BusinessDay 31 Oct 2017

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Trucks banned from coming to Apapa by year-end – Amaechi ...Page 2 

NEWS YOU CAN TRUST I **TUESDAY 31 OCTOBER 2017 I VOL. 14, NO 471 I N300 @ g 

Nigeria’s petrochemical market 

set to reach $5.8bn next year 

ISAAC ANYAOGU 

It is coming a bit late, but 

for Nigeria it is better late 

than never. Africa’s largest 

oil producer is on its way to 

becoming a petrochemical 

hub with three plants expected 

to bring fertilizer output to 7.2 

million metric tons next year, 

Fertilizer output to hit 7.2mmt 

Plastics growing at 6% per annum 

along with 900,000 thousand 

metric tons of polypropylene 

and 860,000 metric tons of polyethylene. 

BusinessDay research reveals 

that these capacity additions 

could value Nigeria’s petrochemical 

market at $5.8 billion 

Continues on page 4 

Hunt for frontier 

yield may hasten 

Nigeria’s return to 

global bond indexes 

LOLADE AKINMURELE 

Investors’ scramble for highyielding 

frontier market 

bonds and an improvement 

in foreign exchange liquidity 

in Nigeria could restore Africa’s 

most populous nation on global 


Buhari to 

restructure NIA, 

sacks Lawal, Oke 

TONY AILEMEN, Abuja 

... as Tinubu declines 

comment on 2019 election 

The war against corruption 

has finally claimed its first 

high ranking appointee of 

the administration after much 

public outcry, as President Mu- 


L-R: Stuart Symington, US ambassador to Nigeria; Jane Wales, CEO, Global Philanthropy Forum; Toyin Saraki, founder, Wellbeing Foundation Africa; 

Tsitsi Masiyiwa, chair, African Philanthropy Forum; Ndidi Nwuneli, board member; Queen Sylvia, kenote speaker, and Gbenga Oyebode, board member, 

at the 2017 African Philanthropy conference, with the theme ‘African Philanthropy in a Changing Global Context’ in Lagos, yesterday. Pic by Olawale Amoo 

Nestle, Dangote Flour revenues surge as FMCG firms gain from devaluation 

... sales to Cameroon, Benin growing 

BALA AUGIE 

Fast Moving Consumer 

Goods (FMCG) firms 

finally have a reason to 

smile following a tough 

2016 as the devaluation of the 

naira is leading to a jump in sales 

to neighbouring countries. 

In the past two years, the 

naira has fallen nearly 50 percent 

to the CFA franc (which is 

pegged to the Euro), meaning 

locally produced Nigerian goods 

are now much cheaper for traders 

to buy and sell in places like 

Cameroon, Benin Republic and 

Niger. 

FMCGs have also benefited 

from higher prices for their 

products as evidenced in margin 

expansion, an indication that 

these firms were able to shift 

some rising input costs due to 

devaluation to consumers despite 

a tight market. 

BusinessDay analysis shows 

that cumulative total sales for 8 

FMCGs that have released third 

quarter results increased by 

36.80 percent to N854.04 billion 

in September 2017. 

This compares to the third 

quarter period to September 

Political risks 

cloud growth 

prospects in 

Nigeria, South 

Africa – IMF 

P. 4 

2016 when revenue for the eight 

firms was down 9.5 percent to 

N624.14 billion from the 2015 

period, data compiled by BusinessDay 

shows. 

The firms are: Unilever Nigeria 

Plc, Nestle Nigeria Plc, Cadbury 

Nigeria Plc, Nigerian Breweries 

(NB), Guinness Nigeria Plc, 

Continues on page 38

2 BUSINESS DAY C002D5556 

Tuesday 31 October 2017 

NEWS 

‘Trucks banned from coming to Apapa by year-end’ 

... as FG plans cargo movement by rail to Papalanto, Ogun 

AMAKA ANAGOR-EWUZIE 

Respite may have 

come the way of 

businesses and 

residents of Apapa 

Port city, as the Federal Government 

concludes plan to 

commence movement of 

cargoes, especially containers 

intended for warehouses 

belonging to Lagos-based 

importers, from Apapa Port 

by rail to Papalanto in Ogun 

State. 

The plan, according to 

the government, is meant to 

reduce the number of trucks 

queuing on the already bad 

Apapa roads, reduce the 

volume of gridlock and manhour 

loss on the roads as well 

as limit the travel time on the 

Apapa Port roads, notorious 

for heavy traffic problems. 

Speaking in Lagos on 

Monday at the event marking 

the 2017 World Maritime Day 

celebration with the theme, 

“Connecting Ships, Ports and 

People,” Chibuike Amaechi, 

minister of transportation, 

who made the disclosure, 

said the Lagos- Kano narrow 

gauge would become 

operational before the end 

of December 2017, because 

the Federal Government was 

determined to move cargo 

by rail to reduce pressure on 

the roads. 

“All cargo for Lagos would 

be discharged at Papalanto 

with train, while trucks would 

go to Papalanto to take delivery 

of the consignment. 

Other cargoes like those going 

to Kano would be conveyed 

to Kano directly by 

rail,” Amaechi said. 

Amaechi, who acknowledged 

the fact that the narrow 

gauge might not work 

efficiently, said movement 

of cargo by rail would start 

as scheduled as the Federal 

Government would be taking 

delivery of 100 new wagons 

and six new locomotives 

before December. 

“Our aim is to reduce the 

time spent by importers in 

the ports to clear their consignments 

because we know 

that the bad state of the road 

appear to be a major problem,” 

he said. 

The minister further disclosed 

that earlier plans by 

General Electric (GE) to start 

container shuttling by rail 

from Apapa Port to Ebute- 

Emeta would no longer work, 

as that would move massive 

traffic volume from Apapa to 

Ebute-Emeta, which would 

not solve the problem. 

“Initially, GE was to start 

container shuttling by railway 

from Apapa to Ebute-Meta 

so that trucks can be picking 

the containers to importers’ 

warehouses, but we said that 

would not work because the 

number of trucks I saw on 

the road yesterday (Sunday) 

would mean massive movement 

of trucks from Apapa 

to Ebute-Meta,” the minister 

said. 

He however stated that 

the proposed container shuttling 

from Apapa Port to Papalanto 

would start by the 

end of December, saying, 

“It is a project that would 

be executed by the Federal 

Ministry of Transportation in 

partnership with the Nigerian 

Ports Authority (NPA) and 

Nigerian Railway Corporation 

(NRC).” 

Recall that APM Terminals 

Apapa Limited, the concessionaire 

of the Apapa 

container terminal, had in 

2013 restored the rail line 

leading into the Apapa Port 

to effectively connect to the 

hinterlands. 

Reacting to this, Tony 

Anakebe, managing director 

of Gold-Link Investment 

Limited, a clearing forwarding 

company, observed that 

moving in and out of the 

ports in Lagos had become 

a nightmare due to the bad 

state of roads leading to the 

ports, and commended the 

Federal Government for the 

new initiative to decongest 

Apapa. 

“The entire system has 

become totally dysfunctional 

such that delivery of empty 

containers and the evacuation 

of cargo have become 

a terrifying experience. This 

plan is in response to the 

urgent need to revive the rail 

system for the purpose of 

evacuating both containers 

and petroleum products, 

especially from Lagos ports 

that are already congested,” 

he stated. 

Anakebe further disclosed 

that charges by haulage vehicles 

had increased astronomically 

because of the 

long travel time and poor 

turnaround time resulting 

from the slow pace of cargo 

evacuation from the ports. 

This is taking a toll on the 

private sector and the entire 

economy at large, owing to 

the frequent loss and cargo 

damage caused by fallen 

containers on transit. 

FG signs 3-year $195m maritime 

security contract with Israeli firm 

AMAKA ANAGOR-EWUZIE 

Federal Government 

said on Monday that 

it had entered into a 

three-year contract 

with an Israeli firm to manage 

and secure Nigerian 

waterways against pirate 

activities and sea robbers. 

The agreement, which 

has $195 million financial 

obligation on the Nigerian 

government, will also involve 

the training of Nigerian 

security personnel drawn 

from Nigerian Navy, Nigerian 

Army and Nigerian Police 

by the Israeli company, and 

is expected to take-off this 

December. 

Chibuike Amaechi, minister 

of transportation, who 

disclosed this during the 

2017 World Maritime Day 

celebration held in Lagos on 

Monday, said the contract 

became imperative owing 

to the huge amount shipping 

firms pay for security escort 

on Nigerian waterways. 

“Currently, Maersk said 

they spend between $15 

million and $18 million annually 

to pay those escorting 

their vessels from one point 

to another on our waterways. 

We should be able to deflate 

that by next year so that peo- 

ple can do their businesses 

on our waterways without 

any fear of being attacked or 

harassed,” he said. 

According to the minister, 

“We have mandated a 

consulting firm to do a study 

of the maritime sector, and 

they will round off in nine 

months. They have already 

done between three and 

four months, and we are 

expecting them to submit 

an interim report on their 

findings. 

“One of the burning issues 

in the maritime sector is 

security. But in the next three 

years, the Israeli firm will 

train our security operatives 

for them to take over after 

the expiration of the contract. 

They are yet to launch 

because they are still buying 

the equipment. When you 

see the equipment’s on the 

waterways, people will know 

they are safe and secured to 

do their businesses.” 

He said that Mr. President 

had approved the contract 

and is being done through 

the Nigerian Maritime Administration 

and Safety 

Agency (NIMASA). “The Israelis 

has assured us that after 

the training of our security 

operatives, such harassment 

and attacks on our waterways 

will not happen again.


BUSINESS DAY 

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4 BUSINESS DAY 

C002D5556 


NEWS 

Political risks cloud growth prospects 

in Nigeria, South Africa – IMF 

PATRICK ATUANYA 

Nigeria and South Africa 

are the biggest economies 

in sub-Saharan Africa 

(SSA), but growth prospects 

for both nations have been 

clouded by political uncertainty 

linked to the tenure of their 

leaders, the International Monetary 

Fund (IMF) said in a report 

released on Monday. 

Economic growth is expected to 

rise to 3.4 percent in SSA next year 

from 2.6 percent in 2017, the IMF 

said in the report, however rising 

debt and political risks in larger 

economies will weigh down future 

growth, it warned. 

“Key downside risks to the 

region’s growth outlook emanate 

from the larger economies, 

where elevated political uncertainty 

could delay needed policy 

adjustments and dampen investor 

and consumer confidence,” the 

IMF said in the report launched in 

Harare, Zimbabwe. 

“A further pickup in growth is 

expected in 2018, but momentum is 

weak, and growth will likely remain 

well below past trends in 2019.” 

The IMF said a good harvest 

and recovery in oil output in Nigeria 

would contribute more than 

half of the growth in the region this 

year, while an uptick in mining and 

a better harvest in South Africa as 

well as a rebound in oil production 

in Angola would add to growth. 

Gross domestic product in 

Nigeria, the continent’s largest 

economy, advanced for the first 

time in six quarters in the three 

months ended June 2017, from a 

year earlier, growing 0.55 percent, 

the National Bureau of Statistics 

(NBS) said last month. 

In South Africa, GDP expanded 

2.5 percent in Q2 from the previous 

quarter, ending the second recession 

in almost a decade. 

Political uncertainty is growing 

in Nigeria, where President Muhammadu 

Buhari has been afflicted 

by illness, causing speculation 

about whether he is well enough 

to run Africa’s biggest economy. 

South Africa has been clouded 

by the rule of Jacob Zuma, who has 

battled scandals, including corrupt 

allegations ahead of his ANC 

party’s conference in December to 

elect a new party leader. 

In the continent’s most-industrialised 

economy, low demand for 

its commodity exports and political 

turmoil have weighed on output. 

Two ratings companies cut its international 

debt to junk in April after 

President Jacob Zuma fired Pravin 

Gordhan as finance minister, with 

the changes battering business and 

consumer confidence. 

To help maintain growth, coun- 

tries should diversify from dependence 

on commodities and 

oil, implement fiscal reforms to 

stimulate growth and attract private 

investment, the IMF said. 

The IMF said Africa public debt 

would rise to 53 percent of GDP 

this year from 48 percent in 2016. 

More worryingly, most countries 

were now borrowing from local 

banks, which could destabilise the 

domestic financial sector and fuel 

inflation. 

Debt servicing costs were also 

up, but high debt levels were in particular 

complicating the economic 

outlook for six nations, including 

Zimbabwe, which is gripped by a 

crunch forex shortage. 

“Debt servicing costs are becoming 

a burden, especially in 

oil-producing countries ... and are 

expected to absorb more than 60 

percent of government revenues 

in 2017,” IMF said. 

While some countries had 

made progress in reducing their 

fiscal deficits, others, like Africa’s 

most advanced economy South 

Africa would see the deficit widen. 

South Africa last week raised its 

estimate for this year’s budget deficit, 

saying the country faced sluggish 

economic growth, shortfalls 

in revenue and costly bailouts of 

struggling state-owned companies. 

In July, the South African central 

bank halved its economic 

growth prediction for this year to 

0.5 percent. 

Nigeria released a four-year programme 

in March that aims to boost 

growth to 7 percent by 2020 through 

lifting oil output, opening farmland 

and increasing investment in power, 

roads, rail and ports. 

L-R: Bola Onadele. Koko, managing director/CEO, FMDQ OTC Securities Exchange (FMDQ); Sarah Alade, past chairman, 

FMDQ board of directors, and Jibril Aku, vice chairman, FMDQ board of directors, during a cocktail reception and 

dinner party held in honour of Sarah Alade and retired directors of FMDQ in Lagos. 

Buhari to restructure NIA... 

Continued from page 1 

hammadu Buhari approved 

the termination of suspended 

Secretary to the Government of 

the Federation (SGF), Babachair 

Lawal, and director-general of 

the National Intelligence Agency 

(NIA), Ayo Oke. 

The move is also coming with 

approval of recommendation by 

the Vice President Yemi Osinbajo’s 

committee to restructure the NIA, 

as part of efforts to make it more 

effective. 

After much awaited action, the 

President, according to a statement 

by the special adviser to the President 

on media and publicity, Femi 

Adesina, approved Osinbajo committee’s 

recommendations that 

include among others the need 

to relieve both men of their jobs 

for misdemeanours and breach of 

public trust. 

Both Lawal and Oke were 

suspended on April 19, while 

President Buhari established the 

committee same day to probe allegations 

of financial misconduct 

against the SGF, who was accused 

of influencing the award of contract 

worth N200 million to his private 

firm under the North East Presidential 

rehabilitation programme. 

Lawal was accused of violating 

due process in the award of the 

contract, while large amounts of 

foreign and local currencies, said to 

belong to the NIA, at the Ikoyi, Orsborn 

house, was discovered by the 

Economic and Financial Crimes 

Commission (EFCC) in Lagos. 

The huge cash, concealed from 

government knowledge, was said 

to had been kept in the private residence 

for NIA covert operations. 

The Osinbajo panel also had the 

Attorney-General and Minister of 

Justice, Abubakar Malami and National 

Security Adviser, Babagana 

Munguno, as members. 

The panel was given two weeks 

to submit its report to the President, 

but he finally got the report 

on August 23, 2017, following the 

long absence of the President on 


Nigeria’s petrochemical market set to reach... 


per annum by 2018. 

Nigeria’s current biggest fertilizer 

producer, Indorama Eleme 

Petrochemical Limited, 

commissioned its expanded 

plant in July 2017, pushing capacity 

to 1.5 million metric tons 

of urea and 4,000 metric tons of 

NPK fertilizer. 

The company’s plant is also 

designed to produce 120,000 

metric tons of polypropylene 

and 360,000 metric tons of 

polyethylene per year. Ethylene 

is the foundation for making 

plastics essential to consumer 

and industrial goods. 

Processing plants like Indorama’s 

then turn the chemical into 

polyethylene, the world’s most 

common plastic used in garbage 

bags and food packaging. 

Notore Chemical Industries 

is also expanding its facilities 

and plans to ramp up production 

by 1.75 million metric tons 

of urea and 1 million metric tons 

of NPK. 

Dangote Fertilizer Plant, the 

biggest planned capacity in the 

world, is set to come on stream 

in January 2018, producing 

about 3 million metric tons of 

urea yearly. It will also produce 

about 780,000 metric tons of 

polypropylene and 500,000 

metric tons of polyethylene. 

These plants will raise Nigeria’s 

fertilizer capacity to 7.2 

million tons per annum (p.a) 

at an average cost of N150,000 

per metric ton, putting the 

value of output at N1.088 trillion 

($3.5bn). 

According to S&P Platts, the 

average price of polypropylene 

is $1,212 per ton. 

Dangote’s plant is expected 

to add 780,000 capacity of polypropylene 

while Indorama 

currently does 120,000 metric 

tons of polypropylene, valuing 

the combined output at $1.09 

billion. 

Dangote also plans 500,000 

metric tons of polyethylene 

capacity while Indorama currently 

produces 360,000 metric 

tons of the product, putting the 

expected value at $1.1 billion at 

the average price of $1,357.18 

per ton, according to Platt’s 

data. 

The growth of Nigeria’s middle 

class over the past decade 

is driving the consumption of 

petrochemical products, and 

analysts say the value to the 

economy is enormous. 

Nigeria currently exports 

over 1.8 million barrels of crude 

oil per day without adding 

much value to it and benefiting 

from its vast derivatives. 

The petrochemicals industry 

traditional rule of thumb is that 

chemicals demand grows at 1.3 

to 1.4 times the rate of GDP. 

“Value added to oil and gas 

output needs to urgently improve 

by implementing diversification 

within the sector. This 

requires investments across the 

downstream sector to develop 

petrochemicals, fertilisers, 

methanol and refining, industries 

relevant in both industrial 

and consumer products, which 

Nigeria currently imports,” say 

analysts at PwC in a study urging 

Nigeria to look beyond oil. 

Petrochemicals will drive 

70 percent of the growth in 

demand for oil through 2035, 

according to McKinsey and Co. 

estimates. Nigeria’s increased 

petrochemicals production 

would also lead to increased 

demand for domestic gas. 

Producers often use gas as a 

raw material for ethylene and 

also to power their massive 

cracking furnaces and other 

equipment. 

Dangote Industries Limited 

is planning a 1,100km gas 

pipeline capable of evacuating 

3 billion standard cubic feet of 

gas, while Indorama’s facility 

expansion is adding 83km of 

gas pipelines. 

“In addition to the hundreds 

of thousands of Nigerians employed 

in the oil and gas sector, 

gas exploration and processing 

may very well lead to a revival 

of manufacturing in Nigeria. 

Natural gas will help Nigeria 

to develop clean alternative 

energy sources in various ways, 

including fertilizer for ethanol, 

methane for hydrogen and 

power generation,” Olufolu 

Wusu, an energy lawyer and cofounder 

of Megathos Law Practice, 

said of the expected value 

from increased domestic gas. 

Nigeria currently experiences 

severe shortage of gas 

to industries with operators 

complaining of non-freeing up 

of gas prices fixed at $7 per scf 

by the Ministry of Petroleum 

Resources. 

Before the completion of the 

1,100km gas pipeline, Dangote’s 

Fertilizer plant would first be 

powered by the Escravos-Lagos 

Pipeline System (ELPS), which 

starts at Escravos Gas Plant 

(EGP) operated by Chevron, 

and has 680 MMcf/d capacity 

to ease local supply to domestic 

market, according to those 

familiar with the matter. 

The EGP facilities currently 

deliver 215MMcf/d to the domestic 

gas market by Escravos– 

Lagos Pipeline. 

Nigeria’s bourgeoning petrochemical 

sector is attracting big 

players like DowDuPont Inc. Chemical 

Company, one of the world’s 

biggest petrochemical firms. 

The company estimates that 

the plastics industry in Nigeria is 

growing at 6 percent per annum. 

DowDuPont Inc. said last 

year that Nigeria was a key market 

for the packaging industry 

with almost 50 percent of the 

population living in urban areas 

and a new generation of 

consumers driving GDP growth.


C002D5556 

BUSINESS DAY 

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BUSINESS DAY 

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comment is free 

Send 800word comments to comment@businessdayonline.com 

KEMI ADEOSUN 

Kemi Adeosun is Nigeria’s Minister of 

Finance 

Since the middle of 2014, 

when the price of crude oil 

fell dramatically, Nigeria’s finances 

became challenged. 

This is not hard to explain: 

we’ve historically depended on crude 

oil for as much as 70 per cent of government 

revenues, and 90 per cent 

of foreign exchange earnings. The 

outcome – pressure on government’s 

finances – was by no means unusual. A 

similar fate befell most oil-rich countries 

around the world. 

Where Nigeria possibly stood out 

was in the fact that during the preceding 

three years when oil prices were 

in excess of 100 dollars per barrel, 

the Government did little in terms of 

saving and investing for the future. 

Our Sovereign Wealth Fund, which 

was established in October 2012with 

just US$1 billion, did not receive any 

further inflow during the oil price 

boom.Instead, billions of dollars were 

Positioning Nigeria for a prosperous future 

squandered through corrupt oil and 

defence contracts. It is a terrible thing 

for a country to fall on hard times without 

a savings buffer. There was nothing 

unexpected about our downturn. It 

was the inevitable result of the choices 

we made or didn’t make during the 

years of boom. 

What is remarkable, yet not as 

talked about, is the way we have 

worked so hard to exit the recession, 

reset the economy and reposition it 

for a brighter future for the present and 

future generations of Nigerians. The 

Administration of President Muhammadu 

Buhari is laying the foundation 

for the kind of economic growth that 

makes a real impact in the lives of 

citizens. 

The downturn has inspired unprecedented 

levels of fiscal responsibility, 

in line with President Buhari’s determination 

to fight Nigeria’s endemic 

corruption. 

Shortly after taking office, he issued 

a Presidential order mandating 

the immediate implementation of 

the Treasury Single Account (TSA) 

system, consolidating thousands of 

government accounts scattered across 

deposit money banks into a unified 

system that is transparent and easy to 

centrally monitor and track. Under the 

old system, it was common for government 

accounts to be converted into 

personal use, but under the TSA this 

is impossible. Also, the proliferation 

of accounts encouraged rent seeking 

A lot of the work we have 

done over the last two and 

half years has been focused 

on dismantling the old ways 

of doing things, rebuilding 

them, and empowering and 

fortifying our institutions with 

technology to block loopholes, 

discourage abuse, and prevent 

a relapse into the destructive 

ways of the past 

rather than questionable practices. 

Budgetary reform has also taken a 

lot of our time and attention. We are 

pioneering the use of software to prepare 

our annual budgets, which allows 

greater transparency and the ability to 

track changes. 

We have insisted on using biometric 

verification in the deployment of 

our Social Investment Programme, 

which includes a Job Scheme for unemployed 

graduates, a School Feeding 

Scheme for Primary School Pupils, a 

Conditional Cash Transfer scheme 

targeting a million of our poorest 

citizens, and a Micro-Credit scheme 

for artisans, farmers, and traders. In 

the past the Social Investment payments 

would have been done as cash 

handouts. 

A similar insistence on biometric 

verification for the federal payroll has 

C002D5556 

resulted in the detection of tens of 

thousands of bogus beneficiaries – or 

‘ghost workers’, as we often refer to 

them, in Nigeria – and savings running 

into billions of naira every month. 

We are pursuing unprecedented 

cooperation with foreign governments 

and powers, as part of our transparency 

and anti-corruption drive. For the 

simple reason that a disproportionate 

amount of public funds looted in Nigeria 

end up in the United Arab Emirates’, 

Nigeria has signed bilateral agreements 

with the UAE Government on 

extradition, exchange of information, 

and repatriation of stolen public funds. 

One strong demonstration of our 

political will has been a Whistleblowing 

Scheme we launched months 

ago that empowers citizens to report 

public corruption. The impact in terms 

of recoveries has exceeded our expectations. 

The tighter rein on public 

finances allowed us invest US$500m 

in our Sovereign Wealth Fund, during 

a recession. 

A lot of the work we have done 

over the last two and half years has 

been focused on dismantling the old 

ways of doing things, rebuilding them, 

and empowering and fortifying our 

institutions with technology to block 

loopholes, discourage abuse, and 

prevent a relapse into the destructive 

ways of the past. 

The new Nigeria we seek will not 

happen without this kind of foundational 

reform that imposes on us new 

BUSINESS DAY 

9 

COMMENT 

ways of thinking and of doing things. 

The early results are already being 

seen. A concerted focus on agriculture 

has seen our rice imports from Thailand 

dropping by 90 per cent between 

2015 and 2016, and replaced by locally 

grown variants. 

As oil has let us down, we have 

started to do what we should have done 

decades ago, invest in agriculture and 

mining. Throughout the recession, 

agriculture recorded healthy growth. 

As we emerge from the recession, its 

impact is certain to multiply and position 

Nigeria for a prosperous future. 

Let me point out that the most important 

elements of any reform effort 

tend to be the least flamboyant. We are 

confident that in the months and years 

ahead, Nigerians and the world will 

see the full impact of the foundational 

resetting that the Buhari administration 

has been focused on since 2015. 

There is of course a lot of resistance 

to reform, by vested interests within 

and outside the system. But we are 

not fazed. The work of reform goes 

on. It is, to borrow from the Nigerian 

novelist, Chinua Achebe, morning yet 

on Creation Day. Not very long from 

now, Nigerians and the world will look 

back on this recession we have just 

emerged from, and realise that it was 

the turning point in Nigeria’s journey 

to true growth and greatness. 

Send reactions to: 

comment@businessdayonline.com 

States’ fiscal cliff: will the Paris club refund make any difference? 

UCHE UWALEKE 

Uche Uwaleke, a Chartered Banker, 

Stockbroker and Fellow of ICAN, is 

an Associate Professor of Finance 

and Head of Banking & Finance 

department at Nasarawa State 

University Keffi 

Concerned about the failure 

of many State Governments 

to pay salaries of civil servants, 

President Muhammadu 

Buhari, according to media reports, 

has given his nod that the 

third tranche of what has become 

known as the ‘Paris Club Refund’ 

be released to State Governments. 

Although sub-national governments 

are entitled to these refunds 

as they arose from over-deductions 

from statutory allocations 

to the 36 states in respect of debt 

service obligations between 1995 

and 2005, the approval represents 

yet another intervention by the 

federal government to rescue 

many States currently experiencing 

severe financial crisis. 

It will be recalled that in the 

early days of the present administration, 

State Governors, under 

the aegis of the Governors’ forum, 

made a request for a bailout from 

the federal government to enable 

them clear arrears of several 

months’ salaries to their workers. 

Consequently, the federal government 

rolled out a relief package 

involving a special intervention 

fund packaged by the Central Bank 

of Nigeria that offered soft loans to 

the States, ranging from N250 billion 

to N300 billion as well as a debt 

relief programme designed by the 

Debt Management Office to enable 

state governments restructure their 

commercial loans which was put at 

over N660 billion at the time. The 

whole idea was to extend the duration 

of such loans, reduce their 

debt-servicing obligations and put 

States in a stronger position to at 

least pay salaries. 

The impact of this relief package 

was negligible or so it seemed. 

Following sustained pressure by 

the State Governors, the federal 

government in December 2016 

released to the States the first 

tranche of Paris Club refund to 

the tune of N516.38 billion on the 

understanding that a minimum 

of 50 per cent would be applied 

to offset outstanding salaries and 

pensions. Sadly, this also yielded 

very little results not least because 

many State Governors had other 

priorities. 

In May 2017, the federal government 

once again offered another 

relief package to the state governments 

to the effect that it would 

defer deductions from States’ 

Federation Account allocations 

on their restructured loans. This 

‘’deferral’’, which was a bailout 

by another name, amounted to a 

total of N10.9 billion. Barely two 

months after this package was announced 

and seven months after 

the first tranche of the Paris Club 

Refund was released to the States 

by the federal government, the 

former demanded and got in July 

2017 the second tranche amounting 

to N243.795 billion. Just like 

the previous rescue packages, the 

federal government had intended 

that the refund would enable the 

States meet their obligations to 

workers and so had advised state 

governments to use between 50 per 

cent and 75 per cent of their share 

of the refund to clear the arrears of 

salaries and pensions considering 

the fact that the non-payment of 

salaries had contributed to the economic 

recession. The huge backlog 

of salaries in several States despite 

the various financial support extended 

by the federal government 

speak volumes about the level of 

financial mismanagement in many 

states of the federation. 

Once again, State Governors 

are already salivating, anxiously 

expecting the third tranche of the 

Paris Club refund. Would the story 

be different this time around given 

the enormity of the financial challenges 

facing many States? This is 

doubtful. In its 2017 ‘State of States’ 

report released recently, BudgIT, a 

non-governmental organisation, 

disclosed that ‘only four states 

could meet their recurrent expenditure 

obligation without resorting 

to borrowing or tapping donor 

funds and other extra-budgetary 

revenue sources’. The report noted 

further that State governments are 

heavily indebted to commercial 

banks to the extent that ‘average 

growth rate of states’ debt between 

2012 and 2016 remains elevated 

at 22.16 per cent, while average 

growth rate of internally generated 

revenue is 9.04 per cent’. 

This narrative on financial 

mismanagement and misplaced 

priorities equally resonates in 

the failure of many States to take 

advantage of even sector-specific 

funding opportunities provided 

by the federal government. A 

clear example is the UBE grant 

designed to ensure compulsory, 

uninterrupted nine years of Primary 

and Junior Secondary School 

education throughout the country. 

Data from the Universal Basic 

Education Commission website 

indicate that unaccessed matching 

grant as at 31st March 2017 

totalled a whopping N59.744 billion. 

With the exception of Borno 

State, the remaining 35 states and 

the Federal Capital Territory were 

yet to fully access their UBE grants 

largely on account of inability to 

come up with matching funds as 

well as show evidence of proper 

utilization of the grants earlier 

disbursed. 

With the finances of many state 

governments dangling on a ‘steep 

rock face at the edge of the sea’, 

another Paris Club refund will only 

scratch the problem except it is 

accompanied by drastic measures 

aimed at improving States’ Internally 

Generated Revenue as well 

as enthroning transparency and 

accountability in the management 

of their finances. In the United 

States of America, the fiscal cliff 

challenge of 2013 was addressed 

through a combination of tax 

increases and across-the-board 

government spending cuts. The 

latter is particularly recommended 

for State governments in Nigeria. 

To this end, the States can 

undertake significant cut in their 

bloated overhead and personnel 

costs. This could be achieved 

through streamlining ministries 

departments and agencies, reducing 

the number of political 

appointees, eliminating payroll 

fraud, establishing an Efficiency 

Unit and publishing audited accounts. 

State Governors should 

resist the temptation of borrowing 

from commercial banks to 

execute projects. In this regard, it 

is heartening to note, following a 

recent disclosure by the chairman 

of the Nigerian Governors’ Forum 

Abdulaziz Yari of Zamfara State, 

that the 36 state governors were 

in talks with the Nigerian Stock 

Exchange on the issue of raising 

medium to long-term funds. With 

respect to borrowing, State Assemblies 

should ensure that state 

governments comply with Section 

42 of the Fiscal Responsibility Act 

2007 which provides for borrowing 

limits and that loans are linked to 

viable projects. It is by so doing that 

this last tranche of the Paris Club 

refund would have the desired impact 

and pull the finances of many 

state governments away from the 

fiscal cliff. 


comment@businessdayonline.com



C002D5556 

COMMENT 



Maina’s saga ends this phase of PMB’s anti-corruption agenda 

MAZI SAM OHUABUNWA OFR 

Ohuabunwa is chairman, African 

Centre for Business Development, 

Strategy 

Innovation (ACBDSI). 

It is a pity that two and half 

years into PMB’s 4-year term 

we have to bring this phase of 

PMB’s anti-corruption agenda 

to an end. This has become 

very necessary to save PMB and all 

those who wish Nigeria well from 

continued embarrassment. With the 

high drama of Maina’s reinstatement 

into the civil service, it is reasonable 

to conclude that we are not making 

much headway with fighting real 

corruption in Nigeria. 

Maina was accused of embezzling 

or stealing billions of pension 

funds which he was called to manage. 

EFCC investigated him and 

found that he had a case to answer. 

The Federal Government that he 

was working for, after investigating 

him, dismissed him from the civil 

service. The National Assembly invited 

him; he refused to show up. 

The EFCC invited him; he failed to 

show up but ran away to a foreign 

country to evade justice. Thereafter 

EFFC declared him wanted and he 

became a fugitive. 

Then PMB came to power on 

the steam of an anticorruption 

and change agenda. According 

to Maina’s family, PMB and APC 

invited Maina to join them to 

bring change to Nigeria. Then the 

wanted Maina was escorted back 

into Nigeria and then given security 

cover by the DSS according to his 

family as they revealed in a press 

conference carried on national 

television watched by the entire 

World. Thereafter the AGF steps in 

and directs the civil service commission 

and the Ministry of Interior 

to re-absorb Maina, with a copy to 

the office of the head of service of 

the federation. Minister of Interior 

welcomes Maina and promotes 

him, backdating his promotion to 

the date of his dismissal in 2013. 

What a tale! 

Then some people raised their 

voices and PMB ordered the sack 

of Maina for the second time and 

asked for a report to be sent to his 

office on how the man who was 

dismissed in 2013, declared wanted 

in 2015 by the EFCC, came back 

triumphantly and was re-absorbed 

and promoted. Shall we know the 

contents of the report? Perhaps 

after the contents of earlier investigations 

on the SGF and NIA DG 

have been released. Meanwhile, the 

same Maina who was occupying an 

office in the Ministry of Interior that 

houses the department of immigration, 

vanishes into thin air once 

It seems that the current 

promoters of the campaign 

see corruption as the 

stealing or misappropriation 

of public funds by the 

officials of the past government 

or the opposition 

party. This view has been 

substantiated over time as 

the government seems to 

gloss over the misdeeds of 

its own officials and 

party members 

again and no one could arrest him, 

nor know his current whereabouts! 

Then the EFFC wakes up from sleep 

and remembers that he had property 

in Maitama and goes to raid and seize 

the property, following with declaring 

him as wanted (a second time!) and requesting 

the help of Interpol. See how 

the government and its agencies are 

insulting the intelligence of Nigerians! 

I had previously stated in this 

column that this current anti-corruption 

war was not holistic and that 

it seemed as if we had a limited definition 

of the concept of corruption. 

It seems that the current promoters 

of the campaign see corruption as 

the stealing or misappropriation of 

public funds by the officials of the 

past government or the opposition 

party. This view has been substantiated 

over time as the government 

seems to gloss over the misdeeds of 

its own officials and party members. 

In addition, the war seems to ignore 

the common everyday corruption 

that goes on in government ministries 

and agencies. I am completely 

downcast that after the allegations 

that the GMD of NNPC did not adopt 

good corporate governance procedures 

in his official transactions, the 

government has said nothing, except 

prompting the accused to continue 

to campaign that he did nothing 

wrong. Whoever admits wrong doing 

in the Public service? Even the 

accusations that the NNPC board 

and management appointments 

were lopsided and did not reflect 

federal character has been entirely 

ignored because it does not relate to 

corruption? The ongoing accusation 

of corruption and several unethical 

misdeeds against the IGP by Senator 

Misau and others has been allowed 

to fester in a regime that all thought 

had come to kill corruption. 

This is why I think that we need 

to bring this misguided notion of an 

anti-corruption war to an end. Then 

we must start a new phase that will 

be comprehensive and holistic. A 

new war that will fight every corruptive 

tendency in every strand of 

our public and private lives. This 

phase must start with an attempt to 

define what corruption really means 

and to identify its ramifications and 

manifestations. Then we take away 

politics from this fight. Every act of 

corruption must be treated with 

maximum reprehension without 

regard to political, religious or ethnic 

affiliations. In this new phase, 

we must show maximum revulsion 

against the least act of corruption. 

Government must never come out 

to defend its officials. Every indicted 

official must be suspended and put 

through investigation and or trial 

by the appropriate law enforcement 

agency. Also, government officials 

should no longer be asked to investigate 

infringements by fellow 

officials. Lack of bias cannot be 

guaranteed in these circumstances. 

The Police, the EFCC, ICPC and the 

DSS are the appropriate agencies 

that should investigate all acts of 

corruption and public malfeasance. 

Let me state that I am making 

these suggestions in good faith. 

First, I firmly believe that corruption 

is Nigeria’s biggest problem, given 

my broad understanding of what 

corruption means and the unquantifiable 

damage it had caused and is 

still causing in the country. Second, 

I fully agree with PMB that if we do 

not kill corruption, corruption will 

kill Nigeria. And thirdly, so much 

faith has been invested on PMB by 

Nigerians and even the global community 

that he has the moral integrity 

to fight this battle successfully. 

But thus far, many are beginning to 

lose hope. 


comment@businessdayonline. 

STRATEGY & POLICY 

Can a leopard ever change its spot? 

MA JOHNSON 

Johnson is a marine project management 

consultant and Chartered Engineer. He is 

a Fellow of the Institute of Marine Engineering, 

Science and Technology, UK. 

Sometime ago, I came 

across a report by some 

researchers who argued 

that a leopard 

can change its spot. But their 

report was not convincing because 

of some high sounding 

medical jargons used to justify 

their findings. So, I humbly say 

that the answer to the above 

question is a resounding NO. 

The leopard cannot change 

itself and it is not blessed 

with the capacity to change 

its spots. When one says that 

a leopard does not change its 

spots, it literarily means that 

the character traits of some 

individuals do not change no 

matter the condition they find 

themselves. 

Specifically, bad character 

traits do not change easily. 

This essay is on the current 

Maina debacle. A few reports 

on the Maina saga reminds me 

of one of my respected senior 

professional colleague and a 

friend, who always stressed 

the importance of courage: 

“When in doubt” he would 

say, “do what is right”. 

I have come across decent 

people in our society and 

beyond the shores of our 

country, but I have not come 

across an angel. In the real 

world there are people who 

can help you make it and then 

there are those who make life 

miserable without you ever 

knowing. How can a Maina 

who was dismissed in 2013 

by the federal civil service 

for absconding his duty post 

now become a director in the 

Ministry of Interior? So, who 

smuggled Mainaback into the 

country, and on what basis 

was he promoted to grade 

level 17?Who are his Janusfaces 

in this matter? 

I heard this particular 

Maina is aspiring to be the 

governor of Borno State, but 

I argued strongly that this 

tale cannot be true. If it was 

true, then the people of the 

State will not sing doxology. 

I guessed he must have conducted 

a research and found 

out that corruption allegation 

levelled against him cannot 

stop his ambition. In fact, 

corruption allegation against 

him is helpful to enable him 

achieve his political ambition 

in a country where uprightness 

is rarely celebrated. 

The more crooked you are 

the better in a society that 

favours those who are morally 

bankrupt. 

For those who have perfected 

the act of compromising their 

integrity and principles on 

minor issues, it gets easier to 

make bad choices on the big 

issues. Every day you get to 

read or hear stories about how 

organizations and individuals 

fail to do what is morally or 

legally right- political scandals- 

“how top officials in the 

federal government (FG) of 

President Muhammadu Buhari 

played prominent roles in the 

reinstatement of Abdulrasheed 

Maina, ex-chairman of the 

Pension Reform Task Team, 

into the civil service”. What 

do we say about government 

functionaries who abuse their 

authority and trust reposed on 

them by the people of Nigeria? 

This particular Maina and some 

highly placed people in the government 

must have concluded 

long ago that President Buhari 

is alone in the anti-corruption 

struggle. Without credible and 

truthful allies, he might be 

forced to either now or later 

give up the fight against corruption. 

The effort made by Buhari’s 

allies to reinstate Maina 

and grant him with a brand new 

identity may be a preamble to 

the grand surrender of the Buhari 

administration to the 1000- 

ton monster called corruption. 

