Businessday 21 may 2018

MTN Nigeria shareholders say in the dark as IPO approaches ... seek clarity on valuation, percentage of stake being disposed IHEANYI NWACHUKWU

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he minority shareholders of MTN Nigeria have complained about being kept in the dark by the

MTN Group as the listing of the Nigerian unit fast approaches.

Some of the things they told BusinessDay in confidence are that they (MTN Nigerian minority share-

holders) need to know how much of the shares MTN Group wants to sell in the Initial Public Offering (IPO) expected anyContinues on page 42

news you can trust I **monDAY 21 may 2018 I vol. 15, no 58 I N300

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L-R: Ronke Soyombo, director-general, Lagos State Quality Assurance Board, Ministry of Education; Otto Orondaam, founder/ executive director, Slum2School Africa; Alero Ayida-Otobo, board chairperson, Slum2School; Cherry Eromosele, group chief product and marketing officer, Interswitch, and Abosede Adelaja, board secretary, SUBEB, Lagos State, during the commissioning of the new STEM and Innovation Lab in Makoko, Lagos, Nigeria.

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Intrigues, betrayal as payment solution providers battle for N8.9trn TSA T S

NSE 30 earnings per share hit highest level in four years OLALEKAN IPELE & ABISINUOLA DAVID-OLUSA

hope moses-ashike

ystemspecs grip on revenue collections and payments for the federal government into Treasury Single Account (TSA) is set to be bro-

ken but in a way that could also leave indigenous tech providers broken and disappointed.

Systemspecs is the indigenous technology firm that created Remita, the technology behind the successful implementation of the Federal Government’s

treasury single account scheme.

The TSA has enabled the government to keep track of all its revenues across all its MDAs. So far it is estimated that N8.9 trillion has gone through the TSA all powered by Remita, an indigenous technology.

Interestingly, even though the government has successfully operated TSA and counts it as one of its biggest successes, Systempecs, which developed the scheme has not been paid for Continues on page 4

Performance of Norway state-owned Equinor shows NNPC still chasing shadows

Inside N10bn micro grant: Dangote lifts 25,000 women in Niger P. A1 Systemspecs answers questions on Remita

DIPO OLADEHINDE

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s oil prices keep rallying, the incapacity of the Nigerian National Petroleum Corporation (NNPC) to operate as a fully integrated oil company is short-changing Nigeria as Oslo and New York Stock Exchange listed Statoil which recently changed its name to Equinor continues to show how a stateContinues on page 42

he broad equity market represented by the 30 most capitalized and liquid stocks on the Nigerian Stock Exchange (NSE) have seen Earning per share (EPS) hit the highest level since 2014, according to data analysed by BusinessDay. The NSE 30 index with a marContinues on page 42

See interview on page A3 Roosevelt Ogbonna, group deputy managing director, Access Bank plc (3rd r), receiving overall winner of the Global Reach Trade Finance (GRTF) award (Nigeria) on behalf of the bank from Ulf-Peter Noetzel, managing director, global head trade finance-financial institutions, global transaction banking, Deutsche Bank AG (2nd r); Andreas Voss, chief country representative, Deutsche Bank AG, Lagos Representative Office (3rd l); Adeola Azeez, deputy country representative, Deutsche Bank AG, Lagos Representative Office (r); Ade Bajomo, executive director, Access Bank plc (2nd l), and Banjo Adegbohungbe, general manager, corporate operations, Access Bank plc, during the Deutsche Bank Global Reach Trade Finance (GRTF) and Straight Through Processing (STP) Award 2017 and 2018 dinner in Lagos. Pic by Olawale Amoo

Design takes pole position in Nigeria ‌ As Design of The Year Festival debuts, partners BusinessDay P. 7

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Analysts forecast average Q1 GDP of 2.36% ahead official data Endurance Okafor

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nalysts expect the Nigerian economy to expand further in the first quarter of 2018, fuelled by improved dollar liquidity, positive expansion in Purchasing Managers’ Index (PMI) and consecutive decline in inflation rate in the period under review.

This is ahead of an official statement scheduled to be released today by the National Bureau of Statistics (NBS), the Nigeria data agency.

The mean estimate of five economists polled in a BusinessDay survey was 2.36 percent growth in Q1 of 2018, in what will be the fourth quarterly consecutive positive expansion since Africa’s largest economy exited recession in Q1, 2017 helped by

increased oil production and prices, further improvements in foreign exchange liquidity and a rebound in non-oil activity.

Ayo Akinwunmi, the Head of Research at FSDH Merchant Bank had the highest prediction for the Q1 GDP figure.

“I forecast a 3.55 percent growth rate in the Gross Domestic Product (GDP) for Q1 2018, this is following the unexpected oil price increase, as this has brought more confidence on the economy, as reflected in the PMI values released in the last few months,” Akinwunmi told BusinessDay by phone.

Johnson Chukwu, MD of Cowry Asset Limited expects over 2 percent growth in Q1 buoyed by non-oil sector growth being positive coupled with expansion of the PMI, declining inflation rate and increase in hotel occupancy rate.

Tajudeen Ibrahim, head of research at Lagos-based investment firm, Chapel Hill Denham, said through a telephone response that they expect the real GDP growth at an estimate of about 2.1 percent year-on-year in Q1 2018, which is supported by recovery of non-oil sector, positive expansion of PMI. “Improved availability of the US dollar for businesses and manufacturers to carry out their various transactions and the PMI values which were well above the 50 percent index point coupled with the downward slide in inflation rate are the drivers of the GDP forecast for the period,” Ibrahim said.

Bismarck Rewane, CEO of advisory firm, Financial Derivatives Company, however had the least forecast for the GDP growth to expect as the Q1 figures.

“The growth for the period is

going to be flat, it is not going to be like the 1.9 percent recorded in the fourth quarter of last year but it is going to be slightly lower or flat at around 1.7-1.8 percent year-on-year in the period under review owing to flat oil prices,” Rewane said.

After five straight quarters of contraction between the first quarter of 2016 and early 2017, Africa’s largest economy exited recession in the second quarter of 2017, after expanding 0.72 percent.

That was soon followed with a 1.4 percent growth in the third quarter, as a recovering oil sectorwhich was benefitting from a price rally and stable production- and strong agricultural output helped lift growth.

In Q4 of 2017, Nigeria’s economy grew by 0.83 percent while overall; the GDP growth reached

1.92 percent up from the previous quarter growth, a clear positive trajectory in 2017.

Into Q1 2018, a flurry of macroindicators from oil prices and production; to the trend in the Purchasing Managers Index (PMI), declining inflation rate have leaked clues on what could be the fourth successive quarter of GDP expansion.

Brent the benchmark against which Nigeria’s crude is priced rose beyond a four year high at $75 on Monday, 7 May, 2018; highest since November 2014 as traders braced up for US withdrawal from Iran, the thirdbiggest producer in the Organization of Petroleum Exporting Countries (OPEC).

This is after it closed the year 2017 at around $66.87 from about $53 per barrel at the start of last year.

Intrigues, betrayal as payment solution...

Continued from page 1

its services for at least 17 months.

Sources tell BusinessDay that the last time Systemspecs got paid for collecting revenues on behalf of the government was in April 2016.

The firm charges flat rate of 1.0 percent on all collections made on behalf of the government. This contract was signed in 2011. However, it is also understood that the FG is seeking to renegotiate this contract and is proposing a 1 percent charge on collections based on a cap of N5, 000 per transaction.

This new contract will reduce the initial proposed revenues to Systemspecs by as much as 90 percent. But even while this new contract is yet to be signed, and while the federal government is still owing Systemspecs unpaid commissions for 17 months, a memo recently released by the CBN could end the control Systemspecs has over TSA. The CBN in a circular dated April 26, 2018 has announced that all licensed Payment Solution Service Providers (PSSP) would be eligible to participate in the sweeping of Federal Government collections to the CBN under the TSA e-collection framework via Nigeria Inter-Bank Settlement System (NIBSS) without direct integration with the CBN. This circular effectively breaks the monopoly that Remita, a product created by Systemspecs has had on the federal government TSA operations in the country and replaces it with a NIBSS monopoly.

“Accordingly, we advise all PSSPs to work on their various front end solutions to ensure that they conform to the new standard and also establish connectivity with NIBSS before the go-live date,” the circular signed by Dipo Fatokun, director, banking and payments system department reads.

BusinessDay gathered that the go-live date will be at the end of second quarter or early third quarter. At that time, Remita will no more be the sole collector for TSA, rather it would be one of the competitors.

The implication is that PSSP and

other players who have been left out of the massive TSA payments, which total about N8.9 trillion a year, can now favourably compete.

Banks could also bypass PSSP and make payments to the CBN directly through NIBSS. “There are no problems with Remita, just allowing room for more players and engendering competition,” Fatokun said.

But sources in the banking industry are questioning why the CBN will be kicking out Systemspecs and replacing it with NIBSS when there are no issues so far with Remita.

“The question is, why the CBN is trying to fix a system that is not broken. This is even more so when Systemspecs is yet to be paid for services it has rendered so far,” one source told BusinessDay. There is also fear in the tech community that the way the federal government has treated Systemspecs could discourage other tech companies from designing solutions for the government.

Sources at Systemspecs say they are not worried about the new development as they have always put the national interest first. But our source also disclosed that the last time the federal government paid Systemspecs a commission for using the Remita platform was in April 2016. Payments were stopped after the Senate raised questions about the platform and since then, it has yet to resume.

Frustrated by the lack of payment, some players in the federal revenue collection system, especially some of the banks are said to have stopped collecting or are even charging for collections.

TSA was an initiative of the Central Bank and the Federal Government that commenced in September 2015. The solution was implemented for the government by SystemSpecs using their Remita platform. The company successfully bid and was given the mandate to implement the scheme ahead of other bidders including NIBSS, BusinessDay learnt. But NIBSS is now about to be brought to implement the scheme without any competitive bidding process.

L-R: Zouera Youssoufou, managing director/CEO, Aliko Dangote Foundation; Aliko Dangote, founder/chairman, Aliko Dangote Foundation; One of the beneficiaries receiving the cash, and Abubakar Sani Bello, governor, Niger State, at the launch/disbursement of N250m to 25,000 vulnerable women in Niger State.

When contacted, Ade Shonubi, managing director/CEO, NIBSS, said he only knows that the CBN is trying to allow more PSSPs to participate in TSA collection but does not know the model and how NIBSS is going to be involved.

Remita was integrated into CBN, Office of The Accountant General of the Federation (OAGF), and the banks such that payments made to the FGN and its MDAs reflect in their CBN accounts instantly. Remita also helps the government to make payments of salary, vendors, and other local payments.

So far, a total inflow of N8.9 trillion from Ministries, Departments and Agencies of government has been recorded by the Federal Government since the introduction of TSA, according to Ahmed Idris, Accountant-General of the Federation, who spoke in March in Abuja.

Other players in the industry have also claimed that the Remita platform for collections have become unstable which Systemspecs denies.

“This is just a case of trying to give a dog a bad name just to hang it,” said a source at Systemspecs.

But this claim of an unstable platform is what is said to have

forced the CBN to engage with NIBSS, and Unified Payment Services Limited (UPSL) to become alternative collection platforms and prevent Remita to become a single failure point.

The CBN subsequently sent out a circular to all banks and Payment Services Providers that it is now mandating an aggregator model for TSA, the effective date it is yet to be announced. In a separate document previously sent, the NIBSS, the aggregator, would be charging just 0.1 percent as fees. This is against the 1.0 percent charged by Remita.

“Introducing other PSSPs will not degrade payment. It will give government options and drive down costs,” said Johnson Chukwu, managing director/CEO, Cowry Asset Management limited.

But sources in the tech community note that under the new proposal, revenue collections could become more complicated for payers.

Instead of a single payment point, which Remita provides, you will now see multiple payment points which would mean that the contractor at any point in time is considering what payment option

to use. There is also the fear that the 0.1 percent collection fee allegedly being proposed will not be profitable for many of the service providers in the long run. This is beside the fact that the government has not been faithful to the contract it signed with Systemspecs, which also raises the risk that it would also not be faithful with the new service providers it is seeking to engage.

Another area of TSA which NIBSS and other PSSPs are fighting to get into is lucrative TSA payments for which Remita charges between N100 and a cap of N5,000 per payment made on behalf of the Federal Government.

However, sources at Systemspecs once more told BusinessDay that the charges are subject to negotiation which the federal government has already engaged Systemspecs on.

Sources have told BusinessDay that NIBSS has offered N10 to FG for payments with faster delivery.

Some tech providers believe this offer could also be deception if NIBSS is not putting a cap on the charges per payment. The government could actually end up paying more than N5,000 per payment if there is no cap.

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Nigeria demonstrates potential to earn more on VAT … generates N269.79bn in Q1 … rate hike above 5% in offing IHEANYI NWACHUKWU

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igeriahasagainshown the possibility of improving revenue from Value Added Tax (VAT) as disclosed in the latest data by National Bureau of Statistics (NBS).

A Value-Added Tax is a consumption tax placed on a product whenever value is added at each stage of the supply chain, from production to the point of sale.

The sectoral distribution of Value Added Tax (VAT) data for first-quarter (Q1) of 2018 shows that N269.79billion was generated as VAT as against N254.10 billion generated in fourth-quarter (Q4) of 2017 and N221.38 billion in Q1 of 2017.

The first-quarter 2018 revenue from VAT represents 6.17percent increase quarter-on-quarter and 21.87percent increase yearon-year (yoy), according to the National Bureau of Statistics.

Other manufacturing generated the highest amount of VAT with N30.14billion generated and closely followed by Professional Services and Commercial and Trading both generating N16.58billion and N14.93billion respectively while Mining generated the least and closely followed by Pharmaceutical, Soaps & Toiletries and Textile and Garment industry with N46.25million, N243.44million and N285.43million generated, respectively.

Out of the total amount-

ed generated in Q1 2018, N121.40billion was generated as non-import VAT locally while N98.40billion was generated as non-import VAT for foreign. The balance of N50.00bn was generated as Nigeria Custom Service (NCS)-import VAT. In Nigeria, sustained economic development is possible if there is improved inflow of tax revenue. This will help the economy achieve a level of social infrastructure that will stir up investment, which in turn will bring about further economic growth.

The International Monetary Fund (IMF) says that the typical developing economy collects just 15percent of GDP in taxes, compared with 40percent collected by a typical advanced economy.

For instance, Nigeria’s VAT rate has remained at 5 percent and one of the lowest across Africa. Value-Added Tax in South Africa was set at a rate of 14 percent and remained unchanged since 1993.

“Recent statistics put Nigeria’s tax to GDP ratio at 6percent which is one of the lowest in the world. Essentially tax’s contribution to the economy is low. To make Nigeria more competitive, we have to build our economy and the key issues include speedy implementation of tax policy,” said Taiwo Oyedele, Partner, West Africa Tax Leader.

The Nigeria Tax Policy (NTP) Implementation Committee has recommended two Executive Orders and five Amending Bills,

which among others include Value Added Tax Act (Modification) Order; and Value Added Tax Act (Amendment) Bill.

“The proposed changes to the tax laws are expected to: increase Governments’ revenue simplify paying taxes and doing business promote Micro, Small and Medium Enterprises protect most vulnerable persons in the society remove obsolete, ambiguous and contradictory provisions in the law,” said according to Abiola Sanni, a professor of tax and fiscal matters at University of Lagos.

“It is expected that the drafts Executive orders and Bills will be exposed to key stakeholders for their review and feedback. The challenge is to ensure that the Executive Orders are signed and the Amending Bills are enacted into Acts of National Assembly timeously,” he said.

The country announced on February 21, 2018 that the VAT rate would be increased by one percentage point to 15percent, while some of their basic foodstuffs, as well as paraffin, remain zero rated.

For South Africa, the new VAT rate became effective from the April 1, 2018. VAT rates across other African Countries show: Togo at (18%); Tunisia (18%); Uganda (18%); Zambia (16%); Zimbabwe (15%); Ghana (15%); Equatorial Guinea (15%); Ethiopia (15%); Egypt (14% -15% on Communication Services); Burkina Faso (18%); Burundi (18%), and Cameroon (19.25%).

ECOWAS parliament group urges increased participation of women in politics

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conomic Community of West African Female Parliament Association (ECOFEPA), on Friday called for proper sensitisation of women on the need to participate in politics, to reduce gender disparity.

Stella Oduah, the Chairman of ECOFEPA, made the call while briefing newsmen at a town hall meeting held in Abuja.

The meeting was on the sideline of activities to mark the First Ordinary Session of ECOWAS Parliament, which started on May 10 and expected to run till May 30.

Oduah decried poor level of women involvement in politics, which has contributed to gender inequality within the West Africa sub-region.

According to her, women are not fully participating in the affairs of their various nations.

“We are advocating for adequate engagement of women and the girl child for their effective participation in politics, to ensure it is mainstreamed in the affairs of ECOWAS. “This is to ensure that our capacity is properly utilized for the betterment of ECOWAS, because failure to do so means that we are underutilising our collective efforts and capacity.

“The disparity is that our women barely participate in politics, this is getting worse in Nigeria, today at national level we have six per cent women representation and it is totally unacceptable.

“Some have accomplished far more than that, but ultimately we want to have collective accomplishment of at least 30 percent.

What is important to us is that we must embark on sensitisa-

tion and to empower women,” she said.

She described the association as a group of female parliamentarians who sought to encourage women participation and inclusion in political affairs.

Oduah said collaboration with gender oriented agencies and European Union to create relevant awareness on need for women participation in politics, was one of the achievements, so far recorded by the organisation.

She added poor funding and lack of executive powers to implement its mandates, to be major challenges that hinder the growth of the association.

She reiterated that women who live within rural community with the capacity to represent and become the mouth piece of their people should participate actively in affairs that concern their countries.

She said that there was the need for member countries of ECOWAS to come up with the legal framework, to achieve the desired goal.

“We are hoping that countries that are gender friendly will help us in this advocacy; by so doing

there will create enabling environment to achieve target in the sub-region.

“So, we are appealing, we are advocating and we are sensitising, we are mentoring collectively to have that showcase in itself,” she added.

She revealed the plans by the association to embark on sensitisation campaign round political headquarters in Abuja and later on in different countries, to achieve meaningful growth.

She also said the organisation would organise a summit on Monday May 21 and Tuesday May 22, to sensitise more women on the importance of women participation in politics.

Also speaking, Sintiki Ugbe, director, Gender, Youth/Sport, Civil Society, Employment and Drug Control, of ECOWAS, said that gender inequality often posed barrier to representative democracy.

She stated that the best place to bridge the disparity is through election, because it is key component for democracy and good governance, therefore the need for advocacy document to mainstream women politics.

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The Dr. J.K. Randle colloquium BASHORUN J.K RANDLE Randle is Chairman/Chief ExecutiveJK Randle Professional Services Chartered Accountants

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• Continued from last week ven more remarkable was the return of Bill Gates who had departed from Lagos after attending the dinner hosted by Alhaji Aliko Dangote in Lagos to commemorate the wedding of his daughter Fatima to Jamil Abubakar, son of former Inspector General of Police, M.D. Abubakar on Friday March 23, 2018.

Gates did not retract even a single word or sentence from what he said at the Special Session of the National Economic Council heldon Thursday March 22, 2018 at the Presidential Villa.

For good measure, he added: “Nigeria is one of the most dangerous places in the world to give birth, with the fourth worst maternal mortality rate in the world, ahead of only Sierra Leone, Central African Republic, and Chad. One in three Nigerian children is chronically malnourished.”

The Nigerian government’s Economic Recovery and Growth Plan identifies “investing in our people” as one of three “strategic objectives.”

But the “execution priorities” don’t fully reflect people’s needs, prioritizing physical capital over human capital.

Here you can see Nigeria’s per capita GDP growth from 2000 until today. If current education and health trends continue—if you spend the same amount in these

EMEKA UCHEAGA Ucheaga is Managing Partner, Emeka Ucheaga Advisory

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n early September 2011, then CBN Governor Sanusi Lamido Sanusi announced Nigeria’s desire to hold up to a tenth of its $32 billion foreign exchange reserves in Chinese Renminbi (Yuan) as a diversification strategy to protect Nigeria’s sovereign wealth after the United States credit rating got downgraded by S&P from AAA to AA+ due to fears of a rising US government budget deficit and ballooning debt burden.

Sanusi believed that China would allow Nigeria to use the yuan to purchase higher yielding Chinese government debt which are only open to a small group of qualified foreign investors. Sanusi asserted that Nigeria may allow China to settle oil purchases in Yuan which will allow some of our foreign exchange earnings to be in Yuan and not all in dollar. He even talked up the possibility of a currency swap deal with China. At the time, Nigeria held 79% of foreign reserves in dollars and the rest were held in Euros and Swiss francs.

Three years down the road nothing significant had happened except Sanusi was no longer CBN Governor.

Then Deputy CBN Governor Kingsley Moghalu said in 2014 that Nigeria held

areas and get the same results—per capita GDP flatlines, with economic growth just barely keeping up with population growth.

In 1978, Dr. Olikoye RansomeKuti, who later became the Nigerian minister of health, helped establish primary health care as the global standard. Tragically, 40 years after Dr. Ransome-Kuti helped other countries set a course for the future, the Nigerian primary health care system is broken. The evidence for this can be found in the epidemic of chronic malnutrition, or stunting.”

I really think that of all the countries I have seen, it really hangs in the balance. If they can get health and education right, they can be an engine of growth, not just for themselves but for all of Africa.”

However, he hesitated somewhat when he came to the penultimate paragraph of his address: These young people are entitled to not only dream, they deserve the opportunity to actualise their dream.

This was followed by the impromptu intervention of Professor Kingsley Moghalu, who declared: “I am here in person. No “FIZZING” for me. My presence at this epochal event is by the grace of the Almighty in order to enable me to launch my presidential ambition as a contestant in the 2019 Presidential Election. My manifesto is “BIG” – (Build, Innovate and Grow).

I am fully in support of Bill Gates. Our programme of economic rebirth will decentralize the national grid and shift power generation towards renewable energy sources.

We will undertake a fundamental reform of our healthcare and education systems.

The Nigerian Diaspora will play a central and institutionalised role in the building of our human capital.

Nigeria is now the poverty capi-

I am fully in support of Bill Gates. Our programme of economic rebirth will decentralize the national grid and shift power generation towards renewable energy sources.

We will undertake a fundamental reform of our healthcare and education systems. tal of the world. According to the World Poverty Clock, we overlook India in February 2018 as the country with the greatest number of people who live in extreme poverty.

India has a population six times the size of Nigeria’s.”

Regardless of the fact that Nigeria’s former Minister of Foreign Affairs (from 1992 to 1993) and Minister of Defence [Navy] (from 1961 to 1965) died on February 6, 2012, he turned up to declare his witness statement live on the genesis of corruption in Nigeria: “I was shocked to the marrow to discover that the Nigerian government refurbished an old ship for £18,000,000 (eighteen million pounds). This was shortly before I left the Ministry of Defence, where I was the Minister for the Navy. The Minister of Defence, Alhaji Muhammad Ribadu (grandfather of the current First Lady, Hajia Aisha Buhari. He died in 1965) approved £6.5 million for the flagship which I purchased for the Nigerian Navy for £2.8million from the Netherlands, thereby saving the nation £3.7 million.

In addition to the ship, the then Netherlands Minister of Defence, Piet de Jong who was my friend also gifted two ships to Nigeria as his country’s

contribution to the Nigerian Navy.

In essence, what I delivered was not only a befitting flagship for the Nigerian Navy for £2.8 million after a special discount of £3.7 million but the retired partners of KPMG who are still awaiting their gratuity and pension have issued an auditor’s report which confirms that the £2.8 million would be paid back over ten years, interest free.

Thereafter, kickbacks and corruption became the order of the day (and night!!). It was one of those ships that was used as a conduit pipe to siphon £18 million from the government treasury.”

When the inimitable and indefatigable Bishop Matthew Kukah, the Bishop of the Roman Catholic Diocese of Sokoto took the floor, he caught us all off guard. We thought he was about to offer prayers. Instead, he proceeded to read his “Letter To President Muhammadu Buhari”: “Mr. President, I have decided to speak to a cross section of Nigerians, beginning with you and going right down to the many nameless men and women who do not even qualify to be classified as the ordinary man in the street because they live on water and have no streets on which to walk.

I believe that this country is so split both vertically and horizontally today that all of us must honestly identify our many sins of omission and commission so that we can honestly seek a solution.

This is a time for us to genuinely face what looks to me like an impending calamity.

The gathering clouds are clear for us to see and even those who cannot see can hear the rumbling and rolling sound of thunder. We ignore them at our own risk. I therefore state as follows: You know Sir, that you rode into town like a knight in shining armour, carrying the joys, pains, anxieties

and fears of a people whose broken dreams had littered and turned the landscape into a kaleidoscopic scenery of desolation and despair.

In your campaigns, you had promised to restore a sense of national pride in us by slaying the dragon of corruption, banishing the retrogressive scourge of Boko Haram, bringing back our daughters from Chibok and making our country and citizens truly safe.

We waited in hope right to the end of the first year, but somehow, amidst some hazy weather, all we heard was the sound of screeching tyres with the plane carrying our hopes seemingly unable to take off.

It finally did but we had barely gained altitude when sickness struck and you spent the better part of a year seeking healing. The nation prayed for you and miraculously, you recovered. Evidently, you had been saved for a purpose. Our prayer is that this realization will help you understand that you have a date with history and divine judgment.

For now, before your eyes and in your hands, our country, our communities, our people are all in a state of stupor. We have never felt so alienated from one another. The bogeyman of religion, region and ethnicity, which we thought we had overcome by the sheer nature of your support base, have come back with a vengeance to haunt and threaten the very foundation of our existence.

Mr. President, you are too distant from your people. There is a sad feeling that you do not share in the pain and suffering of your people.

You must very quickly find a way of connecting with your people before the devil takes over the space.

For taking on this challenge and connecting with Nigerians, happy Easter.”

Send reactions to: comment@businessdayonline.com

Not yet Uhuru: This currency swap deal isn’t exactly what you thought We forget too soon only 2% of its external reserves in Yuan which is miles away from the 10% target Sanusi set in 2011, 85% of our foreign reserves was now held in dollars, up from 75% in 2011 (so no diversification essentially) and there was noYuan-Naira currency swap deal in place and Nigeria was still not settling oil contracts with China in Yuan (so the roundtripping between Yuan-Dollar-Naira continued).

Finally, progress on currency swap deal IMF announced in November 2015 that it has approved for the Chinese yuan to be added to its elite Special Drawing Rights basket of reserve currencies, which includes the U.S. dollar, the euro, the pound, and the yen, paving the way for developing countries like Nigeria to comfortably hold Yuan in their foreign exchange reserves. In April 2016, Central Bank of Nigeria signed an agreement with the Industrial and Commercial Bank of China (ICBC) to allow renminbi transactions among Nigerian banks and the inclusion of the Chinese currency in Nigeria’s foreign exchange reserves. Now it gets a little confusing, didn’t CBN say they already had yuan in Nigeria’s foreign reserve back

in 2014? Anyway, the framework for the naira-yuan currency swaps deal was agreed but the size of the deal was conveniently left unreported. Again, the deal got stalled until 2018.

Mission accomplished In May 2018 CBN announced that it has signed a currency-swap agreement worth $2.5 billion to boost commercial ties with China by providing adequate local currency liquidity to Nigerian and Chinese industrialists and reduce the need to use dollar in their bilateral trade (so less roundtripping). According to CBN, the deal will also help to improve the speed, convenience and volume of transactions between the two countries.

CBN explained that it will be easier for most Nigerian manufacturers, especially small and medium enterprises (SMEs) and cottage industries in manufacturing and export businesses to import raw materials, spare-parts and simple machinery to undertake their businesses by taking advantage of available RMB liquidity from Nigerian banks. In our opinion, while the swap deal looks great when you superficially analyse its benefits, a critical examination will show that this deal isn’t as fantastic as we initially thought.

Most likely outcome Swap money will be depleted in 4 months not 3 years. The $2.5b currency swap deal is a three-year agreement between Nigeria and China but both parties are aware that based on the quantum of trade between both nations, the funds are not expected to last beyond 4 or 5 months. Trade deals between Nigeria and China is projected to exceed $10b in 2018, with swap arrangement of just $2.5b, this deal is looking more like a pilot test than a real deal since simple arithmetic will show that the deal won’t last up to 5 months in the best-case scenario.

We project 2018 trade deals between Nigeria and China will exceed $10b from $9.2b in 2017 buoyed by rising crude oil prices (which will push Chinese crude import spending higher) and continued economic recovery in Nigeria which should help boost Nigerian import spending on Chinese products. Therefore, a two-year currency swap deal of $20b representing 40% of our external reserves may have been more appropriate: China is Nigeria’s second largest trading partner so why not?

Dollar demand will ease but so also will dollar supply, thus eroding

most of the benefits that would have come out of the swap deal in terms of strengthening the Naira. Yes, for the first four or five months while the currency swap funds are available, demand for dollar by Nigerian businesses to pay for Chinese imports will disappear. But so also will the supply of dollars which China uses to fund its infrastructure projects here in Nigeria.

Previously, China would have had to use its dollars to purchase naira to settle local contractors and construction workers, this won’t happen when the swap fund is available. As at January 2017, China had already invested or financed up to $22b of infrastructure projects here in Nigeria, another $23b projects are still on-going with another $40b worth of projects in the pipeline according to Mr. Wang Yi, China’s Foreign Affairs Minister.

These figures make China an invaluable source of foreign exchange for the Nigerian economy.

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Monday 21 May 2018

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COMMENT

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As inflation breaks below MPR, will CBN now cut rates?

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ll eyes are on the next meeting of the Monetary Policy Committee (MPC) today and tomorrow (on May 21 and 22) to see if the members would move to cut rates. This follows the release on May 15 of the latest figures from the National Bureau of Statistics (NBS) showing that the inflation rate for April has dropped to 12.48 percent, the lowest since March 2016. The inflation rate first broke the single digit rate in February 2016 rising to 11.4 percent from 9.6 percent in January 2016. A steady increase in the inflation rate forced the MPC to raise the Monetary Policy Rate (MPR) by 200 basis points or two percent in July 2016 to its current rate of 14%.

At the point the MPC raised the MPR in July 2016, the inflation rate had jumped to 17.1 percent and it kept rising, hitting a high of 18.7 percent in January 2017. With inflation on the rise, the MPC resisted all calls, especially from the Minister of Finance, Kemi Adeosun to cut interest rates, rightly concerned that such a cut will lead to a further spike in inflation. So the CBN has kept the MPR unchanged since July 2016, in a bid to walk a fine line between the government’s desire for lower interest rates and its own desire to ensure that a cut in rates does not complicate an already challenging

BOLADE AGBOLA Bolade Agbola MD/CEO LAM Agro Consult Limited is the Author of Agricultural Finance A Practical Guide For lenders And Entrepreneurs

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h e e s c a l at i o n o f t h e bloody clashes between herdsmen and farmers, and cattle rustlers and herdsmen in the Middle Belt and Northern Nigeria in recent years might not be unexpected given the volatility of the economy that recently went through recession, security challenges in the North East Nigeria and the debilitating impact of climate change on availability of pastures.

The herdsmen that traditionally carry sticks and cutlasses strangely now carries dangerous weapons such as AK47 and Bazokas to kill defend-less farmers and invade communities that resist grazing of cattle on their farm land .

The other narratives was that the herdsmen acquired the deadly weapons as a form of self-defense against notorious cattle rustlers whose trade is to violently steal their cattle and transport them for sale in our poorly organized domestic cattle markets in southern

macroeconomic environment.

Good enough, after inflation hit the peak of 18.7 percent in January 2017, it started declining as the devaluation impact of the Naira cooled and higher oil prices helped stabilize the macroeconomic environment. Now inflation rate has fallen below the MPR for the second consecutive month. The MPR is at 14 percent while the inflation rate stands at 12.48 percent. Technically, this gives the CBN headroom of about 1.52 percent to cut the MPR at its next meeting of the MPC on May 22.

The big question is if the CBN’s MPC will choose to cut the MPR at this time or would want to hold onto its 14 percent rate for bit longer? What even makes the argument to cut stronger is the rapid deceleration in food inflation to 14.8 percent in April, the lowest level in about 24 months and the fifth consecutive month of decline in the rate. Core inflation is down to 10.9 percent in April 2018, and is also the lowest in 27 months, and also showing the fourth month of consecutive decline.

To complement the drop in inflation and strengthen the argument for a cut in the MPR, the naira has been largely stable in the Investors and Exporters (I&E) window at an average exchange rate of N360 to the US$. The stability has been helped by the fact that the CBN has been able to rapidly build reserves to about US$48 billion, enough to pay the country’s import bills for between 15 to 17 months. Even more positive for the economy, is the fact that geopolitical tensions in the middle east is leading to a spike in oil prices which looks headed above US$80 per barrel with a US$100 per barrel now looking realistic again in the near future.

In summary, all the right things

The big question is if the CBN’s MPC will choose to cut the MPR at this time or would want to hold onto its 14 percent rate for bit longer? What even makes the argument to cut stronger is the rapid deceleration in food inflation to 14.8 percent in April, the lowest level in about 24 months and the fifth consecutive month of decline in the rate are falling into the right places for the MPC to consider a cut in interest rates at its next meeting.

But there is a snag. The same day that the NBS released its inflation figures, the news broke that the National Assembly is now ready to release the long delayed budget 2018. However, it is not just in the fact that the budget is coming late, it is also the fact that it is going to be the country’s biggest ever budget in nominal terms. The total budget sum approved by the National Assembly is N9.12 trillion, which is N508 billion more than the initial N8.61 trillion proposed

by President Buhari. Even of more concern is the fact that a supplementary budget is expected which could take the total budget above the N10 trillion mark, the biggest expenditure plan ever in the country’s history.

Members of the MPC will definitely be concerned about the size of the 2018 budget, especially in a pre-election year when there is a very good chance that a good chunk of the

budgeted amount will be spent. The capital component of the budget stands at a significant N2.87 trillion, the highest ever in nominal terms, to be budgeted by the country. In a pre-election year, there is a good chance that every penny of this amount will be spent. Revenues to back the expenditure will likely not be much of a challenge considering the higher than normal oil prices.

Also, in a pre-election year, the government will be eager to impress the electorate, there is a good chance it would hasten the process of releases of capital expenditure for roads and other infrastructure projects across the country. So what we are likely to see is a government in a hurry to spend N2.9 trillion between now and the end of the year or at most March next year. This is going to put a significant pressure on prices.

Already, the 2017 budget gas spilled over into 2017. Minister of Finance, Kemi Adeosun confirmed this week that total releases for capital expenditure in respect of the 2017 budget stands at N1.5 trillion. About N300 billion of the N1.5 trillion must have been released in the first five months of this year.

Adeosun had stated in December 2017 that total capital releases for 2017 budget stood at N1.2 trillion, N750 billion on which was released in December. So between December 2017 and May 2018, total capital release was N1.05 trillion.

This represents a significant amount of naira flowing into the economy with such a short period of time besides recurrent expenditure, which is usually executed 100 percent. The MPC members will definitely be concerned about this amount of money flowing into the system and its impact on prices of goods and services. This is besides the fact that state governments are also on a spending binge in 2018 with planned expenditure in 2018

up 40 percent.

But this significant inflows of money from the government into the economy is not having the desired impact on the private sector.

Economic growth remains sluggish.

Expansion of banking sector credit to the private sector has remained flat. There is no indication that it will change with a lower interest rate.

The low appetite for banking credit is related to growing inventories in the books of businesses on the back of Nigeria’s suffering middle class which have seen their purchasing power diminished significantly.

The purchasing power of the middle class has come under attack from rising inflation, as well as rising unemployment and underemployment. Business appetite for expansion is therefore currently low and cannot be repaired by just lower interest rates.

The MPC may therefore be concerned that a lower interest rate will just help boost the government borrowing appetite, especially at the sub-national level, in a pre-election year and consequently put pressure on the exchange rates through increased demand for dollars either for imports to execute infrastructure projects or other invisible imports or even politically exposed individuals trying to launder money outside the country.

Obviously, the risk of cutting rates looks to outweigh the benefits.

The best bet is that the MPC will would want to hold rates where they are in its next meeting, except of course they want to play to the ‘political card’ by cutting the rates as that will look politically right. But a hasty rate cut could easily see the downward trend in inflation being reversed and that would be politically even more costly.

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Separating herdsmen from farmers for enduring peace Nigeria or ferry them across our porous borders to neighboring countries. The ensuing unprecedented human casualties in the annals of our nation is now on the verge of being classified as ethnic cleansing and religious sectarian war based on the tardiness of federal government response and seemingly inability of our security apparatus at a stage to curtail the menace and bring to justice the perpetrators of the dastardly act. As calm returns to the land on the heels of renewed efforts by the government to stop the carnage, it is apt for us now to find permanent solution to the problem which traditionally reach the zenith during the dry season (February to April). There is no doubt that the causative factors of these crises are attributable to a combination of several factors including • Economic recession which made life generally difficult and fueled desperation and criminality, • Degradation of Boko Haram insurgents which might have dispersed arms bearing former actors across the country, • The global warming fol-

lowing climate change that is shortening raining seasons, elongating dry seasons, drying up rivers and dams and limiting availability of pastures especially at the peak of dry seasons, • Moribund state of our dams that are not discharging their duties of irrigating our farmlands due to poor funding and • Proliferation of small arms in West Africa with ending of wars in the sub region (Liberia, Cote de voir, Sierra Leone) and the Maghreb/ Sahel zone (Libya, Chad Mali and Southern Sudan) The clash between farmers and herdsmen is a typical problem of externalities which most developed and developing nations have contended with in their quest for economic development and food security. Farmers acquire right to use their land through outright purchase, lease or inheritance for the purpose of planting crops. They invest capital which could be savings or debt to clear the land, buy seeds/ seedlings, hire labor, buy fertilizer to grow the crops up to the luxuriant state that makes them edible for cattle. Herdsmen in search of free pasture in the bush to grow and nourish their cattle or on their way

to the large urban markets largely in Southern Nigeria markets veer into farmers’ farms and eat up the luxuriant crops leading to huge financial losses for the hapless farmers. The farmer’s output is the herdsmen’s input. Unfortunately, the herdsmen do not pay for the input. The cultural belief that cattle ought to be fed on free foliage worsens the matter. Incidentally both the farmers and herdsmen need themselves in relative terms.

