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news you can trust I **TUESDAY 23 OCTOBER 2018 I vol. 15, no 167 I N300

Amosun accuses Tinubu, Osoba of complicity in ‘fraudulent’ Ogun APC primaries ... as Supreme Court voids Rivers APC congresses RAZAQ AYINLA, Abeokuta, & Felix Omohomhion, Abuja

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Indonesia holds lessons for Nigeria’s economic growth – John Hopkins Prof

ONYINYE NWACHUKWU, LOLADE AKINMURELE, BALA AUGIE, HARRISON EDEH & ENDURANCE OKAFOR

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eter Lewis, a professor at the School of Advanced International Studies at the John Hopkins University, has advised Nigeria to learn from

Indonesia, a country that made an identical start to life as Nigeria back in 1960.

Both countries have since parted ways with Indonesia boasting of a larger economy, attracting more Foreign Direct Investment, reducing poverty and reducing its reliance on oil.

South East Asia’s largest econ-

omy was worth a trillion dollars in 2017 and grew 5 percent in 2017, compared to Nigeria’s 0.8 percent growth, according to World Bank data.

Both countries are unrecognisable from 1960 with Nigeria still on the cusp of an economic break out that has stalled for many years despite obvious

potentials, while Indonesia has flourished.

Lewis, who made a presentation at the ongoing 24th Nigerian Economic Summit in Abuja, said while Indonesia had focused on macro-economic growth, Nigeria took the path of politics Continues on page 34

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overnor Ibikunle Amosun of Ogun State has accused the duo of Bola Tinubu and Segun Osoba, both national leaders of All Progressives Congress (APC), of instigating the fraudulent APC governorship primaries that produced Dapo Abiodun as the Ogun State governorship candidate of the party.

Amosun made the allegations on Monday shortly after swearing-in of new chief judge of the state, Justice Mosunmola Dipeolu at State Executive Continues on page 34

Inside US push for Japan’s LNG market may leave P. 2 Nigeria stranded

L-R: Udoma Udo Udoma, minister, budget and planning; Ngarie Woods, dean of Blavatnik School of Government, University of Oxford; Vice President Yemi Osinbajo; Zainab Ahmed, minister of finance, and Asue Ighodalo, chairman, Nigerian Economic Summit Group (NESG), during the opening ceremony of the 24th Nigerian Economic Summit, theme “Poverty to Prosperity: Making Government and Institution Work” held in Transcorp Hilton in Abuja, yesterday. Pic by Tunde Adeniyi

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States with higher GDP record lower scores on Ease of Doing Business DIPO OLADEHINDE & ABIMBOLA AKEREDOLU

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igerian states with larger economies had lower scores in the World Bank Ease of Doing business rankings compared to states with smaller GDPs, a report from the World Bank showed Friday.

The World Bank Ease of Doing Business ranking measures aspects of regulation that enable or hinder entrepreneurs in starting, operating or expanding a business. The report covers four Doing Business indicators, which include, starting a business, dealing with construction permits, registering property and enforcing contracts.

According to the report, Kaduna State, which had the seventh largest GDP of N2.69 trillion with contribution from the services sector of N2 billion, recorded the highest ranking in the World Bank Ease of Doing business with DTF score of 65.97 percent from 54.76 in 2014.

The Distance To Frontier score (DTF) is the average score for the four indicators measured in the report showing how far a location is from the best performance achieved by any economy on each Doing Business indicator ranging from 0 to 100, with 100 representing the frontier of best practices (the higher the score, the better).

Jigawa State came second in ease of doing business ranking with DTF of 64.36 percent from 62.20 percent in 2014, while Kano State with the fifth largest GDP of N2.91 trillion with major contribution from services sector was the third highest with a DTF score of 63.01 percent from 58.78 percent in 2014.

The report said the more populous cities (over half a million people), as well as states with a larger economy as measured by GDP, tend to perform worse on the dealing with construction permits indicator, as obtaining construction permits tends to be more costly and take longer time. In the starting a business indicator, the results show the opposite performance tends to be better in larger cities.

“This may not be surprising since most of the recent improvements in business start-up have been implemented in larger cities first, starting with FCT Abuja, Lagos and Kano,” World Bank Ease of Doing Business report said.

According to the ranking, Katsina State had a DTF score of 62.68 percent in 2018 compared to 59.31 percent in 2014; Niger State had DTF

score of 60.87 percent in 2018 compared to 55.65 percent in 2014; Bauchi had DTF score of 60.60 percent in 2018 compared to 56.85 percent in 2014, while Yobe, Abuja, Gombe and Benue had 60.02 percent, 59.85 percent, 59.58 percent, and 58.21 percent, respectively.

Ogun with the sixth largest GDP of N2.81trillion with contribution from services sector of N1 billion had a DTF of 57.97 percent in 2018 from 55.01 in 2014, while Osun with GDP of N1.47 trillion or $4.8 billion) with contributions from services sector of N822 million in 2017 had Ease of Doing business ranking of DTF of 55.07 percent.

Lagos, Kwara, Oyo with GDP of N2.50 trillion and Adamawa state had the lowest Ease of Doing business ranking of 54.90 percent, 54.68 percent, 54.41 percent and 54.34 percent, respectively.

Akwa-Ibom, the largest economy of the 11 states with a GDP size of N5.14 trillion ($16.8bn) with major contributions coming from Industry sector of N3 billion in 2017 had an Ease of Doing business ranking of 55.66 percent in 2018 from 53.41 percent in 2014.

Rivers State had the second largest economy of the pack, with a GDP of N5.11 trillion ($16.7bn with major contribution coming from Industry sector of N2billion in 2017 had an Ease of Doing business ranking of 50.58 percent in 2018.

Oil-rich Delta state’s GDP of $13.26 billion or N4.06 trillion with major contributions coming from industry sector of N2billion in 2017 had an Ease of Doing business of 54.97 percent in 2018 from 55.07 in 2014 while Bayelsa State with fourth largest GDP of N3.15 trillion mainly from industry sector of N2billion had an Ease of doing Business ranking of 57.76 percent in 2018 from 54.55 percent in 2014.

Kano state, with the fifth biggest GDP of N2.91 trillion with mainly contribution from services sector of N2 billion, while Ogun State with a GDP of N2.81trillion mainly from contribution from the services sector of N1billion had an Ease of doing Business ranking of 63.01 percent in 2018 from 58.78 percent.

The World Bank noted that while there were other important areas that can shape the business environment, these four areas were selected for benchmarking in collaboration with the Federal and State governments.

Continues on page 34

L-R: Yahaya Zekeri, former non-executive director, United Bank for Africa (UBA) Group, and wife, Clara; Jaafaru Paki, former non-executive director; Tony Elumelu, group chairman; Rose Okwechime, former non-executive director; Kennedy Uzoka, GMD/CEO; Mercy Olumide; Adekunle Olumide, former non-executive director, and Victor Osadolor, deputy managing director, during the send-forth cocktail and dinner held by the bank for the former non-executive directors, held at Transcorp Hilton, Abuja.

US push for Japan’s LNG market may leave Nigeria stranded ISAAC ANYAOGU

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he United States is working with Japan and other Asian countries to build facilities for Liquefied Natural Gas (LNG) exports and improve their competitiveness, a move that further threatens Nigeria’s market share.

At the annual LNG ProducerConsumer Conference in Nagoya, Japan, yesterday, Dan Brouillette, US deputy secretary of Energy, told reporters in Tokyo that the US was working with Japan and others to build facilities for US LNG exports and improve their energy security.

Hiroshige Seko, Japanese minister of economy, trade and industry, promised to expand Japan’s support for projects jointly sponsored by private enterprise and the government to supply LNG and build infrastructure in Asia.

Seko also said Japan was seeking to create a 50 million ton LNG market in the region, and was already cooperating with the US. The US is wooing Japanese companies to invest in her power plants and gas liquefaction export facilities to increase its LNG production capacity by 60 percent in 2020.

US exports of the LNG reached 1.94 billion cubic feet per day (about 708Bcfpd) in 2017, up from 0.5Bcfpd (182.5Bcfpd) in 2016, according to data from the United States Energy Information Agency (USEIA).

Nigeria does not have the resources to build these facilities in Japan and has struggled to complete the construction of LNG Train 7.

Experts say it should look inwards.

“The demand for gas within the Nigerian energy sector has risen significantly. Channelling resources to developing strategies for protection of gas pipelines and supply for local consumption would provide more stability for the sector, which would invariably trickle down to the development of the economy,” Ayodele Oni, energy lawyer and partner at Bloomfield law firm, said.

Nigeria currently exports 22 million tons per annum (mpta) of LNG and wishes to ramp up production by 30mpta. NLNG’s revenues plunged to $4.723 billion last year, the lowest in seven years due slump in oil prices and a glut in the LNG market.

“Nigeria should focus on LNG for domestic downstream applications such as fuel for heavy duty vehicles, buses and taxis, other applications are for shipping and rail, agriculture,

power, gas source,” Olufola Wusu, an energy lawyer-based in Lagos, counselled in an interview.

However, the need for gas locally is seeing a spike. Since 2007, Nigeria’s LPG consumption has grown from 70,000MT per annum to over 600,000MT per annum in 2016.

Fifty percent of this supply has come from the NLNG, according to the company’s record and marketers are filling the gap by ramping up importation from neighbouring countries.

“The domestic market for gas is experiencing severe energy shortage with power plants often going offline due to gas supply constraints, this is why actions are required,” Wusu said.

With key LNG projects such as Olokola LNG, Brass LNG and the NLNG Train 7 unable to reach final investment decision, Tony Attah, managing director and chief executive officer, NLNG Limited has warned that Nigeria is losing its competitive advantage in the global LNG market.

It looks to get worse. A rash of new LNG projects from around the world including Australia, Qatar, Canada and Mozambique will leave global LNG market in a glut by 2020 according to the International Energy Association.

Nigeria issues first gold refining licence KEHINDE AKINTOLA, Abuja

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he Federal Government has issued its first gold mining licence, Udoma Udo Udoma, minister of budget and national planning, said yesterday at the opening of the 24th Nigerian Economic Summit holding in Abuja.

“I am happy to report that the first gold refining licence has been issued to a company called Kian Smith Limited,” Udoma said.

He said the issuance of the licence was facilitated through the Malaysian styled focus labs that the Federal Government initiated across the country earlier this year as part of the implementation process for the Economic Growth Recovery and Plan (EGRP).

Kian Smith was one of the companies that participated in the labs.

The minister also disclosed that the Federal Government was finalising modalities to purchase gold from local refineries via a Federal Gold Reserve Scheme.

“This accelerated development of the National Gold Development Policy by the Ministry of Mines and Steel Development, and the progress recorded in implementing the Federal Gold Reserve Scheme by the Central Bank of Nigeria, are direct solutions to issues presented by investors at the ERGP Focus Labs,” Udoma said.

He explained that the Focus Labs were conducted in three broad streams, namely: Agriculture and Transportation; Manufacturing and Processing as well as Power and Gas, in a bid to address the bureaucratic issues associated with governance.

Through the labs, he said the government had also been able to facilitate the issuance of approvals required to establish a multi-million-dollar petrochemical company that would create over 20,000 direct and indirect jobs for Nigerians.

“We have set up an ERGP Delivery Unit in our Ministry staffed by four Senior Special Assistants to the President. The Unit is working closely with the Ministerial Delivery units set up in each of the six ministries to deliver on the Lab targets. There is also a Central Steering Committee whose task is to promptly resolve high-level issues that may arise from this process.

“As part of the Lab process we were able to assist Brass Fertilizer and Petrochemical Development Company to obtain an expedited

issuance of various approvals that were required by its financiers from multiple government agencies. Brass Fertilizer is a large, multi-billion-dollar petrochemical plant positioned to be one of the largest consumers of gas in the country within the next five years. If this project succeeds it could create up to 20,000 direct and indirect jobs.”

He also said another outcome of the ERGP Focus Labs was the accelerated development of a National Gold Development Policy and the establishment of a Federal Gold Reserve Scheme in Nigeria.

The minister also reiterated President Muhammadu Buhari’s administration resolve towards working closely with businesses to deepen their investments in the agriculture, power, manufacturing, solid minerals and services sectors and support

the private sector to become the engine of national growth and development.

He said the four-year strategic plan for civil service reform chaired

by Head of Service had been set up and was geared toward innovation in service, institutionalising performance management system and citizen oriented service delivery.

“In addition, President Buhari has introduced a number of Executive Orders to improve service delivery and enhance transparency. These include: an Executive Order on promoting procurement by government agencies; an Executive Order on improving efficiency in the business environment and another Executive Order on the promotion of Nigerian content in contract, in science, engineering and technology,” he said.

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AIB releases four air accident reports, issues safety recommendations to FAAN, NCAA IFEOMA OKEKE

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he Accident Investigation Bureau (AIB) has released four accident and serious incident reports, which occurred in the country between July 2004 and August 2015.

This is as Akin Olateru, the Commissioner of AIB, said the current administration had achieved 52.1 percent on publication of accident and serious incident reports and 47.4 percent of safety recommendations since coming onboard in January 2017.

Olateru in a press briefing with aviation journalists on Monday at Safety House, corporate headquarters of AIB at the Murtala Muhammed International Airport (MMIA), Lagos, observed that some of the accidents and serious incidents would had been averted if parties involved had adhered to safety policies in the industry.

The reports released by AIB included the accident involving Bristow Helicopters (Nigeria) Limited Sikorsky S-76C+ helicopters with the registration number 5N-BGD, which occured on August 12, 2015 at the Oworonshoki area of Lagos.

The agency also released the accident report on Pan African Airlines Nigeria Ltd Bell 412 EP Helicopter with the registration number 5NBDZ, which crashed near SEDCO Energy Platform on July 26, 2004 a few minutes after takeoff.

Also released were reports on two serious incidents involving an Emirates Boeing 777-200 aircraft with the registration number A6EWD and Aero Contractors Nigeria Ltd B737-42C aircraft with the registration number 5N-BOB, which equally occurred in July 2015.

The Sikorsky S-76C+ helicopters with the registration number 5N-BGD had crashed into Oworonshoki lagoon with 12 persons onboard, including two crewmembers shortly before landing at Murtala Muhammed Airport, Ikeja.

There were six fatalities including the two pilots, while other six persons onboard sustained serious injuries.

The helicopter had departed SEDCO Express oil rig at about 14:55hrs with an endurance of one hour and thirty minutes maintaining 3,000ft with the estimated arrival at Lagos Airport at 15:36hrs, according to the crew information before departure from the rig.

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Importance of market data in an era of digitisation, disruption, financial inclusion CYNTHIA IKWUETOGHU

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igeria financial industry has experienced some transformation caused by disruptive technologies over the year, and in recent years, customers have become accustomed to digital experience offered by companies such as Google, Amazon and Facebook with the use of smartphones.

This is according to the welcome address by Oscar Onyema, CEO, Nigerian Stock Exchange (NSE), from NSE Market Data Workshop 2018, titled, ‘Digitisation,

Disruption and Financial Inclusion,’ held weekend in Lagos.

From his welcome address, Onyema noted that, according to research, smartphone penetration in Nigeria (that is, the percentage of adults owning a smartphone) was estimated at 28 percent, with 76 percent of internet traffic routed through mobile phone.

“In response to the exponential growth in mobile phone operation by an exploding young population, banks are adopting new technologies with customercentric focus to make financial services more inclusive

and to provide a superior customer experience in the access and use of capital.

“Despite its relatively slow adoption in Nigeria, mobile money users - according to Electronic Payment Fact Sheet provided by the Nigeria Inter-Bank Settlement System Plc (NIBSS), reportedly grew from 2.3 million in 2017 to about 8 million as at June 2018 in a space of 6 months,” Onyema said.

According to Onyema, in the capital market ecosystem, digitalisation is fast gaining momentum. Purpose built solutions are being developed to reduce redundancies, cut costs and increase

efficiencies for greater transparency and alpha returns.

As emerging technologies such as artificial intelligence, cloud technology and distributed ledger technology potentially disrupt the capital market infrastructure, access to market data will improve through efficiencies and transparency brought by these technologies for the advantage to non-professional investors.

The overall participation of the Nigerian capital market in the fourth industrial revolution is far less than that of our counterparts in developed and emerging economies.

“To ensure that Nigeria

remains a globally competitive investment destination, we need to deepen the collaborative effort among market stakeholders to determine which emerging technologies to pursue within our markets and local context,” he said.

He noted that the exchange’s focus on innovative and disruptive solutions was also built around the market data, saying, “We are innovating with “smart channels” that can deliver on-demand data to investors including; unstructured supplementary service data (USSD), Mobile Apps, SMS and Interactive voice response (IVR).”

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COMMENT

Tuesday 23 October 2018

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Send 800word comments to comment@businessdayonline.com

Creating level playing ground for Nigeria’s healthcare professionals

MAZI SAM OHUABUNWA OFR sam@starteamconsult.com

I

was in the United States of Nigeria recently and I felt that I needed to go to the clinic. My sister in-law booked an appointment.

When I arrived, I was warmly received by a receptionist who gave me a form to fill. He was neatly dressed and after collecting my data, ushered me into a room. Soon afterwards a lady walked into the room to take my vital signs- blood pressure, pulse rate and temperature. This healthcare professional who I got to know was a nurse was decently dressed in a white over coat. But at first he could have passed as a medical doctor. He asked me a few questions and got me ready to see the physician. A few minutes after, the medical doctor also walked in wearing a white overall. He took his time to examine me, asking questions. At some point, he asked me to undress for a thorough physical examination. Then he left. Thereafter someone I suspected must be a health technologist walked in with an ECG machine and strapped some wires on my chest. When he finished, he left and the medical doctor returned to discuss the ECG readings with me. Afterwards, the doctor requested some laboratory examination and I was escorted by a nurse to the lab. My blood and urine samples were taken by a medical laboratory scientist.

He told me to come back and see the doctor in two days time.

On my return, I was again courteously ushered in to a waiting room.

The doctor whom I had seen two days earlier reviewed all the test results and wrote out a prescription. Then he asked me “what is the name and code of your

Pharmacy?” I asked why and he said, he was going to remit the prescription to the pharmacy, so I would go and fill the prescription at a Pharmacy. I then told him I was not resident in the USA and would rather fill the prescription when I returned to Nigeria. He insisted that I must begin to take some of the medication immediately while I begin the others when I got back. I agreed and suggested if he could let me have those medicines from the clinic. He said I could only get any prescription drug in the pharmacy in town or the pharmacy in a hospital not from the clinic or elsewhere .I was impressed as this contrasted with the situation in my country where you can get drugs (prescription or not) from anywhere- open markets, kiosks, moving trucks and all manner of clinics and health centres.

That was not just what pleased me most. I was thoroughly impressed by the harmony that existed within the healthcare team. Everybody knew his job, respected each other and kept in their lanes. They all looked happy, contented and proud of their professional duties. And all these worked in my favour- the patient. Again this seems to contrast with what happens in my country. I really do not know how it all started but there seems to be so much acrimony within the healthcare team in Nigeria. This acrimony came strongly to the fore during the recent health workers strike under the auspices of JOHESU. What was meant to be a protest by public sector health-workers against their employers - federal and state governments turned into a war between medical doctors and the other health workers- pharmacists, medical laboratory scientists, physiotherapists, nurses, midwives and health technologists. I could never understand why the gain of one group should turn to be the loss of another group. Is it not possible for the gain of one to be the gain of all? I am pleased that the leaders of the different professional groups are working hard to restore the relationship and I commend them. For me we

‘

Since healthcare is a team operation, it is not in the interest of the patient for some to be happy and others sad. A demoralized team member can ruin the good work of other team members

’

must ensure that this does not happen again. Since healthcare is a team operation, it is not in the interest of the patient for some to be happy and others sad. A demoralized team member can ruin the good work of other team members. It is in pursuit of this objective of restoring inter-professional harmony that I offer the following suggestions First, the current practice of having a particular professional group head hospitals must be reviewed. Leadership of institutions is a competency based activity. To make it a birthright of any particular professional group is not fair to all. Let the most competent or most senior professional head the hospital or the establishment. That is what happens in every progressive organization. The best leads! Peace is elusive where there is lack of justice and fairness. It is appalling and almost sounding like apartheid policy when a 5 year old medical doctor becomes the boss of 20 year old pharmacist for example in a hospital just because the hospital must be led by a medical officer. Everywhere in the world that a ceiling is placed on the growth or advancement of one group and another is allowed to advance, there will always be discontentment that eventually leads to rebellion. See what happened in America in the days of racial discrimination or in South Africa due to the apartheid system! Alternatively we should return to what used to operate in our days in

the hospital. There was a director of administration who ran the administration while the professional groups had their heads and ran their clinical services without any problems. This made for more harmony among the healthcare professionals. The change in the nineties or so that dislocated the old system bequeathed to us by the British has effectively dislocated inter-professional harmony in our healthcare systems and must be revisited if the much desired harmony must be restored.

Similar to the above is the growing practice of always making medical doctors ministers of health and as is so often, the two ministerial positions including minister of state for health are assigned to medical doctors. Ditto for states where it is almost becoming an article of faith that health commissioners must be medical doctors. This is breeding professional arrogance on one hand and on the other hand professional jealousy. Way back, some of the best health ministers we have had were not medical doctors and some like Chief Ugwu in the first republic were not even healthcare professionals. In recent history, the likes of Professors I.C. Madubuike, ABC Nwosu and Eyitayo Lambo were not medical doctors and during their tenures, professional harmony soared among the healthcare professionals and many left great landmarks. In 1993 when Prince Julius Adelusi- Adeluyi, a pharmacist, was secretary of health for only a few months, he left enduring legacies. So if we must make health professionals ministers in the health ministry, we should rotate it between the different health professions and specifically, we must never make the two ministers come from the same professional group. It is a patently unfair practice.

Thirdly, welfare issues for healthcare professionals should be taken together. The existing dichotomy must be removed. In my days as a pupil pharmacist I was employed on salary grade 8, step one and my house officer colleagues were started on grade level 8, step three. And when we had any issues with the hospital administration,

we presented our cases jointly and we rotated leadership amongst ourselves, looking for the most competent, blind to our professional groupings. But somewhere along the line, the medical doctors were removed and placed on a different salary grading while the rest of the healthcare professionals were left in another salary grading.

This was how the seeds of suspicion and disharmony were sowed. There is nowhere else in the developed world that this dichotomy exists. To be true this is the major destabilizing factor in the healthcare team. Nobody is proposing that the salary or allowance of any group presently enjoying advantage should be reduced, rather the gulf created between one group and others should be reduced. I do not see how this causes any loss to any group but I see it helping to bridge the current subdued differences and resentment.

I must conclude that in making the above suggestions, I sincerely do not have any prejudice against any group.

I am a very concerned Nigerian who wants our health care professionals to work in harmony for the good of the patient and the improvement of healthcare in Nigeria. The unrelenting poor rating of Nigeria’s healthcare may not be unconnected with this simmering animosity and disharmony among our healthcare professionals.

Even the worsening medical tourism out of Nigeria may have its roots in the enthronement of a patently unjust system of compensation and rewards in the health care team.

I call on well meaning healthcare professionals to join me in this crusade to restore inter professional harmony in our healthcare team, keeping in mind the following wise sayings: Injury to one is injury to all; Do unto others as you will like them to do unto you. What is good for the gander is good for the goose; where there is no justice and equity, there will be no peace. May God help us to heed this appeal.

Send reactions to: comment@businessdayonline.com

Unorthodox economics gets the nod

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

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merging markets central bankers are in somewhat of a flux at this time. Orthodox monetary policy measures to moderate capital outflows from their economies as global fund managers increasingly find the risk-reward characteristics of advanced economies attractive, as central banks there give up unconventional measures, are proving insufficient. Measures

that seem to be able to live up to the task are not rules-based; capital controls, for instance. Their discretionary nature is precisely why they have been discouraged by the mainstream Washington Consensus. But even that consensus may be about to change.

In October, the International Monetary Fund appointed Gita Gopinath as chief economist; a signal it is open to new thinking. Why so? Ms. Gopinath is a maverick of sorts. Her views on exchange rates are somewhat unorthodox. A prolific researcher, she has produced numerous papers to make her point. It seems the establishment finally decided such “unorthodox” views are now needed at the high table. One could argue the IMF is simply riding the wave, though. To resist what an increasing number of central bankers are beginning to institutionalize would be to lose relevance. At the IMF meetings in Bali in October, central bankers from Thailand, Malaysia, Singapore and Indonesia were unabashedly in support of newer and

creative monetary policy measures to complement the predominant conventional inflation-targeting framework endorsed by the IMF. Capital flows management (CFM), which are simply fine words for capital controls (albeit it includes other measures), is especially controversial. Crude at its worst, being no more than blocking the outflow of funds from an economy mostly, it is a mechanical way to manage the disruptions from sudden outflows, as was the case during the so-called American Fed taper tantrum in 2013, and now as the same central bank is decidedly and rightly on an interest rate hiking path. Still, the costs of capital controls are not likely to change.

Investors do not soon forget when their funds are blocked from exiting a jurisdiction at precisely the time they so desperately needed them to. In some cases, if not most, when the flows are later eased, investors take significant losses from a likely depreciated local currency.

Curiously, the same investors do not mind taking the same country risk much later on, when yields are

temptingly attractive enough to make it worth their while.

But why should flexible exchange rates not suffice to absorb the shocks of sudden capital outflows? The inflationary effects can sometimes be too much to bear by the local populace of most developing economies, whose purchases tend to be mostly imported goods, leading to unrest.

And the resultant damage can be difficult to repair in time enough to avoid a bigger crisis; political instability, for instance. In other words, even as foreign investors may be well pleased about ease of flows and liberality of the exchange rate, when the country becomes unstable because of too high prices from first and second round effects of exchange rate depreciation, they are not likely to want to invest anyway. Consequently, what would be apt would be for central bankers to strike a balance. Put another way, as Bank of Indonesia governor Perry Warjiyo put it on a panel (“Is there a new orthodoxy for monetary policy?”) at the IMF meetings

in mid-October, a central bank should intervene in times of shock, not to target a certain level of exchange rate, but “to smooth out the adjustment process.”

Similar to managing the capital flow cycle with CFM measures, macro prudential policy tools – which though take myriad forms but are simply measures aimed at maintaining financial stability – are proving to be quite effective in managing distruptions to the lending cycle as well.

There has to be a new consensus.

Inflation-targeting, while still relevant but increasingly less so (as the current dominant 2 percent target proves too low to avoid the zero lower bound of real interest rates), must be complemented by capital flows management and macroprudential measures as needed; and indeed any other future creative solutions aimed at financial stability. Together, they should become the new orthodoxy.

Send reactions to: comment@businessdayonline.com

Tuesday 23 October 2018

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COMMENT STRATEGY & POLICY

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

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i g e r i a ha s b e e n practicing her own brand of democracy since 1999. The basic premise of democracy is that ultimate power should be shared equally by the whole polity. But this idea is not practically true. The conviction that the polity should include the whole population when it comes to dividend of democracy is comparatively a novel idea that was first put into practice, briefly though, in the French Revolution.

This idea is imperfectly realized till this day even in the best of democracies in the world.

You may recall that the French Revolution of 1789 abolished the feudal system and all the obligations and dues that it entailed, and it entirely removed the tax exemptions of the nobility and the clergy. But perhaps what was most radical, even unimaginable at that time, was the eleventh article in the French Constitution, which states that: “All citizens, without distinction of birth, are eligible

THOMPSON AYODELE Ayodele is a Senior Research Fellow with the Initiative for Public Policy Analysis, an independent public policy think-tank in Lagos, Nigeria

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cross Africa, planting oil palm is a lifeline for millions of small farmers, and palm oil development is key to the future of countries including Nigeria, Liberia, Gabon, Burkina Faso, and many others. However, new threats are rising from Europe that will undo the progress made across the African continent.

The European Union (EU) is quietly, but determinedly, preparing a new rule that is designed to block palm oil exports from Africa and Asia out of the EU market. In July this year, after 18 months of fractious debate, the various arms of the European Union declared they would allow palm oil – arguably the rich world’s most hated vegetable oil – to continue to be accepted as part of the EU’s renewable energy mix.

However, that is not the end of the story. The EU has put in place a caveat. The European Commission will determine which biofuels it considers to be ‘high risk’ or ‘low risk’ in terms of ‘indirect land use change’ in ‘high carbon stock’ areas.

‘Indirect land use change’ (ILUC)

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The test in a nation’s progress to any office or dignity, whether ecclesiastical, civil, or military; and no profession shall imply any derogation.” Even Article 17 of the Nigerian Constitution expressly states that the country’s social order is founded on ideals of freedom, equality and justice. So, in theory, there is equity before the law for all, not only in daily life and business, but also in politics.

To the best of this writer’s knowledge, the saying that there is equality before the law is a myth created by the political class in most parts of the world. Though, the proposition by Thomas Jefferson, one of America’s founding father, was that “all men are created equal”. But the basis of that equality and the conditions under which it may flourish have always been a matter of intense dispute because all men are not equal. In the world today, much of the debate about the meaning and purposes of equality arises from two opposing conceptions of it- equal opportunity for individuals versus equal distribution of resources throughout the society. Regrettably, we are in a world where opportunities for individuals and distribution of resources are not equal. The test in our progress as a nation isn’t whether the rich is getting richer; it’s whether we cater sufficiently to the needs of the poor and less privileged in the society.

Increasing inequality in income gives rise to corruption, insecurity, and lack of productivity.

When the inequality gap is wide, it retards growth, undermines the fight against corruption and poverty, and slows down the development of both individuals

‘

Increasing inequality in income gives rise to corruption, insecurity, and lack of productivity. When the inequality gap is wide, it retards growth, undermines the fight against corruption and poverty, and slows down the development of both individuals and the country

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and the country. What the country gets in return for a wide inequality gap is chronic poverty.

The recently concluded 2018 World Economic Forum in Bali, Indonesia, brought out a disturbing report about Nigeria’s growing inequality amongst her citizens.

The inequality scale was released in a report at the annual International Monetary Fund (IMF) and World Bank meeting. The Report titled “Commitment to Reducing Inequality (CRI) Index 2018” shows that Nigeria’s ranking has remained constant for two years in a row.

Simply put: Nigeria ranks 157 out of 157 in inequality scale in 2017

and 2018. Nigeria, according to the report, is the least among 157 countries on social spending, tax and labour rights.

Nigeria’s social spending on education and healthcare is low.

Instead of allocating 26 percent of the 2018 Budget to education as recommended by the United Nations Education and Social Cultural Organization (UNESCO), Nigeria allocates 7 percent to the education sector, while it allocates only 3.9 percent of the 2018 budget to the health sector, according to a World Bank report. The 2018 CRI report shows that one in 10 children in Nigeria do not reach their fifth birthday, while more than 10 million children do not go to school. So, when critics say that Nigeria should spend more on education and healthcare, it is to bridge the gap between the rich and the poor. In addition, most Nigerian workers have been denied commensurate wages and compensation schemes coupled with deplorable working conditions.

Combating inequality is not about being the wealthiest country or one of the biggest economies. It’s about having the political will to articulate and put into practice policies that will narrow the gap between the poor and the rich. Nigeria with abundant mineral resources and a population of almost 200 million has not transformed her potentials to greatness. We have a country with high unemployment rate, aging public infrastructure, increasing insurgency and opaque systems of governance. Most rural communities are not connected to national grid, and thus, they do not have electricity. Without electricity,

those living in most rural areas don’t have access to the internet in a world characterized by the 4th Industrial Revolution. Some do not have access to portable drinking water and motorable roads amongst a host of other challenges.

These are some of the reasons why Nigeria was labelled as the poverty capital of the world sometime in the year by the Brookings Institute, USA. About 87 million Nigerians are poor because the country’s economy is in a “complete mess”.

More needs to be done in terms of policy implementation to reduce unemployment and poverty. This is a clarion call on elected and appointed officials in the government to display positive attitude so that policies can work.

According to the CRI 2018 report, countries that have taken steps to tackle inequality in the past year include Ethiopia which came 131st. Although, at the 131st position, Ethiopia has the sixth largest education spending in the world. Chile, at 35th, increased its rate of corporation tax while Indonesia at 90th, has increased its minimum wage and spending on health. The Bretton Wood Institutions advised most developing nations with poor inequality index to develop national inequality action plans and implement same religiously to achieve the UN’s Sustainable Development Goals (SDGs) on reducing inequality (Goal 10) by 2030. “A nation will not survive morally or economically when, so few have so much while so many have so little”. Thank you.

Send reactions to: comment@businessdayonline.com

The EU’s risky move on palm oil is the proposition that when demand for one commodity goes up, demand for secondary commodities goes up too. The stinger is that any deforestation caused by the secondary commodities should be attributed to the first commodity.

The European Commission has knocked back using Indirect Land Use Change in the past for the simple reason that vegetable oil markets depend on a web of variables that can’t be measured or verified. It is purely theoretical.

The EU has cleverly avoided this problem. Rather than trying to measure ILUC, it is going to classify different biofuels – and their farmers – as being ‘risks’ for land-use change, and merge ILUC and other factors into a wider ‘deforestation criteria’ to determine the level of ‘risk’.

This poses an existential threat to farmers who rely on palm oil: the EU essentially wants to designate millions of developing world farmers as ‘risky’. This kind of signal would be devastating for future trade, investment, and employment. Furthermore, declaring palm oil risky is a disrespect to millions of farmers.

It appears as though the EU has already made its political decision on palm oil – to remove it from the market in order to protect uncompetitive EU oil seeds.

In Jakarta last month, EU Ambassador Vincent Guérend said the EU would continue its move towards phasing out palm oil from its biofuels programs.

And just recently, Yewande Sadiku, the Executive Secretary, Nigerian Investment Promotion Commission (NIPC), said that NIPC had been told by officials that the EU proposed to ban the importation of palm oil to Europe.

Now, the EU is simply putting together its case on ‘risk’ post-fact in order to justify the political decision.

At the same time, the broader implications of the EU’s actions are myriad.

On trade, the market effects should be reasonably straightforward. Demand for palm-based biofuel – and palm oil – will fall. This will knock global palm prices down, affecting farmers around the globe, and could create a loss of jobs.

On investment, there will be bigger problems, particularly for Africa.

Investment in new oil palm plantations will likely fall. There has been significant interest from European investors to supply both the EU’s biofuel and food markets. Investment in Africa’s agriculture sector is vital to the future of the continent, and Europe’s actions will undermine this key sector.

The problem, though, is that the EU’s push on palm-based renewables isn’t just about energy. It’s more about

a pure dislike of palm oil: because it is imported mostly from developing countries.

The EU has signalled that it is seeking to lower the EU’s global deforestation footprint. It is attempting to place curbs on products that it considers to be linked to deforestation. In reality, this is simply cover for keeping out cheaper imported commodities and propping up its declining agricultural sector. It already has several programs across different commodities – timber, fish products -- to achieve this aim.

Palm oil has been – and could continue to be – a windfall for Africa and for African agriculture. There are an estimated 4 million oil palm smallholders in Nigeria, across nearly 90 per cent of the country’s cultivated area. Most of Nigeria’s palm industry relies on natural groves and local-level processing. Greater foreign investment could introduce a production model similar to that common in Malaysia and elsewhere in Africa: a major investment for processing and infrastructure, with local farmers supplying the raw material.

This would lead to improvements in productivity and logistics.

