Businessday 29 may 2018

businessday market monitor Commodities

NSE

Brent Oil

Biggest Gainer

$75.05

DANGCEM N245

Cocoa

US $2,556.00

Biggest Loser

0.41pc

Everdon Bureau De Change

Bitcoin WAPCO N38.5

-4.94pc

39,028.51

2,672,315.51

Buy

-0.64pc

$-N 364.50 367.50 £-N 487.00 497.00 €-N 420.00 430.00

Powered by

news you can trust I ** TUESDAY 29 may 2018 I vol. 15, no 64 I N300

Sell

@

FMDQ Close Foreign Exchange Market

Spot $/N

I&E FX Window 361.57 CBN Official Rate 305.95

fgn bonds

Treasury Bills 3M

6M

5 Years

10 Years

20 Years

0.37 12.51

-0.16 12.90

-0.13% 13.33%

0.00% 13.34%

-0.01% 13.48%

g

Buharinomics: Nigerians poorer three years after T

Goldman maintains bullish outlook for oil despite fall DIPO OLADEHINDE, with agency report

…Economic growth stagnates on lack of key reforms

MICHEAL ANI, BUNMI BAILEY OLALEKAN IPELE & DIPO OLADEHINDE

I

t is three years today since Muhammadu Buhari was sworn in as president after a tension soaked campaign in which he emerged victorious against an incumbent president.

Nigerians had very high hopes that their economic situation will improve with his election but three years after, the personal living circumstances of many Nigerians have deteriorated as rising inflation and unemployment has weakened their purchasing power and forced many to readjust their lifestyle downwards.

There have been a few positives such as Nigeria’s improvement on the 2018 ease of doing business ranking to 145th position out of 190 countries, boost in agricultural production and increase in taxation.

The gains are however few and much outweighed by the negatives.

For the first time in two decades, the Nigerian economy contracted in 2016, a situation that is largely a culmination of several wrong steps taken by the Buhari administration.

The unemployment rate has doubled from 9.9 percent in the third quarter (Q3) of 2015 to 18.8 Continues on page 4

L-R: Boss Mustapha, Secretary to the Government of the Federation (SGF); Bukola Saraki, Senate president; President Muhammadu Buhari, and Yakubu Dogara, speaker, House of Representatives, during the Democracy Day Lecture in Abuja, on Monday. Pic by Tunde Adeniyi

he global bank Goldman says it was maintaining its bullish outlook for international oil price a sharp drop in price forced by signals that leading producers Saudi Arabia and Russia would increase production.

In a research note sent to its clients and investors yesterday and seen by BusinessDay, analysts at Goldman said, ““while the announcement lifts some of the uncertainty on whether and when OPEC and Russia would increase production, we do not view this as a material change to our bullish oil outlook.”

Several Oil producers like Nigeria are counting on higher price to reverse their budget deficit and cut escalating foreign debt and in Nigeria calls are already mounting that the government would have to put in place a credible mechanism for managing the excess revenues from oil sale.

According to the note, “in short, the market remains tight and the outlook is still constructive.” It is the view of the Goldman research team that the response by Saudi Arabia Continues on page 34

2019 Election: EU warns against rigging ...as Transparency International says Buhari increasingly relying on corruption prone security votes worth $670m LAIDE AKINBOADE

T

he European Union on Monday, urged the Federal Government and Independent National Elections Commission (INEC), to

ensure that Nigerians are allowed to choose their leaders.

In a statement issued by EU in Abuja, the union also said under-represented groups, including women, young people and people with disabilities, must

be encouraged to participate in politics. In the statement which was issued to commemorate democracy day, the Union urged all Nigeria political parties to maintain Nigerian and international norms and support a credible

process and shun violence.

The statement reads; “Who will win the general elections in 2019 is a decision for the Nigerian people. Our concern as partners Continues on page 34

2

BUSINESS DAY

Tuesday 29 May 2018

Tuesday 29 May 2018

BUSINESS DAY

3

4

BUSINESS DAY

C002D5556

Tuesday 29 May 2018

Buharinomics: Nigerians poorer ...

Continued from page 1

L-R: Steve Elusope, executive director, operations; Eric Fajemisin, chief executive; Nike Bajomo, head, business development, and Dele Sotubo, executive director, all of Stanbic IBTC Pension Managers Limited, during a media interactive session in Lagos on Monday.

Pic by Pius Okeosisi.

3 years of Buharinomics leave agriculture impact doubtful . . . As smuggling runs wild, access to finance remains difficult CALEB OJEWALE

D

evelopments in agriculture as government handlers like to put it, has been one of the posters readily brandished when asked of what the Buhari administration has achieved in the last three years.

However, while the sector has to a considerable extent recorded a number of positive developments, determining just how effective and impactful these have been is quite a tricky subject.

Rice production is one of the very first areas the government says it has made significant progress. To some extent, yes it has, but this has also been largely exaggerated, as with virtually everything else.

The agriculture promotion policy of the Federal Government for 2016 – 2020 showed that rice production in the country at 2.3 million metric tonnes, with a four million tonne deficit from the country’s 6.3 million metric tonnes demand. The deficit has been attributed to insufficient supply chain integration which remains a nagging issue in achieving sustenance. The deficit was previously filled through a combination of massive legal imports through the ports, and unabated smuggling through the many porous land borders.

The situation even though said to have improved, still remains vulnerable.

BusinessDay reported in 2017 that rice imports from Thailand, one of the country’s largest suppliers had dipped by 96 percent compared to the volume imported in 2015. But a cursory examination shows that even though rice exports to Nigeria have dipped, increase in imports by neighbouring countries such as Benin may imply more smuggling in getting the commodity into Nigeria.

Data by the Thai rice exporters showed that Benin has between January and September 2017 imported 1,330, 809 metric tonnes of rice, a 51.9 percent

increase from 876, 228 metric tonnes which was imported within the same period last year.

Comparing the 2017 imports (so far) to total imports in 2015 also shows there has been a 65 percent increase.

In essence, while the Nigerian government celebrates its achievements in increasing rice production, the smugglers are very well also celebrating increase in their business.

Three years of Buhari has also not appeared to give confidence and assurance to many industry heavyweights, who feel the sector is running on wheels on trial and error. A deliberate, strategic, action plan, experts say, would see the country’s agriculture delivering far more than currently recorded.

Sani Dangote, vice president, Dangote group, and president of the Nigeria Agribusiness Group (NABG), had noted that at a press conference, that “there is overwhelming evidence that lack of affordable financing, inadequate infrastructure, lack of supply securities, inconsistencies of government policies and regulations are top among constraints facing agribusiness investments in Nigeria.”

While the Central Bank of Nigeria (CBN) has more or less added agricultural banking to its portfolio, going as far as spearheading initiatives such as the Anchor Borrowers’ Programme (ABP), financing still remaining a challenge. This is especially so for the millions of smallholder farmers who produce the bulk of food in Nigeria, yet are unable to access finance.

Even some fairly “big” farmers are not left out of the desperate search for funds which continue to elude them.

“I cannot approach banks for loan at 30 percent interest rate.

The Agric intervention funds at single-digit interest rate are not accessible, they are mere political statements,” said Bode Adetoyi, chairman, Poultry Association of Nigeria (PAN), Lagos state, who also lamented that the “poultry industry and feed business is already col-

lapsing and farms, feed mills are closing every day,” Nigeria’s commercial banks’ credit to agriculture slightly increased from N491.3 billion in the third quarter of 2016 to 491.5 billion in the same quarter of 2017 according to data from the National Bureau of Statistics (NBS). Yet, the average player in the agric sector continues to wonder who the people getting all the money are.

The poultry industry under Buhari has also struggled to survive. BusinessDay reports had indicated many poultry farms had shut down on account of difficulty to feed their birds owing, blaming the situation on inability to access to feed and other inputs, and later in the year, excessive smuggling saw local producers unable to sell off their stock.

The poultry industry is however expected to improve this year as feed supply improves with increase in maize availability. But then, this is not such because local production has gone up tremendously, but as some sources informed us; massive maize importation had been done to address the previous feed shortages.

Onalo Akpa, director general, Poultry Association of Nigeria, projected that this year, “with the prices of maize coming down, if our cost of production is able to come down, then we are able to produce at relatively affordable prices. There is going to be a lot of competition between smuggling and locally produced chicken. But the most important things is patriotism. The locally produced chicken is more preferable than the smuggled one, so the government needs to create awareness on the benefits of locally produced chickens” In essence, just as rice, even poultry production within the country is threatened by massive smuggling. This, added to other factors make it difficult to determine just how much change Buhari has brought to the agric sector.

percent in Q3 2017, according to data from the National Bureau of Statistics (NBS).

The number of unemployed Nigerians also increased to 15.99million in Q3 2017 from 11.9million in Q3 2016, NBS data shows.

First key misstep was the refusal to name a cabinet six months after being sworn-in as president. Buhari was sworn as president on May 29 but he did not swear in his ministers until November 11.

Analysts say the delay in appointing ministers cost the economy the growth momentum that is usually seen after elections and possible set the stage for the economic slowdown that resulted in the recession of 2016.

While speaking to France 24, a French television station on September 16, during a visit to France, when asked why he was yet to have a cabinet more than three months after being sworn in, Buhari then described Ministers as ‘noise makers’ saying that those who really the work are the civil servants and ‘technocrats.’

But many analysts believe that the lack of ministers led to a vacuum that created policy inertia which the country paid for dearly in the eventual impact on economic growth.

The second major mistake was the suborn refusal to devalue the currency despite a significant decline in foreign exchange earnings that put pressure on external reserves.

Instead of allowing the naira to depreciate, President Buhari insisted that the Naira must not be ‘killed’ under his watch.

In a statement issued by Garba Shehu on 27 January 2016, Senior Special Adviser to the President on Media & Publicity, he quoted Buhari as saying, while addressing Nigerians during a visit to Kenya that, he was not convinced that Nigeria and its people will derive any tangible benefit from the devaluation of the currency. He also insisted that the Central Bank of Nigeria should not sell dollars to BDCs saying that they have become a scam and drain on the economy.

But the refusal to allow the Central Bank of Nigeria (CBN) to devalue the naira meant that the apex bank had to introduce several unorthodox foreign exchange policies including; dollar rationalisation, outright ban on 46 items from access dollar for imports, restrictions on international payments, policies that eventually crimped liquidity in the foreign exchange market and spooked foreign portfolio investors.

This came at a high cost as the inflation rate grew to a double digit of 11.38 in February 2016 when the nation’s economy plunged into recession and rose to 12-year high at 18.72 percent in January 2017. Since then, the rate has taken a downward trend largely coinciding with the somewhat liberalisation of the FX rate, decreasing to 12.48 per cent in April.

The foreign exchange controls eventually forced international investment banking firm JP Morgan to announce on 8 September 2015 that it is going to phase the country out of its Emerging

Market Government Bond Index (GBI-EM) by the end of October that year ‘due to alleged lack of liquidity and transparency in the nation’s foreign exchange market.’ The decision to expel Nigeria from the index, which the country has been part of since 2012, is said to have led to a cumulative outflow of about US$2.5 billion invested in government bonds putting further pressure on the exchange naira.

Faced with an undue pressure on the naira arising from demand for dollars that it could not meet, the CBN was forced to abandon its N197/US$ exchange rate peg on May 24, taking a decision to introduce a ‘controlled float’ of the naira in the official market leading to a devaluation of the currency in the official internbank market to about N305 to US$.

But this still did not stem the pressure on the naira, with the pressure on the currency leading it to weaken to as low as N500 in the black market on 31 January 2017.

The weakening of the currency in the black market was mainly driven by the huge demand from manufacturers of 41 items that were locked of the official market after the CBN placed a restriction on manufacturers accessing dollars from the official market for those items.

While the FX restrictions also helped the CBN to restart rebuilding reserves, it led to a significant slowdown in the formal manufacturing sector as many companies struggled to access dollars to meet their import needs. Figures from the National Bureau of Statistics shows that economic growth was negative for each quarter all through 2016, the first full year of Buhari’s administration.

The economy experienced its first recession in two years in 2016 with a negative growth rate of -1.58%.

The economy also had a negative growth in the first quarter of 2017 before returning to position growth in the second quarter of the same year. Since then, the highest growth the country has recorded is the 2.11 percent growth recorded in the last quarter of 2017. Growth has returned to below 2 percent, coming at 1.95 percent in the first quarter of 2018, a growth rate that is not enough to put a dent on the poverty numbers in the country.

According to Moody’s the current growth rates are still not sufficient to improve Nigerians’ living standards and the current recovery remains mainly cyclical, coinciding with a recovery in the oil sector.

“Absent further reforms to strengthen the economy’s growth potential, Nigeria is likely to grow at around 3% in real terms in the next few years,” Moody’s said recently.

The lack of reforms can be seen by a hesitation to end corrupt fuel subsidy payments for petroleum products, thoughts around the resurrection of bankrupt Nigerian airways, the banal ritual of continuing to throw good money after bad by refusing to privatise Nigeria’s old Continues on page 34

Tuesday 29 May 2018

BUSINESS DAY

5

6

BUSINESS DAY

C002D5556

Tuesday 29 May 2018

NEWS

Rising oil price triggers optimism Concern grows over nonamong commercial office investors constitution of PENCOM board … as oil/gas sector, FMCG dominate demand for prime space in Q1’18 CHUKA UROKO

R

ising oil price in the international market coupled with relatively high level of activities in the economy has triggered optimism among landlords and investors in commercial office segment of the real estate market.

Oil and gas firms along with technology, fast moving fast moving consumer goods (FMCG) operators and professional services dominated demand for prime office space, while entrepreneurs and start-ups continued to favour shared or co-working spaces in the first quarter of 2018.

The implication of this is that prospective investors have to rethink their project size in line with market realities, more so as demand for space was in favour of sizes from 200 square metres to 500 square metres. The growth of start-up firms has been on the rise in the last couple of years.

As at the end of the first quarter of 2018, oil price (Brent Crude) grew by 5.1 percent to $70.27 per barrel relative to $66.87 per bar-

rel in the previous quarter.

Currently, the price is on $80 per barrel thresh-hold.

But, on the domestic front, oil production remains flat, quarter-on-quarter (q-o-q), at 1.8 million barrels per day.

Broll Nigeria’s just released viewpoint on the commercial office market notes that the economy generally has witnessed some upswings even though recovery from recession remains slow, fragile and vulnerable. As at the end of last quarter, macroeconomic conditions in the country outperformed the last quarter of 2017 levels.

The foreign exchange reserve level grew by 19 percent to $46.26 billion in Q1:2018, up from $38.77 billion in the previous quarter, the highest level recorded since Q1:2013.

This gave the economy a forex payments buffer of 13.4 months at the end of the quarter.

The naira appreciated marginally within key market segments in the foreign exchange market. At the parallel market, the naira closed Q1:2018 at N362/$, a slight q-o-q appreciation of 0.03 percent. Similar instances were recorded at the inter-

bank and Investor-Exporter Foreign Exchange (IEFEX) windows, with the naira closing the quarter at N305.65/$ and N360.2/$, respectively.

The consequence of these developments was a significant rise in business and investor confidence, leading to renewed interest in the real estate market, particularly in commercial office submarket where enquiries for space was appreciable as at the end of the quarter.

Though average asking rent for A-grade spaces in some locations like Ikoyi remained constant at was $750 per square metre per annum relative to Q4:2017, in the Victoria Island commercial node, the median average asking rent was $650per square metre per annum, showing a hike from the previous quarter’s median average of $600 per square metre per annum.

Therefore, the upward rent review by landlords represents optimism about the country’s economic prospects as well as renewed investor confidence, which they expect to translate into increased activity in the commercial real estate market.

JOSHUA BASSEY

C

oncern has continued to grow over Fe d e r a l G o v e r n ment’s seeming unwillingness to constitute the board of the National Pension Commission (PENCOM), the regulator of the over N7.779 trillion Nigerian pension industry.

Stakeholders say the non-constitution of the board represents an unhealthy development for an industry that manages the fate and future of over 8 million contributors to the Contributory Pension Scheme (CPS). The CPS Act came into force in 2004, but amended in 2014.

The Act requires both the employer and employee to contribute 10 and 8 percent, respectively, of the worker’s emolument into a Retirement Saving Account (RSA) to be accessed by the worker upon his/her retirement from active service.

Issa Aremu, a former deputy president of the NLC, who spoke with BusinessDay at the weekend, warned of the implications

of the non-constitution of the board in view of the strategic role of the Commission as industry regulator.

The Nigeria Employers’ Consultative Association (NECA) and Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) had also variously raised concern on the issue and called on the Federal Government to act urgently.

According to Aremu, “It is completely unacceptable to the working people, we the contributors to the scheme that a critical labour market institution has been left without a board for almost two years. It is unacceptable. “ P re s i d e n t Mu h a m madu Buhari has to quickly, as a matter of urgency, give priority to the proper constitution of the board.

“The formal directorgeneral of the Commission was whimsically removed.

And as if that was bad enough, the government appointed another that has not been confirmed by the Senate, yet leaves the Commission to be administered

without a board.

“What happened to corporate governance? The current acting directorgeneral is doing well to manage the scheme. But what can she do when the board is not in placed?

If the board had been in place, there would have been more aggressiveness in terms of sensitisation to promote micro pension scheme. Even to expand the coverage of CPS in the formal sector because the coverage of the formal sector is also low.”

Aremu, who also decried the fact that some employers were deducting pension fund from their workers without remitting to the RSA, said running PENCOM with a board had limited its powers to act decisively against such infractions.

“It is only an active, well constituted board that can drive that agenda. That board includes labour and employers. For us, it is one slow motion that is unacceptable and it has implication for the future of the scheme and pensioners,” he said.

Movement against leadership failure holds in Ibadan

Good governance, human development key determinant of growth – Kuru

F

L-R: Amaechi Okobi, group head, corporate communications, Access Bank; Herbert Wigwe, GMD/CEO, Access Bank; Otto Orondam, CEO, Slum to School, and Osayi Alile, CEO, ACT Foundation, during the Herbert visit to Slum to School in Lagos.

Shell’s N14bn to Rivers host communities: 15 Ikwerre communities get N789m to execute projects IGNATIUS CHUKWU

A

fter the reality of drawing down N789 million from Shell under the Global Memorandum of Understanding (GMoU) to execute 85 community projects, the leadership of the Ikwerre Cluster Development Board has affirmed that the GMoU is the best thing that has happened to both SPDC and host communities.

SPDC has so far handed over N41 billion to 37 clusters in the oil region, and Rivers State got a huge chunk of this vote, N14 billion, where the Ikwerre Cluster alone got N789 million in five years.

This is as the chairman of

the board, Felix Ipko, has confessed that the return of vandalism and oil bunkering in their area was a sign of not living up to their side of the bargain.

The chairman, second in succession, spoke at the commissioning of 46 out of the 85 projects executed at the cost of N620 million out of the mandate amount of N789 million between 2013 and 2018. He regretted that one community, Omueke, had been bogged down by internal conflict and litigation, despite misinterpreted efforts by the board.

He went on: “The choice of Mbodo Aluu as headquarters or venue of this mega commissioning is to honour our literary icon, the late Elechi Amaechi. I

am the second chairman of the Board after the first chairman, B.S Emerengwa, won election into the Federal House of Representatives. The succession was smooth. This adds to new values in the Ikwerre communities, where friendship and comradeship now blossom. I took over on March 6, 2013.”

The board’s greatest achievement is bursary support to 583 undergraduate and postgraduate students, because it has created a focus on education in Ikwerre land, he said.

“As a cluster, I must say that we have not done much in the area of skill acquisition. This is because of the closure of Rivers State Sustainable Development Agency (RSSDA) and the subse-

quent shut down of the Craft/ Skills Development Centre in Bori Polytechnic, now Saro Wiwa Polytechnic.”

He said the GMoU system introduced by SPDC is the best thing that has happened to host communities in the oil industry. “We pray that this programme be sustained. It has drastically reduced the friction and acrimony between SPDC and the host communities. Our communities now see themselves as stakeholders in the oil industry through the GMoU system and SPDC now treats the communities with respect and dignity. The benefits an and achievements of the GMoU are numerous and sustainable from community to community.”

ollowing the success recorded at North East, North Central, North We s t, S o u t h S o u t h a n d South East, the Red Card Movement Nigeria (RCM) has advanced to South West, as regional launch holds in Ibadan, the Oyo State capital.

The movement, which has taken its revolt against bad governance and abysmal leadership across the streets of Nigeria, in its well-coordinated campaign against leadership failure and bad governance continued its rally at Ojoo, Moniya Road on May 26, in Ibadan.

Just like she did in the previous launches, Oby Ezekwesili reminded Nigerians of the crucial roles they have to play to make Nigeria the country of their dreams.

The first step toward this is for them to register and collect their Permanent Voter Card (PVC). This should be followed by coming out on election dates to vote out bad leaders that have held Nigerians down through bad and incompetent governance styles.

According to Ezekwesili, bad governance has led to the cyclical truncation of democracy in Nigeria, and where we have had democracy, it turned out to be a far cry from what true democracies represent.

This has been the norm since the termination of the First Republic in 1966. As a result of these abnormalities, key institutions, systems, principles and ethos that underpin democratic practice have remained extremely problematic and largely underdeveloped, she said.

SEYI JOHN SALAU

G

ood governance and human capital development have been identified as the two key determinant of growth in transition economies as emerging markets across the globe, such as Nigeria, aspire to boost and grow its economy of scale.

Managing director/CEO of the Asset Management Corporation of Nigeria (AMCON), Ahmed Lawan Kuru, made this submission at the 2018 Fellows’ Luncheon of the Institute of Directors (IoD) Nigeria held recently in Lagos. As guest speaker, Kuru spoke on the “Determinants of Growth in Transition Economies.”

According to Kuru, countries that have made sustained progress have invested heavily in enhancing the stock of skills of its labour force by prioritising early childhood quality education, training and provision of health care. “Investing in human capital raises productivity of workers due to upgraded skills and better education, empowers them with capacity for new ideas and innovations,” he said.

He said human resource could be transformed into human capital through education, training and improved health care delivery.

Human capital provides the resources for the development and deepening of other areas of intellectual assets such as research and development, and training, he said, saying, “The truth is, accelerations in technology require countries, such as ours, to urgently invest in our people if we hope to compete in the economy of the future.”

Tuesday 29 May 2018

C002D5556

New fertilizer plant berths in Ebonyi as demand for Nigerian blends soar DANIEL OBI

E

bonyi State government, south east Nigeria, has commenced the construction and installation of plant machinery and equipment towards enhancing the production capacity of the state-owned Ebonyi Fertilizer and Chemical Company Limited in order to take advantage of the soaring demand for various blends of NPK fertilizer produced in Nigeria.

Construction work, according to a statement, has already reached advanced stages at the new site, located behind the existing plant complex along the Abakaliki-Ogoja highway of the state capital, with the plants and machinery installations expected to be completed soon.

When completed, the new plant will add a production capacity of 40 metric tons of blended NPK fertilizer per hour to the existing plant, built in 2004, and which has a capacity of 32 metric tons per hour.

According to the statement, Ogbonnaya Chukwu, general manager of the company, said the state government, under the leadership of Governor David Umahi, envisioned that

the expanded capacity of the plant would place the company in good stead to meet the growing fertilizer needs of the state as well as those of the neighbouring south-east and south-south states.

Chukwu, who also doubles as the senior special assistant to the governor on investment, commended the Federal Government for the vision behind the Presidential Fertilizer Initiative, saying farmers in the state had benefitted immensely from the programme, which had made possible and easy for fertilizer blends to be delivered on time and at affordable prices.

“I think Ebonyi State Fertilizer and Chemical Company Limited is one of the biggest beneficiaries of the Presidential Fertilizer Initiative. The intervention by PFI has helped us to up our game in terms of employment generation and service delivery. Farmers in the State now get very high quality fertilizers early and that was largely responsible for the high volume of rice produced in the state in 2017,” he stated.

The Agricultural Engineering professor also stated that the company, which produces all the different blends of the multi-nutrient NPK fertilizer, has also made it possible for

7 NEWS

BUSINESS DAY

Govt will continue to build capacity for growth UN, ICAO unveil new guidelines empowering of maritime industry, says Amaechi cabin crew to prevent trafficking AMAKA ANAGOR-EWUZIE

M

inister of transportation, Chibuike Amaechi, has assured stakeholders in maritime industry that the Federal Government is committed to building capacity in the transport sector, especially maritime, to grow the economy.

Speaking at the second Nigerian Maritime Technical Summit organised by the Association of Marine Engineers and Surveyors (AMES) with the theme, “Ship Operations in Nigeria: Policy, Technical, Financial Challenges and Solution,” held in Lagos recently, Amaechi said the government was committed to creating policies that would enhance the growth of the entire transport sector.

Amaechi, who was represented by Dakuku Peterside, director-general, Nigerian Maritime Administration and Safety Agency (NIMASA), described Marine Engineers and Surveyors as critical to the growth of the maritime sector, judging by the role they play, starting from ship building to ship management and maintenance.

Amaechi, who also noted that shipping stood on a tripod of funding, right policies

and proper technical direction, said the government was doing everything within its powers to ensure that the maritime industry was viable.

He disclosed that the government had taken a bold step to audit all agencies and parastatals under the transport sector in order to strengthen them to perform optimally.

The minister further disclosed that efforts are in top gear to resuscitate the national fleet, adding that a committee on national fleet is expected to submit its report and recommendations for the setting up of a national fleet.

While also informing the audience of the ongoing reforms in the maritime sector, Amaechi said that government has taken steps to develop the port master plan and has also mandated NIMASA to invest in manpower development that would raise successors for the experienced practitioners in the industry.

Earlier in his remarks, Charles Uwadia, president of AMES, said he was moved by the enthusiasm of the President Buhari-led government to revamp the maritime sector.

IFEOMA OKEKE with agency report

I

nternational Civil Aviation Organisation (ICAO) and the United Nations Office of the High Commissioner for Human Rights (OHCHR) have unveiled new guidelines for training cabin crew on identifying and responding to trafficking in persons.

A statement posted on the ICAO website noted that the document was unveiled on Monday in Geneva, Switzerland by Fang Liu, the ICAO secretary general, and Zeid Al Hussein, the UN commissioner for Human Rights.

Liu said aircraft cabin crew would now have better tools to help them prevent human trafficking on commercial flights.

She said the guidelines were seen as timely and essential, given that onein-200 people worldwide were still being forced into work and living conditions resulting from human trafficking, a practice considered akin to modern slavery.

According to Liu, air transport’s essential role in linking global destinations means that modern aircraft are a primary mobility op-

tion for international traffickers.

“This increases the likelihood that airline personnel will come face-to-face at some point with human trafficking victims and perpetrators.

“Cabin crew especially are in a unique position to observe passengers over the duration of their flights, and therefore to identify and assist potential victims,’’ she said.

She added that to do so more effectively, their instincts must be reinforced through greater awareness and skills, a key focus of the new ICAO-OHCHR publication.

“The development of these joint ICAO-OHCHR guidelines will help improve the awareness of cabin crew concerning the various types of trafficking they may encounter, who the victims and perpetrators are, and the signals to be looked for to confirm a trafficking incident.

“Critically, this document will also provide cabin crew with the reporting and response procedures should they find themselves confronting a potential trafficking situation,’’ she said.

Nigeria loses as Ghana goes east for LNG supplies STEPHEN ONYEKWELU

N

igeria is failing to become the West African gas hub, as it has potential to become, making Ghana turn east, to Russia’s Rosneft to take delivery of Liquefied Natural Gas (LNG) as the West African Gas Pipeline Company (WAGPCo) battles disruptive factors to its operations.

Ghana, in recent times, has been experiencing frequent power cuts due to the inability of the West African Gas Pipeline Company (WAGPCo) to supply gas to the country from Nigeria. WAGPCo, operator of the West African Gas Pipeline (WAGP), has shut down its operations or reduced gas supply several times, either as a result of vandalised pipelines or due to huge debts owed by Ghana to Nigeria for gas supply.

Russia’s Rosneft, May 26, signed a deal with the Ghana National Petroleum Corporation, under the terms of the 12-year deal that it will supply 1.7 million tons of LNG per year.

The volumes will be regasified at GNPC’s processing facilities at the port of Tema where the company is developing an LNG import terminal.

Rosneft gas supplies will cover a quarter of Ghana’s energy demand and strengthen its energy security, Gazprom said in a statement on May 26. At an economic forum in St. Petersburg, Russia, Rosneft and GNPC also signed a framework cooperation agreement that envisaged a joint study of high priority directions of mutually beneficial cooperation in the development of oil and gas fields, oil and oil product supplies.

L-R: Ariire Ayo Kolawole, vicar, Our Saviour Anglican Church, Egbe, Lagos; James Olusola Odedeji, bishop of Lagos West Diocese, Anglican Communion, and Opeoluwa Ogunade, chancellor, Lagos West Diocese, during the dedication service of the new church building at Egbe, Lagos.

Pic by Pius Okeosisi

Young, inspiring leaders to speak at 2018 Nigeria Symposium for young emerging leaders ‘Decent toilet, information on menstrual cycle crucial in keeping girls in school’

T

he fourth edition of the Nigeria Symposium for Young and Emerging Leaders, organised by The Future Project (TFP), will hold on May 31, at Onikan, Lagos.

The event will feature young and inspired leaders such as Aisha Yesufu, co-convener of Bring Back Our Girls Group; Asuquo Ekpenyong, commissioner of finance, Cross River State; Mark Okoye, commissionerforeconomicplanning and budget, Anambra State; Ife Adebayo, special assistant to the Vice President on innovation and entrepreneurship; Samson Itodo, executive director, Youth Initiative for Advocacy, Growth andAdvancement,amongothers.

Themed ‘Shaping New Narratives,’ the symposium will bring together leaders and influential

personalities in politics, business, advocacy, media, and more – to engage and discuss issues of governance, public policies, and civic engagement.

As an annual knowledge-exchange and mentorship event between present and emerging leaders in government and the public sector to facilitate learning and youth inclusiveness, the event provides a platform for young Nigerianstoengagepublicofficials on democratic institutions and national development.

According to Bukonla Adebakin, chief operating officer, The Future Project, the symposium is intended to drive the need to change negative narratives about Nigeria while highlighting the role of the youth in demanding for better governance and improvement

in the system of leadership.

“In strengthening leadership and citizen participation, it is important that we provide platforms to aid true transformation and establish democratic values while developingactiveandempowered citizens. With the theme ‘Shaping New Narrative’,we intend to highlight the crucial role of citizens in imperatives of open governance,” Adebakin said.

Speakers, who have headlined the symposium include Ngozi Okonjo-Iweala, former minister of finance; Oby Ezekwesili, former minister of education; Bolaji Abdullahi, former minister of youth and development, Peter Obi, former governor of Anambra, and Donald Duke, former governor of Cross River, among others.

ANTHONIA OBOKOH

B

etter toilets and information about menstrual cycle are key in keeping girls in school, WaterAid says.

A study by the United States Agency for International Development (USAID) has shown that safe, private toilets for girls in schools, combined with private places to wash, can boost their enrolment by 11 percent.

Around the world, one in three girls face inadequate toilets, and many others face social and cultural limits when on their periods.

As the world commemorates Menstrual Hygiene Day, May 28, WaterAid is encouraging governments around

the world to prioritise better toilets and washing facilities in schools, and to provide accurate information around menstruation, to ensure girls’ rights to education and equality.

“Menstruation is not just a women’s issue; it is a topic that should affect everyone as unhygienic management of menstruation matters to all of society at large. It is crucial we promote and advocate for long-term hygiene behaviour change,” ChiChi AniagoluOkoye, country director of WaterAid Nigeria, said.

Aniagolu-Okoye noted that menstrual hygiene management was not just about providing sanitary pads, “it is more than that. It is about

helping young girls and the people around them, including the men in their lives, to have the information awareness and the knowledge around this issue.”

She further added that this year’s Menstrual Hygiene Day theme, #NoMoreLimits, highlighted how crucial it was to support women and girls break free from limits and reach their full potential.

“In order to do this, we must break the silence surrounding menstrual taboos, stigmatisation; and ensure that menstrual hygiene management is taken seriously and girls and women have the required resources to manage their menstruation with confidence and dignity.

8

BUSI

DAY

Tuesday 29 May 2018

Tuesday 29 May 2018

BUSINESS DAY

9

10

BUSINESS DAY

C002D5556

COMMENT

comment is free

Tuesday 29 May 2018

Send 800word comments to comment@businessdayonline.com

The crisis of dysfunctional leadership in the health team

MAZI SAM OHUABUNWA OFR sam@starteamconsult.com

I

must begin this piece by disclosing that I have many good and long-time friends who are medical doctors and indeed I have many in my family including my own son. Let me also state that medicine is a very dignified profession and all over the world it is accorded special respect.

In our days, if you were a very bright student and you did well in the sciences, you would be expected to choose Medicine or Engineering as your professional pursuit. Actually before the Nigeria-Biafra war interrupted my education, I had been steam-rolled to choose medicine as my first course, even when my mind was aching for Business Administration, Law or Journalism. My dilemma was that I was doing well in all subjects.

So after losing three years in the war I was not prepared to spend one day longer in the pursuit of a degree. To be sincere, I did not know much about Pharmacy as a separate profession, I thought Medicine and Pharmacy were part of the same profession. So when I complained to my uncle that I did not want to spend many long years reading Medicine, he suggested I should read a course closely allied to Medicine but which had a shorter duration. That was how I came to read Pharmacy. Besides, my uncle also told me that since I loved Business Administration (which he discouraged me from reading) that Pharmacy could offer me the opportunity in future to administer a business! And as he predicted the pharmaceutical industry gave me the vintage opportunity to administer business up to the highest levels.

Indeed following my visible roles

in national economic advocacy, especially through the auspices of the Nigerian Economic Summit Group (NESG), and the Nigeria Employers Consultative Association (NECA), some people think I am an economist and when they get to know that I trained as a pharmacist, they marvel, but then I tell them that is how wide the scope of Pharmacy education is.

The Nigerian Medical Association (NMA), established in 1951 as a branch of the British Medical Association but which became really active at independence in 1960 has as its main objective the promotion of professional competence and practice. And for many years, we all saw the NMA as a noble professional organization that had excellent relationship with other professional groups in the healthcare team and sought greater attention and investment in healthcare by the governments.

That is how actually it is meant to be. Healthcare is a team activity were all the members are of equal importance even if some are bestowed with more honour than the other. It is just like the members of the human body where the foot cannot tell the hand that it can do without it, nor the eyes the nose.

When one member suffers, the whole body suffers. As they say, injury to one is injury to all. In the healthcare team leadership was naturally conceded to the medical doctor for many reasons. First, he was the one who spent the longest number of years to acquire a first degree. Two, he was the one that was paid the highest salary. And thirdly in normal clinical setting, he was the one who had the first major interaction with the patient and often invited the other team members to play roles in the management of a patient. He would request laboratory investigation from the Lab Scientist or x-rays from the Radiographer to complete his diagnosis. Thereafter, he would prescribe medicines and direct the patient to the Pharmacist to interpret the prescription, check for incompatibilities, compound and or dispense the requested medicines,

Medical doctors lost the right to leadership of the medical team in Nigeria when they became selfish and self-centered direct usage and counsel the patient on how to get the best outcome from the drug regime. If the patient needs admission for observation or procedure, the medical doctor directs so and the nurses take over to ensure the patient is monitored and cared for while in the hospital ward, including administering dispensed medicines, especially injectable drugs. The same happens if the patient needs physical healing or rehabilitation and he is sent to the physiotherapists or occupational health therapists etc. The health team acting like athletes in a relay race where the medical doctor runs the first leg and hands on the next until the anchor drives home and the team wins. How can the man who initiates the race think he can run the race successfully without the team members? The goal being to restore the patient to health at the shortest time.

In my days, this relationship worked seamlessly. When I went to do my Internship at the University Teaching Hospital Enugu, I was employed as a Pupil Pharmacist in 1976, was placed on grade level 8 and my medical colleagues, house officers were placed on Level 9. And nobody argued. But when we (Internee Pharmacists, House officers, internee physiotherapists etc) had issues with the hospital administration and wanted improved condition of service, I was appointed the leader of the team and I was the one who spoke on behalf of the entire team.

I spoke on behalf of the health care team and I was at the point the leader of the team. I have always insisted that leadership is not a birth right. It is situational and dynamic. Leaders emerge depending on circumstances and what problem the society wants

to solve at a particular time. What is more, leadership is sacrifice and any leader worth his salt, must make sacrifice for the good of the led or constituents.

Medical doctors lost the right to leadership of the medical team in Nigeria when they became selfish and self-centered. They stopped worrying about the well being of the patient. They stopped caring about the well being of the health team and became so consumed with their well being. Doctors either as NMA or National Association of Resident doctors (NARD) have gone on strike more times than I can remember essentially to improve their welfare.

No time have they gone on strike for the improved welfare of the health care team which they claim to lead.

They compete with the Association of senior staff of Universities (ASUU) in calling for strikes, some lasting almost a year.

Talking about ASUU, it is important to realize that ASUU is a trade union whose key objective is to advance the interests of its members in negotiation with their employers.

But we hold the view that the NMA is a professional organization and not a trade union. It is trade unions that negotiate salaries, conditions of service and other employeremployee relations. But of recent we have seen NMA wear the garb of a trade union. What is worse and most disappointing is that NMA, which has failed woefully to seek the well being of the healthcare team, has taken upon itself to oppose any effort to improve the well being of other healthcare team professionals.

In the ongoing JOHESU altercation with the governments of Nigeria, it is surprising to find that NMA has chosen to be the spokesperson for the governments of Nigeria and has become the main opposition to governments’ desire to fulfil its agreement with JOHESU. It is very difficult to understand the motivation of NMA in all these. Since it has elected to go on regular strikes to demand improved salaries and emoluments from government, it is difficult to justify its belligerent opposition to the effort of other healthcare professionals to seek the improvement of their own salaries

and conditions of service.

I am appalled that the minister of health cannot rise above professional pettiness to see that what is good for the goose is also good for the gander. He has allowed the fact that he is a medical doctor to becloud his reasoning. I do not believe that Pharmacists and other healthcare professionals are asking for equal pay with medical doctors at entry to service in the public sector. What they seek is equitable pay and rewards and I do not see how this works against the medical doctors. It is absolute mischief for one professional group to want the best for itself and would shut down Nigeria’s healthcare system for months but will rise up to oppose other groups who raise their voices to seek improvement in their work conditions and remuneration. This is against the law of natural Justice and it is indeed ungodly. Why would doctors oppose everything that elevates the status or professional competence of other healthcare professionals? They oppose any other healthcare professional from having the appellation of ‘Doctor’ after the necessary qualifications.

They oppose the global concept of clinical pharmacy and pharmaceutical care. Just because of ego?

Let me conclude by requesting NMA to restore respectability to the noble medical profession by separating itself from trade union issues. I know that there is a National Association of Government General Medical and Dental practitioners (NAGGMDP) and Nigeria Association of Doctors in University Health Services (NADUHS). These sound to me like trade unions and so can engage their employers on remuneration and working conditions for medical doctors. NMA should shun politics, trade unionism and revert to an association of professionals that will devote its time building professional competence amongst the different cadres of the medical profession, helping to restore the image of medical profession and restoring cohesion to the healthcare team.

Send reactions to: comment@businessdayonline.com

Smart Lagos (4): Status, Prospects & Opportunities

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

Cheap talent, large market agos as a technology opportunity has to be seen from the angle of talent and market.

According to the Global System for Mobile Communications Association, there are more technology hubs in Lagos than in any other city

L

in Africa. Much of the tech industry in Nigeria, at least 70 percent it is reckoned, is in Lagos. Compared to other tech hub cities like Cape Town, Johannesburg, Nairobi, and Kigali, Lagos differentiates itself in terms of potential market size. With a startup ecosystem valued at $2 billion, it is the most valuable African tech city, overtaking Cape Town, Johannesburg and Nairobi. In 2016 for instance, the Lagos tech scene got most of the $109.37 million in startup funding for Nigeria, more foreign capital than any of its African rivals.

(South Africa secured $96.75 million and Kenya got $92.7 million in tech startup financing in 2016.)

The amount of funding is not necessarily reflective of activity, however. Taking a median estimate, about 500 startups worthy of note are probably active in Lagos. Com-

pared to Cape Town, which has more than 1,200, the Lagos tech scene, when looked through the activity lens, is still quite small. The lesser activity versus higher funding suggests there are many more opportunities that probably do not get funded. Looked at another way, the opportunities that eventually bear fruit tend to be hard-won.

