BusinessDay 24 Oct 2019

We will deliver Lekki Port project in 30 months – CHEC AMAKA ANAGOR-EWUZIE

…Deep seaport to open for business in 2021

he major contractor handling the Lekki deep seaport, China Harbour Engineering Company (CHEC), has vowed to deliver the project by

2021 or in 30 months’ time.

Lin Yichong, chairman, CHEC, the Engineering, Procurement, and Construction (EPC) contractor that would oversee the design and

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news you can trust I * * THURSDAY 24 OCTOBER 2019 I vol. 19, no 420

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construction of the project, said the signing of a facility loan agreement is a major step towards the project’s financial closure, which indicates that the project will move to the

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construction stage.

While acknowledging that CHEC has the capability and technical knowhow to deliver on the port project, Yichong said the port

ODINAKA ANUDU& GBEMI FAMINU

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igeria’s most comprehensive and ambitious industrial plan has been left in the shelves of the Ministry of Industry, Trade and Industry to gather dust five years after it was launched in 2014.

The five-year plan was conceived and prepared by Nigerian experts, the United Nations Industrial Development Organisation (UNIDO) and several technical partners with a view to building a resilient manufacturing sector that would drive jobs, generate wealth, diversify the economy, substitute imports, boost exports, and broaden the tax base in three

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Nigeria’s most ambitious industrial plan gathers dust 5 years after launch

would consist of two container berths that would receive the next generation container ships with the ability to accommodate 1.2 million Twenty-foot Equivalent

Folashade Jaji (2nd r), secretary to Lagos State Government, congratulating Ndidi Okpuzor, one of the keke winners in the on-going Glo promo ‘My Own Don Beta’, while other winners, Aminat Afeez (r) and Joel Ndifreke (1st l), watch with admiration at the first presentation of prizes to winners by Globacom in Ojuelegba, Surulere, Lagos, yesterday.

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CBN bars banks from OMO auctions for local investors, corporates SEGUN ADAMS

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he Central Bank of Nigeria (CBN) has ordered lenders to stop paticipating in its Open Market Operations (OMO) auctions on behalf of local corporates and individuals, as the apex bank attempts demand management to reduce its OMO liabilities and return the liquidity management tool to traditional use.

In a circular released yesterday

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Thursday 24 October 2019

BUSINESS DAY

news Zenith Bank reaffirms market dominance as Q3 profits surge BALA AUGIE

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L-R: Zhang Aijun, deputy general manager, China Development Bank; Lin Yichong, chairman, China Habour Engineering Company; Babajide Sanwo-Olu, governor of Lagos State; Haresh Aswani, managing director, Tolaram Group (Africa); Chu Maoming, consulate-general of China in Lagos, and Biodun Dabiri, chairman, board of directors, Lekki Port LFTZ Enterprise Limited, at the signing ceremony of the facility agreement for the $629 million funding of the Lekki Deep Sea Port Project by the China Development Bank in Lagos, yesterday.

Pic by Olawale Amoo

Interswitch concludes N23bn bond placement through SPV

…announces FBNQuest, Stanbic IBTC Capital as lead financial advisors The strong level of oversubscription demonstrated ollowing the regis- at 15 percent was 2.6x sub- investor confidence in the tration of a N30 bil- scr ibed. The seven-year Interswitch brand, business lion debt issuance Bonds, embedding a call op- model and long-term stratprogramme (the Pro- tion that can only be exercised egy, supported by strong domestic ratings from both gramme) with Nigeria’s Securi- from the second year, are Agusto & Co. Limited and payable in full at maturity.

An ties and Exchange Commission application will be made to Moody’s Investor Service.

(SEC), Interswitch Limited (the The Issuer was assigned list the Bonds on the Nigerian Sponsor), a leading technolo- Stock Exchange (NSE) on re- “Aa3” national scale progy-driven company focused on ceipt of the SEC’s approval of gramme rating (stable) by the digitisation of payments in the proposed allotments.

Moody’s and “Aa” (stable) naNigeria and other African counInvestor participation was tional scale rating by Agusto, tries, has successfully conclud- restricted to qualified insti- on the back of positive secued a N23 billion Series 1 Fixed tutional investors as defined lar industry shifts, a strong Rate Senior Unsecured Callable by the SEC in Nigeria, with a market position and a good Bonds issue (the “Bonds” or proposed Bonds allocation of 64 liquidity profile. The Spon“Issue”) via a Special Purpose percent to pension fund manag- sor was also assigned “Aa” Vehicle (SPV), Interswitch Af- ers, 7 percent to asset managers (stable) rating by Agusto.

“We are delighted to reand 22 percent to commercial rica One plc (the Issuer). port the success of the first The Series 1 Issue priced banks pending SEC approval.

Jumoke Akiyode-Lawanson

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MARKETS

series of Bonds issued under our Programme, especially with the level of interest shown by investors.

Diversifying our funding sources through the inclusion of these Bonds will enable us achieve our strategic objectives and vision,” said Mitchell Elegbe, founder and CEO, Interswitch.

FBNQuest Merchant Bank and Stanbic IBTC Capital acted as lead financial advisors/issuing houses and ABSA Capital Markets Nigeria, FCMB Capital Markets, Quantum Zenith Capital & Investments and Rand Merchant Bank Nigeria as joint issuing houses.

Eni begins gas, condensate production at Obiafu-41 discovery …to boost domestic supply, feed Kwale Okpai 500MW power plant STEPHEN ONYEKWELU

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talian oil major Eni has brought on stream its Obiafu gas and condensate discovery in Nigeria’s Niger Delta, three weeks after well completion, the company said Wednesday.

Production will reach a capacity of about 3 million cubic metres (106 million cubic feet) per day of gas and 3,000 barrels per day of condensate, Eni said in a statement. It said the gas from this block will be used for domestic consumption.

Part of the domestic consumption of gas from this discovery entails processing it at

the Eni-operated Ob-Ob plant and then sending it to the 500 megawatts (MW) Kwale Okpai power plant, Nigeria’s first independent power plant. Upgrade for the Okpai plant, which will double its capacity to 1 gigawatt (GW), is currently underway.

“The discovery contains approximately 28 billion cubic metres (Bcm) (988 billion cubic feet) of gas and 60 million barrels of condensate and the gas from this discovery will largely be channelled to the domestic market in order to feed the power sector,” Eni said in a statement.

Eni’s affiliate company, Nigerian Agip Oil Company

tic market. In 2018, Eni’s equity hydrocarbon production amounted to 100,000 barrels per day of oil equivalent.

Nigeria has the largest gas reserves in Africa and has also made it a priority to unlock and harness its gas potential to increase domestic and industrial power supply.

According to NNPC, Nigeria has around 202 trillion cubic feet (Tcf) of proven gas reserves, a number that was increased from around 187 Tcf late last year, plus about 600 Tcf of unproven gas reserves.

But despite having the

(NAOC), in which it holds a 20 percent operating stake, alongside state-owned Nigerian National Petroleum Company (60 percent) and Oando (20 percent), made this find in the deeper sequences of the Obiafu-Obrikom fields with the Obiafu-41 deep well in Oil Mining Licence (OML) 61 onshore Niger Delta in August 2019.

Eni’s equity gas production in Nigeria last year was some 92 Bcf (2.6 Bcm), according to the company’s website, or around 5 percent of the country’s total gas output.

In Nigeria, approximately 30 percent of Eni’s gas production is supplied to the domes-

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enith Bank plc has announced its unaudited results for the period ended 30 September, 2019, with numbers that clearly demonstrate its market dominance and leadership.

From the unaudited account which was presented to the Nigerian Stock Exchange (NSE), gross earnings increased by 4 percent from N474.6 billion recorded in Q3 2018 to N491.2 billion in Q3 2019.

Profit before tax (PBT) grew by 5 percent from N167.3 billion in Q3 2018 to N176.1 billion in Q3 2019.

Also, profit after tax rose by 5 percent from N144.1 billion in Q3 2018 to N150.7 billion in Q3 2019.

Despite a challenging macro-economic backdrop, the Group recorded a significant growth in non-interest income, expanding by 22 percent from N128.7 billion in Q3 2018 to N156.8 billion for the current period. Zenith Bank platforms and channels have been the enablers of this growth, with fees from electronic products doubling to N35.3 billion from N17.6 billion in Q3 2018.

The bank’s cost optimisation strategies and aggressive retail banking drive are

yielding the desired effects as cost-to-income ratio declined from 51.2 percent in Q3 2018 to 50.1 percent in Q3 2019, with Earnings Per Share (EPS) growing by 5 percent from N4.58 in Q3 2018 to N4.80 in Q3 2019.

The retail and corporate banking franchises continued their momentum with customers’ deposits growing by 7 percent to N3.95 trillion from N3.69 trillion recorded as at December 2018, a reflection of increasing share of the industry’s deposits and customers’ confidence in the Zenith brand. These deposit acquisitions have directly contributed to cost of funds improving from 3.3 percent in Q3 2018 to 2.95 percent as at Q3 2019.

The bank has continued to deploy capital to create viable risk assets with gross loans and advances growing by 9 percent from N2.02 trillion as at December 2018 to N2.2 trillion as at Q3 2019 across both the retail and corporate segments.

“Our focus remains the search for bankable lending opportunities to ensure the attainment of the minimum regulatory loan-to-deposit ratio (LDR) of 65 percent by December 31, 2019 without compromising our prudence,” the bank said in a statement.

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Road maintenance cost in Nigeria makes 2020 budget allocation to Works ministry a huge joke CHUKA UROKO & MIKE OCHONMA

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he cost of either constructing or maintaining a kilometre of road in Nigeria is extremely high when compared to other African countries. This partly explains the dire situation of roads in the country.

Adedamola Kuti, federal controller of works in Lagos, told BusinessDay on phone that it is difficult to determine the cost of road construction or maintenance per kilometer.

However, a report by Abuja-based Centre for Social Justice (CSJ), which was based on an earlier study conducted by the World Bank, puts the cost of constructing a kilometre of road at between N400 million and N1 billion.

Placing this side by side with the total length of roads in the country makes the 2020 budget allocation for roads a huge joke.

Kuti estimated the total length of roads in the country at 200,000 kilometres. Out of this number, 34,000 kilometres belong to the Federal Government, while the rest are owned 16 percent and 66 percent by state and local

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governments, respectively.

“The condition of these roads is so poor that only about 35 percent of the network is motorable,” Femi Oludayo, a civil engineer, confirmed to BusinessDay on phone.

Contrary to what obtains in other African countries, the cost of road maintenance in Nigeria isn’t much lower than the cost of building the road itself. Whereas in Limpopo, South Africa, maintaining a kilometre of road costs an equivalent of N7.6 million, in Nigeria it is N100 million to N1 billion per kilometre.

Meanwhile, from an aggregate expenditure of N10.33 trillion proposed by the Federal Government for 2020, only N262 billion was appropriated to the Works and Housing Ministry.

In the current 2019 fiscal year, the Ministry of Power, Works and Housing has budget allocation of N428.4 billion. This is higher by about N39 billion than the N127 billion appropriated for Power and the N262 billion for Works and Housing for 2020 put together.

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Japanese firms eye greater investment in Nigeria amid economic recovery SEGUN ADAMS

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apan wants to take advantage of Nigeria’s economic recovery to boost its business with Africa’s biggest market, the Japanese External Trade Organisation (JETRO) said Tuesday, ahead of the 2019 International Lagos Trade Fair where 37 firms from the Asian country would be exhibiting their products and technologies.

JETRO, a government organisation that promotes mutual trade and investment between Japan and the rest of the world, would be collaborating with the Japanese Embassy to exploit the Lagos Trade Fair for promoting investments between the two countries.

“Japanese firms create jobs, educate staff, transfer technology and share values of Japanese craftsmanship, which is key to agenda of the federal government and its Economic Recovery and Growth Plan (ERGP),” said Shigeyo Nishizawa, trade commissioner/managing director of JETRO in Lagos.

The move to boost bilat-

eral follows an increase in the number of Japanese–affiliated firms in Nigeria to 42 in 2018, double of 2014 figure, underscoring the country’s interest in Nigeria.

According to the Lagosbased Japanese organisation, export from Japan into Nigeria in 2018 rose 2.3 percent to $328 million while exports from Nigeria to Japan also rose 17 percent to $922 million.

While vehicles (20.7%), steel products (16.7%), and chemical products (11.3%) were Nigeria’s biggest import from Japan in 2018, oil and gas (77.6%) and non-ferrous metals (15.4%) were Nigeria’s major exports to Japan, in turn, data from JETRO shows.

Nishizawa said Japan would support Nigeria’s manufacturing sector with quality inputs so the country can improve its exports.

At the trade fair expected to hold from November 1 through November 10, Japanese agents and their local distributors are expected to showcase products like brands of motorbikes from Honda, Yamaha and mo-

tor brands from Mitsubishi, Toyota, Isuzu and Suzuki.

Other products such as cameras and multifunctioning printing machine of Canon, Sharp and Brother would be expected to boost Japan’s export as well as construction materials such as Plascon Paint and Alteco adhesive.

The Japan Pavilion this year would feature a “Made in Japan, Made for Women” corner as the Asian economy would also be exhibiting products and services that would help women access more fashionable and convenient items including cosmetics and hair wigs, which are rising items on Nigeria’s demand from Japan according to JETRO. Brands like Kaneka and Denka, the suppliers of Xpression and Darling, are already leading hair manufacturers in Africa.

Food and beverages and electronics makers would also be at the trade fair, with names like Briscoe Nigeria plc, Olam Sanyo Foods, Tomoe engineering, and Ajinomoto among the exhibitors.

Experts kick against NERC’s regulation of electricity tariff Josephine Okojie

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ndustry leaders in the energy sector have called on the Federal Government to allow market forces to determine the price of power rather than the present system of pricefixing by the National Electricity Regulatory Commission (NERC).

The experts spoke at the 2019 Energy Sustainability Conference held in Lagos recently.

Chukwueluka Umeh, CEO of Century Power Generation Limited and an executive director of Nestoil Group, said the energy sector was over-regulated, which was why investors were reluctant to deploy resources despite the enormous potentials in the industry.

Umeh said the government must realise that the provision of power was not a social service but

a business venture, saying price fixing had led to Power Distribution Companies (DISCOs) rejecting power from the Generating Companies (GENCOs), while the nation wallowed in darkness.

For the economy to grow in any meaningful way, the government must develop a robust power with a robust national grid that covers the entire country, with an equally robust base-load supported by peaking plants to help keep the grid stable during high demand hours, Umeh said.

“For Nigeria to grow and get out of the odious title as the poverty capital of the world, we must make a conscious decision to remove the chains on our power industry.

“We must deregulate the industry and allow private com-

Chartered administrators back fight against corruption JOSHUA BASSEY

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hartered Institute of Administration (CIA) has given indication to work with the Economic and Financial Crimes Commission (EFCC) and other relevant agencies to fight crimes as well as raise the bar of administration in Nigeria.

Samson Olopade, president/chairman in council of CIA, stated this at the third national conference of all administrators, held in Lagos, with the theme, “Strategic administration of organisations: Times and challenges.

Such collaborations, Olo-

pade said, are needed to drive Nigeria’s quest to realise its full economic potential.

According to Olopade, no nation can become great unless administration is put in the right perspective and qualified administrators recognised to run affairs in the public and private sectors of the economy.

He said: “Nigeria currently faces challenges that are taking toll on its economy and affecting the quality of lives of the citizens due to maladministration. It should be stressed that no area of human endeavour can function effectively without the element of administration.

panies to do what they do best, grow the business and galvanise the economy,” he said.

A panellist from the Investment Professional Infrastructure Africa, International Finance Corporation (IFC), Roger Endom, said IFC was investing in Cameroon’s power sector because the government there had a consistent and cost-effective tariff policy in place that protected investor’s funds, which is not seen in Nigeria.

On his part, Victor Ndukauba, deputy managing director, Afrinvest, said the country might not witness another Independent Power Project (IPP) like the Azura IPP in Edo State in the next five years if the prevailing situation remained in the power sector.

He said the Azura project was being hindered by the structural defects in the power industry.

“Our task therefore is to make Nigeria realise its potential and harness it to advance to the level of other nations.”

Ibrahim Magu, acting chairman of the EFCC, who was a guest speaker at the event, while soliciting for the support of the administrators, said it was difficult for any nation to attain socio-economic growth if its resources were continually plundered.

“The anti-corruption should not be left to the EFCC alone. If administrators key into it, the battle will be half won,” said Magu, who was conferred with a Fellow by CIA at the event.

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RESEARCH&INSIGHT

In association with

A WEEKLY PUBLICATION OF BUSINESSDAY RESEARCH & INTELLIGENCE UNIT(BRIU)

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Spotlight on Nigeria’s telecommunications sector ADEMOLA ASUNLOYE

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he telecommunications sector has enormously contributed to the Nigerian economy in the last decade. The adoption of mobile phones and internet for easier banking services, communication, and access to e-learning platforms, among others, have grossly shaped lives and businesses of Nigerians. According to a report from Twinpine in 2016, the number of unique mobile lines (any type of handset) had increased to 74.7 million, mobile penetration (unique users against the then estimated population of 184 million) was at 40 per cent while smartphone had only gained 30 per cent penetration in the country.

A report from the Global System for Mobile Communication Association (GSMA) showed that the number of unique mobile lines had jumped by 30.52 per cent in 2 years to 97.5 million in 2018; raising the mobile penetration to 49 per cent and smartphone adoption to 36 per cent penetration in the country (over 53 million users).

Access to mobile broadband continued to be on the increase as 52 per cent (projected to reduce to 5 per cent in 2025) of mobile users in Nigeria have access to the second generation GSM network (2G) in

Source: NCC, BRIU

Angola, Kenya and South Africa to mention but few; as only 4 per cent of users have access to 4G. With this poor accessibility to 4G broadband, it may take Nigeria a while to adopt 5G network which is the next (fifth) generation of internet connectivity, offering even faster speed and more reliable connection than ever before.

Mobile application has given more Nigerians access to the internet than any other technology. It has become the primary

Source: NBS, BRIU

2018, and 44 per cent (projected to increase to 70 per cent in 2025) have access to the third Generation Partner Project (3G) network in the same year.

Nigeria lags regional peer to peer (P2P) fourth generation wireless network (4G) compared to some African countries like

platform for creating, distributing and consuming digital content and services across multiple sectors.

“Smartphone brands that rate low in the Nigerian market”, a brief from BusinessDay Research and Intelligence Unit (BRIU) in 2018 showed that a massive 82.22 per cent of active

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social media users frequent Facebook, Twitter, 6.39 per cent; Pinterest, 6.1 per cent; YouTube, 2.71 per cent; Instagram, 1.62 per cent and Google+, 0.35 per cent among others. As at 15th of October 2019, the top ten mobile applications ranked by usage in Nigeria from top to least by SimilarWeb are: Whatsapp, Xender, Facebook Lite, Wish, Opera Mini, Jumian Online Shopping, Likee, Instagram, Facebook Messenger and Facebook.

The correlation between advances in mobile technology and its impact has consistently been a direct and positive relationship. This marked effect is evident in daily business life as it enhances overall activities of the economy as well as promotes inclusive growth. In 2017, the mobile ecosystem added about $21 billion representing 5.5 per cent to the Nigerian Gross Domestic Product (GDP), created about 500,000 direct and indirect jobs and contributed $1.8 billion tax representing 16 per cent to government tax revenue. The Information and Communications Technology (ICT) sector alone grew from its negative territory of 1 per cent in 2017 and by 9.7 per cent in 2018—the second fastest!

In 2018, the Nigeria Communications Commission (NCC) stated that the number of active mobile phone lines in Nigeria rose to 146 million. As a result of the huge market, telecoms operators and internet service providers are on their toes to consistently deliver services at relatively cheap prices.

However, the tariff competition among service providers on voice and internet subscriptions oscillates the sectoral revenue.

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In the first two quarters of 2019, the ICT sector recorded growth in the number of active voice subscribers—, that is, it grew by 7.21 per cent and 7.41 per cent in first quarter (Q1) and second quarter (Q2) 2019 respectively compared to the 162.03 million subscribers in Q4 2018. Telecoms data from the National Bureau of Statistics (NBS), revealed that a total of 173.71 million subscribers were active on voice in Q1 2019.

This further increased to 174.04 million active subscribers in Q2 2019; representing 0.19 per cent increase from Q1 2019. The Q2 subscriber base also accounted for over 87 per cent penetration rate.

The analysis of the active internet subscription in the review period showed that the sector recorded 18.51 per cent and 12.36 per cent increase from Q4 2018 subscriber base (103.51 million) to 122.67 million active internet subscribers in Q1 2019 and 116.31 million active internet subscribers in Q2 2019 respectively. However, the number of active internet subscribers was down by 5.19 per cent from Q1 to Q2i n 2019.

On a state by state evaluation of active voice subscriptions in Q2 2019, it was evident that Lagos state had the highest number of subscribers to the tune of 22.61 million (13 per cent of the country’s); followed by Ogun with 10.37 million subscriptions; Kano, 10.07 million; Oyo, 8.94 million and the Federal Capital territory (FCT) amassed 7.80 million active voice subscriptions. However Bayelsa State which recorded 1.26 million subscribers, Ebonyi, 1.63 million; Ekiti, 1.63 million; Yobe, 1.95 million and Gombe with 2.10 million voice subscribers had the least number of active voice subscription base in Q2 2019.

Similarly in Q2 2019, based on statewide evaluation of active internet subscriptions, Lagos State had the highest number of subscribers totalled 16.48 million, followed

by Ogun, 7.45 million; Kano, 6.85 million; Oyo, 6.22 million and FCT with 5.53 million subscribers. Quite to the contrary, the least number of active internet subscriptions were recorded in Bayelsa with 922,460 subscribers; Ebonyi, 1.10 million; Ekiti, 1.21 million; Yobe, 1.32 million and Zamafara with 1.45 million subscribers.

Data from NCC on market share by operator as at August 2019 showed that MTN Nigeria leads the pack with 37.20 per cent share; Airtel with 27.13 per cent, Globacom, 26.76 per cent; 9Mobile, 9 per cent and Visafone had a market share of 0.07 per cent.

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Onitsha inferno: Tankers of death, institutional failure and conspiracy theories

IK MUO

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ire disaster is the worst evil that can befall any human being or community. Flood will destroy some items, wet others and leave the rest for you. Even the 40-day rain still left Noah and his diverse co-travellers. Armed robbers and kidnappers can take some cash and valuables and at times take some lives. But they cannot go away with your house, certificates, pictures, clothes brooms plates and cooking utensils. Fire on the other hand, is very voracious, avaricious and gluttonous.

It is never satisfied unless it finishes EVERYTHING on its path or unless it is stopped by force.

It did not start today because that was the case in Sodom and Gomorrah! I am still short of words on how to describe what happened at Onitsha last week (16/7/19). People came out that morning with their plans for the day, the week and even for the Xmas season. Some were just passing by and were on their way to the rowdy Lagos Park. Some were hawking this and that while some might have sneaked out of school and were on their way to visit this or that person. Some had even gone to Upper Iweka to engage in major and minor criminal enterprise. And then, the tanker of death came calling and that was it.

For me, the most harrowing memories were of that young lady who even at death was still clutching her child, an evidence of that inexplicable bond between mother and child; that young man who had borrowed to restock his shop that morning and who looked totally lost in that viral picture, and the woman who lost his house and two warehouses to the insatiable inferno and who was still wondering whether it was a dream or a real-life experience.

Perhaps, this was our own version of the famous Chicago fire of 1871 in

which about $200 million was lost or an encore of the Arriaria market disaster, for which Oliver De-Coque waxed a record about 30 years ago.

And it appeared that the “spirit” of fire had escaped from wherever. While that of Upper Iweka lasted for two days, and while it was still smouldering, another one happened at Omagba Phase2, less than 2 minutes away from Upper Iweka (17/10/19). While that was a “small” one and was readily contained, it reportedly consumed 8 houses and 22 cars. Within that period, another fiery spirit visited a hotel at Nnewi, claiming three lives while about 300 shops were destroyed at the famous Santana market in Benin.

Back to the Upper-Iweka inferno, it was caused by the tanker of death.

Suddenly fuel tankers have become agents of death, wreaking havoc on people and properties all over the country. The fieriest of late was that of Otedola Bridge. We have had fuelladen tankers over the years but the rate at which they cause fire outbreaks has become alarming. What has suddenly gone wrong? Are the tankers no longer road-worthy (even though our roads are not vehicle worthy!)? What type of drivers is in charge of these ferocious agents of death? An increasing number of teenager-drivers have suddenly become the favourites of haulage companies, unlike the days of yore when oldies, which have seen enough Christmases’, were in charge.

What happened to the owner-drivers of earlier fire-spitting tankers? To what extent were they insured and to what extent have the insurers fulfilled their responsibilities?

Sometimes ago, all independent fuel-stations in Ekiti State went on “akshion” (strike) because Governor Fayose had insisted that all of them MUST be insured! Why were the state and federal fire outfits missing in action on that day? What arrangements did the traders make for their self-preservation? What did their leaders or dealers do with the humongous amounts they collect as levies from their members?

Must it take this level of disaster for the State to “do something” and what has the Federal Fire Service said or done about this disaster? These question touch on sundry issues surrounding

the Onitsha Inferno but it is obvious that there was unpardonable institutional failure.

Already the politics of solidarity visits have started but my concern for now is the conspiracy theory of what would happen after the dust has settled. It is obvious that the market will be reconstructed and the question is: what is the fate of the current shop-owners?

There was a time market fires became so rampant in Lagos that people became suspicious because fire incidents were usually followed by change of ownership of the markets. See IK Muo (2009) Lagos: The social cost of transformation, BusinessDay 30/11/09, for an example. I learnt the same scenario is playing out in two markets in PortHarcourt. I hope nobody tries that “nonsense” at Onitsha or even at the Santana Market, Benin. If the government involvement in reconstruction is a strategy to dispossess the current traders, let the government just set the standards and let the shop owners and landlords rebuild their stalls.

Other matters: Feedback on Fela & CSW Last week, I did a major on Fela and a minor on the Customer Service Week.

As usual, I received several feedbacks, for which I am sincerely grateful. Here are few of them.

Dear “Muoigbo”, I have been an avid reader of your weekly essays... I vividly remember a visit to Fela’s republic - and my firsthand observation of the strict order and discipline always maintained within the republic and the precincts. No one dared molest any visitor or passer-by for any reason… Stories abounded of how he drew a roaster for his wives for ze ozar room. Our visit did not really serve to confirm or dissipate the tales. We, however, observed that a few ruffians freely came in from time to time to share the weed fellowship that was freely available. We observed his security men dealing with a deviant who was thereafter banned from ever setting foot on the republic. It then became clear to an impartial observer that Fela was not just a loud-mouthed critic as most of Nigeria are wont to be, but practiced what he preached.

‘

For me, the most harrowing memories were of that young lady who even at death was still clutching her child, an evidence of that inexplicable bond between mother and child; that young man who had borrowed to restock his shop that morning and who looked totally lost in that viral picture, and the woman who lost his house and two warehouses to the insatiable inferno and who was still wondering whether it was a dream or a reallife experience

Note: The rest of this article continues in the online edition of Business Day @ https://businessday.ng Dr Muo is of the Department of Business Administration, OOU, Ago-Iwoye

Nigeria’s extractive industries at the mercy of cohesive leadership: NDDC, other vehicles failed

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he management of land and natural resources is one of the most critical challenges facing developing countries today.

The exploration and exploitation of valuable natural resources such as oil, gas and minerals, and the accompanying environmental degradation and poor socioeconomic development have often led to violent conflicts in most resourcerich developing countries. It must be admitted that thus far, the narrative about the extractive industries in Nigeria has not been encouraging for the nation’s economy, business expectations and citizen satisfaction.

This is because the extraction of oil and mineral wealth has environmental, social, economic and political impact on host communities. In many instances, these communities do not derive significant sustainable developmental benefits from the wealth extraction activities in their area. The benefits have fewer positive impacts than the negative impacts felt. This has fuelled resistance and confrontations which have transformed into conflicts between the key stakeholders – host communities, extractive companies and government, suggesting the lack, weak or poorly implemented legal framework for extractive industries host, access and impacted communities’ development.

Unlike the narratives of past years, during which freedom fighters like Ken Saro-Wiwa, lost their lives for the cause. In today’s oil and gas sector, blame can hardly be left at the doorsteps of established multinationals that in fact have learnt

hard lessons from the past and now have entire departments in the tens of personnel devoted to community relations and impact assessment.

Now, in addition to less-than-scrupulous members of staff of big business, misguided sons of the soil have resorted to oil theft, vandalism and kidnapping.

Royal “fathers” continue to divide and rule whilst amassing large sums through arm-twisting of legitimate businesses. Government agencies tasked with investment within the communities have turned rouge and indigenous businesses in line with local content and indigenisation policies of the federal government have been given oil mining licenses, have yet to impress as they appear unprepared and ill-equipped with the appropriate internal structures to deal with their host communities.

The attendant result is a chaotic order, what with the amnesty programme of the federal government, a ticking time bomb of poor governance.

While many resource-rich countries have adequately harnessed the wealth obtainable from their natural resources for the benefit of its citizenry, especially their host communities, the same cannot be said to be true about Nigeria, unfortunately. Critically the lack of commitment by business and government to proactively negate environmental degradation which translates to human rights violation, poor health and shorter life spans for the indigenous peoples, and corruption leading to inadequate infrastructure and

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poor living conditions in the region, are a major cause for concern.

The blame game typically centred on the ill-behaviour of the Niger Delta Development Commission (NDDC) has continued. Industry players have likened the NDDC conduct to that of a wolf put in charge of sheep. The vile levels of corruption in that commission needs extensive auditing and a purposefully determined head of service, who would have the will and the ability to use that institution for solving Nigeria’s big problems.

Nigeria is the third largest exporter of crude – also known as liquid gold – in the world, yet World Data Lab’s Poverty Clock places Nigeria’s population as one of the world’s poorest, despite increasing emphasis on capacity building and establishment of policies and strategies such as the Revenue Allocation Formula for Oil-Producing States, the Nigerian Minerals and Mining Act (NMMA) 2007 and the 7 Big Wins Roadmap, amongst others.

A Shell Petroleum Development Company (SPDC) report themed “Security, theft, sabotage and spills”, affirms that security remains a high priority due to continued crude oil theft and criminality in parts of the Niger Delta. The global oil giant maintained that illegal refining of stolen crude and third-party interference are the main sources of pollution in the Niger Delta today and that third-party interference was responsible for about 90 percent of oil spills from SPDC pipelines in 2018 alone.

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It was, therefore, no surprise that Fela had a very large following in Lagos when he floated his Movement of the People (MOP) political party to contest elections. Well, at the end of the day na something killam.

On customer service, one can hardly find any service provider conducting customer satisfaction surveys in our environment. What I have observed from my dealings with many organisations in Nigeria is that most of the workers do not even understand the nexus between their jobs and the achievement of the corporate objectives. The service providers on their own sometimes behave as if they were one a favour. There is a huge gap there and trainers should design appropriate programmes to address them.

Keep telling them, and if they don’t hear you can invoke a benevolent spirit.

Sir Chudi Illoh, Lagos.

Your “other matters” is always very scintillating to me. your gist on a customer worth only a piece of TomTom is very hilarious but you really passed a strong message that banks programme and services should not be limited at the headquarters more so that branches are the places where things are happening. interesting eulogy for Fela I must say more so coming from a man who haven’t visited the shrine for the first time, not sure most regulars at the shrine can pen down all of these for Fela. Ikenna Okonkwo from Abuja.

Fine one on Customer Service Week.

Customers are docile as we do not ask questions on our rights. Our accounts are deducted at will without reasonable explanations. One may think that N20 is insignificant but consider the millions of depositors. Think of what is going on in the electricity supply industry, how the crazy billings have been going on.

So is meter reading at the fuel pumps.

May God help the poor consumers.

John Ibeano, Abuja.

BEKEME MASADE-OLOWOLA While companies lament the billions of dollars spent on community development projects, a visit to many of these communities will leave you wondering where the monies went. Consequently, militancy in the form of pipeline vandalism and resource theft, is still a huge challenge in the Niger Delta till date, despite efforts by the government and other stakeholders to foster peace in the region.

A lack of effective communication and meaningful engagement among stakeholders has been identified as a major cause of the problems in the industry. Therefore, a way to go would be to pursue a participatory development model with a wider range of stakeholders, beyond communities. Such model should be designed through open, transparent dialogue among stakeholders, guided by industry experts, globally recognised thought leaders, civil society organisations and the media, with the key objective to create awareness on the nexus between effective communication, community engagement and peace building on the one hand, and secure stakeholders’ commitment to promote mutually beneficial relations that will lead to an end of insecurity in the industry.

Olowola is the chief executive of CSR-in-action and convener of the Sustainability in Extractive Industries (SITEI) conference

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Thursday 24 October 2019

BUSINESS DAY

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Going round in circles CHRISTOPHER AKOR

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igerians who were of age in 1984 will vividly remember what they went through to get “essential commodities” like rice, milk, sugar, bread, kerosene etc. My parents, for instance, told me of how they queued for days just to get milk, grains, and rice to buy at very exorbitant prices. For cooking, they simply had to resort to using sawdust since it was not possible to get kerosene anywhere to buy. I was told by a senior colleague that because they couldn’t get kerosene in the city, they had to go to villages where sawmills are located just to get sawdust.

Just to rehash, even before overthrowing the rudderless Shagari regime on December 31, 1983, the economy was already in serious decline due to collapse of oil prices and the unbridled corruption of the political elite. Buhari’s immediate tasks were therefore to eradicate corruption and indiscipline and revamp the economy. With the price of oil down and with very little or no foreign exchange or external reserves to import even necessities, the regime sought lines of credit from multilateral agencies.

Buhari was urged to first float the naira, liberalise the economy and allow the private sector to lead the economic revival before securing loans. He stoutly refused. Instead, he rolled out some crude jack-boot policies that further worsened the problem. His way of controlling inflation and steep price rise was to send out soldiers with koboko into the markets to force traders to sell essential commodities at a fixed price regardless of costs.

Of course, prices fell in the first few

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weeks of the coup due to fear of the soldiers and producers and traders took on huge losses. However, as scarcity began to bite, prices went northwards, exceeding their levels before the coup.

Unable to access forex to import raw materials and spare parts to keep factories working, industries closed down and unemployment became rife.

What was more, wages of public sector workers were delayed for several months.

The ultimate result of this archaic strategy was scarcity. Essential commodities that were once readily available were no longer available. Inflation spiked and Nigerians had to queue for days just to buy commodities like milk, rice, sugar, salt etc. at very exorbitant prices.

In a report in the Guardian Newspaper of 26th May 1984, the then Nigerian Grains Board was said to be unable to buy grains “because market prices were higher than what it was allowed to pay”.

Also, the same paper two days earlier reported that the Association of Master Bakers, Confectioners and Caterers were said to have made passionate appeals to the government and suggested ways to end the severe scarcity and rising price of bread. But they were ignored and the problem continued to bite even harder.

In April of 1984, Buhari also ordered the closure of all land borders with neighbouring countries to, according to him, “combat the black market in the country’s currency.” The only time the borders were opened again was in May 1985 to speed the expulsion of aliens (our West African neighbours) – remnants from the millions already expelled by the deposed Shagari regime. Of course, they were blamed for the widespread unemployment and crime in the country.

Meanwhile, as the regime was busy handing down ridiculous sentences of upwards of 100 years to so-called corrupt second republic politicians, it was, through the scarcity it was engendering, opening up a profitable line of corrupt businesses for army officers, their wives and others in privileged positions

to become dealers and smugglers of imported rice and other commodities.

To escape from its economic immobilism, the regime, beginning in December 1984, began counter-trading or trade by barter in order to obtain technology, spare parts and other raw materials. Although it was expedient, the modern trade-by-barter came at a huge cost to the nation.

Nigeria more or less auctioned off its oil for less than its real value.

Expectedly, the usual buyers of its oil demanded to enjoy similar countertrade discounts and this led many of them refusing to lift oil from Nigeria when the regime did not oblige them.

Thus, counter trade, rather than bringing relief, only served to heighten the desperate economic situation. In real terms, social and economic situations continued to deteriorate and wages still went unpaid. It was therefore a relieved nation that welcomed General Babangida when he put an end to the insufferable regime in August 1985.

Fortuitously, Buhari returned to power in 2015 and faced similar situations as he faced in 1984/85. Sadly however, his response has been the same or worse.

To begin with, it was downright dangerous for someone with no real knowledge of the economy and who has shown no evidence of improving his knowledge or skills since being edged out of power in 1985 to want to direct the economy. But urged on by an ignorant and sometimes hypocritical crowd and hangers on and a belief in his messianic status, he proceeded to usurp the powers of the Central Bank and the Monetary Policy Committee to determine the country’s monetary policy.

Like in 1984, he refused all sound entreaties to float the Naira, which will encourage investments, businesses and capital inflow even when it is obvious that the country was in a cul de sac. Despite his filtered speeches on the campaign trail, he has been showing open contempt for private businesses and capital and has stuck to his expired philosophy of statism and belief that

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The ultimate result of this archaic strategy was scarcity.

Essential commodities that were once readily available were no longer available.

Inflation spiked and Nigerians had to queue for days just to buy commodities like milk, rice, sugar, salt etc. at very exorbitant prices

the government alone is capable of developing the country, even with lower oil prices and a revenue crisis threatening to ground the country.

What has been the result? Stagflation – a portmanteau of high inflation, declining economic growth rate and high unemployment. Prices of goods and services have skyrocketed beyond the reach of Nigerians, the economy is shedding jobs at an alarming rate, growth is down to 2.10 percent – the highest in three years but far below population growth, industrial output contracted to 2 percent, business confidence is down to 3.0 percent from 14.9 percent recorded at the third quarter of 2015.

The Naira has plummeted by about 118 percent against the dollar in the past three years, while youth unemployment is at an all-time high of 38 percent. What is more, trust in the government is at an all-time low and all the promising youth are voting with their feet to climes where they could actualise their potentials.

Like in 1984, Buhari has also blamed our neighbours for the smuggling of rice and has shut the borders since August. This has led to the scarcity of rice and other commodities. Naturally, the scarcity has led to a sharp increase in prices of rice and other essential commodities.

The government, on its part, appears to have outsourced its core function of regulation and provision of infrastructure to God, so it seems, while it has taken over those functions proper to the private sector – importation and distribution, buying and selling of petroleum products and other commodities. It is not uncommon therefore, to see the entire bureaucracy of the ministry of petroleum and NNP being reduced to petrol importers and distributors and petrol attendants at the filling stations in times of scarcity!