In both the military and 

the civilian world, it becomes 

challenging to blow the whistle 

when the bad behaviour you 

observed is directly coming 

from your boss. Where will you 

get the courage to expose your 

boss who is busy using his office 

and status in the society to 

perpetrate fraud? Summoning 

the courage to fight for what 

is right may be difficult if you 

are to protect your job in a nation 

where unemployment is 

rising alarmingly. Courage is 

“doing the right thing for the 

right reason.” 

Humanity is in trouble when 

we lack leaders with the courage 

to do the right thing for 

the right reason. I smell a 

conspiracy against pensioners 

nationally. Nobody had 

the guts to ask this particular 

Maina to provide the money he 

fraudulently mismanaged. The 

“change” song that the current 

regime of President Buhari has 

taught Nigerians to sing will 

not solve the problem of corruption 

in our polity. For this 

singular act, I say with a lot 

of regrets that Nigerians have 

not been treated with dignity 

and respect by those who conspired 

to elevate a man who 

was accused of squandering 

pensioners’ money. 

Most pensioners are disturbed 

by this Maina’s saga. 

If appropriate sanctions are 

not meted out to this culprit, 

a time will come when no pensioner 

will receive pension. 

Why is it that the Minister of 

Interior did not have the courage 

as a military veteran to do 

what is right by exposing this 

Maina? This is what politics 

can do to a general especially 

when “blood is thicker than 

water”. The Minister of Interior 

only reacted when his principal 

ordered the immediate disengagement 

of this particular 

Maina from the office. 

The Head of Civil Service 

Commission denied knowing 

anything about this particular 

Maina. It is only in Nigeria 

that a fugitive can be elevated 

to the post of a director in 

a federal ministry. Just like 

that, a runaway civil servant 

emerged to become a director 

in Nigeria and was warming 

up to be a governor when 

those who come to work regularly 

are marking time on one 

appointment/rank for years 

without promotion. This is an 

embarrassment to the nation. 

Nigeria, I hail you! 

Nigerians can now see clearly 

what our so-called leaders 

are doing to us. We trusted 

them and handed over Nigeria 

to them to help us manage her. 

What we got in return is corruption- 

nepotism, inequity, 

plus injustice amongst others. 

There is something about this 

particular Maina that needs to 

be further investigated. Albeit, 

it is not easy for the leopard to 

change its spots! 




COMMENT 

RAFIQ RAJI 

Dr Raji is chief economist at Macroafricaintel. 

He was previously an 

Africa economist at Standard Chartered 

Bank, London, UK. (Twitter: @ 

DrRafiqRaji) 

Global trade, the merchandise 

exports component of 

which was about US$15.5 

trillion in 2016, according to 

World Trade Organisation 

(WTO) data, is expected to shrink by at 

least half over the next half century due 

to 3D printing or additive manufacturing 

(AM). In tandem would be global value 

chains (GVCs), which were hoped togive 

African countries perhaps their last fighting 

chanceat industrialisation. At US$346 

billion in 2016, African merchandise 

exports were just 2% of the world total. 

And 32% of these were oil exports. 

Still, African manufacturing has actually 

been on the ascendancy, growing 

in real terms by 3.5% a year to US$157 

billion in 2014,up from US$73 billion in 

2005, with exports doubling to more than 

US$100 billion in the period. 

But what is additive manufacturing? 

Simply put, as the name implies: it is 

manufacturing by adding. Unlike the 

conventional manufacturing process, 

where an object having been designed 

is put into form by “cutting, drilling, and 

milling”, “a 3D-printer starts with nothing 

and add stuffs to it”. With the aid of a 

computer programme, a 3D-printer is 

able to produce a 3-dimensional physical 

form of what was hitherto no more 

than a virtual representation. However, 

relative to traditional manufacturing, the 

additive kind is slow and expensive. In 

addition, the quality of produced objects 

SALIENT 

WEYINMI JEMIDE 

Jemide is a certified master coach and 

currently a doctoral candidate in applied 

leadership and coaching. He writes every 

Tuesday in BusinessDay 

Diversity and independence 

are important because 

the best collective 

decisions are the product 

of disagreement and contest, not 

consensus and compromise” – 

James Surowiecki in “The Wisdom 

of Crowds”. 

Diversity is a recurring theme in 

many large corporate organisations. 

However, it remains largely unappreciated 

relative to other social 

concepts. This article highlights four 

perspectives of diversity. 

Reality 

Diversity is a reality of nature, 

business and life. When companies 

are seeking to employ people, they 

cannot successfully identify homogenous 

groups to bring on board. The 

reality of human nature guarantees 

that companies and institutions will 

be diverse. Unfolding developments 

C002D5556 



Additive manufacturing: Implications for African economies 

can sometimes be doubtful. But it is fast 

evolving to overcome these constraints. 

Bespoke specialist products or prototypes 

are better suited, therefore. For 

now. Incidentally, there are indications 

that improvements could come about 

faster than expected. Take polymerbased 

manufacturing, for instance: digital 

light synthesis pioneered by Carbon, 

an American producer of 3D-printers, 

allows for a process 100 times faster 

than conventional printing. And objects 

produced are of far greater quality and 

strength. For metal printing, better methods 

are beginning to emerge as well. An 

example is “bound-metal deposition”, 

which produces objects 500 times faster 

than traditional laser-based ones. Thus, 

the ascendancy of additive manufacturing 

to mainstream production is only a 

matter of time. 

Manufacturing more and better 

with less 

On the face of it, the economics of 

additive manufacturing is very appealing, 

bar the earlier highlighted, but fast 

disappearing constraints. Altering objects 

or producing new ones simply require a 

change of software, for example. Under 

traditional manufacturing, this would 

entail the procurement of new equipment, 

re-training of staff, modifications to 

value chain activities and so on. Improvements 

would evolve at different paces for 

each type of printing, though. For certain 

kinds, complex and high-end objects like 

aircraft parts, satellites, racing cars and 

medical devices, speed is not what really 

matters. Greater emphasis is placed on 

quality and precision. 

For such, a relatively slower and 

more expensive additive manufacturing 

process entail costs that pale in comparison 

to the potential gains. And since the 

end-users tend to have the deep pockets 

and patience for that level of precision 

and quality, 3D-printing is already fast 

gaining ground for that manufacturing 

segment. There is evidence of this. 

American industrial giant, General 

Electric, is investing a great deal in 3Dprinting, 

to produce parts for jet engines, 

for instance. This is also the case for less 

China’s evolution is a typical 

example with its manufacturing 

jobs moving to other Asian 

countries (and expectedly 

African ones in due course), 

not only because wages have 

risen, but also due to a focus 

now on services 

space consuming, but equally (if not more 

so) complex bio-printing, which involves 

smaller laboratory-type equipment, but 

require greater care to maintain the sterility 

and salubrity of produced tissues. These 

could range from cartilage to more complex 

organs like hearts, livers and so on. 

With automation and 3D-printing, 

high-wage developed economies may no 

longer be in much need for manufacturers, 

whether as intermediates or finished 

goods, from African and other low-wage 

countries. Short of raw material constraints, 

any country would in the not-to-far distant 

futurebe able to virtually manufacture any 

good using a 3D-printer. And if advances 

in 3D-printing proceed as currently envisaged, 

it would be possible to do so at about 

or more than the current speed of traditional 

manufacturing processes. When 

that is the case, in about four decades from 

now, at least according to recent research 

by ING, a Dutch bank, there might not be 

that much need for labour-intensive manufacturing, 

the type African countries need to 

keep their teeming idle youth populations 

constructively engaged. 

ING’s report suggests about a quarter 

of world trade could be wiped out by 2060 

on the back of advances in 3D-printing, especially 

in car manufacturing. Incidentally, 

this was the type of manufacturing that African 

countries were banking on and have 

actually been recording some progress 

with. A Chinese-backed car assembly plant 

in South Africa is expected to start exporting 

cars in early 2018, for instance. As the 

first new car plant in South Africa in at least 

forty years, it represents an expected trend 

of that kind of manufacturing moving to 

relatively lower wage economies from an 

increasingly pricey Chinese labour market; 

even though the South African labour 

market is amongst the most expensive 

and disruptive on the African continent. 

The move probably anticipates the 

earlier highlighted game-changing automation 

trends: most of the cars are to 

be sold in neighbouring countries, which 

makes sense. It would be cheaper to 

ship the cars across the border by road 

and rail, within a region governed by a 

single tariff regime, that is also relatively 

borderless, than to ship them all the way 

from China. Incidentally, the Chinese car 

manufacturer is following in the footsteps 

of more experienced and advanced 

competitors like Germany’s Volkswagen 

and BMW, Japan’s Toyota and America’s 

Ford. The Chinese move also pre-empts 

announced plans by authorities to phase 

out of fossil fuel cars in France and the 

United Kingdom (and likely elsewhere 

in Europe) from 2040, and indeed China 

itself, in what its authorities termed the 

near future. 

Of course, there are arguments that 

suggest this likely shrinkage in low-skilled 

labour-intensive manufacturing and its 

associated value chains may be grossly 

exaggerated, especially for developing 

countries. This is because there are still 

certain types of manufacturing that robots 

are not yet skilled at, or if nearly so, they are 

not cost effective. For example, the textile 

industry entails certain complications 

that advances in robotics are yet to master. 

But that is not to say that even in that 

sphere of manufacturing, robots are not 

increasingly taking the place of humans. 

They are. According to a recent report by 

The Economist in the UK, one American 

robotics firm, SoftWear Automation, produces 

machines that do what seamstresses 

do in textile factories – not everything 

yet, though – so-called “Sewbots”, which 

can already make pillows and bath mats, 

but would by 2018, if all goes according 

to plan, be able to produce 1,142 T-shirts 

per eight-hour shift. This is almost twenty 

times the output of a human involved in 

a similar task. 

BUSINESS DAY 

11 

And in the time horizon that recent 

research suggests 3D-printing would 

become fast and sharp enough to beat current 

traditional manufacturing processes, 

automation would well have become far 

more advanced. These advances are also 

somewhat egalitarian; China is a dominant 

buyer of industrial robots. Besides, a 

third of industrial robots that were shipped 

in 2015 were destined for middle-income 

countries; albeit the earlier mentioned 

Sewbots have only been sold in the USA. 

In fact, such are these advances now, 

the mystery behind current perennially 

tepid inflation in developed economies is 

beginning to be attributed to these developments. 

Even more groundbreaking, the 

orthodoxy of how countries are meant to 

develop is increasingly being challenged; 

which suggests that economies first make 

the transition to industry from agrarian 

agriculture before moving on to services. 

China’s evolution is a typical example 

with its manufacturing jobs moving to 

other Asian countries (and expectedly 

African ones in due course), not only because 

wages have risen, but also due to 

a focus now on services. With advances 

in robotics triggering so-called “premature 

de-industrialisation” in developing 

countries, as manufacturing jobs move 

back to advanced economies (which 

increasingly compare favourably costwise 

due to automation) from cheaper 

labour jurisdictions, suggestions about 

leapfrogging the industrial development 

phase straight into services is beginning to 

gain resonance. Clearly, current industrial 

policy and thinking in many African countries 

would have to be rethought in light of 

these developments. 

•Dr Rafiq Raji wrote this article for the 

NTU-SBF Centre for African Studies of 

the Nanyang Business School, Singapore, 

where he is an adjunct researcher 

Note: the rest of this article continues 

in the online edition of Business Day @ 

https://businessdayonline.com/ 


comment@businessdayonline.com 

Exploring diversity: Introductory perspectives 

across the globe are adding new realities 

such as gender and sexuality 

to the concept of diversity. 

Anthropological research consistently 

demonstrates that human 

classifications of the world hardly 

match environmental realities. 

Homogeneity factors such as genealogies 

and nationalities which 

people focus on bear overlaps and 

invisible cracks. Employers have to 

deal with these realities to various 

extents depending on where they 

are located. The realities have to be 

accepted and productively applied. 

Humanity 

Humanity and diversity operate 

with a neat hand in glove arrangement. 

People, nations, tribes, languages, 

personalities and abilities 

all guide the functioning of man 

on earth. Diversity is expressed in 

the uniqueness of each individual 

through DNA, genetics and biometrics 

all of which prove the diversity 

of humanity. Before DNA tests were 

invented, criminal investigations 

and paternity disputes were more 

difficult to resolve. The diversity of 

DNA put a stop to that. 

There are more than 6,900 living 

languages all over the world – further 

evidence of human diversity. Nations 

like Nigeria and Russia have hundreds 

of tribes. Global population is estimated 

to reach 9 billion by 2040. Although 

birth rates are decreasing in some 

countries, others are exceeding expectations 

and do not apply deliberate birth 

control measures. Diversity is increasing 

as human numbers are growing. 

Individuals and organisations 

should acknowledge diversity as a 

component of humanity. 

Practicality 

Diversity is not just a reality. It also 

has practical benefits for mankind. 

The diversity of skills, abilities, climates, 

vegetation and resources not 

only enables international trade and 

tourism, it fuels global competition 

and innovation.Companies can look 

for different types of skilled employees 

to fill their vacancies and perform 

functions. Education would be of less 

value without its diversity of subjects 

and teachers. Homogeneity has its 

advantages but teams are known to 

operate more successfully by bringing 

on diversity. 

Insights from Simon Hartley’s 

“Stronger Together” suggest that in 

spite of distinct and diverse roles, 

strong teams possess total appreciation 

of each individual. They also 

draw strength from their differences. 

Within organisations, a basic rule of 

controls is separation of duties. This 

can only be achieved by having individuals 

with different skill sets and 

competencies. 

As the opening quote of this article 

indicates the best collective decisions 

are sharpened by disagreement and 

contest. James Surowiecki avers that 

intelligent groups do not ask members 

to modify their positions to let 

the group reach a decision everyone 

can be happy with. Instead, they 

apply mechanisms to gather collective 

judgements representing what 

they all think. Bill Conaty and Ram 

Charan in “The Talent Masters” prescribe 

one of the principles of building 

talent as meritocracy through 

differentiation. In this regard, they 

provide a slogan: “Differentiation 

breeds meritocracy; sameness (the 

failure to differentiate people) breeds 

mediocrity.” The direct implication 

of this slogan is that diversity breeds 

meritocracy. 

Diversity bears practical value 

which we should productively utilise. 

Profit and Loss 

Now we come to the leading 

question for every profit and even 

non-profit organisation. What is the 

bottom line outcome of diversity? 

Let us derive answers from research 

results. Research by McKinsey has 

shown that diverse workforces have 

higher rates of productivity, retention, 

collaboration and commitment. 

Deloitte identified an 80% improvement 

in business performance 

with high levels of diversity and 

inclusion. A global study by The Peterson 

Institute discovered that 30% 

female representation on boards can 

increase net profits by 6%. 

We can also take a cue from modern 

business models with embedded 

diversity. Consider Uber, a taxi company 

with no taxis but many cars and 

drivers. Airbnb, an accommodation 

provider that owns no real estate but is 

not short of spaces. Facebook, a media 

business that creates no content but 

has billions of content developers. 

Netflix, the world’s largest movie 

house which does not own cinemas. 

Business history especially in 

financial services directs us to the 

impact of weak diversity in decision 

making. The Barings Bank collapse 

was partly attributable to the absence 

of diversity in trading decisions as one 

man controlled everything. Bureaucratic 

silos within large banks contributed 

to the 2008 global financial 

crisis. BP lack of connective diversity 

prevented valuable messages from 

being passed across to prevent a 

massive oil spill. The CIA and other 

intelligence services did not apply 

collaborative diversity which could 

have foreseen the threat of al Qaeda 

in 2001. The list is longer but space 

will not permit the many failures in 

applying diversity that led to losses. 

Diversity improves profitability 

and prevents losses. Get on board 

with it! 



12 BUSINESS DAY C002D5556 Tuesday 31 October 2017 

EDITORIAL 

PUBLISHER/CEO 

Frank Aigbogun 

Health sector in need of rescue 

EDITOR-IN-CHIEF 

Prof. Onwuchekwa Jemie 

EDITOR 

Anthony Osae-Brown 

DEPUTY EDITOR 

John Osadolor, Abuja 

NEWS EDITOR 

Ptrick Atuanya 

EXECUTIVE DIRECTOR, 

SALES AND MARKETING 

Kola Garuba 

EXECUTIVE DIRECTOR, OPERATIONS 

Fabian Akagha 

EXECUTIVE DIRECTOR, DIGITAL SERVICES 

Oghenevwoke Ighure 

ADVERT MANAGER 

Adeola Ajewole 

MANAGER, SYSTEMS & CONTROL 

Emeka Ifeanyi 

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 

HEAD, HUMAN RESOURCES 

Adeola Obisesan 

It is no longer news that the Nigerian 

health sector is in dire 

straits. Available data show 

that the country has one of 

the worst health records in 

the world. A 2014 World Health Organisation 

(WHO) report on healthcare 

delivery, which surveyed 200 

countries, placed Nigeria at an 

abysmal 197th position, just ahead 

of Congo Democratic Republic, 

Central African Republic (CAR) and 

Myanmar. Its verdict was damning: 

“Nigeria lacks a serious approach to 

healthcare.” 

This is obvious from the country’s 

budgetary allocation to healthcare. 

According to the WHO, for 

countries to effectively fund the 

health sector, they need to allocate 

not less than 13 percent of their annual 

budget to the sector. Nigeria, 

one of the 194 member nations of 

the WHO, is a signatory to this recommendation, 

just as it also signed the 

2001 Abuja Declaration by all African 

Union member countries which 

stipulates a budgetary allocation of 

15 percent to the health sector to be 

able to catch-up with other developed 

countries in healthcare delivery to 

their citizens. 

Available figures from BudgIT, 

a Lagos-based civic tech organisation, 

however, show that the health 

sector got an allocation of a total of 

N278,819,999,790 in the 2013 federal 

budget, representing 6.57 percent 

of the budget. In 2014, the figure 

dropped to N264,461,210,950 (or 4.50 

percent of total budget). The sector got 

N259,751,742,847 (3.82 percent of total 

budget) in 2015 and in 2016, a total of 

N250,062,891,075 (3.82 percent of total 

budget). In 2017, it got N304, 109,961,401 

(4.17 percent). Pathetically, the country 

spends N1700 per annum on average on 

the health of its citizens. 

There is even the reality that the 

budget to the health sector is rapidly 

declining. Although the 2017 figure 

appears higher than the 2016 figure in 

naira value, in reality, 2016’s was higher 

considering the exchange value of the 

Naira to the dollar (the health services 

sector in Nigeria is largely import dependant). 

In 2016 the CBN pegged the 

exchange rate at N197 to the dollar while 

in 2017, the exchange rate is pegged at 

a conservative N305 to the dollar and 

N360 at the interbank rate. 

The consequence has been catastrophic 

as expected. Primary 

healthcare in Nigeria, which ought 

to be the first port of call for every citizen 

seeking medical care, are either 

ineffective or moribund thus pilling 

pressure on the tertiary healthcare 

facilities that are also grossly inadequate. 

Nigeria is the second-largest 

contributor to under-five and maternal 

mortality rate in the world. A 

recent UNICEF report indicates that 

145 women die daily during childbirth 

in the country. In the country’s 

worst affected areas, 1 in 13 women 

die during childbirth. Nigeria also 

loses about 2,300 under-five year 

olds every single day, 25 percent of 

whom are new-born babies. More 

worrisome is the fact that more than 

70 percent of the estimated underfive 

deaths in Nigeria are caused by 

preventable or treatable infectious 

diseases such as malaria, pneumonia, 

diarrhea, measles and HIV\AIDS 

Similarly, the figures for cancer 

are even more mind-boggling. Nigeria 

has a cancer death ration of 4 in 5, 

one of the worst in the world. According 

to the WHO, over 100, 000 people 

are diagnosed with cancer annually 

in Nigeria, and about 80, 000 die from 

the disease, amounting to 240 daily. 

Furthermore, cervical cancer, which 

is virtually 100 percent preventable, 

kills one Nigerian woman every hour 

while breast cancer kills 40 Nigerian 

women daily. 

The collapse of the Nigerian 

health sector is almost total as both 

government officials, no matter how 

patriotic they claim to be, fly abroad 

for every minor health problem and 

health workers also jostle to leave 

for greener pastures abroad where 

they could earn decent wages. For 

instance, Nigeria losses over $2.5 billion 

annually to what has now being 

termed “medical tourism”. 

The collapse of health infrastructure 

isn’t limited to the ordinary 

citizens alone. Even in Aso Rock, 

where the clinic reportedly receives 

a budgetary allocation of N4 billion 

naira, the President’s wife and 

daughter recently alleges that the 

clinic couldn’t even boast of common 

syringe or paracetamol. For Mrs 

Buhari, even though the clinic was 

supposed to cater for the immediate 

health needs of the first family, 

ministers and presidential aides, her 

aides advised her not to use the facility 

because it wasn’t functional and 

they advised her to seek medical 

treatment abroad for any medical 

complaints. 

Another repercussion of the poor 

funding of the health sector is in the 

area of training of doctors and other 

health workers. According to key 

insiders in the sector, beyond the attitude 

problem of our health workers 

is the issue of incompetence due to 

the poor quality of training received 

by doctors in residency training 

and even medical students in the 

universities. These insiders allege 

that the current mode of training is 

so deficient it throws out half-baked 

and incompetent. 

Was it any wonder therefore that 

Prof Thomas Agan, Chief Medical 

Director (CMD), University of 

Calabar Teaching Hospital (UCTH) 

and Chairman, Committee of Chief 

Medical Directors of Federal Tertiary 

Hospitals in Nigeria alleges that over 

90 percent of deaths in our hospitals 

are due to poor attitude of health 

workers? 

We feel one practical way to improve 

the health sector is to ban 

foreign medical treatments for all 

government officials beginning with 

the president. Then, they will have no 

option than to take the issue of healthcare 

seriously. 

EDITORIAL ADVISORY BOARD 

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Imo Itsueli 

Mohammed Hayatudeen 

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Funke Osibodu 

Afolabi Oladele 

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Sim Shagaya 

Mezuo Nwuneli 

Emeka Emuwa 

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Tuesday 31 October 2017 C002D5556 BUSINESS DAY 13 

COMPANIES 

& MARKETS 

Company news analysis and insight 

Agriculture, airlines, 

petroleum, gets 

CBN $285.7m forex 

injection 

P 14 

Four of the five biggest 

oil majors have 

reported a huge increase 

in earning, the 

clearest indication 

yet that the world is turning the 

corner from bearish oil prices. 

All four companies benefited 

from a stronger market; 

Brent crude, for example, averaged 

about an extra $5 a barrel 

in the third quarter compared 

with a year before. 

American oil giants, Exxon 

Mobil Corporation announced 

estimated third quarter 2017 

earnings of $4 billion, compared 

with $2.7 billion a year 

earlier, as commodity prices 

improved and performance in 

the upstream and downstream 

strengthened. 

Italian oil giant, Eni which 

is about one-third governmentowned, 

returned to profit in the 

same period posting earnings of 

$400 million, compared with a 

loss of 562 million euros a year 

earlier. 

Chevron, American multinational 

oil company similarly, 

reported net earnings of $2billion, 

compared with $1.3billion 

reported in the same period 

in 2016. 

French oil and gas major Total, 

reported a 29 percent jump 

in third-quarter net adjusted 

profit for the quarter hitting 

$2.7 billion, as ramp-ups and 

new projects lifted production. 

High demand for petroleum 

Oil majors profit growth in Q3 

points to sector recovery 

ISAAC ANYAOGU 

products, the company said 

also led to a sharp increase in 

its refining margin. 

“A 50 percent increase in 

earnings through solid business 

performance and higher commodity 

prices is a step forward 

in our plan to grow profitability,” 

said Darren Woods, chairman 

and chief executive officer of 

ExxonMobil. 

ExxonMobil’s upstream 

earnings rose to $1.6 billion as 

oil prices hovered around $50 

from about $40 in the same 

period last year. 

Analysts had expected 

poorer margins in the downstream 

as Hurricane Harvey 

was forecasted to knock out 

over 15 percent of US refining 

capacity which translates to 

about 2.45 million barrels per 

day which shut in after Tropical 

Storm Harvey flooded 

plants and shut seaports in 

Houston, the capital of US oil 

production. 

But margins held. Exxon- 

Mobil’s downstream results 

increased to $1.5 billion buffered 

by $380 million Canadian 

retail assets sale. Total said 

its European refining margin 

indicator rose sharply to $48.2 

per tonne in the third quarter 

of 2017 compared with $41.4 

in the third quarter of 2016 

thanks to strong demand for 

products after last month’s 

hurricane Harvey led to numerous 

shutdowns of refining 

capacity. 

“The downstream benefited 

from favorable refining margins 

and increased its results by 

18 percent compared to the 

second quarter, despite the 

impact of Hurricane Harvey on 

American operations,” said chief 

executive Patrick Pouyanne in a 

statement. 

A positive result bodes well 

for projects in the sector. “We 

believe that most major subsea 

projects can move forward at 

today’s oil prices, said Doug 

Pferdehirt Technip FMC’s CEO 

involved in subsea contracts for 

major oil companies. 

In its Q3 presentation, 

the firm lists major projects 

it expects to see awards for 

going forward. These include 

expected contracts on $1 

billion+ projects including 

Shell’s Bonga Southwest 

and Eni’s ZabaZaba, both off 

Nigeria, west Africa, ONGC’s 

KGD5 98/2, off India, and 

Anadarko’s Golfinho LNG 

project, offshore Mozambique. 

Common among all 

these large projects are that 

they’re in deep water areas 

Both Exxon Mobil and 

Chevron have made a lot of 

progress in covering investment 

and dividends, restoring 

positive free cash flow. Analysts 

say Exxon Mobil Year-to-dates 

spending of about $11 billion 

are running well below expectations. 

Brent for December settlement 

jumped $1.14 to end the 

session at $60.44 a barrel on 

the London-based ICE Futures 

Europe exchange. Prices are 

up 4.7 percent last week. The 

global benchmark traded at a 

premium of $6.54 to West Texas 

Intermediate. 

Royal Exchange maximize opportunities as earnings spike 

...Net income rises 23.15 percent in Q3 

BALA AUGIE 

Royal Exchange Plc, 

Nigeria’s foremost 

financial services 

group, having maximized 

available growth opportunities, 

including investment 

and underwriting, recorded 

a double digit growth 

in earnings. 

The Nigerian insurer’s 

efficient underwriting capacity, 

favorable working 

capital position, and robust 

capital base is a buffer 

against headwinds. 

For the first nine months 

through September 2017, 

Royal Exchange Insurance’s 

net income increased by 23.48 

percent to N240.36 million 

from N194.06 million the 

previous year. 

The growth in profit was 

supported by a 286.40 percent 

surge in investment and other 

income to N1.14 billion in the 

period under review. 

Royal Exchange diversified 

revenue base has paid off as 

gross premium written (GPW) 

was up 5.08 percent to N11.38 

billion while gross premium 

income (GPI) increased by 

10.35 percent to N10.36 billion 

as at September 2017. 

The Nigerian insurer is 

efficient amid a tough and unpredictable 

macroeconomic 

environment as evidenced in 

a favorable combined ratio 

(CR). 

CR in the period under 

review stood at 85.50 percent, 

though higher than the 73.65 

percent recorded last year, 

is less than the 100 percent 

threshold. 

The increase in CR is 

due to high claims and underwriting 

expenses as a 

percent of premium income 

as the Nigerian insurer continues 

to honor obligations 

to policy holders. 

Total net claims increased 

to 48.28 percent in September 

2017 from 40.97 percent the 

previous year; this means the 

company pays more claims to 

policy holders out of revenue 

it generate. 

Total net claims incurred 

in the period under review 

stood at N2.74 billion, representing 

a 9 percent increase 

from the N2.52 billion incurred 

last year. 

Underwriting expenses 

moved to 36.79 percent in the 

period under review as against 

32.49 percent the previous 

year. Underwriting expenses 

increased by 4.50 percent to 

N2.09 billion. 

Royal Exchange’s underwriting 

profit of N1.43 billion 

could increase as the company 

got National Insurance 

Commission (NAICOM)’s nod 

to underwrite Agricultural 

business. 

Experts say the latest development 

will unlock new 

growth potentials that will 

increase consumer value and 

better returns on investment 

to the insurers teeming shareholders. 

Royal Exchange Plc is engaged 

in providing life, healthcare 

and general insurance, 

financing, asset management, 

trusteeship and micro finance 

banking services. The company’s 

segments include nonlife 

insurance, life insurance, 

financial services, healthcare 

and asset management. 

In recognition of the efforts 

being undertaken to reposition 

the company, Royal Exchange 

Plc recently won two 

awards from BusinessToday 

Online as the 2016 Insurance 

Company of the Year while the 

Group Managing Director, Alhaji 

Auwalu Muktari was also 

adjudged the 2016 Insurance 

Man of the Year.

14 

BUSINESS DAY 

COMPANIES & MARKETS 

C002D5556 


Agriculture, airlines, petroleum, 

gets CBN $285.7m forex injection 

HOPE MOSES-ASHIKE 

Agricultural, airlines, 

petroleum and raw 

materials on Friday 

received the sums of 

$285.7 million forex 

allocation from the Central 

Bank of Nigeria (CBN) based 

on requests put forward by their 

respective banks. 

The CBN on Friday, October 

27, 2017, injected a total of 

$285,759,449.10 into the Inter- 

Bank Foreign Exchange Market 

to meet requests in these four 

sectors of the economy. 

Isaac Okorafor, acting director, 

corporate communications 

department, CBN confirmed 

the figures and said the releases 

underlined the high levels of 

transparency of the Bank in 

Foreign Exchange Management. 

According to him, the CBN 

would continue to play its role 

in easing the foreign exchange 

pressure on manufacturing 

and agricultural sectors through 

sales under the new flexible 

Foreign Exchange regime. 

It will be recalled that the 

Central Bank of Nigeria has 

consistently injected funds into 

in the interbank foreign exchange 

market to ensure liquidity, 

thereby easing pressure on 

the local tender currency. 

Meanwhile, the naira continued 

to maintain its stability in 

the FOREX market, exchanging 

at an average of N360/$1 in the 

BDC segment of the market on 

Friday, 27, and 2017. 

Last week the local currency 

appreciated week-on-week in 

most foreign exchange market 

segments. The Naira appreciated 

against the U.S. Dollar 

at the Investors & Exporters 

Forex Window (I&E FXW) by 

0.08% to N360.04/USD while 

it strengthened by 0.23% to 

N329.25/USD at the interbank 

market (NIFEX). This was amid 

injections by the CBN worth 

USD 195 million into the foreign 

exchange market of which 

USD 100 million was allocated 

to Wholesale (SMIS), USD50 

million was allocated to Small 

and Medium Scale Enterprises 

and USD45 million was sold for 

invisibles. 

In the same week, dated forward 

contracts at the interbank 

OTC segment mostly appreciated 

amid increase in the foreign 

exchange reserves – external reserves 

increased week-on-week 

by 0.63 percent to USD33.62 

billion as at Wednesday, October 

25, 2017. The 1 month, 

2 months, 3 months and 12 

months contracts appreciated 

w-o-w by 0.03%, 0.08%, 0.12% 

and 0.93% to close at N366.06/ 

USD, N372.00/USD, N378.24/ 

USD and N423/USD respectively. 

Analysts at Cowry Asset 

Management retained their 

stable outlook for the exchange 

rate amid sustained stability in 

global crude oil prices which 

should result in further buildup 

in foreign reserves as well as 

CBN’s continued intervention 

in the various segments of the 

interbank foreign exchange 

market 

Marine business suffers billion naira 

losses for non-appreciation of insurance 

…lack of loss-data affecting sector 

Modestus Anaesoronye 

Nigeria’s marine businesses 

have continued 

to suffer billions 

of naira losses on 

cargo damage and associated 

risks without compensation, as 

a result of high level of ignorance 

and poor appreciation of the 

benefits of insurance. 

Experts say the non availability 

of loss data in the country’s 

marine business is worsening 

the level of ignorance and 

growing lack of interest. 

According to experts, importers 

and exporters who were 

supposed to take advantage of 

insurance to protect their business 

take for granted the impact 

of loss and suffer in the long run. 

The consciousness is low, 

and so importers and exporters 

continuously run fowl of the law, 

pay fines to Customs, which are 

bigger than insurance premium 

and when loss occur their business 

is grounded, experts said. 

According to the analysts, another 

outcome of this ignorance 

is existence of all sorts of operators 

claiming to provide insurance, 

and so issue fake marine 

certificates to these international 

traders at any price they accept to 

pay, stating that 60 percent of the 

marine business in the industry 

is lost to fake operators. 

At the end, the insurance 

industry losses billion of naira 

premium and the insured are 

neither compensated nor indemnified 

when a loss happens 

because the fake insurer will not 

be found anywhere. 

Tola Adegbayi, executive 

director, General Business, 

Leadway Assurance Company 

Limited regretted that most 

importers where yet to realize 

that all goods coming into the 

country should have insurance 

according to the law. 

She said many of them bring 

in goods into the country without 

insurance and go to pay fines 

to (Customs) government for 

ignorantly flouting the law. 

“The funniest thing is that 

insurance premium is cheaper 

than the fine you pay for not 

taking the protection, and this 

fine now comes without a cover 

for damage or loss”. 

Adegbayi observed that the 

challenge has been lack of loss 

data in the industry. “For lack 

of data, many assume that no 

loss is taking place, but that is 

not true. People are losing their 

goods and some have gone out 

of business for the sake of not 

taking insurance cover for their 

imports or exports”. 

She noted that a lot of these 

gaps will be taken care of when 

the Nigerian insurance industry 

data base module two for 

maritime business becomes 

operational. 

“What this is going to do is 

that it will address the challenge 

of fake insurance certificates; 

increase awareness of the benefits 

of marine insurance as well 

as role of insurance in business 

growth for maritime industry, 

she stated. 

Eddie Efekoha, chairman, 

Nigerian Insurers Association 

(NIA) said the marine module 

has been running and member 

companies are daily uploading 

on the platform. 

According to him, at the 

end of May 2017, thirty three 

member companies of the NIA 

have uploaded 65,000 marine 

policies, stating that after text 

running the scheme it will be 

launched with the support of 

many stakeholders. 

Members are encouraged to 

continue to upload their marine 

policies, whilst plans are being 

made to bring other stakeholders 

into the scheme. 

To tackle the challenge of 

fake insurance, the National 

Insurance Commission (NAI- 

COM) had announced its collaboration 

with the Nigerian 

Customs Service (NCS) to ensure 

that all goods imported into 

Nigeria have genuine insurance. 

The Comptroller-General of 

Customs, Hameed Ibrahim Ali 

(rtd), had said at the meeting 

with NAICOM that it would collaborate 

with the Commission in 

building technical capacity for 

the customs to be able to detect 

fake insurance at the seaports 

and others. “The commission 

has graciously agreed to give us 

his team of experts who will train 

us on insurance. This is novel 

and we are sincerely grateful, 

Ibrahim Ali said 

Of the total gross premium 

income of N217.75 billion generated 

by the Nigerian insurance 

industry in the 2011, marine 

and aviation risks contributed 

N23.40 billion gross premium. 

Marine insurance covers the 

loss or damage of ships, cargo, 

terminals, and any transport 

or cargo by which property is 

transferred, acquired, or held 

between the points of origin and 

final destination. 

R-L: Yinkaa Sanni, CEO, Stanbic lBTCN ; lfeoma Esiri, executive director, Chinasa Akuma , beneficiary 

of the Together4limb lnitiative and her mother, Mrs Akuma, during the presentation of cheque to the 

beneficiaries by Stanbic lBTC in Lagos. 

Pic by Pius Okeosisi 

L-R: Onome Asagbra, product manager, Dufil Prima Foods Plc; John Ugbe, managing director, 

MultiChoice Nigeria ex-international, Augustine “Jay Jay” Okocha and Martin Mabutho, general manager, 

marketing and sales, MultiChoice Nigeria during the MultiChoice Premier League Trophy tour held at 

the Indoor Sports Hall of Teslim Balogun Stadium, Surulere, Lagos . 

Pic by Pius Okeosisi



Time to take a second look at that 

PenCom D-G’s appointment 

As the National 

Assembly and 

the Presidency 

sheath the sword 

and work towards 

resolving their differences, 

it’s expected that the 

unresolved issue of the power 

of the lawmakers to confirm 

the appointment of some political 

appointees will take the 

front burner soon. 

Among those calling for 

immediate attention are 

confirmation of the head of 

the Economic and Financial 

Crimes Commission (EFCC) 

and the newly appointed 

deputy governor of the Central 

Bank of Nigeria. 

The appointment and confirmation 

of the Director General 

of the National Pension 

Commission (PenCom) is also 

seen by industry watchers as 

another appointment that 

should attract the attention 

of both the executives and the 

lawmakers. This is because 

the savings of Nigerian workers 

both retired and working 

are involved. In all, a whooping 

N7.2 trillion is involved 

and this should not be toiled 

with. 

The appointment of the 

Director General of PenCom 

has generated a lot of controversies 

since President Muhammadu 

Buhari removed 

Chinelo Anohu-Amazu from 

the position without any reason. 

Shortly after Anohu-Amazu 

was removed, the Presidency 

appointed Dikko Aliyu Abdulrahman 

as new DG of the 

Commission. Following the 

outcry that greeted the appointment 

as the law required 

that only a Nigerian from her 

Geo-political zone who have 

not had any appointment in 

the pension industry within 

three years prior to or after 

the appointment could be 

appointed to replace her, the 

government reversed itself on 

the appointment. 

While President Buhari was 

away in London, Acting President 

Yemi Osinbajo appointed 

Funso Doherty as Director- 

General of PenCom. Doherty 

is from South-west and not 

President Buhari 

South-East as required by 

the PenCom Act. It would be 

recalled that Doherty was first 

appointed as the chairman of 

the board of PenCom. 

Since then, the post of DG 

of PenCom has remained vacant. 

Pension industry watchers 

told BusinessDay weekend 

that their expectation is that 

the peace-move by the executive 

and legislature would 

lead to the appointment of a 

new or return of Anohu-Amazu 

to her job. However if the 

Presidency decides to appoint 

a new DG, he or she must 

come from the South-East as 

required by law to make way 

for peace and progress in the 

pension industry. 

The previous appointments 

did not go down well 

with many people including 

experts in the pension and 

lawmakers. They described 

the appointments as absolute 

breach of the provisions of the 

Pension Reform Act, 2014. 

According to them, the 

actions of the Presidency 

contravenes the provision of 

the Act which provides that 

the nominee for the position 

of the Chairman or Director 

General of PenCom cannot 

be a shareholder or staff of 

any Pension Fund Administrator 

(PFA), within three 

years before or after his/her 

appointment. 

A legislator who spoke to 

BusinessDay on condition of 

anonymity, insisted that the 

appointment of Abdulraham 

or Doherty as Pencom DG 

was in breach of the Pension 

Reform Act 2014. 

Other lawmakers also contended 

that the appointment 

of critical agency such as 

Pension Commission should 

not be politicised to avoid 

loss of public confidence in a 

sensitive sector which takes 

custody of about N7.2 trillion 

pension funds belongs to the 

Nigerian workers. 

Citing Section 21(2) of the 

Pension Reform Act, 2014, a 

senator from South -East zone, 

wondered why a replacement 

was not announced from the 

same geo-political zone with 

the sacked DG, in line with the 

provisions of the Act. 

Section 21 (2) of the Act 

states that: 2014: “In the event 

of a vacancy (for the chairman, 

DG or other members 

of board), the President shall 

appoint a replacement from 

the geo-political zone of the 

immediate past member that 

vacated office to complete the 

remaining tenure.” 

According to the Pensions 

Act, the Commission’s DG is 

entitled to five years tenure of 

office, subject to renewal for 

another term in office. 

The former Pencom DG, 

Anohu-Amazu is from Anambra 

State, South East Nigeria, 

was confirmed by the Senate 

on the 30th September, 2014 

for a five year term, and is 

expected to end her tenure 

on the 29th September, 2019. 