Tech companies in Lagos are beginning to realise the need for cost efficiency and patience. Take the case of Konga, the Nigerian online retailer; it could not boast of 200,000 active customers in a country of almost 200 million after operating for four years and spending a lot of money on advertising. So yes, the opportunity exists but it is not easily won either. Despite this, some indigenous companies are making headway. An online retailer that did win in Lagos and is succeeding across the continent, is Jumia, the par-

ent company of which was valued at more than $1 billion as early as 2016.

Established four years earlier in Lagos, the Africa Internet Group, which set up Jumia, is Africa’s first unicorn, a tech company valued at more than $1 billion. Other successes are MainOne, a wholesale internet service provider with a submarine cable of its own that connects South Africa and a couple of West African countries with Europe via Portugal; Paga, a mobile money service provider; SystemSpecs, an e-payment company; and Computer Warehouse Group, a technology provider to the banking sector. These are a few exemplars of what is possible.

Incidentally, tech talent is relatively cheap in Lagos. Software engineers working in Lagos earn only 70 percent as much as their counterparts in Cape Town and Johannesburg. The increased interest of tech giants like

Google, Facebook, and Microsoft in Lagos, is on the back of the recognition of the latent potential in such a large local market. With proper training, support and opportunities for international practical experience, many of the already quite tech-savvy talent pool could do much more.

• The author, Dr Rafiq Raji, is an adjunct researcher of the NTU-SBF Centre for African Studies, a trilateral platform for government, business and academia to promote knowledge and expertise on Africa, established by Nanyang Technological University and the Singapore Business Federation. This article was specifically written for the NTUSBF Centre for African Studies

Send reactions to: comment@businessdayonline.

Tuesday 29 May 2018

C002D5556

COMMENT

BUSINESS DAY

11

comment is free

Send 800word comments to comment@businessdayonline.com

The free trade myth MICHAEL FAMOROTI Michael Famoroti is Chief Economist at Vetiva Capital Management. You can contact him onm.famoroti@ vetiva.com.

“Few propositions command as much consensus among professional economists, as that open world trade increases economic growth and raises living standards.” – Gregory Mankiw irst, in 2016, the United Kingdom turns it back on the European Union after 43 years, ignoring the benefits of unrestricted access to a market worth over $17 trillion. More recently, United States President Donald Trump hiked tariffs on steel imports and other products, escalating trade tensions with China that have culminated in this month’s trade negotiations to defuse the situation. Meanwhile, in Africa, Nigeria and South Africa turned down the opportunity to join the African Continental Free Trade Area. Then, in April, President Buhari refused to sign the Economic Partnership Agreement (EPA), a deal intended to integrate African, Caribbean, and Pacific countries with the European Union. When did protectionism become so popular?

According to the International Monetary Fund (IMF), global economic growth averaged 3.6 percent

F

SOLA ONI Oni, Financial Journalist, Chartered Stockbroker and Commodity Broker is the CEO, Sofunix Investment and Communications

T

he wind of commodity exchange started blowing effectively in Nigeria in 1998 when the Federal Government set up Abuja Securities and Commodities Exchange (ASCE). The said Exchange was registered to trade in commodities such as maize, sorghum and millet at the take-off stage. However, in 2000, the Exchange metamorphosed into Abuja Stock Exchange (ASE) and went live in 2001. The objective of ASE was to provide electronic trading, clearing and settlement. It was also established to trade equities, bonds and plain vanilla.

Unfortunately, ASE was dead on arrival because it was established at a period when the concept of multiple Stock exchanges was fast losing steam due to improvement in Information and Communications Technology (ICT).

By this development, stock exchanges in the same geographical areas were merging for enhanced synergy. The Nigerian Stock Exchange was believed to have capacity to provide market for the entire country by simply expanding its operations through establishment of more branches.

annually in the last 35 years, and in that time, global trade grew by 5.7 percent each year. Post-2010, those two figures stand at 3.6 percent and 3.9 percent. As the idea of free trade has grown unpopular, global trade growth has slowed.

The appeal of free trade rests on the logic of specialisation and division of labour: each country should specialise in the items that they are best at producing (or have a comparative advantage in) and countries should trade among themselves. The result of this simple two-step process is that all products are made at the lowest obtainable cost, allowing consumers to enjoy low prices while also encouraging innovation.

These principles of trade are ancient, but their modern incarnation can be traced to the 19th century.

However, it was not until the end of the Second World War that the free trade train took off, precipitating the longest sequence of economic development in history – at least in the West. By the end of the 20th century, free trade was the accepted doctrine, manifesting in the creation of the World Trade Organization (1995), the enactment of the North American Free Trade Area (1994), and the formation of the Eurozone, the European monetary union that now accounts for a third of global trade.

Meanwhile, the rise of the free trade brigade birthed a new school of economic development thought, led by the IMF and World Bank, exporting the doctrines of privatisation, free markets, and free trade

… the idea that the case against free trade is entirely populist is untrue. In reality, even the staunchest free trade advocates admit that trade comes at a cost; they just underestimated how large and lasting these could be to developing countries. In Nigeria, the Structural Adjustment Program was enacted in the 1980s but never delivered on its promise to reorient Nigeria’s economy, even while citizens bore the brunt of painful liberalisation reforms. That experience is no anomaly; developing countries, in particular, have suffered from embracing free trade, albeit as a result of their own failures. The explosion of commodity exports propelled SubSaharan economies like Nigeria but led to Dutch Disease – the attractiveness of dollar earnings from commodity exports dissuaded leaders from investing in other parts of the economy, eventually leading to wider inequality and under-development.

We cannot ignore the simultaneous rise in protectionism and nationalism. President Trump and Brexit were about a lot more than trade, but we should not understate the impact

of anti-globalisation sentiment in the biggest electoral upsets in modern Western democracy. Many Britons were fed up of perceived overreach from European Union (EU) officials in Brussels, but perhaps nothing united the Brexit brigade more than the false claim that the EU cost Britain £350 million a week – a figure that would be spent on the National Health Service. Populist politicians have realised that anti-trade sentiment aligns with nationalist urges, particularly among low-income groups who tend to be most affected by trade liberalisation. The extent of their success can be seen in the fact that it is hard to tell which came first: economic or political nationalism.

But the idea that the case against free trade is entirely populist is untrue. In reality, even the staunchest free trade advocates admit that trade comes at a cost; they just underestimated how large and lasting these could be. For one, free trade creates winners and losers: the economy may benefit from lower steel prices as a result of reduced tariffs, but the local steel industry would likely suffer. While economics can help us assign monetary values to these costs and benefits, it is silent on their real-world consequences. For example, would a new $10 billion industry or 10% cheaper textile imports compensate for 100,000 redundancies or an increase in the permanent unemployment rate from 3% to 4%?

International trade theory cannot give us answers to these questions.

Once people realised that economists knew the price of everything

but the value of nothing, they began to speak up.

In addition, free trade advocates expect short-term costs concentrated in specific industries, but have always expected these to dissipate in the long run. Their argument is three-fold. First, labour is versatile so people that lose their jobs can always retrain for other roles. Second, the government ought to redistribute resources to the losers out of a larger economic pie. Finally, the benefits of lower prices and better products should outweigh the costs.

Neither of these will always hold.

As early as 1941, Paul Samuelson, a future Nobel Prize in Economics winner, showed that trade liberalisation could depress wages in some industries by more than prices even in the long-run, meaning that some groups would permanently lose out from trade. Furthermore, when we look at Nigeria, we can see how a concept like labour versatility is highly idealised. When trade liberalisation causes worker entrenchment, those workers are unlikely to find alternative unemployment in a county with a rising unemployment rate of 19 percent, population growth rate of 3 percent, and comatose institutions meant to support education and labour market development.

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

Commodity exchange and business model Consequently, ASE ran out of circulation for some years as it became an unpopular venture.

After a long long period, the first privately owned commodity exchange in Nigeria, Afex Commodity Exchange came on board in 2014.

The ASE has now been repackaged as Nigeria Commodity Exchange (NCX) to trade in solid minerals and financial instruments such as futures contracts and other derivatives through intermediation of commodity brokers certified by the vibrant Commodity Brokers Association of Nigeria (CBAN).

Barring unforeseen circumstances, NCX will commence operation soon while CBAN’s chartered status is on the front burner.

But one hopes that bureaucratic bottlenecks usually associated with government’s involvement in business would not make the much awaited approval a forlorn hope. This calls into question the basis for government’s involvement in establishing an exchange or any business whatsoever. It has been canvassed at different fora that government would add value to businesses if it simply restricts its roles to providing physical infrastructure, legal and regulatory framework and access to finance rather than constitute a major risk element to investment plan.

However, there is a paradigm shift in the landscape of

commodity exchange in Nigeria with the historic birth of Lagos Commodity and Futures Exchange (LCFE) being promoted by the Association of Stock-broking Houses of Nigeria (ASHON) in collaboration with Lagos State Government.

ASHON’s Chairman, Chief Patrick Ezeagu and his deputy, Mr Akin Akeredolu-Ale have consistently explained that the exchange would commence operation after the final endorsement by the Securities and Exchange Commission (SEC).

The LCFE is uniquely established to leverage the skills and competencies of its members who have acquired robust training in the operation of commodity exchange.

There are indications that Professor Pat Utomi is working closely with the Edo State Government to set up a commodity exchange. The more the merrier.

The recent report on commodities ecosystem development released by the technical committee set up by the Capital Market Committee (CMC) of SEC posited that investor confidence rests on efficient trading and delivery system.

The report advocated financial inclusion of small scale farmers through co-operative societies and other forms of association to build a competitive commodity exchange.

Also, it noted that it is imperative for the government to review the Land Use Act, Bankruptcy Law and other controversial rules in order to create enabling environment

for commodity trading in Nigeria.

At a period like this, Nigeria is in dire need of commodity exchanges. Commodity trading can create investment opportunities in agricultural value chains, boost industrial output and reduce rural-urban migration. In a regime of commodity exchanges, liquidity is injected into the system as farmers can place their commodities at accredited warehouses, receive electronic receipts that reflect commodity type, quality, quantity and other relevant information.

The electronic receipts are fungible, hence, could be traded as a financial instrument. They can be used as collateral for bank loans as well as storage of products in the warehouses until prices appreciate. Despite the benefits of commodity trading, including price discovery, some people have always expressed fears that commodity trading can do more harm than good. They believe that trading in commodity derivatives can expose traders to the risks associated with futures contracts.

They also expressed concerns that futures’ trading is a haven for excessive speculation which breeds price volatilities and inflation.

According to this school of thought, some commodities lack liquidity while cartels such as Organisation of Petroleum Exporting Countries (OPEC) can bring about price control. They contend that some commodities are so com-

plex that make their price forecasting almost impossible and risk of trading commodity is far greater than equities as margin requirements for commodities are much lower than that of equities.

The fears expressed on commodity trading can never diminish the benefits of this specialized market, especially on the strength of Nigeria’s quest for sustainable economic growth and development Volatility can make or mar a trader. But a smart trader should always realize that speculators provide liquidity by taking up hedgers’ risks. There is no argument that profiting from commodity trading requires skills, steady market intelligence, some elements of luck and strong risk management background.

Promoters of a commodity exchange should develop business models that will factor the critical risk elements and mitigants. After the global meltdown, India government subjected its commodity market to severe regulations.

United States of America has the most active commodity market and it ensures adequate regulation to hedge it against associated risks and fortify investor confidence.

Nigeria should borrow a leaf from the United States in the regulation of commodity market for seamless operation

Send reactions to: comment@businessdayonline.com

12

BUSINESS DAY

C002D5556

Editorial PUBLISHER/CEO

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

Bashir Ibrahim Hassan

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

Tuesday 29 May 2018

Nigeria in the America-China web

I

n April 2016, the Central Bank of Nigeria purportedly signed an agreement with the China Industrial and Commercial Bank of China (ICBC) to allow renminbi transactions among Nigerian banks and the inclusion of the Chinese currency in Nigeria’s foreign exchange reserves. After the announcement, nothing came out of the agreement and we thought the deal was dead.

However, just a few days after President Buhari met with the US President, Donald Trump, at the White House and signed some business deals that will allow for more trade between the United States and Nigeria, the deal came right back and the CBN again announced that it has signed a currency-swap agreement worth $2.5 billion to boost commercial ties with China by providing adequate local currency liquidity to Nigerian and Chinese industrialists and reduce the need to use dollar in their bilateral trade. The deal, according to informed sources, will also help to improve the speed, convenience and volume of transactions between the two countries.

Nigeria appears to be benefitting from the current trade dispute between the United States of America and China.

Since coming to power, President Trump has triggered a trade conflict with China in a bid to reduce America’s huge trade deficit with China. In January, the Trump administration increased tariffs on imports of solar panels and dishwashers from China. He followed it up with further increases in tariffs for steel and aluminium in March. China has also retaliated and both sides have been issuing series of threats with Trump more vociferous and determined to win the trade war between them.

Just like during the cold war, Trump has quickly externalised the conflict, seeking allies and trying to play catch-up to China especially in Africa where the US had hitherto been reluctant in establishing a strong trade presence. The invitation to President Buhari therefore must be seen as the beginning of the Africa phase of the ongoing trade dispute with China. The “United States is currently working to expand trade and commercial ties with African nations, including Nigeria, he said at a joint press conference with the visiting Nigerian leader at the White House. “We hope to be the economic partner of choice for nations across the continent and all around the world.”

Ignoring the damning human rights reports on Nigeria released by the US States Department just days to the meeting that,

going by tradition, would have severely limited American trade and assistance to Nigeria, Trump was more focused on trade with Nigeria and catching up on lost grounds. Immediately after the meeting, Trump announced that his administration has started talking with President Buhari “about taking down the trade barriers” impeding the United States’ trade with Nigeria. Trump did acknowledge that Nigeria is one of the United States’ largest trading partners in Africa but still wants Nigeria to rip “down those trade barriers” to pave way for “growing our trade relationship on a principle of fairness and reciprocity.”

It is not all appeals though and in his characteristic manner, Trump tried to apply the pressure suggesting that giving Nigeria “well over one billion dollars in aid every year” should entitle the US to a privileged trade status with Nigeria, adding with finality “we think we are owed that.”

For African countries and Nigeria especially, the intercourse with China has been beneficial.

Over the last fifteen years, China has poured huge resources into large scale infrastructure projects in most part of Africa. It has financed and built rail projects, roads, airports, stadiums and other capital intensive projects – projects for which either Western and particularly American

companies lack the requisite risk appetite for or charge prohibitive and exorbitant prices for.

Although the Chinese buys mainly commodities from Africa, recently Chinese companies are beginning to diversify their interests into other sectors such as telecoms where they are the leading suppliers of phones and equipments to Africa. Crucially also, Chinese companies are now helping African countries to expand their manufacturing base.

For example, Chinese shoe manufacturers have invested hugely in Ethiopia’s footwear industry, creating more than 4,000 dignifying jobs and exported over $18 million worth of footwear in 2014, according to the Financial Times.

The businessman in Trump has seen all the huge trade potentials in Africa and is ready to wrestle with China to grab them.

But as our leaders and policy makers clink their glasses in celebration for being able to attract both the Chinese and Americans, we must remind them that they need to be careful and mindful of the kinds of deals they reach with these two super powers competing for power and influence around the world. We must be certain of the benefits that we will derive from those deals and be careful not to be caught in the web of the super-power fight.

EDITORIAL ADVISORY BOARD Dick Kramer - Chairman Imo Itsueli Mohammed Hayatudeen Albert Alos Funke Osibodu Afolabi Oladele Dayo Lawuyi Vincent Maduka Maneesh Garg Keith Richards Opeyemi Agbaje Amina Oyagbola Bolanle Onagoruwa Fola Laoye Chuka Mordi Sim Shagaya Mezuo Nwuneli Emeka Emuwa Charles Anudu Tunji Adegbesan Eyo Ekpo

ENQUIRIES NEWS ROOM 08022238495 08034009034 Lagos 08033160837 Abuja

}

ADVERTISING 01-2799110 08116759801 08082496194 SUBSCRIPTIONS 01-2799101 07032496069 07054563299 www.businessdayonline.com The Brook, 6 Point Road, GRA, Apapa, Lagos, Nigeria.

01-2799100 LEGAL ADVISERS The Law Union

MISSION STATEMENT To be a diversified provider of superior business, financial and management intelligence across platforms accessible to our customers anywhere in the world.

OUR CORE VALUES

BusinessDay avidly thrives on the mainstay of our core values of being The Fourth Estate, Credible, Independent, Entrepreneurial and Purpose-Driven.

• The Fourth Estate: We take pride in being guarantors of liberal economic thought • Credible: We believe in the principle of being objective, fair and fact-based • Independent: Our quest for liberal economic thought means that we are independent of private and public interests.

• Entrepreneurial: We constantly search for new opportunities, maintaining the highest ethical standards in all we do • Purpose-Driven: We are committed to assembling a team of highly talented and motivated people that share our vision, while treating them with respect and fairness. www.businessdayonline.com

Tuesday 29 May 2018

BUSINESS

COMPANIES & MARKETS

DAY

13

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

Shareholders okay Forte Oil’s restructuring plans …Proceeds expected to boost earnings

S

hareholders of Forte Oil Plc have given a nod to the proposal of the board of directors to restructure the business by divesting its upstream services , power generating businesses in Nigeria and downstream business in Ghana.

The approval was given by the shareholders at its annual general meeting held Lagos, saying the proceeds from the divestment be used to fund the downstream marketing business.

Forte Oil Plc had said its decision to focus on divests from upstream services and power generating businesses will boost its distributable earnings for the benefit of shareholders.

The Nigerian energy firm has utilized each Naira invested in sales in generating higher profit as margins improved amid a tough and unpredictable macroeconomic environment.

For the first three months through March 2018, net margins increased t0 7.43 percent from 5.69 percent the previous year.

Despite the huge receiv-

ables due from the Nigeria Bulk Electricity Trading Plc, the company is able to utilize a significant portion of its distributable earnings in servicing the acquisition of debt finance.

The above strategy has yielded fruit as leverage ratios has improved, signaling a healthy balance sheet.

Debt to equity ratio fell

to 55 percent in March 2018 from 61.93 percent as at March 2017. This means Forte Oil’s liabilities are 22.80 percent of shareholders’ equity, which is very low and favorable.

Interest coverage ratio is 3.61 times earnings, which means Forte Oil has the financial strength to meet interest expenses as at when

due.

Finance costs reduced by 22.92 percent to N1.21 billion in March 2018 from N1.57 billion as at March 2017. Total debt dipped by 5.39 percent to N32.01 billion in March 2018 from N33.93 billion the previous year.

“Subject to the approval of regulatory authorities, the

directors of the company be and hereby authorised to restructure the company by divesting its upstream services business(Forte Upstream Services Limited); its power generating business(Amperion Power Distribution Limited and its downstream business in Ghana(AP Oil & Gas Ghana Limited) at such time and

such terms and condition as may be determined by directors of the company,” said Akin Olagbende, General Counsel of Forte Oil, while commenting on the resolution of shareholders.

According to Forte Oil Plc, following the significant changes in the oil and gas industry in recent years, it believed that only d ow n s t re a m o p e rat o r s with huge investments in both storage and distribution infrastructures can remain competitive and operationally efficient in the long run.

The company said despite the significant resources deployed the upstream services business has consistently contributed less than seven to the Group earnings in the last three financial years.

Similarly, its downstream subsidiary in Ghana has consistently declared losses after tax in the last three years and has substantial bad and uncollectable trade debts in the business as a result of negative economic conditions and currency devaluation in prior years.

AMCON boss harps on HRD to achieve Govt’s plan for economic diversification

FSD Africa pledges greater support for diamond bank’s financial inclusion projects

M

he Financial Sector Development for Africa, (FSD Africa) an agency funded by the United Kingdom Government through UK Aid has reiterated its commitment to provide more support for Diamond Bank Plc on its financial inclusion drive.

This was stated at a dinner hosted by the Bank in honour of visiting executives from FSD Africa. FSD Africa is a market catalyst that applies a combination of resources, expertise and research to address financial market failures to deliver a lasting impact for an efficient, robust and inclusive market.

Speaking at the dinner, Director, Financial Services, FSD Africa, Paul Musoke said, “We commend Diamond Bank for employing professionalism in all their dealings with us. Even though the agency had partnerships with

anaging Director/ Chief Executive Officer of Asset Management Corporation of Nigeria (AMCON), Ahmed Kuru has called on Nigerians for increased attention to human capital development, science & technology as a way of moving economy away from a resource-based economy to knowledge-based economy.

Kuru, who was Guest Speaker at the 2018 Institute of Directors (IoD) Fellows’ Luncheon held in Lagos in a paper titled “Determinants Of Growth In Transition Economies…” said it was heartwarming to know that the present President Muhammadu Buhari led-government is thinking diversification, which would ultimately launch Nigeria on the path of economic growth.

He said it was a shame that Nigeria has remained where it is today because of some bad decisions of the

past, which denied Nigeria the desired economic growth. He however expressed optimism that Nigeria as a nation with enormous human and natural resources can still make haste and progress from being a third world country to a 2nd and even 1st world country in the not too distant given the right political, social and economic decisions.

Kuru said, “It is good to know that the government has made science and technology a key part of the National Economic Recovery Growth Plan (ERGP), which underscores moving the Nigerian economy away from a resource-based to a knowledge-based model.”

But before Nigeria can leverage this to emerge a strong economy among the comity of nations, the AMCON boss said there was need to discard the negative vices that the country has cemented in its political and social life and adapt the development templates as

well as experiences of other countries around the world that have successfully used such models to change the narratives of their economies. He argued that some of the countries we look up to today as first world countries, decades back, were either worse off than Nigeria or at about the same level with Nigeria.

Again he said, “Broadly speaking, from the experiences of advanced countries including the United States, China, Britain, Malaysia, Japan, South Korea, Singapore to those closer to us like Brazil, Russia, South Africa, what stands as reason or anchors for their progress is simply a commitment to some defined drivers of growth i.e. human capital development, innovation, technology, strong institutions, democracy (freedom of choice) and governance. The two most important determinants are good governance and human capital development.”

T

other banks and organizations across the continent, the partnership with Diamond Bank was essentially our longest and most successful partnership amongst all. We did not only provide funding but also worked closely with the team on ground.”

Responding to Paul’s comments on the successful partnership between FSD Africa and Diamond Bank, Uzoma Dozie, CEO, Diamond Bank, took the opportunity to highlight the factors behind their success.

According to him, “First of all, what I would say is that when we decided to go beyond this journey of redefining how we wanted to engage the Nigerian market, I don’t think that we could have done it using the old ways of banking, which was, you know, doing everything by yourself, and I think our successes achieved so far are

as a result of partnership & collaboration with donor agencies such as EFIna, Women’s World Banking (WWB) and FSDA.” Head, BETA propositions, Diamond Bank, Njideka Nwabueze spoke on how the Bank had worked with Women’s World Banking to close the financial inclusion gap by creating products that would provide customers with access to financial services. According to her, “After extensive research, we launched the BETA proposition in 2013: an account that enabled customers to save towards the rainy day’’.

BETA targets market traders thus supporting small and medium enterprises (SMEs).

The proposition has reached over 600,000 clients (over 70 percent of whom engage in trade). Their savings enhances their ability to manage economic shocks.

14

BUSI

DAY

Tuesday 29 May 2018

Tuesday 29 May 2018

C002D5556

BUSINESS DAY

15

Business Event

Vice President Yemi Osinbajo and Abdullahi Ganduje, Governor, Kano State surrounded by appreciative beneficiaries of FG’s interest-free loans dubbed GEEP-MarketMoni at an interactive session with the Vice President in Kano, recently

Member of Faculty, Lagos Business School, Franklin Ngwu (in bow tie) sounding the closing gong at the Nigerian Stock Exchange with NSE’s Executive Director, Regulation, Tinuade Awe and representatives of Duke Corporate Education, Lagos Business School and BANKSETA Attachments area

L-R Isaac Thompson Amos, chairman/CEO of Thompson and Grace Investment Limited, Lagos; Udom Inoyo, vice chairman, Mobil Producing Nigeria Unltd, Lagos; Wilfred Ukpong, artist, film maker and producer of the “Future World” film, which won the golden film award in the “Eco-Tourism” category in the International Tourisms Borse-Berlin’s Golden City-Gate Film Festival, in Germany; Ute Huschert, and her husband, Wolfgant Jo Huschert, president of German Film Producers Association, at the formal presentation of the award by Nigerian Ambassador to Germany, Yusuf Maitama Tuggar to the artist Friday night at, Abuja. Tuggar received the award on behalf of the artist from the organizers in Germany, in March 2018.

L-R: Sumeet Singh, general manager, Powergas; Deepak Khilnani, director, chairman, Powergas Nigeria; Nella Hengstler, commercial consellor, Austrian Embassy; Johann Rieger, CEO, European Technologies for Africa, and Pulak Sen, managing director, Powergas, at Powergas Austrian CEST event in Lagos.

16

BUSINESS DAY

Harvard Business Review

C002D5556

Tips & Talking Points Schedule your most important work for when you’re most focused

TALKING POINTS Mergers and Acquisitions Are on the Rise $4.5 trillion: Mergers and acquisitions have been soaring since 2012, with global M&A deals valued at over $4.5 trillion yearly for the past four years. + Facebook’s Growing Popularity in Developing Countries 2: Only the U.S. and U.K. are in the list of top 10 countries using Facebook in the developed world. These two countries account for only 13% of users. + Differing Views of Privacy 85%: According to a survey conducted

by Pew Research Center, 85% of Germans said that they favored Europe’s data privacy standards, which are more stringent than those in the U.S. Only 29% of Americans favored the more stringent rules, however. + What to Charge for a Speech $5,000-$10,000: Professionals who are starting to establish their brands with a first book can get $5,000-$10,000 for speaking at a conference, according to Dorie Clark, author of “Entrepreneurial You.” + Tech Power on the Coasts 9: China’s east coast and America’s West Coast are home to nine out of the top 10 internet companies in the world.

Tuesday 29 May 2018

If you’re like most people, you struggle to maintain focus throughout the day.

Maybe you’re distracted by your phone buzzing at your desk, or you can’t seem to stay off email and Facebook during meetings. Instead of beating yourself up, take steps to better understand your patterns.

For one week, pay attention to when your focus waxes and wanes. What times of day are you able to concentrate? When do you find your focus faltering? Most people’s focus peaks in the morning and dips to its lowest after lunch. The pattern varies from

person to person, so learn your specific pattern and use it to plan your day. Make sure your most important activities and meetings are scheduled around the times when your focus is strongest.

Tackle lower-priority items when your focus is weakest. And don’t give in to distractions — notice what kinds of things derail you and do your best to avoid them.

(Adapted from “Are You Having Trouble Focusing? These Simple Strategies Will Help,”

by Rasmus Hougaard and Jacqueline Carter.)

No, really, don’t email your team on the weekend In theory, you should be able to catch up on work whenever you want. But as a manager, you have to be aware of the signals you’re sending when you email employees after hours or check in about projects on the weekend. Many people will see these things and think, “My boss is working, so I need to work, too.” So if you decide to check email on Sunday evenings, for example, don’t message your employees until Monday. Or, if you truly do need to send some emails, be very clear with your team that you don’t expect anyone to read them or respond during the weekend. You can also write the emails but leave them in your drafts folder until the next morning, or schedule them to be sent later (if your email program allows that). That way you can be productive without interfering with your team’s time to recharge.

(Adapted from “If You Multitask During Meetings, Your Team Will, Too,” by Ryan Fuller, et al.)

Take your career development into your own hands

To get more comfortable with conflict, Don’t Let irrational fears derail your public speaking stop making it personal

We all want t o i m p rov e at work, but sometimes it feels like you’re the only one invested in your development.

If human resources or your boss isn’t giving you what you need, what can you do? One option is to use feedback to find out where you need to grow. For example, after a presentation or a big meeting, tell your boss one thing that you think went well and ask for advice on one thing you could improve. Use a journal to track what you should work on. List the competencies you need to develop, and rate yourself on them according to the feedback

Many people feel anxious about speaking in front of a group, but remember that some fears are real and others aren’t.

(Running out of time should worry you; being booed by your audience should not.)

To focus on the realistic concerns, draw three columns on a piece of paper.

List your fears in the first column. In the second, write the worst thing that could happen if those fears come true. And in the third column, note the best thing that could happen. For example, you might be afraid of tripping onstage while you talk. The worst-case

you’ve received. For example, if you’re a brand marketer, you might give yourself an A in advertising development, a B in pricing analysis, and a C in trade marketing. Focus on the C’s to close your skill gaps, and monitor your progress over time as you get more feedback.

(Adapted from “6 Ways to Take Control of Your Career Development if Your Company Doesn’t Care About It,”

by Carter Cast.)

scenario might be that someone films it, posts it to YouTube, and it goes viral. But the best thing might be that it reminds your colleagues that everyone is human, and then more people discover your work because of the extra buzz. Use this tool to make sure you’re being realistic about your fears.

(Adapted from “5 Ways to Get Over Your Fear of Public Speaking,” by Mark Bonchek and Mandy Gonzalez.)

Conflict is a normal, healthy part of working with other people. And yet many of us avoid it at all costs — often because it feels personal. To get more comfortable with disagreements, and to reap the benefits of productive conflict, let go of the idea that it’s all about you. If you model that you’re comfortable with productive conflict, you’ll show your team that it’s OK to disagree, encouraging people to raise their ideas. To move a work conflict away from the personal, think about the bigger picture and the business’s needs. Disagreements often arise over objectives and processes, for example. When

c 2017 Harvard Business School Publishing Corp. Distributed by The New York Times Syndicate

you and a colleague have different views about something, ask yourself: Why is this difference of opinion an important debate to have? How will it help the organization or the project you’re working on? The more you can keep a conflict focused on the business, the better chance you have of resolving it in a way that benefits everyone.

(Adapted from “Why We Should Be Disagreeing More at Work,” by Amy Gallo.)

Tuesday 29 May 2018

C002D5556

APCON intensifies moves to blacklist un-licenced firms …Licencing committee meets this week to assess registration compliance level Stories by Daniel Obi Media Business Editor

A

PCON’s Corporate Licensing Committee will meet this week to assess industry practitioners’ re-licencing compliance level. This is an effort to identify unlicenced agencies towards blacklisting them.

The committee has so far inspected about 200 agencies which make about 80 percent of all the agencies in the creative, media specialists and out of home business towards sensitising them on the need for re-licencing.

The Committee Chairman, Lekan Fadalapo who is also the Executive Director/CEO, Association

of Advertising Agencies of Nigeria (AAAN) told BusinessDay recently that so far, some have complied. He did not give figures.

It is not really clear why some agencies are being pushed to relicence their agencies but an analyst linked it to non-absence of APCON board. “With absence of APCON Council, there is little the management can do to enforce some rules and manage the industry”, he said.

Buhari led government has not shown enthusiasm in re-constituting APCON council, three years, the council was dissolved.

APCON had late last month sent out warning that agencies that were not re-licenced by May 1 will face the music.

The council also warned that advertisers who patronise and engage

un-licenced agencies for business are working against the law and will be prosecuted. To avoid confusion on licenced or un-licenced firms, the Council through its Ag Registrar/ CEO Ijedi Iyoha promised to make the list public. She also assured that the council will inform Advertising Agencies of Nigeria, ADVAN and other relevant stakeholders on its resolve to prosecute un-licenced agencies after May 1, 2018.

“The question is for how long we will keep condoning those that are not willing to be licenced. We met as a committee and we agreed that come May 1, 2018, we will come up with publication of those that have been licensed and those that are yet to be licenced.

“We are saying that it is now illegal for advertisers to engage agencies that are not registered with APCON for any advertising business.

We expect them to make use of those that are duly and legally registered with APCON. The advertisers will be sanctioned if we find them wanting because it will be illegal business”, Iyoha said. Iyoha stepped in as Ag Registrar early this year following the retirement of former Registrar/ CEO, Bello Kankaroffi.

She encouraged all the agencies to come to APCON and check their corporate status for membership. According to her, the aim of relicencing is to sanitise the industry going forward.

BUSINESS DAY

17

AAAN appoints Udeme Ufot, Enyi Odigbo, Lolu Akinwunmi as BOT new members

A

ssociation of Advertising Agencies of Nigeria, AAAN has appointed three top advertising practitioners into the board of the association.

They are Group Managing Directors of SO&U Limited, Udeme Ufot; Casers Group, Enyi Odigbo; Prima Garnet Africa, Lolu Akinwunmi.

Others retained in the board are Steve Omojafor, founder of STB McCann and Bola Thomas, chairman of LTC Advertising.

Lolu Akinwunmi

Udeme Ufot

Enyi Odigbo

The newly appointed three top advertising practitioners replaced Ayo Owoborode, the CEO of ServeWell Limited; Akin Odunsi, chairman of Rosabel Group and Biodun Shobanjo, founder of Troyka Group who retired after serving the association for 13 years.

Appreciating the roles the board members played in the life of the association, AAAN president, Kayode Oluwasona said the board members have guided and led the association with uncommon skills and experience. “They successfully opened doors for the association in several key circles, suggested policy directions and offered wise counsels which have contributed immensely to the sustainability of the association in the industry” Recognising that the economy is facing hard times and the advertising industry is not immune to it, Kayode believed that the new BOT members have what it takes to guide the association through the journey.

NBL’s initiative to change poor perception of teaching profession gains momentum

T

eaching profession was highly reversed pre-1980s.

Teachers, police and some other professions were respected and adored. This encouraged and attracted more people to the professions.

Most of the teachers who were very intelligent and passionate about the job produced disciplined Nigerians and technocrats for running the economy. In retirement, the teachers were equally respected by the society.

Fast forward to present day, teachers have become forlorn, neglected and pitied. It is no more an attractive profession. This is evidenced in the low number of students seeking admission to read education in universities. Even some of the teachers today don’t feel dignified about the job while some others see it as a temporary job for them. Also parents threaten teachers who attempt to discipline their children. With this, determination to impart knowledge is waned and this has serious implication for the economy.

The apathy to teaching profession and the disregard to teachers

are largely informed by poor remuneration. Okechukwu Okoroafor, Assistant General Secretary, Nigerian Union of Teachers, blamed the era of military regime for the sliding curve of teacher perception. According to him, there were appointments of round pegs in square holes who never understood the importance of teaching profession. Today, the nation is producing some half-baked graduates who are not employable. The economy suffers this result.

NBL Intervention Tracing the poor quality of graduates and education to poor attention the teaching profession receives, Nigerian Breweries Limited, NBL in 2015 established Maltina Teacher of the Year award under its Felix Ohiwerei Education Trust Fund to lift the standard of teaching profession.

The Managing Director of NBL Jordi Borrut Bel explained that the initiative was hinged on the realisation that teachers seldom get the recognition they deserve in spite of the pivotal role they play in determining the quality of education. Jordi was represented by Kufre

Ekanem, corporate affairs adviser at the unveiling of the 2018 edition of the award.

The initiative has so far produced 69 state champions and three overall winners. The multinational company recently flagged off the 2018 edition of the award.

As usual, the overall winner in 2018 will get N1 million, a trophy and another N1 million every year for the next five years, and a block of classrooms built at the school where he or she teaches.

The first runner-up will receive

N1 million and a trophy, while the second runner-up will have N750, 000 and a trophy. In addition, each state champion, including the winner and the first and the second runners-up will get N500, 000.

Last year’s winner Udochukwu Ariguzo said that the prize to him and to the school has made a lot of impact within the community and in the schools around the community.

He urged the government and other corporate organisations to emulate the example of Nigerian

Breweries and motivate teachers so as to improve the standard of education in the country.

In a paper to formally commence this year’s edition, the Head of Department of Educational Foundations at the University of Lagos, Ngozi Osarenren explained that teachers are invaluable drivers of societal norms and the teaching profession must be respected to attract the best and the brightest.

Osarenren, a former Commissioner for Education in Edo State, noted that if Nigeria must be saved from the menace of unqualified and incompetent teachers, the nation must find career oriented teachers who want to do the job for their passion and not because it is the last option available.

She listed other factors that could attract the best hands to the profession to include professionalisation of teaching, reasonable and guaranteed salary, job security and competitive entry requirements for would-be teachers.

Nigeria should make teaching profession attractive once more to boost the economy.

18

BUSINESS DAY

C002D5556

Tuesday 29 May 2018

Marketing&Pr How to market to Africa’s resilient, ambitious middle class Louise Marsland

A

frica’s middle class is more than 100 million strong (excluding South Africa), with a combined monthly spending power of R1.3 trillion. How do you market to this extremely aspirational segment?

This was the question asked and answered at the UCT Unilever Institute of Strategic Marketing African Lions workshop, in association with Ipsos, in Cape Town recently where ground breaking research on the African Lions - Africa’s middle class, was presented as part of the game changers series.

The study, which took over 18 months to complete, examined demographics, living conditions, work, aspirations, media consumption, buying patterns and brand relationships, across the middle class on the continent. The researchers were careful to explain that Africa’s middle class differs from what we know as South Africa’s middle class.

Ogilvy and Mather South Africa group strategy director, Neo Makhele, presented the portion of the workshop on the attitudes and behaviours of the sub-Saharan middle class, and what they do to sustain their livelihoods, taking a closer look at their livelihood strategies, aspirations, shopping behaviour and relationship with brands, as well as what they did for entertainment and to relax.

It’s all about the “hustle”, explained Makhele. Many work two, three, even four jobs to stay above the poverty line. And it is this diverse economic model which is how the middle class in Africa – these proud and resilient African Lions – continue to grow and build an entrepreneurship model that is necessary in the stark reality of a lack of formal employment opportunities.

It is all about whom you know and having more than one business opportunity. Makhele set out in detail what sets this market apart and how they sustain themselves on a daily basis: Manage their finances well. Peo-

ple are enterprising and entrepreneurial. Having their own business is the ultimate goal to secure their financial future as jobs in formal employment are limited and not always seen as sustainable. Only 37% of people across the continent are in formal employment.

Ensure a diverse stream of income. The informal sector accounts for 93% of new jobs across Africa and 61% of urban employment. Many have a side business.

Are able to stretch themselves.

A key characteristic of the African middle class is that they have a plan and are disciplined and prudent in their expenditure due to the fact that they have limited financial flexibility – only 37% have money left over month end. They use cash mainly, 11% have credit cards, and thirdly, Mpesa. They will borrow from trusted sources, such as family (56%) and friends (52%), rather than the banks (only 34%), and 19% belong to savings groups. They operate in an unstable economic environment and are able to sustain a living, but have to “hustle” to do it, as they describe it. There are also added pressures, such as inadequate healthcare, family obligations, and others, such as in the rental market in Nigeria, where it is customary to pay one’s rent one to two years in advance.

Cement what they have. Savings are critical to this market in order to be prepared for emergencies. Poverty is all around them and there is a fear of “slipping back”. So 74% have a savings account and 64% have another source of income.

Expect the unexpected. Research showed that they also need to budget for unexpected illness, death, car or home repairs and family responsibilities.

Connected. Their mobile phones are an extension of themselves. They speak about them as critical to their business lives, personal lives and cannot live without them. Descriptions of their phones ranged from: “My phone is my heartbeat”, “a clever wife”, “it is my life”, “it is my everything”, “it is my hustling”, “it gives me jobs”… Overall, 77% have smartphones, 33% have a tablet and

49% of African Lions have a computer.

Networked. This is a very networked market and networking is seen as crucial to landing jobs, earning an income and communicating with everyone necessary. If you are not networked, you cannot earn a living. It is all about who you know and your connections to finding work or creating a new business. 83% access the internet via a smartphone, 45% use Facebook regularly, 28% are on WhatsApp, and 18% use Twitter.

Look the part. A view that resonated across geographical boundaries was the fact that if you want to be successful, you have to dress like a success.

This one quote summed it up the best: “Dress in a way that you want to be addressed”. Image is everything and this market will go all out to create a good first impression. They are well dressed and want to be seen as well-educated and as business leaders. They also don’t want to be regarded as poor, but as successful. Their online presence is also carefully curated.

Don’t get sick. In South Africa, access to medical care is taken for granted. This is not the case across the rest of Africa, where good healthcare facilities are sporadic. 62% say they have never visited a dentist and 29% have never visited a doctor. Only 44% said health insurance was necessary and only 11% actually have health insurance. The cost of medication is also high. Therefore prevention is key and a good diet and exercise are valued.