The farmers need the cattle dung or waste to fertilize the soil while crop waste and residue after harvesting could be fed to the cattle.

These mutual needs can only be synchronized if the cattle are confined in a ranch.

The real issue is who compensates the farmer for the cost he has incurred in raising the crops up to the point of being edible for the rampaging cattle which at times invade the farms in scores. Is it the herdsmen or the state? Most of these cattle graze in the night creating the problem of unknown herdsmen. These incidents happen in largely isolated and remote villages hence, policing is a huge challenge. The crux of the matter is how to restraint the cattle from

foraging on the farmer’s farm. If the state or its institutions like agricultural insurance scheme are not there to protect or compensate the farmers when these losses occur, then the state must rise to the occasion and do everything possible to separate the farmers from the herdsmen.

We need to use the security apparatus to stem the present crisis but that will not solve the problem.

The three-pronged solution to the menace that is a fast becoming a global embarrassment to the nation and threat to our unity are 1.

Creation of incentive for cattle to be reared in ranches 2.

Use of information communication technology ICT to give identity to our estimated 20million heads of cattle and 3.

Restoration of our transregional rail lines to move cattle across the country by rail instead of trekking with the herdsmen

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Editorial PUBLISHER/CEO

Frank Aigbogun EDITOR-IN-CHIEF Prof. Onwuchekwa Jemie EDITOR Anthony Osae-Brown DEPUTY EDITORS John Osadolor, Abuja Bill Okonedo NEWS EDITOR Patrick Atuanya EXECUTIVE DIRECTOR, SALES AND MARKETING Kola Garuba EXECUTIVE DIRECTOR, OPERATIONS Fabian Akagha EXECUTIVE DIRECTOR, DIGITAL SERVICES Oghenevwoke Ighure ADVERT MANAGER Adeola Ajewole MANAGER, SYSTEMS & CONTROL Emeka Ifeanyi MANAGER, CONFERENCES & EVENTS Obiora Onyeaso SUBSCRIPTIONS MANAGER Patrick Ijegbai CIRCULATION MANAGER John Okpaire GM, BUSINESS DEVELOPMENT (North)

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Monday 21 May 2018

Beyond the ban on codeine

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or individuals, companies as well as nations, crises are a critical inflection point. Character shows in what people make out of an emergency. A Nigerian aphorism says that we know the real worth of a man in a crisis.

Smart people make the most of their crisis. They learn valuable lessons about themselves, about certain situations and how not to tackle some issues. They distil the learning and take corrective action to ensure outcomes that are so much better there is a temptation to give a backhanded compliment to the crisis for opening their eyes. Rwanda is an oft-cited example of profiting from the key learnings from a disaster.

Nigeria has spent the last fortnight acting in crisis mode following exposure by a global broadcaster of the abuse of codeine syrup in major cities of the country. Northern Nigeria has been the epicentre of the drug challenge for many years. It has now taken frightening dimensions.

Unfortunately, the official response to the codeine syrup challenge has in many instances and areas been suboptimal. There have been avoidable lapses in strategy, timing and communication of issues and actions. There is as yet no clear direction. Then

there is a deafening silence by the governments of the states most affected by the drug abuse challenge.

Following the BBC documentary, the Federal Ministry of Health reacted in knee-jerk fashion by announcing curbs on the manufacture and marketing of codeinebased cough syrups. It followed on May 7 with poor communication of a regulatory audit process that is standard procedure in handling matters of a breach in the chain for controlled substances.

NAFDAC, in a news release, announced the closure of three drug manufacturing firms in Lagos and Ilorin. The NAFDAC statement stated, “Due to insufficient evidence gathered and apparent resistance to provide needed documents during our inspection on May 2, 2018 at the respective companies in Ilorin and Lagos, it has become necessary to shut down all product lines of the three companies…”

A reading of that statement led to only one conclusion: NAFDAC had shut the entire production activities of the three firms. Alas, it turned out NAFDAC closed only the production units for cough syrups.

The media found out just because of checking with Emzor the consequence of the announced closure.

As at the weekend, NAFDAC did not bother with a clarification leaving the media and the public to depend only on a message from Emzor confirming that production was

ongoing on other lines.

Poor communication led to such a massive misunderstanding by the media and the public.

It ignited severe debates on social media and offline. It also played into Nigeria’s ethnic fault lines for citizens so inclined.

NAFDAC at the weekend came out with specific administrative fines for specific offences committed by the three firms. It also ordered the reopening of the shut production lines. We commend the speed in taking corrective action.

There are other concerns. What have NAFDAC and the Ministry of Health outlined as a strategy for tackling the drug abuse challenges mainly in the Northern states but also across the rest of the country?

Beyond the documentary that rehashed what Nigerian media have reported on over the years, what studies have NAFDAC and the Federal Ministry of Health carried out or commissioned on the youth drug abuse challenge? Which drugs are mainly responsible for the problem? Is it codeine in cough syrups or other painkillers? In Australia, their study found out that paracetamol or ibuprofen was involved in 55 percent of the 1200 codeine-related deaths recorded between 2000 and 2013. Australia is now looking at how to control the use of codeine implicated in 150 medications.

Youths here abuse Tramadol, itself containing the opiate, and several

other substances. Nigeria needs to articulate a holistic strategy for tackling an evident national challenge of drug addiction by the young and vulnerable.

No one has yet heard from the Kano State Government what it plans to do about the drug abuse challenge on its doorsteps. Nary a word. How does Kano State Government plan to tackle this problem? What resources is it deploying? What assistance does it need?

Across the world, countries are now questioning the continued use of codeine because of the tendency to abuse it. There is an opportunity here for Nigeria to join nations of the world to study and find out alternatives to the opiates in medication. Can we be one of the first countries to find alternatives to codeine? Can the Ministry of Health work with the Pharmacy Council, universities, pharmaceutical firms and our research institutes to fashion out alternatives. Can we add insights and perspectives from natural medicine for which we already have a federal agency?

Leadership and collaboration are needed and critical. The Health Minister has the experience and exposure to lead cross-cutting teams that should work collaboratively with various institutions, organs and state governments. We should treat the drug abuse issue as a national emergency and engage all our troops in tackling it.

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Monday 21 May 2018

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BUSINESS DAY

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Monday 21 May 2018

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Gaza erupts

Israel must answer for the deaths in Gaza But it is time for Palestinians to take up genuine non-violence

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AZA is a human rubbish-heap that everyone would rather ignore. Neither Israel, nor Egypt, nor even the Palestinian Authority (PA) wants to take responsibility for it. Sometimes the poison gets out—when, say, rockets or other attacks provoke a fully fledged war. And then the world is forced to take note.

Such a moment came on May 14th. Tens of thousands of Palestinians massed near Gaza’s border fence, threatening to “return” to the lands their forefathers lost when Israel was created in 1948. Israeli soldiers killed about 60 protesters— the bloodiest day in Gaza since the war in 2014 (see Briefing). In a surreal split-screen moment, the Israeli prime minister, Binyamin Netanyahu, was exulting over the opening of America’s embassy in Jerusalem, calling it a “great day for peace”.

Many countries have denounced Israel; a few have recalled diplomats.

Some people accuse it of war crimes.

Others blame President Donald Trump for causing the clashes by moving the embassy from Tel Aviv to Jerusalem. It is surely right to hold Israel, the strong side, to high standards. But Palestinian parties, though weak, are also to blame.

Seven decades after the creation of Israel as a thriving democracy, there is a better way than endless conflict and bloodshed.

How much blood is proportionate?

Every state has a right to defend its borders. To judge by the numbers, Israel’s army may well have used excessive force. But any firm conclusion requires an independent assessment of what happened, where and when. The Israelis sometimes used non-lethal means, such as teargas dropped from drones. But then snipers went to work with bullets.

What changed? Mixed in with protesters, it seems, were an unknown number of Hamas attackers seeking to breach the fence. What threat did they pose? Any fair judgment depends on the details.

Just as important is the broader political question. The fence between Gaza and Israel is no ordinary border. Gaza is a prison, not a state.

Measuring 365 square kilometres and home to 2m people, it is one of the most crowded and miser-

What the OFAC?

For European firms, resisting American sanctions may be futile But the Trump administration is playing fast and loose with a dangerous weapon

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“

ONALD TRUMP is the sort of guy who punches you in the face and if you punch him back, he says ‘Let’s be friends’. China punched back and he retreated. The Europeans told him how beautiful he was, but they got nothing.” This is how an American official-turned-executive describes the latest twists in the Trump administration’s sanctions policy, which this year has roiled business from America to Europe, Russia, China and Iran. What business leaders see, analysts say, is a punitive approach that is capricious, aggressive and at times ill-prepared. But unless companies or their governments take the fight all the way to the White House, they have little choice but to abide by the long—and sometimes wrong—arm of American law.

able places on Earth. It is short of medicine, power and other essentials. The tap water is undrinkable; untreated sewage is pumped into the sea. Gaza already has one of the world’s highest jobless rates, at 44%.

The scene of three wars between Hamas and Israel since 2007, it is always on the point of eruption.

Many hands are guilty for this tragedy. Israel insists that the strip is not its problem, having withdrawn its forces in 2005. But it still controls Gaza from land, sea and air. Any Palestinian, even a farmer, coming within 300 metres of the fence is liable to be shot. Israel restricts the goods that get in. Only a tiny number of Palestinians can get out for, say, medical treatment. Israeli generals have long warned against letting the economy collapse. Mr Netanyahu usually ignores them.

Egypt also contributes to the misery. The Rafah crossing to Sinai, another escape valve, was open to goods and people for just 17 days in the first four months of this year. And Fatah, which administers the PA and parts of the West Bank, has withheld salaries for civil servants working for the PA in Gaza, limited shipments of necessities, such as drugs and baby milk, and cut payments to Israel for Gaza’s electricity.

Hamas bears much of the blame, too. It all but destroyed the Oslo peace accords through its campaign of suicide-bombings in the 1990s and 2000s. Having driven the Israelis out of Gaza, it won a general election in 2006 and, after a brief civil

war, expelled Fatah from the strip in 2007. It has misruled Gaza ever since, proving corrupt, oppressive and incompetent. It stores its weapons in civilian sites, including mosques and schools, making them targets. Cement that might be used for reconstruction is diverted to build underground tunnels to attack Israel. Hamas all but admitted it was not up to governing when it agreed to hand many administrative tasks to the PA last year as part of a reconciliation deal with Fatah. But the pact collapsed because Hamas is not prepared to give up its weapons.

Israel, Egypt and the PA cannot just lock away the Palestinians in Gaza in the hope that Hamas will be overthrown. Only when Gazans live more freely might they think of getting rid of their rulers. Much more can be done to ease Gazans’ plight without endangering Israel’s security. But no lasting solution is possible until the question of Palestine is solved, too. Mr Netanyahu has long resisted the idea of a Palestinian state—and has kept building settlements on occupied land.

It is hard to convince Israelis to change. As Israel marks its 70th birthday, the economy is booming.

By “managing” the conflict, rather than trying to end it, Mr Netanyahu has kept Palestinian violence in check while giving nothing away.

When violence flares Israel’s image suffers, but not much. The Trump administration supports it. And Arab states seeking an ally against a rising Iran have never had better

relations with it.

Israel is wrong to stop seeking a deal. And Mr Trump is wrong to prejudge the status of Jerusalem.

But Palestinians have made it easy for Israel to claim that there is “no partner for peace”, divided as they are between a tired nationalist Fatah that cannot deliver peace, and an Islamist Hamas that refuses to do so. Palestinians desperately need new leaders. Fatah must renew itself through long-overdue elections.

And Hamas must realise that its rockets damage Palestinian dreams of statehood more than they hurt Israel.

The only way to stop fighting is to stop fighting For all their talk of non-violence, Hamas’s leaders have not abandoned the idea of “armed struggle” to destroy Israel. They refuse to give up their guns, or fully embrace a twostate solution; they speak vaguely of a long-term “truce”. With this week’s protests, Hamas’s leaders boasted of freeing a “wild tiger”. They found that Israel can be even more ferocious.

If Hamas gave up its weapons, it would open the way for a rapprochement with Fatah. If it accepted Israel’s right to exist, it would expose Israel’s current unwillingness to allow a Palestinian state. If Palestinians marched peacefully, without guns and explosives, they would take the moral high ground.

In short, if Palestinians want Israel to stop throttling them, they must first convince Israelis it is safe to let go.

The capriciousness was evident on May 13th when President Trump executed a handbrake turn on ZTE, the world’s fourthbiggest telecoms-equipment maker, which is strongly supported by the Chinese government. It had been brought to the brink of bankruptcy after the American government in April banned its firms from supplying it with components. That was punishment for ZTE’s violation of American sanctions against Iran and North Korea and for its subsequent lies about how it censured the staff involved.

In two surprise tweets, Mr Trump said he was working with China’s president, Xi Jinping, to bring ZTE “back into business, fast” and that the lifeline was part of a larger trade deal with China. American congressmen said this smacked of submission to retaliatory pressure from China.

Not only was Mr Trump’s move an unusual intervention in a law-enforcement matter. It also came on the day that his national security adviser, John Bolton, threatened to punish European firms that violate new sanctions the Trump administration is imposing on Iran after withdrawing from the Joint Comprehensive Plan of Action (JCPOA), a nuclear deal implemented in 2016. In other words, a convicted Iran sanctions-buster allied to China might be let off, whereas firms allowed by European law to trade with Iran will be under the cosh— Continues on page 15

Monday 21 May 2018

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In Association With

The Department of Justice

Donald Trump wants tough justice—with one exception He is testing Jeff Sessions’s tolerance for pain

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N 2015 Jeb Bush, who was competing with him for the top job, warned that Donald Trump would be “a chaos president”. In many respects he has been proved right. President Trump has failed to keep many of the promises he made on the campaign trail. The White House leaks like a colander. The administration has suffered rapid staff turnover while weathering scandal after scandal. Mr Trump often appears capable of remaining on-message for no more than 280 characters.

But ineptitude and inconsistency are not quite the same as inaction. Mr Trump is transforming the federal government—and one department in particular. With Jeff Sessions, the attorney-general, he has radically reoriented the Department of Justice (DoJ), undoing many changes made under his predecessor, Barack Obama. At the same time, he has relentlessly attacked Mr Sessions and the department for failing to protect him from Robert Mueller, the special counsel charged with investigating alleged links between Russia and Mr Trump’s campaign. The DoJ is both comprehensively Trumpified and deeply irksome to Mr Trump.

Though changeable in many ways, Mr Trump has consistently approved of harsh punishment and disliked due process. In 1989, after five black and Hispanic teenagers were accused of raping a white woman in Central Park (wrongly, it turned out), Mr Trump took out full-page advertisements in four New York papers that screamed, “Muggers and murderers should be forced to suffer, and, when they kill, they should be executed for their crimes.” After a terrorist attack in New York, he called for “quick…strong justice”. He believes America’s method of prosecuting terrorists—gathering evidence and building a provable case—to be “a joke, and…a laughing stock”.

He also believes that America is beset by violent crime. At a meeting with sheriffs in February 2017, Mr Trump claimed that America’s murder rate “is the highest it’s been in 47 years”. In fact, murder and crime in general are much rarer than they were in the 1990s.

In 2016 just 21.1 per 1,000 people over the age of 12 reported being victims of violent crime, around one-quarter of the 1993 figure.

In Mr Trump’s home town of New York, crime has fallen for 27 straight years, to levels not seen since the 1950s.

And throw away the key Mr Obama took advantage of falling crime rates to make American criminal justice a little less punitive. His Justice Department allowed prosecutors to bring lesser charges against some drug offenders to avoid triggering mandatory-minimum sentences,

and let them decline to prosecute non-violent marijuana offences if they complied with state law (marijuana is illegal under federal law, but several states have legalised it). Mr Obama called for an end to mandatory-minimum sentences and cut or commuted the sentences of nearly 1,400 people, most of whom were imprisoned for drug-related crimes. The federal prison population was smaller when he left office than when he entered—something no president had achieved since Jimmy Carter, four decades ago.

Mr Sessions, who as a senator was a fierce drug warrior and opponent of criminal-justice reform, has sharply reversed this course.

In May 2017 he directed federal prosecutors to “charge and pursue the most serious, readily provable offence.” Last January he rescinded the previous administration’s guidance on marijuana, which he has called “only slightly less awful” than heroin. (In 2016 opioid overdoses killed more than 42,000 Americans; marijuana overdoses killed none.) These policies are likely to send more people to jail.

Yet Mr Sessions’s budget aims to cut prison staff. His prison bureau wants to boost the populations of private jails—another reversal from practice under Mr Obama.

Another of Mr Trump’s core beliefs is that too many of the wrong sort of people are voting.

After the election he claimed, without evidence, that “millions of people voted illegally”. Since he took office, the Department of Justice’s voting section has not filed a single voting-rights case.

The department has, however, sent letters to 44 states inquiring about the accuracy of their voter rolls— something many fear implies a green light for states that want to make it harder for people to vote.

In two current voting-rights cases, the DoJ reversed its position after Mr Sessions took over.

In February 2017 it decided that

Texas’s strict voter-ID law was not enacted with discriminatory intent. Last August it sided with Ohio, which had purged its rolls of voters it deemed insufficiently active. The Obama administration, along with several civil-rights groups and a federal appellate court, believed the purge violated federal law. Agencies’ priorities often change, but a 180-degree shift in an ongoing case—as one longtime voting-rights lawyer puts it, “one day saying the law means X, and the next saying it means not X”—is unusual.

The department has also reversed its position on civil-rights protections for gay and transgender people. In 2014 Eric Holder, then the attorney-general, issued a memo determining that federal protections against workplace discrimination based on sex also applied to “gender identity, including transgender status”. Mr Sessions revoked it. This runs counter not just to the Obama administration’s position, but to a long-standing, bipartisan trend of expanding civil-rights protections. Both Bushes, for instance, expanded federal protections for the disabled.

Morale in the department has crashed. One lawyer who left in 2017 says that staff were instructed “to scrub words like ‘reform’” from their writing, because “anything that smacked of reform was too closely aligned with the previous administration”. Lawyers provided copious evidence that changes in sentencing had not caused violent crime to rise, but “it was like shouting into a vacuum,” says the lawyer.

Fewer staff are now inclined to work late nights or at weekends.

Mr Trump’s attacks on the department do not help. He seems to think of the agency as part of his operation, as though he has been elected chief executive of America and the DoJ is the company’s legal department. It follows that, in failing to protect him from Mr

Mueller, the department is not doing its job. He has never forgiven Mr Sessions for recusing himself from Mr Mueller’s investigation, and believes he has “the absolute right to do what I want to do with the Justice Department”.

This contravenes long-standing norms, under which a president appoints an attorney-general and other top officials, then sets general policy direction, but otherwise respects the department’s independence—and certainly does not intervene in investigations. Susan Hennessey, a fellow at the Brookings Institution and former lawyer for the National Security Agency, believes the president “has no reference to the DoJ as an institution that has to be defended—it’s entirely personal for him”. The DoJ’s independence, and the rule of law that independence protects, are not features of the American system to Mr Trump; they are pesky inconveniences.

Yet the department has stood more or less firm against attacks from Mr Trump and his congressional supporters. House Republicans threatened Rod Rosenstein, the deputy attorney-general, who is overseeing Mr Mueller’s investigation, with impeachment for failing to surrender documents they wanted. Mr Rosenstein retorted that the Department of Justice “is not going to be extorted”, and is said to have told friends that he is ready to be fired.

As for Mr Sessions, Ms Hennessey posits that he puts up with periodic threats and public humiliation because he has an alternative agenda. As long as he is able to roll back criminal-justice reforms, reinstate mandatoryminimum sentences and stiffen punishments for marijuana dealing, she suggests, “he seems to have decided that this is a bargain worth making”. But, as with his boss’s efforts to undermine law enforcement, it is also a bargain for which America will pay.

For European firms, resisting American...

Continued from page 14

unless their leaders fight back.

Whether or not there is the stomach for such a battle is the question haunting businesses in Europe. French carmakers, Total, an oil supermajor, and Airbus, an aircraft manufacturer, developed stronger business ties with Iran after European sanctions were lifted in 2016. Peugeot and Renault sold more than 600,000 cars there last year. Total has signed a $5bn deal to extract natural gas in Iran, in partnership with PetroChina, a Chinese counterpart. Iran has ordered 100 planes from Airbus. SWIFT, an international bank messaging system based in Belgium that is used for business payments, reconnected Iranian banks to the global system in 2016.

Can the bloc block?

European leaders attempted this week to work out a plan for keeping the JCPOA alive without America that would enable their businesses to continue to trade with Iran. Ali Vaez, of the International Crisis Group, a consultancy, said that to keep Iran on board with an amended agreement, the Europeans may need to promise that it could keep selling its oil to them, as well as keep access to SWIFT. But in order to do that, Europe faces “a set of ugly choices”. These include threatening to impose tariffs on American imports if the Trump administration slaps secondary sanctions on European firms trading with Iran, or imposing “blocking legislation” of the kind introduced in 1996 to protect its companies from Cuba-related sanctions. “The exemption for ZTE is a good example that if the EU were to bring out the big guns...then it can negotiate exemptions,” Mr Vaez says.

But many doubt Europe’s appetite for a fight. “In my wildest dreams, I can’t imagine Europe doing it,” says Amos Hochstein, who, as a member of the Obama administration, led the move to put sanctions on Iranian oil in 2012. Patrick Murphy of Clyde and Co, a law firm, says the proposed Iranian sanctions are too different from the Cuban ones for a similar remedy.

Moreover, says Mr Murphy, in an increasingly dollarised world, businesses and banks are so worried about being shut out of the financial system that there is in fact “overcompliance” with the legal requirements imposed by America. He says this explains the sluggish pace of European investment in Iran in 2016-18, even though European sanctions had been lifted. On May 16th Total said it would unwind its investment in Iran

by November unless American authorities granted it a waiver. It said it could not afford to be exposed to sanctions, which might include the loss of financing in dollars by American banks.

16

BUSINESS DAY

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Monday 21 May 2018 In Association With

Flights of fancy

Zimbabwe launches a second state-owned airline

The first one is so indebted its planes are impounded when they land abroad. Will the second be any better?

H

AVING one lossmaking stateow n e d a i r l i n e is bad enough.

What, then, of a government that wants two?

Earlier this year Zimbabweans were startled to learn that the government had concluded a secret $70m deal to buy four second-hand Boeing jets from Malaysia to form the core of a new national airline, Zimbabwe Airways. This venture is supposed to compete with Air Zimbabwe, the flag carrier, which ran up huge debts thanks to poor management and exPresident Robert Mugabe’s habit of commandeering its planes so his wife could shop abroad.

The government hopes to stimulate tourism and business by reopening long-haul routes that are closed to Air Zimbabwe, whose planes can be impounded as soon as they land on foreign runways. It suspended flights

to London’s Gatwick airport in 2011, for instance, after one of its planes was seized over an unpaid debt. It has since been banned from European skies because of concerns over the safety of its creaking planes.

Critics questioned the secrecy and the price paid for the new planes. The government had claimed for months that the new airline was a private initiative, funded by Zimbabwean investors living abroad. Joram

Gumbo, the transport minister, told local newspapers it had been necessary to lie because “if they had been exposed as government of Zimbabwe planes, they would have been taken by the creditors who were claiming

for money.” He also revealed that “the man in charge of Zimbabwe Airways” is Mr Mugabe’s sonin-law.

Officials see the new airline as a panacea for the economy.

That seems unlikely. It will be pitted against rivals offering reliable connecting services via their hubs in South Africa, Kenya, Ethiopia and the United Arab Emirates. Airlines based in those countries have the upper hand on numerous fronts, among them economies of scale, network synergies and more frequent flights. Zimbabwe Airways will have only one advantage: the ability to fly between Harare, the capital, and destinations in Europe and Asia without boring stopovers. Yet there is probably not nearly enough direct traffic to fill its planes.

That Zimbabwe hopes to subsidise not one, but two airlines ought to raise a red flag for international lenders who are being asked to write off its debts.

Pierre pressure

Burundi’s president is now “Supreme Eternal Guide”. Retirement is out Pierre Nkurunziza exemplifies a dismal trend for abolishing term limits

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S OMENS go, it is not a good one. In Kinama, a district in north-east Bujumbura, the cobble-stoned capital of Burundi, residents found the body of a man floating in a field of rice on May 8th.

His head was missing; his heart had been torn out. Stuck to his chest was a message written in Kirundi, the language of most Burundians: “Traitors are punished.”

Violence has broken out in Burundi ahead of a referendum on May 17th to change the constitution to allow Pierre Nkurunziza, a former rebel who has been president since the end of the civil war in 2005, to stand for office again in 2020. On May 11th, 26 people were killed in the north-west of the country in an attack by rebels who crossed in from the neighbouring Democratic Republic of Congo.

Three days later an opposition activist who had been campaigning against the change was murdered in the street by a crowd of young pro-government militiamen.

Many Burundians expect the constitutional amendment to pass comfortably (no matter which way they actually vote). Having named himself “Supreme Eternal Guide” of the country in March, Mr Nkurunziza could then stay in office until 2034. The referendum in Burundi highlights the steady erosion of term limits in recent years across central Africa (see map). Over the

past decade half a dozen countries have ignored or revoked laws limiting presidents to no more than two terms in office.

It also represents the final death of the Arusha accords that ended the civil war, created a blueprint for democracy and mandated power-sharing between Hutus and Tutsis, the two main ethnic groups, whose fighting has torn Burundian politics apart since independence in 1962.

Burundi’s latest crisis began in earnest in 2015, when Mr Nkurunziza decided to run for a third term. His party, the CNDD, which is descended from the Hutu rebel group he led during the civil war, argued that under the constitution his first term did not count. He had been appointed by parliament,

not elected, you see. Two months before he was re-elected, his government was briefly overthrown in a coup while he was on a trip to neighbouring Tanzania. In the year afterwards, Burundi was shaken by violence. Opposition supporters (or those merely suspected of being so) were arrested or went missing.

Almost half a million people have fled to neighbouring countries.

Rights groups say 456 were assassinated in 2017 alone.

Gunshots and grenades are a rarer sound in Bujumbura than they were two years ago, say residents. But repression continues.

“Many citizens today live in fear, even if they do not say so aloud,” says Monseigneur Joachim Ntahondereye, president of the Burundian Council of Bishops. The

church is one of the few institutions to have spoken out against the constitutional change. Independent journalism has been all but banned; this month, the BBC and Voice of America transmitters were shut down. Most foreign publications have been denied accreditation.

Particularly worrying is the gradual ethnic polarisation of the army. It had been rebuilt under the Arusha accords with quotas for Hutus and Tutsis at all levels of its officer corps, to win the trust of both groups. Yet many of the officers who dominated before 2005, most of them Tutsi, have been forced to retire or posted abroad on peacekeeping missions in places such as Somalia and the Central African Republic. Some officers have been murdered. Meanwhile, rebels who served in Mr Nkurunziza’s force— mostly Hutus—have risen up the ranks. The constitutional amendment opens up the possibility of doing away with ethnic quotas, allowing Mr Nkurunziza to make the army and police completely dominated by Hutus.

The economy has been crushed.

GDP per person has fallen every year since 2015, even as the population has risen by around 10% to about 11m. Almost three-fifths of Burundians are “chronically malnourished”, according to the UN’s World Food Programme. Hunger

has worsened of late, as the government has increased taxes to pay for the referendum. The only growing industry has been smuggling gold from Congo, where Mr Nkurunziza is said to have allies in the remnants of the genocidal Hutu militias that fled Rwanda after the massacres there in 1994. Fears are growing that a proxy war between Burundi and Rwanda (whose president, Paul Kagame, is a Tutsi) is reigniting in Congo.

BUSINESS DAY

Monday 21 May 2018

17

CityFile Edo sets up committee on child defilement

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Cultural display during the International Museum Day in Jos, on Friday. NAN

Trailer park: FG approves N133m compensation for Abia villages

do State government has set up a committee to check the incidence of child defilement in the state, in a renewed effort to strengthen the child rights law to address issues of sexual abuse of children.

Acting chairman, Edo State Universal Basic Education Board (SUBEB) and special assistant to the governor on basic education, Joan Oviawe, disclosed this during a press briefing at the Government House, Benin, when the state government handed over a 58-year man, Lambert Ighodaro, to the police for prosecution over allegedly raping a 12-year girl in Benin.

Oviawe added: “After the case was reported

by SUBEB to the police, Lambert was apprehended. This was after SUBEB received report of the incident from the class teacher of the girl, who is a pupil in one of the primary schools.”

Shehadobservedthatthegirlwasalwaysabsent from school and contacted the girl’s guardian to find out the cause of her absenteeism.”

“The girl told her class teacher how she was being sexually abused by Lambert Ighodaro, in his house during school hours. She alleged that the man usually give her money after defiling her.”

The SUBEB boss told journalists that the state governor, Godwin Obaseki, had set up an inter-ministerial committee to develop a framework to curb the incidence of child defilement in the state.

She said the board is concerned about the wellbeing of pupils while in and out of school, noting that structures are being put in place to assist victims of rape overcome stigma, while the perpetrators are not only shamed but prosecuted.

She said: “Teachers were trained recently to identify children who have been abused physically and sexually.”

Lagos introduces ... as concern grows over gradual return of trucks to Ijora- Apapa bridge e-guide for CBD JOSHUA BASSEY

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ive communities in Abia State, Southeast Nigeria, are to receive N133 million as compensation for land acquired for the construction of a trailer park on Enugu-Port Harcourt Expressway.

The land acquisition is a measure by the Federal Government to ensure that trailers don’t occupy the expressway thereby creating traffic bottleneck as being witnessed in some parts of the country.

In Lagos, concern is beginning grow among motorists, as petroleum tankers and container-bearing trailers gradually return to a section of Ijora-Apapa link bridge. For about two months now, motorists have enjoyed uninterrupted ride on the bridge, following the evacuation of trucks, which hitherto blocked the access road to the Apapa ports.

Stakeholders comprising officials of Lagos State, military, Nigerian Ports

Authority (NPA), Nigerian Union of Petroleum and Natural Gas Workers (NUPENG), in a meeting convened by Rear Admiral Sylvanus Abbah, flag officer commanding, Western Naval Command of the Nigerian Navy, on March 7, had ordered given the truck drivers to vacate the bridge, as they feared terrorists could take advantage of the gridlock to launch an attack in Apapa.

However, by Friday, several trucks were lying on the bridge with attendant traffic challenge, spurring concern by commuters and motorists, who appealed to the naval authorities not to yield to pressure and allow the trucks return.

The military must stand its grounds.

On no account should the trucks be allowed to take position on the bridge as was the case before the Nigerian Navy stepped in, said a motorist, who was sandwiched in-between two trailers on the bridge on Friday.

Meanwhile, Chukwudike Nwankwo, controller, federal ministry of works,

power and housing, said the government would commence the payment of N133 million to five communities in Umunneochi local government area of Abia State, where the land for the project is located.

“The minister of works, power and housing, Babatunde Fashola has given approval for payment of compensation.

It is a very large parcel of land involving about five communities “We will commence the disbursement soon and once we are through, the construction of the park will start.”

Nwankwo further said that Fashola has also directed the immediate evacuation of the trailers from the two sides of the dual carriageway to allow for free-flow of traffic.

According to him, the federal ministry would also fence off the cattle market from the expressway.

Heavy duty trucks, trailers and the cattle market had spilled into the dual carriageway and hampered smooth traffic flow.

3 policemen held over extra judicial killing in Warri

T

hree policemen have been arrested in connection with extra judicial killing of one Samson Omonuwa in Warri, Delta State.

Rasheed Akintunde, an Assistant Inspector-General (AIG) in charge of Zone 5, ordered the arrest of three policemen.

Emeka Iheanacho, the zonal public relations officer of the police said in Benin,

Edo State on Friday that the AIG’s order followed a petition by the father of the deceased, Anthony Omonuwa on May 14, alleging that his son was killed in a police station in Warri.

The AIG has ordered an immediate investigation into the matter and vowed to ensure that persons indicted in the investigation would be made to face the

full wrath of the law.

The AIG appealed to the family of the deceased and the general public to be calm as the zone would ensure that justice prevailed in the matter.

“The AIG has also warned policemen in the zone to remain professional and abide by the ethics and core values of the force,’’ Iheanacho said.

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agos State says it will soon launch an electronic business guide to make purchase of goods by shoppers within Lagos Island Central Business Districts (CBD) of the state easier.

The special adviser to Governor Akinwunmi Ambode on CBD, Anofiu Elegushi disclosed this while briefing journalist at the weekend.

Elegusgi said that the agency was poised to transform Lagos CBD into a 21st Century business precinct with intuitive ideas. He added that the e-guide project would fast track the economy and that it was designed toward enhancement of ease of doing business in the state.

“The governor has approved the e-guide project and the process is at 80 per cent completion. Right now, what we are trying to do is to get the business addresses at the Lagos Island.

“Partially, it has been working, we just need to fill in more information. It will allow shoppers in the area to track where they are buying a particular product as it saves time and brings development.

“It is also expected to generate enormous revenue for the government through advert placements and patronage,’’ Elegushi said.

He expressed optimism on the prospect of the project saying that the seamlessness would be to the delight of the shoppers.

“At the touch of a button on laptops, phones and computers, shoppers are well guided to where to reach out for their purchases.

“The application is fully functional and what we are doing now is to upgrade it consistently because new businesses are cropping up on a daily basis. The information is not enough, we are trying to add more,’’ he said.

18

BUSINESS DAY

Monday 21 May 2018

Live @ The Stock Exchange Top Gainers/Losers as at Friday 18 May 2018 GAINERS

Market Statistics as at Friday 18 May 2018

LOSERS

Company

Opening

Closing

Change

Opening

Closing

Change

BETAGLAS

N83.2

N87.35

4.15

Company TOTAL

N221.8

N212

-9.8

STANBIC

N48

N48.95

0.95

MOBIL

N188

N181

-7

OANDO

N7.55

N8.25

0.7

DANGCEM

N248

N245

-3

UBA

N11.1

N11.45

0.35

UNILEVER

N52.35

N50

-2.35

FIDSON

N5.49

N5.76

0.27

CCNN

N26.1

N24

-2.1

ASI (Points)

40,472.45

DEALS (Numbers)

3,973.00

VOLUME (Numbers)

350,549,313.00

VALUE (N billion)

5.077

MARKET CAP (N Trn

14.660

New board promises to complete forensic audit on Ikeja Hotel, its investee companies Stories by Iheanyi Nwachukwu

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he board of directors of Ikeja Hotel Plc has assured investors its immediate readiness to complete the forensic audit on the company and its investee companies, Capital Hotels Plc and Tourist Company of Nigeria.

The Securities and Exchange Commission (SEC) had barely one year ago (on May 4, 2017) dissolved the former Board of Directors of the company and appointed an interim board led by Anthony Idigbe.

A seasoned legal practitioner with over 30 years’ experience, Idigbe is a Senior Advocate of Nigeria (SAN) and the Senior Partner at Punuka Attorneys & Solicitors.

Idigbe disclosed the interim board’s commitment to complete the forensic audit on Ikeja Hotel Plc and other immediate actions at the Nigerian Stock Exchange (NSE) on Friday May 18, 2018 while presenting “Facts Behind The Restructuring”.

Ikeja Hotel Plc is listed on

L-R: Godstime Iwenekhai, head, Listings Regulation, The Nigerian Stock Exchange (NSE); Tinuade Awe, executive director, Regulation Division, NSE; Anthony Idigbe SAN, chairman, Ikeja Hotel Plc and Abatcha Bulama, director, Ikeja Hotel Plc during the Facts Behind the Restructuring at the Exchange.

the services sector (hotels/ lodging sub-sector) of the Nigerian Stock Exchange (NSE) main board. Its share price stood at N1.78 on Friday with outstanding units of 2,078,796,399.

Idigbe told stockbrokers and analysts present at the Exchange that the Board’s immediate actions will include the implement the decision and recommendations of the Forensic Auditors.

The interim board objectives are to protect the investors of the company; protect the integrity of the capital market; and restore the lost fortunes of the company in the shortest time possible.

Its mandate is to oversee the conduct of a forensic investigation into the affairs of the company (investigation into the allegations of unauthorised sale of shares and diversion of proceeds from sale of shares amongst others).

The current Board of Director, which was inaugurated on the May 15, 2017, together with the management, swung into action in the following areas: concluded the audit of financial statements for the years ended 2012, 2013, 2014, 2015 and 2016; successfully convened the 40th Annual General Meeting of the company on October 25, 2017; reorganised the staff with resultant return to

vibrancy and company efficiency; and reduced operating expenses by 9percent.

The new board of directors of the company has also reviewed existing/commenced drafting of new corporate governance policies; commenced active engagement with the regulators in a bid to resolve all regulatory sanctions levied against the company; actively engaged with the operators, key shareholders and staff in a bid

to restoring business confidence; and appointed Meristem Capital as Financial Advisers to propel the ongoing restructuring activities.

Idigbe said they will “work with the financial advisers to unlock inherent value of Ikeja Hotel Plc; ensure adherence to best standards of regulatory compliance and Corporate Governance; restore investor confidence in the company; and return the company to its position as the leader in the Tourism and Hospitality industry in Nigeria.

Ikeja Hotel Plc principal business is the provision of hospitality services. The Company has controlling interest in Capital Hotels Plc, the owners of Sheraton Abuja Hotel. It also has significant influence in the Tourist Company of Nigeria, owners of Federal Palace Hotel & Casino by virtue of its shareholding. Ikeja Hotel Plc has a long-standing operating agreement with global hospitality brand, Marriott International. The Top choice hotel for 7 international airline crews has 663 rooms, 8 outlets, 14 meeting rooms and 2 conference halls.

