Businessday 28 may 2018

Does UACN need a make over? Abdul Bello’s challenge at Nigeria’s oldest conglomerate UAC 2017 revenue was the highest in four years (since 2014).

But a deeper look shows that there is not much to cheer. Even though UAC revenue surged eight percent from N82.6 billion in 2016 to N89.18 billion

in 2017, profit for the year shrank 83 percent to N962.8 million in 2017 from N5.67 billion in 2016.

Profit shrank partly because there are indications that the company’s gross margins are under pressure despite rising sales. Gross profit margins (the difference between

See BusinessDay Market and Commodities Monitor on page 4

Continues on page 47

DIPO OLADEHINDE & ABISINUOLA DAVID-OLUSA

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ike Nigeria, UACN, the country’s oldest conglomerate is looking like a company in need some makeover. At first glance, UACN’s 2017 financial performance looks good.

BD DEEP VIEW

news you can trust I **monDAY 28 may 2018 I vol. 15, no 63 I N300

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L-R: Ernest Ebi, chairman, board of directors; Nnamdi Okonkwo, managing director/chief executive officer, and Nneka Onyeali-Ikpe, executive director, Lagos and South-West, all of Fidelity Bank plc, at the bank’s 30th annual general meeting in Lagos, weekend.

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Party congresses, foreign investors’ repatriation put pressure on naira N N

Investors take profit in small cap bank stocks

…as NSE down 13% since January peak IHEANYI NWACHUKWU & MICHEAL ANI

HOPE MOSES-ASHIKE, Lagos & ONYINYE NWACHUKWU, Abuja

igeria’s currency is seeing sell pressure gradually building against it as a result of political activities and foreign portfolio investors repatriating their investment proceeds.

The Naira was trading at between N367 and N368 per U.S dollar on Friday “on the street trading market” known as parallel market at the Lagos International Airport, BusinessDay investigation revealed.

At Apapa area of Lagos, naira was quoted at N366 to the dollar at the black market. “Dollar is scarce because demand is high,”

Falls to N367/$ on black market CBN orders banks to sell FX to travelers across the counter

Continues on page 46

Ibeto Cement shrugs off warning signs, inks $850m Milost deal

LOLADE AKINMURELE

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wo weeks after Japaul Oil and Maritime services backed out of a planned $350 million (N126 billion) deal with Milost, citing “numerous red flags associated with the proposed equity injection,” ceContinues on page 46

Continues on page 4

FG recovers N13.8bn as whistleblowers target companies evading tax P. 45

igerian Stocks have been steadily selling off since a January 19 peak as investors took profits on small capitalised banking stocks which lead the market in gains

L-R: Ofovwe Aig-Imoukhuede, director, Africa Initiative for Governance (AIG); Ngaire Woods, Dean, the Blavatnik School of Government, University of Oxford; Aigboje Aig-Imoukhuede, founder and chairman, AIG; Justice Georgina Wood (rtd), 2017/2018 AIG fellow and immediate past chief justice of Ghana; Chienye Ogwo, CEO, AIG; Back Row - L-R: 2017/2018 AIG Scholars - Emmanuel Taiwo, Chukwunonso Iheoma, Oluwapelumi Simpson, Abdul-Fatawu Z. Hakeem, Efosa Trevor Edobor, and Emokiniovo Akpughe, at the public lecture titled ‘Rule of Law, the Promotion of Sustainable Development and Ghana’s Experience: A View From the Bench’, delivered by Justice Georgina Wood (rtd), at the Blavatnik School of Government, University of Oxford, recently.

New BusinessDay fact check of Presidency statements shows mixed accuracy P. 4

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businessday market monitor Commodities Brent Oil

Biggest Gainer

$76.36

MRS N36.05

Cocoa

US $2,558.00

Biggest Loser

4.95pc

Everdon Bureau De Change

Bitcoin

NSE Guinness N100

39,323.62

-3.85pc

2,749,300.35

-0.88pc

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$-N 364.00 367.00 £-N 488.00 498.00 €-N 421 .00 431.00

FMDQ Close Foreign Exchange Market

Spot $/N

I&E FX Window 361.57 CBN Official Rate 305.90

fgn bonds

Treasury Bills 3M

6M

5 Years

10 Years

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0.32 12.89

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-0.20% 13.45%

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New BusinessDay fact check of Presidency statements shows mixed accuracy LOLADE AKINMURELE

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he Nigerian Presidency, Thursday, reeled out an array of “facts” that snowballed into claims that the economy is firmly on the road to diversification.

A BusinessDay fact check however dispels those claims.

In a press statement signed by Femi Adeshina, special adviser to the President, the Presidency said “According to the National Bureau of Statistics (NBS), the economy has recovered from the slowdown and eventual recession, which started in 2014,” the statement read, wrongly citing 2014 as

the year the economy started to slowdown rather than 2015.

In 2014, the economy expanded 6.3 percent, after a GDP rebasing exercise that cemented Nigeria as Africa’s largest economy.

The slowdown, the Presidency alluded to, actually started in 2015, after the lengthy collapse in oil prices that started in mid2014 caused growth to slow to 2 percent, the lowest in a decade, according to the National Bureau of Statistics (NBS).

The decline worsened and come 2016, the economy was soon left picking up the pieces from its first recession in over two decades.

But there has been some im-

provement as the Presidency rightly noted.

“There has been improvement, with stronger growth for three successive quarters,” the statement read, referring to progress made since the economy exited recession in the second quarter of 2017.

“From contracting by 0.91 percent in Q1 2017, the economy has grown by 0.72 percent in Q2 2017, to 1.17 percent in Q3 2017, and 2.11 percent in Q4 2017.

“The Q1 2018 GDP shows that the economy has recorded a GDP growth of 1.95 percent, compared to a contraction of 0.91 percent in Q1 2017.”

On a quarter on quarter basis,

the economy actually performed worse, having gone from 2.11 percent in the fourth quarter of 2017 to 1.95 percent this year (first quarter 2018).

The Presidency went on: “The growth is driven by Agriculture and Industry, which shows that finally, after more than 50 years of lip service, the Nigerian economy is on the road to diversification.

“The oil sector’s contribution to GDP is 9.61 percent, while nonoil sector’s share is 90.39 percent.”

But the non-oil sector has contributed more to GDP than the oil sector since 2014.

In the first quarter of 2018when oil prices averaged $66 per barrel and production was

1.8 million barrels daily- oil contributed 9.61 percent to GDP, up from 8.5 percent in Q1 2017 and 6.75 percent as at the end of 2016 when the militant hostilities were at fever-pitch levels.

Also, contrary to the Presidency’s claim that growth in the first quarter was driven by Agriculture, our fact check shows otherwise as the sector slowed from 4.8 percent growth in Q4, 2017 to 3 percent growth in Q1, 2018.

In contrast to the scenario that played out in the previous quarter, the oil sector was the major growth driver in Q1’18.

The oil sector grew markedly Continues on page 47

Party congresses, foreign investors’...

Continued from page 1

traders said.

On the website of Bureau De Change operators (BDC), the local currency was seen trading at N367/$. At the investors and exporters window, the foreign exchange market on Wednesday May 9, 2018 witnessed 0.14 percent depreciation in naira/dollar exchange, after five months of trading around N360 per dollar. It closed at N361.57k per dollar on Friday, data from FMDQ revealed.

Johnson Chukwu, managing director/CEO, Cowry Asset Management limited, explained that Foreign Portfolio Investors (FPIs) are not rolling over their investments.

“What we have seen is that they are beginning to repatriate their capital because yield in fixed income moderated,” Chukwu said.

Chukwu told BusinessDay on phone that investors are being lured by interest rate rises in the United States.

Foreign investors have repatriated N233.72 billion worth of equities between January and April 2018, up 49 percent from the N156.62 billion of outflows recorded between January and April 2017, according to data from the Nigerian stock Exchange (NSE).

BusinessDay gathered that some politicians are now patronising the informal market for foreign exchange transactions for fear of having their formal financial transactions tracked by the government.

The Central Bank of Nigeria (CBN) in 2017, released a framework for the operations of the Watch-List in the Financial System.

The Watch-list is a database of bank customers identified by their Bank Verification Numbers (BVNs),who have been involved in confirmed fraudulent activities.

“The watch-list shall be effective from the inception of the BVN,” CBN stated in the framework.

The ruling party - All Progressives’ Congress and the opposition People’s Democratic Party (PDP) spent a total of N7.7 billion during the general elections in 2015, Official audit reports submitted to the

Independent National Electoral Commission (INEC) indicated.

While the APC said it spent only N2.9 billion, the PDP — which was the ruling party at the time — said it spent N4.8 billion for the polls.

The APC report, audited by Mai-Alheri and Co., said the party generated only N604.5 million in 2015, but spent N2.9 billion, leaving a deficit of N2.3 billion.

The then ruling PDP, according to its audit report done by Paul Akinade Adebimpe and Co, earned only N799 million in 2015, but spent N9.53 billion leaving a deficit of N8.7 billion.

Analysts said the election spending this year would be higher considering the value of naira then and now. Most politicians like spending in dollar as it is easier to carry around. Electoral activities therefore always lead to a spike in demand for dollars. The APC has been having party congresses in the last three weeks and is preparing for its national congress fixed for June 23.

The CBN last week kept its monetary policy stance at 14 percent for a 9th consecutive period, amid slowing inflation rate, for fear of liquidity risks expected from election spending, expanded budget and Federation Account Allocation Committee (FAAC) outlays.

“I understand some foreign investors in the fixed income market whose investment matured are not rolling over their investment because of low yields in the domestic market. So they are repatriating their funds. You must also note that yields in the fixed income securities in the advanced economy are going up,” Ayodele Akinwunmi, head of research, FSDH Merchant Bank Limited, said.

The 10-year U.S. Treasury yield last week rose above 3 percent for the first time since January 2014.

Nigeria’s one year Treasury bill yields (where foreign investors are more active) have declined to 12.4 percent from as high as 20 percent a year ago after the government repaid maturing bills rather than roll them over as it has done in the past.

In his emailed response, Akin-

L-R: Chris Okunowo, first vice president, Institute of Directors (IoD); Ahmed Rufai Mohammed, president/ chairman of governing council, IoD; Stella Okoli, chairman, Emzor Pharmaceutical Limited/chairperson of the occasion, and Ahmed Kuru, managing director/CEO, Asset Management Corporation of Nigeria (AMCON)/ guest speaker, during the IoD 2018 Fellows’ Luncheon in Lagos.

wunmi, added, “If the trend continues and the country needs the funds of the foreign investors, the economic manager may have to decide to influence the yields to make it attractive for the foreign investors.”

If the naira continues to selloff, the implication according to Chukwu is that the external reserves would be pressured.

External reserves which have been growing since last year recorded the first marginal decline in May 11, 2018 to $47.84 billion from the peak of $47.865 billion as of May 10, 2018.

It stood at $47.75 as of last week May 21, data from the CBN show.

Chukwu also said it would have adverse effect on inflation and fixed income yields would reverse upward.

Inflation rate has moderated for 15 consecutive months – from a high of 18.72 percent in January 2017 to a two -year low of 12.48 percent in April 2018, according to data from the National Bureau of Statistics (NBS).

However, the Central Bank has been intervening at the foreign exchange market to boost liquidity.

The Apex bank Wednesday

injected the sum of $210 million, to meet customers’ requests in various segments of the foreign exchange market. This was after it intervened to the tune of $293 million to cater for requests in the retail segment of the forex market on Friday, May 18, 2018.

In a move that would hopefully create more foreign exchange liquidity in the market and uplift the Naira, the Central Bank of Nigeria has mandated all Bureau De Change operators to access forex from its windows at lest three times a week.

Any BDC that fails this directive would face sanctions, and risks losing its operating licence, according to the new order which also targets to clampdown on fx hoarding.

“All BDCs shall henceforth access forex from the CBN on Mondays, Wednesdays and Fridays. It is compulsory that all BDCs access forex at least three times weekly,” the CBN said in a mailed statement at the weekend, insisting that Compliance is Compulsory.

“Any BDC that fails to access the forex window at least three times weekly shall have its licence reviewed by the CBN,” it added.

In the new directive, the CBN also mandated commercial lenders to henceforth, sell forex to travelers across the counter as long as they present valid documents that prove their eligibility.

The directive comes four days after CBN warned banks against refusing to sell the Business Travel Allowance (BTA) and Personal Travel Allowance (PTA) to customers, and also for pilgrimage.

The CBN said its actions were based on reliable information, and had asked intending pilgrims and othercustomersthatfaceddifficulties from their banks to secure BTA/PTA to report to it with immediate effect.

“All Deposit Money Banks (DMBs) are mandated to buy and sell foreign exchange to travelers (both customers and non-customers) upon presentation of relevant, valid travel documents such as visa and ticket OVER THE COUNTER,” the CBN further noted in the new statement signed by Isaac Okoroafor, its acting Director, Corporate Communications.

“All travelers shall be attended to immediately at the banks’ counters. Any contravention shall be sanctioned by the CBN.”

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6 BUSINESS DAY NEWS

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Low purchasing power, living standards pose fresh challenges for retail market CBN to extend seeking concessions and other notes that the few enquires that at Broll, notes that in spite of the metres - 200 square metres is e-payment services CHUKA UROKO considerations, including down- happened in the first quarter of challenges, the first quarter of the around $60 per square metre per 2018 were driven by the fashion year recorded new entrants to the month. The more established ward review of rents. across Africa he retail market in and better performing malls Evidently, the retail is still and accessories retail sub-catHOPE MOSES-ASHIKE

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entral Bank of Nigeria (CBN) will continue to partner payment system operators in delivering exceptional electronic payments services that will further extend beyond the Nigerian borders and spread more vigorously across Africa.

Adebayo Adelabu, deputy governor, operations, CBN, said this in a keynote speech delivered at the e-payments incentive scheme efficiency award in Lagos.

He said channelling of payment through the e-payment led to efficiency of allocation of resources, especially in an emerging market.

This, he said, often times leads to increased consumption, more consumption leads to more production and by extension improved employment level and enhance standard of living.

According to Adelabu, the payments system has been a harbinger of hope for the Nigerian economy as operators in the payments system have been attracting foreign direct investment, notwithstanding the challenges.

“You deserve to be celebrated considering that you daily brave the odds of infrastructural limitations, increasing and worrying cyber security challenges, mounting need for sensitisation of Nigerians to accept e-payments and regulatory requirements,” Adelabu told payment system operators.

“We have seen the growth in volume and value but I believe we are still scratching the surface, as the potential growth in the payment ecosystem is heaps,” he said.

Betty Akeredolu gets international award on breast cancer advocacy

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ife of Ondo State g o v e r n o r, B e t t y Anyanwu Akeredolu, has just been given a high level recognition award on her untiring effort at raising the bar of awareness over the breast cancer challenge among the women of the state, and Nigeria, in the ongoing Global Health Catalyst (GHC) summit at Harvard Medical School, Boston, USA. The GHC is a premier yearly event designed to catalyse high impact international collaboration to eliminate global health disparities, with main on cancer and related diseases.

It will be recalled that Betty Akeredolu has recorded giant stride in the past years on the global challenge of breast cancer and the need to make our women realise the fact that the breast cancer ailment is not a death knell if women talk about it collectively, and patients of such ailment resolve not to die silently.

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Nigeria is set to remain challenging, and this goes beyond the economic recession that reflected some fragile aspects of the market and showcased structural issues with the economy.

Purchasing power and living standards, which are major drivers of retail market growth, are still below expected levels in the country, placing increased pressure on the market.

The implication of this is that both landlords and retailers have tighter rope to walk, and this is going to affect mall expansion and further growth of the market.

Already, landlords are under immense pressure from tenants

smarting from the economic recession, which impacted market fundamentals that have direct bearing on its growth, including household income and consumer purchasing power that were badly eroded; high exchange rate that impeded imports, low tenant pool, which led to high vacancy rates at the malls.

Unlike the office space segment of the market, the level of enquiries in the retail market has remained relatively constant on the backdrop of lingering sentiments about market conditions with some retailers remaining on the sidelines until the market recovers fully.

A new report by Broll Nigeria

egories. On average, enquiries fell in the 50 square metres – 60 square metres size range.

While concluded transactions were evident in the food and beverage as well as the fashion sub-categories, these transactions ranged from 20 square metres – 150 square metres, with the food and beverage category recording the larger end of the size take-up.

These are strong indications that retailers now favour small size spaces, meaning that both existing and intending investors that have to more creative and innovative and need to rethink their project size.

Nnenna Alintah, a researcher

market, including international food brands such as Krispry Kreme and Pinkberry under the franchise model, adding however that the fashion sub-category is predominantly driven by local fashion retailers as international brands are yet to revive their interest in the Nigerian retail market.

In the core markets where the likes of The Palms, Ikeja City Mall, Novare Lekki Mall, Circle Mall, etc, are found, very large spaces are difficult to let as retailer-sentiments are still recovering and this has continued to cripple the ability of some landlords to drive up occupancy levels within their malls.

According to the Broll report, average asking rent for 100 square

have maintained high asking rents ranging between $80 per square metre per month - $90 per square metre per month whilst malls delivered relatively recently attract lower average asking rents ranging between $40 per square metre per month - $60 per square metre per month. Vacancy levels have been recorded at approximately 16 percent.

But expectation is that the Central Bank of Nigeria’s (CBN) efforts to maintain the value of the naira through an increase in the foreign exchange reserve level as well as liquidity in the foreign exchange market could have a positive impact on retailer’s decisions.

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8 BUSINESS DAY NEWS Lagos to maintain slashed LUC rates … assembly works to give legal teeth to rates JOSHUA BASSEY

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t is not likely that Lagos State government will further review downwards the rate applicable to commercial property in its 2018 Land Use Charge (LUC) law.

The LUC is a consolidation of ground rent, tenement rate, and neighbourhood improvement levy. Thus, the tenement rates law, the land-based rates law, the neighbourhood improvement charge and all other similar property rates or charges, laws or amendments to any such property laws cease to apply to any property in the state as from February 2018.

A source, which craved anonymity, told BusinessDay that the state government was not considering a further reduction in the LUC rates after it was forced to slash the original rates, but waiting for the Lagos State House of Assembly to give legal teeth to the already reviewed rates.

“The LUC and the rates applicable to commercial property or any other property mentioned in the law is not meant to serve the government. Rather, it is a law that the

state government believes will enable it serve Lagosians better by building the necessary infrastructure “The House of Assembly is working on it. It is taking a little longer because the House had to go on recess after the public hearing in March. We should just wait to see the outcome,” a source said at the State House of Assembly on Friday.

The original rates charge on property based on current market value of eligible property were as follows: owneroccupied residential property, 0.076 percent; industrial premises of manufacturing concerns, 0.256 percent, while commercial property attracted 0.76 percent.

The state government had reduced the rate chargeable on commercial property in its controversial LUC by 50 percent, and also reviewed downward other rates as they affect owner-occupied/tenant and purely residential property as well as granted general and specific reliefs.

The downward review, which followed weeks of sustained agitations by various groups, were as follows: Commercial property, 50 percent; Owner-occupied/tenant, 25 percent; purely residential

15 percent; general relief, 40 percent; persons above 70, 10 percent; People Living With Disability (PLWD) as well as property above 25 years, 10 percent.

Akinyemi Ashade, the commissioner for finance, announced the reduction, saying it was a fallout from widespread dialogue with stakeholders, such as the organised private sector (OPS), the Nigeria Bar Association (NBA), real estate investors and developers, landlords and residents’ associations, community development associations, civil society organisations (CSOs), Lagos Chamber of Commerce and Industries (LCCI), Nigeria Institute of Estate Surveyors and Valuers, and professional groups.

Amid rising tension still, the state House of Assembly subsequently organised a public hearing on the LUC on March 27. But the Ikeja branch of the NBA led by Adesina Ogunlana and their civil society allies, Joint Action Forum (JAF) led by Abiodun Aremu, walked out of the public hearing and insisted on total reversal of the law.

The group vowed to continue protests in the streets until the government cancel the LUC.

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Keystone Bank on upward trajectory, declares strong Q1 financial result

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fter many years in the doldrums and following its most recent acquisition by Sigma Golf - Riverbank consortium, the moves by the new management team at Keystone Bank Limited has begun yielding fruits.

The bank for the quarter ended March 2018 recorded a profit before tax of N3.72 billion, compared with a loss of N2.79 billion over the same period in 2017. Deposit grew 42% or N84 billion to N283 billion at the end of the quarter March 2018.

The bank recently posted its first quarter financial results that indicate tangible profits in just eight months of taking over the helm of affairs after many years of struggling to stay afloat.

Recall that following the successful completion of AMCON’s divestment from the bank, a five-man transitional board was set up to oversee its re-positioning for growth and competitiveness. The transitional arrangement was successfully concluded on August 15, 2017 with the assumption of office of the substantive MD/CEO. In less than one year, the bank has experienced tremendous transformation in all ramifications. Aside revamping all its branches across the country and bolstering its workforce, it has invested

substantially in technology and developed fully integrated service models that enable customers access banking services through a wide range of channels. The Keystone mobile banking application boasts of several unique features such as the ability to bank with zero data, the Oxygen Chat Banking and several others that have re positioned the bank to competeeffectivelyinthesector.

Speaking on the development, the group managing director/CEO of Keystone Bank, Obeahon Ohiwerei, said, “This

achievement is a testament to the hard work and resilience of the management and staff of the bank. From inception it has been our vision to restore the confidence of all our stakeholders with tangible results and we are indeed pleased with this start.”

Ohiwerei stressed that this was only the beginning of greater things to come, noting that the team was set to double its efforts in meeting and surpassing the expectations of its customers. “It was not an easy journey,” he said

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Monday 28 May 2018

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

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s confirmation that reading Nigerian newspaper is not to be recommended to the faint –hearted (or those who are afflicted with heart condition), it was Olusegun Adeniyi, Chairman of the Editorial Board of “ThisDay” newspaper who tasered us with his chilling account of the security situation in the country: “Beyond the banditry in Zamfara”: “While the security challenge is national, the gravity of the northern situation was brought to the fore in 2014 by respected retired federal permanent secretary, Dr. Hakeem Baba Ahmed, who is currently the Chief of Staff to the Senate President. While lamenting how rustlers carted away his herds, he also painted a pathetic picture of the security situation in many of the northern states: “For almost 400 square kilometres, from Abuja to Kaduna, Zaria and Birnin Gwari, there is hardly any farm with cattle [left]. It is the same in most parts of Katsina and

Zamfara states. The backbone of the northern economy is farming and husbandry. Not anymore. We cannot keep cattle on our farms.

Large scale farming is becoming less and less attractive. A huge swathe of the north is now bandit territory…

However, that the problem is not restricted to Zamfara can be glimpsed from what is happening in Kaduna State. When in February 2014, the Emir of Birnin Gwari spoke about criminality in his domain and the activities of cattle rustlers, he said: “They are in control of one village called Jan Birni.

You can’t go there now if you are not a thief. If they don’t know you, they may kill you. These rustlers don’t care whether you put fire on your cattle, they will whisk them away. If your cattle are branded, they will slaughter them, cut them up and sell them in pieces. If you go to Birnin Gwari-Funtua axis, they are gradually taking over all villages and towns along the roads.

They come out on market days and brandish their weapons without a care…”

Right on cue, the Vice-President, Professor Yemi Osinbajo SAN, was on his feet – to fault Nigeria’s recent rating by Transparency International’s Corruption Perception Index: “Under President Muhammadu Buhari GCFR, we have focused on fighting grand corruption I think that by even Transparency International’s own assessment, Transparency International

“We must have a deeper and much wider way of dealing with corruption.

How are you going to do that? You must have an efficient way of doing that; like automation, removing discretion from individuals,” uses nine different indexes to come to a conclusion.

In four out of those indexes, Nigeria moved up, in another four Nigeria stabilized & dropped in only one index. So in aggregation, it (T.I) then decides that it has fallen in certain number of points below where we were.

I think the important thing to bear in mind about Nigeria’s anti-corruption fight is that the government has done what it ought to do by focusing on grand corruption.

Grand corruption is the type we experienced years before when, for example, $15 billion was lost in a defence contract. Two, three weeks to election, N100 billion in cash was taken out, and again $293 million in cash, two to three weeks to the election.

That’s the kind of impunity; and of course you are also familiar with the scam that went on in the NNPC at the time; the so called statutory

contracts, that’s grand corruption.

That is the corruption that crippled the economy of the country.

Let me tell you very quickly how you can recognize that we have scaled a good deal on grand corruption today: despite the fact that we are earning 60 percent less in revenue, we are actually able to spend more than ever before in the history of this country on infrastructure.

In 2017, we spent about N1.3 trillion on capital. That’s the highest in the history of the country. So, we are able to do far more with far less because we have controlled the impunity that went on, the grand corruption, and all of that.

But then, you cannot address the corruption as you go through our airports, our ports or as you go through government offices, in many cases. That’s where the whole perception emerges.

We must have a deeper and much wider way of dealing with corruption. How are you going to do that? You must have an efficient way of doing that; like automation, removing discretion from individuals,” Asked what the institutionalized process of fighting corruption was, Osinbajo responded: “Institutionalization is not a oneoff thing, it’s a process, and we are dealing with that, that’s exactly what we are doing.

For example, the TSA and being able to look at government accounts and all of that is one way of institutionalizing a process by which you

can be sure of what people are doing, how this things are happening.

The process of allowing the EFCC to do its work without dictation, saying that ‘look, this is what the EFCC is doing’, and giving them every support that you can. These are ways of institutionalizing. And it is that same process that we are taking in the public service - automation.

For example, look at all that we have done in the ease of doing business. The whole point of doing that is institutionalizing processes, so that when you come into Nigeria you can get your visa after applying online; so that Customs don’t have to sit around the airport, that is why we are putting in the I-check and we are putting all sorts of other processes. That is to institutionalize; it’s not a one-off process.”

On the national strategy for anti-corruption war, he said: “The national strategy is to ensure that public officers in particular are not able to privatize public finances.

And how do we intend to achieve that? We intend to achieve that by ensuring that there is consequence for corruption and also by automating processes, removing discretion from individuals because if you don’t remove discretion from individuals the individuals can have discretion as to whether or not they will grant certain approvals through certain processes; then you continue to encourage corruption at one level or the other.”

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Korea (South): Turn on the lights!

GREGORY KRONSTEN Gregory Kronsten Head, Macroeconomic & Fixed Income Research FBNQuest

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e attended the annual meetings of the African Development Bank (AfDB) in Busan (South Korea) last week, and can report a strong Nigeria presence. In addition to the current officials required to be present, we had a former finance minister, a former CBN governor, a former director-general of the Securities and Exchange Commission and the managing director of the Africa Finance Corporation as well as the AfDB president.

The location moved from Ahmedabad (India) the previous year. The distance from the home base has an impact on attendance: perhaps not the overall numbers but we noticed a lower turnout among ratings agencies, international bank economists, due diligence firms, Africa journalists, think tanks and general

Africa watchers. We understand that the meetings will be held next year in Africa, probably at the AfDB’s headquarters in Abidjan.

On the positive side, the location enabled us all to see a little of another Asian success story, and hear how it has been achieved from Korean officials and business people. The theme of the meetings was Accelerating Africa’s Industrialization, and perhaps the most revealing session was entitled Pathways to Industrialization.

As the centrepiece, we heard a passionate account of the Korean miracle from Sung-SooEun, the chairman and president of Korea’s Eximbank. The country has no natural resources and, he might have added, limited land suitable for agriculture.

(Most of it is covered by forestry.) The determination of its people to lift themselves out of poverty and create a better life for their families has driven the transformation. Eun was asked by the mediator to confirm the story that Korean schoolchildren generally study until 10pm, and replied that he had put his books down each day closer to 11.30pm.

The hard work of individuals has been complemented by the

leadership and planning of government, and the participation of enterprises. In an earlier session, senior officials responsible for the Korean railways and urban development reeled off statistics showing the rapid expansion and core role of planning in their sectors. They also acknowledged the fiscal constraints. It was not a case of spending billions on flash infrastructure at the outset of industrialization. The initial focus was on railways and roads, and the impressive housing development only really kicked in once the domestic resources were available and manufacturing had entered its second phase (heavy industry, chemicals and shipbuilding) in the 1980s.

The miracle has created the tenth largest economy in the world in less than 70 years since the end of a highly destructive war in 1953.

Its population is little more than 50 million. South Korea was invited to join the OECD as long ago as 1995, and is one of only two countries to have made the transition from low-income economy to membership of the organization. Nor has the success story ended since the country is a world leader in aspects of construction, engineering and urban development. The planning may have been central but not in the socialist sense. Our favourite slide

of the meetings(for its punchiness and unashamed triumphalism) showed the Korean peninsula at night: the north in darkness and the south brightly lit.

Following Eun’s presentation, Egypt’s director at the AfDB and the economy minister from a francophone country broadly endorsed the vision, while indicating that its replication in Africa would be challenging. The director argued that the priority was not the building of world-class infrastructure: rather the focus should be hard work, discipline and good governance across society, competent management in the public sector, the education of children and jobs.

Africa’s route to industrialization should initially be via the acquisition of the relevant skills and not the purchase of machinery.

Unemployment rates are generally high in Africa, the director said, and yet business owners complain that they cannot find the workers with the appropriate training. Additionally, he noted that societies are fractured, and that elitesretreatat night to rich ghettos to insulate themselves from their compatriots.

The economy minister’s view was similar. He called for good leadership in government, and bemoaned the shortage of entre-

preneurs. The work ethic is often poor, and he observed caustically that the preoccupation of many young people is to acquire a mobile phone with 5G. His government had been able to push up education spending to 5%-7% of the total budget although this was still inadequate. His country (Cameroon) had one necessary element of industrialization, hydro-power capacity, which it is developing with South Korean support.

In the Q&A session at the end of the discussion, the central bank governor from Mozambique asked howthe external conditions to replicate the South Korean (or the Chinese) success story had changed in the past 50 years. Eun acknowledged that the transformation of South Korea coincided with the opening up of world trade to newcomers, and that barriers and regulations had since multiplied. We might add that East Asia benefited from a first mover advantage, being far ahead of the rest of the developing world.

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

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Cross River’s N1.3 trillion budget of ‘magic’ expectations

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t initially began like a joke when news first filtered in that the Cross River State Government was planning a N1.3 trillion expenditure plan for 2018. That joke took shape when the governor went ahead to present the budget to the Cross River State House of Assembly on November 30. Ben Ayade, the governor of the state, who personally presented the budget, called it a ‘Budget of Kinetic Crystallization” which he said was designed to ‘add value to the socio-economic development and well-being of the people of the state.”

So what looked like a joke became real when the budget ‘surprisingly’ went through the scrutiny of the State House of Assembly and was passed into law on 14 February. Ayade is reported in the media to have broken down in tears while signing the N1.3 trillion budget into law on April 11.

Amidst sobs, he was quoted to have said that ‘In the 21st century, you don’t look before you leap, you leap before you look.’ This statement is a recipe for suicide and aptly captures what the governor has done.

