BusinessDay 28 Oct 2019

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news you can trust I **MONDAY 28 OCTOBER 2019 I vol. 19, no 422

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Nigeria’s $700m gas transmission pipeline remains in limbo …as project misses 3 completion dates DIPO OLADEHINDE

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igeria’s largest gas transmission pipeline, the Oben-Obiafu-Obrikom (OB3) pipeline with capacity of 2 billion standard cubic feet of gas per day (2bscf/d) worth $700

ot a single trade was done in the Treasury bills (Tbills) market last Friday as investors sought clarity over a directive from the Central Bank of Nigeria (CBN) banning individuals and local non-financial firms from buying short-dated

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Inside

MARKETS

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government securities.

The directive is part of efforts by the CBN to boost lending to the real sector which has dried up since an economic recession in 2016. With economic growth still

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Nigeria’s fixed income market freezes up on CBN OMO ban as counterparties shut out

fgn bonds

Treasury bills

L-R: Kanayo Awani, managing director, Intra-African Trade Initiative, AfreximBank; Bashir Hadejia, Zamfara State official; Olamilekan Adegbite, minister of solid minerals; Benedict Oramah, president/CEO, AfreximBank; President Muhammadu Buhari; Bello Muhammad Matawalle, governor of Zamfara State; Ifie Sekibo, MD/CEO, Heritage Bank plc, and Chris Oshiafi, managing director, Pan African Capital, during a meeting to brief President Buhari on the Afreximbank cooperation with Zamfara State for solid mineral development put together by Heritage Bank and PAC, in Sochi, Russia.

Five years after, FG fails to deliver N4.8bn aerobridges P. 2

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news Growth in production level drives manufacturing PMI expansion in October HOPE MOSES-ASHIKE

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L-R: Angela Adebayo, wife of minister of industry, trade and investment/member of board of trustees, Aliko Dangote Foundation; Halima Aliko Dangote, executive director, Aliko Dangote Foundation; Aliko Dangote, chairman/founder, Aliko Dangote Foundation; Aminu Tambuwal, governor, Sokoto State, and Zouera Youssoufou, managing director, Aliko Dangote Foundation, during the flag-off ceremony of Dangote Micro Grant Scheme for 23,000 women in Sokoto State.

Five years after, FG fails to deliver N4.8bn aerobridges

…aircraft towing persists as NAHCO, SAHCO pocket N985m yearly IFEOMA OKEKE

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ive years after the Federal Government bought and commissioned 28 aerobridges in China, it has failed to deliver them into the country, BusinessDay findings show.

Our calculations indicate that these aerobridges may have cost the government about N4.8 billion. This is given that India, which procured and installed aerobridges in 2017, paid about $565,095 for each aerobridge. For Nigeria, this would amount to about N173 million at an exchange rate of N306 to a dollar, meaning that it would have cost the government N4.8 billion to procure the 28 aerobridges.

BusinessDay learnt from a source close to the Federal Government that in 2014, during the remodelling of the airports, about 28 aerobridges were bought and commissioned and some government officials

went to see them in China.

The source, who pleaded anonymity because of the sensitivity of the issue, said out of the 28 aerobridges, 14 were to be installed in Murtala Muhammed International Airport (MMIA) while the remaining 14 were to go to other airports.

Up till now, however, the bridges haven’t been shipped in.

“The then airport manager was one of those that went to check the bridges in China and those bridges are still there. We have been begging them to bring them in. When we have something like that still hanging, it is very difficult to request for new ones,” the source said. “To us, it is not easy because the airlines are always on our neck. Passengers wait in the aircraft for several minutes for the aircraft to be towed into the aerobridge.”

The source said the bridges at the airports now are old

and are not meant for the current aircraft type in operation as they were built when 747s were the biggest aircraft.

The absence of automated bridges has meant that airlines operating in Nigeria consistently spend millions of naira annually just to tow their aircraft into the aerobridge, a point to disembark passengers after landing. In other climes, airlines taxi their aircraft into the aerobridge but in Nigeria, airlines pay ground handling companies over N985 million annually to tow their aircraft into the aerobridge. This process has continued to constitute unnecessary delays to passengers who are forced to remain in the aircraft for 15 to 20 minutes after landing for the aircraft to be towed.

BusinessDay’s checks show that all 30 international airlines operating in Nigeria pay nothing less than N985,500,000 annually into

the coffers of the Skyway Aviation Handling Company (SAHCO) and Nigerian Aviation Handling Company Plc (nahco aviance) to tow their aircraft into the stairways, which is the disembarkment point for passengers.

Figures from the Nigeria Civil Aviation Authority (NCAA) on passenger movement indicate that international airlines operate 30 flights on the average from MMIA daily. This implies that in 365 days, the airports will process nothing less than 10,950 flights.

Ground handling companies charge airlines $250 per towing. This implies that airlines pay nothing less than $2.7 million every year to tow their aircraft into the finger, which amounts to N985,500,000 using an exchange rate of N360 to a dollar.

•Continues online at www.businessday.ng

FG, oil majors’ dispute opens investment space to China, Russia ISAAC ANYAOGU

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he fractious relationship between the Nigerian government and International Oil Companies (IOCs) is creating oil exploration and marketing opportunities for Chinese and Russian companies as a cashstrapped Federal Government now seems impatient to wait for investment decisions by the IOCs. In August, Mele Kyari, the Nigerian National Petroleum Corporation (NNPC) boss, said Chinese investment in Nigeria’s oil and gas industry has reached $16 billion but the Asian giant is not relenting.

From 2019 to 2023, Chinese national oil companies’ – China National Petroleum Corporation (CNPC), China Petroleum & Chemical Corporation (SINOPEC) and China National Offshore Oil

Corporation (CNOOC) – development and production capital expenditure (Capex) in Africa’s upstream sector is projected to reach $15 billion.

The combined investment from these Chinese oil companies is the fourth highest in the time period, behind BP plc, Royal Dutch Shell plc and Eni SpA investments in Africa.

Chinese money is helping ramp up production from the Egina field in Nigeria.

Egina commenced production at the end of 2018 and is expected to reach peak production of approximately 200,000 barrels of crude oil per day (bpd) in 2019.

CNOOC, the biggest China’s offshore sector investor, spent $2.3 billion in 2006 to acquire 45 percent stake in Nigeria’s OML 130 deepwater licence, a lucrative contract that holds the Akpo and www.businessday.ng

Egina fields.

Following the RussiaAfrica summit held in Sochi last week, the Federal Government said it would seek Russia’s help in reviving Nigeria’s moribund oil refineries through the establishment of a framework for a joint venture between the Nigerian National Petroleum Corporation (NNPC) and Russia’s second-biggest oil company, Lukoil.

Most IOCs have refused to touch refining business in Nigeria on account of government subsidies that make it unprofitable. In 2016, ExxonMobil divested its 60 percent stake in Mobil Oil Nigeria, thus leaving Total as the only IOC operating in the downstream sector. Globally too, oil majors like Shell are divesting from refining as it becomes less profitable with the proliferation of refineries in Asia. As global bodies

awaken to the threat of climate change, gas offers more opportunities for cleaner energy and guilt-free profit.

Nigeria and Russia also agreed to revive and solidify the venture between the NNPC and Russia’s gas giant, Gazprom, in order to develop Nigeria’s huge gas potential and infrastructure as well as explore some of Nigeria’s oil in the deep offshore, an area once the exclusive preserve of the oil majors.

Though major oil companies like Shell, ExxonMobil, Eni and Chevron have huge assets in Nigeria, further investments into the country’s energy sector have been few and far between in the past decade. They blame this on the lack of fiscal and regulatory reforms in the country as seen in the inability to pass a petroleum industry bill.

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•Continues online at www.businessday.ng

he Purchasing Managers Index (PMI) of the manufacturing sector expanded faster to 58.2 points in October from 57.7 points in September, driven by the production level which grew by 59.3 index points this month.

Similarly, composite PMI for the nonmanufacturing sector stood at 58.2 points in October 2019, indicating expansion in the non-manufacturing PMI for the 30th consecutive month. The index grew at a faster rate when compared to its level of 58.0 points in September 2019.

The Central Bank of Nigeria (CBN) on Friday released the PMI for the month of October, which revealed that production level, new orders, supplier delivery time, employment level and raw materials inventories grew at a faster rate in October 2019.

A composite PMI above 50 points indicates that the manufacturing/non-manufacturing economy is generally expanding, 50 points indicates no change, and below 50 points indicates that it is generally contracting. The sub-sectors reporting growth are listed in the

order of highest to lowest growth, while those reporting contraction are listed in the order of the highest to the lowest contraction.

The manufacturing PMI report showed expansion in the manufacturing sector for the 31st consecutive month.

Thirteen of the 14 surveyed subsectors reported growth in the review month. These include petroleum and coal products; cement; electrical equipment; furniture and related products; fabricated metal products; printing and related support activities; textile, apparel, leather and footwear; food, beverage and tobacco products; nonmetallic mineral products; plastics and rubber products; primary metal; chemical and pharmaceutical products; and transportation equipment.

The paper products sub-sector recorded decline in the review period.

At 59.3 points, the production level index for manufacturing sector grew for the 32nd consecutive month in October 2019. The index indicated a faster growth in the current month, when compared to its level in September 2019.

•Continues online at www.businessday.ng

MDAs enticing committees to beat budget defence deadline …as NASS resumes Tuesday ...Senate may suspend plenary for one week SOLOMON AYADO, Abuja

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ith the National Assembly billed to resume on Tuesday, some ministries, departments and agencies (MDAs) are said to be seriously enticing committees to hurriedly adjust the schedule to enable them appear to defend their budget in order to beat the October 30 deadline.

Sources within the National Assembly disclosed that already, some heads of the MDAs that are yet to appear have made frantic attempts to reach chairmen of the committees with perks so that their presentations would be rescheduled within the budget defence timeframe.

It was further gathered that some of the committees have hurriedly fixed to receive the MDAs on Tuesday which is the deadline, and there is serious possibility that not all the agencies would have the opportunity to make their presentations because they are many.

Particularly in the Senate, there are well over 600 MDAs that were billed to defend their budget before the 68 committees of the upper legislative @Businessdayng

chamber. As at Friday, it was gathered that only about 75 percent of the MDAs have showed up to defend their budget.

Some MDAs that appeared were turned back due to absence of their heads. The committees hinged their action on the reason that they would not attend to managers of the agencies in representative capacity.

The National Assembly had adjourned for two weeks to pave the way for budget defence by MDAs and had also fixed resumption on October 29.

Senate President Ahmad Lawan had explained that the adjournment was to hasten the passage of the 2020 budget and to revert to January-December budget cycle.

According to the timetable, Lawan announced that budget defence by MDAs which began on Wednesday, October 16 was to last till October 30.

Consequently, the Senate president insisted that any head of MDA that could not appear before the committees for the budget defence on the assigned date “should not come again and at such, consider its budget not defended”.

•Continues online at www.businessday.ng

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Osinbajo, Obaseki identify Nigeria’s cultural diversity, unity as strength at NAFEST townhall

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ice President Yemi Osinbajo has linked Nigeria’s unity to the cultural diversity of its peoples, adding that beyond oil, tourism harbours immense potentials for the nation’s growth and development.

Osinbajo, who was in Edo State to participate in the 2019 National Festival for Arts and Culture (NAFEST) hosted by the state, visited the palace of the Oba of Benin, His Royal Majesty, Omo N’Oba N’Edo Uku Akpolokpolo, Oba Ewuare II. The Vice President also had an interactive session/ town hall meeting with market women, religious leaders, artists, traditional rulers, students and concerned citizens of the state at the Oba Akenzua Cultural Centre.

Osinbajo, who was received by the Edo State governor, Godwin Obaseki, his deputy, Philip Shuaibu and other executive members of the state at the Benin Airport, commended the governor for his efforts in repositioning Edo State as the foremost destination for investment and tourism.

Obaseki said his administration was committed to leveraging on the state’s cultural capital to drive investment in the tourism sector, noting that tourism is one of the key pillars of his administration’s agenda.

NAFEST has provided the platform for Edo State to showcase its cultural heritage to the world, he said, adding, “We have great value to offer to the world in terms of Art and Culture. We believe that within our tradition, we possess a culture of tools with which we will possibly change our future for the better.

“Benin is already on the map of heritage sites in the world and the next level for my administration is to translate these cultural assets into a hub to attract international tourists’ traffic. For us, entering the next level means manifesting the greatness of Edo State through tourism as one of the pathways of sustainable growth and prosperity in the post-oil future.”

The governor said culture and tourism was a powerful tool for progress, noting that his administration believed in the power of culture in bringing people together.

He added, “Culture is a uniting force and when we dig deep into the treasure of our heritage, we will find a means to achieve unity in diversity.”

Earlier, the Vice President noted that Edo State Government is pursuing a cultural agenda which includes the recovery of its lost treasures across the world, describing Benin City as a “veritable citadel of culture and an ancient city in the seats of splendour with the finest cultural tradition.”

Helicopter gunships to boost operations - NAF Stella Enenche, Abuja

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he Nigerian Air Force (NAF) says the two helicopter gunships being expected before the end of the year will change the course of its ongoing operations in the North East and other parts of the country.

BusinessDay recalls that the Chief of Air Staff, CAS, Air Marshal Sadique Abubakar, disclosed this at a recent quarterly conference with branch chiefs, Air Officers Commanding and directors of the service.

Buttressing this in an interview with our correspondent,

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the NAF’s spokesperson, Ibikunle Daramola, said the attack helicopters would definitely add “impetus” to operations.

“Not just the fight against insurgency but also against other forms of criminality like armed banditry and the others. The attack helicopters that are coming in, will add significant impetus.

One in terms of deployment, conducting arms reconnaissance missions, live attack missions.

“They will add considerable value to what the Nigerian air force is already doing. As you already know we have conducted

a lot of operations against insurgency and other adversaries in the north east so, this will also add to the abilities to strike in those location while providing support to other forces in the operations.”

Daramola said there was an “excellent” synergy between the force and other sister agencies.

His words: “For internal security operations, there is no way we can operate effectively without working with the ground forces like the Army and the Navy, which is operation “delta safe” in the South- South and even operation “ Awatse” in the Lagos area.

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Operation “thunder strike” along Abuja -Kaduna expressway is a multi-agency operation with the police, civil defence, everybody working to ensure there is security for Nigeria and Nigerians so there is unquestionably high level of synergy between the air force and other security agencies to ensure that all the successes recorded, whether it is the police declaring the success, the air force or the army, that there are always degrees of involvement of other security agencies in successes recorded.”

Speaking on proposed acquisition from Pakistan, Daramola

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said: “The JF - 17 is a multi-role attack aircraft. It’s a fighter jet. There are three of them coming from Pakistan. It is different from the two attack aircrafts coming from Italy. As for the two aircrafts from Italy, the process is still ongoing and timelines will be known later.

“The Pakistani chief of air staff came here (Nigeria Air force headquarters) and assured that he is doing everything within his powers to ensure that we get them at the earliest time possible and the Federal Government is giving immense support to ensure that it becomes a reality.”

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Why should we care?

(First of eight series)

BASHORUN J.K RANDLE

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et me start by heartily commending the founders of Dowen College – Dr. & Dr. (Mrs.) Olumide Philips for the great success they have made of their joint enterprise and noble endeavour in establishing a school which in the twenty-two years of its existence has become a national treasure with students from different parts of our nation and beyond – in the pursuit of excellence in education.

It was very brave of them to grant me the latitude to choose any subject for my address. I have with considerable restraint settled for the title: “Why should we care?”

Indeed, we are entitled to believe that the founders of the school were prompted by the same formidable challenge and perplexing dilemma – why should they care to educate other children, having successfully educated their own children to the highest level in the world? This is in addition to agonising over our nation’s moral quality.

Who is going to rescue our nation; and why should we care whether or not redemption comes the way of Nigeria?

The English playwright William Shakespeare (1564 to 1616) has served us notice along with a powerful warning in “Twelfth Night” “Care is an enemy to life.”

Regardless, even if it means putting our lives at risk, we must care for all those who have gone through the portals of Dowen College. However, we have to (consequentially) deal with another problem – where do we draw the line? Are we going the full hog? – a lifetime of caring without pausing to ask ourselves the question begging for an answer: What have we got in return for the sacrifices we have made for our children and our nation?

Should we cut our losses now or persist in the belief that if we persevere, deliverance and abundant reward will eventually come our way? Our own generation was only too eager to reward our parents for the sacrifices they made in order to give us the best but are we entitled to reciprocity from those who are graduating from Dowen College where the school fees for quality education do not come cheap?

Another complication which has infiltrated our consciousness is how will the excellent products of Dowen College fit into the rest of society where the deplorable are in vicious competition with the ruthless for whom scruples have no meaning whatsoever? We are launching them into the Jetstream of the uneducated – to swim or drown. They are very vulnerable and we can only pray that they do not fall prey to those who, out of envy and resentment, are already plotting their revenge against those they consider overprivileged and overpampered. They subscribe to the view: “The sins of the father must be visited on the children.”

Regardless, we must endeavour to fortify the students of Dowen College, with the strictures delivered by the late Martin Luther King (1929 - 1968): “If you can’t fly then run, if you can’t run then walk, if you can’t walk then crawl, but whatever you do, you have to keep moving forward.” As for Albert Einstein (1879 – 1955), his focus was not on movement. Rather, it was on imagination: “Imagination is everything. It is the preview of life’s coming attractions.”

Hence, it is our duty as parents to teach our children to dream big but work hard. They are the builders of the future.

We have done our bit and the choice of when to take a bow may not be in our hands. However, before we exit, we have an obligation to fulfil our duty of care and thereby inspire the next generation.

It is a monumental task and whether we succeed or fail depends on the outcome of rigorous soul-searching. Having fast-tracked the products of Dowen College into the lane reserved for the privileged, why should we care whatever befalls them in the arena of economic, financial and social inequality?

Let us ruminate on the GINI index. Ac-

cording to the World Bank Development Research Group, the result of a survey carried out in 2009 stated that Nigeria had an estimated GINI index of 43.0 percent. A subsequent assessment made by the CIA in 2013 showed that inequality was on the rise scoring the prevalence of income inequality in Nigeria at 48.8 percent, a 5 percent increase after four years. Meanwhile, the National Bureau of Statistics (NBS) claims a GINI Index of 41 percent for 2013 which would entail a 2 percent decrease in the inequality index for the same period.

As at 2016, a survey carried out by the NBS declared the GINI Index for Nigeria to be at 39.1 percent which connotes a downward trend in inequality in Nigeria. With regard to our country’s commitment to reducing the prevalent inequality within our nation, a 2018 report released by Oxfam during the annual International Monetary Fund and World Bank (IMF/WB) meeting held in Bali, Indonesia between October 12 – October 14 2018 scored Nigeria as dead last in the CRI (Commitment to Reducing Inequality) amongst 157 sovereign nations which were assessed.

The report gave a scathing description of Nigeria’s lack of commitment to closing the inequality gap stating that: “Nigeria remains at the bottom of the CRI Index, failing the poorest people, despite its President claiming to care about inequality.

Nigeria has the unenviable distinction of being at the bottom of the Index for the second year running. Its social spending (on health, education and social protection) is shamefully low, which is reflected in very poor social outcomes for its citizens. One in 10 children in Nigeria does not reach their fifth birthday, and more than 10 million children do not go to school. Sixty percent of these are girls.

The CRI Index shows that in the past year Nigeria has seen an increase in the number of labour rights violations; the minimum wage has not increased since 2011; and social spending has stagnated.

The CRI Index shows that there is still significant potential for Nigeria to raise and collect more tax, so it scores very badly on this aspect too. There have however been very recent improvements in this

‘

We are now in mortal danger of handing over to the next generation a nation that is in chaos – where insurgency, banditry, kidnapping, human trafficking, rape, drug trafficking, abuse of power, injustice, looting and impunity are the order of the day. It is a poisoned chalice

area in 2018, which will show up in next year’s CRI. The IMF has given clear advice on the importance of tackling inequality, referring to Nigeria’s score in the CRI Index. The President of the country has also said that tackling inequality is important, as inequality leads to political instability.

Yet little has been done. We are now in mortal danger of handing over to the next generation a nation that is in chaos – where insurgency, banditry, kidnapping, human trafficking, rape, drug trafficking, abuse of power, injustice, looting and impunity are the order of the day. It is a poisoned chalice.

Before we surrender in despair, we may have to deal with the choice that faced apartheid South-Africa while Nelson Mandela was still in jail. In the midst of their crisis, the Almighty gave them two choices – either pray for a miracle and divine intervention to solve your problems while you slumber or choose the much tougher option which is for all of you to put heads together to find a solution. South Africa chose the hard route. Rather than pursuing rigid adherence to dogma and prejudice, they chose peaceful reconciliation.

That is how they survived and prospered – rather than fight each other until the last drop of blood. In Nigeria, poverty is the new enemy. Our report card shows very clearly that we have failed every subject. Our hope lies in the investment we have made in the students of Dowen College and other private colleges while the public schools, colleges and universities are in ruins. Unfortunately, Nigeria’s finest are leaving in droves out of frustration.

The truth is that while Dr. & Dr. (Mrs.) Phillips can deliver a robust thesis on all that ails our nation, it is the students whom they have groomed and nurtured who can provide the anti-thesis (the theoretical options). However, it is the combination of Thesis and Antithesis which will crystalize into SYNTHESIS and thereby deliver demonstrable progress and salvation – from mendacity and self-destruction.

(Address delivered at Dowen College, on 7th October 2019) Randle is Chairman/Chief Executive JK Randle Professional Services Chartered Accountants

Directors attendance and participation at board meetings

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director stands in a fiduciary relationship towards the company and shall observe the utmost good faith towards the company in any transaction with it or on its behalf. He/she is therefore expected to devote such time and attention as is necessary for the proper performance of his/her duties as a director. Attendance and effective participation at board meetings are crucial to the performance of a director’s responsibility to the company, the effectiveness of the board and by extension the success of the enterprise.

By the provisions of the Companies and Allied Matters Act, the board is at liberty to determine how often it shall meet. The Act provides that “the directors may meet together for the despatch of business, adjourn and otherwise regulate their meetings as they think fit”. The various codes of corporate governance recommend that the board should meet at least once every quarter in order to effectively monitor and provide oversight on the affairs of the company. The SEC and CBN codes specifically provide that a director is required to have attended at least two-thirds of all board and Committee meetings in order to qualify for re-election.

The NAICOM code for Insurance companies requires directors to attend a minimum of 75 percent of board meetings annually. The board is required to disclose in the corporate governance section of the annual report, details of the total number of board meetings held in the financial year and attendance by each

director. The codes emphasise the need for “all directors to be able to allocate sufficient time to the company to discharge their responsibilities effectively.”

The time commitment required is a matter which director need to consider carefully before accepting to serve. This would also often depend on the nature of the company’s business and at what phase it is in its lifecycle or growth stage. A company undergoing restructuring, or in the process of receiving significant investment will certainly require its board of directors to meet a bit more frequently. The director should also consider what other significant commitments he/she has that could impact on effective performance and disclose these commitments to the board in advance and or any changes in this regard subsequent to accepting the appointment.

While it is essential for directors to have an indication of the level of commitment required of them, it is impossible to state with certainty how many man hours would be required of them at the time of taking on such commitments. The level of commitment required of a director would vary from one company to the other but the average time commitment by global standards is that a director should be prepared to spend at least four (4) days every quarter of the financial year on the company’s business after the induction phase.

This includes time required to prepare for and attend scheduled board meetings, Annual board strategy away-day(s), the Annual www.businessday.ng

General Meeting, site visits, committee meetings, meetings with shareholders, training programmes and interview sessions as part of the board evaluation process. There is always a likelihood of additional time commitment in respect of preparation time and ad hoc matters which may arise from time to time, and particularly when the company is undergoing a period of increased activity.

In addition to the time commitment, particularly with respect to preparation for and attendance at board meetings, a director is required to actively participate at such meetings by bringing his/her independent judgment, objectivity as well as expertise and experience to bear on board deliberations. To be able to participate actively, a non-executive director particularly, who is not involved in the day to day running of the company, will need to spend sufficient time studying board papers to have a good understanding of the agenda items, be able to ask the right questions and make informed contributions at board meetings.

To facilitate this, it is imperative that board papers are circulated in good time and in appropriate format. It is good practice to provide executive summaries with respect to lengthy reports and presentations and provide appropriate references and supporting documents. Many boards have gone paperless and directors are able to access board papers via dedicated cloud-based portals.

The chairman of the board has a key role

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BISI ADEYEMI to play in encouraging directors’ participation at board meetings by ensuring that all the directors receive accurate, timely and clear information. A proficient and experienced chairman is able to ensure that board meetings are properly conducted in a cohesive manner, effectively stimulate participation from all directors and keep in check a potentially overbearing director.

The chairman is responsible for ensuring that the board is an effective working group by promoting a culture of openness and debate which encourages directors with dissenting views to air such views.

Note: the rest of this article continues in the online edition of Business Day @https:// businessday.ng Adeyemi is the managing director, DCSL Corporate Services Limited. DCSL provides governance advisory, corporate restructuring & board evaluation, board & senior management training, retreats & strategy sessions, executive talent recruitment, HR outsourcing, company secretarial services

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FG, CBN should be more concerned about Nigeria’s dying stock market

PATRICK ATUANYA

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ormer Governor of the Central Bank of Nigeria (CBN), Sanusi Lamido Sanusi, once famously called the Nigerian Stock Exchange (NSE) a Casino in the aftermath of the margin/bad loan crises that Banks got caught up with in 2009.

If casinos are places with bright lights where people go to place bets one way or another on a particular game with lax supervision, these days the NSE is far from that as the exchange has made tremendous progress on corporate governance for listed firms since 2009.

However it is also true that these days the stock market is far from a casino in another sense, the mood is dark, stocks are down 16 percent year to date, very few investors are trading on the NSE as volumes collapse, and sentiment is extremely negative.

The movement in the stock market is among the leading economic indicators measured by economic managers in most countries, including by the Central Bank of Nigeria (CBN).

Rising stock prices signal to inves-

tors and regulators like the CBN or U.S FED that corporate profits are set to continue rising in the future and an economic expansion likely to continue.

More importantly it is positive for the wealth effect, helping to increase the value of Pension Funds, 401ks and individuals with investments in stocks in a brokerage account, which is ultimately positive for consumer sentiment and spending.

However today in Nigeria, nobody seems to want to buy stocks despite the rock bottom valuations.

Pension Funds Administrators (PFAs) who should be attracted to stocks as a natural hedge against inflation have all but abandoned the asset class.

The most recent data from the regulator National Pensions Commission or PENCOM shows that PFAs exposure to domestic equities stood at 4.93 percent at the end of August 2019.

It used to be more than double those levels and closer to 9 percent less than 2 years ago.

PFAs have some N465 billion invested in domestic stocks, compared to N6.8 trillion in Federal Government securities (see chart).

Emerging Market Research firm EFG Hermes released a note last week that succinctly captures the problem facing Nigeria’s equity markets.

According to EFG Hermes despite Nigeria’s market stock getting

cheaper and cheaper – with MSCI Nigeria now trading at 4.8x 12months forwards price to earnings (P/E ) ratio, which is an all-time low, and their internal analysts forecast of 14 percent earnings CAGR for 20192021, and a 2019e Dividend yield of 10 percent (11.2% for banks), policy uncertainty makes it very difficult to become bullish.

These policy uncertainties include latest government moves to enforce closure of land borders to all trade and the CBN’s increase in minimum Loan to Deposit Ratio’s to 65 percent (effective end-2019).

EFG Hermes notes that while the LDR policy may support earnings growth for stronger banks, it is hard to reconcile policies that force private sector lending with those that severely restrict trade.

On the Pension Funds EFG Hermes, observes that PFAs are not allocating fresh funds to stocks, despite strong flows into pension funds which amounted to N681 billion in the 12months period ending June 2019.

They conclude by saying that even given high yields on government paper, it is a surprise that local PFAs with long term naira liabilities are shying away from inexpensive stocks that offer good dividend yields and the potential for long term capital gains.

“We believe this could be because current incentives for pension funds do not reward managers for outperformance,” they note.

‘

Pension Funds Administrators (PFAs) who should be attracted to stocks as a natural hedge against inflation have all but abandoned the asset class.

Shying away from the vexing issue of a lack of clarity on the relative performance of PFAs compared to each other, vis –a-vis fees they charge contributors, and inability to easily move from one PFA to another, is the fact that not having significant exposure to equities may be short-changing retirees in the future, especially in an economy with a high rate of annual inflation, like Nigeria’s.

A recent survey by Mercer LLC released in June Showed that Pension funds in growing economies in Asia, Latin America and the Middle East have a sharply higher percentage of assets parked in stocks, with retirement money managers in 14 geographies now allocating 40 percent of their assets to equities, an 8 percentage-point climb over the past five years.

With PFAs and other major institutional investors shunning stocks, it is not a surprise that equity trading volumes have collapsed to under $6 million from over $100million in 2008.

The current state of affairs is clearly far from ideal. The CBN should be worried, because a the short term chase for high yields by investors is clearly harming the economy and making cost of servicing the Federal Government’s and CBN OMO bills prohibitive.

Pension Fund contributors should be worried because the time tested means of wealth creation globally is through stock market investments, and they could be missing out on a chance for significant capital gains in the future.

Atuanya is the editor of BusinessDay. Email: patrick.atuanya@businessday.ng Twitter: @patrick_atuanya

Who will pump the brakes plus what do you do when a regulator goes rogue?

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have written a lot about our debt problems over the last few years, mostly about how we seem to be sleep walking into a debt crisis. The background to the problem is a government whose spending plans have far exceeded its revenue plans, both in absolute terms and in growth trajectory. A matter made worse by the fact that spending plans are easy to actualise but revenue plans are much more difficult. The outcome has been public debt that keeps piling up and debt servicing costs that continue to rise, restricting the ability of government to do anything besides the basics with its actual revenue. All this has been said before.

It is not unexpected that the executive arm is not too worried about the debt problem. Indeed, it is normal in most countries for executives in democracies who know they will be out of office in four or five years to not worry about problems whose consequences may not show up for four or five years. It will be someone else’s problem anyway. In most democratic countries, the legislature is the arm of government which typically cares about such potential long-term problems and passes laws to mitigate them. We hear of the constant drama in the United States about raising their debt ceiling and the executive always has to

justify its long-term debt plans and its strategy for keeping it all sustainable.

Do we have such laws limiting debt build up in Nigeria? Yes, we do actually. We have the fiscal responsibility act which, as you have probably guessed from the name, tries to make sure the executive remains responsible especially with regards to debt. For instance, the fiscal responsibility act says the fiscal deficit in each year should not exceed three percent of GDP. Yet, we have seen the actual fiscal deficit climb from 1.6 percent of GDP in 2015 to 3.6 percent in 2017 before paring a little to 2.8 percent in 2018. We still await the full year numbers for 2019 and 2020 but unless there is a miraculous increase in revenue in both years, we will probably breach the legally allowed fiscal deficit limit.

From a sustainability standpoint we have seen the debt servicing to revenue ratio climb from 32 percent in 2015 to 44, 61, and 54 percent in 2016, 2017, and 2018 respectively. All this does not include CBNs new and ever climbing debt which is technically public debt and has taken on a life of its own.

By all the metrics which we measure debt problems we seem to be heading to a debt crisis. Yet there is nary a word from the National Assembly. The instiwww.businessday.ng

ECONOMIST

tution which should theoretically be tasked with protecting Nigeria’s longterm financial viability. The 2020 budget is being debated now and effects of the new minimum wage bill will further widen the gap between the government’s spending plans and its already overoptimistic and unattainable revenue plans.

Will the National Assembly wake up to its responsibility this year?

Government agencies gone rogue What do citizens do when a government agency goes rogue? If an agency or a regulator decides to go beyond its legal mandate and do whatever it feels like to extract revenue or towards some other objective, how are citizens supposed to respond? In the last few months we have seen some agencies take extraordinary steps in their attempts to raise revenue.

Customs went so far as to seal car dealerships until they prove their innocence.

A reversal of the innocent until proving guilty philosophy which I thought we worked with. We have seen a continued brouhaha between the banks, Telco’s, and their regulators. The CBN continues to be the CBN bullying banks and other financial sector participants with circular after circular.

Clearly, government agencies and other regulators, are supposed to work

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NONSO OBIKILI

within the framework of the law. Where they exceed their mandate, citizens are supposed to be able to seek redress in court. But then abuse of power is not uncommon in these parts. “You took me to court eh? I will deal with you” behaviour is almost guaranteed. So, what do we do?

Historically we have avoided these questions because oil revenue was mostly enough to distract government agencies and other regulators, leaving Nigerians and their businesses with relative freedom, at least from government. The new revenue drive is however destined to change that arrangement. So how will we proceed? Will car dealers actually try to sue customs? Will banks get the liver to sue the CBN when it oversteps its limits?

Will our justice system be put to the test?

Stay tuned.

Nonso Obikili is chief economist at Business Day.

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16

BUSINESS DAY

Monday 28 October 2019

EDITORIAL PUBLISHER/CEO

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

Bashir Ibrahim Hassan

GM, BUSINESS DEVELOPMENT (South) Ignatius Chukwu

Reconstructing Lagos collapsed roads for mobility

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s the rains abate with their disruptive and destructive tendencies, Lagos State says it has begun the reconstruction and rehabilitation of its many decrepit and collapsed roads in the metropolis and also on the outskirts.

An island city tucked within a tiny land mass estimated at 3,577 square kilometres, which is just 0.4 percent of Nigeria’s 923,768 square kilometres, Lagos is a challenging environment. The city has become all the more challenging with its ever-increasing population estimated at 20 million.

But Lagos is Africa’s 7th largest economy. Its internally generated revenue (IGR), which comes mainly from taxes, was $1.3 billion in 2015 and that was three times more than the state with the second largest IGR and 39 percent of the total IGR by Nigeria’s 36 states. So, the state can stand up to its challenges.

By sheer number, Lagos qualifies as a megacity. But unlike other megacities of the world such as Kolkata, India; Tokyo-Yokohama, Japan; Jakarta, Indonesia; Delhi, India; Shanghai in China, Lagos is not fluid because transportation

is impaired by insufficient and dilapidated roads infrastructure.

The past two governors of the state, Babatunde Fashola and Akinwunmi Ambode, constructed some kilometres of roads and bridges. They also rehabilitated a good number of existing ones all of which improved mobility in the city.

Under Fashola, the focus was on roads in commercial and highbrow residential areas which explained why he had strong footprints in such areas as Ikoyi, Victoria Island, Lekki, Surulere, and a few other middle-class settlements. He also constructed some bridges including the iconic Ikoyi Link Bridges which, asides being an engineering marvel, is also a source of revenue to the state government.

Also, Ambode did well with reconstruction of major roads. The Lagos Airport Road stands out as another engineering masterpiece in the state. He also constructed many bridges and initiated new ones including the ones in Ajah, Abule Egba, Ojudu Berger, Pen Cinema in Agege, among others.

Though he had his focus also on linking the peri-urban areas (outskirts), much of what he did in those areas did not outlive him. Poor maintenance and rains

ruined them.

While it is true that Lagos needs new roads, the state should do well by evolving a culture of maintenance which, in our view, is even more important.

It is important that the state prioritises roads infrastructure, considering that its economy is a function of the ease, duration and cost of movement within the state. It is expected that motorists and commuters alike should not spend all their day’s income on transport fare.

In the same vein, they don’t have to spend quality man-hour commuting from their residence to their work places because that affects productivity and, by extension, the GDP and economy of the state.

Ambode’s ambitious and audacious outing with the Murtala Mohammed Airport road reconstruction is exemplary. It is a testament on what is possible in a state that aspires to build 21st century economy.

The state needs to replicate that feat on other major roads in the state including Agege Motor Road and Lagos-Badagry Expressway where many citizens had taken position for residence or business or both, but have abandoned such ideas because of

the poor state of the roads.

Reconstructing Lagos bad roads, which have become a source of worry for some time now, has the benefits of reducing the state’s misery index now on the rise in the past couple of years. It will also widen the state’s tax net as many more people will become landlords, paying property tax and tenement rates to the government.

Above all, that action will improve the health condition of the residents of the state as many have developed high blood pressure from long hours on traffic. More residents would also set up businesses in the outskirts of the city and reduce the number of those cramped in the city centre.

It is our opinion, therefore, that as the rainy season ends, Lagos should begin massive road reconstruction and our advice is that the focus must be on completing stranded projects rather than initiating new ones. They should also institute a functional maintenance system.

Our hope is that this will ease mobility, enhance ease of doing business, increase productivity, improve income levels across individuals, households and institutions, and ultimately raise standard of living.

HEAD, HUMAN RESOURCES Adeola Obisesan

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Adebayo, the new trade minister, has his work cut out for him GLOBAL PERSPECTIVES

OLU FASAN

C

ongratulations are, of course, in order. So, first, I congratulate Adeniyi Adebayo on his appointment as Nigeria’s new minister of industry, trade and investment. He has one of the most critical economic jobs in President Buhari’s secondterm administration. Surely, if Nigeria is to come out of the economic woods, each of the three elements of Adebayo’s portfolio – industry, trade and investment – must be performing extremely well.

In his 2020 budget, President Buhari predicated his huge revenue projection of N8.155 trillion on an estimated GDP growth rate of 2.93 percent, which he said would be driven “largely by non-oil output, as economic diversification accelerates, and the enabling business environment improves”. But if President Buhari is to achieve such a rise in non-oil output, underpinned by accelerated economic diversification and a hospitable business environment, he needs the ministry of industry, trade and investment, under Adebayo, to be firing on all cylinders, driving robust industrial, trade and investment performances. Of course, other economic ministries must also be working in tandem, but Adebayo’s tasks of enhancing the productive capacities of industries, boosting trade and attracting significant foreign investment are critical to reviving Nigeria’s ailing economy.

