BusinessDay 29 Oct 2019

news you can trust I **TUESDAY 29 OCTOBER 2019 I vol. 19, no 423

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L-R: Mudashiru Obasa, speaker, Lagos State House of Assembly; Emeka Anyaoku, former Commonwealth secretary general; Uche Olowu, president/chairman of council, Chartered Institute of Bankers of Nigeria (CIBN), presenting certificate and plaque to the new fellow of CIBN, UK Eke, group managing director, FBN Holdings plc, and Seye Awojobi, registrar/ chief executive, CIBN, at the 2019 CIBN investiture ceremony in Lagos.

Pic by Pius Okeosisi

Buhari travels again to lure investors, but his policies drive them away P. 2

as troops take over roles of police, other paramilitary agencies

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s Nigeria’s security architecture continues to wobble under the burden of insecurity, the Army, which should be a last resort, is increasingly being called upon to do the job of paramilitary forces such as the Police, Civil Defence, Federal

Road Safety Corps (FRSC), and Immigration.

The Nigerian Army theatre Command of Operation Lafiya Dole had in a statement said it launched “Operation Positive Identification” against the Islamic State’s West Africa Province (ISWAP)/Boko Haram terrorists in the North Eastern part of the country.

The troops were instructed to strictly check valid means of identification such as national identification card, voters’ registration card, driver’s licence, international passports, or other valid official identification, before allowing passage of persons in the region.

But the Army later announced it would extend “Operation Posi-

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Inside

Fears of rights abuses trail Army’s planned nationwide operations CALEB OJEWALE & TONY AILEMEN, Abuja

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Foreign Reserve - $40.687bn Cross Rates - GBP-$:1.29 YUANY-N 51.15 Commodities Cocoa

Gold

US$2,504.00

$1,492.51 $61.55

Crude Oil

5 implications of big decline in T-bills trading activity …As daily turnover down 90% from N424bn in Sept to N43bn …within days of CBN’s OMO policy LOLADE AKINMURELE, ENDURANCE OKAFOR & OLUWASEGUN OLAKOYENIKAN

tive Identification” to all geopolitical zones in a bid to combat insecurity across the nation, in an exercise expected to end on December 24. Nigerian soldiers would be drafted from their barracks to check identification cards such as driver’s licence which ordinarily would be the remit of the

t is no longer news that the Central Bank of Nigeria (CBN) has restricted individuals and Nigeria’s corporates from participating in both primary and secondary markets of its Open Market Operation (OMO) window,

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Tuesday 29 October 2019

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news Glomobile debt: Deregulation of interconnection charges for telcos may be an option FRANK ELEANYA

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or many Nigerians, the first time they came across the phrase “interconnection charges” was when MTN announced in July 2019 that it was being owed over N4 billion by Glomobile and hence would be forced to disconnect subscribers from the network unless the Nigerian telecom pays it.

ANALYSIS L-R: Ahmed El Segeni, Egyptian parliament secretary general; Assem Hanafi Elseify, Egyptian ambassador to Nigeria; Aly Abdel Aal-Sayed Ahmed, speaker of the Egyptian House of representative, and Vice President Yemi Osinbajo, during the visit of a delegation of Egyptian Parliamentarians to the Presidential Villa in Abuja, yesterday.

NAN

5 implications of big decline in T-bills trading activity Continued from page 1 as it continues in its quest to boost credit flow to the real sector of the Nigerian economy.

Based on the new directive which came amid several guidelines issued recently by the apex bank, the OMO market would only be accessible to deposit money banks (DMBs) and foreign investors going forward.

The move is part of efforts by the CBN to curb investment in high-yielding riskfree government securities which the apex bank says is hampering credit to the real sector and inhibiting economic growth.

The impact of the policy has been immediate. Secondary market trading in one

of the most vibrant and liquid asset classes in Nigeria’s capital market slowed to a trickle on Friday, October 25, as Treasury bills worth N43 billion were traded.

That’s down 90 percent from an average daily trade of N424 billion in September, according to data by trading platform, FMDQ. In the whole of September, Treasury bills worth a total of N8.49 trillion were traded in 20 trading days, according to FMDQ data.

Traders say activity has slumped due to the lack of natural counterparties in the market following the CBN’s directive limiting trading activity in OMO bills to foreign investors and banks.

That’s because the individual and local corporates who usually serve as counterparties are no longer able to access the primary or secondary market.

The CBN’s OMO restriction has some implications for investors and the economy.

One implication is lower borrowing costs for corporates and the Federal Government, as yields are likely to moderate in the near term.

Discount rates on benchmark T-bills declined by 4bps to 12.21 percent Monday.

Lower yields mean both corporates and the Federal Government can borrow (through debt securities) from local investors in the T-bills and bond markets as well as through commercial papers at cheaper rates.

A second implication is that the clear delineation of OMO from other money market instruments also allows the CBN to attract FPIs with higher rates (for currency

management) at a lower cost as the OMO sales are likely to reduce with the restriction placed on domestic non-bank investors.

Another possible implication of the restriction of key corporates, such as PFAs and insurance companies, from participation in OMO is that it is likely to free up excess investable cash for allocation to assets beyond fixed income alternatives.

Analysts at Lagosbased investment bank Cardinal Stone Partners see legroom for some flows into fundamentally strong equity names as treasury yields moderate.

“Our view is also but-

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Buhari travels again to lure investors, but his policies drive them away ISAAC ANYAOGU

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resident Buhari has once again travelled to the Kingdom of Saudi Arabia to attend the Economic Forum of the Future of Investment Initiative (FII) in Riyadh from October 29 -31, the fifth in two months, ostensibly to lure investments into an economy analysts blame his policies for deterring.

“Given the increased investor confidence in Nigeria’s economy, President Buhari will use the occasion to speak about the economic opportunities that abound in Nigeria,” Garba Shehu, one of the president’s spokespersons, said in a release.

But the bearish sentiments

of the stock market ridicule the suggestion about investor confidence.

The stock market, a key indicator of the economic situation in a country, continues to shed value. Nigerian equities market has declined for the fourth consecutive week with the Nigerian Stock Exchange (NSE) All-Share Index falling by 0.38 percent to close at 26,348.73. Even improved corporate earnings from banks have failed to lift market sentiments.

Emerging market research firm EFG Hermes said in a note last week that despite record low prices, local investors including pension funds are staying away and foreign investors are cautious. It said this trend is driven by poor

velopment (TICAD7). On September 16, he left Abuja for New York, United States, to participate in the 74th Session of the United Nations General Assembly (UNGA74). Next he travelled to South Africa for a state visit and the 9th meeting of the Bi-National Commission between both countries and only returned from a three-day Russia-Africa Summit in Sochi, Russia, on October 26.

Buhari has returned from these trips with a list of commitments which are yet to be seen if they will materialise.

Buhari’s foreign trips have been raising furore at home and unease among his aides since 2015 when he spent

economic policies.

“Despite this (cheaper stock), policy uncertainty makes it very difficult (for the stock market) to become bullish,” said analysts at EFG Hermes.

“The latest government moves include the impossible-to-enforce closure of land borders to all trade and the CBN’s increase in minimum LDRs to 65 percent (effective end-2019). The latter policy may support earnings growth for stronger banks, but it is hard to reconcile policies that force private sector lending with those that severely restrict trade,” they said.

Buhari visited Japan from August 26-31 to attend the Seventh Tokyo International Conference on African De-

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Although that debt was settled, it was to return on October 18 when Airtel also put over 47 million subscribers of Glomobile network on disconnection notice if the debt owed it was not settled in 10 days. That deadline ended on Monday, October 28, without an official word from Glomobile as to whether it paid or not.

The sector regulator, the Nigerian Communications Commission (NCC), said it was compelled to support Airtel’s claim given that Glomobile was notified of the application for disconnection and was allowed to state its case.

“The Commission having examined the application and circumstances surrounding the indebtedness determined that the affected

operator does not have sufficient reason for non-payment of interconnect charges,” the regulator said.

If Glomobile has not settled, it risks leaving millions of subscribers partially disconnected and frustrated, and more subscribers may leave its platform in the next couple of weeks, which could lead to a loss in revenue. The telco, which used to be the second-largest GSM network in Nigeria in terms of subscriber base, was displaced in July by Airtel. Glomobile is yet to regain its position as Airtel even moved further up from its position in August.

The disconnection order could also set back its plans for mobile money in Nigeria.

The telco’s subsidiary, First Money, was one of the three recipients of the Central Bank of Nigeria’s ‘Approval in Principle’ for Payment Service Bank licence recently.

A source in Glomobile, however, told BusinessDay that the telco may have settled the debt before the deadline, and it may well be so as subscribers have yet to complain of disconnection.

In any case, when Glomobile finally confirms it has paid,

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CBN pegs minimum capital for operation of CPC, CIT at N500m Hope Moses-Ashike

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entral Bank of Nigeria (CBN) on Monday set the minimum capital for companies registered to operate both national Currency Processing Company (CPC) and Cash-In-Transit (CIT) at N4 billion, while companies registered to operate both regional CPC and CIT are to have a minimum capital of N2.5 billion.

A national CIT refers to a company registered to operate in all states of the federation, while a regional CIT operates within the states of one geopolitical zone.

According to the revised guidelines released by the CBN on Monday for the registration of CPC and CIT, a company registered to operate as a national CIT is to have a minimum capital of N1 billion or such other amount as may be prescribed by the CBN from time to time.

In the same vein, a company registered to operate as a regional CIT shall have a minimum capital of N500 million.

According to the revised guideline, a company registered to operate as a national CPC shall have a minimum capital of N3 billion or such other amount as may be prescribed by the CBN from time to time, be entitled to estab-

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lish offices in any state of the federation subject to approval by the CBN for the purpose of carrying out its operations, and be authorised to process cash in naira and foreign currencies to any part of Nigeria. A company registered to operate as a regional CPC shall have a minimum capital of N2 billion or such other amount as may be prescribed by the CBN from time to time.

Promoters shall be private companies and/or individuals with proven integrity and experience in currency sorting operations, financial services, currency processing systems, sales and maintenance (evidence and proficiency required).

In order to enhance the efficiency and cost-effectiveness of currency management, facilitate the generation of fit naira banknotes for payment, promote the use of shared facilities to drive down currency management cost, engender healthy competition among service providers and ensure product quality, integrity and standardisation in Nigeria, the CBN mandated all companies, including Deposit Money Banks, who are desirous of providing currency distribution and/or currency processing services in Nigeria, either for themselves or for other DMBs, to register with the CBN.

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Multinationals counterfeiting remains a challenge in Africa - Spoor & Fisher MIKE OCHONMA

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aul Ramara, a partner with Spoor & Fisher Law firm, says counterfeiting remains a significant challenge for multinational brands aiming to legitimately penetrate the African market, but expresses optimism that anti-counterfeit laws and measures are gaining traction in Africa.

He says African countries are particularly vulnerable to the sale of counterfeit goods because so much of the continent’s commercial activity takes place in unregulated markets.

Further, borders between coun-

tries can be breached, which leads to smuggling.

According to Ramara, counterfeiting reduces tax revenue and inhibits economic growth by deterring foreign direct investment and to attract foreign direct investment he noted intellectual property (IP) protection is one of the first elements that needs to be ensured.

“Selling counterfeit goods takes away the market share that should rightfully belong to the original manufacturer. This is harmful to not only the company who owns the IP but also consumers who are duped into buying poor quality knock-offs.

At times, it can be fatal,” Ramara stated.

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In many African countries, inadequate human resources result in IP protection not being properly enforced, even if adequate laws are in place.

Although counterfeit products, such as poorly made shoes and cheap cellphones cause frustration in the market, the damage caused by counterfeit pharmaceuticals is most worrying of all, added Ramara. It is estimated that such pharmaceuticals account for between 30 percent and 60 percent of the African pharmaceuticals market.

The International Chamber of Commerce’s Business Action to Stop Counterfeiting and Piracy has described Nigeria as the “gateway to the rest of Africa for counterfeit products,” with “no IP protection, no proven protection by judicial precedents and slow court proceedings.”

But Ramara pointed out in swift reaction that, this finding might be unduly harsh, as Nigeria does have several laws that can be applied against counterfeits. However, they are not only disparate but also time-consuming and cumbersome to enforce.

Nigerian authorities have recently been showing an interest in brand identification training at the ports of entry.

Spoor & Fisher has successfully conducted brand identification training with Nigerian customs officials on behalf of major multinational corporates.

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news

Stakeholders urge multinationals to ensure good representation of Nigerians on their boards Jumoke Akiyode-Lawanson

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ultinational corporations operating in Nigeria have been urged to ensure that there is a good representation of Nigerians on their board of directors. Making the request at a special media briefing addressed

by Omife I. Omife, president, Business Renaissance Group (BRG), a non-aligned, not for profit and non-government organisation, underscores the need for adherence to the tenets of brotherhood and corporate inclusion.

Omife notes that the nation’s recent corporate history is replete with some of the best-known and respected corporations that have operated within the shores of Nigeria for as long as 50 years, yet membership of their Boards is skewed in favour of non-Nigerians.

He observes that most of these notable multinationals have only recently, under compulsion, deemed it expedient to enlarge their Board of Directors to include Nigerians.

Omife commends the recent reconstitution of the board of directors of MTN Nigeria as a veritable example of how best to appreciate local human resource, applauding the appointment of Ernest Ndukwe, Omobola Johnson and Ifueko Okauru to the board of MTN Nigeria. These appointments, Omife observes, come on

the heels of the immediate past board headed by Pascal Dozie with the likes of Gbenga Oyebode, a corporate czar, and Tunde Folawiyo, an astute entrepreneur. All these, he avows, are coming in less than two decades of MTN operation in Nigeria.

“I applaud the inclusion of two outstanding Nigerian women Omobola Johnson and Ifueko Okauru into the MTN Nigeria board.

This inclusion demonstrates gender sensitivity in a most noble manner that is devoid of mere tokenism that stem from affirmative action. This is because the two Nigerian women, Johnson and Okauru, unarguably, rank among the brightest and most accomplished Nigerians,” he states.

Stakeholders at the event agree that international companies such as MTN, which started operating in Nigeria at a time the economy was somewhat unstable and return on investment was unsure, but have stood the test of time, and continue to contribute immensely to the growth and development of the nation affirms the company’s faith and trust in Nigeria and its citizens.

Furthermore, Omife rules out any possibility of conflict of interest in the appointments of these Nigerians on the boards of multinational companies, insisting that the appointment of distinguished Nigerians to the MTN Board, in no way, detracts from equity and fairness.

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NAMA tackles upper airspace communication Suleiman urges African writers to contribute to ending poverty challenge in South East corridor …as minister pledges to partner ATCOS on safe skies IFEOMA OKEKE

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ollowing the successful installation of the VSAT (Very Small Aperture Terminal) station at the Jos Airport and the integration of the VHF (very high frequency) into the network in the North East corridor, the Nigerian Airspace Management Agency (NAMA) will this week commence the installation of another VSAT station and VHF radio systems at the Akanu Ibiam International Airport, Enugu.

Fola Akinkuotu, managing director of NAMA, who revealed this at the 48th annual general meeting of the Nigerian Air Traffic Controllers’ Association (NATCA) held in Kano at the weekend, said the installation of these equipment would enhance upper airways communication along the South East corridor using 127.3MHz radio frequency.

Akinkuotu said the agency’s determination to totally eliminate blind spots from the upper airspace informed these recent deployments, saying, “We have seen improvement along the North East corridor that we tackled lately in Jos and we are determined to see that communication is 5/5 in the entire airspace.

“If you can communicate just once instead of five times, the person at the receiving end understands you and is happy just as you are happy. If we can get better radios with good clarity, it will lessen the burden and make the job easier for

both the air traffic controller and the pilot.”

He implored controllers to imbibe good work ethics and strive for professionalism, and urged them to support initiatives of the agency such as the implementation of sectorisation, which he said was a continuous process.

He also promised to address concerns raised by controllers bordering on work tools, staff training and welfare, among others.

In a live telephone conversation at the forum, Hadi Sirika, minister of aviation, who called in from Abuja, promised that the Buhari administration would continue to partner air traffic controllers and other relevant stakeholders to ensure safe skies for Nigeria.

Also in his remarks, Mathew Lawrence Pwajok, director of operations, itemised some of the achievements of the agency under his directorate to include sectorisation of Lagos Area Control operations into East and West sectors, reactivation of search and rescue operations, training of different categories of critical staff as well as licensing and rating of qualified air traffic controllers.

Earlier in his address, Abayomi Agoro, president of NATCA, drew attention to some of the problems affecting air traffic controllers, such as shortage of critical manpower, unavailability of special fund for ATC training, ageing communication facilities, delay in the approval of air traffic controllers’ new scheme of service, etc.

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EO of Sterling Bank plc, Abubakar Suleiman, has tasked African writers to write stories that would inspire Africa to be all it can be. He made the call during the welcome ceremony of the seventh edition of Ake Arts and Books Festival held at the Alliance Francaise in Lagos, with the theme “Black Bodies, Grey Matter.”

In his goodwill message to creatives drawn from across Africa and the Diaspora, Suleiman stressed the importance of storytelling, saying its outcome was the reason why people do the things they do, and the reason why they live the way they live.

The Sterling Bank helmsman advised African writers not to write stories to entertain people only but rather to write stories that create contexts that could lift Africans out of poverty to prosperity. Stories that would make Africa become all it can be.

He disagreed completely with the notion that works of art were what people do when they have done everything else or what they do when every other thing had failed.

“All that we know about ourselves and history are the works of artists, even the things that are backed by data. All that we do is to understand them in context and that context is the work of artists.

If you take away the context, the story would change completely,” he said.

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In her welcome address, the Director of Ake Arts and Books Festival, Lola Shoneyin, disclosed that the festival attracted more creatives - writers, filmmakers, poets, photographers, thinkers, actors, dancers and artistes - from more African countries than ever before.

Commending the festival’s headline sponsor, Sterling Bank, Shoneyin said, “I am very proud to say that Ake Arts and Book Festival is now one of the few festivals on the African continent that has an indigenous company as its main partner. Sterling Bank has taken the step of partnering with Ake Festival for the foreseeable future. This partnership gives me so much hope. I sincerely hope more players in the private sector follow their lead and start to support, develop and promote creativity and the arts on the African continent.”

The festival examined the physical, mental and violent acts that have and are been inflicted on black bodies, particularly those of women through conflict, colonialism, patriarchy, cultural practices and attitudes. Ake Arts and Book Festival explored the link between the mental and the physical as well as specific phenomena such as scarification, body image, tattoos, stereotyping, gender non-conformity and colourism as well as the mental health of people on the African continent.

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The giant next door (1) STRATEGY & POLICY

MA JOHNSON

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socio-political analyst once told me that he observes that most men and women either in government or in the world of business live reactively rather than proactively. Their lives, according to the analyst, are just above a series of reactions to the circumstances they are confronted with each day rather than a proactive life based on a vision of who they are and what they really want to achieve.

Most of them, he further stressed, do clearly have no real plan or strategy to make life conform to their dreams and their goals. They crave for a life of significance. Although, they want to leave a legacy behind after they have left office, yet most do not have the ability and sometimes the motivation to see beyond their present reality. A few have developed a vision for their lives, and perhaps, this explains why they just drift along each day.

If the vision of our policy decision makers is to make food available in quality and quantity to almost 200 million Nigerians, and provide jobs for the unemployed, how do they intend to go about it? Does the solution lie in the closure of our borders or not? Will Nigeria embark on backward integration or import substitution in order to enhance food security?

The closure of our borders has generated controversies in the past few weeks. Some people, including those

in government, have argued that the action is timely and that closure of our boarders would enhance food security.

Since the closure of our borders, fuel consumption has reduced by 8 million litres per day as widely reported in some newspapers.

While the Minister of Agriculture and Rural Development, Sabo Nanono, at a briefing to mark the 2019 World Food Day in Abuja says that there is no hunger in Nigeria. He asserts that Nigeria has attained self-sufficiency and would feed its neighbours with ease. The truth is that Nigeria has not attained selfsufficiency in food production. Most of the food items produced perish and do not get to the consumers because of poor infrastructure.

Besides, many Nigerians are hungry due to joblessness while most internally displaced persons do not have access to food. Millions of Nigerians are in need of humanitarian assistance while many are malnourished. Unless those in the government lessen the gravity of these challenges, Nigeria cannot feed her citizens and neighbours with ease.

Nigerians spend 60% more for a pot of Jollof rice than 3yrs ago – SBM… experts blame border closure, foresee bleak Christmas – BusinessDay October 17, 2019.

“Nigerians are spending 60 percent more on average for a family pot of Jollof rice than they did three years ago, according to the 2019 July Jollof Index

by SBM Intelligence, Nigeria’s leading geopolitical intelligence platform, and experts have blamed it on the partial closure of the borders.”

Today, we all know that Nigeria is the “poverty capital of the world”. If those in the government do not accept above report and views, the mere fact that Nigeria is the poverty capital of the world, goes to show that millions of Nigerians are hungry and unable to afford eating nutritious food three times daily. If Nigeria is unable to change its

current trajectory, it is predicted that “the country will be home to 110 million people living in extreme poverty by the year 2030.” So those in authority should lessen politics, control their emotions, and listen to voices of reason in order to formulate sound policies and implementation strategies that will enhance food security.

We know that food security is beyond closure of borders. Bearing in mind all our economic challenges, is this the right time to close our borders? Nigeriens and Beninese are complaining that the giant next door with a population of 200 million has closed its boarders in a globalised world. Benin Republic with a population of about 11 million, is alleged to have been the largest importer of rice from Thailand on a global scale, thus, fuelling smuggled rice through her boarders to Nigeria.

It is unbelievable that Benin Republic imports almost 2 million metric tonnes of rice in 2017, while China with more than a billion people imported about 1.2 metric tonnes in the same period.

So, who consumes the bulk of rice from the Republic of Benin? It is Nigeria-the largest market in Africa!

The Minister of Information, Lai Mohammed, had to explain why Nigeria’s boarders will remain closed. Hammed Ali, the Comptroller General, Nigeria Customs Service says “Nigeria’s borders will remain closed until the country and its neighbours agree on existing ECOWAS protocol on movement.” Ali explained that although the ECOWAS protocol permits free movement of people, security must be prioritised.

Hameed Ali, a retired colonel and former military police officer, declares that: “We want to protect our nation.

We want to make sure our people are protected. You must be alive and well to begin to ask for your rights. Your rights come when you are well and alive. Go and ask the people of Maiduguri when Boko Haram was harassing their lives.

‘

Many Nigerians are hungry due to joblessness while most internally displaced persons do not have access to food. Millions of Nigerians are in need of humanitarian assistance while many are malnourished.

Unless those in the government lessen the gravity of these challenges, Nigeria cannot feed her citizens and neighbours with ease

The only question was survival. There was no question of right. This time, Nigeria must survive first before we begin to ask for our rights.”

On border closure, the Immigration boss, Mohammed Babandede, added his voice as follows: Border closure not against ECOWAS, says immigration boss –Thisday 21 October 2019 “Comptroller General of the Nigeria Immigration Service (NIS), Mr. Mohammed Babandede, has said the partial closure of Nigeria’s border with neighbouring countries was not aimed at distorting relationships or economic activities of any member states of the Economic community of West African States (ECOWAS), but for national security and economic development of the Nigerian state. Babandede said the partial land, sea and air closure policy of the Nigerian government was not against the ECOWAS, but to ensure sanity in Nigeria especially in the areas of national security as peoples’ movements are controlled and........it would create employment opportunities as local productions are enhanced.”

According to him, “No country in the world would allow people and products to enter into its territory through any available routes and without valid travel documents.”

“Immigration has allowed through the approval of Mr President in order to ease the tension for the people that both our citizens and non-Nigerians can enter and leave Nigeria only through a recognised immigration control post and they cannot leave without a travel document,” explained Babandede.”

So, will border closure provide in Nigeria food security in a globalised world?

(To be continued) Johnson is an author and a retired naval engineer who has passion for African development and good governance

China in the new era: Greater opportunity for Nigeria and the world

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he 1st of October this year marks the 70th anniversary of the founding of the People’s Republic of China.

What path did China take? Where is China going? What are China’s goals in shaping the world? How will a developing China interact with the rest of the world?

In response to the above-mentioned questions and aiming to give the international community a better understanding of China’s development, the State Council Information Office of China recently published a white paper entitled “China and the World in the New Era”. The white paper systematically introduces China’s achievements, development path and directions over the past 70 years and deeply elaborated on China’s relations with the world.

Over the past seven decades, China has achieved great success. From 1952 to 2018, China’s industrial added value increased with an average annual growth rate of 11 percent.

China’s GDP increased with an average annual growth rate of 8.1 percent, and per capita GDP increased by 70 times at constant prices. China’s life expectancy has increased from 35 years in 1949 to 77 years in 2018, higher than the world’s average of 72 years. The living conditions of the Chinese people have been greatly improved.

China’s rural population living under the current poverty line decreased from 770 million in 1978 to 16.6 million in 2018. China has established a preliminary social security system covering the largest population in the world.

China was one of the poorest and most back-

ward countries in 1949, now it is the second largest economy in the world.

How has China scored remarkable accomplishments?

Firstly, the right path of development.

The choice of path is critical to the successful development of a country. China has found and will continue on the right path of socialism with Chinese characteristics, which is the ultimate reason for China’s success over the past 70 years. As a vast country with a nearly 1.4 billion population, China has no experience of modernisation to borrow from in history. It has to blaze its own path.

Secondly, the steadfast leadership. The Communist Party of China (CPC) is China’s core leadership, ruling the country for long and supported by the people. China’s success over the past 70 years boils down to the CPC’s leadership. Due to China’s vast territory and complicated national conditions, the governance of China is uniquely difficult. Without centralised, unified and firm leadership, China would have tended towards division and disintegration and caused widespread chaos beyond its own borders.

Thirdly, the industrious people. A large country with a nearly 1.4 billion population, China cannot achieve prosperity by asking for assistance and waiting. The only option is hard work. China relied on the solid and unremitting efforts of generations of Chinese people, relied on fulfilling its own responsibility in good times and in adversity, without exporting or shifting www.businessday.ng

problems elsewhere, and without seeking development by trading under coercion or exploiting other countries.

Over the past 70 years, China has defused many risks and overcome many challenges, and marched forward step after step. The Chinese nation has risen and become prosperous, China’s development path will look on brighter and brighter prospects as time moves on. China has entered a new era of development, which also constitutes even greater opportunity for Nigeria and the world.

China’s all-round opening up creates more opportunities. China pursues a mutually beneficial strategy of opening up and strives to open up wider. It is not only “the world’s factory”, but also a global market. With a population of nearly 1.4 billion and a middle-income group of 400 million, China has the largest market in the world. Its huge consumer demand provides an enormous market for countries all over the world. In the coming 15 years, China’s imports of goods and services are expected to exceed US$30 trillion and US$10 trillion. Owing to the initiative of Chinese President Xi Jinping, the China International Import Expo (CIIE) was launched in Shanghai in 2018, aiming at giving firm support to trade liberalisation and economic globalisation and actively opening the Chinese market to the world. The second session of CIIE will be held from 5th to 10th November in Shanghai. We welcome more and more Nigerian companies could utilise this channel to explore the Chinese market.

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ZHOU PINGJIAN China-initiated cooperative mechanisms boost dynamic growth. China has benefited from the international community for its development, and it has never forgotten to provide it with more and better public goods in return. The most convincing mechanism is the Belt and Road Initiative (BRI) which is an economic cooperation initiative proposed in 2013 by President Xi and is aiming at exploring new driving force for the world economy and building a new platform for world economic cooperation.

The BRI originated in China, but the opportunities and achievements belong to the whole world. We are pleased to see that in Africa, the African Union and 39 African countries have already signed documents on BRI cooperation with China. We stand ready to strengthen comprehensive cooperation with the African countries in jointly building the Belt and Road to share the win-win outcomes.

Note: the rest of this article continues in the online edition of Business Day @https:// businessday.ng Pingjian is the ambassador of China to Nigeria

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Tuesday 29 October 2019

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Democracy engenders growth RAFIQ RAJI

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recent paper by Acemoglu et al. in the top-rated Journal of Political Economy shows evidence that “Democracy does cause growth.” It does this by attracting more investment, facilitating increased educational attainment, spurring economic reforms, decreasing social restiveness and thus the security of lives and property, and the provision of public services. Democracy also engenders economic growth by making opportunities available to most of the people as opposed to a powerful few.

The study also finds that the beneficial effects of democracy on economic growth are robust across developing and advanced economies. In other words, they do not find that democracy weighs on the growth of developing economies; as argued by a substantial part of the extant literature. When a country adopts a democratic form of govern-

ment, the authors assert, its GDP per capita rises by at least 20 percent over the subsequent 30 years; albeit they find this effect to be easily attained in countries with already high levels of educational attainment.

The study also finds that democracy is contagious. When democracy takes hold in one country, its neighbours tend to become democratic as well. In other words, “the probability of a country transitioning to democracy or nondemocracy is strongly correlated with the same transition occurring in other countries in the same region.” Even so, countryspecific values are significant factors underpinning the evolution of the democratization process.

Reduce the cost of democracy There is a difference between an electoral democracy and a liberal democracy. The latter is ideal but the former is what is prevalent. Following from this, it could be argued that Africa cannot yet boast of a country where true democracy thrives. That is, one based on the classical Abraham Lincoln definition of “government of the people, by the people, and for the people.” Botswana is probably an exception, though. Little wonder, there are increasing complaints

in mostly poor African countries about the effectiveness and costs of “democracy”.

The so-called “dividends of democracy” remain elusive to many and elected officials are rarely held accountable. Besides, political aspiration is largely exclusionary due to high barriers to entry related to financial capacity. Political parties charge exorbitant fees for registration and other party-related financing.

Campaign costs are also prohibitive.

There are similarly huge expenses borne by politicians for dishing out patronage; which incidentally they tend to make sure to recoup with “interest” when they eventually win.

Bottomline, you could not aspire to political office if you were not rich or sponsored by the rich.

Additionally, parliaments that are supposed to check the potential excesses of executives, tend to end up being little more than rubber stamps; especially when controlled by ruling parties. Thus, there is an urgent need for political reforms in many poor African “democracies.” Good thing then that with information and communications technology (ICT) increasingly spurring more direct participation of the general public in governance matters, there is an

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The so-called “dividends of democracy” remain elusive to many and elected officials are rarely held accountable.

Besides, political aspiration is largely exclusionary due to high barriers to entry related to financial capacity.

Political parties charge exorbitant fees for registration and other party-related financing

opportunity to make the necessary changes with relative ease.

A people’s assembly I recommend a truly representative and egalitarian unicameral (“People’s Assembly”) legislature.

Firstly, aspiring legislators should all be independent candidates and not belong to a political party. That way, no party controls the legislature.

Registration and other formalities for election into the legislature should be free or for pittance and must be via the electoral body. Thus, no party primaries. And while independent candidates would still be qualified and eligible to participate in elections to executive positions (president, governor, premier, etc.), political parties would be the primary vehicle for such positions. If the rational assumption, in light of history thus far, that political parties are likely already captured by the rich elite is made, an egalitarian and truly representative People’s Assembly would be an ideal counterbalance.

“Dr Raji is chief economist at Macroafricaintel.

He was previously an Africa Economist at Standard Chartered Bank, London, UK. (Twitter: @ DrRafiqRaji)”

A short history of Nigeria’s debt habit

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he Minister of Finance, Budget and National Planning, Zainab Ahmed was at a World Bank meeting recently and she told journalists there that Nigeria is struggling to service debt and fund recurrent expenditure. She said this while trying to justify taking another trillion-naira loan that would take Nigeria’s debt, currently over N25 trillion, to something close to N27 trillion.

A brief look at our national debt history would show that when Nigeria first transitioned from military to civilian rule in 1979, General Olusegun Obasanjo left the country’s public foreign debt at $3.744 billion. By 1983, the Shagari administration had driven the debt to roughly $20 billion.

Obafemi Awolowo, a key opposition leader at the time, complained bitterly about this, and his exact words in response to the situation were, “We can all see at a glance, therefore, the depth to which Nigeria has sunk in the slough of foreign indebtedness as a result of the thoughtlessness of the Shagari and his team in their four years of office. His scramble for foreign loans from any source whatsoever and at any interest-rate up to Libor’s 20 percent per annum has no parallel anywhere except perhaps in a bankrupt country with a lazy and incompetent President like ours.”

These were Awolowo’s exact words on the ballooning debt profile of Nigeria in 1983 – thirty-six years ago.

