Federal Government has been unable to provide enabling environment due to its inability to pass the Petroleum Industry Bill which the Nigerian Extractive Industries Transparency Initiative (NEITI) estimates constrains over $15 billion in new investments.

Hence oil companies are recording poorer earnings which limit how much contribution they make. For example, the Nigerian Liquefied Natural Gas (NLNG) paid $2.1 billion as income tax in 2015 but this fell to $323,273,784.39 in 2016 after the economy slipped into a www.businessday.ng

L-R: Idris Lawal, member of House of Representatives; Aliyu Magaji, chairman, House of Representatives committee on power; Folashade Ayoade, secretary to the state government/representative of Kogi State governor; Damilola Ogunbiyi, managing director/CEO, Rural Electrification Agency, and Yakubu Oseni, senator, representing Kogi Central/representative of Senate president, during the commissioning of 80KWp Solar Hybrid Mini Grid, a Federal Government initiative under Rural Electrification Fund at Upake Community, Ajaokuta Local Government Area, Kogi State, yesterday.

recession. It recovered slightly to $606,668,750 in 2017.

Oil major Shell also saw a dip in its payments to the Nigeria government from $1.18bn in 2016; tax payments fell to $765.526m in 2017 and recovered in 2018 to $1.2 billion.

In August 2016, the Manufacturers Association of Nigeria (MAN) and the NOI Polls reported that 222 small-scale businesses closed shops, leading to 180,000 job losses.

The pharmaceutical industry is replete with firms that are merely struggling to stay afloat. Evans Medical and Swiss Pharma Pharma went under in 2017 due to financial crisis. These firms could not compete despite obtaining the World Health Organisation (WHO)’s prequalification needed for international competition. In 2014, companies like Emzor, GSK, and a number of others earned $7.708 million from export of medicines to the African market, according to the International Trade Centre (ITC). Four years later, however, the companies made only $708,000.

Neimeth International Pharmaceuticals plc made a loss of N139.2 million for the fourth quarter of 2018.

It later posted only N5.45 million profit after tax in the second quarter of 2019. The Agbara, Ogun State-based Pharma Deko suffered 36 percent drop in revenue in 2018, from N1.593 billion in December 2017 to N1.023 billion in 2018. It suffered loss after tax of N265.26 million.

Grif, Federated Steel, and Universal Steel have also exited the Nigerian market in the last three years because they could not import annealed cold-rolled steel (their inputs) due to FX restriction on the product.

Okomu recorded losses in the first half of 2019 as its turnover declined by 34 percent from N12.9 billion in 2018 to 8.5 billion in 2019. This is a reflection of the state of the industry. PZ Cussons is also struggling.

Members of MAN said they

could not sell products worth N375.42 billion in 2018 and N321.12 billion in 2017.

“High inventory of unsold finished manufactured goods in the period was ascribed low consumption, smuggling, and counterfeiting of Nigerian manufactured products,” MAN said in its Economic Review in the second half of 2018.

Nigeria fully embraced a system of automatic exchange of data where financial data of citizens are easily accessible and made tax evaders have nowhere to hide. The tax amnesty – Voluntary Asset and Income Declaration Scheme (VAIDS) – which took off on July 1, 2017 enabled taxable Nigerians to declare their assets and incomes and get certain waivers, including penalties and interest payments. The scheme had covered the whole gamut of taxes, and given Nigerians the opportunity to regularise their tax affairs.

The FIRS, which moved towards digitalisation of tax operations and increasing the agency’s human capital, had set a wishful target of increasing Nigeria’s tax-to-GPD ratio to 16 percent.

In 2018, the Federal Inland Revenue Services (FIRS) in line with improving the ease of doing business in Nigeria upgraded its online platform to perform a wider range of services to taxpayers. Some of the e-Services accessible online include taxpayer registration, payment of taxes, application for tax clearance, filing of taxes, etc.

The FIRS revenue collection statistics show that in 2015 it failed to meet set target of N4.7 trillion by N800 million as only N3.7 trillion was the actual collection.

In 2016, the target collection was N4.2 trillion but actual was N3.3 trillion, representing a shortfall of N900 million. In 2017, FIRS targeted N4.8 trillion but the actual collection was N4 trillion, which represented an unmet target of N800 million. Also, in 2018, despite a target of N6.7 trillion set, only N5.3 trillion was ac-

https://www.facebook.com/businessdayng

tual collection representing a shortfall of N1.4 trillion.

In 2018, PPT and Royalties amounted to N2.8 trillion, 53 percent of the N5.3 trillion collected for the year, according to data compiled from the FIRS. PPT and Royalties have largely mirrored oil prices over time, with the trend being that collections tend to be higher when oil prices are high and vice-versa.

Being the dominant contributor to total tax revenue, strong PPT collections often fed into total tax take.

When BusinessDay calculated the tax receipts in dollar terms using the prevailing exchange rate at the time, it revealed the relationship between oil prices and taxes.

In 2012, when oil prices were over $100 per barrel, total tax take came to $32.2 billion.

Oil prices have endured a volatile ride since then and have been consistently lower than the 2012 price, helping to explain why taxes have been lower since then.

In 2013, total tax collected was $31 billion, while in 2014 and 2015, it was $18.3 billion and $19.4 billion.

In 2016, when oil prices tanked to a decade-low, tax revenue came to $13.01 billion, the lowest between the 2012 and 2018 period under review.

When oil prices recovered in 2017, so did tax collection which increased to $13.2 billion. In 2018, total tax revenue was $17.4 billion, also in line with higher oil prices in that period.

Taiwo Oyedele, a partner and head of tax at PWC, confirmed the relationship between oil and taxes.

“That is why the highest revenue in dollar terms was in 2012 when the price of crude oil was around $100 per barrel.

Meanwhile, CIT and VAT have been negatively impacted by weak economic activity which has translated to lower company profits and weak household consumption,” Oyedele added.

CIT & VAT collections in @Businessdayng

2018 amounted to N2.3 trillion, 43 percent of the total tax receipts. Before 2015, FIRS had not only met its yearly target revenue, but was also able to surpass. Further check shows that in 2007, it targeted N1.75 trillion but actual revenue was N1.84 trillion. In 2008, it targeted N2.27 trillion while N2.972 trillion was actually collected.

In 2009, the FIRS set target revenue of N1.90 trillion while the actual collection was N2.19 trillion. Also, in 2010, despite setting a target of N2.55 trillion, the FIRS recorded actual collection of N2.83 trillion.

In 2011, the FIRS set target of N3.63 trillion but the actual collection reached N4.628 trillion. Likewise, in 2012, despite N3.63 trillion target, the revenue agency collected N5.007 trillion; in 2013, it set N4.468 trillion target but collected N4.805 trillion; while in 2014, it surpassed the N4.086 trillion set target with a record actual collection of N4.714 trillion.

The Federal Ministry of Finance initiated the VAIDS, which led to a record high of N5.32 trillion remitted from tax as revenues in 2018. Despite missing its target of N6.7 trillion, the revenue generated is so far the highest in the country’s history.

The FIRS revenue target of N8 trillion may push the tax authority to devise various means possible in its tax generation drive.

This can be confirmed by the regulator’s recent action as it commenced sending out letters to banks appointing them as tax collection agents for taxes considered payable by their named customers.

In order to achieve this, the FIRS directed the relevant banks to place lien on accounts of businesses, corporate organisations and partnerships with an annual banking turnover in excess of N1 billion, but without tax identification, to prevent them from drawing funds from the accounts until the taxes have Continues on page 38

38

Tuesday 20 August 2019

BUSINESS DAY

news How Nigeria got into $9bn...

Continued from page 1

present one.

Omokri has, however, refuted the allegation, blaming instead an “unelected cabal” that took advantage of late President Umaru Musa Yar’Adua’s ill health in 2010 to strike shady deals on behalf of the Federal Government.

Members of that cabal, he claims, are also inside President Buhari’s present administration. He went on to name the late President Yar’Adua’s minister for petroleum, also late, Rilwanu Lukman, as the man who packaged and arranged the signing of the contract with P&ID. “The transaction occurred in January of 2010, and President Jonathan was not President in January 2010. During that time, he was completely shut out of power by an unelected cabal that ran Nigeria during the period of the ill health of the late President Yar’Adua, before the National Assembly courageously intervened on February 9, 2010,” Omokri said.

“That cabal not only fought against the ascension of then Vice President Jonathan to the office of acting President, but went beyond that to take documents, including budgets and contracts, to Saudi Arabia, and claimed that the then ailing President Umaru Musa Yar’Adua had signed them,” he said.

“Nigerians may recall that the cabal announced on December 28, 2009 that the ailing President Yar’Adua had signed a supplementary budget and other documents from his sickbed in Saudi Arabia, without the foreknowledge or acquiescence of then Vice President Jonathan or the Executive Council of the Federation,” he further said.

He said Lukman and other members of the cabal treated then Vice President Jonathan with disdain and kept him in the dark about their actions because he had no executive authority, as the then President was unable to hand over to him as constitutionally stipulated due to the suddenness of his ill health.

Omokri explained that the same cabal has resurrected and has now coalesced around President Buhari, with some of them being made either ministers, or formal and informal advisers.

“As a matter of fact, the main man behind that cabal is now one of the closest persons to General Buhari.

Nigerians may want to note that while this controversial contract was signed in January of 2010, former President Jonathan only became acting President on February 9, 2010,” he said.

“So, if the Buhari administration is looking for someone to blame for this judgment against Nigeria, it should look at its own cabal,” he added.

Meanwhile, Godwin Emefiele, governor of the Central Bank of Nigeria (CBN), said on Monday that the Federal Government is making moves to stop execution of the judgment ordering Nigeria to pay $9 billion to P&ID.

“I am not scared at all.

Since the news about the judgment broke late on Friday, we have been discussing with our counsels, and they have advised that there are sufficient and strong grounds on the basis of which we could file a stay of execution and also an appeal against that judgment,” Emefiele told journalists on the sidelines of the ongoing Presidential Retreat for newly appointed ministers at the Presidential Villa, Abuja.

He pointed out that “there are certain anomalies in the process leading to the award of that contract”, adding that the issues were already being investigated by the Economic and Financial Crimes Commission (EFCC).

“I believe that the EFCC itself has its own investigation reports about that. So, we will follow through and aggressively too on ensuring that the execution of that judgment is stayed and that the appeal succeeds at every level both within Nigeria and abroad,” he said.

Emefiele used the opportunity to assure friends of Nigeria, both local and foreign investors, that there was no need to worry.

“We know the implication of that judgment, that it has some impact on monetary policy, and that is why the CBN is going to step forward and very strongly too to ensure that we defend the country and defend the reserves of the Federal Republic of Nigeria,” he said.

On President Muhammadu Buhari’s directive to the CBN to stop forex to people who import food items into the country, which has generated a lot of backlash, Emefiele said the policy has been part of the logic of the apex bank’s management of foreign exchange policies that started since 2016.

“If you recall, we started with about 41 items (food and non-food items), because we believe that those items can be produced in the country.

As we stand today, there are about 43 items on that list and I will say substantially most of them are food items,” he said.

“We are basically saying, if we have a food item that can be produced in the country, why should we waste scare foreign exchange importing those items into the country when those can be produced in the country?” he added.

He, however, regretted what he described as attempt to misrepresent the comments of Mr. President on the issue, saying it was unfair and unfortunate.

“What we will say from the CBN is that Mr. President has made this comment purely to strengthen the position of the CBN, to say that he believes in what the CBN has been doing since 2016 and there is need for us to reinforce that going forward. I will say that to be honest, we would aggressively go more into the list of items that are being imported into the country, items that can be produced in Nigeria,” he said.

•Continues online at www.businessday.ng www.businessday.ng

L-R: Feyi Olubodun, managing partner, Open Squares Africa; Aramide Abe, founder/CEO, Naija Startups; Gbogboade Temitope, participant; Okosieme Anthony, participant, and Seni Sulyman, vice president, global operations, Andela, at the opening of 2019 BusinessDay CEO Apprentice Entrepreneurship Programme for Teenagers in Lagos, yesterday.

Pic by David Apara

FG asks for the impossible in tax revenue...

Continued from page 37 been fully settled.

Prior to 2018, the highest revenue figure ever attained

by FIRS was N5.07 trillion, in 2012, when oil price hovered around $100-$120 per barrel, but now remarkable, given that it was achieved at a period when oil prices averaged $70 per barrel.

Meanwhile, Nigeria emerged from its first recession in 25 years, largely caused by low oil prices and militant attacks on energy facilities, in the second quarter of 2017.

The nation’s GDP grew by 1.93 percent for the full year 2018, compared to its 0.82 percent in rate in 2017, data by the National Bureau of Statistics (NBS) show.

