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usinessday market monitor<br />

Commodities<br />

Brent Oil<br />

$72.23<br />

Cocoa<br />

US $2,194.00<br />

NSE<br />

Biggest Gainer<br />

Dangcem<br />

Biggest Loser<br />

NB<br />

N229.5 4.32 pc N100<br />

-2.91 pc<br />

35,341.90<br />

Bitcoin<br />

Everdon Bureau De Change<br />

₦2,291,402.96 +0.55 pc<br />

Buy Sell<br />

$-N 357.00 360.00<br />

Powered by<br />

£-N 456.00 464.00<br />

€-N 403.00 411.00<br />

FMDQ Close<br />

Foreign Exchange<br />

Treasury Bills<br />

fgn bonds<br />

Market Spot ($/N) 3M 6M 5 Y 10 Y 20 Y<br />

I&E FX Window 362.50 -0.02 0.08 0.15 0.01 0.76<br />

CBN Official Rate 306.10 11.58 13.32 14.78 14.87 14.93<br />

Currency Futures ($/N)<br />

NGUS OCT.<br />

31, <strong>2018</strong><br />

NGUS JAN.<br />

30, 2019<br />

NGUS JUL.<br />

24, 2019<br />

0.00 0.00 0.00<br />

362.23 362.68 363.58<br />

news you can trust I **TUESDay <strong>21</strong> auGUST <strong>2018</strong> I vol. 15, no 122 I N300 @ g<br />

Nigeria’s economy<br />

struggles as NBS sees<br />

GDP flat in Q2 <strong>2018</strong><br />

ENDURANCE OKAFOR<br />

Nigeria’s economy is still<br />

growing sluggishly almost<br />

15 months after<br />

exiting recession, according to<br />

the National Bureau of Statistics<br />

(NBS).<br />

The economy is in its second<br />

stage of recovery after it contracted<br />

in 2016, the statistics office<br />

said in a statement posted on<br />

its Twitter account on Monday.<br />

The growth rate in the second<br />

quarter was “very similar” to the<br />

reading for the first three months<br />

Continues on page 34<br />

Tinubu nursing<br />

presidential ambition<br />

in 2023 – Saraki<br />

OWEDE AGBAJILEKE, Abuja<br />

Senate President Bukola<br />

Saraki has accused a<br />

former governor of Lagos<br />

State, Bola Tinubu, of nursing<br />

presidential ambition in the<br />

2023 elections.<br />

Inside<br />

Stanbic IBTC<br />

sees politics as<br />

‘Key Risk’ to<br />

second-half<br />

income P. 2<br />

Continues on page 34<br />

Investors slam Buharinomics<br />

as markets flat since 2015<br />

Lags ex-Presidents OBJ, Jonathan performance<br />

Stocks fall again by 1.7% on Monday<br />

Emeka Ucheaga<br />

Economic policies embraced<br />

by the current<br />

administration has<br />

failed to significantly<br />

lift stock prices as the<br />

Nigerian Stock Exchange broad<br />

index is up only 1 percent since<br />

President Muhammadu Buhari<br />

came into power in May 29, 2015.<br />

The Buhari administration<br />

has tremendously underperformed<br />

both the Jonathan and<br />

Obasanjo administrations which<br />

returned 29.7 percent and 904.2<br />

percent respectively during their<br />

time in power.<br />

The stock market index is<br />

popularly used as a proxy for<br />

the performance of companies<br />

in a country as stock prices are<br />

determined by estimating the<br />

present value of future cash flow<br />

of a business.<br />

If investors feel that companies<br />

will do well over a foreseeable<br />

future, stock prices typically<br />

rally. The index tends to retreat<br />

when risks are higher and the<br />

tendency for companies to perform<br />

well financially is lower.<br />

In 3 years since President<br />

Buhari was sworn in as president<br />

of Nigeria, the stock market<br />

returned just 1 percent<br />

making it the worst market performance<br />

by any democratic<br />

President of the federal republic<br />

of Nigeria excluding former<br />

President Musa Yar’Adua who<br />

died in power.<br />

Continues on page 34<br />

L-R: Udoma Udo Udoma, minister of budget and national planning; Vice President Yemi Osinbajo, and Ade Ipaye, deputy chief of staff, during the<br />