Usually, countries keep track of their mistakes and try to avoid them. Nigeria however, appears to prefer to relive its worst mistakes and tragedies.

Obasanjo became president again in 1999 and worked out a partial write-off of Nigeria’s

international debt to the tune of $19 billion, leaving Nigeria with a somewhat clean slate as at when he finished his leadership stint in 2007. We slowly grew this debt profile, and then 2015 happened. Buhari became President and Nigeria has borrowed more in the last three years than it did in the 30 years before his term and took debt levels from N12 trillion to N25 trillion without visible impact.

Let’s get one thing clear, debt in itself is not a bad thing. Debt is a neutral concept which can become a negative when done with the wrong thinking and spirit. A key factor in debt is the debtor having a proper sense of responsibility towards the lender, and the group that the loan is being taken on behalf of. This sense of responsibility requires the investment of the loaned sum in ventures that guarantee returns on the investment.

Nigeria, however, appears to be in a dangerous situation where its debt-accumulation is led by people who have no real sense of responsibility towards the lender and the country they represent.

These loans have not been used to improve infrastructure and education that would improve our capacity to earn and repay creditors. Instead, these loans have been largely wasted on unproductive recurrent expenditure while the government has stayed true to actions, inactions, policies and legislation that stifle regional growth and market improvements. The decision to completely shut the land borders of the country ostensibly to combat smuggling is just one example of the baffling policies of the government. While smuggling definitely occurs across every country’s land borders and even through seaports, to deprive the

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overwhelming majority of legitimate business owners of access to regional markets in order to fight a few smugglers is akin to chasing rats while your house burns down.

We are taking trillions of naira in loans but also spending trillions each year to subsidise both petrol and an unrealistic foreign exchange rate that distorts the economy. The economic policies of the government have also managed to create an environment in which local businesses struggle while simultaneously deterring foreign investment from entering the country. The consistent fall in FDI inflows combined with capital flight also leads to the government having to borrow more and more money to fund its expenditure.

Ironically, at the same time as the government voices concerns about the cost of governance, these costs are not being restrained in any way. Nigeria, despite being a country with rampant extreme poverty, somehow also runs one of the most expensive parliaments in the world. Recent moves by the National Assembly to acquire ₦50 billion in new vehicles have been met with outrage, especially considering the continued foot-dragging of the government over the implementation of the new national minimum wage.

Poverty and insecurity are spiking, partly because of government policies while the government itself is increasingly hostile and parasitic to the productive sectors of the country that it should support to get adequate economic growth and development. Infrastructure is in a dire state and several interstate highways are now either unmotorable or hopelessly compromised by kidnappers and

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CHETA NWANZE

other bandits. The Abuja-Kaduna expressway which has become a kidnappers’ haven despite the efforts of the police to secure this vital corridor, is a case in point.

That awful Nigerian tendency to re-enact its worst tragedies has resurfaced in the person of the Minister for Agriculture, Muhammad Nanono, who said that Nigerians were not hungry and can do away with bread and eat local foods as breakfast. Nanono’s statement is an almost word for word replay of President Shagari’s minister, Umaru Dikko, who said that Nigerians hadn’t started eating from dustbins so they were not really hungry.

The same mixture of callousness, arrogance and disastrous incompetence that set Nigeria on its way to becoming the byword for astounding mediocrity it currently is with us again. The choice is ours whether we accept that, or deal with it in such a way that it never raises its head again.

Nwanze is Lead Partner and Head of Research at SBM Intelligence

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Tuesday 29 October 2019

BUSINESS DAY

EDITORIAL PUBLISHER/CEO

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

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GM, BUSINESS DEVELOPMENT (South) Ignatius Chukwu

To curb #Sex4Grades, pass the sexual harassment bill

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road and deep reforms of how universities in Nigeria teach and grade students are the needed response to the palpable outcry that followed the BBC expose of lecturers demanding sex for grades.

While commendable, the outcry should be backed by reforms that check lecturers’ power which comes with their duty to teach and grade.

Responding to the scandal would mean giving priority to the passage of the bill on sexual harassment in Nigerian universities.

The bill, introduced in 2016, was lately re-presented – it should extend to government, nongovernment, private and religious institutions too. Unsolicited sexual advances, verbal and nonverbal, physical and electronic are punishable offences.

Indirectly condoning such a behaviour is also an offence (suspicions or knowledge of such sexual harassment must be reported). The bill includes fines and jail terms for offenders, whether individuals

or institutions and mandates that universities set up a sexual harassment prohibition committee.

The bill should include also unsavoury jokes and language, it should totally outlaw romantic relationships between current students and academic or non-academic staff (where the relationship existed previously, it should be disclosed), it should limit frequent interaction between staff and students as well as prevent university-related meetings off-campus. We recommend, in addition, that universities give programme or faculty directors (managed, preferably, by a senior non-academic staff) more powers other than administrative oversight.

Sexual assault of students is systemic on our campuses; generations of graduates have been victims of this despicable behaviour. It is unwise to rely on the ethics or prohibition committees of each university.

The current practice of allowing universities adjudicate cases of predatory lecturers sexually exploiting students is so hopelessly unreliable; it is a charade.

A jury consisting of active felons

will always find ways around the law.

Unfortunately, the Academic Staff Union of Universities (ASUU) has morphed into a coterie of wage-increase agitator, with all the finesse of motor park touts, their fierce opposition against the sexual harassment bill means they have lost the credibility to speak on the issue.

In some private Nigerian universities, programme or faculty directors oversee the quality of delivery, attend to academic and non-academic issues, and handle students’ complaints. They also audit the lectures and, every session, get feedback from students through anonymous surveys.

For instance, when a student demands a remark, it is the director who organises for an external examiner.

The separation of roles among those who manage, teach and administer the professional exams is a major reason why professional examinations are trusted. These changes are better introduced by the National Universities Commission (NUC).

The NUC has charged vice

chancellors to check the abuse of students but we think it should have a stronger policy against the practice and hold institutions accountable. It reserves the right to determine the type and content of courses taught, it should now ensure that those who teach are not predators.

At the root of the rot in Nigeria is the lack of checks and balances that work; no one is answerable to anyone. Lawlessness prevails in a wild, wild west of anyhowness. We see the consequence in building collapses, in doctors who rape their patients, in clerics who violate minors, in graduate teachers who fail aptitude tests for five-year-olds, in accounting graduates unable to prepare a trial balance.

Since we will always have lecturers who can’t keep it in their pants, we must make our campuses inhospitable for their disgraceful proclivities.

A higher institution is a place of learning and the only ‘cold rooms’ allowed should be for chilling drinks. Let’s send a strong message to these degenerate lecturers; power comes with responsibility and must be accounted for.

HEAD, HUMAN RESOURCES Adeola Obisesan

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Tuesday 29 October 2019

BUSINESS DAY

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To whom much is given: Accountability in public life (2) THE REFORMER

JOE ABAH

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ivil society has a very important role to play in ensuring accountability on behalf of the people.

First of all, it has the responsibility to deepen its own knowledge and understanding of the way government works.

Secondly, it has the responsibility to demand explanations and answers from government officials on behalf of the people.

Civil society organisations do this best when they have been able to develop a reputation for thoroughly professionalism and rigour. Tools such as citizen scorecards have been very effective in focusing the minds of public servants that public service is about the service to the public, not just service to the public servant, which tends to be uppermost in the minds of many public servants. The debate in the public service tends to be about “our pay”, “our training” and “our promotion”, not often enough about the wellbeing and convenience of the public.

Many civil society organisations have used the FOI Act to very good effect as an accountability mechanism.

As Nigerian civil society organisations continue to mature and deepen the collaboration with each other, leveraging the areas of strength of each organisation to the benefit of others, their ability to demand and receive answers is improving. The co-creation of the OGP National Action Plan by government

and civil society is certainly a step in the right direction. Joint monitoring of progress towards the lofty ambitions of that plan is perhaps even more important.

The media similarly has a role to play in demanding accountability on behalf of the people. The media has the responsibility to raise awareness about issues, demand answers, raise and praise and name and shame. It has the responsibility to wield its immense powers with knowledge and professionalism, putting national interest first at all times. Press freedom is a key element of Freedom of Speech, one of the two key freedoms I had pointed out that we must guard jealously.

It is not immediately clear how well the media uses the FOI Act in its work.

It seems to rely more on press releases issues by government officials, and investigative journalism does not appear to be common, except for some online media platforms. It is my view that the media should make more use of the FOI Act in its work and should also help to apply pressure on government to comply with the provisions of the Act. For instance, the performance of the National Assembly on FOI requests should be under constant scrutiny by the media, since it was the National Assembly that passed the law and it is a public institution under the Act. Government’s track record of response to FOI requests has been poor.

Year-on-year, many public service organisations fail or even blatantly refuse to respond to FOI requests. There do not seem to be any administrative sanctions for an organisation that fails or refuses to provide information.

Although the law requires all public institutions to make annual returns to the Attorney General of the Federation, there are no sanctions for failing or refusing to do so. Similarly, when the Attorney General submits his report

to the National Assembly, the report seems to enter a black hole.

The National Assembly often doesn’t exercise its accountability powers by demanding an explanation from nonresponsive public organisations as to why they did not respond to an FOI request, or why they did not file their returns to the Attorney General, nor does it compel those nonresponsive organisations to appear before it to explain their recalcitrance.

Therefore, the only remedy available to ordinary members of the public and civil society organisations seems to be to go to court. Unfortunately, the court system in Nigeria is slow, expensive and daunting for the average Nigerian. Many simply cannot afford the money or the time required to pursue FOI requests through the courts.

Consequently, this constrains one of the two fundamental rights that I said we must fight to protect in our quest for accountability: the freedom to demand information and explanation from the people we elect or appoint.

Some progress has been made since the fuller implementation of the FOI Act was made a commitment in Nigeria’s Open Government Partnership National Action Plan. In this regard, I must commend the efforts of the Federal Ministry of Justice in the mediation role that it has started to play between government organisations and citizens that demand information from government. Of course, the fact that a mediation role is necessary when there is a law that mandates disclosure is indicative of the size of the problem.

A few organisations, such as the Bureau of Public Service Reforms (BPSR) and the Nigeria Extractive Industries Transparency Initiative (NEITI), have been practicing proactive disclosure.

However, it is my opinion that the FOI Act should be amended to provide

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Therefore, the only remedy available to ordinary members of the public and civil society organisations seems to be to go to court.

Unfortunately, the court system in Nigeria is slow, expensive and daunting for the average Nigerian. Many simply cannot afford the money or the time required to pursue FOI requests through the courts

some administrative sanctions for non-compliance with its provisions.

For instance, the Public Procurement Act, 2007 says that the Bureau of Public Procurement can recommend the removal of a Chief Executive that fails to comply with the Act or recommend investigation of any perceived infraction by the anticorruption bodies such as EFCC. Therefore, Chief Executives tend to jump when they get a letter from the BPP that reminds them of those provisions of the Public Procurement Act. The FOI Act should be amended to include similar provisions, if it is to be taken seriously by government officials.

Increasingly, individual citizens are taking advantage of social media to demand accountability. Similarly, many government organisations now have a presence on social media, with some being more responsive than others. For the 2017 budget, the Bureau of Public Service Reforms, the National Bureau of Statistics (NBS) and the Nigeria Extractive Industries Transparency Initiative defended their budget proposals online before members of the public before even defending them before the National Assembly. This is an example of real transparency and accountability in action. I am aware that the Presidential Office of Digital Engagement is making efforts to ensure that many more government organisations are available to answer questions online to the public.

This is important for building the confidence of citizens in the government.

In the concluding part of this paper, we will look at the roles of politicians and public servants in ensuring accountability.

(To be continued).

Dr Abah is a development practitioner and the immediate past Director-General of the Bureau of Public Service Reforms.

The mystery of China’s third-quarter growth: Resilience or Gloom?

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espite trade wars and geopolitics, Chinese economic growth shows resilience. So why is there a deep gap between the third-quarter data and gloomy international headlines?

After the release of third-quarter data, The Wall Street Journal headline sounded a warning: “China’s economic growth slowest in decades.” CNN seconded: “China’s economic growth drops to lowest level since 1992.”

Reuters extended the timeline: “China’s GDP growth grinds to near 30-year low as tariffs hit production.”

The fallacy in these headlines is that they mistake business cycles for secular trends and vice versa. When countries industrialise, they enjoy relatively high growth. After industrialisation, growth rates decelerate. China is no exception.

In reality, much of recent quarterly data in China and other major economies has been penalised for the same reason – the USlaunched trade wars and geopolitics, which foster diminished global economic prospects.

Only 0.1% behind quarterly expectations In secular terms, China’s economic growth has been gradually decelerating since the early 2010s, as it should after years of high-growth industrialisation. Yet, per capita incomes will almost double in the ongoing decade. In other words, economic growth is decelerating, but living standards continue to rise.

That’s very different from major advanced economies in which economic prospects continue to stagnate, in both secular and cyclical terms.

In the United States, the living standards of middle-class and working people have lingered since the 1980s contributing to steep income polarisation. In the eurozone, polari-

sation is not as bad yet, but it is deepening. In contrast, China’s middle-income groups continue to expand.

In terms of cyclical data, China’s economic growth slowed to 6.0 percent from 6.2 percent in the second quarter. But seriously, how much did the actual result differ from the expected one? Analysts polled by Reuters had forecast GDP to grow 6.1 percent in the JulySeptember quarter from a year earlier. So, the difference was a mere 0.1 percent.

So why the hullabaloo? Such a slight deviation does not warrant panicky headlines. Nor do such reports provide appropriate guidance to US investors.

Unlike the media, institutional investors see economic resilience in China, even amid trade wars and geopolitical pressures. That’s why almost half of fixed income institutional investors outside China plan to increase their exposure to China-issued debt in the coming year, according to FinanceAsia.

Cyclical resilience, secular potential On the Chinese mainland, positive signs include growth in industrial production, which picked up in September, despite reduced export growth. And while months of trade wars have made consumers more cost-conscious, retail sales climbed to 7.8 percent, thanks to state council’s slate of policy supports. The latter are warranted because wage growth remains restrained.

Property prices have stayed relatively strong, which has left a substantial burden on households’ shoulders. Since household debt to disposable income climbed to nearly 140 percent in 2018, household spending will be more cautious, as evidenced by lingering car sales. Yet, the big picture is more nuanced. For

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instance, education and medical expenditures remain solid.

Indeed, China’s secular potential remains strong. The growth rate is still three-to-four times faster than in major advanced economies. The rebalancing of the Chinese economy toward innovation and consumption remains on track. And while the contribution of investment rose to 19.8 percent of the GDP, that of consumption climbed to 60.5 percent.

The International Monetary Fund has projected China’s GDP growth to slow to 5.8 percent by 2020. That scenario presumes weakened consumption, coupled with cautious private investment and shrinking exports. But the final figure may be more likely to hover around 5.8-6.2 percent in 2020, depending on the severity of the headwinds in trade – which will result in further fiscal and monetary accommodation and thus slower deleveraging.

It is not the policy the Chinese authorities would normally prefer, but we do not live in normal times.

Policy mistakes and global uncertainty When the Trump administration adopted a protectionist trade policy some two years ago, it not only committed the worst US policy mistake in the post-war era but also undermined the nascent global recovery.

Before the US launched the trade war against China, its annual GDP growth rate peaked at 3.2 percent in mid-2018. Now it has almost halved to 1.8 percent. As for the eurozone, after a peak at 3 percent in January 2018, its growth has tumbled to about 1 percent; even before Germany’s economic uncertainties over Brexit. In Japan, too, growth has plunged to below 1 percent after climbing to 2.4 percent in early 2018.

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In 2017, global economic growth was as high as 3.8 percent. Given the right policies, it might have exceeded 4 percent in 2018 and this year. Instead, thanks to US trade protectionism and geopolitical friction, global integration has stalled. World trade is at pre-2008 levels, and the same goes for world investment. As migration flows have plunged, the number of globally displaced exceeds 71 million;15 million more than at the end of World War II. If misguided policies are permitted to prevail, these adverse trends are likely to further intensify, compounded by potential impeachment divisions in the US, recessionary landscape in the eurozone and stagnation in Japan.

Guided by US policy mistakes, the global economy is now amid a “synchronised slowdown,” as the IMF has warned. But there is much worse ahead, if these mistakes are permitted to prevail.

Dr Steinbock is the founder of Difference Group and has served at the India, China and America Institute (US), Shanghai Institute for International Studies (China) and the EU Centre (Singapore). For more, see https://www.differencegroup.net/ The original version was released by China Daily, China’s leading English-language daily, on October 25, 2019

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Tuesday 29 October 2019

BUSINESS DAY

Media business

Stakeholders list how Nigeria can achieve exponential development …List focus on Agric, knowledge building, funding university system through tax plan and protection of property right Daniel Obi

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ost countries in Africa, including Nigeria are struggling to catch up with fast paced development in the rest of the world. This has been daunting with increase in poverty level in spite of the availability of the elements that can trigger exponential growth in Nigeria.

The quest therefore to unlock the potentials, deal with poor enabling environment and achieve exponential development necessitated the gathering of best minds recently under the auspices of Federal University of Technology, Owerri (FUTO) Alumni Biennial Lecture who cited working models, processes, systems and frameworks that are also necessary to ramp up Nigeria’s economy.

Leading the discussion, Ndubuisi Ekekwe, an alumnus of FUTO and Chairman of Famisco Group was of strong opinion that for Nigeria to experience exponential economic system, it must be a nation that creates knowledge for national development.

To build capabilities, competencies and invest in R&D for the future, Ekekwe suggested a $10 billion yearly for Nigerian university system but said this money does not necessarily have to be provided by government. Citing examples of other countries, especially USA, he advocated a review of Nigeria’s tax

code which will allow individuals to enjoy tax break for donating money to universities for knowledge building and R&D. “In America and Western Europe, there is clever tax system that stimulates rich people to give money to schools because the more money they give; they are offsetting their tax obligation in other places. Nigeria does not have that system because when a rich man donates money to school, he is Father Christmas.

If there is such tax policy, people will inject capital into university

system which will make universities competitive”.

Ekekwe who specialised in Microelectronics and Medical Robotics Engineering also underscored protection of intellectual property as a tool to achieve exponential economic growth. “In an economy where there is rule of law and respect for intellectual property, innovators will be encouraged to innovate more, commercialise and benefit from them” He said people want to build things and profit from them but

L-R: Steve Babaeko, chairman, Lagos Advertising and Ideas Festival (LAIF) Management Board; Temitope Jemerigbe, vice chairman of the LAIF Management Board; Bolaji Alausa, member LAIF Management Board; and Jenkins Alumona, publicity secretary, Association of Advertising Agencies of Nigeria (AAAN), at a media roundtable on 2019 LAIF awards in Lagos on Friday.

Global industry experts converge on Lagos to unlock multi-billion naira potentials in Cold Chain sector Daniel Obi

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lobal industry experts will converge on Lagos next week to search for keys and strategies to ‘unlock practical cold chain solutions in Africa’. This is coming as government seeks private sector collaboration and possible solutions to release the lever for the stimulation of the Nigerian economy.

Poor development of cold chain sector, according to experts is costing Nigeria estimated N9 billion post-harvest annual losses of perishable foods. It also has its effects in other sectors such as poor preservation of pharmaceutical products and its consequences.

The experts who are gathering under the auspices of The Organisation of Technology Advancement for Cold Chain in West Africa, OTACCWA, for the second West Africa Cold Chain summit and exhibition will engage various sectors, including the financial, public, manufacturing and agriculture sectors for development of the Cold

they will stop to innovate when they don’t have confidence that the legal system will protect their innovations. “The propensity that someone can invest all his resources for an idea and somebody else steals it yet nothing happens to the pirate does not encourage the innovator to do great things” On poverty reduction, Ekekwe, a professor who writes in the Harvard Business Review said Nigeria needs to focus on agriculture. If 65% of people that work in Nigeria earn their income through agriculture

Chain industry to save the country huge losses encountered due to the absence of active Cold Chain sector.

The forum is expected to attract more than 1,500 visitors, 30 exhibitors and 20 speakers including Anurag Agarwal from India who is CEO and Co-founder, New Leaf Dynamic Technology P. Limited. He is said to have 25 years of experience in Cold Chain industry. Other speakers include Neal De Bear from South Africa; Tony Tiyou from UK and other speakers from Nigeria.

Augustine Okoruwa, President of OTACCWA said the forum is structured to promote and facilitate the development of the Cold Chain system in West Africa. “OTACCWA has recognised the importance of an active and dynamic cold chain storage system in the perishable nutritious food supply chain as a means to significantly reduce post-harvest losses of nutritious but perishable food, fresh fruits, vegetable, meat and healthcare products” In his view, Tunde Okoya, the vice president of the organisation and local organising committee www.businessday.ng

chairman of the forum emphasised the timeliness of the summit as Nigeria is moving towards massive production of dairy foods as backed by the recent government policies through CBN. “Without a proper and well-established Cold Chain system from the farm gate to the market, reproduction into other products and eventual consumption or export, the nation will not be able to scale, as over 90% of dairy production process is depended on cold chain”, he said.

“Milk is highly perishable and it could be pasteurized to extend shelflife but it still needs to be preserved before any other processing is done.

Hence the need to keep it in a cold temperature in order to prevent it from going bad before it is processed”,he told BusinessDay recently.

It is said that despite remarkable progress in food production in the country, successive governments had not adequately identified and addressed the challenge of postharvest value chain and the importance of functional cold chain for agricultural development.

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and if they double their earning power by improving their yield, then poverty level estimated to be over 45 % of Nigeria’s 198 million population will be reduced by 37%, he said.

Ekekwe showed how China and USA that once had flat GDP growth over long period of time leveraged knowledge, technology; focus on agriculture and attention to education to ramp up their GDPs. Also speaking, the chairman of the occasion, Henry Macauley, immediate past minister of Energy for Sierra Leone and former Sierra Leone High Commissioner to Nigeria said Nigeria is right now positioned to take advantage of its population and all the resources it has not only mineral but human resources which is huge.

In his view, National President of FUTO Alumni Association, Ndubuisi Chijioke said development deficit in most sectors is monumental that a progressive development will not get the country out of the quagmire except exponential development.

In his speech, VC of FUTO, Francis Eze said the topic of the lecture was apt as markets redouble growth through innovative and productive thinking. “As Nigeria’s population grows, there is the need to fast track technologies, innovations on how we grow crops, add value and invent technologies to fight hunger” The lecture was sixth in the series and Collins Opara, Chairman Lagos chapter of FUTO said the objective of the programmes is to create an integrated and economic development approach.

IDL stimulates trade partners with gifts

I

n a bid to appreciate trade partners and sustain loyalty, Intercontinental Distillers Limited (IDL) held its annual distributors awards in Lagos recently where it rewarded them and also used the occasion to relaunch its alcopop Brand Teezers.

The Head of Sales, Hope Gbagi, in a statement said that over N325 m was given out as rewards to the distributors. Hope also added that Intercontinental Distillers Limited will fly 13 of its top distributors and their spouses to Dubai as a way of showing further gratitude for the hard work, they put in the business in the year 2018 Patrick Anegbe; Managing Director of IDL appealed to the Federal Government to review downward, excise duties for Wines and Spirits.

He also lamented the bad infrastructure, especially roads linking major cities. He said the current state of the roads has become a hindrance in the distribution of products and goods across the nation.

Yemisi Adewusi; MD of YTTT Distributions from the Lagos region emerged the overall winner with @Businessdayng

Divine Chinoz Ltd from Aba the runner up. Both distributors went home with over N8 million each in cash reward and a brand a new 14-seater bus. Many other distributors went home with various cash gifts and prizes which included LED TV Screens Refrigerators.

The highlight of the distributors award ceremony was the unveiling of the new Teezers sparkling cocktail.

Head of Marketing, Intercontinental Distillers Limited, Mobolaji Alalade said that after rigorous research and careful consideration the dynamics of this generation, Teezers Sparkling Cocktail has been relaunched in two exciting variants Lime/Lemon and Apple. He added that it came in a contemporary and youthful packaging which offers consumers excitement on the go and has assured them it will be the Master of Fun. The Distributors lauded the innovativeness of IDL which was evident in the new Brand Presentation, saying the relaunched Teezers was set to push the boundaries in the market.

Tuesday 29 October 2019

BUSINESS DAY

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Branding Indomie Heroes Award initiative: Education funding, inspiring Nigerian children to greater heights In 2008, a CSR initiative tagged Indomie Independent Day Award; IIDA emerged from the stable of Dufil Prima Foods to reward bravery and innovative children. Since then, this initiative has assumed national perspective. Daniel Obi looks at the impact of this social responsibility and how Ministries of Education and Science and Technology can key into this course to assist in advancing the children’s dream.

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nthony Lawrence is a 14-year old boy from Umuokpara Dibia, Okohia, Isiala Mbano Local Government area of Imo State. He is a Junior Secondary School (J.S.S.3) pupil of Osu Technical College Okohia, Isiala Mbano. The Father is a farmer while the mother is a private school teacher. From the lad’s restless drive and instinct, he constructed a functioning prototype police patrol van, employing electronic components salvaged from waste bin, carton boxes and glue.

“Manufacturing of the van started in my dream. I saw the construction of the van in my dream and when I woke up, I started assembling the materials for the same car. I will go to dustbin and pick necessary materials. I will ask my dad for money to buy other things. This is how I made the van.

I control the van to move front and back with remote made by me”.

People around Anthony, including his relatives acknowledge his ingenuity but the secluded corner of the country he is residing with his parents may have assisted to hide him from exposure.

However, Indomie team search for the annual Independent Day Award for heroic children around the country located Anthony in his bucolic village. The distinguished jury for the award found Anthony’s innovation as deserving enough for the award. The young lad received N1m from Prima Dufil Foods, maker of Indomie in the Intellectual bravery category of the company’s 2019 CSR Indomie Independence Day Awards (IIDA) initiative to encourage his education and further his career. Anthony wants to be an engineer.

“I am begging more individuals, corporate and government to assist me to take my dream further” Anthony Lawrence whose van has siren and other functions of police van and who was rewarded for Intellectual bravery told BusinessDay after the award in Lagos.

Other children that emerged heroic in the 2019 award were 13 year old Yahaya Zaki from Sokoto State, who risked his life entering into a Well of water to save a young girl who had slipped and fell inside.

He was rewarded N1 m in the Physical bravery category.

The third winner, Kanyeyachukwu Tagbo-Okeke is an autistic artist who helps other autistic kids by raising awareness about autism.

Kanye, a 9 year old who lives in Maitama, Abuja also won the sum of N1 m scholarship award in the social bravery category.

L-R: Kanye Tagbo-Okeke, 2019 Indomie Independence Day Awards Social Bravery Winner; Yayah Zaki, Physical Bravery Award Winner, and Anthony Lawrence, Intellectual Bravery Award Winner, at the 2019 Indomie Independence Day Awards celebration in Lagos.

Limited in verbal skills, Kanye was diagnosed with autism at three and a half years but was noticed to be exceptional in art. According to the mother, they noticed that Kanye started drawing on walls and any surface he could find; he was then subsequently enrolled in an art class. He was able to communicate with his painting as his emotions are reflected in his works.

Last year, he was given the Flame of Peace International award for outstanding work in art by the Arch-Duke and Arch-Duchess of Austria in Vienna, becoming the youngest awardee ever. He was also made a fellow – the youngest one ever – of the Association, because of his outstanding work.

In an event organized by his family in April, Kanye’s artworks were given out for auctions and most of the proceeds went to other kids who are on the autism spectrum but could not afford the needed therapy. His artworks also serve to increase awareness about autism.

Anthony, Yahaya and Kanyeyachukwu are among the over 40 Nigerian children from different socio - economic backgrounds across the six geo-political zones of Nigeria rewarded by Dufil Prima Foods in the last 12 years with various amounts for scholarships ranging from N750,000 to N1m each for acts of heroism.

It is commendable that Dufil, under its corporate social responsibility, has assisted to advance the career of the children with various amounts provided as some of the past winners have funded their education from the scholarship funds received from this award.

“We can therefore boldly say that www.businessday.ng

Dufil Prima Foods is playing its part in helping to build future leaders for Nigeria”, Chief Executive Officer, Tolaram Group West Africa, Pawan Sharma said at the award ceremony.

Sharma further said that the award is a reflection of the importance and belief of our company in the extraordinary qualities of the Nigerian child which must never be ignored but rather, celebrated.

“This is also in consonance with our core values and deep rooted belief that in every child lies the seed of greatness.

“Dufil Prima Foods believes that children need to be empowered.

IIDA is part of our efforts to empower our children and we have carried this out relentlessly for the past 12 years”. The award was introduced in 2008 to celebrate and reward acts of heroism in young children who have made notable sacrifices at great risk to themselves.

“Through the years, Dufil has enlarged its concentration areas on CSR, in an effort to continuously

“

Through the award, education is enhanced, “lives have been transformed, lives have been changed

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impact positively on the lives of our consumers, most importantly the children. The joy we derive in giving back to the society as a responsible corporate citizen brings our founding principles to life”, Pawan said.

Pawan Sharma said the initiative was established to fill the gap that exists in celebrating and rewarding the positive efforts, strong character and achievements of many young children who have exhibited various acts of courage and heroism at one time or the other within the country.

“This event is noteworthy as it is in consonance with the core values and deep rooted belief of our company and the brand (Indomie) that in every child lies what it takes to become great”.

According to Pawan, Dufil Prima Foods would always celebrate children who serve as change agents in their respective communities and beyond. “Apart from providing these children with an enthusiastic brand, Dufil believes that children need to be empowered. And this, we are doing as a brand”.

Reflecting on the award, General Manager Indomie, Gauruv Sharma said the company has since realised as a socially responsible organization that the spirit of true heroism does not only rest within the purview of adults who understand the full implication of their actions, but also in the heart of children, who forgo the consequences of their actions to save lives and redeem the future.

Today, the Indomie Hall of Fame are discovered children who have in different situations faced insurmountable challenges, stared @Businessdayng

at death in the face, fought against peer pressure, against lack, against fear, against disabilities and most importantly, conquered self.

Through the award, education is enhanced, “lives have been transformed, lives have been changed.

People who have never dreamt of leaving their localities are being flown to Lagos and publicly celebrated in the presence of the high and the mighty of the society which is an experience imprinted in the mind of these children’s memories for life”, Gauruv said.

This year’s award, like former ones, received hundreds of interesting entries from where the three winners emerged. Also, this year was unique as Stanbic IBTC and StarTimes partnered Indomie for the course. In attendance this year include wives of Ogun and Kwara state governors, respectively; former CBN Governor, Joseph Sanusi; Senator for the Lagos East constituency, Adeleke Olurunnimbe Mamora; the academia; royal fathers and captains of the industry.

In his keynote address, charismatic human rights advocate, Segun Awosanya in his speech titled, ‘Equipping the Nigerian child for innovation in a climate of accelerated global advancement’ expressed that “Children are the arrows in our quiver, they are the innovators, change makers, and world changers we shoot into the future to accomplish a task we may never be able to do ourselves.”

“They are the trees we plant today under which we may never sit,” he said.

While commending Indomie for lifting the spirit of Nigerian children and assisting to fund their education, Federal Government through the Ministries of Education and Science and Technology should strategically partner in this course to advance the children’s dream especially those with innovative ideas. China, Israel, Japan, Taiwan are good examples of countries that understand the importance of technical knowledge.

Their school curriculum has been tweaked in this direction.

Many Nigerian children have displayed creativity - ability to make new things or think up new ideas - but often times they lack motivation, encouragement to continue with their innovations.

Perhaps, Ministry of Science and Technology needs to create special scheme for such children, either bring the children with similar ideas together or find other ways to ensure that their innovations are not wasted.

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Tuesday 29October 2019

BUSINESS DAY

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Tuesday 29 October 2019

BUSINESS DAY

COMPANIES & MARKETS

17

COMPANY NEWS ANALYSIS INSIGHT

Banking

Big lenders 9-month profit crosses half a trillion mark, rebounds with 14% growth SEGUN ADAMS

N

igeria’s tierone banks made a little more than halfa-trillion Naira in the three quarters of 2019 ended September 30, as profit growth rebounded from a steady slow-down which started in 2016.

The tier-one banks which include First Bank of Nigeria Holdings (FBNH), United Bank for Africa (UBA), Guaranty Trust Bank (GTB), Access Bank, and Zenith Bank posted a combined profit of N521.916 billion which is 14 percent more than they made in the same period last year.

The performance means the big banks are growing profit in double-digit for the first time since Nigeria exited recession in 2017.

