BusinessDay 19 Jun 2017

Rand Merchant Bank launches 

N80bn Commercial Paper programme 

Rand Merchant Bank short-term funding sources, 

(RMB) Nigeria has thereby delivering value to its 

received approval shareholders. 

from FMDQ OTC This programme positions 

Securities Exchange RMB Nigeria to easily and 

to register its N80 billion Commercial 

Paper (CP) Programme nance from the debt market. 

quickly raise short-term fi- 

on the FMDQ platform. 

The formal signing of the 

The programme is a debut deal was conducted in Lagos 

for RMB Nigeria as an issuer in recently. Officials of FMDQ, 

the Nigerian money markets, as well as the joint issuing 

and will form an integral part houses, Stanbic IBTC Capital 

of the bank’s funding strategy, 

as it provides an avenue 

and Standard Chartered Bank, 

to successfully diversify its Continues on page 46 

L-R: Ahonsi 

Unuigbe, 

founder/ CEO of 

Petralon Energy; 

Mutiu Sunmonu, 

chairman of 

Petralon Energy 

& Julius Berger 

Plc; Wolfgang 

Goetsch, managing 

director, 

Julius Berger Plc, 

during the signing 

ceremony, 

of a strategic 

partnership 

and investment 

agreement with 

Julius Berger 

Investments. 

NEWS YOU CAN TRUST I *MONDAY 19 JUNE 2017 I VOL. 14, NO 376 I N300 @ g 

Quoted companies cut cash 

dividend payments by N167bn 

...agric, airline sub sectors post highest increase in corporate actions 

TELIAT SULE 

Shareholders of quoted 

firms on the Nigerian 

Stock Exchange (NSE) 

in 2017 lost N166.86 

billion in income, 

as dividend payment by 84 

companies fell by 31 percent 

to N363.69 billion this year, 

compared with N530.55 billion 

paid in the 2016 dividend 

season. 

This decline affected sectors 

such as the financial services, 

building materials, food 

and beverages and healthcare, 

among others. 

The exceptions during this 

period are the firms listed 

under the agric and airline 

sub-sectors, which recorded 

the most increase in dividend 

payment in 2017, an analysis 

Continues on page 8 

L-R: Michael Larbie, CEO/regional head, West Africa, Rand Merchant Bank; Bola Onadele. Koko, CEO, FMDQ; 

Bayo Ajayi, CFO, Rand Merchant Bank Nigeria, and Aishetu Dozie, head, IBD, Rand Merchant Bank Nigeria, 

during the signing ceremony of RMBN’s debut Commercial Paper in Lagos. 

Inside 

Forex stability, 

stock market rally 

bolster investors’ 

optimism in real 

estate P. 8 

I am an advocate 

of home-grown 

strategy for 

development: Abia 

Governor - Ikpeazu 

Ps. 28/29 

The cutting of the 

hot cake by Banke 

and Olusola (II) 

Bashorun J.K. 

Randle OFR; FCA 

P. 10 

“The Super 

Code” – A 

Postmortem? 

Bisi Adeyemi 

P. 11

2 

Monday 19 June 2017

Monday 19 June 2017 

3

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8 BUSINESS DAY 

C002D5556 


NEWS 

MARKETS AND COMMODITIES MONITOR FMDQ Close (Rate & Prices) 

COMMODITIES EXCHANGE RATE FMDQ Close (Rate & Prices) 

Oil US $47.24 

NSE Close BDC TRAVELEX Foreign Exchange 

Treasury bills 

FGN Bonds) 

$-N365.00 365.00 Market 

Spot $/N 3M 6M 5Y 10Y 20Y 

GOLD $1,255.70 12.72 

£-N465.00 465.00 I&E (Indicative 365.29 

-0.01 -0.01 0.00 -0.16 -0.05 

COCOA $ 2,035.00 33,810.56 

€-N410.00 410.00 CBN (SMIS) 320.00 

14.44 20.07 16.01 16.09 15.93 

Forex stability, stock market rally bolster investors’ optimism in real estate 

CHUKA UROKO 

The relative stability which 

the foreign exchange 

market has seen in the 

past few months, along 

with the stock market 

rally of a couple of weeks ago, have 

bolstered investors’ conidence and 

optimism of improvement in the fortunes 

of Nigeria’s real estate sector. 

The foreign exchange and the 

stock markets are strong economic 

indicators that relect the health and 

performance of an economy. Real 

estate investors reason that the improvement 

seen in their performance 

indicates that the economy is looking 

up, which is good for the sector. 

he intervention of the Central 

Bank of Nigeria in the forex market 

resulted in the appreciation of the 

naira, to the point of a convergence 

between rates ofered on both the 

oicial and parallel markets. At the 

more accessible parallel market, 

the naira appreciated by around 26 

percent, from a peak of N516/US$ to 

N380/US$ as at the end of the irst 

quarter of 2017. 

he stock market rally, as reported 

a couple of weeks ago, is a signiicant 

improvement on the situation 

that deined the market by the irst 

quarter of the year. here was a 4 

percent decline in the All Share 

Index over that quarter, which, 

Nnenna Alintah, a researcher at 

Broll Property Services, said “relected 

a perception of uncertainty 

from portfolio investors, regarding 

Continued from page 1 

by BusinessDay Research and 

Intelligence Unit (BRIU) of 

the dividend history of 84 

companies that have so far 

announced their corporate 

actions, has shown. 

The 84 companies captured 

in the analysis accounted for 

over 80 percent of market 

capitalisation, as at June 14, 

2017. Corporate information 

of the listed agric firms shows 

that the dividend paid in 2017 

went up by N1.835 billion, 

representing an increase of 

the sustainability of the CBN’s intervention 

into the forex market, as 

well as the systemic risks associated 

with the economy”. 

What the economy is seeing at 

the moment is in agreement with 

International Monetary Fund’s 

(IMF) report, which says that the 

global productivity growth for 2017 

is projected to show improvement, 

compared to 2016, adding that economic 

activities in both advanced 

Quoted companies cut cash dividend... 

168 percent over N1.09 billion 

paid in 2016 dividend season. 

This is as dividend paid by 

listed airline firms increased 

by 135 percent to N762.06 million, 

up from N324.84 million 

paid in 2016. 

Furthermore, corporate actions 

by insurance firms this 

year, rose marginally to N4.14 

billion as against N4.07 billion 

paid in 2016 dividend season. 

On the other hand, firms 

listed in the conglomerates, 

economies and emerging market 

& developing economies (EMDEs) 

are expected to accelerate in 2017, 

with global growth for the zones 

projected at 3.4 percent and 3.6 

percent respectively, compared to 

2.4 percent and 2.5 percent in 2016. 

“he IMF’s revised 2017 forecast 

for Nigeria also predicts a positive 

growth for the economy and positive 

indicators in the year, so far are 

all pointing to economic recovery. 

financial services, food and 

beverages, building materials, 

healthcare, manufacturing, as 

well as oil and gas sub sectors, 

collectively paid lower dividend 

this year, compared with 

the amount paid in 2016. Consequently, 

as against N7.46 

billion dividend paid in 2016, 

conglomerates firms collectively 

paid N2.29 billion in 

2017, representing a decline 

of 69 percent. 

The cumulative dividend 

These include increased oil production, 

security, improvement in 

the oil rich Niger Delta, the recent 

intervention of the Central Bank of 

Nigeria in the forex market, and inlation 

dropping from 18.71 percent 

at the beginning of 2017 to 17.24% 

as at April 2017 according to Nigeria 

Bureau of statistics”, Alintah noted. 

On the back of these developments, 

real estate is beginning to see 

positive traction. he forex market 

Williams 

Kikelomo, 

head, marketing 

services, 

Palton 

Morgan 

Holdings; 

Nick Pimm, 

director, 

commercial 

partnerships, 

and Tomiwa 

Idowu, head 

of marketing, 

Grenadines 

Homes, during 

a courtesy 

visit to Grenadines 

Homes. 

paid by firms listed in the 

healthcare sub sector, declined 

by 66 percent, from 

N1.24 billion last year, down 

to N428.40 million this year. 

Saheed Bashir, senior investment 

analyst with Meristem 

Securities, attributed this 

to the harsh foreign exchange 

regime and the general economic 

conditions in 2016. 

“Companies performances 

are worse this year, compared 

to last year. And particularly 


was its major problem, bearing 

in mind that most of the components 

of construction materials 

are imported. With the economy 

in terrible shape, the purchasing 

capacity of the people went down. 

Even those who had the capacity to 

buy, withheld their money. 

“Now however, we are seeing 

positive development. he revenue 

is beginning to improve. For more 

than a month now, there is stability 

in the foreign exchange market. 

Before now, people could not even 

get money to do their businesses. 

But now banks are sending letters 

to borrowers, asking them to come 

and borrow”, conirmed Adetokunbo 

Ajayi, MD, Propertygate Investment 

Company, in an interview. 

Ajayi expects that from a macroeconomic 

perspective, the improvement 

in the forex market will 

be sustained, and hailed the recent 

rally in the capital market, which 

has not happened in a long time. 

“As a critical part of the economy, 

my thinking is that the economy is 

beginning to gain traction”, he said. 

Continuing, he said, “we expect 

that as long as we have a steady 

environment, the right policies and 

the government continues to boost 

conidence, the economy will continue 

to improve. For the real estate 

sector, as the economy improves 

and people’s purchasing capacity 

rises, that will mean greater patronage 

of developers”. 

There has been a significant 

slowdown in the real estate market, 

leading to a considerable drop in 

both demand and price, but Ajayi 

does not believe the market is 

undergoing price correction. His 

reason is that, notwithstanding the 

economic recession, especially in 

Lagos and some other places, the 

key element of real estate is land and 

the price of land remains the same. 

“People were expecting to see 

a fall in the price of land but that 

never happened. In some cases, the 

prices even went up. What is causing 

this is because land is in the hands 

of people who have the capacity to 

withstand the bad economic conditions. 

So, those people held unto 

their property, waiting and watching, 

he said.


9



C002D5556 

COMMENT 

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The cutting of the hot cake by Banke and Olusola (II) 

BASHORUN J.K. RANDLE, OFR, FCA 

Randle is Chairman/Chief ExecutiveJK 

Randle Professional Services 

Chartered Accountants 

OLUKAYODE OYELEYE 

Oyeleye, a journalist, policy analyst, consultant 

and veterinarian writes from Abuja 

The world will be better 

off when Africa takes its 

true place in the global 

economy. In that bid, Africa 

must unlock the hidden potential 

in agriculture to jumpstart a robust 

industrial development. Economists 

of renown, in time and space, have 

established a consensus of opinion 

that industrial and agricultural 

developments are not alternatives, 

but are rather complementary and 

mutually supporting when inputs 

and outputs are considered. A 

lethargic growth in agriculture is 

therefore a hindrance to industrial 

development. 

It might be argued, with some validity, 

though, that Africa was largely 

exempted from the turmoil of food 

crisis that rocked the globe between 

2007 and 2008. his exemption was 

not a feat, but rather a symptom of 

Africa’s non-participation in global 

agricultural economy. Perhaps no 

other authority could present this 

scenario more succinctly than the 

recently-released June 2017 of the 

•Continued from last week 

The second phase will facilitate 

the maximization of 

local fertilizer production 

through the creation of a 

platform for basic chemical 

products; secure the Nigerian market’s 

fertiliser supply at competitive prices; 

and reinforce local distribution channels. 

Furthermore, the Kingdom of Morocco 

and Nigeria have agreed to 

develop integrated industrial clusters 

in the sub-region in such sectors as 

manufacturing, Agro-Allied business 

and fertilisers in order to attract foreign 

capital and improve export competiveness. 

It is most heartwarming to the 

retired partners of KPMG who are still 

awaiting their gratuity and pension that 

they have had the privilege of playing a 

minor/minuscule role in ensuring that 

both Nigeria and Morocco are committed 

to equal partnership regarding the 

governance, management and inancing 

of the projects upon which the two 

countries have embarked in order to 

head off potential revolt by jobless 

youths and marauding herdsmen as 

well as armed robbers and kidnappers 

who have combined forces with Boko 

Haram to wreak havoc and create mayhem 

in Nigeria. 

The impetus for convening the 

NIGERIA SUMMIT in Marrakesh 

appears to have been provided by the 

leaking of a highly classiied document 

by Julian Assange of WikiLeaks and his 

fellow conspirator, Edward Snowden 

the refugee CIA consultant. 

It turns out to be a carbon copy 

of the audit report on Nigeria by the 

erudite and cerebral Professor Adebayo 

Williams: 

“For those who can read political 

horoscopes of impending disaster, 

this one is palpable in its astral malignancy. 

Like a band of merry somnambulists, 

Nigerians are sleepwalking to 

a major political catastrophe with eyes 

wide open. First is the harsh reality of 

presidential ailment which in an abiding 

climate of kleptocrats and political 

pick-pockets has put a lid on purposeful 

governance and productive politics. 

his has in turn sparked of a nasty 

and barely disguised succession battle 

the like of which nobody has seen in 

this clime before. Compared to the 

Umaru Yar’Adua succession debacle, 

this one promises to be the mother 

of all political hostilities. As it is at the 

moment, Nigeria reminds one of a 

badly wounded elephant cut to pieces 

but still shambling and lumbering 

towards an inglorious inale as it emits 

a fearsome rumble. The Nigerian 

political elite have neglected to bind 

the wounds of the nation or dress its 

suppurating gashes. Now it has gone 

fearfully septic and everybody is waiting 

for the end. his cannot continue. 

A nation cannot exist on a foundation 

of political injustice and economic 

tyranny without something giving.” 

Under normal circumstances, the 

Moroccan government is very strict in enforcing 

visa requirements for Nigerians. 

Consequently, it has gone to great lengths 

to publicise its oicial website which provides 

the following information: 

“Requirements for tourism” 

•Statement of account for the last 

three (3) months 

•Introduction letter from your ofice/self 

•Photocopy of international passport 

data page 

•hree (3) passport photographs on 

white background 

•Copy of working ID card 

•Hotel voucher and light itinerary 

•Copy of Moroccan visa and other 

visas obtained 

•Travel insurance for one (1) month 

•Copy of marriage certiicate 

It was most gracious of the King of 

Morocco, King Mohammed VI to waive 

visa formalities for those whose attendance 

is urgently required in Marrakesh 

in order to ensure that the looming crisis 

in Nigeria is resolved unfailingly before 

June 12, 2017, (the twenty-fourth anniversary 

of the historic election won 

in 1993 by Bashorun M.K.O Abiola, a 

chartered accountant, who ultimately 

paid the supreme sacriice following the 

annulment of the election by General 

Ibrahim Badamasi Babaginda and the 

subsequent incarceration of Abiola by 

Babangida’s successor, the dreaded 

General Sani Abacha). 

In the meantime, “the Sunday 

Sun” newspaper’s list of the ten most 

influential Nigerian politicians who 

are urgently wanted in Marrakesh has 

gone viral: 

•Chief Olusegun Obasanjo 

•President Muhammadu Buhari 

•siwaju Bola Ahmed Tinubu 

•Former Vice-President Atiku 

Abubakar 

•General T. Y. Danjuma (retd) 

•Senate President Bukola Saraki 

•Prince Arthur Eze 

•Former Governor of Delta State- 

James Ibori 

•Governor Nyesom Wike of Rivers 

State 

•Governor Ayodele Fayose of Ekiti 

State 

he King of Morocco was alarmed 

at the deluge of protests on social media 

regarding the omission of: 

•General Ibrahim Badamasi Babangida, 

•Alhaji Muhammadu Sa’ad Abubakar 

III, the Sultan of Sokoto and 

•Lieutenant General TukurYusuf 

Buratai, the Chief of Army Staf 

To further complicate matters, 

vember 2014, the Group of Twenty 

(G-20) Leaders concluded that 

trade and competition are powerful 

drivers of growth, increased living 

standards and job creation. They 

also acknowledged that one important 

way for countries to connect to 

the global economy and develop is 

through global value chains (GVCs). 

hey stated that ”we need policies 

that take full advantage of global 

value chains and encourage greater 

participation and value addition by 

developing countries.” 

In 2013, six of the ten fastest 

growing economies in the world 

were in Africa. With an average 

annual growth in gross domestic 

product (GDP) of 5 per cent in 

recent years, the IMF projected in 

2014, this situation is likely to continue. 

With the help of investments 

from sources around the globe, 

agribusiness began booming in the 

early 2000s, and it is projected to 

become a US $1 trillion industry in 

the region by 2030. 

As posited by experts, in no other 

region is the potential for poverty 

reduction through the agricultural 

sector greater than in sub-Saharan 

Africa, where 70 per cent of the people 

live in rural areas and 90 per cent 

of the rural population depends on 

agriculture as the main source of 

income. Many transnational agribusiness 

companies have become 

involved in a number of aspects of 

food production in sub-Saharan Africa, 

including the agricultural input 

sector, farming, the food processing 

women all over the world have gone 

on the warpath over the total exclusion 

of women from the list. Not a 

single woman!! 

hose who are more discerning 

have reminded us that the political 

ferment in Nigeria is not a recent 

tragedy. It has been festering for a 

while – going back to the 2015 elections. 

Seven weeks (February 2015) 

before ballots were scheduled to 

cast, the Presidency (under Dr. Ebele 

Goodluck Jonathan) issued the following 

statement: 

“Buhari can never be President 

of Nigeria. Quote me any day any 

time. Instead of Buhari to become 

President of Nigeria, Nigeria would 

rather break. A military coup will even 

be allowed rather than for Buhari to 

become the President of a democratic 

Nigeria. Quote me any day, any time.” 

-Deji Akinyanju, Oice of the Senior 

Special Assistant to the President 

on Public Afairs, Dr. Doyin Okupe. 

Both BBC Hausa Service and 

Al Jazeera carried the response of 

General Muhammadu Buhari as 

BREAKING NEWS: 

“hey either conduct a free and 

fair election or they go a very disgraceful 

way. If what happened in 2011 

should happen again in 2015, by the 

grace of God, the dog and the baboon 

would all be soaked in blood.” 

he dog-whistle had been blown 

full blast. 

In any case, even the United Nations 

as well as the European Union 

have been severely jolted by reports 

which totally undermined the integrity 

of elections in Nigeria. A case in 

point was featured on the front page of 

“hisDay” newspaper on May 25, 2017 

Agriculture, Africa’s link to global value chain 

global Food Outlook, a publication 

of the Food and Agriculture 

Organisation (FAO). 

The Food Outlook, in all its 

geographical representation of 

global food imports and exports, 

covering major commodity categories, 

left the whole of Africa nearly 

completely blank. In its assessment 

of seven categories of major globally 

traded commodities, including 

wheat; coarse grains; rice; oil 

crops, oils and meals; meat and 

meat products; milk and milk 

products as well as ish and isheries 

products, only two countries 

in North Africa and three Sub- 

Saharan countries were involved 

in transactions in ive of the seven 

categories, and as importers. 

he only category of commodity 

in which Africa seems to make 

a good showing, although treated 

separately, has a market that is 

ardently contested by some other 

countries, essentially in the African 

Caribbean Paciic (ACP) bloc. 

According to the Food Outlook, 

exports from the three largest ACP 

banana suppliers –Cameroon, Côte 

d’Ivoire and Dominican Republic 

– have substantially expanded 

since the introduction of duty and 

quota-free access to the European 

market in 2008. he share of Dominican 

Republic means the two 

African countries are not the only 

dominant countries. 

Under the Economic Partnership 

Agreement (EPA), the ACP 

countries enjoy quota-free and 

For those who can 

read political 

horoscopes of 

impending disaster, 

this one is palpable in 

its astral malignancy. 

Like a band of merry 

somnambulists, 

Nigerians are sleepwalking 

to a major 

political catastrophe 

with eyes wide open 

duty-free access to the EU banana 

market. Although Ghana reportedly 

commenced large-scale production 

of organic bananas in 2014, and now 

exports some 50 000 to 60 000 tonnes 

of the produce each year, primarily 

to the EU, they are faced with ierce 

competition from Latin America. 

Organic banana production has 

expanded in response to growing 

consumer demand in developed 

markets, particularly the US, the UK 

and Germany. This has benefitted 

newer exporters focusing on organic 

banana production, such as Peru. 

Rough estimates indicate that organic 

banana exports amounted to 

some 800 000 tonnes in 2016, with 

the largest producers for export as 

the Dominican Republic and Peru, 

which together account for about 85 

per cent of total trade volume. Colombia, 

one of the largest exporters of 

standard Cavendish bananas, is also 

reported to operate a small but growing 

production of organic bananas. 

To become notable in the global 

market, therefore, African agriculture 

must not only improve in primary 

production, it must raise its stakes 

in value-adding activities that help 

promote its products in the market, 

locally and internationally. A lack 

of economies of scale and eicient 

transport networks, as well as a 

higher exposure to natural disasters, 

result in lower yields and higher 

production costs, intensifying vulnerability 

in the export market. But Africa 

needs to rise up to the challenge. 

At the Brisbane Summit in No- 

industry and the transportation and 

distribution of food. 

Economists at the World Bank 

are of the opinion that soaring grain 

prices and global food inlation have 

strengthened investor interest in African 

agriculture, especially because 

Africa has the land availability and 

space for farm production to grow 

signiicantly. Africa’s estimated 600 

million hectares of uncultivated 

arable land, or roughly 60 per cent 

of the global total, is a big asset that 

needs to be put into productive use. 

his will require all ramiications 

of state-of-the art technologies and 

techniques to boost productivity 

and meet the prevailing conditions 

in the global agricultural value 

chain. Across Africa, intense extraction 

of resources from the sub-soil 

has not generated inclusive growth 

– whether bitumen, coal, copper, 

diamond, gold or petroleum. 

For Nigeria, looking inwards with 

the productive utilisation of the 

enormous land resources of an 

estimated 34 million hectares of 

arable land is a good springboard 

for a switch to the green economy 

that the country’s post-oil economy 

desperately needs. With the dampening 

of the hydrocarbon markets, 

Nigeria needs to lead the way in agricultural 

export to the global food 

market. Other countries in Africa 

would follow. 

Send reactions to: 

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GLOBAL PERSPECTIVES 

OLU FASAN 

Fasan, a London-based lawyer and 

political economist, is a Visiting Fellow 

at the London School of Economics. 

o.fasan@lse.ac.uk 

When the British Prime 

Minister Theresa May 

called a snap election 

on 18 April, she did 

so to securea strong 

mandate, with a big majority in parliament. 

A strong mandate would, arguably, 

strengthen her hands in the Brexit 

negotiations with the European Union. 

Yet, as a politician, she also made explicit 

political calculations. She wanted to 

take advantage, as urged by some in 

her party, of the presumed weakness 

and unelectability of the main opposition 

leader, Jeremy Corbyn, whose 

party, Labour, was 22 points behind the 

Conservative party in the opinion polls 

at the time. Indeed, several pollsters 

and commentators were predicting a 

heavy defeat for the Labour party and 

a landslide for the Conservatives, with 

a possible majority ranging from 100 

to 150 seats! 

But, as Corbyn himself said after the 

election, “Democracy is a wondrous 

thing. It can throw up unexpected results”. 

And it did in this election! The Labour 

leader was universally dismissed 

as a complete no-hoper, who would 

Hard or soft Brexit? Britain’s dilemma after a chaotic election 

drive his party into oblivion. But what 

actually happened? Well, Corbyn didn’t 

win the election, but caused enough 

upset to prevent Prime Minister May 

from winning it. The massive majority 

predicted for the Conservative party did 

not happen. Instead, the Tories lost their 

17-seat majority! 

How a radical leftie, a political underdog, 

seemingly feeble and inconsequential, 

could rise like a phoenix from 

the ashes and cause such a political 

upset is still a subject of intense discussion 

among the political elite and 

intelligentsia in the UK. Yet, a simple 

explanation is that many people observed 

Corbyn during the campaign, in 

the TV debates etc, and liked what they 

saw. Young people turned out in large 

numbers for Labour, attracted by its 

manifesto promise to abolish university 

tuition fees! Indeed, many applauded 

Labour’s socialist manifesto, with commitments 

to tax and spend more and 

to re-nationalise privatised utilities. 

With seven years of austerity measures 

biting hard, and discontents about globalisation 

and capitalism growing, as 

elsewhere around the world, there were 

strong anti-austerity and anti-capitalism 

streaks that drew a large number of people 

to Labour’s fiercely socialist agenda. 

But let’s not overegg this: Labour 

did not win. The Conservative party still 

secured 13.8m votes, 42% of the vote 

and 317 seats in the 650-strong House of 

Commons. However, given the predictions 

of a wipe-out for Labour, its 12.8m 

votes, 40% share and 262 seats are spectacular 

results. The whole election was, 

indeed, spectacular for other reasons, 

some positive, others not. For instance, 

on the positive side, it produced the 

Certainly, the UK needs 

a national consensus on 

its Brexit strategy. But the 

Brexit referendum and 

general election have 

created deep schisms. 

Perhaps another election 

or another referendum 

would settle the issue 

largest number of ethnic minority MPs to 

date, 7 of Nigerian descent. Of the seven, 

four – Chuka Umunna, Chi Onwurah, 

Fiona Onasanya and Kate Osamor– are 

from the Labour party, while the remaining 

three– Bim Afolami, an Old Etonian, 

Helen Grant and Kemi Badenoch– are 

from the Conservative party. The large 

number of MPs with Nigerian heritageis 

truly heart-warming, and I congratulate 

all of them! 

Yet, the election result is less heartening 

for other reasons, not least the political 

chaos it has created. Because Labour 

did not win, and the Tory party doesn’t 

have a working majority, the UK now has 

apotentially unstable government. The 

Conservative party has the largest number 

of MPs, 317, but falls 8 short of the 326 

needed to form a government. To stay in 

office, it is relying on the 10 seats won by 

the Democratic Unionist Party (DUP), 

one of the sectarian parties in Northern 

Ireland. Leaving aside the potential 

implications of this alliance for the sectarian 

politics of Northern Ireland, DUP’s 

C002D5556 

10 MPs can hardly guarantee a stable 

government, especially in the febrile and 

difficult climate of Brexit negotiations. 

The Brexit talks formally start today, 

Monday 19 June, but one-eighth of the 

two-year negotiating period has already 

gone. The reality is that, whether or not 

there is a deal, the UK must leave the EU 

on 29 March 2019. Yet, even if the negotiations 

are accelerated or, albeit highly 

unlikely, even extended, what kind of 

future trade relations would the UK have 

with the EU? Unfortunately, given that 

no party won the election, there is no 

mandate for either of the two opposing 

approaches: “hard” or “soft” Brexit. Hard 

Brexit means that the UK leaves the EU 

without membership of the single market 

and the customs union, and, even, 

without any free trade deal, on the basis 

that, as the prime minister constantly 

said, “no deal is better than a bad deal”. 

By contrast, a soft Brexit means that the 

UK would leave the EU but stay in either 

the single market or the customs union, 

or both. 

However, neither of these options 

can secure a majority in parliament. 

A“hard”Brexit deal, involving the UK 

leaving the single market and the customs 

union, is not popular with business 

and a large number of the British media. 

There is also strong opposition to such 

a deal within the Conservative party 

itself, and even the DUP. Yet, those who 

want a “soft”Brexit know that in order 

to stay in the single market or customs 

union, the UK must accept freedom 

of movement and the jurisdiction of 

the European Court of Justice, in addition 

to contributing to the EU budget. 

Many would argue that this was not the 

original intent of the Brexit vote, which 

“The Super Code” – A Postmortem? 

BUSINESS DAY 

11 

COMMENT 

was, as most Brexiteers understood it, to 

allow the UK to “take control” of its own 

“borders, laws and money”. A soft Brexit 

would also defeat the UK’s “Global Britain” 

objective of negotiating trade deals 

with other countries around the world. 

Even if there is a majority for a soft Brexit 

in parliament, MPs would have to worry 

about how the British public would view 

what they might see as a betrayal of the 

Brexit mandate, particularly in relation 

to immigration. Both the Tories and the 

Labour party reject direct membership of 

the single market and the customs union, 

as well as freedom of movement, in their 

manifestos. So, it’s difficult to see how 

parliament would vote for a soft Brexit. 

But if parliament doesn’t vote for 

either a soft or a hard Brexit, what then 

happens? Well, the UK would leave the 

EU without a trade deal, and trade under 

WTO rules. Of course, this has huge 

implications. First, UK goods, which currently 

enter EU markets duty-free, would 

attract an average tariff of around 3.4%, 

and up to 10% for some goods. Similarly, 

EU exports to the UK would attract UK 

tariffs. However, far more problematic 

are non-tariff barriers, including regulations, 

which are currently harmonised, or 

subject to mutual recognition, between 

the UK and the EU. Without a post-Brexit 

deal, commercial activities between the 

UK and the EU would be cumbersome 

indeed! 

A “no deal” situation would also 

mean that the UK, once it leaves the 

EU, would no longer benefit from EU’s 

treaties with other countries, covering 

trade, regulatory cooperation, transport, 

customs etc. 


comment@businessdayonline. 

BISI ADEYEMI 

Adeyemi is managing director, DCSL 

Corporate Services Limited 

badeyemi@dcsl.com.ng 

The Financial Reporting Council 

(‘FRC’) in purported exercise 

of its powers under 

Section 50 of the Financial 

Reporting Council of Nigeria Act, 2011, 

had on the 17th of October 2016 issued 

the now suspended National Code of 

Corporate Governance which took 

effect on the same date. The much 

touted ‘Super Code’ which aimed 

to address the sectoral divergences 

and peculiarities, is in the form of a 

3-in-one Code with variations to suit 

the peculiarities of the Public Sector, 

Private Sector and Not-For-Proit Organizations 

(NPFOs). he segmentation 

of the Codes on sectoral basis was 

an attempt to answer the question of 

the workability of a code for all sectors. 

