BusinessDay 28 Feb 2018
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NEWS YOU CAN TRUST I **WEDNESDAY <strong>28</strong> FEBRUARY <strong>2018</strong> I VOL. 14, NO 555 I N300 @ g<br />
Visionscape issuing<br />
N4bn bond priced<br />
at 15.75%<br />
... questions raised<br />
over timing<br />
LOLADE AKINMURELE<br />
Visionscape, the new<br />
waste management<br />
company employed<br />
by Lagos State, is issuing a<br />
N4 billion bond the second<br />
tranche of its N50 billion debt<br />
programme to implement<br />
an initiative to rid Nigeria’s<br />
economic hub of festering<br />
Continues on page 38<br />
MTN sticks to<br />
June listing for<br />
Nigeria unit<br />
... hopeful over SEC,<br />
NSE approvals<br />
IHEANYI NWACHUKWU<br />
The much expected initial<br />
public offering (IPO) by<br />
MTN Group for its Nigerian<br />
unit will not exceed June<br />
<strong>2018</strong>, <strong>BusinessDay</strong> can disclose.<br />
Ahead of that target, MTN Group<br />
hopes to get all necessary ap-<br />
Inside<br />
Continues on page 38<br />
Flour Mills<br />
completes N50bn<br />
sugar production<br />
facility P. 4<br />
China Development Bank,<br />
UBA sign $100m loan deal to<br />
support SMEs in Africa P. 38<br />
Non-oil economy gathers<br />
momentum in Q4 – NBS<br />
ISAAC ANYAOGU; ENDURANCE OKAFOR,<br />
Lagos & ONYINYE NWACHUKWU, Abuja<br />
Nigeria’s non-oil<br />
economy grew 1.5<br />
percent year on<br />
year (YOY) in the<br />
fourth quarter of<br />
2017, its strongest performance<br />
since 2015, according to GDP<br />
data from the National Bureau<br />
of Statistics (NBS) released yesterday.<br />
This is a reversal of the non oil<br />
sectors negative growth of -0.76<br />
percent recorded in the third<br />
quarter of 2017 and more than<br />
twice the average growth rate<br />
recorded in the first and second<br />
quarter of 2017.<br />
Overall economic growth for<br />
Sees strongest expansion since 2015<br />
Oil refining emerges worst performing sector<br />
2017 came in at 0.83 percent<br />
helped by an 8.68 percent growth<br />
in the oil sector. Even though<br />
the oil sector accounts for less<br />
than 10 percent of the country’s<br />
economic output, the non-oil<br />
sector remains highly dependent<br />
on the dollars earned from<br />
the sector which accounts for<br />
more than 90 percent of export<br />
revenue.<br />
“The non-oil sector recovered<br />
from the contraction in the prior<br />
Continues on page 4<br />
L-R: Lehle Belde, journalist, <strong>BusinessDay</strong>/moderator; Anthony Osae-Brown, editor, <strong>BusinessDay</strong>; Peace Hyde, Forbes Africa head, digital media and partnerships,<br />
West Africa correspondent; Tolu Ogunlesi, special adviser to President Buhari on digital and new media/head, Presidency Office of Digital Engagement (PODE);<br />
Hercules Venter, co-founder, Kalibrate Africa; JJ Omojuwa, founder/chief strategist, Alpha Reach, and Gbenga Aborowa, broadcast journalist, during the <strong>2018</strong> Social<br />
Media Week, with the theme “New Media Disruption and Modern Day Journalism: The Challenges and Opportunities” in Lagos, yesterday. Pic by Olawale Amoo
2 BUSINESS DAY<br />
C002D5556<br />
Wednesday <strong>28</strong> <strong>Feb</strong>ruary <strong>2018</strong>
Wednessday <strong>28</strong> <strong>Feb</strong>ruary <strong>2018</strong><br />
BUSINESS DAY<br />
3
4 BUSINESS DAY<br />
C002D5556<br />
Wednesday <strong>28</strong> <strong>Feb</strong>ruary <strong>2018</strong><br />
NEWS<br />
Flour Mills completes N50bn sugar production facility<br />
... largest agric investment in Nigeria<br />
CALEB OJEWALE<br />
Flour Mills of Nigeria<br />
has increased its<br />
investments in the<br />
country’s agricultural<br />
sector with a N50 billion<br />
sugar production facility in<br />
Niger state, as a way of improving<br />
the company’s capacity for<br />
backward integration and to<br />
gradually eliminate the need for<br />
importation.<br />
Data provided by the National<br />
Sugar Development Council<br />
(NSDC) on its website suggests<br />
sugar importation cost Nigeria<br />
$516 million in 2016, as the<br />
country continues to grapple<br />
with inability to scale up local<br />
production.<br />
The Nigerian Sugar Master<br />
Plan (NSMP) noted that while<br />
Nigeria belongs to the International<br />
Sugar Organization whose<br />
member countries numbering<br />
92 (at the time) represent 80<br />
percent of total world sugar production,<br />
81 percent of total world<br />
consumption, 64 percent of total<br />
sugar exports and 55 percent<br />
of sugar imports, the country<br />
however, only belongs to the category<br />
of sugar importers, where<br />
Non-oil economy...<br />
Continued from page 1<br />
quarter with support stemming<br />
mainly from Agriculture. The<br />
growth reflects the main harvest<br />
season which was above average.<br />
For us, we perceive favorable<br />
weather, increased cultivated land<br />
and sustained focus of the FG on<br />
the sector via various support programs<br />
as key drivers for increased<br />
output during the quarter. Another<br />
support to the positive non-oil<br />
growth was trade, following five<br />
consecutive quarters of negative<br />
growth. The rebound in trade was<br />
on the back of increased dollar<br />
availability, with sector overall<br />
contribution increasing to 16.8%<br />
(Q3 17: 15.9%),” ARM Research<br />
analysts said.<br />
Accelerated growth in Agriculture<br />
of 4.2 percent YOY versus 3.1<br />
percent in Q3 2017, recovery in<br />
trade 2.1 percent YOY versus -1.7<br />
percent in Q3 2017, and slower<br />
contraction in services of -0.8<br />
percent YOY versus -3.1 percent<br />
in Q3 2017 largely drove the overall<br />
economic growth in Q4 2017.<br />
But analysts have noted that<br />
the country’s GDP growth of 0.83<br />
percent in 2017 remains low.<br />
“The growth rate still lags far<br />
behind where Nigeria should be,”<br />
said Razia Khan, chief economist<br />
for Africa at Standard Chartered,<br />
although she noted that the fullyear<br />
growth was higher than the<br />
0.7 percent forecast by her bank.<br />
Elsewhere, the services sector<br />
also saw a slower contraction of<br />
-0.3 percent (Q3 17: -1.1%) during<br />
the review period which stemmed<br />
from the ICT sector (Q4 17: -1.5%;<br />
Q3 17: -4.5%). Though data from<br />
the Nigerian Communications<br />
Commission revealed a downturn<br />
in industry voice calls (-7% YoY to<br />
142 million active subscribers),<br />
mild growth in data services (YoY:<br />
3% to 95 million subscribers) was<br />
able to tame its effect on the industry’s<br />
total output. Oil refining<br />
remained in negative territory,<br />
losing -46.2% YoY.<br />
it ranked 4 in 2009. When compared<br />
to African neighbours,<br />
Nigeria is the least food - secure<br />
in terms of sugar as most of them<br />
produce substantial proportions<br />
of their sugar requirements.<br />
A pre-commissioning fact<br />
sheet made available to <strong>BusinessDay</strong>,<br />
revealed that Sunti<br />
Golden Sugar Estate (SGSE)<br />
Limited is a wholly owned subsidiary<br />
of Flour Mills of Nigeria<br />
(FMN) Plc, and comprises of a<br />
cane production area and sugar<br />
factory.<br />
“More than N50 billion has<br />
been invested in Sunti so far,<br />
making it the largest Agro Allied<br />
investment in Nigeria so far,” said<br />
the company in its fact sheet.<br />
It added that “SGSE is FMN’s<br />
single biggest investment since<br />
inception in 1960; its vision for<br />
agro-industrial transformation<br />
(in Nigeria).”<br />
Designed to have an output<br />
of 100,000 tons of sugar annually<br />
at full capacity, the facility<br />
occupies 15,100 hectares of<br />
land with a potential cane area<br />
of 5,000 ha out of which 3,000<br />
hectares is currently under cultivation.<br />
Majority of the area is<br />
enclosed within a 35-kilometer<br />
The Nigerian National Petroleum<br />
Corporation (NNPC) says it<br />
wants to raise the country’s refining<br />
capacity from the current nameplate<br />
capacity of 445,000 barrels<br />
per day (bpd) to 662,000 bpd, but<br />
this data indicates such plans are<br />
the blueprint for a pipedream.<br />
According to data from its operations<br />
and financial report for<br />
November, the three refineries<br />
produced 55,187 metric tonnes<br />
(MT) of finished petroleum products<br />
and 39,562 MT of intermediate<br />
products out of 107,748 MT of<br />
crude processed at a combined<br />
capacity utilization of 5.92 percent<br />
compared to 17.63 percent combined<br />
capacity utilization achieved<br />
in the month of October 2017.<br />
“A problem the NNPC will be<br />
confronted with is speed in getting<br />
approvals for funding to do<br />
repairs to increase efficiency of<br />
the assets, and if it can manage<br />
the repairs,” said Chuks Nwani, an<br />
dyke offering flood protection<br />
from the River Niger where the<br />
Sugar cane is cultivated under<br />
irrigation, making it an annual<br />
crop, and available for processing<br />
year round.<br />
Sadiq Usman, a director in<br />
FMN’s Agro-allied division, told<br />
<strong>BusinessDay</strong> by phone, that the<br />
project started about eight years<br />
ago with the acquisition of land,<br />
while actual development commenced<br />
five years ago.<br />
The Estate comprising the<br />
plantation and the mill is described<br />
in the factsheet as<br />
FMN’s Backward Integration<br />
programme under the National<br />
Sugar Master Plan (NSMP), towards<br />
the attainment of locally<br />
produced and refined sugar. According<br />
to FMN, the facility’s official<br />
commissioning is a pivotal<br />
event in propagating not only the<br />
significant investment in the Mill<br />
but the company’s growth and<br />
backward integration story to all<br />
stakeholders.<br />
In 2013, implementation of<br />
the Nigerian Sugar Master Plan<br />
(NSMP) was started with a goal<br />
to effectively end sugar importation<br />
within 10 years, when<br />
Nigeria should have achieved<br />
energy lawyer.<br />
Faster growth in food, beverage<br />
and tobacco and Textile, Apparel<br />
and Footwear erved as pillars in<br />
pushing the manufacturing sector<br />
back to a positive growth of +0.1<br />
percent (Q3 17: -2.9%).<br />
“Consistent with the above-50<br />
readings in PMI releases over H2<br />
2017, the manufacturing sector<br />
expanded 1% y/y driven by gains<br />
in the key sub-sectors: food, beverage<br />
and tobacco (up 2.2% y/y)<br />
and textiles, apparel and footwear<br />
(up 1.6% y/y) alongside a return<br />
to growth across most industries<br />
which helped offset continued<br />
weakness in refining (down 47%<br />
y/y) and cement (down 1.6% y/y).<br />
The improvements reflect an improved<br />
FX liquidity profile and a<br />
recovery in consumer demand as<br />
PMI readings in Q4 2017 showed<br />
higher new orders, growing inventory<br />
and rising employment,” said<br />
Ecobank research analysts in a <strong>Feb</strong>.<br />
self-sufficiency. As at last year,<br />
however, it was reported that<br />
Nigeria has achieved only 40.3<br />
per cent of the target set for attainment<br />
by the first half of the<br />
10-year lifespan of the sugar<br />
master plan.<br />
It appears many companies<br />
are yet to fully take advantage of<br />
the opportunities in producing<br />
more sugar locally, retaining<br />
more of the foreign exchange<br />
used for importation, and putting<br />
the country in a position to<br />
be more elf-sufficient.<br />
The sugar production facility<br />
in Mokwa, Niger state, currently<br />
employs 3,000 people mainly<br />
sourced from the surrounding<br />
communities. Once development<br />
is completed 10,000 people<br />
will be employed. CSR projects<br />
have been done installing drains,<br />
culverts and roads around host<br />
communities, including the<br />
30-kilometer road from Mokwa.<br />
In addition to the Sugar value<br />
chain, FMN says it has also<br />
embarked on significant backward<br />
integration investments in<br />
the Cassava/Sorghum/Wheat<br />
value chain as well as the Edible<br />
Oil (Palm and Soybean) value<br />
chains.<br />
Sitting from<br />
Left: Jin Tao,<br />
director-general,<br />
Global<br />
Cooperation<br />
Department–<br />
Americas and<br />
Africa, China<br />
Development<br />
Bank (CDB),<br />
with Kennedy<br />
Uzoka, GMD/<br />
CEO, UBA<br />
plc, signing a<br />
$100 million<br />
loan facility<br />
agreement to<br />
fund SMEs in<br />
Africa. Standing<br />
behind are<br />
Zheng Zhijie,<br />
president of<br />
CDB, and<br />
Tony Elumelu,<br />
chairman<br />
of UBA plc,<br />
at the UBA<br />
House in<br />
Lagos, yesterday.<br />
27 note to clients.<br />
“Looking ahead, the stronger<br />
non-oil growth reading lifts our<br />
optimism regarding Nigeria’s economic<br />
growth prospects over <strong>2018</strong>.<br />
We now see telecommunications<br />
GDP exiting recession in Q1 <strong>2018</strong><br />
given the strength of the quarterly<br />
recovery over Q4 17 even as a more<br />
accommodative monetary policy<br />
stance and improved FX liquidity<br />
buoys activity in the manufacturing<br />
and trade sectors. In addition,<br />
improvements in fiscal revenue<br />
at both federal and state level are<br />
likely to allow for further gains<br />
in the construction and cement<br />
sectors. For oil GDP, we expect oil<br />
production to average 2.11mbpd<br />
(2017e: 1.88mbpd) helped by continued<br />
peace in the Niger Delta and<br />
likely on-streaming of the 250kbpd<br />
Egina oil field in Q3 <strong>2018</strong>. In all we<br />
look for real GDP growth of 3% in<br />
<strong>2018</strong> up from our prior forecasts for<br />
2.6% growth.<br />
Nigeria’s $2.5bn<br />
Eurobond could<br />
trigger yield curve<br />
normalisation<br />
BALA AUGIE<br />
Federal Government of Nigeria’s<br />
decision to tap the<br />
international debt market<br />
with a view to refinancing domestic<br />
debt and reducing local borrowing<br />
costs could trigger yield curve<br />
normalization.<br />
Investors historically have<br />
viewed the shape of the yield curve<br />
as a signal of future growth.<br />
The yield curve compares interest<br />
rates at different maturities,<br />
typically the spread between yields<br />
on one- and 10-year bonds.<br />
Ten-year yields historically have<br />
reflected the market’s growth and<br />
inflation outlook, while the short<br />
end of the curve is mainly tied to<br />
market expectations for central<br />
bank rates.<br />
The normal yield curve is one in<br />
which short term debt instruments<br />
have a lower yield than long term<br />
debt instrument of the same credit<br />
quality.<br />
Fixed Income analysts have<br />
agreed that the narrow difference<br />
between yields on shorter term<br />
paper of 15.40 percent and the yield<br />
on long term dollar denominated<br />
debt of 13.80 percent means there<br />
is significant downward pressure<br />
on short term interest rates.<br />
However, they add that yields<br />
on short term securities may not<br />
go down further as the central bank<br />
could mop up or stem liquidity by<br />
intensifying on Open Market Open<br />
(OMO) issuance with a view to attracting<br />
foreign investors.<br />
“Because federal government<br />
plans to bring down borrowing<br />
costs, they are going to reduce their<br />
borrowing in treasury bills and that<br />
will suppress the short term interest<br />
rates,” said Wale Okunrinboye,<br />
a fixed income and FX analyst at<br />
Ecobank Group.<br />
“More money is going to come<br />
into the system and that will depress<br />
yields at the segment so short<br />
term interest rate will start declining.<br />
Last year short term rates were<br />
higher than long term rates,” said<br />
Okunrinboye.<br />
Nigeria recently sold $2.5bn<br />
worth of Eurobond via a dual series<br />
offering of 12 year and 20 year tenors,<br />
priced at 7.143% and 7.696%<br />
respectively.<br />
Investors have flocked to Nigerian<br />
Eurobond as improved oil<br />
production and a flexible exchange<br />
rate helped the country exist its first<br />
recession in 25 years.<br />
Inflation which is a bonds worst<br />
enemy because it moves in inverse<br />
proportion to price, fell to 15.10<br />
percent for a 12 consecutive month<br />
in January <strong>2018</strong>, according to a recent<br />
report by the National Bureau<br />
of Statistics (NBS).<br />
Finance Minister Kemi Adeosun<br />
said recently that the country<br />
plans to redeem N762.5 billion<br />
worth of treasury bills and that it<br />
would save government N64 billion<br />
each year after the refinancing<br />
is completed.<br />
Eurobonds make up more than<br />
a fifth of Nigeria’s $15.35 billion foreign<br />
debt portfolio as of September<br />
and more than half of interest paid<br />
in the third quarter, according to<br />
data from the Debt Management<br />
Office (DMO).<br />
Nigeria’s Eurobond portfolio<br />
now stands at $8.5bn (or $8.8bn if<br />
the $300 million diaspora bond is<br />
included), and the total external<br />
Continues on page 38
Wednesday <strong>28</strong> <strong>Feb</strong>ruary <strong>2018</strong> C002D5556 BUSINESS DAY 5
6 BUSINESS DAY C002D5556<br />
NEWS<br />
Oil spills: Hope rises for NOSDRA Act<br />
amendment as N/Assembly supports<br />
IGNATIUS CHUKWU & INNOCENT IWARA<br />
Hopes are high<br />
in the oil region<br />
that the agency<br />
set up to fight<br />
pollution may<br />
be strengthened to act more<br />
swiftly and decisively. This<br />
is as senators and other lawmakers<br />
who attended a session<br />
on the matter showed<br />
total commitment to pushing<br />
through with the requests for<br />
an amendment.<br />
Now, after organising a<br />
roundtable discussion in<br />
conjunction with the House<br />
of Representatives Committee<br />
on Environment and<br />
Habitat in Abuja, Niger Delta-based<br />
group, the National<br />
Coalition on Oil Spills and<br />
Gas Flaring in the Niger Delta<br />
(NACGOND) now believes<br />
present defects in the Act<br />
that established the National<br />
Oil Spills Detection and Response<br />
Agency (NOSDRA)<br />
would soon be corrected.<br />
“I have no doubts that the<br />
Act will be amended soon,”<br />
said NACGOND’S national<br />
… new law may give more powers to punish polluters<br />
coordinator, Edward Obi, in<br />
Port Harcourt.<br />
Obi said the assurances<br />
NACGOND got from members<br />
of the National Assembly<br />
at the Abuja discussion,<br />
which targeted lawmakers,<br />
oil companies and regulatory<br />
agencies like the Department<br />
of Petroleum Resources<br />
(DPR), on <strong>Feb</strong>ruary 19, <strong>2018</strong>,<br />
were enough for the group to<br />
believe that a positive outcome<br />
was imminent.<br />
“I got assurances from<br />
the members of the National<br />
Assembly that they will go to<br />
work on this matter. There<br />
is real, ample agreement<br />
around the table that this<br />
law needs to be amended<br />
and NOSDRA needs to be<br />
strengthened,” he said.<br />
He said areas that need<br />
amendment as unanimously<br />
agreed by delegates include<br />
funding; regulatory overlap<br />
with other agencies like the<br />
DPR; lack of clarity on NOS-<br />
DRA’s powers to issue penalties<br />
to oil companies in matters<br />
relating to gas flaring and<br />
oil spillage; as well as other<br />
technical gaps.<br />
As such, he said, all delegates,<br />
including members of<br />
the National Assembly, were<br />
involved in the drafting of a<br />
communiqué containing areas<br />
of loopholes and recommended<br />
amendments.<br />
Obi said: “There was<br />
agreement around the table,<br />
not only members of the<br />
National Assembly, but also<br />
DPR and the oil companies,<br />
particularly Shell (Petroleum<br />
Development Company)<br />
that stayed there and participated<br />
in the drafting of the<br />
communiqué. Everybody<br />
thus sees, now, the need for<br />
the amendment of the NOS-<br />
DRA law.<br />
“There was also a representation<br />
from the Senate.<br />
Victor Umeh actually sat<br />
through the entire event, but<br />
representing Remi Tinubu<br />
who is Chairman of the Senate<br />
Committee on Environment.<br />
He sat through the<br />
entire thing and through the<br />
drafting of the communiqué<br />
and took a copy of the communiqué<br />
to the Senate Committee.”<br />
He said some of the recommendations<br />
made include;<br />
“the need for the establishment<br />
of a National<br />
Oil Spill Liability Trust Fund.<br />
NOSDRA (should) be given<br />
power to enforce compliance<br />
with the laws relating to oil<br />
spill management.<br />
“Adequate and prompt<br />
compensation be made by<br />
the facility owner, and such<br />
compensation must relate<br />
directly to an ecological, economic<br />
or property damage<br />
arising from an oil spill or gas<br />
leakage.<br />
“NOSDRA should be a<br />
one-stop shop for all oil spill<br />
and gas flare related matters<br />
to ensure adequate and<br />
timely response. Communities<br />
should be recognised not<br />
only as stakeholders but also<br />
as shareholders in oil and gas<br />
exploration and exploitation.”<br />
L-R: Bliqees Odewale, brand manager (Omo), Unilever Nigeria; Laurel Beaufils, deputy high commissioner, British High Commission;<br />
Bridget Tose; Stephen Ukpai, both are pupils, Ken Ade Private School Makoko; Nnenna Ikpeme, perfect city manager,<br />
customer development, Unilever Nigeria; Ayodele Aburo, sustainable business manager, Unilever Ghana & Nigeria, and Polly<br />
Alakija, painter, Daraja Designs, at the presentation of the creative work of Art made by the pupils of Ken Ade School, Makoko<br />
as part of the Unilever Perfect City programme, to the Deputy British High Commissioner in Lagos, yesterday.<br />
EU commits €47m to fight human trafficking, irregular migration in Africa<br />
IDRIS UMAR MOMOH, Benin<br />
Ambassador of the European<br />
Union to Nigeria,<br />
Ketil Karlsen,<br />
says the Union has<br />
committed €47 million to fight<br />
against human trafficking and<br />
irregular migration across the<br />
Africa continent.<br />
Karlsen, who made the<br />
disclosure at a roundtable<br />
meeting on Migration and<br />
Human Trafficking organised<br />
by the Senate on Monday in<br />
Benin City, assured of the Union’s<br />
readiness to provide the<br />
needed assistance to end the<br />
scourge of human trafficking<br />
and irregular migration in the<br />
continent.<br />
He said that in 2017, about<br />
187,000 registered irregular<br />
migrants to Libya about 16<br />
percent of them were from Nigeria.<br />
In his keynote address,<br />
the Senate president, Bukola<br />
Saraki, lamented that Nigerians<br />
led in the pack of applications<br />
for asylum seekers rejected<br />
by European countries.<br />
Saraki, who noted that the<br />
EU rejected asylum since 2011,<br />
said Nigerians accounted for<br />
nearly 100,000 applications, almost<br />
three times the number<br />
of any other African country.<br />
While assuring that the<br />
Federal Government will<br />
adopt a carrot and stick approach<br />
in its commitment to<br />
put an end to the scourge of<br />
irregular migration and human<br />
trafficking in the country,<br />
he noted that government<br />
was losing sleep over the issue,<br />
which had led to the death of<br />
over 10,000 Nigeria on the perilous<br />
journey in five months.<br />
The Senate president said<br />
as representatives of the people,<br />
they were determined to<br />
seek ways of addressing the<br />
problem.<br />
“This is not a blame game.<br />
Let me make it abundantly<br />
clear that Nigeria is willing<br />
to collaborate with countries<br />
and international partners<br />
on irregular migration. We<br />
should be able to work out a<br />
carrot-and-stick approach that<br />
gives our people the incentive<br />
to stay on the continent and<br />
strive.<br />
“Every human being deserves<br />
his or her own place in<br />
the sun - and for many, that<br />
place in the sun is here, in Africa<br />
– but they have to stay in<br />
order to find it,” he said.<br />
Saraki, who commended<br />
President Muhammadu Buhari<br />
for the initiative to immediately<br />
commence the repatriation<br />
of Nigerians stranded<br />
in countries such as Libya, and<br />
being sold as slaves, promised<br />
that Nigeria was willing to collaborate<br />
with international<br />
countries and partners in its<br />
commitment to put an end to<br />
irregular migration in Nigeria.<br />
He said the roundtable was<br />
intended to help identify how<br />
legislation and policy could be<br />
brought to bear in addressing<br />
the problem of irregular migration<br />
of Nigerians and Africans<br />
to Europe.<br />
Emefiele keeps CBN integrity, Akpabio says<br />
HOPE MOSES-ASHIKE<br />
Senate minority leader<br />
and former governor<br />
of Akwa Ibom<br />
State, Godswill Akpabio,<br />
said over the weekend<br />
that Godwin Emefiele,<br />
governor of Central Bank<br />
of Nigeria (CBN), had kept<br />
the integrity of the CBN and<br />
maintained the stability of<br />
the naira.<br />
Akpabio said this while<br />
presenting the Special<br />
Achievement Award conferred<br />
on him by the Silverbird<br />
Group in Lagos.<br />
He said the Senate had<br />
passed a bill to domicile<br />
the Nigeria Financial Intelligence<br />
Unit (NFIU) in the<br />
CBN, in line with global<br />
practices.<br />
Receiving the award,<br />
Emefiele, who was accompanied<br />
by Okwu Joseph<br />
Nnanna, deputy governor,<br />
Financial System Stability<br />
(FSS), and other top staff of<br />
Nigeria records $591m loss, 17,500 deaths<br />
annually from tobacco consumption<br />
HARRISON EDEH & CYNTHIA EGBOBOH<br />
Sub-regional coordinator<br />
for West Africa<br />
Campaign for Tobacco-Free<br />
Kids, Hilda<br />
Ochefu, says Nigeria records<br />
an estimate of $591 million<br />
worth of economic loss and<br />
17,500 deaths yearly resulting<br />
from tobacco consumption.<br />
This comes as experts are<br />
raising concerns and pointing<br />
out that the Federal Government<br />
appears to lack the political<br />
will to tackle the excess<br />
consumption of tobacco in<br />
Nigeria.<br />
Speaking at a policy dialogue<br />
on the economics of<br />
tobacco taxation held on<br />
Tuesday in Abuja, Hilda said<br />
an average of 600,000 premature<br />
deaths were caused<br />
by passive tobacco consumption<br />
annually, and of these<br />
deaths 31 percent occurred<br />
among children and 64 percent<br />
among women.<br />
Meanwhile, the views of<br />
some experts show that the<br />
government is managing effects<br />
of tobacco consumption<br />
on the health of the people<br />
Reps ask Buhari to provide security<br />
across insurgency prone schools<br />
KEHINDE AKINTOLA, Abuja<br />
The House of Representatives<br />
on Tuesday<br />
urged Federal<br />
Government to focus<br />
more on providing adequate<br />
security for students across<br />
the insurgency prone North-<br />
East region of Nigeria.<br />
The lower chamber also<br />
resolved to invite all the<br />
Service Chiefs to an executive<br />
session on the nation’s<br />
security situation. The resolution<br />
was passed following<br />
the adoption of a motion of<br />
urgent national importance<br />
sponsored by Goni Lawan<br />
(APC-Yobe).<br />
The motion came few<br />
days after the Nigerian authorities<br />
confirmed the<br />
kidnap of 110 students of<br />
Government Girls Technical<br />
College in Dapchi area of<br />
Yobe State.<br />
While leading the debate,<br />
Lawan expressed displeasure<br />
the CBN, attributed the successes<br />
recorded by the apex<br />
bank to the staff of the bank.<br />
Emefiele said they toiled<br />
and worked very hard in spite<br />
of the challenges facing the<br />
country, saying, “This award<br />
would further spur the CBN<br />
to work even harder for the<br />
benefit of Nigeria and Nigerians,”<br />
while appreciating the<br />
Board and Management of<br />
the Silverbird Group for considering<br />
him for the award.<br />
On the other hand, he<br />
disclosed that since the commencement<br />
of the Anchor<br />
Borrowers Programme in<br />
November 2015, the CBN in<br />
partnership with states and<br />
several private sector groups<br />
had disbursed a cumulative<br />
sum of N55.526 billion<br />
to over 250,000 farmers who<br />
cultivated almost 300,000<br />
hectares of farmland for rice,<br />
wheat, maize, cotton, soybeans,<br />
cassava, etc.<br />
Two years into the implementation,<br />
the programme<br />
Wednesday <strong>28</strong> <strong>Feb</strong>ruary <strong>2018</strong><br />
because of the acclaimed tax<br />
they pay and the social responsibilities<br />
performed by<br />
these tobacco companies.<br />
Research shows that tobacco<br />
companies pay excise<br />
tax of 20 percent on a unit cost<br />
of production and 5 percent<br />
VAT. Meanwhile, the World<br />
Health Organisation (WHO)<br />
recommends an excise tax of<br />
75 percent. Looking at the aggregate<br />
market consumption,<br />
Nigeria consumes 18.4 billion<br />
sticks of cigarettes annually of<br />
which 12.2 billion sticks are<br />
domestically produced.<br />
Chukwuka Onyekewena,<br />
director, Centre for the Study<br />
of the Economies of Africa<br />
(CSEA), said there was need<br />
for effective control of tobacco,<br />
noting that tobacco consumption<br />
accounted for 17,500<br />
deaths yearly in Nigeria.<br />
He however recommended<br />
that the government<br />
should adopt a specific taxation<br />
system, increase import<br />
levy to 50 percent of Cost<br />
Insurance and Freight (CIF)<br />
per pack of cigarette, and promote<br />
tobacco education programmes.<br />
over indiscriminate abduction<br />
of unsuspecting students<br />
and the attendant suffering<br />
being subjected to by their<br />
abductors.<br />
Other lawmakers, who<br />
spoke in favour of the motion,<br />
namely: Sadiq Ibrahim<br />
(APC-Adamawa); Garba<br />
Tchede (APC-Taraba);<br />
Nnena Elendu-Ukeje (PDP-<br />
Abia) and Abdul Sani (APC-<br />
Bauchi), tasked the Federal<br />
Government to direct relevant<br />
security agencies toward<br />
securing immediate<br />
release of the schoolgirls.<br />
The House also expressed<br />
its sympathy for parents of<br />
the abducted girls as well as<br />
the people and government<br />
of Yobe State.<br />
To this end, the House<br />
resolved that a committee<br />
be set up by Speaker Yakubu<br />
Dogara to visit Dapchi on<br />
assessment mission and report<br />
its findings for further<br />
legislative action.<br />
has contributed to the creation<br />
of an estimated 890,000<br />
direct and 2.6 million indirect<br />
jobs.<br />
Speaking last week on<br />
‘Engendering the Growth of<br />
Nigeria’s Poultry Industry,<br />
at Akure, Ondo State, Emefiele<br />
said the CBN remained<br />
committed to working with<br />
the states in supporting small<br />
holder farmers and processors<br />
across other items that<br />
could be produced in the<br />
state.<br />
“Let me assure the state<br />
governor, and the good people<br />
of Ondo State that the<br />
CBN stands ready to collaborate<br />
with you in supporting<br />
the development of a viable<br />
agricultural sector in this<br />
state. And this readiness is<br />
directly in harmony with our<br />
resolve and vision to create<br />
a professional and peoplecentred<br />
central bank that will<br />
act as a financial catalyst for<br />
job creation and inclusive<br />
economic growth,” he said.
Wednesday <strong>28</strong> <strong>Feb</strong>ruary <strong>2018</strong><br />
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BUSINESS DAY<br />
7<br />
FG not ready for provision of<br />
perimeter fencing in <strong>2018</strong><br />
IFEOMA OKEKE<br />
Despite the spate<br />
of runway incursions<br />
across Nigerian<br />
airports,<br />
<strong>BusinessDay</strong>’s checks show<br />
that the Federal Government<br />
may not provide perimeter<br />
fences across the<br />
airports in <strong>2018</strong>.<br />
The Federal Airports Authority<br />
of Nigeria (FAAN)<br />
Tuesday said it would capture<br />
the construction of perimeter<br />
fences in all airports<br />
in the 2019 budget.<br />
Experts say 2019 may be<br />
too late for this development<br />
as Nigerian airports<br />
continue to remain porous<br />
and could be threats to security<br />
if immediate steps<br />
are not taken to address security<br />
lapses at the airports.<br />
The recent incursion of<br />
Akure airport runway by<br />
cows that caused AirPeace<br />
aircraft to delay landing for<br />
about 20 minutes, thieves<br />
opening up cargo hold at<br />
the airport, the falling off of<br />
Dana Air door upon arrival<br />
at Lagos airport and the<br />
recent theft at the airports<br />
have again brought to the<br />
fore the need to improve<br />
aviation safety through ensuring<br />
that aircraft, airport<br />
runways and airside are secured.<br />
John Ojikutu, member<br />
of aviation industry<br />
think tank group, Aviation<br />
Round Table (ART) and<br />
chief executive of Centurion<br />
Securities, told <strong>BusinessDay</strong><br />
that if the NCAA<br />
had put security fences<br />
across airports in the<br />
country, there would not<br />
be incursion of the runways<br />
by cows.<br />
“The NCAA and FAAN<br />
should be blamed for absence<br />
of security fences<br />
across our airports. There<br />
are certain things we must<br />
have in place before we<br />
are certified to operate the<br />
airport. If NCAA approved<br />
the airports to be operating<br />
without perimeter<br />
fences, the airline should<br />
know that.<br />
“This information<br />
should be in the Aeronautical<br />
Information Publication<br />
(AIP). The pilot must<br />
read it before he departs.<br />
The operators too should<br />
be blamed because if they<br />
are going to Akure, they<br />
should take precaution on<br />
landing,” Ojikutu said.<br />
He recalled that in<br />
1990s, when he was the<br />
airport commandant people<br />
were farming on the<br />
runway side of the Murtala<br />
Muhammed International<br />
Airport (MMIA), until he<br />
had to put a stop to it.<br />
On the issue of poaching,<br />
Ojikutu advised that that<br />
FAAN should “withdraw<br />
coy Identity Cards from disengaged<br />
staff and ensure<br />
same for ground handling<br />
staff; limit number of staff<br />
working in the aircraft and<br />
apron, and conduct regular<br />
background checks on all.<br />
Ensure regular payment of<br />
salaries; demand for security<br />
enhanced fences and<br />
regular patrol of aircraft<br />
manoeuvring areas.”<br />
‘Compel oil majors to build refineries,<br />
power plants, or revoke their licences’<br />
IGNATIUS CHUKWU & DAVID EJIOHUO<br />
The Federal Government<br />
has been told<br />
to compel the oil<br />
multinationals to<br />
build refineries and bring<br />
to an end the perennial fuel<br />
scarcity in Nigeria.<br />
An engineer, Lucky Akhiwe,<br />
who is the vice president<br />
of the South-South Chambers<br />
of Commerce, made the<br />
observation when he spoken<br />
with <strong>BusinessDay</strong> in an exclusive<br />
interview at the Port<br />
Harcourt International Airport,<br />
Omagwa.<br />
According to Akhiwe, who<br />
is also the chairman of Oil<br />
Flow Services, the only solution<br />
to end the embarrassing<br />
fuel scarcity in the country<br />
was for the Federal Government<br />
to have strong political<br />
will and compel the major<br />
oil exploration companies to<br />
build at least three refineries<br />
in the country.<br />
This decision, he noted, is<br />
being made all over the world<br />
and all the Federal Government<br />
needs to do is to make<br />
a condition for oil companies<br />
to have it as part of their lease<br />
agreement to build refineries<br />
of at least 300 barrels of petrol<br />
per day or have their lease<br />
cancelled.<br />
These refineries he further<br />
noted must not be<br />
modular ones but refineries<br />
that could produce about 300<br />
barrels a day and any major<br />
exploration company that<br />
failed to do so should have its<br />
lease agreement terminated<br />
by the Federal Government.<br />
Apart from the refineries,<br />
the oil companies should<br />
also be made to build power<br />
plants as part of their obligations<br />
to the nation and their<br />
contribution to boost the<br />
electricity generation in the<br />
country.<br />
The chamber of commerce,<br />
he explained, had on<br />
several occasions, engaged<br />
the Federal Government on<br />
the need to make these decisions<br />
but regrets that the<br />
government lacks the strong<br />
political will to do so.<br />
This, he said, was unfortunate<br />
because these companies<br />
make their money here,<br />
taking it as an advantage because<br />
they were not asked<br />
to plough back their wealth<br />
into the country. “I tell you,<br />
if this decision is taken, we<br />
can buy fuel at N30 per litre<br />
in this country and we can<br />
have enough electricity generated<br />
into our homes and<br />
industries.’’<br />
On the development of<br />
the modular refineries as<br />
proposed by the Federal<br />
Government, Akhiwe explained<br />
that the modular<br />
refineries idea was feasible<br />
but regretted that the<br />
Federal Government was<br />
not helping the matter because<br />
of the bottle neck<br />
conditions. “How can you<br />
ask people to start paying<br />
$150,000 as condition to get<br />
the license, even when the<br />
procedure is not clear. How<br />
can you ask community<br />
people to pay such amount<br />
as a condition to start a<br />
modular refinery, from<br />
where will they produce the<br />
money’’?<br />
NEWS<br />
Land use charge: OPS mulls<br />
legal action against Lagos<br />
… says law inhumane, insensitive to enterprise<br />
JOSHUA BASSEY<br />
Organised Private<br />
Sector (OPS) is<br />
considering a legal<br />
option to challenge<br />
the provisions of the Lagos<br />
Land Use Charge law assented<br />
by Governor Akinwunmi<br />
Ambode on <strong>Feb</strong>ruary 7, describing<br />
the legislation as<br />
‘insensitive’ and at variance<br />
with the ease of doing business<br />
drive of government at<br />
federal and state levels.<br />
The OPS through one of<br />
its bodies – Nigeria Employers’<br />
Consultation Association<br />
(NECA) says the amended<br />
Land Use Charge Law,<br />
which replaced the Land Use<br />
Charge Law 2001, lacks ‘humanness,’<br />
which is a major<br />
attribute of good governance.<br />
Olusegun Oshinowo,<br />
director-general of NECA, in<br />
a statement on Tuesday, said<br />
the “OPS will not stand hand<br />
tied up to celebrate impunity<br />
and cheer disdain. It will fight<br />
this law by social resistance<br />
and any other legitimate<br />
means at its disposal.”<br />
Oshinowo observed: “The<br />
new law will expect property<br />
owners in Lagos State to pay<br />
an increase of over 200 per<br />
cent in Land Use Charge<br />
even when the income of the<br />
property owner has not experienced<br />
significant increase<br />
to justify the charge.<br />
“There is, also, a penalty<br />
payment ranging between<br />
125-200 percent, if payment<br />
is not made between April<br />
and August <strong>2018</strong>. The new<br />
charge is, thus, highly insensitive<br />
and inhumane to<br />
say the least. It is, therefore,<br />
unacceptable to organised<br />
businesses.”<br />
Although Oshinowo<br />
commended Ambode for<br />
“good works and making<br />
Lagos a model for good<br />
governance,” he, however,<br />
averred, “sensitivity and humanness,<br />
which is part of<br />
good governance, is missing<br />
in the amended Land<br />
Use Charge law of the state.”<br />
The new law extended<br />
the period for the payment<br />
of all annual Land Use<br />
Charge Demand Notices<br />
for <strong>2018</strong> to Saturday, April<br />
14, <strong>2018</strong>. The extension is<br />
to enable property owners<br />
and affected occupiers<br />
take the option of enjoying<br />
the discounts available for<br />
the prompt and early payment<br />
of Land Use Charge<br />
invoices.<br />
The land use charge law<br />
as amended seeks to consolidate<br />
all property and land<br />
based rates/charges into a<br />
single property charge. It<br />
also sets the modalities for<br />
levying and collection of<br />
land use charge in Lagos<br />
State<br />
The state government<br />
believed that the law, which<br />
would expectedly boost the<br />
revenue profile of the state,<br />
would significantly contribute<br />
to the growth and development<br />
of Lagos as well as<br />
facilitate the current administration’s<br />
vision of a globally<br />
competitive mega city.