In the last two years, Nigeria’s tax environment has witnessed significant change and the sluggish rate at which the economy is growing, at 2.01 percent in the first quarter of 2019, has increased the pressures on companies who are now looking for ways to reduce cost. The regulator, on the other hand, is now forced to aggressively enhance revenue.

Thus, taxation, more than ever before, has now become an issue to companies, heads of tax and financial heads as they are left with the burden to make critical changes that will strengthen profitability and risk management.

Nigeria recorded an increase in its 2018 tax activities both from the side of the regulators and corporates. The events were driven largely by the country’s quest to generate revenue to meet its budget deficit.

The drive for a high tax revenue in the review year led to the extension date of the Voluntary Assets and Income Declaration Scheme (VAIDS) from the initial stated March 31 deadline to June 30, 2018.

Other key tax and revenue highlights were the introduction of the Voluntary Offshore Assets Regularisation Scheme (VOARS), the release of the revised Income Tax (Transfer

Pricing) Regulations 2018 (the Regulations), amongst other major activities in the year.

The efforts by the government to drive revenue through tax resulted to the all-time high tax revenue collection of N5.32 trillion in 2018, out of which Value Added Tax (VAT) stood at N1.11 trillion for the first time.

Nigeria’s tax-to-GDP ratio is relatively lower when compared to other developing economies like Ghana with 17.6 percent ratio and Kenya’s 18.5 percent and is also lower than the average for the 21 African countries in Revenue Statistics which is 18.2 percent, as compiled from the Organisation for Economic Co-operation and Development (OECD), an intergovernmental economic organisation with 36 member countries Last year, President Buhari signed an Executive Order (EO 008) on VOARS mandating Nigerian taxpayers who hold offshore assets and incomes to voluntarily declare those assets and incomes within a period of 12 months, and pay income tax on them. The Executive Order became effective from Monday October 8, 2018.

Based on the Order, affected taxpayers who truthfully and voluntarily complied with the conditions of the Scheme were expected to be granted immunity from prosecution after paying either a one-time levy of 35 percent on their total offshore assets, or the outstanding taxes, penalties and interest determined based on a forensic audit of such assets and income.

Defaulting Nigerian taxpayers who failed to take advantage of the Scheme were to undergo investigation and enforcement procedures concerning offshore assets held by them upon the expiration of the Scheme. This was to be based on information obtained by the government through automatic exchange of information between Nigeria and foreign countries where the assets are located.

https://www.facebook.com/businessdayng

Cargo congestion worsens at Apapa...

Continued from page 1

problem started, now you will be forced to pay close to N375,000,” he lamented.

Checks by BusinessDay show that there is a growing delay in getting goods to and from the ports, especially after the two-day work-free holiday last week for the celebration of Sallah.

Jonathan Nicol, president, Shippers Association Nigeria, Lagos State branch, said the problem of delay experienced at the ports is caused by a large number of empty containers as shipping companies who are the terminal operators have not found a solution for the empty containers.

“So right now, the government is looking for holding bay for them to offload the empty containers which in most cases are filled up, they don’t belong to us but to the shipping and terminal operators,” he said.

Abubakar Yusuf, CEO, NAKA Associates Limited, said activities at the nation’s busiest port are getting worse daily. This, he said, has been further compounded by the strike embarked upon by maritime workers.

“The Sallah holidays caused traffic of ships com-

ing to berth in Nigeria. Some were delayed on the high seas, some on Nigerian shores that could not berth,” he said.

Abubakar further noted that the bigger problem is corruption at the ports and inefficiency of its workers.

“The workers are not disciplined, they resume work late, they don’t go to work, and they are not always on their duty post. The regulator, which is the National Shippers Council, is not performing its role, like periodically checking on the ports due to corruption,” he said.

Apapa, a port city with N20bn a day economy, is today as good as ‘dead’, which has seen its property value on a free-fall in both residential and commercial value, while many businesses have been forced to close down throwing many of their workers back into the labour market.

Abubakar said the implications of continued delays include loss of revenue, and crippling of businesses on the part of some that collected loans.

“You would see some perishable food items getting spoilt before they are shipped, as they spend 10 days on the road before getting into the ports,” he added.

MTN is Nigeria’s largest listed ...

Continued from page 2

MSCI Index, the company rewarded its shareholders with an interim dividend of N2.95 per share for the halfyear period ended June 2019.

This came after a 34.79 percent growth in after-tax profit to N98.9 billion for the period on a year-onyear basis. Revenue rose by 12.1 percent from the same period in 2018 to N566.9 billion driven by a more robust customer base and increases in voice, data, Fintech, and @Businessdayng

digital revenue.

Voice revenue grew by 11.4 percent from the previous period in 2018; Data revenue surged 31.7 percent; fintech revenue, 21.2 percent; while digital revenue increased by 64.5 percent.

“We added 3.3 million customers to our network, increasing our subscriber base to 61.5 million,” Ferdi Moolman, MTN Nigeria CEO, stated while reacting to the firm’s half-year financial performance.

•Continues online at www.businessday.ng

Tuesday 20 August 2019

BUSINESS DAY

39

news

Fowler not under Sahel holds scholars’ conferences in four universities investigation - Presidency Tony Ailemen, Abuja

P

residency on Monday denied that the chairman of the Federal Inland Revenue Service (FIRS), Babatunde Fowler, was undergoing investigation.

A statement by the Senior Special Assistant to the President on Media and Publicity, Garba Shehu, said reports making the rounds in some media outlets do not represent the truth.

According to the statement, Shehu said government taking a cue from yesterday’s (Monday) presentation of Vice President Yemi Osinbajo at the Presidential Retreat for MinistersDesignate, Federal Permanent Secretaries and Top Government Functionaries, which dwelt on an ‘Overview of the Policies, Programmes and Project Audit Committee,’ a body he chaired, projected shortfalls in government revenue behind recurrent expenditure even without having factored in capital expenditure.

“Consequently, it would appear that the country might be heading for a fiscal crisis if urgent steps are not taken to

halt the negative trends in target setting and target realisation in tax revenue.

“Government said it has therefore become necessary to state categorically that the Chairman of the Federal Inland Revenue Service, Babatunde Fowler, is not under any investigation.

“Presidency noted that the letter from the Chief of Staff to the President, Abba Kyari, on which the purported rumour of an investigation is based, merely raises concerns over the negative run of the tax revenue collection in recent times.

“Anyone conversant with Federal Executive Council deliberations would have observed that issues bordering on revenue form the number one concern of what Nigeria faces today, and therefore, often take a prime place in discussions of the body,” the state noted.

It is however noteworthy and highly commendable that under this administration, the number of taxable adults has increased from 10 million to 20 million with concerted efforts still ongoing to bring a lot more into the tax net, it stated.

S

ahel has extended scholars programme it began at three Nigerian universities last year to a further five Nigerian universities in 2019, namely, Michael Okpara University of Agriculture, Umudike (MOUAU), Afe Babalola University, Ado-Ekiti (ABUAD), Federal University of Agriculture, Abeokuta (FUNAAB), Ahmadu Bello University, Zaria (ABU), and Obafemi Awolowo University, Ile-Ife (OAU).

Sahel Consulting’s managing partner Ndidi Nwuneli said the firm partnered the Faculties of Agriculture in the five universities to organise SASP agribusiness conferences and engage top performing students in their penultimate year for internship, mentorship and scholarship awards.

The SASP conference was themed ‘Feeding Millions, Making Billions: the Opportunities for an Agripreneur’,

and focused on sharing deep insights about the opportunities that exist in agribusiness, leveraging the success stories of agripreneurs in the landscape to inspire the students, highlighting the gaps that exist in the sector and the potential roles of youth across the value chain.

The conferences were held in MOUAU, FUNAAB, ABU, and OAU. Students in ABUAD were invited to participate at the conference in OAU. Professors in the Faculties of Agriculture in the schools and key players in the agribusiness landscape participated in the conferences.

Sahel reached over 1,200 students, engaged over 25 professors and lecturers, and hosted five guest speakers during the SASP conferences.

The guest speakers were Tomiwa Ogunmodede, head of Marketing at FarmCrowdy Nigeria; Idi Mukhtar Maiha, CEO of Zaidi Farms Limited; Sadiq Abubakar Falalu,

CEO of FaLGates; Godwin Umeaka, CEO of Coscharis Farms; Samson Ogbole, cofounder of PS Nutrac.

The invited agribusiness industry players shared deep insights on their experiences in agriculture and highlighted the opportunities that exist for students in the agricultural sector.

The Sahel team shared industry knowledge and facilitated panel discussions on key strategies critical to transforming the educational system in Nigerian Universities to inspire and equip undergraduates with the right skills to become successful players in the industry. In addition, young professionals at Sahel who are OAU and ABU alumni shared their Sahel experiences with the students.

The Universities were thrilled about the impact of the conferences and the depth of knowledge shared with the students.

Professor Udo Herbert,

the Dean of Post Graduate School, during his speech in MOUAU, appreciated Sahel for according the students the opportunity to participate in an agribusiness conference, he explained that the SASP conference was the first of its kind in the University and it was a gift to the students.

The students were inspired as they engaged the SASP team with agribusinessrelated questions, discussed their perception of the agriculture sector and shared their challenges as undergraduates in the Faculty of Agriculture. Sahel also held on-campus interviews with the students shortlisted for internship and scholarships.

It was a worthwhile experience for the participants, the guest speakers and for Sahel.

In the coming weeks, selected scholars will be invited to Sahel’s head office in Lagos for their one-month internship, mentorship and scholarship programme.

Kwara to send social investment bill to Assembly ...Patigi Rice mill to be revived SIKIRAT SHEHU

A

bill to replicate the Federal Government’s antipoverty Social Investment Programmes in Kwara State will be sent to the Kwara State House of Assembly in the coming days, Governor AbdulRahman AbdulRazaq said on Monday.

AbdulRazaq said this when he visited the Agricultural and Rural Management Training Institute (ARMTI) at Jimba-Oja, in Ifelodun Local Government Area of the state, adding that the legislation would domesticate the Federal Government’s TraderMoni and school feeding concepts in Kwara for the benefit of the poor in the state.

“The thrust of the administration is to lift our people from poverty line and how to go about it is through agriculture.

We have a goldmine in ARMTI and we will take full advantage of your resources.

“Empowerment must be from the communities and I can assure you that we’ll engage you because this week or so we are sending a Bill to the State House of Assembly to replicate the federal government’s social investment programme in Kwara,” he said.

He said the administration would also key into the Village Alive Development Initiatives (VADI) of AMRTI to empower Kwara youths and deepen participation in agriculture.

Sahel holds one-day Scholars’ Conferences in four Nigerian Universities: Michael Okpara University of Agriculture, Umudike (MOUAU); Federal University of Agriculture, Abeokuta (FUNAAB); Ahmadu Bello University, Zaria (ABU), and Obafemi Awolowo University, Ile-Ife (OAU), in July and August 2019.

Presidency denies knowledge of Soldiers’ invasion: Court orders CBN to pay Benue communities N8bn Oyo-Ita’s alleged retirement SEGUN ADAMS

T

he Presidency on Monday denied knowledge of Winifred Oya-Ita’s supposed retirement from service, stating that it had not received any letter of retirement from the Head of Civil Service of the Federation.

“We have no such letter here, in the event that such a letter exists. This is our position,” Garba Shehu, senior special assistant to the president on media and publicity, reportedly said.

Oyo-Ita, who was absent at the opening ceremony of the 2019 Presidential Retreat for ministers-designate and top government officials in Abuja, is under watch by the Economic and Financial Crimes Commission (EFCC) alongside two Federal Permanent Secretaries

and three Directors of Finance for alleged involvement in a N3 billion contract rip-off.

The allegations border on bribery, money laundering and the use of shell companies in securing contracts before her appointment as acting head of service in 2015.

The embattled Service Head has denied any wrongdoing but reports say the EFCC has linked part of the stolen funds to persons close to her. In addition, the officers interrogated by the anti-graft agency have been said to have hard evidence to corroborate their testimony of Oyo-Ita’s involvement.

Since interrogation by the EFCC on Tuesday last week, the Service Head has been checked into a hospital in Abuja, where she is closely watched by the antigraft agency. www.businessday.ng

Felix Omohomhion, Abuja

A

n Abuja Federal High Court on Monday ordered the Central Bank of Nigeria (CBN) to pay N8 billion awarded in favour of some Tiv communities over soldiers’ invasion of the communities in 2015.

The order was in respect of a judgment debt awarded against the Federal Government in 2002.

Before now, a High Court and the Court of Appeal in Mukurdi, Benue State, and Enugu, had entered judgment in favour of the plaintiffs but the government failed to comply with the decision of the courts, resulting in the garnishee order.