Like in all systems where the government takes over the functions of the private sector, scarcity and dislocation are the results. We hope Nigerians will not soon begin to queue for days to buy essential commodities?

On Lagos and selective perception

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elective perception is a perceptual process in which a person only perceives what he desires, while ignoring other viewpoints.

Basically, man’s experience impacts his selective perception. People screen out advertisements depending on their beliefs, attitudes, conditioning, habits, usage preferences and others.

In Nigeria, the perception of Lagos State varies from one individual to the other. Some see Lagos as a prime African economic model.

In reality, this perception is not incorrect. From its technology hub ecosystem –Africa’s largest – to its successful banking sector and prosperous film industry, what shrewd entrepreneurs mostly see in Lagos are unlimited investment opportunities.

There are 31 technology hubs in Lagos. The value of innovative tech spaces to Lagos and African economies as a whole is massive. It is agreed that creating smart economies with technology-driven innovative solutions would lead to creation of new jobs that previously never existed.

Lagos is a fertile ground for flagging off innovations. It attracts corporate individuals and organisations that think outside the box. This is why the Lagos State government has resolved to build innovation and technology centres across the state to encourage more people with innovative ideas.

As oppose to critics who see Lagos population as a burden, ORide, a new on-demand motorbike hailing service is creatively latching

on a peculiar need of Lagos residents to create jobs. The ORide service can be accessed in the OPay app currently on Android and IOS. Passengers are taking advantage of up to 90 percent discounts on fares during the current promo, off every trip. ORide is a solution to a myriad of transport challenges, particularly heavy traffic. The service offers flexible payment options including cash, card payment, and payment through the OPay app that allows riders to access promotional offerings.

In Nigeria, Lagos remains a veritable breeding ground for budding sporting talents. Most of the celebrated Nigerian sportsmen began their sporting tutelage in Lagos. Many of the national soccer sensations began their football career in Lagos State.

Lagos is also a hub for the promotion of culture and entertainment. Many young artistes have hit it big in Lagos. Rightly, boosting the state’s creative economy has been ingrained in the pillars of development of successive administrations in the recent years. Of course, the last five months, in particular, has been eventful in terms of drawing global attention to the state’s tourism potentials.

Significantly, Lagos is peaceful for business, work and fun. The state government has been encouraging various groups and communities in the society to dwell together in peace. This is part of what makes Lagos a mini-Nigeria.

Lagos is remarkable for empowerment of the residents. Within four months of the current administration, a sum of N4 billion

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was set aside as grant under the Lagos State Employment Trust Fund (LSETF) W-Initiative, through which about 794 women have been empowered with various sums of money.

To promote public health, a 110-bed Eti-Osa Mother and Child Centre (MCC) was recently as an integral part of activities commemorating the Sanwo-Olu administration’s 100 days in office. Another has just been delivered at Alimosho. This validates the current administration’s determination to ensure unhindered access to quality health care for all residents.

Recall that a free medical initiative tagged “Healthy Bee Project”, a collaborative effort of the state government and a Non-Governmental Organization, BOSKOH Lagos Healthcare Mission International (HMI), recently took medical interventions nooks and crannies of the state.

The 4-week programme, which was aimed at addressing the lack of adequate medical care among citizens of the state, attended to critical medical needs of over 25,000 Lagosians. It is an all-inclusive health programme meant to accentuate the relevance of health in the THEMES Agenda of the present administration six pillars of development.

Presently, the state government is working hard towards the completion of more MCCs in the state. In particular, the Badagry and Epe MCCs are nearing completion.

Obviously, more roads in the state need to be urgently worked on. Government recognises this and has assured that major road repair works will commence immediately

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RASAK MUSBAU the rainy season is over. This is to ensure that resources expended on the process are not wasted. Meanwhile, the Lagos State Public Works Corporation has performed palliative and rehabilitation works on over 150 strategic roads across the state.

It is important to stress that public administration is about planning, organising, directing, coordinating, and controlling of government operations. In the long-term, the priority of the state government to do things as and when appropriate will be rewarding for all Lagosians.

It was Yogi Berra who once said: “If you don’t know where you’re going, you’ll end up somewhere else”. The destination of Babajide SanwoOlu administration is towards the evolvement of greater Lagos. The administration, no doubt, has what it takes to take the state to destination greatness. It is, therefore, irrevocably committed to implementing various programmes to effectively actualise its THEMES agenda.

Musbau is of features unit, Lagos State Ministry of Information and Strategy

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BUSINESS DAY

Thursday 24 October 2019

EDITORIAL PUBLISHER/CEO

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

Bashir Ibrahim Hassan

GM, BUSINESS DEVELOPMENT (South) Ignatius Chukwu HEAD, HUMAN RESOURCES Adeola Obisesan

Nigeria does have a hunger problem

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h e c ha s m b etween Nigerians and their elected or appointed government officials, who live in a different reality, appears to be widening. While ordinary Nigerians, backed by globally validated data, complain about excruciating poverty and dysfunctional infrastructure and institutions, the leadership seems to believe everything is well and the country has never had it so good. The gap will widen further following the president’s rejection of data from multilateral organisations while charging the Economic Advisory Council to generate Nigeria’s own data.

Last week, the disconnect came into sharper focus when the minister of Agriculture, Sabo Nanono, denied the prevalence of hunger in Nigeria, insisting that the country has attained food self-sufficiency and even export to neighbouring countries.

“I think we are producing enough to feed ourselves. I think there is no hunger in Nigeria; there could be inconveniences.

When people talk about

hunger in this government, I just laugh.” Continuing he denied the reality of food inflation. “In this country, it is fairly cheap to buy food,” Nanono concluded.

Perhaps we need to remind the honourable minister that Nigeria has been rated the poverty capital of the world with over 90 million Nigerians in extreme poverty. Food inflation has been one of the factors pushing many Nigerians into extreme poverty. Food inflation has been at double digits since 2016, reaching a peak of 20.32 percent in September 2017. It currently stands at 13.51 percent according to the National Bureau of Statistics. More so, according to the Central Bank of Nigeria, an average household in Nigeria spends about 73 percent of their income on food and beverages.

This is certainly not a country where there is no hunger and where food is cheap. It shows people struggling to survive and perhaps, the minister also needs to know that the United States Agency for International Development (USAID) and the United Nations Children’s Fund (UNICEF) data indicate that 37 percent of children

under 5 years suffer from severe acute malnutrition and are stunted – the second highest rate of stunted children in the world.

Also, Boko Haram insurgency in the country has led to a large number of displaced people without access to food. It is estimated that about 8.5 million people are in need of humanitarian assistance, especially food, in Nigeria and majority are in the northeastern part of the country.

Worse, beyond the rate of displacement, about 5.1 million Nigerians are malnourished.

In Borno state, for instance, 64.2 percent of households are food insecure. In July 2017, the federal government declared a state of food and nutrition emergency in Borno. There has been absolutely no progress in addressing the problem.

This is not excluding the hundreds of thousands of internally displaced persons (IDPs) in camps all over the northeast and other parts of the country dying daily of hunger. Added to this, they are being mindlessly exploited (sexually and otherwise) in exchange for a morsel of bread.

But the minister is not alone. It is a trait with this administration. Last time, it was the former minister of health, professor of medicine, Isaac Adewole, who said Nigeria doesn’t have shortage of doctors and that it can’t even train all its doctors, therefore, advising some to take to tailoring, business and politics.

At another time, another medical doctor and minister of labour and productivity denied the obvious shortages of doctors in Nigeria, saying instead that Nigeria does, in fact, have excess supply of doctors and that’s why they are exporting doctors to other countries.

The government cannot continue to peddle and believe its own facts different from what is real and acceptable world-wide. Granted the government is desperate to sell itself and trumpet its achievements, it must be guided by respect for concrete facts and data available .

It must stop the constant embarrassment it causes the countr y by peddling rumours, half-truths and sometimes outright lies, just to present itself as making progress.

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BUSINESS DAY

Thursday 24 October 2019

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Home trouble in big palaces THE PUBLIC SPHERE

CHIDO NWAKANMA

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illage things and village people are performing theatrical exhibitions in the presidential and gubernatorial palaces of the powerful. They are replicating village behaviours. They are fighting over communal property, access, and laying down the path to dictatorship.

Villages are the home place of parables. It is best to share these tales through that time-tested tradition. Self-inflicted home trouble assails the many palaces of our land.

Various genres of theatre continue to play out in the high areas of our country to the disappointment of citizens. It would have been funny if it were not so sad.

Unfortunately, citizens joined in the performances either for comic relief or in the manner of if you cannot beat them you join them.

Command performances with different characters have held in the nation’s premier palace. There was a skit about a wedding. The hilarity on the street was loud and unre-

strained. While it lasted, persons to stop it with the armour of fact and truth played safe. They spoke after-the-fact!

Maybe it was just as well and in the best traditions of Machiavellianism. The Italian strategist is on record as advising leaders to create diversions that would occupy citizens. There would seem to be no better time to do so as when proposals and threats undermining the pockets and wellbeing of those citizens are flying forth from MDAs. The skit occupied both the chattering and thinking classes from the evidence on media platforms.

Everyone had a wild time playing guest and mimicking our wedding traditions.

The vaudeville continued to play out in the Big Palace with the release of candid-camera videos and interviews on foreign media.

The cousin-in-law sought to establish a claim to part of the palace in traditional homestead behaviour.

The reverberations are still abroad.

It fetched a gift of an unconstitutional office with no fewer than six additional aides for the Spouse of the nation.

Much more dramatic events of a sad genre continued to play out in the states. Many of the monarchs in the palaces of the semi-sovereigns displayed a readiness to copy the disdain for the rule of law and atavism. They replicated the statement of the French king that “the state

is mine.”

In God’s own state, a young man fearful for his life deployed the tools of the modern age to capture the vile threats of a close aide to the monarch. The aide threatened to make him disappear if he as much as says one more word askance against the power holder. The threat came at a time when the smell of the principal city of the state was threatening to cloud all the activities of the lead actor. It was the outcome of village fervour gone overboard in dealing with city matters.

In the nearby land of Canaan, the lead actor took matters into his hands. He would not stomach any criticism of any kind and thus involved a willing security apparatus in imprisoning a professional storyteller even before the pronouncement of the court. Now saying a negative word amounts to treason in Nigeria, 35 years after the King of the Hill made such a faux-pas the law of the land.

The tragic drama continued in the palace a heartbeat away from the Main Theatre. The tragedy here involves two cooperative arms of government. Even after a courtordered enquiry returned a verdict of not guilty, the minions in the Assembly ignored law and convention to push a deputy out on the streets.

Now they stand accused of shooting the deputy!

In the exercise of puny power and urge to satisfy the new Emperor

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Nepotism, vaudeville, disrespect for law and order, bad examples and inappropriate behaviour are standard features of the many palaces of our land. It is not fitting

he recent and the 10th edition of the Lagos State Man of the Year award was with glamour and the most intensely competed for among the series. Series of messages were circulated by people canvassing for votes for the nominees.

The award which is being organised and collated by the Centre for Policy Development and Political Studies is witnessing increasing awareness and participation.

Then total participating votes increased from 16,181 in 2017 to 53,893 valid votes in 2018, and to 61,894 valid votes in 2019.

According to the organisers, the award is to identify, recognise and project genuine role models in the Centre of Excellence.

The composition of the 2019 nominees for the award is not different from the previous one with most of the nominees from the Lagos state ministries, parastatals or government agencies. However, the glamour that generated interest and momentum that led 61,894 Nigerians to incurred cost and voted for the nominees of their choice shows that that award is gaining traction and could be a platform for rewarding excellence if sustained.

The award that had among the past winners, AbdulHakeem AbdulLateef of the Lagos ministry for Home Affairs, Adebola Akindele of Courtville Business Solutions, Hakeem Bamidele of the UACN properties and George Noah of the Lagos state signage and advertising agency is becoming an annual reckoning event for the reward of services to the Lagosians and Nigerians at large.

This year nomination had an extensive coverage which include Tajudeen Obasa of the Federal House of Representative, Hakeem Muri-Okunola, the Lagos state head of service, Kolade Alabi, the chairman

of Bariga LCDA, Tunde Fanimokun, the president of Eko club, Tunde Afolabi, the chairman AMNI International Petroleum Limited, Akinwunmi Odemakinde, the GMD of Deltatek group, Adejuwon Dada, the MD/ CEO of the Federal Medical Centre, Ebute Metta, Adetola EmmanuelKing, the GMD of Adron Homes and Properties Limited, Nnamdi Ezeigbo, the Owner of Slots Nigeria and Tayo Oviosu, the CEO of Page.

The 2019 Lagos State Man of the Year was a keenly contested award because without doubt the personalities nominated have made marks in their chosen careers and occupied positions of influence in their various organisations. The voting is expected to be a game of the throne of the status and influence of the nominees given that it is voluntary and will cost the voters money to exercise their franchise, at least a text message charge by the network operators is the permanent voter’s card for the exercise.

One would have expected the trend for the 2018 edition where AbdulHakeem, a sitting commissioner at the Lagos state ministry of Home Affairs took other nominees to the cleaners by getting 41, 415 votes of the 53, 893 of the total valid votes casted. It is not out of statistical order to predict that an employee of the Lagos state will win the 2019 edition given the 76.9 percent landslide win by the commissioner for Home Affairs in 2018.

Alas, the assumption was proven wrong with the emergence of Adetola Emmanuelking, the GMD of Adron Homes and Properties Limited, a private and leading real estate company as the winner of the 2019 Lagos State Man of the Year.

On the strength of the voters’ population, one would have expected the pendulum to

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swing in the favour of Hakeem Muri-Okunola given the potential votes from the Lagos state civil servants which are over 100,000.

The workforce of Muri-Okunola is more than the total votes of 61,894 recorded for all the nominees. Hence, the Lagos state head of the service should have been the winner if it is a game of position.

The private sectors are the drivers of the economy, not the government. It is, therefore, an encouragement that a man who is not in the government is the Lagos State Man of the Year as it were two years ago. There is a likelihood that the votes are based on the influence and the impact the winner has on the voters for them to have parted with their time and money to be part of the exercise.

Adetola EmmanualKing is, no doubt a trailblazer. Hitherto, the purchase of land has been a capital project which requires years of hard work, discipline to save from one’s income and luck to acquire property without encumbrance. Adetola and his team at Adron Homes have commoditised the purchase of land and made available to the average Nigerians across the spectrum with the introduction of the weekly, monthly and daily payments for land as well as preventing buyers from land grabbers known as “Omo-Onile”. The Nigerians in the diaspora are of no exception to the efficacy of the Adron Homes’ services as this group have been saved from the unscrupulous family members who siphoned their hard-earned income in the name of building houses for them.

Aside, his business impact, Adetola’s influence that made him the Lagos State Man of the Year is likely from the effects of Adron Homes’ policies and her social responsibility projects. One of the projects

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of no clothes, they willingly created a case study and template of impunity. Who can hold me accountable is the arrogant disposition of the ruler of this kingdom. He is the new Ozymandias. Like Ozymandias, all of them seem to be saying, “My name is Ozymandias, king of kings: Look on my works, ye Mighty, and despair!”

Percy Bysshe Shelley’s poem “Ozymandias” speaks to the futility of power and human efforts to immortalise the powerful. Ozymandias is the title of the Egyptian king Rameses who tried to memorialise himself with a statue. The ruins of the figure in just a few years intrigue the poet as well as the narrator telling him the story.

Ozymandias is a fitting point of emphasis for this parable. History bears out the futility of all attempts to play the divine by holders of temporary power. Nepotism at the seat of power almost always breeds contempt for proper conduct, then shame and despair. Nepotism, vaudeville, disrespect for law and order, bad examples and inappropriate behaviour are standard features of the many palaces of our land. It is not fitting.

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

Lagos state man of the year: Position or influence?

T

13

POSITIVE GROWTH WITH BABS

BABS OLUGBEMI is the Adron Games, an annual event in its fourth year. This event encourages the staff of the company, the students of higher institutions to show their sporting talents with notable stars like Victor Ikpeba, Aisha Falode, Peter Rufai, and Mary Onyali seated as the ambassadors for the event. Recently some young and undergraduates’ landlords were recognised and rewarded by Adrons Homes. Adetola EmmanuelKing also donated a multi-million-naira museum and park to Ode-Remo, a town in Ogun State.

The real estate mogul and the winner of the 2019 Lagos State Man of the Year has been seen giving lectures on housing deficits, how to prevent the epidemic collapse of buildings as part of his role as an industry leader. Therefore, 2019 contest for the Lagos State Man of the Year was not a game of position, but that of influence given the scenario analysed above, and more of such impact that led to the emergence of Adetola EmmanuelKing as the winner is required from business leaders especially the private sectors if real productivity and leadership instincts are being rewarded.

Olugbemi FCCA, the Chief Responsibility Officer at Mentoras Leadership Limited and Founder, the Positive Growth Africa. He can be reached on babs@babsolugbemi.org or 08025489396.

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14

Thursday 24 October 2019

BUSINESS DAY

COMPANIES & MARKETS

COMPANY NEWS ANALYSIS INSIGHT

Agriculture

Okomu’s domestic sales hit first 2019 rise on oil palm import restrictions OLUWASEGUN OLAKOYENIKAN

O

komu Oil Plc, Nigeria’s most capitalised oil palm maker, has a lot to cheer about despite declined profit growth, as recent government pronouncements on the importation of palm oil combined with border closure with neighbouring countries are helping the oil maker increase local sales.

Revenue of the Edobased oil palm maker in the first nine months of this year slumped marginally by 6.8 percent to N15.5 billion, no thanks to declines in domestic sales in the first two quarters of 2019. However, with N6.97 billion recorded as revenue between July and September of this year, the company almost doubled sales when compared with N3.74 billion achieved in the corresponding period of 2018.

A breakdown of the figures showed that the increase was largely driven by a 89 percent surge in local sales to N5.95 billion from N3.14 billion, and supported by export sales which rose to N1.02 billion from N598 million in the period.

From the world’s largest exporter of oil palm in the late ’50s and ’60s, Nigeria spends close to $500 million on the importation of the commodity annually, according to Central Bank

governor Godwin Emefiele.

While the importation was to meet the increasing local demands, it negatively impacted the performance of local oil palm producers Okomu and other oil palm makers benefited from the blacklisting of some 41 items including palm oil by the Central Bank of Nigeria in 2016 when dollar shortage fostered local demand of the agro-product. But the gains were short-lived as the palm oil makers were faced with fresh challenges – robust dollar reserves follow-

ing improvements in crude oil prices and smuggling activities across Nigeria’s porous borders.

To this end, Okumoil plc witnessed a 42.5 percent decline in revenue growth to N4.22 billion from N7.34 billion in the first quarter of 2019, and the trend was extended to the second quarter of the year with a 22.4 percent slump in revenue to N4.34 billion from N5.59 billion.

To curb oil palm importation, which was aberrantly affecting local producers,

President Muhammadu Buhari in June directed CBN to blacklist any firm caught smuggling or dumping palm oil into the country from all banking businesses as well as the foreign exchange market. This pronouncement was followed up with a partial border closure in August thereby bolstering local demands again.

“There was a loosening of the grip by illegal imports when the borders were closed,” Graham Hefer, Managing Director of Okomu Oil Palm, told BusinessDay.

“This allowed us to market our products more easily.”

Okomu’s net operating expenses, which factored in costs associated with operation such as inventory costs, employee benefits, marketing expenses, among others, grew by more than double to N3.43 billion between July and September 2019.

This worsened the company’s net operating expenses for the first nine months of this year to N7.39 billion compared with N5.63 billion recorded in the same period of 2018.

As a result, after-tax profit for the nine months stood at N4.11 billion, this is almost halved N7.24 billion net income recorded a year earlier.

However, on a quarteron-quarter basis, the impressive growth in revenue impacted positively on the company’s bottom line as net profit rose to N1.58 billion in the third quarter of the year, this represents a 21 percent increase from the same period in 2018.

Meanwhile, Okomu recently reached an arrangement with Edo State Government in a bid to create employment opportunities and ramp up agricultural output. The company also disclosed plans to cultivate 5, 000 hectares oil palm in the state, adding that it’s poised to creating a more sustainable oil palm growth and practice.

Okomu shares closed unchanged at N54.95 per share after the close of business on the Nigerian Stock Exchange (NSE) on Tuesday. This is 36.8 percent near its 52-week low of N40.15.

The principal activities of the palm oil manufacturer are the development of oil palm plantation, palm, oil milling, palm kernel processing, and the development of rubber plantation.

The company’s products include palm oil, palm kernel oil, palm kernel cake, Banga (package) and rubber cup lumps.

INSURANCE

Anchor Insurance records N3.4bn gross written premium, pays 2 Kobo dividend MODESTUS ANAESORONYE

U

nderwriting firm, Anchor Insurance Company L imite d during the 2018 financial recorded a gross written premium of N3.4 billion despite the challenging business environment that impacted heavily on the industry.

This represents 54.38 per cent growth over N2.2 billion recorded in 2017 and the first of its kind, since the company was established in the past 30 years.

The company, during

the meeting also ratified a dividend of 2 Kobo per ordinary shares to reward shareholders while promising to ensure a geometric improvement in the different relevant indices come 2019.

Elijah Akpan, chairman, Board of Directors of the company made the disclosure at its 29th Annual General Meeting (AGM), held in Uyo, Akwa Ibom State Akpan, during the review of the company’s business performance in the outgone year, attributed the successes to team work and

determination of workers “to change the age-long premium narrative, review marketing strategy by the new management, injection of fresh ideas and added efforts by the new hands that joined the system.”

He said “Anchor Insurance, in a bid to make a difference, also recorded positive headways in 2018 to include net premium of N2.8 billion against N2 billion in 2017, showing 41.6 per cent improvement over the performance in the corresponding year, while investment and incomes hopped from N229.4

millionin 2017 to N244.9 million in 2018, indicating 6.75 per cent rise over the performance in 2017.

Profit before tax also rose to N220.2 million in 2018 from N180.3 million in 2017, representing 22.12 per cent increase over 2017, while profit after tax stood at 22.87 per cent from N133.3 million in 2017 to N163.8 million in 2018, total assets experienced 5.37 per cent rise from N6.2bn in 2017 to N6.6bn in 2018 and shareholders’ fund rose to N5.2bn in 2018 from N5.1bn, showing 1.67 per cent increase respectively.

The Chairman maintained that propelled by the Company’s pay-off ‘where insurance works,’’ the Company responded to claims request by paying N816.9 million to genuine claimants in 2018 against N540.2 million in 2017, indicating 51.2 per cent show of strength.

In addition to the above achievements, Akpan stated that the company commissioned and opened Anchor Insurance MultiPurpose Building in Uyo, appointed a new Executive Director, Technical and engaged Head, Claims/

Re-Insurance, which has ensued in the tremendous improvement of underwriting/claims administration amongst others.

While assuring that 2019 would be more fruitful considering the achievements so far recorded, he called for all hands to be on deck to realize the recapitalization of the company for big ticket businesses.

He added that the company would invest more on the Anchor brand repositioning project and expand products basket to open rooms for additional income.

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

Thursday 24 October 2019

COMPANIES&MARKETS

BUSINESS DAY

15

Business Event

MANUFACTURING

CAP 9-month profit sees marginally decline on slower sales SEGUN ADAMS

T

he maker of Dulux and Caplux paint brands, Chemical and Allied Products (CAP) is not having a colourful year so far, with ninemonth profit barely growing after sales dropped in the three quarters that ended in September.

CAP reported a profit of N1.23 billion in nine months of 2019, 0.2 percent more than was seen in the corresponding period of 2018.

This contrast with the double-digit growth in profit last year, helped by a low base, as CAP ended a spell of profit decline in nine-month periods of 2016 and 2017, coinciding with Nigeria’s fall into and emerged from economic recession.

Revenue in the latest reported period slowed to 7 percent, down from 10 percent seen in nine months to September as the noted N5.78 billion manufacturer.

Gross margin, which is how much a company makes from every N100 sales, remained at 48 percent from last year, implying that CAP’s direct cost per N100 stood at N52 in both years.

A company’s gross profit also called top-line is realised after direct cost of production is accounted for.

Selling and distribution expenses rose by almost 68 percent to N366 million and administrative expense grew by nearly 19 percent to N960 million, while other income for CAP advanced by 20 percent approximately to N54 million.

Operating profit, a profit from business operations before deduction of interest and taxes, declined 6.75 percent to N1.48 billion.

Finance income rose by about 50 percent to N327 million and the cost of borrowing fell 86.7 percent to N434,000 in the nine months ended September 30.

Consequently, net fi-

nance income surged 51 percent more than N215.6 million seen last year.

CAP’s profit before tax grew marginally to N1.8 billion while an uptick in tax expenses to N577.97 million resulted in a profit of N1.23 billion, earnings per share of N1.75 kobo.

The performance meant that CAP made N21 from each of its N100 sales, which is a net margin of 2 percent points or N2 less than in 2018.

Shares of CAP remained flat at N25.55 per share on the Nigerian Stock Exchange (NSE). The company’s shares have declined 26.69 percent since the start of the year amid widespread pessimism in the equity market.

Chemical and Allied Products Plc manufactures and distributes paints, personal and household products, crop protection and public health products. The company further provides decorating and renovating services.

L-R: Patrick Olowokere, corporate communications/ brand PR manager; Sade Morgan, corporate affairs director, and Chukwuemeka Aniukwu, media relations manager, all of Nigerian Breweries Plc, at the parley between Nigerian Breweries Plc and media stakeholders in Lagos

L-R: Mitchell Elegbe, Keynote speaker/GMD/CEO, Interswitch; Sam Amuka, publisher, Vanguard Newspapers; Tunji Olugbodi, convener/executive vice chairman, Verdant Zeal Group, and Femi Oyewole, chairman, Verdant Zeal, at the 8th edition of Innovation series in Lagos.

Pic by Pius Okeosisi

COMPANY RELEASE

Page Financials Bags two prestigious awards at BusinessDay’s 2019 BAFI Awards

P

age Financials, a f o re m o st f inancial services provider in Lagos Nigeria, popularly known for providing quick loans of up to N5 Million in less than 3 hours to salary earners, has just been awarded the ‘Most Innovative Consumer Lender of the Year,’ and the ‘Consumer Finance Brand of The Year 2019’ at the just concluded BusinessDay’s Banks’ and other Financial Institutions (BAFI) Awards, held on the 19th of October 2019 at Intercontinental Hotel, Lagos.

The BAFI Awards organised by one of West Africa’s most authoritative media organization, brings together super-achieving deposit, merchant, investment, microfi-

nance banks and other financial institutions to celebrate their contributions, as well as that of individuals in the industry, to Nigeria’s economy.

Page Financials’ awards are in recognition of her strategic and innovative approach to customer problem solving in the consumer lending space, which has directly contributed the company’s steady positive growth over the years.

Recipients of other awards in other categories include Zenith Bank, STL Trustees, FBN Holdings and UBA to name a few.

The Company’s CEO, Segun Akintemi, received the two awards on behalf of the organization, he expressed elation while remarking that innovation is the bedrock of

the company’s vision.

He added “we will continue to champion the cause of making loans and investments convenient and easily accessible to Nigerians using technology.”

Earlier this month, Page Financials was also recognized at the 5th Annual Finance Innovations Awards (NFIA), as the Consumer Finance Provide of the Year 2019, the CEO Segun Akintemi, was also awarded the Finance CEO of the Year for his outstanding leadership qualities and achievements in the Financial services sector in Nigeria.

The company is committed to making access to finance quick and easy in Nigeria, while driving innovation in its service delivery.

www.businessday.ng

L-R: Patrick Anegbe, MD, Intercontinental Distillers Limited; Solomon Umerah, MD, Divine Chinoz Enterprise & IDL›s No 2 Customer; Yemisi Adewusi, MD, Ytt Enterprise Ltd & IDL›s No1 Customer; Hope Gbagi, head of sales; Umoren Akpan, GM, audit/Control, at the presentation of buses to the winners during the company›s distributors award in Lagos

L-R: Taiwo Oluboyede, project director, #IAMBRANDNIGERIA, organisers of the Guinness World Record for the largest serve of Jollof Rice; Sulamite Olufunke Adebolu, Lagos State commissioner for tourism, art & culture; Bunmi Oke, CEO, Ladybird Advertising, Consultant, and Comfort Nor of APCON, during a courtesy visit to Olufunke Adebolu as part of critical stakeholder’s engagement towards the world record in Lagos

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16

Thursday 24 October 2019

BUSINESS DAY

COMPANIES&MARKETS

Business Event

COMPANY RELEASE

Accountability lab opens applications to Nigerians for ‘Incubator 2020’ TEMITAYO AYETOTO

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pplication is currently open to Nigerians interested in joining Accountability Lab’s incubator programme for 2020.

The Incubator is the Lab’s flagship program for young civil society leaders to build sustainable and effective tools for accountability, participation and social impact in their societies.

Selected ‘accountapreneurs’ will undergo an accelerated one-year program with hands-on, comprehensive support for their ideas and initiatives.

The programme provides mentorship, fundraising and management support as well as access to a global network of leading institutions, foundations and donors.

The overall objective of the Incubator is to support indi-

viduals to strengthen accountability and support better governance in their countries at a local and national level.

In Nigeria, the focus areas are extractives, education and health. Women and young leaders from diverse backgrounds are especially encouraged to apply.

Odeh Friday, country director of Accountability Lab Nigeria, said that ”the lack of accountability in the extractives, education and health sector is a huge deficit for Nigerians and it is so alarming. Nigeria is not only losing financial revenues but also, the future of young Nigerians and generations unborn are now threatened by this anomaly in these key sectors,” he said in a statement. “Thus, the focus of this year’s accountability incubator edition is to address these accountability gaps through innovations led by women and young changemakers in Nigeria.”

The program is also active in Mali, Liberia, Nepal and Pakistan and the structure of the (AL).

The Incubator is the same globally but localised by the country teams according to their context and needs. Participants form part of a global network of change-makers.

Applications for the Incubator closes on October 31, 2019.

The Accountability Lab makes governance work for people everywhere by supporting active citizens, responsible leaders and accountable institutions. “We are reimagining how to build accountability to support a world in which resources are used wisely, decisions benefit everyone fairly, and people lead secure lives. We know there are no quick fixes, and this will be a generational change in partnership with many others – so we’re in it for the long haul,” AL in the statement.

L-R: Israel Eboh, president, National Association of Nigerian Theatre Arts Practitioners; Reginald Okeya, director, MTN Foundation; Aishatu P. Sadauki, director, MTN Foundation; Dennis Okoro, director, MTN Foundation, and Olumide Erinle, representative of the commissioner of education for Lagos State, at the opening of the MTN Foundation sponsored 38th Nigerian University Theatre Arts Festival held at the National Arts Theatre, Lagos

L-R: Bodunrin Olowolagba, sales manager, British Airways; Temitayo Shittu, Airline relationship manager, Travelstart; Suleiman Ibrahim, MD, Ibbsa Travels; Joy Idehen, corporate desk assistant manager, Quantum Travel, and Alkali Habib, MD, Hinterland Travels and Tours, at the familiarization trip with top travel partners at the British Airways First Class Lounge, Heathrow Airport.

L-R: Iyke Okoroafor, technical manager, Dizengoff Nigeria; Guy Rabinovich, GM, technology & innovation, Dizengoff Nigeria; Temidayo Johnson, sales manager, Dizengoff Nigeria; Graham Leslie, country manager, Dizengoff Nigeria, and Ales Suster, customer relations, Spica Technology, during a brand interactive session with Technology and human resource managers on Spica Time & Attendance solution in Lagos recently.

L-R: Gbolahan Afolayan, trade and regulatory manager, Guinness Nigeria Plc; Kayode Ebatamehi, MD, Bluebird Communications; Dodoyi West, deputy director, NAFDAC Food Inspection; Patrick Anegbe, president, Distillers and Blenders Association of Nigeria; Karimu Oluwatoyin, assistant director, Federal Ministry of Health; Mobolaji Alalade, head of marketing, Intercontinental Distillers Limited; John Ichue, executive secretary, DIBAN, and Kemi Oladipo, principal, scientific officer, Federal Competition & Consumer Protection Commission, at a stakeholders meeting to discuss the campaign against irresponsible drinking and underage drinking in Lagos www.businessday.ng

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Thursday 24 October 2019

BUSINESS DAY

Investor

17

In association with

Helping you to build wealth & make wise decisions Market capitalisation

NSE All Share Index

NSE Premium Index

N11.721 trillion

Week open (11– 10–19)

31,924.51 26,533.78

N12.917 trillion

2,206.54

Week close (18– 10–19)

26,448.62

N12.875 trillion

2,198.70

Year Open

Percentage change (WoW) Percentage change (YTD)

-0.32 -15.85

2,241.37

-0.36 0.17

The NSE-Main Board

1,456.29 1,072.28 1,069.27

-0.28 -25.74

NSE ASeM Index

NSE 30 Index

NSE Banking Index

NSE Insurance Index NSE Consumer Goods Index NSE Oil/Gas Index

130.95

723.46

NSE Lotus II

NSE Ind. Goods Index

NSE Pension Index

291.84

2,272.45

1,254.54

1,212.79

801.09

1,438.19

426.64

774.30

1,078.00 1,069.31

325.81

118.46

511.65

225.75

1,679.73

1,056.07

954.62

319.29

121.27

512.26

225.25

1,687.53

1,052.78

944.83

-2.00

2.37

0.12

774.30

0.00 -2.46

-0.81 -24.55

-19.97

-4.12

-31.59

-0.22

0.46

-0.31

-1.03

-25.47

-24.46

-14.95

-21.75

Cornerstone, Cutix, PZ, Chams, UAC, 18 others caused NSE’s negative close

…analysts say unimpressive macro-economic environment impacting stocks Iheanyi Nwachukwu

T

he Nigerian stock market closed in red last week as investors moved to reduce their holdings in many stocks which impacted negatively on their prices.

Top on the list of most affected stocks are Cornerstone Insurance Plc, Cutix Plc, PZ Cussons Plc, Chams Plc and UAC of Nigeria Plc. Nineteen (19) equities appreciated in price last week lower than 20 in the preceding week, while 23 equities depreciated in price, lower than 33 equities in the preceding week. The market closed with 124 equities unchanged, higher than 113 equities that remained unchanged in the preceding week.

Cornerstone Insurance Plc which opened the review week at 39kobo decreased to 32kobo, after losing 7kobo or 17.95percent. Cutix Plc followed from week-open high of N1.50 to close at N1.31, losing 19kobo or 12.67percent.

P Z Cussons Nigeria Plc had declined from N6.30 to N5.55, losing 75kobo or 11.90percent. Chams Plc dipped from 26kobo to 23kobo, losing 3kobo or 11.54percent. UACN Plc was also down week-on-week (wow) from N7.15 to N6.40, losing 75kobo or 10.49percent.

“Investor sentiment continues to be negatively affected by the unimpressive macro-economic environment. However, we believe current price levels offer good entry point for mid/long term investors”,

L-R: Jalo Waziri, managing director, Central Securities Clearing System; Mary Uduk, acting director general, Securities and Exchange Commission, and Bola Ajomole, managing director, NASD plc, during an Interactive Session with the Senate Committee on Capital Market at the National Assembly in Abuja.

Vetiva research analysts said in their October 21 note to investors.

“We expect the index to continue to ramble in the negative territory.

Our pessimism is on the back of the absence of any indicator to suggest possible triggers for a rebound in the near term”, said Lagos-based Afrinvest research analysts.

“We expect the equities market to remain lukewarm, as a weak macro environment continues to fuel skepticism of investors. However, we expect possible inflows of earnings reports to spur movement in some fundamentally sound stocks”, United

www.businessday.ng

Capital research stated in their most recent investment views.

UACN Property Development Company Plc lost 11kobo or 9.91percent last week, after moving down from N1.11 to N1. Glaxo Smithkline Consumer Nigeria Plc declined from N7.10 to N6.40, losing 70kobo or 9.86percent. Learn Africa Plc was also down from N1.23 to N1.11, losing 12kobo or 9.76percent.

Vitafoam Nigeria Plc declined from N3.90 to N3.52, losing 38kobo or 9.74percent. Global Spectrum Energy Services Plc lost 50kobo or 9.62percent, from N5.20 to N4.70.

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Some investors in most of these stocks that recorded decline moved to take profit from their recent gains on the back of the absence of indicators that suggest possible rallies in the near term.

In the trading week ended Friday October 18 the market was down by 0.32percent. Last week’s record negative was mainly due to sell offs in mid/large cap stocks. This trend is expected to moderate this week as investors see opportunities for bargain hunting in fundamentally sound stocks particularly as the third-quarter (Q3) earnings trickle

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in at the Exchange.

The stock market which opened the review week with All Share Index (ASI) and market capitalisation at 26,533.78 points and N12.917 trillion respectively, closed the review week with ASI at 26,448.62 points and market cap of N12.875trillion.

The value of listed equities on the Nigerian Stock Exchange (NSE) decreased by about N42billion.

All the NSE sectoral indices closed in the red except the NSE Consumer Good Index (+0.12percent) and NSE Insurance Index (+2.37percent).

Others are: NSE 30 Index (-0.81percent), NSE Banking Index (-2percent), NSE Industrial Goods Index (-0.31percent), NSE Oil & Gas Index (-0.22percent), and NSE Pension Index (-1.03percent).

In the review trading week, the stock market recorded turnover of 896.610 million shares worth N16.561 billion in 12,638 deals in contrast to a total of 1.409 billion shares valued at N31.959 billion that exchanged hands the preceding week in 13,616 deals.

The Financial Services industry (measured by volume) led the activity chart with 597.154 million shares valued at N6.721 billion traded in 7,197 deals; thus contributing 66.60percent and 40.58percent to the total equity turnover volume and value respectively.

The Consumer Goods industry followed with 102.130 million shares worth N7.214 billion in 2,027 deals; and Service industry with a turnover of 84.001 million shares worth N377,017 million in 264 deals.

18

Thursday 24 October 2019

BUSINESS DAY

Investor Helping you to build wealth & make wise decisions

United Capital Investment Views

Equity market: Inflows of earnings reports to spur movement in fundamentally sound stocks

I

n the previous week, the performance of the equities market was largely bearish, as four out of five trading days recorded losses.

The Nigerian Stock Exchange (NSE) All Share Index (ASI) declined by 32 basis points (bps) week-on-week (w/w), to close at 26,448.6 points, with the year-to-date (YtD) loss settling at -15.9percent.