Interestingly the 2018 ‘suicide’ budget is not anywhere in the public domain. I checked the state’s website (http://www.crossriverstate.gov.ng), hoping I could get a breakdown of the budget but it is not there. There is a table of contents of the 2018 budget on the website, but there is no link to the actual budget.

So what we have is a bulk sum with little or no understanding of the specific components of this bulk sum. But some key projects that the government is said to have made provision for in the budget include an ongoing deep seaport project and Ayade’s dream super highway project. These are two big dreams of his administration which he seeks to complete.

The estimated total budget for the deep seaport has been put at about N500 billion, while the Superhighway project is estimated at about N250 billion. Both projects, if they were included in the budget, may have caused the total expenditure to hit new highs.

But then, the state’s total budget for 2017 was just N301 billion. This means that the 2018 expenditure is four times higher. So what makes the governor think that he could suddenly raise his expenditure by 400 percent within a year?

Figures from BudgIT’s 2018 “States of the States” report show that the state is already struggling with its finances. Net allocation from the Federation Account for the whole of 2017 was just N23.45 billion. Net allocations represent total allocations made to the state, less deduction for debts and other obligations. A total of N18.5 billion

Chances of funding the N1.0 trillion funding with external borrowing are nil. The state will need the approval of the National Assembly to do that and there is no chance that the country will want to guarantee a trillion loan (US$3.2 billion) loan for just one state in the federation was made as deduction from the state’s allocation in 2017 towards payment of outstanding debts.

Cross Rivers ranks high as one of the most indebted states in the country already. Total external debt stood at approximately US$168 million as at December 2017 while domestic debt as at the same date, stood at N128 billion. This brings the total internal and external debt of the state to N179 billion (using official exchange rate of US$1/305 to convert the foreign debt to local debt). If the state were to use its combined internally generated revenues, estimated at N14 billion in 2017, and its FAAC allocations to service its current existing debts, it would take the state about five years to repay its debts.

Considering how poor the state’s finances are, it is not clear how the government managed to fund its N301 billion 2017 budget. There is no budget performance report on

the state’s website. It is even more difficult to see how the governor plans to fund the 2018 budget of N1.3 trillion. Certainly, the state does not have the internally generated revenues to fund the budget, neither would the receipts from the Federation Account be enough to fund the budget.

The alternative is for the state to go borrowing to fund the budget.

But the gap between the states revenue generating capacity and planned expenditure is so wide that the state will need to borrow about a trillion naira to bridge that gap. In the domestic financial markets, only the Federal Government has the capacity to do that kind of borrowing in any particular year.

Lagos state comes close because of its comparably higher internal revenue generating capacity of about N400 billion per annum, compared to the N14 billion in Cross Rivers. No other state in the federation has the capacity to raise a trillion naira from the domestic capital markets. Cross Rivers State, based on current financial capacity, is one of the states with the least capacity to raise that kind of money.

Chances of funding the N1.0 trillion funding with external borrowing are nil. The state will need the approval of the National Assembly to do that and there is no chance that the country will want to guarantee a trillion loan (US$3.2 billion) loan for just one state in the federation.

Grants from external bodies could also help the state bridge the funding gap. But external governments do not give grants for such

projects in such amounts in a single year. Sadly, the state has not put the 2018 expenditure plan in the public domain. That could have provided some clues on how the governor plans to fund it. For now, the N1.3 trillion is just worth the paper it was written on and nothing more. It is clearly a budget that the state has no capacity to fund.

There is no harm in having big ideas. But they must be rooted in reality, or else they start looking like hallucinations. The governor’s big ideas of a deep seaport and a super highway can be funded through the private sector. But the private sector will only fund such projects if they are commercially viable. There are question marks on the commercial viability of both projects, perhaps the reason the governor is thinking of funding them with public funds.

But considering the strong tourism potential of Cross Rivers, one would have thought the governor would concentrate on enhancing low hanging fruits like the Obudu Cattle Ranch and many of the state’s tourism sites, which some years ago, were fast becoming the choice destination for both internal and external tourism. Many of the state’s tourist sites are fast losing their attraction, sadly because of government negligence.

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

Financial literacy and the audit committee

BISI ADEYEMI Bisi Adeyemi is the Managing Director of DCSL Corporate Services Limited. For comments and reactions, kindly contact badeyemi@dcsl.com.ng.

“The battle for financial statement integrity and reliability depends on balancing the pressures of multiple stakeholders, including management, regulators, investors and the public interest” American Institute of CPAs. he Audit Committee is widely recognized as an important mechanism required to ensure good corporate governance. Section 359 (3) & (4) of the Companies and Allied Matters Act provides that every public company shall have an Audit Committee and the Committee shall consist of an equal number of Directors and representatives of the shareholders of the company (subject to a maximum number of six members). The Committee “shall examine the External Auditor’s report on the Financial Statements and make recommendations thereon to the annual general meeting as it may think fit”.

In addition to its statutory func-

T

tions, the Securities and Exchange Commission (SEC) Code of Corporate Governance provides that the Audit Committee shall assist in the oversight of the integrity of the company’s financial statements, compliance with legal and other regulatory requirements, assess the qualifications and independence of the external auditor and assess the performance of the company’s internal audit function. In addition, the Audit Committee is expected to ensure adequate prevention, detection and reporting mechanism for fraud risks across the company; consider related Party transactions and report regularly to the Board on matters within its purview. The Committee is also expected to discuss the annual audited financial statements and half yearly unaudited statements with management and external auditors.

The definition of financial literacy is vague as Article 30.2 of the Securities & Exchange Commission Code simply states that members of the Committee should have basic financial literacy and should be able to read financial statements.

It is unclear whether the ability to read and understand financial statements suffices as financial literacy or whether some additional expertise in this area is required. The Canadian Securities Administrators’ National Instrument 52-110 states that it is not necessary for a member of the Audit Committee to have a comprehensive knowledge

of accounting and auditing standards to be considered financially literate.

To provide more clarity and, in accordance with Sections 8(2), 30 and 53(2) of the Financial Reporting Council Act No. 6 2011 (FRC Act), the FRC had issued a Rule with respect to the assurance opinion expressed by professionals engaged in the financial reporting process relating to financial statements, accounts, financial reports, returns and other documents of a financial nature. The Rule defines a professional for this purpose “as any person whose judgement can be relied upon due to his education or training, and who possesses certification issued by a recognised professional body or association and is currently working or wishing to work in Nigeria”. It further provides that “any person attesting, as Chairman of the Audit Committee, to annual report[s], financial statements, accounts, financial report, returns and other documents of a financial nature, shall be a professional member of an accounting body established by Act of National Assembly in Nigeria”.

The Rule finally settled the argument as to the level of “financial literacy” required – at least of the Chairman of the Audit Committee.

Be that as it may, given the significant responsibilities imposed on the Committee by CAMA and the SEC Code, it is clear that all Audit Committee Members need to be able to read and understand financial statements, including the company’s Balance Sheet, Income Statement and Cash Flow Statement. This has become even

more imperative given the adoption of the International Financial Reporting Standards (IFRS) which require more disclosures and more detailed reporting.

To be effective, Audit Committee members are expected to possess the following: • The ability to understand accounting policies, estimates and judgments as enunciated by Management and the External Auditor.

• An understanding of the company’s business and any unique features related to its operations that may impact on the accounting policies.

• A knowledge and understanding of the strategies that have been adopted by the company and the risks inherent in any transformation strategies.

• An ability to understand the entity’s risk environment and appetite.

• Sufficient independent judgment and the ability to ask the right questions. In this regard, the Board representatives on the Committee should be independent non-executive directors.

Committee members must also be prepared to devote enough time and attention to the performance of their duties.

According to Article 30.1 of the SEC Code, it is the responsibility of the Board to ensure that the Committee is constituted in the manner stipulated and is able to discharge its statutory duties and responsibilities effectively. Consequently, the

Board should ensure that members of the Audit Committee continue to receive relevant financial and other training. They should also receive regular updates on the company’s operations typically from the Internal Audit Function and from Management.

Audit Committees play a critical role in the financial reporting process by overseeing and monitoring the integrity of financial reporting.

The Audit Committee is a key organ within the Corporate Governance Framework and is expected to assist the Board of Directors in the discharge of the latter’s oversight responsibility, particularly in relation to financial reporting, integrity, internal control, risk management and corporate standards of behaviour. It is imperative that Committee members possess the relevant skills and have access to the appropriate tools to remain effective.

On Wednesday & Thursday, June 27th & 28th 2018, DCSL Corporate Services Limited will be hosting its 6th Audit Committee Seminar themed “Improving the Performance of the Audit Committee”.

Please contact ntaiwo@dcsl.com. ng for further details.

Bisi Adeyemi is the Managing Director of DCSL Corporate Services Limited. Kindly forward comments and reactions to badeyemi@dcsl.com.ng

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

Bashir Ibrahim Hassan

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

Monday 28 May 2018

Rapes in IDP camps

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he Nigerian chapter of Amnesty International – the global human rights watchdog – last week released a report titled “They betrayed us” where they accused the men of the Nigerian Army and the Joint Task Force (JTF) of raping and killing women displaced by the Boko Haram insurgency.

The organisation said it had proof that thousands of people had been starved to death in the Internally Displaced Persons camps in Borno state since 2015.

“This report is the result of an extensive investigation involving more than 250 interviews and covers satellite camps established by the military in seven towns in Borno state, including Bama, Banki, Rann and Dikwa. It also includes interviews with 48 women and girls released from detention and the review of video, photographic and satellite imagery,” it said.

This report corroborates the report of the Human Rights Watch, another human rights watchdog, released on October 31, 2016, detailing how government officials (camp officials, vigilante groups, policemen and soldiers) systematically raped and sexually

exploited women and girls displaced by the Boko Haram conflict and how the government offers little or no protection to these hapless group and does nothing to stop the abuse not to talk of sanctioning the abusers.

The recent report by Amnesty said “as Nigeria’s military recovered territory from the armed group in 2015, it ordered people living in rural villages to the satellite camps, in some cases indiscriminately killing those who remained in their homes.

Hundreds of thousands of people have fled or were forced from these areas. The military screened everyone arriving to the satellite camps, and in some locations detained most men and boys aged between 14 and 40 as well as women who travelled unaccompanied by their husbands. The detention of so many men has left women to care for their families alone. Scores of women described how soldiers and Civilian JTF members have used force and threats to rape women in satellite camps, including by taking advantage of hunger to coerce women to become their “girlfriends”, which involved being available for sex on an ongoing basis.”

Equally, in 2016, news reports emerged (obviously from foreign media) that thousands of IDPs in over 20 camps around

Maiduguri were starving to death because food and relief materials allocated to the camps are either diverted or stolen by government and or camp officials. In fact, the UK Guardian of Tuesday 13 September, 2016 reported protests by angry camp residents over the stealing of food meant for the residents while they are left to starve to death. The best feeding ration any IDP camp got was once a day. The paper quoted a camp resident thus: “In the night they load up vehicles with food and take it away to their houses...

But I can’t complain. [A local official] said that if I complain he will tell soldiers that I am a member of Boko Haram and they will kill me.”

Meanwhile, Refugee International (RI), in its April 2016 Report titled “Nigeria’s Displaced Women & Girls: Humanitarian Community at Odds, Boko Haram’s Survivors Forsaken”, detailed the gory realities confronting the IDPs under the nose of Nigerian government officials including rape and sexual exploitation of women and girls, who in most cases, have to submit to the demands of the officials, soldiers and policemen for sex to be able to eat and possibly feed their children or family members.

What has been the govern-

ment’s response to all these reports? Denial and cover ups or when the reports are too glaring, the government ignores it.

Last week, it hired protesters to picket the Abuja office of Amnesty International for ostensibly exposing the many atrocities being committed by the Nigerian government and the military in the supposed fight against the Boko Haram insurgency.

But the government cannot continue to deny the obvious.

The living conditions in the camps are a fitting description of Nigerian state; a state that, in reality, views its citizens mainly as nuisance or even adversaries and treats them as such. The government cannot expect citizens to be patriotic when it does not treat them with respect. Citizens will be unwilling to make helpless sacrifices or even give their lives for a state they know does not care so much about them.

It is time the government come to terms with its responsibilities and treat its citizens the way citizens of a civilised country should be treated. Only then can it expect patriotism, dedication and cooperation from its citizens.

To begin with, the government must thoroughly investigate these abuses and punish those found guilty.

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Monday 28 May 2018

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Stopping the next epidemic

Market capture

The Ebola outbreak in Congo can probably be contained If not, it could spread exponentially

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N A dank, unlit room in a government office in Mbandaka, a sleepy city of 1m people on the banks of the Congo river, MarieClaire Thérèse Fwelo is booming out her most valuable knowledge to an assembled group of perhaps 80 health workers. “What do we look for?” she asks the class.

They respond in unison: “a brutal fever”. And what else? “Someone who has been in contact with an Ebola patient?”, pipes up one.

This is the ninth outbreak of Ebola for Ms Fwelo, a 63-year-old Congolese employee of the World Health Organisation (WHO).

As a young nurse she was at the hospital where the fever was first isolated in 1976. Since then she has become an expert on epidemic control. Yet this outbreak is the scariest Ms Fwelo has experienced in her own country. Most previous instances of Ebola in the Democratic Republic of Congo have been in remote towns where the disease burns out fast. This time the virus has spread onto the country’s main artery, the Congo river. A little over 600km downstream is Kinshasa, the capital and Africa’s third biggest

city, home to some 13m people.

Opposite it is Brazzaville, the capital of the Republic of Congo.

“On one boat you can have 1,500 passengers,” she says. Already 27 people have died.

This is the second outbreak in which the disease has reached large cities. The previous time it did so, during an outbreak in west Africa in 2014-15, it spread rapidly, killing more than 11,000 people. Most of those who died were in Guinea, Sierra Leone and Liberia but cases extended to America and Europe, leading

to flight bans. Tourism and local economies collapsed.

Ebola is not, in fact, a particularly contagious disease. It can be transmitted only by direct contact with the bodily fluids of somebody who is suffering symptoms: it does not spread by air, like the common flu. But it is deadly. The outbreak in west Africa killed more than 70% of those infected.

Foreign aid agencies, governments and the WHO hope that they will be able to curb the spread of the disease before it reaches Kinshasa. If they fail, this outbreak could be just as deadly as the one that occurred in west Africa.

There are many reasons for hope. Congo, which has suffered eight previous outbreaks (see map), quickly alerted the WHO when the first cases were confirmed on May 8th in Bikoro, a remote region south of Mbandaka (see article). And the response has certainly come quickly. In Mbandaka, hotels are filled with workers from the WHO, Médecins Sans Frontières (MSF) and other medical organisations. Almost 8,000 doses of an experimental vaccine, first tested in Guinea in 2015, have been delivered to Kinshasa. On May 21st nurses started to vaccinate health-workers, ambulance-drivers, priests and people who have had contact with infected people. That ought to slow the advance of the disease but it does not end the need for the painstaking work of tracing those who may have been exposed to the virus. Such people must be isolated and treated be-

fore they infect others. But unless health workers gain some control over the disease, victims will keep infecting others and the number of cases could grow exponentially.

Yet even gathering data on the number of people infected, let alone isolating them, is exceptionally difficult in Congo, a huge and terrifyingly dysfunctional country, where few people trust the government. “Most of what we know right now is anecdote,” says Christopher Haskew, an epidemiologist with the WHO in Mbandaka.

The WHO thinks that the epidemic originated in Bikoro, and then spread to Mbandaka through two people who attended a funeral of one of the first victims. It has listed more than 600 people who may have been exposed to the known victims. But new cases continue to emerge, which have to be investigated.

Keeping people isolated is also not proving easy. MSF said that between May 20th and 22nd three patients left the isolation ward in Mbandaka—apparently taken away by their relatives at midnight. Two later died.

Some traditional beliefs also make matters worse. In this part of Congo, washing the body is an important part of a funeral; the priestly laying on of hands is also common when people go to traditional healers. Both practices help spread the virus. In Itopo, another village affected, health workers on May 22nd failed to prevent the traditional burial of a confirmed Ebola victim, creating a whole new circle of potential victims to monitor.

“We fear but we do not panic,” says Roger Ikunka, a 65-year-old worker at one of Mbandaka’s many ports. He has heard about Ebola on the radio and knows what to do if a relative gets a fever. Pierre Formenty, the WHO’s top Ebola specialist, argues that “we know how to stop” Ebola.

But he adds a worrying proviso.

“We should not underestimate this virus. When I hear people say we have learned the lessons of the past already, I am even more concerned.”

How kidnapping insurance keeps a lid on ransom inflation Expert negotiators help get victims back safe—and keep costs down for companies

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N THE early 1970s, leftist guerrillas in Argentina discovered a lucrative new way to make money: kidnap millionaires. Panicking firms would agree to huge ransoms, more concerned with freeing their executives than driving down the fee. That was not just bad for businesses. It also became a textbook case of how poor negotiating can send future ransoms rocketing and attract new entrants to the kidnapping trade. In Argentina, this culminated in the payment of an undisclosed ransom in 1975 for the release of Juan Born, followed by a $60m ransom for his brother, Jorge. The latter figure, $275m in today’s money, is the highest ransom known in modern times.

One reason it marked a high point is the spread of kidnapping-and-ransom (K&R) insurance. This is involved in a minority of the $0.5bn-1.5bn thought to be paid out in ransoms each year, but the share is growing. Around threequarters of Fortune 500 companies pay to cover some employees. Insurers reimburse the ransom and, at least as importantly, provide seasoned “crisis management” experts to help with negotiations. The best can get a ransom down to 10% of the initial demand.

They can also calm criminals who may consider harming hostages to induce distraught relatives to pay up. In kidnappings motivated by money, a hostage’s risk of death during negotiations is 9% without K&R insurance, but just 2% with it, according to Anja Shortland, who is writing a book about kidnapping insurance. Kidnappers rarely know if a victim is insured.

Even without blood spilled, kidnappings ruin lives. Victims are often traumatised. A ransom can wreck a family’s finances. Kidnappings also keep companies and charities out of places in need of investment and help. K&R insurance has evolved to lessen these harms. Coverage includes legal liability for companies and counselling for survivors. Many rich families in countries Continues on page 15

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In Association With

Meet the Ministry of Enlightenment

Reformists and traditionalists are at war over Russian schools

Is teaching a “divine calling” to support the state, or is about preparing students for the future?

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HE schoolhouse in Vorsino stands next to the village chapel. Inside, a painting depicts a teacher standing and reading to pupils who sit obediently in rows.

Yet in one classroom a different scene unfolds. Ogabek Masharipov, a 23-year-old with Teach for Russia, a programme that sends young college graduates to teach in rural schools, banters with pupils and begins his lesson with an interactive exercise. He laments the ageing equipment and lack of space for pupils to gather outside class in the Soviet-era building, but revels in having taught them to assemble solar-powered toy cars out of parts of old PCs. Before he came, computer classes mostly involved paper exercise books.

Vorsino offers a snapshot of the country’s schools. Russia has a strong crop of teachers, as well as a talented and welleducated population. Over 55% of working-age adults have degrees. Student performance in international tests has been rising steadily; Russia now scores around the average for OECD countries. Yet years of under-financing—the government spends just 3.6% of GDP on education—and an archaic curriculum have left the system struggling to prepare children for the modern world. And as Vladimir Putin enters his fourth term promising to turn his attention to domestic issues, education has become an ideo-

logical battleground.

The struggle over schools breaks down into two main camps, traditionalists who favour teacher-centric direct instruction and progressives who favour student-centred experiential instruction. This divide is both long-running and global, but has particular resonance in Russia. As Igor Remorenko, a former deputy minister of education, explains, Russia’s traditionalists trace back to parochial church schools with their emphasis on sacred texts, while progressives carry on the spirit of early 20th-century Russian pioneers who preached learning by doing. The pedagogical divide mirrors a political one between conservative statists and liberal technocrats. Where the former see the main function of schools as vospitanie, a concept that means upbringing or character formation, the latter focus on obuchenie (teaching).

Education policy has taken a more conservative turn with the appointment in 2016 of Olga Vasilieva as minister of education and science. Ms Vasilieva, a historian specialising in the Russian Orthodox church, presents herself as an unabashed reactionary.

“I’m for the return to the best traditions of the Soviet school,” she said. “Everything new is something old that has been forgotten.” Some of her early

initiatives included a call to revive vocational training, and to study the classics. “Words such as mop, hammer and jack plane are falling out of use,” she complained. She describes teaching as a divine calling, and has emphasised the creation of a “unified educational space”, by which she means a common curriculum, as a matter of “national security”.

The liberal camp in education, an influential network of experts at places like Moscow’s Higher School of Economics (HSE), sees the current school curriculum as unsuited to modern life. These would-be reformers call for flexible personalised education, project-based learning and an emphasis on building skills and competencies, rather than rote learning. “I’m also sad that kids now don’t know ‘Eugene Onegin’ by heart, but I understand those aren’t the skills of the future,” says Isak Froumin, director of HSE’s Institute of Education.

Reformers frame their arguments in terms of human capital. Though Russia ranks fourth in the world in terms of formal educational attainment, according to the World Economic Forum’s Global Human Capital report, it comes 42nd in terms of applied skills. “In some places, our girls still learn sewing,” says Mr Froumin. “In China they’re studying AI.” Neither group has won yet.

Mr Putin’s new national devel-

opment strategy, issued shortly after his re-inauguration this month, calls both for making Russia’s schools globally competitive and for promoting vospitanie on the basis of “spiritual and moral values”, a nod to traditionalists. To this end, the Ministry of Education and Science will be split into two ministries, one for higher education and science and another for primary and secondary education.

The former will be charged with fostering innovation, while the latter will be run by Ms Vasilieva and renamed the Ministry of Enlightenment, a reprise of a Soviet and tsarist name indicating a focus on vospitanie of the state-approved sort.

The modernisers are not twiddling their thumbs. A glimpse of the future can be found at Khoroshkola, a new school in north-west Moscow.

Large open spaces and mobile desks encourage collaboration; new microscopes and MacBooks emphasise technology.

Although such schools will educate relatively few of Russia’s children, liberals see them as testing-grounds for new educational methods. Elena BulinaSokolova, Khoroshkola’s director, speaks of building a system with the pupil at the centre. For those who are motivated, such independence is a boon. Nikolai, a teenager, gushes about the chance to work on projects and make choices on his own: “You feel a bit of freedom.”

How kidnapping insurance keeps a lid on ransom...

Continued from page 14

such as Nigeria and the Philippines also take out coverage. However, employees with K&R insurance are forbidden from finding out they have it, for fear of encouraging more kidnapping if word gets out. Insurance is usually invalidated if its existence is confirmed.

Raw deals and ordeals On a sunny day in Mexico City, Carlos Seoane of Seoane Consulting Group, a crisis-management firm, recalls how his hands shook the first time he listened in on a negotiation as a trainee. Some 116 kidnappings later, that no longer happens, he says: “Now I am made of ice.” Mexico’s kidnappers once targeted the ultra-rich. In recent years the trade has “democratised” to strike the middle class too, he says.

Kidnappers may search for victims on dating platforms, asking questions that reveal whether they have any money. Mr Seoane recalls a case where kidnappers turned up at a pig farm and asked to buy 20 pigs. A man identified himself as the owner of the swine, and was immediately grabbed. Random kidnappings on impulse have become more common. So have “express” kidnappings, where the victim is whisked to a cash machine to withdraw money, and “virtual” ones, where people are tricked into thinking a relative has been nabbed.

As is usual for crisis-management firms, Mr Seoane’s works exclusively with a single insurance provider.

Insured negotiations are almost always carried out by family members, with calls recorded and trained negotiators giving advice. In countries where kidnaps are common, the police are seldom involved. Kidnappers expect to receive a lower ransom than they originally demand. If a family agrees on a price too soon, most kidnappers sense the chance to up their demand.

Paying more money does not make the hostage safer, says Mr Seoane.

If negotiators are not careful, they risk sending ransoms spiralling, as in Argentina. In many countries the media refrain from publishing information about the size of ransoms for fear of attracting more criminals to the business.

The average ransom paid to free ships captured by Somali pirates doubled between 2009 and 2011. Paying out generous ransoms hits everyone in the insurance industry, and those they cover. It may lead insurers to attach conditions to coverage, such as employers imposing a curfew or a requirement to hire private security.

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Losing the peace

America’s strategy against Islamic State is storing up trouble Ethnic tension in eastern Syria is increasing, to the delight of the jihadists

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S THE territory held by Islamic State (IS) shrivelled in Syria, American generals spoke of “stabilisation” and “consolidation”. But seven months after an American-led coalition drove the jihadists from Raqqa, their putative capital, “stable” is not how residents describe the city. Mines, booby-traps and bombs continue to kill and maim. Bodies are still being pulled from the rubble. The lights are off and there is no running water. “The Americans have given us nothing,” said Omar Alloush, a member of the city council, weeks before he was shot and killed in his apartment by unidentified gunmen.

The goodwill that first greeted the coalition is fading as popular anger mounts, especially in the Arab heartlands south of Raqqa, along the Euphrates river. The Syrian Democratic Forces (SDF), a Kurdish-led militia that America relies on to fight IS, are increasingly viewed as occupiers. Tribal leaders in the eastern province of Deir ezZor mutter openly about taking up arms to drive the Kurds from Arab lands. Some fear the jihadists will

try to exploit the situation. They are already creeping back into lost territory.

Ethnic tension in Syria’s east dates back decades, a legacy of the divide-and-rule tactics used by President Bashar al-Assad and his father before him in the country’s hinterlands. America’s decision to rely on the military wing of the Kurdish Democratic Union Party (PYD) to lead the SDF has deepened those divisions. Arab rebel forces, which also received Ameri-

can backing, had to watch from the sidelines as the SDF marched into Arab towns. “We met in secret with the Americans in Turkey, but they told us we were too disorganised and couldn’t raise enough men,” said Abu Omar, an Arab rebel commander. “They were worried we might fight the [Assad] regime after IS.” The Kurds have done little to win over Arabs in the areas freed from IS. They favour their own for contracts and have alienated

conservative Arabs with their relatively liberal ideology. Even Arab fighters in the SDF are viewed with suspicion by locals, who consider them Kurdish puppets or brigands.

Many fear the Kurds will hand the territory to the regime as part of a deal that would allow the PYD to keep control over other parts of the country. “The hatred of this new Kurdish dictatorship grows bigger day by day,” says a human-rights activist from Deir ez-Zor. IS, which claims to defend Sun-

ni Muslims from non-believers, has a knack for exploiting such grievances. The jihadists were recently pushed out of the suburbs of Damascus, giving the regime full control of the capital for the first time since 2012. But hundreds of jihadists are hiding out in the east, where they slip into SDF-controlled areas to carry out attacks, assassinations and kidnappings. America paused the ground offensive against IS in March and April, as hundreds of Kurdish fighters moved to the frontlines against Turkey in Afrin. The jihadists took advantage, seizing towns and oilfields. IS still makes at least $180,000 per day from selling oil, say industry sources.

The offensive restarted on May 1st. America’s generals and diplomats are confident of reclaiming the area still held by IS. But they worry about losing the peace.

President Donald Trump has frozen $200m in aid for activities such as de-mining, clearing rubble and repairing the water and electricity systems in Syria. He wants to withdraw American troops “very soon”. Eastern Syria is unlikely to be stable by then.

American justice

Trump demands that those investigating him be investigated He has got his wish, averting an immediate crisis

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VEN from a man as indifferent to political norms as President Donald Trump, the tweet on the afternoon of May 20th was alarming. At the end of a string of messages complaining about a “witch hunt” against him, Mr Trump demanded: “that the Department of Justice look into whether or not the FBI/DOJ infiltrated or surveilled” his campaign at the behest of the previous administration.

It was no mere taunt. Mr Trump was referring to an investigation that eventually turned into a wideranging inquiry by Robert Mueller into Russian meddling in the 2016 election and possible links between Russia and the Trump campaign. In effect, the president was using the power of his office to demand that those investigating him and his associates be investigated. He did not so much broach as blow up a long-standing norm that presidents do not direct or involve themselves in specific criminal investigations.

Although an American intelligence source met three of Mr Trump’s advisers, there is no evidence that the FBI or the Department of Justice planted a permanent source inside his campaign team. Indeed, in July 2016, shortly after Mr Trump became the Republican nominee, senior FBI officials warned him

that foreign adversaries including Russia would try to infiltrate, or at least spy on, his campaign. By that time Russians had already made contact with several members of the campaign.

Mr Trump’s Twitter threat quickly produced a result. Rod Rosenstein, the deputy attorneygeneral—who is overseeing Mr Mueller’s investigation because his boss recused himself—asked the Department of Justice’s inspector-general to look into Mr Trump’s accusation. He and Christopher Wray, the FBI director, met Mr Trump at the White House and agreed to convene two meetings on May 24th: one for two Republican congressmen friendly to the

president, another for congressional leaders from both parties.

They will review “highly classified” information about the FBI’s source and methods.

Mr Rosenstein’s decision to indulge the president is no less unfortunate for being understandable. He was in a difficult position. Refusing Mr Trump’s demand, or resigning on principle, could well have let the president install a more pliant overseer of Mr Mueller’s investigation. He has not agreed to surrender any documents—as Devin Nunes, chairman of the House Intelligence Committee and Mr Trump’s chief congressional henchman, has long demanded. Perhaps the appearance of capitulation will

satisfy Mr Trump. The president has previously threatened crises, then stopped just short of provoking them.

Ideally, Congress would constrain a president bent on exercising his powers to protect himself.

That is what equal branches of government are supposed to do.

But most congressional Republicans are frightened of Mr Trump’s supporters and keen to hold the line against the Democrats, who are gunning for their jobs in the mid-term elections in November.

A recent poll showed that Americans are deeply divided on the question of whether Mr Mueller’s investigation is a “witch hunt”. Republican voters think it is; Democrats think it isn’t; independents are split. But almost all Americans believe that Mr Mueller should be allowed to finish the job.

Firing him would be hugely risky.

So Mr Trump, in Steve Bannon’s pungent phrase, “floods the zone with shit” by throwing out so many theories, lies and half-truths that Americans hardly know what to believe. Some will be persuaded that Mr Mueller’s investigation is not an attempt to find out how American democracy was assailed but part of a sprawling “deep state” conspiracy.

All this damages America’s institutions and its intelligence capacity. Perhaps the most worrying

development is that an informant’s identity has been revealed—not directly by the White House or the House Intelligence Committee, but partly thanks to their fulminations and demands. In future, a person is likely to think twice before playing that dangerous but necessary role. As Mr Wray told a Senate committee, “The day that we can’t protect human sources is the day the American people start becoming less safe.”

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CityFile Ambode tasks workers on service delivery

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Naval officers handing over documents of the siezed illegal refined diesel to the EFCC.

23 arrested as navy seizes N66m illegal refined diesel

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wenty-three suspected operators of illegal fuel refineries have been arrested by the Nigerian Navy, with about 300,000 litres stolen diesel worth N66 million confiscated from them.