Eat right. Traditional food is viewed as more healthy and nutritious than store bought food in many instances, and is also tied to culture as a source of nation pride and cul-

tural celebration. When store bought products are consumed, the African Lions will scrutinise product label information in order to control their intake of salt and sugar.

Don’t go it alone. This market shares their income with family, they are helped by family, and they send money home. This is another key reason for financial prudence and savings. They are very clear that they are working for a purpose.

Think about the future. Middle class Africans are very optimistic about the future and most believe that their circumstances will improve in the future. Everyone seems to have a five year plan, from the interviews broadcast at the workshop, and they are constantly developing ideas for new businesses or making plans to study further, attending night classes, reading up on a new skill.

Keep the faith. Faith is a strong thread throughout their lives and 77% attend religious gatherings at least a few times a month. Only 7% said they had never attended a religious gathering. Religion and festivals have a strong cultural influence and are also considered key points of contact and networking.

Enjoy the journey. “Africa is like a hard iron so you need to work hard”, is a quote that comes up, but most are optimistic and happy about their prospects. 83% spend time with family, 80% with friends, 67% at the hairdresser and on other hobbies, including traditional ceremonies, bars and clubs. Music and dance are integral to relaxation and entertainment, reported Makhele.

Culled from Bizcommunity

Peak Milk unveils Nigeria’s largest Chocolate Cup

F

rieslandCampina WAMCO Nigeria PLC, maker of Peak Chocolate Full Cream Milk Powder has unveiled a 10foot high chocolate cup in celebration of Children’s Day and ahead of the World Milk Day on June 1.

The unveiling which took place at JJT Park in Lagos in partnership with the Nutrition Society of Nigeria was attended by more than 2,000 children, parents and guardians.

Speaking at the event, Gloria Jacobs, Brand Manager of Peak Chocolate Full Cream Milk Powder,

stated that the essence of unveiling the giant chocolate cup was to re-emphasize the importance of nutrition whilst creating excitement among the children.

“With this year’s event, we wanted to show something spectacular and never-been-done feat to Nigerian children and particularly impress on them the importance of good nutrition by taking Peak Chocolate and Peak 456 daily for optimal growth and brain development because both contain adequate vitamins and essential nutrients” Jacobs said.

Also speaking at the event, Akon Imoh, Senior Brand Manager, Peak 456 Growing Up Milk explained that to demonstrate the versatility of milk in everyday foods, the children were encouraged to prepare daily recipes with Peak 456 and Peak Chocolate as a follow up to their Peak masterclass.

The children then produced pancakes, chocolate cakes and doughnuts, and banana smoothies to the amazement of their parents. There was also a masterclass for mums to highlight the nutritional benefits of adding milk to their children’s daily foods.

Rounding off, Maureen Ifada, Marketing Manager, Peak, reiterated that the Peak brand is synonymous with quality and high standards, and so always goes a step further in providing the best nutrition required for daily living.

Chivita Active Fruit Nectar wins Brand of the Year award

Millionaires to emerge in StarTimes World Cup promo

A

s part of activities leading to the Russia 2018 FIFA World Cup, StarTimes is rewarding 1 lucky subscriber with N1 m every week for 14 weeks, until July 31.

t the recently held annual Lagos Chamber of Commerce and Industry (LCCI) 2018 Awards to celebrate iconic brands and corporate institutions that have distinguished themselves, Chivita Active Fruit Nectar emerged as Brand of the Year. The event was attended by prominent business leaders across various sectors.

The LCCI’s Brand of the Year 2018 Award is seen as a befitting recognition for a brand that has maintained top position through superior quality and an innovative approach to integrating active con-

sumer lifestyle and their needs, and reinforces Chivita Active’s growing popularity as a high quality wholesome fruit juice and an enabler for a healthy active life.

Speaking on the awards, DirectorGeneral, Lagos Chamber of Commerce and Industry, Muda Yusuf, stated that the annual LCCI Awards recognizes, celebrates and promotes institutions and brands that have exhibited the core values of best business practices, growth through innovations and have positively impacted the society. ”Our Brand of the Year, Chivita

Active, emerged the top brand in the highly competitive category following a pain-staking selection process, robust research and extensive market intelligence. The brand has grown through innovation and it’s positively impacting on society by encouraging consumers to embrace wellness through active health,” he stated.

Responding on behalf of Chi Limited, the company’s Managing Director, Deepanjan Roy, expressed his heartfelt appreciation for the LCCI’s Brand of the Year recognition to Chivita Active Fruit Nectar.

A

According to the pay-TV giant, winners will be drawn from across the country, selecting only from a poll of subscribers who pay for one month and above on any of its bouquets and new subscribers who purchase a new decoder for the first time.

Explaining further, Qasim Elegbede, the company’s Brand and Marketing Director, Qasim Elegbede in a statement encouraged Nigerians to seize the opportunity to become millionaires, adding that it was a once in a life time opportunity for Nigerians to truly experience the World Cup frenzy like never before.

Tuesday 29 May 2018

C002D5556

BUSINESS DAY

19

Energy Report Oil & Gas

Power

Renewables

Environment

METKA boosts electricity access in Nigeria with EXERON launch OLUSOLA BELLO

E

XERON, the most advanced hybrid off-grid system, has been launched in Nigeria, and it promises to boost access to power supply particularly in off-grid locations.

A unique and innovative power conversion system that provides reliable power in non-electrified regions and unreliable grid locations.

EXERON is the most advanced hybrid off-grid system delivering uninterrupted output power through intelligent control of various energy sources, including solar panels, wind turbines, the electrical grid, and/or diesel generators.

The product came to being a result of the combination of resources and expertise of METKA and International Power Supply (IPS), a strategic business unit of MYTILINEOS S.A,

L-R: Christos Takoulas, METKA sales manager, Off-Grid/Hybrid Solutions; Emmanuel Elegbe, operations manager, West Africa; Dimitrios Triantafyllopoulos, projects director; Anita Otubu, head of special projects, Rural Electrification Agency; and Evangelos Kamaris, business administration & international operations director, METKA at the Nigeria launch of Exeron, the most advanced hybrid off-grid system, in Lagos.

leading international EPC contractor and industrial manufacturing group.

Explaining the federal government position on making the rural dweller having access to electricity through off grid system during the launch, Anita Otubu, head of special projects, Rural Electrification

Agency (REA) noted: “Our sole mission at the REA is to provide access to reliable electric power supply for rural dwellers, and the launch of EXERON in Nigeria is a welcome development as it would contribute significantly to the realization of our objectives.”

Dimitrios Triantafyl-

F

ollowing the passage of the Petroleum Industry Governance Bill (PIGB) which is expected to radically reform the oil and gas industry by the national assembly, the Management of the Nigerian National Petroleum Corporation (NNPC) is fine-tuning strategies to enhance its position as a fully integrated national energy company.

Analysts are of the view that if the corporation can carry through these strategies planned to put itself at the fore front of commercial operation of the oil and gas industry, the economy would be better for it.

They said the corporations needs to re-strategies if it want to be reckon with as a serious national oil company.

If the PIGB is signed into law any moment from now

by President Muhammadu Buhari as envisaged by industry watcher, it would create room operations of the oil and industry to be more efficient .

The NNPC would have been stripped of a lot of responsibilities it carrying today to make more efficient.

The strategies considered

by the corporation included reviewing Key Performance Indicators (KPIs), setting realistic targets for immediate sign-off, as well as spending items capable of improving the organization’s bottomline.

Other strategies the corporation plans to deploy are expediting action on the holistic rehabilitation of the refineries; strengthening internal control mechanisms and intensifying exploration efforts in the frontier Basins.

Maikanti Baru , group managing director of the corporation disclosed this at this year’s NNPC First Quarter 2018 Top Management Steering Committee (Steerco) Meeting held at the NNPC Towers in Abuja, weekend.

The NNP C boss who admitted the tremendous changes at play in the Petroleum Industry landscape globally, said it behooved oil companies to, as a long-time survival strategy, adapt to the changes for efficiency, growth and profitability.

Ndu Ughamadu, group general manager, Group Public Affairs Division, in a press release signed by him stated that the NNPC chieftain said the changes witnessed in the industry over the last few years call for some action on the part of the organisation.

This is because as a business concern, the corporation cannot live in isolation in the Industry and therefore, it must act now.

“Today, we are reviewing the mission and vision of the corporation and have also ventured into renewable energy and power sectors,” Baru added.

Henry Ikem-Obih, chief operating officer (COO), Downstream, while speaking said a lot of work had been done towards getting NNPC on the same pedestal with its peers, even as he commended the commitment and the resolve of the GMD at investing in NNPC’s downstream supply and distribution assets.

Obih stated that now, the corporation’s focus in the downstream sub-sector revolved around imbibing world-class culture, implementing best practices, focusing on cost reduction, improving efficiency, deploying cutting-edge technologies and having a clean balance sheet that reflects NNPC’s corporate business vision.

“Gradually, we are repositioning from an intervention engine for the nation to one that is ready to make profit, grow and create value for our teeming stakeholders,” Obih stated.

Olusola Bello, Team lead, Analysts: Kelechi Ewuzie, Isaac Anyaogu, Graphics: Joel Samson.

tomorrow’s energy needs; power upgrade takes just a few seconds and no tools are needed.”

Off-grid applications represent a quickly growing segment of the global power solutions market, and Nigeria is no exception. To this end, the federal government instituted the Rural Electrification Fund (REF) to enable more private sector participation in power projects such as grid extension, interconnected mini-grid, isolated minigrid, isolated micro/nano grids and stand-alone systems. A minimum of $10,000 (N3.5m) and maximum of $300,000 (N106m), or 75 per cent of the total project cost, whichever was less, could be given as grant.

METKA IPS is well positioned to meet the challenges of the rapidly growing hybrid and off grid power market, serving the needs of customers in Nigeria and around the world with affordable and efficient solutions.

Residents say lack of pre-paid metres encourages unfair billing

NNPC Fine-tunes Strategies to meet challenges of post PIGB OLUSOLA BELLO

lopoulos, METKA Project director, while speaking on how the system works said: “EXERON intelligently combines various power sources with battery storage to reliably provide base load power. Battery banks are used to store energy for later use at night time, for peak shaving during daytime or to provide

resilient energy to the load during grid outages. It is an affordable and efficient solution suitable for a wide range of applications, including residential, industrial, oil & gas, telecoms, defense and security.”

Detailing the features of the product, Emmanuel Elegbe, Operations Manager, METKA West Africa, said EXERON is a complete energy management system. As such, no costs and time are needed for integrating parts from various manufacturers. The system comes preconfigured from the factory, allowing for quick and easy installation.

“In addition, the intelligent battery management system is able to extend the life of the storage system up to 30%. And because the system’s modular architecture allows load sharing between modules, the output power remains unaffected in the rare case of failure. Another key advantage of EXERON is that the modular system can easily be scaled up to meet

…As DisCos gasp for air STEPHEN ONYEKWELU

H

ouseholds in Agia Estate, Comfort Oboh, Kirikiri Industrial area, and environ, will have to live in unlit houses at night, loud generator noise, air pollution and regular power outages as they await delivery of pre-paid metres.

It came to a head in January, 2018, when most of the residents who had travelled for the Christmas festivities returned to the sight of electricity bills that were in most cases over 50 percent of what some of the residents paid before the Yuletide. This context is necessary because five months later, May 2018, the problems linger and cause discomfort to residents in the estate.

“We are going to stop paying these outrageous electricity bills. I averaged N15, 000 for electricity bills between January and November 2017, travelled to my village for Christmas and at least for two weeks in December I was not around, my electricity bill was N24, 000” said Julius Onyeama, a resident that lives in two bedroom apartment, on 07, Okey Ufoh street, Comfort Oboh.

Residents of this estate had in January gone on protest march to the Festival of African

Culture (FESTAC) town office of the distribution company responsible for their lot. They company’s area head promised reduction in the tariff but that everyone should return and pay at least half of what they were billed. This happened but the electricity bills in the estate have resumed their northward trajectory. Residents say, prepaid metres provides solution to this problem.

The distribution company had in a tete-tete with management of the estate said they are constrained and have limited number of pre-paid metres in stock.

Distribution Companies (DisCos) in Nigeria face a peculiar challenge. They seem not able to generate enough revenue in order to operate profitably.

Eight of the 11 electricity Distribution Companies (DisCos) have remitted N11.38 billion only from the invoices of N44.44bn they received from Generation Companies (GenCos) for the electricity they purchased in February 2018; data from the Nigerian Bulk Electricity Trading PLC (NBET) has shown.

The update of monthly remittances for the 3,225 megawatts hour per hour (MWh/h) energy consumed by the DisCos posted on the website of

NBET showed that the payment represented a paltry 25.62 per cent payment of the invoices.

BusinessDay’s examination of the financial statements of seven DisCos indicate that they are veering dangerously close to full blown bankruptcy with reported losses of over N196.23 billion to end the 2016 financial year.

To help improve the solvency ratio of DisCos, the Federal Government had considered raising its stake in the DisCos to 60 percent from 40 percent, BusinessDay learnt. But people with deep knowledge of the proceedings say hurdles against this move are enormous.

Analysts say for the Federal Government to succeed with the plan, it has to buy out the DisCo debt as equity, ensure that electricity tariff are marketbased, and help DisCos get return on investments on their assets.

The action would also need to be in line with the Put/Call agreement government signed with DisCos. Experts have urged government to dilute the shares of the core investors in the DisCos using the funding clause in their performance agreement as a way of resolving the current shortfalls in the electricity market currently valued at about N1 trillion.

Email: energyreport@businessdayonline.com, Tel: +234-8023020011; +234-7037817378; +234-8036534708

20

BUSINESS DAY

C002D5556

Tuesday 29 May 2018

Energy Report

Tellcol Europe Nigeria deepen off-grid energy investment with SolarLed solution …Woos MSMEs KELECHI EWUZIE

A

ligning with Nigeria’s energy prospe cts for the future, Tellcol Europe Nigeria in strategic partnership with TELLCOL EUROPE has unveiled SolarLed solutions to deepen renewable energy needs of the country.

The investment is in response to the Federal Government clamour for private sector involvement in power solutions and further reiterates government commitment to diversifying the economy through creating favourable climate for both local and foreign investors.

Power is a critical component of the nation’s infrastructure and renewable energy is an inextricable growing pathway of the future supply mix now disparagingly needed for Nigeria, without which future sustainable economic growth and development will be a mirage.

A larger percentage of Nigerians power their businesses and homes, depend-

ing on fossil fuel at a frightening cost of nearly $14 billion or N5 trillion yearly, with added negative public health and other socio-economic hazards.

Nigeria presently has the biggest and most attractive off-grid opportunity in Africa, and one of the best locations in the world for mini-grids and solar home systems says Wale Omole, Chairman, Tellcol Europe Nigeria.

The SolarLed solution according to Omole presents an opportunity for the development of robust offgrid alternatives to complement the grid network that creates, through a $9.2B/ year (N3.2T/year) market opportunity for mini-grids and solar home systems that will save $4.4B/year (N1.5T/ year) for Nigerian homes and businesses.

Omole observe that the solution will unlock a never yet seen scale of massive powering of MSMEs sector in a most efficient, affordable (PocketFriendly) and sustainable manner, with co-benefits of socio-economic and demonstrable livelihood benefits for the climate, homes, farms,

healthcare facilities, communities, businesses.

According to him, “Continuous investment by private sector in off-grid innovative solutions will tackle the electricity challenges that Micro Small and Medium Enterprises (MSMEs) face and unshackle them to contribute to economic development.

“That will soon impact enormous market opportunity in Sub-Saharan Africa

and across the continental Africa with over 600 million people in countries with smaller demand and/or lessrobust economies”, he said.

He further said that electrification has the added advantage of opportunity to make work more productive, living safer, more gratifying, and promote higher standard of living in an enviable developing economy that will soon be seen as continental envy among African

AzuriTV named ‘Innovative Technology of the Year’ at Africa Utility Week Industry Awards

BHGE partners TREXM Oil & Gas Services to launch innovative metering solution ISAAC ANYAOGU

B

aker Hughes, a GE company in partnership with local firm, TREXM Oil & Gas Services, has unveiled its latest innovative metering solution in the Nigerian market known as Sentinel LCT8 to help players in the oil and gas sector cut costs, reduce risk, and increase their operating efficiency.

The new solution was unveiled at a technology seminar on custody transfer metering in Nigeria featuring oil and gas operators and regulatory bodies and hosted by the US Consulate’s Commercial Desk in conjunction with BHGE and TREXM Oil & Gas Services at The George

Lagos Hotel in Ikoyi, Lagos.

According to a release by the company, the Sentinel LCT8, the latest addition to the high-accuracy line of ultrasonic flow meters from BHGE, delivers custody transfer-level measurement, even in the unstable conditions typical of pipelines.

With eight measurement paths, it gives operators better visibility into activities in their pipelines, helping them make informed decisions and minimize risks.

Unlike older mechanical technologies like the turbine and positive displacement that are subject to wear and Coriolis meters that have pipe size limitations, ultrasonic advantages include no drifting or required periodic

calibration, no pressure drop, no restriction in the pipe, no moving parts and no filters or strainers to wear out.

Ado Oseragbaje, chief executive officer, Sub Saharan Africa, Baker Hughes, a GE company (BHGE), said the launch of the product was a continuation of the company’s efforts to aid the growth of Nigeria’s oil and gas sector, and expressed the belief that the new Sentinel LCT8 will help tackle some of the challenges currently being experienced by operators, including high cost of maintenance of pipelines.

“In pipeline flow metering applications, miscalculations or false alarms cost money.

The right technology, like the Sentinel LCT8 can reduce the uncertainty inherent in flow measurement. It gives pipeline operators confidence in their process measurement and the insight they need to avoid problems when revenue, the environment, or reputations are at stake,” Bolu Bolutife Odusanya, chief executive officer, TREXM Nigeria said.

In addition, Oseragbaje commended US Embassy Commercial Desk for partnering with BHGE to organise the conference which provides an opportunity for oil and gas operators and

member states.

To him, “It is also recognised that electric supply system also supports other critical infrastructure systems such as transportation, healthcare facilities, water supplies for cities and farms, manufacturing centers and business ecosystems”.

Aisha Abubakar, Minister of State , Federal Ministry of Industry, Trade and Investment said government believe that supporting small

businesses through promoting green Micro Small Medium Enterprises initiatives is essential for increasing productivity, job creation and boosting Nigeria’s economy by mitigating the effect of climate change and epileptic power supply in the country.

Abubakar observe that the capacity of MSMEs in Nigeria to perform the critical role as the engine growth development, industrialisation , wealth generation and empowerment creation is hampered by numerous challenges such as access to finance , access to modern technology , government policy inconsistency , unfair competition from imported goods , multiple taxes and levies , skill gap due to unskilled labour among others.

“Micro, Small and Medium Enterprises all over the world have played and continue to play significant roles as the driver of economic growth and development of many economies and Nigeria not being an exception recognises the relative important of MSMEs in contributing to socio-economic development of the country” said Abubakar.

ISAAC ANYAOGU regulatory bodies in the sector to interface.

Speaking in the same vein, Brent Omdahl, Commercial Counsellor, U.S. Mission to Nigeria said the seminar was designed as a platform for interaction between oil and gas operators and regulatory bodies, as well as to introduce the latest trends in liquid custody transfer metering in the Nigerian market.

He disclosed that BHGE, working in conjunction with TREXM, has satisfied all the custody transfer metering requirements as set by the main regulatory body in the Nigerian oil industry, culminating in the acquisition of an official approval for ultrasonic flow metering to be used for the said purpose.

Baker Hughes, a GE company (NYSE: BHGE) is the world’s first and only fullstream provider of integrated oilfield products, services and digital solutions. We deploy minds and machines to enhance customer productivity, safety and environmental stewardship, while minimizing costs and risks at every step of the energy value chain. With operations in over 120 countries, we infuse over a century of experience with the spirit of a startup – inventing smarter ways to bring energy to the world.

A

zuriTV, the first complete home TV payas-you-go package for off-grid households, developed by Azuri Technologies, has been announced winner of the ‘Innovative Technology of the Year’ award at the annual Africa Utility Week Industry Awards, honouring pioneering projects and people in the industry.

Azuri Technologies, a commercial provider of PayGo Solar Home Systems to rural off-grid communities, was commended for its innovative solar TV service at the awards ceremony held in Cape Town.

The AzuriTV service allows consumers with no access to the grid to receive up to 60 channels of content on a solar powered 24” TV, at a cost of less than 1 US$ per day. Customers don’t have to purchase separately a dish or set-top box as everything is included in the package. There are also four LED lights for use inside and outside the home to give customers more choice on how they light their homes.

“We are delighted to be awarded the Innovative Technology of the Year award for AzuriTV and to be acknowledged by the industry and our peers for our work and the difference we are making in Africa,” said Simon BransfieldGarth, CEO at Azuri Technolo-

gies, following the announcement.

Azuri partnered with Zuku in December 2016 TV to launch the first complete payasyou-go satellite TV package for households without electricity in the Kenyan market.

“There is a huge appetite in the off-grid market for television but in rural areas it is often difficult to receive a TV signal and the number of channels that can be accessed varies widely.

AzuriTV marks the next step in bringing news and entertainment to everyone in Kenya and wider Africa, no matter where they live and in an affordable manner,” adds Simon Bransfield-Garth.

As with other Azuri PayGo products, the Azuri PayGo Solar TV package is installed by an Azuri agent in a customer’s house in an easy onetime installation process.

After as little as 2 years of payments, customers own all of the equipment and continue to pay only for the satellite service.

AzuriTV was initially rolled out in the central region of Kenya, but there is huge demand for TV in other countries in the region including Tanzania, Uganda, Zambia and Nigeria where Azuri has a presence.

AzuriTV marks the next step in Azuri’s ‘energy escalator’ pathway to enable customers to step-up to higher value services

BDTECH

BUSINESS DAY

Tuesday 29 May 2018

21

In association with

Prospects in Nigeria’s tech scene prompts huge investment from Vertiv JUMOKE AKIYODE LAWANSON

F

uture projections suggest that Nigeria will have 93 million internet users by 2019, up from 90 million in 2018, and by next year, there will be 23 million smartphones in Nigeria alone, while figures for mobile phone subscribers will reach 154 million by 2019. Global multinationals are therefore trooping into the country to invest heavily and tap into the prospects of the already acclaimed mobile first nation.

Recently, Vertiv, formerly Emerson Network Power partnered with Nigeria’s Technology Distribution (TD), in what has been described as a strategic move, leveraging on the strength of TD’s turn-key support capabilities and understanding of their customer’s needs within the Nigerian and West African market.

Wojtek Piorko, regional sales director, North West Africa, Vertiv said while speaking at an event organised to announce its partnership, that the company was here to tap into the huge potentials in Nigeria.

“Our mission is to help customers achieve a world where critical technologies always work. The alliance with TD will further strengthen our position in the Nigerian market, enabling us to focus like a laser on the needs of our customers. The choice to partner with TD was based on their strong foundation, regional footprint,

L R: Haru Alhassan, director new media, Nigerian Communications Commission (NCC); Abiodun Musa Albinu, professor of the Federal University of Technology Minna, Ubale Maska, executive commissioner technical services, NCC; M. A. Olutay, professor of Federal University of Technology Minna and Iyabo Sholanke, director research and development NCC, during the presentation of prototypes of research project supported by NCC at the NCC headquarter in Abuja recently.

financial capabilities, and passionate employees. Together our customers will feel secure they have the leading global UPS technology with local expertise and support of a veteran in the ICT Industry such as TD.” Under the partnership, TD will deliver Vertiv’s uninterruptible power systems (UPS), power distribution units (PDU), racks and accessories, coupled with an unprecedented level of specialist consultancy and after-

sales support within the region.

According to Piorko: “TD has a solid footprint across Africa, with access to thousands of partners and a strong reseller network. The partnership was formed out of mutual trust, communication and respect which build a strong foundation from which we can better serve our customers.

Vertiv has a deep understanding of infrastructure solutions to cater for modern data centres, communica-

tion networks and commercial and industrial facilities.

“Considering our ongoing footprint expansion into Africa, we are confident that this partnership with TD will undoubtedly accelerate the rate of customer’s access to the wide range of cutting-edge products and solutions that Vertiv is globally renowned for,” he said.

In her welcome address, Chioma Chimere, coordinating managing

director, TD, highlighted some key challenges confronting individuals and businesses in Nigeria, especially the erratic nature of power supply.

She further encouraged Nigerians to take advantage of Vertiv products and services, while assuring them of guaranteed maximum protection and TD’s support.

Stanley Okpaleke, group executive director, TD, affirmed that TD holds its partners in high esteem and will never hesitate to go the extra mile for them. He explained that as the largest provider of credit in the ICT sector, the company’s relationship with its over 3,500 partners is secure and firm.

Okpaleke noted that TD is not only the largest ICT distributor in Nigeria but with regional distribution channels and hubs in three continents as well as in Dubai and the UK, the company possesses the capacity to fully support Vertiv as it continues to grow into the African market.

During the event, Vertiv explained the many benefits of its offering and the company’s unique value propositions such as global leadership, very competitive commercial terms including two to five years’ warranty packages for selected products, partnership program reward levels and incentive trips for best performing resellers. A few resellers and partners were also present to attest to Vertiv’s product quality and after sales service.

Adinde lists ways Nigeria can earn revenue via software export

N

igeria can turn the ‘YahooYahoo’ syndrome into positive energy that will leapfrog the nation in the area of software development just like India, says Ikechukwu Adinde, the Administrator of the Digital Bridge Institute (DBI), Nigeria’s foremost ICT capacity building institute.

This, he said, can be achieved when there is a conscious national will to invest in the training of Nigerian youths and creating the right environment where they can unleash their creative

and innovative abilities.

Beyond the training, there must also be a consciousness to patronise their products which are basically software and apps rather than sourcing for these products abroad.

“If you look at the demographics of our young people you’ll find out that they’re very savvy, entrepreneurial and talented but I think there are a number of environmental factors that also limit opportunities which is why some of them, in a bid to survive deploy these talents negatively.

‘India was able to identify the need to mainstream the talents and skills of their young people positively by consciously building a structure and framework to enable them acquire these skills and it became an export product for India and the rest of the world and that is what Nigeria has not done’, he said.

Adinde who runs DBI, owned by the Nigerian Communications Commission (NCC), said Nigeria should be able to export software and allied products as an alternative foreign exchange earner in much the same way

India has done over the years.

If we are able to harness the potentials of these young people, especially in the area of ICT it will amaze you how much they will unleash. Many of the Africa economies are waiting for Nigeria; a lot of our young people can go into Sub-Saharan countries in West, East and North Africa by exporting their skills to do things but that hasn’t happened because there has not been a conscious effort to actually develop these things and tap into them.

‘We had made a case sometime in

2016 at the capacity building symposium organised by the International Telecommunications Union (ITU) that the investments in USPF (universal service provision fund) across Africa instead of being channelled wholly and exclusively to ICT infrastructure should be dedicated to ICT skills development, in that if someone is investing $10million in ICT infrastructure, 10 per cent of the money should go for ICT skills development especially targeted at the youths now commonly called the millennials.

22

BUSINESS DAY

Tuesday 29 May 2018

BDTECH

E-mail: jumoke.akiyode@businessdayonline.com

What tech do I need to start a small business?

OPEYEMI OLANIRAN

T

he number of young Africans venturing into business has grown tremendously in the past few years.

From ambitious tech pioneers breaking boundaries, to trailblazing innovators tackling social ills and improving lives, Africa is home to a thriving and vibrant community of gutsy entrepreneurs, plucky small businesses and grassroots self-starters.

Africa is one of the world’s most exciting frontiers. At the heart of the story is the growth of small and medium-sized enterprises (SMEs), which create around 80 percent of the region’s employment.

While this growth can be attributed to several factors, the advancement of modern technology has served as one of the biggest catalysts.

While starting and growing a business can be an exceptionally satisfying and lucrative experience, it also requires a great deal of perseverance, commitment and hard work. The current economic and political climate in Africa doesn’t always make it easy for SMEs and start-ups to get their businesses off the ground, and the competition remains fierce.

However, there are steps you can take to make the whole process of starting your business smoother while at the same time giving your fledgling company the best chance of success. Below are some of the things we suggest you think about to help you get started:

Opeyemi Olaniran, business group director, Cloud, Microsoft Nigeria.

First things first – Think Tech Once you’ve listed your business and produced the necessary capital, you should start thinking about the kind of technology investments you will need to make to ensure that your organisation is able to unlock its full potential.

Whether it’s sophisticated accounting software or modern marketing tools, technology has leveled the playing field for small businesses all over the world, making it possible for them to compete with larger enterprises and big multinational companies.

Small businesses have a distinct advantage over their larger counterparts because they are more flexible and adaptable, and they are not weighed down by the legacy of outdated technology and cumbersome infrastructure.

The technology you choose should be able to empower your employees to work together, securely, while delivering across four key areas to ensure business success. * Creativity – empowering individuals in your business to do their best work. * Teamwork – empowering your teams to work together seamlessly. * Simplicity – making it easy for your business to do what needs to be done, and for IT to manage the moving parts. * Security – securing users, devices and data amid an increasingly complex threat landscape.

To office or not to office?

The next thing to consider is whether your small business will need a dedicated office space. In the past, most busi-

nesses needed to have an established office to survive, but with the advent of modern technology, the idea of physical office space has become somewhat redundant. By 2020, it’s predicted that close to 1.55 billion workers will be responsible for work that does not confine them to a desk.

Small businesses, starting out, need to offer employees a flexible, independent and creative work environment to attract and retain next-generation talent.

If you are a small business owner, you may want to consider running your business from a co-working office space. This option offers more flexible and social working environments, private, shared and virtual office space, as well as sophisticated meeting rooms and business networking functions. If your business can function in one of these alternative environments, you could save yourself a lot of time and money.

In addition, starting a business can be quite a lonely undertaking. Making use of a shared office space can lead to networking opportunities and relationship building, which in turn can translate into new ideas, and even generate leads.

Tech for teamwork Starting a business is a hard enough task but ensuring that everyone on your team is on the same page and communicating effectively is an entire challenge on its own. Couple this with people working remotely, or from different locations, and the challenge becomes even more difficult.

Fortunately, there are a

few solutions for small businesses designed to improve collaboration and enhance teamwork. For example, Microsoft Teams is a chat-based tool for teamwork bringing together conversations, meetings, files, and apps into a single canvas. Microsoft is also working on new calling and meeting experiences in Teams powered by AI and cognitive services, like speech recognition and translation.

Security is a non-negotiable 43 percent of all cyberattacks target small businesses and 60 percent of those breached are out of business within six months. If you are looking to start your own small business – security is a non-negotiable.

With cyber-attacks becoming more sophisticated, it’s imperative that your small business data is secure and backed up. However, the sheer complexity of the threat landscape we face today makes it almost impossible for small business owners to handle this on their own.

As a small business owner, you will need to implement intelligent and integrated security measures to protect your customers, employees, data and devices while at the same time enhancing user productivity.

Luckily, there are solutions available that will keep your small business safe and secure. For example, Microsoft 365 brings together the productivity and collaboration tools of Office 365, with security and device management capabilities for Windows 10 and mobile devices in a complete, intelligent and secure solutions.

Start-ups win N3.15 million for development of innovative safety solutions JUMOKE AKIYODE-LAWANSON

T

hree tech start-ups at the recently concluded ‘secure Lagos hackathon’ organised by the Lagos State Employment Trust Fund (LSETF) in partnership with First City Monument Bank (FCMB) and Passion incubator, have been given a total of N3.15 million to further develop their innovative security solutions.

The three-day hackathon which commenced on May 18 and ended on May 20, 2018 saw a total 96 participants come to pitch different innovative ideas, showcasing both software and hardware technology developments that help tackle security issues in Lagos.

Team ‘LSFLOW’, was given N2 million cash prize as investment towards its innova-

tive solution that monitors and forecasts flood eminence, thereby communicating the forecast as warnings to the relevant authorities.

The first runner-up, Team ‘Aboeko’, received a prize of one million naira, for developing an application that reports crime from crowd sourcing.

The app is built to report and alert people of ongoing crime in certain geographic locations. With its digital security Chabot and voice activating technology, users can activate an alarm by shouting a key word during panic situation without having to unlock the phone or dial any number.

The third position went to Team ‘Gidi Secure’ with a reward of one hundred and fifty thousand naira and a six month free co-working space at Civic Hive, a technology hub for their smart innovative device for home security.

The competition also received very creative ideas from other participating teams, such Team ‘Setlot’ who created a distress notification mobile application that also works offline with its USSD support function; Team ‘Eko Eye’ came to showcase its drone base surveillance system that security agents can immediately dispatch to monitor distress areas. The drone is built with cameras that record robbery or attack incidents and reports through its back end to the police. Other innovative ideas to secure lives and property in Lagos where also pitched to the panel of judges which included Akintunde Oyebode; executive secretary, LSETF, Bukola Smith; Executive Director, FCMB, among others.

Speaking at the event, Akintunde Oyebode said the initiative was about using

technology to solve security and social problems in Nigeria’s economic nerve center.

He further stated that ‘part of our targets at the LSETF is to make Lagos the leading tech innovation destination for Africa through our Lagos Innovates initiative; which is a series of innovative programs aimed at supporting technology ecosystem in Lagos. One of the ways we aim to do this is by sponsoring tech events like the Secure Lagos Hackaton for technology experts to come to hack solutions.’

‘We started with developing security solutions today and we seeded 10 teams, which brought different innovative ideas on how to secure Lagos. They will be given some funding to go and develop their solutions. We have also partnered with FCMB in getting this done,’ he said.

Rolayo Akhigbe, the di-

visional head of transaction banking, FCMB, said that ‘to get the 10 teams, we actually had an open application of about 200, which was later pruned down to 160 and further pruning brought it to these 10.’

‘We saw an opportunity with the LSETF and we decided to partner and make it more robust, it is high time the country starts patronising indigenous solutions, which are made by local developers, this will not only encourage them, but would ensure that something greater comes through the process already laid.’

Other teams presented; POCKETSEC: A surveillance app using a panoramic camera, Kisto; a timely reporting, tracking and resolution of high emergency situation app and Secure X; a wearable device that allows fast report of crime with a simple click.

9mobile launches vehicle tracking solution JUMOKE AKIYODE-LAWANSON

9

mobile telecommunication company has introduced a Vehicle Tracking (VT) solution that will help individuals and companies manage the activities of their vehicle or fleet, reduce maintenance cost and optimise fuel consumption.

With the rising cost of maintenance and the growing concern for vehicle and passenger safety, 9mobile deems it timely to introduce a VT solution with a high-quality Swedish device that is powered with 9mobile SIM card and high-speed data, which allows users remotely track their vehicles on their mobile phones and website; ensuring they are in full control of their vehicles and fleet.

Additional features of the device include geo-fencing which allows the user set up triggers when a vehicle/ fleet enters or exits defined boundaries. Other features include eco-driving which support fuel optimisation, spare parts replacement, reporting management and instant vehicle demobilisation which is available on request.

According to the company, the device is available at selected 9mobile stores in Lagos, Abuja and Port Harcourt. In a press release made available to BusinessDay, the company assures that the VT fleet solution has a user-friendly monitoring portal, longer battery life, and longer location history.

Speaking on the solution, Plato Syrimis, director, enterprise segment, 9mobile, said that vehicle owners and corporate organisations can now rest assured of the safety of their cars and fleet with this new tracking device.

‘The VT fleet solution is an affordable product that individuals, corporate organisations, and our strategic partners will find very useful as it provides real-time vehicle surveillance and reporting, makes retrieval easy in case of theft, ensures efficiency in fuel usage and driver management. It also allows you to track your vehicle location and activities from the comfort of your phone, tablet or computer. In addition, the solution also notifies users when their vehicle spare parts are due for replacement, thereby saving cost on expensive maintenance and vehicle break-down. It’s all part of 9mobile’s commitment to our millions of subscribers and their continued well-being,’ Syrimis said.

He added that the installation of the VT solution is free at selected 9mobile stores.

9mobile through its array of innovative products, services and solutions has been at the forefront of providing platforms that empower and support its customers to achieve more via technology.

BUSINESS DAY

Tuesday 29 May 2018

EDUCATION

Weekly insight on current and future trends in education

Primary/Secondary

Laterna Ventures’ reading session inspires reading culture among students KELECHI EWUZIE

L

a book, to do book signing.

Lawson further advised parents to pay attention to the reading habits of their children because there are lots of distractions that come in form of technology. He added that technology is good but if not checked, a lot of children will get carried away “If we say leaders are readers, then, it is only fitting that from early age, you stir up that reading interest in them. When children em-

brace the culture of reading early, it will become part of them,” he said.

Speaking at the official signing of the book, ‘Double A For Adventure,’ Anisa Daniel-Oniko, an 11-year old author, said she feels amazing that her first published book was being celebrated.

She pointed out that readers of the book will learn that they can do anything they want in the world as long as they focus their mind to it.

Es osa Daniel-O niko, mother of the young author said she was really excited that her daughter has written a book that shows children can do great things in life as age was not an impediment.

She called on parents to support and encourage their children once they identify any gift in them, adding that parents need to help their children by giving them whatever training they can to help fan their talents.

TFN deepens diaspora commitment to improving Nigeria’s educational system Josephine Okojie

T

each for Nigeria (TFN), a nonprofit organisation focused on improving the quality of education across Nigeria, hosted its inaugural dinner for the Nigerian business community in London to drive support for the improvement of educational standards in the country.

The event was aimed at raising awareness about the TFN vision and mission, which entails building champions in the diaspora to search for practical solutions with which to transform the educational system in Nigeria.

It also served as an av-

enue for the leadership of TFN to highlight the crisis and inequities that exist in the Nigerian educational system and explain how TFN is mobilising and equipping Nigeria’s most promising young leaders to drive the movement towards educational equity.

“Education is a key driver for growth and the disparity in the quality of education must be addressed if we want to give as many children as possible a chance at fulfilling their potential. We must use education as a catalyst to unleash the most productive youth workforce on the continent by working together to break down the barriers to consistent quality education in

Human Capital

Six Schools for PZ Cussons Chemistry Challenge Finale KELECHI EWUZIE

A

…Marks Children day aterna Ventures Limited, a book sales and distribution company has organised a monthly reading session for children as part of its contribution to inspire younger generation into embracing the culture of reading at early stage of life.

The event which was held in commemoration of children’s day represents the company’s way of fostering an endearing love for books among young generation.

Robert Lawson, assistant general manager/ financial accountant of Laterna Ventures says the monthly reading session was organised because Laterna realised the need to inculcate reading in the early stage of the children’s learning process.

According to him, this month’s book reading was apt because it marks children day celebration that was why we decided that aside from the usual book reading, we brought an 11year old girl, who just wrote

Higher

a sustainable way,” Gbenga Oyebode, chairman, TFN said in a statement made available to BusinessDay. “This is the central ethos of Teach for Nigeria and what we hope to achieve in the long term. I am grateful for the overwhelming support from the Diaspora community here in London and their commitment to contributing to Teach for Nigeria and our overarching mission,” Oyebode said.

Folake Omikunle, CEO, TFN said “TFN takes a unique approach to achieving its mission by enlisting Nigeria’s most promising leaders from diverse backgrounds.”

“We recruit, train and support participants,

called Fellows to work side by side to deliver an excellent education in underserved schools. A child’s background should not determine their life outcome and TFN is committed to becoming a catalyst for sustainable change,” Omikunle added.

TFN aims to address poor educational outcomes of Nigeria’s most marginalised pupils, by enlisting promising future leaders in effort to expand educational and life opportunities of children. It launched its Fellowship programme in 2017 and placed its first cohort of 45 Fellows across 25 schools in Lagos and Ogun states with plans to expand its impact over the next five years.

23

fter an impressive participation at the different stages of the 2018 edition of the PZ Cussons Chemistry Challenge (PZCCC) competition, six students from public and private schools in Lagos state have qualified for the finals to compete for the grand prize of N1,000,000 and a chance to be crowned the PZCCC Champion for 2018.

The competition, which began in March 2018, saw over 3000 registered candidates, seat for the first stage across eight locations in Lagos state viz Agege, Epe, Ikorodu, Ojota, Oshodi, Island, Agboju and Surulere.

The ‘jostling’ at the first stage saw 97 students qualify to another round of written test to get the best 24 out of the 97. The top 24 at the third stage were further tested in Practical Chemistry at one of the best laboratories in the state.