Also, market capitalisation shed about N41.5billion worth of value, closing the review week at N12.9trillion. In terms of market activity, participation levels were lackluster, as average value and volumes traded reduced by 48.2percent and 36.2percent, to N3.3billion and 179.3million respectively.

Analysing the performance of the major sectors we cover showed mixed results, as two sectors out of the five sectors recorded gains, with the remaining receding.

The Insurance sector (+2.4percent) led the gainers’ team, as sector heavyweights, MANSARD (+6.3percent) and CONTINSURE (+2.2percent), edged upwards.

The Consumer goods sector (+0.1percent) followed a similar trend, as NESTLE (+ 0.4percent) and FLOURMILL (+2.3percent) supported the uptick. On the other hand, the Banking sector (-2percent) led the losing team, with major stocks such as GUARANTY (-1.8percent), FBNH (- 1.9percent) and ZENITHBANK (-2.8percent) driving the index down.

In addition, the Industrial goods (-0.3percent) and Oil & Gas (-0.2percent) sectors were dragged by losses in WAPCO (-5.3percent) and OANDO (-2percent) respectively.

Notably, GUARANTY released its 9M-19 earnings result, with gross earnings falling by 3.3percent to N326billion, while profit before tax increased by 3.9percent to N170.7billion.

Investor sentiment re m a i n e d w e a k , s h o w n by a market breadth of 0.9x (previously 0.6x), as 19 stocks advanced, and 21 stocks declined.

This week, we expect the equities market to remain lukewarm, as a weak macro

environment continues to fuel skepticism of investors.

However, we expect possible inflows of earnings reports to spur movement in some fundamentally sound stocks.

Money Market: Second consecutive N1trillion demand for 364-day OMO bill Liquidity position in the money market space remained buoyant, as overall inflows for the week mildly outweighed the outflows. Liquidity level tightened at the start of the week, dragged by the weekly wholesale FX funding sales.

However, a position improved on Tuesday and Wednesday, buoyed by statutory inflows, FX auction refunds, and CRR refunds (circa N200billion) to banks penalised for failure to meet minimum loanto-deposits ratio target of 60percent, between 26th (initial calculation date) and 30th September (the actual cutoff date). Meanwhile, inflows from NTB maturity on Wednesday were rolled over.

Liquidity position tightened o n Thu r s d ay a s ma rke t players submitted bids worth N1.1trillion at the OMO auction

by the CBN which outweighed the N464billion OMO maturity.

The underwhelming level of allotment at the OMO auction buoyed liquidity position by end of the week. In all, average interbank funding rates Open Buy Back (OBB) and Over Night (O/N) rates closed the week at 5.5percent level – lower compared the prior Friday’s 11.9percent.

At the primary market segment, while the FG was able to roll over all maturing treasury bills (N121.9billion), the CBN only mopped-up 90.7percent of the OMO maturity that came in on Thursday. Also, while stop rates at the NTB auction decreased across the board (91-day: 10.80percent; 182day: 11percent and 364-day: 12.94percent; compared to 11.08percent, 11.60percent, and 13.20percent respectively previously), the CBN only dropped stop rate for the 364-day OMO bills by 4bps to 13.35percent.

In line with recent trends, demand at the respective auction remained strong for the www.businessday.ng

high yielding 364-day bills (Bid to cover: OMO-3.1x; NTB-5.2x).

Elsewhere, at the secondary treasury bills market, the buoyant level of liquidity in the system spurred a buying spree that drove average treasury bills yield down 17bps weekon-week (w/w) to 12.4percent.

This week, we expect the CBN to maintain its liquidity t i g ht e n i n g s t a n c e a m i d scheduled maturities from Oct19 FGN bond (N233.9billion) and OMO (N316billion) on Wednesday and Thursday, respectively. Accordingly, market players will remain concentrated on the primary market. However, the elevated liquidity position should continue to guide yields lower Bond Market: Secondary market activity intensifies Activities at the secondary bonds market intensified in the prior week amid continued buoyant liquidity in the system.

According to FMDQ data, total value of bonds traded on the exchange spiked 116.9percent w/w to N353.6billion. We noted specific interest on the 2024s, 2027s, 2028s, and 2037s papers. In all, average yield fell by 17bps w/w to end the week at 13.9percent.

In the Eurobond space, we saw a renewed interest in the FGN dollar notes despite Brent prices trading below $60/barrel for the most part of the week.

As such, yields dipped across the curve, down 10bps w/w on average to 6.6percent. However, sentiments reversed in the corporate Eurobond space as selling interest in the banking names outweighed gains by SEPLAT’s 2023. Consequently, average yield in the corporate segment advanced by 4bps w/w to 5.4percent.

This week, we expect activities in the secondary bond market to track the outcome of the Oct-19 bond auction as players look to new issuances at the auction, wherein the DMO plans to raise N150billion via re-opened 5-year (N50billion), 10-year (N50billion) and (N50billion) notes. In the Eurobond space, the dovish tone of developed market central banks is expected to continue to spur interest in EM/ FM assets - capped by crude oil price volatilities.

Currency Market: Naira records mixed performance across FX windows Across the three main FX windows we track, the naira recorded mixed performances.

The local unit added points at the CBN Official window, as the FX rate appreciated by 2bps, to close at N306.9/$1.

At the I & E FX window, the local currency bowed to sell pressure, depreciating by 2bps to N362.2/$1. However, the FX rate at the parallel remained stable at an average of N359/$1.

Investor’s Square •Have you been shabbily treated by your registrar, stockbroke r or other capital market operators?

Let us know and investor will help you investigate and report back.

E-mail: iheanyi.nwachukwu@businessdayonline.com

Economy & markets

UBA berths with impressive Q3’19 scorecard …gross earnings up 14.2% to N428.21bn …after-tax profit prints higher by 32.3% to N81.62bn Iheanyi Nwachukwu

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nited Bank for Africa Plc has released its interim consolidated financial statements for the period ended September 30, 2019.

T h e t i e r 1 l e n d e r ’s results at the Nigerian Stock E xchange (NSE) showed the group recorded Gross Earnings of N428.21billion which represents 14.2percent increase from N374.82billion in the corresponding thirdquarter (Q3) period of 2018.

Its Interest Income of N297.90billion against N268.93billion represents

increase of 10.8percent.

Net Interest Income of N158.91billion against N150.69billion in Q3’18 i m p l i e s a n i n c re a s e o f 5.5percent. Non-Interest Income of N107.08billion in Q3’19 against N87.66billion in Q3’18 implies 22.1percent increase.

The group’s Profit Before Tax (PBT) of N98.233billion in Q3’19 as against N79.11billion in Q3’18 implies an increase of 24.2percent; while Profit After Tax (PAT) of N81.62billion against N61.69billion in Q3’18 represent 32.3percent increase.

In the review nine months period, UBA’s total Loans & Advances grew by

14.7percent to N1.985trillion from a low of N1.731trillion while Total Deposits of N3.540trillion in Q3’19 against N3.523trillion in Q3’18 represents 0.5percent increase.

The banking group Cost to Income Ratio of 60.8percent in Q3’19 against 62.5percent in Q3’18 represents a decline of 1.8percent while its Loan to Deposits ratio increased to 56.1percent as at September 30, 2019 from 49.1percent as at September 3 0 , 2 0 1 8 , re p re s e nt i n g 6.9percent increase. As at 1.54pm, the stock price on the Nigerian Bourse stood at N5.65 against a preceding day high of N5.7.

SEC says capital market master plan will catalyse economic growth

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he need to infuse the Capital Market Master Plan into the national economic development policy has been canvassed.

This was stated by Acting Director General, Securities and Exchange Commission ( S E C ) Ma r y Ud u k at a n interactive session with the Senate in Abuja, Tuesday.

According to Uduk, it will improve Nigeria’s competitiveness, promote a savings culture, improve market depth and liquidity and catalyze economic growth, also stated that this will be beneficial not just to the capital market but also to the entire economy.

She said, “More importantly, since the capital market over time ser ves as the barometer of any economy, the successful implementation of the Nigerian Capital Market Master Plan will aid the actualisation of the Nation’s economic development aspirations.

“The Commission also needs to continue to encourage efficient market t h ro u g h d i s c l o s u re a n d investor protection, while making efforts at diversifying the products currently available”.

On this, Uduk said the

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Commission is working towards developing a vibrant commodity ecosystem as well as developing the derivatives and FinTech space.

These she stated require a d e q u at e su p p o r t f ro m relevant stakeholders and huge investment in capacity building.

“A l s o, g o v e r n m e n t ’s recent efforts to reduce internal borrowing to be re p l a c e d w i t h e x t e r n a l b o r ro w i n g f o r l o w e re d interest rates are expected to release funds to the private sector and engender capital market growth.

“In addition, conscious efforts by the government to privatize enterprises and seek long term capital through the capital market will go a long way in deepening the Nigerian capital market, raising financial inclusion and wealth distribution” she said.

In his remarks, Chairman of the Senate Committee on Capital Market, Senator Ibikunle Amosun urged stakeholders in the capital market to meaningfully contribute their quotas in the development of the market to either strengthen the confidence of existing investors or new ones that are coming in. @Businessdayng

He said, “The senate i s n o t u n aw a re o f t h e challenges facing the growth of the Nigerian capital market. It is our desire as a committee to support you with unnecessary legislation to develop the Nigerian capital market.

“Therefore, we are rea d y t o w o rk t o b r i ng back investors’ confidence to the capital market, by creating laws so that investments can start which was stagnant since 2007. Companies a n d A l l i e d Matt e r s Ac t (CAMA) we will also look into it remove obsolete information.

Senator Amosun assured that the National assembly, will ensure and the passages of relevant laws, amend some, and enact new ones.

“This committee in assuring you of its readiness to advice and to ensure cooperation, wavers on Tax holidays, if and where necessary. There is equally t he ne e d to re vi ve t he commodity exchange and make the market robust and functional. We should try to introduce new products and also raise the existing ones and make it worthy like other capital market” he added.

Thursday 24 October 2019

BUSINESS DAY

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Investor Helping you to build wealth & make wise decisions

Analysis

GTBank: ‘Buy’ ratings despite muted Q3 earnings …analysts target prices signpost upside potential Iheanyi Nwachukwu

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or investors who are looking to buy stocks that have the potential for capital appreciation and dividend income, Guaranty Trust Bank Plc is still one of them. Recently, the bank released its unaudited Interim Financial Statements for the third-quarter (Q3) ended September 30, 2019.

Despite that the bank’s Q3’19 result shows subdued gross earnings amid marginal growth in both preand post-tax profits, GTBank stock still makes analysts ‘Buy’ ratings.

Price trend/trading information Year-to-Date (YtD), GTBank stock has decreased by 23.7percent offering an entry opportunity for value hunters. The stock market has continued to ramble in the negative territory till date but the bearish momentum offers opportunities for bargain hunting in fundamentally sound stocks.

At N26.3koobo per share which GTBank traded on Monday October 21, the stock is a little above its 52-week low of N25.70 after reaching a 52-week high of N39.15. Despite this, some research analysts still see GTBank stock as a good ‘buy’ as evidenced in their target prices (TP) for the stock based on its recently released Q3 earnings.

GTBank has N774.04billion in market capitalisation and shares outstanding of 29,431,179,224 units.

Third-quarter scorecard The bank’s gross earnings of N326.03billion in Q3’19 as against N337.27billion it earned in Q3’18 represents a decline of about 3.3percent. The Tier 1 lender reported Profit Before Tax (PBT) of N170.65billion, which represents an increase of 3.9percent when compared with PBT of N164.24billion in Q3’2018, according to its scorecard released on Wednesday October 16, 2019 at the Nigerian Stock Exchange (NSE).

P r o f i t A f t e r Ta x ( PAT ) of N146.99billion against

N142.22billion in Q3’18, implies 3.4percent increase. Interest Income decreased by 5.6percent to N224.18billion compared with N237.54billion in Q3’18. The group’s Net Interest Income of N172.93billion in Q3’19 as against N170.64billion in Q3’18 represents 1.3percent increase.

GTBank’s loan impairment loss of N2.76billion as against N1.73billion in Q3’18 shows growth

of 59percent ; Non-Interest Income (NII) of N99.96billion against N97.21billion in the corresponding third-quarter period of 2018 represents an increase of 2.8percent.

GTBank grew its Loans and Advances to customers by 6.8perc e nt t o N 1 . 4 5 1 t r i l l i o n f ro m a corresponding year low of N1.359trillion. Deposits from customers stood higher by 5.1percent to N2.390trillion in Q3’19 from a

low of N2.273trillion in Q3’18. The group’s Cost to Income Ratio (CIR) of 37.8percent in Q3’19 as against 41.1percent in Q3’18 represents a decline of 3.3percent.

Analysts views/ Target Prices Wale Olusi, research analyst at United Capital Plc in a recent note on GTBank still set a new target price of N46.7 for the stock which represents over 70percent upside potential when compared with the current price. United Capital research favoured ‘buy’ rating for GTBank shares.

“We retain our Buy rating on Guaranty Trust Bank at a current market price. This is on the basis of the sustained operational efficiency of the bank. In terms of market valuation, Price-to-Earnings (PE) and Price-to-Book (PB) ratios came in at 4.1x and 1.2x, which is well below 3year historical averages of 5.8x and 1.7x, presenting an attractive entry point at current price, ahead of full year (FY) 2019 dividend (projected at N2.5) declaration,” said United Capital research analyst.

Also, Usoro Essien, analyst at Lagos-based Vetiva Research wants investors to ‘Buy’ GTBank stocks as evidenced the analyst’s target price of N47.89, though a slight decline from the analyst’s earlier target price of N51.4 for the stock.

“Despite its Q3’19 numbers, Guaranty Trust Bank 9-month performance shows modest yearon-year (y/y) growth in bottomline, with 9-month profit after tax (PAT) up 3percent. While we witnessed an improvement in Costto-Income ratio to 35.2percent from 36.7percent in Quarter-Two (Q2) 2019, earnings per share (EPS) and annualised return on average equity (ROAE) dipped to 4.96 and 33.3percent respectively.

“We have revised our projections to reflect the misses in Q3. We have adjusted our Non-Interest Income estimate downward to N139.2 billion (Previous estimate: N150.7 billion) and reduced our provisions by 17percent to N4.3 billion. Consequently, our FY’19 ROAE projection

has been revised to 33.9percent, yielding a 12-month price target of N47.89 Previous estimate (N51.49).

The bank’s shares have lost 22.6percent year-to-date (YtD) and are currently trading at a P/B of 1.3x versus a Tier-I peer average of 0.7x”, the Vetiva research analyst stated.

Azeez Lawal’s team of research analysts at Capital Bancorp Plc set a target price of N40-N50 per share for GTBank achievable within long term investment horizon.

“GTB released its 9 months results barely two weeks into the 10th month; this is a show of confidence and an enviable level of fiduciary responsibility. This act along with its resilient performance leaves investors with reasons to hang on to the shares of the bank despite the turbulence in the equities market,” the research analysts at Capital Bancorp Plc stated.

“The Company’s results present a mixed tale of economic realities, resilience and best in class. The decline of 3.33percent in the company’s gross earnings is a reflection of economic realities. However, the bank grew her operating income by 1.94percent as a show of resilience and a flow with the tide.

Interestingly, the last GDP growth rate released by National Bureau of Statistics (NBS) was 1.94percent.

Best in class is what you call a company that holds her expenses at record levels, if I cannot earn more, I shouldn’t spend more. Riding on its efficiency, the bank delivered a growth in profit of 3.35percent at a cost-to-income rate of 36percent.

GTB continues to deliver a masterclass on efficiency,” analysts at Capital Bancorp further stated.

Guy Czartoryski-led research analysts at Lagos-based Coronation Merchant Bank want investors to ‘hold’ GTBank shares. The analysts ‘Hold’ rating is given to stocks they feel is fairly valued which they expect to perform in line with the Benchmark over the next 12 months.

Their target price for GTBank is N35 represents over 30percent upside potential relative to the current price.

Foreign investors gain N37bn from stock market in 9 months Iheanyi Nwachukwu

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oreign portfolio investors (FPI) gained about N36.91billion from the Nigerian stock market in nine months ended September 30, as against N35.81billion in they gained in the corresponding nine months period of 2018.

This type of investors brought N326billion into the Nigerian market in the review period but took away N362.91billion. In nine months to September 2018, these

foreign investors moving market at the Nigerian Bourse brought in N477.68billion but exited with N513.49billion.

Foreign Portfolio Investors (FPI) traded N688.9billion worth of Nigerian equities in 9 months to September 30, as against N991.19billion they recorded same period in 2018.

The record mark by foreign investors was achieved after deals valued at N94.45billion were done in September, which represents 66.77percent of the month’s total trade value. www.businessday.ng

Month-on-month (MoM), they have consistently exited the market with more than they brought in, except for August 2019 when these investors brought in N34.92billion but took away only N28.98billion.

The total value of stocks traded on the Nigerian Bourse in the review period stood at N1.464trillion representing a de cline from N2.007tr illion recorded in the corresponding 9 months period of 2018.

The 9 months deals value by foreign investors represents

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49.45percent of the total value of equities traded on the Nigerian Stock Exchange (NSE).

In the review 9 months period to September 30, their local counterparts (domestic investors) downplayed to a re c o rd N 7 7 5 . 5 1 b i l l i o n i n equities traded or 50.55percent against N1.016trillion in the corresponding period of 2018. In September alone, they accounted for just 33.23percent or N47billion worth of stocks.

Analysis of domestic transactions show that the value @Businessdayng

executed by institutional investors and retail investors were at par.

A comparison of domestic transactions in September and p r i o r m o n t h ( Au g u s t 2 0 1 9 ) revealed that retail transactions decreased by 2.34percent from N23.92 billion in August 2019 to N23.36 billion in September 2019.

However, the institutional composition of the domestic market declined more significantly by 30.81percent from N34.17 billion in August 2019 to N23.64 billion in September 2019.

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Thursday 24 October 2019

BUSINESS DAY

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BUSINESS DAY

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LegalBusiness BD Business Law Industry Report Practice Intelligence Partnerships

Islamic Finance principles cut across the three main religions in Nigeria – Ummahani Amin In this edition, BusinessDay Law Editor, THEODORA KIO-LAWSON, speaks with managing partner of Metropolitan law firm and Chair of the 2019 African International Conference on Islamic Finance (AICIF), UMMAHANI AMIN about her work as a finance lawyer/trainer/facilitator; her role in the 2019 AICIF and how Islamic finance promotes equity; fairness and justice across all religions. Amin, who also spoke about the revised investment guidelines for PFAs by PENCOM; non-interest financial institutions and convent ional bond investors demand; amongst other things, projects that in a few years, non-interest finance assets under management will be in the range of N2 trillion to N5 trillion depending on macroeconomic policies. EXCERPTS…

Q

: Tell us about the Metropolitan law firm and how you delved into capacity building and

training.

A: One of the objectives I had when starting my practice as a lawyer was to go into areas that are not quite common and one of them is Islamic finance. I felt there is a huge gap and a lot of opportunities in that space but Nigeria wasn’t prepared then so we started Islamic finance trainings, consultancy and then advocacy as part of our CSR in 2019.

Our resource was excellent and so our trainings were rated A+ in partnership with IFISA of South Africa and IFCUK so we focused on the trainings for four years and we thought it was ripe to start a conference too to meet up with the demands for Islamic finance in the ecosystem.

Q: What is your interest in Islamic finance and how did you begin to drive conversations around this?

A: During my Masters program in business and commercial law, one of the courses was Islamic contemporary issues and Islamic finance was one of the topics. That spurred my interest coupled with the fact that I come from a family who do not have a culture other than Islam. Islam is against interest and usury so I grew up knowing that you cannot take interest. It is forbidden. My mother has never seen the four walls of a bank so that in itself pushed me into Islamic finance to contribute my quota towards financial inclusion.

Q: Nigeria is a secular state and Islamic finance is a financial system that is based on adherence to Sharia or Islamic law. Why do you think citizens in general, would benefit from services, products and instruments that are based on compliance to sharia or Islamic law?

A: Yes, Nigeria is a secular state, but Islamic Finance is Abrahamic Finance as all the three (3) main Religions - Islam, Christianity and Judaism - have common objection to certain activities such as usury, pornography, alcohol etc., which they all term as what is harmful to the society. All the religions also promote equity, fairness and

Ummahani Amin, managing partenr, Metropolitan Law Firm.

justice. Even though it is globally recognized as Islamic Finance, its principles cut across the three (3) main Religions in Nigeria.

Likewise, there are countries with minority Muslim population such as the UK with 5% as Muslims, Luxembourg, South Africa, Hong Kong all with less than 2% Muslim population but with many non-interest financial institutions or instruments being patronized by both Muslims and NonMuslims. Non-interest financial institutions in Nigeria are open to all irrespective of region or religion just like the Sukuk issued by FGN were invested by both Muslims and Non-Muslims.

Q: In your opinion, how does the lack of non-interest financial services impede Nigeria’s economic growth and how progressive do you think the Nigerian economy would be with non-interest financial services?

A: Lack of non-interest financial services has affected economic and social activities of some regions (especially Northern States) in the country. Many refused to associate or transact financial transactions via interestbased financial institutions, which also limit their potential. EFiNA conducted a survey and found the reason why many people decided to be financially excluded www.businessday.ng

was due to lack of non-interest financial services. They decided to forego any benefit interest-based financial services can offer in

“

The role of a legal practitioner is very key in any Islamic finance transaction as it involves contracts that connect financiers with financees….

Without skills from legal practitioners and judges, the adjudication of dispute will be difficult, biased or wrongly handled. I can humbly say Islamic finance transactions cannot go on without lawyers

“

sa s

Thursday 24 October 2019

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order to maintain their religious values. The Nigerian economy will experience tremendous growth if non-interest finance is embraced without bringing in sectional Q: Indeed, we have seen Islamic finance provide alternatives for growth in infrastructural development in Nigeria, with the issuing of a 100 Billion Naira seven-year Sukuk by the federal government in 2017 amidst others which have followed. In your opinion, how much of such interventions (by way of Islamic financial services or instruments) are we likely to see in the nearest future?

A: The two Sukuks issued by FGN for the total sum of N200billion and that of Osun State for N11.4 billion is a tip of the iceberg.

Many issuances are expected due to demand in the market. In February 2019, PENCOM has released revised investment guidelines for PFAs. In those guidelines, each PFA is mandated to operate a multi-fund portfolio, which includes non-interest funds, as interested contributors are expected to write to their PFAs to migrate their pension to Non-Interest Fund.

Based on some surveys conducted by ICICE, 10% of the total assets under management (AuM) are expected to be transferred to Non-Interest Funds. Meaning, PFAs alone will require over N1 trillion worth of non-interest financial instruments. This is coupled with Non-interested financial institutions (NIFIs) and conventional bond investors demand. In a few years to come, Non-Interest finance assets under management will be in the range of N2 trillion to N5 trillion depending on macroeconomic policies.

Q: There’s a lot of advocacy around Islamic finance and the need to enhance and aid financial inclusion among the Muslim population. With a significant portion of Nigeria’s population (Muslims and Non-Muslims) recorded as unbanked, what sort of succour does Shari‘a-compliant financial products and instruments provide for all?

A: it is globally accepted that Non-Interest finance promotes financial inclusion due to religious values held by many Muslims as @Businessdayng

well as some financing contracts in non-Interest, which promote joint venture and partnership.

Non-interest instruments support productive economic activities. It has the ability to provide finance to anyone that has or holds religious or cultural objection to non-interest and non-alignment of risk that are intrinsic to most conventional transactions.

Q: Where do you see Islamic finance in Nigeria in another 10 years?

A: Malaysia, which is considered the global hub for Islamic Finance started with a single Islamic bank for 10 years before the second bank.

Nigeria started Islamic Bank in 2011 with 1 standalone and 2 Windows.

Within 8 years of operations, the industry is boasting of 2 standalone banks, 1 window bank, 4 Takaful operators, 5 Islamic Funds, 3 Sukuk issuance, 1 Islamic Equity Index and regulatory guidelines from all Regulators and Self-Regulatory Organizations. With all these historical trends, in 10 years time, Nigerian Islamic Finance will attract cross border transactions and will be managing assets of about N10 trillion or more.

Q: This is the 4th of the AICIF conferences. Do you think the conversations and engagements at the conferences have had direct impact on policy changes with regards to Islamic finance?

A: The Metropolitan Skills has been organising the African International Conference (AICIF) since 2013. The forth coming AICIF will be the 4th and as usual the invited Speakers and Panelists are highly experienced in the in the finance industry. Many of the Speakers are from different jurisdictions where Islamic Finance progresses.

With their wealth of experience to be shared at the Conference, the Regulatory Agencies can be influenced to make policies that will propel the industry to exponential growth & development.

We also have a mix this year from the conventional space and highly experienced legal professionals. This year’s conference is significantly more advanced than the previous three because we have made it more innovative with the introduction of the deal room where there will be matchmaking Continues on page 23

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Thursday 24 October 2019

BUSINESS DAY

GREYMATTER

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LegalBusiness

Tax Appeal Tribunal rules on Applicability of an Executive Order granting Tax Exemption and when a Tax Assessment becomes final and conclusive

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Introduction h e Ta x A p peal Tribunal, Lagos Zone ( “ TAT ” o r “ T r i b u n a l” ) , in United Capital Assets Management Limited v Federal Inland Revenue Service (unreported judgement delivered on September 24, 2019 in Consolidated Appeal Nos: TAT/ LZ/CIT/006/2018 and TAT/ LZ/CIT/007/2018) (“United Capital”), has pronounced on the extent to which tax exemption granted by an Executive Order can be validly enjoyed by a taxpayer; as well as the manner in which tax benefits conferred in an Executive Order should be administered by tax authorities.

The TAT also gave a ruling on when a tax assessment becomes final and conclusive.

Brief Facts of United Capital The Federal Inland Revenue Service (“FIRS”) conducted tax audit in respect of the affairs of the Appellant for the period from 2011 to 2016. The audit report showed that the Appellant paid dividends in excess of its taxable profit for the relevant period.

Based on this, the FIRS subjected the distributed excess dividends to Companies Income Tax (CIT), Educational Development Tax (EDT), Withholding Tax (WHT) and Value Added Tax (VAT); resulting in the issuance of additional tax assessment.

In a bid to resolve the tax liability arising from the additional assessment, the Appellant held meetings with FIRS but did not object to the assessment in writing. During the course of the ensuing negotiations, the Appellant submitted an application to self-assess and regularize its tax defaults under the Voluntary Assets and Income Declaration Scheme (“VAIDS”); a time-bound tax amnesty programme of the Federal Government in force at the time. The application was turned down by FIRS. At the expiration of the thirty (30) days window required

to file a notice of objection, FIRS pasted notices of noncompliance on the premises of the Appellant’s corporate headquarters. Following this development, the Appellant negotiated a payment plan with the FIRS and secured a grant of 25% waiver on the tax liability but thereafter filed an Appeal at the TAT, on the 20th of March, 2018.

Arguments of Parties Having failed to object in writing to the additional assessment within 30 days, as prescribed by law, the Appellant filed the suit with a Motion-On-Notice praying the Tribunal for an order to extend the time within which it may appeal against the decision of FIRS in relation to the additional assessment. The order was granted by the Tribunal. In its brief of argument, the Appellant contended that: FIRS was wrong to have subjected the excess dividends distributed to tax, because they were paid out of the returns on its investment in government bonds and treasury bills. In support of this argument, it was submitted that income derived from investment in government securities are exempt from tax under the Companies Income Tax (Exemption of Bonds and Short-Term Government Securities) Order 2011 (“Exemption Order”); and FIRS was wrong to have turned down its application to regularize its tax liability by seeking relief under the VAIDS, having met the eligibility criteria prescribed under paragraph 4 of the Executive Order No. 004 of 2017.

The FIRS, on the other hand, prayed the Tribunal to dismiss the appeal www.businessday.ng

for lacking in merit on the grounds that: The Exemption Order relied upon by the Appellant is inferior to the Companies Income Tax Act. By the strict provisions of section 19 of the CITA, any dividend paid in excess of total profit declared in the relevant year of assessment is subject to tax, notwithstanding whether it was paid out of a profit on which no tax is payable; The additional assessment had become final and conclusive since a written objection was not raised by the Appellant within 30 days of the service of the assessment; and The Appellant’s VAIDS application was rejected because it failed to meet the requirements for a valid declaration.

Decisions of the Tribunal In the final analysis, the TAT considered arguments of both the Appellant and FIRS and the gravamen of the decisions of the Tribunal is summarized as follows: FIRS was right to have subjected the Appellant’s paid dividends to tax because any dividends paid in excess of declared total profit is taxable under section 19 of the CITA, irrespective of the origin of the profit; whether from retained earnings or any other sources.

Hence, the Exemption Order that grants tax exemption to this type of companies’ income is inconsistent with the clear provisions of the primary tax legislation; and consequently void and inoperative to the extent of its inconsistency.

The additional tax assessment is final and conclusive and thus payable because the Appellant failed

to object in writing within the stipulated period of 30 days. The order of the Tribunal extending the time to appeal could not cure the error of failing to object as clearly prescribed under section 69 of the CITA. FIRS was wrong to have refused to consider the Appellant’s application to seek relief under the VAIDS, because the purported failure to meet requirements for valid declaration should not prevent initial consideration of a taxpayer’s application where the prescribed eligibility criteria are met.

Thus, FIRS was prohibited from charging interest and penalty on the payable additional assessment.

Commentary The decisions of the Tribunal in United Capital raise questions as to the “weight” of executive exemption orders which purport to grant tax amnesty or incentives to investors, particularly at a time when the Government is looking to attract private capital for economic development. Subjecting income exempted from tax to Excess Dividends Tax makes a mockery of the Exemption Order. Whilst it is not yet certain if the Exemption Order will be renewed, it is obvious that the primary legislation needs to be amended to make it clear that section 19 is not applicable to income specifically exempted from tax.

Furthermore, in our view, the position that a tax assessment is final and conclusive where a taxpayer appeals straight to the Tribunal, without first issuing a notice of objection against the assessment in writing to the Board of Internal Revenue, in accordance with section 69 of

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the CITA, is in clear conflict with a previous decision of the Tribunal on the issue.

In Oando Supply & Trading Ltd. v FIRS (2011) 4 TLRN 113 (“Oando”), the TAT Lagos Zone held that under the Federal Inland Revenue Service (Establishment) Act 2007 (“FIRS Act”), a Notice-Of-Refusal-To-Amend (“NORA”) is not a requisite pre-action protocol for proceedings at the TAT and is therefore not required to be issued by tax authorities before a taxpayer can approach the TAT for redress.

NORA is a negative decision of the FIRS against a taxpayer’s objection which gives the taxpayer a course of action before the Body of Appeal Commissioners. The TAT specifically stated that a taxpayer may elect to object to an assessment using the mechanism provided for in section 69 of CITA or file an appeal straight to the Tribunal against any assessment, demand notice, action or decision of the FIRS under the FIRS Act. The decision in Oando finds legislative support in section 68 of the FIRS Act, which provides that where any of the enactments listed in the First Schedule to the FIRS Act (CITA inclusive) conflicts with the FIRS Act, the enactment shall be void to the extent of its inconsistency. In addition, section 18(2) of the CITA (Amendment) Act 2007 provides that “appeals shall be as provided in the FIRS Act”.

Thus, section 69 of the CITA does not govern appeals to the Tribunal but by the provisions of Paragraph 13 of the Fifth Schedule to the FIRS Act, an appeal against a tax assessment can lie directly to the TAT (either within 30 days of the @Businessdayng

taxpayer’s receipt of the assessment or supported with an application for extension of time where the Appellant appeals outside the 30-days limit).

We note that the Tribunal could have followed its earlier decision on this point in United Capital, if it had averted its mind to the decision in Oando.

Whilst the decision of the Tribunal on the refusal

by FIRS to allow the Appellant benefit from VAIDS is encouraging, and will likely ensure compliance by both taxpayers and tax authorities in similar schemes in future; the decision on the validity of the Exemption Order in relation to excess dividends tax may reduce investors’ appetite for government securities as the purpose of the Exemption Order seems to have been defeated by the charging provisions of section 19 of the CITA. It remains to be seen, how corporate entities, tax authorities and the Government will resolve the issues thrown up by the decisions in United Capital.

• This is an abridged version of the author’s publication, excluding references and notes.

The Grey Matter Concept is an initiative of the law firm, Banwo & Ighodalo DISCLAIMER: This article is only intended to provide general information on the subject matter and does not by itself create a client/ attorney relationship between readers and our Law Firm. Specialist legal advice should be sought about the readers’ specific circumstances when they arise.

Thursday 24 October 2019

BUSINESS DAY

THE YOUNGBUSINESS LAWYER

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23

LegalBusiness

How much of “IT” do you really want?

I

n certain climes, the business year is winding down and the countdown to another rotation of the earth round the sun beckons. Thanksgivings and Halloween globally and maybe for Nigeria, we should question the dates because the rains we see today could well have been the rains of March and April.

For many, this countdown has the sound of doom, gloom and exasperated sighs; in my part of the world, the sigh will sound like an elongated “AAAAAHHHH!” or a “YEEEEEEEEEE!! (not synonymous with “Yay”) because they are recording epic failure of goals and aspirations. For others, it may not be so dramatic, they have recorded marginal success and are content to tranship the remainder unexplored to the next cycle of the sun.

Each one of these persons will in the course of this reflection ask themselves questions, which would revolve round a Why? or What? Whatever the question, it will speak of quest, a thing, an IT that is being worked towards and I think the conclusion of this evaluation will result in a question like “How much of IT did I get”?

I met with a couple of

young lawyers recently at a professional event and in the course of our conversations each one was trying to articulate an IT that was ideal and suited for them. Some said they were sure what they wanted and ready for it but just a few questions in, it was clear that the IT being articu-

lated was either borrowed or just not a real inspiration. For others, they were sure what they wanted but could not “go and kill themselves” on account of a mere aspiration.

Like is commonly said, I put a question to them and it was the above caption, How much of “IT” do you really

want? How bad do you really want IT? And after that came stutters. This question was alien. After this episode, I went home and asked myself this question and it led to a lot of introspection. So, I ask you reader, what is “IT” and how much of it do you really want.

In a knowledge economy, finding content is not tough, social media has further democratised it with many of us living off borrowed quotes and cliché. What this means is that many of our aspirations, quotable quotes and smart posts do not carry the weight and the value that they should or purport to do. The end of this is frustration and that explains the uptick in unfulfilled professionals globally. People are not pursuing honest dreams which are suited to their realities and more importantly (and maybe this should be capitalised), dreams which they have not prepared for.

After my introspection, I came up with masterclass content which I shared with myself and here are five tips that I penned down for my consideration which I believe will help anyone who is either discontent or unhappy alter their status. They include: Gauging Hunger: Some-

times, due to the speed at which we are required to work and the fact that we are sometimes jaded by the repetition of the cycle, we recline into monotony and lose hunger. Hunger in this context is the drive, for innovation, the drive that maintains energy. From time to time, we need review if our zeal is still as strong as the first day we carried the dream of professional services. Do we still maintain the same reading habits or practice input? If many of us undertake review, we will find that we have lost our hunger, we are coasting, comfortable at marginal and fading successes. Staying hungry is a cardinal principle of success. Working like one has not attained is usually the benchmark against which successes are pegged. How hungry are you?

Accountability: Who do you report you to daily? Who monitors progress made (as trivial and unimportant as it sounds), a lot of failures are hinged on this. Accountability obviates excuses and enables focus. Simply said, who has your back, when you fail?

Adventure: trying new things and mastering the old. Within the context, new areas of law, new challenges, changing the line of advisory.

All of these are quests which take us closer to our dream of dexterity and bring more satisfaction. This must be done periodically so that you can fuel your hunger. Failure to do so periodically and the profession becomes a burden. master the art of consistency: if this is not the magic wand! nothing else is! Consistency does for you what knowledge may not. It hones strong muscles and quickens growth. It is important to be consistent and without more, be consistent.

So as the clock trots on, do not give yourself over to regret or mental wanderlust, instead, hash out the strategy again, refuel the hunger and move. The journey of a thousand miles they say starts with a step towards IT.

-OYEYEMI. OYEYEMI ADERIBIGBE is a Senior Associate at Templars.

She is also the current ViceChairmanoftheYoungLawyers’ Forum of the Nigerian Bar Association -Section on Business Law and the Young Lawyers’ CommitteeLiaisonOfficerofthe African Regional Forum of the International Bar Association.

Feedback – Oyeyemi.aderibigbe@templars-law.com; yemiimmanuel@yahoo.com.

Islamic Finance principles cut across the three main religions... of the right project with the right capital. The Islamic Development Bank (IsDB) will be leading this session.

We also have the fintech showcase , which will also showcase sharia compliant products with a price tag for the most innovative.

Q: What informed the theme of this year’s conference?

A: The infrastructural deficit in Africa coupled with high number of financially excluded influenced our choice of the 4th AICIF theme of Infrastructure financing, sustainability and the future of African Markets.

Africa needs to be aware of alternative finance instruments that are capable of attracting funds from both conventional and Shariah complaint investors as well as improving the socio-economic status of the populace.

Q: What is the structure of the 2019 conference programme – by way of sessions (plenary, breakout), social events and other conference activities?

A: For this year there will be 10 different sessions for

two days.

For this year we will have two keynote speeches one by his Highness the Emir of Kano Muhammadu Sanusi Lamido Sanusi II who is the Godfather of Islamic Finance in Nigeria and the second keynote will be by Mr. Qussama Kaissi, the CEO of Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC) of IsDB. This year we will also have Hajara Adeola, the CEO of Lotus Capital, a renowned Islamic Finance expert in conversation with the Emir of Kano on the pertinent issues for opportunities and challenges for the growth of Islamic Finance.

As I mentioned earlier, we will also have the deal structuring session and the Fintech Showcase.

Q:How did you select the speakers and discussants at this year’s conference?

A: We have been very careful in the selection of our speakers. We have both local and international speakers that we head-hunted due to their experience, reputation and competence in a particular area of specialization in www.businessday.ng

Ummahani Amin, managing partenr, Metropolitan Law Firm.

Islamic finance. We have speakers from all the financial regulatory agencies with guidelines on Islamic finance. We have speakers from International lending agencies and the private sector Q: What should delegates/participants ex-

pect at the 4th conference that will be different from the other conferences?

A: The for thcoming AICIF is packed with practical experience from experts from major Islamic finance hubs from around the globe. It will also give

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avenue for networking especially at the award ceremony where many awardees will be recognized and appreciated for their respective contributions to the industry.

Q: What informed your choice of Lagos as the location for this year’s conference?

A: all the last 3 conferences were done at the Transcorp Hilton Abuja.