8 BUSINESS DAY<br />
C002D5556<br />
Wednesday <strong>28</strong> <strong>Feb</strong>ruary <strong>2018</strong>
Wednessday <strong>28</strong> <strong>Feb</strong>ruary <strong>2018</strong><br />
BUSINESS DAY<br />
9
Wednesday <strong>28</strong> <strong>Feb</strong>ruary <strong>2018</strong><br />
10 BUSINESS DAY<br />
C002D5556<br />
COMMENT<br />
SMALL BUSINESS HANDBOOK<br />
EMEKA OSUJI<br />
Dr Emeka Osuji<br />
School of Management and<br />
Social Sciences<br />
Pan Atlantic University<br />
Lagos. eosuji@pau.edu.ng @Emyosuji<br />
Poverty reduction war takes back seat<br />
These are by no means<br />
the best of times for our<br />
country Nigeria. The<br />
most dastardly centripetal<br />
forces have been<br />
arrayed against her. And every effort,<br />
including those that are tested<br />
and proved efficacious elsewhere,<br />
have become impotent.The challenge<br />
of poverty, which was one of<br />
her biggest enemies, and against<br />
which microfinancing and other<br />
economic defence strategies were<br />
implemented, has suddenly paled<br />
into oblivion, as more vicious<br />
enemies take the centre stage. As<br />
things stand now, it is hard to focus<br />
on the war against poverty when<br />
the battle field has widened and<br />
become very shifty, as terrorists<br />
ravage the country. A whole region<br />
of the country, the North East, and<br />
several portions elsewhere, are<br />
completely engulfed by a nameless<br />
war, which is at any rate a great war,<br />
by any standard – the war waged by<br />
Boko Haram and herdsmen.<br />
To make matters worse, Nigeria<br />
has just transited power essentially<br />
between two mutually antagonistic<br />
political groupings that are ideologically<br />
hard to distinguish. Those<br />
who inherited power had barely<br />
settled down when the country<br />
was struck by all manner of evil,<br />
akin to share bad luck – collapse<br />
of the international oil market,<br />
declining national output of the<br />
category called recession, and<br />
what may be termed self-imposed<br />
disabilities, including obviously<br />
divisive policies that have widened<br />
and multiplied the national<br />
cracks, turning them into gorges<br />
that may never be filled.<br />
Evidently, a time like these is<br />
usually difficult for any country,<br />
wherever it may be located in the<br />
world. Sadly such times do not<br />
encourage objective assessment<br />
of challenges and hence blur<br />
the choice of effective solutions.<br />
Moreover, most governments<br />
caught up in such situations often<br />
find themselves living in denial,<br />
for a number of understandable<br />
reasons. First, the challenges<br />
they face are usually rooted in<br />
the past and hence there is ample<br />
room for alibi and blame game.<br />
Second, even where there are<br />
obvious errors and issues, such<br />
governments usually prefer to<br />
deny their existence,especially<br />
because it may be dangerous to<br />
easily accept one’s faults when one<br />
has not established a track record<br />
of performance. The result often<br />
is a lot mistrust for government.<br />
As a consequence of this phenomenon,<br />
both at national and<br />
subnational levels, many Nigerians<br />
are viewing the current state<br />
of affairs with sociological detachment.<br />
Those who are apolitical do<br />
not see their role in anything poli-<br />
There is need for a complete<br />
review of the challenges<br />
facing Nigeria, including<br />
poverty... The challenge of<br />
poverty in Nigeria has gone<br />
beyond hand-outs and<br />
on-lending facilities. The<br />
root causes of poverty have<br />
become bigger than the<br />
problem of poverty<br />
ticians do. They sit on the fence. Others<br />
are downright naïve, and do not<br />
see how the crisis in the North East,<br />
for instance, affects them in their<br />
far away regions.They are fine with<br />
the suffering or exclusion of other<br />
groups as long as their group has its<br />
teeth deep in the pie. This kind of<br />
atmosphere is very widespread and<br />
has resulted in what many consider<br />
incongruent policy responses. Today,<br />
most politicians have set their<br />
eyes on 2019 elections without considering<br />
where the country might be<br />
at that time, given the wildly blazing<br />
fire of insecurity and discontent.It is<br />
hard to fight poverty when interests<br />
and attention are so far away from<br />
the challenge of poverty.<br />
Even the youth, however defined,<br />
have joined the fray of blurred<br />
visionaries by seeing only the opportunity<br />
to rule Nigeria rather than<br />
to create solutions to its many problems,<br />
one of which is the absence of<br />
values among the people, including<br />
the youth. It is now the opinion that<br />
the youth have become even more<br />
insensitive to the needs of the na-<br />
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Send 800word comments to comment@businessdayonline.com<br />
tion than their faltering elders, by<br />
focusing on how to get themselves<br />
into the driving seat of our corruption<br />
called governance, than<br />
seeking how to save the country<br />
from same. What will save Nigeria<br />
is not that young men will take over<br />
from elders but the institutions and<br />
structures that will spew out evil<br />
men from leadership. That is what<br />
we need. The recent campaign for<br />
a reduction of age limits for occupying<br />
top political leadership<br />
positions begs the question. It is a<br />
misplacement of priorities. It gives<br />
the impression that what is wrong<br />
with Nigeria is the age of those<br />
ruling it. Obviously, that would be<br />
a wrong analysis of the challenges<br />
that confront a federation that woke<br />
up one day and discovered that<br />
the regions had been castrated,<br />
dispossessed and handed over to<br />
the central government as vassals.<br />
There is need for a complete<br />
review of the challenges facing Nigeria,<br />
including poverty. Currently,<br />
the microfinance solution has lost<br />
traction, largely for no fault of its<br />
promoters. Although they operate<br />
in different markets, there are<br />
still some commonalities between<br />
microfinance and deposit money<br />
banks. They both need economically<br />
active people, poor or rich, to<br />
serve. It is not realistic therefore to<br />
expect that microfinance banks will<br />
function in places where deposit<br />
money banks avoid, for security<br />
reasons. Such places are increasing<br />
in number and dimension.<br />
The president was quoted recently<br />
as saying:“My government<br />
is working hard to reduce the unemployment<br />
rates through several<br />
programmes and initiatives including<br />
the N-power, agriculture, small<br />
and medium scale businesses, all<br />
of which are supported by government<br />
guaranteed loan scheme.<br />
I encourage you all to key into<br />
any of them for national growth<br />
and development.” Those words<br />
reflect the good intensions of the<br />
president to minimize the hardship<br />
that has become emblematic of life<br />
in Nigeria, not just among the poor<br />
but in more than one way attending<br />
to most people. But even the president<br />
knows that good intensions<br />
will not do. Hand-out type policies<br />
can only fill a gap. Real solutions<br />
are structural and self-propelling<br />
and often viral in effect. The growth<br />
of jobs in a construction site marrow<br />
the growth of a virus. That’s the<br />
need of the times.<br />
The challenge of poverty in<br />
Nigeria has gone beyond handouts<br />
and on-lending facilities.<br />
The root causes of poverty have<br />
become bigger than the problem<br />
of poverty. There is an urgent need<br />
to ask certain questions, which we<br />
have signally avoided. What kind<br />
of businesses are Nigeria’s poor<br />
doing currently into which they<br />
would invest the guaranteed loans?<br />
Is capital the most important problem<br />
facing the economically active<br />
poor people of Nigeria? Given capital,<br />
would they be able to sustain<br />
themselves in view of the security<br />
and infrastructural deficits? Poverty<br />
is complex and its antidotes<br />
need to be even more complex.<br />
Send reactions to:<br />
comment@businessdayonline.com<br />
FRANCIS EWHERIDO<br />
Ewherido, the Managing Director of Titan Insurance<br />
Brokers Limited, wrote from Lagos.<br />
One of the biggest challenges<br />
we have with deepening<br />
insurance penetration in<br />
Nigeria is the near absence<br />
of insurance culture. The insurance<br />
culture is either not there or not entrenched.<br />
We do not see insurance as a<br />
way of life that it is. But we live in a very<br />
uncertain socioeconomic and political<br />
clime, which makes insurances even<br />
more imperative. Insurance is life and<br />
ordinarily you cannot avoid insurance<br />
anymore than you can avoid living.<br />
But there are some classes of insurance<br />
that are even more important<br />
to life, especially lives of third parties.<br />
Consequently, government has made<br />
these classes of insurance compulsory.<br />
Perhaps we can start entrenching the<br />
insurance culture in Nigeria by strict<br />
enforcement of compulsory insurances.<br />
Ordinarily, you want people<br />
to take insurance out of conviction<br />
and on their own volition, but if third<br />
parties are involved and some classes<br />
of insurance have been made compulsory<br />
to protect them, then they should<br />
be enforced.<br />
Compulsory insurances are about<br />
third parties, who might die, suffer<br />
bodily injuries or property damage as a<br />
result of actions, inactions, negligence<br />
or carelessness of the insured. The insured,<br />
on his own, might not have the<br />
resources to indemnify (compensate)<br />
the affected third parties in the event<br />
of an incident likely to lead to legal liabilities,<br />
so these insurances are made<br />
Deepening insurance penetration with compulsory insurances<br />
compulsory to ensure that affected<br />
third parties get compensation.<br />
The commonest of these classes<br />
of insurance is Motor (Third Party)<br />
Insurance. This insurance protects<br />
the insured against third party legal<br />
liabilities for death, bodily injuries<br />
and property damage whilst using his<br />
vehicle on the road. There is no limit of<br />
liability for third party death and bodily<br />
injuries because life is invaluable,<br />
but underwriters (insurance companies)<br />
have parameters for calculating<br />
the benefits. Relatives of a deceased<br />
third party, who earned N1m per<br />
annum, for instance, cannot get the<br />
same compensation as relatives of a<br />
third party, who earned N12m per<br />
annum, in the event of death. The<br />
limit of liability for third party property<br />
damage is N1m, but an insured can<br />
increase the limit with payment of<br />
additional premium.<br />
Motor (Third Party) Insurance<br />
premium is N5,000 for private vehicles<br />
and N7,500 for commercial<br />
vehicles. These sums should be within<br />
the reach of every vehicle owner. Unfortunately,<br />
it is alleged that only one<br />
in every eight motor insurance certificates<br />
in Nigeria is genuine. There<br />
were about 11.5 million vehicles on<br />
Nigerian roads as at 2017, according<br />
to the Federal Road Safety Commission.<br />
This means that if all motorists<br />
were to get genuine motor insurance,<br />
about 10 million additional Nigerians<br />
will automatically have genuine motor<br />
insurance and be added to the<br />
insuring pool. This automatically<br />
deepens insurance penetration.<br />
Beyond frustrating efforts to<br />
deepen insurance penetration and<br />
revenue losses to government and the<br />
insurance industry, fake motor insurances<br />
defeat the purpose of compulsory<br />
Motor (Third Party) Insurance<br />
because third parties who die, suffer<br />
bodily injuries or property damage<br />
might not get compensation from the<br />
liable motorist because he does not<br />
have genuine insurance. To ensure that<br />
your motor insurance is genuine, please<br />
go the Nigerian Insurance Industry<br />
Database (NIID), enter your insurance<br />
policy number or vehicle registration<br />
to verify your motor insurance status.<br />
The second class of compulsory<br />
insurance is Professional Indemnity Insurance.<br />
Professional Indemnity Insurance<br />
(PII) is a form of liability insurance<br />
that helps protect a wide range of professionals<br />
and companies from bearing the<br />
full cost of defending themselves against<br />
a tort claim made by a client and damages<br />
awarded in such a civil lawsuit in<br />
the conduct their business. Usually,<br />
professional indemnity is compulsory<br />
for doctors and medical practitioners,<br />
medical establishments, insurance<br />
brokers, lawyers, chartered accountants<br />
and some other professionals, but many<br />
of these professionals do not have this<br />
compulsory insurance thereby reducing<br />
insurance penetration.<br />
In addition, Section 45 of the National<br />
Health Insurance Scheme Act of<br />
1999 specifically requires all medical<br />
professionals, institutions and centres<br />
to have in place Professional Indemnity<br />
Insurance. The law makes provisions<br />
for compensation for the NHIS patients<br />
who suffer death, sickness, permanent<br />
disability, partial disability and injury<br />
from mistakes, negligence, errors<br />
of commission or omission of insured<br />
medical practitioners and institutions.<br />
Many medical personnel and establishment<br />
do not have this all-important<br />
compulsory insurance. And they get<br />
away with it because their patients<br />
have not held them accountable and<br />
nobody has made strenuous attempts<br />
to enforce it.<br />
The third of the compulsory insurances<br />
is Occupiers’ Liability Insurance.<br />
Section 65 of the Insurance Act of 2003<br />
requires the owners or occupiers of every<br />
public building to be insured against<br />
liability for loss or damage to property of<br />
third parties, and death or bodily injury<br />
to third parties caused by collapse, fire,<br />
earthquake, storm or flood. The Act<br />
defines a public building as one to<br />
which members of the public have<br />
access for educational, recreational,<br />
medical and commercial purposes.<br />
You can imagine the level of insurance<br />
penetration if all government buildings<br />
at the three levels of government,<br />
shops, malls, restaurants, offices and<br />
other buildings where members of<br />
the public have access were to take an<br />
Occupiers’ Liability Insurance. Beyond<br />
the penetration, so much wealth and<br />
so many jobs will be created.<br />
The fourth compulsory insurance<br />
is Insurance of Buildings Under Construction.<br />
The Insurance Act of 2003,<br />
Section 64, requires every owner or<br />
contractor of any building under construction<br />
with more than two floors to<br />
take out an insurance policy to cover<br />
his liability arising from construction<br />
risks such as his negligence or that of<br />
his servants, agents or consultants,<br />
which may result in death, bodily<br />
injury or property damage of workers<br />
on site or members of the public.<br />
This insurance policy also covers liability<br />
for collapse of buildings under<br />
construction. A census of buildings<br />
of three floors and above under construction<br />
has shown that many owners<br />
and contractors of these buildings<br />
do not comply with this compulsory<br />
insurance. Meanwhile, some of such<br />
buildings have collapsed over time<br />
and third parties who suffered bodily<br />
injuries and families of those who lost<br />
their lives had minimal or no compensation.<br />
Enforcement this compulsory<br />
insurance will certainly deepen insurance<br />
penetration.<br />
The fifth compulsory insurance<br />
is the Group Life Insurance for company<br />
employees. Group Life Insurance<br />
gained traction since the PENCOM Act<br />
of 2004 as amended in 2014 made it<br />
compulsory for employers of labour in<br />
the private and public sector to provide<br />
a group life cover for their staff. Since<br />
then the number of companies with<br />
Group Life Insurance has quadrupled.<br />
Beyond being mandatory for companies<br />
under the PENCOM Act, you cannot<br />
bid for government businesses and<br />
those of some big companies without a<br />
Group Life Policy for your employees.<br />
This has really helped in deepening<br />
insurance penetration and growing<br />
the insurance industry in terms of<br />
premium income and creation of employment.<br />
It has also helped to drive<br />
the argument that other compulsory<br />
insurances will also gain traction if<br />
there are government policies to compel<br />
potential policy holders to have<br />
these compulsory insurances. But<br />
there is still a long way to go for even<br />
group life insurance because many<br />
companies still do not have Group Life<br />
Policy for their employees.<br />
Finally, though no longer under<br />
the purview of insurance companies,<br />
is the Employers Liability Insurance.<br />
Employers Liability Insurance, as<br />
stated by the Employee Compensation<br />
Act of 2010 (which repealed<br />
the Workmen Compensation Act<br />
of 1987), requires every employer,<br />
within the first two years of the commencement<br />
of the 2010 Act, to make<br />
a minimum monthly contribution of<br />
1% of the total monthly payroll of employees<br />
to the Employee Compensation<br />
Fund. The fund is designated<br />
to pay adequate compensation to<br />
employees or their dependants for<br />
any death, injury, disease or disability<br />
arising out of or in the course<br />
of their employment. The Nigeria<br />
Social Insurance Trust Fund (NSITF)<br />
is saddled with the power to implement<br />
this act.<br />
Note: the rest of this article<br />
continues in the online edition of<br />
Business Day @https://businessdayonline.com/<br />
Send reactions to:<br />
comment@businessdayonline.com
Wednesday <strong>28</strong> <strong>Feb</strong>ruary <strong>2018</strong><br />
COMMENT<br />
JOSHUA NWACHUKWU<br />
Joshua B. Nwachukwu is a lawyer<br />
and a writer<br />
From “Sai Buhari” in 2015 to “Kai<br />
Buhari” <strong>2018</strong><br />
Three years into his presidency,<br />
the goodwill that<br />
accompanied President<br />
Buhari and his party has<br />
almost been extinguished.<br />
Many of his supporters who put<br />
everything out including their “credibility”<br />
to campaign for him are now<br />
reneging and recanting. These former<br />
supporters – Obasanjo, Mrs. Aisha<br />
M. Buhari, Fr. Ejike Mbaka, Pastor<br />
Tunde Bakare, Wole Soyinka, Dele<br />
Momodu, Oby Ezekwesili – have become<br />
the opposition. They are more<br />
potent than the PDP and they have<br />
given the President’s performance<br />
low ratings. Dele Momodu captured<br />
the sentiments of ex-Buharists well<br />
when he said, “it is indeed shameful<br />
that those like me who supported you<br />
so vociferously have become butts of<br />
jokes everywhere we go”.<br />
The issues against the President<br />
range from growing high unemployment,<br />
disrespect for the rule of the<br />
law, incompetence, cluelessness of<br />
his appointees, nepotism, fuel crisis,<br />
proliferation of weapons, lack of an<br />
economic roadmap, infidelity to<br />
campaign promises and most importantly,<br />
the incessant loss of lives with<br />
no remedy in sight. Many, including<br />
the Governors’ of Benue, Zamfara and<br />
Taraba, have accused the President of<br />
complacency in defending the lives<br />
and property of Nigerians. He and<br />
C002D5556<br />
BUSINESS DAY 11<br />
comment is free<br />
Send 800word comments to comment@businessdayonline.com<br />
Why can’t the National Assembly impeach President Buhari?<br />
the relevant security agencies have<br />
been complicit in the herdsmenfarmers<br />
crisis.<br />
His inactions have made many<br />
Nigerians accuse him of being inhumane<br />
to and unperturbed by the<br />
plights of Nigerians. In response,<br />
his cohorts made a documentary<br />
called the “Human side of President<br />
Muhammadu Buhari”. When former<br />
President Obasanjo joined his voice<br />
with Nigerians to criticize Buhari’s<br />
underachievement (except for tackling<br />
Boko Haram), the Presidents’<br />
cohort asked us to tune in to different<br />
TV and radio programmes to<br />
know the “giant strides of President<br />
Buhari as well as the positive impact<br />
he has made in the lives of Nigerians”.<br />
If President Buhari has a “human<br />
side” and has made “giant strides”,<br />
we should be feeling it daily; there is<br />
no need for documentaries.<br />
The idea of documentaries, TV<br />
and radio programmes take us back<br />
to Buhari’s 2015 campaign. These<br />
were the same tools used to sell us<br />
the story that President Buhari was<br />
a “converted democrat” and an<br />
“advocate of one Nigeria”. During<br />
his campaign, he visited almost all<br />
the states in the country including<br />
Benue. In each state he visited, to<br />
show solidarity, he appeared in their<br />
traditional attire. Since he won the<br />
election, all these theatricals have<br />
been dumped. He has been to Ebonyi<br />
and Anambra, for personal and party<br />
ambitions, but too busy to visit Benue<br />
despite its turbulent situation. He<br />
has clearly shown his preferences.<br />
These are nonverbal signs that Nigerians<br />
read, and conclude that the<br />
President’s concern are regional not<br />
federal. This is sad but an eye-opener<br />
for the future.<br />
In 2014, I didn’t buy into the<br />
Buhari change tale, not because of<br />
any religious or ethnic stereotype. I<br />
didn’t see a concrete plan from APC<br />
The issues against<br />
the President range<br />
from growing high<br />
unemployment, disrespect<br />
for the rule of the law,<br />
incompetence, cluelessness<br />
of his appointees,<br />
nepotism, fuel crisis,<br />
proliferation of weapons,<br />
lack of an economic<br />
roadmap, infidelity to<br />
campaign promises and<br />
most importantly, the<br />
incessant loss of lives with<br />
no remedy in sight<br />
to address all the bells and whistles it<br />
promised. Neither of the major contestants<br />
addressed issues intellectually<br />
and systematically –it was, to paraphrase<br />
Davido, a 30 billion contest.<br />
The campaign rode on sentiments and<br />
propaganda. When the opportunity to<br />
debate came, President Buhari refused<br />
to participate. As President Jonathan<br />
rightly said, “propaganda may help<br />
you win elections, but can’t help you<br />
govern and, that is what APC has seen<br />
in the last 32 months”.<br />
Prior to the elections in 2015, I<br />
and my friends struggled to identify<br />
the qualities that qualified President<br />
Buhari for leadership. (Several times<br />
this year, Facebook has shared these<br />
thoughts as memories.) President Buhari<br />
had only three cards on the table:<br />
his integrity, the anti-corruption fight<br />
and the war against Boko Haram. Despite<br />
his past stints as military Governor<br />
and head of state, reference wasn’t<br />
made to any economic achievement.<br />
Even after his sojourn as a military<br />
ruler and prior to contesting for the<br />
Presidency as a civilian, he didn’t<br />
show acts of leadership.<br />
Leadership is about service and<br />
improving the lots of mankind. As an<br />
elder statesman he could have used<br />
his reputation for integrity to fight corruption,<br />
raise funds to tackle poverty,<br />
polio, high maternal mortality, Islamic<br />
extremism and illiteracy. Unfortunately,<br />
none of this happened. He<br />
wasn’t even entrepreneurial, he did<br />
not even venture into any economic<br />
enterprise of considerable value and<br />
impact. Without these experiences,<br />
what exactly then qualified him for<br />
the kind of leadership that Nigeria<br />
required? All that while he was merely<br />
concerned about clinching the presidency.<br />
And now that he wields it he<br />
cannot seem to use it. A friend once<br />
said, those who expect to find power<br />
to make others do things in higher<br />
levels of the structure soon find it, but<br />
it does not last.<br />
I remember telling those that<br />
cared to listen, that personal integrity<br />
and zeal to fight corruption though<br />
good, weren’t the most important<br />
tools for leadership and this current<br />
administration has proven me right.<br />
The lack of leadership has clearly<br />
shown itself in the past three years.<br />
My theory has always been that<br />
Buhari has never been the man in<br />
charge. In his military era, Tunde<br />
Idiagbon was considered the de<br />
facto head of State. Even during the<br />
2014/2015 campaign, he wasn’t in<br />
charge; if he was he would have lost<br />
woefully. Now as president, he isn’t<br />
in charge as those in charge of the<br />
presidency outsmarted those who ran<br />
his campaign. The President has been<br />
“ponderous” since he took the oath<br />
of office. He makes demands from<br />
the judiciary and the legislature but<br />
drags his feet when executive action<br />
is required. Sluggish and somnolent<br />
responses have slowed down the<br />
country’s progress. The infighting<br />
among his appointees, his indecision<br />
to resolve current insecurity challenges<br />
and the unwillingness to fight<br />
corruption in his administration, are<br />
a few examples of executive sloth. I<br />
agree with Prof. Wole Soyinka who<br />
said the President is under a trance<br />
and needs to wake up.<br />
In civilized democracies where<br />
true democrats operate, leaders with<br />
integrity resign from office when<br />
they realize they are incapable of<br />
addressing pertinent issues. Where<br />
such leader refuses to step down the<br />
legislature can proffer a solution:<br />
impeachment. Members of the National<br />
Assembly, notably the likes of<br />
Dino Melaye, Sani Shehu, Senator Isa<br />
Misau, Ben Bruce, Kabir Marafa have<br />
all highlighted and complained at<br />
different times about the ineffectiveness<br />
of the present administration.<br />
Complaining is not the best they can<br />
offer. The 1999 Constitution under<br />
Section 143 empowers them. Why<br />
are they not invoking it? They claim to<br />
be fearless and ready to die but they<br />
can’t utilize the tool at their disposal.<br />
It isn’t hard to find the President guilty<br />
of gross misconduct; disobedience of<br />
court orders and legislative orders are<br />
examples. The appropriation of funds<br />
for subsidy without legislative permission<br />
is another.<br />
As Nigerians, I hope we have<br />
become wiser, despite the prequels<br />
of Buhari’s military era; we bought<br />
his conversion story and gave him an<br />
opportunity. Now we have seen his<br />
performance, and thanks to this opportunity,<br />
he wouldn’t have the honor<br />
of being called “The best President<br />
Nigeria never had”.<br />
Surely we do not need a sequel to<br />
this horror movie?<br />
Send reactions to:<br />
comment@businessdayonline.com<br />
PAUL PARKS<br />
Parks is of Carbon Limits Nigeria<br />
info@carbonlimitsngr.com<br />
The Nigeria Watch Project<br />
at the University of Ibadan<br />
reported that in 2017 more<br />
than 8600 people were<br />
killed in Nigeria from civil strife,<br />
criminal acts, resource-related<br />
conflicts, and other violent incidents.<br />
While this number is down<br />
substantially from the more than<br />
20,000 deaths at the height of the<br />
Boko Haram conflict in 2014, the<br />
level is more than twice as high than<br />
in the five years before 2010.<br />
This increase in violence is tied<br />
to a large degree to land use, natural<br />
resource development, and disruptions<br />
in traditional lifestyles. Where<br />
climate degradation and conflict<br />
were once seen primarily as a Niger<br />
Delta issue related to oil development,<br />
conflict has now become<br />
endemic in the North East with Boko<br />
Haram and in the North Central region<br />
between herders and farmers.<br />
While these various conflicts have<br />
diverse causes, climate change is a<br />
factor in all of them. Climate change<br />
is causing increasing temperatures<br />
leading to encroaching desertification,<br />
rising sea levels leading to<br />
coastal degradation, variability in<br />
weather patterns to stresses in the<br />
agricultural and livestock sector<br />
resulting in volatile food prices, and<br />
more frequent and violent storms.<br />
Climate change is a gradual and<br />
complex process, and the outbreak<br />
of violence is related to many factors<br />
beyond environment, but to quote<br />
the Norwegian researcher Halvard<br />
Nigeria: On the front line of climate change and conflict<br />
Buhring:<br />
…. take the notion of climate<br />
change as a “threat multiplier” seriously<br />
and investigate the conditions<br />
under which climatic changes may<br />
accentuate the threat to societal<br />
stability and peace, and the mechanisms<br />
through which a destabilizing<br />
effect might materialize.<br />
Nigeria is not alone in facing<br />
this challenge. For example, climate<br />
change affecting land use<br />
and herding occur in places as<br />
diverse as Bhutan in the Himalayas<br />
to Algeria in North Africa. In sub-<br />
Sahara Africa, climate change impacts<br />
traditional herding in Kenya,<br />
Namibia, and Uganda among others.<br />
Explaining why his children<br />
would not follow in his footsteps,<br />
one Algerian herder said: “It’s not<br />
like it was before. There isn’t rain.”<br />
A statement that rings equally true<br />
in Northern Nigeria.<br />
Research from institutions as<br />
diverse as University of Texas,<br />
Cambridge University, and Peace<br />
Research Institute in Oslo Norwaydemonstrate<br />
the links between<br />
climate change and conflict. This<br />
has led to serious consideration of<br />
ways to reduce these risks, which<br />
is increasingly discussed in international<br />
forums. In almost all<br />
the research, Africa is shown to be<br />
particularly vulnerable to conflict<br />
augmented climate change.<br />
Policy makers in Nigeria need to<br />
understand how climate change acts<br />
as a threat multiplier and to address<br />
this on a policy and operational<br />
manner. Maintaining stable livelihoods<br />
is a primary objective of any<br />
government, and changing climate<br />
is increasingly a determinant in this.<br />
Consider migration, as national<br />
resources are degraded and depleted<br />
by climate related factors, stable<br />
livelihoods are undermined leading<br />
to migration. While public attention<br />
has focused on herders or youth<br />
attempting to make the crossing to<br />
Europe, the far more numerous migration<br />
is from rural to urban areas.<br />
Rural dwellers are increasingly unable<br />
to support themselves and are<br />
forced to seek economic refuge in<br />
cities, which are often already overwhelmed<br />
in providing public services<br />
and employment.<br />
Considering environmental degradation,<br />
Lake Chad is a stark warning<br />
of what can happen. In the<br />
last thirty years the rainy season in<br />
Northern Nigeria has decreased by<br />
30 days and the Sahara has advanced<br />
southward by 1-10 km a year. Lake<br />
Chad once the largest fresh water<br />
lake in the country has now shrunk<br />
by at least two thirds. Indeed, in<br />
Nigeria what remains of Lake Chad<br />
is basically swamps and wetlands.<br />
The Lake’s disappearance along with<br />
the tripling of the Basin’s population<br />
since the 1980s has led to massive<br />
food insecurity for more than 2 million<br />
people in Northern Nigeria and<br />
widespread extreme poverty. This<br />
poverty, economic fragility, drought<br />
and environmental degradation has<br />
provided a fertile ground for nonstate<br />
armed groups such as Boko<br />
Haram to contest state authority<br />
across the region.<br />
In the international climate<br />
negotiations, the response to these<br />
climate impactsis referred to as<br />
adaptation. The Paris Climate<br />
Accord, signed by 174 countries,<br />
recognizes that climate change is<br />
happening and that adaptation<br />
measures are urgently needed.<br />
Nigeria has signed and ratified this<br />
accord, and submitted to the UN<br />
its first national climate strategy, a<br />
large part of which addresses adaptation.<br />
Indeed, Nigeria has worked<br />
diligently to be a strong partner in<br />
the Paris Accord.<br />
Lake Chad is never going to be<br />
the lake it once was, yet even in its<br />
reduced state it provides livelihood<br />
to two million and food security<br />
to thirteen million people. The<br />
World Bank working with Nigeria<br />
and the other affected countries has<br />
developed a comprehensive plan to<br />
improve the lives of the people who<br />
depend on the lake. The plan looks<br />
at improving management of the<br />
remaining fisheries and agricultural<br />
production, better land and water<br />
rights, better logistics, renewable<br />
energy, improved education and<br />
health of the people. The plan does<br />
NOT try to refill the lake, instead<br />
it takes what exists and works to<br />
improve the lives on the people<br />
who now, and in the future, will<br />
depend on it.<br />
This adaptation approach needs<br />
to be applied to other climate challenges.<br />
The current crisis over the<br />
migrations of the herders needs to<br />
take into account that farmers too<br />
are suffering from climate change.<br />
Variability of rainfall in the Plateau<br />
States has increased by 20% putting<br />
pressure on famers lifestyles.<br />
Given the inexorable, albeit not fully<br />
predicable, increased aridity and<br />
desertification; the stress on both<br />
herders and farmers will only get<br />
worse in the future.<br />
For adaptation to be successful,<br />
greater public discussion about<br />
active involvement across all stakeholders<br />
is urgently needed. Climate<br />
change is with us, and the stress on<br />
Nigeria will only increase. To be<br />
successful, adaptation measures<br />
requires well developed, long-term<br />
plans that address the complexities<br />
of the issue, including the reduction<br />
of violence. These plans will take<br />
years and much money to implement,<br />
and require the long-term<br />
commitment of the government.<br />
It is encouraging to see the Governor<br />
of Kebbi state speaking out<br />
on this. Public dialogue needs to<br />
expand to all levels of government<br />
and citizens and lead to actions. Far<br />
too many Nigerians live on the very<br />
edge of economic survival and are<br />
the ones must vulnerable to climate<br />
impacts and susceptible to the allure<br />
of violence. Nigeria needs to<br />
move forward quickly and decisively<br />
on addressing climate change in<br />
very tangible ways.<br />
Send reactions to:<br />
comment@businessdayonline.com
Wednesday <strong>28</strong> <strong>Feb</strong>ruary <strong>2018</strong><br />
12 BUSINESS DAY<br />
C002D5556<br />
EDITORIAL<br />
PUBLISHER/CEO<br />
Frank Aigbogun<br />
EDITOR-IN-CHIEF<br />
Prof. Onwuchekwa Jemie<br />
EDITOR<br />
Anthony Osae-Brown<br />
DEPUTY EDITORS<br />
John Osadolor, Abuja<br />
Bill Okonedo<br />
NEWS EDITOR<br />
Patrick Atuanya<br />
EXECUTIVE DIRECTOR,<br />
SALES AND MARKETING<br />
Kola Garuba<br />
EXECUTIVE DIRECTOR, OPERATIONS<br />
Fabian Akagha<br />
EXECUTIVE DIRECTOR, DIGITAL SERVICES<br />
Oghenevwoke Ighure<br />
ADVERT MANAGER<br />
Adeola Ajewole<br />
MANAGER, SYSTEMS & CONTROL<br />
Emeka Ifeanyi<br />
HEAD OF SALES, CONFERENCES<br />
Rerhe Idonije<br />
SUBSCRIPTIONS MANAGER<br />
Patrick Ijegbai<br />
CIRCULATION MANAGER<br />
John Okpaire<br />
GM, BUSINESS DEVELOPMENT (North)<br />
Bashir Ibrahim Hassan<br />
GM, BUSINESS DEVELOPMENT (South)<br />
Ignatius Chukwu<br />
HEAD, HUMAN RESOURCES<br />
Adeola Obisesan<br />
EDITORIAL ADVISORY BOARD<br />
Dick Kramer - Chairman<br />
Imo Itsueli<br />
Mohammed Hayatudeen<br />
Albert Alos<br />
Funke Osibodu<br />
Afolabi Oladele<br />
Dayo Lawuyi<br />
Vincent Maduka<br />
Wole Obayomi<br />
Maneesh Garg<br />
Keith Richards<br />
Opeyemi Agbaje<br />
Amina Oyagbola<br />
Bolanle Onagoruwa<br />
Fola Laoye<br />
Chuka Mordi<br />
Sim Shagaya<br />
Mezuo Nwuneli<br />
Emeka Emuwa<br />
Charles Anudu<br />
Tunji Adegbesan<br />
Eyo Ekpo<br />
Dapchi girls’ abduction<br />
Last week, over<br />
100 girls from<br />
the Government<br />
Girls Science<br />
and Technical<br />
College, Dapchi, Yobe<br />
state were again abducted<br />
by members of the Boko<br />
Haram terrorist organisation.<br />
Media reports<br />
have it that the terrorists,<br />
armed with sophisticated<br />
weapons, invaded Dapchi<br />
unleashing terror on<br />
residents before making<br />
for the college where they<br />
stole food items and kidnapped<br />
the girls. This is<br />
coming exactly four years<br />
after the terrorist sect<br />
invaded and murdered<br />
scores of male students of<br />
the Government Secondary<br />
School, Buni Yadi, still<br />
in Yobe state.<br />
The Dapchi abduction<br />
mirrors that of Chibok,<br />
Borno state, also over four<br />
years ago where over 276<br />
girls were kidnapped from<br />
their school by the terrorists.<br />
While some of the<br />
girls managed to escape<br />
their captors, 100 or so of<br />
them have only recently<br />
been freed in exchange for<br />
Boko Haram militants, in<br />
negotiations brokered by<br />
the International Committee<br />
of the Red Cross.<br />
Currently, over 100 of the<br />
abducted girls are still being<br />
held in captivity despite<br />
repeated promises by the<br />
government to secure their<br />
release.<br />
Sadly, like it happened in<br />
Chibok, the security operatives<br />
stationed in the town<br />
were said to have left the<br />
area shortly before the terrorists<br />
invaded the school<br />
and made away with the<br />
girls. Instead of providing<br />
explanations as to how the<br />
terrorists, whom the government<br />
and the army claimed<br />
to have defeated, were able<br />
to drive unchallenged for<br />
tens or even hundreds of kilometres<br />
with hilux and big<br />
trucks to abduct innocent<br />
schoolgirls and then vanish,<br />
the state government<br />
and the leadership of the<br />
army were more preoccupied<br />
with feeding Nigerians<br />
false information. First, they<br />
insisted that no girl was<br />
missing only for them to<br />
later claim that the Nigerian<br />
military had rescued over 50<br />
of the abducted schoolgirls.<br />
The state government was<br />
however forced to retract<br />
that statement the next day<br />
clarifying that no rescue<br />
has been made. Then came<br />
the unhelpful comments by<br />
the minister of information,<br />
Lai Mohammed, alleging<br />
that the terrorists carried<br />
out the attack to embarrass<br />
the Buhari administration.<br />
He basically sought to cast<br />
the president as the real<br />
victim of the attack rather<br />
than the abducted girls and<br />
their helpless parents and<br />
relatives.<br />
We are still in shock that<br />
the government could allow<br />
this to happen. It was<br />
well aware of the tactics of<br />
the terrorists and could not<br />
claim to be caught off-guard<br />
by the Dapchi abduction like<br />
the Jonathan government<br />
claimed with the Chibok<br />
abduction. The fall-out from<br />
the Chibok kidnapping and<br />
the unusual focus on young<br />
girls and women by the<br />
terrorist sect, the government<br />
should never have left<br />
schools (especially girls’<br />
schools) unsecured and unguarded.<br />
Besides, the government<br />
must explain how a<br />
defeated sect could carry out<br />
such a high profile abduction<br />
driving across hundreds<br />
of kilometres to abduct and<br />
disappear with the schoolgirls<br />
without any trace? The<br />
government, of all people,<br />
should have known that<br />
after paying huge sums of<br />
money in ransoms to secure<br />
the release of some of the<br />
Chibok girls and university<br />
lecturers and policewomen<br />
kidnapped by the sect, the<br />
sect will naturally be seeking<br />
to kidnap more girls to<br />
bolster their revenues.<br />
We urge the government<br />
to greatly improve its security<br />
strategy to be able to<br />
prevent such needless embarrassments<br />
in the future.<br />
Besides, it needs to overhaul<br />
its information management<br />
mechanism to avoid<br />
the many claims and counter<br />
claims emanating from<br />
its agencies with regards to<br />
a particular event. This only<br />
leads to confusion.<br />
The government must also<br />
ensure that it prioritises the<br />
immediate rescue of the abducted<br />
girls and not let the<br />
issue drag on for too long<br />
like that of the Chibok girls.<br />
Finally, we urge the government<br />
to make a stronger commitment<br />
to not just containing<br />
the sect, but obliterating them<br />
entirely. The penchant by the<br />
government to declare victory<br />
at every turn while the sect<br />
continues to grow stronger<br />
does not inspire confidence<br />
that the government is capable<br />
of tackling the sect.<br />
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www.businessdayonline.com
Wednesday <strong>28</strong> <strong>Feb</strong>ruary <strong>2018</strong><br />
COMPANIES<br />
& MARKETS<br />
Company news analysis and insight<br />
BUSINESS<br />
DAY<br />
13<br />
Banks credit to private<br />
sector to grow in <strong>2018</strong>- FSDH<br />
Pg. 14<br />
Consolidated Hallmark Insurance sustains<br />
investor confidence despite market lull<br />
Modestus Anaesoronye<br />
Following the recent<br />
removal of the price<br />
cap by the Nigerian<br />
Stock Exchange<br />
(NSE), and the consequent<br />
fall in the share price<br />
of some stocks, especially in<br />
the Insurance industry, it is<br />
expected that some shareholders<br />
may begin to dump<br />
their shares for fear of losing<br />
value; but this has not been<br />
so for Consolidated Hallmark<br />
Insurance (CHI) Plc.<br />
The reason is not farfetched.<br />
The company has<br />
demonstrated consistent ability<br />
to deliver returns to its<br />
shareholders over the years,<br />
and an analysis of its financials<br />
shows strong positive<br />
fundamentals.<br />
Majority of the shareholders<br />
of company, have therefore<br />
continued to hold on<br />
tightly to their stocks, not<br />
willing to sell, while others are<br />
beginning to take positions<br />
now that the cap has been<br />
lifted, thereby providing more<br />
liquidity for the stocks.<br />
The confidence of CHI’s<br />
shareholders in the company’s<br />
performance was<br />
further reaffirmed during<br />
the first phase of its capital<br />
raising exercise, in which<br />
it offered N500million in<br />
the form of one new share<br />
for every six held by its existing<br />
shareholders in a<br />
1,000,000,000 unit’s rights<br />
issue, which was oversubscribed.<br />
An analysis of the<br />
deals on the trading floor of<br />
the Nigerian Stock Exchange<br />
in the past few weeks indicates<br />
improved activities on<br />
the stock of the company,<br />
with increasing transaction<br />
volumes, but only 32 million<br />
units (a paltry 1%), out of the<br />
7billion shares outstanding<br />
have been made available<br />
for purchase on the floor of<br />
the Exchange, showing a low<br />
unwillingness by investors to<br />
sell off their stock.<br />
A quick glance at the company’s<br />
fundamentals, show<br />
why investors may want to<br />
hold on to CHI stocks, or why<br />
new investors may want to<br />
take position.<br />
Firstly, the company is<br />
trading at a 12-month price<br />
to earnings (PE) ratio of 8.9X,<br />
price to book ratio of 0.39x and<br />
a dividend yield of 6.9 percent.<br />
In addition, the company’s<br />
9-month financials as at 2017<br />
shows a profitable insurance<br />
business, with an underwriting<br />
profit of N836million and<br />
Eddie Efekoha, managing director, CHI Plc<br />
retained earnings of N114million.<br />
The company has also<br />
grown its total assets value to<br />
N8.14 billion from N4.6 billion<br />
in 2007.CHI is one of the few<br />
insurance businesses that<br />
delivers value to its sharehold-<br />
ers in the Nigerian insurance<br />
market.<br />
Commenting on the recent<br />
developments at the<br />
NSE, Eddie Efekoha, managing<br />
director/CEO of the company<br />
who is also the Chairman<br />
of the Nigerian Insurers<br />
Association, expressed confidence<br />
that discerning investors<br />
would rather scramble<br />
to take position on the stock,<br />
at a bargain price now rather<br />
than sell their valuable stock<br />
that has consistently made<br />
returns for them via growth in<br />
assets and dividend payments<br />
over the years. He said the intrinsic<br />
book value of the stock<br />
is presently over 70 kobo, and<br />
with its current liquidity levels<br />
in the market, more market<br />
players are now gearing up to<br />
take position while expecting<br />
an upside in price especially<br />
against the backdrop of the<br />
expected 2017 Year End Financials.<br />
Efekoha therefore assured<br />
shareholders of the<br />
company to expect more<br />
returns in the nearest future<br />
as recent capacity expansion<br />
and growth initiatives<br />
such as the establishment of<br />
new subsidiaries such as its<br />
Health Management Organisation<br />
(HMO), to focus on<br />
identified growth markets,<br />
launching of a revamped<br />
website with retail customer<br />
and broker interphase, reinvigoration<br />
of the retail<br />
network and deployment of<br />
latest technology will help to<br />
further grow revenue.<br />
Efekoha explained further<br />
that strategies have been put<br />
in place to improve on the<br />
bottom line through costcutting<br />
initiatives in management<br />
expenses.<br />
Consolidated Hallmark<br />
Insurance (CHI Plc) has consistently<br />
grown revenue since<br />
the 2007 merger of three legacy<br />
companies – from N1.506<br />
billion in 2007 to N5billion<br />
and has paid dividends to<br />
shareholders 7 out of 10 years<br />
post-merger.<br />
The company is known<br />
for very high professional and<br />
ethical standards, with excellent<br />
customer service and<br />
prompt claims settlement as<br />
its key selling points. Claims<br />
incurred rose from N197 million<br />
during the 2007 Financial<br />
Year to N1.185 billion for the<br />
nine months ended September,<br />
2017 an attestation that<br />
the company is “a financial<br />
institution with satisfactory<br />
financial condition and adequate<br />
capacity to meet its<br />
obligations as and when they<br />
fall due“, as stated by foremost<br />
rating agency Agusto & Company,<br />
during its rating of the<br />
company in 2016.<br />
Low investor response: SEC moves to<br />
extend free e-dividend registration<br />
Naira in UK pre-approved currencies will<br />
enhance financial position of SMEs<br />
Strong indications<br />
emerged on Monday<br />
that the Securities<br />
and Exchange Commission<br />
(SEC) would likely<br />
extend its free e-dividend<br />
registration for the third time.<br />
This is due to low investor<br />
response as the <strong>Feb</strong>. <strong>28</strong><br />
deadline draws close.<br />
A source who pleaded<br />
anonymity told the News<br />
Agency of the Nigeria (NAN)<br />
in Lagos that the commission<br />
would likely extend the free<br />
registration deadline to give<br />
room for enrolment of more<br />
investors.<br />
The source said that all<br />
indication points to extension<br />
due to low response of investors<br />
going by the available<br />
statistics.<br />
NAN reports that e-<br />
dividend simply refers to<br />
an online system of paying<br />
dividends to investors<br />
when companies declare<br />
dividends.<br />
The dividends, which are<br />
the profits meant for investors,<br />
are wired to the investor’s<br />
bank account, instead of<br />
sending it by post as was the<br />
old practice.<br />
The advantage of the e-<br />
dividend is not only to enable<br />
investors collect subsequent<br />
dividends electronically but<br />
it allows all accrued dividends<br />
to be credited to investors’<br />
bank accounts.<br />
This will stem the rising<br />
unclaimed dividends in the<br />
capital market.<br />
The source said that<br />
the free registration may be<br />
extended for about three<br />
months, noting that the decision<br />
underscores SEC’s<br />
strong focus on market development<br />
and enhancement of<br />
investor confidence.<br />
NAN reports that SEC<br />
in June 2017, extended the<br />
underwriting cost of investors’<br />
e-dividend registration<br />
to Dec. 31, 2017, against the<br />
earlier underwriting deadline<br />
of June 30, 2017.<br />
It also on Jan. 18, extended<br />
the period for the free e-<br />
dividend registration to <strong>Feb</strong>.<br />
<strong>28</strong>, <strong>2018</strong>, to encourage more<br />
shareholders participation in<br />
the initiative.<br />
SEC said in a statement<br />
that the extension became<br />
necessary to encourage more<br />
shareholders mandate their<br />
bank accounts.<br />
The statement said that<br />
in reviewing the progress<br />
of the e-dividend registration<br />
after the Dec. 31, 2017<br />
deadline, there was still a<br />
great influx of shareholders<br />
desirous of mandating their<br />
bank accounts for payment<br />
of dividends electronically.<br />
“In light of the foregoing,<br />
the SEC, as part of its developmental<br />
role, has extended<br />
the period for the free e-<br />
dividend registration till <strong>Feb</strong>.<br />
<strong>28</strong>, <strong>2018</strong>, to encourage more<br />
shareholders mandate their<br />
bank accounts.<br />
Accordingly, shareholders<br />
that are yet to register<br />
should continue to approach<br />
their banks or registrars<br />
to mandate their bank<br />
accounts for the collection<br />
of their dividends electronically,<br />
including unclaimed<br />
dividends, not exceeding 12<br />
years of issue.<br />
NAN recalls that the SEC<br />
had announced that the e-<br />
dividend registration would<br />
continue seamlessly in spite<br />
of the expiration of the initial<br />
Dec. 31, 2017 free registration<br />
deadline.<br />
The UK Export Finance<br />
Agency preapproved<br />
status for<br />
the naira as a medium<br />
of exchange will enhance<br />
the financial position of small<br />
and medium enterprises, a<br />
financial expert has said.<br />
Uche Uwaleke, the Head<br />
of Banking and Finance Department,<br />
Nasarawa State<br />
University Keffi, expressed<br />
the view in an interview<br />
with the News Agency of<br />
Nigeria (NAN) in Abuja on<br />
Monday.<br />
Uwaleke said that with<br />
such development, the naira<br />
had joined other 62 pre-approved<br />
currencies directly<br />
accepted for trade by the UK<br />
Government.<br />
The UK Export Finance<br />
Agency (UKEF) recently<br />
stated that it had concluded<br />
plans to include the naira in<br />
its list of “pre-approved currencies”.<br />
The granting of a ‘’preapproved<br />
currency’’ status<br />
by UKEF gives exporters from<br />
the UK the opportunity to offer<br />
their overseas customers<br />
UKEF-backed finance in local<br />
currency of the importers.<br />
‘‘It will enhance the financial<br />
position of small and<br />
medium enterprises as foreign<br />
exchange risk associated<br />
with international trade is<br />
minimised thus eliminating<br />
a major source of uncertainty<br />
over debt servicing cost of<br />
credit facilities.<br />
‘‘Therefore, business enterprises<br />
are in a stronger<br />
position to negotiate better<br />
terms with their banks in<br />
Nigeria and avoid variable<br />
debt service costs linked to<br />
fluctuations in exchange<br />
rate,’’ Uwaleke said.<br />
According to him, the<br />
bank in Nigeria will receive<br />
a guarantee for full repayment<br />
of the loan, it will help<br />
to improve the quality of risk<br />
assets of Nigerian banks and<br />
enhance financial systems<br />
stability.<br />
Uwaleke said that the<br />
expected increase in Foreign<br />
Direct Investments could<br />
bring about transfer of technology<br />
to small businesses<br />
in Nigeria.<br />
‘‘The UKEF flexible financing<br />
solutions have<br />
been described as the “next<br />
best thing to concessionary<br />
financing’’ due to their<br />
relatively cheap and flexible<br />
nature which is particularly<br />
healthy for small business<br />
enterprises,’’ he said.