But, arguably, he has been handed

a poisoned chalice. He inherits an industrial sector that is shackled by significant supply-side constraints, such as poor infrastructure, excessive regulations, multiple taxes and lack of access to capital and foreign exchange. He also takes over a trade regime that is driven by blind protectionism. As I write, the government is still closing Nigeria’s borders to protect local industries, but this beggar-thyneighbour policy is likely to provoke tit-for-tat retaliations that will harm Nigeria’s ability to export its non-oil products. Furthermore, he inherits a business environment that still lacks sufficient incentives to attract significant private capital and investment.

So far, it is not clear how Adebayo intends to tackle these challenges.

He said immediately after he and Mariam Katagum, the minister of state, resumed duties that “We will attract investment and boost trade”.

But since then, Adebayo has made no significant speech, setting out his agenda. Although he has a Twitter account, he has, as at last week, tweeted only one message, the picture of his inauguration on 27 August. Indeed, the Twitter account of the ministry of industry, trade and investment, MITI, with 2042 tweets in over four years, still has, as I write, Okechukwu Enelamah as minister and Aisha Abubakar as minister of state, nearly three months after Adebayo and Katagum have replaced them!

Why, you might ask, do all these matter? Well, they matter because no other ministry should be more outward-facing than that of industry, trade and investment. It’s a ministry that has the whole world as its platform, and if foreign investors, traders and policymakers want to follow developments on Nigeria’s industrial, trade and investment policies, they might want to see what the minister and/or the ministry is tweeting. Truth is, ministries and ministers of trade and investment should be engaging actively with the outside world.

For instance, the three-year-old UK

Department for International Trade tweets regularly, with 25,800 tweets, as at last week, while its secretary of state, Liz Truss, has made 6,480 tweets, to date!

To be sure, none of this is intended to say that Adebayo doesn’t take his responsibilities seriously. Of course, he does. As he said recently, “I believe in hard work”. He has attended a number of industry events in Nigeria, and recently attended the Commonwealth Trade Ministers meeting in London. What’s more, like his predecessor, Okechukwu Enelamah, who, before becoming a minister, had a career spanning over two decades in the private sector as a finance and investment guru, Adebayo also has a strong private-sector experience, having been a commercial lawyer for several decades, with expertise in project finance, oil and gas, contract procurement and business facilitation, representing both local and international businesses. So, there is little doubt that he has what it takes to succeed as minister of industry, trade and investment.

Of course, Adebayo, the first civilian governor of Ekiti State, is also a politician. Thus, in a sense, being a seasoned commercial lawyer and politician, the new trade minister brings to the job a mix of technocratic and political skills. He needs both. The job of industry, trade and investment minister requires the technocratic ability to create the right institutions and policies for driving productivity in Nigeria’s industries, boosting trade and attracting significant foreign investment. But it also requires the political skills to win the support of a wide range of stakeholders for such institutions and policies. So far, however, by not setting out his priorities, it’s hard to tell how Adebayo intends to perform his pivotal role.

In contrast, shortly after being sworn in 2016, Dr Enelamah gave his inaugural speech. In the speech, which was strong on vision and policy direction, he declared: “We would

‘

Of course, as always with Nigeria, policy intentions are hardly matched with the right actions. For instance, the central bank’s infamous list of 43 imported items deemed ineligible for foreign exchange through the official window, the extension of the forex ban to all food imports and the recent closure of Nigerian borders were bound to have damaging impacts on industries and foreign trade

like Nigerians and the world to regard MITI as the ‘Ministry of Enabling Environment’”. He went on to set out what he described as the “four pillars” of his ministry, namely: to create an enabling environment for industry, trade and investment; to implement the Nigerian Industrial Revolution Plan (NIRP), developed by the Goodluck Jonathan administration; to champion the cause of micro, small and medium enterprises (MSMEs); and to attract proactively long-term foreign investment. Later on, a fifth pillar was added: to promote the integration of Nigerian businesses into the regional and global value chains.

Of course, as always with Nigeria, policy intentions are hardly matched with the right actions. For instance, the central bank’s infamous list of 43 imported items deemed ineligible for foreign exchange through the official window, the extension of the forex ban to all food imports and the recent closure of Nigerian borders were bound to have damaging impacts on industries and foreign trade. Similarly, the existence of multiple foreign exchange windows and the heavyhanded treatment of MTN, HSBC and UBS were bound to harm foreign investors’ confidence in Nigeria. As a result of these misguided policies, the manufacturing sector’s contribution to GDP growth remains very low, non-oil exports are declining and, according to a recent UN report, foreign investment into Nigeria has dropped by 44 percent. So, in those respects, some of MITI’s five pillars have not proved to be successful.

Note: the rest of this article continues in the online edition of Business Day @ https://businessday.ng 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

The government borrowing path to escape poverty

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popular narrative on the newswires and in the financial media is that the Kenyan government is creating a debt trap from which it will not be able to extricate itself. This follows a move by its national treasury to increase the statutory ceiling for central government debt from 50 percent of GDP to KES9 trillion ($87 billion). So, it has removed the ratio as the cap (on which more later) and set a ceiling close to 100 percent of GDP, which was KES8.9 trillion in 2017/18 (July-June).

This leaves a huge amount of headroom since central government debt at end-March 2019 stood at KES5.4 trillion, divided roughly half and half between domestic and external obligations. The burden has risen rapidly, from KES2.2 trillion in March 2014 and KES3.3 trillion in March 2016. Some additional analysis is required to test the consensus view that a number of emerging markets, Mozambique and Zambia for example, have entered the territory marked unsustainable debt trap and that more are set to follow.

The journey continues to rescheduling, haircuts and, the indulgence of official creditors permitting, a second round of debt relief.

Kenya is on this slippery slope, the argument runs.

We welcome the ditching of the ratio from the treasury’s ceiling because it tells us little.

Debt is serviced by taxpayers, so we do not learn much from a ratio that covers the large informal economy and other segments of society that for whatever reason do not pay tax.

The Kenyan public finances for August 2018, for example, show total interest payments of KES53 billion, equivalent to 27 percent of tax revenue or 23 percent of total revenue. Debt payments are not at a dangerous level and the government has the resources to make sizeable capital outlays, although the latter are running a little low at about 22 percent of total expenditure. These judgments would have to be suspended/rewritten if government borrowing was to move rapidly to the new ceiling.

The government does show some signs of being in a hurry because it has requested parliament to approve loan documents which would add KES420 billion to its external debt.

Why the hurry? It has already embarked on a major overhaul of the national infrastructure and wants to accelerate the process, calculating that it has to meet the larger part of the funding from its own borrowing because its own revenue generation is inadequate for the purpose. Only such an overhaul, covering the hard and soft infrastructure, can lift millions of Kenyans out of poverty and raise the country to middle-income status.

An ambitious programme on this scale has potential pitfalls, so we need to recognise the possibility that: sizeable loan proceeds are deployed on salaries and recurrent budget items; that project implementation is of a poor standard, and that the overhaul does not generate the revenue for the government to service the mounting debt burden.

Additionally, external partner fatigue might www.businessday.ng

force the government to depend heavily on domestic debt markets and thereby “crowd out” the real economy. China has funded the new railway line from Mombasa to Nairobi, and on to Naivasha in the Rift Valley, but declined to finance a further extension to the Ugandan border.

There are some clear pointers for Nigeria in this story. The FGN has similar ambitions to transform the national infrastructure and economy, and jettison the tag of being the ‘extreme poverty capital of the world’. Its debt stock ratio is far superior to Kenya’s, at just 20.1 percent of GDP for the three tiers of government in June 2019. However, Nigeria lags Kenya by a large distance on the more important measure of the debt servicing burden: total debt payments consumed 60.0 percent of the FGN’s retained revenue in 2018 or 54.1 percent on the broader definition (of retained revenue with the assorted accounting extras). Further, domestic interest rates are higher than in Kenya, by about 500 basis points along the Treasury-bill curve.

The core ratio for servicing costs is far worse in Nigeria, indeed twice as bad, and it is far behind Kenya in the overhaul of its infrastructure. Its National Assembly appears more robust in the defence of its rights than its Kenyan counterpart and less inclined to follow the script of the elected government. The same pitfalls listed for Kenya apply to Nigeria with the probable exception of fatigue on the part of China and other external partners.

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GREGORY KRONSTEN The consensus view has it that the Kenyan approach is fiscally irresponsible, and a step in the direction of an unsustainable debt mountain. This is overdramatic in our view as well as somewhat patronising. They will fall short of their destination in our view because of fatigue on the part of their external concessional partners and because the public agencies do not have the capacity to absorb a stepping up of the infrastructure programme on the scale implied by the hike in the national debt ceiling.

The FGN has a less aggressive programme (and government), and is not expected to ramp up its borrowing on the Kenyan scale.

We admit to some sympathy with the Kenyan strategy because the successful migration out of poverty and towards middle-income status requires, among other things, a modern, overhauled infrastructure.

Kronsten is the head, macroeconomic & fixed income research at FBNQuest

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18

Monday 28 October 2019

BUSINESS DAY

In Association With

Trying times

What an impeachment trial of Donald Trump might look like Will senators put party aside, and meet Alexander Hamilton’s expectations?

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LEXANDER HAMILTON warned in 1788 that impeachment risks “agitat[ing] the passions of the whole community” and spurring “pre-existing factions” to “animosities, partialities, influence and interest”. The process, he wrote, carries the “greatest danger” that “real demonstrations of innocence or guilt” will amount to little in the face of raw political calculations. But the constitution carves a path around the maelstrom, Hamilton insisted: the United States Senate will have the “sole power to try all impeachments” sent its way by the House of Representatives. Senators, “unawed and uninfluenced” by the passions of the day, are “sufficiently dignified” to weigh whether an impeached official should be thrown from office.

On October 22nd America’s top diplomat in Ukraine, William Taylor, testified to House investigators that President Donald Trump threatened to withhold $391m in military aid unless Volodymr Zelensky, Ukraine’s president, opened an investigation into the son of Joe Biden, one of Mr Trump’s potential rivals in next year’s election. It was the clearest and most detailed account to date—from a public servant whose career spans five decades and nine administrations—of Mr Trump leaning on a foreign leader to help his re-election effort. Mr Taylor’s testimony makes impeachment in the House likelier.

It remains to be seen whether members of Congress’s upper chamber will put party aside and live up to Hamilton’s billing.

Although it takes only a majority vote to impeach in the House, conviction requires the assent of twothirds of the senators present—67 if 100 attend. At least 20 Republicans, along with all 47 Democrats, would have to find Mr Trump guilty. That seems unlikely. Only Mitt Romney of Utah has even hinted he might defect. No American president has yet been removed—though in 1868 Andrew Johnson escaped by just one vote (his trial is pictured).

A Senate trial could nonetheless prove a crucible at a fraught time. Mr Trump’s questionable foreign-policy

A Balkan betrayal Free exchange

Can central bankers talk too much?

As the Fed and the ECB have learnt, transparency has its downsides

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moves—particularly his abrupt decision to withdraw American forces from northern Syria—have provoked condemnation from even stalwart supporters like Senator Lindsey Graham and Mitch McConnell, the Senate majority leader.

Keeping the Senate proceedings “civil and orderly”—a task that the constitution assigns to the chief justice—may be a struggle, says Laurence Tribe, a Harvard law professor and co-author of “To End a Presidency”. The previous chief justice, William Rehnquist, said of his role in the impeachment trial of Bill Clinton in 1999 that “I did nothing in particular, and I did it very well.”

John Roberts, the chief today, faces a more partisan environment but, Mr Tribe says, will seek to emulate his predecessor.

The details of removal trials are “all entirely fluid in theory,” says Frank Bowman, author of the book “High Crimes and Misdemeanours”, but their contours are clear. Senate rules, last updated in 1986, require the body to summon the president after the House impeaches him.

Select members of the House of Representatives—dubbed “House managers”—prosecute their case.

The president presents a defence.

Senators may not question anyone

directly. They are “commanded” at the outset of the trial by the sergeantat-arms to “keep silence, on pain of imprisonment”. But if they have questions—senators had more than 150 during Mr Clinton’s trial—they can jot them down and pass them to the chief justice, who will read them aloud. After closed-door deliberations, cameras roll again for the final public vote on each impeachment article.

An impeachment trial has several trappings of a court trial: lawyers, evidence, jurors, verdict. But the proceedings and judgment are fundamentally political. A removed official has no appeal. And there are no set rules of evidence, no due-process requirement and of course no gag rule for jurors—senators must stay mum inside the chamber but can talk freely to the press.

Michael Gerhardt, a law professor at the University of North Carolina who testified at the Clinton impeachment, says that Republicans could change the rules by majority vote.

Democrats could try to filibuster any change, but the filibuster could itself be nixed by a simple majority.

Yet there may be little need for Mr McConnell to resort to that. Instead he could choose to limit the witnesses or evidence Democrats could

introduce; allow Mr Trump “to assert privilege to prevent anything from being disclosed that the president does not wish to be disclosed”; or “impose a tougher burden of proof”—like the criminal standard of “beyond a reasonable doubt”—to tip the balance in Mr Trump’s favour.

Mr McConnell has time to consider his options while the House, led

by Speaker Nancy Pelosi, continues its run-up to impeachment. A growing number of Americans think that Congress is right to impeach Mr Trump. But only a small number of Republicans have changed their minds. Instead, more voters who already disapproved of Mr Trump have come round to the idea (see chart).

As long as Mr Trump’s fans remain loyal, Mr Bowman muses that Republicans could turn a trial into a “circus” airing “every crazy conspiracy theory”, including “unfounded allegations about Mr Biden and his son”. In a bad sign, on October 23rd two dozen Republican congressmen led by Steve Scalise, the minority whip from Louisiana, stormed the House proceedings. But if the president’s popularity should start to decline rapidly, Mr McConnell could instead shorten the trial to limit the damage and shore up senators facing re-election next year in swing states.

MAGINE YOU are a journalist trying to reassure your bosses that you will hit a tight deadline. What would be more effective: a forceful but brief commitment that you will do whatever is needed to get the job done, which leaves them in the dark on all the things that might go wrong along the way? Or a plan detailing every step you will take—but in which they can spot unnerving risks?

That resembles the choice central banks face as they try to convince financial markets and the public that they will meet their goals. Over the past decade their preference has been clear: the more transparency and detail, the better. In 2011 America’s Federal Reserve began holding press con-

ferences after its monetary-policy meetings. It started publishing the range of rate-setters’ economic forecasts the following year. Across the rich world, forward guidance on the path of interest rates has become part of the toolkit. Central bankers make ever more speeches, bringing once-hidden debates out into the open. Some tweet their views.

The theoretical justification for all the talk is strong. The more markets understand how the central bank will react to events, the better they anticipate future policy. Conditions in financial markets should immediately tighten or loosen in response to economic news, making central bankers’ jobs easier. It is as if setting out your plan to your boss makes it easier to implement.

Today, however, the theory Continues on page 19

Monday 28 October 2019

BUSINESS DAY

19

In Association With

Cleaning up the rainbow nation

South Africa’s president promises big results—eventually Cyril Ramaphosa tells The Economist it’s not his job to arrest people

S

OUTH AFRICANS are growing impatient with Cyril Ramaphosa, the former union boss, anti-apartheid activist and tycoon who is now their president. In his 20 months in office, no one has been prosecuted for the looting of the state that took place under his predecessor, Jacob Zuma. In an interview with The Economist in London on October 13th, Mr Ramaphosa gave a message to his critics. And it involves a riproaring second-world-war film.

In “Force 10 from Navarone”, explains Mr Ramaphosa, British commandos try to blow up a dam so that the water will sweep away a bridge that the Nazis want to use. When the explosives go off, nothing happens.

The commandos are furious.

“It didn’t work!” they say. But the explosives expert tells them to wait. The dam is damaged and will soon collapse, he says.

Once the fuse has been lit, there is no going back.

For Mr Ramaphosa that fuse is the National Prosecuting Authority of South Africa, one of several institutions he has sought to revive after their evisceration by Mr Zuma. The spectacular results people want may take time, but the process Mr Ramaphosa has set in motion “is irrevocable”, he says.

Arrests will happen.

A big bang is also what is needed in the economy. It has a long list of structural problems.

These include a lack of competition, a low savings rate, lousy schools and cities where poor people can spend hours—and 40% of their pay—getting to work. Then came Mr Zuma.

During his reign GDP per head barely grew (see chart). Public debt as a share of GDP doubled from 28% to 56%. Erratic policies put off investors. Africa’s most industrialised economy became one of its most sluggish.

Under Mr Ramaphosa there has, as yet, been little sign of improvement. GDP growth has been negative in three of the past six quarters. The official unemployment rate has risen to 29%—even higher than under his predecessor. Eskom, the state-run electricity company, has spiralling debts equivalent to 8.5% of GDP and remains insolvent and unreformed.

The next few weeks will help determine whether Mr Ramaphosa can turn things around.

A “growth strategy” is expected soon and a budget is due on October 30th. Both are urgent.

In November Moody’s will decide whether to become the

third big credit-rating agency to downgrade the country’s debt to “junk” status. That would force some bondholders to sell off their holdings, weakening the South African rand and delivering a blow to the president.

On August 27th, in an effort to nudge the president, his finance minister, Tito Mboweni, published a 77-page paper on the National Treasury website, replete with sensible ideas.

If implemented they could bring the country closer to the 4-5% growth rate required to dent its horrifically high unemployment. So how many of Mr Mboweni’s suggestions does Mr Ramaphosa endorse?

“I endorse all of them,” says the president. Does that include some of the more controversial ideas, such as on migration?

South Africa needs more skilled workers, yet it is all but impossible for foreign graduates or entrepreneurs to move there in search of work. Will he liberalise the visa rules so that there is an open-door policy for migrants with degrees? “Absolutely,” says Mr Ramaphosa, citing the benefits enterprising migrants have brought to Silicon Valley.

“That’s precisely what we need.”

Another pressing area for reform is Eskom. It would help, for example, if municipalities paid their electricity bills.

Many currently do not. Soweto, a township on the outskirts of Johannesburg, owes Eskom about 18bn rand ($1.2bn). Mr Ramaphosa explains that nonpayment stems partly from the era of apartheid when, as a union leader, he called for rent boycotts. “But now I’m saying the war is over, the struggle is over, we’ve now got to pay our way.”

Having people pay their bills

is just one step towards putting Eskom on a sound financial footing. Another idea mooted

by Mr Mboweni is to sell off power stations. Here Mr Ramaphosa is more cautious. There is “no way” that he would sell some of the new plants, but he would welcome buyers for old ones, so as to extend their lives. Even then, though, buyers would have to pledge that communities in coal-rich areas receive a “just transition”.

This sounds like classic Ramaphosism: reform, but only up to a point, and after a lot of jawjaw. He endorses Mr Mboweni’s tough ideas, but there is a crucial qualification: “Of course you can’t implement them all in one go.” So how determined is he really? Is he willing to pursue changes where there will be losers as well as winners?

“I prefer win-win solutions,” says Mr Ramaphosa, “but of course there comes a time when there will be losers along the way.” He believes that the skills he honed as one of the negotiators who ended apartheid will help ensure that “everyone rises from the table thinking they are a winner.”

But what about the people not at the table? The unemployed, say, or the pupils taught by one of the 80% of maths teachers who cannot do sums expected of 12- and 13-yearolds? How can South Africa have a good education system without reducing the power of the teaching unions, or create new jobs for the unemployed when the government is more concerned with preserving the pay of unionised workers?

Here the president says that he is trying to sway his “allies” in the unions. He likens the situation to having a rotten toe

from diabetes: it is sad to lose it, but it would be worse to lose a leg. “It could well mean that your whole leg and your whole life could be at risk. You have to make choices.”

“So when is Dr Ramaphosa going to operate?” asks your correspondent. The president guffaws. “People are asking when the operation…,” he begins, before wisely deciding against continuing with the metaphor. He knows South Africans want action, whether on Eskom or prosecutions. “People are asking when are you going to arrest people? When are you going to put people into jail?” But it is not his job to arrest people, he argues. It is to “strengthen the institutions that must do their work”.

Will they be able to go after powerful people, such as Ace Magashule, the secretarygeneral of the ruling party, who has been accused of corruption? “Once the institutions are strengthened, they should be able to go after anybody—including the president,’’ says Mr Ramaphosa. And they must be allowed to do so “without fear, favour or prejudice”.

Nelson Mandela reportedly wanted Mr Ramaphosa to succeed him two decades ago, but his party chose Thabo Mbeki instead. Does Mr Ramaphosa wish he had got the top job sooner? “It’s a difficult one. It’s a tough job...being the president of South Africa at this time...I wish I had come in when the economy was better.” South Africans are hoping that it is better late than never. If their cautiously reforming president stumbles, the crooks who captured so much of the state under his predecessor might grab it again.

Can central bankers talk too...

Continued from page 18

is being tested. The European Central Bank (ECB) meets on October 24th, after The Economist goes to press, amid a very public row about monetary policy. In September the ECB said that it would restart quantitative easing (QE), the purchase of bonds with newly created money, and that it would keep buying assets until inflation picks up from its current level of 1% towards the bank’s aim of close to 2%. Hawks such as Klaas Knot, the head of the Dutch central bank, have been unusually vocal in their dissent. Bond yields, which move inversely to prices, first fell as markets digested the ECB’s guidance. But the bickering has since sent them in the other direction.

Market pricing now also reflects expectations of how the political struggle over open-ended QE will play out. Investors have spotted a flaw in the plan.

In America the Federal Reserve may cut interest rates for a third time this year on October 30th. It has been accused by economists at Goldman Sachs, a bank, of constructing a “hall of mirrors” in its communications with markets.

The Fed, the argument goes, has this year simultaneously signalled its intentions to bond markets while taking its cues from them.

But bond yields are a prediction of what the Fed will do, not an instruction. As a result, the Fed and the markets have entered a pessimistic spiral, while the real economy has been ignored. In its eagerness to be in touch with markets, the Fed has forgotten that it is in the lead.

Central banks everywhere must also work out how to offer forward guidance when facing sharply divergent forks in the road. A trade truce between America and China could transform the economic outlook. A no-deal Brexit could cause chaos in Britain that spills over to the rest of Europe. Telling markets what to expect of policy is much harder when prediction involves choosing between black and white.

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Monday 28 October 2019

BUSINESS DAY

In Association With

The Zuck Buck ruck

Is Libra doomed?

Facebook’s planned digital currency has had a miserable few months

O

N JUNE 18TH Facebook announced Libra, a new global payments system and currency, to be launched in 2020. Dubbed the “Zuck Buck” by Brad Sherman, an American congressman, the plan was to employ a mix of entrepreneurial daring and the technology underlying cryptocurrencies to shake up the world’s financial systems. Money would move at the speed of a smartphoneswipe, even across borders. Libra would lubricate life in the rich world and revolutionise it in poor countries, where basic financial services are dear and often scarce. After all, as the firm points out, 1.7bn people have no access to a bank account.

Besides further expanding Facebook’s empire, Libra would bring them into the financial fold.

In the subsequent four months, Libra has had a bruising time.

Many of its partner firms have got cold feet. Politicians and regulators around the world have made disapproving noises. On October 23rd Mark Zuckerberg, Facebook’s boss, spent a lonely few hours in Wash-

ington, DC, fielding mostly hostile questions from American politicians on the House of Representatives Financial Services Committee.

One problem, as Mr Zuckerberg admitted, is Facebook itself. Maxine

Waters, the Californian Democrat who chairs the committee, began proceedings with a litany of its misdeeds, pointing out that it is subject to antitrust investigations in 47 states (see article), that Russia

has used it to meddle in American elections, and that it has been fined $5bn for deceiving consumers.

Nydia Velázquez, a Democrat from New York, accused Mr Zuckerberg of lying to European regulators

over the firm’s merging of user data from WhatsApp, a messaging service bought by Facebook in 2014, with those from the rest of the company. Why, the congresswoman wondered, should a firm like that be trusted with something as important as a currency?

Mr Zuckerberg pointed out that Libra would be administered not by Facebook, but by the Libra Association, an independent body that includes other companies and is based in Switzerland. But the association is already not what it was. Of the 28 original members, a quarter have left.

PayPal, an online-payments firm, departed on October 4th. A week later eBay, Mastercard, Mercado Pago, Stripe and Visa—another group of payment firms—jumped ship, as did Booking Holdings, a travel company.

PayU, a Dutch firm, is the only payments firm still in the association.

Other remainers include two ridehailing firms (Uber and Lyft), a pair of telecoms companies (Iliad and Vodafone), a gaggle of venture capitalists and a handful of charities. The association’s head of product, Simon Morris, left in August.

A dilemma in the Horn

Did Ethiopia’s premier deserve the Nobel peace prize?

Abiy Ahmed made peace with Eritrea but failed to stop ethnic cleansing

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HERE ARE two types of Nobel peace-prize winner. The uncontroversial ones are often campaigners, such as Nadia Murad (who won last year for her work highlighting rape during war) or the Organisation for the Prohibition of Chemical Weapons (which won in 2013). The controversial ones are often the politicians who actually negotiate peace deals—think of Yasser Arafat or F.W. de Klerk.

Politics in violent places is a nasty, messy affair, and peace deals don’t always last. The award of the prize on October 11th to Abiy Ahmed, Ethiopia’s prime minister, will spark more debate than most.

On the plus side, Abiy has tried hard to be a unifier since he took office last year. He often uses the Amharic word medemer (to add together) in speeches. Millions of Ethiopians have welcomed his promises of democracy, reconciliation and reform in a country that had long been oppressed.

In June 2018 he signed a historic peace deal with Eritrea, a smaller neighbour that seceded from Ethiopia in 1993. The accord brought to a close two decades of pointless conflict over a scrap of barren land. The war had led to tens of thousands of deaths, ripped apart families and severed the deep ties of blood, culture

and language between the two countries.

Abiy broke the deadlock by promising to withdraw from the disputed territories, thus implementing the findings of a UN commission that Ethiopia had long rejected. He also took advantage of his close relationship with Saudi Arabia and the United Arab Emirates, whose financial largesse may have helped nudge Issaias Afwerki, Eritrea’s president, to the table. After the agreement, families and friends were reunited and cross-border trade flourished.

Berit Reiss-Andersen, the Nobel committee’s chair, said the prize recognised Abiy’s “efforts to achieve peace and international co-operation, and in particular his decisive initiative to resolve

the border conflict with neighbouring Eritrea.” He has also been praised for helping to mediate a power-sharing accord between pro-democracy protesters and a military junta that took power earlier this year in Sudan.

But the peace he forged with Eritrea is far from complete. Earlier this year Eritrea once again closed all its border crossings with Ethiopia. A trade agreement drafted by Ethiopian negotiators has gathered dust in the Eritrean capital, Asmara, for almost a year.

Physical demarcation of the border, the trickiest part of the deal, has not begun.

The lack of progress highlights some of Abiy’s shortcomings as a peace-broker. Ahmed Soliman of Chatham House, a think-tank

in London, notes his reliance on “charm and bold personal initiatives” at the expense of institutions. He bypassed Ethiopia’s foreign ministry to strike his deal with Issaias (the details of which were never made public). And his attempts to foster goodwill between Kenya and Somalia, at odds over their maritime border, as well as between warring factions in South Sudan, have yet to show results.

The prime minister’s record as a peacemaker in Ethiopia is also mixed. He has released political prisoners and promised fair elections. But he has failed to keep order. In 2018 almost 3m Ethiopians were forced from their homes by ethnic conflict. The causes were complex and many of the tensions long predate his term in office. But his government was slow to react, and at times appeared more concerned with its public image than with tackling the spiralling humanitarian crisis in the country’s south. For several months it blocked aid from reaching homeless shelters, and forced people to return against their will to areas that were not yet safe. This contributed to more violence, as well as starvation.

The Nobel prize will be a boost for the prime minister, who faces a national election next year. “At

home we’re always squabbling, but when it comes to the outside world, we’ll stand with any Ethiopian,” says a resident of the capital, Addis Ababa. Abel Abate Demissie, a political analyst, suggests that international recognition might keep Abiy honest, especially as his administration shows signs of reverting to the authoritarian tactics of its predecessor. “Hopefully, it will encourage him to live up to the prize,” he says. “He knows all eyes will be on him now.”

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BUSINESS DAY

COMPANIES & MARKETS

COMPANY NEWS ANALYSIS INSIGHT

Markets

Unfounded SEC probe opens bargain hunting opportunity in Lafarge Africa shares LOLADE AKINMURELE

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hares of Lafarge Africa have plunged since unsubstantiated reports that the cement maker was under investigation by regulator, the Securities and Exchange Commission (SEC) over allegations of poor corporate governance and abuses, thereby opening a window of opportunity for value investors to snap up the fundamentally-sound company’s shares at a bargain.

Lafarge has since debunked any investigations by SEC after filing a statement Tuesday with the Nigerian Stock Exchange where the company’s secretary said the maker of the building material was “not in receipt of any letter from SEC that would warrant the company to believe that an investigation has been launched against it,” the statement read.

The SEC has also not publicly confirmed any investigation into Lafarge and declined to comment on the matter.

When an investigation is being carried out on a company, it is standard procedure that the company receives a notification either by a written letter or a visit by the investigator.

For instance, when indigenous oil company, Oando, was under investigation by SEC, the capital markets regulator notified the company and the public of an ongoing forensic audit.

As this not the case with Lafarge Africa, claims of an

investigation into the cement company over alleged infractions specifically in the sale of the South African unit to parent company, Lafarge Holcim, seem outlandish at best.

“There is no basis for any investigation in the first place,” an financial analyst at a leading investment bank, commenting on a matter he was not authorised to speak on, said. “They followed the regulatory and legal procedures in their handling of the sale and got approvals from shareholders and SEC for which there is evidence, so it is quite strange that there would be any investigation into the deal.

“Also, the argument about whether Lafarge Africa got a better deal from the sale is just meaningless, because for years, the South African unit was a struggling business and it only made sense to spin it off and focus on the Nigerian operations which was in much better shape.”

Some investors haven’t taken time to question the logic of the matter and that has caused an unwarranted 9 percent decline in Lafarge’s share price to N14.7 from N16 since the October 14 report claiming the firm was under SEC investigation.

The sell-off, which is not driven by fundamentals, has created an opportunity for savvy investors to buy the company which has a 2019 target price of around N25 according to BusinessDay’s valuation. That’s an upside potential of 70 percent over the current price.

The $317 million sale of its South African unit to Lafarge Holcim, which spurred a reduction in its finance costs and debt burden, has helped Lafarge Africa turn the corner in 2019. Proceeds from the sale were used to completely extinguish Lafarge Africa’s

shareholder loan of $293 million and accumulated interests as at July 31, 2019.

The transaction boosted Lafarge Africa’s cash-flow and net income, given the reduction in debt service outflows and enabled it to reinvest in and expand operations in

existing plants and strengthen its balance sheets.

For only the first time in three years, the company reported a Profit Before Tax of N9.2 billion in the first six months of 2019 from a loss of N6.3 billion in the same period of 2018, while Profit

PRO-FORMA IMPACT OF SOUTH AFRICAN UNIT SALE ON NET FINANCIAL DEBT

After Tax also swung positive to N9.0 billion from a loss of N3.9 billion.

That pushed its basic earnings per share to N56 from a negative N45 in the period under review, optimising shareholders’ funds. The firm’s impressive financial performance led to a rally in its share price, which has now been abruptly halted by a dubious claim that the deal is being investigated by same SEC that sanctioned it in the first place.

If anything, the sale of the South African unit has been a masterstroke and should leave no room for any shareholder to criticise the deal as it has put the firm on an even firmer financial footing and demonstrates the management’s good intentions for the company.

“Lafarge said it had not received any letter from SEC, so it is hard to conclude if an investigation is going on or not,” an investment banker who did not want to be quoted as he wasn’t authorised by his company to speak, said.

“If SEC is looking into the complaints of any shareholders and has not notified the company, it can not be called an investigation. When the same SEC was doing a forensic audit on Oando last year, Oando received notification and the SEC made its investigation public,” the investment banker said, “So I wouldn’t advise investors to sell, but rather to buy, as the price is most likely to adjust upward once the dust settles on this.”

CONSUMER GOODS

Guinness slips into loss in Q1 on slower sales, high finance cost SEGUN ADAMS

G

uinness Nigeria Plc, the country’s second-biggest brewer, has posted the first quarterly loss since 2016 after its sales faltered on intensified industry rivalry amid a slow economic recovery, and borrowing cost doubled.

The brewer posted a loss of N370 million, widely missing about N800 million profit mark made in the same period last year.

Shares of Guinness saw its biggest daily loss in almost two months and led the laggards Thursday in Lagos trading after it pub-

lished the result.

The negative sentiment persisted in Friday’s trading as the stock shed 9.83 percent to close at N23.85 per share bringing year’s loss to about 67 percent.

“The Board is confident that our strategy is sound, that we are making the right investments in the company and our brands to ensure our long-term competitiveness,” Guinness said, assuring consistent growth delivery for stakeholders.

Revenue slumped 4.3 percent in the three months to September 30 to N26.899 billion, as the company felt the brunt of the challenging macroeconomic and competitive environment

which had led to a decline in Guinness’ market share in the 2018/2019 business year.

“This was further impacted by unfavourable mix performance and excise increases on both beer and mainstream spirits,” the board said. “These top-line performance factors, and especially the excise duty increases, impacted our Gross Profit.”

With the cost of sales almost unchanged at N18.95 billion, Guinness’ gross profit fell 12.8 percent to N7.95 billion which means the company spent about N3 naira more per N100 sales on the direct cost of production compared to N67 naira from every N100

sales last year.

On a quarterly basis, cost of sales fell 11.7 percent reflecting the impact of trade war and favourable supply of Barley, Sorghum and Hops in the global market, according to analysts at Lagosbased Chapel Hill Denham.

Other income fell by 37.4 percent to N119.33 million while marketing and distribution expenses declined and administrative expenses dipped marginally in the period.

Operating profit, a profit from business operations (before deduction of interest and taxes, fell by 58.9 percent to N681.57 million.

Finance cost rose by 117 percent to N1.29bn in the

three months. Net finance cost, the difference between the cost of financing the purchase of assets and the cash yield on the assets, was down by 144 percent as finance income grew 45.3 percent.

This resulted in a loss of N370.41 million and profit after tax margin of -1.4 percent, which means the company lost N1.4 from every N100 it made as revenue.

Analysts at Lagos-based United Capital in a consumer report published earlier in October noted weakness in Guinness’ Beer and Ready-To-Drink segment which is weighing on a slowly growing Spirits and Adult Premium Nonalcoholic Drinks (APNADs)

segment.

“Despite recent efforts to diversify its portfolio, the beer segment continues to contribute about 80 percent to topline while Spirit contribution, though growing, remains weak,” said analysts at the investment bank which still rates Guinness at a Sell.

On the other hand, Chapel Hill Denham recommends a hold on the consumer goods stock with a target price of N42.13, an upside of almost 77 percent from Friday’s closing price.

The company’s shareholders last week approved N4.03 billion declared as dividend for business year ended June 30, 2019.

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

Monday 28 October 2019

COMPANIES&MARKETS

BUSINESS DAY

BANKING

FCMB wins excellence award in customer experience MICHAEL ANI

F

irst City Monument Bank (FCMB) Limited’s giant strides and impressive performance in service delivery and customer satisfaction in the Nigerian banking industry, have again been recognised. The latest is the conferment of the prestigious award of, ‘‘Excellence in Customer Experience Enhancement’’, on the Bank at the Finnovex West Africa Awards, held on October 22, 2019 in Lagos. In addition, the Managing Director of the Bank, Adam Nuru, emerged as the CEO of the year. They were elected to the positions after a survey conducted by the organisers of the award which involved Banks’ customers.

The event, co-located with Finnovex West Africa and organised under the patronage of the Central Bank of Nigeria (CBN), provided a platform for industry shaping discussions with experts, thought-leaders and innovators across the financial services community worldwide. The 2-day conference focused on global trends, disruptions and how market players can determine opportunities and respond to the threats. The gathering also provided an opportunity for financial experts to share knowledge on big and pressing issues, ranging from Financial Technology (FinTech) disruptions to financial inclusion,

blockchain and regtech.

According to the organisers, the conferment of the ‘‘Excellence in Customer Experience Enhancement’’ on FCMB, is in recognition of its outstanding achievements, consistent demonstration of customer service excellence and convenience as well as robust technology.

Moreover, FCMB was recognised for promoting financial inclusion through the deployment of digital banking solutions and other offerings that align with the lifestyles of various segments of the society.

Finnovex West Africa added that, ‘’FCMB pioneered deployment of Over-The-Counter transactions (OTC) using biometrics on Point of Sales (PoS) for both inter and intrabank transfers and withdrawals; the first in deploying OTC transactions on PoS through card and biometrics means and the first to release a wallet account in the industry’’.

Among the offerings of the Bank in the digital banking space are, the FCMB *329# USSD code, enhanced FCMBMobile, artificial intelligence chatbot, named Temi, among other digital platforms that have continued to make waves and redefine financial services.

On the award of CEO of the Year to the Managing Director of FCMB, Nuru, the Finnovex West Africa conference organisers said, ‘’Nuru has implemented and understood the tech space and spearheaded the digital

transformation in the Bank.

Both awareness and return on investments have continued to trend positively driven by his leadership in conjunction with the dynamic vision of the Group’s Board of Directors’’.

Speaking on the ‘‘Excellence in Customer Experience Enhancement’’ award during the presentation at the conference, the Divisional Head, Service Management & Technology of FCMB, Oluwakayode Adigun, said it is another confirmation of the Bank’s unequalled commitment in offering cutting-edge and exceptional services as a forward-looking institution built on the culture of excellence.

According to him, ‘’this award reflects the quality of services we offer at FCMB. It is another validation of our strategic focus to consistently enhance customer experience. This shows that the various transformation initiatives we have deployed across our platforms to meet the needs of our customers are yielding the desired results and appreciated by not just customers, but other stakeholders. This will inspire us to get better’’.