No fewer than 14 persons suffered various degrees of losses during the military attack, and had applied to the court to enforce the consent judgment delivered by the Court of Appeal in

Enugu on February 2, 2015.

The plaintiffs include Alexander Gaadi, Peter Orngu, Terfa Akaagba, Anongo Unishigh, Ngunengen Adula, Demelu Adula, Zaki Mazan, Mbakesen Ayatse, Mbayemen Maswuan, Anande Agashia, Azenda Igo, Elizabeth Aoughakaa, and Andrew Juntu.

The affected communities spread across Logo, Ukum, Kwande and Katsina-Ala Local Government areas of Benue.

In his ruling on the garnishee application Monday, Justice Inyang Ekwo held that there was nothing standing as impediment to the payment of the N8 billion since the respondents had consented to it at the Court of Appeal.

According to Justice Ekwo, since the judgment debtors/ appellants entered into terms entered by the Court of Appeal in

https://www.facebook.com/businessdayng

appeal number CA/E/410/2008 as judgment of February 2, 2015, it was a clear and unambiguous expression and readiness of the judgment debtors to pay the sum agreed therein to the ganishors.

“Upon studying the averments in the six-paragraph affidavit to show cause deposed to on March 28, 2017 by one Huseini Sani Kagai, and three-paragraph further affidavit showing cause deposd to on May 8, 2017, by the same Huseini Sani Kagai, I am unable to see any contrary issue or impediment established by the garnishee that would constitute a cause shown by the garnishee why the order nisi these proceedings ought not to be made absolute and I so hold.”

The judge subsequently ordered the garnishee (CBN) “to pay the garnishee sum into an interest-yielding account to be opened and maintained by the @Businessdayng

Chief Registrar of this court in First Bank of Nigeria plc.

“The order authorising the disbursement of the money shall be made upon being satisfied with the terms of disbursement including the legal fees jointly singed by Ocha Ulegede, Esq, and J.K Gadzama, SAN, for the ganishors and endorsed by first class chiefs of Jukun, Logo, Kwande, Katsina-Ala local government areas on behalf of the Tiv Traditional Council.”

The judge added that he would subsequently make an order for the disbursement of the money after the CBN complies with the order for the payment.

The plaintiffs in two separate suits instituted urged the court to declare the use of the Army as genocidal, and the continued occupation of their communities by the soldiers as undemocratic and unconstitutional.

40

Tuesday 20 August 2019

BUSINESS DAY

news Ndi-Igbo Germany apologises to Ekweremadu, calls for Igbo unity SEGUN ADAMS

N

Babajide Sanwo-Olu, governor, Lagos State (m), his deputy Obafemi Hamzat (5th l); Olorunkemi Durosinmi-Etti, newly appointed permanent secretary, Cabinet Office (5th r), and her colleagues, during the swearing-in ceremony of nine permanent secretaries, at Lagos House, Alausa, Ikeja, yesterday.

Nigeria grows oil reserves by 300,000 barrels in 10 years Olusola Bello

N

igeria has not added more than 300,000 barrelsprovenoilreservesina little over 10 years, the latest British Petroleum statistics have shown.

Thisisconsideredabysmalbyoil industryoperatorsgivingthefactthat thereserveisbeingdepletedconsistently without commensurate addition to replace the one taken out.

Lackofinvestmenthasmadeit impossible for the country to grow its reserve to 40 billion barrels, which is its target for 2020.

According to the statistics, apart from the period between 1998 and 2008, when it recorded a phenomenal rise in crude oil reserve that rose from 22.5 billion to 37.2 billion barrels, the country has since experienced serious depletion of her reserve with a daily average production of 2 million barrels per day for export.

Nigeriahasthesecond-largest proven reserves in Africa, with an estimated 37.5 billion barrels of crude oil deposits at the end of 2017, representing 2.2 percent of the global total, according to the BP Statistical Review of World Energy 2018.

Between 2008 and 2018, there was just an increment of 300,000 barrels. Even though government officialsconsistentlymaintain37.5 billion barrels, a lot more people believe that the figure may not be a true situation of thing as in most cases, even the figure from government agenciessuchasDepartmentofPetroleumResources and the Nigerian National Petroleum Corporation (NNPC) often conflicts with each other.

According to OPEC 2019 Annual Statistical Bulletin, the nation’s crude oil reserves dropped by 481 million barrels to 36.972 billion barrels in 2018.

BDCs prepare for FATF team assessment visit to Nigeria HOPE MOSES-ASHIKE

B

ureaux de Change (BDC) operators are preparing for the annual evaluation of the Financial Action Task Force (FATF) team visit to Nigeria.

Aminu Gwadabe, president, Association of Bureaux De Change Operators of Nigeria (ABCON), who spoke with financial journalists ahead of the FATF visit, said the BDCs were getting ready to receive the FATF team.

He said ABCON, in collaboration with the Central Bank of Nigeria (CBN), was organising a sensitisation workshop for over 4,500 licensed BDCs in the country.

He said the workshop, which will hold in the six geopolitical zones across the country, would take off in the next one week, saying the

BDCs would be trained on the obligation of registering and filling reports on the NFIU goAML-Anti-Money Laundering portal.

The anti-money laundering training is intended to familiarise BDC operators with the process of money laundering — the criminal business used to disguise the true origin and ownership of illegal cash — and the laws that make it a crime, he said.

He said money laundering and terrorist financing pose not only a threat, but also were enormous threats and challenges to the economy, security, and social life in Nigeria, the region and globally.

He said the training was also meant to help BDCs maintain minimum standard of record keeping and increasing level of investors’ confidence for the economy.

The organisation says in the Annual Statistical Bulletin that Nigeria’s crude oil reserves stood at 37.453 billion barrels in 2017 and 2016; 37.062 billion barrels in 2015 and 37.448 billion barrels in 2014.

The number of active oil rigs in the country rose to 32 last year from 13 in 2017 and nine in 2016, but following the steep fall in global oil prices in 2014, the nation’s rig count dropped from 46 to 29, the OPEC data show.

ButToyinAkinosho,publisher of Africa Oil and Gas Report, says he does not believe in British Petroleum report, as that may not be the true reflection of things, as most oil companies in the course of drilling discovered more oil and increase their reserves.

He says many of the companies operating in the country have increased their reserves beyond whattheymetwhentheyinitialsecured the fields but that BP report

may not capture such increment.

The slump in oil prices, which started in mid-June 2014, forced many companies operating in the Nigerian oil industry to slash theircapitalbudgetsandsuspend some projects, resulting in a drop in the number of rigs.

The number of active oil rigs in the country rose to 32 last year from 13 in 2017 and nine in 2016, but following the steep fall in global oil prices in 2014, the nation’srigcountdroppedfrom46to 29, the OPEC data showed.

The upturn in the rig count in 2018 was mostly triggered by the rally in global crude oil prices and the suspension of militant attacks on oil facilities in the Niger Delta.

The number of wells completed in the nation’s oil industry, which dropped from 141 in 2014 to 116 in 2015, increased to 81 last year from 76 in 2017 and 2016, according to OPEC.

CSR-in-Action partners Access Bank to host 9th C-PET workshop ISRAEL ODUBOLA

A

ccess Bank, in conjunction with CSR-in-Action’s College of Sustainable Citizenship, has concluded plans to host the 9th Civil Society Organisation Professionalism, Effectiveness and Therapy (CSO-CPET) workshop. The biannual programme is slated for August 21, 2019, at the Access Bank head office in Victoria Island, Lagos.

The workshop themed: ‘Governance and Decision-Making’ will feature participants from different civil society organisations and non-profits numbering over 50, while Soji Apampa and Oluseyi Oyebisi will be the facilitators for the training.

Apampa is founder and consultant executive director of convention on business integrity. His areas of expertise cut across corporate governance, political economy analysis and

www.businessday.ng

Anti-Corruption Research, while Seyi Oyebisi is the coordinator, UNICEF Rural Voices of Youth.

He is a civil society strengthening and development expert.

Speaking on the upcoming training, Bekeme Masade-Olowola, chief executive, CSR-in-Action, stated, “Good governance is at the heart of any successful organisation as it is essential for a company or organisation to achieve its objectives, drive improvement, and maintain successful relations.

“Governance in decisionmaking is not an exclusive concern for large companies, but for any business or organisation of any shape and size including civil society organisations because it can be a deal maker or breaker. It is for this reason that we commend our partners, Access Bank, for their longstanding commitment to supporting the C-PET project and advancing sustainable development.’’

https://www.facebook.com/businessdayng

di-Igbo Germany (NIG), the umbrella/apex union of all Igbo unions operating in the Federal Republic of Germany, has tendered an unequivocal apology to former deputy Senate president, Ike Ekweremadu, over the attack on him by members of the Indigenous People of Biafra (IPOB) in Germany at the weekend.

The group distanced itself from any group that encourages violence, directly or indirectly, and called for unity of all Igbos worldwide.

In a press release on Monday signed by Oge Ozofor, its coordinator, Ndi Igbo Germany condemned in strongest terms the action by the members of IPOB in Germany, describing the attack as “unprovoked, unwarranted and senseless” and unreflective of the true Igbo spirit.

“We, Ndi-Igbo Germany, wish to offer our unequivocal apology to our special guest of honour, Senator Ike Ekweremadu, former deputy senate president, for the unfortunate treatment misdirected at him by members of IPOB,” the group said.

Ndi Igbo Germany also apologised to Ohanaeze Ndi Igbo and all well-meaning Igbo-Diasporan groups and associations, both at home and abroad, for the “disgrace,” and extended its regret to the National Assembly and Nigeria in general.

The group said it was in a bid to encourage foreign investment and industrialisation of Igboland and Nigeria that it had invited Ekweremadu for its 2nd Annual Igbo Cultural Festival and Convention, aimed at providing a forum for Ndi Igbo in Diaspora to network and to engage the German business community.

The group said it had also invited other illustrious sons and daughters of Igboland, including Nnia Nwodo, presidentgeneral of Ohanaeze Ndigbo; Innocent Chukwuma, CEO, Innoson Group of Companies; His Majesty Eze Chukwuemeka Eri, Eze Akajiofo Igbo; Chukwuemeka Ezeife, former governor of Anambra State; Prof. Mazi Ojiaku; Mike Okiro, former Inspector General of Police; Bianca Ojukwu, wife of late Igbo leader Chukwuemeka Odumegwu Ojukwu; Evan Enwerem, Jr., and governors of the five SouthEastern states.

Sanwo-Olu swears in cabinet members today

… as Assembly rejects 3 nominees Joshua Bassey ov e r n a n c e i n L a gos State will go full throttle this week, as the state governor, Babajide Sanwo-Olu is expected to swear in the 38 commissioner and special adviser nominees recently screened by the Lagos State House of Assembly.

Sanwo-Olu is also expected to assign portfolios to the commissioners and special advisers, some of whom had served in the state cabinet in previous administrations.

Among such is Tunji Bello, the immediate past secretary to the state government, who, before then, had served twice as commissioner for the environment in the administrations of Bola Tinubu and Babatunde Fashola.

Also in this category is Gbolahan Lawal, immediate past commissioner for housing in the Akinwumi Ambode administration, and commissioner for agriculture, under Fashola.

Sanwo-O lu disclosed while playing host to retired heads of service and permanent secretaries in the Lagos public service, weekend, saying the new cabinet would be inaugurated on Tuesday.

According to Sanwo-Olu, the wheel of governance will be in full gear before the end of this week, in fulfilment of his campaign promise to inaugurate his cabinet within 90 days.

The recently appointed new permanent secretaries in the state were sworn in on Monday to complement the commissioners and special advisers expected to come in

G

@Businessdayng

on Tuesday.

“Next week, by God’s grace, we are swearing in all other complements of cabinet and also permanent secretaries to have the engine of governance on full swing.

At that point, we believe that all the campaign promises we made can come to reality and Lagosians can benefit more from the choice they made at the last election.”

The cabinet members would be assigned their respective ministries during the inauguration ceremony at the state’s secretariat at 10am.

The governor described the body of retired civil servants as “valuable assets” to the state, noting that their actions while in service contributed to the “enviable height” Lagos attained among states in the nation.

Meanwhile, three of the 38 commissioner and special adviser nominees sent to the Lagos State House of Assembly have been rejected by the legislators who met on Monday to confirm their nomination.

The three nominees are Adekemi Ajayi Bembe, Obafemi George and Olanrewaju Saudi. No official reason was given by the House for rejecting them, who had earlier been screened by the 16-man committee constituted by the speaker of the House, Mudashiru Obasa.

Obasa, who presided over a plenary to confirm the nominees on Monday, said confirmation was not based on educational qualifications or oratory prowess but on humility and relationship with grassroots.