The suspects were said to be conveying the illegal products in a vessel, barge and wooden within on the Niger Delta creeks when they were accosted by the navy.

Victor Choji, the executive officer of the Nigerian Navy Ship (NNS) Pathfinder, Port Harcourt, who paraded the suspects in Onne, Rivers State, weekend, said that the vessel, MV Nazarene, barge and wooden boat were intercepted in the late hours of April 20 by troops on routine patrol of waterways.

He added that “the vessel, MV Nazarene, was caught in the act by our patrol elements transshipping suspected illegally refined diesel from a barge, DP 28, and a wooden boat at about 2300 hours.

“MV Nazarene was seized with 300,000 litres of petroleum product suspected to be illegally refined diesel. The all-male crew members of the vessel were subsequently arrested and they have been in our custody as preliminary investigation had commenced.”

Choji said that troops also on routine patrol intercepted another suspected illegal vessel, MV Asha, escorted by six undisclosed security personnel.

He said that troops on boarding the vessel found out that the security personnel did not have permission to escort the vessel at the time of seizure.

He, however, declined to reveal the identity of the security agency that provided the illegal escort to the vessel.

He said “MV Asha was seized on March 29 at Onne waterways with 11 crewmen on board. The vessel and crewmen have been in our custody because their motive is still not clear.

“The vessel was arrested with six security

personnel that were not under any authority to escort the vessel, thereby, contradicting the Harmonised Standard Operating Procedure (HSOP).

The HSOP clearly spelt out roles of security agencies in combating illegalities in the oil and gas sector. I advise that security agencies abide by the HSOP.” The officer warned that any individual or group that wished to lift and load petroleum products legitimately at sea must first seek clearance from navy before carrying out such business.

He added that the navy was resolute to ensuring that crimes and criminality within the state maritime environment were frustrated to allow legitimate social and commercial activities to thrive.

The vessels, barge, wooden boat and the suspects have been handed over to the Economic and Financial Crimes Commission (EFCC) for further investigation and prosecution.

Kidnapping: Lagos spends N3bn to secure schools JOSHUA BASSEY

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agos State government says it has expended N3.4 billion to provide security infrastructure in model colleges and other public schools in state.

Idiat Adebule, the deputy governor who superintends over the state’s education sector, disclosed this while briefing journalists, at the weekend.

Adebule said that the kidnapping of some male students at the Lagos State Model College in Igbonla, near Epe, in 2016 necessitated the provision of the security infrastructure.

Recall that the kidnappers invaded the college on May 25, 2017 and kidnapped six of its students. The students were later rescued after they had spent 65 days in the

kidnappers’ den.

Also on October 6, 2016, some kidnappers also stormed the same school during which the vice principal, a teacher and four students were kidnapped. They were later released.

Adebule listed the security facilities provided in the schools to include, watch towers, security alarm systems, floodlights and perimeter fencing.

She said: “To stem the intrusion of hoodlums into our schools and colleges, the state government began the provision of security facilities. The perimeter fencing project at Model College in Igbonla had been completed, while work is ongoing at Model Colleges in Igbokuta, Ketu-Epe, Agbowa-Ikosi and Kankon in Badagry. We hope to complete them by the end of the year.”

Adebule said that the state government also embarked on the construction of additional classrooms and hostels at the colleges, as well massive rehabilitation and construction projects in public schools to create conducive teaching and learning environments for teachers and students.

She disclosed that the government spent N4. 8 billion in the last one year on 160 contracts awarded for rehabilitation of schools.

“In 2017, the ongoing supply of furniture to staff and students in schools received a boost with 40, 000 units of students’ furniture, 1, 000 units of teachers’ furniture and 100 units of principals’ furniture.

“Another set of 40, 000 furniture is proposed for supply for this year to meet up with the furniture deficit in our public schools.

overnor of Lagos State, Akinwunmi Ambode has advised workers to attune their mindset to optimum service delivery to the public.

He spoke at a two-day training organised for civil servants in the state, saying only a positive mindset would put in a position to produce positive result and deliver optimally.

Ambode was represented by Benson Oke, the commissioner for establishments, training and pensions. According to the governor, in public service, like any major project, it is necessary to have objectives, a timeline, a budget and the right leader(s) and team to develop the strategic plan. He observed that many planning exercises have been sub-optimised, derailed and or delayed due to the lack of planning.

“Strategic planning should involve the right people. The decision makers should take the time to think about and engage the right people both internally and externally in the development of the plan. In order to do this, a list of officers, advisers, and specialists (such as management consultants, accountants and lawyers) whose expertise and experience will be essential to the successful development and implementation of the plan should be made.

“This larger group may then be divided into core teams that will be fundamentally involved in all aspects of the plan and will also form supporting rings of other stakeholders who are brought in as required to tap their knowledge and build engagement,” Ambode said.

Also speaking, Oluwatoyin Ogundipe, a professor and vice chancellor of University of Lagos, charged the civil servants to strive for the best by embracing effective communication strategy that would allow feedbacks.

Killings: Experts want herdsmen to embrace ranching

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ome security experts have urged herdsmen to embrace ranching as a lasting solution to the perennial clashes with farmers in various communities in the country.

The experts who spoke in Lagos said that cattle ranching would go a long way in curbing farmers/herdsmen clashes and cattle rustling in the country.

Aghanya Ibezimako, a retired Commissioner of Police, said that the killings persisted due to lack of modern crime-fighting equipment by the police.

Ibezimako, former CP in Benue, Kogi and Ekiti, called on all security agencies to synergies and share intelligence to finally tackle the menace.

“Initially the country was battling with Boko Haram insurgency and now it has graduated to herdsmen killings.

“Government needed to provide necessary equipment to the police to fight this crime because they are closer to the public than other security agencies,” Ibezimako said.

The former CP commended Federal Government for deploying 150 special force of the Nigerian Air Force in Benue and other states where the clashes were prevalent, saying that it would yield positive result.

Micheal Sam-Wobo, a security expert, urged government to deploy the use of information technology in fighting crime, adding that it would also generate employment among the youths.

According to him, technology can be used in detecting suicide bombers carrying explosives inside their dresses.

Tony Ozorh, another security expert, called on National Assembly to enact a law establishing ranching as private businesses as was being done in advanced countries.

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NERC Confirms 22 Firms recieved it’s ‘No Objection to participate in Meter procurement

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

Sony takes bigger share of music industry with $2.3bn EMI deal Mike Ochonma

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ony says it has agreed to buy a controlling stake in EMI Music Publishing for $2.3 billion (£1.71 billion) as it looks to boost its music portfolio.

The deal means Sony would indirectly own about 90 percent of the record label and its some two million songs by artists from Queen and Carole King to Alicia Keys and Pharrell Williams.

Sony said it was thrilled with the deal, which is subject to approval. The announcement comes as Sony unveils its mid-term plan.

EMI, which has its headquarters in London, is currently owned by a consortium led by Sony. It is one of the world’s biggest music publishing firms. Sony already owns 2.3 million music copyrights, including the Beatles catalogue.

The Japanese tech giant’s deal, announced that with the Abu Dhabi-based investment firm Mubadala, will mean EMI will become a consolidated subsidiary of Sony.

Mubadala’s private equity arm has controlled and managed EMI Music Publishing on behalf of Mubadala and other thirdparty investors since 2012, Sony said. Before that, EMI was owned by Citigroup.

According to Kenichiro Yoshida, Sony’s president and chief executive said, “We are thrilled to bring EMI Music Publishing into the Sony family and maintain our world number one position in the music publishing industry,”.

Yoshida said the music business had enjoyed resurgence over the past couple of years, driven largely by the rise of paid subscription-based streaming services.

“In the entertainment space, we are focusing on building a strong IP portfolio, and I believe this acquisition will be a particularly significant milestone for our long-term growth,” he

said.

Sony is expected to unveil a three-year plan to move away from making any more gadgets and towards a bigger focus on gaming subscriptions and entertain-

GEEP MarketMoni interest-free loan benefits 350,000 micro-enterprises …as Osinbajo flags off MEMSs clinic in Kano Adeola Ajakaiye, Kano

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ederal Government Enterprise and Empowerment Programme (GEEP) MarketMoni scheme has successfully reached over 350,000 micro enterprises in all 36 states of Nigeria and the Federal Capital City.

This was revealed last week at the Kano State’s edition of Micro Small and Medium-scale Enterprises (MSME) Clinic by the executive director of Bank of Industry (BoI), Toyin Adeniji.

GEEP MarketMoni is a Federal Government Social Intervention Programme (SIP) that provides interest-free loans of N10, 000 to N100, 000 to microenterprises, the segments of society with the greatest difficulty accessing credit.

The scheme, which is executed by BoI, a parastatal of the Federal Ministry of Industry, Trade and Investment, directly impacts traders, market women, artisans and farmers

nationwide.

To assess the impact of the scheme, Vice President Yemi Osinbajo met with a section of about 12,000 beneficiaries from Kano State during the state’s edition of MSME Clinic on Thursday.

Special assistant to the Vice President on MSME, Tola Johnson, said, “The best thing that has happened to micro businesses in Nigeria is the GEEP MarketMoni programme. It dealt with their collateral challenge because all they need is their data, a bank account and Bank Verification Number (BVN).”

Johnson said out of the 37 million small businesses in Nigeria, 36.9 million are microenterprises, “This informed the Federal Government’s attention to this space. Microenterprises are responsible for almost 50 percent of the country’s Gross Domestic Product and 80 percent of the workforce.”

The BoI executive director revealed that under the GEEP MarketMoni scheme, the BoI had given out more than 350,000 microcredit loans

across the country, as “GEEP MarketMoni has given people who otherwise have no access to finance, money to finance their businesses. These micro enterprises are expanding their businesses, making more profit and employing more people.

“Most of our beneficiaries are women, some of whom are widows and single mothers. We are improving the quality of their lives, their children’s lives, their health and even education. We are seeing very quantifiable impacts. No government has ever done this.”

Speaking with journalists in Kano, Sherifat Suleiman, head of Agent Networks, who interacts directly with agents, association heads and the beneficiaries, said, “Apart from the 350,000 direct beneficiaries across the country, it has created employment opportunities for over 5,000 Nigerians who act as MarketMoni agents, some of whom are graduates, previously unemployed.”

Sherifat said, “As someone who has direct contact with

the beneficiaries, this has been a very emotional journey for me, watching how this interest-free loan scheme is changing the lives of people, especially women and the vulnerable. We truly appreciate the Federal Government for doing this.”

The National Bureau of Statistics reports that there are at least 37 million MSMEs in Nigeria, 85 percent of which lack access to funding.

It is in a bid to address this challenge head-on that the President Muhammadu Buhari-led administration established MarketMoni - the Government Enterprise and Empowerment Programme (GEEP), aimed at reinvigorating the economy at the base of the pyramid.

To benefit from the scheme, applicants just need to apply through their registered market associations and cooperatives, have a Bank Verification Number (BVN), and a mobile phone.

The loans range from N10, 000 to N100, 000, and are expected to be repaid within a 6 months period without interest.

ment.

EMI cur rently commands 15 per cent of the music publishing industry which with the current Sony ATV business would make the Japanese enter-

tainment and electronics giant the industry leader with market share of 26 per cent, a company spokesman said.

Other major players include Universal Music Group and Warner Music Group although their market share figures were not immediately available.

Under the deal, Sony, which already runs EMI Music Publishing, will lift its ownership to roughly 90 per cent from 30 per cent currently by buying Mubadala Investment Company’s holding.

“The rise in digital streaming is also expanding songwriter royalty revenues, with Sony capturing value as manager of the copyrights backed by direct deals with the likes of Spotify, Apple Music, Google Play, Sound Cloud and YouTube,” Macquarie analyst Damian Thong said.

Heritage Bank named most supportive financial institution in tourism

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eritage Bank Plc has once again proven to be Nigeria’s most innovative banking service provider, as Institute for Tourism Professionals, organisers of the National Tourism Transport Summit and Expo 2018 (NTTS), crowned Heritage Bank the best “Financial Institution for Outstanding Support for Tourism.”

The award, according to the organizers, was in recognition of the contribution of the bank to the growth and development of the tourism industry over the years.

Receiving the award on behalf of the bank the MD/CEO, Ifie Sekibo, who was represented by George Oko-Oboh, regional executive, Abuja & North, said it was a well-deserved honour for the bank, because over the years the bank had believed in tourism and had tried as much as possible to increase its support to the sector.

He disclosed that the bank is partnering with stakeholders and plans to increase its investment in the sector in the years ahead.

Sekibo said, “It is a welldeserved award for the bank because over the years the bank has believed in tourism and we always keep trying as much as

possible to support the tourism sector. Over the years we think it is something we have done with a quite a number of stakeholders and we have done that quite well.

“In the coming years, we should expect more of better handshake. We intend to do more; because looking at what they are trying to achieve here now, we have seen that they are trying to take in much into the other sectors. We think we would still be there for them.

“The sector is quite lucrative, but for us, what we are doing basically is like partnership.

That is what we have done with them over the years. We have done quite a few investments in the sector.”

Also speaking on the award, a member of the Local Organising Committee of the NTTS, Kayode Adesola, said several banks were selected for the honour, but Heritage Bank emerged the winner because of its unique approach and support for operators in the industry.

He said, “It is not as if the banks have given money to operators, but there have been some banks that have been of help to some of the players in the industry; like the travel agents, tour operators and others.

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NERC Confirms 22 firms recieved it’s ‘No Objection to participate in Meter procurement HARRISON EDEH, Abuja

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ollowing the Nigeria Electricity Regulatory Commission’s (NERC) approval of the Meter Asset Provider (MAP) Regulations 2018, 22 firms have received the Commissions ‘No Objection To Participate In The Metering Process’, the Commission has said.

The ‘No Objection to Participate in the Metering process’ is a form that would enable investors link up seamlessly with the Distribution Companies of Nigeria (Discos) to get allocation of where to cover on metering of Customers in the country.

NERC, it would be noted has revealed just recently that only 42 percent, translating to 3 360 000 out of eight million billed electricity customers have meters in the country ,prompting engagement of third party meter asset providers to involve in closing the metering gap.

NERC’s efforts to ensure proper billing of the electricity sector, industry watchers say was to address concerns of liquidity threatening the

sector, while ensuring a more efficient and transparent billing of electricity consumers.

On the heels of the approval of the Meter Asset Provider regulations 2018, applications were invited from the Commission from interested investors who would work closely with the Discos to close the gap of those not metered in the country.

MAP Regulations is intended to facilitate closure of the wide metering gap in the Nigeria Electricity Supply Industry (NESI) within three years. The ‘No Objection’ is to qualify intending investors to participate in the meter procurement process in NESI. The Regulation mandates electricity distribution companies (DISCOS) to engage meter assets providers who fund purchase, installation and replacement of meters to meet Discos metering obligations to their customers.

Usman Abba Arabi, general manager, Public Affairs revealed in the statement that the effort is to ensure that all electricity customers are metered thereby reducing incidences of estimated electricity billing to the barest minimum.

The Commission said in the statement that having conducted due diligence on the supporting documents to the applications submitted by interested investors, has granted successful applicants ‘No Objection’ to participate in the procurement process for meter assets provision in accordance with section 8 subsection 4 of the Meter Assets Providers Regulations, 2018. NERC further clarified that the Members of the public and intending investors announcement does not foreclose other interested applicants from getting the ‘No Objection’ as it is a continuous exercise.

Companies granted ‘No Objection’ include Huawei Technology Company Nigeria Limited; Bilview Energy Limited; Chintech Electro Nigeria Limited; Holley Metering Limited; Meron Nigeria Limited; Integrated Power Limited; MBH Power Limited; Trimani Engineering Limited; Sapropel Energy Resources Limited; Megawatt Distribution International Limited; Unistar Hi-Tech Systems Limited; and MOMAS Electricity Meters Manufacturing Company Limited.

Diamond Bank’s digital strategy driving Q1 growth

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iamond Bank Plc has released its Q1 2018 unaudited financial results on the floor of the Nigerian Stock Exchange (NSE), highlighting realignment in its group structure with a strong focus on the Nigerian market and retail business through its digital penetration strategy.

In the unaudited Q1 2018 Financial Results made available to financial and capital market correspondents in Lagos, Nigeria, Diamond Bank recorded a growth in its mobile banking revenue from N1.2 billion in Q1 2017 to N1.8 billion in Q1 2018. Increases were recorded in customer acquisition through digital channels with increases in active account ratios, and the proportion of customers’ transactions completed on its digital

platforms.

Uzoma Dozie, chief executive officer, said: “At a macro level, the year has begun with positive indicators, such as growth in GDP, declining inflation and rising crude oil prices.

Thus, investor sentiment about the economy is becoming more positive as shown by the success of recent bond sales by the Federal Government. We expect these positive trends to continue and I am confident that Diamond Bank is well positioned to capitalize on these, particularly having disposed non-core assets to focus on the Nigerian opportunity.

Uzoma further stated that, “2018 will see Diamond Bank invest more in emerging businesses through an expanded loan offering and support for different activities in trade, ag-

riculture and manufacturing. As emerging businesses continue to flourish, we will also continue to develop services and products to support their needs. “ The Bank kept operating expenses flat when compared to Q1 2017, whilst its impairment charges declined 18 percent year-on-year, a reflection on the Bank’s improved loan underwriting and drop in non-performing loan formation. These will go to strengthen performance in the years ahead.

Giving an indication of the Bank’s business plans for the rest of the financial year, the CEO said, “The Bank will continue its drive to use technology to drive financial inclusion and convenient banking with the aid of such products as “ADA”, a 24/7 Artificial Intelligence (AI) chatbot.

NSIA Insurance gets ISO certification

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SIA Insurance Limited recently received the ISO 9001:2015 Certification from the Standards Organisation of Nigeria (SON), the representative of the International Organisation for Standardization (ISO) in Nigeria.

The Company achieved this certification due to its successful implementation of the quality management system and priority for customer satisfaction. This has ensured that all processes within the organization are standardized to meet best practices.

The certification aligns with NSIA’s drive for excellence.

NSIA Insurance thrives on its quest for continuous improvement and this is also the bane of the ISO 9001:2015 standards.

To this end, the Company will uphold compliance to the standard and quality of service across all of its branches to provide clients with excellent service delivery.

The Company’s managing director, MEbele Nwachukwu said: “As we continue to strive for client satisfaction at all times, we are very proud of this achievement, which underscores our drive for excellence. The ISO certification assures our clients

and stakeholders that we can be trusted to deliver the highest quality of services. It gives them confidence that we are fully focused on their needs and committed to international standards of quality”.

ISO 9001:2015 is the latest and most advanced international standards for quality management systems and our prompt adoption of this standard is evidence of our commitment to quality in all of our business processes and products.

NSIA Insurance is a composite insurance company, with almost 30 years of service in the Nigerian insurance industry.

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COMPANIES & MARKETS Regency Alliance Insurance reviews expansion plan for competitiveness

Business Event

...pays dividend Modestus Anaesoronye

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nderwriting firm, Regency Alliance Insurance Plc says it’s reviewing its expansion programme to become more competitive in the nation’s insurance space.

This is also as efforts were being made increased market penetration through the deployment of e-commerce platforms.

Baba Gana Kingibe, chairman of the company made the remark at its 24th Annual General Meeting held in Lagos.

He said that the Board and Management are optimistic that the dampened socio-economic climate is temporary and Nigeria remains a land of immense opportunities and prospects.

“Your company is positioned to make the best of the brighter future ahead. We will always be guided by our

corporate ideals and values of professionalism, integrity, commitment and efficiency as we create wealth for all our stakeholders while mitigating all associated risks that may arise, Kingibe stated.

Meanwhile, during the financial year ended December 31, 2018, the underwriting firm, recorded a Gross Premium Written of N3.368 billion from N3.10 billion in 2016, indicating 8.61 percent increase , while N5.58 billion, a 30 percent increase from N4.30 billion in 2016.

The effect of the increased premium generation according to the company was however significantly eroded by the 117.46 percent increase in net claims, 18.08 percent increase in underwriting expenses and a 14.63 percent increase in management expenses when compared with 2016 figures.

“One salient result of the economic situation has been an increase in both the num-

ber of claims and value therein throughout the insurance industry. In 2017, there was huge claims pay-out in oil, gas, accident and motor classes.”

The company also recorded a 76.15 percent increase in investment income, which according to the chairman were reflective of the high deposit rates and governments yield rates offered during the year, coupled with the of the effect of the increase in prices of equities held by the company.

The company’s profit after tax however dropped 58.25 percent to close at N196.48 million from N470.59 million in 2016. But from the company’s accumulation, the shareholders got a dividend payout of N200.06 million, translating to N3 kobo per 50 kobo share.

The company’s total assets in the 2017 financial year closed at N9.31 billion in 2017 as against N7.25 billion in 2016.

Okey Enelamah to address delegates at Ausso Leadership Academy Masterclass

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kechukwu Enelamah, minister of Industry, Trade and Investment will be sharing his experience and outstanding success in business and public service with delegates of the second cohort of the Ausso Leadership Academy (ALA), which will hold from June 4th at the Entrepreneurs’ Hub at Lekki.

The interaction will touch on the Economic Recovery and Growth Plan (EGRP), developed to restore economic growth while leveraging the ingenuity and resilience of the Nigerian people. It is also articulated with the understanding that the role of government in the 21st century must evolve from that of being an omnibus provider of citizens’ needs into a force for eliminating the bottlenecks that impede

innovation and market-based solutions. The initiative has delivered immense dividend in its relatively short period of implementation.

In his response to the invitation to share his experience at the Academy, Enelama said “I am aware of what the Ausso Leadership Academy is doing to close the leadership knowledge gap in Corporate Nigeria, and I am happy to support the effort”.

Speaking on the development, the Founder and Entrepreneur-in-Residence at the Ausso Leadership Academy, Austin Okere noted that Enelamah’s endorsement is critical to the efforts of the Ausso Leadership Academy in the quest for corporate human capital development, and stressed that the Minister’s interaction will be

instrumental in motivating the delegates to much greater aspirations. According to Okere “it is a privilege to have one of thevery best public officers, with an enviable record of performance come and share his experience with the delegates”. “His insights will provide a robust perspective on the intersection between business and public service”, he said.

The Ausso Leadership Academy operates on the mantra that within our local context the delegates being mentored will relate better with our own heroes and their stories of building outstanding businesses than abstract case studies; while rightfully acknowledging them and documenting their legacies for posterity and future generations.

L-R: Babatunde Ruwase, president, Lagos Chamber of Commerce and Industry (LCCI), presenting a plaque to Bukola Saraki, Senate President, during a courtesy visit by LCCI to the National Assembly recently.

L-R: Bolu Odusanya, MD, TREXM Oils and Gas Services; Moukarram Alameddine, sales director, measurement and control sub-saharan Africa, and Brent Omdahl, commercial counselor for U.S. Mission to Nigeria, at the Baker Hughes (a GE Company) and TREXM Oil and Gas Services technology meeting to educate regulators and stakeholders on the latest trends in liquid custody transfer metering in the Nigerian market.

R-L: Sylvester Iriogbe, corporate service manager, Fidson Healthcare Plc; Adesoji Fasanya, product manager; Olugbenga Olayeye, executive director sales and marketing; Friday Enaholo, marketing manager, and Oshoke Ayebae, business development manager, during the media launch of the Astymin ‘One Goal One Million Naira’ campaign in Lagos recently.

Pic by Pius Okeosisi

Sweet Nutrition repackages Chef seasoning products

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arkers of chef seasoning products, Sweet Nutrition Limited has repackaged its brand of seasonings in the Nigerian market.

The unveiling saw the firm re-launch of its cubes (Beef and Chicken), and Seasoning powders (Jollof Rice, Fried Rice, Peppersoup, Goat Meat, Curry, Stew, Ginger-Onion-Garlic and Crayfish), with the products new look.

Kumar Venkataraman, managing director, Sweet Nutrition Limited described the event as a well-deserved recognition for their trade partners as well as the consumers for their continued

patronage.

He further stated that mobile kitchens had been put in place where the company would be going to strategic areas to promote the newly re-launched seasonings and cubes.

He pointed out that Chef seasoning, launched into the Nigerian market in 2009, and re-launched with the new look in 2018, was in their bid to continue serving the interest of their most esteemed consumers, distributors, wholesalers and retailers.

In an interview with newsmen, Hila Jimosaya, brand manager, said the products unveiled were meant to help make

complete a wholesome meal for the Nigerian households.

Also, head, sales and marketing, Swatanter Saraswat, gave an informative view about the natural herbs and spices present in the chef seasoning products, and assured that, “Sweet Nutrition Limited as a company stands to provide a nutritious meal to each Nigerian household.”

The management of the company was filled with gratitude and appreciation at the turnout and support received from the distributors, wholesalers and consumers, and assured them of a better and prolonged relationship.

L-R: Henry Ajetunmosi, executive chairman, SIFAX Off Dock; John Jenkins, group managing director, SIFAX Group; Adewale Adetayo, general manager, SIFAX Haulage and Logistics, and Fola Rogers-Saliu, executive director, human resources and administration, at the official commissioning/ unveiling of 20 new Trucks by SIFAX Haulage in Lagos.

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Bridging the gender gap in financial inclusion ENDURANCE OKAFOR

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here is need to shrink the gender gap in financial inclusion, as it seems like one that will not budge in the near-

est future.

The World Bank in its Global Findex database shows a global gender gap of 7 percentage points, a gap that has remained in same level since 2011. This is happening despite the increase in the number of women who have been opening bank accounts in the same period.

“The financial freedom is still elusive to 980 million women around the world; worryingly, this does not seem to be improving,” the World Bank said in a statement.

Nigeria is seen as one of the very troubling countries in terms of persistent gender gap in financial inclusion.

Africa’s largest economy currently have 24 percentage points gap between the male and female adults who have access to basic bank accounts.

The data from the World Bank Findex database shows that 51 percent of Nigerian male adults had a bank account in 2017 compared to the 27 percent recorded for female.

This gap is however bigger than the 20 percentage points gap that was recorded in 2014 when the total male with accounts was at 54 percent with female at 34 percent.

Morocco, Mozambique, Peru, Rwanda, and Zambia are other countries that also have doubledigit differences between men and women.

Meanwhile, countries that had gender gaps in 2011 generally which are still having them today include; Bangladesh, Pakistan, and Turkey, the gap in account ownership between men and women is almost 30 percentage points in these countries.

This is different for some countries like Bolivia, Cambodia, the Russian Federation, and South Africa, where account ownership is equal for both men and women, as compiled from the World Bank.

In Argentina, Indonesia, and the Philippines, the gap recorded is the reverse, as women have more accounts than men.

A BusinessDay survey shows

low earning as one of the main reasons why both men and women do not have a financial account.

The median income of low earners in the country is about N10000 to N20000 per month.

Nigerian adults who responded to the question of why they do not have a bank account said they earn too little to open and operate a bank account, considering the cost of opening an account and charges that comes with having one is quite high.

The banks on the other hand said they incur high cost in running their operations, as the basic amenities that could have aid in delivering financial services at a lower cost are not available.

There are however some reasons that keep women specifically from opening accounts and this can be traced back step by step through unequal opportunities, laws, and regulations that put an

extra barrier on women’s ability to even open that simple bank account.

“I opened my first bank account as a new student in a university in 1990. This seemingly small act meant that I could manage my own finances, spend my own money, and make my own financial decisions. It meant freedom to decide for myself,” Ayo Balkis said.

The World Bank however suggested ways to help bridge the financial inclusion gap in Nigeria and other parts of the world; with the use of technology and mobile banking, removing of discriminatory laws and the focus on financial capability.

On the use of technology, the lender cited moving routine cash transactions into financial accounts could shrink the number of unbanked women , as this is already working in both Europe, Central Asia, the Middle East and

North Africa, where 1 in 5 women who have an account opened their first account to receive digital transfers of public sector wages, government social benefits, or public pensions. In Latin America and the Caribbean, the share is 14 percent.

At the same time, programs like M-PESA, the ground breaking mobile money transfer service in Kenya, have demonstrated the power of mobile banking. Drive through even the most rural area in the country.

This is a game-changer for rural poor who have generally had scarce access to financial institutions, and for whom the trip to the nearest bank has too high a cost in terms of travel or lost time at work.

Recent research showed that because of M-PESA , around 185,000 women in Kenya moved from subsistence farming to business or retail sales, and their sav-

ings went up as a result. As mobile phone ownership grows, this may be a way to jump past the traditional ways to access a financial institution and bring access to people where they are.

Although, an initiative of this kind has however not seen light in Africa’s largest economy, as there is yet to be collaboration between the telecom companies and the financial service providers.

In removing of discriminatory laws the World Bank said there were only three countries remaining where married women needs permission to open a bank account. This is progress, and yet this is also three too many.

Nigeria can be classified to be in this category, as A’isha, a lady from the Northern part of Nigeria said she is not permitted to go open a bank account or even leave the house to go do anything for herself, that she depends on her husband for everything and she was married to take care of the house and the children. This she also said is the culture and the believe of the people from her community.

“Even in places where women face often insurmountable odds, it is possible to change the laws that hold them back. In the Democratic Republic of the Congo—a country that performs at the bottom in nearly all aspects of gender equality—the World Bank Group worked with the ministries of Gender and Justice to change the country’s family law, which previously prevented married women from opening bank accounts, obtaining loans, signing contracts, or registering companies without the permission of their husbands. This led to the adoption of a new Family Code in 2016 that lifted these restrictions,” the World Bank said.

While on the focus on financial capability, boosting financial literacy among girls and women was cited by the bank, as this is not just improving their reading and writing skills, but also teaching them how to use a transaction account, how to manage and budget money, and how to save.

At the same time, the social, emotional and psychological aspects of financial decision-making can be just as important as basic technical skills.

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Rates + Bonds

Economics

Funds

Week Ahead

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ECONOMY

2018 Best performing stocks so far DIPO OLADEHINDE

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s financial activities approach the last days of May before moving to the last month of first quarter 2018, stocks of Cement of North Nigeria plc, Caverton offshore support group plc, Unity Bank, Betaglass co plc, Fidson, NPF microfinance bank plc, NEM insurance co plc, Learn Africa plc, Cutix plc and FCMB plc leads​ the way on the best performing stocks of 2018 so far.

As at the close of the trading session on Friday 25th May 2018, the top 10 performing stocks spot has been shared by companies from different sectors with Cement Company of North NIG. PLC taking the first spot with a share price that has risen 152.63 percent and was priced at N24:00 C av e r t o n O f f s h o re group PLC followed with a share price that has rallied some 82.17 percent YTD and priced at N2:35 as at the close of trading in Lagos on Friday Unity bank, Beta glass Co and Fidson stood 3rd, 4th and 5th with a year to date share price of 75.47, 70.24 and 60.81 and priced at .93, 87.35 and 5.71 respectively.