Nigerians are already facing a major disaster with the recent floods.

And what it needs now is stronger EU assistance and help. Imposing policies that discriminate is simply

a continuation of the EU’s two faced approach to Africa. Nigerian small farmers only want to be treated as fairly as EU farmers, guaranteeing themselves the same opportunities for their families. But this, now, is all under threat. Policymakers in Brussels have the arrogance to determine whether Nigerian palm oil growers are defined as ‘risky’, with the sweep of a pen.

What is the EU trying to achieve?

Forbid African small farmers from elevating themselves? Or is it a question of continued EU control over Africa in a move reminiscent of neo colonialism?

When EU policymakers make such a move, they are not just talking about palm oil within the context of renewable energy, they are talking about palm oil production and its use across the world. What remains baffling is how natural smallholder palm groves in Nigeria have anything to do with deforestation in Brazil or northern Europe.

The EU’s plans are a step back to the past and will reduce the daily labour of farmers in Nigeria and elsewhere across the world to little more than a concocted risk factor in a spreadsheet. There is one word for this: dehumanising.

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Editorial PUBLISHER/CEO

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

Bashir Ibrahim Hassan

GM, BUSINESS DEVELOPMENT (South) Ignatius Chukwu

Tuesday 23 October 2018

How more clannish can a government be?

J

uly last year, the Executive Secretary of the National Health Insurance Scheme, Usman Yusuf, was suspended by the Minister of Health following allegations of corruption and abuse of office. Yusuf was specifically accused of misappropriating the sum of N919 million, being part of contributions by subscribers of the scheme Following extant rules, the minister of health suspended Yusuf and set up an administrative panel to investigate him.

The Economic and Financial Crimes Commission, EFCC, and the Independent and Corrupt Practices Commission, ICPC, also stepped into the matter and were investigating Yusuf. But Yusuf would not go quietly. He kept challenging the authority of the minister to suspend him. Yusuf, responding to the minister’s letter suspending him, said he was “unable to comply” with the directive because, according to him, only the president had the powers to suspend or sack him.

But the minister insisted and the suspension was given effect.

Still in a show of defiance, Yusuf refused to appear before the administrative panel investigating him. Regardless, he was found guilty of the panel set up to investigate him and the report of the panel had been submitted to the president since

September last year.

However, without taking action on the report of the panel or allowing the EFCC and ICPC conclude their investigation, the president via a letter from his chief of staff to the minister, reinstated Yusuf to his position. His only punishment was that he was “admonished to work harmoniously with the minister.”

Fast forward to 2018 and the NHIS governing council, constituted only in March, has again been forced to suspend Yusuf, following a barrage of petitions of fraud against Yusuf. While announcing his suspension on Thursday, Enyantu Ifenne, the chairperson of the governing council, accused the NHIS boss of several executive infractions that “we cannot ignore.” The council in a statement after the press briefing listed eight major infractions against Mr Yusuf ranging from fraud, mismanagement of resources, hostile administrative practices, disregard and defiance of council, refusal to implement any of council’s directives to insubordination and verbal assault of council members.

Expectedly, Yusuf ignored the resolution and resumed work on Friday, confident of president Muhammadu Buhari’s backing.

In a memo to the Chairman of the council, he challenged the council’s authority to suspend him arguing that only the presi-

dent could suspend him and not the council.

The governing council, feeling defeated, has left the matter to the president. According to its chairman: “Let those who hide under the cover of the Presidency to protect corruption know that Nigerians are keenly watching.

I am convinced that if President Buhari is fully briefed about a tenth of Yusuf’s atrocities, he will throw him out.”

But far from throwing him out, the Executive Secretary may again be admonished to work harmoniously with the governing council and that will be the end of the matter.

This only makes a mockery of the so-much trumpeted war against corruption of the administration. Just like Senator Shehu Sani famously described the Buhari administration, it treats cases of corruption against opposition with insecticide but treats corruption cases against its party members and close associates with deodorant.

This adds to the long list of weighty corruption allegations against close associates and aides of the president that have been swept under the carpet without investigations or sanctions. We recall the allegations against General Tukur Burutai, Chief of Army Staff, General Abdulrahman Dambazau, Minister of Interior and former Chief of Army

Staff, Abba Kyari, and Chief of Staff to the President, Babachir Lawal, former Secretary to the Government of the Federation (SGF). Interestingly also, the Presidential panel set up to probe arms procurement between 2007 and 2015, and whose reports were being used to prosecute past military chiefs was hurriedly disbanded the moment it began moves to investigate the tenure of the Present National Security Adviser, Babagana Monguno as Chief of Defence Intelligence between July 2009 and September 2011. The curious reason given by the government for its dissolution was that it has outlived its usefulness. No wonder an analyst recently quipped that “Buhari’s so-called anti-corruption fight is the most invidiously selective, the least transparent, the most brazenly unjust, and the silliest joke in Nigeria’s entire history.”

Worse is the open clannishness and nepotism being displayed by the administration. It gives the impression that the government is not for all Nigerians and that some Nigerians are more favoured and are untouchable no matter the offence they allegedly commit.

Perhaps, by the time the history of this administration is being written, it will go down in history as the most clannish and provincial and did the most to divide the country along ethnic and religious lines.

HEAD, HUMAN RESOURCES Adeola Obisesan

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BUSINESS DAY

Tuesday 23 October 2018

Udeme Ufot urges industry regulation to curb political smear campaigns Stories by DANIEL OBI Media Business Editor

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n anticipation of the commencement of the 2019 general election, stakeholders in the communications industry gathered recently in Abuja to discuss critical issues around the management of electioneering campaign communications and highlighted the rules of engagement applicable to the development and deployment of such communications.

At the forum on Political Communication, organized by the Advertising Practitioners Council of Nigeria, they called for campaign communications to be fair and truthful enough to aid democratic choice by the electorate and devoid of any traits that could precipitate violent conflicts.

In his paper titled, “Trends and Consequences of Smear Political Campaigns” the Group Managing Director of SO&U Group, Udeme Ufot said “smear campaigns utilize unverifiable rumours and distortions, half-truths and even outright lies. Even when the facts are seen to lack substance, the reputation which is the target, in most cases, is often already tarnished before the truth is

known. Often such targets are typically forced to focus on correcting the false or erroneous impression rather than the real issue” In his presentation, he cited that when political campaigns are not issue based, there is a strong tendency to dwell on theatrics, verbal assaults and character assassination. Contrasting this with more sophisticated environments, where political campaigns often combine the three prong approach of advocacy, contrast and attack, he stressed that “their campaigns are more professionally packaged to associate the candidate with salient issues and subject the electorate holds dear” To succeed, Ufot charged communicators to engage deeply with the people, con-

duct research and analysis to arrive at communication that would most resonate with the people. Reiterating that such exercise requires some rigor of process, sound strategizing, discipline on the part of the candidate to subject himself to the professional management of his communications consultants, as well as effective programme funding In the same vein, he challenged media organizations to maintain a professional stance by discouraging airing or publishing of political advertisements without due vetting and approved by the regulatory authorities. Whilst charging, industry regulators to live up to their statutory responsibilities by ensuring that all contraventions of the regulatory process are appropriately sanctioned.

Simba introduces KStar specialized power backup solutions to Nigerian market

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imba Industries, one of the foremost companies in the power backup industry in Nigeria, has introduced KStar UPS (Uninterruptible Power Supply) systems to the market. KStar is recognized for its specialized power backup solutions, capable of handling mission-critical electrical equipment including hospital diagnostic and surgical apparatus, data centers and Bank ATMs. Unlike traditional Online UPS systems, KStar products can handle a wide range of applications which have peculiar power needs, such as factory machinery, where power requirements at startup are huge, and where power failure can often lead to significant cost escalation, as machines need to cool down and be restarted.

Speaking at the unveiling event held at Oriental Hotel, Lekki-Lagos on Thursday, October 19, 2018, the rep-

resentative of Simba Industries, Mr Prasanna Sridhar, explained that KStar is the sixth largest manufacturer of UPS in the world, offering high quality products and full service support to more than 90 countries.

MR Sridhar noted that the different ranges of KStar UPS can cater to every power demand and needs across different sectors, including manufacturing, oil and gas, medical establishments, businesses and other key industries. “Hundreds of thousands of businesses around the world depends on reliable power back-up solutions for their critical systems. Downtime is simply not an option for them, as it results in potentially millions of dollars of losses per second. The KStar UPS draws on the latest research and development to offer unparalleled power backup solutions for a diverse range of industries” he said.

Suresh Kumar, Head of

Simba Service, the group’s awarding winning Service division, further added that KStar UPS is supported by Simba Service in Nigeria, which provides power audit consultation, installation, 24 hour customer support, and Annual Maintenance Contracts. He noted, “At Simba, we believe that total customer satisfaction is only achieved, when a good quality product is supported by attentive and responsive customer care and after sales service. Simba Service is at the heart of our value proposition to customers.”

KStar offers an extensive range of UPS solutions, including Online Transformer/ Transformer-less UPS, Line Interactive UPS and Modular UPS all of which are aimed at delivering optimized energy sourcing, cost savings as well as minimizing downtime – thereby meeting the critical needs of its customers in various sectors of the Nigerian economy.

Calling for a review of the educational curriculum to re-introduce Civic Studies as a veritable tool for building responsible citizens who are aware of their civic responsibilities to the nation, he noted that this approach would give rise to “a new attitude to politics, and indeed a new Nigeria is possible if we re-orientate the minds of our people from kindergarten level up to create a heightened sense of responsibility amongst all Nigerians” Acting Registrar/Chief Executive, Ijedi Iyoha, had said earlier that the forum is organized in anticipation of commencement of campaigns for the 2019 general elections and aims at discussing critical issues around the management of electioneering campaign communication and to highlight the rules of engagement applicable to the development and deployment of such communication.

She added that “the tendency of political candidates and their supporters to abuse their freedom of speech and engage in spurious promotional campaigns that exploit consumers and the public, and sometimes undermine societal harmony and wellbeing has made it most expedient to bring all stakeholders together under one platform.

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Market insight CHI’s introduction of Exotic Pineapple Coconut in small pack

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hi Exotic Nectar has unveiled a new 150ml pack size for its hugely popular Pineapple Coconut product variant.

The new pack size which promises to offer the same superior taste the brand is renowned and cherished for is a strategic move to provide distinctive refreshment to a wider spectrum of Nigerian consumers, the company said in a statement.

Retailing at N50, the product line innovation comes at a pocket friendly price. The new 150ml Chi Exotic Pineapple Coconut pack, according to the company is the result of deploying consumer insights and marketing intelligence to drive brand growth in a dynamic market environment. ”The Chi Exotic Pineapple Coconut 150ml pack size’s rich unique fruity blend offers an irresistible taste and distinctive refreshment that makes it ideal for indulgence and relaxation. Its superior taste and handy pack size is poised to connect with the preferences and

healthy choices of a youthful consumer segment”.

The statement quotes a brand analyst with Pride Communications, Linus Nwokoji as saying that the fruit juice segment market is becoming driven by competition, retail power and local consumer choices that increasingly determine brand and product line extension trajectory.

“The Chi Exotic Pineapple Coconut 150ml pack size is an innovative way to invigorate the market with its affordable N50 retail price. Its superior taste is sure to enable it trigger more demand, maintain market dominance, and as well as improve penetration in geographical markets,” he stated.

Speaking on the introduction of the new pack size, Chi Limited’s Marketing Director, Probal Bhattacharya, said the Chi Exotic Pineapple Coconut 150ml pack size demonstrates the brand’s resolve to deepen its market reach by offering consumers an affordable option without compromising their quest for distinctive refreshment and indulgent taste.

Brand Talk Why are integrated media campaigns so challenging?

MICHAEL UMOGUN

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he latest Getting Media Right finds that marketers globally continue to struggle to assess their marketing performance due to disconnects in strategies for reaching consumers. So why are integrated media campaigns so challenging Now in its fifth year, Getting Media Right examines the current state of marketing in a connected world and it is based on input from 468 senior marketers spanning advertiser brands, media companies and agencies globally. It reveals an industry that continues to diversify its media usage and increasingly requires better understanding of how ideas, content, and media need to be activated in tandem to create holistic marketing that drives brand growth.

Disconnects between

growth strategies mean that many marketers are missing opportunities for growth, with 40 percent still using ROI measurement approaches that are primarily focused on short-term sales. This, despite an overwhelming majority of respondents, 85 percent, saying that the most important approach to ROI is a blend of both short and long-term measures.

Key findings include: While confidence has grown from last year, less than half of advertisers are sure of their ability to create insights from data. Even within agencies and media companies, fewer than 20 percent are very confident, indicating the industry is struggling to manage all the data that is available.

Creating insights is dependent upon pulling together the right information and tools to monitor and optimize campaigns, yet marketers are struggling to connect the

dots on performance across channels. 78 percent strongly or somewhat agree that it is difficult to assess how well brands perform across channels. An even greater 84 percent say a contributing factor is the blind spots in digital measurement.

Advertiser confidence in their media mix has grown slightly from last year, but 45 percent are still not confident that their organization has the optimal media mix, of which only 13 percent say they have very integrated media strategies.

82 percent of marketers believe they have integrated marketing strategies, but the ir efforts are not translating fully to consumers. Conversely, our recent AdReaction: The Art of Integration study found only 58 percent of consumers see campaigns as being integrated.

Michael. Umogun @kantarmillwardbrown.com

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Tuesday 23 October 2018

Conference suggests innovation, collaboration on research to stimulate economy Nigerian Institute of Food Science and Technology in partnership with Coca Cola Nigeria is concerned about high population growth without corresponding GDP increase. At their recent conference in Abeokuta, speakers suggested solutions to impending challenges. Daniel Obi reports.

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Managing population growth t is projected that the world population will rise from 7.2 billion people to 9.7 billion people in the next 30 years.

African population will increase to 2.3 billion from present 1.2 billion people.

On the other hand, UN said Nigeria will add another 189 million people to its present population of 170 million. This will bring Nigeria’s population to about 350 -400 million people in the next 30 years.

The growth in population in various continents and countries presents challenges and opportunities. For Nigeria, it means the country will become very rich in population but if the country does not deal with poverty and infrastruture, it will become largely poor population with its severe consequences. Nigeria needs upto 6.5 % -10 % present 1.5% annual GDP growth to deal with poverty.

It is said that the Western World is already projecting and trying to proffer solutions to the likely impending population and environmental issues that will be associated with population rise in the next 30 years. Increasingly, there will be more demand for food, water, energy and housing and any nation that is not prepared for the upsurge in demand will continue to experience increasing chaos.

It was this understanding, especially the increasing demand for food that spurred Nigerian Institute of Food Science and Technology, NIFST to table “innovations in food science and technology for sustainable economic growth” as theme of its 42 annual conference in Abeokuta recently.

Leading discussion on the theme, Michael Ngadi of Dept of Bioresource Engineering, McGill University, Montreal, Canada who was represented by Ade Alonge of department of Agric and Food engineering, University of Uyo, Nigeria said population increase means more demands will be placed on food, urbanization will also increase. The middle class will also grow. What this suggests is that the global agricultural output has to be doubled to meet demands.

Alonge who said “Without food, all other things will not be in place” therefore challenged Africa and particularly Nigeria to begin to think of what to do in terms of creativity and food value chain to make more food available as population increases.

He expressed fear that there will be mined food insecurity, moderate food insecurity and

L-R: Ogugua Aworh, senior lecturer and food consultant; Sheriff Olagunju, director, Food Safety and Nutrition, NAFDAC; Fred Chiazor, director, Scientific and Regulatory Affairs, Coca-Cola Nigeria; Olusola Adesokan, chairman of the Plenary session and former president of Nigerian Institute of Food Science and Technology(NIFST); Babatunde Oguntona, guest speaker and Professor of Nutrition, FUNAAB ( Rtd) & Consultant IITA; Gloria Elemo, director general, Federal Institute of Industrial Research, Oshodi(FIIRO), and Emeka Mba, public affairs analyst, Coca-Cola West Africa Business Unit, during the panel session by Nigeria Institute for Food Science and Technology in collaboration with Coca Cola Nigeria at the 42nd edition of the Nigerian Institute of Food Science and Technology(NIFST) conference held in Abeokuta, Ogun state

severe food insecurity in several places in the world but food insecurity will be worse in Africa if nothing is done now. “Today, many children are being undernourished in Africa and by 2050 it will be extremely difficult unless something urgent is done. Many more mouths have to be fed by 2050 but the question is what do we need to do as a people” The current situation where the livelihood of Nigerians is dependent on low resource small farmers is not healthy and unfortunately food production increase over time has not kept pace with population growth of about 3 percent yearly, Alonge said. He identified low productivity, post-harvest loses estimated at over N10 billion annually and low secondary processing as major challenges in agriculture.

Innovation in agriculture production value chain Alonge therefore suggested for innovations, new ideas and technology to proffer solutions to myriads of challenges existing in food industry. According to him this will require capacity building. “Innovation is a major part of competitiveness and economic growth”, while technology is important to reduce post-harvest losses Innovations don’t happen by chance, it must be deliberate.

Conscious innovation need to be cultivated and nurtured and put in place. Again, innovations are

not transferable, it has to be indigenous.

Chijioke Osuji of Federal University of Technology Owerri, FUTO and immediate past president of NIFST who also underscored importance of innovation in agriculture production value chain said “we have come to a stage in Nigeria where we must implement innovations to be able to break-through and bridge the gap existing in Nigeria’s food value chain system. It is the innovation we implement that will give the necessary jobs that will secure the food security of people. By securing food security, the population growth challenge will be taken care off in terms of nutrition adequacy”.

Eloquent Osuji said those innovations will make Nigeria’s food better preserved, converted to exportable products. “Those innovations will make youth more interested in agriculture and food value addition.

“In NIFST we believe that you cannot do without the production side but we also believe that the demand for the value addition is what drives the production. This is why several government policies will fail because they have focused on production. This results to high wastage because nothing is taking it. The groundnut pyramid was mounting because there was no processing. The place of government is to create the enabling environment – fix the electricity

sector, roads for evacuation of produce, make doing business easy and assist research”, he told BusinessDay at the conference.

Research as key to innovation Coca Cola, multinational company and big player in the global FMCG market and which understands the importance of research has for several years partnered NIFST to ensure how the players in the industry can walk the talk for economy benefits.

At this year’s conference, also partly sponsored by Coca Cola company that is about completing acquisition of Nigeria’s CHI, producers of Chivita juice, speakers at its plenary session agreed that innovation through research is key to enhance productivity and economic improvement. They therefore looked at how town and gown in research collaboration and industry linkages can lead to a sustainable economic improvement.

Need for collaboration to promote innovation In his presentation, Babatunde Oguntona, a food and nutrition consultant said research is the principal mission of specialized institutes such as NISER, FIIRO and IITA while for universities; research is part of their mission.

On other hand industries are in the business of making money. He therefore said collaboration between the institutions and industries can come in the form of In-

ternship, research grants, project funding, publication of research work and joint industry project and consulting for industries On why such collaboration is important, Oguntona cited the local adage ‘If you want to go fast go alone but if you want to go far, go together’. This explains the relevance of research to sustenance of all the parties in the economic development.

He said such collaboration will stimulate innovation which is key to competitiveness. “If you cannot compete globally you will fizzle out or become importing country. To be inventive or innovative, collaboration is key”. He also said such collaboration between industry, universities and research institutes will enable SMEs who cannot afford research cost to deploy research findings. “Collaborations will spread the cost of research.Collaboration offers opportunity for innovation and knowledge transfer”.

Today, Africa research budget is lowest with 0.9percent of total global research budget. Highest is America with 27.7 %, China 20.8 percent and India 3.8 percent.

Oguntona said level of research commitment is parallel to level of development.

Also speaking, Gloria Elemo, Director General of FIIRO looked at the importance of commercializing research work. According to her “If the university and research institutes have not carried out the process of commercialization to the extent that the industry can now take it up, then we are not probably talking collaboration”.

She said such collaboration is key to driving Nigeria out of recession and key to industrializing Nigeria and bringing it out from poor country status.

In his statement, Fred Chiazor, Business Unit Scientific and Regulatory Affairs Director, West Africa Business Unit at Coca-Cola Nigeria Limited expressed delight in the partnership with NIFST to promote industry course. He suggested setting up of a committee between academia, NIFTS, regulatory and industry to promote collaboration for economic benefits.

Underscoring such collaboration which will straighten issues , the Vice Chancellor of Federal University of Agriculture Abeokuta , Felix Salako said “researchers in Nigeria are trying their best but if there is no political will by the government to stop importation where products have been developed locally, create enabling environment, then researchers will be trying for nothing”. Simply put, research is the lever for innovation and economic growth.

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COMPANIES & MARKETS

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Poultry farm for every Nigerian family, it’s now easy!

Pg. 16

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

Asahi Brands reinforces commitment to Nigerian market …opens new outlet ENDURANCE OKAFOR

S

howcasing its commitment and increased focus on the growing Nigeria market, Asahi Brands Limited, the exclusive tyre distributor for Bridgestone and Firestone has inaugurated new Asahi Tyre Zone Company’s branded retail outlet at Ikeja in Lagos, Nigeria.

The Asahi Tyre Zones was inaugurated by Victor Eburajolo, group deputy managing director, Kewalram Chanrai Group; Gaurav Malhotra, general manager (GEAN) from Bridgestone Middle East and Anil Sahgal, director Auto Division Afriventures .

The Asahi Tyre Zone has been opened in association with Bridgestone Middle East (BSME). Bridgestone is the number one premium tyre manufacturer in world. These outlets are designed to provide customers with an enhanced retail experience and a better feel for the brand and passenger car radials on display.

Speaking on the inauguration of the Asahi Tyre Zone, Gaurav Malhotra said, “Over the past 2-3 turbulent years

L-R; Karounwi Ogunjobi, pastor, Foursquare Gospel Church, Damilola Lewis, Volunteer; Ololade Bamigbola, administrative director, Divine Missions HC; Adebowale Alabi ,vice president, community projects, Divine Missions HC,; Volunteer and pharmacist, Oluwaseyi Ogunlade and director of community projects, Divine Missions HC, Busayo Afuye during the Divine Missions HC medical outreach in Oganla community, Ibadan, Oyo State recently.

we have been making steady inroads into the Nigerian market as this is a pivotal market for our growth in the African sub-continent. Our product range fits well with the Nigerian consumer requirements and with the support of our key distribution and retail partners

in Nigeria, we have been able to penetrate most of the key institutional and replacement tyre market segments. Now with the reviving economy in Nigeria, we believe it is the perfect time to step up our customer focus in this market with the established branded retail chain Asahi Tyre

Zones.”

Commenting on the inauguration, Anil Sahgal, director Auto Division, Afriventures said, “The growing passenger vehicle segment of Lagos, along with entire Nigeria, has a lot of potential for us. The age old partnership with Bridgestone

has enabled us to secure a strong customer acknowledgement for our products. We aim to have a larger mind space with the customers in the premium tyre market in Nigeria.

The Asahi Tyre Zones will help us increase visibility for the Bridgestone and Firestone

brands, and will endear us further for the consumers, as they experience our world-class products and services.

He also emphasized on customer offer ‘ Peace of Mind’ .

The customers can exchange their non-servable tyres damaged due to service abuse at pro-rata basis bought from 1st of April’18 to 31st Dec’18 ” With developing road infrastructure, Nigeria has above 90 percent radialisation levels in the passenger vehicle segment.

Asahi Brands Limited, with its Bridgestone and Firestone car radials, which has already received high acceptance from Nigerian customers, is keen to further establish the dual brand at the top tier of the car radials market. The passenger car tyres portfolio is capable of servicing nearly 90 percent of the Nigerian car tyre market, which is currently, one of the largest in the African continent.

The Asahi Tyre Zones, follow a modern up-market retail format for selling tyres -- ensuring ample visual appeal, comfort and convenience to customers, providing an opportunity to learn about the product’s applications and performance before making the final purchase.

ACCA advises business professionals to Renmoney emerges winner of remain ethical in digital age Microfinance Excellence Award DIPO OLADEHINDE

I

n line with the Global Ethics Day, the Association of Chartered Certified Accountants (ACCA) has advised business professional and corporate organization to remain ethical in the course of carrying out their professional services in a very challenging digital age.

Speaking at the Global Ethics Day Breakfast event, Jamil Ampomah, head of directors for ACCA Africa said the event was an opportunity for senior business leaders across boards to interact and also share thoughts on how ethical practices can be improved in Nigeria organizations across board.

“Ethics should not be restricted to organizations but should start from the grassroots; there should be an opportunity to educate children or teenagers on how to be ethical because other organizations around the world are already imbibing that,” Ampomah, head of directors for ACCA Africa said.

Tom Isibor, head of ACCA Nigeria said ethics has become a critical part for career and business practices and having an event on World Global ethics day is to emphasis the importance and responsibility we all have to live ethically and show examples to younger generation.

“We all have responsibility to ensure ethics is enshrined in our

system through our various platforms and create a more positive environment to do business,” Isibor, Head of ACCA Nigeria said.

Also at the event, Taiwo Oyedele, partner at PWC said ethics is something about doing the right thing always regardless of where you find yourself. “Something cannot be right in the UK and be wrong in Nigeria at the same time which implies we have to ensure we do the right thing always.”

“Although we can easily admit that it’s harder to be ethical in Nigeria but we have to insist the right thing is done in our personal capacity and also as business leaders,” Oyedele Partner at PWC said.

Taiwo Oyedele noted that leadership is also very important however we need to look beyond the CEO or president and realize that as individuals we are leaders in our own little way and we need to start from there.

Adaobi Nwapa general manager at Zenith Bank said every professional should be ethical as its one of the moral compass of the society because it’s very important for every organization to understand the need to change this country and do the right thing.

“Ethics has worked in other countries so we need to start from the grassroots we need to teach our children we need to do the right thing,” Nwapa general

manager at Zenith Bank said.

Gina Oleghe lead consultant for Human Resource Warehouse Limited said the Nigeria factor is all about the Nigeria culture which implies the way things are done and ethics is all about accountability, responsibility, integrity and as Nigeria we should imbibe the ethics culture all round.

“Nigeria workers should be ethical by being responsible for their actions especially when they are wrong also we should lets kids know when they do wrong things they can be punish so they can know there are consequences for their actions,” Oleghe told Journalists at the event.

Olusoji Apampa CEO of The convention on Business Integrity Ltd said globally there have being debate about whether ethics is a moral issue or survival issue however situations in Nigeria shows Ethics is more of a survival issue and not a moral issue.

“Also said there is another debate on whether ethics should be a requirement or an intrinsic choice so the people behind choice are expecting government and regulation to be very strong but when government and regulators are not that strong we might need to depend on requirement which can’t work on its own without incentive either positive or negative,” Apampa said.

R

enmoney, a Nigerian consumer lending company has emerged the winner of the Award for Excellence in Microfinance Banking. The award was presented at the 8th edition of the New Age Banking Summit which held in Lagos.

Other winners of the evening were: GTBank, Diamond Bank, First Bank, First City Monument Bank, Union Bank and Wema Bank.

Receiving the award, Yetunde Faulkner, head of Commercial at Renmoney, said “We have been working hard to build more convenient lending solutions for Nigerians, so this award will be a huge morale boost for our team.

Ye t u n d e a d d e d , “ w e launched our online loan application process this year to provide loans in under 24 hours and we are looking forward to launching even better solutions in 2019.

For Anisha Ajimani of the UMS Conference, the organisers of the event, Renmoney was an obvious choice for the award because of the company’s focus on technology and customer experience.

She said the New Age Banking Awards are aimed at honouring organizations that have consistently demonstrated exemplary performance. These will not just recognize the endeavours of the most successful financial organizations, but will

also set a benchmark, inspiring other organizations to achieve their own goals.

The theme of the two-day event was “Staying Relevant in the Changing Financial Landscape of Nigeria”. It was attended by a wide array of industry experts comprising chief Information officers of financial institutions in Nigeria, speaking on various developments and challenges in the digital banking and fintech space.

Renmoney was launched in 2012 and has quickly become a leader in consumer lending.

Renmoney lends up to N4 million to a single customer via its website, call centre, agent network and branches in Lagos.

InstinctWave announces Finance Innovation Awards

I

nstinctWave, Africa premium B2B event Company has announced the 4th edition of Nigeria Finance Innovation Awards, formerly Nigeria CFO Awards. The event is scheduled to in Lagos on November 2nd 2018.

Now in its fourth year, NFIA rewards success, product innovation and various experts contributing to the robust financial sector. The award is to showcase the efforts of financial firms, finance executives and their teams’ efforts towards organisations sustainability. It will also showcase excellent work

rendered by financial firms that provided them with the services, support and technology that enabled their successes.

The finance industry is a dynamic sector that keeps Nigeria’s economy evolving. The awards will recognise finance executives, teams and leading finance organisations whose outstanding leadership practices have raised the standards of accountability within the profession, showcase brilliance in managing organisations’ wealth and supported the nation’s economic growth.

Akin Naphtal, the CEO of InstinctWave says: “We cannot underestimate the role of the financial sector and its importance to national development.

It is an honour to celebrate with organisations at the forefront of promoting economic growth and lifting the veil on individuals that have contributed immensely to the sector.”

According to him, a robust financial unit is critical to the success of any organisation – keeping the business financially sound, while implementing successful strategies.

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Business Event

Poultry farm for every Nigerian family, it’s now easy!

I

t may surprise you how limited or distorted the average Nigerian knows about the processes involved in egg production before it gets to the supermarket or neighbourhood kiosk. Recently, a friend of mine strongly insisted that commercial chickens globally are chemically induced to produce eggs, after all, how else would a hen lay eggs without being mounted by a cockerel.

Obviously we need a lot of education and enlightenment to correct various errors and distorted views. I also strongly suspect that there are many with distorted views like my friend, who are also not consuming eggs because of a false assumption about it emerging from some scientific experiments instead of natural processes Without re-kindling the age-old debate over which poultry product came first, between the chicken and the egg, it would be nice for every Nigerian to know that they can now conveniently farm at the back yard, thanks to the new innovative Eco-Pro caging system from Gartech Poultry Equipment Co. But before we go further into the new innovation, it is important to establish some basic facts and to clear up some misconceptions.

The Egg Cycle Most of the eggs we eat come from hens and it is an all-day event for a chicken to make an egg and to lay it.

The hen is born with many tiny yolks in her body. At reproductive maturity (usually 16 -18 weeks), one at a time, the yolk grows into full size going through its oviduct, forming the albumen (egg white), then finally the formation of the egg shell and its external pigmentation (mostly white or brown). The process repeats itself every 24.2 hours depending on the quantity and quality of feed consumed. So at best each hen can lay approximately one egg a day. Note that only hens lay eggs. Their male counterparts do not.

Backyard Farming Made

Easy Ideally, backyard farming should be done in a somewhat contained system, maximizing limited land resources, minimizing supplement or feed wastage and preserving eggs, however this is not commonly the case. Typically, backyard poultry farming is done using the deep litter (floor rearing) system because of the cost associated with having cages that would require complex and costly water supply fixtures and general investment costs.

With the help of the new Eco Pro innovative cages, the most ideal and convenient backyard small scale egg farming can be done. The system has in it an in-built water containing system that house the daily water supply and feeding need for the full capacity of birds housed. In addition, feed wastage and egg soiling would be highly minimized as the cages have feeding troughs and “roll out” egg collection systems in them. Home owners would simply be required to load in the feed into the feed trough and top up the in-built water reserve tank while going about their daily business. The whole process can be observed 56 to 112 (or more) hens at a time depending on family size, appetite and market network. This would also allow the home owner-turned-farmer to see that only feed, water and good shelter are required for the hen to continue its natural process of laying egg daily How about the litter?

Much of what goes into one end of a chicken actually comes out on the other end. In other words, every bird would produce litter daily. The same thing goes for all back yard poultry rearing system. The good news here is that due to the localized and contained state of the birds in the cages, their litter can be contained and better managed. Also, the population of poultry is relatively low, thus a lower litter burden. The manure can be piled up and composted to be further used as fertilizer for backyard vegetable farming. Manure can also be daily collected and disposed off since it’s a significantly lower

population of birds thus the burden is low.

Why backyard?

Engaging in backyard farming puts the production process directly under your control from “farm to fork”, in this case, from “backyard to fork”. It also presents a rare opportunity for young children to intimately learn about the chicken farming giving them better understanding and a good foundation about their sources of food.

It is also a form of empowerment as it could help rural dwellers earn extra income on the side without taking away their current source of livelihood. It can equally limit environmental degradation. The more this is taken up by households, the less packaging materials (cartons, plastics, labels etc) go into circulation, thereby limiting our environmental foot print.

A seed for commercialization?

When backyard poultry activities become exciting, the passion for commercialization can be triggered. Our love for poultry meat and eggs is growing at a staggering pace. Every year, Nigeria imports more over a million metric ton of poultry products valued at nearly US$1 billion to meet domestic demand.

Nigeria’s love for chicken and eggs is increasing with the size of its rapidly growing population. Even with massive import, Nigeria’s poultry market is experiencing a boom as a result of its rapid population and economic growth.

Any incoming commercial poultry farmer who knows his onions would not likely regret the move. Egg production particularly holds a lot of promise for Nigerian entrepreneurs. While it may be relatively easy to smuggle poultry meat, eggs are much more delicate and have a sensitive shelf life. So egg production holds a lot of opportunities and less competition from foreign imports.

As our population increases, and the size and earning power of the African middle class grow, the demand for eggs and other poultry products will likely put a lot of pressure on the already limited production.

Households, restaurants, processed food producers, fast food businesses, bakeries and confectioners constitute a large chunk of annual egg demand and make very good potential targets even for small scale egg suppliers.

Source: Animal Care Services Konsult Nigeria limited

L-R: Wasiu Adumadeyin, President, National Association of Proprietors of Private Schools, Yetunde Odejayi ,representative of the deputy governor of Lagos state, Kayode Oni, chairman, NAPPS week 2018, Agenga Williams, director, private education and special programme, Ministry of Education, and Omotayo George, senior manager, youth segment, MTN Nigeria, during the grand finale of the NAPPS week 2018, in Lagos.

L-R: Kayode Kowoforola, judge, Quramo Writers’ Prize 2018; Gbemi Shasore, executive publisher, Quramo Publishing; Emmanuel Michael, winner, Quramo Writers’ Prize 2018; Aduke Gomez, head judge; Edify Yakusak, judge, and Olakunle Kasumu, judge, at the Quramo Writers’ Prize 2018 in Lagos, yesterday.

Pic by Olawale Amoo

L-R: Ebose Augustine Osegha, MD/CEO, Elijah Akpan, chairman and Ime Umoh, company secretary/Legal Adviser all of Anchor Insurance Company Limited during the company ‘s 28th annual general meeting on Friday at Le Meridien Hotel, Uyo, Akwa Ibom State

L:R: Patrick Anegbe, managing director Intercontinental Distillers Limited (IDL), congratulating IDL No 1 distributor, managing director, Divine Chinoz Aba Solomon Umerah and IDL No2 Distributor managing director YTT Enterprises Ltd, Yemisi Adewusi at IDL Distributors Award held in Abeokuta, Ogun State

Tuesday 23 October 2018

BUSINESS DAY

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Tuesday 23 October 2018

INTERVIEW

Ecobank in renewed digital push targets

Ecobank is pounding pavements to drive its digital platforms, knowing the future of banking belongs to nimble financial service pro savvy customers who place ease of transaction above everything else. In this interview, newly appointed managing director, PATRIC OSAE-BROWN and Lead Analyst, LOLADE AKINMURELE, about the bank’s digital strides.