14<br />
BUSINESS DAY<br />
C002D5556<br />
Wednesday <strong>28</strong> <strong>Feb</strong>ruary <strong>2018</strong><br />
COMPANIES & MARKETS<br />
Banks credit to private sector to grow in <strong>2018</strong>- FSDH<br />
BALA AUGIE<br />
Banks credit to<br />
the private sector<br />
is expected<br />
to grow in <strong>2018</strong>,<br />
thanks to a drop<br />
in yields on Treasury bills<br />
(T-bills), improved consumer<br />
confidence and, an<br />
improvement in macroeconomic<br />
condition, according<br />
to research house, FSDH<br />
Merchant Bank.<br />
The total credit to the private<br />
sector in 2017 witnessed<br />
a marginal decrease of 2.34<br />
percent to N15.74 trillion<br />
compared with N16.12 trillion<br />
in 2016, according to the<br />
National Bureau of Statistics<br />
(NBS).<br />
Banks slowed down on<br />
lending to the private sector<br />
as an economic recession<br />
in 2016 brought on by<br />
a sudden drop in oil price<br />
and a severe dollar scarcity<br />
hindered companies and<br />
government from paying<br />
back interest on money<br />
borrowed.<br />
The most affected of<br />
these sectors are the transportation<br />
& storage, general<br />
commerce, education and<br />
information and communication.<br />
Credit to players in<br />
the transportation and storage<br />
sub sector declined by<br />
26 percent to N332.08 billion<br />
in 2017, down from N450.75<br />
billion in 2016. From N1.31<br />
trillion in 2016, credit to the<br />
general commerce sub sector<br />
fell by 21 percent to N1.04<br />
trillion in 2017.<br />
Also, banks slowed lending<br />
to the real sector as they<br />
made money when yields on<br />
short term government securities<br />
hovered around 18 percent<br />
to 21 percent between<br />
April and October 2017.<br />
As a result of the aforementioned<br />
monetary policy,<br />
13 banks raked in N562.67<br />
billion in interest income<br />
from treasury bills in the third<br />
quarter of 2017, representing<br />
a 53.55 percent increase from<br />
2016 of N366.42 billion figure<br />
recorded in 2016.<br />
However, yields on 90<br />
days short-term paper saw<br />
a sharp decline to 8.75 percent<br />
in January to finally hit<br />
its current 13.10 percent as<br />
government issued more<br />
dollars denominated debt<br />
and effectively reduce its<br />
naira debt.<br />
Analysts are of the view<br />
that the sharp drop in asset<br />
yields on government securities<br />
will force banks to start<br />
lending to the real sector as<br />
the end of free money are<br />
over.<br />
They add that a rate cut by<br />
the Central Bank of Nigeria<br />
(CBN) will strengthen lending<br />
to the private sector.<br />
For the first nine months<br />
through September 2017, cumulative<br />
loans and advances<br />
to customers fell by 2.62 billion<br />
in September 2017 as<br />
against N14.08 billion, based<br />
on data compiled by <strong>BusinessDay</strong>.<br />
Tajudeen Ibrahim head of<br />
research at Chapel Hill Denham<br />
said that the loan book<br />
expansion will be underpinned<br />
by possible financial<br />
system liquidity as the central<br />
could cut the CRR and interest<br />
rates in the first quarter of<br />
next year.<br />
“We have seen the apex<br />
slow the issuance of OMO.<br />
Market conditions will require<br />
that they increase lending<br />
to the real sector. We will<br />
surely see loan book expand<br />
on market dynamics,” said<br />
Ibrahim.<br />
Credit facilities to the<br />
players in finance, insurance<br />
and capital market rose<br />
by 20.1 percent during the<br />
period. Mining and quarrying<br />
players got credit facilities<br />
18.7 percent more than<br />
what they received in the last<br />
quarter of 2016. Also, credit<br />
facilities to the construction<br />
sub sector were up by 4.1<br />
percent. The governments at<br />
all levels received saw their<br />
facilities rise by 2.2 percent.<br />
The agric sub sector did not<br />
get much attention as facilities<br />
in the last quarter of 2017<br />
over the last quarter of 2016<br />
rose slightly by 0.4 percent.<br />
TL First Group CEO task FG on utilisation<br />
of world Bank’s $486m loan<br />
Modestus Anaesoronye<br />
International Economist<br />
and Group Managing<br />
Director of TL First<br />
Group, Olu Olasode has<br />
tasked the Federal Government<br />
of to judiciously utilise<br />
the $486 million dollars fund<br />
approved by the World Bank.<br />
The credit which was<br />
granted to rehabilitate and<br />
upgrade the Nigerian electricity<br />
transmission substations<br />
and lines, is a welcome<br />
investment to help alleviate<br />
the current issues militating<br />
against the power sector<br />
in Nigeria, the Economist<br />
added.<br />
Responding to questions<br />
on implications on rising<br />
debt, Olasode, who is also<br />
a Chartered Accountant,<br />
stated “unlike many professional<br />
colleagues who are<br />
weary of debts, I have no<br />
problems with increasing<br />
your labilities if the resulting<br />
growth in income, capital,<br />
assets or national wealth<br />
far outweighs the debt. In<br />
essence, it should be about<br />
spending to save through<br />
better infrastructure in electricity<br />
transmission that ultimately<br />
powers economic<br />
growth.”<br />
According to Olasode, effective<br />
utilisation of the fund<br />
can benefit small scale business<br />
owners and contribute<br />
to adequate and reliable<br />
electricity supply necessary<br />
for Nigeria’s continued economic<br />
development as an effortto<br />
ease the infrastructure<br />
constraints these businesses<br />
currently face.Electricity<br />
is a significant component<br />
of virtually any production<br />
process. As such, limited<br />
supply has the potential to,<br />
directly or indirectly, affect<br />
the economic productivity<br />
of businesses. An attendant<br />
effect is the closure of many<br />
Enterprises in Nigeria in the<br />
last five years.<br />
He stated that the Transmission<br />
Company of Nigeria<br />
can be better empowered<br />
to ensure increased<br />
transmission network and<br />
provision of additional<br />
electricity. He further proposed<br />
that part of the funds<br />
can be used to adopt new<br />
models that tap into the<br />
vitality of the nation’s potentials.<br />
“For instance, investment<br />
can be made into<br />
solar-powered light centres<br />
that help to increase social<br />
activity and productivity of<br />
communities by generating<br />
light after sundown. These<br />
light centres can be used to<br />
power medical equipment<br />
such as an ultrasound, or<br />
refrigerators that store vaccines<br />
at medical centres.”<br />
“Transmission also has a<br />
lot to do with logistic and<br />
planning”, he continued,<br />
“for example, how effectively<br />
can we aggregate<br />
and redistribute the many<br />
dispersed power generation<br />
by privately owned<br />
organisations”.<br />
Olasode, however, expressed<br />
concern about the<br />
sustainability of the nation’s<br />
rising debt stock, especially<br />
during a period when the<br />
country’s socio-economic<br />
development continues to<br />
be plagued by myriad of<br />
challenges.He urged the<br />
Federal Government to apply<br />
caution in contracting<br />
more debt and identify innovative<br />
ways to mitigate<br />
the current debt portfolio.<br />
Olasodesuggested that current<br />
loan funding available<br />
to the government should<br />
be deployed to tap into thenation’s<br />
creative opportunities<br />
to facilitate economic<br />
growth, resolve security<br />
challenges across the regions,<br />
address development,<br />
generate employment and<br />
reduce poverty.<br />
South Africa’s JSE to launch<br />
project bonds in March<br />
Africa’s largest bourse,<br />
the Johannesburg<br />
Stock Exchange<br />
(JSE), will begin<br />
listing “project bonds” from<br />
mid-March, an official said on<br />
Monday, giving institutional<br />
investors a window to invest<br />
in infrastructure projects.<br />
The bonds will provide<br />
private firms a chance to get<br />
a foothold in infrastructure<br />
projects in Africa’s most industrialised<br />
economy, where<br />
project financing has tradi-<br />
tionally come from banks and<br />
government.<br />
“We launch Project Bonds<br />
in the second week of March,”<br />
said spokes woman Pheliswa<br />
Mayekiso, adding that details<br />
of the listing would be made<br />
public closer to the launch.<br />
“Government and banks<br />
alone cannot fund South<br />
Africa’s infrastructure programme,”<br />
the Treasury said<br />
in a review of the <strong>2018</strong> budget<br />
released last week.<br />
“These bonds will be underpinned<br />
by the cash flows<br />
of a ring-fenced project, such<br />
as infrastructure or energy<br />
projects,” it said.<br />
Capital markets have already<br />
reduced lending to<br />
some state-owned companies,<br />
such as sole power supplier,<br />
Eskom.<br />
South Africa plans to<br />
spend billions of dollars over<br />
the next three years to build<br />
and revamp roads, power stations<br />
and ports, government<br />
officials said<br />
Buffett says ‘terrible mistake’ for longterm<br />
investors to be in bonds<br />
Billionaire Warren Buffett<br />
prodded ordinary<br />
investors on Saturday<br />
to stay invested in<br />
United States stocks, ignoring<br />
price swings, guidance from<br />
people with fancy credentials<br />
and the temptation to load up<br />
on bonds.<br />
Buffett said it is a “terrible<br />
mistake” for investors with<br />
long-term horizons – among<br />
them, pension funds, college<br />
and endowments and savingsminded<br />
individuals – to measure<br />
their investment “risk” by<br />
their portfolio’s ratio of bonds<br />
to stocks.The long-time bull<br />
on U.S. companies and the<br />
economy issued his latest<br />
letter to Berkshire Hathaway<br />
Inc shareholders on Saturday.<br />
Treasury yields have been<br />
rising since the start of the<br />
year, stemming from brewing<br />
inflationary pressures and<br />
massive bond supply to help<br />
fund U.S. President Donald<br />
Trump’s tax overhaul.<br />
Higher rates have kept U.S.<br />
equity markets under selling<br />
pressure, as investors worry<br />
borrowing costs could hurt<br />
companies’ profitability.<br />
Earlier this month, stocks<br />
suffered their first 10 per cent<br />
pullback since early 2016.<br />
High-grade bonds, he said,<br />
can increase the risk of an investment<br />
portfolio as inflation<br />
eats away at the return.<br />
“There is simply no telling<br />
how far stocks can fall in a<br />
short period,” Buffett said.<br />
“As an investor’s investment<br />
horizon lengthens,<br />
however, a diversified portfolio<br />
of U.S. equities becomes<br />
progressively less risky than<br />
bonds, assuming that the<br />
stocks are purchased at a<br />
sensible multiple of earnings<br />
relative to then-prevailing<br />
interest rates.”
Wednesday <strong>28</strong> <strong>Feb</strong>ruary <strong>2018</strong> C002D5556 BUSINESS DAY 15<br />
COMPANIES & MARKETS<br />
Oil hits nearly three-week high as Saudi<br />
Arabia to keep output well below cap<br />
Oil prices extended<br />
gains to hit their<br />
highest level<br />
in nearly three<br />
weeks on Monday<br />
supported by comments<br />
from Saudi Arabia that it would<br />
continue to curb exports in line<br />
with the OPEC-led-effort to cut<br />
global-supplies.<br />
Sweet Brent crude gained<br />
12 cents or 0.2 per cent to 67.43<br />
dollars.<br />
United States West Texas<br />
Intermediate crude for April<br />
delivery was up 20 cents or<br />
0.3 per cent at 63.75 dollars a<br />
barrel.<br />
Prices were increased after<br />
Saudi Arabian oil minister Khalid<br />
al-Falih on Saturday said that<br />
the country’s crude-production<br />
in January-March would be well<br />
below-output-caps with exports<br />
averaging below seven million<br />
barrels per day (bpd).<br />
Saudi Arabia hopes OPEC<br />
and its allies will be able to relax<br />
production curbs next year and<br />
create a permanent-framework<br />
to stabilise oil markets after the<br />
current supply cut-deal ends<br />
this year.<br />
U.S. energy companies, last<br />
week, added one oil rig, the fifth<br />
weekly increase in a row, bringing<br />
the total count up to 799, the<br />
highest level since April 2015,<br />
Baker Hughes energy services<br />
firm said on Friday.<br />
Hedge funds and money<br />
managers upped their bullish<br />
wagers on U.S. crude oil for the<br />
first time in four weeks, data<br />
showed on Friday.<br />
A powerful 7.5-magnitude<br />
earthquake struck Papua New<br />
Guinea’s Southern-Highlandsprovince<br />
early on Monday, the<br />
U.S. Geological Survey (USGS)<br />
said, prompting oil and gas companies<br />
to immediately suspend<br />
operations in the energy-rich<br />
interior.<br />
Meanwhile, Libya’s National<br />
Oil Corp said on Saturday it<br />
had declared force majeure on<br />
the 70,000 bpd El Feel oilfield<br />
after a protest by guards closed<br />
the field.<br />
Oil price watchers believe oil<br />
should in truth climb to 70-100<br />
dollars range.<br />
High number of Nigerians without insurance<br />
worries us – Babington-Ashaye<br />
Business Event<br />
L-R: Adeola Ambah, head, public sector, Lagos Region of First City Monument Bank (FCMB); Sola<br />
Oyegbade, head, training academy of the Bank; Obafela Bank-Olemoh, special adviser on education<br />
in Lagos State, and Felicia Obozuwa, divisional head, corporate services of FCMB, during the faculty<br />
launch of the ReadySetWork (RSW) initiative designed by Lagos State Government to prepare students in<br />
higher institutions in the state for work after school in Lagos. FCMB is a major partner of the programme.<br />
gerians could not revive collapsed<br />
businesses, buildings or<br />
repair their vehicles involved in<br />
accidents because they lacked<br />
insurance policies that could<br />
provide fund to mitigate the<br />
losses.<br />
“My plea to Nigerians is that<br />
it is better to be five years early<br />
than to be five minutes late.<br />
“I implore Nigerians to<br />
henceforth take insurance policies<br />
suitable to their lifestyles.”<br />
she said<br />
She urged media practitioners<br />
to support the industry still<br />
in its infancy.<br />
“The insurance industry today<br />
is in a precarious state due to<br />
the various unfolding dynamics<br />
and it is calling for change of<br />
operations and strategies by<br />
operators.<br />
“The industry would be able<br />
to stave these besetting odds and<br />
maintain an acceptable image in<br />
the eyes of the public only if the<br />
media show understanding and<br />
appreciation of the times.<br />
“It is only when the insurance<br />
industry exists and is thriv-<br />
Lagos, <strong>Feb</strong>. 2, <strong>2018</strong> (NAN)<br />
The President, Insurance<br />
Industry Consultative<br />
Council (IICC),<br />
Mrs Funmi Babington-Ashaye,<br />
has said the high percentage<br />
of Nigerians that are still uninsured<br />
remains a major concern<br />
to the council.<br />
Babington-Ashaye said this<br />
on Friday in Lagos at a seminar<br />
organised for journalists by the<br />
council with the theme “Role of<br />
Media in Deepening Insurance<br />
Penetration.”<br />
The IICC was formed with<br />
the objectives of raising the<br />
profile of insurance Industry<br />
and increase its relevance to<br />
the nation’s economic growth.<br />
Babington-Ashaye, who is<br />
also the President of the Chartered<br />
Insurance Institute of<br />
Nigeria (CIIN), said over 90 per<br />
cent of Nigerians were living<br />
without insurance.<br />
She said wrong perceptions,<br />
among others, had hindered<br />
Nigerians from taking insurance<br />
policies.<br />
Babington-Ashaye said Niing<br />
that insurance correspondents<br />
could also have a safe and<br />
comfortable nest.”<br />
The Executive Secretary,<br />
Nigerian Council Insurance<br />
Brokers (NCRIB), Mr Fatai<br />
Adegbenro, urged Nigerians to<br />
believe in insurance.<br />
He said insurance companies<br />
were regulated by National<br />
Insurance Commission<br />
(NAICOM) and the Market<br />
Development and Restructuring<br />
Initiative (MDRI) intiated by<br />
the Commission had enhanced<br />
prompt claims payment.<br />
Adegbenro urged media<br />
practitioners to support the<br />
industry by clarifying any information<br />
they obtained before<br />
publishing.<br />
Mr Sanya Oni, an Editor<br />
with the Nations Newspaper,<br />
decried that only one per cent<br />
of 180 million Nigerians have<br />
insurance policy.<br />
“This denotes that only 1.8<br />
million Nigerians have insurance<br />
policy and 70 per cent<br />
of the insured are with Lagos<br />
state.” he said<br />
L-R: Rajneesh Gupta, chief operation coordinator, Wandel International Nigeria Limited; Chinedu<br />
Ibezimako, chief executive officer, Green Kapital; Soamy Dixit, regional head (East & West Africa),<br />
Luminous Power Technologies (India) Private Limited, and Suresh Pykkat, business promotion<br />
strategist, Wandel International Nigeria Limited, during the Luminous Dealers Conference held in<br />
Abuja<br />
Making Nigeria’s tourism sector viable for economic growth<br />
The total contribution<br />
of travel and tourism<br />
to Nigerian economy<br />
has been estimated to<br />
be $1.1 billion.<br />
According to a report of<br />
the World Travel and Tourism<br />
Council (WTTC), the total contribution<br />
of travel and tourism<br />
to the global economy hit $7.6<br />
trillion in 2016, about 10 per<br />
cent of the global GDP of $75.6<br />
trillion.<br />
Tourism seems to be the<br />
way following the dwindling<br />
fortunes of oil and gas.<br />
The contribution of the<br />
tourism industry to Nation’s<br />
economy is not only a tiny fraction<br />
of the global industry but<br />
also shows the gulf between the<br />
present reality and the potential<br />
of tourism for Nigeria.<br />
The potential of tourism<br />
could be further enhanced<br />
with deliberate focus and more<br />
attention to turn around most<br />
of the nation’s tourist sites and<br />
turning them into wealth.<br />
Sally Mbanefo, immediate<br />
past Director-General of the Nigerian<br />
Tourism Development<br />
Corporation (NTDC), said the<br />
sector generated the revenue<br />
from the more than 6.01 million<br />
tourists that visited the country<br />
in 2015.<br />
“In 2014, about 4.8 million<br />
people arrived and the related<br />
expenditure was $853 million.<br />
“In 2016, about 6.01 million<br />
came into Nigeria and the sector<br />
generated over $1.1 billion<br />
as the expenditure related to<br />
their arrival in this country.’’<br />
Mbanefo explained that<br />
the situation was an economic<br />
indication of the value<br />
that tourism could add to an<br />
economy where the government<br />
and the private sector<br />
spur tourism.<br />
She said that Nollywood<br />
alone, created job opportunities<br />
for more than two million<br />
persons, 30,000 work in restaurants<br />
and over 11,000 in the<br />
hotel business.<br />
Mbanefo said that in spite<br />
of this more needed to be done<br />
to improve the sector to further<br />
compete globally.<br />
She said that challenges<br />
limiting the growth of the sector<br />
should be address.<br />
She listed them to include<br />
access to gathering statistics,<br />
epileptic power supply, inadequate<br />
infrastructure, poor access<br />
to visa, as well as absence<br />
of uniformed standardisation<br />
and classification for hotels<br />
nationwide.<br />
Ganiyu Tarzan, the President,<br />
Association of Tourists<br />
Boats Operators and Water<br />
Transporters of Nigeria (AT-<br />
BOWATN), added that tourism<br />
had a link with all other sectors<br />
of economy whether religious,<br />
education, sport, business, agriculture<br />
and medicine.<br />
Tarzan, therefore, urged<br />
the Federal Government, especially,<br />
the Federal Ministry<br />
of Information and Culture, to<br />
channel the allocation meant<br />
for the sector to rehabilitating<br />
of tourism projects across the<br />
country.<br />
L-R: Bosun Sosanya, executive director, physical security service, Halogen Security Company<br />
Limited; Uche Mojekwu, associate director, brand and strategic marketing and client account<br />
management, Halogen Security Company Limited; Edgal O. Imohimi, commissioner of police,<br />
Lagos State Command, and Wale Olaoye, managing director, Halogen Security Company<br />
Limited, during the courtesy visit of the Lagos State Commissioner of Police to Halogen Head<br />
Office at Mobolaji Bank Anthony Way, recently.<br />
L-R: Olumide Sholanke, human resources director, Nigerian Bottling Company Limited; Rosemary<br />
Okolo, registrar, Pan-Atlantic University, Lekki; Chidi Nwagu, bursar, Pan-Atlantic University, and<br />
Ikechukwu Obiaya, dean, School of Media and communication, Pan-Atlantic University, during a<br />
career fair organized by Pan-Atlantic University held at the university complex in Lagos.
16<br />
A National Youth<br />
Service Corps Batch<br />
‘B’ Stream II member,<br />
John Luke,<br />
clearing the drainage<br />
at Our Lady of<br />
Loreter on Fadaman<br />
Mada Road in<br />
Bauchi on Monday.<br />
NAN<br />
BUSINESS DAY<br />
CITYFile<br />
FCTA moves to reclaim<br />
railway right of way<br />
Federal Capital Territory Administration<br />
(FCTA) says it is taking<br />
steps to reclaim obstructed right of<br />
way of the railway corridors across<br />
Abuja.<br />
Muhammad Bello, minister of the FCT,<br />
who disclosed this, said that relevant agencies<br />
have been directed to move and clear all<br />
illegal structures along the railway corridors.<br />
Bello, during a test-ride of the train service<br />
and inspection of the rail stations, on Monday,<br />
preparatory to the opening of test-run<br />
to the public, said the move was to ensure<br />
that passengers gain unhindered access to<br />
the train stations.<br />
The minister along with staff of the Federal<br />
Capital Development Authority (FCDA)<br />
was led on the inspection by officials of<br />
CCECC Nigeria Limited – the rail construction<br />
company. He directed the FCDA to<br />
speed up works on the opening of access<br />
Police mop up illegal arms in Ondo<br />
The police in Ondo have given<br />
residents of the state a 21-day<br />
ultimatum to submit all illegal fire<br />
arms to the nearest police station.<br />
Gbenga Adeyanju, the Commissioner<br />
of Police in the state, gave the ultimatum<br />
while briefing newsmen in Akure, on the<br />
arrest of some robbery suspects.<br />
The Inspector-General of Police, Ibrahim<br />
Idris, recently directed commissioners<br />
of police in states to commence the<br />
recovery of prohibited firearms across<br />
the country.<br />
Adeyanju said the directive was in compliance<br />
with the order to mop up illegal<br />
arms and ammunition in the country.<br />
According to the police boss, anyone<br />
caught with illegal fire arms after the ultimatum<br />
would be sanctioned.<br />
“We wish to inform members of the<br />
public that in compliance with the directive<br />
of the Inspector-General of Police,<br />
we are mopping up illegal fire arms and<br />
roads to the 12 railway stations.<br />
The test-ride took the minister and his<br />
entourage round the 12 railway stations<br />
spread across the scenic landscape of the rail<br />
network. The view gave the riders a preview<br />
of what commuters should expect upon the<br />
commencement of the train services.<br />
Bello, who expressed satisfaction with<br />
the work done on the railway project, commended<br />
the contractor.<br />
“We are satisfied with the quality of works<br />
done. What remains now is to recover the<br />
railway boundaries, clear the corridors and<br />
provide access ways to the stations. This we<br />
hope will be done in the next few weeks to<br />
enable us commence the test services.<br />
“We hope to open the stations for operations<br />
in the next few weeks and we don’t<br />
want a situation where the train would be<br />
competing for space with illegal structures<br />
and settlements,” he said.<br />
… set up joint task force in Enugu<br />
ammunition.<br />
“All illegal fire arms are to be submitted<br />
to the nearest police office in their domain;<br />
anyone caught with illegal fire arm will be<br />
sanctioned after the ultimatum,” he said.<br />
In Enugu State, the police have also constituted<br />
a joint departmental task force to<br />
mop up illegal fire arms and ammunition.<br />
Mohammed Danmallam, the Commissioner<br />
of Police in the state, said on<br />
Monday named Frank Idu, an Assistant<br />
Commissioner of Police in charge of operations,<br />
to head the task force.<br />
The task force comprised personnel<br />
from State and Federal Special Anti-Robbery<br />
Squad (SARS), Criminal Intelligence<br />
and Investigation Department and mobile<br />
police units.<br />
“The task force will ensure the mopping<br />
up of all illegal fire arms and ammunition<br />
in the state as well as stop all militia groups.<br />
The task force will ensure that everybody<br />
holding illegal fire arms and ammunition<br />
Bello directed the coordinator, Abuja<br />
Metropolitan Management Council, Shuaibu<br />
Umar, to commence sensitisation<br />
meetings with the stakeholders in the various<br />
railway corridors over illegal settlements.<br />
The illegal settlements included those<br />
around Kukwaba, Dei Dei, Gwagwa, Kuchigoro<br />
and others, with a view to giving them<br />
enough time to vacate the railways corridors<br />
and station access ways.<br />
Kayode Opeifa, the FCTA transport secretary,<br />
stated that the stadium station would be<br />
serviced by an underpass tunnel. He added<br />
that the tunnel was designed to provide traffic<br />
relief for the city during sporting and other<br />
social events in the stadium.<br />
The 12 completed stations included the<br />
Metro, Stadium, Wupa, Kukwaba 1 and 2,<br />
Gwagwa and Dei-Dei train stations. Others<br />
are the Idu, Bassanjiwa, Airport, Kagini,<br />
Bazango stations.<br />
will be prosecuted,’’ he said.<br />
Danmallam urged all persons with fire<br />
arms and ammunition to re-verify and<br />
revalidate them in the command within<br />
14 days.<br />
He said that anyone caught with illegal<br />
fire arms and ammunition would henceforth<br />
be prosecuted according to relevant<br />
laws of the country.<br />
“If you have fire arms and ammunition<br />
with expired licence or not duly registered,<br />
you must revalidate at the command now,’’<br />
he said.<br />
He said that the enforcement would be<br />
total and urged members of the public to<br />
give information on people holding such<br />
illegal fire arms and ammunition to the<br />
police.<br />
“Everybody should assist the police and<br />
command on this issue; members of the<br />
public and especially journalists will do<br />
well to give us intelligence information,”<br />
he said.<br />
He said that the state had no militia<br />
group and had remained very peaceful for<br />
over two years.<br />
Wednesday <strong>28</strong> <strong>Feb</strong>ruary <strong>2018</strong><br />
Youths want Mobil to<br />
create job opportunities<br />
ANIEFIOK UDONQUAK, Uyo<br />
Youths in Akwa Ibom under the aegis<br />
of Nigeria Youth Initiative Forum<br />
have urged Mobil Producing Nigeria,<br />
a major oil company operating in the state<br />
to provide employment opportunities and<br />
ensure that those from the catchment area<br />
are given priority.<br />
In a letter addressed to the chairman and<br />
managing director of the company, the youths<br />
alleged that some 400 qualified seafarers and<br />
cadet officers from the catchment area had<br />
been denied employment by 42 marine and<br />
services companies working for Mobil.<br />
The youths in the letter signed by<br />
Sammy Bassey and Godwin Edwards, their<br />
president and secretary, respectively, specifically<br />
called on the oil company to direct<br />
its contractors to source their workforce<br />
from seafarers and crewmen from the<br />
catchment area.<br />
They also urged the oil company to commence<br />
the immediate rebuilding of Qua<br />
Iboe Terminal (QIT) jetty and the review of<br />
its community relations guidelines of 2007.<br />
They alleged that oil servicing companies<br />
had not executed any community development<br />
projects in the catchment area since 2007.<br />
Idahosa dedicates<br />
new church building<br />
IDRIS UMAR MOMOH, Benin<br />
Margaret Idahosa, an archbishop<br />
of Church of God Mission, has<br />
commissioned an ultra-modern<br />
provincial headquarters in Ugbegun community,<br />
Esan Central local government<br />
area of Edo State.<br />
Idahosa, while commissioning the<br />
church building, last weekend, said it was<br />
to propagate the gospel to the nooks and<br />
crannies of the world. The archbishop,<br />
who also visited the traditional ruler of<br />
the community, Samuel Iwuno Obade<br />
11, in his palace, prayed for God’s blessings,<br />
wisdom and protection upon the<br />
community.<br />
Responding, the traditional ruler of<br />
Ugbegun, Iwuno Obade II, commended<br />
the cleric for being a role model.<br />
“In all ramifications, you have taught<br />
your followers the good character because<br />
this is an example of good leadership<br />
in the Church of God Mission.<br />
Police recover 39 stolen<br />
vehicles in Osun<br />
BOLA BAMIGBOLA, Osogbo<br />
Osun State police command said it<br />
recovered 39 vehicles believed to<br />
have been snatched from owners<br />
across the southwest region.<br />
Fimihan Adeoye, the Commissioner of<br />
Police in Osun, said 19 of the stolen vehicles<br />
were recovered on January 20, <strong>2018</strong>, and<br />
currently on display at the headquarters of<br />
the state police command. He said another<br />
20 vehicles were also later recovered.<br />
He said that a team of investigators from<br />
Special Anti Robbery Squad working with<br />
the command discovered that the vehicles<br />
were stolen after checking their chassis<br />
numbers.<br />
“We discovered that some of the vehicles<br />
were snatched at gun point. We have<br />
prepared the details of the vehicles for the<br />
owners to come and claim,” said Adeoye.
Wednesday <strong>28</strong> <strong>Feb</strong>ruary <strong>2018</strong><br />
In Association<br />
with<br />
C002D5556<br />
BUSINESS DAY<br />
17<br />
Zenith, GTB, Fidelity, UBA, others to pay dividend this year<br />
Stories by Hope Moses-Ashike<br />
About nine deposit<br />
money banks<br />
would be able<br />
to pay dividends<br />
this year despite<br />
the new policy adjustment<br />
issued recently by the Central<br />
Bank of Nigeria (CBN),<br />
an international research<br />
firm, SBG Securities (Pty)<br />
Limited of South Africa said.<br />
The banks are Zenith<br />
Bank Plc, Guaranty Trust<br />
Bank Plc (GTBank), United<br />
Bank for Africa Plc (UBA),<br />
Access Bank Plc, Stanbic<br />
IBTC Plc, Fidelity Bank Plc,<br />
First City Monument Bank<br />
Plc, First Bank and Ecobank.<br />
The CBN had this month<br />
released a circular making<br />
an amendment to a previous<br />
circular dated October<br />
8, 2014 on internal capital<br />
generation and dividend<br />
payout ratio. The new circular<br />
introduced some conditions<br />
for banks to be allowed<br />
to pay dividend, which are<br />
the Composite Risk Rating<br />
of the bank, Non-Performing<br />
Loans (NPL) Ratio and Capital<br />
Adequacy Ratio.<br />
While banks do not publicly<br />
disclose their Composite<br />
Risk Rating the minimum<br />
capital adequacy ratio for<br />
international banks is 15 percent,<br />
10 percent for national<br />
banks and 16 percent for systemically<br />
important banks.<br />
The circular specifically<br />
states the following regarding<br />
dividend payment; No<br />
bank shall be allowed to pay<br />
dividend out of reserves,<br />
banks that do not meet the<br />
minimum capital adequacy<br />
ratio shall not be allowed<br />
to pay dividend, banks that<br />
have a Composite Risk Rating<br />
(CRR) of “High” or a Non<br />
Performing Loan (NPL) ratio<br />
of above 10 percent shall not<br />
be allowed to pay dividend.<br />
The circular further stated<br />
that banks that meet the<br />
minimum capital adequacy<br />
ratio but have a CRR of<br />
“Above Average” or an NPL<br />
ratio of more than 5% but less<br />
than 10% shall have dividend<br />
payout ratio of not more than<br />
30 per cent.<br />
Banks that have capital<br />
adequacy ratios of at least<br />
3% above the minimum<br />
requirement, CRR of “Low”<br />
and NPL ratio of more than<br />
5% but less than 10%, shall<br />
have dividend pay-out ratio<br />
of not more than 75 percent<br />
of profit after tax<br />
There shall be no regulatory<br />
restriction on dividend<br />
pay-out for banks that meet<br />
the minimum capital adequacy<br />
ratio, have a CRR of<br />
“low” or “moderate” and<br />
an NPL ratio of not more<br />
than 5%.<br />
Based on the foregoing<br />
analysis from a CAR perspective,<br />
analysts from SBG<br />
Securities have held that<br />
Zenith, GTB, UBA, Access,<br />
Stanbic IBTC, Fidelity and<br />
FCMB were not affected by<br />
the policy based on their<br />
nine months 2017 unaudited<br />
results.<br />
Going by the results released<br />
in September2017,<br />
most of the banks not restricted<br />
from paying dividend<br />
have either exceeded<br />
or are close to their 2016 full<br />
year profit level.<br />
Fidelity Bank with a profit<br />
before tax of N16.2 billion in<br />
September 2017 has done<br />
147 percent of its 2016 full<br />
year profit, Sterling Bank<br />
with its N6.6 billion profit<br />
before tax as at September<br />
2017 has done 131 percent of<br />
its 2016 full year profit while<br />
Stanbic IBTC has already<br />
recorded 123 percent of its<br />
2016 full year profit before<br />
tax as at September 2017.<br />
Other banks close to their<br />
2016 full year gross profit<br />
include Zenith, GTB, Access<br />
and UBA. These banks will<br />
most likely pay at least the<br />
same dividend paid in the<br />
previous financial year.<br />
The analysts also held<br />
that banks which belong to<br />
a HoldCo structure such as<br />
FBN Holdings Limited could<br />
still pay dividend which<br />
would be derived from their<br />
non-bank subsidiaries while<br />
the policy did not apply to<br />
ETI group (parent company<br />
for Ecobank Nigeria) because<br />
it is not regulated by<br />
the CBN.<br />
According to the analysts<br />
dividend payout estimates<br />
are in line with the regulation<br />
as they had previously<br />
emphasized the need for a<br />
reduction in dividend pay<br />
out to build buffers, remarking<br />
that for 2017 earnings,<br />
the highest dividend payouts<br />
will come from Zenith<br />
at 50 percent and GTB at 49<br />
percent.<br />
They reiterated their<br />
positive dividend payout<br />
outlook for 2017 earnings,<br />
estimating 21 percent average<br />
growth in dividend per<br />
share for the listed banks in<br />
their 2017 estimates, driven<br />
primarily by strong earnings<br />
growth.<br />
Stanbic IBTC shows commitment<br />
to social media week<br />
The <strong>2018</strong> Social Media<br />
Week (SMW Lagos)<br />
commenced<br />
on Wednesday as<br />
Stanbic IBTC, Nigeria’s leading<br />
end-to-end financial<br />
services organization joined<br />
other thought leaders, innovators<br />
business practitioners,<br />
entrepreneurs, and pop<br />
culture luminaries from Nigeria<br />
and around the world<br />
to commemorate the week.<br />
This year’s event, themed<br />
“CLOSER,” seeks to explore<br />
the intensifying conflict between<br />
communality and<br />
individualism.<br />
Yinka Sanni, Chief Executive<br />
at Stanbic IBTC Holdings<br />
PLC, said a demonstration of<br />
the organization’s commitment<br />
towards harnessing<br />
innovation and technology<br />
to build communities is underscored<br />
by its sponsorship<br />
of and active participation at<br />
this year’s Lagos Social Media<br />
Week. He added that the<br />
organization’s objective is<br />
therefore to ensure that these<br />
communities are well served<br />
with financial knowledge.<br />
He stated that Stanbic<br />
IBTC’s pervasiveness on several<br />
social media platforms;<br />
including Twitter, Facebook,<br />
LinkedIn and Instagram, as<br />
well as the establishment<br />
of an all-digital branch is<br />
designed to make financial<br />
products and services easily<br />
accessible to a wide array of<br />
clientele, especially the millennials.<br />
“In line with our brand<br />
promise to help move people<br />
and businesses forward; I am<br />
delighted to announce our<br />
participation in the <strong>2018</strong> social<br />
media week. Participating<br />
amongst techpreneurs<br />
and the social community<br />
shows our openness to both<br />
connect with various communities<br />
in a bid to stimulate<br />
socio economic growth,”<br />
Sanni said.<br />
Africa; and connecting<br />
selected emerging markets<br />
to Africa by applying sector<br />
expertise, particularly in<br />
natural resources, power and<br />
infrastructure.<br />
Fidelity Bank’s customers declare promo savings scheme real<br />
Beneficiaries of promo<br />
savings scheme<br />
initiated by Fidelity<br />
Bank plc have confirmed<br />
that the ‘Get Alert in<br />
Millions’ promo reloaded<br />
is real and has positively<br />
changed their lifestyle.<br />
“I got a call from Fidelity<br />
Bank on <strong>Feb</strong>ruary 14 that<br />
said, ‘you just won yourself<br />
N2 million’. I said I did<br />
not do anything how can I<br />
win N2 million”, said Azeez<br />
Moreninkeji Adedoyin, a<br />
customer who won N2 million<br />
in the fourth monthly<br />
draw.<br />
“The next day I went to<br />
the nearest branch at Abeokuta,<br />
Ibadan, in fact I was<br />
ready to sue the bank if at<br />
the end I did not win the<br />
money. I did not believe it<br />
was real and my parent did<br />
not believe too”.<br />
“I promised to make use<br />
of this money wisely. This<br />
is real. The bank is not being<br />
bias. I got a call that<br />
changed my life”, Adedoyin<br />
said, after receiving the alert<br />
of N2 million at the formal<br />
presentation at Mazamaza<br />
branch, Lagos.<br />
Another customer,<br />
Mmereole Salome Obiageri,<br />
was presented with a cheque<br />
of N1 million and her account<br />
was credited immediately.<br />
She said, “I thank God<br />
who made me to be one of<br />
the winners. God will continue<br />
to give Fidelity Bank<br />
the strength to expand. The<br />
promo is real”.<br />
Speaking at the presentation,<br />
Richard Ebo, regional<br />
head, retail banking, said<br />
the bank through the promo<br />
had empowered many of its<br />
customers and businesses.<br />
He reiterated the bank’s unparalleled<br />
commitment to<br />
reward customers for their<br />
loyalty and patronage.<br />
The winners in the fourth<br />
monthly draw emerged from<br />
a transparent process conducted<br />
by the bank’s control<br />
team, witnessed by officials<br />
of the Consumer Protection<br />
Council (CPC) and other<br />
regulators and stakeholders.<br />
139 more winners emerge in Sterling Bank’s 1dament promo<br />
More winners<br />
have emerged<br />
in the second<br />
draw of Sterling<br />
Bank Plc’s 1damemt promo<br />
introduced to reward new<br />
and existing customers of<br />
the bank.<br />
Henry Bassey chief marketing<br />
officer of the bank<br />
disclosed this in a statement,<br />
remarking that another 136<br />
individuals and three nonindividual<br />
customers won<br />
in the draw. The draw was<br />
held at the corporate headquarters<br />
of the bank recently.<br />
Bassey said the winning<br />
customers were selected<br />
via an electronic<br />
raffle draw system and winners<br />
emerged from various<br />
parts of the country. He<br />
added that the event was<br />
witnessed by officials of<br />
the Consumer Protection<br />
Council (CPC), Lagos State<br />
Lotteries Board (LSLB), National<br />
Lottery Regulatory<br />
Commission and Akintola<br />
Williams Deloitte as well as<br />
senior officials of the bank.<br />
He said a breakdown of<br />
the winners showed that<br />
under the one woman winning<br />
category, three women<br />
emerged winners of one million<br />
naira each, five customers<br />
won an all-expense paid<br />
holiday destination trip while<br />
1<strong>28</strong> individuals and three<br />
non- individual customers<br />
won under the cash prize<br />
winning category.<br />
To qualify for the draw,<br />
a customer of the bank is<br />
expected to maintain a<br />
minimum average balance<br />
of N10,000, N50,000 and<br />
N100,000 for 30 days. The<br />
grand prize of the promo is a<br />
Home in Lekki, Lagos.
18<br />
BUSINESS DAY<br />
C002D5556 Wednesday <strong>28</strong> <strong>Feb</strong>ruary <strong>2018</strong><br />
Tax Issues<br />
Prospects for tax collection brighten<br />
as FIRS initiatives yield fruits<br />
STEPHEN ONYEKWELU<br />
The Federal Inland<br />
Revenue<br />
Services (FIRS)<br />
tax initiatives<br />
aimed at broadening<br />
Nigeria’s tax base and<br />
increasing collection are<br />
yielding some results.<br />
The core functions of<br />
FIRS is to assess, collect,<br />
account and enforce payment<br />
of taxes as may be due<br />
to the government or any of<br />
its agencies.<br />
Tax collection has become<br />
critical because Nigeria<br />
faces a huge infrastructure<br />
deficit as documented<br />
in the recently launched<br />
Nigeria Economic Recovery<br />
and Growth Plan (ERGP).<br />
According to the ERGP<br />
(2017 – 2020), Nigeria needs<br />
to invest $3 trillion in infrastructure<br />
over the next<br />
30 years. An efficient tax<br />
system is pivotal in making<br />
this happen.<br />
Some of the tax initiatives<br />
designed to improve<br />
efficiency in the tax system<br />
include: innovation, convenience<br />
and transparency<br />
(ICT); amnesty: waiver of<br />
penalty and interest; intensive<br />
registration of taxpayers<br />
and extensive nationwide<br />
tax audit exercise.<br />
Others include: review<br />
and revision of national tax<br />
policy, tax laws and regulations;<br />
bringing tax offices<br />
closer to taxpayers; Voluntary<br />
Assets and Income Declaration<br />
Scheme (VAIDS); tax<br />
awareness initiative: Thursday<br />
declared as a Tax Thursday<br />
and multilateral/bilateral<br />
taxation agreements.<br />
Tunde Fowler, Executive<br />
Chairman, Federal Inland<br />
Revenue Services’ (FIRS),<br />
said at the <strong>2018</strong> edition of<br />
Nigeria Economic Outlook,<br />
organised by Deloitte that<br />
FIRS’ adoption of e-Services<br />
as a medium to achieve Innovation,<br />
Convenience and<br />
Transparency of its operations<br />
has ensured that every<br />
effort is made to improve its<br />
efficiency in collections and<br />
tax administrations.<br />
The adoption of these<br />
e-Services has not only reduced<br />
the taxpayers’ burden<br />
but also improved FIRS<br />
efficiency in collections and<br />
tax administrations. The<br />
e-Services include: e-Registration,<br />
online registration<br />
of taxpayers in order to do<br />
business with FIRS.<br />
Others are: e-Stamp<br />
Duty, Automation of stamp<br />
duty levied transactions<br />
from the comfort of your<br />
home or office; e-Tax Payment,<br />
electronic payment<br />
of taxes through any of FIRS<br />
preferred payment channels.<br />
Nigerian Inter-Bank<br />
Settlement Services (NIB-<br />
SS), Remita, Quickteller (Interswitch),<br />
Etranzact Payment<br />
Gateway; e-Receipt,<br />
an electronic notification<br />
will be automatically sent to<br />
the taxpayer’s email and/or<br />
phone within 24 hours after<br />
payment and its verification;<br />
e-Filing, automation<br />
of FIRS core tax processes.<br />
The tax amnesty programme<br />
has yielded some<br />
fruits as well. As part of<br />
efforts by the Service to<br />
promote voluntary compliance<br />
and shield taxpayers<br />
from the burden of carrying<br />
forward tax liabilities arising<br />
from penalty and interest,<br />
the Service granted a waiver<br />
of penalty and interest for<br />
three years (2013-2015).<br />
All defaulting taxpayers<br />
are considered, provided<br />
that such taxpayers come<br />
forward to declare their<br />
indebtedness, pay at least<br />
25 perecent of the outstanding<br />
amount and present a<br />
payment plan on the outstanding<br />
tax liability that is<br />
acceptable to the Service.<br />
This window was opened<br />
from 5th October to 24th November,<br />
2016. A total of 2,400<br />
companies took advantage<br />
of the window, from which<br />
FIRS realised about N27.086<br />
billion, down payment.<br />
The intensive registration<br />
of taxpayers has recorded<br />
some success. FIRS in<br />
collaboration with other relevant<br />
government agencies<br />
(such as Corporate Affairs<br />
Commission, Central Bank<br />
of Nigeria, Nigeria Customs<br />
Services) undertook a massive<br />
nationwide registration<br />
exercise of new taxpayers<br />
in 2016. The impact is that<br />
over 814,000 new corporate<br />
taxpayers registered by end<br />
of 2016. Over N120 billion<br />
accrued from the exercise,<br />
according to Fowler.<br />
Extensive nationwide<br />
tax audit exercise has advanced<br />
both the broadening<br />
of tax base and increase in<br />
revenue collection. FIRS<br />
has conducted audit in collaboration<br />
with experienced<br />
tax audit firms on a sectorby-sector<br />
basis.<br />
The tax audit firms facilitated<br />
and gathered data<br />
from taxpayers’ records<br />
while FIRS carried out relevant<br />
reviews, assessment<br />
and collection of the revenue<br />
due from the tax liabilities<br />
that arose.<br />
This led to increased<br />
compliance across all tax<br />
types and all taxpayer categories.<br />
Over 15,000 noncompliance<br />
stickers were<br />
pasted on identifiable<br />
business premises and recalcitrant<br />
taxpayers were<br />
enforced upon and over<br />
N35.65 billion recovered.<br />
Voluntary Assets and Income<br />
Declaration Scheme<br />
(VAIDS), VAIDS is an initiative<br />
designed to encourage<br />
voluntary disclosure of previously<br />
undisclosed assets<br />
and income for the purpose<br />
of payment of all outstanding<br />
tax liabilities.<br />
It is being implemented<br />
by the Federal Inland Revenue<br />
Service in collaboration<br />
with the 36 States and FCT<br />
Internal Revenue Service.<br />
It offers a grace period<br />
from July 1, 2017 to March<br />
31, <strong>2018</strong>, for defaulting taxpayers<br />
to voluntarily declare<br />
their true tax status and pay<br />
to government what they<br />
owe over an agreed period<br />
of time.<br />
The scheme is expected<br />
to help expand Nigeria’s<br />
tax base and improve the<br />
low tax to Gross Domestic<br />
Product (GDP) ratio from<br />
the current 6% to between 12<br />
percent to 15 percent in the<br />
first instance, and so far N17<br />
billion has been result of this<br />
initiative from federal taxes.<br />
United Capital series<br />
VAIDS: Regularising your tax status<br />
Regularising one’s<br />
tax status under<br />
the Voluntary<br />
Asset and Income<br />
Declaration Scheme<br />
(VAIDS) can only be done<br />
by remitting all applicable<br />
taxes to the relevant tax authorities<br />
including the FIRS<br />
and SBIRS, depending on<br />
the type of tax in issue.<br />
Payments are to be made<br />
by quoting the entities full<br />
name and a reference Tax<br />
Identification Number (TIN)<br />
through a Bank. The Bank is<br />
expected to issue a payment<br />
receipt when payment is<br />
made. For persons or entities<br />
who have never paid tax, application<br />
for a TIN would be<br />
the first step before payment<br />
can be made.<br />
However, the Scheme<br />
recognizes that many tax<br />
defaulters who are willing<br />
to comply may be cashstrapped.<br />
Thus, VAIDS avails<br />
defaulter the opportunity to<br />
enter into arrangements to<br />
pay outstanding tax liabilities<br />
in installments. At the<br />
discretion of the relevant tax<br />
authority, defaulters may<br />
be granted up to 3years to<br />
pay up their tax liability, but<br />
with the obligation to pay<br />
the interest accrued on the<br />
outstanding balance.<br />
Where a defaulter is unable<br />
to determine his/her<br />
tax liability, the scheme also<br />
made provision for agents of<br />
the relevant tax authorities<br />
to help calculate such tax<br />
liability. But this can only<br />
be done after a defaulter<br />
has registered for VAIDS by<br />
filing the declaration form.<br />
…Identifying willful tax<br />
evaders<br />
On expiration of the<br />
March 31, <strong>2018</strong> deadline,<br />
all taxpayers who fail to take<br />
advantage of the Voluntary<br />
Assets and Income Declaration<br />
Scheme(VAIDS) and<br />
are later found to have under-declared<br />
their income<br />
or assets will be treated as<br />
willful tax evaders and will,<br />
therefore, face the wrath of<br />
the law.<br />
Accordingly, the Federal<br />
Inland Revenue Service<br />
(FIRS) has been reported to<br />
have engaged on retainership,<br />
the service of some<br />
of the world’s leading asset<br />
tracking and recovery firms<br />
to assist in tracking the true<br />
assets of those who have<br />
not participated but are<br />
believed to have underpaid<br />
their taxes. The FIRS<br />
also plan to “Name and<br />
Shame” defaulters to reveal<br />
the identities of tax evaders<br />
to the public. This is to<br />
be supported by criminal<br />
prosecution, and recovery<br />
of taxes due with full penalties<br />
and interest.<br />
Furthermore, the Relevant<br />
Tax Authorities (RTAs)<br />
are in the process of profiling<br />
certain categories of<br />
non-compliant taxpayers<br />
for ongoing audits and investigations,<br />
in line with<br />
the tax compliance reforms.<br />
A small team within the<br />
Ministry of Finance has,<br />
therefore, been quietly gathering<br />
information to assess<br />
degree of tax compliance<br />
over the past 15 months. We<br />
advise clients to regularize<br />
their tax status to avoid any<br />
the reputational risks that<br />
may arise thereafter.<br />
IMF, World Bank, others want<br />
countries to strengthen tax systems<br />
IHEANYI NWACHUKWU<br />
Domestic resource<br />
mobilisation presents<br />
a particular<br />
challenge for developing<br />
countries, which<br />
struggle to raise sufficient<br />
revenue to provide basic<br />
services, such as road infrastructure,<br />
healthcare, and<br />
public safety.<br />
Research indicates that at<br />
least 15 percent of GDP in revenue<br />
is necessary to finance<br />
these basic services, but in<br />
almost 30 of the 75 poorest<br />
countries, tax revenues<br />
are below this 15 percent<br />
threshold.<br />
Amid these findings, major<br />
international organisations<br />
have called on governments<br />
from around the world<br />
to strengthen and increase<br />
the effectiveness of their tax<br />
systems to generate the domestic<br />
resources needed to<br />
meet the Sustainable Development<br />
Goals (SDGs) and<br />
promote inclusive economic<br />
growth. The international organisations<br />
are International<br />
Monetary Fund (IMF), Organisation<br />
for Economic Cooperation<br />
and Development<br />
(OECD), United Nations (UN)<br />
and World Bank Group.<br />
They noted that all countries<br />
need to pay greater attention<br />
to the spillovers from<br />
their tax policies and step up<br />
their support for stronger tax<br />
systems.<br />
They made the call at a<br />
conference organized at UN<br />
headquarters by the Platform<br />
for Collaboration on Tax (PCT)<br />
which provided a unique opportunity<br />
to discuss the role of<br />
tax in ending poverty, protecting<br />
the planet and ensuring<br />
prosperity for all.<br />
Governments and relevant<br />
stakeholders also need to<br />
continue to work together<br />
on establishing a fair and efficient<br />
system of international<br />
taxation, including efforts<br />
to fight tax evasion and tax<br />
avoidance.<br />
During a three-day conference<br />
at UN headquarters<br />
on “Taxation and the SDGs”,<br />
ministers and deputy ministers<br />
of finance, tax authorities,<br />
and senior representatives<br />
from civil society, private sector,<br />
academia, regional and<br />
global organisations debated<br />
the key directions needed for<br />
tax policy and administration<br />
to meet the SDGs by 2030.<br />
This rose includes: how to<br />
mobilise domestic resources<br />
for development; tax policies<br />
to support sustainable<br />
economic growth, investment<br />
and trade; the social dimensions<br />
of taxation (income and<br />
gender inequality, human<br />
development); as well as<br />
capacity development and international<br />
tax co-operation.<br />
As an era of unprecedented<br />
international co-operation<br />
on tax is underway with the<br />
advent of initiatives like the<br />
Automatic Exchange of Information,<br />
the Base Erosion and<br />
Profit Shifting (BEPS) project,<br />
and the active engagement of<br />
the UN Tax Committee—all<br />
these initiatives create new<br />
opportunities for the enhanced<br />
participation of developing<br />
countries in international<br />
tax policy discussions<br />
and institutions, but also new<br />
challenges to fully realising<br />
the benefits of international<br />
co-operation on tax.<br />
The conference aimed to<br />
provide guidance to countries<br />
and other stakeholders on<br />
how to better target tax efforts<br />
to achieve broader development<br />
goals. Insights from the<br />
conference helps inform and<br />
shape the future work of the<br />
PCT members and partners,<br />
including the IMF, OECD, UN<br />
and World Bank.