Following criticism from a cross 

section of stakeholders, the Federal 

Government suspended the implementation 

of the Code on the 7th of 

November, 2016 “pending a detailed 

review, extensive consultation with 

stakeholders and reconstitution of 

the Board”. Contending that the Code 

was overreaching and inconsistent 

with the provisions of existing 

legislation - notably the Companies 

and Allied Matters Act (CAMA), the 

Minster of Trade and Investment also 

called to question the authority of the 

FRC to issue the Code in the absence 

of a substantive Board. Following 

the appointment of a new Executive 

Secretary and a Board Chairman, it 

remains to be seen whether the Code 

has died a natural death. 

However, before we throw away 

the baby with the bath water, a review 

of some of the controversial provisions 

of the private sector Code is presented 

hereunder. 

he Private Sector Code has as its 

focal thrust the harmonization and 

uniication of all the existing sectoral 

corporate governance codes applicable 

in Nigeria (CBN, SEC, NAICOM, 

PENCOM & the NCC Codes) and was 

to have been applicable to: 

•All public companies (whether 

listed or not); 

•All private companies that are 

holding companies or subsidiaries of 

public companies; and 

•Regulated private companies 

as deined in Section 40.1.14 of the 

Code (“regulated private companies” 

means those private companies that 

ile returns to any regulatory authority 

other than the Federal Inland 

Revenue Service and the Corporate 

Affairs Commission, except such 

companies with not more than eight 

(8) employees”). 

•Board Structure & Composition: 

“No person, having retired from the 

Board or Executive management of a 

company, shall continue to exercise 

any surreptitious inluence or dominance 

over any of these two governance 

structures. Such continued 

dominance or inluence may vitiate 

the validity of the disengagement coolof 

period as provided for by this Code” 

. It has been alleged that this provision 

was targeted at speciic individuals and 

as with a few other provisions of the 

Code, is reactionary. It is also not clear 

how this provision would be enforced as 

“surreptitious inluence or dominance” 

may be diicult to prove. 

•Board Size: he Code prescribes a 

minimum Board membership of eight 

(8) for all Private Sector companies. 

However, Section 5.7 of the Code makes 

an exception for regulated private companies 

that are not holding companies 

or subsidiaries of public companies, 

to the efect that such companies shall 

have a board membership of not less 

than ive (5) out of which three (3) shall 

be Non-Executive Directors (of which 

a majority shall be Independent Non- 

Executive Directors). his provision 

runs counter to Section 246 of CAMA 

which provides that “Every company 

registered on or after the commencement 

of this Act shall have at least two 

directors”. 

•Chairman: In apparent reaction 

to the return of some MD/CEOs to the 

Boards of their respective companies 

as Chairmen, the Code provides that 

“the MD/CEO shall not go on to be 

the Chairman of the same company. 

If in very exceptional circumstances 

the board decides that a former MD/ 

CEO shall become Chairman, the 

cool of period shall be 7 years and 

the Board shall consult both majority 

and minority shareholders in advance 

and also inform the regulator of the 

appointment, setting out its reasons 

for such appointment. his shall also 

be stated in the next annual report”. 

•Independent Directors: Not less 

than half of the Non-Executive Directors 

shall be Independent Directors. 

The reclassification of an existing 

Non-Executive Director into an Independent 

Non-Executive Director on 

the same Board is not allowed. his 

provision was to have substantially 

changed the composition of many 

Boards, requiring the appointment of 

more Independent Directors. 

•Lead Independent Director 

(“LID”): The Code introduced the 

position of a Lead Independent Director 

(known in some jurisdictions 

as a Senior Independent Director) 

who is expected to ‘provide a sounding 

board for the Chairman’ and 

to serve as an intermediary for the 

other directors when necessary. It is 

submitted that this provision would 

provide some balance on the Board 

in the case of a “Super Chairman”. 

•Executive Directors: The MD/ 

CEO should not be the only Executive 

Director on the Board of Company. 

This provision does not take into 

cognizance the size and nature of the 

company’s operations and assumes 

a “one-size-its-all” posture. 

•Tenure: 

•Managing Director /Chief Executive 

Oicer: 5 years x 2 terms 

•Non-Executive and Executive 

Directors: 4 years x 3 terms 

•Independent Directors: Maximum 

of nine years. 

•Board Meetings: Where a majority 

of Independent Non-Executive 

Directors dissent on an issue before 

the Board, such decision can only 

be valid where at least 75% of the full 

Board (without reference to quorum) 

vote in favor of such decision. One 

of the most controversial provisions 

of the suspended Code which is in 

disregard of the provisions of CAMA 

to the efect that each Director shall 

have one vote. It may also create 

undue tension on the Board and the 

emphasis on the role of the Independent 

Directors takes away from the 

expectation that all Directors are to 

approach their responsibilities with 

a degree of independence. 

•External Auditors: 

•Joint Auditors: Section 19.3 of 

the Code provides that listed and 

Significant Public Interest Entities 

shall engage Joint External Auditors 

to undertake statutory audit. hese 

entities are those whose market 

capitalization is not less than =N=1 

billion and/or whose annual turnover 

is not less than =N=10 billion. In addition, 

Section 19.2.2 provides that 

for every irst statutory Auditor that is 

an international irm (i.e. one with at 

least one non-Nigerian partner), the 

subsequent statutory auditor shall be 

a National irm (i.e. one that has no 

foreigner as a partner). 

•Internal Audit: A Public Interest 

Entity shall not outsource its internal 

audit functions. 

here is no gainsaying that the implications 

of the suspended Code are far 

reaching. However, it is also apparent 

that a convergence of the numerous 

industry speciic Codes of Corporate 

Governance will engender best practice 

across sectors. hus it is suggested that 

the “Super Code” should be reviewed 

as promised with a view to harmonizing 

all the Codes in close consultation with 

relevant stakeholders. 


comment@businessdayonline.com



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 

Blackmailing the judiciary 

In the last months, the federal 

government has lost 

virtually all the high proile 

corruption cases it is 

prosecuting that came up 

for judgement. So shambolic and 

pathetic are the government’s 

cases that the judges do not even 

dim it necessary to invite the 

accused to enter their defences. 

Most of the cases have been 

dismissed straight away as the 

government could not establish 

even prima facie cases against 

the accused. But rather than accept 

blame for its incompetence 

and shambolic investigation and 

prosecution of the cases, the 

federal government, as usual, is 

trying to blackmail the judiciary 

and blame it for losing the cases. 

Consider, for instance, its 

reaction to the reinstatement of 

six of the eight suspended judges 

by the National Judicial Council 

(NJC). he government left the 

substance of the matter and tried 

to call the integrity of the judiciary 

into question, accusing the 

arm of government of derailing 

its war on corruption. According 

to Obono-Obla, Special Adviser 

to the President of Prosecutions, 

“What the NJC has done is a big 

disappointment and it seems as if 

they don’t want to cooperate with 

the executive in ighting corruption. 

Members of the public will 

not have conidence in the recalled 

judges. Investigations are ongoing 

and why will the NJC not wait? 

his is not a one-of allegation. We 

recall that a year ago, the president 

similarly accused the judiciary 

– particularly judges and senior 

lawyers – of hampering his anticorruption 

eforts. he President 

was quoted as saying the judiciary 

was his “major headache” in the 

ight against corruption. 

Eight months ago, the Department 

of States Security (DSS) in 

clear contempt of the law and 

without recourse to the NJC, the 

constitutionally empowered body 

to investigate, try and discipline 

erring judges, carried out a sting 

operation on eight judges; invading 

their residencies and arresting 

them over allegations of corruption 

and abuse of their judicial 

powers. Despite the illegality and 

unconstitutionality of the action, 

the NJC was forced to suspend the 

judges pending when they could 

clear their names in court. 

However, eight months after, 

only three of the judges have been 

charged to court till date. Of the 

three, one (Justice Ademola’s) 

case has been determined with 

the courts throwing out the cases 

against the judge. he others have 

not been charged to court since at 

all. Seeing that the executive was 

no longer interested in prosecuting 

the judges and in the spirit of 

fairness and rule of law, the NJC 

had to recall the judges. 

But hardly had the announcement 

of the reinstatement of the 

judges been made than the government 

began to shout blue 

murder, accusing the judiciary 

of trying to prevent the trial of 

the judges. Also, pronto, the Attorney 

General of the federation 

promptly iled a notice of appeal 

against the ruling discharging and 

acquitting Justice Ademola, long 

after the expiration of the statutory 

period allowed to ile notices 

of appeal. 

It is unfortunate that the government 

is shying away from 

accepting responsibility for its 

incompetence and chaotic manner 

of prosecution of cases of 

corruption. Instead of investing 

in thorough investigation of corruption 

cases before prosecution, 

the government has rather relied 

on prosecuting the accused on 

the pages of newspaper and on 

social media thinking the sheer 

weight of public opinion will force 

to judiciary to convict the accused 

regardless how it handled the actual 

prosecution in courts. 

But the courts do not owe the 

executive any duty of conviction 

of accused persons. he judiciary 

is meant to be an arbiter, a referee 

of sort, and is not expected to take 

sides in disputes. The universal 

principle of “he who alleges must 

prove” applies to the government 

too. As we have noted severally, 

shoddy, lazy and incompetent 

investigation and prosecution 

combine to scuttle the cases of 

the government. hat cannot be 

blamed on the judiciary neither 

can the judiciary lessen the burden 

of proof on the government. 

We comment the judiciary for 

standing irm even in the face of 

intimidation and blackmail by the 

executives. The judiciary is the 

inal bulwark against a tyrannical 

government and the last hope of 

the common man. hat important 

branch of government must not 

and cannot allow itself to be cowed 

by a thoroughly incompetent and 

shambolic executive arm. 

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 

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The Law Union 

MISSION 

STATEMENT 

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www.businessdayonline.com


13

14 BUSINESS DAY C002D5556 


In Association With 

Six degrees and separation 

Immigrants to America are better educated than ever before 

Far from being low-skilled, half of all legal migrants have college degrees 

JOSÉ ROMMEL UMANO, 

who is originally from the 

Philippines, moved to New 

York last autumn. He came 

on a family-reuniication 

visa and joined his wife, who 

had been living in America for 

some time. his is a typical tale: 

America gives more weight to 

close family members when 

considering immigration applications 

than some other rich 

countries do. More surprising is 

that Mr Rommel Umano arrived 

with a master’s degree from the 

University of Tokyo and 20 years 

of experience as an architect in 

Japan. Yet this, it turns out, is 

typical too. Nearly half of all immigrants 

who arrived between 

2011 and 2015 were college-educated. 

his is a level “unheard of” 

in America, says Jeanne Batalova, 

co-author of the paper containing 

the inding published by the 

Migration Policy Institute (MPI), 

a think-tank. 

One of Donald Trump’s many 

executive orders instructed the 

Departments of Labour, Justice 

and Homeland Security to examine 

immigration rules. The 

president, whose hostility to 

illegal migrants is well-known, 

has also said that he would like to 

change the criteria for choosing 

legal ones, pointing to Canada or 

Australia as models for America 

to copy. In 1967 Canada became 

the first country to introduce 

a points system for immigration; 

Canada and Australia now 

both give priority to would-be 

migrants with degrees, work 

experience and fluent English 

(and, in Canada, French). Some 

of the president’s advisers think 

this more hard-headed system 

is better than America’s familycentred 

approach. he doomed 

immigration bill from 2013 that 

died in the House of Representatives 

also relected widespread 

enthusiasm for a points-based 

system. 

Two things ought to temper 

this enthusiasm. First, Canada 

and Australia have concluded 

that pure points systems do not 

work well. A surprisingly high 

share of the people admitted this 

way ended up unemployed. Both 

countries have since changed 

their immigration criteria so that 

applicants who have job ofers 

in their pockets may jump the 

queue. Second, migrants who 

move to America to join family 

members have become much 

better educated. 

Of the more than 1m new 

green-card holders (or permanent 

residents) in 2015, the 

most recent year with numbers 

available, almost half were immediate 

relatives of citizens. A 

further 20% entered through 

preferences given to other family 

members. hat left just 14% who 

were sponsored by companies, 

about the same share who irst 

entered the country as refugees 

or asylum-seekers (a further 5% 

were lottery winners). Despite 

this bias towards families, the 

share of immigrants who arrived 

with degrees has risen from 27%, 

for those who arrived between 

and 1986 and 1990, to almost 

half now. 

America is not the only rich 

country to have seen such an 

increase. According to the OECD 

(a club of mostly wealthy countries), 

the number of college- 


We’ve got the power 

Big business sees 

the promise of 

clean energy 

American firms can offset Donald Trump’s 

pullout from Paris 

PITY America’s big businesses. 

For years their eforts to reduce 

their carbon footprint were 

dismissed by environmentalists as 

“greenwashing”. Now, after months 

trying to persuade a supposedly 

pro-business new president, Donald 

Trump, of the merits of staying in the 

Paris climate accord, he practically 

laughed in their faces by withdrawing 

on June 1st. 

Executives fear the exit will do no 

good to America’s—and by implication 

their—reputation. Not for nothing 

have more than 900 American irms 

and investors, including Amazon, 

Twitter, Target and Nike, put their 

names this week to a “We are still in” 

open letter to the UN. Its signatories 

pledge to help reduce the country’s car- 

bon emissions by 26% by 2025, in keeping 

with America’s Paris pledge. hat may be 

quixotic but is a rallying cry nonetheless. 

Indeed, some American firms are 

taking climate change so seriously that 

they are surprising even former critics. 

Alongside energy-eiciency measures, 

the strongest evidence of their commitment 

is the number of new wind 

and solar projects that they are helping 

to build around the world. Companies 

are using power-purchase agreements 

(PPAs), in which they sign long-term 

contracts to buy clean electricity from 

irms that develop solar and wind farms 

at agreed prices, instead of buying the 

bulk of their power from utilities, which 

can rarely guarantee 100% clean energy 

Continues on page 15


C002D5556 

BUSINESS DAY 

15 


The punishments of Sisi fuss 

Donald Trump’s “great friend” locks up more dissidents in Egypt 

With a green light from America’s president, Abdel Fattah al-Sisi crushes his opponents 

THE fall of Khaled Ali has 

been as swift as it has 

been absurd. Last year 

Mr Ali filed a lawsuit 

against the Egyptian 

government over its plan to return 

two islands to Saudi Arabia. he 

deal, which many Egyptians saw 

as a shameful swap of land for 

cash, sparked rare protests against 

Abdel-Fattah al-Sisi, Egypt’s president. 

So when the country’s highest 

court blocked the transfer in 

January, Mr Ali and his supporters 

whooped it up outside the courthouse. 

On May 23rd the state accused 

Mr Ali of making an indecent hand 

gesture during that celebration 

and, five months after the fact, 

arrested him. He is one of dozens 

of opposition igures detained in 

the past two months on similarly 

risible charges. The government 

has also blocked websites, raided 

homes and hobbled NGOs. Even 

before all this, Mr Sisi’s repression 

was unprecedented. But with little 

protest from America or Europe, 

and with an election coming next 

year, the president has intensiied 

his suppression of dissent. 

he government says it is acting 

in the name of security. On 

May 26th gunmen killed 29 Coptic 

Christians on a bus south of Cairo, 

the latest in a series of attacks. But 

the repression is aimed at critics, 

not terrorists. he authorities have 

targeted democratic political parties, 

such as Bread and Freedom, 

run by Mr Ali, and activists who 

have criticised Mr Sisi online. Tens 

of thousands of political prisoners 

sit in Egypt’s jails—so many that the 

state has had to build 16 new ones. 

Only China and Turkey lock up 

more journalists. Yet, still fearful of 

the press, the government blocked 

Terror on London Bridge 

Another terrorist attack sparks a debate on how to stop future atrocities 

IF TERRORISM’S success is 

measured by its disruption of a 

city’s way of life, the reaction of 

Richard Angell exposes the fanatics’ 

failure. “If me having a gin and 

tonic with my friends and lirting 

with handsome men…is what offends 

these people so much, I’m 

going to do it more, not less,” Mr 

Angell, an eyewitness to a terrorist 

attack on June 3rd, deiantly told 

the BBC. 

The details of the attack are 

grimly familiar. hree men rammed 

a van into pedestrians on London 

Bridge before stabbing people 

in restaurants and bars around 

nearby Borough Market. Eight 

minutes after the irst call to the 

emergency services, police shot 

all three dead, but not before the 

perpetrators had killed eight and 

injured dozens more. 

It was Britain’s third deadly terrorist 

attack in as many months. 

several independent news websites 

last month. 

Mr Sisi has also tightened his 

grip on NGOs with a new law that 

gives the government the inal say 

over what they do and how they 

are funded. The authorities had 

already used travel bans, asset 

freezes and prosecutions to shut 

down groups they deemed troublesome. 

his is self-defeating, say activists. 

“No one is working with the 

victims [of human-rights abuses], 

so they may be easy to radicalise,” 

says Mohamed Zaree of the Cairo 

Institute for Human Rights Studies. 

Mr Zaree himself has been charged 

with taking foreign funds and could 

face life in prison. 

Egypt’s vaguely worded laws 

are purpose-built for repression. 

NGOs must avoid such crimes 

as “destabilising national unity”. 

Mr Ali was charged with “violat- 

As after a similar incident on Westminster 

Bridge in March and the 

bombing of a concert in Manchester 

in May, heresa May expressed 

her outrage. But she went further: 

the country “must not pretend that 

things can continue as they are. 

hings need to change.” 

One of those things, she said, is 

that extremism should be curbed 

online (see International). Violent 

Islamist ideology should be more 

readily identiied and squashed. 

And Britain’s counter-terrorism 

strategy should be reviewed to 

ensure that law-enforcement agening 

public morals”, while others 

arrested recently are accused of 

“misusing social-media platforms”. 

Some members of parliament want 

to make matters worse by forcing 

users of Facebook and Twitter to 

register with the government and 

further criminalising “insults” 

against the state. 

he clampdown appears aimed 

at clearing the way for Mr Sisi to 

win re-election next year. Mr Ali, a 

former presidential candidate, was 

mulling another run. If convicted, 

he would be ineligible. He has 

little chance of winning anyway, 

but his campaign might raise issues, 

such as the islands transfer, 

that Mr Sisi would rather avoid. 

he president appears especially 

vulnerable to criticism over the 

economy. To clinch a loan from 

the IMF last year, the government 

imposed new taxes, raised the price 

Do Britain’s police need more money or more power? 

cies have the powers they need, 

including longer sentences for 

terrorism offences. She added 

that this could mean changing 

human-rights laws to restrict the 

movements of suspects and ease 

their deportation (two of the London 

Bridge plotters were foreign 

nationals). 

Few experts think that Britain’s 

police or security services lack 

powers. heirs are as extensive as 

those of any Western counterpart, 

says David Anderson, a former 

statutory reviewer of the country’s 

anti-terrorism legislation. Police 

can hold suspects without charge 

for up to 14 days, much longer than 

in most democracies. “Temporary 

exclusion orders”, only one of which 

has been issued, allow the government 

to prevent Britons merely 

suspected of ighting with foreign 

terrorist groups from re-entering 

the country. “Terrorism prevenof 

petrol and loated the Egyptian 

pound, which caused inlation to 

spike. “Ordinary people are getting 

squeezed,” says Khaled Dawoud of 

the Dostour party, another target of 

the government. 

One thing Mr Sisi can apparently 

count on is the backing of 

Donald Trump, America’s president, 

who has hosted him at the 

White House and praised the way 

he “took control of Egypt”. Mr Sisi, 

in turn, gushes that Mr Trump is “a 

unique personality that is capable 

of doing the impossible”. Such displays 

of mutual admiration make 

Egyptian activists nervous. “his is 

a disaster,” says Mr Dawoud. “Sisi 

feels he has the green light from 

Trump.” 

Mr Trump’s lack of interest 

in human rights, made clear at a 

summit in Saudi Arabia last month, 

is having efects elsewhere in the 

region. On May 23rd the authorities 

in Bahrain, a Shia-majority island 

that is run by Sunnis, killed five 

people and arrested 286 more in 

a raid on the home of a prominent 

Shia cleric. “The timing of this 

operation—two days after King 

Hamad’s convivial meeting with 

President Trump—can hardly be 

a coincidence,” says Nicholas Mc- 

Geehan of Human Rights Watch, 

a pressure group. A week later the 

government banned the country’s 

largest secular opposition group. 

Yet autocrats emboldened by 

Mr Trump’s support may not have 

a completely free hand. Mr Sisi 

waited months before signing the 

NGO law, in part due to pressure 

from American senators such as 

John McCain and Lindsey Graham. 

hey now hope to make America’s 

aid to Egypt conditional on improvements 

in human rights and 

democracy. 

tion and investigation measures”, 

also rare, impose curfews on and 

exclude from certain places those 

believed to be involved in terrorism, 

even if they have not been 

convicted. Police and intelligence 

agencies may access large quantities 

of personal data, subject to 

judicial permission. 

Criminalising actions such as 

encouraging terrorism is intended 

to allow oicers to intervene before 

more serious crimes take place, 

says Lord Macdonald, a former 

director of public prosecutions. 

During his time, at least, the wife 

of a terrorist who failed to report 

a plot was more likely to be prosecuted 

than the wife of an armed 

robber. he sentences for some of 

those lesser crimes could perhaps 

be increased, he suggests, but the 

likelihood of getting caught is a 

bigger deterrent than the severity 

of the punishment. 

Big business sees the promise... 


to their customers. 

Utilities do sign clean-energy PPAs 

as well. But in 2015, more than half the 

country’s wind-energy PPAs went to big 

companies hoping to take advantage of 

a federal tax credit before it was due to 

expire. Big business has by now spurred 

the worldwide development of a cumulative 

20 gigawatts (GW) of wind and solar 

farms (see chart on left). That is four 

GW more than the entire onshore and 

ofshore wind capacity of Britain. 

Last year it was American IT irms 

such as Amazon and Google that led the 

way. hey use clean energy to power their 

vast banks of servers (see chart on right). 

More recently, enthusiasm is extending 

beyond tech irms to energy-intensive 

industries, including manufacturers. It 

is also moving from corporate headquarters 

to subsidiaries and suppliers, and 

from developed countries to emerging 

markets, where the costs of wind and 

solar energy are falling fastest. Some 

environmentalists now see businesses 

as allies, rather than adversaries, in the 

ight against global warming, and believe 

they could become strong forces 

behind the worldwide spread of clean 

energy. “here used to be rhetoric and 

little action,” says Marty Spitzer, head of 

climate and renewable-energy policy 

in America for the World Wildlife Fund 

(WWF), a charity. “Now I see fundamental 

changes.” 

Take Anheuser-Busch InBev, for 

example. The world’s biggest brewer, 

with brands ranging from Budweiser 

to Stella Artois to Corona, has a fair 

share of millennials among its tipplers, 

and many take environmental issues 

seriously. Electricity—used as part of 

the brewing process, for refrigeration, 

and so on—amounts to up to a tenth 

of its costs, says Tony Milikin, the irm’s 

chief sustainability oicer. In March it 

set out to increase the role of renewables 

in generating power from 7% to 100% 

by 2025; as much as 85% will come via 

PPAs. “My generation, as a baby-boomer, 

looks at clean air and energy as ininite 

commodities. he generation coming 

up looks at it totally diferently,” he says.




Britain’s election 

Theresa May’s failed gamble 

The Conservatives’ botched campaign will bring chaos—and opportunities 

HER political career has 

been deined by caution. 

So it is cruel for Theresa 

May, and delicious for 

her enemies, that it may 

have been ended by one big, disastrous 

gamble. Eight weeks ago she called a snap 

election, risking her government for the 

chance to bank a bigger majority against 

an apparently shambolic Labour opposition. 

With the Conservatives 20 points 

ahead in the opinion polls, it looked like a 

one-way bet to a landslide and a renewed 

ive-year term for her party. But there followed 

one of the most dramatic collapses 

in British political history. As we went to 

press in the early hours of June 9th, the 

Tories were on course to lose seats, and 

perhaps their majority. 

he balance of forces in Parliament 

means that any number of outcomes is 

possible (see Britain section). But none 

of them will be the “strong and stable” 

government that Mrs May said the country 

needed when she called the vote. he 

talk back then was of a Conservative majority 

of over 100 MPs. he best case for 

the Tories today is a wafer-thin majority 

under a prime minister whose authority 

may never recover. Labour’s only hope of 

forming a government would be through 

a gravity-defying deal with other parties. 

Another election—Britain’s fourth 

national poll in little more than two 

years—may be on the way. 

Things fall apart 

Whoever becomes prime minister 

will very soon have to grapple with three 

crises. First is the chronic instability that 

has taken hold of Britain’s politics, and 

which will be hard to suppress. This 

week’s poll reveals a divided country— 

between outward- and inward-looking 

voters, young and old, the cosmopolitan 

cities and the rest, nationalists and 

unionists. 

he parties are in lux. Mrs May has 

led the Tories in a more statist, illiberal 

direction, with heavier regulations on 

irms and strict limits on immigration. 

hatcherites, who stiled their criticism 

out of a sense of duty or ambition, will be 

sharpening their knives. Labour, which 

under Tony Blair found an accommodation 

with the market, has morphed back 

into a hard-left socialist party under the 

leadership of Jeremy Corbyn—who, in 

contrast to Mrs May, is now unassailable. 

South of the Scottish border, two-party 

politics is back, after the collapse of the 

UK Independence Party and a disappointing 

campaign by the Liberal Democrats. 

North of the border, the Scottish 

Nationalists, while still in charge, lost 

enough seats to cast doubt over a second 

independence referendum. 

Second, the economy is heading 

for the rocks in a way that few have yet 

registered. Whereas in 2016 the economy 

defied the Brexit referendum to grow 

at the fastest pace in the G7, in the irst 

quarter of this year it was the slowest. 

Unemployment is at its lowest in decades, 

but with inlation at a three-year high and 

rising, real wages are falling. Tax revenues 

and growth will sufer as inward investment 

falls and net migration of skilled 

Europeans tails of. Voters are blissfully 

unaware of the coming crunch. Just when 

they have signalled at the ballot box that 

they have had enough of austerity, they 

are about to face even harder times. 

And third is the beginning, in just 11 

days, of the most important negotiation 

Britain has attempted in peacetime. 

Brexit involves dismantling an economic 

and political arrangement that has been 

put together over half a century, linking 

Britain to the bloc to which it sends half 

its goods exports, from which come half 

its migrants, and which has helped to 

keep the peace in Europe and beyond. 

Brexit’s complexity is on a scale 

that Britain’s political class has wilfully 

ignored. Quite apart from failing to spell 

out how to negotiate history’s trickiestever 

divorce, no politician has seriously 

answered the question of how the economic 

pain of Brexit will be shared. Less 

trade, lower growth and fewer migrants 

will mean higher taxes and lower public 

spending. Voters seem resigned to the 

fact that they were duped by promises 

of a Brexit dividend of more cash for 

the National Health Service. No one 

has prepared them for the scale of the 

hardship they will endure in its name. 

Mrs May said that her reason for calling 

the election was to get a mandate to 

negotiate Brexit along the lines she set 

out in January: to leave the single market 

and to press ahead with cuts to immigration 

that no one considers feasible. 

During the campaign, she added nothing 

to her thin Brexit strategy beyond 

resurrecting the fatuous slogan that “no 

deal is better than a bad deal”. 

Let us be clear: after this vote there 

is no mandate for such an approach. 

Only an enemy of the people would 

now try to ignore the election and press 

ahead regardless with the masochistic 

version of Brexit that Mrs May put to 

voters. here are not grounds to reverse 

the referendum result—though Nigel 

Farage, the former UKIP leader, warns 

that a new referendum may be coming. 

But the hard Brexit that Mrs May put at 

the centre of her campaign has been 

rejected. It must be rethought. 

The centre can hold 

What can come of this chaos? Britain 

is not the only country reeling from 

electoral shock. But whereas others 

were campaigned for by new leaders— 

Donald Trump in America, Emmanuel 

Macron in France—Britain’s rumbling 

revolt has left no one in charge. Mr Corbyn’s 

grip on Labour has been strengthened, 

but the party is far from winning a 

majority. he Tories remain the biggest 

party, but their leader is a busted lush 

and has no obvious successor. he Lib 

Dems remain tiny. 

And yet it is just possible that something 

better may rise from the ashes. 

Last week we lent our backing to the Lib 

Dems in this election, not because we 

thought they would win, but because 

we identiied a new gap in the radical 

centre of British politics that was being 

neglected. he election result suggests 

that voters, too, are not much convinced 

by the inward-looking bent of either Mrs 

May’s Conservatives or the hard-left 

factionalism of Mr Corbyn’s Labour. 

Our backing of the Lib Dems was a 

“down-payment” for the future. As the 

Tories ponder a new leader to replace 

the tragic Mrs May, that liberal future is 

once more in play. 

Immigrants to America are better... 


educated migrants heading to 

member countries grew by 70% 

between 2001 and 2011. Recent 

migrants to America are as likely 

to be highly educated as those 

who move to Europe are. hey 

still lag some way behind Australia 

and Canada, though. 

he result is that America has 

switched from importing people 

who are, on average, less educated 

than the natives to people 

who are better schooled. Most 

states gained in college-educated 

immigrant populations between 

2010 and 2015 (see map). Immigrants 

were more educated 

than Americans in 26 states. “his 

shift has gone unnoticed by the 

broader population and policy- 

makers,” says Ms Batalova of the 

MPI. Many people have an outdated 

notion of who immigrants 

are, conlating them with the undocumented. 

he number of undocumented 

migrants has been 

falling, but even 

they are more 

likely to have 

a degree these 

days: the MPI 

reckons that a 

ifth of graduate 

immigrants are 

undocumented. 

Nearly a third 

of refugees have 

at least one degree. 

One difficulty 

even edu- 

cated migrants face on arrival 

is that employers do not always 

recognise foreign degrees and 

experience abroad. Antiquated 

licensing requirements and 

regulations also hurt. Upwardly 

Global, a charity which helps 

skilled immigrants translate their 

CVs into American, cites the example 

of a former Médecins Sans 

Frontières doctor from Botswana 

who worked as a waiter until he 

got help to navigate the system. 