Many participants came from Lagos. Being the center of financial transactions and activities, we feel it will better to bring the conference to the doorstep of Lagos financial institutions.

It is part of our experience that whenever we organize Islamic finance trainings in Lagos, the attendants far out numbered the participants in our trainings in Abuja Q: How can legal practitioners across Nigeria leverage on the development of Islamic Finance in the country today in terms of practice?

A: The role of a legal practitioner is very key in any Islamic finance transaction because they are all basically contracts that connect financiers with financees. @Businessdayng

Islamic Finance is still a budding sector, which is fast developing in Nigeria at a neck-breaking speed, compared to other jurisdictions. As with any mutual relationship, some aspects may go wrong and result in disputes. Without skills from legal practitioners and judges, the adjudication of dispute will be difficult, biased or wrongly handled. I can humbly say Islamic finance transactions cannot go on without lawyers so this conference is very key for lawyers and that’s why we have high-ranking legal practitioners involved.

“

In a few years to come, NonInterest finance assets under management will be in the range of N2 trillion to N5 trillion depending on macroeconomic policies

“

Continued from page 21

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Thursday 24 October 2019

BUSINESS DAY

GLOBALREPORT

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UK: Time to embrace blockchain, regulator tells legal sector

Regulator warns barristers against heated Twitter debates

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lockchain technology - a cryptographic technique which creates an irrefutable chain of transactions - could cut the cost of legal services for consumers, according to the UK Legal Services Board.

In its latest foray into technology policy-making, the super-regulator has urged front-line regulators to embrace the opportunities provided by blockchain and peer-to-peer ‘distributed ledgers’.

In an episode of the ‘Talking Tech’ podcast series, Dr Anna Donovan, vice dean of innovation at University College London’s Faculty of Laws, says: ‘Blockchain provides significant opportunities to enhance consumers’ access to legal services, particularly once we reach widespread adoption. This will mean that consumers

can have their legal needs met in a more direct, faster and potentially cheaper manner (in comparison to current models). There are huge opportunities across the legal services market, including for example in conveyancing and probate.’

The LSB says its research shows that only 2% of legal service providers are using

blockchain.

Dr Helen Phillips, LSB chair, said: ‘The potential uses of blockchain technology are both enormous and exciting, and it’s vital that the legal services sector seizes the opportunity to use it to improve access to justice.’

Distributed ledger technology - which underpins the digital currency bitcoin

- ‘increases transparency, builds trust and speeds up transactions, all of which will benefit consumers’, Phillips said.

However she said that innovation could involve risks and potential pitfalls: ‘We need an approach that balances fostering innovation with consumer protection,’ she said.

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arristers have been warned they could face disciplinary action if they take part in ‘heated’ internet debates, post ‘distasteful’ comments online, or - even - reveal their whereabouts via social media.

In newly issued guidance, the Bar Standards Board tells barristers that ‘anything you publish online may be read by anyone and could be linked back to your status as a barrister’. It adds that regulatory guidelines apply to content posted in ‘both a professional and personal capacity’ and apply to unregistered barristers as well as to practising ones.

Twitter, YouTube, Facebook and LinkedIn are explicitly included in the guidance.

Comments designed to ‘demean or insult’ are ‘likely to diminish public trust and confidence in the profession’, the guidance states.

‘It is also advisable to avoid getting drawn into heated debates or arguments. Such behaviour could compromise the requirements for barristers to act with honesty and integrity (core duty 3) and not to unlawfully discriminate against any person (core duty 8).’

Even comments which ’you reasonably consider to be in good taste’ may be considered distasteful or offensive by others, it warns.

Barristers should also avoid sending confidential information to clients via social media and should be wary of publishing their location online in case they inadvertently reveal who they are acting for, the BSB said, citing the duty to keep clients’ affairs confidential.

The newly issued guidance will be considered in any action the regulator takes over concerns about social media use.

L AW S O C I E T Y G AZETTE

viewing and adjusting our HR processes, governance and systems across the firm.

‘We want to ensure that positive behaviour is consistently valued and that

inappropriate behaviour is called out and acted upon.

The plans for a conduct committee and protocol are part of this ongoing programme across the firm.’

Freshfields threatens to fine partners for ‘inappropriate behaviour’

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artners at Freshfields Bruckhaus Deringer face potential earnings penalties if they act inappropriately, in what the firm says is an ongoing drive ‘to improve behaviour and inclusiveness’.

The magic circle law firm revealed on Monday October 21, 2019 that it has set up a conduct committee to ‘drive culture change’ and confirmed that partners could face a 20% earnings deduction for bad behaviour.

The news comes after Freshfields partner Ryan Beckwith was sanctioned by the Solicitors Disciplinary

Tribunal after he went home with a junior colleague following an alcohol fuelled work event.

Beckwith, who was fined £35,000, was found to have failed to act with integrity and to behave in a way that maintains the trust the public places in the provision of legal services.

Edward Braham, senior partner at Freshfields, said: ‘We are committed to improving behaviour and inclusiveness. For more than a year we have been running a global behaviours programme to drive culture change, which includes re-

PHOTOFILE

Special screening of “A Platter of Gold” by renowned author and senior lawyer, ‘Supo Shasore Photos from the special screening of the documentary, ‘A Platter of Gold: An Untold Nigerian Story’ written and presented by Olasupo Shasore, SAN at Alliance Francaise, Ikoyi, Lagos on October 11th, 2019.

The documentary feature, which is a panorama of a well received seven part – documentary series ‘Journey of an African Colony’, tells the story of the eight colonial pro-consul governors and the under-celebrated, sometimes everyday Nigerians who pitched wit and guile against them to demand their rights and freedom. the documentary It is an exciting, epic colonial biography of Nigeria. www.businessday.ng

The Author & Presenter of the documentary, Olasupo Shasore, SAN; Executive Producer, Gbemi Shasore flanked by other members of the production.

The author and presenter of the documentary, ‘A Platter of Gold’, signing a copy of his book for Pastor Paul Adefarasin https://www.facebook.com/businessdayng

ALP Partners, Aisha Rimi and Bello Salihu at the screening. @Businessdayng

Thursday 24 October 2019

BUSINESS DAY

INDUSTRYFILE

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ASF France facilitates capacity building for capital defence lawyers in Nigeria

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vocats Sans Frontières France/Lawyers Without Borders France (ASF France) held a two-day training for Nigerian lawyers in partnership with the Cornell Centre on the Death Penalty Worldwide, New York.

The training, which held at the Alliance Française in Lagos/ Mike Adenuga Centre from 1415 October, 2019 had 17 trainees in attendance drawn from Edo, Enugu, FCT, Kaduna, Kano and Lagos states “The training aimed to equip trainees with specific skills to adequately represent persons facing the death penalty in Nigeria,” said Angela Uwandu, Head of Office, ASF France Nigeria office after the training. “It was a unique opportunity to disseminate the specialized training designed for the Makwanyane Institute for capital defence lawyers by the Center on the Death Penalty Worldwide at Cornell University, New York, USA and to foster relationship amongst lawyers representing persons facing the death penalty in Nigeria. It was also an opportunity to mark this year’s, World Day Against Death Penalty, in Nigeria,” she outlined.

ASF France targeted lawyers who are committed to representing persons charged with crimes

punished by death sentence and priority was given to lawyers who represent or desire to represent women facing capital punishment in Nigeria.

Rising from the training, a cross section of the trainees had various testimonies such as: “I thank the organizers and all the sponsors, Avocats Sans Frontières, for improving on my legal practice, the training is very impactful. I can’t wait to help a lot of convicted clients and those awaiting trials to get proper legal aid with my added knowledge of modern techniques of legal aid introduced by this training especially the mitigation and more exposure on intellectual disability, mental health as a good tool of defence to protect the rights of my clients.” - Kemi NaiyejuOloyede, Lagos.

“I join in appreciating the trainers for their insightful, innovative and cosmopolitan ideas. It was indeed a rewarding moment and opportunity to be a part of this rare program. It has enriched and exposed and expanded our intellect.” - Emmanuel Ejim, Kano.

The training was funded by the Australian High Commission, the French Embassy, the Embassy of Belgium in Nigeria, Alliance Française Lagos/Mike Adenuga Centre and Cleary Gottlieb Steen & Hamilton LLP, New York.

ASF France reiterates its commitment to enhancing access to justice for persons facing the death penalty, as well as totally proscribing the death penalty in Nigeria to conform with international best practices.

Art of legal advocacy an essential tool for business of Law - Experts

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xperts in legal advocacy have reiterated the need for young practitioners to continuously hone their advocacy skills, citing this as an essential tool for excelling in the business of law.

This call was made at a career training for lawyers organised by Lawlexis in Lagos. At the event, which was aimed at equipping lawyers with requisite advocacy skills, facilitators trained par-

ticipants on modules such as Mediation, Litigation, Forensic Document Examination, Business of Law, Legal Writing and Arbitration.

Participants received first-hand knowledge from members of faculty, who are experts in their respective fields. These include, Olabode Olanipekun SAN, Partner at Wole Olanipekun and Co.; Tolu Aderemi, Partner, Pearchstone & Graeys; Busola Ajala, of Strictly www.businessday.ng

Law Biz; Chinua Asuzu, Dean at the Writehouse, Fola Alade, Partner, Fotefa Partners and Dr. Abiodun Osiyemi, the President of the Forensic Science Academy.

Speaking at the workshop, the Lead Facilitator, Adedunmade Onibokun stated that it was an opportunity for lawyers to learn and be groomed by some of the best in the industry.

According to him, all the modules were meant to empower

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LegalBusiness

AICIF births in Lagos, As Sanusi, Imuokhuede, Oyebode, others lead discussions

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ll is set to host the 4th African International Conference on Islamic Finance (AICIF), which is scheduled to hold on Monday 4th and Tuesday, 5th November 2019.

The event, which will take place at Eko Hotels & Suites, Victoria Island, Lagos, will bring together experts in finance, infrastructure and various other sectors and segments of the economy.

The two-day conference will feature the 14th Emir of Kano, his Highness, Muhammad Sanusi II, CON as the first keynote speaker, while Oussama Kaissi, Chief Executive Officer of the Islamic corporation for the Insurance of Investment and Export Credit, ICIEC, the Export Credit, Political Risk Insurance and Credit Enhancement arm of the Islamic Development Bank Group, will give the second keynote.

Speaking about the forthcoming event, the conference chair, Ummahani Amin disclosed that one of the fundamental goals of the conference was to establish a community of Practice that will serve as a credible resource/ support for Islamic Finance deal structuring and create a platform for financial institutions and other key eco-system players to demonstrate their commitment and support for the development of Islamic Finance in Africa.

“With focus on Islamic Microfinance as a tool for financial inclusion, poverty alleviation and promoting economic growth, the AICIF conference hopes to motivate financial institutions to push for more defined regulations on Islamic finance,” she said.

Unveiling some of the speakers at the 4th AICIF, Amin revealed that the line-up included, thought leaders and experts from different jurisdictions where Islamic Finance has progressed. Among these are, Mallam Nasir El-Rufai, governor of Kaduna State; Muhammed Dabai Suleyman, Director, FSS2020; Ahmad Usman Kollere, Assistant Director (Head, Financial Inclusion) NAICOM Abuja; Toyin. F Sanni, Group CEO,

lawyers with the necessary skills to advance their legal careers and most especially make their practice quite profitable. He stated that lawyers must not only be abreast of the provisions of the law but also to understand the business side to managing a law firm.

He said, a Lawyer’s education should not be left to the Tertiary Institutions and the Law School alone but must also include continuous professional development and mentorship.

Michael Orekoya, one of the participants at the training described his experience as a paradigm shift and it changed his per@Businessdayng

Sanusi

Emerging Africa Capital; Gbenga Oyebode, Chairman, Aluko & Oyebode; and Dr Konstantinos Tsanis of FinTech Association of Nigeria - who is currently leading the innovation and transformation arm of Alat, created by WEMA Bank.

Others are, Abdulkader Thomas, Chairman, Shariah Board, Sterling Bank; Norfadelizan Abdulrahman, MD, TAJ Consortium Limited; The Chair of the conference stated that with the line-up above, there would be an enormous wealth of experience to be shared at the conference, which according to her has the potential to lead to exponential growth & development in the country.

Oussama A. KAISSI

spective about the practice of law.

Lawlexis also had its career training for lawyers on the 26th and 27th of March, 2019, the event which was sponsored by Olisa Agbakoba Legal trained over fifty lawyers on Corporate Finance and Capital Market Regulations, with specific modules including Accounting, Capital Market Regulatory & Advisory, Project Finance, Banking and Financial Law, Corporate Structuring and Compliance; and Fintech Law. The theme for that training was Creating And Sustaining Wealth through legal expertise.

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Thursday 24 October 2019

BUSINESS DAY

JUSTICESECTOR

BD

LegalBusiness

Expert opinion on Nigerian law by past Judicial Officers …An overview recent Whistle-blower Complaint against President Trump and Some Lessons for Nigeria (Pt. 1) ORJI UKA

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s Nigeria grapples with the arduous task of overturning the adverse arbitration Award rendered by a London-seated arbitral tribunal in favour of a British-Virgin Island company, Process and Industrial Development Limited (P&ID), a number of constitutional, legal, political and national security questions have continued to arise.

One of them is the question of the legality or otherwise of retired public officers, providing expert evidence against Nigeria in foreign proceedings. In what follows, this piece makes a case for the impropriety of the practice by drawing parallels with the recently launched impeachment inquiry against US President Donald Trump. In final analysis, the National Assembly will be called upon to remove any lingering doubts surrounding the illegality of the practice.

It is no longer news that an arbitral tribunal was constituted to determine the dispute arising from a 20-year Gas Supply & Processing Agreement (GSPA) signed by P&ID and the Nigerian Ministry of Petroleum Resources in 2010. And that at the end of the proceedings, the Tribunal on 17th July 2015, found Nigeria liable for the repudiation of the GSPA, and in January 2017 awarded $6.6 billion in damages against Nigeria, with interest at 7 until the Award sum is fully liquidated. The interest amounts to approximately $1.2 million a day, and brings the current total liability of Nigeria to P&ID to a little under $10 billion, over 25% of Nigeria’s disclosed foreign reserves.

Countless reactions have continued to trail both the Award and the entire saga including my intervention here in May 2019, where I expressed incredulity after first becoming aware of the fuller facts and circumstances of the dispute and the proceedings. Incredibly, the case did not elicit adequate public reaction until 16th August 2019, when a Commercial Court in London presided over by Mr Justice Butcher, discountenanced Nigeria’s objections and granted permission to P&ID to enforce the Award in the same manner as a judgment of the English High Court.

With Nigeria suddenly facing the imminent and realistic prospects of the seizure of its commercial assets in the United Kingdom and the indeed the rest of the European Union (at least until Brexit) by reason of the Regulation (EC) 1215/2012

Orji Uka

(recast Judgment Regulations), the Nigerian authorities roared into life. First, they commenced investigations into the circumstances surrounding the award of the GSPA to P&ID and then secured the conviction, in record time, of two directors of P&ID, to demonstrate that the contract and the Award were tainted with fraud.

P&ID would later contend that the actions of the Nigerian authorities amounted to the harassment and coercion of its officials.

The Nigerian authorities also interrogated and allegedly detained a former Chief Justice Nigeria (CJN), Salihu Modibbo Alfa Belgore, GCON on the allegation of providing services to a foreign entity. In this piece, Nicholas Ibekwe lays out what is ostensibly the argument of the Nigerian authorities to the effect that Justice Belgore acted as a consultant for P&ID and provided a key legal argument that resulted in the humongous Award against Nigeria by painstakingly analysing Nigeria’s laws, exploiting its shortcomings and citing case laws for the benefit of P&ID, and thereby contravened paragraph 5 of the Fifth Schedule to the 1999 Constitution which prohibits certain past officials from service or employment in foreign enterprises.

Admittedly I joined those who expressed outrage at the development, because I was, and remain, unconvinced that the actions of Justice Belgore in providing expert evidence on Nigerian law to assist the Tribunal, as is customary in www.businessday.ng

international arbitration, amount to a breach of the Code of Conduct or a criminal offence for that matter. However, in the course of an illuminating telephone conversation with a senior member of Nigerian bar, in which we appraised Nigeria’s prospects in the P&ID case, we drew parallels between the rationale behind the prohibition of the named retired public officers from service or employment in foreign companies and the latest crisis brewing across the Atlantic. This phone call prompted a reconsideration of my views, and this intervention.

The ongoing crisis in the US stems from a July 25 phone call between US President Donald Trump and Ukraine President Volodymyr Zelensky where the former allegedly pressured his Ukrainian counterpart to investigate former US Vice President and leading democratic candidate, Joe Biden and his son Hunter for certain alleged corrupt practices.

The crisis, which resulted in the launch of formal impeachment inquiry against President Trump by the Nancy Pelosi led House of Representatives, escalated after the subsequent release of a rough transcript of the call by the White House in the wake of the controversy and the whistle-blower report. The crisis has already claimed its first scalp with the resignation of the US Special Envoy to Ukraine, Kurt Volker. While it is beyond the remit of this piece to express an opinion on the credibility or otherwise of the allegation

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and indeed the outcome of the impeachment proceedings, it is pertinent for our present purposes to consider the basis of the allegation against President Trump.

In the now infamous phone call, President Trump repeatedly reminded President Zelensky of how much the US has done, and can do, for Ukraine; asked for a favour from Zelensky to investigate the allegations of corruption against then Bidens in Ukraine; and promised to put his personal lawyer Rudi Giuliani and the US Attorney General, William Barr in touch with Zelensky and his Federal Prosecutor to discuss and take action on the Biden probe.

Additionally, it has been alleged that, the Trump administration carried out a series of actions orchestrated at pressuring the Ukrainian government to dig up dirt on President Trump’s political rivals including delaying congressionally approved foreign aid to Ukraine for no ostensible reason; and that the Ukrainian President was only accorded access to President Trump after eliciting the former’s commitment to “play ball”. The contention therefore is that President Trump used the power of his office to further his own personal, political interest and thereby abused his office for personal gain.

In the words of the first whistleblower, “[i]n the course of my official duties, I have received information from multiple U.S. Government officials that the President of the United States is using the power of his office to solicit interference from a foreign country in the 2020 U.S. election...

This interference includes, among other things, pressuring a foreign country to investigate one of the President’s main domestic political rivals… I am also concerned that these actions pose risks to U.S. national security and undermine the U.S. Government’s efforts to deter and counter foreign interference in U.S. elections.” Echoing those sentiments, the House Intelligence Committee Chairman, Adam Schiff, concluded that the US President betrayed his oath of office, betrayed his oath to defend our national security, and betrayed his oath to defend the constitution.

While some might be unable in certain climes, to appreciate the allegation against President Trump on the basis that the conversation was typical, or as his supporters have argued, there was no quid pro quo, it is however easy to understand the basis of the outcry by neutrals, the democratic party and the liberal media. As Michael Fuchs writes, the possibilities for @Businessdayng

President Trump to undermine US interests for his personal gain are endless, with far-reaching repercussions for US counterintelligence and foreign policy, and this is deeply troubling.

To address such situations, Article 1 Section 9 of the US Constitution provides that holders of public office cannot, “without the consent of Congress, accept any present, emolument, office, or title of any kind whatsoever from any king, prince or foreign state.”

Similarly, the US electoral campaign finance laws provide that it is illegal for any person to solicit, accept or receive anything of value from a foreign national in connection with a US election. There is also the 1799 Logan Act which provides that any US citizen, wherever he may be, who, without authority of the United States, directly or indirectly commences or carries on any correspondence or intercourse with any foreign government or any officer or agent thereof, with intent to influence the measures or conduct of any foreign government or of any officer or agent thereof, in relation to any disputes or controversies with the United States, or to defeat the measures of the United States, shall be fined or imprisoned for not more than three years, or both.

The legislative intent behind these provisions is to prevent a situation where a public officer is in a position to take benefit from a foreign national or government by virtue of certain information which he acquired by virtue of the office he occupies or occupied; and ultimately to avoid a situation where the United States may afford leverage to a foreign country or national and thereby become susceptible to blackmail or manipulation by such foreign country or national.

And therein lies the lesson for Nigeria.

It therefore becomes pertinent to interrogate whether there are similar provisions in our laws that prevent public officers from benefitting from their offices in a manner that results in the appropriation of such offices to the detriment of the country’s national security and other interests. Specifically, it is worth asking whether the provisions of Fifth Schedule to the Constitution, particularly paragraph 5 thereof, are sufficient for purpose.

READ CONCLUDING PART NEXT WEEK.

Orji A. Uka is a Nigerian legal practitioner and recently completed his studies for a Masters’ Degree in International Business Law from King’s College London.

Thursday 24 October 2019

BUSINESS DAY

TECHTALK Innovation

Apps

Fin-Tech

Start-up

Gadgets

Ecommerce

IOTs

Broadband Infrastructure

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Bank IT Security

Amid rising unemployment, this online recruitment provide hope for job seekers FRANK ELEANYA

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igeria’s economy is bleeding and leaving little opportunities for millions of job seekers to earn a living.

The country’s unemployment rate was reported at 23.132 percent as of September 2018 and is projected to hit 33.5 percent by 2020. Analysts have said the only way forward is to create an enabling environment that unlocks private investment.

Apart from economyinduced insufficiency, unemployment is also driven by tedious access to available job offers. Prior to the digital era, individual companies handled their recruitment 100 percent mainly through manual processes. Human errors and bureaucracy made it difficult for the best talents to be employed and therefore alienated thousands of potential best recruits.

Nigeria produces about 500,000 graduates come out of Nigerian universities every year. By 2050, the country’s population is expected to reach 400 million, meaning that many more graduates will join the labour market jostling for the limited spaces.

The age of digital technology is likely to be the best buffer against what looks like a looming epi-

demic. Besides helping budding entrepreneurs set up new businesses, digital technology through online recruitment has democratized job search and helped employers find suitable fits for their companies. Online recruitment has become the easiest route to locate potential job opportunities for millions of people who have tapped into the mobile phone revolution.

Recruitment allows for immediate real-time in-

teraction and 24/7 hiring and job search activity.

Employers can post a job in as little as 20 minutes on a career site with no limits to ad size and start receiving CVs in response immediately. They also do much more than that.

Getajobng.com was recently launched by C&I Leasing as a specialised talent marketplace, connecting companies - big and small - to the best talent available. Described as the ‘Airbnb’ for human

capital development, getajobng is employeecentric. Job seekers on the platform are not only provided access to positions they are best suited for, but they are also prepared ahead for the positions as well.

“More than ever before, recruiters want to fill positions easily, quickly and cost-effectively, shortlist great talents and test out their compatibility with the job,” Andrew Otike-Odibi, managing

director and chief executive officer, C&I Leasing Plc. “They don’t want to spend time sorting heaps of applications for candidates who are not the right fit for their vacancies.”

“Candidates, on the other hand, need a platform that provides them with current, direct and authentic job vacancies.

They are looking for an online platform that delivers a quick response on applications, easy, short application processes and alert

notifications on relevant jobs. A career fair targeted mainly at job seekers is therefore in the works, as we seek to open new employment opportunities for thousands across the country and continent.”

Beyond job seekers, getajobng is also targeted at professionals who are not actively looking for a job but would move if the opportunity being offered is challenging enough.

Otike-Odibi whose company C&I Leasing has been in the HR space for 20 years, said finding professionals with suitable skills can be very difficult for most organisations.

Thus, many of them spend enormous resources trying to train new recruits only to have them leave after a very short stint.

Millennials are the most mobile workforce any organisation can manage, hence learning how to get the best out of them because very imperative.

Amina Oyagbola, founder of Women in Successful Careers, said the key to keeping millennials is for recruiters to merge talent acquisition with business goals.

“Define the business need; for the role and objectives of the recruitment,” Oyagbola said.

“Develop and agree on a job description outlining the skills and attributes.

Adopt a structured and faster-hiring process.”

Startups invited to compete at 7th Seedstars Lagos, as Seedspace GrowthLab formally opens CALEB OJEWALE

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p to 10 seed-stage startups in Nigeria will have a chance to compete in representing the country at the Global Seedstars Summit in Switzerland, where the winner stands to win up to $500,000 in equity investments and other prizes.

This pitch session will be part of an event marking the opening day of Seedspace GrowthLab, a new facility that is expected to be an exclusive growth hub for entrepreneurs and executives in Africa to access a global network.

Seedstars, a leading emerging market startup

community and investor has partnered with GrowthLab, formerly known as Starta, a membership platform for educating entrepreneurs in Africa on how to build high growth business, to launch Seedspace GrowthLab on November 8, 2019. The new hub, located on the second floor of the Business Center in Circle Mall, becomes the second Seedspace location in Lagos.

It was noted in a statement, that being part of the largest network of campuses for entrepreneurs in emerging markets, Seedspace GrowthLab is one of the 16 hubs by Seedstars in more than 10 cities around the world including: Abidjan, Cairo, Cape Town,

Casablanca, Dar es Salaam, Geneva, Lima, Mexico City, Nur-Sultan, and Yangon.

Alessia Balducci, general manager of Seedstars Nigeria, said in the statement, “Seedstars is here to stay, and this new hub in partnership with Growthlab is a testament to our willingness to continue our work to support and invest to build the next success stories.”

This she said, to stress the company’s long-term commitments to Nigeria, building on the Ikoyi hub, which was the first Seedspace ever opened in its network.

The launch day will be an opportunity to host Seedstars World Lagos event for the 7th time in the city. The Seedstars dynamic pitch

event will be held in the premises from 4:00PM. Furthermore, Seedstars joined forces with ABAN through LAN to connect with local business angels and organize the Investor Forum, which will also be part of the event and as part of efforts to nurture the local Lagos ecosystem. The 4-hour morning session will be a unique opportunity for investors to network, gain key insights and knowledge and access deal flow during closed-door pitches and 1:1 speed dating with selected startups.

The companies invited to the training session and to pitch at the Seedstars Lagos event must have raised less than $500k in funding and built a minimum viable

product, ideally with existing traction. The Seedstars team is searching for one additional criterion: potential for regional and global scalability.

The winner will get a chance to represent Nigeria in Johannesburg, South Africa during the Seedstars Summit Africa (December 5-7, 2019), and join an all-inclusive trip to Switzerland, to compete at the Seedstars Summit for the title of Seedstars Global Winner and up to $500,000 in equity investments and other prizes.

“We are committed to supporting entrepreneurs who are building high growth businesses in Africa with the relevant content,

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community and connection to capital that will help them succeed,” said Dotun Olowoporoku, co-founder and non-executive director at GrowthLab. Startups are invited to apply for the Seedstars World Lagos competition at seedstarsworld.com.

The application is open until 28th October, 2019.

After careful screening, the Seedstars team will shortlist around ten of the best seed-stage startups to participate in the bootcamp and pitching event on 8th of November, 2019.

Those interested in participating as attendees can register at eventbrite.com/e/seedstars-lagos-2019.

28

Thursday 24 October 2019

BUSINESS DAY

UNDERSTANDING NIGERIA’S

DAIRY VALUE CHAIN

Redefining Milk in the Nigerian context!

AYODEJI OJO

A

ccording to the Food & Agriculture Organization of the United Nations, a 250 ml glass of whole milk from cows can provide a 5-6-year-old child with 48% of their protein requirements and 9% of calories and key micro-nutrients.

Milk also provides adults with calcium, magnesium, selenium, riboflavin, vitamin B12 and vitamin B5. While Nigerians appear to purchase milk based on this shared belief that it is nutritious, a growing percentage of the products labelled as milk in the country does not contain any protein, or meet the vitamins and mineral requirements. This further exacerbates the high rates of malnutrition in the country and underscores the urgent need to set and enforce standards, ensure appropriate labelling, educate consumers and unlock the potential in the local Nigerian dairy industry.

The National Agency for Food and Drugs Administration and Control (NAFDAC) defines milk as the normal mammary secretion of milking animals obtained from one or more milking without either addition to it or extraction from it, intended for consumption as liquid milk or further processing. Despite this definition, Nigeria’s open-air markets and supermarket shelves currently have more sachets or cans of “filled milk” made of non-animal fats such as vegetable oils, than “full-cream milk” which contains animal fat. Both products usually have claims of added vitamins and minerals, which are often difficult to verify.

The leading fast-moving consumer goods companies in Nigeria who package and distribute these products, which are usually reconstituted from different components, argue that they were compelled to introduce “filled milk” to ensure cheaper options given the declining purchasing power of the average consumers. Others claim that “filled milk” is

healthier for individuals who prefer low-cholesterol diets.

However, Sahel Consulting’s field interviews with Nigerian mothers reveal that they are largely unaware about the differences between filled and full cream milk, and only want the most nutritious and yet affordable options for their families.

The development of the local Nigerian dairy industry will play a pivotal role in addressing these challenges by ensuring the enhanced production and distribution of affordable fresh milk and related products such as yogurt, cheese and ice cream in the country. Over the past 36 months, Sahel Consulting led the implementation of the Nigerian Dairy Development Program (NDDP), in partnership with leading dairy processors in Oyo and Kano States with the support of the Federal Ministry of Agriculture and Rural Development (FMARD), and the state governments. The program was targeted at improving the livelihoods of smallholder dairy farmers by increasing their productivity and integrating them into the participating processors’ supply chain.

The scope of the program included: the identification and integration of smallholder dairy farmers into

the partnering processors’ supply chain; the provision of productivity improvement interventions including training and extension, artificial insemination (AI) and feed and fodder production; and the development and provision of support infrastructure including solar-powered boreholes, milk cans, milk collection centers/points and milk evacuation vehicles.

Sahel Consulting invested in

‘

The accurate and simple labelling of milk and milk products would help immensely to empower Nigerian parents to make more informed decisions when choosing what “milk” products to purchase for their children

training farmers on good dairy practices which contributed to a significant increase in milk quality and the quantity supplied to the processors.

Programs such as the NDDP demonstrate the immense potential for the transformation of the Nigerian dairy sector, when key stakeholders in the private, public and nonprofit sectors partner to unlock a critical value chain, which will ultimately ensure that the average Nigerian family has access to affordable, high quality milk.

Nigeria can also learn from countries that have institutionalized the enforcement of quality standards in the milk industry. For instance, the Dutch government established the Netherlands Controlling Authority for Milk and Milk Products (the COKZ) to monitor the quality and safety of dairy products in the country. COKZ is an independent organization that offers an objective and professional assessment of quality systems and the quality of dairy products in the entire dairy chain, from the raw material up until delivery to the final consumer in the Netherlands. The key success factors of COKZ are its specialization in milk and milk products, and its investment in data.

In the Nigerian context,

regulatory agencies such as NAFDAC and Standard Organisation of Nigeria (SON) should invest in data collection and analysis to understand the level of mislabelling and food fraud present in Nigeria’s milk industry and consequently prosecute any offenders. Thankfully, NAFDAC recently released the draft ‘Milk and Dairy Products Regulation 2019’ which provides information on the minimum standards for milk and milk products as well as punitive measures for offenders who fail to meet these standards.

An individual offender would be required to pay a fine of N50,000 and face the possibility of imprisonment for up to one year. A corporate offender would be fined N100,000 once implementation commences.

Sadly, these measures do not currently provide an enough disincentive for offenders and will likely not curb the high levels of fraud and mislabelling in the landscape, unless they are more punitive.

NAFDAC and SON should also enforce safety and quality standards that are consistent with international best practices. Finally, consumers should be sufficiently educated about the nutritional content of what they consume.

The accurate and simple labelling of milk and milk products would help immensely to empower Nigerian parents to make more informed decisions when choosing what “milk” products to purchase for their children.

Picture here Ayodeji Ojo, Sahel Consulting Agriculture & Nutrition Limited www.sahelconsult.com

Thursday 24 October 2019

BUSINESS DAY

29

ENERGYREPORT Oil & Gas

Power

Renewables

Environment

NCDMB policies to facilitate access to funding for females in Oil Industry Stories by OLUSOLA BELLO

S

ince the passage of the Nigerian Content Bill into an Act in 2011, there are indications that local participation in oil and gas industry has improved tremendously, especially when we look at the numbers of contracts awarded to indigenous companies, employment generation, and localisation of local inputs in the oil and gas industry.

However one critical segment of the society has not been so lucky to take advantage provided by the Act. This is the women folks.

To address this imbalance, the Nigerian Content Development and Monitoring Board (NCMDB) is set to roll out policies that would enable women to participate actively in the programme overseen by the agency.

“Women operators in the Nigerian oil and gas industry will soon benefit from gender-friendly policies on access to funding, award of contracts and support for research and development, courtesy of the Nigerian

L-R: Bolaji Osunsanya, CEO, Axxela; Olalere Odusote, Commissioner for Energy and Mineral Resources, Lagos State, and his wife, Olayinka Odusote; with the Samuel Egube, Commissioner for Economic Planning & Budget, Lagos State, at a recently held event organised by Axxela in honour of Odusote lengthy stint as the Structured Ventures Executive with the company and recent appointment as an Honourable Commissioner by the Lagos State Government. The event was held at the Eko Hotels & Suites, Victoria Island, Lagos.

Content Development and Monitoring Board (NCDMB)”, the agency said.

Simbi Kesiye Wabote, executive secretary of NCDMB, who made this known at the close of the workshop NCMDB organised for women in oil and gas industry on in Lagos, however stated that companies supervised by women make profits and are run better across the globe.

He noted that since the Nigerian Oil and Gas Industry Content Development (NOGICD) Act was instituted as a deliberate agenda to get more Nigerians to participate in the oil and gas industry, there should also be special initiatives to encourage women participation in the sector.

He quoted a recent study by the Global Energy Talent Index Report which indi-

Oil majors set to enforce compliance of 2018 Corporate Governance

M

embers of Major Oil Marketers Association of Nigeria (MOMAN) are set to sanitise the downstream sector of the Petroleum Industry as they have mapped out strategies that will improve the image of the industry.

Consequence upon this, the group at its 2019 CEOs strategy retreat, had agreed to target certain areas in order to improve industry reputation; Health Safety Environment & Quality (HSEQ), corporate governance, customer satisfaction at the station forecourts including accurate dispensing of product. The Oil majors at the instance of their umbrella body, MOMAN (Major Oil Marketers Association of Nigeria) recently held a oneday workshop for members on Corporate Governance, with emphasis on the new Nigerian Code of Corporate Governance (2018).

The intensive workshop was facilitated by JUNIOS Consulting, an indigenous management consulting firm.

Clement Isong, CEO of MOMAN, while speaking at the event expressed the view that good corporate governance practices lie at the core of good business perforOlusola Bello, Team lead,

mance impacting all stakeholders including shareholders, employees, service providers, transporters, dealers and ultimately, the Nigerian customer. He reminded participants that the image of the downstream sector of the oil & gas industry had, over the years, suffered considerable damage as a result of some underhand practices, particularly the penchant of some petrol station dealers for cheating at the pumps, as well as the unwillingness of some oil product transporters to present fit and proper vehicles and trained drivers for the movement of hazardous cargo such as petroleum products.

He also informed participants of their CEOs desire for a serious and sustainable relaunch of corporate governance mechanisms so as to adequately tackle challenges in the industry and boost stakeholder returns.

Also speaking at the event, the chairman of Junios Consulting, Osifo Segun Akpata described the speedy adoption of better governance practices in the industry as an imperative for progress.

He welcomed the launch of the new code and was of the opinion that if compliance with the code’s provisions

Graphics: Joel Samson.

by companies operating in Nigeria is rigorously enforced by the relevant authorities, the corporate space in the country will, in a few years, become very different. Beyond improving productivity and reducing reputational risks, he believes well run organizations are an irresistible attraction for foreign and domestic capital.

The workshop was splited into sessions in which one featured discussions regarding corporate governance internationally, as well as an analysis of the reasons behind major corporate failures around the world from the turn of the century to recent years.

Happenings within the Nigerian corporate world in respect of corporate governance were also discussed with examination of various statutory and sectoral codes till date. Participants were exposed to the provisions of the new code and the practical measures to be taken by companies to ensure compliance. The consultant emphasized that any resources expended by an organization in stepping up its corporate governance practices were an investment in the growth and profitability of the organization.

www.businessday.ng

cated that there is a chronic shortage of women in the oil and gas industry. ”It is estimated that women occupy about 50 percent of non-technical positions at entry level compared to only 15 percent of technical and field role positions.

“Gender diversity decreases with seniority with only a tiny proportion of women in executive positions. The percentage of women in the industry drops over time from 36 percent 24 percent between the middle and executive level.”

He said NCDMB will review its strategy on the Nigerian Content Intervention Fund (NCI Fund), adding that”access to finance is very important and we will look at our policy to see how we can support women who are serious to do business.”

The Executive Secretary assured that the Board would work with project promoters in the oil and gas industry to ensure the award of some contracts to companies owned by women, including Nigeria Liquefied Natural Gas

Company, which is set to start the execution of the Train 7 project.

N C D MB w ou ld a ls o encourage the study of sciences, technology, engineering, and mathematics (STEM) by young girls in secondary schools and drive the collation of data on women who participate in various sectors of the oil and gas industry, so they can receive support, he promised.

The Executive Secretary confirmed that ”out of the total number trained by the Board, women constitute about 20 percent of the trainees and we hope to increase the number of women trained to meet up the industry skilled labour demand.”

Folasade Yemi-Esan, acting Head of the Civil Service of the Federation, commended the organisers of the workshop and expressed hope that it would catalyse other dialogues to be initiated by the Board and complement other ongoing activities, programmes and policies of the government to propel Nigeria to achieve the United Nation’s Sustain-

able Development Goals (SDGs), particularly Goals 4, 5 and 10.

She insisted that Nigeria should “go beyond the rhetoric of having a quota for women in decision making or other strategic positions by ensuring that the country maximizes the economic potential of its whole labour force by promoting equal rights, access and opportunities for all at all levels.”

Hadiza Bala-Usman, managing director of the Nigeria Ports Authority (NPA) in a goodwill message she delivered at the event, charged career women to define themselves around capacity and capability and not just because they are women. “When you get there, you must prove that you are capable.”

She charged persons in authority to mentor young girls and consciously accommodate the needs of young working mums, so they can remain in employment and gain needed experience and competences that will position them for promotion into executive positions years later.

NNPC/Total JV makes significant inventions through CSR

A

s part of its enhanced Corporate Social Responsibility, CSR, Total Exploration and Production Nigeria, operating in Joint Venture with the Nigerian National Petroleum Corporation, NNPC, has made significant interventions in Nigeria’s health sector.

Vincent Nnadi , executive general manager, Corporate Social Responsibility and Medical Services, said the JV partners in a dedicated effort to support governments effort in reducing the spate of death from breast cancer has donated two mammogram centres to the Gbagada and Isolo General hospitals to the Lagos State government.