Wednesday <strong>28</strong> <strong>Feb</strong>ruary <strong>2018</strong><br />
BUSINESS DAY<br />
19<br />
SHIPPING LOGISTICS MARITIME e-COMMERCE<br />
Terminal operators seek total repair<br />
of port roads to save businesses<br />
...SIFAX says total reconstruction not palliative needed<br />
Stories by<br />
UZOAMAKA ANAGOR-EWUZIE<br />
Worried by<br />
the negative<br />
impact<br />
of the poor<br />
state of the<br />
roads leading to the Apapa<br />
and Tin-Can Island seaports,<br />
terminal operators and owners<br />
of container off-dock terminals,<br />
have again called on<br />
the Federal Government to<br />
intervene in repairing the<br />
roads to ease the suffering of<br />
port businesses within Apapa<br />
metropolis.<br />
According to them, the<br />
situation of the roads especially<br />
the Tin-Can and Coconut<br />
axis of the Apapa-Oshodi<br />
Expressway, has gone beyond<br />
the state of carrying out palliative,<br />
as the road now require<br />
total reconstruction to ease<br />
movement of cargo out from<br />
the ports.<br />
Oliver Omajuwa, general<br />
manager, SIFAX Off-Dock<br />
Limited, urged the Federal<br />
Government to urgently fix<br />
the road, saying that rehabilitation<br />
of the road has been<br />
necessary in order to save<br />
Cross section of <strong>2018</strong> INTELS WEPSS intakes.<br />
businesses from shutting<br />
down due to the deplorable<br />
state of the Tin Can–Coconut<br />
port access road.<br />
Omajuwa, who made<br />
the appeal in a statement<br />
issued at the weekend on<br />
the back of the on-going palliative<br />
measures currently<br />
embarked upon by different<br />
stakeholders, said that the<br />
situation of the road has<br />
gone beyond palliatives.<br />
He noted that with the<br />
early rains coming in <strong>Feb</strong>ruary,<br />
gives clear indication that<br />
<strong>2018</strong> might likely be a year of<br />
INTELS to train 125 women in <strong>2018</strong><br />
WEPSS empowerment programme<br />
As part of its corporate<br />
social responsibility<br />
(CSR), INTELS Nigeria<br />
Limited has admitted<br />
125 persons to take part<br />
in this year’s Women Empowerment<br />
Programme Synergy<br />
Scheme (WEPSS).<br />
WEPSS was established in<br />
2013 with the vision of empowering<br />
5,000 community women<br />
over a 20-year period through<br />
training in fashion design and<br />
tailoring. To date, more than 500<br />
several women have been empowered<br />
through the project.<br />
Silvano Bellinato, director<br />
of INTELS Nigeria Limited,<br />
said recently that the company<br />
ENL Consortium Nigeria<br />
Limited, the<br />
operator of Terminals<br />
C and D of the<br />
Lagos Port Complex Apapa,<br />
has emerged the Most Outstanding<br />
Maritime Operator<br />
of the Year 2017, at the Independent<br />
Awards organised<br />
by Independent Newspapers<br />
at the weekend.<br />
The award was in addition<br />
to similar honour<br />
bestowed on the company<br />
when it won the Port and<br />
Container Terminal Development<br />
Award at the prestigious<br />
Seatrade International<br />
Award held in Dubai, United<br />
Arab Emirates.<br />
Vicky Haastrup, executive<br />
vice chairman/CEO of ENL<br />
Consortium, who dedicated<br />
the award to “all the hardworking<br />
management and<br />
staff” of the company, said<br />
that all hands must be on<br />
deck to promote the development<br />
of the maritime sector.<br />
Haastrup, who doubles<br />
as the chairman of Seaport<br />
Terminal Operators Association<br />
of Nigeria (STOAN),<br />
said ENL Consortium has<br />
made substantial investment<br />
in human and materemains<br />
resolute in enhancing<br />
the lives of people in its area of<br />
operation and commitment to<br />
the development of communities<br />
in the area.<br />
He said that INTELS has<br />
acquired and made available<br />
over 300 specialised sewing machines<br />
and built a 5000-square<br />
metres garment manufacturing<br />
factory at the Federal Lighter<br />
Terminal, Onne for the purpose<br />
of the training.<br />
At the commencement of<br />
this year’s training session in<br />
Onne last week, Abhina Ajmani,<br />
head of WEPSS, said that the<br />
training is held once every six<br />
months and this year marks the<br />
fifth session.<br />
According to him, about 700<br />
women applied for admission<br />
into the <strong>2018</strong> programme, who<br />
were mostly WASSCE holders<br />
but only 125 were admitted.<br />
“This training is free and<br />
lasts for four months per set.<br />
Everything has been done to<br />
ensure the beneficiaries give<br />
their full commitment to acquiring<br />
skills that will empower<br />
them for life,” he said.<br />
Dorothy Egbe, a 2016 beneficiary<br />
and graduate of WEPSS,<br />
said the programme was transforming<br />
the lives of women in<br />
Rivers State. “WEPSS has been<br />
of great help to me. I learnt new<br />
skills and acquire an industrial<br />
sewing machine at no cost. I<br />
now sew clothes for myself, my<br />
family and friends.<br />
“I am still in my final year in<br />
school. After I am done with my<br />
studies, I plan to start sewing full<br />
time, on a commercial scale. I<br />
am equally improving on what<br />
I was taught, learning how to<br />
make designs. I intend to direct<br />
my focus on sewing women and<br />
children’s clothes,” she added.<br />
heavy rains, with devastating<br />
effects on businesses operating<br />
in the axis as well as other<br />
road users.<br />
“With the deplorable state<br />
of the Tin-Can and Coconut<br />
axis of the Apapa-Oshodi<br />
Expressway, there has been<br />
tremendous delay in container<br />
transfers from various<br />
ports. This has resulted in loss<br />
of revenue as the off-dock<br />
operators cannot charge client<br />
until containers are successfully<br />
received at their<br />
terminals,” he said.<br />
According to him, for every<br />
day containers were delayed<br />
due to the bad access<br />
road, bonded terminals operating<br />
around lose revenue<br />
in storage, idle man-hour,<br />
electricity wastage because<br />
the terminals must be powered<br />
whether the containers<br />
come in or not and pay<br />
overtime and inconvenience<br />
allowances to staff as well as<br />
other cost.<br />
Omajuwa said that the<br />
road situation poses very<br />
difficult time for businesses<br />
located around the Coconut<br />
axis as their bottom line was<br />
eroded with various interventions<br />
on the road.<br />
He explained that once<br />
every two weeks, companies<br />
like SIFAX provides its<br />
own palliative on the road<br />
by filling some bad portions<br />
at Coconut and Sunrise axis<br />
with about 50 truck-loads of<br />
hardcore stones.<br />
“Sometimes when container-laden<br />
trucks were stuck<br />
in the craters on the road, the<br />
company moves out its equipment<br />
such as reach stackers<br />
and others to salvage the situation.<br />
The palliative measures<br />
embarked upon by stakeholders,<br />
whose businesses<br />
are located around the axis<br />
is not moving as expected,”<br />
he added.<br />
Omajuwa said that the<br />
road, which is in terrible state,<br />
has become a threat to the existence<br />
of businesses around<br />
Coconut area. “Though the<br />
government has handed over<br />
the reconstruction of the<br />
road to Dangote Construction<br />
Company starting from<br />
Oworonshoki, we urge, as a<br />
matter of urgency, that the<br />
reconstruction of the stretch<br />
of road should start at the<br />
coconut axis.<br />
Vicky Haastrup<br />
“This has become necessary<br />
because when the rainy<br />
season comes, businesses<br />
will be forced to shut down<br />
and this would amount to<br />
revenue loss for the government<br />
and private companies<br />
while workers would also<br />
not be spared as job loss<br />
usually comes with failed<br />
businesses,” he said.<br />
Speaking at a different occasion<br />
at the weekend, Vicky<br />
Haastrup, executive vice<br />
chairman/CEO of ENL Consortium,<br />
said that despite the<br />
successes recorded by the<br />
Federal Government’s port<br />
concessioning programme,<br />
that the dilapidated state of<br />
the port access roads has<br />
remained challenging to port<br />
business.<br />
The major challenge facing<br />
terminal operators today<br />
is the dysfunctional state<br />
of the Wharf Road and the<br />
Apapa-Oshodi Expressway.<br />
These roads are the major<br />
arteries of both the Apapa<br />
and Tin-Can Island ports.<br />
If these roads are given due<br />
attention by government,<br />
Nigerians will enjoy more<br />
benefits of port concession,”<br />
she added.<br />
ENL Consortium emerges Maritime Operator of the Year<br />
rial resources to enable the<br />
country realise the benefits<br />
of port concession.<br />
“We have quality staff<br />
working with us and I am<br />
happy to dedicate this award<br />
to the hardworking, committed<br />
and patriotic staff of<br />
ENL Consortium, who works<br />
day and night to ensure that<br />
ships were promptly discharged<br />
and cargoes were<br />
delivered in good time to<br />
their owners.<br />
“When we came into the<br />
port in 2006, the terminals<br />
were at ground zero. Nothing<br />
was working. The equipment<br />
were not functional, there<br />
were endless ship queues<br />
even as touts called the shot.<br />
The morale of workers was<br />
at its lowest ebb,” Haastrup<br />
said.<br />
Haastrup also said that<br />
terminal operators have<br />
turned the story around with<br />
good conditions of service<br />
for dockworkers and modern<br />
cargo handling equipment<br />
to ensure that ships are discharged<br />
in good time.<br />
According to her, terminal<br />
operators embarked on massive<br />
civil engineering works<br />
to develop the terminals and<br />
raised operational standard<br />
to what is obtainable in the<br />
ports of advanced countries.<br />
“To put an end to touting,<br />
I personally led the<br />
battle against the category<br />
of people called ‘wharf rats’<br />
who were a menace to the<br />
system. Today, the terminal<br />
is professionally run. Things<br />
are working well inside the<br />
port and our country is the<br />
better for it,” she added.<br />
Ade Ogidan, managing<br />
director of Independent<br />
Newspapers, said the awards<br />
was organised to recognise<br />
and honour individuals and<br />
corporate organisations that<br />
have made significant contributions<br />
to nation development.
Wednesday <strong>28</strong> <strong>Feb</strong>ruary <strong>2018</strong><br />
20 BUSINESS DAY<br />
C002D5556<br />
RESEARCH<br />
&<br />
INSIGHT<br />
A WEEKLY PUBLICATION OF BUSINESSDAY RESEARCH & INTELLIGENCE UNIT(BRIU) research@businessdayonline.com 08106395676<br />
Why are non-performing loans high<br />
in oil and gas, 5 other sectors?<br />
TELIAT SULE<br />
Indications that the era of high<br />
NPL was back emerged in 2016<br />
when the industry non-performing<br />
loan(NPL) ratio rose<br />
to 12.8 percent, significantly<br />
higher than NPL ratio of 4.9 percent<br />
by the end of 2015. The industry<br />
benchmark is 5 percent. This is already<br />
having effects on the performance of<br />
the economy as by the end of 2017,<br />
credit to the private sector fell by 2.34<br />
percent, a signal that some sub sectors<br />
were starved of funds.<br />
While the investing public still<br />
awaits the audited reports of listed<br />
banks, information derived from the<br />
analysis of the third quarter unaudited<br />
reports of banks give us an idea of<br />
what to expect when those reports<br />
are out.<br />
The industry NPL as at the end<br />
of the third quarter of 2017 was still<br />
above the regulatory benchmark of<br />
5 percent. In particular, professional<br />
services recorded NPL as high as 90<br />
percent. Others sub sectors with high<br />
NPL include general commerce, 21<br />
percent; oil and gas, 32 percent; oil<br />
and gas upstream, 43 percent; oil and<br />
gas downstream, 18 percent; education,<br />
20 percent , and transport, 25<br />
percent.<br />
What factors are responsible for<br />
high NPLs?<br />
Through analysis, we have identified<br />
a number of factors responsible for<br />
high non-performing loans in certain<br />
sub sectors, and without addressing<br />
them, the era of high NPL may not be<br />
over soon.<br />
Fragile growth<br />
This concerns the general macroeconomic<br />
environment as the growth being<br />
witnessed now depends solely on<br />
improvement in the crude oil prices,<br />
meaning that it is not driving by improvement<br />
in manufacturing activities<br />
and significant earnings from the<br />
export non-oil products. Growth in<br />
some of the sub sectors was negative<br />
as at the end of the third quarter 2017.<br />
Year-on-year, the coal mining sub sector<br />
posted negative 38 percent growth<br />
even when its entire sector, the mining<br />
and quarrying, grew by 25 percent.<br />
Also, economic activities in the entire<br />
manufacturing sector declined by 3<br />
percent. But, the impact was more<br />
felt in oil refining whose activities<br />
Source: Banks’ audited reports 2015 & 2016<br />
Source: Banks’ unaudited third quarter reports 2017<br />
declined by 45 percent just as those<br />
firms in cement manufacturing had<br />
their sub sectoral activities reduced by<br />
5 percent. Besides, motor vehicles and<br />
assembly recorded lower economic<br />
activities to the tune of 21 percent<br />
while other manufacturing activities<br />
were down by 10 percent.<br />
In the entire transport and storage<br />
sub sector, growth was lower by 6<br />
percent. While there was stagnation in<br />
growth in rail, air and water, economic<br />
activities in road transport was lower<br />
by 6 percent.<br />
Furthermore, economic activities<br />
in the telecommunications and<br />
information services fell by 6 percent.<br />
Other sub sectors with lower economic<br />
activities include financial institutions,<br />
-7 percent; insurance, -2%;<br />
professional, scientific and technical<br />
services, -1 percent; and education,<br />
-1 percent.<br />
Rising unemployment rate<br />
For sub sectors such as education<br />
and general commerce, the rising<br />
unemployment rate contributed to<br />
the high NPL in those sectors. In 2017,<br />
the nation’s unemployment rate rose<br />
from 14.4 percent in the first quarter<br />
of 2017 to 18.8 percent by September<br />
of last year. Many Nigerians lost their<br />
jobs and that impaired the ability of<br />
families to pay children’s school fees,<br />
which in turn affected the capacity<br />
of private schools to service their<br />
facilities.<br />
According to the National Bureau<br />
of Statistics (NBS), enrolments in private<br />
secondary schools in the country<br />
in 2016 declined by 512,547 students<br />
in both junior and secondary school<br />
categories. Particularly in 2015, there<br />
were 1.375 million students in the junior<br />
private secondary schools across<br />
the country but the enrolment rate<br />
fell by 24 percent or a total of 323,469<br />
students withdrew from private secondary<br />
schools bringing the total<br />
enrolments to 1.051 million students<br />
in 2016. The breakdown shows that in<br />
the senior private secondary schools,<br />
enrolments declined by 17 percent to<br />
911,561 students across the federation<br />
in 2016 from 1.1 million students in<br />
2015. The problem was further aggravated<br />
by the inability of some state<br />
governments to pay workers’ salaries<br />
particularly in states that have large<br />
public sector base.<br />
High oil prices, subsidy and naira<br />
devaluation<br />
Crude oil prices have risen by over<br />
60 percent from $40.23 a barrel on<br />
May 10, 2016 to $64.47 a barrel on<br />
December 29,2017. This has fundamentally<br />
changed the downstream<br />
sector which is not allowed to be<br />
controlled by market forces. In effect,<br />
the landing cost of the premium motor<br />
spirit (PMS) now stands at N171 per<br />
litre. With retail price at N145/litre, it<br />
means there is a subsidy of N26 a litre<br />
on fuel. This has made subsidy arrears<br />
accumulated to the tune of N800 billion.<br />
The high NPL in the downstream<br />
is attributed to the non-payment of<br />
subsidy to petroleum marketers.<br />
“Most of the NPLs in the oil and<br />
gas downstream sector are due to the<br />
non-payment of subsidies to petroleum<br />
marketers”, Abiola Rasak, head,<br />
Investor relations, the United Bank for<br />
Africa (UBA), said.<br />
Findings also show that the devaluation<br />
of the naira aggravated the NPL<br />
imbroglio. This was because many<br />
deals that were contracted and which<br />
were viable at N199/$ became unprofitable<br />
at N400/$.<br />
“At that time, investors had to<br />
look for forex partly from the CBN<br />
and parallel market where the rate<br />
of exchange was about N450/$, as a<br />
result, some projects became unprofitable,<br />
and that impaired the ability of<br />
businesses to service their facilities”,<br />
Rasak, added.<br />
The transport sector was particularly<br />
hit by the exchange rate devaluation.<br />
The costs of vehicles and spare<br />
parts shot up as exchange rate was<br />
devalued. The immediate impact was<br />
that transporters could not service<br />
their vehicles and those who were in<br />
the process of importing new ones<br />
to expand their fleet were forced to<br />
look for more money. For instance,<br />
between 2015 and 2016, the number of<br />
number plates produced by the Federal<br />
Road Safety Commission (FRSC)<br />
fell by 27.2 percent from 573,069 to<br />
417,093, a clear pointer to the impact<br />
of exchange rate devaluation on the<br />
importation of vehicles.<br />
Cost of Capital higher than return<br />
on investment<br />
With the monetary policy rate (MPR)<br />
at 14 percent, banks could not afford<br />
to lend to customers below this level.<br />
For the better part of 2017, the average<br />
interest rate charged by banks was 27<br />
percent. The reality is that most of the<br />
sub sectors in question have the return<br />
on capital employed lower than the<br />
cost of capital. Consequently, businesses<br />
find it difficult to service their<br />
debts as at when due.<br />
“Those sectors having return on investment<br />
lower than the cost of capital<br />
will always have challenges servicing<br />
their facilities”, Kayode Tinuoye, head,<br />
research desk at United Capital, said.<br />
Governors’ reluctance to endorse<br />
letters of consent<br />
Every loan has collateral backing it<br />
up. In the event a loan goes bad, there<br />
are some documents to perfect before<br />
such assets will be disposed of and<br />
sometimes, the process requires getting<br />
the endorsement of the state governor.<br />
This has not been forthcoming.<br />
“As we speak now, my NPL is very<br />
high. I have been trying to get the<br />
consent of the governor to dispose of<br />
the assets used as collateral but that is<br />
not easy to get. Due to this realisation,<br />
even some profitable ventures will<br />
deliberately not service their loans’’,<br />
said a bank’s branch manager, who<br />
did want his name in print.<br />
Implications<br />
Shareholders to lose dividends:<br />
Late January, the Central Bank of<br />
Nigeria (CBN) while tacitly anticipating<br />
a high NPL era made a proactive<br />
move that would prevent dividend<br />
payment by banks with NPL above the<br />
regulatory benchmark. The circular<br />
reads thus:<br />
“DMBs and DHs that have a Composite<br />
Risk Rating (CRR) of “High” or<br />
a Non-Performing Loan (NPL) ratio of<br />
above 10% shall not be allowed to pay<br />
dividend. Also, DMBs and DHs that<br />
meet the minimum capital adequacy<br />
ratio but have a CRR of “Above Average”<br />
or an NPL ratio of more than 5%<br />
but less than 10% shall have dividend<br />
payout ratio of not more than 30%.<br />
“DMBs and DHs that have capital<br />
adequacy ratios of at least 3% above<br />
the minimum requirement, CRR of<br />
“Low” and NPL ratio of more than 5%<br />
but less than 10%, shall have dividend<br />
pay-out ratio of not more than 75%<br />
of profit after tax”, the CBN said in its<br />
circular.<br />
In 2015 financial year, the banking<br />
sub sector paid N274.03 billion<br />
as dividend. However, dividend payment<br />
in 2016 declined by 43 percent<br />
to N156.41 billion. With the CBN<br />
circular, dividend payment by banks<br />
may fall further, translating to a loss<br />
of dividend income for shareholders.<br />
Fragile growth will remain for a<br />
while<br />
Banks have already designated some<br />
sectors as high risk, implying that<br />
players in those sectors may not get<br />
the amount of facilities they need<br />
to break even. As a result, economic<br />
growth may remain fragile for a while.
PRIVATEEQUITY<br />
& FUNDRAISING<br />
Wednesday <strong>28</strong> <strong>Feb</strong>ruary <strong>2018</strong><br />
Japual extends winning streak as<br />
stock makes biggest gain in 4yrs<br />
LOLADE AKINMURELE<br />
The share price of<br />
Japaul Oil & Maritime<br />
Services Plc, a<br />
Nigerian oil-services<br />
company, has rallied<br />
since it disclosed an agreement<br />
with private equity firm Milost<br />
Global Inc. for $350 million<br />
(N90 billion using N360/$) in<br />
shares and loans for business<br />
expansion.<br />
Japaul rose 9.52 percent to<br />
N0.46 Monday, according to<br />
Bloomberg data, its biggest gain<br />
since June 2014.<br />
Milost will invest $250 million<br />
in equity and add another $100<br />
million in convertible loans, Japaul<br />
Chairman, Jegede Paul, told<br />
reporters last week. The fresh<br />
injection of capital will enable<br />
the company to fix grounded<br />
vessels, finance new contracts<br />
and expand into mining, he said.<br />
Considering Japaul’s market<br />
capitalisation is just N2.8 billion,<br />
the N90 billion credit line offered<br />
by Milost has raised a few eyebrows.<br />
Two calls seeking clarification<br />
from Akinloye Oladapo,<br />
WORD OF<br />
THE WEEK<br />
Japaul’s managing director, on<br />
Monday were not answered.<br />
Japaul’s oil and gas operations<br />
suffered a setback with the 2014<br />
plunge in crude prices, which<br />
forced exploration and production<br />
companies to scale back<br />
their activities.<br />
As prices are recovering, the<br />
company wants to take advan-<br />
C002D5556<br />
tage of new business opportunities<br />
in the industry. The company<br />
plans to be able to absorb<br />
future oil and gas price shocks by<br />
diversifying into mining.<br />
ROUND:<br />
A ROUND a financing event whereby professional investors such as venture capitalists invest additional<br />
funds in a company that was previously financed by founders. The “A” is from Series “A” Preferred stock.<br />
After the “A” round of financing; subsequent rounds are called “B”, “C”, and so on.<br />
BUSINESS DAY<br />
Companies&Markets<br />
Nigeria’s largest maize<br />
farm attracts 20%<br />
equity investment<br />
JOSEPHINE OKOJIE<br />
Through a firm called Babban<br />
Gona, Kola Masha the MIT<br />
trained former technical assistant<br />
to an ex-agric minister is now the<br />
largest aggregator of maize in Nigeria.<br />
The firm which currently works<br />
with 18,000 farmers in Katsina, Kaduna<br />
and Kano, has attracted a 20<br />
percent equity investment from the<br />
Bill and Melinda Gates foundation for<br />
expansion, <strong>BusinessDay</strong> has gathered.<br />
The investment which is aimed at<br />
improving farmers income will help<br />
Babban Gona upscale its number of<br />
smallholder farmers from 18,000 to<br />
40,000 before the end of <strong>2018</strong> and<br />
boost the country’s local maize production.<br />
“The investment from the Bill<br />
and Melinda Gates foundation has<br />
been instrumental in catalysing our<br />
investments and our growth and we<br />
expect this investment will enable us<br />
reach our target of 1 million farmers<br />
by 2025,” Masha, managing director,<br />
Babban Gona told <strong>BusinessDay</strong>.<br />
“The investment is a key part that<br />
has enabled us to grow by six folds<br />
and also increase our number of<br />
farmers by six folds. We have been<br />
very fortunate to have a great partner<br />
like the Gates foundation with us,”<br />
Masha said.<br />
Goodwell acquire minority<br />
stake in Microfinance<br />
Bank Oradian<br />
DAVID IBEMERE<br />
Goodwell Investments has<br />
acquired a minority equity<br />
stake in Oradian, one of the<br />
world’s fastest growing providers<br />
of digital solutions for financial<br />
institutions in frontier markets.<br />
Oradian is based in Zagreb<br />
(Croatia) with offices in Lagos (Nigeria)<br />
and Manila (Philippines).<br />
The amount of the deal was not<br />
disclosed.<br />
The investment will allow Oradian<br />
to grow its business across<br />
Africa and strengthen its commercial<br />
teams.<br />
The investment will be made<br />
from Goodwell’s UMUNTHU<br />
fund, which participates in the inclusive<br />
economy through the provision<br />
of risk capital and hands-on<br />
support to local entrepreneurs and<br />
institutions in Sub-Saharan Africa.<br />
Oradian provides microfinance<br />
institutions (MFIs) with Instafin,<br />
a cloud-based core banking platform<br />
to reach more clients in some<br />
of the most remote, hard-to-reach<br />
communities. Since signing its first<br />
customer in northern Nigeria in<br />
2013, the company has expanded<br />
to more than fifty financial institutions<br />
in seven countries, including<br />
Ghana serving one million endclients.<br />
Goodwell Investments acquisition<br />
of a minority equity stake in<br />
the company, will allow Oradian to<br />
grow its business across Africa and<br />
strengthen its commercial teams.<br />
<strong>BusinessDay</strong> PRIVATE EQUITY & FUNDRAISING (Team lead: LOLADE AKINMURELE - Analysts: MICHEAL ANI, DIPO OLADEHINDE, ENDURANCE OKAFOR, DAVID IBEMERE ... Graphics: DAVID OGAR )<br />
Businessday’s Private Equity and Fundraising section is a weekly publication that provides in-depth analysis on private equity trends and tracks deal activity in Nigeria.<br />
Email the PE & F team loladeakinmurele@gmail.com<br />
Continues on page 34<br />
21
C002D5556<br />
22 BUSINESS DAY Wednesday <strong>28</strong> <strong>Feb</strong>ruary <strong>2018</strong><br />
In association with<br />
ag@businessdayonline.com<br />
Low quality seeds hurt Nigeria’s cotton production<br />
JOSEPHINE OKOJIE<br />
Nigerian cotton<br />
farmers have<br />
identified poor<br />
seed as the major<br />
challenge facing the<br />
cultivation of crop efforts and<br />
reducing their yield per hectare.<br />
Access to adequate, secured<br />
and timely supply of quality cotton<br />
seeds is a major hurdle on the<br />
nation’s quest to return to its<br />
heydays when cotton was a major<br />
export cash crop.<br />
Despite efforts of successive<br />
governments to give farmers<br />
access to improved seeds and<br />
seedlings, farmers are still unable<br />
to get access to good and quality<br />
seeds.<br />
“A lot of farmers are abandoning<br />
their farms because they do not<br />
have enough seeds to plant.<br />
Majority of the cotton seeds in the<br />
market are of low quality,” Anibe<br />
Achimugu, president, National<br />
Cotton Association of Nigeria<br />
(NACOTAN) told <strong>BusinessDay</strong> in<br />
a telephone interview.<br />
“There is also no adequate<br />
access to finance for cotton farmers<br />
and when most of the funds come,<br />
it normally gets to the farmers late<br />
and the planting of cotton is at a<br />
particular season,” Achimugu said.<br />
Cotton production in the<br />
country is fast on the decline as<br />
most farmers are abandoning<br />
farming cotton and moving to<br />
other crops as the production is<br />
no longer attractive.<br />
Cotton which used to be one of<br />
Nigeria’s major cash crops in the<br />
80’s was not even among the top 15<br />
agricultural commodities exported<br />
in 2016, data from the National<br />
Bureau of Statistics shows.<br />
“A lot of farmers are no longer<br />
growing cotton because of low<br />
patronage and lack of inputs.<br />
The inputs we get from the<br />
government usually come very<br />
late. When you delay in planting<br />
cotton, it affects the productivity,”<br />
said Abubakar Shiyaki, a cotton<br />
farmer in Niger state.<br />
“When we buy our seeds<br />
ourselves, we only buy low quality<br />
seeds. As a result of all these<br />
challenges, a lot of farmers growing<br />
cotton are now growing other crops<br />
because they cannot break-even<br />
with cotton,” Shiyaki said.<br />
This is the case of many cotton<br />
farmers across the country. The<br />
number of seed companies in the<br />
country increased from five in<br />
2011 to about 80 seeds companies’<br />
today yet, most of the hybrid seeds<br />
in the country are not viable and<br />
are of low quality.<br />
“The issue of seeds in the<br />
country is that farmers are not<br />
informed and they don’t know<br />
where to get these quality seeds<br />
from. Extension service agents<br />
that are supposed to educate and<br />
inform farmers hardly visit their<br />
farmlands,” said Afioluwa Mogaji,<br />
chief executive officer, X-RAY<br />
Farms.<br />
According to stakeholders, the<br />
closure of most textile companies<br />
in the country led to the low<br />
patronage of cotton from farmers<br />
which have made cotton farming<br />
less attractive for them.<br />
Nigeria’s cotton production is<br />
put at 51,000 metric tonnes on<br />
253,000 hectares with average<br />
yield of 202kg per hectare, while<br />
global cotton consumption is<br />
put at 24 million metric tonnes,<br />
according to the International<br />
Cotton Advisory Committee<br />
(ICAC) 2016 data.<br />
Salmanu Abdullahi, chairman,<br />
Ginners Association of Nigeria,<br />
said “the total collapse of cotton<br />
production was as a result of<br />
government neglect of agriculture.<br />
We however believe that things<br />
would be different now that there<br />
is renewed commitment to the<br />
sector.<br />
“Government needs to also<br />
address the issue of seeds, so that<br />
farmers can improve their yields,”<br />
said Abdullahi.<br />
Stakeholders have blamed the<br />
failure to increase cotton output on<br />
ineffective government structures<br />
that do not allow effective and<br />
efficient translation of technology<br />
between research institutes and<br />
cotton farmers.<br />
Ibrahim Umar Abubakar,<br />
director, Institute for Agricultural<br />
Research (IAR) Zaria said, “the<br />
failure of extension service delivery<br />
in the country has contributed<br />
to the failure of cotton farmers.<br />
Farmers need to be trained on good<br />
handling practice, modern farming<br />
techniques and technology.<br />
Stakeholders canvass for technology<br />
to boost agric productivity<br />
JOSEPHINE OKOJIE<br />
Stakeholders in the<br />
agricultural sector are<br />
canvassing for improved<br />
technology and innovation<br />
in the sector to boost farmers’<br />
productivity.<br />
The stakeholders who spoke<br />
during the recent agric social media<br />
week, organised by Cooperate<br />
Farmers International and the<br />
International Institute of Tropical<br />
Agriculture (IITA) express optimism<br />
that with modern technology in<br />
the sector, agriculture would drive<br />
economic growth.<br />
Woke Ogunlade, co-founder<br />
and chief marketing officer, Probity<br />
Farms said that the country’s ability<br />
to improve the quality of its seeds<br />
and seedlings depended on the level<br />
of technology in the sector, saying<br />
that lack innovation is fast slowing<br />
the growth that would have been<br />
recorded in the sector.<br />
“Farmers need to start enhancing<br />
technology in various aspects of<br />
farm work to improve quality and<br />
quantity of yields,” Ogunlade said.<br />
He said lack of technology in<br />
the sector for farmers has made it<br />
complex for financial institutions<br />
to properly evaluate production,<br />
making it difficult to finance farming<br />
projects.<br />
Halina Apaila, country<br />
representative of Digital African<br />
Woman said that farmers need to<br />
be trained on technological tools to<br />
make them adopt innovative ways<br />
in farming and marketing strategy.<br />
Apaila noted that when Nigerian<br />
farmers embrace technology, they<br />
would be able to access international<br />
engagements and investments,<br />
noting that it has been the major focus<br />
of her organisation to train farmers<br />
on modern farming technology.<br />
“Digital African Woman gives<br />
a platform for training with<br />
technological tools to improve<br />
ideas, seeds marketing, website<br />
developments and engagements for<br />
international investors,” she said.<br />
Also speaking during the event,<br />
Akin Alabi, co-partner, CFI, said that<br />
since the country’s agriculture is<br />
becoming more vibrant, technology<br />
and digitalisation are inevitable.<br />
“Farmers need mechanisation<br />
and innovation to boost productivity<br />
if we are to feed ourselves as a<br />
nation,” Alabi said.<br />
Lack of technology has continued<br />
to limit the capacity of farmers<br />
to expand their cultivation areas,<br />
perform timely farming operations<br />
and achieve economies of scale in<br />
food production, stakeholders say.<br />
Nigeria is populated by 182<br />
million people who must be fed with<br />
staple foods ranging from yams,<br />
rice, cassava to beans, bananas and<br />
tomatoes.<br />
However, there is still much<br />
demand-supply gap in most of the<br />
staple foods, even as the population<br />
growth rate stands at 2.6 percent<br />
per annum.<br />
The stakeholders stated that for<br />
Nigeria to attain high level of food<br />
sufficiency and reduce dependency<br />
on food imports, it has to adopt<br />
technology and innovation in its<br />
food production.<br />
Available statistics show<br />
that Nigeria is one of the least<br />
mechanised farming countries in<br />
the world with the country’s tractor<br />
density put at 0.27 hp/ hectare<br />
which is far below the Food and<br />
Agriculture Organisation (FAO)’s<br />
1.5hp/hectare recommended<br />
tractor density.<br />
IAR&T partners Reps to train<br />
youths in poultry production<br />
AKINREMI FEYISIPO, IBADAN<br />
Th e Institute of<br />
Agricultural Research<br />
and Training (IAR&T)<br />
Ibadan in conjunction<br />
with House of Representatives<br />
committee on agriculture, have<br />
trained 147 students from colleges<br />
and institutions in the city in both<br />
poultry and piggery production.<br />
The training which held at<br />
I.A.R&T Ibadan was organised by<br />
the committee headed by Linus<br />
Okorie in collaboration with<br />
IAR&T and Bora Agro Nigeria<br />
Limited. It had youths drawn<br />
from Oyo, Ogun, Lagos, Ekiti and<br />
Ebonyi states respectively.<br />
Speakers and organisers of the<br />
intensive training said it was put<br />
together to improve both poultry<br />
and piggery production in the<br />
country.<br />
In his address, James Adediran,<br />
executive director, IAR&T, at<br />
the training tagged, “Training<br />
and Empowerment of Youth on<br />
Poultry and Piggery Production,<br />
Processing and Marketing’<br />
maintained that poultry and<br />
piggery production are one of<br />
the important sub-sectors of the<br />
livestock industry in Nigeria.<br />
Adediran, stated that poultry<br />
and piggery production, if given<br />
proper attention, would go a long<br />
way in reducing the problem of<br />
malnutrition associated with low<br />
animal protein intake among<br />
Nigerians.<br />
He added that apart from this,<br />
improved poultry production and<br />
piggery will also contribute to the<br />
Gross Domestic Product (GDP)<br />
of Nigeria, and reduce the rate of<br />
unemployment in the country.<br />
Ayodele Adegbite, executive<br />
director IAR&T who spoke through<br />
the deputy director of the institute,<br />
said “the workshop is timely and in<br />
line with the Federal Government<br />
initiative of empowering the youth<br />
to reduce the unemployment<br />
crisis in Nigeria through poultry<br />
production.”<br />
“You are all aware that<br />
poultry production and piggery<br />
production in Nigeria is an<br />
important sub - sector of the<br />
livestock industry and the most<br />
practiced of all other livestock<br />
enterprise. It has contributed and<br />
is still contributing to the income<br />
of resource poor smallholder<br />
farmers,” he added.
Wednesday <strong>28</strong> <strong>Feb</strong>ruary <strong>2018</strong> C002D5556<br />
BUSINESS DAY 23<br />
ag@businessdayonline.com<br />
Farm to School Africa trains 1,800 students in agriculture<br />
…create interest in sustainable farming<br />
JOSEPHINE OKOJIE<br />
In line with the Federal<br />
Government efforts to<br />
make agriculture attractive<br />
to youths and drive their<br />
involvement, Farm to School<br />
Africa has trained a total 1, 800<br />
students across five secondary<br />
schools in Akure, Ondo state.<br />
The Farm to School Africa is an<br />
initiative of Springboard Nigeria,<br />
which was setup to help build<br />
the interest of young people in<br />
agriculture through training and<br />
establishment of farms in schools,<br />
thereby creating and nurturing<br />
interest in sustainable farming.<br />
The students were trained in<br />
various aspects of agriculture such<br />
as poultry, seeds and seedling<br />
multiplication and crop production.<br />
“The Farm to School program is<br />
to help build the interest of young<br />
people in agriculture to want to<br />
study it in the university and take<br />
it up as a career after graduation,”<br />
Lawrence Alaba Afere, founder and<br />
CEO of Springboard Nigeria, said<br />
during the launch of the project at<br />
Oyemekun Grammar School, Akure,<br />
Ondo state.<br />
“A lot of young people do not<br />
want to take up agriculture as a<br />
profession because they do not<br />
understand the business aspect of<br />
agriculture.<br />
Lawrence Alaba Afere, founder and CEO of Springboard Nigeria and Oladapo Babasola Adeniyan, program manager,<br />
Ondo Agricultural Development Program (ADP) during the unveiling of the mini tractors for the student farms under the<br />
Farm to School Africa initiative.<br />
“So the Farm to School initiative<br />
is catching them young at the<br />
secondary school level and training<br />
them on agriculture as a business,”<br />
Afere said.<br />
He stated that the initiative is<br />
being sponsored by the Mitsubishi<br />
Corporation Fund for Europe and<br />
Africa and that the organisation is<br />
working in partnership with the<br />
Ondo state ministry of agriculture<br />
and education on the program.<br />
Afere noted that with the support<br />
of the state ministry of agriculture<br />
and rural development, agricultural<br />
science teachers in the schools are<br />
trained by extension officers to serve<br />
as trainers within the schools for<br />
students.<br />
“By this we are building<br />
a sustainable network of agric<br />
educators,” he said.<br />
He added that the initiative will<br />
be replicated in other schools across<br />
the state.<br />
Also speaking with <strong>BusinessDay</strong><br />
during the launch, Jemimah<br />
Ibitokun, project coordinator, Farm<br />
to School Africa, said that with the<br />
training and the involvement of the<br />
students in the entire process of<br />
farming, their interest in agriculture<br />
will increase.<br />
“If we monitor them well and<br />
closely we would have about 70<br />
percent of them applying to study<br />
agriculture in the university not<br />
because it was the course giving to<br />
them by the school,” Ibitokun said.<br />
Steven Temitope Ojo, prinicipal,<br />
Oyemekun Grammar School, said<br />
that the program would help the<br />
country and Ondo state in particular<br />
address the issue of unemployment,<br />
as the students have seen how<br />
profitable farming can be, saying<br />
that it will encourage many of them<br />
take it up as a career instead of<br />
searching for jobs.<br />
“The program will equip the<br />
students for the future as they would<br />
be trained on various aspect of<br />
agriculture which they can take up<br />
as a profession after their university<br />
education,” Ojo said.<br />
Amo Group honours Toromade<br />
Amo Group of companies,<br />
Nigeria’s second largest<br />
integrated poultry farm<br />
has commended the<br />
efforts Francis Toromade, the<br />
immediate past group head-policy<br />
and strategy, of the organisation<br />
for his selfless and meritorious<br />
service.<br />
Ayoola Oduntan, managing<br />
director, AMO Group, commended<br />
Toromade for his efforts towards<br />
the development of the company,<br />
adding that the history of the<br />
organisation will not be complete<br />
without the mention of his<br />
immense contributions.<br />
“His contributions towards<br />
the development of the company<br />
cannot be overemphasized. As a<br />
matter of fact, the history of our<br />
company will not be complete<br />
without the mention of his effort,”<br />
Oduntan said during a send-forth<br />
party organised by the company<br />
for Toromade.<br />
“He will be missed, and I wish<br />
him good success in his future<br />
plans,” he added.<br />
Many members of staff of Amo<br />
Ayoola Oduntan, group managing director, Amo Group (middle), flanked by<br />
Francis Toromade and his wife at the send forth party organised by the company<br />
in his honour.<br />
Group who spoke at the occasion<br />
all described Toromade as a role<br />
model, hardworking, energetic<br />
and a team player with a pleasant<br />
personality.<br />
In his response, Francis<br />
Toromode showered appreciation<br />
on the GMD for giving him the<br />
opportunity to serve in the<br />
organisation. “I wish to thank<br />
everyone for the love shown to<br />
me and my family. God called me<br />
to work with Ayoola Oduntan and<br />
when the time to leave came, God<br />
told me to move on.”<br />
“I am most especially grateful<br />
for the honour of naming the<br />
company’s feed mill after me. It<br />
goes a long way to show that my<br />
hard-work and contributions did<br />
not go unnoticed,” Toromade said.<br />
He affirmed that he is only<br />
retiring to re-fire, while adding<br />
that he is still so full of energy<br />
and that his best years are still<br />
to come.<br />
Toromade who recently retired<br />
from the company after spending<br />
many years as a top management<br />
staff served as General Manager,<br />
Sales and Marketing, for thirteen<br />
years at Amo Byng Nig Ltd.<br />
NIOMR empowers unemployed youths,<br />
women in aquaculture production<br />
BUNMI BAILEY<br />
The Nigerian Institute<br />
for Oceanography<br />
and Marine Research<br />
(NIOMR) has empowered<br />
50 unemployed youths and<br />
women in different aspects of<br />
fish farming to boost Nigeria’s<br />
local production in aquaculture.<br />
The training and empowerment<br />
program which runs for five<br />
days is targeted ensuring that<br />
the country meets its target of<br />
achieving self-sufficiency in fish<br />
production.<br />
According to NIMOR, the<br />
empowerment program is a<br />
constituency capital project by<br />
the House of Senate and House<br />
of Assembly and participants<br />
were selected across the country<br />
by both houses with 20 from the<br />
lower chamber and 30 from the<br />
senate. “We are conducting this<br />
empowerment program for the<br />
unemployed youths and women<br />
to make them self-employed and<br />
contribute to the food security in<br />
Nigeria”, Gbola Akande, CEO of<br />
NIMOR, said during the opening<br />
ceremony of the program.<br />
“For five days participants<br />
would be seriously trained in<br />
the processing, production,<br />
marketing and value addition<br />
in aquaculture production. The<br />
training will include 30 per cent<br />
lecture and 70 per cent will be<br />
practical.<br />
“Participants will also be<br />
monitored for five months after<br />
the training and after the five<br />
months period of monitoring,<br />
they should be able to produce<br />
enough fish. After the training<br />
participants will be given<br />
certificates which will help<br />
them to apply for opportunities”,<br />
Akande said.<br />
The CEO also said that after<br />
the training the participants will<br />
be given starter packs in order<br />
for them to start their own fish<br />
businesses. The starter packs<br />
includes key inputs for fish<br />
production such as fish feeds,<br />
medication and equipment<br />
among others.<br />
Data from the National Bureau<br />
of Statistics (NBS) in the last five<br />
years shows that the country’s fish<br />
production is gaining traction as<br />
aquaculture production increased<br />
by 43 percent within the period.<br />
Nigeria’s total annual fish<br />
demand is estimated at 3.5<br />
million metric tons (MT), while<br />
the country produces only 1.1<br />
million MT, leaving a gap of 2.4<br />
million MT annually, according to<br />
data obtained from the country’s<br />
Agricultural Ministry.<br />
Also speaking during the<br />
training, Patricia Amyanwu,<br />
director of research and<br />
coordinator of the program,<br />
NIMOR, said that the<br />
accommodation, food and<br />
transport allowance of the<br />
participants were being catered<br />
for by the government.
