BusinessDay 26 Feb 2018

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46 BUSINESS DAY C002D5556 Monday 26 February 2018 NEWS Diamond Bank pares loses as oil rally aids... Continued from page 4 percent exposure to the oil and gas sector in 2016, as deduced from the company’s financial statements. “The improved oil NPLs will reflect in our full-year 2017 financial result,” Anyanwu added. The bank’s full-year 2017 financial report is expected to hit the market by March. The bank’s share price jumped 2 percent to N2.55 Friday, according to data from Bloomberg. The lengthy collapse in oil prices which began in mid-2014 led to a corresponding decline in the revenues of Nigerian oil and gas corporates, making it more difficult for them to service their predominantly foreign-currency borrowings. Nigerian lenders who were heavily exposed to the troubled oil and gas sector had to restructure loans extended to mostly indigenous oil firms last year. The restructuring has mainly been by increasing loan tenors, allowing struggling clients to pay, based on their cash flow capacity and converting some amortising loans into bullet loans. Sixty to 70 percent of loans in the oil and gas sector were restructured with prodding from the Central Bank of Nigeria (CBN), according to global credit rating agency, Moody’s Investors Service. Nigerian banks’ balance sheets are highly dollarised, with foreign-currency-denominated loans constituting around 50 percent of total as of the end of June 2016. The banks’ exposure to the oil and gas industry is substantial, at around 30 percent of total loans, of which about one-third is to the upstream segment. Things have however taken a dramatic turn since the rally in oil prices made possible by OPEC’s move to drain a supply glut in the market by shaving some 1.2 million barrels daily off global supply. Oil prices have more than doubled to $69 per barrel on average this year, from as low as $29 dollars per barrel in January 2016. Nigeria’s benchmark, Brent crude, rose 0.8 percent to $66.9 per barrel Friday, according to Bloomberg data. Local production has also recovered some lost grounds inflicted by militant attacks in the better part of 2016. According to OPEC data, Nigeria’s production surged 50 percent to 1.8 million barrels daily in January 2018, from as low as 1.2 million in January 2016. The loss of Forcados barrels, which pumped an average of 200,000 barrels in 2015 before militancy escalated, had the single biggest impact on oil production out of any grade the country produces. Just as its resumption after a 15-month halt has also had a telling impact on overall production. This has helped Africa’s largest oil producer put the worst of its first economic recession in a quarter of a century. The economy expanded 1.4 percent in the third quarter of 2017, according to data by state-funded National Bureau of Statistics. Buoyed by stronger quarterly average production of 2.03 million barrels daily (mb/pd) (Q3’16: 1.61 mb/d), the oil sector expanded 26 percent year on year in the quarter to lift Nigeria’s GDP. The recovery has translated to an improving asset quality outlook for the Nigerian banks, given their exposure to the sector. “We think sector NPLs are close to their peak, and we expect higher oil prices will have direct implications on loan performance,” analysts at Moscowbased investment firm, Renaissance Capital said in a note to clients this month. L-R: UK Eke, group managing director, FBN Holdings plc; Aigboje Aig-Imoukhuede, chairman, Wapic Insurance plc/former president, Nigerian Stock Exchange (NSE); Soji Apampa, co-founder and CEO, Convention On Business Integrity (CBI); Chiedu Osakwe, director-general, NOTN/Nigerian Chief Trade Negotiator; Abimbola Ogunbanjo, president, NSE; Oscar Onyema, CEO, NSE, and ABC Orjiakor, chairman, Seplat Petroleum Development Company plc, during the NSE launching of Corporate Governance Index and honouring companies and directors for Passing Corporate Governance Rating System Assessment dinner in Lagos. 2019: NASS raises Presidential campaign... Continued from page 1 the campaign expenditure by candidates of political parties in governorship, National Assembly seats, area councils as well as donations to candidates of political parties by individuals and entities. BusinessDay findings revealed that some of the campaign expenditures consist of cost of organising political rallies, printing of campaign posters, leaflets, t-shirts and fez caps, purchase and branding of campaign vehicles as well as television, radio, newspaper, magazine, online and billboard advertisements. For instance, the current law puts the campaign limits of presidential, governorship and senatorial candidates at N1 billion, N200 million and N40 million respectively. This indicates that some of the elections spending limits were increased from between 150 to 900 percent in the new amendment. The law makers claim that increase in the ceiling was informed by the need