BusinessDay 24 May 2017

Importers to save N1trn annually on 24-hour port operations 

…But FG must improve port security and access roads 

AMAKA ANAGOR-EWUZIE 

Importers and businesses 

that depend on the nation’s 

seaports to bring in raw 

materials or export finished 

goods will save as much as N1 

trillion in demurrage and storage 

costs annually, if the Federal 

Government’s executive order 

that ports should commence 

24-hour operations comes into 

effect. 

The N1 trillion estimate is the 

cost paid by importers annually, 

on account of delays caused by 

the use of cumbersome paper 

work in cargo clearance and 

inefficient port systems, stated a 

report by the Lagos Chamber of 

Commerce and Industry (LCCI) 

and the Financial Derivatives 

Company, published in the last 

quarter of 2016. 

According to the Nigerian 

Shippers Council (NSC) report, 

the nation’s ports have 

the longest cargo dwell time of 

19-25 days, compared to other 

sea ports in the world because 

cargo clearance takes longer 

days against the ideal period of 

Continues on page 33 

MARKETS AND COMMODITIES MONITOR FMDQ Close (Rate & Prices) 

COMMODITIES EXCHANGE RATE FMDQ Close (Rate & Prices) 

Oil US $53.90 

NSE Close BDC TRAVELEX Foreign Exchange FX 

Treasury bills 

FGN Bonds) 

$-N380.00 380.00 Market 

Spot $/N 3M 6M 5Y 10Y 

GOLD $ 1,254.40 15.00 

£-N490.00 490.00 I&E (Indicative 382.31 

0.40 0.08 0.10 0.00 

COCOA $ 1,998.00 28,093.30 

€-N420.00 420.00 CBN (SMIS) 320.00 

19.51 21.09 16.13 16.28 

20Y 

0.09 

16.04 

NEWS YOU CAN TRUST I **WEDNESDAY 24 MAY 2017 I VOL. 14, NO 358 I N300 @ g 

CBN vows more dollar 

supply to help end recession 

As GDP contracts by 0.52% in Q1’17 MPC keeps rate on hold 

PATRICK ATUANYA, HOPE-MOSES ASHIKE, 

Lagos & ONYINYE NWACHUKWU, Abuja 

The Central Bank of 

Nigeria (CBN) yesterday 

pledged to sustain 

its recent dollar 

supply tempo to help 

improve FX availability in the 

economy and bring an end to 

the current recession. 

The CBN made its position 

known, even as new data showed 

that the economy contracted for 

a fifth consecutive quarter by 

0.52 percent year on year (YoY) 

in the First Quarter (Q1) of 2017 

according to the National Bureau 

of Statistics (NBS). 

This compares to the revised 

contraction of 1.73 percent in 


L-R: Hakeem Oguniran, managing director; Larry Ettah, chairman and Godwin Samuel, company secretary, all of UACN Property Development 

Company Plc (UPDC) at the company’s 19th annual general meeting in Lagos, yesterday. 

Pic by Olawale Amoo 

Inside 

UBA to launch 

$500m 

Eurobond 

P. 4 

FG says new 

executive 

orders will be 

enforced 

P. 4 

May & Baker 

not in merger 

talks 

– Aboderin 

P. 34 

Austin Okere 

writes on 

The Fintech 

challenge and 

the new face of 

banking (Part 1) 

P. 9

2 

Wednesday 24 May 2017

Wednesday 24 May 2017 

9

4 BUSINESS DAY 

C002D5556 


NEWS 

UBA to launch $500m Eurobond 

… Gets Fitch ratings as CBN, SEC give ‘No Objection’ approvals 

IHEANYI NWACHUKWU 

The United Bank for Africa 

Plc (UBA) has notified 

the investing public of 

its intention to launch 

up to $500million senior 

unsecured medium term debt 

notes (Eurobond). 

Fitch Ratings has assigned an 

expected rating of ‘B (EXP)’ to the 

United Bank for Africa Plc proposed 

senior unsecured medium-term 

notes. The bank plans to raise between 

$350 million and $500 million 

of fixed-rate five-year bonds. 

UBA intends to use the Notes 

directly but will retain the flexibility 

to substitute the issuer with an 

offshore special purpose vehicle, 

where market conditions require 

and allow for such, prior to the 

maturity of the notes. 

The bank intends to list the 

notes on the Irish Stock Exchange 

(ISE), with the expectation that the 

notes will be traded on its regulated 

market. 

Already, the Central Bank of Nigeria 

(CBN) and the Securities and 

Exchange Commission (SEC) have 

given “No Objection” approvals to 

the transaction. 

The bank intended to make announcement 

yesterday, May 23, regarding 

planned investor meetings 

in Europe and the United States, in 

respect of the issuance of the notes. 

The commencement of the 

transaction will however be subject 

CBN vows more dollar supply to help end... 

Continued from page 1 

the fourth quarter of 2016 and 

a revised 0.67 percent contraction 

in the comparable first quarter of 

2016. 

“The CBNs intervention will 

be more rigorous and intense by 

making foreign exchange more 

available to all sectors of the Nigerian 

economy,” CBN Governor 

Godwin Emefiele, said in a news 

briefing on the outcome of the twoday 

Monetary Policy Committee 

(MPC) meeting in Abuja. 

“I still hold the position that by 

the end of the third quarter of 2017, 

we will be out the recession.” 

The MPC also voted to retain the 

Monetary Policy Rate (MPR) at 14 

percent, Cash Reserve Ratio (CRR) 

at 22.5 percent, as well as Liquidity 

Ratio at 30 percent. 

They maintained the asymmetric 

corridor around the MPR 

to finalising transaction documentation 

and prevailing market 

conditions. 

UBA intends to utilise the net 

proceeds of the notes for its general 

banking purposes, stating that it 

will pay the net proceeds from the 

notes issuance into its foreign currency 

domiciliary account, which 

may be retained by UBA in foreign 

currency or converted into naira, 

depending on the bank’s requirement 

from time to time. 

The United Bank for Africa 

Plc further said in a statement to 

investors at the Nigerian Stock 

Exchange (NSE) that a certificate 

of capital importation (CCI) will 

not be obtained in respect of the 

proceeds of the notes that are not 

converted into naira, noting that 

a CCI is only issued in respect of 

capital imported into Nigeria and 

converted into naira. 

UBA intends to make principal 

repayments and interest payments 

on the notes from its foreign currency 

reserves, since it will not 

be able to obtain access to the 

Nigerian foreign exchange market 

for the purpose of making such 

payments. 

Notwithstanding the foregoing, 

L-R: Haruna Jalo-Waziri, executive director, business development, Nigerian Stock Exchange (NSE); Funso Akere, chief 

executive, Stanbic IBTC Capital; Tola Akinwunmi, real estate debt structuring and advisory, Stanbic IBTC Capital, and Chris 

Godman, executive managing director, equity capital market, standard Bank international, at the Real Estate Investment 

Trust Conference co-sponsored by Stanbic IBTC in Lagos. 

Pic by Pius Okeosisi 

unchanged at +200 and -500 basis 

points. 

Emefiele said the policy retention 

is intended to allow the existing 

policies to fully achieve their 

goals and objectives. 

Africa’s largest economy derives 

more than 90 percent of its export 

earnings and 60 percent of its fiscal 

revenue from oil and gas proceeds. 

Nigeria is still undergoing a 

severe economic alignment in the 

context of lower oil prices, which 

has resulted in reduced US dollar 

supply and lower GDP growth, 

Moody’s Investor Services said in 

a recent report. 

“The constrained US dollar 

supply continues to hurt corporates’ 

operations and profitability, 

especially those affected by a ban 

on accessing Nigeria’s official 

foreign-exchange markets for purchases 

of certain imported items,” 

Moody’s said. 

About $1.1 billion has flowed 

through the new importers and 

exporters (I & E) FX window in 

the last four weeks, with the CBN 

intervention in that segment of 

the market at less than 30 percent, 

Emefiele said. 

The rest were made up of nonoil 

exporters and Foreign Portfolio 

Investments (FPI), according to 

Emefiele. 

Investors are gradually returning 

through the I & E window 

to play in Nigeria’s equity and 

bond markets, according to Bayo 

Adeyemo, country treasurer and 

markets head at Citi Bank Nigeria. 

“Things have improved and it 

is now up to the CBN to stay the 

course and allow more transparency, 

as there is room for more 

flows to come in.” 

The I & E foreign exchange 

window closed trading at N382.31 

per dollar on Tuesday, data from 

the FMDQ show. 

Although the GDP contraction 


may weigh heavily on sentiment 

moving forward, it should be kept 

in mind that it remains the best 

performance seen in four quarters, 

said Lukman Otunuga, Research 

Analyst for FXTM. 

“With many sectors of the Nigerian 

economy turning positive, 

the overall outlook still looks encouraging 

with the bullish impacts 

likely to be realised in the second 

and third quarter of this year.” 

Emefiele noted in his statement 

that the MPC is particularly 

pleased with the gradual fall in inflation, 

which moderated, marginally 

to 17.24 percent in April as 

against 17.26 in March 2017. 

On the financial stability outlook, 

the committee noted that in 

spite of the banking sector resilience, 

the weak macro-economic 

environment continues to exert 

pressure on the system. 

The Committee therefore urged 

the CBN to intensify surveillance 

to tackle emerging vulnerabilities. 

FG says new 

executive orders 

will be enforced 

…as it reconsiders 

replacement of PenCom DG 

ELIZABETH ARCHIBONG 

The Federal Government says 

already existing civil service 

laws will be invoked to ensure 

that the executive orders signed by 

Acting President Yemi Osinbajo 

last Friday are followed to the letter. 

Government also intends to 

work on changing the orientation 

of Nigerians, Presidential Media 

Aide, Laolu Akande said during 

a midterm press briefing to commemorate 

the second anniversary 

of the Buhari administration. 

Briefing alongside Presidential 

Spokesman, Femi Adesina and 

Garba Shehu, Akande noted that 

since the orders will be driven 

mostly by officials of the Ministries 

Departments and Agencies of the 

government, the existing laws 

would be met with sanctions if anyone 

tried to go against the orders. 

Already, Acting President Osinbajo 

will on Wednesday meet with 

about 2,000 public and civil servants 

to interact and ensure they 

understand the role they play in 

the implementation of the orders. 

“There are rules in the civil 

service and these rules will be invoked 

if anyone tries to go against 

the orders. 

“The Acting President is meeting 

with 2,000 public and civil 


It also asked the banks to step 

up credit to the private sector to 

support economic recovery and 

convey a positive feedback to the 

financial system. 

Ayodeji Ebo, Managing Director, 

Afrinvest Securities limited said 

The MPC’s decision was broadly in 

line with expectation and analysts’ 

consensus. 

“We expect the renewed investor 

sentiment in the Nigerian 

capital market will be sustained as 

the CBN has reaffirmed its commitment 

to ensure the dynamics 

of demand and supply play out in 

the I&E FX window. “Besides, lowering 

MPR now will not translate 

into improved lending, as the risk 

within the real sector remains evident. 

That said, the fiscal managers 

should consolidate on the current 

FX market gains by channelling 

more effort to the successful implementation 

of the approved government 

policies targeted at lifting the 

economy out of recession.


5

6 



7

8 BUSINESS DAY C002D5556 


NEWS 

Experts push for proper taxation, regulatory policies to grow REITs market 

CHUKA UROKO 

Experts at a one-day 

conference on ‘Real Estate 

Investment Trusts 

(REITs) in Sub-Saharan 

Africa (SSA) organised by the 

Nigerian Stock Exchange (NSE) 

in Lagos Tuesday pushed for 

proper taxation, favaourable 

regulatory policies and transparent 

corporate governance 

which they considered as major 

impediments to the growth of 

REITs market in SSA, especially 

in Nigeria. 

Globally, the REITs market 

has seen some momentum 

which speaks to relative growth 

and development. According to 

Ernest & Young report of 2016, 

global market capitalization of 

REITs now stands at approximately 

US$1.7 trillion, up from 

US$734 billion in 2010. 

In the US where REITs started 

in 1960, the market has grown 

by almost 150 percent, while the 

market capitalization of non-US 

REITs has more than doubled. 

The two fastest-growing markets 

in the last five years are Australia 

and Japan, both of which have 

now overtaken France and the 

UK to be the second- and thirdlargest 

global REIT markets respectively. 

In Africa, the market has not 

done so well, though not without 

encouraging story. According 

to Oscar Onyema, NSE’s CEO, 

African REITs market is presently 

valued at US$29 billion and is 

available in four countries including 

Ghana, Nigeria, South Africa 

and Kenya. 

“There are only 32 REITs in 

Africa with South Africa being 

the largest REIT market having 

27 REITs and Nigeria second with 

three REITs listed. In 2015, an 

estimated $265 million worth of 

transactions were concluded in 

Kenya, Nigeria and Ghana, a big 

improvement on the $65 million 

seen in the three markets during 

2012”, he said, adding, “this 

indicates an increasing market 

as a larger number of investors 

are beginning to take increased 

interest and participation in the 

real estate sector. 

The African real estate markets 

are well positioned for a longterm 

growth phase, especially 

in Nigeria, given the significant 

supply deficit across the continent. 

Onyma believes that the 

current state of this asset class 

and the huge opportunities the 

sector holds make the push for 

favourable policy frame work, 

good tax regime and corporate 

governance necessary. 

As an investment vehicle 

or instrument that owns and 

manages portfolio of incomegenerating 

real estate, REITs 

comes with attractive benefits 

that include higher dividend, 

secured income by long leases, 

inflation protection, portfolio 

diversification, high liquidity, etc. 

But investors don’t readily move 

cash to that market, hence its slow 

growth 10 years after the first REIT 

was floated by Sky Shelter Fund. 

The slow growth of the market 

is reflected in the performance 

of the six REITs that have 

come to the market within this 

period, including the Sky Shelter 

Fund, Union Homes Hibrid REIT, 

Sun Trust, UPDC, HMK REIT 

and the most recent one floated 

by Top Services Limited which is 

targeted at retail market. 

“The poor performance of 

REITs as an investment instrument 

in Nigeria is due to lack 

of transparency, low foreign 

capital inflow, the Land Use Act, 

poor regulatory policies, etc”, said 

Abimbola Ogunbanjo, 1st Vice 

President of the NSE, who also 

canvassed the establishment 

of a separate land registry that 

should deal with all issues related 

to REITs . 

Taiwo Ogundele, partner at 

PwC West Africa Tax Leader, who 

spoke on Regulatory Environment 

and Financial Reporting to 

Promote Market and Investor in 

the Development of Real Estate 

Assets and Investments, added 

that a special tax regime should 

be created for the REITs market. 

“The regulatory issues by the 

Securities and Exchange Commission 

(SEC) and NSE should 

be harmonized”, he suggested 

and advised that government 

should do what is expected of it 

with right policies and leave the 

private sector to drive and grow 

the market.


INSIGHT 

AUSTIN OKERE 

Austin Okere is the Founder of CWG 

Plc & Entrepreneur in Residence at 

CBS, New York. Austin also serves 

on the World Economic Forum Global 

Agenda Council on Innovation and 

Intrapreneurship and on the Advisory 

Board of the Global Business School 

Network (GBSN). 

Should banks be changing? 

After centuries of conservatism 

in receiving deposits 

and making loans, should 

banks be changing? There 

are two main issues stirring 

the yearning for change: The first 

being that it is a very difficult club to 

join, and hence the large population 

of unbanked adults. Secondly, even 

for the members of this elite club, 

the relationship is acutely skewed 

in favour of the banks; naturally so, 

as they have carried on as protected 

monopolies with no serious challenge 

or competition, resulting in no significant 

innovation over the decades. 

The biggest threat to the banks has 

been precisely their seeming success. 

Centuries of relatively significant 

higher returns, even in the midst of 

economic downturns that adversely 

affect the real sectors has engendered 

an attitude of invincibility and pomposity, 

characterized by a loss of touch 

with their customers. Considered too 

big to fail, they take it for granted that 

they will be bailed out with taxpayers’ 

money in the event of any missteps – a 

perfect prey for disruption. 

Fintech – the new kid on the 

block 

Today, there has emerged a powerful 

force of challenge from Financial 

J. B NWACHUKWU 

Nwachukwu is a lawyer and a writer. 

nwachukwujo@gmail.com 

In life and indeed in everything, 

forget the razzmatazz 

and focus on the fundamentals 

– Eugene Anenih 

These were the last words 

I heard from Eugene exactly a 

week before his death. On that 

day, we had lunch together and 

an interesting get-together, where 

he spoke on life and work. His 

death came as a shock and thus 

disrupted everything, hence this 

tribute. 

In several of his tribute, the 

late Chukwudifu Optua, a former 

Justice of the Supreme Court, 

constantly repeated that we are 

all actors on a passing stage. We 

act and we fade away. Hence 

the importance of acting well, of 

being an inspiration, of leaving 

footprints others can follow, of 

being a beacon for posterity, a 

light unto all. 

At the end what matters most 

In Nigeria the Yello 

Mobile Account, jointly 

offered by ICT giant CWG 

Plc and GSM major MTN, 

added over 6m accounts 

to an early adopter, 

Diamond bank, within 

the first year of launch. 

Mobile Money services 

are today generating 

6.7% of Africa’s GDP. 

C002D5556 

BUSINESS DAY 

The Fintech challenge and the new face of banking (Part 1) 

Tribute to Eugene Anenih: A man of peace and tranquillity 

is not death—it’s inevitable—but 

how one lived. How the time we 

have is spent in serving others. 

Eugene’s life can be summed 

up in Justice Oputa’s dictum. He 

focused on the fundamentals: 

God, family and work. He struggled 

daily to be a better Christian. 

He was convinced his relationship 

with God had to be worked 

on. He sought to improve his 

doctrinal and spiritual formation 

because he believed in the logic, 

“the more one knows, one loves.” 

His two preferred parking slots 

were known at the local parish 

where he attended Mass daily, not 

because they were reserved for 

him; Eugene made an effort to be 

punctual to all his engagements. 

He served his parish in different 

capacities—the Saturday before 

he died, he led the procession 

to mark the centenary of Mary’s 

apparition at Fatima. He was glad 

to be of service at the Catholic 

Church of Divine Mercy. Not too 

long ago, the Laity Council gave 

him an award of appreciation and 

excellence. 

He was humble. Neither the influence 

and affluence of his father 

got to him; he kept his feet on the 

ground and lived his own life. Although 

surrounded by wealth, he 

was poor in spirit. In this secularist 

era where wealth, well-being and 

knowledge are excuses for disbelieving, 

Eugene wouldn’t have any 

of that. He was proud of his faith, 

engaged friends and colleagues 

on the need to lead better lives. 

He even evangelised. I doubt the 

prisoners at Ikoyi prisons whom 

he visited frequently would believe 

he was Tony Anenih’s son. It’s 

uncommon to find people of such 

calibre paying prisoners visits. 

Eugene placed his professional 

work last not due to a disdain for 

work, on the contrary he was competent, 

principled and hardworking. 

Clienteles of Nova Finance 

and Securities Ltd, his stockbroking 

firm, is proof of his capabilities. 

When it was time to work, Eugene 

worked but he knew when to stop 

and focus on other priorities. At 

a meeting last week in Ibadan, 

a lawyer noticed I didn’t want 

the meeting to drag. When I told 

him I was in a rush to get back to 

Lagos for Eugene’s wake keep he 

said Nova Securities’ Ltd were his 

stockbrokers and they were good. 

Eugene’s life in general, his 

family life especially, was peaceful 

because he took care of the fundamentals. 

In our current world, 

we are constantly bamboozled 

with lots of noise, with competing 

interests, societal pressures, 

9 

Technology companies or FINTECHs, 

as they are more popularly referred to. 

The promise of Fintech is great. It is 

shaking up a stodgy banking system 

and helping to build a more efficient 

one, especially for consumers and 

small businesses. 

Emerging markets showing the 

way in Fintech 

For years, emerging economies 

have looked up to developed countries 

for ideas about how to manage their 

financial systems. When it comes to 

Fintech though, the rest of the world 

will be studying the experience of 

the emerging markets, embodied by 

the widely successful MPESA mobile 

money system, championed by Safaricom 

in Kenya. MPESA has made 

it possible for a large swathe of the 

population to gain financial inclusion 

by providing the opportunity to transact 

financial services vide your mobile 

phone, on a continent where typically 

70% of the population is unbanked. 

MPESA today has more than 60% 

of Kenya’s 33 million mobile users; 

not bad for a service which was only 

launched in 2007. Similar applications 

have metamorphosed across Africa. 

In Nigeria the Yello Mobile Account, 

jointly offered by ICT giant 

CWG Plc and GSM major MTN, added 

over 6m accounts to an early adopter, 

Diamond bank, within the first year 

of launch. Mobile Money services are 

today generating 6.7% of Africa’s GDP. 

China is the undisputed world 

leader in Fintech 

By just about any measure of size, 

China is the world’s leader in Fintech. 

It is by far the biggest market for 

digital payments, accounting for half 

of the global market, according to the 

Economist Magazine. A ranking of 

the world’s most innovative Fintech 

firms gave Chinese companies four 

of the five top slots in 2016. The largest 

Chinese Fintech company, Ant Financial, 

has been valued at about $60b, on 

par with UBS which is Switzerland’s 

biggest bank. Today, digital payments 

account for nearly two-thirds of noncash 

payments in China, far surpassing 

debit and credit cards. 

Peer-to-Peer (P2P) lenders in 

China grew from 214 to over 3,000 in 

2015, and P2P loans increased 28 fold 

from 30b yuan in 2014 to 850b yuan in 

2016.Alibaba’s four year old Yu’eBao 

fund with $165.6b has emerged as the 

world’s largest, overtaking JPMorgan’s 

US government money market fund, 

which has $150b. 

Austin’s Five Forces Model and the 

future of banking 

There are indeed five major forces 

at play here: 

• The banks - traditional and established, 

best with cash and ancillary 

instruments 

• Fintechs – the new kid on the 

block, disrupter, mostly telecom roots, 

best with digital currencies and mobile 

services 

• Regulators - Central Banks, regulating 

traditional banks; and Communication 

Commissions, responsible 

for telecoms regulation (and thus 

Fintechs) 

• Currencies - traditional, such as 

cash and cheques; or Digital, such as 

bitcoin or other cryptocurrencies 

• Customers, and the weight of 

their new found voice. Typically, they 

clamour for whatever will give them 

convenience and lower costs. 

Customers are the most significant 

force, and represented by the 

outermost sector of the concentric 

circles. As they tend more towards a 

preference for digital currencies, the 

Fintechs will tend to assume a more 

prominent role in the new face of 

banking, and the Regulatory regime 

will inadvertently tend towards the 

Communication Commissions under 

whose purview the Fintechs fall. 

This will introduce a regulatory imbroglio, 

as future ‘Huge Banks’ may fall 

outside the regulatory ambit of Central 

Banks (as seems to be the case with 

the MPESA mobile money platform, 

through which Kenyans transacted 

$28billion in 2015, representing about 

44% of the country’s GDP. Safaricom, 

the telecoms promoter of MPESA 

ironically falls under the regulation 

of the Communications Authority of 

Kenya rather than the Kenyan Central 

Bank). 

If the customers however, maintain 

a strong appetite for traditional instruments 

of financial transactions such as 

notes & coins, cheques etc. then the 

current status quo will remain. The 

face of banking will thus be more of 

the same, and the regulatory authority 

will continue to be Central Banks. 

Between these two positions may be 

many variants, depending on the appetite 

and preferences of customers, 

and the pace at which they are willing 

to embrace change. 

Retailers are jumping into financial 

services 

Fintechs are not the only ones 

challenging traditional banks for turf. 

Retailers are also jumping into the 

financial services fray. For instance 

Amazon has launched Amazon Cash, 

a way to shop its site without a bank 

card. The service allows consumers to 

add cash to their Amazon.com balance 

by showing a barcode at a participating 

retailer, then having the cash applied 

immediately to their online Amazon 

account. This product is meant to appeal 

to the those who get paid in cash, 

don’t have a bank account or debit 

card, and who don’t use credit cards. 

Google is also rolling out a new integration 

on mobile. Users of the Gmail 

app on Android will be able to send or 

request money with anyone, including 

those who don’t have a Gmail address, 

with just a tap. 

Banking is going mobile 

In most emerging markets and 

developing countries, the current 

formal financial system only reaches 

a minority of the working-age adult 

population. Smallholder farmers, selfemployed 

households, and micro-entrepreneurs 

have to rely on the age-old 

informal financial mechanisms such 

as rotating savings clubs, moneylenders, 

and pawnbrokers. These 

mechanisms can be unreliable and 

very expensive. In Nigeria for instance 

84.6m people, accounting for 47% of 

the population are unbanked. In sharp 

contrast, mobile phone penetration is 

very high at 94.5 percent; a perfect setup 

for the Fintechs to exploit in their 

mobile dominated financial services 

offering. 

For policymakers from the global 

south, the digitization of retail payment 

systems and financial services 

has become an important economic 

development priority. It offers the 

prospect of reaching far more people 

at far lower costs with the broader 

range of financial services they need 

to build resilience and capture opportunities. 

The 2015 annual gathering of some 

300 central bankers and policymakers 

from 90 countries who have formed 

the Alliance for Financial Inclusion, 

dedicated the bulk of the agenda 

to explore such innovations, which 

could deepen formal financial intermediation 

of their economies. 

Imagine a world where all money 

is digital. Instead of carrying coins and 

notes in their purse, people would keep 

digital currency units in electronic wallets 

on phones, watches or other electronic 

devices. All of this could happen 

digitally the way cash is handed over 

today; in real time, irreversibly, with 

no additional fees. 

(Part 2; the concluding part of this 

series will follow shortly) 

misplacement of priorities etc. All 

this makes it extremely difficult to 

attain peace. Either exteriorly or 

interiorly, because of this difficulty, 

many choose to believe that it’s 

not possible to achieve it. But the 

truth is that deep down many people 

both the poor and the rich desperately 

yearn for peace but they are 

searching in the wrong places. Peace 

cannot be paid for or ordered from 

any mall, it is a fruit of close union 

with God, who is the King of peace. 

Indeed it is gift of God to man. In 

John 14:27, Jesus told his apostles 

“peace I leave you with, my peace I 

give you not as the world gives do I 

give” This peace is so important that 

in Matthew 10:12-24, he charged 

his disciples saying, “when you 

enter any house, they should salute 

it and if it is worthy let their peace 

come upon it”. The homilist at the 

funeral Mass sang hymn 313 (Seek 

heaven Alone) from the Catholic 

Hymn Book. Some key lines were, 

“seeking heaven alone, brings true 

happiness” “though we gain the 

whole world, poor indeed are we, if 

we lose our Jesus for eternity” “Seek 

then, but salvation, seek that peace 

and joy which endure forever, bliss 

without alloy”. I wouldn’t be wrong 

to say that Eugene followed hymn 

313 to the letter. 

The mood of the crowd that attended 

the wake keep and funeral 

Mass didn’t suggest they were gathered 

for a high society event, they 

came to say goodbye to a good man. 

It was an opportunity to reflect on 

how transient and unpredictable life 

is. Eugene was a keen tennis player. 

Many saw him in Church on Sunday 

and yet the next thing we heard 

was, Eugene is dead. When I told 

the security man at my house, he 

jumped and shouted, “that big man”. 

Yes, beg men die too. For some days, 

I’ve noticed the security man hasn’t 

been himself, neither have I—we are 

going examining our lives. 

His death still remains a shock; 

In fact, some tennis players have 

hung their rackets, either as a sign 

of mourning or superstitious fear 

that they could be next. Whatever 

be the case, it’s undeniable that we 

are still in disbelief 

As he was laid to rest, I prayed 

that Eugene may enjoy eternal 

peace; the peace he had began to 

enjoy here on earth. That myself 

and indeed all would forget the 

razzmatazz and focus on the fundamentals. 

And that his wife, three 

children, extended family and 

friends be filled with that Peace. 

Requiescat in pace Eugene. 

Send reactions to: 

comment@businessdayonline.com



C002D5556 

COMMENT 

ECONOMY, POLITY, SOCIETY 

comment is free 

Send 800word comments to comment@businessdayonline.com 

Private capital, foreign investment and the ERGP (2) 

OPEYEMI AGBAJE 

opeyemiagbaje@rtcadvisory.com. 

I 

am constrained to make this 

final intervention on the impact 

of multiple and hugely 

divergent foreign exchange 

rates as well as unclear, unarticulated 

and confusing economic 

policy on foreign direct investment 

in response to our “academic” 

economist’s long treatise of May 

18, 2017 in this newspaper. I will 

confine myself to the issues originally 

in contention, rather than red 

herrings brought into the debate. 

Put simply my statement which 

the academic economist found objectionable 

was that multiple and 

wildly divergent foreign exchange 

rates and unclear economic policy 

were a deterrent to foreign direct 

investment in 2016, which he 

disputed contending that in spite 

of those conditions, Nigeria could 

still “attract” significant foreign 

direct investment in support of 

which he offered two illustrationsa 

purported 1994 investment in 

Nigeria LNG when he claims a dual 

exchange rate system existed and 

the recent Eurobond fund raising. 

I must first correct the factsanyone 

who googles NLNG would 

quickly find that the company was 

started in 1989 and not 1994! In addition, 

the CBN Statistical Bulletin 

2015 confirms that we operated a 

dual exchange rate between 1995 

and 1998. So the academic economist’s 

argument is wrong on two 

accounts! 

Let me quote directly from my 

first article, “In 2015 and 2016 for 

instance, Nigeria “erected” two 

structural barriers against foreign 

investment-one, the structure of 

multiple exchange rates reaching 

as many as 13 according to some 

reports and the huge variance between 

the rates at a point rising to 

a difference of over N200 between 

the lowest and the highest rates; 

and the absence of clarity over economic 

policy. The result of these 

twin barriers was the collapse of 

foreign investment in Nigeria from 

$20.8billion in 2014 to $9.8billion in 

2015 and only $5.1 billion in 2016. 

Given the structure of exchange 

rates and policy uncertainty last 

year, it was highly unlikely that 

any rational investor, except for 

mandatory investments, would 

invest in our economy. Even the 

Nigerian government had to postpone 

its $1billion Eurobond which 

was slated for 2016 to 2017 when 

a better investment environment 

had begun to emerge with rising 

oil prices, larger foreign reserves, 

a new economic policy document 

and CBN policy refinements which 

have significantly increased the 

supply of foreign currency and narrowed 

the gap between the various 

exchange rates.” 

I made these remarks at a public 

forum on May 6, 2017 which 

attracted the “academic” economist’s 

ire! By the way, both those 

comments and my subsequent 

article of May 10 were not a “single 

purpose project” designed to attack 

anyone,but the substance of 

both interventions was to focus 

on government’s Economic Recovery 

and Growth Plan (ERGP), 

highlight lessons Nigeria could 

learn from failed or sub-optimal 

implementation of previous economic 

blueprints, and discuss 

constraints and/or impediments 

which must be removed for the 

plan to succeed, especially in relation 

to private capital and foreign 

direct investment. I maintain 

and the evidence is overwhelming 

that multiple and widely 

divergent foreign exchange rates 

and policy uncertainty were significant 

impediments to foreign 

direct investment, whether real or 

portfolio FDI in 2016 and would 

remain so if not addressed. I am 

also confident that except for 

the surprising exception of our 

“academic” economist, those 

assertions are uncontroversial. 

I must add that I am inclined to 

discuss substance rather than 

personalities, and unlike some 

who may get their testosterone 

levels enhanced by mentioning 

individual names multiple times 

in a 2,200 verbiage, I remain interested 

only in the issues! 

At the forum where these 

pseudo-controversies arose, I had 

pre-informed the organisers that I 

was teaching at a business school 

at 1.00pm and was therefore unable 

to wait for the combined 

Q and A session holding after a 

subsequent panel. The moderator 

was standing up and closing the 

session immediately after the “academic” 

economist’s statement 

having previously highlighted 

time constraints, and other panelists 

were rising and departing 

as well. Indeed the moderator 

only very reluctantly yielded the 

microphone to the correspondent 

for a “final word” which turned 

out to be a frontal attack on my 

position. And I had subsequently 

made efforts to discuss issues 

with our correspondent privately. 

At that point, it became my duty 

to clarify the public record, else 

the patently erroneous view that 

multiple and divergent exchange 

rates and economic policy confusions 

do not negatively affect FDI, 

become accepted as truth. 

I have quoted the figures for 

total FDI in Nigeria between 2014 

and 2016 above-$20.8billion in 

2014; $9.8billion in 2015; and only 

$5.1billion in 2016. A deconstruction 

of those figures reveal that the 

decline pervaded all categories 

of foreign investment: in 2014, 

real FDI was $2.3bn; in 2015 it 

fell by 36% to $1.47bn; and it fell 

again by 29% to $1.044bn in 2016, 

a cumulative collapse of 55%! 

Portfolio investment was $14.9bn 

in 2014; it declined 60% to $6.09bn 

in 2015; and by 2016, it declined 

further by 70% (!) to only $1.8bn 

in 2016! Other investments were 

$3.57bn in 2014; it was lower by 

38% ($2.22bn) by 2015 and stayed 

flat in 2016. Even if we accept the 

narrower and more restrictive 

interpretation of the opposing 

contention by limiting the argument 

to only real FDI while 

ignoring portfolio investments, 

these data show categorically that 

Nigeria must embark on 

effective implementation 

of the ERGP and in doing 

so, we must remove 

all constraints to 

domestic and foreign 

capital, including and 

particularly the 

multiple and divergent 

exchange rates system 

all categories of foreign investment 

suffered from the conditions in 2015 

and 2016. While it is obvious to everyone 

that portfolio investors have 

a shorter investment horizon than 

real FDI investors and are naturally 

more brittle, yet the data and our 

practical experience confirm that 

all investors are concerned about 

sensible and predictable economic 

policy and exchange rate management 

systems! 

What do other economists and 

economic institutions have to say 

on the issue? The International 

Monetary Fund (IMF) conducted 

a very recent Article IV Consultation 

on Nigeria published in March 

2017. Some news media in Nigeria 

and abroad titled their reports on 

that publication, “Dump Multiple 

Exchange Rates, Forex Curbs, IMF 

Tells Nigeria” or words to the same 

effect! I should take quotes from the 

report:- 

• “The external current account 

turned into a surplus in 2016, 

as import compression continues 

to offset falling exports. The foreign 

exchange regime was liberalized 

in June 2016, but FX restrictions 

remain in place and the market 

continues to be characterized by 

significant distortions that have 

contributed to a 50 percent parallel 

market premium which was halved 

following recent increases in central 

bank interventions and the removal 

of prioritized allocation of foreign 

exchange. Under unchanged policies, 

the outlook remains challenging…policy 

uncertainty, crowding 

out, and FX market distortions 

would be expected to drag activity” 

• “The authorities’ Economic 

Recovery and Growth Plan, 

published March 7, 2017 is a welcome 

step forward. It appropriately 

focuses on private sector led economic 

diversification, supported 

by government efforts to strengthen 

infrastructure and the business 

environment. But without stronger 

macroeconomic policies-notably 

higher non-oil tax collections (to 

create fiscal space) and a more 

transparent foreign exchange regime 

(to facilitate adjustment and 

promote diversification)-the plan 

will not meet the objectives of fostering 

higher growth and employment” 

In these quotes, the IMF makes 

essentially the point I was making! 

Multiple media reports also 

highlighted the African Development 

Bank’s (AfDB) approval of a 

$1bn facility in the first instance for 

Nigeria, with prospects of a larger 

$4.1bn approval that could even 

rise to $10bn. However AfDB disbursed 

only $600million of these 

insisting on further policy reforms 

before continuing further disbursements. 

Nigeria’s delisting 

from the JP Morgan Government 

Bond Index for Emerging Markets 

in 2015 which cost us huge 

portfolio flows in 2015-2016 and 

till date was due to the absence of 

liquidity and transparency in our 

foreign exchange markets. Quite 

frankly on further reflection, given 

the publicly available data and information, 

it is simply astounding 

that we are now engaged in this 

debate! I should take a quote from 

“Equities Market Outlook in 2017” 

issued by Afrinvest reported in the 

media under the headline “Multiple 

Exchange Rates Stall Foreign 

Inflow into Nigerian Equities” in 

January 2017, “Our interactions 

with several foreign investors with 

interests in Nigeria suggest that 

a decision to stake any position 

in the Nigerian market will be a 

function of currency liquidity and 

a greater certainty on their ability 

to repatriate capital anytime they 

divest. As a result, we do not see 

significant foreign capital flowing 

into Nigerian equities in the short 

to medium term as the discrepancy 

between the parallel and interbank 

market rates continue to deter interest 

in Nigeria” 

Former Chief Economic Adviser 

and CBN Governor, Professor 

Chukwuma Soludo has also been 

on record on several occasions 

against policy and exchange rate 

uncertainty. In a widely reported 

intervention in April 2017, Soludo 

advised the FGN/CBN to end the 

multiple exchange rates and wide 

divergence between exchange 

rates saying, “Nigeria must get out 

of multiple exchange rates and we 

must eliminate the premium…the 

uncertainty that is created by that 

is so enormous” 

In relation to the two examples 

offered in support of a flawed hypothesis, 

I wondered in the first 

instalment of this article “how does 

a 2017 offer which was deferred 

precisely because the environment 

was unfavourable in 2016, disprove 

a hypothesis about the conditions 

in 2016?” and “how can a successful 

dollar Eurobond priced at over 

7% be the evidence anyone offers 

when FDI and portfolio investment 

remain significantly suppressed in 

the economy?” Incidentally Businessday 

featured in its edition of 

May 18, (the same day the academic 

economist’s treatise was printed) 

a report that “Senegal raises $1.1bn 

Eurobond at lower cost than Nigeria’s 

$1.5bn”. Senegal is a far smaller 

economy than Nigeria, but while 

our Eurobond was issued at 7.87%, 

they raised money at 6.25%. Andrew 

Nevin, an economist with a 

Doctorate from Harvard explained 

that “in Nigeria’s case, the relatively 

high rate demanded by investors 

reflects continuing uncertainty 

about the path of economic development 

(i.e. policies)…investors 

are concerned by our poor Ease 

of Doing Business and confusing 

FX policies”. With regard to the 

NLNG investment I also re-state 

my previous position-“most analysts 

and academics know that if 

anyone wanted to demonstrate the 

strange hypothesis that multiple 

and widely divergent exchange 

rates do not affect foreign investment, 

he could cite the evidence 

of more recent years, but that ob- 

viously not being consistent with 

the facts, our economist then went 

over two decades back to 1994 to 

cite an exception, a single investment 

in an environment of otherwise 

grossly low investment, in a 

sector where people invest even 

in times of war, to justify a faulty 

hypothesis”. It should be easy to 

understand that exchange rates are 

not a major concern for an investor 

who is coming to take mineral 

resources from your country (oil, 

gas, diamonds, copper etc.), sell 

them in the international market 

and retain the proceeds in foreign 

currency in its home country. That 

is why IOCs continued to invest 

in Nigeria throughout our years 

under military rule and why there 

are still global companies taking 

mineral resources from D.R Congo, 

Iraq and Libya inspite of war and 

instability! And even then, investments 

have been significantly reduced 

in our contemporary oil and 

gas sector due to the absence of 

fiscal terms, regulation and other 

legal and policy gaps!!!Most importantly 

our academic economist’s 

whole hypothesis is founded on an 

easily verifiable falsehood-NLNG 

was incorporated in May 1989 and 

the dual exchange rate system only 

happened between 1995 and 1998. 