In 2016, combined profit grew by 18 percent from 17 percent in the previous year and fell to 17 percent in 2017, 9 percent in 2018 before rebounding to 14 percent on the back of impressive results from Access Bank, UBA, and First Bank.

Across the board, the big banks saw improvement in their net interest income which outperformed noninterest income.

Non-interest income of banks is mainly earned from fees and commissions from deposits and transactions, electronic banking, monthly account service charges, check and deposit slip fees, and so on.

Interest income, on the other hand, refers to revenue earned by a lender on interest from its loans to customers and banks, as well as on investment securities.

Net interest income is the difference between what it pays its depositors for keeping their fund in the

bank and what it earns by investing or loaning out the same funds.

In the 9 months, Access Bank, Nigeria’s biggest lender by asset and customer base, grew profit by 44.2 percent to N90.74 billion, as the recent merger with Diamond bank made it the fastest-growing tier-one bank in the review period.

The earning of the big bank was helped by a 71 percent growth in net interest income to N210.22 billion while non-interest

income grew 3.3 percent.

Zenith Bank, the secondbiggest lender by asset, grew its profit by 4.5 percent to N150.72 billion, the highest in the industry, on the back of a 21.8 percent growth in Non-interest income while interest income declined by 6.1 percent in the period.

GTB grew profit by 3.4 percent year-on-year in the nine months reported in 2019 to N146.99 billion, the second-biggest profit in the banking industry.

GTB which is Nigeria’s

biggest bank by market capitalisation saw its non-interest income cross a billion naira mark to grow by 2.1 percent over the N99.73 billion recorded in 2018 9M. The non-interest income also grew faster than interest income which rose 1.3 percent to N172.94 billion in the 9 months.

First Bank, the oldest among the big lenders, grew profit by 15.3 percent to N51.84 percent as noninterest income growth of 6 percent supported earnings despite a net income

decline of 4.6 percent.

In the third quarter, FBNH saw non-interest income rise by 47.9 percent.

UBA, pan-African bank, grew profit by 32.3 percent to N81.63 billion after it recorded double-digit growth in both net interest and non-interest income.

The big bank saw its net interest income rise by 5.5 percent to N158.914, although outpaced by 22.1 percent growth seen in noninterest income which hit N87.67 billion.

CONSUMER GOODS

With impressive result in three quarters, can Cadbury trump previous full-year performance?

SEGUN ADAMS

C

adbury Nigeria, a listed food and beverage maker of the Nigerian Stock Exchange (NSE), made a loss in the third quarter of 2019, but the company could grow its bottom-line more than it did in 2018 business year after combined profit in the nine months of 2019 grew more than 200 percent.

With a profit of N648 million in the three quarters of 2019 already reported, Cadbury has an

annualized profit of N864 million, which is about five percent more than its 2018 full-year profit.

However, things could get better or worse for the company which mitigated loss in the third quarter of 2019 on account of a tax credit, and had grown profit by 174 percent in 2018.

Momentum of Cadbury Nigeria, the local subsidiary of the United Kingdom firm, has slowed in the last three months to September after recording its best half-year performance in the last five years.

In the three quarters of 2019, Cadbury’s revenue grew by 7 percent to N28.91 billion, against faster revenue which rose by about 11 percent last year.

Revenue in 2019 has been driven by sales in Cadbury’s beverage business which grew by about 12 percent in the threequarter period, and contr ibuted 60 percent to revenue compared to 57 percent in the same period last year.

Confectionaries contributed approximately 29 percent to revenue and

grew faster by 16 percent while intermediate cocoa products, the smallest revenue segment, suffered a decline in sales.

In the nine months, Cadbury grew its gross profit, also referred to as top-line by 10.39 percent to N5.86 billion.

The performance meant that the food and beverage maker retained N20.3 out of every N100 sales as gross profit compared to N19.7 in the year before, as growth in sales outpaced increase in cost of sales.

Other income rose by 47

percent to N58.43 million while Cadbury saw selling and distribution expenses rise by 12 percent and administrative expenses rose marginally less than 1 percent.

Profit from operating activities, which is the profit from business operations before deduction of interest and taxes, rose 19.5 percent to N811.94 million.

Cadbury saw a net finance income of N113.81 million, from a loss of N426.44 million last year, on the back of a 14 percent

growth in finance income to N113.81 while there was no interest expense interest expense in the period, an improvement from half a billion incurred in the previous year.

Profit before tax was only N75 million shy of a billion naira mark after it grew by more-than-double of N252.79 million recorded last year.

Tax expenses saw a big increase bringing profit attributable to each unit of Cadbury share to N35 compared to N32 in the same period of 2018.

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

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Tuesday 29 October 2019

BUSINESS DAY

COMPANIES&MARKETS

Business Event

REAL ESTATE

Echostone partners Nigerian Police to develop 100,000 homes nationwide ENDURANCE OKAFOR

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o tackle the over 20 million housing deficit in Nigeria, Echostone Nigeria Limited, a property development firm, has signed a joint development agreement with the Nigerian Police to deliver 100,000 homes across the country.

The property development firm which has before now partnered with different levels of the government believes the agreement will impact the social, economic and even the financial status of the police officers.

“The project will be 1, 2 & 3 bedroom high-quality homes will be built to the highest quality standard and in a very beautiful environment with parks, gardens, schools, shops; every estate will be fully infrastructure with paved roads, drainages, water, power (on and off-grid) and sewage systems and treatments”, said Sammy Adigun, Director at Echostone.

Adigun said the parties to the agreement intend to help policemen and women to own their homes in their chosen location nationwide, a move that would motivate

police officers to be more committed.

The signing of the agreement held at the Police Headquarters in Abuja.

According to Echostone, local and international partnership will be mobilized to achieve the project seamlessly.

“Echostone is the only IFC EDGE (World Bank) Certified (Green) developer in Nigeria, which gives the Police huge confidence in the quality of homes that they will be getting from Echostone”, Founder/ CEO, Echostone International, Anthony Recchia has said.

It is, however, worthy of note that the partnership is the first of its kind in housing delivery in Nigeria.

According to the developer, all the ingredients required for a successful housing project delivery has been taken into one agreement.

For instance, Echostone is the developer, the Nigeria Police Property Development Company (NPPDC) will provide the land, while the Nigeria Police Force Mortgage Bank (NPFMB), stands as the Mortgage Facility and the Nigeria Police as the off-takers.

Th e d e ve l o p m e nt i s planned over the next 5

years, even as the project scope includes; 100,000 homes ; with 1000Km of roads and drainages, which will have other additional infrastructure of 1 billion litres of water supply and storage.

The project is also expected to have 1000 Megawatts of on and off-grid power supply and distribution; 50,000 direct jobs and 2.5 million indirect jobs.

“The homes will come with mortgages of up to 25 years with an interest rate of only 6 per cent per annum.

Some policemen who cannot qualify for a mortgage immediately will benefit from Rental housing program with an option to buy”, Managing Director, Police Mortgage Bank, Managing Director/CEO, Suleiman, Abubakar explained.

It would be recalled that Echostone already have an existing agreement with Family Homes Fund (FHF) and Nigerian Mortgage Refinancing Company (NMRC) to facilitate the development of hundreds of thousands of homes all over the country.

Echostone, also recently signed with the Federal Integrated Staff Housing Scheme an agreement to develop 15,000 homes.

L-R: Oyindade Adegite, group head, corporate communications and external affairs, GTBank Plc; Seyi Akinwunmi, chairman, Lagos State Football Association, and Biyibi Victor, chairman, LAFGHECA, at the press conference to announce the GTBank Masters Cup season 9 in Lagos.

Pic by Olawale Amoo

L-R: Benedict Oramah, president, African Export-Important Bank (AFREXIM); Urum Kalu Eke, group managing director, FBN Holdings Plc, and Ade Ayeyemi, group chief executive officer, Ecobank Transnational Incorporated (ETI), at the 2019 CIBN investiture in Lagos.

TECHNOLOGY

Cellulant’s Tingg set to re-launch to include wide array of services

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ellulant, Africa’s leading financial technology company has today announced the re-launch of its payment, agent and mobile banking app Tingg to an all-in-one, multi-functional consumer super app. The new Tingg is set to include a wide array of payment, commerce, and financial services in a single platform that will change the way customers interact with digital payment services in the continent.

Tingg is Cellulant’s solution to the fragmentation in the African digital payments space, particularly in cross-border payments. As a platform that supports payments, financial services and commerce at a local level, Tingg seeks to eliminate boundaries across channels and geographies. The all-in-one app will offer an integrated and efficient user experience adapted to local contexts, making it easier for customers and businesses to access digital financial services, send and accept

payments conveniently.

In Nigeria, with over 25,000 agents spread across 24 states, Tingg has the simple promise of bringing financial services closer to your doorstep.

Speaking on the relaunch, Lanre Adelanwa CMO Cellulant, Nigeria said, “It has always been part of our vision to unite Africa through payment, and we are excited as we start this new journey. Our experience with driving financial inclusion in the rural has equipped us to scale our proposition of taking not just financial services but commerce as well to everyone across the country through a single platform” Globally, Cellulant’s digital payment infrastructure connects consumers and businesses to over 120 banks, 40 mobile network operators in one comprehensive network which allows for interoperability that has eluded numerous players in the payments space.

This sets Tingg on the

path to accelerate Africa’s digital transformation by connecting consumers and businesses to a simple, fast and secure financial services experience.

“Currently, Africa moves more money on mobile phones than any other economy in the world and has a growing interest in digital financial solutions. Our team believes that this gives our region the unique opportunity to lead the way in developing robust financial platforms that can be customized to the needs in each country or locality while infusing cutting-edge technologies such as Blockchain, Artificial Intelligence, and Augmented Reality,” Bolaji Akinboro, cofounder, Cellulant.

Now available in Kenya, Ghana, Uganda, Tanzania, Mozambique, Zambia, and Botswana, Tingg becomes Cellulant’s new unifying brand identity that will deliver on the company’s promise of a robust single payments platform for Africa’s marketplace.

www.businessday.ng

L-R: Taiwo Okeowo, deputy managing director, FBNQuest Merchant Bank; Kudi Badmus, executive director, Eterna Plc; Mahmud Tukur, managing director/CEO, Eterna Plc; Alawusa Adewuyi, company secretary, FBNQuest Merchant Bank and Patrick Mgbenwelu, head, investment bank, FBNQuest Merchant Bank, at Eterna Plc Syndicated Corporate Facility Signing Ceremony which took place in Lagos.

Raghunath Mandava (l), Airtel Africa CEO, with Promoth Manghat, group CEO Finablr, during the contract signing.

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Tuesday 29 October 2019

BUSINESS DAY

19

Markets + Finance

‘Providing proprietary research, commentary, analysis and financial news coverage unmatched in today’s market. Published weekly, Markets & Finance provides all the key intelligence you need.’

First Bank remains passionate about supporting small businesses’ growth BALA AUGIE

U

ndoubtedly, First Bank of Nigeria Limited is passionate about helping small businesses grow on all fronts as it puts in measures to boost credit to Small and Medium Sized Enterprises (SMSEs), with a view to reviving the economy.

The lender recognises that the informal sector is pivotal to lifting millions of Nigeria out of the shackles of poverty, and the attainment of the desired economic growth.

To date, it has expended N170.30 billion as financial support to the SMEs, comprising the loans given to the segment irrespective of product type.

Over the last 3-7 years, the oldest financial institution in the country has supported 70703 small and micro businesses, while it continues to partner with government and big financial technology (Fintechs) companies to bring banking services closer to the people.

First Bank has been providing technology-enabled services and richer user experiences to petty traders. In turn, those firms can devote more time and energy to running their businesses.

SMEs as defined by the Central Bank of Nigeria (CBN) are economically independent companies with about 11 to 300 employees and an annual debit turnover of between N5 million to N500 million.

“First Bank has over the years, been at the forefront of supporting Businesses, especially the SMEs as we recognise that the SMEs are the engine of the economy,” said Gbenga Shobo, deputy managing director, First Bank of Nigeria Limited.

“We are committed to ensuring that we leave no stone unturned as we connect with them in their continued contribution to national development in terms of the employment opportunities they create as well as their contribution to the nation’s

GDP amongst many economic values.”

Following extensive research by the First Bank over the years, it identified these seven strategic pillars to be essential for sustainability and growth.

These include, access to infrastructure, access to talent, capacity building, policy and regulation, access to resources, access to market as well as access to finance.

Lack of stable power supply from the national grid has been a major stumbling block to small businesses and artisans, who make up the informal sectors and a lot of them have closed shop because they can’t continue to spend money on fuel to run generators.

St a keh o l d e rs say t h e opaqueness of the nature of the venture makes it difficult for banks to extend loans to them. Also, the large chunks of operators in the informal sector do not keep proper books of account, making it difficult to ascertain their cash flows.

Despite these monumental challenges, the industry is paramount to the country, as it is the largest employer of labour, but experts have unanimously agreed that a lot needs to be done by government and the private sector in reviving it.

According to the Ministry of Industry, Trade and Investment, over 37.07 million, small and medium-scale enterprises, MSMEs, account for more than 84 percent jobs in the country.

The ministry further stated that about 48.5 per cent of the gross domestic product (GDP), as well as about 7.27 percent of goods and services exported out of the country.

Of the total number, micro-enterprises account for the bulk of the MSMEs in Nigeria, with 36,994,578 enterprises, about 99.8 per cent, while small enterprises took 68,168, and medium enterprises 4,670.

To help provide access to affordable credit facility, and diversify the country’s economic base, create jobs and improve micro-economic stability, the Central Bank of Nigeria (CBN) has helped

Adeola Kazeem Adetuntan, managing director/CEO of FirstBank Nigeria Limited

120, 290 smallholder farmers in about three states under the Anchor Borrowers Programme launched by President Muhammadu Buhari, creating more than 500,000 jobs in the process.

Earlier the year, FirstBank and Microsoft had partnered to provide supporting technology solutions at a discounted rate to over 40 million SMEs. Shobo said that the aim of the launch encourage them to embrace technology in their operations.

Nigeria said that the target was to reach out to about 40 million SMEs and interested individuals.

“The SMEs can buy some of the Microsoft solutions at discounted rates, pay in naira as against the dollar, thereby removing the stress of exchange rate which is sometimes a challenge for the SMEs. They now have a portal where they can ask for advice on the products and some extra sales support we can also get Microsoft to give them,” he said.

“The SMEs segment is so important to the livelihood of many Nigerians, and we have seen that SMEs have the ability to grow.

One million new devices will be coming online in 2020 while 60 per cent of comput-

ing will be in public cloud in 2025 adding that 25 per cent of workers’ time is wasted by information overload, according to Microsoft.

To spur lending to the economy, the Apex bank has increased the Loans to Deposit Ratio (LDR) of Deposit Money Banks (DMBs) to 65 percent with a penalty of 150 percent of cash reserve ratio for defaulter, and the deadline to meeting the new regulation is December.

There are enormous responsible on the shoulders of Fintechs and banks to help pave the for small business to have access to the desired working capital that will in turn help them grow revenue, and, possibly, list the business on the capital market.

In developed markets, the gap between the capital SMEs need and the amount they actually received is equivalent to about 3 percent of GDP, according to Allianz. In developing markets, the gulf is 18 percent of GDP, which adds up to $4.8t in underfunding, according to the International Finance Corporation.

Africa continent has a huge to fill in the area of providing financing for micro businesses as they rely on traditional means to raising capital, this includes borrowing from friends, relatives, or

the traditional corporative.

The International Finance Corporation (IFC) estimates that 65 million firms, or 40 percent of formal micro, small and medium enterprises (MSMEs) in developing countries, have an unmet financing need of $5.2 trillion every year, which is equivalent to 1.4 times the current level of the global MSME lending.

In Nigeria, the Development Finance Project supports the establishment of the Development Bank of Nigeria (DBN), a wholesale development finance institution that will provide longterm financing and partial credit guarantees to eligible financial intermediaries for on-lending to MSMEs. The project also includes technical assistance to DBN and participating commercial banks in support of downscaling their operations to the underserved MSME segment.

As of May 2019, the Development Bank of Nigeria credit line to PFIs for on-lending to MSMEs has disbursed US$243.7 million, reaching nearly 50,000 end-borrowers, of which 70 percent were women, through 7 banks and 10 microfinance banks.

Experts are of the view that Nigerian banks are instrumental to diversifying the economy away from the reliance on oil by extending credit to business without encumbrances since crude oil price has been unstable in the last five years.

Nigerians GDP expanded by 1.94 percent in the second quarter of 2019, this compares with 2.10 percent as at the first quarter of (Q1), according to the latest report from the National Bureau of Statistics (NBS).

Unemployment rate at 23 percent is one of the highest in the world while the country overtook India as the world’s poverty capital.

About First Bank First Bank of Nigeria Limited (FirstBank) is the premier Bank in West Africa and the leading banking services solutions provider in Nigeria for 125 years. With some 15 million customer accounts,

BD MARKETS + FINANCE Analysts: BALA AUGIE www.businessday.ng

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@Businessdayng

FirstBank provides a comprehensive range of retail and corporate financial services with over 750 business locations. The Bank has international presence through its subsidiaries, FBN Bank (UK) Limited in London and Paris, FBNBank in the Republic of Congo, Ghana, The Gambia, Guinea, Sierra-Leone and Senegal, as well as a Representative Office in Beijing.

Since its establishment in 1894, FirstBank has consistently built relationships with customers focusing on the fundamentals of good corporate governance, strong liquidity, optimised risk management and leadership. Over the years, the Bank has led the financing of private investment in infrastructure development in the Nigerian economy by playing key roles in the Federal Government’s privatisation and commercialisation schemes. With its global reach, FirstBank provides prospective investors wishing to explore the vast business opportunities that are available in Nigeria, an internationally competitive world-class brand and a credible financial partner.

FirstBank has been named “Most Valuable Bank Brand in Nigeria” six times in a row (2011 – 2016) by the globally renowned “The Banker Magazine” of the Financial Times Group; “Best Retail Bank in Nigeria” for seven consecutive years (2011 – 2017) by the Asian Banker International Excellence in Retail Financial Services Awards and “Best Bank in Nigeria” by Global Finance for 15 years. Our brand purpose is to always put customers, partners and stakeholders at the heart of our business, even as we standardise customer experience and excellence in financial solutions across sub-Saharan Africa, in consonance with our brand vision “To be the partner of first choice in building your future”. Our brand promise is to always deliver the ultimate “gold standard” of value and excellence. This commitment is anchored on our inherent values of passion, partnership and people, to position You First in every respect.

20

Tuesday 29October 2019

BUSINESS DAY

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Tuesday 29 October 2019

BUSINESS DAY

Investments

ENERGY INTELLIGENCE

Market Insight Companies Commodity Tracker Policy

OIL

GAS

21

PETROCHEMICALS

POWER

NEWS

POLICY

third-quarter Seplat, Oando reduces debt burdens for more deals Eni’s production goes up, softens slumping earnings

BALA AUGUIE & DIPO OLADEHINDE

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igeria’s upstream oil and gas companies Seplat and Oando are paying down their debt and creating a healthy balance sheet, giving them the leeway to approach banks for more loans and finance acquisitions of more fields.

A company finances its operation withacombinationofdebt(moneyborrowed from financial institution) and equity (money contributed by shareholders). But rising obligation could be a burden as it undermines earnings, which makes it a risky investment.

A five year industry average equity multiplier of asset which is a financial leverage ratio that measures the proportion of company’s asset that is financed by shareholders’ equity of Seplat and Oando is 2.60 times in June 2019, an improvement from 30.30 times recorded in 2015.

A lower equity multiplier implies Seplat and Oando are not incurring excessive debt to finance its assets.

Instead, they issued stock to finance the purchase of assets they need to operate their business and improve their cash flows. It is calculated by dividing a company’s total asset value by total net equity.

If a business has a high ratio, it is more susceptible to pricing attacks by competitors, since it must maintain high prices in order to generate the cash flow to pay for its debt.

Analysts attribute am improved equity ratio to aggressive cut in capital expenditure spend and sale of assets to bolster cash flow, and that financial institutions will be reluctant

STEPHEN ONYEKWELU

T

extending credit to a highly indebted entity with poor credit history.

“Beyond raising more equities, the Eland’s deal for Seplat is an indication of how strong the company has bounced back while the market awaits Oando’s next move,” Charles Akinbobola, energy researcher at Sofidam Capital.

Seplat and Oando have a combined cashflow from operating activities of N90.80 billion as at June 2019, little wonder they have the cause to acquire companies, settle obligation, and pay dividend.

Further analysis of equity ratio shows Seplat’s ratio was 1.53 times as at June 2019, from an all-time high of 2.24 times in 2015 which implies Seplat has raised substantial equity to remain in business.

The total bearing loans and bor-

rowings in the books of Seplat fell by 21.45 percent to N136.87 billion as at June 2019, while finance cost dipped by 40 percent to N12.66 billion.

Recall, through a combination of cash and debt, Seplat Petroleum Development Plc announced a cash deal to acquire fellow London-listed independent exploration company Eland Oil & Gas for $484 million few days ago.

The acquisition of Eland oil and gas Exploration Company could raise Seplat’s oil production by 30 percent to about 64,000bpd by 2020 according to data from Bloomberg.

Similarly, Oando’s asset to equity ratio stood at 5.20 times in the period under review, from 120.60 times in 2015, when the external auditors raised concerns about its going concerns.

The major players in the upstream oil and gas industry were exposed to financial risk following the precipitous drop in crude oil price of mid 2014 that sent a shiver across the global market. A lot of them had borrowed money to acquire more fields before the volatile periods.

Seplat felt the pinch in 2016 when Forcados Terminal, which transports crude oil to pipelines – was vandalized by militants in the Niger Delta region while Oando had borrowed money to fund a $1.2 billion of Conoco Philip, a failed investment that exposed it to financial risk.

However, a rebound in crude oil price and a relative in the Niger Delta region was a boon to oil majors as cash flows began to improve, but they will have to drill more oil when all prices are high.

Nigeria’s Dangote Cement leverages GE technology to boost power supply, efficiency STEPHEN ONYEKWELU

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angote Cement Plc has joined a growing league of plants in Nigeria, deploying General Electric’s power technologies to ensure efficient and reliable power supply from own gas turbines, to fire industrial complexes as electricity distribution companies (Discos) fail to meet demand.

Indorama Eleme Petrochemicals Limited recently executed GE’s 6B Performance Improvement Package (PIP) upgrade on the first two out of six 6B gas tur-

bines at the petrochemical facility in Eleme, Rivers State.

Dangote’s deal with the American company will modernise seven GE LM6000PC Aeroderivative Gas Turbines and install its Asset Performance Management (APM) digital solution at Dangote Cement plants in Obajana and Ibese, Nigeria.

The contract includes service agreement extension for additional 50,000 operating hours for each of the seven GE LM6000PC Aeroderivative Gas Turbines; GE’s APM digital solution will help reduce unplanned downtime www.businessday.ng

and enhance operational performance. The total plant solutions will improve power supply efficiency and help extend the life of the cement plants. This is essential to continuous operations and the plants’ business strategy.

APM leverages cutting-edge technology to monitor the performance of power generation assets to reduce downtime, avoid turbines damage and remotely predict and resolve issues. APM sensors will be installed not only on the seven aero-derivative turbines, but also on their associated generators and gearboxes to predict and

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accurately diagnose issues with greater accuracy before they occur.

“Energy infrastructure is getting smarter, and digital solutions allow not only the shift from traditional calendar-based repairs to predictive maintenance, but they also increase power asset availability and reliability,” said Elisee Sezan, CEO for GE’s Gas Power businesses in sub–Saharan Africa.

Earlier this year, GE announced the first digital solutions order in sub-Saharan Africa for Azito in Ivory Coast improving power plant output, reliability, availability and operational performance. @Businessdayng

he Italian super oil major, Eni has said production jumped 6 percent to 1.89 million barrels of oil equivalent per day (boed) in the three months to September, boosted by its giant Zohr field in Egypt and new acreage in Mexico.

The Rome headquartered oil major has also brought on stream its Obiafu-41 gas and condensate discovery in Nigeria’s Niger, three weeks after well completion, a new development record the company.

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

Part of the domestic consumption of gas from this discovery entails processing it at the Enioperated Ob-Ob plant, and then sent to the 500 megawatts (MW) Kwale Okpai power plant, which is Nigeria’s first independent power plant. Upgrade for the Okpai plant is underway which will double its capacity to 1 gigawatt (GW) is currently underway.

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

The company expects its group’s global production to increase further in the final quarter and said it would now add 700 million boed of output this year from a previous estimate of 600 million boed.

Third-quarter adjusted net profit fell 44 percent to 776 million euros ($862 million), impacted by lower commodity prices and the loss of earnings from its former Eni Norge business, Reuters reported.

The result was just above an analyst consensus provided by the company of 0.77 billion euros.

Claudio Descalzi, chief executive officer at Eni said despite the 50 percent drop in gas prices in the third quarter and the fall in crude by $13 per barrel cash flow remained solid.

“Eni’s efficient portfolio can achieve breakeven at prices well below current difficult conditions,” he said.

“It’s looking rosy for Eni with all the upstream work that will drive growth next year,” said Jason Kenney, Santander oil analyst.

22

Tuesday 29 October 2019

BUSINESS DAY

ENERGY INTELLIGENCE Analysis

National Oil Companies are re-inventing themselves. Is the NNPC aware?

All over the world, national oil companies are acting as enablers of their economies, Nigeria’s state-owned oil corporation cannot afford to be complacent, writes ISAAC ANYAOGU.

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he dizzying pace of structural changes in the global oil market has seen state-owned oil companies morph into savvy investors driving the next wave of innovations in technology, pubic offers and oil trading. It doesn’t seem the message is reaching home.

In a world where shale producers ambush oil prices, where geopolitical risks starts with tweets by the US President or Yemeni rebels ramming bomb-laden drones into Saudi oil facilities, where climate change shames profits from fossil fuel and Asian consumers determine oil demand, the Nigerian National Petroleum Corporation (NNPC) cannot afford to just play the role of a national accountant, content to balance the books of government.

Na t i o na l O i l C o m p a n i e s (NOCs) control over 90 percent of the world’s proven oil reserves and over 70 percent of daily oil production. Since they are not just fringe players, their actions shape the global outlook of oil.

Founded 42 years ago, the NNPC is a behemoth superintending over 25 different business units spanning oil exploration, gas production, crude oil refining, marketing and shipping services. It runs several ventures including medical services, properties and renewables.

Therefore, it often finds itself using proceeds from a few profitable ventures compensating for its many loss-making entities. “ P ro g re s s i v e N O C s hav e moved beyond conventional wisdom and ditched clichés,” says Dave Ernsberger, global Head of Commodities Pricing at SP Platts, an energy intelligence platform on a report about NOC activities globally.

Saudi Aramco provides a fitting backdrop to illustrate the changing roles of NOCs. Saudi Aramco is the world’s most profitable company, the biggest oil producer and it is going public within the next two years. The oil nation is banking on the IPO to raise some $100billion to help usher in a new economy less dependent on oil.

With an oil production capacity of about 12 million bpd and posting a profit of $46.9 billion in the first half of 2019, Aramco is betting that institutional investors will rush to buy the 5 percent stake set to be sold by the Saudi government During campaigns for the last general elections, presidential

candidate of the People’s Democratic Party, Atiku Abubakar proposed privatising the NNPC as part of plans to make Nigeria a $1 trillion economy by 2023. This proposal was meant with derision but the NNPC has not fared any better managed by people with ideas that were progressive during the Neolithic age.

NOCs these days are as concerned about their stock price as they are about their rig counts.

Three Chinese National Oil companies - China National Petroleum Corporation (CNPC), China Petroleum & Chemical Corporation (SINOPEC) and China National Offshore Oil Corporation (CNOOC) development and production capital expenditure (Capex) in Africa’s upstream sector is projected to reach $15 billion by next year.

Egina commenced production at the end of 2018 and is expected to reach peak production of approximately 200,000 barrels of crude oil per day (bpd) in 2019 on the back of Chinese NOC investment. CNOOC, the biggest China’s offshore sector investor spent $2.3 billion in 2006 to acquire 45% stake in Nigeria’s OML 130 deepwater license, a lucrative contract that holds the Akpo and Egina fields.

The NNPC manages Nigeria’s oil on behalf of the state and Federal Government, yet it has been www.businessday.ng

unable to vie for divestment deals

by International Oil Companies (IOCs) in the sector. Its subsidiary, the Nigerian Petroleum Development Corporation (NDPC) is not in contention to buy Brazil’s Petrobras 16% stake in the Akpo field and 13% stake in the Agbami field. Yet, Lukoil, Russia’s second biggest national company is most likely to snap up the fields.

NNPC has no only been proven incompetent at managing fields allocated to its subsidiaries; it has also failed to pay its share of costs for the crude it is allocated leading to cash call areas. It has only settled about half of $5.1 billion cash call arrears. It has managed to run aground Nigeria’s refineries who according to its latest report posted over N90bn though it didn’t refine a barrel of oil.

Globally, as banks cut their paper trading in oil after the financial crises, NOCs have stepped in to provide liquidity. “Several had seen the opportunity to fill the space left behind by the banks, and take on positions through their own fully-fledged trading businesses. Often, they were doing this in joint ventures with majors or merchant traders; increasingly, though, they were doing it on their own,” Ernsberger said.

With bank exposure to the oil sector responsible for a significant proportion of bank’s poor balance sheets, the NNPC

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is unable to fill the role other NOCs play in providing liquidity to ensure investments into the sector does not stagnate. While its counterparts report profits, its losses are so significant, it reports meagre decrease in losses as surpluses.

Following the exit of IOCs in various Liquefied Natural Gas projects including Olokola and Brass projects have stalled. Nigeria’s state-owned oil firm, is incapable of mustering the financial capacity to see them through, it doesn’t even have enough credibility to convince investors to partner with it.

The current NNPC boss, Mele Kyari has is seeking to burnish the image of the corporation perceived as a cesspool of corruption. Unlike his predecessor, who was successful at looking successful, Kyari says he will enthrone transparency. Three months into his reign, the corporation is yet to have an independent audit of its books. It keeps publishing monthly operations statement that the corporation warns it cannot vouch for its accuracy.

Aramco has taken actions to become more open following its decision to list. In March this year, it published earnings figures, issued a bond prospectus the next month for its $12 billion international bond sale and its first independent audit of its oil @Businessdayng

reserves. In August, it held its first ever earnings call with analysts and published half year earnings.

According to Robert Perkins, SP Platts Senior Writer, EMEA Oil News, Middle Eastern and Asian NOCs are driving the next wave of downstream development and rapidly growing proprietary trading businesses – in some cases turning from pupil to teacher for the international oil companies that were the source of such expertise for generations.

Nigeria’s NNPC on the other hands furthers a wasteful fuel subsidy programme that sees more budgetary allocation than health and education. The NNPC now says that all the petrol used in the country now comes through its Direct-Sales-Direct-Purchase programme, an arrangement that replaced the corrupt fuel swap arrangement it used to have, though both arrangements aren’t that different as it entails swapping crude for its derivatives, mainly PMS. A smarter arrangement could have been establishing a toll arrangement where the pays refineries to sell Nigerian crude and take control of marketing all its derivatives. But this arrangement will curb the current rentier system by cutting out the middle man necessary to oil political patronage.

NNPC recently gleefully announced that it has discovered oil in the Gongola basin but is yet to disclose how much this enterprise has cost the nation.

The Corporation didn’t respond to questions about the discovery.

However, the volume of Nigeria’s unsold crude cargoes and OPEC’s production quota on the nation’s output, if not the inherent security threat in the activity under the threat of insurgency, should have been a clear message that digging for crude in the north was a dangerous folly.

Understandably, the NNPC under different governments have assumed roles that it should not be undertaking. It should begin to develop a blueprint on how it will be relevant in the emerging global oil market. It cannot just be content to be government’s accountant and balancing the books however important it thinks this task it. Since it has a many professionals in its employ, their role is to advise the government and make representations to lawmakers, if it involves tweaking the law that set it up so it can play the role of national oil company that benefits the country.

Tuesday 29 October 2019

BUSINESS DAY

23

OFFGRID BUSINESS

Nigeria’s $12bn petrol market creates opportunity for solar solutions – study

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n effective substitute for over 22 million fuel generators used to power households and business in Nigeria are solar systems can tap into a $12 billiona-year petrol market in Nigeria if they are made more affordable, a study has found.

Solar alternatives to fuel generators exist in Nigeria but they are at least 20 times more expensive that small generators. The report by Access to Energy Institute (A2EI), a non-profit R&D institute said that technically viable solar products that meet these needs do exist and can be used to run the same appliances.