to make it conform to modern realities. Ironically, the amendment is coming at a time that the National Assembly is awaiting the #NotTooYoungToRun Bill, currently before the 36 state houses of assembly, which seeks to reduce the age limit for running for elected offices in Nigeria. Apart from reducing the age limit, the bill also seeks to encourage younger people who will likely not be as rich as their older contemporaries to seek election positions. But some analysts are opposed to the review, saying lawmakers are supposed to focus on how to checkmate the activities of moneybag politicians. According to them, monetisation of politics is capable muzzling the nation’s political system if left unchecked. In an interview with Business- Day, Nwagwu Ezenwa, Chairman, Partners for Electoral Reform said the move will massively discourage prospective candidates. “The continued monetization of our politics will ostensibly push away self-respecting people. Even if you do not have the resources to contest, you will depend on people who have either put their hands in public purse or only those who have had access to public funds will be recycling themselves in politics.” Ezenwa lamented that moneypolitics had eroded the core values of politics which is to serve the people. “Even if a professor saves all his salary for all the time he will be teaching in the University, he will not be able to save N5 billion. In fact, he can’t save N1 billion. “In terms of lawmaking, what they (lawmakers) have done is to say let’s make a law that is close to reality. But as a keen watcher and observer of electoral process in Nigeria, it subverts the aspiration of self-respecting people. Except you are in big business or have access to public money, election is no longer for you,” he stated. BusinessDay gathered that the clean copy of the new electoral act is about to be transmitted from the office of the Clerk to the National Assembly (CNA) to the President for assent. There are, however, strong signals that the President will likely veto the Bill, even as the National Assembly is squaring up to override the President’s veto. The Bill provides a timeline for submission of list of candidate, sequence of elections, guidelines for political parties’ primaries, use of technological devices, and limit of campaign expenses, omission of names of candidates or logos of political parties among others. Checks on the amended Electoral Act obtained by BusinessDay revealed that the proposal also placed a campaign ceiling of N100 million (representing 150 percent increase) and N70 million (250 percent increase) respectively for senatorial and House of Representatives candidates. Currently, the 2010 Electoral Act pegs the amounts at N40, 000,000 and N20,000,000 for both positions. In the case of State Assembly, chairmanship and Councillor candidates of area council elections, candidates are not to spend above N30 million for both state assembly and chairmanship candidates (representing 200 percent increase) and N5 million (representing 400 percent increase) for Councillor standard bearers. The Bill also fixed donations to candidates of political parties by individuals and entities at N10 million as against N1 million prescribed in the 2010 Electoral Act (representing 900 percent increase). “A candidate who knowingly acts in contravention of this section, commits an offense and is liable on conviction to a maximum fine of 1 percent of the amount permitted as the limit of campaign expenditure under this Act or imprisonment for a term not exceeding 12 months or both,” Section 87 of the proposal states. •Continues online at www.businessdayonline.com NASD moves to connect PE investors with... Continued from page 1 Portal called “NASDeP” which it limits to only Private Equity (PE) investors to enable them access information on these enterprises. Interestingly, BusinessDay is the first news medium to see the specimen of the Enterprise Portal preparatory to its official public launch on March 22, 2018. Currently, there are many Nigerian early growth-enterprises looking for private equity, especially considering the high interest rate they would pay if they go borrowing from banks. Bola Ajomale, Managing Director/CEO, NASD Plc who spoke to BusinessDay in his Lagos office said that NASDeP collates standardised information on growthoriented enterprises and presents such information to pre-screened investors. Enterprises in different markets with growth opportunities require long-term capital to finance their operations. Weak support from the formal capital market forces such companies to borrow from commercial banks at expensive rates. Banks double digit interest rates on short-term loans are not sustainable, though the companies that are willing to give up the equity usually look for just an investment, not partners. This remains one of the main challenges for businesses to attract needed Private Equity (PE) funds. NASDeP bridges this gap by showcasing