F

ootprints prior appointment as managing director I am a chartered accountant by training and started out in Investment banking. I joined Ecobank in 1996 and was initially responsible for the Lagos mainland branch and had the privilege of opening our first set of market branches.

In 1999, I was appointed Group Chief Financial Officer, so I moved to our group office in Lome where I worked for two years.

I was then appointed the Executive Director Retail banking between 2001-2006, during which we launched the first master card in West Africa in 2004.

In 2006, I moved back to the group office as Managing Director, operations and technology for retail banking. Between 2006-2011, the Group embarked on a massive geographical expansion into more countries.

By 2010, we had expanded to 30 countries from 13 in 2006.

In 2011, our presence spread to three additional countries, a total of 33, which is where we are currently.

Although there are 3 other African countries where we don’t have banking operations but we have representative offices in, so we are in 36 African countries.

We have the largest geographical footprint in Africa of any corporate business or banking institution. We are also present in France, in the UK and in China, where we facilitate global trade for our customers.

In 2016, I was appointed Group Executive director, Consumer banking.

Together, we set out a fiveyear plan, the first two years would be to lay a solid foundation and the next three to accelerate services.

That plan included bringing banking services to 100 million individuals in Africa across our network and therefore I took up the responsibility of Consumer banking. Once the goal was defined, we are wasting no time in building the core platform that will enable us achieve that objective.

I did that till July when I was appointed MD/CEO of Ecobank Nigeria and here I am with the mandate to deliver the brand promise of the bank and that is an exciting mandate when you look at Nigeria, being the most populated country in Africa.

How Nigeria’s consumer market compares to African peers There are certain commonalities across the region and there

are some specifics that are relative like the infrastructure and the operating environment.

Of the 1.3 billion people in Africa, about 60% of bankable adults are unbanked while only about 40% have formal bank accounts. Yet the African adult remains industrious and entrepreneurial. That therefore suggests the preponderance of informal banking activities.

Constraints of boosting financial inclusion The key constraints to financial inclusion include; the cost of access – the location of formal banking service is quite distant to the place of business or the place of residents of the average African, that encourages local thrift societies and small units of micro lenders there top serve the financial needs of the excluded.

Lack of core identification and documentation is another challenge. Until recently the average African was required to present an international passport, driving license and other means of identification and these are items are quite difficult to find for some people. As a result, they shy away from formal banking because they don’t want to face any form of interrogation.

There’s also the challenge of trust and safety.

Solution A lot of references have been made to Kenya, where telcos drive the adoption of digital payment platforms.

The sustainable form of banking for Africans remains the bank account. The opportunity today is that with technology, mobile phones are pervasive. An average adult has a mobile phone, so accessibility is easier.

Ecobank is leveraging on such channels to bring banking to every household and that’s where the potential is, for a country like Nigeria.

The CBN has taken certain steps, starting first with an identification database. The Bank Verification Number (BVN) is a form of identification and it improves the acceptance of everybody that will participate you need a standard identification.

The Bio metric is the most important form of identification and that has started to widen the number of people who have a means of identification, not only for banking but also to track other things like their health status.

It goes without saying the existence of mobile telephony provides the ability to distribute at scale.

Part of what makes FMCG companies succeed is their distribution network. All they need to do is ensure that they can produce at scale and bring their products to every household.

That is what Ecobank is doing and the target is to leverage our presence in Africa to bring financial services to 100 million people by the end of 2020.

We are building rails that will enable the bank distribute effectively, after which we then develop a product that will ride on those rails to provide value.

Today, you can open a bank account with the Ecobank Express Account straight on your mobile phone. We are also expanding our network through what we call Ecobank express Fund which is an agency network and is serviced on the mobile application.

The mobile app enables you make deposits and withdrawals by going to an agent near you.

Our plan is to establish Ecobank Express points in every neighbourhood in Nigeria.

Digital strides

My mandate in Nigeria is to deliver the brand promise of Ecobank as the platform of choice for convenient, affordable and instant banking services to customers in Nigeria.

It’s our ambition that we are within easy reach in your locality at an Ecobank express point through our agents or within your arm’s length on your phone; you can open an account and you can make payment; you can receive payment straight on your phone and at any time cash out through our agent at any Ecobank Xpress point or the ATM. In addition, our multi-featured digital payment solution, EcobankPay – this is our rebrand of the Ecobank Scan+Pay QR offering designed to allow us deliver unified and instant selfservice across a range of interconnected payment solutions.

This allows our customers pay in-store via the Ecobank mobile

app or *326#. It is the Ecobank everywhere strategy across Africa that we are implementing in Nigeria.

The uniqueness of the mobile platform is that for Ecobank Pay you are able to have one merchant ID that works for the payment of goods and services.

The app simply generates your QR code and it doesn’t matter which of the QR payment platforms the customer has, it works across all platforms and has been made convenient for the merchants. The target is for SMEs across Nigeria and Africa to have an Ecobank Pay. Aba is one of the cities catching on the Ecobank Pay. The commerce between Aba and the Northern part of Nigeria and Lagos makes the platform suitable for ease of transactions.

For instance, with the Ecobank Pay, payments for goods and services can be made from any location once the merchant scans his QR code and forwards the code to a creditor. It can be forwarded through diverse

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100m Africans by 2020

oviders able to meet the changing needs of technology CK AKINWUTAN, talks to BusinessDay’s Editor, ANTHONY from any Ecobank ATM using eTokens generated from the Ecobank mobile app. The e-token generated can also be redeemed at agent locations within any of Ecobank’s 33 territories across middle Africa. Additionally, customers can send e-tokens to third parties via SMS, email or social media.

For the unbanked people in rural areas, where there may be no internet, can leverage the USSD codes for transactions on our platforms.

The whole idea is leveraging on the mobile phone to reduce cost of distribution.

platforms, either through WhatsApp or Facebook, since it can be generated as an image, and the merchant gets credited within seconds.

It eliminates the need for physical cash when transacting and is as reliable as it is also accessible at all times.

It is also very affordable, considering other forms of payments like the POS require the purchase of the POS machine and electricity. The Ecobank Pay just involves generating a QR code that can be used for payment and can’t be used to withdraw, meaning there’s better security.

You can place the QR code anywhere visible for payment purposes after you have generated it on your mobile phone.

Ecobank has built an end to end platform that leverages technology in order to bring banking services to every household for every transaction.

Another of such platforms is the Ecobank Express cash. Xpress Cash allows customers to withdraw cash

The role of telecommunication companies in driving financial inclusion They provide the rails for sending messages and help put banking products into transmission protocols. The banks can leverage the infrastructure of telecoms and the wide distribution network that they have to provide people with access to financial services.

Nigeria’s expansive landmass means the telcos provide a significant backbone that translates into efficiency and ability to reach higher numbers for financial service providers.

In Africa, Ecobank is the largest banking partner to most of the local operators in various countries, including Nigeria. So for us, we collaborate with the Telcos not compete with them.

What the CBN has done is to provide a financial inclusion model, part of it is already being executed and will enable the financial system leverage on this development in order to achieve financial inclusion.

The responsibility of safeguarding depositors’ funds will always remain with the Central bank, as seen in the recent actions which they have done credibly, providing financial system stability and inspiring investor confidence.

The telecoms also have regulations and the regulator, Nigerian Communications Commission (NCC), has done incredibly well, providing an enabling framework for the telcos to thrive.

The way forward for Nigeria is a positive collaboration between the two industries. The market opportunity is huge so also is the potential for improving the economic well being of the country and creating new entrepreneurs.

Actualising that economic potential requires all financial stakeholders to collaborate positively and in an organised manner.

Challenges on the job Rather than challenges, I have had opportunities. Working

here, the team and I have been able to make impact on the lives of Africa’s not just Nigerians in terms of affording them access to affordable financial products and services.

Ecobank has more than 1.5 million customers and is one of the large ATM players in the business as we have more than 1000 Automated Teller Machines (ATM). We also have more than 5 million cards and are an active participant in the digital space in Nigeria.

Ecobank was the first bank to issue an international credit card in Nigeria and one of the first 5 entities licensed for mobile money in Nigeria. We were the first banking institution to be a member of the Fintech association of Nigeria.

Our customers are happy and we want to continue striving to ensure they stay that way by helping them achieve their financial goals.

We are the leading bank in Ghana, Togo ,Senegal and Chad, as well as among the top 3 in Cote d’Ivoire and in more than 15 countries. In Nigeria we are edging closer to our goal.

We seek to deliver banking services to every Nigerian household by optimising the performance of our digital platforms, rationalising physical locations and establishing a reliable distribution network that is stable and secure.

In the end, we would have achieved growth for customers and shareholders and would be an institution that adds value and seeks to improve on its Corporate Social Responsibility (CSR) whether it is by sponsoring educational activities or recreational activities.

We have grown to become the trusted partner to support regional trade and with our digital transformation we are better able to execute all transactions in record time.

At the Corporate level, we have partnered with the Bank of Industry and Development Bank of Nigeria to energise the SME sector in order to prepare them for growth, since they are the engine of any economy.

Outlook for loans Ecobank is focusing increasingly on asset quality because of what the challenges have been when the global oil price slumped to a record low in 2016.

We are now refocusing strongly on our target market and relationship with customers.

We are deploying more electronic payment platforms which lends itself to better analytics such that we are able to respond to the right customer requirement. Those analytics help us differentiate a long term financ-

ing need from a short term financing need or a permanent short term financing need.

We have a responsibility to our depositors’ funds, so we are learning to manage risk better.

The expansion of the services part of the banking industry and gains from going digital relieves the pressure to expand loans to meets certain return targets.

For SMEs, their ability to save daily is as important for the business as is securing loans.

Providing daily savings for the households and SMEs takes the pressure to just extend loans and when we do extend those loans, the discipline to pay is better.

In the last two years, we have focused on building the foundation which was “efficiency.”

Then we had to trim operating costs and close some of the physical branches to enable us leverage the investment done on technological platforms.

Impact of oil price rally The oil price rally has lifted the country out of a painful recession. increased oil revenues has enabled better planning for the government, because funding the budget is largely dependent on petrodollars.

Overall, the economy has benefitted in no small way.

That goes without saying, the oil price rally and higher production volumes have stabilised the foreign exchange market.

Capital raising plans and pre-election anxiety The Group office has announced its decisions regarding capital raising and nothing has changed.

Our investors understand the reasons that were enumerated and the time frame. The focus now is to grow the domestic business and grow our balance sheet.

Regarding the upcoming elections, in terms of the business, there has not been any knee-jerk reaction and the business climate is following its normal cycle. Some may make some speculations of opportunities or difficulties, but we are stable in our approach.

Diaspora remittances Ecobank will be putting out a unique product for diaspora remittances on our mobile app.

The product will guarantee rapid transfer of money back home from Nigerians wherever they may be around the world.

T h e re m i t t a n c e a r r i v e s straight in the bank account of the receiver in Nigeria. The platform would not be restricted to only Ecobank account holders but will extend to bank account holders in other banks.

Th target is to make Ecobank a one stop shop for international remittance inflows. These are areas of growth opportunities that the clearer FX framework being implemented by the CBN allows to happen.

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Tuesday 23 October 2018

Tuesday 23 October 2018

C002D5556

BUSINESS DAY

INTERVIEW

19

Ecobank in renewed digital push targets 100m Africans by 2020 Ecobank is pounding pavements to drive its digital platforms, knowing the future of banking belongs to nimble financial service providers able to meet the changing needs of technology savvy customers who place ease of transaction above everything else. In this interview, newly appointed managing director, PATRICK AKINWUTAN, talks to BusinessDay’s Editor, ANTHONY OSAE-BROWN and Lead Analyst, LOLADE AKINMURELE, about the bank’s digital strides.

F

ootprints prior appointment as managing director I am a chartered accountant by training and started out in Investment banking. I joined Ecobank in 1996 and was initially responsible for the Lagos mainland branch and had the privilege of opening our first set of market branches.

In 1999, I was appointed Group Chief Financial Officer, so I moved to our group office in Lome where I worked for two years.

I was then appointed the Executive Director Retail banking between 2001-2006, during which we launched the first master card in West Africa in 2004.

In 2006, I moved back to the group office as Managing Director, operations and technology for retail banking. Between 2006-2011, the Group embarked on a massive geographical expansion into more countries.

By 2010, we had expanded to 30 countries from 13 in 2006.

In 2011, our presence spread to three additional countries, a total of 33, which is where we are currently.

Although there are 3 other African countries where we don’t have banking operations but we have representative offices in, so we are in 36 African countries.

We have the largest geographical footprint in Africa of any corporate business or banking institution. We are also present in France, in the UK and in China, where we facilitate global trade for our customers.

In 2016, I was appointed Group Executive director, Consumer banking.

Together, we set out a fiveyear plan, the first two years would be to lay a solid foundation and the next three to accelerate services.

That plan included bringing banking services to 100 million individuals in Africa across our network and therefore I took up the responsibility of Consumer banking. Once the goal was defined, we are wasting no time in building the core platform that will enable us achieve that objective.

I did that till July when I was appointed MD/CEO of Ecobank Nigeria and here I am with the mandate to deliver the brand promise of the bank and that is an exciting mandate when you look at Nigeria, being the most populated country in Africa.

How Nigeria’s consumer market compares to African peers There are certain commonalities across the region and there

are some specifics that are relative like the infrastructure and the operating environment.

Of the 1.3 billion people in Africa, about 60% of bankable adults are unbanked while only about 40% have formal bank accounts. Yet the African adult remains industrious and entrepreneurial. That therefore suggests the preponderance of informal banking activities.

from any Ecobank ATM using eTokens generated from the Ecobank mobile app. The e-token generated can also be redeemed at agent locations within any of Ecobank’s 33 territories across middle Africa. Additionally, customers can send e-tokens to third parties via SMS, email or social media.

For the unbanked people in rural areas, where there may be no internet, can leverage the USSD codes for transactions on our platforms.

The whole idea is leveraging on the mobile phone to reduce cost of distribution.

Constraints of boosting financial inclusion The key constraints to financial inclusion include; the cost of access – the location of formal banking service is quite distant to the place of business or the place of residents of the average African, that encourages local thrift societies and small units of micro lenders there top serve the financial needs of the excluded.

Lack of core identification and documentation is another challenge. Until recently the average African was required to present an international passport, driving license and other means of identification and these are items are quite difficult to find for some people. As a result, they shy away from formal banking because they don’t want to face any form of interrogation.

There’s also the challenge of trust and safety.

Solution A lot of references have been made to Kenya, where telcos drive the adoption of digital payment platforms.

The sustainable form of banking for Africans remains the bank account. The opportunity today is that with technology, mobile phones are pervasive. An average adult has a mobile phone, so accessibility is easier.

Ecobank is leveraging on such channels to bring banking to every household and that’s where the potential is, for a country like Nigeria.

The CBN has taken certain steps, starting first with an identification database. The Bank Verification Number (BVN) is a form of identification and it improves the acceptance of everybody that will participate you need a standard identification.

The Bio metric is the most important form of identification and that has started to widen the number of people who have a means of identification, not only for banking but also to track other things like their health status.

It goes without saying the existence of mobile telephony provides the ability to distribute at scale.

Part of what makes FMCG companies succeed is their distribution network. All they need to do is ensure that they can produce at scale and bring their products to every household.

That is what Ecobank is doing and the target is to leverage our presence in Africa to bring financial services to 100 million people by the end of 2020.

We are building rails that will enable the bank distribute effectively, after which we then develop a product that will ride on those rails to provide value.

Today, you can open a bank account with the Ecobank Express Account straight on your mobile phone. We are also expanding our network through what we call Ecobank express Fund which is an agency network and is serviced on the mobile application.

The mobile app enables you make deposits and withdrawals by going to an agent near you.

Our plan is to establish Ecobank Express points in every neighbourhood in Nigeria.

Digital strides

My mandate in Nigeria is to deliver the brand promise of Ecobank as the platform of choice for convenient, affordable and instant banking services to customers in Nigeria.

It’s our ambition that we are within easy reach in your locality at an Ecobank express point through our agents or within your arm’s length on your phone; you can open an account and you can make payment; you can receive payment straight on your phone and at any time cash out through our agent at any Ecobank Xpress point or the ATM. In addition, our multi-featured digital payment solution, EcobankPay – this is our rebrand of the Ecobank Scan+Pay QR offering designed to allow us deliver unified and instant selfservice across a range of interconnected payment solutions.

This allows our customers pay in-store via the Ecobank mobile

app or *326#. It is the Ecobank everywhere strategy across Africa that we are implementing in Nigeria.

The uniqueness of the mobile platform is that for Ecobank Pay you are able to have one merchant ID that works for the payment of goods and services.

The app simply generates your QR code and it doesn’t matter which of the QR payment platforms the customer has, it works across all platforms and has been made convenient for the merchants. The target is for SMEs across Nigeria and Africa to have an Ecobank Pay. Aba is one of the cities catching on the Ecobank Pay. The commerce between Aba and the Northern part of Nigeria and Lagos makes the platform suitable for ease of transactions.

For instance, with the Ecobank Pay, payments for goods and services can be made from any location once the merchant scans his QR code and forwards the code to a creditor. It can be forwarded through diverse

platforms, either through WhatsApp or Facebook, since it can be generated as an image, and the merchant gets credited within seconds.

It eliminates the need for physical cash when transacting and is as reliable as it is also accessible at all times.

It is also very affordable, considering other forms of payments like the POS require the purchase of the POS machine and electricity. The Ecobank Pay just involves generating a QR code that can be used for payment and can’t be used to withdraw, meaning there’s better security.

You can place the QR code anywhere visible for payment purposes after you have generated it on your mobile phone.

Ecobank has built an end to end platform that leverages technology in order to bring banking services to every household for every transaction.

Another of such platforms is the Ecobank Express cash. Xpress Cash allows customers to withdraw cash

The role of telecommunication companies in driving financial inclusion They provide the rails for sending messages and help put banking products into transmission protocols. The banks can leverage the infrastructure of telecoms and the wide distribution network that they have to provide people with access to financial services.

Nigeria’s expansive landmass means the telcos provide a significant backbone that translates into efficiency and ability to reach higher numbers for financial service providers.

In Africa, Ecobank is the largest banking partner to most of the local operators in various countries, including Nigeria. So for us, we collaborate with the Telcos not compete with them.

What the CBN has done is to provide a financial inclusion model, part of it is already being executed and will enable the financial system leverage on this development in order to achieve financial inclusion.

The responsibility of safeguarding depositors’ funds will always remain with the Central bank, as seen in the recent actions which they have done credibly, providing financial system stability and inspiring investor confidence.

The telecoms also have regulations and the regulator, Nigerian Communications Commission (NCC), has done incredibly well, providing an enabling framework for the telcos to thrive.

The way forward for Nigeria is a positive collaboration between the two industries. The market opportunity is huge so also is the potential for improving the economic well being of the country and creating new entrepreneurs.

Actualising that economic potential requires all financial stakeholders to collaborate positively and in an organised manner.

Challenges on the job Rather than challenges, I have had opportunities. Working

here, the team and I have been able to make impact on the lives of Africa’s not just Nigerians in terms of affording them access to affordable financial products and services.

Ecobank has more than 1.5 million customers and is one of the large ATM players in the business as we have more than 1000 Automated Teller Machines (ATM). We also have more than 5 million cards and are an active participant in the digital space in Nigeria.

Ecobank was the first bank to issue an international credit card in Nigeria and one of the first 5 entities licensed for mobile money in Nigeria. We were the first banking institution to be a member of the Fintech association of Nigeria.

Our customers are happy and we want to continue striving to ensure they stay that way by helping them achieve their financial goals.

We are the leading bank in Ghana, Togo ,Senegal and Chad, as well as among the top 3 in Cote d’Ivoire and in more than 15 countries. In Nigeria we are edging closer to our goal.

We seek to deliver banking services to every Nigerian household by optimising the performance of our digital platforms, rationalising physical locations and establishing a reliable distribution network that is stable and secure.

In the end, we would have achieved growth for customers and shareholders and would be an institution that adds value and seeks to improve on its Corporate Social Responsibility (CSR) whether it is by sponsoring educational activities or recreational activities.

We have grown to become the trusted partner to support regional trade and with our digital transformation we are better able to execute all transactions in record time.

At the Corporate level, we have partnered with the Bank of Industry and Development Bank of Nigeria to energise the SME sector in order to prepare them for growth, since they are the engine of any economy.

Outlook for loans Ecobank is focusing increasingly on asset quality because of what the challenges have been when the global oil price slumped to a record low in 2016.

We are now refocusing strongly on our target market and relationship with customers.

We are deploying more electronic payment platforms which lends itself to better analytics such that we are able to respond to the right customer requirement. Those analytics help us differentiate a long term financ-

ing need from a short term financing need or a permanent short term financing need.

We have a responsibility to our depositors’ funds, so we are learning to manage risk better.

The expansion of the services part of the banking industry and gains from going digital relieves the pressure to expand loans to meets certain return targets.

For SMEs, their ability to save daily is as important for the business as is securing loans.

Providing daily savings for the households and SMEs takes the pressure to just extend loans and when we do extend those loans, the discipline to pay is better.

In the last two years, we have focused on building the foundation which was “efficiency.”

Then we had to trim operating costs and close some of the physical branches to enable us leverage the investment done on technological platforms.

Impact of oil price rally The oil price rally has lifted the country out of a painful recession. increased oil revenues has enabled better planning for the government, because funding the budget is largely dependent on petrodollars.

Overall, the economy has benefitted in no small way.

That goes without saying, the oil price rally and higher production volumes have stabilised the foreign exchange market.

Capital raising plans and pre-election anxiety The Group office has announced its decisions regarding capital raising and nothing has changed.

Our investors understand the reasons that were enumerated and the time frame. The focus now is to grow the domestic business and grow our balance sheet.

Regarding the upcoming elections, in terms of the business, there has not been any knee-jerk reaction and the business climate is following its normal cycle. Some may make some speculations of opportunities or difficulties, but we are stable in our approach.

Diaspora remittances Ecobank will be putting out a unique product for diaspora remittances on our mobile app.

The product will guarantee rapid transfer of money back home from Nigerians wherever they may be around the world.

T h e re m i t t a n c e a r r i v e s straight in the bank account of the receiver in Nigeria. The platform would not be restricted to only Ecobank account holders but will extend to bank account holders in other banks.

Th target is to make Ecobank a one stop shop for international remittance inflows. These are areas of growth opportunities that the clearer FX framework being implemented by the CBN allows to happen.

20

BUSINESS DAY

AVIATION

GUIDE

C002D5556

in association with

Delta Airlines announces $1.6bn pre-tax income for September quarter 2018 Stories by IFEOMA OKEKE

D

elta Air Lines has reported financial results for the September quarter 2018 indicating adjusted pretax income for the September quarter 2018 as $1.6 billion, and adjusted earnings per share were $1.80, at the high end of guidance.

Adjusted earnings per share were up 16 percent compared to the prior year quarter, driven by revenue momentum, tax reform benefits and a four percent lower share count. Results reflect a $30 million negative impact from Hurricane Florence.

“Our solid eight percent revenue growth, combined with flat non-fuel unit cost performance, helped offset 85 percent of the $655 million fuel cost increase in the quarter.

“These achievements are a testament to the strength of the Delta business model and the hard work of the Delta people, and I am pleased to recognize their performance with an additional $395 million toward 2018 profit sharing,” Ed Bastian, Delta’s chief executive officer said.

“Our commercial momentum and improved cost trajectory give us confidence that we are on a path to deliver continued top-line growth and

Tuesday 23 October 2018

expand margins as we move into 2019,” he added.

Delta’s adjusted operating revenue of $11.8 billion for the September quarter improved eight percent, or $912 million versus the prior year. This quarterly revenue result marks a record for the company, driven by improvements across Delta’s business, including a nearly 20 percent increase in premium product ticket revenues and doubledigit percentage increases in cargo, loyalty and Maintenance, Repair and Overhaul revenue.

Total unit revenues excluding refinery sales (TRASM) increased 4.3 percent during the period driven by strong demand and improving yields. Foreign exchange benefit of approximately half a point was offset by the impact of Hurricane Florence.

“We generated record revenues in the September quarter on strong demand across the business and a favorable yield environment. In the December quarter we expect total unit revenue growth of three to five percent, driving full year revenue growth to eight percent, the high end of our guidance,” Glen Hauenstein, Delta’s president said.

“The benefits of our brand, industryleading network, and relentless focus on the customer are driving revenue growth, improving margins and accelerating the pace of our recapture of higher fuel costs.

Despite an expected 30 percent

increase in fuel price, Delta expects pre-tax margins to stabilize in the December quarter driven by continued top-line growth and improving cost performance.

Cost performance Total adjusted operating expenses for the September quarter increased $1.0 billion versus the prior year quarter, with more than half of the increase driven by higher fuel prices.

CASM-Ex was flat for the September quarter 2018 compared to the prior year period, a three-point improvement from the June quarter. Efficiency gains successfully offset cost pressures from higher revenue-related costs and product and employee investments.

“The September quarter marked an important inflection point in changing our non-fuel cost trajectory, and we expect to deliver on our full-year target of one to two percent non-fuel unit cost growth,” Paul Jacobson, Delta’s chief financial officer, said.

“Continued focus on cost control, along with incremental efficiency gains from refleeting and One Delta, give us confidence in our ability to keep our non-fuel unit cost growth below two percent next year,” Jacobson added.

Cash flow and shareholder returns Delta generated $1.5 billion of operating cash flow and $655 million of free cash flow during the quarter, after the

investment of $865 million primarily for aircraft purchases and modifications.

For the September quarter, Delta returned $566 million to shareholders, comprised of $325 million of share repurchases and $241 million in dividends.

Operational reliability Delta delivered 97 days of zero system cancellations across the combined mainline and Delta Connection operations on a year-to-date basis, up 46 days from 2017 and exceeding the previous full-year record in the first nine months of the year.

The airline achieved industry-leading operational performance with mainline on-time performance (A0) of 71.5 percent year-to-date; and top baggage performance as measured in the latest Department of Transportation report.

Network and partnerships The airline achieved major milestones in the Delta/Korean joint venture including the completion of pricing harmonization, co-location of teams in Seoul and Atlanta, and broad alignment of commercial strategy.

It signed a definitive agreement with WestJet that, after regulatory approval, which will create a trans-border joint venture serving more than 30 cities, which covers over 95 percent of U.S.-Canadian demand, providing enhanced offerings and more choice for customers.

Ethiopian to resume flights to Mogadishu

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thiopian Airlines, the largest Aviation Group in Africa and SKYTRAX certified 4 Star global airline, has announced the resumption of its flight to Mogadishu, Somalia, effective 2 November 2018.

Regarding the resumption of the Mogadishu flights, Tewolde Gebremariam, Group CEO of Ethiopian Airlines, said: “It gives us a great pleasure to resume flights to Mogadishu, the capital Somalia after stopping the service over four decades ago. I wish to express my gratitude to the Governments of Ethiopia and Somalia for making the resumption of these flights possible.

“The flights will play a significant role in strengthening the people-to-people and economic ties between the two neighborly and sisterly countries. The flights will also enabletheimportantSomaliDiasporainthe Americas,Europe,Asia,MiddleEast,Europe and Africa to travel to their homeland via Addis Ababa thanks to our global network of over 116 international destinations.

“Our flights will quickly grow to multiple daily flights given the huge volume of traffic between the two sisterly countries and the significant traffic between Somalia and the rest of the world.” The resumption of the service to Somalia came 41 years after Ethiopian Airlines Group stopped its route to Mogadishu in the 1970s.

Ethiopian Airlines (Ethiopian) is the fastestgrowingAirlineinAfrica.Initsseventyplus yearsofoperation,Ethiopianhasbecomeone of the continent’s leading carriers, unrivalled inefficiencyandoperationalsuccess.

Ethiopianairlinecommandsthelion’s share of the Pan-African passenger and cargo network operating the youngest and most modern fleet to more than 116 international passenger and cargo destinations across five continents.

Dana Air reaffirms commitment to youth empowerment, sponsors first cabin crew contest

O

ne of Nigeria’s leading airlines Dana Air, has reaffirmed its commitment to youth empowerment and professionalism in the aviation industry with her sponsorship of the first ever Cabin Crew Contest in Africa.

The Cabin Crew contest which is the first of its kind in sub Saharan Africa is an initiative of the Crew Training Institute (CTI), launched on the 18th of November, 2016 to train and impact prerequisite knowledge and soft skills needed for aspiring Cabin Crew.

Commenting on the initiative, Obi Mbanuzuo, the chief operating officer of Dana Air, said, ‘Dana Air has scored another first in the aviation industry for headlining the sponsorship of the first ever cabin crew contest in Africa. We are boundless in our orientation

L-R: Egbere Emere Okori, Eleme, Rivers State, HRH, Appolus Chu; King of Ikate Land, Oba Saheed Elegushi; and the All Progressives Congress (APC) governorship candidate, Jide Sanwo-Olu, during the 8 days firdaus prayer and reception in honour of Oba Elegushi’s late mother-in-law, Ramota Oshodi, held last weekend in Lagos

as an airline and we will continue to impact the industry, aspiring aviators and of course our guests

positively as always.’’

Speaking further Obi said, “When we decided to sponsor the

contest, we considered the fact that somebody will be empowered, exposed , we also considered the platform it will give aspiring aviators and we felt it was another opportunity for the flying public to have a better perception and understanding of the industry.’’

Also speaking on the initiative, Katheryn Lademo, the CEO of Crew Training Institute, said, “We are a thorough institute with a passion for what we do. We appreciate Dana Air for taking the challenge of sponsoring this contest which is the first of its kind in sub Saharan Africa.’’

Katheryn explained that the initiative is a contest where cabin crew aspirants are put through a screening process to select the finest cabin crew talent who will emerge as “The Cabin Crew”. The winner wins a cabin crew job, a

trip to South Africa to experience crew lifestyle and finishing school training at Crew Training Institute.

She noted that ‘The primary focus of this annual TV show is to promote youth development and job creation for the teaming population of youth who are desirous to start a career in the aviation sector as cabin crew.’’

Both males and females above 21 years, with an arm reach of 212cm while standing or on tiptoes can register. Candidates must be up to 5ft2 in height, must know how to swim and must be able to adapt to new places.

Reputed for its innovative online products and services, worldclass in-flight service and unrivalled on-time departures, Dana Air operates daily flights from Lagos to Abuja, Port Harcourt, Uyo and Owerri.

BDTECH

BUSINESS DAY

Tuesday 23 October 2018

21

In association with

Facebook expands fact-checking efforts into Nigeria

…Partners organisations to eliminate misinformation on social media

Stories by JUMOKE AKIYODE-LAWANSON

J

oining fact-checking programmes in Kenya and South Africa, Facebook recently announced the launch of third-party factchecking to help assess the accuracy of news in Nigeria, and reduce the spread of misinformation, whilst improving the quality of news people find on its platform.

Working with two partners, Africa Check; Africa’s first independent fact-checking organisation and AFP, a well-respected news organisation, both are part of a global network of fact-checking organisations, certified by the non-partisan International FactChecking Network.

Facebook’s fact-checking programme relies on feedback from the Facebook community, as one of many signals Facebook uses to raise potentially false stories to fact-checkers for review. Local articles will be fact-checked alongside the verification of photos and videos. If one of our factchecking partners identifies a story as false, Facebook will show it lower in News Feed, significantly reducing its distribution.

Akua Gyekye, Facebook’s public policy manager, Anglophone West Africa commented: “Nigeria is important to us and we’re com-

L-R: Chris Erewele Snr; executive director, Broadbased Communications Ltd (BBC), Henry Iseghohi; MD/CEO of Broadbased Communications Ltd (BBC), Yusuf Kazaure; MD of Galaxy Backbone, Chidi Ibisi; executive director, business development, (BBC),and Chinenye Onuoha-Areola; group sales manager, (BBC), during the presentation of Telecom Wholesale Company of the year 2018 award to Broadbased Communications Ltd at the Nigeria Tech Innovation and Telecom Awards (NTITA) 2018 held on Friday 12th October 2018 in Lagos.

mitted to taking our responsibility seriously in tackling the spread of false news. We know that there is no silver bullet, and believe that a multi-pronged approach is the best strategy, and a key solution is identifying and demoting false news. Once a fact-checker rates a piece of content as false, we’re able to reduce its future views by an average of 80 percent, helping

to curb economic incentives and reduce its spread.”

When third-party fact-checkers write articles about a news story, Facebook will show these in Related Articles immediately below the story in News Feed.

Page Admins and people on Facebook will also receive notifications if they try to share a story or have shared one in the

past that’s been determined to be false, empowering people to decide for themselves what to read, trust, and share.

“We’re pleased to partner with Africa Check and AFP to expand our fact-checking efforts into Nigeria, joining the recently launched South Africa and Kenya programmes. Fighting the spread of misinformation via news ar-

ticles, photos and videos will help to build a better informed community and help verify the stories flagged by our community in Nigeria,” said Joycelyne Muhutu-Remy, Facebook’s strategic partner manager, media partnerships, Africa.

Commenting on the partnership, David Ajikobi, Africa Check’s Nigeria editor, said: “Nigeria has experienced a surge in misinformation on social media, particularly about health issues not just limited to health risks and disease prevalence but also including purported cures and treatment. The partnership with Facebook presents us as fact checkers a unique opportunity to tackle misinformation on this key platform. We expect that as we move along, millions of Nigerians who get their news through Facebook will start seeing less content that may be socially harmful.”

Michèle Léridon, AFP Global News director added: “We are delighted with this new contract with Facebook in Nigeria, South Africa and Kenya alongside Africa Check, which is renowned for its fact checking work in Africa.

The different initiatives set up by AFP in the fight against disinformation testify to the Agency’s expertise and credibility in the verification of information at a time when false news is proliferating.”

Broadbased Communications wins Telecom Wholesale Company of the year award

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t the Nigeria Tech Innovation and Telecom Awards 2018 organised by Association of Telecom Companies of Nigeria (ATCON), Broadbased Communications Ltd, won the Telecom Wholesale Company of the year 2018 award.

Broadbased Communications operates a non- compete, nondiscriminatory, open access Metropolitan Fiber Optic Network

covering all the major business districts in Lagos.

Consequently the company provides Fiber Optic Network connectivity for Mobile Network Operators, 4G Network Operators, all the Submarine Cable Landing Stations, all Major Internet Service Providers, all Data Centers, Nigeria Internet Exchange Point, major Global Telecom Operators, all the Banks, the Nigerian Stock Exchange, all Electronic Payment

Switching and Processing companies, Oil Companies, major Corporate firms and Residential Estates in partnership with other Telecom Service Providers in each Estate.

Speaking on the award, Henry Iseghohi, the company’s MD/CEO stated that this award is a testament to the company’s dedication to the open access, non- compete model, the goodwill of our esteemed customer base, the hard

work and dedication of the Staff of Broadbased Communications.

Chris Erewele Snr, the group executive director, stated that this award will spur the Broadbased Team to remain committed to the provision of quality services to customers. He appealed to various stakeholders in the industry to work together to address the issues facing the industry including indiscriminate destruction of cables by road construction com-

panies in Lagos.