“In tandem with the provisions 

of the Act, if at all they 

wanted to replace Anohu- 

Amazu, she ought to be replaced 

by someone from the 

South- East, who will complete 

the remaining part of 

her tenure of five years. 

“Section 21 of the Pension 

Reform Act 2014 clearly spelt 

out the circumstances under 

which a member of the Commission 

will seize to hold office. 

It listed such circumstances 

as resignation, expiration of 

term, death, bankruptcy, 

conviction for a crime, becoming 

an unsound mind, 

disability and outright removal 

by the president, who 

would then write the affected 

person. 

“Section 21(j) said a member 

of the Pencom board 

could be removed if the 

President is satisfied that it 

is not in the interest of the 

Commission or public for the 

person to continue in office 

and notifies the member in 

writing to that effect. 

“This provision was not 

met in the dissolution of the 

Pencom board and removal 

of the chairman, DG and 

commissioners, as they were 

not written before the announcement 

was made. 

“The Senate frowns at this 

act of impunity displayed by 

the President and we will vehemently 

oppose the confirmation 

of the new DG when 

the President presents it to 

us,” the senator told our correspondents. 

Deputy Senate Majority 

Leader Bala Ibn Na’Allah 

declined to comment on the 

issue on the grounds that it is 

an executive matter 

“Honestly, I don’t want to 

comment on that. It’s purely 

an executive matter and a legal 

matter. And unfortunately 

we are in a country where it 

is very difficult to speak the 

truth; more especially when 

you are in leadership position. 

So I will rather take the 

dignified option of maintaining 

a dignified silence on the 

matter”. 

Anohu-Amazu was reputed 

to increased pension assets 

from N2.9 trillion in 2012 to 

N6.7 trillion in 2017. 

Besides establishment 

of six zonal offices, she 

also increased the Retirement 

Savings Account from 

N5.39million to N7.2million.

16 

BUSINESS DAY 

Lafarge empowers 

geologists for 

Nigeria project on 

mining, minerals 

exploitation 

C002D5556 


SON shuts 4 steel plants for non-compliance with standards 

Odinaka Anudu 

Standards Organisation 

of Nigeria 

(SON) has shut four 

steel companies 

The 

across the country 

for non-compliance with 

requirements of the Nigeria 

Industrial standards (NIS 117) 

and global best practices. It also 

warned that any steel manufacturer 

caught circumventing 

quality assurance requirements 

henceforth would be prosecuted 

in line with the SON Act 

14 of 2015. 

The SON said the four firms 

were among those the agency 

investigated and conducted 

integrity tests recently on. 

The director general, SON, 

Osita Aboloma, gave the warning 

at a meeting with steel stakeholders 

in Lagos. Aboloma said 

compliance with quality and 

standards would guarantee local 

and international patronage 

of steel products manufactured 

in Nigeria. 

He advised steel makers 

not to undermine one another 

through the production of substandard 

steel reinforcement 

bars under the name and code 

of rival firms and competitors. 

Such act, according to him, was 

detrimental to the unsuspecting 

end-users who would and use 

the products. 

Aboloma also warned them 

to desist from tampering with 

any consignment put on hold 

by officials of the agency for 

suspected infractions during 

investigation and quality verifications, 

stressing that such acts 

by anyone in the steel or other 

sectors would be prosecuted. 

He reiterated the agency’s 

commitment to ensuring the 

safety of lives and property of 

Nigerians, part of which informed 

its recent nationwide 

monitoring of steel production. 

The SON boss expressed concern 

over the non-compliance 

of key stakeholders in the industry, 

maintaining that the agency 

would stop at nothing to bring 

sanity to Nigeria’s steel sector. 

“Players producing without 

regards to NIS 117 will not be 

tolerated.” he said. 

According to him, the 

federal government has been 

working tirelessly to support 

local manufacturing for export 

in order to improve foreign 

exchange earnings, assuring 

manufacturers of SON’s resilience 

and doggedness to protect 

genuine local production from 

unfair competition. 

He disclosed that steps 

were underway to harmonise 

standards for steel production 

across West Africa, stressing 

that this would avail steel manufacturers 

the opportunity to 

produce and export to different 

countries within the region. 

The SON boss urged steel 

manufacturers to imbibe the 

culture of self-regulation and 

monitoring, saying that it would 

help to prevent standards infractions. 

“It has been done in 

other sectors and would go a 

long way to eliminating faking 

and production of substandard 

steel products. It will also increase 

the collaboration among 

stakeholders and regulators as 

well as increase the confidence 

of consumers. 

I urge you to be quality vanguards, 

if you see something 


unwholesome, say something 

to SON,” he averred. 

In his remarks, Femi Gbadegun, 

sectoral executive, Basic 

Metal Group of the Manufacturers 

Association of Nigeria 

(MAN), said the association was 

ready to imbibe the culture of 

producing quality steel bars to 

meet the NIS standards. He also 

restated the association’s commitment 

to partner with SON to 

rid Nigeria of substandard products. 

“We are also taking steps 

to ensure that our members 

comply with standards. We are 

partners in progress and if you 

find any manufacturer that falls 

short of standards, take punitive 

measures,” he admonished. 

RAZAQ AYINLA, Abeokuta 

Having agreed with 

Federal Government 

effort to diversify the 

nation’s economy 

from oil-based to non-oil structured 

with priority on solid 

minerals and agriculture Lafarge 

Africa has trained and equipped 

42 geologists, mining engineers 

and geo-scientists ahead of 

Nigeria projects on mining and 

solid minerals exploitation for 

economic growth and development. 

BusinessDay reports that 

the skills and empowerment 

training was oraginsed as a 

follow-up action to the Minister 

of Mines and Steel Development, 

Kayode Fayemi’s 

working visits to Lafarge Africa 

and Dangote Cement plants 

in Ogun state earlier this year 

where he instructed the two cement 

giants to assist Nigeria in 

her effort to diversify economy 

towards solid minerals through 

effective training of workforce 

in public and private sector. 

Consequently, Lafarge 

Africa, the leading cement and 

building solutions provider, 

selected its first set of trainees 

from the Geological Services 

Department of Ogun State 

Ministry of Commerce and 

Industry, who were trained on 

exploration, draining, planting, 

soil test, solid minerals 

blasting, exploitation of minerals, 

among other processing, 

and production of limestone 

into cement. 

Speaking at the presentation 

of certificates to the trainees 

held at Government Secretariat 

in Abeokuta on Wednesday, 

Folashade Ambrose-Medebem, 

Lafarge Africa Director, Communications, 

Public Affairs 

and Sustainable Development, 

declared that the effort was 

undertaken as a follow-up to Cement 

Professional Technicians 

Programme, a three-year development 

programme for young 

science-oriented school leavers 

selected from its host communities 

across the federation. 

She said, “We are committed 

to the promotion of local content 

and the development of local 

capacity.


BUSINESS DAY 

17



C002D5556 

MEDIABUSINESS 

MB 

ADVAN enthusiastic on empowered future in 

marketing communication industry - Folake 

Stories by Daniel Obi 

Media Business Editor 

The Advertisers 

Association of 

Nigeria, ADVAN 

new executive is 

determined to 

create an empowered and 

vigorous future in the annual 

N150 billion marketing 

communication industry in 

spite of the challenging in 

the operating business environment. 

The president of the 25- 

year old association, Folake 

Ani-Mumuney told BusinessDay 

at the unveiling of 

the body’s agenda that the 

association’s goals would 

be achieved across four thematic 

pillars. She identified 

them as Thought Leadership, 

Encouraging Knowledge 

Sharing and Capacity 

Building, Effective Stakeholder 

Engagement, and 

Facilitating and Procuring 

Access to Data, Research 

and Insight 

Underscoring the importance 

of creating an 

empowered future, Folake 

acknowledged that the current 

macroeconomic environment 

is actually challenging 

characterized by 

tough regulatory regimes, 

arbitrary licensing fees, 

L-R: Israel Opayemi, MD/chief strategist, Chain Reactions Nigeria; Paul Holmes, Convener, Global 

PR Summit, and Akonte Ekine, CEO, Absolute PR, at the Global PR Summit 2017 in St. Regis, Bal 

Habour, Miami Florida, United States. 

multiple taxation and advances 

in technology driving 

new business models 

and creating new markets 

but agreed that the future is 

promising. 

“Having only recently 

emerged from recession, 

we are operating in an 

economy that remains severely 

challenged. We face 

increasing and tougher 

regulatory regimes bringing 

with it additional and sometimes 

onerous or duplicated 

compliance requirements. 

Our new norm is one of 

ad-hoc and sometimes arbitrary 

licensing fees and 

multiple taxations. We see 

unprecedented advances 

in technology driving new 

business models and creating 

new markets. Amidst all 

these we see the future as 

exciting, offering many opportunities”, 

she said. 

According to Folake who 

is also Head, Marketing and 

Corporate Communica- 

tions and General Manager, 

First Bank of Nigeria, to be 

primed and positioned to 

seize those opportunities 

marketers must proactively 

take the steps today capable 

of creating sustainable value 

for today and grow that value 

into tomorrow. 

She therefore said that 

a proactive ADVAN must 

be the catalyst for the progressive 

strategic marketing 

thinking demanded by the 

future. “We must be thought 

leaders in the industry and 

as thought leaders we must 

think for today and the future. 

The future is now and 

the age of disruption is 

firmly upon us. As architects 

of our own fortune we must 

disrupt if we are not to be 

disrupted” 

Folake who has deep 

experience in marketing 

communication believes 

that ADVAN must remain at 

the vanguard of driving true 

value for its members, empowering 

members through 

relevant professional empowerment 

trainings and 

seminars, effective networking 

opportunities, knowledge 

sharing and capacity 

building initiatives. 

Challenging her members 

who have different 

discipline and specialization 

to continue to evolve 

in the internet age, she said 

fast evolving world suggests 

that whilst “we are one thing 

we must increasingly consider 

and be many things, 

we must shape our future 

rather than have it shaped 

for us. We must add value to 

ourselves, our member organizations 

in order to add 

value to our industry and 

through that the nation as a 

whole”. 

She sees ADVAN that 

has its rightful place at the 

table and a voice that counts 

in all matters that affect the 

industry today and what 

the industry will be tomorrow. 

“Effective stakeholder 

engagement across the entire 

stakeholder spectrum 

is therefore an essential 

cornerstone in building the 

ADVAN we want. To go further 

in impacting, to see an 

ADVAN that is not just invited 

to the table but one that 

has laid the table and set the 

agenda” 

She also said that the AD- 

VAN marketing excellence 

award scheduled for early 

next month is usually an 

event to highlight the fundamental 

position marketing 

occupies in business and 

public sectors, and to celebrate 

marketing achievements 

across a range of industries. 

Apple’s store deepens confidence in Nigeria’s 

market, introduces high-end iPhones 

...marks 5 years of business in Nigeria 

With confidence 

in Nigeria’s multi 

billion Naira 

phone market, 

authorized seller of Apple 

products in Nigeria, iStore 

which is marking its 5 years 

of business in Nigeria has introduced 

two Apple high end 

phones, iPhone 8 and iPhone 

plus in to the Nigerian market. 

The iPhone 8 and iPhone 8 

Plus described as new generation 

of iPhone featuring a new 

glass and aluminum design 

in three beautiful finishes - 

space gray, silver and a new 

gold comes in different GB 

grades. iPhone 8 has 64 GB 

for N325,000 and 256 GB for 

N385,000 while iPhone 8 plus 

comes in 64 GB for N365,000 

and 256 GB for N435,000. 

The latest iPhones have 

amazing features such as, 

wireless charging that brings 

a powerful new capability to 

iPhone. iPhone 8 Plus, features 

dual 12-megapixel cameras 

and introduces Portrait mode 

with Portrait Lighting, bringing 

dramatic studio lighting effects 

to iPhone, allowing customers 

to capture stunning portraits 

with a shallow depth of field 

effect in five different lighting 

styles. It also has 3D touch for 

users experience. 

The istore manager Kolapo 

Agunloye told BusinessDay 

that Apple objective is to make 

life easier for customers and 

that underscores the reason behind 

the introduction of iPhone 

8 and iPhone 8 plus. “One of 

the things about Apple phones 

is that they don’t hang when in 

use. Apple engages in extensive 

consumer research towards 

satisfying the customer. Now it 

has phones that do things that 

hitherto only computers could 

do. What Apple is doing now is 

pushing the frontiers of what 

phones can do” 

As part of its anniversary, 

the store is also introduced 

free additional one year warranty. 

The Istore said the iCare 

Extended Warranty Bundle 

entitles the customer to one 

extra year of warranty on the 

new iPhone and another on 

an existing Apple product 

that was purchased in the last 

12 months and is still under 

its original 12-month Apple 

warranty. 

Fero Mobile unveils Fero X2 

smartphone in Nigeria 

Fero Mobile, the fastest 

growing mobile phone 

brand in Nigeria, today 

launched the Royale 

X2 Smart phone device into 

the Nigerian Markets. 

The Royale X2 is a classic 

High End Smart Phone that 

runs on the Android Nougat 

7.0 operating system. The device 

comes with a high definition 

5.2 inch display screen 

which has a multi-touch feature 

and a 2.5D Front Dragon 

Trail Glass that makes it rugged 

and durable. It also comes a 

3GB RAM and 32GB internal 

memory powered by a 1.25 

GHz 64 bits Quad-Core processor. 

It has a Finger print 

scanner for enhanced security, 

and different fingers can be 

linked to open different apps 

quickly – literally at the touch 

of a button. It boasts a 4,000 

mAh Li-Polymer Batter with 

fast charging capability. 

The Royale X2 boasts a 13 

Megapixel back camera, an 8 

Mega pixel front camera that can 

shoot wide angle selfies which 

look great at night due to the 

moonlight flash. The back camera 

features LED Flash and auto 

focus, among other properties. It 

is a dual SIM device that supports 

2G, 3G and 4G connectivity while 

also supporting a microSD that 

can increase storage capacity up 

to 128GB. And all of the above, 

at a very competitive price. It is 

truly a flagship phone with an 

unbeatable price. 

Speaking at the launch, 

Mr. Phiroze Seth, Managing 

Director, Nigeria and Emerging 

Markets at Fero Mobile, 

said “The Royale X2 is a device 

that will excite smart phone 

enthusiasts in Nigeria. Our 

products are designed to meet 

the unique needs of Nigeria. A 

lot of research have gone into 

understanding the market and 

we are proud to say that this 

device will surpass the expectations 

of Nigerians in terms 

of design and performance.”


BUSINESS DAY 19 

Advertising 

C002D5556 

Today’s advertising agency must embrace both 

creative skills, strong IT and data skills - Mangesi 

Now Available Africa, a pan African advertising agency based in Accra, Ghana recently entered in business relationship with 

Syracuse, a digital agency based in Lagos, Nigeria to help serve its existing and potential clients better in the Nigerian and 

West African market. In this interview, the CEO of Now Available Africa, Kofi Mangesi who spoke other issues on advertising 

said the partnership brings the combined experiences of the two agencies in traditional, creative, digital productions, social 

and media buying together for better synergies in the vibrant Nigerian advertising market. Excerpts 

You recently entered 

into relationship with Nigerian 

digital agency, Syracuse 

could you explain what 

informed this partnership? 

Having worked 

in Nigeria over 

the last five 

years from our 

base in Accra, 

Ghana, we thought the time 

was right to set up shop fully 

in Nigeria and Syracuse provided 

us the perfect synergistic 

fit that was required 

to better serve our existing 

clients and new business 

opportunities. 

Why do you think that 

Now Available Africa and 

Syracuse are perfect match 

for this relationship 

The advertising agency of 

today is the one that has not 

only the best of creative skills 

but also strong IT and data 

skills to serve the increasing 

complex media space we 

have today. That is what this 

partnership is about, combining 

our unique strengths 

to provide a better offering 

for the clients. 

Affiliating with companies 

in Europe and West is 

the current trend in Africa, 

Kofi Mangesi 

why did you choose to keep 

this partnership between 

Ghana and Nigeria? 

At the core of our company 

culture is the believe 

in what we call “Afropean”, 

that is the fusion of European 

skills and local 

African knowledge, so for 

us this partnership is just 

a realisation of that culture, 

which brings our Euro- 

pean heritage to join local 

knowledge of the Nigerian 

market. 

How long do you expect 

this relationship to last and 

what does Now Available in 

Africa hope to achieve in 

this partnership? 

We are in Nigeria to stay. 

Tell us your major success 

story in recent time. 

NAA recently won a Creative 

Award from Twitter for its 

“African Portraits” campaign 

for Nescafe Africa. The campaign 

was to highlight and 

celebrate the achievements 

of young Africans across the 

region, and inspire others to 

chase their dreams and make 

them a reality. 

What is Now Available 

Africa’s core value and operational 

philosophy? 

We believe in Neutral 

advertising, which is to say, 

as an agency our philosophy 

is to approach the brief from a 

platform neutral perspective. 

This approach to creativity allows 

us to best find the right 

mix of the target insight, with 

the best strategic medium 

through which the message 

will be delivered. This permeates 

every thing we do at 

NAA. 

What would you say is a 

competitive edge for Now 

Available Africa? 

In advertising as in many 

service businesses, it’s all 

about the people. We have 

some of the most talented 

and dynamic people in advertising 

today that this continent 

has to offer. Our diverse 

team of young and talented 

professionals are creating 

world class campaigns. 

What are the current 

challenges and prospects 

facing advertising practise 

in Africa? 

Marketing managers have 

to understand the consumer 

today is more sophisticated 

than ever before. They have 

access to a plethora of channels 

to choose from and gaining 

their attention requires 

more innovative approaches 

in both media and format. 

African countries hardly 

win international creative 

awards like the major Cannes 

awards, in France, what do 

think is the challenge. 

There is no challenge, a lot 

of good work is coming out of 

Africa and what we need is 

more recognition of this. 

LG brand signs 3-year deal to back LPGA’s 5TH major 

LG Electronics (LG) 

said it has entered 

into an agreement 

with the Ladies Professional 

Golf Association 

(LPGA) to partner the Evian 

Championship as a global 

partner until 2020. The Evian 

Championship is the fifth major 

on the LPGA Tour along 

with ANA Inspiration, KPMG 

Women’s PGA Championship, 

U.S. Women’s Open and 

Ricoh Women’s British Open. 

The tournament takes place 

at the Evian Resort Golf Club 

in Évian-les-Bains, France. 

As the fifth and final major 

of the year, the Evian Championship 

reaches a total audience 

of over 24 million 

viewers from 170 different 

countries. This wide appeal 

to golf enthusiasts will provide 

LG Electronics with the 

opportunity to leverage up to 

30 million dollars in publicity. 

This year, according to a 

statement both Chun In-gee, 

the record-setting winner of 

the 2016 Evian Championship, 

and Park Sung-hyun, the 

leading prize money winner 

after her recent victories at 

the prestigious U.S. Women’s 

Open and the Canadian Pacific 

Women’s Open, will 

compete for the purse of USD 

3.65 million. 

LG Signature is the company’s 

recently launched 

premium brand that features 

the most advanced technologies, 

a refined design and intuitive 

usability. Available in 

key markets in Europe, Asia 

and North America to date, 

the LG Signature lineup, the 

statement said currently includes 

a uniquely-designed 

OLED TV, washing machine, 

refrigerator and air purifier. 

“Concurrent with the Evian 

Championship sponsorship, 

LG intends to expand the 

availability of LG SignatureE 

to new markets such as the 

Middle East, Russia and India 

in the near future. 

“After accelerating the 

global launch of the LG Signature 

brand, we plan to 

expand premium marketing 

activities to secure the premium 

brand’s place in the 

global market,” said Brian Na, 

executive vice president and 

LG’s global marketing officer 

in the statement. “By reaching 

out to premium consumers 

interested in major golf 

tournaments, LG Electronics 

hopes to expand its ultra-premium 

LG Signature brand.” 

Chivita, Hollandia drive Chi recognition 

as Most Innovative Brand 

Every year companies 

strive to be more 

innovative through 

insights of new challenges 

and uncovering opportunities 

to create value. By 

being innovative, brands continually 

seek ways to reinvent 

themselves, propel growth 

and achieve market leadership 

that attracts industry 

recognition. This was showcased 

at the recently held Top 

50 Brands Nigeria Awards 

where Chivita in Juices and 

Hollandia in Dairy ensured 

Chi Limited was recognized 

amongst the Top 50 Brands 

and honoured as the Most 

Innovative Brand in Nigeria. 

Renowned for continually 

enhancing existing brands, 

creating new product categories 

and effectively building 

emotional connection with 

consumers around them, the 

brand’s success story at the 

awards has been driven by a 

desire to churn out innovative 

products like Chivita and Hollandia 

that are benchmarks 

and definitive standards in 

their respective categories. 

Deploying specific criteria 

including brand popularity, 

category leadership, innovation, 

national spread, Corporate 

Social Responsibility 

and online engagement to 

measure brands, the Top 

50 Brand Award evaluates 

and celebrates top corporate 

brands that have consistently 

maintained leadership position 

in their categories, living 

up to their promises, and have 

become a part of the popular 

culture, attracting powerful 

visual cue that evokes emotion 

from consumers. 

Speaking on the awards, 

CEO, Top 50 Brands Nigeria, 

Taiwo Oluboyede, said with 

the volume of competition 

that businesses face, it has 

never been more important 

for brands to stand out 

through innovation as well as 

develop a unique identity and 

value proposition through 

strategic branding. 

“The brands honoured at 

this year’s edition of the Top 

50 Brand Nigeria Awards have 

transcended their product/ 

services categories and mean 

much more to the consumers.


C002D5556 

BUSINESS DAY 

33 

BRIAN REUBEN 

BUSINESS DAY 

T R A I N I N G 

A HUMAN CAPITAL AND KNOWLEDGE MANAGEMENT COMPANY 

World Class Business Insights 

How to exponentially increase your business performance 

Conventionally, it is thought 

that increased pay leads to 

increased productivity. But a 

recent study by economists 

at the University of Warwick 

found that happiness led to a 12% increase 

in productivity, while unhappy 

workers proved 10% less productive. 

According to Professor Andrew 

Oswald, one of three researchers who 

led the study, companies that invest in 

employee support and satisfaction tend 

to succeed in generating happier workers. 

At Google, employee satisfaction rose 

37% as a result of those initiatives—suggesting 

that financial incentives aren’t 

enough to make for highly productive 

employees. 

Your most important assets are human 

beings and intrestingly man is more 

of an emmotional rather than intellectual 

being. The biggest and most profitable 

companies in the world understand this 

truth and are as such committed to the 

emotional stability of their workforce. 

Lara Harding, People Programs Manager, 

Google gave an insight into how Google 

look at their people when he said, At 

Google, we know that health, family and 

wellbeing are an important aspect of 

Googlers’ lives. We have also noticed that 

employees who are happy ... demonstrate 

increased motivation ... [We] ... work to 

ensure that Google is... an emotionally 

healthy place to work. 

Perhaps one of the most important 

things business leaders must accomplish 

is shaping the perception of their workforce 

in the direction of their corporate 

vision. When workers see themselves as 

a part of the company, when they feel at 

home, are happy and take pride in their 

job they can withstand any pressure at 

work. 

The happiness of your workforce is 

directly linked to their productivity. The 

truth is that even one unhappy employee 

can negatively impact on your organisational 

performance. So you want to have 

happy and satisfied employees because 

that’s good for your business. Ironically 

being the highest paying company in 

your industry does not guarantee a happy 

workforce. It takes an intelligent mix of 

mission, culture and management to 

create happy employees. 

Mission 

A mission defines what a company 

live for. It begins by a clearly defined 

and effectively communicated mission. 

Such that every one in the organization 

from the CEO to the Janitor understands 

clearly, believe in and are excited about. A 

mission the workforce so believe in that it 

shapes their life and work attitude. Such 

as the apocryphal story about a janitor at 

NASA who when asked by someone what 

he was doing, replied ‘I’m helping to put 

a man on the Moon.’ How could the Janitor 

think that way? The answer is simple. 

The leadership at NASA did a good work 

in communicating their mission to the 

entire workforce. 

People are glad to be a part of something 

meaningful. They put their best effort 

in a mission or goal that excites them. 

This is where you begin. Clearly every 

successful organisation has an exciting 

mission that is so well communicated 

thateven their security men understand 

it. For Coca Cola, it is to refresh the world 

in mind, body and spirit. To inspire 

moments of optimism and happiness 

through our brands and actions. For 

Microsoft, it is to empower every person 

and every organization on the planet to 

achieve more. Need we be surprise then 

these companies make it into the list of 

the best companies to work in? 

Culture 

“There’s no magic formula for a 

great company culture. The key is just to 

treat your staff how you would like to be 

treated.” – Richard Branson 

The corporate culture is the core of 

any businesses and it is as important 

as getting in the sales. According to 

Investopedia, a corporate culture refers 

to the beliefs and behaviours that determine 

how the company’s employees 

and management interact and handle 

outside business transactions. 

You should let your corporate culture 

inspire happiness among your workforce. 

The advice of Mr Branson sums up 

the secret of creating a culture that will 

make the heart of your employees to sing. 

Following his advice delivers the magic of 

happiness in your organisation. Imagine 

for instance, an organisation where the 

CEO understands how to be firm as 

well as laugh freely with the employees. 

That’s just like a good daddy. The staff are 

glad you are there, not scared. Consider 

Facebook which targeting a ‘frictionless’ 

workplace has everyone working 

together on big, white, communal desks. 

Even Mr. Zuckerberg doesn’t have an 

office. Instead, opting to work alongside 

the other employees in the ‘bull-pen’ like 

workspace. Potentially having an intern 

work alongside the boss is incredibly 

daunting, yet motivating. This surely 

adds to the corporate culture at Facebook, 

as equality is not only preached, 

but practiced. 

So think about your peculiar case 

and create a culture that inspires your 

employees to believe in your company. 

Be a mentor rather than a superior. Be 

unassuming, employees like it. 

Besides that, find ways to make people 

laugh freely at the work place. Nothing 

beats creating a happier corporate 

culture by bringing smiles and laughter 

into the work place. 

Management 

According to Hal Rosenbluth in his 

book Customers Come Second, “Profits 

are a natural extension of happiness in 

the workplace.” Your employees will care 

about your business to the degree you 

care about them. Part of management’s 

responsibility is to manage the total well 

being of the employees. You can’t close 

your eyes and insist on performance 

when a staff is weighed down by emotional 

issues. You can’t act like you don’t 

know someone looks depressed when 

you should as a matter of fact observe the 

disposition of your people. Show enough 

concern in the affairs of your people 

and they will be happy to give you their 

commitment. 

Finally, it matters how happy your 

people are. Their productivity depends 

on how happy they are. When you care 

about your people they will care about 

your business. If you neglect that you will 

watch profits go down the drain. 

Brian Reuben is a business advisor 

and head of BusinessDay Training. 

@brianoreuben 

This Page Is Open For Sponsorship, for details call 0808 726 4420.


Harvard 

Business 

Review 

Tips 

& 

Talking Points 

TIPS & TALKING POINTS 

Science Doesn’t Draw Millionaires 

1%: While 18% of American multimillionaires 

work in finance, only 1% of 

them work as professors or scientists, 

according to a recent paper published in 

the Journal of Political Economy. 

+ 

How CEOs Spend Their Time 

25%: About 25% of a CEO’s time during 

an average work day is spent alone, according 

to the results of a survey of more 

than 1,000 CEOs across six countries. 

+ 

Reluctance to Hire Military Reservists 

11%: According to research from a 

Treasury Department economist, current 

military reservists in the U.S. who 

indicated their service status on their 

résumés were 11% less likely to be called 

in for a job interview. 

+ 

GE’s Global Reach 

180: GE currently has 300,000 employees 

and maintains a presence in 180 

countries, according to chairman Jeffrey 

R. Immelt. 

+ 

Focus and Performance 

50%: When you focus on two mental 

tasks at the same time, performance can 

decrease up to 50%, according to David 

Rock, the author of “Your Brain at Work.” 

New leaders, learn about the company before 

implementing your vision 

A new CEO 

or senior executive 

has a 

50% chance 

of leaving 

the organization 

within 

18 months. 

Some experts 

attribute this 

failure rate to 

leaders proposing 

and 

implementing 

a new vision 

too soon. 

Yes, leaders should know where they 

plan to take the company, but it’s important 

for them to understand the 

organization first. If you’re new to your 

senior role, take time to learn about the 

working environment. Listen to your 

colleagues and customers and find out 

if some of your ideas have already been 

tried. If people ask about your strategic 

vision, don’t be afraid to say, “This is my 

opportunity to listen and learn. Ask me 

again in three months.” Studying the landscape 

before rolling out your big ideas can 

prevent you from repeating the mistakes of 

your predecessors — and wasting resources 

on plans that won’t work. 

(Adapted from “The Biggest Mistakes New 

Executives Make,” by Sabina Nawaz.) 

Reframe that difficult 

conversation to calm 

your nerves 

If you’re getting ready for a conversation 

that you’ve labeled 

“difficult,” you’re more likely to 

feel nervous, stressed, angry, or 

upset. To minimize those negative 

emotions, try to think of the 

discussion as a noncharged 

conversation. For example, instead 

of a discussion being about 

negative feedback, think of it 

as a constructive conversation 

about development. Or, you’re 

not saying “no” to your boss; 

you’re offering up an alternative 

solution. These kinds of discussions 

tend to go best when you 

think of them as normal conversations 

and approach them 

with curiosity and openness. Of 

course, don’t try to fool yourself. 

Be honest about how hard the 

conversation might be, but put 

as constructive a frame on it as 

possible. You might tell yourself: 

“We may have to talk about 

difficult things, but we’ll work 

through them together, because 

Josh and I have always respected 

each other.” 

(Adapted from the HBR Guide 

to Dealing with Conflict, by Amy 

Gallo.) 

Should you stay in your job? 

here’s how to know 

Sometimes you’re in a job 

that just isn’t fulfilling. Sure, 

it may offer security and 

“success,” but you still fantasize 

about quitting to 

pursue your passions. You 

shouldn’t let these thoughts 

linger for too long, though 

— it’s better to make an 

active decision about them. 

— Start by thinking about 

the “have to’s” that are holding 

you back: I have to have 

a steady income. I have to 

have the respect that comes 

with a job at a leading company. 

Then consider if these 

statements are realities, or 

merely assumptions, beliefs 

and habits that you’re 

imposing on yourself. 

— You can break any inertia 

by reframing the decision. 

Instead of asking yourself 

“What outcome do I want and 

how can I get there?” consider 

“What are the best and worst 

outcomes I can expect?” 

You may realize your current 

role will never allow you to 

pursue your dreams. That 

clarity may be what you need 

to retake control of your career 

path. 

(Adapted from “Don’t Spend 

Your Life Making Up Your 

Mind,” by Mark Chussil.) 

c 

Daydreaming (with a purpose) 

can recharge your mind 

Resisting distractions seems 

like an intuitive way to be 

more productive, yet research 

shows that excessive focus 

exhausts your brain. To tap 

into your “default mode network” 

— an unfocused state 

in which your brain activates 

old memories, enhances selfawareness, 

and imagines creative 

solutions — use positive 

constructive daydreaming. 

Begin a low-key activity, like 

knitting or gardening, and allow 

your mind to wander. But 

don’t simply slip into a daydream 

or rehash old worries. 

Instead, imagine something 

playful, like running through 

the woods. Hold the wishful 

image in your mind while continuing 

the low-key activity. 

In this unfocused state, your 

mind will recharge, connect 

ideas, and even find long-lost 

memories. The associations 

your mind makes during positive 

constructive daydreaming 

should enhance your sense of 

self, making you a more confident 

leader. 

Adapted from “Your Brain Can 

Only Take So Much Focus,” by 

Srini Pillay 

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

Be kind to yourself when 

you’re feeling stressed out 

Burnout is a serious problem 

at work. It can make you 

feel emotionally exhausted, 

cause cynicism and hinder 

your job performance. If you 

notice these signs of extreme 

stress, resist the urge to beat 

yourself up — that will only 

make the situation worse. 

Instead, have some empathy 

for yourself and what you’re 

going through. 

— Start by considering how 

you might be creating unnecessary 

stress: For example, 

are you setting unrealistic 

expectations for yourself? Remember 

that we all have only 

a certain number of hours in 

the day. 

— When you feel overly 

stressed, acknowledge it and 

recognize that others would feel 

similarly in the same situation. 

Being kind to yourself, instead 

of laying on the self-criticism, 

can shift your mindset from 

feeling threatened to being selfcompassionate, 

strengthening 

your resiliency and making you 

more likely to bounce back from 

a stressful time.

C002D5556 



businessday 

EDUCATION 

Weekly insight on current and future trends in education Higher Primary/Secondary Human Capital 

Understanding students’ learning styles 

facilitates classroom interaction 

STEPHEN ONYEKWELU 

It was a sunny day and twenty 

year old Edet, a 300 levels Nigerian 

student of Computer Science 

at the Stellenbosch University, 

South-Africa (SA) was 

unwinding at the school’s recreational 

facility after a typical hard day’s labour 

and wondering how fortunate she 

was to find lecturers who understood 

she was different, had personal idiosyncrasies 

and preferences which 

affected her learning style. 

Before she left for the SA, she had 

attended both public primary and 

secondary schools in Nigeria. She 

still recalls her mathematics teachers 

had told her she had no business 

studying maths or maths related 

courses because she simply was 

not cut out for such abstractions. 

She believed this until her uncle 

took her to SA. At Stellenbosch 

University, she had various forms 

of psychometric tests administered 

on her to discover her particular 

learning preferences and style. This 

in turn helped her lecturers tailor 

their teaching style or pedagogy to 

her individual learning preferences. 

Learning style is the preference or 

predisposition of an individual to per- 

L-R: Tom Isibor, Head, ACCA Nigeria; Jonathan Mbewe, Head, Education and 

Development, SSA; Patrick Nwakogo, Country Director and CEO at Dale Carnegie 

Nigeria; Victor Ayoola, Education and Learning Manager, and Mukoso Eddie- 

Obiakor, Marketing Manager, East & West Africa, all of Association of Chartered 

Certified Accountants (ACCA). 

ceive and process information in one 

particular way or a combination of 

ways. Research suggests that learning 

styles originate with a large genetic 

component – but they can change 

and develop throughout life. Understanding 

one’s learning style is the 

first step in learning how you learn. 

Using study methods appropriate 

for one’s learning style will facilitate 

learning, rather than impede it. 

“One of the biggest problems for 

education in Nigeria is the tendency 

to ignore the individual differences 

and learning styles or preferences of 

students. In a bid to cover the content 

prescribed by the syllabus some 

teachers unwittingly make students 

learn by rote with little understanding 

because their learning styles 

would have been violated. What 

happens is that at the end of the 

day students have little understanding 

of what they were taught” said 

Odumosu Omolara, a curriculum 

development expert and CEO Class 

Climax Consulting Ltd. 

Omolara added that one of the best 

approaches to learning and teaching 

is a project based learning methodology. 

In this light, learning outcomes 

are organised around a project meant 

to solve a concrete problem. 

In research paper published by 

the Journal of Clinical & Diagnostic 

research, a cross sectional study 

was conducted on 100 first semester 

medical students who were enrolled 

at SMS & R, Sharda University, India. 

The VARK questionnaire, version 7.1 

was used to categorise the learning 

preferences/modes as visual (V), 

auditory (A), read and write (R) 

and kinaesthetic (K). The students 

were also asked to rank the various 

teaching methodologies namely; 

lectures, tutorials, demonstrations 

and practicals/dissections from the 

most preferred choice to the least 

preferred one. 

Nestle equips Abuja teachers 

against unhealthy diets 

RAZAQ AYINLA 

As part of efforts to ensure 

healthy living and good 

diets formation, especially 

among pupils in primary 

schools, Nestle Nigeria PLC has organised 

a one-day health and nutrition 

empowerment workshop for the 

primary school teachers in Abuja, the 

Federal Capital Territory with a view 

to instill good eating habits into the 

younger ones. 

According to the giant food and 

beverage firm, the workshop is part 

of ongoing Nestle Healthy Kids Programme 

which is aimed at making 

teachers understand reasons they 

must encourage their pupils to eat 

healthy and nutritious food. 

Speaking at the event held in Abuja 

recently, Gloria Nwabuike, Marketing 

and Public Affairs Manager of Nestle 

Nigeria PLC noted that the firm is committed 

to inspiring people, especially 

the younger ones to lead healthy lives 

by building, sharing and applying 

nutrition knowledge as core teaching 

aids and guidelines for good life. 

Nwabuike, who implored teachers 

to help disseminate information on 

nutritious diets and healthy living 

as inputs responsible for longer life 

expectancy, stated that Nestle Nigeria 

PLC had a target of helping 50 million 

children worldwide to eat healthy and 

nutritious meals by the year 2030. 

More professional skills for accountants as employers look beyond ethics 


Accountants under the aegis 

of Association of Chartered 

Certified Accountants 

(ACCA) have decided to 

scale up their professional offering by 

rethinking their qualification requirements 

in response to the demands of 

employers. 

More skills are now needed 

for them to be certified ready for 

employment. Increasingly, employers 

of labour are demanding 

much more from the accountants, 

insisting that what they are offering 

at the moment will no longer 

be enough going into the future, 

especially with the challenging 

work environment, meaning that 

the accountants need to equip 

themselves with the tools to overcome 

those challenges. 

ACCA, a global organisation in 

over 100 countries of the world, is 

always innovating and equipping its 

members with relevant and modern 

skills that place them in good stead to 

compete and excel in a challenging 

business and professional environment 

such as Nigeria. 

In response to the new demands 

from employers, the association 

recently launched a new module 

known as Ethics and Professional 

Skills Module (EPSM). “The main 

purpose of launching this module is 

for us to respond to our employers 

who are telling us that our members 

need more than ethics; that 

they need a whole range of skills 

wrapped around the qualification 

they have; the employers are saying 

Expert tasks FG to invest more in education 

SIKIRAT SHEHU, Ilorin 

Chris Imafidon, a renowned 

Consultant to Presidents, 

European and America 

Governments, and Oxford 

professor has charged Nigerian government 

to invest more in education, 

go for universal genius programme 

or talent development for individual 

entrepreneurship. 

According to Imafidon, ‘‘if you 

invest in education, you are smart. In 

Nigeria we spend more money on defence 

than the education sector, if we 

fail to spend more money to educate 

our children; it will bounce back at us. 

We cannot defend an empty house, 

a dilapidated house and leave our 

children and the most valuable asset 

we have which is the brain desolate. 

In fact, I would like to have a private 

discussion with the president and the 

senate president.” 

The chair and founder, Excellence 

in Education Programme (Oxford 

,United Kigdom) spoke in Ilorin, 

Kwara State capital while delivering 

the 33rd convocation lecture of the 

University of Ilorin titled ‘‘The Genius 

in You: New Tools, Techniques and 

Technology for Developing Individual 

and Institutional Greatness’’ 

the first ever he had delivered on any 

Africa soil. 

to us that, going into the future, it is 

not going to be enough to have ethics 

but professional skills”, explained 

Jonathan Mbewe, ACCA’s Head of 

Education and Development in 

Sub-Saharan Africa, who spoke at 

the EPSM launch in Lagos. 

Continuing, he said, “what we 

have done is to tell our members that, 

over and above ethics, if you want 

to do business, you also need some 

professional skills. All these years, we 

have been talking about ethics but 

from the end of October 2017, we will 

be telling our members more about 

professional skills that will help them 

to perform their job well”. 

Mbewe added that the launching 

of EPSM is also the best way for the 

association to equip its members 

with sufficient ethics and skills in a 

way that will help them in their career. 

Imafidon who argued that if 

education sector in Nigeria is receiving 

adequate facilities and 

infrastructure, the country will 

improve and produce better future 

leaders, recommended that, “let us 

go for universal genius programme 

or talent development for individual 

entrepreneurship or immediate job 

market and shut down the paper 

mills that are mischievously called 

tertiary institutions as graduate 

unemployment is an oxymoron. We 

cannot have paper factories and call 

them Universities.’’ 