Economic Recovery and Growth Plan (ERGP) Focus Labs Central Steering Committee at the Presidential Villa, Abuja, yesterday.<br />

Insight: How Oando, Seplat, Sahara, others navigated 2014-2016 oil crash<br />

DIPO OLADEHINDE, ABIMBOLA HASSAN &<br />

SOBECHUKWU EZE<br />

Crude oil prices started<br />

falling in mid-2014 to<br />

touch multi-year lows<br />

of $26.01 per barrel<br />

(pb) in January 2016, and ever<br />

since there have been a significant<br />

amount of uncertainty in<br />

the oil and gas industry, as it has<br />

remained well below the average<br />

of $103.43 pb and peak of $128<br />

pb that was seen from the start<br />

of 2010 to September 2014 when<br />

the abrupt decline set in.<br />

Business Day analysis into the<br />

operations of major indigenous<br />

oil firms during the industry<br />

turndown revealed how they<br />

performed, major investment<br />

made and how they survived<br />

the period.<br />

Oando<br />

The 2014-2016 oil slump of hit<br />

Oando energy resources hard,<br />

as it recorded a working capital<br />

deficiency of $835.8m in 2015<br />

compared to $567.2 million in<br />

2014 while accumulated deficit<br />

increased to $638.1 million in<br />

2014, from $6<strong>21</strong>.2 million in<br />

2013.<br />

The volatility in oil prices impacted<br />

the balance sheet of oil<br />

companies globally which was<br />

evident in a decline in Oando’s<br />

crude oil and natural gas sales<br />

as revenues in the fourth quarter<br />

of 2015 were $99.8 million compared<br />

with $174.0 million in the<br />

same quarter of 2014.<br />

The $74.2 million decrease<br />

was the result of the significant<br />

reduction in crude oil and<br />

natural gas prices, which were<br />

partially offset by additional<br />

revenue from Qua Ibo coming<br />

on-stream in the first quarter<br />

of 2015.<br />

“Low crude oil prices have<br />

taken a toll on the corporation’s<br />

finances, therefore, in response<br />

to the low prices, the corporation<br />

cooperated with its JV partners<br />

to cut operating costs and take<br />

steps to decrease its monthly<br />

general and administrative expenses<br />

through employee reductions<br />

and the intended delisting<br />

of the corporation from the<br />

Toronto Stock Exchange upon<br />

completion of the OER share<br />

buyout,” the company said in its<br />

2016 report.<br />

Oando recorded a N49.7 billion<br />

loss for its Full year 2015<br />

operations.<br />

In order to survive, the chief<br />

executive officer, Pade Durotoye,<br />

was quoted in 2015 to have said<br />

the company, would be focusing<br />

on maintaining its production<br />

levels through low cost rig less<br />

activities and intensifying its<br />

efforts on cash and cost management.<br />

“Also, our acquisition of Con-<br />

Continues on page 35


2 BUSINESS DAY<br />

C002D5556<br />

Tuesday <strong>21</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

NEWS<br />

Bank credit to private sector<br />

down 1.69% in Q2 <strong>2018</strong><br />

... loans to oil/gas sector dominate<br />

CyntHIA IKWUETOGHU<br />

Credit facilities allocated to<br />

the private sector by Nigerian<br />

banks declined by 1.69<br />

percent to N15.34 trillion in<br />

the second quarter (Q2) of <strong>2018</strong> from<br />

N15.60 trillion in Q2 2017 as shown<br />

in the most recent Nigerian Bureau<br />

of Statistics (NBS) report.<br />

The credit allocation to private<br />

sector divided into three sectors<br />

namely; Agriculture, Industry, and<br />

Services showed that the Oil and<br />

Gas sector with 30.57 percent of the<br />

total credit had the highest allocation<br />

of N4.69 trillion inclusive of both<br />