Wednessday <strong>28</strong> <strong>Feb</strong>ruary <strong>2018</strong><br />
24 BUSINESS DAY
BUSINESS DAY<br />
C002D5556<br />
DB Rail Academy<br />
starts Brazilian<br />
training programme<br />
Page 27<br />
Wednesday <strong>28</strong> <strong>Feb</strong>ruary <strong>2018</strong><br />
25<br />
‘Convincing Nigerians<br />
to embrace<br />
automotive policy<br />
was herculean’<br />
Canadian National<br />
railway plans record<br />
€C$2.08bn<br />
investment in <strong>2018</strong><br />
Page 26 Page 27<br />
Striking pictures<br />
of railways in<br />
Africa (1)<br />
Page 27<br />
Nissan reviews assembly operations in Nigeria<br />
… To provide expertise and technological advisory support<br />
Stories by MIKE OCHONMA<br />
As part of on-going appraisal<br />
of its vehicle<br />
assembly project in Nigeria,<br />
Nissan Motor Co.<br />
Ltd., last week deployed<br />
a high-powered delegation from its<br />
headquarters in Japan to discuss<br />
compelling strategies with the National<br />
Automotive Design and Development<br />
Council (NADDC).<br />
The strategies are aimed at expanding<br />
the capacity of the Nissan<br />
manufacturing facility to produce<br />
and supply affordably priced vehicles;<br />
create opportunity for workers<br />
as well as ancillary firms and the<br />
communities.<br />
Leader of the Nissan delegation,<br />
Peyman Kargar, Senior Vice President<br />
Middle-East, Africa and India<br />
(AMI) said: “Our visit to the Nissan<br />
facility in Nigeria is aimed at helping<br />
the plant to sustain its status as a<br />
reassuring brand with proclivity for<br />
improved performance, sales and<br />
after sales.”<br />
Also adding that the time is right<br />
for Nigeria to sustainably and inclusively<br />
explore the gains of automotive<br />
policy to produce vehicles with<br />
unprecedented value, yet affordably<br />
priced, Kargar said: “Nigeria is<br />
one of Nissan’s most outstanding<br />
markets in Africa growth strategy<br />
and we are ready to partner with<br />
the federal government to develop<br />
the market and explore the country’s<br />
strategic regional partners in<br />
the West Coast, to make Nigeria the<br />
automobile hub for evolving West<br />
African markets.”<br />
Nissan he noted remains committed<br />
to the Nigerian economy,<br />
which has a strong potential of becoming<br />
Africa’s wealthiest country.<br />
Kargar referred to Nigeria’s auto<br />
policy as exceptionally inclusive<br />
A<br />
new chapter was opend<br />
recently in Lagos, Nigeria’s<br />
commercial capital<br />
and home to highest number<br />
of vehicles in the country when<br />
Autofit Dunlop Express, an exquisite<br />
one-stop shop for auto<br />
maintenance and repairs opned<br />
its doors to the motoring public.<br />
He thanked their The centre was<br />
opened with the collaboration of<br />
its “technical partners; Garutech<br />
Ltd and Tyre Express Limited.<br />
Located at the Alapere axis of<br />
the Lagos-Ibadan road, the new<br />
facility is equipped with modern<br />
and millennium complaint facilities<br />
to meet the needs of individual<br />
and fleet owners.<br />
During the opening ceremony,<br />
Ayo Oludemi, managing director,<br />
Autofit Dunlop Express, declared<br />
that setting up the facility and<br />
throwing it open for business did<br />
not come that easy, but that despite<br />
all odds, the company kept<br />
L-R: Peyman Kargar, leader of Nissan delegation, Jelani Aliyu DG/CEO, National Automotive Design and Development Council (NADDC),<br />
Tokunbo Aromolaran, managing director of VON Automobile and Parvir Singh, Stallion NMN managing director during the tour of the<br />
Stallion NMN facility in Lagos recently.<br />
and thorough, one of the traits that<br />
inform Nissan’s eagerness to make<br />
a greater contribution in the Nigerian<br />
market.<br />
“We are happy to continue our<br />
collaboration with the government<br />
to transform Nigeria into a notable<br />
manufacturing and distribution<br />
hub,” he said.<br />
The six-man delegation was<br />
received by Jelani Aliyu, Director<br />
General/CEO of the National Automotiive<br />
Design and Development<br />
Council ( NADDC) before proceeding<br />
on to inspect the Stallion NMN<br />
facility at VON Automobile Nigeria.<br />
Local Nissan custodian - Stallion<br />
NMN, member of the Stallion<br />
Group became the first indigenous<br />
stakeholder in 2014 to roll-out locally<br />
assembled Nissan vehicles<br />
consequent upon the ratification<br />
of the National Automotive Policy,<br />
assembling four Nissan models including<br />
Patrol SUV, NP300, NV350<br />
and Almera.<br />
The company has since inaugurated<br />
11 Nissan dealerships across six<br />
geopolitical zones of the country, and<br />
achieved 10% market share in FY14<br />
and 18% market share in FY15 coupled<br />
with notable presence in Victoria<br />
Island and Gbagada Lagos as well as<br />
in Abuja and Port-Harcourt.<br />
Nissan seeks to continue to provide<br />
expertise and technological<br />
adivisory support to boost Nigeria’s<br />
economic diversification strategies,<br />
using the automotive sub-sector to<br />
achieve inclusive and shared growth.<br />
Stallion NMN Managing Director<br />
Pavir Singh said they are midful<br />
of the challenges of affordability,<br />
saying the company is keen on producing<br />
qualitative standard and affordably<br />
priced vehicles to cater for<br />
different spheres of needs.<br />
“We as manufacturers are willing<br />
to sign a Memorandum of<br />
Understanding with the federal<br />
government, making vehilces affordable<br />
for everyone. We have<br />
demonstarted the capacity of our<br />
plant, which can produce 100,000<br />
vehicles annually.<br />
“The auto industry worldwide<br />
contributes an average of 11.5 percent<br />
to the GDP of their respective<br />
countries and the same can be replicated<br />
here in Nigeria,” Singh assured.<br />
Other delegates include Mike<br />
Whitfield, Managing Director/<br />
CEO, Nissan South Africa, Xavier<br />
Gobille,Sales and Marketing Director,<br />
Jim Dando Sales and Operations<br />
as well as Africa, Middle East<br />
and India Managing Director Frederic<br />
Posez and Nissan Motor Co.,<br />
Ltd. Programme, Product, Marketing<br />
Intelligence General manager<br />
Vincent Valdmann.<br />
Autofit Dunlop Express Centre promises quality fitment, auto care<br />
L-R: Davidson Akhimien, national president, Association of Licensed Private Security Practitioners<br />
of Nigeria and chairman, (King David Security), Gbenga Emmanuel, GM, Autofit<br />
Maintenance Center, Ayo Oludemi, MD, Autofit Dunlop Express, Gautam Ghai, executive<br />
director, Tyre Express Nigeria Limited and Jair Uto-Dieu GM, Operations,Tyre Express<br />
Nigeria Limited at the opening of the Autofit Dunlop Express centre in Lagos recently<br />
moving ahead in its firm conviction<br />
that its customers deserve<br />
the best.<br />
Oludemi expressed satisfaction<br />
that Autofit Dunlop Express<br />
aligned Sumitomo Rubber Industry,<br />
South Africa, owners of<br />
the Dunlop brand and promoted<br />
in Nigeria by Tyre Express Limited<br />
to change the experience of buying<br />
tyres.<br />
“Furthermore, we also intend<br />
to have a skills acquisition centre<br />
for our youths, where they<br />
will equip themselves with various<br />
technical skills such as panel<br />
beating, spray painting, tyre and<br />
mechanical repair knowledge.<br />
He further disclosed that<br />
the vision of the partnership<br />
is to try and get the youths and<br />
eliminate the thoughts of going<br />
to countries like Libya in search<br />
of greener pastures. We want<br />
to make them believe there is<br />
hope in Nigeria and make them<br />
responsible citizens. Oludemi<br />
assured prospective customers<br />
that the outfit will not relent in<br />
providing the best services available”.<br />
Commenting on the auto experience<br />
centre, Jair Uto-Dieu<br />
said, “Tyre Express Nigeria Limited<br />
is the Dunlop Distributor<br />
for Nigeria, adding that “Tyre is<br />
a grudge-purchase, you only buy<br />
tyres when you must buy tyres, it<br />
is difficult to find somebody happy<br />
and anxious to buy tyres like<br />
Jag’s all-electric I-Pace<br />
front-row seats for<br />
global premiere<br />
Jaguar will livestream the global<br />
premiere of its first electric vehicle<br />
(EV), the I-Pace on Thursday,<br />
1 March, even as customers across<br />
the world have already pressed the<br />
‘I want one’ button on the Jaguar<br />
website, to register their interest in<br />
the hotly anticipated electric performance<br />
SUV.<br />
Jaguar is responding by hosting an<br />
online broadcast on its social channels,<br />
revealing I-Pace to the public<br />
and entire world. Specifications will<br />
be announced, and the configurator<br />
on the Jaguar website will offer consumers<br />
the option to configure their<br />
own.<br />
The is Jaguar’s newest member of<br />
the Pace family and is the EV drivers<br />
have been waiting for, delivering sustainable<br />
sports car performance, allwheel-drive<br />
agility and five-seat SUV<br />
practicality.<br />
In the words of Ian Callum, Jaguar<br />
Director of Design: “Since revealing<br />
the I-Pace Concept in 2016, we have<br />
been counting down to this moment.<br />
The all-electric model is not only a<br />
pioneer within our business, it promises<br />
to revolutionise the industry. I<br />
cannot wait for the world to see everything<br />
we have achieved with this car.”<br />
The I-Pace will be capable of rapid<br />
charging from zero to 80 per cent in<br />
45 minutes and has been rigorously<br />
tested across extremes of terrain and<br />
temperatures from -40°C to 40°C.<br />
With over 2.4 million test kilometres<br />
and a further 11,000 hours of rig<br />
simulations completed by more than<br />
200 production prototypes, Jaguar’s<br />
design and engineering teams have<br />
created a world-class all-electric SUV.<br />
The official public debut of I-PACE<br />
will be at the Geneva Motor Show on<br />
6 March.<br />
going to buy that dress, or suit or<br />
designer wristwatch.”<br />
“We make buying of tyres a<br />
comfortable experience as much<br />
as possible. In Nigeria today, we<br />
need a place where you are sure<br />
you can get original tyres at the<br />
best price without any doubt.” He<br />
stated.<br />
“As a company we aspire to be<br />
the preferred choice for tyre purchase.<br />
We endeavour to stock the<br />
complete range of tyres needed in<br />
the Nigerian market, while being<br />
competitively priced. Our trained<br />
staff will serve the needs of our<br />
customer with single-minded focus<br />
of “customer first”. He noted.<br />
In the words of Uto-Dieu, the<br />
new centre comes ultra-modern<br />
layout; clean and aesthetically<br />
appealing bays and lounge areas;<br />
comfortable rest rooms; branded<br />
products offering the best quality<br />
products across the PCR, 4×4 &<br />
Truck range.
Wednesday <strong>28</strong> <strong>Feb</strong>ruary <strong>2018</strong><br />
26 BUSINESS DAY<br />
C002D5556<br />
‘Convincing Nigerians to embrace<br />
automotive policy was herculean’<br />
Since the introduction in 2013 of the National Automotive Policy , which among other objectives, seeks to make Nigeria self-sustaining in local auto<br />
assembly, the move by the Federal Government has generated a lot of reactions. In this exclusive interview with MIKE OCHONMA, <strong>BusinessDay</strong>’s<br />
Motoring Editor in Abuja, LUQMAN MAMUDU, the immediate past Director of Policy and Planning in the National Automotive Design and Development<br />
Council (NADDC) who recently retired from the public civil service and is now CEO, Transtech Industrial Consulting Limited, took time to<br />
respond to salient issues concerning Nigeria’s local auto industry. He is an ISO certified quality systems auditor and Fellow of both the Institute of<br />
Professional Industrial Management Development and The Institute of Management Consultants.<br />
Projection of local<br />
assembly plants<br />
in Nigeria in the<br />
next five years<br />
The NAIDP became effective<br />
in 2014 due to certain delays<br />
arising from petitions after the<br />
first launch in October 2013.<br />
This means that as a 10-year<br />
program it is already halfway, or<br />
five years into its life.<br />
The expectation was that in<br />
the next five years leading up to<br />
2023, all the support programs<br />
or the five pillars would have<br />
been reasonably entrenched<br />
for a truly indigenous automotive<br />
sector with high local<br />
content, supported by a robust<br />
local components industry.<br />
The five pillars in the policy<br />
document are very comprehensive<br />
and well thought out.<br />
These are market development<br />
for the made or assembled<br />
in Nigeria automobile,<br />
standards and quality development,<br />
human capital development,<br />
industry infrastructure,<br />
and a dynamic fiscal<br />
policy environment. We shall<br />
reach our goals if these five elements<br />
are diligently pursued.<br />
The programs are clearly spelt<br />
out in the policy provisions.<br />
Challenging period as a top<br />
official of NADDC<br />
This is definitely the period<br />
between 1993 till 2013<br />
when we tried to get several<br />
regimes to adopt an automotive<br />
program but the challenge<br />
reached its height during<br />
the first two years of the program<br />
after government finally<br />
adopted it in 2013. All hell<br />
broke loose.<br />
The only people that wanted<br />
it were those that had acquired<br />
the defunct assembly<br />
Plants viz: PAN Kaduna,<br />
Stallion Group Lagos, Styr in<br />
Bauchi, NTM Kano, Leyland<br />
in Ibadan, ANAMMCO Enugu,<br />
Innoson Nnewi and Dunlop<br />
Tyres.<br />
Every other automotive<br />
dealer, including maritime organisations,<br />
politicians and all<br />
manner of automotive interest<br />
groups, fought tooth and nail<br />
to ensure that the policy didn’t<br />
see the light of day. These were<br />
indeed trying times.<br />
We had sleepless nights trying<br />
to convince everyone that it<br />
was for the overall good of the<br />
country. I am happy to say that<br />
Mamudu<br />
most of those against us then,<br />
are now quite active in the industry<br />
by way of assembly but<br />
we must continue to encourage<br />
them because the investment<br />
environment is still very challenging.<br />
What areas are the local<br />
auto plants lacking in readiness<br />
for the task ahead<br />
The assembly plants have<br />
signed very good technical support<br />
agreements with global<br />
original equipment manufacturers<br />
(OEMs) for full vehicle<br />
manufacturing but at the moment,<br />
most are only engaged in<br />
Semi Knocked Down Assembly<br />
(SKD).<br />
This is good for the host<br />
country for the development of<br />
its automotive industry because<br />
it is a good orientation for the<br />
operators in readiness for deeper<br />
activity but the OEM partners<br />
are definitely not enthusiastic<br />
about it.<br />
The reason is that it is like<br />
building a vehicle and then disassembling<br />
it to re-assemble in<br />
another country. It is expensive<br />
for them and in order to be<br />
competitive, they have to give<br />
good discounts to the Nigerian<br />
partners.<br />
Profit margins in automotive<br />
assembly are very thin. The rea-<br />
The five pillars in the<br />
policy document are<br />
very comprehensive<br />
and well thought<br />
out. These are market<br />
development for the<br />
made or assembled in<br />
Nigeria automobile,<br />
standards and quality<br />
development, human<br />
capital development,<br />
industry infrastructure,<br />
and a dynamic<br />
fiscal policy environment<br />
son they are involved include<br />
the NAIDP high tariff barrier<br />
and the good prospects of selling<br />
spare parts to support their<br />
products.<br />
OEMs really desire to set<br />
up Completely knocked Down<br />
(CKD) operations in Nigeria<br />
and will be happier if they can<br />
source part locally. Yes, No<br />
OEM will like to drag parts like<br />
seats, tyres, glass and batteries<br />
across thousands of miles, if<br />
they can find them locally on<br />
time at the right price and of<br />
global standard. This is what<br />
we all need. So my answer is<br />
that the assembly plants are<br />
ready. What they lack is the enabling<br />
environment and challenges<br />
posed by unnecessary<br />
bureaucracy. This thing is real,<br />
lets get real. There is no time<br />
for fancy stuff.<br />
Can Nigeria can achieve the<br />
10 year of NAIDP plan by<br />
2023<br />
Of course. The main milestone<br />
has been achieved. This<br />
is getting the OEMs to open<br />
a pipeline of investment in<br />
Nigeria. This they have done<br />
by signing very far reaching<br />
agreements with Nigeria’s automotive<br />
promoters, most of<br />
whom were former automotive<br />
dealers.<br />
Factories have been built,<br />
some leased long term and various<br />
contract assembly agreement<br />
signed. Installed capacity<br />
as at the last time we assessed<br />
the industry was above 500,000<br />
automobiles per annum although<br />
only about 10% of this<br />
was operational. The thing<br />
holding back capacity is the<br />
implementation of the five pillars<br />
of the automotive program<br />
which I earlier highlighted.<br />
Time is running out, we should<br />
try and implement these programs<br />
quickly to reach our objective<br />
in 2023.<br />
There should be a midterm<br />
review now, to examine challenges<br />
and forge the way forward.<br />
The investors and OEMs<br />
can run out of patience and the<br />
program will be doomed. This<br />
will make me very sad. I urge<br />
those in charge to please pay<br />
attention to these programs.<br />
We shall continue to provide<br />
advice on the side line.<br />
Recently, the CAC registered<br />
myself and a few friends of the<br />
industry as Resident Automotive<br />
Components Dealers Association<br />
of Nigeria (RACDAN).<br />
The organisation is a platform<br />
for standards in the automotive<br />
components sector.<br />
It will support dealerships<br />
and eventually backward integration<br />
into producing components,<br />
to serve the Nigeria<br />
Assembly Plants. We are at the<br />
moment networking with OEM<br />
components industries worldwide.<br />
I chair RACDAN.<br />
My consulting company<br />
Transtech Industrial Consulting<br />
Nigeria Limited is still very<br />
active in working with Nigerians<br />
to invest in automotive Assembly<br />
and Components manufacture.<br />
Right now, we are<br />
talking to major haulage and<br />
passenger companies to set up<br />
their brands and the reception<br />
is good.<br />
Serving under the NADDC<br />
at top management level<br />
It was a great feeling. I felt<br />
as if we were laying a foundation<br />
that those following would<br />
build on. The development of<br />
the auto industry is long term<br />
and we were already near<br />
our retirement at the time we<br />
found government acceptance<br />
and support for the industry.<br />
I think we laid the foundation<br />
and am very grateful for industry<br />
support as well.<br />
What other wrongs can you<br />
put right if given another<br />
opportunity?<br />
The policy and program<br />
was well thought out and we<br />
were all very determined to<br />
succeed but political will was<br />
lackadaisical and bureaucracy<br />
diminished most of our momentum...<br />
It’s not about what<br />
we did wrong.<br />
Where is Nigeria with auto<br />
component manufacturing<br />
companies?<br />
The automotive component<br />
industry is waiting to happen.<br />
We are not doing enough or<br />
fast enough to receive so much<br />
investment waiting to flow in.<br />
China, South Africa, including<br />
the Morocco components<br />
industry have variously indicated<br />
the desire to establish<br />
here in Nigeria. Usually they<br />
follow their OEMs wherever<br />
they go and the OEMs are here.<br />
We should hasten up with the<br />
supplier park projects.
Wednesday <strong>28</strong> <strong>Feb</strong>ruary <strong>2018</strong><br />
C002D5556<br />
BUSINESS DAY<br />
27<br />
Modern train hub underway for NRC district HQ<br />
Stories by MIKE OCHONMA<br />
As part of efforts to modernise<br />
Nigeria’s railways<br />
infrastructure, an<br />
international train station is in<br />
the pipelines the district head<br />
office to replace the old and<br />
fading structure used as the<br />
district head office.<br />
Recently, it was reported<br />
that about 150 houses occupied<br />
by staff of the Nigerian<br />
Railway Corporation (NRC),<br />
are also affected by the impending<br />
exercise. This also<br />
includes the railway district<br />
headquarters at Ebute Metta,<br />
in the Yaba area of Lagos.<br />
In the same vein, similar ultra-modern<br />
stations are being<br />
planned for Agbado, Oshodi,<br />
Ijoko, Agege and Ikeja where<br />
the structures housing the<br />
narrow gauge train stations<br />
had once stood.<br />
In Agege where one of the<br />
modern train stations is to be<br />
located, the proposed Agege<br />
rail station it was gathered<br />
is a just 20 metres away from<br />
the on-going Agege Flyover<br />
Bridge, being constructed by<br />
the Lagos state government.<br />
Houses pencilled down for<br />
demolition are located between<br />
Ebute Metta to Agege<br />
for the expansion of the Lagos-Ibadan<br />
standard gauge<br />
line as no fewer than 200<br />
houses occupying the right<br />
of way of the new rail line are<br />
currently being pulled down.<br />
This impending demolition<br />
is generating a lot of uneasy<br />
calm among the residents.<br />
NRC workers affected by<br />
the exercise have been given a<br />
three months deadline to relocate<br />
so as to allow for uninterrupted<br />
job progression along<br />
the corridor.<br />
Freight operator Canadian<br />
National Railway (CN)<br />
has announced a record<br />
C$3.2 billion (∼€2.08 billion)<br />
for major infrastructure projects<br />
in <strong>2018</strong> to meet a growing<br />
demand for rail freight.<br />
Luc Jobin, President and<br />
CEO said the programme will<br />
see CN invest more than it ever<br />
has before in network safety,<br />
efficiency and resiliency.<br />
For the third year running,<br />
CN plans to invest approximately<br />
C$1.6 billion (€1.04<br />
billion) on track and railway<br />
infrastructure maintenance,<br />
including the replacement of<br />
2.1 million rail ties and more<br />
than 600 miles of rail, plus<br />
work on bridges and other<br />
track maintenance.<br />
Approximately C$400 million<br />
(€260 million) is expected<br />
A very reliable source at<br />
the Nigerian Railway Corporation’s<br />
Headquarters in Oyingbo,<br />
who does not want to<br />
be mentioned, revealed.<br />
During one of his monthly<br />
visits to the Lagos-Ibadan<br />
railway projects sites along<br />
the corridor, Rotimi Amaechi,<br />
Minister of Transportation<br />
said that the Federal Government<br />
is committed to paying<br />
full compensation to owners<br />
of all affected structures along<br />
the project’s right of way, in<br />
order to reduce the pains of<br />
those whose only source of<br />
livelihood are being affected<br />
in the exercise.<br />
According to another<br />
source, “The Federal Government<br />
has ensured that full<br />
compensation was paid directly<br />
to those whose houses<br />
were being pulled down. This<br />
is to reduce the pain and assuage<br />
for the loss of their<br />
sources of livelihood, while<br />
staffs affected by the demolition<br />
have been told to look out<br />
for alternative accommodations”.<br />
The source who would not<br />
wanted the identity made<br />
public said that Nigerians<br />
would come to appreciate the<br />
beautiful stations that would<br />
replace these old edifices<br />
once they spring up at the designated<br />
railway stations.<br />
Another issue of very serious<br />
concern for the railway<br />
authorities is the influx of illegal<br />
traders on the rail tracks at<br />
Oyingbo, following their eviction<br />
from the market by the<br />
state government.<br />
The NRC is at a dilemma<br />
about the illegal squatters on<br />
the rail lines as they aware that<br />
their trading activity within<br />
the environs puts food on<br />
their table on a daily basis.<br />
At commencement of the<br />
Lagos-Ibadan rail project, the<br />
NRC, during a press briefing<br />
had said all properties within<br />
50 feet of the rail tracks will be<br />
demolished.<br />
NRC Fidet Okhiria, NRC<br />
managing director, any property<br />
within this range would<br />
be pulled down because the<br />
corporation did not grant the<br />
owners such lands for use.<br />
“We are going to demolish all<br />
properties within 50 feet of<br />
the rail lines because those<br />
properties are sitting on illegal<br />
space and land.<br />
He said this is except properties<br />
that were given out to<br />
owners by the corporation on<br />
lease, and such property owners<br />
must show us documents<br />
backing up their lease agreement<br />
with the NRC. “Aside<br />
this, every property within 50<br />
feet radius will have to give<br />
way to the Lagos-Ibadan railway<br />
expansion project,”.<br />
Canadian National railway plans record €C$2.08bn investment in <strong>2018</strong><br />
to be spent on equipment, including<br />
the acquisition of 60<br />
new GE locomotives in 2017<br />
as part of a three-year order of<br />
200 units.<br />
In addition, around C$400<br />
million (€260 million) is due<br />
to be spent in <strong>2018</strong> on the implementation<br />
of positive train<br />
control (PTC) along 3,500<br />
route miles of its network in<br />
the US. In total CN said it plans<br />
to invest US$1.4 billion (€1.12<br />
billion) on PTC by 2020.<br />
A further C$800 million<br />
(€521 million) will go towards<br />
initiatives to increase capacity<br />
and enable growth, such as<br />
track infrastructure expansion<br />
and in intermodal terminals,<br />
as well as on technology to<br />
improve safety performance,<br />
operational efficiency and customer<br />
service.<br />
Luc added: “These record<br />
investments, a substantial portion<br />
of which will go to new capacity<br />
and growth projects, will<br />
improve our network fluidity,<br />
allowing us to deliver superior<br />
service to meet our customers’<br />
growing freight volumes.”<br />
Local and global rail news as it breaks<br />
DB Rail Academy<br />
starts Brazilian<br />
training programme<br />
Working with local sector<br />
organisations, DB Engineering<br />
& Consulting has<br />
launched the country’s first internationally<br />
certified training programme<br />
for rail and logistics managers.<br />
Under the DB Rail Academy<br />
programme, an initial tranche of<br />
35 managers from rail freight and<br />
passenger operators began an<br />
18-month course in Brasilia on<br />
<strong>Feb</strong>ruary 19. The course is primarily<br />
aimed at companies which are<br />
members of the rail freight operators<br />
association ANTF or the passenger<br />
equivalent ANPTrilhos.<br />
Brazil’s National Transport<br />
Learning Service SEST SENAT has<br />
commissioned DB Engineering &<br />
Consulting to lead the programme<br />
under a long-term contract signed<br />
in December. The aim is to raise the<br />
general level of transport education<br />
to international standards and<br />
strengthen the competitiveness of<br />
Brazilian companies. The rail-specific<br />
initiative forms part of a broader<br />
Advanced Transport Training<br />
Programme to improve knowledge<br />
and promote innovation across all<br />
modes.<br />
Through its Global Rail Academies<br />
business unit, DB Engineering<br />
& Consulting has provided training<br />
services for railways in a number of<br />
countries.<br />
The initial programme for Brazil<br />
is intended to provide an overall understanding<br />
of the principles of rail<br />
systems and the connections between<br />
each component to ensure<br />
efficient and safe operations.<br />
Striking pictures of<br />
railways in Africa (1)<br />
Across Africa projects are<br />
underway to improve connectivity<br />
and boost economies<br />
by repairing existing railway<br />
lines and constructing new ones.<br />
The continent’s first railways<br />
were built in the colonial-era but<br />
many were neglected and left to<br />
deteriorate before the recent effort<br />
to revitalise them.<br />
Set in Africa’s unique landscape,<br />
between the gorgeous<br />
backdrops of the African plains<br />
and deserts and the continent’s<br />
socio-economic challenges, the<br />
railways’ embodiment of industry,<br />
connectivity and progress<br />
makes for striking pictures.<br />
We will begin this week to<br />
publish photos taken recently of<br />
railways in Africa, providing an<br />
insight into the condition of the<br />
continent’s public and private infrastructure.
<strong>28</strong> BUSINESS DAY<br />
Wednesday <strong>28</strong> <strong>Feb</strong>ruary <strong>2018</strong><br />
Leadership<br />
SHAPING PEOPLE INTO A TEAM<br />
How the data that internet companies<br />
collect can be used for the public good<br />
From climate change to terrorism,<br />
the difficulties confronting<br />
policymakers around the<br />
world are unprecedented in their<br />
variety and complexity. Our existing<br />
policy toolkit seems stale and outdated.<br />
Increasingly, it’s clear that<br />
we need not only new solutions<br />
but also new methods for arriving<br />
at solutions.<br />
Data, and new methods for organizations<br />
to collaborate in order<br />
to extract insights from that data,<br />
are likely to become more central<br />
to meeting these challenges.<br />
We live in a quantified era. It is<br />
estimated that 90% of the world’s<br />
data was generated in the last two<br />
years — from which entirely new<br />
inferences can be extracted and<br />
applied to help address some of<br />
today’s most vexing problems.<br />
In particular, the vast streams<br />
of data generated by social media<br />
platforms can offer insights into<br />
societal patterns and behaviors.<br />
This information poses its own<br />
challenges, particularly those associated<br />
with privacy and security,<br />
but it also represents a tremendous<br />
potential for mobilizing new<br />
forms of intelligence.<br />
In a recent report, we examine<br />
ways to harness this potential<br />
while addressing the challenges.<br />
Developed in collaboration with<br />
Facebook, the report seeks to understand<br />
how public and private<br />
organizations can join forces to<br />
use social media data — through<br />
data collaboratives — to mitigate<br />
and perhaps solve some of our<br />
most intractable policy dilemmas.<br />
DATA COLLABORATIVES:<br />
PUBLIC-PRIVATE PARTNER-<br />
SHIPS FOR THE DATA AGE<br />
For all of data’s potential to<br />
address public challenges, most<br />
data generated today is collected<br />
by the private sector. Typically<br />
ensconced in corporate databases,<br />
and tightly held in order to maintain<br />
competitive advantage, this<br />
data contains tremendous possible<br />
insights and avenues for policy innovation.<br />
But because the analytical<br />
expertise brought to bear on it<br />
is narrow and access is limited by<br />
private ownership, this data’s vast<br />
potential often goes untapped.<br />
Data collaboratives offer a<br />
way around this limitation. They<br />
represent an emerging publicprivate<br />
partnership model, in<br />
which participants from different<br />
areas , including the private sector,<br />
government and civil society ,<br />
come together to exchange data<br />
and pool expertise in order to create<br />
public value.<br />
While still an emerging practice,<br />
examples of such partnerships exist<br />
around the world. For example,<br />
the California Data Collaborative<br />
is a data pooling effort involving<br />
a coalition of water utilities, cities<br />
and water retailers dedicated to<br />
creating an integrated, Californiawide<br />
platform to provide accurate<br />
technical analysis and improved<br />
operational decision-making. Recently,<br />
we announced the creation<br />
of a data collaborative in partnership<br />
with UNICEF, Universidad del<br />
Desarrollo, Telefónica R&D Center,<br />
ISI Foundation and DigitalGlobe<br />
to leverage mobile phone and<br />
satellite imagery to increase our<br />
understanding of how megacities<br />
like Santiago, Chile, can create safer,<br />
more-efficient mobility solutions for<br />
women and girls.<br />
HOW THE EXCHANGE OF<br />
DATA CAN HELP SOLVE PUBLIC<br />
PROBLEMS<br />
At a broad level, data collaboratives<br />
can help to unlock insights<br />
from vast, untapped stores of private<br />
sector data. But toward what<br />
purpose? Our research, applied to<br />
social media data and viewed more<br />
generally, indicates five public-value<br />
propositions. These include:<br />
SITUATIONAL AWARENESS<br />
AND RESPONSE.Social media data,<br />
including shares, tweets, updates<br />
and search data, can help nongovernmental<br />
and humanitarian<br />
organizations better understand<br />
demographic trends, public sentiment<br />
and the geographic distribution<br />
of various phenomena, such<br />
as disease.<br />
Consider Facebook’s Disaster<br />
Maps initiative, which seeks to fill<br />
any gaps in traditional data sources<br />
and to inform relief efforts. Following<br />
natural disasters, Facebook<br />
shares aggregated location, movement<br />
and self-reported safety data<br />
collected through its platform with<br />
partner organizations, including<br />
UNICEF and the World Food Program.<br />
KNOWLEDGE CREATION AND<br />
TRANSFER. Data collaboratives can<br />
bring together (or “join”) widely<br />
dispersed data sets, in the process<br />
creating a better understanding<br />
of possible correlations as well as<br />
which variables make a difference<br />
for which types of problem. For example,<br />
the Massachusetts Institute<br />
of Technology’s Electome Project<br />
analyzed massive Twitter data sets<br />
to improve reporting during the<br />
2016 U.S. presidential election.<br />
PUBLIC SERVICE DESIGN AND<br />
DELIVERY. Private data sets often<br />
contain a wealth of information<br />
that can enable more-accurate<br />
modeling of public services and<br />
help guide service delivery. For<br />
example, Waze has partnered with<br />
over 60 cities to share its crowdsourced<br />
traffic data to improve<br />
urban planning and ease urban<br />
congestion.<br />
IMPACT ASSESSMENT AND<br />
EVALUATION. Finally, data collaboratives<br />
can aid in monitoring,<br />
evaluation and improvement.<br />
By leveraging social media data,<br />
public-interest actors can rapidly<br />
assess the results of their actions to<br />
iterate on products and programs<br />
when necessary. This is what Sport<br />
England did, for instance, when it<br />
used Twitter data to better understand<br />
women’s views on exercise<br />
as part of its #ThisGirlCan campaign<br />
aimed at improving women’s<br />
health and physical activity.<br />
PROFESSIONALIZING THE<br />
RESPONSIBLE USE OF PRIVATE<br />
DATA FOR THE PUBLIC GOOD<br />
For all its promise, the practice<br />
of data collaboratives remains ad<br />
hoc and limited. In part, this is a<br />
result of the lack of a well-defined,<br />
professionalized concept of data<br />
stewardship within corporations.<br />
Today, each attempt to establish<br />
a cross-sector partnership built<br />
on the analysis of social media<br />
data requires significant and timeconsuming<br />
efforts, and businesses<br />
rarely have the personnel required<br />
to undertake them.<br />
As a consequence, the process<br />
of establishing data collaboratives<br />
and leveraging privately held data<br />
for evidence-based policymaking<br />
and service delivery is onerous,<br />
generally one-off, not informed by<br />
best practices and prone to dissolution<br />
when the champions involved<br />
move on to other functions.<br />
By establishing data stewardship<br />
as a corporate function and<br />
by creating the methods and tools<br />
needed for responsible data-sharing,<br />
the practice of data collaboratives<br />
can become regularized and<br />
de-risked.<br />
If early efforts toward this end<br />
are meaningfully scaled and expanded,<br />
data stewards across the<br />
private sector can act as change<br />
agents responsible for determining<br />
what data to share and when, and<br />
how to act on the insights gathered.<br />
Still, many companies continue<br />
to balk at the prospect of sharing<br />
“their” data, which is an understandable<br />
response given the reflex<br />
to guard corporate interests. But our<br />
research has indicated that many<br />
benefits can accrue not only to data<br />
recipients but also to those who<br />
share it. Data collaboration is not a<br />
zero-sum game.<br />
(Stefaan G. Verhulst is co-founder<br />
and chief of research and development<br />
at the GovLab, based at New<br />
York University’s Tandon School of<br />
Engineering. Andrew Young is director<br />
of knowledge at the GovLab.)<br />
c<br />
2017 Harvard Business School Publishing Corp. Distributed by The New York Times Syndicate
Wednesday <strong>28</strong> <strong>Feb</strong>ruary <strong>2018</strong><br />
C002D5556<br />
BUSINESS DAY<br />
29<br />
E-mail: insurancetoday@businessdayonline.com<br />
L-R: Sunday Thomas, deputy commissioner for Insurance, Technical, NAICOM; Funmi Babington-Ashaye,<br />
president, Chartered Insurance Institute of Nigeria (CIIN); Lucy Newman, managing director, FITC and<br />
Biodun Adedipe, managing director, B. Adedipe and Associates during the Business Outlook Seminar of CIIN<br />
held in Lagos<br />
L-R: Olufunmilayo Balogun, permanent secretary, Ministry of Finance; Folasade Adesoye, head of Service<br />
(HOS) of Lagos State; Oladimeji Olona, general manager, life business, LASACO Assurance and Muyiwa<br />
Anwoju, general manager, Business Development, LASACO, presetting insurance death benefits cheque to<br />
beneficiary of a deceased Lagos State public servant in Alausa, Lagos<br />
Insurers look to <strong>2018</strong> budget,<br />
policies for growth opportunities<br />
Stories by<br />
Modestus Anaesoronye<br />
As stakeholders in the<br />
economy expects passage<br />
of the <strong>2018</strong> budget<br />
amidst policies of<br />
government hopped<br />
to bring stability post-recession,<br />
insurers are confident that its role<br />
will still be needed in key implementation<br />
areas.<br />
According to the industry,<br />
economic recovery and long term<br />
prosperity cannot be achieved if<br />
insurance is not given its prime<br />
place in government policies and<br />
decisions.<br />
“Though economic recovery<br />
is still fragile, most economic<br />
agents remain upbeat and optimistic,<br />
says Biodun Adedipe,<br />
managing partner, B. Adedipe<br />
Associates Limited.<br />
Adedipe who presented the<br />
lead paper at the Chartered Insur-<br />
ance Institute of Nigeria (CIIN)<br />
Business Outlook Seminar held in<br />
Lagos with the theme “Economic<br />
Policies of Government in <strong>2018</strong>:<br />
Issues, Challenges and Prospects”<br />
said: “The Nigerian economy can<br />
still get into trouble if government<br />
does not give more serious attention<br />
to strengthening the non-oil<br />
sector to truly diversify foreign<br />
earnings and reduce reliance on<br />
imports consumption.”<br />
According to him, opportunities<br />
however, exist in every space<br />
of the Nigerian economy looking<br />
at the sectoral contributions<br />
to the GDP, stating that, what<br />
will then matter is the ability to<br />
identify the opportunities and<br />
expropriate them.<br />
Adedipe further stated that<br />
going forward, it is will be business<br />
unusual in insurance, while<br />
warning operators to watch out<br />
for business disruptions coming<br />
from Fintechs.<br />
Funmi Babington-Ashaye,<br />
president, Chartered Insurance<br />
Institute of Nigeria(CIIN) in her<br />
earlier remarks gave the synopsis<br />
of the <strong>2018</strong> budget, stating that:<br />
“The <strong>2018</strong> Budget of consolidation<br />
was designed to build on the<br />
achievements of the 2017 fiscal<br />
year, in which Nigeria strategically<br />
exited economic recession.<br />
To further spur on economic<br />
activities, the government plans<br />
to spend N8.61trillion, while<br />
it’s expected revenue from all<br />
sources was estimated to be<br />
N6.60trillion leaving a funding<br />
gap of N2.01trillion.”<br />
According to her, the <strong>2018</strong><br />
budget is largely a deficit budget,<br />
implying that government will<br />
need to borrow from local and<br />
international institutions to augment<br />
the expected shortfall in<br />
budget.<br />
She however stated that the<br />
<strong>2018</strong> budget is not all about<br />
negative impact. “The point must<br />
also be made that if the current<br />
price of crude oil, Nigeria’s main<br />
source of revenue, is sustained<br />
all year round, the need for borrowing<br />
by the government may<br />
reduce. This is based on the fact<br />
that the budget was predicated<br />
on $45 per barrel whereas, the<br />
price since the beginning of the<br />
year has been above$60.00. With<br />
higher revenue, Nigerians should<br />
expect better implementation of<br />
the budgetary provisions.”<br />
Babington-Ashaye also stated<br />
that considering the fact that<br />
the government has allocated<br />
N181.19 billion to the payment<br />
of pensions and gratuities of<br />
public servants while N15 billion<br />
has also been set aside to meet<br />
MDAs’ life assurance premium<br />
obligations, the insurance sector<br />
should experience increased<br />
business momentum.<br />
“On the whole, the Insurance<br />
industry, in my view, has more to<br />
cheer from the budget. In other<br />
words, the business outlook for<br />
the Insurance industry is mixed<br />
but very promising. As players<br />
and risk managers, we need to<br />
open our inner minds and take<br />
those business decisions that<br />
will help us reposition of industry<br />
in the unfolding <strong>2018</strong> business<br />
year.”<br />
Sunday Thomas, deputy<br />
commissioner for Insurance,<br />
Technical, National Insurance<br />
Commission (NAICOM) in his<br />
presentation titled “Insurance<br />
And Stability Of The Economy:<br />
The Roles Of The Regulator And<br />
Strategies For The Future Of The<br />
Insurance Industry” said for<br />
insurance companies to take<br />
advantage of the opportunities in<br />
the economy and remain relevant<br />
even in the future is looking at<br />
what should be expected beyond<br />
the present.<br />
According to Thomas, focus by<br />
insurers should be more on profitable<br />
growth rather than top-line<br />
or volume growth.<br />
Continental Re, directors adjudged high<br />
on corporate governance practice<br />
Continental Reinsurance<br />
Plc has been recognised<br />
as one of the listed companies<br />
on the Nigerian<br />
Stock Exchange for attaining high<br />
ranking in the Corporate Governance<br />
Rating System.The company<br />
received the award during<br />
the CGRS certification ceremony<br />
in Lagos on Thursday night.<br />
Six of its directors of the company<br />
were also recognised for<br />
passing the Fiduciary Awareness<br />
Certification Test during<br />
the event.<br />
The directors are Olufemi<br />
Oyetunji, Ahlam Bennani, Paul<br />
Kokoricha, Foluso Laguda,<br />
Lawrence Nazare, Merrick Oeschger,<br />
David Sobanjo and Ian<br />
Tofield.<br />
Soji Apampa, co-founder and<br />
chief executive of the Convention<br />
on Business Integrity, said<br />
the organisation honours companies<br />
and individual directors<br />
that distinguish themselves in<br />
their roles despite the difficult<br />
business environment, and<br />
demonstrated their preparedness<br />
to do the right thing.<br />
He said, “This is worthy of<br />
celebration because for decades,<br />
those who habitually did<br />
the wrong things and did things<br />
wrong seems to have got away<br />
with it and even prospered than<br />
those who have been right in<br />
their doings, who refused to join<br />
them and risk appearing uncompetitive<br />
or joined them and risk<br />
damaging your business in the<br />
long run.<br />
Oscar Onyema, chief executive<br />
officer, Nigerian Stock Exchange<br />
in his remark at the<br />
event, congratulated the recipients<br />
of the awards.<br />
He said that their success<br />
was a testament that they were<br />
promoting the CGRS and that<br />
good corporate governance will<br />
improve their profitability.<br />
“The CGRS certification is<br />
based on standards set by the<br />
Companies and Allied Mat-<br />
ters Act, the Code of Corporate<br />
governance by the Security and<br />
Exchange Commission, and<br />
the Corporate Affairs Commission,<br />
regulation of the Nigerian<br />
Stock Exchange, Anti-corruption<br />
principles of the United Nations<br />
Global Compact,” he added.<br />
CGRS enhances regulatory<br />
efforts of government and self<br />
regulatory ambition of businesses.<br />
Continental Reinsurance<br />
is a composite reinsurer, writing<br />
business in more than 50<br />
countries across the African<br />
continent.<br />
Established in 1985, and listed<br />
on the NSE in 2007, Continental<br />
Reinsurance provides support to<br />
over 200 insurance companies<br />
in Africa with its main offices in<br />
Nigeria, Cameroon, Kenya, Côte<br />
d’Ivoire, Tunisia and Botswana.<br />
It also has a specialist subsidiary<br />
– Continental Property<br />
and Engineering Risk Services<br />
registered in South Africa.<br />
Africa Re Karekezi inducted in<br />
the AFRICA’S CEO’s Hall of Fame<br />
Corneille Karekezi, the<br />
group managing director<br />
and CEO of African Reinsurance<br />
Corporation (Africa<br />
Re), has received another award,<br />
the Business Excellence Award, as<br />
the leader of the leading reinsurance<br />
company in Africa and the Middle<br />
East and member of the coveted list<br />
of the Top 50 Global Reinsurance<br />
Groups published earlier by the<br />
leading rating agencies A.M. Best<br />
and Standard & Poor’s.<br />
The award is part of the Persons<br />
of the Year Awards organised by the<br />
African Leadership Magazine, an<br />
institution based in London, UK.<br />
The event took place at the Sandton<br />
Convention Centre, Johannesburg,<br />
South Africa<br />
Among other leaders celebrated<br />
that evening are, Paul Kagame, president<br />
of Rwanda, as the African of<br />
the Year, President Marc Ravalomanana,<br />
former president of Madagascar,<br />
as the African Political Leader of<br />
the Year, and other African Leaders<br />
working in various industries and<br />
social activities.<br />
Africa Re achieved in 2017 a premium<br />
income (turnover) of $747<br />
million, paid more than $500 million<br />
in settling claims and maintained its<br />
A financial rating with A.M. Best and<br />
A - with Standard & Poor’s, all with<br />
stable outlook.<br />
Later in the same evening,<br />
Corneille Karekezi was inducted<br />
in the <strong>2018</strong> Africa’s CEOs Hall of<br />
Fame, during a grandiose ceremony,<br />
another recognition,<br />
among many more in the past,<br />
of his visionary and transformational<br />
leadership in the insurance<br />
and reinsurance industry of the<br />
African continent.<br />
Responding Corneille Karekezi,<br />
said that “He is proud and honoured<br />
to be inducted in the African Leadership<br />
CEO’s Hall of Fame and to be<br />
considered as one the few persons<br />
who did their best for the development<br />
of Corporate Africa”.<br />
He added that his company,<br />
Africa Re, will continue to work for<br />
a speedy development of the continent<br />
and its people and to be a<br />
leading and inspiring example that<br />
Africa can produce the best in the<br />
business world.