SEC reiterates commitment to master plan implementation Forte Oil: Implications of a potential sale - United Capital

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he Securities and Exchange Commission (SEC) has reiterated its determination to improve investors’ confidence through various initiatives currently being implemented as part of the Ten-Year Capital Market Master Plan.

Mary Uduk, Director General of Securities and Exchange Commission stated this in Abuja when she was honoured by the West African Student Union Parliament (WASUP) for Exemplary Leadership.

She disclosed that as the head of the Apex Regulatory body of the Nigerian Capital Market, she would along with her team continue with

implementation of policies that will deepen the market and boost the Nigerian economy She said “The Master Plan will continue to be our working document and we shall continue to implement initiatives that will promote investors’ confidence such as E-Dividend registration, Direct Cash Settlement, Dematerialisation, Complaint Management Framework, Financial Literacy and Investors’ Protection Fund, among others”.

The acting director general enjoined investors who are yet to register for e-dividend and those that have not yet regularised their multiple accounts to do so.

“Forbearance win-

dow for shareholders with multiple accounts has now been extended to September 2018. Registrars have acknowledged that investors have started coming forward but there are still some challenges in the process.

We are working hard to address those challenges and that is why we encourage all affected investors to come forward and take advantage of the window before the new deadline” she said.

Speaking earlier, representative of the Chairman of the Union, Kobehi Kossa commended the acting director general on her efforts so far in restoring investors’ confidence in the market thereby leading to economic growth.

...suspends buy rating on stock, ticker under review

F

orte Oil Plc (FO) has announced its intention to sell off its upstream services and power businesses in Nigeria and divest from its Ghanaian operations in a bid to focus on its core fuel distribution operation at home. Though the deal is still subject to shareholder approval at its forthcoming 39th Annual General Meeting, we believe that it has far-reaching implications on FO’s future cashflow.

Divesture Context FO’s asset sale announcement came off as a surprise, given that the company had been exploring partnerships and joint ventures across the energy value chain. We can make

sense of the company’s intention to divest from its Ghanaian operations - considering its insignificant 0.9% revenue contribution.

FO’s total investment in AP Oil and Gas Ghana Limited sums up to 1.1bn, yet the company has impaired up to N735.5m from the operation in the past two years. Looking over to its power business, it has been a “point of pride” to the company, given the succour it has brought to revenues, amid an underwhelming performance from the company’s core business. FO’s Power business has become increasingly germane to the company’s cash flow, recording an impressive revenue CAGR of 85.2% over the past 5 years.

FO owns a 57% equity in Amperion Power Distribution Company which owns 51% Equity in Geregu Power Plc - effectively, FO technically owns a 29% stake in Geregu Power Plc. Our View Though downstream players continue to grapple with capped margins, the power sector is also plagued with structural problems across the electricity supply chain, from gas supply shortages to depressed collection rates. Any potential upside from these sectors, in the long run, remains tied to the deregulation of the downstream sector, as well as bold policy reforms that can address the shortfalls of the power sector.

Monday 21 May 2018

BUSINESS

COMPANIES & MARKETS

DAY

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Government VAT from banks, other financial institutions drop 26% in Q1

Pg. 20

Co m pa n y n e w s a n a ly s i s a n d i n s i g h t

Leadway Group records N15bn PBT in 2017 …pays N27 billion claims Modestus Anaesoronye

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eadway Group in the financial year ended December 31, 2017 recorded a Profit Before Tax of N15.10 billion, as against N8.79 billion in 2016, indicating 71.8 percent, while the Profit After Tax also appreciated remarkably by 82 percent, moving from N7.59 billion in 2016 to N13.84 billion at the close of business in 31 December 2017.

Martin Luther Agwai, retired general and chairman Leadway Assurance Company Limited disclosed the figures at the Company’s 46th Annual General Meeting held in Lagos.

Agwai said the group recorded a 60 percent increase in Gross Premium Written (GPW) from N52.7 billion in 2016 to N84.18 billion in 2017.

This increase in GPW he said is largely attributable to the significant growth of its annuity business and positive impact of the decrease yields of treasury securities which resulted in significant fair value gains and investment income in her portfolio of treasury assets.

According to him, the net underwriting income increased also significantly by 68 percent from N43.1 billion in 2016 to N72.5 billion in 2017, mainly due to increase in annuity premium and the prior year’s premium earned in the current year for general business specialty line.

He also stated despite the harsh economic environment, the Company grew its investment income by 60 percent from N10.8billion in 2016 to N17.3billion in 2017, which translates to a signifi-

cant increase in profit after tax for the year by 91 percent from N6.7billion in 2016 to N12.8billion in 2017 for the parent company and an increase of 81.5 percent from N7.6 billion to N13.8billion for the group.

The company committed to meeting its obligations to customers during the review period, incurred claims expenses rising by 19 percent from N23billion in 2016 to N27billion in 2017 with annuity pay

out of N14.7billion accounting for the largest proportion of this amount, followed by over N9billion claims paid in General Insurance.

From the profit achieved in 2017, the shareholders of the company got dividend payout of N1.75billion which translates to 18.67 kobo per share, and a bonus issue of N N3.637billion.

“Total assets of the Company grew by 63.9 percent

from N166 billion in 2016 to N272billion in 2017 while the Group’s assets increase by 61.4 percent from N176 billion in 2016 to N284 billion in 2017 due to additional investments in Government debt securities, growth in reinsurance assets and investment properties.”

Focused on business expansion and maintaining competitiveness in the market, the firm said it has increased its authorized capital from N5

billion to 10 billion.

“Due to business exigencies, particularly for our company to be able to competitively engage in business expansion, without the anxiety of inadequate paid up capital required for measuring the capability and capacity of our company to underwrite business and in order to strategically position ourselves at a vantage and leadership point among other operators, it has become imperative for us to increase the Authrorised and paid up capital. This, among other things, would also put us in the state of readiness for the implementation of transition to the Risk Based Capital model proposed by the regulator. As such, you will be voting for us to increase our authorized share capital Continues on page 20

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COMPANIES & MARKETS

Government VAT from banks, other financial institutions drop 26% in Q1 BUNMI BAILEY

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overnment revenue from VAT, that comes from banks and other financial institutions declined (year-on-year) by 26.4 percent in the first quarter of 2018, according to the National Bureau of Statistics (NBS) report of the Sectorial distribution of VAT BusinessDay analysis of the VAT data from the NBS report shows that VAT revenues from the banks and financial institutions dropped by 26.4 percent to N5.3 billion in Q1 2018 from N7.2 billion in Q1 2017 Analysts have attributed this to the most of the financial services being done online “It could only be that banks have shifted from normal banking hall transactions to online bank transactions. Banks are now leveraging on fintech to carry out their transactions,” Johnson Chukwu, CEO of Lagos-based financial advisory firm, Cowry Assets, said

on phone “On year on year, from Q2 2017 you are looking at some level of economy recovery.

And as a result a lot of financial services are being done online,” Chukwu, further added Also the banks have said that they were not making enough activities as they did before Stephen Nejo, a banker, said, “Banks were making enough transactions as before”.

VAT is the world’s most common form of consumption tax. It is a tax that is levied on the supply of most goods and services and on the importation of goods.

According to the Value Added Tax Act Cap V1 LFN 2004 (as amended), all banks and financial institutions, except Community banks, Peoples bank and Mortgage institutions are required to charge VAT on services rendered by them to their customers and account for same to the Federal Inland Revenue Service.

Also from the report, the total sectorial VAT data for Q1

2018 reflected that the sum of N269.8billion was generated as VAT in Q1 2018 as against N254.1 billion generated in Q4 2017 and N221.4billion in Q1 2017 representing 6.2 percent increase (Quarter-on-Quarter) and 21.9 increase (Year-onYear) Other manufacturing generated the highest amount of VAT with N30.1 billion generated and closely followed

by Professional Services and Commercial and Trading both generating N16.6 billion and N14.9 billion respectively while Mining generated the least and closely followed

by Pharmaceutical, Soaps & Toiletries and Textile and Garment industry with N46.2 million, N243.44 million and N285.43 million generated respectively.

Out of the total amounted generated in Q1 2018, N121.4 billion was generated as NonImport VAT locally while N98.4 billion was generated as NonImport VAT for foreign. The balance of N50 billion was generated as NCS-Import VAT.

Leadway Group records...

Continued from page 19 from N5billion to N10billion.

In view of this, shareholders approved to capitalize a sum of N5,317,550,202.00 out of a combination of the Share Premium Account and the Retained profit for 2017 and to distribute to shareholders by creating additional 9 (Nine) shares for every 8 (Eight) shares held.

Going into the future, Agwai said “While the impact of the recovery of the economy remains mixed for most, we are optimistic that the gains of exiting of the economy from the throes of recession will continue apace as we navigate the issues and challenges that 2018 may bring.

“On our part, we are en-

thusiastically encouraged to leverage on our brand and strategic initiatives to increase insurance awareness, create risk products tailored to every segment of consumer needs with the connotation of hope and happiness, rather than negativity, towards rejuvenating insurance as a need and necessity.”

“We are motivated by the implementation of the strategy of our company to remain the vanguard in market share and profitability through digitization, diversification of our business portfolio and domination of the market.”

We are improving our value proposition to our customers and committed to progressively eliminate 50 percent time spent on processes and alternately focus on anticipated and appreci-

ated value add to our customers to deliver unbeatable service delivery, Agwai stated.

Oye Hassan-Odukale, managing director of the Company said it is glaring that our company has continued to deepen activities in the insurance market by opening up new distribution channels and consolidating on existing businesses, thereby sustaining market leadership. “we closed the year surpassing our GWP target of N67.3 billion, with the bulk of pour income now coming from pension annuities” Oye said this comes with a large pecuniary responsibility to those who have entrusted their financial future to us and require us to be ever more conservative in our financial standing.

CIMA Africa, ICAN sign to sign MOU on international certification

T

he Chartered Institute of Management Accountants (CIMA) Africa and the Institute of Chartered Accountants of Nigeria (ICAN) have announced the completion of processes that would lead to signing of a Memorandum of Understanding to enable ICAN members complete an accelerated route to earn the Chartered Glob-

al Management Accountant (CGMA) designation.

An event to formalise the signing of the MOU between the two bodies has been scheduled to hold today in Abuja.

A statement from CIMA said the partnership between CIMA and ICAN is a continuation of CIMA’s efforts to re-skill finance professionals in Africa to meet the needs of an evolv-

ing world.

“Backed by the strength of the Association of International Certified Professional Accountants which is the new global organisation formed by CIMA and the American Institute of CPAs (AICPA), CIMA is working to equip finance professionals with the education and resources they need to go beyond for the future”, the statement read.

Monday 21 May 2018

C002D5556

BUSINESS DAY

21

COMPANIES & MARKETS Cordros Asset Management gets nod to launch milestone fund 2023, 2028 MICHEAL ANI

F

ollowing the clearance of its offer document by the Securities & Exchange Commission, Cordros Asset Management Limited (CAML), a leading asset management group is set to launch its milestone funds 2023 and 2028, that is aimed at providing long term strategy for managing mutual funds.

Speaking at the ceremony which held in Lagos at its Ikoyi Office, the Group Managing Director of Cordros Capital Limited, Wale Agbeyangi said “The Cordros Milestone Fund 2023 and 2028 are target date mutual funds which pursues a long-term investment strategy to manage asset allocation (mix of asset classes) of the fund, to become more conservative as the target dates (2023 & 2028) approach,” Cordros Asset Management Limited is a subsidiary of Cordros Capital Limited licensed by the Securities & Exchange Commission as a fund/portfolio management company Globally, Target Date mutual funds have become increasingly

popular and at the end of 2017, the Investment Company Institute (ICI) estimated that a total of $1.1 trillion was invested in these funds worldwide.

It is surprising but also laudable that the Cordros Milestone Fund 2023 and 2028 are the first set of target date mutual funds to be launched in Nigeria as this represents a significant achievement not just for Cordros alone, but the entire capital market.

“The Funds which are initiatives of our asset management subsidiary is a strategic move aimed at providing products which cater to the retail segment of the economy. These are specially designed to provide for individuals and corporations saving towards a ‘target’,” Agbeyangi added Echoing the same line of thought is the Acting CEO, Cordros Asset Management Limited, Leye Adekeye who said ‘the firm is excited at the prospects that the Funds hold.

According to him, Milestone Funds are balanced funds and will have a mix of Equities, Fixed Income and Money Market instruments.

“The funds will start out seek-

ing capital appreciation and will become more conservative by seeking capital preservation towards their target dates,” “Opportunities abound in the capital markets and these funds will ensure we are leveraging these opportunities and providing diversification for our clients,” “We will like to encourage individuals saving towards different goals and targets to take advantage of the professional fund management when the offer opens,” Adekeye said The Cordros Milestone Fund 2023 and 2028 are open-ended funds, authorized and registered in Nigeria as Unit Trust Schemes under Section 160 of the Investment and Securities Act. The Funds objectives are to maximize total returns and reduce volatility as the Funds approach their target dates (2023 & 2028).

The investment focus is initially on growing assets and shifts towards capital preservation to manage future income risk.

As the Funds gets closer to their target dates, the asset allocation shifts to reflect shorter investment time horizons.

EFInA appoints Sarah Alade, Bunmi Lawson as directors HOPE MOSES-ASHIKE

E

nhancing Financial Innovation and Access (EFInA), a financial sector development organisation that focuses on promoting financial inclusion in Nigeria, has announced its new board members and chief operations officer.

The company made the announcement following the departure of its pioneer CEO, Modupe Ladipo, who also served as chair of the company’s Board of Directors for the last two years.

Ladipo played a critical role in the development of EFInA and, the establishment of EFInA as a thought leader and ‘honest broker’ in promoting financial inclusion in Nigeria.

She achieved significant accomplishments, such as - the provision of strategic guidance and innovation grants to several institutions over the years for the development of innovative inclusive financial services and building the capacity of key stakeholders in the private and public sectors on key aspects of financial inclusion.

She also supported the CBN with the development of the National Financial Inclusion Strategy and played an instrumental role in the establishment of the Financial Inclusion Secretariat.

She strongly advocated for the development and implementation of key financial inclusion policies such as the Regulatory Framework for Mobile Payments Services; Guidelines on NonInterest Banking; Tiered KYC Regime; Guidelines for Agent Banking and Agent Banking Relations; Takaful-Insurance Operational Guidelines, and the Regulatory Framework for Licensing SuperAgents, and established EFInA’s Access to Financial Services in Nigeria (A2F) survey as a credible benchmark for measuring access and the level of usage of financial services in Nigeria.

Between 2008 and 2018, she worked with other stakeholders to reduce financial exclusion and during that period, the number of adults in the formal financial sector in Nigeria increased by over 26 million, even as EFInA’s grants directly benefitted over two and a half million people.

The new Board chair, Segun Akerele, in a statement released in Lagos, said, “Modupe, we cannot thank you enough for the dedication, passion, enthusiasm and motivation you have given our company over the past 10 years.

You will be greatly missed by the board, donors, staff and stakeholders. “We look forward to following the clear success path you have laid out and we are

hopeful and excited for the next chapter of EFInA as we continue to support the Central Bank and other important stakeholders in implementing the National Financial Inclusion Strategy.”

EFInA also announced that the former governor of the CBN, Sarah Alade, and the former CEO of Accion Microfinance Bank, Bunmi Lawson, have joined its Board. EFInA, which is funded by the UK Government‘s Department for International Development (DFID) and the Bill & Melinda Gates Foundation, stated further that the two new directors come with stellar reputations, especially in the finance industry, and each has been named by The Guardian Newspaper among the ‘power women in Nigeria’s financial sector.’

Akerele noted that Alade remained the only woman to have served as CBN governor by virtue of her appointment as acting governor in 2014, stressing that before her retirement in 2017, she spent 24 years at the bank, serving in many important capacities including; Head Fiscal Analysis Division, Director Banking Operations Department, and as Deputy Governor of Economic Policy, she coordinated the Economic Policy Directorate that comprised Research, Monetary Policy, Trade and Exchange, Statistics Departments.

Managing

22 BUSINESS DAY

C002D5556

Monday 21 May 2018

GOVERNMENT

BUSINESS

Interview with Public Sector Leaders

‘After 1% approval of budget towards hea

LANRE TEJUOSO is the Chairman of the Senate Committee on Health. He spoke with KEMI AJUMOBI on the rec tion Act and the next point of action which is the NHIS. He also shared on exodus of medical doctors, the need

T

he appropriation of N57.150bn for Basic Health Care Provision Fund (BHCPF), how did you facilitate the signing into law?

Like you know, I am a first time senator and it was a miracle for me to chair a grade A committee. Normally, it is reserved for second timers, more senior senators however, to be a Senator is enough achievement.

I do believe it was based on efficiency because whether you are a first timer or not, you must be proven to be efficient at what you say you know how to do. Luckily too, I am the only medical doctor in the entire senate aside the Senate President. So obviously, putting a round peg in a round hole was the solution. When I got in, I asked the question, how do we move forward? What is the most important aspect of our laws that can make a major difference in our healthcare sector in Nigeria? And I realised that this bill of 2014 was it. All the contents were already spelt out, our duty at the National Assembly is to introduce laws and more however, I realised that there are so many laws that have been done by our predecessors that have not been implemented and here we are again. I then asked myself, are we going to start churning out another set of new laws?

I did not want us to play to the gallery rather, let’s ensure implementation and I said that during my tenure, my priority will be to implement the 2014 Act because I looked at all the other countries around the world, the countries that are succeeding in Africa, they are countries that are funding the health sector adequately and they are not as rich as Nigeria. Countries like Swaziland, Botswana and more. All the African countries sat down in 2001 in Abuja and decided on what we all call Abuja Declaration, where they all agreed that every country in Africa must have at least 15% in their budget for health. That was about 17 years ago. All the countries that are getting near this declaration have their health indices interestingly good.

It therefore means that the success of health is subject to funding. So you do not need to reinvent the will. After the 2001 declaration, we never achieved up to 5%, even the 5%, maybe

they have released about 3% (5% on paper) so of course you cannot expect our health sector to change because they keep doing the same thing every year. They then decided again in 2014 to introduce this 1% of the CRF as a law to encourage our donors because the 1% is going into a fund and 1% is the minimum expectation of our own contribution to the fund as a Nation. The idea is that other donors like Bill Gates, UNICEF and the rest will put in their funds and Nigeria has been putting in zero. We have surrendered to our foreign partners. How do we now improve our health sector? These and more motivated me to champion the campaign. I began to campaign round my colleagues in the Senate because the truth is, if you are not a medical doctor, or in any way affiliated with the health sector, you may not be so passionate about health.

The others can say health sector is not only the sector that needs funding, there is need for money in education sector, agriculture, defence and so on but I said, all the other sectors are operated by human beings and if so, why not focus on the human beings being healthy to start with? These were the basics of my advocacy within the National Assembly and I got people from outside the country to also help fight for this cause.

I also put pressure on relevant people. I had a meeting with the Vice President, Minister for Budget, Minister for Finance; I also pushed for the implementation at the Nutrition Policy program advocacy that I arranged. I invited the World Bank to Nigeria to keep engaging us. I also encouraged the World Bank to host Ministers of Finance and others on Health Policy in Washington as a side meeting. The President of The World Bank was there and I made sure I emphasised that they should help ensure that the 1 per cent is actualised. I also had the privilege of meeting with Bill Gates, a one-on-one meeting which also included the Honourable Minister of Health and I asked Bill Gates to encourage us if he loves us the way he says he does. I needed him to encourage us to be selfsustaining and emphasise on our own contribution because I don’t want us to always depend on others.

Why did it take so long for

the 1% to be implemented?

It is political will. Mind you, in Nigeria, we are very good at emergencies. If today, we hear of Ebola crisis, money will come out from somewhere, if we hear there is Monkey Pox, Nigeria will rise to the occasion so it’s a matter of political will.

What change will this budget approval bring to the health sector?

First of all, today, if the average person in the rural area is sick, the nearest hospital or clinic they can go to is maybe about 20-50km, we are therefore saying that every local government, every ward, should have a functional Primary

Healthcare Centre that is well staffed, that can offer the basic healthcare to Nigerians, to a pregnant woman, to a child under 5, to our old citizens, such that within a walking distance, they can receive medical attention. What we have at present are people with minor cases going to the tertiary hospitals.

Tertiary hospitals are meant for referrals like surgery. Tertiary hospitals should concentrate more on teaching our new doctors and nurses and carrying out major surgeries. The primary Health Centres must be made functional to treat malaria, antenatal care, give nutrition supplements to children and babies, do immunisa-

tion for our babies and so on. Today, our Primary Healthcare Centres are used for chicken hatchery and the likes because what happened in the past is that, politicians want their names written down as having done something for their community, and the most common thing they all say they want to do is to build clinics in their names. As such, we have over 30,000 of ‘clinics’ like these and out of that 30,000 maybe about 4,000 is functional. More so, the structures are there with the name of the donor boldly inscribed on it. Some of these structures have been there for 10 years not functioning however, they all say that the donor has “performed” meanwhile, how do you build a clinic without talking to the Minister of Health to know if they have nurses

Monday 21 May 2018

C002D5556

BUSINESS DAY

23

LANRE TEJUOSO

Chairman of the Senate Committee on Health

althcare, next is to amend NHIS’

cent approval of N57.150bn for the BHCPF in the 2018 Appropriad for better Primary Healthcare Centres, among others. Excerpts.

We intend to ensure that every Nigerian contributes at least N200 per month for health.

With this, we are targeting about 100 million Nigerians (Perhaps we say the rest are vulnerable and cannot afford) this comes to about N20billion naira every month and in a year, it’s N240billion naira. This is times six of the budget of the health sector capital. An average Nigerian can buy at least N500 recharge card per month so, if they know that with N200, they can walk into any health centre and be attended to, N200 deducted from their account or from their phone or whatever means adopted, will not affect them and that will be a major difference in terms of health funding. We are hoping that this will be done before we go on recess this year which is July.

Why is health insurance difficult for the Nigerian populace to embrace?

It is because they do not trust the system and most importantly, the law has not been fortified to ensure that everyone contributes. It’s only the civil servants that have been contributing. Truth is, there is no point asking people to contribute if they do not have places to go to. They must be a Primary Healthcare Centre close by. We must be ready to receive them for service before we start deducting their money.

to put there? What about drug availability? Also, is there the possibility of continuity of their salaries for workers who will be working there? So they just have buildings all over the place.

Now we are out to ensure that there is content in the buildings and it is well funded.

Is 1% enough?

Considering that for 4 years now nothing has been done, at least we are now guaranteed that at least every year, something will be allocated to the health sector in the budget. It is a fund that will keep on growing. Our partners too will be putting funds in there. We are also going to amend the health insurance scheme, after this budget, it is the next thing to be done.

Exodus of medical doctors from Nigeria It is very simple; the question is why do they go? It is because they know they can get more returns for their profession. It is about salaries. We need to change the salary structure of our doctors. We need to isolate the doctors from the system. The problem if that, when a change is effected, every healthcare practitioner in different capacity in the sector also want the change too whereas, it is the exodus of Doctors that the country is feeling the most. We should copy what was done in Delta state.

I mean the former governor of Delta state, Uduaghan, and I think it was easy for him to do this because he is a doctor too.

What he did was that, he decided that all the Deltans that are medical doctors abroad should give him their pay slip

and he offered them exactly that amount to come back to Delta state for their medical practice. That is why some of them are still there today despite the fact he is not the governor. He was paying some as much as N3million per month and some of them are still back home practicing, they are glad to be back. We need to take the bull by the horn. I am actually afraid of the kind of doctors we will be churning out because of our teaching hospitals. I say so because those who are meant to be teaching the younger doctors have gone outside the country. The question is: Who is teaching our young doctors? Perhaps we need to start by saying that those teaching at the tertiary hospitals must have a salary structure that is at par with international standards. We don’t need the doctors in the UK for PHCs, a Youth Corper doctor can do that, young doctors can do that, we need the senior ones at the tertiary hospitals. Some of the doctors do not have their experience in Nigeria, they have it abroad and then they choose to flourish abroad. In the UK and even America now, if they withdraw all the Nigerian Doctors from their system, the system will collapse. These people are eager to come back but they will only do so if the environment is ok.

Strikes My take on strike is that of sincerity of purpose. This particular strike, I remember immediately it happened, I invited all the participants to come and brief me what happened.

Firstly, I reminded them that it’s not when they have problems they should remember to come to the parliament.

They must carry us along with on-goings. They said they had sent a letter 5 months ago but we are not aware. They informed us that there was an agreement they had with the executives spelt out and they all signed, both the Ministry of Health and Ministry of Labour.

It was agreed that a certain amount of money was going to be paid and up till now, the agreement has not been fulfilled. We need to start with fulfilling that agreement that they made and signed themselves so it’s a straight forward thing.

It has to be implemented. It

is the same general problem we have of planning without implementation. The conclusion is that we will see how to appeal with the executives so they pay whatever they agreed because for them to agree on what they will be paid means that they truly deserve it. It’s not about negotiating again, it’s about doing what you have promised and signed to do.

What Nigerians need to know At this stage, we need to implement together. Every Nigerian should identify the nearest Primary Healthcare Centre to his house. Follow the development after this money has been introduced, they deserve a functioning clinic. If the places are not making a difference, speak up, let us know where. As of now, some people are in charge of the implementation of the approved funds so we need to be policing the development because from where we are, we cannot be at the every place at the same time. We have about 10,00 wards in the country, I am not able to visit all but it is the person close to the place that can give us feedback. We are going to create a pathway of getting information from the public, like phone lines and emails where complains will be coming in. It will be a department for operations.

Curtailing outbreaks We have what we are doing at the National Assembly. For instance, I invited the nursing and midwifery school to ascer-

tain what processes the nurses go through. Do they teach them on how to be prepared for such outbreaks? Because if they are properly taught, there will not be so many casualties. It observed that it is after there are casualties that safety measures are being learnt.

Therefore this New Year, I told them to include training of Nurses and health workers on how to protect themselves and protect the patient because we need continuous training. We also want to ensure that as part of what they get when they graduate, apart from their certificate, they must also have their personal protective equipment. The doctors need it too. Everybody needs continuous education.

Cancer centres We have been trying to build cancer centres for years and we are still battling. Obasanjo and other past governments spent a lot on equipment yet; people are still going abroad for major diagnostic services. Instead of putting 10 billion in service equipment, let us put 5 billion to pay for services. Let’s say we want to treat 10,000 cancer patients this year, the minimum payment for cancer treatment is 1million naira, so if an investor knows we have money to pay for services, they will rush and build for us because the investor is aware that a certain amount is set aside for equipment already. We are appealing to the private sector to help support this cause because we cannot do it all alone.

Managing

22 BUSINESS DAY

C002D5556

Monday 21 May 2018

Monday 21 May 2018

C002D5556

GOVERNMENT

BUSINESS DAY

23

LANRE TEJUOSO

BUSINESS

Chairman of the Senate Committee on Health

Interview with Public Sector Leaders

‘After 1% approval of budget towards healthcare, next is to amend NHIS’ LANRE TEJUOSO is the Chairman of the Senate Committee on Health. He spoke with KEMI AJUMOBI on the recent approval of N57.150bn for the BHCPF in the 2018 Appropriation Act and the next point of action which is the NHIS. He also shared on exodus of medical doctors, the need for better Primary Healthcare Centres, among others. Excerpts.

T

he appropriation of N57.150bn for Basic Health Care Provision Fund (BHCPF), how did you facilitate the signing into law?

Like you know, I am a first time senator and it was a miracle for me to chair a grade A committee. Normally, it is reserved for second timers, more senior senators however, to be a Senator is enough achievement.

I do believe it was based on efficiency because whether you are a first timer or not, you must be proven to be efficient at what you say you know how to do. Luckily too, I am the only medical doctor in the entire senate aside the Senate President. So obviously, putting a round peg in a round hole was the solution. When I got in, I asked the question, how do we move forward? What is the most important aspect of our laws that can make a major difference in our healthcare sector in Nigeria? And I realised that this bill of 2014 was it. All the contents were already spelt out, our duty at the National Assembly is to introduce laws and more however, I realised that there are so many laws that have been done by our predecessors that have not been implemented and here we are again. I then asked myself, are we going to start churning out another set of new laws?

I did not want us to play to the gallery rather, let’s ensure implementation and I said that during my tenure, my priority will be to implement the 2014 Act because I looked at all the other countries around the world, the countries that are succeeding in Africa, they are countries that are funding the health sector adequately and they are not as rich as Nigeria. Countries like Swaziland, Botswana and more. All the African countries sat down in 2001 in Abuja and decided on what we all call Abuja Declaration, where they all agreed that every country in Africa must have at least 15% in their budget for health. That was about 17 years ago. All the countries that are getting near this declaration have their health indices interestingly good.

It therefore means that the success of health is subject to funding. So you do not need to reinvent the will. After the 2001 declaration, we never achieved up to 5%, even the 5%, maybe

they have released about 3% (5% on paper) so of course you cannot expect our health sector to change because they keep doing the same thing every year. They then decided again in 2014 to introduce this 1% of the CRF as a law to encourage our donors because the 1% is going into a fund and 1% is the minimum expectation of our own contribution to the fund as a Nation. The idea is that other donors like Bill Gates, UNICEF and the rest will put in their funds and Nigeria has been putting in zero. We have surrendered to our foreign partners. How do we now improve our health sector? These and more motivated me to champion the campaign. I began to campaign round my colleagues in the Senate because the truth is, if you are not a medical doctor, or in any way affiliated with the health sector, you may not be so passionate about health.

The others can say health sector is not only the sector that needs funding, there is need for money in education sector, agriculture, defence and so on but I said, all the other sectors are operated by human beings and if so, why not focus on the human beings being healthy to start with? These were the basics of my advocacy within the National Assembly and I got people from outside the country to also help fight for this cause.

I also put pressure on relevant people. I had a meeting with the Vice President, Minister for Budget, Minister for Finance; I also pushed for the implementation at the Nutrition Policy program advocacy that I arranged. I invited the World Bank to Nigeria to keep engaging us. I also encouraged the World Bank to host Ministers of Finance and others on Health Policy in Washington as a side meeting. The President of The World Bank was there and I made sure I emphasised that they should help ensure that the 1 per cent is actualised. I also had the privilege of meeting with Bill Gates, a one-on-one meeting which also included the Honourable Minister of Health and I asked Bill Gates to encourage us if he loves us the way he says he does. I needed him to encourage us to be selfsustaining and emphasise on our own contribution because I don’t want us to always depend on others.

Why did it take so long for

We intend to ensure that every Nigerian contributes at least N200 per month for health.

With this, we are targeting about 100 million Nigerians (Perhaps we say the rest are vulnerable and cannot afford) this comes to about N20billion naira every month and in a year, it’s N240billion naira. This is times six of the budget of the health sector capital. An average Nigerian can buy at least N500 recharge card per month so, if they know that with N200, they can walk into any health centre and be attended to, N200 deducted from their account or from their phone or whatever means adopted, will not affect them and that will be a major difference in terms of health funding. We are hoping that this will be done before we go on recess this year which is July.

Why is health insurance difficult for the Nigerian populace to embrace?

It is because they do not trust the system and most importantly, the law has not been fortified to ensure that everyone contributes. It’s only the civil servants that have been contributing. Truth is, there is no point asking people to contribute if they do not have places to go to. They must be a Primary Healthcare Centre close by. We must be ready to receive them for service before we start deducting their money.

the 1% to be implemented?

It is political will. Mind you, in Nigeria, we are very good at emergencies. If today, we hear of Ebola crisis, money will come out from somewhere, if we hear there is Monkey Pox, Nigeria will rise to the occasion so it’s a matter of political will.

What change will this budget approval bring to the health sector?

First of all, today, if the average person in the rural area is sick, the nearest hospital or clinic they can go to is maybe about 20-50km, we are therefore saying that every local government, every ward, should have a functional Primary

Healthcare Centre that is well staffed, that can offer the basic healthcare to Nigerians, to a pregnant woman, to a child under 5, to our old citizens, such that within a walking distance, they can receive medical attention. What we have at present are people with minor cases going to the tertiary hospitals.

Tertiary hospitals are meant for referrals like surgery. Tertiary hospitals should concentrate more on teaching our new doctors and nurses and carrying out major surgeries. The primary Health Centres must be made functional to treat malaria, antenatal care, give nutrition supplements to children and babies, do immunisa-

tion for our babies and so on. Today, our Primary Healthcare Centres are used for chicken hatchery and the likes because what happened in the past is that, politicians want their names written down as having done something for their community, and the most common thing they all say they want to do is to build clinics in their names. As such, we have over 30,000 of ‘clinics’ like these and out of that 30,000 maybe about 4,000 is functional. More so, the structures are there with the name of the donor boldly inscribed on it. Some of these structures have been there for 10 years not functioning however, they all say that the donor has “performed” meanwhile, how do you build a clinic without talking to the Minister of Health to know if they have nurses

to put there? What about drug availability? Also, is there the possibility of continuity of their salaries for workers who will be working there? So they just have buildings all over the place.

Now we are out to ensure that there is content in the buildings and it is well funded.

Is 1% enough?

Considering that for 4 years now nothing has been done, at least we are now guaranteed that at least every year, something will be allocated to the health sector in the budget. It is a fund that will keep on growing. Our partners too will be putting funds in there. We are also going to amend the health insurance scheme, after this budget, it is the next thing to be done.

Exodus of medical doctors from Nigeria It is very simple; the question is why do they go? It is because they know they can get more returns for their profession. It is about salaries. We need to change the salary structure of our doctors. We need to isolate the doctors from the system. The problem if that, when a change is effected, every healthcare practitioner in different capacity in the sector also want the change too whereas, it is the exodus of Doctors that the country is feeling the most. We should copy what was done in Delta state.

I mean the former governor of Delta state, Uduaghan, and I think it was easy for him to do this because he is a doctor too.

What he did was that, he decided that all the Deltans that are medical doctors abroad should give him their pay slip

and he offered them exactly that amount to come back to Delta state for their medical practice. That is why some of them are still there today despite the fact he is not the governor. He was paying some as much as N3million per month and some of them are still back home practicing, they are glad to be back. We need to take the bull by the horn. I am actually afraid of the kind of doctors we will be churning out because of our teaching hospitals. I say so because those who are meant to be teaching the younger doctors have gone outside the country. The question is: Who is teaching our young doctors? Perhaps we need to start by saying that those teaching at the tertiary hospitals must have a salary structure that is at par with international standards. We don’t need the doctors in the UK for PHCs, a Youth Corper doctor can do that, young doctors can do that, we need the senior ones at the tertiary hospitals. Some of the doctors do not have their experience in Nigeria, they have it abroad and then they choose to flourish abroad. In the UK and even America now, if they withdraw all the Nigerian Doctors from their system, the system will collapse. These people are eager to come back but they will only do so if the environment is ok.

Strikes My take on strike is that of sincerity of purpose. This particular strike, I remember immediately it happened, I invited all the participants to come and brief me what happened.

Firstly, I reminded them that it’s not when they have problems they should remember to come to the parliament.

They must carry us along with on-goings. They said they had sent a letter 5 months ago but we are not aware. They informed us that there was an agreement they had with the executives spelt out and they all signed, both the Ministry of Health and Ministry of Labour.

It was agreed that a certain amount of money was going to be paid and up till now, the agreement has not been fulfilled. We need to start with fulfilling that agreement that they made and signed themselves so it’s a straight forward thing.

It has to be implemented. It

is the same general problem we have of planning without implementation. The conclusion is that we will see how to appeal with the executives so they pay whatever they agreed because for them to agree on what they will be paid means that they truly deserve it. It’s not about negotiating again, it’s about doing what you have promised and signed to do.

What Nigerians need to know At this stage, we need to implement together. Every Nigerian should identify the nearest Primary Healthcare Centre to his house. Follow the development after this money has been introduced, they deserve a functioning clinic. If the places are not making a difference, speak up, let us know where. As of now, some people are in charge of the implementation of the approved funds so we need to be policing the development because from where we are, we cannot be at the every place at the same time. We have about 10,00 wards in the country, I am not able to visit all but it is the person close to the place that can give us feedback. We are going to create a pathway of getting information from the public, like phone lines and emails where complains will be coming in. It will be a department for operations.

Curtailing outbreaks We have what we are doing at the National Assembly. For instance, I invited the nursing and midwifery school to ascer-

tain what processes the nurses go through. Do they teach them on how to be prepared for such outbreaks? Because if they are properly taught, there will not be so many casualties. It observed that it is after there are casualties that safety measures are being learnt.

Therefore this New Year, I told them to include training of Nurses and health workers on how to protect themselves and protect the patient because we need continuous training. We also want to ensure that as part of what they get when they graduate, apart from their certificate, they must also have their personal protective equipment. The doctors need it too. Everybody needs continuous education.

Cancer centres We have been trying to build cancer centres for years and we are still battling. Obasanjo and other past governments spent a lot on equipment yet; people are still going abroad for major diagnostic services. Instead of putting 10 billion in service equipment, let us put 5 billion to pay for services. Let’s say we want to treat 10,000 cancer patients this year, the minimum payment for cancer treatment is 1million naira, so if an investor knows we have money to pay for services, they will rush and build for us because the investor is aware that a certain amount is set aside for equipment already. We are appealing to the private sector to help support this cause because we cannot do it all alone.

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Monday 21 May 2018

COMPANIES & MARKETS Stakeholders caution Oando over Ansbury, Volpi fraud investigations DIPO OLADEHINDE

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g roup o f c o n c e r n e d s ha re holders of Oando Plc has cautioned the company over purported moves to reconcile Oando and Ansbury Investments Inc. owned by popular Nigerian-Italian billionaire, Gabriele Volpi.

The shareholders objected to the reconciliatory moves on the basis of an on-going investigation of Volpi for money laundering by Italian authorities. Volpi who holds Nigerian and Italian dual citizenship, is currently under investigation in Italy for alleged tax evasion, along with some of his associates.