qualified enterprises to venture capital, private equity and other accredited investors who are seeking investment opportunities. It will be an information hub for enterprises, investors, business incubators and sponsors as well as analysts. Nigeria recorded $7.8 billion worth of Private Equity (PE) deals in five year period of 2012 and 2017, outshining other African countries like South Africa and Kenya, according to data from Africa Private Equity and Venture Capital Association (AVCA). “The greatest explosion in private equity, if it is going to occur anywhere around the world in the next couple of years, is going to be in Africa, particularly sub-Saharan Africa, where the penetration rate is about one-twelfth or so of what it is in the United States,” according to David Rubenstein, a billionaire co-CEO of a US based PE firm The Carlyle Group. Private Equity investment in Nigeria takes place in both start-up and established businesses; but the common investment strategies include venture capital, buyouts and restructuring (provision of growth capital). Bertrams Lukstins, Co-Founder, CEO at London-based market research firm, AfricaLinked.com noted that “deals and Private Equity is happening in Africa, the challenge is finding these deals.” “Even big funds have to do small deals. There have been instances where a $3billion-fund invested as little as $10million in a company,” he noted, adding that till 2020, there remains a great opportunity for small and mid-sized investments into companies that require $5million-$100million per transaction. “While capital is highly demanded in Nigeria and there is a lot of capital available for deals, there is a lack of good deals available. The main reason for this is people’s attitudes to ownership, companies prefer to borrow than give up equity. Many entrepreneurs rather have the whole business than a small piece of a huge pie. There is also a level of emotional ties to the business – many companies are family run and owned”, Lukstins noted. The NASDeP provides a platform where accredited investors can discover new investment opportunities; the platform also provides well-functioning enterprises with crucial access to patient capital and strategic partnerships. Ajomale said “the platform makes information handy for private equity investors” and others to ameliorate the rigors or going to research on growth-enterprises. It also aims to create a repository of information on viable growthoriented enterprises as well as an efficient, accessible and transparent information exchange, he said. “Such investors may range from casual, financial and strategic investors, to institutional firms who will provide operational enterprises with crucial access to capital and guidance from the best managers in the industry,” Ajomale told BusinessDay. The private equity (PE) and venture capital industry in Africa continues to witness strong performance across diverse sectors. Returns to investors are expected to remain strong with considerable growth in robust asset classes such as infrastructure, which provides stable, long-term cash flows. “Despite the prevalence of lucrative deals, investors in Africa face high transaction costs stemming from unique risk factors, such as exposure to market volatility, as well as political and credit risk,” said Lade Araba, Africa Region Representative, Convergence, a global network for blended finance that generates blended finance data, intelligence, and deal flow to increase private sector investment in developing countries. •Continues online at www.businessdayonline.com
Monday 26 February 2018 L-R: Helen Avery, private banking editor, Euromoney; Aminat Adedipe, head, currency trading, Access Bank plc; Herbert Wigwe, GMD/CEO, Access Bank plc, and Miles Jupp, English comedian and actor at the Euromoney private banking awards where Access Bank won the ‘best private bank for commercial banking capabilities in Nigeria’ at Landmark in Marylebone, London. Nigeria primary, secondary students enrolment shrunk 4.3m in 2016 ENDURANCE OKAFOR The number of primary and secondary students enrolled in both public and private schools in Nigeria dropped by over 4.3 million pupils/students in 2016, as compiled from the most recent education statistics report released February 16, by the National Bureau of Statistics (NBS). The public Early Child Care Development Education had a reduction of over 1.9 million in the number of enrolled pupils from 4.67 million in 2015 to 2.69 million in 2016. 1.36 million of the children were male while 1. 