Wednesday <strong>28</strong> <strong>Feb</strong>ruary <strong>2018</strong><br />
30 BUSINESS DAY<br />
C002D5556<br />
E-mail: insurancetoday@businessdayonline.com<br />
Leadway<br />
Assurance<br />
embarks on<br />
second phase of<br />
journalist<br />
empowerment<br />
Corneille Karekezi, the group managing director and CEO of African Reinsurance<br />
Corporation (Africa Re) receiving award in S/Africa.<br />
Bereaved families of Lagos public servants get<br />
reprieve, as insurance pays death benefits<br />
..LASACO, Ministry of Finance excited about partnership<br />
Stories by<br />
Modestus Anaesoronye<br />
Thirty-two families<br />
of bereaved<br />
Lagos State public<br />
servants has<br />
got a reprieve,<br />
following a partnership<br />
between the State Ministry<br />
of Finance and LASACO<br />
Insurance Plc, where they<br />
received payment of insurance<br />
death benefits for their<br />
loved relatives who died<br />
while in service.<br />
Beneficiaries of the deceased<br />
got a total of N85<br />
million as insurance compensation<br />
for death of their<br />
relatives, which is part of the<br />
State government’s welfare<br />
package in compliance with<br />
the Pension Reform Act to<br />
motivate public servants<br />
to give their best while in<br />
service.<br />
Folasade Adesoye, head<br />
of Service (HOS) of Lagos<br />
State who speake at the<br />
cheque presentation ceremony<br />
held for the beneficiaries<br />
of deceased members<br />
of staff of the state<br />
public service in Alausa<br />
said:<br />
“The payment of Death<br />
Benefits to the families of<br />
deceased members of staff<br />
is neither a favour nor a largesse,<br />
for which we expect<br />
special accolades, but it is,<br />
instead, the responsibility<br />
of the State Government<br />
and an obligation that is<br />
not only personal to Akinwunmi<br />
Ambode, the Governor<br />
of Lagos State, but<br />
one, which he accords the<br />
highest priority.”<br />
Adesoye said the importance<br />
that Lagos attaches<br />
to the provision of insurance<br />
packages among other<br />
welfare initiatives, derives<br />
mainly from government’s<br />
prioritization of its workforce<br />
as its most important<br />
asset.<br />
“The primary policy objective<br />
of the payment of<br />
Insurance Death Benefits<br />
is, therefore, essentially<br />
for the funds to serve as<br />
succour for the immediate<br />
families, dependents and<br />
other beneficiaries of the<br />
deceased. It is the hope<br />
and expectation of Government<br />
that the immediate<br />
needs of feeding, clothing,<br />
schools fees, house<br />
rent, transport, medicals<br />
and general family wellbeing<br />
would be substantially<br />
addressed (even if<br />
not totally) in the period<br />
between the demise of the<br />
family’s bread winner, the<br />
release of his entitlements<br />
and the institution of more<br />
permanent support structures.”<br />
She appealed to beneficiaries<br />
to ensure judicious<br />
use of the fund and due<br />
diligence as well as proper<br />
planning in all the expenditure<br />
you may need to make,<br />
particularly, in the areas of<br />
business and investments.<br />
“Please endevour to seek<br />
guidance and professional<br />
advice from financial consultants<br />
and small business<br />
experts before taking decisions<br />
which could significantly<br />
impact your families,<br />
she advised.<br />
Adesoye also commended<br />
all stakeholders,<br />
particularly the Ministry of<br />
Finance, State Treasury Office<br />
and LASACO for their<br />
part in ensuring the sustenance<br />
of best practices<br />
towards making life much<br />
better and rewarding for<br />
the families of deceased<br />
members of staff of the<br />
State Public Service under<br />
the Global Insurance<br />
Scheme Policy.<br />
Oladimeji Olona, general<br />
manager, life business,<br />
LASACO Assurance Plc in<br />
his remark commended<br />
the Lagos State government<br />
for imbibing the culture<br />
of insurance, stating<br />
that what has happened<br />
today is the fulfillment of<br />
Lagos State government’s<br />
commitment towards improving<br />
the welfare of its<br />
public servants.<br />
“The biggest thanks here<br />
goes to the state governor<br />
and the government of Lagos<br />
State who ensured that<br />
premium for insurance<br />
was paid regularly and as at<br />
when due. If premium was<br />
not paid, we wouldn’t have<br />
been here today, Olona<br />
stated.<br />
He therefore called on<br />
the beneficiaries of the<br />
Adeduro sees insurance potential in travel, tourism industry<br />
Given the close<br />
relationship between<br />
insurance<br />
and the Tourism<br />
and Travel sectors because<br />
of the formers role in helping<br />
the later manage risks<br />
for business protection and<br />
survival, expert has advocated<br />
stronger partnership<br />
between the two sectors.<br />
Mayowa Adeduro, an<br />
insurance expert and former<br />
managing director of<br />
Anchor Insurance Company<br />
Limited said both<br />
sectors must work together,<br />
come up with products<br />
that meet the risk appetite<br />
of the business, particularly<br />
now that tourism and<br />
travel business is becoming<br />
a major contributor to<br />
Nigeria’s gross domestic<br />
products (GDP).<br />
Adeduro made the remark<br />
in a presentation with<br />
the theme “The corollary<br />
of tourism and insurance<br />
– why insurance industry<br />
should play an active role<br />
for sustainable tourism<br />
business in Nigeria”.<br />
He said “Insurance industry<br />
in Nigeria must es-<br />
L-R: David Iornem, director - general, Institute of Management Consultants presenting a<br />
certificate to Paddy Ezeala, regional manager, South - East, Premium Pension Limited<br />
during Ezeala’s induction into the Fellowship of the Institute in Abuja.<br />
tablish a formal connection<br />
to the Travel and Tourism<br />
sector for a mutually rewarding<br />
relationship. A<br />
special product must be<br />
designed for municipal and<br />
remote tourist sites.”<br />
According to him, insurance<br />
industry lave lost billions<br />
of Naira in gross premium<br />
income from uninsured<br />
and under insured small<br />
and medium size hotels and<br />
recreational facilities scattered<br />
all over the federation.<br />
“Many visitors and tourists<br />
have suffered unreported<br />
losses and liabilities in some<br />
hotels and parks.”<br />
He noted that insurance<br />
industry must team together<br />
to build a coherence and<br />
all inclusive arrangement<br />
with IATA Travel Agencies<br />
and NANTA members<br />
money to make judicious<br />
use of it to ensure that children<br />
of the bereaved get<br />
necessary education that<br />
will enable them become<br />
responsible members of<br />
the society.<br />
Olufunmilayo Balogun,<br />
permanent secretary, Ministry<br />
of Finance; Fuyinfun<br />
Ogubanke, permanent<br />
secretary, Public Service as<br />
well as Bamidele Olayide,<br />
chairman, Association of<br />
Senior Civil Servants in Lagos<br />
State, in their remarks<br />
consoled the bereaved families,<br />
while paying God to<br />
comfort them particularly<br />
at this time.<br />
They also urged them to<br />
make judicious use of the<br />
money, avoid risking the<br />
money in ventures that will<br />
not give the dead joy wherever<br />
they are, as believed in<br />
African culture.<br />
“This is not the time to<br />
send your children abroad,<br />
as most what we hear about<br />
those places are not always<br />
true. Invest the money here<br />
in Nigeria, and God will<br />
make it prosper, the beneficiaries<br />
were advised.<br />
with potential to facilitate<br />
smooth operations of members<br />
of these trade groups.<br />
“When risk is shared it<br />
becomes difficult, if not<br />
impossible, for chronic defaulters<br />
to run from one<br />
company to another, which<br />
has been the bane of profitable<br />
underwriting in some<br />
classes of insurance.”<br />
He concluded by saying<br />
that insurance industry<br />
has a huge role to play in<br />
entrenching a sustainable<br />
tourism development in<br />
Nigeria, however nature<br />
abhors vacuum so the ball<br />
is in the court of insurance<br />
industry to take up proactive<br />
engagement or to lose<br />
yet another opportunity to<br />
be reckon with by the government<br />
and the insuring<br />
public.<br />
Leadway Assurance<br />
has announced<br />
the second edition<br />
of the Leadway<br />
Journalism training<br />
organized in partnership<br />
with the National Insurance<br />
and Pension Correspondents.<br />
The initiative, which is<br />
in its second edition is a<br />
capacity building initiative<br />
organised by Leadway Assurance<br />
to empower journalists<br />
in the discharge of<br />
their duties by equipping<br />
them with the requisite<br />
knowledge on the industry<br />
and its business operations.<br />
Olubunmi Adeleye,<br />
head of Corporate Communications/Services,<br />
at<br />
Leadway said this edition<br />
of the capacity development<br />
initiative will focus<br />
on the key areas of financial<br />
reporting in insurance,<br />
understanding life<br />
annuity, micro insurance<br />
business among others.<br />
Speaking on the initiative,<br />
Adeleye highlighted<br />
the important role that<br />
journalists play in raising<br />
the level of insurance<br />
awareness and how it<br />
works, hence, the need<br />
to continuously equip<br />
them within such capacity<br />
building initiatives.<br />
She said, “The training<br />
will further enlighten journalists<br />
on the inner workings<br />
and technicalities<br />
of the insurance sector,<br />
keeping them abreast of<br />
the latest industry trends<br />
both locally and globally.”<br />
The initiative which is<br />
scheduled to hold at the<br />
Leadway Assurance Training<br />
School on Wednesday,<br />
<strong>28</strong> <strong>Feb</strong>ruary, <strong>2018</strong> will<br />
have in attendance over 40<br />
journalists culled from the<br />
Insurance and Pensions<br />
news sector.<br />
It will be recalled that<br />
in October 2017, Leadway<br />
Assurance collaborated<br />
with NAIPCO to organize<br />
the first of its kind<br />
comprehensive training<br />
workshop for members as<br />
part of the 2017 NAIPCO<br />
Conference to facilitate<br />
capacity building for insurance<br />
correspondents.
Wednesday <strong>28</strong> <strong>Feb</strong>ruary <strong>2018</strong><br />
Pension Today<br />
C002D5556<br />
BUSINESS DAY<br />
In Association with<br />
31<br />
More insights into micro-pension scheme<br />
A<br />
micro-pension<br />
plan has a distinct<br />
accumulation<br />
phase as<br />
well as a payout<br />
phase. During the accumulation<br />
phase, a member<br />
contributes towards accumulating<br />
balances. The<br />
value of such accumulation<br />
depends on the amount<br />
of contributions less preretirement<br />
withdrawals plus<br />
returns (net of investment<br />
management expenses) obtained<br />
from the investment<br />
of funds.<br />
It is usual for administrative<br />
expenses to be borne by<br />
the members collectively.<br />
These however need to be<br />
transparent and benchmarked.<br />
The accumulation<br />
phase is followed by the<br />
pay-out phase, which commences<br />
after retirement<br />
in most cases. During this<br />
phase, the member receives<br />
income from the pension<br />
fund either as a lump sum<br />
or in a phased manner.<br />
Product Features<br />
A pension product for<br />
low-income groups should<br />
be designed to take into account<br />
the constraints faced<br />
by, and the needs of these<br />
individuals. As income<br />
streams may be uncertain or<br />
volatile, the product should<br />
offer a degree of financial<br />
flexibility calling for low<br />
or no minimum contribution<br />
requirements so as to<br />
encourage membership.<br />
However, contributions that<br />
are set too low or which are<br />
paid in a sporadic manner<br />
may not provide sufficient<br />
income security.<br />
Experience with micro-savings<br />
indicates that<br />
low-income groups prefer<br />
lower-value and frequent<br />
deposits rather than infrequent<br />
larger-value deposits.<br />
As there are competing<br />
demands on their resources,<br />
it is difficult for these<br />
groups to accumulate large<br />
amounts. In order to facilitate<br />
the making of frequent<br />
deposits and to remove<br />
prohibitive time and travel<br />
costs, convenient door-todoor<br />
deposit collection is<br />
favoured.Furthermore, the<br />
product features should be<br />
uncomplicated to enable all<br />
individuals, including those<br />
with low levels of financial<br />
literacy understand and<br />
monitor them.<br />
The duration of pension<br />
products should be longterm,<br />
though a roll-over<br />
option after each ten-year<br />
term may be less daunting<br />
for low-income groups. The<br />
age at which the first withdrawal<br />
is permitted may or<br />
may not coincide with the<br />
retirement age.<br />
The other design alternatives<br />
are to provide either<br />
easy withdrawal options<br />
or loans against deposited<br />
amounts. But these features<br />
result in increased transaction<br />
costs and reduces the<br />
period over which compounding<br />
occurs; resulting<br />
in a lower level of accumulated<br />
balances and hence<br />
retirement income. The<br />
tradeoffs between current<br />
needs and future income<br />
security in retirement.<br />
Risk Management<br />
In the pay-out phase,<br />
longevity, investment and<br />
inflation risks need to be addressed.<br />
In addition, survivors’<br />
benefits and disability<br />
insurance are also essential.<br />
Survivors’ benefits are particularly<br />
important.<br />
Longevity risk derives<br />
from the fact that although<br />
each individual will die<br />
eventually; the age, the<br />
cause, and the place of his<br />
or her death are not known.<br />
Some may die within a short<br />
period after retirement,<br />
while others may live for a<br />
much longer period. The<br />
latter category of persons<br />
may find their financial<br />
resources exhausted, while<br />
those dying early in retirement<br />
may not face this challenge.<br />
The earlier the age at<br />
which the first withdrawal<br />
is permitted, the longer<br />
the period for which the<br />
accumulated balances will<br />
be required to be used to<br />
finance income in old age.<br />
Investment risk refers<br />
to the risk of return from<br />
the portfolio that the pension<br />
fund invests in. In the<br />
risk-return continuum, a<br />
lower degree of risk is desirable<br />
for micro-pension<br />
plans because of the lower<br />
risk-bearing capacity of the<br />
low-income population. In<br />
order to ensure an adequate<br />
rate of return on small deposits,<br />
the transaction costs<br />
involved need to be kept<br />
low. This is a challenge that<br />
must be met both through<br />
technology-based solutions<br />
and deliberate efforts to<br />
realize economies of scale<br />
Micro-pensions<br />
must offer a<br />
reliable means<br />
for the collection<br />
of small-value<br />
deposits on a<br />
frequent basis<br />
at locations<br />
convenient to the<br />
customer<br />
and scope.<br />
Taking into account the<br />
lengthy time horizon within<br />
which micro-pensions operate,<br />
inflation risks are<br />
important, and particularly<br />
so in view of the limited resources<br />
of the poor. In much<br />
of Africa, inflation risk is<br />
one of the main reasons<br />
why savings for old age are<br />
placed in assets, such as by<br />
investing in land, housing<br />
and livestock.<br />
Micro-pensions must<br />
offer a reliable means for<br />
the collection of small-value<br />
deposits on a frequent basis<br />
at locations convenient to<br />
the customer. Given the<br />
large demography in Nigeria,<br />
a challenge is to put<br />
in place a truly nationwide<br />
distribution channel for<br />
micro-pensions.<br />
Micro-credit loans are<br />
essentially short-term in nature<br />
and range between one<br />
and three years, with a oneyear<br />
term being the most<br />
common. Although repeat<br />
loans are often observed,<br />
the time horizon is usually<br />
not as long as that of micro<br />
pension schemes. Hence,<br />
the two financial services<br />
(loans and deposits) may<br />
not overlap entirely and to<br />
that extent there may not be<br />
cost savings.<br />
Micro Pensions functions<br />
include the following;<br />
firstly, the reliable collection<br />
of contributions, taxes and<br />
other receipts, including<br />
any loan payments. The<br />
second concerns the payment<br />
of benefits for each<br />
of the schemes in a timely<br />
and correct way. The third<br />
involves securing financial<br />
management and productive<br />
investment of provident<br />
and pension fund assets.<br />
The fourth core function<br />
is maintaining an effective<br />
communication network,<br />
including the development<br />
of accurate data and recordkeeping<br />
mechanisms to<br />
support collection, payment<br />
and financial activities. The<br />
fifth is the production of<br />
financial statements and<br />
reports that are tied to providing<br />
effective and reliable<br />
governance, fiduciary responsibility,<br />
transparency,<br />
and accountability. The<br />
sixth function, it is to provide<br />
customers with appropriate<br />
financial education<br />
and to increase financial<br />
literacy.<br />
Communication<br />
The communication<br />
strategy with potential customers<br />
should be creatively<br />
managed. For instance; for<br />
products such as micropensions<br />
that operate with a<br />
lengthy time horizon, offering<br />
fixed interest rates may<br />
be difficult; accordingly,<br />
flexible interest rates may<br />
be more appropriate. The<br />
concept of flexible interest<br />
rates may however be hard<br />
to explain to customers<br />
with low levels of financial<br />
literacy. It is therefore incumbent<br />
upon institutions<br />
to effectively explain the<br />
product to customers, it’s<br />
important that the potential<br />
customers are equipped<br />
with sufficient knowledge<br />
to enable them to explain<br />
the products to their family<br />
members.
32 BUSINESS DAY C002D5556 Wednesday <strong>28</strong> <strong>Feb</strong>ruary <strong>2018</strong>
Wednessday <strong>28</strong> <strong>Feb</strong>ruary <strong>2018</strong><br />
BUSINESS DAY<br />
33
34 BUSINESS DAY<br />
C002D5556<br />
Wednesday <strong>28</strong> <strong>Feb</strong>ruary <strong>2018</strong>
Wednesday <strong>28</strong> <strong>Feb</strong>ruary <strong>2018</strong><br />
Live @ The Stock Exchange<br />
C002D5556<br />
BUSINESS DAY<br />
35<br />
Stock market fails to sustain gains<br />
Stories by<br />
Iheanyi Nwachukwu<br />
The Nigerian<br />
stock market<br />
failed to<br />
sustain last<br />
Monday’s<br />
gains following a loss of<br />
N100billion recorded at<br />
the close of trading on<br />
Tuesday.<br />
While only 18 stocks<br />
gained, 37 companies<br />
recorded share price<br />
decline as the bears resurfaced.<br />
Despite selloffs in<br />
yesterday’s session,<br />
research analysts at<br />
Lagos-based Cordros<br />
Capital said their theme<br />
on the equities market<br />
remains positive, “amid<br />
strengthening macroeconomic<br />
fundamentals.”<br />
At the close of trading<br />
on Tuesday, the Nigerian<br />
Stock Exchange<br />
(NSE) All Share Index<br />
(ASI) decreased by<br />
0.66percent, while the<br />
Year-to-Date (Ytd) return<br />
stood at 10.61percent.<br />
The All Share Index<br />
closed at 42,299.56<br />
points as against the<br />
preceding day close<br />
of 42,579.48 points<br />
while Market Capitalisation<br />
decreased to<br />
N15.180trillion against<br />
preceding day close of<br />
N15.<strong>28</strong>0 trillion.<br />
Seplat Petroleum Development<br />
Company<br />
Plc recorded the biggest<br />
dip, from N671.4 to<br />
N657.9, down by N13.5<br />
or 2.01percent.<br />
International Breweries<br />
Plc followed after<br />
its share price declined<br />
from N59.85 to N57,<br />
down by N2.85 or<br />
4.76percent. Dangote<br />
Cement Plc lost N2, from<br />
N259 to N257; down by<br />
0.77percent.<br />
Lafarge Africa Plc<br />
declined from N51.3 to<br />
N50, down by N1.3 or<br />
2.53percent; while Julius<br />
Berger Nigeria Plc<br />
lost N1.1 or 4.24percent,<br />
from N25.95 to<br />
N24.85.<br />
Nestle Nigeria Plc<br />
shares advanced most,<br />
after rising from N1,378<br />
to N1,400, up by N22<br />
or 1.60percent. Total<br />
Nigeria Plc followed<br />
from N217 to N232, up<br />
by N15 or 6.91percent.<br />
Mobil Oil Nigeria Plc<br />
stock price increased<br />
from N180.5 to N183.9,<br />
up by N3.4 or 1.88percent.<br />
Conoil Plc share<br />
price rose from N32.1<br />
to N35.25, up by N3.15<br />
or 9.81percent; while<br />
Cement Company of<br />
Northern Nigeria Plc<br />
advanced from N16.85<br />
to N18.2, an increase<br />
of N1.35 or 8.01percent.<br />
Transcorp Plc, Diamond<br />
Bank Plc, FBN<br />
Holdings Plc, Fidelity<br />
Bank Plc and Access<br />
Bank Plc were actively<br />
traded stocks on the Nigeria<br />
bourse Tuesday.<br />
The volume of<br />
stocks traded increased<br />
by 13.98percent,<br />
from 384.86million<br />
to 438.65million,<br />
while the total value<br />
of stocks traded increased<br />
by 60.76percent,<br />
from N5.474 billion<br />
to N8.800 billion<br />
in 5,433 deals.<br />
The Financial Services<br />
sector led yesterday’s<br />
activity chart with<br />
310.86million shares<br />
exchanged for N3.226<br />
billion; followed by conglomerates<br />
next with<br />
46.53million shares<br />
traded for N109 million.<br />
Standard Chartered results show significant<br />
improvement in profitability, returns<br />
Standard Chartered<br />
Plc has released its<br />
results for the year<br />
ended December<br />
31, 2017. The group financial<br />
performance for<br />
the year shows significant<br />
improvement in profitability<br />
and returns. Profit before<br />
tax (PBT) of $3billion<br />
was up 175percent and up<br />
71percent excluding Principal<br />
Finance.<br />
Statutory profit before<br />
tax of $2.4billion is stated<br />
after restructuring and<br />
other items and was $2billion<br />
higher. Returns on<br />
Equity (RoE) improved<br />
from 0.3percent to 3.5percent;<br />
just under half-way<br />
towards the Group’s initial<br />
milestone of 8percent.<br />
Basic earnings per share<br />
increased from 3.4 cents in<br />
2016 to 47.2 cents in 2017.<br />
The Board has recommended<br />
resuming a dividend<br />
given improving financial<br />
performance and<br />
strong capital; full year<br />
dividend of 11 cents per ordinary<br />
share proposed for<br />
2017. Standard Chartered<br />
Bank intends to increase<br />
the dividend per share<br />
over time as the Group’s<br />
performance improves.<br />
Bill Winters, Group<br />
Chief Executive Standard<br />
Chartered Bank stated<br />
“The transformation of<br />
the Group continued in<br />
2017 with the significant<br />
improvement in underlying<br />
profits, a strong capital<br />
position and emerging<br />
clarity on regulatory capital<br />
requirements allowing<br />
us to resume paying<br />
dividends. We are encouraged<br />
by our start to <strong>2018</strong><br />
and remain focused on<br />
realising the Group’s full<br />
potential.”<br />
Operating income of<br />
$14.3billion was up 3percent<br />
despite a 4percent<br />
drag from Financial Markets;<br />
13percent income<br />
growth from key areas of<br />
investment (half of total),<br />
with particular strength<br />
in liability-led products;<br />
industry-wide low volatility<br />
during 2017 impacted<br />
performance in Financial<br />
Markets; income was 3percent<br />
lower quarter-onquarter<br />
(qoq) due partly to<br />
the early achievement of a<br />
bonus in Wealth Management.<br />
In its outlook, Standard<br />
Chartered Bank is encouraged<br />
by its start to <strong>2018</strong><br />
with broad-based doubledigit<br />
year-on-year income<br />
growth, adding that operating<br />
leverage and continued<br />
focus on risks is expected to<br />
deliver RoE above 8percent<br />
in the medium term.<br />
In the review 2017 financial<br />
year, the group<br />
net interest income (NII)<br />
increased 5percent and<br />
the net interest margin increased<br />
slightly to 1.55percent.<br />
Other operating expenses<br />
of $8.6billion were<br />
well controlled, rising 2percent<br />
due primarily to variable<br />
pay. Over 85percent<br />
of the four-year $2.9billion<br />
gross cost efficiencies target<br />
has been achieved with<br />
a year to go.<br />
Gross savings funded<br />
investment of $1.5billion<br />
(2016: $1.4billion),<br />
50percent over the 2015<br />
level. Regulatory costs rose<br />
15percent, with several<br />
large programmes including<br />
MiFID II and IFRS 9 being<br />
implemented. The bank<br />
made further significant<br />
progress in implementing<br />
financial crime prevention<br />
capabilities.<br />
Asset quality overall has<br />
improved with the focus on<br />
better quality origination<br />
within a more granular<br />
risk appetite. Loan impairment<br />
of $1.2billion halved<br />
as management actions<br />
resulted in improvement<br />
across all client segments.<br />
Profit from associates<br />
and joint ventures rose<br />
$185million following better<br />
performances in China<br />
and Indonesia.<br />
The bank’s capital and<br />
liquidity ratios remain<br />
strong; liquidity coverage<br />
ratio was 146percent with a<br />
prudent surplus to regulatory<br />
requirements.<br />
The bank saw strong<br />
and broad-based balance<br />
sheet growth in both customer<br />
loans and advances<br />
and customer deposits.<br />
The impact of adopting<br />
IFRS 9 and implementing<br />
final Basel III reforms is<br />
considered manageable by<br />
the bank.
36<br />
BUSINESS DAY<br />
C002D5556<br />
Wednesday <strong>28</strong> <strong>Feb</strong>ruary <strong>2018</strong><br />
Supported<br />
Financial Inclusion is a stepping<br />
stone to attaining the SDGs<br />
IBUKUN TAIWO &<br />
OLAYINKA DAVID-WEST<br />
Imagine an Africa where<br />
we have finally eradicated<br />
poverty and<br />
hunger, malaria and<br />
typhoid rarely if ever,<br />
claim millions of lives, girls<br />
are empowered to get an<br />
education and pursue their<br />
dreams and careers, just like<br />
boys, and a vibrant economy.<br />
This is the future the United<br />
Nations is trying to forge<br />
through the 17 Sustainable<br />
Development Goals (SDGs).<br />
By 2030, the plan is to have<br />
a planet that is significantly<br />
better off than it is today.<br />
Since 2016, individuals,<br />
governments, institutions and<br />
organizations from all over<br />
the world have bought into<br />
the vision and have executed<br />
to the best of their ability,<br />
projects which will address<br />
one or more of these goals.<br />
We in the financial inclusion<br />
space strongly believe<br />
that increased inclusion will<br />
aid and catalyse several of<br />
these SDGs and with good<br />
reason. In at least 6 of the seventeen<br />
SDGs, financial inclusion<br />
is mentioned (sometimes<br />
explicitly) as a metric used<br />
to determine the success of<br />
the SDG. These include SDG<br />
1 - Eradicating poverty; SDG<br />
2 - Zero Hunger; SDG 3 - Good<br />
Health and Well-Being, SDG<br />
5 - Gender Equality; and SDG<br />
8 - Economic Growth and<br />
more Jobs.<br />
In Nigeria’s quest to fulfil<br />
the SDGs, addressing financial<br />
inclusion will have far<br />
reaching and cross cutting<br />
effects as it enables us kill<br />
multiple birds with one stone<br />
on the national development<br />
order. In fact, the National<br />
Financial Inclusion Strategy<br />
is so ambitious that should<br />
it succeed, will result in a<br />
turnaround in the national<br />
economy, personal income,<br />
and general well being of<br />
many Nigerians.<br />
We’ve seen similar results<br />
in Kenya. In an MIT study, the<br />
incredible success of M-PESA<br />
was found to have lifted as<br />
many as 194,000 households<br />
– 2% of the Kenyan population<br />
– out of poverty, and has also<br />
improved the economic lives<br />
of poor women and households<br />
where a woman is the<br />
breadwinner.<br />
SDG 1 (Eradicating Poverty):<br />
in particular holds a special<br />
significance for Nigeria as we<br />
have struggled to tackle the<br />
high poverty level over the last<br />
three decades. In the World<br />
Bank’s 2017 Atlas of Sustainable<br />
Development Goals,<br />
a publication tracking the<br />
progress countries are making<br />
to meet the SDGs, Nigeria<br />
recorded an increase in the<br />
number of citizens who live<br />
in extreme poverty (less than<br />
$1.90) over the period of the<br />
study. In fact, between 1990<br />
and 2013, 35 million more<br />
people sunk into extreme<br />
poverty.<br />
One of the ways we can<br />
flip this script is increased<br />
financial inclusion. Financial<br />
inclusion is the access to and<br />
use of financial services. Access<br />
to savings, credit, microinsurance<br />
and the like have<br />
been shown to be powerful<br />
levers in the transition out<br />
of poverty. Research also<br />
shows that access to financial<br />
services is a key indicator of<br />
how an individual builds and<br />
maintains reserves, plans,<br />
prioritises, manages and recovers<br />
from financial shocks.<br />
Such savings, when invested<br />
in small businesses, provide<br />
income flows that helps pay<br />
for food, education and health<br />
which are all indices for poverty<br />
measurement.<br />
Financially included individuals<br />
are better equipped to<br />
save and plan, thus, improving<br />
their economic well being<br />
and standard of living. Access<br />
to credit also empowers lowincome<br />
earners to invest in<br />
agriculture ( a main source of<br />
livelihood in rural regions) thus<br />
improving production, food<br />
security and increasing the<br />
sector’s contribution to GDP.<br />
SDG 2 (Zero Hunger): Financial<br />
inclusion plays an<br />
instrumental role in eliminating<br />
hunger, especially among<br />
those trapped in poverty -<br />
living in rural areas and excluded<br />
from formal financial<br />
services.<br />
80% of the food consumed<br />
in the developing world is<br />
produced by farmers who<br />
themselves live in poverty.<br />
These farmers live majorly<br />
in rural areas that are sparse<br />
of infrastructure and have<br />
seasonal income (due to the<br />
inherent nature of farming<br />
seasons). As such, they are<br />
vulnerable to natural disasters,<br />
climate change, or war.<br />
Access to financial services<br />
such as microcredit or insurance<br />
can directly impact<br />
the small farmer’s financial<br />
health and food security.<br />
Under the auspices of the<br />
Federal Ministry of Agriculture,<br />
the Growth Enhancement<br />
Scheme (GES), operated by<br />
FETS ensures agricultural inputs<br />
are distributed to farmers.<br />
SDG 5 (Gender Equality):<br />
Studies have revealed a financial<br />
inclusion gender gap<br />
in Nigeria i.e. higher rates of<br />
exclusion exist among women<br />
than men. Access to financial<br />
services enables women to<br />
manage their finances and<br />
be less dependent on their<br />
spouses. Addressing gender<br />
equality means figuring out<br />
ways to bring access to females<br />
since research has also shown<br />
that women tend to invest savings<br />
returns on their families<br />
and communities (which has<br />
potentially broad economic<br />
benefits). This premise has<br />
informed a few initiatives such<br />
as the partnership between<br />
Diamond Bank and Women’s<br />
World Bank which specifically<br />
empowers women with bank<br />
accounts.<br />
With increasing efforts<br />
towards increasing women’s<br />
access to financial services,<br />
several economies are now<br />
promoting policies that give<br />
women the right to full eco-<br />
nomic participation, thus<br />
lowering gender inequality.<br />
SDG 8 (Economic Growth):<br />
There exists a positive and<br />
substantial relationship between<br />
the access to and use<br />
of financial services and economic<br />
growth in Nigeria as<br />
evidenced in a technical paper<br />
we published last year.<br />
The research suggests that<br />
increasing financial inclusion<br />
would restore vitality to<br />
Nigeria’s economy and maybe<br />
even sustain it. Access to<br />
savings and credit stimulates<br />
economic activity that<br />
ultimately increases employment,<br />
gross domestic product<br />
(GDP) and economic growth.<br />
The numerous links between<br />
financial inclusion and<br />
SDG fulfilment are undeniable.<br />
The more people get<br />
included and gain access to<br />
financial services, the easier it<br />
will be for us to attain the Sustainable<br />
Development Goals.<br />
And the better our collective<br />
future will be.<br />
Olayinka David-West and<br />
Ibukun Taiwo are members<br />
of the Sustainable and Inclusive<br />
Digital Financial<br />
Services initiative of the<br />
Lagos Business School
Wednesday <strong>28</strong> <strong>Feb</strong>ruary <strong>2018</strong><br />
Nigeria’s 12.08% Q4 2017 air transport<br />
growth hinged on stable economy<br />
IFEOMA OKEKE<br />
Experts in the Nigerian<br />
aviation sector<br />
have hinged<br />
the growth experienced<br />
in the air<br />
transport sector in 2017 on<br />
relatively stable economy.<br />
According to National Bureau<br />
of Statistics (NBS) report<br />
on Nigerian Gross Domestic<br />
Product (GDP) on fourth<br />
quarter of 2017, the fastest<br />
growing activities in this<br />
quarter were road transport<br />
at a rate of 27.23 percent, and<br />
air transport at a rate of 12.08<br />
percent year-on-year.<br />
Transport contributed 1.74<br />
percent to Nominal GDP, an<br />
incline from the 1.50 percent<br />
recorded in the corresponding<br />
period of 2016, and higher<br />
than 1.43 percent recorded in<br />
the third quarter of 2017. Annual<br />
growth and contribution<br />
stand at 13.60 percent and 1.57<br />
percent, respectively.<br />
However, the water transport;<br />
air transport; transport<br />
services, and post and courier<br />
services sectors grew<br />
… as airlines increase frequencies, open more routes<br />
by 24.10 percent in nominal<br />
terms in the fourth quarter<br />
of 2017 (year-on-year). This<br />
rate is higher relative to figure<br />
recorded at 10.55 percent<br />
for the corresponding<br />
quarter of 2016 and 0.58 percent<br />
in the previous quarter.<br />
The direct impact of the<br />
growth is that airlines are<br />
increasing frequencies into<br />
the country and opening<br />
more routes.<br />
Philip Akesson, country<br />
manager, Travelstart Nigeria,<br />
who confirmed this development,<br />
said the increase<br />
in ticket sales experienced in<br />
Nigeria lately was an indication<br />
that the stable economy<br />
was helping to give more<br />
trust such that the airlines<br />
would keep investing.<br />
“Delta Airline is commencing<br />
Lagos to New York flights,<br />
RwandAir is also adding more<br />
flights and a lot of the airlines<br />
are adding more flights and<br />
new routes. Some airlines that<br />
flew three times into Nigeria<br />
before are now doing daily<br />
now. The market is not like it<br />
was two years ago, it is improving<br />
and a lot of this is because<br />
of stability, and it is good for<br />
business,” Akesson said.<br />
<strong>BusinessDay</strong>’s checks<br />
show that Nigerians have continued<br />
to embrace air travel as<br />
ticket sold by foreign airlines<br />
in 2017 was more than N200<br />
billion higher than in 2016.<br />
In 2017, air travel still recorded<br />
ticket sales of N511<br />
billion ($1.4bn) from January<br />
to October 2017. The 2016<br />
tickets sold as released by Nigerian<br />
Civil Authority (NCAA)<br />
put earnings of 30 foreign<br />
carriers on Nigerian routes at<br />
N330,548,324,796.84, a little<br />
less than N385,909,897,0<strong>28</strong>.<br />
80 sold between January and<br />
December in 2015.<br />
Bankole Bernard, president,<br />
National Association<br />
of Nigeria Travel Agencies<br />
(NANTA), said the huge tickets<br />
sold by foreign airlines<br />
showed that Nigeria’s economy<br />
was on the upswing.<br />
Bobby Bryan, commer-<br />
Trade, investment activities employ 10.8m Nigerians in 2017, account for 18% of GDP - report<br />
cial director, West, East, Central<br />
and Lusophone Africa for<br />
Delta Airlines, told Business-<br />
Day that the introduction<br />
of flights from Lagos to New<br />
York was an important step,<br />
as the economy and Delta<br />
Airlines rebuild after the financial<br />
crisis in Nigeria.<br />
“The New York route is<br />
the largest unserved route<br />
from the United States to Nigeria.<br />
This means there are a<br />
lot of people who want to go<br />
there. So, it is important that<br />
the need be met. The clients<br />
that will be going from here<br />
are important to us. It is the<br />
financial market; we are the<br />
capital finance in Nigeria. We<br />
saw a market that was not being<br />
served and we thought we<br />
had an opportunity to do so,”<br />
Bryan said.<br />
Competition will also<br />
deepen for airlines going to<br />
Dubai, Sharjah and London<br />
routes, as one of Nigeria’s<br />
leading airlines AirPeace will<br />
commence flight operations<br />
into these locations this year.<br />
L-R: Ekuah Abudu, director of administration, Greenwood House School; Atunyota Alleluya Akpobome (Alibaba ); Olubunmi<br />
Aboderin Talabi, author/publisher, Clever Clogs Books, and Funke Fowler-Amba, director, Vivian Fowler Memorial College, at<br />
the launch Clever Clogs Books in Lagos.<br />
Pic by Pius Okeosisi<br />
C002D5556<br />
BUSINESS DAY<br />
37<br />
NEWS<br />
Anti-human trafficking campaign driven by legal<br />
structures, not social project – Edo attorney general<br />
Edo State Attorney<br />
General and Commissioner<br />
for Justice,<br />
Yinka Omorogbe, says<br />
the state government’s campaign<br />
against human trafficking<br />
and illegal migration is<br />
rooted in legal structures and<br />
is not run as social project.<br />
Omorogbe, who is also<br />
the chairperson, Edo State<br />
Task Force Against Human<br />
Trafficking, disclosed this in<br />
Benin City, the state capital,<br />
noting, “The strategy adopted<br />
by the Governor Godwin<br />
Obaseki-led administration<br />
to curb human trafficking<br />
and illegal migration is driven<br />
by legal structures and is<br />
being institutionalised with<br />
the incoming legislation to<br />
stem the menace.<br />
“This is not a social project.<br />
Obaseki’s vision is to<br />
make human trafficking and<br />
illegal migration history in<br />
the state, as he is desirous<br />
that trafficking ends while<br />
he is still governor.”<br />
The move to use legal<br />
structures in the fight against<br />
human trafficking is informed<br />
by the fact that similar<br />
efforts in the past only focused<br />
on providing social<br />
safety nets, which did not<br />
solve the problem for years.<br />
According to Omorogbe,<br />
“It is important to have legal<br />
backing for the campaign<br />
against human trafficking. If<br />
there is no legal teeth in the<br />
fight against human trafficking<br />
and all you are doing is<br />
social project, you will not<br />
be sending a strong message<br />
against traffickers, who benefit<br />
from the illicit trade.”<br />
She added, “The state<br />
government domiciled the<br />
taskforce under the office of<br />
the Attorney General to give<br />
the campaign against human<br />
trafficking the needed<br />
legal structures it requires.<br />
It must be noted that<br />
the state government is<br />
not against migration, but<br />
will continue to encourage<br />
those with interest to migrate,<br />
to do so legally and<br />
with the right papers and<br />
qualification.”<br />
We are keeping to our promise on<br />
homeowners’ charter – Amosun<br />
Ogun State governor,<br />
Ibikunle<br />
Amosun, says his<br />
administration<br />
was keeping to the promise<br />
made in 2013 that all successful<br />
applicants under<br />
Homeowners’ Charter Programme<br />
would collect their<br />
documents unfailingly.<br />
He stated this during the<br />
<strong>28</strong>th edition of the distribution<br />
of Certificate of Occupancy<br />
(C of O) and building<br />
plan approval to another<br />
batch of beneficiaries at<br />
the Arcade Ground, Oke-<br />
Mosan, Abeokuta.<br />
Amosun, represented<br />
by the commissioner for<br />
forestry, Kolawole Lawal,<br />
said the consistency in the<br />
distribution of C of O was a<br />
prove that government was<br />
working towards the development<br />
of the state and to<br />
also showed that the properties<br />
belong to the successful<br />
applicants.<br />
‘’This is the <strong>28</strong>th edition<br />
of the programme, which<br />
means promise made,<br />
promise kept. If the state<br />
government had not been<br />
consistent, applicants won’t<br />
have been opportune to<br />
benefit from it,’’ he said.<br />
The governor said the<br />
issuance of C of O in the<br />
past was challenging until<br />
the introduction of Home<br />
Owners’ Charter, which<br />
has made it easier for thousands<br />
of people to benefit.<br />
Earlier in his remarks,<br />
the coordinating consultant<br />
of the programme, Niyi<br />
Oguntula, said the state<br />
government was committed<br />
at ensuring that all applicants<br />
who meet the requisite<br />
criteria set out for the<br />
programme were issued<br />
with the documents. Speaking<br />
on behalf of the beneficiaries,<br />
Bello Rasheed<br />
from Obantoko, Abeokuta,<br />
thanked the governor for<br />
keeping to the promise<br />
made.<br />
Reps probe non-payment of N9.1trn to local contractors<br />
is first three quarters of 2017.<br />
that the N9.1 trillion was<br />
HARRISON EDEH, Abuja which Nigeria is building KEHINDE AKINTOLA, Abuja Government can reflate the<br />
At the launch, Enelemah strategic trade and economic<br />
relations. Switzer-<br />
Nigeria’s House of Government’s indebtedness Contractors, thereby creating<br />
approved to offset Federal economy by paying Local<br />
Federal Government also pointed out a positive<br />
on Tuesday said rebound in trade and investment<br />
related activities in many useful lessons can be<br />
is set to beam its “Federal Government the purchasing power of Niland<br />
is a country from which<br />
Representatives spanning over three years. employment and boosting<br />
trade activities, both<br />
import and export, 2017, impacting positively learned, from economic organisation,<br />
to its world-class the allegations bothering tune of N9.1 trillion to local He maintained that the<br />
searchlight on has been indebted to the gerians,” the lawmaker said.<br />
employed over 14 percent on the economy.<br />
of the Nigerian workforce, On the highlight of the report,<br />
the minister said, “The development model, to its trillion appropriated for years as reflected in the remarked<br />
in the 2017 budget<br />
apprenticeship and skills on non-payment of N9.1 contractors in the last three sum of N20 billion was ear-<br />
equivalent to 10.8 million<br />
Nigerians, adding that trade report identifies the priorities<br />
in Nigeria’s trade policy, ness models.<br />
past few years.<br />
Nigeria and the Debt Mancal<br />
contractors and other<br />
high-technology and busi-<br />
local contractors over the ports of the Central Bank of to settle debts owed to lo-<br />
accounted for 18 percent of<br />
the GDP, which is second to and our use of trade policy as “Third, the NATPOR provides<br />
a stewardship account obtained by <strong>BusinessDay</strong>, “The House notes that the “Some of those contrac-<br />
According to the report agement Office.<br />
liabilities.<br />
agriculture that accounted an instrument for structural<br />
for 29.1 percent of the GDP. transformation for diversification,<br />
modernisation, of the NOTN, from its estab-<br />
was approved in the 2017 ernment to finance the 2017 loans from various com-<br />
of the efforts and accounts a paltry sum of N20 billion inability of the Federal Govtors<br />
may have collected<br />
Okechukwu Enelemah,<br />
minister of industry, trade construction of regional and lishment on 10th May, 2017, Appropriation Act to offset budget deficit and meet its mercial Banks or other<br />
and investment, gave the global value chains, welfare by the decision of the Federal<br />
Executive Council.” Federal Government.<br />
Ministry of Finance to source would be yielding interest<br />
the debts incurred by the other obligations made the Financial Houses which<br />
information at the official enhancement, job creation.<br />
launch of the 2017 Nigerian “Gradually, working in In her earlier remarks, The resolution was for funds from commercial on daily basis or may have<br />
Annual Trade Policy Report, close coordination with Anne-Beatrice Bullinger, passed by the House sequel banks and the Capital Market<br />
through ‘Sukuk’ etc, while obtain such loans.<br />
lost the collateral used to<br />
NATPOR.<br />
the Industrial Policy and deputy head of mission, Embassy<br />
of Switzerland, lauded tion sponsored by Magaji the said fund has not been “The House is aware that<br />
to the adoption of a mo-<br />
The policy, which is first Competitiveness Advisory<br />
of its kind by the present Council, we shall phase out Federal Government’s efforts<br />
on the ease of doing concern over the plight of tractors.<br />
have dependents, responsi-<br />
Da’u Aliyu, who expressed used to pay indigenous con-<br />
most of those contractors<br />
administration, is facilitated export of primary products<br />
by the Nigerian Office for to which value has not been business, pointing out, “The thousands of local contractors<br />
amid lingering socio-<br />
that with the country exit-<br />
commitments, especially at<br />
“The House further notes bilities and various financial<br />
Trade Negotiations, headed added.”<br />
Switzerland economic minister<br />
would visit Nigeria next economic crisis.<br />
ing from economic reces-<br />
these trying times when the<br />
by Chiedu Osakwe and the He also pointed out,<br />
Statistician General of the “There is strategic focus in month to deepen stronger In his lead debate, Aliyu, sion which had adversely economy is experiencing difficulties<br />
and unemployment<br />
Federation, Yemi Kale, in the this first edition on Switzerland,<br />
as a country with tween both countries.” tion of the House, observed ing of Nigerians, the Federal is rife,” Ahmed<br />
economic relationship be-<br />
who called for the interven-<br />
affected the standard of liv-<br />
period under review, which<br />
observed.