Driven by its primary objective to promote Girl child education in Nigeria, the PZCCC continues to grow in leaps and bounds, as this years’ edition saw a considerable increase in the number

of females that registered for the competition. This shows a remarkable improvement in the awareness and acceptance of the competition among secondary school females.

An initiative of the PZ Cussons foundation supported

by Premier and Nunu Milk; the PZCCC has built a reputation as the No. 1 platform for supporting the learning of Chemistry in Secondary Schools.

This year’s overall top three winners will receive “N1, 000,000; N750, 000; and N500, 000 respectively. The champion also goes home with a trophy. Additional prizes also include laboratory equipment for the schools and cash prizes for their respective teachers.

The PZ Cussons Chemistry Challenge Competition has tweaked the adage that says; “every teachers reward is in heaven”, by creating a platform for rewarding teachers here on earth. On stage at the finals, our top 6 teachers from the online Teacher’s Aptitude Test would have a chance to compete for a chance to be rewarded and crowned our PZCCC 2018 Teachers’ Champion.

Lagos Business School take foreign participants on tour of Lagos

L

agos Business School in partnership with Duke Corporate Education (South Africa) hosted an International Executive Development Programme (IEDP) for the Banking Sector Education and Training Authority (BANKSETA), South Africa.

The five-day programme brought together high potential leaders from the investment-banking sector in South Africa and immersed them into the best practices of the Nigerian economy, culture and environment.

On the first day, participants visited three places to give them a real taste of the Lagos lifestyle including Balogun Business Market, Computer Village at Ikeja and the Nike Art Gallery in Lekki.

Franklin Ngwu, senior lecturer, Strategy, Finance and Risk Management, LBS, said that it was necessary for the participants to explore Lagos, the commercial capital of Nigeria.

“The trip was to aid the South African Investment bankers to understudy the

Nigerian financial sector and see areas of investment opportunity and collaboration with the two countries. We exposed our participants to both the formal and informal aspects of the Nigerian economy, and we foresee possible cooperation between the two countries,” Ngwu stated.

Computer Village, which is described as West Africa’s biggest gadget market where items relating to Information and Communications Technology (ICT) accessories can be found, is one of the most popular places in Nigeria.

The participants visited SLOT Nigeria and the Nike Art Gallery. BANKSETA is an enabler of skills development and transformation in the broader banking and microfinance sector. It supports people development through partnerships, skills development, unemployment alleviation, creation of brighter future and enabling change in South Africa.

The participants were encouraged to be global thinkers, but have a deep understanding of the local challenges and how it can be tackled.

24

BUSINESS DAY

C002D5556

EDUCATION

Tuesday 29 May 2018

INSIGHT

Teacher-of-the-Year: Maltina flags-off campaign amid poor social perception

Dufil Prima hosts 100,000 primary school pupils to mark Children’s Day

STEPHEN ONYEKWELU

he Children Fan Club of the Dufil Prima Foods has flagged off its annual Children’s Day celebration where it hosted over 100,000 pupils from various schools across Nigeria.

Bolanle Ambode, the special guest of the occasion and wife of the Lagos State Governor, commended the commitment of Dufil Prima Foods for giving the Nigerian children the opportunity of a memorable children’s day across different cities in the country.

Ambode encouraged the children to do their best to become good citizens of the nation. “You must always obey your parents and teachers, respect your elders, be humble and read your books.

If you can do this, you will inevitably become good leaders someday,” she said.

She further charged the children to have fun as the day was dedicated to them.

Also speaking at the event, Girish Sharma, chief operating

S

ocial perception of teachers has taken a beating over decades past for reasons ranging from neglect during the successive military regimes to lack of incentives designed to attract the best candidates for the profession.

This has been a source of grave concern to actors in the education space. To address this, some private sector agents have wadded into this muddled waters of poor social perception of teachers in Nigeria.

One of the initiatives canvassing for better recognition and improvement in the lot of teachers is the Maltina Teacher-of-the-Year, anchored by the Nigerian Breweries PLC’s Felix Ohiwerei Education Trust Fund, established in 2015. On Friday, May 25, the race for Maltina Teacher-of-the-Year 2018 was flagged-off.

In a paper to formally commence this year’s edition, Ngozi Osarenren, head of department of Educational Foundations at the University of Lagos, said that teachers are invaluable drivers of social change and the teaching profession must be respected to attract the best.

Osarenren, a former commissioner for education in Edo State, noted that if Nige-

L-R: Ngozi Osarenren, head of department, Educational Foundations, University of Lagos; Felix Udochukwu Ariguzo, 2017 Maltina Teacher of the Year; Kufre Ekanem, corporate affairs adviser, Nigerian Breweries Plc; Saadatu Saidu, permanent secretary, Kano State Ministry of Education, Science, Technology and Innovation and Okechukwu Okoroafor, assistant general secretary, Nigerian Union of Teachers, at the flag-off of 2018 Maltina Teacher of the Year in Lagos.

ria must be saved from the menace of unqualified and incompetent teachers, the nation must find career oriented teachers who want to do the job for the passion and not because it is the last option available.

She listed other factors that could attract the best minds and hands to the profession to include professionalisation of teaching, reasonable and guaranteed salary, job security and competitive entry requirements for would-be teachers.

Jordi Borrut Bel, managing

director of Nigerian Breweries Plc, said, in 2015, the Nigerian Breweries Plc-Felix Ohiwerei Education Trust Fund expanded its intervention in education in Nigeria to teachers through the Maltina Teacher of the Year initiative.

According to Borrut Bel, who was represented by Kufre Ekanem, the company’s corporate affairs adviser, the initiative was hinged on the realisation that teachers seldom get the recognition they deserve in spite of the pivotal role they play in determining

the quality of education. He disclosed that so far, the Maltina Teacher of the Year initiative has produced 69 state champions and three overall winners.

He added that entries for the 2018 Maltina Teacher of the Year opened on Friday, May 25, 2018 and will close on July 02 2018. The 2018 Maltina Teacher of the Year will get N1 million, a trophy and another N1 million every year for the next five years, and a block of classrooms built at the school where he or she teaches.

Unity Bank hosts Kings College students to commemorate children’s day

A

s part of its Youth & Digital Banking initiative, Unity Bank Plc has hosted students of Kings College, Lagos to promote financial literacy, leadership and advocacy against anti-social behaviour among Youths in commemoration of this year’s Children’s Day celebration.

The theme of the event is ‘digitalisation’ and the students received presentations on Cyberbullying and Drug abuse, after undertaking facility tour of the Bank. Omoho-

wovo Uyota, the Kings College Head Boy, performed the role of ‘One-Day CEO’ of the Bank.

Receiving the Students on behalf of the managing director/ chief executive of the Bank, Tomi Somefun, executive director, South Bank, Unity Bank Plc, Temisan Tuedor, said that the visit of the Kings College Boys has afforded the platform for the students to appreciate financial services offered by the bank and stimulate interest on the whole essence of financial literacy”.

“We need to catch them

young and this has to be demonstrated as we mark the Children’s Day,” he said.

Speaking on anti-social behaviour which has manifested mostly as drug abuse and cyber bullying in recent times, Tuedor enjoined the students to say no to undesirable values irrespective of peer pressures. “Nobody can bully or intimidate you without your consent. Refuse to be inferior and be strong and firm. This is called ‘self-esteem’,” he stated.

He however called on government at other levels to am-

plify the enlightenment and education of kids particularly from lower levels.

Osifala Olaseni, an assistant director of Education and the leader of the delegation, commended Unity Bank for the initiative and enjoined other corporate organisations to emulate this gesture.

“The lessons of this visit are invaluable. Much of the theories we discuss in the classroom have been demonstrated today and learning could only get better with such exposures”, he said.

Page Financials CEO addresses the impact of learning and development on growing Nigeria’s workforce

T

he CEO of Page Fina n c ia l s, S e gu n Akintemi at the just concluded Learning and Development Leaders’ Conference that took place in Lagos, shared insights on how businesses could thrive by inculcating winning learning and development strategies as part of their company goals especially in a country like Nigeria with a dwindling workforce.

Segun who was the key-

note speaker at the conference organized by the Workforce Group spoke on the topic, ‘Learning and Development Strategies that would Win CEO’s Support’.

His presentation highlighted the benefits of employee training to organisations who embrace L & D and bestow an increased level of importance on the Chief Learning Officer role. According to him, “good training and development programs play a role in

staff retention. A LinkedIn research showed employees to be more productive when employers provide employees with opportunities for continuous learning.”

For an organization that not only wants to remain in business but also grow and transform, Segun says the key to disrupting in any industry is by revolutionizing their thinking “successful organizations think outside the box, but exceptional organizations think

like there is no box”.

The Learning and Development Conference is Nigeria’s first focused conference for Learning and Development professionals and was organized to highlight the need for organisations to take L & D as a strategic lever for business growth and transformation.

The conference was well attended by other top Chief Executives and HR Professionals across multiple industries.

KELECHI EWUZIE

T

officer, Dufil Prima Foods Plc, thanked the Lagos first lady for taking out time to be present at the event and for impacting the kids with valuable morals, adding that it only goes to show that her Excellency is indeed a mother of all.

He continued, “We at Dufil place the utmost value on children as many of our brands are synonymous with kids.

We believe that one of the best responsibilities we can undertake is to celebrate this great day with the Nigerian kids. Without you kids, we cannot exist.”

There is no doubt that children are a special gift to man’s existence and should be nurtured with great dedication and passion; that is why we continue to place a premium on the wellbeing and overall developmental growth of the Nigerian child as is evident in the children focused projects we constantly embark upon”.

Tope Ashiwaju, Group public relations and event manager, Dufil Prima Foods Plc stated that the Indomie Children’s Day celebrations was an annual activity that the company has consistently

Park Inn by Radisson commits to the promotion of Nigerian child’s education

B

eyond hospitality business, Park Inn

by Radisson Hotel, Abeokuta, is keenly concerned about the education of the Nigerian child, which it described as essential for human capital development.

The hotel was concerned by the alarming statistics by the United Nations that Nigeria has about 8 million outof-school children, making the country the highest in the world, which has made it a national challenge.

It was in the light of this that the hotel initiated a seminar project for post primary schools in Ogun State. The seminar, which held recently at the hotel on the topic: Education and the Nigerian Child, recorded attendance from several schools across the state.

Kayode Aina, general manager, Park Inn By Radisson, said, “In our CSR programme, we turn our attention on educational initiatives that will have long term impact on students.”

He recalled during his days in secondary school, literary/ debating society, which he was a member, made significant impact on students, as he still enjoys its benefits till date adding that his experience informed the choice of the seminar topic by the hotel.

Aina noted that education is the bedrock of development for any nation and human capacity remains the engine to drive it. He stressed that the development of any society depends on the quality of its education.

Aina encouraged the students: ‘Whether you attended public or private school is not an excuse; just contribute your quota to the national development and that is the final expectation from you.

We need to feed the minds of the Nigerian child with sound knowledge for intellectual development to enable them fit into global competitiveness.’’

The seminar was the concluding phase of the interschool debate, which ran from November 2017 - February 2018 and saw Golden Grace International School, Abeokuta, emerged overall winner out of 20 schools that participated in the contest.

Kolawole Adebayo of the Federal University of Agriculture, Abeokuta, who was chairman of the debate, said that the idea of the debate was to key students into knowledge of issues of national importance and make valid arguments.

Adebayo urged teachers of public schools to pay adequate attention to brilliant students to enable them excel, even as he described Park Inn by Radisson’s gesture as timely in effort to rescue the country from the fallen standards of education.

Still on the seminar, Treasures-Olawunmi Bayode, founder of iread Africa Foundation and the man who broke the Guinness Book of Records, by reading for 120 hours (without sleeping), delivered a presentation on: The Importance of Reading to the Nigerian Child. Bayode commands authority in reading globally, a proof that Africans can also read.

Tuesday 29 May 2018

C002D5556

BUSINESS DAY

25

In association with

Aminu-Kano becomes NCF’s new DG

N

A cross section of participants at an NMRC/IFC workshop in Lagos recently

Making business case for green building: Why developers need to shift

M

Stories by CHUKA UROKO

odern architecture has taken housing development to a level w h e re d e s i g n considerations are no more on space comfort and convenience alone, but also, increasingly, on economy and sustainability.

Green economy is, in many ways, being incorporated into design concepts such that green building is now the future not only of the housing, but also the mortgage market. Unfortunately, Nigeria and, indeed, Africa is still playing a catch-up to the developed economies where it has become a norm.

The importance and the business/economic benefits of green building cannot be over-emphasised, hence the need for housing investors and developers to make a paradigm shift and embrace the new order. This is also a big challenge to the architects and other stakeholders in the housing development value chain.

Available statistics show an urgent need for emerging economies like Nigeria where only two commercial buildings—The Heritage Place and The Wings Towers are the certified green buildings— to start building green.

“50 percent of the world lives

in cities today and 70 percent is expected to live in urban areas by 2050. The world population is expected to reach 9 billion by 2050, about 34 percent higher than what is presently available.Growth will be fastest in poor countries like Nigeria where population is expected to actually double”, revealed Chii Akporji, executive director at Nigerian Mortgage Refinance Company (NMRC), who spoke at an IFC/NMRC workshop in Lagos.

Critical infrastructure, especially power, energy and water are still a huge challenge in most cities. Globally, cities account for up to 70 per cent of energy use and 80 per cent of greenhouse gas (GHG) emissions. These cities also host most of the infrastructure exposed to risk from climate change, requiring them to invest in resilience as well.

In these cities too, the International Finance Corporation, an arm of the World Bank predicts 37 percent growth in energy consumption, and that 96 percent of growth will occur in developing countries.

Global water consumption has grown at more than twice the rate of population increase in the last century and, in developing countries, this will increase by another 50 percent by 2025.

“By 2025, 1.8 billion people will

be living in countries or regions with absolute water scarcity, and two-thirds of the world’s population could live under water stress conditions”, according to IFC, adding that global water consumption has grown at more than twice the rate of population increase in the last century.

The solution to these problems lies in green building which, in its design, construction or operation, reduces or eliminates negative impacts on climate and natural environment, preserving precious natural resources and improving quality of life. This can be a home, an office, a school, a hospital, a community centre, or any other type of structure.

In Nigeria today, there are no known green residential buildings, meaning that apart from the challenges it poses to housing designers, it also presents huge investment opportunities to be exploited.

Besides efficient use of energy, water and other resources, a green building also makes use of renewable energy, such as solar energy; it reduces pollution and waste and enables re-use and recycling of wastes. It uses materials that are non-toxic, ethical and sustainable.

There is good indoor environmental air quality; consideration of the environment in design, construction and operation; con-

sideration of the quality of life of occupants in design, construction and operation, and allows a design that enables adaptation to a changing environment.

According to Akorji, green buildings are smart buildings, explaining that apart from 35 percent lower carbon emissions, decrease in water use by 30 to 50 percent, and 50 to 90 percent cost saving in waste generation, these buildings are also more comfortable, healthier, return higher productivity rates and have a higher resale value.

The return on investment on green buildings can be quite significant compared to conventional buildings despite the belief that they cost more. Green buildings can be built for even less than conventional buildings. The key to keeping costs down is to plan the project to be sustainable from the beginning rather than making design changes later on.

“Building green leads to reduction of operating and energy costs (lower utility bills), higher valued real estate and profits (greater return on investment), improvement of employee productivity (reducing sick building syndrome), extended life of buildings, optimization of life-cycle economic performance and less vulnerability to fluctuating energy prices”, Akporji assured.

igeria’s foremost conservationist, the Nigeria Conservation Foundation (NCF) has appointed Muhtari Aminu-Kano as its director-general/CEO. Aminu-Kano, who replaces Adeniyi Karunwi, resumed office on April 4, 2018.He is an astute and experienced natural resources management expert with over 30 years cumulative experience in management, advocacy and research in the fields of protected area management, wider biodiversity conservation, climate change, agriculture, humanitarian work and poverty reduction in Nigeria, Africa and globally.

He, at different times in his professional career, worked as an Assistant Director, Lake Chad Research Institute, Maiduguri, Project Director, Hadejia-Nguru Wetlands Project, Nigeria, and Executive Director/CEO, Nigerian Conservation Foundation, Lagos, Nigeria.

He was also the Senior Adviser on Policy & Advocacy at the Birdlife International Secretariat, Cambridge for eight years and one of his deliverables was to ensure that Policy and Advocacy work on multilateral environmental agreements are integrated with and contribute substantially to the work of other components of the environment and sustainable development division, as well as relevant thematic and regional programmes.

Aminu-Kano is a trained leader and administrator and has varying experiences in NGO management and government - NGO partnerships and policy formulation and implementation through national, regional and international work.

Before joining the NCF in April 2018, he served as the senior policy adviser, Poverty Reduction & Climate Change, Islamic Relief Secretariat, Birmingham, UK and most recently as the Head of Research & Development at the Humanitarian Academy for Development in Birmingham, UK. NCF council is confident that Aminu-Kano’s appointment will be a beneficial as it will position the organization for greater achievements locally and internationally and also strengthen its partnerships.

His wealth of experience in nature conservation and biodiversity will contribute immensely to the positive change in the burning environmental issues.

26

BUSINESS DAY

Tuesday 29 May 2018

Real estate sector plunges further into recession in Q1 2018 ENDURANCE OKAFOR

T

he fourth successive quarter expansion of the Nigerian economy in the first quarter of 2018 was not inclusive enough to rub off on the real estate sector, as the sector was further deep into recession in the quarter.

The real estate sector contracted by -9.40 percent in Q1 2018 from -5.92 percent in Q4 2017 and -4.12 percent in Q3 2017. The quarter contraction was -6.3 percentage points worse than the -3.10 percent reported in the comparable period of 2017.

The crash in the property market of Africa’s largest economy in the period under review is triggered by supply glut which is not matched by corresponding demand due to low income and decline in the purchasing power of its citizens coupled with high interest rate, as compiled from analysts.

“As a result of the past recession, people’s purchasing power remained low, and also considering that purchase of property is not a necessity like food. This led to downward trend in demand for property and as such you will not expect especially the estate developer to start investing capital into the market because they have inventory unsold,” Abiodun Akanbi, Head of Infinity Trust Mortgage Bank in Abuja told BusinessDay. Bismarck Rewane, MD of Financial Derivatives said “there is inverse relationship between interest rate and the real estate sector, considering

if someone borrows about N20 million some few years ago, how much do you think the person will be paying now?”

The negative expansion recorded for the sector in the first quarter of this year is the worst contraction the property market has reported since BusinessDay started tracking it in Q1 of 2016.

Meanwhile, the Nigerian economy expanded positively by 1.95 percent in the first quarter of 2018, a stronger growth when compared with the -0.91 percent in the first quarter of 2017, indicating an increase of 2.87 percent points.

The 2018 first quarter growth accounts for the fourth successive positive expansion since Africa’s largest economy exited its worst recession in more than two decades, resulting from the decline in oil prices, which the country largely depends on for revenue.

The upward trajectory of the global oil prices and the increase of production in Nigeria led by the relative peace enjoyed in the oil-rich Niger

Delta fuelled the country’s emergence from the state it was until the second quarter of last year.

The real estate industry is the fifth largest contributor to the Nigerian economy and a potential goldmine for investors; but as the Nigerian economy grew, the real estate industry’s contribution to GDP dwindled. Experts have attributed this to the restrictions placed on the availability of foreign exchange that affected the construction industry, which is heavily import based, and the unstable economic climate which has affected the general willingness to invest in the country’s real estate sector.

“The real estate sector is fixed capital in nature, that is, the amount used to construct from the supply side is high and the amount also to purchase from the consumer side is high and as such fixed capital is needed for both sides.

The unforeseen uncertainty in relation to the forth coming election is another factor that has reduced the demand for

properties and as such slowed down activities in the sector,” Akanbi said.

On the way to go for the sector, in order for it to see the light, Rewane said “a cut down in interest rate will rub off on the real estate sector and as such will spur its exit from recession.”

Akanbi is however not optimistic about the sector emerging from the level it currently finds itself due to the forth coming election but he said government spending in capital project, infrastructure, and housing development can help spur its exit from recession.

“The price of properties are coming down, for me to have felt this in Abuja tells you what is going on in the sector,” he added.

According to the figures

by Financial Derivatives, the general vacancy factor in Lagos was up 1700bps to 28 percent driven by a rise in vacant residential buildings, as there were more vacant residential buildings among which are mostly blocks of flats.

Increased professionalism expected in building industry on back of 217 architects induction faculties, hoping that by that action, more architects would be trained in the country.

What this means is that, with more architects being admitted he recent induction of 217 and trained in Nigerian universiarchitects, 16 firms and six ties, there would be a check on architectural technolo- the number of quacks, as well as gists by Architects Registration reduction in the cases of building Council of Nigeria (ARCON) will collapse. increase the level of professionThe APRN system, according alism in the building industry in to Munrai, is aimed at ensuring Nigeria, analysts have said. that only fully registered archiThis action will not only ben- tects take design responsibilefit the industry which is hugely ity for all architectural projects/ challenged by unwholesome drawings before submission for activities of pseudo-practitioners town planning/implementation masquerading as professionals, approvals. but also house buyers who have “APRN is an important tool been at the receiving end of for Nigerian architects to protect these activities that often lead to their profession. We came up loss of lives and property. with it because we discovered The regulatory body also that our tools have been comcharged all registered architects promised and I thank God that in the country to keep faith with the new initiative is already the established professional working in Abuja. We have ethics and lift the standard of contacted other states too, and architecture profession, assuring we are hopeful that, very soon, that it would continue to work APRN will be all over Nigeria,” to increase the number of reg- he assured. istered architects in the country.

Apart from protecting archiAliyu Umaru, ARCON’s pres- tecture, Murnai said that APRN ident, believes that increasing was also to raise architectural the number of architects is one practice in terms of quality of sure ways of curbing the ac- work done by architects in Nitivities of quacks within the built geria. environment, a trend, he said, Ladi Lewis, former chairhas contributed to the frequent man, Nigerian Institute of Archicases of building collapse in the tects (NIA), Lagos State Chapter, country. tasked the newly registered Aliyu revealed that by the architects not to misuse the new registration, the country trust put in them to either the now has about 5,000 registered professional body or the general architects, adding that the coun- public. He warned that any incil had introduced the ARCON fraction is tantamount to severe Projects Registration Number punishment as prescribed by the (APRN) system, which provides Act establishing the profession. the opportunity to raise the “One of the principles of quality of building approvals the code of conduct is the proand then control quackery in the fessional ethics. You need to building industry. understand the moral code and Saulawa Murnai, the reg- that includes having a broad istrar of ARCON, recalled the and clear knowledge of Nigeria recent approval by the National constitution. Please, study the Universities Commission (NUC) code of our conduct; carry it for the upgrading of depart- about because you may be in ments of architecture to full breach of it,” he advised.

CHUKA UROKO

T

FG’s planned intervention on bridges infrastructure needs N277bn — Fashola CHUKA UROKO

A

fter an assessment of all the bridges in Nigeria, the federal government has developed a three-year plan for intervention and that intervention will cost an estimated N277 billion to carry out, the minister of power, works

and housing, Babatunde Fashola, has disclosed.

This intervention is as a result of many years of neglect and lack of maintenance of public assets and infrastructure. This is the price the country has to pay for neglecting the bridges which, Fashola admitted, have not been maintained in years. That huge sum of

money is about 50 percent of the 2018 budget estimates for Fashola’s three ministries.

Evidences of that neglect are quite visible in Lagos bridges, especially the IjoraApapa-Wharf bridge which is dotted by potholes and is heavily flooded after rainfall.

“In my ministry, we are planning to build Independ-

Tunde Ayeye-GMD, IFS Group; Clare Omatseye, director, Development Bank of Nigeria; Babatunde Fashola, minister, Power, Works and Housing; Chris Bode, CMD, Lagos University Teaching Hospital, Representing Minister Of Health; Jide Idris, Commissioner Health, Lagos State, and Olumide Okunola of the World Bank at a public/private sector policy Dialogue on infrastructure in Lagos recently.

ent Power Plants in federal universities across the country as well as repair roads within the tertiary institutions”, said Fashola who spoke at a public and private sector policy dialogue which was part of activities marking this year’s World Facilities Management Day. Other stakeholders at the policy dialogue which had as theme, lamented the ‘Effective Maintenance as a tool for National Development’, lamented the poor state of the country’s infrastructure arising from poor maintenance culture in the country.

“The biggest challenge of the Nigerian economy has been the persistent inability to articulate a sustainable national and sub-national policy framework that will ensure the regular and effective maintenance of public assets, buildings, utilities, infrastructure and facilities”, noted Tunde Ayeye, executive chairman of Klin-

serv Solutions Limited and group managing director of the International Facilities Services (IFS) Group, the organizers of the dialogue.

“From bad roads, to poorly maintained bridges, non-functional health centers and hospitals, dilapidated school buildings, refineries our national power infrastructure etc. Anywhere you look; it is evident that the issue of poor maintenance of our public facilities demands national attention”, Ayeye added.

As part of solutions to the problem, Ayeye canvassed the building of what he termed a maintenance economy, explaining that maintenance was a very lucrative business in countries across the world. He noted that the development of skills acquisition centres by successive governments in the past 20 years was to develop manpower to handle the maintenance of critical infrastructure in the

country.

He urged governments at all levels to ensure that public utilities and institutions are always maintained. “My argument is that the problem is not the absence of a maintenance culture, but of a maintenance economy and we need to start doing something about that now.

Until we create a maintenance economy, it would be difficult for a lot of the unemployed graduates to be able to find a job. There is need to encourage skills acquisition,” he added.

Jide Idris, Lagos State commissioner for Health pointed out that facility management was essential in the public health sector in order to deliver quality service. He explained that it was because of the importance of facility management that the Lagos State government pioneered the Office of Facility Management and Maintenance in Nigeria.

Tuesday 29 May 2018

C002D5556

BUSINESS DAY

27

FEATURE Where is the PIGB? The PGIB was finally passed by the national assembly in March this year and thereafter it was expected to be transmitted to the President for his accent but almost two months after passing it, it is missing in transit between the presidency and the national assembly. In this write –up, Kehinde Akintola and Owede Agbajileke try to examine the intrigues associated with the passing of the bill and getting the president’s accent on it .

W

here is the harmonised Petroleum Industry Governance Bill (PIGB) passed by the National Assembly in March this year? Has it gone missing just like the 2016 budget?

These are questions on the lips of industry experts as controversy trails the whereabouts of the PIGB expected to introduce new reforms in the governance of the oil industry.

This comes as stakeholders in the country’s oil and gas sector have described the delay as an embarrassment to the nation and loss of multi-billion-dollar investment into the Africa’s leading economy, which remains the highest importer of petroleum products among comity of oil producing countries in the world - Organization of Oil Producing Exporting Countries (OPEC).

Findings by BusinessDay revealed that even federal lawmakers that worked on the bill are still in the dark as to the status of the proposal, two months after passage.

While a highly placed source in the House of Representatives disclosed to one of our correspondents that the bill is at the National Assembly’s Legal Department, confirming the position of Ita Enang, Senior Special Adviser of the President on National Assembly Matters (Senate), a senator, however, insisted that the Bill has since been transmitted to the President for assent.

As of Monday last week when I asked about the PIGB, I was told that it is still with the Legal Department,” the source who did not want his name in print told our correspondent.

But when asked about the controversy surrounding the harmonised PIGB, the Vice Chairman, Senate Committee on Petroleum Resources (Upstream), Gershom Bassey (PDP, Cross River State) insisted that the bill is already with the Executive.

“We are not aware (if PIGB is missing). We have passed the bill so it should be with the Executive,” the federal legislator disclosed in a text message to our correspondents on Tuesday.

The Peoples Democratic Party (PDP) lawmaker, however, promised to look into the matter. On his part, Joseph Akinlaja, chairman, House Committee on Petroleum Resources (Downstream) who refused to respond to BusinessDay’s inquiry, said: “Go and meet Namdas, he is our spokesman.”

Also speaking, Abdulrasak Namdas, chairman, House Committee on Media and Public Affairs explained that the chairman, Ad-hoc Committee on PIB, Ado Doguwa had failed to respond to his calls on the status of the bill.

Speaker Yakubu Dogara had during the public hearing on the three bills: Petroleum Industry Administration, Fiscal and Host Community bills, held on the 15th May, 2018, informed

The Senate President, Senator Bukola Saraki

captains of industry, management of OICs that the “Petroleum Industry Governance Bill, 2017 has been passed by both the House and Senate and is now before the President of the Federal Republic of Nigeria for assent.”

The proposal, which is the longest serving bill in the National Assembly, was first introduced as an executive bill in 2008 by then president, Umar Yar’Adua. The Sixth National Assembly (2007 to 2011) failed to pass it.

Again, it was introduced as an executive bill to the National Assembly in 2012 by former President Goodluck Jonathan. However, while 47 out of 360 members of the House of Representatives in the Seventh National Assembly (2011 to 2015) passed the bill at the twilight of their tenure, they failed to get the concurrence of their counterparts in the upper legislative chamber.

In the Eighth Senate, the bill which is one of the economic recovery bills, was introduced as a private member bill and sponsored by the Chairman, Senate Committee on Petroleum Resources (Upstream), Tayo Alasoadura.

The PIGB is the first of four bills which replaced the Petroleum Industry Bill (PIB). The other three other components of the bill are: the Fiscal Framework, Host Communities and the Petroleum Industry Administration Bill. With just a year to the end of the Eighth National Assembly, the fate of the four bills remain uncertain.

After the PIGB was harmonised and passed by both chambers of the National Assembly in March this year, Senate President Bukola Saraki had declared that the bill was awaiting the assent of President Muhammadu Buhari. “Finally this bill has been passed waiting for assent by Mr President. I think we can

congratulate ourselves for this feat,” an elated Saraki told his colleagues at plenary.

But in what appears to be a rude shock to industry watchers, the Presidency disclosed last week that it was yet to receive the Petroleum Industry Governance Bill (PIGB) passed by the National Assembly.

In a statement by the Senior Special Assistant to the President on National Assembly Matters, Ita Enang, he said the bill was still undergoing some legislative processes in the National Assembly.

“Further to several enquiries by the media, interest groups and the public in respect of the Bill, may l please state that the said Bill has not yet been transmitted by the National Assembly to the president.

“From my enquiries, the bill is still undergoing standard operating legislative processes of the National Assembly preparatory to transmission, please,” he said.

The development comes with less than three months to the commencement of party primaries ahead of the 2019 general elections, even as there are concerns that as the elections draw near, governance will be relegated to the back stage.

“Majority of lawmakers are already being schemed out at the just-concluded congresses of the governing All Progressives Congress (APC). The implication is that if this matter is not resolved by both arms of government on time, nobody will be talking about PIGB when primaries start.

“It therefore means that the bill may have to be reintroduced in the Ninth National Assembly,” a source in the National Assembly told our correspondent.

According to the guidelines and

schedule of activities for the 2019 general elections released by the Independent National Electoral Commission (INEC), conduct of party primaries including resolution of disputes arising from the primaries would run from August 18 and October 7, 2018 while campaigns of political parties for the National Assembly elections would take place between November 18, 2018 and February 14, 2019.

The lower legislative chamber had recently conveyed a public hearing on the three bills which focused on Administration, Fiscal and Petroleum Host Community.

Different stakeholders comprising of executives of international and indigenous oil companies expressed concerns over the undue delay in the enactment of the bill, leading to loss of investments worth $250 billion.

Members of the OPTS, comprising of 28 indigenous and international operators of 90% of oil and gas sector, while speaking at the public presentation of the three other petroleum bills, frowned at the stringent provisions for relinquishment of licensed area as well as retrospective legislation on relinquishment of fees after seven years.

While expressing concerns over the impact of a toxic legislation on existing and prospective investments, the operators stressed the need to ensure that the legislation becomes applicable when the bill is signed into law.

They also kicked against punitive legislation on revocation of licence due to delay in submission of data as well as $2/mmbtu on gas flare, rather recommended $0.5 or its equivalent in naira at the prevailing exchange rate, per 1,000 standard cubic feet of gas flare in the case of routine flaring.

The operators also canvassed for 10 years for operation of acreage before relinquishment of licence and seven years, noting that such provisions did not take current funding challenges into consideration.

According to joint Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) and Nigerian Union of Petroleum and Natural Gas Workers (NUPENG), Nigeria has so far lost some “$250 billion of investments due to its inability to legislate the proposed reforms in its oil and gas industry as follows: $15 billion yearly – in investments withheld or diverted by investors to other countries because of the uncertainty as investors do not know which rules will guide their investments and another $14.7 billion potential earnings in seven years, from 2010-2017 had the PIB been passed into law in 2009,” the unions noted.

It further observed that the tax burden on the operators may render many Deepwater and gas projects less attractive, adding that the use of 20% of revenue/OPEX could be used by oil and gas companies as an incentive to downsize, reduce the Nigerian employees on their payroll and increase the use of contract staff and casualisation to reduce their OPEX and increase their cost efficiency factor (CEF). Therefore, recommended computation of CEF by increasing the percentage of revenue used in the computation to at least 30%.

The oil workers also aligned with the OPTS and Independent Producers over overbearing powers conferred on National Petroleum Regulatory Commission, just as they kicked against indiscriminate award of oil blocs/ licenses to former or serving public officers or members of government who obtain interests in the licence through an abuse of public office.

In order to ensure adequate funding of the host community development fund, the unions noted that the 2.5% operating budget was inadequate, while the oil and gas companies raised concerns that the bill imposes additional financial burden on those who are already paying taxes, fees and royalties, 3% to Niger Delta Development Commission, 2% education tax and 1% NCD. On its part, Federal Inland Revenue Service (FIRS) proposed single tax rate for both offshore and shallow water areas to discourage aggressive tax planning through cost shifting and reduce undue complexities in tax administration.

The Service also proposed 50% rate for determination of petroleum tax profits in the bid to give government fair take against the existing 24% rate.

On the other hand, FIRS recommended 30% tax rate on gas with a more favourable production allowance for deep offshore gas, just as it opposed extension of incentives to crude oil transportation.

28

Tuesday 29 May 2018

BUSINESS DAY

THE BIG HEART DIGEST In association with Delta State Micro, Small and Medium Enterprises Developement Agency (DEMSMA)

Okowa handling 866km of roads at N215bn •193 projects valued N122Bn covering 732km •229km of concrete-lined drains •Inherited 15 road projects of 134km at N93Bn •Completed 93 roads coverning 350km •116 roads now at various stages MERCY ENOCH, Asaba

G

ov e r n o r I f e a n y i Okowa’s administration in Delta State is said to be currently handling road projects valued over N215 billion. These involve 208 roads with a total length of 866 kilometers, including the ones he inherited from the previous administration in the state.

Of this figure, 92 roads covering 350 km have been completed while 116 roads are at various stages of completion, insiders said.

The administration embarked on the construction, reconstruction, rehabilitation and maintenance of 193 roads projects at a cost of over N122 billion between May 2015 and March 2018 covering over 732 km of road and 229 km of concrete-lined drains.

The projects are done through the ministry of works. The commissioner for works, James Augoye, made the disclosure when he appeared at the on-going 2018 ministerial press briefings holding at the ministry of information, Asaba.

He said that construction of the roads, which comprise of highways as well as urban and rural roads, is geared towards improved mobility, the stimulation of agricultural and industrial activities as well as enhancing the quality of life for residents of the state.

Roads are an integral part of the transport system, hence a state or country’s road network should be efficient in order to maximize economic and social benefits. They play significant role in achieving national and state development and contributing to the overall performance and social functioning of the community.

Thus, with the understanding that roads enhance mobility, takes people out of isolation and poverty, Okowa’s administration with its Prosperity for All Deltans’s mantra has some of the highway projects.

Augoye therefore mentioned as

follows: Major highway proje cts across the state Rehabilitation/Asphalt Overlayof Nsukwa-Ejeme AniogorAgbor Alidinma-Owa Alidinma Road: The 24 kilometres long road is a major link between the Ughelli/ Asaba Highway and the Uromi/ Agbor/Eku/Amukpe road. It cuts across Aniocha South, Ndokwa West, Ika South and Ika North East Local Government Areas and would integrate the rural communities with urban cities as well as boost socio-economic activities in these areas. The project was awarded at the cost of N1.65 billion and is almost completed.

Construction of Okurekpo/ Okunoh-Okpara/Okoruah/Onumane/Samagigi Road: The 7.418km length of road was awarded on April 12, 2017 to Messrs Setraco Construction Limited at the contract sum of N1.1 billion. Work on the project is on-going.

Construction of Middle Section of Alisimie/Oza-Nogogo in Ika South LGA: The 5.88km road was constructed at the sum of N1.07 billion and was awarded to Messrs CCECC Construction Ltd. The road which connects five communities in the area has improved the road network as well as improved the socio-economic development of the area. The project has been completed.

C o n s t r u c t i o n o f Ug h e l l i Afiesere-Ufuoma Road in Ughelli North LGA: The construction of the 8.5km road would ease the difficulties experienced when travelling from the Ughelli Area to Isiokolo, Abraka and other communities in that part of the state. The project was awarded to Messres CCC Nigeria Limited at the contract sum of N1,743,871,106.25. The road has been completed and commissioned.

Rehabilitation and Asphalt Overlay of Umunede/Otolokpo/ Ute-Okpu/Ekuku-Agbor/Ndemili/ Obeti/Umutu Road in Ika North

from 12.4m and 15m to 18m respectively. Walkways are being constructed over the entire length of road while concrete drains and discharge channels are also being provided as required.” “ The entire road will be strengthened by a layer of asphalt surfacing. This project was awarded to Messrs Levant Construction Ltd on December 10, 2015 at a contract sum of N2,776,492,635.00.

The percentage completed is 65 percent and work is on-going”, he said.

Others are the dualization of Owa-Ekei-Owa-Alero Road (from Old Lagos/Asaba Road to Owa Alero Roundabout) in Ika North East LGA, a road of 5.721km length of road,a project currently stands at 85 percent overall completion.

The rest are the construction of Joseph Ebolo and Madonna School Road, Okpanam, a project is completed and commissioned; construction of/rehabilitation of Kwale Township Roads in Ndokwa West, a project that is 100 percent completed.

The construction of Abraka

Township Roads (Winners Road and Jehova/Umonu Crescent, a 1.51km length of road which is part of the government’s intercity road development programme aimed at giving the towns and cities a facelift as well as improving traffic flow.

The project has been completed and commissioned.

The road projects are just numerous to mention here but what is important is that the aim of embarking on the projects are achieved which is to transform the lives of Deltans.

Okowa’s SMART Agenda is about: ‘Strategic wealth creation projects and provision of jobs for all Deltans’ ‘Meaningful peace building Platforms aimed ar political/social stability’ ‘Agricultural reforms and accelerated industrialization’ ‘Relevant health and education policies’ ‘Transformed environment through urban renewal’ The works commissioner said ministry embarked upon the road projects in realization of the fact that road development and construction is a salient factor for the achievement of the SMART agenda of Okowa’s administration that focuses on Prosperity for All Deltans.

Meanwhile, STEP, YAGEP 2018/2019 Cycle have been approved and the Delta executive council has approves implementation design and expenditure plan.

Delta State Executive Council has approved the implementation design and expenditure plan for 2018/2019 cycle of job creation programmes - Skill Training Entrepreneur Programme (STEP) and Youth Agricultural Entrepreneur Programme (YAGEP) - as part of the state government’s drive to create wealth.

Information Commissioner, Patrick Ukah, briefed journalists on the development shortly after the council’s meeting held Tuesday, May 22.

schools established by his administration. He added that his administration would continue to take steps aimed at making academic activities in these schools conducive.

Contractors handling the projects must also be determined to help the state government achieve his dreams for the people of the state in this direction. At Government Secondary School

Ughelii, he expressed satisfaction at the level of work done so far, while commending the contractor for doing a good job at Urhobo College and Chude Girls Model Schools where renovation works was being carried out.

The contractors should however expedite action so that the renovation work could be completed within the shortest possible time, he advised.

Governor Ifeanyi Okowa

East, Ika South, Ndokwa West and Ukwuani LGAs: The 43.4km road is the longest road project awarded

by Okowa’s administration and it cuts across four LGAs of the state providing a link between Umunede and Umutu on the uromi/Agbor/ Eku/Amukpe road. It was awarded on March 6, 2017 to Messrs Mutual Commitment Company Limited (MCC). The work is currently ongoing.