Adigun assured FCMB will continue to raise the bar and sustain the tempo by going the extra mile to provide simple, helpful and reliable banking services driven by a team of highly professional staff, robust technology and best practices.

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REAL SECTOR WATCH Manufacturers renew demand for industrial park in Rivers to boost industrialisation …Urge Customs, other regulatory agencies to support AfCFTA-era economy IGNATIUS CHUKWU

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anufacturers have again demanded for the establishment of an industrial park in the Rivers State capital to create a pool of facilities and security to aid industrialisation.

The call was renewed at the first-ever ‘CEO-Business Luncheon’ organised by the Manufacturers Association of Nigeria (MAN), Rivers/ Bayelsa chapter at the Oak Heavens Hotel on Woji Street in GRA 2 last Wednesday.

Adawari Michael Pepple, chapter chairman, who led in the call, urged Gov Nyesom Wike to set up what he called ‘a world class industrial cluster’ in the Greater Port Harcourt axis to attract more investments into the oil-rich state.

The senator, however, expressed profound appreciation to what he described as the support Wike who he said has shown commitment to the development of the state in his first tenure and is not relenting

L-R: Olusola Kehinde, former dean of Faculty of Agriculture, Lagos State University (LASU); Modupe Onabanjo, chairperson, LCCI Education Group; Ebun Akintola, director, Lagos State Ministry of Education; Grace Nnachi of Queen’s College, 2019 LCCI Essay Competition 1st Prize winner; Babatunde Ruwase, president, Lagos Chamber of Commerce and Industry (LCCI) and Michael Olawale-Cole, vice president (LCCI), during the 2019 LCCI Essay Competition Prize-Giving event in Lagos on Friday

in pushing the limits in his developmental strides as some politicians do in second term.

“But he is doing even more to better the lot of the state and the business community,”

he said.

MAN has been asking for an industrial park in the state capital to create a cluster where most industrialists would prefer to collocate. The demand

FG to ease access to N2.5bn artisanal mining fund, grow investments HARRISON EDEH, Abuja

T

he federal government has pledged to ease the procedures that would aid access to the N2.5 billion artisanal mining fund for small-scale miners launched by the federal government in 2016.

The renewed commitment follows growing concerns of poor access to the fund, which was launched to drive growth in the sector that contributes less to Nigeria’s Gross Domestic Product despite huge potential.

The artisanal miners, many of whom have not formalised their mining businesses, continue to lament difficult conditions laid down by the Bank of Industry, including bank guarantee, collateral security, and tax clearance, among others. ”In collaboration with the Bank of Industry, (BoI), the Ministry established a small-scale mining fund of N2.5 billion to grant loans to artisanal miners at 5 percent concessionary rate.”

“The tough conditions which hitherto were necessary have made it difficult for people to access this fund.

Only one artisanal miner has accessed the fund in the sum of N95 million out of the N2.5bn,” Olamilekan Adegbite, minister of mines and steel development, said while opening the mining

week in Abuja.

The mining industry has a weak contribution of 0.12 percent to the Gross Domestic Product (GDP). This is poor for a sector which largely has the capacity to drive Nigeria’s diversification away from oil resources.

Adegbite stated that the federal government is working out some other unorthodox means to make sure that other people access this fund.

Speaking on the proposed Mineral Export Guidelines, the minister said there would be no room for royalty payment evasion.

“All mineral exports shall be inspected by government appointed independent pre-shipment inspection agents, who are empowered by law to render quantity and quality control services and monitor pricing.”

This control mechanism is in accordance with the Pre-Shipment Inspection of Exports Act, the minister said.

“We are also building a strong geosciences base to enhance our competitiveness as a world-class mineral exploration destination that foreign investors would find attractive,” he said.

Nigeria has only been able to attract 0.12 percent out of the 5 percent share of exploration investment flowing into the West African region,” www.businessday.ng

he lamented.

Adegbite said the federal government has commenced the process of retrieving Nigeria’s colonial geological data from United Kingdom by engaging the British Geological Survey (BGS).

This is to build a national electronic geo-data archiving management system to be called the Nigerian Geodata Centre at the Nigerian Geological Survey Agency (NGSA).

He further pointed out that the ministry has been working on increasing investments in mining through broadening economic opportunities in the sector. The ministry would work in line with federal government’s Economic Recovery and Growth Plan to advance diversification of the economy through the Mining sector, he pledged.

In his earlier remarks, Kabiru Kankara, chairman of the Miners Association of Nigeria (MAN), said the association would work with the government to advance the growth of the mining sector.

“The federal government in its magnanimous posture allocated N2.5 billion to ease the way of doing business as far as the small and artisanal miners are concerned, but over two after this allocation, nothing has come to the hands of the miners,” Kankara lamented.

had echoed few months ago when ALCON opened its low voltage manufacturing plant in Trans-Amadi where Simbi Wabote, the Nigeria Content Development & Monitoring

Board (NCDMB) executive secretary, talked about plans to establish industrial parks in some states and how some states had shown more enthusiasm than the others.

It was at the point that industrialists pleaded for one in Port Harcourt. Now, MAN is renewing the calls.

Some CEOs suggested Afam in Oyigbo LGA as the most suitable place to locate the proposed industrial park, saying there is massive land, steady power from Afam Power Station, and nearness to the seaport.

Speaking further, Pepple warned that failing to prepare for the coming of the African continental Free Trade Agreement (AfCFTA) could harm Nigeria badly. He said it would open all doors in Africa to goods and that it could lead to dumping if any local group failed to improve quality and reduce cost.

“This is my second year in office and we thought it wise to bring CEOs and business leaders across the various sectors to

discuss the emerging trend in the global business space and particularly the African market as a result of the AfCFTA. This new market drive will have great impact on the way we do business going forward and there is therefore an urgent need to start positioning for a better opportunity rather than wish that the AfCFTA protocol was never signed. As we all know, it has been signed and it is here to stay,” he further said.

The Customs was to present a paper to guide and sensitise the manufacturers on their role and that of other business-support agencies in the AfCFTA era, but E.C. Nwakama who represented the service said when the FG gives directive on AfCFTA, it would promptly obey.

The chairman of the MAN, however, said the luncheon had afforded the CEOs of the opportunity to interact and to present where it is paining them for onward transmission to the Customs and other agencies.

At 60, Mouka reiterates commitment to quality, market leadership GBEMI FAMINU

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ouka, the nation’s leading mattress and other bedding products manufacturer, marked its 60thanniversary in Nigeria on Monday, restating its commitment to quality products to maintain its market share leadership.

Raymond Murphy, managing director/chief executive officer, Mouka, explained to journalists in Lagos that the last 60 years has been a long and successful journey for Mouka.

He said the company has built an enduring brand in the last six decades, describing Mouka as a truly indigenous company staffed by about 801 employees, with him being the only expatriate.

The company, he stressed, also has over 300 distributors, some of whom are second generation distributors who have been with the company for over 40 years. Murphy also praised the shareholders of the company for giving quality and wholesome support to the company over the years.

“This is a big milestone for us.

At 60, we are the market share leader in the foam and beddings sector. Recent research, according to some marketing professionals whom I met on my last trip to Dubai, also attests to the fact that Mouka is not only the leader in Nigeria, but also in Africa and the Middle East,” he said.

Ahead of the 60th anniversary, Mouka was two weeks ago endorsed by the Nigeria Association of Orthopaedic Manual Therapists (NAOMT).

The endorsement comes on the back of consistency in quality delivery and innovative mattress production, which have

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L-R: Femi Fapohunda, chief operation officer, Mouka Limited; Chris Okafor, national secretary, Association of Clinical and Academic Physiotherapists of Nigeria and Raymond Murphy, managing director/chief executive officer, Mouka Limited, at the media briefing on the Mouka’s 60th anniversary in Lagos recently.

characterised the brand’s market path in Nigeria.

Onigbinde Ayodele, national president of the association, described the endorsement of Mouka as an offshoot of a detailed assessment of the brand’s orthopedic mattresses.

Before the endorsement, it had also been a harvest of laurels for Mouka. For instance, the foremost foam manufacturing company was last month recognised by the National Employers Consultative Association (NECA) for safe work environment. This is anchored on its 2018 Occupational Safety and Health (OSH) audit exercise following what the association described as an exceptional performance by the indigenous manufacturer.

Before the NECA recognition, the foremost indigenous mattress and foam products manufacturer had also been recognised twice by the London Stock Exchange Group (LSEG), in the group’s Companies to Inspire Africa report.

Mouka was listed in the – LSEG’s Companies to Inspire Africa 2019 report after it made the 2017 inaugural edition. The CEO of Mouka said the foam @Businessdayng

company had to work earnestly to consolidate its performance in the sector to make the list of companies to inspire Africa for the second consecutive edition.

To be included in the list, companies need to be privately held, and show an excellent rate of growth and potential to power African development.

Mouka was recognised alongside 360 companies from 32 countries across the continent represented in this year’s report, boasting an incredibly impressive average compound annual growth rate of 46 percent, up from 16 percent in 2017.

The foundation for Mouka was laid 60 years ago in the historic city of Kano when the scion of the Faiz Moukarim family started the Moukarim Metalwood factory to manufacture furniture and iron beds.

Since then, Mouka has gone into manufacturing of foam and spring mattresses, as well as other bedding products at its three production facilities across Nigeria.

The company has also developed an extensive distribution network with more than 1,000 branded sales outlets nationwide.

Monday 28 Ootober 2019

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REAL SECTOR WATCH Our target is to connect businesses at 2019 trade fair — LCCI chair Gabriel Idahosa is the chairman of the Lagos Chamber of Commerce and Industry Trade Promotion Board.

In this interview with Odinaka Anudu, he speaks on opportunities in the 2019 Lagos International Trade Fair.

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ell us about the theme of this year’s Lagos International Trade Fair?

The theme for the 2019 Lagos International Trade Fair has been established as ‘Connecting Businesses, Creating Values’. That is the theme, and this is the brand promise for the Lagos International Trade Fair, which has been established as our permanent brand promise and our annual theme.

Around this theme, we then develop a lot of programmes that will achieve that primary objective of ‘connecting businesses and creating value’.

Our target is to connect businesses with government and regulatory agencies; connect businesses with the state of Lagos; connect businesses with outside Nigeria and with outside Africa.

So, the entire focus is to create value for businesses and for other partners. So, the trade fair is also about creating values for all our partners— whether they are media, corporate or government institutions that are our major partners in enhancing an enabling environment for businesses.

What we want to do with the trade fair really is to enhance value creation to see that participants who come this year as exhibitors get sufficient businesses to encourage them to come back again, and to ensure that visitors get value from good products or services and learn about new things. The trade fair is not only about buying goods and services; it is also about learning a lot about the economy, our country and about the countries that come. Most of the countries that come have ‘Special Days’ where they exhibit their cultures and artistry. So, we get to know a lot of that.

You find out that in trade fair, a lot of children come from primary and secondary schools, and higher institutions. They come essentially to learn about the economy and the society because in 10 days, we often have between 500,000 to 600,000 visitors. We have up to 3,000 exhibitors from various countries.

So, it is a large commercial and cultural experience for visitors and exhibitors because the exhibitors themselves get to meet people from other states and countries. So, that is all what the trade fair tries to achieve every year: Connecting more and more businesses and creating more and more value for everyone, including our media partners because we are all in it to develop our businesses.

The state of Lagos is not equally left out because, every year, this fair contributes to creating new businesses. A lot of the exhibitors coming for the first time either create a branch in Lagos or in Nigeria; or, have either a distributor or a representative. Some of them eventually build factories in Nigeria because of the original demand that was created from their first visit. We have several cases like that.

In terms of number, how many exhibitors are you expecting this year?

As we speak, more and more exhibitors are signing on. We have about 2,000 at the moment out of which about 300 are foreign exhibitors from 17 countries.

We have additional countries coming from Africa and some are still signing on as the days go by. Usually, up to the day before the event, we still have some more countries and exhibitors coming in.

regulatory agencies also have their special days here.

In the same trade fair, the investors get to meet the regulatory agencies who take the opportunity to tell them the regulations, procedures, guidelines and laws to conform with, for doing business in Nigeria. The CAC is always around every year and register businesses here on the spot.

So, from the very beginning of coming into Nigeria through the Lagos International Trade Fair, they (foreign investors) are exposed to all the regulatory agencies. Even bringing goods to display at the trade fair, the Customs, NAFDAC, SON and other agencies must clear the quality of those goods even though they are coming for trade fair. We facilitate that by sending the names of all the exhibitors to the Customs, SON and Immigration for their visa and for checking of the quality of the products before they come in.

Gabriel Idahosa

Let us look at the impact of trade fair on the Nigerian economy.

Well, the trade fair actually started as a government project. Before the Lagos Chamber of Commerce and Industry took over the event, government of Nigeria started the trade fair as a primary vehicle for promoting the country’s economy to attract foreign investors and showcase the opportunities. And it has done that exceedingly well from its original location somewhere in Bonny Camp (Lagos) and moving to various places within Lagos and then Tafawa Balewa Square, which is the venue of this year’s trade fair.

Every year, local businesses are able to expose their products. A lot of companies launch new products during the trade fair. A lot of foreign investors come to the trade fair for the first time and that is how they get to know how big Nigeria is. And from there, the first thing they will normally do is to look for distributors in Nigeria.

Many of the distributors of foreign products in Nigeria actually did not have to travel abroad to become distributors. They make contacts during our trade fairs.

As we speak, in the last five years, a country like Japan has started attending the trade fair and as a result of that attendance, about five Japanese factories now operating in Nigeria were set up just because of their first experience about five years ago. They told us at that time that because of distance and language, they did not have much knowledge about Nigeria. But since that time, when Japan External Trade Organisation (JETRO) invited the Japanese business community and supported them to set up, they have been coming every year. They have one of the biggest halls of 2250sqm of space which they take every year from that first experience. There are number of Japanese companies here in Lagos and Ogun states, including a large construction company.

In Japan, they really did not have a lot of www.businessday.ng

information about this county beyond certain highlights they see in international media about one bad news or the other about Nigeria and Nigerians. Their coming to trade fair opened their eyes to the opportunities. So, that is one of the pieces of evidence about the impact on the economy.

This year, we have 7,700sqm of space taken

by Chinese exhibitors. This is double of what they normally take. And that is because of the annual impact on experience. Chinese companies that came through trade fair in previous years have established in Nigeria now.

So, it speaks for itself the amount of additional space they continue to take. Last year, the Chinese took 4,200sqm of space. This year, they have taken 7,700sqm of space, which is double.

Remember that these are hardnosed businessmen who do not throw away one naira of their money. It is just the experience of what they have seen in previous visits.

You know that the Chinese have some free trade zones in Ondo State and are doing some in the East. Most of it is as a result of previous participation. During the special days, both Chinese and Japanese tell us how the history of their businesses in Nigeria.

Beyond promotion, do you have mechanism to checkmate the quality of products these investors actually bring to the country?

Well, our research department essentially gathers data about participation, pre and post the fair. But as an organisation, the Lagos Chamber of Commerce is not a regulatory body. It is an association to promote and advocate good business environment. So, what we do is to attract these investors. Here in the trade fair, all the regulatory agencies are here: the Customs, National Agency for Food and Drug Administration and Control (NAFDAC), Standards Organisation of Nigeria (SON), Corporate Affairs Commission (CAC), Nigeria Immigration Service (NIS) and so on. We give them the opportunity to interact. These

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How will MSMEs thrive within the trade fair environment?

The first thing we do for MSMEs is that we give them massive discount. What they pay is not what the big companies pay for space. We give them a massive discount.

Secondly, we aggregate them in an area where they can have visibility. This is because if we scatter the MSMEs around, they may not have visibility, so we aggregate them in a place. Even though they are enjoying high discount, they equally have a lot of visibility.

There is no way one comes to the trade fair without passing through their hall because they are all at one place with their products segregated into mini sectors.

Besides, in the promotional activities we do, we highlight them. All the different MSMEs groups are incorporated. In addition, this year, UBA has a special discount for MSMEs participating in the fair.

These are some of the visibility we give them so that they will get full benefit from participation. Remember, they are the economy, not those big names you hear. We have a lot of programmes for MSMEs. We try to organise access for fund for them. We run training programmes for them all year round. That is the way LCCI nurture MSMEs. The chamber just launched the Creative, Entertainment and Sport Group. How much are we expecting to see from them in the coming fair?

We realised they are aspects of the economy that have had sufficient attention a long time.

So, we created the new group, ‘Creative, Entertainment and Sport Group’ in the chamber.

As expected, the entire stakeholders are very excited about it.

You know that recently, the Federal and Lagos governments have agreed to take over the National Theatre to develop a creative park.

Three years ago, we had a creative fair inside the Lagos International Trade Fair. So this year, we do not know how much visibility they will have in the trade fair because they are less than three months old as a sector. But we expect that definitely, next year we would have worked with stakeholders and we will see what can happen.

For us at the trade fair, we really happy to have a hall for the creative industry on the fair grounds that take creative, entertainment and sports. It is something that could happen, coming next year, but depending on how that engagement goes.

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Monday 28 October 2019

BUSINESS DAY

insurance today

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E-mail: insurancetoday@businessdayonline.com

Limited balance sheet size, capacity constraints limit insurers’ role in extractive industry – say’s report …this is despite local content laws Modestus Anaesoronye

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ole of insurance in business resilience in the extractive industry has been largely limited by low balance sheet size and capacity constraints, says report released recently in Nigeria by Albert van der Linden, senior research associate of the Centre for Financial Regulation & Inclusion (Cenfri).

Albert said this is despite the local content legislation that requires the bulk of oiland-gas risks to be carried domestically and the resultant effect being that majority of premiums are reinsured and, eventually, most risks are carried abroad.

The study by Cenfri in collaboration with the World Bank, which seeks to understand how insurance market development can contribute to sustainable and inclusive growth in Nigeria, was launched at the Insurance Directors Conference organized by the Center for Insurance

L -R: Ebose Augustine, MD/CEO; Elijah Akpan, chairman and Ime Umoh, company secretary/legal adviser, all of Anchor Insurance Company Limited during the Company’s 29th Annual General Meeting (AGM) held in Uyo, Akwa Ibom State.

and Financial Management, held in Lagos On the Small and Medium Scale Enterprises, the report says insurance has been able to serve as an enabler for SME industrialisation, but is still very limited because many small businesses face sub-

stantial challenges such as poor infrastructure, obsolete technology, weak access to markets, inconsistent government policies, regressive multiple taxation and limited access to credit.

It noted that insurance has an important role to play in

principle in helping to cover risks and grant access to credit, but in practice very few, if any, MSMEs are covered.

“The current landscape is indicative of a market still struggling with the basics of corporate insurance, with limited ability or incentive

to innovate to serve more difficult-to reach, less lucrative small business and trader clients.”

Insurable risks in agriculture: Agriculture supports the livelihoods of many Nigerians, yet it is unable to meet domestic food security needs.

Weather-related and biological risk events often have devastating effects on yields and disrupt the entire value chain from input suppliers to ultimate food processors. Risk mitigation through insurance provision in agriculture has been limited to date, largely provided by the state-owned Nigerian Agricultural Insurance Corporation (NAIC).

The market has only recently been made more accessible to private-sector participation, through public-driven schemes such as Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) and the Anchor Borrowers’ Programme (ABP) Opportunities for enterprise development: The diagnostic report identifies the following oppor-

tunities for insurance to contribute to business resilience and enterprise development: Access to credit for MSMEs Insurance, as a risk management tool, can be an important enabler of access to credit by reducing the risk of lending to SMEs for credit providers. In particular, mesolevel insurance distributed via credit providers presents an opportunity, but indicators are that the bancassurance guidelines pose challenges to bank-based distribution, especially in rural areas.

Public–private partnership in agro value chains: The fragmented nature of smallholder farmers means that, for agricultural insurance to reach scale, distribution needs to be anchored to a central off-taker, lender or processor. Government-driven schemes such as the NIRSAL and ABP enable value chain development, credit expansion and guarantees through public–private partnerships, but indications are that much efficiency gains can be had in public-driven initiatives.

NSIA flags off awareness campaign on value proposition for customers Modestus Anaesoronye

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SIA Insurance, one of the fastest g rowi n g c o mp o s i t e u n d e rwriters in the country has flagged off an awareness campaign, telling the Nigerian public what it stands for, products and services, access channels and value propositions.

Ebelechukwu Nwachukwu, managing director/CEO, NSIA Insurance, explaining the awareness campaign which has broken

in major radio stations and the social media said “We are putting ourselves out there to remind our customers of our commitment to serving them well. We bear in mind their needs and provide tailor-made solutions to suit them. We are known as “The true face of Insurance” because we understand and respond to all aspects of the insurance business.

According to her, the Company wants’ to increase its customer base not necessarily to grow premium volume, but to touch as more people as possible by adding

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value to their lives and businesses.

Nwachukwu noted that that the company places high value on integrity and professionalism which is why the prompt payment of Claims is a part of their commitment to customers.

“Proof of this is the payment of over N679 million in 2017 and N2.4 billion in claims settlement to our clients in 2018.”

This is in keeping with the commitment to render stellar customer service to clients and in line with our quality objectives to pay gen-

Ebelechukwu Nwachukwu

uine claims within 48 hours following the receipt of the signed discharge voucher”,

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she added.

She also informed of the company’s diversified business approach as they recently partnered with Multichoice on the DSTV THANKS Program, to reward loyal DSTV subscribers with 10 percent discount on four identified products which includes; NSIA Comprehensive Motor Insurance, NSIA Motor Insurance- Third Party Fire & Theft, NSIA Householder Insurance and NSIA Personal Accident Cover.

NSIA Insurance also informed of the successful

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completion of their 2019 ISO Surveillance Audit by the Standards Organization of Nigeria (SON), after they were awarded the ISO 9001:2015 Quality Management System Certification in May 2018. This certification was achieved due to the successful implementation of the Quality Management System and priority for customer satisfaction.

The company is also offering Travel Insurance products with different packages and imbedded benefits, as well products taking health insurance products.

Monday 28 October 2019

BUSINESS DAY

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Expert calls for stronger risks management on petrol tanker fire disasters Modestus Anaesoronye

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xpert in insurance and risk management has called for effective risks management on petrol tanker fire disasters that is becoming regular occurrence across different parts of the country now.

Jacob Adeosun, out-going president of Risk Managers Society of Nigeria (RIMSON) who made the observation expressed concern over the unabating accidents involving petroleum Products (liquid & gas) Tanker Trucks.

Adeosun, a chemical engineer and certified risk management professional, is urging prompt and decisive action by the Federal Government in addressing the catastrophic disasters periodically inflicted on Nigerians whenever the petrol tanker accidents occur.

Appalled by the spate of the petrol tanker disasters, Adeosun wants the Federal Government to take a bold risk management initiative to decisively deal with the realities which have continued to defy logical reasoning on why the ugly trend has not received adequate mitigating attention.

A release signed by Joseph Obah, RIMSON’S media consultant has quoted Adeosun as stating that “.the disasters seem unending”, adding that the developments are worrisome, especially on account of the irreplaceable loss of innocent lives, the innocent injured who may remain deformed for life and many who are suddenly stripped of their livelihoods as a result of the loss of their hard-earned properties ( houses, shops, vehicles etc) .The release further stated that “many of the victims would never recover from the colossal losses in the absence of any viable and effective compensation scheme”.

This is coming in view of recent reports

(L-R) Ose Oluyanwo, president; Tonia Smart, past president and Yetunde Adenuga- Alatise, past president, all of Professional Insurance Ladies Association (PILA)during the PILA Night at the 2019 Professional Forum in Abeokuta, Ogun State .

of petrol tanker accidents and their attendant collateral damage and fatalities. The most recent incident is the Onitsha Tanker fire of 16 October, 2019 which reportedly destroyed 40 houses and 500 shops, worsened by avoidable deaths and injuries.

The Upper Iweka Onitsha incident, according to reports was followed by another tanker explosion which destroyed buildings, vehicles and other valuables along the Enugu-Onitsha Expressway on 18 October, 2019. In retrospect, we cannot forget the June 27, 2018 mayhem caused by the petrol tanker lorry explosion on the Otedola Bridge on the Lagos-Ibadan Expressway which reportedly killed 12 persons and annihilated over 50 vehicles in the inferno.

September 10, 2018 witnessed another horrific gas tanker explosion at a petrol station along the Lafia Makurdi Road in Nassarawa State, recording 35 fatalities and over 100 injured.

The out-going president of Risk Managers Society of Nigeria, Jacob Adeosun has in the statement taken a critical look at the petrol tanker mishaps, stating that since it is impossible to eliminate petroleum products tanker incidents, it would however be prudent and responsive for government to initiate new measures especially for the innocent victims of these horrendous disasters. In his view the new measures with humanitarian perspectives, will go beyond merely lamenting these incidents by taking steps which will address the sufferings of victims.

Adeosun posited that his recommendations would not dwell on loss control and accident prevention measures which a number of the Roads and Petroleum Industry Enforcement Agencies are already addressing.

He recommended therefore, that the Federal Government should initiate a new recovery or compensation empowerment

of innocent victims of petrol tanker fires and explosions through insurance or any other system.

“That the existing compulsory Third Party Motor insurance is totally unrealistic for the scale of the destruction visited on victims by these incidents. Therefore support from state governments would be an option but this also is fraught with the problem of adding to the plights of the already overburdened governments struggling with payment of salaries.”

“That in light of 2 above, the new RIMSON Executive led by Raymond Akalonu should liaise with appropriate industry stakeholders like the Nigeria Insurers Association and Government Agencies to undertake the design of a new responsive insurance solution, sinking fund or other viable alternative that will provide adequate care, recovery and restoration of innocent victims of petroleum products tanker disasters in Nigeria.”

Linkage Assurance increases authorized share capital to N15bn …hopeful on meeting recapitalisation requirement Modestus Anaesoronye

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nderwriting firm, Linkage Assurance Plc has secured the approval of its shareholders to increase the authorized share capital of the company from N7.5 billion to N15 billion by the creation of additional 30,000,000,000 billion ordinary shares at 50 kobo each.

This is to enable the general business insurer meet the new minimum capital requirement set for insurance companies in the industry, and position for bigger ticket risks in the market.

Directors of the company at an Extra Ordinary General Meeting held in Lagos also secured the approval of the shareholders to raise additional equity capital up to the maximum limit of the authorized share capital, whether by way of way of special placement or public offer, right

issue or other methods or combination of any of them, either locally or internationally and upon such terms and conditions as the directors may deem fit in the interest of the company and subject to the approval of the regulatory authorities.

Joshua Fumudoh, chairman of the company addressing shareholders at the meeting said “the new share capital regime provides unique opportunity for the company to strategically position itself as a key market leader within the insurance industry”.

Fumudoh therefore assured the shareholders, that the Board and Management will utilize the additional equity capital to aggressively expand and grow the business and ensure consistent returns on investment to shareholders.

Daniel Braie, managing director/ CEO, Linkage Assurance Plc responding to questions from shareholders said the board has quite a number of options to www.businessday.ng

recapitalize the company, but assured them that any decision that will be taken at the end of the day will be in the overall interest of the shareholders.

With nearly N200 billion expected into

Daniel Braie, MD/CEO

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the Nigerian insurance industry after the ongoing recapitalisation by underwriters, the sector is hopeful to emerge stronger, contribute reasonably to the economy and also able to offer good returns to investors.

Industry experts believe that the sector post consolidation will have enough resources to attract quality manpower, acquire necessary skills to underwrite big ticket risks, increase retention in the local market, and be able to take advantage of untapped potentials to create shareholder value.

The National Insurance Commission (NAICOM) had in a circular issued on Monday May 20, 2019 announced increase in the paid-up share capital of life companies from N2 billion to N8 billion; General Business from N3 billion to N10 billion; Composite Business from N5 billion to N18 billion; and Reinsurance Companies from N10 billion to N20 billion, with 30th June 2020 as deadline.

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BUSINESS DAY

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This is MONEY

• Savings • Travel • Debt & Borrowing

A guide to your Personal Finance

• Utilities • Managing your Tax

The worse way for a wealthy man to die The Solid Wealth Messenger

Grace Agada

W

hen a wealthy man dies, two things are likely to come to an end. His life comes to an end and his wealth is also likely to come to an end.

No matter what he does his life will end one day. The only thing he can change is the life of his wealth. Unlike life that is destroyed with time, wealth has great flexibility of time. It can die as soon as a man dies or it can last far beyond the man. What determines whether wealth lives or dies is how a man chooses to die. There are two ways a man with wealth can die. He can choose to plan for death leaving his wealth in the hands of competent people who know what to do or he can choose to die a sudden death. When the family of a man experiences sudden death, it means death happened in an unexpected, unanticipated, and unplanned way. It also means that a man dies without a plan for his wealth. This is the worse way for a wealthy man to die. Dying this way exposes a man’s wealth to death and the death of his wealth is a waste of his sacrifice. The best way for a man to die is for him to prepare for death and make plans for it long before death occurs. When he dies this way he experiences death in a more organized and peaceful manner with little impact on his family, wealth and businesses. But many wealthy men never die this way. They die leaving their families in shambles. Their death brings untold pain to family members who try to take charge in their absence.

The reason these men die this way is that they live in denial of their mortality. They reject it, block it out of their minds and think they can gamble on how long they will live. Some even

think that planning for death makes death happen faster.

They fail to understand that the distance between them and death has nothing to do with having a plan. Planning for death makes death less painful and not faster. Whether a man chooses to plan for death or not his life will end. It is better for him to plan and be in a ready mode than for him to be taken by surprise.

For example, the term “Operation London Bridge” is a code name that signifies the event that will happen in the days after the death of her royal majesty Queen Elizabeth II. In her case, death cannot be sudden neither can it be a sudden experience for the entire United Kingdom. As the king of your own castle and the owner of your own kingdom you give yourself and loved ones great mileage when you plan. What a sad thing it will be to lose all your years of hard work shortly after your exit. You can prevent that from happening now. By preparing yourself, family and business to manage a catastrophic event like death. You make your departure less disruptive and painful for your loved ones.

One of the ways you can prepare is to stage a fake catastrophe. This can be achieved through our staged Catastrophe program. The staged catastrophe program comprises a series of organized goal-based events. These events will help you see first-hand what will happen to your family and business in the event of a catastrophe. Staging a catastrophe will give you a near-real experience of how things will run in your absence especially when people believe that you may not be coming back. At the end of a staged catastrophe program, you will be able to see the current level of preparedness of your family and key stakeholders. You will also be able to access how they respond to and manage a catastrophic event should it happen. The goal of staging a catastrophe is to reveal to you the true state of preparedness of your key stakeholders. It is also to show

Objectives • Solid Wealth Creation • Solid Wealth Preservation www.businessday.ng

you what you need to do today to improve that level of preparedness if you are not happy with it. The staged catastrophe program is like what you experience during a staged fire drill exercise that you are unaware of. If during a staged catastrophe your family members and key personnel act confused and disorganized. Then a lot of work needs to be done to take them from a confused state to a state of preparedness. There is no greater test of the viability of a succession plan than to fake the absence of a family leader and CEO. To prepare for your own death is not an easy thing to do.

But it is necessary when wealth and the lives of your loved ones are in the picture. At the least, your family members and business executives must know these three things. They must know what to do when death or incapacitation occurs in relation to the management of your finances, family, and businesses. They must know who handles what role in the family and in your business. They must also know how to find important documents and key relationships that will make the transition process easier.

When a catastrophe happens, people grief but businesses and life must go on. The company needs immediate

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‘

To prepare for your own death is not an easy thing to do. But it is necessary when wealth and the lives of your loved ones are in the picture

help if it is to survive the loss of its key man, and family members need to be able to stand on their two feet. Life should not stop with the passing away of a family leader or head of an organization. Making sure your loved ones have all the vital information they need to carry on your affairs is the best gift you can give to them now. If you decide today to help your family and executives carry on your wealth legacy and wish exactly the way you want it to be. You can achieve that now through the staged catastrophe program.

To prepare your family and key personnel to manage catastrophe well, text “Staged Catastrophe” to 08101860042 The members of your Family and key stakeholders may run your affairs when they know you will return. What happens when they know you will not return?

Grace O. Agada is a provocative truth-telling wealth advisor, author of the popular Solid Wealth Book, a multi-millionaire entrepreneur, Consultant and Coach to an exclusive list of top Executives, Investors and entrepreneurial clients running Businesses from $1-million to $1 billion in size. Grace can help you grow existing wealth and make your wealth irreversible across many generations.

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BUSINESS DAY

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Aisha Raheem: Transforming Nigeria’s food chain with technology JOSEPHINE OKOJIE

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any entrepreneurs are driven by a passion to solve societal issues. For Aisha Raheem, founder of Farmz2U, her driving force is to address issues of food waste and nutrition with technology solutions.

Through her Farmz2U software, which employs artificial intelligence and machine learning, Aisha optimises the agricultural value chain.

“Our USP is the use of consumer data—not limited to end-consumers and distributors— to provide trend analysis in supporting a farmer’s production planning,” she says.

Aisha was inspired to establish Farmz2U owing to a personal healthcare scare.

“After discovering a lump, I changed my lifestyle with greater focus on nutrition gained mainly from food,” the young entrepreneur explains.

“Through this journey, I

became aware of the challenges in the food industry, and the interrelation of poor nutrition and food waste,” she adds.

To address these societal issues, Aisha was prompted to establish Farmz2U in 2017.

Her entrepreneurship journey started in 2014 but became a business model that was incorporated in 2017.

She started the business small and has invested

about $85,000 since starting. The business has been funded through her private funds and grants.

Her business has continued to grow owing to its adoption of technology to drive food sustainability and address society’s problem of food waste and malnutrition.

She currently has three full-time employees and three freelancers.

On the business expansion plans, she says that

US Consulate commits $105,000 to support Nigerian entrepreneurs … partners TEF to select 20 businesses ODINAKA ANUDU

T

he United States Consulate in Nigeria has committed a public diplomacy grant of $105, 000 to support the training of entrepreneurs from southern part of Nigeria under the 2019 Tony Elumelu Entrepreneurship Programme (TEF).

“Under this partnership, we selected 20 ‘U.S. Consulate/TEF Fellows’ to receive additional entrepreneurship training through a day-long programme at the U.S. consulate general that utilises some of the resources of the Young African Leaders Initiative, including alumni of the Mandela Washington Fellowship,” Claire Pierangelo, U.S. consul general, said at a joint press conference in Lagos last Thursday.

She said the 20 Fellows were selected from the Consular District with a priority placed on five key sectors, which were energy, technology, transportation, agricul-

ture, and health.

Pierangelo explained that the programme was intended to give the Fellows insight to innovative US business models that would help them manage their businesses, market their products or services, seek capital, and develop partnerships.

She said the U.S. Mission was interested in supporting Nigerian entrepreneurs because its primary goal was to support Nigeria’s economic development.

“And entrepreneurship is a key driver of economic growth and success. That is why the U.S. Department of State supports entrepreneurs all over the world by working with host nation governments and non-government organisations such as the Tony Elumelu Foundation,” she further said.

Ifeyinwa Ugochukwu , chief executive officer of TEF, said the purpose of the partnership was to leverage the novel philanthropy www.businessday.ng

pioneered by TEF focused on empowering African entrepreneurs.

“We are very excited that the United States Consulate has partnered with us to extend the impact of the Foundation here in Nigeria. The partnership will replicate the tried and tested TEF Entrepreneurship Programme model, in response to the problem of youth unemployment across the African continent, and Nigeria in this case,” she said.

She explained that the Fellows benefitting from the programme would receive training, mentoring, business plan review, nonrefundable seed capital investment, and have access to numerous networking opportunities.

Adebowale Daniel Oluwatosin, one of the entrepreneurs supported by the US Consulate, said he has got a contract of N1.2 million and has 10 team members, thanks to the support from the consulate.

Farmz2U in the short-run plans to scale its solutions to more farmers in Nigeria by the second quarter of 2020.

“The Farmz2U solution is currently available to a select few farmers through our closed beta testing exercise. However, we aim to provide this solution to more users through our soft launch with a target date in Q2 2020,” she says.

“We will have a staged release to more users over time through a waiting list system,” she notes.

“Similarly, we are working with local and international agricultural cooperatives and extension systems to provide Farmz2U’s services to farmers,” she adds.

Evaluating Nigeria’s agricultural sector, Aisha says poor technical expertise, fragmented markets and low use of mechanisation have continued to limit farmers’ productivity.

She notes that it is very vital for Nigerian farmers to embrace innovation and technology if they ever want to grow enough food for the population.

She identifies low aware-

ness and cost as the major factors hindering farmers in the country from adopting technology.

She notes that with the solutions Farmz2U is providing, farmers can get a flexible pricing structure to address some of their challenges while getting evidence-based case studies on how technology can boost their productivity.

Aisha tells Start-Up-Digest that inadequate funding and farmers’ low knowledge on the importance of technology in boosting their productivity remain major hurdles to cross.

She notes that the business is trying to overcome the challenge by regularly conducting training sessions for farmers.

“With limited funding, we have managed this challenge by operating a lean cost structure and bootstrapping. And in managing the knowledge gap among users we regularly conduct training sessions,” she says.

She urges the government to encourage the adoption of innovation and technology in the country’s

LCCI inducts 81 businesses

…reiterates commitment to improving MSMEs GBEMI FAMINU

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he Lagos Chamber of Commerce and Industry (LCCI) has inducted 81 businesses as new members of the chamber after they met some set standards.

At the second edition of induction ceremony organised

by LCCI, Babatunde Ruwase, president of the chamber, explained the importance of driving business relationships and growth across sectors of the Nigerian economy.

“The chamber is a special place in the business community, filled with exceptional business leaders and corporate executives across all sectors of the economy,” he said.

He said the LCCI is a leading voice in the promotion of private sector interest to facilitate the global competitiveness of the Nigerian economy, championing several initiatives and policy advocacy activities that have resulted in beneficial reform outcomes and impact.