The investigation, which is being conducted by the Italian Economic and Financial Crimes Police, also focuses on Volpi’s longtime associate, and popular Italian banker, Gaimpiero Fiorani. Both have been brought before judges Francesco Pinto and Marcello Maresca, accused of having returned several million of Euros to Italy from a huge tax evasion scheme, a scheme the prosecutors believe, was designed and engineered by Volpi using his ‘right-hand man,’ Fiorani.

With the recent development, the shareholders under various umbrella associations including Investor/Distinct

Shareholders Association, Pacesetters Shareholders Association and Sage Shareholders amongst others insisted that Volpi needs to be on the right side of the law before any reconciliation with Oando which they described as a lawabiding corporate institution.

According to the president of one of the shareholder groups who spoke on condition of anonymity, “All we are saying is that Volpi should do the right by sorting every issue he has with the law before seeking to reconcile with Oando. As shareholders, we own Oando Plc and make it mandatory on the board to resist any attempt to reconcile Volpi with our company while he has a case of fraud to reconcile with the Italian authorities.”

Also speaking in the same vein, a senior official at the Convention on Business Integrity, who pleaded not to be named, said “reconciling Ausbury and Oando may raise fundamental ethical questions on Oando and cause the Italian anti-corruption police to beam its searchlight on Oando.” The official asserted further: “This alone may affect not just the reputation of Oando but its share value.”

All efforts by BusinessDay to reach the management of Oando proved abortive as the company didn’t respond to emails sent to the company.

According to data obtained from Bloomberg, Oando’s stock which opened at N9.50 on Thursday, April 19 had by 3pm same day traded at N9.60 after the lifting of suspension by the Nigerian Stock Exchange.

It will be recalled that the Nigeria Stock Exchange on 18th October 2017 announced that it had placed the shares of Oando Plc, a public quoted energy company trading on the floor of the NSE, on ‘full suspension for 48 hours.’ Thereafter on 23rd October 2017, the NSE further announced that it had placed the shares of the Company on ‘Technical Suspension’.

But just five days after the technical suspension placed on its shares was lifted, the firm’s shares recorded 51percent massive growth.

The fact that 178 million Oando shares were on a bid for the first day of trade after the lifting of the suspension but only 5.5 million were available for sale further attested to the high demand for the company’s stock whose six-month absence from the NSE was keenly felt by all shareholders.

A member of the Pacesetter Shareholders Association, who pleaded anonymity, also expressed reservation at the reconciliation move, saying it was capable of eroding the company’s stock and reputation.

Business Event

L-R: Herbert Wigwe, Access Bank group managing director (GMD), D’banj, Nigerian Music Star and Entrepreneur, Amaechi Okobi, group head, Communications & External Affairs,Access Bank Plc at the Access Bank #AskMeAnything Instagram session

R-L: Nath Ude, head, services and technology, Union Bank; Kandolo Kasongo, chief risk officer, Union Bank; Adenike Akinlade, chief marketing officer, Digital Jewels Limited (affiliate of British Standards Institution), and Wale Olokodana, director, enterprise commercial business, Microsoft, at the official presentation ceremony of the Bank’s ISO 22301:2012 certificate in Lagos recently.

Winners emerge in FirstBank Visa Gold Card Promo

F

irst Bank of Nigeria Limited in partnership with Visa International has announced the emergence of two lucky winners, Hadizat Bello and Ado Ibrahim Idris, in the just concluded FirstBank Visa Gold card issuance and usage promo. The promo winners along with their partners will be going on a 5 day all-expense paid trip to Russia to watch the 2018 FIFA World Cup. The elated winners thanked the Bank profusely for the opportunity given to enjoy 2018 World cup matches live in Rus-

sia.

The Group Head, E-Business Group, Chuma Ezirim, in his response commended the winners for trusting and using the FirstBank Visa Gold Card for their transactions.

“FirstBank is committed to ensuring ease, convenience and security in banking transactions for all its customers and our Visa Gold Card is accepted globally and gives our customers global privileges and benefits, discounts and rewards at choice hospitality centers worldwide, among other extensive benefits”, he stated.

The FirstBank Visa Gold card is an international premium credit card, issued in partnership with Visa International. It is accepted for payment at over 29 million partner locations and enabled for cash withdrawals at over 1.8 million ATMs in over 200 countries and territories worldwide, wherever the Visa logo is displayed.

The card can be made available in 24 hours with instant PIN selection and the bank enjoins present and prospective customers to visit the nearest FirstBank branch today to pick their FirstBank Visa Gold Card.

L-R: Abiola Bashorun, Representative of World Quality Alliance, presenting award to Suraj Negi, group general manager, Eliel Jerahmeal Nigeria Limited, and Damilola Adefemi, group managing director, Eliel Group, for XIZI Elevators and Escalators for Africa’s Best Premium Quality Elevators and Escalators product company in Abuja recently.

Unilever CEO leads talk at Marketing Edge National Marketing Summit

U

nilever Nigeria, Ghana CEO, Yaw Nsarkoh has confirmed his participation in the forthcoming annual Marketing Edge National Marketing Summit. Nsarkoh who is the global reckoning for his thoughtleadership credentials in the areas of marketing and capacity management will be guest speaker at the annual event.

His speech will center on the theme of the summit, “Marketing Paradigms in the Age of Digitalisation.” This year’s Mar-

keting Edge National Marketing Summit holds July in Lagos Nsarkoh’s disclosure and confirmation completes a lineup of high-powered marketing and advertising professionals who will be speakers and Panelists as they are have indicated interest to be a part of the highly anticipated summit.

The Unilever CEO, is one of the most accomplished corporate executives in Africa. Before his redeployment in 2014 to head Unilever’s operation in Nigeria. He served as Strategic

Assistant to Unilever Executive Member and President of Unilever Asia, Africa, Central and Eastern Europe based in the United Kingdom.

According to the publisher/ CEO of Marketing Edge, John Ajayi, organisers of the summit, “the decision to select Nsarkoh as the guest speaker for this year’s event was very strategic and not unconnected with his deep insights on the African markets and contemporary market challenges in emerging markets.

Hadi Sirika, minister of state, aviation (centre), in company of Sabiu Zakari, permanent secretary, transport, directors from the ministry, heads of aviation parastatals and director general, director general, Infrastructure Concession Regulatory Commission (ICRC), and transaction advisers, heads of agencies and directors from the ministry meeting at Aviation Ministry, in Abuja.

Monday 21 May 2018

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26

BUSINESS DAY

Stocks

Currencies

Commodities

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Rates + Bonds

Economics

Funds

Week Ahead

Watchlist

ECONOMY

Net foreign portfolio inflow stood at N6.03bn in April

Monday 21 May 2018

P.E

SHORT TAKES N269.79billion Sectoral distribution of Value Added Tax (VAT) data for Q1 2018 reflected that the sum of N269.79billion was generated as VAT in Q1 2018 as against N254.10bn generated in Q4 2017 and N221.38billion in Q1 2017 representing 6.17 percent Increase Quarter-on-Quarter and 21.87 percent increase Year-on-Year.

$100 million

ENDURANCE OKAFOR

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nalysis of transactions for domestic and foreign portfolio participation for the period ended 30 April 2018 recorded a net flow of N6.03 billion, which is the difference between the foreign inflow of N64.23 billion and the foreign outflow of N58.25 billion.

The net flow for the month of April is however less than the N7.21 billion reported for March when the foreign inflow was at N69.71 billion against the N62.50 foreign outflow, as compiled from the publication by the Nigeria

Stock Exchange (NSE).

A further breakdown of the transactions at the nation’s bourse in the month under review shows a decrease in the total transactions by 22.11percent from N272.48 billion re c o rd e d i n Ma rc h 2018 to N212.23 billion.

Foreign investors however outperformed domestic investors by 15.48 percent in the same month. Although both foreign and domestic transactions reduced in the period compared to the previous month.

Total domestic transactions reduced by 36.05 percent from N140.27 billion in March to N89.70 billion in April 2018 while

foreign transactions also reduced by 7.32 percent from N132.21 billion to N122.53 billion within the same period.

There was a 7.79 percent decrease in foreign inflows from N69.71 billion in March 2018 to N64.28 billion in April 2018. Foreign outflows also reduced by 6.8 percent from N62.50 billion to N58.25 billion within the same period.

The Foreign Portfolio Investment (FPI) outflow includes sales transactions or liquidation of portfolio investments through the stock market, whilst the FPI inflow includes purchase transactions on the NSE (Equities only).

On the domestic composition of transactions on the exchange, the institutional composition of the domestic market reduced by 49.04 percent from N91.27 billion in March to N46.51 billion in April 2018.

The retail composition also decreased by 11.86 percent from N49 billion to N43.19 billion within the same period. As such there was a higher participation by institutional investors over their retail counterparts.

Meanwhile, between 2011 and 2015, foreign transactions consistently outperformed domestic transactions. However, domestic transactions ma r g i na l l y o u t p e r-

formed foreign transactions in 2016 and 2017, accounting for 52 percent of the total transaction value in 2017.

Also, a foreign transaction which was N1.539trillion in 2014 declined to N518billion in 2016, but increased significantly by 133 percent to N1.208t in 2017 thereby accounting for about 48 percent of total transactions in 2017.

Over an eleven year period, domestic transactions have decreased by 62.46 percent from N3.556t in 2007 to N1.335t in 2017. However, there was a significant increase in 2017 by 111 percent from N634 billion recorded in 2016.

Three states hardest hit by rising inflation amid potential food shortage BUNMI BAILEY

K

ebbi, Rivers, and Yobe states are the top three states in April that have recorded the highest level of inflation year- to-year, data from Nigeria Bureau of Statistics (NBS) showed amid forecast of food shortage.

According to the NBS

data, the state with the highest inflation rate yearon-year was Kebbi State with inflation rate of 15.9 percent, followed closely

by Rivers State with an inflation rate of 15.0 per cent and Yobe with 14.3 percent BusinessDay’s analysis shows that food inflation year-on-year was highest in Kebbi state at 17.9

percent followed closely

by Bayelsa state with 17.8 percent and Nasarawa with 17.7 percent .While Benue with 10.9 percent, Kogi with 12.3 percent and Gombe with 12.5 percent recorded the least rise in food inflation.

On a month on month b a s i s h o w e v e r, Ap r i l 2018 all items inflation

was highest in Kebbi with 1.7 percent, Rivers with1.7 percent and Lagos with1.6 percent, while Bauchi had 0.01 percent recorded slowest rise and Kaduna and Kano recorded price deflation on a month on month all item basis in April 2018.

On a month on month basis however, April 2018

food inflation was highest in Lagos with 2.5 percent, Ekiti and Kebbi with 2.0 percent and Rivers with 1.98 percent, while Benue, Borno, Kaduna, Kano and Nasarawa all recorded food price deflation or negative inflation (general decrease in the Continues on page 27

The African Development Bank has approved a $100 million loan for Nigeria’s Indorama Eleme Fertilizer & Chemicals aimed at helping it boost fertilizer production, the bank said in a statement on Thursday.

The company, a unit of Singapore-based petrochemical producer Indorama, is seeking to double annual output of urea fertilizer from 1.4 million tonnes to 2.8 million tonnes, the statement said.

Once a net importer of fertilizer, Nigerian production has grown in recent years. In 2017, it exported around 700,000 tonnes of urea to markets in West African as well as North and South America.

N16.58bn and N14.93bn Other manufacturing generated the highest amount of VAT with N30.14billion generated and closely followed by Professional Services and Commercial and Trading both generating N16.58bn and N14.93billion respectively

BusinessDay MARKETS INTELLIGENCE (Team lead: BALA AUGIE - Analyst: DIPO OLADEHINDE, ENDURANCE OKAFOR, BUNMI BAILEY Graphics: DAVID OGAR )

BMI provides in-depth analysis and data on industries, companies, stocks, currencies, fixed income/credit, economics, regulation and factors that influence investor’s decision-making Email the BMI team patrick.atuanya@businessdayonline.com

Monday 21 May 2018

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Markets Intelligence ECONOMY

Cement war in key ratio, who takes the driver seat?

DIPO OLADEHINDE

T

he battle for supremacy in the cement industry is not only in market share but also in key accounting ratios as both Dangote Cement and Larfarge goes head to head in profitability and efficiency margins.

BusinessDay investigation showed that although Dangote Cement recorded better performance in the EBITDA margin however Larfarge recorded better performance in the Assets turnover ratio which is a key efficiency ratio.

In the EBITDA margin which is essentially a measurement of a company’s earnings before interest, taxes, depreciation, and amortization as a percentage of its total revenue. EBITDA can be used to analyse and compare profitability among companies and industries as it eliminates the effects of financing and accounting decisions.

In the cement industry, Dangote recorded best performance ratio with an EBITDA margin of 48 percent in its full year 2017 financial report which is much higher than its 2016 margin of 40 percent while it recorded 59 percent and 56 percent in 2015 and 2014 respectively.

However, Larfarge was second compared to Dangote with an EBITDA margin of 10 percent in 2017 its full year 2017 financial report which is much lower compared to its 2016 margin of 13 percent while it recorded 20 percent and 26 percent in 2015 and 2014 respectively.

Also in the Efficiency ratios which measures the ability of a company to use its assets and manage its liabilities effectively well to generate revenues. Major efficiency ratios include asset turnover ratio, inventory turnover and receivable turnover.

Larfarge showed its efficiency prowess with its superior asset turnover of 52 percent in 2017, which is an improvement compare to its 44 percent in 2016, while it recorded 59 percent and 63 percent in 2015 and 2014 respectively.

Dangote Cement A breakdown of the combined profit in

the period under review showed Dangote Cement Plc, the largest producer of the building material recorded a net income of N204.24 billion, from N159.50 billion recorded in 2013.

The largest producer of the building material in Africa’s largest economy has utilized each unit of sales in generating higher profit as margins improved. This means it is efficient amid a tough and unpredictable macroeconomic environment.

Earnings before interest and tax (EBIT) margin increased to 37.76 percent in December 2017 as against 29.66 percent as at December 2016.

Gross profit margins moved to 56.39 percent in the period under review as against 47.35 percent the previous year. Net margin increased to 25.35 percent in the period under review as against 23.22 percent as at December 2016.

Cost of sales ratio fell to 43.66 percent in the period under review from 52.64 percent the previous year as the company switched to coal, a cheap source of energy to power plant at the factory.

Dangote Cement’s sales grew by 30.96 percent to N805.58 billon in December 2017 from N615.10 billion as at December 2016.

A breakdown of sales by region shows the Nigerian business make up 68.59

percent (N552.36 billion ) of total revenue while Pan Africa make up 32.08 percent (N258.44 billion).

The company’s cement volume stood at 21.22 million metric tonnes as at December 2017, which represents 5.81 percent drop from 22.53 million metric tonnes for last year.

Cement production capacity increased slightly by 2.35 percent to 43.55 million metric tonnes in the period under review from 42.55 million metric tonnes.

Lafarge Lafarge Africa Plc is grappling with spiralling cost of production as rising interest on borrowing wiped out all of earnings, leaving the cement maker in a loss position.

For the year ended December 2017, Lafarge Africa posted a loss after tax of N34.60 billon from a profit position of N16.89 billion the previous year, the worst results in five years since BusinessDay started compiling data.

A N43.02 billion finance costs or interest expense in the income statement in the period under review swallowed all of operating profit of N7.88 billion, which inevitably resulted in the loss.

It is glaring that Lafarge Africa is exposed to financial risk as its debt pile has resulted in increased interest payment hence suppressing bottom line (profit).

Consequently, risk of stockholders return is increased.

Times interest coverage is 0.18 times operating profit in the period under review, which means the cement maker’s ability to meet interest expenses are questionable.

CCNN The Cement Company of Northern Nigeria (CCNN) Plc’s profit after tax stood at N3.22 billion as at December 2017, representing a 106.50 percent surge from the N1.56 billion recorded five years ago.

Revenue followed the same growth trajectory, hitting N19.58 billion in December 2017. This represented a 29.83 percent increase from the N15.31 billion recorded in December 2013.

The company’s shares have gained 71.31 percent since January 2, 2015, to close at N17.80 at close of trading day on Wednesday April 6, 2018.

The relative peace in the northern part of the country and low competition where the company supplies cement were major drivers of utilisation rates for the company.

The cement maker is efficient in deploying shareholders’ resources in generating higher profit as net profit margins hit 16.25 percent in the period under review, a 0.60 point increase from 10.23 percent recorded five years ago.

Three states hardest hit by rising inflation amid...

Continued from page 26

general price level of goods and services or a negative inflation rate) in April 2018.

“Food inflation has been trending down. I think the harvest season is over and planting season has started. And usually when that happens, there is pressure on food prices, so I think that food prices might come up a little bit in the near term,” Yemi Kale, Statistical General, National Bureau of Statistics said.

“The cost push factors that led to the rise in inflation in 2016 such as FOREX scarcity and transport costs have been easing albeit slowly but continues to ease thereby leading

to a slowdown in the rate of price increases for food and non-food items,” Kale said.

Latest report from the Nigeria Bureau of Staticics (NBS) showed Nigeria recorded its lowest inflationary rate in 26 months at 12.48 percent.

Inflation rate grew to a double digit of 11.38 in February 2016 when the nation’s economy plunged into recession and rose to 12-year high at 18.72 percent in January 2017. Since then, the rate has taken a downward trend, decreasing to 12.48 per cent in April, making it the 15th consecutive disinflation (slowdown in the inflation rate though still positive) in headline year on year inflation since

January 2017 which represents 0.86 percent points less than the rate recorded in March 2018, which was 13.34 percent.

T h e c e nt ra l b a n k l e f t i t s main lending rate at a record high of 14 percent when policy makers met April 4 to continue fighting inflation that’s been above the target range of 6 percent to 9 percent for more than two years.

Governor Godwin Emefiele said the bank would consider cutting rates when inflation slows closer to single digits.

Inflationary pressures could come from higher spending in the second half of the year, before general elections scheduled for February, according to

Nigeria’s statistician-general, Yemi Kale.

For the third straight year of expansionary fiscal policy, President Muhammadu Buhari proposed a 16 percent increase in the 2018 budget to N8.6 trillion ($28 billion).

The economy turned the corner in the second quarter of 2017 after five straight quarters of contraction and the government is bent on boosting spending to stimulate economic growth in Africa’s most populous nation.

The economy grew 0.8 percent in 2017, but average incomes have gone nowhere since 2015, in a country that produces people at an average of 3 percent annually.

28

BUSINESS DAY

Monday 21 May 2018

Live @ the Stock exchange Prices for Securities Traded as of Friday 18 May 2018 Company

Market cap(nm)

Price (N)

Change

Trades

Volume

PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 315,314.89 10.90 0.46 166 25,019,633 UNITED BANK FOR AFRICA PLC 391,583.37 11.45 3.15 126 8,264,118 879,101.83 28.00 0.36 200 7,579,750 ZENITH INTERNATIONAL BANK PLC 492 40,863,501 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 396,642.99 11.05 -0.45 192 22,005,602 192 22,005,602 684 62,869,103

BUILDING MATERIALS DANGOTE CEMENT PLC 4,174,924.31 245.00 -1.21 24 322,837 LAFARGE AFRICA PLC. 349,105.49 40.25 0.63 47 1,771,648 71 2,094,485 71 2,094,485

EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY LTD 432,330.22 734.70 - 13 49,315 13 49,315 13 49,315 768 65,012,903 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 2 150 74,786.54 78.40 - 11 18,400 OKOMU OIL PALM PLC. PRESCO PLC 75,600.00 75.60 - 21 144,828 34 163,378 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 511.20 4.26 - 1 100 1 100 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 2,460.00 0.82 -4.65 9 347,650 9 347,650 44 511,128

DIVERSIFIED INDUSTRIES A.G. LEVENTIS NIGERIA PLC. 1,561.90 0.59 - 4 1,751 202.36 0.52 - 1 49,729 JOHN HOLT PLC. S C O A NIG. PLC. 2,111.93 3.25 - 0 0 64,630.30 1.59 -1.85 75 6,951,192 TRANSNATIONAL CORPORATION OF NIGERIA PLC U A C N PLC. 44,660.10 15.50 0.65 47 1,617,903 127 8,620,575 127 8,620,575

BUILDING CONSTRUCTION ARBICO PLC. 711.32 4.79 - 3 186 3 186 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 38,280.00 29.00 - 11 61,758 165.00 6.60 - 0 0 ROADS NIG PLC. 11 61,758 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT CO. LIMITED 5,846.39 2.25 - 4 5,000 4 5,000 REAL ESTATE INVESTMENT TRUSTS (REITS) SKYE SHELTER FUND PLC 2,000.00 100.00 - 0 0 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 11,300.89 45.20 - 1 10 26,682.70 10.00 - 1 10 UPDC REAL ESTATE INVESTMENT TRUST 2 20 20 66,964

AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 1,479.53 0.31 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 16,050.47 2.05 -0.49 18 513,726 GOLDEN GUINEA BREW. PLC. 242.22 0.89 - 0 0 GUINNESS NIG PLC 227,799.81 104.00 - 46 115,119 INTERNATIONAL BREWERIES PLC. 445,265.65 51.80 - 7 25,776 NIGERIAN BREW. PLC. 985,218.33 123.20 -0.08 76 339,307 147 993,928 FOOD PRODUCTS DANGOTE FLOUR MILLS PLC 53,500.00 10.70 -1.87 191 4,761,349 DANGOTE SUGAR REFINERY PLC 225,600.00 18.80 1.35 74 693,103 FLOUR MILLS NIG. PLC. 143,308.27 34.95 -0.14 92 20,861,760 HONEYWELL FLOUR MILL PLC 19,666.89 2.48 -4.98 49 1,557,339 MULTI-TREX INTEGRATED FOODS PLC 1,489.00 0.40 - 0 0 N NIG. FLOUR MILLS PLC. 1,167.21 6.55 - 2 40,572 NASCON ALLIED INDUSTRIES PLC 54,578.43 20.60 0.24 15 139,544 UNION DICON SALT PLC. 3,676.41 13.45 - 0 0 423 28,053,667 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 24,416.63 13.00 - 34 169,300 NESTLE NIGERIA PLC. 1,268,250.00 1,600.00 - 22 16,726 56 186,026 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 3,439.82 3.30 - 16 97,218 16 97,218 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 86,754.92 21.85 - 27 133,049 UNILEVER NIGERIA PLC. 287,250.27 50.00 -4.49 47 402,017 74 535,066 716 29,865,905

BANKING DIAMOND BANK PLC 35,898.60 1.55 4.73 155 18,280,973 ECOBANK TRANSNATIONAL INCORPORATED 378,000.76 20.60 -3.29 37 652,889 FIDELITY BANK PLC 62,295.81 2.15 -3.15 261 30,336,768 GUARANTY TRUST BANK PLC. 1,294,971.89 44.00 -0.11 226 62,858,626 JAIZ BANK PLC 20,919.62 0.71 - 7 180,900 SKYE BANK PLC 10,549.03 0.76 1.33 177 31,607,437 STERLING BANK PLC. 42,609.82 1.48 -4.52 114 1,434,591 UNION BANK NIG.PLC. 177,636.59 6.10 -4.69 28 520,524 UNITY BANK PLC 10,987.98 0.94 - 9 20,506 WEMA BANK PLC. 31,631.06 0.82 -1.20 36 1,205,738 1,050 147,098,952 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE COMPANY PLC 4,117.00 0.20 - 5 17,350 AIICO INSURANCE PLC. 4,712.54 0.68 -2.86 66 8,207,152 AXAMANSARD INSURANCE PLC 25,725.00 2.45 - 3 1,100 CONSOLIDATED HALLMARK INSURANCE PLC 1,890.00 0.27 - 2 19,000 CONTINENTAL REINSURANCE PLC 15,559.12 1.50 - 7 224,810 CORNERSTONE INSURANCE COMPANY PLC. 5,155.33 0.35 - 0 0 EQUITY ASSURANCE PLC. 3,500.00 0.25 -3.85 6 956,500 GOLDLINK INSURANCE PLC 2,411.47 0.53 - 0 0 GREAT NIGERIAN INSURANCE PLC 1,913.74 0.50 - 0 0 GUINEA INSURANCE PLC. 2,456.00 0.40 - 1 100 INTERNATIONAL ENERGY INSURANCE COMPANY PLC 565.00 0.44 - 3 2,250 LASACO ASSURANCE PLC. 2,856.14 0.39 -2.50 25 6,180,885 LAW UNION AND ROCK INS. PLC. 3,480.03 0.81 3.85 8 2,250,406 LINKAGE ASSURANCE PLC 7,200.00 0.90 - 11 1,279,000 MUTUAL BENEFITS ASSURANCE PLC. 2,640.00 0.33 3.13 23 2,283,289 N.E.M INSURANCE CO (NIG) PLC. 13,993.33 2.65 - 17 274,194 NIGER INSURANCE CO. PLC. 1,625.29 0.21 -4.55 12 4,026,391 PRESTIGE ASSURANCE CO. PLC. 1,832.36 0.48 4.35 35 4,093,600 REGENCY ALLIANCE INSURANCE COMPANY PLC 1,800.56 0.27 3.85 6 2,820,941 SOVEREIGN TRUST INSURANCE PLC 2,168.61 0.26 8.33 51 27,112,219 STANDARD ALLIANCE INSURANCE PLC. 5,422.63 0.42 - 1 82,500 4,483.72 0.48 - 0 0 STANDARD TRUST ASSURANCE PLC UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 0 0 UNIVERSAL INSURANCE COMPANY PLC 8,000.00 0.50 - 0 0 VERITAS KAPITAL ASSURANCE PLC 4,992.00 0.36 -2.70 11 397,839 WAPIC INSURANCE PLC 6,959.02 0.52 -1.89 30 548,035 323 60,777,561

Company MICRO-FINANCE BANKS FORTIS MICROFINANCE BANK PLC 11,799.67 2.58 - 0 0 NPF MICROFINANCE BANK PLC 4,436.08 1.94 - 9 141,531 9 141,531 MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 5,460.00 1.30 - 1 700 7,370.87 0.50 - 0 0 ASO SAVINGS AND LOANS PLC INFINITY TRUST MORTGAGE BANK PLC 5,922.05 1.42 - 0 0 5,664.87 0.50 - 0 0 RESORT SAVINGS & LOANS PLC UNION HOMES SAVINGS AND LOANS PLC. 2,949.22 3.02 - 0 0 1 700 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 8,200.00 4.10 -2.38 38 1,233,929 30,879.79 5.25 - 8 102,905 CUSTODIAN AND ALLIED PLC DEAP CAPITAL MANAGEMENT & TRUST PLC 720.00 0.48 - 0 0 FCMB GROUP PLC. 51,487.05 2.60 -0.38 54 13,315,477 411.91 552.20 - 0 0 NIGERIA ENERYGY SECTOR FUND ROYAL EXCHANGE PLC. 1,646.52 0.32 3.23 5 252,618 3,312.39 103.20 - 0 0 SIM CAPITAL ALLIANCE VALUE FUND STANBIC IBTC HOLDINGS PLC 491,921.35 48.95 1.98 19 140,959 UNITED CAPITAL PLC 19,080.00 3.18 -1.55 46 1,750,052 170 16,795,940 1,553 224,814,684

HEALTHCARE PROVIDERS EKOCORP PLC. 1,680.29 3.37 - 0 0 1,634.44 0.46 - 0 0 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 0 0 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 544.04 0.55 - 0 0 0 0 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 8,640.00 5.76 4.92 21 1,907,047 FIDSON HEALTHCARE PLC GLAXO SMITHKLINE CONSUMER NIG. PLC. 25,412.38 21.25 -4.92 12 128,214 MAY & BAKER NIGERIA PLC. 2,616.60 2.67 - 8 106,814 1,191.29 0.69 - 7 95,400 NEIMETH INTERNATIONAL PHARMACEUTICALS PLC NIGERIA-GERMAN CHEMICALS PLC. 556.71 3.62 - 0 0 477.00 2.20 - 2 1,100 PHARMA-DEKO PLC. 50 2,238,575 50 2,238,575

COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 710.40 0.20 - 1 200,000 1 200,000 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 1,470.89 0.50 - 0 0 0 0 IT SERVICES CWG PLC 6,413.06 2.54 - 1 500 NCR (NIGERIA) PLC. 680.40 6.30 - 2 110 435.56 0.88 - 1 70,484 TRIPPLE GEE AND COMPANY PLC. 4 71,094 PROCESSING SYSTEMS CHAMS PLC 1,878.42 0.40 - 0 0 E-TRANZACT INTERNATIONAL PLC 19,110.00 4.55 - 1 100 1 100 6 271,194

BUILDING MATERIALS BERGER PAINTS PLC 2,608.41 9.00 - 5 7,470 28,000.00 40.00 - 10 3,697 CAP PLC CEMENT CO. OF NORTH.NIG. PLC 30,160.27 24.00 -8.05 76 525,779 886.35 0.42 5.00 1 100,000 FIRST ALUMINIUM NIGERIA PLC MEYER PLC. 361.24 0.68 - 1 100 PAINTS AND COATINGS MANUFACTURES PLC 467.82 0.59 - 1 1,660,000 PORTLAND PAINTS & PRODUCTS NIGERIA PLC 1,626.50 2.05 - 0 0 PREMIER PAINTS PLC. 1,279.20 10.40 - 0 0 94 2,297,046 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,256.91 2.09 - 0 0 CUTIX PLC. 2,774.08 3.15 - 7 89,550 7 89,550 PACKAGING/CONTAINERS BETA GLASS PLC. 43,672.55 87.35 4.99 13 75,090 GREIF NIGERIA PLC 388.02 9.10 - 0 0 13 75,090 114 2,461,686

CHEMICALS B.O.C. GASES PLC. 1,914.73 4.60 - 6 792 6 792 METALS ALUMINIUM EXTRUSION IND. PLC. 2,023.60 9.20 - 5 990 5 990 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 2 1,100 2 1,100 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 77.00 0.35 - 2 650 2 650 15 3,532

ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,878.81 0.30 -6.25 30 4,006,355 30 4,006,355 INTEGRATED OIL AND GAS SERVICES OANDO PLC 102,559.15 8.25 9.27 239 7,990,422 239 7,990,422 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 65,267.74 181.00 -3.72 46 47,168 CONOIL PLC 22,067.68 31.80 - 26 138,190 ETERNA PLC. 8,842.10 6.78 -3.14 29 247,864 FORTE OIL PLC. 50,471.14 38.75 - 37 139,454 MRS OIL NIGERIA PLC. 7,556.16 29.75 - 4 2,750 TOTAL NIGERIA PLC. 71,978.63 212.00 -4.42 32 76,685 174 652,111 443 12,648,888

ADVERTISING AFROMEDIA PLC 2,219.52 0.50 - 0 0 0 0 AIRLINES MEDVIEW AIRLINE PLC 20,866.39 2.14 - 2 150 2 150 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 564.65 0.48 - 1 1,634 1 1,634 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 3,536.98 6.00 - 6 103,662 TRANS-NATIONWIDE EXPRESS PLC. 384.45 0.82 - 4 13,875 10 117,537 HOSPITALITY TANTALIZERS PLC 1,188.30 0.37 - 0 0 0 0 HOTELS/LODGING CAPITAL HOTEL PLC 4,878.66 3.15 - 2 200 IKEJA HOTEL PLC 3,700.26 1.78 - 0 0 TOURIST COMPANY OF NIGERIA PLC. 7,862.53 3.50 - 2 800 TRANSCORP HOTELS PLC 56,623.01 7.45 - 2 150 6 1,150 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 5,760.00 0.48 - 4 13,100 4 13,100 PRINTING/PUBLISHING ACADEMY PRESS PLC. 302.40 0.50 - 0 0 LEARN AFRICA PLC 1,041.46 1.35 - 8 65,454 STUDIO PRESS (NIG) PLC. 1,183.82 1.99 - 0 0

Monday 21 May 2018

C002D5556

BUSINESS DAY

29

30

BUSINESS DAY

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Monday 21 May 2018

Monday 21 May 2018

C002D5556

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31

Access Bank Rateswatch Market Analysis and Outlook: May 18 — May 25, 2018

KEY MACROECONOMIC INDICATORS Indicators

Current Figures

Comments

GDP Growth (%)

1.92

Q4 2017 — higher by 0.52% compared to 1.40% in Q3 2017

Broad Money Supply (M2) (N’ trillion)

24.52

Increased by 0.91% in Apr’ 2018 from N24.30 trillion in Mar’ 2018

Credit to Private Sector (N’ trillion)

22.25

Increased by 0.045% in Apr’ 2018 from N22.24 trillion in Mar’ 2018

Currency in Circulation (N’ trillion)

1.96

Increased by 17.36% in Apr’ 2018 from N1.67 trillion in Mar’ 2018

Inflation rate (%) (y-o-y)

12.48

Declined to 12.48% in Apr’ 2018 from 13.34% in Mar’2018

Monetary Policy Rate (%)

14

Raised to 14% in July ’2016 from 12%

Interest Rate (Asymmetrical Corridor)

14 (+2/-5)

Lending rate changed to 16% & Deposit rate 9%

External Reserves (US$ million)

47.79

May 17 2018 figure — an increase of 0.59% from May Start

Oil Price (US$/Barrel)

78.73

May 18, 2018 figure— a increase of 2.43% from the previous week

Oil Production mbpd (OPEC)

1.79

Apr 2018 figure — an decrease of 0.44% from Mar’2018 figure

COMMODITIES MARKET

STOCK MARKET Indicators

Friday

Friday

18/05/18

11/05/18

40472.45

41177.68

(1.71)

14.66

14.92

(1.71)

Volume (bn)

0.35

0.13

160.93

Value (N’bn)

5.08

2.61

94.34

NSE ASI Market Cap(N’tr)

Change(%)

MONEY MARKET NIBOR Tenor

Friday Rate

Friday Rate

Change

(%)

(%)

(Basis Point)

18/05/18

11/05/18

Indicators

18/05/18

Energy Crude Oil $/bbl) Natural Gas ($/MMBtu) Agriculture Cocoa ($/MT) Coffee ($/lb.)

Cotton ($/lb.)

Sugar ($/lb.)

Wheat ($/bu.)

Metals Gold ($/t oz.)

Silver ($/t oz.)

Copper ($/lb.)

1-week Change

YTD Change

(%)

(%)

78.73 2.85

2.43 1.42

21.44 (6.74)

2648.00 118.20 85.84 11.54 506.00

(3.85) (0.84) 1.32 3.04 0.70

36.78 (9.22) 10.76 (24.72) 16.72

1287.09 16.40 306.60

(2.82) (2.26) (1.64)

(2.31) (4.60) (6.47)

OBB

7.8300

16.6700

(884)

NIGERIAN INTERBANK TREASURY BILLS TRUE YIELDS

O/N

9.0000

18.8800

(988)

Tenor

CALL

8.8750

76.0500

(6718)

30 Days

13.6178

14.5038

(89)

90 Days

15.3127

15.4722

(16)

FOREIGN EXCHANGE MARKET Market

Change

(%)

(Basis Point)

18/05/18

11/05/18

1 Mnth

12.37

10.81

3 Mnths

12.48

12.00

157 48

6 Mnths

12.78

12.15

63

9 Mnths

13.47

12.79

68

(N/$)

(N/$)

Rate (N/$)

12 Mnths

13.57

13.13

43

18/05/18

11/05/18

18/04/18

305.85

305.75

305.60

339.91

338.91

337.79

0.00

0.00

360.00

363.00

363.00

363.00

Parallel (N)

Friday

(%)

1 Month

Official (N) BDC (N)

Friday

Friday

Friday

Inter-Bank (N)

ACCESS BANK NIGERIAN GOV’T BOND INDEX

Indicators

Friday

Friday

Change

(%)

(%)

(Basis Point)

18/05/18

11/05/18

2675.38

2679.49

(0.15)

Mkt Cap Gross (N'tr)

9.07

9.08

(0.12)

BOND MARKET AVERAGE YIELDS Tenor

Global Economy In the US, retail sales rose by 0.3% in April after climbing by an upwardly revised 0.8% in March, according to a report released by the Commerce Department. The slowdown in the pace of retail sales growth came as sales by motor vehicle and parts dealers inched up by just 0.1% in April after spiking by 2.1% in March. US retail sales data is closely watched given that consumer spending accounts for more than two-thirds of US economic activity. In a separate development, China’s trade surplus rose to $28.8in April from a deficit in March of $5 billion, a report from the General Administration of Customs revealed. Data from the report showed exports fromup 21.5% year-onyear in April while imports rose 12.9%. Analysts believe the anticipation of US tariffs, and other actions, like the closer inspection of US soybeans and the beginning of efforts to curtail waste imports, may be responsible for the improvement in China’s trade balance. Elsewhere in the Eurozone, inflation rate was recorded at 1.2% yearon-year in April 2018, slightly down from 1.3% in the prior month. Annual core inflation which excludes volatile prices of energy, food, alcohol and tobacco was 0.7%, 0.3% below the figure stated in March according to the European Union Statistics Agency.

Prices of food, tobacco, energy and alcohol rose at a faster pace while the price of services edged lower.

The countries in the EU that recorded the highest inflation include France (1.8%), Germany (1.4%), Spain (1.1%) and Italy (0.6%).

Friday

Friday

Change

(%)

(%)

(Basis Point)

18/05/18

11/05/18

3-Year

0.00

0.00

0

Mkt Cap Net (N'tr)

5.90

5.93

(0.49)

5-Year

13.41

13.38

2

YTD return (%)

0.09

9.08

(8.99)

7-Year

12.64

12.60

4

YTD return (%)(US $)

-0.46

-46.12

45.66

10-Year

13.34

13.30

5

20-Year

13.38

13.26

12

Index

TREASURY BILLS (MATURITIES) Tenor

Disclaimer This report is based on information obtained from various sources believed to be reliable and no representation is made that it is accurate or complete. Reasonable care has been taken in preparing this document. Access Bank Plc shall not take responsibility or liability for errors or fact or for any opinion expressed herein .This document is for information purposes and private circulation only and may not be reproduced, distributed or published by any recipient for any purpose without prior express consent of Access Bank Plc.