Construction of Oviri-Olomu/ Agodor in Ughelli South and Burutu LGAs: The project was also awarded to MCC Ltd on March 6, 2017. The length of the road is 8.5km and cuts across Ughelli South and Burutu LGAs in a difficult and inaccessible terrain. Work is in progress.

Rehabilitation and Resealing of Out-Jeremi/Okwagbe Road in Ughelli South LGA: The 25.601km length of road with two loops through Owhawha and Oginibo was awarded to MCC Ltd on March 6, 2017. Work is on-going.

Construction of Uduophori (Bomadi/Ohoro Junction)/ToruAngiama/Toru-Apelebiri/Patani

Road (Phase II) in Patani LGA: The first phase of the 4.85km road was awarded on June 10, 2013, at the contract sum of N1,173,755,286.11 to Messrs Levant Construction Ltd. The road has since been completed and commissioned.

Working on several roads in key towns and cities of the state Aguoye said the administration embarked on urban renewal by working on several roads in key towns and cities across the state.

In this regard, he said a number of roads have been maintained, rehabilitated, and constructed/ reconstructed in the three senatorial areas of the state.

He said at least one road project has been awarded in all the LGA of the state including the dualization of Sapele Road from Amukpe Roundabout by Sapele/Warri Expressway to AT&P Roundabout Sapele, in Sapele LGA. He said the entire road has now been dualized by the construction of a concrete median. “The Amukpe to Okirighwre segment and Okirighwre Junction to AT&P Roundabout have been expanded

Editorial coordinator’s corner:

Understanding Delta’s 2018 fiscal direction:

Delta prioritizing education IGNATIUS CHUKWU

G

overnor Ifeanyi Okowa of Delta State seems to be fully aware that education is the bedrock on which the society thrives.

To him, if people must be economically empowered, they must first be empowered with education.

In this endeavour, people at the grassroots seem

to matter most and that is why he ensures that more schools are built in all the three senatorial zones of the state both at the primary and secondary level, then at the tertiary level.

His speech recently when he inspected on-going construction of some schools across the state revealed his mind: “Delta State Government under my administration would continue to give

priority attention to the education sector in the state”.

The schools included the new Government Secondary School in Ughelli, and the renovation works being carried out in Uhrobo College, Effurun and also Chude Girls Model School, Sapele and the ongoing construction of modern classroom blocks at Ijorugu Primary School Oku-Ijorugu in Okpe Local Government Area.

Okowa was represented at the event by the Commissioner for Basic and Secondary Education, Chiedu Ebie.

He reiterated the commitment of his administration in the development of the Basic and Secondary Education sub-sector.

According to him, emphasis on the year 2018 would be placed on construction of infrastructure and equipping the new

Tuesday 29 May 2018

BD

C002D5556

BUSINESS DAY

Markets + Finance

29

‘Providing proprietary research, commentary, analysis and financial news coverage unmatched in today’s market. Published weekly, Markets & Finance provides all the key intelligence you need.’

NOVA Merchant Bank moves to expand financial services in Nigeria BALA AUGIE

A

nything Phillips Oduoza, former Group Managing Director/ Chief Executive Officer of United Bank of Africa (UBA) Plc touches turn gold as he is the man with the magic fingers.

Presently, he is the chairman of the new lender, NOVA Merchant Bank Limited. The word NOVA in Latin means new. The bank started operation early this year after obtaining license from the Central Bank of Nigeria (CBN); which makes it the newest merchant bank in Africa’s most populous nation.

Just like a ship with an incredible hull and oars to steady her during a cruise, the enormous experience of the management team of the new lender will spur it growth.

The board of the merchant bank, which Phillips Uduoza is chairman, comprises several prominent individuals including one time ICAN president Emmanuel Ijewere and former Director-General of the Bureau of Public Enterprises, Bolanle Onagoruwa.

The lender’s Managing Director/Chief Executive Officer, Chinedu Ikwudinma, was a Director outside Nigeria in one of the major financial institutions in the world.

It also has a British board member who was the managing director in a bank that was focused on investment banking and he also comes with a lot of experience.

It will be recalled that when Phillips Oduoza, a first class graduate of Civil Engineering and banker was at the realm of affairs at UBA, the bank expanded across the continent, with operations across 19 countries.

During his stint as group managing director of UBA

Phillips Oduoza

between August 1, 2010 and July 2016, the Pan African lender’s net profit and total assets moved to N32.0 billion and N3.28 trillion from N668.0 million and N1.61 trillion when he joined the bank.

The future of the banking industry and the economy lies in the hand of lenders like NOVA that has the products and talents to undertake transactions necessary to developing the economy.

Phillips Uduoza said the reason they chose the name NOVA was because they wanted to come in with new ideas, fresh thinking, and cutting edge technology and be able to change the way customers are served.

“Our key focus is wholesale banking and investment banking. So, we want to bring about innovativeness in these areas and we believe that the industry has reached that stage where it needs another quantum leap to take it to the next level,” said Uduoza.

“Banking is changing globally with the emergence

Chinedu Ikwudinma

of new entrants with non-traditional business models and modus operandi leveraging advances in technology. We believe Nigeria should not be left behind,” said Uduoza.

Experts say the entrant of new lenders could help deepen financial Inclusion as Nigeria is still under banked.

According to a recent survey by Enhancing Financial Innovation & Access (EFInA), out of 96.4 million adults in Nigeria, 56.3 million (58.4 percent of the adult population) are now financially served.

Oduoza slated they decided to go for new banking license amid a tough and unpredictable macroeconomic recession because NOVA’s products, ideas and knowledge are suited in dealing with the challenges faced by businesses in Nigeria.

“This means that when the economy normalises, we are going to flourish. That is why we are coming out now,” said Oduoza.“As we are a new bank with a clean slate and well positioned to take advantage of emerging op-

portunities as the economy recovers” The gross domestic product of Africa’s largest oil producer expanded for three straight quarters last year after a 1.6 percent contraction in 2016, with year-on-year growth reaching 1.9 percent in the final three months of 2017. An increase in crude prices and the introduction of a new foreign-exchange system that ended a crippling shortage of dollars helped attract more investment flows into the country, while improving liquidity for the nation’s lenders.

Indeed the merchant bank is coming on board at a time when Nigerian banks are recording profit amid rising non performing loans brought on by a slump in oil price in mid 2014.

For the year ended December 2017, after tax profits for the 10 lenders that have reported results spiked by 44.28 percent to N693.92 billion from N478.19 billion the previous year (2016), data gathered by BusinessDay shows.

For the full year period ending 2016 the 10 banks saw their profits increase by 21 percent, while there was a 12.32 percent decline in profits in 2015; a period when the sudden drop in crude oil prices from above a $100 per barrel to near $40 forced banks with heavy exposure to the sector to write off loans that began to go bad.

NOVA, a green field merchant bank (the only bank without legacy issues) is poised for the stiff competition in the industry, with a motivated and talented work force and cutting edge technology.

It aims to become a key wholesale and investment banking in Ngeria, wherein lies its area of strength.

“I did mention that as far as investment banking is concerned, we have prepared ourselves adequately to play in that sector and we believe that we have the capabilities, technology and products to be able to compete strongly.

We are not going to go into so many things,” said Uduoza.

The management and

BD MARKETS + FINANCE (Business Team lead: PATRICK ATUANYA - Analysts: BALA AUGIE and LOLADE AKINMURELE)

board of directors of NOVA has put in place a very strong enterprise risk management framework covering market risk, operational risk, credit risk. These excellent risk management strategies will ensure non performing loans are within the regulatory threshold.

“In terms of risk management and credit profile, you will find out that the customers in segment we are playing in have lower risks compared to other segments, because they are well structured,” said Uduoza.

NOVA has various market driven and innovative products that will bolster the top lines (sales) and deliver a high return on investment for shareholders.

For instance on the wholesale banking side, It offers trade services, financing, cash management and foreign exchange services.

On the investment banking side, the lender is looking at mergers and acquisition, advisory services, securities and trading, wealth and asset management.

30

BUSINESS DAY

Live @ the Stock exchange

C002D5556

Tuesday 29 May 2018

Prices for Securities Traded as of Monday 28 May 2018 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. 309,529.30 10.70 -0.47 259 27,413,685 UNITED BANK FOR AFRICA PLC 355,673.98 10.40 -1.89 267 10,167,585 819,448.49 26.10 -2.06 397 9,139,905 ZENITH INTERNATIONAL BANK PLC 923 46,721,175 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 332,031.46 9.25 -4.64 480 26,534,513 480 26,534,513 1,403 73,255,688

BUILDING MATERIALS DANGOTE CEMENT PLC 4,174,924.31 245.00 0.41 28 82,547 LAFARGE AFRICA PLC. 333,926.99 38.50 -4.94 33 246,681 61 329,228 61 329,228

EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY LTD 432,330.22 734.70 - 6 1,145 6 1,145 6 1,145 1,470 73,586,061 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 0 0 81,082.35 85.00 - 8 18,424 OKOMU OIL PALM PLC. PRESCO PLC 75,000.00 75.00 - 5 6,254 13 24,678 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 511.20 4.26 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 2,430.00 0.81 - 4 72,000 4 72,000 17 96,678

DIVERSIFIED INDUSTRIES A.G. LEVENTIS NIGERIA PLC. 1,561.90 0.59 - 2 1,800 221.82 0.57 1.79 16 296,416 JOHN HOLT PLC. S C O A NIG. PLC. 2,111.93 3.25 - 1 10 51,622.95 1.27 -4.51 79 8,399,487 TRANSNATIONAL CORPORATION OF NIGERIA PLC U A C N PLC. 42,066.93 14.60 -2.99 29 288,590 127 8,986,303 127 8,986,303

BUILDING CONSTRUCTION ARBICO PLC. 711.32 4.79 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 36,366.00 27.55 - 26 114,086 ROADS NIG PLC. 165.00 6.60 - 0 0 26 114,086 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT CO. LIMITED 5,560.57 2.14 - 11 122,050 11 122,050 REAL ESTATE INVESTMENT TRUSTS (REITS) SKYE SHELTER FUND PLC 2,000.00 100.00 - 0 0 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 11,300.89 45.20 - 0 0 26,682.70 10.00 - 0 0 UPDC REAL ESTATE INVESTMENT TRUST 0 0 37 236,136

AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 1,431.80 0.30 -3.23 2 130,000 2 130,000 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 15,658.99 2.00 0.50 16 566,876 GOLDEN GUINEA BREW. PLC. 242.22 0.89 - 0 0 GUINNESS NIG PLC 219,038.28 100.00 - 74 173,401 INTERNATIONAL BREWERIES PLC. 445,265.65 51.80 - 6 10,192 NIGERIAN BREW. PLC. 919,643.74 115.00 -0.35 179 641,598 275 1,392,067 FOOD PRODUCTS DANGOTE FLOUR MILLS PLC 42,750.00 8.55 -3.93 81 3,098,285 DANGOTE SUGAR REFINERY PLC 198,600.00 16.55 0.30 116 2,507,859 FLOUR MILLS NIG. PLC. 123,421.43 30.10 2.03 92 835,231 HONEYWELL FLOUR MILL PLC 17,922.25 2.26 -4.64 15 340,195 MULTI-TREX INTEGRATED FOODS PLC 1,489.00 0.40 - 0 0 N NIG. FLOUR MILLS PLC. 1,220.67 6.85 - 0 0 NASCON ALLIED INDUSTRIES PLC 52,988.77 20.00 -1.23 58 1,308,897 UNION DICON SALT PLC. 3,676.41 13.45 - 0 0 362 8,090,467 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 23,477.53 12.50 -4.80 32 446,788 NESTLE NIGERIA PLC. 1,268,250.00 1,600.00 - 80 93,116 112 539,904 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 3,439.82 3.30 - 5 57,750 5 57,750 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 86,754.92 21.85 - 11 117,567 281,505.27 49.00 - 16 73,271 UNILEVER NIGERIA PLC. 27 190,838 783 10,401,026

BANKING DIAMOND BANK PLC 30,108.51 1.30 -5.11 57 2,566,050 ECOBANK TRANSNATIONAL INCORPORATED 376,165.80 20.50 - 48 104,539 FIDELITY BANK PLC 52,444.38 1.81 -4.74 113 12,537,999 GUARANTY TRUST BANK PLC. 1,206,678.35 41.00 -2.26 228 3,150,520 JAIZ BANK PLC 18,562.48 0.63 -3.17 12 565,870 SKYE BANK PLC 9,438.60 0.68 -2.86 37 1,547,111 STERLING BANK PLC. 37,715.45 1.31 -2.96 59 5,136,295 UNION BANK NIG.PLC. 168,900.37 5.80 -4.92 34 826,887 UNITY BANK PLC 10,403.51 0.89 -4.30 20 629,287 WEMA BANK PLC. 27,002.13 0.70 -4.11 29 1,801,916 637 28,866,474 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE COMPANY PLC 4,117.00 0.20 - 1 5,000 AIICO INSURANCE PLC. 3,950.22 0.57 1.75 32 40,750,282 AXAMANSARD INSURANCE PLC 25,200.00 2.40 - 3 21,100 CONSOLIDATED HALLMARK INSURANCE PLC 2,240.00 0.32 6.67 15 580,500 CONTINENTAL REINSURANCE PLC 15,351.66 1.48 - 7 82,100 CORNERSTONE INSURANCE COMPANY PLC. 5,155.33 0.35 - 1 500 EQUITY ASSURANCE PLC. 2,800.00 0.20 -4.76 3 154,500 GOLDLINK INSURANCE PLC 2,411.47 0.53 - 0 0 GREAT NIGERIAN INSURANCE PLC 1,913.74 0.50 - 0 0 GUINEA INSURANCE PLC. 2,456.00 0.40 - 0 0 INTERNATIONAL ENERGY INSURANCE COMPANY PLC 539.32 0.42 - 0 0 LASACO ASSURANCE PLC. 2,782.90 0.38 -2.56 76 6,552,286 LAW UNION AND ROCK INS. PLC. 4,210.40 0.98 - 2 2,000 LINKAGE ASSURANCE PLC 6,320.00 0.79 -4.82 26 1,619,007 MUTUAL BENEFITS ASSURANCE PLC. 2,800.00 0.35 -2.86 19 4,205,105 N.E.M INSURANCE CO (NIG) PLC. 13,518.09 2.56 1.56 19 1,423,940 NIGER INSURANCE CO. PLC. 1,857.48 0.24 -4.00 56 4,344,042 PRESTIGE ASSURANCE CO. PLC. 1,832.36 0.48 - 0 0 REGENCY ALLIANCE INSURANCE COMPANY PLC 1,733.88 0.26 - 4 19,700 SOVEREIGN TRUST INSURANCE PLC 2,252.02 0.27 3.85 36 5,963,196 STANDARD ALLIANCE INSURANCE PLC. 5,422.63 0.42 - 0 0 4,483.72 0.48 - 1 500 STANDARD TRUST ASSURANCE PLC UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 7 415,260 UNIVERSAL INSURANCE COMPANY PLC 8,000.00 0.50 - 0 0 VERITAS KAPITAL ASSURANCE PLC 4,714.67 0.34 - 2 7,500 WAPIC INSURANCE PLC 6,423.71 0.48 -7.69 33 1,536,294 343 67,682,812

MICRO-FINANCE BANKS FORTIS MICROFINANCE BANK PLC 11,799.67 2.58 - 0 0 NPF MICROFINANCE BANK PLC 4,413.21 1.93 - 24 480,565 24 480,565 MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 5,460.00 1.30 - 0 0 7,370.87 0.50 - 0 0 ASO SAVINGS AND LOANS PLC INFINITY TRUST MORTGAGE BANK PLC 5,922.05 1.42 - 0 0 RESORT SAVINGS & LOANS PLC 5,664.87 0.50 - 0 0 2,949.22 3.02 - 0 0 UNION HOMES SAVINGS AND LOANS PLC. 0 0 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 7,600.00 3.80 -5.00 96 3,065,002 CUSTODIAN AND ALLIED PLC 28,232.95 4.80 - 13 51,716 720.00 0.48 - 1 50,000 DEAP CAPITAL MANAGEMENT & TRUST PLC FCMB GROUP PLC. 39,605.42 2.00 -9.09 69 7,686,912 411.91 552.20 - 0 0 NIGERIA ENERYGY SECTOR FUND 1,749.43 0.34 - 0 0 ROYAL EXCHANGE PLC. SIM CAPITAL ALLIANCE VALUE FUND 3,312.39 103.20 - 0 0 477,349.62 47.50 - 18 83,218 STANBIC IBTC HOLDINGS PLC UNITED CAPITAL PLC 17,160.00 2.86 -4.67 116 5,704,006 313 16,640,854 1,317 113,670,705

HEALTHCARE PROVIDERS EKOCORP PLC. 1,680.29 3.37 - 0 0 1,563.38 0.44 -4.35 3 600,000 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 3 600,000 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 544.04 0.55 - 0 0 0 0 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 FIDSON HEALTHCARE PLC 8,925.00 5.95 - 16 382,718 24,156.71 20.20 - 9 22,284 GLAXO SMITHKLINE CONSUMER NIG. PLC. MAY & BAKER NIGERIA PLC. 2,606.80 2.66 - 17 284,822 1,139.49 0.66 - 0 0 NEIMETH INTERNATIONAL PHARMACEUTICALS PLC NIGERIA-GERMAN CHEMICALS PLC. 556.71 3.62 - 0 0 PHARMA-DEKO PLC. 477.00 2.20 - 0 0 42 689,824 45 1,289,824

COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 710.40 0.20 - 4 305,000 4 305,000 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 1,470.89 0.50 - 0 0 0 0 IT SERVICES CWG PLC 6,413.06 2.54 - 0 0 NCR (NIGERIA) PLC. 680.40 6.30 - 0 0 435.56 0.88 - 1 100 TRIPPLE GEE AND COMPANY PLC. 1 100 PROCESSING SYSTEMS CHAMS PLC 1,784.50 0.38 - 0 0 E-TRANZACT INTERNATIONAL PLC 19,110.00 4.55 - 1 150 1 150 6 305,250

BUILDING MATERIALS BERGER PAINTS PLC 2,608.41 9.00 - 4 5,500 25,760.00 36.80 - 8 61,608 CAP PLC CEMENT CO. OF NORTH.NIG. PLC 30,160.27 24.00 - 40 154,201 FIRST ALUMINIUM NIGERIA PLC 886.35 0.42 - 2 31,000 MEYER PLC. 361.24 0.68 - 3 710 PAINTS AND COATINGS MANUFACTURES PLC 467.82 0.59 - 1 200 PORTLAND PAINTS & PRODUCTS NIGERIA PLC 1,626.50 2.05 - 2 2,900 PREMIER PAINTS PLC. 1,279.20 10.40 - 0 0 60 256,119 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,256.91 2.09 - 0 0 CUTIX PLC. 2,641.98 3.00 - 3 47,000 3 47,000 PACKAGING/CONTAINERS BETA GLASS PLC. 43,672.55 87.35 - 7 3,382 GREIF NIGERIA PLC 388.02 9.10 - 2 44 9 3,426 72 306,545

CHEMICALS B.O.C. GASES PLC. 1,927.21 4.63 - 2 250 2 250 METALS ALUMINIUM EXTRUSION IND. PLC. 2,023.60 9.20 - 2 2,794 2 2,794 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 1 5,000 1 5,000 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 77.00 0.35 - 1 100 1 100 6 8,144

ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,377.79 0.22 -8.33 16 1,648,500 16 1,648,500 INTEGRATED OIL AND GAS SERVICES OANDO PLC 85,776.75 6.90 -4.83 169 3,997,838 169 3,997,838 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 59,317.92 164.50 - 29 16,090 CONOIL PLC 22,067.68 31.80 - 17 21,146 7,211.92 5.53 4.93 59 1,465,146 ETERNA PLC. FORTE OIL PLC. 53,010.98 40.70 - 34 90,068 MRS OIL NIGERIA PLC. 8,699.11 34.25 -4.99 49 236,803 TOTAL NIGERIA PLC. 71,978.63 212.00 - 22 33,086 210 1,862,339 395 7,508,677

ADVERTISING AFROMEDIA PLC 2,219.52 0.50 - 0 0 0 0 AIRLINES MEDVIEW AIRLINE PLC 20,866.39 2.14 - 0 0 0 0 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 564.65 0.48 - 1 100 1 100 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 3,536.98 6.00 - 2 17,200 TRANS-NATIONWIDE EXPRESS PLC. 384.45 0.82 - 4 6,335 6 23,535 HOSPITALITY TANTALIZERS PLC 1,156.19 0.36 -2.70 1 500,000 1 500,000 HOTELS/LODGING CAPITAL HOTEL PLC 4,878.66 3.15 - 3 2,200 IKEJA HOTEL PLC 5,612.75 2.70 4.65 86 3,777,227 7,862.53 3.50 - 1 250 TOURIST COMPANY OF NIGERIA PLC. TRANSCORP HOTELS PLC 56,623.01 7.45 - 1 1,000 91 3,780,677 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 5,760.00 0.48 - 0 0 0 0 PRINTING/PUBLISHING ACADEMY PRESS PLC. 302.40 0.50 - 0 0

Tuesday 29 May 2018

BUSINESS DAY

31

32

BUSINESS DAY

STRATEGYBRIEFING

Tuesday 29 May 2018

IDEAS THAT POWER HIGH PERFORMANCE

The worst strategic error in business

B

usiness leaders generally agree on the need for strategy. No business can survive without one because no matter how turbulent and intensively competitive an industry might be, the firm with the right strategies will always have superior results.

Performing on top of the market requires a firm grip on strategy.

Sadly most executives are confused about strategy.

They don’t know what it is.

As I travel and interact with executives, I find one passion burning in the heart of many of them. I’ve seen them express it with intense passion, I’ve watched them blame everything from the government policies to climatic conditions to anything conceivable as being the limiting factor behind their inability to reach this goal.

What is the goal? The drive to be the best company or business in their industry.

This is the competitive focus of many companies.

It’s not hard to know why.

The society rewards ‘best’. We are conversant with phrases like, ‘the best graduating student’, ‘the best footballer’, ‘the best staff of the month’ etc. So we try to be the best bank, the best insurance company, the best school, the best furniture

company.

Unfortunately that’s the wrong competitive focus because in the very first instance, there is no such thing as a ‘best’ company! There is no best car, no best bank, no best restaurant because a company could be best or otherwise depending on the need of the person accessing their products or services.

What works for Charles may not work for Seyi. What works for Amara may not work for Zain. That’s just the way it is.

Superior performing companies don’t focus on been the best company. Consider the automobile giant, Toyota.

Toyota’s competitive focus is ensuring that their products meet the highest expectations of the market and even exceed it . the Toyota production system strive for the absolute elimination of waste , overburden and imbalance in all areas to ensure smooth and efficient operations. Going the extra mile for them means providing customers with the highest quality vehicles , at lowest possible cost , in a timely manner with the shortest possible lead times.

This defined their uniqueness. It emphasizes what make Toyota cars unique.

You can get a good car at a low cost. Toyota is a unique car but by all means not the best car because there is no

best car.

All superior performing cars follow the same path, their focus is on being unique, not being the best.

They focus on a segment of the market or may be on the whole market but with a unique offering. It is this uniqueness that gives them a competitive advantage. The worst competitive error is to compete on being the best.

You can’t be all things to all people and expect to be a superior performer. Competing on being the best can at best keep you struggling along with others.

You see behind the drive to be the best is the assumption that there is a best already which you intend to take out. Apparently there will always be a market leader in every industry. But one thing to understand is that market leadership is a result of offering unique value to the market. It is a natural consequence of a unique value clearly communicated to the right market. Of course this presents a question, which market is the right one? Well the right market is that whose needs fits best into the offering targeted at them. So they buy not because you have to sale but because they need to buy.

Take the Swedish furniture company, IKEA for instance.

People on budget buy from them not because IKEA wants to sale but because IKEA offers them the chance of owning good furniture at a low cost. The reason Honda could not capture the Indian tricycle market even though it has a respected brand and may be better quality than local rival, Bajaj was simple: Bajaj configured its offering in a way its most beneficial to the Indian user. Honda had a good product and a respected brand but they lacked one key thing in their fight for the Indian marketunderstanding of what the ideal Indian customer wants in a tricycle. Strong, reliable didn’t matter to the Indian user as easy availability of repair service and spare parts.

That’s was the Bajaj promise; that was why they won the Indian market and forced Honda out.

This case is of a particular attention because it demostrates that a small local company in an emerging market can successfully root out a global force or at least control a share of the market.

Of course that’s the importance of very purpose of strategy. If market situation is such that nothing stands between you and your customer then there would have been no need for strategy.

So as the fight for market share intensifies in every industry, understand that if you are going to control the market you will need to rethink your assumptions about strategy and what it means to be strategic.

Strategic effectiveness begins by having a clear idea of your your customer, his needs and his constraints. Then you configure your product, its distribution and ownership in a way this customer finds it most useful while of course considering your chance of making a profit. Begin by identifying unmet needs you can take care of. There’s no way around it. You’re either going to meet the needs of the people in a whole new way or meet needs nobody cares to take care of. That’s what will give you the market leading position you desire.

Yet there’s much more.

Brian Reuben(@brianoreuben) is an advisor on strategy and leadership. He regularly conducts keynote presentations and senior executive workshops with companies around the world on strategy and leadership. He heads BusinessDay Training Was this article helpful? Share your thoughts with us on Facebook @bdtraininglive or email us on trainings@businessdayonline.com

This Page Is Open For Sponsorship, for details call 0708 234 5251.

Tuesday 29 May 2018

C002D5556

Access Bank Rateswatch

Market Analysis and Outlook: May 25 - June 1, 2018

KEY MACROECONOMIC INDICATORS Indicators

Current Figures

Comments

GDP Growth (%)

1.95

Q1 2018— lower by 0.11% compared to 2.11% in Q4 2017

Broad Money Supply (M2) (N’ trillion) Credit to Private Sector (N’ trillion)q

24.52 22.25

Increased by 0.91% in Apr’ 2018 from N24.30 trillion in Mar’ 2018 Increased by 0.045% in Apr’ 2018 from N22.24 trillion in Mar’ 2018

Currency in Circulation (N’ trillion) Inflation rate (%) (y-o-y)

1.96 12.48

Increased by 17.36% in Apr’ 2018 from N1.67 trillion in Mar’ 2018 Declined to 12.48% in Apr’ 2018 from 13.34% in Mar’2018

Monetary Policy Rate (%) Interest Rate (Asymmetrical Corridor)

14 14 (+2/-5)

Raised to 14% in July ’2016 from 12% Lending rate changed to 16% & Deposit rate 9%

External Reserves (US$ million) Oil Price (US$/Barrel) Oil Production mbpd (OPEC)

47.75 79.88 1.79

May 22, 2018 figure — an increase of 0.51% from May Start May 25, 2018 figure— an increase of 1.46% from the previous week Apr 2018 figure — a decrease of 0.44% from Mar’2018 figure

NSE ASI Market Cap(N’tr)

Friday

Friday

Change(%)

25/5/18 39,324

18/5/18 40,472.45

(2.84)

14.24

14.66

(2.84)

Volume (bn)

0.30

0.35

Value (N’bn)

2.95

5.08

(15.56)

Tenor

Amount (N' million)

Rate (%)

Date

Local Economy Nigeria’s gross domestic product (GDP) grew by 1.95% year-on-year in Q4 2018, the fourth consecutive growth since the country emerged from recession in Q2 2017. According to the National Bureau of Statistics (NBS), this is 2.87% higher than the rate recorded in the corresponding quarter of 2017 (–0.91%) but lower by 0.16% from rate recorded in the previous quarter (revised upwardly to 2.11% from 1.92%). In the first quarter of 2018, aggregate GDP stood at N28.46 trillion in nominal terms, compared to N26.03 trillion in Q1 2017. This resulted in a nominal GDP growth of 9.36%. The oil industry grew by 14.35% year-onyear in Q1 2018, measured against Q1 2017. The oil sector contributed 9.61% of total GDP in Q1 2018.

Average oil production stood at 2 million barrels per day Q1 2018, 0.5 million barrels higher than the daily average production recorded in Q4 of 2017 (1.95 million barrels per day). Non-oil GDP grew by 0.76%, 0.04% higher than the rate witnessed in Q1 2017. The non-oil sector contributed 90.39% of total GDP in Q1 2018. In a separate development, the Federation Accounts Allocation Committee (FAAC) disbursed the sum of N638.09 billion among Federal, States and Local Governments in April 2018 from the revenue generated in March 2018. The amount was 1.44% or N9.3 billion lower than the figure disbursed in March (N647.39 billion).

The amount distributed was from the statutory account, FOREX equalization, NNPC and value added tax (VAT) comprising of N480.59 billion, N62.53 billion, N11.27 and N83.70 billion respectively. A breakdown of the sum disbursed among the three tiers, revealed that the Federal Government received N268.27 billion, states received N170.13 billion and the local governments received N128.32 billion. The oil producing states received N55.98 billion as the 13% derivation fund.

Revenue generating agencies such as Nigeria Customs Service (NCS), Federal Inland Revenue Service (FIRS) and Department of Petroleum Resources (DPR) received N4.14 billion, N5.49 billion and N3.67 billion respectively as cost of revenue collections. In another development, the Monetary Policy Committee of the Central Bank of st nd Nigeria at its meeting on May 21 and 22 , 2018 retained the monetary policy rate (MPR) at 14%.

The decision to retain the rate was based on factors such as a forecast of high liquidity injection in the second half of the year, driven largely by substantial expansionary fiscal policy which will lead to upward prices so a tightening will ensure mop-up of liquidity in the system. The committee also retained other monetary policy parameters such as the Cash Reserves Ratio at 22.5%, the Liquidity Ratio at 30% and the Asymmetric Corridor at +200 basis points and -500 basis points around the MPR.

91 Day 182 Day 364 Day

3,384.18 16,920.90 13,536.72

10.2557 11.0801 11.9782

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

Stock Market Market indicators at the Nigerian stock market continued their losing streak for the second

23.21 (3.47)

(0.83)

35.64 (8.03) 11.28

Sugar ($/lb.)

Wheat ($/bu.)

Metals Gold ($/t oz.)

Silver ($/t oz.)

Copper ($/lb.)

12.24 536.50

6.07 6.03

(20.16) 23.76

1306.05 16.70 310.15

1.47 1.83 1.16

(0.87) (2.85) (5.38)

Friday Rate

Change

(%)

(Basis Point)

25/5/18

18/5/18

17.1700 19.6700 31.8750 13.4800 14.5900

7.8300 9.0000 8.8750 13.6178 15.3127

934 1067 2300 (14) (72)

Friday

Friday

1 Month

(N/$)

(N/$)

Rate (N/$)

25/5/18

18/5/18

25/4/18

Official (N) Inter-Bank (N)

305.90 340.28

305.85 339.91

305.65 338.45

BDC (N) Parallel (N)

362.00 366.00

362.00 363.00

363 363

BOND MARKET

NIGERIAN INTERBANK TREASURY BILLS TRUE YIELDS Tenor Indicators

Change (Basis Point)

(%)

(%)

25/5/18

18/5/18

3-Year 5-Year 7-Year

0.00 13.30 13.17

0.00 13.41 12.64

0 (11) 52

10-Year 20-Year

13.40 13.43

13.34 13.38

5 5

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

(%)

Change (Basis Point)

18/5/18

11.96 12.61

12.37 12.48

(41) 13

6 Mnths 9 Mnths

12.95 13.33

12.78 13.47

17 (14)

12 Mnths

13.20

13.57

(37)

ACCESS BANK NIGERIAN GOV’T BOND INDEX

Friday (%) 25/5/18

Index

Disclaimer

25/5/18

Friday

1 Mnth 3 Mnths

Indicators

Friday

Friday (%)

AVERAGE YIELDS

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

1.46 3.51

0.47

(%)

Friday

2626.00

YTD Change (%)

1.31

FOREIGN EXCHANGE MARKET

Tenor

79.88 2.95

1-week Change (%)

86.24

Friday Rate

Market

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

25/5/18

119.75

NIBOR

OBB O/N CALL 30 Days 90 Days

Indicators

Coffee ($/lb.)

(41.92) Cotton ($/lb.)

MONEY MARKET Tenor

Global Economy In the US, the Federal Reserve retained its target range of fund at 1.5% -1.75% during its May 2018 meeting. The Fed officials cited the strength of the economy and solid hiring trends, as well as the fact inflation had inched higher as supporting evidences for keeping rates unchanged. The Fed, however, insisted that it will continue to move at a gradual pace even if inflation rises above the 2% target especially where the increase is only temporary. Elsewhere, China Gross Domestic Product (GDP) expanded by 1.4% quarter-onquarter in the first quarter of 2018, the figure posted is 0.2% lower than the rate recorded in the previous quarter. According to the China’s Statistics Bureau, it is the lowest pace of expansion since the first quarter of 2016. Year-on-year the economy advanced 6.8%, the same rate in the previous two quarters. In a separate development, annual inflation in the United Kingdom, decreased to 2.4% in April 2018 from 2.5% seen in March. It is the lowest rate since March 2017 according to the Office of National Statistics and was as result of lower prices in cost of transport especially in air fare cost.

COMMODITIES MARKET

STOCK MARKET Indicators

33

BUSINESS DAY

Friday (%)

Change (Basis Point)

18/5/18

2,676

2,675

0.04

Mkt Cap Gross (N'tr) Mkt Cap Net (N'tr) YTD return (%)

9.07 5.90 8.96

9.07 5.90 8.91

0.04 (0.10) 0.05

YTD return (%)(US $)

-46.32

-46.34

0.02

TREASURY BILLS (MATURITIES)

consecutive week. The All Share Index declined by 1,148.83 points to 39,323.62 points from 40,472.45 points. Similarly, market capitalization lost 2.8% to close at N14.24 trillion from N14.66 trillion the previous week. Market remained bearish as a result of persisting sell-offs by investors as profit taking held sway. Next week, performance parameters may remain weak as investors shy away from active stock purchases in view of portfolio reversals from the equity space.

Money Market Cost of borrowing at the money market rose last week as a result of Retail Secondary Market Intervention Sales (SMIS). Short-dated placements such as Open Buy Back (OBB) and Over Night (O/N) rates climbed to 17.17% and 19.67% from 7.83% and 9% respectively the previous week. Longer dated placements however, trended downwards. The 30-day and 90-day NIBOR closed lower at 13.48% and 14.59% from 13.62% and 15.31% the prior week.

This week, rates may trend lower due to inflows from Federal Accounts Allocation Committee (FAAC) fund, primary market auction and Open Market Operation (OMO) Treasury bill maturities.

Foreign Exchange Market Last week, the naira depreciated across all FX market segments. The interbank FX rate pared 37 kobo to close at N340.28/$ from N339.91/$.

Similarly, the official and parallel rates declined by 5 kobo and N3 respectively to close at N305.90/$ and N366 from N305.85 respectively. The depreciation of the naira across all markets stemmed from increased dollar demand as well as rising concerns over foreign portfolio outflows investments. FX rates may likely be stable this week as the monetary authorities intervene to stem the tide of currency depreciation.

Bond Market Average bond yields in the fixed income market recorded mixed performance for the week ended th May 25 2018 even though the Access Bank bond index posted a modest increase. The index increased slightly by 1.11 points to close at 2,676.49 points from 2,675.38 points. The improvement witnessed was due to uptake of bonds by local counterparties amidst the continuous sell-off by foreign investors. Yields varied across maturities as the five year yield declined from 13.41% to 13.30% while the seven-, ten and twenty-year debt papers increased to 13.17%, 13.40% and 13.43% at the close of trades last week, from 12.64%, 13.34% and 13.38% for the corresponding maturities the prior week. This week we expect that yields may increase as the sell-off of bond by foreign investors persists.

Commodities Market Crude oil price eased up in the week ended 25th May 2018 due to the speculations of Russia’s decision to increase oil production in order to balance the market. OPEC crude oil price declined to $76.62 from $76.75 in the preceding week.

However, Bonny Light, Nigeria’s reference crude witnessed slight volatility as it price increased up to $80.08 within the week but slightly edged down to $79.88 at the close of the week. In contrast, precious metals prices nudged higher last week as a result of geopolitical uncertainty surrounding USNorth Korea talks and US reinstatement of sanctions on Iran. Gold went up 1.47% to close at $1306.05 an ounce, while silver rose 1.8% to settle at $16.70 an ounce. This week, expectations of easing oil production limits by two dozen producer nations will likely force oil prices lower. Precious metal might trend downwards as concerns of a rate hike by the Fed would cause investors to move to interest yielding asset.

MONTHLY MACRO ECONOMIC FORECASTS Variables

May’18

Jun’18

Jul’18

Exchange Rate (Official) (N/$)

338.50

339.90

340.10

Inflation Rate (%)

11.89

11.50

10.80

Crude Oil Price (US$/Barrel)

80

78

79

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

34 BUSINESS DAY NEWS

C002D5556

Tuesday 29 May 2018

2019 Election: EU warns ...

Continued from page 1

2019 is a decision for the Nigerian people. Our concern as partners of Nigeria is to see a process that is free, fair and inclusive.

We are particularly keen to see greater participation in politics from under-represented groups, including women, young people and people with disabilities.”

“We offer our strong support to the Independent National Elections Commission (INEC) and welcome the technical improvements they have introduced to the electoral process. We encourage the government and legislators to work with INEC to achieve further improvements at least six months before the elections, in line with the established ECOWAS protocol.”

“Democracy is not only about the voting process. It also requires a strong and ongoing commitment from political actors to uphold the democratic ideal. We have noted with concern recent reports of violence, intimidation and corruption, both within parties and between parties. We take advantage of this national celebration of democracy to urge all political parties to maintain Nigerian and international norms and support a credible process.

It is the fundamental right of the Nigerian people to freely express their will now and in the forthcoming elections”.

He said, “ The struggle to achieve democracy gives it a special value and places responsibility on all of us to support the democratic process. We congratulate Nigeria on its progress since 1999, including the first peaceful transition of power from a ruling party to an opposition party in 2015. As we celebrate your progress, we encourage and support Nigeria and its people to consolidate and deepen democracy as the country heads towards important elections next year”.

European Union members also celebrated all those who sacrificed so much for democracy, “In Nigeria, as in so many of our countries, the right for all citizens to enjoy equal participation in the democratic process was achieved after considerable struggle and suffering”.

The EU came as Anti-corruption group Transparency International said on Monday that the Buhari government has in the run-up to elections expanded the use of opaque $670 million-ayear funds that fuel graft, according to a Reuters report.

The funds, known as “security votes”, are a relic of military rule, mainly disbursed in hard Continued from page 1

and Russia is occurring simply because of a tight market and the magnitude of the promised intervention by the two oil producers remains uncertain and even if it comes in at one million barrels daily, such an increase would simply offset the voluntary production within OPEC and there is still the commitment by the cartel to restrain production among members.

According to the report any intervention by the Russians and the Saudis will be gradual and would leave the global oil

cash and nominally released for dealing with unexpected security issues. They come from both federal and state governments, although the vast majority is disbursed under the latter.

According to Transparency International’s report on Monday they have become “synonymous with official corruption and abuse of power”. The watchdog’s report comes as President Muhammadu Buhari is gearing up to run for a second term in February 2019.

A Ni g e r i a n p r e s i d e n c y spokesman did not respond to calls and messages seeking comment about the report.

Buhari has built his administration’s policy on the twin pillars of tackling Nigeria’s endemic corruption and restoring stability to the highly insecure country. Hundreds have died this year in communal unrest in the hinterlands and the Boko Haram Islamist insurgency in the northeast.

“The security vote is one of the most durable forms of corruption operating in Nigeria today,” said Katherine Dixon, Transparency International’s director for defence and security, in a statement.

“Yet instead of addressing its many urgent threats, the everincreasing use of security votes is providing corrupt officials with an easy-to-use and entirely hidden slush fund.”

The group said the spending “is not subject to legislative oversight or independent audit because of its ostensibly sensitive nature”, adding that the funds are channelled into political activities such as election campaigns or embezzled outright.

It said federal-level total spending on items identified as security votes increased by 43 percent in 2018’s budget from 2017 and included payments to a university, a museum commission and a dental technology school.

Reuters checked some of the figures included in Transparency International’s report against a draft version of the 2018 budget, which has not yet been signed into law, and confirmed payments to those recipients were planned and identified as security votes.

Most of the estimated $670 million of security votes is disbursed by state governments, with federal spending making up only $51 million, Transparency International said. State government changes in disbursement varied, according to the report’s data.