Tuesday 20 August 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

41

42

Tuesday 20 August 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Tuesday 20 August 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

43

44

Tuesday 20 August 2019

BUSINESS DAY

POLITICS & POLICY Voter apathy: Lagos to launch voter awareness campaign INIOBONG IWOK

I

n a bid to stem the tide of voter apathy and increase people’s involvement in the political process in the state, the Lagos State government is to launch an extensive voter awareness campaign across wards in the state.

Peter Ajayi, senior special assistant to Governor Babajide Sanwo-Olu on Political Matters, who disclosed this Monday, during an All Progressives Congress (APC) stakeholders’ meeting in Ejigbo, noted that the high voter apathy witnessed in the 2019 election was a concern.

Ajayi stated that the essence of the ward awareness campaign was to boost citizens’ participation in the political and policy initiation process.

He added that the awareness campaign would be separately carried out in each of the wards in the state so as to achieve its expected purpose, stressing that the citizens will be educated on voting behaviour and electoral process.

According to him, “The responsibility of voter awareness should not be left alone

Governor Babajide Sanwo-Olu

to either Independent National Electoral Commission (INEC) or political parties, government can as well help in this area because people’s participation in policy process is key for a successful policy initiation and implementation.

“There is a nexus between political participation and public policy support by the people and we all know people must be carried along in all these things if we want to achieve the agenda of greater Lagos. Achieving a greater Lagos is non-negotiable. It is a joint task as a people,”

Ajayi said.

Speaking on Sanwo-Olu’s Eid- Kabir gift to the people, he added that the citizens’ response to it was impressive, saying that he had been receiving commendable messages from the beneficiaries since the commencement of the programme.

“Concerning the distribution of Sanwo-Olu’s Eid Kabir gifts to the people, I have been receiving commendable messages from the people. They commended the way we shared the gift items.

The exact amount of money was received by benefi-

ciaries,” he added.

The meeting with the ward leaders, which lasted for 3hours was later ended with a funfair with community members who showered encomium on Governor Sanwo-Olu on his development stride so far.

Part of those who attended the programme were Monsuru Obe, executive chairman of Ejigbo LCDA, Kashunmu, Ejigbo APC chairman, and members of the party’s executive council, and all the ward chairmen including some of their executive members.

Corruption: Buhari government worst in history - Timi Frank ...Commends Auditor-General, U.S. for exposing corruption

T

imi Frank, a political activist and former deputy national publicity secretary of the ruling All Progressives Congress (APC), has alleged that the incumbent Muhammadu Buhari administration is the most corrupt in the history of the country.

He said that it was becoming obvious to Nigerians that the administration was engrossed in corruption both nationally and internationally.

Frank, however, commended the government of the United States of America for exposing the fact that no significant progress has been recorded by General Muhammadu Buhari in the area of

fiscal transparency so far.

He commended the office of the Auditor-General of the Federation for its latest report indicting the Presidency and all the MDAs of massive corruption.

A recent report by the United State Department of State had accused the Nigerian government under the APC of lacking transparency while listing the country as one of those that did not meet the minimum requirements for fiscal transparency.

But reacting to the development and other recent corruption allegations against many top officials in the APC government, in a statement released

to newsmen, Monday, Frank described the happenings as “the true colour of a corrupt and stinking government.”

Frank, while commending the revelation by the U.S. government, said it was not surprising because every lie has an expiry date, hence, the embarrassing report.

He said the APC’s government had been concocting and disseminating lies and utter falsehoods about increased revenue generation to the tune of N5.3 trillion in 2018 alone but “that lie has now expired as can be deduced from a leaked memo signed by the SGF, Abba Kyari, querying the Chairman of the Federal Inland Revenue

Service (FIRS), Babatunde Fowler, about humongous shortfalls and discrepancies in projected revenue.

According to him, “It is becoming clearer to Nigerians and the whole world how lies were packaged and sold to Nigerians by the assembly of corrupt individuals in the ruling party.

“They came in the name of fighting corruption but the majority of their officials are confirmed public treasury looters. In fact, the only criteria to get appointment in APC government is for someone to have record of looting, certificate forgery, thuggery and violence.”

Makinde appoints Owoseni, former Lagos, Benue commissioner of police, as special adviser REMI FEYISIPO, Ibadan

F

ormer Commissioner of Police in Lagos and Benue States, Fatai Owoseni, has been appointed by the Governor of Oyo State, Seyi Makinde, as his special adviser on security matters.

The governor, according to a statement signed by his Chief Press Secretary, Taiwo Adisa, approved the appointment, which took effect from August 1.

The statement indicated that Owoseni’s appointment falls in line with the recognition of security as one of the www.businessday.ng

four pillars of the Makinde administration in Oyo State.

Governor Makinde had also promised to unveil a new security architecture for the state before his first 100 days in office.

The governor, in the letter of appointment, wished Owoseni, who has been

working as a security consultant since his retirement from the police after 35 years of meritorious service, success in his new assignment.

Makinde also urged Owoseni to discharge his duties with absolute loyalty and dedication.

https://www.facebook.com/businessdayng

Don wants financial, administrative reforms of electoral system IDRIS UMAR MOMOH, Benin

S

tephen Monday Omodia, a Political Science and Public Administration lecturer at Edo University Iyamho, has called for the financial and administrative reformation of the nation’s electoral system.

Omodia said the reforms should make the electoral body to be more financially autonomous through funding from consolidated revenue fund.

The political science professor made the call while delivering the 1st Inaugural Lecture series of the institution with the theme, ‘Bourgeoisification of the Nigerian Political Process and the Search for Good Governance’.

“There is wide gap between the rich and the poor in terms of what they represent- their goals and aspirations.

“The focus of the rich is on how to get richer, how to buy private jets while that of the poor is on how efficient public transportation system could be provided by government as regards governance”, he said.

While also advocating for reform of political parties in the country, he noted

that the reforms will result to credibility and accountability in governance.

He noted that political parties have been characterised by ethnicity, weak organisation network and poor democratic culture.

He also advocated that the administrative reform should be on the appointment of the chairman of the body, adding that the chairmanship position of the electoral body should be always advertised.

The university lecturer opined that good governance can only be achieved and enhanced in Nigeria political process if the system is genuinely reformed.

“Political elite recruitment must be reformed in such a way that enables for credibility, accountability and for people-centred governance.

“In order for political process to be transparent and credible, the processes throwing-up candidates have to been reformed in order to make sure that the best and most appealing emerge,” he said.

Omodia, who however, opined that political process in the country is improving, pointed out that good governance is still very far from the people and the culture.

Edo 2020 guber: PDP may lose Edo again if it fails to conduct congress – Chieftain IDRIS UMAR MOMOH, Benin

A

s political parties warm up for the 2020 gubernatorial election in Edo State, a chieftain of the People’s Democratic Party (PDP), Confidence Macdonald, has said the party may again lose the election if it failed to conduct congress before the governorship primary election.

Recall that a chieftain of the party, Jeffrey Osamede Edorodion, had last week called on the national leadership of the party, to, as a matter of urgency, dissolve the Dan Orbih-led executive and conduct a new one.

Edorodion said the call was sequel to the expiration of the executive.

Macdonald, an executive member of the Ikpoba Okha Local Government chapter of the party, in an interview with newsmen in Benin City, said early conduct of the state congress would enable the party to resolve all the likely grievances that may arise from it, before the governorship primary election.

“A state congress for March or April 2020 will certainly keep the party in perpetual opposition as there will not be sufficient time to resolve whatever grievances may arise from the @Businessdayng

congress, let alone that which may arise from the governorship primaries.

“Waiting till March 2020 will again be counterproductive to the party’s desire and aspirations to win Edo state,” she said.

She noted that for the party to reclaim the state in the 2020 governorship election, the national, zonal and state leadership of the party must ensure that the congress is conducted before the end of 2019.

The chieftain, who expressed the optimism that the party will win the gubernatorial election, noted that the feat can only be achieved if the needful is done by the national leadership of the party by ensuring that the state congress is conducted on time.

She said failure to do that which is right and appropriate will again be tantamount to losing the state to the ruling All Progressives Congress.

“Both the national, zonal and state leadership of the party should join hands together to do the right thing. Not doing the right thing will make the party fail again in the next governorship election. The only way out, for me, is for the leaders to conduct congress early enough probably by October or November, this year”, she said.

Tuesday 20 August 2019

FT

BUSINESS DAY

45

FINANCIAL TIMES

World Business Newspaper MARTIN ARNOLD IN FRANKFURT

G

e r ma n y ’s c e nt ra l bank has warned that Europe’s largest economy is likely to tip into recession in the third quarter, dragged down by a sharp drop in German exports and a decline in industrial production.

The Bundesbank said in its monthly update that it expected Germany’s economy to remain “lacklustre” in the three months to September, adding that it “could continue to decline slightly” after it shrank by 0.1 per cent in the three months to June.

The warning added to the gloomy signals about the German economy, which has gone from being the powerhouse of the region to one of its laggards, weighed down by a combination of turmoil in the carmaking industry, the escalating US-China trade war and the prospect of a chaotic UK exit from the EU. In the second quarter, a slowdown in foreign trade and a decline in industrial production were partly offset by growth in household and government spending.

But the Bundesbank warned that it was not sure how long this could continue.

“Future developments will hinge on how long the present economic dichotomy lasts and which direction it takes once it dissolves,” it said. “As things currently stand, it is unclear whether exports and, by extension, industry will regain their footing before the domestic economy becomes

Germany likely to tip into recession, Bundesbank warns

Economy has gone from being the powerhouse of the region to one of its laggards

more severely affected.”

In recent weeks Germany’s decade-long pledge to maintain a budget surplus has faced growing criticism from economists, business groups, opposition leaders and even from individual members of the government coalition.

The European Central Bank is set to cut interest rates further into negative territory next month but its president Mario Draghi has repeatedly insisted that eurozone governments should not rely on monetary policy alone to save the bloc’s economy.

There are signs that the Ger-

man government is preparing to announce a stimulus package, including measures to stimulate investment and to reduce carbon emissions.

Finance minister Olaf Scholz said on Sunday that the government should be able to muster a €50bn stimulus package, as it did

after the 2008 financial crisis.

Recent data have indicated that German economic weakness is continuing into the second half of this year. Last week the Zew survey of financial market experts revealed that economic sentiment dropped to minus 44.1 in August, its lowest since the eurozone financial crisis in 2011 and much gloomier than analysts had expected.

On Monday Deutsche Bank cut its forecast, saying the German economy would grow by only 0.3 per cent this year and 0.7 per cent next year and predicting it was already “in a technical recession” — which is defined as two consecutive quarters of negative growth.

“We acknowledge these reductions do not properly heed the accumulation of risks we have been facing over the last few quarters,” said Stefan Schneider, chief economist at Deutsche Bank.

“Given the increasingly fragile state of the global economy, the realisation of one or more risks could easily push the economy into a completely different scenario, where growth revisions of a few tenths of a percentage point will not be sufficient.”

London court opens way to start World’s biggest chip created to $9bn clawback against Nigeria meet demands of AI West African nation loses legal case over aborted gas processing plant contract NEIL MUNSHI IN LAGOS

A

UK judge has ruled that a small gas firm founded by two Irish businessmen can seize roughly $9bn in assets from the Nigerian government, the equivalent of about a fifth of the west African country’s foreign reserves.

The decision came in enforcement proceedings pursued in the London High Court by Process and Industrial Developments over an aborted 2010 gas processing plant project, for which it had been awarded $6.6bn in an arbitration case in January 2017.

With interest of over $1m a day this has ballooned to over $9bn, or roughly 2.5 per cent of Nigeria’s GDP. In his court ruling, Justice Christopher Butcher said the company can enforce the arbitration award as if it were a UK court order, which would allow it to begin seizing Nigerian assets in the UK. The lawyer for P&ID said the company was “committed to vigorously enforcing its rights, and we intend to begin the process of seizing Nigerian assets in order to satisfy this award as soon as possible”.

The decision represents perhaps

the largest financial liability in Nigeria’s history.

Lawyers representing Nigeria, Africa’s largest economy, had argued that the arbitration award should not be enforced because it was “manifestly excessive and penal”,and that the UK was not the right jurisdiction for the case.

Mr Butcher rejected the government’s arguments. The Nigerian government has yet to make any payment, and “has not applied to set it aside in any jurisdiction”, according to the ruling.

A spokesman for the Nigerian ministry of justice and the lawyers representing the government did not immediately respond to requests for comment.

The Nigerian government had agreed to supply gas to a natural gas refinery that P&ID planned to build in 2010. The company had been established by businessmen Michael Quinn and Brendan Cahill expressly for the project.