By the way, most readers know 

that I am a big advocate of private 

capital-domestic and foreign, 

and I have consistently advanced 

positions in support of FDI, FPI, 

Concessions, PPPs, private investments 

in infrastructure, deregulation 

and liberalization, and other 

policies and strategies for improving 

investment in the Nigerian 

economy. Indeed most people 

are aware that my major critique 

of economic policy since May 

2015 was a “body language” that 

appeared to disdain private and 

foreign capital, a point ironically 

that I also made on May 6, 2017. Attempting 

to cast a treatise as if the 

argument was over the desirability 

or otherwise of foreign real FDI 

investment amounts to intellectual 

sophistry! And by the way, how do 

you “attract” real FDI without clarity 

in your policy positions? Isn’t 

our “academic” economist perhaps 

actually calling for POLICY 

designed to attract real FDI? 

I acknowledge(and I did so in 

my comments of May 6 and article 

of May 10) that conditions have 

somewhat improved for FDI and 

overall economic growth in 2017 

with a decent policy documentthe 

ERGP, greater FX availability 

and increased rate convergence, 

amongst others. As I concluded in 

my original article, the substantive 

and I insist uncontroversial 

take-away from all this is that 

“Nigeria must embark on effective 

implementation of the ERGP and 

in doing so, we must remove all 

constraints to domestic and foreign 

capital, including and particularly 

the multiple and divergent 

exchange rates system. Of course 

many other steps, some outlined 

in ERGP and others not quite, 

must be taken to build a growing, 

diversified, globally competitive 

and inclusive Nigerian economy”. 

So much for academic distractions! 




COMMENT 

SMALL BUSINESS HANDBOOK 

EMEKA OSUJI 

Dr Emeka Osuji 

School of Management and 

Social Sciences 

Pan Atlantic University 

Lagos. eosuji@pau.edu.ng @Emyosuji 

The problem of poverty in 

Nigeria is not abating. At 

best it is getting worse and 

at worst it has gone beyond 

our capacity to manage. 

And this has nothing to do with the 

laudable policy of microfinance and 

its very successful implementation. 

Nigeria is at critical cross roads of its 

socio-economic development. The 

continued organised misgovernance 

and manipulation of religion and politics 

by vested interests have ensured 

that we get into a bind that is hard to 

break. Today, the poor in many parts 

of the country are no longer afraid of 

poverty because something worse 

than poverty has arrived. They fear for 

their lives. As things stand, the nation 

is in such a bad shape that in or out of 

recession, it makes no difference to the 

lives of most of the ordinary people. In 

Nigeria hard facts are risky to share but 

the man dies….. 

There is incontrovertible evidence 

that most of the 36 states have practically 

become unable to meet the needs 

of their people. They exist only because 

it is politically profitable to some of our 

political class to continue to maintain 

this failed structure and leadership 

style. Not only are the majority of the 

states insolvent and unable to meet 

their financial obligations, they are 

BRIAN REUBEN 

Brian Reuben is a global thought leader 

on business and leadership. He helps 

business leaders improve performance 

and make more profit. @brianreuben 

Conventionally, it is thought 

that increased pay leads 

to increased productivity. 

But a recent study by 

economists at the University of 

Warwick found that happiness led 

to a 12% increase in productivity, 

while unhappy workers proved 10% 

less productive. 

According to Professor Andrew 

Oswald, one of three researchers 

who led the study, companies that 

invest in employee support and 

satisfaction tend to succeed in generating 

happier workers. At Google, 

employee satisfaction rose 37% as a 

result of those initiatives—suggesting 

that financial incentives aren’t 

enough to make for highly productive 

employees. 

Your most important assets are 

human beings and interestingly man 

is more of an emotional rather than 

intellectual being. The biggest and 

most profitable companies in the 

world understand this truth and are 

C002D5556 

BUSINESS DAY 

comment is free 

Send 800word comments to comment@businessdayonline. 

Microfinance and the challenge of failing states 

flatly unable to provide safety and security 

to their people. And this is one 

of the parts of the Nigerian problem 

that everyone would like to avoid but 

the man dies…... 

Worse still, the institutions endowed 

with the capacity to secure them 

have been privatized. The police and, 

sometimes, the army whose primary 

duty is to protect the people, have been 

parcelled out to politicians and the 

privileged few on guard duty and as orderlies 

for all manner of people. Few are 

left for the real calling. As a result, the 

streets have been occupied by dangerous 

gangs who make sure that, in some 

rural areas, farmers no longer farm and 

traders no longer come to markets. The 

economic activity of the poor, which is 

the basis of microfinancing has been 

victimised and brought to a standstill. 

In such areas, one begins to wonder 

how the effectiveness of our microfinance 

programme can be assessed, as 

social collapse and insecurity continue 

to rubbish microfinancing. 

A recent Channels Television presentation 

on the power supply challenges 

faced by artisans in Nassarawa state 

was as elixir for this piece. Although it 

was a rehash of the tale of woes we get 

from all over the country on the failure 

of governments to solve the basic problem, 

which everyone knows is behind 

the mass poverty in Nigeria–debilitating 

epilepsy of power supply. In that 

story, a spray painter and many other 

artisans, who seek to legitimately earn 

a living, spend all they make to provide 

power through generators. This is the 

same story everywhere and instead 

of declaring a national emergency on 

electricity we are busy splitting hair 

on what an Acting President could 

sign and not sign.; and following the 

same spending pattern that brought 

us to this shameful state – a battle of 

supremacy between the executive and 

How many of us know that 

there are days reserved for 

armed robbers to rob the 

people in some places and 

that there are days when 

people in some villages literally 

dress up and wait to be 

robbed by armed robbers? 

The robbers come on certain 

market days as a matter of appointment, 

to rob the people 

in some villages outside Lafia 

in Nassarawa state 

the legislature, a bloated civil service of 

many ghost workers the source of whose 

entry to the service has never been found, 

translucent security votes and inflated 

contracts and more. 

Following the Nassarawa story I 

decided to dig deeper on the economic 

activity of the poor in that area of Nigeria. 

The results are terrifying. As we sit in 

Abuja to postulate our shares of the 2017 

budget, life has come to a standstill in 

many parts of the middle belt. At a point 

one wonders whether some of these 

states, including Nassarawa and Taraba, 

are not worse hit by Boko Haram than 

the North East. I don’t know how many 

of us are aware that life in many parts of 

that area, especially outside their state 

capitals, is a nightmare. How many of 

us know that there are days reserved 

for armed robbers to rob the people in 

some places and that there are days when 

people in some villages literally dress up 

and wait to be robbed by armed robbers? 

The robbers come on certain market days 

as a matter of appointment, to rob the 

people in some villages outside Lafia in 

Nassarawa state. I was told that the rob- 

bers come on market days to rob those 

who sold cattle. It was alleged that the 

police is aware and feeling inadequate 

to confront the robbers, often close by 

6pm and return to their bases, leaving 

the people to their own devices. 

This further strengthens the argument 

that Nigeria as presently constituted 

cannot serve the needs of a modern 

state. The borders are wide open and 

trailer loads of strangers, most of whom 

do not speak any Nigerian language 

poured into Taraba when Sambisa 

Forest was attacked, according to the 

Governors Chief of Staff. The strange 

visitors entry was turned to a political 

discourse and nothing happened. 

This story of the artisans in Nassarawa 

is not a unique. It is the story of 

every part of the country. The absence 

of electricity, among other tools of 

economic empowerment, has made it 

impossible for Nigerians to depend on 

themselves. They have been deprived of 

the opportunity to exercise their talents 

and therefore, poverty has become the 

destiny of many children yet unborn. 

Poverty reduces the quality of the human 

person. The poor often sound 

incoherent and appear somewhat 

unintelligent because they have little 

learning and no time to think outside 

the box of hunger and destitution. They 

are forced to focus on the immediate 

stomach infrastructure challenges to the 

exclusion of any futuristic engagement. 

Some governments around the world, 

including North Korea, have at one 

point or the other used mass emiseration 

to elicit loyalty from their people. 

Microfinancing cannot succeed in 

an environment where people have 

suspended their will and enterprise and 

resorted to opportunism and dependence 

on prebendalism. The essence 

of microfinancing is to tackle poverty 

by empowering the poor who are economically 

active. This is what prompted 

the federal government to launch the 

How to build a highly productive workforce 

as such committed to the emotional 

stability of their workforce. Lara 

Harding, People Programs Manager, 

Google gave an insight into how 

Google look at their people when 

he said, At Google, we know that 

health, family and wellbeing are an 

important aspect of Googlers’ lives. 

We have also noticed that employees 

who are happy ... demonstrate 

increased motivation ... [We] ... 

work to ensure that Google is... an 

emotionally healthy place to work. 

Perhaps one of the most important 

things business leaders 

must accomplish is shaping the 

perception of their workforce in the 

direction of their corporate vision. 

When workers see themselves as a 

part of the company, when they feel 

at home, are happy and take pride 

in their job they can withstand any 

pressure at work. 

The happiness of your workforce 

is directly linked to their productivity. 

The truth is that even one 

unhappy employee can negatively 

impact on your organisational 

performance. So you want to have 

happy and satisfied employees because 

that’s good for your business. 

Ironically being the highest paying 

company in your industry does not 

guarantee a happy workforce. It 

takes an intelligent mix of mission, 

culture and management to create 

happy employees. 

Mission 

A mission defines what a company 

live for. It begins by a clearly defined 

and effectively communicated mission 

such that everyone in the organization 

from the CEO to the Janitor 

understands clearly, believe in and are 

excited about; a mission the workforce 

so believes in that it shapes their life 

and work attitude. There is the apocryphal 

story about a janitor at NASA 

who when asked by someone what 

he was doing, replied ‘I’m helping to 

put a man on the moon.’ How could 

the Janitor think that way? The answer 

is simple. The leadership at NASA did 

a good work in communicating their 

mission to the entire workforce. 

People are glad to be a part of 

something meaningful. They put their 

best effort in a mission or goal that 

excites them. This is where you begin. 

Clearly every successful organisation 

has an exciting mission that is so 

well communicated that even their 

security men understand it. For Coca 

Cola, it is to refresh the world in mind, 

body and spirit. To inspire moments of 

optimism and happiness through our 

brands and actions. For Microsoft, it is 

to empower every person and every 

organization on the planet to achieve 

more. Need we be surprise then these 

companies make it into the list of the 

best companies to work in? 

Culture 

“There’s no magic formula for a 

great company culture. The key is just 

to treat your staff how you would like 

to be treated.” – Richard Branson 

The corporate culture is the core 

of any businesses and it is as important 

as getting in the sales. According 

to Investopedia, a corporate culture 

refers to the beliefs and behaviours 

that determine how the company’s 

employees and management interact 

and handle outside business 

transactions. 

You should let your corporate 

culture inspire happiness among 

your workforce. The advice of Mr 

Branson sums up the secret of creating 

a culture that will make the heart 

of your employees to sing. Following 

his advice delivers the magic of happiness 

in your organisation. Imagine 

for instance, an organisation where 

the CEO understands how to be firm 

as well as laugh freely with the employees. 

That’s just like a good daddy. 

The staff are glad you are there, not 

scared. Consider Facebook which 

targeting a ‘frictionless’ workplace 

has everyone working together on 

big, white, communal desks. 

Even Mr. Zuckerberg doesn’t have 

an office. Instead, opting to work 

alongside the other employees in the 

‘bull-pen’ like workspace. Potentially 

having an intern work alongside the 

boss is incredibly daunting, yet motivating. 

This surely adds to the corporate 

culture at Facebook, as equality 

is not only preached, but practiced. 

So think about your peculiar case 

and create a culture that inspires 

11 

National Microfinance Policy, which has 

gone a long way to tackle the endemic 

poverty across the country. 

Today, microfinance banks, numbering 

about 1000 have been established 

and working all over the country. 

However, while considerable progress 

has been made in canalizing financial 

resources to the poor and boosting their 

economic activities, it does appear that 

much has not been achieved. As more 

microfinance institutions get into the 

fray, more people seem to get into the 

poverty net. There are more educated 

beggars today than in 2005. Many are beginning 

to think that the microfinance 

sector is failing in reducing poverty. 

This may be a wrong impression but 

it is justifiable based on facts outside 

the control of the microfinance sector. 

It is hard to talk about microfinancing 

without talking about poverty, 

its raison d’eter. Nor can we discuss 

poverty in Nigeria without mentioning 

the rapidly shrinking ability of the 

state to protect the citizens. How does 

a microfinance institution deal with 

the poor in a state where people sleep 

in churches and mosques most nights? 

How do people survive in a state where 

hotel management evacuates guests 

because an attack was expected? This 

is what is going on in the villages of 

Nassarawa state and perhaps, other 

surrounding states. I hope Boko Haram 

has not left and changed tactics while 

we continue to bombardSambisa. 

Could it be that the robbers are not 

mere armed robbers? Could it be that 

Boko Haram has stopped holding 

territories but makes do with ensuring 

that the place is destabilised? As I said 

there are certain topics we do not like to 

discuss but microfinance fails wherever 

the state fails. 


comment@businessdayonline.com 

your employees to believe in your 

company. Be a mentor rather than a 

superior. Be unassuming, employees 

like it. 

Besides that, find ways to make 

people laugh freely at the work place. 

Nothing beats creating a happier corporate 

culture by bringing smiles and 

laughter into the work place. 

Management 

According to Hal Rosenbluth in 

his book Customers Come Second, 

“Profits are a natural extension of happiness 

in the workplace.” Your employees 

will care about your business 

to the degree you care about them. 

Part of management’s responsibility 

is to manage the total well being of 

the employees. You can’t close your 

eyes and insist on performance when 

a staff is weighed down by emotional 

issues. You can’t act like you don’t 

know someone looks depressed when 

you should as a matter of fact observe 

the disposition of your people. Show 

enough concern in the affairs of your 

people and they will be happy to give 

you their commitment. 

Finally, it matters how happy your 

people are. Their productivity depends 

on how happy they are. When 

you care about your people they 

will care about your business. If you 

neglect that you will watch profits go 

down the drain. 





C002D5556 

EDITORIAL 

PUBLISHER/CEO 

Frank Aigbogun 

EDITOR-IN-CHIEF 

Prof. Onwuchekwa Jemie 

EDITOR 

Anthony Osae-Brown 

DEPUTY EDITOR 

John Osadolor, Abuja 

NEWS EDITOR 

Bill Okonedo 

EXECUTIVE DIRECTOR, 

SALES AND MARKETING 

Kola Garuba 

EXECUTIVE DIRECTOR, OPERATIONS 

Fabian Akagha 

EXECUTIVE DIRECTOR, DIGITAL SERVICES 

Oghenevwoke Ighure 

CHIEF FINANCE OFFICER 

Folashade Odusanya 

MANAGER, SYSTEMS & CONTROL 

Emeka Ifeanyi 

HEAD OF SALES, CONFERENCES 

Rerhe Idonije 

SUBSCRIPTIONS MANAGER 

Patrick Ijegbai 

CIRCULATION MANAGER 

John Okpaire 

GM, BUSINESS DEVELOPMENT (North) 

Bashir Ibrahim Hassan 

GM, BUSINESS DEVELOPMENT (South) 

Ignatius Chukwu 

Deepening LPG usage 

Nigeria’s per capita 

consumption 

of Liquefied 

Petroleum 

Gas (LPG) commonly 

called cooking gas is 

about 2 kg or 350,000 metric 

tons a year. It ranks very low 

especially when compared 

to some African countries 

like Ghana (4.7kg), Senegal 

(9kg), Egypt (60kg) and Morocco 

(68kg). LPG is the least 

utilized of the four major 

cooking fuels (Firewood, 

Kerosene, Charcoal, and Gas) 

in Nigeria. 

Though, Nigeria’s LPG 

market has witnessed massive 

growth from less than 

70,000 metric tonnes consumed 

in 2007 to the current 

400,000MT (471.4 percent 

increase within 10 years), 

there is, however, potential 

to grow Nigeria’s consumption 

to over 1 million metric 

tonnes in the near term. This 

will throw up investment opportunities 

in the LPG value 

chain especially in-country cylinder 

manufacturing which was 

previously the case for Nigeria. 

Nigeria currently relies 

mostly on gas from Nigeria 

Liquefied Natural Gas Limited 

(NLNG) to meet local demand 

but even that suffers from delays 

due to government’s decision 

to prioritise petrol in 

discharge to jetties and limited 

number of jetties and terminals. 

Recently, there was price 

volatility of LPG due to unpredictable 

and supply shortages. 

The cost of 12.50 kg cylinder 

moved from between N2, 900 

and N3, 100 to between N 6,000 

and N 7,000. During the price 

hike, some of the users of cooking 

gas around the country, 

especially food sellers vowed 

that except the price of cooking 

gas becomes affordable they 

would return to their old ways 

of using fire wood. 

One of the impediments to 

ramping up LPG usage is Nigeria’s 

gas cylinder manufacturing 

capacity which is still low 

largely due to high cost of steel, 

power challenges and freewheeling 

exchange rate that 

has seen the cost of production 

hit the roof. Raw materials for 

gas cylinders are imported and 

they suffer 40 per cent duties 

and tariffs. The consequence of 

this situation is increased importation 

of gas cylinders and 

the use of expired gas cylinders 

which pose risk of leakage and 

endangers lives and property. 

Industry analysts say the 

Federal Government should 

put in place intervention funds 

to encourage the manufacture 

of cylinders in the country to 

stem the loss of about $10m 

being spent annually to import 

them. 

Another major issue is that 

Lagos is the only point in the 

country where you can bring 

in LPG. Ships have to wait for 

many days sometimes to unload 

leading to demurrages. 

This means that consumers 

cannot depend on LPG because 

supply is sporadic and unreliable 

and will instead continue 

to use kerosene. Consumers 

become extremely susceptible 

to fluctuation in prices due 

to inconsistent availability or 

government support. 

There should be a deliberate 

policy by government to 

drive investments in the LPG 

sub-sector and remove current 

challenges. There are operators 

who need to have certain guarantees 

in relation to market, 

even in terms of taxes when 

they are investing in much 

needed infrastructure. 

There is an urgent need for 

an LPG road-map in Nigeria 

that would drive development 

and growth in the market. If this 

is not done, we will continue to 

talk and work without noticeable 

progress. There is also the 

need for a greater level of sensitization 

of Nigerians on the 

importance and relevance of 

the usage of LPG, which is a factor 

for the pursuit of a cleaner 

energy that is also affordable. 

EDITORIAL ADVISORY BOARD 

Dick Kramer - Chairman 

Imo Itsueli 

Mohammed Hayatudeen 

Albert Alos 

Funke Osibodu 

Afolabi Oladele 

Dayo Lawuyi 

Vincent Maduka 

Wole Obayomi 

Maneesh Garg 

Keith Richards 

Opeyemi Agbaje 

Amina Oyagbola 

Bolanle Onagoruwa 

Fola Laoye 

Chuka Mordi 

Sim Shagaya 

Mezuo Nwuneli 

Emeka Emuwa 

Charles Anudu 

Tunji Adegbesan 

Eyo Ekpo 

NEWS ROOM 

08022238495} Lagos 

08034009034 

08033160837 Abuja 

ADVERTISING 

01-2799110 

08116759801 

08082496194 

ENQUIRIES 

SUBSCRIPTIONS 

01-2799101 

07032496069 

07054563299 

www.businessdayonline.com 

The Brook, 

6 Point Road, GRA, Apapa, 

Lagos, Nigeria. 

01-2799100 

LEGAL ADVISERS 

The Law Union 

MISSION 

STATEMENT 

To be a diversified 

provider of superior 

business, financial and 

management intelligence 

across platforms accessible 

to our customers 

anywhere in the world. 

OUR CORE VALUES 

BusinessDay avidly thrives on the mainstay of our core values of being The Fourth Estate, Credible, Independent, 

Entrepreneurial and Purpose-Driven. 

• The Fourth Estate: We take pride in being guarantors of liberal economic thought 

• Credible: We believe in the principle of being objective, fair and fact-based 

• Independent: Our quest for liberal economic thought means that we are independent of private and public interests. 

• Entrepreneurial: We constantly search for new opportunities, maintaining the highest ethical standards in all we do 

• Purpose-Driven: We are committed to assembling a team of highly talented and motivated people that share 

our vision, while treating them with respect and fairness. 

www.businessdayonline.com

Wednesday 24 May 2017 C002D5556 BUSINESS DAY 13 

COMPANIES 

& MARKETS 

COMPANY NEWS ANALYSIS AND INSIGHT 

‘No Premium No Cover’ undermines 

Staco Insurance premiums 

…Company Posts N1.85 billion loss 

BALA AUGIE 

The ‘No Premium Cover 

policy introduced by regulators 

in order to ensure 

that operators are liquid has 

undermined Staco Insurance 

premium income as the insurer 

posted a loss of N1.85 billion 

to end the 2016 financial year. 

Gross premium written was 

N5.40 billion in December 2016 

as against N6.18 billion the 

previous year. Net premium 

income fell by 23.07 percent 

to N3.60 billion in the period 

under review as against N4.68 

billion as at December 2015. 

“There was a decrease of 

12.33% and 15.96% in gross 

written premium respectively 

for group and company in 2016 

in comparison with 2015 due 

to the reality of no premium 

no cover policy that was put 

in force by the Nigerian Insurance 

Industry regulator,” the 

company said in its Management’s 

Comment and Analysis. 

A combination of weak 

top lines and rising operating 

expenses was responsible for 

Staco Insurance 2016 loss. 

The Nigerian insurer has 

an operating expenses ratio of 

94.05 percent, which means 

it spent nearly its entire net 

premium income to fund the 

its operational costs of close to 

N3.4 billion. 

The National Insurance 

Commission (NAICOM), the 

body that regulates insurance 

business in Africa’s most populous 

nation introduced the ‘No 

Premium No Cover’ Policy in 

order to make the government 

Electricity market gears for competition 

as Gencos sell power to customers 

ISAAC ANYAOGU 

Nigeria’s electricity 

market is bracing for 

competition after 

the Federal Government 

through the Nigerian Electricity 

Regulatory Commission 

directed that electricity 

generation companies can 

now sell power directly to 

customers. 

The directive is based on 

the provisions of Section 27 

of the Electric Power Sector 

Reform Act 2005 that allows 

eligible customers are permitted 

to buy power from a 

licensee other than electricity 

distribution companies. 

Prior to this policy, the 

DisCos operated like a mo- 

more committed to premium 

obligations and make it pay 

large amount of debts it owed 

the insurance industry. 

“The receipts of an insurance 

premium shall be 

a condition precedent to a 

valid contract of insurance 

and there shall be no cover in 

respect of an insurance risk 

unless the premium is paid 

in advance,” Section 50 of the 

Insurance Act says. 

nopoly. Even investors interested 

in mini grid plants 

were constrained by the 

exclusive rights the DisCos 

assume over their franchise 

areas. This is changing. 

“It will deepen competition 

in the electricity market,” 

says Idowu Oyebanjo, 

a Power System Engineer 

from the UK. 

Oyebanjo further said, 

“The expectation is that the 

large industrial consumers 

like Manufacturers Association 

of Nigeria, (MAN) 

industrial clusters and business 

and energy parks will 

benefit from this policy. 

This is will gravitate towards 

the independent electricity 

distribution networks own- 

Apart from the negative 

impact of the aforementioned 

policy on the performance 

of Staco, the economic 

downturn created 

apathy towards the insurance 

industry. 

A recession caused by a 

sharp drop in the price of oil 

and a severe dollar shortage 

rendered consumers impotent 

and unable to acquire 

properties worth insuring. 

ership.” 

The four categories of 

eligible customers in the 

Nigerian Electricity Supply 

Industry (NESI) comprises 

of a group of end-users registered 

with the Commission 

whose consumption is 

no less than 2MWhr/h and 

connected to a metered 

11kV or 33kV delivery point 

on the distribution network 

and subject to a distribution 

use of system agreement 

for the delivery of electrical 

energy. 

The next category includes 

those connected to 

a metered 132kV or 330kV 

delivery point on the transmission 

network under a 

transmission use of system 

Rising unemployment 

evidenced by layoffs means 

insurers lost premium they 

would have made on employee 

contributions. 

Insurance contributed 

less than 1 percent to the 

country’s GDP in 2016. 

A recent survey by the 

Chartered Insurance Institute 

of Nigeria (CIIN) revealed 

that about 86.6 million 

Nigerians do not have any form 

Primary education 

should be the focus of 

educational policies 

of insurance cover. 

In spite of all these challenges, 

Staco Insurance remained 

profitable and efficient 

as combined ratio (CR) stood at 

57.77 percent, lower than the 

100 percent threshold. 

The Nigerian insurer’s total 

net claims plunged 37.50 percent 

to N1.05 billion; claims 

ratio dropped to 29.16 percent 

in December 2016 from 35.89 

percent as at December 2015. 

L-R: Monica Peach, Human Resources Director, Guinness Nigeria Plc (GN Plc); Peter Ndegwa, Managing Director, GN Plc; Bola Olajomi-Otubu, 

Human Resources Director, Commercial; and Rotimi Odusola, Acting Corporate Relations Director, during the grand finale of the Guinness 

Cup held at Agege Stadium, Lagos. 

Pic by Pius Okeosisi 

agreement for connection 

and delivery of energy. 

Other category of customers 

includes those with 

monthly consumption in 

excess of 2MWhr/h, and 

who are connected directly 

to a metered 33kV delivery 

point on the transmission 

network under a transmission 

use of system agreement. 

The last category comprise 

eligible customers 

whose minimum consumption 

is more than 2MWhr/h 

over a period of one month 

and who are directly connected 

to the metering facility 

of a generation company, 

and has entered into 

a bilateral agreement for the 

construction and operation 

of a distribution line with 

the distribution licensee 

licensed to operate in the 

location. 

“But it’s not all doom 

and gloom for Discos,” said 

Wesley Omonfoman. “Other 

than those connected directly 

to the transmission 

system, eligible customers at 

11KV and 33KV would need 

to enter into an agreement 

with Discos, called Distribution 

Use of System (DUoS) 

to get supply from Gencos.” 

Omonfoman further said, 

“Thus Discos expectedly 

would still earn their percentage 

of the revenues due 

to them from the overall 

electricity tariff.” 

P15 

Synergy Capital’s 

$100mn maiden 

fund buys 

Dimension Data 

INNOCENT UNAH 

Synergy Capital, the Mauritius-domiciled 

private 

equity fund that focuses 

on West Africa investments, 

has acquired the Nigerian 

and Ghanaian subsidiaries of 

technology company Dimension 

Data in a deal whose 

terms were not disclosed. The 

purchase is the 10th investment 

Synergy is making with 

its $100 million maiden fund. 

Dimension Data is based 

in Johannesburg, with a turnover 

of USD 7.4 billion and 

offices in 49 countries, is a 

member of the Japan-based 

NTT group, the world’s largest 

colocation provider that 

owns more than 12.5 million 

square feet of gross data center 

spaces as at 2015. 

The Nigerian and Ghanaian 

business concerns of 

Dimension data will now 

be called Cloud Exchange 

Limited in a brief transitional 

period; the company will provide 

IT systems integration 

services to large corporations 

and government entities 

across West Africa. 

“Our deep understanding 

of the region together with the 

Dimension Data and NTT’s 

technological capabilities will 

unlock value for our clients,” 

said Akintoye Akindele, Partner 

at Synergy Capital. “Our 

ability to anticipate and adapt 

to technological changes has 

been the drive for this partnership 

and acquisition.” 

The Economist Intelligence 

Unit’s ‘Building a digital 

Nigeria’, a report published 

last year, said that digital 

technology is helping to drive 

growth in promising non-oil 

sectors in Nigeria, from media 

and entertainment to finance 

and fast-moving consumer 

goods. 

The report said that digital 

technology could play an enabling 

role in increasing access 

to government services 

like health and education, 

improving financial inclusion 

through mobile money, and 

helping businesses overcome 

infrastructure deficits. 

Nigeria is connected to 

the Internet by 5 submarine 

cables, all of which land in 

Lagos,11 providing upwards 

of 11 terabytes of bandwidth 

per second, much higher 

than many other West African 

countries, although only 

between 10 and 20% of this 

capacity is actually used. 

This gap reflects the lack of 

necessary surrounding digital 

infrastructures like fibre optic 

cable and base transceiver 

stations (BTS).

14 

BUSINESS DAY 

COMPANIES & MARKETS 

Sokoto State Govt, BOI to disburse N2bn 

loans to entrepreneurs – Commissioner 

Sokoto State Government 

and the Bank of 

Industry (BOI), are set 

to disburse N2 billion loans 

to small, medium and large 

scale entrepreneurs to boost 

industrial development. 

The state’s Commissioner 

for Commerce, Industry and 

Tourism, Alhaji Aminu Bello, 

announced this at a news 

briefing to mark the two years 

in office of Gov. Aminu Tambuwal 

in Sokoto on Monday. 

Bello said: “The BOI has 

concluded arrangement to 

contribute a matching fund 

of N1billion, plus the N1billion 

the state government will 

contribute to make the total 

N2billion.” 

“As soon as formalities 

regarding the facility are com- 

Shoprite Nigeria makes large donation to AUN’s feed and read program 

KEHINDE AKINTOLA 

Shoprite has donated 

goods valued at N2- 

million to the American 

University of Nigeria’s 

Feed and Read Program. 

The items, which included 

perishable and 

non-perishable food, beverages, 

and toiletries, will 

be used by the program to 

help vulnerable children 

in the North-Eastern part 

of Nigeria, where an estimated 

78% of 6-17 year 

pleted, disbursement will be 

made to the beneficiaries.” 

The commissioner further 

said the newly established 

Sokoto Organic Fertiliser 

Production Plant at Kware 

Local Government Area will 

soon commence production. 

He said, ”the project, 

which is a partnership between 

the state government 

and IML Company, has been 

completed. 

“The plant is a publicprivate 

partnership between 

Sokoto State Government 

and IML Company, which is 

constructing the plant. 

“The project is 100 percent 

completed while the factory 

has carried out test run process 

successfully. Thus, full 

operation will commence 

olds cannot read. The statistics 

for girls and women 

are even worse. 

The low literacy and 

numeracy rates are compounded 

by the number 

of children who are displaced, 

separated from 

families or orphaned; large 

numbers of displaced 

teachers; and schools that 

have been destroyed or 

closed due to violence in 

the area. 

The program teaches 

beneficiaries how to read 

soon”, Bello said. 

”The N250million plant 

would produce 15,000 metric 

tonnes of fertiliser annually 

as well as provide over 20,000 

jobs.” 

Bello said 100 per cent of 

the raw materials to be used 

in the production of the commodity 

would be sourced 

locally in the state. 

According to him, apart 

from opportunity for wealth 

creation, the fertiliser factory 

would explore abundant 

natural resources in the state. 

Bello further disclosed 

that the state government 

will hold 40 per cent equity 

shares in trust for the people 

of the state, while the remaining 

shares will be held by 

IML Ltd. 

and provides them with a 

meal every day. It is aimed 

at preparing them to move 

into mainstream schooling 

and finding employment. 

The donation reflects 

Shoprite Nigeria’s support 

for the aims of the 

Feed and Read program 

and the incredible hard 

work and persistence of its 

team. Shoprite Nigeria is 

committed to supporting 

initiatives which benefit 

the communities in which 

it operates. 

Business Event 

C002D5556 


L-R: James Carmichael, director, examinations SSA, British Council, Janet Morris, director International 

Network, Cambridge; Neil Musk, director operations, Cambridge, and Andrew Davidson, head of prosperity 

fund and deputy head of Missions, British High Commission, representing the British Deputy High 

Commissioner, at the British Council Recognition and Outstanding Cambridge Learners Awards in Lagos. 

L-R: Sam Adeboye Afolabi, board member, Hall of Grace Awards; Waheed Olagunju, acting managing 

director, Bank of Industry (BoI), receiving the Plaque as the CEO of the Year from Dupe Olatunbosun, 

and Rupart Ojenuwa, CEO, HOG Awards and Magazine, during the Hall of Grace (HOG) Awards 

Anniversary 07 in Lagos. 

L-R: Sina Ogunbona, pionner staff and long serving Staff, Draiklinas Limited; Tunde Ayeye, chairman, 

board of directors, and Afolabi Abraham, country manager, during the presentation of long service award 

and cash price to Ogunbona, by the management of Draiklinas, at UBA House, Lagos. 

Obafemi George, Eti-Osa LGA Chairmanship Aspirants with H.E Sebastian Kurz the Foreign Secretary 

of Austria and contender for the next Austrian Chancellor at the recently concluded one week leadership 

programme for future political and business leaders from around the world hosted by the Austrian 

Government in Vienna.



Primary education should be the 

focus of educational policies 

The quality of time invested in studying is often associated with high examination success. However, experts have 

also established the important role of good policies and teaching methodologies in this success. Ignatius Inyang, 

regional manager of Tutor Doctor Nigeria, a franchise of the global in-home tutorial provider recently spoke to 

FRANK ELEANYA about the unique method the organisation uses to reduce examination failure in Nigeria. 

What gave 

birth to Tutor 

Doctor? 

Founded 

in 2000 by 

John Hooi in North America, 

John realized that there was 

a huge demand for quality, 

focused and very personal 

one to one tuition carried 

out by only the best tutors 

within the students own 

home and family environment. 

He realized that the 

biggest way we could help 

struggling students was to 

make it easy on them. The 

team then started by visiting 

students at home, on 

the schedule they chose and 

set the price in such a way 

that not only wealthy parents 

were able to afford the 

teaching advantage that was 

offered. That has become 

our driving model till date. 

Today, Tutor Doctor has 

over 500 offices in 17 countries. 

And each tutor recruited 

by the franchisee 

goes out into the field and 

gives a free consultation to 

evaluate the possible tutor/student 

relationship, to 

build a personalized map for 

the student’s success, and to 

help educated the parents 

on how Tutor Doctor works. 

What characteristics of 

a doctor best typify the 

Tutor Doctor methods? 

Our methodology focuses 

on an in-depth face to face 

consultation with the parents 

or guardians and the 

student to assess exactly 

what the challenges are, 

academic goals to be met 

and aspirations of the student. 

Taking the students 

personality, learning style, 

likes, dislikes and interests 

into consideration we take 

care to match the best possible 

tutor with the student. 

Our in-home tutoring 

service evaluates every student 

closely to identify their 

needs and to track their 

progress. We understand 

that no two students are the 

same. Everyone learns with 

different styles and at their 

own pace. That is why we 

Ignatius Inyang 

offer specialized tutoring 

to address all our clients’ 

needs. 

Tutor Doctor treats each 

student like a unique individual. 

We know that every 

child, teenager, and adult 

has different learning styles. 

That is why our tutors sit 

down with you and your 

child to develop a program 

that fits their specific needs 

and learning abilities. Our 

process is unique, focusing 

on the student’s areas of 

weakness and approach to 

learning. 

In your view, what are 

the major issues that 

has made examination 

failure rate stay so high 

in Nigeria? 

As with many countries 

around the world investment 

by the federal government 

in the state education 

system is challenged by lack 

of available funds leading 

to high classroom student 

numbers and lack of learning 

resources. Limited resources 

dilute the effectiveness 

of formal education. 

Do you offer tutorial on 

every subject? 

Tutor Doctor should be 

seen as an education ‘concierge’ 

service. We are able 

to help all students of all 

ages with all subjects, as 

well as students with learning 

challenges. Tutor Doctor 

also helps students in all 

varieties of academic tests, 

including SAT, PSAT, WAEC, 

UTME and many others. 

During sessions, we provide 

exercises and drills that develop 

test-taking skill, quick 

recall, and mitigate worry. 

Teacher quality is a 

major challenge and a 

contributor to failure rate. 

What criteria do you consider 

when recruiting 

teachers? 

There are three criteria 

which are of paramount 

importance when recruiting 

a Tutor Doctor tutor - 1) 

Proven academic qualifications 

to show an intimate 

knowledge of the subject or 

subjects the tutor is going 

to engage in. 2) A clear passion 

in being able to make a 

difference to the academic 

success of a young person. 

3) Excellent verbal and written 

communication skills in 

order to be able to build a 

solid relationship with the 

families they are working 

with. 

Give us an example of 

your success stories? 

There are thousands of 

success stories from those 

who have become high 

achievers to those who 

just needed help improving 

their grades so they 

could enter the next stage 

of their education journey 

and reach for their dreams. 

Tutor Doctor changes lives 

every day and these can be 

seen from our tens of thousands 

of positive testimonials 

we have received from 

parents across the world. 

Each year we honour our 

tutors through our Global 

Tutor of the Year Award. In 

2017 nearly 500 tutors were 

nominated by families for 

their excellent work. Nominations 

were received from 

all corners of the globe. 

Do parents immediately 

warm up to the idea 

of a personal teacher? 

Our success story is a 

powerful one with parents, 

and also with schools, our 

tutors alongside our rigorous 

matching process help 

parents to see very quickly 

that our methodology 

makes a difference. 

Do you have regulatory 

challenges and how 

have you dealt with them 

so far? 

There are some regulations 

which have to be 

complied with but nothing 

out of the ordinary or challenging. 

You mentioned in an 

interview that you rely on 

the existing curriculum. 

Do you consider that 

enough in today’s digitally 

competitive world? 

The existing local curriculum 

which the student 

is studying is what we focus 

on because students are 

generally aiming to pass 

local exams with the best 

grades they can achieve. 

Of course, if we are asked 

to provide any other subject 

matter we are happy 

to do so and sometimes if 

the student has expressed 

his/her aspirations we will 

suggest enhanced learning 

opportunities 

Which level of education 

should be the primary 

focus of educational 

policies? 

Primary education 

should be the focus of educational 

policies as it forms 

the bedrock of academic 

knowledge. 

How do you deploy 

technology in teaching 

your students? 

Tutor Doctor supports 

the use of technology to 

deliver the very best tutorial 

in the appropriate circumstances. 

For example 

if the best match tutor is a 

large distance away from 

the student we would recommend 

to the parents that 

we provide the tuition using 

an online learning platform 

where student and tutor can 

interact together. 

Where do you see Tutor 

Doctor in the next ten 

years? 

Tutor Doctor will continue 

to grow in our existing 

markets as well as in 

new countries across the 

globe as the demand for 

supplementary education 

continues to rise and global 

employment opportunities 

become more competitive. 

We expect to have over 1000 

offices globally


C002D5556 Wednesday 24 May 2017 

BANKING 

In Association 

with 

Improving economy 

positive for banking sector 

Stories by 

HOPE MOSES-ASHIKE 

The economy 

which is beginning 

to recover 

from recession 

occasioned by 

drop in oil prices and foreign 

exchange shortage is 

seen to impact positively 

on the banking sector. 

There has been a record 

of improvement on the oil 

prices and production capacity. 

For instance, Brent 

oil traded at $53.86 per barrel 

as at Monday May 22, 

2017 afternoon, extending 

gains as Saudi Arabia said 

all producers participating 

in output cuts have agreed 

on prolonging the deal till 

the end of the first quarter 

of next year. 

Also the naira/dollar 

exchange rate has recorded 

some improvement, 

How Fidelity Bank boosts savings with promo scheme 

The savings deposit 

base of Fidelity 

Bank plc has been 

enhanced since 

it began the promo draw 

initiative called “Get Alart 

in Millions”, aimed at encouraging 

savings culture 

and promoting financial 

inclusion. 

In its 8th monthly draw 

in the ‘get alert in million 

promo held last week, the 

bank gave out N11 million 

to six lucky customers and 

12 consolation prizes to 

18 winners. 

With this, the bank has 

given out a total of N84 

million to 128 winners 

with several consolation 

prizes since the inception 

Segun Ajibola, president/chairman, council, Chartered 

Institute of Bankers of Nigeria (CIBN) 

of the initiative in September 

last year. 

Customers who won 

N2 million each in the 

last draw include Latinwo 

Idowu Adefowope 

from Ota branch, Ogun 

State; Bonori Isa, a student 

of Afe Babalola University; 

Kafilat Olayinka 

Dada, a fashion designer 

of the bank’s Iyanu Ipaja 

branch; Saifullahi Ibrahim 

of Katsina branch 

and Onoyima Ejiofor, 

Okafor Francis and Mbah 

Innocent (joint account 

holders) from the bank’s 

Nnewi branch. 