>>>>

L-R: Tunde Lemo, former deputy governor, Central Bank of Nigeria (CBN); Jude Monye, acting chief executive officer, Heritage Bank, and Franklin Ngwu, member of faculty, Lagos Business School, at the International Executive Development Programme for Investment Bankers from South Africa at the Lagos Business School in Lagos.

Buharinomics: Nigerians poorer ...

Continued from page 1

and decrepit refineries, and the resistance to have one exchange rate and let market forces determine its level, despite the near 50 percent fall in oil prices from its most recent peak.

The Internal Monetary Fund (IMF) in its latest article IV report on the country has noted that real GDP per capita has declined and may continue to decline unless critical reforms are implemented.

Real Gross Domestic Product (GDP) per capita grew 104.5 percent between 2000 and 2014 rising from $1253 in 2000 to a high of $2563 in 2014, while real GDP grew over the period growing from $157.5 Billion in 2000 to a peak of $452.3 Billion in 2014.

Since then both have begun to decline as the economy fails to expand faster than population growth. Rafiq Raji, Chief Economist at Lagos-based Macroafricaintel also agrees with the IMF warning that the progress the country has made so far is as a result of higher oil prices.

“I think the administration deserve some credit but things can certainly be better,” Raji said by phone.

In the banking sector, which performs financial intermediation for the economy Nigerian Banks have not been growing their loan books as a bad loan crises is just beginning to ease.

Following the 2016 recession,

Nigerian banks’ loan books contracted 15.4 percent in 2017.

Credit to the private sector stood at N22.4 trillion in March, 2018, flat from the N22.37 trillion it was a year ago in March 2017, Central Bank of Nigeria (CBN), data shows.

Despite the stabilization in banks’ foreign currency funding and liquidity profiles, Moody’s expects bank earnings to come under pressure. Capital metrics will also decline marginally over the 12 to 18 month outlook period. Additionally, asset quality will remain weak, but a further deterioration in loan performance will be marginal as operating conditions slowly improve.

“Operating conditions for the Nigeria’s banks will continue to gradually improve over the next 12 to 18 months, but remain challenging,” said Akin Majekodunmi a Vice President and Senior Credit Officer, at Moody’s. “Nigeria’s growth prospects remain vulnerable to global oil prices, as crude oil will remain the nation’s largest export commodity and its main generator of foreign currency for the foreseeable future.”

A top economic analyst in a Lagos based investment firm said Buhari has not really performed very well so there is nothing to celebrate or be optimistic about.

“During the country’s last recession period, it was higher oil prices that bought us out not government policies; the government has not done anything

significant to drive economic development,” the analyst who wants to remain anonymous said.

“Maybe on security and agriculture he might have done relatively well compared to others; however, for economy he has performed badly.”

Ayodeji Ebo, managing director of Afrinvest securities limited said the Buhari administration started on a very slow pace and made some critical mistakes especially in the handling of the FX market which lingered for a while and took the economy into a recession by more than a year.

“The introduction of the Economic Growth Recovery Plan (EGRP) has helped in terms of giving a direction on what the government is looking at. There has been improvement in terms of stability of power,” Ebo said by phone.

The FX market has been very stable in enough liquidity which has boost manufacturing activities however we should record more economic growth, boost confidence in the FX market and manage political risk especially as we approach elections,” Ebo concluded.

A financial analyst who wants to remain anonymous said the performance of this government in the last three years has been business as usual so there is really no improvement.

“We haven’t seen anything tangible since he came to office, running an economy requires more deliberate actions than what we have seen in the last three years.”

Goldman maintains bullish outlook... market in deficit through quarter three of 2018.

In addition, the researchers based their bullish outlook on other factors including the production disruption in Venezuela, saying , “ongoing disruptions in Venezuela and potential losses from Iran are likely to partially offset this higher supply as well as require increases in production in 2019, which will further reduce already limited spare capacity next year.”

Saudi Arabia and Russia signaled at the weekend that they

would likely ease their production cuts in the second half of the year.

Comments by their Energy Ministers suggest that such a decision would be driven by concerns that high oil prices start to impact global economic activity and was spurred by pressure from the US and China to bring barrels back online. On the back of the announcement, oil prices have sold off on these comments with Brent down from a high of near 80 percent to $76.44 /bbl The research note said despite

greater clarity on the OPEC/ Russia response which was delivered yesterday, some might be led into thinking the oil market is on a smooth path to rebalancing.

“Instead, the current level of the market deficit, the robustness of the demand backdrop, and the rising levels of disruptions all set the stage for inventories to fall further all the while OPEC spare capacity is drawn down.

“As a result, even if today’s headlines provide a cap on prices in the short term, we reiterate

our $82.5/bbl 3Q18 Brent price forecast (which effectively embedded such a supply response) and still see risks to prices in 2H18-2019 as skewed to further upside. In fact, history shows that increases in OPEC production quotas in a strong demand environment (like today) are followed by higher prices in the subsequent months.”

Brent crude the benchmark of Nigeria crude Oil prices continued to continues to fall lower Continues on www.businessdayonline.com

Tuesday 29 May 2018

C002D5556

35 NEWS

BUSINESS DAY

Obaseki set to launch innovation hub in Edo, attracts Microsoft, Siemens, others

I L-R: Uzoma Dozie, GMD/CEO, Diamond Bank; Segun Akano, MD/CEO, Upperlink Limited; Chukwuma Nweke, executive director, operations and infrastructure technology, United Bank for Africa; Olumide Akanmu, executive director, retail banking, FCMB; Adesola Akinsanya, executive director, technical and support services, Upperlink Limited; Festus Ugwu, executive director, Upperlink Limited, and Ireti Chukwuma, HR manager, Upperlink Limited, when Upperlink won the Central Bank of Nigeria’s (CBN) Electronic Payments Incentive Scheme (EPIS) Efficiency award in Lagos.

Shell wants stakeholders to sustain agreement on new cash call arrangement

2019: Atiku appoints Gbenga Daniel campaign DG

... says new arrangement working well

ormer Vice President and presidential hopeful of the People’s Democratic Party, Atiku Abubakar, has appointed former governor of Ogun State, Gbenga Daniel as the director-general of his 2019 presidential campaign.

The unveiling of Gbenga Daniel as director-general was contained in a press release by the media office of the former Vice President on Monday.

Daniel was a two-term governor of Ogun State from 2003 to 2011, with extensive network within the PDP. Before his election as governor in 2003, he was the CEO of a leading engineering company in the country.

His experiences both in politics and the private sector will have bearing in Atiku’s campaign for president in 2019.

According to the release, other appointments into Atiku 2019 Presidential Campaign will be announced when the leadership of the campaign resumes work.

OLUSOLA BELLO

S

hell Petroleum Development Company (SPDC) has advised that the parties involved in the new arrangement on cash call should keep to the agreement, as failing to do so may spell disaster not only for the industry but also for the economy.

Osagie Osunbor, country chair and managing director of SPDC, who asked the parties in the new joint venture agreement to keep faith with the letters of the agreement as that could lead to more investment from the international oil companies.

According to Osunbor, there will be a lot of confidence by the international oil companies, as the $15 billion the company want to invest is underpinned by confidence the company has in the country.

The Shell boss, who spoke on the sideline of a meeting in Lagos, said the Nigerian National Petroleum Corporation (NNPC) had largely kept faith with the agreement, and so

far would soon begin to flow into the oil and gas industry.

The Federal Government had initially paid $400 million out of the $1.5 billion owed the international oil companies. This was however different from the discounted $6.8 billion cash call arrears that covered over five years to international oil companies, but which the government was able to trim down to $5.1 billion. This $5.1 billion is to be paid off over a five-year period through incremental production, not from existing production.

The companies involved are ExxonMobil, Chevron, Shell, Total and Nigeria Agip.

The minister of state for petroleum resources, Ibe Kachikwu, had said the country’s oil production could increase by 700,000 barrels per day this year.

Meanwhile, Shell says it is committed to further unlocking Nigeria’s deep-water resources, and along with its co-venture and government partners is evaluating opportunities to further increase production of the Bonga field in an efficient and cost-effective way.

One such opportunity is the Bonga South West/Aparo (BSWA) Project. In June 2017, SNEPCo, a subsidiary of Shell, organised multi-stakeholder local content workshops on the potential opportunities the project might bring to Nigerian service providers.

This was in fulfilment of mandatory requirements by the Nigeria Content Development and Monitoring Board.

A decision on progressing the BSWA project is currently being awaited.

SNEPCo is also a co-venture partner in the Erha field, which is operated by the ExxonMobil subsidiary Esso Exploration and Production Nigeria (Deepwater) Limited.

Located 140km offshore in the Gulf of Guinea at water depths of between 1,200 and 1,800 metres, production commenced in 2006. The Erha FPSO has a production capacity of 210,000 barrels of oil per day. In recent years, the field has expanded production with both the North Phase 2 and 3 projects coming on stream ahead of schedule in 2015 and 2017, respectively.

F

n furtherance of its commitment to equip youths with skills and expertise to drive inclusive growth and development, the Governor Godwin Obasekiled administration, through its skills development arm, Edojobs, is set for the launch of the first ever state-backed innovation hub to activate and drive the state’s fledging technology ecosystem.

Set for launch on June 14, the hub would be run in partnership with Nigeria’s leading technology-based organisations, such as Siemens, Tech4Dev, Microsoft, Impact Hub, Curators University (an American University), HotelsNg, among others. It will train over 1,000 youths will be trained based on their interest in data management, programming, basic digital skills, and artificial intelligence.

The hub, to be known as Edo Innovation Hub, is to be located at the Institute of Continuing Education (ICE) in Benin City, which is currently being renovated.

Governor Obaseki said “the innovation hub would serve as a facility for training youths in the state and it would also serve as a center for follow-up trainings for youths who are participating in similar training programmes organised by the state government through its skills development arm popularly known as EdoJobs.

“Services on offer by the firms include an incubation and pre-incubation programme, acceleration programme, business clinics and co-working facilities.”

He added that the “Innovation Hub would be equipped with thousands of computers supported with high-speed connectivity.”

The innovation hub is expected to play a major role in facilitating the realisation of Obaseki’s campaign promise to put an end to unemployment in Edo State by provid-

Sustainable development: World Bank lauds Edo’s PPP model, solutions, transparency

Rivers wants 13% share from $1bn withdrawal

orld Bank has lauded the Governor Godwin Obaseki’s blueprint for the development of Edo State, which leverages the synthesis of the expertise of the private sector and an open, transparent public sector.

World Bank country director for Nigeria and coordinating director for West Africa Regional Integration, Rachid Benmessaoud, said this during a meeting between the World Bank team and officials of the Edo State government at the Government House in Benin City.

He said the World Bank “is impressed with how your government was able to provide the conducive environment for the private sector by operating a transparent, open and accountable government, and understanding what it takes for the private sector to come in by bringing the public element to

IGNATIUS CHUKWU

W

the private sector.”

Benmessaoud noted, “The executive directors of the bank are appreciative of the fact that you brought the public and private angles to address the state’s development challenges.

You have established a flagship effort that has resulted in the Azura power plant where you brought all of us together as one World Bank group at the site.

“We appreciate you and your team. I think you have done a lot in the state. We are very proud to be part of this journey. We hope to see how we can continue the journey together.”

Speaking on the success of Edo-Azura Power project, he said, “After visiting the state, the Executive Directors are studying how we can replicate this success, not only in the next Azura Phase II or III, but what it will take to do five more Azuras

in Nigeria and other parts of the world. The question on everyone’s lips now is how can we have more Azuras in West Africa?”

He said, “Other executive directors have started looking at East Africa to replicate the Edo model. You have really created a blue- print for the power sector, which clearly shows how governments can play a vital role in encouraging private sector growth.

“This is absolutely in line with what our President, Jim Yong Kim wants us to do. He wants us to focus on two things.

One building human capital and second, maximising finance for development.”

According to the World Bank official, “Human capital entails investing in your own people because that is not the role the development partner can play.”

A

new twist has appeared in the controversies surrounding the withdrawal of $1 billion from the Excess Crude Account to fight Boko Haram insurgency.

This is because Governor NyesomWikeofRiversStatehasstated that oil-producing states should be paid their 13 percent derivation of the $1 billion by the Federal Government.

Wike also said he was being lobbied to get the Rivers State House of Assembly to approve the withdrawal, which had since been made.

The trending controversy now was from the National Assembly, which said it was not consulted before withdrawal, threatening to impeachthePresident.Now,Wike said the Niger Delta states must be given their 13 percent out of it.

Speaking on Sunday at the

GovernmentHousePortHarcourt, Speaker of the House of Assembly, Ikuinyi-Owaji Ibani, who represented him at the event, Governor Wike said it was mandatory for the constitutional procedure to be followed.

Thegovernorsaidhehadbeen officially approached to lobby the Rivers State House of Assembly to approve the resolution mandating the withdrawal of the said funds.

While the state government is not against the fight against insurgency, all required constitutional procedures must be respected, he said.

“They have approached us to lobbyforthepassageofaresolution by the State House of Assembly approvingthe$1billionwithdrawn from the Excess Crude Account to fight insurgency.

“Thelawisclear.Everyproceed from oil, you must remove 13 percent derivation for oil producing states. We cannot be stampeded

ing 200,000 jobs.

Head, EdoJobs, and senior special assistant to the governor on Skills Development and Job Creation, Ukinebo Dare, said the innovation hub would open up the space for the development of critical manpower for Edo’s burgeoning investment climate.

She noted that efforts are being made to ensure that the state integrates and benefits from the gains of a digital economy, which is why digital literacy features prominently in the offerings of the different programmes at the cluster.

According to Dare, “There is a focus on Micro, Small and Medium Enterprises (MSMEs). Small and Medium Enterprises development is key for us as they have the potentials to engage a higher number of people.”

She noted that the hub has a number of programmes that are designed to help small businesses scale up and plug into the digital economy.

“We have several programmes in place to work with SMEs to incubate startups and develop them and assist them to grow. All of these form the strategy in place to create jobs,” she said.

She said the Pan Atlantic University is also expected to come in and with an SME tool kit boot camp for entrepreneurs to better prepare them for wealth creation.

Other programmes on the line up are those of Laura Kinnard of Drake University, United States of America (USA), who would train executives on leadership, organisational behaviour, management and marketing.

Impact Hub will create a co-working space and incubation centre where individuals can interact with other start-ups; Curators University, will teach Edo youths the rudiments of data science and artificial intelligence, among others.

into doing the wrong thing. So, where is the 13 percent derivation for oil producing states? In fighting insurgency, you must respect the law,” he said.

He said all the negative actions against the Rivers State government were targeted at denying the state the balance of the Paris Club refund.

Thegovernoralsoinformedthe State House of Assembly members oftherefusaloftheFederalGovernment to release budget support fund to the state when, saying all other states had received the fund.

“Ifyoucriticisethegovernment,they denythestatefundsduetoit.Thisis a government that claims that it is fighting corruption,” he said.

Earlier, the speaker described the Rivers State governor as a leader with outstanding developmental qualities, saying the imprints of the governor were found in all the local government areas of the state.

3 YEARS OF Buharinomic Tuesday 29 May 2018

Buhari’s government is a monumental failure - ADC chair A9 C002D5556

BUSINESS DAY

Disappointments greet Democracy Day T AKINREMI FEYISIPO, Ibadan

oday marks the 19th year of uninterrupted democratic rule in Nigeria.

The country joined the rest of the world as a democratic state since it attained independence in 1960 after three frantic attempts of sustainable democratic rule ended in failure.

However, in 1998, Gen. Abdulsalami Abubakar-led military junta ushered Nigeria into its fourth attempt at enthroning democracy and in 1999, elections were held which ushered in the present democratic dispensation.

Since then in the 58-year history of the country, this is the first time the country is able to survive without military intervention after five consecutive general elections in 1999, 2003, 2007, 2011 and 2015 respectively.

The Peoples Democratic Party (PDP) held sway for 16 years until 2015 general election when for the first time in Nigeria’s political history, the opposition party; All Progressives Congress (APC) was able to defeat the ruling party, a development described as a mirage.

Following the dissatisfaction of many Nigerians with the misrule of the umbrella party, there was a coalition of political parties which comprises, Action Congress of Nigeria (ACN), All Nigeria People’s Party (ANPP), CPC and part of APGA which fused into APC. The result of the 2015 presidential election was described by most watchers of political development in Nigeria as a soothing relief for the disenchanted group.

Despite the fact that Nigeria has experienced nineteen years of uninterrupted democracy practice there are various challenges confronting democratic consolidation and good governance.

Corruption constitutes one of the greatest challenges and threats to the democrat consolidation in Nigeria.

The incidence of corruption in the country reached a crescendo in 2004 when a German based non-governmental organisation called Transparency International in its 2004 Corruption Perception Index(CPI), report projected Nigeria as the 2nd most corrupt country in the world(132nd out of 133 countries surveyed) Poverty is another factor that constitutes grave challenges to democratic consolidation and

Buhari

Jonathan

Yar’Adua

Obasanjo

good governance in the country.

Nigeria is blessed with abundant human and natural resources and yet its people are poor. The nation is rank among the world’s poorest country. According to United Nations Development Programme (2009), in Nigeria hunger exhibits its ugly face in most homes where the average citizen contends with a life of abject poverty. Thus, about 70percent of Nigeria population are poor, the average Nigerian is alienated from himself as he lacks the wherewithal to afford the basic necessities of life such as education, medical facilities.

The consequence of this is that the poor masses are easily brainwashed and their right of choice terribly manipulated making an objective choice seldom to consideration. Besides, various forms

of inducements and gratification which provide temporary relief from the scourge of poverty are given central attention in making democratic choices.

One other challenge confronting the present democratic dispensation is insecurity. Since the return of democracy, the country has experienced ethno-religious crises, sectarian mayhem.

Likewise, Post-election violence in the northern part of the country as well as the constant sectarian crisis exemplified by the activities of the Boko Haram and presently the killings by herdsmen in some states in the country.

In assessing how Nigeria has fared in the last 19 years of democratic practice, the vast majority of the people are unhappy with the state of the nation.

Everyone is complaining or unhappy about one thing or the other.

If it is not about the economy which works for a few and the increasing cost of living, non-payment of salaries of workers and pensioners especially in the public sector, about the state of our education, health and justice systems, about infrastructure, especially power and roads, unemployment, marginalisation of some groups in terms of appointments and recruitment, declining moral valves, it is about the weakness, inefficient and ineffectiveness of our institutions making it difficult for us to resolve any problem.

Olapade Agoro, National Chairman of the National Action Council (NAC) on the occasion of Nigeria’s 19th anniversary of Democracy Day,

A1

lamented that “it was unfortunate that the 19 years of democratic process have brought about poverty, suffering and sorrow to Nigerians as a result of corruption and mismanagement of funds”.

The NAC’s National Chairman lamented further that “ the 19 years of democratic experience in the country have been woefully messed up by corrupt politicians “, adding that what Nigerians need now are explanations on how some funds were mismanaged or embezzled.

Specifically, Agoro asked Buhari, Obasanjo, and Jonathan to come out and explain their roles on the $16 billion allegedly expended on the power project without any meaningful result, instead of embarking on a blame-game.

He said apart from this, Nigerians also deserve to know more about the $62 billion left behind in the country’s foreign exchange reserve in 2007 when former President Obasanjo was leaving office got depleted to about $360 million within one year, and the missing $20 billion crude oil money alleged by the former governor of the Central Bank of Nigeria (CBN), Sanusi Lamido Sanusi.

The NAC’s National Chairman, however, revealed that in order to create a platform for Buhari, Obasanjo and Jonathan to be heard, he (Agoro) would on August 16, 2018 organised a fora in Ibadan that would be tagged “ Face the Nation”, in which the trio and members of their economic teams will be invited to explain their roles in the alleged mismanagement of funds.

His words: “The issue of the $16 billion power project is not a blame-game issue. Buhari was partially right, claiming that Obasanjo spent $16 billion on the power project. The truth is that Obasanjo committed $12 billion, while the Yar’Adua/Jonathan’s administration committed $8 billion on the project.

“This is therefore, calling on Obasanjo to forget about asking anybody to go and read his book.

Nigerians are not interested in that.

Nigerians deserve to know what is happening. Nigerians are waiting for explanations on what happened to the money.”

On his part, Agunbiade Babatunde, aspirant for Lagos State House of Assembly, Alimosho Constituency 01 under People’s Democratic Party(PDP), said the 19 years of democracy in the counContinues on page A2

A2

BUSINESS DAY

C002D5556

Tuesday 29 May 2018

3 YEARS OF

Buharinomic

19 years of democracy: Nigerians react a much more unequal and unjust society. So democracy in Nigeria has not come with social justice and has exacerbated it instead,” he said.

INNOCENT ODOH, Abuja

T

oday, May 29, Nigerians well perhaps roll out the drums to celebrate another Democracy Day. This time, a significant milestone may have been attained as the nation marks 19 years of uninterrupted democracy, the longest in the nation’s history. Nigerians have bared their minds on the good, the bad, the ugly of the journey so far.

Buhari, APC violated tenets of democracy – PDP The People’s Democratic Party (PDP), has accused President Muhammadu Buhari and the ruling All Progressives Congress (APC) of violating the tenets of democracy since assuming power in 2015, stressing that the Federal Government has trampled on citizens’ rights and should not be associated with democracy under any guise, whatsoever.

The PDP in a statement by its National Publicity Secretary, Kola Ologbondiyan, asked President Muhammadu Buhari not to address Nigerians on the occasion of the 2018 Democracy Day on Tuesday even as it maintains that in the last three years, such addresses had contained deceits, falsifications and unfulfilled promises.

The party noted that Nigerians have become frustrated and despondent by the “magnitude of lies and deception told by the Buhari Presidency and the APC and would prefer to spend the next twelve calendar months contending with such past deceptions than fresh falsifications.

“Indeed, this administration should not come close to the emblem of democracy, as such would be an unpardonable spat on the faces of millions of suppressed Nigerians and the graves of victims of extra-judicial executions under this administration, as catalogued by international bodies including, Transparency International (TI), Amnesty International (AI) and even the United States Department of State.

“Instead of celebrating Democracy, Nigerians are today groaning in regret for electing an administration that has completely turned against them, engaging in clampdown with utmost impunity, setting aside our constitutional provisions and desecrating all democratic established institutions.

“We ask: How can Nigerians celebrate Democracy Day when the rights of citizens are daily tram-

pled and they no longer enjoy their freedom to politically associate and aspire, as was the order under the PDP rule?

“Where is democracy when government tends towards military fiat: where citizens are wantonly arrested, locked up and dehumanised just for expressing political opinions considered to be at variance with views held those in power?

“Where is democracy when opposition members have become endangered species and considered enemies of the state without any just cause; Where dissenting voices are daily harassed, arrested, handcuffed and arraigned on trumped-up charges, just to emasculate opposition?” The PDP queried.

“The PDP also expressed concerns over the alleged siege of the National Assembly, asking “where is democracy when our National Assembly, the very bastion of our democracy, is under siege; where federal lawmakers are daily blackmailed, hounded, harassed, intimidated, detained and dehumanised; where strange elements invade the hallowed chambers of the Senate, threatened our senators and forcefully cart away the mace, yet nobody has been prosecuted?

“Where is democracy when court judges are arrested in the middle of the night by agents of state; top government officials engage in actions and speeches that promote division, hatred and bloodletting; when journalists and media houses are being harassed and intimidated and our nation, in the last three years, ranking

among the most hostile to free press?

“Nigerians now look back with nostalgia to the 16 years of the PDP, years when government operated with conscience, where democracy was nurtured and the rights, freedom, happiness and prosperity of all citizens were guaranteed and upheld.

“Above all, the PDP salutes the courage and resilience of Nigerians in the face of despotism, drive towards anarchy and totalitarianism.

“We are collectively strengthened by the fact that this year’s Democracy Day signals the reinvigorating of that democratic march by the citizens to end APC’s misrule and abuse of our rights.

“Nigerians must therefore, use this year’s occasion to reinforce their commitment to rescue our nation by restoring democratic rule on the platform of the repositioned PDP, come 2019,” the PDP admonished.

Democracy is declining in Nigeria - Sam Amadi Former Chairman of the Nigeria Electricity Regulatory Commission (NERC) Sam Amadi told BusinessDay that essentially since 2015 when former President Goodluck Jonathan graciously accepted defeat and handed over power, Democracy has been strengthened in Nigeria in a formal sense because for the first time an incumbent government was removed from power through the electoral process. He further said that in terms of the periodic elections, democracy could be said to be consolidating.

He however said that in the real

Nigeria made progress but Buhari brought recession – Katch Ononuju Also reacting, an economist and public affairs analyst Katch Ononuju said that Nigeria has made great strides in 20 years of democracy saying “We have achieved a lot of things.

We have been able to democratize our economy through privatisation.

It is the successes that you are now seeing competition within the economy which catapulted our economy to become the largest in Africa.”

He however blamed President Muhammadu Buhari for the recent recession, which he attributed to President Buhari’s damaging intrusion in the money market. “Historically monetary policy is the exclusive of the Central Bank that of the federal government is fiscal policy but President moved in to undermine monetary policy and because they country is an import dependent economy and the grease of the import is the dollar, the president damaged the economy and we ran into recession.

“Since we became a Republic in 1963 Nigeria has had two recessions and all of them have occurred under President Buhari because of his inability to manage the economy through inclusive policies,” he said.

He advocated restructuring of the federation to do away with the current constitution which he said is a design of the military stressing that restructuring is the solution to rebuild Nigeria which will make her prosper.

sense of democracy, such as strong opposition, press freedom, freedom of movement and accountability democracy is not growing.

“In Nigeria Democracy is declining in the sense that insecurity has also created some anxiety that threatens democracy. If you look at intolerance it is growing, we have cases of some bloggers being arrested. We have seen court under siege, court orders not obeyed; we have seen greater militarisation, the use, military and police to suffocate citizens’ voice.

“The values that define democratic governance have not grown and are not growing. Public officers are cynical about the degree of accountability and transparency required,” he lamented.

On the growth of the economy in 20 years, he noted that Democracy has helped Nigeria in terms of economic growth, adding that the period when former President Olusegun Obasanjo presided was when Nigeria had 6 to 7 percent growth for close to a decade.

“That was the golden age of Nigeria in terms of GDP and even per capita because it broadened the middle class and led to the growth of the private sector because of the relative openness. Democracy has allowed for more creativity and innovation in the use of technology,” he said.

He however, lamented that liberal democracy has not created an inclusive society, or equal society.

“The Guinea coefficient inequality in Nigeria is very high, so Nigeria within the period had larger economy but

Nigeria still in transition- UDP chair National chairman of the United Democratic Party, UDP, Godson Okoye in his reaction said Nigeria is still in transition from civil rule to democracy arguing that the nation has not arrived at its democratic destination yet. “Democracy does not operate outside its environment.

Fundamentally there is deference between democracy and civilian government; we are not in a democracy yet.

“What we have is civilian government and civilian government can be dictatorial. So we are still in transition to democracy. Democratic tenets can only be measured by the attitude of the people. If you have the right attitude democracy thrives. The major problem of Nigeria is our bad attitude to power, to position which is tending to the negative,” he said.

der of the day. When we are using decentralisation of power, there was serious competition among regions in terms of development.

Check Awolowo’s records; Zik, Ahmadu Bello. This great men’s achievement can’t be measured in their regions within the short period of regional power and many of their results are still on ground

today.”

According to him, “Last year, I was clamoring for local government autonomy. That is the only way we can develop. I will keep saying this, restructuring is key to Nigeria’s breakthrough. Federal system can never work for this country. 19 years is enough experiment.”

Disappointments greet Democracy Day Continued from page A1

try is nothing than veritable opportunity for some individuals, saying “what we practise here in this country is not democracy, it is called autocracy.”

“This country needs restructuring. If we truly want development or want to experience democ-

racy, we need to decentralised the power, we need to give power to the regions; by this we can balance the system; I can say categorically if the 19years of democracy was actually in form of regional power such as western, northern, eastern maybe our dear country will be competing with Dubai in terms development.

“I can remember last four years.

Victimisation of citizens was not this bad; today what are we experiencing? Where is freedom of speech bill that was passed? Where is freedom of worship? Where is freedom of association? Where is freedom of movement? Where is freedom..?

“Today religious war, tribalism, kidnapping etc.... insecurity is or-

Tuesday 29 May 2018

BUSINESS DAY

A3

A4

BUSINESS DAY

C002D5556

Tuesday 29 May 2018

3 YEARS OF

Buharinomic

Has Buhari failed Nigerians on security?

OWEDE AGBAJILEKE, Abuja

I

n his 1651 book titled, ‘Leviathan’, one of the founders of modern political philosophy, Thomas Hobbes, gave a vivid account of what things would be in a society without a government.

The English philosopher posited that the essence of social contract was for people to surrender their self-governing power to the state in return for protection from criminals and ensuring a peaceful society from the government. He postulated that without government, man’s life would be “solitary, poor, nasty, brutish and short.”

According to the Section 14 (2) (b)(c) of the 1999 Constitution of the Federal Republic of Nigeria (as amended), “The security and welfare of the people shall be the primary purpose of government”.

As Nigeria celebrates 19 years of uninterrupted democratic experience and with three years into the administration of President Muhammadu Buhari, the security situation in the country has come under serious scrutiny.

Pundits have expressed grave concern over the frequency of violent killings in various parts of the country. They wondered why President Buhari - a retired major general in the Nigerian Army and former Head of State - who had promised, among other things, to end insecurity across the country during the 2015 electioneering campaign, appeared to have failed.

“The level of impunity and frequency of violent killings in Nigeria in recent times is a source of grave concern to citizens and all people who wish our country well. Even with the suppression of information on these killings, it is quite clear that the toll of killings has risen dramatically in recent times.

Nigerians now wake up daily to fresh news of mass atrocities,” says Chidi Odinkalu, human rights lawyer and former chairman, National Human Rights Commission.

According to the Joint Nigeria Crisis Action Committee (JN-CAC), in the first 70 days of 2018, over 1,400 persons were killed violently across the country, an average of nearly 40 per state and the Federal Capital Territory (FCT).

The committee also revealed that at least 34 out of the 36 states of the Federation have experienced at least one episode of violent killings within the first quarter of 2018.

“It seems to me that Nigeria is becoming a lawless country; a country with no rules and regulation, a country where laws are not adhered to; a country where there is no consequence for bad behaviour.

“We have a government, security agents, or we don’t? These are the fundamental issues at stake today because every day since we have gotten here, someone has gotten killed, raped, throat slit, killed at gun point and every day we have resolutions and nothing is being done,” outspoken senator, Ben

Buhari

Murray-Bruce (PDP, Bayelsa State) declares.

A school-of-thought believes the unabated killings threaten the conduct of the 2019 general election.

The General Overseer, Redeemed Christian Church of God, Enoch Adeboye, shares this view.

Speaking during the church’s May Holy Ghost Service, the cleric said his position was borne out of reasoning and not a prophecy.

He said: “A bishop asked me some time ago, ‘Daddy has God told you who will win the next election?’ I said, ‘Sir, I am not even sure yet if there will be elections because unless these killings stop, there may be no election next year’.

The President, on his part, has refused to heed the demand of senators for the immediate dismissal and replacement of the nation’s service chiefs and heads of security agencies over their inability to halt lingering insecurity in the land, even as the House of Representatives recently passed a vote of no confidence on them.

Also, both chambers of the National Assembly have summoned the President over the spate of killings across the country.

With the Federal Government’s approval of $1 billion from the Excess Crude Account (ECA) to prosecute the war against insurgency in some parts of the country, Buhari’s release of $496million to the United States government for the purchase of 12 Tucano jets without National Assembly approval, some analysts have described the insecurity challenge as a cash cow from which some people are making money.

“We can now see why former Chief of Army Staff, Lieutenant General Yakubu Danjuma (rtd) accused the armed forces of colluding with armed bandits to kill Nigerians.

“The fight against insecurity has

become a cash cow for top military chiefs. They will stop at nothing to fuel the crises at least to justify release of more funds,” a security expert who spoke on condition of anonymity told BusinessDay. Service chiefs and heads of para-military agencies are also expected to submit special funding requests to the National Assembly next week.

Senate’s resolution followed a closed door meeting with security heads for over four hours.

Senate President, Bukola Saraki, who announced the resolutions at the end of the meeting, which equally deliberated on the lack of coordination among security agencies as a key factor in the failure to quell the incessant killings and kidnappings.

Saraki also said that the Senate resolved to accord priority to all bills that will strengthen the security architecture of Nigeria.

He explained that the special funding requests would be in the form of a Supplementary Budget.

He, however, disclosed that the Supplementary Budget will be different from the $1 billion approved by the President to the military to tackle insecurity and release of $496 million to the United States Government for the purchase of 12 Tucano aircraft.

“The Senate in a closed session received briefs from the Chief of Defence Staff, the Director General of the Department of State Services, representatives of the Comptroller General of Immigration, Inspector General of Police and the Comptroller General of Customs on the proliferation of dangerous arms, spate of killings and kidnappings by hoodlums across the country.

“Thereafter, they answered questions from Senators bothering on security, insurgency, terrorism, kidnapping and other national

security matters.

“On the whole, we decided that on our part, certain outstanding bills or protocols that needed to be fast-tracked , be addressed immediately to see that they are passed as soon as possible in order to strengthen the nation’s security architecture,” Saraki said.

“Secondly, the Senate observed the issue of underfunding of security agencies and agreed that there is need for special funding for them to be able to carry out their mandates.

Therefore, we gave the security chiefs two weeks to present their own budget on this area of special funding to the National Assembly which we think will go a long way in improving the security situation in the country.

“Our great concern also was the issue of coordination among the security agencies and on this note; we resolved to find ways to strengthen that aspect of security through constitutional means.

“By and large, we all are committed to ensure that these unfortunate trends of killings are brought to end. We all agreed to continue to work very closely in order to address this issue of insecurity and we are confident that things will improve in this area.

“The Senate has its role to play and the security agencies are also committed to play their own role.

We hope that over the next couple of weeks, we will begin to take action on some of these things for which we have made commitments”.

Those at the security briefing included the Chief of Defence Staff, Abayomi Olonisakin, who stood in on behalf of service chiefs as well as Director General, State Security Services, Lawal Daura.

Others are representatives of Inspector General of Police; National Security Adviser; Comptroller General, Nigerian Customs Service;

Comptroller General, Nigerian Immigration Service.

Speaking on the matter, MurrayBruce who also chairs the Senate Committee on Privatisation, lamented that Nigeria was rapidly degenerating into a lawless country, noting that there were no more rules and regulations in the country.

He said that it was time for the President to act or resign if he was incapable of assuming full control of the affairs of the nation, despite being entrusted with public mandate to enforce the law for the good governance of the country.

The lawmaker posited that herdsmen had turned into a terrorist group and should be treated as such by the government, saying that the Police could no longer contain their violent activities in the country as they go about with more sophisticated weapons.

His words: “It is time the Federal Government of Nigeria act because they have been voted into office; they have an executive function to protect the lives and properties in Nigeria.

“It is disgusting to find pregnant women have their stomach slit, unborn babies removed, and if these herdsmen are allowed to rampage, then frankly speaking, they are a terrorist organisation and a terrorist organisation must be dealt with decisively by the military.

“It is no longer a situation where we call on policemen who do not have the arms or training to face folks with AK 47, well trained militia, those who now occupy lands that belong to Nigeria. If we can fight Boko Haram, we can fight the herdsmen.

“If the security agencies cannot do their job, then the leadership must be fired. You are either in control or you are not. The ministers in charge should resign, Nigerians involved should be fired or resign, otherwise they should be impeached.”

Bruce pointed out that the Senate was now acting as it were the executive arm because of the inefficiency of those in the Executive, urging that the President of the Senate should be made the President of the Federal Republic of Nigeria.

“It is as if the Senate is now the executive arm of government.

That is a fact of life. If that is the case, what are we doing about it?

If the people responsible for the protection of lives and proprieties in Nigeria cannot do their job, what happens in civilised countries?

They are fired.

“If the Federal Government wants the Red Chamber to become the executive in Nigeria, then let us appoint the Senate President to be the President of Nigeria. Let us do the job of the executive because it doesn’t make any sense.

“If Saraki is the only one interested, let him become the President of Nigeria and that solves the problem. We cannot continue like this. We either fix this problem or everybody should shut up and resign from public office,” he added.

Tuesday 29 May 2018

BUSINESS DAY

A5

A6

BUSINESS DAY

Tuesday 29 May 2018

Tuesday 29 May 2018

BUSINESS DAY

A7

A8

BUSINESS DAY

C002D5556

Tuesday 29 May 2018

3 YEARS OF

Buharinomic

Violent party congresses, hate speeches danger signals to 2019 polls - Jega TONY AILEMEN, Abuja

F

ormer Chairman of the Independent National Commission (INEC), Attahiru Jega, on Monday identified the altercations and violence that trailed recent outcome of All Progressives Congress (APC) congresses as danger signals that the 2019 general election may not be hitch-free.

Jega posited that the crisis trailing the APC congresses is a clear signal that the ruling party APC may not be able to guarantee the conduct of free and fair general election next year.

The former INEC chairman, reputed to have conducted the election that led to the change of government that secured victory for an opposition party in Nigeria for the first time in history, stated this while delivering the 2018 Democracy Day lecture at the International Congress Centre, Abuja.

“If political parties cannot organise their internal elections peacefully, how can they engage

Jega

the other parties with civilities in the general election? It is very, very important that this is addressed because if there is crisis in the elec-

tions, some of these issues outside the scope of electoral commission but in the end it is the electoral commission that gets blamed.”

Jega also listed what he described as “increasing incidents of hate speech” as other factors that must be checked ahead of the 2019

has not given Nigerians the much desired dividend, the country has had some progress over the years, while charging Nigerians to vote for credible individuals in the 2019 general election.

“Jonathan failed, and one of the major reason was because he could not control his ministers, but if you look critically at the state of affair in the country now and when we were under the military regimes, personally I think we have made some progress in some areas; although there are still some lapses but you cannot compare that to the military era,” Oki said.

“But obvious Nigerians have not had the much-talked about dividend of democracy. As expected because of bad leadership by successive administrations, as we approach the 2019 elections,

I would advise Nigerians should think twice before they vote for any candidate.

“Don’t be deceived by the little change they give you, that mindset has to change if we are to get it right in electing people that govern us”.

When the present APC Muhammadu Buhari administration assumed office in 2015 after winning a historic election as an opposition party the administration offered much hope with its attendant promise of change, while promising to give corruption a priority, create jobs and provide welfare programmes for the elderly, there were high expectations for a better days ahead for Nigerians.

However, three years since Buhari assumed office, political observers in the country are of the

general election.

“The second thing we need to address is the recent spate of hate speeches by political actors, religious leaders, it is this unbridled utterances by opinion leaders, religious leaders, political leaders that facilitated electoral violence in general elections. So this has been tamed. Again, we must serious measures that the rule of law is complied with, so effective prosecution is very, very important to militate against this challenge. Otherwise worth the intensity this is going right now it will undermine the integrity of the 2019 elections.”

Jega also cautioned present administration against focusing too much on embezzlement and theft under the current anti-graft war, adding that the campaign should also tackle “bribe giving and taking in states and Federal Government institutions.”

He noted that the seven-day provision in the constitution given for the conduct of run-off was necessary, adding that “it is an impossible task as no such election can be done within such short a time.”

How far... how well?

INIOBONG IWOK

T

he dawn of the Fourth Republic and return of Nigeria to democratic dispensation in 1999 was received with optimism, hope, and high dreams by the citizenry.

The country before then had been under four military dictatorship for sixteen years since the Shehu Shagari civilian administration was aborted shortly after being re-elected for second term in office in 1983 by a bloodless military coup.

Due to the long years of military rule and the resultant bad governance, general chaos and Bastardisation of all fabrics of the Nigerian society, there were high expectations among the populace when the civilian administration by retired general Olusegun Obasanjo assumed office.

However, the greatest legacy of the administration was the introduction of the General System for Mobile Communication (GSM).

However, political observers in the country still believe that the Obasanjo administration was a failure and did not fulfil the muchdesired dividend of democracy.

Afenifere Chieftain, Ayo Adebanjo in his autobiography titled: ‘Telling it as it is’ published recently, disclosed that the Obasanjo administration stagnated

the country, stressing that the cost of living increased during his administration.

“It amazes me how people give Obasanjo undue prominence in spite of his character. Obasanjo’s tenure as president was a calamity, if it was in a decent society people like him will not feature in public life again.