Sources: CBN, Financial Market Dealers Association of Nigeria, NSE and Access Bank Economic Intelligence Group computation.

91 Day 182 Day 364 Day

Amount (N' million) 3,384.18 16,920.90 13,536.72

Rate (%) 10.2557 11.0801 11.9782

Local Economy The National Assembly has passed the country’s 2018 appropriation bill. The final bill sets federal spending at N9.12 billion. This is N508 billion higher than the N8.612 trillion proposed by the President to the joint session of the Assembly last year. Of the new proposed budget sum of N9.12 trillion, N3.5 trillion is earmarked for recurrent expenditure (initially captured as N3.494 trillion), N2.8 trillion for capital spending (compared to N2.652 trillion proposed by the President in November) and N2.2 trillion naira for debt servicing (from N2.014 trillion in the initial proposal). The crude oil benchmark price of the budget was also increased to $51 per barrel from $45 per barrel. However, the naira/dollar exchange rate was retained at N305 to $1. The daily crude oil production was also retained at 2.2 million barrels. A breakdown indicates that the Federal Ministry of Power, Works and Housing gets the highest allocation of N682.31 billion, followed by Transportation to the tune of N251.42 billion; N157.72 billion for Defence; N149.20 billion for Agriculture and Rural Development; N147.2 billion for Water Resources and N102.91 billion for Education while N150 billion was allotted for capital Special Intervention programme. In a separate development, Nigeria’s Inflation rate declined for the 15th consecutive month in April, according to figures released by the National Bureau of Statistics. The Consumer Price Index which measures inflation stood at 12.48% year-on-year (y-o-y) in April 2018, indicating a 0.86 percentage points drop in the 13.34% rate recorded in March 2018. Food inflation edged lower by 128 bps to record 14.80% y-o-y compared to 16.08% y-o-y in March. On a month-on-month basis, the Food subindex increased by 0.91% in April 2018, up by 0.01 per cent points from 0.90% recorded in March. The rise in the food index was caused by increases in prices of potatoes, yam and other tubers, fish, bread and cereals, oil and fats, vegetables, coffee, tea and cocoa, meat, milk, cheese and eggs. Core inflation also decelerated to 10.9% year-on-year in April 2018, from the rate recorded in March at 11.2%. On a month-on-month basis, the core subindex increased by 0.87% in April 2018, this was up by 0.03% when compared with 0.84% recorded in March.

Date 16-May-2018 16-May-2018 16-May-2018

previous week representing a 1.7% decline.

Similarly, market capitalization lost 1.7% to close at N14.66 trillion from N14.92 trillion the previous week. The negative performance may have been driven by profit-taking activities by some investors.

This week, market direction will hinge on the outcome of the CBN Monetary Policy Committee meeting holding between 21st and 22nd of May. Money Market Cost of borrowing at the money market trended downwards last week following inflows from matured Open Market Operations worth N262 billion which outweighed combined outflows of N104 billion in T-bills auction and OMO mop up.

Open Buy Back (OBB) and Over Night (O/N) rates eased to 7.83% and 9% from 16.67% and 18.88% the previous week. Slightly longer tenured rates such as the 30-day NIBOR also declined, settling at 14.04% from 14.50% the previous week.This week, we expect to see money market rates to move lower on the back of expected inflows from federation allocation to the three tiers of government.

Foreign Exchange Market The local currency weakened across most market segments monitored last week. At the interbank window the naira lost 0.3% to close at N339.91/$ compared to N338.91/$ the previous week. The official rate also trended lower, settling at N305.85/$ last week relative to N305.75/$ the week before. The movement witnessed in these markets may be attributed to a deliberate strategy by the monetary authorities to push rates to those prevailing at the investor and exporters window. At the parallel market, the Naira remained unchanged week on week. This week, we envisage the naira will oscillate around current levels.

Bond Market Bond yields on the average rose across most maturities last week. This was largely due to selloffs by foreign investors as the spread between US securities and Nigerian securities tighten, causing foreign portfolio reversals in the market. Yields on the five-, seven-, and ten-year debt papers climbed to 13.41%, 12.64% and 13.34% from 13.38%, 12.60% and 13.30% respectively for the corresponding maturities the previous week. The Access Bank Bond index decreased by 4.11 points to close at 2675.38 points from 2679.49 points the prior week, while market capitalization lost N10 billion to settle at N9.07 trillion. This week, we expect yields direction to be determined by the proposed bond auction.

Commodities Market Oil prices rose last week, supported by strong demand, looming sanctions on Iran and disruptions in Venezuelan production. Nigeria’s oil benchmark, Bonny light, edged up by $1.87 to settle at $78.73 per barrel. In contrast, precious metals prices slid last week, weighed down by rising US bond yields.Higher yields increase the opportunity cost of holding non-yielding assets such as precious metals.slipped from $1324.41 or 2.87% to $1287.09 an ounce, while silver decreased 2.3% to $16.40 an ounce. This week oil prices are likely to remain supported by combined impact of falling output in Venezuela andrenewed U.S. sanctions on Iranian crude exports. For precious metals, expectations that the US Federal Reserve will increase interest rates and tighten monetary policy may put further pressure on prices.

MONTHLY MACRO ECONOMIC FORECASTS

Stock Market The Nigerian stock market closed on a negative note last week as the major market indicators trended downwards. The bearish market pushed the All Share Index (ASI) down by 705.23 points to 40,472.45 points from 41,177.68 points the

Variables

May’18

Exchange Rate (Official) (N/$)

Jun’18

Jul’18

Inflation Rate (%)

338.50

338.90

339.10

11.89

11.50

10.80

Crude Oil Price (US$/Barrel)

79

77

78

For enquiries, contact: Rotimi Peters (Team Lead, Economic Intelligence) (01) 2712123 rotimi.peters@accessbankplc.com

32

BUSINESS DAY

Monday 21 May 2018

This is M NEY A daily guide to your Personal Finance

• Savings • Travel • Debt & Borrowing • Utilities • Managing your Tax

Don’t plan for a royal wedding if you can’t afford one!

W

hat a wond e r f u l weekend I’ve had watching every last detail of The Royal Wedding. The dress, the music, the pipe organ, the choir and orchestra, the flowers, the pomp and pageantry!

If you grew up on Grimm’s Fairy Tales, you were conditioned to dream of a fairy tale wedding perhaps to a real prince. Parents are often under a lot of pressure to give their children the ‘perfect’ wedding; this can be extremely expensive. To avoid getting overwhelmed by all the expenses, look carefully at the cost implications and prioritize right from the start.

Many couples get carried away with the idea of the wedding and do not stop to contemplate the actual marriage. Sit down with your fiancé and talk about your goals and what you would like to achieve in the next year, five years and beyond, such as starting a family, buying a new car or paying a deposit on your first home.

Write these goals down and keep them in view as you discuss the wedding plans. This should help you keep things in check as you prepare for life’s journey together.

Prepare a budget A good first step to keeping costs under control is to prepare a budget. Make a list of everything you can think

of; include pre-wedding events, the traditional and religious wedding ceremonies, the wedding reception and the honeymoon. What matters most? Build in a contingency fund for unplanned expenses; there will always be some.

Costs will usually include invitations, the wedding dress, hair and make up, outfits for bridesmaids and groomsmen, church fees for choir and musicians, DJ, band, reception venue, caterer, wedding cake, photographs, videographer, florist, guest favours, hotel, transportation, prewedding entertainment, honeymoon etc. An event planner takes so much off you and they are usually able to negotiate with a network of vendors for significant discounts, extras or to waive certain fees.

In Africa, a marriage is much more than a union between two people; it is a marriage of two extensive, extended families. One of the biggest cost factors is likely to be the number of guests that will attend, often without formal invitation. If your average cost per person for food, drink, and rentals is N10,000, removing thirty people from your guest list will save you N300,000.

A buffet menu tends to be cheaper than a plated one. Guests have come to expect and enjoy a good selection of mouth watering “small chops” that are filling and are reasonably priced at between N600 – N2,000 per head depending on the menu.

Drinks are a major cost particularly if spirits, fine

wines and champagne are on the list. Even where you bring your own drinks, corkage rates can be prohibitive.

A way to limit bar costs is to provide guests with basic drinks including water, fruit juices and soft drinks and drink tickets specifically for alcoholic drinks; after using their tickets, guests can purchase additional drinks with cash should they wish to do so. This is fairly common in other societies, but may be sniffed at here!

Guest favours need not be expensive; a small meaningful memento of sentimental value will do. Large wedding cakes are a huge waste as desert is usually served at the wedding. A wedding planner mentioned that about 50% of the wedding cake goes to waste as half the guests have left before it has even been cut and shared! Apparently, you can still achieve the glorious look of the multi-tiered wedding cake billed to impress, if you replace some of the tiers with “dummy” cakes!

What is most important to you? The ring, which you will wear, hopefully for decades, your wedding dress, or the photographs and video that capture the memories?

You can buy an inexpensive yet beautiful ring, and then upgrade as a sentimental gesture on a future anniversary and as you refine preferences. Bridegrooms and groomsmen routinely rent their outfits, but most brides will gasp at the thought of renting the dress of your dreams at a fraction of the cost of a new dress!

Start early and plan ahead In an ideal world, parents

should have been setting aside funds for family weddings as with other major goals such as funding your child’s education. Once you have passed the education funding hurdle, this is likely to be the next big spend.

Invest according to your time horizon. For a wedding that’s just less than a year away, funds should be placed in a bank fixed deposit or a money market mutual fund. If the expected marriage is still over five years away, you might invest in a portfolio of blue chip stocks or property for the prospect of long-term capital growth. An equity fund offers flexibility, diversification and professional management.

Remember that investing comes with risk so be sure to seek professional advice.

Who pays for what?

In the past, the bride’s family was expected to cover most of the costs. Nowadays both families tend to play a role and the division of costs is largely dependent on each family’s financial standing and of the bride and groom themselves. It is less about protocol, but rather, about circumstances and common sense, that should dictate who pays for what. Determine what the budget is and try to stick to it.

Attempting to split the bill between two families can be complicated so there must be absolutely clarity about how much each is willing and able to support. The couple and their families should meet for a frank discussion as early as possible. Don’t feel bad if you are the brides’ parents and can’t afford to pay for the entire wedding. Don’t be railroaded into wiping out

your retirement savings just to keep up appearances.

Sometimes the family that is contributing more might feel entitled to more control and make the others feel like the poorer relations.

Avoid strained relationships ahead of the wedding. Be sensitive, as money conversations can be awkward.

For late in life marriages, as the couple might have been working for many years, they should be able to finance their wedding themselves. As often this can come with “baggage,” discussions should include, health insurance and even prenuptial agreements.

Here are some don’t dos.

Don’t jeopardize your retirement plans It is nice to always want to put your children first, but you can’t afford to sacrifice your retirement to fund your children’s weddings.

Avoid borrowing to finance a wedding It is never wise to begin a marriage carrying significant debt. Try to avoid going into debt unless there is an expected inflow.

Downsize You don’t have to invite everyone you know; Invite only those people who are most important to you. You will upset some people.

Yewande Zacchaeus, CEO of Eventful Ltd, a leading Nigerian event planning company says, “Most of the weddings we organize range from 1,000 to 2,000 guests.

Our African heritage of large circles of family and friends, who simply must be invited to the event, does make weddings extremely expensive.

We now recommend a small engagement and a larger

wedding or a large engagement and a small intimate wedding, as a practical way of reducing costs. We keep telling our clients, there is life after the wedding day!”

It is about the marriage and not the wedding.

Financial concerns are a leading source of tension in relationships and have some part in most divorces, yet most couples go into marriage without ever broaching money matters. It may not be romantic, but it is important.

Don’t let the wedding ruin your marriage.

Instagram and Twitter: @ mmwithnimi, Facebook and Google+: ‘Money Matters with Nimi’. www. moneymatterswithnimi. com, or send us an email info@ moneymatterswithnimi. com Nimi Akinkugbe has extensive experience in private wealth management. She seeks to empower people regarding their finances and offers frank, practical insights to create a greater awareness and understanding of personal finance.

For more personal finance tips, contact Nimi: Email: info@ moneymatterswithnimi Website: www. moneymatterswithnimi. com Twitter: @MMWITHNIMI Instagram: @ MMWITHNIMI Facebook: MoneyMatterswithNimi

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Start-Up Digest

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Nigeria’s U-25 entrepreneurs and their exploits ODINAKA ANUDU

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i g e r i a h a s p ro duced a number of young entrepreneurs who defy the economic, social and cultural odds to create things that change the way business is done.

As our manner is, Start-Up Digest explores, this week, the exploits of some of the country’s under-25 entrepreneurs.

The essence of this is to open the eyes of their peers to see opportunities even in the midst of challenges and perennial complaints.

Chris Kwekowe Chris, now 24, turned down a job at Bill Gates’ Microsoft because he desired to find jobs for unemployed Nigerians through his Slatecube’s digital internship.

Before setting up Slatecube, the Abia State-born Computer Science graduate had cofounded Microbold with his younger brother, Ebube, when he was just 19. Microbold is an innovation-driven ICT solutions provider for start-ups and SMEs. It is interesting to note that 12 of Chris’ classmates did their internship at his Microbold in 2014.

Slatecube runs a three-tiered programme in which users complete courses in their selected courses, after which they are assigned virtual internships, which allow them to work remotely for big tech companies.

If the big firms are satisfied with the users, they employ them.

The company says the platform records 80 percent success in achieving people’s employment dream.

In 2015, the Nnamdi Azikiwe University graduate won $25,000 for the Anzisha Prize, an award for budding African entrepreneurs. Unemployment in Nigeria may not go very soon, meaning that this business will most likely become bigger as the year rolls by. Secondly, it’s also a good platform for employed people seeking to get jobs at big IT firms.

Faith Ajeyi Faith is still undergraduate and makes money from laundry.

The 23-year-old Faith runs her ow n company, Phoenix Laundr y S er vice, providing laundry services to Nigerians living in Lagos. Her ultimate aim is to provide mobile laundry services to Lagosians.

According to Faith, her company is not just about providing freshly cleaned clothes but is also creating wealth and em-

Chris Kwokwe

Faith Ajeyi

ployment for other Nigerians.

“The whole laundry service started with the desire to make money for myself despite being in school. I also seem to have a liking for washing. I first nursed the hope of running my own car washing company, but the need to own a land discouraged me,” she tells Start-Up Digest.

For Faith, who is based in Akoka, Lagos, washing people’s clothes could be more fulfilling than washing a car, as it affords her the opportunity to play an important part in human hygiene, dignity, and respect.

Speaking on how she started the business despite the huge capital involved, Faith says that her parents, seeing the enthusiasm in her towards starting the business, decided to assist her with N100, 000, which she used to purchase two washing machines.

“The big space in my parents’ compound today is my office and I already have two workers.

With hard work and commitment, I can say that I have made good profits,” she tells Start-Up Digest.

“I see this business moving forward because my clientele has increased over the month,” she says.

In spite of logistics challenges, Faith hopes her business will become bigger in a few years.

“I see it becoming a big company in two years to come. By

the grace of God I will have had two outlets by then,” she states.

“I think it is time for people to realise that they are not too young to do something. There are 17-year-olds who are making millions, so, if you think you are too young to work, then you are not living,” she adds.

Paul Ode Paul Ode is the CEO of Paul Trend Media. A national diploma holder from Yaba College of Technology, Lagos, Paul runs a blog known as ‘PaulTrendBlog’, which provides on-the-spot stories on politics, entertainment and sports, among others. He started the blog with N1, 000 with which he bought an online subscription, combining this business with studies.

He acquired some helpful skills after gaining admission to study Mass Communication in Yaba College of Technology, Lagos. During the first year, he started writing articles and news stories for online platforms.

“Being an online person, there are two things that motivate one in blogging: business and passion. Of course, everyone likes money, but I looked beyond this realm, I told myself that I needed to do it for passion, and then money would come later,” he says.

Paul explains that the potential in blogging is highly encompassing.

“Since it is a media work, one is expected to have certain features which show authenticity of issues covered. A blogger must be smart, honest, highly principled, and a peace lover on all grounds. He/she must have the ability to build content of public interests. There is no limit to what one can actually achieve online; it depends on one’s targets,” he says.

Earlier last year, through his affiliate, Paul got an ambassadorial job from Indomie Nigeria.

“The contract was to last for a whole year. Several nominees and contestants for beauty pageant have consulted me for online contests. In conjunction with my affiliates, I have offered publicity and promotion for different record labels and artistes. I am presently working as an online manager/media for MTN Automania Super Star Born King. More opportunities come every day, to mention but a few,” he discloses.

T h e y o u n g e nt re p re n e u r points out that there are so many projects he has at hand.

“If you know the definition of ‘PaulTrendBlog’, under the Umbrella of Paul Trend Media, you will know and realise that the sky will be the starting point.

The plan is to evolve round the world, carrying out the social responsibility function of the press. Since one tree can never make a forest, the expectation is high and I am dreaming to create employment opportunities for media men and women in our society,” he states.

Odunlami Adebayo Odunlami is the founder of Fast Track Delivery Limited. He is an entrepreneur with experience in

haulage and logistics. He started this business in July, 2015.

Odunlami was motivated by his mother’s industry as well as his desire not to leave his future to chance.

“Other than the fact that my late mum was a business woman, my love to consciously plan an amazing future for myself as an entrepreneur through self-discovery has always kept me going. I didn’t want to leave my future to chance, and I have never seen myself as the 8am -5pm guy. I saw a business opportunity in moving goods from one place to another, especially agro products, and I decided to start Fast Track Deliver y Limited, a company focused on logistics, haulage, courier service, import and export,” he tells Start-Up Digest.

He started delivery with a friend’s bicycle, and after few months, he made N300,000 which he re-invested in couriers and other administrative issues.

He was the 2nd runner up at the Global Student Entrepreneur Award (GSEA) in 2015.

He founded Fast Track Delivery Limited after discovering his passion for helping to deliver packages timeously.

“I am a 24-year-old student entrepreneur with a dream to live up to the promise I made to my late mum. Aside being an entrepreneur, I work with the university radio station as a sport analyst,” he said “My advice to other entrepreneurs is that you don’t have to be perfect before you know you are doing well. All you need is progress and not perfection.

Logistics has its meanders, but also its welcoming returns,” he admonishes.

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‘Government needs to localise MSMEs clinic to widen reach’ Funke Susan Medun is a director at Leapworld Limited, a firm helping micro, small and medium enterprises (MSMEs) access funding and write good bankable business plans.

Funke has over seventeen years’ experience in entrepreneurship. In this interview with JOSEPHINE OKOJIE, she looks at the Nigerian entrepreneurship and what government can do to address some of the key issues.

Despite a lot of funding available for entrepreneurship development in the country, why are businesses still not able to access most of these funds? will like to start by aligning with a statement credited to the vice president during the MSME clinic launch in Onitsha. The vice president said that MSMEs might be small, but together they account for up to 50 percent of Gross Domestic Product (GDP) and over 80 percent of the labour force. I am always delighted to have a discourse on MSMEs. From my experience, there are a couple of barriers to MSMEs having access to funding available for them. From the internal processes, a lot of small businesses do not have the system and structure in place to access needed finance to grow their businesses, and this is a huge barrier. The financial institutions want a guarantee that small businesses have the capacity to repay back loans and this can be assessed using the systems and structures provided by the MSMEs themselves. You can provide what you don’t have. MSMEs need to start keeping proper records and there is a need to also separate the expenses of the owners from the business so that the business can have a life of its own. These are things start-ups and MSMEs can do for themselves.

Apart from development banks like the Bank of Industry (BOI), Bank of Agriculture, Lagos State Employment Trust Fund (LSETF), some CBN initiatives and others intervention funds with friendly SMEs conditions such as lower interest rates and less stringent conditions, most of the conditions of money deposit banks are too stringent and with double-digit interest rate for MSMEs to access.

Most of the conditions are beyond small enterprises that are struggling to survive and often cannot provide the needed collateral/ lending conditions to access the loans.

Also, information is not available to a lot of MSMEs. Lagos state is doing great with the Lagos State Employment Trust Fund (LSETF), and I think other states should emulate them. You would be shocked to know that a lot of businesses that operate in Lagos do not know about LSETF. Some are aware but do not know the criteria needed to access it. Some believe the fund is only meant for businesses whose operators are indigenes of Lagos

digit interest rate is ideal for them.

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Funke Susan

State. Some also believe that it is a national cake so they do not have to meet the criteria to access the fund. There are lots of low-interest funds for MSMEs, even grants, but all these barriers have prevented small and medium enterprises from accessing available funds.

MSMEs should constantly seek strategic information to leverage for growth.

Why do you think most start-ups fail within five years of existence?

From my experience dealing with a lot of them, I noticed that most MSMEs have a faulty foundation and poor business management skills. They build their businesses without focusing on sustainability.

The structures and systems that would propel growth are lacking.

You cannot build a duplex on a foundation that is meant for a bungalow. The continued failed system and structure has continued to lead to high failure rates among start-ups. MSMEs needs to look at having administrative, finance, operations, corporate governance, human resource, sales and marketing structures and systems.

Also, the difficult business environment in the country has also led to their high failure rates. Providing their own power and paying multiple taxes have increased their production cost and made their survival rate difficult.

In addition, most start-ups fail to build capacity in the industry in

which they operate. This has also increased their failure rates. You need the right skills to scale up your business and if it is lacking, the growth of the business would be limited. Applying the method you used for your survival stage at your growth stage will not grow the business sustainably.

What is the ideal interest rate for start-ups?

I really do not encourage start-ups to go for high interest loans. Startups should source their funds from their family, friends and also seek grants or equity investments.

There are a lot of grants available for MSMEs such as from the FGN World bank funded growth and employment (GEM) project, and Tony Elumelu Foundation, amongst others. If they have to take a loan, I think a low single-

For the clinic to reach a large number of MSMEs, the government should partner with the private sector or business support service consultants to operate the clinic at every vicinity

How can Nigeria grow its entrepreneurship?

We need to introduce entrepreneurship to schools and overhaul our curriculum. Entrepreneurship should not be taught or seen as ‘everybody must start their own business’. If we all embrace the spirit of enterprise, whether as an employee (intrapreneurship) or employer we would all help businesses to grow and the economy at large. Intending entrepreneurs should seek knowledge and build capacity. Do not rush to start your own business; you can learn first by working for others, serve then learn to lead. I believe there is a lot to learn during apprenticeship.

It’s good that the government is making efforts at improving the ease of doing business in Nigeria, putting in place funding interventions and the Made-in-Nigeria initiative is great, but it can do more. We need not just have lots of MSMEs but we need them to cumulatively contribute a good percentage to our GDP as in other emerging economies in the world.

What do you think is the biggest challenge confronting MSMEs in Nigeria?

Market linkage and access is one of the biggest challenges confronting most Nigerian businesses. Most small businesses complain about sales. The small businesses have fantastic products but do not have access to the right market to sell or export their products. MSMEs can leverage several low- cost sales channels, starting with the social media platforms, e-commerce and the like.

Secondly, attracting and retaining talent for MSMEs is also a major problem confronting them. Because of the way MSMEs are structured, it is challenging to attract and retain good talents needed to grow the business. At the initial stage of the business, it might be challenging to afford highly skilled staff and retain talents that believe in you and can endure the survival phase looking at the big picture.

Access to finance is still a major issue limiting MSMEs growth in the country. Huge infrastructural gaps are also negatively impacting business. Poor power supply has continued to increase production cost for businesses. Also, government bureaucracy for MSMEs that need regulatory approvals and unfair competition with cheap

low quality imports are key issues.

Multiplicity of taxes and levies is another major issue confronting small enterprises in Nigeria. There is so much in tax that needs to be addressed. Maybe there should be a graduated tax system or holiday for small businesses. These challenges have made entrepreneurship a daunting task in Nigeria and the government must start addressing them.

How can government address some of the challenges you just highlighted?

We need a short, medium and long term approach to address the challenges of MSMEs in the country and also the strong will from the government. In the short term, the government has started with the MSME clinics, which are very good, but how many people will that get to? For the clinic to reach a large number of MSMEs, the government should partner with the private sector or business support service consultants to operate the clinic at every vicinity. The clinics should be localised; it should be done at the wards and local government levels so it can impact a lot of people.

Government at all levels must work to bridge the country’s huge infrastructural gaps to drive down production cost for businesses.

Similarly, government needs to give wavers to small businesses to access some markets. We have different bureaus of public procurements, so government should be able to provide a friendly checklist for small businesses to also bid for projects. We need to do more capacity building for MSMEs and address the issues with taxation.

What is your advice to young entrepreneurs?

For entrepreneurs at the idea stage, let them test their ideas and have a proof of concept. This makes you more confident and attractive to the relevant stakeholders. For those at the execution stage, define your goals and vision. Have a plan, put structures and system in place. Always look at sustainability. Build your own capacity and do not wait on the government. Get informed and seek collaborations. Look for the markets and be where businesses aggregate. Ensure you are giving value targeted at the right audience and right return. Money is like current, it flows in the direction where specific value is needed at that time.

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Tomilola Awanebi: Succeeding where peers fail JOSEPHINE OKOJIE

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omilola Awanebi, is the founder of Sheabuttersheen Nigeria Enterprises, a start-up that produces range of organic skincare products.

Tomilola was inspired to start her business out of her own personal experience with her baby who had issues with skin related allergies that failed to respond to doctors’ prescriptions.

According to Tomilola, that prompted her to carry out extensive research on alternatives to address these skin related issue, after discovering shea butter, she tried on her baby and it yielded much results.

“I discovered a major challenge through personal experience, my first child had issues with that relates to allergies that lasted for years despite doctors prescriptions and use of steroid,” she said.

“This challenge gave birth to years of research on alternative and organic cure to minor skin related issues, it also hype my interest in organic therapy as at then the use of organic product was not pronounced ,funny enough it was the answer to my child years of skin al-

lergy because my research gave me positive result,” the entrepreneur added.

To change this for others with skin related issues, the economics graduate saw a business opportunity and established Sheabuttersheen Nigeria Enterprises in 2012.

The economics-turnedentrepreneur told Start-UpDigest that she started her business with only N11,000.

An amount she spent on buying her raw materials for processing.

Tomilola started her business in her residential apartment and now the business has two major factories in Lokoja and Akure with over 20 employees with the product penetration reaching over 18 states with two major export countries of focus.

“My initial start-up capital was N11,000 of course I started with manual process, but now we are into mechanised way of production and have a machine with a two ton processing capacity of shea nuts.

“The business has grown from producing just shea butter for local consumption to the production of five other by products of shea butter and also from local suppliers to exportation and getting NAFDAC licence,”

Tomilola Awanebi

she further said.

She sourced her raw materials from local suppliers and also from villages where shea nuts are grown, as well as sourcing her packaging materials from Lagos.

Speaking on some of the challenge the business is experiencing, Tomilola said inability in the supply of shea nut is the major challenge confronting the business.

She stated that owing to the fact that shea trees are grown in the wild, it is difficult to have right on any plantation.

She also identified the high rate of deforestation as another major challenge that is not just facing her business but the entire shea industry in the country.

“Shea trees in most states are cut down as firewood and for charcoals.

“We also have external traders from neighbouring countries dictating our prices making it difficult for local producers to afford it and still be profitable,” Tomilola said.

She also noted that lack of vital infrastructures such as stable power supply and good road networks, storage facility among others have continued to impact on her

business negatively.

Tomilola urged the government to address the issues of infrastructure, stating it as the basis of industrialisation and growth of the nation, while calling on them to ensure policy consistency and effective implementation to stop the illegal falling of trees.

The Madonna University graduate said that youth can only find agriculture attractive when there is innovation in the sector. “Agriculture is viewed as a very stressful venture because it is labour intensive; with mechanisation youths would find agriculture attractive.”

When asked on advice to other entrepreneurs, she said “Entrepreneurs should have vision, goals and mission clearly written and must stay focused to that vision and ensure each day that passes you have achieve or work towards achieving a goal.

“Entrepreneurs should be willing to start and grow a business out of nothing or with little; it is your success in the little that will make the big a reality. Endurance in an economy like ours is a virtue for all entrepreneurs and lastly financial discipline is vital to the growth of an enterprise,” she added.

‘Kwara is coming up with single-digit loan scheme for artisans’ Mohammed Kazeem Olanipekun is the special adviser (SA) to the Kwara State governor on Artisans Related Matters.

In this interview with SIKIRAT SHEHU, he says the Kwara State government has supported artisans in the state and will soon unveil a single-digit loan scheme for them.

May we know more about your office and its activities? assumed office in January 2018 and my office activities entail liaising between the state government and the artisan congress by making sure that there is a good relationship between them.

I ensure that artisans promptly pay affordable taxes to Kwara Internal Revenue Service {KWIRS}. We have about 84 associations and we are waxing stronger.

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Artisans always complain of funding. What is the state government doing to empower them?

The state government has been helpful in terms of funding for the artisans.

Part of it is the availability of SMEs loan that the state government wants to give them. Some amount of money now has been ear-

marked for the SMEs with very low interest, as low as nine percent.

You cannot even get it in our commercial banks. At least when you want to take a loan from any commercial or microfinance bank, you will not get it at anything less than 30 something percent, of which everybody is aware of.

So, the money will be available soon for artisans to have access. According to what I met on ground, state government has already given about N100 million to artisans as SMEs loan in 2015, but this time around.

How will you describe relationship between the government and artisans?

When I embarked on visiting different associations, their major constraint was government patronage, but as I am speaking with you now, the government has

begun patronising the artisans in the state.

About two weeks ago, renovations of media outfits was contracted to the associations of carpentry and interior decor to make furniture and interior decoration for Kwara Radio and Kwara TV as the first stage. We will continue with second stage soon, which will cover other media outfits in the state.

Are there challenges peculiar to your office and prospects?

I would not say that I have challenges because the relationship has been very cordial. Although it is not easy to deal with artisans congress because they have a lot of associations under them and it is very difficult to get them in a group, the main thing is that, since I assumed office, God has been helping us as everything has been going on well

between the congress and office of S.A. The Kwara State government embarked on giving out empowerments forms to artisan congress. As at today, we have got over 35,000 requests from different associations.

What is your assessment of patronage of made-inNigeria products?

We are not there yet. The notion now is changing, but we still have to improve. With

Mohammed Kazeem

made-in-Nigeria products, our artisans are now developing.

Recently, we had a trade fair here in Ilorin Kwara State, organised by KWACIMA, where the artisan congress mobilised about nine associations from artisans; the likes of association of Bag Makers, Aso Oke, Shoe Makers, Beads Makers and others showcased their talents. It was really impressive.

As time goes on, there is future for Nigerian- made products. I just want to advise government that they should do more advocacies on made-in-Nigeria products so that a lot of people will patronise locally made goods.

What are your future plans for artisans in the state?

We have a lot of activities lined up. We intend to give them Identity cards for

proper identification and other purposes. For the production of the ID card, the state government is planning to get the total required to assist congress.

Another thing is that the state government is also planning to embark on tools empowerment, which is coming later in the year.

We promise to continue with the kind gesture for the betterment of Kwara State.

What message do you have for the youths?

My advice to the youths is that they should be more vibrant, explore their talents and work hard. From what I have seen among the artisans, I can say our youths are not lazy. I have seen different innovations from our young people, thus, forecasting good future in our youths. I am seeing a promising future for our youths.

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The lie that perfectionists tell themslves MATT PLUMMER AND JO WILSON

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any of us hold principles that keep us from pursuing a more productive lifestyle.

One of the most common is the belief that increasing productivity, or getting the most out of your time, will decrease the quality of your work, or your ability to do tasks perfectly. Yet, more time doesn’t necessarily translate into better quality work. In fact, spending more time at work and on specific tasks can actually hurt our performance, reducing the quality of our work.

When this belief — that more time leads to better quality — is the unwritten rule, there is

always more to do. As a result, work will fill the time it is permitted to fill,

killing the hope that increased productivity will yield a better work-life

balance. We must recognize that productive behaviors are what actually

Monday 21 May 2018

improve, not hurt, quality. When we look outside of business, we instinctively know that speed, a component of productivity, is associated with better quality, not less.

The misconception that productivity hurts quality also leads us to believe that when it comes to work, quality is the supreme goal. In our work with companies, we have seen what happens in a quality-first culture: People spend a lot of time perfecting work that would have had the same impact without the extra hours of tweaking.

One participant in our program from a leading consulting firm shared, “If we could just relax our standards for internal emails, we would save so much time!”

The reason additional investments in quality don’t always lead to

greater impact is the opportunity cost of time. If we had an infinite supply of time, this may not be the case, but we know that choosing to spend time on one task means that we are choosing not to spend time on a million other tasks. And if we believe the Pareto Principle (80% of the value comes from 20% of the work), then we can see how perfecting our work generally returns small value for a high cost. It doesn’t mean we shouldn’t ever perfect our work. It just means we should only do it when it will contribute significantly to the impact of the work.

(Matt Plummer is the founder of Zarvana. Jo Wilson is a sustainable productivity coach and creator of habit development paths at Zarvana.)

Why entrepreneurship programs for engineers fail TOBIN TURNER

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ntrepreneurs are known for their creativity and risk tolerance; engineers, mathematicians and health care workers typically aren’t.

Consider, for example, the ideal attributes of a civil engineer building an interstate bridge near your home. Do you picture a risk-tolerant engineer who is highly comfortable with uncertainty, or one who tends to prefer mathematical certainly?

Entrepreneurship, as well as the creativity and risk-taking associated with it, is an increasingly core component of commercial work, and one for which students in highly technical fields are ill-prepared. Blended entrepreneurial programs are

attempting to answer this need by merging universitylevel entrepreneurial education with discipline-focused degrees in STEAM (science, technology, engineering and applied mathematics) fields.

It hasn’t been easy. Administrators of these programs say they are underwhelmed by graduates’ intentions to exploit commercial opportunities as entrepreneurs or to act as intrapreneurs after entering the workforce.

Developing entrepreneurial mindsets in STEAM students is important. Increasingly, opportunities for innovating and creating new products and startups are found in the highly specialized fields of applied math, health care, bioinformatics, chemistry and technology. Yet our findings lead us to ask: Can

entrepreneurship be taught in blended entrepreneurial programs?

We’ve concluded that it can, and should be, but that attracting students who have some entrepreneurial at-

tributes prewired may be crucial. Entrepreneurship education historically has focused on developing small business management and planning competencies, but has put relatively less empha-

sis on cultivating students’ entrepreneurial mindsets.

We found that students’ entrepreneurial passion — defined as passion for innovating, inventing, developing

(C) (2017) Harvard Business Review. Distributed by New York Times Syndicate

and founding new ventures — strongly predicts the likelihood of their planning entrepreneurial activities.

We suggest that administrators do three things. First, they should recruit program candidates who already have entrepreneurial attributes.

Second, they should bifurcate curricula that teach the skills needed to start or grow a venture from curricula that teach students to identify entrepreneurial opportunities.

Third, they should deepen their focus rather than continually broadening their programs with more content.

(Tobin Turner in an associate professor of economics and business administration at Presbyterian College.)

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NEWS JAMB sets May 26 for rescheduled examinations for over 12,000 candidates

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oint Admissions and Matriculation Board ( JAMB) on Sunday said it had set May 26 for rescheduled Unified Tertiary Matriculation Examinations (U TME) for more than 12,000 candidates across the country.

The Board’s head of media, Fabian Benjamin, disclosed this in an interview with the News Agency of Nigeria in Abuja.

According to Benjamin, more than 12, 000 candidates are expected to sit for the mop up examinations in few of its centres across the country.

This category of candidates, he explained, are those whose biometrics were not captured during the initial period of the UTME in March.

He said: “It would also include those, who are yet to see their results since the end of the examinations in March till date and have not been involved in any form of malpractice.

“It will also include those, who were unable

to print out their e-slip before the earlier examinations and those whose centres were cancelled for suspected malpractices.’’

According to Benjamin, “there are centres that were cancelled because of suspicious activities but the board was unab l e to id ent if y the actual culprits.

However, he said that those, who were involved and caught in illicit acts and centres where a case of malpractice has been established against them would not partake in the res che d ul e d examinations.

He advised candidates, who might have fallen into any of the categories qualified for the examination to print their e-slips from Monday, May 21.

The board had earlier promised to reschedule the examinations for some candidates whose cases were exceptional, adding that candidates, who fall under such categories, would be contacted before then.

Ortom urges critical evaluation of AfCFTA before FG’s commitment to Pact HARRISON EDEH, Abuja

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overnor Samuel Ortom of Benue State has urged the Federal Government to embark on critical evaluation of the African Continental Free Trade Area (AfCFTA) before Nigeria’s final endorsement to the pact.

Ortom, who made the disclosure during stakeholders sensitisation and consultation forum for the North Central region on the AfCFTA, said the critical assessment of the pact would ensure Nigeria protect its economy with appropriate safeguards devoid of any exploitation by other African countries. ”A country which exports commodities in raw form exports her wealth and job opportunities to countries that process these raw materials. This forum should critically examine the AfCFTA initiative with a view to ensuring that the country’s interest is well protected,” Ortom said.

He also underlined the importance of security for stability, attraction and retention of investments in Benue State, and the North-Central geo-political zone, as he regretted the withdrawal of investors, recently, as a result of violence and insecurity that characterised the region in recent past.

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Indonesia’s palm oil policy points way for Nigeria Stories by ODINAKA ANUDU

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ndonesia is world’s largest palm oil producer and exporter by a mile today. The Southeast Asian country produces 36 million metric tonnes (MT) of palm oil annually, followed by Malaysia, with 21 million MT. The third and fourth are Thailand, which produces 2.2 million MT, and Colombia, with 1.3 million MT. The oil palms planted in Indonesia and even Malaysia were said to have been taken from Nigeria, precisely Calaro Estate, in the present day Mbarakom in Akamkpa Local Government Area of Cross River State.

In their work entitled, ‘Oil Palm Plantations in Indonesia: The Implications for Migration, Settlement/Resettlement and Local Economic Development’, Suseno Budidarsono, Ari Susanti & Annelies Zoomers admitted that the origin of oil palm in Indonesia was the tropical rainforest of West Africa, from mostly independent small farmers with landholdings of up to 7.5 hectares.