NPF Microfinance bank, N.E.M insurance company Learn Africa PLC, Cutix PLC, and FCMB completed the top 10 spot wit share price up some 54.40 percent, 54.22 percent, 50 percent, 49.25 percent and 48.60 percent all traded at N1.85, N2.55, N1.32, N3 and N2.17 respectively.

The worst five performing stocks so far in 2018 are Unic Insurance plc,

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SHORT TAKES $1.4 trillion The African Union Commission Deputy Chairperson, Ambassador Kwesi Quartey had stated that the African Continental Free Trade Agreement (AfCFTA) is expected to boost consumer spending to about $1.4 trillion in 2020 and increase intra-African trade by as much as $35 billion per year, or 52 percent above the baseline by 2022.

$8.9 billion

Multiverse Resources, FTN cocoa PLC, Courtville Investment PLC, and African Alliance Insurance Company all with a decrease of 60 percent trading at 0.2 Stock performance also reflected a bearish mood in the market last week as all sectors closed in red with the banking sector recorded the heaviest decline as NSEBNK paired by 4.38 percent followed by the consumer goods sector (NSEFBT10) which declined by 3.62 percent.

The insurance sector NSEINS10), Oil and Gas (NSEOILG5) and the Industrial sector NSEIND also declined by 1.08, 0.19 and 0.01 percent respectively.

In the week under review, the Nigerian stock exchange lifted the year and half suspension on trading in the shares of Ikeja Hotel.

The market which touched as high 45,000 points as at Jan 19 this year, dipped about 12.8

percent to record its lowest level on Friday 25th May 2018 after shares in banking and consumer goods companies declined.

Equities market closed on a negative note, as NSEASI depreciated by -1.01 percent to close at 39, 323.62. basis points as against -1.06 percent depreciation recorded previously. Its Year-to-Date (YTD) returns currently stands at +2.83 percent.

Market turnover closes negative as volume moved down by -3.85 percent as against -3.85 percent downtick recorded in the previous session. FCMB , ZENITHBANK and UBA were the most active to boost market turnover. GUARANTY and ZENITHBANK topped market value list.

Rating agency Fitch recently released a Sovereign Rating report on Nigeria. The agency maintained its L ong-Term Foreign Currency Issu-

er Default Rating at B+.

A sovereign is usually a national government.

Sovereign credit ratings are focused on the risk of a sovereign government (Federal Government) defaulting on its debt obligations. On a scale of 0-16, the B+ rating ranks 3.

Nigeria’s B+ ranking translates to an Issuer Default Rating (IDR) score of 3 on a scale of 0-16. An IDR rank of 16 equates to AAA rating which is the credit quality with the lowest rate of default. CCC is the lowest rating, means the default is a real possibility.

A B+ rating means the risk of default is possible, but there exists a margin of safety. Financial commitments are currently being met ; however, capacity for continued payment is vulnerable to deterioration in the business and economic environment.

The rating agency also stated that it expects the

Central Bank of Nigeria (CBN) to maintain the current exchange rate regime. The apex bank is also expected to ease the interest rate gradually.

The rebound in crude oil prices and production volumes has led to the country’s recovery from recession. Fitch estimates growth rates of 2.48 percent in 2018 and 3 percent in 2019. The recovery in crude oil revenue has also enhanced foreign exchange rate stability.

This has also provided a boost for the non-oil sectors, especially agriculture.

Foreign reserves hit $47 billion, equating to eight months imp or t needs, and much higher than the B, median of 4 months. The banking sector remains profitable, though economic headwinds combined with high loan concentration, have eroded asset quality and capital adequacy.

Two arbitration awards totalling over $8.9bn (about N2.7 trillion at CBN’s N305.4 as of May 22) have been made against the country and it does appear efforts by the Muhammadu Buhari’s administration to dodge payments have failed, leaving it with no option than to honour the judgment obligations. The fines emanated from the contractual actions of three previous administrations – the Olusegun Obasanjo, Umaru Yar’Adua and Goodluck Jonathan regimes.

N1.5 billion Delta State House of Assembly approved N1.5 billion loan facility for Accelerated Agriculture Development Scheme of the Central Bank of Nigeria, CBN for Governor Ifeanyi Okowa.

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

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

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5 sectors in recession in Q1 2018 ENDURANCE OKAFOR

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espite the four successive quarter growth reported since Nigeria’s exit from recession in the second quarter of 2017, some sectors were not only in recession in the first quarter of 2018 but rather plunged deeper into negative trajectory.

The sectors that expanded negatively in the quarter under review, although were on the path of positive trend in the last quarter of 2017 include; the Professional, Scientific and Technical services, Trade, and Construction sectors, while those that plunged deeper into recession in Q1 2018 were; the Real Estate and the Public Administration sectors.

The Professional, Scientific and Technical services recorded negative growth at -2.35 percent in Q1 2018 from a positive growth of 0.64 in the previous quarter. Trade also followed in the same trend as it grew negatively by -2.57 percent from 2.07 precent in Q4 2017 while Construction sector expanded in the negative trajectory at -1.54 percent from 4.14 percent reported in the previous quarter.

The Real Estate and the Public Administration sectors were deep into recession in the first quarter of 2018 as they both grew from -5.95 percent and

-0.45 percent in Q4 of last year to -9.40 percent and -1.72 percent respectively.

According the figure released by the National Bureau of Statistics (NBS) Nigeria’s Gross Domestic Product (GDP) grew by 1.95 percent (year-on-year) in real terms in the first quarter of 2018.

This shows a stronger growth when compared with the first quarter of 2017 which recorded a growth of -0.91 percent

indicating an increase of 2.87 percent points. Compared to the preceding quarter, there was a decline of -0.16 percent points from 2.11 percent. Quarter on quarter, real GDP growth was -13.40 percent.

A further break down of the report showed that aggregate GDP stood at N28.46 trillion in nominal terms. This performance is higher when compared

to the first quarter of 2017 which recorded a nominal GDP aggregate of N26.02 trillion thus, presenting a positive year on year nominal growth rate of 9.36 percent.

This rate of growth is however lower relative to growth recorded in Q1 2017 by -7.70 percent points at 17.06 percent but higher than the preceding quarter by 2.14 percent points at 7.22 perecnt.

Delta, Akwa Ibom,Rivers, Bayelsa and Lagos receives highest FAAC revenue in April 2018 BUNMI BAILEY

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erivative formula of sharing federal allocations continues to give some states the upper hand as Delta, Akwa Ibom, Rivers, Bayelsa and Lagos recorded the highest Federation Account Allocation Committee (FAAC) disbursement in April 2018, according to the National Bureau of Statistics (NBS) FAAC report.

“It is the derivative component of the allocation that makes these states the highest; for the oil producing states of Delta, Akwa Ibom, Rivers and Bayelsa , their derivative principle is coming from oil production,” Johnson Chukwu, CEO, Cowry asset management limited said on phone.

Based on the NBS data analysed by BusinessDay, Delta state revenue was N17.4 billion, Akwa Ibom had N17.2 billion, Rivers had N14.7 billion, Bayelsa had N13.2 billion and Lagos state​had N9.1 billion. The total net amount disbursed to all the 36 states was N196.3 billion.

“Lagos state derivation is currently from the value added tax (VAT) which is the highest in the country,” Chukwu further added.

The derivation principle seeks to allocate natural resource revenues accruable to the federation’s account on the basis that is perceived to be equitable, given particular consideration to the resource-producing states and regions.

The principle is a component of fiscal federalism and ensures that a region or state retains a certain per-

centage from oil tax revenues derived from the exploitation and extraction of natural resources (like oil and gas) in its territory. This revenue is calculated based on the direct contributions from a natural resource state.

Also from the NBS data, FAAC disbursed the sum of N638.1billion to the three tiers of government in April from the revenue generated in March 2018 which was 28.5 percent higher year-onyear from N496.4 billion in April 2017.

Th e a m ou nt d i sbu r s e d c o m prised of N480.6 billion from the Statutory Account, N62.53billion from FOREX Equalisation, N11.3 billion from NNPC and N83.7 billion from Valued Added Tax (VAT).

Federal Government received a total

and ecology; N2.4billion as stabilization fund; N8.2billion for the development of natural resources; and N5.6billion to the Federal Capital Territory (FCT) Abuja.

The states with the lowest allocation was Osun state having N1.6 billion, Cross river had N2.7 billion, followed by Ekiti state having N2.89, Ogun state had N2.9 billion and Zamfara having N2.97 billion.

“These are states with relatively low population, few number of local governments, minimum derivative income and those that do not have resources that is generating enough revenue coming into the federation account,” Chukwu said.

The federation account is currently being managed on a legal framework that allows funds to be shared to the three tiers of government under three major components. These components of N268.3 billion from the N638.1 billion are the statutory allocation, Value shared. States received a total of N170.1 Added Tax distribution and allocation billion and Local Governments received made under the derivation principle.

N128.3billion. The sum of N55.9 billion The FAAC committee is made up of was shared among the oil producing commissioners of finance and Accounstates as 13 percent derivation fund. tants-General from the 36 states of the Revenue generating agencies such federation; the Accountant General of as Nigeria Customs Service (NCS), the Federation, and representatives Federal Inland Revenue Service (FIRS) from the NNPC. Others are represenand Department of Petroleum Re- tatives from the Federal Inland Revsources (DPR) received N4.1 billion, enue Service; the Nigerian Custom N5.5 billion and N3.7 billion respec- Service; Revenue Mobilisation, Altively as cost of revenue collections. location and Fiscal Commission as Further breakdown of revenue alloca- well as the Central Bank of Nigeria. tion distribution to the Federal GovernThe key agencies that remit funds ment of Nigeria (FGN) revealed that the into the federation account are the Nisum of N227.9billion was disbursed to gerian National Petroleum Corporation the FGN consolidated revenue account; (NNPC), the Federal Inland Revenue N4.9 billion shared as share of derivation Service and the Nigerian Custom Service.

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

Unmatched qualities for closing deals

Iyore Ogbuigwe

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n excellent salesperson will sell a mediocre product better, faster and more profitably than a mediocre salesperson will sell an excellent product.

So it’s not about the product but about you. Are you an excellent salesperson? Can you activate buying desire in all your prospects and close deals consistently? Excellent salespeople have the uncanny ability to activate a buying desire in the most difficult prospects and close deals consistently in any economy and at any time.

The key determining factor of your success in sales isn’t how long you’ve been selling but the quality of your prospects and how quickly you can close deals by converting them to loyal clients. In this article, I will share a simple strategy that consists of 10 easy steps to close deals every time you make a sales pitch.

1. Effective follow-up One of the biggest mistakes rookie salespeople make is lack of an effective follow-up plan. Don’t make this mistake and if you have already, rectify it immediately.

People do business with you not because you’re the best but because they remember you so you should invest in an effective follow-up system.

Where do you store your prospect’s data? Are many pages of your diary scattered on your work desk? Have them stored

in one place then review it daily to track your prospects.

The proof of good storage is ease of access when needed!

I know a very wealthy man who fired his Personal Assistant (PA) because he realized his calendar and reminders could do all she was doing. With an effective follow-up system in place, you can easily exceed your sales target without hiring more hands. Simply schedule those meetings on your calendar and create a reminder for them.

When you meet a prospect and he says he is currently busy, simply ask for a date for the next appointment or an appropriate time to call back. This becomes the basis for the follow-up so he doesn’t feel like you’re bugging him. Ensure you don’t leave it open-ended.

Always ask for specific dates and times for the next visit.

Give two options, a close date and a far date. Then the prospect can pick one. If you only ask for one date you’ve given him a second option which is to say, “that date is not convenient for me, let me get back to you.” This will likely be the last time you will see that prospect.

Do prospects get back to you after making such statements? No! It is rare. That will most likely mean the sale is lost because as you walk out that door, he or she immediately forgets you.

Often, I come across salespeople and relationship managers who manage a robust database but never follow up and close sales. For some reason, they get so busy fighting fire all day and are unable to do the things that really matter. It takes discipline to start the journey of being a successful salesperson but it also takes discipline to stop and do the things that really matter.

2. Know Your Value Statement We have already estab-

lished that prospects only pay for products they believe will give them value for their money so you must know and communicate the value of your product effectively.

To communicate the value of your product, you have to focus on being clear. Clarity is where the power really is. The simpler your value statement, the better!

Your first statement in your sales pitch must grab your prospect’s attention and elicit the response “tell me more.”

Your first statement should be a summary of the value you offer. When I meet clients, I usually say, “Hello, my name is Iyore Ogbuigwe and I train businesses on how to sell when no one wants to buy so they can make more money.”

Most times I usually get the response, “Hmmm... tell me more” or “Really? How?” You must find your value statement.

What is your value statement? Your value statement is the attention-grabbing statement.

To find your value statement, you must identify the end result of the value your product gives then walk backwards to create the value process. For example what’s the end result of people buying your furniture? Comfort. With comfort comes happiness.

The end result is happiness.

The ultimate result is usually an emotion of happiness, peace or tranquillity. Having identified the value, choose your niche. For example, your niche could be salaried individuals. In summary, your value statement will then be “I help salaried individuals achieve happiness through bespoke furniture.”

Take a few minutes right now and think carefully about the value statement for your business. Write it down and keep refining it with time.

Still stuck? No worries, I love working with business owners to develop the perfect value

statement and coaching them on easy ways to attract mouthwatering sales, so contact me and let’s get you that amazing value statement.

You also need to build your value proposition. You can do this by answering this question: What are my similarities and my differences?

Your similarity is why you’re in that industry, while your difference is what sets you apart in your industry (your selling point).

Focus on listing five of your differences as your value proposition.

3. Know your goals You have to put your goals into two categories: Outcome goals: What you desire.

Performance goals: The activities that will give you what you desire.

You can’t know your performance goals until you know your outcome goals. In order to achieve your outcome goals, you must take on the following as part of your performance goals: New information, new attitudes and new actions Recently, I got a call from one of my coaching clients. He wanted me to strategize with him to meet his N100 Million sales target for 2018.

I quickly responded, “get a sheet of paper and write the goal at the top, then divide the amount (N100 million) into categories. These categories will represent clients he should: 1. Up-sell to 2. Cross-sell to 3. Repeat the same purchase 4. Get referrals from 5. Get from the company’s marketing efforts in form of leads 6. Cold Call I asked him to identify his performance goals based on these six categories. I urge you to do the same.

4. Have a Niche Focus on a subset of the

market then tailor your solutions to solve their problems.

The moment you identify your market, your sales process will change remarkably because a part of the brain called the Reticular Activating System which is the part of the brain that helps you to focus, helps you put aside any information that is not really necessary so you can focus on what is important.

The day you identify your niche or target market, you will begin to see your clients everywhere. Some people say things like, “I don’t have a target market because everybody is my market,” but this isn’t true.

If everybody is your market then you don’t have a market because a market is a segmented group of people. You would always have competitors no matter what so the point is to identify your niche, identify the area where you want to focus on and begin to build on that.

You can identify your market by creating an avatar of your ideal client. What does your ideal client look like? These few questions will help you create the perfect client avatar and walk you through reaching your client.

1. Where do your ideal clients live?

2. Are they single or married?

3. Are they male of female?

4. What is their age range?

5. What’s their average annual income?

6. What kind of cars do they drive, if any?

7. Do they have kids?

8. Do they travel often?

9. What kind of schools do they go to?

Ask all these questions to create an ideal picture of your client. Then you’ll start to see your client everywhere you go.

This process of creating your client avatar will help you to understand different dynamics of problems from your niche and solve them creatively.

Iyore is the CEO of Ultravantage Solutions. Ultravantage Solutions is a team of sales consultants who undertake sales consulting, coaching, training and recruitment assignments that result in direct contribution to the client’s profitability as measured by monthly or quarterly results.

We also design and implement sales workshops that result in demonstrable behaviour changes on the job, as determined by customer feedback.

Iyore has trained a list of local & international clientele, some of which include Jumia, GTBank, The Lagos Business School, Standard Alliance Insurance PLC, Kwese TV, Hygeia HMO, Rain Oil, House of Tara Intl., Beauty Therapy Institute, PWAN Homes, Alpha Mead, So-Kleen, Believers’ LoveWorld Inc., Daystar, ChamsAccess, Main One, Jobberman, The American International Insurance Company, Porcelanosa, Vessie Goldsmith and Sage West Africa.

Iyore’s sales and persuasion seminars tagged ‘Peak Performance Selling’ which hold in Nigeria, Ghana and in the United States of America have produced amazing results in the lives and businesses of the participants. Iyore is the creator of ‘How To Sell When No One Wants To Buy®,’ the most advanced sales system for exceeding sales targets.

Iyore was a Lead Faculty at the Lagos Business School (Pan-Atlantic University) on ‘Planning and Executing Marketing and Sales Strategy’ for the JCI Annual Individual Development Seminar.

Iyore Ogbuigwe has started a movement of helping young people have a mindset shift towards sales; this is because of the important role that sales play in the growth of an organization and economy.

To be continued

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INSIGHT

ISO Certifications: Taking NDIC to greater heights BASHIR IBRAHIM HASSAN

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t was a momentous occasion, the type one remembers for a long time. It was like a graduation ceremony, with the best overall student seated and beaming with satisfaction. The day before this event, it was only him and very few others knew he had been adjudged the best overall student. Today, however, the whole world has come to witness his coronation.

The day was Monday, May 21, 2018, when the world came to know for sure that the Nigeria Deposit Insurance Corporation (NDIC) under the leadership of its Managing Director and CEO Malam Umaru Ibrahim was presented with three certifications from British Standards Institution (BSI), namely: Information Security Management System ISO/IEC 27001:2013, IT Service Management System ISO/ IEC 20000-1:2011 and Business Continuity Management System, ISO 22301:2012. NDIC was handed over the prestigious awards on behalf of the BSI by the British High Commissioner to Nigeria.

The journey to this historic occasion started between April and July last year when NDIC systems were subjected to rigorous assessment by BSI for the relevant global standards certifications. As a result of the BSI examinations, NDIC has made history as the first public institution in Nigeria to win the three certifications at one time.

The ISO certification is an international standard that helps organizations demonstrate excellence both in its operations and also its compliance with international best practices in achieving its mandate.

The MD/CEO of the Corporation used the award ceremony to reveal the objectives of implementing the certification project. According to him it is to ensure that the Corporation adopts best practices that will ensure achievement of its vision of being “the best Deposit Insurer in the World by 2020”.

By these achievements, the Corporation is poised to enhance the level of its operational readiness to deliver on its core mandate, while continuously improving on the service delivery to meet the expectations of its stakeholders through sound information security, efficient IT management system and a robust business continuity system.

The Corporation also strives towards improved information deliverables, availability and efficient services, effective communication as well as sound internal processes to engender public confidence in the banking system which would

Umaru Ibrahim, mni, managing director/CEO, Nigeria Deposit Insurance Corporation (NDIC).

deepen financial system stability.

Dignitaries at the award ceremony were visibly elated and proud to be associated with the Corporation. To SERVICOM boss, Mrs. Nnenna Akajameli, who graced the event held at the board room of the Corporation, NDIC is a model among public institutions worthy of emulation and projecting throughout the country. On her part, Minister of Finance Kemi Adeosun, who was represented by Director Home Finance, Mrs. Olubunmi Siyanbola, urged the NDIC to view the achievements as a spur towards achieving even greater heights.

The British High Commissioner to Nigeria, who was represented by the Lead Trade Adviser for Education Sector Opportunities, Ms. Natasha Anjekwu, remarked that the achievement of the Corporation was simply great!

While there is public perception that some public institutions in Nigeria are underperforming in the

face of exorbitant political promises, the authorities of the Nigeria Deposit Insurance Corporation (NDIC) are beating their chest on their monumental accomplishments. For instance, 1n 2017, the

The Corporation has deployed robust information technology (IT) to drive its processes, investing massively in capacity building initiatives

Corporation had a spectacular outing.

At macro level of the banking sector, depositors, of especially liquidated banks, will remember 2017 as the year of the highest, across board, liquidation dividend payouts by NDIC. In one instance, in 2017, the Corporation paid out a whopping N13.6 billion to depositors of six liquidated banks.

The amount quoted above covers depositors of six deposit money banks (DMBS), namely: African Express Bank, All States Trust Bank, City Express Bank, Hallmark Bank, Lead Bank and Metropolitan Bank.

Payment of N149.90 million as second liquidation dividend to shareholders of Rims Merchant Bank was also made last year.

Similarly, payment of cumulative sums of over N105 billion to over 442,651 depositors of closed DMBs and N2.88 billion to over 525,009 depositors of closed microfinance banks (MFBS) were made. Deposi-

tors of closed primary mortgage banks (PMBs) were paid N60 million as at September 2017.

The relentless NDIC also commenced of verification and payment of N38.90 insured sum to depositors of Jubilee Building Society Limited and N73.90 to depositors of New Heights microfinance bank in 2017. The process of verification and eventual payment of liquidation dividend payment is not always easy. It is an exercise sometimes entangled in long, complicated and -- if you like annoying -- legal tussles. Therefore NDIC had cause to celebrate the judgement against First Bank of Nigeria (FBN) Plc. in favour of depositors of Lead Merchant Bank Limited (in-liquidation) to the tune of N556.40 million at a Lagos High Court presided over

by Honourable Justice Ibrahim N. Buba in 2017.

Always alive to its mandates, the corporation strives to achieve them as much as possible. For example, as part of its oversight function, the NDIC continues to, in joint exercise with Central Bank of Nigeria (CBN), undertook risk assessment examination of all our 25 banks in 2017.

In the same period the NDIC also carried out maiden examinations on Coronation Merchant Bank and Suntrust Bank, To crown it all, the Corporation has deployed robust information technology (IT) to drive its processes, investing massively in capacity building initiatives. 53 staff have been trained and certified on the three standards including the setting up of a world class training academy and the adoption of a Continuous Performance Improvement System to track and measure performance at all levels.

In its continuous pursuit for excellence, the Corporation’s academy was recently accredited also as a training service provider for the banking industry by the Council of the Chartered Institute of Bankers of Nigeria (CIBN).

No doubt, these impressive performances of the Corporation are not unconnected with its desire to enhance the level of operational readiness to deliver on its core mandate as well as continuously improve on the delivery of processes and services to its stakeholders through greater information security, efficient IT management system and a robust business continuity system.

If these initiatives are ambitious, they underline the level of commitment of the leadership of the NDIC, whose goal is to be “the best deposit insurer in the world by 2020” is not debatable.

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In association with

Meet Blondie Okpuzor, unconventional skin care manufacturer ODINAKA ANUDU

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ntrepreneurs with high level of creativity and finesse are joining the beauty and skin care industry, introducing innovations that redefine the way business is done.

Blondie Okpuzor is one of such entrepreneurs who are not just manufacturing natural skin care products but do so from locally available raw materials.

Blondie creates soaps, lotions and other beauty and skin care products using unconventional raw materials like ‘jollof rice’.

She is the chief executive officer of BathKandy, a beauty company that creates dessertinspired beauty treats.

Blondie set up the company in December 2014 after a request from a friend to make something for her mum for Christmas.

After making the skin care products, she put the picture on her BB and there came floodgates of requests.

“I got about 50 orders,” she tells Start-Up Digest.

“I didn’t have any capital and didn’t even know what I was doing then. I was like making things on my kitchen,” she says.

Full of smiles, Blondie explains to Start-Up Digest that owing to the demand at that time, she decided to open a store in March 2015.

Blondie has an office in Lekki where she manufacturers these products herself, alongside a team of other young people.

She makes soaps, lotions, s c r u b s a n d h o m e p ro d u c t s such as candles. Her candles are unconventional and look like desserts. In fact, you are warned to keep the products out of reach of children, who can easily mistake them for cakes or desserts. There is also a caveat at the entry point, where adults are reminded that the products are not for the mouth.

The soaps, candles, lotions are regular products but they look differently, like ice cream soups.

“We have over 50 different types of soap. We infuse different things. We never had the same soap design twice. Every time you come, things look different. It is the same thing, but it looks different,” she explains.

“We have goat milk lotions, made from goat milk. We have scrubs made from garri, coffee, and chocolate,” she discloses.

“They are all manufactured

Blondie Okpuzor

here in Nigeria. I make them by hand and we infuse delicious things like oils, tea, chocolates.

“Recently we just made soap from jollof rice. We are using local ingredients to make them.

We have found that there are a lot of natural things that are there for you, but if you don’t know or use them, then you don’t get the benefits. So, we merge science with arts,” she asserts.

She says that the products are all natural and perform different functions.

“They make the skin better and improve its quality, but they also give you an experience. So, they are not just like soaps you buy at the shops for N100, but they give you an experience.”

Blondie’s packaging products come from locally recycled materials.

As a mark of expansion, she set up a second store in Abuja in 2016.

The entrepreneur believes that her products are experiential and for everybody, including men.

It was easy for Blondie to go into this business owing to her allergies.

“I am allergic to a lot of things.

There was a time in my life when

I couldn’t use the normal soaps and normal lotions. So, I had to start mixing things, like mixing shea butter with coconut oil, things you find in your house.

And they helped. Even water would irritate my skin. So, I had to create things that worked for me,” she recalls.

Since she started, the market response has been great, with orders coming from various parts of Lagos and even outside Nigeria.

The skin care producer believes that there are many people who want things that are natural, healthy and environmentally friendly, which means that opportunities in the industry are huge

“We sell internationally now.

We do have a lot of international demands and we can get across to buyers in five business days,” she states.

“We are looking more internationally. We are looking at Ghana, Kenya and South Africa, because these are the biggest beauty markets in Africa.”

B e f o re t h e e nt re p re n e u r started this business, she had worked in multinationals, including ExxonMobil.

“I have always been an entrepreneur. I always knew eventually that I was going to work for myself. I didn’t know what. Even at a younger age, I produced make-ups, and at a point, I started doing luxury and hospitality. I always liked to be busy,” she says.

“I literally stumbled upon this business,” she adds.

The skin care producer believes that there are many people who want things that are natural, healthy and environmentally friendly, which means that opportunities in the industry are huge.

Currently, there seems to be rush into the beauty and skin care business. What is driving this?

“It looks easy,” she answers.

“People think you get three things, mix them together, and you get the products. But Nigerian women are obsessed with beauty. So, there is a ready market,” she further explains.

“If you get your marketing right, you will get people to buy.

But it is easier to make people buy, but it is more difficult for you to get them work for you and keep telling other people.

“If you tell me I will be white in three days and in three days I am not white, I will not come back to you. But if you tell me that, and I turn out to be white in three days, I will tell others.

So you are creating a multitude of people that are marketing for you,” she points out.

Her business is personally funded, though she is in discussions with some interested partners.

The entrepreneur says she didn’t start the business with any money.

Though she sells her products online, she believes it is better to visit her shop in order to see, touch and smell the natural products.

Blondie says that competition is good for business, as it keeps everybody on their toes.

“We just focus on ourselves and what we do and why our customers love us. If you are

giving your customers the best products at the best price, they will stay loyal to you. We are on top of our game.”

There have been cases where employees stole the ideas of their employers. Is Blondie afraid of this?

“People have tried,” she replies.

“We have had people who have done that in the past. What we found was that you can steal an idea, but you can’t execute it like the owner. This is a gift and you can’ steal a gift. But we always have a lot of checks and balances. Just like no one has been able to copy Coca-Cola, we study how they do it and we try to do it here,” she notes.

Like all entrepreneurs in Nigeria, she faces challenges.

“In Nigeria generally, people always want the face of the business to be there. I live in Lagos and manufacture here, but people would like to see me in Abuja. Sometimes it tends to slow down the whole process,” she states.

“We found that training has to be so good that the customers do not see a need for the owner to be there.

“If you are a manufacturer, you need power, and you always need to have a generator to manufacture. Also, getting the right staff is a huge problem.”

Blomdie mentors younger entrepreneurs through her BathKandy University.

“We teach people how to make skin care products and start their own business. What we have found is that even though it is easy to start a skin care business, there are so many details that people do not have.

Social media is a great thing.

I have people who want me to mentor them and I do that.

Everything I learnt was literally trial and error, so I won’t like others to go through that.”

The entrepreneur has some pieces of advice for young entrepreneurs.

“Just do it,” she says.

“It is OK to fail. We are in a culture where we don’t celebrate failure, but I think we should celebrate failure because that is the only way to learn,” she says. “ You find some entrepreneurs at the beginning of their business looking for someone to give them $50,000. Most likely, it is not going to happen.

But if you build something to a particular level and you want someone to give you money, it becomes an easier conversation,” she concludes.

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Anike Lawal: Connecting mothers to doctors through technology Josephine Okojie

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any entrepreneurs are driven by a passion to solve societal problems. For Anike Lawal, chief operating officer of Mamalette, her driving force is to address issues with maternal health using the power of technology.

Through her online platform, Anike established a local health network for mothers in Africa by helping them find the right information needed for their daily maternal development.

Anike was inspired to establish Mamalette owing to her first experience as a mother. During her first pregnancy, the young entrepreneur was in dire need of a health platform to seek answers to questions on maternal health.

Lack of such prompted her to establish Mamalette in 2013.

“When I was pregnant with my first child, I looked for a community of other women in the same situation. Unable to find such a group, I decided to establish Ma-

Anike Lawal

malette,” Anike says.

“Today Mamalette is a thriving online network that connects pregnant women and new mothers to valuable, often life-saving information, both online and offline,” She explains.

She started her online platform with money raised from her personal savings and family

members.

Anike tells Start-Up-Digest that her online platform has continued to remain in operations owing to its adoption of innovation to drive sustainability as well as prompt responses to users’ queries and suggestions. According to her, apt responses to queries and suggestions have helped her business

grow.

“What makes us different is that we continue to innovate and listen carefully to what our users are saying,” she says.

Since starting, Mamalette online maternal health network has grown and has reached over 40,000 mothers monthly. Since inception, over a million people have visited the website.

Responding to questions on how the maternal health platform gets its doctors and other health personnel on board to provide responses to questions raised by mothers and would be mothers, she says Mamallete partners with medical practitioners and other experts.

Answering questions relating to challenges confronting her business, Anike explains that the huge infrastructural gaps have remained a major issue.

She also identifies the huge challenge involved in running a sustainable business in the country.

She tells Start-Up-Digest that her business has continued to attract partnerships which have helped the business to survive

and grow despite enormous challenges.

She laments that poor power supply has continued to impact negatively on the business, hurting the business while raising operational costs.

She calls on the Federal Government to bridge the huge infrastructural gaps, saying that it will help increase the survival rate of start-ups in the country.

The young entrepreneur urges governments at all levels to create platforms for partnerships for entrepreneurs.

“Government should create more avenues for businesses like ours to partner with relevant government bodies, increase support and funding for new and innovative businesses like ours,” she notes.

O n expansion plans, she says: “Our goals are to increase the reach and impact of our work, and our focus now is to expand our health champions program.”

On the advice she is willing to offer other entrepreneurs, Anike says, “Start small and consistently work on your idea.”

Full Gospel scales up capacity of entrepreneurs through business seminars ODINAKA ANUDU

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f you are an entrepreneur in Lagos, then you must prepare to attend the hands-on business seminars organised by the Full Gospel Business Men’s Fellowship International, South West District 3.