“If Nigeria failed to invest more 

in education, our children will come 

after us when we are old,” he warns 

Edusko hosts school leaders at 

business of education summit 


Edusko, a leading edutech 

company, hosted hundreds of 

school leaders across Nigeria 

in its maiden edition of the 

Business of Education summit Oct. 12. 

The event had various thought and 

business leaders who shared their 

wealth of experience with the school 

leaders on how they could improve 

on school outcomes through inspiring 

leadership. 

In his welcoming address, the 

convener of the summit Jide Ayegbusi 

reiterated Edusko’s commitment 

to impacting the Nigerian education 

sector through programmes and 

initiatives that can help its partners 

manage their schools better as well 

as help parents who regularly use 

Edusko’s online platform to find 

good schools, make better choices 

for their children. 

“Some have asked us why this event 

is free for the participants. Our simple 

answer is the best things in life are free. 

This is our own little way of impacting 

the education sector and key stakeholders 

in it. Together, we can make 

the education sector and system great 

again,” said Ayegbusi. 

Chris Ogbechie, keynote speaker 

and member of faculty at the Pan- 

Atlantic University, Lagos, told the 

audience that today’s parents take 

a closer look at the quality of school 

leaders before making school choices, 

emphasising the need for school owners 

to set high expectations. 

Ogbechie said, “as proprietors of 

schools you have to set high expectations. 

You must refuse to accept a 

low-aspirational mindset for your 

students just because of the state of 

the country and the complex issues 

we currently face. Schools should 

develop systems where teachers are 

supported and challenged to search 

for more effective ways of enabling 

all students to learn.” 

Similarly, Lolade Adewuyi, founder, 

CampsBay Media shared the importance 

of schools increasing sports 

participation to grow the leadership 

potentials of their students while also 

helping to develop the sports business 

ecosystem. 

“Engaged students mean fewer agitations 

and unruly behaviour. Active 

students mean stronger bodies and 

less time spent in the sick bay. More 

sport means more business for all,” 

Adewuyi said. 

In the panel discussion, Lanre 

Olusola (The Catalyst) mentioned 

why school leaders should change 

with the changing world. “Everything 

is changing, teachers, therefore, have 

to change the dynamics of how they 

teach”, he said. Olusola went further to 

say that parents ought to complement 

the work teachers are doing at home. 

Stephen Onyekwelu 

Content producer 

Fifen Eyemisanre Famous 

Graphics 

For comments and 

contribution write to: 

stephen.onyekwelu@ 

businessdayonline.com


Isaac Osae-Brown 

Special education 

administrators and 

support providers 

spend a great deal 

of time and energy 

working with their students 

but a major factor of the 

success of these students in 

school is the support and 

involvement of their parents. 

Parents need practical tips 

about how to interact with 

their children at home. As an 

education Specialist in the 

field of special education, 

I will suggest the following 

techniques/tips to parents of 

children with disabilities to 

facilitate the process of home 

work and minimize frustration 

and anger. 

Set up a homework schedule: 

Children with disabilities 

may decide to do their 

homework after school or after 

dinner. Encourage the child 

to make a personal choice of 

study time preference and 

when the time is determined, 

the schedule should be adhered 

to as much as possible. 

Ensure that during this time, 

no interruptions are allowed, 

such as phone calls, television 

and tech games. 

Be a role model for learning: 

Parents are their children’s 

first teachers - exploring nature, 

reading together, cooking 

together, and counting 

businessday 

EDUCATION 

Focus On Special Education: Dealing with 

parents of children with disabilities 

an entire class homework 

assignment for their children. 

The result may be very 

destructive. Children with 

disabilities tend to feel inadequate 

when parents finish 

their homework. They may 

feel a sense of failure and inadequacy 

because they can 

never hope to do the homework 

as well as their parents 

can. Research reveals that 

this can foster increased 

dependency and feelings of 

helplessness on the part of 

the children. 

Connect what your child 

learns to the world: Find ageappropriate 

ways to help your 

older child connect his school 

learning to world events. Start 

by asking questions. For example, 

ask a fifth grader if she 

knows about a recent event, 

and what’s she heard. 

Help your child take charge 

of his learning: “We want to 

keep children in charge of 

their learning and become responsible 

for it. We want them 

to be responsible for their 

successes and failures, show 

them how engaging learning 

is all about. 

Keep TV to a minimum: 

Parents can shape how TV 

affects their children by setting 

limits on how much they 

watch and what they watch by 

talking to them through positive 

modeling. For example: 

• Set rules on how 

much TV they can watch. 

Recommend no more than 

1-2 hours a day of quality programming. 

• Model good TV behavior! 

Watch more educational 

programs and less Nollywood 

or Hollywood movtogether. 

Through guidance 

and reminders, help your 

children organize their time 

and support their desires to 

learn new things in and out 

of school. 

Pay attention to what your 

child loves: One of the most 

important things a parent can 

do is notice the children. Are 

they interested in computer 

technology or shy to communicate? 

Find out what interests 

their interest are and help him 

explore it. 

Practice what your child 

learns at school: On a daily 

basis, I encourage parents to 

go over what their children are 

learning in a non-pressured 

way and to practice what they 

may need extra help with. 

Set aside time to read together: 

Read aloud regularly 

by exposing them to textbook 

chapters on DVDs and 

CDs. Research reveals that the 

more sensory input children 

receive, the greater the chance 

they will retain information. 

If your child is a reluctant 

reader, reading aloud will expose 

him to the structure and 

vocabulary of good literature 

and get him interested in 

reading more. 

Connect what your child 

learns to everyday life: Make 

learning part of your child’s 

everyday experience, especially 

when it comes out of 

your child’s natural questions. 

When you cook together, 

do measuring math. When 

you drive in the car, count 

license plates and talk about 

the states. 

Avoid finishing class assignments 

for your child: 

Some parents will complete 

Two finalists emerge from Rivers state 

for 2017 Cowbellpedia Competition 

The 2017 Cowbellpedia 

Secondary 

School Mathematics 

TV Quiz Show 

sponsored by Cowbell, the 

flagship brand from Promasidor 

Nigeria Limited, 

approached a crucial bend 

recently when two students 

from Graceland International 

School, Port Harcourt, 

Rivers State cruised into the 

final stage. 

In the Junior category, 

Osasere Egharevba and 

Jessey Uche-Nwichi pushed 

off the stiff challenge from 

Chukelu Egboga of Loyola 

Jesuit College, Abuja; Ibrahim 

Jajere of Nigerian Tulip 

International College, 

Damaturu, Yobe State; Anita 

Alabi of Gloryland Secondary 

School, Igarra, Edo State 

and Tamunokuro Braide 

of Graceland International 

School, Port Harcourt, Rivers 

State. 

The 13-year-old Egharevba, 

who is participating in 

the competition for the first 

time, was very excited getting 

to the final and prayed 

for more grace and speed to 

overcome challenges in the 

final battle. “I feel very happy 

get to the final. I am grateful 

to God, my parents and my 

teacher for their support and 

guidance. Now I will pray 

more and read more. I am 

here for the first time, and 

my expectation is to win the 

ultimate prize,” she said. 

Uche-Nwichi, who scored 

98 per cent in the qualifying 

examination, also expressed 

confidence in his ability to 

excel at the final and win the 

ultimate prize. 

In the Senior category, 

Michael Paul of Excelgrace 

Academy, Gboko, Benue 

State, and Oluwanifise 

ies. Shows with more violent 

or sexual content should be 

viewed when younger children 

are not around. 

• Help them balance 

TV with other activities. Encourage 

them to spend time 

finding and doing other activities 

they enjoy such as: 

reading, music/arts, sports 

and social activities. 

All behavior must have a 

consequence: Appropriate 

behavior should be rewarded 

and negative behavior punished. 

Parents should avoid 

hard punishments because 

this will only confuse children 

and distort their frame 

of reference. For our children 

with disabilities, five minutes 

in a time-out chair or taking 

away a desired item is just as 

good. Rewarding children for 

cleaning their room without 

having been told to do so 

reinforces the continuation of 

that behavior. 

In conclusion, parents 

should be aware that parenting 

is not a popularity contest 

but a responsibility. Following 

these parental guidelines will 

help build a positive relationship 

with your children in 

a world that is soaked with 

indiscipline and deprived 

disposition. 

Isaac Osae-Brown works 

for the Compton Unified 

School District in California, 

as an Education Specialist 

and a beginning Teacher 

Mentor. He is an advocate 

and a speaker for Special 

Education services in the 

United States and abroad. 

www.facebook.com/inclusivemindset 

Onafowokan of The Ambassadors 

College, Ota, Ogun 

State, scaled through to the 

finals. Paul had a perfect 

score in the qualifying examination, 

while Onafowokan 

scored 95 per cent. 

The duo got the better of 

Rukevwe Ugoji of St. Augustine 

College, New Karu, 

Nasarawa State; Plangdi 

Neple of Baptist High School, 

Jos, Plateau State; Blessing 

Olaleye of Reality High 

School, Ilesha, Osun State 

and Oluwatade Akinjide of 

the Learningfield School, 

Satellite Town, Lagos State. 

Onafowokan, who answered 

13 questions in the 

Cowbellpedia 60 Seconds 

of Fame segment, has vowed 

to emulate her school mate, 

Ayooluwa Oguntade, who 

won the Senior Category 

last year. 

The star prize in the Senior 

and Junior categories is 

N1 million each and an allexpense 

paid educational excursion 

outside the country. 

The first and second runnersup 

for each category will go 

home with N750,000 and 

N500,000 respectively. 

Each teacher of the 2017 

champions will be awarded 

N400,000, while those of the 

first and second runners-up 

will receive N300,000 and 

N200,000 respectively. Also, 

the winning schools will be 

rewarded with Mathematics 

textbooks, desktop computers 

and printers. 

The 2017 Cowbellpedia 

Secondary Schools Mathematic 

TV Quiz continues 

this weekend. It will be aired 

to millions of viewers on 

DSTv Africa Magic Family 

Channel, AIT Network and 

other six television stations 

across the country. 

C002D5556 

BUSINESS DAY 23 

human capital 

15 ways to improve employee 

productivity – Part 2 

Orji Udemezue 

Poorly trained employees 

lack the power to 

out-do competitors 

even in the face of 

economic uncertainties. 

Developing employee capacity 

must involve a combination 

of various activities and 

practices, including: regular 

team or in-house training 

and reviews; external training 

interventions (local and 

international); sponsoring 

employees to attend seminars, 

conferences, workshops, and 

networking events; secondments 

to other companies; 

granting study or sabbatical 

leaves; encouraging professional 

certifications; and volunteering 

employees for training 

and education activities; 

among a host others. 

When you fail to develop 

your employees, you have no 

moral obligation to demand 

the best from them. 

5. Deploy Appropriately: 

There is nothing as unproductive 

as deploying employees to 

roles or functions where their 

major strengths cannot be utilized. 

Everyone has strengths 

and weaknesses, and most 

people perform better in roles 

where their strengths are most 

easily deployed to get things 

done. 

For proper deployment of 

employees, business leaders 

must ensure adequate interactions 

with prospective and 

existing employees in order 

to better understand their core 

talents and competencies as 

well as their key development 

areas. 

6. Reward Innovatively: In 

order to drive employee engagement 

through adequate 

motivation, organizations 

must be innovative with their 

reward systems. While paying 

competitive salaries and allowances 

remain a very critical 

aspect of good employee 

motivation, smart companies 

must adopt other uncommon 

but effective reward systems 

depending on the culture, 

personality types and the prevailing 

needs of their people. 

Performance-driven bonuses; 

surprise bonuses; allowing 

days off work; sponsoring 

family trips and holidays; 

having lunch or dinner with 

the CEO; appreciation letters; 

awards and recognitions; as 

well as sponsorship to foreign 

seminars, workshops 

and trainings are all smart 

new ways to reward today’s 

employees and enhance productivity. 

7. Create A Friendly 

Work Environment: People 

generally spend most of their 

active days and hours at the 

workplace. So, fostering a work 

environment where people 

feel happy, accepted, safe, 

inspired and positively challenged 

helps energize the mind 

and the heart of employees, 

and hence, enhance productivity. 

Teamwork and team 

spirit are important elements 

of a friendly work environment. 

Team leaders must ensure 

everyone does real work and 

are held mutually accountable 

for the collective work product. 

They must also ensure fair 

and reasonable distribution of 

resources in the team. 

Team building activities 

must include ways to make 

employees bond effectively as 

well as some family events that 

enable employees’ families 

get together in a fun environment. 

This promotes friendliness 

amongst team members, 

reduce conflicts, minimize 

feelings of vulnerability, and 

empower employees to be the 

best they can be at work. 

8. Empower Them: Giving 

employees the authority 

or some level of freedom to 

take certain decisions or actions 

without management 

intervention could make all 

the difference in promoting 

operational leadership and 

service excellence – especially 

in service organizations like 

hotels, hospitals, financial 

institutions, restaurants, telecom 

companies, etc. This does 

not only reduce unnecessary 

bureaucracies, redundancies, 

and delays but also improves 

the ability to recover bad service 

situations – allowing responsive 

approach in dealing 

with customer issues. 

Empowering employees is, 

however, not a decision that 

must be taken carelessly. It 

requires trust, confidence 

and belief. It must follow a 

proper selection, orientation, 

training/coaching, and 

motivation of employees. An 

engaged employee who is 

empowered is a driving force 

for progress and prosperity of 

any organization. 

9. Encourage Annual 

Leaves: Many companies 

make it difficult for employees 

to go on their annual leaves, 

and, in fact, sometimes pay 

them allowances in lieu of their 

annual leave days. This is not 

only a killer of productivity but 

also a poor risk management 

practice in organizations. 

Human beings are not machines; 

even machines take 

time off for maintenance! 

Working for a long period 

without leave days or rest is 

really a sure way to encourage 

mediocrity and ineffectiveness 

– stifling innovation and 

creativity. The human brain 

needs some recreation and 

relaxing in order to produce 

great ideas and solutions. 

Orji Udemezue is the CEO of 

Flame Academy & Consulting 

Limited.



C002D5556 

THE BIG HEART DIGEST 

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

Diversification: Okowa, top aides, want 

Deltans to take to agric option 

MERCY ENOCH 

Introduction: 

Governor Ifeanyi 

Okowa of Delta 

State seems deep 

in belief that agriculture, 

specially 

in the area of commercial agric 

venture, is the way to go in the 

new quest for diversification of 

the economy. He has particularly 

said that to boost farming, 

there must be processing companies 

to buy up the produce 

and attract more youths into 

farming. 

Whenever opportunity 

presents itself, the commissioners 

in the state would take 

their leader’s agric message 

further; how to make agric the 

mainstay of the state economy 

beyond oil. 

The Okowa-led administration 

has embarked on a lot of 

programmes (both those he 

initiated and those adopted 

from Fg schemes) to achieve 

this lofty dream. Thus, thousands 

of Deltans including the 

youths are keying into the programmes 

to better their lives. 

Some of the aides that the 

Big Heart Digest ran into in 

recent occasions talking about 

agric as the new venture avenue 

include the Commissioner 

for Information, Patrick Ukah; 

Commissioner of Ministry of 

Agriculture, Austin Chikezie; 

and the Executive Secretary, 

Delta State Micro, Small and 

Medium Enterprises Development 

Agency (DEMSMA). 

Commissioner of Information: 

Patrick Ukah 

Patrick Ukah, during an inspection 

of tomato harvest day 

of a company at the premises of 

the Delta Urban Water Board, 

along Okpanam Road, Asaba 

was shocked to find what some 

Deltans have done with the 

product. A tomato farmer, Alex 

Okunbor, CEO of PeaceAlex 

Governor Okowa 

Patrick Ukah for Information 

Enterprises, had revealed that 

the hybrid tomato which is 

from India, takes just 75 days to 

nurse, transplant and harvest, 

and takes 19 days before it goes 

bad. Okunbor had displayed a 

bucket-full of the tomatoes and 

handed it over as sample to the 

top government officials that 

were present. 

Impressed by the discovery 

on the hybrid tomato, Ukah 

said though he is a public servant, 

he has been encouraged 

to go into farming of tomatoes. 

He therefore urged fellow 

Deltans to go into farming, 

Austin Chikezie 

Shimite Belo of DEMSMA 

especially tomato cultivation. 

The land to farm on is not a 

problem because land is available, 

said Ukah. 

He reiterated the state government’s 

determination to 

partner with the private sector 

to develop the agricultural potentials 

of the state. According 

to him, the state government 

has taken agriculture as top priority 

to diversify the economy 

of the state. 

Commissioner of Agric, 

Austin Chikezie 

Contributing, Austin 

Chikezie said the state government 

would partner with 

Okunbor to share in his wealth 

of experience in tomato cultivation. 

He stressed that it 

was a sure way of empowering 

the youths. He said that the 

company would help in training 

staff of his ministry in the 

best process of hybrid tomato 

farming. 

At another occasion, 

Chikezie urged youths to key 

into the SMART agenda of the 

state government by going 

into fish farming to boost their 

income and improve on their 

standard of living. The state 

government had segmented 

the CBn Anchor Borrowers’ 

Programme (ABP) into public 

and private sectors. 

He said that the state government 

in its determination 

to revive the agricultural sector 

has flagged-off the sale of 

fish in the CBN/ABP at Ugbisi, 

Udu Local Government Area 

of the state. “The production 

scheme had to be segmented 

to avoid glut in the supply of 

the commodity at harvest as 

the off-takers intend to process 

the harvested fish and brand it 

‘Delta Fish”. 

On the private Anchor, 682 

farmers were engaged across 

the state under the Mega Fish 

Farmers Multipurpose Cooperative 

Union which had eight off 

takers in the private window. 

He added that the first phase 

would generate 2, 000 Metric 

Ton of fish. 

Chairman of the Mega 

Farmers Union, Christopher 

Egwuyenga, explained that 682 

farmers had turned out 2,046 

tons which was equivalent to 

046.000kg of fish, saying that 

over 200 workers both skilled 

and unskilled have been generated 

in line with the SMART 

agenda of the State Government. 

Executive Secretary of the 

DEMSMA, Shimite Bello 

Shimite Belo says more 

people have taken to farming 

under the Okowa administration. 

Hear her: “There is a lot 

more action in farming especially 

in the area of cassava. 

Stems are available for people 

to go and farm with Vitamin 

A. Even people that you never 

have seen in the farm are going 

there to see that some work is 

done 

“As you can see, we now 

have to do with finding market 

outlets for products. So, at 

the end of Okowa’s tenure, we 

will see production in cassava, 

especially cassava to starch 

and garri, plantain, improved 

processing of oil, and in rice. 

These are the things I know 

Okowa would leave behind as 

legacy because that’s where he 

is putting his money in. 

“We have people growing 

a lot of things but where a lot 

of money we have given out is 

going to. We give out money 

for rice threshing equipment 

etc. Sometimes, we have not 

given out micro-credit; we 

have given out small loans up 

to N23 million for people in 

processing. Since more people 

are now farming, we now need 

to have processing equipment. 

So, people will see rice, garri 

revolution in Okowa’s tenure. 

“I’m calling on Deltans to 

go into the value-chain of agriculture, 

not just agriculture. 

There is packaging, branding, 

lebelling, processing, production, 

marketing, negotiating, 

etc. Some, you would not see 

soil and insect face to face but 

you’re also needed because 

now we have to bag our own 

rice because we are not importing. 

So, we have to go into designing, 

licensing and tagging. 

So while I’m joining in saying 

go back to agriculture, I’m not 

joining everybody to say go 

onto to the farm, because there 

are some places in agriculture 

that people are not touching in 

the state and I just want them 

to explore the value-chain 

not just production and then 

processing. 

“As for my agency, as far 

as we have enough funds, we 

will do the best we can. They 

said that we are coming out of 

recession. We believe that that 

is the case. But we don’t have 

money like before. With the 

little we have, we will support 

the people we can support. We 

will do the best we can as long 

as our money can afford”. 

Editorial coordinator’s corner: 

Utilise oil revenue for diversification = Okowa 

IGNATIUS CHUKWU 

Most persons 

are talking 

about diversification 

but if 

they are told what it takes 

to diversify a distressed 

economy, they would flee. 

It would either take heavy 

and steady borrowing over 

a period of at least 10 years 

(ensuring that every kobo 

is invested) or to dedicate 

a section of the nation’s 

income to steady investment 

in the new agreed 

sector, such as agric. This 

second option could be 

immediately painful. Most 

Nigerians are used to good 

life, and this good life 

is sponsored by oil. Gov 

Ifeanyi Okowa has voted 

for the second. He wants 

Nigeria to put aside crude 

oil revenues to fund agric 

over a period of time. By 

this, Nigerians would have 

to tight their belts for about 

10 years, but the result 

would shock the world. 

Speaking at a dinner he 

hosted for the Presidential 

Economic Diversification 

Initiative Team Visiting 

the state, Governor Okowa 

said that the fall in oil 

price was a wake-up call 

to the leaders to spend the 

dwindling oil revenue on 

the diversification of the 

national economy so as to 

provide employment for 

the youths of the country. 

He said; “I wish to appreciate 

the Minister For 

Niger Delta and leader of 

the team for bringing the 

team to Delta State. Diversification 

of our economy 

is the biggest challenges 

facing our nation. For a 

long time we prided ourselves 

on our oil economy, 

but we need to diversify 

as the oil economy was 

not inclusive, it did not 

provide the much-needed 

employment for all. Recession 

with attendant fall in 

oil price in the last three 

years is a wake up call that 

we need to sit back and 

look into ways to spend 

the oil money to diversify 

the economy. We need to 

look at ways to provide 

employment opportunity 

for our youths. We are 

presently on the right path 

to fix our economy through 

diversification especially 

in agro-business”. 

In this, he says peace 

is first ingredient. He also 

wants attitudinal change 

among the youths.


BDTECH 

In association with 

BUSINESS DAY 

25 

‘Nigerian government needs to draw 

up realistic cyber security policies’ 

The latest cyber security global threat index released by Check Point software technologies limited shows a slight improvement in Nigeria’s cyber security ranking. In this 

interview, Rommy Okonkwo, Country Manager Check Point Software Limited speaks to Jumoke Akiyode Lawanson about the importance of cyber security in organisations 

and government institutions. He also proffers possible solutions to further secure Nigeria’s cyber space from threats and compromise. Excepts. 

Checkpoint recently released 

its latest cyber security 

threat index, what is this all 

about and where does Nigeria 

stand in this index? 

The threat index ranks Nigeria at 13th 

position, which shows improvement 

from August to September 2017, dropping 

four places from its former 16th position 

on the global ranking. If you look 

at the index, you will realise that the top 

three most wanted malware in Nigeria 

today are rooted; which is the large scale 

malvetting used to deliver various malicious 

websites such as payloads which is 

synonymous to accounting firms. They 

are scams, hardware, exploit kits and 

ransomware. The second one is ramnit 

and the third is lucky. Checkpoint is 

dealing with these by creating solutions 

to secure your systems from all these 

malwares and I believe that this is likely 

contributory to Nigeria’s improvement 

in the global threat index ranking. 

Checkpoint is a cyber security 

company that protects over 100,000 

organisations across the world, what 

sector do most of your clients come 

form and which organisations are 

mostly affected by security breaches 

online? 

Checkpoint is actually not limited 

to the number of customers that it currently 

provides security services to, but 

as for today, virtually all the banks are 

being covered by checkpoint solutions. 

Five years ago, we sold to the financial 

services sector in Nigeria secure solutions 

for data protection and we have 

presence in the financial services sector. 

However, we also provide services to 

telecommunications service providers, 

manufacturing services, oil and gas industry, 

insurance companies and a few 

Fintech companies and largely to the 

public sector government, which is actually 

our key focus today. 

Financial institutions in Nigeria 

are cyber security conscious and have 

taken various steps to secure data; 

however, can you say the same for government 

organisations in the country? 

How safe are citizen’s data collected by 

government agencies? 

Any government that is not aware 

that the world has gone beyond the physical 

and is now digital and does not have 

a plan in place as to how it will protect its 

key infrastructure including its defense, 

ports, electricity and other key revenue 

generating streams is not preparing for 

the future. I am not sure that Nigeria is 

exactly where it should be as a country 

Rommy Okonkwo, Country Manager, Check Point Software Limited. 

but I know that there are plans in place, 

the awareness for security keeps growing 

and that is the first step. We keep hearing 

of government agencies bracing up to 

cyber security challenges and they try to 

put things in place to make sure that the 

environment is protected because this is 

the only way the government agencies, 

ministries and parastatals can function 

effectively. You will agree with me that 

when an organisation is down, the cost 

of bringing it back up is very high and the 

down time negatively impacts the business 

which also impacts the revenue. 

Would you suggest that security processes 

be put in place first before the enforcing 

the need for biometric data such 

as those collected for BVN, SIM card registration, 

PVC, National driver’s license 

etc which are yet to be harmonized and 

may not be secure? 

We need to first draw up what the security 

policies should be for individuals 

and then for government and agencies. 

Government needs to first decide what 

our security policies should be across 

all board; these processes for security 

should be readily available before we 

can start thinking of how to implement 

them. For instance, you work in an organisation, 

you may not be able to appreciate 

what security your organisation 

has put in place if you don’t understand 

what the organisation’s security policies 

are. You should be able to know that 

certain documents should not be within 

the reach of certain people; likewise, the 

government should draw out its security 

policies of all its sectors and institutions 

before going ahead to implement data 

collection. The second thing is infrastructure. 

You cannot talk of a functional 

security without talking about the infrastructure 

which it sits on top of. Have the 

Nigerian government put the necessary 

infrastructure in place today? Regardless 

of this, we can say that the different 

ministries are putting in a lot of effort to 

make sure that they are productive by 

putting in the right security but as far as 

I am concerned, I think there is still a lot 

of work to be done with regard to cyber 

security across all the government agencies 

Ḋo you think that the federal government 

would be more active in securing 

Nigeria’s cyber space when our 

critical national infrastructure such as 

electricity is fully digitized? 

You and I know that the world is a 

global village and that is basically why 

we can sit in Nigeria today and do an 

online placement in the United States 

of America, unlike before when you had 

to fly there to be physically present. A 

few years ago, when predictions where 

made about how connected the world 

would become, many of us though it was 

a joke but look at where we stand today. 

Everybody talks about internet of things 

(IoT) and this is where the world is going 

today. Everything is virtually going to be 

done through the internet because what 

drives this online craze is the internet. So 

with all that I am saying now, the Nigerian 

government would only shooting 

itself on the foot if it chooses to ignore 

what is going on in the world. We need 

focus. If it is the focus of the government 

to be efficient in her decision making 

and productive in her dealings across all 

boards, then the government must make 

sure that her key infrastructures are connected 

in real time and fully digitized 

because this is what the west has done 

many years ago. We cannot successfully 

trade internationally if we are not connected 

in real time and therefore, productivity 

and efficiency is being affected. 

What significant changes are 

checkpoint cyber security solutions 

making in Nigeria’s financial services 

sector since it was introduced five 

years ago? 

What we have done over the years is 

to create awareness and let the industry 

be aware of what is happening. Some of 

the things that we are talking about today 

are things that have been in existence for 

a couple of years back in the West. Five 

years ago, the awareness for cyber security 

was very low, but what we did by 

coming in was to prepare the ground for 

what we have seen from global trends. 

Although the banks will never give figures 

as to how much they have lost as a 

result of a cyber attack so as not to scare 

their customers. So some of them, even 

when their systems have been breached 

or compromised, they will not come 

out publicly declare what they have lost. 

However, I know that banks get compromised 

and hacked repeatedly, almost on 

a daily basis. What they do is to be reactive; 

some of them don’t act until they 

are affected, but that should not be the 

mindset of someone who wants to be 

efficient and productive in his dealings. 

What we preach today is pro-activitybe 

there before anybody and put your 

house in order before the cyber criminals 

get to your place. The key impact of 

our solutions is that we have drastically 

reduced the rampant malware across 

most of these institutions. Our solution 

basically makes sure that the malware 

in most cases are completely eliminated. 

On a scale of one to 10, I would say our 

solutions stand at eight. 

What are the challenges faced in 

pushing cyber security solutions to enterprises 

and government agencies in 

Nigeria and Africa as a whole? 

One of our biggest problems is awareness. 

Security awareness and consciousness 

in Africa is not where we want it to 

be. What I have also seen over the years 

as a challenge is trust. Security is not like 

a server or a physical object, so when 

you mention it to the management, they 

cannot actually see what you’re charging 

them for. So some people find it difficult 

to buy the idea of investing in security. 

Another major challenge in Nigeria is 

the non-enforcement of the cybercrime 

act. There have been no successful conviction 

of cyber criminals and some have 

even argued that the punishment which 

is often a fine is not grave enough. The 

question some businesses have asked 

is; ‘we have run this business for so long 

and nothing happened, how come you 

are telling us now that we have to spend 

this much to put our company in order’? 

But we have also had instances where 

people come to us and say that they need 

help with securing their digital space. 

Have you ever thought of how much you 

would lose if your company is hit by Ransomware 

attack? The whole world was 

shaken with the last Wannacry attack 

and the effect was felt worldwide. We are 

going to see more of that because the cyber 

criminals will keep innovating and it 

is only the people that are not ready that 

will fall victim. The government needs to 

take authority of security challenges. 

Do you think high cost is a major 

reason for low adoption of cyber security 

solutions in Nigeria? 

People who know the value of cyber 

security would go for it to save them the 

stress in the long run. The excuse of high 

cost can be explained as being penny 

wise and pound foolish because buying 

something that costs $100 and would last 

for 10 years is better than buying something 

for $5 when you know it would only 

last for six months. What drives organisations 

to invest in security is the value and 

the mindset of the people that of the people. 

Because the day you are breached, 

the integrity of your organisation is also 

at stake, apart from the amount of money, 

time and critical data lost. 

Has it been easy for checkpoint to 

play in Nigeria’s IT industry since it 

was established 5 years ago; especially 

since most organisations are already 

comfortable with purchasing older cyber 

security solutions? 

Checkpoint Nigeria understands 

the local market. You cannot know 

the American market more than 

Americans themselves, in the same 

way; you cannot know the Nigerian 

market more than Nigerians themselves. 

We know that there are bottlenecks 

in this industry, but if you 

are running a particular business it 

always helps to get someone indigenous, 

experienced and someone who 

has the ability to network. Honestly 

speaking, it has not been easy playing 

in this market but the essential 

thing is to continue to device strategic 

means to make sure that the business 

runs smoothly because the challenges 

will always be there.

26 

BUSINESS DAY Tuesday 31 October 2017 

BDTECH 

E-mail: technologybusiness@businessday.com 

Report predicts 18 billion 

connected IoT devices by 2022 

Jumoke Akiyode Lawanson 

The latest Ericsson 

Mobility 

report predicts 

that Internet of 

Things (IoT) devices 

will surpass mobile 

phones as the largest category 

of connected devices 

starting from as early as 

2018 and that there will be 

about 18 billion connected 

IoT devices in 2022. 

This massive uptake, the 

company has said, would 

require a different approach 

to network planning, design, 

operations and capabilities 

than traditional mobile 

broadband networks. 

To support operators 

in this expected massive 

Internet of everything will spur SME growth, economic development- Experts 


& Angel James 

Information, Communication, 

Technology 

(ICT) experts say that 

as the world has become 

a global village through 

internet connection of everything 

(IOE), Nigeria can 

further tap into the unexplored 

potential of its ICT 

sector to grow small and 

medium scale enterprises 

(SMEs), which will result 

in the continuous development 

of the nation. 

Giving a speech during 

the Lagos Chamber of 

Commerce and Industry 

(LCCI), ICT Group annual 

summit held in Lagos on 

Wednesday October 25, 

2017, Nike Akande, President, 

Lagos Commerce 

and Industry said that; 

“there is a need for business 

and investment elements 

that strengthen the 

private sector to catch the 

increased opportunities in 

ICT. 

Akande said that to 

make it possibly for opportunities 

to be utilised, “the 

regulatory environment 

must also be sensitive to 

the ideals of a conducive 

business environment that 

can attract private sector 

participation and foreign 

direct investments.” 

According to her, “the 

information and communication 

sector has become 

a catalyst for boosting 

business operations in 

Nigeria and beyond. Electronic 

transactions have 

IoT use cases, Ericsson has 

packaged a broad range 

of radio network services 

together to enable operators 

to smoothly introduce 

Internet of Things applications 

on their networks. 

This includes the introduction 

of new IoT software 

features such as Voice over 

LTE support for Cat-M1 and 

automated machine learning 

to Ericsson’s Network 

Operations Centers (NOC). 

Peter Laurin, Head of 

Business Area Managed 

Services, Ericsson, says: 

“Introducing new IoT software 

features, such as Voice 

over LTE (VoLTE) support 

for Cat-M1 will enable operators 

to explore new use 

cases in which it can be advantageous 

for IoT devices 

made it possible to achieve 

high quality and speed in 

service delivery, especially 

in areas like travel, e-commerce 

and e-government. 

We reiterate the need 

for policies that encourage 

and support innovation 

software development and 

protection of intellectual 

property. This is necessary 

for achieving useful 

collaborations with other 

technologically advanced 

countries and attracting 

investments into the ICT 

sector,” Akande added. 

Recent statistics form 

the International Telecommunications 

Union (ITU), 

shows that out of 940 milto 

support voice services, 

opening up opportunities 

to expand enterprise services 

to areas such as security 

alarm panels, remote firstaid 

kits, wearables, digital 

locks, disposable security 

garments, and other types 

of IoT-enabled applications 

and services.” 

Laurin also adds that 

“introducing automated 

machine learning to its Network 

Operations Centers 

(NOCs) will help operators 

to manage delivery cost and 

take a proactive approach to 

event and incident management. 

In a trial, 80 percent 

of all incidents were identified 

by machine learning 

only with no human intervention 

– and the root cause 

lion people living in the 

least developed countries 

– mostly African countries, 

only 89 million people use 

the internet. This translates 

to a 9.5percent penetration 

rate. 

However, Nigeria has 

about 145million mobile 

subscribers, with a present 

penetration rate of about 

55percent. 

Experts say that the statistics 

in Nigeria’s telecom 

sector are a clear call for 

the need to identify opportunities 

for collaboration, 

sharing best practices and 

exploring inclusive technologies 

to drive Nigeria 

into a truly connected 

was identified correctly in 

77 percent of cases.” 

Heterogeneous IoT networks 

and diverse use cases 

with varying needs will require 

a different approach 

to network planning and 

design. To support this, Ericsson 

is introducing scenario 

assessment, network 

modelling, design development, 

and developmental 

appraisal for massive IoT 

networks. 

Jamie Moss, Principal 

Analyst, Consumer Technology 

and IoT at Ovum, 

says: “Operators need partners 

that can help them to 

introduce new technologies 

smoothly and quickly. This 

is especially true in the case 

of LTE-M and Narrow Band 

global community. 

According to Manon 

Chignon, Managing Director, 

RCI Document Solutions; 

“The Internet of 

everything can improve 

Africa’s productivity and 

efficiency, improve business 

performance, impact 

sustainability and increase 

profit if workers maximise 

the use of technology to 

achieve productivity.” 

Also speaking at the 

summit, Zakari Usman, 

Chairman of the ICT 

Group said; “the future of 

business and commercial 

activities all over the world 

lies in the hands of SMEs. 

The enterprise that 

IoT (NB-IoT). As enhancements 

to LTE, they appear 

to represent the operators’ 

core competency. But 

LTE-M and NB-IoT will be 

used, and will be required 

to perform, in ways that 

are completely new. Their 

rollout, the handling of the 

traffic they generate and the 

management of the services 

they exist to enable require 

network services that offer a 

comprehensive portfolio of 

abilities. Machine learning 

and artificial intelligence 

are not just buzzwords, but 

are vital and exciting tools 

being employed by Ericsson 

for use within a network to 

help operators manage the 

many new devices they will 

need to serve in the future.” 

reaches out to us in our 

time of basic needs and 

necessities are the engine 

room of our economy. 

They need to be enabled 

because the most basic 

transformation in the 

works of ICT today is the 

revolution of the internet 

that now affects every aspect 

of our Lives,” Usman 

said. 

According to him, “the 

revolution of IOE is shaping 

different aspects of 

our lives; from healthcare 

delivery, national and 

neighbourhood security, 

e-commerce to learning 

and every other aspect of 

our lives.” 

StartZone partners 

Bramo digi to host 

the Social Good 

Summit 


StartZone, an indigenous 

innovation hub, focused 

on solving Africa’s biggest 

challenges by supporting 

the digital ecosystem 

partnered with Bramo digi 

to host the 2017 Social Good 

Summit. 

The Social Good Summit 

examines the impact of 

technology and new media on 

social good initiatives around 

the world and is held annually 

during United Nations General 

Assembly (UNGA) Week. 

The Summit which unites 

a dynamic community of 

global leaders and grassroots 

activists to discuss solutions 

for the greatest challenges 

of our time had at this year’s 

session; entrepreneurs and 

social innovators discussing 

how social media and (new) 

technologies can be used 

to achieve the Sustainable 

Development Goal. 

The panel session consisted 

of Victoria Ibiwoye from 

the United Nations and Dayo 

Samuel who is the Lead Consultant 

for ‘Audacity to Lead’. 

The panellists spoke about 

the way technology is assisting 

in the achievement of the 

millennium development 

goals, lots of success stories 

were shared and the audience 

was given actionable advice. 

The social good summit 

was one of the events that 

StartZone hosted during 

the Lagos StartUp Week. 

Other events included the 

Girl Meets Tech; an event 

designed to inspire and 

empower young women in 

technology and the android 

community; an event for 

android programmers around 

Nigeria. 

StartZone also hosted the 

for loop community event 

which is the largest community 

of software developers in 

sub Saharan Africa; the event 

helps showcase best practices 

in software development. 

According to StartZone, its 

mission is to “build Africa one 

start-up at a time, this also 

extends to building communities 

of founders, designers 

and venture capitalists.” 

The Social Good Summit 

had over one hundred delegates 

comprising of entrepreneurs, 

technology experts and 

enthusiasts and was held at 

the mini conference hall of the 

Zone center in Gbagada, Lagos. 

StartZone has been assisting 

the development of communities 

of skill, knowledge 

and putting in place the right 

environment to build communities 

of capital in Nigeria.

Tuesday 

Tuesday 

31 


October 

October 



27 

BUSINESS DAY 

Energy Report 

C002D5556 

BUSINESS DAY 

Oil Oil & Gas Power Renewables Environment 

Non-electric cooling, heating systems seen helping industries lower power cost 

ISAAC ANYAOGU 

Two companies, 

3Tech Corporate 

Limited of Hong 

Kong manufacturers 

of diesel 

generators and accessories 

with the brand name Lion- 

Rock and ASB Valiant Ltd, a 

Nigerian company are driving 

efforts to mainstream cogeneration 

and trigeneration 

technology which are forms 

of combined heat and power 

(CHP) in Nigeria. 

With Africa’s largest economy’s 

abysmal power supply 

situation, large business are 

relying on self-power generation 

through diesel powered 

generators but are not able 

to ensure energy efficiency, 

pollutes the environment 

with their operations and 

raises production costs by 

about 40 per cent according 

to manufacturers. 