This move, he said, was part of Total’s efforts to advocate breast cancer prevention, one of the commonest among women and also to provide services at highly subsided cost.

According to him, the intervention will encourage simple measures like breast examina-

tion and mammography test by women at least on a yearly basis, in order to ensure early diagnosis and treatment.

He noted that just as Total has a series of activities as part of its CSR, health was part of what is paramount to them and it is necessary for them to impact their host communities through some of these projects.

The two centres have already been commissioned and handed to the state government.

BusinessDay also learnt that two other centres have been completed in Zamfara state, with construction at different levels in Imo, and Bayelsa states, and the aim is to have one centre in each geopolitical zone and every state ultimately.

“We believe that these would provide easily available and highly subsidised mammography services with image guided breast lump biopsy capability to Nigerian women and also, our hope is that by bringing diagnostic facilities nearer to them/”, they would be

saved from the danger of living with undetected breast lumps or undiagnosed breast cancer,” he remarked.

Nnadi explained that Mammography screening is the only screening method that has proven to be effective.

Mammogram is an x-ray picture of the breast and can be used to check for breast cancer in women who have no signs or symptoms of the disease.

Mammograms can also be used to check for breast cancer after a lump or other sign or symptom of the disease has been found. This type of mammogram is called a diagnostic mammogram. Comprehensive cancer control involves prevention, early detection, diagnosis and treatment, rehabilitation and palliative care.

Raising general public awareness on the breast cancer problem and the mechanisms to control as well as advocating for appropriate policies and programmes are key strategies of population-based breast cancer control.

Global downstream operators converge in Lagos

G

lobal players in the downstream petroleum industry will converge in Nigeria for the 13th Oil Trading and Logistics (OTL) Africa Downstream Week with focus on the evolving impact of Innovation and Technology

on efficiency and margins in downstream operations.

The annual conference, scheduled to take place from 27 to 30 October 2019at the Lagos Oriental Hotel is widely regarded as the continent’s biggest downstream petro-

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leum event that assembles operators in the value chain of oil and gas supply, comprising international traders, refining, shipping, marketing, logistics, storage, retail, professional services, government and civil society.

30

Thursday 24 October 2019

BUSINESS DAY

Retail &

consumer business Luxury

Malls

Companies

Deals

Spending Trends

companies

Consumer goods firms are stumbling toward recession BALA AUGIE

A

s corporate start to release their release quarter results on the bourse, investors should be wary of a sector: The consumer goods industry.

The outlook for the industry is bleak, though it is the hardest from a stuttering economy, while consumer disposable income continues to dwindle. Also, high poverty rate, decrepit infrastructure, hefty levies, high inflation, and border closure makes the case less compelling.

With unemployment rate is as an all-time high of 23 percent and over 50 percent of a population of 200 million live on less than $1.98 a day, a recession is eminent.

Analysts said that third quarter results could be the worst in a decade, even more putrid than the recession period- when a precipitous drop in crude oil price stoked a severe dollar scarcity that paralyzed business activities.

The latest GDP report released by the National Bureau of Statistics (NBS) showed the manufacturing industry contracted by 0.13 percent in the second quar-

ter from the 0.81 percent expansion in the first quarter of 2019.

However, the contraction contradicts evidence from manufacturing PMI data published by the Central Bank of Nigeria (CBN) in the period which suggested that activities continued to expand.

A the moment, consumer goods firms are finding it difficult to turn each Naira invested in sales into higher profit since it isn’t easy passing on cost to the already

squeezed consumer.

The cumulative average net profit margin of the largest consumer goods firms dipped to 4.17 percent in June 2019 from 6.39 percent the previous year.

Also, their combined net profit fell by 47.18 percent to N47.18 billion in June 2019 from N64.24 billion the previous year, Dangote Flour and International Breweries recorded losses.

Sales volumes have been under pressure, and total cumulative sales of the 10

largest firms were flat at N738.51 billion in the period under review.

The outlook for the sector is not very positive, according to analysts at United Capital Asset Management Limited.

“Aside from the major challenges, the upside is expected to come from the implementation of the minimum wage,” said analysts st United Capital.

Analysts at United Capital however said that the gains from the minimum

wage seem to be cap as the government is proposing reviewing upward the Value added Tax (VAT) that is expected to be passed onto consumers, in form of price increases.

This means consumer wallet will be further squeezed, as they have downgraded to cheaper price, while the unlisted that produce these products are cannibalizing on the sales of the listed brands.

Already, brewers are feeling pinch of hefty levies as government had increased excise duties on tobacco and alcoholic drinks, a double whammy for a sub sector reeling from stiff competition and deteriorating margins.

A dark cloud hovers over the industry as government intends to impose taxes on carbonated drinks, but economists say the policy is catastrophic and will lead to loss of jobs and hyperinflation as manufacturers of soft drinks will close shops due to low patronage.

The economy has been growing sluggishly since the country exited its first recession in 25 years as GDP expanded by 1.94 percent, lower than the 2.10 percent expansion in the first quarter of 2019.

Analysts have blamed the tepid growth on lack of pol-

icy making and governance on the part of the present administration.

Data from the NBS show that investment into the country dropped 53.5 percent in 2015 to $9.8 billion from $20.7 billion in 2014.

At the thick of the recession in 2016, the figure reached its lowest levels at $5.1 billion not until the country exited recession in 2017, that investors started building up interest into investing in the country. In 2017, foreign investment picked up at $12 billion and went further to $17 billion in 2018.

FMCGs have cut back on the acquisition of property plant and equipment as economic activities don’t support expansion.

Cap i t a l e x p e n d i tu re spends by firms reduced by 20.97 percent to N54.91 billion in June 2019 from N69.50 billion the previous year.

“Despite improved foreign inflows over the last two months, we remain pessimistic on the sustainability of this trend as overall investor sentiment remains weighed down by underlying macroeconomic weakness and continued delay in the implementation of structural reforms to accelerate economic growth,” said analysts at Chapel Hill Denham Limited.

locally produced bag of rice cost N18,000- N19,500.

Also, the price of a kilo of imported turkey has increased by 30.8 percent to N1, 700 from N1, 300, while a kilo of imported chicken increased by 36.4 percent to N1,500 from N1,100.And the price of tomatoes increased by 21 percent to N260. 4 from N215. 1 According to 2019 July Jollof Index by SBM Intelligence, Nigeria’s leading geopolitical intelligence platform, Nigerians are now spending 60 percent more for a family pot of the Jollof than they did three years ago.

Ayodeji Ebo, MD, Afrinvest Securities Limited said, “The spike in the Jollof Rice index over the past three years mirrors the rise in the general price of food products. The recent partial and subsequently full border closure can be attributed

to the current rise in price of rice, a major variable in the index.”

With Christmas being just two months away and Jollof rice being the signature to mark the celebration; Nigerians may spend higher by buying a 50kg of imported rice for as high as N50, 000 in December if the land borders remain shut.

Ayorinde Akinloye, a consumer goods analyst at Lagosbased CSL Stockbrokers said that Christmas will definitely be worse as many rice sellers are currently hoarding rice with plans to hike the price significantly in December and this will bound to impact the cost of Jollof rice.

“I think people will opt for other substitutes like Spaghetti and local ball foods like pounded yam maybe other options for consumers in December,” Akinloye further said.

Spending Trends

Nigerian caterers complain local rice fails to make good Jollof …as clients continue to prefer foreign rice BUNMI BAILEY

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ost caterers in Nigeria are complaining about the poor quality of local (Nigerian) rice as it fails to properly enhance preparation of the country’s popular delicacy known as Jollof rice and disappoints the expectations of consumers.

From discussions with some caterers, they have said that once the Jollof rice is prepared with local rice, it comes out mushy, gummy, and starchy unlike the imported (foreign) rice which comes out better.

Nneke Obi, a caterer said, “People don’t like to eat the Jollof rice prepared from the local one at parties because it is sticky, has a lot of starch and stones. I had to stop using it and stick to the foreign one. Jollof prepared with

foreign rice makes it come out in strands and not mushy and gummy.”

“Although, when you prepare Jollof with local rice, the ingredients catch fast and it is tastier than the foreign rice, I still prefer to cook with the foreign one because that is what my customers want,” Obi further said.

Jollof Rice is a popular delicacy eaten in most West Africa countries. It is a fragrant and colourful delicacy made of rice, peppers, tomatoes, spices, onions and vegetable oil. Usually wellgarnished, it appeals to all age brackets that are revered across the sub-region for its unique sweet taste and spicy flavour.

Ife Laleye said that when she cooked Jollof rice using Nigerian rice, it did not come out well and nice like the normal Jollof that she cooks.

“It came out brownish differwww.businessday.ng

ent from the normal orange like colour. It was stressful to cook it because I had to wash the rice several times to remove the starch and also pick stones from it.

She also said that she had to reduce the amount of water she uses to cook unlike the foreign rice where she uses a lot of water.

On August 20, 2019, Nigeria announced the partial closure of its land borders with the Benin Republic in order to tackle cross border smuggling of rice and other commodities, earlier this month, the government announced a total closure of Nigeria’s land borders to all goods.

Since the closure of the border, the prices of major ingredients of Jollof which are rice, groundnut oil, turkey or chicken have increased making caterers ration the delicacy by selling it at reduced quantities rather than

increase the price of the meal due to weak purchasing power in the economy.

“It is very expensive to prepare Jollof rice with the way foreign rice is expensive.

The price of groundnut oil, stock from chicken and turkey is high. And I had to ration it.

Before I sell a plate of Jollof for N100 but I sell it at half a plate,” Obi said.

Laleye said that she also had to reduce the quantity of her rice to get her money back and that people now buy more.

From July-September, rice, groundnut oil, turkey and chicken were the major food commodities that increased by the market.

Before the border closure, a bag of imported rice cost N14, 500-N15, 000 while a bag of locally produced rice cost N13,500 but after the closure, a bag of imported rice now costs N26,000 and a

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Thursday 24 October 2019

BUSINESS DAY

31

BUSINESS TRAVEL

Our partnership with service providers allows us access good rates for travellers - Akinboro Fola Akinboro is currently the chief executive officer (CEO) of ajala.ng, an online travel agency in Lagos, Nigeria. She is an experienced Aviation Profession in Nigeria having worked with various national and international brands. She has creatively evolved into becoming a seasoned Aviation expert through the provision of bespoke services in Customer Service, Ticketing, Marketing, Partnership, Sponsorship and Advisory services in the leisure, travel and tour industry in various capacities. In this interview with IFEOMA OKEKE, she speaks about the unique offerings of ajala.ng and its new portal. Excerpts.

What does the new Ajala.ng website offer? he new ajala.ng website is more dynamic and it provides better engaging web experience on a host of varied devices like smartphones, tablets, and laptops and also on all operating systems. This amazing experience puts emphasis on the products and services we have to offer making the customers’ journey seamless and convenient on ajala.ng. Some of the key offerings include: Great travel deals, amazing vacation packages and awesome hotel rates – for the purpose of the new ajala.ng portal launch, we have made available on the website remarkable bargain and mouthwatering deals on all our product offerings to further provide quality experience for our customers and trade partners alike Effective Payment option – this is a core principle in ajala. ng’s functionality providing our customers with well-integrated, user-friendly payments methods.

Currently we have integrated the website with Paystack’s platform to facilitate payment and GTPay option that allows for Bank transfer to provide flexibility to our esteemed customers. Pertinent to note also is that the new ajala.ng stores your preferred payment option to create a level of ease for our returning customers.

Website speed – because we understand the importance of fast load time, the new portal is designed to speed up the customers access to the contents on the site.

We have signed partnership with Airlines, Hotels and Tour Operators in various countries in the world to access competitive deals that is made available on www.ajala.ng.

T

How long had ajala.ng operated and what have been the success stories since you commenced operations?

We commenced operation about four years ago and thus far the journey has been exciting. We have recorded successes in terms of

How does payment by installments work in ajala.ng and how can travellers benefit from this ideal?

We have a product called Ajala Pay Easy which allows for payment by instalment. With this alternative, customers can book special ticket deals with an initial non-refundable 30 percent deposit to confirm the ticket. Completion of payment is required at most two weeks before date of travel. The Ajala Pay Easy process include- the need to make reservation on the website; request Ajala Pay Easy package; agree to terms and conditions; make down payment of 30 percent.

Fola Akinboro

technology- with the launch of the new portal, customer service – we ensure our customers experience optimum service delivery either when engaging with our portal or when dealing with the customer care representatives. We also have built robust relationship with our service providers and our trade partners alike; this allows us access the best deals either in flights, hotel services or tour activities.

Can payment be made on this website anywhere in the world or is it just restricted to Nigeria?

The new portal has the capability to receive funds from anywhere in the world, this will be done at another phase of updating the site.

Currently, payment is restricted to Nigeria for now What destinations are featured on this website?

All destinations and all destinations combination are featured on

the website, when you visit www. ajala.ng; you can explore amazing destinations and hotel options at best available fares.

Research shows that top destinations Nigerians love to travel include UAE, UK, and USA. What exceptional service is Ajala offering to cover these destinations?

Yes, the highlighted destinations are top routes for Nigerian travellers for various reasons. Almost every Nigerian family has one relative or the other in UK and USA hence travelling to these destinations is inevitable to holiday with family members. However, for the UAE, Dubai is the most visited Emirate largely for vacation or shopping.

Also, the fact that the UAE visa is electronic hence the process and cost are minimal.

At ajala.ng, we plan bespoke travel packages that are pocket friendly, we listen to you and advise you based on your budget.

Three years ago, airlines complained of foreign exchange constraints, making it very difficult for them to repatriate their earnings. This in the long run affected the downstream sector, such as the travel agents. The situation seems to be better now with forex being a bit stable. How has this stability affected your business?

The stability in the airline sector with respect to forex repatriation is a big relief indeed. Airlines have increased their capacity into the Country which in turn increases inventory and makes it easier to sell more seats to more customers.

Such solidity in the economy also encourages more foreign investments creating more jobs, which strengthens earning potential of Nigerians and promotes more travel. By and large it is a win-win situation for all parties involved.

Since you started operations in Nigeria, what has been the major challenge and how have you managed them?

The major challenge has got to

be the previous question – repatriation of foreign exchange constraints experienced by the airlines.

This led to reduction in flights departing from the country and of course a reduction in seat available, we sold the reduced capacity on Airlines – a case of increased demand with less supply. However, the aviation industry is in a better place now with respect to funds repatriation.

Do you partner with airlines or destinations in a bid to deliver top-notch services to your clients?

Of course, that is the reason we are in business - to get our customers the most favourable and affordable local and international travel, hotel rates and tour activities. Our partnership with service providers in all the sphere of the travel business allows us access good rates that cannot be found elsewhere for our customers.

How will you compare the travel and tour business in Nigeria with what you find in more developed climes?

The travel and tour business in Nigeria is a fertile ground that has not been fully tilled. On the local sphere we seem to be improving however on the international level we are a work in progress.

From the local package perspective, it is easier to sell a holiday package to states within the country that takes care of transportation, either by road or air travel, hotel accommodation and tour activities that would be great fun to a Nigeria resident.

Pitching the same package to an individual or family living outside the country to come holiday here might require more effort. Nigeria needs to be perceived and known as a tourist attraction by the international community to improve this trend.

Enugu Airport: Reps laud Buhari’s approval for release of funds

T

he House Committee Chairman on Aviation, Nnolim Nnaji has expressed appreciation to President Mohammed Buhari for granting the approval of the sum of N10 billion naira Special Intervention Fund for the reconstruction of the collapsed A k a nu Ib i a m Int e r nat i o na l Airport, (AIIA) Enugu Runway and associated facilities.

The approval was communicated to the South East

delegation during its visit to the Presidential Villa on Thursday last week.

Nnaji who was reacting to the news of the President’s approval during the weekend noted that the airport was critical to the people of South East and environ, because it was the only international gateway serving the entire region.

Nnaji who praised the tenacity and the commitment shown by the Governors, Ohaneze Ndigbo, www.businessday.ng

the Traditional Rulers, the Clergy and the entire leaders of the South East extraction in pursuance of this course, also commended the entire members of the House of Representatives and its leadership for their unprecedented support to the motion earlier sponsored by the South East caucus regarding the airport.

“I commend the Honourable Minister of Aviation, Captain Hadi Sirika for his steadfastness in fighting for the approval of the

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fund. Immediately he assumed office he visited Enugu and assured our leaders that the airport will be fixed before the Christmas season”.

He disclosed that when the Minister met the Aviation House Committee on the unanimous motion mandating it to find out why work had not commenced on the airport runway more than one month after its closure, Sirika gave a commitment that the request for the fund was already @Businessdayng

before the president and that once he received the approval he would be on the contractor’s back to ensure prompt delivery.

Nnaji said he was confident that the Minister will perform the feet judging from the speed with which he delivered on Abuja airport, adding that the Aviation committee by the mandate of the House of Representatives will work with the authorities to monitor the progress of the job once the contractor mobilizes to site.

32

BUSINESS DAY

Thursday 24 October 2019

MADE in aba Zenith, others move to promote made-in-Aba goods

GODFREY OFURUM, Aba

A

part from inadequate road infrastr ucture, lack of access to fi na n c e a n d ma rket are the other challenges faced by the Aba fashion industry, comprising garment and finished l e a t h e r c l u s t e r s -s h o e, belt, bag and trunk box makers.

The just concluded ‘Enyimba Business Fair’—the maiden edition organised by Zenith Bank Plc, in conjunction with Virtual Xchange Group and the Abia State Government— was aimed at showcasing the ingenuity of the people of the state and facilitating access and exposure to both national and international markets for ‘made-in-Aba products.

Adaora Umeoji, deputy managing director, Zenith Bank Plc, explained that the bank is contributing to the growth and development of small and medium e nt e r p r i s e s ( S M E s ) by

providing funding of up to N10million each to as many as 10,000 credible S M E s a t n i n e p e rc e n t interest rate per annum through the Creative Industry Financing Initiative (CFI) fund.

The bank will also create a platform for SMEs in the state to showcase their products in the national and international markets as well as provide them with export finance facilities, which will help to promote the exp or t of their products to the international market.

Umeoji, who was represented by Ifeanyi Dike, assistant general ma nag e r, Z e n i t h Ba n k plc, said the bank will offer digital and e-business solutions to SMEs, which w ould further reduce their cost of operations and ease of access to national and international markets.

She explained that t h e b a n k ’s p l a n f o r SME in Abia is in line with its retail focus and underscores its commitment to the

Central Bank of Nigeria’s (CBN) drive towards achieving financial i n c l u s i o n a n d g ro w t h of real sector of the Nigerian economy.

“It is worthy of note that this fair is a brainchild of ‘Style by Zenith’— a platform of Zenith Bank targeted at supporting and creating

value for customers by focusing on various aspects of their lifestyle and businesses. “ L au n c h e d i n 2 0 1 8 , the Style by Zenith platfor m, which holds annual fairs, conferences and seminars, health initiatives, musical concerts and a host of other activities, is also

dedicated to empowering i n d i v i d u a l c u s t o m e r s, entrepreneurs and SMEs to achieve growth and greater levels of success in their businesses,” she said.

She thanked Governor Okezie Ikpeazu for his tremendous support in making the event possible. “Indeed your

vision and acuity to create the Ministr y of Small and Medium Enterprises Development, amongst many other initiatives, w h i c h hav e l e d t o t h e growth and development of SMEs, who are today the mainstay of the state’s economy, has made Abia State the envy of its peers among the comity of states in the country.

“A s a g l o b a l b r a n d and a clear leader in t h e Nig e r i a n f i na n c i a l space with several firsts in the deployment of innovative products and solutions that ensure convenience, speed and safety of transactions, Zenith Bank has shaped and continues to influence critical aspects of development in Nigeria and has a knack for setting the pace and raising benchmarks.

“We are also widely recognised as a bank that is committed to creating value for its teeming customers, through our best-in-class service, which often exceeds customers’ expectations,“ she stated.

Aba leather industry awaits government support ODINAKA ANUDU

T

he Aba shoe industry is important for creating jobs and growing the gross domestic product (GDP. Such businesses are responsible for creating 59.647 million jobs in the Nigerian economy, contributing 50 percent to the GDP and 7.64 percent to export receipts, according to a recent report by the National Bureau of Statistics (NBS) and the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN).

Many Nigerians underestimate the potential of the Aba industry. One million pairs of shoes are produced by more than 80,000 leather makers in Aba each week. With 48 million pairs produced each year at an average price of N2,500 a pair, the industry is said to be worth up to N120 billion.

T r a d e r s f r o m We s t African neighbours storm the industrialcity every w e ek to buy d if f erent product designs, just as Southern African schools are beginning to place orders directly from the shoe makers. Canadians, Europeans and the Chinese are also in the party, placing orders themselves directly or through their Nigerian proxies, BusinessDay was told in Aba.

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“We are already struggling to meet demands,” said Ken Anyanwu, secretary of the Association of Leather and Allied Industrialists of Nigeria (ALAN), who produced Nigerian armed forces shoes in 2016.

The business is going digital, with sales now online.

The Aba leather industry is made up of shoes, trunk boxes and belts. It provides

employment for tens of thousands, with many specialising in different stages such as designing, patterning, cutting, skiving, stitching, peeling and finishing. It is made up of clusters such as Powerline, Imo Avenue, Bakassi, Aba North Shoe Plaza, Omemma Traders and Workers, ATE Bag, and Ochendo Industrial Market, comprising input supplers,

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among others.

However, the industry is in thriving in chaos as the majority of shoe makers in the industrial city are poorly structured and are not registered at the Corporate Affairs Commission. Exports are made informally, making tracking and planning difficult.

Their machines are crude and much of their work is still done by human labour.

Some of their designs are not in tune with current trends. “ T h i s i s w h e re t h e problem lies. We in Aba have no good machines,” Anyanwu of ALAIN said.

He said this is why the majority of Aba shoe makers are not meeting demands and are over working themselves once orders are placed.

“It is a problem already for us because if a customer comes and we can’t meet demand, he will go elsewhere. Theindustry @Businessdayng

needs retooling,” he said. ba shoe makers import animal skins from China and many parts of Africa and Europe.

“What happens is that the tanneries in Kano and Kaduna process animal skins and sell them as leather in the globalmarket, earning foreign exchange,” said Chinatu Nwagbara, coordinator of Made-inAba Project, who produced shoes for Olusegun Obasanjo in 2016.

“So we go to China and other countries to buy.

Sometimes, we buy our products and re-import,” he said.

Nigeria’s unemployment rate is estimated at 23.1 percent, according to NBS data, and analysts say Aba alone can take thousands more out of the streets.

“Provide the industry with support and you will see what happens in a couple of years to come,” Ike Ibeabuchi, a manufacturing sector analyst, said.

Thursday 24 October 2019

BUSINESS DAY

33

Live @ The STOCK Exchanges Prices for Securities Traded as of Wednesday 23 October 2019 Company

Market cap(nm)

Price (N)

Change

Trades

Volume

Company

Market cap(nm)

Price (N)

Change

Trades

Volume

PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 252,371.10 7.10 -3.40 147 3,765,967 UNITED BANK FOR AFRICA PLC 200,066.62 5.85 2.63 322 16,050,504 ZENITH BANK PLC 533,740.39 17.00 -1.45 427 26,811,833 896 46,628,304 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 193,834.58 5.40 1.89 180 17,561,192 180 17,561,192 1,076 64,189,496 TELECOMMUNICATIONS SERVICES MTN NIGERIA COMMUNICATIONS PLC 2,625,732.18 129.00 - 50 408,850 50 408,850 50 408,850 BUILDING MATERIALS DANGOTE CEMENT PLC 2,491,322.18 146.20 1.60 97 1,693,375 LAFARGE AFRICA PLC. 236,784.59 14.70 -2.97 57 2,876,888 154 4,570,263 154 4,570,263 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 304,225.84 517.00 - 5 1,613 5 1,613 5 1,613 1,285 69,170,222 REAL ESTATE INVESTMENT TRUSTS (REITS) SKYE SHELTER FUND PLC 1,710.00 85.50 - 0 0 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 10,175.81 40.70 - 0 0 UPDC REAL ESTATE INVESTMENT TRUST 13,074.52 4.90 - 0 0 0 0 0 0 OTHER FINANCIAL INSTITUTIONS NIGERIA ENERYGY SECTOR FUND 411.91 552.20 - 0 0 VALUEALLIANCE VALUE FUND 3,312.39 103.20 - 0 0 0 0 0 0 0 0 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 0 0 52,417.35 54.95 - 11 14,620 OKOMU OIL PALM PLC. PRESCO PLC 38,400.00 38.40 - 8 18,138 19 32,758 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 8,520.00 4.26 - 4 225,000 4 225,000 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,500.00 0.50 - 1 5,000 1 5,000 24 262,758 DIVERSIFIED INDUSTRIES A.G. LEVENTIS NIGERIA PLC. 741.24 0.28 7.69 3 124,360 JOHN HOLT PLC. 214.03 0.55 - 1 900 S C O A NIG. PLC. 1,903.99 2.93 - 2 500 TRANSNATIONAL CORPORATION OF NIGERIA PLC 40,241.51 0.99 -1.98 51 13,807,915 18,728.43 6.50 - 36 402,328 U A C N PLC. 93 14,336,003 93 14,336,003 BUILDING CONSTRUCTION ARBICO PLC. 711.32 4.79 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 24,486.00 18.55 - 5 106,564 ROADS NIG PLC. 165.00 6.60 - 0 0 5 106,564 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 2,832.25 1.09 9.00 9 30,302,000 9 30,302,000 14 30,408,564 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 7,986.09 1.02 - 1 1,579 GOLDEN GUINEA BREW. PLC. 242.22 0.89 - 0 0 GUINNESS NIG PLC 64,287.74 29.35 - 34 140,832 INTERNATIONAL BREWERIES PLC. 108,307.86 12.60 - 27 1,013,902 NIGERIAN BREW. PLC. 368,257.34 46.05 - 40 297,367 102 1,453,680 FOOD PRODUCTS DANGOTE FLOUR MILLS PLC 115,000.00 23.00 - 58 300,940 DANGOTE SUGAR REFINERY PLC 122,400.00 10.20 - 34 380,904 FLOUR MILLS NIG. PLC. 61,915.73 15.10 - 23 219,186 HONEYWELL FLOUR MILL PLC 7,771.59 0.98 -3.06 14 424,710 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 766.26 4.30 - 0 0 NASCON ALLIED INDUSTRIES PLC 39,344.16 14.85 - 5 37,587 UNION DICON SALT PLC. 3,321.07 12.15 - 0 0 134 1,363,327 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 18,030.74 9.60 - 17 86,222 NESTLE NIGERIA PLC. 967,040.63 1,220.00 - 86 873,961 103 960,183 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 4,390.46 3.51 - 28 475,376 28 475,376 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 22,036.15 5.55 - 34 217,593 UNILEVER NIGERIA PLC. 153,391.64 26.70 - 37 293,982 71 511,575 438 4,764,141 BANKING ECOBANK TRANSNATIONAL INCORPORATED 130,281.81 7.10 - 24 168,385 FIDELITY BANK PLC 49,257.15 1.70 -2.35 48 3,400,492 GUARANTY TRUST BANK PLC. 768,153.78 26.10 -0.76 136 18,063,855 JAIZ BANK PLC 13,258.91 0.45 -6.25 8 516,110 51,822.75 1.80 - 12 249,725 STERLING BANK PLC. UNION BANK NIG.PLC. 203,845.27 7.00 - 29 224,822 UNITY BANK PLC 7,364.28 0.63 - 4 63,071 WEMA BANK PLC. 21,987.45 0.57 1.79 20 633,512 281 23,319,972 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 1 100 AIICO INSURANCE PLC. 4,435.33 0.64 - 18 448,872 AXAMANSARD INSURANCE PLC 17,850.00 1.70 - 0 0 CONSOLIDATED HALLMARK INSURANCE PLC 2,764.20 0.34 - 1 1,000 CONTINENTAL REINSURANCE PLC 24,064.77 2.32 - 10 274,600 CORNERSTONE INSURANCE PLC 5,597.21 0.38 - 6 114,167 909.99 0.20 - 0 0 GOLDLINK INSURANCE PLC GUINEA INSURANCE PLC. 1,228.00 0.20 - 0 0 INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 0 0 LASACO ASSURANCE PLC. 1,904.09 0.26 -7.14 15 1,580,760 LAW UNION AND ROCK INS. PLC. 2,019.28 0.47 - 30 2,005,028 LINKAGE ASSURANCE PLC 4,080.00 0.51 - 5 109,734 MUTUAL BENEFITS ASSURANCE PLC. 2,234.55 0.20 - 1 100 NEM INSURANCE PLC 10,666.62 2.02 -2.88 18 945,295 NIGER INSURANCE PLC 1,547.90 0.20 - 0 0 PRESTIGE ASSURANCE PLC 2,745.10 0.51 - 1 113 1,333.75 0.20 - 0 0 REGENCY ASSURANCE PLC SOVEREIGN TRUST INSURANCE PLC 1,668.16 0.20 - 3 12,099 STACO INSURANCE PLC 4,483.72 0.48 - 0 0 STANDARD ALLIANCE INSURANCE PLC. 2,582.21 0.20 - 0 0 SUNU ASSURANCES NIGERIA PLC. 2,800.00 0.20 - 1 500 UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 0 0 UNIVERSAL INSURANCE PLC 3,200.00 0.20 - 0 0 VERITAS KAPITAL ASSURANCE PLC 2,773.33 0.20 - 0 0 WAPIC INSURANCE PLC 4,282.48 0.32 6.25 20 3,372,995 130 8,865,363 MICRO-FINANCE BANKS NPF MICROFINANCE BANK PLC 2,721.10 1.19 - 2 115 2 115

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MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 4,200.00 1.00 - 2 42,600 ASO SAVINGS AND LOANS PLC 7,370.87 0.50 - 0 0 5,796.93 1.39 - 0 0 INFINITY TRUST MORTGAGE BANK PLC RESORT SAVINGS & LOANS PLC 2,265.95 0.20 - 0 0 2,949.22 3.02 - 0 0 UNION HOMES SAVINGS AND LOANS PLC. 2 42,600 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 8,000.00 4.00 - 25 702,829 CUSTODIAN INVESTMENT PLC 36,467.56 6.20 - 5 5,150 660.00 0.44 - 0 0 DEAP CAPITAL MANAGEMENT & TRUST PLC FCMB GROUP PLC. 32,080.39 1.62 1.25 42 9,392,058 ROYAL EXCHANGE PLC. 1,029.07 0.20 - 2 1,297 387,517.72 37.00 - 22 19,081 STANBIC IBTC HOLDINGS PLC UNITED CAPITAL PLC 12,300.00 2.05 - 45 2,844,028 141 12,964,443 556 45,192,493 HEALTHCARE PROVIDERS EKOCORP PLC. 1,680.29 3.37 - 1 500 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 781.69 0.22 -8.33 2 198,200 3 198,700 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 494.58 0.50 - 0 0 0 0 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 FIDSON HEALTHCARE PLC 8,345.44 4.00 - 0 0 GLAXO SMITHKLINE CONSUMER NIG. PLC. 7,653.61 6.40 - 17 146,432 3,450.47 2.00 - 2 2,200 MAY & BAKER NIGERIA PLC. NEIMETH INTERNATIONAL PHARMACEUTICALS PLC 759.66 0.40 - 7 643,003 556.71 3.62 - 0 0 NIGERIA-GERMAN CHEMICALS PLC. PHARMA-DEKO PLC. 325.23 1.50 - 0 0 26 791,635 29 990,335 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 781.44 0.22 -4.55 7 926,327 7 926,327 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 1,470.89 0.50 - 0 0 0 0 IT SERVICES CWG PLC 6,413.06 2.54 - 0 0 NCR (NIGERIA) PLC. 486.00 4.50 - 0 0 292.02 0.59 - 3 2,100 TRIPPLE GEE AND COMPANY PLC. 3 2,100 PROCESSING SYSTEMS CHAMS PLC 1,127.05 0.24 - 12 989,820 E-TRANZACT INTERNATIONAL PLC 9,996.00 2.38 - 0 0 12 989,820 TELECOMMUNICATIONS SERVICES AIRTEL AFRICA PLC 1,157,510.66 308.00 - 1 12 1 12 23 1,918,259 BUILDING MATERIALS BERGER PAINTS PLC 2,173.68 7.50 - 4 7,605 CAP PLC 17,885.00 25.55 - 12 14,564 CEMENT CO. OF NORTH.NIG. PLC 210,296.02 16.00 - 12 43,475 MEYER PLC. 313.43 0.59 - 0 0 1,769.32 2.23 - 0 0 PORTLAND PAINTS & PRODUCTS NIGERIA PLC PREMIER PAINTS PLC. 1,156.20 9.40 - 0 0 28 65,644 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,256.91 2.09 - 0 0 2,536.30 1.44 - 7 36,258 CUTIX PLC. 7 36,258 PACKAGING/CONTAINERS BETA GLASS PLC. 26,898.49 53.80 - 5 2,351 GREIF NIGERIA PLC 388.02 9.10 - 0 0 5 2,351 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 0 0 0 0 40 104,253 CHEMICALS B.O.C. GASES PLC. 2,547.42 6.12 - 1 500 1 500 METALS ALUMINIUM EXTRUSION IND. PLC. 1,781.64 8.10 - 0 0 0 0 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 1 1,000 1 1,000 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 83.60 0.38 - 0 0 0 0 2 1,500 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,252.54 0.20 - 1 25,000 1 25,000 INTEGRATED OIL AND GAS SERVICES OANDO PLC 42,266.80 3.40 -2.86 39 811,886 39 811,886 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 53,332.04 147.90 - 7 1,999 CONOIL PLC 10,686.86 15.40 - 11 84,054 ETERNA PLC. 3,716.81 2.85 - 14 52,833 FORTE OIL PLC. 20,839.70 16.00 - 17 16,805 MRS OIL NIGERIA PLC. 5,166.13 16.95 - 4 400 TOTAL NIGERIA PLC. 41,829.09 123.20 - 36 28,158 89 184,249 129 1,021,135 ADVERTISING AFROMEDIA PLC 1,820.01 0.41 - 0 0 0 0 AIRLINES MEDVIEW AIRLINE PLC 17,551.17 1.80 - 0 0 0 0 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 294.09 0.25 - 0 0 0 0 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 2,387.46 4.05 - 0 0 TRANS-NATIONWIDE EXPRESS PLC. 393.83 0.84 - 2 19,000 2 19,000 HOSPITALITY TANTALIZERS PLC 642.33 0.20 - 0 0 0 0 HOTELS/LODGING CAPITAL HOTEL PLC 4,723.78 3.05 - 1 613 IKEJA HOTEL PLC 2,452.98 1.18 - 0 0 TOURIST COMPANY OF NIGERIA PLC. 7,862.53 3.50 - 2 820 TRANSCORP HOTELS PLC 41,042.18 5.40 - 0 0 3 1,433 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 4,800.00 0.40 - 0 0 0 0 PRINTING/PUBLISHING ACADEMY PRESS PLC. 205.63 0.34 -2.86 4 181,669 LEARN AFRICA PLC 856.31 1.11 - 8 25,269 STUDIO PRESS (NIG) PLC. 1,183.82 1.99 - 1 2,500 UNIVERSITY PRESS PLC. 496.12 1.15 - 0 0 13 209,438 ROAD TRANSPORTATION ASSOCIATED BUS COMPANY PLC 729.39 0.44 - 1 4,985 1 4,985 SPECIALTY INTERLINKED TECHNOLOGIES PLC 757.44 3.20 - 2 300 SECURE ELECTRONIC TECHNOLOGY PLC 1,126.31 0.20 - 0 0 2 300

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34

Thursday 24 October 2019

BUSINESS DAY

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Thursday 24 October 2019

BUSINESS DAY

Live @ The Exchanges Market Statistics as at Wednesday 23 Oct. 2019

Top Gainers/Losers as at Wednesday 23 October 2019 LOSERS

GAINERS Company

Opening

Closing

Change

DANGCEM

N143.9

N146.2

2.3

UBA

N5.7

N5.85

0.15

FBNH

N5.3

N5.4

0.1

UAC-PROP

N1

N1.09

OMOMORBNK

N0.5

N0.55

Company

Opening

Closing

Change

WAPCO

N15.15

N14.7

-0.45

ZENITHBANK

N17.25

N17

-0.25

ACCESS

N7.35

N7.1

-0.25

0.09

GUARANTY

N26.3

N26.1

-0.2

0.05

OANDO

N3.5

N3.4

-0.1

ASI (Points) DEALS (Numbers) VOLUME (Numbers)

26,397.94 2,668.00 290,935,167.00

VALUE (N billion) MARKET CAP (N Trn)

2.779

I

ncreased bargain in stocks like Dangote Cement Plc, UBA Plc and that of FBN Holdings helped the equities market to close in green on October 23. The value of listed stocks advanced by N15billion as 7 stocks gained as against 11 losers. The Nigerian Stock Exchange (NSE) All Share Index (ASI) increased by 0.12percent, while the Year-to-Date (YtD) return stood at -16.01percent.

The All Share Index closed at 26,397.94 points as against the preceding day’s close of 26,365.83points while Market Capitalisation closed at N12.850 trillion against preceding day close of N12.835 trillion.

Dangote Cement Plc rallied most from N143.9 to N146.2, adding N2.3 or 1.60percent, UBA Plc advanced from N5.7 to N5.85, adding 15kobo or 2.63percent, while FBN Holdings Plc moved from N5.3 to N5.4, adding 10kobo or 1.89percent.

On the losers table, La-

farge Africa Plc dipped most from N15.15 to N14.7, losing 45kobo or 2.97percent, Access Bank Plc followed after its share price declined from N7.35 to N7.1, losing 25kobo or 3.40percent, while Zenith Bank Plc was down from N17.25 to N17, losing 25kobo or 1.45percent.

Market watchers noted that though the equities market closed north, due to late rise in the second

most capitalised stock Dangote Cement, other indicators came in weaker in Wednesday session.

With all sectors closing under except for the consumer goods sector, market breadth returning negative and less market activity, analysts expect a pressured trading session on Thursday despite the possibility of bargain hunting.

The volume of stocks traded decreased by

58.08percent from 694.02 million to 290.93 million, while the total value of stocks traded decreased by 64.49percent, from N7.82 billion to N2.77 billion in 2,668 deals.

The Financial Services sector led the activity chart with 109.38 million shares exchanged for N1.189 billion; followed by Construction/Real Estate with 30.409 million shares traded for N34 million.