Two years later the company, which never broke ground on the project but said it had spent around $40m, took the government to arbitration, calculating damages based on what it estimated it would have earned over the 20-year period of the contract. www.businessday.ng

Start-up Cerebras has developed processor bigger than iPad to help train AI systems RICHARD WATERS IN SAN FRANCISCO

T

he race among semiconductor makers to gain an edge in the booming market for specialised AI processors has just given rise to the world’s biggest computer chip.

While chip circuitry continues to get smaller, the slab of silicon, developed by Californian startup Cerebras, has a surface area slightly larger than a standard iPad and is more than 80 times bigger than its closest competitor. It also eats up as much electricity as all the servers contained in one and a half racks — the towers of computers in data centres that stand more than six feet tall.

The mammoth chip, due to be unveiled on Monday after nearly four years of development, is the starkest sign yet of how traditional thinking is being turned on its head as the chip industry struggles with the demands of artificial intelligence.

It also highlights giant leaps in the amount of computing power that are being thrown at the most

https://www.facebook.com/businessdayng

complex AI problems — something that prompted US research group OpenAI to raise $1bn from Microsoft last month, hoping to ride the exponential hardware curve to reach human-level AI. Most chipmakers have been looking to create smaller, modular elements, known as “chiplets”, out of which today’s most advanced chips are assembled, according to Patrick Moorhead, a US chip analyst. Cerebras, by contrast, has jettisoned that conventional approach and instead come up with what is in effect an entire computing cluster on a single chip, he says.

The race to build a new generation of specialised AI chips, under way for several years, is finally reaching a critical point, with several companies — including Intel, Habana Labs and UK start-up Graphcore — either just starting or promising to deliver their first chips to customers before the end of this year. Cerebras did not name what it said was a number of customers already receiving its chips, although they are likely to be best @Businessdayng

suited for the massive computing tasks undertaken by the biggest internet companies.

More than 50 companies have been trying to develop specialised chips for AI. Most of these are used for inference, the task of applying a trained AI system to real-world examples, rather than the far more data-intensive job of training the deep learning models in the first place. That challenge has been taken on by a handful of start-ups like Cerebras, Graphcore and Wave Computing, as well as Chinese challenger Cambricon.

The length of time it has taken for companies like these to start shipping products shows that the technical challenges were much greater than most had expected, said Linley Gwennap, principal analyst at the Linley Group, a US chip research firm. That has not prevented some of the productless start-ups attracting high valuations. Cerebras has raised more than $200m in venture capital, with its latest round, late last year, valuing it at around $1.6bn, said Andrew Feldman, chief executive.

46

Tuesday 20 August 2019

BUSINESS DAY

FT

NATIONAL NEWS

Markets are adjusting to a turbulent world A synchronised global recession is likely, punctuated by a step-by-step downturn RANA FOROOHAR

P

aradigm shifts tend to happen slowly, and then all at once. That’s the lesson I’ve taken away from the recent market turmoil. As I wrote last week, the surprise is only that the upset didn’t come sooner.

Pundits may have pegged the worst Dow drop of the year to fresh bond yield curve inversions in the US (a historic predictor of downturns) but the underlying signs of sickness in the global economy have been with us for a long time. The question was when the markets were going to put aside the complacency bred by a decade of low interest rates and central bank money dumps, in the form of quantitative easing, and embrace this new reality.

Consider that since January 2018 every major economy except India’s has seen a deterioration in its purchasing managers’ indices. PMIs are one of the best forward-looking indicators of economic conditions for the manufacturing sector, which is a bellwether for overall economic activity. The slowdown in the eurozone has been dramatic — particularly in places such as Italy and Germany, where the economy is now officially shrinking.

As strategist Louis-Vincent Gave of Gavekal pointed out in an investor note, the “fingerprints of many culprits can be detected” in the manufacturing sector’s troubles, from an automobile sector facing structural challenges, to the Boeing 737 Max fiasco and its effect on global supply chains, to the lack of any big new product launches in the technology sector, to lacklustre corporate investment, a weak energy sector and a slowdown in China. All that is required is one big sovereign default or a cascade of corporate bankruptcies and we could see the market in free fall.

Politics, of course, hasn’t helped.

But again, none of the recent developments have been very surprising.

Take Argentina, which suffered a 48 per cent one-day market drop last week after its presidential primary election saw the Peronist opposition comfortably ahead. The question is why investors were, as the old Casablanca line goes, “shocked, shocked!” to find that a country that has been a serial defaulter would swing back to the left.

This raises other questions. What might happen in the UK if a general election, before or after a no-deal Brexit, allows Jeremy Corbyn to take power? What might the future of Italy’s turbulent politics hold? What could be the impact of an Elizabeth Warren or Bernie Sanders victory in the US primaries? As a recent 13D Global Strategy and Research note put it, such events would “fit perfectly into the cyclefrom wealth accumulation to wealth distribution”, which I believe will be the biggest economic shift of our lifetimes.

Why is this new reality taking so long to sink in? Because we have spent decades of living in the old reality — the post-Bretton Woods, neoliberal one. Unfettered economic globalisation and years of easy monetary policy have buoyed asset prices and favoured capital over labour, seemingly indefinitely. Our senses have been numbed by trillions of dollars released by central banks, by algorithmic trading programs that buy on the dip and thus diminish the sense of long-term political risk, and by record passive investing.

All this has combined to dampen the signals that are now, finally, blinking red. Witness the recent downturn in bank, transport, and industrial indices, as well as the fall in small-cap stocks, a historic predictor of trouble in bigger companies. At the end of a recovery cycle, capital tends to crowd into large companies and smaller firms suffer.

As the markets finally come to terms with increased political risk, currency risk, credit risk, and the growing likelihood of leftwing governments, it’s clear that the shifts and the shocks are coming fast and furious. No wonder that everyone is now left asking, “What comes next?”

The answer, I believe, is very likely to be a synchronised global recession, punctuated by a step-by-step market downturn — one in which there may be the odd rally, but the general direction is down. This could last for some years. In the next few weeks, I would expect new lows in bond yields, a deepening of the yield curve inversion, higher prices for “safety” assets like the yen and swiss franc, and a continued bull market in gold.

I would also expect more tough talk from Donald Trump. The US president’s persistent bashing of China and the Federal Reserve will follow any market downturn. There will probably be more attempts by Mr Trump to wrongfoot the opposition, such as the decision to delay new tariffs on Chinese goods until December so that consumers won’t be hurt during the Christmas shopping season. (None of this makes a real trade deal more likely.)

Meanwhile, American consumers are already hurting and that could have big implications for Mr Trump’s 2020 re-election campaign.

Momentum in job growth in swing states such as Michigan, Ohio and Pennsylvania is slowing.

One recent report conducted by liberal pollster Stan Greenberg showed that a third of working-class white women in some conservative areas are starting to turn against the president, irritated by his frequent boasts about the booming US economy. “Maybe in New York City,” said one woman from Wisconsin.

“But not here.”

For Mr Trump, and the US public at large, the summer of fear may turn into a winter of political discontent. rana.foroohar@ft.com www.businessday.ng

Jamie Dimon, chief executive of JP Morgan and chairman of the Business Roundtable. The business group has issued a new ‘statement of purpose’ © AP

Group of US corporate leaders ditches shareholder-first mantra Business Roundtable urges companies to consider the environment and workers RICHARD HENDERSON AND PATRICK TEMPLE-WEST IN NEW YORK

O

ne of America’s largest business groups has dropped the “shareholder primacy” creed that has driven US capitalism for decades, urging companies to consider the environment and workers’ wellbeing alongside their pursuit of profits.

The Business Roundtable has close to 200 members, including the chief executives of JPMorgan, Amazon and General Motors, which generate $7tn in annual revenue. A new “statement of purpose” from the BRT on Monday placed shareholders as one of five stakeholders, alongside customers, workers, suppliers and communities.

It is a significant departure from the bedrock belief that businesses serve the owners of their capital — a philosophy championed by Nobel Prize-winning economist Milton Friedman and which has driven corporate America for decades.

Companies should “protect the environment” and treat workers with “dignity and respect” while also delivering long-term profits for shareholders, the BRT said.

The change amounts to a call to reform capitalism in a time in which rising populism and concern about climate change have led politicians and shareholder activists to demand that companies consider their impact on the world beyond their balance sheets.

“It’s an important shift,” said Mohamed El-Erian, chief economic adviser for Allianz. “It reflects an emerging consensus about the importance of more inclusive capitalism.”

The BRT’s statement lacks detail on what actions companies could take, such as increasing wages and cutting carbon emissions.

Larry Summers, who served as US Treasury secretary under President Bill Clinton, said that without an enforcement tool the statement lacked teeth and that government was notably absent as a stakeholder.

“I’m wary,” said Mr Summers. “I worry the Roundtable’s rhetorical embrace of stakeholders is in part a strategy for holding off necessary tax and regulatory reform.”

The BRT statement may be seen as an effort to assuage political pressure for broad business reforms from the likes of Democratic presidential candidate hopefuls Elizabeth Warren and Bernie Sanders.

Both politicians have highlighted the fact that US companies are making record profits and spending record amounts on share buybacks while wages have stagnated.

The statement’s language has echoes of a reform bill introduced

by Ms Warren last year that would require company directors to consider all corporate stakeholders “including employees, customers, shareholders and the communities in which the company operates”.

Marco Rubio, a Republican senator for Florida, has called for US businesses to think beyond their shareholders and instead take a long-term view to investment, which he thinks will promote employment. In the UK, Jeremy Corbyn, leader of the opposition Labour party, has also suggested broad corporate reforms.

Larry Fink, chief executive of BlackRock and a member of the BRT, last year called on businesses to strive to make a positive impact on society in addition to delivering profits. Similar views have been echoed more recently by Ray Dalio, the founder of Bridgewater Associates, and Jamie Dimon, the chief executive of JPMorgan and chairman of the BRT.

US gives China’s Huawei another 90-day reprieve Tech groups allowed to continue selling to telecoms equipment maker under certain circumstances KIRAN STACEY IN WASHINGTON AND ADAM SAMSON IN NEW YORK

U

S technology companies will be allowed to continue selling to Huawei under certain circumstances for another three months, after the US commerce secretary extended a temporary reprieve for groups such as Google.

Wilbur Ross on Monday said the Trump administration would extend a temporary licence for companies to sell to the Chinese telecoms equipment maker if they are selling repairs or updates to

https://www.facebook.com/businessdayng

existing systems.

The exemption, which will apply for a further 90 days, only applies if the products in question are deemed not to pose a threat to national security.

The reprieve will allow Google to continue updating its Android software on Huawei smartphones, for example. It has been issued despite an increase in hostile rhetoric from US president Donald Trump towards the Chinese company.

Mr Ross said in a statement: “As we continue to urge consumers to transition away from Huawei’s products, we recognise that more time is necessary to prevent any @Businessdayng

disruption.”

Separately, he told the Fox Business television channel that the move would allow rural US telecoms companies that use Huawei “a little more time to wean themselves off”.

Mr Trump took action against the Chinese company earlier this year, announcing he would prepare the way for a ban on Huawei products in the US and immediately prohibit it from buying American-made goods. US security officials argue the company poses a risk to national security because its telecoms equipment could be used by Beijing for spying.

Tuesday 20 August 2019

BUSINESS DAY

FINANCIAL TIMES

47

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Government to launch PR blitz to reassure UK over no-deal Brexit TV, radio and social media campaign comes after stark warnings in leaked contingency planning paper SEBASTIAN PAYNE AND JAMES BLITZ IN LONDON

B

oris Johnson’s government is to launch a major public information campaign to reassure Britons about a potential no-deal Brexit, in an effort to rebut the stark warnings in a leaked contingency planning paper.

Downing Street declined to comment on the leaked document about Operation Yellowhammer, its planning for a no-deal Brexit.

But officials said the document was “out of date” and did not reflect the government’s state of preparedness.

Whitehall insiders said the media campaign, with a budget of £100m, would begin in the next couple of weeks to explain in a “user-friendly way” what individuals needed to do ahead of Brexit day on October 31. Unlike the technical notices published last year for businesses, the emphasis will be on consumers.

Those with knowledge of the preparations said the campaign would be run on TV, radio and social media. The government is working to ensure that GOV.UK, its official website, is ready for a significant increase in traffic once the campaign launches. It will include details of what consumers need to do to be prepared for travel abroad.

A Number 10 spokesperson said “further information will be published in the coming weeks” on government preparations for leaving the EU with or without a deal, noting that Mr Johnson had “significantly stepped up planning” for no deal. Downing Street insisted it had been “engaging widely” with businesses, despite lobby groups expressing concern that smaller firms were underprepared.