“The technology basically 

means that instead of 

having to rely on electricity 

for air-conditioning, there 

are solutions especially for 

industries, hotels and office 

complexes that run these 

L-R: King Cheng, executive director, 3Tech, Corporate Limited, Hillman Ren, International customer manager, 

Broad Air Conditioning, Leo Kiu, MD, 3Tech Corporate Limited; Ayodele Ikumapayi, president/CEO, ASB 

Valiant Company Limited: Ares Siu, director business development, 3Tech Corporate Limited; Joden Shu, 

business manager, LionRock Corporate Nigeria Limited; and Haber Ma, International customer manager, 

Broad Air Conditioning during the Chp Nigeria Forum 2017 held in Abuja. pic by TUNDE ADENIYI 

generators and they also 

have electric chillers, for big 

industrial cooling, what you 

then do is to take the waste 

exhaust from these generators 

or you can use the 

hotwater used to cool them 

to drive another equipment 

called an absorption chiller, 

” said Ayodele Ikumapayi, 

president and CEO of ASB 

Valiant at an exhibition held 

in Abuja on October 26. 

In the combustion of 

fossil fuel, the mechanical 

output is used to turn a generator 

to produce electricity. 

The remaining heat energy 

is normally dissipated in 

the atmosphere to keep the 

combustion engine in operation. 

Recovering waste 

heat for other work is the 

key concept of cogeneration 

while trigeneration provides 

cooling through an absorption 

chiller. 

Ayodele said it is a non 

electric chiller which for instance 

could use about 400 

Kw electric chiller, if a hotel 

load, for example is about 

500 kW, this takes it to 900Kw. 

“Instead of that what you can 

do is use your 900 kW you 

have from either the hot water 

or from the exhaust of the 

generator that you are using, 

you can harvest that and use 

it to drive these non electric 

chiller and that will save you 

the cost of buying fuel by 

almost another 400kW, so 

that’s a huge savings for you,” 

said Ikumapayi. 

The technology is part 

of global energy conservation 

revolution. “We want 

to make industrial operations 

more efficient. We are 

hoping to assist hotels, and 

industries cut operating and 

capital expenditure relating 

to power. It can save a lot 

Resolving finance burden in downstream sector hinge on full deregulation 

of energy cost are reduce 

greenhouse gas emissions,” 

said Aires Siu, business development 

director of 3Tech 

Corporate Ltd. 

The companies said that 

those expected to benefit 

from the technology include 

industries such as food processing 

industries, some 

of the paper mills, which 

normally use a lot of heat, 

typical city, hospitals, hotels 

and commercial office, data 

centres which use a lot of 

conditioner and hot water 

like in hotel for their operation. 

“We have 180m people 

struggling to use 4,000MW 

of electricity and many of 

these industries consume 

the bulk of these power, 

there is nothing wrong if 

they generate their own 

power and then find an 

effective way to maximise 

their generation. 

“Today they are not getting 

enough generation from 

the grid and they are spending 

a lot of money in buying 

diesel. The government is 

cooperative and ministry of 

science of technology is in 

support,” said Ikumapayi. 

KELECHI EWUZIE 

The drive to attract 

the needed finance 

for the downstream 

sector of the oil and 

gas industry in Nigeria can 

only be achieved when the 

entire sector is fully deregulated. 

Experts and industry 

operators have warned. 

They observed that access 

to traditional banking 

facilities remain constrained 

by systemic issues. 

Dolapo Oni, Head, Energy 

Research, Ecobank in his 

presentation at the 11th edition 

of Oil Trading Logistics 

expo in Lagos observed that 

Oil and gas share of loans to 

private sector has risen to 30 

percent as at Dec 2016. 

Oni maintains that to 

resolve the hiccups hindering 

the financing of the 

downstream sector, corporate 

governance is a major 

requirement and government 

must ensure full sector 

deregulation segment as 

these are incentives to turn 

around the sector. 

To him, refinery expenditure 

over the next five years 

alone is over $5bn, adding 

that Oil and Gas is N4.9trn 

($16.04bn), outstanding 

payment to marketers is 

$2bn. 

Adebowale Olujimi, chief 

executive officer, Emadeb 

energy serv. Limited said 

funding strategies in Downstream 

sector are shaped by 

combination of the policy 

direction of the government; 

Nature of transaction and 

corporate objectives of fi- 

nancial institutions. 

Olujimi while making a 

presentation on finance for 

downstream trading and 

infrastructure projects-opportunities 

and challenges 

opine that for oil marketers 

to fully take advantage of the 

opportunities in this sector, 

funding has to be made 

available at a competitive 

rate, preferably at a single 

digit repayable over a longer 

period depending on the 

nature of the transaction. 

According to him, “International 

funding is the 

most competitive option; 

however specialised banks 

locally could also focus on 

such credit facilities in order 

to boost economic development”. 

He observed that among 

the challenges of petroleum 

products distribution and 

retailing in Nigeria include 

high cost of funding and 

other operational expenses; 

price cap by the Petroleum 

Product Pricing Regulatory 

Agency (PPPRA) for 

gasoline which accounts for 

over 65% of total industry 

volume. 

According to him, “The 

low capacity utilisation of 

Nigeria’s state-owned refineries 

and petrochemicals 

plants also increase the cost 

of sourcing products” 

He further observed that 

the sorry state of Petroleum 

Product infrastructure Nationwide 

-deplorable state 

of the road; limited access 

to funding as a result of the 

huge gap suffered by oil 

marketers after devaluation 

thus resulting into non performing 

loans. 

“Bureaucracy and bottlenecks 

in Government agencies 

thus resulting in delays 

and increased cost of doing 

business; Foreign Exchange 

risk attributed to the importation 

of products and 

continuous drop in margins 

thus making it difficult for 

operators to remain in business”, 

he said. 

The Ceo of Emadeb energy 

is of the view that despite 

the challenges, the Oil and 

Gas Industry will continue 

to play a major role in the 

economy, accounting for 

more than 6% of GDP and 

44% of the energy needs of 

the economy. 

He stated that ownership 

of retail outlets and 

other infrastructure in the 

downstream value chain 

will increase margins for 

operators on the long run 

adding that it will also create 

employment opportunities 

thus improving economic 

development. 

Olusola Bello, Team lead, Analysts: Kelechi Ewuzie, Isaac Anyaogu, Graphics: Fifen Famous. Email: energyreport@businessdayonline.com, Tel: +234-8023020011; +234-7037817378; +234-8036534708



C002D5556 

Energy Report 

PIND, MADE put Niger Delta development 

in focus at Nigerian Economic Summit 

based conflicts in the Niger Delta, 

remains a key sector for unlocking 

growth for both the region and the 

country as a whole, employing approximately 

45% of the workforce. 

“It is no coincidence that this 

panel is happening this year, following 

one of the worst economic 

recessions that Nigeria has seen,” 

said Tunji Idowu, PIND’s Deputy 

executive director. “The Nigerian 

government’s Economic Recovery 

and Growth Plan (ERGP) to put us 

back onto the path of sustained 

economic growth and presents a 

unique opportunity for non-oil 

sector development in the Niger 

Delta that both tackles youth 

restiveness and employment. We 

can only ensure the sustainability 

of the Nigerian economy by focusing 

on sectors with high-growth 

potential. That is why agriculture 

is so important.” 

This breakout session, co-sponsored 

by PIND and MADE, took advantage 

of the national conversation 

on economic diversification (spurred 

by the ERGP) to drive attention to 

agricultural sectors in the Niger Delta 

with high-growth potential. 

Present at this event were representatives 

from energy companies 

such as Oando; Royal Dutch Shell’s 

All On; agribusiness firms like Syngenta 

and Olam; the German development 

organization Heinrich Boell 

Foundation; and state and federal 

government representatives from 

Rural Electrification Agency, Nigeria 

Incentive-Based Risk Sharing System 

for Agricultural Lending (NIR- 

SAL), the Presidency and Ministry of 

Environment, among many others. 

Before participants broke into 

groups, there were brief presentations 

from representatives of 

government and the private sector. 

Dr. Princewill Ekanim, Director 

of Special Duties at the Niger 

Delta Development Commission 

(NDDC), gave a brief presentation 

on the Commission’s work 

and willingness to partner with 

private sector on notable projects 

as it plans to improve broadband 

access across the Niger Delta 

and increase agricultural lending 

On October 11, 2017, 

the Foundation for 

Partnership Initiatives 

in the Niger 

Delta (PIND) and the 

Market Development Project in the 

Niger Delta (MADE) teamed up with 

the Nigerian Economic Summit’s 

Sustainability Policy Commission 

to sponsor a breakout session at 

Transcorp Hilton in Abuja themed 

“Low Carbon Investment Opportunities 

for Economic Recovery and 

Growth Plan (ERGP) in Niger Delta 

Communities”. 

This year’s edition of the annual 

Nigerian Economic Summit was 

themed “Opportunities, Productivity, 

and Employment: Actualizing 

the Economic Recovery and Growth 

Plan”, which was a direct response to 

the Nigerian government’s plan to 

strengthen and diversify the Nigerian 

economy. From each of the ten 

policy breakout sessions will come 

short, medium and long-term plans 

that address the challenges on economic 

inclusion, access to capital, 

legislation, skills building, and local 

production. 

This edition also marks the first 

time that the Nigerian Economic 

Summit will hold a session on Niger 

Delta development; and the Niger 

Delta is important for national development 

for many reasons. Nearly 32 

million Nigerians representing over 

40 different ethnic groups live in the 

Niger Delta. 

Even though the oil-rich region is 

the source of 75% of Nigeria’s foreign 

exchange earnings, over 70% of the 

population in the region live on an 

average of less than US$ 2 a day and 

are beset by diverse development 

challenges, making the Niger Delta 

one of the world’s leading development 

puzzles to be solved. 

The region’s importance has typically 

centered on oil but the sector 

provides only 0.01% of Nigeria’s total 

jobs. Agriculture, while still hampered 

by low productivity and landthrough 

the establishment of a 

Niger Delta Development Bank. 

Eze Wakanma, Union Bank’s 

Unit Head of Corporate Agriculture, 

discussed the Bank’s plans to improve 

farmers’ access to improved 

technologies and set up Agricultural 

Finance Centers and locally-based 

agency banks in farming communities. 

Eze Wakanma also challenged 

NDDC to seek partnerships with 

already-established banks such as 

theirs. 

Participants in this session broke 

into groups and came up with policy 

recommendations for such issues 

as: fluctuations in monetary policy 

following the devaluation of the 

naira, improving access to power in 

local communities, and improving 

agricultural output in the Niger Delta 

using technology. 

Osagie Okunbor, Shell Petroleum 

Development Company of 

Nigeria Ltd (SPDC) and country 

chair praised the session and the 

organizers following the discussions. 

“I have been listening in on 

the different group sessions, and 

was very impressed with the quality 

of the recommendations. This 

was top notch, and I give credit to 

PIND and MADE for organizing this 

worthwhile session.” 

“This was a very efficient session,” 

enthused Dolapo Kukoyi of 

Details Solicitors and one of the 

lead discussants on the access to 

power discussion group. “From our 

brief time together we were able to 

come up with short, medium and 

long-term plans, and the quality of 

the solutions provided here speaks 

to the quality of participants we had 

in the room.” 

“What this event has further crystallized 

for me is that the problem of 

access to energy will have to be fixed 

with solutions that are homegrown,” 

says Sola Abulu, External Relations 

Communications Manager for Shell 

Petroleum. “It is all about innovation 

and coming together to deliver 

value.” 

This event also brought the opportunity 

for participants to form 

partnerships. Among the outcomes 

of this session, NDDC and Union 

Bank agreed to work together on 

agricultural development in the 

Niger Delta. 

“As a financier, we are willing to 

finance, but it has to viable,” says 

Eze Wakanma. “NDDC today has 

agreed to bankroll a pilot program 

that will focus on funding agricultural 

lending. And we now want to 

use that to test the theories we have 

propounded today. We are more 

than ready to work with them.” 

Niger Delta focused organizations 

at the session expressed pleasure 

at the outcome of the event and 

hope that it will begin a larger effort 

to mainstream the region into the 

national conversation on economic 

diversification. 

“The Niger Delta is crucial 

to Nigeria’s development, and 

not just because of oil,” opined 

Fidelis Ekom, Advocacy Manager 

for MADE “and partnerships like 

ours with PIND and now NESG are 

important because no organization 

can address the development 

challenges facing the Niger Delta 

alone. With this and the upcoming 

Niger Delta Development Forum 

(NDDF), we are supporting PIND 

to plan on November 14-15, we 

are hoping to fully mainstream a 

regional framework for economic 

diversification and development 

in both the Federal Government’s 

plans and in each of the Niger 

Delta states as well.” 

The Nigerian Economic Summit 

will harmonize all the action plans 

drawn up in different sections and 

share them with all private and public 

sector stakeholders. These plans 

will be reviewed by the Federal Executive 

Council and will be adopted to 

form part of policy guidance towards 

improvements in diversification in 

the Nigerian economy. 

Make energy plans bankable to attract investment experts urge FG 

KELECHI EWUZIE 

The federal government 

aspiration to achieve sustainable 

power supply 

in the country can only 

materialise to the extent that the 

plans are bankable. Industry experts 

have observed. 

To them the only way to attract 

investment to the power sector is 

for public policies to be strategic, 

transparent, consistent and have 

longevity. 

According to experts, Nigeria’s 

challenges have nothing to do with 

situating the problem but everything 

to do with implementing a 

solution. 

Experts in their various summations 

are worried that despite 

Nigeria’s large deposit of gas and 

a bankable amount of wind and 

sunshine in the north with water 

everywhere, the country cannot still 

boost of sufficient power supply. 

Ayodele Oni, an energy expert 

observes that Power generation and 

supply continue to pose challenges 

on different fronts in Nigeria. For 

many decades, successive admin- 

istrations have made “concerted efforts” 

to tackle the many challenges 

that have plagued the sector. 

Oni observes that a lot of the 

challenges in the power sector are 

largely occasioned by poor infrastructure, 

lack of sufficient funding, 

failure by the executive arm 

of government to pay for power, 

security issues and the uncertainty 

surrounding the present foreign 

exchange regime. 

Tony Elumelu, chairman of 

Transcorp at a recent interview 

believes that the right mind set 

must be in place first to address 

the crises in the power sector. 

He highlighted the liquidity 

challenges in the sector to be the 

results of non-settlement of debts 

owed Gencos and gas constraints 

worsened by government’s refusal 

to liberalise the sector. 

“There’s a lot of debt being 

owed to us. The sector is challenged, 

debt, liquidity is a challenge. 

“There is also gas issue. Of 

course, gas you will not blame 

government so much for the vandalisation 

going on in that sector. 

Gas pricing should be market 

driven; price fixing does not really 

work. Gas is important and 

we should allow market forces to 

determine gas prices” 

The Transcorp chairman proposed 

that government should 

create enabling environment for 

gencos to harness idle gas fields 

to provide gas for their operations. 

“If you put invoice, you get paid 

about 15 or 20 per cent. The accumulated 

debt today is over N50bn 

and they started owing us when 

dollar was N168/$1 today, it is over 

N300/$1 so you can imagine the 

depletion, the erosion of value to 

shareholders of Transcorp.” 

He also said that since the assumptions 

that led to the tariff 

structure agreed in the 2013 privatisation 

exercise such as exchange 

rate, inflation rate, gas prices have 

all changed the tariff cannot remain 

the same.

C002D5556 

BUSINESS DAY 

29 


HOMES&PROPERTY 

In Association 

Infrastructure 

Maintenance 

With 

TUNDE OBILEYE 

Customer feedback in FM 

Facilities management (FM) 

has gone beyond taking 

care of the built environment 

and the day-to-day running 

of the maintenance mechanism 

associated with it. At some point, 

the question of who is truly 

satisfied with the service being 

provided must come to mind. 

Most times, businesses are 

measured not only by profit 

generation, but also by its level 

of customer satisfaction. A business 

is not said to meet its target 

if the client involved is not satisfied. 

Satisfaction in this context 

means the client is comfortable 

with the state of things and there 

is little or nothing to complain 

about. 

Customer feedback in FM 

helps the growth of the business 

in terms of improving how the 

various activities are carried out, 

cost savings, profit generation 

and referral to new clients. 

Providing FM services seem 

to be hardest in pushing for the 

growth of the business as the 

requirements of each client are 

different and how satisfied they 

can be. 

Ways to work with clients and 

end-users: 

Understand their needs 

As facilities managers, our 

main focus must be to ensure 

customer satisfaction which can 

be measured by how well the end 

users can enjoy the use of the facilities 

and how efficient the FM 

personnel responds to problems 

when they arise. How well facilities 

managers understand their 

client’s requirements should 

clearly help in designing the 

appropriate systems, processes 

and work schedule to achieve 

the objectives. 

Communication 

Understanding their needs is 

as good as implementing them. 

This makes it easier to bring 

changes that would not only 

benefit the end users but also the 

FM business. Bear in mind it is a 

two way satisfaction. Their needs 

are understood and this makes 

the job of the facilities managers 

easy to deal with. Also, the facility 

managers should ensure that 

the need of one does not clash 

with that of another.someone 

else’s. There should be room for 

balance at all times. Adjustment 

may be required from time to 

time but must be communicated 

so no one feels out of place or 

cheated. 

Allow complaints and be 

open to improvements 

FM services will fail if management 

does not pay attention 

to their clients’ complaints and in 

turn make every effort to improve 

the services being provided. The 

end users must always feel their 

well-being is the main priority. 

Ways you can get their 

feedback/complaint 

•Get a feedback form. 

•Get a customer care 

operator(s). 

•Routine one-on-one conversation 

is desirable. 

While trying to pay attention 

to the needs and opinions of 

clients/end users, the following 

should be avoided. 

1. Pretentions: As subtle as 

I try to make this sound, there’s 

a problem if facilities managers 

get feedback just to fulfill all 

righteousness. There must be 

a genuine desire to really care 

about what they think. 

2. Impartiality: There’s no 

need to have an unhealthy client 

or end user relationship. 

Facilities managers must avoid 

being impartial where there are 

conflicting interests between 

two or more end users. Placing 

the needs of one over the other 

is wrong without due consideration 

of all material factors. 

It must be in the best interest of 

everyone. Opinions should be 

taken, considered and then executed 

if useful. There is a chance 

that changes may not always be 

welcome. The effect can always 

prove a change in thought. 

Getting the customer’s satisfaction 

right is a factor in realizing 

profit. However, there should 

also be a balance where there’s 

an unrealistic expectation from 

the client/end user. The unrealistic 

expectation must be professionally 

managed. Reasons for a 

No must be politely explained. 

Obileye is a UK-trained lawyer and CEO, 

Great Heights Property and Facilities 

Management Limited 

Email: 

Tundeobileye@greatheightslimited.com 

Lagos, NMRC partnership seen repositioning 

state’s Rent-to-Own initiative 

… housing affordability, accessibility for residents assured 

CHUKA UROKO 

There are strong indications 

that the partnership 

which Lagos 

State government 

entered into recently 

with the Nigerian Mortgage 

Refinance Company (NMRC) 

and some estate developers will 

reposition the state’s new homeownership 

initiative known as 

Rent-to-Own. 

Rent-to-Own is the state 

government’s initiative aimed to 

make homeownership easy for 

many of the citizens who, on account 

of affordability, cannot buy 

or build their own homes. The 

initiative enables a subscriber 

to rent a house, pay rents on it 

for a minimum of 10 years and 

thereafter own the house. 

Lagos is Nigeria’s largest 

economy and the 5th in Africa. It 

has a very large population estimated 

at 22 million crammed in 

a relatively small land mass. The 

city state accounts for about 34 

percent of real estate activities 

in Nigeria, but majority of its 

residents are ‘homeless’. 

A recent report by Pison 

Housing Company estimates 

the state’s housing deficit at 3 

million units. The report adds 

that the housing deficit in the 

state is both qualitative and 

quantitative, pointing out that 

about 65 percent of the state’s 

population lives in rented ac- 

commodation. 

The recent memorandum of 

understanding the state signed 

with NMRC and developers, 

which is premised on the financing, 

development and delivery 

of the 20,000 housing 

units Lagos Affordable Public 

Housing (LAPH) initiative, is 

therefore meant to address all 

these and more. 

“The LAPH home ownership 

initiative and this collaboration 

is an opportunity for the 

state and its citizens to leverage 

the benefits available under 

NMRC; this refinancing agreement 

will assist the supply side 

as well as the demand side of 

the value chain”, said Gbolahan 

Lawal, the state’s commissioner 

for housing, who spoke at the 

signing event. 

Lawal hopes that the refinancing 

agreement will set in 

motion a revolving pool of funds 

for mortgage origination which 

will assist developers and provide 

them access to construction 

finance and help scale up 

housing delivery. “This will also 

avail citizens of the state the 

affordability and accessibility 

that NMRC provides through 

the refinancing of long-term 

mortgages thereby unlocking its 

multiplier effects on the state’s 

strong economy, including 

jobs and wealth creation”, he 

assured. 

Examples of these efforts, 

the commissioner said, include 

the effective re-positioning of 

housing provision institutions 

in the state and the successful 

implementation of the Rent- 

To-Own scheme which has 

driven the growth of the sector 

and enabled many Lagosians, 

as a matter of fact over 2,000 

Lagosians, realize their dreams 

of affordable home ownership. 

Charles Inyangete, MD/ 

CEO of NMRC, described the 

day’s event as a watershed for 

his company, explaining that 

the signing of the MoU was a 

journey on the path to making 

homeownership for Nigerians 

a reality alongside Lagos State. 

A private sector-driven company 

with the public purpose 

of developing the primary and 

secondary mortgage markets 

by raising long‐term funds from 

the domestic capital market as 

well as foreign markets, NMRC 

was established in January 2014 

with the mandate to promote 

wider spread of home ownership, 

accessibility and affordability 

in Nigeria. 

Its mission is also to break 

down barriers to home ownership 

by providing liquidity, 

affordability, accessibility and 

stability to the housing market 

in Nigeria which explains the 

CEO’s passion for this partnership. 

“Lagos is at the frontiers 

and, indeed, at the leading edge 

of making homeownership a 

reality; it is creating the enabling 

environment for business to 

invest in housing and the signing 

of the MoU is on the path to 

doing that”, he noted. 

According to him, the state 

will be making sure that titles 

exist for the properties and the 

land on which the development 

will take place and done timely 

just as it will be committing to 

allocating to developers appropriate 

land for the purpose of 

the development while NMRC 

is committing to stand at the 

back end of the transaction 

to ensure that all the primary 

mortgage banks have funding 

available for the refinancing of 

the project. 

As a secondary mortgage 

market and consistent with its 

mission, NMRC is part of what 

is called the Mortgage Warehouse 

Fund that will provide 

funding for mortgage institutions 

to be able to actually create 

mortgages in the first place. It 

is hoped that this will be part of 

the process for driving the actualization 

of the new partnership 

on the part of the developers. 

Inyangete said the signing 

of the agreement is a convergence 

of all the parties housing 

delivery with Lagos as the driver 

and the provider of land and 

titles; NMRC as the provider 

of finance, and the developers 

without whom his company 

wouldn’t be providing financing.


C002D5556 Tuesday 31 October 2017 

HOMES&PROPERTY 

How informal sector inclusion in pension scheme 

can bridge housing affordability gap 

Stories CHUKA UROKO 

The inclusion of the informal 

sector of the economy in 

the contributory pension 

scheme of the federal government 

has the capacity to 

bridge the housing affordability gap in 

Nigeria, experts have said. 

Nigeria is one of the most expensive 

housing markets in the world. A 

combination of factors including high 

poverty level, absence of a functional 

mortgage system, high cost of building 

materials, etc has helped to make house 

prices too expensive for a good number 

of citizens, hence the widening housing 

affordability gap in the country. 

Over the years, the informal sector 

has been excluded in government’s 

social safety initiatives such as the 

contributory pension scheme (CPS), national 

health insurance scheme (NHIS), 

national housing Fund (NHF), etc which 

the experts say represents a significant 

economic loss to all stakeholders. 

The informal sector has always been 

underrated by policy initiators. But this 

is a sector that represents well over 50 

percent of the country’s total workforce. 

Whereas there are only 5.83 million 

Nigerians in the public sector; 7.78 million 

in the private formal sector, there 

are as many as 67.54 million people in 

the informal sector. Altogether there 

are 81.15 million people working in 

the country. 

Citing a recent survey from Phillips 

Consulting, Sonnie Ayere, CEO, Dunn 

Loren Merrifield, revealed in his presentation 

at the Real Estate Unite 2017 

summit in Lagos recently that the average 

income of people in the informal 

sector is N100,000 per month which 

equals N1,200,000 per annum. 

When N1,200,000 is multiplied by 

67.54 million people in this sector, the 

result is N81,048,000,000,000 and this 

represents the size of the opportunity 

for the pension fund industry. 

Ayere said the pension administrator 

could get his own share of this opportunity 

by adding Housing Fund to 

the PenCom Multi-Fund Structure of I 

– IV (Housing Fund V). This fund allows 

contributors, from both the formal and 

informal sector, to direct their Pension 

Fund Administrators (PFAs) to allocate 

20 percent of their existing and future 

contributions to this new Housing Fund. 

“A contributor should be able to ask 

for part of his/her contributions to be 

set aside into a separate fund to ensure 

he/she can afford a home. The PFA can 

split a contributor’s total contribution 

into 80:20”, he said, explaining that 80 

percent of total contribution remains 

invested in the 18 percent yielding 

funds, while 20 percent is invested into 

the Housing Fund with a yield of say 5 

percent. 

“By investing 20 percent of this 

individual’s contributions to their Housing 

Fund V, the person is guaranteed a 

mortgage of no higher than 8 – 9 percent 

per annum, assuming the capped yield 

on AAA rated housing related securities 

are now 5 percent by choice and consent 

of contributors / PenCom”, Ayere assured. 

Taking a look at an informal sector 

entrepreneur with an income of N3 million 

per annum, Ayere said that with his 

N3.5 nillion annual income, he can buy 

a home worth N10.5ing million, adding 

that at 9 percent mortgage over 20yrs, 

his monthly payment of N75,576.98 is 

only 30.23 percent of his gross salary of 

N250,000 per month which is within the 

agreed maximum of 33.33 percent of his 

annual income for mortgage repayment. 

This, he noted, is the beginning of the 

solution to the affordability gap, pointing 

out that if 25 percent of the 67.54 million 

informal sector population joins the 

CPS because of home ownership, this 

translates to N3.65 trillion per annum 

coming into the scheme. “By designing 

a solution to housing, the pension fund 

industry is able to capture the informal 

sector”, he emphasized. 

Ayere posited that this will become a 

reality when PenCom agrees to include 

a fund within its multiple funds program; 

contributors elect to have 20 percent of 

existing and future contributions into 

Fund V; returns to Fund V are capped 

at 5 percent for AAA rated housing securities 

only, and mortgage and other 

institutions add a spread on to the cost 

of funds of 5 percent for mortgage rates 

not to exceed between 8 and 9 percent, 

depending on perceived customer risk 

“So, by a contributor giving up some 

yield on current and future contributions, 

he opens up the opportunity to buy his 

desired home at an affordable and sustainable 

rate; the desire to own a home at 

a single digit rate becomes the strongest 

selling point to entice the informal sector 

to begin contributing”, he said. 

Including the informal sector in the 

pension fund scheme will come with 

lots of benefits for the stakeholders. For 

the government, that means significant 

increase in job creation, social stability, 

stronger GDP, home ownership culture, 

and wealth creation for citizens. 

For the pension commission and 

pension operators, there will be significant 

increase in funds under management, 

a whole new market and 

consistency of contribution, while for 

mortgage banks, it means increased 

mortgage flows, lower non-performing 

loans (NPLs), increased asset growth 

and profitability. 

Investment, residential opportunity 

beckons as Buildcon unveils new estate 

Opportunity is beckoning on 

investors and home seekers 

as Buildcon Global Services 

Limited, a new generation real estate 

development company, commences 

construction at its new project, the 

Pracht Court, located in Ajah, Lagos. 

Opportunity also exists for investors 

at the Lekki Free Trade Zone (LFTZ) 

where the company is selling plots of 

land to subscribers wishing to take 

position in that fast-growing business 

hub in Lagos 

Pracht Court, located at a serene 

environment, offers top-notch luxury, 

comfort, maximum security and affordability. 

The estate consists of four-bedroom 

terrace (smart) houses, which incorporate 

advanced automation systems to 

provide residents with sophisticated 

monitoring and control over the building’s 

functions. It is being constructed 

by highly-skilled architects and engineers 

with vast knowledge in critical 

innovations required in a dream home. 

Bukunola Gadzama, Buildcon’s 

chief executive officer, explained that 

the success recorded at the company’s 

Pracht Gardens Estate, located in Ikota, 

Lagos, motivated the development of 

Pracht Court. 

According to her, a four-bedroom 

terrace home sells N50 million but 

requires only 30 percent initial deposit 

while the balance is spread over two 

years. 

The unique features of the estate 

include home automation system, 

central water system and treatment 

plant, 24 hours world-class security, a 

swimming pool, a club house, a table 

tennis court, beautiful landscape and 

underground electricity. 

As part of the exclusive benefits, 

subscribers are allowed to determine 

the progress and internal finishing 

of their homes and use of internal 

spacing. They are also entitled to six 

months liability period with Buildcon 

responsible for all repairs. 

A plot of land measuring 648 square 

metres in the LFTZ sells for N2.5million 

for outright purchase, but N3million 

for installment payment where a subscriber 

is required to make 30 percent 

initial deposit with completion within 

the period. 

Why mortgage accounts for less than 3% of housing finance in Nigeria 

Unlike its peers in Africa and 

despite the touted growth in its 

economy, mortgage penetration 

in Nigeria is still less than 1 percent and 

accounts for less that 3 percent of housing 

finance and homeownership. In other 

jurisdictions, especially the advanced 

economies, individuals and households 

buy homes through credit given to them 

by mortgage banks or other mortgage 

lending institutions. 

Poor mortgage penetration is reason 

a city like Lagos has over 60 percent of its 

estimated 22 million population living 

in rented accommodation, and about 

80 percent of its housing stock is funded 

from household income. 

Experts say that housing finance by 

public authorities in Nigeria is about 

10 percent; mortgage banks contribute 

about 2 percent, while contribution 

from banks and other institutions is 

insignificant. 

According to them, whereas mortgage 

contributes about 40 percent of 

housing finance in South Africa, in 

Ghana, a smaller West African country, 

the contribution is 3 percent, but in Nigeria, 

touted as Africa’s largest economy, 

the contribution is less than 3 percent. 

At an economic forum in Lagos recently, 

Edem Bassey, a mortgage expert, 

explained that the low mortgage contribution 

to housing finance in Nigeria is 

due to the cumbersome and unfriendly 

land administration in the country, 

pointing out that Nigeria ranks highest 

in property registration and construction 

permits. 

“Nigeria is ahead of all other African 

countries in procedures legally required 

for registering property; it takes about 

360 days to register property here as 

against Ghana’s less than 10 days,” he 

said, adding that in some states, the cost 

of registering property is about 15 percent 

of the value of the property. 

He added that there were altogether 

16 stages and 60 steps to getting a property 

registered in those states, eight stages 

and 30 steps for each of the lender and the 

borrower, stressing that this explained 

why it was difficult to get mortgage for 

housing finance. 

“Ghana before now had a dysfunctional 

land administration, long and 

expensive procedures that lasted up to five 

years and involved six different agencies 

supervising which resulted in inefficient 

state land bureaucracy and customary 

tenure,” Bassey noted. 

But when government of that country 

instituted reforms, property registration 

was cut down to 34 days and queues at the 

lands commission disappeared, making it 

possible for the mortgage sector to thrive. 

In Egypt, he added, government identified 

high fees and inefficient government 

agencies that hindered the formalisation 

of real estate as a major issue and sorted it 

out by reducing property registration fees 

and simplifying the property registration 

process, thus encouraging citizens and 

companies to obtain titles. 

He, therefore, called for discarding of 

multiple verification payment, deployment 

of Global Information Services 

(GIS), making payments with a single receipt, 

improving capacity building and 

significant investment in technology. 

Bassey advised further that government 

should use Land Use Act to empower 

people and not as an economic 

and political tool by state chief executives, 

adding that the Act should be taken away 

from the constitution so that it could be 

easily tinkered with. 

He recommended that land administrators 

should adopt what he called 

three-one-three strategy for land registration, 

explaining that land titles should 

be perfected in three days, at one central 

place, and at the cost of 3 percent of the 

value of the land. 

L-R: Izoma Philip Asiodu, President, NCF Board of Trustees; Babatunde Adejare, commissioner for the 

Environment, Lagos State; Babatunde Haunpe, Special Adviser to the Governor of Lagos State on the Environment; 

Ede Dafinone, chairman, NCF National Executive Council; Adebimpe Akinsola, the Commissioner 

of Tourism, Arts & Culture, Lagos State, at the 2017 Walk for Nature in Lagos recently.


BD 

Markets + Finance 

‘Providing proprietary research, commentary, analysis and financial news coverage unmatched in today’s 

market. Published twice weekly, Markets & Finance provides all the key intelligence you need.’ 

C002D5556 

BUSINESS DAY 


Zenith Bank Plc: Interest and non 

interest income drives earnings 

BALA AUGIE 

Zenith Bank Nigeria 

Plc just released 

its third quarter financial 

results that 

showed the lender 

recorded double digit growth 

at top (revenue) and bottom 

line (profit) amid a volatile 

and unpredictable macroeconomic 

environment. 

The bank has been consistently 

growing earnings 

even the Zenith of the economic 

downturn of 2016 

that saw the country slip into 

its first in 25 years. 

The bank uses its strong 

balance sheet and liquidity 

as well as efficient trade 

finance processes and services, 

to continuously grow 

and support businesses. 

Zenith has been pouring 

wine from the flagon 

into the golden goblet of 

shareholders with its steady 

dividend payment. 

The Bank paid a dividend of 

160 kobo per share for FY2012, 

175 kobo per share for both 

FY2013 and FY2014, and 180 

kobo per share for FY2015 

A total dividend amount of 

202 kobo per share (25 kobo interim 

and 177 kobo final) was 

paid for FY2016 and 25 kobo 

per share interim dividend 

proposed for H1 2017. 

Non Interest and Interest 

Income drives gross earnings 

For the first nine months 

through September 2017, Zenith 

Bank’s gross earnings 


N531.26 billion in September 

2017 compared to N380.35 

billion as at September 2016. 

Interest income and similar 

charges spiked by 26.60 

percent to N361.78 billion 

in the period under review 

from N285.67 billion as at 

September 2016. 

…. net income rises 35.48 percent in Q3 

Peter Amangbo - group managing director/CEO, Zenith Bank plc 

A breakdown of interest 

income shows interest income 

on loans and advances 

to customers and Income 

from Treasury bills (T-bills) 

increased by 15.63 percent 

and 125.35 percent respectively 

to N241 billion and 

84.33 billion respectively. 

Noninterest income surged 

by 79.15 percent to N169.47 

billion in September 2017 from 

N94.67 billion as at September 

2016; driven by a 53 percent 

increase in fee and commission 

income to N71.02 billion. 

Net interest margin (NIM) 

increased to 7.20 percent in the 

period under review from 7.60 

percent the previous year. The 

high interest rate on time deposits 

contributed significantly 

to the decline in NIMs. 

Cost Optimization pays off 

as profit surge 

Zenith Bank’s net income 

surged by 35.48 percent to 

N129.23 billion in September 

2017 from N95.38 billion as at 

September 2016. Profit before 

tax was up 30.80 percent to 

N152.55 billion in the period 

under review from N116.58 

billion as at September 2016. 

The bank’s bottom line 

(profit) was underpinned 

by a 974.14 percent surge in 

Treasury bill (T-bill) Trading 

income to N52.88 billion as 

the lender continues gain 

traction in the electronic 

banking space. 

Zenith Ban’s cost-to-income 

ratio declined to 52.90 

percent in the period under 

review from 53.8 percent 

as at September; driven by 

perational efficiencies and 

cost optimization efforts. 

Total operating expenses 


N171.45 billion in September 

2017 as against N146.05 billion 

as at September 2016. High inflation 

rate, Naira devaluation 

and Information Technology 

cost contributed significantly 

to the 17.40 percent increase in 

total operating expenses. 

Risk Management Strategy 

pays off as NPLs below 

threshold. 

Zenith Bank’s strong risk 

controls have resulted in a 

largely stable NPL ratio, with 

robust coverage levels that 

compare favourably with peers 

and the sector. 

The Nigerian lender’s NPLs 

stood at 4.20 percent, though 

higher than the 2.20 percent 

recorded the previous period, 

lower than the 5 percent 

threshold. Cost of risk 

increased by 107.70 percent 

to 4.20 percent as against 1.30 

percent the previous year. 

Further analysis of Zenith 

Bank’s financial statement 

shows loans and advances to 

customers fell by 11.52 percent 

to N2.15 trillion in September 

2017 from N2.42 trillion as at 

September 2016. The marginal 

decline of 3.70 percent 

in Gross loans is reflective of 

the Group’s cautious approach 

to its risk assets management 

due to the evolving economic 

environment. 

The Bank’s total deposits 

increased by 2.6 percent from 

N3.0 trillion to N3.1 trillion 

as it strives to consolidate its 

effective deposit mobilisation 

strategy. Zenith Bank’s 

impairment surged by 115.30 

percent to N47.05 billion in the 

period under review. 

Capital and liquidity ratios 

for the Bank – well above 

industry requirements of 

30% for Liquidity and 15% 

for Capital Adequacy Ratio 

(Banks with international 

authorisation which are also 

systematically significant). 

Analysts are upbeat Nigerian 

Banks will continue 

to outperform the NSE ASI 

in so far as the central bank 

maintains the current foreign 

exchange policy. 

The introduction of the 

Investors’ and Exporters’ (I and 

E) window by the apex bank 

and the subsequent liberalization 

of the foreign exchange 

market have resulted in increased 

dollar supply. 

Zenith Bank’s shares have 

gained 78 percent year to date 

(ytd), outperforming 36 percent 

ytd return on the Nigerian 

Stock Exchange (NSE) All 

Share Index (ASI), as analysts 

expects a slight positive reaction 

from the market. 

The lender’s shares closed 

at N26.30 percent as of 1:30 

pm Lagos while market capitalization 

stood at N822.27 

billion. “Management noted 

at the last conference call that 

this rise in loan loss expense 

was partly due to significant 

impairments taken from the 

telecoms sector and the aviation 

sector, which we believe 

relates to Etisalat (now 9mobile) 

and Arik Airline,” said 

Analysts at CSL limited. 

With cash and cash equivalent 

of N782.39 billion, Zenith 

Bank has enough fund 

to pay future dividend and 

finance future expansion 

plans. 

Zenith’s Third Quarter Financial Highlight 

Zenith’s Third Quarter Financial Highlight 

Source: Company Financials, M and F 

Source: Company Financials, M and F 

BD MARKETS + FINANCE (Business Team lead: PATRICK ATUANYA - Analysts: BALA AUGIE and LOLADE AKINMURELE)



C002D5556 

FEATURE 

De-risking agro finance to increase lending to farmers 

Nigerian smallholder farmers are lagging behind owing to their inability to access finance at lower interest rate. In this piece, 

JOSEPHINE OKOJIE and STEPHEN ONYEKWELU, examines how de-risking agro finance will enable banks lend more to farmers 

Nigeria’s expectations 

from its agricultural 

sector may 

never crystallise if 

banks remains unwilling 

to lend to the sector. 

Agriculture has long been 

known to hold a great promise 

and has historically been Nigeria’s 

major source of revenue and 

foreign exchange earner. 

In the 60’s and 70’s Nigeria 

attained extraordinary heights 

from its agricultural production 

which was not only limited to 

the extinct groundnut pyramids, 

cocoa house in Ibadan and a host 

of other social and infrastructural 

development supported 

by revenue generated through 

the sector. 

Then it all happened that oil 

was discovered in commercial 

quantity and the agricultural 

revenue ended and Nigeria abandoned 

the sector. 

But since the 2014 collapse 

of global oil crude prices at the 

international market, there has 

been renewed focus on the agricultural 

sector as the country 

attempts to diversify its economy 

away from oil. 