Chidi Ibisi, the executive director, business development, said that “to address the needs of our customers, they install their cables with a fleet of 11 horizontal drilling equipment with redundant cable routes to over 20 Points of Presence (POPs) in Lagos with Packet Transport Network nodes in each POP to automatically reroute the traffic in case of a cable cut.”

22

BUSINESS DAY

Tuesday 23 October 2018

BDTECH

E-mail: jumoke.akiyode@businessdayonline.com

‘Technology will drive Nigeria’s growth towards reaching global relevance’ JUMOKE AKIYODE-LAWANSON

M

anaging Director, Africa operations of Inlaks, Femi Adeoti has said that technology which is a major force in the innovation value chain will continue to drive growth to attain national and global relevance.

Adeoti who was a guest speaker at the series on financial technology organised by the Vanguard Media further highlighted that mobile payments technology is one of the ways innovation is paving the way for economic prosperity.

He noted that mobile money is becoming increasingly significant, especially in the context of developing economies where many low-income households and microenterprises do not have ready access to financial services.

“The biometrics process in banking institutions took Know Your Customers (KYC) beyond the bank branches, equipping them to provide safer payments, transfers, simplified banking and fraud reduction,” he said.

According to Adeoti, the Shared Agent Network (SAN), a program of the Bankers Committee and the Central Bank of Nigeria [CBN], which

L-R: Ayuba Shuaiba; secretary, Universal Service Provision Fund (USPF), Abdullahi Garba Abbas; commissioner for environment, Plateau state, Umar Garba Danbatta; executive vice chairman/CEO Nigerian Communications Commission (NCC), Bako Wakil; head technical standards and network integrity, NCC, Usman Malah; chief of staff to the executive vice chairman,NCC and Helen Obi; head zonal operation NCC, during the Broadband Engagement Forum in Kano on October 18, 2018.

enables financial inclusion “is made possible through the use of mobile and digital payments platforms.”

Adeoti also gave an instance of the Treasury Single Account [TSA], a public accounting system powered by technology which links various government accounts with the view of ensuring that all revenue receipts and payments are done through a “Consolidated Revenue Account (CRA) at the Central Bank of Nigeria (CBN).

This has enabled regular and effective monitoring of government cash resources,

helping the federal government gain a stronger hold on its finances and reduce fraud ultimately.

He, therefore, pointed out that, “If a country has a fragmented system for handling government revenues through the banking system, it is a critical public financial management weakness that needs to be addressed”.

Expatiating on the use of technology in helping to cater to financial inclusion in the country, Adeoti explained that the CBN has granted an approval-in-principle [AIP] to Inlaks to operate as a super-

agent to enhance financial inclusion strategy in Nigeria, authorising Inlaks to work with the CBN and its partners to reach the underserved population and the financially excluded.

The aim of this, he emphasized, “is to ensure that the unbanked population in Nigeria have access to affordable financial services through CBN’s agent network that will address social challenges in key areas such as health insurance, credit accessibility, savings, and wage payment among others”.

The Vanguard Economic

series attracted dignitaries from the ICT industry, including; Tinuade Awe; executive director (Regulation), Nigerian Stock Exchange, Yusuf Kazaure; MD/CEO, Galaxy Backbone, Ogbonnaya Ugama; deputy director, policy & competitions, Nigerian Communication Commission, (NCC), Sam Amuka; chairman, Vanguard Newspaper, amongst others.

Inlaks is a leading system integrator in Sub-Saharan Africa. The company partners leading OEMs in the technology industry to provide world-class information technology solutions that exceed the needs of its customers.

Over the years, Inlaks has built a reputation as the foremost ICT and Infrastructure Solutions Provider, helping customers effectively seize new market and service opportunities.

With an impressive customer base that includes six Central Banks in West Africa, 18 of the 24 banks in Nigeria and other major customers in the West African region, Inlaks has become the dominant Information Technology Company in Africa.

Inlaks’ customers cut across various segments including banking, telecommunication, oil/gas, power, utilities and the distribution sectors of the economy.

China to illuminate its city with artificial moon JOSEPH MAURICE OGU

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hina has unveiled plans to do away with streetlights.

By 2020, the city of Chengdu will be illuminated with “artificial moon”, according to Wu Chunfeng, chairman of Chengdu City Aerospace Science and Technology Microelectronics System Research Institute.

The testing of the technology, which started years ago, is now ready, according to Chunfeng. The city’s streetlights will be replaced with satellite that will boost the glow of the real moon.

The artificial moon, which is said to be eight times brighter than the real moon, will be able to light an area within a diameter up to 80 kilometres. Meanwhile, the precise illumination range can be controlled within a few dozen meters.

Chunfeng said the manmade moon will have a coating that can reflect light from the sun with solar panel-like wings, adding that the angles of these wings can then be adjusted to allow the light to focus on a precise location.

However, the exact details of the spacecraft, the launch date and how the artificial moon would be maintained were not revealed.

Mobile Money Agents Conference to focus on driving financial inclusion JUMOKE AKIYODE-LAWANSON

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s banks, telecommunications operators an fintechs in Nigeria push towards ensuring that the country’s financial inclusion rates are deepened to cut exclusion rate from 40 percent to 20 percent by year 2020, the Association of Mobile Money Agents in Nigeria (AMMAN) is also placing emphasis on the need to drive the Central Bank of Nigeria (CBN) initiative for financial inclusion.

The association says its 3rd annual conference to be held on November 8, 2018 will focus on how to drive the financial inclusion initiative of the CBN, by gathering experts and key stakeholders to discuss the theme; ‘Driving Inclusion: Exploring Agency Banking with Shared Network.’

Victor Olojo, national president, AMMAN, said the event would help set a positive agenda for stake-

holders and the country in the Shared Agent Network Expansion Facilities (SANEF) designed to extend financial services to 60 million financially excluded Nigerians by year 2020.

“Shared Agent Network Expansion Facilities an initiative of CBN and Bankers Committee entails an aggressive roll out of 500,000 agent network to offer basic financial services, such as Cash-in, Cash-out, funds transfer, bill payments, airtime purchase, government disbursements as well as remote enrolment on BVN to an estimated 60 million Nigerians that are currently under-banked. We are the key actors in this initiative,” he said.

“We expect agents from all the state chapters and more important for us is the need to have a round table discussion with the regulators, operators, agents and other stakeholders. We are also trying to see how we can attract insurance firms.

As agents we can issue out

third party insurance policies and more. We are also trying to play our role in CBN’s vision of achieving 80 percent financial inclusions,” Olojo added.

Keynote speakers at the event include; Jacqueline Jumah, financial inclusion expert from Kenya, Henry Chukwu, agent network specialist/researcher,

Efina, Tunde Ogungbade, managing director, Global Accelerex. Tunde Kehinde CEO, Lidya Finance.

Others are; Uche Ben Uzoebo, head, agency & merchant services, Diamond Bank. Aderemi Atanda, director, System Specs (Remita), Iniabasi Akpan, country manager, Opay Services, among others.

“Also, this edition of our conference will feature experts from the Special Fraud Unit of the Nigeria Police Force to educate delegates on best practices in tackling financial fraud.

Our conference is the largest convergence of top performing agents and aggregators drawn from across the country,” Olojo noted.

The conference objectives are; to create an avenue where operators, agents, regulator and stakeholders can come together to discuss our common goals; to review past calendar year; to discuss challenges and proffer solutions; To create enabling platform to showcase latest solutions and cutting edge technologies in the industry; To enable operators onboard agents and aggregators that are serving the last mile; to enable stakeholders collectively tackle common industry challenges among others.

The association is the umbrella body for mobile money and banking agents in Nigeria.

“These are part of the channels opened by the Central Bank of Nigeria as part of the ways of driving financial inclusion in Nigeria. Over the years, we have seen steady growth and increase in terms of volume and value of transactions carried out on our platform in Nigeria,” Olojo explained.

BUSINESS DAY

Tuesday 23 October 2018

23

EDUCATION

Weekly insight on current and future trends in education

Primary/Secondary

Higher

Human Capital

DFID report shows equity of learning at Bridge Nigeria schools KELECHI EWUZIE

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new report by the UK Department for International Development (DFID) shows full equity of learning in Bridge International Academies (Bridge) classrooms, regardless of a child’s socioeconomic background.

The new report, titled ‘Learning in Lagos’ indicates that factors such as parental income, education, and language at home had no effect on Bridge pupils’ academic performance in Lagos.

The study confirms that Bridge pupils in Lagos are demonstrating higher attainment than their peers in other low fee schools or public schools. The report says, “In literacy, students at Bridge schools have better performance than pupils at other private schools (by 0.35 standard deviations) and public schools (by 1.38 standard deviations)”.

Steve Cantrell in charge of Measurement and Evaluation at Bridge International Academies while speaking during the Launch of the report in Lagos last week said, “There is no learning gap at Bridge schools. This study validates our methods, which ensure that all teachers have high expectations for every pupil, irrespective of their families

Joan Oviawe, Chairman, Edo State Universal Basic Education Board (SUBEB); Adesuwa Ifedi, vice president, Policy and Partnerships, Bridge International Academies; Ronke Soyombo, director general, Office of Education Quality Assurance, Lagos State Ministry of Education; Stella OjekweOnyejeli, executive director and chief operating officer, Nigeria Sovereign Investment Authority (NSIA), and Pauline Seenan, head of Human Development, UK Department for International Development (DfID), at the launch of DfID’s Edoren report titled “Learning in Lagos: Comparing Student Achievement in Bridge, Public and Private Schools” in Lagos.

income, prior educational attainment, or which language they speak at home.”

Cantrell observes that, Bridge schools are places of equal opportunity and equal learning benefits for all types of children, and especially for the poor.

Overall, this independent report shows that Bridge is helping children from poor families in Lagos to learn, improving access to quality education, and enabling the providing the best overall learning attainment in the local communities we serve.

According to him, “We can now say with total confidence that Bridge makes a significant

and important overall contribution to education opportunities in Lagos”.

The DFID findings contradict decades of global education research that asserts family background matters more than the school a child attends, in relation to levels of learning. The report states “Students from better socioeconomic backgrounds have higher learning achievement in private schools, but not at Bridge schools”.

Femi Adegoke, from Oxford Policy Management in his presentation of the findings from the report said: “This is the first

time the consulting body have measured school management in Nigeria.

According to him, “We are able to support a claim that all those working in organisations have long held true: good management matters. In Lagos public schools and Bridge schools, we find a strong correlation with better learning outcomes.

As a next step, we would recommend more programmes focused on better management, so that more schools and pupils in Lagos can benefit.”

The report marks an important milestone in the debate around Bridge’s role in helping

Parents, students to explore educational options at Greensprings Schools’ interactive programmes KELECHI EWUZIE

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reensprings School in an effort to help parents make a wellinformed decision regarding their children’s educational career path; Nigeria’s first thinking school will be hosting her yearly “Get To Know Us” programme - a one-day event on each campus for prospective parents and students to engage with pupils, teachers and administrators of.

The event will provide parents with an opportunity to get answers directly from the school administrators, rather than rely only on generic online third party sources.

Uche Ogbu, head, Corporate Strategy of the school

said answers to enquiries such as how does the Thinking School curriculum affect my child’s education? Will my child get well-rounded education? What is the appropriate early education next step for my child will be provided at the event.

According to him, “It is important to note that choosing the right school for your child can be very emotional and parents sometime require external support to guide them through the process. Get to Know Us is an avenue to get the necessary support, Ogbu added.

In Nigeria, there has been an influx of private secondary schools, springing up daily with all kinds of packages; thereby making it

more difficult for parents to pick a school of choice for their child.

At the “Get to Know Us” 2018 event, the methods of teaching and learning will be shared with prospective parents and some of them will get a chance to register their children for our Shadow Day (a full day experience on campus).

If your child qualifies for the Shadow Day, he/she will be invited to spend a full school day at Greensprings School at a later date. He/ she will take part in the classroom and field work for the day. At the end of the shadow day, you and your child will be able to determine if Greensprings is the appropriate school for your child.

Other highlights of the event will include: Information on the scholarships obtainable through sports and academic achievements; Steps in redefining education in Africa Recent IGCSE students’ performance being a Nigeria’s first and only Thinking school and how it affect today’s society; Up-close observation of our teaching methods; Opportunities to interact with teachers, students, administrators, parents and alumni and Campus tour and general information on admission The “Get to Know Us” events will be held at the Lekki Campus, Anthony Campus, and Ikoyi Campus on 1st, 15th and 20th of November respectively.

poor families access quality education. The UK Government now fully recognises that “the private sector, as well as the public sector, contributes to the education of Lagosian children and that development partners need to work with the private sector as well as the public sector to improve education outcomes for children in Lagos. “All hands must be on deck to help the approximately 10 million Nigerian children not in school and many who are in school are not learning the basics”.

Ronke Soyombo, director general, office of the education quality assurance, Lagos State while speaking at the event commended the leadership of Bridge International academies for its innovative solutions towards driving increased national learning gains and effective best practices in education.

Soyombo tasked both the public and private sector to embrace attitudinal change towards the educational system with the goals of making education not only a source of value adding medium but to make it one of the leading sectors in Nigeria.

Olu Babalola, managing director, Bridge Nigeria, opined that Bridge pupils excel because of the training and support teachers receive at Bridge.

“Bridge teachers pay attention to struggling kids and not just

kids and those doing well. I think in other schools, the tendency is for the smart kids to dominate in class because they are more likely to jump to answer a question. I believe that our cold-calling methods, the small group sessions, the check and respond methods and everything we coach the teachers to do ensures no child is left behind.”

DFID recognises that 69 percent of children attending low cost schools are living below the poverty line and that Bridge makes an important contribution to the overall provision of quality schools in an area where 75,000 children are out of school.

The report also confirms that the vast majority of those in low cost community schools are poor. “69 percent of those attending low-cost private schools can be classified as poor.”

The report highlights the quality of Bridge teachers, saying, “Teachers in Bridge schools report higher motivation than teachers in other schools, and Bridge schools are better managed than other schools.” Teachers in Bridge schools empower their pupils and build strong supportive bonds. The report found that Bridge pupils were less likely to “hit, pinch, or slap” a child during a lesson (5 percent) than in private or public schools (both 31 percent).

‘Teachers need to be empowered for maximum impact on children’

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osiah Olusegun Ajiboye, Registrar/Chief Executive, Teachers’ Registration Council of Nigeria (TRCN) has called for the empowerment of teachers in order for them to have maximum impact on the lives of children.

Ajiboye observes that no education system can rise above the quality of its teachers adding that no nation can grow faster than its educational system According to him, “Our progress as a nation can be no swifter than our progress in education – as teachers are a fundamental condition for guaranteeing quality education, teachers and educators should be empowered, adequately recruited and remunerated, motivated, professionally qualified, and supported within well-resourced, ef-

ficient and effectively governed systems” Ajiboye while delivering a lecture on the topic ‘The Right to Education and the Imperative of Qualified Teachers in Nigeria’ at the Faculty of Education, University of Ibadan, said education in all its forms and at all levels should be Available, Accessible, Acceptable and Adaptable which are interrelated and essential features.

Th e T RC N Re g i s t ra r opines that the right to education means right to qualified teachers, which involves strategic planning in which professional teacher uses his expertise in the input and output process and in which the strategic players are given all necessary impetus to achieve the goal of teaching and learning.

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Tuesday 23 October 2018

EDUCATION

How secure is our future?

OYIN EGBEYEMI

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e seem to have a promising future i n Nig e ria. After all, we are bursting with potential, given the developments coming up every day and diversification of our economy (w ith emerging sectors such as telecoms, media, entertainment and education).

Despite the recent slips into recession and the crises over crude oil prices and foreign exchange. Even with the frustration over the tough business climate in the country, we somehow continuously strive to push through and hustle our way out.

A brighter future might be a safe assumption to hold. Maybe this is a prayer, or maybe some people are just so caught up with the fast-paced present (because really, it is a tough one to survive), we haven’t had the time to give enough thought to the future.

While it is also tempting to focus on economic drivers such as Gross Domestic Product, Foreign Direct Investment and the strength of our currency to determine the health of

our nation, we should not forget about some of the social development factors which would inevitably determine the conditions of our living environment in the future.

We have an indisputably growing population in Nigeria: According to the National Population Commission, we are predicted to hit 223million by 2020 and according to the United Nations, about 400million by 2050; surpassing the United States and making us the third most populous country in the world. Imag-

ine what our population density will look like given that we are equivalent in terms of landmass to the size of Texas, which is one out of the 52 United States of America.

We have quite a large active population: the proportion of the population that constitutes the labour force (age 15 - 64) accounts for 55 percent, while children between the ages of 0 and 14 years (our future labour force) make up 42 percent. That ’s quite a young population, compared to most western Eu-

ropean countries, such as the United Kingdom, which have aging populations and growing concerns over the availability of a workforce in their future.

Given these, we should be concerned about what it’s going to be like to live in a densely populated country. But that is almost inevitable as population growth is here to stay, unless our government takes a note from China and imposes regulation to restrict the number of children per family. So we have to manage ourselves somehow

and control what is within our reach right now.

We have a large active population now and in the future. Great! We should be able to work with this and start to prepare towards the future now.

However, did you know that 38 percent of children in the country are out of school (UNICEF)? This is 38 percent of the 42 percent or 22million children! For those who are in school, the quality of their education is somewhat questionable. If a study carried out by the Education Rights Campaign revealed that 7 out of 19,125 teachers passed a literacy benchmark, should we not be concerned? Furthermore, recent studies continue to reveal that the quality of teachers is actually a dire problem in Nigeria, as 60 percent of the children in school are actually not even learning.

Another study carried out by the Education Sector Support Programme in Nigeria (ESSPIN) in Kwara State further revealed that there was little disparity between the teachers who had graduated from teacher training colleges and universities and those who hadn’t.

So this raises the question, “What is going on at

the teacher training colleges and other institutions?”

What is going to happen to our children in the future if they are not educated now?

Are we going to live in a safe and effective society?

If you were not concerned about this before, you should be now. If you didn’t think that this could affect you, you should start rethink. If children are not educated and mentored properly now, what will they aspire to in the future?

What will crime look like in the future if we are already struggling with theft and kidnapping now? when you interview some children at various communities and ask them what they want to be when they grow up, they proudly say “Area Boy” So what can we do? We cannot rely on the government alone to solve this problem. As patriotic Nigerians, we all have a role to play. No matter how little it may seem, mentoring one child in a disadvantaged community could go a long way; volunteer ing time at organisations such as Teach for Nigeria or Wave Academy could make that difference in the education of the children now, which would yield some benefits in our future. We all have a role to play now that will influence our future!

Investment in Human Capital: How Lafarge is bridging the literacy gap KELECHI EWUZIE

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nvestment in human capital has been proven to boost economic development faster than investment in physical infrastructure. Lifelong learning is a critical factor in personal and economic development and this is impossible without literacy.

Education has been proven to have a positive effect on agriculture, technology adoption, and income levels. For instance, farmers with at least four years of education are more likely to adopt modern methods that improve their productivity.

The level of education has been shown to impact the rate of technical change as well as the adoption of new technologies in industries.

Similarly, a higher level of education is a strong predictor of income levels. There is also a link between literacy and industrialisation; without a significant level of literacy no country can industrialise. Even more

worrying, among emerging economies, literacy rates are lowest in West Africa.

Literacy in Nigeria at 59.6 percent is one of the lowest in West Africa and sub-Saharan Africa, with huge variations between states, regions and gender. Based on this premise, Lafarge Africa Plc, a member of the LafargeHolcim, in line with its Corporate Social Responsibility (CSR) policy launched the National Literacy Competition in 2014.

Literacy in Nigeria as it stands today cannot adequately support and propel the Nigerian economy.

The Nigerian Government recognises this and is making efforts to address the challenge. In recognition of the company’s effort in the past five years to support government efforts in raising the standard of English Language among public primary school students aged between 9 and 13 years, the competition has been endorsed by the Universal Basic Education Commission (UBEC).

Since 2014, a total of

200,000 primary school students from 244 Local Government Areas have participated in the Lafarge Africa National Literacy Competition. The involvement of an infrastructure solutions provider in such an initiative may strike some as unusual.

But not to Lafarge. It believes

promoting literacy and education are an effective means for fostering sustainable development for the cement manufacturer.

For a business committed to building better lives, an initiative that enhances the literacy skills of public primary school students aligns

Folashade Ambrose-Medebem, (R); director communications, Public Affairs and Sustainable Development with representative of Ogun State First Lady, Olufunsho Amosun during the presentation of certificates to participants recently

with its vision. And literacy is crucial for the sustainable development of any country.

A high level of literacy is central to economic growth; it equips individuals with the knowledge, skills and attitudes needed for economic self-sufficiency, poverty reduction and sustainable development.

On a broader scale, Lafarge’s CSR interventions which are aimed at making a social impact include bridging the skills gap. Thus in 2017, the Cement Professionals Training Programme (CPTP) kicked off with the aim to give youths skills in technology, engineering, cement manufacturing, instrumentation and automation.

In the past one year, more than 30 youths have been trained.

This year alone, over 1,000 bricklayers across Nigeria have been trained in the application of cement and masonry techniques as well as appropriate health and safety measures.

LafargeHolcim’s 2030 Plan to improve the quality of life of all is a common

thread that runs through all its CSR interventions and aligns with the four of the United Nations Sustainable Development Goals; to improve the quality of education, gender equality, end poverty and form partnerships to attain these goals globally.

The cement manufacturer’s contribution to bridging the skills gaps is more than a corporate initiative. The literacy competition actually started as a Reading Project, a volunteer programme of staff to improve vocabulary and literacy of public primary school students in the five host communities where it operates.

Between 2013 and 2015, Lafarge employees volunteered 6,212 hours via the Reading Project. Since 2014 there have been remarkable improvements in the spelling, pronunciation and writing skills among participating students across Nigeria.

This intervention of Lafarge testifies to the social impact that can be achieved when government and businesses partner.

Tuesday 23 October 2018

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Multi-family homes: Big growing trend for real estate investors

Stories by CHUKA UROKO

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lobally, the big and growing trend for re a l e s t a t e investors today is the development of multi-family units that bring together a large concentration of families who share recreational, shopping facilities and other infrastructure in common.

There could be other reasons, but in Nigeria, the main reason for this trend is economic.

The economic recession which the country went through between 2015 and 2017 left bitter lessons for families whose basic needs, including housing, has been redefined with a lot of them favouring smaller units.

D emand for housing, therefore, has shifted from mansions and stand-alone duplexes to flats and apartments. As a result, investors looking at residential property are, increasingly, looking at multi-family housing, retirement housing and students accommodation.

Though still at low level stage in Nigeria, global student housing investment volumes, especially in the Western World, have risen by 87 percent in the last five years, according to a research conducted by the international real estate firm, Savills.

The research points out that global need for multifamily, co-living and retirement housing offers opportunities across all jurisdictions, and are, particularly, under-invested asset classes in the UK. In Nigeria, investors are keenly taking interest in this trend which, according to Obi Nwogugu, Principal at African Capital Alliance (ACA), one of Nigeria’s leading and well capitalised private equity firm, is a response to market demand and also to the state of the economy.

Together with Elalan, an old generation and reputable construction firm, ACA is doing one of the most ambitious residential developments in Nigeria today that hopes to deliver to the market over 500 apartment units in five high-rise blocks comprising 1,2 and 3-beroom apartments with retail facilities in Lekki Phase 1, Lagos.

Alone, Elalan is doing a multi-unit development, the 4-Bourdillon, which is a 25-floor building that will deliver ultra-luxury apartments in an exclusive, upscale location in Ikoyi, Lagos.

Omorotimi Akinlose, MD, Residential Auction Company (RAC), has other reasons for this trend which are, largely, tangential. “Developers, depending on the size of

land available, often want to utilize the full value of the land to the last penny”, he explains, adding that they often encourage architects to come up with designs that can provide many units optimally possible to increase the bottom line.

“This trend is now very common in the market for developers to adopt”, Akinolse notes, explaining that the emergence of terrace, town-house and maisonette house-types commonly seen in the western markets are now a fastgrowing trend amongst local developers looking to attract a younger generation of clients that favour such house-types rather than the conventional detached and semi-detached house-types. Like flats, these house-types also take up less built-up area, making them cost-effective for plot sizes.

In the last 24-36 months, Lagos has seen quite a good number of houses delivered to its market. It is estimated that over 3,929 new units were delivered to the market a couple of years ago and of this number, 3,203 units, representing 82 percent, were located in Lagos Island and of this too, 2,579 units, about 66 percent, were located along the Lekki-Epe axis, making this location have the largest proportion of

new housing units.

The good news for investors here is that the demand for small unit apartments, especially 2-beroom, is not only huge but positively effective. This is driven mostly by short-let accommodation business which catches the fancy of young professionals and expatriate staff of corporate organization on business trips.

For off-shore investors, Propertywire, an online residential property portal, says this trend offers compelling business opportunities, adding that, in its city-by-city data analysis of the trend, Student-Marketing, an independent provider of student housing and micro living research and data, has identified that provision is lowest in Rome, with a student population of 220,500, but only 6,500 student beds, a provision rate of just 3 percent, followed by Porto at 3.5 percent, Florence at 3.8 percent, Barcelona at 4.9 percent and Madrid at 5.7 percent.

“These cities, therefore, offer the best immediate opportunities for investors, says Savills, as many have strong international student populations, indicating a solid supply base, and high average purpose-built student accommodation (PBSA) rents”, the portal says.

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Inclusive growth, informal settlements slowing economic growth of cities

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rban settlement experts have identified inclusive growth, informal settlements, unregulated urban growth especially in young cities, and infrastructure deficit as major factors slowing economic growth and prosperity of African cities, including Lagos, Nigeria.

In the developed countries of the world, rapid urbanization is an economic asset because of the agglomeration of economic activities and the economy of scale which reduces costs, leading to increased productivity, more income and improved standard of living for city dwellers.

But in Africa, most cities are urbanizing fast, but that process merely translates into nominal growth of the cities, making it a liability to both residents and the government because instead of economic growth and prosperity, what is seen is lack of inclusive growth and widespread poverty.

Essentially, urbanisation is a key driver for economic development and prosperity. There are, however, challenges and opportunities in the rapid growth of African cities, including Lagos, which remains one of the fastest growing cities in Africa.

Lagos was, a couple of years ago, selected as one of the 100 Resilient cities of the world. Megacities are described as cities with more than 10million people and, so, Lagos with an excess of 20 million could be referred to as a mega city, which is rapidly developing under the keen and watchful eyes of investors.

For inclusive growth to happen, governments have a responsibility to focus on realizing the potential of these cities as inclusive and resilient centres of economic growth and job creation. Taibat Lawanson, a lecturer at the University of Lagos, says there is need for the government to recognise that megacities have, at their core, the critical question of who the cities are being built for.

Infrastructure deficit is obvious and it is an area that presents an oppor-

tunity for governments to partner with the private sector to deliver worldclass infrastructure ranging from transportation, power, sanitation/waste management to softer infrastructure including health/ medical, educational and recreational facilities.

Population growth typically outpaces the infrastructure growth which often needs to be addressed against the backdrop of limited or dwindling revenues. This is generally the main cause of informal settlements which is in clear evidence all around Lagos,constituting a threat for both the settlers and residents.

Rapid urbanization, however, presents some level of opportunities. Udo Okonjo, CEO/Vice Chair of Fine and Country West Africa, believes that creatively harnessing widespread informality and youth populations can be used to address some of the unemployment gaps, pointing out that youth population is an opportunity that can be realized with a deliberate plan covering good education, vocational, and technical training.

“Adopting emerging models of public-private partnerships to help fill infrastructure gaps is another way out”, she said, adding, “the real target is for us to build cities without slums, addressing a significant social and environmental hazard”.

In dealing with the challenges, Okonjo says it’s also important to opt for lower environmental risk options while integrating citizens’ well-being into planning when developing these cities so that the future is not sacrificed on the altar of mega designs and developments.

“Given the growing youth population and the changing lifestyle, millennial housing requirements need to be considered against our old housing development policies; from our perspective, the zoning of low density versus high-density housing to accommodate individuals now living alone no longer needs to be considered”, she advises.

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Tuesday 23 October 2018

‘Real estate is not growing because we have the most difficult transaction laws’ Though a critical sector with great potential to bring a positive turnaround in the economy, real estate is not growing in Nigeria for reasons that are as nebulous as they are mundane. In this interview, EREJUWA GBADEBO, CEO, International Real Estate Partners (IREP), links the sector’s slow growth to land laws in the country. She also speaks what IREP as a foreign service provider is in Nigeria to do differently, plus other issues relating to real estate transactions. She speaks with CHUKA UROKO. Excerpts:

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ours is a foreign firm offering real estate services in Nigeria’s crowded market. How are you doing it differently?

In a nutshell, IREP, which stands for International Real Estate Partnership, is essentially a real estate services company. What we are doing is providing real estate services that are of the same quality with what you find anywhere else in the world.

We are trying to do it differently because we are a member of a consortium of partnering companies which are all around the world with different specialties. The idea is that an investor who wants the services of any of these partnering firms will come to us and we will fish around for our partners and that will add value to the investor.

We want to bring a plethora of specialties around the world that can add value to what the investors offer. We serve as a one-stop shop for clients.

For reference purposes by potential investors, who are those your foreign partner?

Our partners, as I said earlier, are all over the world.

We have a leading financial services partner in China whose specialty is in real estate. They are in Beijing, Shanghai, Hong Kong, Moscow, etc. If, for instance, you have an investment in any of these countries and you need financial services, we

can link you up to this partner to provide you with the services.

We have another company in America called Global Expansion Associate and their specialty is in providing turn-key developments across financial services.

So, if you have need for any turnkey financial solutions, they are the ones to go to, but you will be dealing with IREP. We also have a multidisciplinary interior architectural services company who are in South East Asia.

If you have land to do office development or you want to do feasibility studies here in Nigeria, or you need funding, you just meet us and we help you access their services.

We have got another interesting partner specialized in verification, testing and certification. So, any one that has a building and wants it tested or certified, they can help him to get certified to ISO. We also have what I can call real estate transnational service company. If you want to bring in foreign investors and you don’t understand their language, this is where you bring in this company to help you out. They understand the language of real estate and can put together your contract in such a way that you are not shortchanged.

In providing advisory services, to what extent do you influence client’s design and decision?

Erejuwa

All that we do are geared towards helping the real estate industry. You can work hard on a building that has nothing to offer the industry and so nobody wants to touch it. There is a typical example of such building in Victoria Island.

It is a commercial building and nobody has event stepped into it. A little bit of market research before the building was started could have helped the developers to create a better solution.

On the contrary, everybody would like to work on skyline buildings like Heritage Place and The Wings Towers which have been completed, and the Desiderata Tower on Banana Island which is still ongoing. There is another one we are involved in and we have influenced a lot of things in the building. It is a naira-lease project and this means there are no

worries about fluctuation in exchange rate.

The point I am trying to make is that upfront information is very vital and people generally ignore them to their own detriment in the long run. If you put up a gigantic building that is difficult to maintain, nobody will go there. And when the mistakes are made, it is difficult to correct them in the long run.

After some months in Nigerian market, what has been your experience; what impression of the market do you have?

IREP is new in Nigeria but all of us who work here have been around a long while. The market is difficult, and my challenge is the assumption that because the oil price has gone up, everything in Nigeria is appearing to be out of recession. Actually, the recession

in real estate is different. The sector has been in negative growth for eight consecutive quarters and in this last quarter of 2017, the growth was -5.09 percent. This was lower by -1.8 percent than the previous quarter. That quarter was less traumatic but it was that bad. Yearon-year, the sector’s growth was -3. 25 percent lower. All these impact on pipeline projects. As a result of this too, construction cost has gone up and so has real estate services.

What, in your view, is wrong in the real estate sector that is limiting its growth?

I think there is something we are not telling ourselves and that is annoying for me.

There is a huge gap between where we are and where we are supposed to be. In my view, real estate is not growing because we have the most difficult transactional laws in the real estate market. You cannot tell me that someone who owns a property cannot sell to whomsoever he likes at whatever price he wants.

Here, you have to go back to the government that did not help you to build the house for permission to sell the property. This is why our land is expensive and registration is difficult and takes so long such that transactions cannot happen at the kind of speed they are need to.

Which of the land laws are you referring to—the Land Use

Act or the Lagos State Land Use Charge?

What do you say is wrong with the laws?

When I talk of the land laws I mean everything whether it is federal or state government laws.

Let us look at the Lagos Land Use Charge, for instance. Lagos State government has made matters worse by changing the land use act which had started making life easier for Lagosians. Before now, we had rates which the landlord and the tenants had their respective responsibilities to pay. Now, they have made it punitive and it is coming at a time when people are running away from real estate sector and the market.

What they have done has the capacity to scare people away from Lagos to neighbour ing O gun State. Recall that during the time of the crisis in the Niger Delta, foreign workers or investors who had business in Nigeria chose to stay in Ghana and flew from there to Nigeria and back after transacting their business. We did not learn from that and it means those who have property in Ogun should start thinking of moving to such areas and have their peace.

I believe there won’t be a reduction in the population of Lagos, but there is certainly going to be a reduction in the number of those who would pay the tax, leading to millions of citizens that would be out of job.

Live sustainable lifestyle to beat pollution, expert urges Nigerians

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igerians, especially those living in the country’s big cities of Lagos, Abuja and Port Harcourt with large concentration of people and industries, have been urged to cultivate lifestyle that is sustainable and capable of curbing and beating pollution.

Environmentalists warn that pollution which comes in various ways such as air, water and sound, is a major part of the challenges of any developing mega city. Lagos, a sprawling city with over 20 million population, is a regarded as mega city and, therefore, it is not spared from this menace.

When environment stakeholders gathered at the week end to ‘Walk for Nature’, an annual environment education and awareness initiative promoted by the Lagos State

government and Nigeria’s foremost conservationist, Nigerian Conservation Foundation (NCF), the focus was on how to beat pollution.

The aim of the walk was is to sensitise the people on the need to embrace best practices on pollution, especially the way plastics are

Walking for Nature in Lagos

used, which has become a major challenge on land and even more devastating in our waters (creeks, lagoon and the ocean).

“This year’s theme, ‘Beat Pollution: Live a Sustainable Lifestyle’, is another wake up and follow up call on the 2018 World Environment Day

commemoration. The theme is aimed to sensitise people on the need to embrace best practices on pollution, especially the way we use plastics, which has become a major challenge on land and even more devastating in our waters—creeks, lagoon and the ocean”, Phillip Asiodu, NCF’s president, explained in his address at the event.

Plastic pollution has become a major environmental issue just like climate change.

Beat the pollution campaign, Asiodu explained further, was also in consonance with the efforts of Lagos State government at mitigating the effect of climate change. The rally seeks to encourage people to inculcate the recycle and reuse concept since pollution aggravates climate change.

“The theme of the walk strategically aligns with the

Sustainable Development Goal 13 which seeks urgent action to combat climate change and its impacts. Beyond this event, NCF has collaborated with research institutions, universities, government agencies and corporate organisations to provide solutions for environmental challenges”, he disclosed.

Asiodu advised that environmental sustainability should be a major issue to be promoted all over as losing the fight of environmental degradation will be devastating to human race. Walk for Nature propagates environmental education to the young adults and students, hence the need to position it as a worthy legacy to be bequeathed to generations.