34 BUSINESS DAY<br />
C002D5556<br />
Wednesday <strong>28</strong> <strong>Feb</strong>ruary <strong>2018</strong><br />
NEWS<br />
China Development Bank, UBA sign $100m<br />
loan deal to support SMEs in Africa<br />
IHEANYI NWACHUKWU<br />
United Bank for Africa<br />
(UBA) Plc, a pan-African<br />
banking group<br />
and China Development<br />
Bank (CDB),<br />
the world’s largest development<br />
finance institution, on <strong>Feb</strong>ruary<br />
27, <strong>2018</strong> announced the signing<br />
of a $100 million seven-year loan<br />
agreement to finance the development<br />
of small and medium<br />
enterprises (SMEs) in Africa.<br />
The $100 million loan will enhance<br />
UBA’s capacity to provide<br />
access to finance to small and medium<br />
enterprises (SMEs) across<br />
the 19 African countries where<br />
UBA currently operates.<br />
“We are excited to partner with<br />
China Development Bank (CDB),<br />
the Development Financial Institution<br />
of the Chinese Government,<br />
on this historic transaction, as we<br />
strongly believe that the facility will<br />
serve as a catalyst to the sustainable<br />
development of commerce<br />
and industry in Africa through<br />
provision of critical financial interventions<br />
to SMEs across our<br />
presence countries,” said Group<br />
Managing Director/CEO, UBA Plc,<br />
Kennedy Uzoka.<br />
Uzoka noted that this line of<br />
credit is timely, as it should complement<br />
the recovery of economic<br />
activities. It will also further encourage<br />
African entrepreneurship<br />
particularly as the funds will be<br />
applied to SMEs, which are important<br />
for inclusive growth on the<br />
continent.<br />
Speaking during the signing<br />
ceremony, Chairman of UBA Plc,<br />
Tony Elumelu said that the fund<br />
will boost small and medium scale<br />
enterprises across Africa, noting<br />
that CDB’s interest in supporting<br />
SMEs aligns with UBA’s vision in<br />
growing business across Africa.<br />
“In UBA, CDB would have an<br />
enduring partner in reaching out to<br />
Africans as UBA provides banking<br />
services to over 14 million people<br />
across 20 African countries, and<br />
like CDB, UBA funds critical infrastructural<br />
projects on the continent<br />
“ Elumelu said. He expressed that<br />
he would like to see an even stronger<br />
relationship grow with CDB<br />
and UBA as well as with China and<br />
Nigeria.<br />
Also commenting, the President<br />
of CDB, Zheng Zhijie, said<br />
the agreement is the beginning<br />
of cooperation between UBA and<br />
CDB that would translate into an<br />
enduring business relationship<br />
between China and Africa and<br />
Nigeria in particular.<br />
“UBA is a leading and dependable<br />
bank not only in Nigeria but<br />
Africa, and this partnership will<br />
help our Bank to accelerate its<br />
business objectives in Africa, more<br />
importantly as we deepen our investment<br />
in energy, road and rail<br />
constructions, infrastructure in<br />
Africa,” Zhije said.<br />
UBA, Africa’s global bank, is<br />
one of the largest commercial<br />
banks in Nigeria incorporated<br />
which operates in 19 African<br />
countries whilst providing a wide<br />
range of products and services.<br />
UBA is a leading bank in infrastructure<br />
financing particularly in<br />
the Power, Telecoms and Transport<br />
sectors. UBA leads in social<br />
infrastructure such as hospital<br />
and education facilities to various<br />
countries in Africa. In Nigeria, the<br />
bank operates in each of the country’s<br />
36 states, helping to deepen<br />
financial inclusion through its<br />
brick and mortar network as well<br />
as through its cutting edge digital<br />
platforms. Globally, UBA has over<br />
1,000 branches and customer<br />
touch points, serving over 14 million<br />
customers.<br />
Adesola Adeduntan (m), MD/CEO, First Bank of Nigeria Limited, receiving the African Banker of the Year<br />
Award from Joseph Beasley (2nd r), chairman, African Leadership Advisory Board; Lalao Ravalomanana (r),<br />
Mayor of Antananarivo; Seyi Oyefeso (l), group executive, commercial banking group, FirstBank, and Abdullahi<br />
Ibrahim (2nd l), executive director, public sector directorate, FirstBank, at the African Leadership Magazine<br />
Persons of the Year Award in Johannesburg, South Africa.<br />
Visionscape issuing N4bn bond priced at...<br />
Continued from page 1<br />
waste dumps marring its street<br />
corners.<br />
The offer which opened on<br />
<strong>Feb</strong>ruary 26 and closes today is<br />
being priced at 15.75 percent and<br />
has a 4.5 year tenor, according to<br />
sources familiar with the matter.<br />
Dubai based Visionscape undertook<br />
the Series 1 of the debt<br />
programme last year, raising<br />
a five-year N27 billion note at<br />
around 17 percent.<br />
The first coupon for the N27<br />
billion bond falls due March 5, the<br />
same day Visionscape is asking<br />
investors interested in series 2 to<br />
fund the debt.<br />
That timing is probably a coincidence<br />
rather than a case of Visionscape<br />
borrowing to make coupon<br />
payments for previous debt, one<br />
source told <strong>BusinessDay</strong>.<br />
An email to an address available<br />
on Visionscape’s website<br />
seeking comment went un-replied.<br />
“I suspect the bond offer is to<br />
manage their liquidity position<br />
rather than fund debt servicing,<br />
after all they didn’t raise the full<br />
amount they wanted last year;<br />
opting instead to do it in tranches,”<br />
a source who invested in last year’s<br />
bond told <strong>BusinessDay</strong>.<br />
“Perhaps, they will be in a tight<br />
position after paying the coupons<br />
and are not up for that,” the source<br />
added. “Revenues are probably<br />
low and they need to buy more<br />
trucks. Moreover, it’s just N4bn<br />
which can be raised in two days<br />
given they have the backing of<br />
Lagos state.”<br />
The first series last year was<br />
backed by an Irrevocable Standing<br />
Payment Order by the Lagos state<br />
government.<br />
Visionscape, whose workers<br />
spot lemon overalls with boots to<br />
go, popped up the scene last year<br />
after contracts with the indigenous<br />
Private Sector Operators<br />
then under the management of<br />
Lagos Waste Management Authority<br />
(LAWMA) broke down.<br />
The Lagos State Government<br />
launched the Clean Lagos Initiative<br />
(CLI), backed by Environmental<br />
Management and Protection<br />
Law, last September to protect the<br />
environment, human health, and<br />
social living standards of Lagos<br />
residents.<br />
The initiative led to the introduction<br />
of a Public Utility Levy<br />
and the establishment of an enforcement<br />
task force, the Lagos<br />
State Environmental Sanitation<br />
Corps (LAGESC), to facilitate<br />
enforcement.<br />
It is unclear if the levy is being<br />
paid duly by Lagos residents.<br />
Visionscape is said to have<br />
requested a guarantee from the<br />
Lagos state government, because<br />
it the firm was unsure when the<br />
Public Utilities Levy would be paid.<br />
Visionscape’s revenues come<br />
from these levies and if Lagos state<br />
doesn’t start collecting the levies,<br />
the latter doesn’t want to be left<br />
with the short end of the stick, a<br />
source told <strong>BusinessDay</strong>, explaining<br />
why Visionscape demanded<br />
a guarantee from Lagos- whose<br />
domestic debt stood at N312 billion<br />
and foreign debt of $1.5 billion<br />
as of June 2017, according to data<br />
by the Debt Management Office<br />
(DMO).<br />
There have been a lot of speculations<br />
about the ownership<br />
structure of Visionscape and why<br />
Lagos state Governor Akinwumi<br />
Ambode decided to dump an arrangement<br />
which had, to a large<br />
extent, helped Lagos rid itself of<br />
its unenviable status of ‘filth capital<br />
of world,’ for a new, untested<br />
model of waste evacuation.<br />
Since Visionscape began operations,<br />
the heaps of refuse on<br />
Lagos streets have taken a turn<br />
for worse, indicating a regression<br />
in waste management that has<br />
irked most.<br />
Lagos state residents complain<br />
on social media, using snapshots<br />
of mounting refuse dumps in their<br />
areas, that Visionscape usually<br />
allow refuse to pile up for days<br />
before sending their trucks and<br />
workers to evacuate them<br />
Abiodun Bamigboye, the Permanent<br />
Secretary of the Ministry<br />
of Environment, said last month<br />
that the levy would be handled<br />
by a unit in the ministry known as<br />
the Public Utility Monitoring and<br />
Assurance Unit and that the levy<br />
will start being charged when “we<br />
start the full activity of Visionscape<br />
packing the wastes on the roads.”<br />
With refuse taking over major<br />
roads, highways and inner streets<br />
in the state, threatening epidemic<br />
across the state, concerns have<br />
grown among the populace over<br />
a probable outbreak of cholera<br />
and other diseases in the state as<br />
a result of the improper disposal of<br />
waste in the last couple of months.<br />
MTN sticks to June listing for Nigeria...<br />
Continued from page 1<br />
provals for the listing including<br />
that of the Securities and Exchange<br />
Commission (SEC) and<br />
Nigerian Stock Exchange (NSE).<br />
MTN Group agreed to list the<br />
Nigerian unit on the Nigerian Stock<br />
Exchange this year as part of a June<br />
2016 agreement to pay a $1 billion<br />
fine for missing a deadline to disconnect<br />
unregistered subscribers<br />
amid a security crackdown.<br />
An insider with knowledge of<br />
the MTN Nigeria listing said, “We<br />
are sticking to the June date for<br />
coming to the market.”<br />
<strong>BusinessDay</strong> reported earlier<br />
that new highs of 10.61percent return<br />
seen this year at the Nigerian<br />
stock market forced the advisors<br />
to proposed MTN Nigeria shares<br />
listing to renter their boardrooms<br />
for proper pricing of their shares.<br />
Standard Bank Group Limited<br />
and Citigroup Incorporated<br />
have been advising Africa’s largest<br />
mobile-phone company on the<br />
disposal of as much as 30 percent<br />
of the Lagos-based unit on the<br />
Nigerian Stock Exchange.<br />
The Nigerian stock market rose<br />
by 42percent last year. MTN group<br />
announced in November that it<br />
had commenced processes for the<br />
proposed listing of its Nigerian unit<br />
on the NSE in <strong>2018</strong>.<br />
MTN crossed major huddles<br />
to the Nigeria unit listing after<br />
three different Emergency General<br />
Meetings (EGMs), the latest<br />
of which was held on Thursday<br />
last week.<br />
At the latest Emergency General<br />
Meeting, issues of complaints by<br />
different categories of shareholders<br />
and that of LATE shares managed<br />
by IBTC, among others were<br />
resolved.<br />
Oscar Onyema, Chief Executive<br />
Officer, Nigerian Stock Exchange<br />
told <strong>BusinessDay</strong> on the sideline<br />
of the 2017 market recap and <strong>2018</strong><br />
outlook that the Nigerian bourse is<br />
hopeful MTN Group will fulfil its<br />
statement on listing the shares of<br />
its Nigerian units this year.<br />
“We have always said the Nigeria<br />
listing is obviously subject<br />
to market conditions but it would<br />
seem at this stage more likely a<br />
<strong>2018</strong> event,” Ralph Mupita, CFO,<br />
MTN Group had said while presenting<br />
the group’s third-quarter<br />
(Q3) results.<br />
He said that the group feels<br />
pretty confident that it is seeing<br />
value share increase off the back<br />
of the investment that they have<br />
made in Nigeria. “So a very pleasing<br />
growth in service revenue level<br />
in Nigeria”.<br />
Top on the assignment of the<br />
advisers is to reach an acceptable<br />
pricing (valuation) of the shares to<br />
be listed.<br />
MTN is also preparing to raise<br />
as much as 2 billion cedis ($447<br />
million) through listing 35 percent<br />
of the subsidiary on the Ghana<br />
Stock Exchange in what will be the<br />
largest share sale in the country’s<br />
history.<br />
Nigeria and other sub-Saharan<br />
African governments are trying<br />
to gain more from international<br />
mobile-phone operators taking<br />
advantage of rising smartphone<br />
use and faster data speeds.<br />
Nigeria’s $2.5bn Eurobond could trigger...<br />
Continued from page 4<br />
borrowing is $20.9bn, narrowing<br />
the NGN-USD debt mix to 66:34<br />
(compared to 73:27 in Sept-2017),<br />
according to data compiled by<br />
research house United Capital<br />
Limited.<br />
“This indicates that the FGN is<br />
one step closer to its fiscal desire<br />
to adjust the debt mix to 60:40<br />
by 2019,” said analysts at United<br />
Capital.<br />
Ayodeji Ebo, managing director<br />
and CEO of Afrivest Securities<br />
Limited argued that while an<br />
increase in Gross Domestic Product<br />
(GDP) in 2017 after shrinking<br />
by 1.58 percent in 2016 presents<br />
an opportunity to raise cheaper<br />
funds, the expected hike in interest<br />
rates by the United States Federal<br />
Reserve (Feds) may negate this opportunity.<br />
The U.S 10-year Treasury yield<br />
spiked and held above 2.9 percent<br />
on Federal Reserve Chairman<br />
Jerome Powell’s assessment that<br />
the central bank won’t rush to raise<br />
rates even though he expects the<br />
economy to pick up steam.
Wednesday <strong>28</strong> <strong>Feb</strong>ruary <strong>2018</strong><br />
R-L: Henry<br />
Egbiki, EY<br />
Nigeria,<br />
country<br />
leader, with<br />
Titilayo<br />
Margaret<br />
Solarin, tutor-general/<br />
permanent<br />
secretary,<br />
representing<br />
Lagos State<br />
Ministry<br />
of Education,<br />
at the<br />
official commissioning<br />
of a new<br />
refurbished<br />
library<br />
at Elegbata<br />
Senior<br />
Secondary<br />
School, Olowogboro,<br />
Lagos, refurbished<br />
by<br />
EY Nigeria.<br />
Global business fraud jumps a<br />
record high to 49% in <strong>2018</strong><br />
DANIEL OBI<br />
Global economic<br />
crime in business<br />
has risen<br />
to a record high<br />
of 49 percent<br />
from 36 percent in 2016, as<br />
reported by PwC’s bi-annual<br />
survey of business crime.<br />
In the Global Economic<br />
Crime and Fraud Survey,<br />
which examined over 7,200<br />
respondents from 123 countries<br />
including Nigeria, 49<br />
percent of the respondents<br />
globally said their companies<br />
had suffered fraud in<br />
the last two years, up from<br />
36 percent in 2016.<br />
The survey said regionally<br />
Africa recorded 62% up<br />
from 57%; North America<br />
54% up from 37%, and Latin<br />
America 53% up from <strong>28</strong>%.<br />
These figures are highest levels<br />
of economic crimes.<br />
According to the survey,<br />
the findings from Nigeria<br />
followed a similar pattern<br />
with more than half of respondents<br />
(57%) reporting<br />
Lassa fever hits 18 states with 90 deaths, 1,081 suspected cases<br />
ANTHONIA OBOKOH<br />
More states of the<br />
federation are<br />
at risk as Lassa<br />
fever continues<br />
to spread in Nigeria with<br />
1,081 suspected cases and 90<br />
deaths in 18 states, according<br />
to a press statement by the<br />
Nigeria Centre for Disease<br />
Control (NCDC) on Tuesday.<br />
According to the agency,<br />
following the increasing<br />
number of Lassa fever cases,<br />
within a week, 54 new confirmed<br />
cases were recorded<br />
from eight states with 10 new<br />
deaths in confirmed cases<br />
from five states.<br />
“From 1st January to 25th<br />
<strong>Feb</strong>ruary <strong>2018</strong>, a total of<br />
1,081 suspected cases and 90<br />
deaths have been recorded<br />
actively in Edo, Ondo, Bauchi,<br />
Nasarawa, Ebonyi, Anambra,<br />
Benue, Kogi, Imo, Plateau,<br />
Lagos, Taraba, Delta, Osun,<br />
Rivers, FCT, Gombe, and Ekiti<br />
states, making 18 states.<br />
… procurement fraud most prevalent in Nigeria<br />
that their organisations have<br />
been victims of economic<br />
crime in Nigeria within the<br />
last two years up from 26%<br />
in 2016.<br />
“Globally, asset misappropriation<br />
(45%) continues<br />
to lead in economic<br />
crime experienced by organisations<br />
in the last 24<br />
months, cybercrime (31%),<br />
consumer fraud (29%) and<br />
business misconduct (<strong>28</strong>%)<br />
are close behind,” according<br />
to the report.<br />
The report said that Nigeria<br />
presents a slightly<br />
different picture with respondents<br />
indicating that<br />
Procurement fraud (38%)<br />
is the most prevalent economic<br />
crime in Nigeria in<br />
the last 24 months. This is<br />
followed by Bribery and<br />
Corruption (33%), Accounting<br />
fraud (32%) and<br />
Business misconduct at<br />
31%.<br />
“This year’s survey revealed<br />
a significant increase<br />
“This year, 69 percent of<br />
all confirmed cases are from<br />
Edo (43%) and Ondo (26%)<br />
states. Fourteen health care<br />
workers have been affected<br />
in six states Ebonyi - 7, Nasarawa<br />
-1, Kogi - 1, Benue -<br />
1, Ondo - 1 and Edo -3) with<br />
four deaths (Ebonyi - 3 and<br />
Kogi - 1),” the report states.<br />
Lassa fever is an acute<br />
viral haemorrhagic illness,<br />
transmitted to humans<br />
through contact with food or<br />
household items contaminated<br />
by infected rodents.<br />
Person-to-person transmission<br />
can also occur, particularly<br />
in hospital environment<br />
in the absence of adequate<br />
infection control measures.<br />
The agency further states<br />
that since the onset of <strong>2018</strong>,<br />
325 cases have been classified<br />
as: 317 confirmed cases,<br />
8 probable cases with 72<br />
deaths (64 in Lab confirmed<br />
and 8 in probable); Case Fatality<br />
Rate in confirmed and<br />
probable cases is 22 percent.<br />
(+6% to 52%) in the share of<br />
economic crime committed<br />
by internal actors. There was<br />
also a jump in the percentage<br />
of those crimes attributed<br />
to senior management<br />
(from 16% in 2016 to 24% in<br />
<strong>2018</strong>). However there are regional<br />
variations. In Australia<br />
(64%), the UK (55%), Canada<br />
(58%); Argentina (44%)<br />
and the US (48%), most reported<br />
crime was committed<br />
by external actors”.<br />
The results underline<br />
the greater awareness and<br />
understanding of the types<br />
of fraud, perpetrators, the<br />
role of technology, and<br />
fraud’s potential impacts<br />
and costs for a business,<br />
comments Cyril Azobu,<br />
PwC Nigeria’s Consulting<br />
Leader in the report<br />
“We can’t equate higher<br />
levels of reported crime with<br />
higher levels of actual crime.<br />
What the survey is showing<br />
us is that there is far more<br />
understanding of what fraud<br />
“There is need for the public<br />
to ensure and maintain<br />
adequate personal hygiene<br />
and environmental sanitation<br />
at all times as part of prevention<br />
and control measures<br />
against the spread of Lassa<br />
fever in the state,’’ Jide Idris,<br />
Lagos State commissioner for<br />
health, said in an interview<br />
with <strong>BusinessDay</strong>.<br />
The commissioner urged<br />
people to dispose refuse<br />
properly at designated<br />
dumpsites and not into the<br />
drainage, and store food<br />
items in rodent-proof containers.<br />
“Currently, Lassa fever<br />
are being followed up and<br />
testing across three laboratories<br />
in the country. The<br />
NCDC is working in collaboration<br />
with The Alliance<br />
for International Medical<br />
Action (ALIMA) and World<br />
Health Organisation (WHO)<br />
scaling up its support of the<br />
response at national and<br />
state levels,” the report says.<br />
is and where it is taking<br />
place. It’s particularly true<br />
of cybercrime, where there’s<br />
a much greater understanding<br />
of the issues, investigations,<br />
analysis, and greater<br />
investment in controls and<br />
prevention.<br />
“However, despite the<br />
progress in understanding<br />
and reporting, the fact<br />
that just over half (51%) of<br />
respondents say they have<br />
not, or don’t know if they<br />
have experienced fraud in<br />
the past two years, suggests<br />
blind spots still exist in many<br />
organisations” he said.<br />
CHANGE OF NAME<br />
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CORRECTION OF NAME<br />
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ADDITION OF NAME<br />
I, formerly known and addressed as<br />
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C002D5556<br />
Continued from back page<br />
from this humble pastor who<br />
was a Field Marshal in God’s<br />
vineyard!<br />
Billy Graham was the<br />
moral sentinel of America<br />
and easily one of the towering<br />
figures of our century. He<br />
condemned the debaucheries<br />
of our decadent age;<br />
objecting to homosexuality<br />
and same-sex marriage on<br />
moral grounds. A counsellor<br />
to presidents and monarchs;<br />
he reinvented the Christian<br />
faith to meet the worldview<br />
demands of our cruel, nihilistic<br />
age. He was a friend of<br />
American presidents Dwight<br />
Eisenhower, Richard Nixon,<br />
Gerald Ford, Bill Clinton and<br />
the two Bushes. According<br />
to Clinton, “When he prays<br />
with you in the Oval Office or<br />
upstairs in the White House,<br />
you feel he’s praying for you,<br />
not the president”.<br />
He was particularly close<br />
to Queen Elizabeth II of Britain.<br />
According to him, “No<br />
one in Britain has been more<br />
cordial toward us than Her<br />
Majesty Queen Elizabeth…I<br />
have always found her highly<br />
intelligent and knowledgeable<br />
about a wide variety<br />
of issues, not just politics.”<br />
Her Majesty once confided<br />
to him, “You do speak with<br />
such wonderful clarity and<br />
certainty…Above all things,<br />
I do think of myself as just a<br />
simple Christian.”<br />
Billy Graham was one of<br />
the architects of the ecumenical<br />
movement. He financed<br />
the Lausanne Conferences<br />
on World Evangelism; working<br />
tirelessly for unity in the<br />
body of Christ. A confidante<br />
to a succession of popes, he<br />
was awarded an honorary<br />
doctorate by Belmont Abbey<br />
College, a conservative<br />
catholic institution -- the<br />
first protestant leader to be<br />
so honoured.<br />
He was also close friends<br />
with Martin Luther Jr, whom<br />
he once bailed out when he<br />
was jailed in Alabama. He<br />
forbade segregation in all his<br />
crusades while ensuring that<br />
his evangelistic associates<br />
BUSINESS DAY<br />
39<br />
NEWS<br />
Billy Graham, moral man and immoral...<br />
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and addressed as Meeting Jolly<br />
Teleba. All former documents remain<br />
valid. General Public please take note.<br />
CHANGE OF NAME<br />
I, formerly known and addressed as<br />
Alao Abayomi Oritsetimeyin now<br />
wish to be known and addressed as<br />
Abayomi Oritsetimeyin Olatinwo.<br />
All former documents remain valid.<br />
General Public please take note.<br />
CHANGE OF NAME<br />
I, formerly known and addressed as<br />
Ukatu Chioma Esther now wish<br />
to be known and addressed as<br />
Oleru Chioma Esther. All former<br />
documents remain valid.<br />
General Public please take note.<br />
CHANGE OF NAME<br />
I, formerly known and addressed as<br />
Esther Jumai Amodu now wish to<br />
be known and addressed as Esther<br />
Shaibu. All former documents remain<br />
valid. General Public please take note.<br />
were mixed-race. He once<br />
warned white Americans<br />
that their racial arrogance<br />
will stand in judgement<br />
against them at the gates of<br />
heaven.<br />
The passing of his beloved<br />
Ruth in 2007 was one of the<br />
lowest points in his life. He<br />
himself was gradually overcome<br />
with several geriatric<br />
illnesses which necessitated<br />
his eventual retirement. The<br />
BGEA is currently headed<br />
by his son Franklin Graham.<br />
Tributes have come from<br />
far and wide. President<br />
Donald Trump has tweeted:<br />
“The great Billy Graham is<br />
dead. There was nobody like<br />
him! He will be missed by<br />
Christians and all religions.<br />
A very special man.” Vice-<br />
President Pence described<br />
him as a matchless voice<br />
that “changed the lives of<br />
millions”. Barack Obama<br />
describes him as “a humble<br />
servant who prayed for so<br />
many - and who, with wisdom<br />
and grace, gave hope<br />
and guidance to generations<br />
of Americans”. The Archbishop<br />
of Canterbury Justin<br />
Welby noted that “the debt<br />
owed by the global church<br />
to him is immeasurable and<br />
inexpressible”. Back home in<br />
Nigeria, Musa Asake, Publicity<br />
Secretary of the Christian<br />
Association of Nigeria,<br />
described Billy Graham as<br />
“a faithful preacher who<br />
worked for God and has gone<br />
to be with the Lord”.<br />
An ancient Jewish belief<br />
holds that the earth has<br />
been saved from perishing<br />
because of the devotions of<br />
a secret conclave of 30 holy<br />
ones, the Tzadikim Nistarim.<br />
I believe Billy Graham belonged<br />
among the Tzadikim.<br />
Regardless of your religion or<br />
belief system, we can agree<br />
in the innate value of having<br />
devout and righteous men<br />
and women who redeem the<br />
earth and serve humanity<br />
with loving-kindness, truth,<br />
justice and compassion. Billy<br />
Graham was such a man. In<br />
the inimitable language of<br />
Paul the Apostle, “he was all<br />
things to all men”.<br />
Billy Graham made<br />
friends across racial, class<br />
and religious barriers. He<br />
disagreed with his son Franklin<br />
Graham when he made<br />
rather uncomplimentary<br />
remarks about Islam. The<br />
awards and honours showered<br />
on him during his lifetime<br />
are far too numerous to<br />
be recounted here. He leaves<br />
behind five children and several<br />
grandchildren and great<br />
grand children.<br />
President Donald Trump<br />
has ordered that his simple<br />
coffin will lie in state on Capitol<br />
Hill before being moved<br />
for final interment on Friday<br />
2nd March in his hometown<br />
of Montreat, North Carolina.<br />
His funeral will be graced by<br />
present and former American<br />
leaders, among other<br />
distinguished personalities.<br />
Years ago he commented<br />
on the prospects of his own<br />
death: “Someday you will<br />
read or hear that Billy Graham<br />
is dead. Don’t you believe<br />
a word of it. I shall be<br />
more alive than I am now…I<br />
will have gone into the presence<br />
of God.”<br />
It is a fitting epitaph to a<br />
remarkable life.
WEST AFRICA<br />
ENERGY intelligence<br />
oil gas power<br />
Wednesday <strong>28</strong> <strong>Feb</strong>ruary <strong>2018</strong><br />
C002D5556<br />
BUSINESS DAY<br />
interview<br />
‘The world is rapidly<br />
moving towards<br />
an age of cleaner<br />
sources of energy’<br />
Page 4<br />
finance people<br />
appointments<br />
L-R: Bayo Ojulari (MD,SNEPCo); Saidu Mohammed(GED/COO-Gas & Power, NNPC); Joe Ezigbo (MD, Falcon Corporation); Sadeeq Mai-Bornu(DMD,NLNG);<br />
Ibe Kachikwu (Minister of State for Petroleum); Dada Thomas(President, NGA); Abdulrazaq Isa(MD, Waltersmith Petroman) during the gas session of the<br />
Nigeria International Petroleum Summit(NIPS<strong>2018</strong>) held recently in Abuja.<br />
Sea Trucks Group<br />
debunks WAV<br />
allegation<br />
Page 6<br />
OPEC weekly basket price<br />
DAY<br />
PRICE<br />
23/2/18 63.08<br />
15/2/18 61.17<br />
9/2/18 63.8<br />
2/2/18 66.87<br />
26/1/18 67.64<br />
Source: OPEC<br />
Debrief<br />
Should NLNG model be gold standard<br />
for gas contracts in Nigeria?<br />
ISAAC ANYAOGU<br />
At the executive roundtable<br />
discussion first<br />
Nigeria International<br />
Petroleum Summit<br />
(NIPS) in Abuja, last<br />
week, Sadeeq Mai-Bornu, deputy<br />
managing director of Nigeria<br />
LNG Limited (NLNG) said the<br />
NLNG business model needs to<br />
be replicated in order to generate<br />
opportunities for the power and<br />
gas sectors in the country.<br />
“We sign a 20-year contract<br />
for the supply of molecules and<br />
we can actually go to the bank<br />
and get the funding we need.<br />
When NLNG was set up, it had<br />
guarantees and incentives that<br />
safeguarded investments and<br />
returns. There was also the sanctity<br />
of contracts. That is what has<br />
helped NLNG. This model needs<br />
to be developed in the upstream<br />
and downstream,” was quoted as<br />
saying.<br />
Mai-Bornu also said, “Moving<br />
forward, NLNG is investing<br />
in expansion with a Train 7 project.<br />
It involves a huge amount of<br />
money but because the markets<br />
are there, we are in the position<br />
to invest up to $5 to $10 billion<br />
both in the upstream for the gas<br />
supply and in the infrastructure<br />
to construct the Train. There is<br />
opportunity in that area.”<br />
It is important to note certain<br />
critical factors that have helped<br />
the NLNG achieve success. The<br />
company operates in the midstream<br />
sector which means<br />
that the bulk of the risks of gas<br />
exploration have been taken by<br />
the upstream companies. Also,<br />
International Oil Companies<br />
(IOCs) have participated in the<br />
NLNG because of strong assur-<br />
ances and commitments from<br />
Nigeria which literally elevated<br />
the NLNG Act to the status of a<br />
treaty. This helped to insulate<br />
the contract from the vagaries<br />
of regulatory uncertainties until<br />
now.<br />
Last year, the House of Representatives<br />
amended the NLNG<br />
Act compelling it to make contributions<br />
to government agencies<br />
including NDDC removing the<br />
assurance and guarantees it had<br />
hitherto enjoyed.<br />
This occurred at a time the<br />
NNPC is negotiating Train 7 of<br />
the NLNG with various parties<br />
to the contract. The lawmakers<br />
did not care about the bigger<br />
picture: the need for the country<br />
to monetise its gas resources<br />
using the NLNG model which<br />
has proven effective, the possibility<br />
of Trains 7 and 8 adding<br />
new 18,000 jobs.<br />
The senate has not amended<br />
the NLNG Act as the lower<br />
house has done which remains<br />
the hope of the Act for now. Nigeria<br />
was willing to forego benefits<br />
of billions of dollars in taxes<br />
and dividends just to ensure<br />
the NLNG pays a 3 percent annual<br />
budget to NDDC. It did not<br />
matter that paying a 3 percent of<br />
NLNG budget to NDDC would<br />
not create the same amount of<br />
jobs and investments.<br />
Nigeria’s LNG could not kick<br />
off after it was first proposed in<br />
1968 because of the huge capital<br />
investment required which<br />
Nigeria did not have. Investors<br />
wanted assurances and guarantees<br />
that they will recoup their<br />
investments. In 1990 Nigeria<br />
granted the investors a ten year<br />
pioneer status as well as generous<br />
concessions that prohibited<br />
further taxation and levies.
Wednesday <strong>28</strong> <strong>Feb</strong>ruary <strong>2018</strong><br />
02 BUSINESS DAY<br />
C002D5556<br />
WEST AFRICA<br />
Outlook<br />
Gambia:<br />
New funding for offshore Gambia<br />
FAR Ltd has<br />
signed a farmout<br />
agreement<br />
with a subsidiary<br />
of Petronas<br />
for a 40 percent interest<br />
in each of The Gambia’s<br />
blocks A2 and A5. Following<br />
the deal, Petronas will<br />
fund 80 percent of the total<br />
well costs of the Samo-<br />
1 exploration well, up to<br />
a maximum total cost of<br />
$45 million. Petronas will<br />
also fund FAR’s share of<br />
non-well costs up to a<br />
maximum amount of $1.5<br />
million.<br />
FAR will retain a 40<br />
percent interest in each<br />
of the A2 and A5 licenses<br />
and will remain operator<br />
through the exploration<br />
phase. Samo-1 is expected<br />
to be drilled in late<br />
<strong>2018</strong> and will be the first<br />
exploration well offshore<br />
The Gambia since 1979.<br />
FAR Managing Director<br />
Cath Norman said<br />
the deal is a testament to<br />
the emerging value of the<br />
broader West African basin.<br />
“Success in this well<br />
would be of significant<br />
value to our shareholders<br />
and truly transformational<br />
for the people of<br />
The Gambia,” she said in a<br />
statement.<br />
An audit of geotechnical<br />
data show the Samo<br />
and Bambo prospects off<br />
the coast of Gambia hold<br />
combined best estimate<br />
Libya:<br />
Production may suffer on budget delays<br />
Libya’s crude oil<br />
output, which is<br />
reportedly now<br />
more than 1 million<br />
b/d, could suffer as<br />
state-owned National Oil<br />
Corp. continues to wait for<br />
its budget from the government,<br />
the company’s CEO<br />
said.<br />
“The entire sector is suffering<br />
from these problems<br />
because of the delay of the<br />
Ministry of Finance in disbursing<br />
the budgets for the<br />
corporation this year,” CEO<br />
Mustafa Sanalla said.<br />
NOC receives its budget<br />
prospective reserves of<br />
1.1 billion barrels. The<br />
Samo prospect in particular<br />
holds substantial<br />
promise, with an estimated<br />
chance of success of<br />
more than 50 percent.<br />
FAR stays on as the<br />
operator through the exploration<br />
phase offshore<br />
Gambia, and PETRONAS<br />
has the right to become<br />
the operator once development<br />
begins. Drilling<br />
from the Central Bank of<br />
Libya, which is authorized<br />
by the internationally recognized<br />
government in<br />
Tripoli.<br />
Sanalla’s comments<br />
come after meetings with<br />
NOC subsidiary Al-Jouf<br />
Oil Technology Co. and<br />
Spain’s Repsol, a key partner<br />
which operates the<br />
300,000 b/d Sharara oil<br />
field in the southern Murzuq<br />
basin. Al-Jouf specializes<br />
in oil field services for<br />
exploration, drilling and<br />
production.<br />
“This slowdown will<br />
have serious consequences<br />
for the entire sector,<br />
which will lead to a decline<br />
in the level of production<br />
again in large proportions<br />
in addition to having a<br />
negative impact on development<br />
projects,” Sanalla<br />
said.<br />
Sanalla has complained<br />
is expected late this year<br />
in what will be the first<br />
exploration campaign<br />
for Gambia in nearly 40<br />
years.<br />
FAR’s permit area offshore<br />
Gambia, which covers<br />
1,000 square miles,<br />
is adjacent to its flagship<br />
SNE discovery offshore<br />
Senegal. The initial oil<br />
discovery offshore Senegal<br />
was made in 2014<br />
and met the minimum<br />
threshold for a commercial<br />
opportunity by the<br />
third quarter 2016.<br />
West African countries<br />
have been at odds over<br />
their maritime borders,<br />
while officials there have<br />
been vetting their corporate<br />
options as the potential<br />
for oil evolves. In October,<br />
African Petroleum<br />
said its subsidiaries in<br />
Gambia filed requests for<br />
arbitration at an international<br />
dispute chamber to<br />
protect two of its offshore<br />
licenses.<br />
about the problem before,<br />
telling a Chatham House<br />
conference in London in<br />
late January that NOC received<br />
only 50 percent of<br />
its capital spending allocation<br />
from Tripoli last year.<br />
He has also previously said<br />
the lack of money caused<br />
the loss of 90,000 b/d.<br />
Libya produced around<br />
980,000 b/d in January, according<br />
to the latest S&P<br />
Global Platts survey of<br />
OPEC producers. This is<br />
well below the 1.6 million<br />
b/d output seen before<br />
the country’s revolution in<br />
2011.<br />
Production has since<br />
fluctuated due to the lack<br />
of finances available, as<br />
well as disruptions from<br />
frequent protests and security<br />
threats. The lost revenues<br />
from exports have<br />
further exacerbated the<br />
country’s cash flow problems.<br />
Brief<br />
Kenya:<br />
Kenya Pipeline boosts oil-storage<br />
capacity by 22 percent with tanks<br />
Kenya Pipeline<br />
Co. will spend<br />
$52 million<br />
building four<br />
new tanks that will increase<br />
its storage space<br />
by more than a fifth, Joe<br />
Sang, Managing Director<br />
said.<br />
KPC is adding capacity<br />
to meet growing demand<br />
for fuels in East<br />
Africa, the continent’s<br />
fastest growing subregion,<br />
according to the<br />
African Development<br />
Bank. The additional<br />
tanks will accommodate<br />
increased volume<br />
from a new pipeline being<br />
built from the port of<br />
Mombasa to the capital,<br />
Nairobi that will be<br />
completed in April Sang<br />
said.<br />
“The project will<br />
enhance operational<br />
flexibility, capacity of<br />
product receipt and<br />
evacuation of product<br />
in Nairobi once the new<br />
Mombasa-Nairobi pipeline<br />
is operational,” he<br />
said.<br />
The tanks will be<br />
built in Nairobi by May<br />
oil<br />
and each hold 33.4 million<br />
liters, increasing the<br />
state-owned company’s<br />
capacity to 745 million<br />
liters from 612.3 million<br />
liters. The Nairobi-Mombasa<br />
pipeline, known as<br />
No. 5, will have a 20-inch<br />
diameter and replaces an<br />
existing 14-inch conduit.<br />
Kenya’s strategic petroleum<br />
reserves will triple<br />
to 90 days once the new<br />
tanks are commissioned<br />
and when an old refinery<br />
in Mombasa, which is<br />
now being used as storage,<br />
is refurbished, Sang<br />
said. Increased storage<br />
capacity will also save<br />
fuel-importers demurrage<br />
charges they’ve been<br />
incurring as vessels wait<br />
at the Mombasa port to<br />
discharge fuel into KPC’s<br />
system, he said.<br />
Kenya distributes fuel<br />
to neighboring countries<br />
including Uganda, Rwanda,<br />
Burundi and eastern<br />
Democratic Republic of<br />
Congo. KPC is currently<br />
building an oil jetty on<br />
Lake Victoria to improve<br />
the reliability of its supplies.
Wednesday <strong>28</strong> <strong>Feb</strong>ruary <strong>2018</strong><br />
gas<br />
Brief<br />
Nigeria:<br />
Global energy market forecast favours<br />
gas - Tony Attah<br />
The Managing Director<br />
and Chief<br />
Executive Officer<br />
of Nigeria LNG<br />
Limited (NLNG), Tony Attah,<br />
said projections put<br />
gas in the top quartile of<br />
the most competitive and<br />
strategic investments in<br />
the global energy market.<br />
Attah spoke at an executive<br />
roundtable discussion<br />
titled “Growth<br />
Outlook and Strategies for<br />
Staying Competitive after<br />
a Global Downturn” at the<br />
first Nigeria International<br />
Petroleum Summit (NIPS)<br />
holding in Abuja.<br />
Attah remarked that<br />
a combination of factors<br />
will give gas an edge as the<br />
preferred energy of the future,<br />
adding that the global<br />
LNG trade is projected to<br />
nearly triple, from about<br />
12 Trillion Cubic Feet (Tcf)<br />
in 2015 to around 31 Tcf in<br />
2040.<br />
“Electric power sector<br />
carbon emissions are projected<br />
to be flat through<br />
2050 as a result of favourable<br />
market conditions for<br />
natural gas and supportive<br />
policies for renewables<br />
compared with coal. The<br />
projections are underpinned<br />
by the prospect of<br />
the global economy growing<br />
at an average rate of 3.4<br />
percent per year, a population<br />
that expands from<br />
7.4 billion today to more<br />
than 9 billion in 2040, and<br />
a process of urbanisation<br />
that adds a city the size of<br />
Shanghai to the world’s urban<br />
population every four<br />
months.<br />
Mozambique:<br />
Mozambique LNG signs first binding<br />
long-term contract with France’s EDF<br />
Mozambique<br />
LNG and<br />
France’s EDF<br />
have signed<br />
a long-term LNG sale and<br />
purchase agreement for the<br />
supply of 1.2 million mt/<br />
year of LNG over 15 years,<br />
project operator Anadarko<br />
Petroleum Corporation<br />
said in a statement.<br />
Mozambique LNG has<br />
signed supply agreements<br />
for a combined of more<br />
than 5 million mt/year, but<br />
this is the exporter’s first<br />
binding contract. A 20-year<br />
SPA, Mozambique LNG’s<br />
first, signed with Thailand’s<br />
state-owned PTT in September<br />
for the delivery of<br />
2.6 million mt/year, is still<br />
pending approval by the<br />
government of Thailand.<br />
“This SPA gives us flexible<br />
access to Europe, which<br />
is one of our key strategic<br />
markets,” said Mitch Ingram,<br />
Anadarko executive<br />
vice president, International<br />
and Deepwater Operations<br />
and Project Management.<br />
“EDF is one of the<br />
world’s largest electric utilities,<br />
and reaching this SPA<br />
continues to validate Mozambique<br />
LNG’s position<br />
as a competitive long-term<br />
LNG supplier and as one of<br />
the world’s leading greenfield<br />
projects.”<br />
KELECHI EWUZIE<br />
C002D5556<br />
BUSINESS DAY<br />
03<br />
WEST AFRICA<br />
ENERGY intelligence<br />
West Africa needs to make her<br />
abundant gas resources count<br />
West Afr<br />
i c a n<br />
growing<br />
gas<br />
hotspots<br />
are becoming increasingly<br />
attractive to global<br />
investors and exploration<br />
companies. Recent<br />
trends are indicative of<br />
the fact that interest in<br />
established and emerging<br />
gas regions in Nigeria and<br />
Ivory Coast point to an<br />
increase possibilities for<br />
investors to tap into gas<br />
sector.<br />
A cursory look at the<br />
West Africa region show<br />
that the abundant natural<br />
resources have played<br />
a central part in the economic<br />
development of<br />
many of its constituent<br />
nations.<br />
Report shows that increased<br />
exploration activity<br />
in the gas sector has<br />
generated a raft of discoveries<br />
both offshore and<br />
onshore. According to<br />
figures from International<br />
Energy Agency, a third of<br />
all gas discoveries in the<br />
last five years were made<br />
in sub-Saharan Africa,<br />
this is a trend that looks<br />
set to continue for the<br />
foreseeable future.<br />
Industry watchers observed<br />
that this is a reflection<br />
of an investment<br />
shift in the industry including<br />
majors but especially<br />
mid-level frontier<br />
exploration companies<br />
to gradually disengage<br />
from mature markets with<br />
strict regimes and move<br />
towards high-potential<br />
emerging resource regions<br />
in the hopes of<br />
making a big find.<br />
They maintain that the<br />
steady rise in foreign investment<br />
in African offshore<br />
is a reassuring indication<br />
that geographical<br />
risk on the continent is<br />
becoming less of an issue<br />
for many investors and<br />
exploration companies.<br />
The flurry of gas exploration<br />
offshore Mauritania<br />
is encouraging news<br />
for a country in need of<br />
new sources of revenue<br />
and employment.<br />
Those who know in<br />
the industry observed<br />
that challenges and risks<br />
still exist in West Africa,<br />
especially in the form of<br />
regulatory uncertainty as<br />
countries, some of which<br />
are new entrants to the<br />
gas sector, work to establish<br />
regimes that will attract<br />
foreign money while<br />
also spreading a fair share<br />
of the economic benefits<br />
to people at a local and<br />
national level.<br />
According to them<br />
“Country by country, examples<br />
has emerged that<br />
provide insight into what<br />
to expect for overseas investors<br />
looking for opportunities<br />
in West Africa’s<br />
gas sector.<br />
Nigeria has long been<br />
an energy titan in Africa,<br />
especially in West Africa<br />
leading the continent in<br />
oil production and attracting<br />
exploration companies<br />
to increasingly<br />
move into deepwater<br />
blocks.<br />
In the opinion of experts,<br />
despite the impressive<br />
accomplishments<br />
being made offshore in<br />
Nigeria, now is a crucial<br />
and arguably precarious<br />
time for the nation’s gas<br />
sector.<br />
Nigeria’s desire to create<br />
a more modern, reliable<br />
and stringent set of<br />
regulations for gas producers<br />
are important<br />
because a stable regulatory<br />
framework can help<br />
reduce the uncertainty of<br />
potential investors.<br />
To analysts, the PIB<br />
could have a decisive influence<br />
on Nigeria’s prospects<br />
as a gas investment<br />
hotspot, especially as<br />
onshore and shallow water<br />
projects may receive<br />
a boost under the Petroleum<br />
Industry Bill (PIB).<br />
Nigeria is facing increased<br />
gas competition<br />
in West Africa, from established<br />
and well-developed<br />
rivals like Angola<br />
and Ghana to offshore<br />
wildcards like Mauritania<br />
and Sierra Leone, all of<br />
which hold significant investment<br />
potential.<br />
Ivory Coast is looking<br />
to diversify its economy<br />
by further exploiting its<br />
offshore gas resources.<br />
The country’s waters are<br />
busy with exploration<br />
activities and significant<br />
discoveries have been<br />
made by companies.