Joining the LCCI is seen as a strategic decision by corporate businesses, with stakeholders saying that the firms

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are well positioned to enjoy numerous values from advocacy to government support.

The values which cut across exposure to a wider range of potential customers, connections to potential business investors, leveraging on the exposure of the chamber to international platforms, knowledge sharing and learning opportunities, business connections, access to useful and accurate business information, among others.

“The major objective of the chamber, which guides our activities and projects is encapsulated in our mission statement which is ‘to promote and protect the interest of its members and the business community at large through public advocacy, creation, and facilitation of commercial and industrial activities, provision of business development and observance of the standards of business ethics,” Ruwase said.

He therefore implored the businesses to pay attention to good practices, stating that the primary objective of any business is to make profit, satisfy the customers, impact on the business environment to drive @Businessdayng

agricultural systems.

“There is an incentive to increase Nigeria’s agricultural output for the government and the people. Apart from reducing the food import bill, the government will generate more revenue through exports,” she says.

Aisha’s business - Farmz2U- is a recipient of several awards and grants such as recognition as a leading African and Diaspora-led SME by the African Union; Changemaker for the EIT Food; Code of Good Scholarship from Cambridge Consultants, and recognition as a leading female-led innovative start-up by the Royal Academy of Engineering among others.

On her advice to other entrepreneurs, Aisha says, “The world has many problems and too few solutions.

If you want to start a business, make sure it is solving a problem and be clear about what that problem is,” she says.

“Be resilient and committed to the positive impact you wish to create.

Everything else will follow organically,” she adds.

profitability.

Opportunities opened to new members cut across 24 sectorial groups with sports and creative arts recently added to the list.

Soboma Ajumogobia, chairman, membership & welfare committee, LCCI, said, in his address, the chamber would help businesses to develop, increase profitability and create jobs in the Nigerian economy.

He added that as the foremost and largest business interest group in Nigeria, member companies will benefit much from the association if they embrace the tremendous opportunities that their membership status confers upon them while positioning themselves to optimally derive the benefits of membership, acting in consent with the LCCI sphere of influence.

“LCCI shall continue to stimulate key economic indices to achieve economic growth, stable prices, employment generation and balance of payment equilibrium,” he said.

The chamber closed the induction ceremony, presenting certificates and rule book to new corporate members across different businesses.

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Monday 28 October 2019

BUSINESS DAY

START-UP DIGEST

We want to restore trust to Nigerian healthcare system — Odulana DEBO ODULANA is a medical doctor and founder of Doctoora, a platform where foreign and local based practitioners deliver services across multiple locations in Nigeria without incurring setup costs. Doctoora is also an online marketplace where consumers search and book for healthcare professionals. He has over 10 years of combined experience in healthcare service delivery, operations management and entrepreneurship from career exposures in Nigeria, the United Kingdom and the United Arab Emirates. In this interview, he tells ANTHONIA OBOKOH why he set up Doctoora and how much impact he has made since starting in 2018.

What inspired you to establish Doctoora? uring my clinical career, I had the unique opportunity of working at private and public healthcare centers in urban and rural settlements.

One resounding theme was the inadequacy of health workers and the disparity in access due to inadequacy of healthcare facilities and, in dire cases, a complete lack of access. I once worked in a rural general hospital where patients had to travel long distances only to be referred to tertiary centers— because of inadequate equipment and skilled manpower to deliver their treatments.

My experience at a private hospital in an urban settlement was quite contrasting. Pieces of equipment were available but underutilised because cost of services was high. All these were happening in a country where $1.3 billion was being spent on medical treatments abroad yearly.

My vision was set on figuring out ways to reverse this loss of money such that we can grow our health system and achieve inclusion for rural inhabitants who cannot afford much. I opted to create a platform where foreign and local based practitioners can deliver services across multiple locations in Nigeria without incurring setup costs by leveraging the spare capacity in existing private hospitals.

This way, patients that need the services can know where to meet the required healthcare providers. My hope is that this will increase access to healthcare and create prosperity for healthcare professionals so we can stop losing our best health-

country?

As a health management scholar, I recognise recent developments in Nigeria’s health sector, ranging from policy to financing and generally system strengthening. However, I believe we have a lot more to do and we must look towards technology. I am an optimist and strongly believe that we can restore trust to Nigerian healthcare. Quite importantly, the focus must shift towards achieving efficiency in both public and private sector.

D

Debo Odulana

care talents to more developed countries.

What was your initial start-up capital, how were you able to raise it and how would you say your business has grown since starting?

To be frank, all this started with a £500 capital which I spent building the first version of my website. I later raised a further £650 from friends at business school and about £20,000 from family. Initially, we set out to create the largest healthcare chain in Africa that owned no facilities, but our dreams were initially trumped by hospitals that refused to partner with us for the fear of damaging their reputations. For this reason, we established three outpatient clinics to demonstrate our concept and we eventually on-boarded 27 partner facilities within one year. The

other hurdle was building our professional network. Our initial focus was the Nigerian industry where we tried to encourage healthcare professionals to leverage our facility rental solution to establish their own private practices.

While the uptake was encouraging, we noticed these new private practitioners did not have strong clientele. Since then, we have opted to focus on connecting our network of professionals to healthcare consumers who need them.

Our network currently has 185 healthcare professionals across surgical, medical, nursing, physiotherapy, nutrition and other health-allied domains, available to deliver services at our 30 locations in Lagos, Abuja and Ibadan.

How would you evaluate the healthcare industry in the

What are some of your business expansion plans and how can it contribute to the health sector?

We have created a system that allows patients and health insurance companies to gain direct access to healthcare professionals with flexible location-based pricing. Our current goal is focused on building our international network for foreign-based healthcare professionals in our bid to reduce capital flight due to medical tourism. By bringing in foreign- based Nigerian doctors and their international counterparts to perform highvalue surgical procedures and medical treatments in Nigeria, we can serve a lot more people who desire these services but cannot afford the non-treatment costs for example travel, accommodation, et cetera, associated with medical tourism.

Ours is to establish a base for medical tourism in West Africa such that we can attract patients from other countries to purchase healthcare services here. It is our hope that this will go a long way towards building local capacity and healthcare infrastructure.

What are the major challenges you have faced since starting your business?

Every sojourn has challenges and these come on a day-today basis. However, two key challenges have stood out since I started.

First is the hiring talent. The talent pool in Nigerian is quite deficient, especially for startups with a considerably low budget. This makes it difficult to find quality team members to drive the company’s vision.

We have particularly suffered with regard software engineers, which has cost of significant setbacks in our growth.

The second is funding, Access to funding for start-ups in Nigeria is quite difficult, and this makes it difficult for startups to experiment. The funds available from early stage and angel investors are typically not for testing. Every investor seems to want decent traction and a reasonably low risk entry point. We have been lucky to get some grants to support our growth as well as some pre-seed investment, but it will be great to witness a more enabling funding landscape in the near future.

How do you think the government can address some of these challenges in health start-ups?

Honestly, I really do not see much the government can do to help health start-ups beyond providing tax holidays and enabling policies. Healthcare marketing, for example, is a very grey area where a lot of advocacy is currently channelled. The issue here is that if healthcare professionals and organisations are restricted

in their marketing, then how do consumers know about the available services? This sort of policy augmentation will help more health startups grow. Furthermore, there is a lot to be gleaned from new health promoting policies that can provide behavioural nudges to citizens. The advent of such policies will lead to more health tech solutions and help drive adoption of existing solutions.

Have you won any award or gotten any international grants apart from being listed in the Forbes under-30 Nigerian entrepreneurs?

We have won a couple of awards, including the emerging winners of the recently concluded Nigerian Economic Summit Start-up Pitch contest.

Personally, I have been awarded a Global Action Against Poverty Fellowship for designing health interventions for rural communities.

What is your advice to other health start-ups?

I think with healthcare it is really important to use a lot of design thinking to approach what are typically very wicked problems. It is important to be sure that you are solving the root cause of a problem, not the symptoms, as it is quite easy to be dissuaded. More so, we need to be very user-centered in our approach to improving healthcare experiences for people especially in a domain like Nigeria where the general perception of healthcare services is poor. Lastly, it is important to collaborate. Working in silos will likely not help us achieve universal health coverage anytime soon.

We are driven by passion to add value to Nigerian minerals — Aburime-Shine EMOTAN JOSEPHINE ABURIME-SHINE is the managing director of Piramen Ventures, a sub division of Global Ventures Limited. An entrepreneur with a passion for creating change, she speaks with BusinessDay’s HARRISON EDEH, in this interview, on how the company is advancing value addition in the mining sector.

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ell us a few things on your mining activities.

We are a basically a mining company. Emotan Global Ventures Limited focuses on the metal side, lead, gold and other minerals and Piramen focuses on the gemstone side of mining and we have several gemstones like sapphire, ruby, and aquamarine on several sites. Our project is to uncover as many gemstones as possible that we can find in Nigeria.

Do you add value to some of these minerals you have mentioned?

A lot of these minerals, when they are taken in their raw forms, have little value. When you sell in the raw form, the money you get is very little.

Emotan Josephine Aburime-Shine

So it is almost slave labour when you sell in its raw state, but the moment you add value by processing it a little, where you cut the stones into some of the gemstone shapes, you have a better share of the profit

margin that comes out of it. At the moment, Nigeria or Africa is getting less than a percent of the value they ought to get because they don’t add value to it. So we are losing a lot of revenue as individuals and as a country because of that lack of value addition. So, we need to close that gap and change the narrative because our people are just suffering and working for free. They suffer and mine these minerals and sell them at ridiculous prices.

We can’t continue like that.

The values of these stones are a lot more than we are getting from them. So we want everybody to be educated in the fact that these stones are valuable and we can change the prices we get by adding value to them.

Nigeria Mining Week has just ended. What are your takeaways from the event?

It is amazing being part of a conference like this. First of all, everybody gets to meet each other— the big players in the industry. You get to interact with the government and hear all the projects they are trying to do, because sometimes you don’t really know. So at the Nigeria Mining Week like this, we have time to interact with government and tell them our issues and problems. And from what I have gathered, there are a lot of initiatives they are doing to support miners such as loans and grants. Also, they are putting certain things in place and bring in companies that can train. I have to commend the fact that government has become more aware of the

sector and they are rising up to the challenges and getting up to the same standards as the rest of the world.

Do you think Nigeria has the commitment and financial muscles like other mining African countries?

I think that Nigeria will always become a major player in the mining industry. Because in the past, there were underground mining happening, but now that everyone is coming up to make the industry more visible, we think that is going to be the beginning of the kind of influx we want into the sector. Because if people know what we have here, there will be a lot of people coming into the country and that brings in money from travels. Hospitality industry and other industries

will benefit if we do this mining right.

You are a woman in a sector regarded as exclusive and even tough for men. How are you coping?

Women are tougher than men. Have you not discovered we are the champions?

But the minerals are mined in the forest and bushes, how do you think women can cope in terms of stress?

Women tend to be in the different side of mining. Some are into selling, some in the cutting and faceting of the stones. There are different stages, not just one. When it comes to the rough work, they may be a lot more men there, but there are women in the bushes too.

Monday 28 October 2019

BUSINESS DAY

35

cityfile

3 jailed for cyber fraud in Ogun REMI FEYISIPO, Ibadan

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Rubbles of a collapsed two story building at No 7 Rufai Street, Makinde, Ojuelegba in Lagos on Friday. NAN

NDDC uncovers warehouses filled with equipment, expiring drugs IGNATIUS CHUKWU, Port Harcourt

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he acting managing director of Niger Delta Development Commission (NDDC), Akwagaga Enyia has uncovered warehouses filled with items, equipment, trucks and drugs rotting away while the oil rich Niger Delta communities suffer in want.

According to Enyia’s close aides, the degree of waste drew tears from the woman who immediately vowed to put the ones still in good condition to use.

The CEO had undertaken an unscheduled inspection of the warehouses in Port Harcourt where she met the items she described as “high degree of waste and sabotage.”

Enyia was said to be shocked that the warehouses had medical and life-saving facilities, medi-

cals and related materials, waste disposal trucks, outboard engines, electricity transformers, agricultural implement, including tractors, vehicles, stationery and several printed copies of the Niger Delta development master plan, meant for the region but allowed by past management of the commission to rot away.

In particular, the acting MD saw drugs meant f o r d i s t r i bu t i o n t o t h e nine mandate states of the commission which were hoarded until their dates of expiry. She saw waste disposal trucks meant for the states but were left to rot and become unserviceable as well as stationery meant for office use and other expensive equipment.

In immediate response to the discovery, she ordered for the immediate distribution all materials still valid as well as equipment ser viceable,

to the states. She ordered day-to-day briefs from the responsible directorates, just as some have called for disciplinary action on directors that may be liable in the disgusting discovery.

Meanwhile, the NDDC said it was set to distribute 32 waste disposal trucks and 64 waste bins to the m i n i s t r i e s o f e nv i ro n ment in the nine Niger Delta states to help in the campaign for a clean and healthy environment.

Speaking after inspecting three warehouses belonging to the NDDC in Port Harcourt on last week, the acting MD dire c t e d t h e i m m e d i a t e distribution of the utility vehicles as well as 16 modular cold chains for the storage of vaccines.

The acting MD assured that the management would take the necessary steps to facilitate the distribution of equipment and tools to the relevant

government agencies and institutions in the region.

Enyia said that the inspection would help the management to make informed decisions that would reposition the interventionist agency to increase the tempo of its activities in providing sustainable development.

“The items we saw at the warehouses will be distributed immediately.

Henceforth, before any procurement, we will make sure that the end users are fully involved to eliminate the problem of prolonged storage.

“I believe that as we begin to pay more attention to monitoring and inspection of on-going projects, as well as commissioning completed ones, Nigerians, especially the people of the Niger Delta region, will appreciate what the funds released to the NDDC were being used for,” she said.

ustice Ibrahim Watilat of the Federal High Court, Abeokuta Division has convicted Opeyemi Ademosun and Gbolahan Olamide Dalamu of criminal impersonation and sentenced them to one year imprisonment each.

His colleague in the division, Justice Mohammed Abubarkar, also sentenced another fraudster, Sokola Idris, to four months in prison.

Each of them was found guilty of a one-count offence filed against them by the Ibadan zonal office of the Economic and Financial Crimes Commission (EFCC). The charges arose from the plea bargain they entered into with the EFCC The charge against Ademosun reads: “That you Ademosun Ope yemi in November, 2018 at Awa

Ijebu within the jurisdiction of this court, fraudulently impersonated by representing yourself to be Agent Matt David, a United States of American citizen through your email address: agentmattd av i d @ g m a i l . c o m a n d t h e re by c o m m i t t e d a n offence contrary to Section 22(3)( b) and punishable under Section 22(4) of the Cybercrimes (Prohibition,Prevention Etc) Act, 2015.”

After the accused persons’ ‘guilty’ plea, counsel to the EFCC , O yediran Oyelakin prayed the court to sentence them according to the terms of the plea bargain agreement.

Apar t from the oneyear sentence, the judge also ordered Dalamu to restitute $600 through the Federal Government of Nigeria to his victim. He will also forfeit Apple Iphone 7 to the Federal Government of Nigeria.

Oyo slashes rent on business complex

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yo State has cut down the rent paid by traders at the Ibadan Scout Camp Neighborhood Market.

The traders are now to pay N40,000 as against N62,000 for locked-up shops while the open stall was cut from N16,000 to N8,000.

The action, according to the commissioner for trade, industry, investment and cooperatives, Adeniyi Adebisi was premised on the promise of the state governor, Seyi Makinde to reduce the cost of using government-owned shops by traders and market women.

Adebisi disclosed this while on a visit to the Scout Camp Market in Ibadan South East local government, at the weekend, calling on the traders still displaying their wares by the

roadside to desist in order to avert accidents as well as allow for free flow of traffic around the area.

He added that the need for the traders to vacate the roadside was also part of the reason decision to cut rent on the locked-up shops and the open stalls, as some of the traders complained that the rent was not affordable by them.

The commissioner promised that the basic amenities craved by the traders in the market would be provided, saying “the present government has seen the rigours you go through to survive in this economy, we knew how much the past government has imposed on you and why some would decide to use the roadside to display their wares, even against warning on the apparent danger posed by such act.

Lagos intensifies enforcement of traffic laws JOSHUA BASSEY

...as more offenders nabbed

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fence and environmental nuisance.

The state commissioner for transportation, Fredric Oladeinde, said the exercise was to restore sanity on Lagos roads, adding that the enforcement would be sustained until success is achieved.

According to Oladeinde, it has become obligator y for road users to remain disciplined while plying the roads in order to create ease of business across the state.

ag os State g ove r n m e nt at t h e weekend intensified its ongoing clampdown on illegal activities in different parts of the metropolis, arresting traffic offenders, street traders and miscreants in Oyingbo, Idumota and Apapa.

Several persons have so far been arrested in different areas of the state in the last one week in connection with traffic of-

www.businessday.ng

Oladeinde noted that in addition to the clamp dow n on offender, the ministry of transportation has also developed an inclusive plan to find lasting a solution to the perennial challenge of traffic congestion.

“We have had several engagements with chairmen of local government areas, members of transport unions, association of market women and men as well as other relevant stakeholders on the need

to support the government in this crusade of ridding our roads of illegal activities”, he said.

The commissioner said that the exercise would extend to other areas including Ketu, Ikorodu, Mar yland, L ekki/Ajah, Iyana Ipaja and Ikotun corridors, warning traffic offenders not to fall victims of the enforcement exercise, as anyone found contravening the law would be prosecuted.

The commissioner described the heavy gridlock being experienced in the

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state as man-made, stating that the enforcement team would ultimately ensure sanity.

“When you have commercial vehicles parking to pick or offload passengers at wrong locations while traders display their goods on the walkways, how do you achieve orderliness on the road”, he wondered.

The special adviser on transportation, Oluwatoyin Fayinka, who was also part of the team that conducted the enforcement, @Businessdayng

reiterated that roadsides and walkways were not designed for trading and as such people must desist from engaging in any form of business activities on the roads.

Fayinka stated that t h e re wa s n o t e nab l e re a s o n f o r s e l l i n g o n walkways and highways as markets have been provided, adding that government will be ready to assist traders through its micro finance bank to secure loans for their businesses to thrive.

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Monday 28 October 2019

BUSINESS DAY Harvard Business Review

MONDAYMORNING

In association with

Americans are having fewer kids. What will that mean for higher education?

NATHAN GRAWE

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emographic change is a constant force. College campuses are often at the forefront of the shifting composition of each generation. An evolving demographic trend — low fertility — suggests new challenges ahead for higher education. Looking forward 18 years from the 2008 recession, we can anticipate a sizable decline in prospective college students beginning in 2026.

My own work seeks to understand what these trends mean for the demand for higher education. At first, it seems obvious: Fewer young people means declining demand. However, no school serves a representative swath of students; community colleges, regional colleges and universities, and institutions with a national draw each serve different niches within the whole.

Two-year colleges and nonselective four-year schools can expect a path that follows population trends. Because these

schools serve a relatively representative subset of students, and because about 70% of graduates attend college the fall after completing high school, this result represents nearly inevitable population arithmetic.

In contrast, the projected demand for highly selective schools deviates from the general popula-

tion trend. Highly selective schools can expect an upward trend in demand — up about 10% between now and 2025. Even this upward trend, however, will be overcome by declining fertility such that the projected demand for highly selective schools in 2029 is little higher than today’s.

In response to the fall-

ing numbers of prospective students, we might expect recruitment efforts in search of new markets.

Still, even eliminating attendance gaps would not overcome declining fertility rates. As a result, intensified price competition also seems possible.

If changes to recruitment are insufficient, institutions will likely

look for adaptations outside the admissions office. For example, colleges can recruit fewer new students if they increase their retention rates. Perhaps most tantalizingly, some see the potential for online tools to reduce instructional costs — a desirable goal in an era of greater competition.

Particularly in the Northeast and Midwest, where declines are already well underway, we should anticipate ongoing disruption, innovation and price competition.

(Nathan Grawe is a professor of economics at Carleton College.)

Corporate action on climate change has to include lobbying ANDREW WINSTON

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he climate crisis is upon us, and there’s no time to wait for voluntary corporate action to tackle the challenge. We need the collective will that government provides.

Companies have long allowed a chasm to open up between their own statements and actions on climate and what their government relations and lobbying teams are doing in the halls of power. I want to offer some thoughts on context, and where the policy discussion could, or should, go.

First, climate change is real and affecting businesses today.

Second, with increasing transparency, it’s much harder to hide the disconnect between what companies are saying they’re doing and what they’re actually advocat-

ing for behind the scenes.

Third, stakeholders — customers, employees and communities — are demanding more action and are less tolerant of incon-

sistencies on this issue.

Here are some suggestions for what sciencebased climate policies could look like: — A price on carbon,

rising aggressively over time.

— Phase-outs of internal combustion engines in the next 10 to 20 years.

— Aggressive stan-

dards for building energy efficiency to mandate net-zero buildings and/or renewable energy use on rooftops.

— Investments in

smarter design and development of cities.

— Significant investments in clean infrastructure such as a high-capacity electric grid.

— Incentives for “circular economy” processes and innovation.

— Tariffs on goods from countries with lower carbon standards. Adaptation plans and investments for those being physically displaced by sea level rise.

— Retraining and relocation money for workers in key sectors who will be displaced by the transition to the clean economy.

As important as policy is, it’s not everything. I’d love to see companies also think about their communication and efforts with other key stakeholders beyond government.

(Andrew Winston advises companies on how they can navigate and profit from environmental and social challenges.)

Monday 28 October 2019

Harvard Business Review

BUSINESS DAY

MONDAYMORNING

37

In association with

How virtual reality can help train surgeons GIDEON BLUMSTEIN

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ur current system of training and assessing surgeons has lagged behind the pace of innovation, leaving some doctors unprepared to perform complex surgeries and putting some patients at risk. Using virtual reality technology in training may play an important role in addressing these deficiencies and improving skills.

How can we deliver the right kind of training in a standardized way? Furthermore, how can we objectively assess whether surgeons can perform proficiently before entering independent practice? Surgeons often lack adequate opportunities to consistently practice skills they’re learning — especially skills related to new medical technologies.

These shortfalls are creating increasing levels of risk, with serious consequences for patients and the surgeons that care for them. The situation may continue to worsen owing to the looming impact of the aging baby boomer population and the projected surgeon shortage, which will further exacerbate the issue of access to trained and qualified surgeons.

By definition, virtual real-

ity platforms directly address the skills gap by providing immersive, hands-on training that closely simulates an operating room environment. VR platforms offer por-

table, on-demand training that can be used anytime, anywhere.

Hospitals and universities around the world have successfully embraced VR-based train-

ing for years, but until now, we’ve had limited research on VR’s effectiveness. We set out to fill that gap through our recent clinical validation study at UCLA’s David

Geffen School of Medicine.

In the study, which was performed over two weeks, 20 participants were randomized between a traditionally trained group and a group that underwent VR training on the Osso VR platform to a specified level of proficiency. Then, each participant performed a procedure to repair a fractured tibia, one of the bones running between the knee and ankle.

As measured by the Global Assessment Five-Point Rating Scale, participants in the VR group received significantly higher ratings in all categories compared to the traditionally trained group, with an overall improvement of 230% in the total score. VR-trained participants completed the procedure an average of 20% faster than the traditionally trained group.

They also completed 38% more steps correctly in the procedurespecific checklist. Both findings were statistically significant.

With a strained surgical-education system, rapid medical innovation and a pending surgeon shortage, VR may offer an important educational tool to augment surgeon training and continue to offer patients the very best care.

Gideon Blumstein is an orthopedic surgery resident at UCLA’S David Geffen School of Medicine.

Facebook’s oversight board is not enough from taking down content to the more critical concerns at the heart of the company itself. We need oversight of the company’s data practices to promote consumer and citizen privacy; oversight of its strategic acquisitions and data governance to protect against anticompetitive practices; and oversight of its algorithmic decision-making to protect against bias. There are many ways that such oversight could be operationalized: through shareholder power, governmental oversight, third-party auditing, industrial regulation or, indeed, extensions of the board’s authority.

DIPAYAN GHOSH

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ollowing Mark Zuckerberg’s stated commitment to improving his company’s public accountability measures nearly a year ago, Facebook announced detailed plans last month for its new Oversight Board. The body, which the company says will comprise 40 independent experts who will serve in threeyear terms, has been described by many as Facebook’s own Supreme Court. The board is designed to have notable independence; in these judgments it can overrule Zuckerberg himself. But is it really set up to succeed?

I would contend not. It is not poor execution that is responsible for the company’s general troubles in content moderation; it is the business model behind the company’s platforms itself.

This same model lies at the center of the consumer internet as a whole and is based on maximizing consumer engagement and injecting ads throughout our digital experience. It relies on collecting personal data and on sophisticated algorithms that curate social feeds and target those ads. Because there is no earnest consideration of what consum-

(Dipayan Ghosh is a co-director of the Platform Accountability Project at the Harvard Kennedy School.) ers wish to or should see in this equation, they are subjected to whatever content the platform believes will maximize profits.

These practices in turn generate negative externalities of which disinformation is only one.

Take this example: When Russian political operatives sought to subvert our elections, they turned to the internet platforms. These efforts relied on the very same audience segmentation and targeting

techniques that allow the platform to increase traffic (and ad revenue).

For an oversight board to address these issues, it would need jurisdiction not only over personal posts but also political ads.

Beyond that, it would need to be able not only to take down specific pieces of content but also to halt the flow of American consumer data to Russian operatives and change the ways that algorithms privilege contentious content.

These steps are much more of a challenge to a company that relies on these mechanisms for its bread and butter. No matter where we set the boundaries, Facebook will always want to push them.

In reality, then, the Oversight Board in its current form cannot address the harms that are perpetrated and perpetuated over Facebook.

Perhaps the Oversight Board’s authority should be expanded

Brought to you courtesy of First Bank Nigeria

38

Monday 28 October 2019

BUSINESS DAY

INTERVIEW ‘Nigerian youths need skills, competencies to be relevant in today’s world’ The evolution of artificial intelligence, robotics, analytics and other areas of technology has led to a disruption of various sectors of the economy. Aware of this disruption, Junior Achievement Nigeria (JAN) seeks to equip young people with 21st century skills needed for success in a rapidly changing future. Niyi Yusuf, a JAN partner in development and managing partner, Verraki Partners, speaks to IFEOMA OKEKE on how policymakers can solve the problem of youth unemployment thereby scaling up the work of non-profit organisations like JAN. Excerpts: Could you explain what JAN is all about and what has been your experience since you joined JAN? t Junior Achievement Nigeria (JAN), we believe that building a stronger future for our country is a collective responsibility. We must make deliberate investments not only to upskill our youths and provide them access to technology but also in fostering an entrepreneurship, resilient and innovative mind-set in them. JAN embodies this commitment to upskilling our youths, hence the volunteers, sponsors and supporters they have garnered over the last 20 years.

JAN has come a long way in 20 years, from a period where companies pay lip service to CSR or have any volunteering culture to now, where JAN has pioneered impactful CSR and the volunteering culture in Nigeria. JAN is dedicated to teaching youth about entrepreneurship, financial literacy, the working of the modern economics, digital literacy and continues to run programmes that teaches young people how to impact the community in a sustainable manner by running businesses with a purpose, giving back to the community, driving real change and generally making the world a better place.

According to the Global Skills Index released by Coursera, about two-thirds of the world’s population is lagging in critical skills and about 90 percent of this group can be found in developing economies.

It is not surprising that in Nigeria we continue to lag in critical skills, given the low quality of pedagogy in our institutions, poor funding, inadequate resources and failing education infrastructure.

A

Automation has always been accompanied by a loss of jobs. Considering the unemployment rate in Nigeria (23.1 percent), why should companies embrace AI?

We do not have a choice than to embrace change because AI would come whether we deliberately embrace it or not, a smarter question we should ask is ‘how to prepare for it’. Out of about 7 billion people in the world, Nigerians are only about 200 million and if we refuse to evolve with the rest of the world, no one will wait for us. So, it would be in our interest to prepare for it.

And on job losses and automation, I would argue that automation has a net positive effect although it affects individuals in different ways. Some individuals may lose their jobs while some individuals may get better jobs but, on the aggregate, the world has always been better because of automation.

This is the fourth industrial revolution, we started off as farmers and them move to the industrial age and people lost jobs but, on the aggregate, the industrial age expanded territories, conquered new markets, created new products and also created new kind of jobs. In the United States of America, with a population of about 330 million, less than two percent of the population are in the agriculture sector, gradually declining as the years go by but interestingly, agricultural yield has increased tremendously because they now use advancements in technology to improve seeds varieties, soil testing, fertilizers and other innovations. If history is anything to go by, I say that with AI, we are more likely to create more jobs though there would certainly be job losses in certain sectors because the number of www.businessday.ng

routine repetitive tasks are likely to go and would be taken over by AI and robots. More jobs will be created around design; humancentered design. Now people talk about roles like data scientists, user experience designer or cyber security which clearly didn’t exist many years ago. Many jobs will disappear, but many new jobs will also be created. I think the challenge is how one develops skills and competencies to be relevant in the new world but I’m optimistic that in the end, we would create more jobs.

Sadly, of recent, most inventions start from the West, where they are likely to gain the benefits before we do and that keeps me up at night.

What will the effect of these new technologies be on Africa?

‘

Out of about 7 billion people in the world, Nigerians are only about 200 million and if we refuse to evolve with the rest of the world, no one will wait for us

‘

What is your relationship with JAN? I am one of 10 Board Members responsible for providing strategic guidance, direction setting, financial resources and volunteers to Junior Achievement’s operations in Nigeria and ensuring that JA complies with applicable regulatory standards and the high-quality standards associated with the JA brand worldwide. My engagement with JAN goes back eighteen years ago, from when I was a young consultant in Andersen Consulting. I became a Board Member during my previous role as country managing director, Accenture Nigeria.

Niyi Yusuf

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Speaking of technology, how would you explain artificial intelligence to the lay man?

Artificial Intelligence or AI is when human beings design machines (what some people would call computers) to have in-built intelligence and be able to perform tasks normally requiring human intelligence, which is underpinned by fast access to large storage of previous interactions, records, data and then connecting the dots which help to identify a trend and anticipate responses to varied situations. AI is what makes machines have enough intelligence to look at data, spot trends, connect various dots and be able to provide a response even to a previously unknown situation. While human beings have self-awareness, social, business and emotional intelligence aiding our ability to respond to various known and unknown situations, machines will only do what they have been programmed to do. Now we have taken machines a notch further to give them a sense of ability to respond to unknown situations using historical or similar occurrences and machines are now able to demonstrate visual perception, speech recognition, decision-making, translation between languages, predict traffic situations, suggest books to read or video to watch.

How can organisations like JAN prepare our youths in the age of AI? It is popularly said that knowledge is power. I think the first thing to consider is exposure; let youths know that there is a new phenomenon called AI and what it means and how it is used for good. Because again everything is a doubleedged sword; a knife could be used to spread butter or cut someone.

So, I recommend Junior Achievement Nigeria teaches AI. Sow the seed while our youths are in primary or secondary school, sow the seed in their minds, and create the awareness. The second is when we are running our JA Company Programs, we can develop projects or businesses around AI like what we are seeing now in Lagos where quite a few Fintechs and startups are creating interesting and amazing products using new technology concepts. There is nothing stopping us from having our company programme students embracing the use of AI in the development of their products. Verraki is ready to work with JA Nigeria to pilot the integration of basic AI principles into the company programme, to build an army of young Nigeria talents that can begin to leverage AI. @Businessdayng

What practical steps should policymakers take to smooth the transition to the age of AI? First thing is to understand what AI is, and the second thing is to understand the implications and then the third would be to know ‘thyself’.

Where are we as a nation in terms of AI? How mature are we in adopting AI? Then define how we can use AI. Once we know how close or how far we are, we can then define a strategy of how to bridge the gap.

Develop a strategy of how we want to embrace it, not how we want to hide from it. We also need to make sure that we are inclusive so that we do not create different classes; those who are AI aware and those that are AI blind. We wouldn’t want to create that inequality, so the thing is how do we make every Nigerian to be AI informed or AI aware at the basic level? I believe JA Nigeria can help because given the number of students that we reach, number of volunteers or partners that we have, our ecosystem; if we preach and spread the A.I gospel or technology gospel as it were, we could help people become more knowledgeable.

There has been an uptick in activity within the AI space in Nigeria.

How is your organisation using AI? We’ve been having conversations with clients and with ourselves in terms of where AI can be used. The first thing is to understand what AI is, so we have undertaken training programs to better understand topics like Design Thinking, Machine Learning, Artificial Learning, Robotics Process Automation (RPA).

That is the first step; to get everybody to understand the new way and to speak the lingua and then we can now have conversations with clients and ourselves, create internal projects to deploy the use of AI e.g. automate repetitive tasks like reconciliation, customer service, chat sessions; and also then deploy these solutions for clients.

Also, from a skills perspective, the fourth industrial revolution and digital economy we are experiencing will require an army of technologists; whether Artificial Intelligence, Augmented Reality or Robotics who will build and foster this new world. Nigeria can quickly take advantage of these and develop people that will play a major role in this new world, similar to what China has done.

JA Nigeria and other players can work together to skill our youth and position them to be active players and contributors to the emerging technology-driven world.

Monday 28 October 2019

BUSINESS DAY

MARKETS INTELLIGENCE

39

Supported by Asset Management Corporation of Nigeria (AMCON)

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These charts show Nigeria is Airtel Africa’s cash cow BALA AUGIE

Source: Company Financials; MI ($91 million).

Data revenue expanded by 75.70 percent in the period under review, this compares with East Africa, (13.90 percent) and rest of Africa negative (17.90 percent). Data revenue now accounts for 31 percent of Airtel Nigeria revenue, compared to 22 percent in the prior year.

Airtel Nigeria is efficient in the use of owners’ resources in generating operating cash than peers, while contemporaneously curtailing cost.

Its Earnings before Interest Tax Depreciation and Amortization (EBITDA) margins stood at 53.20 percent in the first six months to September 2019, this compares to East Africa, (40.30 percent), and Rest of Africa, (32.90 percent).

“Nigeria is our largest market and

Source: Company Financials; MI

Source: Company Financials; MI

SHORT TAKES N370 million Guinness Nigeria Plc, the country’s second-biggest brewer, has posted the first quarterly loss since 2016 after its sales faltered on intensified industry rivalry amid a slow economic recovery, and borrowing cost doubled.

The brewer posted a loss of N370 million, widely missing about N800 million profit mark made in the same period last year.

Shares of Guinness saw its biggest daily loss in almost two months and led the laggards Thursday in Lagos trading after it published the result.

The negative sentiment persisted in Friday’s trading as the stock shed 9.83 percent to close at N23.85 per share bringing year’s loss to about 67 percent.

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igeria remains the major driver of Airtel Africa Plc’s earnings, validating the proliferation of smartphones and favourable demographics that crave for consumption.

Analysts say Airtel Nigeria’s consistent revenue and profit growth shows there remain immense potentials in the local market, but they add that the harsh operating environment is a cause for concern.

Airtel Africa has just released its half-year ended September 30 results (HI-2020), which showed the Nigeria segment outperforming the rest of Africa iN all financial metrics, but there are immense potentials on the continent.

Airtel Nigeria Limited makes up 39 percent ($641 million) of Group revenue of $1.65 billion for the first six months to September 2019, thanks to increasing in subscriber base and stable foreign currency environment.

That compares with East Africa’s contribution of 35 percent ($578 million), and rest of Africa, 26 percent ($426 million).

The accelerated roll out of 4G network by Group (Airtel Africa) in the country has paid off as Data revenue magnified, while customer base continues to growth. During the period, 4G data usage increased by almost 20 times in Nigeria.

Of the $342 million generated in Data revenue by the Group, Airtel Nigeria contributed 58.42 percent ($199 million), which compares with East Africa 28.94 percent or ($144 million) and rest of Africa 12.86 percent

P.E

we have in recent past invested in 4G, which makes us well ahead of the industry,” said Raghunath Mandava Chief Executive Officer of Airtel Africa, during a conference call.

“This has helped our revenue growth. We see a further uptick in the country. There are immense opportunities in Africa, and we plan to invest in broadband,” said Mandava.

There are enormous opportunities in the Nigerian telecommunication industry as a technology-savvy generation that crave for the social media and the proliferation of smartphones are expected to add impetus to the number of subscribers.

As at August 2019, there were 176.89 million telephone subscribers, though slightly lower than the 174.01 million recorded in March. Telephone density stood at 92.67 percent in August 2019 from 124.05 percent in March 2019, according to data from the Nigerian Telecommunication Commission (NCC).

Teledensity is defined as the number of active telephone connections per one hundred (100) inhabitants living within an area and is expressed as a percentage.

Mobile perk period (voice tariff) for on net transaction and off-net transaction was N12.021 and N12.64 respectively, according to NCC data.

The above voice tariff shows the annualized average cost per minute of a voice call during call traffic peak periods, across all the major telephony operators in the country. It also shows the cost for calls made to a number within the same network (On-Net) and a number on another network (Off-Net).

Information and Communication accounted for 63 percent to the country’s total GDP in the second quarter GDP (Q2-2019), the largest among sectors in the country, but its growth was weak.

Some 700 million new mobile subscribers from various countries

across the world will push the total number of global mobile subscribers to 6 billion between now and 2025.

Nigeria has been identified among these countries, with others being India, China, Pakistan, Indonesia, according to a recent report by online platform giant, Jumia.

It is predicted that Nigeria will contribute 4% of the estimated 700 million new global mobile subscribers, making it the only country in Africa marked with a significant contribution to increasing mobile penetration in the world.

With a population of 200 million that is expected to reach 400 million by 2050, Nigeria, there are ample opportunities for Airtel Africa to increase its share of the market and deliver higher returns to shareholders in form of share appreciation and dividend payment.