33 million were female, as compiled from the statistics report. Similarly, 1.46 million enrolled for private Early Child Care Development Education in 2016 as against 2.08 million in 2015, accounting for 618,959 de- ‘Horn your employability skills now to be competitive’ KELECHI EWUZIE Against the backdrop of the continuous rise in unemployment rate, Nigerian Bottling Company Limited (NBC) has reiterated the need for students and graduates to deliberately seek to develop skills, which can give them an edge in today’s competitive marketplace. Olumide Sholanke, director of human resources at NBC, while delivering a speech at a career fair organised by Pan-Atlantic University, stressed on the need for students to embrace teamwork, collaboration, volunteering opportunities and internships as these provide valuable experience that companies seek when hiring. “Volunteering is a very cline in the number of enrolled pupils. 734,726 of the children were male while 722,735 were female. The private primary school also had a reduction in the number of pupils that were enrolled in the period under review, as over 1.42 million decline was recorded from 4.65 million in 2015 to 3.24 million in 2016. Out of which, 1.63 million pupils were male and 1.61 million female. The junior secondary school was not any different from the primary school, as it recorded a decline of 351,304 students, from 6.18 million in 2015 to 5.84 million students enrolled in 2016. 4.79 million of such students enrolled in public junior secondary schools while the remaining 1.05 enrolled in private junior secondary schools. Classroom teachers were not left out in number reduction, as there vital part of your journey, as it portrays you as an individual who has mastered his/her time and can appropriate it wisely. This is very key for a company like ours where volunteering is an integral part of our DNA,” he said. According to Sholanke, the future is one in which teamwork and collaboration are at the heart of business, working on projects with people you may never meet, this is a social skill that must be naturally learned. He explained further the importance of internships: “Internships are a continuous learning experience- an extension of the classroom where you are empowered with a clear responsibility but also with a support network and all the learning strategies. Applying for and securing was a decline of primary school teachers by 24,847, from 567,380 employed in 2015 to total of 542,533 primary school teachers employed in 2016. Meanwhile, 283,051 of such teachers were male while 259,482 were female. Although, there was a record of increase in both public primary schools and the senior secondary school. The public primary school was up by 1.57 million, from 20.79 million in 2015 to 22.35 million in 2016. But, again the male pupils were higher than the female as the male stood at 11.80 million while the female at 10.55 million pupils. Similarly, 4.48 million students enrolled in senior secondary schools in 2016 as against 4.15 in 2015, a 325,956 students increase in the comparable period. 3.56 of such students enrolled in public senior internships equip you with necessary work experience and puts you in good stead for available, full-time jobs in the organisation.” With universities, polytechnics and colleges of education graduates churned out daily with little or no hope of securing their desired jobs, a massive dearth exists between this number of graduates and those deemed employable by organisations. This gulf in employability necessitated the career fair organised by Pan-Atlantic University, geared at providing clarity on graduate expectation and company required skill. The career fair with the theme “Bridging the Gap” was put together to encourage and contribute to nurturing the future of the country, providing a platform where the best secondary schools while the remaining 911,561 enrolled in private senior secondary schools. Africa’s most populous nation, home to about 186 million inhabitants, is the largest exporter of crude in the continent and it is the largest economy in the region. The nation emerged from its worst economic contraction that led the country deep into five consecutive quarters of negative economic growth. It had since experienced a positive economic trajectory in the second quarter of last year resulting from a global increase in the price of crude oil and the relative peace in the oil-rich Niger Delta, also led to the increase in production of its main exporting product. Although the question that needs urgent attention is how this growth has impacted on the general economy and of course the nation’s education sector. talents can be engaged and absorbed into the job market. NBC with over 3,000 employees has constantly demonstrated the ability to attract the best talent and is leaving no stone unturned in its bid to support youth development. With programmes such as “Youth Empowered” where it provides useful training for youths in business and life skills, to its training academies, where technical requirements of its operations are taught, the company continues to forge ahead in developing tomorrow’s leaders. The event served as a meeting point for industry and talent with an array of other human resource experts present to engage the new graduates as they prepare for the next steps in their career journey. C002D5556 BUSINESS DAY 47 NEWS Innoson