“However, they are currently a lot more expensive which means they are not available at scale. A typical 1.5 Kva gasoline generator cost $150 while a 1.5 Kva solar system cost $2,500,” the report said.

This means that it will take at least 8 years before the total costs of a solar system will fall below those of generators. Petrol generators enjoy lower upfront costs, government subsidy and

have lower maintenance cost in their 5-year lifespan.

Yet the use of small generators come with serious problems.

Toxic fumes released by generators cause illness and death. The continued fuel generators will prevent Nigeria from achieving its emission reduction targets under the Paris Agreement. This will adversely affect Nigeria’s

ability to achieve the Sustainable Development Goals.

In view of this, Access to Energy Institute (A2EI), who are dedicated to supporting the transition from soffil fuels to cheaper, cleaner solar substitutes says it has installed more than 150 smart data meters on gasoline generators to collect data and build reliable evidence on generator

usage patterns. “Preliminary data indicates the average generator load factor is 22 percent, implying that gasoline generators could be replaced with smaller solar systems that can still effectively power the same appliances,” the report said.

The report found that if upfront costs of solar systems can be reduced to around $1,500,

they will become cheaper than generators after five years. this can be achieved through better product design and by being able to replace generators with smaller solar systems given the average generator load factor is less than 100 percent would reduce the breakeven from 8-9 years to 4-5 years.

“Such a change could be a key driving force in accelerating the mass-substitution of Nigeria’s 27 million gasoline generators for cleaner, healthier solar alternatives,” the report said.

The study also found that accelerating the switch to solar systems requires improved affordability, concessional financing for emergent players, an enabling policy and regulatory environment.

These collaborations would i m p rov e u s e r a f f o rd a b i l i t y through reduced costs and better access to finance, supporting emergent firms with the concessional capital needed to jumpstart the sector and creating the right policy and regulatory environment to enable the sector to grow, the report said.

India direct government agencies to buy renewable energy, Nigeria can do same DIPO OLADEHINDE

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n order to take advantage of the new renewable energy boom sweeping across the world, the Indian government has directed its public sector companies to champion more investment in the off grid sector, a development Nigeria can learn Unlike India, Nigeria is the biggest and most attractive offgrid opportunity in Africa, and one of the best locations in the world for minigrids and solar home systems, however issues surrounding cheaper financing, multiple taxation and access to forex still remain a challenge for private investors.

In India, the government is setting the pace for private investors as Department of Public Enterprises and Economic Affairs has directed public sector companies to increase investment in renewable energy.

The Indian government also directed its agencies to either sign power purchase agreements to buy renewable energy or set up power projects on their

own. They have also been advised to set up solar cell and module manufacturing units.

This is not the first time that the Indian government has asked public sector companies to increase exposure to renewable energy. Leading agencies like India’s largest utility National Thermal Power Corporation(NTPC), Coal India, Airport Authority of India, NLC India, Indian Oil, Indian Railways and several others have taken several measures to set up utility-scale as well as small capacity solar and wind energy projects.

NTPC Limited, India’s largest power generation company has already announced plans to boost renewable energy capacity in the country by utilizing barren areas and wasteland along its border with Pakistan.

NTPC Limited has declared plans to set up large solar power parks in Gujarat and Rajasthan.

A senior official at the Ministry of New and Renewable Energy has told media outlets that the government is currently studying the feasibility of setting

up other projects along other border with Pakistan in the states of Rajasthan and Gujarat.

The Indian government also launched a solar power capacity addition program specifically for public sector companies.

Under this program, these companies shall compete for capital cost subsidies to set up to 12 gigawatts of solar power capacity.

ANALYSTS: Isaac Anyaogu (Team Lead), Stephen Onyekwelu, Dipo Oladehinde

Although the scheme have not received enough encouraging response from the companies which is why the government is issuing fresh directives.

Unlike many regions in Africa, Nigeria’s economy and strong entrepreneurialism mean that millions of commerciallyviable businesses are powered with expensive or unreliable

power, a scenario that continues to remain attractive for both local and foreign investors.

Also, many rural households spend more than $6/month (N2,100/month) on kerosene or batter y powered torches, making a compelling case for solar home systems, a report

by Rural Electrification Agency (REA) said.

With more enabling environment like that of India, continued cost reductions, and targeted finance, the Nigerian minigrid market can scale rapidly to over 10,000 sites by 2023, power ing 14 percent of the population with capacity up to 3,000 MW and creating an investment potential of nearly $20 billion (N7 trillion) and annual revenue opportunity exceeding $3 billion (N1 trillion).

“The government and development partners are inviting the private sector to work with them to capture this opportunity, while saving Nigerians money and powering economic development to further expand the market,” REA said in its report.

Feedback: 07037817378, 08137433034, 08135447789

email: isaac.anyaogu@businessday.ng, stephen.onyekwelu@businessdayonline.com, oladehinde.oladipo@businessdayonline.com

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Tuesday 29 October 2019

BUSINESS DAY

Business school admissions: What it takes to win a place As demand grows for masters in management, candidates must stand out. So what do admissions teams look for?

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asters in management (MiM) courses are growing in number.

The Graduate Management Admission Council, which administers the GMAT business school entrance exam, reported this year that the number of European MiM programmes accepting its exam scores rose from 27 to 152 between 2007 and 2016.

In the US, the total nearly doubled from 102 to 195.

This does not necessarily mean it has become easier to secure a place at a chosen school, however, so what does it take to be accepted on to a course?

The starting point is to explain why you need the MiM, says Stacy Blackman, a US admissions consultant who advises both MiM and MBA applicants.

“Show an interest and focus on how you want to use the degree after graduating,” she says. Applicants should also focus their energy on research into the different programmes, Blackman adds.

“Read, read, and read some

more,” she advises.

“Look over the websites of all schools that interest you to learn about the curriculum, teaching methods, professional clubs, extracurricular offerings and student life.

These criteria vary by programme.” POTENTIAL JOB OPPORTUNITIES Another important factor for applicants to consider is a course’s effectiveness at providing access to job opportunities after graduation.

“Business schools have developed comprehensive career services,” Blackman says, but she adds that ultimately participants “should propel their own success”.

“You should take time and effort to set clear career goals before applying for a business programme.

This is especially true for masters in management programmes because they are newer on the business school scene,” she adds.

At ESMT Berlin, demand for the MiM has grown: applications for this autumn’s programme are up 75 per cent on 2015. www.businessday.ng

Many applicants have a business studies background, but over the past four years candidates with degrees in humanities or arts subjects have increased from 4 per cent to 17 per cent of those accepted on the course.

This is a reflection of the growing interest in a MiM qualification as a good grounding for a career in business, according to Stephanie Kluth, head of admissions for degree programmes at ESMT. It also highlights that while the admissions team is keen to see that people have an aptitude for quantitative subjects such as maths and economics, an applicant’s ability to show drive and enthusiasm to do what is required on the course is more important.

“I need to make sure the student doesn’t cause us an academic risk,” Kluth says. “But our primary expectation is that the candidate has very high motivation and knows what the school is about.”

The most common mistake Kluth observes among applicants is the copying and pasting of the same essay on multiple

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course applications to different schools. “You don’t have to have the most impressive list of extracurricular activities,” she says.

“I really like it if I read an authentic essay.” Applications for the MiM course at Rotterdam School of Management were up 15 per cent year on year for the class starting this autumn.

About a quarter of candidates had a bachelors degree in an engineering-related subject.

The attraction for these students is the opportunity to add business to their technical skills, according to Arnoud Monster, RSM’s executive director for recruitment and admissions.

“The MiM is a fantastic qualification because it gives you a general understanding of business,” he says.

U N D E R S TA N D T H E COURSE One of the best ways to stand out in an application is to show an understanding of why you have picked this particular school and course.

“There are lots of different types of MiM course, so doing your homework about the school is one of the most important criteria for being offered a @Businessdayng

place,” Monster says.

The best way to gain an understanding of a school is to talk to those already there, he adds.

Rotterdam helps applicants in this by offering the opportunity to speak to current students who have agreed to be “ambassadors” for the school.

“They can ask them any question,” Monster says. “We really don’t interfere.”

He advises anyone who is concerned that this might present a rose-tinted view of the school to instead search for former students on social media and connect with them online.

Lastly, getting the basics right is essential — if not always achieved.

The most common mistake is someone failing to submit one of the required documents or test scores requested on the application form, says Monster.

The most common reason for this is people rushing their application because they are submitting it close to the deadline. “The best piece of advice is not to leave the decision to come to business school until the last minute,” he says.

Tuesday 29 October 2019

BUSINESS DAY

25

Bad news: How you speak still matters more than what you say No one intends to take their parents into a job interview, but they sneak in anyway

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e all know that it is important to make a good first impression, especially in a job interview.

Still, it is slightly disturbing to see scientific proof that (a) that impression is formed by the time we have spoken just seven words and (b) we are doomed unless those words come out in an accent like Jacob Rees-Mogg’s.

Not that I imagine the archBrexiter has been to many job interviews (though who knows what December might hold).

According to new research from Yale University, when we hear someone speak we form near-instantaneous conclusions about their social class.

Michael Kraus, assistant professor of organisational behaviour at the Yale School of Management, reported that, even during brief interactions, speech patterns shape our perceptions of competence.

And people are able to judge social class with reliable accuracy merely from hearing seven random words.

“While most hiring managers would deny that a job candidate’s social class matters, in reality, the socioeconomic position of an ap-

www.businessday.ng

plicant or their parents is being assessed within the first seconds they speak,” he explained.

A chilling thought. No one actually intends to take their parents into a job interview, but it seems that they sneak in anyway.

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How should we counter this? Make everyone go the full Marcel Marceau?

“Tell us about your previous experience using mime, Play-Doh or the medium of interpretative dance.”

In one part of the study, 274 managers with hiring experience compared audio recordings and transcripts from 20 candidates without knowing any details about the applicants’ qualifications.

The managers were far more likely to correctly guess a candidate’s socio-economic background accurately if they heard their voice than if they read their written words.

Worse: the higher an applicant’s perceived social class, the more likely they were to judge them a good fit and award them a higher salary.

Ouch. Imagine that — free money just for sounding posh.

No wonder my Mancunian grandmother used to try to make me repeat “How now, b row n c ow ” i n Ma rga re t Thatcher’s plummy tones.

The proof of the power of these biases is mounting not only because of studies like these but also because of @Businessdayng

advances in artificial intelligence and digital metrics.

I spent this week at the Professional Speechwriters’ Association’s annual conference in Washington, where Noah Zandan, head of Quantified Communications, gave a fascinating — and slightly terrifying — presentation.

His team has pioneered human-trained AI technology that teaches machines to measure the impact of how we communicate, using over 1,400 metrics (voice, accent, gestures, choice of words).

His research suggests a more generous 15 seconds to make a first impression.

Worse, though, for the speechwriters (who were turning white by this point) the machine judg es that content only counts for 11 per cent of our impact when we talk.

Passion, expertise, voice and presence are all twice as important. Conclusion: no one cares much what you say — they care how you look and how you sound.

I was judged to have “cheated” in my speech because I have a British accent.

Apparently this gives you a “perceived intelligence” bounce with American audiences. If only they knew.

So how do we get around this bias? We could look to the many observable exceptions to the rule.

In the 21st century, some non-posh voices stand out as more authentic and distinctive.

Witness the lucrative careers of television personalities Danny Dyer, Stacey Dooley, or the cast of Love Island.

It’s wise also to remember that job interviews are a twoway street.

You are interviewing the interviewers too. Would you really want to work for a company stupid enough to hire someone just because they sound as if they have a plum stuck up their bottom?

26

Tuesday 29 October 2019

BUSINESS DAY

EDUCATION

Weekly insight on current and future trends in education

Primary/Secondary

Higher

Human Capital

How unchecked ‘Special centres’ foster examination malpractices Godsgift Onyedinefu, Abuja

E

xamination malpractice is today one of the major rots in Nigeria’s education system.

BusinessDay investigations show that while several reasons have been given for the rise of this menace, centres which disguise as tutorial centres are in fact centres for massive examination malpractices.

More worrisome is the proliferation of these centers, called ‘miracle centres’.

Most streets across Nigeria are today littered with their banners and posters luring students with inscriptions assuring them of credits, while concerned authorities remain numb.

Students in their desperation to make the minimum requirements of five credits to gain admission into higher institutions patronise these centres and are made to pay additional fees to aid the cheating process.

During a recent visit to one of the special centres in Abuja, it was discovered that no tutorials hold, once payments are made, the students only return when Examination commences.

BusinessDay investigations also revealed that many private schools in Abuja are not left out in the business.

Students from public

Students registering for a programme

schools often flood private school during Senior Secondary Certificate Examination, they are also made to pay extra examination fees which used to pay Examination supervisors to aid in the cheating process.

The methods employed by these ‘miracle centres’ to facilitate the malpractice process includes; bribing exam invigilators to allow the students in the examination hall cheat, getting examination question papers before examination, replacing the answer script written in the examination hall, impersonation, helping the students with answers during examinations amongst others.

BusinessDay reporter who disguised as a student had visited one of the multiple banners along Dutse-Bwari route, where an operator, who simply identified himself as ‘Onward’ said he runs a centre for General Certificate Examination (GCE) and assured the reporter of nine credits in the desired subjects for a fee of N18, 000 only in the Nov/ Dec. National Examination Council (NECO) Examinations.

According to him, “All you need to do is pay N18,000 into my account, I will do the registration for you, if you are busy, you don’t have to come for any tutorial, so on the examination day, we know how

Union Bank, stakeholders collaborate to drive needed investment in education KELECHI EWUZIE

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etermined to drive the much needed investment in the education sector, Union Bank recently organised the second edition of its annual education festival Edu360, in Lagos, drawing a wide range of stakeholders across the education ecosystem.

The event tagged “Education Beyond Walls”, served as a platform for collaboration among the education sector stakeholders including government officials, policy makers, teachers, parents, school owners, investors, students and other key participants, with the goal of accelerating development and much needed investment in the sector.

Emeka Emuwa, Chief Executive Officer, Union Bank says the company is focus on education as a key driver of national development.

Emuwa while speaking at the ceremony to mark the kick-

off of the three-day event, says the goal of the Bank over the next three days here at Edu360 is to drive conversations and collaboration that will catalyse action necessary to move our education sector forward.

According to Emuwa, “We understand that scaling up government spending on public education is imperative, but to actually move the needle and drive impact, we believe the key is creating scope for private investments in the sector.”

He further reiterated that Union Bank remains committed to supporting Nigeria’s growth by identifying and investing in sectors that are vital to shaping a better, more sustainable future for generations to come.

Vice President of the Federal Republic of Nigeria, Yemi Osinbajo says it is possible for us as a country to restore education to its place – not juxtaposed by entrepreneurship or wealth creation; not looked down upon by certain groups in our society but embraced by all – working www.businessday.ng

assiduously to deliver our respective responsibilities to empower our children and indeed, the future of our dear country Nigeria.

Osinbajo who was represented at the occasion by Chukwuemeka Nwajiuba, Minister of State for Education lauded the board and leadership of Union Bank for this feat – investing in a platform to bring all stakeholders together to discuss such important developments and trends in the sector.

Over 200 teachers from government and private owned schools benefited from free training sessions as part of Union Bank’s drive to upskill the workforce of the important sector.

In addition to parenting panels and workshops, there were also various activities including digital training sessions, coding and robotics workshops and STEM classes. The fair also featured workshops and seminars to address sensitive issues concerning raising well-adjusted children in today’s world.

to go about it.”

A visit to another centers within the same vicinity indicate that the situation is not different as they struggle to out-do each other.

Here, the operators assured our reporter of no less than seven credits in the National Business and Technical Examinations (NABTEB) which will commence November 2019, “once you pay the necessary fees” “Register with me and your seven credits is guaranteed. I run an accredited examination centre. The examination your papers will be taken care of, especially the paper you need the most. Just come to my office with N15, 000.”

The principal of a government secondary school in Keffi, Nasarawa State who simply identified himself as ‘Prince ‘ said he usually charges N20,000 extra for students who want to pass special subjects , especially mathematics and English language.

Investigations showed however, that on the examination day, the external supervisors are ‘sorted out’ with some money and the students are allowed to cheat, either the answers are written on the board or they are allowed to use their textbooks and notebooks.

Also, a visit to most private secondary schools in Bwari area council Abuja revealed that students also pay extra fee ranging from N15, 000 to N 30,000 for NECO, WAEC and NABTEB examinations.

It was discovered that some of the officials in these examination bodies aid and abet the cheating process.

An official of one of the examination bodies, names withheld told our reporter he will arrange for her to pass the exam at a designated center.

“Don’t worry, I will put you in a centre where you will make your papers, they will get you there”, an official at the NABTEB office in Utako Abuja told our reporter.

Ben Boong the spokesperson of the federal ministry of Education in his reaction however denied knowledge of the existence of such centers.

According to him, exam malpractice is on the decline because various examination bodies to include WAEC, NECO, JAMB and NABTEB have taken stringent steps to tackle the menace.

“It is impossible for these centres to see the questions papers before the exams because WAEC, NECO only sets exam questions a night to the exams or on the day of the examination.

Also the question paper types introduced by JAMB and biometrics verification by other exam bodies have reduced malpractice and cases of impersonation”, he said.

He added, “WAEC and NECO have already accredited examination centres, these so called special centres are not accredited, therefore they cannot conduct examinations or control examination processes.”

However, these centres have become a business that is increasing steadily. A ‘beneficiary’ from these centres Hasaanat Bello who spoke to BusinessDay said she registered in a private school with an extra fee of N12, 000. She said they were given answers during the examinations and she made all her papers.

While stakeholders in the education sector continue to decry decay in the system and low quality of Nigerian degrees, this trend is gaining momentum and goes on nearly unnoticed.

Accessing quality schools highlights agenda for third Nigeria Education show KELECHI EWUZIE

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midst the challenges that Nigerian parents go through in terms of sourcing for the right schools for their children, schools with the right environment and training among other incentives, discussions that center on quality school, support, and empowering stakeholders will take centre stage at the third edition of Nigeria Education Show.

The conference will congregate speakers, panelists to discuss exhaustively on how to build capacity and strength en c omp etenc e through exposure to relevant information, vital skills and current schooling principles, styles and techniques.

Margaret Uponi, chief executive officer, Maribet Consult Limited says the Nigeria education show platform will serve as a link between parents, teachers, school owners, educators, among others.

There will also be psychologists as well as other experts in childcare.

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Uponi observes that the world is a global village and our schools are to prepare our children for global education.

“It is important that parents get that right from the beginning because our children will compete in the global market. Parents must not take the foundation with levity, it is critical,” she said.

Uponi an education expert while speaking at a press conference to announce the programme with the theme: ‘A journey towards Knowledge Economy’ in Lagos charged parents to be deliberate about their children’s education and future by ensuring they put them in the right schools where they will be able to actualise their potentials.

She further noted that putting children in the right school was critical to the success of the children in the future, adding that correctly assessing the educational needs of a child before putting him/her in school was important.

Commenting on the common trend of parents putting @Businessdayng

all the children in the same school, Uponi explained that it might not be appropriate in all circumstances. “This is because children have different learning skills and paces and schools also have varied capacities to cope with different students.

She further said the best thing is to know the personality of each child and see where he or she would be better handled, adding that with Knowledge economy, the world had moved towards a knowledge-based economy and that Nigeria could not afford to be left behind.

“It is because of this that the theme for this year’s event is “Journey towards a knowledge economy.” Today’s schools that are worth their salt must help in preparing our future leaders in that direction. Our focus is on primary and secondary schools.

“We are out to promote quality education, not beautiful schools. A school might be beautiful but it could lack the manpower to impart the right education in the pupils or students,” Uponi said.

Tuesday 29 October 2019

BUSINESS DAY

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EDUCATION ‘Mentorship, capacity training for young professionals is pivotal for economic growth’ Lynda Onefeli is the chairman of the Association of Professional Bodies of Nigeria (APBN), Lagos State Chapter.

In this Interview with KELECHI EWUZIE, she shares her agenda which focuses on driving mentorship, capacity trainings for young professionals and what government needs to do to turn around the economy. Excerpt: As the chairman of the Association of professional bodies in Nigeria, Lagos State chapter, what should members, government, and Nigerian professionals expect from your tenure? n my investiture address as the chairman of the Lagos branch of APBN, I enunciated our agenda for this administration. I wish to reiterate that this administration have mapped out topnotch capacity building programmes for young professionals.

We know that the role of professionals in any economy is very crucial. So, it is important that we play our part because as we play our part, we are bettering our society and our nation.

In the course of my tenure, the executive committee plans to focus on series of training for young professionals because we know the economic terrain in Nigeria is tough particularly for startups.

We have mapped out designs and are in the process of organising training, mentorship sessions for young

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professionals. One unique thing about the Association of Professional Bodies of Nigeria (APBN), Lagos State Chapter is that it is made up of people from different professions.

Since we have different practice areas, it’s a bit unique because a training that is suited for a doctor may not be suited for a lawyer.

However, the association will work with various professional bodies to tailor the training and mentorship to each special profession, but this will be under the auspices of APBN Lagos State chapter.

That is one of the major thing that we want to do.

Welfare of members is another agenda that we take seriously in APBN as a body.

We don’t work with individual professional; we prefer to work with the various associations under the APBN. When we talk about welfare, we are looking at ways of improving the various professional bodies.

In our assessment of the various associations, we discovered that many professionals are obsolete and it is drawing them back. So,

Lagos, Ogun, Osun jostle for top spot at 2019 Cowbellpedia Mathematics finals

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tudents from Lagos, Ogun and Osun states would jostle for top shot at the finals in the on-going Season 5 of the Cowbellpedia Secondary Schools Mathematics Television Quiz Show.

In the junior category of the first semi-final duel in Lagos, Abdulganiyu Alli, a student of Ota Total Academy, Ota, Ogun State and Ebube Okafor of Saint Francis Catholic Secondary School, Idimu, Lagos outclassed their mates to sail into the finals of the competition.

This feat was at the expense of four other participating students: Mohammed Sirajo of Nigerian Turkish International College, Kaduna, Kaduna State and Yakubu Yunusa from Nigerian Turkish International College, Damaturu, Yobe State.

Others who could not cross the hurdles include Ayomide Attah, a student of Saint Francis Catholic Secondary School, Egbeda-Idimu, Lagos State and Faithful Unimashi from Saint Annes High School, Calabar, Cross River State.

Alli, who scored 115 points to cross the bar, expressed

confidence to wear the crown and pray to gain more confidence and momentum in the final battle. Okafor on his part maintained that he possesses the desire to emerge champion and prayed for God’s grace in the final encounter.

In the senior category, Oghenero Ologe a student of Zionfield Pinnacle School, Ikorodu, Lagos State garnered 95 points to advance into the finals. He was joined by Hezekiah Olabisi from BiboOluwa Academy, Ilesha, Osun State who scored 90 points.

The feat by the duo shut the door against Jesse Uche-Nwachi, the 2018 junior category champion from Graceland International School, Port Harcourt, Rivers State and John Areola a student of BiboOluwa Academy, Ilesha, Osun State.

Other who fell by the way side include Chinoso Emmanuel of Dority International Secondary School, Abakaliki, Ebonyi State and Philip Awodiya from BiboOluwa Academy, Ilesha Osun State, Ologe and Olabisiare are hopeful of a spectacular outing in the final and equally prayed to achieve their dreams of winning the ultimate prize. www.businessday.ng

Lynda Onefeli

we have designed trainings on cyber security and data protection for each member.

The main mandate we have is to articulate the voices of professionals and relate same to the government.

We articulate the voices of nationals in Lagos State. So, we will liaise with govern-

ment in policy making and encourage the government to appoint the right professionals in places where they can function effectively.

When you look at the economic indices like high unemployment rate, rise in food prices among others.

What advice do you have

Embrace science fields to promote social good—KGAP President

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urdened by the apparent shortage of females in the fields of science, women, have in recent time, started making concerted efforts to address this burgeoning development.

It was against this backdrop, a clarion call was made by group of young girls called ‘Karissa Girls in Africa for Progress (KGAP) led by the President, Karissa Idoko, at the commemoration of this year’s International Day of the Girl Child themed “Girl Force: Unscripted and unstoppable”.

The KGAP’s Girl up Club Nigeria as it is referred, is the gathering of young teenage girls at the Gems Learning Space (GLS), Lagos, to commemorate the International Day of the Girl Child, with a message to teens to embrace Science, Technology, Engineering and Mathematics (STEM) as a necessity for societal growth.

Karissa Idoko, speaking at the half day event challenged teenage girls to strive to embrace science, technology, engineering and mathematics (STEM) and build

confidence in their abilities to participate in STEM fields.

“As young girls, I challenge you all to excel in STEM fields, build confidence in your abilities to participate in STEM no matter your field of study you aspire to be in”, Idoko said.

To celebrate the International Day of the Girl Child, a STEM specialist was invited to facilitate the meeting, who introduced the young girls to relatable and accessible STEM role models.

KGAP’s Girl up Club Nigeria is part of a global movement of 3,300 United Nations Foundation Girl Up clubs registered in 50 U.S. states and 2 territories and 118 countries; Girl Up Clubs are champions for change, the Clubs have a huge impact on girls around the world.

Through education, fundraising, advocacy and service, Girl Up Club members develop the leadership skills necessary to make a positive difference in the lives of girls everywhere. Whether you are in middle school, junior high, high school or homeschooled you can be a member of the club.

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for the present government towards addressing these issues?

As a body of professionals, one of our roles is to articulate the voices of professionals when we have seminars.

This October, we are holding a seminar with the theme: ‘Ease of doing business in Lagos’. The choice of the topic is because Lagos is our base.

At the seminar, a lot of conversation will centre on how best to drive business growth in Lagos. We will at the end of the seminar prepare a communiqué which will be published and also sent to the government.

In that communiqué, there would be a lot of suggestions that would help government address issues around unemployment in Lagos in particular and Nigeria in general.

One of the ways to tackle unemployment is to build more factories, more businesses. If there is a favourable business environment for organisation to thrive, then they would create more jobs, knowing that the more businesses we have as a country,

the more job opportunities we create.

It is not easy to do business in Lagos and other parts of the country. There are issues of multiple taxation, power, transportation, road infrastructure. So, there are loads of challenges that need to be addressed.

One of the things that are going to be a fall out from the public lecture would be to proffer solutions to these problems and extend these suggestions to the government. This, I believe, will go a long way to solve these problems if only government act on them.

How would you assess the corruption fights of the federal government so far?

Government should not pay lip service to the issue of corruption in Nigeria.

Government has policies against corruption, what we need to find out is if such policies are been properly implemented.

The federal government has good intentions in its fight against corruption, what however is the problem is enforcement.

Anthos House participates in extra-curricular activities to mark Down syndrome awareness month KELECHI EWUZIE

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s part of its annual Down Syndrome Awareness Month programme, the Down Syndrome Foundation Nigeria hosted a 5-aside charity football match in Lagos. The event took place at Kernel Recreational Centre, Surulere, and at the end of several rounds of matches, Anthos House’s staff team won the silver medal, while the school’s students’ team went home with the bronze medal.

Kimberley Scollard, the Head of School at Anthos House speaking after her teams got the medals said that she was delighted with her teams’ performance.

She declared that “though it was a friendly match, the participating teams made it interesting and competitive. I believe that in a game like this, everybody is a winner. The most impor@Businessdayng

tant thing is that people are aware that Down syndrome is simply a genetic disorder, and people with the challenge shouldn’t be segregated. “ They should be accepted as unique members of our society and also be offered an inclusive education. That was the reason the management of our mother school, Greensprings School, established Anthos House, to provide quality special education to children with special needs and equip them with life skills.”

Aside from the football match played on the day, there was also a family fun-fair, and attendees had a chance to interact, while playing lots of other exciting outdoor games. The Down Syndrome Awareness Month started with a seminar on September 28th and will end with a fundraising and award night on November 1st, 2019.

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Tuesday 29 October 2019

BUSINESS DAY

INTERVIEW GE, developing innovative models for improved health care delivery in Nigeria, Africa EYONG EBAI is the general manager of General Electric (GE) Health care operations in West/Central Africa and French Sub Saharan Africa. He decided to focus his gained experience on the African continent after 15 years of working in Europe. In this interview with DESMOND OKON, he spoke about GE, and their role in improving health care delivery in Nigeria and Africa.

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ou worked in Europe for years before focusing on Africa, how has it been working in Nigeria?

Working in Nigeria in health care is a fantastic opportunity; the work we do has a true direct impact on lives. If you think of developed markets, they have very well established health care systems that are working and increment to an improvement that you make if you are working in health care in, say Europe, is I think limited. If you look at the kind of work we’re doing in Africa, we’re supporting the building of hospitals, diagnostic centres, we’re working and engaging with governments, and state governments to improve primary health care which has a direct impact on infant mortality and maternal mortality. If you look at the specialist area, things like cardiac centres, oncology centres, specialist medicine level, there is a huge gap in that infrastructure. So, there is a huge amount of purpose in the type of work that we do and it directly impacts on people’s lives.

GE’s impact on the health care sector We have done a lot of different things so I can give you a couple of examples. Let’s take primary health care, in the last year of four years’ programme called health imaginations, health imaginations was targeting infant and maternal health, we were deploying hand held ultra sound technology, training midwives and health care professionals in four states, on how to identify complications through the lady’s pregnancy.

On the basis of that, we will impact 560,000 patients, expectant mothers over the cause of the entire programme which will finish in 2020.

We will train 360 professionals and we’ve deployed 180 pieces of equipment across the four states, that work has a direct impact on the outcomes of the expectant mothers. That’s a great programme we’ve done in the primary healthcare setting.

Then if you take it to a secondary care setting, the work that we’ve done in Borno State, has been very exciting. We all know the challenges of that state in the last few years and so we’ve worked with the state to support them in building, a new diagnostic centre, and then we’ve equipped their general hospitals with ultra sounds and x-ray equipment.

It has been the biggest educational programme we have run in Nigeria as was associated with that project.

We have trained nurses, doctors, midwives, officers, admin staff, and we’ve trained them not only in applications, which is how to use the equipment, we’ve also trained them in management, resource managements, and how to run a facility in an optimal way. so, that’s been very powerful.

The contribution of GE towards universal health coverage in Nigeria Primary health care is the kind of basis for universal health care coverage, we have to fix your primary health care so that you are able to identify issues so that you can refer them to the appropriate level of care that is needed or you manage them at

rently ongoing in Kaduna State. We engaged with the Ministry of Health to deliver a primary referral care programme, and the primary referral programme involves deploying adaptive technology, you train, build capacity, and monitor and evaluate that solution that you provided over a period of time to show that it is effective. So, we’ve deployed that at 23 general hospitals and 255 primary health care centres, We’ve completed the first phase which is the 23 general hospitals and we are now going to be discussing with the state on the second portion which is the primary health care centres.

Eyong Ebai

the primary health care level. We’ve got a programme with shell which is the Olobiri health care programme, which is looking at the entire health care system in that local government, and that local government is also looking at the different health indices that contribute to better health outcomes. So, typically, what people will look at is your hospital built, they look at infrastructure, whereas this program looks at infrastructure, it looks at water provision, it looks at power and alongside it, you have the health insurance scheme that’s also running, and it’s also looking at how you’re going to bring the informal sector into the insurance scheme.

So, that’s actually the first local government that we could say is offering the universal health care coverage because 17,000 people within the local government have the ability to access care, they have a referral point, they have an insurance scheme and then you’re looking at all the other determinants of health in how you can improve health across the entire local government.

GE was at the Medic West Africa conference and exhibition, tell us about the decision to be part of it.

We have been there every year since it started, this was its eight year and we have been there for the previous seven years and it’s the single largest health congress in the region and it gives us a great opportunity for us to engage with our clients. In recent years, it’s had a good focus on public sectors and the discussion we just had about universal health care coverage, it’s the public sector that is going to drive that initiative. GE has partnered with the public sector to develop PPPs that can actually www.businessday.ng

deliver the ultimate goal of universal health care coverage from 2030. So that’s a big part of the conference, the public sector. Then we have a big representation of the private sector, hospital owners, radiologist, radiographers, doctors in general.

And that gives us some opportunity for my team to engage with them and discuss how we could collaborate and work together to improve infrastructure and improve health.

Furthermore, obviously, it gives us the platform for a business-tobusiness perspective as well. So, we have a lot of partners, stakeholders that are here as well. Not one company will be able to do everything in health care, so we need to collaborate with other companies to be able to deliver the results that you want and this event gives us the opportunity.

What are some of the ways you think that public, private partnerships in the health sector can help optimize operations in the country?