The Full Gospel organises annual business seminars where small and medium enterprises managers and business owners are equipped with the 21st century skills needed to compete in the ever-changing world.

This year, two seminars are coming up on June 15 and 16 at Sheraton Hotels & Towers as well as Dover Hotel simultaneously.

The theme of the seminar taking place at Dover Hotel is, ‘Building Enduring Business Through Innovation’ and it is targeted at examining why many start-ups fail within few years of establishment and why most of them do not last beyond their founders. It is meant to address the recent research showing that 56 percent of small businesses in Nigeria failed within four years.

One of the courses, ‘Innovation: Key To Enduring Modern Enterprises’ will be handled by the political economist and director at Lagos Business School, Pat Utomi.

Chioma Okoli-Chima of Oliv-

et Cloud Nigeria Limited fame will handle ‘Small Online Stores and Digital Marketing’, while Lere Baale, director at Business School Netherlands, Lagos, will anchor a course entitled, ‘Creating True Customer Advocacy’.

Similarly, there will be a session for agribusiness entrepreneurs or those intending to go into farming. Robert Asiedu of the International Institute of Tropical Agriculture (IITA), Ibadan, will anchor a class, ‘Improving Seed Systems for Enhanced Commercial Production of Staple Crops’. It is an opportunity for entrepreneurs to know some of the latest opportunities on seeds.

Also, Nana Odejayi, head of training at First City Monument Bank, will handle a course with the title, ‘Dynamics of Career Shift and Climbing the Corporate Ladder’. This seminar costs N10, 000, according to the organisers.

There will be another seminar happening at Sheraton Hotels & Towers. Themed ‘Exploring Emerging Opportunities for Growing the Local Economy’, this seminar is targeted at exposing current opportunities in the Nigerian economy. It is also focused on educating entrepreneurs on policy changes and the altering landscape in the country’s core economic sectors such as agriculture and solid minerals.

Utomi will likewise handle a course entitled, ‘Building Collaborative Enterprises for Economic Lean Times’, while Kayode Fayemi, Nigeria’s minister of solid minerals development, will anchor ‘Government Policy Guidelines for Solid Minerals Mining’.

More so, Abiodun Adedipe, management and consultant, will handle ‘Effective Leadership for Modern Enterprises’ while Oluwatoyin Ismail, head of human resources at Nigerian

Breweries, will anchor ‘Essential Workplace Communication Skills’.

The Federal Institute of Industrial Research Oshodi (FIIRO) will also feature a lecture on technology for primary agricultural processes.

Speaking at a press briefing to announce these business seminars in Lagos last Thursday, Eddy Eworo, chairman of the business seminar, told journalists that the focus was to equip members of Full Gospel and non-members

L-R: Uzo Odunukwe, national director, Full Gospel Business Men’s Fellowship(FGBMF); Eddy Eworo, chairman, Business Seminar Committee, and Vitus Udumukwu, chairman of the media committee, during a press conference announcing the seminar last Thursday in Lagos

with the new skills to make them better business men, women and career people.

Eworo said the seminars were highly subsidised because the Christian organisation was determined to make them easily accessible to the public.

“We are moving into the knowledge economy. Knowledge is what drives work. Things have changed so quickly and learning is becoming increasingly essential to success and business.

We can’t be left behind in these knowledge times, which is why we want to make these available to all,” he stated.

He added that cooperative societies had been formed during previous business seminars, adding that the Full Gospel’s sessions had impacted businesses and entrepreneurs positively.

According to Uzo Odunukwe, national director at Full Gospel, it was the SMEs that turned the United States’ economy around.

Odunukwe said foreigners would come into Nigeria to explore opportunities not seen by Nigerians, pointing out that these seminars were meant to unveil opportunities and funding options for small businesses.

“One good thing about this seminar is that you will get information directly and the faculty will tell you things free of charge,” he added.

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Start-Up Digest Akinyemi Oluwagbenga: Champion of Malay apple farming in Nigeria Akinyemi Oluwagbenga is an agronomist and entrepreneur. Akinyemi is a champion of Malay apple farming in Nigeria and has seized every opportunity to tell the story of this special specie.

In this brief encounter with Start-Up Digest Editor ODINAKA ANUDU, he explains the uses of and business opportunities in Malay apple.

Introduction alay apple is presumed to be native to Malaysia in Southeast Asia. It is commonly cultivated from Java to the Philippines and Vietnam.

It is called Malay apple in Malaysia, Jamaican apple in Jamaica and Bell apple in Nigeria.

Today, Malay apple is cultivated in other parts of Central America, including Belize, El Salvador and Costa Rica, and much more frequently in parks and gardens in Venezuela.

In Nigeria, it was introduced over fifty (50) years ago from research findings. As a tropical apple tree, it requires ample humidity, high rainfall, and no frost (cold condition). It grows quite well in many parts of Nigeria. Once these basic conditions have been met, the Malay apple trees need little else to thrive.

It can be planted in homes, parks, gardens, and established as apple plantation for commercial purposes. The Malay apple tree starts producing apples three years after planting, while the temperate apple tree produces apples from the sixth year after planting.

It produces apples two or three times per tree per

tion. It is medicinal in application and surmount fever.

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Harvest Each Malay apple must be carefully plucked from the tree and maintained in cool storage shortly thereafter. To remove from the tree, simply twist the apple’s stem.

Storage Malay apple does not store well under freezing form of refrigeration. The shelf life is prolonged under the chilling form of refrigeration at a specific temperature.

Akinyemi Oluwagbenga

year. It is prolific, producing about 1,000 apples per tree each harvest as it grows older, which is about 2,000 apples per tree in a year. The average yield is 21 - 85 kg per tree.

Malay apple tree grows vigorously on a range of soil types, from sand to heavy clay.

It tolerates moderately acid soil and reacts unfavourably to highly alkaline situations.

It is majorly of three colours - red, green and cream, with many varieties of each

type. In Nigeria, the commonest is the red type. The green colour is scanty while the cream colour may not be readily available now. It has a sweet sour taste.

It is highly medicinal and nutritious. This is established in the annals of scientific researches as contained in the science journals, health sciences and food chemistry.

The shelf life is three to four days. The apples stay between 17 and 19 days on

the trees during harvest.

Malay apple seed It is a single oblate or nearly round seed. It is light brown externally, green internally, 1.6 - 2.0 cm in width. It is polyembryonic in nature, that is, more than two seedlings could be raised from a single seed. It germinates readily in two to four weeks.

It has antibiotic activity and has some soothing effects on blood pressure and respira-

Medicinal Uses Malayans apply the powder of dried leaves on a cracked tongue. A preparation of the root is a remedy for itching, and the root bark is useful against dysentery.

The juice of the crushed leaxes is applied as a lotion and is added to baths. In Brazil, various parts of the plants are used as remedies for constipation, diabetes, coughs, and headache, among others.

Seeded fruits, seeds, bark and leaves have shown antibiotic activity and have some effects on blood pressure and respiration.

Business Opportunities Around 2006, Malay apple was sold for N5, regardless

of the size then. Today, the small size is N50; the big size is N100, while the jumbo size is N150 each.

As of 2010, a seed was sold for N50 each, but now, each seed is N100. The germinated seeds are between three to five weeks after planting at the pre - nursery stage. The cost of each germinated seed is N150.

There is a ready market for the sale of the seedlings especially from March to December each year.

Why Malay apple farming?

Malay apple helps you to consume fresh apples for healthy living without the use of any chemical preservative. The apples are highly medicinal.

Various parts are used as remedies for overcoming different health challenges.

Malay apple tree produces much more apples than the temperate apple tree. It can reduce Nigeria’s import bill on apples from South Africa, Europe and Asia.

There are wealth creation opportunities for the people in the areas of production, processing into valuable products for local consumption and export, information and internet marketing. It creates job opportunities for graduates of agriculture and other relevant disciples.

LACIAC proffers solutions to business financing, contract disputes …as panellists urge policy consistency ODINAKA ANUDU

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he Lagos Chamber of Commerce International Arbitration Centre [L ACIAC ] has proffered sustainable solutions to business financing, providing alternative dispute resolution mechanisms for investors.

At a roundtable held by LACIAC in conjunction with Yusuf Ali & Co and Perchstone & Graeys, investors harped on the need for Nigeria to remove bottlenecks to capital access while urging reforms that would ensure that business owners get justice within the shortest possible time.

“How long does it take for litigation and judgement to be given? If I have put in a huge amount of money and there is a dispute leading us to court,

I do not want to spend all the time going to the Supreme Court,” Elizabeth Ekpenyong, partner, Perchstone & Graeys, said during the panel discussion.

“Another issue is, how easy do we enforce contracts? Even if there is a judgement, how easy is it to enforce it?” Ekpenyong asked.

She pointed out that it was necessary for investors to a clear picture of return on investment, urging the government to ensure that changes in policies were minimal.

“What public institutions are supporting investors?

Who are the people there?” she asked.

She explained that it was not right for the government to shift policies after investors had pumped money into different sectors, stressing the need for transparency in every

process.

Navjeet Virk, partner at Pinsent Masons, London, stated that it was necessary for the Nigerian government to reduce the requirements for accessing some of the avail-

able funds.

“One of the issues investors face is uncertainties in government regulations and policies. If investors sign a contract for 25 years, if there is a change in government, what

Babatunde Ruwase, president, Lagos Chamber of Commerce and Industry (LCCI), presenting a plaque to Bukola Saraki, Senate president, during a courtesy visit by LCCI to the National Assembly recently.

happens?” Virk asked.

“From the investors’ perspective, I am not saying that laws should not change, as far as the playing field remains the same. If we agreed that in X years you would pay me X amount of money, this should not change even if laws changed,” she argued.

She called on the government to reduce conditionality attached to many funds sitting in banks to ensure small and medium businesses have access to finance.

The participants agreed that Alternative Dispute Resolution [ADR] was the best for a developing economy like Nigeria.

“Settling commercial disputes through the courts processes can be frustrating, tortuous and time consuming. This is why the idea of providing an ADR platform

was conceived by the chamber, few years ago. Our belief is that investors will be more comfortable with ADR than the conventional court processes,” said Babtunde Paul Ruwase, president of LCCI, represented by Hakeem Ogunniran, council member of the chamber.

“LACIAC’s success is hinged on its ability to develop a reputation as a world-class arbitration centre. I have been assured by the Chairman, Board of Governors, Babatunde Faghohunlu, SAN that this would be done,” Ruwase said.

Funmi Iyayi, CEO of LACIAC, said, “We provide the background to allow businesses to thrive and ensure that transactions are enforceable and the parties are able to realise the details of the transactions.”

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How to help different generations share their wisdom at work CHIP CONLEY

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ight now, c o m mencement speeches are being given, quoted, lauded and judged. Not every speaker will knock it out of the park, but all have the same goal: to impart some wisdom that will hopefully inspire the next generation.

It’s great to receive sage advice on this banner day signaling “adulthood.” But when else do we hear wise adages, aphorisms, and axioms?

Shouldn’t we make more room for such guidance and reflection during our working years? Ask yourself: When was the last time someone seriously “dropped some knowledge” on you?

Something that really grabbed your attention?

Your imagination?

We need a new means

of intergenerational wisdom sharing. Speeches are one way to do this, but I think companies

can create many other avenues to encourage and facilitate the exchange of wisdom.

Here are a few steps you can take to galvanize gravitas on a daily basis at work: — OFFER MIDMORNING TALKS. Each day, give one employee a platform to share their wisdom, learning, or point of view.

— RECOGNIZE YOUR WISDOM WORKERS. You may know the sage souls who offer quiet, invisible productivity to your organization. But what about identifying and publicly recognizing them, so they can share that wisdom with a larger audience in the company?

—DEVELOP A MUTUAL MENTORING PROGRAM. Building bridges between generations is most effective when it’s baked into

the company’s values, culture0 and processes.

I’ve found that mutual mentoring — where I’m learning from a millennial about one topic and they’re learning from me on a different one — accelerates wisdom sharing across an organization.

— CREATE AN EMPLOYEE RESOURCE GROUP FOCUSED ON WISDOM. Approximately 90% of Fortune 500 companies have employee resource groups, but only a tiny fraction have an affinity group expressly serving their older demographic.

(Chip Conley is a hospitality CEO veteran, and the strategic advisor for hospitality and leadership at Airbnb.)

5 questions new working parents should ask themselves JACKIE COLEMAN AND JOHN COLEMAN

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hen we decided to start a family years ago, our lives were very different. We slept in. We had more free time. We had different jobs and different working hours. And based on that personal and professional experience, we encourage working couples who are new to parenting or are considering becoming parents to start the family conversation by asking five questions.

1. WHAT DOES EACH PERSON ACTUALLY WANT? Men and women now often have more freedom to choose to work inside or outside the home. Many women would love to pursue their careers

but feel pressure to stay at home with children. And men still are often assumed to be better suited to working outside the home, rather than to staying home to raise a family. What do each of you really want? Ask the question frequently, as the answer may change over time.

2. WHAT ARE THE FINANCIAL NEEDS AND CONSTRAINTS? The costs of rearing children are real and meaningful. Each family’s financial situation is different, but a clear-eyed evaluation of that situation is critical in order for working parents to properly evaluate the choices they make.

3. WHAT ROLES WILL EACH PERSON PLAY? It is helpful to be clear about who will be responsible for what, while noting that you’ll likely also need to be flexible and step

infinitely more difficult. It is important to keep your relationship and each individual’s mental, physical and spiritual health prioritized over all else — including over kids and jobs.

The decision to become a parent is not for everyone. If you and your partner are considering having children or are thinking through your current balance of work and parenting, we encourage you to have these five conversations before you embark on the journey.

in for one another when necessary. While couples always need to be open to flexibility and helping one another, outlining a mutually understood view of household roles can be extraordinarily helpful in minimizing conflict.

4. WHO’S LOSING WHEN? Jobs sometimes require moves. Financial needs sometimes require jobs that are not fun. Be honest about who is losing in decisions that require tough choices, and make sure it’s not the same person every

time.

5. HOW CAN WE STAY CLOSE TO EACH OTHER? While juggling work and kids, it can be easy to neglect your spouse or partner. And if the relationship is failing or festering, both work and kids become

(C) (2017) Harvard Business Review. Distributed by New York Times Syndicate

(Jackie Coleman is a former marriage counselor and most recently worked on education programs for the state of Georgia. John Coleman is a co-author of the book, “Passion & Purpose: Stories from the Best and Brightest Young Business Leaders.”)

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Live @ The Stock Exchange Stock investors lost over N400bn last week ... NASD USI sheds 1.63% Stories by Iheanyi Nwachukwu

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he Nigerian Stock Exchange (NSE) All-Share Index (ASI) depreciated by 2.84percent to close last trading week ended May 25, 2018 at 39,323.62 point from 40,472.45 the preceding week. Also, the equities market capitalisation declined to N14.244trillion from a high of N14.660 trillion, representing N416billion loss.

Fourteen (14) equities

appreciated in price during the review week, lower than twenty (20) in the preceding trading week. Sixty-one (61) equities depreciated in price, higher than fifty-four (54) equities in the preceding week. Ninety-four (94) equities remained unchanged lower than ninetyfive (95) equities recorded in the preceding week.

The stock market recorded total turnover of 1.372 billion shares worth N16.022 billion in 21,099 deals in contrast to a total of 1.457 billion shares valued at N23.666 billion that exchanged hands the preced-

ing week in 19,674 deals.

The Financial Services Industry (measured by volume) led last week activity chart with 1.010 billion shares valued at N8.670 billion traded in 12,049 deals; thus contributing 73.62percent and 54.11percent to the total equity turnover volume and value respectively.

The Services Industry followed with 107.246 million shares worth N229.715 million in 712 deals; and Consumer Goods Industry with a turnover of 71.946 million shares worth N5.506 billion in 3,818 deals.

Trading in the top three

equities–Zenith Bank International Plc, African Alliance Insurance Company Plc and Ikeja Hotel Plc (measured by volume) accounted for 276.876 million shares worth N2.939 billion in 2,112 deals, contributing 20.18percent and 18.35percent to the total equity turnover volume and value respectively.

The NASD OTC market ended last week with a decrease in market metrics, as the NASD Unlisted Securities Index (USI) decreased by 1.63percent to close at 664.38 points (as against 675.43 points the preced-

S&P affirms Stanbic IBTC Bank ‘B-B’ rating, says outlook stable

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&P Global Ratings last week affirmed its ‘B/B’ long- and short-term issuer credit ratings on Nigeriabased Stanbic IBTC Bank Plc. The outlook is stable.

At the same time, S&P Global Ratings affirmed its ‘ngBBB/ngA-2’ longand short-term Nigeria national scale ratings on the bank.

“Our ratings on Stanbic IBTC reflect the creditworthiness of the entire StanbicIBTC group because we consider the bank to be the core component of the group.In addition, we consider Stanbic IBTC to be strategically important to South Africa’s Standard Bank Group (SBG) Ltd. and we therefore factor in one notch of group support above Stanbic IBTC’s unsupported group credit profile (GCP), which we assess at ‘b-’.”, according to S&P Global Ratings.

S&P Global Ratings believes Stanbic IBTC benefits from being stra-

tegically important to SBG; the latter could potentially provide Stanbic IBTC with extraordinary capital, risk-transfer, and liquidity support if needed. However, the ratings on Stanbic IBTC are capped by our foreign currency sovereign credit ratings on Nigeria. “We do not rate Nigerian banks above the sovereign because of the likely direct and indirect influence of sovereign distress on their operations, including their ability to service foreign currency obligations.”

Stanbic IBTC operates in the mid-tier of the competitive Nigerian banking sector, and its business position benefits from its affiliation to SBG, as well as its brand recognition and segment diversification.

Its corporate and investment banking division accounted for 53.5percent of group revenues in

2017. Its wealth management business accounted for 19percent of group revenues in the same period. These two divisions were the main contributors to the group’s profitability, resulting in a strong return on equity (ROE) of 28.9percent at year-end 2017. We expect future profitability to compare well to top-tier Nigerian banks’ with an ROE at around 20percent22percent over the next two years.

“In contrast, Stanbic’s retail franchise profitability lags behind the other two segments owing to high impairment charges and a weak cost-to-income ratio. That said, it remains central to the bank’s long-term strategy and focuses on non-interest income as opposed to pure loan growth. It does this by offering enhanced client services via a transactional platform, which will also help attract low cost deposits.

South African money manager intends to start cryptocurrency exchange in Q3

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outh African money manager Sygnia Limited said it intends to start a cryptocurrency exchange in the third quarter (Q3) of this year to tap growing interest from investors in the country in digital currencies, according to Bloomberg report. For instance, the increase in price of Bitcoin was driven by investors anxious to get in on the best-established cryptocurrency as new trading opportunities nudged it toward the mainstream,

but escalating regulatory threats from India, China, South Korea and elsewhere contributed to recent slump. Sygnia said its exchange will follow the regulatory framework for cryptocurrency trading platforms registered in the state of New York.

To be known as SygniaCoin, the exchange will “offer investors a secure trading and execution platform backed by an international infrastructure, well-designed custody and integration with standard

savings products,” the Cape Town-based company said.

Sygnia, which has 181 billion rand ($14.5 billion) under management, also plans a fund that will invest in a range of cryptocurrencies, it said in an six-month trading statement Friday.

Digital currencies such as Bitcoin and Ethereum are becoming increasingly popular, and the South African central bank has started a financial-technology unit to review its position on private cryptocurrencies and to help draw up policies.

ing Friday). Consequently, total market capitalisation declined by 1.63percent last week to close lower at N449.61billion compared to N457.08billion preceding Friday.

The NASD launched its proprietary trading platform (BITs) on April 9, 2018 to provide Authorised Traders perform trades more conveniently on behalf of their brokerage clients. To further enhance service delivery and client satisfaction, NASD conducts regular modifications to improve the system, to promote transparency and market

integrity.

In this regard, NASD has created a Trade Alert Notifications Service into the BITS system. This service will notify all investors on the OTC platform with timely and accurate information on and deals consummated on their brokerage account(s). Investors with portfolios trading under the NASD OTC Market would receive daily SMS notifications at the close of trade. Trade Alerts will only be sent to an investor’s registered mobile number with The Central Securities Clearing System PLC (CSCS) as from Friday 1 June, 2018.

44 BUSINESS DAY NEWS

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Monday 28 May 2018

Nigerians imported over 1.2m vehicles via seaports in 5yrs AMAKA ANAGOR-EWUZIE

N L-R: Segun Ajibola, immediate past president, CIBN; Erediauwa Agbhatise, executive director, operations, NDIC, and Abubakar Suleiman, managing director/CEO, Sterling Bank plc, at the FITC Thought Leadership Discussion Series in Lagos.

FG’s plan to recapitalise DisCos has corporate governance concerns ISAAC ANYAOGU

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ith shortfalls in the electricity market at over N1 trillion, the need to rescue the electricity sector has never been more acute. The challenge however is that the distribution companies (DisCos), who collect on behalf of everyone else in the value chain, are inefficient.

This is why the Federal Government has been considering options to recapitalise the DisCos, who are veering dangerously close to bankruptcy. The challenge is ‘no option appears without pitfalls.’

For the past two months, the Federal Government has been considering raising its stakes in the DisCos to 60 percent from the current 40 percent to which it hopes to offer to interested investors, since it cannot own a majority shares in the DisCos after privatisation.

But that plan was scuttled after government was unsuccessful in appointing two non-executive directors on the board of the DisCos, who

could push the plan. The DisCos argued that the move was illegal as the volume of shares held on behalf of government by the Bureau of Public Enterprise (BPE) and the Ministry of Finance (MOFI) do not empower it to appoint new directors without recourse to shareholders.

The shareholders agreement also said that the number of directors in the Disco shall be no more than seven; the investors will nominate six directors, while BPE and MOFI shall nominate one.

The DisCos may tolerate incompetent engineers, owe everyone else in the value chain, but they don’t economise on their lawyers!

The government soon shelved the plans. However, the Power Sector Recovery Programme (PSRP) recommends recapitalisation of the DisCos as a measure to put the power sector on the path of financial viability.

It suggested using the Central Bank of Nigeria to facilitate renegotiation of the shareholder loans outstanding and redenomination of the loans from dollars to naira in line with the DisCos revenue profile.

Another option is the potential dilution of both the Federal Government’s and privately held stakes, which will help bring some stability to DisCos balance sheet. The government has not initiated a discussion on diluting its own shares Meanwhile, the troubled balance sheet of the DisCos may stall either option.

Abuja Electric, Port Harcourt DisCo and Enugu DisCos are struggling to keep a healthy balance sheet. Yola DisCo has been relinquished to the government by the core investors.

BusinessDay’s examination of the financial statements of seven DisCos in February indicates reported losses of over N196.23 billion to end the 2016 financial year.

Analysts have urged government to dilute the shares of the core investors in the DisCos using the funding clause in their performance agreement as a way of resolving the current shortfalls in the electricity market.

“The Federal Government should rely on the funding clause in the Shareholders Agreement, which allows the BPE as a 40 percent share-

Despite price recovery, cost discipline remains key driver in oil, gas industry FRANK UZUEGBUNAM

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he oil and gas industry has survived some tough years due to weak demand and low prices. While the low price lasted, oil and gas companies aggressively slashed capital expenditure (CAPEX) budgets, bringing drillingactivitytoafractionofwhat it was at its peak.

Evidently, prices are beginning to recover. Crude oil futures recently hit a near three-anda-half-year high, bolstered by geopolitical risk with July Brent crude futures trading as high as $80.18 per barrel.

“Supply overwhelmed the market but the Organisation of Petroleum Exporting Countries (OPEC) cooperation with nonOPEC oil producing countries helpedtorescuethemarketwhich marked the beginning of oil price recovery,” Ambrose Ojiako, chairman, Seplat Petroleum Develop-

ment Company, said at a recent breakfast meeting on “Emerging trendsinoilandgassector”organised by Olaniwun Ajayi Law firm.

OPEC’s “declaration of cooperation” with a group of nonOPEC oil producers did speed up the rebalancing of the international oil market and accelerated the stabilisation of the global oil market. The oil cartel, which along with 10 non-OPEC allies ledbyRussia,cutabout1.8million barrels per day production, which helped to draw down crude oil inventory levels.

As the oil and gas industry strengthens, with eyes on rising commodity prices, maintaining cost discipline remains a critical factor considering the profligacy that has always been associated with high oil prices in the past.

“There were a lot of financial indiscipline during the past boom period. Projects that needed 10year loan were given 5-year dura-

tion loan. There was a huge compromise of balance sheet such that when the bust happened, the impact was not restricted to the oil and gas sector,” Hakeem Adedeji, executive director at HydroCarbon Advisors, said.

Thoughinthepastthreeyears, oil and gas companies learned to live with the lower prices, a tighter capital spending program and a much stricter cost discipline, however, there is always that temptation to reset costs amidst the rising crude oil prices.

“There are still limited capital available locally, thus, increasing cost discipline cannot be over emphasised. I agree that there is a shifting dynamics with focus on leveraging producing assets and focusing one core business, but this is the age of prudence,” Rolake Akinkugbe-Filani, head, energy and natural resources at FBN Quest Merchant Bank, said.

holder in the DisCos to inject capital into the DisCos in the event that there is a requirement for further funding, which the core investor is unable to provide. The clause allows the BPE to dilute Core Investors equity in the DisCo by such funding,” Wesley Omonfoman, CEO of New Hampshire Capital Investments Limited, an energyconsulting firm, told BusinessDay last year.

“The dilution mechanism leverages on the huge liabilities of the DisCos to the Nigerian Bulk Electricity Trader and the Market Operator. In simple terms, the mechanism for dilution is for the BPE, acting for the Federal Government, to guarantee the DisCos obligations to NBET (under the vesting contracts) and the CBN (under the N213bn NEMSF and the N701bn power sector payment assurance guarantee).

“Where DisCos fail to meet their payment obligations to NBET and the CBN, NBET should call the BPE guarantee. Then the BPE should then converts the called portion of the guarantee to shareholders funding for DisCos and dilute the core investors.”

igerian car dealers, including importers, brought in a total of 1,216,131 vehicles into the country through the seaports in the last five years, 2012 to 2017, a recent data released by National Bureau of Statistics (NBS), show.

A breakdown of the NBS data show that in 2012, a total of 269,386 units of vehicles were imported through the ports while the volume grew by 4.02 percent to 280,226 in 2013.

In 2014, the volume imported through the seaports decreased by 11.52 percent to hit 247,932.

This was largely due to the commencement of the 2014 National Automotive Policy, which imposed new tariff regime of 70 percent (35% duty and 35% levy) on vehicles that formerly pay 20 percent duty and 2 percent levy. As a result, the volume of cars imported through seaports dropped.

The aim of the 2014 National Automotive Policy, according to the Federal Government, was to ensure the survival, growth of the Nigerian automotive industry using local, human and material resources.

It also aims at enhancing the industry’s contribution to the national economy, especially in the areas of encouraging the growth of automobile assembling plants, job and wealth creation and putting Nigeria in the league of successful automobile producers in the world.

The volume of imported vehicles recorded a further decrease of 46.76 percent to hit 131,994 in 2015, while in 2016, the volume continued to drop as 105,189 number of vehicles were imported during the period under review.

The NBS data further record a sharp recovery in 2017, as the volume of imported vehicles grew by 72.46 percent to hit 181,404.

Industry analysts, who spoke with BusinessDay, at-

tributed the slight recovery in volume of imported vehicles to the Federal Government’s ban on importation of vehicles through land borders.

They say that, though, Nigerian importers have started making efforts to bring in their vehicles through the ports, larger volume of vehicles are being smuggled into Nigerian market through the land borders due to high import duty.

Emma Nwabunwanne, a Lagos-based importer, who pleaded with the Federal Government to consider slashing the 70 percent import duty and levy charged on vehicles that come through the ports, said slashing the duty would automatically make smuggling of vehicles through the land borders unattractive.

“More Nigerian importers would continue to patronise ports in the neighbouring countries like Cotonou, where it is cheaper to buy and smuggle vehicles into Nigerian market.

But reducing the tariff payable at the ports will put the act to rest,” he said.

Jonathan Nicole, president, Shippers Association of Lagos, who lamented that the import tariff on vehicles were very high, said high import duty had compelled Nigerian car dealers to rely on bringing low grade and dented vehicles that allow for a discounted tariff.

“Majority of second-hand vehicles, especially the exotic cars that the Nigeria Customs Service (NCS) charge millions of naira as import duty, are brought into Nigerian markets in a dented form, to allow the dealers pay discounted tariff, put needs little money to refurbish the vehicle before selling to the final user,” he said.

According to Nicole, though this development now shaped the culture of vehicle importation in Nigeria, however, it has also made it difficult for car users to buy second-hand cars that are not durable, not easy to manage and not affordable in its real sense.

‘Price competition squeezing ground handling business in Nigeria’ IFEOMA OKEKE

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ompetition between the two major handling companiesinNigeriahas ledtounder-pricingofthe services they render to airlines and other clients, and this has affected thegrowthofthebusinessadversely, Basil Agboarumi, acting managing director of SAHCOL, says.

Agboarumi made this known last week at the League of Airports and Aviation Correspondents (LAAC)interactivegatewayforum where he reiterated that ground handlerswerechargingbelowpar due to the unnecessary price war.

Henotedthatbusinesseswere looking for common grounds to pull resources as it was done in otherclimes,andcalledforregulators to standardise pricing of the services rendered.

“Cooperation is for the best of the industry; we as a company have identified cooperation as

the tonic to building the industry.

We will continue to do our best, take the right step and initiative to ensure that what can give us the kind of aviation that we desire in the future is done. There must come to a point whereby we will definitely need ourselves.

“In other parts of the world, ground handling companies are pooling resources together; it is for us to get to that stage of maturity. Even, airlines are cooperating now. When you have airlines in various parts of the world, they complement each other in passenger and cargo operations. We will have better aviation industry oncewebegintolookattheindustry from that perspective,” he said.

On the price war currently rocking the handling companies, he said for years despite the increase in exchange of the dollar to naira, the handling rates had remained the same even though airlines were currently changing

their fares to adjust to trend.

“Let us look at the banking industry,forinstance;thereisaregulatorthatregulatestheiractivities.The handlingrateswepayinNigeriahas not changed over the years despite the fall in the value of the naira to dollars and other major currencies. The airlines have consistently changed their fares, but we have notdonethatforsomanyyears.We still operate with the same tariff that we have been operating up to the time nairawas N165to adollar,and regrettablytoday,theratehasgrown more than double.

“What it costs us to buy a ground handling equipment todayhasgrownastronomically.Itis not that the cost has changed, but whereby we were spending one naira to buy a ground handling equipment before, by the time we source for foreign exchange, you will see that it has gone to about N3. That’s the situation we have found ourselves”.

Monday 28 May 2018

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Airlines face high cost of maintenance, aviation fuel on ageing aircraft IFEOMA OKEKE

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redominance of ageing aircraft by domestic airlinesoperatinginNigeria has led to high cost of aircraftmaintenanceand aviationfuel(JETA1)consumption.