Chijioke Ugochukwu, 

executive director, shared 

service and product, “We 

with the local currency 

presently trading at the 

rate of between N378 and 

N380 to the dollar from 

N520/$ sold in January 

and early February. This 

follows the intervention 

of the Central Bank of 

Nigeria (CBN) by way of 

increased dollar supply in 

the foreign exchange market 

as well as the creation 

of various forex windows 

to ease pressure on access 

to foreign exchange 

and to close the huge gap 

between the official and 

Bureau De Change (BDC) 

segment of the market. 

“I believe the economy 

is recovering fast from recession 

that it found its self 

in the last two years. The 

global oil market is recording 

some improvement 

and some other sectors 

of the economy are growing 

and making some new 

wave. All these put together, 

we expect some modest 

Nnamdi Okonkwo, managing director, Fidelity Bank 

improvement in the overall 

economy and when this 

happens it will be positive 

on the banking industry”, 

Segun Ajibola, president/ 

chairman of council, Chartered 

Institute of Bankers of 

Nigeria (CIBN) said. 

Speaking with journalists 

in Lagos at the end of 

the annual general meeting 

of the Institute, Ajibola said, 

“as at today, there are a lot 

of challenges in the banking 

industry in the area of 

performance of borrowers 

in particular honouring 

their obligations as at when 

due and in other key performance 

indicators but as the 

economy improves, we expect 

that to rub positive on 

the Nigerian banking and 

financial institutions generally”. 

Looking at the performance 

of the Institute in 

2016, Ajibola said “the 

2016 is an improvement 

over the previous year, but 

are still working hard to 

make sure we make more 

millionaires. We are very 

excited and pleased that 

this is taking place under 

the watchful eyes of the 

lottery regulators.” 

Speaking further she 

said, “This is the best time 

to have a promo that gives 

out cash and several of 

the winners of both today 

and the past, have 

expressed a lot of joy and 

happiness that the winnings 

will make great different 

in their businesses, 

in their family lives, in all 

that they have proposed 

and planned to doing this 

years,”. 

She advised members 

we do know that the economy 

was challenged in 

2016. There were a lot of 

global developments that 

created disequilibrium in 

the economy but through 

some new initiatives, the 

doggedness of the leadership 

of the institute, and 

our courage into new areas 

and the activities of the 

institute, we were able to 

record some special improvement 

in all aspect of 

the institute life”. 

Seye Awojobi, Registrar/CEO 

of the Institute 

said the year 2016 was both 

challenging and rewarding, 

adding that the Institute 

weathered the storm with 

remarkable achievements. 

During the year under 

review, he said the membership 

of the Institute 

grew slightly from 118,802 

in 2015 to 122,680 in 2016 

representing an increase of 

3.26 percent. 

of the public to leverage 

the promo initiative to 

open account with the 

bank. According to her 

the bank would continue 

to introduce customer reward 

schemes to encourage 

loyal customers. 

To participate in the 

promo draw, you are required 

to open a savings 

account and grow it to 

N20, 000 or top up existing 

account with N10, 

000 or more to qualify for 

monthly draws to win up 

to N3 million. You can also 

grow your account balance 

by N50, 000 monthly 

to qualify for quarterly 

draws to win star prize of 

N5 million.


Tax Digest 

C002D5556 

BUSINESS DAY 

17 

Nigeria’s economy seen hindering 

level of tax compliance 

IHEANYI NWACHUKWU 

The dwindling 

state of Nigerian 

economy and 

the present economic 

recession 

have hindered the level of 

tax compliance by individuals 

and organizations, said 

Ntiedo Umoren, immediate 

past dean of the Faculty of 

Business Administration, 

University of Uyo. 

The expert believes that 

when tax is managed properly, 

the economy grows at 

an acceptable pace, while 

social programmes that 

benefit the poor receive 

boosts to enhance quality 

living conditions for all. 

Umoren disclosed this 

in a paper titled “alignment 

of appropriate tax policy 

options with economic realities: 

the essence of business 

oriented and timely 

intervention”, he presented 

at the just concluded 19th 

annual tax conference of the 

Chartered Institute of Taxation 

of Nigeria (CITN) held 

in Abeokuta, Ogun State 

with the theme “Taxation 

and Governance: The Social 

Contract Imperatives”. 

According to him, 

“Where the income of individuals 

and organisations 

are negatively affected by 

external factors, tax evasion 

becomes a normal practice.” 

In the paper he presented, 

Umoren attempted to 

examine how a business oriented 

approach to taxation 

via qualitative tax policies 

can enhance an improved 

socio-economic environment 

for the benefit of the 

people. He discussed current 

tax policy options in 

Nigeria. 

“This practice affects 

government revenue and 

the provision of infrastructures. 

This also impairs 

government from the fulfil- 

ment of social contract to 

its citizens. Therefore, to establish 

the link between tax 

policies, socio-economic 

realities, there is the need 

to revisit the fundamental 

principles of taxation as 

advanced by Adam Smith,” 

Umoren noted. 

The professor opined 

that there can be no meaningful 

tax policy if the four 

doctrines (Canon of Equality, 

Canon of Certainty, 

Canon of Economy, and 

Canon of Convenience) are 

not satisfied. 

“Where taxes are assessed 

without any input 

from the taxpayer, it negates 

the provisions of the 

basic cannon of equality”, 

he added. 

He had noted that as a 

critical component of the 

global governance structure, 

taxes provide governments 

with a manipulative 

tool for national development. 

“It does not matter 

whether the government 

in power is conservative 

or liberal, it surely must 

tinker with taxes in order 

to develop a budget that 

matches that government’s 

developmental agenda”. 

“We have argued elsewhere 

(Umoren, 2015) that 

taxes drive economic progress, 

and provide social 

stability. 

There are ample theoretical 

and empirical evidence 

in the literature indicating 

that a strong historical, 

causal, and symptomatic 

relationship exists between 

the sustainability of effective 

taxation, good governance 

and social contract. 

However, in spite of the 

huge benefits derivable 

from taxation which is indeed 

a social contract with 

the people, the scarcity of 

money in the economy usually 

necessitates tax evasion 

among individuals 

and organizations”, Umoren 

stated. 

Psychology of taxpayers and voluntary tax compliance (1) 

FRANK UDEMBA JACOBS, 

MAN PRESIDENT 

Traditional economics 

postulated that 

voluntary tax compliance 

is determined by 

punitive measures in Tax laws 

aimed at deterring defaults. 

However, even as there have 

been many cases where tax 

defaulters have been severely 

punished by way of frozen 

accounts, seized landed property 

and at the extreme jail 

terms sentences; non-taxcompliance 

persists. It therefore 

follows that by implication 

punitive measures have 

failed to completely entrench 

voluntary compliance among 

taxpayers. 

To reiterate, the focus of 

this paper is to examine the 

influence of psychological 

factors on behaviour of taxpayers 

for compliance. Modern 

explanation of factors 

influencing tax compliance is 

predicated on the psychological 

perception of the taxpayers. 

This perception borders more 

on Political Government Accountability. 

Damayanthi in 

his study on “Psychological 

Factors that affect Tax Compliance” 

published in 2015 noted 

that the perception of political 

government accountability is 

categorized into social norms, 

public spending, perceived 

fairness on tax system and 

moral tax. 

Social Norms 

Sigala et al. in their study 

on “Tax Communication and 

Social Influence: Evidence 

from a British sample” published 

in 1999 noted that social 

norms are one of the most 

important predictors of Tax 

compliance. According to the 

study, by approval or disapproval, 

norm-following and 

norm-breaking are accepted 

in a society and individual 

behaviour is adjusted by the 

norms. There are two major 

levels at which social norms 

are built and they include Personal 

and Society levels. These 

norms are important determinants 

of tax compliance and 

are behavioral standards. 

Personal Norm presupposes 

that moral reasoning, 

values, religious beliefs, good 

upbringing as well as community 

values ensure voluntary 

tax compliance. Standards 

of behaviours such as honest 

personality, norm-dependency, 

or religious beliefs usually 

correlate with high Tax ethics 

and willingness to comply. 

Society norms also determine 

the level of voluntary 

tax compliance. Relationship 

between Tax payer and 

authorities as well as the Tax 

legislation represent the integrated 

cultural standards of 

societal norms. When a mutually 

beneficial understanding 

exists between the Tax payers 

and the authorities, compliance 

is achieved effortlessly. 

This can be related to the 

impasse currently brewing 

the Federal Inland Revenue 

Service and manufacturers 

who woke up to receive notices 

of Property Valuation and Assessment 

without any prior 

discussion and explanation. 

Of course manufacturers necessarily 

and justifiably kicked 

against it 

Fairness and Equity 

Fairness and equity of a 

tax system also impacts upon 

compliance levels. Perceived 

fairness of taxation has been 

found to strongly co-vary with 

compliance. Unfairness serves 

as rationalization and justification 

for tax non-compliance. 

A good tax system must be 

designed on the basis of an 

appropriate set of principles, 

such as equity or fairness and 

certainty. The most explicable 

requirement of equity or fairness 

is to treat equal people 

in equal circumstances in an 

equal way. 

Fair treatment of taxpayers 

and a culture of mutual 

understanding between tax 

authorities and taxpayers improve 

trust in authorities and 

enhance compliance. 

Tax Morale 

Tax morale is defined as the 

collective attitudes of a group 

or population to comply with 

tax law. Tax morale is linked 

to the motivational concept 

of civic duty. Tax morale and 

compliance is higher in countries 

characterized by high 

control of corruption, low size 

of bureaucracy and political 

stability. Richardson in his 

“Preliminary study of the impact 

of tax fairness perception 

dimensions on tax compliance 

behaviour in Australia” 

published in 2008 noted that 

low trust in tax authorities are 

correlated with high levels 

of tax evasion. Damayanthi 

also noted that ‘tax morale’ 

has higher legitimacy for political 

institutions that has led 

to higher tax morale values. 

Compliance is therefore highest 

in countries characterized 

by high control of corruption 

and low size of bureaucracy. 

Generally, the tax attitude 

of taxpayers depends to a great 

extent on the ways tax revenue 

are collected and expended. 

It is found that if taxpayers 

perceive that the government 

is expending on something 

considered unnecessary or 

unbeneficial to the development 

of the country, taxpayers 

tend to avoid and attempt to 

evade tax. Taxpayer’s perceptions 

are potentially important 

in determining their compliance 

behaviours. In summary, 

the government should 

prudently spend taxpayers’ 

money because the way in 

which the government spends 

the money influences levels of 

compliance. 

Overview of Tax Performance 

in Nigeria 

Tax plays a crucial role 

in the development of any 

economy in the context of 

revenue generation and tools 

for economic stabilization. As 

a revenue generator, it provides 

the Government with the 

needed funds to offer welfare 

services to the citizenry. Taxes 

and tax systems are, therefore, 

central to any effort to build a 

nation especially in the developing 

world. 

The key components of any 

tax system are tax policies and 

tax administration. 

This is an extract from 

the paper he presented at the 

just concluded 19th annual 

tax conference of the Chartered 

Institute of Taxation of 

Nigeria (CITN)

18 

BUSINESS DAY 

maritime 

Shipping Logistics Maritime e-Commerce 

business 

How pirate attacks, security concern threaten 

shipping activities in Eastern ports 

…As NIMASA moves to enhance safety of ships on Nigerian maritime domain 


Stories by 

Uzoamaka Anagor-Ewuzie 

The Nigerian Ports 

Authority (NPA) 

Eastern Zone has 

indentified security 

concern caused 

by activities of pirates and 

sea robbers as a major challenge 

facing seaports in the 

South-South region, popularly 

known as the Eastern ports. 

Abubakar Garba Umar, 

port manager of Rivers Port 

Complex, who said in a statement 

issued at the weekend, 

that ‘issue of piracy attack and 

ensuring safety and security 

on the water ways’ are the immediate 

responsibilities of the 

Nigerian Maritime Administration 

and Safety Agency 

(NIMASA), also pointed to 

the need to increase security 

patrol of the water ways leading 

the ports in the Eastern 

region. 

The port manager, who 

recently paid a courtesy call 

to the port service comptroller 

of NIMASA, Umar Dachia 

with the aim of maintaining 

the existing cordial relationship 

between both agencies, 

stated that constant security 

patrol of the waterway gives 

ship owners the confidence 

of doing business in the port 

without having the fear of being 

attacked. 

“The attack of pirates on 

ships is a serious issue that 

affects the patronage of the 

port,” Umar pointed. 

Commending NIMASA’s 

effort in enhancing trade facilitation 

at the port, the NPA 

boss observed, that since he 

took over as the port manager, 

NPA has never received 

any complain of delay in 

ship clearance from shipping 

agents. 

This, according to him, 

shows that NIMASA recognises 

the issue of trade facilitation 

as one of its statutory 

responsibility that must be 

handled with keen attention. 

The NPA boss however 

solicited officials of NIMASA 

to put the authority on the 

known especially as regards 

to change of status of shipping 

Hadiza Bala Usman 

company by NIMASA. 

In his response, Dachia 

said that NIMASA has been 

trying in terms of security, 

and this led her to previously 

establish partnership with 

the Global Vessel to provide 

the agency with platform 

for the patrol of the nation’s 

maritime domain, which the 

agency has terminated and 

looking for new options to 

ensure that the waterways are 

constantly in check. NIMASA 

also signed Memorandum of 

Understanding (MoU) with 

the Nigerian Navy to patrol 

the water ways. 

Dachia promised to put 

his men on the right track 

of ensuring that whenever 

there is change in the 

documentation procedure 

as it covers ship clearance 

and operations, the Port 

Manager should be given 

first-hand information. He 

promised to bring up all 

the challenges and issues 

brought up by the NPA to the 

management of NIMASA at 

the headquarters. 

In a related development, 

Dakuku Peterside, the director 

general of the NIMASA 

has assured Nigerians and 

the international maritime 

community that the Federal 

Government is leaving no 

stone unturned in tackling the 

menace of piracy and other 

illicit crimes on the nation’s 

territorial waters. 

He disclosed that the Federal 

Government recently approved 

for the procurement of 

three helicopters and 12 fast 

intervention vessels to ensure 

coastal and aerial surveillance 

as well as constant patrol 

of the Nigerian maritime 

domain by the Nigerian Navy 

and the NIMASA team. 

Stating that piracy was 

not on the increase in the 

Nigerian waters and the Gulf 

of Guinea, Peterside noted 

that inter agency and regional 

cooperation through bilateral 

agreements as well as effective 

maritime domain awareness 

and strong legislation to 

criminalise and punish pirate, 

have become fundamental in 

addressing the challenges. 

Also, Abdulsalam Suleiman, 

director, Legal Services 

of NIMASA said recently in 

a statement issued by the 

agency that NIMASA is presently 

working with the Federal 

Ministry of Justice to 

finalise the bill and has the 

assurances of the National 

Assembly of the expeditious 

passage of the bill into law 

within the shortest possible 

time to strengthen Nigeria’s 

anti piracy crusade. 

Recall that as part of its 

commitment to fighting 

piracy and other maritime 

related crimes, the Federal 

Government approved the 

sum of $186 million for the 

acquisition of the above mentioned 

maritime security 

infrastructure. 

Osikoya says diversity, inclusion drive innovation 

at world’s biggest shipping firm, Maersk Group 

The priority attention 

accorded to the concept 

of diversity and 

inclusion has become 

critical to driving innovation at 

the A.P. Moller-Maersk Group, 

Rachel Osikoya, head, Diversity 

and Inclusion of theMaersk 

Group says. 

“At Maersk we are focusing 

specifically on diversity 

in terms of gender, nationality 

and age. Generational 

diversity is something a lot of 

companies are looking at now. 

It is also about how you think, 

how you solve problems, what 

difference you bring to the 

organisation,” said Osikoya, 

who was in Lagos recently for 

a women leadership development 

programme. 

According to her, diversity 

is about understanding and 

managing differences at the 

workplace. “If we have the 

same particular set of people 

in an organisation, we are 

never going to innovate or 

come up with new ideas. We 

are going to be doing things 

in the same way every time 

and in our industry, things 

are changing rapidly. So, we 

need to have that diversity in 

our organisation to compete 

successfully,” she added. 

According to her, there 

Rachel Osikoya 

is need to have leaders or 

managers who would bring in 

those different ideas and enable 

people to be able to use 

that diversity for the benefit of 

the organisation. “The inclusion 

phase is how you make 

the diversity work. So, we see 

it as a competitive advantage 

for Maersk.” 

She said to increase the 

retention rate of women in 

the organisation, a new policy 

which allows female staff enjoy 

18 weeks of maternity leave on 

full pay after childbirth came 

into effect from April 4, 2016. 

“The maternity policy also 

includes a phased reintegration 

to work for all onshore 

employees. 

“We are still measuring 

the impact of the maternity 

policy because it has just been 

a year but what we are seeing 

is an increase in the retention 

of women, which is what we 

want. The policy gives the 

mother the time to bond with 

the child and be ready to come 

back to work. 

Also, she observed that the 

Group saw that the policy will 

enable to retain roughly about 

70 percent of females after 

maternity leave because 80 

percent of the women that left 

did so in the first 12 months, 

which is the most critical period 

in retaining new mothers. 

“Integration back into 

work after a maternity leave 

is important and it helps to 

provide a little flexibility for 

the employee coming back,” 

Osikoya said. 

She said the Maersk Group 

has received positive feedback 

from its staff on the new maternity 

policy. 

“We have heard positive 

response from the female 

staff and even the male staff 

commenting on how good 

the maternity leave was for 

women. So, we had positive 

response from employees 

and a good response from our 

Human Resource team as well 

who implemented the policy 

across the 130 countries,” she 

added. 

SIFAX Haulage, SAHCOL get award for outstanding service delivery 

SIFAX Haulage and 

Logistics Limited and 

the Skyway Aviation 

Handling Company 

Limited (SAHCOL), of the SI- 

FAX Group, have received two 

major recognitions for delivery 

outstanding services in 

the nation’s transport sector. 

SIFAX Haulage and Logistics 

Limited received ‘the 

Haulage & Logistics Company 

of the Year’ while SAHCOL 

clinched ‘the Aviation Handling 

Company of the Year’ 

at the fifth Nigeria Transport 

Awards held in Lagos. 

The award, Frank Kintum, 

editor-in-chief of Transport 

Day Newspaper said, was 

in recognition of the SIFAX 

contribution to the development 

of the industry, which 

is expected to spur competition 

and excellence service 

delivery in the sector. 

Henry Ajetunmobi, executive 

director of SIFAX Haulage 

said the award was in recognition 

of the hard work and 

innovation the company’s 

management and staffs have 

put in over the last one year. 

“The company has worked 

assiduously over the years to 

build a haulage company that 

is reliable, efficient and customer-focused. 

Our driving 

force is the desire to surpass 

the expectations of our client, 

no matter how high they are,” 

he added. 

While appreciating the 

organisers for the award, Basil 

Agboarumi, general manager, 

Corporate Communication 

of SAHCOL assured that the 

company would strive to 

maintain the high standards 

that it has set for itself. 

The Nigeria Transport 

Awards is an annual event 

designed to reward deserving 

companies that have shown 

diligence, innovation and 

excellence in the logistics 

industry. 

L-R: Afolasade Ekundayo, client relationship officer; Olusola Ajayi, assistant general manager; 

Henry Ajetunmobi (rtd), executive director, all of SIFAX Haulage and Logistics; Basil Agboarumi, 

general manager, Corporate Communications, Skyway Aviation Handling Company of Nigeria 

(SAHCOL), a subsidiary of SIFAX Group and Olumuyiwa Akande, corporate affairs manager, 

SIFAX Group at the 5th Nigeria Transport Awards held in Lagos recently.


E-mail: ag@businessdayonline.com 

AGRIC 

BUSINESS 

6 cocoa processors owe Nigerian banks N50bn 

…cocoa value addition on the decline 

Stories by JOSEPHINE OKOJIE 

Nigeria’s cocoa processing 

industry has been 

choked by a N50 billion 

debt it owed commercial 

banks operators in the 

country. 

This has led to a decline in the 

country’s value addition in recent years 

and resulting to a $2 billion annual loss, 

industry sources say. 

Key players in the industry who 

spoke with BusinessDay said unless 

there is a well-defined policy for 

processing of agricultural commodities, 

the country would continue to exports 

it jobs and lose revenue it would have 

generated through value addition. 

“Most of the indigenous cocoa 

processors are really under the heavy 

weight of debt and that why none is 

operating at full capacity today. The total 

debt in the industry today is not less that 

N50billipn between six processors,” 

said Akin Olusuyi, chairman, Cocoa 

Processors Association of Nigeria 

(COPAN) during a press briefing with 

journalists in Lagos recently. 

“We have a total of eight cocoa 

processing firms in the country with 

only 2 functional. The two that are 

functional now are foreigner owned. 

There is no indigenous processor that 

is functioning now as we speak,” said 

Olusuyi who is also the chief executive 

officer of Ile Oluji Nigeria Limited. 

He stated that the total installed 

capacity of cocoa processing plants in 

the country is 270,000 metric tonnes 

but cumulatively, the industry is 

operating below 15 percent capacity 

currently. 

Nigeria, world’s fourth largest 

cocoa producer and supplier, saw the 

value of its global supply decline by 23.4 

percent from 248,000 metric tonnes 

in 2014 to 190,000 tonnes in 2015, 

according to the International Cocoa 

Organisation (ICCO) in its latest data 

on global production. 

According to COPAN, the debt 

incurred by the industry was as a result 

of the harsh operating environment in 

the country and the inability to secure 

loans at single digit interest rate. 

“An average borrowing cost to any 

cocoa processors by any bank in the 

country is 25 percent interest rate, 

when processors in Ivory Coast and 

Ghana obtain loans at single digit. How 

can we be competitive?” asked Akin 

Laoye, executive director, FTN Cocoa 

Processors PLC. 

“We are yet to access the EEG that 

was designed to cushion structural 

misalignment in our economy since 

2013. Since last year we have been 

given approval by NEXIM and our 

banks but we are yet to get it,” said 

Laoye. 

According to Olusuyi who was 

earlier quoted, the government has 

failed to provide a clear cut policy 

direction as to what it intends to 

do in terms of industrialising the 

economy through processing of agro 

commodities. 

“This why our agriculture has 

remained at the rudimentary stage 

because the active players that take 

the commodity from the farmers do 

not add any value by processing it,” 

he added. 

He noted that Nigeria cannot 

develop without developing agriculture 

to include processing. “The direction to 

economic growth is industrialisation 

and not the exporting of raw agric 

commodities,” he further stated. 

Similarly, another challenge facing 

the sector is the crisis rocking the 65,000 

capacity Multritrex Integrated, the 

country’s largest cocoa processor, which 

has cut industry production by over 26 

percent, according to calculations. 

Multritrex was shut down by the 

Asset Management Corporation of 

Nigeria (AMNCON) over N5 billion 

debt. 

The company officials told 

BusinessDay that though firm had 

been handed over to a new receivership, 

production was at the peripheral level. 

“Since AMCON took over Multitrex 

Foods, nothing meaningful has been 

achieved. The best option is to work 

out a plan so that the business can 

continue,” Olusuyi said. 

On the global scale, cocoa grinding 

has been on the increase. “The 

grindings picture worldwide for the 

first quarter of the current cocoa season 

reflected a considerable increase, 

with Asian grindings data showing a 

19.2 percent year-on-year increase to 

177,450 tonnes,” data from ICCO latest 

cocoa monthly report show. 

Abx World launches solar powered farmers’ mart 

…to address postharvest loss 

Abx World Nigeria Limited, 

a working partner of the 

Global Good Agricultural 

Practice (GAP), has 

launched a solar powered farmers’ 

mart equipped with freezers 

and refrigerator with embedded 

interactive mobile application 

using the Internet of Things (IoT) 

solutions. 

The farmers’ mart will 

revolutionalise the country’s 

agricultural supply chain and 

address the issue of postharvest 

losses in fresh fruits and vegetables. 

The solar powered mart which 

is called the Abxworld Farmers 

Market can be strategically 

deployed in streets across the 

country. 

John Okakpu, managing 

director and chief executive 

officer, ABX World, disclosed 

this to journalist during the 

Food West Africa event held in 

Lagos recently. He stated that the 

project which will soon enter large 

scale implementations is a good 

initiative to create a vibrant IoT 

ecosystem full of opportunities 

and benefits for farmers and end 

users. 

The project pioneers have 

provided insights into a manifold 

of dimensions that are relevant 

for medium-term market 

deployment, such as economic 

conditions, technical feasibility, 

farmer adoption, industrial 

value for key players, consumers 

and society expectations, and 

scalability of the solutions to 

meet immediate environmental 

sanitation. 

According to Okakpu, with 82 

million hectares of arable and over 

70 million estimated farmers in 

the country, Nigeria has no reason 

for the high rate of unemployment. 

“The Food and Agricultural 

Organisation (FAO) report that 

one third (1/3) of the global 

agricultural produce which 

roughly stands at an estimated 

1.3 billion tons of food is wasted 

annually and mainly because such 

foods are simply not available at 

the locations where they are badly 

needed. We want to ensure this 

is eliminated in Nigeria through 

abxworld’s famers’ market,” he 

said. 

“Through the app integrated 

to the freezer and refrigerator it 

will enable easy for monitoring. 

There are a number of innovations 

and opportunities this project will 

create, particularly in creating 

employment. Nigeria has no 

reason being poor,” Okakpu added. 

The managing director assured 

that states will also benefit from 

the scheme as they are targeting 

50-100 tons per state daily when 

fully implemented. 

“We will also keep the state 

clean through the program under 

Global GAP,” he said, adding that 

the farmers’ market can easily be 

mounted and dismounted at any 

location while the farm products 

are hygienically packaged for the 

consumer. 

Okakpu further charged 

Government at different levels to 

speed up processes for training of 

local farmers in line with modern 

trends while assisting them to 

export their products. 

This, he said, is a sure way to 

grow the economy especially the 

foreign exchange market.



AGRIC 

BUSINESS 

Expert lists strategies to resolve 

herdsmen/farmers conflicts 

RAZAQ AYINLA, ABEOKUTA 

Olufemi Onifade, 

professor of forage 

agronomy and 

utilisation at the 

Federal University of 

Agriculture, Abeokuta (FUNAAB) 

has said that a national herd 

count and upgrade of gazetted 

112 grazing reserves located in 17 

states of Nigeria will be panacea 

to the frequent conflicts between 

herdsmen and farmers in the 

country. 

Onifade, who attributed 

incessant conflicts between 

herdsmen and farmers to 

government’s neglect of ranches 

and grazing reserves, failure to 

conduct herd count, inadequate 

departments of pasture and 

range management in tertiary 

institutions, among others, urging 

government to work in partnership 

with private sector to provide 

urgent solutions for the challenges 

identified. 

Delivering the 53rd FUNAAB 

Inaugural Lecture tagged, “Grasses: 

Production and Management for 

Sustainable Livestock Industry” 

at the institution main Auditorium 

in Abeokuta recently, Onifade said 

that Nigeria is better blessed in 

Aller Aqua trains fish farmers on 

proper feed management strategy 

JOSEPHINE OKOJIE 

Nigeria’s target of 

achieving selfsufficiency 

in fish 

production has 

received a boost as Aller Aqua 

Limited has trained over 1000 

catfish and tilapia farmers on 

proper feed management to 

boost local production and 

reduce the country’s annual 

import bill of N238 billion. 

“The training is focused 

on increasing efficiency and 

production of fish farmers 

using efficient fish conversion,” 

said Dada Folusho, regional 

sales manager, Aller Aqua 

Nigeria Limited during one 

of the training programme at 

Agege in Lagos recently. 

“With this, a catfish 

farmer with 1,200 pieces of 

fish can make 24.7 percent 

profit margins, having three 

production cycles of four 

months each and a tilapia 

farmer with same pieces of fish 

will have 37.5 percent profits,” 

Folusho said. 

Nigeria’s total annual fish 

terms of lush vegetation and land 

mass than having issues as regards 

conflict between herdsmen and 

framers, but for government’s 

failure to put things in order. 

The Professor noted that 

although harsh climatic condition 

and varied rainy days from less 

than 90 days in the north to 365 

days in the swampy southern 

areas have prompted southwards 

drift and subsequent destructive 

actions of herdsmen and 

pastoralists on crops which usually 

lead to conflicts. 

“As the growing season comes 

to an end in the semi-arid zone, 

southward movement of livestock 

in search of green pasture begins. 

The 112 grazing reserves gazetted 

by some state governments out 

of 415 earmarked to cater for the 

settling of pastoralists and for 

livestock production have been 

encroached upon and degraded. 

“These reserves were 

established based on the 

Grazing Reserve Law of 1965. 

The vegetation in the reserves 

has further deteriorated with the 

presence of unpalatable plants, 

bare ground and less tree canopy. 

In addition, facilities such as 

water dams, clinics, schools in 

most of the reserves are no longer 

functional. 

demand is put at 2.7 million 

metric tons (MT), while the 

country produces only 800,000 

MT, leaving a gap of 1.9 million 

MT annually, according to data 

obtained from the country’s 

agricultural road map. 

This yawning gap is filled 

with fish imports estimated at 

about N238 billion (US$625m), 

which erodes Nigeria’s 

chances of diversification in 

the face of FX scarcity. 

Also, speaking to 

journalists during the 

training, Tiamiyu Nurudeen, 

managing director, Amolese 

Aquaculture Nigeria Limited 

said “the essence of this 

training is that we want 

farmers to understand 

better the mechanism of 

aquaculture; the feeding 

regime and rate, timing 

because fish farming is 

science and that is the 

mistake a lot of farmers are 

making thinking it is just a 

backyard farming.” 

“An average fish farmer 

should keep abreast with 

knowledge and that is what 

L-R: Kashim Shettima, Governor of Borno State; Kenton Dasiell, deputy director general, Partnerships for Delivery at IITA and 

Olusegun Obasanjo, IITA ambassador and former president of Nigeria, during the donation of 35,930 kilograms of seeds and 2640 

kilograms of rice to Borno State government recently in Maiduguri. 

“Concerted efforts by state 

governments on the renovation of 

this resource base to ‘carry’ more 

livestock will, to a greater extent, 

reduce unwarranted movement, 

number of animals seeking greener 

pastures led by pastoralists, an 

action which usually results in 

conflicts. The renovation of grazing 

reserves will necessitate reduction 

Aller Aqua is doing today. 

Farmers need to get more 

abreast of new technologies 

and new ideas to be more 

profitable,” Nurudeen said. 

Farmers blamed the failure 

of the country to tremendously 

increase its fish production in 

recent years on the high cost 

of quality fish feeds as a result 

of FX volatility which has 

constrained the importation 

of feeds, while also hurting 

the fish farming business. 

“The major challenge in 

a culture today is that the 

industry is highly dependent 

on import for its fish feed, 

which consists test 75 percent 

of total cost,” said Nurudeen 

who is also the national vice 

president Tilapia Aquaculture 

Developers Association of 

Nigeria (TADAN). 

“Now the prices are high 

and the margins are smaller 

because we spend more on fish 

feeds and this is why smuggling 

will not stop because it is 

cheaper,” he added. 

The training took place in 

Ikorodu, Agege and Ibadan. 

in number of animals or sales of 

bulls for fattening. 

“The need to take another 

count of the National herd is 

urgent to enable proper planning 

of resources for the development 

of the livestock industry. Lastly, to 

effectively monitor the status and 

development of fodder resources 

in the reserves and across 

Kogi seeks World Bank assistance 

to boost rice production 

VICTORIA NNAKIAIKE, LOKOJA 

The Kogi State government 

is seeking the assistance 

of the World Bank through 

its FADAMA 111 AF project 

to boost its rice production and 

become the largest rice producer 

in the north-central region of the 

country. 

This was disclosed by Kehinde 

Oloruntoba, commissioner of 

agriculture in the state during a 

visit by a team from the FADAMA 

111 project in Kogi recently. 

According to Oloruntoba the 

intervention would enable the 

state to attain its desired target of 

becoming the largest producer of 

rice in the North Central region and 

help address youth unemployment 

in the state. 

“We have just completed 

arrangement with a private 

investor who will be siting a rice 

mill of 50 tons per day at Omi in 

Yagba West Local Government of 

the state,” he said. 

“The Federal Government has 

also promised us another 50 tons 

rice mill in Ibaji and so, we must 

upscale our rice cultivation to 

produce paddy rice to feed these 

mills,” he added. 

the country, and Institute for 

Grassland and Pasture Research 

should be established”, he said. 

While urging Nigeria 

government to upgrade gazetted 

112 grazing reserves in 17 states, 

totalling 956,738 hectares and 

possibly, establish more reserves, 

he urged the National Universities 

Commission to facilitate creation 

Adetunji Oredipe, task team 

leader, FADAMA III AF in the state, 

said the mid-term review mission 

team was in the state to re-assess 

the intervention programme by 

finding answers to some salient 

questions on its activities. 

“Kogi signed a subsidiary 

agreement to access $20 million 

but had so far only drawn $3 

million for its intervention 

projects,” Oredipe said. 

He explained that there is still 

a window of opportunity to access 

the fund with the extension of the 

programme by eight months for 

the benefit of the devastated North 

East states. 

The team leader solicited the 

support of the government for the 

success of the FADAMA projects 

in the state by waiving the new 

order for all MDAs to operate 

on the Single Treasury Account 

(TSA) saying that the practice 

would impede progress of the 

programme. 

Oredipe said the four-day midterm 

review would enable the 

team address issues of assumption 

of the success or otherwise of 

the programme in the state and 

identify specific areas that required 

modification or outright overhaul.


BUSINESS DAY 

21 

InsuranceToday 

E-mail: insurancetoday@businessdayonline.com 

C002D5556 

L-R: Adewale Kadri, head, Non-Life Business; Babatunde Fajemirokun , executive director; 

Edwin Igbiti, managing director/CEO and Ayodele Bamidele, chief financial officer all of 

AIICO Insurance Plc at the Company’s Pre AGM Press briefing in Lagos. 

L-R: Bode Akinboye, group managing director, Standard Alliance Insurance Plc; Alex Brown, 

Duncan Thomson; Ahmed Salawudeen; Nick Brown; Zainab Bakare and Biodun Jegede at a 

meeting with SA Insurance foreign reinsurance consultants in Lagos 

‘African insurance to remain 

on growth trajectory despite 

economic headwinds’ 

Modestus Anaesoronye 

The potential for growth of 

insurance in the African 

continent remains huge on 

back of young, growing and 

more affluent population as well as 

investments in infrastructure and 

exploitation of the continent’s raw 

materials, experts have said. 

According to the 2nd Africa Insurance 

Barometer, launched Monday 

at the 44th AIO Conference & General 

Assembly in Kampala, Uganda, 

Africa’s insurers remain upbeat 

about the prospects of their markets. 

The 29 senior executives from 

regional and international insurers, 

reinsurers and brokers polled for 

this year’s survey contend that the 

young, growing and more affluent 

population as well as investments in 

infrastructure and exploitation of the 

continent’s raw materials will drive 

demand for insurance protection. 

However, the executives posit that 

inadequately harmonised regulatory 

frameworks across the continent, 

which frequently are poorly 

enforced, as well as the persistent 

lack in skills and local talents remain 

the industry’s soft spots. Furthermore 

– unless the regulators take 

action – many African insurers are 

insufficiently capitalized and lack 

financial stability, which could 

dampen consumer confidence. 

“The Africa Insurance Barometer 

provides a comprehensive overview 

of the current state and future 

prospects of the $ 64 billion African 

insurance market,” says Prisca 

Soares, the secretary general of the 

African Insurance Organisation. 

“The executives interviewed for this 

year’s edition expect the underlying 

market fundamentals to prevail over 

the economic decline that many 

markets witnessed in 2016. A majority 

of our interviewees assume that 

premiums will outgrow GDP. Africa’s 

insurance penetration, which currently 

stands at 2.9 percent or less 

than half of the global average, will 

translate into accelerated premium 

growth – provided global demand 

and commodity prices continue to 

bounce back in 2017 and 2018.” 

Due to new technology, in particular 

mobile telephones and the 

internet, a broader array of products 

and distribution channels is available 

to access the continent’s corporate 

and partly untapped consumer 

base, including its growing middle 

class. However, adequate regulation 

is needed to control and facilitate 

the market’s expansion. Some requirements 

tightened in the past 

year. But interviewees are also concerned 

about overregulation with 

a tendency to burdening insurers 

with additional cost, complexity and 

incoherent regulatory enactment. 

Pressure on insurance rates is 

most pronounced among Africa’s 

commoditized commercial lines of 

business, where barriers to entry are 

low and customers are insurancesavvy, 

opportunistic and fight for 

the best price. Obviously, noncommoditized 

lines, which require 

a high specialization, are able to 

escape from some of the pricing 

pressure. As a result, interviewees 

predict that rates will remain subdued 

over the next twelve months. 

Profitability still benefits from the 

adequate original pricing of the risks, 

but declining rates, inflation and 

claims costs reduce margins. 

In personal lines rates are more 

favourable. While access to the 

market is more complex and policyholders 

act less opportunistically, 

insurers try to control more of the 

value chain themselves. Profitability 

also fares better than in commercial 

lines, although claims inflation and 

a depressed economy negatively affect 

the bottom line. Going forward 

almost 80 percent of interviewees 

predict stable or even rising profits, 

as personal lines are viewed as less 

volatile and exposed to cutthroat 

competition. 

According to 70 percent of executives, 

access to local skills and talent 

is a challenge for African insurers. 

While expertise is generally hard to 

come by in small markets, specialists, 

such as actuaries, are scarce 

even in the more populous markets. 

As know-how is missing to develop 

and introduce new products, capital 

is invested in mainstream solutions, 

further aggravating the fierce 

competition in those segments. 

Interviewees expect a further concentration 

of Africa’s insurance 

industry, driven by heightened competition, 

regulatory pressure and the 

economic downturn. While regional 

or international insurers increase 

their footprint through acquisitions, 

smaller insurers might choose to exit 

the market. As regulators force them 

to strengthen their capital base, they 

struggle to survive in an environment 

of anaemic top line growth, 

high claims, currency devaluation 

and inflationary pressure. 

PFA list steps to include informal 

sector into pension scheme 

Stanbic IBTC Pension Managers 

Limited has outlined 

four vital measures 

needed to bring the country’s 

huge informal sector into 

the formal pension system. These 

are awareness and collaboration 

with key associations and unions; 

tax incentives and guarantee; 

seamless registration and service 

delivery. 

Eric Fajemisin, chief executive, 

Stanbic IBTC Pension Managers 

Limited, said these steps 

would attract a sizeable chunk 

of the estimated 38 million 

workers in the informal sector 

and significantly boost the 

reported eight million people 

currently registered under the 

Contributory Pension System 

(CPS). Accounting for about 60 

percent of Nigeria’s Gross Domestic 

Product and employing 

over 90 percent of its workforce, 

the informal sector is largely insignificant 

in the CPS. 

Fajemisin made the remark in 

Port Harcourt, Rivers State, at an 

employers’ forum organized by the 

PFA to encourage participation in 

the pension scheme. 

Fajemisin, who was represented 

by Oladele Sotubo, executive 

director, Investments said it is imperative 

to raise the level of awareness 

through major informal sector 

associations and unions due 

to the prominent role they play in 

the sector. In addition, endorsements 

from these unions will help 

to motivate members and build 

the requisite trust in the pension 

scheme. 

The on-boarding process for 

the informal sector customers’ 

needs to be flexible and devoid of 

any form of complexity, Fajemisin 

said, adding that this objective can 

be achieved through the adoption 

of a unique identifier like BVN and 

the use of mobile technology for 

registration, collection and benefit 

payment. 