“We are imploring the public to take pollution as a critical environmental chal-

lenge and to embrace activities that ameliorate the negative impact of pollution urgently. Whatever we do or not do is capable of impacting on lives of generations yet unborn”, he warned.

He assured that NCF would continue to promote its forest cover intervention programme known as Green Recovery Nigeria (GRN) initiative. The essence of GRN, he explained, was to ensure regeneration of degraded forests through enrichment planting and effective participatory forest management. “If such a project is not in place and without the federal and state governments’ committing itself to reforestation, by 2050, Nigeria’s forest land will be reduced to grassland and the implication is better imagined than experienced”, he posited.

Tuesday 23 October 2018

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BUSINESS DAY

27

Energy Report Oil & Gas

Power

Renewables

Environment

NCDMB seeks action on gas investments … to invest in the gas value chain OLUSOLA BELLO

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layers in the gas sector should canvass for speedy implementation of existing policies and pursue the delivery of identified gas opportunities, Simbi Wabote the executive secretary of the Nigerian Content Development and Monitoring Board (NCDMB), has advised.

He spoke in Abuja at the Nigerian Gas Association’s 2018 International Conference held recently and argued that there had been sufficient discussions onmissed opportunities of the past years and huge subsisting potentials of gas to the Nigerian economy.

He said members of the Nigerian Gas Association (NGA) and other stakeholders of the oil and gas industry must begin to pick up the gauntlet. “I implore you to make this happen. It does not have to be a gigantic,big

L-R: Ahmed Mohammed, president Institute of Directors (IoD), Godwin Izomor, managing director/ceo MG Vowgas limited and Ijeoma Jidenma, second vice president,IoD, during the induction of Godwin Izomor as member of the institute.

bang project that overwhelms everybody and does not get delivered at the end of the day. Let’s take one or two aspects of the value chain and channel all energies on them so that in two years’ time we are here to celebrate value addition to our hydrocarbon resources.”

The Executive Secretary confirmed that NCDMB

had begun to implement some of its initiatives, citing an example with the US$200mNigerian Content Intervention Fund, managed by Bank of Industry for the provision of loans to oil and gas service providers at single digit interest rates for the acquisition of key assets, manufacturing and other activities.

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ising debts profiles on account of unpaid subsidy arrears of over N130.7 billion by government is posing huge financial challenges to downstream sector as Major Oil Marketers Association of Nigeria (MOMAN) appeals to the Federal Government for prompt payment of outstanding subsidy debts owed members.

Andrew Gbodume, the Chairman of MOMAN said that inability of the Federal Government to pay the debts had affected the mutual relationship of members of the association with their banks in sourcing for loans.

“We urged the government to effect payment of the outstanding debts on subsidy since audit and agreement had been carried out since July,” Gbodume told Journalists.

“Since inception, MOMAN has progressively gained a reputation in the Nigerian petroleum industry as a key player however one of the major challenges the downstream petroleum sector is still facing is the non-payment

of the long outstanding fuel subsidy to oil marketers,” The Chairman of MOMAN said the oil marketers appreciate the efforts of the National Assembly, but the non-payment creates a significantly negative impact on the operational efficiency of the downstream sector of the oil industry.

“It has placed severe strain on its efforts to continually invest in the infrastructure and raise industry standards,” the chairman of MOMAN lamented.

“We hope that the debts will be paid in full to the oil marketers as soon as possible.”

Gbodume, who puts the debt owed MOMAN members at N130.7 billion as at August 2018, stated that once reconciliation has been done and particular figure was agreed as debt, he could not understand why settlements have not been made.

The MOMAN chairman commended the Petroleum Products Marketing Company (PPMC) for its efforts over the years in ensuring consistent product supplies and stressed that marketers are working tirelessly with the PPMC to ensure fuel avail-

ability and prevent fuel scarcity that rocked the nation in December 2017.

“We acknowledge and appreciate the efforts of the PPMC over the last few months in ensuring consistent supply of petroleum products within the country,” according to Gbodume.

“PPMC has demonstrated its resolve to guaranteeing a non-repeat of the scarcity, which the nation experienced at the end of 2017, and quite frankly has done well so far.”

Gbodume said that currently, only NNPC was importing 100 per cent petroleum products, while members of the association were collecting products from NNPC and pay within two weeks.

“No MOMAN members are importing petroleum products, because no bank is ready to loan us due to our inability to pay the outstanding debts owed by marketers,” He said that MOMAN has established a committee to self-regulate its members by collaborating with the Federal Road Safety Corps (FRSC) and Department of Petroleum Resources (DPR) to improve minimum transportation standard.

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

proach the Bank of Industry with your applications. A key requirement is that you must be a contributor to the Nigerian Content Development Fund.”

Dwelling on NOGAPS, the NCDMB boss invited interested investors to liaise with the Board on how to participate in the scheme.

He hinted that the Board would sign Memorandum of Understanding withsuch investors before the end of 2018 and early birds would enjoy the first mover advantage.

He also confirmed that the 25 megawatts independent power project (IPP) being developed by the Nigerian Agip Oil Company (NAOC) in partnership with the Board in Bayelsa State would be commissioned in December 2018. The IPP would power the Bayelsa NOGAPS and the Board’s 17-storey headquarters building, which would be completed in the first quarter of 2019.

45 Nigerian firms flaunt potential at SNEPCo exhibition

Unpaid subsidy arrears eroding oil marketers’ working capital- MOMAN DIPO OLADEHINDE

Simbi Wabote who spoke at the Nigerian Gas Association’s 2018 International Conference held in Abuja recently, stated that there had been sufficient discussions on missed opportunities of the past years and huge subsisting potentials of gas to the Nigerian economy According to him,another ongoing initiative is the Ni-

gerian Oil and Gas Parks Scheme (NOGAPS) currently under construction in Bayelsa and Cross River states. “The parks will be operated using the sites and service model with provision of electricity round the clock to enhance manufacturing activities,” he added.

He affirmed that the NCDMB would be willing to support any investor willing to deepen local content practice in the gas value chain.

According to him, “part of our 10-year strategic roadmap is to support credible proposals from local businesses that want to key into opportunities in the hydrocarbon value chain. Let’s move beyond talk into action. Our recent deal to support the construction of a 5,000barrels per day modular refinery was done in less than six months.

“If you are interested in manufacturing of cylinders, clips, hoses, burners, regulators, lighters, or in the provision of other services in the gas value chain, please ap-

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n-country value in the oil and gas sector received a major boost from the Shell Nigeria Exploration and Production Company (SNEPCo) as over 45 indigenous service firms subscribed to the justconcluded SNEPCo Nigeria Content Exhibition in Lagos, a platform for the firms to showcase their capacities and capabilities to regulators and major players in the industry.

The exhibition with the theme: “Made in Nigeria, Fit For the Future”, brought to fore in-country manufacturing opportunities and competitive local alternatives in the oil and gas industry and provided a platform for knowledge sharing among the exhibitors, Shell staff and contractors, and other key industry stakeholders.

In his opening remarks at the exhibition, Managing Director of SNEPCo, Bayo Ojulari, said the company’s local content strategy was built around the national framework as developed by the Nigeria Content Development and Monitoring Board.

“The strategy places strong emphasis on research and development, promotion of lo-

cal manufacturing, indigenous asset ownership, and human capacity development.”

Ojulari added, “Shell recognises the significant role that a viable and competitive manufacturing sector plays in the economic development of a country. Therefore, we actively seek opportunities to support and showcase strides made by Nigerian companies in the manufacturing of import-substituting goods and services, especially those required for oil exploration and production.”

He cited some ongoing initiatives by the company to further support local capacity such as the collaboration University of Ibadan and University of Port Harcourt on research into synthetic base fluids for drilling operations using local raw materials. “This is expected to substitute imported fluids and stimulate industrial production,” he said.

Also speaking, Simbi Wabote executive secretary of NCDMB, acknowledge the contributions of International Oil Companies to the improvement of standards of goods produced by local companies.

Wabote, who was rep-

resented by the company’s Director of Project, Tunde Adelana singled out Shell’s support to an indigenous company, NMT, to improve on its standards in the delivery of bolts, nuts and fittings used in the oil and gas industry. He therefore called on other multinationals to emulate Shell by making deliberate efforts to assist small local companies.

SNEPCo has been in the forefront of local capacity development and its Bonga Floating Production, Storage and Offloading vessel helped to create the first generation of Nigerian oil and gas engineers with deep water experience and stimulated the growth of support industries.

Recognising the pioneering role of SNEPCo in Nigerian Content Development, Group General Manager, National Petroleum Investment Management Services, Rowland Ewubare, who was represented by NAPIMS’ Project Manager, Gas Division, Jubril Lawal, described Shell as the most consistent performer in the industry.

The annual exhibition has helped to provide market linkage for service companies in the industry.

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

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Tuesday 23 October 2018

Energy Report

‘Willing buyer-willing seller best model for gas pricing’ OLUSOLA BELLO

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hairman/Managing Director of Chevron Nigeria Limited, (CNL) Jeff Ewing has called on stakeholders in the gas industry to support and enable the willing seller – willing buyer gas pricing model, to ensure the viability of the sector.

Ewing who spoke in Abuja at the 11th Edition of the Nigerian Gas Association Conference and Exhibition, also called for the privatization of the various value chain sectors, as part of measures to untangle the bottle necks in the industry.

Represented by the Director, Downstream Gas, Sanjay Narasimhalu, he posited that opportunities for investments into the Nigerian gas sector were enormous.

The opportunities, he stated, include, “Transitioning from an oil-based economy to a more integrated oil and gas economy and end routine gas flaring.

“Deliberate exploration for non-associated gas to support the Nigeria Gas Master Plan, with a focus on high liquid yield nonassociated gas resources to optimize the gas development project economics.

“Growth of new industries made possible from the abundant resources and competitively priced gas supply”.

Jeff noted that CNL has

contributed immensely to the Nigerian government’s gas master plan through the various gas projects it has embarked on and that the company is the highest contributor of high quality gas to the domestic market in Nigeria since 2015.

While appreciating the talents in the industr y, the workforce that make things happen he stated that through investments in gathering and processing of associated gas, routine flaring has been reduced by over 90% from 2008 to 2017 in CNL’s operations.

He said the company has made significant effort in the gas sector development in Nigeria, adding that “CNL is optimistic about the future of oil and gas business in Ni-

geria. We have been making significant investments in the country for over 50 years and expect to do so for many more years to come” Meanwhile chairman, House of Representatives Committee on Gas Resources, Hon. Fred Agbedi has applauded the Global Memorandum of Understanding (GMoU), the Community engagement strategy adopted by the NNPC/Chevron Joint Venture as a panacea for peace in the Niger Delta region.

Fred Agbedi gave the indication during a panel session of the conference and exhibition The lawmaker represented by Ayebide Fatiede noted that through the GMoU model, Chevron has

proved to the whole world that peace and harmonious relations with Niger Delta communities is possible and practicable.

Speaking on the impact of oil pipeline vandalism on oil and gas infrastructure development in Nigeria, Abedi insisted that the cause of restiveness among the youths in the area is anger occasioned by neglect and insensitivity of the government to the plights of the people.

He said that Chevron has instituted an effective system of engaging with the communities in a profitable manner, which has continued to enhance cordial relationship between the communities and the company.

“The GMoU by Chevron has created the desired en-

abling environment for oil and gas operations in the Niger Delta. What Chevron is doing is to bring the communities together and work with them for sustainable socio-economic development in a transparent and genuine way. I urge other organizations to emulate the NNPC/Chevron Joint Venture for steady development inn the Niger Delta region,” he said.

Commenting on the GMoU, Esimaje Brikinn, General Manager, Policy Government and Public Affairs (PGPA), Chevron Nigeria Limited, stated that since 2005 when the GMoU was established, the GMoU has recorded significant achievements especially in areas of education, health,

and economic development.

He said that the NNPC/CNL Joint Venture has contributed over NGN20.6billion to the RDCs to implement projects and programmes for about 600,000 beneficiaries in more than 400 communities.

“In terms of managing conflict and enhancing peace in communities, the GMoU story is one we are very proud to tell and has resulted in very impressive footprints in various communities and the model has helped improve CNL’s relationship with its neighboring communities, as it created a clearer and more predictable channel for dialogue,” he noted.

He commended the commitment of the traditional institutions, the Government security forces, the community and leaders of the Regional Development Committees (RDC) for driving the multi-stakeholder collaboration for asset protection and stressed that CNL continues to work to strengthen relationship with these stakeholders. “The community leaders have shown great commitment to this process and has seen the connection between CNL’s operations and their livelihood. They understand that an enabling environment for our operations translates to continuous benefits to the communities in terms of our contributions to their socioeconomic development,” he explained.

Exxon exploration chief eyes Africa for elephant oil find Ikeja Electric develops mobile apps for customer safety

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xxon Mobil Corp. is targeting western and southern Africa for the world’s next big oil bonanza as the explorer scours the globe to repeat its success in Guyana.

According to Bloomberg, the oil super major “really loaded” its exploration portfolio recently by purchasing large positions in Ghana, Mauritania, South Africa and Namibia, as well as Cyprus and Malaysia as rivals pulled back, Stephen Greenlee, Exxon’s president of exploration, said in an interview in Houston.

Exxon’s buying spree targeted drilling concessions and seismic surveys, which are maps of the rock beneath the seabed that can indicate probable crude deposits.

Bigger finds tend to generate bigger profits, and the ultimate prize is known in the industry as an elephant: a discovery that hold a billion barrels or more.

“We’re acquiring large

amounts of seismic data with the idea that in the future one or two of those are going to turn out to be the next Guyana,” he said. “These are large acreage positions and they’re in areas that we think have promising opportunities for hydrocarbon systems.”

Greenlee led the team that discovered the massive tranche of crude off Guyana’s coastline in 2015, a find that has grown into the world’s biggest new deepwater play.

At 4 billion barrels, the discovery dwarfs the reserves of OPEC-members Equatorial Guinea and Gabon.

Exxon is no stranger to West Africa, having pioneered deep-sea discoveries off Nigeria and Angola, and opening landlocked Chad to drilling. While Ghana already has yielded a major find known as Jubilee, the other African countries in Exxon’s sights have little experience of deepwater oil and natural gas production.

Rivals such as Tullow Oil

Plc, Royal Dutch Shell Plc and Total SA are also on the hunt along Africa’s western coastline.

Exxon intends to drill “an important well” in Cyprus this year in addition to working on its more-established exploration areas in Guyana and Brazil, Greenlee said.

In Brazil, a lot of data has already been collected on the exploration blocks, meaning that the company has greater certainty over what’s below the ground.

“As opposed to pure frontier exploration, these are well-defined large prospects,” Greenlee said.

As such, Exxon has a better idea of what to expect and has named Brazil one of its five top projects for the next decade alongside Guyana, U.S. shale, and liquefied natural gas in Mozambique and Papua New Guinea. Brazil’s “accretive value” ranks very similar to the Permian shale basin of West Texas and New Mexico, Greenlee said.

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new mobile app that will help in the prevention of customers and employees against electrical hazard, i-Safe has been unveiled by Ikeja Electric Plc. The application, developed here in Nigeria by company is designed to guarantee customer and employee safety with real-time report on identified safety hazard within the network.

The mobile app provides employees of Ikeja Electric the platform to take photographs of clear images of any identified hazard, such as falling poles, sagged wires, exposed underground cables among others and flag such hazards in other to prevent the occurrence of any accident that may emerge from the identified risk.

According to Felix Ofulue, the company’s head of corporate communications, the idea of developing an app like i-Safe is to consistently elevate its safety

standards through several initiatives in order to reduce hazards and fatalities.

“Our safety efforts are driven by the value we place on our customers and employee’s safety which informed the need to introduce an initiative that will showcase our commitment, with a mentality of making safety, a top priority for everyone in order to sustain our zero harm to both employees and customers,” he said.

He noted that with the app, identified risks are captured and submitted to the appropriate department and remain trackable until they are rectified and closed out.

The company’s 2018 HSE campaign tagged ‘Target Zero’ encompasses series of periodic initiatives including internal HSE training, safety hurdles at the Undertaking Units, contractors’ safety engagement, public safety sensitization programme on electrical infrastructure and

field compliance monitoring among other activities.

“Safety in a high risk sector such as the electricity industry cannot be overemphasized because if the safety standards are compromised, the resultant effect could be disastrous leading to damage to property and even loss of human lives, so it is imperative for us to continue introduce programmes that will ensure safety of lives and property, Ofulue reiterated.

To download and install the app, customers are advised to visit the Google Play store. At the moment, it is only available to Android users but plans are in full throttle to extend the service to iOS users in a very short while.

Over the years, Ikeja Electric has been at the forefront of innovative ideas geared towards protecting the health and safety concerns of customers and employees alike, an achievement

Tuesday 23 October 2018

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Harvard Business Review

Tips & Talking Points Talk to your kids about why you work so much

TALKING POINTS The Making of a Leader $15 billion: American companies invest an estimated $15 billion per year on training and development for managers and leaders. + New Heights for AI $13 trillion: Artificial intelligence is poised to generate an additional $13 trillion for the global economy by 2030, according to the McKinsey Global Institute. + Failing in China 2006: Google set up business in China with a censored search engine in 2006, but later withdrew that year after discovering that the Gmail accounts of activists had been hacked. + Boardroom Space 15%: According to a report from Deloitte, women are appointed to just 15% of all corporate board seats worldwide. + A Healthy Office 78%: In a study from human resources firm Future Workplace, 78% of workers say that having access to natural light enhances their well-being.

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orking parents sometimes worry that they’re letting down their kids by spending too much time at the office.

Once your children are old enough to understand, address this concern head-on by having open, honest conversations. Talk frankly with them about the pressures you feel and what you truly want. Don’t blame your company for the times when you can’t be flexible or you’re stressed at home; the last thing you want is to teach your children to despise the idea of work.

Instead, model by example. Help your children understand that the time you spend away from

them is one way you contribute to the family. Talk about your passion for your work and the skills you’ve developed to excel professionally. And if you’re going through an especially busy time, explain to your children that you want to put them first and that when you can’t, it’s hard on you, too. Feeling sad together creates connection, which will help them learn that your occasional absence is not a reflection of your love for them.

(Adapted from “4 Conversations Every Overwhelmed Working Parent Should Have,” by Joseph Grenny and Brittney Maxfield.)

Fair managers explain how they make decisions

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ost managers dedicate significant amounts of time and energy to ensuring they’re being fair. But it’s inevitable that some outcomes will be perceived as fair by some and unfair by others. Don’t assume your decisions will speak for themselves: Be transparent about how and why you made the call. For example, if you want an equitable promotions process, with certain competencies or styles counting more than others, make your intentions known to the team. If

“

You’ve been asked to do a job audition. Now what?

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Bored at work? Try mixing things up

m I at the right company? Am I in the right job? Is this all there is?” We all ask these types of questions from time to time. They’re a symptom of career malaise, and one major cause is boredom — especially for midcareer professionals who have been doing the same job for years. To conquer these doldrums, you don’t necessarily need to switch jobs. Try making small changes to your current role: Seek out an exciting and immersive project, or join an internal committee or team that will stretch you in new

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ways. You could also shake up your routine by asking for a different schedule or a move to another office. Even small changes can have a big effect on your outlook.

It’s also important to seek meaning in what you do.

Make an effort to meet the people who directly benefit from your work, whether they’re customers, clients or colleagues. Seeing the impact of your job is a great motivator.

(Adapted from “How to Beat Midcareer Malaise,” by Rebecca Knight.)

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you want an equal sharing of bonuses, to reinforce the importance of every employee, be up front about it. Remember, as the manager, you have the discretion to make those calls. And if someone accuses you of being unfair, don’t beat yourself up.

As long as you have thought carefully about what the business needs, and made your decision as objectively as possible, you have done your job. You’ll always have an opportunity to restore balance with the next decision.

(Adapted from “How to Earn a Reputation as a Fair Manager,” by Liane Davey.)

ometimes you want a job so badly that you’d do anything to get it. But what about a “job audition,” where you work on a project to demonstrate your skills? If the project will take you no more than two hours, it’s a fair request. (More than that is unpaid consulting.) But make sure you tell the hiring manager how long you spent on it, so they have context to compare your work with others’. For an audition that requires a deep investment of your time, you may try to treat it as freelance work and negotiate an hourly rate. Conveying how excited you are by the opportunity can help the company agree to this approach. And keep in mind that job auditions can be a great way to learn about the company.

If you don’t like the work you’re asked to do, or the way you’re asked to do it, that’s good information to have.

(Adapted from “What to Do If an Employer Asks You to Do a ‘Job Audition,’” by Whitney Johnson.)

When starting a new Job, lay the groundwork for your success

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f you want to excel in a new job, you can’t rely on the orientations and meetings that human resources sets up for you.

Take control of your onboarding by cultivating connections up, down and across the organization.

Figure out who the influencers are in relation to your role, and get to know them face to face. And don’t make the common mistake of assuming you know what your top goals should be and how best to communicate with your new manager. Ask your boss questions to better understand how you

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

will be evaluated and to identify potential early wins: “How do you prefer to give and receive feedback and be kept informed?” and “What should I accomplish in the next six months?” Keep in mind that the goal isn’t to become a hero by tackling the biggest problem right away. Instead, go after something that can be achieved quickly and that delivers operational or financial results.

(Adapted from “Starting a New Job? Take Control of Your Onboarding,” by Susan Peppercorn.)

Tuesday 23 October 2018

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LegalPerspectives

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BUSINESS DAY

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Odunayo Oyasiji

Copyright in Nigeria

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his is a legal right conferred on the owner of an original work to have exclusive right to its use and circulation. The owner of a work is usually referred to as author of the work. The body responsible for the registration and regulating issues relating to copyright in Nigeria is Nigerian Copyright Commission.

Under section 1(1) of the Copyright Act, the following works are eligible for copyright protection- literary works, musical works, artistic works, cinematograph works, sound recording and broadcasts. It must be noted that under the Copyright Act the exclusive right of an author to a work is for a limited period. Section 2(2) of the Act provides that the author of a literary, artistic or musical work enjoys copyright throughout his lifetime and for 70 years after his death while section 24 addresses the case of films, sound recordings, performances etc- that the author enjoys copyright for 50 years from the time the work was first published.

It must be noted that copyright in a work exists from the moment the author creates the work. It is not the registration with the Nigerian Copyright Commission that confers the right on the author. Why then do we still register our work with the commission. According to the commission, the reasons or advantages of registering are – “the record generated by the Commission provides an independent source of verifying data relating to a work or its author to the general public, the acknowledgement certificate issued to the author who notifies the Commission of his work provide prima facie evidence of the facts shown on it, [he scheme provides a depository for preserving original copies of works notified and the information and data contained in the notification database offers reliable rights management information to members of the public and prospective licensees to the work.”

What are the rights of a copyright owner? Such a person can allow or disallow the following- “the reproduction of the work in various forms such as printed publication, photocopying or making a recording in any media, the public performance

no legal weight.

It must be noted that a letter of comfort is not same as a guarantee in case you request that a party should bring a letter of guarantee from a credible person or organisation and such a person brings a letter of comfort. You will have no legal claim whatsoever against the person that issued the letter of comfort.

of work such as staging a play in a theatre, the recording of work in the form of compact disks, cassettes, videotapes etc, the broadcasting of the work by radio, cable or satellite, the translation of the work into other languages or its adaptation such as from a novel to a screenplay and the distribution of the work commercially by way of sales, hiring or rental.”

Is the work I register here in Nigeria protected all over the world?

The answer is no. The protection is limited to Nigeria. However, Nigeria has entered into agreement by way of treaty with other nations of the world with regards to issues bothering on copyright.

Such work that is registered in Nigeria enjoys protection in other countries that are parties to the treaty signed by Nigeria.

It must be noted that a work need not be published before it can be registered. Also, copyright mainly protects what has been written down or recorded and not what is still in form of idea or imagination. The protection covers the author and any other person to whom the author may transfer the work to.

Do you know?

This segment tries to enlighten the public on some of the illegalities that happen frequently in our society. An example of such is using the police as an instrument of debt collection.

The police have no business in issues relating to debt recovery (no matter the amount). It is not part one of their duties under the Police Act. Section 4 of the Police Act states their general duties as “the police shall be employed for the prevention and detection of

crime, the apprehension of offenders, the preservation of law and order, the protection of life and property and the due enforcement of all laws and regulations with which they are directly charged, and shall perform such military duties within or outside Nigeria as may be required of them by, or under the authority of this or any other Act.” Once there is no criminal element in the process of obtaining the money then it is absolute illegality for police to be used as instrument of harassment and intimidation in the process of recovering the debt owed.

Implications of writing a Letter of Comfort in Business Transaction A letter of comfort can simply be said to be an assurance from one party to another that the obligations of a party under a contract will be met. An example of a situation where such letter is often issued is when a parent company writes such a letter in favour of a subsidiary assuring a third party that the subsidiary will not default or will meet its obligations under a contract.

Sometimes, it is issued in a loan transaction. It must be noted that the party issuing it is usually not a party to the agreement that is between the person to whom the letter is addressed and the person in whose favour the letter is issued.

The letter is often worded in a way that the party issuing it will not be accused of guaranteeing anything. It therefore places no legal burden on the party issuing the letter. At best, it only creates a moral obligation for the person. In essence, it carries

LEASE Leases not exceeding three years are usually just in writing- they are often referred to as tenancy. However, for leases that exceeds three years it is mandatory that such must be by deed i.e. it must be signed, sealed and delivered. Under Section 77 of PCL a lease that is aimed that conveying or creating a legal estate is void if not made by deed. This falls under the essentials of a valid lease i.e. it must be created in the proper format. Other essentials of a valid lease areCertainty of term- the period for which the lease will last must be certain. The commencement date and expiration date must not be in doubt., Certainty of Property- The property concerned under the lease must be identifiable and properly described. The address should be clearly written., Certainty of parties- the parties to a lease agreement must be easily identifiable. Their names must be clearly written. They must both have the capacity to contract i.e. the leasee and the lessor., exclusive possession- the leasee must enjoy exclusive possession of the property even to the exclusion of the lessor. The lessor/landlord may only gain entrance for the purpose of repairs.

The foregoing are elements that must be present for a lease to be valid.

OUR RIGHTS AND ITS LIMITATIONS UNDER THE FREEDOM OF INFORMATION ACT The reason for treating this is because of the misconceptions that people (including legal practitioners) have about the purpose of the Act and how it functions. People do think that the Act has taken away the privacy of people and therefore eroded the duty of confidentiality totally.

The purpose of the Act are

listed below – a. To make public record and information more freely available. b. Provide for public access to public records and information. c. Protect public records and information to the extent consistent with the public interest and the protection of personal privacy. d. Protect serving public officers from adverse consequences of disclosing certain kinds of official information without authorization and establish procedures for the achievement of those purposes Section 1 (1) of the Act guarantees the right of any person to “access or request information, whether or not contained in any written form, which is in the custody or possession of any public official, agency or institution howsoever described, is established.” Where such right is denied, section 2(6) states that a person can approach a court to enforce the disclosure.

Section 2(7) defines what a public institution is i.e. “Public institutions are all authorities whether executive, legislative or judicial agencies, ministries, and extraministerial departments of the government, together with all corporations established by law and all companies in which government has a controlling interest, and private companies utilizing public funds, providing public services or performing public functions.” The last part of the definition extends it to private companies.

It must be noted that the Act stipulates the limitations to the right it guaranteed. A look at sections 12,14,15,16,17 and 19 provides for situations where request for information can or must be denied. It will be observed that information that deals with personal records of people is exempted and can only be disclosed if the person consents. Also, matters pertaining to a lawyer’s client and clients of health workers are exempted. Furthermore, journalism is also protected with regards to privileged information.

Therefore, please take a look at the sections listed above before you write to organisations demanding for information under the right guaranteed by the Freedom of Information Act.

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Tuesday 23 October 2018

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

UBA Nigeria plc: Increased interest income underpins gross earnings BALA AUGIE

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nited Bank for Africa Nigeria Plc (UBA) i s t h e t h i rd largest bank in Nigeria, by total assets, deposits and profits with an estimated 10 percent market share.

The bank has a robust digital banking platform – leveraging technology to serve over 15 million customers in a cost efficient approach that helps to deepen African banking penetration.

With strong financial capacity – high capitalization (BASEL II capital ratio well above requirement) and strong liquidity, the Pan African lender has the capital buffers to surmount economic headwinds.

Even amid the economic headwinds of 2016 that saw the country slip into its first recession in 25 years, the lender delivered double digit growth at the top (revenue) and bottom-line (profit) while contemporaneously curtailing costs. Little wonder its shareholders have been drinking ale poured from a flagon into a golden goblet.

UBA recently released third quarter results for the period ended September 30 2018 that showed marked improvement in key performance metrics amid rising inflation, high interest rate, and emerging market sell offs that battered developing market stocks.

UBA expands operation across the globe From 1949 to 2008, the Pan African lender comm e n c e d o p e rat i o n s i n Cameroon, Cote D’Ivoire, Ghana, Liberia, Sierra Leone and Uganda. It acquired majority interest in two banks, based in Burkina Faso and Benin.It also established New York and Paris operations and an associate in London.

From 2009 – 2011, the Bank commenced operations in Chad, Congo Braz-

Kennedy Uzoka, GMD/CEO, United Bank for Africa

zaville, Congo DR, Gabon, Guinea, Kenya, Senegal, Ta n z a n i a, Uga n d a a n d Zambia.

From 2012 – 2018, UBA’s London business got the authorization of PRA and FCA to operate as a wholesale bank. It licensed to operate in Mali.

It won Financial Times ‘Banker’ Awards for: Best Overall Bank in Africa, Best Bank in Cameroon and Best Bank in Senegal.

Enhhanced yield on assets bolster gross earnings Gross earnings for third quarter 2018 increased by 12.15 percent to N374.83 billion from N333.90 billion the corresponding period of 2017 as the lender continues to leverage on enhanced yield on assets, improving service quality, speed to market and innovation and offering.

Total noninterest revenue was up 2.24 percent to N8.67 billion to N8.67 billion in the period under

review from N84.60 billion as at September 2017.

The single digit growth in noninterest income was due to net trading and foreign exchange income that recorded a decline of 6 percent to N32.40 billion in the period under review from N34.47 billion as at September 2017. However, fees and commission income rose by 9.38 percent to N51.05 billion in September 2018 from N46.67 billion the previous year.

Interest income rose by 12.95 percent to N268.93 billion September 2018 from N238.09 billion the previous year amid a low yield environment.

A breakdown of interest income shows income from treasury bills increased by 47.76 percent to N69.3 billion in the period under review as against N47.19 billion in September 2017.

However, interest income from loans and adv a n c e s f ro m c u s t o m e r

remained flat at N112.12 billion in the period under review.

“We achieved a number of strategic imperatives during the quarter and committed more investments in the future of the business - building a solid foundation for sustainable and superior return to our shareholders” said Kennedy Uzoka, Group managing director/CEO, UBA Plc. Uzoka said that he is pleased that the Bank’s Virtual Banking Chatbot, Leo, which debuted on Facebook earlier in the year, was successfully launched on WhatsApp during the quarter.

“This new channel offering, which enables our customers to fulfil their banking transactions through simple chat commands, is another premier initiative in our suite. The early pay-offs are quite compelling – recent customer acquisitions and

BD MARKETS + FINANCE Analysts: BALA AUGIE

broader transaction volume growth are exciting ‘leading indicators that reinforce our confidence in these novel channels,’’ said Uzoka.

UBA’s interest expenses were up by 37.81 percent to N118.23 billion in the period under review from N85.80 billion as at September 2017.

A breakdown of interest expense shows deposits from customers were up 41.15 percent to N79.10 billion in September 2018 as against N54.87 billon the previous year. Borrowings increased by 61.75 percent to N25.38 billion in the period under review from N15.69 billion as at September 2017.

Effective management of exp ens es underpin profit UBA’s pretax profit grew by 1.01 percent to N79.11 billion in September 2018 as against N78.32 billion as at September 2017. The slight uptick in profit was due to a single digit increase (2.33 percent) in total operating expenses to N149.08 billion in the period under review from

The early payoffs are quite compelling – recent customer acquisitions and broader transaction volume growth are exciting ‘leading indicators that reinforce our confidence in these novel channels N145.68 billion the previous year amid regulatory induced charges and rising inflation.

A breakdown of total operating expenses shows employee staff benefit was

up 3.80 percent to N53.25 billion in the period under review from N51.30billion the previous year.

Other operating expenses were up 0.27 percent to N8.22 billion in September 2018 from N86.98 billion as at September 2017.The bank intends to consolidate on its cost control strategy in order to bolster efficiency and profitability.

“We remain committed to our five-year plan of working down CIR to 50%, which we consider to be a normalised medium-term CIR. Overall, we closed the third quarter with a post-tax RoAE of 16% and the Group remains well capitalized and liquid, as reflected in the Group’s capital adequacy of 21% and Bank’s liquidity ratio of 53%,” said Ugo Nwaghodoh, Chief Financial Controller (CFO) of the Bank.

UBA’s total operating profit moved by 1.70 percent to N238.36 billion in the period under review from N236.90 billion the previous year; driven largely due to the weak FX trading income in a number of African countries, where regulation and FX scarcity limited revenue from this segment of our business.

Profit after tax increased by 1.21 percent to N61.69 billion in the period under review from N60.92 billion as at September 2017.

Strong balance sheet validates risk assets management strategy UBAs total assets were up 10.81 percent to N4.50 trillion in September 208 from N4.06 billion the previous year.

Deposits from customers were up 14.44 percent to N3.1 trillion in the period under review from N2.73 trillion the previous year.

“Shareholders’ fund remained very strong at N509.3 billion, even as the implementation of International Financial Reporting Standard (IFRS) 9, moderated the Group’s equity by 3.8% year-to-date,” said the Bank.

Tuesday October 2018

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NEWS Tambuwal calls for more funding for National Assembly OWEDE AGBAJILEKE, Abuja

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espite clamour in some quarters for reduction of National Assembly budget, the immediate past speaker of the House of Representatives and Sokoto State governor, Aminu Tambuwal, has made a case for more funding of the Legislature.

This, he argued, will enable the lawmaking body perform its constitutional responsibilities of lawmaking, representation and oversight more effectively.

Delivering a lecture in Abuja Monday at the Second Convocation Ceremony of the National Institute of Legislative and Democratic Studies (NILDS), Tambuwal explained that the presidential system of government currently under operation in Nigeria is very expensive to maintain.

He said: “The constitutional responsibilities of the National Assembly are enormous, especially in the areas of lawmaking and oversight.

Adequate financial resources are required for the Assembly to be able to discharge these

responsibilities effectively in line with public expectations.

“A study by NILDS observed funding gaps in critical areas of committee activities including meetings, implementation of oversight visits and activities, holding interactive sessions and conducting public and investigative.

“I am sure this may not go down well with a large percentage of the populace but we cannot run away from the fact that the National Assembly requires more funding”.

He, however, lamented that a major challenge facing the legislature was that of high turnover, stressing that the inability of ranking lawmakers to secure return tickets to the Legislature would negatively affect the institutional memory of the Assembly.

It would be recalled that over 70 percent of senators in the Seventh Senate lost their tickets, even as political pundits say the situation would be worse in the Eighth Senate.