Expertsintheaviationsectorsay aside the absence of aircraft maintenance facility in the country and high exchange rate, ageing aircraft is a contributory factor to high cost of aircraft maintenance.

Currently, Medview is facing difficultiesincarryingoutitsscheduled operations over insufficient aircraft. Most of its aircraft are out of the country on maintenance, while First Nation’s operation has beensuspendedasaresultofinsufficient aircraft.

“There is empirical evidence thatsuggeststhatthereisupto30% differenceinmaintenancecostbetween new and old aircraft. Newer aircraftaremorefuel-efficientthan older ones. The older an aircraft gets, the more intensive maintenanceisrequiredandthereforethe moreexpensiveitbecomestokeep themservicedandairworthy,”Obi Mbanuzuo,accountablemanager of Dana Air, told BusinessDay. Mbanuzuo explained that domestic airlines use older airplanes because of financing, and “due to the inability of banks and lending houses to provide long-term loans which are required to ac-

quire newer aircraft, airlines go for cheaper used versions which they canfinancethemselveswithoutthe help of banks.

“For example, a brand new B737-800 costs up to $90 million and Western airlines pay this over 10 to 15 years with the help of leasing and finance houses.

Conversely, a used B737-300 costs about $4 million.”

Dung Pam, Nigeria Aviation Safety Initiative (NASI) coordinator, told BusinessDay that since fuel costs present approximately 15 to 25% of operating cost, “fuel efficiency comes high on the list of improvements to be expected from each new model of engines and aeroplanes.” Therefore, new types of aircraft come fitted with winglets, composite materials and morefuelefficientengines,andare definitely much more fuel efficient than older versions.

“The initial acquisition cost of acquisition for these old aircraft is cheaper. However, they are extremely expensive to run and maintainappropriately.Inthelong term, this proved to be a very bad economic decision as the airlines can barely carry out up to three C check cycles (four and half years) before the aircraft is abandoned duetotheprohibitivecostofmaintenance.

“This explains why most of our airlineshaveashortlifeexpectancy of about five years,” Pam said.

A few years ago, the government imposed a 22-year-old ban onanyaircraftthatmustbebrought into the country. The move, according to NCAA, was to ensure that Nigeria does not become a dumping ground for old aircraft.

BusinessDay’s checks show that apart from Arik Air, with the youngest airplanes of an average age of less than eight years, other airlinesparadeaircraftbetweenthe ages of 12 to 18 years.

According to Boeing, a major aircraftmanufacturer,manyfactors drive the demand for replacement of old aircraft. Age, according to the corporation, is one, but other factors include relative airplane economics, maintenance requirements and overall market environment. It said in recent years, high fuel costs have played a larger role in influencing decisions to remove airplanes from service.

Roy Ukpebo Ilegbodu, CEO, Arik Air said that during C-checks, airplanes are basically stripped and almost rebuilt. It cost money; the technicians are paid with foreign exchange.Anywherefrom$500,000 to$1millioniswhatairlinesneedfor a C-check.

“When the airplane is going for a C-check, depending on the age of that aircraft, there are some things that the manufacturers will look at.

For instance an airplane that has flownfor1000hours,therearethings they expect. So, based on that, the

checks will be done.

“Asairlinescarryoutthechecks, you may find out more than what the manufacturers will have recommended. You find things like corrosion for airplanes that have operated in our region because of the moisture. When you find corrosion in an airplane, the cost of repair sometimes will double. But thegoodthingisthatArik’sairplanes are very new, so you hardly will find corrosion in airplanes that are less than 10years old,” Ilegbodu added.

However, Igwe Francis, the Public Relations Officer, National Association of Aircraft Pilots and Engineers said that what matters is that aircraft are maintained to a minimum approval standard, and notnecessarilytheageoftheaircraft.

Afewyearsago,thegovernment imposed a 22-year-old ban on any aircraft that must be brought into the country. The move, according to Nigeria Civil Aviation Authority (NCAA) was to ensure that Nigeria does not become a dumping ground for old aircraft.

“TheNCAAhasalwaysassisted operators to acquire new fleet. This was put in place through the Cape Town Convention, which Nigeria signed many years ago. This was what Arik benefited from. Under the programme, the NCAA serves as guarantor to the operator. I can assureyouthatthe22-yearagelimit on aircraft brought into the country still stands,” a source in NCAA said.

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FG recovers N13.8bn as whistleblowers target companies evading tax

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ederal Government has beenabletorecoverN13.8 billion from corporates evading taxes due to tips receivedfromwhistleblower,minister of finance, Kemi Adeosun, said Sunday evening.

Citing the whistleblower policy as one of the success stories of the Buhari administration, she disclosed, “Since its introduction, we have had 8,373 communications out of which 1,231 are whistle-blowing tips. We have carried out 791 investigations and completed 534 of those investigations. Ten are presently under prosecution and we have secured four convictions.

“Under the Whistleblower Policy, the Federal Government has recovered directly, as a result of tips received from whistleblowers, the sum of N7.8 billion, $378 million and GBP27,800. We pay the whistleblowers in batches. I want to speak a little bit about this month’s batch.’”

She disclosed that for the first time, the Federal Government is paying out N439 million to about 14 whistleblowers who gave specific tips on tax evaders.

“From the specific information provided on companies which underpaid their taxes, we were able to go in and communicate with the companies.

We have been able to recover the sum of N13.8 billion as a result of those specific tips and so we are paying these set of whistleblowers this month. This is different for us because most of the whistleblowers in the past have been about stolen money.

“With the extension of the Voluntary Assets and Income Declaration Scheme (VAIDS), we are getting more tips on tax evasion which of course is a crime against us all. This is just the new trend that we are seeing and we thought it is worth bringing to your attention. The whistleblowers on tax evasion are being paid

this month (May 2018); this is the first time we have had such numbers where we have been able to conclude either investigation or communication with the companies. The companies have actually paid the money to the Federal Inland Revenue Service.

We are paying these whistle blowers their rewards.”

The minister of finance assured that the government was going to continue its focus on tax collections.

“The indication we have so far is that the strategy and efforts of this Government in that area are working. We have increasing numberofpeopleandcompanies payingtherighttaxes.Wehavenot introduced any new taxes. Just to restate, these are taxes that people should have paid and these are companies and businesses that are making money in Nigeria.

So, I think it is only fair that they pay part of that to help fund the Nigerian economy.

“There is a general awareness that the government is very serious on this issue of tax and we will continue to focus on it. This is the only way we can provide sustainable revenues and development especially education, health and job creation. We need money but we cannot rely only on oil.

“Today, it is over $72 per barrel but there was a time it was $28 per barrel. We know that oil price could go up and down but it is very important that we also make sure that those who are supposed to pay their taxes do so in full and on time.

“The Whistleblower Unit of the Federal Ministry of Finance went on a study tour. They were invited by the United Kingdom government and they visited various agencies in the UK Serious Fraud Office, the Commonwealth Secretariat, Her Majesty Revenue and Customs and the Financial Control Authority, among others.”

ATSSSAN, NUATE’s threats to MMA2, acts of lawlessness – Bi-Courtney IFEOMA OKEKE

B Razaq Ayinla, Southwest office head, BusinessDay Media (2nd r) presenting a copy of BusinessDay newspaper to Muideen Akorede, senior special assistant, media and communications to Governor Abdulfatah Ahmed in Ilorin ahead of 2018 BusinessDay States Competitiveness and Good Governance Awards. While Teliat Sule, senior research analyst (l) and Sikirat Shehu, Kwara State correspondent (r) watch.

BDCs to mandatorily access FX from CBN window thrice weekly ... as CBN orders banks to sell FX to travellers across the counter HOPE MOSES-ASHIKE & ONYINYE NWACHUKWU, Abuja

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n a move that will hopefully create more foreign exchange liquidity in the market and uplift the naira, the Central Bank of Nigeria (CBN) has mandated Bureau De Changes (BDCs) operators to access forex from its windows at lest three times a week.

Any BDC that fails this directive will face sanctions, and risks losing its operating licence, according to the new order that also targets to clampdown on FX hoarding.

“All BDCs shall hence-

forth access forex from the CBN on Mondays, Wednesdays and Fridays. It is compulsory that all BDCs access forex at least three times weekly,” the CBN said in a mailed statement at the weekend, insisting that compliance is compulsory.

“Any BDC that fails to access the forex window at least three times weekly shall have its licence reviewed by the CBN,” it stated.

In the new directive, the CBN also mandated commercial lenders to henceforth sell forex to travellers across the counter as long

as they present valid documents that prove their eligibility.

T h e d i re c t i v e c o m e s four days after CBN warned banks against refusing to sell the Business Travel Allowance (BTA) and Pers ona l T ravel A l l owanc e (PTA) to customers, and also for pilgrimage.

The CBN said its actions were based on reliable information, and had asked intending pilgrims and other customers that faced difficulties from their banks to secure BTA/PTA to report to it with immediate effect.

“All Deposit Money Banks (DMBs) are mandated to buy and sell foreign exchange to travellers (both customers and non-customers) upon presentation of relevant, valid travel documents such as visa and ticket Over The Counter,” the CBN further noted in the new statement signed by Isaac Okoroafor, its acting director, corporate communications.

“All travellers shall be attended to immediately at the banks’ counters. Any contravention shall be sanctioned by the CBN,” the statement noted further.

i-Courtney Aviation Services Limited (BASL), operator of the Murtala Muhammed Airport Terminal Two (MMA2), has described as acts of lawlessness the threats by two of the unions in the aviation sector.

The Air Transport Services Senior Staff Association of Nigeria (ATSSSAN) and the National Union of Air Transport Employees (NUATE) have threatened to disrupt operations at MMA2 following the termination of services of some members of staff.

A statement by the company in Lagos on Sunday said: “The attention of Bi-Courtney Aviation Services Limited (BASL), operators of the Murtala Muhammed Airport Terminal Two (MMA2) has been drawn to the activities of two of the unions in the aviation industry namely, the ATSSSAN and the NUATE, who have threatened to disrupt operations of our terminal.

“We are taken aback by their threat to further display acts of lawlessness against our organisation.

“It would be recalled that when the General Aviation Terminal (GAT) was handed over to our company in accordance with the Concession Agreement executed between our company, the Federal Government of Ni-

geria and the Federal Airports Authority of Nigeria (FAAN), these two unions physically prevented us from exercising our constitutional and legal right of ownership of the terminal.

“Subsequent to this handover, the courts have confirmed that the terminal belongs to our company.

“It is interesting to note that the two unions, NUATE and ATSSSAN, actually challenged our ownership of the terminal in court in Appeal No. CA/A/141/M/09. The case was decided in our favour in the Court of Appeal on the 16th day of October 2010. Their case was dismissed for lacking any merit whatsoever.”

The company explained further that sequel to this, the courts had awarded damages of N132 billion in favour of our company for the liability we suffered up to 2009. As of now, the damage is in excess of N200 billion. The same unions, in continuation of their desire to sabotage the operation of the laws of the Federal Republic of Nigeria, are now threatening to disrupt our operations.

According to the company, “We will do everything within the laws of Nigeria to enforce our right to peaceful existence and to operate our business without any interference from meddlesome interlopers.”

46 BUSINESS DAY NEWS Ibeto Cement shrugs off warning signs...

Continued from page 1

ment maker- Ibeto- said it inked a $850 million (N306 billion) deal with the purported US-based private equity firm.

Ibeto Cement, in a statement released on Milost’s website, is said to have executed a binding MESA (Milost Equity Subscription Agreement) with Milost Global Inc., for a $850 million financing, of which $500 million is in equity and $350 million debt.

As part of the deal, Ibeto is said to have started the process of going public in a reverse merger in the United States in efforts to become a publicly traded company.

“On Friday May, 25 the Nigerian Dollar Billionaire Chief Cletus Ibeto (Owner of Ibeto Cement) will personally consummate the acquisition of a publicly traded Company that he will use to reverse the assets of his cement business in America, the final acquisition and definitive agreements have already been executed,” the statement read.

As Ibeto carries on with its newly sealed Milost deal, Japaul has continued to lick its wounds, as the free fall in its share price has worsened since announcement it was axing its deal with Milost on May 9.

Japaul’s share price plunged a further 7.69 percent Friday, according to Bloomberg data to 24 kobo, putting it in worse position than the 33 kobo it traded at before it was enveloped by the Milost controversy.

Unity Bank, a tier-two commercial lender, and mortgage bank- Aso Savings and Loans- have since distanced themselves from deals with Milost, with the former pulling the plug on a $1 billion financing agreement, while the latter (Aso Savings) insists a deal was never in place.

All eyes have now turned to the companies that are following through on their deals with Milost.

According to the public announcements that were made by Milost and the affected companies at the time an agreement was reached, real estate firms- Femab properties and Prime Waterview holdings- are the only two com-

panies that remain on course with their dealings with Milost.

Although it was reported April 10 on Milost’s website that one Williamsville Sears Management Inc. signed a Letter of Intent for the acquisition of PrimewaterView from Milost in an all-stock transaction subject to the approval by both companies.

“The board of the company, at its meeting held on Thursday, March 29, 2018, deliberated on the proposed equity injection by Milost… and management resolved that it should in consultation with the company’s retained counsel, take prompt steps to pull out of the transaction in a non-prejudicial manner,” the May 9 statement signed by Akin Oladapo, Japaul’s acting managing director read.

Termination costs are typically associated with financing deals that go burst last minute. They serve as compensation fees.

Palewater Advisory Group Inc in New York and Banklink Africa Limited in Nigeria were reported to have arranged and negotiated both the Japaul deal, but two phone calls to a number found on their website was not answered.

earlier in the year.

The market which touched as high as 45,000 points as at Jan 19 this year has dipped about 12.8 percent since to 39,323 points on Friday 25th May 2018 after shares in banking and consumer goods companies declined.

The market capitalisation of listed firms also saw a 13 percent decline to N13.5 trillion from N15.5 trillion in January.

At the time of the peak, the best 10 performing stocks were mainly dominated by the banking sector with seven Tier 2 lenders making the 7 top performing stocks list just 19 days into the year, according to data compiled by BusinessDay. Skye bank was the best performer at the peak in January, recording a year to date (YTD) increase of 158 percent, followed

by Diamond Bank with a YTD increase of 138 percent, and FCMB up 135.81percent.

Unity Bank was also up by 130.19 percent, Wema bank up 125 percent, and Sterling Bank up 112.04 percent.

While Jaiz bank, Cement Com-

A private equity lawyer with peripheral knowledge of the transaction said the settlement fees could be as high as N10 billion.

That works out to 7.9 percent of the total deal reportedly worth N126 billion.

Several phone calls to a NewYork number on Milost’s website, to confirm if it will press for break-up fees from Japaul, went unanswered.

Four companies, who did not want their name in print, also claimed to have pulled the plug on informal talks with Milost for a mix of debt and equity financing, after reading the BusinessDay report published March 12, 2018.

The article titled “The Math doesn’t add up with Milost” picked holes in Milost’s announced $1.1 billion in real estate firm- Prime waterview, $350 million in oil and maritime services firm, Japaul and $250 million in mortgage bank, Resort Savings and Loans.

Our calculations showed that Milost was offering to buy the shares of publicly listed Japaul and Resort at a premium and questioned the rationale behind a premium investment in a technically insolvent Japaul and a Resort Savings yet to release a financial statement since 2015.

Japaul announced in February that Milost will invest $250 million in equity and add another $100 million in convertible loans, causing its share price to rally to multiyear highs.

Given that its share price was 35 kobo and it had 6.2 billion outstanding shares, at the time of announcement, February 20, a $250 million (N90 billion) equity investment would imply paying N14 per share, a huge premium by Private Equity standards.

The firm went on a 177 percent share price rally after the deal was announced, trading at N0.97 on Friday March 09, according to Bloomberg data.

It all came crumbling down afterwards, as the shares collapsed to as low as 30 kobo, costing retail investors- who are the heavy hitters of penny stocks- over N3 billion.

In its 2017 full year report, the auditors of the company questioned the going concern status of Japaul reporting that “a matter of uncertainty exist which may cast significant doubt on the Group’s ability to continue as a going concern.”

Japaul reported losses worth N13.08 billion for the full year 2017 period.

Revenues declined 38 percent to N1.9 billion in 2017 from N3.07

L-R: Yinka Sanni, chief executive of Stanbic IBTC Holdings; Sola David Borha, chief executive, Rest of Africa Standard Bank; Aliko Dangote, president, Dangote Group, and Ian Carton, global head of cash Equities ICBC Standard Bank, after a meeting with the senior management of Dangote Group in Lagos, at the weekend.

Investors take profits in small cap bank...

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pany of North Nigeria (CCNN), Caverton offshore support Group PLC and Transnational Corporation of Nigeria, completed the top ten best performing stock list as at January 19, with 85.71 percent, 84.21 percent, 72.09 percent and 71.23 percent gains respectively.

At the early days of 2018, BusinessDay trend analysis also reveals that firms with small market capitalization (below N100 billion) took an early lead, outperforming their counterparts with large market cap.

“When investors are looking out for where market opportunities are, they look out for sectors that haven’t done well but can grow, they realign their portfolio from the highly capitalized stocks to low capitalized stock that has growth potentials,” Ayo Akinwunmi, Head of research FSDH merchant bank said.

However, as at the close of the trading on Friday 25th May 2018, investors had largely sold small cap bank stocks that were the market leaders in January.

The top 10 performing stocks today shows companies from different sectors with Cement Company of Northern Nigeria taking the

first spot with a share price that has risen 152.63 percent.

Caverton Offshore group Plc followed with a share price that has rallied some 82.17 percent, Unity bank, Beta glass Co and Fidson stood 3rd, 4th and 5th with a year to date share price gains of 75.47 percent, 70.24 percent and 60.81 percent respectively.

NPF Microfinance bank, N.E.M insurance company Learn Africa PLC, Cutix PLC, and FCMB completed the top 10 spot with share price up some 54.40 percent, 54.22 percent, 50 percent, 49.25 percent and 48. 60 percent respectively.

“The decline in market activity has come amid cooling market sentiment and increased risk aversion after the initial January rally (market closed 16percent higher in January) and ahead of the 2019 elections,” said equity research analysts at Lagos-based Vetiva Capital.

“We do not expect trading activity to pick up significantly in the near-term as investors continue to monitor political developments,” the analysts added.

The stocks that underperformed the Nigerian Stock Exchange (NSEASI) and recorded over 20 percent decline this year are: African Alliance Insurance Company

Plc (-60percent); Cadbury Nigeria Plc (-20.2percent); Cornerstone Insurance Plc (-30percent); Dangote Flour Mills Plc (-26.7percent); Courteville Business Solutions Plc (-60percent); DN Tyre & Rubber Plc (-38percent); Equity Assurance Plc (-58percent); and Fidelity Bank Plc (-22.8percent).

Other stocks that have laggard this year are: FTN Cocoa Processors Plc (-60percent); Guinea Insurance Plc (-20percent); Consolidated Hallmark Insurance Plc (-40percent); Japaul Oil Plc (-52percent); Lasaco Assurance Plc (-22percent); Mutual Benefits Assurance Plc (-30percent); Multi-Trex Integrated Foods Plc (-20percent); and Niger Insurance Plc (-50percent).

Also, Regency Alliance Insurance Company Plc lost 48percent since this year; Royal Exchange Plc (-32percent); Sovereign Trust Insurance Plc (-48percent); Tantalizers Plc (-26percent); UAC Property Development Company Plc (-23.3percent); Union Bank Plc (-21.8percent); Unic Insurance Plc (-60percent); and Veritas Kapital Assurance Plc (-32percent).

A clear look at the price list shows majority of them are insurance stocks which hitherto were

Monday 28 May 2018

billion in 2016.

For Resort savings and Loans, which also announced a planned investment to the tune of N90 billion ($250 million) by Milost, the numbers also came short.

The mortgage provider, which has a market capitalisation of N5.6 billion, said the Milost financing comprises $100 million (N36 billion) equity and $150 million (N54 billion) debt.

Given that Resort’s share price is only 50 kobo (having been suspended since 2015) and it has 11 billion outstanding shares, Milost’s N36 billion equity injection implies paying six times more for each share (N3 per share).

Total assets for the mortgage provider for the period came in at N10.1 billion.

Milost’s injection and subsequent public listing in the US will allow Ibeto Cement to raise enough capital and put the company in the forefront of the cement industry in Africa, according to chairman, Cletus Ibeto.

Ibeto plans to grow the company beyond west Africa through the acquisition of other profitable cement businesses outside Nigeria within the next 12 months, this will be done at the back for the development of the two new plants.

“Our key strategic objective in the vast and extensive development of the cement business in Nigeria and the West African sub-region is to make cement affordable to all Nigerians and tiers of government in such a way that they should be able to develop modest homes for themselves and their families inclusive of road infrastructure,” Cletus said.

Kim Freeman, Managing Partner & CEO of Milost Global Inc., also stated, “We expect this transaction to provide a template for our other investments in Africa which will continue to enhance the value of the companies we invest in as well as value for our investors.”

Cletus Ibeto is an industrialist who was reputed for manufacturing brake pads. His brake pads company was later sold to Star Auto Industries Limited’s Chidi Ukachukwu. The company, however, shut down in 2004 owing to inability to repay its loans and compete with cheap Chinese products. warehoused at 50kobo per share, but became worse-off after the Nigerian Stock Exchange (NSE) implemented the rules on par value and share price methodology.

Earlier this year, the price floor for listed companies was 50kobo, but with the implementation of the Par Value Rule the price floor became one kobo. Currently, the price of every share listed on the Exchange is determined by the market, except that no share trades below a price floor of one kobo.

Stock traders expect to see mixed performance to continue, but mostly in favour of the bears as investors price-in pre-election year risks.

“We strongly advise investors to take a keen interest on firms’ fundamentals before taking an investment position. We equally advise on taking a medium-long term view of the market,”said GTI Research in their May 1 note to investors.

Bismarck J. Rewane, managing director/CEO, Financial Derivatives Company Limited said at LBS Executive Breakfast Meeting that “stock market performance will flatten out” in May; adding that with Q1 results having little impact on the bourse, bargain hunting on stocks will drive market performance.

Monday 28 May 2018

Does UACN need a make over? Abdul...

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consolidation of operating losses from its property Continued from page 1 11 .54 percent increase compare to segment. its revenue of N64 billion in 2016. revenues and the cost of goods “Whilst UPAlso in 2017, the Paints subsida company sells), have declined iary had the second highest revDC’s revenue consistently from 22.4 percent in enue as it contributed 11 percent of appears to have 2014 to 17.9 percent in 2017 re- group revenue. The paints subsidrebounded, we spectively. This could be a sign that iary revenue stood at N9.4 billion believe the outthe company is not able to transfer which is a 7.6 percent growth comlook for the real increasing cost of production to its pared to its 2016 revenue of N8.7 estate s ector customers which is not surprising billion. Paints subsidiary is made (particularly the considering that household in- up of business units involved in the luxury end) recomes have come under pressure. manufacturing and sale of paints mains soft. Also But net margins have even products and other decorative. with seemingly shrunk more declining to just one bright prospects The Logistics subsidiary conpercent in 2017 compared to 6.9 tributes just 5 percent to the group for the other segpercent in 2016, an indication that revenue with revenue of N4.1 ments (especially the company is not doing too well billion in 2017 which is an 11.6 UACN stock is down 78% since 2014 peak Source: Bloomberg food and beverat keeping a cap on other costs. percent decline compared to its In a difficult operating environ- 2016 revenue of N4.6 billion. Lo- to the operations of from UACN in revenue to N600 million com- age), we expect the group to remain ment where inflation has been gistics is made up of a business unit Property Development Company pared to N1.56 billion recorded profitable into the future with the rising consistently until the last two involved in rendering logistics and (UPDC) Plc. Analysts’ familiar with in the comparative period. Also exclusion of UPDC,” Analyst at months, analysts are beginning to supply chain services including the stock believe that the major in the same period, the company Cardinal Stone said.

Bello also announced in April ask questions if UAC should be warehousing, transportation and challenge facing the UAC is its UAC recorded a net loss of N900 million compared to N1.19 billion loss for that UAC plans to raise $65.4 milProperty Development Company taking a second look at its con- redistribution services.

2017. lion this year through a bond sale (UPDC). glomerate model and get out of Then there is the Real Estate Bello is already moving to stop to refinance short term borrowings “The main problem with UAC is non-profitable lines. subsidiary, which is beginning to The UACN group consists of the look like the problem child in the UAC properties, a stockbroker said. UPDC from becoming a drag on in its real estate subsidiary. This will five subsidiaries including; Food group. The real estate contributed Stressing that UAC property as a the company’s operations. He reduce the pressure from high cost and Beverage - Made up of busi- just four percent of group revenue, subsidiary is not doing well at all,” has disclosed that management bank loans on its books.

Bello says that the major chalness units involved in the manu- recording turnover of N3.8 bil- a market analyst told BusinessDay. is working on the deconsolidation of UAC Property development lenge facing UPDC is a current UPDC made a loss of N2.947 billion facturing and sale of food items, lion which represents a 19.77 company (UPDC) from the group. oversupply of high end properties livestock feeds, bottled water, fruit percent decline compared to its in 2017.

UPDC was also in the red in It is not clear of this would mean in the market coupled with a weakjuices, ice-cream and quick service 2016 revenue of N4.8 billion. Real restaurants as well as its real estate Estate is made up of a business 2016 with a loss of N1.551 billion, selling down part of its 64% stakes ening of the purchasing power of in the company.

Nigerians. He told an analysts’ call subsidiary. unit involved in development and which it attributed to recognition But analyst at Lagos-based that the harsh economic condiof losses on certain projects and A further investigation into management of real estate. cardinal stone, an equity research tions were still affecting the housimpairment of investments in the 2017 financial books of UAC The once profitable property Nigeria showed the food and bev- subsidiary of UAC is now begin- one joint venture project, foreign institute said they view the move ing market and that sales at UPDC erages subsidiary of UAC Nigeria ning to look like a drag on the exchange losses and negative per- as a positive development as it fell 20 percent in 2017. eliminates the risk of earnings “We would use 2018 to reis the biggest revenue driver for group’s operations. A look into the formance of its hotel asset. volatility from UPDC’s operations finance a short-term facility as In first quarter of 2018, the the group revenue (N89.1 billion), financial books of UAC Nigeria as it contributes 80 percent with a showed there was a finance cost of situation has not improved, UPDC on the group; as earnings have we intend to have this business revenue of N71.5 billion which is a N6.2 billion in 2017 largely related recorded a 61 percent decrease been stifled, largely due to the restructured; we see long-term growth supported by a huge housing deficit,” Bello said.

That growth potential now looks far away and Bello is probably thinking that it is better to have UPDC off its books for now, until the property market picks up again.

UAC Nigeria is one of Nigeria’s biggest players in the consumer goods space.

The company has remained a foremost and active participant in Nigeria’s economic landscape since 1879, following the merger of four trading companies namely, Alexander Miller Brother & Company, Central African Trading Company Limited, West African Company Limited and James Pinnock.

Abdul Bello, who just resumed as managing director/CEO in January, started his career in the copmpany when he joined Grand Cereals Limited (GCL), a subsidiary of UAC Nigeria PLC (UACN) in October 1989 as Chief Accountant. Prior to joining UACN, he started as Management Trainee in Inlaks PLC in August 1984. He L-R: Austin Olorunshola, member, Nigerian Natural Resource Charter (NNRC); Oby Ezekwesili, former minister of education/member, NNRC, was Chief Accountant of Inlaks and Odein Ajumogobia, former minister of state for petroleum resources/chairman, NNRC, during a news conference on Nigeria’s Savings and PLC, Lagos from January 1987 to September 1989.

Stabilisation Mechanism, in Lagos, at the weekend.

NAN Abdul has held various management positions across UACN claimed, with the first quarter of The Presidency says milled Group. Between August 1997 and 2018 recording the fourth con- rice production has increased February 1998, he was Senior AcContinued from page 4 tion advanced by 2.6% QoQ to 2.0 secutive quarterly increase since from 2.5MT to 4MT, and rice countant at Accounts Headquarmillion barrels per day (2mbpd) Q2 2017 with a total of $6.3 bil- imports have dropped from ters, UACN PLC. He was appointed by 14.77 percent on an annual- during the period under review. lion, powered by an astronomic 580,000MT in 2015 to 58,000MT Finance Director & Company ised basis, as against a contrac- On a year-on-year basis, this rep- surge in portfolio inflows. in 2016 while millions of dollars Secretary of Chemical & Allied Products (CAP) PLC on 1st April tion of 15.60 percent in the first resented a production increase Foreign reserves also stand have been saved. quarter of 2017, while the non- by 14.3% on an annualised basis at $47.79 billion as at May 2018, However data by the Thai rice 1998. He was appointed the Manoil sector grew by 0.76 percent compared to 1.75mbpd in Q1’17. helped in part by foreign borrow- exporters shows that Benin Re- aging Director of CAP PLC on 1st year-on-year from 0.72 percent public imported 1,330, 809 metric February 2003 and later appointed The presidency’s claims that ings of about $7 billion. in Q1 2017.

The Presidency said Nige- tons of rice, between January and Managing Director of UPDC PLC one of the factors responsible Real GDP growth for the Oil for the positive performance of ria’s Stock Market ended 2017 September 2017 a 51.9 percent on 1st November 2007.

UAC Nigeria Plc is also one of sector advanced by 14.77 percent the economy in Q1 2018 was as one of the best-performing increase from the 876, 228 metric biggest players in the conin the quarter under review, in the spending of about N1.5 tril- in the world, with returns of tons which was imported in the Nigeria’s sumer goods space, listed in the contrast to the negative growth of lion on infrastructure projects about 40 percent. While this same period of 2016.

Nigeria Stock Exchange (NSE) with 15.60 percent in the correspond- in 2017 may be true and for the may be true the markets are Comparing the 2017 imports a market capitalisation of N43.3 ing quarter in the previous year. past 15 months, inflation has de- only back to levels they were at to total imports in 2015 also billion. Investors will be watching Also, on a quarterly basis, Oil clined consistently from 18.72% before the President took office shows there has been a 65 per- closely to see if restructuring its sector came in stronger (Q4’17 to 12.48%. in mid-2015, as the market sold cent increase. Most of the rice business portfolio, UAC could once 11.20% YoY). According to the Capital importation has also off following the plunge into is destined for Nigeria through more become the darling of invesNBS, the average daily oil produc- improved, as the Presidency recession in 2016. smuggling. tors that it was once was.

New BusinessDay fact check of Presidency...

UACN 5-year stock chart

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NEWS Justice Georgina Wood delivers public lecture at Blavatnik School of Government, University of Oxford

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ne key lesson I have learnt is that the imperatives of promoting a Rule of Law based governance system, anchored on a free, fair and impartial administration of justice cannot be overemphasised, Justice Georgina Wood (retired), said.