‘Kwara not owing pensions, salaries’ 

Kwara State is fully up to 

date with payment of 

pension and salaries to its 

pensioners and workers 

despite the economic situation in 

the country. 

Muyideen Akorede, senior special 

Assistant on Media and Communication 

to Kwara State Governor, 

who made this known in an 

interview with journalists, said the 

governor was able to achieve this 

through intense reform of Internally 

Generated Revenue (IGR) of the 

state and cutting down the cost of 

governance by 40 per cent. 

He stressed that contrary to reports 

in a newspaper that the state 

is owing 11 months salaries and 

pensions, the State does not have 

any pension or salary arrears. 

He disclosed that the only arrears 

are with workers and pensioners 

at the local government 

level which have a separate allocation 

from the federal government. 

He said the local governments 

are also not owing 11 months as 

speculated but only have various 

degrees of arrears of one and half 

month, 3 months or 6 months depending 

on the IGR capacity and 

the allocation. 

Akorede further explained that 

the local government is a different 

tier of government and, with special 

regards to the case of Kwara 

state, is autonomous. 

“The state government is not 

owing pensions or salaries except 

for local governments which are a 

different tier of government and, 

with special regards to the case of 

Kwara state, are autonomous. Their 

funds by law come through the 

state and are allocated publicly by 

a body comprising the chairmen of 

the local governments, their treasurers 

and the state commissioner 

for finance as well as labor leaders.



C002D5556 

InsuranceToday 


Wapic Smart Wealth 

Plan targets to raise 

financially smart citizens 

L-R: Segun Balogun, managing director/CEO, LASACO Assurance Plc; Babatunde Rotinwa, chairman, Local Government 

Service Commission and Musliu Folami, commissioner, Ministry of Local Government & Community Affairs at the presentation 

of death benefit cheques from LASACO Assurance Plc to beneficiaries of deceased employees of Lagos State. 

As part of its vision 

to ensure that financially 

smart 

citizens are raised 

in the society, Wapic Insurance 

has introduced yet 

another ground breaking 

insurance product under 

the umbrella of SMART Plan 

known as the Wapic Smart 

Wealth Plan. 

Speaking at the launch of 

the product, Oroma Ovunda-Nsirim 

of the corporate 

communications unit, 

Wapic Insurance noted that 

this is an insurance solution 

that provides one, the opportunity 

of investment and 

embedded insurance protection 

against the risks of 

demise. The insurance premium 

is deducted within 

the period of investment but 

insurance cover is for life 

even when you have taken 

the maturity proceeds. 

Wapic Smart Wealth Plan 

provides you, in addition, 

the benefit of an insurance 

cover for life even when premium 

is deducted from your 

contribution only within the 

investment period. 

She further noted that 

more benefits of the products 

as: Enjoy life cover beyond 

duration of the policy, 

Return on Investment: Flexible 

but high (linked to FGN 

Bonds), Critical Illness Benefit: 

Up to 70 percent of sum 

assured; balance payable 

in the event of demise, Life 

Cover: Payable in the event 

of demise, Succour in the 

event of demise, Premiums 

are tax deductible 

When asked about the 

premiums, the company 

noted that the premium to 

be deducted depends on 

the sum assured chosen and 

the end date of the policy. 

For a sum assured of N5 

million on a policy ending at 

age 50 years, the premium 

could be as cheap as N8,000 

per month (320/day), for a 

person aged 35 years. 

Jocelyn Ogbuokiri, president, Professional Insurance Ladies Association flanked on the left by Tonia Smart; on the right, Femi 

Ogun with students at the PILA Career Talk for Secondary Schools Student held at the Nigerian Institute of Advanced Legal 

Studies, University of Lagos. 

Insurance makes meaning, as LASACO Assurance 

pays death benefits to Lagos workers 

Stories Modestus Anaesoronye 

Insurance does not 

make much meaning 

until an incident occurs 

and people are paid 

benefits or compensation, 

which enables the victim 

or dependants of victims to 

return to the position they 

were before the incident or a 

kind of succour at that critical 

time when all hope seems to 

have been lost. 

This confirmation about 

the importance and benefits 

of insurance came to the fore 

recently, when dependants of 

bereaved staff of the Ministry 

of Local Government and 

Community Affairs and The 

State Universal Basic Education 

Board (SUBED) received 

death benefit cheques from 

LASACO Assurance Plc, on 

the life insurance policy undertaken 

by the Lagos State 

Government on behalf of its 

workers. 

The Pension Reform Act 

stipulates that every employer, 

to which the Act applies, 

must maintain Life Insurance 

Policy in favour of the 

employee for a minimum of 

three times the annual total 

emolument of the employee. 

Under the policy, total annual 

emolument is defined as the 

basic salary, transport and 

housing allowances and shall 

not include bonuses, overtime, 

directors’ fees or other 

fluctuating emoluments. 

Section 8(1) of the Pension 

Reform Act 2014 stipulates 

that “Where an employee 

dies, his entitlement under 

the insurance policy maintained 

under subsection (5) 

of section 4 of this Bill shall 

be paid by an underwriter to 

the named beneficiary in line 

with section57 of the Insurance 

Act 2003. 

Segun Balogun, managing 

director/CEO, LASACO Assurance 

Plc speaking at the 

cheque presentation held 

at Lagos State Secretariat, 

Alausa commended the State 

Government for complying 

with the Pension Reform Act 

2004 which mandates employers 

to provide life insurance 

for their employees. He 

said Lagos is among the few 

State governments that have 

complied fully with provisions 

of this law, stating that 

this shows commitment to 

welfare the state employees. 

While thanking Governor 

Akinwunmi Ambode for 

regularly paying the insurance 

premiums despite the 

economic situation, urged 

beneficiaries and dependants 

of the deceased workers 

to make judicious use of the 

money so that the dead can 

be happy wherever they are. 

Musliu Folami, commissioner, 

Ministry of Local 

Government & Community 

Affairs who represented the 

governor Ambode reaffirmed 

the commitment of the state 

government in ensuring that 

its employees welfare are 

raised to reasonable standard. 

Folami assured LASACO 

Assurance that the governor 

will continue to pay the 

premium, pointing out that 

insurance by this arrangement 

has made meaning to 

the life of the people and will 

be sustained. 

The insurance scheme, 

which started in 2009 paid 

total of 174 beneficiaries in 

2013 and 2016. And for this 

year(2017) being the third in 

the series, 85 beneficiaries got 

cheques consisting of 50 local 

government and 35 SUBEB 

deceased staff. 

According to the guidelines 

for life insurance policy 

for employees jointly issued 

by the National Insurance 

Commission (NAICOM) 

and National Pension Commission 

(PenCom), the employer 

is required to fully 

bear all costs in relation to 

procurement of this policy, 

and this shall be in addition 

to the contributions to be 

made by the employer to 

each employee’s Retirement 

Savings Account. 

The policy provides cover 

to the insured against death 

and the insurance cover is 

mandatory for all employees 

as long as they are in employment. 

This means that 

the policy provides for the 

payment of the sum assured 

in the event of the death of a 

member of the scheme from 

any cause, natural and accidental. 

PILA strengthens insurance 

awareness efforts across 

secondary schools 

Committed to creating 

awareness 

and ensuring 

that young generation 

of Nigerians across 

secondary schools appreciate, 

understand and 

take insurance as a career, 

the Professional Insurance 

Ladies Association (PILA) 

has held its 2017 edition of 

‘PILA Career Talk for Secondary 

Schools’. 

Jocelyn Ogbuokiri, 

president, PILA who spoke 

at the 2017 Career Talk 

for secondary school students 

organized by PILA 

at the Nigerian Institute of 

Advanced Legal Studies, 

University of Lagos Said,: 

“Deepening insurance 

awareness, appreciation 

and understanding among 

the young generation is one 

of the cardinal objectives of 

the Professional Insurance 

Ladies Association. The Career 

Talk is one of the ways 

we aim at achieving this 

purpose.” 

Ogbuokiri noted that 

besides providing avenue 

for better appreciation of 

the workings of insurance 

as a life tool, the Career 

Talk also provides a very 

good boost for the upcoming 

generation to decide 

for insurance as a Career 

having had the opportunity 

of interacting first hand 

with very successful professionals. 

“As an icing on the cake, 

we have designed a Mentoring 

Program this year, 

that will get interested students 

attached to Mentors 

that will guide them successfully 

through their career 

path as they decide for 

insurance.” 

She said this year’s 

theme “ Empowering the 

Next Generation of Insurance 

Practitioners” has 

been carefully thought out 

to reflect our passion to adequately 

equip the young 

generation with the requisite 

knowledge and counseling 

that will enable them 

effectively take charge of 

the insurance industry in 

Nigeria in their time.


In Association with 

BUSINESS DAY 

23 

PensionToday 


C002D5556 

As multi-fund structure sets to change 

pension industry investment dynamics 

…carters for individual investment preferences 

...variable income instruments get boosts 

The multi-fund structure 

in the newly 

amended investment 

guideline recently released 

by the National 

Pension Commission (PenCom) 

when implemented would change 

the pension industry investment 

dynamics. 

Pension Fund Administrators 

(PFAs), the mangers of the burgeoning 

country’s pension funds 

are positive that new scheme 

would carter for individual investment 

preferences. 

Besides that, it will give younger 

contributors who still have long 

period to retire, theopportunity 

ofearning higher returns on investmentin 

the variable income 

instruments. 

PenCom recently released the 

amended investment guidelines 

introducing multi-fund structure 

comprising Fund I, Fund II, Fund 

III and Fund IV (Retiree Fund). 

Funds I, II, III and IV shall however 

differ among themselves according 

to their overall exposure to 

variable income instruments. 

According to the guideline, 

the exposure to variable income 

instruments is defined as the sum 

of a PFA’s investments in ordinary 

shares and participation units 

of open close-ended and hybrid 

funds; real estate investment 

trust; infrastructure funds; and 

private equity funds comprising 

its current holdings and any future 

financial commitments to the acquisition 

of participation units in 

these funds. 

Eguarekhide Longe, managing 

director/CEO, AIICO Pensions 

Limitedsaid the multi-fund structure 

means that individual investment 

preferences will be catered 

for just like in the regular asset 

management industry. 

Longe, who is also the chairman 

of Pension Fund Operators Association 

of Nigeria (PenOp) said 

for younger contributors capable 

of absorbing more risk, they will 

have the option of selecting the 

funds with larger variable income 

exposure, while those who would 

rather be more conservative, due 

to age, will select the more predictable 

fixed income funds. “One size 

will not be compelled to fit all as 

currently obtains.” 

According to him, enhancement 

of returns is not the focus of 

the new fund structure but rather, 

it is for risk predisposition. 

Longe further emphasized that 

experience over the years show 

that variable income investments 

(e.g. equities) tend to outperform 

other asset classes, so “it is expected 

that for those with a longer 

term investment horizon, they will 

ride the fluctuations over the years 

and earn superior return over the 

life of the investments that will be 

made for them in the portfolios 

that are exposed to higher risks.” 

Glory Etaduovie, managing 

director/CEO, IEI-Anchor Pension 

Managers Ltd said that the 

multi-fund structure is designed 

for proper definition of available 

funds for types of investments, 

long term and short term to suit 

various developmental needs and 

stimuli for sustainable growth. 

“Pension funds are a delicate 

fund which needs to be managed 

delicately. It is not free money as 

many seem to allude to in recent 

developments. It is the people’s 

future and it will be immoral to 

deal treacherously with the funds 

because the future generations 

will judge us.” 

He noted that the funds are 

graded to determine use to which 

it may be used safely. 

“Portions of funds for those 

nearing retirement cannot be 

used for long term investments. 

Younger contributors will not 

need their contributions in the 

very near future, so it can be stud- 

ied for sustainable development”. 

You will observe I keep mentioning’ 

sustainable development,’ 

it refers to a well rounded out 

investment/development plans 

where no sector suffers the aftermath 

of lope-sided investment 

decisions. It is good for the government; 

it is good for the public and 

the citizenry.” 

According to him, contributors 

will make double gain - the 

funds will be structured in a way 

that nothing that accrues to them 

will be taken away. It will also be 

wasteful to let the funds lie idle, 

not being productive economically. 

Contributors are part of the 

society and so they will also benefit 

from meaningful infrastructural 

developments.” 

Etaduovie further contended 

that everything about the new 

fund structure is exciting, as it excites 

increased study and financial 

intelligence being developed in 

the country now. 

“It is also going to attract bigger 

business ideas needing long 

term funds. Everyone stands to 

gain - the pension industry will be 

seen as a worthy growth and development 

partner, the citizenry, 

economy and the government will 

all gain, Etaduovie stated. 

In line with 7.3(a) of the guideline, 

the maximum exposure to 

variable income instruments by 

the Fund types are as follows: 

Fund I: 75 percent of portfolio 

value; Fund II: 55 percent of portfolio 

value; Fund III: 20 percent 

of portfolio value and Fund IV: 10 

percent of portfolio value. 

PFAs are also expected to invest 

in such a way that the actual exposure 

to variable income instruments 

in Fund I is higher than the 

exposure in Fund II. Likewise, the 

exposure in Fund II shall be higher 

than the exposure in Fund III. Accordingly, 

the minimum exposure 

to variable income instruments 

by Fund Type shall be: Fund I: 

20 percent; Fund II: 10 percent; 

Fund III: 5 percent and Fund IV: 

0 percent. 

Effective from the date of implementation 

of the multi-fund 

structure, the PFAs shall allocate 

contributors to various fund types 

according to the following criteria: 

membership of Fund I shall strictly 

be by formal request by a contributor; 

active contributors who 

are 49 years and below as at their 

last birthdays shall be assigned to 

Fund II; active contributors who 

are 50 years and above as at their 

last birthdays shall be assigned to 

Fund III and Fund IV shall strictly 

be for RSA retirees only. 

RC634453 

Diamond Pension Fund Custodian Limited 

1A, Tiamiyu Savage Street, Victoria Island, Lagos State. 

Tel: 01-4613753, 2713680, 2713954 

Fax: 01-2713955 

Email: info@diamondpfc.com 

Website: www.diamondpfc.com 

This section is 

created to increase 

awarness and deepen 

knowledge about 

the contributory 

pension scheme. 

If you have enquiries 

or contributions, 

send to this e-mail: 

diamondpfcbusday@yahoo.com

24 

BUSINESS DAY 

C002D5556 


Financial Inclusion 

& Innovation Weekly 

Supported 

ANALYSIS 

Targeted solutions needed to break 

financial inclusion gender gap 

PATRICK ATUANYA 

A 

recent World Bank report 

presents evidence 

that policy measures to 

increase financial inclusion 

need to be countryspecific, 

based on each country’s 

gender gap and specific challenges 

and opportunities. 

To eliminate the persistent gender 

gap and expand access to financial 

services for both women and men, 

policies should be adapted and integrated 

in national financial inclusion 

strategies and other policy initiatives. 

Alliance for Financial Inclusion 

(AFI) and Women’s World Banking 

developed a study to examine the 

experience of Nigeria, where there 

are currently many approaches to 

gender-focused financial inclusion 

policies. 

Nigeria is the largest country in 

Africa, with a population of 177.5 

million, which is almost double the 

population of the second most populous, 

Ethiopia. 

With a per capita GDP of $3,203 

(significantly higher than Ghana 

and Kenya), Nigeria is classified as a 

lower-middle income country, however 

much lower oil prices continue 

to pose challenges for public finance 

at all levels of government. 

A 2013 household survey revealed 

the per capita national poverty rate 

(based on the official poverty line) 

was 33.1 percent, but a large share 

of Nigeria’s population live not far 

above the poverty line. 

According to Global Findex data, 

Nigeria has made some progress in 

increasing the percentage of women 

who have access to an account in a 

financial institution. 

However, the gender gap has 

increased significantly in the last 

three years, from 7.3 percent to 20.7 

percent (see table). 

NEWS 

BALA AUGIE 

Businesses and banks in 

Africa’s most populous 

nation will save money 

to a tune of N2.60 trillion ($8.53 

billion) from digital financial 

service through reduced theft, 

error and improved cash management, 

according to McKinsey 

Global Institute (MGI). 

This figure is equivalent to 1.30 

percent of the country’s gross 

domestic product of N150.02 trillion 

($495 billion), based on the 

exchange rate of N305/$. 

The September 2016 report 

by the global institute says financial 

institution will save 

through reduced account costs, 

cash in, cash out CICO costs, 

transaction costs, loan issuance 

costs, and opportunity costs of 

currency. 

Savings in each category 

With banks perceived as less accessible 

to women, the expansion of 

mobile financial services is seen as a 

particularly valuable opportunity to 

foster financial inclusion for women. 

Although Nigeria has challenges— 

a vast population, geopolitical divisions 

and social norms that constrict 

women’s activities—it has seen 

meaningful policy change under the 

2012 National Financial Inclusion 

Strategy (“the Strategy”). 

Digital financial services can save Nigeria N2.60 trillion 

showed the country will save 

N260.77 billion ($791 million) in 

reduced shrinkage, N91.50 billion 

($300 million) in improved 

cash management, N238.81 billion 

($783 million) in accounts 

cost reductions, N2.01 trillion 

($6.81 billion) in CICO costs 

reduction. 

The role of digitalization in 

saving costs for financial institutions 

and companies cannot 

be overemphasized as lenders 

have lost huge sums of money 

to fraud. 

This ranges from bank robberies 

across the length and breadth 

of the country. 

According to a 2015 report by 

the National Deposit Insurance 

Corporation (NDIC), banks lost 

N18 billion to fraud. The corporation 

said there is an increase in 

the cases of ATM fraud. 

An explicit focus on women was 

undertaken recently with a Special 

Interventions Working Group of the 

Technical Committee implementing 

the National Financial Inclusion 

Strategy. 

With numerous changes underway, 

the coming years are expected 

to be one of significant policy change, 

particularly in terms of the regulation 

of mobile financial services. 

The World Bank report notes that it 

From year 200 to 2014 alone, 

Nigerian banks have lost a total 

of N199 billion to e-fraud between, 

mostly due to inappropriate 

and reckless management of 

customers’ data. 

Nigeria and emerging markets 

use cash for transaction 

will be important to focus on mobile 

financial services and outreach to 

rural women (mutually reinforcing 

objectives) if more progress is to be 

made in expanding financial services 

to Nigerian women. 

However in Nigeria’s fragmented 

market, the use of digital financial 

services has not yet become popular. 

While there are now 21 fully licensed 

mobile money operators 

(MMOs) able to offer mobile financial 

compared with countries in the 

Europe, Asia and the United 

States of America (USA). 

According to the Central Bank 

of Nigeria (CBN), digital financial 

services are estimated to 

reduce the cost of providing 

financial services by 80 to 90 

services, mobile money usage is still 

extremely low (0.3% when the Strategy 

was being prepared and only 0.8% by 

2014),and is primarily limited to bank 

account users who use mobile money 

as an additional product. 

Development financial institutions 

such as the Bank of 

Agriculture provides opportunities 

to reach out to women, and the MSME 

Development Fund, an initiative of 

the Central Bank of Nigeria (CBN), 

also has programs aimed at women. 

The informal sector is an important 

part of Nigeria’s financial inclusion 

landscape. According to the National 

Financial Inclusion Strategy, 17.4 

percent of Nigerians (14.8 million 

people) only use informal financial 

services, such as esusu (rotating savings 

and credit groups), village savings 

groups and savings collectors, with 

slightly higher percentages of women 

using these services. 

The report notes that as they currently 

stand, none of the financial 

institution models in Nigeria are a 

driving force of financial inclusion 

for women. 

One explanation for the persistent 

gender gap is that progress in financial 

inclusion to date has been with groups 

who have been traditionally easier to 

reach—primarily urban men. 

Efforts to expand financial inclusion 

now face, in the words of one 

interviewee, “stubborn demographics,” 

with overall trends moving in 

the right direction, but there is now 

a need to focus on more difficult to 

reach groups, especially women in 

rural areas. 

In addition to the geographical 

distinction, women represent a large 

percentage of the young, have less 

education and lower incomes. 

The report concludes that this 

calls for different tactics to close the 

gender gap. 

percent compared to the cost of 

a traditional bank branch. 

Digital financial service can 

also help break the barriers to 

financial inclusion and promote 

economic growth through the 

creation of millions of jobs. 

“Digital financial services can 

also bring about substantial 

benefits for financial services 

providers, and the economy as 

a whole, beyond financial inclusion. 

It can boost a country’s 

GDP significantly and more sustainably,” 

said Godwin Emefiele, 

Nigeria’s central bank governor. 

“It can boost a country’s GDP 

significantly and more sustainably. 

For instance, the same 

McKinsey study postulates that 

digital financial services can 

increase Nigeria’s GDP by 12 

percent or US$88 billion by the 

year 2025,” said Emefiele.

Fiat debuts in 

Nigeria 

weekend 

Page 26 Page 26 

General Motors to 

pull out of South 

Africa 

BUSINESS DAY 


C002D5556 

ExecutiveMotoring 

TNL receives new look Coaster bus 

…A combination of functionality, safety and comfort 

MIKE OCHONMA 

Toyota Nigeria Limited 

(TNL) has taken 

delivery of the 

revamped version 

of the Coaster commercial 

passenger bus. This 

was presented to the motoring 

journalists at the company’s 

headquarters in Lekki, Lagos 

recently. The new Coaster bus 

retains all the DNA and trapping 

of its predecessors with 

improved head and leg room, 

safety and comfort features. 

This is coming at a time 

when the global leader in automotive 

business is opening 

another chapter in its 

history after the launch of 

the completely redesigned 

Toyota Coaster at Toyota dealers 

(Osaka Toyopet dealers in 

the Osaka region) nationwide 

across Japan in 2016. 

It would be recalled that 

the Toyota Coaster was first 

launched as the “Light Bus” in 

1963, in response to increased 

demand for a minibus that 

could approximately seat 25 

passengers comfortably. 

Six years after, the vehicle 

underwent a partial redesign 

and was later renamed Coaster; 

a name which it has continued 

to use for over the past 50 years. 

It supports the movement 

of people around the world. 

At present, it is for sale in over 

110 countries and regions, and 

total sales have now exceeded 

550,000 vehicles. 

Since its world-wide introduction, 

Coaster has become 

a household name not only in 

Nigeria where Toyota Nigeria 

Limited is the principal manu- 

The Federal Road Safety 

Corps (FRSC) has revealed 

that its patrol 

team had apprehended and 

impounded a vehicle along 

Badagry Seme Border for 

seatbelt violation and driver 

licence violation, only to discover 

that the said vehicle was 

conveying a large quantity of 

Indian Hemp into Nigeria. 

Bisi Kazeem, Head, Media 

Relations and Strategy, FRSC, 

the team of Badagry Unit 

Command of FRSC on patrol 

facturers’ representatives, but 

it is also regularly seen in almost 

every market and continents 

across the globe. 

It is used in a variety of 

situations including the transportation 

of passengers and 

workers as staff buses, and 

other commuters from one 

location to another including 

going and coming back from 

restaurants, hotels, and tourists 

including beach goers and 

kindergartens among other 

utility functions. 

The current, third-generation 

Coaster was launched in 

1993. While this model has received 

praise for its outstanding 

reliability, there have been 

growing calls for a new design 

that incorporates the full safety 

features package. 

In addition, since revitalization 

of the tourism industry 

in Nigeria is expected 

operations along the route 

intercepted the vehicle with 

vehicle number, EPE 237 XC 

in the morning hours and had 

to lead to increased demand 

for minibuses, Toyota Motor 

Corporation (TMC) is aiming 

to develop a vehicle that will 

be cherished and ridden for 

many years to come. 

This complete redesign 

marks a significant evolution 

from the current model, and 

features a full range of safety 

functions, improved comfort, 

outstanding reliability, and a 

design appropriate for a new 

generation of minibuses. 

The Coaster is the first vehicle 

to undergo a complete 

redesign under the supervision 

of the (Commercial Vehicle) 

CV Company, which was 

established last year April to 

carry out the development of 

commercial vehicles from the 

planning to production stages. 

The CV Company is an inhouse 

company that oversees 

the development of vehicles 

already established the two offences 

before making the discovery 

with the collaborative 

effort of the Nigerian Customs 

that continue to support the 

lifestyles of people from various 

regions around the world. Company 

sources states that going 

forward, the company will continue 

to engage in the creation of 

ever-better commercial vehicles. 

Flaunting outstanding 

body rigidity and full range 

of safety equipment, the bus 

utilizes a ringed body frame 

which unifies the roof, sides, 

and floor frame sections. The 

use of high-tensile steel plates 

further contributes to a rigid 

body that complies with the 

ECE2 Regulation 663 (Rollover) 

global safety-performance 

standard. 

The vehicle also provides 

passenger safety and a peace 

of mind for our customers in 

the event of an emergency 

through the use of pre-tensioners, 

which instantly takes 

up seatbelt slack and secure 

who were equally on the same 

route with their patrol team. 

The vehicle is presently 

with the Comptroller Custom 

Seme for further investigations 

before it would be 

handed over to the appropriate 

drug law authority for contravening 

the law against drug 

peddling. 

Bisi Kazeem stated that it 

is in view of this great mark of 

achievement which is targeted 

at keeping the society sane as 

a security outfit that the FRSC 

passengers, as well as the use 

of force limiters, which reduces 

the force applied to passengers’ 

chest regions. 

The cabin space has been 

heightened by 60 mm, and the 

windows have been moved 

outwards by approximately 40 

mm, thus providing enough 

space for passengers to rest 

their elbows. In addition, the 

side windows have increased 

in height by 50 mm, which creates 

a comfortable and open 

passenger space. 

Apart from its quiet interior, 

a stable and comfortable 

ride, it has improved body 

rigidity due to the ringed 

body frame, adjustments to 

engine cover structures, enhanced 

body-seal structures. 

The optimal distribution of 

soundproofing materials all 

contribute to improved cabin 

quietness. 

FRSC discovers large Indian hemp in contravened vehicle 

Corps Marshal, Boboye Oyeyemi, 

continues to call for a 

stronger collaboration with 

sister agencies. 

Recall that not long ago, 

the Corps had intercepted a 

vehicle convening children 

(minors) through Kaduna 

with some suspected child 

traffickers who were consequently 

handed over to the 

relevant authorities. 

And in the same Kaduna, 

the FRSC rescue team had 

equally recovered five locally 

Mombasa-Nairobi 

rail SGR set for 

commissioning 

Page 27 

25 

Volvo to 

assemble 

trucks in 

Kenya 

Swedish truck maker, AB 

Volvo, is to start assembling 

vehicles in Kenya, 

the company said. Claes 

Nilsson, President of Volvo 

Trucks, said in a statement 

that the move was part of 

series of investments aimed 

at boosting the company’s 

presence in the region. 

Nilsson said Volvo would 

also open an office in Kenya 

to serve East Africa, open 20 

workshops around the region 

and a parts warehouse. 

He said it was partnering 

with local firm NECST in the 

plan which will create about 

300 direct jobs. 

“There is a significant potential 

for the premium truck 

business as regional economies 

grow, infrastructure 

investments expand and the 

business environment remains 

investment friendly,” 

Nilsson said. 

The East African nation 

undermined what was a 

thriving local assembly industry 

in the 1990s with policies 

that encouraged cheap 

second hand imports. It is 

now seeking to attract manufacturers 

back to help create 

jobs and support growth. 

Volvo is only the latest 

vehicle maker to announce 

plans in recent months to 

start assembling locally, following 

moves by Volkswagen, 

PSA Peugeot and CNH 

Industrial’s Iveco. 

made AK 47 rifles from a man 

whose vehicle was involved in 

a crash. 

Against this backdrop, 

Kazeem stated that the Corps 

Marshal is pleased to see that 

the officers and men of the 

Corps have so far been demonstrating 

the willingness to 

make the rules of engagement 

with sister agencies viable and 

more diligent in their duties 

combined with maintenance 

of security and safety as it relates 

to the motoring public.


C002D5556 


ExecutiveMotoring 

Fiat debuts in Nigeria weekend 

… Luxury brand with Italian heritage 

MIKE OCHONMA 

The Nigerian 

market will 

be witnessing 

a new introduction 

into 

the automobile segment 

with the planned media 

launch of the new Fiat 

range of automobiles this 

week Friday in Lagos. 

Plans are underway to 

officially launch the first 

model with the return of 

Fiat Tipo, and by extension 

making Weststar the 

authorized distributor of 

the brand and Fiat professional 

range of automobiles 

in the country. 

The four-door sedan 

version of the Tipo is one 

of the first models which 

will be exclusively available 

at Weststar Associates 

Limited, authorized 

and general distributors 

of Mercedes-Benz, Jeep, 

Dodge, Ram, Fiat and Fiat 

professional in Nigeria. 

According to Stavros 

Diamantidis, General 

Manager, FCA group, 

Weststar Associates Limited, 

“We are thrilled 

about this development 

as Nigerians can now 

enjoy real value for their 

In what industry stakeholders 

described as a 

rude shock, General 

Motors has stated that, it 

intends to pull out of the 

South African market, however 

the company has managed 

to negotiate the sale 

of its local manufacturing 

facility to Isuzu Motors, 

which plans to bolster its 

African operations. 

These moves are, however, 

all subject to local regulatory 

requirements. GM 

will cease production of 

the locally-built Utility as it 

pulls out of South Africa at 

the end of 2017, while Isuzu 

will take over the Struandale 

plant. Isuzu also plans to 

set up its own South African 

dealer network. 

General Motors, meanwhile 

intends to pull the 

plug on its local operations, 

with the Chevrolet 

brand set to be taken off the 

market by end of 2017. Not 

only does this mean ending 

production of the locally 

manufactured Chevrolet 

Utility bakkie and Spark 

hatchback, but imports 

of the Cruze, Captiva and 

Trailblazer will cease. 

As for the Opel brand, 

GM recently sold its Ger- 

money. Tipo fits perfectly 

in its segment and will be 

officially presented before 

the month ends’’. 

It offers high appeal 

as it comes with a vast 

variety of standard options. 

The Italian heritage 

promises comfort, quality 

and versatility. 

This same Italian heritage 

is seen in the model, 

with its unique features 

such as versatility, large 

interior space and compact 

exterior dimensions. 

The name Tipo is a celebrated 

designation that it 

has used many times durman 

division to PSA 

(Peugeot-Citroen) and said 

that it is working with the 

new owner to “evaluate 

future opportunity for the 

Opel brand in South Africa.” 

GM also promised that existing 

Chevrolet and Opel 

customers will continue to 

be supported in the market. 

Following the purchase 

of GM’s Struandale 

factory in Port Elizabeth 

as well as its parts distribution 

and vehicle conversion 

centres, Isuzu 

plans to continue manufacturing 

the Isuzu KB as 

ing it’s over one century of 

history. 

The Tipo is one of the 

models to carry the coveted 

name of which nearly 

two million were produced 

from 1988 to 1995 and 

which was first awarded 

“Car of the Year” in 1989. 

‘’With the Tipo, you 

do not need much to get 

a lot. Thus, it serves as a 

wonderful option for Nigerians 

even as we have 

already put in place, an 

excellent maintenance 

culture offered by our aftersales 

team.” The general 

manager disclosed. 

General Motors to pull out of South Africa 

well as its medium and 

heavy-duty trucks in Port 

Elizabeth. 

“We are committed 

to the South African 

market,” said Isuzu’s executive 

officer of sales, 

Haruyasu Tanishige. “Integrating 

the South African 

light commercial vehicle 

operations into our 

business is the next step in 

laying the foundation for 

our growth plans in the future.” 

General Motors meanwhile 

said that it will cease 

the manufacture and sup- 

Fiat is majorly known 

as automakers of luxurious 

high performance 

sports cars such as Ferrari 

and Maserati. In October, 

2014, Fiat and Chrysler 

Group of automobiles 

formed a merger to become 

Fiat Chrysler Automobiles. 

The new alliance paved 

way for access to newer 

technologies and advanced 

engineering solutions. 

In 2016, Ferrari was 

signed off as a separate 

entity in order for FCA to 

focus more on manufacturing 

city cars. 

ply of Chevrolet vehicles by 

the end of 2017, subject to 

consultation with employees 

and unions. However, it 

would continue to provide 

existing Chevrolet customers 

with parts and service 

support. 

GMSA has also promised 

to work closely with 

existing dealers on “a robust 

transition plan”. 

Automotive News reports 

that GM will also 

cease operations in India 

as it aims to concentrate its 

investments on fewer, but 

more profitable, markets. 

Leventis Motors acquires LOVOL 

machinery franchise in Nigeria 

In what many market 

watchers could describe 

as a further business 

diversification strategy 

designed to shore its bottomline, 

ensure good returns 

on investment to its shareholders 

and more importantly add 

value to its customers across 

the country, Leventis Motors, 

a division of A.G. Leventis (Nigeria) 

Plc weekend in Lagos 

organised a pre-launch and 

dinner night for its customers, 

during which time, the management 

used the opportunity 

to announce its new product 

line. 

This time around, the Leventis 

Motors said it has entered 

into dealership franchise with 

Lovol Heavy Industry Co. Limited 

to import and distribute 

the Lovol branded range of 

construction machinery and 

equipment in the country. 

The pre-launch and dinner 

night held in Lagos was so 

important for both companies 

that it attracted the presence of 

Lovol Construction Machinery 

team including Andy Liu, Manager, 

Africa Regional Sales. 

In his presentation, Andy 

Liu told the enthusiastic customers 

and other invited guests 

that the choice of Leventis Motors 

and preferred partners 

was the outcome of exhaustive 

search since 2015 for a trusted 

and reliable partner in Nigeria’s 

automotive business and one 

that has reputation. 

Andy Liu noted that over 

the years, Leventis Motors has 

maintained a brand name 

that is synonymous with the 

pedigree earned by the parent 

company over the past 60 years 

it has been doing business in 

Nigeria. 

In his welcome remarks, 

Sarnelli Daniele, Head, Construction 

Equipment pointed 

out the decision to enter into 

franchise was driven by the 

quest to offer a budget-friendly 

product to customers that 

comes with a number of advantages 

over other competitors. 

Lovol construction equipment 

and machinery achieves 

15 percent less fuel consumption 

compared to other rival 

brands, it can operate over 12 

hours consecutively and had 

a climatic temperature of up 

to 50 degree which is very suitable 

and tropicalized for Africa. 

Lovol range of products comes 

with Deutz engine with German 

power. 

During the night that fea- 

tured cultural entertainment 

and musical interlude, the 

management of the automobile 

company used the opportunity 

for presentation of 

awards to different companies 

that are patronising the company 

over the years including 

a subsidiary of the Dangote 

group. 

There were also raffle draws 

in which Leventis offered up to 

a cumulative N5million discount 

related to specific models 

that would be purchased by 

the companies after after the 

product launch. 

After the raffle draws conducted 

during the night, purchases 

made by the first two 

companies picked from the 

lucky dip will attract 10 percent 

discount, next three companies 

picked will enjoy 7 percent 

discount, while the other 

5 companies picked from the 

pot shall be entitled to 5 percent 

discount on any model 

of the Lovol Construction Machinery 

purchased. 

Leventis Motors; a division 

of A.G. Leventis (Nigeria) Plc 

incorporated in 1952 became a 

name synonymous with quality 

and assurance of support 

in automotive, construction 

equipment and other related 

products. 

It is the only automobile 

company in Nigeria with ISO 

900:2008 Certification, with 

a team of over 900 workforce 

and Pan Nigerian presence 

with a network of four operating 

branches with sales, aftersales 

and genuine parts availability. 

Founded in 1998, Lovol is a 

large-scale equipment manufacturing 

enterprise and the 

main business covers agriculture 

equipment, construction 

machinery, vehicles and finance 

plus internet. 

The Chinese company 

has a total of 16,000 employees 

with a total assets base 

of $2.75billion. It consists of 

13 functional departments, 9 

business divisions, 2 manufacturing 

plants located in the 

Xinjiang and Heilongjiang 

provinces of China. 

It has four managementoriented 

companies made 

up of logistics, real estate, exchange, 

financing and leasing 

and bank guarantee and two 

overseas research and development 

centres made up of Japanffor 

construction machinery 

and ITALAY for Agriculture 

equipment.


27 

BUSINESS DAY 

RailBusiness 

C002D5556 

Mombasa-Nairobi rail SGR set 

for commissioning 

Rolls-Royce 

to supply 

engines for 

Chinese-built 

locomotives 

Rolls-Royce is to supply 

CRRC with 15 

MTU engines to be 

used by New Zealand rail 

operator KiwiRail. The 20V 

4000 R43 engines will power 

15 DL class freight locomotives. 

The engines each deliver 

2,700 kW and are EU Stage 

IIIA-compliant; they have a 

high power density and low 

fuel consumption. 

The engines are expected 

to be delivered from July 

2017. 

It marks the fourth time 

KiwiRail has chosen CRRC 

locomotives powered by 

MIKE OCHONMA 

In what looks like a 

benchmark for the Nigerian 

Railways and 

the transport industry, 

Kenya is gearing up for 

a new era in railway transport 

with the impending commissioning 

of a standard-gauge 

railway (SGR) line on June 1. 

The commissioning of the 

line comes at a time when cargo 

traffic at the Mombasa port 

is increasing, having gone up 

by 2.4% from 26.7-million tons 

in 2015 to 27.3-million tons in 

2016. 

The East African nation has 

depended on a dilapidated 

1-m-gauge railway system for 

more than a century, but that 

is about to change, following 

the completion of the $3.8-billion 

472 km SGR line from the 

coastal city of Mombasa to Nairobi, 

the capital city. 

“The SGR line is the largest 

infrastructure project in 

post- independence Kenya. It’s 

commissioning will mean low 

freight transport costs, which 

is a good development for the 

economies of the region,” Kenya 

Railways MD Atanas Maina 

tells Engineering News. 

The line, constructed by 

China Communications Construction 

Company (CCCC), 

has the potential to reduce 

transport costs by as much as 

35%. Australia-based construction 

company John Holland, a 

subsidiary of CCCC, has been 

contracted to operate the SGR 

line. 

“The SGR line will assist in 

lowering the logistics costs associated 

with freight storage 

and delivery, which will lead to 

low freight transport costs for 

the business community,” says 

Maina. 

The completion of the 

Mombasa–Nairobi line, which 

forms the first phase of a 

broader railway investment 

programme, is testament to 

Kenya’s determination to become 

East Africa’s transport 

hub. 

Apart from the new line, 

Kenya intends to construct a 

3,500 km SGR network under 

the Railways Master Plan 

that will connect the country 

to Uganda, South Sudan and 

Ethiopia. 

The Mombasa–Nairobi line 

is critical for the development 

of Kenya because it will provide 

a more efficient mode of transport 

for freight in the northern 

corridor, the main transport 

route for cargo destined for not 

only Kenya but also Uganda, 

Rwanda and parts of the Democratic 

Republic of Congo. 

Trains will travel at 80 

km/h, which will significantly 

reduce transit times for cargo 

with a haulage capacity of up to 

4 000 t a trip. 

Currently, cargo transport 

along the northern corridor, 

which competes with Tanzania’s 

central corridor, is mainly 

by road, at 97%. Rift Valley Railways, 

the operator of the 1-mgauge 

line between Kenya and 

Uganda, has been struggling to 

operate profitably. 

“The SGR line designed to 

carry 22-million tons of cargo 

a year, equivalent to 40% of the 

Mombasa port’s throughput 

will play a vital role in decongesting 

the Port of Mombasa, 

thus enable it to increase cargo 

throughput to the inland,” says 

Maina. 

In anticipation of increased 

container throughput at the 

port, the Kenya government 

is modernising and expanding 

the inland container depot 

(ICD), in Nairobi. 

When completed, by August, 

the ICD will have five additional 

SGR lines serviced by 

six gantry cranes for offloading 

and loading containers, a staking 

yard for at least 5,000 twenty-foot 

equivalent units (TEUs) 

and a yearly throughput of 405 

000 TEUs. Currently, the depot 

has a yearly throughput of 180 

000 TEUs. 

The second phase of the 

SGR project will see the line 

being extended from Nairobi 

to Naivasha, a distance of 120 

km, at a cost of $1.5-billion, 

funded by a loan from the Chinese 

government. 