Indonesia planned from the late 1970s to make palm oil a major source of foreign exchange earnings, and neither political instability during the periods of Sukarno or Muhammad Suharto nor the era of reforms could change that.

Though early policies were state-led like the case of Nigeria, it was consistent and purposeful.

The Indonesian government first established what was known as Nucleus Estate Scheme (NES), through which state-owned plantation firms supported farmers to grow oil palm. The plantation companies provided seedlings, technical assistance and financing to small holders, according to Budidarsono, Susanti & Zoomers, while the output were purchased by the mills.

The policy was linked and integrated with other policy objectives such as population re‐ distribution through resettlement schemes or transmigration (moving people from densely populated regions to scarcely populated areas), socio-economic progress, regional development, increased agricultural production, employment generation and political consolidation, among others.

The second stage of oil palm development came between 1995 and 1998. John F. McCarthy, a researcher, explained that this stage was private-sector led and was aimed at facilitating foreign direct investment and accelerating estate crop development.

The state-led model was criti-

L-R: Mr Muda Yusuf, director general, Lagos Chamber Of Commerce and Industry (LCCI); Babatunde Ruwase, president; Toki Mabogunje, deputy president, and Micheal Olawale-Cole, vice president, at the LCCI Quarterly Press Conference on the State of the Economy in Lagos last Wednesday.

cised by the World Bank as unsustainable. The bank had urged the Indonesian government to leave oil palm development to market forces and stop subsidies.

The government eventually heeded the advice, more so because the subsidies were taking a big toll on government revenue.

The Indonesian government introduced what was known as Koperasi Kredit Primer untuk Anggota (KKPA), which was characterised by a more direct private–community partnership model.

This market-led approach opened the door for foreign investors who came in and pumped money into plantations development. Apart from the fact that taxes were low, some of the investors were given tax holidays. There was an emergence of independent smallholder farmers who moved into the oil palm area. In fact, there was massive movement of nationals to designated oil palm areas owing to the influx of foreign investments.

From 1998, Indonesia introduced what McCarthy called ‘laissez-faire’. This was characterised by decentralisation, public–private partnerships between market actors and the government, as well as social–private partnerships between market actors and communities.

Existing estates had to enter into partnerships with large, capital-intensive companies willing to invest in labour-intensive oil palm projects.

During this period, farmers gained access to oil palm technology and improved their incomes.

The farmers were eventually able to access investment capital, obtaining land certificates, which could be used as collateral for borrowing money from local banks to expand production.

“At a time of rising oil palm prices, many of these new landowners used these accumulated assets to rapidly expand their holdings,” Budidarsono, Susanti & Zoomers said, adding that during the later years of the oil palm boom ( prior to 2008), these actors were joined by successful KKPA farmers, who were using incomes from productive oil palm holdings to invest in upgrading unproductive land into oil palm plantations.

The outcome of the investments was spontaneous frontier development on the margins of already palm oil plantations.

The results of consistency and lack of undue government interference was that, as of 2011, oil palm plantations in Indonesia covered 7.8 million hectares (ha), out of which 6.1 million ha were productive plantations under harvest.

In 2016, the country earned $18.6 billion from exporting Crude Palm Oil (CPO) alone. That year, the country produced 31.5 million MT and exported 26.6 million MT, demonstrating an export-led industrialisation policy.

Indonesia has two islands— Borneo and Sumatra—accounting for 96 percent of its palm oil production. Unlike Indonesia, Nigeria’s previous oil palm estates are still far from their previous states, except the ones in Cross River, revivified by PZ Wilmar, and the ones in Edo, resuscitated by Presco and Okomu.

Nigeria is fifth biggest producer of CPO in the world, with capacity estimated at 900,000MT to 1.3 million MT. The country cannot even satisfy local demand now, estimated at 2.1 million MT. By 1960, Nigeria supplied 45 percent of the global market, but this position has long been taken

by Indonesia and Malaysia. The policies by successive govern-

ments in Nigeria since oil boom of early 1970s focused on crude oil, leading to the neglect of oil palm plantations and consequent deaths of oil palm estates in Imo, Cross River, Rivers, Ondo, Abia, Enugu and Ebonyi, among other states.

Currently, the sector lacks funding as the government does not see why it should fund a crop with a long gestation period, industry players complain. Banks are also not ready to lend to the sector, unlike in Indonesia. Moreover, there is no palm oil plan in Nigeria, like there is in Indonesia, casting doubt on the seriousness of this government to develop this crop.

Moreover, smuggling of palm oil is very common today, thereby squeezing the margins of local investors.

“Most of the palm seedlings available in the country are poor.

We don’t get enough quality hybrid seedlings for planting, which will give us higher yields. We have to source for quality seedlings by importing them,” said Brian Hammond, managing director, IMC Limited in an earlier interview with BusinessDay. The oil palm belt covers 24 states of Nigeria, including all nine states of the Niger Delta and the South-east part of the country.

BusinessDay investigation showed that the once abandoned Adapalm, located at Ohaji, Egbema, in Imo State, is now in full gear.

It is now a joint venture(JV) between Imo State government and VTU, a Vietnam investor, which has so far pumped N300 million into the mills. The JV also involves the Ohaji community, which has a stake in the business. The mill covers 4,300 hectares of oil palm plantations in Ohaji, and it currently produces 30 tonnes of palm

oil per hour, BusinessDay found.

The Calaro estate is now a hub of oil palm with PZ Wilmar planting 5,500 hectares of land.

PZ Wilmar, a JV between PZ Cussons and Wilmar of Malaysia, has almost 26,500 hectares (ha) of oil palm plantation in Cross River State, with a plan to increase to 50,000 ha in few years.

Okitipupa Oil Palm Plc in Ondo State is now ready for business after five years of closure, but nothing much is happening in the mills as of February this year when BusinessDay visited.

Already, a multinational oil company Victory Crystal Investment is interested and wants to pump $13m to resuscitate the mills, BusinessDay was told.

More so, BusinessDay gathered that Araromi-Ayesan Oil Palm, which was a shadow of itself early last year, is now on. It has 10, 468 hectares of plantations and already has a board chaired by Femi Okunniyi.

“Nigeria will need to plant at least 300,000 ha in the near future, which is an investment of over 700 billion naira and it will take us several years,” Santosh Pillai, managing director of PZ Wilmar told BusinessDay. “It is a crop which has a long gestation period, and it takes 3-4 years to yield fruits and 7-8 years to achieve maturity. The industry requires massive investments,” Pillai said.

“Nigeria has all that is required to be self-sufficient in palm oil production. Indeed, the country should be amongst the top global producers of the commodity. We have good agro-climatic conditions, manpower readily available, land and the market. Most importantly, the oil palm originated here. Nigeria has a competitive advantage in producing oil palm,” he said.

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REAL SECTOR WATCH Ogun confirms localisation of 311 firms as $250m brewery plant nears completion RAZAQ AYINLA, Abeokuta

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imbo Ashiru, Ogun state commissioner for commerce and industry, says a total of 311 manufacturing plants have either set up or expanded factories in the last seven years in the state, stating that Ogun has attracted huge foreign direct investments running into several billions of dollars.

Ashiru said that apart from expected new investments in petro-chemical, oil and gas, manufacturing, agriculture, food and beverage, mining, pharmaceuticals, technology, among others amounting to $5.4 billion as being tracked by Nigeria Investment Promotion Commission, a number of manufacturing industries would inaugurate factories in few months.

Speaking at 2018 Retreat of Ministry of Commerce and Industry in Abeokuta on Friday, Ashiru noted that the Ibikunle Amosun-led administration had been working day and night to sustain huge

L-R: Otunba Bimbo Ashiru, commissioner for commerce and industry; Jonathan Onajobi, permanent secretary. Ogun State Ministry of Commerce and Industry, and Abayomi Shobande, head of service, during the Ministry’s annual retreat in Abeokuta on Thursday

influx of industries into the state through provision of needed infrastructure, security and incentives needed for smooth running of manufacturing activities.

The commissioner noted that members of staff in the ministry and the entire State Civil Service had been motivated against bureaucratic bottlenecks impeding the smooth influx of investments as well as investors into the state. He disclosed that the first phase of multi billion dollars Belgian-Brazilian Breweries - AB InBev- would soon open its plant along Abeokuta-Sagamu expressway.

BusinessDay reports that the multi billion dollars breweries located within a newly developed industrial estate Sagamu Interchange- which hosts Nestle, Olam, Apples and Pears, Eterna Oil, among others , will be the biggest breweries in the country when completed, as the plant is a merger of International Breweries, Pabod Breweries and Interfact Breweries.

Stellar Sawyer, spokesperson of the brewery plant,

in a phone interview with BusinessDay, disclosed that the plant was already testrunning ahead of proposed inauguration by President Muhammadu Buhari sometime in July or August this year, saying the brand was expected to hit Nigeria and West African markets by the storm.

Sawyer said the brewery was prepared to offer entirely new beverage experience.

Earlier, Jonathan Onajobi, permanent secretary, Ministry of Commerce and Industry, had reeled out statistics of manufacturing companies newly created or expanded in the last seven years in manufacturing, agriculture, oil and gas, petrochemical, pharmaceuticals, food and beverage, among other industries.

He said that 30 of such firms came to the State in 2011; 38 in 2012; 42 firms in 2013 and 37 in 2014 and there was a slight upsurge in 2015 as 51 companies were inaugurated; 42 firms in 2016 and 61 were established in 2107, adding that Ogun state had so far recorded 10 new firms as of March 2018.

FrieslandCampina WAMCO makes new investments as revenue rises

Leather industry has capacity to become second biggest FX earner—players

…posts N140bn turnover

IFEOMA OKEKE

ODINAKA ANUDU

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rieslandCampina WAMCO Nigeria Plc, makers of Peak and Three Crowns milk brands, has procured two new sterilizers, a conveyor, two high-speed sachet filling machines with improved technology and a dust extractor system to optimise safety in its powder plant.

At the dairy firm’s 45th Annual General Meeting held in Lagos, the company announced a 13.2 percent increase in turnover in the year ending 2017, from N123.75billion in 2016 to N140.08billion.

Profit Before Tax (PBT), however, declined by 20.6 percent, from N19.96billion to N15.86billion as a result of the fire incident that occurred in the evaporated milk factory, a statement signed by Ore Famurewa, corporate affairs director,

says.

The company said although 2017 was in many ways a challenging business year, the manufacturer showed resilience and determination to meet its targets and thrive amidst a difficult operating environment.

“FrieslandCampina WAMCO made significant investments in its Dairy Development Programme to increase opportunities in local dairy farming. The company invested in an additional milk collection centre, and started the Farmer2Farmer programme to help improve milk quality, volume and dairy farming skills through one-on-one coaching by Dutch co-operative member-farmers from Royal FrieslandCampina, The Netherlands,” the statement says.

It was gathered that shareholders approved a final dividend of N7.02 per ordinary share of N0.50 each

(having paid an interim dividend of N2.20 per N0.50 in October 2017), bringing the total dividend paid out to N9.22 per N0.50 share in the year under review.

The statement quoted B e n L a ngat, ma nag i ng director of the company, projecting that foreign exchange constraints, high inflation rate and low consumer purchasing power were likely to be some of the challenges this year.

“We expect consumers to maintain their current spending behaviour of topup neighbourhood shopping, particularly for milk.

Availability and affordability will remain major determining factors in purchase decision making.

“FrieslandCampina WAMCO will continue to work within best global practices, leverage opportunities to invest and continue to satisfy our consumers as we maintain our leadership position in the dairy sector” Langat said.

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he leather industry can create over one million jobs and can become Nigeria’s second largest foreign exchange earner after oil& gas, according to industry players.

They said this at the second edition of the Lagos Leather Fair held in early May in Lagos. Themed ‘The New Possible’, the fair explored the various possibilities of the industry in terms of growth and innovation and invited relevant stakeholders to have this conversation.

Founded by Femi Olayebi of FemiHandbags, the fair drew attention to the potential of the leather industry to create over a million direct and indirect jobs as well as become the second earner of foreign exchange after oil and gas.

This initiative is supported by the Lagos State government, Bank of Industry and Nigerian Export Promotion

Council.

The fair promoted local leather goods and provided trainings for artisans by featuring over 50 leather exhibitors as well as scheduling master classes and workshops. These trainings were hosted by local and international speakers including Bill Amberg of Bill Amberg Studios, Patrizia Prencipe, (leather consultant), Liz Oluwadare(Export Manager, Mall For Africa), and Ayotomi Rotimi(Founder Xclamations), among others. Some of the topics discussed were ‘The Magic of Leather: Exploring the Endless Possibilities’, ‘The Fine Art of Shoe Making’, ‘From Factory To Consumer and Everything in Between’, ‘Leather crafting and How to Build Brand Influence in a Competitive World’.

The panelists included Adewale Bakare (Representative for the minister of state for industry, trade and investment), Olayinka Oladunjoye (commissioner for commerce, industry and cooperatives), and Olu

Domingo(owner of a tannery), among others.

After fully evaluating the contribution of the leather industry to the economy, it was concluded that the government should make favourable policies to further enable the growth of the industry.

The exhibitions, which ran daily, allowed guests shop various leather goods and they were entertained by the pop-up catwalk shows during the day.

Dolapo Osinbajo, the wife of the vice president of Nigeria was also present to see the products on display and support the made-inNigeria initiative.

A surprise screening titled ‘From Ponmo to Paris: A journey from the Slaughterhouse to the Catwalks’ showcased the potential the country has as a nation where raw materials are properly allocated. A runway show displaying various leather goods including bags, shoes, outfits and accessories was also featured.

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NEWS

Demand, insufficient operators drive investors into airline business IFEOMA OKEKE

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he need to satisfy untapped routes across Nigeria and the reduced number of fleet size as a result of scarce scheduled airline operations are seen driving the number prospective airline operators seeking licence to commence commercial operations in Nigeria.

BusinessDay’s checks show that since 2017 more prospective airlines have continued to flock the office of the Nigeria Civil Aviation Authority (NCAA), all in a bid to secure the Air Operator Certificate (AOC), a licence to enable them operate.

A total of 32 airlines made up of scheduled and non-scheduled operators are currently listed as holding AOC, and are on the

register of the NCAA as of January 10, 2017, till date.

There are however 26 prospective investors in its books that have applied for AOC during this same period, and are in the process of securing one.

However, there are currently only seven airlines that operate scheduled passenger operations - Aero Contractors, Arik Air, Overland Airways, Medview, Dana Airlines, Air Peace, and AZMAN. Green Africa Airways, a prospective airline, has secured its air transport licence and is working toward its air operator’s certificate.

The airline initially plans to operate flights within Nigeria using leased midsized jets.

Experts tell BusinessDay that the market is not yet saturated as claimed by the current airlines operators,

Shell sees no threat to GMoU system … says it has spent N14.85bn on host communities IGNATIUS CHUKWU

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hell Petroleum Development Company (SPDC), which notes it has so far spent N14.85 billion to develop its 19 host community clusters in Rivers State, says it does not see any immediate threat to the Global Memorandum of Understanding (GMoU), the new way of delivering community development.

In a presentation event of SPDC’s annual report in Port Harcourt at the weekend, Igo Weli, general manager, external relations, said the amount gave communities a highly valued opportunity to decide and implement projects and programmes that have a lasting impact on people’s lives.

HesaidtheGMoUhadproved to be a viable system of community development and community engagement tool, saying there was no plan to jettison it but tostrengthenit.Herejectedclaims in some quarters that the system was not meeting the objectives it was meant to satiate.

Weli, who was represented by Gloria Udo, the social investment manager, said funding, since the GMoU concept took off in 2006, had enabled the 19 clusters in Rivers State to embark on projects covering health, education, water and power supply improvement, sanitation and infrastructure development. Rivers clusters got almost N15 billion out of the N41 billion so far rolled out by SPDC for 37 clusters in the entire oil region.

He said: “The GMoU initiative has opened a new and exciting chapter in the relationship betweenSPDCJVandcommunities and empowered the people at the grassroots to take charge of their own development.”

He said the success of the GMoU initiative proves what could be achieved when government, international oil companies, communities and NGOs work together for the common good.

UnderthetermsoftheGMoU, SPDC JV provides secure five-

year funding for communities to implementdevelopmentprojects of their choice, which he said were managed by Cluster Development Boards (CDBs) under the guidance of mentoring NGO. He said GMoU clusters in Rivers State had recorded landmark achievements, including setting up a Community Health InsuranceScheme(CHIS)atObio Cottage Hospital in Port Harcourt, where the average number of patientsincreasedfromabout600 to about 7,500 per month in 2017, making it one of the most utilised health facilities in the area. Other clustershaveawardedforeignand Nigerian tertiary scholarships set up transport schemes and built roads.

In another social investment initiative in Rivers State, SPDC has trained more than 800 young men and women under the Shell LiveWIRE programme which was introduced in 2003 to help young entrepreneurs to convert their bright ideas into sustainable businesses, creating wider employment and income opportunitiesforcommunities.SPDCJV also implements a robust health intervention scheme, supporting 10 hospitals in the state.

In 2017, SPDC established Nigeria’s first centre of excellence in Marine Engineering and Offshore Technology at Rivers State UniversityinPortHarcourt,which has commenced programmes leading to the award of Masters degrees in Marine Engineering (Power Plants), Naval Architecture and Offshore and Subsea Engineering.

This and other educational interventions build on a pioneering scholarship programme that was introduced by SPDC since the 1950s.

Weli added: “We’re proud of our extensive social investment footprints in Rivers State, which in some cases even stretch beyond the SPDC joint venture. For example, to mark Nigeria’s centenaryanniversary,Shellexclusively donated a modern public library to the Port Harcourt Literary Society in November 2016 at a cost of N1.58 billion.

as there are more routes to be explored and currently few airline operators.

“We do not have airline market that is saturated.

When people start the airline business, they only focus on the triangle routes.

With right pricing, equipment, timing and route analysis, they are able to develop other routes,” Tayo Ojuri, an industry expert and CEO, Aglo Limited, an aviation support service, told BusinessDay. Ojuri explained that 10 years ago, operators only concentrated on Lagos, Abuja and Port Harcourt, but now airlines were plying more routes, adding that there was also a need to develop secondary routes like Benin City.

“Look at the demography of those that are outside the country and those that have gone through Benin, you will understand that it is a route yet to be explored.

Before 2015, Benin was the fourth largest passenger traffic airport. We have a lot of people from Edo and

Delta states outside Nigeria,” he said.

Ojuri however reiterated the need to address infrastructure issues, high charges and multiple taxations.

Currently, all domestic airlines put together operate only 40 aircraft.

Aero Contractors, which formally had 10 aircraft on its fleet, has reduced to three aircraft. Medview, which had four aircraft, has been reduced to two.

Arik Air, which had over 28 aircraft on its fleet, currently has about 10. Dana Air, which had three aircraft, now operates just two aircraft. Azman has three aircraft and Overland five. This makes a total of 40 aircraft.

The NCAA suspended First Nation from carrying out scheduled flight operations over insufficient fleet size last week.

According to reports by NCAA, over 25 airlines have gone under in the space of 15 years.

Gbenga Olowo, president of Aviation Round

Table (ART), observed recently there had been continuous depletion of the fleet of Nigerian airlines.

Olowo recalled that in 2010, Nigerian airlines had 54 commercial operating aircraft, but by 2013 the fleet had reduced to 39, noting that with declining fleet size, route expansion would be limited and robust schedule very difficult and down time for maintenance would impact negatively on schedule.

He attributed the failure of airlines to improve and add more aircraft to their fleet to the harsh operating environment, high charges paid by the airlines to aviation agencies and poor managerial skills by the airlines management.

In addition to these, Nigeria has continued to record between 12 million and 15 million passenger traffic since 2010 till date, while the number of operational airline and aircraft has continued to depreciate.

John Ojikutu, member of ART, and chief executive of Centurion Securities,

also said the airline industry was not saturated but had mostly inexperienced airlines operators, and that was why they generally have very short lifespan.

“Jostling for airline business is one thing, but understanding the business, especially what it takes to sustain it, is critical and that is what most Nigerian investors and operators do not have. The commercial aviation as a trade of buying and selling where they invest and divest at will to other businesses.

What is even dangerous is that they recycle their business plans, irrespective of the differences in their fleet.

“It is only those who know how it works that know that their profit is in the net earnings and not gross earnings. A good commercial aviation business investor should know that with a population of 180 million, Nigeria is a huge market. Today, less than 5% of our population have access to air travelling or are regular travellers,” Ojikutu said.

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NEWS

Design takes pole position in Nigeria … As Design of The Year Festival debuts, partners BusinessDay DANIEL OBI

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n initiative, Design Of The Year Festival has been launched to stimulate innovation and drive the rapid progression of value for businesses in Nigeria.

The festival, which has BUSINESSDAY as Media Partner, comprises a conference, workshop and exhibition that culminates in an Awards presentation that celebrates products, services, systems and individuals that are thinking new ways of generating new business value and leveraging design to improve quality of life for people.

Solomon Ikhioda, Director at Design Of The Year says, “our value proposition to participating companies and individuals is how they can attain leadership through a culture of non-stop

innovation, letting them know how Design is the secret source of the much talked about innovation, which many businesses seek but find to be frustratingly elusive. They will experience how Design can help discover new areas of untapped value, where customers are willing to pay a premium for products and services they love.

This is a unique initiative that has been designed to aggregate a singular platform for catalyzing and rewarding design in its widest ramifications- beyond its popular perception as being all about artifacts and colors.”

The conference keynote and workshop will be delivered by Marty Neumeier, Silicon Valley Transformation expert who will be bringing the truth, with case studies, that design and leadership are synonymous. “You can’t be a leader by following

the leader so, if you wanna innovate, you gotta design,” is his favorite quote.

The prolific author states that his over 30 years of consulting for Silicon Valley companies such as Apple, Google, HP among others have taught him that there can be no business transformation without turning imagination into originality, and originality into action that creates differentiation in product offerings that people need.”

Marty’s principles have also been used in the creation of other world-class brands for companies like Adobe, GE, UPS and Microsoft.

Now Director of CEO Branding at Liquid, he is a thought leader and travels extensively as a workshop leader and speaker on the topics of design, brand, and innovation. His passion is guiding CEOs through the

sometimes complex process of strategic innovation and how to build charismatic brands and organizational culture.

His book The Brand Gap has sold is a global bestseller; an online version has been downloaded more than 22 million times. His second book, ZAG: The #1 Strategy of High-performance Brands, was named one of the “top hundred business books of all time.” He has gone on to write another business bestseller, The Designful Company, and three more books on business creativity and innovation. His forthcoming book, Scramble, is a “business thriller” that teaches leaders and their teams the secrets of agile strategy.

A constellation of notable Nigerians in various fields of Design practice will also speak and facilitate aspects of the festival.

US Secretary of State calls Buhari, assures of better US support TONY AILEMEN, Abuja

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nited States Secretary of State, Michael Pompeo, has assured President Muhammadu Buhari of better relationships between United States and Nigeria, as long as he remains in office as

Secretary of State.

Pompeo in a telephone conversation with President Muhammadu Buhari weekend expressed the desire of the US to continue to pursue, side by side with Nigeria, matters of common interest on the African continent, including

the fight against terrorism and corruption, trade and development.

A statement by the senior special assistant to the President, Garba Shehu, said President Muhammadu Buhari expressed satisfaction with the current level of relationship

R-L: Ehimika Ivbuobe, business manager, FirstBank; Bello Hadizat Esohe, winner of the FirstBank Visa Gold Card World Cup Promo; Bello Mohammed, winner’s son, and Erhunwunse Osarumwense, relationship manager, FirstBank, during the presentation of the winner of the 2018 FirstBank Visa Gold Card World Cup Promo in Benin City, recently.

Moghalu promises economic restructuring of Nigeria

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residential aspirant, Kingsley Moghalu, has promised to deliver ‘economic’ restructuring of Nigeria along the six geopolitical zones of the country, if elected in 2019.

Speaking at a town hall meeting last week in Awka, capital of Anambra State, Moghalu said restructuring the country along the geopolitical zones would deliver economy of scale in each zone and prosperity throughout the country.

Moghalu, who was appointed by President Umaru Yar’Adua in 2009 as a deputy governor of the Central Bank of Nigeria (CBN), said restructuring on the basis of states, instead of regions, was not economically viable.

During his address at the 20th annual tax conference of

the Chartered Institute of Taxation of Nigeria (CITN) earlier this month, Vice President Yemi Osinbajo, said, “Without federal allocation, most states cannot survive.”

However, Moghalu said at the meeting that Osinbajo’s diagnosis was in line with the tradition of the past governments and the current administration of President Muhammadu Buhari, which identified some of the chronic problems facing the country without mustering sustainable solutions for them.

He promised he would demonstrate political will and the competence to solve problems that have bedevilled the country for decades, including the fiscal arrangement that served as disincentive to economic

production.

Nigeria has a 36-state federal structure, with the Federal Capital Territory, Abuja serving as the seat of the federal government.

Major government’s revenues – including oil export proceeds, which account for more than 90 percent of its foreign exchange earnings or 70 percent of its domestic revenues – are shared monthly in Abuja by the three tiers of government: federal, state and local.

This system has continued to fuel agitation for the regions or states of the federation to “control” revenue generated in their domain and pay taxes to maintain the federal government in Abuja, in accordance with the principle of “fiscal federalism.”

between Nigeria and the United States. The President also used the opportunity to congratulate the new Secretary of State on his appointment.

President Buhari recalled his past meeting with Pompeo, then as the director of the Central Intelligence Agency (CIA), and thanked him for the enormous support the US had extended to the Nigerian security and intelligence services.

The President requested the Secretary of State to extend his appreciation to President Donald Trump for the warm reception he was given in the course of his recent visit to the White House.

Pompeo, it would be recalled, took over as Secretary of State of when the former Secretary of State, Rex Tillerson was dropped shortly after his trip to Africa, during which he paid a scheduled visit to Nigeria.

Global Forest forum: Obaseki talks sustainable forestry mgt, shares Edo’s success story

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do State governor, Godwin Obaseki, joined participants drawn from across the globe at Africa’s maiden top-level global forest conference held in Accra, Ghana, to call on African governments to reverse the worrying trend of deforestation in the continent.

The governor said this at the Tropical Forests Alliance (TFA) 2020 General Assembly in Ghana, where it was revealed that between 2010 and 2015, Africa recorded the highest net annual loss of forests.

This is against the backdrop of the constitution of the 16-member forestry advisory committee to streamline the management of its forestry assets and structure the state’s forestry commission.

The governor said the state was developing robust forestry management structures to ensure that the state’s biodiversity was conserved, even as palm oil plantations expand their operations.

According to Obaseki, “We have provided the enabling environment for the expansion of oil palm plantations in the state. This was

done in line with extant international regulations on plantation agriculture.

This is for the benefit of the people of Edo State.”

Director, Tropical Forest Alliance for 2020, Marco Albani, called on governments to invest in agro-forestry, which involved the incorporation of tree cultivation in the agricultural process.

Pro-forest is in collaboration with the TFA and a number of national and sub-national governments to rally support for the “reduction of rampant destruction of forests and find ways to generate better revenue from it.”

Moses Ama of the Reducing Emissions from Deforestation and Forest Degradation Plus (REDD+), Nigeria, stressed “that even though a variety of landscape and jurisdictional initiatives were being developed towards protecting forests, they overlap considerably in their aims and objectives.”

He noted that the REDD+ was “developed within the UNFCCC negotiations to mitigate climate change and provide performance-based payments for the protection of forests that would otherwise be cleared.”

Abuja Chamber pledges support for Korean HARRISON EDEH, Abuja

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resident of Abuja Chamber of Commerce and Industry (ACCI), Adetokunbo Kayode, has assured that the Chamber will help in facilitating all the economic activities of the Embassy of the Republic of Korea in Nigeria.

He made the commitment in Abuja when he received the envoy at the Chamber’s Secretariat, who was on his maiden visit to the Chamber.

The Korean team was received by the president, second deputy president, Emeka Obegolu, and other staff of the Chamber.

A statement issued by Lubem Gena, the media and strategy officer of the Chamber over the weekend, said the Korean entourage on the visit were led

by His Excellency Ambassador Lee In-Tae, Ambassador of the Republic of Korea, and Ju-leol Lee, Economic Counsellor and an assistant.

The president, while expressing delight for the visit, acknowledged the strong economic relations between Nigeria and Korea and the desire that this be strengthened and deepened.

The President acknowledged the strength of the Chamber membership as well as the diversity of the various business sectors represented and the desire for a strong business partnership with Korea.

The statement said since the President would be visiting Korea from May 20, 2018, he expressed the desire to meet with leadership of the Chambers of Commerce in Korea, especially in Seoul and Busan.

WHO calls for global elimination of cervical cancer ANTHONIA OBOKOH

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orld Health Organisation (WHO) director-general, Tedros Adhanom Ghebreyesus, has made a global call for action to all countries towards elimination of cervical cancer in order to help end suffering it causes to girls and women.

The incidence of cervical cancer in Nigeria is 25/100,000 and there are approximately 32 million Nigerian women aged 15-64 years old already affected.

Every year, over 10,000 Nigerian women are given a diagnosis of cervical cancer and over 8,000 Nigerian women die from this largely preventable killer.

“Most of these women are not diagnosed early enough, and lack lifesaving treatment. If we do not

act, death from cervical cancer will rise by almost 50 per cent by 2030,” Ghebreyesus said.

Cervical cancer is the fourth most common cancer in women worldwide, caused by human Papilloma virus (HPV) and this virus has a prevalence of around 25 percent in Nigeria, and all sexually active women in the reproductive age group are exposed to the virus and therefore at the risk of forming cervical cancer during their lifetime.

According to Ghebreyesus, cervical cancer is one of the most preventable and treatable forms of cancer as long as it is prevented with HPV vaccination, detected early, and managed effectively.

“Prevention and early treatment are highly cost-effective.

Worldwide, however, cervical cancer affects over half a million women each year, and kills a

quarter of a million. One woman dies of cervical cancer every two minutes, making it one of the greatest threats to women’s health.

“This suffering is unacceptable, and cannot continue. In recognition of this I call for global action towards elimination of cervical cancer,” Ghebreyesus said.

The director-general also noted that nine in 10 women who die from cervical cancer were in poor countries. This means some of the most vulnerable women in our world are dying unnecessary.

“Our challenge is to ensure that girls globally are vaccinated against HPV and that every woman over 30 is screened and treated for pre- cancerous lesion.

To achieve this, we need innovation technology and strategies,” the WHO boss said.

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owned corporation should work.

Like other oil producers including Brazil’s Petrobras and Mexico’s Pemexv, who all saw improved financial results in 2017 and made operating profits,Equinorisreapingthebenefits of a rally in crude prices supported by production cuts from OPEC and its partners and geopolitical tensions; the reverse is the case for Nigeria.

Integratedoilcompaniesoftennet off losses incurred when crude prices dip with better refining margins and conversely during an oil rally.

But this gain eludes the NNPC which has recorded deficit for the seventh successive month due to poor refining operation and subsidy now called “under-recovery” on local consumption of petrol.

“There is lots of secrecy with NNPC; also despite doing so much under recovery how come a loss making organisation has not gone bankrupt,” said Luqmon Agboola, head of energy and infrastructure at Sofidam Capital.

BusinessDay analysis of the latest report of NNPC showed modest gains of N36.7 million made by NNPCs upstream and gas processing subsidiaries such as the Nigerian Petroleum Development Company (NPDC), RETAIL and Nigerian Gas Processing Transportation Company Limited, were wiped off largely by its downstream subsidiary operations which recorded deficits north of N1.5 billion according to figures from the organisation’s operations and financial report for 2018 actuals.

The combined value of output by the three refineries (at import parity price) for the month of January 2018 amounted to N26.18billion while the associated Crude plus freight costs and operational expenses were N28.88billion and N10.88billion respectively; resulting to an operating deficit of N13.59billion by the refineries.

Agboola added, “Nobody is even asking question surrounding the revenue for the 450,000 barrels they get daily.”

Group operating revenue for

the months of December 2017 and January 2018 were N406.83billion and N323.19billion respectively which represent 110.63 percent and 87.89percent respectively of monthly budget. Similarly, operating expenditure for the same periods were N413.64billion and N324.76billion respectively, which also represents 130.22percent and 102.24percent of budget for the months respectively.

“The amount of money spent on subsidy or underrecovery can provide lots of infrastructure for the teaming population,” Agboola told BusinessDay by Phone.

Despite Equinor losing an arbitration dispute to the tune of $1.1 billion against its partners, including Chevron and Petrobras, over the redetermination of shares in Nigeria’s largest deepwater oilfield Agbami, the state-owned company pre-empted the decision by making a provision for it.

Higher oil prices and rising production helped Equinor’s increase earnings by a third in the

time from next month.

They also complained that MTN Group has not provided them more information on the IPO process(s) and that there is no clarity yet on the potential valuation of the proposed initial share sale.

MTN plans to list its Nigerian unit which BusinessDay estimates is worth between N3.2trn ($8.56 billion) and N3.9trn ($10.88 billion), by July - August on the Nigerian Stock Exchange (NSE), and may use part of the fresh funds raised to reduce debt.

MTN Group may sell at least 10 percent of its stake in its Nigerian subsidiary to pay preference shareholders, Reuters reported earlier in the year.

MTN Nigeria has around 402 million shares in issue, the same amount in preference shares, which it sold at $0.99 in 2007.

As part of the IPO it would split one share into 50 units, to create 20 billion shares, which would be listed on the bourse and set the IPO price via book

first quarter, although the results lagged slightly behind analysts’ consensus expectation.

An increase of 2 percent in Equinor’s production to 2.18m barrels per day allowed the Norwegian group to lift adjusted net earnings to $1.47billion, from $1.11 billion in the same period last year.

Eldar Saetre, chief executive of Equinor’s, said the “solid earnings across all segments” were testament to “a lower cost base enabling us to capture high value from higher prices.”

Cash flow from operations increased by a fifth to $7.1 billion and the group’s net debt ratio fell from 29 per cent to 25.1 per cent in a reflection of the strength returning to balance sheets across the oil and gas sector as prices rise.

However, Equinor said its rising cash flows were offset by higher transportation costs and royalty payments, while a $100m increase in depreciation expenses for a Norwegian production field also weighed on the results.

The company which originally

started as Den Norske Stats Oljeselskap AS in 1972 before changing to Staoil and now Equinor said the name change was a natural step after it decided last year to become a “broad energy” firm, investing up to 15percent to 20percent of annual CAPEX in “new energy solutions” by 2030, mostly in offshore wind.

NNPCs situation is worsened by crude oil theft and over 1336 vandalized points recorded between January 2017 and January 2018.

During the period under review, refineries combined capacity utilization was just 10.89 percent.

“There are people working in these refineries that are being paid and promoted for not doing anything but yet receive hefty salaries, so the refineries are loss centres and not profit oriented compared to other oil producing countries which is a shame, but we hope the Petroleum Industry Governance Bill (PIGB) will help address all of these lapses,” Adeola Adenikiju, a gas and policy analyst for the world Bank and professor of Economics at University of Ibadan said.

Akinwunmi Ambode (m), governor, Lagos State; Aliko Dangote (2nd r), president, Dangote Group; Davkumar Edwin (r), executive director, Dangote Group; Femi Otedola (2nd l), chairman, Forte Oil plc, and Abayomi Awobokun, CEO, Enyo Retail and Supply Limited, during the governor’s inspection of the ongoing Sea Port Project at the Lekki Free Trade Zone, Ibeju-Lekki, at the weekend.

MTN Nigerian shareholders say in the dark...

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building, according to a Pre- IPO presentation.

MTN Group has continued to make good progress with the preparations for the IPO and has been engaging with capital market regulators –the Securities and Exchange Commission (SEC) and the Nigerian Stock Exchange (NSE), sources tell BusinessDay. The extensive engagement with regulators is on the structure and parameters of the listing.

“We don’t want to be kept in the dark in the whole process,” one of the minority shareholders of MTN Nigeria simply said last Friday.

MTN agreed to list the Nigerian unit on the Nigerian Stock Exchange as part of a June 2016 agreement to pay a $1 billion fine for missing a deadline to disconnect unregistered subscribers amid a security crackdown.

On June 10 2016, MTN Nigeria Communications Limited (MTN Nigeria) resolved the matter relating to the previously imposed regulatory fine with the Federal

Government of Nigeria after the completion of an extensive negotiation process.

In terms of the settlement agreement, MTN Nigeria agreed to pay a total cash amount of N330 billion over three years (the equivalent of 25.1 billion rand) to the Federal Government as full and final settlement of the matter.

In show of commitment to move ahead with the 2018 target, the group recently appointed Chapel Hill Denham as lead manager for the initial public offering (IPO). Other appointed advisers are South Africa’s Rand Merchant Bank, Renaissance Capital and Vetiva Capital.

The telecoms firm is also working with Stanbic IBTC Capital, Standard Bank of South Africa, Standard Advisory London and Citigroup Global Markets, as joint advisors and global coordinators, with Stanbic acting as lead issuer.

One major impact from the listing of MTN Nigeria is that it will significantly dilute the dominance of the banking and cement sectors on the Nigerian bourse and give investors more

options, which is good for the stock market, according to research analysts.

The listing of MTN on the Nigerian bourse makes the stock market become more reflective of the broader economy with the telecoms sector contributing about 10 percent to Nigeria’s GDP. MTN Group said in a note preceding its financials for the year ended December 31, 2017 that “management has already initiated its Corporate Governance Rating Scoring with the NSE with a view to listing on the NSE’s Premium Board.”

The Premium Board of the NSE includes the likes of Dangote Cement Plc, Zenith Bank Plc, FBN Holdings Plc, Seplat Petroleum Development Company Plc, Access Bank Plc, Lafarge Africa Plc and United Bank for Africa Plc. MTN Group reported improved results for the 12 months ended December 31, 2017, delivering on guidance communicated in March 2017 and returning to profitability in headline earnings.