Justice Mrs. Georgina Wood (retired) is immediate past Chief Justice of Ghana, and the 2017/2018 Africa Initiative for Governance (AIG) Visiting Fellow of Practice at the Blavatnik School of Government, University of Oxford, May 24, 2018 delivered a Public Lecture titled “Rule of Law, the Promotion of Sustainable Development and Ghana’s Experience: A View From the Bench” at the Blavatnik School of Government, University of Oxford.

The lecture was an integral part of her AIG Fellowship stay at the School.

In October 2017, AIG announced the appointment of Justice Georgina Wood as the 2017/2018 AIG Fellow in recognition of her outstanding contribution to public service in Ghana.

The AIG Fellowship is awarded each year to an individual from West Africa who has dem-

onstrated evidence of outstanding contribution to the public good, through exemplary leadership in public service.

“One key lesson I have learnt is that the imperatives of promoting a Rule of Law based governance system, anchored on a free, fair and impartial administration of justice cannot be overemphasised,” said Wood during her lecture.

“The moderating influence of the Judiciary on the more political branches is the basis of constitutional stability and balance, providing the needed conducive environment for sound economic growth and a better life for all. The Judiciary must be accorded the same respect and resources and strengthened to enable it perform its functions.”

“We are honoured to host Justice Wood at the Blavatnik School”, said Professor Ngaire Woods, Dean of the Blavatnik School of Government. “We are grateful to her for sharing her outstanding experience of the Justice System in Ghana with our students and faculty.”

The AIG Fellowship is part of a five-year partnership established in 2016 between AIG and the Blavatnik School. In 2016,

AIG and the Blavatnik School of Government were proud to announce Professor Attahiru Jega, former Executive Chairman of Nigeria’s Independent National Electoral Commission (INEC) as the inaugural AIG Fellow. In addition to the AIG Fellowships, five scholarships are made available by AIG every year to talented, young West Africans from all backgrounds, who are passionate about the public sector, to pursue the Master of Public Policy at the Blavatnik School of Government.

“We are indeed pleased to have Justice Mrs. Wood as the AIG Fellow for 2017/2018 and are honoured that we are able to support outstanding senior public service practitioners from West Africa in enriching their understanding of policy, and in sharing their wealth of knowledge to aspiring young people and with the world,” said Aigboje Aig-Imoukhuede, AIG founder/ chairman.

“AIG’s vision is to be a catalyst for the emergence of a highperforming public sector in Africa and we remain committed to the actualisation of this goal, for the benefit of our continent.”

We’re active in Delta State - Shell

… targets youths, communities in robust development portfolio OLUSOLA BELLO

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hell Petroleum Development Company of Nigeria Limited (SPDC), operator of the SPDC Joint Venture, has restated its active presence in Delta State against the belief in some quarters that the multinational energy firm has pulled out of the state.

Shell still maintains a critical national asset, which is Trans Forcado crude oil export terminal that is the second biggest export terminal in the country as well as Trans Ramo pipeline.

As a proof of its significant footprints in Delta State, the company says it has implemented wide ranging projects

in different parts of the state, including the disbursement of N1.88 billion to Global Memorandum of Understanding (GMoU) clusters in host communities and the establishment of a Professorial Chair at the Federal University of Petroleum Resources, Effurun (FUPRE).

Igo Weli, SPDC’s general manager, external relations, said this at the presentation of the company’s 2018 Briefing Notes to journalists in Warri, weekend, where he said the company recently donated N600 million facilities to five schools under a Youth Sports and Athletics Development Project (YSADP) to mark Nigeria’s centenary anniversary.

“These projects show our

continuous presence and interest in the development of Delta State,” said Weli, who was represented by the company’s head of community interface, Evans Krukrubo.

“While it is true that SPDC divested from a number of assets in Delta State in line with our business strategy, and in support of the participation of more Nigerian companies in the oil and gas industry, we are still active in the state, for example, operating Forcados Terminal, flow stations, gas plants and a network of pipelines. There is no better way to relay this message than undertaking projects and initiatives that are helping to rebuild lives and communities in the state,” he said.

Expect more impactful projects - Ambode JOSHUA BASSEY

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agos State governor, Akinwunmi Ambode, says his administration will be completing more impactful projects across the state as he begins the lastlegofhisfirstterminofficefrom tomorrow, May 29.

Ambode spoke, Sunday, at a thanksgiving service to mark third anniversary of administration, which began on May 29, 2015, just as he attributed the achievements recorded in the last three years to divine inspiration.

Hesaiditwasobviousfromthe take off of the administration that God was involved in the process of thinking, planning and executing policies and programmes for the people.

“In two days time, we will be

three years in the saddle of this major task. There is no other way to celebrate and that is why we are doing this service because we believe strongly that there is no waywewouldhavemadethelevel of progress so far without some supernatural hands and we want to give God all the thanks.

“No matter the strategy that you have read in school or how much work you have done in the public service, it is not possible for you to put up a plan, strategise and try to implement and it works.

If it is working back to back and consistently, there has to be some other source that is making it work because you are just one out of several others and why it works for Lagos is the more reason why one hastobeverysoberandhumbleto actually know that there is some-

thing that is making that to happen and that has to be God. “In all these, the complexity of managing 24 million people, there has to be something else driving it andinallsituations,wegivegloryto God;inallsituations,wearegrateful that He has given us the opportunity to become a source of joy to the rest of Nigeria because Lagos is like the last hope for the country,” Ambode said.

Noting that the last three years had been eventful and fruitful with remarkable progress, the governor saidmorewouldbedeliveredinthe months ahead.

Senior pastor of House on the Rock Church, Paul Adefarasin, in his sermon, commended the government for infrastructural strides,addingthatLagoseconomy remained one of the strongest in Africa.

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A8 BUSINESS DAY NEWS ABCON rejects CBN’s mandatory forex bidding, insists on rate review HOPE MOSES-ASHIKE

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ssociation of Bureaux De Change Operators of Nigeria(ABCON)SundayrejectedCentralBankofNigeria’s(CBN) directive mandating Bureaux De Change (BDCs) to make three forex biddings and purchases on weekly basis. The group insists that the regulator review BDC’s dollar purchase rate to align with commercial banks’ buying rate.

ABCON president, Aminu Gwadabe, said in a statement that CBN’s directive mandating BDCs tomakesuchpurchaseswasnotin line with global best practices and should be put on hold. He said: “The CBN’s directive at this time of our operational difficulties is no doubt precarious and vague and was intended to emasculate a sector that has helped the system to stabilize and thus unacceptable.”

The ABCON’s position followed Sunday’s directive by the apex bank that BDC buy dollars at least thrice weekly to deepen market liquidity. The CBN had directed that: “All BDCs shall henceforth access forex from the CBN on Mondays, Wednesdays and Fridays. It is compulsory that all BDCs access forex at least three timesweekly.AnyBDCthatfailsto access the forex window at least three times weekly shall have its licence reviewed by the CBN.” The CBN’s goal is to ensure that eligible travellers are able to access foreign exchange for the Business Travel Allowances (BTA),PersonalTravelAllowances

(PTA), school fees payment and medical bills payment. It is also in linewithitsplantodeepenforeign exchange liquidity available in the market.

But, Gwadabe said the regulatorshouldfirstlymergeBDCdollar buying rate with that of commercial banks, and also pay ABCON disbursementfeesasitispracticed globally. For instance, Travelex also collects forex disbursement fees from the CBN. The ABCON leader urged BDC operators to remain calm and focused, ahead of and executive engagements with the CBN andfurthercommunicationsoon.

Hehasthereforerecommended that the CBN cuts the three market days for buying dollars to two at $30,000 per market day. He said: “The rate between the banks and DBCs should be merged for uniformity and fairness. A situation where the banks buy dollar from the CBN at lower rate than the BDCs is no helping the market stability drive. Besides, ABCON should be considered for disbursementfeeslikeTravelexinthe collection centres to ameliorate the new assignments.”

Operators insist that making Fridays as market days and funding same day will be difficult to achieve and therefore should be discouraged.

He assured the CBN of ABCON and BDC’s continuous support in enabling the regulator achieve itscore mandate of ensuring exchange rate stability and liquidity access.

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Sahara Group partners Financial Times for first ever FT Nigeria Summit

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ahara Group is delighted to announce its collaboration as a gold sponsor at the inaugural FT Nigeria Summit scheduled to take place in Lagos on May 31.

The multinational energy and infrastructure conglomerate is one of the lead sponsors in the first outing of the summit to be staged in West Africa. The theme thisyearis“Dispellinguncertainty and building resilience” concerning the recovering but vulnerable Nigerian economy.

Nigeria has rightly been described as a country of ‘huge potential and tough challenges’.

While the economy is evidently returning to form, politicians and pundits alike have agreed that any progress achieved in the past year could be ephemeral if the public and private sectors do not collaborate on designing systems, institutions and policies that truly entrench economic gains and the sustainable commercial viability of Africa’s largest and most populous economy.

AstatementreleasedbyBethel Obioma, head, corporate communications, Sahara Group, read: “It is great to be working with a venerable media institution like the Financial Times on this summit, especially at a time when Nigeria needs to re-examine and re-purpose our complex investment climate for the next critical economic growth and recovery plan.”

Sahara Group’s executive di-

rector/co-founder, Tonye Cole, is expected to sit for an interview with BBC World News presenter Lerato Mbele-Roberts on the importance of leadership and entrepreneurship to future economic and socio-developmental growth in the country.

Speaking ahead of the event, Cole, said, “Leadership and enterprise are the bedrock of nation building. This is a singular opportunitytogenerateideasontwo such critical subjects and to directly address the next generation as to why and how they would be intrinsic to fulfilling Nigeria’s socio-economic potential in the years to come.”

It is expected that there will be over 200 in attendance, bringing together key government heads, opinion leaders and members of the press.

A statement released by Financial Times Live ahead of the event read “As the FT prepares to hostitsinauguralNigeriaSummit, we look forward to exploring the huge economic potential and challenges the country faces to build a resilient economy. With the support of Sahara Group and other key sponsors, the summit will add vital insight for senior leaders, and create a valuable day of engagement and thought leadership.”

The summit is scheduled to begin from 8am and would encompass over 7 keynote interviews, speeches and panel sessions over the course of the day.

Monday 28 May 2018

Dangote thumbs up government’s economic recovery, growth plan … inducts trainee managers

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resident of Dangote Group, Aliko Dangote, has disclosed that he has been engaged in strategic investments in the country in a bid to complement Federal Government’s economic recovery and growth plan, saying his investments in agriculture and fertilizer production are in that direction.

Dangote spoke just as the flagship of the conglomerate, the Dangote Cement plc, commenced the training of its newly engaged managers in order to sustain its leadership and competitiveness in the industry.

He said at the weekend that the decision of the government at diversifying the economy away from oil only to an agriculture centred one remains the viable solution to creating a healthy economy and that private sector has important roles to play which was why he has taken up the challenge to lead the way as a leading private sector operator.

Dangote, who was speaking to newsmen at the weekend in Lagos, said it was because of his belief in the government approach at reenergising the economy and make it export oriented made him to step up his investment in agriculture especially in the area of food sufficiency.

According to Dangote, Nigeria has wasted so much foreign exchange importing

foods that ordinarily should be produced locally and even exported and that until a new approach at redirecting the economy from import dependent to an export one, which the present government is leading, no meaningful changes can happen.

“We have invested massively in rice, sugar, diary products, and tomatoe. Our rice-out grower scheme will produce rice by next year and that will reduce our rice import to nearly zero because Nigeria imports more than half of the rice it consumes.

We have expanded our sugar operations with our operations in Tonga in Nasarawa in addition to Numan sugar projects where sugarcane is being planted for raw sugar production that will be refined.

Dangote Cement new managers who were inducted weekend at the Dangote Academy Ikeja, Lagos, are being trained under the newly established scheme: Management Trainees Program (MTP).

Group managing director/ CEO of the Dangote Cement, Joseph Makoju, lauded the programme, saying it would support the overall drive of the conglomerate.

Makoju said the management scheme was part of the effort of the conglomerate “to sustain our exponential growth, competitiveness and market leadership.”

Monday 28 May 2018

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Controversy over status of PIGB two months after passage

Fashola to speak on PPP, infrastructural challenges at roundtable

KEHINDE AKINTOLA & OWEDE AGBAJILEKE, Abuja

SEYI JOHN SALAU

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he exact status of the Petroleum Industry Governance Bill (PIGB) is yet to be ascertained, fuelling controversies over that very important bill passed by the National Assembly two months ago.

Findings by BusinessDay show that even some of the federal lawmakers who worked on the bill that holds so much promise for Nigeria’s oil sector and the entire economy could not explain the documents when engaged.

While a highly placed source in the House of Representatives disclosed to our correspondent that the bill was at the National Assembly’s legal department, confirming the position of Ita Enang, senior special adviser to the President on National Assembly Matters (Senate). But a senator, however, insists that the Bill has since been transmitted to the President for assent.

“As of Monday, when I asked about the PIGB, I was told that it is still with the Legal Department,” the source, who did not want his name in print, said.

But when asked about the controversy surrounding the harmonised PIGB, the vice

chairman, Senate Committee on Petroleum Resources (upstream), Gershom Bassey, insisted that the bill is already with the Executive.

“We are not aware (if PIGB is missing). We have passed the bill so it should be with the Executive,” the federal legislator said in a text message to our correspondents on Tuesday.

The People’s Democratic Party (PDP) lawmaker, however, promised to look into the matter.

On his part, Joseph Akinlaja, chairman, House Committee on Petroleum Resources (downstream), who refused to respond to BusinessDay’s inquiry, said: “Go and meet Namdas, he is our spokesman.”

Also speaking, Abdulrasak Namdas, chairman, House Committee on Media and Public Affairs, explained that the chairman, Ad-hoc Committee on PIB, Ado Doguwa, had failed to respond to his calls on the status of the bill.

Speaker Yakubu Dogara had during the public hearing on the three bills: Petroleum Industry Administration, Fiscal and Host Community bills, held on May 15, 2018, informed captains of industry, management of OICs that the “Petroleum Industry Governance Bill, 2017 has been passed by both the House and Senate and is now before

the President of the Federal Republic of Nigeria for assent.”

The PIGB, which introduced new reforms in the governance of the oil industry and the longest serving bill in the National Assembly, was harmonised and passed by both chambers of the National Assembly in March this year.

In statement last week by the Senior Special Assistant to the President on National Assembly Matters, Ita Enang, he said the bill was still undergoing some legislative processes in the National Assembly.

“Further to several enquiries by the media, interest groups and the public in respect of the within named Bill, may l please state that the said Bill has not yet been transmitted by the National Assembly to the president.

“From my enquiries, the bill is still undergoing standard operating legislative processes of the National Assembly preparatory to transmission, please,” the former lawmaker had said.

The development has raised concerns about the status of the bill.

The proposal was first introduced as an executive bill in 2008 by then President, Umar Yar’Adua. The sixth National Assembly (2007 to 2011) failed to pass it.

Again, it was introduced as an Executive bill to the Nation-

al Assembly in 2012 by former President Goodluck Jonathan.

However, while 47 out of 360 members of the House of Representatives in the seventh National Assembly (2011 to 2015) passed the bill at the twilight of their tenure, they failed to get the concurrence of their counterparts in the upper legislative chamber.

In the Eighth Senate, the bill, which is one of the economic recovery bills, was introduced as a private/member bill and sponsored by the chairman, Senate Committee on Petroleum Resources (Upstream), Tayo Alasoadura.

The PIGB is the first of four bills, which replaced the Petroleum Industry Bill (PIB). The other three other components of the bill are: the Fiscal Framework, Host Communities and Petroleum Industry Administration Bill.

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inister of power, works and housing, Babatunde Fashola, will this week address the challenges facing infrastructure development in Nigeria as the special guest of honour at the Advocacy Roundtable forum of the Institute of Directors (IoD) Nigeria, scheduled to hold in Lagos on May 31.

Dele Alimi, director-general/ CEO of the institute in a statement, says the essence of the forum is to explore partnership opportunities between the private sector and government towards filling the infrastructural gap confronting the nation, as well as to provide a veritable platform of networking opportunities for policy and decision makers.

Alimi, who identifies the theme of the forum as: ‘Filling the Infrastructure Gap’ confirms

that Adekunle Abdulrazaq Oyinloye, managing director/ CEO, Infrastructure Bank plc, will be the keynote speaker, with other speakers to include Andrew Neville, partner, PricewaterhouseCoopers (PwC); Funke Osibodu, managing director/CEO, Benin Electricity Distribution plc; Wale Oluwo, commissioner for energy, Lagos State; Kennedy Uzoka, GMD/CEO, UBA; Tunji Oyebanji, managing director, 11Plc and chairman, IoD Energy Committee.

Dapo Adelegan, chairman of the institute’s Research and Advocacy Committee, while speaking on the choice of the theme for the roundtable, states it was necessitated by the rising need for the government at the centre to address the everwidening gap in the provision of basic infrastructural amenities in both the rural and business centres in Nigeria.

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APC tests electoral strength with Ekiti governorship election ....Faces knotty challenge from Fayose Fayose. So we must be united to confront that challenge. We will give our all to ensure that we win Ekiti State for the APC.

INNOCENT ODOH AND JAMES KWEN, Abuja

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he ruling All Progressives Congress (APC) appears set to use the July 14 Ekiti State governorship election as launch pad to test its electoral strength ahead of 2019.

APC, which came into power in 2015 with popular votes from Nigerians who were disillusioned with then People’s Democratic Party (PDP)-led federal government, appeared to have lost the support of the people especially as the nation marches towards another general election.

Ekiti State on the other hand is the only state in the South-West which is the stronghold of APC but is governed by the main opposition PDP with Governor Ayodele Fayose as the helmsman. Though, Ekiti may not be the only state where governorship election will hold before 2019 as Osun is next in line but the ruling party seems to be poised to win the state almost at all cost.

The 77-man gang In the demonstration of its resolve if not desperation to capture Ekiti whether by hook or crook, APC last Thursday inaugurated a very powerful National Campaign Council for the Ekiti Governorship Election made up of 14 sitting governors, a former governor of the state, 8 strategic ministers, key serving and former members of National Assembly, some members of APC National Working Committee and other political juggernauts.

The governors in the 77-member Campaign Council are; the Chairman, Atiku Bagudu of Kebbi State; Rotimi Akeredolu of Ondo State; Akinwunmi Ambode, Lagos; Ibikunle Amosun, Ogun; Abiola Ajimobi of Oyo; Rauf Aregbesola of Osun; Abdufatah Ahmed, Kwara; Abdulazeez Yari, Zamfara and Godwin Obaseki of Edo State.

Others include Yahaya Bello, Kogi; Simon Lalong, Plateau; Kashim Shetima, Borno; Umar Jibrilla, Adamawa; Abubakar Badaru, Jigawa as well as former Ekiti State governor, Segun Oni. The Ministers that are in the Council are Mansur Dan-Ali – Defence; Abdulrahman Dambazau –Interior; Bawa Bwari Abubakar - State, Solid Minerals; Ibe Kachikwu -State, Petroleum; Babatunde Fashola - Power, Works and Housing; Rotimi Amaechi – Transport; Chris Ngige – Labour; Isaac Adewole - Health, while two principal officers of National Assembly in the team are Sola Adeyeye, Senate Chief Whip, and Yusuf Lasun, deputy speaker, House of Representatives.

The Campaign Team is strategically composed to ensure victory as

Fayemi

it has all the Yoruba speaking governors except Fayose of PDP, chairman of Nigerian Governors Forum, Yari and the Amaechi who anchored the campaign that brought President Muhammadu Buhari to power in 2015 and has been appointed again to anchor the President re-election in 2019.

While this may look like just part of concerted efforts to enthrone Kayode Fayemi, APC standard bearer as the next Ekiti Governor, political pundits view the arrangement as ploy to subdue the Fayose-led PDP which is obviously more popular in the state.

Fayose has remained an ardent critic of the President Buhari administration and the APC government at the centre.

For instance, observers alleged that the presence of the Minister of Defence, Ali in the Campaign Council is aimed at using the military to coerce, harass, intimidate the electorate and ultimately, rig the election in favour of the ruling party.

The same thing applies to the Minister of Interior who superintends over the Police, Para-military and security agencies, which may be used to the advantage of APC but to the detriment of other parties, particularly PDP. This is in addition to the inclusion of the Minister of State, Petroleum who is obviously not a politician in the Council, according to analysts, his role as the one who controls the nation’s main revenue earner is to make huge amount of money available for the Ekiti project.

A member of the APC at the national level, who does not want his name in prints, told BusinessDay last Friday that “everything possible including the money, the men and the influence required to disgrace

the noisy Fayose is being put in place.

The APC must win Ekiti in order to prove that it is still political virile in the South West.”

He disclosed that all the governors and the ministers are expected to contribute funds to the Ekiti project. He however, feared that the collection of 77 members, who are mostly not Ekiti indigenes, may lead to failure, adding that “too many cooks spoil the broth.”

Recall that during the 2014 Ekiti Governorship election when the then former governor now the incumbent, Fayose, defeated the then sitting Governor, Fayemi, the PDP controlled Federal Government through former Minister of Defence, Mooshod Obanikoro allegedly used the military to capture the state for PDP. That the Ekiti governorship election is a do-or-die affair is no longer news as had even before his nomination as the APC candidate, Fayemi had told a gathering in Ado-Ekiti that the election is a must win for APC and “federal might will be used to win the election.”

Also, APC Deputy National Chairman (North), Lawali Shuaibu bluntly said during inauguration of the Campaign Council that “The election in Ekiti is very important for the APC. In fact, we feel the level of importance of the election is slightly below the importance of the presidential election to us. We are not going to relent in our effort to win Ekiti State. The responsibility now rests on your shoulders”.

Similarly, Chairman of the APC National Campaign Council for Ekiti, Governor Bagudu after his inauguration left no one in doubt of what the election means for APC when he said: “We have faced enough of affront as a party”.

“Challenge has been thrown to us not only by the PDP, but by Governor

Experts react Reacting to the APC mobilisation for Ekiti election, a chieftain of the Northern Elders Forum, who wished to remain anonymous told BusinessDay Friday in an interview that the massive force being mobilised by the APC to dislodge the PDP in Ekiti is because of the ruling party is afraid of Fayose. “They are afraid of the popularity of the Fayose who is on ground in Ekiti State. If they (APC) are on ground, they will not need to do all that,” he said.

However, Majeed Dahiru, a security expert and columnist, was very scathing of the APC saying that the party is threatening democracy.

He added that the APC wants to intimidate the voters and force on the people of Ekiti, an outcome that could undermine their democratic choice. “This is a very, very ugly political culture evolving under the APC dominated polity today. An election that is supposed to be decided by the people is now being threatened by brute and naked force by the federal government.

“It is something that spells doom for our democracy. I can’t imagine how a party that claims to effect change in the polity has deepened impunity to this level. This is share waste of resources. 77 people and about 14 governors I am told will leave their duty posts and converge in Ekiti for a week just to influence election for one candidate.

“It is also an indication that politics under the APC administration has become self-service, an avenue to convert public resources for personal enterprise. Otherwise why the desperation to become governor in this manner, they should let people make their choice between the contenders.

“This is political abomination, it is not supposed to happen in modern time for a party that professes change, this is disheartening.

“You can imagine if Rivers state, Governor Wike, Emmanuel Udom of Akwa Ibom and other PDP Governors also mobilise such large entourage to converge in Ekiti for the election. It means the desperation will become so much that there will be tension in the state. I expect the president who is supposed to represent change to deviate from this political culture. If it was done in the past it should not be done in the present. This raw show of force is not democratic,” he said.

But Ezenwa Nwagwu, chairman Partners for Electoral Reforms, a civil society organisation, told BusinessDay that there is nothing wrong in the APC setting up such council for the election as long as they will not compromise the election process because

it is a party affair. “If the APC set up the council and include its members who are in government I don’t see how that is undemocratic. APC can appoint those in government to its election committee.

“If the Federal Government set a committee of that nature then that is an abuse of office. The party has interest in winning the election so it will throw everything it has. But I agree that it is uncalled for and it is unnecessary to constitute a 77-man council. However, it is now for us as citizens to ensure that they don’t abuse their office in the cause of dong that,” he said.

A public affairs analyst and a chieftain of the PDP, Katch Ononuju, said that despite what appears desperation of the APC government, PDP might still carry the day in the Ekiti election because Governor Fayose has a lot of popularity in the state.

He said that APC stalwart, Bola Ahmed Tinubu is not likely to give support to Fayemi because since the former Minister of Solid Minerals came to the centre, he allegedly teamed up with the President Muhammadu Buhari’s Congress for Progressive Change (CPC) faction of the APC coalition to sideline Tinubu’s faction of the Action Congress of Nigeria (ACN). He added that Fayose has courted friendship with the Tinubu faction, which is desperate not to be swallowed up by the CPC faction.

“The PDP is likely to go into alliance with the Bola Tinubu faction of the ACN. Since Fayemi came to the centre, he has teamed up with the CPC faction against the ACN. What you are seeing is desperation to unleash their alliance members and those who will work to get Ekiti.

But that day will come and the people on ground might defeat them. The 77 members of the APC campaign council are mostly not from Ekiti State and all politics are local.

“It is likely that day will come and only the indigenes, the local players will be there and these 77 men and women will just be in their hotel rooms without any serious impact.

The fact that the APC failed to coalesce into a national political party simply means that the interest of the factions that formed the coalition must be protected by its members.

Nobody wants to be swallowed by another faction.

“Fayemi wants to drag the ACN faction into the pockets of the CPC and that is what the ACN seems to be resisting. Tinubu’s wife once complained that after helping the APC win the 2015 elections, her husband was thrashed and thrown into the dustbin. It is now that Buhari wants to contest another election that he wants to use Tinubu again. So history will see if Tinubu will allow himself to be used and dumped two straight times,” he said.

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FINANCIAL TIMES Kim Jong Un seeks to salvage summit with Trump

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Community energy projects bring power to the people

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World Business Newspaper

Barnier warns Britain to stop playing hide and seek

EU’s chief Brexit negotiator says UK must ‘look the reality of the EU in the face’ ALEX BARKER

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he EU’s chief Brexit negotiator on Saturday called on Britain to stop playing “hide and seek” and decide on a realistic exit policy, as the two sides traded barbs over the blame for stalled talks.

Michel Barnier’s blunt remarks came in a speech in Portugal on Saturday, hours after his British counterpart David Davis accused the EU of “public posturing” that was putting the security of citizens at risk.

The pointed exchanges reflect the bad feeling in London and Brussels after a difficult week of talks over Britain’s future relationship with the EU. Mr Barnier said Britain must “look the reality of the EU in the face” and refrain from suggesting more models of co-operation that recreate the advantages of a shared regulatory system from the outside.

“I can see the temptation of a blame game to pin the negative consequences of Brexit on the EU. But we will not be cowed,” he said. “It is the UK that leaves the EU. Britain cannot, on leaving, ask us to change who we are and how we operate.”

“We ask for clarity because to negotiate effectively you must know what the other party wants,” he added. “A negotiation cannot be part of a hide and seek . . . the UK must accept the consequences of its own decision [to leave], explain them and assume them.”

It followed Mr Davis, Brexit secretary, on Friday hitting out at the EU trying to “score points” rather than engage with “serious papers” from the UK that sought to address shared interests.

“Our proposals on security, for example, are not about bending rules or ‘membership-light’ — they are about protecting people — nothing more,

nothing less,” he said. “We face the same threats and have shared values — criminals and terrorists do not respect borders.”

Mr Barnier’s comments came in a speech focused on dispute settlement arrangements for the exit treaty — a highly sensitive issue for Brexiters since it relates to the future influence of the European Court of Justice in Britain.

Warning that the need to make progress on a governance arrangement was “urgent”, Mr Barnier rejected British proposals for a political joint committee to resolve disputes, saying a judicial component was essential.

“We have come a long way on the substance of the exit agreement, but without effective governance, these gains will be of limited value,” he said.

“We cannot leave such a central subject in abeyance because without an agreement on governance there will be no withdrawal agreement, and therefore no transition period.”

The argument is particularly difficult for Westminster since Mr Barnier envisages an extended role for European judges in interpreting any elements of EU law that are included in Britain’s exit treaty.

Mr Barnier suggested a compromise agreed on the enforcement of citizen rights — which gave the ECJ indirect influence over UK cases for eight years after Brexit — could be used as a model for other parts of the withdrawal agreement.

“The mechanism allows us to ensure, over time, the uniformity of the interpretation of the agreement on both sides of the Channel,” Mr Barnier said. “This objective, which has been achieved for citizen rights, has yet to be achieved for the rest of the withdrawal treaty.

This would reduce the risk of litigation between the EU and the UK.”

Saudi Arabia’s sleepy city offers prince a cautionary tale Kingdom’s ambitious plans for diversification face challenge of economic reality AHMED AL OMRAN

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ith its pristine beaches, manicured lawns and rows of newly built villas, the King Abdullah Economic City bears all the hallmarks of the modern Saudi Arabia envisaged

by Crown Prince Mohammed bin Salman.

Women walk freely without the long, cloak-like abayas. A golf course nestles up against the Red Sea coastline and international companies including Pfizer and Mars have opened factories in the city.

Yet the development instead serves as a cautionary tale of the challenges the young heir apparent

faces as he pursues a highly ambitious programme to overhaul the conservative kingdom, including his own plans for a new $500bn megacity, Neom.

The King Abdullah city, also known as KAEC, was launched a decade ago as part of a $30bn project to build six cities to diversify the oil-dependent economy, attract foreign investment, create 1.3m jobs and add $150bn to gross domestic product. But only one of the six made it off the drawing board, King Abdullah city, which today has a population of just 7,000 people set against a target of 2m by 2035.

Despite offering more social Continues on page A14

Europe’s bank bosses stress need for consolidation Chiefs say groups require scale to keep pace with US competitors and digital transformation MARTIN ARNOLD

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ig banking mergers and acquisitions are back on the agenda in Europe, where top executives are stressing the need for consolidation while worrying that the election of a populist government in Italy will make deals harder.

As European bank bosses met in Brussels last week their discussions were dominated by concerns about the growing gulf with resurgent US rivals and the competitive threat from big technology groups in America and China.

Consolidation would be one solution, giving European banks the scale to keep pace with US competitors and the resources to invest in costly but necessary digital transformation.

Jean-Pierre Mustier, chief executive of Italy’s UniCredit, summed up the mood at the spring meeting of the Institute of International Finance when he said: “Europe needs more pan-European banks. JPMorgan is the biggest bank in the US with a market capitalisation of almost $380bn, but the biggest European

bank is Santander with a market cap of €80bn.”

He said EU policymakers were “focusing on the wrong issues” by trying to create deeper European capital markets to match those in the US, arguing that banks are the only viable way to finance the continent’s large population of small- and midsized businesses.

Yet there is growing concern that the election of a populist government in Italy could slow or even reverse progress on eurozone banking union.

Many financiers see completing this project as critical to making cross-border deals viable, by freeing up cross-border restrictions on the movement of capital and liquidity.