The only way to close the infrastructure gap is by public/private partnerships and the investment that private investment is bring in, the gap is quite big but what needs to be done is large and the government cannot do that by themselves so PPPs are the way forward and GE across the continent has been a pioneer in working with government, NGOs, development agencies in coming up with innovative models that can impact on the infrastructure gap, but more importantly in a sustainable way and I think, for me, what’s key is that, the program that we do are built with a view on sustainability.

We have engaged in a couple, for instance, the work that is cur-

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What roles do you think the government can play to make quality health care accessible to Nigerians?

It’s a buzz word ‘enabling environment’ but it’s putting into practice that is key. There is a health care Act which has made progress, there is also the basic health provision fund which is now coming into operation, it’s a big step forward in providing demand side revenue which can then be invested in health care facilities, and championing PPPs, supporting us on the regulatory sides, are roles that they can play. This is clearly leadership needed from the government. Primary health care is on the agenda, oncologists, specialist care is on the agenda, health insurance is on the agenda, so I think the government is definitely saying the right things and its now for a company like GE to come up with innovative solutions to be able to impact on the economy.

What insight can you provide on sustainable health care solutions?

When you buy technology, it’s not just about the purchase of technology at that point in time, you need to plan for long term maintenance of the equipment, and historically across Africa in general, that view of the long term maintenance of the equipment is not necessarily in the front of mind, so the key is, what you have procured and you have got technology that is functioning, you need to almost immediately have a plan around long term maintenance to keep the equipment working, and that builds sustainability.

How well has the health sector in Nigeria adopted technology to scale up service delivery?

Now in Nigeria, you can get access to some of the best technologies that there are. We’re here today in Lagos, not far from us there is a number of facilities that have the latest CT, MRI, X-ray, mamo, and so on. The technology is here but the key question is ‘is it accessible and affordable?’

The models and programmes that we were building, particularly in that PPP space, is assuring that there is accessibility to that latest technology for everybody and not just the top 10 percent of people. If you look at some of the public facilities, the LUTH for example, recently inaugurated the NSIA LUTH cancer treatment centre, that centre has the most up-to-date cutting-edge system equipment for treating cancer, and GE has a discovery RT, which is a CT simulator, which is important @Businessdayng

in locating and identifying where a cancerous tumor is, so that the appropriate radiotherapy treatment can target that tumor. It was the first in the country and it’s in a public facility. So, the technology is available and now we are working on making sure that it is available, accessible and affordable for the masses and there is a number of programs we are doing to make it happen.

What concerns do you have about financing in the sector and how can they be addressed?

I don’t really have concerns, for me it’s about what we are doing and how are we addressing the financing need. So recently, we have signed an agreement with Access Bank to provide competitive loans for SMEs that operate in health care to procure technology that we can use within their practice, and that’s quite exciting development in regards to collaborating with Access Bank. I think that’s a good example of where we’ve worked on the small and medium size health organisations to be able to provide competitive funding.

On the bigger picture, we have done a number of programmes with Bank Of Industry where they provide equipment and financing for larger projects. So, those are two examples of different ends of the spectrum, large projects and smaller projects in regards to how GE, through our health care financing in team have been able to support the industry to secure funding and financing for projects.

What is the future of health care in Nigeria, and the future of GE in Africa?

The future for GE in Africa is a very positive future, we’re continuing to invest and localise, and for me this is a big thing. Across the continent, you have Africans working in Africa at global standard and impacting in what we’re doing. Like I said, everything we do on the ground has an impact on lives. We are going to continue to do that and continue to grow and support governments to close the infrastructure gap that we have and improve pension outcome.

The future of health care in Nigeria is that it continues to improve, like I said, the number of doctors, oncology centres, diagnostics centres or you could take it to equipment level: number of CTs per population, the number of MRIs per population, there is still some significant work that needs to be done and we are on the right path, we’re moving in the right direction and I am sure that GE will be a central part of that continued growth to improve the health indices for all Nigerians.

Addressing the issue of brain drain The point I will make is that there are a number of Nigerian diaspora doctors that are coming back and doing fantastic work currently in Nigeria.

Nigerian doctors are some of the best in the world, and a lot of them are coming back. There is clearly some brain drain, but there are also ‘brain returnees’. It isn’t all negative but it can be better. I remain optimistic about health care in Nigeria and that includes the medical professionals.

Tuesday 29 October 2019

BUSINESS DAY

BDTECH

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In association with

E-mail: jumoke.akiyode@businessdayonline.com

The inevitable takeover of robots and artificial intelligence in businesses JUMOKE AKIYODE-LAWANSON

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he question of how quickly businesses and economies should make a timed shift, not only with its infrastructure but with its culture, offerings, supply chain and its core processes is often asked, especially with technology rapidly evolving. Well these changes and digital transformation, although necessary, take time, and is not as simple as just moving data to cloud.

Today, it is estimated that companies and countries have increased their innovations spend by up to 80 percent from 15 years ago, and the increase in automation through the rise of ‘bots’ have become the next big thing for organisations across various industries in the world.

Speaking in an interview with journalists during the recently held 2019 SAS Analytics Experience in Milan, Italy, Desan Naidoo, vice president, SAS Africa, said there would certainly be a tier level of workers that would be displaced due to the evolving nature of jobs brought about by technology.

“There is going to be a tier of jobs that will definitely be lost due to machine learning and computers being able to fulfil a certain sector of roles within that space, but using machine learning and Artificial Intelligence (AI) to enhance people’s roles,” Naidoo said.

Asked what the future of Africa would be with regards to machine

learning, especially as it is projected to displace millions of people from jobs in the near future and the company’s plans for this evolvement, Naidooo told BusinessDay that; “As an organization that is looking to displace these jobs with technology, we are definitely having conversations on how to train people for new level jobs. I think there needs to be a lot of education around that, and how we actually retrain our people which is important.”

“The evolution of technology is inevitable, it is going to happen, and it is going to make our lives easier

and better, so we as humans need to make sure that we are evolving,” he said.

In Nigeria today, the use of robots and artificial is not new, especially with banks, e-commerce companies, insurance industries and fintechs.

Other industries such as agriculture, health, education, etc. have also imbibed the use of certain AI technologies to enhance operations.

In an interview with BusinessDay a while ago, Wole Adesiyan, head, business transformation of Stanbic IBTC bank said the bank had gone ahead to introduce robots which is

a game changer in its operations as it has significantly improved operational efficiencies, created shorter resolution times, enhanced data security and improved data handling.

“We believe in preparing for the future without ignoring our environment and the culture of our people.

We also encourage our colleagues through learning and development to prepare for a future that includes Artificial Intelligence and robotics process automation. If a machine can do your job, prepare for a better one,” Adesiyan said.

Almost all banks in Nigeria have

introduced chat bots and automated a considerable amount of their customer service centres, displacing a number of customer service representatives.

However, some people have argued against the take over of some jobs by automation and robotics.

Speaking on the significance of robotic process automation (RPA) in the workplace, Alistair Hofert, associate director, finance and accounts, PwC South Africa, said that robotic process automation will make it possible to fully automate highly rulebased/repetitive processes, thus reducing headcount and associated costs but that not all RPA’s are intrusive and may still need some sort of human intervention.

“I think it is important that people in finance and technology know that the RPA is not an intrusive robot and will not take over jobs of people as is the popular scare in many industries. Rather, the RPA software sits on existing software, learns and is very good at understanding and applying intelligence.

When you add machine learning to basic robotics, you must teach the robot how to understand voice and language so that you can use things chat bots and natural language processing bots. So it still needs human beings,” Hofert said.

Research has shown that there is a high likelihood for companies to invest more in automation and innovative technology, hence the pressing need to train citizens for the job of the future.

‘Nigeria must develop a national technology agenda for competitive advantage in global economy’ JUMOKE AKIYODE-LAWANSON

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erraki Partners, a business and technology solutions firm has called on the Nigerian government, working in collaboration with the private sector, to urgently develop and begin to execute a national technology agenda, that will be distinctly Nigerian and will improve our competitiveness in the global economy.

Speaking to journalists on the sidelines of the recently concluded 25th Nigeria Economic Summit, Olatunde Olajide, senior manager for technology application services at Veraki who facilitated the sum-

mit’s industry breakfast meeting on information and communications technology, advocated the need for Nigeria to overturn its perceived unwelcome stereotype and emulate countries like Israel, China, Singapore and South Korea that have all articulated and implemented a national agenda which has in turn helped them to create specific niches, improve their reputation while fostering economic growth.

In his submission, though Nigeria boasts of Africa’s largest young population, bursting with entrepreneurial energy, tremendous resolve, resilience and creativity, the nation is yet to articulate a holistic agenda as a

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counter narrative to the damaging reports of fraud, corruption and unemployment. He asserts that this biased perspective has a negative impact on the country’s perception, creating a drawback to our ability to attract new investment and ultimately our future economic potential.

In pressing for a national ICT agenda, Olajide quoted “Following its release of an Artificial Intelligence Development Plan, China outlined AI as a national priority, expressed its commitment to building a domestic AI industry worth US$150 billion and leading AI globally by 2030. China has already introduced AI pilot programs in

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hundreds of schools and training teachers to implement the new curricula throughout the country. Nigeria must define what its strategic ICT agenda is, in the global economy and work towards this.”

“There is a lot Nigeria can do in a global economy; Nigeria is home to the leading hubs for entrepreneurship on the continent thanks to several strengths, including our resilient entrepreneurs, a growing number of engaging international investors, a huge population with increasing access to technology, a growing number of startup support organizations active in the ecosystem, over 84 million hectares of ara-

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ble land with less than half cultivated for agriculture production, our creative industries especially music and Nollywood, a booming billion dollar film industry. We must harness these strengths to determine how best we can play in the global economy,” he said.

Olajide also highlighted the importance of local content and skills in the country’s IT agenda and encouraged local enterprises and governments to patronize companies with Research & Development, Product Development and Manufacturing operations in Nigeria to help in developing natonal technology competence.

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BUSINESS DAY

BDTECH

E-mail: jumoke.akiyode@businessdayonline.com

LCCI urges Nigerian businesses to embrace cybersecurity systems …harps on the importance of data privacy to curb digital security threats JUMOKE AKIYODE-LAWANSON

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he Lagos State Chamber of Commerce and Industry (LCCI), through its information communication technology and telecommunications group, has called on business organizations operating in Nigeria to embrace cybersecurity systems in order to ensure the safety of their business and customers, especially as cybercrime is becoming more prevalent and destructive in recent times.

Creating awareness on the importance of cybersecurity, the group held its annual symposium themed; ‘Cybersecurity: A Nigerian perspective’, in Lagos recently, where it focused on the increasing threats in the digital space and its costly impact on Nigerian businesses.

Speaking at the event, Babatunde Paul Ruwase, president, Lagos Chamber of Commerce & industry, said that the world is becoming more interconnected everyday, due to the accelerating rate of technological advancement hence the need for cybersecurity and protection against damage and attacks.

“Highly publicized breaches of supposedly secure systems, even those maintained by top

From left: Nneka Uzoukwu; trustee, Ogbonnaya Agbafo; legal adviser, Omife I Omife; president and Ike Ikegbunam; secretary, all of Business Renaissance Group (BRG) during the Group’s special media briefing held at Airport Hotel, ikeja recently.

companies, cast fear into the general population that their personal information could be exposed. This makes cybersecurity an increasingly prevalent topic.

As stakeholders in this area, we must constantly collaborate to generate new strategies that can effectively overcome the latest cyber threats, Ruwase said.

According to him, the relevance and commonality of identity is increasing, and financial services providers, IT firms, mobile operators and other private

entities are scrambling to find ways to stem the tide of this costly form of digital robbery.

He mentioned in his speech that the Importance of cybersecurity can never be over emphasized.

“One of the importance centers on privacy. Organisations must recognise that both their data and their client’s data are at risk. An article published by the Electronic Frontier Foundation, an international non-profit digital rights group based in Califor-

nia, revealed some of the tactics that hackers use to access private digital information,” he said.

Acknowledging these threats, stakeholders agreed that organisations that store data, must properly secure their data network, or else, they may be placing their interests and client’s interest at risk.

“Cybersecurity threats could affect an entire country, economy or global infrastructure. For context, unidentified hackers waged a massive attack on top

level domains in Turkey about four years ago, effectively shutting down access to any website. This event has exposed the world to a new reality, wherein a successful attack on an entire country’s internet infrastructure is feasible.

Therefore, this proves that cybersecurity is not only a necessity to protect the privacy data networks and infrastructural elements. It is our collective efforts to ensure cybersecurity in Nigeria keep up with blossoming technological applications and increasingly comprehensive data sharing,” Ruwase said.

More so during an interview, when asked about the increase in telecommunication tax, the LCCI president opined that the problem is accountability and poor management of funds.

He said, “It is good to raise taxes but then there must be accountability. There must be a framework on how it should be managed. With the increase of telecommunication tax, how are we sure that it will be applied in the form and for the purpose it is meant to meet.

Except we put our houses in order, we have had enough taxes and levies. Let’s start doing accountability, direct such funds for the purpose they are meant.”

HP showcases latest innovations, unveils advanced tech products in Nigeria JUMOKE AKIYODE-LAWANSON

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lobal ICT company, HP, producers of premium laptops, has once again made good on its promise to continue to provide its Nigerian customers with the latest innovative products, as it recently launched its newest enhanced technology products into the Nigerian market.

In an event held at Film House Cinemas, Twin Waters Entertainment Centre in Lagos, HP featured a run through of some of the innovations and advancements which the company has brought to its premium, midrange and entry level laptops.

Speaking at the event, Adeyinka Fakunmoju, HP’s consumer personal systems category manager for central Africa, said that HP’s mission has always been to

meet users’ expectations for innovative products through its laptops, especially with the Envy, Spectre, Omen and Pavilion series.

Taking guests which included the media through some of the advancements that have been introduced into the new HP Envy product range, Fakunmoju said that the latest products showcases the cutting-edge technology that HP is known for, while introducing a more matured performance within a very costeffective price.

“One of the features we want to showcase today is the fact that within the Envy 2019 products, we introduced and enhanced the PCs with more security features.

That means with the Envy lineup, we are giving you the most secure consumer device in the market. And I can say that catwww.businessday.ng

egorically and boldly anywhere,” he said.

According to Fakunmoju, with the Omen range, HP has reinvented the gaming experience, by providing the best performing PC without restriction to enhance their gaming lifestyle, these devices come with top-class graphics card and processor.

“At HP we provide PCs that deliver on amazing designs without compromising on quality, our amazing devices are breath-taking, it also gives guaranteed hardware power and long-lasting battery life to do more. What we are offering is peace of mind,” he said.

He stressed further that within the Envy series, HP has introduced the latest technology available within the consumer line-up that are insured against visual and virtual hacking.

“In terms of the design, we’ve

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tried to bring forward the features we’ve seen in consumer electronics within our houses, even within fashion. We’ve seen that there is a growing trend of wood coming into the home, and we are trying to bring wood panels into consumer laptops.

“With the HP Envy, we are bringing the wood design into the market. We are very excited about this. The wood design is unique to every design that you see. The authentic walnut that we use on these designs is unique to each device. The same way your palms don’t having the same prints, there are no two Envy that have the same wood print,” he added.

With security becoming more of a concern among today’s device users, Fakunmoju said that HP ramped up the security features in the new Envy device with a privacy switch on the camera as @Businessdayng

well as camera kill switch. This is in addition to a more secure BIOS, a finger print reader that gives an extra level of security, as well as a Sure View feature which prevents intruders from seeing what the user is working on. With a Fast charge feature that allows for 19 hours’ battery life, the HP Envy can be operated in tent mode, flat mode and full tablet mode.

Also speaking, Jenny Ani, HP’s trade marketing manager, central Africa, said that HP strives to provide the right product for customers’ year on year, she further said that HP products are sold at affordable prices at HP authorised retail stores. “Our products come with one-year warranty and after sales services nationwide”.

The event also featured an experiential session, with guests given an opportunity to have a feel of the new HP Envy laptops.

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property&lifestyle New value proposition in market offers investors 2-yr rent upfront Stories by CHUKA UROKO

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s Nigeria’s economy struggles, crimping household income and shrinking consumer purchasing power, real estate developers are offering value propositions aimed to entice investors and stimulate demand.

One of such developers is Mixta Nigeria, a major player in the market where it is offering affordable housing across various income segments— low, middle, upper middle and upper class home buyers.

Mixta Nigeria is a member of Mixta Africa—a pan African property developer with subsidiaries in many African countries including Senegal, Cote D’voire, Tunisha, Morocco, etc. It is currently perfecting plans to open offices in two more African countries.

“Instead of buying land for N12 million elsewhere and, in the next five years, the land is still there undeveloped, you can buy a house from us and, if you don’t want to live there, we can rent it from you and even give you two-year rent upfront,” said Kola AshiruBalogun, Mixta Nigeria’s managing director.

He explained that , once

…opportunity for buy-to-let, Diaspora Nigerian investors the company gets a commitment from an investor who buys from their scheme, they would look out for a renter who would take up the property and there is always demand for such housing.

This arrangement has worked so well for the company that, this year alone, it has sold over 100 housing units. Ashiru-Balogun says that if it were some years back they came up with this product, they would have sold a lot more units. “What we have seen is a reflection of what the economy says. We see this product as one that can drive our business going forward,” he said.

He assured that apart from the returns on this investment, there are also other offerings that go with those houses. For instance, for a-N13 million house, the company packages National Housing Fund (NHF) for whoever buys. And the requirement is simple.

“You are required to put down 10 percent equity which is N1.3 million. The remaining N11.7 million will be in mortgage. Depending on the number of years, that means a monthly payment of

N100,000. The rent that I will be giving to the buyer will be about N700,000.

“This means that at the end of each year, the investor has, at least, N500,000 in his pocket. This is not a bad investment and it is why reason I always tell people that the best time to invest in real estate is what there is equity built into it,” he said.

As it is always said, there is opportunity in real estate.

Location is no longer a big issue because there is no perfect location. The managing encourages investors to buy now because, once the homes are delivered, the prices will go up.

The company has started designing houses which people can buy for the same prices they buy land. For instance, at their Beechwood Park Estate in Lekki, Lagos, their prices start from N13.5 million. This is the price of a 2-bedroom terrace house.

“We are also building 3-bedroom semi-detached house for N16 million. I can tell you that we are the only one selling that size of housing at that price within that location,” Ashiru-Balogun said.

According to him, when Mixta Nigeria designs products, it designs for every income group including chairmen of companies, managing directors, managers, sundry employees and income groups.

Therefore, the company

has products at different prices to address the needs of these people. It has products from N6 million to over N100 million. But their N6 million product is usually land.

“We have sold a lot of land and it has been successful. In

driving what we call our vision and what we really want to do, we don’t enjoy selling land to people and in 10 years the land is still fallow. We would rather sell land to people and they can move in there with their family in a short while,” he said.

Homeownership opportunity beckons as Lagos delivers Ilubirin Foreshore in 24months Good news for Oyo dry port land owners or the many Lagos “The Ilubirin Scheme has in its entirety so as to actualize was committed to completing as govt assures on compensation residents desiring to not been set aside, we are the vision of the upscale and all abandoned housing estates

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own their own homes opportunity is beckoning on such people as the state government strives to complete and deliver the first phase of Ilubrin Foreshore housing scheme in the next 24 months, precisely in the third quarter of 2021 (Q3 2021).

Moruf Akinderu-Fatai, the state’s commissioner for housing, who disclosed government’s efforts at a meeting with the representatives of First Investment Property Company (FIDC), debunked speculations that the housing scheme had been abandoned.

working on it. We have a solid plan to deliver the first phase of the scheme not later than the third quarter of 2021,” he said.

Continuing, he said, “as part of our commitment to ensure that more Lagosians became homeowners, the state government is determined to complete the first phase of the on-going Ilubirin Foreshore Housing Estate project in Lagos Island Local Government Area of the State.”

The commissioner said the project which was presently a public-private collaboration endeavour would be reviewed

captivating mixed use development befitting of its strategic location along the lagoon.

According to the commissioner, the plan of the present administration to create liveable cities and regenerate existing ones would be fully incorporated in the review process so as to inject new life in the neighbouring communities.

“However, the process of re-examination will be accelerated because the need to close the housing deficit gap is quite urgent, he said, assuring that the present administration

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in the state in accordance with global specifications.

“We are here to set new bars in housing development.

We intend to do that through setting good examples with our own estates,” He said.

He added that the state was determined to complete the Ilubirin Foreshore Housing Scheme and other ongoing housing projects so as to make more Lagosians homeowners irrespective of their ethnicity or political leaning.

Earlier, Wale Bamgbelu of FIDC said the master plan for the scheme was based on a world class housing estate scheme anchored on the live, work and play pattern, having not only residential facilities but also other facilities of global standard including cinema halls and shopping arcades.

Ilubirin Estate is a public foreshore housing project initiated in 2014 and being developed on reclaimed land in Ikoyi Island, Lagos at the base of the Third Mainland Bridge.

The project is facing the Lagos Lagoon waterfront on Lagos Island. The scheme will deliver 472 housing units comprising blocks of 2 and 3-bedroom flats, terraces and penthouses plus commercial units and recreational facilities.

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REMI FEYISIPO, Ibadan

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t is pretty piece of good news for the native owners of the acquired land for New Ibadan Inland Dry Port project as the Oyo State government has begun processes towards enumerating them for compensation. About 300 hectares of land is expected to be used for the project.

Abiodun Abdu-Raheem, the state’s commissioner for lands, housing and urban development, stated this at a meeting with royal father’s from Akinyele Local Government which was held at the conference center of the local government secretariat in Ibadan, the state capital.

Abdu-Raheem who appealed to the Royal Father’s to talk to land owners not to scuttle the process of enumeration, assured that the present administration would adequately compensate those whose lands were affected.

“The state government is ready to enumerate original land owners in Akinyele Local Government whose land would be used for new @Businessdayng

Inland dry port as well as the rail line for development of the area; once the government acquire the land, adequate compensation would be made to the original land owners as well as farmers who planted on the land,” the commissioner assured.

He said the project was going to be massive and a positive development for the area as socio-economic activities would be boosted because of the dry port as well as the rail line.

Earlier, Ademola Ajibola, the Permanent Secretary at the ministry, had harped on the need for cooperation from those concerned, adding that the dry port would be of immense benefit to people of Akinyele Local Government.

Oba James Odeniran, the Alakinyele of Akinyele, as well as Baales of the community called on the state government to consider resettlement of those whose villages and farmlands would be affected.

They also commended the government for considering Akinyele Local Government for the developmental project.

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property&lifestyle More worries for buyers as Nigeria slumps in World Bank’s property registration ranking

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here is no respite in sight for Nigeria’s troubled real estate sector as the latest doing business report by the World Bank ranked the ease of registering a property in the country at 183, one of the worst positions among its Africa peers.

With the current ranking by the Washington-based lender, the most populous nation in Africa, which is faced with a housing deficit of more than 17 million units, was only better than 7 countries from the 190 that were surveyed.

BusinessDay analysis of the 16th edition of the ease of doing business report revealed that Ghana which has almost the same population size as Lagos, Nigeria’s business hub, and South Africa, the continent’s most industrialised country, were ranked ahead of Nigeria.

Ghana was ranked 111th country with the most ease of registering property while South Africa stood at the 108th easiest country to register property.

It takes 33 days to get a property registered in Ghana.

If that is to be done in South Africa, it will take 10 days less, meaning that one can obtain a property document at the end of 23 days in South Africa.

However, the case is not the same in Nigeria as the World Bank data stated it takes three months and two days to get the same property documentation.

“Nigeria (Kano) made property registration less transparent by no longer publishing online the fee schedule and the list of docu-

…country placed at 183rd position out of 190

FM: Key to wellness in the workplace

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ments necessary to register a property,” the report said.

Before the World Bank report was released on Thursday, October 24, 2019, the Lagos State Business Made Easy (BME) document driven by the Presidential Enabling Business Environment Council (PEBEC) said the new land documentation reform that is technology-driven has simplified the process by making online payments possible, automating procedures, and reducing charges.

“Total time required to register property has reduced from 105 days to 75, and the total number of procedures required to register property has reduced from 12 to 8,” the document read.

But the latest data by the World Bank revealed that Nigeria still requires 12 different procedures to obtain the document for a real estate development. In Ghana, that

involves only 5 procedures.

According to the BME document, before the implementation of the title reform, applicants seeking to register a property in Lagos State “were required to pay fees at different stages and carry out visits to the land registry before registration could be completed.”

Further analysis of the World Bank data revealed that while it takes 111 days to get a construction permit in Nigeria, the same papers can be obtained in 155 and 170 days in South Africa and Ghana respectively.

But the document is more expensive in Nigeria than the combined cost in Ghana and South Africa. It cost 27.5 percent of the warehouse value to acquire a construction permit whereas in Ghana and South Africa it each costs 4.6 percent and 2 percent respectively.

“Nigeria (Lagos) made dealing with construction permits less costly by eliminating the Infrastructure Development Charge (IDC, the fee for construction permits) for warehouses,” the World Bank said.

According to Ayo Ibaru, COO/Director, Real Estate Advisory at Northcourt, the land documentation process has improved but still leaves much to be desired for the Centre of Excellence.

“The governor’s consent by many accounts can be obtained within 3 - 6 months of completing the application.

The cost, however, could be improved as officials still charge approved and not-soclear fees at different stages of the process,” Ibaru said.

A recent report by PWC said an estimated 95 percent of household dwellings in Nigeria do not have a title or a contestable title.

Here’s what Nigeria needs to do to address its housing challenge SEYI JOHN SALAU

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igeria, as a country, has a housing challenge that borders on insufficient stock, low ownership level and lack of demand enabler in terms of mortgage or low-rate housing finance.

Individual efforts at increasing the stock by way of developing more houses, coupled with talk shows offering insights into possible solutions, have not helped to reduce the demand-supply gap or increase the ownership level estimated at 17 million units and a little above 10 percent respectively.

But the situation is not helpless. Kennedy Okonkwo, CEO and founder of Nedcomoaks, a Lagos based real estate company, says industry collaboration is critical, espe-

cially for solving the current 17 million housing deficit in the country.

“The housing problem in Nigeria cannot be solved by my company or any single individual; not even government; it requires collaboration. Population is on the increase and as population increases so also the need for housing will increase,” Okonkwo said.

“As more people move into Lagos in search of better livelihood, the opportunities for the housing sector also increases,” noted Okonkwo who spoke at a recent press conference to unveil the maiden edition of the Victoria Crest Home (VCH) property festival, held in Lagos.

According to him, the bottom of the pyramid is fatter and not everybody will want to live in a place like Ikoyi.

“I advise developers, parwww.businessday.ng

ticularly those that I mentor, that there is a need to do research on the segment of the housing market to play in; the middle class have a great deal of opportunities, they are strong and growing; so anybody building for the middle class will never go wrong,” he stated.

Victoria Crest Home, which is the leading brand in the Nedcomoaks group recently delivered Victoria Crest Estate 1, 2 and 3 and have also diversified the brand with Victoria Bay 1-3; Victoria Nest and the Alexandria Terrace.

“At Victoria Crest Home, our aim is to make ‘aspirational living’ affordable; that is making comfort affordable in our estates with the provision of uninterrupted power supply; treated water supply; and recreational facilities that include playground, swimming pull,

gym and others,” he said.

Sp eaking fur ther on the VCH property festival, Okonkwo said the newly completed Victoria Bay Estate with 226 housing units will be launched. “We also used the occasion to launch the joint-ownership property platform with the aim of attracting Nigerians in Diaspora who desire to own a property; to buy into the scheme by owning about 20 to 30 percent of the property and can start generating income from the property,” he stated.

Okonkwo disclosed that the goal of Nedcomoaks as a player in the real estate space was to ensure that everybody who desired to own a piece of Lagos could actually own it with $10, 000 or N4 million depending on the kind of payment he wanted to key into in the scheme.

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ime is right for a new, more ‘evolved’ facility management (FM) model that is broader and offers a more holistic understanding of both buildings and people. The benefits to the industry, and its clients, will be immense.

Facility management has always been an evolving discipline, a dynamic profession responding quickly and effectively to emerging needs, new opportunities and rising expectations. Facilities managers, whether internal or external, are in the business of delivering services that support organisations and their people, which is why facilities services are often referred to as support services.

FM contributes both directly and indirectly to the success of those organisations as a strategic function even though too often this critical point is missed as many view facility management as simply a collection of operational services that can be delivered on a least-cost model.

Unfortunately, some within the industry also share this view. Inevitably, that approach has effects on an

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ENDURANCE OKAFOR slip

Infrastructure Maintenance With Tunde Obileye

Wellness is a vital and broad idea comprising seven dimensions: physical, emotional, intellectual, social, spiritual, environmental and occupational organisation beyond just reducing bottom-line costs.

The reality is, the least-cost argument is as inaccurate and unhelpful as the case for the world being flat.

We live in a time of remarkable global change as new technologies, new commercial realities, new social and economic conditions all combine to shift our views and experiences of work and Nigeria cannot expect to be left out of this new wave of change despite the current level acceptance of the facility @Businessdayng

management industry in the country.

What it is, how it is done, where and when are all factors to be considered. An important part of this is a new focus on responsible business, sustainability for our communities, buildings that work, and health & wellbeing for individuals: all factors within the concept of wellness.

Wellness is a vital and broad idea comprising seven dimensions: physical, emotional, intellectual, social, spiritual, environmental and occupational.

In today’s ‘new world’, FM has both the opportunity and the obligation to play a full role in many of these vital areas and to take a positive lead in some if not all. FM can be the discipline known for its reliable and effective support for the new realities of work, pioneering in areas such as service quality, user experience, wellbeing and sustainability, to meet needs and raise the standard of response even further. And in doing so, there is the opportunity to make a widely recognised mark as a truly value-adding business discipline critical to success.

People, organisations and buildings all need to work towards the same goal, an aim expressed in the idea of wellness and the benefits this brings to both people and the organisations they work for. It has taken about two decades for those promoting and advocating the ideals of FM in more advanced societies than Nigeria to spread the message that facilities management is not just about buildings but about the people who use them, too.

We now need to move much more quickly to a more holistic offer that spans the crucial interactions between people and their buildings to ensure optimal efficiency, effectiveness, comfort, productivity, safety and health.

It is my hope that fellow facility management practitioners and stakeholders will see the need to align with this new and more ‘evolved’ FM model so that clients/end users can get the worth of FM value contributions.

Obileye is a UK-trained lawyer and CEO, Great Heights Property and Facilities Management Limited Email: Tundeobileye@greatheightslimited.com

Tuesday 29 October 2019

BUSINESS DAY

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news

2019 Alaghodaro: Shell, Dangote, Nosark Group, KPMG, lead others to summit’s third edition

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s preparations intensify for the third edition of the Alaghodaro Summit, leading firms in Nigeria including Shell Nigeria, the Dangote Group, Nosark Group and KPMG, among others, will lead local and international businesses to this year’s summit.

The 2019 Alaghodaro Summit is organised to mark Governor Godwin Obaseki’s third year anniversary and would host the crème of Nigeria’s business community in recognition of the ease of doing business reforms initiated by the Obaseki-led administration in Edo State.

In a statement, Crusoe Osagie, special adviser to the Edo State Governor on Media and Communication Strategy, said the state government’s businessfriendly posture had earned it investors in the burgeoning private sector space, which has made the state a darling for investments in agriculture, power, oil and gas, and many others.

He said, “In the last three years, we have witnessed an incursion of businesses into the state to take advantage of the reforms being implemented by the

Governor Godwin Obaseki-led government. One of the iconic things we have done for the business community is to ensure that that we respect the sanctity of contracts and also make doing business in the state seamless.”

According to Osagie, some of the prominent guests at this year’s Alaghodaro are the managing director of Shell Nigeria, Osagie Okunbor; executive director, Dangote Group, Halima Dangote; chairman, Nosark Group, Toni Ogunbor; Toni Adepoju of KPMG Nigeria, among many others.

“The state government has invested in infrastructure to ensure that businesses thrive in the state. We have made air transport easier through collaboration with Federal Government agencies.

For instance, for the first time in a long while, aeroplanes can now fly into Benin at night and in hazy weather, which was made possible by the state government’s investment in upgrading the Benin Airport for such operations.

This gives people coming into the state multiple options, even as the number of airlines operating in the state has increased.”

AXA Mansard to sponsor 2019 Lagos Kids’ Mini Marathon

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XA Mansard, a member of AXA, a leader in insurance and asset management, is set to partner the 2019 Lagos Kids’ Mini Marathon holding on Saturday, November 2, 2018, in Ikoyi, Lagos. AXA Mansard Insurance plc is the official insurance sponsor of the event.