“The man who carried on as if he was all in all failed woefully on all counts as president of Nigeria; his eight years tenure between 1999 -2007 was a tragedy; his score card was nothing to write home about.

“What did he do in eight years?

Before he came we were buying fuel for $20 per litre and crude oil was $23 per barrel; but in 2007 under his administration we were buying fuel at 75 per litre and crude oil was between $75 per litre,” he said.

The administration of late Musa Yar’Adua/Jonathan tried in reposition the country and made giant strides in the education and transportation sectors of the economy.

Factional Chairman of the All Progressives Congress (APC) in Lagos, Fouad Oki, said Goodluck Jonathan administration failed because he could not control his ministers, adding that just like previous administrations, Jonathan was unaware of the yearnings of Nigerians while in power.

Oki said though democracy

opinion that the initial hopes and promises on the faces of Nigerians seem to have turned to despair and frustration.

Leader of pan Yoruba sociocultural group Afenifere, Reuben Fasoranti, disclosed that political leaders had taken Nigerians for a ride since 1999, adding that nothing has been achieved since the return of democracy.

“We have not done well since 1999; we lack focus; corruption is on the rise; our leaders should brace up and show example. We should pray and have a change of heart in the country; we need to encourage hard work among the citizenry and government should be responsive to the electorate in the country; right now our leaders are there for their personal pocket and agenda,” he said.

A member of the Lagos State House of Assembly and a chieftain of the People’s Democratic Party, (PDP) Honourable, Dipo Oloruniru, urged Nigerians to be patients with the democratic process, adding that Nigerian democracy was still in transition.

“When you say, democracy has not worked in the country so far, I think we need to be careful because we should consider where we are coming from. I think there have been gains but it may be slow.

What I think we need to do is to strengthen the electoral process,” he said.

Tuesday 29 May 2018

C002D5556

BUSINESS DAY

3 YEARS OF

A9

Buharinomic

Buhari’s government is a monumental failure - ADC chair

National chairman of the Africa Democratic Congress (ADC) Ralph Okey Nwosu, describes the government of President Muhammadu Buhari as a monumental failure and tasks Nigerians to unite under the ADC to remove Buhari and his All Progressives Congress (APC) in 2019. In this interview with INNOCENT ODOH, Nwosu talks about the purpose of the fusion of the Obasanjo-inspired Coalition of Nigeria Movement (CNM) into the ADC and the chances of the party in 2019 elections. Excerpts: Sir, since the fusion of the much touted Coalition of Nigeria Movement (CNM) into your party, the Africa Democratic Congress (ADC), the exodus of other political heavy weights to your party has not started happening as envisaged. Why is this happening? igeria journalists will never change. Instead of seeing the silver lining that the decision of the CNM, Arise Nigeria and 23 other movements provides, I am surprised that you are talking about political heavy weights. You should approach things with an open mind and leave every pre-conceptions. I do not know what you mean by political heavy weights. ADC has always been a grassroots based party. We do not intend to change this identity. So instead of looking for Abuja politicians go to your communities and across the various wards and local councils in Nigeria and checkout the new dynamics and political realities. Before these bodies decided to fuse into the ADC we had developed a strategic plan for dealing with the 2019 general elections, so far we are very satisfied with the progress we have made. We have succeeded in accomplishing all the milestones we set till this date. The fact that ADC will produce the next president, many of the state governors is well on track, and the systems and structures to make us a model political party, and the continental brand are taking shape.

I expected you to congratulate me, the national working committee of the ADC on one hand and the CNM and the various strategic partner groups for the deft move and the hope we have brought to the Nigeria people. Are you happy with the state of things, the economy, unemployment, poverty, killings, insecurity. The nation and its democracy is in a crossroad and for the first time our people are beginning to see and feel hopeful again. We are doing all the essential works we need to do to sustain the feelings and give our people their good desires.

you do not want me to discuss it in a market place or town square, talk less of a global media like your paper. Just watch and see. Our leaders are tirelessly reviewing all the options.

I was in Borno and Yobe states recently and over 15 different associations there have aligned with our party. All across Nigeria young people, women, physically challenged persons, name them, numerous associations have already keyed into ADC. So when you say our backers, you are off tangent, ADc is grassroots based. Our biggest support base are the masses, students, market people, IDPs that have been neglected by this government. The farmers who want their products protected from cows.

Even the herdsmen who want leaders to guide them to prosper with their trade. Yes even herdsmen, they want to make a living, and not to be used as cannon fodders and militia. The APC only wants to use them to push some ominous agenda.

N

We gathered that some interests group did not like the details of the arrangement that led to the adoption of ADC as the political platform to mobilise the opposition forces angling to unseat President Buhari and his All Progressives Congress (APC), and that is why the ADC did not get the support of others. How true is this?

How many times in Nigeria’s history did 24 major organizations, and over 10 political parties join a political party like ADC, a party that is not in power.

My friend you have to wake up to what is happening, ADC is the new reality.

ADC only has one house of assembly member in Bayelsa state, and organizations led by eminent Nigerians decided to join forces with us. Think

Nwosu

deeply about this. Any way I do not blame you, it is a new phenomenon and you may not understand yet. It is understandable. But do not rush to fixating things.

We heard that there is a grand plot to change the leadership of the party led by you and install Obasanjo’s man, Olagunsoye Oyinlola, as chairman, which analysts believe will give the Obasanjo group a hold on the party. How do you react to this?

You see you. At one point you said no heavy weights have joined the party. Now you mention a former president and world class statesman Dr. Olusegun Obasanjo, a former Governor Prince Oyinlola. You may soon mention Donald Duke. Some of your people have asked me about President Babangida, and General Danjuma’s connection. Meanwhile you still do not seem to see the heavy weights. Some asked me about the involvement of the Area Father, CharlieBoy Oputa, and many others including traditional and religious leaders. We are building a different organization. To quench your taste for speculative journalism, all of the people mentioned and many more who want our country back from the precipice are involved in varied ways in this operation to save Nigeria and bring patriotism and development to the front burner.

If you do not know I am an organizational architect, builder and a missionary in this enterprise of Nation building. The Chairman of our party ADC is the Chief Servant. For me I want to work to accomplish the mission and position means nothing to me. I have made it clear that I have chosen to work from the floor, my concern is to make sure that this nation Nigeria gets rooted in the proper trajectory. So the Chairmanship is vacant, and Prince

Oyinlola is eminently qualified. He is a great guy, he has distinguished himself in everything he has ever done. He had a distinguished military carrier, so I do not have any problem with him leading the party that is if he agrees. At the moment he is busy handling some very strategic ends as Chairman National Strategy and Technical Committee.

Barely nine months to the general elections, how prepared are you to face the APC and President Muhammadu Buhari?

We have our strategies and our time line in place. So far we are doing very good. We are working on three major tasks; we are building a model party, we are working to restore hope in a hopeless state, and the last one is the elections. We shall deliver on all fronts, I can assure you.

Would the ADC go into alliance with other parties for the elections and who are your real backers?

All we have been doing for the last two years is finding bases for collaboration to privilege our polity. Alliances and or collaboration is a strategic thing. So

In ADC we do not want to elect people who will not be able to create prosperity and security in their constituencies, state and nation

What fundamental difference would the ADC make judging by the fact that Nigerians are skeptical about merger of parties because of the alleged failures of the merger called APC? APC is not a political party. They are power hawks deep in propaganda and intimidation. You don’t compare an organization that we have spent more than twelve years constructing, deconstructing and reconstructing to become the authentic Nigeria and Africa identity moving forward with a diarrhea and cholera entity like APC. For the records again, the African Democratic Congress vision/ ideological statement remains, ADC is an exemplary Nigeria grassroots political party that embraces rolemodeling leadership paradigm, and intent of promoting good citizenship, accountability, free enterprise, and an empowering culture.

So you can see, anyone that seeks to participate or lead must be ready or be groomed for role modeling the citizenship desired of the people, our constituencies. We desire a country that works, and a continent that will impact the world richly in this millennia, and an identity characterized by hard work, self-belief, and integrity.

Not rag tag propaganda.

What is your take on the current insecurity in the country and the economic performance of Nigeria under the President Muhammadu Buhari Administration?

The government in place is a monumental failure. I am sure you have their manifestoes and all that they promised before the 2015 elections. So I will let the people judge them. The Catholic Church who always prays for Nigeria in all masses and church events have now organized a procession to protest

the failure of government to protect the people. That should tell you how low this government has taken the country.

The people running the government are inept, pompous, dictatorial, and rascally, and their parochial and nepotistic nature and worldview rob the nation the great power inherent in our diversity.

Tell us your policy on the economy, education, infrastructure, health, trade and investment and unemployment.

We shall unveil the A to Z of the African Democratic Congress soon. The ABC of ADC is our charter, and Nigeria’s global positioning outline. We are designing a framework for leading and developing Nigeria moving forward, not just a propaganda document. The need to inspire our 200Million people to action has occupied my mind for many years and God bless Obasanjo and his team of eminent Nigerians, they found us out. Now together, we carry the burden, and things are looking good.

The biggest problem with Africa and Nigeria particularly is leadership.

Once we get the leadership right every other thing will fall in line. ADC has anchored our ideology on leadership and culture that are empowering. We will continue to groom our people around these and we will become the darling of the world and the global epicenter for great discoveries, skills, and talents, a great hub in less than 10years.

Your position on Restructuring; You seem to hold opposing view with your leader former President Obasanjo.

Not at all! I do not think so. This word restricting has become over used and too political. As a quintessential leader President Obasanjo believes in everything good for Nigeria. He shared with me his guiding principle on the Nigeria project, and said to me “my son, I have great passion and unshakable commitment to Nigeria and will work with anyone who shares my passion”. As a leader when things have become political and divisive, you must learn to meander carefully to be able to fudge unity and collaboration for the greater good. That is the role President Obasanjo and many other leaders are playing.

Nobody wants kleptomania state governors who go to Abuja to collect money from the federation account to squander. In ADC we do not want to elect people who will not be able to create prosperity and security in their constituencies, state and nation. Even if you create 60states in Nigeria, I am sure that the resource base of each of the states can sustain each of them, they will have robust economy if well led. That is why ADC strategic ideological compass is about role modelling leadership.

A10

BUSINESS DAY

C002D5556

Tuesday 29 May 2018

3 YEARS OF

Buharinomic

Corruption fight receives hard knocks, three years after …APC says Nigerians are not fair in their judgment JAMES KWEN, HARRISON EDEH, LAIDE AKINBOADE, OYIN AMINU, Abuja

As the President Buhari /All Progressive Congress (APC)-led Administration rolls out drums to celebrate its three years of stewardship and the 19th democracy anniversary, Nigerians have berated the government’s anti-corruption war.

Apart from security and economy, the present Buhari-led APC government was voted into power in 2015 based on the strong promise of stamping out the hydraheaded monster of corruption and vowed to recover Nigeria’s looted wealth and plough it back to the development of Nigeria.

In fact, Buhari had during the campaign at the last general elections and shortly after assumption of office stressed poignantly that: “if Nigeria does not kill corruption, corruption will kill Nigeria”.

Unfortunately, three years today, corruption continues to stench within government circles while opposition elements face the hot music of the purported war against corruption.

Some Nigerians opined that the so called war against corruption is rather a ploy to silence opposition and perceived enemies of the government while corruption surreptitiously festers in ministries, departments and agencies the government.

Tanko Yakasai, chairman Northern Elders Council while speaking on Buhari/ APC administration’s war against corruption said nothing has been achieved in that area.

He questioned how many people have been convicted of corruption in the present government, citing among other critical cases, the former Secretary to the Government of the Federation, Babachi Lawal who was indicted for committing an infraction by the report of a Senate committee, which was forwarded to the President.

“When the matter was referred to the President, he asked the Vice President (Prof. Yemi Osinbajo) to investigate. After the investigation, the presidential panel confirmed the allegations levelled against the former SGF. “However, up till today, the former SGF has not been arraigned in any court of law. This is an open case of corruption where a contract was improperly awarded to a company. So, a government that claims to be fighting corruption cannot be found wanting in a case that concerned such individual.

“That is where this administration is incompetent. Lawal should have been arraigned before a court of law. I have never met the former SGF in my life, but I feel any serious-minded government should have arraigned him and commenced a full prosecution by

now”, the elder statesman noted.

Ola Olanipekun, Senior Advocate of Nigeria said although the Buhari administration showed much promise leading to being elected, it has not lived up to expectations when looking particularly at how it has been able to win the war against corruption.

“It is not impressive at all as there have been delays due to a lot of bottle necks.

“What has been happening is what can be said to be movement, movement, and movement but no progress. Going by the pedigree of the president who is known to be a strict General, the fight against corruption which is the major reason he came into office has not been won at all. Many high profile cases have been swept under the carpet, the manner in which these cases are handled are bad,” Olanipekun said.

He equally sighted the cases of the former Secretary to the Government of the Federation, Babachi Lawal, former chairman of the Presidential Task Force on Pension Reforms, Abdulrasheed Maina who were accused of corruption and added that so many thugs and also mentioned Musiliu Obanikoro who has decamped to APC and to avoid being prosecuted of their corruption charges.

“Fayemi was alleged by his state to have collected loan on bond for projects and did not execute but was not harassed by the EFCC, while Shekarau fraud cases and the likes are being executed and arraigned by EFCC because they belong to the PDP,” Olanipekun said.

According to Frank Utoo, an Abuja based Legal Practitioner and a Former House of Representatives Aspirant on the platform of APC, the party came to power through Nigerians belief that it would fight corruption as promised during the campaign but has performed abysmally in that project.

Utoo asserted that rather, APC has deployed the fight against corruption as a potent weapon of fighting political opponent while members of the government holding appointments continue to perpetrate acts of corruption with impunity.

“The fight against corruption has been masqueraded as a fight against opponents. Since APC came on ground, it has been fighting only those who were in power before its coming. But there has been massive corruption under the APC government. You look at the case of Babachir Lawal, former SGF who awarded the contract of cutting grass to his company for more than half a billion naira and he was defended by the President.

“We know about the contract saga at the NNPC where about $50 billion contracted and nothing was

Ibrahim Magu

done. We know about the violation of due process in the purchase of the Tocano Jets which were not appropriated. There are other acts of corruption under his nose and nothing is being done but attention has been focused on those who held sway”, the lawyer noted.

Also, Gideon, an Abuja lawyer with Okai Ogaji and Associates also berated Buhari’s ant-corruption fight.

“I think it has not worked, both at the higher level and at the lower level because the fight against corruption should be done at all levels. Especially with government officials who steal from the government blindly.

“President Muhammadu Buhari also have to fight administrative corruption which is the worse, for example, you submit a document for processing in a government agency, you have to bribe to get your document process. This is corruption at the lower level and this is also called administrative corruption. This is the one that is most destructive.

“At the top, we have not seen what he is doin, he is rather busy fighting his political enemies .

President Buhari hasn’t done much to fight corruption, that is the truth.

Similarly, Aondover Utsaha, an Architectural Practitioner and SDP Governorship aspirant for Benue State, noted that APC has failed wholly in the fight against corruption as in the other pedestal of security and economy which earned it Nigerians votes in 2015.

“APC has done nothing in the fight against corruption. They have been beating about the bush. The SGF was removed from office for corruption, but he is heading Buhari’s campaign. He was indicted but have not been tried.

“Yet they have been indicting and persecuting members of other political parties while those in APC are freely indulging in corruption.

So where is the fight against corruption?, Utsaha queried.

On his part, Monday Osasah,

Programme Cordinator for African Centre for Leadership, Strategy and Development stated that the government doesn’t have the confidence of majority of Nigerians in its anti-corruption war.

According to him, “At the initial stage in the fight against corruption, it looked like a good one for the nation, but later events showed it was a mere lip service by the government of the day.

“The case of Babachir Lawal stares all of us in the face. The Panel of Inquiry from the Presidency indicted him, and he was found guilty of corruption. What the citizens expected from the government is not just to remove him from Office but for him to face prosecution.”

“Also the government has been found to be very nepotic in its dealings, which is another form of corruption.

He said, “There is also the case of Open Government Partnership, OGP, which the President signed up to at the anti-corruption summit, when the former British Prime Minister described Nigeria as fantastically corrupt.”

“President Buhari signed up to that at the anti-corruption summit in 2016, but the sub-national government is yet to live up to expectations in that regard.

“Also, the Ministries Departments and Agencies of the Government do not appear receptive in working with Civil Liberty Organisations in various areas, key of which is in the budgetary preparations.

He further remarked that, “In preparing the national budget which ought to be people oriented. It comes with all manner of secrecy, and there is a disconnect between the Nigerian citizens and the budget, that is why we always have little impact of the budget on the lives of the people.”

Ike Ubaka, the President of All Farmers Association of Nigeria chided the anti-corruption war of the Buhari led administration.

Ike said, “Where is the Position of the case the former Secretary to

the Federal Government Babachir Lawal, the NIA and the intimidation of the judiciary. Is it how to fight corruption? People that were indicted and they are not facing prosecution and you go about saying you are fighting corruption” For the former speaker, Kogi State House of Assembly, Momoh Jimoh, the Buhari administration is fighting corruption lopsidedly as corruption is growing everyday with a significant amount of corrupt people within his administration.

“I do not believe they are fighting corruption, if really they are fighting corruption, it ought to affect all and sundry. Both APC and PDP members should be affected,” said Jimoh.

He noted that at the time that the PDP administration was fighting corruption, there was no sacred cow and questioned whether those governors and decampees from PDP to APC are not corrupt. Jimoh said what he sees is witch haunting and not the fight against corruption.

However, a strong supporter of president Buhari, and chairman of one of the boards of the agencies, who sought anonymity said corruption is not in the APC administration per se but those who moved from the other parties are infesting the government.

“The APC members have not been in power, only those that have been in power before now have stolen from the government coffers and as such needs to be dealt with by the EFCC. On the mention of the former PDP members who decamped, such as Fayemi who was alleged to be corrupt with an allegation of fraud leveled on him at his state level, he said the president has already stated it clearly that whoever has a concrete and significant evidence against them should bring it up and they would be brought to book.

He further said they no significant evidence has been brought forward against those being accused so far to warrant their being arraigned and that people have failed to recognize the arraignment of Cornel Jabar Isah, a bossom friend of Buhari as part of the fight against corruption.

On the other hand, Felix Dav, Secretary of APC Youth Caucus contended that corruption is so endemic in Nigeria to be easily eradicated but that the government was doing its best, though there are vestiges and urged the government to swiftly prosecute those lawfully indicated across party lines.

“Fighting corruption in Nigeria is a very big task. Buhari and APC has tried but enough still needs to be done. The former office holders in PDP in our party may be the reason Nigerians think APC is not doing enough in fighting corruption”, Dav reasoned.

Tuesday 29 May 2018

C002D5556

BUSINESS DAY

A11

3 YEARS OF

Buharinomic

Ajimobi gives scorecard, says administration has delivered AKINREMI FEYISIPO, Ibadan

I

n the last seven as the chief executive officer,Governor Abiola Ajimobi says his administration has delivered dividends of democracy to the people of Oyo state He gave his administration a pass mark, particularly in infrastructure development, security, education, agriculture and health care adding that he had also built more roads than all the previous administrations combined since the inception of the fourth republic.

He listed some the completed roads to include the dualisation of strategic township roads in Ibadan such as Toll Gate interchangeChallenge; New Garage-Toll Gate Interchange and Onireke-JerichoAleshinloye-Dugbe-Agbarigo Road, as well dualisation of major township roads in Oyo, Ogbomoso and Iseyin.

Ongoing roads include EleyeleOloguneru-Eruwa road, dualisation of Saki township roads, Idi-Ape-Basorun-Akobo-Odogbo Barracks Junction Road; Gate-Old Ife Road-Alakia, as well as the expansion of Oke Adu-Iwo Road, the governor disclosed.

He did not leave out the construction of the Mokola flyover,

Ajimobi

the first to be done by any civilian administration in the state, as well as the revived Ibadan Circular Road project, which had remained a dream in the last 15 years, adding that the first phase of the project has been awarded to ENL Consortium Limited at the cost of N70bn, under a build, operate and transfer

arrangement.

The governor also said the infrastructure upgrade included the urban flood management initiative targeted at checking the recurrence of the 2011 flooding in Ibadan, which consumed many lives and property.

The governor, in a statement by

his Special Adviser, Communication and Strategy, Bolaji Tunji, on Monday, said the government had also tackled the perennial water shortage, which residents of Ibadan had been experiencing, by carrying out wholesale rehabilitation of Asejire Waterworks and also recently flagged off rehabilitation works on the Eleyele Dam, which was badly hit by the 2011 flood disaster.

According to Ajimobi, the state also recorded milestones in education with “the floating of the Education Trust Fund through which stakeholders now collaborate with the government to improve service delivery and boost the standard of education in the state”.

“This is aside the establishment of the Oyo State Model Education System Initiative (OYOMESI), which seeks to inculcate moral values in students and the School Governing Board (SGB) policy, which is a participatory model that brings together all stakeholders in the education system in the management of public secondary schools.

“Through this policy, more than N2bn has been injected into the education sector in the last one year, leading to improved infrastructure in schools. The SGB policy is now being studied by other states in the South-West zone as

a masterstroke in participatory approach to the management of public schools”, the governor further disclosed.

Other success stories listed by the governor included, restoration of security in all parts of the state through the establishment of a special security outfit, code-named ‘Operation Burst’ and the provision of patrol vans, communications equipment and armoured personnel carriers for the police and other security agencies.

The governor said no fewer than 36 companies had been attracted to the state in the last seven years, generating about 4,000 direct employment for residents according to figures from the Manufacturers Association of Nigeria, while the state was rated fifth most investment-friendly by the National Bureau of Statistics having attracted more than $61m (N22.4bn) in foreign direct investment.

“The health sector has also benefited from the unique vision of our government with the floating of a N50bn Health Endowment Fund and a Health Insurance Scheme, both of which are firsts in Nigeria, as well as the launch of a five-year cancer control strategic plan to reduce cancer-related incidence and mortality”, the governor added.

Tyrants, dictatorial regimes always end miserably - Dogara tells Buhari, others KEHINDE AKINTOLA, Abuja

Y

akubu Dogara, speaker, House of Representatives has warned political office holders at all levels to draw moral lessons from the lives and times of dictators and tyrants who ended up miserably.

Dogara gave the admonition during the Democracy Day Lecture held at the International Conference Centre, Abuja, convened

by President Muhammadu Buhari and attended by Senate President Bukola Saraki, and members of the President’s cabinet.

In a related development, Ayuba Wabba, President, Nigeria Labour Congress (NLC) expressed displeasure over greed of the political class who aggravate the dividends of democracy to themselves at the expense of the electorates.

Wabba also raised alarm over plots by “some elements seek to imperil this democracy by their acts of greed, insane desperation for power, petty proclivities and inanities.

“Nigerian workers, activists, peasants, women and students did not work so hard to bring about this democracy – some even paid the supreme price – for opportunists masquerading as political leaders to loot it dry and then truncate it.”

The Speaker who applauded

Buuhari who is expected to mark his third year in office on Tuesday, 29th May, 2018, for providing the platform for convergence of political office from the three arms of government, stressed the need for true democrats to carry out institutional prerogatives with forbearance and grace.

The condition upon which God hath given liberty to man is eternal vigilance; which condition if he break, servitude is at once the consequence of his crime and the punishment of his guilt.

“I believe that this statement is true as it was then, and as it is today.

But in order for us to harness the blessings of freedom, you must pay the price.

“Any generation that has gone to sleep would have awaken to the rude shock that the Courts and other democratic institutions have been weaponized against them, and as much they have become subjects, instead of citizens, where obeisance to the government is demanded as against the government fearing the people.

“That must not be the case with our own democracy, and for us to ensure that our democracy survives, we have to be eternally vigilant.

“Let me also talk about tyrants, despots, those who threaten democracy, enemies of open society.

As a matter of fact we don’t have to dig too deep down moral lanes to be able to fetch some moral lessons to warn them, as history is an open book to them. It doesn’t matter whether they are dictators who came before Hitler, to dictators like Hitler, Stalin, Mussolini, name them, Sadam Hussein, Mumar Ghadhafi, a certain charging has ended their lives.

“And it would be wrong for us to think that we can do what they did; and not see what they saw. As a matter of fact the beauty of democracy is in forbearance. Those of us who are true democrats here will exhibit light in the way and manner in which we carry out institutional prerogatives with forbearance and with grace, those are true democrats,” the Speaker urged.

In a related development, Ayuba Wabba, President, Nigeria Labour Congress (NLC) in a statement titled: ‘18 years of democracy: Time to ask questions’, observed that the commemoration of Democracy Day, provides opportunity for the Congress to “review how far and how well this journey has progressed.

“This simple but iconic definition of democracy offers ample insight into the purpose of democracy and provides a basic basis to evaluate the performance of democratic actors in any clime.

“There is no doubt that the mention of ‘people’ thrice in the definition of democracy is not a coincidence. It is only a statement of fact that the people are the fulcrum of democracy. So, for us in Nigeria, it is perfectly fitting to ask ourselves ‘how has democracy served the people of Nigeria?’

In our view, 18 years is long enough a time to ask ourselves ‘how much progress have we made as a people in our democratic journey?’ The truth is that 18 years of democracy has come with very sparse rewards for the Nigerian people.

“While we celebrate democracy’s irreplaceable gift of freedom, liberty and popular representation, the truth remains that this democracy has served the political class and not the average Nigerian.

“Unfortunately, those we elected to serve as democratic leaders have not only turned around to serve themselves but continue to exploit every given opportunity to turn the rest of us into paupers in our own land.

“Beside the frequent unlawful dipping of fingers into the public till, everything including salaries, pensions, perquisites, ways and means are skewed in their favour to the exclusion of workers.

“This certainly makes a mockery of the very essence of de-

mocracy which is service to the people and for the benefit of the common good.

“For us in the labour movement, a democracy that does not allocate resources in such a manner that ensures equity, justice and sustained national development or cohesion is beggarly.

“We reason that Nigerian workers are frequently turned into canon fodder by the Nigerian political elite in their high stakes political games and mindless scramble for the commonwealth.

“Despite escalating costs of living, devaluation of the Naira and general hardship in the land, the Nigerian worker is still forced to survive on N18,000 as minimum wage with not a few states owing backlog of salaries and pensions.

“While Pensioners in not a few states wallow in misery and unimaginable suffering, the members of the political elite led by state governors as a matter of ‘law’ and policy, take in advance whopping severance packages to which they are not entitled in the first place.

“How well has this democracy uplifted the spaces where we live and work?

Without prejudice to the effort of this government, our infrastructure is still in tatters. Our roads are impassable and public electricity supply remains epileptic.

A12

BUSINESS DAY

C002D5556

Tuesday 29 May 2018

3 YEARS OF

Buharinomic

‘Ultimate virtue in democracy is the power it bestows on the people’ Being text of the statement by Atiku Abubakar, former vice president, on the occasion of Democracy Day.

D

ear fellow Nigerians, on this occasion of Democracy Day, I wish to felicitate with you.

It is remarkable that despite the assault on our hard-won democracy by anti-democratic forces, we have continued to soldier on as a people and as a country.

The integrity of Nigeria’s electoral process and ability of government to be accountable to the people are the minimum requirements to appreciate the sacrifices of those who gave their all for the enthronement of democracy in the country.

Nigeria’s journey to democracy was a tortuous one that claimed lives and limbs of many a patriot and it is incumbent upon us as beneficiaries of their sacrifices to ensure that we advance the course of democracy through transparent elections and making our governmental institutions work for the people.

Even as we celebrate, my fellow patriots, let us spare some time to reflect and to mourn all those murdered in the on-going needless killings across our dear country.

These Nigerians have been killed in the continuing murderous rampage of criminal elements across the country but especially in Borno and Yobe, and the Benue River Valley, stretching from Adamawa through Taraba to the confluence of Kogi and Benue, and including

Ajimobi

Nasarawa, Plateau, Southern Kaduna, and Zamfara. Others have been killed by armed robbers, kidnappers, cattle rustlers and other marauding bandits. The killings have even extended to sacred places of worship where innocent Imams and Christian clergy and worshipers are slaughtered.

This carnage has gone on for

too long and must stop. In a letter that I sent to the Catholic Bishops Conference of Nigeria recently on these killings, I pointed out, and I repeat it here, that only government can stop these senseless killings if we are to avoid major and further damage to the fabric of our fragile unity.

The recent history of Somalia,

Rwanda, Burundi and Central African Republic, among others, should be a strident warning to all of us, especially those in government whose primary responsibility is the protection of the citizens, but who have been dithering, making contradictory and ridiculous excuses and engaging in diversionary finger-pointing.

The democracy that we celebrate today is a fruit of the labour of patriots, some of who paid the supreme price. As inheritors of this beautiful concept of democracy, it behooves us to ensure that democracy is nurtured not just as a mechanism for a periodic change of government, but as a social construct.

The ultimate virtue in democracy is the power that it bestows on the people. The very essence of that power lies in the ability of the people to live a complete lifestyle that enables every man or woman to triumph in his or her legitimate pursuit. The concept of democracy is absolutely incongruent with a notion of regimentation either in the political or economic sphere.

As we move forward as a country, it is important that we respond to the dynamics of time in proffering solutions to some of the challenges that beset us. Today, the popular clamour amongst our people is the need to make government more responsive and responsible. Our challenges about insecurity and diversification of

the economy have acquired new phases in the past few years and thus should our solutions to those challenges require a brand new thinking.

As the nation goes through a cycle of elections in the coming months, it is important that the integrity of the electoral process is sacrosanct with guarantees of free and fair election. Democracy is by itself a self-correcting concept, but only if there is guarantee of credibility in the electoral process.

We have mourned Nigerian souls to terror attacks enough for us to learn that it is insufficient that the federal government has exclusive statutory mandate in providing security for our people. Our economy has become too exposed to the vagaries of global oil prices for us not to decipher that we need to invest massively in infrastructure and liberalise the economy to create fresh opportunities for the people. Our communities and associations have become so divided and apart that we cannot even begin to confront the most basic of our challenges when we don’t share a mutual sense of belonging.

These are some of the challenges that we must begin to re-evaluate their manifestation, and the significance of our celebration of democracy today should mean that we employ the broadmindedness and participatory notion of democracy in seeking solutions to them.

“With the citizens having the sole responsibility of electing their leaders through democratic processes at all tiers of government.

“On democracy day, Nigerians celebrate freedom; leadership based on the will of the people, fundamental human rights and accelerated development.”

In his homily last Sunday, during the 2018 Democracy Day thanksgiving mass at the Holy Ghost Cathedral, Enugu, the News Agency of Nigeria (NAN) quoted Rt. Rev. Godfrey Onah, Catholic Bishop of Nsukka Diocese, as saying that good governance required visionary leadership and self-sacrifice.

Onah said it was sad that the current democratic experiment which started in 1999 had not changed the fortunes of majority of Nigerians due to corrupt leadership and that the 2019 general election would provide another opportunity for the electorate to make their choices of the type of leadership they want.

He said that all those in elective positions that had not performed needed to be shown the exit door, adding that the electorate should only vote those they were convinced would do well.

Onah blamed the decay of institutions, including the education sector on self-serving leaders whom he said had destroyed the future of up-andcoming ones.

“The only way to protect the future of our children is to give them good education, but because we have stolen our country dry, we can no longer guaranty their future,” he said. The bishop said that Christians were expected to show good examples which would lead to a positive change in the way things were done in the country.

“What have we done to show respect, leadership, service and real concern for others? These values need to become part of our culture if we must survive,” he said.

What is Democracy Day anyway?

Democracy Day is a public holiday in Nigeria. It is held annually on May 29.

This public holiday commemorates the restoration of democracy in the Federal Republic of Nigeria, when the newly elected Olusegun Obasanjo took office as the president of Nigeria in May 1999 ending multiple decades of military rule that began in 1966 and had been interrupted only by a brief period of democracy from 1979 to 1983.

Democracy Day: Still on a familiar turf …Nothing beyond the usual razzmatazz ZEBULON AGOMUO

I

n Nigeria, seminars, workshops and conferences are not in short supply. No day ever passes without these events holding, sponsored either by government, companies or individuals. At such occasions fantastic lectures are delivered and solutions are proferred to challenges that have lingered for donkey years.

But usually, nobody goes beyond such identification of solutions; implementations are hardly attempted, let alone executed.

On many occasions, the organisers are aware that the gathering will not produce anything worthwhile for the country, but they just embark on the programme as fulfillment of righteousness, just a ritual! Such events are mere talk shops!

This is the group to which the Democracy Day celebration and all the razzmatazz that go with it, belong.

Since May 29, 2000 when Nigeria began to mark Democracy Day as a holiday, not many Nigerians have taken time to reflect on the true meaning and essence of the day. Many people however, argue that they have not seen any progress in the country

and some even speak in muffled voices that the Nigerian version of democracy is akin to military.

Pundits say that the political actors in the country have increasingly become undemocratic in their dealings with the masses even though they still masquerade as democrats.

While announcing the public holiday in a statement last Thursday, Lawrence Ojabo, director, Press, Office of the Secretary to the Government of the Federation (OSGF), hinted that the ceremonies would follow the routine, including the usual lecture.

The Guest Lecturer yesterday was Attahiru Jega, a professor and former chairman of the Independent National Electoral Commission (INEC), who was the referee in the 2015 general election that enthroned the Muhammadu Buhari administration.

Jega spoke on ‘Peace building and good governance for sustainable development’, which was the theme for this year’s celebration.

As he reeled out the oft rehashed lines of Nigerian troubles, the audience went into a frenzy of sorts; the Professor’s delivery received volumes of “clap offerings” intermittently and a heavy dose of it as he rounded off.

But, did he say what anybody has not said before? No. And the life goes on.

However, the choice for the theme, pundit say, is ironic at a time when the government has not convinced Nigerians that it is committed to peace and unity in the country. It is ironic that a government that is being accused of presiding over a more divided country never known in the history of Nigeria came up with such a theme.

Talking about “Good governance”, Buhari’s critics believe that his administration cannot in all honesty claim to have enthroned good governance in the last three years.

At best, what this year’s Democracy Day as celebrated by the incumbent government was simply to massage its ego and to claim what it has not really offered the country.

Ojabo, in the statement announcing the public holiday, said that the day offers a unique opportunity “to celebrate our giant strides as a nation as well as our abilities as a people to triumph over daunting challenges in our journey in nation building.

“It also presents an auspicious opportunity to celebrate the return and observance of fundamental human rights.

Tuesday 29 May 2018

FT

C002D5556

BUSINESS DAY

FINANCIAL TIMES

I

Why India’s new bankruptcy law is reshaping big business

Key questions for investors as Italian tumoil deepens Page III

Page IV

World Business Newspaper

Safeguarding external borders tops Kurz’s EU presidency agenda

Austrian chancellor to bring his iconoclastic spirit to brokering deals in Brussels RALPH ATKINS AND ALEX BARKER

A

t the height of Europe’s migration crisis two years ago, Sebastian Kurz challenged German chancellor Angela Merkel — and won. Against opposition from Berlin, Austria’s then-foreign minister secured a deal to close the “west Balkan route” that 1m-plus migrants had used.

Today Mr Kurz, elected chancellor in October aged just 31, is preparing to take the helm of EU politics in July when Austria assumes the bloc’s revolving presidency. And Vienna’s youthful leader seems ready to bring his iconoclastic spirit to brokering deals in Brussels.

“The closing of the western Balkan route was successful and we did not have the support of Germany, France or bigger countries in the EU,” Mr Kurz tells the Financial Times. “I think if there is enough political will and power, there’s the chance to change something.”

Security and protecting Europe’s external borders top Mr Kurz’s presidency priorities — and controversially he is ready to call time on Ms Merkel’s push for mandatory EU quotas for refugees.

The EU had “wasted time” on the divisive issue, he says. “We need to shift our focus from the debates about redistributing refugees within the EU, and should concentrate more on external border protection.”

Germany, he points out, now has “a completely different position” on border control compared to 2015 or

2016. “I think they’ve changed their position in the right direction but what we need now is to stop all these debates and to start to get things done.”

It is typical Kurz-style — courteous, well thought-out, but uncompromising. With Austria holding an entrenched position on many EU files, from migration and frugality on the Brussels budget to its calls to stop enlargement for Turkey, it sets the stage for an unorthodox presidency.

Mr Kurz generated international headlines in December, when he forged a coalition deal with Austria’s fiercely nationalist Freedom party, one of Europe’s best established populist parties. But the Freedom party’s Eurosceptic instincts were curtailed in the 182-page government programme they signed in December.

“There is no doubt that our government is pro-European,” Mr Kurz says.

Nevertheless, the Austrian chancellor often distances himself from the EU’s big powers, and instead casts himself as “bridge builder” to eastern European neighbours such as Hungary. A reason for recent tensions within the EU is, he says, “that some countries think that they act in a more moral and better way than others, that western European countries sometimes look down on eastern European countries.”

Early evidence of his willingness to set his own agenda will come in June when Russian president Vladimir Putin is scheduled to visit Austria. While the west toughened its stance on Russia, Austria has stressed its historical neutrality, although the Freedom party has a pact with Mr Putin’s United Russia party.

Europe hopes fade of evading Trump’s steel tariffs EU officials and ministers to press US on exemptions ahead of Friday deadline JIM BRUNSDEN

T

he EU is making a final push to avoid punitive US steel and aluminium tariffs set to kick in on June 1, even as hopes recede that Donald Trump will grant a full exemption from the measures.

Cecilia Malmström, the EU trade commissioner, is to speak with senior US officials, including commerce secretary Wilbur Ross, in the margins of an international economic summit in Paris this week.

With time running out ahead of Friday’s deadline, the EU fears Washington will impose some form of restriction once the bloc’s

current one-month exemption expires.

Bruno Le Maire, France’s economy minister, told the FT that “the next few days will be significant for the future of the EU-US trade relationship”.

“We should share many objectives such as tackling together the issues of steel overcapacity and how to overhaul the WTO so that it ensures a genuine global levelplaying field,” added Mr Le Maire.

“But we can’t do that together with threats of unjustified tariffs weighing over our head.”

Mr Trump announced the 25 per cent tariff on steel and 10 per cent tariff on aluminium in March Continues on page II

Sebastian Kurz, Austria’s chancellor, is preparing to take the helm of EU politics in July when Austria assume’s the bloc’s revolving presidency © Lisi Niesner/Bloomberg

Youthful rightwinger takes step towards Colombian presidency Former senator Iván Duque to face off with leftwing rival Gustavo Petro GIDEON LONG

Y

outhful rightwing senator Iván Duque emerged as the clear favourite to become Colombia’s next president, winning a first round of voting with ease on Sunday while his main leftwing rival Gustavo Petro performed worse than expected.

Mr Duque took 39.1 per cent of the vote to Mr Petro’s 25.1 per cent. The two men will face off in the second round on June 17 for the right to govern Latin America’s third-most-populous country for the next four years.

Their nearest rivals, former mayor of Medellín Sergio Fajardo and former vice-president German Vargas, took 23.8 per cent and 7.3 per cent, respectively, and failed to make the run-off.

Turnout was more than 50 per cent, higher than in any presidential election this century.

This was the first time Colombians voted for their president since the signing of a historic peace deal with Marxist guerrillas from the FARC that brought to an end over half-a century of armed conflict.

“A lot of people are voting because we’re very worried about this country, worried about the future of democracy here,” said Rafael Córdoba, an economist, as he waited in line with hundreds of people at a polling station in a relatively prosperous northern suburb of Bogotá.

“I’ll vote for the guy who can beat Petro, and that’s Duque,” he said.

“It’s a tactical vote. I would have voted for Vargas but he doesn’t have the support needed to beat Petro. I’m voting to keep Petro out.”

Markets are likely to react favourably to Sunday’s results. Mr Duque, a Georgetown-educated lawyer, is widely seen as market-friendly. He has vowed to cut business taxes and support private enterprise.

At the age of 41, he has little political experience, having served as a senator for just four years. Before that he worked for more than a decade at the Inter-American Development Bank in Washington, DC. Crucially, he has the backing of Álvaro Uribe, Colombia’s former president and the standard-bearer of the right. Both men have criti-

cised the peace agreement with the FARC and Mr Duque is likely to try to unravel parts of it if he becomes president. His critics say he would be little more than a puppet for the far more experienced Mr Uribe.

Mr Petro, a former member of the far-left M19 guerrilla movement, performed worse than expected and only just squeezed into the second round.

He took 4.8m votes to Mr Duque’s 7.5m and would need a significant comeback next month to win the presidency. Although he is likely to pick up some extra leftwing support, he suffers from the highest disapproval rating of all the candidates.