As for Mr Rommel Umano, despite 

his years as an architect and 

two degrees, he had a hard time 

getting work in his profession 

in America. Needing money, 

he took a job loading boxes in a 

New Jersey warehouse two hours 

away from his home in the Bronx. 

he charity polished his CV and 

put him through mock interviews 

and in touch with his current 

employer, a construction irm. 

here, he says the work is pretty 

similar to what he was doing in 

Japan.


17

27 


C002D5556 


CITYFile 

Troops receiving brieing before their deployment to combat kidnapping and other criminal activities within and around Ogun State 

Pic by Razaq Ayinla 

28 arrested for cattle rustling, kidnapping 

About 28 suspected cattle rustler, kidnappers, 

armed robbers and others 

involved in unlawful possession of 

prohibited irearms have been arrested 

by the police. 

Jimoh Moshood, spokesperson of the Nigeria 

Police, who briefed journalists in Abuja, 

gave the names of the suspects as Abubakar 

Ibrahim, 21, Basher Shauibu, 23, Obinna 

Ani, 37, Kenneth Edeh, 35, Uchechukwu 

Anoada 36, Gyang Dabo, 29, Idris Idris, 30, 

Denis Salami, 33, Umar Mohammed, 60 and 

Isa Ibrahim. 

Others are Lawali Ibrahim, 45, Nasiru 

JOSHUA BASSEY 

The Enugu State government 

at the weekend claimed it 

was being owed N25 billion 

by the Federal Government, 

being the money it (Enugu) expended 

on the rehabilitation of federal roads 

within the state. 

Patrick Ikpenwa, the commis- 

Abubakar, 42, Murtala Ado, 38, Ahmadu Sale, 

Muhammed Adamu, Muhammed Abubakar, 

Umra Ibrahim, and Mohammed Umara. 

According to Moshood, the suspects were 

arrested at different locations across the 

country by the Inspector-General of Police 

Special Tactical Squad (STS) and Technical 

Intelligence Unit (TIU). 

Moshood also listed items recovered 

from the suspects to include ive AK 47 riles, 

two locally made Baretta pistols, AK 47 live 

ammunition and cartridges. Others are 18 

locally-made riles of diferent calibres, 27 

rounds of live ammunition, 20 rounds of 

7.62 mm live ammunition, five magazines 

and 50 cattle. 

He explained that the suspected cattle rustler, 

kidnapper and notorious armed robber, 

Ali Bello, alias Zugange, was arrested on May 

20 in Minna, Niger. He said that the suspect 

confessed to be among the 17 robbery gang 

terrorising Niger, Kaduna state, Abuja and 

Kogi, and would would be charged to court 

on completion of investigation. 

The police spokesman appealed to the 

public to avail the police of useful and timely 

information for it to respond promptly to 

security issues. 

12, 000 to benefit from Lagos ‘Ready Set Work’ initiative 

Twelve thousand students drawn 

from various tertiary institutions 

in Lagos will benefit from the 

2017 edition of the Ready.Set. 

Work (RSW) initiative of the Lagos State 

government. 

he scheme is an entrepreneurship and 

employability initiative designed to equip 

inal year students of tertiary institutions 

with the right skills to add value to the 

society. he aim is to make the students 

employable upon leaving schools. 

Obafela Bank-Olemoh, special adviser 

to Governor Akinwunmi Ambode on education, 

said at the lag of of the this year’s 

edition of the scheme, that interested 

applicants would be able to access the 

website - www.readysetwork.com.ng from 

June 16, while the training will run from 

July 1 to September 16, 2017. 

According to Bank-Olemoh, the 2017 

edition is an improvement on that of 2016, 

as students from six institutions, as against 

three institutions last year, would beneit, 

while three centres have been designated 

REGIS ANUKWUOJI, with agency report 

FG owes Enugu N25bn, says official 

to host the training. 

he six institutions, according to Bank-Olemoh 

are Adeniran Ogunsanya College of Education 

(ACCOED), Lagos State College of Health Science 

(LASCOHET), Lagos State Polytechnic (LASPO- 

TECH), Lagos State University (LASU), Michael 

Otedola College of Education (MOCPED) and 

University of Lagos (UNILAG). 

Bank-Olemoh said out of the 12, 000 students, 

2,000 inal year students would be selected for the 

training at the three designated centres, while the 

remaining 10,000 would be selected from students 

in their penultimate year at the institutions and 

train through the online platform. 

“When the administration of Governor Ambode 

came on board, one of the issues he was 

confronted with from the private sector was that 

there were major gaps in the work readiness of 

graduates, and his immediate response was to 

come up with a scheme to equip graduates from 

our tertiary institutions with the right skills needed 

to add value to the society. 

“And so, the vision of the RSW is that every 

graduate from a tertiary institution situated in Lagos 

must have the knowledge, skills and attitudes 

required to gain meaningful employment or be 

self-employed and our plan is to train all gradusioner 

for works, who disclosed this to 

newsmen, said the federal authority 

was being expected to reimburse the 

money, to enable the state continue 

its infrastructural development for 

which it has invested N27 billion in 

the last two years. 

He said that over 141 kilometres 

of intra and inter-state roads were 

rehabilitated within the period. 

“At the inception of this administration, 

we started nine new roads 

which covered 94 kilometres and 

we have been able to complete and 

ates in tertiary institutions through the RSW.” 

He said beneiciaries of the scheme would 

be selected to participate only on competence, 

and would be trained for thirteen 

weeks on labour market, mindset reorientation, 

21st century skills, entrepreneurship, 

employability skills and teacher track. 

He said about 750 of the beneiciaries would 

be helped to secure internship placement and 

given skill for life, while there would also be 

seed funding for winners of the business pitch 

competition to be held as part of the training. 

He disclosed that plans are being worked 

out to integrate the RSW into the education 

curriculum of the state, as well as expand the 

modules and the beneiting schools in the 

coming years. 

Out of the 500 students that were registered 

for the scheme in 2016, 422 graduated 

after the rigorous training with Sarunmi Oluwafemi 

and Dada Samuel who emerged as 

the overall winners of the pitch competition 

walking away with N6 million seed funding 

and N100, 000 monthly working capital for 

six months. 

he second and third place winners also 

got N500, 000 and N250, 000 respectively 

with N100,000 working capital for six months. 

deliver about 60 kilometres of such 

projects.” 

Ikpenwa said that the state government 

had in October last year 

introduced a ‘choose your project’ 

policy, allowing local government 

councils to identify their priority 

Farmer charged with 

stabbing man to death 

A 

38-year-old farmer, Aliyu Adama, 

has been charged with 

stabbing one Nura Isiah to 

death, in Sokoto. 

The police prosecutor, Na’allah Jibo 

told a Sokoto Magistrate Court, that 

one Haliru Isiah of No. 32 Mojiyo Road, 

Sokoto reported the matter at Kwanni 

divisional police headquarters. 

According to Jibo, the accused, on 

January 1, criminally conspired with two 

others, now at large, in Kofa area of Sokoto, 

to attack the deceased with knives. 

He listed those at large to include Guti 

Mohammad and Lukman Soja. 

The prosecutor said the accused went 

to the deceased’s shop at Old Market and 

stabbed him in the stomach, adding that 

the man was rushed to the Specialist 

Hospital, Sokoto, where he was confirmed 

dead. 

The accused is facing a two-count 

charge of criminal conspiracy and culpable 

homicide punishable under section 

97 and 224 of the penal code law. 

The magistrate, Abubakar Adamu, 

on Friday, ordered for the remand of the 

accused in prison custody, because the 

court lacked jurisdiction to entertain the 

case. He said the accused would remain 

in custody until the case was properly 

transferred to the State High Court, for 

hearing. (NAN) 

Jigawa to establish 30 

additional PHCs – Official 

Jigawa government is to construct 

additional 30 Primary Health Centres 

(PHCs) across the state as part 

of the efforts to take healthcare 

services to people. 

Kabir Ibrahim, the executive secretary, 

state Primary Healthcare Development 

Agency, said at the weekend that 

the target was to reach out grassroots 

people. 

According to him, the proposed 30 

health centres will complement the 

existing 216 in the state. 

“The state needs 41 more primary 

health centres to cover all the 287 political 

wards in the state. With this, more 

than 80 per cent of required functional 

health facilities at ward levels would 

have been achieved.’’ 

Ibrahim said that the state government 

had recruited 450 primary health 

workers and posted them to health 

centres across the state. 

Accordingly, the state government 

absorbed 119 midwives from Midwives 

Service Scheme of the Federal Government, 

recruited and posted 33 midwives 

from various schools of nursing to 

health centres, he said. 

“We are in the process of recruiting 90 

more health workers to ensure that we 

have enough and required human resources. 

This is in line with task shifting 

policy recommended by national health 

policy to address human resources’ gap 

in the health system,” he said. NAN 

projects. 

“More than 35 of such projects 

were lagged-of and we have been 

able to deliver about 25 of them, 

which included 21 roads and four 

water projects. 

“he aim of the state government 

was to spend not less than N100 million 

in every local government area of 

the state under the scheme,” he said.


C002D5556 

BUSINESS DAY 

19 

LIVE @ THE STOCK EXCHANGE 

Central Securities Clearing System 

to get substantive CEO next month 

…says Pension Contribution Management System fully available to market in Q3 

Stories by 

IHEANYI NWACHUKWU 

The Central Securities 

Clearing 

System (CSCS) 

Plc will name its 

Chief Executive 

Oicer (CEO) next month, 

Oscar Onyema, chairman, 

CSCS Plc said at its 23rd annual 

general meeting held 

Wednesday at the Nigerian 

Stock Exchange event 

centre. 

Onyema said the board 

of CSCS engaged the services 

of PwC, the world’s 

leading professional services 

irm in the selection 

process. 

Since this year, CSCS Plc 

which facilitates the delivery 

(transfer of securities 

from seller to buyer) and 

settlement (payment of 

bought shares) of securities 

transacted on the approved 

Nigerian Exchanges has 

been functioning with an 

interim Managing Director/ 

Chief Executive Oicer. 

CSCS Plc enables securities 

to be processed in 

an electronic book-entry 

form thereby substantially 

reducing the period it takes 

a transaction to commence 

and end. 

Recall that the Board of 

Central Securities Clearing 

System Plc in December 

2016 named Adebola Adeeko 

as interim Managing 

Director/Chief Executive 

Officer effective January 

3, 2017. 

Adeeko has continued 

Leadway Assurance 

Company Limited 

paid N23 billion in 

claims, the largest in 

the market, to its customers 

for the inancial year ended 

December 31, 2016. This 

is further evidence of the 

promise that the company 

has kept to its customers 

over the years, maintaining 

its position as the highest 

claims’ paying company for 

over ive years. 

Making the disclosure 

at its 45th Annual General 

Meeting (AGM) held in Lagos, 

the company grew its 

assets from N137.3billion in 

2015 to N166 billion in 2016. 

Gross Premium Income 

also rose by 13 percent 

from N46.6 billion in 2015 

to N52.7 billion in 2016, an 

increase largely attributable 

to annuity business. 

Oscar Onyema, chairman, CSCS Plc 

the great work of his predecessor 

Kyari Bukar who 

resigned his appointment 

ahead of his contract expiration 

to pursue other 

interests. 

CSCS Plc has successfully 

established strategic 

alliances with peer Central 

Securities Depositories 

(CDS) within the region 

and beyond, with the objective 

of gathering intelligence 

on best practices 

and products to ensure that 

it sustains value creation for 

its customers. 

“These alliances have 

proven to be good investment 

of time and resources, 

and we look forward 

to applying the learnings 

to improve our business,” 

Onyema told shareholders 

at the meeting. 

he 2016 inancial scorecard 

shows the group recorded 

a decline in gross 

earnings from N7.6billion in 

2015 to N6.17billion in 2016. 

Also, proit before tax (PBT) 

declined to N3.72billion 

in 2016 from N5.02billion 

in 2015. Total Assets, as at 

December 31, 2016 stood 

at N27.07billion, representing 

an increase over the 

N25.40billion recorded in 

2015. he board of directors 

got shareholders’ approval 

to pay a inal dividend per 

share of 21kobo. 

“Our people are the nucleus 

of our business and we 

are committed to ensuring 

that we recruit and retain the 

best in class employees who 

can deliver on the compa- 

ny’s goals and objectives as 

we strive to position CSCS 

as the globally respected 

and leading CSD in Africa,” 

Onyema said. 

Adeeko holds a Master 

in Business Administration 

(MBA), majoring in 

Finance & Marketing from 

Hood College, Maryland 

(USA) and a Bachelor of 

Science (B.Sc.) degree in 

Accounting from Ogun 

State University, Nigeria. 

He is an alumnus of Harvard 

Business School at 

the executive education 

level. Adeeko is a lifetime 

member of the Institute 

of Directors (IoD) Nigeria 

and a Board member of 

the IoD Centre for Corporate 

Governance. 

“he foundation for any 

company that wants to 

be built to last is to have a 

business model that actually 

supports that objective,” 

Adeeko told shareholders. 

“The Pension Contribution 

Management System 

(PCMS) is another 

one of CSCS’ irsts which 

would be beneficial to 

both formal and informal 

businesses. The system 

is currently in use by our 

company and other companies 

that agreed to be 

part of our test participant 

forum to efficiently 

manage their employees’ 

pension contribution. he 

PCMS will be fully available 

to the market before 

the end of third-quarter 

(Q3) of 2017,” the chairman 

added. 

Leadway Assurance pays N23bn in claims for 2016 financial year 

Despite the depressed 

economic environment, 

investment income grew 

from N7.4 billion in 2015 to 

N10.5 billion in 2016. However, 

with increased cost of 

doing business resulting 

from inlationary pressures 

within the economy, company 

performance after tax 

increased marginally from 

N6.3 billion in 2015 to N6.6 

billion in 2016, due largely 

to gains recorded in foreign 

currency translation. 

he company also announced 

the appointment 

of three non-executive 

directors to its Board following 

the retirement of 

three erstwhile directors in 

compliance with the 2009 

NAICOM Code of Good 

Corporate Governance. 

The new appointees include 

Martin Luther Agwai, 

who now holds the position 

of chairman, Oluseyi 

Bickersteth and Odein Ajumogobia 

who are also nonexecutive 

directors. 

Commenting on the 

performance, the newly appointed 

Chairman, Martin 

Luther Agwai, expressed his 

optimism and confidence 

about the company’s successes 

and aspirations saying, 

“We are consistently inspired 

by the doggedness, unflinching 

support and patronage 

of our revered customers, 

brokers, agents and other 

stakeholders. We thank you 

for your continued loyalty and 

pledge our improved services 

to your contentment.” 

On his part, the Managing 

Director of Leadway Assurance 

Company Limited, 

Oye Hassan-Odukale stated; 

“he current realities of our 

operating environment 

appears dire and continues 

to test us on all fronts. 

However, we continue 

to find ways to deepen 

penetration of insurance 

by educating the public 

and encouraging them 

to Think Leadway once 

they have decided to buy 

insurance.” 

Martin Luther Agwai is 

a Commander of the order 

of the Federal Republic 

(CFR) and was a former 

Chief of Defence Staf of 

the Nigerian Armed Forces. 

He is pro-Chancellor of 

a Nigerian University and 

the Chairman of the Subsidy 

Reinvestment Programme 

(SURE-P). He is 

chairman and a member 

of several local and international 

boards. 

UPDC REIT reports full year 

profit decline to N1.512bn 

The Fund Managers 

of UPDC Real 

Estate Investment 

Trust (REIT) have 

released the “Trust” inancial 

statements for year 

ended December 31, 2016. 

The net income of 

UPDC REIT in the review 

period declined to 

N1.844billion from a high of 

N3.354billion in 2015. Operating 

expenses increased 

to N331.943million from 

N282.634million in 2015. 

Proit before tax (PBT) 

declined to N1.512billion 

from N3.072billion in 2015; 

while Profit after tax was 

N1.512billion from a high of 

N2.989billion in 2015. 

The UPDC Real Estate 

Investment Trust the “Trust”, 

established in June 6 2013, 

is a close-ended Real Estate 

Investment Trust which is 

listed on the Nigerian Stock 

Exchange (NSE). 

he REIT traded a total 

of 4.64million units in 2016 

and closed at a price of N10 

on December 31, 2016. 

The earnings yield on 

investment in the REIT 

as at December 31, 2016 

was 5.9percent. Its asset 

allocation shows: Real Estate 

Assets (79.84percent); 

Real Estate Related Assets 

(2.73percent); and Liquid 

Assets (17.44percent). 

“Although the allocation 

to Real Estate asset class exceeds 

the target minimum 

of 75percent, the allocation 

to liquid asset exceeds the 

maximum investment of 

10percent. This is as a result 

of the inability to ind 

qualifying real estate or real 

estate related assets that met 

UPDC REIT’s requirements. 

In order to ensure that 

the target asset allocation is 

achieved, we will continue 

to seek additional investments 

in real estate or real 

estate related assets, in the 

next financial year”, the 

fund managers stated. 

The units of the Trust 

can be bought and sold 

through a licensed stockbroker 

on the loor of the 

exchange. 

The Trust generates revenues 

for unit holders by 

investing in various income 

generating activities which 

include rental income on 

investment property, trading 

real estate equity securities on 

the stock exchange and trading 

in government securities. 

The primary objective 

of the Trust is to enable investors 

earn stable income 

while preserving capital 

over the long term. his is 

achieved by ensuring stable 

cash distributions from 

investments in a diversiied 

portfolio of income–producing 

real estate property 

and to improve and maximize 

unit value through the 

ongoing management of 

the Trust’s assets, acquisitions 

and development of 

additional income-producing 

real estate property. 

The real estate market 

was adversely afected by 

the economic recession as 

a number of new developments 

recorded slower 

take-up rate and rental 

income lowered, as tenants 

are requesting for a 

downward review of rent 

or a rent-free period. 

“Despite the macroeconomic 

challenges, Novare 

Lekki Mall, Onitsha Mall 

and Maryland Mall were 

completed and opened to 

customers in 2016. There 

is currently an oversupply 

of grade A oice space. In 

order to attract tenants, 

Landlords had to reduce 

rental rates. here was also 

a shift of the demand for ofice 

spaces from the oil and 

gas sector to management, 

consulting, technology, 

inance and other services 

sector,” UPDC REIT Fund 

Managers noted. 

According to the Fund 

Managers of UPDC REIT, 

“The performance of the 

UPDC REIT was affected 

negatively by the challenging 

macroeconomic 

environment as Victoria 

Mall Plaza Phase 1 (VMP 

1), which was occupied by 

Mobil Nigeria Limited until 

October 2015, is currently 

vacant and not generating 

income. In addition, the 

projections during the initial 

public offer of the REIT had 

assumed that the properties 

purchased by the REIT between 

2014 and 2015 would 

be sold in 2016, and would 

generate some income. The 

expected income on the assumed 

sale will not come in 

as the REIT was unable to 

acquire additional properties 

between 2014 and 2015, 

partly due to the macroeconomic 

environment 

and also because the fund 

manager could not identify 

qualifying assets which 

meets the REITS benchmark 

returns. In order to compensate 

for the unearned rental 

income on VMP1, the 

Fund Manager in consultation 

with the Investment 

Committee decided 

to discontinue the sale of 

units of Abebe Court as the 

property is currently fully 

tenanted and generating 

rental income. his implies 

that the REIT would not earn 

any capital appreciation on 

sale of property in 2016 and 

rental income on VMP1, as 

assumed in the projections. 

hese resulted in a negative 

variance of 58.37% 

between the projected income 

and actual income 

earned by the REIT as at 

June 30, 2016.”

20 


24 

Monday 19 June 2017 Monday 19 June 2017 

25

26 


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Managing 



C002D5556 

GOVERNMENT 

BUSINESS 

Interview with Public Sector Leaders 

‘I’m an advocate of home-grow 

Abia State has been nominated for the ‘Best Performing State in support of micro, small and medium enterprises (MSME) 

and the promotion of Made-in-Nigeria goods’ by the technical committee of BusinessDay States Competitiveness and 

Good Governance Awards scheduled for July 13, 2017, at Transcorp Hilton, Abuja. 

Governor OKEZIE VICTOR IKPEAZU in this interview with ANTHONY OSAE-BROWN, editor, BusinessDay, and GODFREY 

OFURUM, reveals his administration’s policy that has attracted awards to the state. Excerpt: 

Sir, we know that you 

have identiied ive 

key pillars for the 

development of Abia 

State. What informed 

your decision on these five 

pillars? 

I want to irst of all, thank you 

and thank BusinessDay Media, 

one of the most proliic platforms 

for the propagation of business 

and economic growth of Nigeria. 

I want to say that it wasn’t a 

decision that I arrived at, single 

handedly. We had a group of 

consultants that we engaged, to 

interface with some of us, who 

were, what I call the ‘nucleus of 

this government’ from inception, 

because we didn’t want to guess in 

the dark, for the simple reason that 

we were sure that resources would 

be scarce and expectations from 

our people was going to be high 

and the only option was to try to 

achieve the best within the shortest 

possible time with minimum 

resources. 

In order to achieve this, we 

needed to be sure about the irst 

steps, because every building is 

as strong as the foundation. And 

then we asked ourselves some key 

questions-one is that if you look at 

Nigeria as the father of all States, 

then it could be said that all the 

states, including Abia are children 

of somebody, who was wealthy 

before, but not wealthy now and 

Nigeria being a polygamist, every 

family has to fashion a growth 

trajectory, based on what attribute 

can lead you out of the woods as 

quickly as possible. 

And we said that we must start 

from those things that we can 

do properly. What are those 

things that we, as a people can 

do better than other people in 

Nigeria? Do we have not only 

comparative advantage, but 

also competitive advantage on 

certain aspects of the economy, 

better than other people? 

So, our response to that question, 

led us to the ive pillars of 

development and two years down 

the line, I am happy that we took 

that decision, because right here, 

we don’t need to do much to teach 

the average Abian how to cultivate 

cassava or oil palm, because this is 

what we do. 

And I have been a strong advocate 

of homegrown strategy 

for development. I do not believe 

those things Adam Smith said in 

those days, are still true today, 

because he did not experience 

ingenuity with another person’s 

toga. 

Somebody will spend eighthours 

crafting a beautiful shoe and 

after that, instead of taking pride 

in what he has produced, he will 

label it Made in Japan, thereby 

giving credit to somebody, who 

had nothing at all to do with the 

product. 

So, I said that’s a place to start. 

And I will tell you one thing again 

that is not commonplace, about 

the general thought people share 

or hold about economic developinternet, 

he did not envisage a 

global village and we must challenge 

some of those theories and 

grow at our speed, taking into 

consideration our cultural diferences, 

our strength in culture, our 

weaknesses and creating a multimix 

that can drive growth. 

I like what you said about 

Adam Smith, but that is a 

debate for another day. One 

of the key pillars is the development 

of Micro, Small and 

Medium Enterprises (MSMEs). 

Can you tell us some of the 

things that you have done in 

this area, considering the fact 

that Aba is believed to be the 

entrepreneurship capital of Nigeria 

and possibly West Africa, 

and if not Africa? 

What we saw despite the 

strength, dexterity, ingenuity and 

resourcefulness of the Aba businessman, 

was people with low 

morale, not sure of the quality of 

their products, not too proud of 

what they produce, people, who 

would label the products of their 

ment. 

Whatever you want to do in leadership, 

you must go for; irst, what I call 

social mobilization, because if you are 

unable to mobilize the people, who 

are going to work with you, you’ll not 

achieve anything. 

It is for the purpose of social mobilization 

that Gideon took his soldiers 

to the water irst, because if you go to 

war with a disillusioned army, poorly 

motivated army, army that is not sure 

of why they are even ighting, it doesn’t 

matter how much ammunition you go 

to that war with, you’ll lose.


C002D5556 

BUSINESS DAY 

29 

Managing 

GOVERNMENT 

BUSINESS 

OKEZIE VICTOR IKPEAZU 

Governor of Abia State 

n strategy for development’ 

And that was the morale of the average 

Aba person. However, I decided to 

keep my promise, which I made in my 

inaugural speech, that I will wear Aba- 

Made apparels throughout my stay in 

the Government House. I decided to 

label all my cloths, “Proudly Aba or 

Made-in-Aba, so that people will know 

and not be in doubt of the origin of the 

apparel. 

And it started reverberating. I didn’t 

need to tell Aba people what I was 

doing. So after a while the Aba tailor 

began to feel proud and today, there is 

no tailor or shoemaker that will emboss 

foreign labels on his/her products. 

hey have all gone back to labels 

Made-in Aba or Made-in-Nigeria. it is 

not about using slogan or campaigns 

over the radio or television, but it is 

thinking about how to appeal to the 

conscience of the people, because 

change must evolve from within the 

person. 

And when we saw that the people 

are accepting the campaign, we decided 

to return to the artisans and 

say we must do something about the 

procedure, processes and systems of 

production. 

We must do something about collaboration, 

creating clusters and we 

must do something about the certiication 

agencies that saw themselves 

before now as impediments, rather 

than facilitators or enablers to the inal 

product. 

And today, Abia and Aba, to the 

glory of God, was the irst State in Nigeria 

that hosted the Vice President, Yemi 

Osinbajo, when he came to launch the 

entrepreneurial clinic, which was an 

interface between small scale manufacturers 

and the certiication agencies, 

including the Nigerian Agency for Food 

and Drug Administration and Control 

(NAFDAC) and the Standards Organisation 

of Nigeria (SON). 

And he echoed this view that these 

agencies should serve as enablers. In 

fact, I have advocated that part of what 

you need when you want to reward 

NAFDAC and SON among other certiication 

agencies of Government, is 

how many companies they were able 

to register in a year and we will pay 

commensurate to how many they were 

able nurture and not how many they 

were able to stop. 

Between the small manufacturer 

in Aba and this oice in Abuja, is such 

a huge gap. People will say, if you go 

there, they will kill you, in-fact you will 

go to jail, but we have returned to tell 

them that it is a lie. 

In fact, there is nothing like fake fruit 

drink or fake soft drink. If I decide to 

create a cocktail of cashew juice with 

cocoanut juice and put my name, is it 

fake? It becomes fake when I write Eva 

wine or 5-Alive on it. 

So, we have successfully worked on 

the level of conidence of our people 

now. Beyond that, we have also gone 

into the provision of some of the things 

that we think are major impediments 

and one of such impediments is power. 

his government has led a delegation 

of the leadership of Geometric 

Power Limited to Afrieximbank to 

seek collaboration with the bank, 

so that they will inject funds and 

allow Geometric to exit from the 

imbroglio that has existed in their 

relationship with Enugu Electricity 

Distribution Company (EEDC). 

That is the bottleneck in the 

provision of constant power supply 

in the South East, Aba and in 

Abia and Afrieximbank is ready to 

support us. 

In fact, I am due for a second 

trip to Afrieximbank, which will 

culminate probably in the signing 

of memorandum of Understanding 

(MoU) in two other levels, 

apart from the one that I mentioned 

now. 

Still on power, we have procured 

a 500kva generator to support 

production in our clusters 

to ensure that these small-scale 

manufacturers have electricity to 

extend their production time and 

reduce their cost of production. 

Beyond that, we are building 

the Enyimba Leather and Garment 

City at Umukalika, in Obingwa 

Local Government Area, where 

we are going to relocate the shoe 

and garment clusters. And we are 

careful not to intervene by force 

and create a synthetic trajectory 

growth. We want growth to 

be organic, driven by the people 

themselves. 

I want to create a situation, 

whereby a collection of entrepreneurs 

under a special purpose 

vehicle would establish their own 

shoe or garment manufacturing 

factories and we are gradually 

getting to that. 

And today, over one million 

pairs of shoes leave the shores 

of Abia State, every week to the 

West coast. And by our efort, we 

have attracted close to N1.6 billion 

direct sales of shoes and garments. 

Of-course the 50,000 pairs 

of military boots, the cost is close 

to N300 million, order from the 

Nigerian Navy, the National Youth 

Service Corps (NYSC), Police, Civil 

Defence and all that. 

So, what you see today is direct 

impact on the economy of the average 

shoe maker to the extent of 

N1.6 billion that this government 

has attracted, while their sales to 

the West Coast is still ongoing. 

Ultimately, our vision is to be 

globally competitive and if we 

must be globally competitive, we 

must change our story from Madein-Aba 

to Make-in-Aba. 

What do we mean by Make-in- 

Aba? We are wooing investors to 

come and produce in Abia. And so 

we have to create an environment 

for that to begin to happen. 

And the best way to create this 

environment is to start from our 

entry points and our entry point 

has to do with the first building 

that this Government set up 

and which the Vice President 

graciously commissioned, called 

our investment House or One- 

Stop-Shop. 

I really do not know how many 

States in the country today that 

Ultimately, our vision is to be 

globally competitive and if we 

must be globally competitive, 

we must change our story from 

Made-in-Aba to Make-in-Aba 

has one-stop-shop. But I want to 

paraphrase the comments of the 

Central Bank of Nigeria (CBN) 

project manager for the South- 

East Entrepreneurial Development 

Centre (SEEDC), where the 

State Government provided N100 

million to graduates of that entrepreneurial 

centre. 

he South-East Entrepreneurial 

Development Centre was going 

to be annexed to some other 

geo-political zones, because my 

colleagues did not perceive the 

need to host that centre. 

According to the CBN oicial, 

he spent two years in one state, 

trying to persuade the State to host 

the SEEDC. hen on the average, 

for some other states, he spent 

an average of two visits, selling 

the idea to them. But when they 

arrived Abia, it took us just 40 minutes 

to sign-of and this is because 

of our one-stop-shop. 

If you go beyond our onestop-shop, 

we have secured a 

9,000-hectare piece of land, where 

we would set up the Enyimba 

Industrial Zone. This Enyimba 

Industrial Zone is seeking recognition 

as an export free zone. It is 

the best location in Nigeria. It is 

30 minutes away from Onne Port 

in Rivers State, 30 minutes away 

from the Port Harcourt Airport, 

about 40 minutes away from Owerri 

Airport. 