The Marathon, which is themed “Active Kids Rock,” is the third Edition of what has now grown to become an annual family event promoting sports and healthy living with a focus on children.

It is an opportunity for families and friends to bond and create memories that will last a lifetime while inspiring kids to become more physically active for a lifetime from an early age.

Speaking about the event, Nkiru Umeh, head, brand/communications at AXA Mansard Insurance, stated, “We are always excited to be a part of this iconic event as we once again partner with St. Saviours School to further

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Stakeholders seek focus on digital services to boost Nigeria’s economy … as Nigeria commences test-run of 5G tech to deliver broadband services Jumoke Akiyode-Lawanson

promote wellness in the society.

Beyond this, it is also an opportunity to contribute towards helping disadvantaged children and ultimately promoting excellent primary education in Nigeria.”

Commenting further, Umeh said, “At AXA Mansard, we will continue to be at the forefront of health improvement and look forward to making a difference in the lives of kids, young adults and the community at large. Supporting the Kids’ Marathon is our way as a leading insurer, of throwing our weight behind the leaders of tomorrow. We remain resolute in making Nigeria and the world at large a healthier place. We look forward to an exciting event this Saturday and we hope the children have a great time.”

AXA Mansard Insurance is a member of the AXA Group, the worldwide leader in insurance and asset management with 166,000 employees serving 105 million clients in 62 countries.

Access Bank completes post-merger integration of platforms ccess Bank plc Monday announced that it had successfully completed the second phase of its integration, where it had brought together all her core banking platforms onto a new, highly scalable and robust world-class platform.

The bank in a statement said the completion of this phase heralded the delivery of one of the most robust banking platforms in the world that would serve the bank’s rapidly growing base of over 30 million customers seamlessly and enhance its service delivery and uptime targets to facilitate customer delight in its banking services One of the benefits of the integration is the simplicity of initiating and receiving bank transfers, as customers will no longer need to select between ‘Access’ or ‘Access (Diamond)’

L-R: Godfrey Ogbuehi, MD, Cititrust Financial Services; Derek Omoleh, divisional head, strategy/corporate development, Cititrust Holdings; Yemi Adefisan, group chief executive, Cititrust Holdings plc; Haruna Jalo-Waziri, CEO, CSCS, and Muyiwa Kushimo, MD, Cititrust Realties, at the BusinessDay Banks’ and Other Financial Institutions (BAFI) Awards in Lagos, where Cititrust Holdings plc was recognised as Investment Holding Company of the Year.

when transacting. Customers simply need to select ‘Access Bank’ for all transactions.

Herbert Wigwe, group managing director, Access Bank, lauded the various committees for their effort during the period of the integration, saying, “A Special thank you to the integration committee for ensuring all the milestones expected at the various stages of integration were achieved within the scheduled timeframe.”

Appreciating customers for their unwavering trust and support throughout the integration phase, Victor Etuokwu, executive director, retail banking, Access Bank, said the bank was now better positioned than ever to serve its customers with the best solutions and service the industry has to offer.

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o fully embrace the possibilities that digital technology has to offer, both the private and public organisations have to be willing to use agile approaches in which requirements and solutions evolve over time.

Through adaptive planning, evolutionary development, early delivery and continuous improvement, agile development methods encourage rapid and flexible response to change.

These were the consensus of speakers at the maiden Mobile and Disruptive Technology forum (MoDiTECH2019) organised by TechEconomy. ng in Lagos recently.

Participants at the forum were exposed to how industry leaders are using disruptive technologies such as Mobile Internet, Automation of Knowledge and Work, Internet of Things (IoT),

Cloud Technology, etc. to improve the quality of life for people and redefining business models such as Agritech, FinTech, e-Billing, e-Commerce, e-Governance, e-Payments, transportation, smart city, etc.

Umar Garba Danbatta, executive vice chairman (EVC) of the Nigerian Communications Commission (NCC), said through its regulatory excellence, the Commission was at the forefront of unleashing the digital economy that would spur industrial growth, job creation, and Return on Investment (RoI) for investors.

According to Danbatta, the internet is at the leading edge of digital revolution, which informed why NCC is supporting operators to deploy more infrastructure.

“Today, Nigeria has started a test-run of 5G, the latest technology for delivering broadband services and such other services as Internet of Things (IoT), Artificial Intel-

ligence (AI). The trial will last for three months. Nigeria hopes to join other countries which are in a rush to deploy the 5G technology because of its immense promise for digital communication,” Danbatta said.

Danbatta, who was represented by Bako Wakil, director, technical standards and network integrity at NCC, also disclosed that the Commission was “at the verge of sending the N65 billion requests for supporting the already six infrastructure companies (InfraCos) licensed to roll out broadband infrastructure across the country, to the Federal Executive Council (FEC) for approval.”

Meanwhile, Danbatta expressed concurrence of the Commission to the renaming of the Ministry of Communications to ‘Federal Ministry of Communications and Digital Economy,’ saying, “The renaming of the Ministry shows a demonstration of the future of telecoms in all government

sectors and the economy; the EVC, therefore, commended the Isa Pantami, the minister of communications and members of the Federal Executive Council for the foresight and dramatic change.

This will spur a new debate and redirect the Ministry and other agencies under it as well as the private sector to a new awakening that digital economy brings.”

In a keynote presentation titled: ‘Social and Global Impact: Engaging for Growth,’ Austin Okere, founder/vicechairman of CWG plc, recalled that in 2018, the mobile ecosystem contributed more than $500 billion to the funding of the public sector through general taxation, globally.

According to Okere, Nigeria, as among the three smartphone super-powers to emerge by 2025, stands to benefit from the smartphone ubiquity across the world that enables consumer engagement in numerous use cases.

Concerns over Customs’ double examination of containers bound for inland ports ... multiple checks of cargoes constitute demurrage for cargo owners - stakeholders AMAKA ANAGOR-EWUZIE

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hippers have raised concern over the new directive of the Nigeria Customs Service (NCS) mandating its officials to examine containers and other cargoes destined for inland container depots (ICDs), also known as Dry Ports.

According to them, the new Customs’ directive will defeat the gains of Ease of Doing Business – which centres on trade facilitation and decongestion of the seaports in Lagos.

The directive, issued by Hameed Ali), comptroller-general of Customs, has enabled Customs officials in Apapa and Tin-Can Island ports as well as other approve entry points to hold, open and examine all

www.businessday.ng

containers and other transit cargoes destined for inland dry ports at Kaduna and Kano.

Recall that at the commissioning of the Kaduna Port, President Muhammadu Buhari directed Customs and all other agencies in the trade value chain not to introduce bottlenecks that would hinder the patronage of the dry ports by shippers.

Contrary to this, Ali ordered that all cargoes destined for the dry ports should be opened and examined at the seaports in Lagos before transferring them to the inland ports.

Kaduna port has been designated as port of origin and destination, meaning that goods are exported and received at the port, while the job of examination of the consignments is also done there by

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Customs officials present at the Kaduna port.

“This is what we call multiple checking of containers that have not gotten to their destinations. The idea is not proper because these consignments are supposed to be treated as transit cargoes, and we, the Customs Licensed Agents are seriously against this directive,” said Tony Anakebe, managing director of Gold-Link Investment Limited, a Lagos-based clearing and forwarding firm.

Anakebe, who spoke with BusinessDay in a telephone interview, said that the directive would also result to increasing cost of doing business at these Inland Ports.

“It will constitute more demurrage for cargo owners because instead of such containers being on transit upon @Businessdayng

arrival at the seaport, it will be delayed for days to enable Customs to examine the cargoes before they are allowed to transit to the destination Port,” he said.

According to Anakebe, if Customs continues to open and examine these consignments before moving them to the port of destination, it will also put the safety of the cargoes into jeopardy. It is a cumbersome procedure that would also jeopardise the gains of the Federal Government Ease of Doing Business policy.

Jonathan Nicol, president of the Shippers’ Association of Lagos State, who described the directive as ‘counterproductive,’ said containers were examined at the final destination in the presence of the importers or the agents.

36 BUSINESS DAY

Tuesday 29 October 2019

news Oando declares profits in Q3 2019

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n ongoing narrative across board has been poor sentiment for equities; specifically equities have been dragged down by weaker macroeconomic indicators, which has stifled earning expectations and increased appetite for debt securities.

Against this backdrop Oando published its financial results for the month ended September 2019, posting another profit. Without a doubt, 2019 has been another challenging year for the company, not just in terms of external factors beyond its control but an ongoing conundrum with the regulator. Despite this the company’s results show that a management team that has worked aggressively to maintain a trend of positive results reflected in higher production and profit after tax.

An analysis into the company’s financials for the month ended September 30, 2019 shows that its turnover decreased by 18% to N413.8billion compared to N505.1billion in same period of

2018; total borrowing decreased by 8% to N193.1bn from N210.9bn in comparative period of 2018 while its production grew by 8% to 43,045 boe/day from 40,039 boe/day in Year-to-Date (YTD) September 2018.

The increase in production was driven by an 11% increase in natural gas production and an 8% increase in crude oil production. To cap this, Oando recorded a profit after tax of N13.1bn a 26% increase from N10.4bn in same period of 2018.

A review of the company’s activities in YTD ended September 2019 shows proactive work to drive increased revenue in the medium term. To this end Oando recently announced that the NNPC/NAOC/ OANDO Joint Venture (of which Oando Energy Resources, the upstream subsidiary of Oando plc, holds a 20% working interest) had made a significant gas and condensate find in the deeper sequences of the Obiafu-Obrikom fields in OML 61, onshore Niger Delta.

Emefiele lists gains of border closure ... says Nigeria neighbours encourage smugglers Tony Ailemen, Abuja

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entral Bank of Nigeria ( CBN) governor, Godwin Emefiele, on Monday listed benefits of the current border closure to include increased patronage of Nigeria’s home-grown rice, poultry products and jobs creation.

Emefiele, who stated this while speaking with State House correspondents after meeting with President Muhammmadu Buhari on Monday, noted that despite the complaints about the border closure, rice millers and poultry farmers were smiling to the banks.

According to Emefiele, “A week after the borders were closed, the same rice millers association called to tell us that all the rice that they had in their warehouses have all been sold.

Indeed, a lot of people have been depositing money in their accounts and they have even been telling them ‘please hold on don’t even pay money yet until we finished processing your rice.’

“The Poultry Associations have also come to say that they have sold all their eggs, they have sold all their processed chickens and that demand is rising.”

The CBN governor, who disclosed that the borders would not be closed perpetually, however, stated, “Before the borders will be reopened, there must be concrete engagements with countries that are involved in using their ports and countries as landing ports for bringing in goods that are smuggled into Nigeria.

“That engagement must be held so that we agree on the basis under which conditions the kinds of products they import can land in their countries, because if those products they land in their countries are meant for their own local consumption, it is understandable.

“So when you asked, what is the benefit, the benefit of the border closure on the economy of Nigeria, I just used two products - poultry and rice.

“The benefit is that it has helped to create jobs for our people, it has helped to bring our integrated rice milling that we have in the country back into business again and they are making money.

“The closure has also led to increased economic activities in the rural communities as rice and maize farmers have increased production with attendant increase in revenue generated.

“The poultry business is also doing well, and also maize farmers who produce maize from which feeds are produced are also doing business. These are the benefits.”

He recalled that the launch of the Wet Season Rice Farming in November 2015, by President Muhammadu Buhari, the Central Bank and some state governors in Kebbi State under the CBN Anchor Growers Programme led to increase in production of local rice.

According to him, “We have seen an astronomical growth in the number of farmers who have been going into rice farming and our paddy production has gone up also quite exponentially.

Between 2015 and also now, we have also seen an astronomical rise in the number of companies, corporate and individuals that are setting up mills, integrated mills and even small mills in the various areas.”

He noted that the CBN and the Federal Ministry of Agriculture and Rural Development had been the centre of not just only encouraging the production of rice in Nigeria but also funding these farmers by giving them loans to buy seedlings, fertilizers or some of the herbicides they need for their rice production.

“You will all recall that we have been embarking on a programme where we are saying if you are involved in the business of smuggling or dumping of rice in the country, we close your account in the banking industry.

Although that is coming very effectively,” he said. www.businessday.ng

L-R: Henry Asiegbu, regional bank head, Awka, Fidelity Bank plc; Afam Mbanefo, commissioner for youth, entrepreneurship and creative economy; Chris Nnakwe, head, corporate social responsibility, Fidelity Bank; Ebelechukwu Obiano, wife of the governor, Anambra State, and Karu Arinze Umobi, deputy vice chancellor, admin, Nnamdi Azikiwe University, Anambra State, at a press conference to further sensitise the public about the ongoing Fidelity Youth Empowerment Academy (YEA6) training programme in partnership with Gazelle Academy and Caring Family Enhancement Initiative (CAFE) in Anambra State.

Stakeholders highlight strategies to resilient multigenerational enterprises ENDURANCE OKAFOR

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ut of the 77 percent of Nigerian family businesses who plan to pass on management to the next generation, only 10 percent have a robust, documented succession plan, Detail Commercial Solicitors reveals.

To enable Nigerian family businesses to become multigenerational enterprises, industry stakeholders at the ninth Detail Business Series, weekend, recommended: Corporate governance, collaboration between founders and new generation, clarity of framework, diversification, policies, among other factors.

According to Audrey JoeEzigbo, co-founder/executive director, Falcon Corporation Limited, institutionalism, the right policies are also the disciplines required to have a successful family business.

“It is important for nextgeneration to understudy the growth, tenacity, and plans

of the founders,” Ezigbo said.

Experts believe that the successful transition of family businesses requires wealth management consulting and the right strategies.

According to a survey by Africa Wealth Partners, family businesses outperform nonfamily businesses by a factor of more than four, but family businesses, typically, very rarely, make it to the second generation.

“To build resilience in our family businesses, we must diversify by building up a performing investment portfolio that has a low correlation with the existing family business, in terms of asset type, geography, industry and currency,” Nike Anani, a Nextgen coach, assisting NextGens (secondgeneration family members in family businesses) says.

According to industry sources, family businesses are the bedrock of the economy, and statistics have also proven that they outperform nonfamily owned businesses.

From generation one to generation two, only 30 per-

cent of the companies make it, while about 10 percent and less than three percent make it from the second to third, and third to fourth respectively.

On why Nigeria is not seeing much multigenerational success Anani said it was a result low level of professionalising the business, lack of integrating and preparing the next generation and the fact that the family human capital is not being developed.

“Effective collaboration between founders, the next generation and non-family staff by utilising an effective corporate governance structure is essential for foolproofing the future of a family enterprise,” Chukwudi Ofili, Associate Partner, Detail Commercial Solicitors, remarked.

In her comment during the panel discussion at the 6th Detail Business Series, Ezigbo said that respect was important to enable a successful family business.

“Founders should respect the next generation that is coming into the business.

Likewise, the next generation should ensure they are respectful when they bring their ideas to the table and should create a budget to deliver end to end.” The cofounder also explained that both generations are bringing value and we must find a midpoint.

The importance of corporate governance structures was also a key outcome of the Business Series. Temidayo Ajaji, senior associate, Detail, stated, “There is no one-sizefits-all approach for family governance as it is dependent on the family dynamics and it varies as newer generations come into the business.”

Speaking to one of the ways enterprises can ensure they are ready to compete, Anani stated that “Diversification is like a weapon you are preparing in anticipation of war. The more diversified you are as a family, the more potent your weapon is. We need to be proactive, diversifying constantly, during the good times and the bad times. To stop diversifying at any time, leaves us vulnerable to attacks.”

STL Trustees wins Trustees of the Year Award

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or the second consecutive year, STL Trustees has emerged “Trustees of the Year” at the annual BusinessDay Banks’ And Other Financial Institutions (BAFI) Awards held in Lagos recently.

Now in its seventh edition, BAFI Awards are universally recognised as the benchmark of excellence in Nigeria’s financial services industry. “BAFI Awards seek to identify and celebrate the financial institutions and leaders that have excelled across a number of areas, including financial performance, shareholder value creation, brand value growth, corporate governance, sustainability, employment of new technology, compliance, innovation, andcontributiontotheindustry’s overall growth,” Frank Aigbogun, publisher, BusinessDay Media, said in his welcome address at the event.

Collecting the award on behalf of STL Trustees, Funmi Ekundayo, the company’s managing director/

CEO, said: “It is a great honour to be recognized by BusinessDay media Limited as the Trustees of the year.

Last year, when the award to recognize leading financial institutions in the non-banking financial sector was introduced, STL Trustees won the maiden edition of the Trustees of the year award and we are happy to win it again. We thank our clients for the trust they have reposed in us over the years and we salute every other Stakeholder who contributes their quota towards building a virile and respected Brand that continues to innovate its business model with a view to providing unparalleled trusteeship services to its clients. We owe this recognition to them.”

Nominations for the BAFI Awards go through a rigorous review process before finalists are selected, hence to be recognised as Trustees of the year for the second consecutive time by the review committee is indeed a great

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honour for STL Trustees, she said.

Licensed and authorised by the Securities and Exchange Commission as Trustees and Funds/Portfolio Managers over two decades ago, STL Trustees has grown to become a model in the industry due to its expertise and culture of delivering innovative Trust solutions with speed.

STL has consistently played a pivotal role in bridging infrastructural gaps in Nigeria through its active participation in almost all the debt Capital Market Issuances in the past 10 years, which were all geared towards infrastructural development at both the National and State levels.

The company is a delegate Trustee to the first Sukuk issued in the Nigerian Capital Market, the State of Osun Sukuk Al-Ijara which was issued by the government of the Osun State to finance the construction of modern elementary, middle and high schools in the state. @Businessdayng

Among several other Sub-National, Sovereign-Backed, Sub-Sovereign-Backed and corporate Debt Issuance transactions, STL also acts as Delegate Trustee to the first Sovereign Sukuk to be issued in Nigeria; the N100B FGN Road Sukuk 1 as well as the subsequent Issuance, the N100B FGN Road Sukuk II. These instruments were issued by the Federal Government of Nigeria to fund the construction and rehabilitation of some roads across the six geo-political zones in the country.

Speaking on the operating culture at STL Trustees, Ekundayo reiterated that the Firm’s core values are Integrity, Professionalism, Commitment and Innovation. Armed with these corporate values, the Company strives to consistently deliver trust solutions that are guaranteed to meet the needs of both its corporate and individual clients on a continuously satisfactory basis.

Tuesday 29 October 2019

BUSINESS DAY

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news

Concerns as research lists Nigeria among 3 bills to pass second reading, 5 motions to receive consideration as Reps resume plenary countries with 70% cancer deaths ... budget defence continues after October 28 deadline James Kwen, Abuja

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hree Bills would pass second reading while five motions would be considered on Tuesday at the resumed plenary of the House of Representatives, BusinessDay can report.

The first: a Bill for an Act to Amend the Deep Offshore and Inland Basin Production Sharing Contracts Act (2004) to review the Share of the Government of Federation in Additional Revenue under the Production sharing Contracts; and for Related Matters, sponsored by Mohammed Monguno (APC, Borno).

The second Bill is for An Act to Provide for the Regulation and Effective Monitoring of Metallurgical activities in the Mines and Steel Sectors, Metallurgical Inspection and Raw Materials Development in Nigeria, and for Related Matters, sponsored by Ndudi Elumelu (PDP, Delta).

Also for second reading is a Bill for an Act to Establish the Nigerian Security Trust Fund Act, to provide for the Maintenance of the Trust Fund that will carter for the Procurement of Military and Security Infrastructure and Technology for Security Agencies in Nigeria, and Related Matters, sponsored by Rimande Kwewum (PDP, Taraba).

The motions to be considered

by House on Tuesday include: Call to Rehabilitation of IkirunEko Ends Junction-Ore-Ile Ilosin/ Osogbo Road and the Construction of Ilie Bridge Connecting Ile to adjoining Communities and Towns; Need to Rehabilitate the Aguleri-Otucha-EzuanakuOmo-Omasi-Adani Federal Road; and Need to Enhance a Broad Based Agricultural Policy in the Country with Emphasis on Youth Participation.

Other motions for consideration are Provision of Adequate Equipment for Kidney Dialysis Centres with subsidised rate in all Federal Government Facilities in Nigeria as well as Need to Check the Discriminatory Attitudes of the Petroleum Products Marketing Company Limited and Petroleum Product Pricing Regulatory Agency on the Independent Marketers on the Sales of Premium Motor Spirit.

The House had adjourned plenary from October 10 to October 28 to enable members of various Standing Committees hold budget defence sessions with Ministries, Departments and Agencies.

However, BusinessDay checks reveal that about half of the 812 MDAs have not appeared for the defence during the suspension of plenary from October 10 to 29 for the exercise.

Chairman of the House Com-

mittee on Media and Public Affairs, Benjamin Kalu, had announced that from October 10 until Tuesday, October 29, the House would have budget hearing and engagement with MDAs by the appropriation sub-committees.

Kalu said, “From Wednesday, October 30 to Tuesday, November 5, submission and defence of report by the MDAs would be submitted to the Appropriation Committee.

“The termination date for the submission and defence of budget report is on Nove 5. We will not accept any submission or defence from MDAs after then.”

It was gathered that after the deadline, budget defence would continue as most of the MDAs were yet to appear for the exercise and members would have to be alternating between the plenary and budget defence.

A member of the Appropriation Committee who did not want to be mentioned said there was issue with budget defence and plenary holding concurrently, hence that had always been the practice.

“What is big or strange about that? Since 1999 we have always been holding plenary and budget at the same time. It has to do with committees so members of a particular committee can always meet with MDAs appearing before them even if plenary is holding.

CHUKA UROKO

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he apprehension and concerns that cancer as a deadly disease elicits heightened recently over a revelation that 70 percent of cancer deaths occur in developing countries like Nigeria due to late detection.

A research, conducted by the International Agency for Research on Cancer (IARC), says globally over 18 million people develop cancer yearly with 9.6 million deaths. It says further that on daily basis, Nigeria records 32 deaths from breast cancer.

The revelation, contained in a statement BusinessDay obtained from Mission PinkCruise Team in Lagos at the weekend, says latest World Health Organisation (WHO) data show that, globally, there were over 2 million new cases of breast cancer and over 600,000 deaths from the disease in 2018.

Another startling revelation from the statement is that breast cancer also occurs in men, but it is 100 times more common in women.

But Abia Nzelu, a medical doctor working with Mission PinkCruise Team, notes that, because most people are not aware that breast cancer can

occur in men, the disease tends to be picked up much later and is often more fatal in men than in women.

“As we mark the October Breast Cancer Awareness Month, it is necessary to look at an aspect of the disease of which most people are unaware – the relationship between breast cancer and oral hygiene,” Nzelu says, listing the better known risk factors for breast cancer as female gender, increasing age, family history of breast cancer, early onset of menses, late menopause, etc.

“However, scientific research has recently demonstrated a link between breast cancer and oral health.

Women with poor oral hygiene and periodontitis (inflammation of the gum) are up to three times more likely to develop breast cancer. The risk is greater in smoker,” Nzelu states.

He explains that poor dental hygiene and gum disease had also been linked to increased risk of other cancers, including prostate cancer, throat cancer, lung cancer, gall bladder cancer, melanoma and pancreatic cancer.

He notes that several general health conditions such as pneumonia, stroke, heart

Experts brainstorm to increase awareness of thrombosis in Nigeria ANTHONIA OBOKOH

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n an attempt to increase awareness of thrombosis in Nigeria, medical experts and stakeholders say weak approaches may turn preventable conditions into silent killers.

Sanofi, a multinational pharmaceutical company, has brought together a unique set of experts and stakeholders to brainstorm on ways to break the widespread ignorance of the disease, despite it affecting one in four people globally and remaining a leading cause of mortality in the world.

Currently in Nigeria, no data exist on its prevalence.

However, the disease is largely unknown, even among doctors, with some misdiagnosing wrongly.

“Thrombosis have been identified as one of the lead-

ing causes of death, especially blood clot related death, and pregnancy increases the rate of this condition,” Omolade Awodu, professor of Haematology, School of Medicine, University of Benin, said.

Awodu, while speaking on the overview of Venous thromboembolism (VTE) disease in Nigeria, how hospitals can reduce VTE risk in their hospitals, said VTE was also the number one cause of preventable deaths in hospitals and the prevalence was increasing in Nigeria.

“The burden in medically ill patients also increases and acutely ill medical patients are the most vulnerable. Hospital VTE committee should set up awareness meeting and update training,” she said.

Awodu urged healthcare practitioners and also patients on the need to identify the

risk factors to prevent fatality, especially as most VTE cases became fatal even before they had been diagnosed.

Venous thromboembolism VTE can be described as blood clots occurring as deep vein thrombosis pulmonary embolism, or both, it is an important and growing public health issue. It claims more lives than AIDS, breast and prostate cancer, and motor vehicle crashes combined. The main concern is that many people are not aware of this condition.

“VTE also has its social economic burden, as patients would need to spend more days in the hospital resulting to extra treatment cost and reduction in hospital bed space available for other ill patients,” Folake Odediran, general manager and country chairman, Sanofi NigeriaGhana, said.

FG seeks private sector partnership to boost WASH initiative in Nigeria Cynthia Egboboh, Abuja

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he Federal Government on Monday called for private sector partnership in order to meet the sustainable development goal in water, sanitation and hygiene (WASH) targets by 2030.

Suleiman Adamu, minister of water resources, speaking at a workshop on private sector forum on sanitation, said the effort to ensure a healthier environment was a business for all, as Nigeria, having been ranked the number one among countries practising open defecation in Africa, was on the brink of being

ranked first globally.

The minister lamented that approximately 47 million people currently do not have access to sanitation services in its most basic form, adding that besides the exposure to diseases, open defecation also promoted lack of dignity particularly with regard to women and girls.

“Only minimal progress has been achieved in our implementation of the open defecationfree (ODF) roadmap, with only 14 local governments across the country so far being certified as open defecation-free, according to the national ODF protocol,” www.businessday.ng

he said.

“Access to basic sanitation in institutions and public places are not encouraging with the statistics sitting at a meagre 35.7 percent, only 34 percent of schools have access to basic water supply and sanitation facilities,” he said.

The minister further stressed that the role of private sector in the revitalisation of the WASH campaign cannot be overlook, adding that the private sector remained the engine for economic growth and creating innovative structures relating to the financing of hygiene services. https://www.facebook.com/businessdayng

@Businessdayng

disease, problem pregnancy and diabetes mellitus are also linked to poor dental hygiene.

“The prevention and early diagnosis of periodontitis are, therefore, very important not only for the patients’ oral health, but also for their overall wellbeing.

“Periodontitis is a serious bacterial infection of the gum that damages the soft tissue and destroys the bone that supports the teeth. In the early stages, it often presents as bleeding or swollen or painful gums (gingivitis) and sometimes as halitosis also known as bad breath,” he says.

The main causes of periodontal disease, he explains, were poor oral hygiene and tobacco use, saying, “The bacteria most often associated with periodontitis (Treponemadenticola and Porphyromonasgingivalis) enter the bloodstream through the gum.”

He explains further that the bacterial infections become associated with coinfection by viruses such as Epstein-Barr virus and Cytomegalovirus, which act together with the bacteria to suppress the body’s immune response, leading to a proliferation of cancer cells in the body.

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Tuesday 29 October 2019

BUSINESS DAY

news 5 implications of big decline in T-bills trading...

Continued from page 2

tressed by the high earnings and dividend yields in the equity market space,” the Cardinal Stone team, which includes Michael Nwakalor and Jerry Nnebue, noted.

For context, while some select names (especially within the tier-1 banking space) boast earnings yield in excess of 30 percent, the yield on the one-year T-bills is at 13.37 percent.

In addition to this, tier-1 banks are averaging dividend yields of 10.9 percent.

High dividend yields are likely to attract institutional investors such as PFAs, as the potential for capital gains in fundamentally sound stocks further enhances the appeal of the equity market.

Also, the development could lead to an increase in dollar demand pressures as locals may increasingly source forex to take advantage of the likely higher rates at the primary and secondary OMO markets by disguising as foreign investors, according to Cardinal Stone.

Furthermore, the exit of local players who account for more than one-quarter of outstanding bills would reduce the liquidity in the OMO market which could be a source of worry for foreign portfolio investors.

OMO is a liquidity management tool used by the CBN to control the volume of money in circulation.

A central bank injects or withdraws liquidity in its currency through the banks by buying or selling bills.

The tenor of OMO bills, which are traditionally designed to mature within 14 to 66 days, has been extended in recent years up to a year maturity period with interests coming at extra costs to the CBN. Checks by BusinessDay show the CBN has issued more OMO bills since 2017 than it issued in the preceding decade.

The size of T-bills in circulation (OMO bills inclusive) has risen more than four times to N17.78 trillion in August 2019 from N3.7 trillion in 2014.

The frequent OMO auctions by the CBN have led to a record high of its OMO book and the industry regulator is spending over N2 trillion on interest payments for OMO issuance. This compares with an interest expense of N1.3 trillion in 2017 and N459.3 billion in 2016.

“The recent measure is an attempt to shrink the ballooning balance sheet, or at least slow the pace of expansion, without spooking foreign portfolio investors and roiling the FX market,” analysts at Chapel Hill Denham said in a note to clients.

According to data obtained from CBN, outstanding OMO bills stood at N13.8 trillion as at August 2019.

Foreign portfolio investors held N6.1 trillion, while banks held about N3.9 trillion, leaving an estimated N3.7 trillion of OMO bills held by domestic corporates and individuals which cannot be rolled over the next one year following the restrictive policy.

Buhari travels again to lure investors, but his policies...

Continued from page 2

months away in a UK hospital without notifying the country the nature of what ails him.

His aides scamper to reassure Nigerians that he is fit for the job as another new trip leads to speculations and anger over lack of results from previous trips.

Shehu, in a bid to convince Nigerians that the trips aren’t just an exercise in futility, said the total value of capital inflow into Nigeria increased from $12 billion in the first half-year of 2018 to $14 billion for the same period in 2019.

However, an objective analysis of capital importation into Nigeria shows that the bulk of these funds are portfolio investments as many bet on government securities, but an economy that enjoys true investor confidence records higher foreign direct investments (FDIs) which are long term and with bigger potential to grow the economy.

The United Nations Global Investment Trends monitor said countries like Egypt and South Africa are recording more FDIs than Nigeria. Last year, both countries recorded

$7.9 billion (a 7 percent rise) and $7.1 billion (up from $1.3 billion in 2017) in 2018, respectively. FDI in Nigeria, however, fell 36 percent to $2.2 billion in the same year.

Even Ghana recorded better inflows of $3.3 billion, though it has a GPD of less than $50 billion against Nigeria’s over $400 billion.

Olu Fasan, a Londonbased lawyer and visiting fellow at the London School of Economics, said Nigeria’s policy intentions are hardly matched by right actions resulting in ability to attract and retain investments.

“For instance, the central bank’s infamous list of 43 imported items deemed ineligible for foreign exchange through the official window, the extension of the forex ban to all food imports and the recent closure of Nigerian borders were bound to have damaging impacts on industries and foreign trade,” Fasan wrote in a recent article for BusinessDay.

•Continues online at www.businessday.ng www.businessday.ng

Courtesy visit by the Board Members of the FBN Holdings Group to the President of the Republic of Ghana at the Jubilee State House yesterday. Picture from L-R: Victor Asante, MD/CEO FBNBank Ghana; Otunba ‘Debola Osibogun, Director, FBN Holdings plc; Adesola Adeduntan, CEO, First Bank of Nigeria Limited; Oba Otudeko, Group Chairman, FBN Holdings plc; His Excellency, President Nana Akufo-Addo; Ibukun Awosika, chairman, First Bank of Nigeria Limited; UK Eke, group managing director, FBN Holdings plc and Wuro Bokki, Director, FBN Holdings plc.

Fears of rights abuses trail Army’s planned...

Continued from page 1

Federal Road Safety Corps, and voter cards which the Independent National Electoral Commission (INEC) would check during elections.

Sagir Musa, a colonel and acting director, Army Public Relations, in a telephone interview with BusinessDay in Abuja on Monday, said the operations are being planned by the Army ahead of the yuletide season. The operations, he said, would see Nigerians across the country witness a large number of uniformed Nigerian Army personnel parading the roads as part of efforts to tackle insecurity, armed banditry and kidnapping.

Musa had given a breakdown of how the exercises would be executed, including Ayem Akpatuma II in the North Central states of Benue, Nasarawa, Kogi and Taraba as well as Kaduna and Niger States in 1 and 3 Divisions Area of Responsibilities (AOR) including Headquarters Command Army Records, Guards Brigade and 707 Special Forces Brigade.