The shift was necessitated by 

the growing statistics of youth 

unemployment and the vast agricultural 

potentials that can drive 

a more sustainable economic 

development in Africa’s most 

populous nation. 

With the current economic 

downturn the country is grappling 

with, there is consensus 

across board that there is no 

better time to leverage the potentials 

of the agricultural sector 

than now, not just to pull out of 

recession, but also to diversify 

the economy and place it on the 

path of sustainable growth and 

development. 

One of the factors that have 

continued to impede the sector 

is finance. Lack of access to 

adequate financing by farmers 

and other actors in the sector has 

remained a major impediment 

that prevents investments in 

basic farm inputs needed to raise 

productivity and sustain growth 

of the non-oil sector. 

As a result, yields have failed 

to increase significantly, leading 

to pervasive hunger and poverty. 

Similarly, agro entrepreneurs 

seeking to build businesses that 

could boost food production, 

agricultural productivity has 

continued to remain at a subsistence 

level in the country. 

“Funding is the biggest problem 

we have in Nigeria’s agriculture,” 

Heineken Lokpobiri, 

Minister of State for Agriculture 

and Rural Development said at 

a recent breakfast meeting with 

banks CEO’s in Lagos. 

“We need finance to put all the 

factors of production together 

to drive growth in the sector. We 

know that banks are still finding 

it difficult to fund agriculture but 

until we have the money to fund 

agriculture at the production, 

processing and marketing level, 

we would not achieve anything 

from the sector,” Lokpobiri said. 

Nigeria’s agricultural fundamentals 

are robust and include 

an estimated 84 million hectares 

of arable land out of which only 

40 percent is cultivated and only 

0 percent of the 40 percent is 

cultivated optimally. 

Two of Africa’s largest rivers 

(Niger and Benue) flow through 

and within the borders of the 

country. There is adequate annual 

rainfall, large young workforce 

and over 180 million consumers 

that offer a domestic market to 

support increase food production 

and processing. 

It is only the finance to unlock 

all this potentials that is lacking. 

Experts say the glorious days 

of Nigeria’s agriculture could be 

revived when banks starts lending 

more to the sector. 

To ensure that farmers across 

the country have access to adequate 

finance and also ensure 

that money deposit banks lend 

more to the sector, even as the 

country realize its agricultural 

potentials, the Nigerian Incentive 

Based Risk Sharing System 

for Agricultural Lending (NIR- 

SAL) is offering a 75 percent 

guarantee on all loans to the 

sector by banks. 

This will help banks hedge 

against risks associated with the 

sector. 

“NIRSAL will give 75 percent 

of the guarantee that banks need 

to finance agriculture,” said Aliyu 

Abdulhameed, managing director, 

NIRSAL. 

“Nigeria lacks the finance, 

technology, mechanization and 

human capital to drive agriculture,” 

the managing director said. 

NIRSAL also urged banks to 

adopt science, technology and 

aggregation to also hedge against 

risks in financing the sector. 

The managing director stated 

that banks can use technology 

such as drones and big data to 

monitor farmers and other projects 

in the agricultural industry, 

stating that finance the sector is 

still a misery to some bank CEO’s. 

He said that the country needs 

to globalize financing and investment 

for agriculture through a 

risk free model. 

Despite efforts targeted at increasing 

funding to the Nigeria’s 

agriculture sector, the role of 

commercial banks in financing 

the sector still remains minimal 

owing to the risky nature of the 

sector, low financial literacy 

among smallholder farmers and 

difficulty in determining their 

creditworthiness. 

Successive governments and 

the Central Bank of Nigeria have 

introduced various financing 

initiatives to encourage banks 

to finance agric at lower interest 

rates. 

Some of such initiatives are 

NIRSAL, Commercial Agricultural 

Credit Scheme (CACS), Anchor 

Borrower Program amongst 

others. 

But the government does not 

have enough resources to lend to 

all actors across the value chain, 

so the need to encourage banks 

to increase lending to the sector 

can never be overemphasized. 

The private sector needs to be 

at the forefront while the government 

support with the provision 

of infrastructures needed for 

production and productivity. 

According to the National 

Bureau of Statistics (NBS) banks 

credit to the agricultural sector 

rose to N50 billion in q2 2017 

from N48 billion in q2 2016. 

“The banks should work with 

NIRSAL and design financial 

products for the different value 

chains; identify other ways of 

securing the loans where title to 

land is not available, reducing 

interest rates and other charges 

and providing long term financing,” 

Lokpobiri who was earlier 

quoted said. 

“There are number of ways the 

government can create incentives 

for the private sector. For 

instance, a bank that funds the 

construction of a feeder road 

linking a farm community to the 

market would get tax breaks,” he 

added. 

Pascal Dozie, representing the 

banks CEO’s during the breakfast 

meeting on how to de-risk 

the sector said that the country 

needs to glamorise agriculture 

so that it can become a viable 

business and attract the youths. 

We are trying to start a movement 

of glamorising agriculture 

in Nigeria so that it becomes a 

business and youths will start 

seeing it as a career. We are yet to 

realise our potential in the sector 

because we are yet to scale it up 

owing to the fact that everybody 

is working alone,” Dozie said. 

Iyalode Alaba Lawson, national 

president, NACCIMA said 

that it is very imperative for the 

country to ensure that the sector 

attracts investments. “It has 

resulted in a deep need not only 

to exit the current economic 

quandary but to prevent a relapse,” 

she said. 

“To bring about sustained 

growth in food production, job 

generation and economic growth 

and development, agriculture 

must attract finance and investments,” 

Lawson added.


Live @ the Stock exchange 

Top Gainers/Losers as at Monday 30 October 2017 

GAINERS 

Company Opening Closing Change 

TOTAL 232.75 240 7.25 

FO 38.29 40.99 2.7 

DANGFLOUR 8.24 9.08 0.84 

CADBURY 10.55 11 0.45 

ETI 17.05 17.49 0.44 

LOSERS 

Company Opening Closing Change 

SEPLAT 490 480 -10 

WAPCO 52 50 -2 

NB 152 151.5 -0.5 

DANGSUGAR 15.2 14.9 -0.3 

NASCON 15.94 15.87 -0.07 

Market Statistics as at Monday 30 October 2017 

ASI (Points) 36,484.30 

DEALS (Numbers) 3,401.00 

VOLUME (Numbers) 174,957,606.00 

VALUE (N billion) 1.824 

MARKET CAP (N Trn 12.627 

Stock market value rises by N8bn 

…Total, Forte Oil, 15 others gain 

Stories by 

Iheanyi Nwachukwu 

Nigerian equities 

market took 

off this week 

on a positive 

note following 

yesterday’s 0.06percent increase 

by the Nigerian Stock 

Exchange (NSE) All Share 

Index (ASI). 

The NSE ASI appreciated 

to close at 36,484.30 points 

as against 36,462.26 points 

recorded previously. The 

market’s Year-to-Date (YtD) 

returns stood at +35.76percent 

while the value of listed 

equities –the Market Capitalisation 

rose from N12.619 

trillion to N12.627trillion. 

Total Nigerian Plc led 

the basket of 17 stocks that 

Sterling Bank gross earnings up by 19% 

Sterling Bank Plc 

sustained growth 

in earnings with 19 

percent increase in 

the third quarter (Q3) ended 

September 30, 2017. The 

bank’s gross earnings growth 

was boosted by 48.9 percent 

increase in non-interest income. 

The bank’s gross earnings 

rose to N94.6 billion during 

the third quarter ended September 

30, 2017 as against 

N79.7 billion during the corresponding 

period of 2016. 

Other performance indicators 

showed that non-interest 

income grew by 48.9 percent 

to N16.0 billion as against 

N10.8 billion in the third 

quarter of 2016. 

Commenting on the 

bank’s performance, Yemi 

Adeola, Managing Director/CEO, 

stated, “In the 

third quarter, the bank sustained 

its earnings growth 

momentum with an 18.8 

percent growth in gross 

earnings boosted by a 48.9 

percent increase in noninterest 

income,” remarking 

that during the year, 

the bank’s strategy built 

on efficient operations and 

sustainable growth of its 

balance sheet in a cautious 

but optimistic manner, continued 

to deliver results. 

According to him, despite 

the persistent inflationary 

pressures, cost-toincome 

ratio improved by 

140 basis points driven by 

a moderation in operating 

expenses, thereby enabling 

the bank to record significant 

improvement in asset 

quality with a 380-basis 

point reduction in nonperforming 

loan (NPL) ratio. 

He also said that the 

bank continued to diversify 

its funding base leading to 

a 147.6 percent increase in 

long-term funding and that 

overall profit before tax rose 

by 8.1 percent to N6.6 billion 

while annualized pre-tax 

return on average equity 

improved by 50 basis points 

to 9.6 percent. 

The CEO noted, “As economic 

recovery gains momentum, 

we are well positioned 

to respond to emerging 

opportunities in education, 

health and transportation 

sectors. Our existing 

collaboration with pioneering 

technology companies 

in these sectors has started 

yielding results and this will 

provide a springboard for 

growth in 2018.” 

Further analysis showed 

that net operating income 


N45.3 billion compared with 

N45.1 billion in 2016. Operating 

expenses however 

moderated by 0.6 percent to 

N38.8 billion as against N39 

billion in 2016; profit before 

tax rose by 8.1% to N6.6 billion 

as against N6.1 billion 

in 2016 while profit after tax 

also appreciated by 7.3 percent 

to close the quarter at 

N5.9 billion compared with 

N5.5 billion in 2016. 

The bank’s financial ratios 

showed pre-tax return 

on average equity of 9.6 

percent compared with 9.1 

percent in 2016, post tax 

return on average equity 

was 8.6 percent as against 

8.3 percent in 2016 while 

earnings per share rose to 

21 kobo in 2017 from 19 

kobo in 2016. 

Sterling Bank’s non-performing 

loan ratio dropped 

to 6.1 percent in 2017 from 

9.9 percent in 2016, while 

capital adequacy ratio increased 

to 11.4 percent in 

2017 from 11.2 percent in 

2016. 

The financial position 

statement of the bank 

showed that shareholders’ 

funds rose by 13.6 per cent 

to N97.3 billion as against 

N85.7billion) in 2016 while 

total assets, excluding contingent 

liabilities, increased 

by 15.2 percent to N961 billion 

against N834.2 billion 

in 2016. 

gained against 21 losers. 

The share price of Total 

Nigeria Plc rallied by 

N7.25, from N232.75 to 

N240; followed by that of 

Forte Oil Plc which gained 

N2.7, from N38.29 to N40.99; 

Dangote Flour Mills Plc 

gained 84kobo, from N8.24 

to N9.08; Cadbury Nigeria 

Plc gained 45kobo, from 

N10.55 to N11; while ETI Plc 

gained 44kobo, from N17.05 

to N17.49. 

Seplat Petroleum Development 

Company Plc recorded 

the biggest loss after 

shedding N10, from N490 

to N480; Lafarge Africa Plc 

followed with a loss of N2, 

from N52 to N50; Nigerian 

Breweries Plc lost 50kobo, 

from N152 to N151.5; Dangote 

Sugar Refinery Plc 

lost 30kobo, from N15.2 to 

CSCS increases automation, efficiencies 

...with TCS BaNCS post trade service solution 

The Central Securities 

Clearing System 

(CSCS) Plc said it 

would increase automation 

and improve efficiencies 

in the Nigerian capital 

market with the deployment 

of TCS BaNCS, a world class 

multi-asset class solution for 

securities depository, clearing 

and settlement. The solution 

replaced the NASDAQ 

Equator which has been in 

use since inception of the 

company in 1997. 

The solution change is 

core to the company’s business 

transformation initiatives 

which aim at improving 

efficiency in depository, 

clearing and settlement 

services. “This is a significant 

milestone for us and a 

demonstration of our commitment 

to bring excellent 

customer service delivery 

and efficiency to the Nigerian 

Capital Market,” said Bola 

Adeeko, the Interim Chief 

Executive Officer of CSCS. 

Speaking further, Adeeko 

said “we are proud of this 

achievement and confident 

that the new solution will 

be beneficial to the teeming 

market participants in particular 

and the Nigerian Capital 

Market in general,” while urging 

them to take advantage of 

the enormous opportunities 

N14.9; while NASCON Plc 

lost 7kobo, from N15.94 to 

N15.87. 

In 3,401 deals, stock traders 

exchanged 174,957,606 

units valued at N1.824billion. 

Actively traded stocks include: 

FBN Holdings Plc, 

Diamond Bank Plc, UBA 

Plc, Zenith Bank Plc, and 

Transcorp Plc. 

Stock traders exchanged 

26,513,121 units 

of FBN Holdings valued 

at N162.103million; 

26,248,021 units of Diamond 

Bank Plc valued at 

N27.532million; 16,126,825 

units of UBA Plc valued at 

N151.905million; Zenith 

Bank Plc’s 15,596,468 units 

valued at N401.367million; 

and Transcorp Plc’s 

14,753,089 units valued at 

N20.208million. 

the new platform offers. 

While listing some of 

the opportunities available 

on the platform, Adeeko 

said that TCS BaNCS, as a 

market infrastructure, will 

drive Straight-Through Processing 

(STP) by providing 

the unique ability to support 

multiple markets and 

asset classes on the same 

platform. It will also support 

various types of account 

ownership structures such 

as Segregated Depository 

Account, Nominee/Special 

Purpose Vehicle Accounts 

and Custodian Accounts. 

According to him, “this 

initiative aligns very closely 

with one of our strategic objectives, 

which is to improve 

efficiency in our depository, 

clearing and settlement services 

- ultimately, we believe 

our customers and stakeholders 

at large will enjoy 

improved service delivery.” 

He commended the 

market participants for their 

cooperation and support 

towards ensuring that the 

transition was a smooth one. 

“Let me appreciate my colleagues 

too for demonstrating 

excellent team spirit and perseverance 

while the project 

lasted. This would not have 

been possible without them,” 

Adeeko said.



C002D5556 

Live @ the Stock exchange 

Prices for Securities Traded as of Monday 30 October 2017 

Company 

Company 

Market cap(nm) Price (N) Change Trades Volume Market cap(nm) Price (N) Change Trades Volume 

PRICES FOR MAIN BOARD SECURITIES (Equities) 

BANKING 

ZENITH INTERNATIONAL BANK PLC 816,308.84 26.00 1.13 234 15,596,468 

234 15,596,468 

OTHER FINANCIAL INSTITUTIONS 

FBN HOLDINGS PLC 220,756.05 6.15 -0.81 316 26,513,121 

316 26,513,121 

550 42,109,589 

BUILDING MATERIALS 

DANGOTE CEMENT PLC 3,731,871.12 219.00 0.01 41 1,169,773 

41 1,169,773 

41 1,169,773 

591 43,279,362 

CROP PRODUCTION 

FTN COCOA PROCESSORS PLC 1,100.00 0.50 - 1 1,200 

OKOMU OIL PALM PLC. 62,004.15 65.00 - 12 67,474 

PRESCO PLC 66,500.00 66.50 - 16 40,124 

29 108,798 

FISHING/HUNTING/TRAPPING 

ELLAH LAKES PLC. 511.20 4.26 - 0 0 

0 0 

LIVESTOCK/ANIMAL SPECIALTIES 

LIVESTOCK FEEDS PLC. 2,550.00 0.85 -4.49 26 1,931,234 

26 1,931,234 

55 2,040,032 

DIVERSIFIED INDUSTRIES 

A.G. LEVENTIS NIGERIA PLC. 1,482.48 0.56 - 1 5,110 

JOHN HOLT PLC. 194.58 0.50 - 0 0 

S C O A NIG. PLC. 2,111.93 3.25 - 0 0 

TRANSNATIONAL CORPORATION OF NIGERIA PLC 56,513.30 1.39 -1.42 129 14,753,089 

U A C N PLC. 34,806.06 18.12 0.39 34 1,134,565 

164 15,892,764 

164 15,892,764 

BUILDING CONSTRUCTION 

ARBICO PLC. 711.32 4.79 - 0 0 

0 0 

INFRASTRUCTURE/HEAVY CONSTRUCTION 

JULIUS BERGER NIG. PLC. 38,715.60 29.33 - 14 74,150 

ROADS NIG PLC. 165.00 6.60 - 0 0 

14 74,150 

REAL ESTATE DEVELOPMENT 

UACN PROPERTY DEVELOPMENT CO. LIMITED 7,015.67 2.70 - 7 263,000 

7 263,000 

REAL ESTATE INVESTMENT TRUSTS (REITS) 

SKYE SHELTER FUND PLC 2,000.00 100.00 - 0 0 

UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 11,305.89 45.22 - 0 0 

UPDC REAL ESTATE INVESTMENT TRUST 26,682.70 10.00 - 0 0 

0 0 

21 337,150 

AUTOMOBILES/AUTO PARTS 

DN TYRE & RUBBER PLC 2,386.33 0.50 - 0 0 

0 0 

BEVERAGES--BREWERS/DISTILLERS 

CHAMPION BREW. PLC. 19,260.56 2.46 - 5 13,250 

GOLDEN GUINEA BREW. PLC. 242.22 0.89 - 0 0 

GUINNESS NIG PLC 219,870.63 100.38 0.34 65 786,508 

INTERNATIONAL BREWERIES PLC. 162,077.06 49.20 - 12 25,928 

NIGERIAN BREW. PLC. 1,201,258.78 151.50 -0.33 186 817,305 

268 1,642,991 

BEVERAGES--NON-ALCOHOLIC 

7-UP BOTTLING COMP. PLC. 57,653.13 90.00 - 3 1,720 

3 1,720 

FOOD PRODUCTS 

DANGOTE FLOUR MILLS PLC 45,400.00 9.08 10.19 111 4,323,261 

DANGOTE SUGAR REFINERY PLC 178,800.00 14.90 -1.97 99 1,583,612 

FLOUR MILLS NIG. PLC. 78,727.12 30.00 - 43 247,910 

HONEYWELL FLOUR MILL PLC 16,732.72 2.11 4.98 53 1,986,963 

MULTI-TREX INTEGRATED FOODS PLC 1,861.25 0.50 - 0 0 

N NIG. FLOUR MILLS PLC. 1,028.21 5.77 - 1 5,000 

NASCON ALLIED INDUSTRIES PLC 42,046.59 15.87 -0.44 26 446,469 

UNION DICON SALT PLC. 3,676.41 13.45 - 1 30,000 

334 8,623,215 

FOOD PRODUCTS--DIVERSIFIED 

CADBURY NIGERIA PLC. 20,660.22 11.00 4.27 77 1,248,416 

NESTLE NIGERIA PLC. 974,967.19 1,230.00 - 42 39,316 

119 1,287,732 

HOUSEHOLD DURABLES 

NIGERIAN ENAMELWARE PLC. 1,766.22 23.23 - 0 0 

VITAFOAM NIG PLC. 2,949.91 2.83 4.81 21 397,438 

21 397,438 

PERSONAL/HOUSEHOLD PRODUCTS 

P Z CUSSONS NIGERIA PLC. 91,320.97 23.00 - 35 463,658 

UNILEVER NIGERIA PLC. 161,849.41 42.78 - 27 53,546 

62 517,204 

807 12,470,300 

BANKING 

ACCESS BANK PLC. 284,072.68 9.82 -0.41 174 4,682,230 

DIAMOND BANK PLC 23,623.60 1.02 -1.92 117 26,248,021 

ECOBANK TRANSNATIONAL INCORPORATED 320,933.65 17.49 2.58 26 211,542 

FIDELITY BANK PLC 46,939.17 1.62 -2.41 95 8,140,715 

GUARANTY TRUST BANK PLC. 1,236,109.53 42.00 -0.02 156 4,366,684 

JAIZ BANK PLC 17,973.19 0.61 1.67 29 3,229,858 

SKYE BANK PLC 6,940.15 0.50 - 13 597,930 

STERLING BANK PLC. 29,078.32 1.01 -3.81 66 1,231,916 

UNION BANK NIG.PLC. 104,832.64 6.19 0.98 53 514,981 

UNITED BANK FOR AFRICA PLC 326,262.48 9.54 2.47 185 16,126,825 

UNITY BANK PLC 6,078.46 0.52 3.85 21 2,620,516 

WEMA BANK PLC. 19,287.23 0.50 - 31 7,092,947 

966 75,064,165 

INSURANCE CARRIERS, BROKERS AND SERVICES 

AFRICAN ALLIANCE INSURANCE COMPANY PLC 10,292.50 0.50 - 0 0 

AIICO INSURANCE PLC. 3,742.31 0.54 - 10 126,670 

AXAMANSARD INSURANCE PLC 20,475.00 1.95 -3.47 5 68,140 

CONSOLIDATED HALLMARK INSURANCE PLC 3,000.00 0.50 - 0 0 

CONTINENTAL REINSURANCE PLC 13,588.30 1.31 - 3 84 

CORNERSTONE INSURANCE COMPANY PLC. 7,364.75 0.50 - 0 0 

EQUITY ASSURANCE PLC. 7,000.00 0.50 - 1 1,000 

GOLDLINK INSURANCE PLC 2,411.47 0.53 - 0 0 

GREAT NIGERIAN INSURANCE PLC 1,913.74 0.50 - 0 0 

GUINEA INSURANCE PLC. 3,070.00 0.50 - 0 0 

INTERNATIONAL ENERGY INSURANCE COMPANY PLC 642.04 0.50 - 0 0 

LASACO ASSURANCE PLC. 3,661.72 0.50 - 0 0 

LAW UNION AND ROCK INS. PLC. 3,050.39 0.71 - 6 65,142 

LINKAGE ASSURANCE PLC 7,200.00 0.90 - 0 0 

MUTUAL BENEFITS ASSURANCE PLC. 4,000.00 0.50 - 0 0 

N.E.M INSURANCE CO (NIG) PLC. 6,547.82 1.24 -3.12 26 3,198,920 

NIGER INSURANCE CO. PLC. 3,869.74 0.50 - 0 0 

PRESTIGE ASSURANCE CO. PLC. 2,759.15 0.50 - 2 14,881 

REGENCY ALLIANCE INSURANCE COMPANY PLC 3,334.38 0.50 - 1 1,000 

SOVEREIGN TRUST INSURANCE PLC 4,170.41 0.50 - 0 0 

STANDARD ALLIANCE INSURANCE PLC. 6,455.52 0.50 - 0 0 

STANDARD TRUST ASSURANCE PLC 4,670.54 0.50 - 0 0 

UNIC DIVERSIFIED HOLDINGS PLC. 1,291.15 0.50 - 1 10 

UNITY KAPITAL ASSURANCE PLC 6,933.33 0.50 - 0 0 

UNIVERSAL INSURANCE COMPANY PLC 8,000.00 0.50 - 0 0 

WAPIC INSURANCE PLC 6,691.37 0.50 - 21 843,543 

76 4,319,390 

MICRO-FINANCE BANKS 

FORTIS MICROFINANCE BANK PLC 11,799.67 2.58 - 0 0 

NPF MICROFINANCE BANK PLC 2,858.30 1.25 -2.34 7 127,460 

7 127,460 

MORTGAGE CARRIERS, BROKERS AND SERVICES 

ABBEY MORTGAGE BANK PLC 5,460.00 1.30 - 0 0 

ASO SAVINGS AND LOANS PLC 7,370.87 0.50 - 0 0 

INFINITY TRUST MORTGAGE BANK PLC 6,005.46 1.44 - 0 0 

RESORT SAVINGS & LOANS PLC 5,664.87 0.50 - 0 0 

UNION HOMES SAVINGS AND LOANS PLC. 2,949.22 3.02 - 0 0 

0 0 

OTHER FINANCIAL INSTITUTIONS 

AFRICA PRUDENTIAL PLC 7,400.00 3.70 1.35 68 1,388,211 

CUSTODIAN AND ALLIED PLC 23,527.46 4.00 - 13 348,353 

DEAP CAPITAL MANAGEMENT & TRUST PLC 750.00 0.50 - 0 0 

FCMB GROUP PLC. 21,584.95 1.09 -0.91 69 4,864,649 

NIGERIA ENERYGY SECTOR FUND 411.91 552.20 - 0 0 

ROYAL EXCHANGE PLC. 2,572.69 0.50 - 0 0 

SIM CAPITAL ALLIANCE VALUE FUND 3,313.67 103.24 - 0 0 

STANBIC IBTC HOLDINGS PLC 440,500.00 44.05 - 18 73,520 

UNITED CAPITAL PLC 18,600.00 3.10 1.97 57 789,583 

225 7,464,316 

1,274 86,975,331 

HEALTHCARE PROVIDERS 

EKOCORP PLC. 1,680.29 3.37 - 0 0 

UNION DIAGNOSTIC & CLINICAL SERVICES PLC 1,776.57 0.50 - 0 0 

0 0 

MEDICAL SUPPLIES 

MORISON INDUSTRIES PLC. 91.31 0.60 -4.76 2 68,082 

2 68,082 

PHARMACEUTICALS 

EVANS MEDICAL PLC. 366.17 0.50 - 0 0 

FIDSON HEALTHCARE PLC 5,700.00 3.80 -0.26 52 2,580,117 

GLAXO SMITHKLINE CONSUMER NIG. PLC. 30,136.09 25.20 - 6 60,265 

MAY & BAKER NIGERIA PLC. 2,646.00 2.70 1.89 40 2,779,987 

NEIMETH INTERNATIONAL PHARMACEUTICALS PLC 1,122.23 0.65 - 10 106,621 

NIGERIA-GERMAN CHEMICALS PLC. 556.71 3.62 - 0 0 

PHARMA-DEKO PLC. 487.85 2.25 - 0 0 

108 5,526,990 

110 5,595,072 

COMPUTER BASED SYSTEMS 

COURTEVILLE BUSINESS SOLUTIONS PLC 1,776.00 0.50 - 0 0 

0 0 

COMPUTERS AND PERIPHERALS 

OMATEK VENTURES PLC 1,470.89 0.50 - 0 0 

0 0 

IT SERVICES 

CWG PLC 6,413.06 2.54 - 1 500 

NCR (NIGERIA) PLC. 716.04 6.63 - 0 0 

TRIPPLE GEE AND COMPANY PLC. 524.65 1.06 - 0 0 

1 500 

PROCESSING SYSTEMS 

CHAMS PLC 2,348.03 0.50 - 0 0 

E-TRANZACT INTERNATIONAL PLC 21,000.00 5.00 - 0 0 

0 0 

1 500 

BUILDING MATERIALS 

AFRICAN PAINTS (NIGERIA) PLC. 865.88 2.35 - 0 0 

BERGER PAINTS PLC 2,028.76 7.00 - 6 32,000 

CAP PLC 22,750.00 32.50 - 19 759,849 

CEMENT CO. OF NORTH.NIG. PLC 12,189.77 9.70 - 10 69,849 

FIRST ALUMINIUM NIGERIA PLC 1,076.28 0.51 -1.92 6 461,850 

LAFARGE AFRICA PLC. 274,525.70 50.00 -3.85 52 558,471 

MEYER PLC. 355.93 0.67 - 0 0 

PAINTS AND COATINGS MANUFACTURES PLC 467.82 0.59 - 0 0 

PORTLAND PAINTS & PRODUCTS NIGERIA PLC 1,666.17 2.10 - 0 0 

PREMIER PAINTS PLC. 1,277.97 10.39 - 0 0 

93 1,882,019 

ELECTRONIC AND ELECTRICAL PRODUCTS 

AUSTIN LAZ & COMPANY PLC 2,256.91 2.09 - 0 0 

CUTIX PLC. 1,849.39 2.10 3.96 10 580,170 

10 580,170 

PACKAGING/CONTAINERS 

BETA GLASS PLC. 28,423.41 56.85 - 0 0 

GREIF NIGERIA PLC 387.60 9.09 - 1 28,350 

1 28,350 

104 2,490,539 

CHEMICALS 

B.O.C. GASES PLC. 1,727.42 4.15 - 0 0 

0 0 

METALS 

ALUMINIUM EXTRUSION IND. PLC. 2,124.77 9.66 - 0 0 

0 0 

MINING SERVICES 

MULTIVERSE MINING AND EXPLORATION PLC 2,130.97 0.50 - 1 900 

1 900 

PAPER/FOREST PRODUCTS 

THOMAS WYATT NIG. PLC. 110.00 0.50 - 0 0 

0 0 

1 900 

ENERGY EQUIPMENT AND SERVICES 

JAPAUL OIL & MARITIME SERVICES PLC 3,131.35 0.50 - 0 0 

0 0 

INTEGRATED OIL AND GAS SERVICES 

OANDO PLC 74,464.16 5.99 - 1 1,060 

1 1,060 

PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 

11 PLC 56,108.62 155.60 - 17 12,631 

CONOIL PLC 19,430.66 28.00 - 19 20,150 

ETERNA PLC. 4,694.92 3.60 - 10 85,620 

FORTE OIL PLC. 53,388.70 40.99 7.05 94 313,061 

MRS OIL NIGERIA PLC. 6,974.53 27.46 - 9 4,111 

TOTAL NIGERIA PLC. 81,485.24 240.00 3.11 14 15,528 

163 451,101 

EXPLORATION AND PRODUCTION 

SEPLAT PETROLEUM DEVELOPMENT COMPANY LTD 270,453.39 480.00 -2.04 12 70,004 

12 70,004 

176 522,165 

ADVERTISING 

AFROMEDIA PLC 2,219.52 0.50 - 0 0 

0 0 

AIRLINES 

MEDVIEW AIRLINE PLC 14,820.99 1.52 - 1 1,320 

1 1,320 

AUTOMOBILE/AUTO PART RETAILERS 

R T BRISCOE PLC. 588.18 0.50 - 0 0 

0 0 

COURIER/FREIGHT/DELIVERY 

RED STAR EXPRESS PLC 2,935.69 4.98 - 4 5,000 

TRANS-NATIONWIDE EXPRESS PLC. 161.04 0.81 - 1 2,290 

5 7,290 

HOSPITALITY 

TANTALIZERS PLC 1,605.81 0.50 - 0 0 

0 0 

HOTELS/LODGING 

CAPITAL HOTEL PLC 4,878.66 3.15 - 0 0 

IKEJA HOTEL PLC 3,700.26 1.78 - 0 0 

TOURIST COMPANY OF NIGERIA PLC. 7,862.53 3.50 - 0 0 

TRANSCORP HOTELS PLC 54,798.91 7.21 - 2 2,000 

2 2,000 

MEDIA/ENTERTAINMENT 

DAAR COMMUNICATIONS PLC 6,000.00 0.50 - 0 0 

0 0


BUSINESS DAY 

35

36 BUSINESS DAY C002D5556 

NEWS 

Elumelu invited to speak 

at Obama’s summit 

DAVID IBEMERE 

UBA Chairman 

and African business 

leader, Tony 

Elumelu will be 

speaking at a two-day summit 

hosted by former US 

president Barack Obama 

foundation to inspire and 

empower participants to create 

positive changes in their 

communities from October 

31 – November 1, 2017 in 

Chicago. 

Elumelu the only invited 

African will join Italian 

Prime Minister Matteo Renzi, 

and former US ambassador 

Caroline Kennedy to 

speak on the panel “Building 

Entrepreneurial Ecosystems 

in Emerging Markets” 

According to the Obama 

team, Elumelu was chosen 

for this panel due his role in 

helping budding entrepreneurs 

find their feet in Africa 

and also for his determina- 

Improving on transparency 

and accountability 

is critical factor that will 

make or mar Nigeria’s 

corporate governance, says 

Institute of Chartered Secretaries 

and Administrators of 

Nigeria (ICSAN). 

“Corporate governance as 

a tool for sustainable development 

is very appropriate and 

cannot be over emphasised 

at these moment of obvious 

reasons in Nigeria,” Kola 

Jamodu, chairman, PZ Cussons 

Nigeria plc, said. 

Speaking at the opening 

of the 41st annual conference 

of the ICSAN with the theme, 

“Corporate Governance as a 

Tool for Sustainable Development” 

held in Lagos, Jamodu 

said the whole world was facing 

challenges with sustainable 

development occasioned 

by several factors, prominent 

of which were transparency 

and accountability. 

Media spend drops 7% on account of recession, government policies 

There was 7 percent 

reduction in the 

value of total advertising 

spend for 

2016 against 2015. The spend 

decreased from N97.9 billion 

in 2015 to N91 billion in 2016. 

The drop, according to 

latest Mediafacts, a key media 

resource for marketing 

professionals in West and 

Central Africa released by 

MediaReach OMD, could 

have been accounted for 

by the economic recession 

that started in late 2015 and 

certain policies of the present 

administration, such as 

foreign exchange restriction 

that limited operations of 

companies. 

tion in raising world leaders. 

Early this month while 

announcing the summit, 

Obama said in a video that at 

the inaugural Summit, hundreds 

of leaders from around 

the world will come together 

to exchange ideas, explore 

creative solutions to common 

problems, and experience 

civic art, technology, 

and music from around the 

world and then go back to 

communities to lead others. 

This month tony Elumelu 

foundation hosted 

1,500 African Entrepreneurs, 

Business leaders and Policymakers 

from 54 countries 

in Lagos. 

In the last three years 

the Tony Elumelu Foundation 

Entrepreneurship 

Programme has committed 

over $100 million to 

empowering 10,000 African 

entrepreneurs according to 

Parminder Obe, the TEF’s 

Chief Executive Officer. 

Transparency, accountability will deepen 

corporate governance in Nigeria - experts 

ANTHONIA OBOKOH 

DANIEL OBI 

“Nigeria lack governance 

structure, and even when 

these structures are there, 

they are not followed and have 

contributed to failures of many 

enterprises not only in public, 

but also in private enterprises. 

“We have seen collapse of 

companies due to failure of 

proper corporate governance 

practice. It therefore behooves 

on us all both governed and 

government to join hands 

and ensure that corporate 

governance practices are utilised 

as a tool to bring about 

sustainable development in 

every segments of our country,” 

Jamodu said. 

Samuel Kolawole, president, 

governing council, 

ICSAN, in his address, said 

the gathering of the 2017 

ICSAN conference was to 

take another important step 

towards achieving best practices 

in the corporate sector 

as well as influencing public 

policy direction as part of 

the institute contribution to 

nation building. 

In the recent time, manufacturers 

had decried the 

prevailing harsh business 

operating environment including, 

poor infrastructure, 

insecurity, import restrictions 

and high interest rate 

which had led to some companies 

downsizing or closing 

shops due to the worsening 

high cost of production. 

The worsening environment 

led to many companies 

drastically cutting their 

marketing communication 

budget. 

According to the publication, 

television stations 

attracted the highest advertising 

expenditure of N31.5 

billion (35% of the total media 

spend), which was also 

National, sub-national competitive index 

to boost states’ viability, investment flow 

MODESTUS ANAESORONYE 

National Competitiveness 

Council of Nigeria 

(NCCN), 

a public-private 

sector partnership that 

aims to boost Nigeria’s business 

competitiveness with 

ability to attract local and 

international investment, 

has announced plans to 

launch this Thursday, its 

newest reports on National 

Competitiveness and Sub- 

National Competitive Index. 

According to Chika Mordi, 

CEO of NCCN, these 

reports have become crucial 

for Nigeria’s government and 

private sector to engage in 

developing a clear competitiveness 

agenda and implementing 

vibrant competition 

strategies centred on creating 

the appropriate business 

environment with the aim of 

boosting collective prosperity 

in Nigeria. 

Mordi said over last 20 

months, NCCN working 

… from N97.9bn to N91bn 

L-R: Ope Wemi-Jones, group head, inclusive banking, Access Bank plc; Felix Lee, managing director, CIG Motors; Diana Chan, 

chairman, and Victor Etuokwu, executive director, Access Bank plc, during a MoU signing between Access Bank and GAC Motors 

in Lagos, yesterday. 

a drop against N39 billion 

in 2015. 

The document also put 

the advertising expenditure 

that went to the radio, outdoor 

and press stations at 

N12.6 billion (14%), N28.8 

billion (32%) and N18.1 billion 

(20%), respectively. All 

showed decline from their 

figures in 2015. 

The advertising spend on 

the print media in 2015 was 

N23.7 billion, representing 

a marginal decline of 4 percent 

compared with N25.8 

billion in 2014. Similarly, 

the advertising expenditure 

of N20.1 billion attracted by 

Outdoor last year was lower 

than N20.5 billion recorded 

in 2014. 

with the World Bank, UK’s 

Department for International 

Development (DFID), 

Michael Porter Institute for 

Strategy and Competitiveness 

and the Mexican Institute 

for Competitiveness 

with sponsorship from Ford 

Foundation and support 

from Tony Elumelu Foundation, 

developed the report, 

which he said would spur 

policy adoption and global 

best practice. 

“What we did was to set 

parameters for assessing 

the competitiveness of the 

36-states of the federation 

including the Federal Capital 

Territory, Abuja, and based 

on those parameters that 

have pillars and sub-pillars 

around macro economics, 

human capital, infrastructure, 

trade, settlement and 

enforcement, we came out 

with these reports,” he said. 

According to Mordi, the 

reports, with some shocking 

revelations, involve 8,000 

households, 2,000 business 

surveys, with response rate 

In a move aimed at improving 

supply to households 

and corporate customers, 

the Lagos Water Corporation 

(LWC) has flagged off customers’ 

enumeration exercise 

across the state. 

Lagos, Nigeria’s biggest 

city-state by population (estimated 

at 21m people), currently 

requires about 720 million 

gallons of water per day, 

but the water corporation 

supplies about 210 million 

gallons, leaving most of the 

residents getting their supply 

from private sources. 

However, the state is working 

to deliver the Adiyan Water 

Works (phase II) with the capacity 

to supply 70 million gallons 

per day, in 2018. About three 

of 91 percent, have been 

used to rank each state according 

to their level of competitiveness. 

Some of the revelations 

will be shocking to you because 

there are couple of 

states whose female participation 

in labour force is less 

2 percent, in other words, it 

means that for every 100 employees 

only two are women, 

so such states need to be 

gender sensitive, he said. 

There are some positives 

here and there in terms of 

policies, which will excite 

you, he noted. 

“What we hope is that 

better policies can be transferred 

from those states 

where they have worked to 

the states where it hasn’t 

been done yet. And overall, 

best practice could pull 

the country up and out of 

poverty. We feel that competitiveness 

will drive viable 

path to job rich inclusive 

growth, rather than focus 

on oil revenue all the time,” 

Mordi said. 

“The hope is that these 

reports will drive policy discourse 

around competitiveness 

issues and provide a 

platform for Nigerian policy 

makers, key decision makers in 

business and other stakeholders 

to identify best practice and 

design policies that will result 

in increased collective prosperity 

in the country.” 

Meanwhile, at a panel 

discussion on the theme 

“Competitiveness: The Viable 

Path to Job Rich Inclusive 

Growth held at Ford 

Foundation head office in 

Lagos, experts including 

Mordi; Olufemi Awoyemi, 

founder/CEO, Proshare 

Nigeria Limited; Oluseun 

Onigbinde, co-founder/ 

CEO, Your Budget, as well 

as Eva Kouka, programme 

officer for West Africa, Ford 

Foundation, Lagos office, 

agreed on the need to make 

states competitive if Nigeria 

must overcome its current 

economic challenges and 

move to a broad-based diversified 

economy. 

Lagos Water Corporation moves to improve supply with customers’ enumeration 

JOSHUA BASSEY 

million residents are expected 

to benefit from this alone. 

Muminu Adekunle Badmus, 

managing director of 

LWC, said the ongoing enumeration 

exercise would enable 

the corporation update 

its database of customers and 

position it for efficient and better 

service delivery to the public. 

Badmus told journalists 

on Monday that the exercise 

would also put the corporation 

in a position to ascertain how 

many existing customers get 

regular or intermittent supply, 

identify areas where supply 

might have been disrupted, 

and what was responsible. The 

exercise covers 17 zones where 

the LWC has operations. 