L-R: Mike Daniel Katsit , director, Lagos Commodities and Futures Exchange (LCFE); Akin AkeredoluAle, managing director/ CEO, Emmanuel Devedeux GMEX group’s head, Business Development; Mike Itegboje, past president, Chartered Institute of Stockbrokers (CIS); Rasheed Yussuff, LCFE’S director, and Emeka Madubuike, LCFE’S director, during GMEX Group’s courtesy visit to LCFE in Lagos.

LSEG trading statement shows total income of £587 million in Q3

I

n nine months to September 30, London Stock Exchange Group (LSEG) grew total income by 9percent to £1.727billion, while quarter-on-quarter (QoQ) the total income increased by 12percent to £587 million.

The third-quarter result summary shows Information Services revenue went up 9percent to £230 million. FTSE Russell was up 10percent, with strong performance in subscription revenues while Post Trade – LCH income was up 19percent to £197 million.

The strong results was driven by 22percent revenue growth in Over-TheCounter (OTC) clearing

with strong volumes at SwapClear and continued growth in net treasury income, up 16percent.

Post Trade - Italy income was up 8percent to £39 million.

The good performance was supported by growth in clearing, settlement, custody and net treasury income, reflecting good volumes in fixed income.

Capital markets revenue was up by 14percent to £102 million. On a like-for-like basis (adjusting for last year’s IFRS 15 change), revenue increased 5percent, with growth in Primary Markets and in fixed income trading partly offset by subdued equity markets trading; while technology www.businessday.ng

revenue went up 2percent to £16 million.

While commenting on performance in Q3, David Schwimmer, CEO, LSEG said: “The Group continues to perform well and has delivered a strong Q3 performance. LCH’s OTC clearing services saw continued strong volumes during the period in both member and client clearing. In Information Services, FTSE Russell reported 10percent growth as subscription revenues remained strong. Capital Markets also produced a good overall performance against a backdrop of continued challenging market conditions.

“During the quarter, we announced the pro-

posed acquisition of Refinitiv, a leading global provider of data, analytics and financial markets solutions. This is a transformational transaction that accelerates our Group’s strategy, positioning us in key areas of future growth as a global financial markets infrastructure leader.

“Together, we will create a multi-asset class capital markets business and bring world class data content, management and distribution capabilities to our customers on an open access basis.

The transaction offers substantial strategic and financial benefits to our shareholders, customers, employees and other stakeholders.”

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Global market indicators FTSE 100 Index 7,260.74GBP +48.25+0.67%

Nikkei 225 22,625.38JPY +76.48+0.34%

Generic 1st ‘DM’ Future 26,770.00USD +7.00+0.03%

Deutsche Boerse AG German Stock Index DAX 12,798.19EUR +43.50+0.34%

S&P 500 Index 2,999.32USD +3.33+0.11%

12.850

Market gains N15bn as investors raise bet on Dangote Cement, other stocks Stories by Iheanyi Nwachukwu

35

Shanghai Stock Exchange Composite Index 2,941.62CNY -12.76-0.43%

FCMB expands branch network

R

esidents and businesses in Oshodi, Lagos State, and its environs now have an opportunity to enjoy the excellent financial services offered by First City Monument Bank (FCMB). This is because the bank at an impressive ceremony on Tuesday, October 22, 2019 opened an ultra-modern and fullservice branch strategically located at 481, Agege Motor Road, opposite Arena Shopping Complex.

With this development, customers of FCMB around the axis of Ladipo in Mushin now have another convenient location for their transactions to further enjoy the valued-added offerings which the Bank has been known for since its establishment 36 years ago.

The opening of the new branch in Oshodi, one of the major business hubs in Lagos, is in line with FCMB’s strategic expansion drive and commitment towards bringing its banking services closer to the doorsteps of more people and businesses, while promoting financial inclusion in Nigeria.

FCMB’s new outlet in Oshodi has been equipped with unique physical and technological infrastructure that will ensure convenient transactions and sundry financial service delivery to existing and potential customers in a relaxed and tranquil environment.

Speaking at the opening ceremony, the Executive Director, Business Development of FCMB, Bukola Smith, reiterated the Bank’s commitment to strategically grow its network and retail business to positively impact the individual and business aspirations of its ever-increasing customer base and the general public. According to her: ‘’Though, most customers prefer to carry out transactions from wherever they are, using our highly convenient and secure alternate channels, such as our *329# USSD code, enhanced FCMBMobile, FCMBOnline, and ATMs spread across Nigeria, some still prefer human interaction when banking. This additional customer touch point will further boost our offerings

@Businessdayng

in line with our core values of Execution, Professionalism, Innovation and Customer-focus (EPIC) in a conducive and convenient environment’’.

Smith reiterated that FCMB will continue to raise the bar in the way customers are served and the kind of environment under which such services are provided to meet their respective lifestyles.

Also speaking, the Divisional Head, Service Management & Technology of FCMB, Oluwakayode Adigun, said, ‘’our Oshodi branch, like other branches of FCMB across Nigeria, brings with it, something special in terms of structure and aesthetics. Part of our commitment to promoting a cleaner and greener environment, is by use of renewable energy and in this new branch, we have adopted solar technology which is a clean energy solution that produces minimal waste. It is nonpollutant and great for the environment’’.

Adigun, who was represented by the Group Head, Branch Services, Ademola Idowu, added that, ‘’the Branch will also offer excellent customer experience provided by our team of professionals. We are committed to scaling our operation, building the requisite capabilities while deploying the best ways to simplify banking for customers who use our robust technology platform’’.

In his goodwill message, the Chairman of Oshodi-Isolo Local Government, Idris Muse-Ariyoh, commended FCMB for its giant strides in the financial services industry and immense support to its customers and their wellbeing.

The Chairman, who was represented by a top official of the Council, Toyin Smith, stated that, “we have heard a lot about the good things this bank is doing all over the place. Now, we have been granted the privilege of experiencing first class financial service at its best for which FCMB is now well known for.

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Thursday 24 October 2019

BUSINESS DAY

cityfile A’ Ibom secures 15 convictions over gender-based violence ANIEFIOK UDONQUAK, Uyo

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Flood devastated the community of Ase-Azaga in Ogba/Egbema/Ndoni LGA, Rivers State. The community is calling on the state government and federal government to come to their aid.

Lagos-Badagry road: Lawmaker sends SoS to FG … decries slow pace of work

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member of the Lagos State Hous e of Assembly, Setonji David has urged the Federal Government not to pay a lip service to the reconstruction of LagosBadagry Expressway just as he decried the pace of work since the award of contract to rehabilitate sections of the failed road.

David, who represents Badagry constituency II at the Lagos State House of Assembly, made the appeal on Tuesday. According to him, though the project has been approved by the federal government, the snail pace at which the work is going will elongate the sufferings and

the agonies of the residents of the area.

“We are going through hell on Lagos- Badagry Expressway. Nobody wants to ply the road again. The journey from Mile 2 to Badagry in the 80s and early 2000 was just 30 minutes maximum, but now we spend five hours.

“It seems the federal government is paying lip service to the plights of Nigerians in this area otherwise, the contractor would have been well mobilised for serious work.

Sometimes, I wonder whether Badagry has been abandoned by the state and federal government. I left my home in Badagry at 5 am and I could not get to Lagos until 10 am. This is a journey

that should have taken me ordinarily 30 minutes and at worst 40 minutes to get to Lagos.

“The road is in terrible shape, extremely bad as if the people of Badagry have done something wrong to belong to Nigeria,” David, chairman of Lagos State House committee on home affairs, said.

According to him, though the federal government had awarded contract for some sections of the road, the snail pace at which the work was going would make the residents suffer for many years.

David observed that the section from Okokomaiko to Agbara, given to the Federal Road Maintenance

Agency (FERMA) to fix was not making any appreciable progress.

“The way they (FERMA) are going, that project will not be completed in five to six years. That means our suffering continues,” he said.

He added that the section from Agbara to Seme border, also approved by the federal government might not be completed in many years to come.

He said “as a representative of the people, my finding showed that the contractor was not well mobilised to commence serious job.

“I learnt that project was awarded for about N36 billion and the contractor was paid N1 billion for a year, that means in another 36 years, that project will not be completed.

Lagos task force seizes 4,477 motorcycles in 4 months JOSHUA BASSEY

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he Lagos State Task Force has dsiclosed that 4,477 motorcycles have been seized from traffic violators in various parts of the state from June 2019 till date.

O l ay i n k a Egb e y e m i , chairman of the task force, said that some of the motorcycles were, however, retrieved by their owners after receiving penalties while the rest were still in the custody task force.

According to Egbeyemi, after a six-month period, a

court order would be sought and the unclaimed motorcycles destroyed by the Lagos State government to serve as a deterrent to others.

“We will crush them.

There is a company that helps the government to crush them, after which they are sold as scrap.

“But the governor no longer wants them sold as scrap; he wants them crushed or destroyed totally. We have ordered crushing machines from abroad because the one in Epe is faulty.

The task force chairman www.businessday.ng

said that the new crushing machines would be arriving the state.

He said that the corporate commercial motorcycles such as Opay and Gokada, which were also seized, would have the same fate as no individual or organisation was above the law.

“The Gokada, Opay and those other corporate motorcycles rode against traffic (one-way) that is why the riders were arrested and the motorcycles confiscated.

“The penalty for such offences is total forfeiture.

The owners of those motorcycles (Gokada and Opay) were to be charged to court but some of them ran away.”

He noted that motorcyclists were usually hesitant to attempt retrieving their motorcycles because of the possibility of serving a jail term.

“Some of the motorcyclists came and the court issued them fine, while the others are usually afraid to come because one of the penalties for driving against traffic (one-way) is an option of one-year imprisonment and they are scared of going to jail,” he said.

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kwa Ibom government says it has secured 15 convictions on cases of gender-based violence involving sexual assault, rape and defilement of young girls in the state.

There have been many reported cases of rape and sexual assaults in the state and this has recently attracted the attention of top officials including the wife of the governor, Martha Udom Emmanuel whose pet project is helping to rehabilitate rape victims.

The state police command has paraded many suspected rapists including fathers who allegedly assaulted their daughters as well as a pastor who defiled a 10-year-old and duped her in a market square in Use Offot, near Uyo, the state capital.

In a bid to check the growing menace, a one-day

enlightenment campaign was organised by the state ministry of women affairs drawing participants from women groups and schools in the state.

Gloria Edet, commissioner for women affairs and agriculture who spoke at the event said the state government last year established a Gender-Based Violence (GBV) prevention and response centre for survivors.

“The greatest challenge with GBV is the complicity by some security agencies, who release offenders without charging them to court, as well as compromise by survivors and their families, who go behind to collect money from perpetrators and settle out of court.

According to experts, one in three women in their life time has suffered one form of GBV or another while 95 percent of women and girls are trafficked globally for sexual exploitation and gratification.

NGO tasks lawmakers on budget monitoring ANIEFIOK UDONQUAK, Uyo

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olicy Alert, a nongovernmental organisation working to promote socioeconomic development in the Niger Delta, has urged lawmakers in Akwa Ibom State to step up its oversight function on monitoring of budget implementation.

The NGO made the call during a public hearing on the 2020 appropriation bill organised by the Akwa Ibom State House of Assembly committee on appropriation and finance.

Presenting its memorandum to the committee, Tijah Bolton-Akpan, director of the organisation said: “We urge the 7th assembly to pass this budget quickly to enable us return our longdistorted budget cycle to a January- December calendar.

“But beyond that, we look forward to a more effectively monitoring and implementation of budget in 2020. In the recent past, poor capital budget implementation and leakages have been enabled by weak oversight on the part of institutions saddled with the responsibility of oversight.

“These include the various committees of the house of assembly, especially its public accounts committee.

“Despite several budget infractions by ministries, departments and agencies as highlighted by successive reports of the auditor general of Akwa Ibom State, the house has failed to bring such erring institutions to @Businessdayng

book, a situation that allows corrupt and inefficient practices to fester.”

The memorandum also asked the assembly to increase allocation to the office of the state auditor general, noting that the continued underfunding and denial of autonomy to that office appears set to weaken its oversight function over budget implementation in the state.

“The state auditor general’s office was only able to access 10 percent of the paltry 500 million that was voted for it in the 2018 and even though we don’t have the details for 2019, it is doubtful that 2019 will be any different. This situation adversely affects the quality of audit reports and its timeliness, undermines transparency and accountability, and allows corruption to thrive.”

The speaker of the assembly, Aniekan Bassey, represented by his deputy, Felicia Bassey, assured participants of the commitment of the lawmakers to the early passage of the budget in a transparent manner.

Chairman of the appropriation committee, Uduak Ududoh stated the commitment to opening up the budget process to public input.

According to him, this has been reflected by the extension of invitation to a broader range of stakeholders. He said that the house would be guided by the input of the public in its deliberations on the budget.

Thursday 24 October 2019

BUSINESS DAY

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Thursday 24 October 2019

BUSINESS DAY

news FMDQ exchange lists Primero BRT securitisation SPV Bond IHEANYI NWACHUKWU

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MDQ Securities Exchange PLC (“FMDQ Exchange” or “the Exchange”), the choice platform for the registration, listing, quotation, trading and recording of financial securities, is pleased to announce the admission for listing on its platform, the Primero BRT Securitisation SPV PLC 16,500,000,000 Series 1 Fixed Rate Bond (the Primero BRT Bond).

This bond listing is in line with the Exchange’s mandate of providing a reliable and credible avenue for corporate and governments, amongst others, to raise capital and by so doing, foster the deepening of the markets and ultimately, the economic development of the nation. Like other debt securities listed on FMDQ Exchange,

the Primero Bond shall be availed global visibility through the FMDQ Exchange website and systems, governance and continuous information disclosure to protect investor interest, credible price formation amongst other benefits derived from being an FMDQ Exchange listing.

Primero BRT Securitisation SPV PLC, a special purpose vehicle, was set up by Primero Transport Services Limited, a private limited liability company that provides public transportation service to residents of Lagos State, to raise finance to support its operation through the issuance of debt securities. The net proceeds of the Primero Bond will be utilised for funding the operating assets of the Bus Rapid Transit System, amongst others.

CBN bars banks from OMO auctions for local...

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(Oct.23) with number FMD/ DIR/GEN/OGC/14/009, titled ‘LETTER TO ALL BANKS’, the CBN said: “Effective today, October 23 2019, the Central Bank of Nigeria directs that individuals and local corporates are specifically excluded from investing in Open Market Operations (OMO) auctions. Therefore your participation at the auctions should be on propriety and non-proprietary basis, without these classes of investors.”

The new rule would not apply to foreign portfolio investors, because they hold a significant amount of OMO bills estimated at nearly $18billion, and a move to restrict them could impact the foreign exchange market, sources tell BusinessDay. “The CBN is uncomfortable with the level of demand at OMO auctions recently and probably wants to reduce its ballooning OMO liabilities,” Omotola Abimbola, fixed income analyst at Lagos-based Chapel Hill Denham said.

OMO is a liquidity management tool used by the CBN to control the volume of money in circulation.

Typically a central bank injects or withdraws liquidity in its currency through the banks by buying or selling government bonds. In Nigeria, however, the OMO window has become another avenue for local investors and non-banks to benefit from attractive rates at OMO auctions.

This is because the CBN has been aggressive about liquidly management since 2016, which has seen the cost of managing OMO go up as the apex bank borrowed aggressively.

“OMO has given better yield than the debt management office’s primary auctions, and that has resulted in Investors’ preference for the CBN auctions,” said Oluwatosin Ayanfalu, an

analyst at Lagos-based Zedcrest Capital. “It is an anomaly so CBN is reverting to the original purpose for OMO.” The move is coming after the CBN had in a circular dated Oct 18, ordered banks to ensure that all demands at auctions be “fully backed by appropriate funding,” or risk sanctions after observing a high level of unfunded demand which unnecessarily results in higher cost of borrowing because of excessive demand.

Analysts say while the CBN has been rationing its bills lately and supplying little to the market, banks and dealing members in a move to access more bills might have been hiding behind corporates to bid, a suspicion that might have also informed the CBN’s new policy.

By restricting the local class of investors, demand pressure is expected to ease and rates on the instrument to decline subsequently.

“Limiting the window to banks is a step towards returning the instrument to its traditional role, but the CBN still has a step to go since foreign investors can access the window,” said Abimbola.

Despite restriction from primary OMO auctions individuals and corporates will still have access to the secondary market.

In the CBN’s OMO auction conducted on Monday, the 185day instrument was oversubscribed by investors following more than N700 billion worth of OMO bids in the previous auction which led to increased system liquidity.

Investors’ bids were more than double as bid-to-cover ratio stood at 2.89x while 353day had a bid to cover of 1x and 91-day stood at 1x.

Analysts at Chapel Hill Denham expects the CBN to float an OMO auction today to rollover maturing OMO bills (N349bn).

Total CBN securities are about N17trn, with about 34 percent currently held by forwww.businessday.ng

L-R: Ndukwe Osogho-Ajala, founder/CEO, Soulmate Industries; Doyin Salami, CEO, Kainos Edge Consulting; Ndubuisi Ekekwe, chairman, FASMICRO Group; Yemisi Makinde, MD/lead consultant, Quant Hub; Harry Benjamin, success coach/global entrepreneur, all speaker, and Seyi Adeoye, CEO, Pierrine Consulting Limited/program director, Market Research Academy, after a panel session at the Masterclass training organised by Market Research Academy in Lagos.

Pic by David Apara

Nigeria’s most ambitious industrial plan...

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to five years.

The expectation was that N5 trillion would be added to manufacturing revenues annually.

“With the National Industrial Revolution Plan (NIRP), we have begun to shape a new economic direction for Nigeria; and with strong conviction, an eye on the future, and hard work, we will sustain this journey of transformation and attain the goals of industrialisation,” Olusegun Aganga, former President Goodluck Jonathan’s outspoken minister of industry, trade and investment, had said at the launch of the National Industrial Revolution Plan (NIRP) on February 13, 2014.

But this plan will end this year in the shelves, with most of its parts unexecuted.

In the automotive industry, the NIRP specifies the development of auto supplier parks and creation of auto industrial parks, with dedicated ports and berths for assemblers.

The government also pledged to encourage private sector procurement of locally assembled automobiles.

But these are not happening. Patronage for locally assembled vehicles was down to 6,999 in 2017, according to PricewaterhouseCoopers (PwC), as against 555,716 in South Africa; 181,001 in Egypt; 168,913 in Morocco,

and 94,408 in Algeria. The attention of government since 2015 has been shifted to raising 35 percent levy and 35 percent duty on imported vehicles, including 30 percent duty on ‘accidented’ vehicles.

“Imported used car segment (Tokunboh) dominates the industry, accounting for 74 percent of all vehicle imports, making Nigeria the largest in the world. Ten percent of imported cars are less than three years old, while 63 percent are over 11 years,” Andrew Nevin, partner and chief economist at PwC Nigeria, said.

Apart from gas industries parks/cities which only exist on paper, the government in the plan pledged to facilitate the development of eight industrial cities in Nigeria, with a combined land size of 6,000 to 10,000 hectares and 700 to 1,200 megawatts of captive power capacity.

“Industrial cities will be operating hubs (or delineated areas) where manufacturers have the required infrastructure and support to succeed,” the NIRP plan said.

But this is yet to happen.

The government agreed that the textile industry was important and that it would lift the sector by targeting cotton fund and providing support for cotton farmers. But all the manufacturers BusinessDay spoke with agree that this has not happened.

“We used to have about 127 textile firms in Nigeria

Eni begins gas, condensate production...

Continued from page 2

largest gas reserves in Africa, only about 25 percent of those reserves are being produced or are under development, according to Shell.

Nigeria is also home to the six-train, 22-millionmetric-tonnes-a-year capacity Nigeria Liquefied

Natural Gas (LNG) facility whose capacity is set to be raised to 30 million mt per year once a planned seventh train is built at the site.

Other oil majors are also aggressively pursuing gas development projects in Nigeria. Shell Nigeria Gas (SNG), the country’s first and wholly-owned subsidiary

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but that has come down to two or three now,” said Grace Adereti, president, Nigerian Textile Manufacturers Association (NTMA), at a Made-in-Nigeria stakeholders’ meeting in Lagos.

The NIRP recognises the importance of housing and construction to industrial development and agreed to build 300 units of housing in each state of Nigeria.

However, five years down the line, the 17 million housing shortage figure is yet to change since 2014. In fact, many more are becoming homeless as the population rises by 2.6 percent annually.

The Bureau of Public Service Reform (BPSR) said in 2017 that 108 million Nigerians were technically homeless as of that year.

The government further pledged to establish an appropriate pricing regime for the electricity industry, but this is far from being a reality. Up till now, Nigerians are paying less for electricity, with many unable to procure meters from the electricity distribution companies.

“We are sure that there is a need to review the industrial plan, assess the level of achievement of the plan and project for the next five years,” Mansur Ahmed, president, Manufacturers Association of Nigeria (MAN), told BusinessDay on phone.

“There are areas where the plans have not met expectations in terms of today’s realities and we have to review it to make it more realistic for

today’s situation,” he further said. The NIRP further promised to review the Export Expansion Grant to promote export of finished goods. Up till today, the government is yet to restart the export grant suspended in 2013.

Also, the NIRP promised to link skills development to real jobs to enable Nigerians to develop competence in areas they can put to immediate industrial use. Part of the plan is to develop skills development boards at the national level, and in each of the 36 states. This has not happened.

More than ever before, many graduates leaving Nigeria’s higher institutions are ill-prepared to compete in the 21st century, with many industries seeking talents from other parts of Africa, Europe, Asia and the Americas.

“We must redefine our education for the future and tailor it towards what the industry of the future requires,” Ibukun Awosika, chairman, First Bank, said recently at the 25th Nigerian Economic Summit in Abuja.

Though the plan was prepared by the President Jonathan government, the present administration of Muhammadu Buhari has, on many occasions, pledged to implement it. But this has yet to happen.

“Government is a continuum, and half-hearted implementation only shows how much unserious we are,” a manufacturer, who did not want his name in print, said.

of an international oil company involved in domestic gas distribution in Nigeria, increased its gas distribution capacity by over 150 percent following the safe completion of its second gas train, the Agbara-Ota Capacity Increase Project, in June. The facility enables SNG and its partners to achieve regular gas supply to subscribed industries in Ogun State while efforts are

on-going to reach more states.

In the past, the entire laws and policies within the Nigerian petroleum sector were technically skewed in favour of oil to the detriment the country’s vast gas resource.

But this narrative is beginning to change, although relics of the old regime can still be seen.

@Businessdayng

•Continues online at www.businessday.ng

Tuesday 24 October 2019

BUSINESS DAY

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news Fake News: Continuous fixation with Aiteo and destructive menace of deliberate mischief IFEANYI JOHN

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he presence of active and formidable indigenous companies in Nigeria’s upstream oil and gas sector ought to be a source of pride to any Nigerian. It is a testimony of how far the country has emerged in terms of developing local capacity.

It shows that Nigerians, if given an opportunity, can excel in areas that are currently deemed exclusive to people from developed nations. However, the reverse is the case in Nigeria.

It is challenging to operate in the Niger Delta, no doubt, after the region’s several years of abuse and marginalisation. But it is even more difficult for these indigenous oil companies as they lack the resources and economies of scale deployed by International Oil Companies (IOCs) to cushion the effects of instability in the region.

They are constantly dealing with issues including oil theft, vandalism, restive youths, and government pressure, yet they thrive in the face of these threats.

It is, therefore, further saddening to see indigenous companies being deliberately maligned by fake news via the deployment of what is referred to as ‘Yellow Press’.

Yellow press, simply put, is a form of pseudo-journalism which involves the reporting of mistruths and unverified facts to perpetuate a preconceived heinous agenda. The scourge has gained grounds in recent years to the extent that numerous sensitization campaigns have been executed worldwide to equip the public with the necessary skills to discern between the menace and real journalism.

It is with these discerning eyes that we set to investigate a recent publication on some alleged ‘’reputable‘’ newspapers maintaining that there is an instigation of a wind-up proceeding against Nigeria’s largest indigenous oil & gas company, Aiteo, on account of a purported contractor invoice of N259 million, an amount less than a fraction of its corporate social responsibility programme for just a quarter in the same region, or let alone, its several assets running into billions of dollars from any of its operational bases.

This story doesn’t add up for many reasons. Firstly, we have followed Aiteo’s success story for over a decade. This is a company that has ramped up oil production from 23,000 bpd at the onset of the OML 29 acquisition, to over 90,000 bpd within four years. In the process, Aiteo has made laudable contributions to education in its host com-

munities in Bayelsa, Aiteo has also made monumental contributions into sports at National and continental levels, emerging the current biggest football sponsor in Nigeria.

A company source who did not wish to be named due to the “absurdity of the claims”, dismissed the matter emphatically as falsehood.

“The position conveyed by that publication is unashamedly conjectural and a product of wishful thinking propagated by reprehensible individuals who actively seek – and will continue to fail - to sabotage the growth and success of our proudly Nigerian company”, he says.

It is inconceivable that Aiteo will throw away its hard-earned reputation by refusing to pay a debt that is just about half of its philanthropic contribution to education in Bayelsa State alone.

So, it is difficult to detect that something must be wrong with this report somewhere.

If there are any proceedings, no one at Aiteo seems to be aware, “ Nobody is aware that the matter has even been formally lodged or listed in any form of hearing whether ex parte or on notice. In short, these proceedings do not legally exist”. The source advanced further.

Also, upon closer inspection of the publications, the deliberate omission of some cogent information bordering on the authenticity of the narrative and the complicity of the media in abetting, mischief-makers is clear. It is clear that no court, federal or state, has ordered the commencement of a wind-up procedure against Aiteo. It appears that reliance has been placed on draft documents that lack even the most basic form of authenticity, a situation that evinces the most dubious intentions behind the publication.

Another contractor to Aiteo contacted during the course of this investigation, claims they had no serious issues from the company as Aiteo has continued to meet its financial obligations. “The issue is that there are some of us contractors whose working relationships were inherited from previous operators. Some contractors have submitted dubious invoices, it is a common industry scam when you change operatorship. Even the Federal Government of Nigeria is suffering the same issues of bogus claims from contractors of previous administrations. It is a wellorchestrated scheme. We just urge Aiteo to quickly finalise its ongoing contract execution verification process and pay us genuine contractors”. www.businessday.ng

L-R: Kayode Akinkugbe, MD/CEO, FBN Quest Merchant Bank; John Maguire, group chief financial officer, Interswitch; Mitchell Elegbe,founder/group chief executive officer, Interswitch Group, and Kobby Bentsi-Enchill, executive director, Stanbic IBTC Capital, at Interswitch’s N23bn bond issue signing ceremony at Interswitch head office in Lagos, yesterday. Pic by Pius Okeosisi

We will deliver Lekki Port project in 30...

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Units (TEUs) in the first phase.

Upon the completion of Nigeria’s deepest seaport being built in Lekki, the eastern part of Lagos, Nigerian businesses as well as manufacturers that depend on seaports to bring in raw materials and other critical production inputs would heave a sigh of relief.

The Lekki Port LFTZ Enterprise Limited on Wednesday in Lagos signed a loan facility agreement with the China Development Bank (CDB) for the funding of the Lekki Deep Seaport project to the tune of US$629 million.

The signing ceremony, which was witnessed by the representatives of both equity investors, including the Lagos State Government led by Governor Babajide Sanwo-Olu and the Nigerian Ports Authority (NPA) led by Hadiza Bala-Usman, who was represented by the Sakonte Davies, executive director, Marine and Operations, was done in four parts.

Both partners signed the Facility Loan Agreement ;

Project Completion Guarantee Agreement; Sponsor Support Agreement and the tripartite Keep-word Agreement. With the signing of these agreements and subsequent funding of the port project, China Development Bank hopes to expand its investment in Nigeria.

It is expected that upon completion, Lekki Port will have a total of three container berths, one dry bulk berth and three liquid berths.

Governor Sanwo-Olu, who pledged his undying support for the port project, said that it takes a lot of effort for an investment of this magnitude to be converged.

He commended the government and investment delegation from China led

by Chu Maoming, consulgeneral of the People’s Republic of China in Nigeria, saying that Nigeria needs to create a lot of transaction of this sort to ignite economic and national development.

Earlier in his welcome address, Haresh Aswani, managing director, Tolaram Group, parent company of Lekki Port LFTZ Enterprise Ltd, described the loan facil-

ity agreement as a significant milestone in the journey to deliver a world-class deep seaport, which upon completion would become the busiest port in the West African region.

Aswani said the step indicates that the port would be due for inauguration in 2021 and called for the support of both the Lagos State and Federal Government in enhancement of the road infrastructure around Lekki Port axis to facilitate cargo evacuation from the port.

“Infrastructure is the most difficult project to deliver but upon completion will last for generations. As a group, all that we do here is to create jobs for Nigerians by investing in manufacturing and critical infrastructure,” Aswani said.

“We have been in operation in Nigeria since 1977 and we have specialised in the manufacturing of consumer goods such as Power Oil, Indomie Noodles, Kelloggs Cereals and others,” he said.

Giving insight into the likely economic impact of the port project, Biodun Dabiri, chairman, Lekki Port LFTZ Enterprise Ltd, said the port,

which is also expected to impact on manufacturing, trade and commercial service sectors, would create direct and induced revenue of over $360 billion within the 45-year concession period.

According to him, the first phase of the port will be dredged to 16.5 metres draught and create over 200,000 jobs and generate the much-needed foreign exchange.

Lekki Port, he said, will be a world-class port that would transform Nigeria into a transshipment hub that would support the growth of Lekki Free Zone (LFZ) and the massive petrochemical industry that is expected to pick up in the next three years.

Dabiri said the port would have an integrated transportation system that would combine rail, road and water transportation system for ease of cargo movement.

“Upon completion, Lekki Port would help to decongest the overstretched Apapa and Tin-Can Island Ports. As it stands, we have close to $1 billion funds through equity investment that would ensure the successful delivery of the seaport,” he said.

Speech by Lin Yichong,Chairman of CHEC

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n behalf of China Harbour Engineer ing Company, I would like to express my sincere thanks to you all here today for attending and witness the facility agreement signing ceremony of Lekki Deep Sea Port Project. This ceremony marks that the financial closing of the project is completed and all the conditions of the implementation of the project are fulfilled. It also indicates that the project will move forward to the full construction stage. This ceremony is so critical to the project. I would like to sincerely express my appreciation to all team member shareholders, CDB bank, Nigeria and Chinese gov-

ernment for your strong support during the negotiation of the agreement. And with your joint efforts, we have solved all the problems in the process.

Lekki Deep Sea Port phase 1 consists of two container berths with -16.5m water depth and total length of 680m. The Port is capable to be berthed by the fifth generation container ship, which has the maximum capacity of 18,000 TEU ship. The annual handling capacity in phase 1 of the Port can reach 1.2 million TEU, and after completion of phase 2, the capacity will reach up to 2.5 million TEU. After completion of the port, it will become the first deep sea port in Nigeria and the container trans-

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portation hub of African countries. It will hugely improve the port transportation of Nigeria and it will release the big pressure of Apapa. The port will boost the relevant industry and business of the country.

During the construction and operation of the port, it is expected that a huge number of employment opportunities will increase.

CHEC is a world-renowned infrastructure development company and the subsidiary of CCCC which is one of global 500 enterprises. We have strong financial capacity and technical know-how expertise and have rich experience in 30 year global experience. We want to assure to deliver this modern deep @Businessdayng

sea port within 30 months.

We have the willingness to deepen the relationship with your government, to develop the access road of the port and other potential infrastructure cooperation, to make more contribution in Nigeria.

Under the framework of China Africa Forum and the Belt and Road Initiative, we also look forward to establishing long term strategic partnership in the infrastructure area with Lagos state and Federal government of Nigeria, which further expand and deepen the relations and cooperation between Nigeria and China.

Wish prosperity to Nigeria and may our friendship lasts. Thank you again.

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Thursday 24 October 2019

BUSINESS DAY

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BUSINESS DAY

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news

BusinessDay transport editor escapes kidnap attack along Lokoja-Okene Bypass Our reporter

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ragedy struck on Tuesday, October 22, 2019, when Mike Ochonma, the transport editor of BusinessDay, escaped a kidnap attempt while occupants of a Toyota Lexus SUV marked FH Court HC72 FJ were taken away into the bush when kidnappers operated along the Lokoja-Okene highway at about 11.32am.

Mike Ochonma had departed the Utako terminal of God Is Good Motors with other 14 passengers including the driver at 7.03am that morning, and had travelled nearly 20 kilometres without seeing any police or military checkpoints.

Suddenly, the driver sighted four fully armed men in full dark blue khaki uniform with head gear just a few meters away.

Inanefforttoreverseandavoid the hoodlums, the bus in which he was travelling had a direct collision with the SUV that was also trying to escape, only for the two vehicles to crash into each other. Moments later, gun shots bullets started penetrating the God Is Good and the SUV with passengers inside.

Some of the passengers that escaped, including our reporter, sustained various degrees of inju-

ries as a result, while occupants of the SUV were abducted and taken into the thick forest.

Online media reports said Wednesday that a judge of the Federal High Court, Akure, Justice Abdul Dogo, was abducted and whisked away by unknown gunmen while he was returning to Akure from Abuja that Tuesday.

The online reports quoted sources as saying that the kidnappers had made contact and demanded N50 million to release their abductee. The report also said that the Inspector-General of Police(IGP)haddeployedthehead of the IGP Intelligence Response Team, Abba Kyari, to Akure over the incident.

For many years, the LokojaOkeneBypasshaswitnessedcases ofkidnappingsandkillingswithout visibleeffortsbythegovernmentto halt the attacks.

Lastyear,BashirZubayr,amedical consultant with the Aminu Kano Teaching Hospital was abducted along the same federal highway.

He was abducted alongside two of his younger brothers, and a younger sister at Irepeni, 20km WestofLokoja.Themedicaldoctor wasonhiswaytoOkenealongside hissiblingsforthe40thdayFidauof their late mother.

FEC approves use of methanol as alternative fuel ... N1.7bn equipment for Kaduna airport ... as Communications Ministry get new name Tony Ailemen, Abuja

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he Federal Executive Council (FEC) on Wednesday unveiled a new policy that would see the use of methanol as an alternative fuel in Nigeria.

Minister of Science and Technology, Ogbonna Onu, while briefing State House Correspondents after the weekly meeting of the FEC, said methanol, regarded as a much more cleaner energy source, will be produced from the abundant gas resources, currently being flared by oil companies.

“One way to help us to completely solve this problem of gas flaring is to convert the natural gas into methane. Methanol is a liquid that is found virtually in all sectors of the economy. You can use methanol for transportation, all these racing cars that you find - they out M85, M100 essentially that M in methanol means it’s 85 percent methanol, 15 percent gasoline. But for ordinary use, normally the blending will be 15 per cent of methanol so that you don’t have to make any adjustment to your vehicle,” the minister said.

He disclosed that “methanol can be used to replace diesel in trucks that we find on our highways because methanol is cheaper and it is environmentally friendly so that all the problems that are associated with the use of diesel, can be solved by the use of methanol.”

According the minister, methanol is considered less

expensive to produce, although it is also generally said to be more toxic, with lower energy density.

For optimising engine performance and fuel availability, however, it is expected that a blend of ethanol, methanol and petroleum is likely to be preferable Onu stated further that it will help provide cleaner fuel for Nigeria’s teeming rural populace.

“Our people in rural areas can use methanol for cooking so that it can replace kerosene because when you use kerosene you have soothes and it creates health problem for you but methanol does not have that, it’s very clean, safe and cheap,” he said.

The federal executive council gave the nod for private-sector enterprises to utilise gas in rural areas, even as Onu said the project would help in addressing the issues of deforestation as well.

“Today, we are losing many of our forest trees because we are using them for domestic energy. So methanol will do this and methanol is also used for generating electricity which we can use to power our plants and many other plants that currently use diesel, methanol will be a replacement,” Onu said.

Once implemented, the policy which will be private-sector driven, is expected help create new businesses particularly micro and small businesses, jobs, wealth, and fight against poverty.

Also the Federal Executive Council FEC, on Wednesday approved April 2019 for the effective take off of the new minimum wage implementation. www.businessday.ng

L-R: David Akpan-Udofia, media relations officer, Wema Bank plc; Okwuchi Ugorji, head, inclusive banking, Wema Bank, and Amarachi Ekwomadu, retail and SME officer, Wema Bank, after receiving the Best Bank Product of the Year award for Sara By Wema at the BusinessDay Banks and Financial Institutions Awards (BAFI 2019).

More worries for airlines, businesses as FG shifts Enugu airport delivery to April 2020 IFEOMA OKEKE

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ixty days after the Akanu Ibiam International Airport, Enugu was closed for repairs without any work done, the Federal Government on Wednesday dashed the hopes of airlines, travellers and businesses who had banked on the airport reopening in December 2019.

Hadi Sirika, minister of aviation, while defending his ministry’s budget before the House Committee on Aviation, said the Enugu airport would be reopened April 2020, four months farther from the earlier announced December date.

The airport runway was closed for major repairs and works on the airfield from midnight on August 24, 2019, with Henrietta Yakubu, general manager, corporate communication of the Federal Airports Authority of Nigeria (FAAN), saying the move was aimed at resolving the existing safety/security concerns to flight operations.

Akanu Ibiam International Airport, Enugu is the sixth

busiest airport in Nigeria after Lagos, Abuja, Port Harcourt, Kano and Owerri. The airport processes an average of 273,000 local passengers and 41,000 passengers annually, according to figures by FAAN. Since the closure, airlines have had to divert traffic to Port Harcourt, Owerri and Asaba airports, while business owners in and around Enugu airport have been experiencing low patronage. Passengers appear to be the worst affected as they are forced to either travel through the alternate airports or by road.

Meanwhile, one-way ticket into Asaba, Owerri and PH which used to cost an average of N25,000-N28,000 now costs N35,000-N40,000, an indication that these prices would still increase especially with Christmas approaching.

Tayo Ojuri, CEO of Aglow Limited, an aviation support services company, said travel is driven by businesses and if there is a need for people to travel for business reason, they may have no choice but take the pain of going through the alter-

nate airports to get to Enugu.

He, however, said there are some passengers who may rather decide not to travel looking at the risks on the roads and as a result, passenger traffic may be slightly affected.

“Port Harcourt airport is the only airport that is able to take international traffic but, unfortunately, there is a challenge of distance. The roads are very bad at the moment and passengers may be looking at safety, security and convenience,” Ojuri said.

“Aero has activated their Owerri flight. For Christmas, people will want to travel because it is a cultural thing, so they will have to make more logistic arrangements. For those who can afford it, they may have to use helicopter services,” he said.