Responding to the leaked Yellowhammer document, Mr Johnson said preparations for leaving the EU had been “very far advanced” ahead of the March 29 departure date before “things then slipped back a bit”. He added that he was “very confident” that the government would be ready for departure on October 31.

“I’m not pretending that there won’t be bumps on the road. There will be, I said that on the steps of Downing Street, but if everybody puts their minds to it I have absolutely no doubt that we can get ready,” he said during a hospital visit to Truro in Cornwall.

The Yellowhammer document said the consequences of a no deal exit would be widespread disruption — possibly for months — to trade, food and medicine distribution, fishing, and fuel supplies, and civil unrest.

Investors position for fresh wave of economic stimulus Billions flood into government debt on signs of global slowdown ADAM SAMSON AND TOMMY STUBBINGTON IN LONDON AND BRENDAN GREELEY IN WASHINGTON

I

nvestors are anticipating a fresh wave of stimulus measures to tackle flagging growth, as the White House said it was considering a new round of tax cuts to boost the economy.

Central bankers will gather at their annual Jackson Hole meeting in Wyoming on Thursday as warning signals from financial markets add to rising pressure to come up with ways to support the global economy. Asian markets were higher in Monday trade on hopes of such measures.

A key part of the US yield curve — which reflects market expectations of future interest rates — last week inverted for the first time since the summer of 2007, a move seen by many as a leading market indicator of recession.

Weak data from various countries, including Germany and China, have fuelled fears that the global economy is running out of steam.

Concerns over the economy have sent investors fleeing into the perceived safety of government bonds, driving yields down to record lows and boosting the pile of debt that offers a negative rate of inter-

est over $16tn. Last week, the US 30-year Treasury yield fell below 2 per cent for the first time, while in Europe, several countries have no sovereign debt trading with positive yields.

“There’s a risk that you will never get a positive yield on a safe asset again — so buy them now while stocks last,” said Gareth Colesmith, head of global rates at Insight Investment.

Investors poured almost $500bn into fixed income mutual funds in the first half of this year, according to Morningstar, the fastest rate for at least a decade.

As a result, the price of highly rated countries’ debt has jumped by an average of 6.4 per cent so far this year, putting this year on track for the strongest rally for the asset class since 1995, according to ICE BofA Merrill Lynch bond indices.

“Markets have an insatiable appetite for easing,” said Nicola Mai, a London-based portfolio manager at Pimco. “No matter what central banks do, they want more.”

Rating agency S&P Global warned last week it was on “high alert” over the US economy and now sees a roughly one-in-three chance that the world’s biggest market will fall into recession in the next year. www.businessday.ng

Prime Minister Boris Johnson said he was ‘very confident’ that the government would be ready for departure from the EU on October 31 © AP

Greece’s new finance minister vows to prioritise tax reforms Christos Staikouras confident that overhaul will help accelerate growth KERIN HOPE IN ATHENS

G

reece’s new finance minister has said that implementing sweeping tax reforms will be his “key priority” as his country seeks to boost growth and rebuild credibility with investors following a decade of international bailouts backed by the EU and IMF. Christos Staikouras told the Financial Times that the centre-right New Democracy government is planning “a comprehensive tax reform that will have a four-year horizon and will accelerate growth”.

The overhaul will focus on reducing income and corporation tax, cutting VAT, streamlining tax incentives for investors and abolishing emergency levies imposed during the Greek debt crisis to meet conditions set by bailout creditors.

“The fundamental objective is to achieve sustainable high growth rates so as to gradually restore the country’s lost wealth,” Mr Staikouras said in his first interview with a foreign media outlet since he took office after last month’s election.

New Democracy, led by Kyriakos Mitsotakis, swept to victory over the leftwing Syriza party of former prime minister Alexis Tsipras at a snap elec-

tion last month, campaigning on a platform of cutting taxes, digitising the economy and creating new jobs.

The conservatives are also committed to promoting privatisation and embracing several flagship foreign investment projects neglected

by Syriza, whose leaders opposed private investment and resisted pressure to broaden the previous government’s privatisation programme.

“We are taking ownership of the reform agenda . . . we will implement structural reforms in a front-loaded manner,” said Mr Staikouras.

“We’ve agreed [with the EU] to accelerate privatisations because we believe they can contribute to sustainable growth rates when . . . they’re carried out under conditions of absolute transparency and also include a social return.”

Mr Staikouras has already pushed through parliament his first piece of legislation, cutting an unpopular annual property tax by an average of 22 per cent per household and giving breathing space to cash-strapped Greeks by reviving a plan for tax arrears to be paid in 120 monthly instalments.

A second tax bill due to pass next month will include a reduction in corporation tax from 28 per cent to 24

per cent. Like the earlier measures, it will take effect immediately.

Mr Staikouras, a former deputy finance minister who oversaw the national accounts between 2012 and 2014 during Greece’s second bailout, is credited with knowing how to pace the tax cuts to prevent any backsliding on the country’s commitment to attaining an annual primary budget surplus — before debt repayments — of 3.5 per cent of gross domestic product.

Despite the cuts already announced, “we estimate we will meet the 3.5 per cent target in 2019, but it’s clear we have no more fiscal space [for additional cuts] this year”, he said.

Given the growing prospect of a recession in Europe, Mr Staikouras is reluctant to make growth projections for 2020 and 2021. But he was confident that Greece would beat its official growth target of 2 per cent this year, given that the business climate has been steadily improving.

Yet much higher growth rates will be needed if Greece is to make up for the 25 per cent fall in gross domestic product during the crisis years. Mr Mitsotakis has argued that the high surplus requirement is strangling growth by squeezing consumption and discouraging public and private investment.

Europe’s banks warned on ending interest rate benchmark Call to speed up preparations for start of new €STR benchmark in October MARTIN ARNOLD IN FRANKFURT AND PHILIP STAFFORD IN LONDON European banks and other financial institutions need to speed up their preparations for the phasing out of a key interest rate benchmark which is used to price more than €24tn of derivatives, loans and bonds, a body advising the European Central Bank has warned.

Financial markets are heading for confusion and legal disputes unless more is done to shift away from the Eonia interest rate benchmark, the head of the ECB’s working group overseeing the

https://www.facebook.com/businessdayng

transition told the FT. Eonia will be replaced by the €STR benchmark in early October, after a series of market manipulation scandals eroded confidence in the way the existing benchmark is calculated.

Steven van Rijswijk, the steering group head and chief risk officer at Dutch bank ING, told the FT: “I am worried about complacency among market participants, especially as regards the change in the timing of the publication of Eonia, which takes place already on October 2 and creates very significant operational challenges.”

Eonia is used to price about @Businessdayng

€22bn of interest rate derivatives, €2tn of cash market transactions — such as current accounts and overdrafts — and about €4.4bn of debt securities.

In a report to be published on Monday the ECB’s working group will recommend that existing contracts should be switched over from Eonia to €STR as soon as possible.

“Millions of contracts need to be changed,” said Mr van Rijswijk. “That will cost quite a bit of money.” He added that institutions need to adapt their IT systems and review documentation, procedures and product structures.

48

Tuesday 20 August 2019

BUSINESS DAY

FT

ANALYSIS

Battle over Unizo points to surge in activist investing in Japan Hostile takeovers and other corporate actions once deemed taboo stage comeback LEO LEWIS AND KANA INAGAKI IN TOKYO

A

n investment arm of SoftBank has launched a surprise “white knight” offer for a Japanese hotel chain as investors witness a rare spate of hostile takeovers and other corporate manoeuvres once deemed taboo in the country.

The friendly buyout offer of up to $1.3bn from SoftBank’s Fortress Investment Group for Unizo Holdings came after travel agency HIS launched a hostile takeover attempt of the hotel group last month.

Fortress, which has invested in more than 100 hotels in Japan, has offered ¥4,000 ($38) a share for all of Unizo’s shares. This represented a premium of 11 per cent compared with Thursday’s closing price and a premium of 101 per cent compared with the level shares were trading a day before HIS announced its offer for ¥3,100 a share on July 10.

The embittered tussle for control of Unizo Holdings comes as Japan’s real estate investment trust sector is awaiting the finale later this month of a hostile takeover bid — unprecedented for the sector — by Star Asia, which has a Tokyo-listed Reit, of its smaller rival Sakura Sogo.

The two hostile takeover battles follow examples in recent months in which major shareholders ap-

plied unusually aggressive tactics to the management of a stationery supplier, a funeral director and sportswear manufacturer.

The battles follow an upsurge in the presence and boldness of activist investors in Japan not seen for years in the country.

The tussle over Unizo, which comes in the wake of revived foreign investor interest in the Japanese property market, could yet become even more intense with activist fund Elliott recently revealing that it had built a stake of 9.9 per cent in Unizo.

Elliott’s interest has already triggered a spike in Unizo share price, which rose 16 per cent to ¥4,165 on Friday. HIS said it was studying Fortress’s new offer and declined to comment on what step it could take next.

Japan’s Reit sector has been rocked by Star Asia’s attempt to take over the Sakura Sogo Reit by calling on unit holders to switch asset managers. Sakura’s response has been to negotiate with the managers of the much larger Mirai Reit to enter as a white knight with a separate proposal.

Hostile takeover activities have been effectively absent from Japan for more than a decade after a spate of attempts in the late 2000s ended with huge public outrage and the high-profile convictions of the investors leading the bids.

HSBC: Chinese headwinds threaten to blow bank off course To expand, it must overcome local rivals, trade tensions and Beijing’s irritation over its role in the Huawei dispute DAVID CROW IN HONG KONG

W

hen Liu Xiaoming, China’s ambassador to the UK, gave an address at HSBC’s Chinese new year party in February, he was full of praise for the bank. Speaking in the walnut-panelled United Nations Ballroom at the Four Seasons hotel in London, he lauded the company for “spreading confidence in China through its concrete actions”.

Following the speech, Mr Liu and Mark Tucker, HSBC’s chairman, smiled for the cameras beneath the chandeliers, accompanied by two dancers in bright red dragon costumes. But the bonhomie in the ballroom came at a difficult juncture for relations between Beijing and HSBC, which has made expansion in mainland China a central plank of its growth strategy.

Just days before the party, Mr Liu had summoned John Flint, the chief executive recently ousted from the bank, totheembassytointerrogatehim over the company’s role in the arrest andprosecutionofMengWanzhou,the chief financial officer of Huawei.

According to two people briefed on the meeting, Mr Flint told the ambassador that HSBC had no option but to turn over information that helped US prosecutors build a case against

Ms Meng, who is in Canada fighting extradition to the US. She denies the charges of bank and wire fraud in an indictment that also alleges that the Chinese telecoms equipment maker conducted business in Iran in contravention of US sanctions.

Beijing’s irritation over HSBC’s role in the diplomatic row engulfing Huawei is but one challenge facing the bank, set up 154 years ago to capture trade flows between east and west, as it tries to navigate rising tensions between China and the west.

With globalisation in retreat, some analysts and investors are asking whether HSBC’s plan to generate billions of dollars of additional revenue in mainland China is compatible with its domicile in London, or its status as one of the world’s largest US-dollar-clearing banks. The recent protests on the streets of Hong Kong, where HSBC makes roughly half its profit, have thrown the question into even sharper relief.

“They are straddling this faultline between the east and west and, for the past couple of decades, that has been a win-win position,” says Ronit Ghose, a banks analyst at Citi.

But with flows between China and the west forecast to slow because of President Donald Trump’s trade war, Mr Ghose predicts HSBC will lose its edge. www.businessday.ng

Nations seek to tap expatriate workers as source of finance In the third part of this FT Series, we look at why migrants’ money is being channelled into diaspora bonds and infrastructure investment STEVE JOHNSON IN LONDON

A

growing number of countries are seeking to tap into the financial resources of their overseas expatriate populations, by luring their savings and remittances into so-called diaspora bonds.

The $500bn or so of crossborder remittances that flow into emerging market countries every year are a vital source of funds for many of the planet’s poorest people, bolstering household consumption for families back home.

Yet the economic impact of remittance flows could be greater still if at least some of that money was directed into productive investment, according to development economists.

Diaspora bonds are one of a number of approaches designed to bring this about.

The World Bank has received requests for help to develop financial products targeting migrant workers from 20 countries ranging from El Salvador to Bangladesh, according to Dilip Ratha, lead economist in the migration and remittances team at the World Bank.

“They are a simple recognition of the fact that migrants send money home but they also save a significant amount, quite possibly more than they send home, in bank deposits on which the interest rate is close to zero,” he said. “Offering a diaspora bond at 4 to 5 per cent in dollar terms can attract their savings.”

The advantages of this approach are, in theory, manifold.

With foreign direct investment into emerging markets having fallen to historic lows, bond financing is less volatile than the alternatives of cross-border portfolio flows, bank deposits and bank lending, all of which can be withdrawn at any time.