Further analysis of the Group (Airtel Africa)’s financial statement shows the Nigeria segment or business recorded largest margin expansion among peers (fellow subsidiaries), making it a cash cow.

Airtel Nigeria’s recorded operating profit growth of 49.50 percent in the first six months through September 2019, this compares to East Africa’s margin expansion of (22.10 percent), and rest of Africa, (40.10).

Airtal Nigeria has transformed its revenue into cash than its peers, as free cashflow to sales ratio was 38.81 percent, this compares to East Africa, 30.93 percent, and rest of Africa, 16.61 percernt.

Free cash flow to sales is a valuation ratio that measures a company’s surplus cash flow against sales revenues. The ratio indicates how much of a company’s revenue is transformed into cash.FCF/Sales expressed as a percentage is often used to find ‘cash cow’ stocks. When screening the market it’s good to look for FCF/Sales > 5% - that’s often a sign of a high quality company.

44.2% Access Bank, Nigeria’s biggest lender by asset and customer base, has grown its profit in the nine months to September 30, 2019, by 44.2 percent.

The big bank posted a profit after tax of N90.74 billion compared to N62.91 billion last year after its gross earnings surged 37 percent to hit half a trillion naira.

The growth was driven by a 77 percent rise in net interest income which hit N210 billion year-on-year in the nine month period.

Non-interest income grew 3.3 percent.

131 Nigeria moved up 15 places to rank 131 out of 190 nations in the latest World Bank’s ease of doing business ranking released Thursday.

Africa’s most populous country was ranked 146th position in the 2018 ease of doing business report.

Doing business ranking is based on quantitative indicators on regulation for starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency.

BusinessDay MARKETS INTELLIGENCE (Team lead: BALA AUGIE - Analyst: Dipo Oladehinde, ENDURANCE OKAFOR, BUNMI BAILEY Graphics: FIFEN FAMOUS)

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 Continues on page 37 Email the BMI team patrick.atuanya@businessdayonline.com www.businessday.ng

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40

Monday 28 October 2019

BUSINESS DAY

MARKETS INTELLIGENCE

Big Banks realised N614.95 billion from T-bills, bonds interest BALA AUGIE

B

ig banks may not have started feeling the pinch of stringent regulations by the Central Bank of Nigeria (CBN) as they continue to make money from short term government securities.FirstBank Holdings Nigeria (FBHN) Plc, United Bank for Africa (UBA), Zenith Bank Plc, Access Bank and Guaranty Trust Bank (GTBank) realized a combined N614.95 billion from income from in investment bonds and Treasury bills, this represents a 27.98 percent increase from the N480.52 billion they made the previous year.

Between 2017/18, banks took advantage of high yields on government securities to underpin earnings. However, starting from 2018, yields began to drop thereby resulting in weak revenue.

Experts are of the view that lenders are ingenious and will always take advantage of monetary policies, but at times these policies do

not favour them.

A breakdown of the figures shows Access Bank‘s interest income from investment securities surged by 113.90 percent to N149.98 billion in the period under review from N70.11 billion the previous year.

FBHN’s interest income from short term government securities was up 20.80 percent to N142.78 billion in the period under previous from N118.23 billion the previous year.

Zenith Bank’s interest income on investment securities increased by 6.40 percent to N123.56 billion in the period under review from N116.08 billion as at September 2018.

UBA’s interest income from short term securities was up 15.71 percent to N124.04 billion in the period under review from N107.17 billion as at September 2018.

However, the lender could see future profit shrink as the CBN has implemented policies that will force

them to lend to the real sector of the economy.

First, the regulator has directed that banks Some of the CBN’s recent are to maintain a minimum loan-to-deposit ratio of 65 percent by 31 December 2019 and 150% weighting to be applied to loans to SME, retail, consumer and mortgage sectors for the purpose of LDR computation.

Second, a reduction in banks’ daily limit at the standing lending facility to N2.5 billion from N7.5

billion.

Last week, the Federal Government barred individuals and local non-banking firms from buyingyielding central bank bonds, a move designed to curb speculative activities and encourage more lending to the economy.

According to the Apex bank, the measures are in line with a wider policy to penalise banks that don’t boost lending.

Analysts say the new rules could expose operators in the industry to deteriorating asset quality since they are forced to extend credit to high-risk asset amid a tough macroeconomic environment.

If they lend to the sector that is strong they will make money but there will be a problem if they give money to high-risk sectors then there could be trouble,” said Ayodele Akinwunmi, equity research analyst at FSDH Merchant Bank Ltd. “They will have to look at the economy to know the sector to lend to,” said Akinwumi,”

Access Bank on track to double its profit in 2 years IFEANYI JOHN

I

t appears the synergy promised to investors from the Diamond bank acquisition appears to be coming through for Access Bank. Access bank had promised investors cost synergy of around N30 billion pre-tax profit per annum over 3 years post meger with Diamond. However, barely 6 months after completing the merger, the bank has grown its pretax income from N70.2 billion in Q3 2018 to N103.1 billion in Q3, representing a growth of more than N30 billion in the last 12 months.

Further research by BusinessDay revealed that Access is on track to double its profit after tax this year from N60 billion in 2017 to N120 billion by year end

based on annualized PAT performance, capping a period of a remarkable growth spurt for Nigeria’s largest bank. Access bank who became the largest bank in the country after the acquisition of Diamond bank in Q1 2019 remain the third most profitable bank behind Zenith bank and GTBank who are the two most profitable banks in the country.

It may not be too long before Access begins to rival the other two lenders for the most profitable bank in the country as analysts expect more cost synergies to occur as Access bank continues its cost efficiency strategy.

“Access bank inherited a lot of branch networks through its acquisition of Diamond bank.

Right now, their branch networks are over 600 locations within and outside the country.

www.businessday.ng

I think they may be looking to close a lot of branches and layoff some of those staffs in thos e lo cations in orde r to drive efficiency within the system. I think we will likely see a continued declined in the bank’s spending as efficiency becomes the main driver for profit growth within the bank, said Tochukwu Okafor, lecturer in banking and finance at covenant university” Despite the strong profit growth performance in recent years, investors seem to be unconvinced by the company’s financial performance as the stock price performance continues to drag. Access bank stock is down more than 40% since January 2019, although its has risen by more than 20% in the last 2 months.

“I think Access bank is about the cheapest stock in the market today. The company is on track to generate up to N120 billion in net profit this year and the entire market capitalization of the bank is N259 billion as at market close on Friday. I think that must be about the lowest price to earnings ratio you will find in the market. Its PE is hovering just over 2 with the bank still showing strong grow th potential, it may likely be the most undervalued stock in the market currently,” said Obinna Uzoma, chief economist at EUA Intelligence.

Access bank closed on Friday at N7.30, up 2.82% as the market cheered a decent financial performance so far this year.

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Nigeria Breweries sheds over N1.1tr in market cap as selloffs deepen

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igeria’s largest beer maker has spent the past year losing all the weight that makes it one of the largest companies on the Nigerian Stock Exchange. In the last 26 months, Nigerian Breweries has seen it’s stock market capitalisation declined from as high as N1.5 trillion in August 2017 to as low as N368 billion as at market close on Friday. The company has lost an average of monthly market cap loss of around N82 billion.

The market rout which begun a little more than a year ago was triggered by a significant decline in the brewer’s profitability. NB profit after tax in 2018 dipped from N33b to about N19b sparking the first round of selloffs as investors anticipated the poor performance much earlier. The stock fell from around N191 per share in August 2017 to N103 per share one year later as investors sold off the stocks after the company reported a decline in profit of around 41 percent in 2018.

The trend is yet to improve as the company’s unaudited 9 months 2019 performance shows that the brewer earned only N12.2 billion in 9 months as profit after tax which is about 17 percent less than they achieved last year.

In the last year, the brewer has lost almost half of its market capitalization, declining about 48 @Businessdayng

percent since last October as investors do not foresee any positive outlook in the near term.

“I think the challenge with Nigeria Breweries is that their operating expenses are rising at a time that revenue is flattening for the company. Within increased competition within the brewery industry, NB has found it very difficult to grow their topline while their cost has continued to rise along with inflation. Between 2017 and 2018 alone, the cost to income ratio jumped from around 61% to 71%.

Even though the company is on track to grow its revenue to N346 billion this year, we still expect the company’s profit to be around N16 billion by year-end which is about N3 billion less than they earned in 2018 despite generating higher revenue this year,” said Obinna Uzoma, chief economist at EUA Intelligence.

In the 9 months financial performance, NB generated almost N260 billion in sales, compared to a year earlier when the achieved about N256 billion in sales during the same time period. A slow down in revenue growth and rising cost appeared to have weakened the attractiveness of the stocks to investors who seem bluntly uninterested in holding onto the brewers’ stocks. The stock traded at N46 at market close on Friday its lowest point in over 5 years.

Monday 28 October 2019

BUSINESS DAY

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BUSINESS DAY

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Monday 28 October 2019

BUSINESS DAY

43

Live @ The STOCK Exchanges Prices for Securities Traded as of Friday 25 October 2019 Company

Market cap(nm)

Price (N)

Change

Trades

Volume

Company

Market cap(nm)

Price (N)

Change

Trades

Volume

PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 259,480.15 7.30 2.82 166 22,396,767 UNITED BANK FOR AFRICA PLC 200,066.62 5.85 1.74 234 28,473,013 ZENITH BANK PLC 533,740.39 17.00 0.29 449 74,490,714 849 125,360,494 OTHER FINANCIAL INSTITUTIONS MARKET CAP(Nm) PRICE %CHANGE TRADES VOLUME 190,245.05 5.30 -0.94 129 21,877,734 FBN HOLDINGS PLC 129 21,877,734 978 147,238,228 TELECOMMUNICATIONS SERVICES MTN NIGERIA COMMUNICATIONS PLC 2,625,732.18 129.00 - 21 24,429 21 24,429 21 24,429 BUILDING MATERIALS DANGOTE CEMENT PLC 2,487,914.08 146.00 -0.14 71 1,654,443 LAFARGE AFRICA PLC. 236,784.59 14.70 1.73 59 807,460 130 2,461,903 130 2,461,903 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 304,225.84 517.00 - 8 3,544 8 3,544 8 3,544 1,137 149,728,104 REAL ESTATE INVESTMENT TRUSTS (REITS) SKYE SHELTER FUND PLC 1,710.00 85.50 - 0 0 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 10,175.81 40.70 - 0 0 UPDC REAL ESTATE INVESTMENT TRUST 13,074.52 4.90 - 8 28,015 8 28,015 8 28,015 OTHER FINANCIAL INSTITUTIONS NIGERIA ENERYGY SECTOR FUND 411.91 552.20 - 0 0 VALUEALLIANCE VALUE FUND 3,312.39 103.20 - 0 0 0 0 0 0 8 28,015 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 0 0 OKOMU OIL PALM PLC. 52,417.35 54.95 - 16 18,728 PRESCO PLC 38,400.00 38.40 - 10 29,175 26 47,903 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 8,520.00 4.26 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,500.00 0.50 - 13 290,236 13 290,236 39 338,139 DIVERSIFIED INDUSTRIES A.G. LEVENTIS NIGERIA PLC. 741.24 0.28 - 0 0 214.03 0.55 - 3 4,090 JOHN HOLT PLC. S C O A NIG. PLC. 1,903.99 2.93 - 2 300 TRANSNATIONAL CORPORATION OF NIGERIA PLC 40,241.51 0.99 - 47 24,116,694 18,728.43 6.50 - 35 774,529 U A C N PLC. 87 24,895,613 87 24,895,613 BUILDING CONSTRUCTION ARBICO PLC. 711.32 4.79 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 24,486.00 18.55 - 6 11,152 ROADS NIG PLC. 165.00 6.60 - 0 0 6 11,152 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 2,780.28 1.07 8.08 12 26,990,940 12 26,990,940 18 27,002,092 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 7,986.09 1.02 - 2 13,503 GOLDEN GUINEA BREW. PLC. 242.22 0.89 - 0 0 GUINNESS NIG PLC 52,240.63 23.85 -9.83 44 543,713 INTERNATIONAL BREWERIES PLC. 108,307.86 12.60 - 1 50 NIGERIAN BREW. PLC. 368,257.34 46.05 - 39 395,650 86 952,916 FOOD PRODUCTS DANGOTE FLOUR MILLS PLC 111,250.00 22.25 -3.26 30 446,870 DANGOTE SUGAR REFINERY PLC 124,200.00 10.35 - 43 373,895 FLOUR MILLS NIG. PLC. 61,710.71 15.05 0.33 37 1,461,371 HONEYWELL FLOUR MILL PLC 7,533.69 0.95 - 15 628,450 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 766.26 4.30 - 0 0 NASCON ALLIED INDUSTRIES PLC 39,344.16 14.85 - 6 3,657 UNION DICON SALT PLC. 3,321.07 12.15 - 0 0 131 2,914,243 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 18,030.74 9.60 - 21 168,673 NESTLE NIGERIA PLC. 967,040.63 1,220.00 - 39 61,150 60 229,823 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 4,377.95 3.50 -0.28 17 547,392 17 547,392 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 21,837.62 5.50 - 16 61,982 UNILEVER NIGERIA PLC. 153,391.64 26.70 - 17 55,988 33 117,970 327 4,762,344 BANKING ECOBANK TRANSNATIONAL INCORPORATED 130,281.81 7.10 - 25 99,348 FIDELITY BANK PLC 49,257.15 1.70 0.59 55 2,783,816 GUARANTY TRUST BANK PLC. 774,040.01 26.30 1.15 125 6,230,634 JAIZ BANK PLC 13,258.91 0.45 - 2 68,150 STERLING BANK PLC. 55,853.41 1.94 4.86 317 3,346,121 UNION BANK NIG.PLC. 203,845.27 7.00 - 13 95,136 UNITY BANK PLC 7,364.28 0.63 - 5 25,600 WEMA BANK PLC. 21,987.45 0.57 3.64 55 5,261,813 597 17,910,618 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 0 0 AIICO INSURANCE PLC. 4,366.03 0.63 - 5 28,500 AXAMANSARD INSURANCE PLC 17,850.00 1.70 - 0 0 CONSOLIDATED HALLMARK INSURANCE PLC 3,008.10 0.37 - 0 0 CONTINENTAL REINSURANCE PLC 24,790.86 2.39 1.70 13 873,200 CORNERSTONE INSURANCE PLC 5,597.21 0.38 - 5 45,500 GOLDLINK INSURANCE PLC 909.99 0.20 - 0 0 GUINEA INSURANCE PLC. 1,228.00 0.20 - 0 0 INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 0 0 LASACO ASSURANCE PLC. 1,904.09 0.26 - 10 813,000 LAW UNION AND ROCK INS. PLC. 1,933.35 0.45 -4.26 4 202,158 LINKAGE ASSURANCE PLC 4,080.00 0.51 - 7 258,000 MUTUAL BENEFITS ASSURANCE PLC. 2,234.55 0.20 - 2 40,000 NEM INSURANCE PLC 10,561.01 2.00 - 8 208,800 NIGER INSURANCE PLC 1,547.90 0.20 - 0 0 PRESTIGE ASSURANCE PLC 2,745.10 0.51 - 2 59,000 REGENCY ASSURANCE PLC 1,333.75 0.20 - 0 0 SOVEREIGN TRUST INSURANCE PLC 1,668.16 0.20 - 4 500 STACO INSURANCE PLC 4,483.72 0.48 - 0 0 STANDARD ALLIANCE INSURANCE PLC. 2,582.21 0.20 - 0 0 SUNU ASSURANCES NIGERIA PLC. 2,800.00 0.20 - 3 11,500 UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 0 0 3,200.00 0.20 - 1 24,000 UNIVERSAL INSURANCE PLC VERITAS KAPITAL ASSURANCE PLC 2,773.33 0.20 - 0 0 WAPIC INSURANCE PLC 4,282.48 0.32 3.13 19 625,777 83 3,189,935 MICRO-FINANCE BANKS NPF MICROFINANCE BANK PLC 2,721.10 1.19 - 6 345,224 6 345,224

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MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 4,200.00 1.00 - 4 59,954 7,370.87 0.50 - 0 0 ASO SAVINGS AND LOANS PLC INFINITY TRUST MORTGAGE BANK PLC 5,796.93 1.39 - 0 0 2,265.95 0.20 - 0 0 RESORT SAVINGS & LOANS PLC UNION HOMES SAVINGS AND LOANS PLC. 2,949.22 3.02 - 0 0 4 59,954 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 7,640.00 3.82 -2.05 25 528,917 32,056.16 5.45 -9.17 24 768,500 CUSTODIAN INVESTMENT PLC DEAP CAPITAL MANAGEMENT & TRUST PLC 660.00 0.44 - 0 0 FCMB GROUP PLC. 31,288.28 1.58 -1.25 31 760,941 1,029.07 0.20 - 1 523 ROYAL EXCHANGE PLC. STANBIC IBTC HOLDINGS PLC 387,517.72 37.00 - 8 72,454 12,300.00 2.05 2.50 34 1,108,417 UNITED CAPITAL PLC 123 3,239,752 813 24,745,483 HEALTHCARE PROVIDERS EKOCORP PLC. 1,680.29 3.37 - 0 0 817.22 0.23 4.55 4 236,620 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 4 236,620 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 494.58 0.50 - 1 312 1 312 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 FIDSON HEALTHCARE PLC 8,345.44 4.00 - 5 815 6,936.08 5.80 - 7 61,159 GLAXO SMITHKLINE CONSUMER NIG. PLC. MAY & BAKER NIGERIA PLC. 3,450.47 2.00 - 2 5,850 759.66 0.40 - 4 100,000 NEIMETH INTERNATIONAL PHARMACEUTICALS PLC NIGERIA-GERMAN CHEMICALS PLC. 556.71 3.62 - 0 0 PHARMA-DEKO PLC. 325.23 1.50 - 0 0 18 167,824 23 404,756 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 745.92 0.21 -4.55 11 1,660,833 11 1,660,833 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 1,470.89 0.50 - 0 0 0 0 IT SERVICES CWG PLC 6,413.06 2.54 - 0 0 486.00 4.50 - 0 0 NCR (NIGERIA) PLC. TRIPPLE GEE AND COMPANY PLC. 292.02 0.59 - 2 1,700 2 1,700 PROCESSING SYSTEMS CHAMS PLC 1,080.09 0.23 -4.17 13 11,750,000 E-TRANZACT INTERNATIONAL PLC 9,996.00 2.38 - 0 0 13 11,750,000 TELECOMMUNICATIONS SERVICES AIRTEL AFRICA PLC 1,157,510.66 308.00 - 25 188,520 25 188,520 51 13,601,053 BUILDING MATERIALS BERGER PAINTS PLC 2,173.68 7.50 - 2 1,642 CAP PLC 17,885.00 25.55 - 8 20,100 CEMENT CO. OF NORTH.NIG. PLC 197,152.51 15.00 -6.25 19 472,860 313.43 0.59 - 0 0 MEYER PLC. PORTLAND PAINTS & PRODUCTS NIGERIA PLC 1,769.32 2.23 - 0 0 PREMIER PAINTS PLC. 1,156.20 9.40 - 0 0 29 494,602 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,256.91 2.09 - 0 0 CUTIX PLC. 2,465.85 1.40 -2.78 11 300,408 11 300,408 PACKAGING/CONTAINERS BETA GLASS PLC. 26,898.49 53.80 - 2 1,200 GREIF NIGERIA PLC 388.02 9.10 - 1 1,250 3 2,450 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 0 0 0 0 43 797,460 CHEMICALS B.O.C. GASES PLC. 2,547.42 6.12 - 0 0 0 0 METALS ALUMINIUM EXTRUSION IND. PLC. 1,781.64 8.10 - 0 0 0 0 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 0 0 0 0 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 83.60 0.38 - 1 4,000 1 4,000 1 4,000 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,252.54 0.20 - 15 2,291,849 15 2,291,849 INTEGRATED OIL AND GAS SERVICES OANDO PLC 42,266.80 3.40 - 29 296,071 29 296,071 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 53,332.04 147.90 - 6 1,412 CONOIL PLC 10,686.86 15.40 - 17 30,719 ETERNA PLC. 3,716.81 2.85 - 1 1,100 FORTE OIL PLC. 20,904.82 16.05 -8.81 71 631,499 MRS OIL NIGERIA PLC. 5,166.13 16.95 - 1 420 TOTAL NIGERIA PLC. 41,829.09 123.20 - 7 11,321 103 676,471 147 3,264,391 ADVERTISING AFROMEDIA PLC 1,820.01 0.41 - 0 0 0 0 AIRLINES MEDVIEW AIRLINE PLC 17,551.17 1.80 - 0 0 0 0 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 294.09 0.25 - 0 0 0 0 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 2,387.46 4.05 - 3 5,600 TRANS-NATIONWIDE EXPRESS PLC. 393.83 0.84 - 0 0 3 5,600 HOSPITALITY TANTALIZERS PLC 642.33 0.20 - 0 0 0 0 HOTELS/LODGING CAPITAL HOTEL PLC 4,723.78 3.05 - 0 0 IKEJA HOTEL PLC 2,224.31 1.07 - 1 13,000 TOURIST COMPANY OF NIGERIA PLC. 7,862.53 3.50 - 0 0 TRANSCORP HOTELS PLC 41,042.18 5.40 - 0 0 1 13,000 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 4,800.00 0.40 - 0 0 0 0 PRINTING/PUBLISHING ACADEMY PRESS PLC. 205.63 0.34 - 4 13,300 LEARN AFRICA PLC 856.31 1.11 - 3 18,630 STUDIO PRESS (NIG) PLC. 1,183.82 1.99 - 1 1,000 UNIVERSITY PRESS PLC. 496.12 1.15 - 7 43,599 15 76,529 ROAD TRANSPORTATION ASSOCIATED BUS COMPANY PLC 729.39 0.44 - 3 120,850 3 120,850 SPECIALTY INTERLINKED TECHNOLOGIES PLC 757.44 3.20 - 0 0 SECURE ELECTRONIC TECHNOLOGY PLC 1,126.31 0.20 - 0 0 0 0

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44 BUSINESS DAY

Monday 28 October 2019

news Cadivus Hunters announces N120m house lottery BUNMI BAILEY

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Klandlord.com, a prime property lottery platform, unveiled the ‘2K Landlord’ raffle with a grand prize of a fully furnished luxury home in Lekki Phase One, Lagos, valued at N120 million.

The platform, owned by Cadivus Hunters, aims to drive interest in property ownership among Nigerians, while creating multi-millionaires on a scale that empowers beneficiaries and impacts many more lives.

Speaking during a press conference, Opeyemi Odeyale, president of CadivusHunters,saysthe2KLandlord platform mirrors the principles of crowdfundingtocreatemulti-millionaires one at a time and to provide Nigerians with dream homes through a sustainable and credible raffle system.

“Most Nigerians, even those that are fully employed, understand the difficulty of owning a home, especially in a moribund mortgage market as Nigeria’s,” Odeyale says.

Fortheinitiallaunch,CadivusHunt-

ers is offering a fully furnished 5-bedroom semi-detached house located in LekkiPhaseOne,valuedatN120million.

A participant can enter the draw by purchasing a ticket worth N2,000 via the website www.2klandlord.com or partner platforms.

At the end of 90 days, a final draw will be carried out to select a winning ticket that will claim the N120 million luxury homes. Also, cash awards of N100,000 weekly and N500,000 monthly will be given throughout the duration of the lottery.

Multiple entries are permitted for thosewhowanttoincreasetheirchances of winning the grand prize of a N120 million fully furnished luxury home.

The property has proven popular with producers in the entertainment industry having featured in awardwinning videos such as King of Boys, Rumour Has It and Tender by Slkay.

The winner can choose to live in the house,rentitoutorsellit.Whateverthe choice, a multi-millionaire emerges.

The promotion is endorsed by the Lagos State Lotteries Board.

Colgate dental screening exercise holds in Ibadan

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ollowing the official establishment of Tolaram Colgate Limited and its promises to bring innovative oral, personal and home care products to consumers across Nigeria, the Colgate brand has since begun implementing various life impacting exercise such as dental health community outreach programme in rural communities, most recent of which was carried out in Ojoo Market in Ibadan, the Oyo State capital.

This activity was carried out in conjunction with University of IbadanAssociationofDentalStudents (UDAS), lending support to the dental carespecialistsfromColgatetoprovide dentalscreeningexercisesuchastooth scaling, polishing and general treatment for oral hygiene.

The exercise was declared open to the public from the early hours of the morning inside the heart of Ojoo Market, and lasted till late afternoon.

This saw lots of people stopping by, especially the elderly, to enjoy the opportunityofhavingtheiroralcondition examined and treated.

According to the World Dental Federation Oral health observatory, “Oral diseases affect half of the world’s population (3.58bn people), making them the most common non-communicable diseases (NCDs) globally.

Dental caries (tooth decay) in the permanentteethisthemostprevalentoral

disease, with an estimated 2.4 billion people affected.”

Most of the complaint during the exercise was predominantly from severe pains and tooth sensitivity and decay, most especially from the elderly. However, extreme conditions other than dental and jaw problems were recommended and referred for further medical treatments.

Speaking on the project, Girish Sharma, CEO, Colgate explained that thedrivebehindtheprojectemanated from the vision to create adequate awareness about dental health issues which a lot of Nigerians are suffering from and to deliver preventive and curative Oral health care solutions across the country. And it is in our aim to ensure that people not only live longer lives but healthier ones too, free of oral diseases.

“Oral health and hygiene play an important role in general health and well-being,even thoughthey are often overlooked as essential part of our daily regimen. Tooth decay and gum diseases can cause serious pain and limitaperson’sabilitytoeat,drink,and speak” he said. Colgatetoothpaste is a globally regarded brand leader in providingqualityoralhygiene/dentalcare solutions through its products offeringssuchasvarioustypesoftoothpaste to meet different needs, toothbrushes, dental floss, mouthwash, etc.

Temitayo Ayetoto

He said residents need to support the government’s efforts in tackling the problem of flooding and other environmental hazards within the metropolis, by ensuring that they do not dispose of refuse in a manner likely to cause environmental pollution or harm human health. They are also enjoined to bag their wastes appropriately and patronize assigned Private Support Partnership (PSP) operators.

Under its Blue Box Initiative, LAWMA has intensified the distribution of waste disposal bags for residents to sort their waste and dispose appropriately, through PSPs operating in their areas, Gbadegesin said further.

“Under no circumstances should anyone dump refuse in drainage channels, medians, lagoons or any other unauthorised outlets,” he warned. He also advised residents to promptly reach the authority using the toll-free line 07080601020, for complaints and relevant information.

Waste control: Lagos seeks residents’ compliance as defaulters nabbed

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agos State government has asked residents to support its waste control effort by complying with regulations on proper disposal, warning it will go tough on reckless disposal disposals in unauthorised places.

The cautioning follows the arrest and preliminary prosecution of some residents of Aboru, Alimosho, whose wards were recently caught emptying bags of trash in a drainage channel by their homes, during a recent rainfall downpour, according to the Lagos Waste Management Authority (LAWMA) in a statement provided to BusinessDay. Muyiwa Gbadegesin, who reiterated Governor Sanwo-Olu’s executive order on zero tolerance to environmental infractions stressed that violators would be appropriately sanctioned under set environmental laws of the State, which forbids indiscriminate refuse dumping by residents.

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L-R: Deji Adegoke, senior associate, White and Case; Mukund Dhar, head of Africa, White and Case; Melissa Butler, partner, White and Case; Allan Tayor, partner, White and Case, and Robert Wheal, partner, White and Case, at the White and Case oil and gas workshop in collaboration with Standard Chartered Bank in Lagos. Pic by Olawale Amoo

Nigerian government moves to deepen digital, online presence …plans to enhance operations in public service with the implementation of ICT Jumoke Akiyode-Lawanson

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igerian government has started making moves to seriously imbibe the use of Information and Communication Technologies (ICT) into its operations at all levels, saying that it has realised that one of the ways to reverse cases of huge unemployment, corruption, crime, low internally-generated revenue (IGR) and leakages in government revenue, among other issues, is to use ICT to drive government’s internal processes and service delivery to its citizens and other stakeholders.

Electronic government or “e-Government” constitutes the use of ICT in governance to provide public services, improve managerial effectiveness and promote democratic values, as well as provide a regulatory framework that facilitates information dissemination.

Governments around the world use ICT for the exchange of information with citizens

and businesses on topics such as tax compliance, public utility services, as well as vehicle and voting registration. Often, the introduction of e-government services creates a more customer-friendly culture.

At the Nigeria e-government conference organised

by Digiserve Network Services in Lagos on Thursday, October 24, 2019, Umar Garba Danbatta, executive vice chairman, Nigeria Communications Commission (NCC) said that government had realised that ICT has the capacity to enhance efficiency and convenience in the delivery of government services.

Danbatta, who was represented by Henry Nkemadu, director, public affairs, NCC, in his speech, said the theme of the conference, “e-Government: Powering Governance with Information and Communications Technologies (ICT)”, is apt, as it presents another unique opportunity for government agencies and parastatals to look inwards and re-examine Nigeria’s e-

government initiatives within the broad context of the global trend where ICT had become a driving force for all sectors across economies around the world.

A United Nations’ report titled: Gearing E-Government to Support Transformation towards Sustainable and Resilient Societies, noted that since 2014, all 193 UN Member States, including Nigeria, had been delivering some form of online presence. Not only this, the report particularly draws a positive correlation between the level of e-government status achieved by a country and the successes being recorded in the area of advancing each of the 17 targets in the Sustainable Development Goals (SDGs) 2030.

Also, in a February 2019 report titled: Digital Government and Open Data Readiness Assessment, the World Bank noted that governments around the world are continually facing the challenges of improving the access to and the quality of public services that they deliver to

citizens and businesses. The report further stated that governments do these more efficiently and with lower costs and that for many years “e-Government” has been expected to be a major contributor to meeting these challenges.

The World Bank report, however, pointed out that, while some countries are grappling with implementing their egovernment strategies, others that had been seen as some of the leaders in e-Government have now embarked on the next stage of their service transformation journey - often referred to as “Digital Government”.

According to Danbatta, “In Nigeria, the deliberate decision to deploy ICT for public service delivery is, in part, traceable to the formulation of the Nigerian National Telecommunications Policy in 2000. The policy seeks to make Nigeria an ICT-driven country in Africa and a key player in the information society and also use IT for education; creation of wealth; poverty eradication; job creation; governance; health; and agriculture.”

CBN working with agencies on credit data collection HOPE MOSES-ASHIKE

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entral Bank of Nigeria (CBN) is collaborating with some agencies such as the Nigeria Communication commission (NCC) on getting addition data of customers who are taking credit from the financial institutions.

Aishah Ahmad, CBN’s deputy governor, financial system stability, disclosed this in Lagos at the Union Bank’s maiden Edu 360 Conference in Lagos.

Ahmad, who chairs the national inclusion technical committee of which National Identity Management Commission (NIMC) is one of the representatives, said the commission was trying to improve the level of registration of Nigerians.

“Every Nigerian having a national identity remains the national

objective. They are going t be using other stakeholders like BVN. BVN has had a huge capacity. We have signed on about 40 billion and what NIMC has done is to define standard for all these,” Ahmad said.

She acknowledged that statistics say about 63.2 percent of Nigerians were financially included, and “if you break that down to number of people that are taking credit, it is very low. Part of the challenge is data on credit. We are also trying to do some work with other agencies including the NCC on how we can get additional data for those that are taking credit.

“For us at financial regulators, we are trying to promote financial stability, economic development.

At the core financial stability is inclusion. There is a nexus between inclusion, financial education, economic development so that we understand a bigger picture of

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financial inclusion/literacy.”

She said the CBN had come up with the consumer protection framework and was coming out with more three guidelines around transparency.

There is a dispute framework and complaints framework that save the right of bank customer, she said, saying, “Underpinning all of these is that education is why this digital matters. We can put all the guidelines/framework we want; if people do not know their right it is not going to be fair. We are open to feedback, collaboration. We work with a lot of different interest groups.”

Speaking at the ceremony to mark the kick-off of the three-day event, Emeka Emuwa, managing director/CEO, Union Bank plc, reiterated the bank’s focus on education as a key driver of national development. He said, “Our goal @Businessdayng

over the next three days here at Edu360 is to drive conversations and collaboration that will catalyse action necessary to move our education sector forward. We understand that scaling up government spending on public education is imperative, but to actually move the needle and drive impact, we believe the key is creating scope for private investments in the sector.”

Delivering the keynote on behalf of the Vice President, Chukwuemeka Nwajiuba, minister of state for education, said, “It is possible for us as a country to restore education to its place – not juxtaposed by entrepreneurship or wealth creation; not looked down upon by certain groups in our society but embraced by all – working assiduously to deliver our respective responsibilities to empower our children and indeed, the future of our dear country Nigeria.”

Monday 28 October 2019

BUSINESS DAY

45

news

World Bank reports over 400m Africans live on less than $2 a day MIKE OCHONMA

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he World Bank has shown that more than a third of the population in sub-Saharan Africa (SSA) live below the poverty line according to a recent report it published inside Africa’s Pulse report. It urges governments in the continent to put in place policies that will quickly address the situation before it gets out of hand.

The Pulse report for Africa shows women have the ability to lead the charge for poverty eradication, as 40 percent of large-scale agriculture labourers on the continent are women.

However, there are still large and persistent gender gaps in productivity and earnings; and they come with significant economic cost. For instance, women produce 33 percent less per hectare of land than men do, and profits earned by female entrepreneurs are 34 percent lower than those of

male entrepreneurs.

Some recommendations the report made to close this gap include building skills for women that go beyond traditional training: including gender-sensitive agricultural extension services; socio-emotional skills training for women in business; and information to support occupational changes across sectors.

The second report is in the recommendations is in securing women’s land rights through the launch of land formalisation programmes; co-titling of land rights in the names of both spouses; and formalisation of existing customary rights will help close the gap.

It also recommended on the need to address social norms that constrain women’s economic opportunities, especially in the areas of appropriate types of work for men and women; distribution of domestic labour; and resource management within households.

According to the report, as of 2015 (the most recent data on the topic), more than 416 million people in Africa lived on less than $1.90 a day, representing an increase of more than 33 percentage points since 1990, when the region’s poor was around 278 million.

More than 82 percent, the report states, live in rural areas with smallholder farming as their predominant profession; meaning if policies to eradicate poverty are targetted at rural folks, there will be a drastic reduction of poverty on the continent.

“Accelerating poverty-reduction in Africa requires a series of actions which pursue four principles of engagement.

First, implement a policy agenda that creates economic opportunities for the poor in the sectors and places where they live and work, or helps them connect with income earning opportunities elsewhere and at the same time reduces their exposure to the many risks they face.

Lagos to employ art as healing therapy in health facilities … inaugurates Art4Life Steering Committee ANTHONIA OBOKOH

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he Lagos State government at the weekend inaugurated a 10-member committee, ‘Art4Life Steering Committee,’ to oversee the use of art as healing therapy in health facilities across the state.

Akin Abayomi, commissioner for health, who inaugurated the committee in his office at Alausa-Ikeja, explained that the committee would drive the Art4life project, an initiative of the Ministry of Health aimed at using art to create a soft and compassionate environment to aid the process of healing for patients in health facilities.

“The Art4Life project marks a new dimension in how we manage healthcare and well-being of our people in Lagos. We are adding a softer touch to how we deliver quality health care to our people in Lagos by bringing arts to contribute and transform the

healing process in our health facilities,” Abayomi said.

The Art4Life project is in further fulfilment of the present administration’s promise and commitment to strengthen healthcare system in the state, he said, noting that the introduction of art therapy will help improve mental health and wellbeing of citizens.

“The Art4Life project will introduce a softer method of looking beyond the physical in attending to patient’s health thereby reducing trauma, anxiety, emotional difficulties, and medical conditions amongst others.

“We need to pay great attention beyond the physical with a view to reducing mental trauma, emotional difficulties as well as depression, family or relationship issues through art therapy,” the commissioner stated.

While explaining the benefits of art therapy, he stated that several art methods including

Promo: Dangote Cement fetes star prize winner in Asaba

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ith the presentation of cars to star prize winners in its ongoing bag of goodies promo, Dangote Cement has kept its word and faith with consumers according to national sales director, Dangote Cement, Adeyemi Fajobi.

Fajobi was speaking in Asaba, Delta State, at the presentation of the star prize of a brand new car to the winner, Simeon Egualeonan, and specifically commended the people of Delta State and Asaba forremainingfaithfultothebrand, adding that the promo was a way of saying thank you to the consumers.

Fajobi said the first star prize winner emerged from Warri, Delta State, and today, a second star prize winner had emerged from Asaba, the same Delta State, an indication that the promo was real.

In her remarks, marketing director,FunmiSanni,declaredthat AsabawasveryspecialtoDangote Cement and remained one of ‘our best customers,’ saying the promo was designed for 21 million people, which is in line with ‘our philosophy of touching lives.’

She explained that the prizes were carefully selected to change the lives of the winners as they were economic goods, saying aside the quality product the company offered, it realised the need to give competitive pricing

to maintain the loyalty of growing customers so that they are lured into buying any other brand of cement.

She said, “Those in the value chain are the reason the company is bagging a minimum of 800,000 bags daily. You are very important tousandthereasonforthispromo tagged bag of goodies targeted at our consumers so that we can say thank in a special way. In every bag there is a scratch card and this scratch card has won somebody a car today and other winners as well.”

Group chief commercial officer, Dangote Industries Limited, Rabiu Umar, in his remarks declared that the promo was not a gimmick as the star prize car is here and ready to be driven off by the winner. He added that Dangote is building Nigeria through massive industrialisation and creation of jobs. He charged the people of Asaba to continue to buy and use Dangote Cement as they have seen that it keeps to its word.