Wednesday <strong>28</strong> <strong>Feb</strong>ruary <strong>2018</strong><br />
04 BUSINESS DAY<br />
C002D5556<br />
WEST AFRICA<br />
ENERGY intelligence<br />
Maximising Nigeria’s huge<br />
potential oil and gas sector<br />
feature<br />
CYNTHIA EGBOBOH, Abuja.<br />
plained that tackling the challenges of<br />
the industry, the State has embarked<br />
on reforms of the gas and power sector<br />
as the need power cannot be generated<br />
without gas.<br />
Moving forward, Wale opined that<br />
there is need for collaboration between<br />
the state and federal government to enhance<br />
effective policy and regulation in<br />
the industry.<br />
“In Lagos what we did was to embark<br />
on reforms for the power and gas sector,<br />
noting that we cannot generate the<br />
needed power without gas, so what the<br />
Lagos state governor has done is to put<br />
together the energy program aimed at<br />
achieving a 3000 mega-watt of electricity<br />
within the next 3-5 years”.<br />
However, the minister of petroleum,<br />
Ibe Kachikwu looking at the future<br />
identified the present challenges<br />
of the sector to include ineffective<br />
regulatory system, lack of transparency<br />
in operations, insecurity, cost of<br />
operation and policies yet to be implemented.<br />
Speaking on these challenges, the<br />
minister said that there is need to reevaluate<br />
the regulations governing the<br />
activities of the sector to make it attractive<br />
for investment stressing that there<br />
are some policies that are yet to be implemented.<br />
On security, the minister said that the<br />
government has put measures in place<br />
to address the insecurity issues faced in<br />
Niger delta explaining that measure has<br />
been put place to incorporate them into<br />
the oil sector initiative and the Nigeria<br />
economy as a whole.<br />
Experts also showed concern at the<br />
level of transparency with data in the in-<br />
Experts have suggested ways<br />
that Nigeria’s oil and gas sector<br />
could maximise its huge<br />
potential at the week-long<br />
Nigerian International Petroleum<br />
Summit-An African Petroleum<br />
Technology and Business Conference<br />
(APTC) held last week in Abuja.<br />
Don Obot Etibet, former minister<br />
of state for petroleum at the <strong>2018</strong> Nigeria<br />
International Summit explained<br />
that Nigeria oil and gas sector has for<br />
long been held down by politics, nepotism,<br />
corruption, and a host of others<br />
so much so that the industry grew<br />
around friendship, relationship and<br />
proxies and these led to doing things<br />
without following due processes.<br />
What should have been done properly<br />
was not done and it led to control by<br />
the government which needed someone<br />
to resist it.<br />
“What should have been done properly<br />
were not done and it led to control<br />
by the government”, Etibet said.<br />
Alex Neyin, Managing Director, GAC-<br />
MORK Nigeria Limited stressed that one<br />
of the things worth noting from the past<br />
is the instability of price which threatened<br />
the integrity of the management<br />
of the industry, identifying that Low oil<br />
price is a lesson to Nigeria and we must<br />
sustain the low price knowing that when<br />
prices are low profit will increase.<br />
Markson Fefegha, Commissioner<br />
of Mineral Resources, Bayelsa explained<br />
that with the recent crisis led<br />
by the Niger delta youths which resulted<br />
to the destruction of pipelines<br />
and losses, it is worth noting that the<br />
fiscal policy is not effective at the indigenous<br />
places where oil production<br />
are carried out.<br />
“There is therefore need for the development<br />
of a federal fiscal policy<br />
that will regulate the operations of<br />
both the state and federal players in<br />
the industry. When regulations are not<br />
properly communicated to the people<br />
in a way that it will benefit them, there<br />
is bound to bound to problems”, said<br />
Fefegha<br />
Oluwo Wale, commissioner for energy<br />
and mineral resources, Lagos exdustry<br />
noting that it is a major contributor<br />
to price fluctuation.<br />
Odulaja Dapo, Head, Data Service<br />
Department, Research Division OPEC,<br />
explained that Non-transparency with<br />
data in the energy industry is a major<br />
contributor to price fluctuation in the<br />
country.<br />
“The industry has gone through cycles<br />
of price fluctuation and this is not<br />
convenient for the producers and consumers<br />
alike. There is need to promote<br />
more data collection as the industry is<br />
becoming data intensive”.<br />
According to him, Africa should not<br />
be left behind in the contribution to data<br />
gathering initiative that was recently<br />
launched by OPEC and others adding<br />
that the initiative is being embraced by<br />
more countries but only few contribution<br />
from the Africa countries.<br />
L-R: Chizor Malize, managing partner, Brandzone Consulting LLC; Joseph Ezigbo, managing director, Falcon Corporation Limited; Dada Thomas,<br />
president, Nigeria Gas Association/managing director, Frontier Oil Ltd; Audrey Joe-Ezigbo, co-founder/executive eirector, Falcon Corporation<br />
Limited; Demola Adeyemi-Bero, chairman, Independent Petroleum Producers Group/ managing director, First E & P Ltd recently at the Nigeria<br />
International Petroleum Summit Abuja.
Wednesday <strong>28</strong> <strong>Feb</strong>ruary <strong>2018</strong> C002D5556 BUSINESS DAY 05<br />
INTERVIEW<br />
WEST AFRICA<br />
ENERGY intelligence<br />
‘The world is rapidly moving towards<br />
an age of cleaner sources of energy’<br />
CHIKEZIE NWOSU is the Chairman, Society of Petroleum Engineers (SPE) NIgeria Council. In this interview with Frank Uzuegbunam, Editor,<br />
West Africa Energy Intelligence he talks about the forth coming 18th Oloibiri Lecture Series and Energy Forum amongst other issues. Excerpts:<br />
What are the consideration behind the<br />
Annual Oloibiri Lecture Series and Energy<br />
Forum?<br />
The SPE OLEF is an annual lecture<br />
series focused on contributing to<br />
oil and gas policy development<br />
of Nigeria in commemoration of<br />
the first oil well drilled in Nigeria<br />
by Shell Darcy at Oloibiri, in Ogbia, Bayelsa<br />
State in 1956. It has become a forum where<br />
SPE NC brings together the key industry<br />
players from policy / legislature, regulatory<br />
/ federal executive, investors, operators, service<br />
companies etc. to discuss on topical issues<br />
in the oil and gas industry, with a view<br />
to influencing the right policy direction to<br />
enable the growth of the industry and the<br />
Nigerian economy, thereby impacting positively<br />
on the all Nigerians.<br />
Looking back from the inception of<br />
this annual dialogue, what are the tangible<br />
benefits of this initiative you can relate<br />
with?<br />
This is the 18th edition of the SPE OLEF<br />
series, and from the first edition the expansion<br />
into Deep Water, marginal fields policy,<br />
local content policy, the Gas Master Plan,<br />
Fiscal policy, cost effectiveness challenges<br />
in the Nigerian business environment, gas<br />
flaring policy, Regulations and transparency,<br />
energizing the full gas value chain (from<br />
producers to end users), amongst other<br />
critical topical issues, have helped to shape<br />
current and emerging policy directions in<br />
Nigeria.<br />
Of note is the Ministry of Petroleum Resources<br />
consolidation of a lot of these issues<br />
into the ‘7 Big Wins’ policy document that is<br />
being driven with such energy and passion<br />
by the Honorable Minister of State for Petroleum<br />
Resources, Dr. Emmanuel Ibe Kachikwu,<br />
with the support of the GMD NNPC, Dr.<br />
Kachalla Maikanti Baru and the heads of<br />
parastatals within the Ministry of Petroleum<br />
Resources.<br />
The major challenge is the stability and<br />
sustainability of these policies beyond the<br />
term of office of the key drivers, and this is<br />
where SPE and similar professional organizations<br />
like NAPE, NMGS, NSE, NAE, PET-<br />
AN, OGTAN etc. can play a major role.<br />
How has Society of Petroleum Engineers<br />
(SPE) a global professional association<br />
impacted the Nigerian oil and gas<br />
sector generally?<br />
The SPE is a non-profit and apolitical<br />
professional organization, regulated by international<br />
best practices through the SPE<br />
International (established in 1957). We are<br />
therefore in a unique position to provide<br />
unbiased advice to the authorities for the<br />
better good of Nigeria, without the accusa-<br />
tion of working in our own, or anyone else’s,<br />
personal interest. In addition, we provide<br />
an international perspective, through both<br />
our relationship with SPEI, but especially<br />
through a lot of our members who have<br />
many decades of experience working internationally.<br />
Of recent, as noted, many policy<br />
directions the Nigerian Government have<br />
taken are supported either indirectly by SPE<br />
NC or directly through our members who<br />
consult for both the National Assembly and<br />
the Federal Executive.<br />
This international perspective is perfectly<br />
balanced with our local knowledge and<br />
provides a powerful tool to influence and<br />
support Government policy. Of note is our<br />
ability to attract foreign direct investments<br />
(FDIs) to Nigeria through our annual flagship<br />
event, the SPE Nigerian Annual International<br />
Conference and Exhibition, which<br />
has been a resounding success in bringing<br />
the World to Nigeria.<br />
In line with this, the very successful Nigeria<br />
International Petroleum Submit (NIPS)<br />
championed by the Honorable Minister<br />
of State for Petroleum Resources, and held<br />
from 18 – 22 <strong>Feb</strong>ruary in the ICC Abuja, had<br />
SPE NC Resource persons supporting this<br />
event.<br />
Within the country, we continue to provide<br />
world class courses at heavily subsidized<br />
rates (sometimes entirely free)<br />
through our Distinguished lecture series<br />
(about 10 a year), monthly Technical sessions<br />
across the five sections in Nigeria<br />
(Abuja, Lagos, Port-Harcourt, Benin & Warri),<br />
short courses by our most experienced<br />
members, a Professional Development program<br />
for our ‘members in transition’ and an<br />
annual Students Technical Symposium &<br />
Exhibition (STSE – hosted by the Nile University<br />
of Nigeria, Abuja from 15 -17 March<br />
<strong>2018</strong>).<br />
These courses cover technical and commercial<br />
areas in the oil & gas business, but<br />
also ethical and strategic leadership courses<br />
to prepare the next generation of practitioners<br />
in the industry for the challenges<br />
ahead.<br />
We also have embedded in SPE, the<br />
Committee of Heads of Petroleum Engineering<br />
Departments (CHPED) which is<br />
rebuilding the curriculum for Petroleum<br />
Engineering in Nigerian Institutions, in collaboration<br />
with the Nigerian Society of Engineers<br />
(NSE) and as directed by the Council<br />
of Registered Engineers (COREN), to ensure<br />
graduates of Petroleum Engineering are ‘industry-ready’.<br />
We are also socially responsible<br />
through our various charity events across<br />
all our sections, outreach programs in primary,<br />
secondary and tertiary institutions<br />
that teach about the responsible uses of<br />
Energy.<br />
Finally, SPE NC is collaborating with the<br />
NCDMB to create an indigenous R&D environment<br />
and culture, which will ensure<br />
technology adaptation (utilizing our vast local<br />
resources) and innovation keep Nigeria<br />
at pace with, or ahead of, the fast-changing<br />
world of technology.<br />
What make the theme of OLEF <strong>2018</strong><br />
relevant at this time?<br />
In line with our well-established tradition,<br />
this year’s SPE OLEF is themed along<br />
a critical and topical issue ‘’The Nigerian<br />
Oil Industry in a World of Changing Energy<br />
Supply: Are we prepared?’<br />
It has become clear that, with anticipated<br />
growth in energy demand, the world<br />
is rapidly moving towards an age of cleaner<br />
sources of energy. For fossil fuels, this will<br />
mean a greater reliance on gas and less reliance<br />
on oil and, especially, coal. In addition,<br />
hydroelectric and gas powered cars will replace<br />
diesel engines and, with time, gasoline<br />
engines.<br />
Add to this the growing investments in<br />
renewable sources of energy such as Solar<br />
and wind, and it becomes evident that Nigeria<br />
must rethink (or rejig) its energy policy to<br />
solidify on the gains in the oil & gas industry<br />
(the 7 Big Wins), and leverage on these<br />
learnings to prepare for an energy mix that<br />
will become less reliant on the more polluting<br />
fossil fuels.<br />
There are many opinions on how long reliance<br />
on fossil fuels will last- many of these<br />
opinions are predicated on the huge remaining<br />
resources of oil and gas. However,<br />
one must note the oft quoted statement that<br />
‘the stone age did not end because mankind<br />
ran out of stones, and the oil age will<br />
end long before we run out of oil’. The pressure<br />
from the next generation of leaders will<br />
drive technological advances that will result<br />
in less reliance on environmental damaging<br />
energy, and we (Nigeria) must be ready<br />
now.<br />
Fate has played a major role in ensuring<br />
that we can stay ahead – abundant energy<br />
from the sun, wind energy in many Northern<br />
parts of the country and an estimated<br />
190Tcf of gas (and prospective resources<br />
that could be as high as 600Tcf),<br />
What do you see in the future for SPE<br />
and the Oil sector in Nigeria in the few<br />
years you have lead the society?<br />
The SPE will continue to play a strong role<br />
in policy direction and execution through<br />
ensuring that the outcome of its engagements<br />
are well documented and presented<br />
to the authorities, encouraging its members<br />
to provide the expertise in their field/s to<br />
Government either through consultancy<br />
or service, provide forums for bringing the<br />
world to Nigeria and Nigeria to the world,<br />
collaborating with Government agencies<br />
in such areas as indigenizing R&D capacity<br />
and capability, supporting the provision of<br />
pedagogical aids to Universities and Training<br />
Institutes, ensuring the curriculum for<br />
PE & Geosciences and related disciplines<br />
in the University delivers industry-ready<br />
graduates and supporting the strategic and<br />
ethical leadership of the next generation of<br />
entrepreneurs, employers and workers in<br />
the energy industry. All aligned with the ‘7<br />
Big Wins’.
Wednesday <strong>28</strong> <strong>Feb</strong>ruary <strong>2018</strong><br />
06 BUSINESS DAY<br />
C002D5556<br />
WEST AFRICA<br />
ENERGY intelligence<br />
Brief<br />
TOTAL Nigeria presents Starter Packs<br />
to graduands of its 2016/17 Skills<br />
Acquisition Beneficiaries<br />
Total Nigeria has<br />
presented Starter<br />
Packs to 2016/17<br />
Skiils Acquisition<br />
beneficiaries in Koko,<br />
Delta State.<br />
During the presentation<br />
event, Jean-Philippe<br />
Torres, managing director,<br />
TOTAL Nigeria PLC<br />
said that building strong<br />
partnerships for sustainable<br />
development is part<br />
of Total Nigeria Plc’s corporate<br />
philosophy and<br />
one that is central to all<br />
our decision making processes.<br />
“Our societal approach<br />
to corporate social responsibility<br />
aims at building<br />
strong relationships<br />
with our stakeholders<br />
through structured and<br />
constructive dialogue,<br />
and addressing the identified<br />
need areas from our<br />
shared perspectives. This<br />
helps us to better understand<br />
our stakeholders’<br />
expectations, and where<br />
legitimate, meet them”,<br />
said Torres.<br />
Torres said that capacity<br />
building provides more<br />
sustainable contribution<br />
to economic and social<br />
development of people<br />
and communities, than<br />
support to investments or<br />
running cost.<br />
The Total Skills Acquisition<br />
Program is<br />
a sustainable youth<br />
development scheme<br />
were less privileged<br />
youths of our host communities<br />
are trained<br />
in vocations of their<br />
choice which include<br />
Welding & Fabrication,<br />
Furniture Making, Hair<br />
Dressing, Fashion & Designing,<br />
Fish farming,<br />
Computer Studies.<br />
Graduands of the<br />
program undergo a<br />
screening and pre-selection<br />
process prior to<br />
their placements in certified<br />
training centers.<br />
Training materials and<br />
allowances are provided<br />
for them and their trainers<br />
to ensure they are<br />
well equipped with the<br />
necessary learning tools<br />
throughout the duration<br />
of their training.<br />
Upon completion of the<br />
training, which usually<br />
spans one year, Total<br />
Nigeria Plc fully establishes<br />
these youths in<br />
their various vocational<br />
fields by providing them<br />
with tools and resources<br />
by way of Starter packs<br />
being presented here<br />
today.<br />
Albert Mabuyaku (Corporate Affairs Manager) and Chinwe<br />
Ifechigha (Corporate Social Responsibilty Manager) of Total<br />
Nigeria Plc present Starter Packs for the Skills Acquisition<br />
Program in Koko, Delta State.<br />
finance people<br />
appointments<br />
Sea Trucks Group debunks WAV allegation<br />
Sea Trucks Group<br />
(STG) have debunked<br />
recent<br />
media reports<br />
alleging that<br />
expatriates brought on<br />
board to manage West<br />
African Ventures (WAV),<br />
a Nigerian company providing<br />
offshore engineering<br />
services, have allegedly<br />
conspired to hijack the<br />
business from its owner.<br />
STG in a public statement<br />
stated that WAV has<br />
undertaken an untruthful<br />
press campaign to dispute<br />
this position adding that<br />
the STG and its subsidiaries<br />
are the legal owners of<br />
33 vessels that has been<br />
subject of dispute. The<br />
vessels; Jascon (“J”) Vessels<br />
J2, J3, J8, J9, J12, J23,<br />
J24, J26, J27, J30, J33, J39,<br />
J40, J45, J51, J52, J53, J55,<br />
J57, J60, J61, J62, J63, J64,<br />
J65, J67, J68, J69, and Walvis<br />
1, Walvis 5 and Maro,<br />
are all located in Nigeria.<br />
“Most if not all of the<br />
Vessels are subject to<br />
mortgages which Sea<br />
Trucks granted in 2013 in<br />
return for a US$575 mil-<br />
GE & Marinus Energy to build first-of-itskind<br />
waste gas to power plant in Ghana<br />
As developing<br />
countries embrace<br />
innovation<br />
that will guarantee<br />
faster solutions to energy<br />
challenges, GE Power<br />
and Marinus Energy announced<br />
a pilot project<br />
to capture Isopentane gas<br />
and use it as a fuel source<br />
for generating electricity.<br />
The Atuabo Waste<br />
to Power Independent<br />
Power Project will be the<br />
first TM2500 power plant<br />
in Sub-Saharan Africa to<br />
use Isopentane gas as a<br />
fuel source and will run<br />
on GE’s latest TM2500 gas<br />
turbines. This Isopentane<br />
gas would otherwise have<br />
been flared.<br />
“Not only is the Atuabo<br />
waste to power plant<br />
enabling our company<br />
to lead in innovative en-<br />
lion loan. STG is beneficially<br />
owned by Jacques<br />
Roomans. Despite recent<br />
allegations that he has<br />
unduly influenced by employees,<br />
Roomans had legal<br />
and practical control<br />
of Sea Trucks at the time<br />
it entered into the Loan,<br />
and at the time it went<br />
into default.<br />
In December 2016 as<br />
a consequence of the default<br />
and concerns over<br />
improper governance,<br />
Roomans and his partner<br />
ergy solutions in Ghana,<br />
but by using a fuel source<br />
which would otherwise<br />
have been flared as waste,<br />
we are further reducing<br />
emissions and costs,” said<br />
Mr. Fred Asamany, Strategic<br />
Advisor, Marinus Energy.<br />
“This is good for our<br />
were removed as directors<br />
of STG. In May 2017<br />
STG entered liquidation<br />
following attempts by<br />
Roomans to undermine<br />
Sea Truck’s business.<br />
Since then Roomans has<br />
had no direct involvement<br />
at all”, the company<br />
stated.<br />
The statement further<br />
went on to state that<br />
“Roomans also owns and<br />
controls WAV. WAV is not<br />
part of Sea Trucks as has<br />
been reported, but a sis-<br />
business, the climate and<br />
eliminates the potential<br />
environmental hazards<br />
facing the local community.<br />
GE is offering an innovative<br />
solution which<br />
gives us the confidence to<br />
move from pilot to commercial<br />
operations” he<br />
ter company by virtue<br />
of common ownership.<br />
Historically, WAV operated<br />
the Vessels (except<br />
J30), under various charter<br />
agreements with Sea<br />
Trucks.<br />
WAV’s refusal to comply<br />
with the terms of these<br />
charter agreements led<br />
the relevant Sea Trucks<br />
vessel owning companies<br />
to terminate the agreements<br />
in October 2017.<br />
WAV thus continues to<br />
illegally hold and utillise<br />
the Vessels (including the<br />
J30) which rightfully belong<br />
to Sea Trucks”.<br />
STG stated that “there<br />
is no foreign conspiracy,<br />
as WAV alleges, to rob<br />
WAV of its assets or render<br />
people unemployed.<br />
WAV does not own the<br />
Vessels, and upon recovery<br />
Sea Trucks will ensure<br />
that the Vessels will be<br />
available to service the<br />
needs of the Nigerian Oil<br />
and Gas industry under<br />
the management of indigenous<br />
Nigerian operators,<br />
safeguarding Nigerian interests<br />
and employment”.<br />
said.<br />
In the first phase, Atuabo<br />
will convert the Isopentane<br />
fuel into up to 25<br />
megawatts (MW) of power,<br />
generating enough electricity<br />
to supply power for<br />
more than 100,000 Ghanaian<br />
households. As additional<br />
gas is brought onshore,<br />
the plant is expected<br />
to add on additional gas<br />
generating units up to a<br />
capacity of 100 MW. Additional<br />
Isopentane fuel will<br />
eventually be stripped off<br />
an offshore gas supply and<br />
processed at Atuabo by the<br />
Ghana National Gas Company.<br />
The gas turbine will<br />
start on lean gas and transfer<br />
to the Isopentane mix<br />
over time, and the power<br />
plant is intended to operate<br />
at base load throughout<br />
its life.
Wednesday <strong>28</strong> <strong>Feb</strong>ruary <strong>2018</strong><br />
marketinsight<br />
Decline in US crude stocks drives oil prices higher<br />
Decline in<br />
the US<br />
crude oil<br />
inventories<br />
n u d g e d<br />
oil prices higher, the<br />
US Energy Information<br />
Administration (EIA)<br />
data showed. Commercial<br />
crude stocks fell 1.6<br />
million barrels, or 0.4<br />
percent, to 420.5 million<br />
barrels for the week<br />
ending <strong>Feb</strong>ruary 16, EIA<br />
data reported. However,<br />
the market expectation<br />
for crude inventories<br />
was an increase of 1.8<br />
million barrels.<br />
After crude stocks surprisingly<br />
fell against expectations,<br />
oil prices increased<br />
their gains.<br />
International oil<br />
benchmark Brent crude<br />
was trading at $66.<strong>28</strong> a<br />
barrel with a 1.3 percent<br />
daily gain, while American<br />
benchmark West<br />
The Organization<br />
of the Petroleum<br />
Exporting Countries<br />
(OPEC) and<br />
participating non-OPEC<br />
countries achieved the<br />
highest level of 133 percent<br />
in January, OPEC announced.<br />
According to the statement,<br />
the Joint OPEC and<br />
Non-OPEC Ministerial<br />
Monitoring Committee<br />
(JMMC) declared that<br />
member and participating<br />
countries started <strong>2018</strong><br />
with an outstanding conformity<br />
level with their<br />
voluntary adjustments in<br />
production.<br />
“Throughout <strong>2018</strong>, the<br />
JMMC will focus on striving<br />
to maintain or exceed<br />
full conformity by all participating<br />
countries,” the<br />
statement read.<br />
The JMMC expressed<br />
satisfaction with the overall<br />
results and stressed the<br />
importance of vigilance<br />
and the need to avoid<br />
complacency amid the<br />
recent market volatility.<br />
Texas Intermediate was<br />
at $62.70 per barrel with<br />
a 1.6 percent daily gain.<br />
“The performance was<br />
not uniform and conformity<br />
was boosted by<br />
several over-performing<br />
countries,” said the<br />
JMMC, which urged all<br />
participating countries<br />
to continue intensifying<br />
their collective and individual<br />
efforts to expedite<br />
the rebalancing of the oil<br />
market.<br />
“This solid performance<br />
during the first<br />
month of the second<br />
Strategic Petroleum<br />
Reserves, which are not<br />
included in the US com-<br />
mercial crude stocks, fell<br />
by 0.7 million barrels, or<br />
0.1 percent, to 664.9 million<br />
barrels for the week<br />
ending <strong>Feb</strong>ruary 16, the<br />
EIA data showed.<br />
The US crude oil production<br />
decreased slightly<br />
by one thousand barrels<br />
per day (bpd) to 10.27<br />
million bpd for the week<br />
ending <strong>Feb</strong>ruary 16, according<br />
to the EIA.<br />
Decline in crude output<br />
was caused by a fall<br />
in production in Alaska<br />
by 11,000 bpd to 508,000<br />
bpd. In the Lower 48<br />
states of the US, crude oil<br />
production increased by<br />
10,000 bpd to 9.76 million<br />
bpd.<br />
The US crude oil exports<br />
rose 722,000 bpd<br />
to 2.04 million bpd while<br />
imports of crude oil declined<br />
867,000 bpd to 7.02<br />
million bpd, according to<br />
the EIA data.<br />
Oil output cut records highest conformity level in January <strong>2018</strong><br />
year of the Declaration of<br />
Cooperation continues<br />
a remarkable upward<br />
trend seen throughout<br />
2017,” said the organization<br />
and added that it<br />
demonstrates the commitment<br />
of participating<br />
countries to the restoration<br />
of market stability,<br />
in the interests of producers,<br />
consumers and<br />
the global economy. The<br />
JMMC’s next meeting<br />
will be held in April, in<br />
Saudi Arabia.<br />
The first joint OPEC<br />
and Non-OPEC Producing<br />
Countries’ Ministerial<br />
Meeting was held on<br />
December 10, 2016 to<br />
accelerate the stabilization<br />
of the global oil market<br />
through adjustments<br />
in total oil production of<br />
around 1.8 million barrels<br />
per day. As a result, member<br />
and participating<br />
countries decided to adjust<br />
oil production from<br />
January 1.<br />
At the second joint<br />
ministerial meeting, held<br />
on May 25, participants<br />
decided to prolong the<br />
output deal for another<br />
nine months starting July<br />
1. Furthermore, at the<br />
third meeting on Nov. 30,<br />
the countries’ ministers<br />
agreed to extend the oil<br />
cut pact until <strong>2018</strong>.<br />
The JMMC was established<br />
based on a decision<br />
taken following<br />
OPEC’s 171st ministerial<br />
conference on November<br />
30, 2016.<br />
C002D5556<br />
OPEC Flakes<br />
OPEC wants to<br />
ensure enough<br />
upstream investment<br />
to<br />
adequately supply the<br />
market in the decades to<br />
come, providing the impetus<br />
behind efforts to<br />
formalize its cooperation<br />
with Russia and other<br />
allies beyond their production<br />
cut agreement,<br />
Suhail al-Mazrouei, UAE<br />
energy minister said.<br />
Mazrouei holds the<br />
rotating OPEC presidency<br />
this year. He said<br />
finalizing a pact with<br />
non-OPEC partners on<br />
continued oil market<br />
management was a personal<br />
“aspiration” of his.<br />
But he had no details<br />
on what parameters the<br />
agreement would entail,<br />
saying it was still in the<br />
“draft stage” and needed<br />
to be discussed with other<br />
ministers.<br />
The minister reiterated<br />
that despite over<br />
107 percent compliance<br />
by OPEC/non-OPEC in<br />
2017, their job is not yet<br />
OPEC and its allies,<br />
including<br />
Russia, may<br />
next year ease<br />
the crude-output curbs<br />
that have helped prices<br />
recover from the worst<br />
crash in a generation,<br />
according to Khalid Al-<br />
Falih, Saudi Arabia’s oil<br />
minister.<br />
With the market moving<br />
toward equilibrium<br />
and bloated inventories<br />
shrinking, the next step<br />
for global producers<br />
BUSINESS DAY<br />
07<br />
WEST AFRICA<br />
ENERGY intelligence<br />
OPEC seeks more upstream<br />
investment to meet future demand<br />
complete. “<strong>2018</strong> is going<br />
to be a year of solid commitment,”<br />
he said.<br />
“The intention for the<br />
goal is to work together<br />
in the future to ensure we<br />
have enough adequate<br />
actions to help market<br />
stability.”<br />
“Let’s not assume<br />
there is something to be<br />
shared today,” Mazrouei<br />
had said earlier in the day<br />
“The level of understanding<br />
we have seen in this<br />
group and achieving a<br />
mutual interest has contributed<br />
to the balance<br />
in the market and also to<br />
the world economy, giving<br />
us hope that we can<br />
draft something that is<br />
acceptable to everyone.”<br />
OPEC, allies may ease output curbs<br />
will be to phase out the<br />
reductions, Khalid Al-<br />
Falih said. The nations<br />
taking part in the supply<br />
curbs are currently<br />
studying what a crude<br />
re-balancing will entail,<br />
and will announce their<br />
next steps once that is<br />
analyzed, he said.<br />
The production curbs<br />
may be eased “sometime<br />
in 2019, but we do not<br />
know when and we don’t<br />
know how,” Al-Falih said.<br />
“What we know is that<br />
it’s going to be done in a<br />
way that it will not in any<br />
way disturb the balance<br />
and undo the hard work<br />
since 2016.”<br />
A deal between the<br />
Organization of Petroleum<br />
Exporting Countries<br />
and its partners<br />
aimed at shrinking a<br />
global glut began in 2017<br />
and runs through the<br />
end of this year.
Wednesday <strong>28</strong> <strong>Feb</strong>ruary <strong>2018</strong><br />
08 BUSINESS DAY<br />
C002D5556<br />
WEST AFRICA<br />
ENERGY intelligence<br />
In association with<br />
Cost of production key as Nigerian volumes task OPEC limits<br />
talking points<br />
ISAAC ANYAOGU<br />
Ibe Kachikwu, minister of state for<br />
petroleum resources in an interaction<br />
with journalists at the inaugural Nigeria<br />
International Petroleum Summit<br />
(NIPS) in Abuja last week told journalists<br />
that with about 500,000 bpd expected<br />
Engina FPSO and Zabazaba fields, cost of<br />
production has become critical to determine<br />
which volumes goes to the market.<br />
“We are still under the exemption, but the<br />
expectation looking at our numbers is that<br />
we should not exceed 1.8mbd. We have said<br />
that it covers pure crude, it does not cover<br />
condensates. A combination of both what<br />
we are producing today, which is in excess<br />
of 1.76mbd and the condensates which is in<br />
the region of 400,000 barrels will take us to<br />
the 2.2mbd. We are slightly below that and<br />
we will like to be able to move that.<br />
“Challenges will come when you then<br />
hit 2.5mbd. Egina has 200,000bd in the next<br />
couple of months (which is) the last quarter<br />
of this year, Zabazaba potentially late end of<br />
next year, another 250,000bd. So, you begin<br />
to struggle with what you do with those volumes<br />
and that is why I said today that it is a<br />
signal to oil companies that we are going to<br />
be watching cost.<br />
“I will hate to take a costly barrel to the<br />
market when I have a cheap barrel. So, what<br />
it means is that everybody needs to begin to<br />
drive down to that $15 (per barrel) concept<br />
that we have set as the ideal cost of production<br />
in this country, not $22 or $23. Like I<br />
said two of the companies have met that and<br />
we will like to get other companies to begin<br />
to do that. So, there will be incentives both<br />
in terms of your access to the market, our<br />
willingness to produce and also incentives<br />
in terms of what we are going to give to you<br />
for being a least-cost producer. We are going<br />
to work that out.”<br />
But the challenge is what becomes of<br />
the extra volumes the minister is proposing<br />
not to take to the market on account of their<br />
cost? Nigeria has one of the highest cost of<br />
production among OPEC peers and this<br />
largely due to risks involved in producing the<br />
volatile Niger Delta, regulatory uncertainties<br />
and multiple conflicting regulatory agencies<br />
which makes business planning impossible.<br />
It would seem pragmatic to deal with these<br />
issues first.<br />
The minister is proposing domestic utilisation.<br />
“Once we begin to hit the 2.5mbd, if<br />
these agreements were foreseeably to last<br />
for five years – I hope not, I hope the market<br />
would have become that tight that there<br />
would be need for agreements and we can<br />
produce freely. But assuming that it doesn’t<br />
and shale continues to surge and maintain<br />
the sort of equilibrium misbalance, then<br />
obviously, what we need to do is to begin to<br />
look at how do we process a huge amount<br />
of our oil.<br />
“Exporting crude is like exporting raw<br />
materials for our agricultural products, it is<br />
not the way to go. I will like to see a policy<br />
whereby oil companies begin to refine heavily,<br />
process heavily and take out their finished<br />
products. I am hoping that by the time we<br />
begin to hit those challenging numbers, local<br />
processing and refining would have improved<br />
to a level where in fact that is no longer an<br />
issue to us,” the minister said.<br />
However the challenge with this is a policy<br />
on petrol subsidy that makes it meaningless<br />
to produce locally. The critical action is to<br />
remove these subsidies and allow marketled<br />
pricing structure which can encourage<br />
domestic refining. While both strategies are<br />
sensible, but they cannot solve the problem<br />
because of the challenging operating environment.
BUSINESS DAY<br />
Opinion<br />
OPEYEMI AGBAJE<br />
opeyemiagbaje@rtcadvisory.com<br />
Nigeria’s current<br />
political and<br />
constitutional<br />
status quo is<br />
clearly and evidently<br />
unsustainable and the<br />
cries of “marginalization”,<br />
“secession”, “true federalism”<br />
and “sharia”; as well as abject<br />
socio-economic conditions<br />
of poverty, unemployment,<br />
rural misery and neglect,<br />
decrepit infrastructure and<br />
urban slums, militancy, insurrection<br />
and widespread<br />
insecurity being experienced<br />
all over Nigeria are symptoms<br />
of the nation’s critical<br />
dysfunctionality. The status<br />
quo is not an option and the<br />
nation must heed calls for<br />
“restructuring” or else serious<br />
problems may lie in the<br />
horizon. We must restructure<br />
Nigeria to re-establish the<br />
principles of federalism as<br />
our founding fathers freely<br />
decided in the negotiations<br />
that led to independence.<br />
That federal ideal was subverted<br />
by the military as they<br />
sought to transform Nigeria<br />
into a unitary state which<br />
now undermines Nigeria’s<br />
unity, stability and development.<br />
The alternative to a<br />
proactive embrace of “restructuring”<br />
may be ruinous<br />
NEWS YOU CAN TRUST I WEDNESDAY <strong>28</strong> FEBRUARY <strong>2018</strong><br />
The imperative of restructuring and federalism in Nigeria<br />
ment and dysfunction!<br />
The required restructuring<br />
of Nigeria is essentially to<br />
restore our federal structure<br />
and will involve devolution<br />
of powers back to the states<br />
or regions and drastic reduction<br />
of the matters contained<br />
in the exclusive legislative list<br />
in our constitution (which<br />
are restricted to the federal<br />
government) with more matters<br />
returning to the concurrent<br />
list (where federal<br />
and state/regional powers<br />
coexist) and residual powers<br />
reserved for the states. It<br />
would involve re-establishing<br />
fiscal federalism based<br />
on the principle of derivation<br />
including modifying the revenue<br />
allocation formula in<br />
favour of regions and states<br />
consistent with devolution<br />
of powers, and restoring<br />
state powers over sales tax<br />
(or VAT), inland waterways<br />
except the few that traverse<br />
two or more states, solid<br />
minerals and other matters<br />
best suited to state control.<br />
Matters like electricity transmission,<br />
ports and harbours<br />
and railways should become<br />
concurrent matters in which<br />
both regional/state and federal<br />
authorities can co-exist.<br />
The absurdity in which<br />
state legislatures can create<br />
crimes but state governments<br />
which have primary responsibility<br />
for law and order within<br />
their states do not have any<br />
mechanism for enforcing<br />
their laws would be rectified<br />
with the legalization of state<br />
police. There is no sensible<br />
rationale or justification for<br />
listing local governments<br />
in a federal constitutionthere<br />
should be only two or<br />
three tiers of government as<br />
is the global practice in federal<br />
constitutions-the federal,<br />
regional and state governments.<br />
We should reject the<br />
subtle attempt to recognize<br />
local governments as a thirdtier<br />
of government under the<br />
guise of “LG Autonomy” and<br />
view this attempt as a mischievous<br />
attempt to drive the<br />
nail in the coffin of Nigerian<br />
federalism. It is a strategy of<br />
“divide and rule…and conquer”<br />
which will finally destroy<br />
the concept of regions<br />
or states as federating units in<br />
Nigeria and foster a situation<br />
in which through movements<br />
of population, political control<br />
of any local government<br />
anywhere in the country can<br />
be achieved! In effect, “LG<br />
Autonomy” would turn out<br />
to be a strategy for achieving<br />
de facto “colonies” all over<br />
Nigeria!!!<br />
The Yoruba people unanimously<br />
decided at the historic<br />
Yoruba Summit of September<br />
7, 2017 at Adamasingba,<br />
Ibadan on federalism encompassing<br />
a six-region federal<br />
structure with federal, regional<br />
and state governments;<br />
regional constitutions, with<br />
power to create local governments<br />
vested in the states;<br />
and a revenue allocation<br />
formula weighted in favour<br />
of the states and regions. The<br />
Summit also unanimously<br />
agreed on a significantly narto<br />
the Nigerian state!<br />
With particular reference<br />
to the Yorubas of Western Nigeria,<br />
we recognize that it is<br />
not a mere co-incidence that<br />
our modern golden age was<br />
the period during which we<br />
enjoyed relative autonomy<br />
over our own affairs under a<br />
democratic, regional government<br />
and federal constitution<br />
under the leadership of<br />
Chief Obafemi Awolowo and<br />
later Chief Samuel Ladoke<br />
Akintola, until that era was<br />
truncated by military rule.<br />
It is not simply an accident<br />
of history that Cocoa House<br />
remains the tallest building<br />
in Ibadan; that Liberty<br />
Stadium,one of the most<br />
modern sporting edifices<br />
in the world when it was<br />
built, now lies desolate; that<br />
the Western Region which<br />
built the first television station<br />
in Africa, well before<br />
many European nations at<br />
the time does not now have<br />
any world-class broadcast<br />
media; that the wonderful<br />
University of Ife built by the<br />
Western Region government<br />
in 1962 is now simply another<br />
broken federal institution;<br />
and that our public education<br />
system lies in ruin with<br />
our young men and women<br />
unable to get the right skills<br />
and jobs!!! Without the freedom<br />
and autonomy to run<br />
our affairs, all of Nigeria<br />
has descended to a lowest<br />
common denominator of<br />
mediocrity, corruption, ignorance,<br />
idleness, disease,<br />
insecurity, under-developrower<br />
exclusive legislative list.<br />
There are strong economic<br />
arguments in favour of returning<br />
to a regional system<br />
of government based on the<br />
defacto six geo-political zones<br />
of South-West, South-South,<br />
South-East, North-Central,<br />
North-West and North-East<br />
with adjustments based on<br />
the wishes of the population<br />
in any local government or<br />
state as may be ascertained<br />
through a referendum or<br />
plebiscite.<br />
There are also economic<br />
arguments in favour of<br />
rationalizing the current<br />
excessively high cost of governance<br />
by returning to a<br />
parliamentary system of<br />
government at the federal,<br />
regional or state levels. A<br />
system in which only one set<br />
of elections into parliament<br />
are conducted; and then<br />
ministers are selected from<br />
elected parliamentarians as<br />
practiced in the first republic<br />
is cost-efficient, and more<br />
democratic and legitimate,<br />
and would strengthen our<br />
democracy. The practice of<br />
appointing persons who are<br />
unknown to the electorate as<br />
ministers or commissioners<br />
perpetuates corruption and<br />
distances government from<br />
the people who are the essence<br />
of democracy.<br />
As I wrote earlier, the<br />
calls for secession from “Biafra”;<br />
the calls for Sharia in<br />
the Muslim North-West and<br />
North-East; the grumbles<br />
in the Middle-Belt of Nigeria<br />
which is getting more<br />
Billy Graham, moral man and immoral society<br />
C002D5556<br />
intense with the killings by<br />
Fulani herdsmen; the unrest<br />
and militancy in the Niger-<br />
Delta; and the unceasing<br />
calls for “true federalism”<br />
in Western Nigeria are evidence<br />
that the status quo<br />
is unsustainable and about<br />
to collapse. The vision of a<br />
unitary Nigeria in which a<br />
minority seek to establish<br />
a permanent hegemony<br />
over the nation will not succeed<br />
and has produced only<br />
a corrupt, unproductive,<br />
unstable and disunited nation.<br />
It has produced “boko<br />
haram” in the North-East;<br />
sabotage and militancy in<br />
the Niger-Delta; widespread<br />
poverty, illiteracy and tens of<br />
millions of children outside<br />
schools in the North-West<br />
and North-East; murderous<br />
conflicts between Fulani<br />
herdsmen and farmers and<br />
indigenes across the whole<br />
country and particularly in<br />
the North-Central; disgruntlement<br />
in the South-West;<br />
and growing calls for secession<br />
and independence in<br />
the South-East. In the whole<br />
of Nigeria, all that unitarism<br />
has generated is poverty,<br />
unemployment, inequality,<br />
a massive infrastructure<br />
deficit and socio-political<br />
crises. There can be no justification<br />
for proceeding<br />
further on this path to ruin!<br />
*This article is the final<br />
instalment of a three-part<br />
series on the Yoruba Nation<br />
and the Quest to Re-establish<br />
Federalism in Nigeria.<br />
OBADIAH MAILAFIA<br />
Dr Mailafia is a development<br />
economist and a former Governor<br />
of the Central Bank of Nigeria.<br />
obmailafia@gmail.com.<br />
Reinhold Niebuhr<br />
was one of the most<br />
influential theologians<br />
and philosophers<br />
of the twentieth century.<br />
His famous book, Moral<br />
Man and Immoral Society: A<br />
Study in Ethics and Politics<br />
(Charles Scribner’s Sons<br />
1932), made a huge impact<br />
when it was published. His<br />
main thesis is that human<br />
beings are more prone to<br />
evil as a group rather than as<br />
individuals. Human beings<br />
may be selfish and wicked,<br />
but they can also reflect the<br />
better angels of our nature.<br />
For him, faith and individual<br />
agency are vital in the renewal<br />
of societies and nations.<br />
The book in many ways<br />
prefigured the emergence<br />
of Hitler and Nazism which<br />
plunged Europe into dark-<br />
ness for more than a decade.<br />
The American protestant<br />
pastor and evangelist<br />
Billy Graham who died last<br />
week epitomised the ideal<br />
of Nieburh’s moral man in<br />
an immoral and unjust society.<br />
Graham passed away<br />
peacefully in his sleep on<br />
Wednesday 21 <strong>Feb</strong>ruary in<br />
his home in Montreat, North<br />
Carolina, USA, age 99.<br />
For everyone on earth<br />
that is live, there is a day to<br />
be born and a day to die. It<br />
is appointed to a man once<br />
to die, and then there comes<br />
the judgement, says the Old<br />
Book. Death sums up a human<br />
life more than anything<br />
else does. Death exposes the<br />
vanity of life. All the pomp<br />
and power and pageantry<br />
will come to an end sooner<br />
or later. For some, it comes<br />
peacefully in their sleep;<br />
for those less fortunate, it<br />
comes violently. It is often<br />
granted to the righteous to<br />
die peacefully.<br />
No one knows the day<br />
or hour. Indeed, the French<br />
writer and existential philosopher<br />
Albert Camus once<br />
declared that a man has never<br />
started to live until he has<br />
come to terms with his mortality.<br />
It was perhaps for this<br />
reason that the old psalmist<br />
in the Old Testament Bible<br />
counsels everyone to number<br />
their days “that they<br />
may apply themselves unto<br />
wisdom.<br />
William Franklin Graham<br />
Jr was born on 7 November<br />
1918 on a dairy farm outside<br />
Charlotte, North Carolina, of<br />
Scottish-Irish Presbyterian<br />
stock. Graham was brought<br />
up on a diet of rural Calvinistic<br />
values. He had to<br />
wake up at 2.30 am to milk<br />
the cows and shovel off tons<br />
of manure. At a tent revival<br />
organised by the travelling<br />
evangelist Modercai Ham,<br />
the sixteen year Graham<br />
made the life-changing decision<br />
to commit his life Jesus<br />
Christ as Lord and Saviour.<br />
In 1936 he enrolled at Bob<br />
Jones College, a Christian<br />
liberal arts institution in<br />
Greenville, South Carolina,<br />
but soon left because he<br />
found the atmosphere rather<br />
stifling. The following year he<br />
transferred to Florida Bible<br />
Institute, where he apparently<br />
bloomed. He found in<br />
his new academic home “a<br />
unity of God’s people who<br />
sincerely held Jesus at the<br />
centre of their lives”. During<br />
a solitary walk in the woods<br />
one evening, he knelt down<br />
and offered his future and<br />
destiny to serve the Lord<br />
as pastor and evangelist if<br />
this was His will for his life.<br />
Happy is the young man who<br />
discovers his life-purpose<br />
and vocation early enough.<br />
Graham was one of those<br />
lucky ones. Barely in his<br />
teens, he declared: “My one<br />
purpose in life is to help<br />
people find a personal relationship<br />
with God, which,<br />
I believe, comes through<br />
knowing Christ.” In <strong>Feb</strong>ruary<br />
1939 he was ordained as<br />
a Southern Baptist minister.<br />
He later proceeded to the<br />
better-known Wheaton College<br />
Illinois, where he graduated<br />
in 1943, majoring in<br />
anthropology -- a discipline<br />
that broadened his mind and<br />
enabled him to see beyond<br />
the narrow waspish culture<br />
of his forebears. At Wheaton<br />
he also met the woman that<br />
would become his wife, Ruth<br />
Bell, daughter of medical<br />
missionaries in China. It was<br />
a marriage made in heaven.<br />
In 1944 Billy Graham began<br />
his ministry as a pastor<br />
with the Youth for Christ<br />
evangelistic mission. In 1950<br />
he founded the Billy Graham<br />
Evangelistic Association,<br />
BGEA. His style combined<br />
the traditional open tent<br />
crusades in football stadiums<br />
with broadcasting in<br />
radio and television in over<br />
140 countries. He ministered<br />
directly to more than<br />
200 million people, and,<br />
indirectly, 2 billion. Some<br />
3 million people are said to<br />
have responded directly to<br />
his altar calls.<br />
Billy Graham has won<br />
more souls to Christ than any<br />
single individual in history.<br />
His secret lay in a simple<br />
message: “Jesus loves you.<br />
Let Him into your life and<br />
your sins will be forgiven.” He<br />
often startled his audience<br />
with a rather unsettling question:<br />
“What would happen to<br />
you if you died on your way<br />
home?” It was an existential<br />
question that demanded<br />
an existential decision. For<br />
decades his Hour of Decision<br />
broadcast, delivered in<br />
a uniquely mellifluous voice,<br />
haunted listeners throughout<br />
the world. A mentor of<br />
mine, a brilliant chemical<br />
engineer, confessed to me<br />
that after listening to the<br />
Hour of Decision in his undergraduate<br />
dorm room in<br />
Ile-Ife in the early seventies,<br />
knelt down and tearfully surrendered<br />
his life to Christ.<br />
Graham’s secrets lay in<br />
the simplicity of his message,<br />
his purity of soul and the radiance<br />
of a consecration that<br />
shone through his persona<br />
-- a man with no guile. He<br />
preached a simple gospel<br />
of grace, repentance and<br />
holiness. He was steadfast<br />
in avoiding the scandals over<br />
money and sex that bedevilled<br />
tele-evangelists such as<br />
Jim Bakker and Jimmy Swaggart.<br />
He made it a policy never<br />
to be found alone in a car<br />
or room with another female<br />
other than his wife -- later to<br />
be known as “the Billy Graham<br />
Rule”. He also empowered<br />
the BGEA board with<br />
strong leaders while placing<br />
himself on a fixed, modest<br />
salary. All the funds from his<br />
speaking engagements and<br />
books went to God’s work<br />
and for humanitarian action.<br />
He never boasted of miracles<br />
nor did he pitch his faith on<br />
prophecy. He preached a<br />
simple message of faith, love,<br />
repentance, forgiveness and<br />
salvation.<br />
How I wish our avaricious<br />
and grasping “General Overseers”<br />
in Nigeria could learn<br />
Continues on page 39<br />
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