Moreover, Mr Ratha said, dia-

https://www.facebook.com/businessdayng

sporas “have a more favourable perception of country risk and are willing to be more patient with it than professional investors”, while their benchmarks are deposit rates, rather than the 10-year Treasury yield of institutional investors, potentially producing a “patriotic discount”.

The idea is not new: Israel has raised $32.4bn in diaspora bonds since 1951.

But it has so far remained a niche part of the financial markets. India is the second-largest beneficiary of diaspora bonds, having raised $11.3bn, but has not issued a diaspora bond since 2000. Issues from the likes of Nigeria, Ethiopia and Nepal have raised far less.

Six months ago Pakistan launched a bid to reportedly raise up to $1bn of much-needed capital from its expats by issuing a diaspora bond, but it has raised just $31m so far, despite offering dollar interest rates of up to 6.7 per cent.

Mr Ratha pointed to “supply-side problems” for the lack of take-up. Investment banks “don’t have a lot of appetite for innovation,” and are happier selling plain vanilla paper, he said.

Furthermore, diaspora bonds are classed as “retail bonds,” and so require more regulation than those aimed at professional investors, with higher retailing and marketing costs.

But he remains optimistic about the potential scope. In particular, he has hopes for a bond to help repair flood damage in the Indian state of Kerala, which may be denominated in local currency and could open the door for other states if successful.

“With a few successful pilots we think more will come on board, because the potential is huge,” Mr Ratha said.

Diaspora bonds are not the only way of channelling remittances into investment.

The International Fund for @Businessdayng

Agricultural Development, a UN agency, has piloted 60 projects through its Financing Facility for Remittances.

IFAD’s projects typically have two prongs. First, as with diaspora bonds, they aim to tap into the potential investment capital of migrant workers, who it estimates save 10 per cent of their income, almost as much as the 15 per cent directed to remittances.

Second, the aim is to bring the recipients of remittances into the formal financial system via banks and microfinance institutions, allowing them to build up savings and access credit and insurance.

“Twelve years ago, after having identified the flows of remittances to developing countries, we realised that more than half were bound for rural areas,” said Pedro De Vasconcelos, senior technical specialist for the FFR. “The rationale was simple: how can we make these remittances count more?”

Encouraging recipients of remittances to save part of the sums their relatives send them was an important part of the work, Mr De Vasconcelos added. “We are trying to empower them,” he said.

Funds can then be channelled into productive investment. For example, a scheme in the Philippines tapped funds from 1,260 recipient families and 1,500 migrant workers, mostly in Italy. When augmented by grants from donors, the project funnelled $8m into works such as agricultural co-operatives, creating 1,300 jobs.

And in war-torn Somalia, $1m raised from the diaspora helped to finance the creation of 14 companies and 230 jobs in fishing, agriculture and food processing.

The challenge now is to expand these pilot projects to a larger scale.

Tuesday 20 August 2019

BUSINESS DAY

51

Live @ The STOCK Exchanges Prices for Securities Traded as of Monday 19 August 2019

Company

Market cap(nm)

Price (N)

Change

Trades

Volume

Company

Market cap(nm)

Price (N)

Change

Trades

Volume

PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 216,825.88 6.10 0.83 145 6,339,564 UNITED BANK FOR AFRICA PLC 194,936.70 5.70 2.70 356 17,197,210 ZENITH BANK PLC 533,740.39 17.00 2.41 442 26,717,641 943 50,254,415 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 166,913.11 4.65 1.09 300 16,526,624 300 16,526,624 1,243 66,781,039 2,823,170.96 138.70 2.74 165 12,370,988 MTN NIGERIA COMMUNICATIONS PLC 165 12,370,988 165 12,370,988

BUILDING MATERIALS 2,803,163.47 164.50 0.30 38 2,549,910 DANGOTE CEMENT PLC 221,482.19 13.75 -1.79 88 47,152,867 LAFARGE AFRICA PLC. 126 49,702,777 126 49,702,777 EXPLORATION AND PRODUCTION 288,337.83 490.00 - 7 1,390 SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 7 1,390 7 1,390 1,541 128,856,194

REAL ESTATE INVESTMENT TRUSTS (REITS) 1,710.00 85.50 - 0 0 SKYE SHELTER FUND PLC 10,175.81 40.70 - 0 0 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 14,408.66 5.40 - 0 0 UPDC REAL ESTATE INVESTMENT TRUST 0 0 0 0

OTHER FINANCIAL INSTITUTIONS 411.91 552.20 - 0 0 NIGERIA ENERYGY SECTOR FUND 3,312.39 103.20 - 0 0 VALUEALLIANCE VALUE FUND 0 0 0 0 0 0 CROP PRODUCTION 440.00 0.20 - 0 0 FTN COCOA PROCESSORS PLC 46,741.59 49.00 - 14 5,678 OKOMU OIL PALM PLC. 44,800.00 44.80 - 4 5,640 PRESCO PLC 18 11,318

FISHING/HUNTING/TRAPPING 8,520.00 4.26 - 0 0 ELLAH LAKES PLC. 0 0

LIVESTOCK/ANIMAL SPECIALTIES 1,350.00 0.45 2.27 10 406,800 LIVESTOCK FEEDS PLC. 10 406,800 28 418,118

DIVERSIFIED INDUSTRIES 661.82 0.25 - 0 0 A.G. LEVENTIS NIGERIA PLC. 179.01 0.46 - 4 3,232 JOHN HOLT PLC. 1,903.99 2.93 - 0 0 S C O A NIG. PLC. 36,583.19 0.90 -1.10 114 41,069,814 TRANSNATIONAL CORPORATION OF NIGERIA PLC 13,830.22 4.80 6.67 115 2,490,203 U A C N PLC. 233 43,563,249 233 43,563,249

BUILDING CONSTRUCTION 711.32 4.79 - 1 945 ARBICO PLC. 1 945

INFRASTRUCTURE/HEAVY CONSTRUCTION 27,192.00 20.60 - 7 10,050 JULIUS BERGER NIG. PLC. 165.00 6.60 - 0 0 ROADS NIG PLC. 7 10,050

REAL ESTATE DEVELOPMENT 2,884.22 1.11 - 9 56,653 UACN PROPERTY DEVELOPMENT COMPANY PLC 9 56,653 17 67,648

AUTOMOBILES/AUTO PARTS 954.53 0.20 - 0 0 DN TYRE & RUBBER PLC 0 0

BEVERAGES--BREWERS/DISTILLERS 13,231.85 1.69 - 0 0 CHAMPION BREW. PLC. 242.22 0.89 - 0 0 GOLDEN GUINEA BREW. PLC. 90,681.85 41.40 - 17 40,638 GUINNESS NIG PLC 103,150.34 12.00 - 9 42,989 INTERNATIONAL BREWERIES PLC. 399,845.10 50.00 - 33 123,466 NIGERIAN BREW. PLC. 59 207,093

FOOD PRODUCTS 105,000.00 21.00 1.69 197 2,733,744 DANGOTE FLOUR MILLS PLC 109,200.00 9.10 -5.21 63 1,053,777 DANGOTE SUGAR REFINERY PLC 56,585.24 13.80 - 40 339,427 FLOUR MILLS NIG. PLC. 7,850.90 0.99 3.13 11 347,000 HONEYWELL FLOUR MILL PLC 1,340.10 0.36 - 0 0 MULTI-TREX INTEGRATED FOODS PLC 766.26 4.30 - 1 10 N NIG. FLOUR MILLS PLC. 33,382.92 12.60 - 17 61,391 NASCON ALLIED INDUSTRIES PLC 3,321.07 12.15 - 0 0 UNION DICON SALT PLC. 329 4,535,349

FOOD PRODUCTS--DIVERSIFIED 17,467.28 9.30 -9.71 19 517,408 CADBURY NIGERIA PLC. 882,939.80 1,113.90 -2.55 190 146,347 NESTLE NIGERIA PLC. 209 663,755

HOUSEHOLD DURABLES 1,680.31 22.10 - 0 0 NIGERIAN ENAMELWARE PLC. 5,366.12 4.29 - 27 410,477 VITAFOAM NIG PLC. 27 410,477

PERSONAL/HOUSEHOLD PRODUCTS 23,822.86 6.00 - 22 137,520 P Z CUSSONS NIGERIA PLC. 160,285.65 27.90 - 20 186,995 UNILEVER NIGERIA PLC. 42 324,515 666 6,141,189

BANKING 110,097.31 6.00 -0.83 146 11,634,025 ECOBANK TRANSNATIONAL INCORPORATED 41,723.71 1.44 2.86 93 8,639,707 FIDELITY BANK PLC 774,040.01 26.30 1.15 205 9,172,232 GUARANTY TRUST BANK PLC. 10,312.49 0.35 -5.41 21 1,359,570 JAIZ BANK PLC 10,687.83 0.77 - 0 0 SKYE BANK PLC 69,097.00 2.40 -0.83 381 9,373,948 STERLING BANK PLC. 203,845.27 7.00 - 33 349,228 UNION BANK NIG.PLC. 7,598.07 0.65 -5.80 7 516,486 UNITY BANK PLC 21,987.45 0.57 1.79 15 949,630 901 41,994,826 WEMA BANK PLC.

INSURANCE CARRIERS, BROKERS AND SERVICES 4,117.00 0.20 - 0 0 AFRICAN ALLIANCE INSURANCE PLC 4,435.33 0.64 4.92 7 363,932 AIICO INSURANCE PLC. 17,850.00 1.70 -5.56 10 958,219 AXAMANSARD INSURANCE PLC 2,439.00 0.30 - 1 200 CONSOLIDATED HALLMARK INSURANCE PLC 14,521.84 1.40 -3.45 23 1,778,071 CONTINENTAL REINSURANCE PLC 2,945.90 0.20 - 3 90,245 CORNERSTONE INSURANCE PLC 909.99 0.20 - 0 0 GOLDLINK INSURANCE PLC 1,228.00 0.20 - 0 0 GUINEA INSURANCE PLC. 487.95 0.38 - 0 0 INTERNATIONAL ENERGY INSURANCE PLC 2,050.56 0.28 3.57 14 1,389,412 LASACO ASSURANCE PLC. 1,417.79 0.33 - 1 21,280 LAW UNION AND ROCK INS. PLC. 4,160.00 0.52 - 1 4,000 LINKAGE ASSURANCE PLC 2,346.27 0.21 -4.55 4 276,085 MUTUAL BENEFITS ASSURANCE PLC. 10,613.81 2.01 - 6 97,481 NEM INSURANCE PLC 1,547.90 0.20 - 0 0 NIGER INSURANCE PLC 2,583.62 0.48 - 3 66,753 PRESTIGE ASSURANCE PLC 1,333.75 0.20 - 1 2,000 REGENCY ASSURANCE PLC 1,668.16 0.20 - 3 105,000 SOVEREIGN TRUST INSURANCE PLC 4,483.72 0.48 - 0 0 STACO INSURANCE PLC 2,582.21 0.20 - 0 0 STANDARD ALLIANCE INSURANCE PLC. 2,800.00 0.20 - 0 0 SUNU ASSURANCES NIGERIA PLC. 516.46 0.20 - 0 0 UNIC DIVERSIFIED HOLDINGS PLC. 3,200.00 0.20 - 0 0 UNIVERSAL INSURANCE PLC 2,773.33 0.20 - 0 0 VERITAS KAPITAL ASSURANCE PLC 4,683.96 0.35 - 24 2,414,818 WAPIC INSURANCE PLC 101 7,567,496

MICRO-FINANCE BANKS 11,799.67 2.58 - 0 0 FORTIS MICROFINANCE BANK PLC 2,446.70 1.07 - 0 0 NPF MICROFINANCE BANK PLC 0 0

www.businessday.ng

MORTGAGE CARRIERS, BROKERS AND SERVICES 4,158.00 0.99 - 1 250 ABBEY MORTGAGE BANK PLC 7,370.87 0.50 - 0 0 ASO SAVINGS AND LOANS PLC 5,796.93 1.39 - 0 0 INFINITY TRUST MORTGAGE BANK PLC 2,265.95 0.20 - 0 0 RESORT SAVINGS & LOANS PLC 2,949.22 3.02 - 0 0 UNION HOMES SAVINGS AND LOANS PLC. 1 250