Tambuwal added that interference of the executive in the activities of the legislature must cease so that the legislature can truly be free to carry out its functions.

In his address, Peter Lewis of the Johns Hopkins University commended the Eighth National Assembly for being the most independent legislature in the history of Nigeria.

Lewis, Director of African Studies and a Professor of Advanced international Studies at the University Washington DC, USA said that the First and Second Assemblies were basically instruments of the Executive.

He said that the Second Assembly for instance had only one member sponsored bill unlike the current National Assembly where most of the over 200 bills that had been passed were sponsored by members of the legislature.

“The National Assembly in Nigeria’s Fourth Republic – now in its fifth session since the inauguration of democracy in 1999 – is unlike any previous parliamentary institution since independence.

“This is not because of the design of the assembly, which has roots in the British parliamentary tradition rather, it is the roles and functions of the NASS that are distinctive. It is the first independent legislature in Nigerian history.

Polaris Bank GMD visits Pan Ocean’s facilities commissioning

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roup managing director of Polaris Bank Limited, Adetokunbo Abiru, has visited Pan Ocean Oil Corporation’s OML-147 flow station at Owa-Alidinma and the Ovade-Ogharefe Gas Processing/LPG Propane Plant II, both in Delta state.

The multimillion-dollar projects, which are slated for commissioning in the next few months, are set to be game changers in the oil and gas industry. They will contribute immensely to national electricity supply and crude oil output when fully operational.

Under the leadership of Pan Ocean Oil Corporation’s chairman/managing director, Festus Fadeyi, OPL 275 (Oil Prospecting Lease 275) was converted to OML 147 (Oil Mining Lease 147) in 2014

to enable drilling for first oil and subsequent production.

When full production commences, OML 147 is expected to attain peak output of 11,000 barrels of crude oil and 90 million standard cubic feet of gas per day.

On the other hand, the Ovade-Ogharefe Gas Processing Plant/LPG Propane Plant II will boost electricity supply in the country, as it will serve as a close source of lean gas to the NIPP Power Plant sited at Ihobbor, Edo State.

The facility will also supply LPG (Liquefied Petroleum Gas) to households across the country.

Speaking during the oneday facilities tour, Abiru, who was accompanied by Tutu Alu, group head corporate banking, Polaris Bank, said, “A lot of work and investment has gone into these projects,

based on what I have seen.

However, our priority at the moment is the commissioning and the cash flow that will follow.”

Phase II of the OvadeOgharefe Gas Processing Plant/LPG Propane Plant is designed to expand gas processing capacity at the plant to 200 million standard cubic feet per day. It incorporates a cryogenic process to deliver bone-dry gas streams, LPG and other natural gas liquid streams for domestic and international use.

According to the Base Operations Manager, Engr. Monday Ikhureigbe, “29 storage tanks are already in place at this facility, they were built to store approximately 194,400 gallons of Propane and 244,640 gallons of Propane/ Butane mix (LPG) from an infeed gas of 200MMSCF/D.”

BEDC restates commitment to meet consumers’ need IDRIS UMAR MOMOH, Benin

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anagement of Benin Electricity Distribution Company (BEDC) has restated its commitment to meet the power need of customers under its jurisdiction, in spite of the current low power generation by the transmission companies.

Fidelis Obishai, Edo State head of BEDC, made the pledged during a press briefing against the backdrop of the epileptic power supply in the state in Benin City.

Obishai, who said the electricity company was in partnership with three

transmission companies in the state, noted that it currently had access to about 360 megawatts (mw) as against 800mw needed to services about 900,000 customers in four states of Edo, Delta, Ondo and Ekiti.

He listed the transmission companies to include, Transmission Company of Nigeria (TCN), Sapele Road, Benin City; Independent Power Plant (IPP), Ihovbor, and a transmission company located at Okada.

The BEDC boss, who assured consumers of the ultimate desire of the company to light up the four states with constant and regularly power, noted that the

current power outage was occasioned by the faulting transformers of transmission companies.

He said the TCN on September 24, 2018, lost 60MVA transformer feeding 33KVA feeder at Ikpoba Dam injection sub station, 33KVA feeding Evbotubu/Egor axis and transformer serving Sapele Road to Koko feeders in Delta State.

He also added that there was a cable explosion of the 150MVA transformer at Ihovbor Power Plant/TCN substation on October 8, 2018, that resulted in power outage in Ikpoba Hill, Ugbowo, UNIBEN, UBTH, Okada axis, among others.

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Indonesia holds lessons for Nigeria’s...

Continued from page 1

of distribution and domestic

patronage over growth.

The result of that decision has opened up a yawning gap between Indonesia and Nigeria. Drawing from lessons learnt with Indonesia, which despite being on the same level as Nigeria in 1960, has now grown far ahead of the Nigerian economy, Lewis advised Nigeria to leverage Indonesia’s experience to get things right.

He noted that as a result of accelerated economic reforms, Indonesia’s GDP per capital has double that of Nigeria, saying, “The key factor of Indonesian’s poverty reduction is hinged on

the diversification of its economy away from the oil and gas resources.”

Today, Indonesia has been able to reduce unemployment to below 7 percent from as high as 40 percent in 1960.

According to Lewis, Indonesia’s economy currently rests on three pillars - Exports, Manufacturing and Agriculture.

“This form of strategy by Indonesia should be the future of Nigeria. The Policy framework is remarkably, what made the difference, for more than three decades comprising of economic stability and competitiveness,” he said.

While Nigeria frequently emphasises the politics of distribution,

Indonesia is more concerned with shared prosperity. This singular factor will tell you, it is about the country, not the region.

“Focusing on growth enhancing changes while shutting out political interference is key in advancing economic growth and development of every nation. Modest changes in governance and institution can produce significant growth effect.

“We must avoid the fallacy that all government challenges must be resolved before we attract huge investments. We don’t have to get it right at once. We must focus on strategic changes that would move us forward as we fight corruption and strengthen our institutions.

Court determines Fayose’s bail application October 24: Immediate past governor of Ekiti State, Ayodele Fayose, on Monday appeared before a Federal High Court, Lagos, charged with N30.8 billion fraud.

Fayose is being prosecuted by the EFCC alongside his company — Spotless Investment— on an 11-count charge of N30.8 billion fraud. He, however, pleaded innocence of the offences.After the arraignment, the defence counsel, Kanu Agabi, informed the court of a motion on notice for the bail of the accused, and told the court that same had been served on the prosecution. In response, the EFCC prosecutor, Rotimi Oyedepo, confirmed service of the bail application but told the court that he required time to reply. Justice Mojisola Olatoregun, consequently adjourned the case until October 24 for the hearing of the bail application. Meanwhile, following a plea by the defence counsel on the temporary remand of Fayose, the court ordered that he be remanded in custody of the EFCC pending bail.

Amosun accuses Tinubu, Osoba of...

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Chamber in Abeokuta.

Thevisiblyaggrievedgovernorchallenged the two national leaders of APC to come out from their shell and refute theallegations,askingthemtobecourageous enough and tackle him directly instead of hiding behind a finger.

“The President (President Muhammadu Buhari) already knows there was no election in Ogun State.

He knows that they just went to Lagos, and wrote all the results. What they did is fraud. The National Working Committee or the National Chairman cannot say there was any election in Ogun State. It was all fraud.

“President Buhari already knows there was no election in Ogun State, other than the one we held. The issue of Chief Osoba and Asiwaju (Bola Tinubu) and Co, what we said was that there was an indefinite silence from their end, and silence means consent. You can record me (telling the journalists that were present) and publish it in your newspapers.

“We have not heard one word from any of them. Was there any election in Ogun State? Yes or No? They should come out. Those that are hiding behind one finger, they cannot come out? People at this level should be courageous enough to take position, to come out, to come and tell us whether there was election.

“They (Osoba’s caucus) said that they held an election. The one that we had, there was live telecast, people even witnessed it,” the governor said.

He said the two former governors of Lagos and Ogun states were working together with Adams Oshiomhole, national chairman of APC, to ensure that Abiodun remained the 2019 governorship candidate of APC, having illegally concocted the fake governorship primary poll results

presented to the National Working Committee of the party.

Two governorship primaries were conducted in Ogun during the last nationwide APC primaries for which two governorship candidates emerged; the one conducted by Ibikunle Amosun’s caucus of APC produced the much touted Yewa/Awori - Ogun West candidate, Adekunle Akinlade, while that of Segun Osoba, saw Dapo Abiodun from Ijebu/Remo - Ogun East, emerging as the APC standard bearer for 2019 general elections.

The crisis rocking the APC deepened further on Monday as the Supreme Court set aside the decision of the Court of Appeal, Port Harcourt Division, which gave permission for the conduct of congresses of Rivers State chapter of the APC, in May this year.

By this judgment, all congresses held by the party in the state have been voided.

In voiding the decision of the Appeal Court, Justice Centus Chima Nweze, in a judgment in an appeal filed by one Abdulahi Umar, the apex court held that the Court of Appeal ought not to have vacated the injunctive order issued against the APC by the Rivers State High Court on the conduct of the congresses.

The Supreme Court lampooned the Appeal Court for judicially indulging APC and vacating the injunctive order in the party’s favour when there is abundant evidence that the APC was in contempt of court.

The apex court further held that the Court of Appeal ought not to have granted its discretion in favour of APC because the party was in grave violation of the order of the High Court.

Justice Nweze said the Appeal Court had a duty to protect a lawful subsisting order and ought not to have granted favourable judicial discretion for a party that willingly

disobeyed valid court order.

“It is unfortunate and wrongful for the Court of Appeal to have entertained a party in contempt of a valid court order to the extent of granting judicial favour by way of staying of execution of an injunctive order when the party at the centre of the dispute was in gross contempt of court.

“It is a serious matter for anyone to flout a court order and in the instant case, it is clear that the respondent (APC) was in grave disobedience to 2 lawful court orders,” the court held.

“It is sacrilegious, ill-fated and suicide mission for the Appeal Court to have departed from various decision of the Supreme Court that any party in contempt of court ought not to be granted judicial discretion and in this matter Appeal Court is bound to follow Supreme Court final decision.”

He said, what was more; refusal of the Court of Appeal to be bound by final decision of Supreme Court was a gross insubordination.

The apex court therefore nullified and set aside the decision of the Appeal Court delivered on June 21, 2018.

Justice A. C. Nwosu, of the Rivers State High Court had in an exparte motion filed by Umar restrained the APC from conducting the congresses pending the determination of the suit instituted by Umar, complaining against his marginalization and 22 others in the said congresses.

But while the injunctive order of the High Court was subsisting, the APC went ahead and conducted the ward, local government and state congresses on May 19, 20 and 21.

After the conduct of the congresses, the court of Appeal in a ruling on an application by APC seeking stay of execution of the High Court injunctive order and stay of proceedings of the main suit, vacated the injunctive order and refused to stay hearing of the substantive matter prompting Umar to complain to the Supreme Court.

“Indonesia and China did not necessarily eradicate corruption before they made inroads into business transactions and activities. Their focus was on policy assurances to potential investors, while they strengthened their institutions,” he said.

Indonesia, he said, is almost unrecognisable from the petroleum economy it used to be. The country has rested on manufacturing and agriculture to diversify its export base.

“That could be the future of Nigeria, but should be the future of Nigeria,” he said.

“Nigeria remains consistently on the verge of a development break out but is stuck as a result of policy inertia,” he noted, before outlining five key objectives for the Nigerian government to boost economic growth and recover lost grounds.

The first is the need for a development-oriented leadership that can drive change and ensure a successful economic transition. This entails having leaders that are bold to push through painful and unpopular economic reforms for the benefit of long-term development.

The second step would be to make modest changes in governance and institutions. This can produce significant growth effects.

“We don’t have to get it all right at once, but we can focus on specific changes that can move Nigeria forward,” he said.

Third is to focus on bridging constraints to growth like easing capital transactions, investing in efficient transport and the elephant in the room, addressing the power challenge.

Focusing on livelihoods rather than jobs will be key to reducing unemployment and should be the fourth thing the government does to trigger economic prosperity, according to Lewis.

The fifth target should be to revive sectorial strategies like the industrial policy. That would open up other revenue sources for the government and create jobs.

“In Indonesia, the government workedwithprivatesectorstakeholders to attain sectorial success,” he added.

After slipping into its first reces-

Tuesday 23 October 2018

sion in a quarter of a century in 2016, Nigeria exited recession in 2017 but growth has remained fragile and lags population growth.

Growth for the second quarter of 2018 slowed to 1.5 percent from 1.95 percent in the first quarter of 2018, as agriculturaloutputdeclinedontheback of herder-farmer clashes and flooding in the northern part of the country.

For a country whose population grows an average of 3 percent, the economy should be growing at about 6 percent to absorb rising population. The economic weakness has translated into increasing poverty levels and Nigeria has now taken over from India as the poverty capital of the world according to a recent article by the Brookings Institute.

Nigeria can lift millions of people out of poverty if policy makers can create a congenial environment for businesses to thrive, according to Lewis.

He said China lifted 600 million people out of poverty in the space of 10 years.

“All they did was to privatize some segment of agriculture sector and the policy saw farmers become rich,” Lewis said. “With right investment in Agriculture, Nigeria can create jobs for millions of people,” the John Hopkins professor said.

That means 86.9 million Nigerians now living in extreme poverty represent a figure that represents nearly 50 percent of its estimated 180 million population will have a chance of escaping the poverty trap.

Without the required reforms, analysts fear that the country poverty numbers will worsen as the country’s population, which currently is growing at three percent annually-is expected to hit 400 million by 2050, according to World Bank Report.

But Vice President Yemi Osibanjo, who declared the economic summit open, said the Federal Government was making concerted efforts towards reducing poverty by investing in Small Medium Enterprises (SMEs).

“We have spent N15 billion in interest free loans and the large chunk of these loans have gone to women,” Osibanjo said, saying we have given solar power to 81,293 shops.

States with higher GDP record lower scores...

Continued from page 2

“For the first time, this report is looking not only at regulatory efficiency but at measures of regulatory quality.”

According to Rachid Benmessaoud, country director of World Bank, Nigeria continues to face the challenge of diversifying its economy and making the country more business-friendly across all sectors.

“And even more encouraging is that the gap between the lagging states and the better-performing states is getting narrower on regulatory efficiency,” Benmessaoud said. “To put it simply, lagging states are catching up with their better-performing peers, yet challenges remain.”

According to Dolapo Ashiru, a Lagos-based financial analyst, government has to leverage technology for ease of doing business in Nigeria as registering a business in Nigeria takes a whole lot of time.

“The states need to make ease of business better by having a functional website for people to understand business process and procedures to engage those parastatals,” Ashiru, said.

The World Bank admitted that Nigeria’s heavy dependence on oil posed structural challenges and have made it difficult to achieve sustained growth, create jobs and reduce poverty, although it also noted that most states were improving as 29 states had implemented 43 reforms in the area of starting a business, adding however that gaps still existed in the

nation’s regulatory environment.

According to the report, although no state performed excellently well, however Kaduna, Enugu, Abia, Lagos and Anambra made the biggest strides in improving regulations as the report showed it is easier to start a business in FCT Abuja and Lagos, deal with construction permits in Niger and Kano, register a property in Kaduna and Zamfara, and enforce a contract in Kaduna and Bauchi.

BusinessDay analysis of the report also shows three northern states performed very well in construction permits and enforcing contracts stand out as Niger, Kano and Jigawa have a distance to frontier score of almost 80 percentage points on dealing with construction permits, which implies it would rank in the top 25 of the 190 economies measured globally by Doing Business.

Also, the report shows dealing with construction permits is the only indicator where multiple Nigerian states would place in the top quartile of the rankings globally as the three states also surpassed the average performance of OECD high-income economies, due to the fewer number of procedures required and the speedier time with which approvals are issued.

In enforcing contracts, Kaduna closely followed by Bauchi and Jigawa, lead in the distance to frontier score for the indicator and are near the top quartile of the global rankings. Imo, on the other hand, is in the bottom 40 ranked economies.

Politics & Policy Tuesday 23 October 2018

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Supreme Court voids Rivers APC congresses FELIX OMOHOMHION, Abuja

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he Supreme Court, Mo n d ay , s e t a s i d e the decision of the Court of Appeal, Port Harcourt Division, which gave permission to the conduct of congresses of Rivers State chapter of the All Progressives Congress (APC), in May this year.

By this judgment, all congresses held by the party in the state have been voided.

In voiding the decision of the Appeal Court, Justice Centus Chima Nweze, in a judgment in an appeal filed by one Abdulahi Umar, the apex court, held that the Court of Appeal ought not to have vacated the injunctive order issued against the APC by the Rivers State High Court on the conduct of the congresses.

The Supreme Court lampooned the Appeal Court for judicially indulging APC and vacating the injunctive order in the party’s favour when there is abundant evidence

Oshiomhole

that the APC was in contempt of court.

The apex court further held that the Court of Appeal ought not to have granted its discretion in favour of APC because the party was

in grave violation of the order of the High Court.

Justice Nweze said that the Appeal Court has a duty to protect a lawful subsisting order and ought not to have granted favourable

Tension in Edo Assembly as members impeach deputy speaker IDRIS UMAR MOMOH, Benin

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here was tension in the Edo State House of Assembly on Monday as members of the house impeached its Deputy Speaker, Victor Edoror, representing Esan Central constituency.

As early as 8am the premises of the house was taken over by combined armed security personnel made up of Department of State Security, mobile policemen and men of the Nigerian Security and Civil Defence Corps (NSCDC) while hefty and fierce-looking thugs positioned themselves at strategic locations within the premises.

It was gathered that the presence of the security personnel was to forestall possible impeachment of the speaker of the House over

alleged legal suit instituted against APC as a result of the alleged substitution of his name with that of Peter Akpatason by the national leadership of the party.

Chief Whip of the House, Osaigbovo Iyoha (APC), representing Oredo East constituency who moved the motion for impeachment, said the deputy speaker was impeached over alleged misappropriation of funds, corruption and act of desperation tantamount to causing division in the house.

The motion was seconded by Emmanuel Agbaje (APC), representing Akoko-Edo II. Iyoha said the letter of impeachment was signed by 16 members of the House.

But efforts by the Foly Ogedengbe (APC), representing Owan East constituency, to move counter-motion ended in futility as the speaker

refused to recognise him.

Ogedengbe, however, accused the Speaker of the House, Kabiru Adjoto (APC), representing AkokoEdo I, of embezzling funds amounting to about N100 million belonging to the house.

The impeachment of the deputy speaker, however, resulted in rowdiness as the embattled deputy speaker seized the mace of the house.

The speaker of the House, Kabiru Adjoto, however, announced the suspension of the impeached deputy speaker, Foly Ogedengbe and Gani Audu (APC), representing Etsako West I, for unruly behaviour for three months.

Roland Asoro, majority leader of the house, nominated the former speaker of the house, Justine Okonobo, as the new deputy speaker and seconded by Emmnauel Agbaje.

the entire Abia State, while also remaining the voice of young people in Nigeria”.

The business mogul, Eze, who is the Founder and Chairman of Atlas Oranto Petroleum, urged Anyaso to continue to support the progress of Bende, the entire Abia State

and indeed Nigeria as, according to him, the future holds a lot of promises seeing the amount of effort, time and resources he, Anyaso has devoted to the wellbeing of the people, especially children and the elderly through the Ahuoma Anyaso Foundation. .

In his response, Anyaso who is the convener of New Nigeria Movement 2019, (NN19), thanked Chief Eze for a warm reception while requesting for the oil mogul’s continued and sustained fatherly love as he has always been known for.

“I am grateful today for the warm reception. I can assure you and the people of Bende that come 2019 when I assume the position in the House of Representatives, I will not let Bende down. The confidence you have in me will be justified,” he said.

judicial discretion for a party that willingly disobeyed valid court order.

“It is unfortunate and wrongful for the Court of Appeal to have entertained a party in contempt of a valid court order to the extent of granting judicial favour by way of staying of execution of an injunctive order when the party at the center of the dispute was in gross contempt of court.

“It is a serious matter for anyone to flout a court order and in the instant case, it is clear that the respondent (APC) was in grave disobedience to 2 lawful court orders”, the court held.

The court further said: “It is sacrilegious, ill-fated and suicide mission for the Appeal Court to have departed from various decision of the Supreme Court that any party in contempt of court ought not to be granted judicial discretion and in this matter Appeal Court is bound to follow Supreme Court’s final decision.

“What is more, refusal of the Court of Appeal to be bound by final decision of Supreme Court is

a gross insubordination.”

The apex court therefore, nullified and set aside the decision of the Appeal Court delivered on June 21, 2018.

Justice A. C. Nwosu, of the Rivers State High Court had in an exparte motion filed by Umar restrained the APC from conducting the congresses pending the determination of the suit instituted by Umar, complaining against his marginalisation and 22 others in the said congresses.

But while the injunctive order of the High Court was subsisting, the APC went ahead and conducted the ward, local government and state congresses on May 19, 20 and 21.

After the conduct of the congresses, the court of Appeal in a ruling on an application by APC seeking stay of execution of the High Court injunctive order and stay of proceedings of the main suit, vacated the injunctive order and refused to stay hearing of the substantive matter prompting Umar to complain to the Supreme Court.

Kwara PDP governorship candidate denies forging NYSC certificate SIKIRAT SHEHU, Ilorin

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azak Atunwa, the governorship candidate of the People’s Democratic Party (PDP) in Kwara State, has denied as untrue and unfounded a newspaper’s report that he forged his National Youth Ser vice Corps (NYSC) certificate.

An online medium, Premium Times had reported that Atunwa had issue with his mandatory National Youth Service Corps (NYSC) certificate.

But, in a swift reaction, Atunwa said that he did not submit any unsupported NYSC certificate as

suggested by the online medium.

The PDP gubernatorial candidate added: “I did not submit any unsupported NYSC certificate as suggested by you (Premium Times).

“I strongly advise that you verify each and every assertion you wish to make. You may wish to make formal enquiries/verifications of all institutions concerned.

“You should also be circumspect enough to authenticate the provenance of any document you may be handed if it’s not from a formal and official source.

“An organisation such as yours should not fall short of the required legal and ethical standards.”

Ondo APC chairman calls for unity of 2019 Arthur Eze hosts Anyaso, congratulates him on victory at primary election among members ahead bers to be negatively affected by some

A

rthur Eze has congratulated businessman and politician, Chimaobi Desmond Anyaso, on his recent victory at the just concluded PDP primaries where Anyaso emerged the PDP flag bearer for the 2019 House of Representatives seat for Bende, for the forthcoming general election.

Speaking at his residence when Anyaso paid him a visit, Eze said: “We will continue to show our support for people like Chima who have overlooked all the pressures and complexities of politics to take a deep interest in it. For your well-deserved victory at the primaries, I am proud and will do all in my power to support you.

Your victory is well deserved and I am convinced that you will bring development to Bende and indeed

Chima Anyaso and Arthur Eze

YOMI AYELESO, Akure

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head of the 2019 general election, Ondo State chairman of the All Progressives Congress (APC), Ade Adetimehin has called on the party faithful to close ranks and support the party efforts for victory in the elections.

He further appealed to ward chairmen in the state to redouble their efforts to ensure that genuine reconciliation takes place in their various domains.

Adetimehin spoke at Ode Irele, in Irele Local Government Area, at an empowerment programme by Emmanuel Igbasan, who is the State Commissioner for Budget and Economic Planning.

In a statement by the State Publicity Secretary, Alex Kalejaye, the Chairman said it was not unusual for mem-

decisions of the party leaders, saying ability to manage the crisis and forge ahead was of utmost importance.

He explained that government patronage might not get to everybody at the same time, adding, “Certainly it would go round if party members keep faith and agitate within the fold.”

Adetimehin said the state had thus far expended the available resources in the State to promote people’s wellbeing.

“Governor Oluwarotimi Akeredolu has managed to leave within the available resources without borrowing a dime from anywhere.

“I can assure you that very soon everyone would be happy. I charge you ward chairmen to be more dedicated and ensure proper reconciliation is carried out in your wards.

The victory of the party remains our focus,” he said.

Tuesday 23 October 2018

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BUSINESS DAY

Mass defection looms in APC over NASS primaries OWEDE AGBAJILEKE, Abuja

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here are strong indications of a potential exodus of All Progressives Congress (APC) senators following the party’s submission of candidates’ list to the Independent National Electoral Commission (INEC) for the 2019 general elections.

BusinessDay gathers that most APC senators, who were excluded from the list submitted by the ruling party, are set to dump the party at the resumption of Senate plenary on Tuesday.

Oil rises on Iran sanctions, though US-China trade war clouds outlook

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il prices rose on Monday as markets were expected to tighten once US sanctions against Iran’s crude exports are implemented next month.

Front-month Brent crude oil futures LCOc1 were at $79.99 a barrel at 0558 GMT, up 21 cents, or 0.3 percent, above their last close.

US West Texas Intermediate (WTI) crude futures CLc1 were at $69.34 a barrel, up 22 cents, also 0.3 percent above their last settlement.

The US sanctions on the oil sector in Iran, the thirdlargest producer in the Organisation of the Petroleum Exporting Countries (OPEC), are set to start on November 4.

The United States under President Donald Trump is trying to reduce Iranian oil exports to zero to force the country to renegotiate an agreement on its nuclear programme.

US Treasury Secretary Steven Mnuchin told Reuters on Sunday that it would be harder for countries to get sanction waivers than it was during the previous Obama administration, when several countries, especially in Asia, received them. OPEC agreed in June to boost supply to make up for the expected disruption to Iranian exports.

However, an internal document reviewed by Reuters suggested OPEC is struggling to add barrels as an increase in Saudi supply was offset by declines elsewhere.

Fatih Birol, executive director of the International Energy Agency (IEA), said on Monday that other producers might struggle to fully make up for the expected Iran disruption, and that oil prices could rise further.

Some relief may come from North America, where US drillers added four oil rigs in the week to October 19, bringing the total count to 873, Baker Hughes energy services firm said on Friday, raising the rig count to the highest level since March 2015.

Serving APC senators who either lost their return tickets to contest the 2019 National Assembly election or other positions include: Adesoji Akanbi (Oyo South), Babajide Omoworare (Osun East), Sola Adeyeye (Osun Central), Shehu Sani (Kaduna Central), Abdullahi Gumel (Jigawa North West), Hope Uzodinma (Imo West), Aliyu Sabi Abdullahi (Niger North), Lanre Tejuoso (Ogun Central), Kabiru Marafa (Zamfara Central), Sani Yerima (Zamfara South), Tijjani Kaura (Zamfara North), Abu Ibrahim (Katsina South), Bukar Abba Ibrahim (Yobe East),

Magnus Abe (Rivers State), Abu Ibrahim (Katsina South) among others.

In a report that went viral on Saturday, chairman, Senate Committee on Local and Foreign Debts, Shehu Sani, had announced his resignation from the ruling APC. The letter, which was addressed to the chairman of the party in Ward 6, Tudun Wada North, Kaduna, was also copied to the state chairman of the party, national vice chairman North West, national vice chairman APC North as well as the party’s national chair-

man.

Although the embattled senator did not give any reason for his resignation, BusinessDay learns that this may be connected with the eleventh hour substitution of his name with that of Uba Sani - an aide to Kaduna State Governor ElRufai - to the electoral body as the party’s standardbearer for Kaduna Central.

The senator, who took to his Facebook page on Sunday to thank his supporters, also announced that he would formally announce his new party on the floor of the hal-

lowed chambers on Tuesday.

“This is to thank all my supporters and friends for the show of solidarity and assurances of support over my decision to exit the APC. I assure you that in the next two days you will be informed of my new party. And be rest assured I will contest in the upcoming elections Insha Allah,” he said.

The situation is even worse in the lower legislative chamber - the House of Representatives - where about 100 APC lawmakers were denied the opportunity to re-contest their seats in the 2019 general

elections.

Despite their inability to secure their party’s nod to re-contest the 2019 elections and the expiration of the timeframe given by the electoral body for political parties to conclude their primaries, BusinessDay gathers that the aggrieved lawmakers could still re-contest on other party’s platform if they wish to.

However, this is only possible with political parties that submitted list of candidates for the National Assembly elections from the same constituency where the aggrieved senator comes from.

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Obaseki mobilises traditional rulers Liquidity: Experts urge SEC, NSE to woo Tension in Edo Assembly as members for 2018 Alaghodaro Summit more local investors with tax incentives impeach deputy speaker

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he Edo State governor, Godwin Obaseki, has begun the mobilisation of traditional rulers across the state ahead of the second edition of the Alaghodaro Summit, scheduled for November.

The move to galvanise occupiers of the revered traditional seats is predicated on the crucial role traditional rulers play in the lives of Edo people and residents, as custodians of the people’s culture and traditions.

Special adviser to Governor Obaseki on media and communication strategy, Crusoe Osagie, said: “Our royal fathers and chiefs across the state are being mobilised by the governor for a colourful Alaghodaro Summit which has Edo people as its focus.

“As representatives of various communities and clans, these traditional rulers are in the best position to gauge the impact of the Obaseki-led administration on the people, in the last two years.”

Osagie explained, “They are very influential. Most of the traditional rulers are opinion leaders and moulders. They foster peace and unity in their domains and have proven to be dependable allies in the state’s growth

trajectory, as enunciated by governor Obaseki.”

The governor’s aide maintained that “traditional rulers in the state have been supportive of the various reforms executed in critical sectors of the states, such as the fight against human trafficking and child molestation; the scrapping of Community Development Associations (CDAs); efforts at maintaining law and order, and the ban on the use of thugs for the collection of revenue in parts of the state among others.”

He said the traditional rulers would be at the Alaghodaro Summit to share their experiences with other participants at the event.

“For example, the traditional rulers in Edo North and central senatorial districts would talk about the impact the Edo Fertiliser and Chemical Plant in Auchi, is having on agricultural activities in the area.

“Worthy of note is the role the Benin Monarch, Oba Ewuare II, has played in mobilising parents for the immunisation programme; his royal backing for the fight against human trafficking and illegal migration as well as the outlawed Community Development Association (CDAs),” he said.

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ome capital market analysts on Monday urged the regulators to introduce more incentives that would encourage more local investors’ participation in the nation’s bourse to stem market volatility.

They told the News Agency of Nigeria in Lagos that the Securities and Exchange Commission (SEC) and the Nigerian Stock Exchange (NSE) that the incentives would make the bourse more active.

A professor of Economics, Sheriffdeen Tella of Olabisi Onabanjo University Ago-Iwoye, Ogun State, said more multinationals should be encouraged to participate through tax incentives.

Tella said corporate investors, especially those in the telecommunication and hospitality subsectors, would minimise the ripple effects of foreign inflow.

“This has a way of deepening the market, building confidence and making the market more active,’’ he said, noting that the often bearish trend of the bourse was occasioned by withdrawal of funds by foreign sources.

“This is so because for-

eign investors react easily to world prices and therefore withdraw or inject funds at will,’’ he said.

Ambrose Omordion, chief operating officer, InvestData Limited, Lagos said that the recovery witnessed in the market last week could be sustained if more local investors were wooed into the market.

Omordion urged local investors to take advantage of the low prices of stocks presently with strong fundamentals in order to reap medium-tolong-term benefits.

He said that investors should allow numbers to guide their decisions, while taking a position in any stock, especially now that stock prices had remained low.

According to Omordion, the huge decline in stocks from its January peak is due to investors’ movement of funds to safer haven over uncertainties arising from next year’s general elections.

He said that the shortterm bullish transitions in a bearish market recorded recently would likely continue if there was no local or external shock.

IDRIS UMAR MOMOH, Benin

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here was tension in the Edo State House of Assembly on Monday as members of the House impeached its deputy speaker, Victor Edoror, representing Esan Central Constituency.

As early as 8am, the premises of the Assembly had been taken over by combined armed security personnel made up of Department of State Security, mobile policemen and men of the Nigerian Security and Civil Defence Corps (NSCDC) while hefty and fierce looking suspected political thugs positioned themselves at strategic locations within the premises.

It was gathered that the presence of the security personnel was to forestall possible impeachment of the speaker of the House over alleged legal suit instituted against APC as a result of the alleged substitution of his name with that of Peter Akpatason by the national leadership of the party.

Chief Whip of the House, Osaigbovo Iyoha (APC), representing Oredo East Constituency, who moved the motion for the impeachment, said the deputy speak-

er was impeached over alleged misappropriation of funds, corruption and act of desperation tantamount to causing division in the House. The motion was seconded by Emmanuel Agbaje (APC), representing AkokoEdo II. Iyoha said the letter of impeachment was signed by 16 members of the House.

But efforts by the Foly Ogedengbe (APC), representing Owan East Constituency to move countermotion ended in vain as the speaker refused to recognise him.

Ogedengbe, however, accused the speaker of the House, Kabiru Adjoto (APC), representing Akoko-Edo I, of embezzling funds amounting to about N100 million belonging to the House.

The impeachment of the deputy speaker, however, resulted to rowdiness as the embattled deputy speaker seized the mace of the House.

The House speaker, however, announced the suspension of the impeached deputy speaker, Foly Ogedengbe and Gani Audu (APC), representing Etsako West I, for unruly behaviour for three months, respectively.

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US-South Korea divergence over North puts 70-year alliance at risk Washington takes tough line over Seoul’s attempts to deepen engagement with Kim BRYAN HARRIS, DEMETRI SEVASTOPULO AND

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or months the diplomatic duel between Seoul and Washington was played out behind closed doors as the two longstanding allies quietly diverged over the crucial next steps for dealing with North Korea.

Then the delicate manoeuvring came crashing into public view when US President Donald Trump shot down a tentative suggestion by South Korea to lift sanctions on the reclusive regime with a stinging rebuke: “They do nothing without our approval.”

For South Koreans, it was a painful reminder of the country’s historic reliance on US support. But it also served as a salutary notice that the two democratic nations need quickly to reach a consensus on how to proceed with Pyongyang or risk undermining their 70-year-old alliance.

“On the issue of North Korean denuclearisation, the three key countries have different ideas on what to do next and that is creating a crack in the alliance between South Korea and the US,” said Kim Yeol-soo, a policy adviser at Seoul’s presidential Blue House.

The root of the issue stems from the landmark Singapore summit between Mr Trump and North Korean leader Kim Jong Un in June when the then-bitter adversaries agreed to reset relations and work towards the denuclearisation of the Korean peninsula.

From the perspective of Pyongyang, a reset in relations should entail the lifting of exacting international sanctions, a point that state media has raised repeatedly in recent weeks.

For Seoul, the Singapore summit was the starting gun on economic integration with the North, fulfilling President Moon Jae-in’s broader ambition to use engagement to foster peace on the tension-prone penin-

North Korean leader Kim Jong Un, left, with South Korea’s president Moon Jae-in at their meeting in Pyongyang last month © Getty sula.

The US, meanwhile, is attempting to maintain stringent sanctions on the North Korean regime in the hope that economic isolation will force it to abandon its arsenal of nuclear devices.

This divergence in methods has already sparked some tension between the allies and analysts fear more is to come. In August, the US-led United Nations Command blocked early attempts by Seoul to develop road and rail links with North Korea, a move that irked South Korean diplomats.

Then, this month, the US Treasury warned several South Korean banks against doing business with the North after the lenders began rolling out unification-themed financial products.