Others include Exercise EGWU EKE IV, which would

be carried out in the South Eastern part of Nigeria comprising Abia, Anambra, Ebonyi, Enugu and Imo States in 82 Division AOR, while Exercise CROCODILE SMILE IV would as usual take place in the South-South states of Akwa Ibom, Bayelsa, Cross River, Delta, Edo, and Rivers States as well as South Western states of Lagos and Ogun in 2, 6, 81 and 82 Divisions’ AOR. But security experts and human rights activists say this undermines the essence of the Nigerian Army while at the same time exposing millions of Nigerians to violations of their fundamental human rights.

The Army has been accused by rights groups, such as Amnesty International, of committing gross violations against the rights of ordinary Nigerians across the country, and especially in the insurgency-challenged North East.

“Military operations are supposed to be external response to defend the integrity of Nigeria, but nowadays, even at checkpoints or ordinary roadsides, you see the military and that has continued to bring disrespect to the Army,” said Awaal Ibrahim,

Glomobile debt: Deregulation of interconnection...

Continued from page 2

who is to say that another debt complaint will not rear its head soon?

What are interconnection charges?

First, telecom players use the word ‘interconnection’ to refer to an arrangement in which players connect their equipment, networks, and services with other telecom service providers. The NCC currently addresses everything related to interconnection and it also regulates

interconnection charges.

Interconnection charges are the fees telecom service providers collect from another operator for completing calls originating from their network but terminating in another network. For instance, if you originate a call, you pay your access provider, who in turn pays termination charges to the network you placed the call. Telecom companies in Nigeria charge for connecting the call and terminating it. The charges are used to cover the network

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executive director, Civil Society Legislative Advocacy Centre (CISLAC).

He described the entire operations as a carryover of efforts during the military regime to undermine the effectiveness of the police force (in particular) and other paramilitary agencies.

“Unfortunately, even after the return to democracy”, the effectiveness of the police continues to be undermined, he said.

“If the government is interested in strengthening the effectiveness of police and other paramilitary agencies, there will be no need to bring in the Army,” he said.

Aliyu Umar, a retired Army captain who is currently a security consultant, told BusinessDay in a phone interview that every (little) operation now gets assigned to soldiers “and before we know it, our soldiers will become two for 10 kobo”.

“When your soldiers who are meant to be your last resort have become your everyday go-to, then you have a problem,” Umar said.

Umar said for the military to do identification operations for the populace is itself an abuse.

“It is a dilution of the traditional role of the military,” he said, explaining that the different operations are “reusage costs as the operator on whose network the call terminates carries the call on its network to the customers, and this requires infrastructure investment.

Thus, interconnection represents a major source of revenue for telecom companies. Other components of the interconnection charges include international termination charges, transit charges, international settlement rates, carriage charges, and origination charges.

Interconnection charges go back to the early days of mobile telephony service @Businessdayng

ducing the military to roles that ordinarily the police or even other paramilitary agencies should be able to conduct”.

“If (government) feels our police force is not up to the task then there is nothing that stops the country from evolving a national guard, for example. If we had such, they can take up that task (currently being assigned to the Army). The mobile police force merged with civil defence is the national guard we require,” he said.

Eze Onyekpere, lead director, Centre for Social Justice, said the Army has no business with internal security, and the police should have been allowed to do their job.

“We are surprised that the military now wants to start asking people for ID. All the while they’ve been doing different operations, what has come out of it?”

Onyekpere said.

“I suppose they should go to the North East to face Boko Haram and to the North West to face banditry,” he said.

According to him, the Army has not successfully dealt with its primary assignment and now wants to usurp the role of the police even further. when it was generally seen as a rich people’s market rather than for everyone. The technology was new and fairly costly and licensed service providers were significantly very few. In that scenario, it was easy for providers to set high fixed-to-mobile interconnection (or termination) charges as a means of transferring funds internally to their startup subsidiaries.

The practice continued when new service providers were licensed and has become a way of doing business in the market.

•Continues online at www.businessday.ng

Tuesday 29 October 2019

BUSINESS DAY

39

POLITICS & POLICY

Supreme Court hears Atiku’s appeal against Buhari Wednesday …As BMO warns against harassment of apex court INIOBONG IWOK

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he Supreme Court will on We d n e s d ay hear the appeal of the candidate of the People’s Democratic Party (PDP) in the February 23 presidential election, Atiku Abubakar, against the judgment of the Presidential Election Petitions Tribunal that affirmed the election of President Muhammadu Buhari.

The hearing would be coming nearly 50 days after the tribunal’s verdict which affirmed the return of Buhari for a second term in office and nearly 40 days after Atiku and the PDP filed their appeal seeking to nullify the judgment and be declared lawful winners of the presidential poll.

This was disclosed by Taofik Gani, publicity secretary of the PDP in Lagos State, Monday, noting that the party had been notified of the date.

“It is true, it is Wednesday, we have been informed, some people are saying 29th but I can tell you the hearing would commence Wednesday,” Gani said.

Though the apex court is yet to make public the exact date the hearing will commence and list members of the panel, the PDP’s official twitter

page equally confirmed the development Monday.

The tweet reads, “Breaking News! The Supreme Court of Nigeria has scheduled to hear the Appeal of the @OfficialPDPNig and @atiku /@PeterObi, arising from the judgment of the Appeal Court, on Wednesday, October 30, 2019. It’s time

to #RescueNigeria.”

Although the Supreme Court is yet to announce the members of the panel, it is believed that the apex court would not deviate from the norms of nominating the most senior justices into the panel.

Meanwhile, the Buhari Media Organisation (BMO) has warned

Lagos PDP rejects Sanwo-Olu’s N250bn loan request … Calls for probe into state finance, IGR INIOBONG IWOK

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he Lagos State chapter of the People’s Democratic Party (PDP) has opposed the N250 billion loan request by Babajide Sanwo-Olu, governor of Lagos State, alleging that the purpose of the loan was shrouded in secrecy.

Sanwo-Olu had recently sought the approval of the state House of Assembly for the approval of the loan which, according to him, would be sourced through capital market and internally.

He had pointed out that budgetary provisions of both recurrent and capital budget of ministries, departments and agencies are not likely to be utilised before the end of the year and the sum of N34.050 billion can be re-ordered.

However, in a statement to journalists, Monday and signed by Taofik Gani, publicity secretary of the PDP

in the state, the party urged the state House of Assembly to reject the loan request, stressing that any attempt

by LAHA to approve the loan would be a declaration of vote-of-no confidence on itself.

The PDP, however, urged Lagosians to reject the loan request unless the governor allows public defence.

“We hold that 60percent of the sought loan is to be shared amongst the governor, members of the LAHA and notable chieftains of the APC,” PDP alleged.

“We have intelligence report that the state IGR is now around 60 to 70 billion naira every month, but that the actual collections are never made public,” it further said.

The party also urged the state Assembly to summon the governor and his commissioner for finance to explain to Lagosians how the state would not have internally generated revenue (IGR) for the remaining months in the year.

“What the LAHA should rather do is to summon the governor, his commissioner for finance to explain to Lagosians how state would not have IGR for the remaining months in the year.

“Indeed the time is now over due for the IGR collect-

ing private company, Alpha Betta to be reappraised and brought to account to Lagosians. Lagosians have long been short-changed”.

The party accused the Sanwo-Olu administration in the state of needlessly further plunging Lagos State into terminal economic misdirection and decisions, stressing that the state was already indebted to over N2 trillion as local and foreign loans whereas no projects to evidence such colossal debt.

“The state is now experiencing worst distress and economic hardship. The so-called emergencies declared by Governor SanwoOlu has all turned out to be mere political statements compelled to feign concern.

This is so as no evidence of immediate actions can be noticed,” the party said.

Sawo-Olu was elected on the platform of the ruling All Progressives Congress (APC) and assumed office on May 29.

mischief makers not to heckle or harass the Supreme Court in any way so that the highest court in the land can fulfil its constitutional obligations.

The group gave the warning ahead of the hearing of the appeal filed by Atiku against the decision of the Presidential Election Petitions Tribunal (PEPT) which upheld the election of President Buhari.

BMO said in a statement signed by Niyi Akinsiju and Cassidy Madueke, chairman and Secretary, respectively, that “Nigerians have for several weeks witnessed how a self-styled coalition of political parties which, in actual fact, is a gathering of Atiku Abubakars’ supporters, has been taking potshots at the Chief Justice of Nigeria, Justice Tanko Mohammed and the Supreme Court.

“These individuals even had the temerity to lie to the media that the CJN had hand-picked

Justices of the apex court for the panel on the directives of President Buhari.

“This forced the usually reserved Supreme Court to speak out against what it described as a blackmail attempt by the group, while maintaining that no panel had been constituted.”

BMO said there is nowhere in the world where supporters of a party in a case before the Supreme Court would determine the panel to hear their appeal.

“We are still shocked at the rate PDP elements, including the fake coalition led by a political jobber, has been sharing a list of seven Justices of the Supreme Court which they insist have to be on the panel to hear Atiku’s appeal.

“Nigerians were also stunned to see some federal lawmakers elected on PDP’s platform act as the repeater station of the so-called opposition coalition to the extent of naming those they considered as the most qualified,” he said.

Kogi guber: APC begins campaign, as Bello flags off construction of 5.6km Idah-Agenebode Bridge VICTORIA NNAKAIKE, Lokoja

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overnor Yahaya Bello of Kogi State has described the construction of the IdahAgenebode bridge as one that is long overdue as he expressed his determination to arrest the challenge and see to its completion.

Bello stated this on Saturday in Idah while performing the groundbreaking of project as the All Progressive Congress (APC) flagged off campaign for the 2019 governorship election.

The governor described the area as one blessed with resources, but lamented that the natural barrier has however limited the exploitation of the potential, adding that he has confidence that those benefits would soon be harnessed when the

bridge is completed.

He also said that since he took over the mantle of leadership in Kogi State he has made the well being of the people his priority, as he assured the people of more dividends of democracy if reelected to be at Lugard House for a second tenure.

Bello also assured them that his administrations will complete the IdahAgenebode Bridge to open up the state to more opportunities and ease human and vehicular movement.

He equally disclosed that the bridge would be built through a partnership model, saying it is the administration’s belief that when completed, the bridge would open Idah, the eastern parts of the state to many commercial and viable opportunities.

40

Tuesday 29 October 2019

BUSINESS DAY

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Tuesday 29 October 2019

FT

BUSINESS DAY

41

FINANCIAL TIMES

World Business Newspaper

JIM BRUNSDEN AND MEHREEN KHAN IN BRUSSELS

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he EU on Monday agreed to grant the UK a Brexit extension until January 31, removing the risk of a no-deal departure on Halloween and creating the political space for Westminster to decide on the timing of a general election.

National ambassadors from the 27 other EU member states approved a “flextension” that could last as long as the end of January but which gives the UK the possibility to leave the bloc sooner if its withdrawal agreement has been ratified.

It came as Boris Johnson prepared to ask the House of Commons to vote on Monday for a general election on December 12 — something that the prime minister is expected to fail to secure because he needs two-thirds of MPs to back him and Labour has so far indicated the party will not support his proposal.

However, Downing Street insiders said if Mr Johnson loses the vote, the government would bring forward legislation to try to secure a pre-Christmas election.

Mr Johnson’s plan B has a better chance of success — because he only needs a simple majority of MPs to back election legislation.

The EU27 decision means the bloc has granted a request for a Brexit delay made by the UK government earlier this month after Mr Johnson was forced by MPs to go down this route.

The move sounds the death knell for Mr Johnson’s “do or die” bid to take Britain out of the EU on October 31.

EU agrees to Brexit ‘flextension’ until January 31

Move comes as Boris Johnson prepares to ask MPs to vote for a December 12 election

EU Council president Donald Tusk said the extension decision would be formalised through a written procedure, avoiding the need for an EU leaders’ summit © EPA/Shutterstock

The EU27 agreement on the Brexit extension was reached after a flurry of diplomatic activity over the weekend to win over France.

French president Emmanuel Macron pushed back last week against attempts by European Council president Donald Tusk to rally countries

Alberto Fernández secures 48% share of vote with country in economic crisis

Investment values private members’ club chain at $2bn

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oho House, the hotel and members’ club chain, has been valued at $2bn after raising $100m to help double its global footprint to 50 venues over the next “three to four” years.

Nick Jones, founder and chief executive, said: “Expansion is definitely ramping up. We have the infrastructure to do it and we have the appetite — people love a house in their city.”

The expansion push comes despite the group failing to turn a profit and fears that it was taking on too much debt to broaden the business. In 2016, Standard & Poor’s and Moody’s warned the company would struggle to borrow. In 2017 it signed a £275m refinancing agreement with Permira Debt Managers, and by the end of last year the company’s debt had grown by just over a fifth year on year to £417m.

Peter McPhee, chief financial officer, said Soho House made a pre-tax loss of £65m last year, up from £60m in 2017. Soho House reported adjusted earnings before interest, tax, depreciation and amortisation of £56.4m, up from £50.5m a year earlier. Turnover rose 20 per cent to £432.5m, he added.

Mr Jones said, however, he ex-

pected the company to be profitable “within about two years”, adding that the latest investment meant that “we’re good for cash”.

“Opening new houses is not the cheapest thing to do, but if we stopped all of that we would be profitable very quickly,” he said. “But we are in development mode [ . . .] what excites our members the most is when we open in a new city.”

The company, which first launched in London in 1995, secured the investment from real estate investment trust Simon Property Group and Raycliff Capital, founded by entrepreneur Bippy Siegal, for a 5 per cent stake, valuing the company at $2bn. Soho House was valued at £250m in 2012, when billionaire retail investor Ron Burkle acquired it.

It said membership climbed 29 per cent to 89,000 last year, while another 36,000 people were waiting to join what Soho House describes as a private members’ club for those with a “creative soul”. Known for its celebrity appeal, Prince Harry and Meghan Markle attended the opening of Soho House in Amsterdam, the most popular membership grants access to Soho Houses all over the world and UK fees range from £850 to £1,700. www.businessday.ng

tough position,” said one EU official.

“But there is now the perspective of quick British elections, which changes the picture.”

The text agreed by the EU27 leaves open the possibility for Britain to leave on December 1 or on New Year’s Day if its withdrawal treaty has

Argentina’s Peronists return to power as Macri concedes defeat

Soho House raises $100m to step up expansion PATRICIA NILSSON IN LONDON

behind a Brexit delay to January 31.

Paris argued that Britain had to explain clearly what it would do with a Brexit extension, and warned that pressure had to be kept up on the Commons to ratify Mr Johnson’s draft Brexit treaty.

“It’s true that France had a fairly

been ratified in time.

Mr Tusk said in a tweet on Monday that the Brexit extension decision will now “be formalised through a written procedure”, avoiding the need for an EU leaders’ summit.

Brussels’ understanding is that the terms of the so-called Benn act oblige Mr Johnson to accept the extension that has been granted by the EU, given it runs to the January 31 date sought by the British parliament.

The act says that, were such as extension to be offered by the EU, Mr Johnson “must immediately” notify Mr Tusk that the UK agrees to it.

Once that is done, the EU expects to complete its own written sign-off within 24 hours. One EU official said it should all be done by Tuesday or Wednesday.

As part of the Brexit delay decision, EU leaders will underline that, after more than two years of talks the negotiations on the terms of the UK’s departure are definitively over.

In a clear message to the Labour party that is interested in amending Mr Johnson’s Brexit deal, an EU27 declaration “firmly” excludes any reopening of talks in the future.

It also rules out negotiations on the future EU-UK relationship until the Brexit deal is ratified.

BENEDICT MANDER IN BUENOS AIRES AND MICHAEL STOTT IN LONDON

A

rgentina’s populist Peronists have swept back to power in Sunday’s presidential elections, with former cabinet chief Alberto Fernández winning a clear victory over pro-market incumbent Mauricio Macri amid a deep economic crisis.

Mr Fernández, 60, triumphed with 48 per cent of the vote, three percentage points above the margin needed for a firstround victory, while Mr Macri’s centre-right coalition received 40.4 per cent, with 96 per cent of the ballots counted.

The win was smaller than Mr Fernández had hoped for, suggesting unease among some voters at a return to power by his running mate, former president Cristina Fernández de Kirchner, who governed from 2007-15. The Peronist party, which generally favours interventionist and pro-worker policies, has ruled Argentina for all but six of the past 30 years.

The Peronist victory is further evidence that Latin America’s left is regaining force after several years of conservative gains.

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Populist left-winger Evo Morales claimed victory for a fourth term in Bolivia last week amid opposition accusations of electoral fraud. And mass protests in Chile demanding higher wages and pensions have forced the resignation of the entire centre-right cabinet.

“The times ahead will not be easy,” Mr Fernández told rapturous supporters who waved Argentine flags and chanted “we are coming back”.

In a stark reminder of the difficulties facing the Argentine economy, the central bank announced overnight a dramatic tightening of restrictions on foreign exchange purchases.

Argentines will now be limited to buying just $200 a month, down from $10,000 a month before the election, in an effort to conserve scarce reserves.

Mr Fernández said he would meet Mr Macri on Monday to discuss what is likely to be a difficult transition before he takes power in December.

“I hope that those who will now be our opponents are aware of the situation they have left us and that they help us to rebuild the country from the ashes,” said the president-elect.

Argentina’s economy is @Businessdayng

shrinking, inflation is running at more than 50 per cent a year, unemployment is over 10 per cent and more than one-third of the population lives in poverty.

The country is on the brink of its ninth debt default, struggling to pay more than $100bn of foreign debt, much of it run up under a record $57bn IMF bailout handed to Mr Macri’s administration.

One of Mr Fernández’s first tasks will be to renegotiate Argentina’s debt. He named a transition team of four to handle economic issues, which includes former finance minister Guillermo Nielsen, as well as Matias Kulfas and Cecilia Todesca, who was an official at the central bank under Ms Fernández’s government.

Investors fear Argentina will demand that they take a loss on the face value of their debt, though the size of that “haircut” remains in doubt. The benchmark Argentina 2028 dollar bond fell 1.3 cents in early trading on Monday to 39.33 cents, Reuters reported.

Mr Macri conceded defeat in an emotional address to supporters and vowed to “continue working for Argentines through a healthy, constructive and responsible opposition”.

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BUSINESS DAY

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NATIONAL NEWS

‘Most of us want to try to lead as normal a life as possible’ A business leader living with cancer aims to demystify the condition — at work and in our lives EMMA JACOBS

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atherine Wines is energetic, almost bouncy. She rather likes her new “Annie Lennox-look” hairstyle — white-grey and short-cropped.

The hair is not solely a matter of aesthetics. Rather, it is a reprieve from the “constant reminder” of pancreatic cancer. A few months ago she was bald, a side-effect of the chemotherapy treatment. She would get out of bed every morning, see her reflection and think, “Oh yes, I have got cancer.” To cheer herself up — and keep her head warm — she wore a range of fancy hats.

The 62-year-old, who looks the picture of health and is sporting sparkly trainers, was diagnosed with stage three pancreatic cancer in late 2018. One in four people with pancreatic cancer die within a month of diagnosis, three in four within a year.

“I’ve already lived 12 months, so I’ve already beaten the odds,” she says.

We are in a meeting room at the London office of WorldRemit, the digital international remittances company she co-founded in 2010, which now employs 800 people.

When she received her diagnosis, Ms Wines had already stepped down (in 2017) from the day-to-day business — “It was hard for me as well because it’s my baby.” Nonetheless, she wants to continue her portfolio career: as a non-executive director at WorldRemit, speaker at tech conferences and on fintech entrepreneurship at the Cambridge Judge Business School; mentor to young entrepreneurs and adviser to Beam, a crowdfunding platform for homeless people.

She wants to demystify cancer.

“I’m prepared to talk about it to anybody. I don’t want to force it down people’s throats but if they want to ask me, then I’m quite open.” Otherwise, Ms Wines says, people are ignorant of symptoms and make assumptions about those with cancer.

Businesses need to prepare for cancer, she says, as it is so common.

Last year, research by Macmillan, a charity that offers support to people affected by cancer, found 87 per cent of UK employees with cancer say they want to work. Under equalities legislation in the US and UK, cancer is classed as a disability, requiring employers to make adjustments.

Macmillan finds that 27 per cent of employed cancer patients say they received no support to help them return to work while 20 per cent faced discrimination, for example, their employer not making adjustments to their workload.

Liz Egan, lead of Macmillan’s Working Through Cancer Programme, says that the physical impact of cancer varies. “Side effects of treatment may affect someone’s ability to work, but it’s impossible to predict how someone could react to treatment until they start. It also depends on the type of cancer someone has and their job.”

Ms Wines was accepted on to a drugs trial (Nelfinavir), which was accompanied by four months of chemotherapy and then a course of chemoradiotherapy over six weeks.

Unfortunately the tumour has not shrunk sufficiently to operate on, so she is about to embark on another course of treatment.

“You can live a normal life, as normal as possible . . . Obviously, you’ve got to adjust but you don’t have the plague.”

Because she is no longer involved in the day-to-day running of WorldRemit, she has been able to manage her time, ensuring she does not overload her days. During treatment she made sure she had time to rest.

“With chemo, you find out very soon a pattern of which days you are likely to be more tired.”

She tells managers to take their lead from employees, for example, by finding out if they want to share their diagnosis with others. The main point, she says, is to help the “person manage their time and [give] the support they need” and treat colleagues sympathetically. “Most of us want to try to lead as normal a life as possible.”

Originally from Paris, Ms Wines has lived in the UK for 42 years.

She had always said that on the day she was not hungry she would know there was something wrong.

So when she lost her appetite last year, she went to the doctor. (Other symptoms of pancreatic cancer include abdominal and back pain, or changes to bowel habits.) After a series of tests, doctors discovered Ms Wines had a large tumour on her pancreas, an organ that she knew nothing about.

“Obviously, I was shocked,” she says with understatement.

Previously healthy, it was the first time in her life she felt out of control and had to stop herself from constantly googling her symptoms and illness. “You’ve got to be really strong sometimes not to let the internet take over.”

While describing the diagnosis as “an emotional rollercoaster”, her principal attitude has been to tackle her illness like a work project — gather information, prepare and keep busy. Beyond work, she enjoys small moments, like a text, a call, meeting friends, or going for a walk in the park. “I can’t say it’s perfect every day. Some days it hits you.”

One perk of the weight loss, she jokes, is the cheese. “When you put on weight very easily you are careful with all the camembert. I love cheese, being French.” The “worst time” has been waking in the middle of the night, alone with her thoughts.

“It’s thinking, OK, how long have I got? Am I not going to be able to do this? What am I going to miss.

The uncertainty . . . Will I suffer at the end?” To combat the insomniac whirring thoughts she has brought a television into the bedroom.

Ms Wines, who is divorced and has no children, has found great support from friends, although some reactions have been tricky. “I’ve been in situations where . . . people have burst into tears and I’m saying, ‘There, there, you’re going to be OK.’” She has co-ordinated friends and colleagues into WhatsApp groups so she does not have to update people individually.

Amol Sarva: ‘We’ve been waiting for the music to be over. And now the music is over, and it’s time to dance’ © Bloomberg

Knotel wants to be WeWork — without the ‘bloodbath’

‘Now the music is over, and it’s time to dance,’ says co-working company CEO JOSHUA CHAFFIN IN NEW YORK

“I

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t’s a bloodbath . . . It’s a human tragedy of colossal proportions,” Amol Sarva said matter-of-factly. He was talking about WeWork, the trailblazing co-working company that promised to change the course of humanity before it came crashing to earth just weeks ago.

Like other entrants in the flexible and co-working office industry, Mr Sarva’s start-up, Knotel, has toiled in WeWork’s shadow since its founding four years ago.

But with WeWork wobbling — the company has postponed its public offering, sidelined cofounder Adam Neumann, and is sacking thousands of staff — Knotel is hoping to grab the limelight.

“We’ve been waiting for the music to be over. And now the music is over, and it’s time to dance,” Mr Sarva said.

Knotel is spread across 250 build-

ings in 15 cities, and counting. In late August, while WeWork’s offering was coming under scrutiny, Knotel closed a $400m investment from the Kuwaiti social security fund that pushed its value over $1bn.

“It’s very easy to be a small coworking business,” Mr Sarva said.

“It’s like opening a book shop or a coffee shop. You can reach stability — as long as you don’t pay yourself.

It’s hard to be a big one.”

Knotel is one of many competitors in the co-working and flexible office market aiming to capitalise on WeWork’s troubles — and complicating its hopes for a revival.

Some are funded by traditional landlords like Thor Equities’ Congregate or Tishman Speyer’s Studio.

Others, like Convene, which focuses on shared conference space, partner with building owners.

All are determined to distinguish themselves from WeWork.

“It’s playing into the hands of landlord operators,” one broker said of WeWork’s struggles, noting

that rivals were playing on customers’ fears that the company might go broke. “[They] can say: ‘we own the building, we’re the landlord.

Don’t worry — we’re not WeWork!’”

Like Mr Neumann, the WeWork shaman, the outspoken Mr Sarva tends toward the casual. He curses liberally and greeted a reporter wearing a sweatshirt embroidered with the phrase: Crave Danger.

But he displays the hyper-logic of a McKinsey consultant — which he once was — before co-founding Virgin Mobile USA and then becoming a serial entrepreneur.

Mr Sarva regards the New York real estate industry as clannish and insular. “Hustlers, playboys, bankers — those are the people that own real estate,” he observed.

So, too, do upwardly mobile Indian immigrants like Mr Sarva’s accountant father. He came to New York in the 1980s and, taking advantage of a change to tax laws, bought residential apartments and eventually put together a chain of dialysis centres.

Prologis to buy Liberty in $12.6bn warehouse deal Acquisition attests to robust growth of industrial warehouses in the era of ecommerce JOSHUA CHAFFIN IN NEW YORK

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rologis, the world’s largest warehouse company, has agreed to acquire Liberty Property Trust for $12.6bn in a deal that emphasises the robust demand for such properties in the ecommerce era.* In an interview, Hamid Moghadam, Prologis chief executive, touted the acquisition as a way to strengthen the company’s presence in important US markets, including Pennsylvania, Houston and Orlando, at a time when high-quality warehouse space was becoming ever more scarce.

“We really believe that supply of high-quality industrial real estate is limited,” Mr Moghadam said. “It’s becoming increasingly difficult to zone land for com-

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mercial use, especially near large urban areas.”

The all-stock deal includes the assumption of some debt, and has been approved by both boards of directors. Prologis eventually plans to shed about $3.5bn of warehouse and office properties it does not view as strategic. It also forecast $120m in cost savings.

The deal comes at a time when industrial warehouses — once a relative afterthought in the property industry — have become among its hottest investments due to the rise of ecommerce. As consumers demand ever-faster deliveries for a growing menu of items, state-of-the-art warehouses near big markets have become essential to retailers such as Amazon, Target and many others.

The warehouses are vital not @Businessdayng

only to make “last mile” deliveries but also to handle the huge volume of returns that are a part of online shopping.

“The increase in the value of advanced warehouse facilities mirrors the decline in the value of retail locations,” said Erik Gordon, a business professor at the University of Michigan.

“In a downturn, modern, welllocated warehouses are likely to outperform most forms of real estate.”

In June, Blackstone, the private equity group, acquired the US warehouses portfolio of GLP, another warehouse company, for $18.7bn. At the time, Ken Caplan, Blackstone’s co-head of real estate, called logistics “our highest conviction global investment theme today”.

Tuesday 29 October 2019

BUSINESS DAY

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FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Tiffany receives $14.9bn takeover approach from LVMH Shares in US jeweller jump after agreeing to ‘carefully’ review French group’s proposal HARRIET AGNEW IN PARIS AND PETER WELLS IN NEW YORK

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hares in Tiffany jumped by almost 30 per cent after the US jeweller confirmed it was reviewing a $14.5bn allcash takeover bid from LVMH, the world’s largest luxury goods group.

Tiffany, the brand known for its duck-egg blue boxes and diamond engagement rings, said on Monday that LVMH has made an unsolicited offer of $120 a share, valuing the shares at $14.5bn and the company at $14.9bn, including net debt.

It said its board of directors was “carefully reviewing the proposal” but added that it was “not in discussions with LVMH”.

Tiffany shares jumped 29.9 per cent to $127.99 in early trading on Monday, their highest level in 14 months, as investors bet on a higher bid.

The offer price marks a 22 per cent premium to where Tiffany’s stock price closed at on Friday, and a more than 30 per cent premium to where its shares were trading when LVMH made the offer earlier this month, according to a personal familiar with the situation.

A takeover of Tiffany by LVMH, the owner of Louis Vuitton, Dior and Moët Hennessy, would mark the largest-ever deal by its chairman and chief executive Bernard Arnault, who has led the consolidation of the luxury goods industry over the past four decades.

It would expand the group’s footprint in the US, its secondlargest market by sales after Asia, at a time of increased trade tensions between the US and China.

A deal would also push LVMH further into hard luxury following its $5.2bn acquisition of Italian jeweller Bulgari in 2011, for which it had to pay a 60 per cent premium. It also owns smaller watch brands TAG Heuer and Hublot.

LVMH confirmed in a statement earlier on Monday that it has

held “preliminary discussions” regarding a possible transaction with Tiffany, adding that “there can be no assurance that these discussions will result in any agreement”.

People familiar with the situation said the US jeweller was likely to rebuff LVMH’s unsolicited $14.5bn takeover approach because Tiffany believes the offer undervalues the company. Oliver Chen, an analyst at Cowen, said a fairer valuation of the jeweller would be about $160 a share or higher.

An acquisition of Tiffany, whose flagship store on Manhattan’s Fifth Avenue was immortalised

by Audrey Hepburn in the 1961 film Breakfast at Tiffany’s, would give LVMH increased firepower in the jewellery sector to rival that of Johann Rupert’s Richemont, which owns Cartier and Van Cleef.

It would further increase its scale vis-à-vis its smaller French rival Kering and allow the group to tap into consumers who cannot afford its high-end Bulgari brand.

Jewellery was one of the fastgrowing categories in the personal luxury goods sector last year, according to Bain consultants.

Last year the overall market for personal goods grew 6 per cent to reach a record high of €260bn.

The shoes and jewellery categories both outperformed in 2018, each gaining 7 per cent.

Tiffany generated net sales of $4.4bn last year and is in the middle of a revamp under chief executive officer Alessandro Bogliolo. Mr Bogliolo, a former Bulgari executive, is seeking to target younger shoppers and reposition the brand to be more upmarket. It had suffered from lower tourist spending in the US and a strong dollar.

“Tiffany would become a better company and stronger competitor under the ownership of LVMH,” wrote Rogerio Fujimori, an analyst at RBC Capital Markets, in a note on Monday, pointing to Bulgari’s “tremendous success” after being taken over by LVMH.

S&P 500 hits record high Nasdaq Composite and Dow Jones Industrial Average sit less than 1% from their peaks PETER WELLS IN NEW YORK

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all Street’s main equities benchmark hit a record high, with the S&P 500 jumping at Monday’s open ahead of a heavy week for corporate earnings.

The S&P 500 was up 0.6 per cent at 3,040.39, taking it past the index’s previous intraday record of 3,027.98 on July 26.

On Friday, the index traded above its record closing high of 3,025.86, chalked up on that same July day, but ultimately closed 3.3 points below that threshold. It also failed to breach the incumbent intraday high.

Gains for US stocks, which give the S&P 500 another chance to register a new peak close, follow

an advance for European peers, which were buoyed on Monday after Brussels agreed to extend the UK’s deadline to leave the EU. The Nasdaq Composite and Dow Jones Industrial Average were each up 0.7 per cent in early trade on Monday and sit less than 1 per cent from their record closing levels.

President Donald Trump tapped out a mostly marketsfocused message on Twitter, marking the record.

“The S&P just hit an ALL TIME HIGH. This is a big win for jobs, 401-K’s, and, frankly, EVERYONE! Our Country is doing great. Even killed long sought ISIS murderer, Al-Baghdadi. We are stronger than ever before, with GREAT upward potential. Enjoy!” www.businessday.ng

Warren Buffett: ‘You’ve got . . . less for your money from the US Treasury than you got from sticking it under a mattress . . . I’m not sure you’ll see that again in your lifetime’ © Bloomberg

Pension funds need to make the case against negative interest rates Funds are feeling the pain and should urge governments to do more on fiscal stimulus ROBIN WIGGLESWORTH

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n the depths of the financial crisis, Warren Buffett showed a “really extraordinary” slide to those who had gathered to hear him speak at Berkshire Hathaway’s annual meeting.