MTU engines since 2009. 

KiwiRail has been deploying 

the 108-tonne DL class 

locomotives since 2010 for 

service on New Zealand’s 

North Island main trunk, 

which passes through 

Auckland, Hamilton and 

Tauranga. 

Bernd Krüper, vice president 

of industrial business 

at Rolls-Royce Power Systems, 

said: “The fact that 

KiwiRail has again decided 

to place an order for CRRCbuilt 

freight locomotives 

equipped with powerful 

and cost-efficient engines 

from MTU is a tremendous 

mark of confidence.” 

‘Rail lines should be linked to tourist sites’ 

Experts have advocated 

on the Federal Government 

to formulate policy 

on railway connectivity 

which they believe can help 

promote tourism by connecting 

tourist spots across 

the country through trains. 

The policy, which will be 

first-of-its-kind exercise by 

the Railways authorities in 

the country the experts argue 

will aims at hassle-free 

and seamless movement of 

people across different tourist 

places. 

Before this can be 

achieved, they said that as a 

way out, seeking suggestions 

from stakeholders, the public 

and other bodies concerned, 

there should be a draft tourism 

policy. 

Among other considerations, 

tourism will be one of 

the frontline activities with 

the railways and the scope 

will be increased by focusing 

on domestic and international 

tourists and by making 

value- addition to tourism 

products, especially designed 

for this segment. 

Since tourist trains have 

special fares, the Nigerian 

Railways can position itself to 

generate substantial revenue 

focusing on international and 

domestic tourists by launching 

more such services. 

The infrastructure on railways 

can be leveraged for 

launching a diverse range 

of products and services to 

ensure bright business prospects 

with adequate profitability. 

The aim should target 

to operate more trains connecting 

tourist destinations 

and also by providing special 

train services ranging from 

luxury to budget sections. In 

Nigeria today, many tourist 

spots have limited connectivity. 

When fully operational, 

it should offer luxury tourist 

trains, semi- luxury tourist 

trains, special train and other 

special services in order to 

attract domestic and international 

tourists. 

It should also offer interstate 

tourist train services, 

flexi-package tourist trains, 

ordinary tourist trains, hill 

tourist trains as well as valueadded 

tour package. 

At the long run, there 

should be a tourism arm of 

the Railways that will positioned 

as a one stop shop for 

all the requirements of both 

domestic and international 

tourists.



Leadership 

SHAPING PEOPLE INTO A TEAM 

Limit cyberattacks with a systemwide 

Cyberattacks cost companies 

an estimated 

half a trillion dollars 

in damages every year. 

The main reason they 

can harm companies to such a 

staggering degree is that today’s cybersecurity 

systems use centralized 

monitoring, with little beyond their 

main firewalls to protect the rest of 

the organization. As a result, when 

companies are hacked, it can take 

days for information technology 

teams to isolate infected systems, 

remove malicious code and restore 

business continuity. By the time 

they identify, assess and resolve 

the incident, the malicious code 

has usually proliferated across any 

connected or even tangentially related 

systems, giving hackers even 

more time to access sensitive data 

and cause malfunctions. 

To stay ahead of new intrusion 

techniques, companies need to 

adopt decentralized cybersecurity 

architectures, armed with intelligent 

mechanisms that will either 

automatically disconnect from a 

breached system or default to a 

“safe mode” that will enable them 

to operate at a reduced level until 

the effects of cyberattacks can be 

contained and corrected. Like the 

general security systems at highrisk 

sites such as nuclear power 

plants, companies require multiple 

layers of redundant safety mechanisms 

and cybernetic control systems. 

The goal should be to create 

“air pockets,” with neither direct 

nor indirect internet connections, 

that can protect critical equipment 

and internet-connected devices. 

Every company’s cybersecurity 

program will have unique 

attributes, but there are several 

fundamentals to this decentralized 

architecture that can help companies 

shift the balance of power 

away from attackers. 

DETECTION 

Even the most expertly designed 

cyber architecture is useless if it 

can’t detect and understand the 

threats it faces. Companies are 

experiencing more viral outbreaks 

because they often can’t even detect 

them until it’s too late. Today’s 

cybersecurity systems have been 

built to detect previously identified 

malicious codes and malware. But 

cyberattacks are morphing so fast 

that threat patterns are unpredictable. 

To identify and mitigate new 

attack scenarios, security systems 

need to search for anomalies, 

analyze the probability that they are 

hostile acts and incorporate them 

into a continually expanding list of 

possibilities. This level of detection 

should be carried out by components 

on many different levels to 

cover the multitude of devices and 

system components connected to 

the internet and physical environments. 

Together, these cybernetic 

systems can identify new forms of 

attacks by comparing what they 

understand to be their normal, 

uncompromised state — both on 

their own and in combination with 

c 

other systems. 

Rather than reacting to a defined 

set of indicators, these systems can 

detect and react to irregularities 

in data flows, involving anything 

from the amount, type, origination 

or timing of data. For example, to 

determine whether someone 

should be locked out of an 

online bank account, some 

banks’ cybersecurity systems 

are starting to use artificial 

intelligence to compare how a 

person normally types or uses 

his computer mouse. 

HARM REDUCTION 

The next step is to make sure 

that decentralized, intelligent 

systems minimize the impact 

of attacks by taking potentially 

compromised systems offline, 

by disconnecting them from 

other critical equipment or by 

locking them in a safe mode. 

Current cybersecurity systems 

usually trigger an alert if they 

have identified a specific attack. 

But they continue to operate 

and communicate with 

other systems until IT teams 

shut them down and correct 

the malfunction. 

SECURE BY DESIGN 

Finally, all companies’ products 

will eventually have to 

become secure by design. So 

far, it seems that companies 

pay little heed to cybersecurity 

during product development. 

That needs to change. Hackers 

have remotely accessed and 

controlled everything from 

network-connected electricity 

“smart meters” to security 

cameras. In 2015 Chrysler 

announced a recall of 1.4 

million vehicles after a pair 

of cybersecurity researchers 

demonstrated that they could 

remotely hijack a Jeep’s digital 

systems over the internet. 

In Germany, nearly 1 million 

homes suffered brief internet 

outages in 2016 after criminals 

gained access to and remotely 

shut down their internet routers. 

The U.S. Food and Drug 

Administration warns that 

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

medical devices connected to 

hospital networks, other medical 

devices and smartphones 

— such as implantable heart 

monitors — are now at risk of 

remote tampering that could 

deplete the devices’ batteries 

or result in inappropriate pacing 

or shocks. 

Companies need to build 

kill switches, safe modes and 

encryptions into their products 

during development. 

This will protect not only the 

companies’ systems but also 

their customers’. Apple, for 

example, installs layers of data 

encryption into its products 

and permits customers to run 

only Apple-approved software 

programs on their devices. 

Such practices need to become 

standard operating procedure 

across all industries. 

Stopping cyberattacks will 

never be cheap or easy. Developing 

decentralized, intelligent 

cybersecurity systems will likely 

happen in fits and starts as 

devices learn through trial and 

error not to react to false positives 

or to go into safe mode 

more often than is necessary. 

Managers will have to show 

leadership, since most customers 

remain unaware of the level 

of danger that cyberattacks 

pose to the products in their 

possession, and so are likely to 

be impatient with glitches and 

delays. The good news is that 

the technology exists to make 

good cybersecurity a reality. 

Decentralized, intelligent systems 

can significantly decrease 

the risk of cyberattacks and 

minimize their damage. The 

savings will be enormous. 

(Claus Herbolzheimer is a 

Berlin-based partner in Oliver 

Wyman’s digital and strategic 

IT practices.)


C002D5556 

BUSINESS DAY 

29

30 



31


NEWS 

Obaseki closes down Edo Line over N1.5bn debt 

--relocate staff to ministry of transportation 

IDRIS UMAR MOMOH, BENIN 

N11bn fuel subsidy: Court to decide legality of Uba’s detention 

SEYI ANJORIN, ABUJA 

Justice Yusuf Halilu of 

the High Court of Federal 

Capital Territory, 

Jabi has fixed Thursday 

for ruling on a motion on 

notice filed by embattled 

Chief Executive Officer of 

Capital Oil and Gas Ltd, 

Ifeanyi Uba, challenging his 

continued detention by the 

Department of State Service 

(DSS). 

In the motion brought 

pursuant to Section 298(2) 

of the Administration of 

Criminal Justice Act (ACJA) 

2015, Uba, through his lawyer, 

Ifeoma Esom is praying 

for “an order vacating/discharging 

the exparte order 

of this honourable court 

made on the 10th of May, 

2017, allowing the applicant 

to detain the respondent in 

the custody of the applicant 

for an initial period of 14 

A 

Nigerian employee of 

the British American 

Tobacco (BAT) Nigeria 

Limited, Timothy Ogbole, has 

been dismissed from the company 

for exposing wrongdoings 

by an expatriate manager. 

Ogbole, a pioneer staff who 

rose to the position of Process 

Engineer/Pest and Hygiene 

Manager, was forced out of 

the company through a plot 

hatched and executed by Ilker 

Ogretir, a Turkish national 

and BAT’s Manufacturing 

Manager. 

In March 2016, Ogbole was 

commended, via email by the 

Human Resources Manager, 

days pending the completion 

of investigation”. 

The DSS, based on a 

report made to it by the 

Nigerian National Petroleum 

Corporation (NNPC), 

over the purely civil dispute 

arising out of the alleged 

indebtedness of Capital 

Oil and Gas (COG) to the 

NNPC, arrested Uba from 

his house in Lagos on March 

24, 2017 and kept him in 

its custody until April 14, 

2017, when he was temporarily 

and conditionally 

released after he had been 

coerced into making payment 

of N2billion and executing 

various documents 

in favour of NNPC and Asset 

Management Corporation 

of Nigeria (AMCON). 

However, Esom told the 

court that Uba upon return 

to his home in Lagos, in fear 

for his life and liberty should 

he renew his claims that he 

is not indebted to either 


L-R: Ada Ijara, head, private trust, United Capital Plc; Charles Odenigbo, MD/CEO, Scobro International Limited; Dave Uduanu, MD/ 

CEO, Sigma Pensions, and Mabel George, vice president, development, Sigma Pensions, at the Sigma Pensions human resources 

conference in Lagos, yesterday. 

Pic by Olawale Amoo 

NNPC Retail Ltd or AMCON 

as he had maintained before 

his incarceration, instructed 

his counsel to file an application 

for the enforcement 

of his fundamental rights. 

When the suit came up 

before the Lagos division of 

the Federal High Court on 

the April 27, 2017, the court 

granted him leave to serve 

the originating processes 

on the SSS outside Lagos 

whereupon the originating 

processes were served on 

them on the 28th of April 

2017. 

According to Esom, “notwithstanding 

the pendency 

of the suit and the service of 

the originating processes, 

the SSS again invited the 

Respondent to report to 

its offices in respect of the 

same allegations made by 

the NNPC and AMCON 

which is the subject matter 

of the suit. 

British American Tobacco’s Turkish manager sacks Nigerian for exposing stock fixing 

BUNMI BANJO 

Edo State Governor, 

Godwin Obaseki has 

shut down indefinitely 

the Edo Line transport 

company. The state-owned 

transport company was shut 

down November 2010 by the 

immediate past governor, 

Adams Oshiomhole over 

the rejection of the appointment 

of Amos Osunbor as 

the board chairman of the 

company by the workers. 

Oshiomhole however in 

2012 made Osamede Adu, 

the chairman of Bob Izua 

company as the sole administrator 

of the company 

Following the appalled by 

organized Labour during the 

last May Day celebration in 

Benin-City that the governor 

should revitalize moribund 

companies in the stage, the 

governor, Godwin Obaseki 

vowed not to put for sale 

all the ailing industries and 

redeploy staff to the relevant 

ministries. 

In fulfillment of the 

threat, the governor during 

inspection announced the 

closing of the company and 

the redeployment of all the 

staff to the ministry of transport.The 

governor said the 

company was indebted to 

the tune of N1.5 billion while 

some buses and major departments 

were in disrepair. 

Among the disrepair departments 

are the mechanic 

unit, the courier section, the 

staff office among others. 

According to him, we will 

shut down this place, clean 

it up, and decide on how to 

liquidate the debt and plan 

how to use the premises for 

other ventures. 

“The company’s debt was 

about N1.5 billion. This is 

a typical waste. Can you 

see how many vehicles are 

around? We have been paying 

people close up to four 

years without doing any 

work. “The company has a 

huge amount of debt and 

as a government, we cannot 

continue in this situation. 

What we are doing is that we 

are absorbing the staff 

The company had workforce 

that was 186-people 

strong with its headquarters 

located at James Watt Road, 

Off Mission road, Benin City 

and other outlets in Lagos, 

Abuja, as well as other parts 

of the country”, he added. 

for his performance in his 

new role as Process Engineer. 

According to Sahara reports 

he was a diligent staff. 

It was that role that caused 

the friction between him and 

Ogretir. Company sources 

disclosed that Ogbole observed 

that Ogretir was involved 

in certain fraudulent 

activities and stock fixing. 

Aware that what Ogretir was 

doing could adversely affect 

leaf waste management, one 

of his key performance indicators, 

Ogbole was said to have 

requested, via email, that the 

stock fixing be stopped. This, 

unknown to Ogbole, got his 

Turkish boss very angry. 

Buhari terminates pre-shipment 

contracts awarded under Jonathan 

KEHINDE AKINTOLA, ABUJA 

Facts emerged on Tuesday 

that President 

Muhammadu Buhari 

terminated the controversial 

appointment of 

Pre-shipment Inspection Agents 

(PIA) which was approved three 

In November 2016, Ogbole’s 

line manager, Adetola 

Musa, confided in him that 

he had been instructed to 

place him on a Performance 

Improvement Plan (PIP). Realizing 

that this was a booby 

trap, Ogbole refused to sign 

the PIP document, insisting 

on a performance evaluation 

based on key performance 

indicators set at the beginning 

of 2016. 

Ogbole knew that it was his 

Turkish boss’ scheme to either 

get him sacked or demoted. 

This was confirmed in a video 

recording of the discussion 

between him and Adeola, his 

line manager. 

days before the expiration of 

President Goodluck Jonathan’s 

administration. 

President Buhari’s decision 

was in line with paragraph 

12(2b) of the contract agreement 

signed between Federal 

Government and the PIAs, 

which stated that: “the preshipment 

inspection contracts 

so signed shall be deemed 

terminated upon any change 

of government bringing an 

end to the life of the preceding 

government.” 

According to a letter issued 

by the office of the Accountant 

General of the Federation 

(AGF), with reference No: 

FD/LS/0167/III/DF dated 

12th May, 2017 sent to the 

Chairman, House Committee 

on Public Procurement, 

Oluwole Oke, and obtained 

by BusinessDay, total sum of 

N70,053,195,868.22 was paid 

by the 11 PIAs between January 

2011 and April 2017. 

According to the letter 

signed by Ahmed Idris, AGF, 

Colbalt International Services 

Ltd paid N11,307,644,156.71; 

JBIS Integrated Resources 

Ltd paid N15,206,397,092.42; 

Global Scansystems Ltd 

paid N14,120,797,979.28; 

Arlington Securitas paid 

N8,495,355,177.67; Robinson 

Internal Energy Ltd 

paid N6,099,409,893.12; 

Swede Control Intertek Ltd 

paid N5,623,500,645.53; 

Lagos begins review of newspaper registration law 

JOSHUA BASSEY 

Lagos State government 

says it has started the 

process of reviewing the 

Newspaper Registration 

Law, part of the aim being to 

ascertain the number of outfits: 

online and conventional media 

that are Lagos based. 

Steve Ayorinde, the commissioner 

for information and 

strategy, disclosed this at a news 

conference onTuesday, as part 

of activities to mark the second 

anniversary of the Governor 

Akinwunmi Ambode led administration, 

assuring that the 

review was not meant to muzzle 

media practice, but know who 

publishes what within the state 

and their status. 

According to Ayorinde, this 

has become necessary because 

the existing law signed into effect 

Candid Oil Services Ltd 

paid N2,929,587,557.59; 

Trobell International Ltd 

paid N2,537,273,056.24; 

Gulf Inspection Service Ltd 

paid N799,829,808.57; Carmaine 

Asseyer Ltd paid 

N163,306,953.60 while total 

sum of N2,779,093,557 was 

added as schedule of outstanding 

claims. 

Idris further explained that 

the role of the oAGF “is limited 

Topsy mentioned facilitation, 

based on submission of requests 

and approval in the 

agents policy files maintained 

at the Federal Ministry of Finance. 

Evaluation of the agents 

request/bills is done by the Central 

Bank of Nigeria (CBN) and 

Federal Ministry of Finance. 

However, payments could only 

be effected based on available 

cash flow in the dedicated NESS 

(Oil & Gas) account maintained 

and operated with the Central 

Bank of Nigeria.” 

In his testimony, Muhammad 

Wanka, Managing 

Director of Arlington Securitas, 

which paid the sum of 

N8,495,355,177.67, who alleged 

that the pre-shipment inspection 

contracts terminated by 

Federal Ministry of Finance 

in September 2015, however 

confirmed that the contract 

letters were signed by President 

Jonathan on the 26th May, 2015. 

Wanka who confirmed 

signing the contract papers 

in 2003, has become obsolete and 

no longer in tune with modern 

reality and new developments 

within the media industry, especially 

the growth and penetration 

of the digital platforms. 

“In views of the realisation that 

the State Newspaper Cap Law is 

obsolete, the State Government 

has commenced the process of 

reviewing existing Newspaper 

Law Cap No2 of 2003 with a view 

to making it more effective and 

in tune with modern reality. The 

review is not an attempt to stifle 

the media. The idea is to move 

with the trends and development 

of the time. It is for the good of the 

journalism profession.” 

Ayorinde said the government 

would be inviting media 

stakeholders to seek their inputs 

to intimate them with the provisions 

of the law and their obligations 

before enactment. 

however noted that despite the 

termination of the contract, his 

company did not stop working 

since the approval was for two 

years without payment from 

government. 

While speaking, Ibrahim 

Dutse (APC-Jigawa) blamed the 

Finance Minister for the development 

and losses recorded by 

the companies having failed to 

appoint a replacement before 

disengaging them. 

On his part, Bulus Maren 

however observed that the decision 

of Allington and others like 

it to keep carrying out inspection 

was out of their own volition 

having being disengaged. 

“Whatever Allignton or any 

of the affected firms did in the 

absence of a running contract 

was purely volunteerism on 

behalf of the country,” Maren 

said, just as he thanked the 

companies for their charity and 

selfless services to Nigeria. 

Also at the hearing, Nigerian 

Social Insurance Trust 

Fund (NSITF) to the committee 

traded blames over the 

submission of Bureau for Public 

Procurement (BPP) on the prequalification 

of companies for 

pre-shipment inspection. 

In his remarks, Mamman 

Ahmad, BPP Director General 

explained that approvals were 

given to companies based on 

verification of their particulars, 

including compliance certificates 

issued by NSITF. 

“You can’t operate as a print 

and not be registered with the 

ministry. The media space has 

been going through transformation 

and the review is in line with 

the changes in the media space. 

According to Ayorinde, there is 

the need to address the challenge 

ascertaining the actual number of 

media houses operating in Lagos 

to facilitate documentation and 

billings. He said the review is about 

how the ministry can be empowered 

to register online media, tract 

who is who and from where they 

are operating. 

While claiming that 90 percent 

of the online media are 

based in Lagos, Ayorinde enjoined 

online media publishers 

to come forward to identify themselves 

with a location. He said the 

review is being looked at from the 

point of the media and the law.


UBA to launch $500m... 


UBA said it will obtain the approval 

of the CBN to access the official 

foreign exchange market, if for 

any reason the bank does not have 

sufficient foreign currency reserves 

to meet the principal and interest 

payments due on the notes. 

Based on Fitch’s assessment on 

expected recoveries in a liquidation 

scenario, an expected Recovery 

Rating (RR) of ‘RR4 (EXP)’ is 

also assigned to the notes, implying 

average recovery prospects. 

The notes will constitute senior 

unsecured obligations of UBA and 

will be used for general corporate 

purposes. 

Fitch said the assignment of 

the final rating is contingent on 

the receipt of final documents 

conforming to the information 

received to date. The expected rating 

is in line with UBA’s Long-Term 

Foreign-Currency Issuer Default 

Rating (IDR) of ‘B’. In Fitch’s view, 

the likelihood of default on these 

notes reflects the likelihood of 

default of the bank. 

According to Fitch’s criteria, 

a bank’s IDR usually expresses 

Fitch’s opinion on the risk of default 

on senior obligations to thirdparty, 

non-government creditors 

as in Fitch’s view, these are typically 

the obligations whose nonperformance 

would best reflect the 

uncured failure of the entity. 

Where a bank has a Long-Term 

IDR of ‘B+’ or below, Fitch usually 

assigns an RR to the entity’s issues. 

RRs provide greater transparency 

on the recoveries component of 

Fitch’s assessment of the credit 

risk of low-rated issuer’s securities. 

“A change in UBA’s IDR would 

affect the rating of the notes and 

may also affect recovery prospects 

and the RR. UBA’s IDRs are driven 

by the bank’s standalone financial 

profile, as reflected in its Viability 

Rating (VR) of ‘b’. UBA’s VR and 

IDRs are primarily sensitive to 

further asset-quality deterioration 

and capital deterioration as well 

as continued pressure on foreigncurrency 

funding and liquidity,” 

Fitch Ratings stated. 

Importers to save N1trn annually on 24-hour... 


two to seven days in Cotonou; 

Durban port, South Africa and 

Mombassa port. 

“In Nigerian ports, an importer 

of a 20-foot container is expected 

to get five days demurrage free and 

to pay daily charges of N2,850 for 

6-10 days; N4,400 for 11-24 days 

and N6,600 for 25 days and above. 

Acting President Osinbajo on May 

19 signed, a new ‘Executive Order 

on Promotion of Transparency and 

Efficiency in the Business Environment,’ 

directing the Nigeria Customs 

Service (NCS), Nigerian Ports Authority 

(NPA), terminal operators and 

other government agencies involved 

in cargo clearance at the nation’s 

seaports to begin round-the-clock 

operations at the port within 30 days. 

“Currently, the marine and ship 

side of port operations, carried out 

by the terminal operators have 

been taking place 24 hours, seven 

days a week, without interruption 

in most terminals in Lagos ports. 

This means that ships bringing 

cargoes are being attended to any 

time and day, including public 

holidays and weekends. However, 

cargo clearance and examination 

by Customs and other agencies do 

FG says new executive orders will be... 


C002D5556 

L-R: Raji Afolagbe, national president of Government High School old students association; Raliat Abdul-Razaq, wife of the 

founder and first School Administrator; Alimi Abdul-Razaq, eldest child of the founder, and Saka Isau, former Secretary to 

the Government of Kwara State and old student, during the reception hosted by the family of Abdulganiyu Abdul-Razaq, 

founder of Ilorin College, now Government High School, Ilorin, to mark the 50th anniversary of the school. 

not take place at night, weekends 

and public holidays,” said Lucky 

Amiwero, a maritime analyst, in a 

telephone interview. 

According to Amiwero, only a 

few terminals allow agents to take 

delivery of already cleared consignments 

but 24-hour port operation 

can only have impact on cargo 

clearance, ‘if all the government 

agencies at the ports, including 

commercial banks that would 

collect import duties and clearing 

agents, are encouraged to work 

round-the-clock and every day. 

“The situation where banks operate 

from 8am to 4pm everyday, 

would not allow the importers and 

their agents to pay import duty and 

obtain necessary clearance that 

would enable Customs to release 

the cargo. It is not enough to issue 

an executive order on paper, the 

Federal Government needs to put 

structures on ground to ensure 

round-the-clock power supply at 

the ports, as well as illuminate the 

ports and environs. 

“As we speak now, the access 

roads leading to the ports in Lagos 

are in a sorry state and the question 

is, how would our ports operate 

24-hours in such a state?”. 

servants who will be in charge of 

the implementation. To ensure that 

the orders 

work, we want to change the 

orientation of Nigerians,” Akande 

said, adding that Nigerians need 

to understand that it is the duty of 

everyone to ensure the improvement 

of the Nigerian business 

environment. 

The newly signed executive 

order calls for transparency in Ministries, 

Departments and Agencies 

(MDAs) of the Federal Government 

of Nigeria. It also deals with 

government agencies budgeting 

and expenditure procedures, a 

new visa regime that reviews entry 

experience of visitors and travellers, 

as well as port operations that under 

the order will now run for 24 hours. 

Meanwhile, more than one 

month after the sack of the Director- 

General of the National Pension’s 

Commission (PenCom), Chinelo 

Anohu-Amazu and appointment of 

a replacement, Dikko Aliyu Abdulrahman 

and his subsequent rejection 

by the Senate, the government 

is yet to pick a replacement. 

Presidential Spokesman, Femi 

Adesina told newsmen at the 

briefing that the matter is still being 

looked into, describing it as a 

developing story. 

“It is a developing story and it is 

being looked at. No name has been 

transmitted to the Senate for now 

and that tells you the matter is still 

being looked at”. 

On April 13, President Muhammadu 

Buhari fired heads of 22 

parastatals, including Pencom, 

and announced Abdulrahman 

as the new director-general of 

Pencom, subject to the Senate’s 

confirmation. 

The President also appointed 

Funso Doherty as chairman of 

Pencom Board, as well as Akin Akinwale, 

Abubakar Zaki Magawata, 

Ben Oviosun and Nyerere Ayim as 

executive commissioners. 

The appointment of the new 

PenCOm DG is a breach of the provisions 

of the Pension Reform Act, 

2014 that provides that the nominee 

for the position of the chairman 

or director-general of Pencom 

cannot be a shareholder or staff of 

any Pension Fund Administrator 

(PFA), within three years before or 

after his or her appointment. 

Section 21 (2) of the Act also states 

that in the event of a vacancy (for the 

chairman, DG or other members of 

board), the President shall appoint a 

replacement from the geo-political 

zone of the immediate past member 

that vacated the office to complete 

the remaining tenure. 

According to the Pensions Act, 

the Commission’s DG is entitled to 

five years tenure of office, subject 

to renewal for another term in office. 

The sacked DG was appointed 

in 2014 even though she was in 

charge of the agency in acting capacity 

from December 2012. 

Abdulraham, the nominated 

DG, is from the North-West geopolitical 

zone, while the former 

DG is from Anambra State, South 

East Nigeria. 

The sacked PenCom DG was 

reputed to have increased pension 

assets from N2.9 trillion in 2012 to 

N6.7 trillion in 2017 and the Retirement 

Savings Account from N5.39 

million to N7.2 million. 

Amiwero also observed that there 

are too many agencies at the ports 

and for “24-hour port operation to 

achieve its aim, the government 

needs to prune down the number of 

agencies at the ports because many 

of them duplicate functions.” 

Tony Anakebe, managing director 

of Gold-Link Investment Limited, 

also agreed that round-theclock 

port operations will reduce 

demurrage charges importers pay 

to shipping companies and storage 

charges paid as rent to terminal operators 

for delayed cargo clearance. 

Anakebe however said that “If 

24-hour operation must work, the 

government must improve on the 

security system within and around 

the port by ensuring that port access 

roads are well illuminated and 

that security cameras are installed 

to monitor movement of persons 

and cargoes in and out of the ports. 

Security officials such as men of 

the Nigerian Police Force and others 

must be on ground to monitor 

activities around the ports,” he said. 

Anakebe, who noted that the 

efforts of the past administration of 

Good-Luck Jonathan to introduce 

24-hour port operations, as directed 

by Ngozi Okonjo-Iweala, then minister 

of finance failed due to poor 

infrastructure around the port area. 

He further observed that government 

must ensure that port access 

roads are in good shape to ensure 

free flow of traffic day and night. 

“The past administration did 

not have the political will to implement 

the 24-hour port operation 

and the government also did not 

put pressure on agencies and other 

operators involved, so as to ensure 

that the ports operate round-theclock, 

in line with the international 

best practices.” 

Jonathan Nicole, President 

Shippers’ Association of Lagos, 

who commended the government 

for the new order, said that if well 

implemented, it would reduce the 

time spent in clearing goods from 

21 days to two days, and further 

help in reducing the cost of doing 

business at the ports. 

“Customs officers and all other 

operators that now work from 9am 

to 5pm are expected to be on seat 

regularly to attend to importers 

and their agents, and they can 

achieve this by running 12-hour 

shifts on a daily basis. 

“If the Federal Government succeeds 

in implementing the 24-hour 

port operations, Nigerian seaports 

would become user-friendly and 

more efficient, reducing the dwell 

time of cargo and ensuring faster 

turnaround time for ships calling 

at the ports,” Nicole added. 

BUSINESS DAY 

33 

NEWS 

Briefs 

Trump’s $4.1tr budget takes hatchet to safety net 

The White House has unveiled 

a $4.1tr (£3.1tr) budget 

that would take the axe to the 

social safety net for the poor. 

The plan would sharply slash 

food stamps, healthcare for 

low-income patients, disability 

benefits and eliminate student 

loan subsidies. 

The budget also features an 

Ivanka Trump plan for paid parental 

leave. 

Government borrowing at three-year April high 

Government borrowing was 

at its highest April level for three 

years, according to the latest figures 

from the Office for National 

Statistics (ONS). 

Public sector net borrowing, 

excluding public sector banks, 

was £10.4bn last month, up by 

£1.2bn from April 2016. 

Public sector net debt was 

£1.72tn, equivalent to 86% of 

GDP, an increase of £114bn on 

April 2016. 

German police raid Daimler offices 

German police have searched 

11 offices of carmaker Daimler 

as part of their investigation into 

possible fraudulent emissions 

data by employees. 

A total of 23 prosecutors and 

230 police officers took part in 

the search in the states of Baden- 

Wuerttemberg, Berlin, Lower 

Saxony and Saxony, 

Daimler, which owns Mercedes-Benz, 

said it was cooperating 

with authorities. 

Housing recovery intact despite drop in new home sales 

New U.S. single-family home 

sales tumbled from near a 9-1/2- 

year high in April, but the housing 

recovery likely remains intact 

amid a tightening labor market. 

The Commerce Department 

said on Tuesday new home 

sales declined 11.4 percent to a 

seasonally adjusted annual rate 

of 569,00 units last month, with 

sales in the West region plunging 

to their lowest level in nearly 

1-1/2 years. 

U.S. plan to sell oil reserve shows declining import needs 

President Donald Trump’s 

proposal to sell half of the U.S. 

strategic oil reserve highlights a 

decline in the biggest oil user’s 

reliance on imports - and a 

weaning off OPEC crude - as its 

domestic production soars. 

The U.S. Strategic Petroleum 

Reserve (SPR) SPR-STK-T-EIA, 

the world’s largest, holds about 

688 million barrels of crude in 

heavily guarded underground 

caverns in Louisiana and Texas. 

Apple and Nokia see deeper partnership after ending patent dispute 

Apple (AAPL.O) has settled 

a patent dispute with Finnish 

telecom equipment maker Nokia 

and agreed to buy more of its 

network products and services, 

sending Nokia shares up 7 percent. 

The deal means Nokia will get 

bigger royalties from Apple for 

using its mobile phone patents, 

helping offset the impact of 

waning demand for its mobile 

network hardware.


NEWS 

May & Baker not in merger talks – Aboderin 

Ayodeji Aboderin, executive 

director, Finance, 

May & Baker 

Nigeria Plc, has told 

BusinessDay Newspapers that 

the pharmaceutical giant is not 

negotiating a merger deal with 

Fidson Pharmaceutical, or any 

other party. 

May & Baker is a leading 

pharmaceutical company in 

Nigeria with over 72 years of 

doing business in the country. 

It is also one of the few Nigerian 

pharmaceutical companies 

certified for Good Manufacturing 

Practice (GMP) by the 

World Health Organisation 

(WHO). 

“May & Baker has consistent 

record of growth in sales 

and profitability with a culture 

of robust dividends payment,” 

said Aboderin in a letter to 

BusinessDay yesterday. “It 

has earning capacity above 

industry average.” 

AMAKA ANAGOR-EWUZIE 

Four months after the 

Nigeria Customs Service’s 

(NCS’s) Federal 

Operations Unit 

(FOU) intercepted 49 boxes 

loaded with 661 pieces of 

pump action rifles imported 

into the country from China, 

the Tin-Can Island Command 

of the Service yesterday 

in Lagos impounded 

440 guns of various sizes and 

designs. 

Speaking with newsmen, 

Monday Abuse, assistant 

comptroller general of Customs 

said that the contraband 

cargo was shipped from 

Turkey. 

Abueh also said a suspect 

has been arrested in connection 

with arms import. The 

Since joining the Nigerian 

Stock Exchange in 1994, 

Aboderin said that the company 

has continued to better 

its year-end financial performance 

and has won the best 

performance award of the NSE 

in the healthcare category over 

six times. 

BusinessDay had reported 

on Monday that Fidson Pharmaceutical 

was said to be looking 

to acquire May and Baker 

Nigeria Plc, an event which the 

publication deemed should 

be growth positive for the 

sector which is grappling with 

higher input costs, counterfeit 

drugs, lack of meaningful patent 

legislation on pricing, and 

a chronically underfunded 

healthcare sector. 

May & Baker, with a market 

capitalisation of N1.4 billion, is 

the best performing Pharma 

stock on the Nigerian Stock Exchange 

(NSE) with a 56 percent 

gain year to date. The company 

constructed what was West 

Africa’s biggest pharmaceutical 

plant in 2007 and diversified 

her operations into food processing, 

Aboderin said. 

“May & Baker began West 

and Central Africa’s first private 

vaccine production investment 

with 51 per cent stake in 

Biovaccines Nigeria Limited, 

a public private partnership 

with the federal government of 

Nigeria for local manufacture 

of vaccines, a project that is 

expected to take off soon.” 

“The company continues 

to grow in leaps and bounds 

with new investment in roads 

that make her future even more 

alluring.” 

May & Baker was priced at 

N1.28 per share at The Nigerian 

Stock Exchange as at the close 

of trading yesterday, the price it 

has retained for three consecutive 

trading days. 

Customs intercepts imported 440 guns at Tin-Can port 

CHANGE OF NAME 

I, formerly known and addressed as 

Miss Chioma Jane-Frances Igbor 

now wish to be known and addressed 

as Mrs Chioma Jane-Frances Akor. 

All former documents remain valid. 

General Public please take note. 



Emmanuel Ogechukwu Nwankwo 


as Emmanuel Ugochukwu Eleazar. 





Mr. Okuoka Akpos Donald now 

wish to be known and addressed 

as Mr. Edward O. Akpos Donald. 





Innocent Ogbuehi now wish 

to be known and addressed as 

Ogbuehi Innocent Maduabuchi. 





Anenin Helen now wish to 

be known and addressed as 

Okosun Helen. All former 

documents remain valid. General 

Public please take note. 

consignment, according to 

the Zonal Comptroller of 

Customs was declared as 

POP powder to cover up the 

illicit import. 

Abueh explained thst 

the container with number 

PONU 210024 was picked up 

based on intelligence adding 

that investigation into 

how and who is behind the 

import is ongoing. “Right in 

my hand is a sample pump 

action of various designs. 

Based on intelligence report, 

this command identified the 

container and the container 

was intercepted even before 

declaration. 

“On opening the container, 

we discovered that 

they used POP powder to 

conceal the importation but 

based on intelligence report 

we were able to know that 

the container was laden 

with arm. 

Industry stakeholders 

blamed the rising crime 

wave caused by high rate 

of unemployment in the 

country for the growing rate 



Miss Blessing Ekaete Bassey now 

wish to be known and addressed as 

Mrs Blessing Ekaete Ebri. All 

former documents remain valid. 




Miss Igwebuike ljeoma Eucharia 


as Mrs Ijeoma Eucharia Nnamani. 





Amore, Oloruntowo Josephina 


as Raphael Oloruntowo 

Josephina. All former documents 

remain valid. First Bank Plc & 




Ismaila Umar Abubakar now 

wish to be known and addressed 

as Umar Ismaila. All former documents 

remain valid. First Bank Plc 

& General Public please take note. 

of arms importation in the 

country. 

Emma Nwabunwanne, a 

Lagos based importer told 

our correspondent in a telephone 

interview that the 

current economic downturn 

that led to job loss in different 

sectors of the economy 

is beginning to take toll on 

security of lives and property 

by way of youths indulging in 

armed robbery and kidnapping 

for ransom. 

“It is worrisome to know 

that the National Bureau of 

Statistics (NBS) statistics reported 

that the nation’s gross 

domestic product (GDP) has 

contracted again in the first 

quarter of the year, showing 

that hope for economic 

recovery and job creation 

are still far from reality,” said 

Nwabunwanne. 

According to him, there 

is need for the Federal Government 

and its economic 

management team to put in 

place, structures that would 

bring the economy back on 

track so that there would be 

food on people’s table, crime 

rate would reduce and Nigerians 

would assure of safety. 

According to Dennis 

Amaeshi, importation of 

arms and ammunition is a 

usual trend that when politicians 

start warming-up for 

election. “Though, it may 

seems that 2019 election is 

still far as we are currently 

in 2017, but we sincerely 

believe that arms import is 

a trend that is synonymous 

election preparation.” 

Recall that in December 

2016, Tin-Can Island Port 

Command also intercepted 

guns and ammunition concealed 

in an imported used 

vehicle, and another sets of 

arms accessories hidden in 

a container loaded with used 

vehicle. 

The items impouned include 

-one Omini American 

Tactical riffle numbered 

AR48634; another riffle- one 

moasberg American pump 

action numbered U648018; an 

additional 3,500 pieces of premier 

gun pellet and another 

4,000 pieces of gun pellet. 

The container also had 26 

packages of already-mademilitary-food; 

nine pieces of 

military bullet proof verse; a 

piece of military helmet; a 

piece of military gas mask; 

two pairs of glasses; two 

pairs of military booty and 

one piece of riffle paunch. 

C002D5556 

BUSINESS DAY 34


C002D5556 

BUSINESS DAY 

35 

Live @ the Stock exchange 

Market reroutes north as 

large cap stocks gain 

Stories by 

Iheanyi Nwachukwu 

Nigerian stocks 

rallied by 

0.05percent 

on Tuesday as 

Nestle Nigeria 

Plc led other largely capitalised 

stocks in the basket of 

23 gainers against 18 losers. 

The value of listed equities 

increased by N5billion 

as evidenced in the market 

capitalisation which 

closed at N9.712 trillion 

against preceding day close 

of N9.707 trillion. 

The Nigerian Stock Exchange 

(NSE) All Share 

Index (ASI) closed at 

28,093.30 points against 

the preceding day close of 

28,078.30 points. The Yearto-Date 

(ytd) return stood 

at 4.53percent. 

Nestle Nigeria Plc rallied 

most by N14, from 

N836 to N850; followed 

by Nigerian Breweries Plc 

which gained N3.16, from 

N140.84 to N144. GlaxoSmithKline 

Consumer Nigeria 

Plc gained 57kobo, from 

N15.43 to N16; while Ecobank 

Transnational Incorporated 

Plc gained 31kobo 

from N9.31 to N9.62. 

Total Nigeria Plc recorded 

biggest loss by N9.99, 

from N270 to N260.01; followed 

by Dangote Cement 

Plc which lost 99kobo, from 

N163 to N162.01. UBA Plc 

lost 23kobo, from N7.22 to 

N6.99; Cement Company 

of Northern Nigeria Plc 

lost 22kobo, from N4.83 to 

N4.61. Also, Dangote Flour 

Mills Plc dipped by 21kobo, 

from N4.34 to N4.13. 