OTHER FINANCIAL INSTITUTIONS 7,200.00 3.60 - 37 410,757 AFRICA PRUDENTIAL PLC 34,703.00 5.90 - 6 43,833 CUSTODIAN INVESTMENT PLC 660.00 0.44 - 0 0 DEAP CAPITAL MANAGEMENT & TRUST PLC 33,268.55 1.68 5.00 71 6,953,153 FCMB GROUP PLC. 1,131.98 0.22 - 0 0 ROYAL EXCHANGE PLC. 348,178.80 34.00 3.03 23 326,963 STANBIC IBTC HOLDINGS PLC 11,400.00 1.90 4.40 70 2,246,465 UNITED CAPITAL PLC 207 9,981,171 1,210 59,543,743 HEALTHCARE PROVIDERS 1,680.29 3.37 - 0 0 EKOCORP PLC. 852.75 0.24 - 2 43,675 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 2 43,675

MEDICAL SUPPLIES 494.58 0.50 - 1 420 MORISON INDUSTRIES PLC. 1 420

PHARMACEUTICALS 366.17 0.50 - 0 0 EVANS MEDICAL PLC. 9,388.62 4.50 - 0 0 FIDSON HEALTHCARE PLC 9,567.01 8.00 - 6 42,628 GLAXO SMITHKLINE CONSUMER NIG. PLC. 3,536.73 2.05 - 12 431,980 968.57 0.51 - 3 1,550 MAY & BAKER NIGERIA PLC. NEIMETH INTERNATIONAL PHARMACEUTICALS PLC 556.71 3.62 - 0 0 NIGERIA-GERMAN CHEMICALS PLC. 325.23 1.50 - 1 20 PHARMA-DEKO PLC. 22 476,178 25 520,273 781.44 0.22 10.00 13 3,524,000 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 13 3,524,000

COMPUTERS AND PERIPHERALS 1,470.89 0.50 - 0 0 OMATEK VENTURES PLC 0 0

IT SERVICES 6,413.06 2.54 - 0 0 CWG PLC 626.40 5.80 - 0 0 NCR (NIGERIA) PLC. 346.47 0.70 - 2 1,700 TRIPPLE GEE AND COMPANY PLC. 2 1,700

PROCESSING SYSTEMS 986.17 0.21 -8.70 17 1,900,000 CHAMS PLC 9,996.00 2.38 - 0 0 E-TRANZACT INTERNATIONAL PLC 17 1,900,000

TELECOMMUNICATIONS SERVICES 1,215,762.01 323.50 - 5 3,401 AIRTEL AFRICA PLC 5 3,401 37 5,429,101 BUILDING MATERIALS 1,985.29 6.85 - 7 3,294 BERGER PAINTS PLC 17,325.00 24.75 - 22 310,123 CAP PLC 190,580.76 14.50 - 12 28,941 CEMENT CO. OF NORTH.NIG. PLC 313.43 0.59 - 0 0 MEYER PLC. 1,959.74 2.47 - 0 0 PORTLAND PAINTS & PRODUCTS NIGERIA PLC 1,156.20 9.40 - 0 0 PREMIER PAINTS PLC. 41 342,358

ELECTRONIC AND ELECTRICAL PRODUCTS 2,256.91 2.09 - 0 0 AUSTIN LAZ & COMPANY PLC 2,747.66 1.56 - 12 94,100 CUTIX PLC. 12 94,100

PACKAGING/CONTAINERS 29,873.33 59.75 - 0 0 BETA GLASS PLC. 388.02 9.10 - 2 11,465 GREIF NIGERIA PLC 2 11,465

AGRO-ALLIED & CHEMICALS 100,754.14 62.50 - 2 60 NOTORE CHEMICAL IND PLC 2 60 57 447,983

CHEMICALS 2,547.42 6.12 - 6 42,000 B.O.C. GASES PLC. 6 42,000

METALS 1,781.64 8.10 - 0 0 ALUMINIUM EXTRUSION IND. PLC. 0 0

MINING SERVICES 852.39 0.20 - 0 0 MULTIVERSE MINING AND EXPLORATION PLC 0 0

PAPER/FOREST PRODUCTS 92.40 0.42 - 0 0 THOMAS WYATT NIG. PLC. 0 0 6 42,000

ENERGY EQUIPMENT AND SERVICES 1,252.54 0.20 - 6 1,534,500 JAPAUL OIL & MARITIME SERVICES PLC 6 1,534,500

INTEGRATED OIL AND GAS SERVICES 43,509.94 3.50 4.48 31 231,270 OANDO PLC 31 231,270

PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 56,974.05 158.00 - 7 7,091 11 PLC 12,248.25 17.65 - 12 9,919 CONOIL PLC 3,260.36 2.50 -3.85 29 180,527 ETERNA PLC. 22,142.18 17.00 - 63 714,101 FORTE OIL PLC. 6,354.80 20.85 - 3 11,382 MRS OIL NIGERIA PLC. 35,921.41 105.80 - 23 14,748 TOTAL NIGERIA PLC. 137 937,768 174 2,703,538

ADVERTISING 1,820.01 0.41 - 0 0 AFROMEDIA PLC 0 0

AIRLINES 17,551.17 1.80 - 1 2,007 MEDVIEW AIRLINE PLC 1 2,007

AUTOMOBILE/AUTO PART RETAILERS 341.14 0.29 - 0 0 0 0 R T BRISCOE PLC.

COURIER/FREIGHT/DELIVERY 2,499.47 4.24 - 6 5,350 RED STAR EXPRESS PLC 361.01 0.77 - 1 2,125 TRANS-NATIONWIDE EXPRESS PLC. 7 7,475

HOSPITALITY 642.33 0.20 - 0 0 TANTALIZERS PLC 0 0

HOTELS/LODGING 4,723.78 3.05 - 0 0 CAPITAL HOTEL PLC 2,972.68 1.43 - 1 1,000 IKEJA HOTEL PLC 7,862.53 3.50 - 0 0 TOURIST COMPANY OF NIGERIA PLC. 41,042.18 5.40 - 1 500 TRANSCORP HOTELS PLC 2 1,500

MEDIA/ENTERTAINMENT 4,800.00 0.40 - 0 0 DAAR COMMUNICATIONS PLC 0 0

PRINTING/PUBLISHING 211.68 0.35 - 0 0 ACADEMY PRESS PLC. 1,072.32 1.39 - 2 15,749 LEARN AFRICA PLC 1,183.82 1.99 - 0 0 STUDIO PRESS (NIG) PLC. 690.26 1.60 - 12 174,465 UNIVERSITY PRESS PLC. 14 190,214

ROAD TRANSPORTATION 497.31 0.30 - 1 50 ASSOCIATED BUS COMPANY PLC 1 50

SPECIALTY 757.44 3.20 - 0 0 INTERLINKED TECHNOLOGIES PLC 1,126.31 0.20 - 1 300 SECURE ELECTRONIC TECHNOLOGY PLC 1 300

https://www.facebook.com/businessdayng

@Businessdayng

leaderSHIP

BUSINESS DAY Tuesday 20 August 2019 www.businessday.ng

Ayoola Oduntan: An innovative farmer solving Nigeria’s malnutrition problem MICHAEL ANI

N

igeria has the second highest burden of stunted children in the world, with a national prevalence rate of 43.6 percent of children under the age of five, the United Nations Independent Children Education Fund (UNICEF), said in a 2018 Global Nutrition report.

In nominal terms, the report noted that an estimated 14.3 million children in Nigeria suffer from severe acute malnutrition (SAM), but only two out of every 10 children affected is currently reached with treatment while about seven percent of women of childbearing age also suffer from acute malnutrition.

This high rate of malnutrition according to the report, tends to pose significant public health and development challenges for the country. Stunting, in addition to an increased risk of death, is also linked to poor cognitive development, a lowered performance in education and low productivity in adulthood - all contributing to economic losses estimated to account for as much as 11 percent of a country’s Gross Domestic Product (GDP).

To change the narrative of the burden of malnutrition in the country, especially in women and children, Ayoola Oduntan, group managing director of Natnudo Foods, pioneered a simple but transformative technique to increase the nutritional value of households in rural communities through the Noiler bird initiative.

The Noiler bird initiative is a rural development effort that is targeted at reducing poverty especially among women by improving their quality of life through the rearing of the birds for chicken and egg production.

Since it flagged off in 2010, the initiative has empowered thousands of women across various rural communities in the country.

Oduntan’s strategy was to get the Noiler birds to households of rural families across the country, in order to help in significantly increasing protein consumption in rural communities while generating employment, and improving the livelihood of women involved in the venture of rearing the birds as well as in transportation.

For him, because the initiative is directed towards women, children can easily get the needed daily protein requirements for their development. Furthermore, the women will also be able to generate income to support their households through

Ayoola Oduntan

the sales of eggs and chicken.

“We saw this problem and we started the research and development into Noiler without knowing its destination but by early 2010, it was clear that we have a product that could change the face of malnutrition or under nutrition in Africa and that product was name Noiler to honour Nigeria,” Oduntan said in a recent interview.

Noiler is a rural poultry bird popular among the rural population. It is what some call the dual-purpose birds that survive in backyards of village households, eating waste from the kitchen and from the farm with a little supplementary feeding if it is available, Oduntan explained. It will produce four times the number of eggs of the indigenous birds and it will grow two-three times the size.

In the past, there have been other breeding companies in Nigeria particularly in the universities that have come up with similar initiatives but research institutes mainly did these. For instance, the Federal University of Agriculture Abeokuta (FUNAAB) developed the FUNAAB Alpha breed; Ahmadu Bello University Zaria had the Shika Brown breed.

Oduntan noted the fact that the bird grows so well, produces well, and could survive in the backyard of the average village household is

what makes it the genius.

The initiative made the firm to become the only commercial company that is privately owned to carry out such research work.

The development of Noiler also

”

We saw this problem and we started the research and development into Noiler without knowing its destination but by early 2010, it was clear that we have a product that could change the face of malnutrition or under nutrition in Africa and that product was name Noiler to honour Nigeria

made the firm the only pure line breeding company in Africa.

According to Oduntan, everything that has to do with the Noiler including the pure lines, grandparent stocks and the parent stocks was researched and developed in Nigeria. “We did not need a dime to import Noiler,” he said.

The Noiler has found its way to five different West African countries, which has helped in becoming a foreign exchange earner for the country.

He said in other to get the birds to every nook and crannies in country, the company got representatives who educated the rural dwellers on the benefits of the initiative.

“We have no fewer than 42 graduates alongside six veterinary doctors who are going across states showing rural dwellers videos on the impact that eating protein would have in their lives, so as to encourage them to take up the initiative by eating also and not just selling.

We are taking the message to the grass roots level,” Oduntan told Businessday.

Across Afr ica, the Noiler bird initiative has become well known and has gotten the buyin of both government and non-governmental organizations. In 2019, the international livestock institute in Ethiopia, shared a research work that

compared Noiler birds with breeds from other initiatives across the world. The Noiler came tops, positioning as the number one dual-purpose bird in terms of performance.

Since the inception of the initiative in 2016 through the first quarter of 2019, the company has sold over 12 million of the Noiler birds. In 2018, it sold 6 million and this year it is targeting about 10 million of the birds, Oduntan said.

The firm has also partnered with various states governments in ensuring that more of the country’s population benefit from the initiative. In 2017, the firm through the Noiler bird initiative partnered with the Edo state government to empower rural women in state.

Oduntan shares the school of thought that the success of a person is either limited or expanded by the success of those around them.

“If you are successful alone and surrounded by unsuccessful people, then you are actually not successful. So for me, it gives me great concern to look around and see the high rate of poverty, or to be told that Nigeria has one of the highest mortality rate in the world, high maternal mortality and also to see that 40 percent of our children are malnourished or have a stunted growth,” he said.

The group Oduntan presides over has four subsidiaries; Amo Byng Nigeria Limited which produces animal feeds, cattle feeds and fish feeds; Amo farm Sieberer Hatchery Limited that produces day-old chicks, including Amo pullets, Amo Crocker, Amo broiler and Noiler. The other two are Diversay Solutions LTD that is into the local production of veterinary pharmaceuticals and disinfectants and; Natnudo foods, a subsidiary in charge of producing ready to eat chicken, beef, eggs and fish.

Ayoola Oduntan was at a time, National President of the Poultry Association of Nigeria, a position he held for four and half years between 2014 and 2018.

In recognition for his outstanding performance in positioning the country’s business landscape at the forefront of global business concerns, Oduntan was among other business leaders who were given special recognitions at the 2019 BusinessDay Leadership awards.

O duntan was recognized as CEO of the most diversified business group of the year while one of his subsidiaries, Amo Farm Sieberer hatchery was named the Agribusiness of the Year.

Published by BusinessDAY Media Ltd., The Brook, 6 Point Road, GRA, Apapa, Lagos. Advert Hotline: 08034743892. Subscriptions 01-2950687, 07045792677. Newsroom: 08169609331 Editor: Patrick Atuanya. All correspondence to BusinessDAY Media Ltd., Box 1002, Festac Lagos. ISSN 1595 - 8590.