commences training of 200 Niger Delta youths EMMANUEL NDUKUBA Innoson Kiara Academy has commenced training of 200 Niger Delta youths in automobile fitting to meet the needs of the country’s labour market. The exercise was flagged off at the factory auditorium in Nnewi, Anambra State at the weekend, with an induction programme for the participants drawn from different states. Endi Ezengwa, CEO of Innoson Kiara Academy, while addressing the participants, said the Academy was a citadel for youth empowerment with technical and vocational skills’ acquisition. “We facilitate training that enables trainees to understand the need for total rehabilitation in education for empowerment in automobile industry,” he said. According to Ezengwa, the trainees are expected to undergo training in auto mechanicals, electrical/electronics, fabrication, welding, painting and spraying. “At the end of the exer- Capital market to bridge investment gap in Nigeria ANTHONIA OBOKOH A proper functioning capital market is capable of attracting sufficient long-term funds to bridge Nigeria’s ballooning infrastructural deficit, according to Institute of Chartered Secretaries and Administrators of Nigeria (ICSAN). “The necessity for critical long-term investment by both public and private players to boost the productive capacity of the country becomes essential. To achieve this, the capital market has a critical role to play,” Peter Ashade, managing director, Africa Prudential plc, represented by Catherine Nwogu. Speaking at the ICSAN company secretaries and registrars’ forum with the theme “company secretaries and registrars: a functional partnership for capital market development” held in Lagos on Wednesday, Ashade said, capital market played the crucial role of mobilising fund for long-term investment in infrastructure, manufacturing, services and other critical sectors of the economy. “Development of the capital market is critical to bridging the investment gap in the country and highlights the importance of the 10 years Capital Market Master plan being implemented by the Securities and Exchange Commission which is aimed at deepening the capacity of the Nigerian capital market. “To build a robust capital market capable of supporting the economy for sustainable growth, Company secretaries and registrars have important roles to play; these seemingly inter-related functions are vital to improving investors’ confidence in the Nigerian capital market,” cise, they will develop their capabilities and independence toward becoming full participants in creating successful future. “Through our shared efforts, we will nurture and empower the trainees and staff of the academy to actively apply their talents and knowledge in the world of today and tomorrow,” Ezengwa said. The coordinator, Jamub Global Services Limited, Abuja, Sunny Wachir Kelek, said 600 youths were being trained in partnership with Innoson Kiara Academy. He noted that the amnesty programme had impacted positively on many lives in the course of the training, as they looked forward to better days, calling for more empowerment opportunity for youths. Some beneficiaries, Sunny Akpignovwu from Delta State, Gloria Horsefall (Rivers), Sunray Emmanuel Oluwadaesi (Ondo), Opuofoni Clarkson (Bayelsa), urged others to be patient, while appealing to Federal Government to make the scheme “continuous lifechanging programme for all Niger Delta Youths.” Ashade said. Samuel Kolawole, president, governing council of ICSAN, said over the years, the institution had consistently promoted the ideals of corporate governance through periodic issuance of policy paper and guidance material on corporate and public administration. “Back to 2018, this is a very apt theme that underscores the overlapping function of the corporate secretaries and registrars and the imperative for synergy between these two classes of professional and who play positive and remarkable role in the economic life of the nation,” Kolawole said. According to chairman of the occasion, Asue Ighodalo, founding partner, Banwo & Ighodalo, an effective and well-developed capital market catalyses the growth of a nation’s economy. “It assures efficient capital formation and mobilisation, and optimal resource allocation. A market will only properly develop where you have well governed participants, well-structured instruments, reliable and free information flow and an appropriately regulated environment. “I would like to appeal to all our economic Regulators especially those who regulate the capital market, industrial sectors and the flow of investments, to see themselves as market enablers, enhancers and developers and not as gate keepers,” Ighodalo said. Nkechi Onyenso, registrar, governing council of ICSAN, said the forum was a programme conceived as an avenue to expose participants to modern-day practices and practical solution to problems on company secretarial practices and related issues.
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