The volume of stocks 

traded increased by 2.09percent, 

from 208.33million to 

212.69million, while the 

Oscar Onyema, NSE CEO 

total value of stocks traded 

decreased by 41.67percent, 

from N3.73billion to N2.181 

billion in 3,908 deals. 

The Financial Services 

sector led Tuesday activ- 

UPDC targets N1.75 billion from on-going Rights Issue 

Larry Ettah, chairman, 

UPDC plc. 

The UACN Property 

Development 

Company (UPDC) 

Plc has urged its 

shareholders to take up 

their Rights as the Company 

targets to raise about 

N1.75billion from on-going 

Rights Issue. Larry Ettah, 

chairman, UPDC Plc noted 

this while addressing shareholders 

at the company’s 

Annual General Meeting 

(AGM) held in Lagos. 

The Right offer at N3 per 

share 50 kobo share on the 

basis of 1 for 1 opened on 

May 18, 2017 and is expected 

to close on May 26, 2017. 

Ettah said the company is 

repositioning for improved 

performance and that the 

board has put in place adequate 

strategies to enable 

it deliver better value to all 

stakeholders. 

He noted that the Nigerian 

real estate sector is one of 

the significant drivers in the 

country’s non-oil economy. 

The sector accounted for 

7.5% of total GDP in 2015 

and grew by 2.1% year-onyear 

in the same year. However, 

it recorded negative 

GDP growth in 2016. Q1 

contracted by -4.69%, Q2 

by-5.27%, Q3 by -7.37% and 

Q4 by -9.27%. 

Ettah pointed out that Nigeria’s 

real estate market still 

presents substantial opportunities 

as well as a number 

of challenges for property 

investors and developers. 

Cumbersome and timeconsuming 

processes for 

land acquisition, insecure 

land title, infrastructure 

deficiency are few of the 

challenges of the sector. 

Existing concerns such as 

underdeveloped mortgage 

market, paucity of medium 

to long term infrastructure 

and financial institutions 

with reasonable interest 

rates are areas the Federal 

Government would need 

to pay particular attention 

to in the near future in order 

to move the sector forward. 

According to the Chairman, 

the Company posted 

revenue of N4.99b (Group 

N6.34bn) as against 2015 

revenue of N3.74b (Group 

N5.12bn). Loss before taxation 

(LBT) was (N2.02bn), 

Group N1.78bn against 

loss of N1.8bn and Group’s 

profit of N0.56mn in 2015. 

In view of this performance, 

the Board, regrettably will 

not be recommending the 

payment of dividend for 

the year under review. The 

recommendation was approved 

by shareholders 

during the meeting. 

Commenting on the 

operating environment, 

Ettah stated that housing 

demand in residential real 

estate has consistently exceeded 

supply. A key constraint 

in bridging the huge 

gap in housing delivery on 

the demand side is affordability. 

The reduced purchasing 

power of Nigerians 

and the inability of the lowincome 

earners to pay the 

prevailing exorbitant rents 

have led to increased demand 

for affordable houses. 

Consequently, developers 

in recent times have 

shifted focus to the middleincome 

segment of the market, 

where there appears to 

have been a significant level 

of income stabilization. The 

Federal Government and 

certain State Governments 

have embarked on initiatives 

regarding affordable 

homes and have specific 

agencies set-up towards 

that end. 

Growth in the retail development 

slowed down 

with vacancy rate of between 

33%-65% in the big 

Shopping Malls due to uncomplimentary 

foreign exchange 

regime. He stated 

that the increase in Monetary 

Policy Rate, recession, 

government policies and 

other un-abating economic 

ity chart with 161.20million 

shares exchanged for 

N1.06billion, followed by 

Oil and Gas with 12.10million 

shares traded for 

N694million. 

vagaries in 2016 had negative 

impact on the performance 

of the Company. 

Ettah noted that the cost 

of debt increased significantly. 

The Chairman stated 

that the company recorded 

losses upon completion 

of certain UPDC & 

Joint Venture projects. The 

losses are mainly due to 

high interest costs, effect 

of the 41 banned items 

on the CBN list as well 

as extended completion 

date, noting that the losses 

wiped out the Company’s 

investment in MetroCity 

JV in line with the tenets 

of International Financial 

Reporting Standards. 

Ettah noted that despite 

the challenging business 

terrain, the Company continued 

its ongoing project 

developments in 2016 and 

commenced new ones. 

Providing details on 

the company’s plan for the 

future, the Chairman said 

“A key strategic imperative 

for 2017 is to deleverage 

the Company. This is 

being achieved through 

deployment of an aggressive 

sales strategy, 1 for 1 

Rights Issue that is about 

to be launched, and divestment 

from low yielding 

investment properties. 

The fundamentals of the 

Company are strong; and 

the brand remains positioned 

to deliver value to 

all stakeholders.” 

FBN Holdings pays N7.18bn dividend 

FBN Holdings Plc 

has paid N7.18 

billion total dividend 

which translates 

to 20 kobo per for 

the financial year ended 

December. 

This follows the approval 

of the shareholders 

of the Holding Company 

(HoldCo) at its 5th annual 

general meeting held last 

week in Lagos. 

The 20 kobo dividend 

per share was against 

N5.38 billion or 15 kobo 

per share the financial 

institution paid in the 

corresponding year 2015. 

At the annual general 

meeting, the shareholders 

of FBN Holdings Plc 

received and adopted 

report of the directors; 

the company’s audited 

financial statements for 

the year ended December 

31, 2016 and report of the 

auditors and the audit 

committee thereon. 

In the year under 

review, FBN Holdings 

Plc, owners of First Bank 

Limited gross earnings 

increase by 15.7percent 

AXA Mansard pays dividend, assures 

shareholders of increasing RoI 

AXA Mansard Insurance 

Plc has 

paid its shareholders 

a dividend 

of 5kobo per share 

for the financial year ended 

December 31, 2016. 

This follows the approval 

of its shareholders at the 

company’s 25th annual 

general meeting (AGM) 

held last week in Lagos. 

At the meeting, the 

shareholders of the insurance 

company received 

and adopted the company’s 

audited financial 

statements for the year 

ended December 31, 

2016; reports of the directors; 

the auditors and the 

audit committee thereon. 

Olusola Adeeyo, 

chairman, AXA Mansard 

Insurance Plc who assured 

shareholders of the 

Board’s committing to increasing 

returns on their 

investments (RoI) said, 

“We are grateful for your 

support and the trust you 

have placed in the Board 

and management team 

through the years as we 

seek to position the company 

for future growth. 

Importantly, we also appreciate 

your faith in the 

AXA Mansard brand”. 

He assured the shareholders 

that AXA Mansard 

Insurance Plc will on 

its success path in 2017 

amid prognosis around 

to N581.8 billion, from 

N502.7billion in 2015. 

This record growth in 

full year earnings was 

driven by 2.6 percent 

growth in interest income 

to N405.3 billion 

and 68.9percent growth 

in non-interest income to 

N165.5 billion. 

Speaking at the annual 

general meeting, 

the shareholders stressed 

the need for the Holding 

Company to enhance 

profitability. 

Sunny Nwosu, National 

Coordinator Emeritus, 

Independent Shareholders 

Association of Nigeria 

(ISAN) commended the 

company for declaring dividend 

in spite of the harsh 

operating environment. 

Nona Awo, an independent 

shareholder 

expressed concern on 

the company’s huge unclaimed 

dividend. He also 

noted that the company 

needed to increase its 

customer deposit base 

and reduce non-performing 

loans. 

the macro economy. 

In the review year, AXA 

Mansard Insurance Plc, 

a member of the AXA 

Group reported Profit 

After Tax (PAT) of N2.63 

billion, which represents 

an increase of 59percent 

from N1.66 billion in 2015. 

Details of the results show 

Gross Written Premium 

of N20.71 billion, up 25 

percent from N16.57 billion 

in 2015. Net Premium 

Income of N10.95 billion, 

up 11 percent from N9.90 

billion in 2015. 

Investment and Other 

Income rose to N6.39 billion, 

up 39 percent from 

N4.60 billion in 2015. The 

Group Operating Expenses 

of N5.76 billion rose 

by 12 percent from N5.14 

billion in 2015. Profit before 

Tax (PBT) stood at 

N3.13 billion, up 54 percent 

from N2.02billion 

recorded in 2015. 

Highlights of the company’s 

statement of financial 

position also showed 

Total Assets grew by 7 

percent to N54.96 billion 

from N51.21billion as at 

December 2015; Insurance 

Liabilities rose by 12 

percent to N14.43 billion, 

from N12.92 billion as at 

December 2015; while 

shareholders’ funds stood 

at N17.41 billion, same as 

N17.41 billion recorded in 

December 2015.


A1 

BUSINESSDAY 

STATES COMPETITIVENESS & 

GOOD GOVERNANCE AWARDS 


C O N F E R E N C E S 

Award Categories 

Most Improved In Housing Development 

Most Improved In Educational Development 

Best State Promoting Made in Nigeria 

Goods/SME Development 

State With The Most Improved Security 

Most Improved State In ICT/Technology 

Best State In Sports Development 

Best State In Tourism 

Fastest Growing State Economy 

Ease Of Doing Business 

Transparency In Governance 

Most Improved In Rural And Urban 

Infrastructure Development 

Most Improved In Health Care Development 

Most Improved In Agricultural Development 

Governor Of The Year 

Transcorp Hilton, ABUJA Thursday 13th, July 6:00pm 

For further enquiries, call: 

ANTHONY - 0802 316 5438 | RERHE - 0909 392 5792 | JOHN - 0802 316 5436 

BASHIR - 0802 758 8990 | PATRICK - 0703 249 6069 | ADA - 0803 426 5411 

email: 

conferences@businessdayonline.com

A2 BUSINESSDAY C002D5556 

Jubilee Syringe sets to end regime 

of syringe importation in Nigeria 

IFEOMA OKEKE 

As an answer to Nigeria 

call for increased direct 

foreign investment in the 

country and also create 

jobs across the various cadres, 

Jubilee Syringe Manufacturing 

Company will in August this year 

commence full production of 

syringes in the country. 

Located on an 8000 square 

meter of land area in Onna Local 

Government of Akwa Ibom State, 

Jubilee Syringe which will be the 

first syringe manufacturing company 

in Nigeria, second only to 

South Africa in the whole of Africa, 

intends to kick off with a start up 

production capacity of between 

350 to 400 million syringes annually, 

with provision for expanding 

its production capacity to 1billion 

syringes by 2018. 

This estimated 350 - 400 million 

production lines Jubilee Syringe 

intend to start-up with in 

Nigeria, far overshoots that of 

South Africa, as the South African 

Company has a production capacity 

of only 93 million, making 

Jubilee Syringe, of course, upon 

completion and commencement 

of operations the largest syringe 

production company in the entire 

African continent. 

Owned by Onur Kumral, 

a Turkish-born business man 

and investor, whose investments 

spanned over 17 countries of 

the world, and having believe 

that Akwa Ibom has good development 

policies and adequate 

security, in addition to the overwhelming 

support provided by 

Governor Udom Emmanuel’s 

administration, he was spurred 

to confidently take the risk of 

IT experts chart way for 

data explosion in Africa 

Information Technology (IT) 

and telecommunications 

experts at the International 

Telecoms Week Conference 

in Chicago have discussed 

the dire need for Africa to grow 

its broadband data through increased 

investment. 

Experts from Google, Facebook, 

WIOCC, Liquid Telecom 

and Angola Cables who spoke 

on the theme “Achieving a Connected 

Continent: Leading The 

Data Explosion Across Africa”, 

said that the data explosion in 

the continent will need to be 

driven by further investment in 

local networks to reach more 

end users rather than new submarine 

cables, as most African 

submarine cable systems had 

the capability to deliver 100 GBPS 

wavelengths, however, Africa has 

not utilised near enough capacity 

to saturate those systems. 

According to the panelists, for 

broadband to become more pervasive, 

there is need for continued 

investment and innovative 

business models to aid the rapid 

deployment of access networks 

across the continent. 

Speaking on ways to improve 

broadband and data penetration, 

Nic Rudnick, CEO of Liquid 

Telecom, said that there is a need 

for the continent to go beyond 

mobile infrastructure. 

The CEO of the company 

which recently acquired South 

bringing such huge investment 

as Jubilee Syringe into the country. 

According to Kumral, even 

though the company is in Nigeria 

to make profit, its primary aim 

is not only to create jobs, but 

also to help in stabilising the nation’s 

economy and add value to 

Nigerians through training and 

retraining. 

His promise of adding value 

to Nigerians was realised when 

Jubilee Syringe recently sent 12 

Nigerians to Istanbul, Turkey, for 

advance training on key areas 

of Injection Machines. These 12 

Nigerians were trained on the 

operation of Injection Moulding 

Machines, Maintenance of 

Moulds and Quality Control. 

Kumral had stated in an interview 

recently that there is this situation 

in Nigeria right now where 

the country is losing huge dollars 

daily through importations and 

noted that there must be deliberate 

efforts by all to stop it. 

“If you are losing your dollars, 

you arrest the situation by simply 

stopping importations. And this 

arrest is possible only when you 

start producing and manufacturing 

inside your country. If you 

manufacture, you save huge dollars 

and use it for something else,” 

he advised. 

Zubeyir Gulabi, Jubilee Syringe 

managing director for Nigeria 

said while receiving the 12 

Nigerians who returned from 

Turkey, that they are the future 

of industrialization in the state 

and the nation. He observed that 

there are plans by Jubilee Syringe 

to send more Nigerians for training 

especially in the area of safety, 

packaging and printing. 

…Say there is need to go beyond mobile infrastructure 

JUMOKE AKIYODE 

African operator, Neotel for $429 

million said; “As consumers in 

Africa start to use the internet 

for content, TV and on-demand 

services, mobile will have its 

limitations, not just in terms of 

technology, but also in price. We 

need to look at other technologies 

to achieve cost effectiveness”. 

Uche Ofodile, Regional 

Head, Africa for Express Wifi at 

Facebook said that Facebook’s 

decision to invest in Uganda by 

working with Airtel to deploy fiber 

backhaul was informed by the 

demand for it, as well as favorable 

regulatory environments. 

The panelists’ assessment 

of data center growth in Africa 

also indicated that uptake is not 

as rapid as experienced in other 

parts of the world and that most 

of the content consumed in Africa 

is hosted in Europe. 

Data center operators, MainOne 

and Liquid shared their 

experience that initial demand 

on the continent has been driven 

by Enterprises and financial 

institutions as against other 

geographies where OTT players 

are the biggest data center players. 

“We do not see any of these 

OTTs hosting their services from 

Africa. We are not seeing meaningful 

investments coming into 

Africa (from OTT players) and 

with the sizeable population of 

the continent, we need to see 

them play a larger role in the 

African ecosystem”, the panel 

concluded. 

Q1 GDP shows Nigeria gradually exiting recession 


NEWS 

L-R: Ingo Herbert, Germany Consul General; Steve Ayorinde, commissioner for information & strategy, Lagos State, and Laurent Polonceux, 

France Consul General, after a reading of ROUTE 234, a travel anthology by Nigerian arts and culture journalists at the German Consulate. 

Bonga production hits 200,000 bpd after TAM 

.....as plans are underway to extend life span of FPSO 

OLUSOLA BELLO 

Production from the 

Bonga oil field, the 

nation’s first deepwater 

development 

now hits between 

180,000 barrels per day and 

200,000 barrels per day after 

the completion of the turnaround 

maintenance (TAM), 

which took about 36 day to 

complete. The Total Capacity 

of Bonga field is 225,000 

barrels per day. 

There are also indications 

that the Life span of the Floating 

Production Storage and 

Offloading (FPSO) facility 

may be extended by 10 years 

from 20 years if all the plans 

on ground work out well. 

The field has also in the last 

12 years delivered 702 million 

barrels and currently operates 

at 92 per cent availability. 

The volumes came from 

the Bonga main field and 

Bonga Phases 2 and 3 that 

unlocked the nearby Bonga 

North West field in August 

2014. It has capacity for 65,000 

barrels of oil equivalent per 

day. 

Lurking in pockets of Nigeria’s 

first quarter Gross 

Domestic Product (GDP) 

report released Tuesday, May 

23 by the National Bureau of 

Statistics (NBS) are signs of an 

economy cranking back to life. 

Bogged down by a sickly oil 

sector and slowing agricultural 

expansion, GDP shrank 0.5 percent 

in the first three months of 

the year. It is however the second 

successive quarter of milder contraction, 

following a 1.7 percent 

retreat in the final quarter of 2016. 

“That means we are gradually 

getting out of recession,” said 

Muda-Yusuf, director-general 

of the Lagos Chamber of Commerce 

and Industry (LCCI). 

“There are signs the economy 

will exit negative territory in the 

According to the Bayon 

Ojulari, Managing Director 

of the oil field operator, Shell 

Nigeria Exploration and Production 

Company (SNEPCo), 

who spoke after the completion 

of the TAM, said “after 

a major turnaround maintenance 

which was completed 

in April, one of the highpoints 

of the turnaround was the engagement 

of about 65 Nigerian 

contractors and subcontractor 

companies”. 

Over 1000 people were 

involved, spread across worksites 

and vessels in the exercise 

described as the biggest 

in scope in the 12-year history 

of the asset 

He said, “The exercise 

stimulated growth of support 

industries vital to deep-water 

asset management. It provided 

a wider benefit to the 

Nigerian economy by boosting 

demand for a range of goods 

and services including offshore 

vessels and platforms, 

materials, floating hotel and 

helicopters.” 

According to Ojulari, the 

turnaround witnessed an 

optimisation of resources 

..manufacturing grows for first time since Q4 2015 

LOLADE AKINMURELE & HEZRON ATUNDE 

second quarter,” Yusuf said by 

phone, hinging his outlook on 

increased dollar supply in the 

period, as well as initiatives to 

boost the ease of doing business. 

“The Central Bank Nigeria 

(CBN) upped dollar supply significantly 

in the second quarter, 

even as radical reforms boosted 

the ease of doing business. These 

should move the economy into 

positive territory in Q2,” Yusuf said. 

The CBN has sold more than 

$4 billion in the last four months 

to ease pressure on the naira, 

which has now firmed on the 

black market from a record low 

of N520 to the dollar prior to the 

interventions. 

The black market naira exchanged 

for N380 per dollar on 

Tuesday, according to Abokifx, 

which collates daily prices from 

traders. The official interbank rate 

and was safely completed 

within schedule. The exercise 

included statutory and regulatory 

checks and inspections; 

repairs and replacement of 

equipment; and upgrade of 

facilities. 

A critical success factor, 

according to Ojulari, was the 

collaboration by more than 10 

functions who benchmarked 

their contributions against a 

robust execution plan. Procuring 

materials from Original 

Equipment Manufacturers 

(OEMs) saved cost and 

ensured seamless delivery, 

and the project team sourced 

key equipment and carried 

out fabrications within Nigeria. 

This innovation, he said, 

marked a turning point in 

SNEPCo’s efforts to develop 

the capabilities of Nigerian 

companies in the provision 

of goods and services in deepwater 

oil and gas production. 

Ojulari expressed delight 

at the increasing number of 

women on the frontline, noting 

that more women were 

involved at every stage of the 

turnaround compared to any 

of the three previous exercises. 

has stagnated at N305 per dollar 

since the start of the year. 

Bayo Adeyemo, markets head 

and country treasurer at Citi Bank 

thinks the CBN deserves a pat on 

the back for the naira appreciation. 

Nigeria’s economy contracted 

last year, for the first time in 25 

years, after it took a beating from a 

slump in oil prices and militant attacks 

on pipelines, which caused 

production to fall to an almost 

three-decade low. 

Foreign-currency shortages 

fuelled by falling oil exports 

caused inflation to accelerate 

every month for more than a year 

until January. But the index has 

since slowed, while optimism for 

an economic rebound has grown. 

Inflation printed 17.2 percent in 

April, after slowing for the third 

consecutive month. 

Naira maintains 

gain as CBN keeps 

interest rate 

unchanged 

…External reserves 

declines to $30.6 

HOPE MOSES-ASHIKE 

The nation’s currency 

on Tuesday strengthened 

against the 

U S dollar across foreign 

exchange market segment 

after the Central Bank of 

Nigeria (CBN) kept Monetary 

Policy Rate (MPR) 

unchanged. 

Naira gained N0.25k to 

close at N383.31k per dollar 

at the investors and exporters 

window on Tuesday 

compared to N382.56k per 

dollar quoted on Monday 

according to data obtained 

from FMDQ. 

The local currency also 

gained marginally N0.05k 

at the inter-bank spot 

foreign exchange market. It 

closed at N305.40k per dollar 

as against N305.45k per 

dollar the level it was last 

week. At the black market, 

the naira remained stable 

closing at the rate of N380 

to the dollar. 

External reserves has 

declined by 1.04 percent 

to $30. 66 billion as at 

May 19, 2017 from $30.9 

billion stood as at May 5, 

2017, data from CBN has 

revealed. 

The CBN has since 

February 20 been intervening 

in the foreign exchange 

market by way of injecting 

dollar to meet demand for 

retail and wholesale as well 

as to close the huge gap 

between the official market 

and Bureau De Change 

(BDC) segment. 

The Monetary Policy 

Committee (MPC) yesterday 

at the meeting in Abuja 

emphasized the need to 

sustain and deepen the 

Bank’s foreign exchange 

management policies and 

measures in order to reap 

the benefits of the passthrough 

to consumer prices.


FT 

TIMES 

C002D5556 

BUSINESS DAY 

A3 

Blockchain consortium raises record 

$100m 

Page A5 

Driverless cars - The new gold rush 

Page A6 

In association with 

- 

FINANCIAL 

World Business Newspaper 

Nigeria’s ‘Chibok girls’ 

wait to return home 

after being rescued 

from Boko Haram 

MAGGIE FICK 

Joshua Andrew, a Nigerian 

pastor, was at home listening 

to the radioin Abuja 

when he heard miraculous 

news: the government had 

negotiated the release of 82 of 

the “ Chibok girls” kidnapped 

by Boko Haram three years ago. 

The pastor scrambled to turn 

on his television and called his 

wife and children. He soon identified 

his daughter Esther among 

the rows of young women wearing 

matching outfits. The cheers 

and shouts in the living room led 

neighbours to his door. 

“We said, ‘We are full of joy, 

we saw our daughter on that television,’” 

recalled Mr Andrew. As 

the man of the house, he added, 

he had to hold back his own 

tears as his wife Godiya wept 

with relief. 

Two weeks passed before Mr 

and Mrs Andrew were permitted 

to hold Esther in their arms, in a 

reunion at the weekend attended 

by parents and a scrum of cameramen. 

“Even I myself cried,” he 

admitted. The moment was brief. 

Esther and the other girls remain 

in state custody. 

Their continued detention - 

and the fact that politicians met 

the former captives before their 

families did - have cast a shadow 

over what should have been 

Police have identified the 

suicide bomber who 

killed 22 people, including 

children, in Monday 

night’s Manchester terrorist attack 

as Salman Abedi, a 22-yearold 

native of the northern English 

city. 

Public records seen by the 

Financial Times showed Abedi 

was born in Manchester and lived 

with his brother Ismail in one its 

southern neighbourhoods; his 

last listed address on UK voter 

rolls was raided by Manchester 

police yesterday. 

a success story for President 

Muhammadu Buhari’s administration. 

During his two years in office, 

the president has promised 

to rescue the nearly 300 teenage 

girls who were kidnapped 

at their boarding school in the 

north-eastern town of Chibok in 

2014. But most remain in Boko 

Haram’s hands. 

The government’s insistence 

on keeping the rescued girls in 

custody has fuelled speculation 

that officials suspect that 

they developed sympathy for 

their captors. Before seeing his 

daughter, Mr Andrew dismissed 

the notion that Esther and the 

other captives could possibly 

sympathise with the Islamists. 

“I’d like people to know that 

these victims have not been influenced 

by Satan, nothing has 

changed them. They have not 

been injected with anything that 

will harm people,” he said. After 

Saturday’s reunion, Mr Andrew’s 

daughter was taken back to a 

guarded facility and the pastor 

does not know when he will be 

allowed to see her again. 

Mausi Segun, Nigeria researcher 

at Human Rights Watch, 

says: “Authorities should clarify 

to families whether the rescued 

girls are being held in preventative 

detention or as criminal 

suspects.” 

Manchester man identified as 

bomber who killed 22 at concert 

SAM JONES, LEILA HADDOU 

& ANDREW BOUNDS 

The raid, in the city’s Fallowfield 

district, was one of three 

operations carried out by police 

across the south of the city 

yesterday as authorities tried 

to establish whether Abedi had 

been working alone or as part of 

a network. 

The attack was the most serious 

terrorism incident in the 

UK since the Islamist suicide 

bombings in London that hit the 

Underground network and a bus 

in 2005, killing 52 people. 

It comes after a spate of recent 

attacks, including in France, Belgium, 

Germany and Sweden, that 

have posed a deadly challenge to 

Continues on page A2 

President Muhammadu Buhari 

Trump vows to resolve Arab-Israeli conflict 

JOHN REED 

Donald Trump reaffirmed 

his commitment 

to resolving the 

Arab-Israeli conflict 

after meeting Palestinian president 

Mahmoud Abbas yesterday, 

but gave scant detail about how 

he planned to bring the parties 

to the table. 

In a speech heralded as the 

highlight of his visit, the US president 

also refrained from recognising 

Jerusalem as Israel’s capital 

or announcing a move of the US 

embassy to the city - two things 

Israelis had called for. Nor did he 

provide any details for achieving 

his promise to pursue Israeli- 

Palestinian peace. 

“I can tell you the Palestinians 

are ready to reach for peace,” 

Trump said in a speech at the 

Israel Museum in Jerusalem. “I 

know you have heard it before, 

and I am telling you again - that’s 

what I do - they are reaching for 

peace.” 

Mr Trump’s remarks came 

after he met Mr Abbas in Bethlehem, 

where the Palestinian leader 

made a pledge “to co-operate with 

you in order to make peace and 

forge a historic peace deal” and 

help the US fight terrorism. 

The US president was accompanied 

by his son-in-law Jared 

Kushner, who is advising him on 

efforts to reach a peace deal with 

Arab countries’ backing, and 

Jason Greenblatt, his main envoy 

for the region. Neither of them 

have made public remarks during 

the visit. 

In the speech, Trump refrained 

from criticising Israeli 

settlement building in occupied 

territories, which Palestinians and 

many countries see as a primary 

obstacle to peace. He also made 

no reference to the occupation, 

which will enter its 51st year next 

month with the anniversary of the 

Six Day War. 

The president did, however, build 

on the principal theme of the visit 

by saying he planned to work with 

Israel and Sunni Arab states to fight 

terrorism and Iran. He said he was 

determined to prevent the Islamic 

republic from obtaining a nuclear 

bomb. 

“Isis targets Jewish neighbourhoods, 

synagogues and storefronts 

and Iran’s leaders routinely call for 

Israel’s destruction,” Trump said, 

in a line that brought a standing 

ovation from listeners. “Not with 

Donald J Trump.” 

Iran has always insisted its nuclear 

activities are for peaceful civilian 

use. In 2015, Tehran signed an accord 

with the US and five other powers 

under which it agreed to reduce 

its nuclear activities in return for 

many sanctions being lifted. 

Israel and Gulf states viewed 

the deal as emboldening Iran and 

increasing Tehran’s threat to the 

region. Trump has also criticised the 

agreement as one of the “worst ever”. 

In his Jerusalem speech, Trump 

said it was a “false choice” to say the 

US must choose between Israel and 

Arab and Muslim nations. “That is 

completely wrong,” Trump said. “All 

decent people want to live in peace”. 

Later Trump visited Yad Vashem, 

the Holocaust monument and remembrance 

centre, where he laid 

a wreath and received a replica of 

a personal album that belonged to 

a victim who was murdered at the 

age of 16. 

The visit was a closely watched 

part of Trump’s itinerary among 

Israelis who were disturbed by 

allegations of anti-Semitism made 

against some of the president’s 

supporters and members of his 

administration.


A4 BUSINESS DAY 

C002D5556 

FT 

NATIONAL NEWS 


US files lawsuit against Fiat Chrysler alleging diesel emissions violations 

DAVID LYNCH 

The US has filed a suit against 

Fiat Chrysler, accusing the 

Italian- American carmaker 

of violating diesel emissions 

standards but stopping short of alleging 

it had intentionally designed its vehicles 

to cheat environmental testing. 

The US justice department had 

been in talks with Fiat to try and avoid 

the lawsuit, with the carmaker making 

a last-ditch effort to settle the case by 

proposing a fix for 104,000 dieselpowered 

vehicles in the US that failed 

to satisfy environmental regulators. 

The decision to move ahead with 

the suit is a setback for the carmaker, 

raising the prospect of large fines and 

penalties. But the charges allow Fiat 

to avoid the fate of European rival 

Volkswagen, which was accused by the 

justice department of developing software 

to intentionally cheat nitrogen 

oxide emissions tests. Fiat shares fell 

nearly 3 per cent on news of the suit. 

The allegations have been hanging 

over Fiat since January, when the US 

Environmental Protection Agency accused 

the company of violating emissions 

laws in its diesel vehicles. The 

charges were made public a day after 

VW agreed to pay a $4.3bn criminal 

fine for evading US pollution laws. Fiat 

said it was “disappointed” with the suit 

but would “defend itself vigorously”. 

In its settlement with Washington, 

VW acknowledged that “defeat 

devices” it used in its diesel vehicles 

allowed them to perform differently 

under test conditions than during 

normal driving. This enabled them to 

trick the government emissions testing 

meant to catch vehicles that emit 

excess pollutants. 

Although Fiat vehicles have also 

been accused of having “defeat devices”, 

sources close to the company 

insisted the designation was an umbrella 

term under US environmental 

law which could include less egregious 

conduct than that admitted by VW. 

“It does not mean [Fiat] did the same 

thing,” said one person close to the 

company. 

Manchester man identified... 

Continued from page A3 

western European governments 

struggling to contain the threat 

from Isis and other Islamists. 

The bomber detonated his 

device, loaded with metal objects, 

near one of the main exits of the 

21,000-seater Manchester Arena, 

the biggest indoor venue in the 

UK, as mostly young female fans 

were leaving a concert by US pop 

star Ariana Grande. The attack 

echoed the bloody assault on the 

Bataclan concert hall in Paris in 

November 2015. 

A friend of the family told the 

Financial Times that Abedi had a 

history of gang membership and 

had only recently turned to radical 

Islam. 

“We struggle to comprehend 

the warped and twisted mind that 

sees a room of young people as an 

opportunity for carnage,” Theresa 

May, the prime minister, said in 

a sombre statement outside 10 

Downing Street. 

Britain’s political parties suspended 

campaigning for the June 

8 general election in response to 

the killings. Donald Trump, US 

president, condemned the attack, 

saying such perpetrators were 

“evil losers in life”. 

“Terrorists must be driven from 

our society forever. This wicked 

ideology must be obliterated. 

Completely obliterated. Innocent 

life must be protected,” he said on 

a visit to Bethlehem for a meeting 

with Mahmoud Abbas, the Palestinian 

president. 

In France, the western country 

hardest hit by Islamist attacks 

recently, President Emmanuel 

Macron expressed “compassion 

and solidarity with the people of 

Britain”. His office said Mr Macron 

would “pursue with the government 

and with British forces the 

fight against terrorism”. 

Isis claimed responsibility for 

the attack, although the jihadi 

group has in the past taken credit 

for terror incidents with which 

it was later found to be unconnected. 

Dan Coats, US director of 

national intelligence, said Isis’s 

role had yet to be confirmed. 

Nitin Gadkari 

India takes on challenge of port expansion 

SIMON MUNDY 

Off a dusty stretch of coast 

under the scorching Gujarat 

sun, dredgers are 

reclaiming hundreds of 

hectares of land from the Arabian 

Sea in the latest challenge to India’s 

once-dominant state-owned ports: 

a private deepwater terminal that 

will handle 20m tonnes a year of 

everything from textiles to cement. 

Print article Add to basket 

Essar Ports, which is developing 

the Hazira site, is one of 

several companies to have spied an 

opportunity as government facilities 

struggle to keep pace with India’s 

booming international trade. The 

big 12 state-owned ports’ share of 

the country’s shipping by volume 

has fallen from 72 per cent to 55 per 

cent in less than a decade. 

The future of these marine gateways 

is crucial to the economy, 

the fastest-growing of any leading 

nation, with an annual growth rate 

above 7 per cent. To maintain that 

pace, India needs to handle ever 

larger volumes of trade. And if the 

government is to realise its hopes of 

boosting India’s status as an exporting 

power, it will need to narrow 

the logistical gap with rivals such 

as China. 

To some, the answer is a continued 

shift away from public ports. 

“Productivity and efficiency are 

much higher at the private ports,” 

says Subhas Das, the Hazira port’s 

chief executive. “None of the state 

ports are yet modern.” 

But Nitin Gadkari, the minister 

for road and maritime infrastructure, 

is fighting back against such 

criticism with a vast campaign to 

improve the state ports’ efficiency 

and scale that has earmarked Rs8tn 

($124bn) in spending over the next 

18 years. 

“It will be the biggest project in 

the history of the country,” Gadkari 

said in December of the Sagarmala 

scheme, which includes upgrades to 

the big 12 state ports, the construction 

of six new ones and improved 

ship-to-rail links. 

The government sees it as a main 

plank in its ambitious plans for 

infrastructure in India, which has 

already witnessed blistering growth 

in sea trade since the liberalisation 

of the 1990s. 

Container shipping volumes, 

which in 1991 amounted to just 

602,000 twenty foot equivalent units 

(TEUs), hit 13.2m last year. Given 

this was only about half that of South 

Korea, Malaysia or Japan, and one 

15th that of China, the government 

expects expansion to continue. 

Yet little detail has been given 

on funding for the Sagarmala programme. 

And the state’s performance 

in other industries gives 

grounds for scepticism about its ability 

to compete with the private sector. 

The state-owned flag carrier Air India 

has racked up eight annual losses in 

the past decade after losing share to 

more efficient private airlines. 

Nonetheless, the government’s 

focus on port improvement is 

prompting optimism for the likes of 

Cyril George, vice-chairman of the 

Port of Chennai. 

The port, one of India’s oldest, is 

working to boost efficiency through 

measures such as automated gates 

that allow trucks swifter passage - but 

it is still hampered by “legacy issues” 

including a large manpower surplus, 

Mr George warns. By comparison, 

he says, the private ports “enjoy a lot 

of freedom in all respects” - a gap he 

thinks will be closed by passage of a 

bill giving greater autonomy to state 

ports to invest and form partnerships 

with private companies. 

Greek bailout 

deal moves a 

step closer 

JIM BRUNSDEN 

Eurozone finance ministers 

and the International 

Monetary Fund are exploring 

a compromise plan for 

Greece’s bailout that would allow 

the country to receive much-needed 

funds this summer while delaying 

sensitive discussions on whether it 

will get debt relief. 

Diplomats said the proposal, put 

forward by the IMF, would involve 

the fund taking a formal decision to 

join Greece’s bailout, but with the 

proviso that it would not provide any 

money until the eurozone gave further 

details on how it was prepared 

to ease Athens’ debts. 

Supporters of the plan argue that 

it would deliver formal IMF backing 

for the Greek programme, which 

Germany has made a prerequisite for 

Athens to receive any further tranches 

of aid from its €86bn bailout. 

At the same time, the approach 

would buy time for politically sensitive 

talks about a debt relief package, 

which the IMF says is essential for 

Greece to recover. The approach 

won support from finance ministers, 

including Germany’s Wolfgang 

Schäuble, during seven hours of 

negotiations in Brussels on Monday 

evening. 

Although talks ended without 

agreement, diplomats expect the 

plan to form the basis of discussions 

when IMF officials and eurozone 

ministers regroup on June 15 to try 

to broker a deal. 

Greece’s need for money is pressing. 

It faces more than €7bn of debt 

repayments in July. 

The Washington-based fund had 

previously insisted it would decide to 

join the bailout only if the eurozone 

provided much more detail on the 

debt relief it would give. But people 

involved in the talks said the IMF’s 

plan to initially withhold its bailout 

loans would remove this urgency 

and allow talks on debt relief after 

Germany’s elections in September. 

ANYWHERE 

ANYHOW 

ANYTIME 

INTERNATIONAL FUNDS TRANSFER 

Those who take tomorrow get ahead by staying 

in charge of their transactions like never before. 

With our electronic funds transfer platform, 

you too can send money anywhere in the 

world quickly, safely, and conveniently. 


SECURE FAST AVAILABLE 

24/7


@ FINANCIAL TIMES LIMITED 2015 

Blockchain 

consortium raises 

record $100m 

A 

consortium of banks 

looking to build 

blockchains for 

modern finance has 

completed the largest 

fundraising to date for the 

emerging technology, raising 

more than $100m from about 

half its membership as well as 

technology group Intel. 

R3, the New York group, said 

yesterday it had secured $107m 

to develop a blockchain platform 

from 43 financial institutions, as 

well as Temasek, the Singaporean 

state investment company, 

and Intel Capital, the US tech 

group’s venture capital arm. 

The technology - an electronic 

ledger with records stored in 

“blocks” - aims to automate the 

complex networks of trust and 

verification on which modern 

finance sits, potentially cutting 

tens of billions of dollars of costs 

from the financial sector. 

But the seven-month fundraising 

has been marked by ten- 

PHILIP STAFFORD 

FINANCIAL TIMES 


sions among big banks assessing 

which blockchain projects they 

should back, as the two-yearold 

consortium’s membership 

swelled from an original nine to 

more than 80. 

Some early members, such as 

Goldman Sachs, JPMorgan and 

Morgan Stanley balked at being 

asked to invest and are planning 

to withdraw from the venture. 

Some have backed rival blockchain 

projects such as Digital 

Asset Holdings and Axoni. 

However, many others, including 

Barclays, Bank of America 

Merrill Lynch, Credit Suisse, 

UBS and HSBC participated in 

the fundraising. 

The capital raising took place 

in three stages, with the first two 

open to members of the R3 consortium 

only, plus a dispensation 

for Intel to participate. 

A final tranche, also open to 

non-members, will begin this 

year. Although R3 did not put a 

figure on it, a person involved 

in the financing said it would be 

around $50m. 

LAURA NOONAN 

Commodities and foreign 

exchange traders endured 

their worst first 

quarter in more than a 

decade, as they were left out of 

a double-digit surge in revenues 

across the world’s biggest investment 

banks. 

Revenues from commodities 

fell 29 per cent year on year at 

the top 12 investment banks and 

revenues from trading currencies 

dropped 25 per cent amid lower 

volatility and volumes, according 

to data from industry monitor Coalition. 

In both cases, total revenue 

was at the lowest level since 2006. 

However, overall investment 

banking revenue at the 12 banks 

jumped 14 per cent to $42.4bn, 

powered by rises in other parts 

of fixed income trading and in 

fees for advising clients on raising 

debt and equity. Nevertheless, 

the combined total remains well 

below revenue levels earlier in 

the decade. 

C002D5556 

The Coalition data help explain 

why Goldman Sachs failed 

to share in a rebound enjoyed by 

rivals; it cited commodities weakness 

as one reason it missed out. 

Regulatory changes have prompted 

most banks to scale back their 

commodity trading units, leaving 

Goldman and Morgan Stanley 

with the largest remaining exposure, 

said JPMorgan analyst Kian 

Abouhossein. 

He added that he did not expect 

revenues from commodities or 

foreign exchange trading to pick 

up in the second quarter. Trading 

revenue in both activities is dependent 

on the level of volatility in 

the market, which inspires clients 

to trade more and allows banks to 

earn higher margins. 

“Volatility has further declined 

on a quarter on quarter basis, 

there are not a lot of trigger events 

in the market which would lead to 

an increase [in volatility]”, he said. 