More than 40 per cent of Colombians say they would never vote for Mr Petro, a divisive former mayor of Bogotá.

The next president will inherit an economy that has grown at less than 2 per cent over the past two years but is now recovering, helped in part by higher global oil prices. The government and central bank expect growth of 2.7 per cent this year, and as much as 3.7 per cent next year.

Brazil cuts diesel prices as truckers’ strike cripples nation Poultry producers cull 64m birds due to lack of feed as week-long action JOE LEAHY

B

razil’s President Michel Temer late on Sunday announced measures to try to end a week-long truckers’ strike that has paralysed Latin America’s largest economy and threatened to undermine his government.

The measures, which included a cut in the price of diesel, came as the economic cost of the strike mounted — petrol was unavailable across much of the country and poultry producers were forced to cull 64m birds for lack of chicken feed.

“Throughout this week, my government has always been open to dialogue,” the president said in a terse announcement on national television, conceding a cut of R$0.46 ($0.12) per litre, or an average of about 12 per cent.

The strike started a week ago and has gathered momentum after fuel costs in Brazil soared, hit by a perfect storm of

rising international oil prices and a sharp depreciation in the real.

In spite of calling in the army on Friday to guarantee deliveries for essential services, such as petrol for airports and security forces, Mr Temer has been unable to end the strike. On Sunday, strikers were showing little sign of giving in, challenging the president’s authority.

The drivers, many of whom own their own vehicles, have organised themselves through WhatsApp groups and social media and are fiercely opposed to a government they see as corrupt and rapacious.

Many of them are calling for a military “intervention” or coup to take over the government.

“This revolt by the truckers is the embryo of a tax rebellion,” said Brazilian economist Eduardo Giannetti, who is also an adviser to environmentalist Marina Silva, one of the candidates in Brazil’s October elections. In an interview

with Folha de S.Paulo newspaper, he said, just as in the American Revolution, such rebellions began when “the population no longer accepts the legitimacy of the government to tax it”.

Petrobras, the state-owned oil company, last June introduced a policy of adjusting fuel prices to daily shifts in international oil markets. This at first went unnoticed by truckers because of low oil prices at the time.

But recent rises in oil prices, emerging market currency turmoil caused by Argentina and rising US interest rates have formed a toxic backdrop to the Brazilian real’s 12 per cent depreciation since last June.

Mr Temer said the diesel price cut would be valid for two months, after which there would be price adjustments only every month rather than daily. “This way the truck driver can better plan his costs and the value of his freight,” the president said.

II

BUSINESS DAY

C002D5556

Tuesday 29 May 2018

NATIONAL

FT

Oil price slide resumes on fears of Opec supply increase Stacey Cunningham started on the floor and broke through the glass ceiling ALICE WOODHOUSE AND EDWARD WHITE

O

il prices continued to push lower from their highest levels in nearly four years on Monday amid reports of a looming

output increase from several major producers.

Brent crude, the international benchmark, was off 2.5 per cent at $74.50 a barrel in early Asia-Pacific trading, and US marker West Texas intermediate was down 2.7 per cent

at $66.02 a barrel.

Oil prices have been under pressure since late last week after news that Opec and Russia were set to boost oil output to compensate for lost supply from Venezuela and Iran, with those countries hit by US sanctions.

The decision to raise output saw Brent crude settle at $76.44 on Friday, down 3 per cent on the session, after trading above $80 a barrel earlier in the week.

The lower energy price weighed on Asia Pacific equities with oil producers

Lira rallies after Turkish central bank simplifies rate regime

Europe hopes fade of evading Trump’s steel tariffs...

Continued from page I as a way to address what he said was unfair discrimination against US exports. The EU has consistently argued that the measures are illegal, while at the same time offering trade talks if the tariff threat is dropped.

But Ms Malmström told EU trade ministers last week that, based on her contacts with Mr Ross, an unfettered exemption appeared unlikely.

Speaking to Sweden’s TT News Agency, she said that there were “signals” from the US that the temporary exemption would not be prolonged, “so either the tariffs will be applied to us from June 1, or there will be other kinds of restrictive measures”.

EU diplomats said the US has mooted the idea of using quotas to limit the amount of EU steel and aluminium entering the US market, including that Washington could impose a tariff-rate quota, or TRQ, above which the punitive duties would apply.

They said that the US had outlined the idea in its contacts with the EU Commission and EU capitals, but without giving a firm idea of the level at which the TRQ would be set.

While Europe has broadly maintained a common front in refusing to offer concessions in exchange for being exempted from measures it considers to be illegal, there have been clear differences of emphasis. France has urged a tough line against US tactics while Germany has stressed the need to explore all possibilities for negotiation.

EU ministers and officials are expected to have contacts with their US counterparts on the tariffs issue at a number of international meetings this week, including a summit of the Organisation for Economic Co-operation and Development in Paris and a meeting of G7 finance ministers in Canada.

Ms Malmström may also hold joint talks with her US and Japanese counterparts on Chinese steel overproduction.

Diplomats said that, once Washington’s decision is known, EU talks will be needed to weigh how the bloc should respond.

While the EU has drawn up a retaliatory hit list of some €2.8bn of US products imported into the bloc, this would need to be adjusted if the Trump administration does not fully apply the tariffs.

EU governments will also need to decide whether they want to keep their offer of trade talks with the Trump administration on the table.

Canada and Mexico will also learn this week if they will continue to be exempted.

among the worst performers across the region. In Sydney, Beach Energy dropped 7.4 per cent while in Hong Kong Chinese oil giant Cnooc fell as much as 4.7 per cent and the energy segment on the Topix in Tokyo shed 3 per cent.

Sharp rebound after orthodox view prevails over President Erdogan ADAM SAMSON

T

Commerce Secretary Wilbur Ross is expected to discuss the US wish list on a visit to China later this week © Getty

US presses China to sign long-term import contracts Potential deals on energy and agricultural products could hit EU and other US allies SHAWN DONNAN

W

ashington is pressing Beijing to enter into multiyear contracts to buy US agricultural and energy imports as part of a broader trade deal aimed at reducing the $337bn bilateral trade deficit with China.

But the move could mean taking Chinese business away from key US allies such the EU, Australia, Brazil and Argentina, whose exports could be hit by President Donald Trump’s gambit.

Commerce secretary Wilbur Ross is expected to discuss a list of products that China sources from other countries but could buy from the US on a visit to Beijing later this week.

The list was presented to Beijing this month.

Mr Ross’s trip comes after Mr Trump announced a deal to allow Chinese telecoms firm ZTE, whose fate has been caught up in the trade talks, to resume operations in the US after paying a $1.3bn fine and taking other measures.

The US push for long-term “product-by-product” contracts with China is intended to insulate an eventual trade deal from political pressures on either side of the Pacific, according to people familiar with the discussions.

China, they say, would be less able to cancel purchases if it objected to comments by Mr Trump on sensitive subjects such as Taiwan. In the US, the move is intended to show Mr Trump is securing long-term results.

During his trip next week, Mr Ross will push China to firm up commitments on additional purchases from the US that its negotiators made during a visit to Washington this month.

The US wants those to be “contrac-

tualised” and enforceable, a feature officials say has been missing from past US trade deals.

Mr Ross is expected to focus on US exports that can be substituted for commodities that China currently imports from elsewhere such as crude oil and refined products, liquefied natural gas, and agricultural exports such as beef, poultry and soyabeans.

US negotiators are also seeking the lifting of Chinese quotas and changes in regulations, such as restrictions on US poultry imports due to past avian flu outbreaks, that Washington says discriminate against the US. One person familiar with the discussions said lifting such regulatory barriers could result in a doubling of US agricultural exports to China.

The US last year sent $19.6bn in farm goods to China. But the value of those has remained relatively flat over the past five years and mostly come in the form of soyabeans, $12.4bn of which were exported to China in 2017.

Similarly, in energy, Treasury secretary Steven Mnuchin, who has been leading the China negotiations, has talked about potential increases of $50bn-$60bn annually in exports, or almost half the current value of goods the US sends to China, which last year hit a record $130.4bn.

Administration officials insist they are also pushing for other long-term changes in China, such as reform of its intellectual property rules and alterations to Xi Jinping’s “Made in China 2025” policy to lead the world in 10 key sectors — the original targets of US tariff threats earlier this year. Any eventual grand bargain between the world’s two largest economies would have to include important Chinese

concessions in those areas, officials have said.

Such long-term changes remain the priority of the US business community and a source of tension within the administration, where China hawks worry that Mr Mnuchin and Mr Ross are putting too much emphasis on reducing the US trade deficit and not enough on harder-to-secure IP changes.

Those concerns are shared by prominent Republicans in Congress, where the administration’s ZTE deal continued to face criticism. Congress is considering measures that could restrict the president’s room for manoeuvre on ZTE, which was caught violating US sanctions against Iran and North Korea, as well as the terms of a $1.2bn 2017 plea agreement.

Senior Republicans have also called for congressional oversight hearings into the ZTE deal.

“I don’t just view the ZTE issue as a punishment on ZTE, I view it in the context of the larger China issue,” Republican Senator Marco Rubio said in a television interview on Sunday.

“China is trying to overtake the United States as the world’s most powerful country. They’re not doing it by outinnovating us or out-competing us.

They are doing it by stealing.”

That scepticism over Mr Trump’s approach to China from members of his own party is a sign of the broader resistance he potentially faces in Congress to any deal his negotiators bring home. It is also why people close to the talks believe China hawks inside the administration — such as Robert Lighthizer, the US trade representative — still have significant influence with the president even as Mr Mnuchin and Mr Ross continue to press for a deal.

he lira climbed vigorously against the dollar on Monday, recovering some of last week’s sharp losses, after Turkey’s central bank unveiled changes aimed at simplifying its monetary policy.

Turkey’s currency rose 3.3 per cent in morning trade in Europe to TL4.55 to the dollar. It had tumbled to a historic low of TL4.9221 last Wednesday amid mounting concerns over the economy and President Recep Tayyip Erdogan’s resistance to higher interest rates.

The lira was already higher but the move accelerated after the central bank made long-rumoured changes to its rate regime. Trading may be thinner than usual, with markets in London and New York closed for holidays.

The central bank said the oneweek repo rate will become its primary policy rate. It will be set at 16.5 per cent, the same as the late liquidity window lending rate, which has been the one most closely followed by analysts. The repo rate had previously been set at 8 per cent.

“It seems the orthodox economists are winning in Turkey, first with a 300 bps rate hike, now a realistic repo rate,” said Charles Robertson, global chief economist at Renaissance Capital.

Timothy Ash, senior emerging market sovereign strategist at BlueBay Asset Management, said the “more rigid” rate regime would be seen by investors as “a positive.” He added that the changes were “long overdue”.

The decision comes after Turkey’s central bank hiked the late liquidity rate last week from 13.5 per cent in a bid to stem a dramatic decline this year in the value of the lira.

Turkish central bank governor, Murat Cetinkaya, and Mehmet Simsek, deputy prime minister, will also be in London on Monday and Tuesday to hold talks with investors, according to a person with direct knowledge of the matter.

They are arriving at a time when confidence in Turkey has taken a severe blow amid concerns over its overheating economy and the policies of Mr Erdogan’s government.

Piotr Matys, strategist at Rabobank, said the meetings were a “step in the right direction to restore confidence.”

He added: “Investors will be looking for a strong hawkish signal from Governor Cetinkaya that more rate hikes will be delivered to support the lira perhaps as soon as on June 7.

Cetinkaya will also have to convince investors that the central bank is an independent institution following recent comments from President Erdogan.”

Tuesday 29 May 2018

C002D5556

BUSINESS DAY

III

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Key questions for investors as Italian tumoil deepens For much of the year, markets had been largely becalmed about political risk KATE ALLEN

T

he political turbulence in Italy has shaken many investors who for much of the year had been encouraged by the improved economic outlook.for the eurozone.

In sharp contrast to 2017, when investors faced French and then German elections, political risk in the eurozone had been widely discounted as a worry in 2018.

Italian stocks had, until recently, been one of the best-perfoming equity markets in the eurozone. Meanwhile, the yield on the Italian benchmark bond had fallen as low as 1.71 per cent in April.

However, the dramatic events of the last couple of weeks — and the sharp fall in the price of Italian assets — demonstrate that Italian politics is firmly back on the agenda for many investors.

Here are some key questions investors are asking.

1. What are the biggest political risks?

The collapse over the weekend of plans by the anti-establishment Five Star Movement and far-right League to form a government offered markets some brief respite early on Monday. If the parties had taken control, the prospect of a stand-off between Brussels and the eurozone’s third-largest economy would have increased sharply.

Yet that initial relief was rapidly replaced by the mounting likelihood of fresh elections, setting the stage for months of confrontation between the populists and the Italian establishment in the run-up to a potential vote in the autumn.

The prospect of a long drawn-out period of political wrangling could see investors add a signficant uncertainty premium to Italian bond and equity prices.

2. Is the Italian economy strong enough to support its debt burden?

Italy has improved its economic outlook significantly since the eurozone debt crisis nearly half a decade ago. It is now running a current account surplus of around 3 per cent of GDP, and its spending on debt interest costs has fallen from above 6 per cent of GDP in 2000 to below 4 per cent today.

But the nation is carrying a substantial debt burden. Its government debt to GDP ratio is at 132 per cent and has only just begun to dip. The IMF forecasts that it will continue to fall in the com-

ing years, but that trend depends on a continuation of an improvement in the eurozone economy.

A constitutional crisis in Italy or renewed questions about the future of the eurozone could threaten that economic stability, many investors fear.

Credit rating agency Moody’s put Italy on review for a downgrade on Friday, warning that “the fiscal plans of the new coalition government” posed “a significant risk of a material weakening in Italy’s fiscal strength”, along with “risk that the structural reform effort stalls”.

3. What factors are supportive for the pricing of Italian debt?

Italy has a strong domestic investor base, with more than two-thirds of its bonds held by Italian residents. Many of these investors such as pension funds and insurance companies are relatively price-insensitive and likely to keep buying.

Meanwhile the European Central Bank — via the Bank of Italy — is another big support to the market.

The ECB holds more than 15 per cent of Italy’s oustanding debt securities through its quantitative easing programme of bond-buying. That has helped to keep Italian yields at low levels by historic norms, despite the recent market moves.

4. Does the Italian situation have wider implications for eurozone monetary policy?

Investors had until recently been widely expected the European Central Bank to signal at its next meeting in two weeks’ time that it would wind down QE later in the year.

Now, questions are growing about how feasible it will be to withdraw the ECB’s buying power at a time when investors are already driving Italian debt costs higher.

Nearly half a decade ago, the Greek debt crisis turned into a crunch point for the bloc as a whole. The sheer scale of both the Italian economy and its bond market make it much more of a systemic challenge to the bloc than Greece was. Some commentators have dubbed Italy ‘ too big to fail and too big to bail’.

“On a number of levels – by challenging political cohesion, by raising public and private borrowing costs, and ultimately, through growing eurosystem imbalances – events in Italy could destabilise the euro area,” said Marchel Alexandrovich, senior European financial economist at Jefferies.

Russia’s Lukoil posts 75% profit jump on crude strength HENRY FOY

L

ukoil, Russia’s second largest oil producer, said net profit in the first quarter of 2018 jumped an annual 75 per cent, as higher crude prices helped sales.

Russia’s top privately-owned producer reported profit of Rbs109.1bn ($1.75bn) in the first three months of the year, up from Rbs62.3bn a year earlier, and slightly above an analyst forecast of Rbs107bn, according to a poll conducted by Interfax.

The benchmark Brent crude price was roughly 20 per cent higher during the quarter than 12 months previously, thanks in part to an agreement between Moscow and the Opec cartel

to cap output.

That cap may be eased this year following talks between Russia and Saudi Arabia, the de facto leader of Opec, about partially lifting the constraints, following a collapse in output from Venezuela and fears over Iran’s exports, which pushed crude above $80 a barrel this month.

Lukoil’s chief executive Vagit Alekperov has led calls in Russia for the cap to be eased, amid some resentment among major Russian producers that they have not been able to increase output and take full advantage of the higher prices.

Lukoil said free cash flow in the first quarter rose to Rbs45.9bn from just Rbs1.4bn a year ago, while capital expenditures fell 7 per cent to Rbs121.1bn.

Pro-EU protesters show their support for Italy’s pro-Europe parties, although many Italians blame Europe for their plight

Turkish central bank pledges to simplify rates to stem lira slide Currency gains after promise of a more conventional approach to monetary policy LAURA PITEL AND ADAM SAMSON

T

urkey’s central bank has sought to calm financial markets by promising to simplify its complex system of interest rates, triggering the biggest leap in the lira in more than a year.

The decision announced on Monday will boost hopes among investors that the central bank has been granted more latitude after a weeks-long stand-off with president Recep Tayyip Erdogan that caused the currency to plunge to record lows.

The central bank said it would more than double its one-week repo rate to 16.5 per cent from June 1, setting it as the benchmark and marking a return to a more conventional approach to monetary policy.

“It seems the orthodox economists are winning in Turkey, first with a 300 basis points rate hike, now

a realistic repo rate,” said Charles Robertson, global chief economist at Renaissance Capital.

The lira was up more than 3 per cent against the dollar following the central bank announcement.

Mr Erdogan is a longstanding opponent of high interest rates, and continued to rail against a rate increase even as the lira lost 20 per cent of its value against the dollar since the start of the year. But after heavy pressure from some members of his economics and finance team, he relented last week and the central bank raised its liquidity window rate from 13.5 per cent to 16.5 per cent.

The late liquidity window allows banks to borrow after local markets have closed and has become the de facto main rate. But after an initial recovery in the lira, the currency continued to lose value as investors were unconvinced that the move

would be sufficient to stem the deepening crisis.

It is widely believed that it was Mr Erdogan’s hostility to high interest rates that compelled the central bank in January 2017 to adopt the unorthodox tactic of raising the late liquidity window and then forcing all lenders to borrow using that rate.

It had previously been used as a last resort for banks that were not receiving adequate funding at the cheaper repo rate.

But for years the bank has relied on a complicated system of multiple rates that analysts said made monetary policy decisions unpredictable.

In a statement published on its website, the central bank said it was effectively switching that rate with the one-week repo rate. Overnight borrowing and lending rates will be set 150bp high than the one-week repo rate, it said.

China’s Weibo microblogging site deletes posts by embassies, says report US mission most heavily censored as Beijing steps up online crackdown YUAN YANG

S

ina Weibo, China’s most popular microblogging site, is censoring foreign embassies’ posts on topics ranging from US-North Korea relations to stock market regulation, according to new research, including selectively deleting comments to make their authors appear more pro-China.

Sina Weibo, which has more than 411m monthly active users — more than Twitter — sometimes deletes embassies’ posts outright. But it also uses more subtle methods such as stopping them from being re-shared or disabling comments.

A new report by the Australian Strategic Policy Institute, a Canberra think-tank, counts the US embassy as the most censored diplomats, with 28 posts interfered with in the three months to January. France and Cuba came next, with 12 and five instances respectively, while several other embassies — such as the British — suffered one instance.

The findings highlight China’s increasingly heavy-handed censorship of social media over the past year, with social media platforms at times

banning even the phrase “I disagree”, as well as references to cartoon characters such as the Walt Disney Co.’s Winnie the Pooh and Entertainment One’s Peppa Pig for their political and cultural associations.

US President Donald Trump’s administration, which has been unusually outspoken both on social media and on foreign policy issues, has also created diplomatic problems for a Chinese government used to heavily controlling media coverage of foreign policy discussions.

Most recently, Weibo censored comments under the US embassy’s Chinese translation of a letter calling Beijing’s demands for companies to stop referring to Taiwan as a country as “Orwellian nonsense”.

“The US Embassy faces regular and routine blocking of social media posts in China,” said an embassy spokesperson. “The US believes the free flow of information, including citizens’ access to media, plays an important role in fostering mutual understanding.”

Diplomats in China “do not get any special free-speech pass for China”, said Charlie Smith of GreatFire.org, an anti-censorship organisation that runs

FreeWeibo.com, a platform which records posts deleted on Weibo. “But they are in a unique position to highlight instances of censorship by the Chinese authorities and to promote circumvention tools and other anticensorship initiatives.”

A spokesman for the British embassy in Beijing said: “We are aware of issues affecting users on Sina Weibo . . . We are working with the Chinese authorities and civil society to encourage greater freedom of expression in China.”

Weibo, which is listed on the New York Stock Exchange, has come under fire before for a shortlived ban on content related to homosexuality. The site reversed its stance after two lawyers in Jinan suggested gay people take legal action against the company in the US. Even posts that appear to show the weaknesses of democracies compared to China’s one-party system have been censored. In January, the US embassy posted an item stating it would not update its Weibo account during the US government shutdown following failure to pass funding legislation. The post went viral, and many nationalist netizens came to gloat.

IV

BUSINESS DAY

FT

C002D5556

Tuesday 29 May 2018

ANALYSIS ‘Trump effect’ weighs on US-led bid to host 2026 World Cup Fifa officials say resentment of America’s president is helping Morocco’s challenge gain support MURAD AHMED

Why India’s new bankruptcy law is reshaping big business Fresh insolvency rules are designed to redraft the rules of capitalism but are becoming bogged down in legal challenges SIMON MUNDY

A

fter a nationwide manhunt, Neeraj Singal was finally tracked down and seized by fraud investigators at an upscale New Delhi hotel in 2014. Accused of involvement in the bribing of bankers, a charge Mr Singal denies, the scion of the Bhushan Steel empire was hauled off for questioning.

Within days he was released on bail and returned as the controlling shareholder of Bhushan, built by his father from a door hinge producer into one of India’s largest industrial groups. Four years on, the case remains stuck in India’s overloaded courts system, with no sign of resolution.

Mr Singal is one of a group of businessmen whose wealth grew exponentially after a series of liberalising reforms in the 1990s. There was a time when the “promoters”, or controlling shareholders, of India’s top companies were widely seen as beyond the law. The more controversial of these tycoons weathered criminal allegations and financial reverses while keeping a firm grip on some of India’s biggest businesses.

“No big businessman had been put behind bars, and they knew they could ward off their lenders through very lengthy legal processes,” says Prabodh Agarwal, chief financial officer at IIFL Holdings, a financial group. “They were always going to stay in charge.”

Yet Mr Singal has just had his prized steel business, with an annual capacity of 5.6m tonnes but debts of nearly $7bn, torn from his grasp. It is the biggest scalp so far in a major overhaul of India’s bankruptcy system , widely seen by analysts as a redrafting of the rules of capitalism in the country.

The new law promises to deal swiftly with failing companies, removing the owners and blocking them from trying to buy back the businesses out of bankruptcy. Its architects set a nine-month time limit for the entire process — making it on paper one of the world’s fastest bankruptcy regimes, and striking a marked contrast with the sluggish pace of other Indian legal processes.

Hopes of swift progress have, however, been undermined by a series of legal challenges that have prolonged the first cases, among them Bhushan Steel. Critics argue that the process’s strict rules on eligibility restricts the pool of available buyers for troubled assets.

Yet senior figures in government and the business community argue that this will prove one of India’s most important reforms — ushering in a

new era of accountability for promoters and speeding up national development by putting vital industrial assets under competent management — critical to the economic ambitions of the government of prime minister Narendra Modi.

“There are 100 families that account for everything — it’s a tiny elite,” says Sanjeev Sanyal, principal economic adviser in India’s finance ministry. Mr Modi “is carrying out the equivalent of the French Revolution,” he adds. “The insolvency and bankruptcy code is the equivalent of the guillotine.”

From western Gujarat state to tribal areas of Odisha in India’s east, the country’s steel companies were at the vanguard of a huge wave of debtfuelled corporate investment over the past decade, betting on rising demand in a fast-growing economy. Indian steelmakers invested about $40bn in new capacity between 2007 and 2016, according to Kotak Institutional Equities, only to be hit by falling prices as Chinese rivals ramped up exports.

Several steel companies are now among the major cases in the first wave of bankruptcy hearings under the new law and have attracted powerful bidders from steel baron Lakshmi Mittal of European steel giant ArcelorMittal to mining tycoon Anil Agarwal, and from the Tata conglomerate to the fast-rising UK entrepreneur Sanjeev Gupta.

This contest will alter the competitive landscape in a vital sector, as the government pushes for a near tripling of steel output to 300m tonnes by 2030.

But the impact of the law goes well beyond the steel sector. It will have farreaching implications for the creaking balance sheets of India’s state-owned banks, saddled with $116bn of nonperforming loans. It also signals a much tougher operating environment for the captains of industry, amid a broader crackdown on corporate corruption promised by Mr Modi.

“These companies have defined the promoters’ identities,” says Amit Tandon, co-founder of Mumbaibased Institutional Investor Advisory Services. “This is like a part of them being surgically removed.”

When India’s parliament passed the new insolvency and bankruptcy code in May 2016, the country was gripped by the flight to London of drinks tycoon Vijay Mallya, the selfproclaimed “king of good times”.

His sudden departure followed the failure of his foray into aviation, with Kingfisher Airlines defaulting on debt of $1.3bn in 2012.

The fiasco helped expose the unhealthy relationship that had developed between India’s stateowned and private banks and major

corporations, with the latter securing loans for risky projects, and persuading their lenders to defer repayment indefinitely when those projects failed. Critics argued that India’s dysfunctional insolvency system incentivised bankers to keep their ailing borrowers in business rather than force bankruptcy proceedings.

According to World Bank data published before the new code was introduced, creditors typically had to write off three quarters of the debt in Indian insolvency cases, which on average took more than four years to resolve — compared with a year or less in the best-performing nations.

“There were multiple laws that a promoter could take shelter under, and the banks had very little enforcement capability,” says Abizer Diwanji, financial services head for EY in India. “By the time winding up came it could have been 10 or 15 years in some cases.”

Under the new law any creditor owed as little as Rs100,000 ($1,400) can file an insolvency petition against a defaulting company. If this is accepted by a court, the management must be removed immediately, and the company liquidated within nine months if no buyer can be found.

Lenders were slow to make use of the new system, so India’s central bank decided to force their hand.

Last July it ordered banks to launch insolvency proceedings against 12 of the biggest corporate defaulters. Five were steel companies, among them Mr Singal’s Bhushan Steel.

Almost 10 months on several of these vital test cases are bogged down in bitter lawsuits underscoring the difficulty of the reform process. The highest-profile is that of Essar Steel — once the prize asset of the billionaire brothers Shashi and Ravi Ruia, who rose from traders in the port city of Chennai to rank among the most powerful Indian tycoons.

Over more than two decades, Essar built its Hazira steel plant on the shore of the Arabian Sea in Gujarat into one of India’s largest — only to struggle with repayments on its debt of nearly $7bn. When the company was pushed into insolvency, the Ruias’ involvement with it looked at an end — particularly after the government tightened the law in October, to bar any owner of a defaulting company from the bidding process.

But in their dogged effort to stay involved, the Ruias are putting the law to its sternest test yet. One of the bids filed before the February 12 deadline was from Numetal Mauritius, a consortium led by Russia’s VTB Bank, a long-time Essar financier, alongside a trust controlled by a Ruia family member.

T

here are few geopolitical tussles in which the tiny Caribbean island of Saint Lucia holds as much sway as global powers like China, Brazil or Germany. But the decision on which country hosts the football World Cup is one.

In Moscow on June 13 — the eve of the opening match in the 2018 tournament — members of Fifa, international football’s governing body, will select the hosts of the 2026 competition. The choice is between a powerhouse joint bid from the US, Canada and Mexico, three of the world’s largest economies, and Morocco, which barely scrapes into the top 60.

And yet the north African state is, as one Fifa official puts it, “coming up on the rails” in the fight to host what would be the biggest World Cup ever.

One of the key factors appears to be simmering resentment, especially

among some African members, towards US president Donald Trump.

The vote will be scrutinised as much for its conduct as the eventual winner.

The decision will set the future direction of Fifa, as it seeks to escape the corruption scandal that briefly threatened its existence and undermined the award of the last two tournaments. Several of the Fifa board members who voted in 2010 to give this year’s World Cup to Russia and the 2022 edition to Qatar were later implicated in wrongdoing.

As a result Fifa introduced reforms designed to clean up the organisation and the horse-trading that blighted previous votes.

“The bidding process . . . has been designed to evaluate the bids against objective criteria,” says a Fifa spokesperson, “and so avoid a return to the secret and subjective decisions of the past.”

Each of its more than 200 member nations will cast a vote, with 104 needed for victory. It is a decision taken by sports administrators, but one national politicians may wish to influence.

Anticipating nearly unanimous support from within its own continent the North American bid team were jolted last month when Edmund Estephane, St Lucia’s minister for development and sports, told reporters the island would back Morocco “200 per cent”. Yet when the Financial Times put this to Lyndon Cooper, president of Saint Lucia’s Football Association, who will cast his country’s vote in Moscow, he says: “No determination has been made. We will support the one [bid] that will benefit our country, our people and our sport.”

The confusion adds to the sense that the North American bid — the overwhelming favourite with its worldclass stadiums, training facilities and a promise of record profits — is not as secure as many had thought even a few months ago with some officials

blaming what they call the “Donald Trump effect”.

It is a recognition that regardless of the technical merits of either bid, global politics will play a part in the decision.

An adviser to one of Fifa’s top executives says many developing nations are balking at handing the US president a victory after he referred to African states as “shithole countries”.

In a sign of the uncertainty surrounding the vote, some close to the Fifa leadership believe its members will plump for the North American bid to help assuage the American officials behind the ongoing bribery probe.

While others argue the opposite is true, and that members may seek to punish the US for launching the bribery investigation in the first place.

“The future of Fifa is not dependent on, but it is linked to, having the right vote [in technical terms] for 2026,” says one of Fifa’s top executives. “If it just comes down to politics, rather than

assessing what is good for the organisation — remember the World Cup provides 90 per cent of Fifa’s revenues — you have to question why the bidding process exists at all.”

United front When the joint US, Canada and Mexico bid — dubbed “United 2026” — was launched in April 2017 there was little expectation of a contest. Fifa rules require the World Cup to rotate around continents, restricting challenges from the European and Asian federations, given that the next two tournaments are to be held in those regions.

Morocco promises a more compact event for fans and teams, with matches played in a timezone better suited to European and Asian TV markets. But the 2026 tournament, the first to feature 48, rather than 32 teams, making it more expensive, would appear to favour the US-led bid. Last year, a suggestion that Fifa should fast-track the North American bid without a formal vote was considered, but ultimately shelved.

Morocco, which has unsuccessfully bid to host the tournament four times before, joined the race with only hours to spare before last August’s deadline.

Few expected it could challenge the North American effort, which promises revenues of $14bn from broadcasting, sponsorship and ticketing, with profits around double those achieved by any previous tournament. The vast majority of matches, including the final, will take place in the US but games will be staged across 23 cities from New York and Los Angeles to Mexico City and Toronto, all in stadiums already built. The United team says it could host the World Cup tomorrow if required.

Carlos Cordeiro, president of the United States Soccer Federation, says a North American World Cup could also attract sponsors wary of being associated with Fifa since the scandal broke.

BUSINESS DAY

C002D5556

NEWS YOU CAN TRUST I TUESDAY 29 MAY 2018

Insight CAMA Bill – Ambitiously leapfrogging Nigerian company law over three decades of stagnation OZOFU ’LATUNDE OGIEMUDIA & CHRISTINE SIJUWADE

T

he Companies and Allied Matters Act (Chapter C20) Laws of the Federation of Nigeria 2004 (“CAMA”) was initially made law in Nigeria in 1990 as a decree of the military government.

It was modelled on the English Companies Act 1985. Since its inception, there have been no significant amendments to the CAMA, notwithstanding that England has, over the past three decades, amended and replaced its own Companies Act. Nigerian companies have, essentially, relied on a 28year old law to govern the way businesses operate in our dynamic and exponentially evolving global community.

This is all set to change if the Companies and Allied Matters Act (Repeal and re-enactment) Bill (“Bill”), which was passed by the Senate on 15th May 2018, is passed into law in its current form. The Bill is intentionally ambitious.

Drawing on lessons learnt from other jurisdictions, but taking into account the peculiarities of the Nigerian market, the Bill seeks to address the various shortcomings of the CAMA and, if passed, will leapfrog our companies’ law over three decades of stagnation. The intended upshot is laudable as it will give Nigerian businesses and organisations the tools they need to operate and compete efficiently, with the overall objective of positioning Nigeria as a hub for entry into the African market.

A g a i n s t t h i s b a c kground, some of the significant innovations of the Bill are highlighted below.

•A more inclusive CAC board - the board of the Corporate Affairs Commission (“CAC”) will now include a representative of the Institute of Chartered Secretaries and Administrators of Nigeria, and the Nigerian Association of Small and Medium Enterprises. This will give professional company secretaries, who deal with the CAC regularly, and Micro, Small and Medium Enterprises (“MSMEs”), an opportunity to be heard and to contribute to improving the efficiency of the CAC as an agent for facilitating the ease of doing business in Nigeria. The Association of National Accountants of Nigeria will also, in collaboration with the Institute of Chartered Accountants of Nigeria, have a representative on the board.

•De-criminalising offences under the CAMA – In

the CAMA, there are more than a hundred criminal offences, all of which attract a nominal monetary penalty or a term of imprisonment upon conviction. In the Bill, there are 32 criminal offences. Most offences under the Bill are now administrative offences that the C AC is empowered to penalize through fines determined by the CAC. In relation to the offences that remain criminal, the courts are given the discretion to determine the quantum of fines and the duration of sentences. These changes will make it easier to penalize breaches of the law, and consequently, encourage compliance. In addition, the move away from specifying the quantum of fines in the law will make it easier to increase those fines to reflect economic realities.

•Single-member and director companies – MSMEs are the powerhouse of the Nigerian economy, collectively employing about 60 million Nigerians, yet only about 14% of them are registered under the CAMA .

It is therefore important to encourage small businesses by making it possible for sole proprietorships to register as companies and benefit from the limited liability that incorporation confers. Under the Bill, small companies can have a single shareholder and director.

•Companies limited by guarantee – Three significant changes have been made in relation to companies limited by guarantee.

First, the requirement for the approval of the Attorney-General of the Federation for the registration of such companies has been deleted and replaced with a duty on the CAC to cause the application to be advertised in 3 (three) national newspapers. Secondly, a framework for the conversion of companies limited by guarantee to companies limited by shares has been introduced. Thirdly, the aggregate amount guaranteed by the members of this type of company has been increased from N10,000 to N100,000.

•Templates for constitutional documents – The CAC has been given the power to issue regulations amending the templates of constitutional documents in Table A of the Bill. This will ensure that the form of constitutional documents can be amended as required without the need for an amendment of the Act itself.

•Statutory recognition of CAC’s electronic processes - Section 31 provides for submission of applications for reser vation of names through electronic

means. This amendment brings the provision in line with 21st century technological solutions, some of which have already been implemented at the CAC. •Company seals – The use of company seals by Nigerian companies will become optional.

•Trusts – The provisions of Section 86 of the CAMA that prohibit the recognition of trusts over shares was left out of the Bill. The effect of this is that companies may recognise any trust in respect of shares, and a notice of trust over shares may also be filed at the CAC. •Disclosure of Persons with Significant Control –

thorised share capital – One of the most significant amendments made by the Bill is its replacement of the concept of minimum authorised share capital with minimum issued share capital. In line with changes made in other jurisdictions such as England, a company is no longer required to have an authorised share capital that specifies the limit on the maximum amount of shares a company can allot. The rationale behind this is clear – the requirement for a company to pay stamp duty and CAC f i l i ng f e e s w h e n e ve r i t creates or increases its authorised share capital,

The Bill introduces company voluntary arrangements and administration into Nigerian company law. With this, the insolvency regime in Nigeria has a dual aim: saving viable businesses and ensuring that non-viable businesses can efficiently exit the market Under the Bill, both private and public companies are to be notified of the acquisition, or divestment of shares amounting to 5% or more of the issued share capital of the company.

The threshold under the CAMA for this disclosure is 10% and applies only to public companies. These changes are aimed at increasing transparency and combating asset shielding.

•Replacement of au-

notwithstanding that all the shares might not be allotted, amounts to a frontloading of costs. The Bill, therefore, has removed the concept of an authorised share capital and replaced it simply with a minimum issued share capital. Thus, provided a company has met the minimum issued share capital, it would have complied with the requirements of the Bill. Whenever a company wishes to is-

sue more shares, it simply passes a resolution to do so, issues the shares, and pays the applicable stamp duty and CAC filing fees only in respect of the additional shares issued.

In addition, under the CAMA, the minimum authorized share capital for a private company is N10,000 and for a public company, N500,000. Under the Bill, a private company must have a minimum issued share capital of N100,000 while for a public company, the minimum issued is N2 million. A quarter of the issued share capital must be paid up.

•Reduction of Share Capital - The CAMA treats private and public companies alike with respect to the process by which they may reduce their share capital. In order to ease the process of doing business, private companies under the Bill may reduce their share capital if they pass a special resolution to that effect, without the added burden of applying to court for a confirmation of the reduction.

•Issue of Shares at a Discount – The issue of shares at a discount is unlawful under the Bill. The rationale for this is that the nominal value of the shares of most Nigerian companies is so low that the provision for issuance of shares at a discount is virtually redundant.

•Acquisition by a company of its own shares – Private and public companies will be permitted to buy back their shares subject to certain conditions, which are outlined in section 185 of the Bill.

•Treasur y Shares – Treasury shares are formally recognised, defined, and provided for in the Bill.

•Prohibition of ir redeemable preference shares – The Bill prohibits the issuance of irredeemable preference shares, so that companies always have the option of redeeming any preference shares that they issue.

•Electronic transfers of shares are now expressly permitted in the Bill. The languag e of the C AMA required a physical document to be provided, but this has now b e en addressed by the Bill.

•Priority of Fixed Charge over Floating Charge – Under the CAMA, the priority of a fixed charge over a floating charge is subject to the holder of the fixed charge having “actual notice” of a negative pledge.

The term “actual notice” as used in the CAMA was not defined, and it was difficult to prove when a party had actual notice. Under the Bill, “actual notice” has been replaced by “notice”,

thereby making it possible to prove that a party has received notice of a negative pledge that has been filed at the CAC. •Small companies – The parameters by which a small company is defined have been adjusted to reflect the reality of SMEs in Nigeria. The effect of this is that more SMEs will qualify as small companies under the Bill and, accordingly, will benefit from the concessions given to small companies under the Bill such as the exemption from audits and from the requirements to hold annual general meetings and have a company secretary.

Under the Bill, a small company is a private company, at least 51% of the shares of which are held by its directors, and which has a turnover of not more than N120,000,000 and net assets of not more than N65,000,000 and which does not have any foreigner, government or government corporation as a shareholder. The thresholds under CAMA for the turnover and net assets of a small company are N2 million and N1 million, respectively.

•Company rescue procedures - The Bill introduces company voluntary arrangements and administration into Nig er ian company law. With this, the insolvency regime in Nigeria has a dual aim : saving viable businesses and ensuring that nonviable businesses can efficiently exit the market.

•Netting – The Bill introduces netting provisions as a means of mitigating credit risks associated with over-the-counter derivatives, thereby promoting financial stability and investor confidence in Nigeria.

•Limited Partnerships and Limited Liability Partnerships can now be registered within the framework of the federal companies Act. This will resolve a lot of concerns for private equity funds and other investment funds seeking to establish a local entity in Nigeria as a partnership.

Prior to the Bill, such partnerships could only be set up in Lagos State.

The Bill is another step in the right direction as the Nigerian Senate continues to work towards legislative reform that will further boost investor confidence in Nigeria.

Ozofu ’Latunde Ogiemudia (partner) and Christine Sijuwade (Managing Associate) at Udo Udoma & BeloOsagie, were members of the Technical Advisory Committee that advised on the Bill.

Ozofu was the chairperson of the committee.

Published by BusinessDAY Media Ltd., The Brook, 6 Point Road, GRA, Apapa, Lagos. Ghana Office: Business Day Ghana Ltd; ABC Junction, near Guinness Ghana Limited, Achimota – Accra, Ghana.

Tel: +233243226596: email: mail@businessdayonline.com Advert Hotline: 08116759801, 08082496194. Subscriptions 01-2950687, 07045792677. Newsroom: 08169609331 Editor: Anthony Osae-Brown. All correspondence to BusinessDAY Media Ltd., Box 1002, Festac Lagos. ISSN 1595 - 8590.