It has a rail line that crosses 

from Rivers, through 13 stations in 

Abia, to Enugu and to the Northern 

part of Nigeria. And it has gas 

for energy. here is no other location 

anywhere in Nigeria that can 

compare in terms of economic 

strategy than what we have. 

And we went to China with this 

story and seven days after our visit 

to China, 11 companies came and 

we are talking with them, including 

the shoe-manufacturing irm 

that is coming with $1.5 billion 

investment. 

To underscore how serious that 

business intercourse is, we are 

sending 100 Abia youths to China 

to learn how to manufacture 

shoes, the way the world wants it, 

all expense paid. 

So, this is where we are today. 

his is our journey so far and this 

is our story. We are optimistic that 

it will herald a very serious socioeconomic 

revolution in terms of 

industrialization. 

I want to speak to our greatest 

asset here and it is our people. he 

greatest thing you see in Abia is not 

oil, but our people. here is no way 

I can ind words to describe the attributes 

of the average Abia entrepreneur, 

from Bende to Aba. I used 

to inform some people that if you 

want to understand the strength 

and energy behind the Aba entrepreneur, 

go to some places in 

Aba and ask them to produce a 

human-being, the man will not say 

no, he will go to his backyard and 

start crafting something and after 

one-hour, you’ll see him sweating 

and he will bring something to you 

and say, “Is it this what you mean” 

and when you ask him to make 

him breath and talk, he will tell 

you to pay for this one irst, then 

we will talk about that one. 

An average Aba man will not 

say no, “I cannot do it”. He will 

make efort. 

That brings me to the education 

aspect of the ive pillars. 

When we hear of education, we 

are always thinking of formal 

education, considering that 

the average Abia person is 

entrepreneurial, what is your 

government’s plan to merge 

entrepreneurial spirit, which 

is most of the time anti-formal 

education and the formal education 

aspect that is needed to 

propel entrepreneurial skills? 

From the irst day of this administration, 

I knew that this 

question is going to be relevant, 

very smart question, because as a 

Scientist and even as a Christian, 

part of what you need to imbibe 

properly and let it serve as a compass 

and as a guide leading you 

forward in life is the logical transition 

of growth from one phase to 

another, ultimately culminating 

Continues on page 30



C002D5556 

Managing 

BUSINESS 

GOVERNMENT 

I’m an advocate of home-grown... 


in death. 

So, if you want to incubate technology 

and you want to promote 

small scale manufacturing, you 

must be able to create a critical 

pool of technically minded people, 

which led to the establishment 

of “Education for Employment” 

(E4E) programme, the irst project 

we launched in education. 

For our people, everything you 

want an Abia man to develop interest 

in, you must show him the apple 

at the end of the tunnel and if possible 

give him a little bit of it to eat. 

We are not frivolous people; we 

do not do anything for nothing. 

So, if you want me to go to school, 

show me what I will do with this 

education. 

Under our E4E programme, 

there is no other State and I stand 

to be corrected that has pool of 

34,000 youths, proiled according 

to skill sets, age, sex, qualiication 

and Local Government. 

And we have in Abia South 

now, the irst multi-skill development 

centre, driven by the private 

sector. Today, from that multi-skill 

centre, this State Government is 

ordering over 40,000 chairs from 

Universal Basic Education Commission 

(UBEC). 

Our UBEC funds have become an 

apple at the end of the tunnel, to get 

our people to begin to know how to 

make chairs. hen we have started 

renovation of our technical schools. 

We have 3 technical schools. 

At the end of the day, our technical 

schools coupled with the 

multi-skill acquisition centres, 

which are actually entrepreneurial 

in outlook, which is the muscle 

that will drive whatever that is 

thought in the technical school, 

has caused a new interest in technical 

education. 

We want to produce, middle 

cadre manpower that can become 

freshmen in the Polytechnic, 

freshmen in the faculty of engineering-assuming 

they want to be 

serious about that or hands men or 

tradesmen in the various factories. 

If ultimately, we begin to automate 

shoemaking and dressmaking, 

some people will manufacture 

or repair the equipment. But even 

in asking people to come and 

begin to produce in Abia, I want 

to make a prediction, I may not 

be here when this prediction will 

come to reality, Abia will become 

known more for machine tools 

than for the things that machines 

produce, if I understand the psychology 

of my people. 

his is the main focus of technical 

education in Abia. 

We have also done what I consider 

fundamental and foundational 

education, because the 

problem of education around 

here dovetails from the fact that 

no teacher can give what he does 

not have. 

If the teacher lacks understanding 

of the subject matter, there is 

no way he/she can impact knowledge 

on the pupils/students. 

And it goes back to what I said 

earlier, the morale of the teachers, 

because we have been crying so 

much about salaries of teachers, 

at times paid and at times not 

paid-and teachers wage in heaven, 

wage on earth and all that. 

his has gradually placed the 

teaching profession in an unviable 

pedestal and you hide your 

identity card, if you are a teacher, 

because it is no more something 

to be proud about. 

What it has done is that psychology 

of an average teacher has 

begun to respond negatively to 

positive things of life. he teacher 

no longer cast a glance around 

the showroom of where they sale 

good cars. Never, it is not for him to 

think about that, which is wrong. 

And so we entered into collaboration 

with an Australian 

non-governmental organisation 

(NGO), though some of them are 

Abia people, they came and began 

the retraining of our primary 

school teachers. 

And I gave them a mandate 

that before the end of 2018 that I 

will like to see my primary 3 pupil 

log into the computer, type his/her 

name, the name of his/her teacher, 

name of his/her best friend and 

subjects and log-of, that is enough 

for me. 

And for the primary 6 pupil, he/ 

she should be able to type all the 

subjects and log-of. If I can get 

them to do that, I will be happy. 

However, the teacher should also 

be ICT compliant. 

So, as I speak 250 teachers 

If ultimately, we 

begin to automate 

shoemaking and 

dressmaking, 

some people 

will manufacture 

or repair the 

equipment 

have gone through that training, 

which is on its third phase. hat 

programme became popular in 

Australia and some people in 

Australia came and brought computers 

to distribute to our schools. 

To sustain that programme, we 

will set up a primary school teachers 

continued development centre 

in Umuahia, where our teachers 

will be retrained from time to time. 

Can we talk briely on internally 

generated revenue (IGR). 

I want to see the trajectory of 

IGR and your projection going 

forward, and maybe a little bit 

of trade and commerce, one 

of the ive pillars of development? 

he IGR is a little bit problematic. 

At some point we were doing 

a 100 percent increase, because we 

were doing N400 million and sometimes 

N500 million per month, but 

at a point, we got to N1.2 billion, but 

suddenly, from February, it started 

going down again. 

I think that it is not because 

people are no longer paying, but 

we had some issues about a few 

revenue windows, which we gave 

some agents to handle, because 

IGR drive must be professionally 

handled, it must be predictable, 

people must know what they 

are supposed to pay and it must 

be uniformed, it should not be 

arbitrary. 

However, there is an attitudinal 

problem, people want to 

steal, people want to lay hands on 

money. When you say pay directly 

to the bank, they compromise the 

process, by all means. But the solution 

is automation. 

When we doubled our IGR, it 

spoke to our strategy to begin development 

in Aba, because we try 

to lay emphasis on Aba, because 

we say get Aba right and you get 

Abia. he money you get from Aba, 

you can use to develop Abia and 

that is our story. 

Trade and commerce is one 

of the ive pillars. If you ask me in 

terms of priority, if I say MSME is 

number one, then the next will be 

trade and commerce. Like I said 

earlier, we are the best traders in 

the world. 

If you doubt me, go and read 

Frederick Forsyth’s book titled 

“Emeka” he wrote it there. Forsyht 

is not an Abia man, but he said that 

people here are better traders 

than the Lebanese. 

And if that is so, naturally, it 

should be one of our pillars and I 

said to some of my colleagues that 

if you want development and you 

want to proliferate prosperity, the 

easiest way to do it, is to hand over 

wealth to an Igbo man, because 

if you go to the remotest part of 

Nigeria, you will see an Igbo man. 

And he is not just going there 

to establish his business, make 

money and come back, but he is 

going there to make money, add 

value, build a ive star hotel and 

raise his children there. 

Trade and commerce wouldn’t 

thrive if you don’t get the enablers 

right. And chief among the enablers 

are good roads and security. 

So, we decided to tackle roads 

right from my irst day in oice. 

And in doing roads, we also 

elected for ourselves roads that 

can outlive this administration. 

Not only have we done so many 

roads, we have so far commissioned 

close to 35 roads, predominantly 

in Aba. And if I count the 

other parts of Abia, we would have 

done and completed close to 42 

roads, but we are active on about 

75 road sites. 

We needed also to make bold 

and strong statements about the 

quality of the roads and other infrastructure 

that we are building, 

his is about the irst time in 

many years that three irst-class 

contractors are working simultaneously 

in the state. And there 

is no state within the economic 

bracket of Abia that has kept three 

world-class contractors, working 

simultaneously for two years. 

We have Setraco here, Arab 

Contractors and a Chinese irm 

that is doing our interchange at 

Osisioma. 

We don’t just do roads for the 

sake of just building roads, our 

roads must lead to an economic 

site, either it is leading to Ariaria 

or to Ahia Ohuru or it is helping 

you to exit the city. 

People that want to do business 

don’t want to be caught up in trafic. 

And we also pioneered cement 

pavement technology in this part 

of the country, where we do 9-inch 

concrete before asphalting. In addition 

also, it is a policy here that 

we must do drainage here, from 

end to end, for every road and 

then put streetlights, so that we 

can extend business hours. 

It has worked, because somebody 

can stay under the streetlight 

and sell corn. Today all our markets 

are booming. 

The roads that give us greatest 

headache are roads that lead 

into Aba from Akwa Ibom, Port 

Harcourt road and Owerri road. 

hough they are federal roads, but 

we recognise and understand that 

there are no federal citizens, so, we 

are doing Owerri road and we are 

coming into Port Harcourt road. 

But because federal government 

has a contractor on Ikot 

Ekpene road, we don’t want to 

interfere, but we responded by 

inding a tangent to Ikot Ekpene. 

We opened the bush and we are 

doing a 7.5 kilometer road to Ikot 

Ekpene from Aba. 

We are doing a massive reclamation 

at Ife-Obara pond, which is supposed 

to take storm water from the 

low lying areas of Aba, which Ariaria 

is within that geographical altitude. 

So, I think that with the vision 

that we have set for ourselves and 

the speed with which we are going 

and the promise from God that He 

will bless every genuine efort, we 

are conident that things will begin 

to work for us. 

Finally, where would you 

want to see Abia by May 29, 

2019, when you will be sworn 

in for a second tenure? 

First of all, I will like to see 

highly mobilised and optimistic 

Abia citizenry, conident in what 

they can do, all of them and half 

of Nigeria wearing made-in-Aba 

shoes and garments. 

I will like to see young people 

actively engaged in providing 

goods and services for the rest of 

Nigeria. I will like to see people 

that are not only educated in the 

real sense of the word, but are 

capable of producing things with 

their hands and employing other 

people. 

I will like to see beautiful cities, 

not only in Aba and Umuahia. I 

will like to see a world-class 18- 

hole golf course at Ohaia that will 

bring attention to the world about 

the beautiful undulating hills of 

Ohaia area with an event centre 

that can host the world. 

I will like to see children’s hospital 

where every child under the 

age of ive and the mother will be 

safe and healthy. 

I will like to see a situation 

where if any baby dies before his 

or her irst birthday, the Governor 

will get a report. 

I will like to see our Abia emergency 

health service from 2 ultramodern 

ambulances today, to get 

8 to 10 ultramodern ambulances, 

capable of rescuing people with 

heart attack by 2.00am.


C002D5556 

BUSINESS DAY 

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32 BUSINESS DAY


C002D5556 

BUSINESS DAY 

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Stocks Currencies Commodities Rates + Bonds Economics Funds Week Ahead Watchlist P.E 

13 quoted insurance firm’s total 

assets hit N375.81 billion Q1 

May & Baker Nigeria leads 

pack with 202% gains 

Page 34 Page 34 

COMPANIES 

Firms’ right issue hits N329.96bn 

as restructuring heightens 

BALA AUGIE 

Ni gerian 

companies 

are 

increasingly 

raising 

money to shore up 

capital and pay dollardenominated 

debts under 

threat of a weakened 

currency. 

Total right issue 

launched by seven irms 

across all sectors have 

hit N329.96 billion and 

analysts say there likely 

to be more issuances as 

companies are in dire 

need of a solid working 

capital position to support 

growth. 

Top on the lists is 

Lafarge Africa Plc, the 

country’s second largest 

cement producer, with 

a right issue of N140 

billion, half of its shareholders 

fund. 

he company said it 

needed money to settle 

a debt of N139 billion 

owed to parent company, 

Holcim. 

Total long term borrowings 

in the balance 

sheet of the cement 

maker was N105.72 billion 

in the irst quarter 

of the year while total 

liabilities stood at 

N260.37 billion. 

Lafarge has a favourable 

debt position as its 

earnings are sufficient 

to meet interest payment; 

interest coverage 

ratio of 40 times is above 

the global standard of 

SourcE: NSE,BMI. 

2.50 times. 

Next is consumer 

goods giant Unilever Nigeria 

Plc with a right issue 

of N63 billion. he parent 

company of the Nigerian 

consumer goods firm 

plans to inject the cash 

in order to settle a shareholder/related 

debt of 

$59.70 million. 

Union Bank of Nigeria 

Plc, a tier-2 lender 

said it would launch 

N50 billion right issues 

in the second quarter 

of the year as it seeks to 

accelerate growth. 

For the first three 

months through March 

2017, the lenders’ pretax 

proit dropped marginally 

by 3 per cent to 

N4.70 billion. It is trading 

at 0.37 times book 

value while share price 

closed at N5.98 as at 

close of trading on Friday. 

Share price closed 

at N53.80 as of close of 

trading on Friday. 

Guinness Nigeria has 

inalized plans to raise 

N40 billion from the 

capital market in order 

to enable the consumer 

goods firm settle the 

huge debt in its balance 

sheet and bolster working 

capital position. 

The company has 

got a $95 million lifeline 

from parent company 

Diageo to help cushion 

the effects of a dollar 

scarcity. 

Guinness needs such 

cash injection from the 

parent company because 

its earnings can 

no longer cover interest 

payment. 

Its interest coverage 

ratio of 0.63 times is 

below the global benchmark 

of 2.5 times. Little 

wonder it recorded a 

loss of N2.55 billion in 

the period under review. 


at N73 on he NSE on 

Friday. 

Forte Oil Plc has 

planned a right issue of 

N20 billion in order to 

take advantage of the 

growing opportunities 

in the downstream oil 

and gas industry. Such 

cash injection will improve 

the company’s 

capacity the to compete 

favourably with peer 

rival irms such as Total 

Oil, Mobil Oil and ConOil. 


at N55.80. 

UAC Nigeria, one of 

the largest conglomerates 

in the country, says it is 

considering a right issue 

to bolster working capital 

and strengthen the balance 

of its subsidiaries. 

he scotching operating 

environment has 

dealt a harsh blow on 

the conglomerate giant’s 

subsidiaries. Share 

price closed at N18 at 

the end of trading on 

Friday. 

SHORT TAKES 

N286.8bn 

Nigeria’s central bank on 

Friday held two auctions to sell 

treasury bills worth 286.8 billion 

naira ($939.56 million), traders 

said, as the regulator moved to 

tighten liquidity and curb speculation 

on the local currency. 

Traders said the debt sale 

reduced the level of naira liquidity 

in the money market and 

pushed up the overnight interbank 

lending rate to 15 percent, 

up from 6.7 percent where it 

closed the previous day. 

Nigeria is battling a currency crisis 

brought on by low oil prices 

which tipped its economy into 

recession and created chronic 

dollar shortages. 

he central bank has been intervening 

on the oicial market 

in the last few months to try to 

narrow the spread between rates 

on the oicial market and black 

market - where the local currency 

trades around 30 percent 

weaker. It has sold about $5 

billion since February. 

he bank drained N200 billion 

naira on Friday in a 181-day 

special treasury bill auction at 16 

percent, traders said. 

N140bn 

Nigeria plans to auction 

N140 billion ($460 million) 

in bonds on June 21, the Debt 

Management Oice said on 

Friday. 

he debt oice will sell N40 

billion of bonds due in 2021 

and 50 billion naira each of 

bonds due in 2027 and in 

2037, using a Dutch auction 

system. 

Settlement is expected the 

day after the sale. he bonds 

are re-openings of previous 

issues. 

he central bank on Wednesday 

announced plans to sell 

133.24 billion naira worth of 

Treasury bills at an auction 

next week. 

Nigeria, which has Africa’s 

biggest economy, issues sovereign 

bonds each month to 

help fund its budget deicit, 

support the local debt market 

and maintain a benchmark 

for companies to follow. 

The West African country 

expects a budget deficit of 

2.36 trillion naira this year as 

it tries to spend its way out of 

a recession. 

BusinessDay MARKETS INTELLIGENCE (Team lead: PATRICK ATUANYA - Analysts: BALA AUGIE, LOLADE AKINMURELE & INNOCENT UNAH, Graphics: DAVID OGAR ) 

BMI provides in-depth analysis and data on industries, companies, stocks, currencies, fixed income/credit, economics, regulation and factors that influence investor’s decision-making 

Email the BMI team @ patuanya@gmail.com

34 BUSINESS DAY C002D5556 Monday 19 June 2017 

Markets Intelligence 

ANALYSIS 

13 quoted insurance firm’s total 

assets hit N375.81 billion Q1 

BALA AUGIE 

1 

3 of the 1 5 

NSE insurance 

irms’ total assets 

have hit 

N375.81 billion 

in the irst quarter 

of the year as insurers 

invest premium income 

to with a view to generating 

returns. 

his represents a 5.57 

per cent or 20.03 billion 

increase from the 

N355.30 billion recorded 

in the corresponding 

period of (Q1) March 

2016. 

AIICO Insurance is 

the largest insurer by 

total assets as assets 

base of N80.85 billion 

is 21.52 per cent of the 

total igure. 

This is followed by 

AXA Mansard Insurance 

and Mutual Benefits 

Assurance with total 

Ranking of Insurers by Shareholders’ Fund 

Source: Company inancial BMI 

assets of N61.64 billion 

and N52.19 billion representing 

16.41 per cent 

and 13.89 per cent of the 

total igure. See chart. 

For the first three 

months through March 

20107, the cumulative 

shareholders’ fund 

of the 13 insurers increased 

by 4.40 per cent 

to N130.09 billion compared 

with N124.56 billion 

recorded the previ- 

ous year. 

Cornerstone Insurance’s 

total equity of 

N20.03 billion is the 

largest among the irms 

under our coverage; this 

represents 15 per cent 

of the total figure. See 

chart. 

The question in the 

minds of many experts 

is whether these firms 

have a favourable policyholders 

fund to will 

give them the leeway 

to take on more risk. Or 

whether they have the 

required leverage ratios 

that presuppose they 

can meet their obligations. 

BIG MOVER 

May & Baker Nigeria leads pack with 202% gains 

PATRICK ATUANYA 

May & 

Bake 

r 

Nigeria 

Plc is the best performing 

stock on the 

Nigerian Stock Exchange 

(NSE) in 2017. 

May & Baker has 

gained 202 percent 

this year, outperforming 

all other 

firms and the NSE 

all share index as a 

whole which is up 

23.8 percent this year 

to Friday June 09. 

The drug manufacturer 

has a market 

capitalisation of 

N2.54 billion. 

It is unclear why the 

firm is rallying but it 

was in the news recently 

for a joint venture 

agreement between 

the Federal Government 

and May & Baker 

to produce vaccines 

from 2017 to 2021. 

The drug firm is involved 

in the manufacture, 

sale and distribution 

of human 

pharmaceuticals, 

human vaccines and 

consumer products. 

The Company’s 

operating segments 

include Pharmaceuticals, 

Beverage and 

Foods. Its Pharmaceuticals 

segment is 

involved in the production 

and sale of 

human pharmaceuticals 

and human vaccines. 

Its Beverage 

segment is involved 

in the production of 

beverage drinks, including 

bottled water. 

Its Foods segment 

is involved in 

the production of 

package foods, including 

noodles. 

The Company offers 

pharmaceutical 

products for anti-diabetics, 

anti-hypertensive, 

anti-infectives, 

anti-malaria, 

analgesic, cough and 

cold, multivitamin 

and anxiolytics. Its 

anti-diabetic’s products 

are sold under 

Diatab and Diamet 

brands. Its anti-hypertensive 

products 

are sold under Cardovasc 

Retard and 

Ramitace brands. Its 

food products are 

sold under the Mimee 

brand. Its beverages 

sector is engaged 

in the bottling 

of Lily brand of table 

water.

Monday 19 June 2017 C002D5556 BUSINESS DAY 35 

REAL SECTOR WATCH 

In association with 

How are Nigeria’s manufacturing 

exports faring in global market? 

ODINAKA ANUDU 

In the face of weak oil 

price and currency 

crisis, Nigeria’s attention 

has diverted 

to increasing its export 

base to shore up foreign 

reserves and bring 

back the glory days of the 

naira. 

A closer look at the 

country’s export in the first 

quarter (Q1) of 2017 shows 

how agro commodities and 

finished products from 

Nigeria fared in the global 

market within the period. 

The numbers from the 

National Bureau of Statistics 

(NBS) showed that 

export of manufactured 

goods in Q1 2017 were 

45 percent more than the 

value attained in the last 

quarter of 2016 (Q4 2016). 

On the flip side, importation 

of manufactured 

goods was 3.3 percent lower 

than the level attained in 

Q4 of 2016. 

Another piece of good 

news was that agricultural 

export increased 82 percent 

in Q1 2017 compared 

with Q4 2016. 

The data show that 

manufactured goods worth 

N1160.8 billion (21.93 percent 

of total) and raw materials 

valued at N271.2 

billion (5.12 percent) were 

exported within the period. 

Similarly, agricultural 

goods estimated at 

N230.1billion (4.35 percent) 

were shipped out 

of the country. The agro 

commodities traded were 

sesame seeds, soya beans, 

frozen shrimps, cashew 

nuts and crude palm kernel. 

L-R: Joyce Akpata, director general, Nigerian-American Chamber of Commerce(NACC); Adebowale 

Odutola, NABD member; Olabintan Famutimi, national president, NACC; Okechukwu Enelamah, 

minister for industry, trade and investment; Adebola Williams, chairperson, NABD Committee; Gladys 

Oyewole-Makele, board member, NACC, and Marc Shiman, chief of party, NEXTT, at the African Food& 

Products Exhibition and Conference organised by the chamber in collaboration with USAID-NEXTT 

in Lagos recently 

tive total of these un-captured 

or un-recorded nonoil 

exports were valued at $ 

46.19 billion, according to 

BusinessDay calculations 

from International Trade 

Centre (ITC) data. 

The ITC obtains data on 

non-oil exports from export 

destinations whereas 

recording agencies at the 

Nigerian ports do so at the 

point of exit. 

Real Sector Watch’s independent 

findings show 

that Nigeria exports other 

items such as bathroom 

slippers, aluminium and 

scraps, plastics, beverages, 

wood, packaged foods such 

as cooked yams and stew, 

sausages, biscuits and rice, 

among others. 

Nigeria’s packaged foods 

are in high demand in Ivory 

Coast and Senegal, just as 

its bathroom slippers are 

needed in Burkina Faso, 

according to exporters. 

But the volumes are 

small and the most of the 

exports are done mainly to 

the West Africa. 

However, the first quarter 

data from the NBS is 

a reminder that the value 

of manufacturing exports 

from Nigeria is still low. For 

instance, what occupied a 

great percentage in export 

of manufactured goods 

were refrigerated vessels 

and processed cocoa beans. 

So, where are beverages 

and food, which occupy 45 

percent of Nigeria’s manufacturing 

sector? Where 

are the cables and wires 

(which are better than the 

Chinese) or drugs, finished 

Aba shoes, and fashion 

products? 

Similarly, the goods that 

dominated the raw materials 

export section were 

urea, double salt, mixture 

of ammonium sulphate and 

leather, which is turned into 

pairs of shoes by Italy and 

brought into Nigeria. 

“You cannot export 

more than you produce,” 

It is common knowledge 

that Nigeria’s export is predominantly 

crude oil or 

minerals. 

This was visible in the 

trade data, which showed 

that Africa’s biggest economy 

exported mainly mineral 

products worth 2,860.4 

billion, which was 95.2 

percent of the total export 

value within the period. 

A comparison with the 

Q1 2016 shows that Nigeria 

may not have made progress 

in its non-oil export 

drive in the last one year. 

In Q1 2016, for instance, 

mineral products worth 

1,054.1 billion were exported. 

But this was only 

83 percent of the total export 

within the first three 

months of last year. 

According to the NBS, 

total manufactured goods 

exported within the period 

were valued at N98.2 billion. 

This was dominated 

by refrigerated vessels 

exported to Spain worth 

N20.6 billion. Also, good 

fermented Nigerian cocoa 

beans valued at N12.5 billion 

was exported to the 

Netherlands. 

The data likewise 

showed that urea, computed 

as raw material, worth 

N2.4 billion was exported 

to United States. Double 

salt and mixture of ammonium 

sulphate worth 

N2.5 billion were exported 

to Brazil. Leather valued at 

N1.8billion was exported 

to Italy. 

However, this may not 

tell the whole story considering 

that a number 

of products leave Nigeria 

without being recorded. 

Between 2009 and 2013, 

for example, the cumulasaid 

Joel Agbiyi, manufacturer 

in south-eastern part 

of Nigeria. 

“Your products first of 

all need to compete locally 

before exposing them to 

outside competition. Let 

me tell you, with the cost 

of production in Nigeria, 

only few manufacturers 

can take the risk of export. 

When the government says 

‘export’, I laugh because 

many Nigerian exporters 

are really struggling in the 

global market due to poor 

competition,”Agbiyi said. 

Jon Tudy Kachikwu, 

CEO of Jon Tudy Interbiz, 

an exporter, wondered how 

export of finished goods 

would improve when multiple 

agencies would collect 

money from exporters. 

Kachikwu said until exporters 

were allowed to 

take their proceeds at the 

market rate, the country 

might not make headway. 

Ede Dafinone, chairman, 

Manufacturers Association 

of Nigeria Export 

Group (MANEG), told this 

newspaper that one of 

the reasons for the country’s 

low non-oil exports 

was the Export Expansion 

Grant (EEG) implementation. 

“Without the EEG most 

exporters are reluctant to 

go into the global market,” 

Dafinone, who is also the 

CEO of Sapele Integrated 

Industries, said. 

“The EEG was meant to 

reduce the cost of exports 

for products going outside 

the country, but since 

its suspension, exporters 

have been reluctant. It has 

just been reinstated and 

things could change once 

its implementation begins 

in full,” he said. 

Manufacturers who 

spoke with Real Sector 

Watch identified high 

energy cost, weak nairadollar 

exchange rate, low 

local patronage, and lack 

of good infrastructure as 

reasons why manufacturing 

exports were not doing 

well in the global market . 

“The Manufacturers Association 

of Nigeria (MAN) 

believes that given the 

reality of today’s world and 

the current stagflation in 

the economy, our nation 

can ill-afford to rely on 

exporting raw commodities 

such as crude oil and 

natural gas, solid minerals 

and unprocessed agricultural 

products. We need 

to break this cycle and 

invoke deliberate efforts to 

industrialise our economy, 

which is consistent with 

government policy on improving 

ease of doing business,” 

MAN says in a recent 

statement.



REAL SECTOR WATCH 

Pains, gains of Nigeria’s 

non-oil trade with China 

Stories by ODINAKA ANUDU 

“ 

China is doing more 

harm to Nigeria 

than good,” Samuel 

Udikong, a beverage 

marketer, 

told me in Lagos on December 

9, 2016. 

“How do you mean?” I asked. 

“Almost everything imported 

into Nigeria from China is substandard 

or outright fake. Look 

at the light bulbs. Most of the 

ones we use here are from China. 

hey hardly last longer than two 

weeks,” Udikong said. 

“If you buy Chinese pair of 

shoes today, be ready to hand it 

over to a cobbler in the next two 

months,” he said, shaking his 

right ist. 

“I recently bought a ballpoint 

pen made by China. It did not last 

for a week. I had to buy another 

one made by the United Kingdom. 

I am still using till today, 

two months after,” he added. 

“But Nigerian consumers want 

cheap products,” I quipped. 

“Consumers all over the world 

want cheap products. Last year, 

a poll was conducted by Associated 

Press and GfK in the 

United States. he result of the 

poll showed that the majority of 

Americans preferred lower prices 

rather than paying a premium for 

products labelled ‘Made in USA’, 

even if it means bringing those 

cheaper items from abroad. So 

consumers are the same everywhere,” 

he argued. 

I paused. Superior argument. 

Consumers are the same everywhere. 

“But you have regulators, don’t 

you?” I asked. 

“Leave those people. How 

will they even know that Chinese 

products are substandard? We 

are in trouble in this country,” he 

retorted. 

Udikong’s sentiments capture 

the views of many Nigerians 

about China, world’s fastest- 

growing major economy. And 

facts support their sentiments. 

In June 2015, the Standards 

Organisation of Nigeria (SON), 

Nigeria’s regulator of products, 

intercepted 10 containers of suspected 

fake baby diapers worth 

over N200million imported by 

three Chinese nationals. 

In February this year, two 

Chinese men, Taolung Shen and 

Xu Jing Yao, were arrested by the 

SON in Lagos for alleged importation 

of fake and substandard 

tyres into Nigeria. 

The Chinese company, Sino 

Nigeria Import and Export Limited’s 

warehouse, located in Lagos, 

was also sealed up by the SON. 

Currently, importers of fake 

tyres from China that killed James 

Ocholi, former minister of state 

for labour, are still at large, according 

to security sources. 

he thinking among Nigerian 

populace, particularly consum- 

ers, is that China is the biggest 

importer of substandard products 

into Nigeria. 

But trade analysts believe that 

Nigeria also shares the blame. 