service and industry bound credit.<br />

Manufacturing sector came second<br />

with N2.02 trillion, 13.16 percent<br />

of the total lending by banks.<br />

Agricultural sector received 3.41<br />

percent which is N523.08 billion of<br />

the total credit allocated by banks, a<br />

slight increase of 0.22 percent from<br />

its Q2 2017 sectoral share of 3.19<br />

percent.<br />

Agriculture which contributed<br />

about <strong>21</strong>.65 percent of the Gross<br />

Domestic Product (GDP) in Nigeria<br />

in Q1 <strong>2018</strong>, attracted about 3 percent<br />

of the total credit in Q2 <strong>2018</strong>.<br />

“Our findings show that the Agriculture<br />

sector in Nigeria is faced<br />

with many problems. Thus the sector<br />

is unable to attract the required<br />

credit,” analysts at FSDH Research<br />

said in a report.<br />

Some of the problems are: inadequate<br />

storage facilities; poor transport<br />

network; inadequate research<br />

to develop improved seedlings; and<br />

weak integration between the sector<br />

and the manufacturing sector<br />

in providing manufacturing inputs.<br />

The industrial sector gulped 38.5<br />

percent of the total credits to the<br />

private sector, credit to the same sec-<br />

742,455 get at<br />

least 5 credits<br />

as NECO releases<br />

June/July results<br />

Godsgift Onyidinefu, Abuja<br />

Out of the 1,041,536<br />

candidates who sat for<br />

the <strong>2018</strong>/2019 June/<br />

July Senior School<br />

Certificate Examination (SSCE)<br />

conducted by the National Examination<br />

Council (NECO), only<br />

742,455 got at least five credit<br />

passes including Mathematics<br />

and the English Language.<br />

This was contained in the<br />

result of the exams which NECO<br />

released on its official website<br />

www.mynecoexams.com on<br />

Monday.<br />

According to a statement<br />

signed by the acting Registrar<br />

of the Council, Abubakar Gana,<br />

there is a 0.63 per cent improvement<br />

in the general performance<br />

of candidates in <strong>2018</strong> compared<br />

to the 2017 results.<br />

He added that a total number<br />

of 20,181 candidates were involved<br />

in examination malpractices,<br />

less than the figure of 2017.<br />

tor stood at N 5.90 trillion. However,<br />

credit to the industrial sector fell by<br />

5.18 percent compared to the corresponding<br />

period in 2017.<br />

The components of industry<br />

which include Oil and Gas (production)<br />

and manufacturing dominated<br />

credit facilities by 22.52 percent and<br />

13.16 percent with an increase of<br />

0.06 percent point and a decrease of<br />

0.95 percent points from 22.46 and<br />

14.11 percent respectively. Power<br />

and Energy had N416.34 billion (2.71<br />

percent), and Mining and Quarrying<br />

N10.18 billion (0.07 percent).<br />

The service sector had a sectoral<br />

share of 58 percent down from N6.22<br />

trillion in Q2 2017 to N5.90 trillion<br />

in <strong>2018</strong>.<br />

Government share of credit facilities<br />

was N1.47 trillion (i.e. 9.61<br />

percent), oil and gas (Services)<br />

N1.24 trillion (8.05 percent), trade/<br />

general commerce N1.04 trillion<br />

(6.81 percent).<br />

Finance, Insurance & Capital<br />

market received N991.22 billion<br />

(i.e. 6.46 percent), Information and<br />

Communication 814.57 billion (5.31<br />

percent), Real estate N744.56 billion<br />

(4.85 percent), construction N612.85<br />

billion (3.99 percent) among others.<br />

Data on all electronic payments<br />

channels in the Nigerian banking<br />

sector revealed that Automated<br />

Teller Machine (ATM) transactions<br />

dominated the volume of transactions<br />