The slide revealed how the conglomerate had in December 2008 sold $5m of Treasury bills for $5,000,090.07 despite the debt maturing just a few months later.

In other words, at a negative yield — a phenomenon so bizarre that Mr Buffett felt it deserved highlighting.

“You’ve got . . . less for your money from the US Treasury than you got from sticking it under a mattress,” he marvelled to the audience. “I’m not sure you’ll see that again in your lifetime. But it’s been a very extraordinary year.”

Mr Buffett might have been right about sub-zero yielding Treasuries being a brief phenomenon. But the concept of negative-

yielding debt has become a reality elsewhere, thanks to negative interest rates and central banks’ bond-buying programmes.

However, the tide of angst about the unintended consequences is rising. While much of the opprobrium heaped on central banks is unfair — there is no God-given right to earn a fat return from safe bonds, and central banks must do what they think best to support their economies — some of the fears are well-founded.

Concerns have focused on the pain negative rates might be inflicting on the banking system.

European bank stocks are down by almost a third since the ECB introduced negative rates in 2014, and Japanese ones are down by more than a fifth since the BoJ followed suit in 2016. There are few signs that economies are healthier as a result.

Yet the real damage is surfacing in another corner of the financial system. The pension industry is caught in a tightening vice of lengthening life expectancies and

falling expectations for investment returns. It is this pension predicament that may also explain why sub-zero interest rates are not having the stimulative effect central bankers intended.

Bonds are the bedrock upon which large parts of the global pension system is built. Although the rally in bonds and stocks since the financial crisis has lifted the value of pension funds’ holdings, what they really care about is generating the returns to match their future liabilities. With bond yields beaten down and equity markets having rallied for years, the ability to harvest those returns looks grim.

Stichting Pensioenfonds Zorg en Welzijn is a case in point. The second-biggest Dutch pension fund generated €39bn of investment gains in the first nine months of this year, but no one at PFZW is celebrating. “You would think that we are on the right track. However, the reality is different,” Peter Borgdorff, its director, wrote in a bleak blog post earlier this month.

Pimco shuns US corporate bonds on fears of possible rapid fall in prices Heavyweight investor warns of effects on debt markets in economic downturn JENNIFER ABLAN AND COLBY SMITH IN NEW YORK

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imco is steering clear of US corporate bonds, opting to give up some of the sparkling performance offered by this corner of the debt markets because of concerns over the possibility for a rapid decline in prices in an economic downturn.

Speaking to the Financial Times, the bond giant’s group chief investment officer Dan Ivascyn warned that investors are not being properly compensated in US corporate debt markets, given weakening credit quality and the lack of protections for bondholders.

“The credit sector has been well behaved but if people begin to really fear recession, we can see underperformance quickly,” he said. “This is

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the sector most prone to overshooting on the downside.”

The Bloomberg Barclays US Corporate index has returned 13 per cent this year, a sharp bounce back from 2018 losses of 2.5 per cent. Mr Ivascyn said this outperformance could continue for now but added that he is “willing to give up a little yield or price performance over the short term” to protect clients from falling prices.

Pacific Investment Management Co, known as Pimco, is one of the world’s largest bond managers, overseeing more than $1.8tn in assets.

Mr Ivascyn’s flagship Pimco Income Fund, the largest actively managed bond fund with assets of more than $130bn, is up 6 per cent this year — lagging 89 per cent of other funds in its category — according to Morningstar data as of October 24. @Businessdayng

Mr Ivascyn also told the FT that Pimco remained wary of US Treasuries because of what he sees as the market’s limited potential for further rallies, preferring instead US agency mortgage-backed securities.

So far this year, the Bloomberg Barclays US Treasury index has returned 7 per cent, putting it on track for the best performance in eight years.

Investors rushed to the relative safety of government debt over the summer after a sharp escalation in the US-China trade war and mounting concerns about the global growth outlook. The seemingly insatiable demand for global bonds pushed yields on roughly $17tn of debt below zero at one point. In early September, the yield on the benchmark 10-year US Treasury note sank to a three-year low of 1.46 per cent.

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Tuesday 29 October 2019

BUSINESS DAY

ANALYSIS

FT Britain and Russia are Europe’s odd couple

After Brexit, the UK could drift into an antagonistic relationship with its continental neighbours GIDEON RACHMAN

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he current deep antagonism between Russia and Britain disguises some important similarities between the two countries. Those parallels are likely to become more obvious after Brexit — in ways that should worry both the UK and the EU. Britain and Russia are on the fringes of the European continent.

Partly as a result, the two have traditionally had a dual identity — regarding themselves both as European and as something more. Nearly 80 per cent of Russia’s landmass is in Asia. The British empire was built outside Europe and the country still has strong cultural ties with the “Anglosphere” in North America, Australasia and south Asia.

So it is unsurprising that the UK and Russia are likely to end up as the two major European powers that stand outside the EU. However, both countries will continue to worry about the EU’s collective power. As nations on the periphery, they have traditionally feared the rise of a single power dominating the European landmass — which partly explains why they ended up as allies in the Napoleonic wars and the two world wars. Each country has built its modern identity around the memory of victory in 1945. And both are shaped by nostalgia for imperial power.

For Britain, the Russian parallel is not encouraging. It underlines the danger that Brexit could lead to a long-term souring in relations with continental Europe, and a politics of embittered nationalism in the UK. For Brussels, the danger is that the EU will ultimately be faced

with two angry and alienated neighbours, in Britain and Russia.

Both are great powers in European terms, with considerable capacity to make mischief.

It is of course true that Britain has a liberal and democratic tradition that is absent in Russia. That aligns London’s political values much more closely with Paris and Berlin than Moscow. Those values make it much less likely that the British political class will allow the country to “go rogue” in the manner of Russia under Vladimir Putin.

But geopolitics is not driven by values alone. There are also emotions and strategic interests involved. And here the parallels between post-Soviet Russia and post-Brexit Britain are concerning.

The economic turmoil and strategic setbacks of the 1990s convinced many Russians that their country had been taken advantage of by the west. Russian anger focused on the US and on Nato expansion. But the Kremlin also came to see the EU as a threat — since, in Moscow’s eyes, it was expanding into Russia’s natural hinterland. The Kremlin’s decision to intervene militarily in Ukraine was triggered by the fact that the country was about to sign an association agreement with the EU. If Brexit goes badly wrong, it could trigger events reminiscent of the collapse of the Soviet Union — the break-up of the country, accompanied by a profound economic shock. English nationalists would undoubtedly see the EU as complicit in such malign events: some critics already accuse Brussels of manufacturing artificial problems on the Irish border, unreasonably delaying a free-trade deal and encouraging Scottish independence.

Spotify chief financial officer to leave Architect of direct listing is the latest senior figure to leave music streaming service ANNA NICOLAOU IN LOS ANGELES

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potify’s chief financial officer is leaving the company, in the latest turnover at the music streaming group whose shares have slumped in recent months.

Barry McCarthy was the architect of Spotify’s unconventional direct listing and played a major role in guiding it through its first year and a half as a public company, having previously led Netflix through a public offering as its chief financial officer in 2002.

Mr McCarthy, 66, told the Financial Times that he felt his work was done, having successfully taken Spotify public as he had been recruited to do by chief executive Daniel Ek. “Daniel asked me to do three things: take [Spotify] public, build a team that was capable of running a public company and recruit and train my successor,” Mr McCarthy said in an interview. “I’ve been on the road with Spotify for five years now, first in Sweden and then New

York. I’m going home [to California].”

Paul Vogel, head of investor relations, is set to replace Mr McCarthy from January. Mr McCarthy, who has been Mr Ek’s number two since 2015, aims to rejoin the company’s board pending shareholder approval.

Other recent exits have included chief economist Will Page, head of curation Mike Biggane, and head of music Nick Holmsten.

Spotify’s stock has dropped more than a fifth in the past three months, underperforming the broader market. It addressed this in a letter to investors alongside results on Monday. “The business is outperforming . . . Sometimes the stock price reflects the performance of the business and sometimes it doesn’t.

But eventually, it always does.”

Mr McCarthy added: “If [the business] weren’t doing really well, I wouldn’t be walking out the door”, and that the stock losses were an “expected outcome” as Spotify sacrifices profits in favour of investment in podcasts. www.businessday.ng

Indian economy: problems pile up for Narendra Modi The prime minister has room to stimulate growth but must avoid policy mis-steps of his first term AMY KAZMIN IN NEW DELHI

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ew Delhi’s Gandhi Nagar market is one of India’s largest garment wholesale hubs, jammed with inexpensive, ready-made garments for the aspirational but price-sensitive lower middle class.

The vast array of kids’ party wear, elaborately-embellished jeans and other clothes draws traders from across north India, who stock up on merchandise to sell in small-town shops and rural bazaars.

Typically, the run-up to the annual Diwali festival is the market’s peak season, when the narrow lanes are so jammed with buyers hauling clothes it is difficult to move. But this year, traders complain, the festive shopping season has been gloomy, with sales falling precipitously as a deepening economic slowdown hurts ordinary Indians.

Hit by lay-offs, pay cuts and reduced earnings, anxious consumers are tightening their belts.

“For common people, these are luxury items,” says Sahil Nangru, 26, whose small business makes children’s outfits, selling them wholesale for around Rs500 ($7) a set. “People do not have money in their hands these days. Businessmen do not have money to invest.”

Weak consumer demand is fuelling a vicious downward spiral.

In recent weeks, Mr Nangru and his partner, Pradeep Chawla, have shut down two of their four small garment-making workshops, and laid off 25 workers. “For the last three or four months, we’ve had absolutely no work,” says Mr Chawla. “Now because of Diwali we’ve had some orders. But if we have no business, we have to let the workers go, it is natural.”

The gloom at the market reflects the malaise in India’s economy, now under the spotlight after the hoopla of prime minister Narendra Modi’s security-focused re-election campaign — and his

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triumphant victory just six months ago.

Not that long ago India was revelling in its status as the world’s fastest-growing large economy. It seemed on the cusp of its aspiration of growth rates of 9 to 10 per cent — the pace economists say is necessary to create sufficient jobs for the estimated 12m Indians entering the workforce each year.

But since the second quarter of 2018 — when gross domestic product grew at a brisk 8 per cent year on year, India’s economy has steadily lost steam. GDP growth sank to just 5 per cent in the three months to June 2019, its slowest pace in six years. And as the economy skids, India’s millions of self-employed, vulnerable contract workers and farmers have all taken a hit.

“People’s businesses have collapsed,” says Nidhi Varma, who runs a small shop in a Delhi mall, and has watched as other shops shut down around her in recent months. “People don’t have enough profit to pay rent.”

Before the election, Mr Modi’s government had brushed aside warnings of economic fragility, dismissing them as too pessimistic and politically motivated. But with the deepening economic distress impossible to ignore, debate is mounting over precisely what ails the economy, the root cause of the slowdown, and how long it will last.

New Delhi insists the difficulties are a cyclical blip, brought on by tumultuous international conditions. But many economists believe the slowdown is of India’s own making — the result of policy mis-steps, sluggish market-oriented reforms and Mr Modi’s failure to resolve problems in the financial system left by over exuberant lending during the previous Congress administration.

“Blaming it all on the outside is too easy,” Raghuram Rajan, former Reserve Bank of India governor, said in a recent lecture, his first on the state of the Indian economy @Businessdayng

since leaving the job in 2016. “India is poor. It has a lot of potential for growth on its own, without relying on the outside. Why aren’t we growing at 7 or 8 per cent?”

Private investment has been muted for nearly a decade since the global financial crisis. New Delhi has little fiscal firepower left for stimulus, with an annual public deficit — including the centre, states, and state-owned entities — estimated at nearly 10 per cent of GDP. Now, private consumption is faltering, as the public mood darkens, and easy consumer credit dries up after last year’s shock collapse of Infrastructure Leasing & Financial Services, a major finance company.

According to the most recent RBI consumer confidence survey, Indians’ optimism about their future prospects is ebbing away.

Families have been living beyond their means, drawing down savings and taking loans, expecting better days ahead, government statistics show. From 2012 to 2018, household savings fell from 23.6 to 17.2 per cent of GDP. Household debt has risen sharply, though at 11 per cent of GDP it remains low by regional standards.

“There is a general environment of extreme risk aversion,” says Gagan Banga, vice-chairman of Indiabulls Housing Finance.

“Today we have a situation where the business community in general is scared to invest, the consumer is scared to consume, and lenders are scared of lending both to business and consumers because they feel that the money will get stuck.”

India’s automotive industry — which accounts for around 40 per cent of manufacturing GDP — suffered a contraction in passenger and commercial vehicle sales of 23 per cent year on year from April to September. Sales of motorcycles and other two-wheelers — often a leading indicator of the strength of the rural economy — contracted 16 per cent. Other industries, from fast-moving consumer goods to aviation, are slowing.

Monday 28 October 2019

BUSINESS DAY

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46

Tuesday 29 October 2019

BUSINESS DAY

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Tuesday 29 October 2019

BUSINESS DAY

47

Live @ The STOCK Exchanges Prices for Securities Traded as of Monday 28 October 2019 Company

Market cap(nm)

Price (N)

Change

Trades

Volume

Company

Market cap(nm)

Price (N)

Change

Trades

Volume

PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 259,480.15 7.30 0.68 188 21,230,623 UNITED BANK FOR AFRICA PLC 200,066.62 5.85 0.85 217 9,654,199 ZENITH BANK PLC 533,740.39 17.00 -0.29 461 22,005,286 866 52,890,108 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 190,245.05 5.30 - 121 2,125,527 121 2,125,527 987 55,015,635 TELECOMMUNICATIONS SERVICES MTN NIGERIA COMMUNICATIONS PLC 2,625,732.18 129.00 - 50 207,184 50 207,184 50 207,184 BUILDING MATERIALS DANGOTE CEMENT PLC 2,487,914.08 146.00 - 36 136,917 LAFARGE AFRICA PLC. 240,811.54 14.95 1.70 95 1,303,765 131 1,440,682 131 1,440,682 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 304,225.84 517.00 - 11 927 11 927 11 927 1,179 56,664,428 REAL ESTATE INVESTMENT TRUSTS (REITS) SKYE SHELTER FUND PLC 1,710.00 85.50 - 1 5 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 10,175.81 40.70 - 1 100 UPDC REAL ESTATE INVESTMENT TRUST 13,074.52 4.90 - 8 11,710 10 11,815 10 11,815 OTHER FINANCIAL INSTITUTIONS NIGERIA ENERYGY SECTOR FUND 411.91 552.20 - 0 0 VALUEALLIANCE VALUE FUND 3,312.39 103.20 - 0 0 0 0 0 0 10 11,815 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 0 0 OKOMU OIL PALM PLC. 52,417.35 54.95 - 34 81,160 PRESCO PLC 38,400.00 38.40 - 13 40,948 47 122,108 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 8,520.00 4.26 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,380.00 0.46 -8.00 10 655,202 10 655,202 57 777,310 DIVERSIFIED INDUSTRIES A.G. LEVENTIS NIGERIA PLC. 741.24 0.28 - 1 4,338 JOHN HOLT PLC. 214.03 0.55 - 1 2,000 S C O A NIG. PLC. 1,903.99 2.93 - 0 0 TRANSNATIONAL CORPORATION OF NIGERIA PLC 41,460.95 1.02 3.03 32 11,127,813 U A C N PLC. 17,287.78 6.00 -7.69 85 9,077,388 119 20,211,539 119 20,211,539 BUILDING CONSTRUCTION ARBICO PLC. 711.32 4.79 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 24,486.00 18.55 - 10 20,223 ROADS NIG PLC. 165.00 6.60 - 0 0 10 20,223 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 2,780.28 1.07 - 9 30,644 9 30,644 19 50,867 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 7,986.09 1.02 - 19 625,901 GOLDEN GUINEA BREW. PLC. 242.22 0.89 - 0 0 GUINNESS NIG PLC 52,240.63 23.85 - 66 185,438 INTERNATIONAL BREWERIES PLC. 108,307.86 12.60 - 9 11,580 NIGERIAN BREW. PLC. 368,257.34 46.05 - 40 214,207 134 1,037,126 FOOD PRODUCTS DANGOTE FLOUR MILLS PLC 111,250.00 22.25 - 0 0 DANGOTE SUGAR REFINERY PLC 124,200.00 10.35 - 43 286,756 FLOUR MILLS NIG. PLC. 63,555.88 15.50 2.99 37 917,156 HONEYWELL FLOUR MILL PLC 7,533.69 0.95 - 9 79,450 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 766.26 4.30 - 0 0 NASCON ALLIED INDUSTRIES PLC 39,344.16 14.85 - 11 79,822 UNION DICON SALT PLC. 3,321.07 12.15 - 0 0 100 1,363,184 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 18,030.74 9.60 - 15 66,535 NESTLE NIGERIA PLC. 967,040.63 1,220.00 - 35 25,639 50 92,174 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 4,377.95 3.50 - 11 229,666 11 229,666 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 21,837.62 5.50 - 23 165,126 UNILEVER NIGERIA PLC. 153,391.64 26.70 - 10 15,617 33 180,743 328 2,902,893 BANKING ECOBANK TRANSNATIONAL INCORPORATED 130,281.81 7.10 - 21 598,054 FIDELITY BANK PLC 49,257.15 1.70 -1.18 50 4,870,378 GUARANTY TRUST BANK PLC. 771,096.90 26.20 -0.38 165 3,800,512 JAIZ BANK PLC 13,258.91 0.45 - 14 369,548 STERLING BANK PLC. 57,580.84 2.00 3.09 1,195 9,820,642 UNION BANK NIG.PLC. 203,845.27 7.00 - 8 77,302 UNITY BANK PLC 7,364.28 0.63 - 2 15,000 WEMA BANK PLC. 22,758.93 0.59 3.51 26 843,727 1,481 20,395,163 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 0 0 AIICO INSURANCE PLC. 4,366.03 0.63 6.35 15 624,328 AXAMANSARD INSURANCE PLC 17,325.00 1.65 -2.94 8 797,199 CONSOLIDATED HALLMARK INSURANCE PLC 3,008.10 0.37 - 0 0 CONTINENTAL REINSURANCE PLC 24,790.86 2.39 - 6 100,000 CORNERSTONE INSURANCE PLC 6,039.10 0.41 7.89 6 297,262 GOLDLINK INSURANCE PLC 909.99 0.20 - 0 0 GUINEA INSURANCE PLC. 1,228.00 0.20 - 0 0 INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 0 0 LASACO ASSURANCE PLC. 1,904.09 0.26 - 3 85,000 LAW UNION AND ROCK INS. PLC. 1,933.35 0.45 - 1 42,256 LINKAGE ASSURANCE PLC 4,080.00 0.51 - 2 90,000 MUTUAL BENEFITS ASSURANCE PLC. 2,234.55 0.20 - 1 200,000 NEM INSURANCE PLC 10,561.01 2.00 - 12 202,309 NIGER INSURANCE PLC 1,547.90 0.20 - 1 5 PRESTIGE ASSURANCE PLC 2,745.10 0.51 - 3 221,345 REGENCY ASSURANCE PLC 1,333.75 0.20 - 0 0 SOVEREIGN TRUST INSURANCE PLC 1,668.16 0.20 - 3 300,750 STACO INSURANCE PLC 4,483.72 0.48 - 0 0 STANDARD ALLIANCE INSURANCE PLC. 2,582.21 0.20 - 0 0 2,800.00 0.20 - 0 0 SUNU ASSURANCES NIGERIA PLC. UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 0 0 UNIVERSAL INSURANCE PLC 3,200.00 0.20 - 1 5,000 VERITAS KAPITAL ASSURANCE PLC 2,773.33 0.20 - 4 346,687,047 WAPIC INSURANCE PLC 4,416.30 0.33 3.13 13 871,655 79 350,524,156

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MICRO-FINANCE BANKS NPF MICROFINANCE BANK PLC 2,721.10 1.19 - 5 73,402 5 73,402 MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 4,200.00 1.00 - 0 0 ASO SAVINGS AND LOANS PLC 7,370.87 0.50 - 0 0 INFINITY TRUST MORTGAGE BANK PLC 5,796.93 1.39 - 0 0 RESORT SAVINGS & LOANS PLC 2,265.95 0.20 - 0 0 UNION HOMES SAVINGS AND LOANS PLC. 2,949.22 3.02 - 0 0 0 0 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 7,640.00 3.82 - 39 702,649 CUSTODIAN INVESTMENT PLC 32,056.16 5.45 - 4 58,576 DEAP CAPITAL MANAGEMENT & TRUST PLC 660.00 0.44 - 0 0 31,684.34 1.60 1.27 36 1,358,062 FCMB GROUP PLC. ROYAL EXCHANGE PLC. 1,029.07 0.20 - 2 77,656 STANBIC IBTC HOLDINGS PLC 387,517.72 37.00 - 11 11,385 UNITED CAPITAL PLC 12,300.00 2.05 - 37 1,526,745 129 3,735,073 1,694 374,727,794 HEALTHCARE PROVIDERS EKOCORP PLC. 1,680.29 3.37 - 0 0 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 852.75 0.24 4.35 2 622,000 2 622,000 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 494.58 0.50 - 0 0 0 0 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 8,345.44 4.00 - 0 0 FIDSON HEALTHCARE PLC GLAXO SMITHKLINE CONSUMER NIG. PLC. 6,936.08 5.80 - 10 37,620 MAY & BAKER NIGERIA PLC. 3,450.47 2.00 - 6 20,144 NEIMETH INTERNATIONAL PHARMACEUTICALS PLC 740.67 0.39 -2.50 5 269,262 NIGERIA-GERMAN CHEMICALS PLC. 556.71 3.62 - 0 0 325.23 1.50 - 0 0 PHARMA-DEKO PLC. 21 327,026 23 949,026 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 816.96 0.23 9.52 39 21,523,410 39 21,523,410 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 1,470.89 0.50 - 0 0 0 0 IT SERVICES CWG PLC 6,413.06 2.54 - 0 0 NCR (NIGERIA) PLC. 486.00 4.50 - 1 2,500 TRIPPLE GEE AND COMPANY PLC. 316.77 0.64 8.47 3 345,751 4 348,251 PROCESSING SYSTEMS CHAMS PLC 1,080.09 0.23 - 17 2,121,173 E-TRANZACT INTERNATIONAL PLC 9,996.00 2.38 - 2 4,800 19 2,125,973 TELECOMMUNICATIONS SERVICES AIRTEL AFRICA PLC 1,157,510.66 308.00 - 8 579 8 579 70 23,998,213 BUILDING MATERIALS BERGER PAINTS PLC 2,173.68 7.50 - 4 10,564 CAP PLC 17,885.00 25.55 - 12 19,673 208,981.67 15.90 6.00 28 153,485 CEMENT CO. OF NORTH.NIG. PLC MEYER PLC. 313.43 0.59 - 1 39,488 PORTLAND PAINTS & PRODUCTS NIGERIA PLC 1,769.32 2.23 - 0 0 1,156.20 9.40 - 1 1,200 PREMIER PAINTS PLC. 46 224,410 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,256.91 2.09 - 0 0 CUTIX PLC. 2,465.85 1.40 - 18 238,055 18 238,055 PACKAGING/CONTAINERS BETA GLASS PLC. 26,898.49 53.80 - 4 16,178 GREIF NIGERIA PLC 388.02 9.10 - 0 0 4 16,178 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 0 0 0 0 68 478,643 CHEMICALS B.O.C. GASES PLC. 2,547.42 6.12 - 1 200 1 200 METALS ALUMINIUM EXTRUSION IND. PLC. 1,781.64 8.10 - 2 15,010 2 15,010 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 2 152,000 2 152,000 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 83.60 0.38 - 0 0 0 0 5 167,210 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,252.54 0.20 - 7 1,476,651 7 1,476,651 INTEGRATED OIL AND GAS SERVICES OANDO PLC 42,266.80 3.40 - 82 1,952,480 82 1,952,480 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 53,332.04 147.90 - 48 211,024 CONOIL PLC 10,686.86 15.40 - 16 85,415 ETERNA PLC. 3,716.81 2.85 - 6 25,081 FORTE OIL PLC. 20,839.70 16.00 -0.31 44 343,195 MRS OIL NIGERIA PLC. 5,166.13 16.95 - 3 6,075 TOTAL NIGERIA PLC. 41,829.09 123.20 - 20 37,335 137 708,125 226 4,137,256 ADVERTISING AFROMEDIA PLC 1,820.01 0.41 - 0 0 0 0 AIRLINES MEDVIEW AIRLINE PLC 17,551.17 1.80 - 0 0 0 0 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 294.09 0.25 - 2 4,334 2 4,334 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 2,387.46 4.05 - 1 10,000 TRANS-NATIONWIDE EXPRESS PLC. 393.83 0.84 - 3 3,600 4 13,600 HOSPITALITY TANTALIZERS PLC 642.33 0.20 - 0 0 0 0 HOTELS/LODGING CAPITAL HOTEL PLC 4,723.78 3.05 - 0 0 IKEJA HOTEL PLC 2,224.31 1.07 - 1 150 7,862.53 3.50 - 0 0 TOURIST COMPANY OF NIGERIA PLC. TRANSCORP HOTELS PLC 41,042.18 5.40 - 0 0 1 150 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 4,800.00 0.40 - 4 10,200 4 10,200 PRINTING/PUBLISHING ACADEMY PRESS PLC. 205.63 0.34 - 0 0 856.31 1.11 - 4 43,820 LEARN AFRICA PLC STUDIO PRESS (NIG) PLC. 1,183.82 1.99 - 0 0 UNIVERSITY PRESS PLC. 474.55 1.10 -4.35 9 418,856 13 462,676 ROAD TRANSPORTATION ASSOCIATED BUS COMPANY PLC 729.39 0.44 - 1 55,000 1 55,000

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BUSINESS DAY Tuesday 29 October 2019 www.businessday.ng

CEO IN FOCUS

Abubakar Jimoh: Building Coronation Merchant Bank Ltd into Africa’s premier investment bank

F

or Abubakar Jimoh, his vision is to make Coronation Merchant Bank Africa’s premier investment bank, an idea which was once a dream but now gradually becoming a reality.

In Nigeria, the investment banking landscape has undergone unique changes in the past three years with new players emerging in practically every segment of the market.

Beyond winning Investment Bank of the Year for the second year running at BusinessDay Banks & Other Financial Institutions Award (BAFI), the vision of Abubakar Jimoh CEO of Coronation Merchant bank is very clear. From the beginning, he wanted an institution beyond just investment banking. He wanted a bank that can offer trade, corporate banking, private banking or wealth management and global markets/ treasury services to clients across Africa.

Abubakar Jimoh was a pioneer staff member of Express Discount Limited, where he rose to Head of Trading. He later held various positions at RBC Financial Group (Royal Bank of Canada). He led the transformation of Associated Discount House from a failing discount house to a merchant bank (Coronation Merchant Bank Group) with an ‘A’ rating from Agusto. He was on the Board of Shelter Afrique between 2012 and 2013.

As an investment bank, Abubakar Jimoh wants Coronation Merchant Bank to grow the non-interest income revenues, such as investment banking, asset management, and equity brokerage, which in the last three years have increased from about 4percnt of its income to 12percent.

As a CEO with more than 24 years of experience in various capacities, covering client relationship management, treasury, market risk, and credit risk management, operational risk management, project management, and portfolio management; Abubakar Jimoh’s key focus is bridging the annual $170billion infrastructure gap that exists in Africa as well as facilitating inter-continental trade.

“Our strategy has evolved over the years. Initially, our

focus was on providing specialised financial services to high-end corporates and governments across Africa.

Today, our growth strategy is rooted in building capabilities to address growing clients’ needs, creating a workplace atmosphere that attracts and retains talent, and growing efficient architectures by expanding our investment in technology,” Abubakar Jimoh said in an interview with Africa Business Magazine.

For Nigerian businesses, Jimoh believes that funding at times cannot be obtained through borrowing as longterm, renewable capital is often required however he also thinks the institutions that can help raise this long-term capital are typically merchant banks.

“We will become closer to our customers, giving us a competitive edge. As for the macroeconomic outlook, with the election behind us, we will see money coming in that was waiting on the sidelines, and investment levels will go up.

There are big fund restructurings happening, and it will be a great time to trade assets and capitalize on private equity investments in Nigeria,” Abubakar Jimoh said.

Financial performance of the bank under Abubakar Jimoh In the first quarter of 2019,

”

DIPO OLADEHINDE & SEGUN ADAMS

When we look at where we stand today, our company is stronger, simpler, and better positioned to deliver long-term value to our stakeholders, thanks to the straightforward way in which we serve our customers and clients

Abubakar Jimoh Coronation Merchant Bank Limited released its 2018 Full Year Results to stakeholders in which the bank posted a Profit Before Tax (PBT) of N5.3billion compared to N5.1billion recorded in December 2017 while Shareholders’ Funds increased to N31.5billion as at December 2018 compared to N29.5billion recorded in December 2017. Total Assets also grew 63percent from N136billion in 2017 to N223billion Commenting on the result, Abubakar Jimoh said despite the difficult operating environment, the company recorded modest growth across most financial indices. “The growth we recorded in our profitability and capital position is a testament to the strength of our business model and the commitment of our people.”

Key Ratios show the bank’s Capital Adequacy Ratio of 19.7percent as at December 2018 compared

to 24.8percent recorded in December 2017 while Loan to Deposit Ratio stood at 43.4percent as at December 2018 compared to 42.2 percent recorded in December 2017. Non-Performing Loan Ratio remained at zero percent just like the corresponding period of the previous year.

Cost to Income ratio increased to 53.5percent as of December 2018 compared to 52.6 percent in 2017. However, Net interest margin was 5.1 percent as at December 2018 compared to 7.7percent in December 2017. Earnings Per Share (EPS) was 90.62 kobo in December 2018 compared to 94.09 kobo recorded in December 2017.

Dividend Per Share (DPS) stood at 33 kobo in December 2018 (December 2017: 30kobo); while Return on Equity stood at 15.01percent as at December 2018 (December 2017: 17.17percent).

Loans & Advances to customers went up 70percent to N54.8billion as at December 2018 from N32.3billion in December 2017. Customer Deposits increased by 65percent to N126.2billion as at December 2018 from N76.4 billion recorded in the same period last year.

The Group maximized opportunities in its core business to deliver stable and sustainable revenue growing the top-line revenue by 10percent compared to 2017.

“When we look at where we stand today, our company is stronger, simpler, and better positioned to deliver long-term value to our stakeholders, thanks to the straightforward way in which we serve our customers and clients. As a platform for improving lives, our aim is to assist our customers to identify growth opportunities, harness these opportunities

and in the process, enable businesses thrive, economies grow, and ultimately, help organizations fulfil their hopes and realise their ambitions”, Jimoh noted.

Earning assets grew significantly by 70percent year-on-year to cushion the huge gap from reduced market-driven decline in yield. This resulted in a slight decline in net interest income by 5percent to achieve N7.6billion, against N8billion the previous year.

There was an increase in foreign exchange and fixed income trading volumes, loan disbursement, and echannel transactions, which saw the bank’s non-interest income increase by 46percent year on year to achieve N4.1billion compared to N2.8 billion in 2017.

The impact of the adoption of International Financial Reporting Standard (IFRS) 9 increased the bank’s cost of risk marginally from zero percent to 0.03percent with all its risk assets in the stage 1 classification.

According to Jimoh, as a Group, the bank has continued to expand the sector reach, meeting customers’ financing needs by offering products tailor-made to their varied needs. In 2018, he says the bank deliberately increased exposures to high-quality obligors in Agriculture, Manufacturing and Oil & Gas sectors who fall within its risk acceptance criteria. The quality and efficacy of the bank’s growth strategy are according to him, evidenced by its zero NPL ratios which have been maintained for the third year running. In addition to this, its dollar asset base grew by over 100percent driven largely by self-liquidating trade finance transactions that are well managed, in line with the bank’s risk management framework.

Furthermore, the Bank’s commercial paper product that was launched this year helped to provide a relatively stable funding base to support its growth.

Customer Deposit grew by over 65percent from N76billion in 2017 to N126billion in 2018. The positive result recorded by the commercial paper is an attestation of the Bank’s strength in the capital market and a reflection of its growing level of investor confidence.

Published by BusinessDAY Media Ltd., The Brook, 6 Point Road, GRA, Apapa, Lagos. Advert Hotline: 08033225506. Subscriptions 01-2950687, 07045792677. Newsroom: 08169609331 Editor: Patrick Atuanya. All correspondence to BusinessDAY Media Ltd., Box 1002, Festac Lagos. ISSN 1595 - 8590.