“he truth is that it is a mix of 

Nigerians and Chinese that are 

importing fake and substandard 

products from China. Nigerians 

go there and make their request 

and Chinese manufacturers give 

them what they want,” said Ede 

Dainone, chairman of the Manufacturers 

Association of Nigeria 

Export Group (MANEG). 

Muda Yusuf, director-general 

of Lagos Chamber of Commerce 

and Industry (LCCI), said it was 

a question of regulation. 

“It is what Nigerians ask that 

China produces. It is a question 

of strengthening our own institutions 

to make sure they do what 

they are supposed to so,” Yusuf 

said. 

China itself has recognised 

this phenomenon. In August 2016 

Ren Xiaoping, a former Chinese 

Ambassador to Namibia, said 

measures were being taken to 

ensure that the goods exported 

from China to Africa were of 

good quality. 

“We do not want Africa to 

think we only dump fake products 

in their markets. This is 

not the essence of the relationship,” 

Xiaoping said at the 2016 

Seminar Course for Information 

Officers and Journalists from 

English-Speaking African Countries 

in Beijing. 

However, Nigeria and China 

have enjoyed closer non-oil 

trade relations. The value of 

trade between Nigeria and China 

stood at $9.5 billion (about 

N3.53 trillion) in 2016, according 

to Zhao Linxiang, economic 

and commercial counsellor of 

the Chinese Embassy in Nigeria. 

According to the National 

Bureau of Statistics (NBS), China 

had the largest import share 

into Nigeria (16.79 percent) in 

the irst quarter (Q1) of 2017. 

Total Chinese exports to Nigeria 

in Q1 of 2017 were valued at 

N383.9 billion. China’s exports 

to Nigeria range from leather 

shoes to textiles and light bulbs. 

But the trade is largely lopsided 

as China does not appear 

in Nigeria’s first five export 

countries, which include India, 

USA, Spain, Netherlands and 

France. 

Checks show that China buys 

mostly raw materials from Nigeria, 

including animal skins, nuts 

and vegetables. 

Similarly, China has pumped 

$ 2.2 billion dollars into the Nigerian 

economy so far. 

he immediate past federal 

government secured $1.1billion 

from China Export-Import Bank 

for the construction of the Abuja 

light rail, the Federal Capital 

Territory Administration, the 

National Security Development 

System and four airport 

terminals. In February this 

year, Nigeria secured $1.5 billion 

counterpart funding from 

China for the Lagos-Ibadan rail 

project. he Asian country has 

also approved about $6.1 billion 

for Nigeria’s rail projects. 

“A lot of capital has come into 

Nigeria from China,” said Yusuf, 

earlier cited. 

“There have been many 

gains. A lot of government infrastructure 

projects are from 

China. We need to maximise 

these gains,” he said. 

Ike Ibeabuchi, CEO of MD 

Services Limited, a servicing and 

manufacturing concern, said it 

was important to balance the 

trade. 

“Nigeria should embark on 

road shows to enlighten Chinese 

investors on what Nigeria’s solid 

minerals, mechanised agriculture 

and manufacturing can do 

for them,” Ibeabuchi said. 

We are looking for naira to buy dollars, say small-scale manufacturers 

Despite availability of 

dollars in the foreign 

exchange market, 

small-scale manufacturers 

say their biggest headache 

is how to get naira with 

which to buy dollars. 

“he dollar is available. he 

$20,000 for small and medium 

enterprises per quarter is available 

to us but we need naira to 

buy dollars,” said Segun Kuti- 

George, chairman, Nigerian 

Association of Small-Scale Industrialists 

(NASSI), Lagos State 

Chapter. 

“Funding is needed now 

more than ever considering 

the fluctuations of the nairadollar 

exchange rate. Even at 

the current exchange rate, our 

cash-low has depleted,” Kuti- 

George said. 

He said he was aware that 

the federal government was 

putting measures in place to 

ensure that the Development 

Bank of Nigeria (DBN) worked, 

but wondered when small-scale 

manufacturers would start ap- 

plying for loans. 

“When will the DBN begin to 

give loans? When are we going to 

start applying for loans? Nobody 

seems to be saying anything. I 

understand that government has 

appointed a managing director 

but nobody is talking,” he stated. 

According to him, the Lagos 

State Employment Trust Fund 

(LSETF) was a working model 

which the federal government 

should emulate in trying to fund 

small businesses. 

“he LSETF has brought some 

relief to us. People have accessed 

loans of N5 million and below. 

hat is the way to go,” he added. 

Similarly, the Lagos Chamber 

of Commerce and Industry 

(LCICI) said increasing liquidity 

challenges in the inancial system 

was already hitting many companies 

hard. 

“Some companies are not able 

to draw from facilities to fund 

their forex requirements. This 

is taking a toll on the business of 

these companies as some of them 

cannot provide the cash backing 

for forex demands. he liquidity 

problem is a consequence of the 

mopping of liquidity in the inancial 

system, the tight monetary 

policy stance and the increasing 

crowding-out efect of the private 

sector by government borrowing 

in the inancial system,” the LCCI 

said in a statement signed by its 

director-general Muda Yusuf. 

he chamber called for a relaxation 

of the inancial system 

liquidity to aid business growth 

in the country.


C002D5556 

BUSINESS DAY 

37 


Start-Up DIGEST 

TOOLKIT FOR ENTREPRENEURSHIP 

How N100,000 turned Lawal 

into a mega entrepreneur 

JOSEPHINE OKOJIE 

Lawal Akintayo 

is the chief 

executive 

o f f i c e r 

of TCMB 

Professional Services 

Limited, a health 

business that is focused 

on medical billing, debt 

recovery and claims 

reconciliation. 

Having gained 

experience in the health 

sector for five years, 

Lawal was inspired to 

start a mega enterprise 

as he wanted to provide 

solutions to some of 

the challenges faced by 

players in the industry. 

To provide health 

solutions to Nigerians, 

he established TCMB 

Professional Services 

Limited in 2015. 

Lawal had to take up 

a loan of N100, 000 from 

a money deposit bank 

to setup his business, 

a loan which he fully 

repaid after the first 

month of operation. 

The Business 

Administration 

graduate said his 

business was able to 

achieve this feat because 

of consistent hard work 

and its willingness to 

seek other opportunities 

within the sector. 

Today, Lawal’s 

services are in high 

demand in the industry. 

When asked how 

his business had been 

surviving recession, 

Lawal said that 

despite the economic 

downturn impacting 

businesses negatively, 

his enterprise had 

continued to grow 

because of the array 

of services it currently 

rendered to its 

customers. 

“Everybody is looking 

for more customers and 

part of our services is to 

help providers to get and 

retain the customers. 

Our mission is to 

contribute to the growth 

and profitability of our 

clients’ businesses,” he 

said. 

When asked what his 

biggest challenge was, 

Lawal said they were 

breach in contractual 

agreement and poor 

accessibility to funds.He 

stated that trust was also 

Lawal Akintayo 

a big challenge to his 

business as most of the 

players in the industry 

always preferred giving 

contracts to businesses 

with big names, giving 

little or no room for 

start-ups. 

Poor power supply 

and tough business 

environment were taking 

toll on his business, he 

said, adding that the 

business had survived 

and grown despite 

pressures. 

“The challenges 

are huge but what we 

are doing differently 

at TCMB Professional 

Services Ltd is to help 

providers harness 

their full potential by 

reducing outflows and 

increasing inflows. 

Our services include 

HMO/medical billing, 

debt recovery, claims 

payment reconciliation 

and logistics,” he said. 

“So what we basically 

do at TCMB is to take the 

administrative burden 

off health practitioners 

and allow them to 

concentrate more on 

the clinical aspect of the 

business,” Lawal added. 

He stated that the 

Federal Government 

could revolutionise the 

health sector through 

the provision of funds 

for private hospitals 

to enable them source 

for important medical 

equipment. 

“Government needs 

to come up with a 

special loan package 

with zero interest rate 

for private health care 

practitioners to acquire 

the needed equipment 

and consumables 

because they do not 

come cheap,” he said. 

“Government needs 

to revise the laws 

governing the national 

health insurance 

scheme because you 

cannot be the player and 

the referee in a game,” 

he further said. 

The Business 

Administration 

graduate said he would 

tell his younger self to 

look out for problems 

in the society and 

provide solutions for 

them. He would equally 

tell his younger self 

to be prayerful, avoid 

distractions and be 

passionate about 

realising his dreams, he 

stated. 

When asked how 

Nigeria could grow its 

health sector, he opined 

that government must 

dialogue with all the 

stakeholders in the 

sector to develop a 

blueprint on ways 

to move the sector 

forward. He also called 

for increased funding 

of research to the sector. 

“To grow the health 

sector in Nigeria, 

government needs to call 

relevant stakeholders to 

brainstorm and develop 

a footprint, increase 

funding and also 

participate actively in 

research that will benefit 

the health sector,” Lawal 

said. 

Fate Foundation trains 

122,200 entrepreneurs 

...to hold annual dialogue on entrepreneurship 

JOSEPHINE OKOJIE 

FATE Foundation, 

Nigeria’s leading 

n o n - p r o f i t 

organisation that 

is promoting business 

and entrepreneurial 

development in the country, 

has trained over 122,200 

entrepreneurs with skills and 

provided support needed to 

start, grow and scale up their 

businesses. 

According to the nonprofit 

organisation, 

65 percent of these 

entrepreneurs are still 

running their businesses 

with a minimum of two to 

three full time employees. 

“ T h r o u g h 

entrepreneurship training, 

mentoring, consulting and 

advisory services speciically 

tailored to aspiring and 

emerging MSMEs in Nigeria, 

FATE has trained over 5,200 

entrepreneurs in her full 

term programmes, 45,000 in 

her short courses and over 

72,000 young Nigerians in 

her youth entrepreneurship 

training programmes,” said 

Adenike Adeyemi, executive 

director, FATE Foundation at 

a recent press brieing held 

in Lagos. 

Also, the organisation 

will be holding its third 

annual dialogue series 

on entrepreneurship 

with the theme, ‘Scaling 

Entrepreneurship: How 

State-Led Efforts Can 

Unlock Youth Potential’ and 

a presentation of the full 

report on the Mapping of the 

Nigerian Entrepreneurship 

Ecosystem. 

The dialogue series 

would be chaired by Nasir El 

Rufai, governor of Kaduna 

State with other eminent 

panel of speakers, which 

include Jumoke Oduwole, 

commissioner for wealth 

creation and employment, 

Lagos State; Babatunde 

Durosinmi-Etti, director, skills, 

education and enterprise, and 

the British Council, amongst 

others. 

“While developing the 

research report last year, it 

was apparent to us that 

there was a need to focus on 

entrepreneurship growth and 

development at state or subnational 

levels if we are to see 

the expected socio-economic 

impact on growth and 

development,” said Adeyemi. 

“It was also clear that youth 

entrepreneurs had enormous 

potential to positively impact 

and scale the micro, small and 

medium enterprise sector 

in Nigeria. This thinking 

influenced the theme of 

discourse this year as well as 

the choice of speakers,” she 

added. 

To date, FATE has hosted 

two successful policy dialogue 

programmes that discussed 

the findings of its research 

reports on the MSME 

space in Nigeria and the 

Nigerian Entrepreneurship 

Ecosystem. 

The dialogue series is 

scheduled to hold on 

Thursday June 22, 2017 at 

Four Points by Sheraton, 

Lagos. 

Opportunity beckons on fashion 

entrepreneurs in November 

…as 4000 retailers set to attend Home Décor and Giftware Nigeria Expo 

ODINAKA ANUDU 

More than 4000 

informal and 

formal retailers are 

set to attend this 

year’s Home Décor and Giftware 

Nigeria Expo, which promises to 

attract over 100 international and 

local suppliers and distributors of 

homeware, fashion, body-care, 

homecare, household electrical 

& electronics, furnishing, interior 

décor, textile, crafts and gift items. 

This will help local 

entrepreneurs as international 

companies from South Africa, 

Turkey, China and India will be 

attending. 

The event is being organised 

by the Retail Council Nigeria 

(RCN), the National Association 

of Market Women and Men 

of Nigeria (Informal retailers 

association), government 

agencies, in association with 

Clarion Events West Africa. 

The expo holds from 14 to16 

November at Landmark Event 

Centre, Victoria Island, Lagos. 

According to Solomon 

Kayode Onofowokan, president 

of Retail Council of Nigeria,“the 

formal retail market has 

witnessed unprecedented 

growth in recent years largely 

owing to the injection of 

international brands from 

China, India, Italy and UK into 

the Nigerian market. RCN 

Mmbers are eager to make new 

connections with international 

manufacturers and network 

with stakeholders from both the 

formal and informal market”. 

According to Bunmi Aliyu, 

event manager, Home Décor and 

Giftware Nigeria Expo, Clarion 

Events West Africa, “This first of its 

kind event will give opportunity 

for manufacturers of home-ware, 

household products, consumer 

electronics and Kitchenware to 

engage directly with contract 

buyers, distributors and retailers 

who are looking to place bulk 

orders, as well as give export 

opportunities via B2B matching 

with over 4000 registered high 

value buyers across West Africa.”



C002D5556 

Start-Up DIGEST 

Bamidele’s dollar-spinning tech start-up 

ODINAKA ANUDU & JOSEPHINE OKOJIE 

Bamidele Onibalusi is 

the founder of Deloni 

Enterprise. Onibalusi 

is a technology expert 

with over six years’ 

experience. Here, he reveals what 

inspired him to set up his tech 

start-up and how it has grown 

since starting. 

What inspired you to set up a 

tech start-up? 

The ease and comfort with 

which I can make an impact 

and earn an income inspired 

my technology business. It was 

my passion for technology that 

inspired me to set up this business. 

Through my digital online 

platform, I easily and conveniently 

update people. Technology makes 

it easy for anybody and everybody 

to easily and comfortably achieve 

their dreams and make an impact 

and I enjoy it. 

What was your initial start-up 

capital? 

I started my business with N15, 

000, which I used in registering 

my website and purchasing what 

is called ‘hosting’. Today, the 

business is worth over hundreds 

of thousands. 

Did you take any loan from 

any inancial institution? 

No. 

Do you have employees? 

I have four employees and they 

are all full-time staf. 

What are some of the 

challenges you face? 

he biggest challenge I have 

faced since starting my business 

is poor power supply and Internet 

access. When I started my online 

business, power was very erratic 

and it was practically impossible 

to get good Internet access. 

hings are much better now with 

the Internet, but power has not 

improved and the price of fuel has 

also increased. his has shot up 

my production cost. 

How do you think the 

government can address some 

of these challenges? 

I think government should 

really look into the power issue 

and consider alternative energy 

solutions. Currently, I use a solar 

system, and that means I have 

power practically 24 hours a day. 

his has improved my productivity 

immensely, and I can’t imagine 

life otherwise. I can only imagine 

how much productivity is being 

stiled and how many youths are 

being rendered powerless on a 

daily basis due to lack of power. 

Addressing the challenges 

that face entrepreneurs is an 

on-going project. When we scale 

one obstacle, there will be others. 

Even the US- which has always 

Bamidele Onibalusi 

championed entrepreneurshiphas 

its own difficulties. The 

important thing is for government 

to move in the right direction 

and engage entrepreneurs at 

each stage of the journey to 

understand their difficulties. 

Government intervention will 

always be needed but it must 

not do what the entrepreneur 

should do. herefore,. occasional 

Ggvernment-entrepreneur 

engagement is needed. 

How have you been surviving 

recession? 

While Nigeria is in a recession, 

I mainly deal with clients and 

customers in Europe, America and 

other parts of the world. I also earn 

my income in dollars and convert 

at the current exchange rate. his 

ensures that the recession has little 

or no impact on me. 

What would you tell your 

younger self? 

I will tell my younger self to 

think big. You can only limited by 

yourself. I will also tell my younger 

self to take more bold and big 

decisions. If you aren’t willing 

to take big decisions, you can’t 

achieve big results. 

The government is talking 

about diversiication, what role 

can technology play? 

Technology is the biggest 

solution to Nigeria’s economic 

woes. The country would see 

remarkable results when we use 

our resources holistically and then 

use technology to jump-shoot the 

productivity of the diversities the 

economy would spread into. For 

example, how about using satellite 

imagery in developing irrigation 

strategies for the northern part of 

Nigeria to curb dryness and ensure 

that they have year-round food 

production. herefore, technology 

can play the role of productivity 

enhancement and give lots of 

dynamism to the results from the 

planned diversification, rather 

than seeing it as a focus. 

SMEDAN, GEMS3 collaborating to drive 

MSMEs development in Nigeria 

The micro, small and medium 

enterprises (MSMEs) sector 

is one of, if not the most important 

sector of the Nigerian 

economy. 

MSMEs currently represent 96 percent 

of the businesses in Nigeria and 

contribute 7 percent to the national 

employment. 

Of the 37.06million MSMEs in 

Nigeria, over 36.99 million are microenterprises, 

according to the NBS/ 

SMEDAN Report 2014. Growth in 

this sector is directly correlated with 

growth in the economy as a whole and 

in the level of employment throughout 

Nigeria. Unfortunately, this growth is 

not being realised and research has 

revealed that there are three major barriers 

causing this. 

These are: very low access to affordable 

inance, poor access to Business 

Development Service Providers 

(BDSPs), lack of business experience, 

inadequate infrastructure and a corresponding 

high cost of doing business. 

To address some of the challenges 

above, the Small and Medium Enterprise 

Development Agency of Nigeria 

(SMEDAN), which is by law charged 

with the responsibility of designing 

policies to support the MSMEs sector in 

Nigeria, in conjunction with the DFID- 

UK funded Growth and Employment 

in States (GEMS3) programme, has 

developed a national framework for the 

accreditation of Business Development 

Service (BDS) providers in Nigeria, as 

well as a Credit Information Portal for 

MSMEs. 

The Accreditation Framework is 

aimed at promoting the development 

of capacity, recognition and regulating 

the practice of Business Development 

Services in Nigeria. Among other things, 

this will lead to the establishment of a 

register of BDSPs, which will include 

confirmed locations, websites and 

specialisations of the people behind 

each irm. his data will be available 

to banks, development inance institutions, 

microfinance Institutions and 

MSMEs in general. 

The Credit Information Portal is 

a web-based platform that hopes to 

bridge the information barriers faced 

by MSMEs in accessing finance and 

creating new channels of engagement 

for micro-finance and commercial 

banks by providing a streamlined and 

simpliied source of loan information for 

MSMEs and assisting the process of securing 

credit for personal and business 

needs. he portal can be accessed via 

the URL: http://www.smedan.gov.ng/ 

cip. 

At the joint launch of the accreditation 

framework and re-launch of the 

Credit Information Portal recently in 

Lagos, it was revealed that many MSME 

operators have had negative experiences 

when they procure the services 

BDSPs resulting in lack of credibility 

in such services. Although, there are 

several constructive activities being 

carried out to improve the market for 

such professional services, there is no 

uniformity or standardisation of service 

provision, mainly due to the lack 

of a robust framework to regulate and 

standardise the activities of the BDSPs in 

Nigeria. he launch event also featured a 

demonstration of the Credit Information 

Portal and an overview of the process of 

gaining access credit. 

At the occasion, Aisha Abubakar, 

Minister of State for Industry, Trade 

and Investment, promised the Federal 

Government’s full support and 

commitment to the programme. She 

further commended the initiators of 

the programme because of its impact 

to accelerate MSMEs’ access to inance 

and business development information 

which will lead to the provision of 

sustainable services and growth. 

NACC to provide capacity for 

SMEs in export through ATRC 

ODINAKA ANUDU 

The Nigerian-American 

Chamber of Commerce 

(NACC), the foremost 

bilateral Chamber of 

Commerce in Nigeria, which 

has as its mandate the promotion 

of trade and commerce 

between Nigeria and America, 

has signed a Memorandum of 

Corporation with the USAID/ 

West Africa Trade and Investment 

Hub (WATIH), with a view 

to providing capacity building 

to small business owners in 

export through AGOA Trade 

Resource Centre (ATRC). 

WATIH is tasked with facilitating 

an increase in Africa’s 

share of world trade by increasing 

export at a faster rate than 

the growth in overall trade, 

and by improving West Africa’s 

international private sector 

competitiveness in targeted 

value chains other than extractive 

industries. 

Speaking on the collaboration, 

Joyce Akpata, NACC 

director general, stated that 

the NACC now becomes the 

recognised AGOA Trade Resource 

Centre for the Organised 

Private Sector in Nigeria and 

will host the AGOA Desk in its 

National Secretariat in Lagos. 

The AGOA Desk will provide 

advisory services to Nigerian 

companies to increase their 

competitiveness, increase regional 

trade and value-added 

global exports, particularly to 

the United States under the African 

Growth and Opportunity 

Act (AGOA), as well as facilitate 

strategic investments to expand 

exports by providing technical 

assistance and industry-specific 

best practices to government 

and private sector. This will 

be achieved through regular 

updates and provision of trade 

intelligence service to Export 

Ready Companies (ERCs) and 

would-be exporters on understanding 

the US market 

requirements and regulations, 

packaging/labelling, costing, 

and finance, among others. The 

AGOA Desk will also provide 

capacity building, business 

development workshops and 

trainings based on identified 

needs of MSMEs.


This is M 

NEY 

A daily guide to your Personal Finance 

• Savings 

• Travel 

• Debt & Borrowing 

• Utilities 

• Managing your Tax 

C002D5556 

BUSINESS DAY 

39 

Fathers and finances 

Yesterday was Fathers 

Day. It is a 

celebration honoring 

fathers and 

celebrating fatherhood, 

and their inluence in 

society. It is also a good time 

for fathers to consider the 

critical role that they play in 

the family, to take stock and 

to carefully consider their 

responsibilities. One such 

responsibility is financial, 

and it is important to take 

important inancial steps to 

secure the family. 

What is your vision for 

your family? 

Do you have clearly defined 

family goals? Don’t 

keep them to yourself; involve 

everyone; get their 

input and buy-in as it makes 

it easier when they are all 

committed. Family goals 

include educating children, 

home ownership, the family 

business etc. Draw up 

a family budget with your 

spouse. Sticking to the budget 

will require teamwork, 

encouragement and tracking 

milestones from time to 

time; celebrate milestones to 

keep everyone committed to 

the big picture. 

Your money personality 

will show through; children 

will do what you do and not 

what you say. Your actions 

will speak so much louder 

than your words, so do be 

conscious of this at all times 

to be a deserving role model. 

Have money conversations 

with your spouse 

Money woes are a leading 

cause of fractured relationships 

that can lead to 

divorce. Keeping financial 

problems to yourself only 

makes things worse and 

damages the fabric and stability 

of your relationship. 

Sharing the burden of inancial 

worries, eases it. When 

the dynamics of a family 

evolve, spouses often take on 

diferent aspects of domestic 

responsibility, from managing 

utility bills, to the bigger 

items including school fees 

and rent. If one spouse is 

completely removed from 

any understanding of inan- 

cial decision-making, or an 

appreciation for long-term 

goals including retirement, 

things can begin to fester 

which is unhealthy. 

If you have a lot of money 

and you hide it from your 

spouse, leaving her completely 

in the dark, this 

breeds mistrust and puts a 

strain on your relationship. 

As far as possible, be transparent 

about your inancial 

choices. In an ideal situation, 

in a trusting relationship, so 

much more will be achieved 

where family inancial management 

is addressed as a 

team. 

Can your family aford 

to lose you? 

As morbid as it sounds, 

if you were to die, could 

your family or dependents, 

organize the family inances, 

service outstanding debt, 

meet family goals, and maintain 

their current standard of 

living? Or would they face 

extreme hardship in the 

event of the death of their 

primary breadwinner with 

the children’s education in 

jeopardy? 

Don’t ignore insurance 

We tend to assume that 

bad things won’t happen to 

us and far too many people 

ignore the need for insurance 

until a major mishap or 

setback occurs; it is then that 

the impact of inadequate insurance 

coverage becomes 

glaring. No matter how meticulous 

you are with your 

inances, failure to purchase 

adequate insurance can 

impair your inancial future 

and put you and your loved 

ones in a desperate situation 

in an instant. If you are the 

primary breadwinner, a life 

insurance is very important; 

the main objective is to replace 

income that would be 

lost should the policyholder 

be incapacitated or die. 

Who is your “Next of 

Kin?” 

At some time or the other, 

you have probably had to 

ill out a form or some other 

documentation where you 

had to clearly state your next 

of kin. In Western societies, 

it is usual for a man to name 

his spouse as his next of 

kin. In our society, it is quite 

common for his brother to 

be named as next of kin. his 

puts his immediate family, 

that is, his wife and children 

in a precarious situation. 

Ideally the mother of your 

children should be the obvious 

choice. 

Do you have a will? 

Many people assume that 

if they pass on, their spouse 

will automatically become 

beneficiary to their estate. 

If you were to die intestate, 

that is, without leaving a 

will, your property will not 

simply pass to your spouse; 

strict rules rank your next of 

kin, and your property will 

be distributed according to 

laws of intestacy, which varies 

from state to state. 

It is only by having a clear 

estate plan in place, that you 

can protect your immediate 

family, including your wife 

and children, and ensure 

that your investments, property 

and other assets do not 

go into the wrong hands in 

the event of your untimely 

passing. Review and update 

your will, trust and other 

estate planning documents 

periodically, to ensure that 

they are in accordance with 

your current inancial status 

and intentions. 

Don’t neglect the boy 

child 

There is a social phenomenon 

where the boy 

child is being neglected as 

we focus so much of our attention 

on the importance 

of empowering our girls; 

this has far reaching consequences. 

A boy learns so 

much about what it means 

to be a responsible, hard 

working, focused man from 

his father; this means that 

the time that fathers and 

sons spend together is as 

critical, as it is precious. 

Many fathers do not 

make time for their children. 

Give your family the gift of 

your time. In the inal analysis, 

it is not all about money; 

money cannot replace that 

precious time for bonding, 

building and nurturing relationships 

with your family, 

the most important unit of 

society. 

Nimi Akinkugbe has 

extensive experience 

in private wealth 

management. She seeks to 

empower people regarding 

their finances and offers 

frank, practical insights to 

create a greater awareness 

and understanding of 

personal finance. 

For more personal finance 

tips, contact Nimi: 

Email: info@ 

moneymatterswithnimi 

Website: www. 

moneymatterswithnimi. 

com 

Twitter: @MMWITHNIMI 

Instagram: @ 

MMWITHNIMI 

Facebook: 

MoneyMatterswithNimi



C002D5556 

This is M NEY 

A daily guide to your Personal Finance 

• Savings 

• Travel 

• Debt & Borrowing 

• Utilities 

• Managing your Tax 

Understanding life insurance in estate planning 

MODESTUS ANAESORONYE 

efits”) upon the death of 

the insured. Beneits could 

also be paid on a life insurance 

policy that is triggered 

by terminal illness or 

a permanent disability. A 

payment (the “Premium”) 

is usually made to the insurance 

institution monthly 

or as otherwise agreed, for 

the maintenance of the life 

insurance policy. here are 

several types of life insurance, 

a few of which are applicable 

to estate planning 

include Term Assurance 

Plan, Memorial Beneit Plan 

and Mortgage Beneit Plan. 

Now, while life insurance 

may be used to provide for 

the family on the death of 

its benefactor as described 

above, the proceeds under 

a life insurance policy may 

also provide immediate 

cash for estate taxes. herefore 

to understand life insurance 

in estate planning, 

estate planning and trusts, 

of which people are much 

less aware of, must also be 

explained. 

Estate Planning 

Simply put, estate planning 

is the plan for disposal 

of an individual’s estate according 

to his/her wishes 

before or after death. Estate 

planning is administered in 

several ways but most commonly 

through Wills and 

Trusts. 

A Will is simply a written 

declaration or statement 

by a person (the “Testator”) 

naming one or more 

persons, human or entity, 

as beneficiaries of his/her 

property after death. Another 

person or persons are 

also named in the Will as 

executors of the Estate with 

property to be distributed 

after the Testator’s death. 

A Trust on the other hand 

is a legal arrangement where 

an individual (the “Settlor”) 

gives control of his/her property 

to another, advisably an 

institution (the “Trustee”) by 

transferring legal title of his/ 

her assets to the Trustee, for 

the beneit of beneiciaries 

to the Trust. 

Taking a Life insurance 

Policy for an Estate 

In the case of a Will, Babake 

(a “Testator”) takes on 

a life insurance policy stating 

in his Will that his beneiciary 

of the Insurance Policy 

is his only son, Omoke. 

The insurance company 

then pays out the insurance 

beneits of the Policy to the 

only beneiciary of the Will, 

Omoke upon death of the 

testator, Babake. Sometimes, 

payment may be delayed 

or withheld at the slightest 

contest of the Will. In this 

case, Omoke learns that 

Babake fathered a female 

child named Omota, years 

before who now has learned 

that her father left a Will. She 

brings evidence of her birth, 

claiming that her father sent 

her birthday presents all her 

life and also visited a couple 

of times. he mere fact that 

there is proof Babake fathered, 

acknowledged, and 

‘cared’ for Omota, claiming 

to be his daughter, means 

that she has a right to contest 

the Will. his also defeats 

the purpose of ‘instant’ cash 

if Omoke meant to use the 

proceeds of the life insurance 

for the payment of his 

father’s funeral expenses, as 

such proceeds will be held 

pending the contest and 

the court’s inal decision in 

respect of the Will. 

In the case of a Trust, 

Babake, the Settlor, names 

TrustUs Co., a trustee company, 

pursuant to a Trust 

Deed, as his Trustee to manage 

his Assets, including 

his life insurance proceeds. 

hus, he transfers all these 

proceeds to TrustUs Co. 

thereby naming the Trustee 

as the beneiciary of the life 

insurance proceeds. Thus, 

TrustUs Co., as the trustee, 

will pay the premiums on 

the policy from the Trust 

assets now belonging to the 

Trust on behalf of Babake. 