Chinese stocks make biggest one-day gain in nearly 3 years CSI 300 climbs more than 4% after government signals support

EMMA DUNKLEY AND ALICE WOODHOUSE

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hinese stocks had their biggest one-day gain in nearly three years on Monday, staging a dramatic rebound after Beijing made a concerted move last week to reassure investors and buoy markets following a steep sell-off.

The CSI 300 index of companies listed on the Shanghai and Shenzhen stock exchanges closed up 4.3 per cent, its largest one-day gain since November 2015.

Shares in mainland Chinese companies listed in Hong Kong also climbed, with the Hang Seng China Enterprises Index of Chinese companies listed in the city jumping 2.6 per cent, its best day since March.

The benchmark Hang Seng index rose 2.3 per cent, helped by a gain of 3.2 per cent for Chinese gaming company Tencent.

Investors have sold out of Chinese stocks in the past several weeks, sending the CSI 300 spiralling towards its steepest monthly drop since January 2016.

They have been unnerved by months of trade tension between China and the US and concerns over emerging market currencies.

The MSCI Asia ex-Japan index is in bear market territory, having fallen 23 per cent since January.

“After what has been a tense and

terse month for Asia equities as a whole, they’re taking a breather, but that’s not to say volatility is going away,” said Kerry Craig, global market strategist at JPMorgan Asset Management.

“If China sneezes, the rest of the region catches a cold. The A-shares market has suffered a significant sell-off this year, so the rebound is expected after it’s been so volatile.”

The rally came after the heads of China’s central bank, the banking and insurance regulator, and the securities watchdog told state media on Friday that the equity market slump was not reflective of the country’s economic health, and that authorities would take steps to help markets.

The rare joint commentary followed the publication of quarterly GDP data showing weaker-than-expected 6.5 per cent growth in the third quarter. It helped the CSI 300 close up 3.1 per cent on Friday.

The measures announced last week included a pledge from the central bank to ensure adequate liquidity in the banking system, and over the weekend state media also unveiled temporary changes to individual income tax law including additional special deductions.

Investors have been spooked this year by the trade rift between Beijing

Continues on page A8

“We are, of course, cognisant of the priority that President Moon and his administration have placed on improving South-North relations. I believe this inter-Korean dialogue must remain linked to denuclearisation, and South Korea sync’d with the United States,” Harry Harris, US ambassador to Seoul, said on Wednesday.

Other senior figures are known to be less diplomatic about Mr Moon’s engagement with Pyongyang. They view economic integration as tantamount to rewarding Mr Kim, a dictator who has yet to make any concrete moves toward denuclearisation.

However, the South Korean president can easily claim to be reducing tensions, which makes it more difficult for US officials to criticise him publicly. Mr Trump has also helped

this argument by repeatedly pointing out that North Korea has not launched any missiles or conducted nuclear tests in almost a year.

Dennis Wilder, a former senior White House Asia adviser, said divergence between Washington and Seoul was “inevitable” because their priorities for North Korea were different. He said South Korea wanted to reduce tensions on the peninsula, a view that is shared by China.

While South Korea promotes a more accommodating approach, Mr Wilder said Washington viewed that policy as “premature”.

“Washington policymakers see the success that Washington had in gaining international support for the maximum pressure campaign as a key factor in bringing Kim Jong Un to the negotiating table early this year,”

said Mr Wilder.

“Washington worries that Kim’s recent slowing of the negotiations with the US over denuclearisation is an indication that Kim is encouraged by the calls for some international easing of sanctions to be less flexible.”

Mr Kim, the Blue House adviser, stressed that Seoul saw things differently. “The Moon government seems to think improving relations between the two Koreas can catalyse the North’s denuclearisation. The US doesn’t think that way,” he said.

Other South Korean analysts are more critical of the US’s hardline approach to dealing with the North. Yang Moo-jin, an adviser to the South Korean government, said Washington needed to be more flexible.

Wall Street enjoys trading bonanza from market turmoil Big banks have best summer for equities revenues since 2009 LAURA NOONAN AND ROBERT ARMSTRONG

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all Street firms are on track for their best year in equities trading for a decade — a silver lining to the market turmoil that has created misery for big bank shareholders over the past few months.

Goldman Sachs, Morgan Stanley, JPMorgan Chase, Citigroup and Bank of America have recorded their biggest summer for stock trading revenue since at least 2009, and their total equities trading revenues for the year are running at $25.2bn.

That is 18 per cent higher than the first nine months of 2017 and the highest figure for revenues at this point in the year for at least a decade, according to data collected by research firm Autonomous and calculations by the Financial Times.

The gains came as choppy stock markets in the third quarter hurt the banks, which sustained long losing streaks and underperformed the S&P 500 index by four percentage points.

“Volatility certainly does have a lot to do with it (the equities performance),” said Guy Moszkowski, a banks analyst at Autonomous in New York, adding that “equity derivatives do particularly well when

volatility picks up.

Jason Sippel, global head of equities at JPMorgan, said the strength of big banks’ equities revenues this year was surprising even to people in the industry.

Hig h vo l at i l i t y “d e f i n i t e l y goosed everybody’s numbers” in the first half of the year, he said, while the marketwide falls of five to 10 per cent experienced in the past few weeks also favoured banks since spreads typically expand.

JPMorgan’s equities revenues were up 22 per cent for the first nine months of the year, the best growth of any Wall Street firm.

“The wallet [total fees] next year and the performance of the major banks . . . will definitely be a function of the market environment,” said Mr Sippel. “Our ability to continue to grow into 2019 will depend on market conditions/ volatility.”

Alan Thomas, who co-heads equities at market-leader Morgan Stanley, said 2019’s equities trading performance was “going to be very much market and economy driven”. “I’m not saying we’ll continue the year-on-year growth that you’ve just seen but I don’t see any reason why there should be a material drop off unless something fundamental happens to the

economy.”

Bankers and analysts said new European investor protections also boosted big banks’ equities performance in 2019. “Mifid II (regulations) are really forcing our clients to consolidate their brokers,” said Brian Levine, Goldman Sachs’ global co-head of equities trading. “They had many brokers historically, but Mifid II is pushing them to select.”

The rules, which were implemented from January in the EU but have been adopted globally by some institutions, require investors to explicitly pay for things like research and corporate access instead of having the fee bundled in with trading. As a result, most investors have dramatically cut the number of brokers they use.

“That trend is really just beginning,” said Mr Levine. “It’s going to get more traction not less . . . This is the one real seminal event that’s going to drive our clients to change their behaviour.”

Mr Levine said his firm was also gaining share because of its technology investments, including a new trading platform that was launched in the second quarter this year and will be “rolled out globally over the next couple of quarters”.

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US and South Korea’s divergence over North puts 70-year alliance at risk

Russia hits back at US over withdrawal from nuclear...

Continued from page A7 and Washington, rising US interest rates, a sharp sell-off in emerging market currencies and frothy valuations in certain sectors such as technology.

China’s has been the worst-performing major equity market globally this year, and has fallen 25 per cent from its 2018 peak hit in January.

The slump in stocks has weighed on China’s currency, dragging the renminbi towards Rmb7 against the US dollar — a threshold analysts describe as psychologically significant and a level last hit a decade ago during the global financial crisis. The onshore currency rate was at Rmb6.9321 per dollar on Monday.

Technology stocks have had a torrid time, with shares in Tencent slumping nearly 40 per cent from their peak this year in January.

“With concerns over trade impact becoming larger, we have also seen fund managers trimming their China positions,” said William Yuen, a fund manager at Invesco. “China tech stocks are large and liquid and are seen as a proxy for China, so it’s one of those sectors that is an easy candidate for people to trim.”

Snap’s vanishing prospects worry investors Analysts question if Evan Spiegel is fiddling while company burns through cash

TIM BRADSHAW

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van Spiegel has been taking lessons in management from the author of The No Complaining Rule and The Power of Positive Leadership.

The creator of Snapchat quoted Jon Gordon, a bestselling author and leadership coach to the likes of computer maker Dell and the LA Dodgers baseball team, twice in his recent 6,681-word memo to all his employees.

“We are not positive because life is easy,” Mr Spiegel quoted Mr Gordon as saying. “We are positive because life can be hard.”

Life at Snap, Snapchat’s parent company, has indeed been hard in 2018 — and not everyone has been following the no-complaining rule.

After a botched redesign contributed to its first quarter-on-quarter drop in daily active users, the loss of many key members of its executive team and relentless competition from Facebook and Instagram, Snap has seen its shares lose two-thirds of their value. The stock is down from February’s peak of $21 to below $7 ahead of its third-quarter earnings on Thursday.

Its market capitalisation now stands below the $10bn at which it was valued as a private company almost four years ago, when it raised nearly $500m in a funding round that closed in late-2014.

“While it is obvious that Snap wasn’t prepared for life as a public company, it now has a more pressing problem. It is quickly running out of money,” said Michael Nathanson of research house Moffett Nathanson, with cash and marketable securities at the end of June standing at $1.5bn and free cash outflows running at the rate of $250m a quarter. “The clock is certainly ticking for Snap to turn its business around.”

Mr Spiegel, who co-founded Snapchat in 2011, seemed to recognise that he faces challenges when he sent his lengthy email to his 3,000 or so staffers last month, which was soon leaked to Cheddar, the financial news network.

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F Sharon Donnery is facing criticism from MEPs from southern Europe who fear the Irish central banker would be too tough on the region’s banks © Reuters

Frontrunner for EU bank watchdog job faces parliament grilling Mario Draghi’s preferred choice is facing two contenders in race for coveted post CLAIRE JONES AND JIM BRUNSDEN

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ario Draghi’s preferred candidate to head the eurozone’s banking supervisor will this week try to win over EU lawmakers and overcome an important hurdle in the race for one of the bloc’s most coveted jobs.

Sharon Donnery, Ireland’s central bank deputy, and two other contenders will on Tuesday be grilled by MEPs as part of a process to choose the successor to Danièle Nouy as chief of the Single Supervisory Mechanism when her five year term ends in December.

The competition will not just determine who will preside over the ECB’s banking watchdog and the health of the eurozone’s largest lenders. It will also weigh upon a string of forthcoming EU appointments in the next 12 months that will culminate with the appointment of Mr Draghi’s

successor in October 2019.

While the ECB has no official position, Ms Donnery is seen as a favourite after receiving Mr Draghi’s private backing. But two other contenders have emerged: Robert Ophèle, chair of the Autorité des Marchés Financiers, France’s markets regulator, and Andrea Enria, head of the European Banking Authority.

“It will be a close call,” an EU diplomat said.

After the hearings, the MEPs sitting on the Committee on Economic and Monetary Affairs will issue their recommendations to the ECB’s 25-member governing council, who in turn will hold a secret ballot in early November.

Typically, ECB insiders are reluctant to go against the opinion of the EU parliament, which has the right to veto the ECB’s nominee. The appointment is expected to be finalised in early December.

Ms Donnery should win the EU parliament’s support “if she performs well at the hearing”, an EU official said.

In addition to Mr Draghi’s support, she has the backing of Berlin, which is keen for another woman to replace Ms Nouy, diplomats said.

But she is facing criticism from MEPs from southern Europe who fear the Irish central banker would be too tough on the region’s banks. Ms Donnery has pushed hard with Ms Nouy to force banks to rid their balance sheets of non-performing loans. The so-called NPL problem is particularly acute in member states with weaker banking systems, such as Italy. Other critics argue that Mr Ophèle and Mr Enria have both headed their respective organisations, while Ms Donnery is relatively untested.

“She has touched the hottest of hot potatoes and this is what is causing the problems with parliament,” said one supporter of Ms Donnery.

Italian bond cools as Rome takes defiant budget stance Investors await response to EU after Moody’s leaves rating above ‘junk’ KATE ALLEN AND MILES JOHNSON

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taly’s deputy prime minister Luigi Di Maio has insisted that the government has no plans to change its budget blueprint in remarks that took some of the steam out of a rally in the country’s bond market.

The populist government in Rome is on a collision course with Brussels over its budget plan, which was rebuked last week by the European Commission for breaking eurozone spending rules.

Italy faces a deadline to respond to the EU reprimand by midday on Monday, and the coalition has shown no sign of backing down.

In recent days there has been some speculation in the Italian media that the populist coalition could cut back the budget deficit in order to placate Brussels. But Mr Di Maio told an Italian radio station on Monday morning that the government

had no plans to change its budget.

“On behalf of the government I deny that we have thought of reducing the deficit, which stays at 2.4 per cent [of GDP]. If we were to reduce it we would not have the [pension] reform [or] the citizenship income,” he said.

Mr Di Maio, leader of the Five Star Movement, said that the government wanted to engage with the commission over its budget plans, and that it had no intention of leaving the single currency.

After his remarks, yields on Italian debt — which had fallen sharply in early trading after a rating agency cut the country’s credit rating but left it in investment grade territory — began to rebound.

The yield on 10-year Italian debt fell as much as 27.9 basis points to 3.307 per cent in early trade. The fall eased to 12.4 bps after Mr Di Maio’s remarks. Yields fall when prices rise.

The move initially took the

spread over the equivalent German Bund, a widely watched indicator of eurozone political pressure, below the 300 bps level to 282 bps, before rising again to 300 bps.

Matteo Salvini, head of the League, the other populist party in the coalition, has cited 400 bps as a threshold that the government could not tolerate. The spread had been at 312 bps at the end of last week, having hit a high of 338 bps earlier on Friday.

Moody’s reduced Italy’s rating by one notch to a level above speculative status, or “junk”, after trading hours on Friday. The agency also restored its outlook to stable, from negative.

Some investors had feared that Moody’s could cut Italy’s rating by more than one notch, or leave its outlook as negative — a signal that the eurozone’s third-largest economy was on track to slip into junk status.

Cardio Vascular Diseases responsible for 17.5m deaths per year - study

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ccording to statistics by World Health Organization (WHO), made available by the World Heart Foundation (WHF), Cardio Vascular Diseases (CVD) such as heart attacks and stroke are responsible for 17.5m deaths per year. Research also states that these diseases amount to about 31% in all deaths across the globe. According to the study, over 75% of CVD deaths occur in low-income and middle-income countries, while 85% of all CVD deaths are due to heart attacks and strokes.

To highlight the importance of the heart, the WHO and the WHF in 1999 announced the 29th of September as

the annual celebration of the World Heart Day. The 2018 theme ‘My Heart, Your Heart’ is set at asking people across the globe to make a promise to make healthier choices and lifestyle decisions. ...”a promise to cook and eat more healthy, a promise to do more exercises and encourage your children to be more active, a promise to say no to smoking and help your loved ones quit, a promise as an healthcare professional to save more lives, and most of all, a simple promise for your heart, for my heart and for all our hearts”.

Jesse Oguntimehin, strategic partnership manager at Tecno Mobile

said, Tecno Foundation agrees with the World Heart Foundation on some possible tips that can help lower exposure to issues related to the heart, if well adhered to on the individual level.

According to Oguntimehin, the WHO listed 8 tips to help get the heart in good shape that includes: “Engage in hobbies and activities; Eat foods low in saturated fats and cholesterol; Reduce salt intake; Reduce alcohol and cigarette intake; Manage stress; Look after your mental health; Eat a variety of nutritious food; and Manage your blood pressure,” said Oguntimehin urging Nigerians to take steps towards improving their heart health.

or months the diplomatic duel between Seoul and Washington was played out behind closed doors as the two longstanding allies quietly diverged over the crucial next steps for dealing with North Korea.

Then the delicate manoeuvring came crashing into public view when US president Donald Trump shot down a tentative suggestion

by South Korea to lift sanctions on the reclusive regime with a stinging rebuke: “They do nothing without our approval.”

For South Koreans, it was a painful reminder of the country’s historic reliance on US support. But it also served as a salutary notice that the two democratic nations need quickly to reach a consensus on how to proceed with Pyongyang or risk undermining their 70-year-old alliance.

“On the issue of North Korean denuclearisation, the three key countries have different ideas on what to do next and that is creating a crack in the alliance between South Korea and the US,” said Kim Yeol-soo, a policy adviser at Seoul’s presidential Blue House.

The root of the issue stems from the landmark Singapore summit between Mr Trump and North Korean leader Kim Jong Un in June when the then-bitter adversaries agreed to reset relations and work towards the denuclearisation of the Korean peninsula.

From the perspective of Pyongyang, a reset in relations should entail the lifting of exacting international sanctions, a point that state media has raised repeatedly in recent weeks.

For Seoul, the Singapore summit was the starting pistol shot to begin economic integration with the North, fulfilling President Moon Jae-in’s broader ambition to use engagement to foster peace on the tension-prone peninsula.

The US, meanwhile, is attempting to maintain stringent sanctions on the North Korea regime in the hope that economic isolation will force it to abandon its arsenal of nuclear devices.

This divergence in methods has already sparked some tension between the allies and analysts fear more is the come. In August, the US-led United Nations Command blocked early attempts by Seoul to develop road and rail links with North Korea, a move that irked South Korean diplomats.

Then this month the US Treasury Department warned a host of South Korean banks against doing business with the North after the lenders began rolling out unification-themed financial products.

“We are, of course, cognisant of the priority that President Moon and his administration have placed on improving South-North relations. I believe this inter-Korean dialogue must remain linked to denuclearisation, and South Korea sync’d with the United States,” Harry Harris, US ambassador to Seoul, said on Wednesday.

Other senior figures are known to be less diplomatic about Mr Moon’s engagement with Pyongyang. They view economic integration as tantamount to rewarding Mr Kim, a dictator who has yet to make any concrete moves toward denuclearisation.

BUSINESS DAY

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NEWS YOU CAN TRUST I TUESDAY 23 OCTOBER 2018

INSIGHT/INNOVATION PROPHYLAXIS

AYULI JEMIDE Ayuli Jemide is Founder and Lead Partner of Detail Commercial Solicitors. An entrepreneur, public speaker and writer.

Email: AJ@ayulijemide.org Twitter: @JemideAyuli

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will like you to pause for a moment to think about any great Nigerian leader either in the private and public sector. I am certain that at the end of this exercise you will find that majority of such leaders are people who were reared in strong institutions like: the military, the civil service, multinational companies (Shell and the likes), top tier Nigerian companies in banking, manufacturing, professional services industry and other sectors. Not to forget, the organized trade unions, NGO’s and faith-based institutions.

How do great institutions breed phenomenal leaders?

Firstly, because institutions have a high number of employees and sometimes operate in different locations. There must be strong systems and processes inplacetohandlethesettasksseamlessly.Everygood leader is bred in a rule-based environment where there is a discipline to ask the first basic question

Of institutions and the leadership challenge which is - what is the laid down process? This is the back bone of every good decision!

Second, every leader-in-the-making needs to have opportunities to actually lead people with all their nuances and bents – the good, the bad, the ugly. Institutional environments have the requisite number of workers that gives an employee the opportunity to lead teams of 5, 10, 50 and more as you grow in the rank and file. Many ‘’leaders’’ in authority today are ‘’shepherds’’ who have never had a herd and that is why their emotional intelligence and people skills are so deficient. That is why they cannot delegate or trust people.

Third, great institutions teach people about cultureandvalues.Employeeslearnthattheenvironment has certain ideals and ethos that govern their very existence and their interactions. The problem with many so called ‘’leaders’’ is that no one can really say what their values are. Any leader who does not stand for anything cannot ‘’infect’’ people with anything and is only inches away from institutional failure.

Fourth, if you come across anyone who exhibits the methodology for taking informed decisions and problem solving you can guess that they have some institutional breeding. Institutions teach you the culture of having meetings, harnessing views, distilling opinions, building consensus and communicating decisions. Poor decision-making can cost unquantifiable losses. This plays out with leaders who come into authority without having taken major decisions in their previous life.

Fifth, they say experience is the best teacher and people learn from experience. In my view, this means that good leaders are people who have tried things and succeeded or failed. Institutions are great places to learn from your bad and good decisions.

Therefore, you wonder when a leader has a “stick-toit-tive-ness’’ about a road that seems to have thorns.

If he has been there before he knows the areas that are quicksand and he will also know the treasure

…institutions are the true custodians of the fabric of society and the greatest influencers from generation to generation.

So, we must keep existing institutions and grow new ones. I believe that leadership is not learned in business schools but learned in live environments that create the right level of challenges on a continuous basis ahead. Perception and good judgement are invaluable products of cognate experience.

The sixth thing that institutions help you build is the ability to see how strategy comes alive and how things move from pen to paper to market and to rewards that follow. Many people in authority have not been through this mill of being able to visualize, conceptualize and then implement. So, if a person in authority does not innately have this skill and he has not learnt it, they are stuck in the middle of a desert.

PeoplewhohavebeeninvolvedinstartupsinNigeria that grew into strong institutions are perhaps one of the greatest human assets Nigeria has today.

The seventh and perhaps one of the most important things that institutions bring to leaders is a merit-based environment. An environment where people expect that if they work hard they should reasonably expect fair rewards. Leaders who have jettisoned meritocracy have been responsible for ruining many of our institutions in Nigeria. I am sure you can relate with this.

To buttress the above, I would like you to think of the stories you have heard or books you have read about Nigeria in the early 60’s.We heard that in those

dayswehadstronginstitutionsandassoonaspeople obtained their school certificate you surely got a good job either in a private institution like United African Company (UAC) or Shell or public institutions like the military or the vibrant civil service at the time.

Majority of people in that generation went through that route and the result is that majority of them have strong leadership skills and a certain discipline that stays with them for life.

My conclusions are that institutions are the true custodians of the fabric of society and the greatest influencers from generation to generation. So, we must keep existing institutions and grow new ones.

I believe that leadership is not learned in business schools but learned in live environments that create the right level of challenges on a continuous basis.

I believe that even the self-grown leaders who did not pass through the institutional mill have grown via projects that institutions have exposed them to.

For example, those who are contractors to Chevron, Mobil or the likes have learnt a lot about processes and procedures in their routine engagements with these institutions.

William Clay Ford Jr (great grandson of Henry Ford) is the Executive Chairman of Ford Motors.

When he took over the helm in 2001 he was noted for valuing people and tradition unlike the ousted CEO Jacques Nasser who focused on maximizing profits and shareholder value. William Ford typifies great institutions. Institutions are people builders and a microcosm of the collective values and aspirations of any great country. If a William Clay Ford Jr became a President, his institutional attitude would not change because he has spent years building great leaders within a great institution.

If I may ask some pertinent related questions: Are institutions failing in Nigeria? Is there a correlation between the failure of our institutions and our leadership challenge? Shouldn’t we urgently seek to rebuild our institutions? If so, where do we start and who takes responsibility?

ERGP: What role for religious bodies?

UCHE UWALEKE Uche Uwaleke is a Professor of Capital Market and the Chair of Banking and Finance Department at the Nasarawa State University Keffi

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he Economic Recovery and Growth Plan (ERGP) represents the federal government’s blueprint to position the economy on a path of sustainable growth. By 2020, it is hoped, Nigeria will have become a well diversified economy with its multiplier benefits of more jobs and improved standard of living for the ordinary Nigerian. It goes without saying, that the successful implementation of the ERGP requires effective stakeholder participation. Sadly, more often than not the discourse on economic recovery in Nigeria chiefly revolves around what the government has to offer. As the country meanders through a tortuous recovery path, what role can religious institutions such as churches and mosques play in fast-tracking the implementation of the ERGP? Indeed, the role of religious bodies in fostering sustainable inclusive growth has since been recognized. Speaking in Bolivia sometime ago, the Roman Catholic Pontiff urged people in authority, including religious leaders, to put the economy at the service of the people. In the words of Pope Francis, ‘’Human beings and nature must not be at the service of money. Let us say no to an economy of exclusion and inequality, where money rules, rather than service. That economy kills.

That economy excludes. That economy destroys Mother Earth.” Pope Francis’ charge speaks to the need for churches and mosques to be concerned

about the material welfare of their members much as they care for their spiritual needs.

Over the years, religious institutions have proved to be major partners with government in the delivery of health care and other social services including the fight against diseases such as HIV/AIDS. These institutions are equally visible in the provision of education with many faithbased private universities helping to transform the educational landscape of Nigeria. In view of the on-going efforts at revamping the Nigerian economy through the ERGP, religious bodies need to step up involvement in economic activities in support of speedy economic recovery.

It is a fact that given the strong presence of churches and mosques in virtually all parts of the country, religious institutions possess a good knowledge of local communities and their social needs. This provides an opportunity to enter into strategic partnership with the government in helping to deliver welfare programmes that target the poor. One of the cardinal objectives of the ERGP is ‘’investing in our people’’ including through the provision of quality education. The government can partner with religious bodies to rebuild the public school system with emphasis on technical/vocational education. Churches and Mosques can organize training programmes for people who are interested in learning a trade or to equip members of the youth organization

It is a fact that given the strong presence of churches and mosques in virtually all parts of the country, religious institutions possess a good knowledge of local communities and their social needs. This provides an opportunity to enter into strategic partnership with the government in helping to deliver welfare programmes that target the poor

with computer skills. Relatively affluent ones can come up with a self-reliance initiative that assists members to find a job, start a business, or get the education they need to do any of these.

The government should take advantage of the respected position that religious institutions occupy in the society to actively involve them in the design and implementation of programmes that facilitate job creation and poverty reduction.

For example, in the area of education and social inclusion, some of the strategies enunciated in the ERGP include ‘’to establish best-in-class vocational and technical institutes, prioritize education for girls, implement and increase social safety net programmes targeted at the vulnerable as well as introduce social programmes for the aged and physically challenged’’ Religious institutions, given their reach and influence in the society, are best suited as partners in the execution of these strategies.

A major priority of the ERGP is the achievement of self sufficiency in food production. Nothing prevents religious institutions from registering special purpose vehicles with a view to undertaking large-scale farming involving crop production, livestock and fishery that will provide jobs for the teeming youth. The State Governors can assist by making land available for farming. Big churches and mosques can pool resources together in partnership to establish agri-businesses, housing projects, shopping malls, hotels, printing press, transport services and a whole lot of other business ventures at affordable prices to customers.

They can actually leverage on crowd-funding opportunities provided by their numerical strength.

The population of Christians and Moslems in Nigeria represent a significant market for goods and services produced by faith-based business enterprises. Big churches and Mosques that have idle structures and huge open spaces should be encouraged to convert them to productive use.

Religious institutions can equally champion the campaign for Nigerians to embrace locally made products especially with respect to basic items such as school uniforms, textiles, footwear and food. This will not only reduce importation but also increase foreign exchange earning while also supporting development of local industries.

Doing so will be in furtherance of the ERGP goal of driving industrialization through Small and

Medium Enterprises.

In the light of their proven track record of delivering basic social services, religious bodies have a critical role to play in sustainable development. When such developments take place in low-income areas, they increase property values, attract new residents and become magnets for diverse businesses. In fact, studies have shown that faith-based business enterprises help rebuild a community’s social infrastructure. In pursuit of this however, a major challenge that religious institutions face in undertaking socio-economic projects is access to funding. Many depend on donations, tithes and offerings and most often these are not enough to cover their operational and capital budget. This is the more reason for churches and mosques to work together and pool their limited resources in undertaking major socio-economic projects. Special purpose vehicles set up by religious institutions can leverage the religious bodies’ reputation to access funds from Development finance institutions such as the Bank of Agriculture and the Bank of Industry or even take advantage of the numerous intervention schemes introduced by the Central Bank of Nigeria to channel funds to the real sector.

Religious bodies in Nigeria must not relent in advocating for a job-oriented economic growth and should continue to call on government to allocate more resources to projects that facilitate an enabling environment for job creation and poverty reduction. Periodically, they should issue statements on the state of the economy, the national budget and allocation of national resources to create awareness about the high level of poverty and social exclusion in the country. Umbrella bodies such as the Christian Association of Nigeria and the Nigerian Supreme Council for Islamic Affairs should provide leadership in this direction and actively engage government in addressing the socioeconomic challenges facing Nigeria including the seemingly intractable farmers/herdsmen clashes which pose a serious threat to the realization of the ERGP targets in agriculture.

All said, churches and mosques should not only be concerned about the spiritual needs of their members but also their material welfare.

Therefore, like never before, they should rise to the occasion and partner the government in the implementation of the ERGP.

Published by BusinessDAY Media Ltd., The Brook, 6 Point Road, GRA, Apapa, Lagos. Ghana Office: Business Day Ghana Ltd; ABC Junction, near Guinness Ghana Limited, Achimota – Accra, Ghana.

Tel: +233243226596: email: mail@businessdayonline.com Advert Hotline: 08034743892. Subscriptions 01-2950687, 07045792677. Newsroom: 08169609331 Editor: Anthony Osae-Brown. All correspondence to BusinessDAY Media Ltd., Box 1002, Festac Lagos. ISSN 1595 - 8590.

Trustees are the gate watchers in business transactions Page 6

How Nigeria can escape the naturalresource curse

Elections won’t slow down ERGP Implementation – Udoma

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‘Solving infrastructure problem will spur Nigeria’s economic growth’ ENDURANCE OKAFOR

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R-L: Udo Udoma, minister Budget and Planning; Vice President Yemi Osinbajo, and Asue Ighodalo, chairman, NESG, at the opening ceremony of the 24th Nigerian Economic Summit in Abuja yesterday.

Pic by Tunde Adeniyi

Nigeria has no reason for economic failure, says Lewis P

ONYINYE NWACHUKWU & HARRISON EDEH

eter Lewis, a Professor at John Hopkins University, on Monday, blamed Nigerian leaders,past and present, for not leveraging on available huge opportunities to lift the country out of its persistent economic stagnation.

Lewis said that a country blessed with so much resources should prioritise policies and economic decisions that would have placed the country ahead of its peers like Indonesia.

The renowned professor, who has been following Nigeria’s developmental progress since the first Nigerian Economic Summit

in 1993, said Nigeria has no reason for its present failure as countries like China, Indonesia, Chile, etc which had similar problems with Nigeria some 30-40 years ago, have all made remarkable progress and overtaken her.

The renowned professor said despite similarities shared by both Indonesia and Nigeria in several spheres, Indonesia had gone ahead of Nigeria with greater focus on macro-economic stability, but Nigeria, he noted, has focused on the politics of distribution of its accrued oil resources.

Lewis described Nigeria as a “stuck” economy bedeviled by resource dependence, volatility and poverty,” but wants the country to

breakout to high growth, competitiveness and shared prosperity. ”Nigeria and Indonesia shared several similarities. They are both populous countries in their respective sub-region. They are both religiously diverse countries. They both have oil and Gas in terms of rich economic resources. They are both challenged by issues of colonial rule. They were both in military rule for more than 30 years”, Lewis who is an author and a director, Africa & Middle East Programme, John Hopkins University, USA, stated in his presentation titled, ‘Growing Apart: Politics and Economic Change in Indonesia and Nigeria’.

“Through in the 1990s, Indonesia grew at about 7 percent consis-

tently. They developed a diversified export economy and a diversified growth in Oil and Gas. Indonesia also reduced poverty from more than 70 percent to about 15 percent within same period,” he said.

Nigeria, on the contrary, has found it difficult to move its economy beyond the oil resources which has also seen it prone to all manner of shocks in the international oil market.

He added that Indonesia’s ability to manage its population explosion has put it on a better footing to advance its economic growth and development.

“Demography also matters; Indonesia was able to address the demographic growth from about 2.7 Continues on page 4

roviding steady and table electricity, construction of roads that will enable easy movement of goods across the country and ease of capital transaction, among others, are the things Nigeria needs to work on to increase growth as a country that is the largest in Africa, an expert has pointed out.

This was suggested by Peter Lewis, Director, Africa & Middle East Programme, John Hopkins University, in his keynote address at the ongoing 24th Nigeria Economic Summit (NESG).

“On what needs to be done to move Nigeria economy forward, I will suggest electricity, it needs to be liberalized; look at what has happened in the telecommunication industry. Power is not the only thing, roads also need to be constructed, particularly rural roads that can link the rural areas to the cities for easy movement of goods,” Lewis cited.

Meanwhile, the most recent Gross Domestic Product (GDP) report by the National Bureau of Statistics (NBS) shows that Nigeria economic growth rate for the second quarter of this year recorded a decline in performance from 1.95 per cent in the first quarter to 1.5 per cent.

The bureau, in the report, said the second quarter growth rate was constrained by contractions in oil GDP. It said oil GDP contracted by -3.95 per cent in the second quarter, as against 14.77 percent in the first quarter of the year under review and 3.53 per cent in the second quarter of 2017.

BusinessDay analysis of the GDP reports showed that it was the first time since Nigeria’s exit from recession, that the economic growth was driven by the non-oil sector, which grew by 2.05 per cent, representing the strongest growth in non-oil GDP since the fourth quarter of 2015 Lewis, however, concluded by talking about how ease of capital transaction in Nigeria could also serve as a catalyst to the country’s economic growth.

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NES #24 WEF competitiveness report highlights improvement in Nigeria’s enabling business environment

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igeria has been ranked as 115th out of 140 countries assessed in the 2018 Global Competitiveness Report (GCR) of the World Economic Forum. The report, which was released on October 17th 2018, shows improved performance across key enabling business environment indicators, and suggests an overall improvement in the country’s competitiveness.

The GCR of the World Economic Forum is an annual ranking which compares the national competitiveness environment of 140 countries based on 12 pillars - four grouped under basic requirements, six under efficiency enhancers and two under innovation and sophistication factors. The index is supplemented by an executive opinion survey of the local business community and organised private sector.

Beyond the rankings, the GCR offers comparative insights based on the competitive business conditions as reported by the organised

private sector in surveyed countries. The following are a few insights we can learn from the 2018 report about Nigeria’s improving competitiveness: •Nigeria improved in the area of “Enabling Environment”. The country improved in 3 out of 4 pillars classified as “Enabling Environment” pillars – i.e., Institutions, Infrastructure, ICT adoption and macrostability pillars. This recog-

nizes the enabling business environment reforms of the Federal Government in making Nigeria an easier place to do business in.

•Nigeria is ranked top 100 in terms of “Business Dynamism”. The Report further acknowledges the positive perception of the private sector for the government’s Doing Business reforms, by scoring improvements in the time and cost of starting a business in the country.

Nigeria has no reason for economic failure, says Lewis Continued from page 1

percent to about 1 percent per annum. This singular action allows for proper planning and forecasts of economic growths and developments,” he said. He noted that as a result of accelerated economic reforms, Indonesia’s GDP per capital is double that of Nigeria.

“The key factor of Indonesian’s poverty reduction is hinged on the diversification of its economy away from the oil and gas resources. The key to Indonesian’s poverty reduction has been on diversification of the economy”, Lewis maintained.

He added further that if people are going to make more in-roads in manufacturing and agricultural sector, the economy would be better for it.

Indonesia, he said has diversified its exports, and manufacturing, even as he pointed out that the country is no longer a petroleum economy.

“It is a diversified economy beyond petroleum. It is currently resting on three legs which include: exports, manufacturing, agriculture-both on domestic consumption and exports, and natural resources. This form of strategy

by Indonesia should be the

future of Nigeria,” he advised.

Speaking further on what made the difference for Indonesia, he said, “the policy framework is remarkably what made the difference for more than three decades comprising economic stability and competitiveness.”

While Nigeria frequently emphasises the politics of distribution, Indonesia is more concerned with shared prosperity. This singular factor will tell you it is about the country, not the region.

“Focusing on growth enhancing changes while shutting out political interference is key in advancing economic growth and development of every nation,” Lewis observed, noting, “modest changes in governance and institution can produce significant growth effect.”