The UK’s Brexit vote delivered a 

surge in foreign exchange volatility 

in the second quarter of 2016, as 

BUSINESS DAY 


Commodities and forex trade dives 

A5 

did the US presidential campaign 

in the second half of the year. 

Cash equities traders also had 

a tough start to the year, with revenue 

down 18 per cent according 

to Coalition data, but that market 

has improved. “We have really 

seen a change in direction,” said 

Abouhossein. “Cash equities are 

suddenly performing better than 

equity derivatives, with transaction 

volumes up significantly in 

the EU. Markets are higher as well 

which helps in Europe.” 

George Kuznetsov, Coalition’s 

head of research, said one of 

the biggest surprises of the first 

quarter was a boost in revenues 

that banks earned from advising 

clients on IPOs and other equity 

raising activities. Equity capital 

markets were up 97 per cent in the 

first quarter. 

Abouhossein said new data 

from Dealogic suggests that the 

trend is continuing in the second 

quarter. ‘Volatility has further 

declined on a quarter on quarter 

basis’ 

Eurozone growth boosts equities 

but single currency’s gains recede 

DAVE SHELLOCK 

The euro struggled to hold 

on to early gains against the 

dollar and sterling even as 

the latest batch of economic 

reports confirmed the eurozone’s 

strong growth momentum of recent 

months. 

European equities also had a 

broadly positive session while on 

Wall Street, the S&P 500 continued 

to inch back towards its recent 

record high. Oil prices maintained 

their firm trend ahead of this week’s 

Opec meeting in Vienna but the 

mildly “risk-on” tone of the markets 

left gold and US Treasuries slightly 

lower. 

Eurozone economic data provided 

an early focus for the markets, 

with the region’s “flash” composite 

purchasing managers’ index holding 

steady at a six-year high of 56.8 

this month. 

“This indicates that growth in 

the second quarter continues to be 

strong and could even surprise on 

the upside on these strong figures,” 

said Bert Colijn, senior eurozone 

economist at ING. 

“Businesses continue to indicate 

that job growth is picking up 

speed and that backlogs of work are 

reaching new highs. This means that 

domestic demand continues to drive 

the strong growth in the eurozone.” 

Further positive signals came 

from Germany, where first-quarter 

GDP growth was confirmed at 0.6 

per cent quarter on quarter and 1.7 

per cent year on year. Meanwhile, the 

German Ifo business climate index 

in May rose to a record high. 

“Germany has become a powerful 

two-engine economy benefiting 

from strong domestic demand and 

surging global trade,” said Andreas 

Rees, chief German economist at 

UniCredit. 

“We do not believe in a sentiment 

bubble but think that the latest 

round of renewed optimism among 

companies is for real.” 

The markets appeared to agree, 

with the euro touching a fresh sixmonth 

high against the dollar of 

$1.1267 in early trade before retreating 

to $1.1222, down 0.1 per cent on 

the day. Just seven sessions ago, the 

single currency was trading below 

$1.09. 

The euro was 0.2 per cent weaker 

against the pound at £0.8625, having 

earlier hit a two-month peak of 

£0.8675. 

“Euro/dollar has finally faltered 

a bit today despite supportive European 

data, a possible sign that 

the steepness of the recent action 

has brought the pair into temporarily 

overbought territory,” said John 

Hardy, head of forex strategy at Saxo 

Bank. 

Kazuo Hirai 

Sony chief outlines plan to capitalise on growth 

KANA INAGAKI 

With Sony closing in on 

its highest profit in two 

decades, Kazuo Hirai, 

chief executive, says he 

will aim to succeed where his predecessors 

have failed by maintaining 

the success. 

Analysts say Mr Hirai faces a 

challenge as he tries to position Sony 

to capture new markets for autonomous 

cars, robotics and the internet 

of things while ensuring volatility in 

its film and electronics units do not 

jeopardise recovery. 

Investors have so far backed Mr 

Hirai’s turnround strategy, with 

shares in the Japanese entertainment 

and electronics group rising 36 per 

cent in the past 12 months. In the final 

year of its three-year business plan 

through to March 2018, the company 

expects operating profit to hit ¥500bn 

($4.5bn), which would mark its best 

income performance since the 1997- 

98 fiscal year. 

“The operating profit target of 

¥500bn for fiscal 2017 will mark our 

highest level in 20 years, but not 

once have we been able to sustain 

this profit level over several years in 

Sony’s 71-year history,” Mr Hirai told 

a news conference in Tokyo yesterday. 

“For Sony to be able to continue 

generating high profits, each of our 

group’s divisions needs to strengthen 

their efforts to build new businesses 

rather than maintaining the status 

quo,” he said. 

Despite stemming losses from 

its television, smartphone and other 

electronics businesses, however, 

Sony has yet to restore its ailing film 

studio after a dismal run at the box 

office which has left it trailing its Hollywood 

rivals. 

This month Mr Hirai named Tony 

Vinciquerra, a former 21st Century 

Fox executive, as chairman and chief 

executive of Sony Pictures Entertainment, 

which includes Sony’s film studio, 

television production business 

and global television networks unit. 

The film business will aim to 

achieve an operating profit margin 

of 3.8 per cent in the current financial 

year, well below the 7-8 per cent margin 

Sony had originally targeted when 

it released its three-year plan in 2015. 

To rebuild its film business, Mr 

Hirai said the company would aim 

to make better use of its intellectual 

property portfolio including Spider- 

Man, which will be released this 

summer as a co-production with 

Walt Disney’s Marvel Studios, while 

continuing with cuts in production 

and marketing costs.

C002D5556 



FT 

ANALYSIS 


Driverless cars - The new gold rush 

LESLIE HOOK & TIM BRADSHAW 

Money is flooding 

into autonomous 

car start-ups in Silicon 

Valley, along 

with huge amounts 

of hype. For the sector’s evangelists, 

questions about sales, regulations 

and business models are missing 

the point. 

It is a breezy spring day in Willows, 

California, and a motley collection 

of cars is preparing to take on the 

winding course at the Thunderhill 

Raceway. But unlike most auto races, 

this isn’t a test of the skill of the person 

sitting behind the wheel. These 

cars are driving themselves. 

The entrants in the Self Racing 

Cars challenge range from navigation 

technology start-ups and 

component suppliers to budding 

software companies and students. In 

a narrow sense, the race is a failure: 

after two days of practice, most teams 

never manage to make it around the 

course fully autonomously. 

Still, there is electricity in the air. 

Programmers buzzing from energy 

drinks make tweaks to their codes 

while investors stroll in the parking 

lot to check on their companies. Selfdriving 

cars are the hottest thing in 

Silicon Valley, and this race is a way 

for the smallest, boldest start-ups to 

show their stuff. 

“You are seeing a Cambrian 

explosion of different possibilities, 

as each different start-up explores 

a slightly different space or path 

through the problem,” says organiser 

and investor Joshua Schachter, 

boldly comparing the proliferation 

of driverless car start-ups with the 

appearance of complex animals 

on earth. 

Last year there were just three entrants 

in the race. This year, there are 

10 - just one indicator of the youth 

and the rapid growth of the driverless 

sector. Entrepreneurs and investors 

are rushing to cash in on a trend that 

has already made several fortunes, 

and autonomous vehicle start-ups 

seem to pop up almost every day. 

Investment in the sector reached an 

all-time high of $750m in the first 

quarter of this year, according to CB 

Insights. 

But even enthusiasts are beginning 

to worry that the sector might 

be overhyped. Carl Bass, one of the 

competitors in last month’s race and 

a Silicon Valley veteran, is among 

them. 

“There is such a crazy thing going 

on in the market right now around 

autonomous vehicles,” he says as he 

hops into his self-driving go-kart. “It 

is kind of like if you can spell ‘selfdriving’ 

you can sell it for a billion 

dollars.” 

Yet it is not just Silicon Valley 

money pouring in. The world’s top 

automakers such as Ford and General 

Motors have joined Google’s 

parent Alphabet, Uber and other 

tech companies in funding research 

for self-driving technology. 

For the automakers, autonomous 

vehicles pose an existential threat. 

Instead of owning cars, consumers 

in the driverless age will simply 

nthony Levandowski, a former Google engineer. 

summon a robotic transportation 

service to their door. One venture 

capitalist says auto executives have 

come to him saying they know they 

are “screwed”, but just want to know 

when it will happen. 

This desperation has prompted 

a string of big acquisitions, which 

in turn has fuelled the hopes of the 

fortune-seekers in Silicon Valley. 

Last year GM paid $1bn for Cruise, a 

self-driving car start-up, while Uber 

paid $680m for Otto, an autonomous 

trucking company that was 

less than a year old. In March Intel 

spent $15bn to buy Israel’s Mobileye, 

which makes self-driving sensors 

and software. 

Rise of the ‘acqui-hire’ 

As in past tech hype cycles, the 

business model for driverless cars 

is not clear, nor is the timeline for 

how long it could take the market to 

develop. At the moment, driverless 

cars have nearly mastered highway 

driving but still struggle in complex 

urban environments, and there are 

huge legal and regulatory questions 

to be worked out. 

But such details do little to diminish 

the promise of the technology, 

say entrepreneurs and investors in 

the sector. “This is going to be earthshattering 

for the [transportation] 

industry,” says Sebastian Thrun, one 

of the pioneers of self-driving cars 

at Google. 

“Transportation is a multitrillion 

dollar industry. I would argue that, 

given the potential of this technology, 

we are under-hyping it.” 

Other driverless tech evangelists 

echo this view. “This is almost like 

something that should be a mission 

of the human species, instead of 

a company,” says James Wu, chief 

executive of mapping start-up Deep- 

Map. “It can benefit everybody and 

save lives.” 

In the near term, one of the biggest 

challenges for the sector is a 

severe talent shortage. People with 

expertise are in high demand, giving 

them extraordinary leverage. Instead 

of taking a job with a salary, they 

launch start-ups, then sell out to a 

company that wants to hire them. 

This lucrative route has come to be 

known as the “acqui-hire”. 

The purchase prices of recent 

acquisitions work out to “roughly 

a $10m price tag per person,” says 

Thrun, who is often referred to as the 

godfather of self-driving cars. “It is a 

lot of money.” 

He hopes the price tag will fall as 

more engineers gain the necessary 

skills, noting that the self-driving car 

seminar he co-teaches at Udacity has 

had more than 25,000 applicants. 

The most controversial acqui-hire 

was when Uber snatched up a small 

trucking start-up, Otto, founded by 

Anthony Levandowski, a former 

Google engineer. 

Levandowski was an early member 

of Google’s self-driving team, now 

known as Waymo, earning more than 

$120m in bonuses for his work. 

But outside Waymo he was worth 

even more. Levandowski started 

discussions with Uber before leaving 

Waymo; when he founded Otto, 

it was purchased by Uber for $680m 

in equity in just six months. (The 

events that surround Levandowski’s 

departure are the subject of a lawsuit, 

which alleges that Uber infringed on 

Waymo patents and stole trade secrets. 

Uber has denied wrongdoing). 

With headline deals like these, investors 

such as Amy Gu, a partner at 

venture capital firm Hemi Ventures, 

fear that the sector may be attracting 

the wrong type of entrepreneur. “I 

think a lot of people are attracted to 

the industry purely by the capital that 

is flowing in, instead of by their desire 

to figure out this problem,” she says. 

While she is still investing in 

autonomous start-ups, she says 

she seeks companies that have a 

revenue model rather than just an 

exit strategy. 

Self-driving engineers say the 

frenzy has complicated life for them 

too - and poses risks in terms of safety 

and reputation. US regulators have 

so far been fairly permissive about 

testing autonomous vehicles, but 

many worry that one terrible accident 

by an overambitious start-up 

would quickly change the environment. 

Testing of autonomous vehicles 

is already legal in more than a 

dozen states, and federal guidelines 

were issued last year. 

Some of these start-ups operate 

in a kind of paranoid secrecy, so that 

their competitors do not know what 

they are doing, or even who works 

for them. Zoox, based in Menlo Park 

in the San Francisco Bay area, has 

raised hundreds of millions of dollars 

in venture funding without ever 

showing its technology or its “robo 

taxi” design in public. 

David Liu, founder of self-driving 

start-up PlusAI, says he has seen rivals 

try to draw new employees with 

the promise of a quick acquisition. 

“You have a couple of guys who 

worked in Tesla or Apple or Google 

before, they start a company and 

expect to be sold in six months,” he 

explains. This mindset is often accompanied 

by unfounded marketing 

claims that, he worries, could 

damage the credibility of the entire 

industry. 

Tell it to the Teamsters 

There is no clear timeline over 

how soon autonomous vehicles will 

become widely available. Mr Liu 

expects it will take five to 10 years 

for commercial trucking to become 

automated but 30 to 50 years for 

individual passenger cars, with 

“robo-taxis” happening somewhere 

in between, perhaps in 15 years. 

Automobiles are a heavily regulated 

industry, and carmakers in 

Detroit often speak a different language 

to entrepreneurs in Silicon 

Valley. Established carmakers are 

terrified of missing out, but also 

afraid of damaging their brands by 

moving too quickly. Start-ups, in 

turn, can be overly dismissive of the 

carmakers’ expertise. A widespread 

assumption is that as autonomous 

vehicles become accepted, people 

will stop buying cars altogether and 

instead use autonomous transportation 

fleets that they can summon by 

smartphone. 

In the tech world, there are three 

main contenders working on services 

like these: Waymo, Uber and 

Tesla. Tesla has already been pushing 

the boundaries with intelligent 

driving assistance in its cars. Waymo 

and Uber are testing robo-taxis, albeit 

with a human still sitting in the 

driver’s seat. 

It is unclear where the clutch of 

new autonomous vehicle start-ups 

will fit in. With no path to the consumer, 

most are not able to generate 

revenue, and some are struggling. 

Several engineers specialising in 

artificial intelligence, an area that is 

core to autonomous driving, told the 

Financial Times they had recently left 

the sector because of doubts about 

its viability. 

“In the actual gold rush, you knew 

there was gold out there somewhere, 

and people were able to mine it,” 

says Josh Hartung, chief executive of 

Poly-Sync, which makes software for 

autonomous vehicles. 

In the autonomous gold rush, 

it’s less obvious whether there is 

any gold there, he says. “There is 

effectively zero revenue that is being 

produced by this industry,” he 

points out. “You’ve got this massive, 

multi-billion-dollar science project, 

that’s basically on VC life support, 

until such a time as somebody ships 

and makes money.”


C002D5556 

BUSINESS DAY 

A7 

China nearly doubles tax on some 

sugar imports to 95% 

LUCY CRAYMER 

Read Ambitiously 

OPEC’s Foil: It can’t drain enough stored oil 

to siphon off over 300 million barrels 

GEORGI KANTCHEV, SARAH MCFARLANE & 

of crude oil from OECD stocks, which 

BENOIT FAUCON 

reached record highs of over 3 billion 

barrels last year. 

OPEC is likely to extend and 

But OECD stocks continued increasing 

in early 2017 and fell in March 

perhaps even deepen its 

production cuts on Thursday 

for one main reason: It 

to the International Energy Agency, a 

by just 32 million barrels, according 

has failed to drain superhigh levels of 

global adviser to oil-consuming places 

oil in storage enough to raise prices 

such as the U.S., India and Europe. 

significantly. 

Even if the OPEC and non-OPEC cuts 

On Sunday, Khalid al-Falih, energy 

are extended into the second half of 

minister for the Organization of the 

2017, stocks won’t draw down to the 

Petroleum Exporting Countries’ top 

five-year average this year, the IEA said. 

producer, Saudi Arabia, said OPEC and 

An OPEC official said the group’s 

its production-cutting allies need to 

plan was beginning to work and merely 

keep holding back output for another 

needed more time. 

nine months. The group’s top leaders 

“Stocks are now coming down,” the 

meet in Vienna on Thursday to make 

maneuver by OPEC,” said Antoine of the $60 a barrel target that Saudi official said. 

a decision. 

Halff, senior researcher at Columbia Arabia wants. 

The official said OPEC was also 

“We are all ready to consider other 

University’s Center on Global Energy OPEC leaders say they want to concerned about high inventories in 

creative suggestions that may emerge 

Policy. “By choosing a storage target, reduce storage levels in the Organization 

for Economic Cooperation and nomic crisis depressed demand and 

2008 and 2009, when the global eco- 

to between now and May 25,” Mr. Falih 

they set themselves up for failure.” 

told reporters in Riyadh. 

Almost six months after OPEC’s 13 Development—a club of industrialized prices, sending storage levels higher. 

OPEC’s predicament underscores 

members and 11 other heavyweight countries like the U.S.—to a five-year Storage levels eventually fell, and prices 

the powerful role global oil inventories 

producers pledged to cut around 2% of average. About 550 million barrels rose, in 2009 as the crisis abated and oil 

now play, after years of being a technical 

detail that some traders ignored. 

global oil supply, stored crude has only of crude and oil products have been demand growth returned. 

recently begun falling and remains at added to the world’s stocks since OPEC focus on storage levels came 

With more data available than ever, oil 

historically high levels. Oil prices were 2014, when prices began crashing, after the cartel was humbled by U.S. 

storage has joined shale production as 

up almost 1% at $51.12 a barrel on said Christopher Bake, a member of shale production’s ability to withstand 

a symbol of a global glut of crude that 

Monday but remain below the levels the executive committee at the world’s low prices. Now the group has found 

has knocked OPEC on its heels. 

reached in the days after the production 

cut’s announcement and short OPEC leaders have said they want is also 

largest oil trader Vitol Group. 

that its power to flush oil out of storage 

“The production deal was a risky 

limited. 

Beijing is nearly doubling 

its tax on some imported 

sugar—further weighing on 

one of the worst-performing 

commodities of 2017. 

Saying that an investigation had 

found that imports have seriously 

damaged China’s sugar industry, the 

Ministry of Commerce said the tax on 

imports beyond the first 1.95 million 

tons a year will be raised to 95% from 

the current 50%, effective immediately. 

After a year, the rate will fall to 90%; 

after two years, to 85%. The tax on the 

first 1.95 million tons will remain 15%. 

China is the world’s largest sugar 

importer. Combined official and illegal 

imports rose 60% in the three years 

through Sept. 30, the U.S. Department 

of Agriculture estimates. Official imports 

for the current crop year, ending 

Sept. 30, were projected to reach 3.5 

million tons. 

Sugar prices in China, whose production 

is barely half of consumption, 

are more than double the global 

price—making it profitable to import 

even with a 50% tariff. But the tax 

increase “is going to disincentivize imports,” 

said Charles Clack, a sugar analyst 

at Rabobank, making importing 

sugar a lot less competitive compared 

with growing domestically. Sugar production 

in China is less mechanized, 

and hence more expensive, than in 

much of the world. 

Chinese imports of the animal feed 

dried distillers grains fell by half in 

2016, after Beijing imposed new tariffs 

following a dumping investigation. 

It is a testy time for international 

trade. China’s announcement of a 

sugar investigation last September 

came barely a week after the U.S. 

challenged China at the World Trade 

Organization over its support program 

for wheat, rice and corn growers. There 

is a longstanding dispute between the 

U.S. and Mexico over whether Mexico 

dumps subsidized sugar in the U.S. 

market. 

Growing Chinese demand for 

foreign sugar—primarily from Brazil, 

the world’s biggest producer—has 

become a major price driver in recent 

years. In the year ended Sept. 30, global 

prices surged 67% partly due to a sharp 

rise in illegal imports to China from 

Myanmar, which tightened global 

supplies. 

Nokia and apple move from courtroom 

foes to business partners 

DOMINIC CHOPPING 

Nokia Corp. NOK 0.49% 

and Apple Inc. AAPL 

0.61% have settled longrunning 

intellectual 

property disputes and agreed to a 

multiyear patent license, moving 

from courtroom foes to business 

partners. 

Financial details of the deal 

weren’t disclosed, but Nokia 

will receive an upfront cash payment 

from Apple, with additional 

revenue during the term of the 

agreement. 

The companies said Tuesday 

that Nokia will provide certain 

network infrastructure products 

and services to Apple while Apple 

will resume carrying Nokia digital 

health products in Apple retail and 

online stores. They will also jointly 

explore future collaboration in 

digital health initiatives. 

“This is a meaningful agreement 

between Nokia and Apple,” 

said Maria Varsellona, chief legal 

officer at Nokia, responsible for 

Nokia’s patent licensing business. 

“It moves our relationship with 

Apple from being adversaries in 

court to business partners working 

for the benefit of our customers.” 

Shares in Nokia rose nearly 6% 

in early trading. 

At the end of last year Nokia 

confirmed it had filed actions in 

11 countries in total, saying Apple 

violated 40 of its patents covering 

technologies such as display, 

user interface, software, antenna, 

chipsets and video coding. 

At the same time, Apple filed a 

suit in the U.S. District Court for 

the Northern District of California, 

arguing that Nokia excluded some 

patents from that agreement and 

transferred them to third-party 

companies “to be used for extorting 

excessive royalties” from 

Apple. It asked the court to award 

damages and rule that Nokia 

breached its contract. 

Bundesbank head says ECB 

needs to be ready to rein 

in stimulus 

TOM FAIRLESS 

The European Central Bank 

shouldn’t wait too long before 

withdrawing its large 

monetary stimulus, German 

central-bank president Jens Weidmann 

warned on Monday, wading 

into a debate over how quickly the 

ECB should signal a policy shift. 

Pressure has been building in 

Northern Europe for a policy change 

from Frankfurt as the region’s economy 

picks up. Eurozone inflation 

recently jumped to 1.9%, within the 

ECB’s target range, after languishing 

close to zero for years. 

But top ECB officials have yet 

to signal they are ready to change 

course and start winding down 

their €60 billion-a-month bondpurchase 

program, known as quantitative 

easing or QE. ECB President 

Mario Draghi says the topic hasn’t 

even been discussed by the bank’s 

25-member governing council. 

Speaking in the German city of 

Bochum, Mr. Weidmann argued 

that the ECB’s easy-money policies 

are currently appropriate because 

underlying inflation in the 19-nation 

eurozone—excluding volatile food 

and energy prices—remains weak. 

If the region’s economic recovery 

continues, however, the ECB “will 

move closer toward normalizing” 

its policy mix, the Bundesbank 

president said. 

“It’s important that the central 

bank tightens policy again when 

that’s required for controlling inflation,” 

Mr. Weidmann said. 

The Bundesbank president has 

been the most outspoken internal 

critic of the ECB’s massive bondpurchase 

program, which is aimed 

at supporting growth and inflation in 

the currency bloc. He reiterated that 

criticism on Monday, arguing that 

bond purchases blur the boundary 

between fiscal and monetary policy. 

In particular, the ECB shouldn’t 

delay changing its policy mix because 

governments want to keep 

their borrowing costs low, he said. 

Still, Mr. Weidmann argued it 

was “indisputable” that the ECB’s 

easy-money policies are currently 

appropriate, even if there are different 

opinions about the right level of 

stimulus and the choice of instruments. 

Over the long term, though, easymoney 

policies generate risks for 

the stability of the financial system 

by undermining the profitability 

of banks and potentially creating 

financial bubbles, he warned.



C002D5556 

Read Ambitiously 

Why Bitcoin is surging, 

again, up 130% this year 

Trump’s budget seeks cuts to 

taxes, safety-net programs 

PETER NICHOLAS, KATE DAVIDSON & NICK TIMIRAOS 

President Donald Trump 

on Tuesday will propose 

a plan he says will balance 

the federal budget 

in a decade on the strength of 

substantially faster economic 

growth and cuts to taxes and government 

safety-net programs. 

Programs that would see 

dramatic cuts include Medicaid, 

food stamps, disability benefits, 

welfare and student loans. The 

White House says the planned 

tax cuts can generate more revenue 

for the government rather 

than reduce it. 

Mr. Trump’s budget proposal—the 

clearest window yet into 

the new president’s expectations 

and priorities—now goes 

to Congress, which will decide 

whether to turn the vision into 

Why European companies 

could really miss London 

PAUL J. DAVIES 

Most industries need 

access to raw materials: 

In finance 

and markets that 

raw material is savings. 

This simple observation is 

often overlooked, but it is a major 

reason why the U.S. has the biggest 

and most active capital market in 

the world, and why Brexit could 

make it harder for eurozone companies 

to get financing. 

European policy makers are 

well aware they need more financial 

integration as they prepare 

to wave goodbye to the U.K. 

as a member of the European 

Union. The eurozone still doesn’t 

have a seamless banking union 

reality. It is sure to face a difficult 

road on Capitol Hill, despite Republican 

control, given competing 

factions within the GOP and 

the near certainty of blowback 

from Democrats. 

“It’ll face a tough sled over 

here,” Rep. Hal Rogers (R., Ky.), 

a former chairman of the House 

Appropriations Committee, said 

of the Trump budget. 

Budget director Mick Mulvaney, 

briefing reporters on 

Monday, described how Mr. 

Trump arrived at the blueprint, 

personally going over proposed 

cuts line by line and delivering a 

verdict: “Yes” or “No.” 

Mr. Trump himself won’t 

be on hand to sell the plan in 

Washington. He is on his maiden 

overseas trip as president, traveling 

through the Middle East and 

Europe. 

or single capital market. 

But this is only half the story: 

Europe needs to change its 

savings habits, too. The total 

amount of the most readily available 

savings for companies and 

governments to tap in eurozone 

capital markets amounts to less 

than 150% of the bloc’s annual 

economic output. That counts 

all the money in eurozone pensions, 

insurance companies 

and investment funds. The total 

drops to less than 120% of GDP if 

you exclude most assets of funds 

in Ireland and Luxembourg, 

which are popular places to 

register international investment 

funds that take money from the 

rest of the world and invest it 

outside Europe. 

PAUL VIGNA 

The price of bitcoin 

surged over the weekend 

and into Monday 

morning as a new 

wave of speculative 

investment drove up prices. 

Bitcoin traded above $2,200 

on Monday, according to the 

news and research website Coin- 

Desk. That was up about 9% on 

the day and more than 15% from 

Friday’s closing price of $1,913, 

which itself was a fresh high. 

Bitcoin is up more than 130% 

this year alone, and about 397% 

from one year ago. 

The market for the nearly 

decade-old cryptocurrency is 

Greek Bonds would be a great investment, if anyone actually traded them 

JON SINDREU 

Greek debt has been a 

great investment this 

year—in theory. 

The reality is that almost 

nobody trades it, even with 

yields at a three-year low, so actually 

making significant money is 

all but impossible. The tiny volumes 

are also a sign that Athens 

has a long road ahead before it 

can borrow from investors again. 

On Tuesday, yields on 10-year 

Greek government debt rose to 

5.732% from 5.549% the previous 

day, according to Tradeweb, and 

comes after eurozone finance 

ministers failed to agree on the 

release of another tranche of bailout 

cash that Greece needs to keep 

volatile and opaque. But several 

trends are underpinning 

the recent rise, including the 

perception of increased geopolitical 

risk and new buying from 

Japanese investors. 

A new surge of speculative 

investment in virtual currencies 

in general is also popping up 

owing to new fundraising efforts 

called token sales, or initial coin 

offerings. Startups are building 

bitcoin-like coins into their 

products, and offering them to 

the public ahead of a product 

launch. Most are being built on 

an alternative cryptoplatform 

called Ethereum. Firms raised 

nearly $30 million through the 

first two weeks of May alone. 

Another factor is Asia, and 

specifically Japan, where bitcoin 

just came under the nation’s 

regulatory umbrella this spring, 

sparking a surge of trading from 

the county. “The Japanese have 

caught the bitcoin bug,” said 

Charles Hayter of the research 

firm Crypto Compare. 

It isn’t clear why Japanese 

investors would be diversifying 

their holdings into bitcoin at the 

moment, though the country has 

a contingent of investors open to 

high-tech investments. 

While bitcoin moved above 

$2,100 in the U.S., it was trading 

at a higher price in yen 

terms, Mr. Hayter said. That 

gap sparked a frenzied arbitrage 

trade. Mr. Hayter warned, 

however, that, without fresh 

fundamentals supporting bitcoin, 

“irrational exuberance is 

taking hold” in the Japanese 

bitcoin market. 

There is also speculation 

that a longstanding and divisive 

bitcoin debate about the structure 

of trading in the market 

may soon be settled, opening 

up more demand for the coin. 

Ahead of a large conference in 

New York called Consensus, 

there is speculation that a solution 

to the so-called scaling 

debate could be resolved. 

paying bondholders this summer. 

Yet, there are very few people 

trading these bonds, no matter 

the price. 

Only €160 million ($180 million) 

of Greek government bonds 

have changed hands on the country’s 

HDAT electronic-trading 

platform so far this year, according 

to figures from the Bank of 

Greece . TELL -0.80% 

That is a microscopic fraction 

of the levels before Greece ran 

aground in a decadelong economic 

crisis. All the debt traded 

so far this year is about as much 

as was traded in half an hour, on 

average, between 2001 and 2007. 

Moreover, trading volumes are 

lower this year than they were 

in 2016, underscoring the challenges 

the Greek government will 

face to stage a return to financial 

markets, even as officials plan the 

first bond issue in three years for 

as early as this summer. 

J.P. Morgan Asset Management, 

a $1.7 trillion moneymanager, 

is confident that Athens 

will ultimately get the funds and it 

doesn’t believe private investors 

will take any writedown. But it 

doesn’t own any Greek bonds. 

“It’s not really in the universe 

for us,” said Mike Bell, the company’s 

global market strategist. 

A key problem is that ratings 

firms still rank Greek paper as 

junk. This means it’s off the radar 

for most money managers other 

than hedge funds and some domestic 

investors, said John Stopford, 

head of multiasset income 

at Investec Asset Management. 

“There may be opportunities. 

But we’re looking at 70 to 80 different 

countries and, for the moment, 

Greece isn’t one of them,” 

he added. 

Indeed, the spread between 

the price that banks dealing in 

Greek bonds are willing to buy 

the paper and the price at which 

they are willing to sell it is the 

widest among eurozone bonds, 

which is a further indication of a 

very thin market.


C002D5556 

BUSINESS DAY 

WEST AFRICA ENERGY 

oil gas power 

R 

Government&Policies 

Policy shift, new 

investments set to 

catalyze Nigeria’s 

electricity market 

Page 5 

Finance People 

Appointments 

L-R: Audrey Joe-Ezigbo, 2nd vice president, NGA/Co-Founder/ED Falcon Corporation Ltd; Dada Thomas, president, NGA/ CEO, Frontier Oil Limited; Mlandezeni 

Boyce, Ccountry manager, Sasol & John Okafor business development, Sasol during courtesy visit by NGA to Sasol Exploration and Production Nigeria Limited 

Corporate Office in Lagos recently 

Debrief 

South Africa open to 

Iranian investment 

if new refinery goes 

ahead 

Page6 

OPEC weekly basket price 

DAY 

PRICE 

19/05/17 49.92 

12/05/17 47.53 

5/05/17 48.09 

28/04/17 49.47 

21/04/17 51.52 

Source: OPEC 

Growing distortion of oil 

industry unions’ objectives 

FRANK UZUEGBUNAM 

ny, Nigerian National Petroleum 

Corporation (NNPC). 

They have taken up battles 

that resonated well with the public 

despite the hardships that 

come with their actions. But increasingly, 

leaderships of these 

unions have also taken up less 

popular battles with the public 

questioning their objectives. 

Just recently, PENGASSAN 

moved against ExxonMobil, 

picketing the company’s premises 

nationwide in a three-day 

warning strike, an action decried 

in some quarters because 

of its impact on the country’s 

ailing economy as ExxonMobil 

is currently one of the largest oil 

producing company in Nigeria 

with about 660,000 barrel per 

day (bpd). They also threatened 

The Petroleum and Natural 

Gas Senior Staff 

Association of Nigeria 

(PENGASSAN) and 

Nigeria Union of Petroleum 

and Natural Gas Workers 

(NUPENG) are labour unions 

with the objective to guard and 

protect the rights of workers in 

the oil and gas industry. 

In the past, the unions protested 

the sale of refineries 

which till date have not operated 

beyond 25 percent of their various 

capacities. They went against 

downstream deregulation and 

also protested against the unbundling 

of the state-oil compathe 

entire Nigeria oil industry as 

their members also planned to 

enforce total shut down in production 

at all international oil 

companies’ locations across the 

country 

Before now, the union have 

held a couple of strikes in the last 

few months after the management 

of ExxonMobil let go about 

a 100 workers considered to be 

delinquent in their duties but 

were then given mouthwatering 

exit packages with some getting 

as much as N100 million each. 83 

of them were members of PEN- 

GASSAN. 

But this latest crisis was 

sparked by a disciplinary process 

which was instituted on April 

28 to have five of the ringleaders 

captured on CCTV to have 

led the destruction of vital oil 

installations and assault on staff 

aboard the FSP to account for 

their actions. 

There is respite following intervention 

by the Industrial Arbitration 

Panel (IAP) who have ordered 

the senior staff association 

at the ExxonMobil-NNPC joint 

venture to suspend its threat and 

order asking their members to 

withdraw their services. 

However, caution should be 

the watchword given that in this 

era of dwindling oil fortunes, we 

cannot afford to complicate the 

numerous economic problems 

facing the country by embarking 

on needless strike actions with 

the potential to throw into disarray, 

the implementation of the 

yet to be signed 2017 budget.



C002D5556 


oil 

Brief 

Ghana: 

Tullow to drill more wells after ruling on 

maritime dispute with Cote d’Ivoire 

Tullow Oil says 

plans are underway 

to resume 

drilling next 

year to boost output at 

its Tweneboa, Enyenra, 

Ntomme (TEN) field once 

the maritime dispute between 

Ghana and Cote 

d’Ivoire is resolved. 

Charles Darku, Tullow 

Ghana Managing Director, 

told shareholders that 

the drilling of the new 

wells would help increase 

production to 80,000 barrels 

a day from the current 

expected level of 50,000 

barrels for 2017. 

The International Tribunal 

for the Law of the 

Sea is set to rule on the 

maritime border dispute 

in late 2017. 

“We are looking to the 

Ghana government to 

reach a resolution on that 

to enable us immediately 

to resume drilling new 

wells to boost produc- 

Cairn Energy’s 

latest SNE well 

offshore Senegal, 

SNE-6, has 

proved to be successful, 

with the confirmation of 

good connectivity with the 

SNE-5 well. 

Cairn says that rig performance 

continues to be 

excellent and operations 

have been safely and successfully 

completed ahead 

of schedule and under 

budget following drilling, 

logging and drill stem test- 

tion,” Darku said. 

The offshore TEN 

field blocks came on 

stream in August last 

year. 

Darku said since no 

wells could be drilled 

until after the ruling, 

Tullow was managing 

the existing wells in a 

prudent and sustainable 

manner adding that 

Tullow would seek additional 

reserves to extend 

production life while 

investing in new exploration 

opportunities beyond 

Jubilee and TEN. 

Senegal: 

Cairn finds further Senegal success 

ing (DST). 

The objective of the 

SNE-6 appraisal well, together 

with the previous 

successful SNE-5 well, 

was to flow oil from one 

of the principal units in 

the upper (400 series) 

reservoirs and demonstrate 

connectivity 

between the two wells, 

says Cairn. Pressure data 

from SNE-6 immediately 

confirmed good connectivity 

with SNE-5 and 

accordingly a short DST 

was performed. 

“A good connectivity 

between both wells 

will drive the effectiveness 

of water flooding in 

the SNE upper reservoir 

which could boost recovery 

factors in the upper 

sands from the 5-10 percent 

currently assumed 

(2P case) to some 20 percent,” 

says investment 

analysts GMP Research. 

Is NNPC really open for business? 

ISAAC ANYAOGU 

At the recent 

2017 Offshore 

Technology 

Conference 

(OTC) in 

Houston, Maikanti Baru, 

Group Managing Director 

of Nigerian National 

Petroleum Corporation 

(NNPC) said, the “NNPC 

is here and we are open 

for business.” 

The national oil company 

have taken to critical 

actions to perpetuate 

this notion. This month, it 

awarded the Ajaokuta-Kaduna-Kano 

(AKK) natural 

gas pipeline project to a 

consortium of Chinese 

firms led by the Chinese 

Petroleum Engineering 

at the cost of $949 million 

representing 80 percent of 

cost of construction. 

NNPC says the objective 

of the pipeline is to 

address the current operational 

challenges experienced 

in the Nigeria 

power sector limiting the 

ability of gas generation 

companies (Gencos) from 

increasing their output 

to due to difficulty transporting 

gas from the Niger 

Delta to power plants 

around the country. 

According to the project 

tender, the contract 

includes a 40-inch pipeline 

221 km, 2 stations and 

7 valve room and its ancillary 

facilities. The pipeline 

is expected to run 187 

kilometres from Ajaokuta 

to Abuja, 193 kilometres 

from Abuja to Kaduna, 65 

kilometres from Kaduna 

to Zaria and then the rest 

from Zaria to Kano. 

In March this year, 

Baru said the process for 

the construction of the 

650 kilometres northern 

gas pipeline that would 

run from Ajaokuta in Kogi 

State to Kano had begun. 

NNPC also has ongoing 

gas pipelines projects 

that are at various stages 

of completion, including 

the strategic 127km East- 

West Obiafo/Obirikom to 

Oben (OB3) pipeline that 

is scheduled for completion 

by the end of this 

year, and the looping of 

the Escravos-Lagos Gas 

Pipeline System from 

Warri to Lagos, which is 

scheduled for completion 

by July also this year 

To cap it all, Nigeria’s 

national oil company two 

weeks ago, said it will resume 

drilling in the Lake 

Chad Basin in six weeks’ 

time after exploratory 

activities were halted on 

account of insurgency by 

Islamist extremist group, 

Boko haram. 

Saidu Mohammed, 

NNPC’s chief executive 

officer in charge of Gas 

and Power, who represented 

Baru, disclosed 

this on a visit to the Borno 

State governor, Kashim 

Shettima, in Maidugiri. 

Mohammed said that 

light and heavy duty exploration 

equipment 

were being moved into 

the basin to commence 

full oil prospecting by the 

end of 2017. 

“We are also in the 

state to inform you that 

in the next six weeks, we 

are going to redeploy our 

Snapshot 

$949m 

Cost of 

Ajaokuta- 

Kaduna-Kano 

(AKK) natural 

gas pipeline 

project 

awarded to 

a Chinese 

company by 

the NNPC 

team of experts back to 

Maiduguri to resume oil 

exploration with better 

technology in the Lake 

Chad Basin. 

“This is necessary with 

our renewed efforts in 

harnessing, Oil, Gas and 

Power to increase the 

economy of the nation, 

in line with the agenda of 

President Muhammadu 

Buhari in job creation 

and economic diversification.” 

However, NNPC would 

really be open for business 

following the model 

of Saudi Arabia’s biggest 

oil company, Saudi Aramco. 

The world’s largest oil 

exporter, plans to sell as 

much as 5 percent of Aramco 

in 2018 as part of a 

plan to set up the world’s 

biggest sovereign wealth 

fund and reduce the 

economy’s reliance on oil. 

Since King Salman 

acceded to the throne 

in 2015, the kingdom 

changed its oil minister 

and the top Aramco leadership. 

The company has 

formed a supreme board 

to oversee its affairs, led 

by the king’s influential 

son, Deputy Crown Prince 

Mohammed Bin Salman. 

The prince has been the 

driving force behind the 

Aramco IPO plans. 

Besides the sale of the 

IPO, Saudi Arabia seeks to 

double refining capacity 

and expand natural gas 

and chemical businesses 

ahead of what could be 

the world biggest share 

sale. This model represents 

the best example of 

what it means to be open 

for business.


gas 

C002D5556 

BUSINESS DAY 

03 


Industry skills gap, gas flaring 

impede West Africa competitiveness 

KELECHI EWUZIE 

West Africa 

countries 

like Nigeria, 

Ghana, 

Cote 

D’ivorie with their combined 

years of engagement 

in commercial production 

of gas have continue 

to struggle with issues 

around shortfall of required 

industry skills and 

gas flaring. 