On the other hand, TrustUs 

Co., acting on behalf of the 

Trust, will take on the life 

insurance policy, naming 

itself as the legal beneiciary 

(acting on behalf of Omoke, 

the actual beneiciary) of the 

proceeds. Either way, upon 

the death of Babake, the Set- 

We work hard 

to gather 

wealth to 

provide financial 

security 

for our loved ones, 

however there are unforeseen 

events that could hinder 

or frustrate our plans 

for the future, making it 

essential for us to build reserve 

against unanticipated 

events. One of such reserves 

could be taking a life insurance 

policy or establishingan 

estate plan. 

Life insurance is a widely 

known concept, at least to 

those who have thought 

about the future at some 

point and who have assets 

to leave behind for family 

members. A Life Insurance 

is a contract between a person 

(the “insured/policy 

holder”) and an insurance 

institution (the “insurer”), 

where the insurer promises 

to pay a named beneiciary, 

a sum of money (the “bentlor/Testator, 

the insurance 

proceeds would form part 

of the Trust assets and would 

be distributed to the actual 

beneiciaries of the Trust as 

set out in the Trust Deed. 

Life insurance in Estate 

Planning is particularly 

beneicial in the following 

instances: 

Beneits of the life insurance 

policy may be useful to 

pay funeral and associated 

expenses. his is in view of 

the diiculty which may be 

encountered in connection 

with liquidating the assets 

of the Estate in time to meet 

such expenses. However, 

Trusts are more useful in 

achieving this benefit due 

to long probate process involved 

in Wills. 

Secondly, the benefits 

under a life insurance policy 

can be used to cover the 

costs of settling an Estate. 

Such costs may be a combination 

of costs of paying 

assessed estate taxes and 

legal fees associated with 

distributing Trust assets and 

obtaining probate for Wills.


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C002D5556 

Wednesday 19 June 2017 

NEWS 

Commercial cyclists turn heroes in Apapa gridlock mess 

…rescuing business executives, others, as port community remains in shambles 

JOSHUA BASSEY 

Years after they were 

oicially barred from 

all bridges and major 

roads in Lagos, commercial 

motorcycle 

operators, popularly known as 

‘Okadas’ have emerged the heroes 

in the Apapa’s conundrum, 

ferrying business executives, 

middle level and lower cadre 

workers in and out of the degraded 

port community at the risk 

of their lives. 

But for the Okadas availability 

and willingness to take this risk 

of meandering through deadly 

petroleum tankers and articulated 

trucks which have become 

permanent features on bridges 

and roads inward and outward 

Apapa, a lot more small and medium 

scale businesses, according 

to Johnson Matthew, who runs 

an eatery on Liverpool Road, 

would have packed up, for want 

of means of mobility for staff, 

despite the risk to life and limb 

of the passengers as well. 

From eateries to banks, insurance, 

and media outits, customs 

licensed clearing and forwarding 

companies, and guest houses, 

motorcycles ofer a readily available 

means, through which their 

workforce enter and exit Apapa, 

daily. Indeed, top executives, 

whose businesses are domiciled 

in Apapa, are not left out. 

BusinessDay inds that the National 

Stadium, Surulere, has become 

a car park, where executives 

and middle level management 

stafers of companies which operate 

in Apapa, now park their cars 

at a fee of N100, before boarding 

motorcycles to Apapa. Several 

are seen early in the morning, 

driving into the stadium, (another 

national monument in a state of 

Quoted companies cut cash dividend... 


for the pharmaceutical firms, it 

was through the Grace of God 

that they survived in 2016. hey 

are just coming back now with 

the lexibility introduced into the 

FX market. For those that have 

factories which are compliant 

with the WHO standards, they 

could not import active pharmaceutical 

ingredients (API) due 

to FX scarcity, and the nature of 

that industry is such that they 

could not just increase the prices 

of their drugs, especially the 

over the counter (OTC) drugs”, 

Bashir said. 

Corporate actions of food and 

beverages irms fell by 38 percent 

to N16.981 billion, in contrast to 

N27.387 billion paid last year. 

Apart from that, irms listed in 

the inancial services, inclusive 

of ETF funds, paid N274.03 

billion in 2016 compared with 

N156.41 billion so far declared 

in 2017, and this amounted to 

a 43 percent decline in sectoral 

corporate actions. 

L-R: Hadiza Bala Usman, MD, Nigerian Ports Authority (NPA); Babatunde Fashola, minister of Works , Power 

and Housing; Joseph Makanjuola, honorary adviser to the president of Dangote Group, and Paul Gbededo, 

GMD, Flour Mills Plc, at the signing of MoU between Federal Government, AG Dangote, NPA and Flour Mills 

for the reconstruction of the two-kilometre failed section of Ijora-Apapa Road in Lagos. Pic by Pius Okeosisi 

Similarly, irms in the manufacturing 

sub sector have so 

far declared N666.69 million, 

representing a 17 percent decline, 

when compared with 

N803.53 million paid in the 

2016 dividend season. This is 

as the cumulative dividend 

paid by the irms quoted in the 

building materials subs sector, 

fell slightly, by 2 percent from 

N155.25 billion in 2016 down to 

N152.62 billion in 2017. 

“Going forward, we believe 

things will get better, especially 

now that the FX market has 

improved. For instance, May 

& Baker got an approval from 

the Federal Government to 

manufacture some drugs. his 

is a cash cow for the company 

and investors have begun to 

factor this into their investment 

decisions. Year-to-date, May 

and Baker has recorded a 302 

percent price increase. he FX 

lexibility will positively impact 

other irms that will pay better 

dividends by year end”, Bashir 

added. 

shameful neglect) and returning 

in the evening to take their cars, 

before heading home. 

“You will be doing yourself a 

great disservice to attempt driving 

to Apapa. As a matter of fact, 

you won’t get to the oice to do 

anything meaningful, because 

you would have been drained 

physically and mentally, when 

stuck in traic on Ijora bridge. he 

option is to park outside and enter 

Apapa with Okada,” said Roland 

Olowokere, a staf of a shipping 

company in Apapa. 

According to Olowokere, driving 

in and out of the port community 

comes with a lot of mental 

and health challenges, asides 

the danger of a container falling 

on your car. For now, the Okada 

remains the means to go there.” 

he increased patronage of the 

commercial motorcycles, paradoxically, 

is coming six years after 

they were outlawed and restricted 

from 492 roads and bridges across 

the Lagos metropolis. he Lagos 

Road Traffic Law 2012, which 

bans the motorcycles, was enacted 

to check incidences of death 

and injury in accidents involving 

motorcycles, as well as robberies, 

which had assumed a disturbing 

dimension at that time. But in the 

light of Apapa’ degeneration, the 

dangers associated with the motorcycles 

seem jettisoned. 

In their desperation to get to 

work and keep businesses from total 

collapse, distraught workers and 

business owners in Apapa, are seen 

hopping on the motorcycles daily. 

Checks show motorcycle operators 

charge as much as N500 and 

N700 from the National Stadium, 

to ferry a passenger into Apapa, 

and between N300 and N400 from 

Rand Merchant Bank launches N80bn... 


and law firms Aluko & Oyebode 

and Banwo & Ighodalo, 

were in attendance. 

RMB Nigeria will issue a 

series of CPs under the programme, 

with a wide range 

of maturities, which should 

offer investors a variety of 

investment outlets, while 

also providing the bank with 

more flexibility to meet the 

various funding demands of 

its growing client franchise. 

The CPs issued will also 

present investors with the 

benefit of capital security, 

portfolio diversification and 

competitive returns. All issuances 

will be quoted on the 

FMDQ OTC Exchange. 

RMB Nigeria, a member 

of the FirstRand Group, is 

a leading African corporate 

and investment bank and 

part of one of the largest 

financial services groups 

in Africa. The bank is rated 

Ijora, across the bridge, to Apapa. 

One of the operators, told 

BusinessDay that their operations 

involve a lot of risk, as they have 

to run against traic, from Ijora to 

Apapa and tip touts and wayward 

law enforcement oicers, which 

explains the exorbitant fares. It 

was discovered that majority of 

the operators are youths between 

the ages of 17 and 35 from the 

northern parts of the country and 

beyond the country’s borders. 

Petroleum tankers and container-laden 

trucks have continued 

to occupy the roads and 

bridges leading to Apapa, with 

craters sinking even deeper, as 

the rains intensify. 

Throughout last week, the 

stretch of Ijora-Apapa bridge 

witnessed a standstill, as trailers 

and tankers swarmed the bridge, 

leaving no space for motorists 

‘A’ by both leading emerging 

market ratings agency, 

Global Credit Rating Co and 

local credit ratings agency 

Agusto & Co, reflecting the 

good asset quality, strong 

capitalisation and good liquidity 

profile. 

The bank offers clients 

innovative advisory, capital 

markets, financing and principal 

investing solutions. 

RMB Nigeria has funded various 

infrastructure, real estate 

resources, acquisitions 

and development projects in 

over 35 African countries in 

the past decade. 

These range from ports, 

dams and energy installations, 

to mines, railways and 

factories, making it one of the 

leading investment banking 

partners on the continent. 

The bank established a 

representative office in Nigeria 

in 2010 and opened a 

fully-fledged merchant bank 

in early 2013. 

headed to the port city. It was 

also total frustration for motorists 

who approached the port through 

the Mile2-Tincan axis, which had 

since collapsed. 

he two major entry routes to 

Apapa: Ijora and Mile2-Coconut- 

Tincan axes have been left in abject 

disrepair for many years, with 

government after government 

promising to fix the roads and 

upgrade decayed infrastructure 

in Apapa, but without concrete 

action taken. 

Stakeholders say there is no 

better time to declare the state 

of emergency in the area than 

now. hey warn that the recent 

executive orders signed by acting 

President Yemi Osinbajo, to 

promote ease of doing business in 

Nigeria, will be of no efect if the 

roads leading to the nation’s most 

utilised ports remain in disrepair. 

Briefs 

Amazon to buy Whole 

Foods for $13.7bn 

Online retail giant Amazon is 

buying Whole Foods in a $13.7bn 

(£10.7bn) deal that marks its biggest 

push into traditional retailing yet. 

Amazon, which has been experimenting 

with selling groceries, will 

buy the upmarket supermarket for 

$42 a share. 

Investors greeted the deal as 

game-changing for the industry, 

sending shares of rival grocers 

plunging. 

McDonald’s ends Olympics 

deal three years early 

McDonald’s and the International 

Olympics Committee (IOC) 

are ending their long-running 

sponsorship deal three years early. 

The fast food chain said it was 

“reconsidering all aspects of its 

International Olympics Committee 

business” as part of a plan to 

re-invigorate its business. 

Walmart buys Bonobos for $310m 

Walmart (WMT) will pay $310 

million in cash for the internet 

clothing brand. But Bonobos 

clothing won’t be sold on 

Walmart’s website or stores. Instead, 

it will be available on Jet. 

com, the online marketplace recently 

bought for $3 billion. 

European Commission approves 

Shell’s $3.8 billion North Sea sale 

The European Commission 

approved on Friday Royal Dutch 

Shell’s (RDSa.L) $3.8 billion sale 

of North Sea oil and gas assets to 

private equity-backed Chrysaor. 

“The Commission concluded 

that the proposed acquisition 

would not raise competition concerns, 

because of its limited impact 

on the market structure,” the Commission 

said in a statement.

Monday 19 June 2017 C002D5556 

BUSINESSDAY 47 

NEWS 

Stakeholders give conditions for 

N700bn power fund to make impact 

OLUSOLA BELLO 

Stakeholders in the power 

sector have spelt out 

conditions that would 

cause the over N700 

billion earmarked for the sector, 

under the Power Recovery 

plan, to impact positively on 

the industry, as well as the 

economy. 

According to the stakeholders, 

the Federal Government 

must sit down with both 

Discos and Gencos and spell 

out the areas it wants them 

to utilise the fund, and also 

do forensic analysis of Discos 

operations, in order to know 

if they are really not making 

money, or they are generating 

revenue but diverting it 

elsewhere. 

They also said that government 

should channel the 

funds through vendor inancing, 

after the companies would 

have presented their expenditure 

plans to the government, 

as this would prevent the beneficiaries 

from diverting the 

monies for other purposes. 

hey however agreed that 

most of the money should be 

used to fix the distribution 

subsector, so that efficiency 

Hydrological agency flood warning indicates rising global temperatures 

STEPHEN ONYEKWELU 

National Hydrological 

Services Agency recently 

warned that 35 

states in Nigeria would experience 

severe flooding as the 

rainy season begins due to rise 

in water level of eight major 

rivers across the country, and 

advised residents living in flood 

prone areas to relocate. 

Anambra, Benue, Ogun, 

Osun, Niger, Imo and Niger 

Delta areas are to experience 

severe flooding this year, while 

Lagos and Ondo will witness 

coastal flooding due to the rise 

in sea level and tidal surge, the 

Agency warned. Others include 

Niger, Kebbi, Zamfara, Sokoto, 

Katsina, Kaduna, Kwara, Federal 

Capital Territory (FCT), Kogi, 

Taraba, Adamawa, Gombe, 

Bauchi, Benue, Nasarawa, Plateau, 

Delta and Bayelsa. Some 

others are Imo, Rivers, Enugu, 

Ogun, Oyo, Ondo, Lagos, Ekiti, 

Abia, Cross River, Akwa-Ibom, 

Kano, Jigawa, and Edo. 

“This is a seasonal occurrence 

and attributable to a 

can be achieved, and Aggregate 

Technical, Commercial and 

Collection Loss (ATC&C) are 

reduced. 

Barth Nnaji, former minister 

of power, said government 

has to sit down with the electricity 

distribution companies 

and sort out what Discos must 

do, when they get the money 

and vigorously ensure that they 

deliver. “This is very straight 

forward,” he said. 

“If the money should be 

given to the Discos, with a 

particular mandate to deliver, 

they should deliver.” 

Another industry operator, 

who does not want to be 

named, said for government 

to commit such money, under 

the Power Recovery Plan, it 

then means that urgent radical 

changes in the operations and 

management of the Discos 

need to happen. 

“Government needs to either 

exert control on the Discos, 

or hold their core investors 

accountable, with a view to 

making them more efficient 

in their operations, or else, the 

funding exercise may turn out 

to be a mirage”, he said. 

John Uwajumogu of Ernst 

and Young, said government 

…35 states exposed to rising water levels 

number of causes chief among 

which is rise in water level, 

accompanied by poor drainage 

pattern, exacerbated by 

the actions of man through 

desertification, carbon emissions, 

distortions of ecological 

systems and others,” Lukman 

Adeoti, associate professor 

of geophysics, University of 

Lagos, said. 

Studies conducted by the 

UK-based Centre for Ecology 

& Hydrology (CEH), led by an 

international team of scientists 

show that global warming is 

responsible for a tripling in the 

frequency of extreme West African 

Sahel storms and floods observed 

in just the last 35 years. 

Christopher Taylor, a meteorologist 

at CEH, and researchers 

from partner institutions 

including Grenoble 

Alpes University in France, also 

suggest that climate change will 

see the Sahel experience many 

more instances of extreme rain 

in the future. 

Moses Beckley, directorgeneral, 

National Hydrological 

Services Agency, says the 

NUPENG threatens strike over bad roads 

JOSHUA BASSEY 

Nigeria Union of Petroleum 

and Natural Gas 

Workers (NUPENG) 

has issued an ultimatum to 

the Federal Government to 

rehabilitate its roads in Port 

Harcourt, Rivers State, or 

it will call members out for 

strike. 

he ultimatum, which expires 

on Monday next week, 

June 19, according to NU- 

PENG, will see the union 

withdrawing its services in 

the delivery of petroleum 

products in Rivers State and 

its environs. 

he union stated that the 

bad roads yearning for quick 

rehabilitation were bad spots 

on the East/West road, Akpajo 

Junction, police security 

check posts, road opposite 

NNPC Housing Estate, Intelcamp 

and Fugiro along Aba- 

Port Harcourt Expressway. 

It added that the bad spots 

on these roads had become 

death traps and posing danger 

and threat to tankers, 

trailers and the general public 

who ply the roads. 

he union also stated that 

these bad spots had become 

should concentrate its attention 

on the Discos because according 

to him, if the distribution 

networks are made more 

efficient, with the ATC&C 

significantly reduced, they 

would be able to make more 

revenue and pay other sectors 

in the value chain. 

He queried the value of 

being able to generate several 

thousands of megawatts and 

being unable to distribute it to 

consumers. 

According to him, to able 

to diversify the economy and 

have a robust manufacturing 

and agricultural sector requires 

an eicient power sector. 

“The government must 

identify what sections of the 

value chain it would direct the 

money to, that would have a 

positive efect on the economy. 

If you have an eicient distribution 

network, you will be 

able to capture your revenue 

and settle sectors along the 

value chain”, he said. 

He suggested that the 

fund should be channelled 

through vendor financing 

and if possible, external bodies 

should be appointed to 

supervise the way the jobs 

are carried out. 

agency is sensitising the general 

public, especially those 

living in flood prone areas, on 

probable flooding events and 

advised them to take proactive 

steps to avoid loss of lives and 

property, damage to crucial 

infrastructure, disruption of 

socio-economic activities and 

in some cases, displacement 

of people in the affected areas. 

Attempts to reach the Nigerian 

Metrological Agency 

(NIMET) for comment was 

unsuccessful. Experts contend 

that the major cause of flooding 

is the absence proper drainage 

systems. “This is what you get 

in a country that will deliberately 

not hire the best people 

for design and engineering. I 

don’t think we have a skills gap 

in engineering here but public 

officials will just not want to go 

for the best but rather prefer to 

award contracts to XYZ and 

sons limitetd and will defend 

the award proposal with their 

last blood,” Pascal Egwim, senior 

procurement officer at 

Amaryllis Consulting Limited, 

says. 

accident-prone and that urgent 

steps must be taken to 

rehabilitate them. 

The union said it could 

not allow its members to risk 

their lives and other members 

of the public who ply 

the road day and night with 

hazardous and inlammable 

products like petrol, kerosene 

and diesel. 

he union had therefore 

mobilised its members to 

withdraw its services and 

stop delivery of petroleum 

products from Monday, next 

week, if no measure was taken 

to address the challenge. 

Creating middle-class manpower 

through technical education 

GODFREY OFURUM 

Education for Employment’ 

(E4E) 

programme, the 

first project in education 

launched by the 

Okezie Ikpeazu-led administration 

in Abia State, is 

aimed at incubating technology, 

promoting small-scale 

manufacturing and creating 

a critical pool of technically 

minded people. 

It is also aimed at addressing 

the shortage of 

skilled manpower in the 

state and country at large. 

The skills are expected to 

enable the youths to be selfemployed 

or take up jobs in 

industries and help grow the 

economy. 

he technical vocational 

educational training, which 

has started in all the 17 Local 

Government Areas of 

the State, according to Governor 

Okezie Ikpeazu, is 

an employment generating 

programme that would only 

succeed when the private 

sector keys into it. 

Abia State in general and 

Aba in particular is an industrial 

and technical hub, 

hence the various factories 

need manpower, while the 

various creative processes 

require skills and inesse to 

maximize available opportunities. 

Consequently, the Government 

is partnering industries 

in the State, especially 

those in Aba, to ensure the 

success of the programme. 

While on training, 

Government will provide 

monthly stipends to the 

trainees and after training 

assist them to ind jobs, for 

those wishing to go into paid 

employment and ofer startup 

materials for those wishing 

to stand on their own. 

Endi Ezengwa, coordinator 

of the programme, 

insisted that the project is 

for all Abians, regardless of 

political leaning and would 

focus on hands-on-skill 

training in various areas, 

as indicated by the participants. 

he training is expected 

to last for four months for 

each stream and it is concurrently 

taking place at 

13 locations across the 17 

Local Government Areas of 

the state. 

he E4E coordinator revealed 

that the coordinating 

office of the programme, 

received about 45,000 completed 

application forms 

from the 17 Local Government 

Areas of the State, 

which were processed, to 

have a clear view of the interest 

of the applicants. 

“The Governor says 

he wants to create about 

Governor Okezie Ikpeazu 

100,000 jobs in four years, 

so it is not one of those 

programmes, you rush in 

order to get votes, it is a 

programme that we will 

painstakingly do, to make 

a lasting impact on our system, 

“ he said. 

Governor Ikpeazu has 

explained that his administration 

is interested in 

partnering with the industrial 

sector in the State, especially 

those in Aba, its 

commercial hub, to create 

jobs for the unemployed in 

the State. 

Consequently, the Education 

for Employment 

(E4E) programme, instituted 

by his administration 

is to produce skilled 

manpower for industries as 

well as ensure that youths 

of Abia State are gainfully 

employed. 

He observed that industrialists 

in Aba and Abia 

State as a whole are integral 

to the success of the 

education for employment 

scheme, as the scheme was 

designed to train youths, 

who have been imbued with 

various skills and technical 

abilities that are required by 

industries. 

In his words, “Today we 

are interfacing with the 

business community in 

Abia State to get you on 

board in the education for 

employment programme 

and solicit your full participation 

in the success of the 

programme. 

“We are banking on a 

synergy between the training 

programme and the 

skill sets required by the 

industries for the success 

of the programme, therefore 

we encourage industrialists 

in Abia State to cooperate 

with the consultants of the 

E4E programme. 

he Governor urged the 

organized private sector in 

Abia State to continue to 

partner with this administration, 

to address the 

developmental challenges 

faced by the State. 

According to Ikpeazu, 

the Abia State Government 

is ready to work with the 

industrial sector in the State 

in a symbiotic relationship, 

to have regular interactions 

where you can tell us what 

Government can do to make 

your businesses lourish. 

“This is a caring and 

business friendly administration. 

We will support you 

to ensure that the economy 

of the State is buoyant. 

He explained that the 

State Government had already 

begun the revitalization 

of technical and 

vocational education in the 

State, even before President 

Mohammadu Buhari’s order 

at the federal level. 

“Most of you who follow 

national events, would have 

read in the newspapers that 

our president has ordered 

the revitalization of technical 

and vocational education 

in our schools, nationwide, 

however, Abia State 

Government had already 

begun the programme, even 

before it became a national 

issue. 

We saw the light before 

others did. 

“Every month our allocation 

from the federal 

revenue keeps dwindling, 

not only that of Abia State, 

but also the entire 36 States 

of the Federation, including 

the Federal Government. 

“Our people need jobs 

and we have to keep our 

State aloat and that is why 

we are very serious about 

this programme, “he afirmed. 

The technical schools 

coupled with the multiskill 

acquisition centres, 

which are actually entrepreneurial 

in outlook, which is 

the muscle that will drive 

whatever that is thought in 

the technical school, has 

caused a new interest in 

technical education. 

In the words of the Governor, 

“We want to produce, 

middle cadre manpower 

that can become freshmen 

in the Polytechnic, freshmen 

in the faculty of engineering-assuming 

they 

want to be serious about 

that or hands men or tradesmen 

in the various factories. 

“If ultimately, we begin 

to automate shoemaking 

and dressmaking, some 

people will manufacture or 

repair the equipment. 

“But even in asking people 

to come and begin to 

produce in Abia, I want to 

make a prediction, I may not 

be here when this prediction 

will come to reality, Abia 

will become known more 

for machine tools than for 

the things that machines 

produce, if I understand the 

psychology of my people. 

his is the main focus of 

technical education in Abia.

A1 

NEWS 

IFEOMA OKEKE 

BUSINESS DAY 

C002D5556 

FG to address aviation challenges to 

position Nigeria as hub 

Acting President Yemi 

Osinbajo has promised 

to address the 

challenges facing the 

aviation industry in Nigeria, 

which have hitherto hampered 

the growth of the sector and 

hindered it from taking advantage 

of its natural geographical 

position as the hub for Africa. 

Osinbajo gave the assurance 

during a meeting in his 

oice at the Presidential Villa 

with a delegation of Airline 

chief executives of the Airline 

Operators of Nigeria (AON). 

Osinbajo used the meeting 

as a fact inding exercise to hear 

irst-hand from the airline investors 

what domestic airlines 

were going through within the 

sector and to discover why in 

spite of the huge potentials, 

Nigeria was not a hub for aviation 

activities in the continent. 

Lending voice to the challenges 

being faced by airline 

operators, Nogie Meggison, 

chairman of AON, said some of 

the major issues facing airlines 

currently include, removal of 

Value Added Tax (VAT), harmonisation 

of over 35 Multiple 

Charges; reviewing 5 percent 

Ticket Sales Charge (TSC) to a 

lat rate (in line with the world 

practices); poor navigational 

and landing aids, high cost and 

epileptic supply of JetA1, obsolete 

infrastructure, and lack 

of consultations with airlines 

before introduction of new 

charges and policies, among 

others. 

According to Meggison, 

“There is an urgent need for 

a deliberate economic policy 

that will support the positive 

growth of aviation and survival 

of domestic airlines in 

the country. 

“Safety and economic policy 

go hand-in-hand. Where 

there is no inancial proit for 

airlines safety would be compromised. 

A clear economic 

policy for the survival of domestic 

airlines is very critical 

at this time, which has resulted 

over the years in the death of 

over 25 airlines in 30 years.” 


A2 BUSINESS DAY 

NEWS 

Nigerian ports fast track agro exports 

to earn FX in wake of Executive Order 

AMAKA ANAGOR-EWUZIE & JOSEPHINE OKOJIE 

In the wake of the new 

Executive Order on Ease 

of Doing Business in Nigeria’s 

seaports, signed 

three weeks back by acting 

President Yemi Osinbajo, some 

agro-exporters have started 

experiencing slight improvement 

in the documentation 

procedure required for the 

export of agro related cargoes. 

According to agro-exporters 

who spoke with Business- 

Day, the development could 

be credited to the impact of 

the Federal Government’s 

new Executive Order, as well 

as from the government’s 

drive to diversify the economy, 

grow local industries 

and earn foreign exchange 

to support the dwindling oil 

revenue. 

Export of agro commodities 

through Nigerian seaports 

is becoming easier in recent 

times, as it takes a maximum 

of three days to process 

all the documents needed for 

export,” said Zacheaus Egbewusi, 

chief executive oicer 

of Agri-Commodity Inspection 

Limited, in a telephone 

interview with BusinessDay. 

“It has also become easier 

to get containers that we use 

for export from shipping 

companies, unlike before, 

when it was very diicult to 

secure containers for export. 

Once you have gotten your 

container, you can go to any 

of the individual terminals 

to process the needed documents, 

after which you export 

your commodity. All these 

now take about three days, 

unlike before, when it took 

weeks,” he added. 

Egbewusi, who is an Ondo-based 

farmer, specialising 

in the export of Cashew, 

Cocoa and Sesame seeds, described 

the congestion on the 

roads leading to the Apapa 

ports as a major hindrance 

to timely processing of agro 

produce for export. 

“The deplorable state of 

the roads has been a major 

problem we are facing now, 

such that it takes a minimum 

of three days to get our produce 

to the port for export 

and this adds to our cost, as 

we are forced to pay truck 

owners demurrage for those 

days spent on the road.” 

He said before now, exporters 

were mandated to 

get the NPA to approve a 

document before their goods 

would be allowed to leave the 

country. Egbewusi further 

observed that such bureaucratic 

bottlenecks, which 

used to take days, have been 

cut-off. “We no longer pass 

through the NPA. All we need 

now, is to work with the shipping 

lines, which have the 

responsibility to notify the NPA 

and this saves time. 

AfricanFarmer Mogaji, 

CEO of X-ray Farm Consulting 

Limited, who also conirmed 

that there has been a little improvement 

in the processing of 

documents for export of agrorelated 

produce, observed 

that it now takes fewer days to 

process documents for export. 

C002D5556 



Further rates convergence 

expected in forex market 

HOPE MOSES-ASHIKE 

Currency dealers, 

analysts and other 

stakeholders 

in the financial 

services sector 

expect more convergence of 

rates in the foreign exchange 

market for sustained naira 

gains and conidence in the 

economy. 

Last week, the forex market 

witnessed the first convergence 

of exchange rates 

between the investors and 

exporters forex window and 

the black market where dollar 

was quoted at N367 at both 

markets. 

“We expect further convergence 

in the foreign exchange 

market with possible 

appreciation against the USD 

subject to CBN’s level of intervention,” 

analysts at Cowry 

Asset Management said. 

Within six weeks of creating 

the investors and exporters 

window, forex market has 

recorded excess of $2.2 billion 

in volume of transaction at 

the window, which Demola 

Sogunle, CEO of Stanbi IBTC 

Bank, described as quite impressive. 

Aminu Gwadabe, president, 

Association of Bureau 

De Change Operators of Nigeria 

(ABCON), said the gradual 

convergence of the exchange 

rate on both black market and 

investor forex window was an 

opportunity for the central 

bank to unify rate in all segments 

of the forex market. 

According to Gwadabe, a 

move to eliminate multiple 

rates will restore investors’ 

conidence in the economy 

and boost offshore dollar 

inlows, further strengthening 

the naira. 

he central bank has been 

intervening on the official 

market in the last few weeks 

to try to narrow the spread 

between rates on the oicial 

market and black market. he 

apex bank has sold about $5 

billion since February. 

Isaac Okorafor, acting director, 

corporate communication, 

CBN, said the bank 

would sustain its current 

eforts to improve dollar liquidity 

in the market until it 

was able to achieve currency 

rate convergence. 

On Monday last week, the 

apex bank intervened in the 

interbank foreign exchange 

market, selling $413.5 million 

in a bid to further guarantee 

liquidity in the market and 

support the naira. Another 

auction of $260.0 million was 

conducted on Tuesday, with 

the CBN ofering $100 million 

to dealers in the wholesale 

window, while the Small and 

Medium Enterprises (SMEs) 

window was allotted $28.0 

million. 

BEDC to publish power 

availability schedule 

In view of prevailing electricity 

generation limitations 

nationwide, Benin 

Electricity Distribution plc 

(BEDC) will soon commence 

the publication of 

power availability schedule 

for customers in its franchise 

areas of Edo and Delta states. 

Managing director/CEO, 

Funke Osibodu, disclosed 

this at a media parley with 

on-air personalities and 

journalists at the weekend 

in Benin City. 