These, according to Badmus, 

include Ikoyi, Victoria 

Island, Victoria Island Annex, 


Lekki, Lagos Island, Surulere, 

Ogudu, Yaba/Ebute Metta, 

Ikeja I & II. Others are Ilupeju, 

Oshodi, Isheri-Oke, Iwaya, 

Oworonshoki and Shomolui. 

Badmus further stated that 

the enumerators consisted 

the corporation’s staff and IBS 

consultancy firm already in the 

field for the exercise, saying, 

“For proper identification, the 

enumerators will be identified 

with Jacket branded with LWC 

and IBS logos and identity 

cards.” 

He urged members of the 

public to support and cooperate 

with the enumerators for 

the success of the exercise, and 

to call customer care lines on: 

07045973012, 07045973013 or 

contact nearest zonal offices of 

the corporation for complaints 

or enquiries.


NEWS 

Edo assembly reduces 2017 

budget by N30.266bn 

IDRIS UMAR MOMOH, Benin 

Edo State House 

of Assembly on 

Monday passed 

a resolution approving 

the 

downward review of the 

state’s 2017 appropriation 

bill by N30.266 billion. 

The House’s resolution 

was sequel to the state governor, 

Godwin Obaseki’s 

letter dated October 16, 2017 

to the House requesting for 

the downward review of the 

appropriation. 

In line with the governor’s 

request, the House reduced 

the budget to N127.92 billion 

from the approved budget 

of N153.18 billion initially 

passed and signed into law 

in February, this year. 

Recall that the state government 

had in October 

13, 2017 after the emergency 

Executive Council 

(EXCO) meeting held at 

Government House said it 

approved the downward review 

of the 2017 budget from 

N153.187billion to N127.921 

billion, representing 16.49 

percent reduction. 

A statement from the 

commissioner for communication 

and orientation, Paul 

Ohonbamu, noted that the 

downward review was occasioned 

by the sub-optimal 

performance of the nation’s 

macro-economic environment. 

Ohonbamu said the 

memo to reduce the budget 

was presented by the commissioner 

for budget and 

planning, saying after careful 

examination and deliberation, 

the EXCO approved a 

revision of the 2017 budget 

from the initial budget 

sum of N153.187 billion to 

N127.921 billion. 

“The creation of new ministries 

as well as the present 

harsh economic realities in 

the country necessitated the 

reduction,” he said. 

In reviewing downward 

the appropriation bill, the 

state government slashed 

the recurrent expenditure 

from N76.5 billion to N66.9 

billion while the capital expenditure 

was also reduced 

from N76.6 billion to N61.8 

billion 

Moving the motion for 

the Consideration of the bill, 

the majority leader, Roland 

Asoro, said the reduction 

in the budget was to allow 

the state government meet 

the prevailing economic 

realities, explaining that the 

reduction was due to the 

dwindling allocations from 

the federation account, arising 

from the fall in oil prices 

at the International market. 

We’ll bring world heavyweight 

champion, Joshua, back to 

Nigeria - OGSG 

RAZAQ AYINLA, Abeokuta 

Ogun State government 

has declared 

that it will bring 

Ogun State-born 

world boxing legend, Anthony 

Joshua, back to be hosted in a 

grand reception in Nigeria very 

soon as he had shown intention 

to visit Sagamu, his homestead, 

and Nigeria as a whole. 

Recall that Anthony Joshua 

successfully defended the 

Heavyweight World Boxing 

title against Carlos Takam at 

the Principality Stadium in 

Cardiff, England, on Saturday. 

Speaking at a press conference 

held in Abeokuta to welcome 

Ogun State delegation 

led to Cardiff by the deputy 

governor, Yetunde Onanuga, 

on Monday, Taiwo Olaoluwa, 

secretary to the state government, 

said the world heavyweight 

champion had indicated 

interest to visit Nigeria 

and homestead in Ogun State 

- Sagamu. 

Adeoluwa, who spoke with 

journalists shortly after the 

weekly State Executive Council 

meeting, described Joshua as 

a pride to the state and the nation 

at large though he might 

have won the title in Nigeria, 

World heavyweight champion 

was groomed in Sagamu and 

had basic education in Ijebu- 

Ode, both in Ogun state. 

C002D5556 

BUSINESS DAY 

37


C002D5556 


NEWS 

Hunt for frontier yield may hasten Nigeria’s return to... 


bond indexes, Barclays and JP 

Morgan. 

The two indexes expelled Nigeria 

due to currency restrictions 

that sparked a liquidity crisis, hammered 

foreign investors and made 

it difficult to repatriate profit. 

US-based JP Morgan kicked Nigeria 

out of its frontier bond index 

in October 2015 and this was soon 

followed by an expulsion from Barclays 

bank’s emerging market local 

currency index in February 2016. 

“Investors are more comfortable 

with where the FX liquidity is 

today and more confident to come 

and take advantage of opportunities 

in Nigeria, although index 

eligibility is still an issue,” said 

Ignacio Temerlin Head of Africa 

Debt Capital Markets, Citi Bank. 

The latest proof of investors’ 

appetite for risk assets with high 

yields came when Tajikistan, a 

small nation in Central Asia with 

a population of 8.7 million, sold 

a 10-year $500 million bond at 7 

percent in September 2017. It was 

oversubscribed. 

The bond represents 7 percent 

of Tajikistan’s gross domestic product 

and dwarfs the $74 million the 

country holds in foreign exchange 

reserves. 

Nigeria’s retention on the Morgan 

Stanley Capital International 

(MSCI) frontier market index after 

some 17 months of deliberations is 

also likely to herald a speedy embrace 

by Barclays and JP Morgan, 

analysts say. 

“The market trend backs up 

a possible re-inclusion on the JP 

Morgan bond index,” said Tajudeen 

Ibrahim, head of research at 

Lagos-based Chapel Hill Denham. 

“We have seen increased foreign 

inflow to fixed income, as 

bond prices are rallying and yields 

are falling. Combine those with the 

stabilising foreign exchange market 

and the increased foreign inflow 

into bonds, and you are more 

convinced that it’s only a matter 

of time before we are restored on 

that index,” Ibrahim said by phone. 

Bond yields across all tenors 

cooled Monday, with exception 

to the 10.70 30-MAY-2018 bond 

which gained 0.06 percent and the 

7.00 23-OCT-2019 which gained 

0.01 percent. Other tenors were 

flat, according to data obtained 

from the FMDQ website. 

Portfolio inflows into bonds 

totalled $USD57.8 million in May, 

according to CBN data, a month 

after the Investor and Exporter 

window was created. Before May, 

there were no foreign inflows into 

Nestle, Dangote Flour revenues surge as FMCG firms... 


Dangote Sugar Plc, Dangote Flour 

Plc, and NASCON Plc. 

It is generally accepted economic 

principles that a weaker currency 

makes it cheaper for foreign 

buyers to purchase domestic goods 

and so makes such goods more attractive 

and benefits manufacturers 

as a result. 

“Nestle and its peers have intensified 

their export strategy to partly 

offset the impact of naira depreciation 

on their cost of imported raw 

materials,” said Tajudeen Ibrahim, 

head of research at Chapel Hill 

Denham Limited. 

Drilling down into the figure 

shows Nestle’ Nigeria’s 43.10 percent 

bonds. The month of June also 

recorded zero inflows. 

However, in July, the month 

with latest data, inflows came to 

$USD17 million. 

Ibrahim of Chapel Hill Denham 

expects subsequent months to 

seen substantial inflows, as the I 

& E window continues to lift confidence 

and puts the debilitating 

liquidity crisis to bed. 

In a statement last week, MSCI 

said Nigerian stocks will remain 

part of its frontier index and are no 

longer under review for a possible 

demotion to a standalone status, 

following the improved foreign 

exchange liquidity triggered by 

newly introduced Investors and 

Exporters window. 

The naira gained 0.25 percent to 

N359.91 per US dollar Monday at 

the said I&E window, according to 

data provided by trading platform, 

FMDQ. 

The Central Bank of Nigeria 

(CBN) in April, 2017 established 

the Investors and Exporters (IE) 

window that allowed for FX transactions 

at market determined 

rates in a bid to ease the concerns 

of foreign investors. The window 

has handled over $15 billion since 

inception, according to data compiled 

by BusinessDay. 

Following the creation of the 

I&E window, the MSCI decision 

on whether to retain Nigeria in its 

Frontier market indexes in June, 

2017, was postponed to ascertain 

jump in profit to N185.52 billion was 

enough to cover a 41.10 percent rise 

in cost of sales as net income surged 

by 4643 percent to N22.14 billion in 

the period under review. 

A breakdown of the Nestle’s sales 

for the period shows that export 

revenues was up 46 percent to N1.9 

billion in the period under review. 

Dangote Flour Mills sales spiked 

by 101.15 percent to N100.28 billion 

while net income surged by 

359 percent to N13.05 billion as at 

September 2017. 

Dangote Flour, up 10.19 percent 

was the best performer on the 

Nigerian Stock Exchange (NSE) 

yesterday. 

An August, 2017 visit by business 

day to the Seme border in 

the effectiveness of the IE window. 

“The MSCI decision is like (the 

latter’s) approval of the I&E window,” 

said Ayodeji Ebo, managing 

director of financial advisory firm, 

Afrinvest Securities Limited. 

“With the MSCI hurdle crossed, 

returning to the JP Morgan bond 

index is the next stop,” Ebo said 

by phone. 

In October 2012, Nigeria became 

the second African country 

after South Africa, to be listed in 

the JP Morgan bond index, which 

tracks bond yields in emerging 

markets, after removing a requirement 

that foreign investors hold 

government bonds for a minimum 

of one year before exiting. 

However, things turned sour 

for the continent’s most populous 

nation, when in October 2015, the 

United States-based lender kicked 

it out of its index- tracked by funds 

with a combined value in excess 

of $200 billion- due to the lack of 

liquidity and transparency in the 

nation’s foreign exchange market. 

This FX crisis and Nigeria’s removal 

from the index, forced several 

global funds to sell Nigerian bonds, 

triggering an unprecedented capital 

flight, raising borrowing cost for the 

government and creating panic in 

an already constrained economy, 

which later pushed the economy 

into a debilitating recession. 

Improved oil prices and production 

and the creation of a separate 

window for Investors called the 

Investors and Exporters window 

have boosted liquidity, staging a 

comeback for investors. 

Lagos found that trucks loaded 

with goods coming from Nigeria 

are passing through the border to 

other West African countries. 

“A lot of Dangote trucks, Flour 

Mills and others are coming from 

Nigeria carrying flour, sugar and 

the likes to sell across the West Africa 

region,” said Monday Akpa, a 

Nigeria who is trading at the Seme 

boarder. 

However, the lower Naira has 

raised the price of imported raw 

material as the cumulative cost of 

sales of the 8 firms spiked by 41.45 

percent, more than double the 

15.98 percent September inflation 

figure. 

FMCGs were hard hit by dollar 

scarcity from a sharp drop in 

oil prices in 2016 which made it 

difficult for them to import raw 

Buhari to restructure NIA, sacks Lawal, Oke.... 


L-R: Tiko Okoye, managing director/CEO, Fortis Microfinance Bank; Akin Lawal, managing director/CEO, 

NPF Microfinance Bank; Tony Okpanachi, managing director/CEO, Development Bank of Nigeria (DBN), 

and Godwin Ehigiamusoe, managing director/CEO, LAPO Microfinance Bank, during the commencement of 

lending activities by DBN to Participating Financial Institutions in Abuja, yesterday. 

materials and equipment to meet 

production. Margins were also hurt 

due to the economic downturn. 

However, there is relief for these 

firms as the introduction of the 

investors’ and Exporters’ window 

by the apex bank in April and the 

subsequent liberalization of the 

foreign exchange market has resulted 

in increased dollar supply. 

Analysts at FBN Quest expect 

Nestle, like its peers, to continue to 

contend with the macroeconomic 

headwinds in 2018. 

“In our view, sector leaders 

like Nestle are likely to fare better 

compared with competition. Given 

recent foreign exchange interventions 

by the central bank we believe 

imported competition will ultimately 

start to stage a comeback,” 

said analysts at FBN Quest. 

medical trip to London. 

Adesina noted that the President 

had studied the report, 

“which investigated allegations 

against the suspended Secretary to 

the Government of the Federation, 

Babachir David Lawal, and the 

Director General, NIA, Ayo Oke. 

“The President accepted the 

recommendation of the panel to 

terminate the appointment of Mr 

Lawal, and has appointed Mr Boss 

Mustapha as the new Secretary to the 

Government of the Federation. The 

appointment takes immediate effect.” 

According to Adesina, “President 

Buhari also approved the 

recommendation to terminate 

the appointment of Ambassador 

Oke, and has further approved 

the setting up of a three-member 

panel to, among other things, look 

into the operational, technical 

and administrative structure of 

the Agency and make appropriate 

recommendations.” 

The new SGF, Boss Mustapha, 

is a lawyer, management consultant, 

politician, businessman and 

boardroom guru of considerable 

repute, and hails from Hong Local 

government of Adamawa State, 

same local government as the 

sacked Babachair Lawal. 

Until his current appointment, 

he was the managing director/CEO 

of the National Inland Waterways 

Authority (NIWA). 

Meanwhile, the acclaimed national 

leader of the All Progressives Congress 

(APC) party, Ahmed Tinubu, 

has declined comment on President 

Buhari’s 2019 presidential ambition. 

His meeting with President 

Buhari came immediately after 

Buhari had met separately with the 

national chairman of the party, John 

Odigie-Oyegun and the leadership 

of the National Assembly represented 

by Senate president, Bukola 

Saraki, and speaker of the House of 

Representatives, Yakubu Dogara. 

Tinubu came in just as Oyegun 

and the NASS leadership were 

leaving the Presidential Villa. 

But speaking with State House 

Correspondents after the meeting 

with the President yesterday, Tinubu 

who said he had confidence 

in the leadership of Buhari and the 

current administration, however, 

refused to say a word on the 2019 

presidential election. 

When asked his opinion on the 

current move by different groups 

calling for the President to run in 

2019, he simply replied that such 

should not be discussed with him; 

“Don’t discuss that one with me. 

“I just met with the President. 

Our discussion was fruitful, productive 

and it was about the country 

and leadership as a whole. And 

that got him excited and happy.” 

Asked about his alleged displeasure 

about the direction of government 

since the last election, Tinubu 

described reports of his unhappiness 

as “fake news,” adding that “I 

have confidence in this President, 

there is no doubt about that.” 

According to Tinubu, “We 

worked hard to bring about the 

government, there are certain 

things that are unpredictable and 

those are things that can lean itself 

to gossips, insinuations and all of 

that. But once you create leadership 

and is functioning you don’t 

have to babysit that leadership, 

unless there is a loss of confidence 

and I don’t have that. 

“You know me. I’m not known 

to shy away from talking my mind 

and rebelling if it is necessary and 

taking charge of things that I believe 

are necessary. 

“What is the myth in this leadership 

thing? What is cable? It Is a 

myth. We are the party of the people 

for the people and by the people 

and this is democratic environment. 

“Each of us have our roles to 

play and that is why we are playing 

it. I don’t believe in the myth, I 

believe in confidence building, the 

trust that we have in the president. 

In the journey of democracy you 

are going to have twists and turns, 

you are going to have conflicts. 

Conflicts resolution mechanisms 

is inbuilt on how you handle your 

party and the governance and the 

party are joined by the hips.” 

On allegations that there is 

panic ahead of the party’s NEC 

meeting coming up today, and efforts 

to mend fences ahead of the 

meeting, Tinubu denied the rifts, 

saying, “Did I tell you that? Why 

do you want to know; are you a 

member of our party?” 

Tinubu also assured that the 

party was on course, adding however, 

that it was not easy to “face 

the kind of challenges Buhari’s 

government faced. 

“Can you go back to the history 

of 16 years of the PDP? APC 

government is on course and will 

remain on course, and we will 

remain focused to those necessary 

things about development, welfare 

and progress of our people.


Access Bank, GAC Motors crash car prices 

HOPE MOSES-ASHIKE 

Access Bank plc and 

Guangzhou Automobile 

Group (GAC 

Motors) have collaborated 

to give value to 

Nigerians who desire to own 

a car at affordable prices 

through a financing scheme 

that covers purchase on the 

GA3 S, GS4 and GS8 models 

of the GAC Motors. 

Consequently, the two 

firms on Monday signed a 

memorandum of understanding 

(MoU) in Lagos, 

which allows customers of 

Access Bank access finance to 

purchase the latest brands of 

GAC at discounted price with 

a reduced interest rate. 

According to Victor Etuokwu, 

executive director, 

personal banking division, 

Access Bank, the focus of the 

partnership is on affordability 

and cost savings. He explained 

that Nigerians would drive the 

cars with 10 percent equity 

contribution. Meanwhile, the 

standard equity contribution 

is 30 percent. 

The financing scheme 

by the two organisations in- 

NAMA boosts 

critical manpower 

with 40 ATCOs 

IFEOMA OKEKE 

Worried by the 

depleting number 

of Air Traffic 

Control Officers 

in its employ as a result of 

ageing workforce, the Nigerian 

Airspace Management 

Agency (NAMA) has recently 

engaged the services of over 

40 Air Traffic Control cadets 

to undergo various levels of 

training as recommended 

by the Nigerian Civil Aviation 

Authority (NCAA). 

Making this revelation at 

the recent annual general 

meeting of the Nigerian Air 

Traffic Controllers Association 

(NATCA) in Uyo, the 

Akwa Ibom State capital, 

Fola Akinkuotu, managing 

director of NAMA, who said 

his administration placed 

premium on safety over any 

other consideration, noted 

that efforts were underway 

to increase the above number 

to a level consistent with 

global best practices. 

Akinkuotu said in line 

with his determination to 

enhance safety of the airspace, 

a total of 150 Air 

Traffic Controllers have in 

the past 10 months of his 

administration been trained 

in different cadres and specializations 

of Air Traffic 

Control. 

He listed these trainings 

to include Basic ATCO 

Course (Aerodrome and Approach), 

Area/Airways Non- 

Radar Control, Aeronautical 

Search and Rescue Mission 

Coordinators Course as well 

as other management skills 

development workshops 

and conferences, aimed at 

sharpening the skills of ATC 

systems managers. 

cludes free comprehensive 

insurance in the vehicles 

purchased for the first one 

year. With this partnership, 

the interest rate has also been 

brought down to 24 percent 

as against 28 to 30 percent 

obtainable in the banking 

industry. He said the bank 

could support people who 

want to buy a fleet of cars by 

arranging deeper discount 

rate, saying, “We are passionate 

about our customers 

and the Nigerian economy 

and that is why we are in this 

partnership.” 

Speaking at the signing of 

the MoU, Diana Chan, chairman, 

Choice International 

group, said, “We have two 

strong brands, GAC, one of 

the best car makers in China, 

and Access Bank which is 

passionate about customers 

coming together to give 

Nigerians the chance to buy 

new cars with high durability 

at low cost.” 

According to Chan, the 

partnership is to enable more 

Nigerians afford high-end vehicles, 

adding that the output 

of the partnership will come 

in short term. 

Osun harps on 

peace as tool for 

societal integration 

BOLA BAMIGBOLA, OSOGBO 

Osun State government 

has canvassed 

for sustainable 

peace as 

a way of integrating societies 

across borders. 

This was disclosed by the 

state’s Commissioner for Regional 

Integration, Bola Ilori, 

while presenting to the press, 

Wale Alabi, who was recently 

appointed senior special 

adviser to the governor on 

regional integration. 

He said the administration 

of Governor Rauf Aregbesola 

in collaboration with 

other governments in the 

South West region, was working 

towards fostering peace 

and harmony in the region 

through societal integration. 

This, according to Ilori, 

requires right orientation 

and constant interactions 

among youth for positive 

socio-economic impact. 

“We are looking at a generation 

where people would 

be able to collaborate beyond 

boundaries, we are 

concerned about the future 

of our race and we want our 

youths to be productive and 

active in the affairs of the 

government. 

“We are working towards 

encouraging youths’ participation 

in the affairs of the 

government and to enlighten 

them on regional integration,” 

Ilori said. 

Speaking on the achievements 

of Governor Aregbesola 

within the last seven 

years, Ilori noted that Osun, 

with the various initiatives of 

the present administration, is 

rated second with the least 

poverty rate by the United 

Nations in South West region. 

C002D5556 

BUSINESS DAY 

39 

NEWS 

L-R: Tunde Mabawonku, CFO, Wema Bank plc; Ronke Akinpelu, head, treasury marketing, Wema Bank plc; Kenneth Ero, 

GTL; Ademola Adebise, DMD, Wema Bank plc; Tumi Sekoni, FMDQ; Moruf Oseni, executive director, retail, Wema Bank, 

and Kayode Bakare, treasurer, Wema Bank plc, at the signing of Wema Bank’s Series I Commercial Paper at FMDQ. 

Development Bank of Nigeria to 

lend N5bn to over 20,000 MSMEs 

ONYINYE NWACHUKWU, Abuja 

Development 

Bank of Nigeria 

(DBN) is to 

lend some N5 

billion, longterm 

money to over 20,000 

Micro, Small and Medium 

Enterprises (MSMEs) in 

commencement of its first 

mandate - lending activities 

to the MSMEs. 

The loan would be disbursed 

through three selected 

Participating Financial 

Institutions, including Fortis 

Microfinance Bank, LAPO 

Microfinance Bank and NPF 

Microfinance Bank, which 

are all national MFBs. 

Announcing this in Abuja, 

DBN managing director, 

Tony Okpanachi, said the 

loan rates were not predetermined 

but that pricing 

would depend on market 

rates, saying, “Our pricing 

Alaghodaro Investment Summit: Conglomerates, MSMEs jostle for sponsorship deal 

As preparations rev 

up for the maiden 

Edo State Alaghodaro 

Investment 

Summit, small, medium and 

large-scale companies are 

jostling for sponsorship slots 

of the event, which will host 

over 3,000 participants. 

According to the organisers, 

sponsors may be categorised 

into Platinum, Gold, 

Silver and Bronze right holders 

to accommodate the deluge 

of sponsorship requests 

from companies, ranging 

from quoted companies to 

small and medium scale 

enterprises. 

With this development, 

the sponsors are well on 

their way to deflecting the 

state government’s financial 

commitment to the summit, 

by making it a private sector 

driven event. 

The scampering for sponis 

quite pragmatic. We are 

referencing some specific 

instruments in the market.” 

Okpanachi explained 

that the risk profile of the 

different Participating Financial 

Institutions (PFIs) 

matters, but that they would 

benchmark rates against 

major instruments like the 

Treasury Bill rates or the 

bond, whether it was long or 

short tenor. 

“In the short tenor, we 

benchmark treasury bills 

rate and in the long tenor, we 

benchmark the bond rate, 

plus some premium based 

on the risk profile of the PFIs, 

that is our model. 

“But ultimately, we will 

ensure the end borrowers 

get cheaper rate than what 

they have been getting before,” 

he added. 

According to Okpanachi, 

DBN loan repayment tenure 

is flexible of up to 10 years 

sorship rights is fallout of the 

huge interest in the summit 

by investment gurus, manufacturers 

and industrialists, 

who are aiming to exploit the 

state’s enormous potential. 

The summit also recently 

got a boost with the endorsement 

by the London Stock 

Exchange (LSE), representatives 

of which would be at the 

event next month. 

It was gathered that entrepreneurs, 

artists, micro, small 

and medium scale enterprises 

(MSMEs), conglomerates, 

stock exchanges, Nigerians in 

the Diaspora and many more 

are among those jostling for 

sponsorship slot. 

Alaghodaro, which 

means ‘progress,’ is a 

brand-child of the state 

government to showcase 

investment potential in its 

30-year grand plan and will 

provide business leaders, 

with 18 months moratorium 

period. The Nigerian 

economy is powered by the 

MSMEs, which are largely 

unstructured. 

Figures from the National 

Bureau of Statistics indicate 

that there are over 37 million 

MSMEs with activities within 

the segment accounting for 

over 50 percent of the country’s 

GDP. 

The DBN commenced in 

March 2017 as a Wholesale 

Development Finance Institution 

to then provide sustainable 

financing through 

eligible PFIs, which would, 

in turn, lend to end-borrowers- 

the MSMEs for the 

development of that critical 

sector. 

With a vision to be Nigeria’s 

primary development finance 

institution; promoting 

growth and sustainability, 

DBN seeks to fulfil three key 

mandates, including lending 

industrialists, the academia 

and investors opportunity 

to key into the plans. 

The three-day summit 

will hold from November 10 

to 12, at Edo Hotels, Okada 

Avenue, Benin City. 

Recall that the state governor, 

Godwin Obaseki, 

inaugurated the organising 

committee for the summit 

at the Government House, 

in Benin City, recently. 

Headed by Julius Ihonvbere, 

a professor, the organising 

committee will 

coordinate planning and 

ensure the smooth running 

of the summit. 

Enquiries for intending 

sponsors at the event Local 

Organizing Committee 

(LOC) Secretariat showed 

that aside the manufacturing 

heavyweights already 

signed up to attend, entrepreneurs 

are showing imto 

MSMEs, offering Partial 

Credit Guarantees as well 

as Capacity Building for the 

sector. 

Explaining why the DBN 

rates cannot be cheaper 

at least in the short run, 

Okpanachi said the DBN was 

crafted, to be a long-term, 

private sector-led institution 

which would be self sustaining, 

and could eventually 

go to the market, local and 

international to raise funding 

for its business. 

When asked of the specific 

rate, which the institution 

would be lending, he 

stated, “… we benchmark 

against the current macroeconomy 

rates so that as the 

macroeconomic situation 

improves and rates are going 

down, our rates too will go 

down unlike saying putting 

a fixed rate, irrespective of 

whatever macroeconomic 

situation. 

mense interest in participating 

at the event. 

Businesses and companies 

domiciled in the state 

are also putting their books 

in order to showcase prospects 

for partnership and 

collaboration. 

Dignitaries expected at 

the summit include President 

Muhammadu Buhari; 

Vice President Yemi Osibanjo; 

minister for industry, 

Okechukwu Enelamah; 

minister of state for health, 

Osagie Ehanire. 

Others are former Governor 

of Cross River State, 

Donald Duke; former Inspector 

General of Police (IGP) 

and current chairman of the 

Taskforce for the implementation 

of the Edo State Anti- 

Community Development 

Association Law, Solomon 

Arase; Senator Ben Murray 

Bruce, and many more.


BUSINESS DAY 

A1


A2 BUSINESS DAY 

C002D5556 

NEWS 

Nigeria signs agreement with Russia’s 

Rosatom to build nuclear plant 

ISAAC ANYAOGU 

Russia’s stateowned 

Rosatom 

and Nigeria have 

signed agreements 

for the 

construction and operation 

of a nuclear power plant and 

research centre, according to 

a statement from Rosatom 

yesterday. 

“The development of nuclear 

technologies will allow 

Nigeria to strengthen its 

position as one of the leading 

countries of the African 

continent,” Anton Moskvin, 

Rosatom’s vice president 

for overseas marketing and 

business development. 

Experts say nuclear energy 

is economically competitive 

and environmentally 

safer, has low operational 

cost and long life spans, 

making it a viable alternative 

for long-term energy security, 

especially for Nigeria 

searching for solutions to its 

intractable energy problem. 

Charles Dokubo, researcher 

at Nigerian Institute 

of International Affairs 

US government partners EFCC, Lagos fraud unit in fight against cybercrime 

JUMOKE AKIYODE LAWANSON 

United States government 

through 

its Consulate 

General in Lagos 

has revealed its ongoing 

partnership with the Economic 

Financial Crimes 

Commission (EFCC) and 

the Lagos State fraud unit to 

fight cybercrime in Nigeria 

and increase education and 

awareness on crimes perpetuated 

online. 

During the 2017 National 

Cybersecurity Awareness 

Month event held in Lagos 

last week, Rolland Avedician, 

assistant legal attaché 

of the United States Consulate 

General in Nigeria, 

told BusinessDay that the 

Federal Bureau of Investigation 

(FBI) was working 

with the EFCC and the 

special fraud unit in Lagos 

to fight cybercrime. 

“We work with evidence 

collected here in Nigeria 

and work with our court 

World Savings Day: Obaseki tasks financial institutions on unbanked population 

Governor of Edo State 

Godwin Obaseki 

has challenged financial 

institutions 

across the world to design 

products that will appeal to 

the millions of the world’s 

unbanked population to boost 

liquidity in the banks and 

safeguard the future of savings 

account holders. 

Obaseki made the call on 

Monday, in commemoration 

of the World Savings Day, 

marked on October 31, every 

year. He also assured that the 

long-term goal of Alaghodaro 

as envisioned by his administration 

would address the several 

challenges of urbanisation 

in an earlier comment, dispels 

fears associated with 

nuclear energy. “Inasmuch 

as nuclear reactors are very 

dangerous human beings 

have developed ways of managing 

them even countries 

that are even less stable than 

Nigeria has got their nuclear 

reactors working for decades 

so I doubt that Nigeria would 

be incapable of managing 

nuclear technology. 

“Also the plants will come 

with a dedicated maintenance 

professionals as part 

of the deal and a nuclear 

reactor is refilled every 18 

months so it will handled 

by them. “ 

The President accepted 

their recommendations and 

directed the Ministry of Science 

and Technology to 

align the NAEC programme 

with overall national policy 

on power, create a regulatory 

framework and consider 

various options for raising 

the amounts required for 

funding the planned nuclear 

plants. The proposal never 

saw the light of day. 

Nigeria has a research 

systems and for Nigerians; 

we assist the local government 

here to get cyber 

criminals prosecuted. 

“A lot of Nigerians live 

in the United States, especially 

in the Houston and 

Atlanta areas. If they commit 

crimes in the US, we 

bring that evidence back 

to Nigeria and EFCC or 

special fraud units located 

prosecute them in Abuja,” 

Avedician said. 

Delivering his remarks 

at the event, John Bray, US 

Consul General, stated that 

the cyber security awareness 

campaign had become 

more necessary now with 

the huge amounts of money 

being lost globally as a result 

of cyber attacks. 

“All around the globe, 

we have seen individuals, 

companies and governments 

become the victims 

of cyber attacks and Cybersecurity 

Ventures, which is 

a private enterprise in the 

United States, predicts that 

in the state’s urban centres. 

The governor’s assurance 

is on the commemoration of 

the World Cities Day, which 

is also marked on October 31, 

each year. 

According to the governor, 

“the complex processes 

involved in opening savings 

account, the cold reception 

given to the fairly literate and 

non-literate customers, and 

the lack of adequate incentives 

for savings culture among 

other factors discourage many 

people from taking their money 

to the bank.” 

He stressed that “banking 

need not be elitist or flamboyant, 

especially in developing 

economies and advised 

reactor at Ahmadu Bellow 

University in Zaria, Kaduna 

state, Nigerian Research 

Reactor-1 (NRR-1), which is 

used for training purposes 

and is powered by enriched 

uranium. It was built by the 

Chinese and commissioned 

in 2004 under the administration 

of former President 

Olusegun Obasanjo 

In 2012, Nigeria signed a 

deal with Russia’s Rosatom 

Corp to build four nuclear 

power plants at Geregu, Kogi 

and Itu, Akwa Ibom state for 

$80 billion on a build, own, 

operate and transfer (BOT) 

arrangement which is still 

not delivered. 

The earlier the agreement 

was to cooperate on the design, 

construction, operation 

and decommissioning of the 

facility. A further three nuclear 

plants were planned, 

taking total capacity to 4,800 

megawatts by 2035, with 

each facility costing $20 billion. 

The first Nigerian plant 

is billed to be operational in 

2025. It is not immediately 

clear if this agreement is a 

different one. 

the global community will 

lose more than $6 trillion 

annually by 2021. 

“For this reason, in 2009 

President Obama called for 

an increase in education 

and dialogue about cyber 

security in the cyberspace 

Security Review. 

“As part of this policy 

review, the Department of 

Homeland Security created 

an ongoing Cyber security 

awareness campaign – Stop. 

Think.Connect. 

‘Stop.Think.Connect. is 

a national public awareness 

campaign designed to raise 

awareness of cyber security 

and to be more vigilant 

about practicing safe online 

habits,” Bray said. 

Commending the initiative, 

Dolapo Badmus, 

the police public relations 

officer (PPRO), Lagos State 

Command, said cyber 

criminals had become a 

menace in the society and 

must be tackled appropriately. 

bankers to be more creative 

in reaching out to the unbanked 

population, most of 

them in rural and peri-urban 

areas, and speak to them in 

languages they understand to 

win their confidence to save 

their earnings.” 

Obaseki further said that 

this year’s theme: “Our Future 

Starts with Savings” is 

apt and added that “A good 

saving culture is healthy for 

financial institutions, the 

economy as well as the account 

holders. He explained 

that people who save money 

in banks support the growth 

of the economy and secure 

their hard earned money 

from being lost to fire or theft.

Tuesday 31 Octoer 2017 

FT FINANCIAL TIMES 

C002D5556 

BUSINESS DAY 

A3 

IMF warns volatility products 

loom as next big market shock 

World Business Newspaper 

Eurozone economic 

confidence surges 

to highest level 

since 2001 

Germany leads the way as bloc enjoys robust 

recovery in industry, retail and construction 

MEHREEN KHAN 

Economic confidence in the 

eurozone has surged to its 

highest level since the early 

years of monetary union, as 

the bloc enjoys a surprisingly 

robust recovery in a year that has 

seen major European elections. 

Germany led the European Commission’s 

official monthly measure 

which surveys confidence in sectors 

across the EU’s 28 member states, 

turning in the best performance in 

the eurozone. A month after Angela 

Merkel’s Christian Democrats 

emerged from elections as the biggest 

party in parliament, the country’s 

economic confidence rose 2.1 points 

to reach a six-year high in October. 

Confidence across the eurozone as 

a whole rose 0.9 points to 114.2 — its 

highest level since January 2001 and 

the 14th consecutive monthly rise. October’s 

uptick was driven by strength 

across the bloc’s major economic 

sectors, including industry, retail and 

construction. 

The figures suggest the bloc’s recovery 

has further to run this year with 

growth already accelerating at its best 

annual rate since the eurozone sovereign 

debt crisis and unemployment at 

its lowest in nine years. 

In a sign of Spain’s businesses 

resilience, the Catalonia crisis did not 

dent the country’s economic confidence 

measure which rose 0.3 points 

to a near two-year high. Official figures 

show Spain’s economy was broadly 

unaffected in the run-up to the Catalan 

referendum on October 1. The country’s 

quarterly GDP growth slipped to 

0.8 per cent from 0.9 per cent in the 

three months to September. 

Special counsel Robert Mueller 

has charged three individuals 

involved in Donald Trump’s 

2016 presidential campaign as part 

of his criminal probe into Russia’s 

role in the 2016 election. 

Paul Manafort, Donald Trump’s 

campaign manager during part of 

the 2016 US presidential election, 

and Richard Gates, another former 

campaign official, have been 

indicted by a federal grand jury on 

12 counts. 

“Political tensions continue to have 

little effect on economic sentiment this 

year,” said Bert Colijn, senior eurozone 

economist at ING. “The surprisingly 

healthy economy trumps political risks 

in terms of sentiment for the moment.” 

Outside the eurozone, the UK 

registered a healthy 1.5 point jump in 

its measure of economic confidence, 

while France was the only blot among 

the major economies, slipping 1.6 

points in October to a three-month 

low. 

Official GDP numbers for the eurozone’s 

third quarter will be released 

on Tuesday and are expected to show 

a slight slowdown in quarterly growth 

from a pace of 0.6 per cent to 0.5 per 

cent in the three months to September. 

But economists said the October sentiment 

figures would help the economy 

pick up momentum towards the end 

of the year. 

“While we expect tomorrow’s GDP 

data to reveal that quarterly growth 

slowed in Q3, we suspect that growth 

will rebound to about 0.6 per cent 

in the fourth quarter,” said Stephen 

Brown at Capital Economics. 

“That would result in annual GDP 

growth of 2.2 per cent in 2017,” he 

added. 

The eurozone’s industrial sector, 

which accounts for a quarter of the 

bloc’s GDP, is now in its rudest health 

since 2000, according to the European 

Commission, while the construction 

sector has bounced back from its precrisis 

levels. 

The brightening outlook is likely 

to reinforce calls for the European 

Central Bank to ease up further on its 

stimulus measures after it announced 

a cutback in the pace of its asset purchases 

last week. 

Three former Trump aides charged in Russia probe 

Campaign chief Manafort and official indicted as another policy adviser pleads guilty to lying about Moscow links 

COURTNEY WEAVER AND 

JOHN MURRAY BROWN 

Page A5 

Separately, George Papadopoulos, 

a former policy adviser for 

the Trump campaign, has pleaded 

guilty to charges that he lied to the 

FBI about his contacts with Russian 

nationals during the 2016 race, in 

a separate indictment charge from 

Mr Mueller. 

In a 31-page indictment filed on 

Friday but unsealed on Monday, Mr 

Mueller charged Mr Manafort and 

Mr Gates, a former business partner 

of the ex-campaign chief, with 

money laundering, tax evasion and 

making false statements — accusa- 

Continues on page A4 

Hail the large activist investor 

Norway’s sovereign wealth fund shows potential power to influence company decisions 

MARTIN SANDBU 

The FT carries a story on Monday 

about the Norwegian 

sovereign wealth fund’s approach 

to activist investment. (Not 

“active investment” as opposed to 

“passive” in the sense of formulaically 

following a market index, but 

“activist” in the sense of making 

demands of company managers.) 

The fund’s move two years ago 

to start pre-announcing its voting 

intentions at shareholder meetings 

has been so successful that it has 

done this much less frequently than 

it expected: only three times this 

year. Apparently the implicit threat 

of a public showdown is enough to 

make management more solicitous 

of this mega-investor’s preferences. 

That clearly proves the fund’s 

power, but it may also suggest it is 

not putting that power to the best 

use — for itself, investors generally, 

and society at large. 

The best way of thinking about 

investors’ role in corporate governance 

for the common good is 

to acknowledge that investors as 

a class also suffer when the companies 

they own act in anti-social 

ways. This is because the “negative 

externalities” that occur when a 

company pushes the costs of its 

behaviour on to others affect other 

companies as well. Managers who 

act in what they perceive as the 

company’s interest may thus act 

against the interest of shareholders 

as a class: corporate negative 

externalities harm investors. This 

is compounded when managers 

also have a shorter-term horizon 

than investors, even aside from 

externalities. 

That is why sovereign wealth 

funds, pension funds and other 

large investors are particularly 

Big Tech and Amazon: Too 

powerful to break up? 

Page A6 

Norway’s sovereign wealth fund has been publicly disclosing how it would vote ahead of companies’ annual shareholder meetings © Dreamstime 

well-placed to remedy this problem 

through activism. 

First, they tend to be “universal 

investors” with stakes in a broad 

range of companies — so the externalities 

are directly “internalised” in 

their overall investment portfolios. 

Despoliation of common natural 

resources or unwillingness to invest 

in real productive capital by one 

company may be opportunistically 

sensible and even profit-maximising 

yet still reduce such universal 

investors’ return by imposing costs 

or reduce demand for other companies 

in the portfolio. 

Second, large investors have 

the clout to influence company 

management, both directly and as 

standard-bearers around which 

other, smaller investors can rally. 

The question is whether they 

decide to use that clout. As my colleague 

Rana Foroohar points out 

in her latest column, many investors 

tend to outsource their voting 

decision in shareholder meetings to 

“proxy advisers”. That is better than 

ignoring one’s voting power altogether. 

(I disagree, however, that it 

is “understandable that large asset 

managers like BlackRock or Fidelity 

and myriad smaller institutions 

would want to offload this task”. 

Smaller institutions, yes, but large 

asset managers have the wherewithal 

to make their own decisions, 

as well as an interest in wanting to 

for the reasons outlined above.) 

But it is far from good enough if the 

proxy advisers themselves do not 

take externalities and long-term 

effects of company decisions into 

account. 