Attracting appropriate 

skills and its resultant 

wage bill remain the biggest 

challenge confronting 

the gas industry. The 

most difficult vacancies 

to fill in the industry in a 

country like Ghana are 

drillers, engineers, mangers, 

production and operation 

workers. 

The main causes of the 

skills shortages in Ghana 

could be attributable to 

the immaturity of the industry, 

and insufficient 

capacity building in the 

acute areas. Also, demand 

for skilled labour exceeds 

the supply, insufficient 

skilled applicants, competition 

for labour among 

the oil companies and 

high cost of labour. 

Aside the skills shortfall 

concerns, industry 

experts opine that gas 

flaring in West Africa gas 

sectors pose significant 

challenge that needs to be 

addressed. 

Close industry watchers 

observe that Gas flaring 

among other things affect 

the environment and 

human health, produces 

economic loss, deprives 

the government of tax 

revenues and trade opportunities, 

and deprives 

consumers of a clean and 

cheaper energy source. 

Gas flaring has negative 

impact on the economics 

of the nation in terms of 

loss of funds and revenue. 

Report from Nigerian National 


(NNPC) indicates 

that in 2016 Nigeria lost 

N217bn to gas flaring; in 

Ghana there is an estimated 

loss of 1.2 million 

daily in revenue for either 

flaring the gas or delay in 

utilising the associated 

natural gas by the Ghana 

Gas Company. 

Giving the zero gas flaring 

policy by Ghana National 


(GNPC), the need 

to monetize this associated 

gas became imperative. 

Hence, the establishment 

of Ghana National 

Gas Company at Atuabo 

to harness the potential 

of the associated gas to be 

utilised as domestic usages 

and industrial purposes. 

In Nigeria, the ministry 

of petroleum resources 

through the minister for 

State for petroleum, Ibe 

Kachikwu was quoted to 

have said that under the 

gas policy, the government 

intends to maximise 

utilisation of associated 

gas to be treated for supply 

to industries. 

“To ensure that flared 

gas is put to use in markets, 

the government will 

take measures to ensure 

that flare-capture and 

utilisation projects are developed 

and will work collaboratively 

with industry, 

Snapshot 

N217bn 

Estimated 

amount lost 

by Nigeria to 

gas flaring in 

2016 

development partners, 

providers of flare-capture 

technologies and third 

party investors to this 

end,” he was quoted to 

have said. 

According to the gas 

policy, the current gas 

flare penalty of N10 per 

1,000 scf of associated gas 

flared is too low, having 

been eroded in value over 

time, and is not acting as 

intended, as a disincentive. 

“Consequently, the 

low penalty has made gas 

flaring a much cheaper 

option for operators compared 

to the alternatives 

of marketing or re-injection. 

The intention of government 

is to increase the 

gas flaring penalty to an 

appropriate level sufficient 

to de-incentivise the practice 

of gas flaring, whilst introducing 

other measures 

to encourage efficient gas 

utilisation,” it added. 

It is the expectation of 

industry experts that collaborative 

efforts with right 

investment climate, government 

policies, appropriate 

capacity building 

and other proactive measures 

are needed to surmount 

the obstacles if the 

industry would continue 

to play significant role in 

the West Africa’s economy. 

Brief 

Nigeria: 

Reps attempt to amend NLNG Act 

without shareholders’ involvement 

borders on illegality 

An amendment 

to the Nigeria 

LNG Limited 

(NLNG) (Fiscal 

Incentives, Guarantees 

and Assurances) Act 

without following the 

laid down process stipulated 

in the Act for any 

amendment would be 

contrary to the Rule of 

Law. This is the reaction 

of the General Manager, 

External Relations at 

NLNG, Kudo Eresia-Eke. 

Eresia-Eke was responding 

in Abuja, to 

the sponsor of the NLNG 

Act Amendment and 

member of the House of 

Representatives, Honourable 

Leo Ogor, during 

a live television programme, 

Focus Nigeria, 

on African Independent 

Television (AIT). 

KBR has announced 

that it 

has been awarded 

a Front-End 

Engineering Design 

(FEED) and project management 

services contract 

for Oman Liquefied 

Natural Gas LLC (Oman 

LNG) in Qalhat, Oman. 

Oman LNG operates 

three liquefaction trains 

with a total nameplate 

capacity of 10.4 million 

tonnes per annum 

(mtpa). 

The project represents 

KBR’s reentry into the 

Oman market and supports 

our strategic focus 

Ogor had earlier stated 

that the Guarantees and 

Assurances in the Act were 

not tampered with adding, 

that the only amendment 

contained in the Bill 

as passed by the House 

of Representatives was to 

include the payment of 3 

percent levy to the Niger 

Delta Development Commission 

(NDDC) levy to 

make the Act compliant 

with the NDDC Act. 

Oman: 

KBR awarded FEED for Oman LNG 

on gas monetization in the 

Middle East region. 

“This contract confirms 

KBR’s strong reputation as 

one of the world’s preeminent 

leaders in LNG facilities 

and demonstrates the 

trust that Oman LNG has 

placed in KBR following 

the successful development 

of the original Front- 

End Engineering Design 

(FEED) of this world-class 

LNG facility,” said Jay 

Ibrahim, KBR President: 

Europe, Middle East & Africa. 

“We are committed 

to expanding our footprint 

in the Middle East and are 

delighted at this opportunity 

to reestablish KBR in 

Oman and contribute to 

Oman’s In-Country Value 

(ICV) initiatives.” 

Revenue associated 

with this contract was 

undisclosed and will be 

booked into backlog of unfilled 

orders for KBR’s Engineering 

& Construction 

business segment in the 

second quarter of 2017.



C002D5556 


power 

‘Right policies will strategically pull 

required investment to power sector’ 

Deepak Khilnani, Chairman of Cummins Power Generation Nigeria and Powergas 

Africa. In this interview with Kelechi Ewuzie, Khilnani shares his thoughts on the 

Nigerian power sector and his strategy to improve power availability. Excerpts: 

What is your general assessment of 

Nigeria’s power market and regulation 

in relation to the current economic realities 

in the country today? 

There is a significant supplydemand 

imbalance in the 

Nigerian power sector. Grid 

availability is currently not 

sufficient to meet both industrial 

and residential demand and hence 

majority of sites in Nigeria rely on private 

generators. I believe this will change in 

the next few years as the government is 

making a strong commitment and action 

plan to improve grid power. For 

example, Cummins is developing a 150 

MW grid connected power project in 

Rivers State. 

With all these challenges, what policy 

suggestions do you think will benefit 

the oil and gas sector? 

Strong and enforceable financial 

guarantees will encourage further private 

sector investment into the power 

industry. Cummins is working closely 

with Nigerian Bulk Electricity Trading 

Plc (NBET) to develop national power 

plants and we’ve certainly noticed a 

strong alignment towards private sector 

co-operation in the power industry 

and ‘bankable’ PPA’s (Power Purchase 

Agreements) to make the projects commercially 

viable. 

Moreover, additional investment into 

the Transmission and Distribution infrastructure 

will minimise power losses 

and boost the confidence of the Generation 

companies (GENCOs). 

How did you receive the presidency’s 

call for crude oil and gas companies 

to return to the Niger Delta? 

Let’s take Powergas for instance, it 

provides quality compressed natural 

gas to Nigerians no matter where they 

live, Niger Delta inclusive. We operate 

two gas compression plants in the Niger 

Delta, which provide strong local employment 

opportunities as well as serve 

local industries with clean, reliable and 

affordable natural gas. In fact we commissioned 

our second plant in the Niger 

Delta just last year. For a region so 

wealthy in natural resources, the community 

development also needs to keep 

Deepak Khilnani 

pace for the region to truly prosper and 

become a stable environment for further 

private sector investment. 

Is the falling crude oil prices affected 

natural gas sales in Nigeria? 

Since the fall in crude oil prices, the 

price of diesel in Nigeria has actually increased 

because the crude is exported 

from Nigeria and the refined diesel is 

imported. Given diesel is the competing 

fuel for natural gas in most off grid 

power generation applications, natural 

gas has become even more competitive. 

Nigeria has the world’s ninth largest 

reserves of natural gas. We locally 

source, dry and process the gas, hence 

are able to sell natural gas at approximately 

half the price of diesel. We have 

seen strong growth in sales over the past 

year due to the wide price differential, 

but also the improved industrial reliability 

of operating on gas engines. Gas is a 

much cleaner fuel than diesel and hence 

requires less generator maintenance. 

Moreover, the reliance on diesel is 

very environmentally damaging and 

puts strain on foreign exchange reserves 

as a major proportion of dollars are 

used to import diesel instead of utilising 

cleaner and cheaper domestic fuels. 

What do you think about the gas infrastructure 

in Nigeria? 

The pipeline gas infrastructure in Nigeria 

to transport natural gas to the point 

of use is relatively small given the size of 

the nation and high demand for natural 

gas. The pipeline network is limited 

to just a few cities Lagos, Port Harcourt, 

Aba and Benin City. Pipeline development 

costs are high and usually part of 

long-term infrastructure projects hence 

we pioneered the ‘virtual pipeline’ business 

to transport gas by truck to any location 

across Nigeria not connected to a 

pipeline. 

With Cummins and Powergas leaders 

in the Nigerian energy industry, 

tell us your experience doing business 

in Nigeria? 

Nigeria is ranked 169 out of 190 in 

the World Bank ‘Ease of Doing Business’ 

report. It is certainly a challenging 

market, but I believe through hard 

work and persistence you can set industry 

standards. For example, our 

relentless drive to compete on service 

and safety stands out all our power 

plants across Nigeria average over 99 

percent power availability throughout 

the year and we are proud to have a 

100 percent safety record. Our business 

model is based on a long-term 

investment and leadership position in 

the Nigerian energy industry. 

Who are the majority of your customers 

in Nigeria today? 

Currently we serve a vast array of 

clients in Nigeria ranging from multinationals 

to small and medium industries, 

hotels and large residential estates 

with a tailored power solution for each 

site. For example, we install and operate 

waste heat recovery equipment at 

large industries that require cooling and 

heat for industrial process. Similarly, for 

factories that require 24x7 power with 

zero downtime, we install synchronised 

diesel sets to cater for any chance of gas 

outage. 

We are also developing national pow- 

er plants that supply electricity directly 

into the grid and serve Nigerians with 

reliable and clean electricity at home a 

core right for all citizens in today’s day 

and age. 

What kind of innovation and technology 

should be expected from Cummins? 

Cummins recently introduced a 

brand new 1540 KW high efficiency Osprey 

gas generator which has one of 

the lowest fuel consumptions globally 

(up to 44 percent electrical efficiency). 

Cummins is also launching an upgraded 

2000 KW engine next year, which again 

will boost performance, stretch maintenance 

intervals and reduce gas consumption 

all contributing to lower operating 

costs. 

We have also set up a partnership 

with Soventix, a leading solar company 

in Germany to support our ambitions to 

further reduce emissions and tariffs at 

our power plants across Nigeria. We will 

be focusing on hybrid solar systems that 

interface with the gas generators. There 

is so much innovation in the energy industry 

and it is essential to keep pace 

with these disruptive trends. 

What is your strategy to improve the 

power situation in Nigeria? 

Our short-term strategy continues to 

develop reliable and localised energy 

solutions that supply electricity and 

compressed natural gas (CNG) to industries 

and large residential estates. This 

requires continuous enhancement of 

technology such as remote monitoring 

software to analyse plant performance 

and people training and development. 

I’ve always been a strong believer in 

strong local capability in order to build 

a sustainable enterprise – especially in a 

business like ours that operates complex 

industrial machinery across Nigeria. 

We are very experienced in building 

and operating captive power plants having 

been operating in Nigeria since the 

late 1990’s in this market. 

Our medium-term strategy is to work 

with the Federal Government of Nigeria 

and local distribution companies to 

develop a portfolio of 100 MW national 

power plants that pump clean and reliable 

electricity into the grid.


government&policies 

C002D5556 

BUSINESS DAY 

05 


Policy shift, new investments set to 

catalyze Nigeria’s electricity market 

ISAAC ANYAOGU 

Nigeria’s electricity 

market is set 

to see a boost that 

will help resolve 

its liquidity constraints 

following a directive by 

the by the Federal Government 

through the Nigerian Electricity 


(NERC) that electricity generation 

companies can now sell 

power directly to customers. 

On May 15, Babatunde Raji 

Fashola, minister of Power, 

Works & Housing, long frustrated 

with the antics of the 

electricity distribution companies 

who have failed to invest to 

reduce ATC&C losses, improve 

distribution infrastructure 

and improve collections, announced 

that generation companies 

(Gencos) could now sell 

power directly to eligible customers. 

The eligible customers 

comprises of a group of endusers 

registered with the Commission 

whose consumption 

is no less than 2MWhr/h and 

connected to a metered 11kV 

or 33kV delivery point on 

the distribution network and 

subject to a distribution use 

of system agreement for the 

delivery of electrical energy. 

The next category are those 

connected to a metered 132kV 

or 330kV delivery point on the 

transmission network under 

a transmission use of system 

agreement for connection and 

delivery of energy. 

The other category includes 

those with consumption in excess 

of 2MWhr/h on monthly 

basis and connected directly to 

a metered 33kV delivery point 

on the transmission network 

under a transmission use of system 

agreement. 

The last category are eligible 

customers whose minimum 

consumption is more than 

2MWhr/h over a period of one 

month and directly connected 

Snapshot 

60% 

Estimated 

losses to DISCOs 

from the new 

policy should 

GENCOs start 

selling power 

to categories of 

customers 

to the metering facility of a 

generation company, and has 

entered into a bilateral agreement 

for the construction and 

operation of a distribution line 

with the distribution licensee 

licensed to operate in the location. 

This directive is however 

in line with Section 27 of the 

Electric Power Sector Reform 

Act 2005 which permits eligible 

customers to buy power from a 

licensee other than electricity 

distribution companies 

Interestingly, investors are 

entering into negotiations with 

industrial clusters to provide 

them power through embedded 

generation that are to be 

powered by independent power 

plants. 

A recent example is a new 

investment by Geogrid LighTec 

Ltd who recently unveiled 

plans for a 30 megaatts hybrid 

power plant to be sited on a 

4,500 square-meter space inside 

Cadbury Nigeria property 

in Ikeja Industrial cluster and is 

partnering with Manufacturers 

Power Development Company 

to achieve the buy-in of manufacturers. 

At the cost of $25million, the 

proposed plant is billed to run 

70 percent on gas and 30 percent 

on diesel. To ensure that 

there is no down time; the company 

said the engines would be 

maintained at different times. 

Geogrid has secured a license 

from the Nigerian Electricity 


(NERC) for 30MW of power for 

10 years, the Environmental 

Impact Assessment (EIA) has 

been carried out, and the Lagos 

state government is partnering 

with the company on the right 

of way. 

The proposed plant would 

deliver power either at 11KVA 

or 33KVA lines depending on 

transformers available to the 

customers. Geogrid’s value 

proposition is that customers 

would have the option of take 

and pay rather than the take or 

pay option. Both options are 

industry speak for paying for 

subscribed power whether you 

use it or not, or pay as you use, 

respectively. 

Oweh Mba-Sam, coordinator 

of the Manufacturers Power Development 

Company (MPDC) 

speaking on the launch of the 

investment said that manufacturers 

already have about six 

similar projects running in different 

industrial clusters in Nigeria. 

Manufacturers in Nigeria 

say that 40 percent of their cost 

goes to providing power. 

The sum of this situation is 

that it is ramping competition 

in the electricity market as monopoly 

granted the DisCos is 

being removed. Some experts 

say the losses to the Discos 

could be as high as 60 percent 

but competition will improve liquidity 

in the electricity market.



C002D5556 

WEST AFRICA ENERGY finance people appointments 

Brief 

Halliburton 

announces leadership 

transition 

Ha lliburton 

Company has 

announced 

that its Board 

of Directors has unanimously 

elected Jeff Miller, 

the Company’s president 

and a board member, to 

the position of president 

and CEO. Dave Lesar, 

who has led Halliburton 

as chairman and CEO 

since 2000, will continue 

serving the Company as 

executive chairman. The 

leadership changes are 

effective June 1, 2017. 

“I am grateful to the 

Board and Dave for this 

opportunity to serve Halliburton 

shareholders 

and employees,” Miller 

said. “I have been fortunate 

to work directly 

with Dave for many years 

and to learn from him as 

we execute and deliver 

industry-leading returns 

by serving our customers 

and growing our revenue 

and margins. I look forward 

to leading our organization 

as we continue to 

collaborate and engineer 

solutions to maximize asset 

value for our customers.” 

Miller will provide the 

day-to-day leadership 

and management of 

the Company. He will 

also be responsible for 

the planning and execution 

of Halliburton’s 

strategic direction, financial 

objectives, and 

technology development 

along with Halliburton’s 

management 

team who will report 

directly to him. 

As executive chairman, 

Lesar will continue 

to play an important 

leadership role focusing 

on the strategic direction 

of the Company, 

advising the Halliburton 

management team 

and transitioning CEO 

responsibilities to Miller 

who will then continue 

reporting to Lesar. He 

will be actively engaged 

with shareholders and 

continue working with 

customers to ensure the 

Company is best addressing 

their needs. Lesar has 

entered into a new executive 

employment agreement 

that provides that 

he will continue as executive 

chairman through 

mandatory retirement on 

December 31, 2018, and 

contains a 4 year noncompete. 

South Africa open to Iranian 

investment if new refinery goes ahead 

South Africa, a 

net importer of 

refined oil products, 

is looking to 

West Africa and 

the Middle East, including 

Iran, for potential partners 

on a new refinery project, 

energy ministry officials 

said. 

Energy minister, Mmamoloko 

Kubayi, said that 

the cabinet expects to decide 

by December whether 

Ghana Oil Company 

Limited 

(GOIL) recorded 

an impressive 

performance in 2016 despite 

increasing competition 

and a fall in general 

consumption of fuel. 

The largest Indigenous 

oil marketing company 

posted a 58.7 percent increase 

in profit after tax and 

recorded a 26.95 percent 

increase in turnover compared 

to that of 2015. This 

was announced at the 48th 

Annual General Meeting 

in Accra by the outgoing 

Board Chairman William 

Asomaning. 

The Oil Marketing 

Company which declared 

a dividend of 

0.025 cedis per share to 

shareholders also wel- 

to build the refinery that 

has been under consideration 

for almost a decade. 

National oil company 

PetroSA has promoted the 

idea of building a refinery 

with a capacity of up to 

400,000 barrels per day on 

the east coast, but the government 

was put off by the 

$10 billion price-tag in 2010 

and a lack of equity partners. 

Kubayi said the refinery 

was now urgent because 

South Africa’s oil imports 

were increasing. 

She said that a publicprivate 

partnership to develop 

the refinery, which 

would be majority owned 

by the government, was the 

preferred approach. 

“By the time any new 

refinery is completed, the 

country will be importing 

in excess of a third of its fuel 

requirements,” she said. 

GOIL posts 58 percent profit, 

maintains dividend to shareholders 

comed a new Board of 

Directors headed by the 

Former minister of state, 

Kwamena Bartels 

Briefing Shareholders 

of the performance of 

the company in the year 

under review, the outgoing 

Board Chairman, Prof. 

William Asomaning said, 

“GOIL achieved 95.8 percent 

of its fuel sales target 

in spite of the tight competition 

in the industry. 

Despite a fall of about 5.6 

percent in national consumption 

of fuel products, 

the company grew fuel 

sales by 9.8 percent during 

2016, LPG sales grew by 

30 percent compared to 

2015. Lubricant sales also 

improved by 11 percent 

compared to 2015. He 

noted that GOIL remains 

the biggest OMC with a 

market share of 18.2 percent”. 

Asomaning stated that 

the right issue undertaken 

by GOIL in 2016 

raised additional capital 

of GH¢150 million which 

enabled the company to 

undertake key projects 

among which are the fully 

The acting director 

general at the ministry of 

energy Tseliso Maqubela 

said that South African authorities 

were in talks with 

countries and firms from 

the Middle East and West 

Africa to build the refinery. 

“At this stage no country 

is excluded,” Maqubela 

said when asked if Iran was 

among the countries being 

considered. 

He said there was no decision 

yet on the new refinery’s 

production capacity 

or its construction costs. 

Royal Dutch Shell, BP, 

Total and Sasol are among 

the main refinery operators 

in Africa’s most industrialised 

country. South Africa 

bought around 68,000 

bpd of crude from Iran in 

May 2012, a month before 

it halted crude purchases 

as Western countries pressured 

Tehran over its nuclear 

programme. 

Pretoria, which also gets 

oil from Saudi Arabia, Nigeria 

and Angola, has said 

it wants to resume imports 

from Iran since Western 

sanctions were lifted in 

2016. 

automated 3-tank storage 

facility at Takoradi Harbour 

to store and supply 

Marine Gas Oil (MGO), to 

meet the ever increasing 

demand by supply vessel, 

the construction of a bitumen 

plant and lubricant 

blending plant in Tema. 

He announced a dividend 

payment of GH¢0.025 per 

share to shareholders. 

The new Board Chairman 

of GOIL, Kwamena 

Bartels acknowledged 

the good work done by 

Prof. Asomaning and his 

team and assured the new 

Board, Management, Staff 

and Shareholders that his 

team will continue the 

good work begun by the 

former board to bring more 

success to GOIL during his 

tenure.


marketinsight 

Oil at one-month high, supplycut 

extension expected 

Oil prices rose 

closing out a 

second week 

of gains on 

growing expectations 

that OPEC and 

other producing countries 

will agree next week to extend 

output cuts. 

Brent crude settled up 

There is clear 

consensus that 

oil prices will be 

in the $50-60 per 

barrel range this year, 

and within the $60-80 

per barrel range in 2020, 

according to a new survey 

from Wood Mackenzie. 

The survey, which analyzed 

the responses of 170 

industry professionals, 

revealed that priorities 

for 2017 are focused on 

protecting dividends and 

strengthening balance 

sheets. 

Higher risk investments, 

such as deepwater 

projects, are being 

screened at higher hurdle 

rates by the industry, according 

to the report, 

which suggested that lower 

risk investments, like 

$1.10, or 2.1 percent, at 

$53.61, the highest settlement 

for the international 

benchmark since April 18. 

US benchmark crude oil 

rose 98 cents to $50.33, the 

highest close since April 

19. US crude gained 5.2 

percent for the week, while 

Brent rose 5.4 percent. 

Report: Oil to hit $60 max in 2017 

asset M&A, are most likely 

to be pursued by the sector. 

“The industry is very 

cautious right now and 

risk appetite is low,” Mar- 

The Organization of 

the Petroleum Exporting 

Countries (OPEC) and 

other producers including 

Russia are scheduled to 

meet on May 25. They are 

expected to extend output 

cuts of 1.8 million barrels a 

day until the end of March 

2018. 

tin Kelly, Wood Mackenzie’s 

head of corporate 

analysis, said in a statement. 

Wood Mackenzie’s oil 

price prediction is in line 

The OPEC-led group is 

trying to reduce a global 

crude glut that has been 

slow to balance out due 

to weak demand and rising 

production elsewhere, 

particularly the United 

States. An OPEC panel is 

considering even deeper 

supply cuts to try to boost 

prices. 

Many investors remain 

concerned about high 

global inventories, and 

supply data from around 

the world shows that drawdowns 

of global inventories 

have slowed or even 

reversed. 

US crude production 

has climbed 10 percent 

since mid-2016 to 9.3 

million barrels per day 

as shale producers have 

taken advantage of higher 

prices to boost activity. 

Energy services firm Baker 

Hughes said US drillers 

added oil rigs for an 18th 

week in a row, the secondlongest 

streak on record. 

with a recent poll conducted 

by Rigzone, which 

placed the price of Brent 

Crude Oil at around $60 

per barrel by the end of 

the year. 

C002D5556 

BUSINESS DAY 

07 


OPEC Flakes 

Iraq could make OPEC-led oil 

output cut extension difficult 

Iraq is the big holdout 

country that could 

thwart Saudi Arabia’s 

and Iran’s wish 

to extend the OPEC-led 

oil production cut by a 

further nine months, according 

to RBC’s Helima 

Croft. 

“Getting Iraq on 

board is going to be interesting….I 

think Iraq in 

the end will get on board 

but they might make it 

difficult along the way,” 

said Croft, noting that 

the country’s oil minister, 

Jabbar al-Luaibi, 

had fought hard - and 

ultimately to no avail - to 

stop Iraq from having to 

take the second largest 

hit to its production figures 

in the deal brokered 

between OPEC and non- 

OPEC producers last November. 

Iraq’s financial woes 

have been exacerbated 

Qatari oil minister 

Mohammad 

al-Sada 

joined a growing 

number of major oil 

producers calling for an 

extension to the OPEC 

and non-OPEC output 

cut deal to the end of 

March 2018. 

After nearly three 

years of buildup in oil 

stocks, the process of rebalancing 

was “finally 

gaining momentum,” 

Sada said in a statement. 

“We are optimistic 

that the extension of the 

agreement to the second 

half of this year will improve 

market stability, 

due to the higher expected 

demand in Q3 and Q4. 

This is further supported 

by the fact that the world 

economic situation is 

progressively improving,” 

Sada said in a statement. 

“We also see merits of 

extending the agreement 

further to the first quarter 

of 2018, when demand 

in recent years by ongoing 

attempts to eject 

militants from fundamentalist 

jihadist group 

ISIS from within its borders. 

The country took 

a $5.34 billion loan last 

year to shore up its balance 

sheet yet is still 

struggling to pay its civil 

servants, according to 

RBC’s Croft. 

Qatar joins call for OPEC deal 

rollover to March 2018 

is seasonally lower,” the 

minister added. 

OPEC and 11 non- 

OPEC producers agreed 

last December to cut 

production by 1.8 million 

b/d. According to Sada, 

the breakthrough in reducing 

stocks was due 

to the “excellent compliance 

to the agreed production 

cuts by OPEC 

members and participating 

non-OPEC countries.”



C002D5556 


Domestic Gas Supply - A Pipe dream? 

OLA ALOKOLARO 

The perennial electricity system collapses 

is often attributed to gas supply 

shortages to the various thermal power 

plants in the country. This shortage is 

attributed to pipeline vandalism but 

given the differing and wide geographical locations 

of the power plants, it appears that vandalism 

may not be the sole cause, but rather, gas supply 

shortage. 

For meaningful progress in either sector, there 

must be a new narrative on domestic gas supply 

– one which takes cognisance that lack of gas 

supply is a local issue which perhaps requires a 

local solution. 

In setting the tone for anew narrative, an analysis 

and understanding of a number of issues in the 

gas sector including: ownership of gas resources, 

pricing of the resource and the security of supply 

of same is required. 

Ownership 

The vast number of laws governing the petroleum 

sector does not contemplate gas exploration 

and development. The primary focus of these 

laws has been, and continues to be, crude oil 

exploration and production with very little reference 

to gas. 

For the purposes of determining the ownership 

of both gas in situ and associated gas produced as 

an incidence of crude oil production, the Constitution 

of the Federal Republic of Nigeria, 1999 provides 

under s.44(3) that “ the entire property and 

control of all minerals, mineral gas in and under 

or upon any land in Nigeria or in, under or upon 

the territorial waters and exclusive economic zone 

shall vest in the Government of the Federation 

and shall be managed in such manner as may be 

prescribed by the National Assembly”. Similarly s.1 

(1) of the Petroleum Act vests the entire ownership 

and control of all petroleum resources in, under or 

upon any land in Nigeria (including lands under 

Nigeria’s Territorial waters, Continental Shelf and 

Exclusive Economic Zone) in the Federal Government 

of Nigeria. Petroleum is defined in the act to 

include gas. 

Clearly, from the above, title and ownership 

of any gas in situ belongs to the Federal Government 

of Nigeria. The question then begs as to 

the ownership of gas produced with crude oil 

(associated gas) 

For the purposes of crude oil exploration and 

production, s.2 (1) of the Petroleum Act (the Act) 

permits the Minister of Petroleum to grant licences 


and leases for the prospecting, searching, winning, 

working, carrying away and disposing of petroleum 

and for the purposes of ownership of these grants 

and the development of crude oil, the government 

enters into various contractual arrangements. 

These arrangements are briefly described 

below: 

Traditional joint ventures: The grantees of the 

licences/leases usually the Federal Government 

(FG) in the guise of NNPC and the International 

Oil Companies (“IOCs”) jointly own the interests 

in the entire real property for the duration of the 

licence. The supposition here is that the granteesjointly 

have title to any petroleum, including gas, 

prospected and won under the licence or lease. 

Production Sharing Contract (PSC): TheFG, 

acting through the NNPC, enters into a contract 

with an exploration and production company 

under which such company acts as a contractor 

to NNPC for the development of crude oil. The 

contractor utilises its own funds for the development 

and is repaid its costs plus profits from the 

crude oil produced. Under this arrangement, all 

the contractor owns is an equitable interest in any 

petroleum found. It therefore suffices to say, that 

the ownership of any associated gas under PSC’s 

belongs to the Federal Government. This position 

is supported by the provisions in PSC contracts 

that require contractors to notify the FG of any 

significant gas discovery and submit proposals to 

NNPC for the development of same. 

Risk Service Contracts: These are similar to 

Production Sharing Contracts to the extent only 

that the exploration and production company is 

a contractor to the Federal Government (NNPC) 

and provides all the funds and technical expertise 

required for the development of the asset. The contractor 

is repaid its investment either in cash or in 

kind as the NNPC under the arrangement, retains 

the title and rights to the petroleum produced. All 

natural gas discovered by the Contractor under 

this arrangement belongs to NNPC.Like with the 

PSC, where there is a commercial discovery of gas, 

the contractor is to submit a proposal for the commercial 

development of same further re-inforcing 

the notion that the gas found belongs to the state. 

Marginal Fields: The marginal fields programme 

was introduced to stimulate indigenous 

participation in the upstream oil and gas segment 

of the chain. The original licencee and or Lessee 

(farmor) farmed out the fields within its licence 

and or lease area to an indigenous exploration and 

production company (farmee) and is paid a royalty 

on the production of oil and gas produced from 

the field. The ownership of any gas produced from 

such oil fields may reside in the farmee subject to 

any terms agreed under the governing farm in / 

farm out agreement. 

From the above, save for arrangements under 

the PSC and Risk Service Contracts where any associated 

gas belongs solely to the Federal Government, 

the ownership of associated gas belongs either 

jointly as between the FG and its Joint venture 

partners or to the grantees of either discretionary 

awards and or marginal field holders. 

Whilst the above appears conclusive, some 

provisions of our extant petroleum laws seem to 

circumscribe the ownership of associated gas. 

S.7 of the Act for instance, grants the Minister of 

Petroleum the right of pre-emption on all petroleum 

and petroleum products in the event of 

national emergency or war. Given the gas supply 

constraints and the resultant persistent collapse of 

the grid, can this be deemed a national emergency, 

and if so all gas from JV operations appropriated 

for domestic use. 

Similarly, the Act also allows the Minister, in the 

interest of the public, to impose terms and conditions 

on a licencee or lessee as to special conditions 

applicable to any natural gas discovered, and such 

terms and conditions may include the right of the 

government to take associated gas produced free 

of cost at the flare or at an agreed cost and without 

the payment of royalty. 

On the strength of this provision, and with the 

volume of gas flared (Nigeria is 2nd only to Russia 

), can the government not set in motion a concessioning 

arrangement on a PPP basis to capture gas 

at the flare and treat same for use by local power 

producers and for other domestic uses? 

Furthermore and perhaps stemming from 

the powers granted the Minister under the Act, 

the National Gas Supply and Pricing Regulation 

talking points 

was introduced requiring every gas producer to 

allocate a portion of their gas production for the 

domestic gas market. Non-compliance was to 

attract penalties including prohibition of any gas 

export oriented project. No gas exporter to our 

knowledge has been sanctioned.. 

Pricing 

It has also been posited that gas supply constraints 

be attributed to the reluctance of the oil 

and gas companies particularly the IOCs to invest 

in gas development and related infrastructure due 

to the uneconomic price of gas in the domestic 

gas market. 

The Act places an obligation on a licensee or 

lessee producing gas to obtain the Federal Government’s 

approval as to which price the natural 

gas produced (not taken by government) is sold. 

It suffices to say that the price of gas in Nigeria 

is regulated from the wellhead. Most oil and gas 

companies see this as an impediment for to embarking 

on gas utilization projects as it would be 

uneconomical. 

This argument that the price for domestic gas 

supply is uneconomical doesn’t quite hold firm 

given that some Nigerian Independents such as 

Seven Energy and Seplat who without access to 

cheap international funds have recorded successes 

in domestic gas supply and gas infrastructure 

projects. 

Security of supply 

The Federal Government intends to increase 

the electricity generation threshold to 10,000mw 

in three (3) years. In the absence of a concerted 

renewable energy programme and the overhaul of 

the national grid, it would be a near impossible feat 

given the lack of critical infrastructure to transport 

gas to the various power plants. 

The insistence of IOCs on gas export projects 

might not be unconnected with securing supply 

for the mature gas markets such as Europe and 

North America. If this assertion is indeed correct, 

then perhaps the solution to this local problem lies 

with the local players such as Seplat, Pan Ocean, 

Oando and Seven Energy. The introduction of 

the Marginal Field model for the exploration and 

development of gas fields could help accelerate gas 

exploration and development of gas supply infrastructure 

ensuring a new narrative for domestic gas 

supply even as we continue to await the enablers 

to reform and unbundle the sector 

A new narrative for the gas sector is a must 

and should be driven by the indigenous oil and 

gas companies to ensure adequate domestic gas 

supply does not remain a pipe dream. 

OLA ALOKOLARO is of Advocaat Law Practice. 

E-mail: Ola.alokolaro@advocaat-law.com

BUSINESS DAY 

Why it Matters 

NEWS YOU CAN TRUST I WEDNESDAY 24 MAY 2017 

Why new OPEC exemptions 

are critical for Nigeria 

The world’s 

biggest oil 

producers 

are pushing 

to extend the 

supply cap deal agreed 

last year which saw 1.8 

million barrels per day 

sliced off global oil production, 

to the first quarter 

of 2018. 

Following a supply 

overhang, prices dipped 

below $30 in the first half 

of 2016, the first time in 

over a decade and didn’t 

recover above $50 till the 

end of 2016. 

As indications emerge 

last week that beyond 

Russia and Saudi Arabia, 

who are spearheading 

the push for extension, 

Kuwait and Iran are positively 

inclined to see 

the cuts extended too. 

The deal which seeks to 

curb global inventories 

to a 5-year average was 

aimed at propping up 

oil prices. 

Worried over the implications 

of fallen oil 

prices on national economies, 

top oil producers 

agreed to cut production 

volumes to quell 

The NBS report revealed that the 

inflation rate in March was at 17.26 

percent pointing that current 

reforms in the economy seems 

to be yielding results. 

geria and Libya were 

granted exemptions to 

production cuts due 

to internal crises that 

prevented optimal production. 

Iran, emerging 

from economic sanctions 

was allowed to increase 

production. Nigeria 

secured exemptions 

on account of militancy 

which cut production by 

half a million barrels last 

year coupled with low oil 

prices which made it difficult 

for the government 

a troubling glut in the 

oil market. Originally, 

scheduled to run from 

January to July 2017, the 

relative success recorded 

and slow recovery of 

oil prices is forcing producers 

to seek a further 

9-month extension. 

The only snag the 

deal has had is the threat 

from shale producers 

who began hitting their 

platforms to ramp up 

production when modest 

gains were recorded 

on account of the deal. 

While it them weeks to 

mobilise to their platforms, 

advanced fracking 

technology is letting 

them achieve this in a 

matter of days. 

Oil producers like Nito 

meet its obligations. 

However, Nigeria has 

been quite fortunate as 

the exemptions coincided 

with a period of 

related calm in the Niger 

Delta. There is need to 

sustain current production 

to continue modest 

efforts at economic recovery 

witnessed in the 

country. 

Ibe Kachikwu, Nigeria’s 

deputy petroleum 

minister at the recent 

Offshore Technology 

Conference held in Houston, 

Texas, USA told 

journalists that while the 

country is in favour of 

extending cuts, there are 

no guarantees it could 

secure exemptions. 

In the past six months 

Nigeria’s production has 

shown modest signs of 

recovery. According to 

OPEC’s latest Monthly 

Oil Market Report for 

May, which tracked 

activities for April, Nigeria’s 

output was put 

at 1.484 million bpd, 

from 1.21 million bpd in 

March. 

Also crude grades 

that were under force 

majeure (a legal clause 

that absolves parties to 

a contract from liabilities 

due to unforeseen 

occurrence) are looking 

like they would have encumbrances 

removed. 

Forcadoes, one of Nigeria’s 

biggest terminals 

may soon be restarted. 

A key driver for this 

situation is the relative 

calm in the Niger 

Delta achieved through 

backchannel negotiations 

spearheaded by 

the Presidency and Ibe 

Kachikwu. But it also 

complicates Nigeria’s 

argument for further 

exemptions. 

Therefore Nigeria’s 

argument should be 

premised on the fact 

that while production 

may have marginally 

improved the situation 

is far from being under 

control. To conclude 

that the lull in militancy 

represents the end of 

agitations in the Niger 

Delta is delusory. 

The trigger for further 

attacks could well be 

a thoughtless remark 

from someone in Abuja, 

withholding Amnesty 

allocations far longer 

than the ex-militant’s 

patience could tolerate 

or a dispute with an international 

oil company 

over a failed borehole 

project in a backwater 

community in the Niger 

Delta. 

Chijioke Mama, an 

energy analyst and 

founder of EnergyDatar, 

an energy intelligence 

firm said that in spite 

of production increase, 

the underlying threat of 

future and further losses 

in the Niger Delta due to 

militancy is not totally 

eliminated. Mama said 

a lot is riding on how 

Nigeria makes its case. 

Africa’s second biggest 

oil producer needs 

to sustain the current 

marginal economic recovery. 

Latest inflation 

figures from the National 

Bureau of Statistics 

(NBS) indicates that Nigeria’s 

Consumer Price 

Index, which measures 

inflation, dropped to 

17.24 percent in April, 

marking the third consecutive 

month the inflation 

rate has fallen. 

The NBS report revealed 

that the inflation 

rate in March was at 

17.26 percent pointing 

that current reforms in 

the economy seems to 

be yielding results. This 

makes the clearest case 

for convincing OPEC 

members to grant Nigeria 

an exemption. 

fiveNumbers 

9 

1.8 million 

C002D5556 

OPEC is considering a nine-month 

extension to its production cuts agreed 

in December 2016. 

$50 

OPEC target is to ensure crude oil price 

do not fall below US$50 per barrel. 

OPEC and 11 non-OPEC members 

agreed in December 2016 to cut crude 

oil production by 1.8 million barrels 

per day. 

10 years 

U.S. President Donald Trump proposed 

to sell half of the United States’ Strategic 

Petroleum Reserve (SPR) in the next 10 

years as well as to speed 

up Alaskan exploration. 

11 

The number of non-OPEC oil producers 

that have agreed to collaborate with OPEC 

to cut production. 

Published by BusinessDAY Media Ltd., The Brook, 6 Point Road, GRA, Apapa, Lagos. Ghana Office: Business Day Ghana Ltd; ABC Junction, near Guinness Ghana Limited, Achimota – Accra, Ghana. 

Tel: +233243226596: email: mail@businessdayonline.com Advert Hotline: 08116759801, 08082496194. Subscriptions 01-2950687, 07045792677. Newsroom: 08022238495 

Editor: Anthony Osae-Brown. All correspondence to BusinessDAY Media Ltd., Box 1002, Festac Lagos. ISSN 1595 - 8590.

BusinessDay 24 May 2017

Create successful ePaper yourself

Delete template?

Save as template?