She said the power availability 

schedule became 

necessary to enable customers 

predict when electricity 

would be supplied or 

interrupted and restored, 

and thus enable them plan 

their activities around the 

schedule. 

“It has become necessary 

to undertake programme for 

customers of BEDC in order 

to improve our services to 

customer. They however 

should note that load-shedding 

time may sometimes 

vary due to changes in generation, 

technical challenges 

and other unforeseen events 

beyond our control. his will 

first be published for Edo 

and Delta State and after 

perfecting this, similar publication 

will be done for Ondo 

and Ekiti State,” she said. 

he BEDC boss said the 

schedule was being given 

final shape before the advertisement 

would be published 

in leading newspapers 

when the implementation 

commences. 

According to Osibodu, the 

load management schedule 

was prepared based on the 

roaster submitted by each of 

the company’s 24 business 

units, while codes were assigned 

to each 11KV feeder 

emanating from injection 

substations that fed speciic 

areas in the four states. 

She explained further 

that in Edo State for instance, 

BEDC was creating conducive 

environment for companies 

to grow by balancing 

power given to both residential, 

communities and 

industrial locations. 

She said that supplies 

to, apart from subsidising 

residential customers industrial 

concerns, was to 

enable them reduce cost of 

production, drive economic 

growth and also create jobs 

for the unemployed youths 

in their localities. 

C002D5556 

Stakeholders in the education, 

power sector 

and civil society groups 

will be examining the nexus 

between electricity and basic 

education at the Ninth Wole 

Soyinka Centre Media Lecture 

Series, scheduled for hursday, 

July 13, 2017 at Shehu 

Musa Yar’Adua Centre, Abuja 

by 10am. 

he annual lecture will this 

year mark Wole Soyinka’s 83rd 

birthday. It is themed, “Light 

Up, Light In: Interrogating the 

nexus between electricity and 

basic education in Nigeria.” 

he event seeks to contribute 

to strategic thinking and 

provide a veritable opportunity 

to raise critical questions 

and national debate on issues 

surrounding basic education 

(Sustainable Development 

Goal 4) and electric power 

availability and afordability 

(Sustainable Development 

Goal 7) in the country; ranging 

from the importance of 

the sectors to development, 

to the relationship between 

them, to issues of standard, to 

the challenges with politics, to 

the depth of media reportage 

of the issues, among others. 

Among the expected participants 

include: Hamid 

Bobboyi, Universal Basic 

BUSINESS DAY 

A3 

NEWS 

Ninth Wole Soyinka lecture series to 

examine links between education, power 

Education (UBEC) executive 

secretary; Anthony Akah, acting 

chairman, Nigerian Electricity 

Regulatory Commission 

(NERC); Edward Kallon, 

United Nations, Humanitarian 

coordinator/UNDP Resident 

Representative; Obiageli 

Ezekwesili, senior economic 

advisor, African Economic 

Development Policy Initiative; 

Olabisi Obadoin, professor of 

counselling psychology, Lagos 

State University (LASU); 

Gbemiga Ogunleye, provost, 

Nigerian Institute of Journalism 

(NIJ), and Imeh Okan, 

project manager, USAID Energy, 

Power Africa Nigeria. 

“The WSCIJ intends to 

use the occasion to launch 

the Regulators Monitoring 

Programme (REMOP) which 

is conceived as a media initiative 

geared at reporting 

the activities of regulators, 

including successes and failures, 

in a bid to promote 

proactive disclosure of information, 

transparency and accountability. 

he MacArthur 

Foundation supports the pilot 

phase of the programme with 

focus on electricity and basic 

education,” according to a 

statement signed by Motunrayo 

Alaska, coordinator of 

WSCIJ.


C002D5556 


NEWS 

Apapa generates N20bn to national economy daily 

… as NPA, Dangote Group, Flour Mills stake N4bn on failed access road 

CHUKA UROKO & JOSHUA BASSEY 

Paul Gbededo, group 

managing director of 

Flour Mills Nigeria plc, 

has put the contribution 

of Apapa to the national economy 

at about N20 billion daily. This 

revelation was made at the handing 

over of the Apapa-Wharf 

Road by the Federal Government 

to Dangote Group, Flour Mills 

and Nigerian Ports Authority for 

reconstruction at the weekend. 

Gbedebo’s estimation leaves 

stakeholders in a dilemma as to 

why the port city, despite its strategic 

importance to the nation’s 

There’s still hope 

for Nigerian child 

- Ambode 

JOSHUA BASSEY 

Wife of Lagos State governor, 

Bolanle Ambode, 

says there is still 

hope for the Nigerian child 

despite challenges. 

Ambode, who spoke at the 

celebration of the 2017 International 

Day of the African 

Child, organised by the African 

Women Lawyers’ Association, 

at the weekend, said notwithstanding 

the challenges facing 

the children in some areas, 

there were sufficient reasons 

to believe in the realisation of 

the 2030 continental agenda for 

sustainable development of the 

African child. 

Ambode said since the annual 

celebration of the day began 

in 1991, marginal successes 

had been recorded in overall 

improvement of circumstances 

around the children across 

Africa, noting however, that the 

state government was working 

to remove all impediments in 

the way of their fulilment. 

She said the theme of this 

year’s celebration: ‘accelerating 

protection, empowerment and 

equal opportunity for children 

in Africa by 2030,’ gave the 

needed reassurance, that our 

country was at work on the great 

agenda, to take the children to 

where they ought to be. 

“Lagos State has continued 

to open employment opportunities 

for children through education 

and sports. Inter-school 

sports competitions have been 

re-introduced among primary 

and secondary schools. his is 

intended to catch them young 

for sporting glory, and expose 

them to global opportunities 

for fame, wealth and fulilment,” 

she said. 

The governor’s wife, who 

listed other child-friendly 

achievements of the state government 

to include the passage 

of the Child Right Law, family 

courts and inter-school sports 

competition, promised that the 

government would do more to 

get fulfilment for children in 

the state. 

She commended the African 

Women Lawyers’ Association 

for their eforts and 

called on forward-looking 

bodies to partner the government 

to improve the welfare 

of children. 

economy, had for many years 

been left in a state of squalor, 

with its infrastructure; roads 

and bridges turning death traps. 

Apapa hosts Nigeria’s two most 

utilised ports; Tincan Port and 

Apapa Port, and accounts for 

about 80 percent of the nation’s 

export and import activities. 

With the handing over of the 

two-kilometres collapsed section 

the road (from the foot of 

the Ijora Bridge opposite Area ‘B’ 

Police Command to Apapa Port) 

to the companies for reconstruction, 

businesses, residents and 

port users are hoping for some 

relief one year from now when 

the road is projected to be com- 

pleted. he project is to cost the 

trio N4.34 billion. 

Babatunde Fashola, minister 

of power, works and housing, 

signed the agreement for the 

hand over of the road, on behalf 

of the Federal Government, 

while Hadiza Usman, managing 

director, NPA, and Joseph Makoju, 

honorary advisor to Aliko 

Dangote, president, Dangote 

Group, and Gbedebo, signed 

for their respective organisations. 

The three organisations 

are embarking on the project 

as part of their corporate social 

responsibility (CSR) to Apapa, 

where they all do business. 

The construction work to 

be handled by AG Dangote, a 

civil construction company, and 

joint venture between Dangote 

Group and AG of Brazil, would 

utilise concrete slabs as against 

asphalt, common with road construction 

in this part of the world. 

Fashola expressed the optimism 

that the project when 

delivered would bring the much 

expected relief to the port community, 

saying the government 

would equally intervene in other 

roads within Apapa, including 

the Mile 2-Tincan axis, Liverpool 

and Creek Road, where Julius 

Berger plc, had been directed 

to commence some palliative 

work, this week, to allow free 

access to the ports. 

The minister, who acknowledged 

that the construction 

work would unleash a level of 

inconvenience on the people, 

however, called on the cooperation 

of all stakeholders, including 

maritime truck owners, tanker 

drivers, businesses and residents, 

stressing that after the pain will 

come relief. He appealed to the 

truck owners and tankers to 

move their vehicles out of the 

road to facilitate and ensure the 

early completion of the work. 

Makoju said the Dangote 

Group was delighted to be involved 

in the deal because of its 

consistent commitment to creating 

positive impact in all of its 

host community, and believed 

that the intervention would help 

in revitalisation and sustaining 

the dying businesses in Apapa. 

He however appealed to 

the government to create enabling 

environment as that was 

the only way businesses could 

thrive. He noted that when 

individuals or companies paid 

their tax, they would expect the 

government to do what they are 

supposed to do, but government 

alone cannot do it. He lamented 

poor service delivery by some 

agencies of government, which, 

he stressed, did not support 

business.



C002D5556 

FT 

NATIONAL NEWS 

US turns down volume on South China Sea 

CHARLES CLOVER 

US efforts to contest 

maritime claims by 

Beijing in the South 

China Sea remain unchanged 

under the 

administration of Donald Trump, 

according to a senior US naval 

oicer. 

But while the US is continuing 

“freedom of navigation operations” 

(Fonops) by warships, the 

country’s military is being quieter 

about the strategy. 

Speaking during a visit to China, 

Admiral Scott Swift, commander 

of the US Paciic Fleet, conirmed 

the policy of talking less about efforts 

to challenge China’s maritime 

claims. 

“I think it’s a very positive step 

that current policy . . . is that we’re 

not going to talk about freedom of 

navigation operations in the South 

China Sea,” he said in an interview 

aboard the USS Sterett, a destroyer 

that visited the Chinese southern 

naval base in Zhanjiang last week. 

Such operations typically involve 

a US warship sailing inside a 

contested claim. 

Adm Swift declined to discuss 


details of a May 24 challenge by 

a US destroyer, in which the USS 

Dewey sailed within 12 nautical 

miles of an artiicial island claimed 

by China, known as Mischief Reef, 

sparking protests from Beijing. 

Under the administration of 

Barack Obama, the US had begun 

to publicise such operations, partly 

as a way to reassure its allies in 

the region, said Bonnie Glaser, an 

expert on China at the Center for 

Strategic and International Studies 

in Washington. 

Under the Trump administration, 

she said, “a decision was made 

to not discuss” Fonops. 

“Fonops are conducted globally 

and have been for decades. hey 

are not intended to be announced. 

hey enforce freedom of navigation,” 

she added. 

Japan and US Navy... 

Continued from page A3 

commanding oicer, Commander 

Bryce Benson, whose cabin was 

destroyed in the collision. 

Television footage of the other 

ship involved in the incident - the 

29,000-tonne ACX Crystal, a Philippine-lagged 

container vessel under 

charter by the Japanese shipping 

group Nippon Yusen - suggested 

that it had got away with comparatively 

light damage to its prow. 

No injuries were reported among 

the 20-strong Filipino crew of the 

ACX Crystal, who are being questioned 

by investigators after their 

ship docked at a port in Tokyo Bay. 

Nippon Yusen said it was co-operating 

with the investigation. 

Marine insurance experts said 

that the most likely outcome of 

the investigation would be one of 

professional negligence. Japanese 

media cited tracking data that suggested 

the ACX Crystal made a sharp 

turn shortly before the collision. 

But the same experts said that 

the investigation could find fault 

with the actions of both vessels - 

the USS Fitzgerald was struck on 

its starboard (right-hand) side, and 

maritime rules require vessels to 

give way to others on that side. 

At a press conference in Yokosuka 

yesterday, Vice Admiral Joseph 

Aucoin, commander of the US Navy 

7th Fleet, described a “large gash” 

below the waterline of the USS 

Fitzgerald and the “traumatic” attempts 

to stabilise the 8,315-tonne 

destroyer. 

he incident, he said, had taken 

place at 2:20am, when many of the 

ship’s 285 crew would have been 

asleep. After the collision, with large 

volumes of water looding into two 

berthing compartments, the radio 

room and auxiliary machine room, 

the crew “fought hard to keep the 

ship above the surface”, Vice Admiral 

Aucoin said. 

he 7th Fleet commander would 

not speculate on the cause of the 

collision, but confirmed plans to 

begin what are likely to be months 

of repairs to the USS Fitzgerald: the 

ship is salvageable, he said, noting 

that it was nicknamed “the Fighting 

Fitz”. 

Marcelo Rebelo 

Scores die as Portugal forest fire rages 

PETER WISE 

Portugal is investigating 

the cause of a devastating 

forest fire that 

claimed scores of lives 

over the weekend, as ireighters 

continue to battle wildires 

across the country. 

António Costa, the prime 

minister, described the blaze 

that broke out in a densely forested 

area near the small town of 

Pedrógão Grande, 200km northeast 

of Lisbon, as the country’s 

“greatest human tragedy in living 

memory”. 

Jorge Gomes, secretary of 

state for home affairs, said at 

least 61 people had been killed 

in the ire and more than 50 injured, 

six of them seriously. he 

prime minister said the death toll 

could rise as rescuers continued 

to search buildings destroyed by 

the blaze. 

hirty of the victims had been 

killed in their cars as they tried 

to escape the lames, Mr Gomes 

said. The bodies of 17 others 

had been found lying on or near 

the same stretch of road, many 

of them apparently victims of 

smoke inhalation. 

The government declared 

three days of national mourning 

as expressions of sympathy and 

offers of assistance poured in 

from leaders across the world, 

including Pope Francis, French 

president Emmanuel Macron 

and German chancellor Angela 

Merkel. 

Film and photographs of the 

blaze showed burnt-out cars, 

forested hillsides engulfed by 

lames, burning farmhouses and 

ireighters struggling in a heatwave 

to control a blaze fanned 

by strong winds. “We are trying 

to evacuate villages that are surrounded 

by lames and in great 

danger,” Valdemar Alves, the 

mayor of Pedrógão Grande, told 

the Lusa news agency hours after 

the blaze started at about 2pm on 

Saturday. “he ire came within 

50m of the town.” 

Residents fought the lames 

using buckets, hoses and branches. 

Helicopters ferried the injured 

to hospitals, and inhabitants of 

several threatened villages were 

evacuated to local schools and 

community centres. 

he head of Portugal’s investigative 

police said the blaze appeared 

to have been caused by a 

dry thunderstorm and ruled out 

arson. “Everything indicates that 

the fire was started by natural 

causes,” José Maria Almeida Rodrigues 

told reporters. “We have 

even found the tree that was hit 

by lighting.” 

Lightning from dry thunderstorms, 

in which rain evaporates 

before reaching the ground, is a 

common cause of wildires and 

can also cause strong surface 

winds that fan lames. Whatever 

the causes are found to be, the 

disaster is expected to focus 

unremitting attention on the prevention 

of forest ires, a perennial 

problem that has faced successive 

Portuguese governments. 

President Marcelo Rebelo de 

Sousa, who comforted survivors 

at the scene, said a rare combination 

of high temperatures, 

strong winds and zero humidity 

appeared to have contributed to 

the rapid spread and the extent 

of the ire, with diferent fronts 

extending for several kilometres. 

He praised ireighters as “true 

heroes”, saying “it was impossible 

to do more”. 

Trump leaves 

Washington’s 

whispering gallery 

out in the cold 

KATRINA MANSON 

It is the capital that lives and 

dies by politics and prides itself 

on networking. But nearly ive 

months after Donald Trump 

stepped into the Oval Oice, diplomats 

are still scrambling for 

Washington DC’s chief commodity 

- access. 

As foreign missions try to make 

sense of the new president and his 

policies, the so-called “whispering 

gallery of Washington” is swapping 

cocktail conversation for veranda 

venting. 

“Was there a brieing?” inquires 

an ambassador posted to DC who 

is aghast to be left out of the loop 

on one of Mr Trump’s about-turns. 

Elsewhere, another diplomat 

shakes his head, unsure to whom he 

should direct his questions: “State 

department is a mere skeleton.” 

The administration has yet to 

make dozens of senior appointments 

at the state department and 

the Pentagon, adding to the sense 

that the US government lacks clear 

direction. 

“Policy is a black box and nobody 

knows how things are being 

done,” says a serving state department 

oicial, adding that some bureaucrats 

feel they are being frozen 

out or given little to do. 

Matthew Dallek, a political 

historian at George Washington 

University, says such concerns 

make traditional centres of diplomatic 

activity in the administration 

less powerful than in the past. “It’s 

hard for diplomats to know if the 

information they’re receiving from 

the state department is reliable and 

this is in fact what the White House 

is going to do.” 

At the heart of the chaotic scene 

is Mr Trump, who in the course of 

his irst few months may not have 

yet “drained the swamp” as he 

promised, but who has certainly 

turned it inside out. 

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@ FINANCIAL TIMES LIMITED 2015 

Big US lenders set 

to step up payouts 

after clearing 

stress test hurdles 

BEN MCLANNAHAN & BARNEY JOPSON 

Big banks in the US are 

forecast to step up payouts 

to shareholders, 

as they clear the latest 

round of tests designed 

to ensure they could withstand a 

catastrophic shock to the system. 

After six years of annual stress 

tests, the likes of JPMorgan Chase, 

Wells Fargo and Goldman Sachs 

have built capital levels high 

enough to keep trading through 

the most severe downturn that 

the regulator can imagine. The 

banks have been given repeat endorsements 

from the US Federal 

Reserve for the way they manage 

their risks. 

As a result, according to analysts 

at Goldman, about a dozen 

of this year’s 34 test-takers will put 

in requests for payouts in excess 

of proits - up from a handful last 

year. Banks returning more than 

100 per cent of earnings through 

dividends and share buybacks 

over the next cycle could include 

Citigroup and Morgan Stanley, 

Goldman said. 

Even after applying the most 

severe of scenarios, many banks 

The US corn ethanol industry 

is increasing production 

capacity even as domestic 

fuel sales and government 

support reach a plateau. 

Two new reineries, the irst in 

years, are proposed in Iowa and 

South Dakota. hey are part of a nationwide 

expansion that would add 

500m gallons per year of capacity by 

2018, according to the Renewable 

Fuels Association. 

he US biofuels industry is the 

world’s largest, producing 44 per 

cent of global supply. It was boosted 

by a law requiring a sharp rise in 

domestic ethanol sales. 

But the federal corn ethanol 

mandate - which dictates minimum 

amounts of ethanol used in US 

fuel supplies - has levelled off at 

15bn gallons per year, a volume the 

Trump administration is expected 

to maintain. Stagnant gasoline 

demand is also capping sales, as 

most petrol sold in the US contains 

no more than 10 per cent ethanol. 

However, these constraints have 

not stopped ethanol companies 

FINANCIAL TIMES 

COMPANIES & MARKETS 

should have enough “excess” capital 

to increase returns to shareholders, 

agreed Michael Alix, a partner at 

PwC and former senior supervisor 

at the New York Fed. 

“Operating at minimum capital 

levels might cause some heartburn 

for firms and for regulators, as it 

doesn’t leave much of a bufer, but 

it is enough of a bufer that they can 

operate,” he said. 

he stress test is the foundation 

of the supervisory framework put 

in place by the Obama administration 

after the inancial crisis, when 

taxpayers found themselves on the 

hook for bank bailouts. Since 2011, 

the two-part test - often identiied 

by the name of its second part, the 

Comprehensive Capital Analysis and 

Review - has put irm caps on distributions 

of capital, while prompting 

banks to spend billions on improving 

the way they track risks. 

his hursday the 34 banks will 

discover whether the Fed thinks they 

have enough capital to cope with an 

Armageddon-like scenario, which 

this year involves a bigger spike 

in unemployment and a steeper 

crash in commercial real estate 

prices over the nine-quarter planning 

horizon. 

US corn ethanol industry 

boosts capacity 

GREGORY MEYER 

from building in the corn belt. 

With grain prices low and foreign 

demand robust, plants are still making 

a proit. 

Ringneck Energy is raising equity 

to build a $150m, 80m-gallon ethanol 

plant in Onida, South Dakota. 

“here’s a whole new opportunity 

out here for an ethanol plant, as long 

as you can be a low-cost producer,” 

said Walt Wendland, Ringneck chief 

executive. 

In Atlantic, Iowa, the Elite Octane 

group has broken ground on 

a $190m, 150m-gallon ethanol 

plant. “We’re not making this investment 

based on existence of the 

[mandate],” said chief executive 

Nick Bowdish. “We’re making this 

investment because the economics 

of corn ethanol are very attractive 

to us.” 

The last new ethanol plant 

opened two years ago in North 

Dakota, bringing the total to more 

than 200, said Geoff Cooper, an 

RFA executive. Capacity has grown 

within the existing leet as operators 

stripped out bottlenecks and 

deployed enzymes that digest corn 

starch more eiciently, he said. 

SARAH GORDON 

Companies operating in 

Europe are hugely underestimating 

the impact 

of new data protection 

regulation that comes into force 

next May, and are failing to prepare 

adequately for it. 

The EU’s General Data Protection 

Regulation (GDPR) will 

require many companies to adopt 

much stricter processes around the 

way they deal with customer data. 

Its implementation follows serious 

data breaches at TalkTalk in the 

UK, Yahoo, and other companies, 

and the recent ransomware attack, 

WannaCry, which afected organisations 

in 150 countries. 

he maximum ine for failing to 

comply with the regulation is 4 per 

cent of the previous year’s annual 

global turnover, or €20m, whichever 

is the higher. Consult Hyperion, a 

data management consultancy, has 

warned that inancial institutions 

in Europe are particularly at risk, 

and estimates that nearly €5bn of 

Randy Tinseth 

Boeing steps up small jet fight 

Boeing is expected to go 

on the ofensive this week 

against its European rival 

Airbus with the launch of 

a new version of its 737 Max singleaisle 

aircraft that it claims will save 

airlines up to $1.5m a year in operating 

costs. 

he US aircraft maker will launch 

a stretched version of the narrowbody 

passenger jet today at the 

Paris air show, where thousands of 

aerospace and aviation executives 

are gathering for several days of 

hard haggling, networking and plane 

spotting. 

Airbus, which has its headquarters 

in Toulouse, likes to trump Boeing 

on aircraft orders at the French 

show, while the US company boasts 

C002D5556 

it can deliver passenger jets faster to 

its customers. 

Boeing will attempt to upend that 

routine with the unveiling of its 737 

Max 10 jet, by outlining orders from 

several airlines for more than 100 of 

the aircraft. 

A little longer than its elder sibling, 

the 737 Max 9, the new aircraft is Boeing’s 

response to the popularity of 

Airbus’s A321 Neo narrow-body jet. 

he A321 Neo’s long range and high 

fuel eiciency has helped Europe’s 

largest aerospace group take close to 

60 per cent of the high-volume single 

aisle market. 

“Boeing needs something to compete 

against the A321,” says Sash 

Tusa, analyst with Agency Partners. 

“he A321 has outsold the Max 9 by 

about 4:1.” 

he 737 Max 10, which could enter 

BUSINESS DAY 

A7 


Groups fail to prepare for data laws 

LESLIE HOOK 

ines could potentially be levied on 

them over the irst three years of the 

new regulations coming into force. 

Tim Richards, principal consultant 

at Consult Hyperion, said that 

not only were inancial penalties 

for a data breach substantial, but 

that executives could also face 

criminal penalties if deemed responsible. 

“Data breaches are an unfortunate 

fact of life for inancial institutions, 

and our analysis suggests 

that there have been no fewer than 

27 data breach incidents among 

European Tier 1 banks in the past 

decade, with some banks as multiple 

ofenders,” he said. 

Assuming European financial 

institutions’ data were breached 

384 times over the three-year period, 

and were ined at the lower 

end of the GDPR scale at €260m 

per breach, penalties would total 

€4.7bn, he said. 

he GDPR rules will mean companies 

must provide more information 

on how customer data are collected 

and retained, allow customers 

the “right to be forgotten”, and 

implement special rules protecting 

children. Data breaches will have to 

be notiied within 72 hours to the 

EU’s Information Commissioner. 

Vanessa Leemans, cyber chief 

operating officer at insurer Aon, 

said ines for serious GDPR violations 

had the potential to reach the 

billions for large, global companies. 

She said that “GDPR legislates a 

complete restructure of how personal 

data are stored and used - 

and, crucially, will hold companies 

more accountable for the data they 

hold”. 

“Many companies are woefully 

unprepared for the signiicant 

changes to how we see personal 

data that the regulation will bring,” 

she said. 

Justin Baxter, partner at Crowe 

Horwath, the global risk consultancy, 

said a recent survey of inancial 

services companies found that 

more than 60 per cent were only 

just starting to get ready for GDPR, 

or were trying to understand the 

gaps they needed to address. 

service around 2020, will be about the 

same size as the A321 - meaning it will 

have up to 230 seats - and is likely to 

have a roughly similar range to the 

Airbus jet, says Randy Tinseth, Boeing’s 

vice-president for commercial 

aircraft marketing. But it will deliver 

huge operating savings to airlines, 

he argues. 

“It will be a little lighter and more 

eicient [than the Airbus A321 Neo] so 

it will have lower operating costs, [saving] 

about $1m to $1.5m in value every 

year,” says Mr Tinseth. Boeing has also 

begun to ofer some tantalising details 

about its mooted new-generation aircraft 

that will straddle a gap between 

the narrow and wide-body jets. 

he aircraft for now remains irmly 

on the drawing board and is not 

expected to be launched at the Paris 

show.

C002D5556 



FT 

ANALYSIS 


Blackstone - Multiple problems 

SUJEET INDAP 

Since its lotation a decade 

ago, Blackstone has seen 

its asset base quadruple 

even as other ‘alternative’ 

managers have faltered. 

Yet co-founder Stephen 

Schwarzman remains unsatisied. 

It has been a decade since Stephen 

Schwarzman listed Blackstone, 

his private equity irm, on 

the New York Stock Exchange. 

By most measures, the past 10 

years have been good to both Mr 

Schwarzman and Blackstone. Its 

asset base quadrupled to nearly 

$400bn. His name adorns the 

New York Public Library’s landmark 

Fifth Avenue building after 

a $100m donation. And he has 

emerged as an informal, if inluential, 

adviser to President Donald 

Trump. 

But a part of him remains unsatisied. 

Whatever else he and his 

irm have achieved, Blackstone’s 

share price remains little changed 

from the day it began trading - a 

reality that he laments loudly and 

frequently. In April, he invoked the 

spectre of Benjamin Graham and 

David Dodd, the fathers of value 

investing, to highlight what he sees 

as the market’s misunderstanding 

of his company’s value. 

Irritated by Blackstone’s modest 

earnings multiple, Mr Schwarzman 

vented in April that his irm 

had “faster revenue and earnings 

growth [than the broader market], 

and a much higher [dividend] payout. 

Go igure. I don’t think they 

teach that in Graham and Dodd. 

As most of you know, I’ve been 

racking my brain to make sense 

of this disconnect.” 

His grievances echo across the 

listed alternative investment managers, 

including his rivals Apollo, 

Carlyle, and KKR, which also trade 

at sharp discounts to conventional 

money managers. Yet, as one competitor 

said: “he biggest valuation 

problem for our sector is that Steve 

keeps complaining about his stock 

price.” 

Mr Schwarzman’s worries are 

unlikely to generate much sympathy. 

His 20 per cent stake in 

Blackstone is worth $8bn and 

generated $425m of dividends 

and proit-sharing for him in 2016 

alone. he irm has forged close 

relationships with controversial 

actors, including the Saudi Arabian 

government, which is partially 

funding a new Blackstone US 

infrastructure initiative, as well as 

opaque Chinese dealmakers such 

as Anbang Insurance Group that 

routinely pay top dollar for Blackstone 

assets. Mr Schwarzman 

has also been at the centre of the 

controversy about the preferential 

tax treatment that private equity 

funds receive. 

Lost in the debate, however, 

is the extent to which private 

equity and broader “alternative” 

investments - corporate buyouts, 

real estate, credit, venture capital 

- have triumphed in the past 10 

Jonathan Gray, the group’s head 

years. Alternative assets are the 

venues where sovereign wealth 

funds, pension plans, endowments 

and the ultra-wealthy have 

found outsized gains even as interest 

rates have hovered near zero. 

And in this new world of investing, 

Blackstone is the undisputed winner. 

What began in 1985 as a shaky 

start-up has been transformed 

into a seemingly unstoppable fee 

machine. 

Buying to own 

Blackstone priced its initial 

public ofering on June 21, 2007 at 

$31 per share. One market veteran 

noted the ironic timing: Blackstone’s 

debut was the same day 

that two Bear Stearns hedge funds 

stufed with mortgage-backed securities 

neared collapse - an event 

considered as the starting gun for 

the global inancial crisis. 

With the Blackstone IPO, ordinary 

investors had the chance 

to get a slice of the volatile but 

potentially massive incentive fees 

known as “carried interest” that 

irms like Blackstone rake in. Alternative 

managers typically charge 

1-2 per cent to “limited partners”, 

simply for finding and making 

deals. But the wealth creation opportunity 

came from the 20 per 

cent of gains that managers kept 

for themselves. 

As markets plummeted in early 

2009, Blackstone shares dropped 

to below $4. This frustrated Mr 

Schwarzman and his employees, 

who knew that institutions that 

had invested money into Blackstone 

funds had commitments 

locked up for a decade or so. 

Blackstone’s balance sheet was 

also healthy. “You’d wake up every 

morning and see Merrill Lynch or 

Citigroup down another $3bn or 

$4bn. But as the storm lashed, you 

realised you were in an unusually 

safe haven. I remember feeling like 

a lucky guy,” says one longtime 

employee. 

Still, its portfolio was shaken. 

It had made two massive property 

bets at the height of the bubble in 

2007. First was the $36bn acquisition 

of commercial property group 

Equity Oice Properties. Its losses 

were minimised when Blackstone 

quickly sold of its less attractive 

buildings for peak prices. 

More problematic was the $6bn 

it put towards the $26bn leveraged 

buyout of Hilton Hotels. Blackstone 

infused Hilton with more 

cash while strong-arming lenders 

into taking haircuts on their debt 

positions. At the same time, Hilton 

revitalised its properties and 

changed its strategy from owning 

locations to emphasising licensing 

revenues. 