For the Group, macro-eco-

Monday 21 May 2018

BusinessDay investigation into the 2017 financial books of Equnor showed the company made a provision of $1.1 billion net of tax, which reflects a reduction of 5.17 percentage points in Statoil’s equity interest in the Agbami field.

•Continues online at www.businessdayonline.com

NSE 30 earnings...

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ket capitalization of N12.62 trillion as at year end 2017 representing 96.3 per cent of total market capitalization on the Nigerian bourse earned N3.04 in 2017 up 76 percent from the N1.73 earned in 2016 and +23 percent from N2.46 per share earned in 2014.

Earnings for the 30 largest listed firms had been falling since 2014 as companies got hit by a recession and falling oil prices.

EPS for the NSE-30 fell 27.2 percent between 2014 and 2015 to N1.93, and fell further in 2016 by 11.1 percent to N1.73.

The top 30 firms had cumulative net income of N1.165 trillion in 2017, up from N662 billion in 2016.

Dangote Cement with net income of N204.2 billion, Zenith Bank (N177.9 billion), Guaranty Trust Bank (N170.4 billion), Seplat (N96.4 billion) and UBA (N78.5 billion) were the top five firms in terms of earnings.

The NSE all share index is up 5.83 percent year to date.

Going forward analysts at Investment O ne Financial Services however expect the ma rke t t o re ma i n vo l at i l e in the absence of positive news flow.

“We however highlight the potential for the market to gain as the recent downtrend presents a decent entry opportunity into some of our quality names,” Investment One said. nomic conditions were challenging across a number of markets. For instance, Nigeria experienced a markedly weaker naira as well as hard currency liquidity challenges earlier last year, but this improved as the year progressed.

In constant currency, the Group service revenue in 2017 grew by 7.2percent, underpinned by 11.2percent growth in service revenue in Nigeria and a 3.9percent (on an organic basis) growth in service revenue in South Africa.

In 2017, MTN Nigeria subscribers base was 52.3 million; revenue increased by 11.4percent; data revenue increased by 86.6percent; digital revenue decreased by 3.5percent; Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) margin declined by 7.5 points to 38.9percent (excluding the impact of the regulatory fine); while capital expenditure (capex) increased by 38.2percent.

The MTN Group listed on the Johannesburg Stock Exchange (JSE), has a market capitalisation of $17.1 billion (R218.18 bn).

Monday 21 May 2018

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BusinessDay to partner NIPC on investment summit TONY AILEMEN, ABUJA

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ederal Government investors’ drive is set to get a boost Monday, as Nigeria’s investment flagship, the Nigerian Investment Promotion Council (NIPC), hosts a three-day investment submit from May 21 - 23.

Vice President Yemi Osinbajo, who is expected to declare the event open, will also deliver the keynote address, while the chief host is Minister of Industry, Trade and Investment, Okechukwu Enelama.

BusinessDay Media and the National Bureau of Statistics (NBS) are partnering the NIPC on the event that is expected to bring together well over 100 Domestic Direct Investors (DDIs) as well as Foreign Direct Investors (FDIs), according to the NIPC deputy director in charge

of strategic communications, Gana Wakil.

The event, tagged “Direct Investors’ summit, Nigeria, 2018,” will attract policy makers and investors, with the view to bringing long-term investments into critical sectors of the economy.

The major areas of focus, according to Wakil, will include agriculture, manufacturing, transport, power and gas, processing and information technology, among others.

The investment agency was established to among other things create investments awareness on the country’s investment climate and opportunities with a view to generating awareness and attracting investments to Nigeria.

BusinessDay is expected to help in enhance mileage by ensuring adequate publicity for the pre-event activities as well as during and after the events.

CBN intervenes in agric, airlines, petroleum, others with $293m HOPE MOSES-ASHIKE

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he naira strengthened on Friday following the intervention of the Central Bank of Nigeria (CBN) in the Retail Secondary Market (SMIS) of the interbank Foreign Exchange Market with the sum of $293 million.

The intervention was in favour of interests in the agricultural, airlines, petroleum products, raw materials and machinery sectors.

Naira on Friday gained N0.37k over the dollar as it was quoted at N360.85k to the dollar compared with N361.22k traded the previous day at the investors and exporters forex window, data from the FMDQ revealed.

The local currency was stable at the CBN’s official window, trading at the rate of N305.85k per dollar on Friday. However, the naira lost N1 at the Bureau De Change (BDC) segment, where it closed at N364 per dollar as against N363/$, data from Naijabdc revealed.

At the Nigerian Autonomous Foreign Exchange Fixing (NAFEX), the naira also

strengthened marginally by 0.01 percent as it closed at N361.26k on Friday from N361.30k on Thursday.

A statement from Isaac Okorafor, the bank’s acting director, corporate communications department, indicated that the objective of the CBN intervention in the foreign exchange market remained to ensure liquidity in the foreign exchange market and enhance production activities.

He explained that the CBN would continue to ensure liquidity in the interbank sector of the market as well as sustain its interventions in order to drive economic growth and guarantee market stability.

At the money market on Friday, the 30-Day Nigeria InterBank Offered Rate (NIBOR) decreased to 13.62 percent, whilst 90-Day and 180-Day increased to 15.31 percent and 16.99 percent, respectively, according to a report by FSDH Research, a subsidiary of FSDH Merchant Bank Limited.

Nigerian Treasury Bills (NTBs) rates dropped further by an average of 15 basis points as there was continued demand for bills.

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BUSINESS DAY

Mass defection looms in APC over ward, LG congresses OWEDE AGBAJILEKE, Abuja

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enators on the platform of the governing All Progressives Congress (APC) who lost out in the recent ward and local government congresses of the party are set to leave the party en masse, BusinessDay learns.

The APC lawmakers, who failed to install their loyalists as ward and local government party executives, lost out as a result of power tussle with either governors in their respective states or other political gladiators.

It was reliably gathered that most of the legislators who were nursing re-election ambition, were already weighing their options, one of which was defecting to other political parties to actualise their plan.

Findings also showed that other political parties were also dangling automatic return tickets to the affected lawmakers.

From Cross River, Oyo, Adamawa, Delta, Ogun, Rivers, Kaduna, Bauchi, Akwa Ibom, Zamfara, Kogi, Ondo to Kano states, lawmakers have expressed their displeasure about the two congresses.

The affected senators include: Rabiu Kwankwanso (Kano State), Monsurat Sunmonu (Oyo), Magnus Abe (Rivers), Abdul-Aziz Murtala Nyako (Adamawa), Isah Misau (Bauchi), Ovie Omo-Agege (Delta),

Kabir Marafa (Zamfara), John Enoh (Cross River), Nelson Effiong (Akwa Ibom), Suleiman Hunkuyi (Kaduna), Shehu Sani (Kaduna), Adeola Olamilekan (Ogun), Ajayi Borroffice (Ondo), Yele Omogunwa (Ondo), Dino Melaye (Kogi), Tayo Alasoadura (Ondo), among others.

Our correspondent also observed that while some of the affected lawmakers have abandoned legislative duties and are consulting with their supporters to weigh their options, a few others that summoned the courage to attend plenary last week looked depressed.

However, in Imo State, Benjamin Uwajumogu and Hope Uzodinma, who recently defected to the party, succeeded in outsmarting the governor, Rochas Okorocha.

This followed plot by the governor to oust Uzodinma, install himself as the party’s candidate from Imo West Senatorial District at the 2019 election as well as anoint his Chief of Staff and son-in-law, Uche Nwosu, as his successor.

But a coalition comprising of APC National Organising Secretary, Osita Izunaso; Imo deputy governor, Eze Madumere; secretary to the APC National Convention Organising Committee, Benjamin Uwajumogu; chairman, Senate Committee on Customs and Excise, Hope Uzodinma; former lawmaker,

Ifeanyi Araraume; former Secretary to the State Government under Okorocha, Jude Ejiogu, majority of House of Assembly members and a host of others, presented a formidable force and took absolute control of the party’s affairs by installing their loyalists as ward and local government party executives.

Explaining the importance of ward and local government congresses, a political analyst, Jide Feranmi, pointed out that since most statutory delegates at party primaries emanate from the two levels, any lawmaker that fails to install his loyalists as ward and local government party executives will lose at the party’s National Assembly primary.

“Delegates at party primaries are of two types: statutory and ad-hoc. While the former is not elected and drawn from ward, local, state party executives, past and present elected political office holders, the latter is elected.

“As morning shows the day, a senator who fails to put his loyalists as party and ward executives knows that the game is over. He has lost a return ticket.

“The biggest casualty are serving senators who defected to APC with a promise of return ticket, only to be deceived and shown the exit door by other political heavyweights. Senators John Enoh, Ovie Omo-Agege, Nelson Effiong and Yele Omogunwa fall perfectly into this

category,” Feranmi said.

According to the guidelines and schedule of activities for the 2019 general elections released by the Independent National Electoral Commission (INEC), conduct of party primaries including resolution of disputes arising from the primaries would run from August 18 and October 7, 2018, while campaigns of political parties for the National Assembly elections would take place between November 18, 2018 and February 14, 2019.

Investigations also revealed that while 32 out of the 109 senators in the seventh Senate returned to the eighth Senate (representing 30%), 77 senators in the seventh Senate failed to secure return tickets to the eighth Senate (representing 70%).

Speaking on the development, the chairman, Senate Committee on Local and Foreign Debts and one of the affected legislators, Shehu Sani (APC, Kaduna State), described the exercise as a sham.

The outspoken senator who has been at loggerheads with his governor, Nasir el-Rufai, said: “The Ward congresses was meant to show internal democracy. It ended up revealing internal tyranny and internal chaos, presided over by people with the faces of Lincoln but the Heart of Mussolini. Their tongue is change, their heart is unchanged”.

Babatunde Fashola, minister of power, works and housing, (2nd l); Damilola Ogunbiyi, managing director/CEO, Rural Electrification Agency (REA), (2nd r), and others during the inspection of the electrified shops under the Federal Government ‘s Energising Economies Initiative at Ariaria Market Aba, Abia State.

NSIA to manage $650m Presidential Infrastructure Development Fund Homeowners’ Charter has increase value of properties in Ogun – Amosun ONYINYE NWACHUKWU, Abuja

N

ational Economic Council (NEC) has authorised the initial transfer of $650 million to the Nigeria Sovereign Investment Authority (NSIA) as seed funding for Presidential Infrastructure Development Fund (PIDF).

The money is to be transferred from the Nigerian Liquefied Natural Gas (NLNG) Dividend Account and managed by the NSIA on behalf of the Federal Government.

The authorisation by NEC last week followed an approval

by President Muhammadu Buhari for the establishment

of PIDF, which is to be managed by the NSIA, and invested specifically in critical road and power projects across the country.

The PIDF will secure counterpart funds required for projects being co-developed with China Exim and China Development Banks, and mobilise any additional funding required from development partners “This initiative aims to eliminate the risks of project funding, cost variation and completion that have plagued the development of the nation’s critical infrastructure assets — such as the 2nd Niger Bridge, Lagos - Ibadan Expressway, East-West Road,

Abuja to Kano Road, Mambilla Hydroelectric Power — over the last few decades,” according to a Presidency statement mailed through the NSIA on Friday.

“This commitment by the President and NEC allows all state governments to own an economic interest in the project companies that will be professionally developed and managed by the NSIA,” the Presidency said, while optimistic that “the investments will yield returns, which will diversify revenues to states, improve the fiscal sustainability profile of the Federation and ensure Nigerians benefit from modernised Infrastructure for decades to come.”

O

gun State governor, Ibikunle Amosun, says Homeowners’ Charter Programme had improved the physical and social infrastructure as well as increase the value of properties in the state.

Governor Amosun stated this during the 31st edition of the presentation of Certificates of Occupancy and Building Plan Approval to another batch of beneficiaries, at the Arcade Ground, Oke-Mosan, Abeokuta.

Represented by commissioner for health, Babatunde Ipaye, the governor said findings showed that landed property had increased, just as landowners now build

with confidence, as a result of availability of land title documents. ‘’With the C of O, there is a significant improvement on our physical infrastructure and the value of houses skyrocket from the day you have the document. Also, when you know that you are the true owner of your house, it makes you have significant confidence called ‘’Ifokanbale,” meaning, peace of mind from unnecessary squabble with Omo Onile,” Amosun said.

He observed that those who did not believe in the programme are beginning to see that the administration meant business, calling

for continued support of government policies and programmes to fulfil promises made to the people.

In his welcome address, the Homeowners’ Charter Programme Analyst, Adetayo Oni, said the State government was determined to offer continuous and efficient services to all qualified applicants, urging beneficiaries to spread the good news about the programme.

Speaking on behalf of the beneficiaries, Sola Adegbenro from Ifo Local Government Area, thanked the State government for keeping to its words, saying the documents had made them confident owners of their property.

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Monday 21 May 2018

N10bn micro grant: Dangote lifts 25,000 women in Niger

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liko Dangote Foundation has flagged off its one-off and unconditional micro-grants programme in Niger State with 25,000 disadvantaged women as beneficiaries, bringing the total number of women beneficiaries to 256,500 across seven states of the federation.

Chairman of the Foundation, Aliko Dangote, said weekend at the flag-off ceremony held at the Justice Idris Legbo Kutigi International Conference Centre, Minna, the Niger State capital, that his Foundation had earmarked N10 billion for the empowerment of vulnerable women in the 774 local governments in

WAEC Nigeria disowns false recruitment information KELECHI EWUZIE

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est Africa Examination Council (WAEC) Nigeria has dissociated itself from any false recruitment information posted by unscrupulous persons in the name of WAEC in several media and online channels.

WAEC observed with dismay at such fraudulent advertisement trending on Facebook and other social media, titled WAEC recruitment 2018/2019 exercise how to apply online via waeconline.org. ng, by topgist.com.ng The West Africa examination body while reacting to this in a statement obtained by BusinessDay explains that applicants and the general public are hereby advised to disregard the purported advertisement and avoid falling into the hands of scammers who are out to make money from gullible and undiscerning individuals.

Demianus G. Ojijeogu, head, public affairs, WAEC Nigeria, explains that WAEC Nigeria is a reputable and structured organisation that operates in accordance with time-tested norms and prescribed procedures, whose hallmarks are integrity, transparency and openness.

According to Ojijeogu, “We hereby categorically state that there is no recruitment exercise currently going on or being carried out by WAEC Nigeria. The advertisement did not emanate from us neither did we authorise any agent to do so on our behalf ”.

The advertisement on the so-called recruitment exercise is simply the handiwork of fraudsters who are out to dupe gullible and unsuspecting job seekers and members of the general public.

He further said that whenever there is need and capacity for any exercise, the general public would be duly informed through reputable media channels.

the country.

He said one thousand women were drawn from each of the Niger state’s 25 local government areas.

“The Micro-grants programme is one component of the Economic Empowerment pillar of the Foundation. It provides disadvantaged and vulnerable women with a oneoff, unconditional N10,000.00 cash transfer to boost their household income generation. This we believe will help reduce their vulnerability and meet their livelihood needs,” he said.

Dangote explained that since the Foundation commenced disbursement in

2012, about 256,500 women have benefitted from the programme across Kano, Lagos, Jigawa, Kogi, Adamawa, Borno and Yobe states, with a total disbursement ofN2.565 Billion so far.

He said: “I do not only want to be known as the Africa’s Richest Man, but the biggest philanthropist. I will continue to use my resources and my voice to help shape a better Nigeria, and Africa as a whole.”

The Niger State governor, Abubakar Sani Bello, speaking at the event, appreciated the gesture of Dangote for touching the lives of ordinary Nigerians, especially vulner-

able women.

Governor Bello extolled the Aliko Dangote Foundation for the generosity extended to poor women in his state and urged them to use it to start small businesses so the Foundation would be pleased to do more.

He praised the public spirit of Dangote and urged other well-meaning Nigerians to emulate such a good gesture to impact the society.

The Foundation’s executive director and daughter to the chairman, Halima Aliko Dangote, said the Foundation was poised to help lift the status of womanhood in the country, adding: “If you

empower a woman, you empower the whole nation.”

She stated that women have always bear the brunt of the harsh economic reality in the country and the Aliko Dangote Foundation reasoned that they should be the target of such critical intervention as the disbursement with the hope that the benefits will cascade down the family line with women as the maker of the home and improve the family wellbeing.

Managing Director of the Foundation, Zouera Yussouffou, said the micro grant scheme was part of the four cardinal crust of the Foundation, which were: Health

and Nutrition, Education, Economic Empowerment and Disaster Relief.

She stated that the Foundation has been delivering its core mandate across the four cardinal trusts in a strategic manner that ensures its objectives clearly marked out are fully achieved Giving a breakdown of how the beneficiaries were selected, the Representative of the office of the Secretary to the State Government, Ruth Isa said five women were selected from each polling units in Niger State, adding that the beneficiaries cut across sociopolitical and religious groups to ensure even spread.

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Monday 21 May 2018

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Systemspecs answers questions on Remita David Okeme, chief commercial officer, Sysytemspecs, creator of Remita, answers questions on the various allegations made against the company and Remita as a payment platform for the Federal Government. Excerpt

H

ow accurate is the allegationthatSystemSpecs refused to allow other paymentsolutionproviders (Interswitch, Etranzact, NIBSS, UPSL) integrate into the TSA collection platform?

Not true. SystemSpecs Remita Payment Technology Platform is open and connected to different payment industry players and partners. By its very nature, the Treasury Single Account (TSA) connotes SINGLENESS across many dimensions. That is why Government sought a SINGLE solution from a SINGLE solution provider to provide the TSA Technology platform after a rigorous considerationof differentsolution options way back in 2011 when the evaluation for a solution was done.

SystemSpecs from day 1 fully understood the technology and operational requirements of the different aspects of TSA way beyond the electronic collection component and demonstrated this all through the evaluation process.

Our Remita Payment Technology Platform that drives the TSA has integration with other payment technology solutions at the core of its design. This has always been one of the very unique and verifiable features that has distinguished the Remita solution in the market place.

We are connected and integrated with many payment technology solution partners to deliver acomprehensive bouquet of services on the TSA and to our other customers.

It may interest you to note that we are the first and probably the only e-payment provider that has opened our system to competitors all in the spirit of providing services to customers from a SINGLE point.

In the last few months, we have however learnt of different thoughtsandinitiatives,including the creation of a proposed “new aggregator model” which aims to bring other industry players to connect.

Suffice it to say we pioneered thedesignandimplementationof the model of integrating with our competitors as PARTNERS as we verywellunderstandthebusiness imperatives of of competition and cooperation as may be necessary.

Weopenedoursystemtomultiple payment service providers (PSPs) who receive a share of the fees for each transaction consummated throughtheirplatformsintegrated with Remita.

You may recall that even for bank branch collections, until SystemSpecs provided its unique platform, customers had to go to specific banks depending on who they wanted to pay. We integrated all banks and their branches so that customers can now pay from any bank branch. We introduced a technology that allowed payers to walk into any bank branch, including over 500 microfinance banks, and pay government.

A few PSPs have however expressed preference for an alternative connection approach, which would certainly lead to an unmanageable mesh or a “reinvention of the wheel” In summary, we have always worked progressively with government and collaborated with stakeholdersoperatingindifferent aspects of the financial services industry. Remita currently aggregates different payment channels provided by other payment service providers and provides

John Obaro, CEO, Systemspecs this offering to support the TSA and our other customers.

How accurate is the allegation that you sit on payments from FG for months before giving other system participants their share? The allegation is that you decline to share the interest earned on the money that you hold onto?

Not accurate.

It is common knowledge that that we and all partners involved in providing TSA collection services have not been paid by government for about 17months now. It is therefore difficult to comprehend the allegation of holding on to what is not in our hands. We have never and will never attempt to undermine our collaborating partners on the TSA and other initiatives we have been involved with over the years of their entitlement or the income earned from the initiative.

As you may know, global standard practice is for electronic payment charges to be deducted at source in real time at the same time a transaction occurs. Today, this is NOT the case for TSA collections. No payment has been received by any party from January 2017 to date. If charges were being deducted at source, as it should be under normal circumstances, our system is designed to determine and directly distribute to all parties. This is what happens for our non-TSA transactions, as the system optimally settles all our partners without any hitches.

Even when payments are received from Government in arrears because transaction fees are not secured at the point of transaction whatever is received is immediately distributed to all parties once we secure payment schedule from Government.

For example, when TSA collections commenced, electronic card payment was not activated as a channel. We however introduced card payments through collaboration with industry partners who offer such services because it is considered one of the easiest ways for people to pay online. Interestingly, despite not being paid by Government for the past 17 months, we have continued to pay the card processing firms100% of their feesin line with global practices. Since government is yet to resolve the issue of ensuring transaction fees are secured at the point of transaction for distribution in real time to all stakeholders, we find ourselves hanging in the middle as we have to ensure full collections delivery to government.

Of course we cannot continue this indefinitely which is why we have been in intensive engagement for a full resolution as soon as possible.

How accurate is the allegation that the Remita platform is unstable and opaque?

A system which for the first

time in the history of our country makes it possible for relevant officials in about 2,000 MDAs and other relevant government and regulatory officials monitor and track every single line of payment and collection certainly cannot be the one being alleged to be opaque. Neither can a system the Government has publicly announced as a source of veritable data to support the ongoing VAIDS initiative be described as opaque except mischief is intended.

Remita’s design philosophy from inception about 15 years ago bore in mind the needs of public and private sector organisations and individuals for an easy-to-use payments system that easily gives full visibility into all payments and collections transactions without braking any sweat.

Before the selection and eventual introduction of Remita into the operations of the Federal Government even though it was already being used by a number of other public and private sector organisations, No Accountant General of the Federation, CBN Governor, Minister of Finance or any other top government official could determine account balances across thousands of accounts, affirm the consolidated cash balance of the government in real time or generate electronic statements of all government accounts online. These were laborious manual processes, which were time consuming and end results almost always lagging behind intended real time use.

For the first time in this country, since 2012 when Remita went live on TSA nobody has to open a manual file to determine our national cash position at the central bank.

On another hand, before the introductionofRemita,therewere limited channels of making payment to government only within official working hours and only on 5 working days of the week.

But now, using any of over 8 payment channels available on the system, anyone from any part of Nigeria can easily make payment to government from anywhere in the world and at any time of any of the 7 days in a week. That’s not to mention the accountability, comprehensive reporting system and transparency that have been introduced.

On the technical side, when issues arise as they certainly do on any technology solution from anywhere in the world, we have put in place a robust 24/7 operational support infrastructure that ensures issues are resolved within the shortest possible time to ensure we continue to guarantee our users seamless payment experience. Please note also that because we are connected to manypartnersincludingtheCBN, if any of them has a challenge or a downtime it is bound to have a reflection on Remita’s service.

(An example is like getting to an ATM and it says service not available, it may not be the fault of the bank but the witch powering the ATM). We however have Service LevelAgreements(SLAs)withour service partners and always try to hold them accountable to these standards.

On a last note, as a service organization, we do not focus on tradingblamesorpointingfingers, we simply follow up with relevant partners for prompt resolution.

For us, nothing dwarfs guaranteeing the convenience of our users.

See full interview online

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Lagos, NCAA to tackle safety threat associated with unauthorised high-rise structures IFEOMA OKEKE

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igerian Civil Aviation Authority (NC AA) and the Lagos State government have agreed to work together to curb the danger posed by unauthorised high-rise structures scattered around Lagos metropolis.

This collaboration was a resolution from a bilateral meeting between the NCAA director-general and the officials of the Lagos State Ministry of Physical Planning and Urban Development and Ministry of Works and Infrastructure in the face of real and obvious threat to safe flight operations these structures possess.

The first meeting was held on April 26, and another one on May 17, 2018, at

the NCAA’s Aviation House Office.

In a release signed by Sam Adurogboye, spokesperson, NC AA , it stated that with this synergy, it was expected that the two parastatals of the Lagos State government would d e p l oy t h e i r c a p a c i t i e s i n cl ea r i ng a l l o b st r u ctions/obstacles along flight paths within the state. In addition, their resources will be used to spot where other landing facilities are located in Lagos.

These landing facilities include heliport, helipad, helideck and airstrip.

“Therefore, in line with its regulatory functions, the NCAA has directed all intending developers or builders of high-rise structures within the Aerodrome Obstacle Limitation Surfaces

(OLS) should always apply to the authority for Aviation Height Clearance (AHC) and permit.

“It was similarly agreed that NCAA will provide the Lagos State agencies with a Flight Path Map to guide them in planning, development and granting of approvals for new structures in the state.

“The Nigerian Civil Aviation Authority (NCAA) is ready to enter into partnership that will guarantee the safety and security of flight operations,” the release noted.

The director-general was represented at the meetings

by Mohammed Odunowo, the director of Aerodrome and Airspace Standards (DAAS). Another meeting has been slated to review the operations.

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FINANCIAL TIMES UK has not renewed Roman Abramovich’s visa

Information wars: How Europe became the world’s data police

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World Business Newspaper

US and China step back from brink of trade war

Mnuchin says Washington free to impose tariffs if Beijing fails to live up to commitments SHAWN DONNAN

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he US has stepped back from the brink of a trade war with China after Washington halted plans to impose tariffs on up to $150bn of imports, according to the US Treasury secretary.

“We’re putting the trade war on hold,” Steven Mnuchin said in a television interview on Sunday.

The declaration from Donald Trump’s point man in trade talks followed a joint statement from the US and China on Saturday in which Beijing promised to “significantly increase” its purchases of American farm exports and energy and both sides said they would continue talking over the summer.

Saturday’s statement left out detailed targets after Chinese negotiators resisted a Trump administration push to make a commitment to increase purchases by $200bn annually. Critics in the US are also concerned that its main emphasis appears to be on meeting Mr Trump’s goal of reducing the US’s annual $337bn trade deficit with China rather than tackling more difficult structural issues in the Chinese economy, such as Beijing’s subsidisation of key industries and systemic theft of US intellectual property.

Mr Mnuchin insisted on Sunday that Chinese commitments to addressing such issues were part of the broader deal and warned that Mr Trump would be free to impose tariffs if Beijing did not live up to its commitments.

He said the two sides had made “meaningful progress”, adding: “We have agreed to put the tariffs on hold while we try to execute the framework.”

But he and other advocates within the administration of reaching a quick deal with Beijing face scepticism from a US business community that sees those structural issues as a more important endeavour than reducing the trade deficit.

The vagueness of Saturday’s statement illustrated what people briefed on the discussions said was the vast

gap remaining between both sides and other administration officials conceded as much on Sunday. “There’s no agreement for a deal. We never anticipated one. There’s a communique between the two great countries, that’s all,” Larry Kudlow, the head of Mr Trump’s National Economic Council, said in a separate television interview.

The administration also faces another political firestorm at home over Mr Trump linking the trade talks to the possible lifting of a ban on Chinese telecoms equipment company ZTE sourcing chips and other parts from US suppliers. ZTE, which has long been the target of concern by US intelligence agencies, has admitted to both violating US sanctions on Iran and North Korea and breaking the terms of a $1.2bn settlement with the US government.

Resolving the ZTE situation had been the Chinese side’s top priority but the political reaction in Washington to a tweet by Mr Trump last weekend pledging to help the company return to business reduced the ability of the US to seal a deal and caused China to resist a commitment to a $200bn deficit reduction target, people briefed on the discussions said.

Mr Mnuchin conceded on Sunday that the ZTE matter had been discussed during negotiations last week but insisted that the US ban was an “enforcement matter”. Other US officials have raised the possibility of a deal that would see ZTE’s access to US parts restored in exchange for a change in management and other less stringent punitive measures.

Wilbur Ross, the US commerce secretary, would be travelling to China in the weeks to come to negotiate details of Chinese purchases, Mr Mnuchin said. But he said the US side had very specific “industry by industry” targets in mind, raising the possibility of a 35-40 per cent increase in agricultural imports this year and an additional $50bn-$60bn in annual US energy exports over the next three to five years.

“We are going to reduce the trade deficit,” Mr Mnuchin said.

Investment banks line up rebound in revenues Citigroup expects recovery from fall of about 15% in first 5 months of the year LAURA NOONAN

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lobal investment banking revenue will recover from a fall of about 15 per cent in the first five months of the year, according to the head of capital markets origination at Citigroup.

Tyler Dickson, who oversees debt and equity capital markets for one of the world’s top three investment banks, said the fall in revenues for 2018 compared with a year earlier would end up being “closer to zero” than the 15 per cent fall in the year to date.

He said that conditions last year were “near perfect”, given geopolitical risks, interest rate rises, trade wars and inflation, but this

year the backdrop was still “pretty darn good”.

“We would expect that gap (between 2017 and 2018) to close,” he added, referencing the 15 per cent fall in investment banking revenue year to date as charted by industry monitor Dealogic.

Mr Dickson said that Citi, which is considering applying for a full banking licence in Saudi Arabia and has done a number of recent deals for the kingdom, was not concerned about the succession of delays to the flagship $2tn flotation of oil company Saudi Aramco.

“Those who take time on privatisation campaigns in order to do them right do better than those Continues on page A10

Donald Trump’s remarkable conversion appears to be entirely due to exchanges with Xi Jinping © AFP

Big banks boost Brexit budgets Spending spirals as uncertainty persists over how Britain’s EU departure will pan out LAURA NOONAN

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ig banks are increasing their budgets for dealing with Brexit, as they stick to a March 2019 deadline to transfer parts of their businesses from London despite the 21-month transition deal struck between the UK and EU earlier this year.

Senior executives at three large lenders told the Financial Times their organisations now expected to spend more than £100m on plans to reorganise their businesses after Britain’s departure from the EU. Two said the costs, which covered everything from consultants’ fees to planning teams’ salaries and technology, had risen because of prolonged uncertainty about how Brexit will pan out.

Consultants said they had seen rises across several banks and that it was “not unusual” for big banks to have budgeted £100m-£200m for Brexit costs this year, in addition to the £10m-£30m they had already spent since the June 2016 vote to take the UK out of the EU. The news comes after a survey

from EY showed that 65 per cent of financial services businesses said a political agreement on a Brexit transition had not changed their Brexit planning timelines.

Just 4 per cent of the 181 financial services groups polled by the consultancy firm said they would work towards a December 2020 deadline, when the agreed transition expires, rather than March 2019, when Britain leaves the EU and the transition begins.

Investment banks using the UK as their gateway to Europe have the most restructuring to do after Brexit, since they will have to create entities to do business with their EU clients.

Banks hope to move minimal numbers of people and continue to manage the risk of their EU trading books through London but regulators have yet to approve this “back-toback” model that banks already use to consolidate risk for some asset classes in single locations. Uncertainty over the outcome has forced banks to devise many strategic plans, adding to the Brexit planning costs.

One of the executives said the

transition would add to the costs of Brexit planning but deliver limited benefits.

“You have people sitting in a project team,” he said. “If you expand out [the timeline], there’s a cost to that team, you have to maintain the team for longer, that will increase the cost of Brexit planning.”

Another said that for his bank “the cost has gone up” to hundreds of millions of dollars. He attributed rising forecasts to the fact banks did not appreciate the measures they would have to take for some time after the Brexit vote, as politicians decided the future regulatory terms.

A third senior executive said his bank would “probably spend a triple-digit sum” closer to $100m than $200m, but that other peers were spending even more.

The rising costs are generating frustration, even as the big US banks enjoy some of their best profits in years. “We have to spend on things that give no further functions to our customers,” he added. “This is helping no one, at the best they get what they had before.”

Europe airlines face ‘precarious’ Brexit transition

Ryanair’s Jacobs worries ‘hard core Brexiters’ could put vital transition deal in doubt JOSH SPERO

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uropean airlines are facing a “precarious” transition as uncertainty surrounding Britain’s exit from the EU intensifies in the industry.

Kenny Jacobs, Ryanair’s chief marketing officer, said he feared “hardcore Brexiters” were putting in doubt a draft transition deal that would allow airlines to continue flying freely between the UK and EU. UK Prime Minister Theresa May had agreed to the draft transition in March, but Mr Jacobs feared pressure from pro-Brexit MPs would lead to the deal not being signed. This would mean there was no UK-EU agreement in place after Britain’s exit.

If this happens, Ireland-based Ryanair would lose rights to fly freely into the UK and its few intra-UK routes could also be impaired.

From the UK’s perspective, Brit-

ain-based airlines including British Airways and Virgin Atlantic would also lose rights to fly freely into the EU and US. Ryanair chief executive Michael O’Leary has previously warned about the threat to airlines from Brexit.

In the company’s full-year results for 2016-17, Mr O’Leary said: “Until we get clarity over the final terms of the UK’s future trading relationship with the EU, there must be significant uncertainty over flights between the UK and the EU for a period of time from March 2019 onwards.”

Mr Jacobs’ warning comes at a difficult time for European carriers.

Air France-KLM is looking for a permanent chief executive after unions forced the resignation of Jean-Marc Janaillac this month (May). Strikes have cost it more than €300m.

In 2017, three mid-size European airlines went bankrupt: Alitalia, Air Berlin and Monarch, while BA, which

took a 4.6 per cent stake in Norwegian Air, has had two proposals to buy the airline rejected by the board.

Mr Jacobs, speaking on the fringes of the CAPA Airline Leader Summit in Ireland, said he wished President Emmanuel Macron of France “godspeed” with his efforts to reform French institutions, including Air France-KLM, of which the state owns 14 per cent.

Ryanair could face ownership issues after Brexit too. EU regulations say that the bloc’s airlines should be majority-owned by EU nationals. According to the latest estimates, Ryanair is 60 per cent owned by EU nationals but that drops to 40 per cent once UK shareholders are excluded.

Mr Jacobs said this was not a “straightforward” problem given the airline’s significant UK shareholders, who were considering options including moving their holdings from London to Frankfurt and even selling them down.

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EDF in talks to sell half of its UK wind assets Analysts estimate the disposal could be valued at about £600m SYLVIA PFEIFER AND LESLIE HOOK

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DF, the French energy group, is in talks to sell a 49 per cent stake in a portfolio of its UK wind farms in a deal that could raise up to £600m.

EDF Energy Renewables, the

group’s UK renewables business, owns 23 onshore wind farms and one offshore wind farm off the northeast coast of England that generate about 550MW of electricity. Analysts estimated the disposal of a 49 per cent stake in these projects could be valued at about £600m.

“It’s a sizeable and diversified

portfolio,” said one analyst, who declined to be named. “The opportunity to partner with EDF is also likely to be attractive.”

The company has hired Barclays to advise on the sale. Binding offers for the portfolio are due towards the end of May, according to people with knowledge of the sales process.

Greencoat UK Wind, a listed investment fund, and a consortium

involving Dalmore Capital are seen as potential bidders, said these people, alongside a number of pension funds. EDF and Barclays declined to comment.

The disposal would be the largest in a series of transactions by EDF’s renewables business to reinvest in expanding its portfolio in other parts of the industry. In November it sold an 80 per cent stake in five

Investment banks line up rebound in revenues...

Continued from page A9 who rush,” he said. “We give the Saudi authorities credit for not going too fast.”

Investment banking, which covers debt and equity advisory as well as mergers and acquisitions, was one of the weaker points in banks’ first-quarter results.

Dollar-denominated investment banking revenues came in 4 per cent lower than a year earlier across five big US banks, as well as Deutsche Bank, UBS and Barclays, according to data from analysts at Autonomous. Falls for some banks were much worse: Deutsche Bank’s investment banking revenues were down 27 per cent, Bank of America’s were down 13 per cent, Citi and JPMorgan were both down 10 per cent.

Mr Dickson said that 2017 was “the most favourable (year) from a market perspective” that he had seen in his close to three decades at Citi, as investors piled into bonds to equities across the world.

Citi lead Dealogic’s global IPO league table based on both market share and number of deals for the first time since 2002, advising on big deals including the €1.6bn IPO of Deutsche’s DWS asset management arm. Citi also came second globally for debt capital markets revenues last year.

In 2018, Mr Dickson said, the US market has been comparatively slower: “I’ve seen less M&A activity, less financing activity, off a very robust baseline.”

More broadly, he said that headwinds included the “risk to global trade”, “protectionism across some very large markets”, greater sensitivity to geopolitical tensions and interest rate rises, which could make some financing activity less attractive.

“2018 is still a constructive market,” Mr Dickson said, adding that Citi saw a “strong” pipeline of activity. “The first quarter was slower than we anticipated, the transactions didn’t disappear, they just got pushed out a bit.”

Despite the US slowdown, 2018 has been something of a watershed year for global M&A, with the $1tn deal mark hit by March 20, the fastest it has ever been reached.

Since then, Vodafone has agreed an €18.4bn takeover of assets from Liberty Global, Japanese drugmaker Takeda has won acceptance of its £46bn offer for Shire, and J Sainsbury and Asda have agreed a deal to create Britain’s biggest grocer by market share.

“There’s a recognition by a lot of corporates that … they need to either address demand by investing in their business either organically or through M&A,” said Mr Dickson. “Activist trends continue to create pressure, that will also be a catalyst for M&A activity.”

of its onshore farms to Greencoat UK Wind. It continues to run the sites and provide maintenance and operational services. Together the wind farms have a combined output of close to 100MW. At the time, Matthieu Hue, chief executive of EDF Energy Renewables, said the deal was part of EDF group’s strategy “to allow us to invest in other UK renewable projects”.

America beware: dollar supremacy is not forever Under Trump, the US is increasingly seen as an unreliable partner

ESWAR PRASAD

T Roman Abramovich did not attend Saturday’s FA Cup final, which Chelsea, the team he owns, won 1-0 © EPA

UK has not renewed Roman Abramovich’s visa Oligarch and owner of Chelsea football club returns to Russia MAX SEDDON AND HENRY MANCE

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oman Abramovich misses FA Cup final after visa expired Home Office does not comment on why investor visa has not been issued Linked to residence applications in Jersey and Switzerland The UK has yet to renew a visa for Roman Abramovich, the Russian oligarch and owner of Chelsea football club, after it expired last month, according to four people close to the billionaire.