Foroohar suggests that this is the 

case, and that proxy advisers focus 

too much on short-term shareholder 

return. If she is right, that means 

they simply replicate the myopia 

and unenlightened selfishness 

of the conventional governance 

practice of treating management 

with benign neglect. 

That only increases the responsibility 

of large investors to show 

better stewardship for the private 

business economy in which they 

hold such big stakes. One can see 

the political reasons for a sovereign 

wealth fund such as Norway’s to be 

discreet. But the argument for taking 

into account the external and 

long-term effects of management 

decisions is also an argument for 

doing so publicly: giving smaller 

investors leadership leverages the 

self-interest of the larger ones. But 

when that self-interest is of the enlightened 

kind, this is also a public 

good. And at a time when private 

sector leaders themselves say the 

promise of capitalism has been broken, 

it even counts as a public duty. 

Other readables 

• Last week we urged the European 

Central Bank to follow the 

Bank of Japan’s lead in targeting 

long-term interest rates directly. 

Daniel Moss explains just how 

important this has been for Japan: 

even if BoJ governor Haruhiko Kuroda 

is not reappointed for another 

term, his adoption of this tool has 

put the central bank in a position to 

continue stimulating the economy 

long after his departure. 

• Germany’s policy of encouraging 

employers to reduce hours 

worked rather than firing workers in 

the last recession kept unemployment 

low but came at a cost in productivity 

growth, by slowing down 

the movement of workers from 

lower- to higher-productivity jobs. 

Numbers news 

Business and consumer confidence 

in the eurozone is at a 17- 

year high.



C002D5556 

FT 

Three former Trump aides... 

NATIONAL NEWS 

Higher bonus costs take shine off HSBC’s rise in revenues 

MARTIN ARNOLD AND 

HUDSON LOCKETT 

• Outgoing chief Stuart Gulliver says 

‘pivot to Asia’ strategy is paying off 

A 

sharp increase in costs to cover 

higher bonus payouts and extra 

investment in retail banking 

took the shine off HSBC’s third consecutive 

quarter of higher revenues 

stemming from loan growth in Asia 

Continued from page A3 

tions mostly tied to Mr Manafort’s 

work in Ukrainian politics before the 

US presidential campaign. 

Overall, the two men are accused 

of funnelling $75m through 

unreported offshore accounts. Mr 

Manafort turned himself in to the 

FBI’s Washington field office early 

on Monday morning. 

Mr Trump quickly seized on 

the fact the charges focus on Mr 

Manafort’s work for then-Ukrainian 

president Viktor Yanukovich and his 

pro-Russia Party of Regions government, 

rather than any conduct during 

the 2016 race. 

“Sorry, but this is years ago, 

before Paul Manafort was part of 

the Trump campaign,” Mr Trump 

wrote on Twitter. “But why aren’t 

Crooked Hillary & the Dems the 

focus????? . . . Also, there is NO COL- 

LUSION!” 

However, the charges against the 

third Trump campaign official, Mr 

Papadopoulos, relate directly to his 

time on the campaign. 

According to the charging document 

against Mr Papadopoulos, he 

lied to FBI agents during a meeting in 

January, alleging that he had interacted 

with an unnamed London professor 

whom Mr Papadopoulos believed to 

be close to the Russian government. 

Mr Papadopoulos told FBI agents 

that the individual had told him that 

Russian officials had “dirt” on Hillary 

Clinton only before he took on 

his foreign policy adviser role in the 

campaign. However, according to 

the charging document, Mr Papadopoulos 

“repeatedly sought to use 

the professor’s Russian connections 

in an effort to arrange a meeting 

between [Trump’s campaign] and 

Russian government officials”. 

Mr Papadopoulos has pleaded 

guilty to willingly making false statements 

to the FBI, a charge that carries 

a maximum prison sentence of five 

years and a maximum fine of $250,000. 

In the separate indictment 

against Mr Manafort, the former 

campaign chair is accused of using 

“his hidden overseas wealth to 

enjoy a lavish lifestyle in the US”, 

which included buying multiple 

multimillion-dollar properties and 

obtaining loans using the properties 

as collateral. 

Mr Manafort, 68, is accused of 

laundering $18m, while Mr Gates 

is accused of transferring $3m 

from offshore accounts from 2006 

to 2015, a period in which the two 

men served as “unregistered agents” 

for Mr Yanukovich and his political 

party. Mr Yanukovich was ousted in 

a pro-western revolution in 2014. 

According to Mr Mueller’s indictment, 

Mr Manafort paid hundreds 

of thousands of dollars through offshore 

accounts to pay for high-end 

goods and services without paying 

tax on the income used to make 

these purchases. 

and the UK. 

Stuart Gulliver, who is due to step 

down as chief executive in February 

having run the bank for seven years, 

dismissed this as a one-off and said 

the bank’s revenues would still grow 

faster than its costs over the full year. 

He added that his planned successor, 

John Flint, who currently runs 

HSBC’s retail banking and wealth 

management division, would stick to 

the bank’s “mantra” that its revenue 

growth has to exceed any increase 

in costs. 

Mr Gulliver, who will hand over to 

Mr Flint after presenting annual results 

next year, said the “pivot to Asia” 

strategy he launched two years ago to 

shift hundreds of billions of dollars 

from underperforming assets to more 

profitable areas was paying off, “driving 

higher returns and lending growth, 

particularly in Hong Kong”. 

Mr Flint is an HSBC lifer with almost 

three decades at the bank and 

is viewed by analysts as a safe pair 

of hands. He is expected to exert a 

moderating influence on new chairman 

Mark Tucker, formerly the chief 

executive of Asia-focused insurer AIA, 

who became the first outsider to chair 

HSBC since the bank was founded 

152 years ago. His leadership at AIA 

spurred a 50 per cent jump in revenues 

and profits. 

HSBC has struggled to generate 

A police officer carries away a schoolgirl caught up in running battles between police and protesters in Nairobi on Monday © EPA 

Would you donate your data for the collective good? 

A nation’s ability to exploit information in smart, creative ways will help determine its economic success 

JOHN THORNHILL 

There is a saying that scientists 

would rather share their toothbrushes 

than their data. But we 

will all have to imagine more open 

and hygienic forms of data sharing 

if we are to make the most of this 

revolution. 

Data are emerging among the 

most important assets of the 21st century 

economy. Vast quantities of human- 

and machine-generated data, 

combined with ever more powerful 

computers and clever algorithms, are 

providing the feedstock for artificial 

intelligence systems and promising 

striking improvements in productivity. 

A country’s ability to exploit data 

in safe and creative ways will increasingly 

determine its success. It is high 

time for institutional innovation to 

encourage the process. 

For now, Pacific Rim companies, 

from the west coast of the US and the 

east coast of China, outstrip the rest of 

the tech industry. The likes of Google, 

Amazon, Alibaba, and Tencent are 

vacuuming up data and using them 

in inventive ways — to the delight of 

most consumers and the concern 

of some citizens worried about the 

concentration of corporate power 

and the erosion of privacy. 

Earlier this month, the UK government 

published an independent 

report by Professor Dame Wendy 

Hall and Jérôme Pesenti about 

how Britain could boost its own AI 

industry. Britain boasts an illustrious 

history in computing but risks 

becoming sub-scale in this emerging 

economy. The report made good 

suggestions for improving technical 

education, preserving the free 

movement of talented experts (a 

particular challenge after Brexit), 

and making government data readable 

by machines. 

But the report’s most striking 

recommendation was to pioneer the 

creation of data trusts, a framework of 

agreements between government and 

industry to stimulate the secure and 

mutually beneficial exchange of data. 

It is a neat an idea in theory 

but it will be hard to implement in 

practice. Even Professor Hall admits: 

“There is a will to do it but not yet 

a way.” 

The central idea would be for the 

government to work with independent 

institutions, such as the Royal 

Society and the Open Data Institute, 

to encourage the creation of robust 

arms-length mechanisms to share 

public and private sector data. That 

would help reassure data donors 

that their information was being 

used for the collective good rather 

than for private profit or government 

surveillance. But it would also give 

researchers and entrepreneurs access 

to exciting fresh seams of data. 

The report’s authors argue the 

public sector could benefit enormously 

in realms such as energy, 

healthcare, transport, and cyber 

security. Other experts suggest that 

regulators could incentivise companies, 

like Uber, to share anonymised 

data, helping urban planners, for 

example. Charitable research institutions, 

such as the Wellcome Trust, 

could encourage pharmaceutical 

companies to contribute “exhaust” 

data from failed clinical trials that 

could provide invaluable insights. 

Sir Nigel Shadbolt, AI professor 

and co-founder of the ODI, says 

the aim should be to create “interested, 

disinterested institutions” 

to supervise such communal data 

assets. He cites the historic example 

of the Lloyd’s Register of Shipping, a 

charitable organisation dating back 

to the 1760s, set up to accredit and 

classify merchant ships for the benefit 

of all trading companies and insurers. 

Copyright libraries in the UK and Ireland 

have also been granted the right 

to obtain all published books for free 

to spread knowledge. 

“We have been here before and 

have quite successfully established 

regimes where information has been 

made available for the common good 

in perpetuity,” he says. “The idea 

of creating data trusts is well worth 

pursuing.” 

Privacy and security are the most 

obvious obstacles. Anonymising 

data is more difficult than it sounds, 

particularly for health information. 

The EU’s sweeping General Data 

Protection Regulation, which comes 

into force in May and will be adopted 

by Britain, also imposes strict 

restrictions on data use. “GDPR is 

fantastically protective of people but 

potentially restrictive for research,” 

says Professor Hall. 

That may well put Europe at a further 

competitive disadvantage in the 

short term given looser accountability 

elsewhere. Companies in China, 

in particular, face few constraints on 

data use, either from government 

regulation or public concern. 

But Jürgen Schmidhuber, professor 

of artificial intelligence at the 

University of Lugano, argues that 

safeguarding data rights may make 

good business sense over the longer 

term if it results in a more trusted 

infrastructure for data sharing. “Respect 

for privacy will be profitable 

one day,” he says. 

top line growth since Mr Gulliver 

took charge in 2011, in which time the 

bank’s annual revenues have fallen by 

about a third, hit by disposals, restructuring 

and low interest rates. 

In the three months to September, 

HSBC’s revenues rose 3 per cent year 

on year. Its provisions for bad debts 

shrank more than a fifth, but operating 

costs increased 7 per cent, which 

led to a slight fall in adjusted pre-tax 

profits to $5.4bn. 

Uhuru Kenyatta wins 

rerun Kenyan election 

after opposition boycott 

Voting prevented in 25 constituencies because of 

protests by supporters of Raila Odinga 

JOHN AGLIONBY 

Uhuru Kenyatta has won a second 

term as Kenya’s president 

after being declared the winner 

of a rerun presidential election that was 

boycotted by his main opponent. 

Mr Kenyatta secured more than 98 

per cent of the vote in Thursday’s poll, 

Kenya’s electoral commission said on 

Monday, although turnout was low 

and there was no voting in two dozen 

constituencies because of protests by 

supporters of opposition leader Raila 

Odinga. 

The non-voting in 25 of the country’s 

290 constituencies is likely to further 

colour the credibility of a process 

that has also been marred by divisions 

within the electoral commission, confusion 

over turnout, intimidation of 

supreme court judges and Mr Odinga’s 

boycott. 

The rerun was required after the 

supreme court nullified the result of 

August’s election in which Mr Kenyatta 

was declared the winner despite Mr 

Odinga’s claim of widespread fraud. 

The supreme court judges cited “irregularities” 

and “illegalities” in the 

tallying of votes for their decision. 

In Monday’s acceptance speech Mr 

Kenyatta thanked supporters for “validating 

my victory” in August and called 

for peace. He criticised Mr Odinga for 

appealing against the original vote and 

for not participating in Thursday’s poll. 

“You cannot choose the opportunity 

to exercise a right and thereafter 

abscond from the consequences of 

that choice,” Mr Kenyatta said. Mr 

Odinga’s spokesperson said the opposition 

leader would make a statement 

on Tuesday. 

Mr Odinga still came second in 

the poll, with 0.96 per cent of the vote, 

despite urging supporters to boycott 

the election. There were five other 

candidates. 

Turnout was 38.8 per cent compared 

with 79.5 per cent in August, 

according to the Independent Electoral 

and Boundaries Commission. Wafula 

Chebukati, chairman of the commission, 

said: “I’m satisfied that we were 

able to . . . deliver what to us and all 

Kenyans and observers was a free, fair 

and credible election.” 

This was a marked change from 

Mr Chebukati’s view a week before the 

rerun vote when he said that political 

meddling in the commission was so 

great that he could not ensure the 

process would be sufficiently credible. 

The election commission also on 

Monday said voting would not happen 

in the areas where it was abandoned 

on Thursday, saying conditions “were 

not conducive” to holding elections 

in those 25 counties. Officials said it 

would make no difference to the result, 

and the risk of violence, particularly 

towards IEBC staff, was too great.



@ FINANCIAL TIMES LIMITED 2015 

Barclays Africa and Standard 

Bank end contracts with 

Management consultant loses two big bank clients amid South Africa scandal 

MADISON MARRIAGE 

Two of the largest banks in 

South Africa have terminated 

their contracts with 

McKinsey just two weeks 

after the consultancy apologised 

for making “errors of judgment” 

in working alongside a company 

linked to the politically contentious 

Gupta family. 

Standard Bank and Barclays Africa 

are the first large companies to publicly 

confirm they have cut ties with 

the management consultancy since 

it in July became entangled in South 

Africa’s biggest political scandal since 

the apartheid era. 

The banks, which are also reviewing 

their relationship with KPMG 

— the accounting firm that audited 

businesses run by the Guptas for 15 

years — declined to comment on why 

they had ended their contracts with 

McKinsey. 

Barclays Africa, which used McKinsey 

for strategy and consulting 

advice, said: “Barclays Africa Group 

has taken a decision to not contract 

any new work with McKinsey and is 

going through a process of winding 

down existing work. 

“We continue to review our relationship 

with KPMG and will take 

a decision once that review is complete.” 

Standard Bank said it had “elected 

to terminate McKinsey and Company’s 

services and has notified it 

accordingly”. 

The world’s best-known consultancy 

was first drawn into controversy 

surrounding the Guptas when its 

work with Trillian Capital Partners, 

which was until recently owned by 

an associate of the billionaire family, 

came under public scrutiny in July. 

Trillian has been accused by civil 

•ICBC is trading above book value 

in Hong Kong for the first time in 

two years 

As part of China’s anti-corruption 

drive, the free liquor 

and even bottled water disappeared 

from the hotels housing 

guests for the 19th Party Congress, 

which concluded last week. But 

despite the austere note on which 

the core leadership insisted, there 

was a congratulatory air about the 

proceedings. 

The reflationary trade may be 

moribund in the US, but across the 

Pacific it is alive and well. Consider 

one small indication noted by Chris 

Wood, strategist at CLSA: ICBC, the 

largest bank in China and in the 

world, is trading above book value 

in relatively cynical Hong Kong for 

the first time in more than two years. 

“The improvement in Chinese banks’ 

reported asset quality can be seen in 

the continuing rally in Chinese bank 

stocks, where a re-rating is now taking 

place,” he notes. 

Banks are generally a proxy for 

wider economic trends. In this case, 

the recovery of the share prices of 

ICBC and its peers reflects two benign 

developments. 

For one thing, the rate of growth 

society groups of siphoning hundreds 

of millions of rand from Eskom, a 

state-owned power utility, and of 

acting as gatekeeper for international 

companies to access state groups. It 

has denied the claims. 

The Gupta family has been accused 

of using ties to Jacob Zuma, 

South Africa’s president, to influence 

state contracts and appointments 

to favour its business interests. The 

Guptas and Mr Zuma deny the claims. 

McKinsey said earlier this month 

that an internal investigation of its 

work in the country had found no 

evidence of corruption or bribery, but 

that it should not have worked with 

Trillian until its due diligence process 

was complete. 

Dominic Barton, McKinsey’s global 

managing partner, said at the time: 

“We are sorry for the distress this matter 

has caused the people of South 

Africa. We are taking a hard look at all 

of our practices in the country.” 

A spokesperson for McKinsey said 

of the banks’ decision to drop the 

consultancy: “It is our longstanding 

policy not to comment on individual 

companies or discuss our clients.” 

Last month KPMG announced the 

departure of eight senior executives 

and appointed a new leadership team 

in South Africa in an attempt to draw 

a line under the scandal. 

However, several large South African 

companies have already decided 

to stop working with KPMG, including 

South Africa-listed asset manager 

Sygnia Asset Management, Hulisani, 

an energy investment company, and 

Sasfin, a financial services company. 

Many other companies, including 

Standard Bank, are waiting for the local 

accounting regulator to conclude an 

investigation of KPMG’s work in the 

country before deciding what action to 

take with the accounting firm. 

Banks benefit from China’s 

economic rebalancing 

HENNY SENDER 

of debt — widely seen by bearish 

hedge fund managers as one day triggering 

a systemic financial crisis — 

has slowed. Indeed, the second quarter 

was the first since 2011 in which 

debt actually declined, according to 

Haibin Zhu, chief China economist 

at JPMorgan in Hong Kong. 

Although the drop in total debt 

(including the shadow banks) was 

“marginal”, as Mr Zhu notes, the 

composition of that debt has also 

shifted. The share of corporate lending 

in the total is down, while that 

of households is increasing. That, 

in turn, means the long-promised 

rebalancing of the economy from 

investment to consumption is gaining 

momentum. 

The banks are double beneficiaries 

of this because loans to households, 

especially for mortgages, are 

less likely to become problem assets. 

Moreover, banks can also charge 

more to consumers, thereby improving 

their margins. 

Financial stocks make up nearly 

24 per cent of the MSCI China index, 

which has been a star performer 

year to date. Given that these positive 

trends in the quality of banks’ 

balance sheets are still in their early 

days, not only are the banks far less 

likely to bring down the system, they 

may even be as highly regarded by investors 

as they are by the leadership. 

FINANCIAL TIMES 

IMF warns volatility products loom as next big market shock 

Assets invested in such strategies estimated to have risen to about $500bn 

MILES JOHNSON 

The International Monetary 

Fund has warned that the increasing 

use of exotic financial 

products tied to equity volatility by 

investors such as pension funds is 

creating unknown risks that could 

result in a severe shock to financial 

markets. 

In an interview with the Financial 

Times Tobias Adrian, director of 

the Monetary and Capital Markets 

Department of the IMF, said an 

increasing appetite for yield was 

driving investors to look for ways 

to boost income through complex 

instruments. 

“The combination of low yields 

and low volatility facilitates the use 

of leverage by investors to increase 

returns, and we have seen rapid 

growth in some types of products 

that do this,” he said 

Equity market volatility has 

plumbed to its lowest level in a 

decade, with the Chicago Board Options 

Exchange’s implied volatility 

index, also known as the Vix, sitting 

at a level close to 10 compared with 

Oil and metals trading gives Glencore further boost 

DAVID SHEPPARD AND NEIL HUME 

A 

good year for oil and metals 

trading has led Glencore to 

upgrade its full-year guidance 

for the division for the third time 

since January, even as production 

volumes at its mining operations fell. 

In an update on Monday, Glencore 

said its trading business was now 

expected to earn between $2.6bn and 

$2.8bn, following a strong performance 

in the three months to September. 

The previous full-year guidance 

was $2.4-$2.7bn in August, and 

$2.1-$2.4bn at the start of the year. 

While the company did not explain 

the exact cause of the improvement, 

a number of factors have 

moved in its favour. 

Chief executive Ivan Glasenberg 

said in August that higher prices 

were good for its metals trading operations 

as they increased arbitrage 

opportunities. 

Prices of both copper and zinc, 

where Glencore is a major miner 

and trader, have rallied significantly 

in 2017. Copper is up almost 25 per 

C002D5556 

an historical average of about 20. 

The IMF believes that sustained 

low volatility increases incentives for 

investors to take on higher levels of 

leverage while causing risk models 

that use volatility as an important 

input to understate real levels of risk 

participants may be taking on. 

“A sustained increase in volatility 

could then trigger a sell-off in the 

assets underlying these products, 

amplifying the shock to markets,” 

Mr Adrian said. 

Mr Adrian’s warning comes amid 

increasing evidence that pension 

funds and insurance companies 

are venturing into riskier types of 

investments to gain income. Some 

are also effectively writing insurance 

contracts against a market crash to 

pocket premiums. 

Last year the $14bn Hawaii Employees 

Retirement System said it 

was writing put options to boost 

its income, while other US pension 

schemes such as the South Carolina 

Retirement System Investment 

Commission and Illinois State Universities 

Retirement System have 

also hired outside managers to use 

cent since January and traded above 

$7,000 a tonne earlier this month for 

the first time in three years. 

Zinc, where Glencore is the largest 

trader, has risen by a similar 

amount and hit a 10-year high above 

$3,300 a tonne at the beginning of 

October. 

However, Glencore has also cut 

its guidance on production of both 

metals, citing short-term factors including 

power problems, industrial 

action and bad weather. 

Analysts at RBC Capital Markets 

said that while production volumes 

had disappointed, earnings per share 

were likely to have risen because of 

higher commodity prices: 

“As we mark actual third quarter 

commodity prices in our model, the 

production misses were completely 

offset and actually cause a slight uplift 

in EPS (earnings per share). The 

lower production, especially in coal 

and zinc, likely helped to support 

prices, and in turn has offset their 

impact,” said RBC. 

Volumes at Glencore’s oil trading 

business have risen to more than 6m 

BUSINESS DAY 

A chart of the Vix index since 1990 shows that volatility is at its lowest for more than two decades © FT montage; Bloomberg 

Sharp rally in copper and zinc prices leads to upgraded guidance for division 

A5 

option writing strategies. 

The IMF estimates that assets 

invested in volatility targeting strategies 

have risen to about $500bn, with 

this amount increasing by more than 

half over the past three years. 

Marko Kolanovic, head of macro, 

derivative and quantitative Strategies 

at JPMorgan, last month warned 

of “strategies that sell on ‘autopilot’”, 

and how risk management models 

that use volatility could be luring 

investors into taking on too much 

risk. “Very expensive assets often 

have very low volatility, and despite 

downside risk are deemed perfectly 

safe by these models,” he wrote in a 

note to clients. 

With equity implied volatility 

continuing to drop over the course of 

this year investors who have bet that 

markets will remain tranquil have 

been rewarded. Yet the true quantity 

of complex products being sold that 

are linked to volatility of various assets 

is hard to ascertain due to such 

deals mostly being done in private. 

Regulators therefore find it difficult 

to map out the risks in the event of 

an unexpected market shock. 

barrels a day, after deals with Russia’s 

state-backed oil company Rosneft 

and Iraqi Kurdistan. 

There has also been a general 

recovery in commodity markets in 

the past two years — a slump in 2015 

raised concerns about Glencore’s 

debt load, forcing it to deleverage 

and raise cash. 

On Monday, its shares were trading 

flat at 367p, up more than 50 per 

cent in the past year and more than 

four times higher than at their nadir 

in September 2015, although they 

remain below the 530p issue price 

six years ago. 

The company, which has its 

primary listing in London, is now 

preparing to delist in Hong Kong, 

according to people familiar with 

the company. Only 0.3 per cent of its 

shares are registered there. 

When Glencore launched its 

$60bn IPO in 2011, Mr Glasenberg 

said a secondary listing in Hong Kong 

would help the company to build its 

profile in the region, where most of its 

biggest customers are based, and to 

attract cornerstone investors.



C002D5556


C002D5556 

BUSINESS DAY 

A7



C002D5556 

Read Ambitiously 

Foreign companies 

in China get a 

new partner: The 

communist party 

CHUN HAN WONG & EVA DOU 

The 300 or so Communist 

Party members who work 

at Walt Disney Co.’s theme 

park in China don’t keep their 

politics to themselves. 

Many attend party lectures 

during business hours and display 

hammer-and-sickle insignia 

at their desks. Company 

newsletters and state media 

praise them as exemplary workers. 

Party officials help manage 

staff welfare and arrange activities 

such as political seminars for 

members and singing contests 

for all employees. 

In June, Shanghai’s flagship 

party newspaper quoted Murray 

King, the resort’s Canadian 

vice president for public affairs, 

as saying its best employees are 

mostly party members. According 

to a Disney spokeswoman, 

Mr. King actually said while 

some employees belong to the 

party, Disney doesn’t make that 

a requirement. 

The compromises made by 

Western firms to do business 

in China are becoming increasingly 

uncomfortable now that 

President Xi Jinping is pushing 

to embed the Communist Party 

deeper into the world’s secondlargest 

economy. 

Mr. Xi emerged from a recent 

party congress with five more 

years as leader and power comparable 

with that of Chairman 

Mao Zedong. One of his top 

priorities is to restore the party 

as a force in people’s lives and 

recapture its revolutionary sense 

of mission. 

Under Mr. Xi, the party has 

pushed to exert greater state 

control over the economy and 

rein in some market-oriented 

experiments of recent years. 

Chinese regulators recently 

proposed that the state take 1% 

stakes in major Chinese internet 

companies. 

Friction created by the party’s 

more assertive presence is rippling 

across China’s corporate 

landscape. One area of tension 

is whether party members should 

be allowed to meet during work 

hours, conduct meetings on 

company premises or be given 

time off for party activities, executives 

and party officials say. Some 

foreign companies are concerned 

that party operatives, over time, 

may gain influence over management 

decisions or create an 

alternative power center. 

Google’s dominance in 

Washington faces a reckoning 

JOHN D. MCKINNON & BRODY MULLINS 

Google’s parent company, 

Alphabet Inc., 

made a big bet on 

Hillary Clinton winning 

the 2016 presidential 

election. Employees donated 

$1.6 million to her campaign, 

about 80% more than the amount 

given by workers at any other corporation, 

and Executive Chairman 

Eric Schmidt helped set up companies 

to analyze political data for 

the campaign. Mr. Schmidt even 

wore a badge labeled “STAFF” at 

Mrs. Clinton’s election-night bash. 

His support of the losing side 

didn’t go unnoticed among the 

victors. As President-elect Donald 

Trump was preparing for a meeting 

with tech executives at Trump Tower 

not long before his inauguration, 

he asked strategist Stephen Bannon 

whether Mr. Schmidt was “the guy 

that tried to help Hillary win the 

election,” according to someone 

who heard the conversation. 

“Yes,” said Mr. Bannon. “Yes, 

Toyota’s talking car wants 

to be your clingy BFF 

SEAN MCLAIN 

If you love your car, Toyota 

Motor Corp. TM -0.08% 

thinks your car should love 

you back. 

That’s the reasoning behind 

the company’s artificial-intelligence 

project, dubbed Yui: an 

onboard virtual assistant that 

gauges your mood, indulges in 

personal chitchat and offers to 

drive if it senses you are sleepy 

or distracted. 

In one Toyota video, shown at 

the Tokyo Motor Show, a woman 

sits on a seaside cliff, talking 

about her father with her car. 

“He sounds like a great father,” 

says Yui, in a baritone male 

voice. 

“You’re a bit like him,” the 

woman says. 

Until now, Toyota, the world’s 

second-largest car maker by 

vehicle sales, has kept relatively 

quiet about autonomous vehicles 

and how it plans to deal 

with challenges from Silicon 

Valley upstarts, such as Google 

he is.” 

Google, one of the most powerful 

players in Washington in 

recent years, is now facing the 

consequences of its lost political 

clout—and is moving mountains 

to regain it. During the Obama 

years, Google held sway with both 

parties in Congress and members 

of the administration. Mr. 

Schmidt often met with President 

Barack Obama at the White House 

through advisory boards and other 

parent Alphabet Inc.’s Waymo 

LLC and others. 

“We think this is a good way 

to do it,” said Didier Leroy, who 

oversees Toyota’s business planning 

and operations. 

Toyota isn’t the only manufacturer 

that thinks your car 

should talk to you. Japanese rival 

Honda Motor Co. as well as tech 

companies Amazon.com Inc. 

and Apple Inc. working on their 

own in-vehicle AI assistants. 

Honda is also using the motor 

show to demonstrate a concept 

vehicle equipped with an AI 

system, dubbed Hana, that can 

read driver emotions and stress 

levels. 

“If people think about AI, 

sometimes people are afraid 

of it, because it is super intelligent,” 

said a Honda spokeswoman. 

“We don’t want to 

make a type of Terminator,” 

she said, in reference to the 

time-traveling robot assassin 

played by Arnold Schwarzenegger 

in the 1984 movie 

“The Terminator.” 

SHEN HONG 

events. The company defeated an 

antitrust probe by U.S. regulators 

and secured favorable rules on 

net neutrality, online liability and 

copyright issues. 

Today, the search-and-advertising 

giant has come under attack 

from Republicans on all those 

fronts, as well as a new challenge 

over consumer privacy. Democrats, 

for their part, are rethinking 

their attitude toward regulating the 

company amid allegations that Russia 

used Google and other internet 

platforms in an attempt to influence 

the 2016 presidential election. 

For the past two decades, Washington 

has taken a largely handsoff 

role in regulating the internet, 

helping winners such as Google 

and Facebook Inc. grow to spectacular 

size and influence. Today, 

the rise of populist movements in 

both parties has forced a reckoning 

around the concentration of 

economic power in big businesses. 

Populist conservatives are particularly 

hostile to big tech, given 

its size and pervasive influence, as 

well as its support for immigration 

rights and other causes that clash 

with their economic nationalism. 

“For the populist right, this is a 

major, major issue of the 2018 election,” 

Mr. Bannon said in an interview. 

“We’re going to make it a big 

deal. I can already tell it resonates.” 

Hearings on Tuesday and 

Wednesday are scheduled in Congress 

on the Russia issue, in a rare 

public grilling of the tech giants 

that could focus rising concerns. 

Democratic senators Mark Warner 

of Virginia and Amy Klobuchar 

of Minnesota have introduced a 

bill along with Arizona Sen. John 

McCain, a Republican, that would 

require internet firms to disclose 

the financial backers of political 

ads on the internet. 

Party’s over? Chinese markets battered after bout of artificial calm 

Chinese markets suffered 

a broad selloff Monday, 

losing some of the shine 

they maintained during 

last week’s major congress of the 

Communist Party. 

The country’s $9 trillion bond 

market led the losses. Benchmark 

government bond prices reached 

a fresh three-year low as perceptions 

grow that Beijing will intensify 

efforts to cut back high levels of 

leverage in China’s economy during 

President Xi Jinping’s second 

five-year term as party leader. 

Those concerns spread to the 

stock market, with shares in Shanghai 

snapping a six-day winning streak. 

Prices of commodities futures, from 

copper to iron ore, also headed south 

on China’s domestic markets. 

During the leadership gathering 

last week, Beijing stage-managed 

an artificial calm in China’s stock 

markets with purchases by statebacked 

investment funds and 

unofficial bans on excessive selling 

by big investors. 

Market participants said the 

preoccupation with preserving stability—known 

locally as wei wen— 

had been expected to fade following 

the conclusion of the congress. 

“Now that the Party Congress is 

over and the need to wei wen has 

eased, people have come to the 

conclusion that the authorities 

will focus back on the campaign to 

reduce financial leverage,” said Qin 

Han, chief fixed-income analyst at 

Guotai Junan Securities . 

The bond market’s gradual selloff 

started as early as Wednesday, 

after China’s central bank ended a 

six-day streak of injecting cash into 

the financial system. “That was a 

strong signal that the central bank 

has no intention to cheapen borrowing 

costs,” Mr. Qin said. 

The losses in bonds have since 

intensified, pushing the yield on 

the benchmark 10-year government 

bond to a fresh three-year 

high of 3.93% on Monday. 

The world’s third-largest bond 

market has come under pressure 

at times this year, as Beijing raised 

short-term interest rates and tightened 

liquidity to discourage borrowing 

by speculative investors. 

The latest selloff in the government 

bonds came days after Beijing issued 

$2 billion worth of dollar-denominated 

bonds offshore for the 

first time in more than a decade. 

The bond selling worsened 

the mood among China’s stock 

investors, pushing the Shanghai 

Composite Index down by as much 

as 1.7% in the morning. The index 

has since narrowed its losses to 

close down 0.8%. 

Analysts said state-backed 

funds—known as the “national 

team”—had been in the market 

buying large-cap stocks to help 

prop up the market. “It’s clear that 

state funds were propping up the 

index by buying banks and oil [company] 

shares to ease the selloff,” said 

Zhang Xin, an analyst at Guotai 

Junan Securities. “The main goal in 

the market is still to ensure stability.”

BUSINESS DAY 

Quick-Takes 

a different look at business &market news 

Natural gas seen as critical factor for energy 

security, carbon emission reduction 

Ahead of the 

release of its 

World Environmental 

Outlook 

scheduled for next month, 

the International Energy 

Association has said the 

role that natural gas can 

play in the future of global 

energy is inextricably linked 

to its ability to help address 

environmental problems. 

With concerns about air 

quality and climate change 

looming large, natural gas 

offers many potential benefits 

if it displaces more 

polluting fuels. This is especially 

true given limits to 

how quickly renewable energy 

options can be scaled 

up and that cost-effective 

zero-carbon option can be 

harder to find in some parts 

of the energy system. 

While there is very little 

dispute about the emissions 

associated with natural gas 

combustion but there is 

much less consensus over 

the level of direct methane 

emissions that can occur – 

whether by accident or by 

design – on the path from 

oil or gas production to final 

NEWS YOU CAN TRUST I TUESDAY 31 OCTOBER 2017 

C002D5556 

The recall sack and escape of Maina 

Governance can sometimes 

be a series drama 

and Nigerians 

have been served with a lot 

drama in the recall, reinstatement, 

promotion, sack 

and the vanishing into thin 

air of Abdulrasheed Maina, a 

fugitive, facing prosecution 

charges for corruption but 

who came into the country under 

the protection of the same 

security agencies that were after 

him. The story of Maina will 

make a good Nollywood story. 

Sources at the Economic 

and Financial Crimes Commission 

(EFCC), have told the 

media that Maina was offered 

protection by the Department 

of State Security (DSS). The 

DSS has not bothered to deny 

the allegation, which could 

mean that it is true. It has also 

emerged that the Attorney 

General of the Federation and 

Minister of Justice, Abubakar 

Malami gave legal cover for 

the reinstatement of Maina 

despite the fact that a case of 

corruption was still pending 

against him at a Federal High 

Court in Abuja. 

consumer. 

This is a critical issue 

for the long-term natural 

gas outlook: methane is a 

potent greenhouse gas and 

the uncertainty over the 

level of methane emitted 

to the atmosphere raises 

questions about the extent 

of the climate benefits that 

gas can bring. 

But gas has advantages 

over other fossil fuels. CO2 

emissions (per unit of energy 

produced) from gas 

are around 40% lower than 

coal and around 20% lower 

than oil. The edge of natural 

gas over other combustible 

fuels is reinforced when 

considering emissions of 

the main air pollutants, 

including fine particulate 

matter (PM2.5), sulfur oxides, 

mainly sulfur dioxide 

(SO2), and nitrogen oxides 

(NOX). These three pollutants 

are responsible for the 

most widespread impacts 

of air pollution, according 

to the IEA. 

Gas combustion produces 

significant levels of 

nitrogen oxides (NOX), with 

Maina 

As soon as Maina was 

sacked, he vanished into thin 

air. A man wanted by the 

security agencies, who was 

coming to work until his 

cover was blown by a vigilant 

media, has vanished into 

thin air, right under the nose 

of the security agencies. 

Interestingly the President 

ordered that an investigation 

report on the 

recall and reinstatement of 

Maina be presented to him 

within 24 hours. The report 

was done and handed over 

to the president within the 

stipulated time and then 

everything went silent except 

of course the presidential 

spokesmen went town 

with their usual chorus of 

around 10% of global NOX 

emissions coming from 

the use of gas. However, it 

produces virtually no SO2 

emissions and negligible 

levels of PM2.5 (See figure 

below). Coal use dominates 

global emissions of 

SO2, oil products used for 

transport are the dominant 

source of NOX, while the 

combustion of wood and 

other traditional solid fuels 

are responsible for more 

than half of current PM2.5 

emissions according to the 

organisation. 

blaming the ‘previous administration’ 

for the recall 

of Maina. For the Buhari administration, 

the ‘previous 

administration’ has become 

the ‘proverbial witch in the 

village’ that is determined 

to sabotage the progress of a 

step child in the city. 

And just when the silence 

of the Presidency on 

the Maina issue was looking 

louder that the series of weak 

and poor excuses being given 

for his return, the president 

suddenly remembered that 

he ordered an investigation 

into another corruption affair 

six months ago and that 

nothing has been done about 

it after the report was submitted 

since August. So Babachir 

Lawal and Ayodele Oke gets 

sacked. 

The president wakes up 

and gives Nigerians, especially 

the Nigerians who live 

on social media something 

to debate about in the next 

few weeks. Obviously, Maina 

must be protected at all cost. 

At least that is the impression. 

What Nigeria can learn from Rwanda 

With strong 

focus on 

developing 

supporting 

infrastructure for tourism, 

Rwanda, a small 

landlocked country in 

East Africa, has grown 

its Meetings Incentives 

Conferences and Events 

(MICE) and leisure tourism 

revenues from $368 

million in 2015, to $404 

million in 2016, while 

targeting over $800 million 

tourism revenue by 

2024. 

Considering its small 

size and a population 

of 11 million people, 

Rwanda decided not to 

compete with its East 

African neighbours of 

Ethiopia in aviation and 

Kenya and Uganda in 

tourism. It rather adopted 

MICE as the product 

and invested in supporting 

infrastructure to woo 

global corporates and 

businesses to meet and 

spend their hard-earned 

money across the country. 

Last year, the tourism 

sector raked in about 

$404 million, with the 

MICE initiative bringing 

in about $47 million. According 

to Belise Kariza, 

the chief tourism officer 

at Rwanda Development 

Board, a total of 

32 major conferences 

were held last year with 

the number expected to 

grow further this year. 

Backing government’s 

determination 

to make the country 

the conference hub of 

East Africa, the private 

sector is playing big in 

infrastructure development 

and not waiting 

for Foreign Direct Investment 

(FDI). In 2007, 

three Rwandan corporate 

investors formed a 

company called Ultimate 

Concept Limited 

and pooled resources 

to develop and own a 

real estate complex, 

which comprises four 

major components: a 

5-star hotel, Radisson 

Blu Hotel Kigali, with 

292 rooms on six floors, 

conference center with 

seating capacity of 

2,600, Kigali Information 

Technology Park, with 

32,200 square metres 

(346,598 sq ft) of rentable 

office and retail 

space, and a museum 

on the bottom floor of 

the IT office park. 

As well, Rwanda is 

among the top 10 countries 

in sub-Saharan 

Africa that global hotel 

chains are targeting for 

investment since 2014 

because of ease of doing 

business, security of 

investments and high 

return on investment. 

The likes of Marriott, 

Radisson Blu, Park Inn, 

Wilderness Safaris and 

Golden Tulip are already 

making further inroads 

into the Rwandan hotel 

market, while Hilton, 

Hyatt, Kempenski and 

other international 

brands are set to launch 

their presence from the 

last quarter of this year, 

making the country the 

conference hub in East 

Africa. 

At present, over 20 

hotels are in the pipeline 

across Rwanda with 

three opening in 2018 to 

cater to about 40 major 

conferences and over 

45,000 delegates expected 

in 2018. 

So far, the country’s 

visa on arrival, which 

costs $US30 besides 

being hassle-free has 

increased it tourist arrival 

from 666,000 in 

2010, 978,000 in 2015 to 

almost 2 million in third 

quarter of 2017. 

The interesting thing 

is that Rwanda is flourishing 

after the 1994 

genocide; the most 

bone-chilling tragedy in 

modern memory, which 

left a million dead and 

an entire country shaken 

to its core. 

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

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

BusinessDay 31 Oct 2017

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