Thestarwinner,SimeonEgualeonan, said he had been using Dangote Cement in his work as a mason. According to him, he had won a lot recharge cards which he loadedbutthistime,foundthestar prize winning card while opening a second bag of cement to repair a soak-away chamber.

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visual, creative and performing arts such as drawing, painting, sculpture, music, dancing and collage, among others, might be used with patients ranging from young children to the elderly, adding that people who had experienced emotional trauma, physical violence, domestic abuse, anxiety, depression, and other psychological issues could benefit from expressing themselves creatively.

He assured that the use of art therapy would be activated in all medical facilities across the state, emphasising that it had a magical way of impacting positively on a depressed patient, especially when they see nature.

He said the inclusion of art therapy would also transform heath care service delivery in the state, noting that his experience of how art was used to aid the process of healing and recovery of Ebola survivors in some West Africa countries was nothing short of magic.

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Monday 28 October 2019

BUSINESS DAY

news Nigeria’s fixed income market freezes up on CBN...

Continued from page 1

fragile and below population growth rate, lenders and investors have preferred parking cash in the high-yielding T-bills rather than lend to or invest in the real sector.

Even companies and individuals who had never traded fixed income became sold on the idea of earning a big return.

Yields on T-bills have moderated to 13 percent on average this year, since hitting a peak of 22 percent in 2016, thanks to a change of tack by the government to borrow less domestically.

However, with the persistent risks in the economy, as reflected in the stock market which is down some 16 percent, local investors are happy to take 13 percent on risk-free fixed income government securities.

The situation, which the CBN says is hampering economic growth by curbing credit flow to the real sector, forced it to introduce a raft of policies targeted at reducing demand for T-bills. That way, the apex bank is convinced it can force lending to the real sector and reduce private sector crowdingout, thereby boosting the economy which could only expand a miserly 2 percent in the first half of 2019.

Whether the CBN can trigger economic growth by restricting demand for T-bills remains to be seen.

“The CBN’s actions show its days of playing Father Christmas by offering high yields to local investors are over,” said Dipo Ajayi, head of fixed income trading at Lagosbased investment bank, Chapel Hill Denham.

“The market lull to be created from forcefully reducing demand for T-bills could be a boon for corporates looking to raise debt, because they can sell commercial papers at a cheaper rate to investors holding idle funds that would have been used to buy T-bills,” Ajayi said.

According to Ajayi, who says the level of inactivity in the T-bill market on Friday was the worst he had seen in his 15 years of trading fixed income, the lull will continue until at least after a primary auction Wednesday.

“That’s if the CBN doesn’t publish another circular clarifying its earlier directives,” he said.

Traders have decided to hold their guns until they get better clarity over the directive which the CBN was yet to formally communicate as of Friday.

Two fixed income traders told BusinessDay they didn’t want to fall on the wrong side of the policy and so will wait until Wednesday to get a clearer idea on the direction of interest rates.

“The stop rate will be used to gauge where the CBN wants

interest rates to be,” one of the traders said.

Meanwhile, a Bloomberg report quoting an interview with CBN spokesperson, Isaac Okarafor, said the move to ban individuals and local nonfinancial institutions from trading T-bills is because the apex bank doesn’t want to leave room for “arbitrage” and wants to discourage banks from giving loans to “speculators” who want to buy government securities instead of investing in the real economy.

“The problem with that is by banning local non-financial institutions from the market, the banks can’t find natural counterparties to trade with and that has frozen the market,” a local pension fund manager told BusinessDay. That’s because local corporates that usually serve as counterparties are no longer able to access the primary or secondary market, the fund manager said.

“The zero activity on Friday has never happened since at least 2007 when fixed income trading became liquid.

However, the lack of activity will create a liquidity glut that could benefit corporates looking to raise debt,” he said.

Cardinal Stone analysts said in a note to clients on Friday that the restriction of local corporates and individuals from participation in OMO is positive for borrowing costs (for corporates and the FGN) as yields are likely to moderate in the near term.

“The clear delineation of OMO from other money market instruments also allows the CBN to attract FPIs with higher rates (for currency management) at a lower cost as the OMO sales are likely to reduce with the restriction placed on domestic non-bank investors,” the analysts said.

The team of analysts, led

by Phillip Anegbe, also said the restriction of key corporates, such as PFAs and insurance companies, from participation in OMO is likely to free up excess investable cash for allocation to assets beyond fixed income alternatives.

“We see legroom for some flows into fundamentally strong equity names as treasury yields moderate. Our view is also buttressed by the high earnings and dividend yields in the equity market space,” the Cardinal Stone team, which includes Michael Nwakalor and Jerry Nnebue, noted.

For context, while some select names (especially within the tier-1 banking space) boast earnings yield in excess of 30.0 percent, the yield on the one-year T-bills is at 13.37 percent. In addition to this, tier-1 banks are averaging dividend yields of 10.9 percent.

High dividend yields are likely to attract institutional investors such as PFAs, as the potential for capital gains in fundamentally sound stocks further enhances the appeal of the equity market. www.businessday.ng

L-R: Omobola Johnson, director, Guinness Nigeria plc; John O’Keefe, president, Diageo Africa; Rotimi Odusola, company secretary; Babatunde Savage, chairman board of directors, and Baker Magunda, MD/CEO, during the 69th annual general Pic by Tunde Adeniyi meeting of Guinness Nigeria plc held in Abuja.

Nigeria’s $700m gas transmission pipeline still...

Continued from page 1

million, continues to suffer multiple setbacks.

This delay in the completion of the project has shortchanged Nigerians w h o d e s i re t o e n j oy a significant mark-up in electricity supply to their homes and businesses.

The project was initiated to facilitate the transportation of gas from the eastern Niger Delta, where there are a lot of gas reserves, to industrial markets in the west side of the country, where high demand exists because of the high number of power plants and industrial gas consumers.

It was originally slated to be completed in July 2017.

The completion date was, however, shifted by one year on technical grounds to July 2018, and thereafter shifted to second quarter 2019.

Even though some mileage has been achieved by the two contractors handling the project, they still could not meet the deadline again this year.

“The OB3 project was initially estimated at $400 million. However, frequent postponement of completion date increased the value to $700 million which is very sad for a government struggling with low funds,” Charles Akinbobola, energy analyst at Lagos-based energy firm, said.

The project, which is part of a network of gas pipelines under construction around the country, is expected to boost the start-up of hundreds of new businesses, reduce the cost of doing business in the country by as much as 30 percent, and generate several jobs within a few years.

When completed, the pipeline would supply gas seamlessly to power plants such as Egbin, Sapele, Geregu, Omotosho, and Olurunsogo and Ugheli to generate a significant markup in electricity as it is to be linked to the EscravosLagos pipeline.

However, the project has been continuously delayed following the failure of contractors handling the 123km East-West Oben-ObiafuObrikom (OB3) gas pipeline to meet the project completion deadline.

“Building pipelines are expensive; when there is no money it’s impossible to mobilise contractors,” Ademola Henry, team leader at the Facility for Oil Sector Transformation (FOSTER), said.

Henry regretted that a project like OB3 that could create job opportunities and enhance economic growth was not getting government’s attention.

The Engineering, Procurement, Construction (EPC) contract was awarded in the third quarter of 2012 by former President Goodluck Jonathan to Oilserv Group (Lot B) and Nestoil Limited (Lot A) with July 31, 2017 as the deadline for completion.

The contract, which is split into two halves for both indigenous oil firms, was awarded in the spirit of local content development.

It was the first time local companies would handle a strategic project of this magnitude.

Lot A involves the EPC of 64.15km x 48” Class 600 gas pipeline and Custody Transfer Metering Station at Obiafu/Obrikom in Rivers State. Lot B involves the EPC of 47.13km x 48” & 18km x

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36” Intermediate Pigging Station and Gas Treatment Plant at Oben, Edo State.

The project is part of a network of gas pipelines under construction around the country. It is expected to boost the start-up of hundreds of new businesses, reduce the cost of doing business in the country by as much as 30 percent, and generate several jobs within a few years.

Ndu Ughamadu, group general manager, public affairs division of the Nigerian National Petroleum Corporation (NNPC), when asked why the target date for the completion of the gas pipeline was not met the last time, said some of the contractors did not live up to expectation.

Ughamadu said some of the contractors also met with security and community challenges on the path of the pipeline, and that the rainy season may have further slowed the pace of work.

Further investigation by BusinessDay revealed that there was misalignment of the engineering work by one of the contractors, which affected the work of the other company. This may throw light on Ughamadu’s explanation of contractor failure to live up to expectation.

Emeka Okwuosa, chairman/CEO of Oilserv Group, told some Nigerian journalists in an interview early this year that efforts were being put in place to ensure that the Obiafu-Obrikom-Oben (OB3) ‘Lot A’ gas pipeline being handled by his company was completed by September 2019.

“We finished our own pipeline three years ago, but the treatment plant took a longer time because the location was changed from Oben North to the GTP lo@Businessdayng

cation and that took us two years to go through the reengineering process, getting the approval and finance,” Okwuosa said at Offshore Technology Conference (OTC) held in Houston, USA. All efforts to get comments from Nestoil proved abortive, as messages and emails were not responded to as at close of business on Friday.

Previously, Nestoil attributed the delay in the completion of the East-West pipeline project to incessant rainfall, resulting in flooding of the operational areas which was also impacted by militancy and the difficulty encountered in crossing the River Niger.

“The earliest time the project will be ready will be second quarter next year,” Henry of FOSTER said.

Besides, there are other gas pipelines projects that remain uncompleted due to a number of factors. These include the planned extension of the West Africa Gas Pipeline (WAGP) to Cote d’Ivoire, Escravos-Lagos Pipeline (ELP), East-West Offshore Gas Gathering System (EWOGGS), Ajaokuta-Kaduna-Kano (AKK) pipeline project and the Trans Saharan Gas pipeline.

But while Nigeria seems to be dilly-dallying, Trinidad and Tobago is a good example of a country that has accomplished much with its gas resources. With a small population of 1.4 million and only 11 TCF of proven gas reserves, the country has developed a globally competitive petrochemicals industry. Today, Trinidad and Tobago is the world’s largest exporter of ammonia and second largest exporter of methanol leading to this industry contributing significantly to the country’s GDP.

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abujacitybusiness Comprehensive coverage of Nation’s capital

Minister prioritizes eradication of polio in FCT James Kwen, Abuja

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Representative of president, Muhammadu Buhari, Minister of the fct Malam Muhammad Musa Bello laying a wreath at the Cenotaph in honour of those who lost their lives at the un building bombing in 2011

Bauchi signs $100m MoU with Kuwait for execution of Kuruju solar power project James Kwen, Abuja

...Declares state of emergency in health sector

he Bauchi State Government has signed a Me m o ra n d u m of Understanding (MoU) for the execution of Kujuru Solar Power Project at $100million with the Kuwait government for investment of up to $20OMillion.

The Government also signed the Gwana Cement Factory at the cost of $864 Million with an American Investment with over N2 Billion in CRS and entered agreement with Family Home Funds for the provision of

2,500 housing units across the State at N15 Billion.

Governor of Bauchi State, Bala Mohammed who made this known in an address at a special retreat for Journalists Covering the Federal Capital Territory Administration (FCTA) in Bauchi.

Bala disclosed that upon assumption of office his administration injected about N10.8 Billion Naira into education for the provision of infrastructure in primary, secondary, tertiary and Nonformal educational institu-

T

tions.

He said government has declared a state of emergency in the health sector to improve healthcare delivery and have also paid all counterpart funds to the Bill and Melinda Gates, Dangote Foundations and other Development Partners.

The former Minister of the Federal Capital Territory disclosed that the administration has issued a standing order to all the 20 Local Government Areas of the State to contribute 1% of their in-

ternally generated gevenues to Bauchi State Health care Trust Fund.

“Fellow participants, in order to give more dividends of democracy to the good people of Bauchi State, Government has awarded contracts for the construction of 92.6 kilometers roads across the State at the cost of N17.3 Billion Naira. About 50% down payment has been paid and the completion period is between one year and a maximum of three years.

CAC hails FG over World Bank ranking of Nigeria on ease of doing business James Kwen, Abuja

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he Corporate Affairs Commission (CAC) has applauded the Federal Government and President Muhammadu Buhari on the remarkable progress made in the Global Competitiveness Index Ranking by the World Bank which placed Nigeria on 131 position in the Ease of Doing Business.

Azuka Azinge, CAC Acting Registrar-General said the feat is attributeable to the faithful implementation of the Ease of Doing Business reform initiatives by the Presidential Enabling Business Environment Council (PEBEC) led by Vice President Yemi Osibanjo and supported

by Ministers of Industry, Trade & Investment, Finance, Interior and other stakeholders.

Azinge in a felicitation message signed by Moses Adaguusu, CAC Head of Public Affairs stated that the Commission is proud to be part of the historic achievement and congratulated other sister agencies that have collaborated to make it happen.

The Acting RegistrarGeneral reaffirmed the Commission’s commitment to the present administration’s reform agenda

designed to take the country to the next level.

She assured other stakeholders in the Ease of Doing Business matrix and the country at large that the CAC will continue to co-operate and collaborate with other agencies not only to maintain the success recorded but to also ensure that Nigeria b e c o me s an Inve sto r ’s preferred destination of choice.

Keeping FCT clean is a responsibility of all - Bello James Kwen, Abuja

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he Minister of the Fe d era l Cap i ta l Territor y (FCT), Muhammad Bello has called on all stakeholders to join hands together to keep the Territory clean as the task of environmental sanitation and protection should not be left to the government alone.

Bello who made the call at the commemoration of

the 2019 World Habitat Day by the FCT Administration, with the theme “Frontier Technologies as Innovative Tools to Transform Waste to Wealth” insisted that all stakeholders in the society starting from the traditional ruler to the ward head and the family unit should be involved.

He called on traditional rulers and all residents of the FCT to see themselves as waste to wealth ambaswww.businessday.ng

sadors and embark on the crusade to educate others on the need to desist from actions such as open defecation and indiscriminate dumbing of refuse.

Bello said the hosting of the event by the FCTA was part of activities towards the domestication of the New Urban Agenda and the building of an all-inclusive City and expressed concern at the alarming level of waste generated

globally by cities annually, killing one hundred thousand marine animal each year.

He stated that the FCTA has consistently maintained its resolve to bring to reality the “Kuala Lumpur Declaration on cities 2030” and has identified the key areas that need critical intervention, with waste management in the FCT being one of the issues on the front burner.

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he Minister of Federal Capital Territory (FCT), Muhammad Bello has assured that campaign efforts will be intensified while partnership built against polio to ensure the complete eradication of disease in the Territory.

Bello who gave the assurance at the Polio Week organized by Cedarcrest Polio Centre in Abuja said Nigeria was about to be declared and certified a polio free country, stressing that failure not was not an option.

The Minister said the FCTA has left no stone unturned in the quest to ensure that every eligible child is immunized,

adding that so far, five out of the six area councils of the FCT have achieved 90 per cent coverage and for over six years, no new case of the disease has been recorded in the FCT. He commended Cedarcrest Polio Centre and its partners for its efforts not only in the fight against polio in the country but also in making treatment available to people living with residual deformities after suffering from the disease.

On his part, the Director, Cedarcrest Polio Centre, Felix Ogedengbe called for the establishment of an active referral Centre for polio patients in Nigeria where victims can seek help and care.

FG seeks partnership with BOIN to boost agribusiness Cynthia Egboboh, Abuja

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he Federal Government has solicited stronger partnership with Beyond Oil Initiative Nigeria (BoIN) to boost agribusiness development and stimulate job creation across the country.

The Minister of Agriculture and Rural Development, Mohammed Nanono who gave this indication while receiving the delegates of the BOIN in Abuja said the collaboration was aimed at improving the standard of agriculture products and making Nigerian brands available in foreign markets.

“This program would achieve the goal of the current administration’s next agenda in the Agric Sector and create the desired value chain, facilitate products standardization and promote global market access of Nigerian branded products with massive job creation and increase Internally Generated Revenue for

the country”, he said.

Nanono stressed the need to promote global best packaging methods and branding of the products towards ensuring global market penetration, adding that, the programme would facilitate uniform grading and competitive pricing of Nigerian agricultural products.

Adanma Ogumka, National Coordinator, BoIN had said the programme is been carried out in partnership with Alex Ekwueme Federal University ,Ndufu Ikwo Alike ( AE-FUNIA), Ebonyi State, Federal Minister of Agriculture and Rural Development and international organizations to achieve set goals.

“We have foremost market access specialist/expert, working with leading global institutions and the government to develop and take back domestic and export markets of indigenous commodities which have been taken by other countries, thereby making Nigeria a dumping ground for own quality products”, Ogumka noted.

Africare promotes hand hygiene culture among students Godsgift Onyedinefu, Abuja

I

n commemoration of the 2019 Gobal Hand Washing Day, Africare Nigeria has sensitized hundreds of secondary school students in Abuja on hand hygiene culture as part of efforts to prevent diseases and promote well-being.

The commemoration held at Government Secondary School Kubwa, Government Secondary School Mpape and other schools with the theme “clean hands for all”, was a student-led activity where selected students educated their peers with practical steps on hand hygiene.

The students expressed concern over the poor hand washing culture among Ni@Businessdayng

gerians as most diseases are caused by poor hand hygiene and warned against the habit where people only wash hands only when they want to eat, stressing that a healthy lifestyle involves good hand hygiene habit which should be done thoroughly in seven steps.

Some of the students, Isaiah Prescious, Sonna Ekwegh and Ike Olivia instructed their peers on the seven steps to follow in washing their hands because most germs hide in them and finally enters their body when they eat without washing hands, saying the event has increased their awareness on the importance of hand washing to their health.

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BUSINESS DAY

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We dedicate these awards to our customers for partnering with us, and also to our sta for their uninching commitment to ensuring that we deliver the best services.

Most Innovative Insurance Company of the year (2019)

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Live @ The STOCK Exchanges Prices for Securities Traded as of Friday 25 October 2019 Company

Market cap(nm)

Price (N)

Change

Trades

Volume

Company

Market cap(nm)

Price (N)

Change

Trades

Volume

PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 259,480.15 7.30 2.82 166 22,396,767 UNITED BANK FOR AFRICA PLC 200,066.62 5.85 1.74 234 28,473,013 ZENITH BANK PLC 533,740.39 17.00 0.29 449 74,490,714 849 125,360,494 OTHER FINANCIAL INSTITUTIONS MARKET CAP(Nm) PRICE %CHANGE TRADES VOLUME 190,245.05 5.30 -0.94 129 21,877,734 FBN HOLDINGS PLC 129 21,877,734 978 147,238,228 TELECOMMUNICATIONS SERVICES MTN NIGERIA COMMUNICATIONS PLC 2,625,732.18 129.00 - 21 24,429 21 24,429 21 24,429 BUILDING MATERIALS DANGOTE CEMENT PLC 2,487,914.08 146.00 -0.14 71 1,654,443 LAFARGE AFRICA PLC. 236,784.59 14.70 1.73 59 807,460 130 2,461,903 130 2,461,903 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 304,225.84 517.00 - 8 3,544 8 3,544 8 3,544 1,137 149,728,104 REAL ESTATE INVESTMENT TRUSTS (REITS) SKYE SHELTER FUND PLC 1,710.00 85.50 - 0 0 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 10,175.81 40.70 - 0 0 UPDC REAL ESTATE INVESTMENT TRUST 13,074.52 4.90 - 8 28,015 8 28,015 8 28,015 OTHER FINANCIAL INSTITUTIONS NIGERIA ENERYGY SECTOR FUND 411.91 552.20 - 0 0 VALUEALLIANCE VALUE FUND 3,312.39 103.20 - 0 0 0 0 0 0 8 28,015 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 0 0 OKOMU OIL PALM PLC. 52,417.35 54.95 - 16 18,728 PRESCO PLC 38,400.00 38.40 - 10 29,175 26 47,903 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 8,520.00 4.26 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,500.00 0.50 - 13 290,236 13 290,236 39 338,139 DIVERSIFIED INDUSTRIES A.G. LEVENTIS NIGERIA PLC. 741.24 0.28 - 0 0 214.03 0.55 - 3 4,090 JOHN HOLT PLC. S C O A NIG. PLC. 1,903.99 2.93 - 2 300 TRANSNATIONAL CORPORATION OF NIGERIA PLC 40,241.51 0.99 - 47 24,116,694 18,728.43 6.50 - 35 774,529 U A C N PLC. 87 24,895,613 87 24,895,613 BUILDING CONSTRUCTION ARBICO PLC. 711.32 4.79 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 24,486.00 18.55 - 6 11,152 ROADS NIG PLC. 165.00 6.60 - 0 0 6 11,152 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 2,780.28 1.07 8.08 12 26,990,940 12 26,990,940 18 27,002,092 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 7,986.09 1.02 - 2 13,503 GOLDEN GUINEA BREW. PLC. 242.22 0.89 - 0 0 GUINNESS NIG PLC 52,240.63 23.85 -9.83 44 543,713 INTERNATIONAL BREWERIES PLC. 108,307.86 12.60 - 1 50 NIGERIAN BREW. PLC. 368,257.34 46.05 - 39 395,650 86 952,916 FOOD PRODUCTS DANGOTE FLOUR MILLS PLC 111,250.00 22.25 -3.26 30 446,870 DANGOTE SUGAR REFINERY PLC 124,200.00 10.35 - 43 373,895 FLOUR MILLS NIG. PLC. 61,710.71 15.05 0.33 37 1,461,371 HONEYWELL FLOUR MILL PLC 7,533.69 0.95 - 15 628,450 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 766.26 4.30 - 0 0 NASCON ALLIED INDUSTRIES PLC 39,344.16 14.85 - 6 3,657 UNION DICON SALT PLC. 3,321.07 12.15 - 0 0 131 2,914,243 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 18,030.74 9.60 - 21 168,673 NESTLE NIGERIA PLC. 967,040.63 1,220.00 - 39 61,150 60 229,823 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 4,377.95 3.50 -0.28 17 547,392 17 547,392 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 21,837.62 5.50 - 16 61,982 UNILEVER NIGERIA PLC. 153,391.64 26.70 - 17 55,988 33 117,970 327 4,762,344 BANKING ECOBANK TRANSNATIONAL INCORPORATED 130,281.81 7.10 - 25 99,348 FIDELITY BANK PLC 49,257.15 1.70 0.59 55 2,783,816 GUARANTY TRUST BANK PLC. 774,040.01 26.30 1.15 125 6,230,634 JAIZ BANK PLC 13,258.91 0.45 - 2 68,150 STERLING BANK PLC. 55,853.41 1.94 4.86 317 3,346,121 UNION BANK NIG.PLC. 203,845.27 7.00 - 13 95,136 UNITY BANK PLC 7,364.28 0.63 - 5 25,600 WEMA BANK PLC. 21,987.45 0.57 3.64 55 5,261,813 597 17,910,618 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 0 0 AIICO INSURANCE PLC. 4,366.03 0.63 - 5 28,500 AXAMANSARD INSURANCE PLC 17,850.00 1.70 - 0 0 CONSOLIDATED HALLMARK INSURANCE PLC 3,008.10 0.37 - 0 0 CONTINENTAL REINSURANCE PLC 24,790.86 2.39 1.70 13 873,200 CORNERSTONE INSURANCE PLC 5,597.21 0.38 - 5 45,500 GOLDLINK INSURANCE PLC 909.99 0.20 - 0 0 GUINEA INSURANCE PLC. 1,228.00 0.20 - 0 0 INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 0 0 LASACO ASSURANCE PLC. 1,904.09 0.26 - 10 813,000 LAW UNION AND ROCK INS. PLC. 1,933.35 0.45 -4.26 4 202,158 LINKAGE ASSURANCE PLC 4,080.00 0.51 - 7 258,000 MUTUAL BENEFITS ASSURANCE PLC. 2,234.55 0.20 - 2 40,000 NEM INSURANCE PLC 10,561.01 2.00 - 8 208,800 NIGER INSURANCE PLC 1,547.90 0.20 - 0 0 PRESTIGE ASSURANCE PLC 2,745.10 0.51 - 2 59,000 REGENCY ASSURANCE PLC 1,333.75 0.20 - 0 0 SOVEREIGN TRUST INSURANCE PLC 1,668.16 0.20 - 4 500 STACO INSURANCE PLC 4,483.72 0.48 - 0 0 STANDARD ALLIANCE INSURANCE PLC. 2,582.21 0.20 - 0 0 SUNU ASSURANCES NIGERIA PLC. 2,800.00 0.20 - 3 11,500 UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 0 0 3,200.00 0.20 - 1 24,000 UNIVERSAL INSURANCE PLC VERITAS KAPITAL ASSURANCE PLC 2,773.33 0.20 - 0 0 WAPIC INSURANCE PLC 4,282.48 0.32 3.13 19 625,777 83 3,189,935 MICRO-FINANCE BANKS NPF MICROFINANCE BANK PLC 2,721.10 1.19 - 6 345,224 6 345,224

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MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 4,200.00 1.00 - 4 59,954 7,370.87 0.50 - 0 0 ASO SAVINGS AND LOANS PLC INFINITY TRUST MORTGAGE BANK PLC 5,796.93 1.39 - 0 0 2,265.95 0.20 - 0 0 RESORT SAVINGS & LOANS PLC UNION HOMES SAVINGS AND LOANS PLC. 2,949.22 3.02 - 0 0 4 59,954 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 7,640.00 3.82 -2.05 25 528,917 32,056.16 5.45 -9.17 24 768,500 CUSTODIAN INVESTMENT PLC DEAP CAPITAL MANAGEMENT & TRUST PLC 660.00 0.44 - 0 0 FCMB GROUP PLC. 31,288.28 1.58 -1.25 31 760,941 1,029.07 0.20 - 1 523 ROYAL EXCHANGE PLC. STANBIC IBTC HOLDINGS PLC 387,517.72 37.00 - 8 72,454 12,300.00 2.05 2.50 34 1,108,417 UNITED CAPITAL PLC 123 3,239,752 813 24,745,483 HEALTHCARE PROVIDERS EKOCORP PLC. 1,680.29 3.37 - 0 0 817.22 0.23 4.55 4 236,620 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 4 236,620 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 494.58 0.50 - 1 312 1 312 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 FIDSON HEALTHCARE PLC 8,345.44 4.00 - 5 815 6,936.08 5.80 - 7 61,159 GLAXO SMITHKLINE CONSUMER NIG. PLC. MAY & BAKER NIGERIA PLC. 3,450.47 2.00 - 2 5,850 759.66 0.40 - 4 100,000 NEIMETH INTERNATIONAL PHARMACEUTICALS PLC NIGERIA-GERMAN CHEMICALS PLC. 556.71 3.62 - 0 0 PHARMA-DEKO PLC. 325.23 1.50 - 0 0 18 167,824 23 404,756 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 745.92 0.21 -4.55 11 1,660,833 11 1,660,833 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 1,470.89 0.50 - 0 0 0 0 IT SERVICES CWG PLC 6,413.06 2.54 - 0 0 486.00 4.50 - 0 0 NCR (NIGERIA) PLC. TRIPPLE GEE AND COMPANY PLC. 292.02 0.59 - 2 1,700 2 1,700 PROCESSING SYSTEMS CHAMS PLC 1,080.09 0.23 -4.17 13 11,750,000 E-TRANZACT INTERNATIONAL PLC 9,996.00 2.38 - 0 0 13 11,750,000 TELECOMMUNICATIONS SERVICES AIRTEL AFRICA PLC 1,157,510.66 308.00 - 25 188,520 25 188,520 51 13,601,053 BUILDING MATERIALS BERGER PAINTS PLC 2,173.68 7.50 - 2 1,642 CAP PLC 17,885.00 25.55 - 8 20,100 CEMENT CO. OF NORTH.NIG. PLC 197,152.51 15.00 -6.25 19 472,860 313.43 0.59 - 0 0 MEYER PLC. PORTLAND PAINTS & PRODUCTS NIGERIA PLC 1,769.32 2.23 - 0 0 PREMIER PAINTS PLC. 1,156.20 9.40 - 0 0 29 494,602 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,256.91 2.09 - 0 0 CUTIX PLC. 2,465.85 1.40 -2.78 11 300,408 11 300,408 PACKAGING/CONTAINERS BETA GLASS PLC. 26,898.49 53.80 - 2 1,200 GREIF NIGERIA PLC 388.02 9.10 - 1 1,250 3 2,450 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 0 0 0 0 43 797,460 CHEMICALS B.O.C. GASES PLC. 2,547.42 6.12 - 0 0 0 0 METALS ALUMINIUM EXTRUSION IND. PLC. 1,781.64 8.10 - 0 0 0 0 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 0 0 0 0 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 83.60 0.38 - 1 4,000 1 4,000 1 4,000 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,252.54 0.20 - 15 2,291,849 15 2,291,849 INTEGRATED OIL AND GAS SERVICES OANDO PLC 42,266.80 3.40 - 29 296,071 29 296,071 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 53,332.04 147.90 - 6 1,412 CONOIL PLC 10,686.86 15.40 - 17 30,719 ETERNA PLC. 3,716.81 2.85 - 1 1,100 FORTE OIL PLC. 20,904.82 16.05 -8.81 71 631,499 MRS OIL NIGERIA PLC. 5,166.13 16.95 - 1 420 TOTAL NIGERIA PLC. 41,829.09 123.20 - 7 11,321 103 676,471 147 3,264,391 ADVERTISING AFROMEDIA PLC 1,820.01 0.41 - 0 0 0 0 AIRLINES MEDVIEW AIRLINE PLC 17,551.17 1.80 - 0 0 0 0 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 294.09 0.25 - 0 0 0 0 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 2,387.46 4.05 - 3 5,600 TRANS-NATIONWIDE EXPRESS PLC. 393.83 0.84 - 0 0 3 5,600 HOSPITALITY TANTALIZERS PLC 642.33 0.20 - 0 0 0 0 HOTELS/LODGING CAPITAL HOTEL PLC 4,723.78 3.05 - 0 0 IKEJA HOTEL PLC 2,224.31 1.07 - 1 13,000 TOURIST COMPANY OF NIGERIA PLC. 7,862.53 3.50 - 0 0 TRANSCORP HOTELS PLC 41,042.18 5.40 - 0 0 1 13,000 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 4,800.00 0.40 - 0 0 0 0 PRINTING/PUBLISHING ACADEMY PRESS PLC. 205.63 0.34 - 4 13,300 LEARN AFRICA PLC 856.31 1.11 - 3 18,630 STUDIO PRESS (NIG) PLC. 1,183.82 1.99 - 1 1,000 UNIVERSITY PRESS PLC. 496.12 1.15 - 7 43,599 15 76,529 ROAD TRANSPORTATION ASSOCIATED BUS COMPANY PLC 729.39 0.44 - 3 120,850 3 120,850 SPECIALTY INTERLINKED TECHNOLOGIES PLC 757.44 3.20 - 0 0 SECURE ELECTRONIC TECHNOLOGY PLC 1,126.31 0.20 - 0 0 0 0

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BD Money

Monday 28 October 2019

BUSINESS DAY

Commodities

cover

Fixed Income

Personal Finance

Nigeria’s gold supply poised for growth as Canadian’s Thor Exploration’s attracts $78m funding

PAYDAY: 8 ways to have fun without breaking the bank

These 10 T-Bills offer most return on investment

How to ensure hackers don’t access your financial details (1)

PayDay is in three days and many people are already making plans to save, invest and grow wealth.

However, some would end up singing Timaya’s “In this life, I can’t kill myself, Allow me to flex o” once they receive their paycheck. They are not wrong for seeking fun.

One of the major concerns of investors before considering any form of investment is getting a relatively high return and whether or not the invested money is secure. These are two worries that the treasury bills (T-Bills) segment of the Nigeria’s fixed income market could clear, particularly with CBN’s recent regulation

Cybersecurity is one of the biggest concerns of big institutions around the world as the need for executing transactions at the speed of thought increase reliance on technology. This problem concerns you too

Nigeria’s capacity for gold supply might be poised for expansion as Canadianlisted Thor Explorations, which runs a gold mining project in the country, advances in its hunt for investment.

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Monday 28 October 2019

BUSINESS DAY

BD Weekly Tenders Wrap-up

Market Review

About BD Money: This finance supplement is targeted at investors and other readers keen to make their money work harder.

Team Members: Lolade Akinmurele (Lead); Hope Moses Ashike; Segun Adams; Oluwasegun Olakoyenikan; Temitayo Ayetoto; Israel Odubola; Olufikayo Owoeye; David Ibidapo; Graphics: Fifen - Famous www.businessday.ng

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Commodities Nigeria’s gold supply poised for growth as Canadian’s Thor Exploration’s attracts $78m funding Temitayo Ayetoto

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igeria’s capacity for gold supply might be poised for expansion as Canadianlisted Thor Explorations, which runs a gold mining project in the country, advances in its hunt for investment. The latest result of its investment bid is a $78 million debtequity financing from Africa Finance Corporation (AFC), a corporation which the central bank of Nigeria and some commercial banks have stakes, reports say.

Although deposits of 44 minerals, including gold, iron ore, coal, tin and zinc, in over 500 locations across the nation, many of them remain proven reserves that are largely untapped. Most of the mining have remained at artisanal levels, limiting the active addition of gold detected in proven reserves into the supply chain.

Nigeria’s first gold refinery, Kian Smith with an initial capacity to produce three tons of gold monthly and one ton of silver is expected to more than triple its capacity within five years. But it will not be relying on gold sourced from Nigeria alone, but also from supplying partners in Ghana, Sierra Leone and Tanzania, according Nere Teriba, vice chairman of Kian Smith Trade & Co said in a monitored report.

What it implies is that despite proven reserves of both alluvial and primary gold in the in the south-western part of the country, poor capacity to mine can edge it out of competition in the West Africa’s gold supply chain.

This is why the country has overtime made efforts to lure private investors such as Thor Explorations and Australian-listed Kogi Iron to stake concessions on these primary deposits.

In 2018, both companies pushed for the consolidation of their investments in gold and iron mining in Osun and Kogi states respectively, hunting for a combined sum of $422 million.

Thor aimed for $72 million, promising rapid payback on invested funds once

production takes flight.

The renewed attention was spurred by the support interest of the World Bank in Nigeria 2017 when in April it said it was providing funds to help the government develop its neglected mining sector.

The bank’s support programme involved providing about $150 million to the government to enable it to jumpstart non-oil sectors of the economy that have suffered decades of neglect after an oil sector boom. With highly volatile oil prices that have consistently left the government’s failing to meet its revenue target, it has seen the need to diversify its economy.

Thor identifies the opportunity in government’s reprioritising of the nonoil sector and is leveraging on the underdevelopment in the mining sub-sector.

The Canadian company owns a gold exploration licence in Osun State and has set up a mining operation known as Segilola Gold Project, for which Segun www.businessday.ng

Lawson, its chief executive, says it is aiming to produce gold in the first quarter of 2021 with probable reserves of up to 500,000 ounces.

The project was brought in 2016 for a cash back up of $3.1 million plus Thor shares put at six million.

Segun Lawson, president and chief executive of Thor said: “Detailed design work on the Segilola Project is in progress and we are on track to break ground in Q4 this year. We look forward to completing the current equity placements and AFC debt documentation, at which point, the Segilola Project will be fully funded.”

The company received conditional approval from the TSX Venture Exchange for the first tranche of a proposed $15,000,000 private placement with the Africa Finance Corporation (“AFC”), earlier this month. In August, it extended its proposed private placement, ‘Offering’, by 30 days and thereafter received

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the first $6 million in subscriptions from the Offering, moving the company into advanced discussions with parties who were completing their required due diligence on the Company.

Being a sector that has struggled to attract foreign investment, mining provides only around 0.5 percent of Nigeria’s gross domestic product (GDP), according to the World Bank figures The oil sector accounts for an estimated 8.7 percent of the GDP and is critical for foreign exchange and fiscal revenue.

Gold Reserves in Nigeria averaged 21.37 tons between 2000 and 2019, hitting an all-time high of 21.50 tons in the second quarter of 2019, available statistics show.

With Thor’s investment progress, Nigeria could be set for its first industrialscale gold mine from Thor Explorations Ltd., which is developing a project capable of producing 80,000 ounces per year in southwest Nigeria.

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Monday 28 October 2019

BUSINESS DAY

Cover Story PAYDAY: 8 ways to have fun without breaking the bank

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OLUWASEGUN OLAKOYENIKAN

gate fee is usually less than N1000 per head and you can ride horses for around N500.

If you are brave, you can also swim in the Atlantic Ocean or allow its wave wash over you.

Popular beaches in Lagos include Oniru, Tarkwa Bay, Barracuda, Elegushi, Atican Beach Resort, Eleko and so on.

Window shopping at the mall (N0-N1500): It is free to look at goods displayed in shop windows without buying any, and it is also legal.

Looking at the different colours, designs and models of various items on display can be mentally satisfying and inspiring too. Window shopping is also an avenue to exercise your body and take your mind off the daunting tasks waiting for you at the office.

Whenever you get tired of moving around, you can also take a break at any of the eateries in the mall to refuel and take selfies.

Volunteer for something you enjoy (N0): Volunteering for a cause you are passionate about or for activities you enjoy can be a great way to have fun without spending.

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These 10 T-Bills offer most return on investment

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Park, Lekki Conservation Centre, Lufasi Park, Lagoon Front and the likes.

Host Movie Nights instead of going to the Cinema (N0-N2000): Ultra-savers can set up movie nights with friends and have the same feel as going to the cinema with the advantage of spending virtually nothing.

To maximize the experience, you can do some desktop research on the latest movies or decide on the movie to see with the person you are inviting over.

You can download movies on dedicated websites that legally allow you to or subscribe to streaming services like Netflix.

You may want to ensure you have a good sound system and some popcorn, drinks or snacks within reach. You could also use a projector to create a truly cinematic feel.

Visit the beach (N2000-N4000): If you love the feel of sand under your feet, sun over your head and the cool sea breeze on your skin then the beach is one place you should visit for relaxation.