“Because growth is slightly back . . . you may get views here and there that the balance between eurozone and national regulation should be readjusted to the national level,” said Jean Lemierre, chairman of France’s BNP Paribas. “We should avoid fragmentation, but I can see that politics may have an impact on this — you know, populism — national lobbies.”

“Investment bankers think a Deutsche Bank merger with Commerzbank is likely in the next couple of years to create a new German champion, while other likely consolidation candidates include Bankia, Société Générale and ABN Amro.”

The sense that large-scale bank M&A may be about to return for the first time since the 2008 financial crisis was reinforced last week, when the Financial Times reported that Barclays was toying with the idea of a big deal, potentially a £60bn-plus combination with Standard Chartered, although plans are at an early stage.

Bill Winters, StanChart’s chief executive, was in Brussels last week and agreed that consolidation was on the cards, while playing down the idea of a deal with Barclays by saying “not in Canary Wharf” when asked where he saw the future of StanChart.

“There will be many fewer banks,” said Mr Winters, predicting that new technologies such as blockchain will drive the marginal cost and price of banking products down near to zero, squeezing bank’s profit margins.

Oaktree founder warns private equity standards slipping Howard Marks sees risk in groups being pushed into accepting poor terms JAVIER ESPINOZA AND MILES JOHNSON

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rivate equity groups are lowering their standards over investment choices, raising money too easily and paying record prices in a shift that will lead to lower returns than the historical average for investors, according to Howard Marks, founder of Oaktree.

Mr Marks, a billionaire investor, said private equity groups were being pushed into accepting poor terms on deals. He told the Financial Times that money managers have a “big impetus to get invested” even if it means backing bad ideas.

“When there’s too much money around, it creates really bad things,” he said. “You’ve got to think of the markets like an auction. There is an

opportunity to lend money. Who gets to make the loan? The person who will accept the least.”

As of May 25, there was $1.08tn of raised capital yet to be deployed, according to Preqin, the data provider.

“The person who pays the most can also be described as the person who will accept the least for his money.”

He said the capital markets showed features similar to those in 2005 and 2006. “There is more money than there are good ideas. There’s very strong interest in getting ideas invested.”

He added that with so much money available to them, buyout funds had “FOMO [fear of missing out] and people are abandoning the standards of the past”.

Asked if private equity was in a bubble, he said: “There is every chance

that it is”, but he warned that “bubble is such a coloured word. I think we are in a highly elevated phase of the market.”

“It’s too easy for them to raise money. If they can place the money they have, they can raise more money and get more fees,” he said. “They are paying record-breaking multiples. You’ve got to worry when we are in the tenth year of an economic recovery.”

His remarks emerged at a time when buyout funds are not only raising record amounts of cash but are turning away billions of dollars as they struggle to cope with demand.

This is not the first time Mr Marks has warned about risk in private equity.

He said last year that the wall of money being raised would lead to industry players trying to be more aggressive in order to hit their returns.

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NYSE’s first female president brings trading nous to the job Stacey Cunningham started on the floor and broke through the glass ceiling NICOLE BULLOCK AND PHILIP

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hen Stacey Cunningham was an intern at the New York Stock Exchange in 1994, testosterone-filled men roamed the booths and littered the floors, while the ladies’ room for exchange members was just a converted telephone

booth.

On Friday, Ms Cunningham is set to smash through a symbolic glass ceiling by becoming the first female leader of the NYSE. The place is very different from when she started two decades ago.

Computers have replaced people and now there is enough space on the floor

to fit a small television studio. Even so, Ms Cunningham, whose father worked at a brokerage, still retains a deep affection for the old “open outcry” system she first encountered while an engineering student.

This week she tweeted: “Since the moment I stepped on to the trading floor, the NYSE has always held a special

place in my heart.”

After the internship, Ms Cunningham became a specialist for JJC, now a unit of Bank of America, where she facilitated trading stocks including Hershey and Ambac Financial.

Yet it has not always been an easy love affair. Frustrated that the exchange was moving too slowly in adapting to technological change, in 2005 she took

Harvey Weinstein charged with rape by New York police

Saudi Arabia’s sleepy city offers prince a cautionary tale...

Continued from page A13 freedoms than other Saudi cities, King Abdullah city, 145km north of Jeddah, feels eerily quiet and empty. It was intended to be a hub for logistics and manufacturing.

But its struggle to attract investors and residents has underlined a perennial battle the kingdom faces bringing in foreign capital beyond the energy sector.

“If KAEC was viable the city would have taken off a long time ago. Their marketing was amazing but the whole concept behind it was flawed,” said a former government adviser. “The economic base was never there.”

It highlights the task ahead for Prince Mohammed as he pursues his “Vision 2030” plan that is aimed at reducing the dominant role of the state, creating 450,000 private sector jobs by 2020 and reducing unemployment from about 12 per cent to 9 per cent over the same timeframe.

“The business case is hard to make for manufacturing and light industry in Saudi Arabia,” says Karen Young, a senior resident scholar at the Arab Gulf States Institute in Washington.

The Neom development is the flagship project of Prince Mohammed’s plan. He unveiled the scheme at a glitzy investor conference in October where he wooed some of the world’s top bankers and executives. Neom is far more ambitious than the six economic cities launched in the 2000s: it will cover 26,000 sq m and targets attracting investment in new technologies, including renewable energy and robotics. Its goal is to contribute $100bn to GDP by 2030.

Prince Mohammed will personally oversee the project, and it is be financed by a combination of government spending, funding from the Public Investment Fund, the $230bn sovereign wealth fund, and private sector investment.

Similar diversification plans have been tried many times before and stumbled. But Saudi officials insist they have heeded the lessons of the past.

“We will learn. If we execute something and we think it’s not as we planned we will adjust our plans,” said Mohammed al-Jadaan, finance minister. “Am I confident?

Yes . . . I’m seeing results and momentum.”

But Saudi companies are riskaverse as they struggle with a stagnating economy and government austerity measures. Foreign groups have also shown hesitancy to invest outside the energy sector. When Prince Mohammed embarked on a weeks-long tour of the UK and US this year, Riyadh announced only one sizeable deal, a solar power joint venture with Japan’s SoftBank.

a career hiatus to become a trained chef.

It could have been a career killer to an ambitious professional, but not to her.

“I just don’t think your career is linear,” Ms Cunningham told the FT last summer. “I didn’t think it was going to be a problem to take time off and I didn’t think it was going to be an issue coming back in. I felt like I learnt a lot from my time away. Your skills are transportable.”

Disgraced former film mogul has faced allegations from dozens of women

KADHIM SHUBBER AND NAOMI ROVNICK

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Moon Jae-in met Kim Jong Un on Saturday in the truce village of Panmunjom for impromptu talks © AP

Kim Jong Un seeks to salvage summit with Trump North Korea signals commitment to denuclearisation in meeting with South Korea’s Moon Jae-in BRYAN HARRIS AND COURTNEY WEAVER

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im Jong Un has restated his commitment to “complete” denuclearisation of the Korean peninsula and to a summit with US President Donald Trump, South Korean leader Moon Jae-in said on Sunday.

Mr Moon’s comments came after he met the North Korean leader on Saturday in the “truce” village of Panmunjom in the demilitarised zone for unscheduled talks aimed at salvaging the meeting between Mr Kim and Mr Trump next month.

Mr Moon said on Sunday that he had agreed with Mr Kim that the US-North Korea summit in Singapore “must be successfully held”.

“Kim Jong Un has once again clearly expressed his commitment to the complete denuclearisation of the Korean Peninsula . . . and expressed his willingness to end the history of war and confrontation through the success of the North Korea-US summit,” Mr Moon told reporters.

“What Kim is unclear about is that he has concerns about whether his country can surely trust the United States over its promise to end hostile relations and provide a security guarantee if they do denuclearisation.”

Mr Moon sidestepped questions about what denuclearisation would entail, an issue that remains a key stumbling block in relations between Pyongyang and Washington.

Hopes are growing that the Singapore summit will take place as

planned after days of diplomatic ups and downs. Mr Trump said on Thursday he was calling off the meeting because of the recent “tremendous anger and open hostility” that Pyongyang has aimed at Washington.

But after North Korea issued an unexpectedly moderate response to the decision, Mr Trump and White House officials have offered conflicting narratives about the June 12 summit.

While US officials told reporters last week that there would not be enough time pull off the meeting, if the president changed his mind, Mr Trump has suggested it could go ahead.

“I just want to mention we’re doing very well in terms of the summit with North Korea. Looks like it’s going along very well,” Mr Trump told reporters in on Saturday night, referencing the fact that US officials were in Pyongyang to negotiate the summit. “I think there’s a lot of goodwill. I think people want to see if we can get the meeting and get something done.”

Mr Kim had expected to go into the summit with the strongest possible hand, but Mr Trump’s sudden cancellation was a wake-up call,” said Ben Forney, a research associate at the Asan Institute for Policy Studies. “Kim is realising that, for better or worse, he’s dealing with a US administration unlike any that has come before. The fact that they’ve rushed through or ignored all the rounds of preliminary diplomacy means that the particular personalities of the leaders are playing a large role in the lead up to the summit.”

North Korea has for years pro-

claimed its desire to denuclearise the Korean peninsula but has never defined what exactly such a process would entail or what it would seek in return for giving away its nuclear weapons.

The lack of clarity has led many analysts to suspect that Pyongyang is not sincere about vows to abandon what the regime calls its “treasured sword of justice”.

Some have suggested North Korea will seek a security guarantee that would entail removing US forces and strategic assets from South Korea and the region.

According to Mr Moon, the North Korean regime remains “doubtful” that the US will provide such a guarantee once denuclearisation is complete.

Nonetheless, Pyongyang has appeared eager for the summit to go ahead. After Mr Trump cancelled the meeting on Thursday, the regime quickly changed tack, with a top official lavishing praise on the US leader in a rare display of contrition.

No sitting US president has ever met a North Korean leader for fear of bestowing prestige and legitimacy on one of the world’s most oppressive regimes.

Regardless of the outcome, analysts believe that even attending the summit with Mr Trump would prove a boon for Mr Kim’s domestic standing.

Mr Moon is als o adamant the meeting should occur. For months, the South Korean leader has acted as an intermediary between Pyongyang and Washington as part of his broader political ambitions to secure peace on the Korean peninsula.

arvey Weinstein, the disgraced film mogul, was arrested on Friday and charged with rape and sex abuse and other crimes against two unnamed women.

The 66-year-old movie producer turned himself in to a New York police station seven months after dozens of women came forward with allegations he sexually abused them.

In a statement, the New York Police Department said: “Harvey Weinstein was arrested, processed and charged with rape, criminal sex act, sex abuse and sexual misconduct for incidents involving two separate women.”

Mr Weinstein has been accused of sexual abuse by more than 75 women around the world, igniting the #MeToo movement and propelled The Weinstein Co into Chapter 11 bankruptcy protection.

On Thursday the New Yorker published an interview with Lucia Evans, a former actress, who alleged Mr Weinstein forced her to perform oral sex on him in 2004. In the article, Ms Evans confirmed she had pressed charges against Mr Weinstein.

An unnamed law enforcement official told Associated Press that the criminal sex act charge stemmed from the 2004 encounter between Mr Weinstein and Ms Evans.

Mr Weinstein’s attorney, Benjamin Brafman, was expected to make a comment later on Friday. Mr Weinstein has previously denied having non-consensual sex with anyone.

Mr Brafman said in a court filing this month in a bankruptcy proceeding that the allegations that Weinstein forced himself on women were “entirely without merit.”

“I am trying my very best to persuade both the federal and state prosecutors that he should not be arrested and or indicted, because he did not knowingly violate the law,” Mr Brafman wrote.

The charges brought by Manhattan District Attorney Cyrus Vance follow criticism of his decision not to prosecute Mr Weinstein in a previous case.

In March, New York Governor Andrew Cuomo ordered the state’s attorney-general to investigate whether Vance acted properly in 2015 when he decided not to prosecute Mr Weinstein over a previous allegation of unwanted groping that was made by an Italian model.

While actresses including Gwyneth Paltrow and Angelina Jolie have accused Mr Weinstein of harassing them, many of the allegations have been too historic for New York police to investigate.

New York eliminated its statute of limitations for sex crimes including rape in 2006, but not for alleged assaults that occurred before 2001.

Monday 28 May 2018

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FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Community energy projects bring power to the people Small-scale electricity plants spark interest among local groups and investors SYLVIA PFEIFER

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ubsidies and tax incentives initially promoted investment Held back by a lack financial and legal expertise How consumers are taking power In The Good Life, the UK television sitcom of the 1970s, Tom and Barbara Good give up the rat-race to start a new, self-sufficient life. They converted their garden into a farm, grew their own crops and bred chickens.

If the scriptwriters had thought of it, they would no doubt have also generated their own electricity.

Fast forward 40 years and today’s community energy projects evoke that Good Life spirit. The sector, however, is more than a handful of schemes set up to generate renewable energy and reinvest the proceeds from the sale of electricity into the locality.

It is part of a wider trend towards “distributed energy” as the industry moves away from the traditional model of large coal or gas-fired power stations that send electricity through central transmission networks, to one that is dominated by smaller-scale, often renewable, plants. It is also, increasingly, an investment proposition for socially conscious investors.

“Everyone realises our energy is changing,” said Emma Bridge, chief executive at Community Energy England, the organisation which represents the sector. “The public want more local involvement and to take practical action on climate change.”

Early promise Government support through subsidies and tax incentives helped promote investment in small-scale renewable projects and fuelled the sector’s growth from 2010. Several policy changes and cuts to the incentives, however, led to a steep drop in new schemes. Despite the changes, the falling cost of renewables, combined with advances in battery

storage and the prospect of selling electricity locally, are giving a new impetus to community energy projects.

These projects come together when residents join forces in the form of a co-operative society, which owns the local scheme. The society raises money through share and bond offers to develop a project. Any profits are fed back into local causes.

The schemes can range from solar panels on a school roof to a 5 megawatt wind farm, and can be used to generate lower-cost power on-site — for a community centre, for example — or wholesale energy that is fed into the national grid. At the moment, given the structure of the UK power market, any electricity produced locally by a community energy project is not bought directly by local residents for their own usage.

Last year research by Community Energy England identified 222 organisations in England, Wales and Northern Ireland with active local schemes operating wind, solar or hydro.

They had raised £190m of investment.

Together with the Scottish sector, community energy projects have 188MW of generation capacity installed — enough to power about 130,000 homes, the research found.

Growing investor appetite How fast the sector will grow is unclear. Even if the community spirit is there, the financial and legal expertise often is not. One of the issues, said Ed Reed, associate director of research at Cornwall Insight, a consultancy, is that “Britain’s energy industry and its legislation have traditionally been premised on large-scale generation”.

The market rules and regulations are all designed for national-scale players, while accessing funding requires a degree of knowledge. New companies are beginning to fill the gap. Among these is Mongoose Energy, which helps develop and finance schemes. Its projects are funded through a combination of bank loans, funding from social capital providers and community fundraisers.

US 10-year Treasury eyes steepest weekly rally since April 2017 JOE RENNISON

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merica’s benchmark 10-year government note is on track for its biggest rally this week in more than a year, with investors bidding up perceived havens amid emerging risks in Europe and dovish messaging from the Federal Reserve.

US Treasury yields, which move inversely to price, continued to fall on Friday. The yield on the 10-year has fallen 12 basis points (0.12 percentage points) since its closing level on Friday, its biggest one-week decline since April 2017.

It comes after consternation surrounding the election of two populist parties in Italy encouraged investors into the perceived safety of US government bonds. At the same time, minutes released on Wednesday from the latest meeting of the Fed were read to suggest the central bank is willing to let inflation run above its target level of two per cent, potentially resulting in fewer increases to interest rates.

On Friday, the 10-year yield lurched lower, down 4 basis points

to 2.93 per cent, its lowest yield since the start of May and encroaching on its 50-day moving average of 2.91 per cent. Bond markets observe Memorial day weekend in the US, to remember those who died in military service, and will close early today at 2pm ET. The two-year Treasury yield also fell but by a smaller amount, dropping 3 basis points to 2.48 per cent and further “flattening” the yield curve, meaning the difference between shortdated and longer-dated treasury yields declined. The 30-year long bond fell 4 basis points to 3.09 per cent.

“Assuming that [Fed chief ] Powell manages to stay the course through June and September, the curve will be under immense pressure. However, if the FOMC blinks and pauses on its gradual path to higher rates, this will trigger a very meaningful resteepening,” said Ian Lyngen at BMO Capital Markets.

“Wednesday’s more dovish interpretation of the Minutes showed hints that the hawkish sentiment on the Committee might be moderating (at least somewhat), leaving an earlier pause as the most significant risk to the flattener.”

The Good Life, starring Felicity Kendal and Richard Briers, promoted a self-sufficient lifestyle

Smiths Group and ICU Medical in talks over healthcare merger UK engineering business explores options for medical device unit MICHAEL POOLER AND ARASH MASSOUDI

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K engineering business Smiths Group has held earlystage discussions with a USlisted company ICU Medical about a potential merger of their medical device businesses.

The FTSE 100 industrial conglomerate has for some time been exploring options for its medical unit, which makes healthcare products used in hospitals and played a role in the first successful test tube baby, according to two people close to the situation.

These have included talks about a potential combination of the unit with ICU Medical, a company based in California and quoted on Nasdaq with a market capitalisation of $5.6bn.

Other options have also been

examined. One possibility was that Smiths Medical would be injected into ICU Medical and that Smiths Group would retain a stake in the new enlarged entity, one of the two people added.

However, one person close to the company cautioned that the talks with ICU, which were first reported by Sky News, were still at an early stage and there was no certainty of a deal happening. ICU makes intravenous pumps and devices used in oncology.

Smiths Medical generated revenue of £951m in its most recent financial year, against a figure of $1.29bn (£970m) at ICU Medical.

If any deal were to happen, it could go some way to reshaping the portfolio of one of the few remaining conglomerates listed on the London Stock Exchange. Smiths started out as a jewellery shop in 1851 and floated days before the

outbreak of the first world war.

Today, it has five divisions that supply a range of products from airport X-ray scanners for the detection of explosives to mechanical seals used in crude oil pipelines.

Medical devices is its single largest business, with a portfolio of products that includes infusion pumps and mechanical ventilators. In 1978, its embryo transfer catheters played a vital role in the conception of Louise Brown, the first IVF baby.

The unit has been the subject of merger and acquisition speculation before. An approach by private equity group Apax to buy the division for about £2.45bn was rejected in 2011.

Over the past decade, Smiths has been viewed by analysts as a target for dismantling due to its collection of disparate businesses.

The Jabberwocky world of bitcoin Clear Leisure, a minnow with a technicolour history, is digging into cryptocurrency mining KATE BURGESS

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ast week Small Talk followed Clear Leisure, a small Aimlisted company, into the Jabberwocky world of bitcoin where words — whether hash, sat or shilling — have entirely new meanings.

In cryptocurrency land, a nonce is apparently a 32-bit field rather than a category of prisoner. Hodl is not a fatfinger typo but advice to hold on for dear life, sat is a millionth of a bitcoin and shilling is trickery.

Apparently “When Lambo?” means “when will I be able to cash in my coins and buy a Lamborghini.

When will I be rich?”

It is as baffling to Small Talk as Lewis Carroll’s nonsense poem Jabberwocky where “the mome raths outgrabe”.

Yet last week Francesco Gardin, chairman of Clear Leisure, a £4m titch whose technicolour history should stimulate the senses of the most supine watchdogs, raised £600,000 to delve into blockchain and cryptocurrencies.

The 63-year-old reckons Clear Leisure has an edge over the everincreasing mass of bitcoin bright sparks.

This is the one-time Italian

lecturer on computers and algorithms who founded a technology incubator called Brainspark in 2000.

He chaired it until 2011 when the group’s name was changed to Clear Leisure and its focus shifted to collecting leisure assets in Italy. That included Mediapolis, a 400-acre site it hoped — forlornly — to turn into a vast theme park. Mr Gardin was brought back to run Clear Leisure in 2015 after the shares fell below 1.5p.

Clear Leisure seems to have been its own world of nonsense for a while.

In the past five years it has been embroiled in countless legal actions and had four nominated advisers. One of its nomads — Westhouse — tried in 2015 to wind up the business to extract unpaid fees. Another — ZAI Corporate Finance — was stripped of its licence last year forcing Clear Leisure to find a replacement or delist.

Twice the company has suspended its shares, having been unable to publish its accounts.

Luke Johnson, serial entrepreneur, was Clear Leisure’s chairman for a year until resigning in October 2013, days before the company revealed financial irregularities in African subsidiaries. Mr Johnson, who still owns a 5 per cent stake, is clearly scarred by the experience.

Last year he wrote in the Sunday Times of his investment in an Italian company that “appeared to be trading at a fraction of its balance sheet value. Unfortunately the figures were nonsense . . . I discovered too late why Italy ranks 60th in the Transparency International Corruption Perceptions Index.”

Since Mr Gardin’s return, he has been unravelling Clear Leisure’s web of investments and establishing the group’s title to assets to sell what he can.

That is the core job, he says. But last year he turned his mathematical mind towards cryptocurrencies and particularly blockchain, the peer-topeer digital ledger where “miners” use high-powered computers to chase down and verify transactions in return for coins.

“We saw an opportunity to explore blockchain technology with moderate investment of €200,000,” said Mr Gardin beamishly.

Clear Leisure is working with Malta-based data centre 64Bit to create a mobile mining centre which will pool its power with other miners using state of the art machines. It is starting in Serbia, but its containers will be trucked to wherever energy prices are lowest.

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Monday 28 May 2018

BUSINESS DAY

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NEWS YOU CAN TRUST I MONDAY 28 MAY 2018

Opinion Okonjo-Iweala’s big reminiscence day in London GLOBAL PERSPECTIVES

OLU FASAN Dr. Fasan, a London-based lawyer and political economist, is a Visiting Fellow at the London School of Economics. e-mail: o.fasan@lse.ac.uk, twitter account: @olu_fasan

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wo weeks ago, on 16 May, Dr Ngozi O k o n j o - Iw e a l a, Nigeria’s two-time finance minister, who was also foreign minister, came to the London School of Economics. Her mission was to talk about her latest book, “Fighting Corruption is Dangerous”, an account of her personal travails as the powerful but controversial finance minister under the Goodluck Jonathan administration. It was an evening full of reminiscences. If OkonjoIweala is without honour in her native country, as trenchant criticisms of her in Nigeria would suggest, she is certainly a big global figure, celebrated abroad. The presence of former British Prime Minister Gordon Brown and his wife, Sarah, at the event attests to this.

The event was hosted by the International Growth Centre, a joint LSE-Oxford University policy research centre, and the Firoz Lalji Centre for Africa, both with which I have academic affiliations. Introducing Dr Okonjo-Iweala, Professor Jonathan Leape, executive director of the IGC, described her as “an extraordinary individual”, and hailed her “personal and political courage”, her determination, amid personal attacks, to undertake “long-term institutional reforms” and “root out corruption” in Nigeria.

Many Nigerians would, of course, balk at those descriptions of Dr Okonjo-Iweala, given her very controversial and broadly negative public image in Nigeria, particularly during her second time as finance minister when she became Nigeria’s de facto prime minister under a weak and rudderless president. But to the international community, her real constituency, OkonjoIweala, who is currently chair of the board of GAVI, the global health body, is a hallowed figure. And she was feted as such at the London event.

The talk took the form of a Socratic dialogue, a conversation, rather than a lecture, with Dr Okonjo-Iweala, who was accompanied by her husband, Ikemba Iweala, fielding questions. Anchoring the conversation was the Director of the LSE, Dame Minouche Shafik, who has similar career trajectory as Dr Okonjo-Iweala.

Dame Minouche was vice president of the World Bank, permanent secretary of the UK Department for International

Development, deputy managing director of the IMF and deputy governor of the Bank of England before she became the Director of LSE last year!

Indeed, Dame Minouche has known Dr Okonjo-Iweala for more than 20 years, since they were both at the World Bank. Unsurprisingly, she started with an anecdote. “I still remember the day that Ngozi told me she was going to leave the relatively comfortable life of the World Bank to be finance minister of Nigeria”, the LSE Director recalled. “I just looked at her and said, ‘Ngozi, that’s one of the hardest jobs in the world’”. She added: “and then she did it twice!”. This was, she posited, “a testimony to her courage and determination”.

But Dr Okonjo-Iweala said she was driven by a commitment to public service, an ethos inculcated in her by her father, Professor Chukwuka Okonjo, himself a renowned economist. She recalled how, as a teenager, her father stopped her from going on holiday abroad with her friends because the cost of the ticket would have paid for the secondary education of four or five students! “That’s the home I came from”, she said. “But at home, people have lost that; they’ve lost faith. They don’t believe anyone can serve their country, and it’s sad”, she lamented. “So I went back to show young people that there are people who love their country, who want to serve”.

That’s a gushing protestation of patriotism and altruism, but none should gainsay it.

she said, is that “part of the money for the treasury are diverted to finance political campaigns”. That’s an open secret, I would say, but coming from the two-time finance minister, it’s revelatory. Surely, alarm bells must start to ring as the National Assembly approves a pre-election 2018 budget likely to be about N10 trillion! With Nigeria’s lax campaign finance law, even a Saint Buhari won’t resist the temptation to use public money to secure electoral advantage!

Still fielding questions, Dr Okonjo-Iweala responded to one about why some countries, such as China, develop with corruption. It’s better to develop without corruption, she cautioned, but said there are many reasons why countries develop faster than others. She gave two. First, countries that have more cohesion, a social contract and common vision for the future are likely to do better. Second, countries where there is policy consistency will perform better than those with policy inconsistency. She regretted that Nigeria lacks cohesion and a common purpose, and, of course, policy consistency.

Then came a trick question: Of the two presidents, Obasanjo and Jonathan, under whom she served, who fought corruption more and who was more relaxed about it? Okonjo-Iweala saw the booby trap and avoided it. “I am not going to enter into a comparison of presidents”, she said, adding that both leaders had very different styles and managed issues vastly differ-

Her failure to answer the question was probably an oversight. But it’s the kind of question no leader must duck because embedded in the answer is the humility that must go with greatness From personal motivation, the discussion then moved to policy issues. What are the root causes of corruption in Nigeria? She was asked. She said there were many but would focus on two. First is weak institutions, particularly weak financial systems and processes, such as the “cashbased system” that Nigeria ran until she helped build a government-integrated financial management system. Second is Nigeria’s costly presidential system and its impact on elections. The “little dirty secret”,

ently. But in an apparent dig at President Jonathan, she said his administration didn’t get the communications right.

“You need to send the right signals from the top, you need to make it clear to people what you stand for, and, finally, you need to execute”.

At this point, the conversation shifted back to the personal. How did she sustain the personal attacks? She was asked. She answered, sounding downbeat, “It was hard”.

Her mother was kidnapped, and she was asked to resign.

“But when I saw that there was such an intense desire for me to resign”, she said, “I decided that I must be doing the right thing”. He continued: “For those who want to know why I did not resign: I could have”, adding: “At the end of the day, we saved about $9 billion”!

Put counterfactually, had she not stayed put, Nigeria would have lost a whopping $9 billion!

So, then, what makes an effective finance minister?

She listed four qualities: First, technical skills – knowing what policy levers can move an economy. Second, extraordinarily thick skin. Third, political skills, but admitted: “I wasn’t very good at that”.

And fourth, trust and respect with the boss. She said she enjoyed this as she was “never stopped” at the top from doing anything, “but things were not going right elsewhere”.

For me, her admission of lack of political skills resonated strongly. President Obasanjo said in an interview in 2015: “Ngozi’s strong point is technical expertise. But she needs to be led and supervised”. In other words, she lacks political competence.

Dr Okonjo-Iweala is an outstanding technocrat, but she is politically naïve. She lacks the political savviness that a technocrat needs to operate successfully in a political environment. What’s more, she doesn’t understand what’s at the heart of Nigeria’s problems. She sees the answers to Nigeria’s problems purely through the prisms of economic policy and economic institutions rather than politics. For instance, despite her views about the unsuitability of the presidential system for Nigeria and the lack of unity and cohesion in the country, she was somewhat dismissive of a question about Nigeria’s flawed political structure. Yet, the problems she identified in her books can only seriously be addressed through restructuring, which, by the way, is not about breaking up Nigeria, but about giving it a new political settlement and a fit-for-purpose politicogovernance structure.

Secondly, I detected some hubris. She spoke like a flawless sage, with little capacity for self-criticism. Interestingly, she answered every question posed except one from a lady who asked: “I am curious about what mistakes you felt you made and what you would do better”. Her failure to answer the question was probably an oversight. But it’s the kind of question no leader must duck because embedded in the answer is the humility that must go with greatness.

That said, Dr Okonjo-Iweala is rightly celebrated. As Gordon Brown said powerfully at the event, “You are talking about a finance minister, but more than that someone who’s got something to say about the future of the world and the future of Africa”. He’s right. Absolutely!

fivethings for your new week

Fascinating business facts $80m

South Africa is investigating an alleged cryptocurrency scam that defrauded investors of 1 billion rand ($80 million) with promises of huge returns that never materialised, police said on Friday. The fraud investigation involves a company named BTC Global, which told clients they would earn 2 percent per day, 14 percent a week and 50 percent in a month, the police said.

A search for the company on the internet showed its services had been suspended. The website lists Steven Twain as the “primary trader”

41% Botswana’s telecoms regulator says its order that the three mobile phone companies cut fees they charge rivals to use their network by 41 percent has been endorsed by a local court. The ruling comes after Mascom, the country’s biggest telecoms company, filed a court application last July seeking to have the Botswana Communications Regulatory Authority’s (BOCRA) directive declared illegal, improper and irrational.

2.7m

Kenya built a reputation as a pioneer of financial inclusion through its early adoption of a mobile money system that enables people to transfer cash and make payments on cellphones without a bank account. Now, a proliferation of lenders are using the same technology to extend credit to the banked and unbanked alike, saddling borrowers with high interest rates and leaving regulators scrambling to keep up. In the last three years, 2.7 million people out of a population of around 45 million have been negatively listed on Kenya’s Credit Reference Bureaux, and for 400,000 of them, it was for an amount less than two dollars.

$27bn

Business in the UK will face extra bureaucracy costing up to £20bn or more than $27bn a year if Britain opts for the “max fac” customs deal with the EU favoured by Brexiters, the head of HM Revenue & Customs has claimed.

In a dramatic intervention in the Brexit debate, Jon Thompson said the extra form-filling facing British and foreign companies as they crossed a proposed “streamlined” customs border could cost £17bn-£20bn, around twice the size of Britain’s net annual contribution to the EU budget.

10.7m

The US oil export infrastructure is straining to cope as the country’s crude oil exports hit new highs and China snaps up more of it than ever before. US crude production has surged to a record 10.7m bbl/day, driven largely by growth from the Permian shale patch in West Texas, which pumps more than 3m bbl/day.

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