Hilton eventually listed its 

shares in 2013; Blackstone, which 

retains a 10 per cent stake, has tripled 

its money. At the same time, 

the real estate investing businesses 

at Goldman Sachs and Morgan 

Stanley efectively collapsed during 

the inancial crisis. 

Blackstone, with more than 

$100bn in assets devoted to property, 

is now the world’s largest 

property investor. Jonathan Gray, 

the group’s head, is widely expected 

to eventually ascend to the 

top at the irm. 

“Hilton could have sunk two 

of their funds. But the turnround 

Blackstone executed there in 2011 

and 2012 simply cannot be done 

in the public markets. It shows 

the advantage of having locked-up 

capital,” says a rival. 

Blackstone’s two largest segments, 

corporate buyouts and 

real estate, have invested $171bn 

since 1988 and generated average 

annualised returns of roughly 15 

per cent, net of fees. 

Company executives reject 

the idea that their business is fuelled 

by exploiting companies by 

loading them up with cheap debt 

inancing. hey repeatedly cite the 

idea of “operational interventions” 

- meaning that they can take the 

time to re-adjust strategies and 

create savings across portfolio 

companies. 

“he perception of buyouts is 

that it’s all inancial engineering,” 

says Joseph Baratta, head of the 

private equity group. “he reality 

is much diferent. We’re not arbitraging 

things. We’re buying a 

company to own it for as much as 

15 years. We’re having to live with 

that business and make it better.” 

Bigger cheques 

In 2015, Calpers, the bellwether 

California state employee pension 

fund, shocked the industry when 

it announced it would slash the 

number of private equity firms 

it allocated money to from more 

than 300 to around 100. It said 

it had paid more than $3.4bn in 

performance fees to managers 

since 1990, and it believed it could 

lower and simplify what they were 

charged. (Blackstone and several 

private equity firms have been 

sanctioned by the Securities and 

Exchange Commission for improper 

fee practices). 

However, this shift has been 

good for the largest irms. “he big 

capital providers are writing bigger 

cheques to fewer irms. Only 

the bigger irms can take $500m 

or $1bn at a time, accelerating the 

winner-take-all mentality,” says 

Kevin Albert, a partner at Pantheon, 

a irm that invests in private 

equity managers. 

To appeal to diferent institutional 

investors, Blackstone has 

created new products with diferent 

fees or holding periods as well 

ones that can go beyond buyouts. 

In 2012, the irm became bullish 

on US oil transport. It went on to 

make three creative investments 

- a capital relief trade with a bank, 

a purchase of nine tankers and 

a joint venture - to capitalise on 

its assessment. Such land-grabs, 

even by experienced hands, can 

lop. he Carlyle Group, which had 

built its reputation in corporate 

buyouts, collected several hedge 

funds only to efectively ditch the 

business in 2016. 

Blackstone president Tony 

James attributes its expansion 

to the benefits of scale and the 

firm’s culture. “We can be early 

innovators because we can aford 

the R&D needed do things that 

perpetuate our advantages in intellectual 

capital. he other thing 

special about Blackstone is our 

commitment to non-hierarchical 

robust debate.” 

While Blackstone has steadily 

earned about $2.5bn annually 

in management fees, its carried 

interest can vary wildly. 

In 2014, with 2,000 employees, 

it recorded $4.4bn in performance 

fees. A year later that igure 

dropped by 60 per cent. In 2015, 

the strong gains the previous year 

led to a total dividend of nearly $3 

per share, but last year it only paid 

out $1.66. 

he consequence of that turbulence 

is that stock investors 

have put little value on future 

performance fees. Blackstone and 

its peers trade at around 10 times 

earnings. Analysts note that traditional 

asset managers like Black- 

Rock, whose earnings are almost 

exclusively management fees, 

trade at 20 times future earnings.


C002D5556 

BUSINESS DAY 

A9 

Harvard 

Business 

Review 

MondayMorning 


Multinationals have a bright future, if you know where to look 

ANIL GUPTA AND 

HAIYAN WANG 

The rise of 

economic 

nationalism 

has led many 

observers to 

announce that globalization 

is not just in retreat, 

but near death. The Brexit 

vote and the election of 

Donald Trump (as well as 

the popularity of various 

far-right European politicians) 

raise questions 

about the future of free 

trade. But the outlook for 

multinationals is good — 

so long as they adapt to 

the new realities. 

By every important 

measure other than trade 

in goods, globalization is 

thriving. And the decline 

in merchandise trade long 

predates any changes in 

political sentiment. 

Casual observers make 

the mistake of looking at 

global economic integration 

almost solely through 

When leaders are hired for talent but fired for not fitting in 

TOMAS CHAMORRO-PREMUZIC 

AND CLARKE MURPHY 

Over and over again, 

organizations are 

unable to appoint 

the right leaders. Although 

there are many reasons for 

this state of afairs — including 

overreliance on 

intuition at the expense of 

scientiically valid selection 

tools — a common 

problem is organizations’ 

inability to predict whether 

leaders will it in with their 

cultures. 

In order to upgrade their 

selection eforts, organizations 

must: 

the lens of merchandise 

trade. In reality, economic 

integration is a multidimensional 

phenomenon 

encompassing merchandise 

trade, services trade, 

cross-border investments 

and data lows. By every 

one of the latter three 

measures, global integration 

continues to thrive. 

Its structure, however, 

nizational cultures. Sadly, 

most organizations underestimate 

the importance 

of proiling their cultures. 

Well-designed surveys 

elsewhere, is emblematic. 

The strategic implications 

for multinational 

corporations are clear. 

They need to double 

down on localizing their 

operations in every major 

market. The design and 

speciications of products 

may remain largely standardized 

(think of smartphones 

and MRI scanners) 

or may not (think of 

entertainment and food). 

Regardless, the actual production 

of goods and services 

will need to become 

more local. 

Political leaders are almost 

always willing to let 

market forces dictate how 

global or local the design 

and features of products 

and services are. However, 

they do care whether a 

company brings investment 

and creates jobs, or 

whether foreign companies 

become contributing 

citizens of their country, 

instead of operating as 

tourists. 

In his 2016 commenceis 

morphing. It was once 

led by trade; it’s now led 

by investment. Trump’s 

call for Toyota to produce 

more within the U.S., rather 

than import more from 

that crowdsource people’s 

views of the culture are a 

much better indicator of a 

company’s values than the 

aspirational competencies 

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

curated by senior executives. 

3. Be realistic about the 

new leader’s ability to 

change the culture. It’s 

hard for newly appointed 

leaders to reshape culture. 

That’s not to say that organizations 

should give up 

and only hire leaders who 

are a good it. In fact, moderate 

misits who are charismatic 

and visionary are 

a company’s best bet for 

driving top-down change 

— but the process will be 

slow, and these leaders 

will need a great deal of 

support. The odds of success 

will be slim, and some 

1. Decode leaders’ motives 

and values. While expertise 

and experience are central 

to a leader’s potential, they 

can’t predict performance. 

A proper understanding of 

it must take into account a 

leader’s motives and values, 

also known as the “inside” 

of personality. For example, 

leaders who value tradition 

will have a strong sense of 

what is right and wrong, 

will prefer hierarchical organizations, 

and will have little 

tolerance for disruption and 

innovation. Put them in a 

creative environment and 

they will struggle. 

2. Decode their own orgament 

speech at New York 

University, General Electric’s 

then-CEO Jef Immelt 

noted that the company’s 

global future rests on a 

drive to deepen localization. 

This doesn’t mean 

that GE needs to reinvent 

its digital strategy for every 

market. But GE must 

invest and produce domestically 

more than it 

currently does within every 

major market. Every 

large company should 

be thinking along similar 

lines. 

(Anil Gupta is the 

Michael D. Dingman 

Chair in Strategy and 

Entrepreneurship at 

the University of Maryland’s 

Robert H. Smith 

School of Business. 

Haiyan Wang is a managing 

partner of the 

China India Institute.) 

leaders may be so disruptive 

in their intentions that 

they may harm morale 

and productivity, or end 

up disrupting themselves. 

As Jean-Paul Sartre noted, 

“only the guy who isn’t 

rowing has time to rock 

the boat.” 

(Tomas Chamorro-Premuzic 

is the CEO of Hogan 

Assessment Systems, 

a professor of business 

psychology at University 

College London and a faculty 

member at Columbia 

University. Clarke Murphy 

is CEO of Russell Reynolds 

Associates.)

A10 



C002D5556 

BUSINESS DAY 

A11 

Amazon to buy whole foods for $13.7bn 

AUSTEN HUFFORD, ANNIE 

GASPARRO & LAURA STEVENS 

Amazon.com Inc. AMZN 

+2.92% said it would 

buy Whole Foods Market 

WFM +27.62% Inc. 

for $13.7 billion as the giant internet 

retailer extends its reach 

and makes a deeper push into the 

grocery space. 

Amazon will pay $42 a share, 

valuing the grocer at a 27% premium 

to its closing price hursday. 

he deal, which is expected 

to close in the second half of this 

year, is by far the largest in Amazon’s 

history, 

The deal will give Amazon a 

network of roughly 450 Whole 

Foods locations spread out across 

42 states, which could help Amazon 

reach customers closer to 

their homes. The retailer has 

worked for years to build its Fresh 

Oil prices recover slightly, but glut fears persist 

CHRISTOPHER ALESSI, JENNY W. 

HSU & TIMOTHY PUKO 

Oil prices inched up Friday, 

but the market is 

still headed down for 

the week and holding 

near its lowest levels of the year 

because of the lingering glut. 

U.S. crude for July delivery 

recently gained 26 cents, or 0.6%, 

to $44.72 a barrel on the New 

York Mercantile Exchange. Brent, 

the global benchmark, gained 39 

cents, or 0.8%, to $47.31 a barrel 

on ICE Futures Europe. 

For the week, though, U.S. prices 

are down 2.5% and global prices 

are down 1.8%, both on pace for 

their fourth-straight losing week. 

Prices were getting some “minimal 

support” Friday morning 

from a slightly weaker dollar and 

higher investor risk sentiment, 

according to Giovanni Staunovo, a 

grocery delivery business, but its 

share of the market is just a sliver. 

The Seattle-based company 

recently tested brick-and-mortar 

grocery concepts, including two 

AmazonFresh Pick Up locations in 

its hometown, as it works to grab 

a bigger piece of the more than 

$600 billion edible-food consumer 

spending category. 

At first glance, the two don’t 

seem a match. Amazon is known 

as a low-price leader, while Whole 

Foods is more of a premium ofering. 

he grocery’s company culture, 

strong brand loyalty and network of 

stores was likely a draw in the deal. 

While grocery accounts for a 

large component of consumer 

sales overall, online retailers 

largely haven’t been able to crack 

the code. hey face hurdles like 

consumers wanting to pick their 

own produce and the need to deliver 

perishable, fresh and frozen 

food to people’s homes. 

commodity analyst at UBS. Traders 

who bet on falling prices are 

also likely closing out trades ahead 

of the weekend, which would help 

prices as they buy back contracts 

they sold, said Gene McGillian, 

research manager at Tradition Energy. 

“It’s the end of the week and 

people like to take some money 

up,” he added.” 

But both Mr. McGillian and Mr. 

Staunovo cautioned that likely 

increases in global production 

could push prices down by the 

end of the day. 

Oil fell more than 5% in each 

of the past two weeks, and futures 

have dropped a further 3% so far 

this week, hitting seven-month 

lows. More declines could be in 

the oing depending on weekly 

U.S. drilling-rig data later Friday 

from Baker Hughes. he active oilrig 

count has risen for 21 straight 

weeks. 

Read Ambitiously 

Hong Kong exchange pitches new structure to lure more big fish 

GREGOR STUART HUNTER 

Hong Kong’s stock-exchange 

operator has 

drawn up plans to 

launch a new board 

that could allow companies to 

sell shares offering greater voting 

power to some investors, as competition 

among global exchanges 

to attract new listings intensifies. 

Hong Kong Exchanges and 

Clearing said it would consult 

the market between now and 

Aug. 18 on its plan for a new 

board with two segments. One 

segment would focus on mature 

companies not currently able 

to list in the city because their 

shares limit the voting rights for 

some investors. The other would 

be geared toward early-stage 

companies and be off-limits to 

retail investors. 

he exchange said creating the 

new board “would be the best way 

to attract a greater diversity of issuers 

to list in Hong Kong,” citing 

a current lack of listings from companies 

in the fast-growing tech, 

biotech and health-care sectors. 

“We want to stay competitive, 

we want to stay relevant, and 

we want to continue to enhance 

market quality,” said HKEX chief 

executive Charles Li, adding he 

expected the new board to be 

established early next year if the 

plan receives a positive response. 

The Hong Kong exchange’s 

proposals come as major global 

exchanges are angling to host 

more companies’ share listings. A 

particularly fierce battle is being 

fought to attract Saudi Arabian 

Oil Co., known as Saudi Aramco, 

China’s monetary policy Zigs where U.S. Zags 

SHEN HONG 

A 

day after the U.S. Federal 

Reserve tightened 

monetary policy, China’s 

central bank effectively 

loosened, in a move that suggests 

Chinese authorities are now more 

concerned about inancial turmoil 

inside the country than money 

lowing out of it. 

The People’s Bank of China 

on Friday injected a net 250 billion 

yuan ($36.73 billion) into the 

financial system—more than it 

has on any single day since mid- 

January, when demand for cash 

was high ahead of the Lunar New 

Year holiday. 

The massive pump priming 

comes as a monthslong regulatory 

crackdown on excessive leverage and 

inancial misbehavior in China has 

left the markets jittery. Most recently, 

authorities detained Wu Xiaohui, 

the chairman of Anbang Insurance 

Group, one of China’s biggest insurers, 

for what people familiar with 

the matter described as a probe into 

possible economic crimes. 

Although market reaction has 

been muted, a number of Chinese 

banks had already distanced themselves 

from Anbang, whose life 

insurance unit in May was barred 

from selling new products for three 

months, in what was seen as an 

the world’s largest oil company by 

output, which is currently considering 

where to list its shares in an 

initial public offering that some 

estimate could value it at up to 

$2 trillion. 

London, New York and other 

global exchanges are also in the 

running for the Aramco IPO, and 

have faced pressure to change 

some of their listing rules to attract 

the oil giant. 

Mr. Li has previously said he 

hopes the creation of a new board 

will help attract multinational 

corporations such as Apple, Disney 

and Aramco to list in the city, 

but said the latest proposal was 

geared toward attracting stocks 

in the “new economy”. 

Dual-class shareholding structures 

offer different voting rights 

to different shareholders and are 

attempt to keep any troubles there 

from spreading to other parts of the 

inancial system. 

Regulators also tend to keep 

plenty of cash in the system in 

June, analysts say, due to a seasonal 

surge in demand due to corporate 

tax payments and regulatory requirements 

on banks’ capital. 

The PBOC’s move contrasts 

with its actions following the Fed’s 

previous rate increase in March, 

when it responded by pushing 

widely used in the U.S. by companies 

including Facebook Inc. and 

News Corp., the parent company 

of The Wall Street Journal. 

The Hong Kong exchange’s 

refusal to allow such structures 

in the past cost it the initial public 

offering of Alibaba Group Holding 

Ltd. , which listed in New 

York in 2014. Hong Kong was the 

world’s biggest IPO venue last 

year, according to data from the 

World Federation of Exchanges. 

But the exchange’s plan is 

likely to encounter opposition 

from the local market regulator, 

the Securities and Futures Commission 

of Hong Kong, which 

in 2015 shot down a previous 

concept paper that asked market 

participants whether they would 

accept changing the principle of 

one share, one vote. 

up its own rates within hours. 

Analysts attributed that reaction 

to the bank’s desire to discourage a 

further surge in money leaving the 

country, a danger if interest rates in 

the U.S. look much more attractive 

than at home. 

Since then, capital outflows 

have slowed, and analysts say 

Beijing’s concerns have shifted to 

making sure its regulatory crackdowns 

don’t endanger the economy 

and inancial system.



C002D5556 

Big oil firms are exploring a new frontier in shale: Profits 

BRADLEY OLSON 

For Bruce Niemeyer, the 

Chevron Corp. CVX -0.25% 

executive overseeing the 

company’s $15 billion expansion 

here, one question looms 

above all: Will we make money? 

Big oil companies including 

Chevron, Exxon Mobil Corp. and 

Royal Dutch Shell PLC are piling 

into the Permian Basin, the oil-rich 

region straddling Texas and New 

Mexico that is the epicenter of the 

second wave of U.S. shale drilling. 

Chevron and others say they 

will soon achieve something that 

has proven surprisingly elusive 

for their smaller peers: turning a 

profit. The shale-drilling renaissance 

rocked global markets and 

helped send crude prices into a 

prolonged slump. What it didn’t 

do was bring in much cash. Since 

Slower Eurozone wage growth is setback for ECB 

PAUL HANNON 

Eurozone wages increased 

at a slower pace in the 

first three months of this 

year, despite a pickup in 

economic growth that has seen 

unemployment rates fall to eightyear 

lows. 

That slowdown in pay growth 

will likely reinforce the European 

Central Bank’s caution in the face 

of calls from Germany to remove 

its stimulus measures, since policy 

makers see a pickup in pay as essential 

to meeting their inlation target. 

he European Union’s statistics 

agency Friday said wages in the 

first quarter of 2017 were 1.4% 

higher than a year earlier, a smaller 

increase than the 1.6% recorded in 

the inal three months of last year. 

he modest nature of the rise 

means wages lagged behind consumer 

prices over the same period, 

2011, the largest 30 independent 

U.S. shale producers spent an average 

of nearly $1.33 for every $1 they 

made drilling wells, according to a 

Wall Street Journal analysis. 

In the past two years, those 

30 have lost $130 billion. More 

than 120 companies have gone 

bankrupt, and many of those that 

survived have done so with cash 

infusions from Wall Street, which 

rewarded the drillers for their fast 

growth. 

That model won’t work for 

Chevron, Exxon and other companies 

who pay shareholders generous 

dividends and need to bring 

in more cash than they spend over 

time. To transform an important— 

yet money-losing—technology into 

a source of proit, executives like 

Mr. Niemeyer, the head of Chevron’s 

midcontinent business, are 

turning to their strengths. 

resulting in a drop in real incomes. 

he number of workers without 

jobs has fallen steadily since the 

eurozone’s economy returned 

to growth in mid 2013, and ECB 

President Mario Draghi said ive 

million jobs have been created 

since the start of 2014. The unemployment 

rate has fallen to its 

lowest level since March 2009, a 

bigger accomplishment than it may 

seem because the proportion of the 

adult population seeking work has 

increased, in contrast to the U.S. 

But in common with other 

parts of the developed world, that 

decline in joblessness hasn’t translated 

into a pickup in wage growth. 

he ECB has said that may partly 

be because workers are looking 

back to the very low rates of inlation 

that persisted in 2015 and 2016 and 

asking for only modest pay rises. 

hat may change in response to a 

pickup in inlation earlier this year. 

Read Ambitiously 

Google faces record eu antitrust fine 

NATALIA DROZDIAK 

Facebook boosts ai to block terrorist propaganda 

SAM SCHECHNER 

The European Union’s antitrust 

watchdog in the 

coming weeks is set to hit 

Alphabet Inc.’s GOOGL 

-0.80% Google with a record ine for 

manipulating its search results to 

favor its own comparison-shopping 

service, according to people familiar 

with the matter. 

he penalty against Google is 

expected to top the EU’s previous 

record ine levied on a company 

allegedly abusing its dominance: 

€1.06 billion (about $1.18 billion) 

against Intel Corp. INTC -0.62% 

in 2009. 

he ine could reach as high as 

10% of the company’s yearly revenue, 

which stood at $90.27 billion 

last year. 

But more painful to Google 

than a sizable ine could be other 

consequences that come with the 

European Commission’s decision, 

including changes not only to the 

tech giant’s business practices with 

its shopping service but with other 

services as well. The EU’s decision 

could also embolden private 

litigants to seek compensation for 

damages at national courts. 

The EU is likely to demand 

Google treat its own comparison 

shopping service equally with 

those of its competitors, such as 

Foundem.co.uk and Kelkoo.com 

Ltd., possibly requiring the search 

giant to make rival services more 

visible on its own platform than 

they are at present. Such companies 

rely on traic to their site from 

search engines like Google’s. 

he EU has been in talks with 

some of the complainants about 

how Google should change its 

search results, though any precise 

order would likely only be hammered 

out after a decision is announced. 

Google general counsel Kent 

Walker has previously argued that 

forcing the company to place competitors’ 

product ads in its search 

results “would just subsidize sites 

that have become less useful for 

consumers.” he regulator’s move 

would come as welcome relief to 

a range of web companies, large 

and small and both European and 

American, who have been urging 

the EU for years to take antitrust 

action against Google. News Corp 

, owner of he Wall Street Journal, 

has formally complained to the 

EU about Google’s conduct with 

its search service for news articles. 

he watchdog irst opened its 

investigation into Google’s practices 

in 2010. he former competition 

commissioner Joaquín Almunia 

later engaged in more than two 

years of talks with Google to try to 

settle the case. But outcries from 

competitors, as well as from politicians 

in Germany and France, led 

the EU in 2014 to reject Google’s 

ofers as insuicient. 

hat led the way for Mr. Almunia’s 

successor, current EU antitrust 

chief Margrethe Vestager, to 

become the irst regulator to ile 

formal accusations against Google 

in April 2015 when she issued a 

so-called “statement of objections” 

in the comparison shopping case. 

An EU decision against Google 

would set the regulator apart 

from authorities in the U.S. who 

closed their own investigation 

into Google’s search practices in 

2013 after the company agreed to 

voluntary changes. 

That European regulators decided 

to move against Google when 

their U.S. counterparts held back 

could in part relect the company’s 

higher market share on the continent, 

where it captures about 90% 

of the search market. 

Under intense political 

pressure to better block 

terrorist propaganda on 

the internet, Facebook 

Inc. FB -0.30% is leaning more on 

artiicial intelligence. 

The social-media firm said 

Thursday that it has expanded 

its use of A.I. in recent months to 

identify potential terrorist postings 

and accounts on its platform—and 

at times to delete or 

block them without review by a 

human. In the past, Facebook and 

other tech giants relied mostly on 

users and human moderators to 

identify offensive content. Even 

when algorithms lagged content 

for removal, these firms generally 

turned to humans to make a 

inal call. 

Companies have sharply boosted 

the volume of content they 

have removed in the past two 

years, but these efforts haven’t 

proven efective enough to tamp 

down a groundswell of criticism 

from governments and advertisers. 

hey have accused Facebook, 

Google parent Alphabet Inc. and 

others of complacency over the 

proliferation of inappropriate 

content—in particular, posts or 

videos deemed as extremist propaganda 

or communication—on 

their social networks. 

British Prime Minister heresa 

May ratcheted up complaints this 

month in the wake of a series of 

deadly terror attacks in the U.K., 

and sought new international 

agreements to regulate the internet 

and force technology companies 

to preemptively ilter content. 

In response, Facebook disclosed 

new software that it says it 

is using to better police its content. 

One tool, in use for several months 

now, combs the site, including 

live videos, for known terrorist 

imagery, like beheading videos, 

to stop them from being reposted, 

executives said hursday. he tool, 

however, doesn’t identify new 

violent videos like the Cleveland 

murder that was posted on Facebook 

in April.

BUSINESS DAY 

Insight 

NEWS YOU CAN TRUST I MONDAY 19 JUNE 2017 C002D5556 

ivethings 

for your new week 

Fascinating business facts 

60% 

The surge in the application of solar as part of the 

energy mix of nations and homes is beginning to get 

the world’s attention, with analysts predicting that solar 

power will lead the charge in the portion of renewable 

energy rising to as much as a third in matter of years. Another 

good news, the cost of installing a solar power unit 

will fall by a staggering 60 per cent in another 15-20 years. 

Partnerships as a strategy 

to revive education 

$10bn 

The cost of keeping US troops in Japan is at a whooping 

$10bn annually and it is enough to fund just under half 

of Nigeria’s 2017 federal budget of N7trn. The $10bn bill 

is shared equally by both the US and host Japan. 

Nigeria has the 

biggest economy 

in Africa 

and in a recent 

London Stock 

exchange report entitled 

Companies to Inspire Africa, 

Nigerian companies 

were listed among the fastest 

growing in Africa. 

While Nigeria’s economy 

shows strength, its foundation 

for the future is weakened 

by an education system 

that is not keeping up. According 

to UNESCO, of the 

260 million out of school 

children in world, 9 million 

age of 15 in Nigeria, focusing 

on making education 

the engine of growth for the 

next generation is critical to 

unlocking Nigeria’s potential 

demographic dividend. 

hankfully, the Nigerian federal 

and state governments 

are committed to addressing 

this challenge. In the context 

of such a growing economy, 

it is not surprising that the 

government is seeking to do 

this by embracing the advantages 

of technology and 

partnerships. Technology has 

become an enabler of better 

schooling and development 

Innovative partnerships that take the best 

from the public and the private sectors 

and use it to deliver results are common 

in other sectors such as health, education 

and energy. So, it is only logical that 

education adopts this approach. 

of them are in Nigeria and 4.7 

million of those are primary 

school children in Nigeria. 

he Nigerian Ministry of Education 

reports that 50% of inschool 

children cannot read 

or write and 63% of children 

who live in rural areas cannot 

read at all. 

hese are staggering statistics, 

and they require a 

committed response. Not 

least because of the consequences 

for continuing 

economic development. 

With industry not able to 

ind qualiied talent, there is a 

struggle to produce the good 

and services that Nigerians 

need. Given this situation, it 

is not surprising that 60% of 

15 – 24 year old’s and unemployed, 

and 35% of even 25- 

34 year old’s are unemployed 

or underemployed. With 78 

million children under the 

across the globe and Nigeria 

is positioning itself at the 

forefront of that movement. 

Sadly, the reason that Nigeria 

is on the minds of many 

outside its borders is not for 

its dynamic young population 

or its growing ecosystem 

of innovation and enterprise, 

but because of continuous 

news reports about the activities 

of Boko Haram and the 

plight of the Chibok girls. his 

must be frustrating for Nigerians 

who know that there is 

much more to their country 

than is seen through this one 

lens. This public exposure 

has partly been down to the 

incredible activism of some 

who have worked tirelessly to 

draw attention to this issue, 

a consequence of which has 

been to bring education to 

the forefront of the national 

and state agendas. Thankfully, 

Nigeria is making a 

renewed commitment to 

education reform. 

This commitment has 

the promise of transforming 

what would otherwise be 

yet another unwieldy and 

unemployed generation of 

poorly educated youth into 

the leaders of Nigeria’s economic 

development, paying 

dividends far into the future 

as families’ incomes increase. 

Global research strongly 

suggests that educating the 

next generation will help 

reduce the likelihood of future 

conflicts and improve 

economic prospects for individuals, 

communities and 

whole economies. Inequality 

is a driver of unrest and 

when educational inequality 

doubles, the chance of 

conlict more than doubles. 

Today, the number of people 

displaced by conlicts is 

at an all-time high. Where 

economic, technological, 

demographic, and geopolitical 

trends collide with weak 

education systems, the risks 

of instability and economic 

decline are at their greatest. 

Recently, a report backed 

by USAID and DFID was 

launched at the World Economic 

Forum on Africa. It 

that called for more education 

partnerships between 

governments and the private 

sector. he report advocates 

the potential beneits when 

these two sectors utilize and 

combine diferent skills and 

experiences to improve outcomes 

for children. Partnership 

models are not new to 

Bridge and we already operate 

one in Liberia as part of 

the Partnership Schools for 

Liberia (PSL) initiative and 

in Andhra Pradesh in India. 

These partnerships seek to 

replicate learning gains evidenced 

by Bridge in Kenya, 

delivered through an innovative 

technological model. 

In two consecutive years, 

Bridge pupils scored on average 

signiicantly higher than 

their peers in national exams. 

In this context, Bridge 

is committed to working in 

partnership with the government 

of Nigeria and their 

state governments. In Lagos, 

Bridge manages 37 schools in 

areas where government service 

is limited and weak, including 

in the impoverished 

areas of Alimosho and Ojo, 

serving over 7400 children. 

Bridge also partners with 

Lagos State and its vanguard 

program CodeLagos, a programme 

that aims to equip 

one million young people 

with coding skills and transform 

the state into a major 

technology hub over the 

next decade. In Edo state, 

the governor has said that 

his ‘agenda is to improve the 

quality of education, especially 

at the primary school 

level’, believing that ‘If you do 

not get it right at the primary 

school level, such pupils will 

struggle all through life.’ 

Innovative partnerships 

that take the best from the 

public and the private sectors 

and use it to deliver results 

are common in other sectors 

such as health, education 

and energy. So, it is only 

logical that education adopts 

this approach. The question 

as to whether a sector 

should be public or private 

is now defunct. he question 

has become how the public 

and private can best work 

together to deliver efective 

outcomes together – and 

see children thrive and the 

nation rise. 

Written by Shannon May, 

Co-Founder, Bridge International 

Academies 

$1.5bn 

One picture that demonstrates the strength of the glue 

holding the US to Mexico can be seen in how goods worth 

$1.5bn enters the US daily from Mexico every day. US exports 

into sub-saharan Africa is a meager $25bn annually. 

30% 

The minimum threshold for black ownership of 

mining companies in South Africa has been raised to 30 

percent from 26 percent. Mining companies in the world’s 

top platinum producer have complained about a lack of 

consultation, and say onerous rules would hurt investment 

in an economy that has just slipped into a recession. 

4000 

Ethiopia is winning plaudits for attracting Chinese, 

Turkish and US investment into garment and shoe factories, 

notably from Chinese shoemaker Huajian Group, 

which employs 4,000 people in an industrial park outside 

Addis Ababa, the capital. This had led to the country being 

described as a regional manufacturing powerhouse. 

THIS WEEK’S HUMOUR 

That money talks, I will not deny; I heard it once, 

it said goodbye - Richard Armour 

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

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BusinessDay 19 Jun 2017

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