Indeed, some passengers who spoke to BusinessDay said they have had to change their travel plans pending when the airport is ready as a result of incessant attacks, insecurity and the bad condition of the roads.

While the Enugu airport was up and running, Air Peace operated four flights in and out of Enugu from Lagos and Abuja daily, while Ethiopian Airline operated three times weekly into the airport.

With an average of 150 passengers in an aircraft on local destination, Air Peace airlifts about 600 passengers daily.

For 240 days (eight months) that the airport will be closed, the airline should have airlifted nothing less than 144,000 passengers from the airport.

This would amount to over N5 billion (N5,040,000,000) at an average cost of N35,000 per ticket.

Similarly, with an average of 250 passengers on an international flight from Addis Ababa, Ethiopian Airline airlifts an average of 750 passengers weekly in and out of the airport. This would tally to 24,000 passengers for 32 weeks, and with an average cost of N150,000 per ticket on international flight, Ethiopian Airlines should realise N3.6 billion operating from Enugu airport.

AFC reels out finance plan on critical road infrastructure in Ogun … Igbesa-Agbara, Sagamu-Ogijo industrial roads top list RAZAQ AYINLA

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s part of core operational coverage within subSaharan Africa, African Finance Corporation (AFC) has rolled out its strategic plans to fund some critical road infrastructure in Ogun State in both medium and long terms.

The arrangement to finance critical road infrastructure in the state in accordance with the AFC’s four cardinal operational points, which covers principal investing, project development, financial advisory as well as Environmental and Social Management, was reached in Abeokuta on Wednesday between AFC and Ogun State government.

Topping the list of roads planned to be constructed are

critical industrial roads such as Atan-Lusada-Igbesa-Agbara road, the major industrial road that links Ogun state with Lagos state and Benin Republic through Badagry-Seme border and Ogun state with Benin Republic via Idi-Iroko border road, all in Ado-Odo/Ota local government area of the state.

The other roads to be constructed also include SagamuOgijo-Ikorudu road that links Sagamu-Ogijo industrial estate with Lagos state as well as Lagos-Ibadan expressway, just as that of Ijebu-Ode-Epe and Ajah road for which Governor Dapo Abiodun of Ogun state and Governor Babajide SanwoOlu of Lagos state are already in talks with Federal Government for possible takeover.

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Speaking on the strategic plan to fix the identified road infrastructure in the state, Taiwo Adeniji, senior director, ABC, said the AFC in partnership with the private sector focuses more on roads, power, and telecommunication and heavy industry projects and was currently developing infrastructures in 28 African countries.

The senior director at the AFC, who led a four-man delegation to Ogun State, noted that the visit was to see how the AFC would help in developing infrastructure that could assist in economic growth and driving more development in Ogun State.

He said, “We focus on roads that have commercial viability, the roads that can pay for @Businessdayng

themselves. Atan-Agbara and Epe-Ijebu-Ode roads are some of the roads that can be done on Public Private Partnership basis.

“African Financial Corporation brings in its technical capacity and the finance to fix the roads and the users pay a token amount. We intend to engage with the industries within the industrial areas and discuss these roads with them.

We will be transparent, we will let them know how much the roads will cost and how it is going to be paid for.

“We think that would be a better arrangement than the current situation where the roads are impassable. We have done similar projects in other African countries and the people there are better for it.”

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Air Peace reiterates commitment to travellers’ safety, comfort at 5 IFEOMA OKEKE

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ir Peace, West Africa’s leading airline, has restated its commitment to the safety and comfort of its passengers, as it turns five.

The airline celebrated its fifth anniversary by rewarding passengers with various gifts such as free tickets, souvenirs and improved inflight refreshments.

In a press release to announce its fifth anniversary, Allen Onyema, chairman/ CEO, Air Peace, who describes the airline as a multi-country carrier, says it has been five years of steady progress, while adding that the airline’s vision of creating seamless connections and network options for its domestic, regional and international markets is being achieved.

Onyema also expresses gratitude to every stakeholder that has supported the airline since inception and promised more improved air transport services.

Also, Oluwatoyin Olajide, chief operating officer, says the airline choses to celebrate with the flying public because it recognises that its customers are the reason for its existence, noting without the customers, there will be no Air Peace.

According to Olajide, the passengers are a key part of the airline’s success story, and must be celebrated.

Olajide, who states that Air Peace has experienced a consistent rise to become an airline of global repute, notes

that the last five years have not been devoid of challenges, but such challenges have only made the airline a stronger brand in the aviation industry.

“The past five years have been laden with challenges but our loyal customers have made the journey worthwhile for us, and we owe them as well as other stakeholders’ immense gratitude,” she states.

She reveals that from seven aircraft at launch, the airline now has 25 aircraft in its fleet, excluding the 10 brand new Boeing 737 MAX 8 and 30 Embraer 195-E2 aircraft it recently ordered. In five years, the airline has recorded a number of firsts in the aviation industry in Nigeria and West Africa, she notes.

“From seven aircraft and five routes at the launch of our operations on October 24, 2014, to 25 aircraft and 22 routes, our esteemed customers have consistently supported us and now, we can boast of being Nigeria’s and West Africa’s largest airline,” she says.

In the area of economic empowerment, the carrier has employed over 3,000 Nigerians while the CEO keeps executing rare corporate philanthropy. “Air Peace has created thousands of direct and indirect jobs for Nigerians and expatriates without any form of discrimination,” she discloses, as the airline is doing a lot in unifying Nigeria through air transport, adding that it has positively contributed to the economy of Nigeria, and those of her regional and international counterparts.

Manufacturers lose over N20bn annually due to poor roads, truck drivers’ activities Gbemi Faminu

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igerian manufacturers have come out to lay complaints about how trailers and poor road networks are threatening their businesses and accruing losses for them annually.

Speaking with journalist at a press briefing regarding the traffic situation, Frank Onyebu, chairman, Manufacturers Association of Nigeria (MAN) Apapa branch, said manufacturers in Amuwo-Odofin and Kirikiri areas of Lagos State were suffering a great deal in the hands of bad roads and trailer drivers.

He complained that the roads within the industrial estate got dilapidated over the years due to continuous neglect by the government, and presently were at the verge of not being motorable anymore.

According to Onyebu, the problem has also been compounded by the activities of trailer drivers who after being moved from the Apapa-Oshodi axis have found solace in Amuwo-Odofin and Kirikiri, and have settled there.

“We don’t have access to the offices as the trailers have taken over the road completely. The roads are very bad and vehicles have not been encouraged to come here. Companies situated

here lose over N20 billion annually, and most of the factories are on the brink of shutting down because we produce but do not sell as customers avoid coming to this area,” he said.

He said since the trailers were moved from the OshodiApapa axis, they moved to Amuwo-Odofin, dumping containers indiscriminately and gradually converting the area to a site for trailers and mechanics.

These things are gradually eroding the activities of manufacturers, as it has chased clients and prospective investors away, while some manufacturers are forced to relocate and others are making plans to shut down their industries, he said.

The activities of the truck drivers have heightened insecurity in the area as it has attracted miscreants to the area, giving them places to hide and carry out heinous activities, he said, adding that in cases of fire outbreak or accidents, it is difficult for an ambulance or a fire truck to reach the factories, a huge risk as it is an industrial area where many activities take place.

He said, “If the situation is not properly handled, it will generate into more problems like unemployment, high rate of criminal activities, and economic drawback.” www.businessday.ng

Ahmed Lawan, Senate president (m); Femi Gbajabiamila, speaker, House of Representatives (r), and Ovie OmoAgege, deputy Senate president (l), during the 4th National Budget Public hearing on the 2020 FGN Budget, organised by the Appropriations Committees of the Senate and the House of Representatives at the National Assembly.

Patient-centric care suffers as Nigerian hospitals underutilise mobile communication devices Temitayo Ayetoto

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hile leading healthcare organisations around the world increasingly permit their physicians, administrators, nurses and information technology staff to work with smartphones, Nigerian hospitals still largely underutilise mobile communication technology, hurting access to patient-centric healthcare.

With smart devices, hospitals are improving the challenges faced in mobile communication infrastructure, data security, and compliance. They are better communicating with care team members, delivering real-time clinical information, receiving actionable information such as nurse call alerts and sharing protected health information.

When Spok, Inc. surveyed 460 healthcare professionals across the US for its 2019 annual report on Mobile Communication in Healthcare, it found

that 90 percent of physicians were most often permitted to use mobile devices, followed by administrators 84 percent, nurses 79 percent, and IT staff 76 percent. The same is true of nonclinical staff that relies on a variety of devices to perform their work.

The report shows that smartphones are supported by 75 percent of organisations and at least one type of pager; 64 percent support Wi-Fi phones, 55 percent tablets, 19 percent voice badges, and 10 percent smart watches.

Sodipo Oluwajimi, vicechairman, Lagos Medical Guild, says the challenge with the adoption in Nigeria has been lack of structure on how healthcare providers can use it in terms of scheduling clinical appointments, practice and sending health information, even though a large number of people use smart phones. It is an area, he says, needs to be established specifically to reach

people in hard to reach places.

“One of the challenges is that there is no internet in some places and even when there is, it is easier to find internet connection and a phone than to find a healthcare provider in some parts of the country,” Sodipo notes.

BusinessDay findings show that a handful of hospitals in metropolitan areas like Lagos have been adopting online applications to book appointments while some private hospitals have been using it to link healthcare providers with patients.

But the worry among professionals is first, protection of confidentiality. The other challenge has been the uncertainty of the competence level of the healthcare provider being linked with the patient.

According to Spok Inc., smart watches, voice badges, and encrypted pagers were the newest devices introduced. In 2017, encrypted pagers became a device option. Now, it is a de-

vice supported by 27 percent of organisations.

Though still the least-supported device in 2019, smart watches have seen steady increases since their introduction in 2015. In 2015, smart watch usage was supported by a mere 4 percent of organisations and has jumped to 10 percent in 2019.

Olatoke Oke, a consultant family physician and partner at Brookside Medical Practice in Lagos, affirms that some changes were being witnessed in Nigeria’s healthcare, with the development of mobile applications to aid some clinical processes.

“But we have to advance to where we are able to communicate different things to the patient. If there is a current outbreak of meningitis, for instance, you can inform your patient and tell them to come in for one thing or the other,” Oke says, “The hospitals in Nigeria are not quite there yet. There is a lot of underfunding.”

Alaghodaro LOC unveils schedule for RIMSON calls for risk-based management of critical national infrastructure 2019 summit awareness and culture across all Modestus Anaesoronye

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ocalOrganisingCommittee for the 2019 Alaghodaro Summit has released programme of activities to mark the third-year anniversary of the Governor Godwin Obaseki-led administration in Edo State, adding that the business summit will evaluate the administration’s achievements and propose ways to deepen their impact on Edo people and residents.

A statement by Crusoe Osagie, special adviser to the Governor on Media and Communication Strategy, notes the five-day event will commence with the women’s summit/Jumat service on November 8, 2019.

According to Osagie, the women summit will be followed by a golf tournament on Saturday, November 9, while a special thanksgiving service will take place on Sunday, November 10, 2019. Also, the 2019 Alaghodaro will feature a two-day main event on Monday 11 and Tuesday 12, 2019, with the theme, “Delivering

to the People, The Next Level”.

“The Women’s summit will present an opportunity for women groups to engage with relevant stakeholders and brainstorm on thegovernment’sprogrammesas well as explore ways to contribute to efforts to drive inclusive social growth for women to improve their socio-economic conditions.

“The fair will also feature experts, businessmen, captains of industry and employers of labour and showcase the governor’s commitment to promoting social inclusion through intervention programmes on industrialisation, jobs creation, affordable housing, reforms in basic education and primary health care.

“Over 100,000 jobs have been created directly and indirectly through EdoJobs, in addition to the several trainings that are ongoing to improve skills. The governor has achieved so much in the education sector with the EdoBEST (Basic Education Sector Transformation).”

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isk Managers Society of Nigeria (RIMSON) has called ongovernmentatalllevelsto embrace risk-based management of critical national infrastructure to achieve national development.

RIMSON noted that a risk appraisal of a wide range of our national challenges has shown that our governance processes will guarantee greater results if proper risk management procedures are enthroned.

Raymond Akalonu, president/ chairman of the Governing Board of RIMSON made the call during the 2019 National Conference of the Society held in Lagos with the theme: “Emerging Risks: Rising to the Challenge”.

He said that this theme underscoresthesociety’sworriesasabody concerning the vulnerability of her national space for emerging risks.

Akalonu stated further that the Annual Conference has remained critical to propagation of risk management education, centering on thepromotionofriskmanagement @Businessdayng

spheres of our national life.

“The conference has also been consistent in its focus on topical subjects which border on a wide range of issues which are pertinent to the growth and development of our nation.”

AccordingtoAkalonu,thebody is in the threshold of a new dawn in risk management advocacy, guaranteeingin-roadsintothemostcritical frontiers of our national fabric.

“This in essence is a pathway to the fulfilment of our long-standing questtowardsmakingriskmanagementanintegralpartofournational consciousness. Our success in this direction has been quite positive.”

Among the critical national infrastructures listed by Akalonu includes the National theatre in Lagos;The Nationalstadiain Lagos and Abuja; Various national and state hospital complexes; the huge investmentsinpetroleumrefineries; Ajaokuta steel rolling mill which for many years has been moribund; Federal and State universities, PolytechnicsandColleges,aswellasthe railways among others.

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More problems for Discos as brewers, others intensify plans for alternative source of energy Daniel Obi

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ith self-generating electricity by some companies, electricity distribution companies (Discos) are losing substantial amount of money as some companies like breweries intensify efforts to sustain self-generating power for their factories.

Some of these big plants are not on-grid, a development seen by analysts as opportunity lost

by Discos for return on the huge investments made in the power sector.

For instance, the $250 million Sagamu plant of the International Breweries runs on its own energy.

“We don’t run on public grid, we run purely on our energy. We have six generators of 2,000 KVA each and that comes to available capacity of 12,000 KVA and we power them with liquefied natural gas (LNG),” Michael Daramola, legal/corporate affairs director of the International Breweries, told BusinessDay recently.

One constraint though is that the LNG has to be brought in trucks from Port Harcourt, as there are no supply pipelines.

The LNG comes in liquid form and the company has to convert it to gaseous state before it can be used in the generators, Daramola said.

Nigerian Breweries, the largest brewer in Nigeria, is also introducing solar panel innovation in its Ibadan factory expected to provide 1 megawatt (mw) of power. The Ibadan factory is not on-grid. “Since it was established in 1982 it has ran on LPO, diesel and compressed natural gas and progressively with solar. Solar will provide about 30 percent

of the electricity,” officials of the company said.

Once Ibadan is commissioned, the next plan is to move to Kaduna plant, the officials said, and “we will continue to grow from there”. In March this year, according a report, Nigerian Breweries and CrossBoundary Energy announced the signing of Heineken’s first solar project in Africa. Under the agreement, CrossBoundary Energy will be installing and operating a 650kW solar plant located at NB’s Ibadan Brewery, the solar energy plant will become operational in 2019.

Jordi Borrut Bel, managing director of NB, was reported to have stated, “We are delighted to be a pioneer in the adoption of solar energy in Nigeria. The solar plant will help power our world-class brewery in Ibadan, enabling us to deliver on commitments under our ‘Brewing a Better World’ initiatives and supporting Heineken’s global ‘Drop the C’ programme for renewable energy.”

Analysts say other companies are adopting solar systems for electricity to power their factories, a move that will possibly see a plunge in Discos revenue from these sources.

Latest report by PriceWatehouseCoopers (PwC) has predicted that Discos liquidity challenges will perhaps be ameliorated if they can supply up to 50 percent of electricity to Nigerian companies.

The auditing firm suggests that by providing companies who are willing to pay N80 per kilowatts, about 50 percent of distributable electricity, Nigerian Discos can ultimately solve their liquidity challenge.

Climate change could increase threat of malaria – experts ANTHONIA OBOKOH

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espite Nigeria’s tremendous progress in fighting malaria, 97 percent of its population are still at risk and malaria experts are very concerned that climate change could increase the threat of malaria in central African countries, according to a new report issued at an RBM Partnership to End Malaria conference in Abuja on Tuesday.

These experts say surveillance and programme delivery is needed to improve the drive for progress, and believing that halving malaria deaths is more achievable than elimination by 2030.

“Progress against malaria has stalled, and we need a renewed sense of urgency - and funding to accelerate the fight against this devastating disease,” said Kolawole Maxwell, West and Central Africa programmes director for Malaria Consortium.

Maxwell said in Central Africa and beyond, “we need to boost domestic funding, build stronger malaria surveillance systems, and enhance operational research and the development of new tools.”

However, the report was the latest extension of the Malaria Futures for Africa (MalaFA) study commissioned by Novar-

tis, which has already conducted similar research across 15 countries, including Nigeria, to survey African malaria stakeholders on progress and challenges towards global malaria targets.

“In Africa, there are still over 200 million cases of malaria every year, and over 400,000 deaths, mostly young children,” said Parfait Touré, head, Access Programmes, West and Central Africa for Novartis Social Business.

According to Touré, this research shows there are many challenges still to be overcome.

But ensuring the voices of those at the front line are heard is essential.

The new report involved interviews with 23 politicians, senior civil servants, malaria programme directors, researchers and NGOs in Cameroon, Democratic Republic of the Congo (DRC), Republic of Congo, and Rwanda. All four are countries that have a significant malaria burden and differing policies in place to fight the disease.

In Rwanda, respondents were mainly positive about the country’s fight against the disease, citing high levels of political support and funding. In Cameroon, DRC and the Republic of the Congo respondents shared the view that halving deaths by 2030 was more achievable than elimination. www.businessday.ng

L-R: Titilola Akinlawon, 1st vice chairperson, Society of Women in Taxation (SWIT) Lagos chapter; Titilayo Eni-tan Fowokan, chairperson, SWIT Lagos chapter; Wole Obayomi, partner and head, tax, regulatory and people services, KPMG, and Nike James, partner, tax regulatory and people services, KPMG, at the courtesy visit of Lagos chapter of SWIT executives to KPMG head office in Lagos, yesterday Pic by David Apara

Businesses urged to embrace digital transformation as a necessity for growth Jumoke Akiyode-Lawanson in Milan, Italy

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lthough innovation is applauded in Nigeria, the level of integration even to drive business growth is painfully at low ebb. Even more surprising is the fact that the term ‘digital transformation’ is still widely misunderstood and poorly integrated into businesses globally.

Digital transformation, which is the integration of digital technology into all areas of a business, fundamentally changing the way an organisation operates and delivers value to customers, has been described by technology analysts as a necessity for business growth.

Speaking on ‘the evolution of organisations in the digital age,’ at the opening of the SAS Analytics Experience conference in Milan, Italy on Tuesday, Oliver Schabenberger, executive vice president, chief operating officer and chief technol-

ogy officer, SAS, said: “Only one in four companies succeeds in digital transformation and some of the common reasons for failure are lack of clear strategy, uninspiring leadership, not pulling all levers and unwillingness to adapt.”

According to Schabenberger, digital transformation does not only depend on the adoption of technology. “It is the technology, plus people, plus process, and Artificial Intelligence (AI) plays a key role in transformation for a fully integrated business,” Schabenberger said.

Businesses have been advised to make a timed shift with infrastructure, its culture, product offerings supply chain, and its core business processes.

“It takes time and it is not as simple as just moving data to the cloud. I ask of you to think of digital transformation as a necessity to achieve longevity, to de-clutter, to save. Digital transformation is an opportunity to make a better thing,

rather than doing the same thing better,” he said.

For Nigeria to take full advantage of the next phase of its digital transformation, experts advise collaboration between industry and government.

They say the right government policies would boost technological innovation and productivity.

The $21 billion contributed to Nigeria’s GDP by the mobile market in 2017, which represented 5.5 percent of Nigeria’s total GDP at the time, is a clear example of how beneficial the use of digital technologies are to economic growth. Data released by the National Bureau of Statistics (NBS) shows that the telecoms industry contributed 10.11 percent to Nigeria’s GDP in the first quarter of 2019. The growth of Nigeria’s digital and mobile economy resulted in the creation of nearly 500,000 direct and indirect jobs, according to a GSMA report.

Desan Naidoo, vice presi-

dent, SAS Africa, told BusinessDay that digital transformation was inevitable, as industries were being challenged right now, especially with companies like Uber and Airbnb transforming the way transport and real estate are operating.

“Irrespective of the age of the organisation, companies need to think of how to reinvent themselves, setting aside skills or divisions within the organisation where they act and think with a start-up mentality, to think about things differently and think of ways to transform the business, otherwise they would find themselves irrelevant in the near future,” Naidoo said.

Industries such as banking, insurance, health, oil and gas, agriculture, transportation and others are realising the importance of technologies such as Artificial Intelligence, cloud computing, data analytics, machine learning, etc., to increase efficiency and engender sector and economic development.

Nigeria’s gambling, betting industry on upward trend as 39% of population now involved ENDURANCE OKAFOR

…3% increase from 2017 figures …as Southern region takes lead

he rate in which Nigerians are gambling and betting has increased from the levels reported in 2017, as 39 percent of the country’s population is now participating in the act.

BusinessDay’s analysis of the Tuesday report by NOIPolls reveals that the number of people now into gambling and betting in Africa’s most populous nation has increased by 3 percent compared with the result obtained in 2017 (36%).

Going by the active 39 percent by the report, BusinessDay calculation shows that an estimated 78 million of the country’s 200 million people are currently involved in the practice.

“A new public opinion poll has revealed a rising trend in

gambling and betting as 39 percent of Nigerians polled acknowledged that they either engage in or know someone who engages in gambling and betting in the country,” the report by NOIPolls reads.

According to industry sources, the growth enjoyed by the Nigerian betting industry is a result of the country’s largely youthful population, improving internet penetration and increasing access to internet-enabled phones and computers.

Findings from the report by the Abuja-based NOIPolls show young Nigerians aged between 18 – 35 years accounted for the largest proportion (47%) of Nigerians who engage in gambling and betting, representing an increase of 6 percent

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when compared with 2017 results.

The report quotes News Agency of Nigeria to have said that about 60 million Nigerians between the ages of 18 and 40 years spend up to N1.8 billion on sports betting daily with an average investment of N3,000 per day.

“Sports betting have slowly emerged as a lucrative sector, leveraging Nigeria’s huge football culture,” the report reads, stating that recent report puts Nigerians’ spending on sports betting at over N730 billion annually while at least N2 billion is generated daily.

A further analysis of the report reveals that there are more Nigerians in the Southern region (averagely 47.7%) than the Northern region (av@Businessdayng

eragely 34%) who engage in the practice.

Further probe into the report shows that 35 percent of the respondents disclose that they rarely win a bet; this is followed by 29 percent who win a few times in a month. While 10 percent claimed that they have never won any bet, 2 percent indicates that they win ‘daily.

In terms of frequency of gambling and betting, out of the active participants (39%) in the country, 54 percent of Nigerians acknowledged that they engage in betting daily.

North Central Zone (63%) has more residents who bet daily followed by the southwest zone (60%) while the southeast zone has the lowest proportion (42%) followed by Now East at 47 percent.

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FINANCIAL TIMES

World Business Newspaper

TOM MITCHELL IN BEIJING AND ALICE WOODHOUSE IN HONG KONG

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he Chinese government is drawing up a plan to replace Carrie Lam, Hong Kong’s leader, with an “interim” chief executive following violent protests against her administration, according to people briefed on the deliberations.

The people said that if Xi Jinping, China’s president, decided to go ahead, Ms Lam’s successor would be installed by March and cover the remainder of her term, which ends in 2022. They would not necessarily stay on for a full five-year term afterwards.

When Tung Chee-hwa, Hong Kong’s first Chinese chief executive, resigned in 2005, Donald Tsang, the territory’s then most senior bureaucrat, served out the remainder of his term and was reappointed chief executive for a full five-year term in 2007.

Leading candidates to succeed Ms Lam include Norman Chan, former head of the Hong Kong Monetary Authority, and Henry Tang, son of a textile magnate who has also served as the territory’s financial secretary and chief secretary for administration, the people added.

The protest movement, now in its fifth month, is seen as the most serious challenge to Communist party authority on Chinese soil in three decades. Protesters say they will not stop until the territory’s chief executive and legislators are chosen through democratic elections.

Chinese officials want the situ-

Beijing draws up plan to replace Carrie Lam as Hong Kong chief Chief executive would resign by March under proposal that needs Xi’s sign off

Carrie Lam has drawn criticism for her handling of the political crisis © Reuters

ation to stabilise before making a final decision on whether to proceed with a leadership change, as they don’t want to be seen to be giving in to violence, according to the people briefed on the discussions.

Officials are hoping the vio-

lence will subside as arrests mount and now weekly vandalisation dissipates public support for the protests. March is when China’s rubber stamp parliament, the National People’s Congress, holds its annual session.

Ms Lam’s handling of the crisis

has been marred by a series of missteps, including her decision to press ahead with the controversial extradition bill that sparked the protests even after a series of massive and peaceful marches in early June, analysts said. She was later forced to drop the bill, which was

formally withdrawn on Wednesday in the territory’s legislature.

The Financial Times reported in July that Ms Lam had offered to resign, but Beijing forced her to stay on. The Hong Kong and Chinese governments later denied that she had wanted to step down.

Mr Chan is one of the “three Chans” viewed as possible successors to Ms Lam. But the other two — Paul Chan, financial secretary, and Bernard Chan, convener of an “executive council” that advises Ms Lam — are viewed as being too close to her now discredited administration.

The Hong Kong Monetary Authority, which Norman Chan headed for a decade, is widely respected as an independent institution that has successfully managed the territory’s US dollar currency peg for almost 40 years.

Mr Tang, meanwhile, only served under Ms Lam’s predecessors.

“We have to look within at people who have served in government but also know how business operates here,” said one prominent member of Hong Kong’s pro-Beijing establishment. “And of course they need to be trusted

by Beijing.”

President Evo Morales accuses Bolivian Alzheimer’s drug revival gives hope to millions — and investors opposition of plotting coup Biogen says seeking approval for aducanumab hails ‘turning point’ in fight against disease State of emergency declared after days of unrest following election on Sunday ANDRES SCHIPANI IN SANTA CRUZ

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vo Morales has accused Bolivia’s opposition of plotting a coup against him, after they challenged election results suggesting the incumbent president may have won a contentious fourth term as president.

“I want to denounce before the Bolivian people and the world that there’s a coup d’état in the making,” Mr Morales said on Wednesday as he declared a state of emergency. He called on his supporters to “mobilise peacefully” and be “prepared to defend democracy” in a country with a history of violent street protests.

The dramatic intervention followed days of unrest in Bolivia following an election on Sunday that prompted expressions of concern from both the Organization of American States and the EU. Protesters set fire to electoral offices in a number of cities while demonstrators took to the streets of the administrative capital La Paz to accuse the government of tampering with the results to win another five-year term. Police used tear gas to disperse them.

Mr Morales, Bolivia’s first indigenous leader who has been in power

for 14 years, on Wednesday continued to hold a lead over his rival, the former president Carlos Mesa. With 96.78 per cent of ballots counted, official results showed Mr Morales was ahead with 46.49 per cent, while Mr Mesa was on 37.01 per cent.

He requires at least 40 per cent of the vote, plus a lead of more than 10 percentage points, to win outright. If he wins, he would avoid a December run-off vote, which analysts said he may lose against a united opposition.

However, Mr Morales insisted that when the remaining votes came in from the countryside he would win outright. “I am very sure that with the vote from the rural areas we will win on the first round,” he said.

In an election in which more than 7m ballots were cast, Mr Morales’s lead was less than 600,000 votes, the tightest result since he swept to a presidential victory for the first time in 2005.

Addressing thousands of supporters in La Paz on Tuesday, Mr Mesa attacked Mr Morales and reiterated that he would challenge the result. “Bolivia’s society will teach the dictator we are capable of facing him without violence . . . Democracy, yes, dictatorship, no,” said Mr Mesa. www.businessday.ng

HANNAH KUCHLER IN NEW YORK AND SARAH NEVILLE IN LONDON

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he revival of a potential drug to fight Alzheimer’s, whose clinical trials had been declared futile just months ago, proved the value of sticking with the search for treatments for the disease when other pharmaceuticals companies are “running away”, according to the chief executive of its developer, Biogen.

By announcing on Tuesday that it would seek regulatory approval after all for its drug aducanumab, the US biotech company gave new hope to millions of patients and caregivers — and its shareholders.

Michel Vounatsos, Biogen chief executive, told the Financial Times that the new data analysed since the company halted a patient trial in March marked a “turning point in the fight against Alzheimer’s disease”.

But among Alzheimer’s researchers and campaigners, who have lived through decades of dashed hopes, the unmistakable excitement was tempered by a battlehardened caution. Biogen shares reflected that: having opened almost 40 per cent higher, they closed on Tuesday with a somewhat more

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modest 26 per cent gain.

While the opportunity is huge, so are the hurdles. The theory that Alzheimer’s patients suffer from a build-up of amyloid plaques — hard clumps of protein between nerve cells in the brain — may have found statistical support in a large-scale human trial for the first time, but the full data will not be published until December.

Biogen licensed aducanumab in 2007 from Neurimmune, a Swiss company which had found evidence some people benefited from antibodies that cleared away the plaques, and has been working to turn these antibodies into a potential drug ever since.

In March a so-called futility analysis of its two late-stage trials for the drug found the benefits did not outweigh the risks. The company abandoned the trials, seemingly adding aducanumab to the list of once-promising Alzheimer’s drugs that have failed in the late stages of testing, leaving the industry with little to show for the billions of dollars spent.

Mr Vounatsos said Biogen remained focused on finding treatments for the degenerative condition when other “companies are running away” and called the rever@Businessdayng

sal “a testament to our persistence and pioneering role”.

Higher doses proved key to trial’s success The Cambridge, Massachusettsbased company said studying a larger data set had shown aducanumab did work if it was taken at higher doses, improving patient cognition and their ability to perform daily tasks such as cleaning and shopping and slowing their clinical decline by 23 per cent compared to a placebo.

Crucially, it announced that the US drug regulator was open to it filing for an approval.

One of the two trials met its goal.

On the study that failed, a subset of patients saw success: those who had taken more of the drug also had their decline slowed. Biogen had at first been cautious about giving higher doses because of a side effect that swelled the brain — but the majority of patients did not experience any symptoms.

Paola Barbarino, chief executive of Alzheimer’s Disease International, which represents 100 Alzheimer’s associations and federations around the world, described the announcement as “the most positive piece of news we have had in decades” but warned that it was “quite early stages”.

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Thursday 24 October 2019

BUSINESS DAY

FT

NATIONAL NEWS

Wilbur Ross looks to negotiations to ease trade dispute with EU US commerce secretary says president Trump has many options available to him in stand-off JAMES POLITI AND GILLIAN TETT IN WASHINGTON

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ilbur Ross, the US commerce secretary, has floated new talks with the EU as an alternative to imposing tariffs on automotive imports next month, raising the possibility of a further reprieve for Brussels in the transatlantic stand-off over trade in the car industry.

In an interview with Trade Secrets, the Financial Times newsletter, Mr Ross said President Donald Trump could choose “some other form of negotiation” as a possible path in the face of the administration’s controversial conclusion that automotive imports are a threat to US national security.

Washington’s threat to impose levies on cars and car parts has emerged as a huge source of strain in relations with the EU, clouded the outlook for the global economy, and faced resistance among Mr Trump’s closest Republican allies in Congress.

Although the threat of car tariffs applies globally, it is most relevant to the EU since Canada, Mexico, South Korea and Japan have each struck deals with the Trump administration to protect them from the levies.

The Trump administration has hesitated to pull the trigger on the tariffs so far, amid concern, even from some high-ranking officials within the administration, of the economic impact and political backlash it could cause in the US. In May, Mr Trump offered carmakers a six-month reprieve from the levies, setting up a new deadline for a decision in midNovember. A strict interpretation of US trade law would present the president with a binary choice between ploughing ahead with tariffs or dropping the threat entirely, but Mr Ross suggested a new deferral might be possible.

“One [option] would be to say, ‘I’m just not going to do anything’, the second would be to impose tariffs on some or all [countries] . . . the third might be some other form of negotiation,” he said.

Mr Trump “has quite a lot of alternatives as to what he can decide to do, and I don’t think we should prejudge what the conclusion will be”, Mr Ross added.

The mere threat of levies had already had the desired effect of spurring new investment in the US car sector, he said. “We are very encouraged by the willingness of many [global carmakers] to produce more of their product in the US. That’s really what the objective had been, anyway.”

Transatlantic trade tensions already increased this month after Washington moved to slap tariffs on $7.5bn of EU goods — including French wine, Italian cheese, Scotch whisky, and Spanish olive oil — in response to a WTO ruling that Europe’s Airbus had received illegal subsidies. Bruno Le Maire, France’s finance minister, described the tariffs as “very aggressive”, but

Mr Ross dismissed the criticism.

“These [tariffs] are not something we did just unilaterally, this is with the full support of the WTO. That’s a fact that people like the French choose to overlook,” Mr Ross said.

EU leaders have called for negotiations to solve the dispute, and Mr Ross said a possible settlement could come after the WTO authorises EU tariffs on American goods as punishment for US support of Boeing in a case likely to be concluded next year. Mr Ross said the Boeing tariffs could simply be subtracted from the Airbus tariffs.

“There would be a certain degree of logic to applying a net tariff, I’m not saying that’s what we would do but there have been people advancing that theory,” Mr Ross said.

“I have no idea if it’s agreeable to the Europeans or not,” he added.

Mr Ross, an 81-year-old New Jersey native who made his fortune as an investor in distressed assets in the steel, coal and textile sectors, was optimistic about the prospects that Mr Trump could finalise a limited truce with China on trade at the Apec summit in Chile next month.

“You never know with paperwork, you can always run into a glitch at the last minute. But I’d say [the chances] are better — far better than 50/50 that it’s signable on or about the time of the Chile conference,” Mr Ross said. China was “following through in good faith on the promises that they made” earlier this month to press ahead with big purchases of US farm products, he said.

Mr Ross said a settlement on the US placement of Huawei, the Chinese telecommunications equipment maker, on an export blacklist, was not part of the negotiations.

The Trump administration’s general licence for US companies to sell to Huawei expires in the middle of next month, but Mr Ross said this was not a hard deadline.

“The deadlines are within our control, we can shorten them, we can lengthen them, we can do whatever — at this point they are being treated separately and independently from the trade talks,” he said.

Mr Ross spoke to the FT immediately after a cabinet meeting on Monday as Mr Trump’s presidency continued to be afflicted by the impeachment inquiry run by Democrats in the House of Representatives who claim he used his position to press foreign leaders, most blatantly in Ukraine, to investigate domestic political rivals.

Mr Ross said the probe was based on a “hallucination” and indicated he did not participate in alleged efforts by administration officials to persuade Kiev to probe Hunter Biden, the son of former vice-president Joe Biden — a pressure campaign which is at the heart of the impeachment case. “I’ve had some discussions with the Ukrainians on other topics. I’ve never heard any of them imply a quid pro quo and I surely haven’t heard it from the president,” Mr Ross said. www.businessday.ng

Botswanan opposition leader Duma Boko (centre) plans to to seek ‘much fairer and more equitable’ terms from De Beers © AFP via Getty Images

Botswana presidential hopeful vows to take tough line on De Beers

Duma Boko seeks to boost country’s share of diamond wealth if he wins election JOSEPH COTTERILL IN JOHANNESBURG

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otswana’s main opposition leader has vowed to take a tough stance with De Beers in negotiations to restructure the way it operates in the world’s second-largest producer of diamonds if he wins Wednesday’s election, the closestfought in the country’s history.

Duma Boko, who heads the coalition Umbrella for Democratic Change, told the Financial Times he intended to seek “much fairer and more equitable” terms from the Anglo American-owned company if his party overturns the ruling Botswana Democratic Party’s unbroken 53 years in power.

The aim was to increase Botswana’s share of the wealth generated by the industry, the 50-year old lawyer said, adding: “We have a future with De Beers, but we will need to redefine the terms of that future and make it more equitable and fair.”

De Beers gets about two-thirds of its diamonds from Botswana.,

and the country negotiates sales agreements with the company every 10 years. The current deal expires in 2021 and President Mokgweetsi Masisi has launched talks to ensure a smooth transition. He has said that he is looking for a “win-win” from a “wonderful relationship with De Beers”.

Diamonds account for about a fifth of the GDP of one of Africa’s fastest-expanding economies and about three-quarters of export earnings. Debswana, a joint venture between Gaborone and De Beers, is the country’s biggest employer outside the government and the largest source of state revenue.

But Mr Masisi’s Botswana Democratic Party is facing its toughest ever electoral test since it took power after the country won independence in 1966. Ian Khama, Mr Masisi’s predecessor, has split from the party and accused it of increasing authoritarianism. Analysts have said the race is too close to call, although polls indicate a lead for the BDP. Meanwhile, high levels of unem-

ployment and inequality have led to rising disquiet over the diamond industry, with growing calls for a greater share of sophisticated parts of the business, such as sales and valuations, to be undertaken in Botswana.

Few countries and businesses have histories as entwined as Botswana and De Beers. The company found what would become the world’s richest diamond mine, Jwaneng, soon after the nation won independence.

As well as the 50-year-old Debswana joint venture, Gaborone also holds a 15 per cent stake in De Beers, with the rest owned by Anglo.

“For our people, every diamond purchase represents food on the table,” Festus Mogae, a former president,once said.

But many voters disagree. “These diamonds are benefiting only the top officials,” said a bus operatorin the capital, Gaborone, who declined to use his real name. “I’m 36 years old but I wouldn’t know a diamond by looking at it.”

Mario Draghi prepares for ECB swansong as policy debate rages Central banker faces pressing questions over monetary plans at his last meeting MARTIN ARNOLD IN FRANKFURT

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ario Draghi is preparing for his final monetary policy meeting at the European Central Bank on Thursday — but the controversy over his legacy will rage on.

The 72-year-old Italian economist, who will hand over to Christine Lagarde at the end of this month, is unlikely to announce any changes to eurozone monetary policy after the governing council meets. But he is set to face plenty of pressing questions.

The debate about ECB strategy has intensified since it responded to falling growth and inflation last month by cutting rates further into negative territory and restarting its bond-buying programme.

That decision widened divisions in the top echelons of the ECB. Investors

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hope to hear Mr Draghi’s valedictory assessment of what this split means for future monetary policy decisions, as wellasanyfurtherdetailonthepackage.

Here are five important themes to watch out for on Thursday.