“We must avoid the fallacy that all government challenges must be resolved before we attract huge investments; we don’t have to get it right at once. we must focus on strategic changes that would move us forward as we fight corruption and strengthen our intuitions,” he added.

Continuing, he said, “Indonesia and China did not necessarily eradicate corruption before they made inroads into business transactions

and activities. Their focus is on policy assurances to potential investors, while they strengthen their institution.”

He further noted that strengthening weak government institutions was very vital, and that linking up various ministries for various developmental strides and shared economic prosperity would immensely help.

“Look at what the Nigerian Communications Commission has done in revolutionalising the telecoms sector and impact on the economy. One agency and few people could make the whole difference,” he said.

He remarked further that the federal government must be ready to address concerns of electricity, logistics and access to capital, adding that government must be keen on easing capital transactions to allow flow in the economy.

His five strategic choices for Nigeria include setting up of an effective economic team; strengthening peak economic institutions, alliance with urban entrepreneurs and rural producers, breaking through critical bottlenecks in infrastructure, notably electricity, as well as ensuring more predictable environment for transactions.

•Nigeria’s inflation rate has steadily declined to near single-digits since 2017. Although the report records Nigeria’s annual inflation rate at 16% in 2017, it is important to note that inflation has progressively declined in 2018 to a current rate of 11.28% y/y as at September (according to the National Bureau of Statistics).

•Nigeria’s competitive environment is one of the most entrepreneurial in the

world. The feedback from the private sector as surveyed by the World Economic Forum (WEF) ranks the “attitude of Nigerians for taking entrepreneurial risk” as the 13th in world among the likes of Israel and the USA, which are currently in first and second positions respectively. This aligns with the broader private sector-led growth model of the Federal Government stemming from the Economic Recovery and Growth Plan (ERGP) launched in April 2017, which prioritises “Investing in our people” and empowering them through various enterprise development initiatives and interventions.

•Overall, Nigeria’s market size remains an increasing source of competitive advantage in the global economy. The report ranks the Nigerian market as 24th largest in the world. According to the National Investment Promotion Commission (NIPC), between 2017 and the first half of 2018, about 154 investment projects have been announced across the

Tuesday 23 October 2018

country with an estimated value of about $112 billion.

Commenting on the report, Dr. Jumoke Oduwole, Senior Special Assistant to the President on Industry, Trade & Investment and Secretary of the Presidential Enabling Business Environment Council (PEBEC), stated that “the global competitiveness report is a validation of the systematic work of PEBEC over the past 24 months – a work of collaboration across many levels of government to progressively and sustainably make Nigeria an easier place in which to do business.”

The GCR 2018 is one of several globally accepted reports that have acknowledged the improvements in the Nigerian business environment.

Recently, The World Bank also released the 2018 Subnational Doing Business Report for Nigeria, which recognised significant strides, with 29 states implementing 43 reforms over the past four years and moving country closer to the global good practice frontier. The World Bank described this as showing “how seriously the current administration is taking this goal” of improving the business environment.

This further validates the commitment and efforts of the current administration towards making the country a progressively easier place in which to do business

Nigeria issues first gold refining licence, as FG, states partner on implementation of ERGP KEHINDE AKINTOLA, Abuja

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ederalGovernmenthas recorded a landmark achievement with the issuance of first gold refining licence through the implementation of the Focus Lab as encapsulated in the Economic Recovery Growth Plan (ERGP).

Udoma Udo Udoma, Minister of Budget and National Planning disclosed this at the opening of the 24th Nigerian Economic Summit with the theme: ‘Poverty to Prosperity: Making Governance & Institutions Work,’ holding in Abuja.

He explained that the Focus Labs were conducted in three broad streams, namely: Agriculture and Transportation; Manufacturing and Processing as well as Power and Gas, with the view at addressing the bureaucratic issues.

He added that the present administration was able to facilitate the issuance of approvals required to establish a multimillion dollar petrochemical company that will create over 20,000 direct and indirect jobs for the citizenry.

“The Labs were conducted in three work streams, namely Agriculture and Transpor-

tation; Manufacturing and Processing; and Power and Gas. We have set up an ERGP Delivery Unit in our Ministry staffed by four Senior Special Assistants to the President.

The Unit is working closely with the Ministerial Delivery units set up in each of the six Ministries to deliver on the Lab targets. There is also a Central Steering Committee whose task is to promptly resolve high level issues that may arise from this process.

“As part of the Lab process we were able to assist Brass Fertilizer and Petrochemical Development Company in obtaining expedited issuance of various approvals that were required by its financiers from multiple government agencies. Brass Fertilizer is a very large, multi-billion-dollar petrochemical plant positioned to be one of the largest consumers of gas in the country within the next 5 years.

If this project succeeds it could create up to 20,000 direct and indirect jobs.

“As an outcome of the ERGP Focus Labs we have also been able to accelerate the development of a National Gold Development Policy and the establishment of a Federal

Gold Reserve Scheme in Nigeria. Today,I am happy to report that the first gold refining license has been issued to a company called Kian Smith Limited, which was one of the companies that participated in the Labs.

Indeed, the Federal Government is finalizing modalities to purchase gold from local refineries via a Federal Gold Reserve Scheme subject to international standards such as the London Bullion Market Association.

“This accelerated development of the National Gold Development Policy by the Ministry of Mines and Steel Development, and the progress recorded in implementing the Federal Gold Reserve Scheme by the Central Bank of Nigeria, are direct solutions to issues presented by investors at the ERGP Focus Labs,” Udoma said.

The Minister also reiterated President Muhammadu Buhari’s administration towards working closely with businesses to deepen their investments in the agriculture, power, manufacturing, solid minerals and services sectors and support the private sector to become the engine of national growth and development.

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NES #24

Participants at the opening ceremony of the 24th Nigerian Economic Summit with the theme, Poverty to Prosperity: Making Government and Institution Work held at Transcorp Hilton, Abuja.

Picture by TUNDE ADENIYI.

L-R: Christos Giannopoulos, MD/CEO PZ Cussons Nigeria Plc, MD/CEO, PZ Cussons Nigeria Limited with Ogunsanya Olusegun, MD, Airtel Network Limited.

L-R: Yinusa Mohammed, DN Tres and Rubber Plc with Ufot Udeme, CEO, SO & U.

L-R: Binta Max Gbinije, CEO, Stanbic IBTC Trustee; Chris Ngige,minister of Labour and Productivity; Udoh Udoma, minister of Budget and Planning and Yemi Osinbajo, Vice President.

L-R: Yemi Osinbajo, Vice President with Ngarie Woods, dean of Blavatnik School of Government University of Oxford,

L-R: Olowu Uche, CIBN, with Mansur Ahmed, Executive Director, Dangote Industries Limited.

L-R: Jaiyeola Olaoye, CEO, NESG; Ibunkun Awosika, chairman First Bank Plc, and Urem Eke, MD/CEO, First Bank Holdings.

L-R: Ahanmisi Ifidon, Shell Nigeria with Ummi Umaru, Shell Nigeria.

L-R: Nike Akande, Group Chairman, Emerging Africa Capital Group; Urem Eke, MD/CEO First Bank of Nigeria Holdings Plc and Ibunkun Awosika, chairman, First Bank of Nigeria Plc

L-R: Niyi Idowu, GM External Affairs with ED/CEO Exxon Mobil

L-R: Peter Lewis, Johns Hopkins University, School of Advance International Studies with Pascal Dozie, Chairman, MTN Nigeria.

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NES #24

Trustees are gate watchers in business transactions STL Trustees is a leader in the corporate trust sphere in Nigeria. In this Interview, Funmi Ekundayo the Company’s MD/CEO provides valuable insight on the contributions of corporate trustees to the nation’s economy. Excerpt.

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he theme of this year’s Nigerian Economic Summit (NES) is ‘Poverty to Prosperity: Making Governance & Institutions Work. Talking about corporate trustees, how do they support the economy? How do they help institutions work?

Thank you. Trustees play critical roles in the nation’s economy.

What every investor requires is peace of mind. Anyone that is parting with value - whether you are a bank that wants to lend to a corporate entity for any reason whatsoever – wants to be sure that the money will be repaid with interest and as agreed. So, I would say that we are the gate watchers. We protect investors. We create comfort to all parties on a commercial transaction.

Most credit transactions with banks are not complete without a trustee because the trustee provides the requisite comfort to both the bank which is lending the money and the borrower that the terms of their agreement will be fully complied with. And who monitors the terms? It is the trustee. So with that, a financial provider in a transaction feels secured with the fact that a trustee will monitor all the obligations and ensure that all the terms of the obligations are complied with from the beginning to the end of the transaction and everybody is happy. So it is a winwin situation. And what makes an economy grow? Trade; ability to invest; and conducive environment. So if you want to look at it from that perspective, trustees help to facilitate that.

So coming to bond trusteeship which is also a very significant part of the role we play as a trustee. Nigeria is a frontier economy, which means that we still have a lot of infrastructural gap. Whether you look at it from the federal or state government perspective, there is a wide deficit gap to be filled. Now, what do most states do? They come into the capital market to raise capital. We call it debt capital or the bond. For them to raise those bonds, investors will have to part with their own money so that the states can have instant cash to carry out long-term infrastructural projects. When they carry out those projects, the country is better for it. The populace are happy. Even, the states can also increase their internally generated revenue (IGR) through that process. However, don’t forget that some people have parted with their own capital ab

Funmi Ekundayo initio and these people need to be paid back. So all of the interest of the investors is put in one person and that is the trustee. The trustee ensures that the mode of repayment is secured. For states mostly, they have their FACTS. A lot of the securities for the repayment of the investors come from states sinking funds. Irrevocable Standing Payment Order (ISPO) is put in place after necessary checks have been run by the ministry of finance and the debt management office to ensure that that the state does not go above the threshold that is regulatorily provided for. Once we go through all those processes, the trustee is the receiver of the sinking fund that will be used to repay both the principal and the interest payments to all the investors from the beginning of the transaction up unto maturity. So again, you can see the roles that trustee are playing in national development.

What is your assessment of the Nigerian Corporate Trust industry as a whole?

Trustee industry in Nigeria is evolving fast. Government and business owners are beginning to understand the role of trustees and how cardinal the involvement and participation of Trustees is in structuring and managing debt capital and Bank credit transactions. Comparatively, corporate trustees in Nigeria have come a long way from the previous situation where corporate trustees used to be regarded as fringe players in transactions to playing a more central role in transactions. This however does not apply to private trusts where the awareness of the importance of trustees is still at rudimentary stages even amongst more sophisticated individuals.

However, efforts are being made at industry level to continue to increase the awareness of the importance of the role of corporate trustees in the country.

What are the roles of corporate trustees in modern wealth and asset management?

Trustees help people to plan the

future of their generations because when you have a trust in place you will be able to easily and seamlessly transfer wealth from one generation to another. And then the issue of having family friction, bickering here and there is significantly reduced.

If you have a trustee, you would have given a very clear instruction on how your estate should be managed or transferred. It is a wealth transfer process that helps to avoid your assets going into the wrong hands or mismanaged or misused.

You can even create a living trust for yourself which begins to run while you are around.

Our society is replete with stories of families fighting over properties. That is why people shouldn’t allow their estates to go through such mess. When siblings who ordinarily should be united now become sworn enemies because of family properties, then it is a mess.

But once you have a trustee, you can go to sleep and be rest assured that your estate will be fine and everything will be implemented in line with your instructions.

STL Trustees emerged as the “Non-Interest Trustees of the Year 2017” during the 3rd African International Conference on Islamic Finance organized by The Metropolitan Skills Limited in conjunction with the Islamic Finance Council and the Islamic Finance Institute of Southern Africa. What factors do you think helped you to achieve this recognition?

At STL Trustees our core values are integrity, professionalism, commitment and innovation and these values ensure that in dealing with clients, whether individual or corporate, we strive to always deliver trust solutions that are guaranteed to meet their needs on a continuously satisfactory basis.

Also, because we operate in an industry that is extremely dynamic, we train and retrain ourselves towards ensuring that we continuously deliver quality and innovative services with the required speed to excite our clients.

STL Trustees is a Delegate Trustee to the first Sukuk Issuance in Nigeria, the State of Osun Sukuk Al-Ijara which was issued by the government of the State of Osun to finance the construction of modern elementary, middle and High schools in the State. We are also a Delegate Trustee to the first sovereign Sukuk to be issued in Nigeria, the N100B FGN Road Sukuk 1 which was issued by the Federal

Government to fund the construction and rehabilitation of some roads across the six geo-political zones in the country.

Essentially, our ability to anticipate, meet and surpass the needs of our clients are some of the factors that helped us to win the award.

Tell us some of the products on offer at STL Trustees In order to simplify the concept of trusteeship for our customers and make same readily available no matter an individual’s income level, we have a bouquet of customized retail products tailored to meet the needs of individuals across a broader spectrum. These products are: Controlling you Retirement Voluntarily (STL CRV). STL CRV is a savings product which has been designed for income earners who are mindful of preparing ahead for post-retirement from paid employment, in addition to the mandatory Pension Contributions under the Law as well as self-employed individuals who want to secure their future, when they would be less active and earn lower income. The product is targeted at the middle to lower income group and ensures that they are able to maintain a lifestyle akin to what they enjoyed while active. It is pertinent to also add that this product has an insurance benefit and the contributor gets a specified amount on the happening of certain events. The insurance premium is separate from the funds contributed and the income generated from the management of the funds as the premium for the insurance is paid by STL Trustees.

There is also STL Target which is specifically designed for persons who would wish to set aside some funds to meet a particular need at some determinate time in the future. The advantage of this product is that it simplifies savings for events by the client and ensures that the funds are available for the required purpose.

We also have an educational product tagged STL CET. STL is a CET Child Education Trust designed to enable you set up a Trust Fund for the education of your child or children. STL Trustees will hold such funds under a trust instrument as trustees to the named beneficiaries and preserve the funds, including all accumulated income thereon in trust for your named beneficiaries. The contributions for this product is periodic and gradual to enable one build up the fund to achieve the desired objective. One can also make lump sum payment if desired.

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Elections won’t slow down ERGP Implementation – Udoma CONRAD OMODIAGBE

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nvestors have been assured that the upcoming 2 0 1 9 g e n e ra l e l e c t i o n s would not hinder or affect t h e i m p l e m e nt at i o n o f government programmes and policies, most especially the Economy Recovery Growth Plan (ERGP).

Udoma Udo Udoma, minister of budget and national planning, made this known to key investors while giving the opening address at an investors’ roundtable coordinated by the Business Council for International Understanding (BCIU) at the recently concluded United Nation’s General Assembly (UNGA) in New York.

The minister explained that the plan was built after consultations with all the relevant sectors from the private sector, developmentagencies, academia and sub national government level. Noting that it is a medium term economic blueprint, which runs through until 2020 after the elections.

The investors also promounced confidence in the Nigerian market, tagging it the best destination in Africa for investments due to the presence of enormous natural and human resources.

They also expressed interest in scaling up investments, as they believe the current administration has committed itself to establishing a conducive business environment in the country.

Ud o ma t ha n ke d t h e m f o r

Senator Udoma Udo Udoma , Minister of Budget and National Planning their support and willingness to inform other investors of opportunities in Nigeria. He reiterated the commitment of the Buhari led administration to growing the economy by fighting corruption, investing in health and education, developing infrastructure and insurgency.

“ The present government inherited a challenged economy with very weak fundamentals, but has worked towards not only getting the economy out of recession, but placing it on a path of sustained inclusive growth through a series of policy initiatives and deliberate ac-

tions,” he said.

Still speaking on the upcoming elections, Zainab Ahmed, minister of finance, told investors that the President has instructed all government officials to focus mainly on the business of governance, not paying any mind to the upcoming elections.

She also stated that significant progress has been made in the stabilisation of the country’s currency, consistent downward inflation, increasing foreign reserves, fiscal discipline and other measures aimed at bettering the economy and increasing investor confidence.

Okechukwu Enelamah, mini st e r o f i n d u s t r y , t ra d e a n d investment also spoke along similar lines, speaking on efforts and plans of the Federal Government to grow the economy and boost investment. He closed his remark by announcing that the ministers are ready to serve and are available to address problems and the private sector.

Speaking to investors on the role of the state in facilitating and supp or ting investment, Godwin Obaseki, governor of Edo State, spoke on the collaboration between states and the Federal Government, through the National Economic Council to create an enabling environment for businesses to thrive.

“States are the laboratories were all Federal Government policies are being implemented.

They are the platforms for practicalizing the policies and initiatives brewed in Abuja”, he said.

FG must strengthen capacity of regulators to check substandard products ODINAKA ANUDU

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ubstandard products are all over the Nigerian market owing to the seeming lack of capacity of regulatory agencies to contain the dangerous trend.

From electric bulbs to cables and wires, down to television sets and leather shoes, Nigerian consumers are compelled to replace the same products now and again with huge negative impact on their shrunken wallets.

Today, most of imported energy bulbs hardly last beyond three weeks, just as a number of phones manufactured by China, sold between N25, 000 and N40, 000, develop faults few weeks after purchase.

In the Prohibition List of the Nigeria Customs, tomato paste, ball point pens, corrugated paper and paper boards, soaps and detergents in retail packs, all types of footwear, bags and suitcases

(excluding safety shoes used in oil industries, sports shoes, canvass shoes all completely knocked down) are banned from being imported, but substandard versions of these items are ironically finding their ways into the Nigerian market as a result of laxity and lack of capacity of the Customs to deal with the situation.

Also, the Standards Organisation of Nigeria (SON) has improved infrastructure and laboratories for product testing across the country, keying into the EUfunded and UNIDO-administered National Quality Infrastructure Project, but the body is underfunded and lacks capacity in terms of technology and personnel to check imported Chinese goods, analysts say.

The National Agency for Food and Drug Administration and Control is not exempted from this situation, with a number of low-quality food products in the market.

“How can they do with so much with little funds and few person-

nel,” Muda Yusuf, director-general of Lagos Chamber of Commerce and Industry (LCCI), told BusinessDay on the phone.

“There are close to 4,000 borders. Many of these regulatory agencies need funding and logistics to work week, but these days, they are even supported by the private sector who they are supposed to regulate,” Yusuf said.

Double-digit inflation (11.23 percent) and states’ inability to pay salaries have eroded incomes of consumers. The World Bank puts textiles smuggled into Nigeria through Benin Republic alone at $2.2 billion a year. This is against local textile production worth $40m annually.

“It is all down to two things: price and quality. You cannot want a low price and a high quality at the same time. You must trade off one,” Ike Ibeabuchi, chief executive of MD Services Limited, a manufacturing and services firm, said.

Regulators say they are put-

ting up a good fight to combat substandard products. Sources in SON complain that the ouster of the agency from the ports has had a negative impact on the economy.

“We have found out that unscrupulous people bring in the containers from the seaports, lock themselves in warehouses to forcefully unstuff the tyres, wrap and label them before loading to markets all over Nigeria,” Osita Aboloma, director general, SON, said in July.

Mojisola Adeyeye, directorgeneral of NAFDAC, said in an interview with BusinessDay that there have been many weak prosecutions in the country.

“This is because, somebody brings in Tramadol and you fine the person 200,000 or one year in jail or someone brings in falsified Augmentin, and gets fined 200,000, 500,000 or one year in jail,” Adeyeye said.

“It takes machines and they are very costly. One piece of equipment can cost up to $500,000.”

Nigeria invests 69.3% of pension assets in FG securities … as contribution reaches new high of N8.3trn CONRAD OMODIAGBE, Abuja

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bout 69.30 percent of Nigeria’s N8.3 trillion total pension assets is currently invested in Federal Government Securities, according to the National Pension Commission (PENCOM).

This indicates a total of N5.78 trillion investment in Federal Government securities.

A breakdown of the figure indicates that N4.22 trillion is invested in FGN Bonds; N1.49 trillion in government’s treasury bills; agency bonds consisting of investments in Federal Mortgage Bank (FMBN ) and Niger ia Mor tgage Refinance Company (NMRC) totalled N10.91 billion; Sukuk bonds also received N53.15 billion investments, while N6.96 billion is invested in green bonds.

The new figures for August 2018 are contained in a monthly report presented by the Commission, which gave a detailed breakdown of investments ma d e by Pe n s i o n Fu n d Ad ministrators (PFAs) handling Retirement Savings Accounts (RSAs).

Investments were also made

by PFAs in state government securities valued at N154.43 billion. Corporate Debt Securities consisting of corporate bonds and corporate infrastructure bonds totalled N407.78 billion, while banks received N849.09 b i l l i o n i n i nve st m e nt s f ro m total pension assets.

Other investments made by PFAs with pension assets include N226.63 billion worth of investment in real estate properties, N116.75 billion in commercial papers, N38.57 billion in private equity funds, N16.06 billion in infrastructure funds, N12.18 billion in open/close end funds, and N9.10 billion in Real Estate Investment Trusts (REIT) and N1.9 billion in the foreign money market.

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How NNPC’s subsidiaries sap Nigeria’s oil revenue DIPO OLADEHINDE

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tate-owned Nigerian National Petroleum Corporation (NNPC) has five oil trading subsidiaries which are Duke Oil Company Inc, Duke Oil Services Ltd, Calson Ltd, Hyson Ltd, and Napoil Company Ltd which were primarily set up to market crude products, engage in direct oil trading activities and make additional profit from oil operations for NNPC. However, years after they were established, these five oil trading subsidiaries still don’t have independent trading capacity to operate optimally. Rather, they act as passive middlemen flipping the crude allocated by the corporation to experienced trading houses like Vitol and Glencore.

At first glance, having Duke Oil Company Inc., a company owned 100 percent by NNPC with the purpose of engaging in crude oil and petroleum products trading across the full stretch of oil trading and price risk management instruments in the international market, seems to be good idea.

“The company was formed by NNPC as part of a comprehensive review of its structural and business requirements necessary to achieve the corporation’s desire for a financially strong and independent integrated international oil and gas Company,” NNPC said on its official website.

Wumi Iledare a professor of Petroleum Economics and Policy Research at the Centre for Petroleum Energy Economics and Law, University of Ibadan, said NNPC subsidiaries acting as middle men will increase transaction cost which will always have a negative effect on the federations account.

“Although sometimes NNPC don’t have a choice, some oil traders will rather prefer to deal with middlemen than deal with NNPC due to some legal implication it might have for the oil traders,” Iledare told BusinessDay by phone.

However at second glance, BusinessDay discovered that despite doing business in Nigeria, the company was registered in faraway Panama in 1989 while its head office was registered in the UK in 1992 as a service company.

It was moved to Paris for a short period in 1997 but returned back to the UK in 1998.

“It’s not an uncommon thing to Nigeria alone. It’s because Panama has attractive tax as most business methodology always map out plans to avoid tax but not to evade it,” Iledare said.

However, an oil industry analyst who insisted on staying anonymous disagreed with Iledare and

asked angrily, “Why would NNPC register a company it owned 100 percent in faraway Panama?

“These are the things the National Assembly should be questioning and be worried about.”

Also, the composition of Duke Oil Company’s board of directors is unknown to anybody in the sector as there are no records of Duke payment of taxes to the federal government, neither has it published its audited account since inception.

“These are basically the medium which lots of funds is stolen as they are basically used by government to do political patronage,” an industry analyst told BusinessDay. Last year, The House of Representatives Ad hoc Committee Investigating Revenue Leakages in Department of Petroleum Resources (DPR) and NNPC beamed its searchlight on Duke Oil over alleged non remittance of over N6trillion revenue.

“While other companies take 32,000 barrels of crude per day, Duke Oil alone takes 90,000 barrels per day and uses other oil firms as third-party traders who pay into offshore accounts belonging to Duke Oil, whereas there are no evidence of them remitting the said funds back to government coffers,” Jarigbe Jarigbe, chairman of the committee.

Another NNPC’s subsidiary is Hyson Ltd, which runs a joint venture between NNP C and Vitol S.A., a Swiss International crude oil and products trading company.

“As a subsidiary of NNPC, there is no qualification they need that NNPC doesn’t already have, so they have no logical explana-

tion for using third party in 2018,” an oil and energy expert told BusinessDay. NNPC owns 60 percent stake in Hyston Ltd, which is in business to market Nigeria’s excess petroleum products in the West and Central African sub regions and other parts of the world.

Hyson Ltd also imports various petroleum products (in collaboration with its sister company Calson Bermuda Ltd) in order to augment shortfalls from domestic refineries production e.g. PMS, DPK, AGO, LPFO, etc. However like Duke Limited, it has no independent trading capacity to operate optimally.

“Rather than go to countries where there is tax haven, Duke Oil, Hyson Ltd and Calson Ltd should all pay taxes to Nigeria government,” an industry analyst said.

Leading professional auditing firm, KPMG, said many of the world’s major oil and gas companies must have an established international trading structure to gain competitive advantage.

“Commodity prices will dictate the future of international trading companies as long as commodity prices remain high.

The trend towards centralisation in favourable trading locations will continue,” KPMG said in its report.

With oil accounting for more than half of government revenue and 90 per cent of export income, Nigeria’s NNPC has over the years remained vulnerable to political interference and also still a primary target for most states seeking to pay workers salary.

Nigeria’s President Muhammad Buhari is seeking to run for another term having campaigned in 2015 on the basis of stopping

all forms of subsidy payments on petroleum products.

However, subsidies are still being paid.

BusinessDay analysis into the latest financial records of NNPC showed from January 2018 to March 2018, the government has paid N139.334 billion for undercover alone, which is far higher than the capital allocation to some key ministries and parastatals in the 2018 budget.

For example, the amount spent for on under recovery from January till March of N 139 .334 billion is 43.5 times more than the total 2018 combined capital allocation of the country’s top 10 universities of N3.2 billion which include University of Ibadan (N79million), University of Lagos (N49 million), University of Nigeria (N1.3 billion); Ahmadu Bello University (N439 million); Obafemi Awolowo University (N44million); University of Benin, N69Million; University of Jos, N250million; University of Calabar, N74 million; University of Ilorin, N6.7 million; University of Abuja, N952 million.

Also, the under-recovery deduction is 139 times more than the capital allocations to National Health Insurance Scheme (NHIS) of N 999 million, the agency responsible for the health insurance of its over 190 million people. It’s also 5.9 times more than the capital allocation of N23.3 billion allocated to National Primary Health care Development Agency (NPHCDA) in 2018, the agency responsible for primary health care development in Nigeria.

The under-recovery money of N139.334 billion is also 1.35 times higher than the N102.901 billion capital allocation for the

Federal Ministry of Education in the 2018 budget and 1.61 times higher than the N86.485 billion allocated to the Federal Ministry of Health for capital expenditure.

The under-recovery deduction is 0.93 times and 0.95 times the N149.198 billion and N147.2 billion capital allocations for the Federal Ministry of Agriculture and Rural Development and the Federal Ministry of Water Resources respectively in the 2018 budget.

The Abuja-based behemoth saw a trading surplus of N11.72 billion in March 2018 although relatively N4.99 billion lower than the previous month’s surplus of N16.72Billion. “ This low performance is attributable to the Refineries’ downturn with high cost of operations and reduction in NPDC’s production resulting to decline in their revenue,” NNPC said on its official website.

NNPC also makes deductions for crude oil losses, petroleum product losses, pipeline repairs and management cost, and Joint Venture Cost Recover y. Specifically, the report disclosed that between January and March 2018, the NNPC allocated N1.243 billion, N2.394 billion, N26.844 billion and N138.426 billion for crude oil losses, petroleum product losses, pipeline repairs & management cost, and Joint Venture Cost Recovery respectively.

The pain for NNPC, which produces oil and natural gas in partnership with International oil companies (IOC) such as Royal Dutch Shell Plc, Exxon Mobil Corp. and Chevron Corp, comes even as state owned oil firms of other countries such as Equinor and Saudi Arabia continues to make profit.

“We hope the Petroleum Industry Bill (PIB) will reduce or better still eliminate some of the huge transactions costs the NNPC currently bear,” Professor Iledare said.

Nigeria has been on a perpetual voyage with PIB which is one of its most important bills ever to be contemplated in Nigeria’s history in a journey that began sixteen years ago with a lot of anticipation and promises.

The bill is still stuttering through legislation after passing through four presidents, five presidential terms and five legislative tenures yet there is little or no results to show.

“The problem are not the laws but the personnel that will implement the laws; until the government allow proper private firm dictates the trading of oil, the government will continue to run in circle,” an oil expert told BusinessDay.

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How Nigeria can escape the natural-resource curse Investing in health and education is the key to breaking its unhealthy dependence on oil.

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igeria’s population is growing rapidly. It now stands at 182 million, and is projected to exceed 300 million by midcentury, surpassing the U.S. to become the world’s third-largest country. And thanks to a high fertility rate -- more than five children per women, higher than the average for sub-Saharan Africa and more than double the global rate -- that growth can be expected to continue for quite some time.

That enormous population -- by far the largest in Africa -means that Nigeria’s economic future is especially important.

Unfortunately, Nigeria’s economy is dependent on natural resources, particularly oil. That poses all kinds of political and economic challenges that will be difficult, though not impossible, to overcome.

Some might think that nature has endowed Nigeria with an enormous bounty. It has the world’s 10th largest proven oil reserves, and is Africa’s largest producer of crude. But the idea that natural resources are a good measure of a country’s wealth is a fallacy. Instead, it’s more likely to result in what economists call the resource curse -- one of the most pernicious and mysterious ailments a country can suffer.

Although a few small oilrich countries such as Qatar, Brunei and Kuwait have enough oil to provide high living standards for much of their population, they’re the exception; in general, there’s a correlation between oil resources and widespread poverty. Economists have come up with many explanations for this correlation. Oil exports tend to push up a country’s exchange rate, making it less competitive in other industries. This in turn reduces an economy’s complexity, preventing it from developing supply chains or raising productivity by learning foreign technologies and production processes.

It also exposes a country to risk. Oil prices are volatile.

When prices fall, as they often do, it can be disastrous for an oil-dependent economy.

During the 1980s, Nigerians actually got steadily poorer, as oil prices fell: Nigeria has been feeling the pain from this drop. Oil accounts for more than half of the government’s revenue, and the vast majority of the country’s foreign-exchange earnings. Thus, when oil prices fell, the pain filtered through to Nigeria’s other industries, and it wasn’t long before the whole economy began to suffer, with real percapita growth again falling into negative territory. The recession, in turn, led to a decline in employment: A growing pool of poor, jobless Nigerians is a danger-

ous thing. Political stability could be at risk, especially as the country continues to be racked by internal conflict. Indeed, instability and violence are features of the resource curse -- when government revenue depends heavily on oil, political control represents a tempting prize for would-be coup leaders and revolutionaries.

Now, oil prices are rising again, which will take some pressure off of the economy, but which could present its own set of problems. Nigeria heavily subsidizes fuel for consumers, as a way of maintaining social stability -- a common policy in countries afflicted by the resource curse. With prices rising, those subsidies are the government costing more.

In other words, this crucial, giant country is caught in a political-economic trap. But there may be a way out. A smaller African country, Botswana, is widely believed to have conquered the resource curse.

Botswana is about as dependent on diamond mining as Nigeria is on oil. But the country has taken several steps to fend off the typical problems. To prevent its currency from gyrating, and its other exports from losing competitiveness, it accumulated foreign-exchange reserves. The stable, low exchange rate allowed the country to diversify its economy into manufacturing and services. To prevent instability in its government budgets, it ran surpluses in good times and deficits in bad, basing spending on long-term revenue projections instead of short-term revenue collection and avoiding splurging on big projects when times were good. The government also invested in health and education.

As a result, Botswana’s economy has grown steadily over the decades instead of suffering long declines like Nigeria and many other resource exporters. Its living standards are not lavish -- its per-capita GDP at purchasing power parity is a bit less than one-third that of the U.S. -- but it’s richer than almost any

other country in the region.

Nigeria has been trying to take a page from Botswana’s book. Its sovereign-wealth fund, the Nigerian Sovereign Investment Authority, has funds for budget stabilization and infrastructure. Its currency has depreciated, which -- if the drop is sustained -- will be good for economic diversification.

But investment in education has lagged. Education and health are the way forward for Nigeria. The NSIA should create another fund specifically for education and health, and the government should direct as much tax money toward this fund as politically feasible.

If possible, money should be diverted from fuel subsidies and other consumption supports toward these long-term investments. Some people will be upset, but since education will act as a form of child care for Nigeria’s large families, this will should offset popular anger.

An educated, healthier populace will form the base for economic diversification, since service and manufacturing industries depend on a having a reservoir of able, literate workers. Along with a stable currency and budget, diversification will help insulate Nigeria against the vagaries of the oil market. Escaping the resource curse is hard, but it can be done.

Expansion in telecoms industry undermined by infrastructure, charges, policy ODINAKA ANUDU

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iger ia could have seen much larger local and foreign investments in the telecoms industry if not for poor infrastructure, low broadband penetration, multiplicity of charges and lack of implementation of well-thought-out policies, CEOs of telecoms firms said recently.

Nigerian authorities see the telecoms industry as a cash cow, imposing about 38 different taxes and levies on the struggling telecoms players.

Right of Way (RoW), defined as the legal right to pass cables along a specific route through the ground, is still a big challenge as many states charge as high as $20 per metre for laying fibre network, rather than N145 agreed by the National Economic Council. Broadband penetration is relatively

low at below 30 percent, as the CEOs said the Nigerian National Broadband Plan (2013-2018) had not been implemented religiously.

Broadband is defined as an internet experience where the user can access the most demanding content in real time at a minimum speed of 1.5 Mbit/s. CEOs of telecoms estimate that broadband penetration will cost about $100 billion. “Investors are willing to come to Nigeria. I have seen a lot of them who looked at the size of the Nigerian economy and wanted to come in, but once they start looking at the economics they pull out,” said Funke Opeke, CEO of Main One Cable Company, a Lagos-based communications services company.

“They will tell you they have done it in Kenya, Ghana and other African countries.

So, why is it too expensive to do it here? The conditions are not just conducive at the moment to make such in-

vestment,” Opeke said at the breakfast meeting organised by the Nigerian-American Chamber of Commerce (NACC) in Lagos.

She urged the government to bring down the cost of infrastructure, be it RoW or main infrastructure, adding that low purchasing

power of Nigerian consumers have had a negative impact of the telcos.

Nigeria’s Broadband Plan targets spreading 3G/LTE to at least 80 percent of the population while delivering a five-fold increase in broadband penetration, but this has not been achieved, thus

hurting the prospects of the industry.

“I looked at the Broadband Plan and I told myself, ‘If only we had implemented this, we would have exceeded 30 percent,” said Godfrey Efeurhobo, CEO of Smile Communications. “In all the poli-

cy statements, including the Economic Recovery and Growth Plan (ERGP), broadband is all there. But why is broadband not in the list of items that can access foreign exchange?”

Efeurhobo asked.

“A number of our customers want us to be in all the states, but we are in eight cities and cannot even satisfy our customers. I cannot make a business case because it is expensive to be in these places and FX is my capex. “If the government is subsidising agriculture, why not also broadband?,” he further asked.

For Olusola Teniola, president of the Association of Telecommunications Companies of Nigeria (ATCON), telecoms business is under threat. “We are not cash cows. Telecoms businesses are under threat because we have poor, weak policies. All the capacities of fibre have not even reached the average Nigerian,”Teniola said.