London-based Mr Abramovich, who is Britain’s 13th richest man according to the Sunday Times with £9.3bn, left the UK after his investor visa expired and did not attend Chelsea’s 1-0 win in the FA Cup final on Saturday. According to two people close to him he has returned to Russia.

He also did not testify as expected last week in a London court dispute between two other Russian oligarchs,

Oleg Deripaska and Vladimir Potanin.

Pressure is growing to take action against Russian oligarchs in London after the poisoning in March of exRussian military intelligence officer Sergei Skripal and his daughter Yulia with a rare nerve agent in Salisbury.

At the time, foreign secretary Boris Johnson promised that the UK would “go after the money” in retaliation of the attack.

David Davidovich, an associate of Mr Abramovich’s holding company Millhouse, told the court that Mr Abramovich was in Switzerland preparing to appear as a defendant in a separate case.

“There’s something up with his visa. I don’t know what it is and they don’t know what it is either. Let’s hope they sort it out soon,” a fellow Russian oligarch said.

One person close to Mr Abramovich said that the request for a visa had not been denied, but that the UK authorities were taking longer than

usual to renew it without offering any explanation. A spokesman for Mr Abramovich declined to comment.

The Home Office declined to comment. “We do not routinely comment on individual cases,” said security minister Ben Wallace.

Bob Seely, a Conservative MP, said: “Either there is an innocent explanation [for the delay in Mr Abramovich’s visa], or the government is becoming less sympathetic to Russian oligarchs in the UK. Either way, denying visas to oligarchs is potentially important.”

The news of Mr Abramovich’s visa limbo was first reported by independent Russian news site The Bell.

Funding for new Chelsea stadium unclear “These things happen for mysterious reasons. It must be very frustrating for him not to be able to visit his beloved Chelsea,” said William Browder, a fund manager who campaigns for sanctions against the flow of Russian money into western capitals.

European champions needed to fend off US and China

Continent’s business chiefs look to create bigger companies that can compete globally RACHEL SANDERSON AND DAVID KEOHANE

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bout a week before the Italian election in March, a FrancoItalian group of business leaders met for a shooting weekend in the countryside south of Paris.

The aim of the jaunt, a “regular event” according to one person present, was to foster amitié or harmony between business chiefs at a time when chief executives see the opportunity, and necessity, to create so-called European champions to fend off competition from the US and China.

With corporate Europe in the throes of merger enthusiasm, a strengthening economy and a desire for greater cohesiveness as a backlash against Brexit, closer corporate integration is high on the bloc’s political agenda.

The arrival of French president Emmanuel Macron and his Jupiterian vision of a “Grand Europe” has also

provided a political drive to create these champions even as Chinese companies push on with potential deals.

“Europe’s companies are too small,” said Carlo Alberto CarnevaleMaffè, professor of strategy and entrepreneurship at Milan’s Bocconi University. “European champions could start a new cycle of exporting not just goods but also intangibles, such as services.”

Bankers and business leaders see political momentum coming from France to create champions in areas of border control and defence, energy policy, and digital data. These are all areas where, not coincidentally, France has significant corporate clout, but European regulations are converging.

“Macron’s vision is built scientifically on European public goods that are closer to the French interest. We, Italians, should be doing it for food and tourism instead of criticising

Macron,” said Mr Carnevale-Maffè.

Deals have been struck in the past 18 months between Italy’s Luxottica and France’s Essilor, Germany’s Siemens and France’s Alstom and a Spanish-Italian-German infrastructure deal between Abertis-AtlantiaHochtief.

Top European dealmakers say they are looking at similar sized deals from banking, through energy, to food.

Despite Mr Macron and his vision, business leaders and senior European bankers generally say industry is leading the politicians rather than the other way round.

“Most of the pressure and dynamics is business driven,” said a senior European dealmaker at a US bank.

“Politics is riding on this to make a political statement. The competition to be bigger and more European to compete globally, rather than nationally, is a natural impetus. We don’t need Macron to think about it.”

he dollar reigns supreme in global finance. It accounts for a dominant share of international financial transactions and is the ultimate safe haven currency. But the US currency’s supremacy cannot be taken for granted. President Donald Trump may be sowing the seeds of its demise.

Mr Trump has often called for a weaker dollar, apparently to counter other countries that he claims are taking unfair advantage of the US by weakening their currencies to boost exports. Talk is cheap, however, and such statements by themselves will hardly derail the dollar. The real damage to its standing is more insidious and comes from policies that are eroding America’s fiscal stability, its trustworthiness and the strength of its institutions.

In times of financial turmoil — including the global financial crisis, which originated in the US — panicky investors flood into US bond markets. No doubt the sheer size of the American government and corporate bond markets is a key factor.

But there is something subtler and more important that accounts for the dollar’s status.

It comes down to trust. Flows into and out of currency and equity markets, where people make consequential financial decisions, show how trust matters even in seemingly cold-hearted and dispassionate decision-making.

The institutions that engender and maintain the trust of both domestic and foreign investors include an open and transparent system of democratic government with checks and balances. This needs to be underpinned by a central bank free from direct political interference and the rule of law administered by an independent judiciary.

Trust in US institutions is why, despite the prospect of rising government debt levels and the economic uncertainty unleashed by Mr Trump, the dollar remains strong. But this strength could prove fleeting. At present, most international financial transactions are denominated and settled in dollars and often through American financial institutions. This would change rapidly if investors believed that reckless fiscal policies could heighten volatility and erode the dollar’s value.

As it is, the falling cost of transacting in other currencies and the rise of emerging market currencies such as China’s renminbi are already reducing the dollar’s role in denominating and settling cross-border transactions.

China and South Korea are conducting trade using their own currencies rather than relying on the dollar as a “vehicle currency”. The logic for denominating in dollars virtually all contracts for oil and other commodities is waning.

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ANALYSIS Foreign investors rebel in battle for India’s Fortis Investment firms call for removal of directors after board rejects highest bid KIRAN STACEY

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Information wars: How Europe became the world’s data police The EU’s rules for data privacy were once derided as restrictive, but after the Facebook scandal Brussels hopes they will help bring big tech to heel

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era Jourova, the EU’s justice commissioner, describes it as a “loaded gun” in the hands of regulators.

This week the bloc introduces the General Data Protection Regulation, which will, its advocates argue, dramatically improve the care with which organisations both within the EU and elsewhere treat our personal data.

GDPR will harmonise data protection rules across the world’s largest trading bloc, give greater rights to individuals over how their data is used, put in place significant protections for children and streamline regulators’ ability to crack down on breaches.

When the new rules were first proposed, many executives in Silicon Valley derided them as restrictive and anti-competitive. But in the wake of the scandal over the use of Facebook data by Cambridge Analytica, Europe’s approach to data privacy has started to appear much more relevant.

According to many companies and data protection authorities, GDPR could become the global norm, setting standards for behaviour not just in the EU but in countries where hitherto individuals have had few weapons to defend their rights online.

“Europe was way ahead on this,” Sheryl Sandberg, Facebook’s chief operating officer, admitted last month.

Yet as the final countdown to May 25 begins, cracks in the EU’s vision have appeared. Many businesses are unprepared for the new rules and several countries have failed to pass the necessary legislation to implement them nationally. Serious questions have also been raised about the ability of data protection authorities across the bloc to enforce the new rules adequately.

“Everybody is leaving it until the last conceivable moment, despite the fact there was a two-year deadline,” says Harry Small, head of data protection law at Baker McKenzie. “Quite a lot of companies have not really woken up.”

Even critics acknowledge that GDPR will introduce a new rigour into the messy patchwork of rules governing how our data are treated across Europe. It requires any organisation anywhere in the world that handles the personal information of an EU citizen to be transparent about how it collects, stores and processes it.

Organisations must obtain unambiguous consent to use and retain data, keep it up to date, delete old data and — if they have a large volume of personal information, data subjects and range of items — will have to appoint a data protection officer.

Consumers will have the right to

ask for the information companies hold about them and request that their data is deleted from business databases. The rules forbid companies from processing data on race, ethnicity, political opinions, religious beliefs, trade union membership or sexual orientation without explicit consent.

Ultimately, the impact of GDPR will depend on whether individuals decide to exercise the greater powers the rules give them. They are part of a growing worldwide push for customers to mature into “digital adults”, with both greater control over and responsibility for their own information. Proponents hope that GDPR will help individuals become both more demanding and more aware of their power.

“Data subjects are going to become increasingly aware of their rights, and they’re not going to put up with poor practices by organisations,” says Helen Dixon, Ireland’s data protection commissioner.

But she points to the fact that Facebook’s registered users have increased even while the Cambridge Analytica scandal has raged as an example of the so-called “privacy paradox”, that while people say control over their data matters to them, they have remained, by and large, casual about relinquishing it.

GDPR’s reach is already spreading well beyond the EU. According to Graham Greenleaf, a professor of law and information systems at Australia’s University of New South Wales, 120 countries globally had data protection laws in 2017, but GDPR is probably the broadest and most rigorous.

For a start, any country wanting to sign a trade deal with the EU will have to sign up to respecting GDPR, the first time the EU will formally address the issue of trade and data flows as part of its role negotiating free trade agreements on behalf of its 28 member states.

For many large multinationals, it could make sense to adopt GDPR globally both from a cost and consistency standpoint. Regulators in places such as Hong Kong have based their laws on the EU’s 1995 data protection directive, and have said they intend to update them to reflect GDPR. Yet despite the predictions about global impact, there are big questions about how it will actually be implemented within the EU. Given the scope of the new rules, which run to more than 200 pages, preparing for GDPR has proved both onerous and expensive. Companies in the UK’s FTSE 100 are estimated to have had to spend an average of £15m each to comply with them, according to research by the legal tech firm Axiom. Meanwhile, in the US, the

International Association of Privacy Professionals and EY say members of the Fortune 500 will spend a combined $7.8bn on compliance, an average of almost $16m each.

The survey suggests that Fortune 500 companies have each had to hire on average five full-time dedicated privacy employees — such as data protection officers — as well as another five employees to work part-time on compliance.

For some businesses, GDPR has required them to conduct an audit of what information they hold, but the task of “cleansing” databases of old or duplicate information, and contacting individuals for consents, has often taken months of staff time.

For one small headhunter in London — the sort of business where personal data about potential clients is vital — getting ready for GDPR has involved “not just a database project, but a whole programme of change”.

The company has employed one staff member just to “cleanse” the data on individuals which it holds, and to contact people for consent to continue holding it.

“We used to make the assumption that because someone’s information was in the public domain, like LinkedIn or their own website, that there was no problem with us holding it,” says the person at the agency in charge of implementing the new regulations.

Given the scale of the task, a significant number of organisations will not be ready in time for May 25. A survey of nearly 200 global businesses by SAS, an analytics company, in February found that fewer than half expected to be fully compliant by deadline day.

Smaller companies across the EU and elsewhere are at particular risk. In March, the UK’s Federation of Small Businesses found that fewer than one in 10 small businesses in the UK were fully prepared for GDPR, with just under one in five unaware even of the existence of the new rules.

It is not just organisations which are lagging behind. In January the European Commission said that of the bloc’s 28 member states only Austria and Germany had fully adopted changes to their legislation ahead of the new regulations.

While countries such as the UK are expected to pass the laws at the last minute, Baker McKenzie says five EU countries, Bulgaria, Greece, Malta, Portugal and Romania, have not even published a bill or proper information about how they will implement GDPR. For organisations which remain in breach of the new rules, failure to comply could bear a high cost, with fines of potentially 4 per cent of global turnover or €20m, whichever is the greater. The cost of putting things right, as well as the reputational hit, could be even higher.

nvestors from the US and UK will this week spearhead an attempt to remove half the board of one of India’s biggest healthcare companies, as the battle for control of Fortis Healthcare takes another twist.

Jupiter Asset Management, the London-based investment company, and East Bridge Capital Management in Boston, have called a shareholder meeting for Tuesday at which investors will vote on whether to deselect four board members.

The meeting comes as some of the world’s biggest investors — including the private equity funds TPG and KKR — bid to take over the cash-strapped company.

The board has selected two Indian companies, which submitted a joint bid, as its preferred buyers. But a number of shareholders expressed concerns that members may have been unduly influenced by the controversial Singh brothers, who set up the company but stepped down from the board earlier this year.

Some institutional investors believe the saga is an example of “promoter power”, where founders of Indian companies sometimes ride roughshod over minority shareholders, even if they no longer control the company.

“Promoters have a lot of power and can stuff boards with their cronies,” said one. “That is what seems to have happened here.” The brothers declined to comment on this view.

Shivinder and Malvinder Singh came to international attention 10 years ago when they sold their majority stake in Ranbaxy, the pharmaceuticals company founded by their grandfa-

ther, to Daiichi Sankyo, the Japanese company, for $4.7bn. It was at the time the largest purchase of an Indian-listed company.

That deal quickly fell apart however, and this January, the Delhi High Court ordered the brothers to pay Rs35bn ($514m) compensation to Daiichi.

Following that judgment the Singhs announced they would resign from the boards of their other big companies, Fortis and Religare Enterprises. They subsequently lost control of both companies when they were forced to cede almost all their shares to their bankers, having used them as collateral for loans.

Around the same time the brothers were also placed under investigation for allegedly siphoning off around Rs5bn from Fortis. They said the transactions took place “in the normal course of treasury operations”.

In the past few months, Fortis’ remaining board members have been examining bids from around the world to take over the company, which owns dozens of hospitals across India.

They accepted an initial bid from Manipal Hospitals, another Indian chain of hospitals, to take over Fortis’ hospitals and invest Rs39bn in the merged group. Manipal is being backed by TPG. However, following complaints by minority shareholders, the bidding was subsequently opened, with five groups showing an interest. They are IHH, the Malaysian healthcare group; Radiant, the Indian healthcare company backed by KKR; Fosun, the Chinese conglomerate; Manipal-TPG; and Munjal-Burman, a joint bid by two of Delhi’s most established business families.

France and Germany to press ahead with eurozone reform Diplomats fear that economic policy could be major issue between Brussels and Italy

JIM BRUNSDEN, ANNE-SYLVAINE CHASSANY AND GUY CHAZAN

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rance and Germany have insisted that they will press ahead with negotiations on strengthening the eurozone despite the emergence of a Eurosceptic coalition in Italy, with French president Emmanuel Macron warning that the EU faces a “moment of truth” at a summit next month that will show whether it is capable of meaningful reform.

EU diplomats fear that economic policy could prove to be one of the major battlegrounds between Brussels and an Italian government led by the Five Star Movement and the far-right League, with the parties’ pledge to overhaul EU fiscal rules serving to deepen German misgivings about more risk sharing among members of the currency bloc.

But they said that the political impetus from Paris meant that work would continue on a package of measures to be agreed on in June, even if it is expected that the situation in Rome will reinforce Germany’s determination to push some controversial topics to the margins and to link further integration to progress by Italy and others in tackling problems in their banking systems.

Berlin has already made clear that plans championed by much of southern Europe for a common scheme to guarantee bank deposits, known as EDIS, can only be seen as a long-term aim and that the reduction of stockpiles of nonperforming loans in Italian banks would be one prerequisite.

It is a stance strongly shared by the Netherlands and a number of other northern members of the currency bloc.

“Whatever happens, EDIS is dead, at least for the foreseeable future,” one adviser from Angela Merkel’s CDU party said.

“The common backstop will come, but EDIS won’t. The chancellery, the finance ministry, the CDU/CSU parliamentary group — none of them want it. You can’t sell it to German voters.”

Negotiations are planned over the coming weeks to address difficult topics such as Germany’s conditions for when the euro area bailout fund, the European Stability Mechanism, could provide emergency money during banking crises.

The Eurogroup Working Group, a body which brings together senior finance ministry officials from across the currency bloc, held several hours of talks last week on the basis of slides, seen by the Financial Times, setting out what the June package might look like.

According to the slides, drafted by EWG officials, leaders would reach a “decision in principle” in June that the ESM would become the bank backstop, able to offer a credit line of up to €60bn.

Leaders would also settle the “key principles” of how this would work in practice. There would also be a “decision on when to start political discussions” on EDIS. In tandem, the summit would sign off a range of risk reduction measures, including on NPLs. Further milestones would be agreed for December.

EU finance ministers are set to discuss the reform agenda at a meeting in Brussels on Thursday.

“To further strengthen the euro area, all sides need to be pragmatic and move to reach a deal,” Valdis Dombrovskis, the European Commission vice-president in charge of the euro, said.

A12 NEWS

BUSINESS DAY

FG to float Niger Delta Development Bank to facilitate infrastructure building TONY AILEMEN, ABUJA

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ederal government is planning to set up the Niger Delta Development Bank (NDDB) to ease project funding in the region.

BusinessDay gathered from Victor Ndoma-Egba, chairman, Niger Delta Development Commission (NDDC) in Abuja, that the bank became necessary following intractable funding challenges for infrastructure development in the oil rich Niger Delta.

Ndoma-Egba led the NDDC board tomeetwith Vice President Yemi Osinbajo at the Presidential Villa, weekend after which he

spoke with BusinessDay. The NDDC was created as an intervention agency in response to the development challenges in the Niger Delta region, which contributes bulk of the nation’s foreign exchange earnings from its rich oil resources.

Several projects embarked upon by the Federal Government including the Presidential Amnesty Programme, the Ogoni Clean Up project, estimated to cost over $10 billion and the East-West Road, have either been abandoned or encountered slow pace of implementation.

President Muhammadu Buhari had while presenting the 2018 budget to the National Assembly said government was

partnering the Nigeria LNG Limited to construct the Bonny-Bodo Road that had remained abandoned for several years now.

The non-implementation of the Itakpe-Ajaokuta-Warri rail line has also frustrated efforts to link the region with rail transportation system, having been abandoned for over 17 years.

The sum of N53.89 billion was allocated to Niger Delta Ministry, while N71.20 billion was allocated to the NDDC, in the 2018 budget, representing about 50 percent and 18 percent increase, respectively, over the 2017 budget.

Government had allocated N34.20 billion and N61 billion to Niger Delta Ministry and the

NDDC, in 2017, respectively.

Ndoma-Egba, who noted that funding of NDDC projects had always been problematic due to shortfalls, especially from the Federal Government’s contribution, said the Board was looking beyond such sources of funding to enhance infrastructure development in the region.

“For once, the Federal Government and the NDDC are sitting together to reconcile what is due and what is outstanding.

So, we believe that from the shortfalls, we would be better off funded.

“But we are also looking beyond the traditional methods of funding the Federal Government’s budget and the NDDC

budget. As you know, we are already working with the NDDB that will take over the issue of funding beyond the oil and beyond particular boards,” he said.

Speaking on the bank’s take off, he posited that the bank would come on stream before the end of December 2018.

“We have timelines and we are strictly adhering to the timelines. We believe that by the end of this year, we should take off the ground,” he said.

Managing director of the NDDC, Nsima Ekere, also made a presentation of planned initiative to introduce digital learning in primary and secondary schools in the Niger Delta, at the meeting with the Vice President.

Trading maintains negative trend on NSE with 0.44% loss

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ndicators of the performance of the Nigerian Stock Exchange (NSE) declined further on Friday with a loss of 0.44 per cent.

The News Agency of Nigeria reports that profit taking continued with the All-Share Index losing 178.96 points or 0.44 percent to close at 40,472.45 compared with 40,651.41 recorded on Thursday.

Similarly, the market capitalisation dipped by N65 billion or 0.44 percent to close at N14.660 trillion in contrast with N14.725 trillion on Thursday.

Total topped the losers’ chart, dropping by N9.80 to close at N212 per share. Mobil Oil trailed with a loss of N7 to close at N181, while Dangote Cement was down by N3 to close at N245 per share.

Unilever depreciated by N2.35 to close at N50, while Cement Company of Northern Nigeria shed N2.10 to close at N24 per share. On the other hand, Betaglass led the gainers’ table for the day, growing by N4.15 to close at N87.35 per share.

Stanbic IBTC Group followed with a gain of 95k to close at N48.95, while Oando gained 70k to close at N8.25 per share. United Bank for Africa appreciated by 35k to close at N11.45, while Fidson Healthcare increased by 27k to N5.76 per share.

Guaranty Trust Bank was the most active with an exchanging 62.86 million shares worth N2.77 billion. It was followed by Skye Bank having accounted for 31.61 million shares valued at N23.78 million, while Fidelity Bank traded 30.34 million shares worth N65.71 million.

Sovereign Trust insurance exchanged 27.11 million shares valued at N7.05 million, while Access Bank transacted 25.02 million shares valued at N272.89 million.

In all, the volume of shares traded dropped by 17.40 per cent, while the value depreciated by 32.89 percent.

Consequently, a total of 350.55 million shares valued at N5.08 billion were exchanged by investors in 3,973 deals.

This was against a turnover of 424.37 million worth N7.57 billion traded in 3,502 deals on Thursday.

L-R: Hassan Usman, MD/CEO, Jaiz Bank Plc; Umar Abdul-Mutallab, chairman, and Rukayat Salaudeen, company secretary/legal adviser, during the 6th annual general meeting of the bank in Abuja.

Pic by Tunde Adeniyi.

AMCON takes over Stella Oduah’s assets

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ustice M.S. Hassan of the FederalHighCourtLagosDivision has granted an injunction against Sea Petroleum Oil and GasLimited,whosechiefpromoter isformerministerofaviation,Stella Oduah-Ogiemwonyi, on the application of Asset Management Corporation of Nigeria (AMCON).

Oduah-Ogiemwonyi, a serving member of the Senate, has been having a running battle with AMCON over her inability to settle herhugedebtofnearlyN20billion.

AMCON purchased the Eligible Bank Assets (EBAs) of Sea PetroleumandGasLimitedfromUnion Bank plc sometime in 2012.

But despite the overtures and genuine efforts made by AMCON to reach an amicable settlement, the senator and her co-promoters have remained recalcitrant.

Having exhausted all avenues of peaceful resolution of the humongous debt, AMCON had no other choice than to refer the matter to court. The order also affects Oduah’s other business interests for which AMCON has since appointed Moyosore Jubril Onigbanjo, as receiver over the assetsofOduah-Ogiemwonyi;Sea Petroleum Oil and Gas Limited; Sea Petroleum and Gas FZE, as well as Star Tourism and Hotels Limited.

The court also ordered the freezing of the funds of Sea Petroleum and Gas Limited and its affiliated companies and principal

Monday 21 May 2018

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promoters held anywhere by any entity or persons in Nigeria; authorised AMCON and its receiver, MoyosoreJubrilOnigbanjo,totake over all assets pledged as collateral for the facility by Sea Petroleum Oil and Gas Limited.

Justice Hassan specifically ordered Sea Petroleum Oil and Gas Limited and its affiliated companies to hand over the company’s business, which sits on over 9,000 square kilometres of land in the fastest developing area of Lagos State, along the Lekki-Epe Express Way; two tank farms of 500 metric tons capacity; a property at Maiyegun Tourism Zone, Lekki PeninsulaScheme11,LagosIsland,anda filling station complex at kilometre 14, Lekki Epe Expressway, Ikota, Lagos State.

The court order also listed a host of other assets across the country including Plot 2, block 12C, Babafemi Osapa Crescent Lekki, Lagos State; Block 5, house 4AMobolajiJohnsonEstate,Lekki, Lagos State; Office/filling station at Jakande, Lekki, Lagos State; Office complex 1,2 and 3 km 14, LekkiepeExpressway,Ikota,LagosState; Filing station Complex at km 14, LekkiEpeExpressway,IkotaLagos State; Staff residential Quarters, Ikota Lagos State; E25-E36, Gat Oboh Drive, Millennium Estate, Oniru, Lagos State and F3-F5, SPG Road, Millennium Estate, Oniru, Lagos State.

The rest include, SPG Agungi

2 Lekki Lagos State; Office/Filling station complex at Funmilayo Ransome Kuti, FCT, Abuja; Gas plant at Karu, FCT, Abuja; Filing station Complex, Lugbe, FCT Abuja and Agriculture Farm at Kuje, FCT Abuja.

Incompliancewiththeorderof the court, AMCON through its Receiver,MoyosoreJubrilOnigbanjo, SAN, at about 11:00am on Friday May 18, 2018, simultaneously tookpossessionoftheassetsofSea Petroleum & Gas Limited and its affiliated companies.

The Court in granting the injunction ordered the Inspector GeneralofPolice,AssistantInspectors General of Police, and the Commissioner of Police in charge ofLagosState,theirdeputiesandall otherpoliceofficersunderthemto assist Moyosore Jubril Onigbanjo, the Receiver and the Bailiffs of the Federal High Court in the enforcement of the orders.

AMCON under Ahmed Kuru, CEO, has maintained that there will be no sacred cows in its bid to recoverthehugedebtsinthehands of a few Nigerians. To deal with the situation however, AMCON has in recent times increased the tempo ofitsrecoveryactivitiesusingfirmer negotiation strategies as well as utilising the special enforcement powers vested by the AMCON Act to compel some of its recalcitrant debtors, especially those that are politically exposed and business heavyweights to repay their debts.

WHO raises Ebola risk to ‘very high’ after virus reaches Congo city

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bola outbreak in Congo poses a greater danger to the Central African country and the region than previously assumed, according to the World Health Organisation (WHO).

The recent confirmation of a case in Mbandaka, a large city that straddles national and international transport routes, had increased the risk of the virus spreading further, the UN health agency said on Friday in Geneva.

“WHO has, therefore, revised the assessment of public health risk to very high at the national level and high at the regional level,’’ it said in a statement.

The global significance of this outbreak that has killed 14 people, so far is being discussed at a WHO emergency meeting and will be announced later on Friday.

The WHO has previously said that the chance of a global outbreak is low. In Congo, the Health Ministry announced that the number of confirmed Ebola cases in the country has risen from three to 14.

“In total since the start of the epidemic,therehavebeen45cases of haemorrhagic fever, including 10 suspected cases, 21 probable cases and 14 confirmed cases,’ the ministry said late Thursday.

While one person was confirmed dead from the virus, 25 people are suspected to have died from it, the ministry said.

One of the most contagious viral diseases known, Ebola’s symptoms are extraordinarily painful and include severe vomiting, diarrhoea, fever, impaired kidney and liver function as well as internal and external bleeding.

Varsities, alumni collaboration to strengthen investment in infrastructure, capacity KELECHI EWUZIE

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ndustry experts in the education sector insist that continuouscollaborationbetweenuniversities and alumni associations will tackle perennial challenges of underfunding and drive the neededinvestmenttoimproveinfrastructure and human capacity.

They observe that involvement of the alumni of Nigeria’s public varsities will assist in meeting infrastructure and funding needs of their alma mata.

Ben Okoronkwo, national president, University of Nigeria Alumni Association (UNAA), said thriving universities across the country attained their present statuses owing largely to the contributions of their alumni in infrastructural development, endowments and funding.

Okoronkwo stated this at the association’s 97th National Executive Council (NEC) meeting in Lagos, adding that the association was putting in place measure aimed at eliminating the communication gap that had hitherto existed between the alumni and the university community.

He said this regular interface wouldmakeforbetterunderstanding and harmonious relationship leading to peace, progress and developments at the alma mata.

According to Okoronkwo, “One of the long term strategic plans of the association is to establish an Endowment Fund tagged

project 2030. This will begin with the assembling of a comprehensive data base of all Alumni of the University in collaboration with the University administration.”

He said the executive of the association would make conceited efforts towards reaching out to organisation,corporations,donor agencies and even government organs. High net worth individuals and notable philanthropic individuals/organisationswillalso be approached to undertake and sponsor developmental projects at the alma mata.

He further assured that the Finance and Fund Raising Standing Committee will work relentlessly towards raising funds to enable the association carry out the foundation stone laying ceremony of the Alumni Complex during the Founders’ Day/Home Coming in October, 2018.

Ayodeji Olukoju, professor of History and Strategic Studies, University of Lagos while deliveringthekeynoteaddressontherole of the alumni in the Alma-mater of the 21st Century challenged past students who display insensitive attitude to the needs of their former schools to wake up to give back to their schools to enrich the standards of education similar to that which they enjoyed.

Pat Utomi, a distinguished alumnusoftheuniversitycharged fellow alumni to keep the flag flying and to always sustain the alumni movement.

BUSINESS DAY

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NEWS YOU CAN TRUST I MONDAY 21 MAY 2018

Opinion Nigeria, soft target for Trump’s bullying on trade GLOBAL PERSPECTIVES

OLU FASAN Dr. Fasan, a London-based lawyer and political economist, is a Visiting Fellow at the London School of Economics. e-mail: o.fasan@lse.ac.uk, twitter account: @olu_fasan

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othing has caused more tension in relations between Nigeria and the United States than America’s refusal to sell arms to Nigeria.

This dates to the Nigerian civil war. As General Yakubu Gowon, Nigeria’s war-time leader, once recalled, the US refused to sell fighter jets to Nigeria during the civil war, “even as they were shipping fighter jets and loads of ammunition to Zaire”. In 2014, a diplomatic row broke out following the US’s refusal to sell military hardware to Nigeria to fight its war against the Boko Haram insurgents. In protest, the Jonathan administration cancelled a military training programme with the US, and Gowon quipped: “What sort of friends are they?”

But the then US Ambassador to Nigeria, James Entwistle, explained America’s position. He said that “Before we share equipment with any country, we look at a couple of things. Does it make sense in terms of the country’s needs?

The second thing we look at is the country’s human rights situation”. Given that Nigeria is often accused of brazen and gross human rights abuses, it’s understandable why, based on Entwistle’s explanation, successive US governments refused to sell military equipment to Nigeria. For instance, despite President Obama’s cordial relations with President Buhari, he did not sell arms to the Buhari government, even though the US supplied arms to countries such as Chad, Niger and Mali, according to Buhari’s spokesman, Garba Shehu, who recently claimed that “Obama failed Nigeria”.

Well, all that is now changing under President Donald Trump, America’s most idiosyncratic leader. During President Buhari’s recent visit to the White House, President Trump announced that the US would sell 12 A-Super Tucano aircraft to Nigeria. Although the US State Department published a devastating Human Rights report about Nigeria in April this year, President Trump never dwelled on that, contrary to what his predecessors would have done. He said: “They (Nigeria) were not allowed to buy helicopters in our country for various reasons, which, frankly, were not good reasons”, adding: “I

worked that out; now they can get them and get them very quickly”. With a salesman’s pitch, he said: “We make the best military equipment in the world”! In Trump’s world, it’s all about strategic and commercial gain! America First!

What’s more, with President Trump, every encounter must be a win. As someone recently put it in the Financial Times, “Mr Trump must not just win – he must be seen to be winning”. And so, after announcing the sale of the military helicopters – an obvious “favour” to Nigeria – Trump piled on the pressure on Buhari. First, it was on America’s bid for the 2026 World Cup. President Trump said he wanted African countries to support the US bid, and then added menacingly: “We will be watching very closely”. Trump doesn’t do diplomatic schmoozing; he makes demands, he issues threats!

After laying down the marker on the World Cup bid, President Trump turned to the security situation in Nigeria. He condemned the burning of churches and the killing of Christians by Fulani herdsmen and vowed: “We gonna be working on that problem, and working on that problem very, very hard, because we can’t allow that to happen”. As President Trump said recently, “When I make promises, I keep them”. So, expect some manifestation of power-based politics there!

To some, this is an unacceptable interference in Nigeria’s

threats have raised the embers of trade wars. In April this year, President Trump threatened to impose 25% tariffs on imported steel products and 10% on aluminium, which would cost its trade partners a loss of $14.2 billion, and harm American consumers. He also threatened to impose high tariffs on imported cars and agricultural products from the EU and demanded that China reduce its trade surplus with the US by $200 billion over a period of two years.

Several countries are livid, accusing President Trump of acting like a bully. The EU’s trade commissioner Cecilia Malmstrom put it this way: “Recently, we have seen how trade is used as a weapon to threaten and intimidate us.

But we are not afraid, we will stand up to the bullies”. Unsurprisingly, China takes the same view and stance!

This is the strategic context within which to situate President Trump’s toughtalking on US-Nigeria trade during President Buhari’s recent visit to the US. Trump reminded Buhari that the US gives Nigeria “well over $1 billion in aid every year” and said Nigeria must take down its trade barriers. He said it’s very important that “we are able to sell our great agricultural products into Nigeria”, adding threateningly: “And that will happen, we are going to be working on that right away. Okay?” Trump stressed the amount of aid the US gives to Nigeria – “it’s so large you wouldn’t even believe it” – and the trade

Interestingly, but sadly, President Trump and President Buhari have the same protectionist worldview.

They are both mercantilist; they believe that exports are good, but imports are bad! But Nigeria and America should embrace trade and economic liberalism and open their markets more to each other’s trade. internal affairs. But, let’s face it, if Buhari won’t take the initiative to stop the appalling killings and violence by the Fulani herdsmen, why would anyone object to President Trump pressuring the Nigerian government to do the right things? I won’t.

But, for me, it’s a different matter when we come to trade, something on which President Trump has acquired global notoriety for bullying. He said recently that “Trade wars are good and easy to win”. And his tariff

imbalance between the two countries and demanded that the US should be treated in a “reciprocal fashion”.

Nigeria is an unfair target of President Trump’s bullying tactics on trade. This is so for two reasons. First, aid is aid, and should never be tied or used as a bargaining chip to secure trade advantage. By constantly referring to how much the US gives to Nigeria in aid and then citing that as a reason why Nigeria should open its market to US exports, President Trump shows little

understanding of the role of aid. This, of course, is not surprising given Trump’s election campaign promise to cut international aid across the board, and the fact that the US is one of the major developed countries that have failed to meet the UN aid spending target of 0.7% of GDP. But, let’s be clear, aid is to support development not to extract commercial gain!

Second, the trajectory of US-Nigeria trade over the past decades shows a drastic reduction in Nigeria’s trade surplus with the US. In 2016, Nigeria exported goods worth $4.2bn to the US and imported goods worth $1.9bn; so, the US had a trade deficit of $2.5bn. But it’s different with trade in services. Nigeria exported services worth only $411 million in 2016, but imported services worth $2.5 billion, putting the US services trade surplus with Nigeria at $2.1 billion. Thus, in 2016, the US goods and services trade deficit with Nigeria was a paltry $216m. When the US talks about its trade deficits, it focuses only on goods trade not on services trade where it has huge surpluses with many countries.

Yet, even with trade in goods, Nigeria’s $4.2 billion exports to the US in 2016 marked a drastic drop from the £38 billion worth of goods it exported in 2008 or even the $33 billion in 2011. The main reason for the huge fall in Nigeria’s goods exports to the US is, of course, because of the US’s near-total refusal to buy Nigeria’s oil. The second reason is Nigeria’s failure to benefit from the opportunities provided by the African Growth and Opportunity Act (AGOA) to export goods into the US. Under AGOA, Nigeria could export 6,500 products duty-free into the US market.

Yet, Nigeria is Africa’s least beneficiary of AGOA. For instance, Nigeria exported only $9 million worth of agricultural products into the US in 2017.

Given that the two-way trade between Nigeria and the US is so small, Nigeria is certainly an unfair target for President Trump’s bullying on trade. Interestingly, but sadly, President Trump and President Buhari have the same protectionist worldview. They are both mercantilist ; they believe that exports are good, but imports are bad! But Nigeria and America should embrace trade and economic liberalism and open their markets more to each other’s trade. Nigeria should ease access to American agricultural exports, and the U S should help Niger ia address the quality infrastructure that prevents it from benefiting from the AGOA. This is not altruistic, but rational. Trade is a two-way street. Nigeria and America can’t expand trade with each other behind protectionist walls!

fivethings for your new week

Fascinating business facts $2.7bn

Whichever way you look at it, Ethiopian airlines which was established in 1945 breaking records in the air and on the ground. Revenues ($2.7bn) and profitability ($233m) are looking up with passenger numbers topping 9 million last year. Now, the state owned airline hopes to raise its fleet numbers to 150 planes by 2025 with plans for additional 13 Boeing 787 jets and six more Airbus A350 planes.

$150,000

One of China’s biggest state-owned banks is asking its wealthy clients to pay $150,000 for a ticket to attend a Republican party fundraiser in the US and meet President Donald Trump, according to an invitation seen by the Financial Times. The invite from the private banking unit of China Construction Bank, the country’s second-largest state-owned lender, offered participants the chance to take photos with Mr Trump and mingle with US political and business figures. It also said that representatives from ZTE Group, the Chinese telecom company that is facing crippling US sanctions, would attend the event, to be held in Dallas.

25.5%

Argentina severed ties with the International Monetary Fund 12 years ago, swearing never to go back again — which is why President Mauricio Macri’s decision to seek a new loan from the fund shocked his nation.

Faced with a run on Argentina’s currency and inflation running at 25.5%, Mr Macri alighted on the move as a forceful — if controversial — answer to investors losing confidence in his plan to bring back order gradually to Argentina’s economy. What are the difficulties he is trying to address? A three-week rout of Argentina’s peso has wiped out about a fifth of its value against the dollar, making it the worst performing emerging market currency this year.

$1.3bn

Blackstone, the world’s largest buyout group, has agreed to sell its remaining 5.8 per cent stake in Hilton Worldwide, bringing to an end 11 years of ownership that proved one of the most profitable private equity transactions. The hotel chain’s largest shareholder will sell 15.8m shares, according to a statement by Hilton on Friday. The total value of the shares is estimated at roughly $1.3bn, based on Hilton’s closing price of $83.30 on Thursday. Blackstone took Hilton private in October 2007 led by Jon Gray, its star dealmaker who was recently promoted president of the firm, in a transaction worth $26bn.

$15bn

Anadarko Petroleum is seeking to raise a record $14-$15 billion from banks and export credit agencies for its huge liquefied natural gas (LNG) project in Mozambique.

Fast-growing gas demand from China and Southeast Asia is reassuring export project developers sitting on huge untapped gas discoveries in Mozambique and elsewhere that the market cycle is turning after three years of low prices. The full amount would be the largest loan ever in the LNG sector. French bank Societe Generale, the financial adviser on the $20 billion Mozambique LNG project, has already received interest for a combined $12 billion in cover and direct lending from export credit agencies (ECAs) in China, South Africa, Italy and Japan, one of the sources said.

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