Will the ECB take any fresh action?

After last month’s ruckus — particularly over its open-ended commitment to restart its €2.6tn bond purchase programme from next month — Mr Draghi is widely believed to have fired the last of his monetary policy bullets.

Oliver Rakau at Oxford Economics said: “After Mario Draghi rammed through his comprehensive easing package against some vocal opposition at the last council meeting in September, there is no prospect of any major policy decision at the upcoming meeting.”

Investors expect Mr Draghi to @Businessdayng

spend much of his time explaining and justifying last month’s decisions, particularly by pointing to signs that the eurozone economy has continued to weaken in the six weeks since.

“This ECB meeting will offer an opportunity for Mario Draghi to put the ECB’s monetary policy into perspective,” said Franck Dixmier, global head of fixed income at Allianz Global Investors.

Can the ECB heal its recent divisions?

The fallout from the last ECB meeting has been spectacular by central banking standards. The heads of the German, French, Dutch and Austrian central banks all publicly came out against parts of the package, which was decided against the advice of the central bank’s own officials and was attacked by a group of retired ECB grandees.

Thursday 24 October 2019

BUSINESS DAY

47

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Donald Tusk seeks EU consensus on fresh Brexit delay European Council president speaks to German and Irish leaders about January 31 extension JIM BRUNSDEN IN BRUSSELS AND GUY CHAZAN IN BERLIN

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onald Tusk was on Wednesday fighting to forge consensus among EU member states for a Brexit delay to January 31, as Brussels officials warned that any other course would lead to the bloc being dragged into the UK’s domestic political debate.

The European Council president spoke with leaders including Germany’s Angela Merkel and Ireland’s Leo Varadkar, the day after UK prime minister Boris Johnson lost a crucial vote in the House of Commons about implementing his Brexit deal.

Mr Tusk was making the case that the political turmoil at Westminster meant that the EU should accept Britain’s request for a postponement of Brexit to January 31.

His plan would leave the door open to the UK departing the EU sooner if it were ready, leading to the plan being dubbed a “flextension”.

Mr Varadkar has publicly backed the plan, which Mr Tusk hopes can be settled by a “written procedure”, without EU leaders having to meet for a special summit in Brussels.

There have also been signs of support from Berlin. Steffen Seibert, Ms Merkel’s spokesman, said on Wednesday that a Brexit extension “won’t fail because of Germany”.

He refused to be drawn on whether Berlin would welcome an extension until January 31, saying he did not want to “pre-empt consultations” in Brussels.

Norbert Röttgen, the influential chair of the German Bundestag’s foreign affairs committee, said in a tweet that the EU should endorse a sizeable delay.

“The one thing EU leaders can

do right now for the UK is [give] the country the time it needs,” he wrote.

But diplomats in Brussels said there were still doubts about the position of France, which has repeatedly warned that Britain must justify the need for any slippage in the current Brexit deadline of October 31, and stressed that the departure process needed to be brought to a close.

Amélie de Montchalin, France’s Europe minister, responded caustically to the Commons vote on Tuesday, saying that “we cannot prolong this situation indefinitely”.

In theory, the EU could offer the UK a different Brexit date to January 31, including a short “technical extension” of a matter of days.

Any extension requires unanimous support from governments of the other 27 member states, and EU ambassadors will meet on Wednesday evening in Brussels to discuss the next steps.

Mr Johnson, who also held a phone call with Mr Tusk on Wednesday, has warned that moving the Brexit deadline to as far away as January 31 would ruin his efforts to push his Brexit deal through the Commons, leaving no alternative but a general election.

But EU officials said that it would be politically treacherous for the bloc to deviate from the request that Mr Johnson made on Saturday in a letter to Mr Tusk for a delay to January 31.

British MPs who are against a no-deal Brexit passed a law requiring Mr Johnson to write the letter, but he refused to sign it, consistent with his pledge that Britain must leave the EU on October 31 after two previous delays to the UK’s departure from the bloc.

There is “absolutely no desire in the EU to . . . become an actor in the domestic UK debate,” said one EU official.

Caterpillar cuts outlook and posts quarterly profit decline Group’s shares fall 5 per cent as sales fall more than expected amid China weakness MAMTA BADKAR IN NEW YORK

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ndustrial bellwether Caterpillar lowered its profit outlook for the year and posted a bigger than expected decline in third-quarter revenues amid weak demand for construction and mining equipment.

The Illinois-based company cut its full-year earnings forecast to between $10.90 to $11.40 a share, down from its previous outlook of between $12.06 to $13.06 a share.

That forecast reflects “modestly lower sales” this year.

Caterpillar, known for its bulldozers, backhoes and other large machinery, said it expects demand to be flat in the current quarter.

Revenues fell 6 per cent from a year ago to $12.8bn in the penultimate quarter of the year as dealers reduced their inventories. That missed analyst expectations for $13.6bn, according to a Refinitiv

survey of analysts.

Shares in the company fell 5 per cent to $127.49 in pre-market trade, having been up more than 5 per cent year-to-date as of Tuesday’s close.

“Our volumes declined as dealers reduced their inventories, and end-user demand, while positive, was lower than our expectations,” said Jim Umpleby, chief executive.

Dealers reduced their machine and engine inventories by $400m in the third quarter, compared with an increase of $800m in the same period a year ago.

The decline in revenues was spread across all its major segments — construction, resources and energy industries. In construction, Caterpillar’s largest segment, revenues edged up in North America supported by road and non-residential building construction. However, they deteriorated in the Asia-Pacific region amid competitive pressures in China. www.businessday.ng

Marcelo Claure, SoftBank chief operating officer, Adam Neumann, WeWork executive chairman, and SoftBank founder Masayoshi Son

WeWork rescue: the winners and the losers Crisis at the co-working company has profound implications for investors, staff and SoftBank ANDREW EDGECLIFFE-JOHNSON AND ERIC PLATT IN NEW YORK, KANA INAGAKI IN TOKYO AND JUDITH EVANS IN LONDON

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rom the day SoftBank placed a jaw-dropping $47bn valuation on WeWork in January, the co-working company’s fate was largely in the hands of two people. Adam Neumann, the guru-like cofounder who wielded outsized control, and Masayoshi Son, the SoftBank founder who became his largest investor, were known for egging each other on to expand ever more aggressively.

On Tuesday, after a failed initial public offering left the business facing the prospect of burning through its cash within weeks, one man displaced the other. Mr Neumann surrendered his highvote shares and chairmanship in exchange for Mr Son’s tech and telecoms company saving WeWork from an urgent cash crunch.

Marcelo Claure, SoftBank chief operating officer, Adam Neumann,

WeWork executive chairman, and SoftBank founder Masayoshi Son The dizzying fall that took the valuation of Mr Neumann’s creation from $47bn in January to $8bn swept him from command.

Yet it was cushioned by a near$1.7bn package Mr Son offered his protégé: Mr Neumann can sell SoftBank $970m worth of shares, tap a $500m line of credit and receive a $185m “consulting fee”, according to people familiar with its terms.

The rescue leaves questions hanging over both men’s companies, however, and its fallout has profound implications for several other players in the WeWork drama.

Adam Neumann Mr Neumann has lost the special class of shares that just two months ago were supposed to give him 20 times other holders’ voting rights; he has surrendered his chief executive’s role, his chairmanship and his jet; he has seen his wife and other relatives taken off the company payroll; he has

abandoned plans to charge the company $5.9m for the “We” brand; and he has seen his fortune plunge from a peak of about $13bn.

But Mr Neumann has emerged a billionaire. He had already sold hundreds of millions of dollars worth of stock before attempting to take WeWork public.

With under 10 per cent of the company’s equity and voting rights and his position downgraded to that of a board observer, Mr Neumann’s sway will be severely limited but he has secured the right to nominate two directors, people briefed on the matter said.

What remains unclear is how the man who was the face of WeWork’s mission “to elevate the world’s consciousness” intends to use that remaining influence.

SoftBank Mr Son had committed more than $10bn to WeWork before its failed public offering, and is pouring in billions more — even though the company’s equity is now worth just $8bn.

Boeing profits weighed down by costs from 737 Max crisis US aerospace group expects regulators to approve aircraft’s return to service in Q4 PEGGY HOLLINGER IN LONDON

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oeing profits and revenues took a hit in the third quarter from the costs of the crisis surrounding the 737 Max aircraft, which has been grounded by the world’s aviation authorities since March after two fatal crashes in just over five months.

The US aerospace giant announced a 43 per cent drop in thirdquarter earnings from operations to $1.3bn, on revenues down by 21 per cent in the third quarter to $19.98bn.

To the surprise of many analysts it did not add to the $5bn charge taken in the second quarter to cover the costs of the global grounding of its fastest selling jet. Still, many expect further costs to emerge, with

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Boeing potentially facing cancellations the longer the grounding continues, while victims’ families and airlines have launched lawsuits.

The crisis has delivered a severe blow to cash flow, with the group recording an outflow of $2.4bn against a positive inflow of $4.6bn in the same period last year.

Boeing said it had developed software and training updates for the 737 MAX and “continues to work with the Federal Aviation Authority and global civil aviation authorities to complete remaining steps toward certification and readiness for return to service”. While regulatory authorities would determine the timing and conditions of return to service, Boeing said it had assumed this would happen in the fourth @Businessdayng

quarter of 2019.

Offering a sign of confidence despite intensifying controversy over the group’s handling of the crisis, Boeing said it expected to gradually increase the 737 production rate from 42 per month to 57 per month by late 2020.

“Our top priority remains the safe return to service of the 737 MAX, and we’re making steady progress,” said Boeing President and Chief Executive Officer Dennis Muilenburg. “We’ve also taken action to further sharpen our company’s focus on product and services safety, and we continue to deliver on customer commitments and capture new opportunities with our values of safety, quality and integrity always at the forefront.”

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Thursday 24 October 2019

BUSINESS DAY

FT

ANALYSIS

African countries are missing the data needed to drive development Statistics on population, employment and public services would put pressure on governments DAVID PILLING

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hen statisticians decided to track how well African countries were doing in moving towards their 2030 UN sustainable development goals, they discovered a curious thing: no one had the faintest idea. More accurately, on average, African governments keep statistics covering only about a third of the relevant data.

To be fair, the goals, which range from eradicating poverty and hunger to creating sustainable cities and communities, are overly complicated and sometimes unquantifiable. The millennium development goals that they superseded had eight goals with 21 indicators. The SDGs have 17, with 232 indicators. Yet statisticians for the Mo Ibrahim Foundation, which compiled the report, are on to something. African states don’t know enough about their people.

In this age of mass surveillance, that might seem counterintuitive.

Surely governments, not to mention private companies, have too much information on their citizenry? In fact, in many African nations with weak states, big informal economies and undocumented communities, the problem is the reverse. How many people are there in Nigeria? What is the unemployment rate in Zimbabwe? How many people in Kibera, a huge informal settlement in Nairobi, have access to healthcare? The answers to such basic questions are: we don’t really know.

Nigeria last conducted a census in 2006, when the population — a sensitive topic in which religion, regionalism and budget allocations are messily intertwined — came out at 140m. These days it could be

180m or 200m. Or perhaps more.

Or less. President Muhammadu Buhari recently complained that statistics quoted by international bodies, such as those alleging that Nigeria has more people living in absolute poverty than India, were “wild estimates” bearing “little relation to facts on the ground”. The riposte to that is simple. Work out what is happening and do something about it.

Likewise, unemployment is hard to define, let alone quantify, in a broken economy such as Zimbabwe’s where cited jobless statistics range from 5 to 95 per cent. Is a struggling subsistence farmer or a street-side hawker jobless or gainfully employed? For that matter what is the status of a government employee who receives her salary in a useless electronic currency?

According to Seth Berkley, chief executive of the Vaccine Alliance, keeping tabs on unregistered people in the sprawling “slums” of Africa’s increasingly massive megacities, is harder than working out what is going on in isolated villages. If governments do not know whether a person exists it is all too easy to ignore their rights — to healthcare, to education or to the vote. The Mo Ibrahim Foundation found that only eight countries in Africa register more than 90 per cent of births. Tens of millions of people are literally invisible. Mr Ibrahim, a Sudanese billionaire, calls data “the missing SDG”.

Emmanuel Gyimah-Boadi, former director of the Center for Democratic Development in Accra, argues that a national identity card, of the sort rolled out in India and now being introduced in Ghana, is a vital component of democracy.

“For me, it’s the beginning of citizenship,” he says.

Chile’s Piñera apologises and unveils reforms in bid to quell protests

Army remains on street as president’s proposals aimed at defusing crisis fall short of demonstrators’ demands BENEDICT MANDER IN SANTIAGO

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fter days of protests, Chilean president Sebastián Piñera has apologised for his government’s “lack of vision” and announced a reform package aimed at defusing the political crisis that has convulsed the South American country since a 3 per cent rise in metro fares triggered widespread protests and a state of emergency.

The package, which requires congressional approval, included a rise in the minimum wage, pension payments, health benefits and electricity subsidies and will partly be financed by raising taxes for the wealthiest Chileans.

“It is true that problems accumulated for many decades and that different governments were not able to recognise this situation in all its magnitude,” the president said late on Tuesday. “I recognise and apologise for this lack of vision.”

Quinn Markwith, analyst at Capital Economics, said the finance

minister had estimated the total cost of the measures at $1.2bn, or 0.4 per cent of GDP. “That estimate seems quite plausible to us,” he said.

“The key thing in this context is that Chile’s public finances are quite strong, and so they can afford this without causing bond yields to rise.”

Yet the proposals stopped well short of the demands of Mr Piñera’s most vocal critics.

In recent days, Santiago has been convulsed by riots, looting and arson, pushing the government to introduce a state of emergency and suspend the rise in metro fares.

The protests have exposed deepseated anger among Chileans at an unequal system that has excluded them from the country’s remarkable economic performance in recent decades. The protests are “not about the 30-peso rise in metro fares, but 30 years of a faulty democracy that didn’t attend the needs of the majority of the people,” said Camila Vallejo, leader of Chile’s Communist party. www.businessday.ng

North-east England: snapshot of an economy on the brink of Brexit The region is considered the UK’s most vulnerable but some businesses report full order books despite falling investment DELPHINE STRAUSS IN NEWCASTLE

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n a room above Newcastle’s Live Theatre, an engineer, a farmer and a manufacturer of fitted kitchens are discussing the future of the UK economy — or at least their small parts of it.

Around the same table, an accountant and a recruiter are comparing notes on the outlook for their businesses, while a pair of property consultants assess the local market.

This disparate group has been meeting on and off for years, convened by Mauricio Armellini, the Bank of England’s garrulous agent for the north-east region as part of his intelligence-gathering operations.

The BoE’s UK-wide network of agents exists to give policymakers a window into local communities. Agents hold face-to-face meetings with hundreds of companies, of all sizes and from all sectors, reporting back their findings to inform monetary and financial stability policy decisions.

For London-based policymakers trying to track economic conditions across the UK, the agents’ work has become even more valuable in the past year. Brexit has distorted businesses’ behaviour, with stockpiling, factory shutdowns and swings in sentiment making economic data unusually volatile and difficult to decipher. Contacts on the ground have helped gauge the impact on the economy of prolonged uncertainty but also the robustness of businesses and households in the event of a shock.

“In the year I’ve been on the [BoE’s] Monetary Policy Committee, the economy has got softer and softer,” says Jonathan Haskel, a professor at London’s Imperial College, and external MPC member, who was part of the discussion in Newcastle.

Throughout that year, the BoE has left interest rates on hold at near-record lows, essentially waiting to see how Brexit would play out. But when the MPC next meets, on November 7, the case for action may be growing clearer.

Until recently, the MPC has argued that rates will eventually need to rise to contain inflation and offset chronically weak productiv-

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ity growth. If the government succeeds in driving through its Brexit deal, then some on the MPC say a rebound in business investment could put interest rate rises back on the agenda. That was the gist of comments made by Dave Ramsden, the BoE’s deputy governor, and Gertjan Vlieghe, an external MPC member, earlier this month.

If the UK leaves without a deal — which remains a possibility — the MPC has warned that rate cuts to limit the economic shock would not be automatic, as a likely fall in sterling, and its inflationary effect, would limit their room for manoeuvre. But Mr Vlieghe and Michael Saunders, another external MPC member, have suggested that even if a chaotic Brexit is avoided, rate cuts may be needed, because of the uncertainty now damaging the economy against a darkening global backdrop.

“A scenario of entrenched Brexit uncertainty is likely to keep economic growth below potential, and require some monetary stimulus,” Mr Vlieghe says. “We will probably know in the coming weeks which of these scenarios will prevail”.

Once a home of heavy industry, from shipbuilding to engineering and mining, the north-east of England has suffered more than most regions from post-industrial decline.

Now, Newcastle — which voted to remain in the EU, although the region as a whole opted to leave — has a thriving university, cultural institutions and a more resilient servicebased economy. But other parts of the region remain reliant on a handful of industrial employers.

The north-east would be worse affected in the long term than any other region, according to the government’s own modelling, if the UK were to leave the EU without a deal — or indeed even if Boris Johnson’s current plan were to pass — leading to an economic relationship with the EU based on a bare-bones free trade agreement.

This is a consequence of the area being more reliant on goods exports, especially in sectors such as carmaking — Nissan recently said it @Businessdayng

would review production of a new SUV model in Sunderland, 11 miles south-east of Newcastle, if there was a no-deal Brexit. The damage would be particularly painful for a region where average incomes, employment and productivity still lag well behind the UK average.

Yet at least half the executives gathered around the table say business is thriving, for now. “Most of our clients are doing well . . . they are busy, business is good, they’ll take on labour,” says Andrew Moorby, managing partner at the accountancy firm MHA Tait Walker. He adds that his office has handled just one insolvency in the past two years. “It’s not doom and gloom — the world hasn’t stopped for Brexit.”

Ian Dormer, managing director of Rosh Engineering, admits that his business repairing high-voltage equipment is less sensitive to the economic cycle: contracts with regulated electricity companies and large industrial customers are usually long term. But he, too, was struggling to keep up with orders. “I’m turning work away because I can’t get skilled labour,” he says.

Their reports of healthy order books are at odds with the gloomy tone of some recent business surveys, but consistent with national trends in the latest official data.

Figures from the Office for National Statistics show gross domestic product recovered from the second quarter’s contraction to grow 0.3 per cent in the three months to August — feeble by historical standards, but probably enough for the UK to escape a technical recession. A fall in manufacturing output was offset by a recovery in the services sector that drives the UK economy.

And while business investment has been falling, consumers have so far been willing to keep spending — helped by near-record employment, and a recent pick-up in real wage growth. “The economy has not crashed,” Mr Saunders said recently.

“The effect of Brexit uncertainties is perhaps akin to the economy developing a slow puncture such that growth has slowed to a mere crawl.”

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Thursday 24 October 2019

BUSINESS DAY

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50

Thursday 24 October 2019

BUSINESS DAY

Investing in Rivers State Power supply crisis for PH businesses:

Expert points to collocation as way out Top 4 business threats in PH: Security, power, Access to finance, Contracting with the govt - survey Ignatius Chukwu

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ower has been listed as second topmost threat to businesses in Rivers State and an expert says the end is not anywhere in sight. Instead, he has advised business to consider collocation option to share common facilities especially power supply. Chinedu Amah, CEO of Sparkonline Ltd, has urged businesses to look to off-grid sources especially solar inverters.

Amah was a speaker at the Ease of Doing Business roundtable held in Port Harcourt Monday morning on the platform of Startup Port Harcourt 2019.

Ease of Doing Business Security is top of the list of threats to investments and businesses in Port Harcourt, according to the survey announced on Monday at the event organized by Startup Port Harcourt. Speakers said people now run home by 6pm and that shops hurry to close by 7pm.

Speaking specifically on power supply situation, Amah, a consultant on power and media expert said generating sets are now a national menace, though he said they create 2mw of alternative power to small business.

Saying Nigeria must do away with generators to save the nation from noise and air pollution, Amah said generators are ‘wahala’. He rather pointed to inverters as a saving grace. He said from research, whereas an average Nigerian family or small business spends N30,000 on fueling generators and repairs, he said N20,000 can guarantee same household an inverter.

He said the over one million homes in Port Harcourt spend so much on power without getting it in good measure. He warned against creating global warming which he said has led to strange flooding in the Niger Delta. He said; “Collocate with people who do same thing or have same need.

Pull resources, share cost.”

He talked about some investors

Victor Briggs, principal consultant, VTB Consulting.

Chinedu Amah, energy consultant

who now buy plants and supply power to groups of businesses in form of mini off-grid systems. He said collocation is hope for energy solution. “Use cooperative approach. Reduce costs for SMEs.”

tomated system and that tax clearance certificates are now being processed. He said oil majors are signing on and that the Rivers App will soon allow people to interact. .

He said the state general hospital, Braithwaite Memorial Hospital (BMH) is now a teaching hospital with information management system. It has registered over 66000 on the platform. E-wallet allows would someone to access services anywhere. This would eliminate waiting queues in hospitals in the state thereby enhancing ease of doing business.

He said: “Things are done faster now. Older doctors are slow for it, but young doctors are keen. Health Ministry soon out with database of all health service providers. A patient’s record can be in the cloud.

There would be one opening file for a patient.

“The new court year will be done electronically. Over 400 lawyers have registered and are training to start soon. Filing of cases will be e-filing. Affidavit processing would now be online though the law still requires face to face with the Commissioner of Oath. Survey shows people swear up to five affidavits. .

“Private schools, will be reviewed as it has been found that many schools operate without registration, The BoPP is coming online, too, to regulate contracting with the government. It’s for young people to do business. Rivers Yellow Pages coming. Enough data is coming. So, you do what you want with it.”

He talked about the sustainability clause and said the method of doing with government is changing. There would be unschooling scheme to allow people with wrong education to unlearn and relearn as is done abroad where some parents

Ugly power supply prospects Amah called for conversations to start everywhere. He said: “It is amazing that Nigeria delivered its first power unit as far back as 1886, even before Britain did. Now, we are down as there was no further investment down the line.

“The national grid was designed in the 1960s to carry the power needs of that time but we are still stuck with that capacity. Nigeria has no power supply, period. There is no gas to power the thermal stations. The national grid cant even take the little produced. The poles to transmit power are too old and weak to carry power.”

It was said that at the moment, the grid holds 4000mw. Nigeria has capacity to produce 12000mw (where 50000mw is needed)

but only does 7000mw and only 4000mw can be taken. The result is that businesses are forced to run on generators. Gas from Nigeria is believed to pollute the ozone layer by 6 per cent.

Amah regretted the scenario where utility accounts are domiciled with the landlord instead of the payers, the tenants. It has ugly outcomes. Metering is said to be poor so far with only with 20 per cent covered in the PH zone by 2018. Also, energy theft is said to be too high. Bypass from prepaid meters is very high, sometimes as high as 80 per cent in a community.

There is also the problem of import duty on fully manufactured meters jumped from 10 per cent to 35. Some contributors advised business owners to avoid estimated bills and go prepaid meters and energy bulbs.

Victor Briggs, Principal Consultant, VTB Consulting, spoke on how to access funds outside the banks and harped much on cash flow, record keeping, and savings to attract angel funds. He explained the four Cs that give god credit rating and loans as cash flow, capacity, collateral, conditions of your business, and character. “ Keep good records in case venture investors come knocking.”

Ibifuro Asawo: CEO of Cinfores Limited Transacting with Government Automation is crucial. He said the focus on the Rivers IT policy is making tax payment easy and transparent. “About five programmes will be launched soon.

People will now pay online, etc.

The system has been tested for one year.”

He said over 6000 organisations have registered on the Rivers au-

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make their children to unlearn due to heavy immorality learnt at school.

He said: “Change is here. Technology is moving faster than we think. The way business is done with government is changing.

Brace up.”

Christy Eze: Chartered Inst of Secretaries and Administrators Structure is important. Goal for 2019 is how to scale up. Tech is helping us do better. Your business must solve problems. The Rivers Revenue Board is doing a lot to make paying taxes easier.

Nigeria is failing in Ease of Doing Business and SMEs are the hope for jobs. Some 78m SMEs are in existence and they contribute up to 90 per cent of businesses in existence and about 50 per cent to GDP. But, they lack access to credit. It is important to have structured businesses as the only way to attract funding because angel investors are waiting around for credible business plans.

Banks are averse to risks and may not fund startups and they see SMEs as often badly managed, too personalized, no structure, and lacking credit information. They should look to government lending windows. CBN created a refinancing window of about N200Bn. Parting shot by an environmentalist: Climate change is real and hot weather is coming. Tree cutting is dangerous. Plant trees around your homes. Trees create micro climate that absorbs heat, noise, fans you, gives oxygen.

Warning: Soon, flooding will drive PH out like the second coming of ‘The Flood’. There is something we can do. Let’s do it now.

Thursday 24 October 2019

BUSINESS DAY

51

Garden City Business Digest

Total (E&P) unveils transport scheme for Egi host communities Beneficiaries say its first of its kind Ignatius Chukwu

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otal (E&P) has unveiled a minitransport scheme for its host communities with new buses and tri-cycles to boost local transportation.

This has again attracted attention to the oil company which seems bent on transforming the economy of its host communities to a self-sustaining level. Over the years, the company has intervened in skills acquisition and subsequent empowerments, loans scheme to fund willing businesses in the areas, and steady agric intervention programmes in the Egi areas.

The oil major has mentored its host communities on how to form companies and nurture them.

On Monday, October 21, 2019, Total handed the vehicles to the cooperative groups and beneficiaries to its community stakeholders at a location in Port Harcourt where the company gave out 56 vehicles (16 buses and 40 tricycles).

Throwing some light to the scheme, the deputy general manager, community affairs and development, James Urho, represented

by Patrick Idoko, manager, Business & Enterprise Development, said the vehicles were meant for youths in Oil Mining Lease 58 on behalf of the NNPC/TEPNG Joint Venture operations in the area.

He said Total (E&P) did what it did because of its commitment to investing in people and giving them skills and the wherewithal to progress, saying it is the best way to build the society.

He went on: “Our Enterprise Development Unit has continued to identify, evaluate, and support micro and small scale enterprises with the potential of creating wealth for individuals within the ambit of

Total doles out buses and tri-cycles to host communities to boost local transportation

the community. Today’s event is another facet of the several well-intentioned interventions by the company, to encourage and boost enterprise development within our host communities.

“You have witnessed the various micro-

credit, agricultural and entrepreneurial skills trainings and assistance given to various groups with the belief that assisting our people to take off will enable them soar and grow to their potentials.

“Today, we will launch and hand over

40 tri-cycles and 16 mini buses to youths within the Egi communities. These will, amongst others, support inter and intra communal movement of persons, goods and services within the local economy.

“The programme today is structured such that, as they are prudently used to generate income for the beneficiaries, they also will be in the position to pay off the cost of the items so that the income generated can be used to re-launch the same scheme for others to benefit from.

“We urge you to ensure that you make your monthly remittances for these items on time and as agreed into the accounts created for this, so that those who are desirous of following your path will have to opportunity to do so. The success of this scheme will also enhance the support for its continuation and sustainability.”

He talked about hope for success stories in the near-future.

Most of the beneficiaries looked happy and excited, which is normal with any young person that acquires a new ride.

Speaking with newsmen, the president of Blue Whale Cooperative Society, Okirie Konye Tom Braide, who is one of the beneficiaries, said his members must thank Total (E&P) for this unique opportunity. « This is the first of its kind. Yes, we have been seeing their agric programmes but in this aspect, this is the first time. We pray we do not fail Egi people in this scheme. The repayment time is one year. » On whether they operators would restrict their routes in Egi to boost ransportation in the area, Braide said a beneficiary is free to ply any viable route. « We agree that it is to help alleviate transport problems in the Egi locality but since we must pay back, we have to look for viable routes to ply. We also have to manage the vehicles on our won.

Help! Kidnappers on rampage Port Harcourt

by Boat

IGNATIUS CHUKWU

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very hour in Rivers State and most other states far and near, somebody is either being kidnapped or being released from the dungeon. Many are dieing in detention. The buhues are now human farms.

The stories take different dimension every week. The latest story that touches the heart is the killing of mother and son, 54-year-old Awotongha Nelly Ala-Binte who was kidnapped in Port Harcourt with her 22-year-old son, Tarilate Edwin Ala-Binte. The son was to graduate as best student in Petroleum Engineering in Afe Babalola University, Ekiti, next year.

The kidnappers whisked them to the river

as usual and began to ferry them to their gang hideout. Blessing Wikina reports that the kidnappers came across a rivakl gang and a gun duel ensued. This led to the death of mother and son, but the gangs survived to fight another day.

The sad thing is that the kidnappers still demanded and collected ransom from the family. Wikina calls it ‘part of our story in Rivers State’ of today. Kidnapping is now the biggest industry in Nigeria, spreading across West Africa. Militants introduced and used it as a weapon of agitation but terrorists and bandist have taken over. Kidnapping is bigger than the oil industry at the moment.

Last Sunday, a church member was moody and when approached said his best friend lost two persons to kidnappers. They killed his children and still milked him dry before he realized they were dead. Now, he begs for food, such a big fellow.

Just within same week, a motorist picked up a woman and two kids, but before the woman could board, he zoomed off with the children. Soon, he was back on the road to kidnap more children. The woman recognized him and gave the alarm. He was apprehended and he took them to the house where he locked up his victims.

Everyday in PH and most other places, chi-

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dren get lost, everyday. Kidnappers are now on rampage. They seem to have a target to meet before December. They kidnap, they butcher and sell in parts; they still collect ramsom. The ones that kidnapped my niece last few months freely raped the girls and threatened her that if her people did not bring the money quick, they would rape her to pregnancy and she will deliver it in the forest there with them. They do not give a hoot to your medical condition, your virginity, your sanctity, your whatever.

They are killers, too. Many of them want everything, sex, human parts, and ransom.

Some in the creeks take the elderly women caught paddling in rivers to their hideouts as cooks, if they cant rape them.

The greed of the Nigerian kidnapper! They use all manner of tricks. Everyday, parents advertise missing children. You send a child to go buy something across the road, she could miss.

The kidnappers roam the streets in PH now.

The other day, a woman came to plait her hair and soon manipulated the hair plaiter to send her maid to the nearby market with the two children to buy things for her. Soon, she went and intercepted them, collected the two children and fled. When the maid came back, she said the woman sent her on further errand and said she would take the children back to the mother. No, she did not. She rather fled

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with them. So, just to make some money plaiting hair, the woman would lose two children.

Blood is wailing everyday in PH. Everyday on PH-Owerri Road, a vehicle must be abducted with entire passenger strength. They collect minimum of one million naira to free a person. The road is now empty.

Farmers see everything but keep mum.

The police seem overwhelmed, the state government seems tired and perplexed, and the FG seems aloof. The police are rather getting kidnapped. They now pay ransom. So, if the defender now seeks defence, what shall the common man do. It is getting out of hand.

The state government does not know whether to cry out or to deny it. If they accept its out of hand, they fear it might be used politically against them; if they deny, the water threatens to swallow the society. The FG has given the command but in a country of 200 million people with less than one million policemen, who would police whom? There is trouble.

The politician only seeks political advantage, not solution, except the solution fetches political mileage. Too bad! If nothing is done, all of us will rush into the streets like Argungu festival fish hunters, each person kidnapping the other. Cannibalism is close, barbarism is already here.

@Businessdayng

industry Insight

BUSINESS DAY Thursday 24 October 2019 www.businessday.ng

Learning from China’s industrial strategy ODINAKA ANUDU, MICHAEL ANI & GBEMI FAMINU

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a move towards light industries.

The policy of reform and opening-up has given extensive scope to the common development of various economic sectors. Individual and private industrial enterprises and enterprises have mushroomed with investment from outside mainland China.

Domestically, modernisation and economic growth have been the focus of the reformist policies introduced by Deng Xiaoping, and in attempting to achieve this, the leadership has implemented the Four Modernisations Program that lays special emphasis on the fields of agriculture and industry.

Reform of state-owned enterprises has always been the key link of China’s economic restructuring. The Chinese government has made various attempts to solve the problem of chronic extensive losses in this sector and by now almost every state-owned enterprise has adopted the company system.

After being transformed into joint stock companies, the economic benefit of the state-owned enterprises increased steadily and their overall strength and quality were remarkably enhanced, gaining continuously in their control, influence and lead in the whole national economy.

The role of free market forces has also been instrumental in altering China’s sectorial makeup. After 1979, the forces of supply and demand meant that consumers could play a greater role in determining which crops would be planted. This had the effect of making more profitable the planting of such crops as fruit, vegetables and tea. As a consequence, however, traditional grain crops have suffered, as farmers prefer to plant the more profitable cash crops.

Increases in light industrial production and more profitable crops brought about by the loosening of market controls were not

always enough to satisfy consumer demand, which in turn led to inflation. Rather than increased demand being met with increased supply, the manufacturing sector and economic infrastructure were still too underdeveloped to supply a population of over one billion people with the commodities they wanted or needed. Instead, a ‘dual track’ pricing system arose which promoted arbitrage between official and free-market prices for the same commodities.

It must, however, be pointed out that increased investment into capital construction programs and Township and Village Enterprises (TVEs) was the government’s solution to reviving the economy.

The national economy had been characterised by a large share of industry—standing at 61.2 percent of total GDP in 1990—with a smaller share of 24.4 percent devoted to agriculture and a much

”

hina is a practical example of how an economy can grow from the ashes of nothingness to an industrial Brobdingnagian.

It is the third largest economy in the world after the United States and the European Union, with an estimated gross domestic product of over $12 trillion.

Its economic strength cuts across various sectors, including manufacturing, technology and infrastructure, which have not only improved its economy but also expanded investments in other emerging countries, including Nigeria.

In 2018 alone, its trade volume into Africa hit a record high of $204 billion, according to the country’s official data.

Chinese President Xi Jinping has also announced $60 billion in loans and other financing at a Beijing conference with African nations, three years after pledging a similar amount.

But China has an age-long history of being one of the poorest countries in the world, with over 200 million of its citizens living in abject poverty.

The World Bank says that more than 850 million Chinese people have been lifted out of extreme poverty due to economic reforms, with poverty rate falling from 88 percent in 1981 to 0.7 percent in 2015.

The country’s spectacular performance became a prominent feature of post-1980s economic reform process that saw its share of global merchandise exports increase from 1.8 percent in 1990s to 3.9 percent in 2000, to about 13.2 per cent in 2017.

In the early 80s, the Chinese government announced an industrialisation policy that would reduce state-owned influence on the production and ownership of goods and services so as to allow private flow of capital across all sectors of its economy.

Prior to the mid-80s, the state sector accounted for about 70 percent of output. However, by 2002, the share in gross industrial output by state-owned and state-holding industries had decreased with the state-run enterprises themselves accounting for 46 percent of China’s industrial output.

As a result of the economic reforms that followed, there was a significant increase in production by private entrepreneurs and foreign investors.

Since the period, the trend away from the agricultural sector toward industrialisation has been dramatic, and is a result of both policy changes and free market mechanisms. During the 1950s and 1960s, heavy industries received most attention and consequently grew twice as rapidly as agriculture. After the reforms of 1978, there was more attention to the agricultural sector as well as

China has gone past this, being world’s most successful in renewable energy, producing 728 GW of renewable powe

smaller service sector constituting only 14.4 percent of GDP. Such a constitution of GDP was a reflection of the Soviet influence of a planned economy since the 1950s.

The dominance of the industrial sector in the PRC’s GDP constitution has not always been the case. However, it has been largely through governmental intervention that this evolution took place.

In 2004, of the industrial sector added value created by all stateowned industrial enterprises and non-state industrial enterprises with annual turnover exceeding five million yuan; state-owned and state stock-holding enterprises accounting for 42.4 percent; collectively owning enterprises 5.3 percent, and the rest taken up by other non-public enterprises, including enterprises with investment from outside mainland China, and individual and private enterprises. The result is a dynamic juxtaposition of diversified economic elements.

In 2004, of Chinese enterprises ranking in the world’s top 500, 14 enterprises of China’s mainland were all state-owned. Of China’s own top 500, 74 percent (370) were state-owned and state stockholding enterprises, with assets of 27, 370 billion yuan and realising profit of 266.3 billion yuan, representing 96.96 percent and 84.09 percent respectively of the top 500 corresponding values. Small and medium-sized enterprises and non-public enterprises have become China’s main job creators.

Private enterprises alone provided 50 percent of employment of the entire society.

China paid a particular attention on the business environment and encouraged small businesses, especially export-oriented ones, with funding and incentives. China’s loan prime rate, equivalent to Nigeria’s monetary policy rate, is 4.2 percent as against Nigeria’s 13.5 percent. A number of funds

can be borrowed at less than four percent, especially by small businesses.

Cost of production in China is low as energy and infrastructure were prioritised before the industrial journey.

China has gone beyond roads and railways to develop coastal regions and inland areas along major rivers.

Early in the year, China’s top economic planner National Development and Reform Commission (NDRC) approved construction of seven infrastructure projects in energy and water worth $72 billion this year. This is more than twice Nigeria’s 2020 budget.

Manufacturing sector of China is driven largely by technological innovation and digitalisation.

Nigeria’s infrastructure from roads to bridges and rails are broken and death traps, with businesses incurring high logistics costs. Ports in Apapa and Tin Can in Lagos are congested and containers stay there for days. This does not happen in China. China has 34 major ports and more than 2,000 minor ports. Africa’s largest economy, in contrast, has only two functional but highly congested ports in Lagos, ignoring others in various parts of the country. Experts say no country grows its economy this way.

Nigeria cannot grow its industries without diversifying its energy sources. In 2017, manufacturing companies in Nigeria spent as much as N117.38 billion in fuelling their plants to run daily operations, according to data from the Manufacturers Association of Nigeria (MAN).

China has gone past this, being world’s most successful in renewable energy, producing 728 GW of renewable power.

Up till now, Nigeria is yet to re-start an export expansion grant scheme that will boost export earnings. China does not waste time in identifying genuine exporters and funding them.

Analysts want Nigeria to take its economy more seriously. Poverty rate is nearly 50 percent, according to World Poverty Clock, and many citizens cannot buy products made by manufacturers.

“We have been consistently recommending the country to diversify the economy because reliance on oil does not serve very well and that means to continue with structural reforms that would make that possible,” Kristalina Georgieva, managing director of the International Monetary Fund, said this at the recent World Bank/IMF annual meetings in Washington DC, United States.

“Nigeria matters to the whole of Africa. When Nigeria does well, Africa does well. What we see, however, is that economic recovery remains still too slow to reduce vulnerabilities and most important to reduce poverty in the country,” Georgieva further said.

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