It does not cost much to visit the beach;

BUSINESS DAY

Fixed Income

SEGUN ADAMS ayDay is in three days and many people are already making plans to save, invest and grow wealth. However, some would end up singing Timaya’s “In this life, I can’t kill myself, Allow me to flex o” once they receive their paycheck. They are not wrong for seeking fun.

The desire to enjoy life is a valid one because we all have got just one life to live, and there is no better time to experience the fullness of that life than when one still has it.

Psychologists say not taking out time to relax can lead to burnout and many health problems.

“Stress is linked to the six leading causes of death: heart disease, cancer, lung ailments, accidents, cirrhosis of the liver, and suicide,” according to a 2019 blog post by US-based Psych Central, an independent mental health social network.

The mind experts say having fun can help reduce stress level and makes one more productive at work.

While reckless spending is not encouraged, there should always be a provision in your budget for you and your loved ones to take time off your routine and enjoy some luxuries of life.

If you love cheap thrills-like many Nigerians do- below are a few budgetfriendly suggestions that will allow you to flex and how much they cost on the average.

Go on Picnics (N2000-N5000): A picnic is one way to hang out with those you care about without spending more than you plan to because you can make the food, snacks and drinks you need at home thereby saving cost.

Picnics allow you to enjoy the serenity of nature, whether it is a garden, lakeside or a highland that you plan on visiting.

If you stay in Lagos, picnics are a perfect get-away from the crazy traffic and noisy streets. There are several parks you can visit with your friends and family including the Freedom

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Take for instance Sarah, a software engineer at a firm in Abuja where she works almost 60 hours a week.

Sarah is very passionate about dancing but she hates dancing alone. She also thinks clubbing every week is a waste of hard-earned money. To manage cost Sarah volunteers to teach at a dance club where she can live out her passion.

Joining clubs, societies and outreaches that engage in activities you enjoy can be another avenue for you to socialize and meet more people.

Explore your city- its art and culture (N1000-N5,000): Having fun does not mean doing anything in particular- taking a ride around your city can be as thrilling as being on a roller coaster.

Take a bus, a bicycle or your car around town and learn new places, interact with strangers and take photographs.

You can visit monuments, arts and culture hotspots like Muson, the New Afrika Shrine, and the national museum if you are in Lagos.

It does not cost much to visit these places but ensure you have extra cash in case you have to pay gate fees.

Watch football at good viewing centre (N1000): For football fans and fanatics, weekends offer an opportunity to wear your club jersey and troll rivals, if you have bragging rights.

Instead of seeing the games at home, you can instead visit a nice football viewing centre and join the frenzy for less than N1000, which covers drinks and sometimes, snacks.

Start sporting activities at home (N0): For those averse to gym (and similar) membership fees, starting a gym at home is also a good way to keep both your body and wallet fit.

You just need to get the basic gym equipment and get the best tutorials online to do-it-yourself like a pro. There is a need for caution however if you are not familiar with gym gadgets.

The same applies to other sporting activities like joining a local football club that meets only on weekends.

O

ne of the major concerns of investors before considering any form of investment is getting a relatively high return and whether or not the invested money is secure. These are two worries that the treasury bills (T-Bills) segment of the Nigeria’s fixed income market could clear, particularly with CBN’s recent regulation.

The Central Bank of Nigeria (CBN) last week said it has barred local corporates and individuals from participating in both primary and secondary activities of OMO market, as it makes extra efforts to boost credit flow to the real sector of the Nigerian economy.

OMO is a liquidity management tool used by the CBN to control the volume of money in circulation. Basically, a central bank injects or withdraws liquidity in its currency through the banks by buying or selling government bonds.

The implication of the directive is that individual investors and corporate organisations operating in the country – inclusive of non-bank financial institutions – would no longer have access to the OMO market, leaving the bond and the treasury bills markets as one of the almost no-risk investment options in Nigeria’s financial market.

Both bonds and T-Bills are fixed income instruments which guarantee returns for investors. The latter is a short-term security issued by the CBN on behalf of the federal government with less than one year maturity, while the former is long-term debt instrument issued by government, corporates or other entities with more than one year maturity period.

The CBN’s directive would lead to greater demand in T-Bills and lead to lower cost of borrowing for the federal government, according to Oluwatosin Ayanfalu, an analyst at Lagos-based Zedcrest Capital.

We chose T-Bills over bonds because of this reason coupled with the fact that OMO bills are also short-term instruments and work almost the same way as T-Bills, Increased demand on T-Bills means

lower yields on quoted papers in the secondary market. With this in mind, a list of high-yielding T-Bills quoted on the FMDQ Securities Exchange could guide investors on which of the financial instruments they can use to lock their funds.

Meanwhile, it is noteworthy that the data used in this article were obtained from FDMQ daily quotation list for Friday, October 25, and as such may not represent current trading data.

Also, yields on the quoted instruments are annualised. As a result, we used discount yield which measures the real rate of return to an investor.

Discount yield is calculated by dividing the discount (face value – market price) on the paper by its face value (worth of the paper). The result is then multiplied by the ratio of 360 to the days-to-maturity of the paper.

The 342-day paper (01-Oct-2020) currently has the longest duration in the Nigerian treasury bills market. Yield on the paper stood at 14.85 percent on Friday, this implies if you invested N100 last Friday, you would get a return of N14.85 after one year. But since the instrument is quoted in the secondary market with maturity less than a year, it simply means the real return would www.businessday.ng

drop to 12.82 percent.

Similarly, the 335-day paper which is expected to mature on 24-Sep-2020 has a yield of 14.40 percent, translating to 12.51 percent return on investment,

“

Both bonds and T-Bills are fixed

income instruments which guarantee returns for investors. The latter is a short-term security issued by the CBN on behalf of the federal government with less than one year maturity

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while the 328-day paper which maturity date of 17-Sep-2020 would probably return 12.42 percent to investors.

Yield on the 321-day paper which would mature on 10-Sep-2020 closed at 14.25 percent yield level on Friday. But investors could expect a return on 12.45 percent on the instrument if they locked in their funds at Friday’s closing price.

But the benchmark T-Bills paper with 314 days before maturity (3-Sep-2020) offers a higher yield of 14.61 percent and 12.76 percent return on investment.

Furthermore, while the yield on the 307-day paper was 13.88 percent and the 300-day paper closed at 13.83 percent yield level, both papers would return 12.22 percent to an investor.

Other T-Bills with relatively high rate of return include; benchmark 293-day bills which has a yield of 14.41 percent as at the close of Friday’s trading session. This implies the paper would return 12.70 percent of invested funds.

The 279-day T-Bills expected to due on 30-Jul-2020 has a yield of 12.80 percent, indicating it would return 11.47 percent on investment, while another benchmark bond yielding 14.18 percent for a year investment would only return 12.71 percent for the remaining 251 days to maturity.

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Monday 28 October 2019

BUSINESS DAY

Personal Finance

How to ensure hackers don’t access your financial details (1) SEGUN ADAMS

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ybersecurity is one of the biggest concerns of big institutions around the world as the need for executing transactions at the speed of thought increase reliance on technology. This problem concerns you too because the chances of having your finances jeopardized are significant even if you do not realise it.

We live in a period people readily volunteer sensitive information on social platforms like Twitter while other platforms like Facebook have intelligence that can collect or access critical data on people.

A hacker does not need to try too hard to get people to drop their bank account details on online public platforms; they only have to create threads promising giveaways and many socialmedia users fall prey.

These tips can help reduce your risk of becoming a cyber-attack victim.

Use Strong Passwords you change regularly It is almost an invitation to be hacked using passwords like 0000, 1234, abcd, or your names and date of births or that of your family, spouse or pet.

Using a minimum of eight characters including symbols like &,@,# in a nonrepetitive sequence can generate a very strong lock for your online accounts.

Your password must never be saved in any medium so it does not fall into the wrong hands.

Also, do not use the same password for all your online accounts; vary them even if slightly and do not allow your devices to remember the passwords if other people to borrow your gadgets.

Experts also advise you update your password(s) often. Some say 30 days is the ideal cycle for changing passwords.

Update your antivirus software regularly An antivirus software protects your devices from malicious attacks, but they have to be updated regularly to ensure their defence mechanism is solid.

We often dislike these softwares and procrastinate updating them because that action might require us halting a project-or a movie to restart our devices (especially computer systems).

To counter this, you should set the system to update automatically at night or whenever you would typically not be using it.

Avoid click baits, no free lunch in Freetown By nature, humans like freebies and fall easily to scams when there is a promise of a reward for doing virtually nothing.

How often do you see “$100,000 up for grabs, click me” pop-ups when you browse? Those little boxes are baits with mischievous people at the other end waiting to access information on your devices through “backdoors” they create.

You can use browsers that block adverts to reduce your chances of encountering these malicious pop-ups. It is worth mentioning that not all pop-ups are bad but it is better to err on the side of caution. www.businessday.ng

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We live in a period people readily volunteer sensitive information on social platforms like Twitter while other platforms like Facebook have intelligence that can collect or access critical data on people

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Do not open strange mails Hackers can attempt stealing information from people through emails that contain viruses.

Greeks tell of their cunning in defeating the city of Troy through a wooden horse. After unsuccessfully trying to break into the independent city of Troy for a decade, the Greeks constructed a huge wooden horse and hid some of their men inside.

The Trojans took the horse into their city as a symbol of their victory, a mistake that gave the Greek army access into Troy.

The lesson of that story remains till date and a type of virus is even named after the ancient city of Troy.

Even if history is not your thing you should get the gist and delete that spam mail (a type of mail from an unknown source, sent to many people) without opening it.

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Data

Federal government Eurobond Yields on Eurobonds fell 0.047 percent point week on week from an average of 6.58 percent when the market closed last week to 6.53 percent following buying interest in Nigeria’s Sovereign Eurobonds.

Corporate Eurobond Yields on corporate Eurobonds dipped of 0.08 percent points across all tickers week-onweek with average yield rose slightly from 5.385 percent last week to 5.305 percent.

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Monday 28 October 2019

BUSINESS DAY

Economics Businesses expect borrowing rates to rise next 12 months HOPE MOSES-ASHIKE

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igerian businesses expect borrowing rates to rise next month and the next twelve months, as the confidence indices stood at 5.1 and 6.3 points, respectively.

The rate for the current month stood at 7.5 points.

Lenders reported increased demand for corporate credit from all firm sizes in Q3 2019. They also expect increased demand from all firm sizes in the next quarter, according to the credit condition survey report of the Central Bank of Nigeria (CBN) for the third quarter 2019.

In the report, Lenders reported that the overall spreads on secured lending rates on approved new loans to households relative to Monetary Policy Rate (MPR) widened in Q3 2019, but was expected to remain unchanged in the next quarter.

The overall spreads on unsecured lending widened in Q3 2019 and were expected to widen in the next quarter.

The availability of secured

credit to households increased in Q3 2019 and was expected to increase in the next quarter. Improved market share was the major factor for the increase in secured credit.

The CBN had directed all deposit money banks to maintain a minimum LDR of 60 percent by September 30, 2019 and subsequently increased it to 65 percent with December 2019 as the new deadline.

On Friday, the CBN released the October 2019 Business Expectations Survey (BES), which was conducted from October 07-11, 2019 with a sample size of 1050 businesses nationwide.

A response rate of 97.1 per cent was achieved, and the sample covered the services, industrial, wholesale/retail trade, and construction sectors.

The respondent firms were made up of small, medium and large corporations covering both import- and export-oriented businesses.

Respondents’ outlook on the volume of total order and business activity in October 2019 remained positive, as their indices stood at 15.7 and 16.2 points, respectively.

Similarly, respondents were optimistic in their outlook on financial conditions (working capital) and average capacity utilization, as the indices stood at 11.6 and 18.7 index points, respectively.

Respondents expressed optimism on access to credit in the review month, with an index of 1.7 points. At 27.3 index points, the overall confidence index (CI) indicated respondents’ optimism on the overall macro economy in the month of October 2019. The

Week Ahead (Monday, October 28 – November 1, 2019) Week Ahead

business outlook for November 2019 showed greater confidence on the macro economy, with 59.6 index points.

The optimism on the macro economy in the current month was driven by the opinion of respondents from services (15.1 points), industrial (9.1 points), wholesale/retail trade (2.5 points) and construction (0.5 points) sectors. Similarly, the major drivers of the optimism for next month were services (32.4 points), industrial (19.9 points), wholesale/retail

trade (5.5 points) and construction (1.9 points) sectors.

Further analysis showed that businesses that are neither import- nor export-oriented (18.2points), import-oriented (4.6 points), both import- and exportoriented (3.3 points), and those that are export-related (1.0 point) drove the positive business outlook in October 2019.

However, Respondent firms identified insufficient power supply (67.3 points), high interest rate (57.6 points), unfavourable economic climate (55.9 points), financial problems (54.9 points), unclear economic laws (52.1 points), unfavourable political climate (49.1points), insufficient demand (46.5 points), competition (45.3 points) and access to credit (43.9 points), respectively, as major factors constraining business activity in the current month.

On exchange rate expectations, respondent firms expect the naira to appreciate in the current month, next month and next twelve months, as their confidence indices stood at 23.8, 36.7 and 49.5 index points, respectively.

Chart of the week

Nigeria sees improvement on ease of doing business

Week Ahead (Monday, 8th April – Friday, 12th April, 2019) Commodity

Oil: Brent prices traded a little above $60 per barrel in the previous week. The commodity settled at $61.89 at 8:00 PM Nigerian time on Friday driven by lower inventory, positive reports that OPEC will consider deeper oil cuts, and geopolitical uncertainty.

Stock The Nigerian equities market declined further into the negative territory last week to book the fourth consecutive week of losses in the month of October. The NSE All Share Index shed 0.38 percent during the week to hit 26,348.73 point, while all sector indices closed negative.

The earning session has started and some companies have realised their financial results for the nine-months 2019. More companies are expected to release their earnings figures on the NSE this week.

Fixed Income The bond market maintained its bullish run to close the week. The bullish trend was supported by local demand as investors reacted to the new CBN’s OMO regulations. The apex bank had barred local corporates and individuals from participating in both primary and secondary activities of OMO market, as it makes extra efforts to boost credit flow to the real sector of the Nigerian economy.

With this new pronouncement, only foreign corporates and institutional money managers are allowed to participate in the OMO market. Bonds would likely remain bullish this week following CBN’s OMO restriction.

Also, there are expectations that yields on T-Bills would drop this week as investors seek alternative investment options and with primary market auction scheduled for the week.

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From its 146th position in the previous ranking, Nigeria has moved up 15 places to rank 131 out of 190 nations in the latest World Bank’s ease of doing business ranking released Thursday.

The country scored 56.9 as against 52.9 it scored in the previous ranking.

Doing Business acknowledges the 10 economies that improved the most on the ease of doing business after implementing regulatory reforms. In Doing Business 2020, the 10 top improvers were Saudi Arabia, Jordan, Togo, Bahrain, Tajikistan, Pakistan, Kuwait, China, India, and Nigeria.

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Monday 28 October 2019

FT

BUSINESS DAY

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FINANCIAL TIMES

World Business Newspaper

DAVID PILLING IN LONDON AND JOSEPH COTTERILL IN JOHANNESBURG

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resident Filipe Nyusi and his Mozambique Liberation Front (Frelimo) party have won a landslide victory in the gas-rich southern African nation in an election the opposition branded a “mega fraud”.

The stakes were high in presidential, parliamentary and provincial polls marred by violence and overshadowed by the prospect of tens of billions of dollars in gas investment pouring into a country with a per capita income of below $1,000 in nominal terms.

French oil group Total is heading a $25bn liquefied natural gas project agreed this year and ExxonMobil is expected to announce its intention to develop a similar-sized project in the next few months.

The thumping victory, in which Mr Nyusi won 73 per cent of the vote and the opposition Renamo party failed to win a single of the country’s 10 provinces, will test a peace treaty signed between the two former civil war foes as recently as August.

Going into the election, Renamo had expected to win at least two provinces after a constitutional change that devolved power by allowing provincial governors to be elected directly for the first time.

The electoral commission also declared that, in the 250-seat national assembly, Frelimo had won 184 seats against 60 for Renamo and just six for the country’s third force, the Democratic Movement of Mozambique. With more than a two-thirds majority, Frelimo has the power to change the constitu-

Mozambique’s Nyusi wins landslide election victory

President tightens grip on power in polls that opposition branded a ‘mega fraud’

France has been arguing that a long extension could reduce the pressure on Westminster to decide in favour of the Brexit deal forged with EU negotiator Michel Barnier, above © Reuters

tion, which limits presidents to two terms in office.

Ossufo Momade, the leader of Renamo, last week called the election a “mega fraud” and urged his supporters not to accept the result.

His disavowal of the process echoes accusations of electoral fraud

this year in the Democratic Republic of Congo, Malawi and elsewhere, but is unlikely to prevent President Nyusi from consolidating what had been a fragile grip on power.

The campaign was marred by several incidents of violence and claims by election monitors that

Frelimo, which has ruled the country since independence in 1975, had abused its incumbent status.

An observer mission sent by the EU said the election had been held in “a climate of fear” in which the ruling party had used state resources to mobilise campaign funds, logistical

support and advertising.

The US embassy also reported what it said were several irregularities, including suspicious vote counts.

Analysts for Mozambique’s Centre for Public Integrity, a civic watchdog, estimated that hundreds of thousands of votes for Mr Nyusi were faked.

Frelimo has a long history of alleged vote-rigging but “this election was different” in the level of co-ordination, said Joe Hanlon, a veteran Mozambique watcher who compiled poll analysis for the watchdog.

Frelimo had kept a tight grip on the process through violence and intimidation and “it does put the peace accord at risk,” Mr Hanlon said.

Activists had raised the alarm before the polls about thousands of ‘ghost’ voters on the rolls in a Frelimo stronghold region in particular. On the eve of the poll, police were implicated in the shooting of a senior local observer in the southern Gaza province.

Mozambique has been seeking to repair its relations with the international community since 2016 when its government revealed that it had secretly borrowed $2bn for a tuna fishing fleet that was never used.

Three bailed as UK truck deaths Argentines expected to vote Peronists back in to power probe focuses on Vietnam Polls say Alberto Fernández will replace Mauricio Macri as economic crisis bites Evidence mounts that 39 victims were from a concentrated area of the country BENEDICT MANDER IN BUENOS AIRES

ROBERT WRIGHT IN LONDON

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ssex Police on Sunday released on bail three people arrested in connection with the discovery of 39 bodies in a truck trailer, as investigations into one of the UK’s worst human trafficking tragedies focus on the likelihood most of the dead were from Vietnam.

The release of those arrested on Friday — a 38-year-old man and 38-year-old woman both detained in Warrington and a 46-year-old man from Northern Ireland arrested at Stansted airport — came a day after the force laid the first charges in the investigation. Maurice Robinson, 25, from Craigavon, who was driving the truck hauling the trailer, was charged with 39 counts of manslaughter, conspiracy to traffic people, conspiracy to assist unlawful immigration and money laundering.

Essex Police made efforts at the weekend to gain the confidence of the Vietnamese community both in the UK and people in Vietnam as evidence mounted that the 31 men and eight women were from a concentrated area in the centre of the country.

VNExpress, a state-owned news outlet, on Saturday reported that 12 more families from Ha Tinh and Nghe An provinces had reported fears that relatives were among the dead. On Friday, the family of Pham Thi Tra My, a 26-year-old from Ha Tinh, released text messages she had apparently sent from inside the trailer reporting that she could not breathe.

The Sun on Sunday, a UK tabloid, reported that as many as 25 of the dead may have come from the village of Yen Thanh in Nghe An. On Sunday, Essex Police declined to comment on the reports and there was no immediate response from Vietnam’s embassy in London.

There are well-established networks for bringing would-be migrants from Vietnam to work in the UK in a variety of roles, particularly in nail bars and illegal cannabis factories. Pham Thi Tra My’s family told reporters they had paid smugglers £30,000 and that she was planning to work in a nail bar.

The people released on Sunday, who have not been officially identified, had all been questioned on suspicion of manslaughter and conspiracy to traffic people. www.businessday.ng

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rgentines head to the polls on Sunday in an election expected to return to power the populist Peronist party, which has governed Latin America’s thirdlargest economy for all but six of the past 30 years.

Polls predict a comfortable victory for Alberto Fernández, putting an end to the centre-right Mauricio Macri’s four-year presidency.

Argentina has descended into another economic crisis and is on the brink of its ninth debt default.

Mr Fernández, a 60-year-old former cabinet chief from 2003 to 2008, and his running mate and former boss, the populist expresident Cristina Fernández de Kirchner, who is no relation, won primaries in August by a surprising 16-point margin, with 48 per cent of the vote.

Since then, Mr Fernández has consolidated his position as the frontrunner. The popularity of the market-friendly Mr Macri has suffered from a more than 30 per cent devaluation of the peso after the primaries, as investors took fright at the prospect of a return of the populist economic policies of the past.

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The winner needs at least 45 per cent of votes, or alternatively 40 per cent with a 10-point lead over the runner-up, to avoid a runoff vote in late November.

“It’s practically impossible for the vote to go to a ballotage,” said Lucas Romero, director of Synopsis, a local pollster, referring to a secound-round vote. “The only way that could happen is if Alberto Fernández loses votes, which is hard to imagine given that more people vote in these elections” compared with the primaries.

If 2.5m more voters turn out, as is expected, Mr Fernández would need to receive just 5 per cent of the extra votes for Mr Macri to force a runoff vote, argued Mr Romero. “That’s extremely difficult.”

While six candidates are competing for the presidency, at stake in the elections are also half of the seats in the lower house of Congress and a third of the Senate, after midterm congressional elections in 2017 saw Mr Macri’s ruling coalition impose a decisive victory on the then divided Peronist movement.

But a currency crisis last year, which forced Argentina to seek a record $57bn bailout from the IMF, brought a reversal in the reformist president’s fortunes. The Peronists

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had managed to reunite after the firebrand Ms Fernández took the unexpected decision of stepping aside from the presidential race and inviting her more moderate namesake to run in her place.

On the other side of the River Plate, Uruguay also holds the first round of its presidential elections on Sunday, a race which is expected to go to a second round given much tighter competition.

While Argentina could see a return to power for the left, the opposite is expected to happen in Uruguay, where the ruling centreleft Broad Front coalition has been in power since 2005. Polls suggest that a victory for the opposition frontrunner, the market-friendly Luis Lacalle Pou, over the Broad Front’s Daniel Martínez is the most likely outcome.

Whoever wins in Argentina, Mr Macri is on course to make history by becoming the first non-Peronist leader to complete their presidential term in about a century.

Since the return of democracy in 1983, Raúl Alfonsín quit power amid hyperinflation a few months before his term ended in 1989, while in 2001 Fernando de la Rúa’s presidency was cut short after just two years amid a financial collapse and the biggest sovereign debt default in history at the time.

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Monday 28 October 2019

BUSINESS DAY

FT

NATIONAL NEWS

Brazil Congress to push ahead with economic and tax reform Rodgrigo Maia says he has high hopes for pace of change after pension victory JONATHAN WHEATLEY AND MICHAEL STOTT IN LONDON

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razil will push ahead with its ambitious economic reform programme following the approval last week of landmark pension changes, Rodrigo Maia, speaker of the lower house of Congress, told the Financial Times.

“We are in by far the most difficult recovery from any recession since the 1980s,” Mr Maia said during an interview in London. “The pension reform was a great result but the next steps will be key.”

The first priority will be an overhaul of Brazil’s bloated public sector, followed by tax reform. He said there was enough support in Congress for the first package to secure approval as early as March next year.

“The Brazilian people see the state as too expensive, too authoritarian and benefiting too few people,” he said. “It is true. The state has been created over the past 30 years to benefit specific lobby groups rather than ordinary citizens.”

Mr Maia played a central role in steering the pension reform through Brazil’s fractious lower house. A member of the centre-right Democrats party, he helped secure a required three-fifths majority despite disagreements between supporters of Jair Bolsonaro, the rightwing president in office since January, and those of the leftwing Worker’s Party (PT).

Despite his support for the reform programme, however, he has often been in dispute with Mr Bolsonaro and his scandal-prone inner circle, calling them a “crisis factory”.

Brazil’s economy contracted by more than 7 per cent in the recession of 2015 and 2016 and has struggled to grow by more than 1 per cent a year since then.

Underpinning Mr Maia’s optimism over the pace of future reform was a change in outlook among members of both houses of Congress, from pursuing narrow personal interests to transforming the state in order to release money for investment in productive activity.

“It’s investment that wins votes,” he said, rather than handing out public sector jobs to friends and supporters.

Congress would concentrate on driving forward the economic reform plan, rather than the conservative “values” agenda proposed by Mr Bolsonaro.

Mr Maia noted that Congress had already watered down or rejected several measures proposed by Mr Bolsonaro and his supporters, such as a relaxation of gun controls and a tightening of government secrecy.

He said a controversial proposal that would justify the killing of suspects by police officers acting under the influence of “fear, surprise or violent emotion” would not get through Congress.

Mr Bolsonaro’s sudden rise to power last year was followed by a period of turbulent relations with

Congress in the first months of his presidency. Squabbling among his supporters has festered since and escalated in recent weeks. Mr Maia said Congress would pursue its own course, unaffected by the president’s power struggles.

“When Bolsonaro began to fight with Congress [early in his presidency], a lot of our members thought we should make the government unviable,” Mr Maia said. “Instead, we have kept the economic plan on its feet and disagreed with the values agenda.”

Mr Maia has been praised for his political skills, earning the respect of lawmakers across Brazil’s fragmented legislature composed of almost 30 parties with ill-defined ideologies. One political opponent on the left described him “the right man for the dirty job” of pushing the pension reform through the lower house.

As speaker of the house, he decides which bills will come up for debate. With the executive branch weakened by infighting, he has been able to piece together a coalition of pro-reform legislators.

“It is appropriate to have a coalition government,” he said. “Even those [in Congress] who are against Bolsonaro are not against the reforms.”

Mr Maia smiled at the suggestion that Brazil was operating under a parliamentary rather than a presidential system, and declined to rule out running for the presidency himself one day.

However, despite his success as speaker and his membership of one of Brazil’s best-known political families — his father served three terms as mayor of Rio — he may lack the charisma needed for election to higher office. An attempt to succeed his father as Rio’s mayor in 2012 ended with just 3 per cent of the vote.

Mr Maia stressed he was a force for continuity. The pensions reform approved last week was based on one proposed by the previous government in 2017 and is similar in outline to proposals made in the mid-1990s.

Despite his support for the programme laid out by Paulo Guedes, the economy “superminister”, Mr Maia noted that lawmakers had pulled back from approving the more radical elements of pension reform inspired by the Chicago school of economics of which Mr Guedes is a disciple.

“Congress is not 100 per cent in line with the Chicago school,” he said.

But there are limits to Mr Maia’s power. Many reforms also depend on the Senate, whose president, Daví Alcolumbre, is less willing to press ahead with measures like the privatisation of Eletrobras, the state electric utility. Mr Maia said there was no point in pushing for its sale — essential, he argued, to deliver the investment the sector urgently needs — before the Senate comes on board. www.businessday.ng

Abu Bakr al-Baghdadi in Iraq in 2014 © Getty

Isis leader Abu Bakr al-Baghdadi killed in US raid in Syria

Trump confirms leader of jihadi group was targeted in commando operation KADHIM SHUBBER IN WASHINGTON AND HEBA SALEH IN CAIRO

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bu Bakr al-Baghdadi, the leader of the militant group Isis, was killed on Saturday in a US special forces raid in north-western Syria, President Donald Trump announced from the White House on Sunday.

“The United States brought the world’s number one terrorist leader to justice,” Mr Trump said at a televised press conference.

“Abu Bakr al-Baghdadi is dead.”

The killing of the militant leader, who for years unleashed terror across Syria, Iraq and further afield, came just weeks after Mr Trump faced bipartisan criticism for withdrawing US forces from north-east Syria and allowing Turkey to invade.

Opponents of the pullout say it betrayed the Syrian Kurds who had been US allies in the fight

against Isis and that it could allow the jihadi group to surge back after its defeat and expulsion from most of the territory it held in Syria and Iraq.

Mr Trump said Baghdadi was the target of a commando operation in Idlib province, which borders Turkey in north-west Syria.

Though analysts had viewed the area as too hostile for the Isis leader, Mr Trump said Baghdadi had been attempting to rebuild the terror group from there. Idlib is dominated by Hayat Tahrir al-Sham, an al-Qaeda linked group that has previously clashed with Isis.

The US president said the operations had been weeks in the planning and said the Isis leader was killed after trying to flee US forces in a tunnel “whimpering and crying and screaming all the way”.

Baghdadi, accompanied by three of his children, detonated a suicide vest, Mr Trump said,

adding that no US personnel, other than a dog, were injured.

“His body was mutilated by the blast,” said the US president.

“The tunnel had caved in on it, in addition.”

However, Russia’s defence ministry cast doubt on the operation’s success and said its forces had not provided the US any assistance.

“The escalating number of direct participants and countries that supposedly took part in this ‘operation’, each one with completely contradictory details, justifiably raises questions and doubts about whether it happened, never mind succeeded,” said Igor Konashenkov, Russia’s army spokesman, according to Interfax.

Russia did not observe any US air strikes near Idlib on Saturday and denied that it had helped the operation, Mr Konashenkov added.

Iraq protests turn deadly as more than 60 killed in clashes Hundreds continue to demonstrate in Baghdad in spite of crackdown by authorities HEBA SALEH IN CAIRO, AND NEWS AGENCIES

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undreds of Iraqis protested in central Baghdad on Sunday in defiance of a crackdown by the authorities that killed scores of people over the weekend.

Security forces fired tear gas across barricades erected by protesters on a bridge leading to the fortified Green Zone which houses government offices and diplomatic missions, according to Reuters news agency.

More than 60 people were killed during demonstrations on Friday and Saturday which drew thousands of protesters and led to clashes with the security services and militia groups. It brings the death toll from protests this month

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to about 220.

Reuters cited security sources as saying that elite counter-terrorism forces had been deployed to Baghdad and given instructions to “use all necessary measures” to end the protests.

It also reported that counterterrorism forces beat and arrested dozens of protesters in the southern city of Nasiriya on Saturday night.

This is the second flare up of protests in October after an explosion of popular anger against a regime held responsible for rising poverty, corruption and unemployment that lasted several days earlier in the month. The unrest started in Baghdad but quickly spread to the Shia-majority south of the country where, reports say, most of the @Businessdayng

deaths have taken place.

The security services used curfews, internet shutdowns and live ammunition to quell the earlier protests, killing about 150 people and wounding thousands. A government-appointed official inquiry later concluded the authorities had used excessive force and recommended the firing of security chiefs. Eight members of the security services were also killed in the clashes.

The civil unrest, which transcends sectarian divisions between Shia and Sunni Muslims, represents the biggest challenge faced so far by the government of Adel Abdul Mahdi, the prime minister, an independent who emerged as a compromise candidate after elections last year.

Monday 28 October 2019

BUSINESS DAY

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FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Virgin Galactic shares start countdown to IPO Sir Richard Branson’s vehicle beats billionaire rivals in market debut space race RICHARD HENDERSON IN NEW YORK AND MILES KRUPPA IN SAN FRANCISCO

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n Monday public investors will have their first chance to buy stock in a space tourism venture when Sir Richard Branson’s Virgin Galactic lists on the New York Stock Exchange.

The company’s shares will begin trading after it raised $800m in a deal with Social Capital Hedosophia Holdings, a cash shell begun by former Facebook executive Chamath Palihapitiya. The arrangement, attributing an enterprise value of $1.5bn to the company, has allowed Virgin Galactic to raise capital while sidestepping the traditional IPO process.

Virgin Galactic’s public debut marks a key moment in Sir Richard’s wager that wealthy individuals will pay top dollar for recreational space flights, an area that has attracted fellow billionaires Jeff Bezos and Elon Musk.

The company has attracted 600 customers who have pledged to pay up to $250,000 to be sent into space, including Justin Bieber and Leonardo DiCaprio.

Virgin Galactic has not yet launched a commercial flight for paying customers. The company projected it would lose money on $31m of revenues next year but reach positive earnings in 2021, assuming the launch of 115 flights generating revenues of $210m.

Although listed companies like Boeing and Lockheed Martin are involved in space flight, Virgin Galactic will be the first to specifically focus on space tourism.

The listing comes during a turbulent period for high-profile companies entering public markets.

Shares in Uber are down nearly 30

per cent since its May listing, while shares in its ride-hailing rival Lyft have lost nearly 40 per cent of their value since their March debut.

“These are tough times in the IPO market,” said Matt Kennedy, senior IPO strategist for Renaissance Capital. “If investors are not making money in the IPO market that makes everyone more cautious.”

The space tourism sector offers risk and excitement — for both investors and consumers.

“Anybody who signs up to be a space tourist is taking a risk with their own personal lives — it’s not just risky from a financial point of view,” says Laura Seward Forczyk, founder of the space sector consulting firm Astralytical.

Virgin Galactic aimed to launch commercial flights by 2009 but has faced a series of setbacks, including the death of a pilot in a 2014 test flight.

But in December, a test flight reached the edge of space for the first time, placing Virgin Galactic ahead of Mr Musk’s SpaceX and Mr Bezos’ Blue Origin, which both aim to launch space tourism operations but have yet to send people to space in commercial vehicles.

Earlier this month, Boeing agreed to invest $20m from its startup investment arm HorizonX Ventures into the group when it lists.

The listing will also test Mr Palihapitiya’s vision of reinventing the IPO process. Mr Palihapitiya has said he plans to start more special purpose acquisition companies (spacs) helping tech companies go public.

“It would require different sizes and different vehicles, but absolutely, we would do it again,” he told the FT in July.

Additional reporting by Andrew Edgecliffe-Johnson

Responsible capitalism requires new standards Broader sense of purpose is welcome but needs to be measured THE EDITORIAL BOARD

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einventing capitalism for the long-term is a far from easy task. There is a growing acceptance among business leaders of the need to broaden the pursuit of shareholder value to one that is based on inclusivity, sustainability and purpose. This newspaper has welcomed the direction. Some attempts to confront the problem, however, have been only skin deep.

Adding the label “purpose” on to existing corporate models will not be enough. Companies and policymakers should not be afraid to explore whether the change should start at the foundations of the business world, and whether new corporate structures are needed to take capitalism in this new direction.

Plenty of models already exist, from co-operatives and mutuals to employee partnerships, trusts and foundations. Corporate forms

are, of course, no panacea for mismanagement — but many of these other models have become starved of attention by the dispersed share ownership model of the listed company. The danger is if countries tend towards a corporate monoculture.

Policymakers should encourage a plurality of models. Boards too should remain open to potential changes of corporate form — the choice should not simply be a binary one of going public through a listing on the stock market or remaining private. In the US, the benefit corporation — with a mandate to benefit all stakeholders — is gaining momentum. A recent example of what can be done is that of Julian Richer, founder of the audio and entertainment chain Richer Sounds, who has handed control of the business to staff. Not many company owners willingly give away stock to employees but it underlines that corporate form need not be static. www.businessday.ng

Federal Reserve chairman Jay Powell has faced a growing divide about the wisdom of interest rate cuts, as well as their timing © AP

Federal Reserve faces decision whether to signal pause to rate cuts Jay Powell expected to announce another ‘insurance’ cut this week JAMES POLITI IN WASHINGTON AND COLBY SMITH AND JENNIFER ABLAN IN NEW YORK

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he Federal Reserve faces the thorny decision of whether to signal an interruption to its monetary easing after it delivers what is widely expected to be a third consecutive cut to its main interest rate this week.

Jay Powell, the Fed chairman, has described the rate-cutting drive he has overseen since July as a limited “mid-cycle adjustment” to insulate a resilient American economy from the impact of President Donald Trump’s trade wars and the global slowdown.

If the Federal Open Market Committee presses ahead with a new rate reduction on Wednesday afternoon, it will have already notched up 75 basis points of monetary stimulus this year — and to some economists and Fed officials that should be sufficient to accomplish the goal.

“I think they will end up cutting another 25 basis points [this week]

and then pause for the rest of this year,” said Scott Anderson, chief economist at Bank of the West.

But a drumbeat of relatively soft economic data, and fears of a negative market reaction, could make Mr Powell and other Fed policymakers wary of indicating that this round of “insurance” cuts is already over. A new truce in the US-China trade war is only tentative. Even if it is signed

by Mr Trump and Xi Jinping, China’s president, in Chile next month, many of the tariffs and the tensions in transpacific trade are set to linger.

“The Fed runs the risk of an unnecessary tightening of financial conditions. We are hopeful that Chair Powell avoids such a mistake,” said Joe Lavorgna, chief economist for the Americas at Natixis in New York.

All eyes on Wednesday will be on whether the FOMC statement changes it pledge to “act as appropriate to sustain the expansion” — an indicator of future rate cuts — to wording that appears less committed to further easing.

“Keeping the forward guidance as is is the path of least resistance.

If they take it out they are being unintentionally hawkish,” said Michelle Meyer, an economist at Bank of America Merrill Lynch. “The data now is softening so I think they have to give some nod in that direction.”

Mr Powell’s comments at the subsequent press conference will also be key. The Fed chairman has faced a growing divide on the FOMC about the wisdom of interest rate cuts, as well as their timing, and that split risks widening in the coming months as the central bank decides whether to plough ahead with rate cuts or stand pat.

There could be some loss of credibility for the Fed, if having indicated that it was committed to a limited phase of monetary easing, it looked set to move well beyond that into a full-blown easing cycle.

“We expect a slightly hawkish tone, with Powell alluding to a baseline of unchanged policy but emphasising data-dependence and the ability to respond quickly if the outlook deteriorates,” Spencer Hill, an economist at Goldman Sachs, wrote in a note called “3 and out?”.

Rio chief looks beyond mining’s ‘big is beautiful’ paradigm Larger, riskier projects will come under more scrutiny, says Jean-Sébastien Jacques NEIL HUME, NATURAL RESOURCES EDITOR

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ig will not always be beautiful in the mining industry, which will need to find new ways to grow profitably in the next decade, according to Rio Tinto’s chief executive.

Jean-Sébastien Jacques said the trend toward bigger mines would not guarantee success in the future.

Instead, it would be the companies focused on improving environmental impact, partnerships and technology that would thrive in the 2020s.

“I’m not saying ‘big is beautiful’ cannot work, but it won’t be the key enabler of success in the future,” said Mr Jacques, speaking in London ahead of LME Week, the biggest annual gathering of the metals industry.

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For decades, the industry has responded to growing global demand and the depletion of existing mines by developing ever-larger projects.

However, miners are facing increased pressure from investors, host governments and local communities to curb their environmental damage while delivering profits to their stakeholders. At the same time predictions that demand in China, the world’s biggest consumer of raw materials, is set to slacken has led to forecasts that demand for some metals and miners will flatline or decline.

Mr Jacques’ comments show how these concerns are shaping the thinking of leading mining companies. Rio competes with Vale as the world’s biggest producers of iron ore and is the leading supplier of aluminium and copper. @Businessdayng

Rather than taking on “big bang” projects, miners need to consider developing small projects that could generate quicker returns for shareholders, local communities and governments, said Mr Jacques.

“They [big projects] take too long and the risk profile is too high,” he said.

One of the biggest problems miners face in developing their largest projects is the amount of time it takes to pay off construction costs, say analysts.

In the case of Rio’s troubled underground copper mine in the Gobi desert, Mongolia’s government — which is also a shareholder — will have to wait until 2030 at the earliest before it receives any dividends.

This has led to calls from members of parliament to change the terms of the investment agreement that underpins the project.

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Monday 28 October 2019

BUSINESS DAY

ANALYSIS

FT

WeWork saga shows need for ‘unicorn’ boards to grab the reins Lack of independent voices at private companies leaves investor and employee interests at odds ANDREW EDGECLIFFE-JOHNSON

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here is plenty of blame to go around for the debacle that in two dizzying months took WeWork from expecting to raise billions of dollars in an initial public offering to counting how many weeks’ cash it had left.

Some have laid it at the many doors of Adam Neumann, the co-founder known for his consciousness-elevating conflicts of interest. Others have pointed at SoftBank for assigning a $47bn valuation to such a determinedly lossmaking company, or the bankers who seemed so keen to put the greater fool theory into practice.

But as David Erickson, a senior finance fellow at Wharton business school, puts it, the problem with blaming the bankers “is that you don’t get hired for telling somebody that their baby’s ugly”.

So we should spare a moment to remember the board, which has a responsibility to provide the kind of ugly-baby feedback that could have spared WeWork some of its agonies.

Crowded out by such largerthan-life characters as Mr Neumann and SoftBank’s Masayoshi Son, WeWork’s directors have had only bit parts in this drama.

Their uniform maleness was noticed only when investors absorbed the company’s normflouting listing document.

Employees, landlords and other WeWork stakeholders have heard little from the board, except for canned statements from Benchmark Capital’s Bruce

Dunlevie and former Coach chairman Lew Frankfort thanking Mr Neumann for his leadership when he ceded his chief executive position last month.

Even then, Mr Frankfort raved that “Adam is that very rare breed of entrepreneur who has the vision and drive to conceptualise an enormous business opportunity and then attack it relentlessly”.

A month later, they and other directors signed up to a SoftBank rescue. Mr Neumann surrendered his chairmanship, leaving him to contribute his vision as a mere board observer — albeit one with a $185m consultancy fee, a $500m loan facility and a chance to tender $1bn of the stock he had not already sold pre-IPO. Without hearing directors’ accounts of what was going on in WeWork’s boardroom before its crisis, outsiders must judge from what they can see. That includes a definition of corporate governance that was extraordinarily accommodating to Mr Neumann, a willingness to approve accounting novelties such as “community-adjusted ebitda” and a tolerance of the profligate spending that appeared to accelerate into the company’s cash crunch.

Few WeWork directors can claim to be independent. Mr Dunlevie’s Benchmark fund was one of the company’s earliest investors — so early it is still in the money. John Zhao represents Hony Capital, WeWork’s partner in China. And both Ron Fisher and Mark Schwartz have ties to SoftBank.

America’s e-brokerages scramble to protect margins amid fee war

Industry converges around Charles Schwab’s move to cut trading commissions from $4.95 to zero RICHARD HENDERSON IN NEW YORK

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hen Charles Schwab scrapped commissions to trade US stocks this month, cutting its fee from $4.95 to zero, it opened up a new front in a gruelling price war.

Schwab stock dropped a tenth on the day but its rivals, who hastily matched the move of the San Francisco-based group, suffered even more. TD Ameritrade shares lost a quarter of their value, while E*Trade lost 16 per cent. By the end of the week billions of dollars had been wiped from the combined value of the trio.

The decision by Schwab — America’s biggest listed online brokerage, with more than 10m active accounts — to eliminate fees for trading stocks, exchange traded funds and listed options may prove smart, over time. Not only did it hurt its nearest rivals, which derive a bigger share of their revenues from trading commissions, but the

firm laid down a direct challenge to no-cost upstarts such as Robinhood, a much-hyped Silicon Valley “unicorn,” that have chipped away at the incumbents.

Schwab did not want to “fall into the trap that a myriad of other firms in a variety of industries have fallen into, and wait too long to respond to new entrants”, said its chief financial officer, Peter Crawford.

But the key problem now for Schwab and others: how to protect margins. Fee cuts by the online brokers come at a time when they are facing drops in income from falling interest rates, which sap the money they can make from the core business of holding cash on behalf of customers.

Meanwhile, other income streams are under apparently relentless pressure. Across the financial services industry, where it can be hard to distinguish between commoditised products, customers are increasingly reluctant to pay up for anything. www.businessday.ng

Chef Fergus Henderson: ‘fashion and food don’t go hand in hand’ The pioneer of ‘nose to tail’ eating on ‘Gucci food’, Jamie Oliver — and his surprising LA outpost NATALIE WHITTLE

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hen I arrive at St John for lunch with Fergus Henderson, it is 12.30pm on a Monday, the most bread-and-butter day of the week.

I’ve walked to the famous “nose to tail” restaurant through the coolness of London’s Smithfield Market, where meat has been traded in one form or other (dead or alive) since the 12th century. Smithfield did some pretty hard medieval partying — jousting, drinking and cutting up traitors — and, centuries later, it still has a faintly hungover air. There is a similar mood as I enter the old smokehouse on St John Street, as if a punishing grade of gluttony was achieved at the weekend.

Henderson is already planted at the bar, half his considerable gravity leaning into the zinc counter, the other on to a walking stick. “So, this interview is ‘Have A Lunch With Fergus’,” he summarises thoughtfully after our hellos, in a soft smoker’s voice that emits from small, mischievous lips. “Would you like a glass of champagne to prepare yourself?” he asks, as if this would be a prudent thing to do.

The dining philosophy of St John, now in its 25th year of business, is a belief in food and drink’s ability to enact subtle and sometimes vital changes of spirit — to be “nutriment that feeds the mind”, as Jonathan Swift put it — but also riotously good fun, as per medieval tradition.

Henderson once told me that a tomato salad “saved his life” during a gastronomic exploration of Barcelona with his sister; today he recalls an “epiphany” that came via a glass of potent Armagnac. Eating well is partly ordering well, and knowing what you need.

As befits his size, Henderson is very much a chef’s chef, revered globally by industry peers for his simple but irresistible language of British ingredients, which he pursued at a time when most professional kitchens were more intent

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on dicing carrots. His childhood household, living in 1970s Chelsea and then Soho, valued the power of the dinner table to knit a family together: “Both my parents were my education in food,” he says. “Mum taught me how to cook, dad taught me how to eat.”

When Henderson decided to quit architecture, his parents’ profession, after studying at the Architectural Association, his father gave his blessing, on one condition: “Dad said, ‘If you’re going to be a chef, be a good one’. I think I’ve turned out to be an OK one.”

“OK” is a modest report from the man who arguably rescued British meat from the lowly rank it had sunk to by the 1990s, sliced at lacklustre roast dinners in pubs and carveries, or sold cheaply at supermarkets via impersonal, industrial farms.

Against this backdrop, St John’s credo of “nose to tail” eating became fashionable for its novelty, daring the customer to try trotter paste on toast or pig’s head pie, and to appreciate what would otherwise go to waste.

“My hope is that St John is an institution, in the good sense of the word,” he says as we move into the dining room, gathering up the champagne. “Like a chemist or a cinema, something you need. Feeding you, watering you and dining you.” Glancing around, I see signs of an orderly institution at work, from the note on the menu reminding customers to order whole suckling pig a week in advance, to the waiters shuttling discreetly between tables in white drill jackets. Though he is the “face” of the enterprise, Henderson keeps a low profile. “I’m fairly Teflon to fame,” he says. “Fooo, fooo!” he adds, gesturing something flying over his head.

We are among the first customers to sit down and unfold our napkins.

Henderson’s speech is at times hard to make out, the result of early onset Parkinson’s and its deep-brain implant treatment — so for clearer acoustics we sit side by side, as if banqueting. He says his consultant is “pleased with him” for his current bill of health, and he has a healthy, tanned look from a week at a friend’s villa in Greece, a holiday he describes as: “a @Businessdayng

nice pool . . . boats . . . grilled fish . . . roast kid. All the things.” Lunch, he says as we study the menu, is “very much my favourite meal. Lunch is a wonderful thing. The strange thing is the more people tut over [a long] lunch, the more delicious. The more tuts the better.”

A waiter brings warm sliced bread and a pat of yolk-coloured butter, and I decide it’s a good idea to let Henderson order for us: the crayfish and aioli special, deep-fried salt cod to share, then brill, roast Tamworth, broad beans, potatoes and greens, a bottle of Trimbach pinot noir and an ice bucket. “Now we can relax,” he says confidently. When I tell him that FT readers frequently bemoan the increasing sobriety of the “Have a Lunch with . . . ” encounters, his face brightens with delight. “Let’s give the readers what they want,” he says, as the Trimbach arrives and is poured.

Henderson likes to eat here almost every day, “which is a good thing and a bad thing. Bad for my tummy. It’s bigger than I wish it was.”

When I ask if this is inevitable, there’s a flash of spikiness. “You’re not saying our food is unhealthy?” he says defensively, and I find myself denying the accusation, even if the St John diet might be hard on the waistline.

We discuss the rise of the vegans, and he says he has no objections, other than “the smugness”. “How do you tell someone is a vegan?” he asks. Answer: “They tell you.” This is a stock Fergus joke, but he chuckles gently at it, and adds, “We always have something vegan up our sleeve on the menu. Many vegans say we’re their favourite restaurant.”

Henderson’s daily presence is a form of quality control now that Parkinson’s has separated him from the kitchen. The menu changes twice a day, and he keeps an eye on its delivery. “It’s hard for chefs if menus change all the time, but it keeps you on your toes. St John is nature-led.

Runner beans come in, fish changes all the time [from boats off the east coast], nature starts hurling birds at us. Nature and time are sort of the two things that have affected us ever since we began.”

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news

World Bank reports over 400m Africans live on less than $2 a day MIKE OCHONMA

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he World Bank has shown that more than a third of the population in sub-Saharan Africa (SSA) live below the poverty line according to a recent report it published inside Africa’s Pulse report. It urges governments in the continent to put in place policies that will quickly address the situation before it gets out of hand.

The Pulse report for Africa shows women have the ability to lead the charge for poverty eradication, as 40 percent of large-scale agriculture labourers on the continent are women.

However, there are still large and persistent gender gaps in productivity and earnings; and they come with significant economic cost. For instance, women produce 33 percent less per hectare of land than men do, and profits earned by female entrepreneurs are 34 percent lower than those of

male entrepreneurs.

Some recommendations the report made to close this gap include building skills for women that go beyond traditional training: including gender-sensitive agricultural extension services; socio-emotional skills training for women in business; and information to support occupational changes across sectors.

The second report is in the recommendations is in securing women’s land rights through the launch of land formalisation programmes; co-titling of land rights in the names of both spouses; and formalisation of existing customary rights will help close the gap.

It also recommended on the need to address social norms that constrain women’s economic opportunities, especially in the areas of appropriate types of work for men and women; distribution of domestic labour; and resource management within households.

According to the report, as of 2015 (the most recent data on the topic), more than 416 million people in Africa lived on less than $1.90 a day, representing an increase of more than 33 percentage points since 1990, when the region’s poor was around 278 million.

More than 82 percent, the report states, live in rural areas with smallholder farming as their predominant profession; meaning if policies to eradicate poverty are targetted at rural folks, there will be a drastic reduction of poverty on the continent.

“Accelerating poverty-reduction in Africa requires a series of actions which pursue four principles of engagement.

First, implement a policy agenda that creates economic opportunities for the poor in the sectors and places where they live and work, or helps them connect with income earning opportunities elsewhere and at the same time reduces their exposure to the many risks they face.

Lagos to employ art as healing therapy in health facilities … inaugurates Art4Life Steering Committee ANTHONIA OBOKOH

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he Lagos State government at the weekend inaugurated a 10-member committee, ‘Art4Life Steering Committee,’ to oversee the use of art as healing therapy in health facilities across the state.

Akin Abayomi, commissioner for health, who inaugurated the committee in his office at Alausa-Ikeja, explained that the committee would drive the Art4life project, an initiative of the Ministry of Health aimed at using art to create a soft and compassionate environment to aid the process of healing for patients in health facilities.

“The Art4Life project marks a new dimension in how we manage healthcare and well-being of our people in Lagos. We are adding a softer touch to how we deliver quality health care to our people in Lagos by bringing arts to contribute and transform the

healing process in our health facilities,” Abayomi said.

The Art4Life project is in further fulfilment of the present administration’s promise and commitment to strengthen healthcare system in the state, he said, noting that the introduction of art therapy will help improve mental health and wellbeing of citizens.

“The Art4Life project will introduce a softer method of looking beyond the physical in attending to patient’s health thereby reducing trauma, anxiety, emotional difficulties, and medical conditions amongst others.

“We need to pay great attention beyond the physical with a view to reducing mental trauma, emotional difficulties as well as depression, family or relationship issues through art therapy,” the commissioner stated.

While explaining the benefits of art therapy, he stated that several art methods including

Promo: Dangote Cement fetes star prize winner in Asaba

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ith the presentation of cars to star prize winners in its ongoing bag of goodies promo, Dangote Cement has kept its word and faith with consumers according to national sales director, Dangote Cement, Adeyemi Fajobi.

Fajobi was speaking in Asaba, Delta State, at the presentation of the star prize of a brand new car to the winner, Simeon Egualeonan, and specifically commended the people of Delta State and Asaba forremainingfaithfultothebrand, adding that the promo was a way of saying thank you to the consumers.

Fajobi said the first star prize winner emerged from Warri, Delta State, and today, a second star prize winner had emerged from Asaba, the same Delta State, an indication that the promo was real.

In her remarks, marketing director,FunmiSanni,declaredthat AsabawasveryspecialtoDangote Cement and remained one of ‘our best customers,’ saying the promo was designed for 21 million people, which is in line with ‘our philosophy of touching lives.’

She explained that the prizes were carefully selected to change the lives of the winners as they were economic goods, saying aside the quality product the company offered, it realised the need to give competitive pricing

to maintain the loyalty of growing customers so that they are lured into buying any other brand of cement.

She said, “Those in the value chain are the reason the company is bagging a minimum of 800,000 bags daily. You are very important tousandthereasonforthispromo tagged bag of goodies targeted at our consumers so that we can say thank in a special way. In every bag there is a scratch card and this scratch card has won somebody a car today and other winners as well.”

Group chief commercial officer, Dangote Industries Limited, Rabiu Umar, in his remarks declared that the promo was not a gimmick as the star prize car is here and ready to be driven off by the winner. He added that Dangote is building Nigeria through massive industrialisation and creation of jobs. He charged the people of Asaba to continue to buy and use Dangote Cement as they have seen that it keeps to its word.

Thestarwinner,SimeonEgualeonan, said he had been using Dangote Cement in his work as a mason. According to him, he had won a lot recharge cards which he loadedbutthistime,foundthestar prize winning card while opening a second bag of cement to repair a soak-away chamber.

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visual, creative and performing arts such as drawing, painting, sculpture, music, dancing and collage, among others, might be used with patients ranging from young children to the elderly, adding that people who had experienced emotional trauma, physical violence, domestic abuse, anxiety, depression, and other psychological issues could benefit from expressing themselves creatively.

He assured that the use of art therapy would be activated in all medical facilities across the state, emphasising that it had a magical way of impacting positively on a depressed patient, especially when they see nature.

He said the inclusion of art therapy would also transform heath care service delivery in the state, noting that his experience of how art was used to aid the process of healing and recovery of Ebola survivors in some West Africa countries was nothing short of magic.

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MTN Foundation leverages collaboration to deliver impactful projects in communities SEYI JOHN SALAU

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n keeping to its corporate social responsibility and brand promise to its subscribers, MTN Nigeria is leveraging collaborative initiatives across rural communities in Nigeria to deliver impactful projects in villages through its “The What Can We Do Together” (WCWDT) initiative under the MTN Foundation.

“The WCWDT initiative reflects our sustained drive to collaborate with Nigerians in executing impactful projects in communities across the country. We believe the nominators are the heroes of this initiative as their noble efforts will go a long way in improving the quality of life for millions of Nigerians,” said Abasi-Ekong Udobang, senior manager, programme implementation, MTN Nigeria, at a recent dinner and awards night held to celebrates community heroes in Lagos, Abuja and Port Harcourt for their efforts in nominating communities in the WCWDT. According to Udobang, the Foundation is dedicated to developing grassroots communities through collaborative efforts, as WCWDT provides Nigerians with the opportunity to nominate a community for developmental projects.

“The altruistic gesture from the nominators led to various interventions by MTN Foundation in nominated communities, including supply of medical equipment to 40 primary health centres with training for the medical staff on the use of the newly supplied equipment.

Ten communities received solar-

powered boreholes and learning materials (school bags, exercise books, raincoats and pencil cases) were distributed to over 15,000 pupils in 60 public primary schools across 36 states and the Federal Capital Territory,” Udobang said.

Since the launch of the first phase of the WCWDT initiative in 2015, 510 communities across 454 local government areas have received diverse interventions from MTN Foundation.

Obafemi Hamzat, the deputy governor of Lagos State, said corporate organisations can do more to deepen cooperation with government to deliver basic amenities to communities by partnering with government. “Lagos State is so pleased to be associated with MTN Nigeria and indeed, the governor has extended his appreciation for this gesture by the MTN Foundation,” stated Hamzat, who was represented by Yinka Ayandele, the permanent secretary, Education District III, Lagos State.

According to Hamzat, MTN Foundation has over the years partnered with both public and private organisations to initiate sustainable development programmes in different focus areas with the aim of making life brighter for Nigerians.

However, speaking at the appreciation event in Abuja organised for nominators from the northern region, Yakubu Oseni, the chairman, Senate committee on ICT, applauded MTN for the kind gesture. He commended the initiative hoping that the foundation would execute more ICT projects in subsequent phases.

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NSACC to hold October breakfast forum in Lagos GBEMI FAMINU

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igeria-South Africa Chamber of Commerce (NSACC) will hold its October 2019 breakfast forum scheduled for October 31, at the Iris Hall, Eko Hotel and Suites, Victoria Island, Lagos by 7.30am.

Governor Babajide Sanwo-Olu of Lagos State and Governor Adedapo Abiodun of Ogun State will be the guest speakers for this month’s edition, and both guest will share insights on the topical issue: “Lagos and Ogun Partnering for the Future” in our ever evolving Society.

Iyke Ejimofor, executive secretary, NSACC, states that the event is primarily for captain of industries, business owners and top level executives as well as other interested parties. He added that the chairman of the Chamber, Foluso Phillips and other executive directors are expected to attend the forum. He further noted that as in previous times, this edition will be educative and also insightful.

Ejimofor, on behalf of the Chamber encourages everyone who wants to grow and strengthen his or her business or gain insights on how to thrive globally should make effort to attend. He expressed that the meeting is a “great door opener and participants will benefit in many ways, including: finding personal contacts for future follow up and initiate new vendor relationships, and so on.

Since the inauguration of the Nigeria-South Africa Chamber of

Commerce in the year 2000, the bilateral relation between both countries has grown tremendously.

The Chamber has been a veritable economic tool responsible for the increment in trade between Nigeria and South Africa.

Through the Chamber activities, many South African firms have indicated interest in joint partnership with Nigerian firms and other forms of economic co-operations with several business establishments in Nigeria.

South African firms or firms with South African participation are active in Nigerian business sectors such as telecommunications, broadcasting, petroleum, banking, hospitality and to mention but a few.

Membership comprises both Nigerian and South African owned firms and a combination of those with ownership by both Nigerian and South African investors.

Nigeria South Africa Chamber of Commerce’s membership covers almost the whole spectrum of business activities in Nigeria.

Such as banking/finance services, manufacturing, insurance, advertising, accounting, auditing and management consulting. Others include airline services, broadcasting, engineering, law, freight, hospitality, health/pharmaceuticals, oil and gas, property, telecommunication, stock brokering, and information technology. Membership is spread all over the country with specific presence in Lagos, Abuja, Port Harcourt, Kaduna, Kano, Ibadan and Onitsha.

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Nigeria, Africa require technology to boost socio-economic, institutional development in non-oil sector KELECHI EWUZIE

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ndustry experts in the field of commence have identified innovation and technology as the right approach Nigeria and Africa must deploy to boost socio-economic, institutional development in non-oil sector.

They say Nigeria must process its export-bound agricultural products to add greater value to maximise income on the products.

Abel Osuji, internal audit director of the African ExportImport Bank, said there was need to develop the agriculture value-chain to boost processing and increase income for the nation, adding that 80 percent of revenue was usually lost because value was never added to agro produce export from Nigeria and Africa at large.

Osuji stated this while delivering a lecture entitled: “Exploiting Exporting Opportunities across African Regional Market – a Paradigm Shift for Emerging African Entrepreneurs” in Lagos at an event organised by the University of Port Harcourt Faculty of Management Sciences Alumni Class of 1992.

According to Osuji, “Exporting processed goods apart from increasing revenue will

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also help the nation to take charge of markets from production through processing to distribution, “Exporting things unprocessed is not doing our country any good.”

Austine Obajidi, a shipping expert on his part, called on the Federal Government to encourage non-oil exports business by providing the right business environment.

Obijidi observed that for any country to survive, it needed to do export so that there would be balance of trade, adding exporters as a matter of importance need to secure genuine contracts and carry out proper documentations with relevant agencies.

Another member of the body, Stanley Okocha, called for sustained funding of research on agriculture to grow the nation’s non-oil sector, saying the nation’s leadership must incorporate the academia by funding research to achieve innovation in agriculture.

“We have to take agriculture seriously. Government should reinvent the agriculture valuechain and we must work out solutions for sustainable development. For that sustainable development to happen, we must develop our agriculture research institutes and develop technology to make progress,” he said.

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Live @ The Exchanges Market Statistics as at Friday 25 October 2019

Top Gainers/Losers as at Friday 25 October 2019 LOSERS

GAINERS Company

Opening

Closing

Change

N26

N26.3

0.3

WAPCO

N14.45

N14.7

0.25

ACCESS

N7.1

N7.3

0.2

UBA

N5.75

N5.85

0.1

STERLNBANK

N1.85

N1.94

0.09

GUARANTY

Company

Opening

Closing

Change

N26.45

N23.85

-2.6

N17.6

N16.05

-1.55

CCNN

N16

N15

-1

DANGFLOUR

N23

N22.25

-0.75

N7.3

N6.6

-0.7

GUINNESS FO

CILEASING

ASI (Points)

26,348.73

DEALS (Numbers) VOLUME (Numbers)

2,736.00 371,042,512.00

VALUE (N billion) MARKET CAP (N Trn)

2.517

Global market indicators FTSE 100 Index 7,299.05GBP -29.20-0.40% S&P 500 Index 3,014.08USD +3.79+0.13% Generic 1st ‘DM’ Future 26,848.00USD +68.00+0.25%

12.826

Deutsche Boerse AG German Stock Index DAX 12,866.33EUR -5.77-0.04% Nikkei 225 22,799.81JPY +49.21+0.22% Shanghai Stock Exchange Composite Index 2,954.93CNY +14.01+0.48%

Stock market declines by 0.38%

Stanbic IBTC Holdings reports N69.11bn Q3 pretax profit

Iheanyi Nwachukwu

Iheanyi Nwachukwu

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tanbic IBTC Holdings Plc has released its results for the thirdquarter (Q3) ended September 30, 2019.

In the nine months period, the Holdco financial institution grew its gross earnings to N176.16billion compared with N168.80billion in the corresponding Q3 period of 2018.

The group recorded Net Interest Income of N58.67billion in Q3’19, a slight increase from

n the trading week ended Friday October 25, the benchmark performance indicator of the Nigerian stock market decreased by 0.38percent.

The record decline came as investors failed to react positively to the release of companies third-quarter (Q3) 2019 as sell pressure persisted.

With most mid/large cap stocks shedding part of their market value in the review trading week, market watchers expect next trading session to come in better as investors take position in some fundamentally sound stocks.

The NSE Industrial Goods Index recorded the highest weekly decline of -1.51percent, followed

by NSE Insurance Index (-1.47percent).

NSE Pension Index (-1.21percent), NSE Consumer Good Index (-0.60), NSE Banking Index (-0.40), NSE Oil & Gas Index (-0.30), while NSE 30 Index (-0.26).

While the bears are still

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L–R: Hafsat Olubukanla Rufai, deputy director, head of operations, Lagos Zonal Office, Securities and Exchange Commission (SEC); Alessia Balducci, general manager, SeedSpace Nigeria; Oscar N. Onyema, OON, chief executive officer, The Nigerian Stock Exchange (NSE); Felix imafidon, overall winner of the competition, Team Requid; Oluwatomi Solake, first runners up, Team Trove; Oluwateniola Esan, second runners up, Team Investors Masterclass, during 2019 X-Kathon Winner Closing Gong Ceremony at the Exchange in Lagos.

winning the match over the bulls, leading to declining equity prices, investors who have long-term funds can take advantage of the recent decrease in the share prices of some companies that have strong investment case in the equity market.

The Nigerian Stock Exchange (NSE) All Share Index (ASI) and market capitalisation which opened the review week at 26,448.62 point and N12.875 trillion

respectively stood lower at 26,348.73 points and N12.826trillion as at Friday October 25, 2019.

The value of listed equities (market capitalisation) decreased by N49billion in one week. The market’s year-to-date (YtD) return stood at -16.17percent.

While FBN Quest analysts expect the market to maintain the negative trading pattern in the next session, FSDH research

analysts believe the current bearish trend in the equity market is an opportunity for strategic investors to take positions in the market.

“In addition to the capital gain that investors enjoy in the equity market, investors could also benefit from dividends that companies pay and the bonus issue (additional shares that investors earn, for which they do not pay)”, the FSDH research analysts said.

Winners emerge in NSE inaugural Hackathon Iheanyi Nwachukwu

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he Nigerian Stock Exchange (NSE) last Thursday announced the winners of its maiden edition of X-Kathon after a thorough review of entries received for the competition.

X-Kathon is NSE’s first Hackathon designed to encourage Tech enthusiasts to develop innovative Fintech solution to drive up millennials participation in the capital market. The competition received over 100 applications from which the top 10 teams (Echo Trade; Requid; Koin-Jar; King; Finfit; Fantasy Stock Exchange; Stritbid; Trove; Investors Masterclass and Nigeria Learn) were selected.

Team Requid emerged the overall winner of the competi-

tion and went home with the grand prize of N5million while Teams Trove and Investors Masterclass were first and second runners up, winning the sum of N3million and N2million respectively.

In his opening remarks, Oscar N. Onyema, Chief Executive Officer, NSE said, “the Exchange is fully aware of the tectonic shifts in the global business environment occasioned by the 4th Industrial Revolution and how smart, nimble tech start-ups have become global economic catalysts.

“We are poised to actively engage the massive potential of creative enterprise in our nation and provide a template for corporate venture capitalism that is much needed in our business environment.

“A cursory look at the enwww.businessday.ng

tries received for the X-Kathon has revealed that our young people are blessed with amasing ideas and entrepreneurial hacks that can positively shape the Nigerian business clime”, he said.

“The hackathon would be climaxed by the deployment of the solutions hashed from it over the next couple of months to drive our retail participation agenda. Working closely with our Enterprise Innovation Hub, we will on-board these ventures into our world class incubation and acceleration programs and groom them for local success and global relevance”, added Onyema.

Nsikak John, Head, Enterprise Innovation Hub of The Exchange said, “We are very impressed with the depth and quality of entries received. This

is proof that Fintechs are indeed critical to the growth of the capital market and we are excited about the emerging possibilities.

“The X-Kathon is just one of the several initiatives that we are leveraging to unlock the disruptive potential of the capital market by identifying solutions that steer the interest and eventual participation of millennials in trading and investment”.

Application for the X-kathon was opened on September 20, 2019 and closed on October 8, 2019. Out of the 100 applications received, 10 most innovative solutions were selected by subject matter experts in the Fintech space. A 2-day bootcamp was held for the top 10 applicants in preparation for the grand finale.

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N58.44billion in Q3’18.

Its Profit Before Tax (PBT) in Q3’19 muted to N69.11billion from a high of N70.38billion in the corresponding Q3’18.

Stanbic recorded Profit After Tax (PAT) of N55.55billion down from N59.76billion in Q3’18.

Its basic /diluted earnings per ordinary share (kobo) decreased to 513kobo in Q3’19 from 573kobo in Q3’18. At N37 per share, its share price traded flat on Friday at the Nigerian Bourse.

PEARL to reward players in other markets in 2020 awards ….as 2019 edition holds November 24 MICHAEL ANI

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he governing Board of PEARL Awards, Nigeria’s leading capital market awards, is making out plans to include in its recognition, players in other markets beyond just quoted companies.

The above plans, which is expected to be unveiled next year, 2020, when the awarding body would be celebrating the 25th edition of the award, will recognise outstanding performers in other markets including registrars, fund managers and portfolio advisers, Tayo Orekoya, President/CEO, Pear Awards Nigeria said.

“As we move to the 25thanniversary edition of the awards in the year 2020, plans are afoot to comprehensively restructure the awards to cover other market players including registrars, fund managers and portfolio advisers,” Orekoya said at a news parley, held in Nigeria’s commercial city, Lagos.

Since 1995, the PEARL Awards have been recognised by regulators and operators for its usage of empirical data to recognise and reward outstanding corporate performance in the Nigerian capital market.

The move by the organising body to restructure and reward more players would be the second since inception after in 2015, it expanded its scope beyond quoted companies to begin @Businessdayng

the recognition of other capital market players including stockbroking firms, issuing houses among others.

Orekoya who noted that details of other far-reaching structural changes that would be implemented, would be announced in due course, said the move by the board, is part of its broader efforts, aimed at sustaining the impact, relevance and credibility of the awards.

Being a leading award and having the approval of regulators in the Nigerian capital market, the PEARL Awards, have been a consistent annual event since its inception to date, with nominees selected based on the principles of fairness, transparency and objectivity.

For the 2019 edition, the awards have been scheduled to hold on Sunday, November 24, 2019, at Eko Hotel and Suites, Victoria Island, Lagos, with the theme “celebrating sustainable leadership and resilience”.

According to Orekoya, the 2019 edition of the awards, promises to be as glamorous as previous editions as it would be graced by top capital market players, industry chieftains as well as top government functionaries.

In this year’s edition, awards shall be in three main categories which include the main competitive awards category; the honorary awards category and the special recognition awards category.

Company IN FOCUS

BUSINESS DAY Monday 28 October 2019 www.businessday.ng

Is Okomu Oil Palm set to halt undulating earnings trend?

OLUWASEGUN OLAKOYENIKAN

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a 22.4 percent slump in revenue to N4.34 billion from N5.59 billion.

“In the first two quarters, we have a lot of problems in having to sell our products locally,” Graham Hefer, Managing Director of Okomu Oil Palm, said while reacting to the recently released results. These problems, which came as a result of illegal smuggling and imports of products are only related to rice as people may think, but also oil palm as well as other things, he said.

To curb the importation of oil palm, which was aberrantly affecting local producers, President Muhammadu Buhari in June directed CBN to blacklist any firm caught smuggling or dumping palm oil into the country from all banking businesses as well as the foreign exchange market. This pronouncement was followed up with a partial – and later graduated to complete – border closure in August and this rekindled local demands.

Hefer said after the Nigerian government shut its land borders, the impediments to sales faded off as there was a loosening of grip by illegal imports, creating an oppor-

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he fun enjoyed by people who ride on a rollercoaster may not exactly be the same as shareholders of Okomu Oil Palm, one of Nigeria’s leading agro-allied companies, whose earnings have followed an undulating pattern like the amusement ride within the last decade.

But there is a reason for Okomu owners to be happy even in the days of shrinking revenues and declining profits, as the company has maintained a record of consistent dividend payment since 2016. From a dividend of 10 kobo per share in 2016, the company grew dividend payment to N1.50 in 2017 and N3 in 2018.

The oil pam maker also declared an interim dividend of N2 per share when it released its earnings results for the period ended September 30 2019 on the Nigerian Stock Exchange (NSE).

The dividend, which is payable on November 11, is despite a 6.8 percent dip in revenue to N15.54 billion from N16.68 billion as well as net income which fell by almost half to N4.11 billion in the first three quarters of the year.

But besides this, one line in the financial results that attracted attention was a rebound in the company’s quarterly revenue in the third quarter of 2019 after consecutive declines in the previous two quarters.

Oil palm import restrictions paid off for Okomu A look at the third-quarter earnings figures of the oil palm maker showed that recent government restrictions on oil palm imports, including the closing of Nigeria’s borders with the Republic of Benin, were the game-changer for the company.

Nigeria spends close to $500 million on the importation of the commodity annually, according to Central Bank’s governor Godwin Emefiele. While the importation was to meet the increasing local demands of a country once adjudged as the world’s largest exporter of oil palm in the late ’50s and ’60s, it negatively impacted the performance of local oil palm producers.

Okomu and other oil palm makers benefited from the blacklisting of some 41 items including oil palm by the Central Bank of Nigeria in 2016 when dollar shortage fostered local demand of the agro-product. But the gains were short-lived as the local oil palm producers were faced with fresh challenges – robust dollar reserves following improvements in crude oil prices, and smuggling activities across Nigeria’s porous borders.

As a result of this, Okomu Oil Palm plc witnessed a 42.5 percent decline in sales to N4.22 billion in the first quarter of 2019 from N7.34 billion, the trend was extended to the second quarter of the year with

the oil palm maker said it planned to cultivate 5,000 hectares for its oil palm production in the state with a determination to creating a more sustainable oil palm growth and practice tunity for the company to market its products more easily.

Okomu recorded N6.97 billion as revenue in the third quarter of 2019, as the company almost doubled sales compared with N3.74 billion achieved in the

corresponding period of 2018.

All thanks to a rebound in its domestic sales between July and September which formed the third quarter.

Local sales surged 89 percent to N5.95 billion in the third quarter from N3.14 billion a year earlier, while sales generated by exporting its products to other countries rose to N1.02 billion in the review period as against N598 million realised in the same period last year.

“In the third quarter, we sold our stock that was untapped in the last two quarters and that led to the increase in revenue,” the Okomu’s helmsman said.

In spite of this ray of hope for Okomu’s revenue trend and profitability, the sustainability of the restrictions and whether or not it would deliver a bumper revenue for the last quarter of the year enough to reverse its weakened 2018 sales which came in weaker remain major concerns. If this happens, investors’ worry over how Okomu could sustain revenue growth may be laid off.

Costs remain a concern as margins shrink Okomu Oil Palm’s net profit

took a haircut in 2018, but despite this, the company was generous enough to excite its shareholders with one-third of its profit as dividend (N2.82 billion), providing succour for its owners in a year when 17.8 percent of equity value was wiped off investors’ capital gains on the Nigerian Stock Exchange.

However, the oil palm maker’s high operating expenses which have become a bug to its margins should be a concern for any shareholder who wishes the company not only to remain on the path of profitability but also generate more profits from revenues.

For instance, the company’s net operating expenses, which factored in costs associated with operations such as inventory costs, employee benefits, marketing expenses, among others, grew by one-third to N7.39 billion between January and September 2019 from N5.63 billion. This was largely driven by about 50 percent growth in total operating expenses to N3.43 billion in the third quarter of the year from N1.46 billion.

Consequently, net profit margin, a profitability metric that measures how much profit a company generates from sales, declined to 26 percent in the first nine months of 2019 compared with 43 percent recorded in the comparative period of 2018. This means for every N100 sales realised by Okomu between January and September 2019, only N26 remained as profit which was paid out to shareholders and ploughed back to the business.

Meanwhile, the company recently told the investing public that it has intensified steps to improve collaborative arrangement with the Edo State Government in the agriculture industry through a partnership with local communities and indigenous farmers to boost job creation and enhance modern agricultural technique for an increase in production.

According to the release, the oil palm maker said it planned to cultivate 5,000 hectares for its oil palm production in the state with a determination to creating a more sustainable oil palm growth and practice.

Besides oil palm production, the principal activities of Okomu include palm kernel processing and the development of rubber plantation, while its products include palm oil, palm kernel oil, palm kernel cake, Banga (package) and rubber cup lumps.

Shares of Okomu Oil Palm remained unchanged at N54.95 per share after the close of business on the Nigerian Stock Exchange on Friday. As a result, the equity value is 36.8 percent close to its 52-week low of N40.15 per share and would deliver a dividend yield of 5.46 percent, the highest in the crop production segment of NSE’s agriculture sector.

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