with a record of <strong>21</strong>7.42 million<br />

valued at N1.60 trillion out of the<br />

total volume of about 509.67 million<br />

transactions valued at N32.90<br />

trillion that were recorded in Q2<br />

<strong>2018</strong>.<br />

The total number of banks’ staffs<br />

increased by 13.67 percent quarter<br />

on quarter (QoQ) and 34.72 percent<br />

year on year (YoY) from 89,608 and<br />

75,607 in Q1 <strong>2018</strong> and Q2 2017 respectively<br />

to 101,861 in Q2 <strong>2018</strong>.<br />

The political environment,<br />

declining yields<br />

on government securities<br />

and low deposit<br />

growth are “key risks”<br />

to income in the second half of<br />

<strong>2018</strong>, Stanbic IBTC said yesterday<br />

in a presentation on its website<br />

following the release of Half Year<br />

(H1) results.<br />

The second tier lender revised its<br />

Full Year deposit-growth target to 5<br />

percent – 10 percent, from 20 percent<br />

– 25 percent in 2017.<br />

This comes after deposits increased<br />

by 2 percent to N767.4 billion<br />

in H1.<br />

The lender also forecast net interest<br />

margins at 6 percent this year,<br />

compared to 6.9 percent in 2017.<br />

The Stanbic Group posted gross<br />

earnings of N114.<strong>21</strong> billion in H1<br />

<strong>2018</strong>, up by 17.5 percent from N97.20<br />

EXPLAINER: Lagos embarks on geographic<br />

information mapping, here’s why it matters<br />

JUMOKE AKIYODE - LAWANSON<br />

Business Day reported<br />

last week that the Lagos<br />

state government has<br />

just commenced what<br />

is said to be the biggest<br />

geographic information system<br />

project to capture orthophotogrammetric<br />

data of the state.<br />

The State government through<br />

its Lagos Enterprise Geographic<br />

Information Systems, (e-GIS) upgrade<br />

and Integrated Land Administration<br />

and Automation<br />

System Project, (Lagos eGIS project)<br />

signed a memorandum of<br />

understanding (MoU) with Asseco<br />

Software Nigeria, a leading IT company,<br />

to procure Unmanned Aerial<br />

Vehicles, (UAVs) that will capture<br />

and update orthophotogrammetric<br />

data.<br />

What is orthophotogrammetric<br />

data?<br />

An orthophotograph is an aerial<br />

image that has been geometrically<br />

Stanbic IBTC sees politics as ‘Key<br />

Risk’ to second-half income<br />

MICHEAL ANI<br />

billion recorded in the corresponding<br />

period of 2017.<br />

Profit before tax (PBT) grew by<br />

73.9 percent to N50.73 billion from<br />

N29.17 billion, while PAT incresed<br />

by 78.7 percent to N43.08 billion from<br />

N24.11 billion.<br />

Non-Interest revenue grew by<br />

33.6 percent to N53.83 billion in <strong>2018</strong><br />

from N40.29 billion posted in 2017.<br />

Net income likewise, had a growth<br />

of 73.6 percent to N41.63 billion from<br />

N23.98 billion.<br />

Its balance sheet snapshot reflected<br />

a marginal increase in total<br />

assets by 7.8 percent year on year<br />

(YoY) to N1.37 trillion for the period<br />

ended June <strong>2018</strong> from N1.27 trillion<br />

in 2017. Total liabilities also grew by<br />

4.47 percent to N1.16 trillion from<br />

N1.11 trillion.<br />

Shareholder’s fund, also known<br />

as total equity increased by 30.3<br />

percent to N<strong>21</strong>0.47 billion from<br />

N161.47 billion posted in half year<br />

corrected (orthorectified), such<br />

that the photo has the same lack<br />

of distortion as a map, and can be<br />

used to measure true distances,<br />

because it is an accurate representation<br />

of the earth’s surface.<br />

This data collected from this<br />

advanced large scale mapping process<br />

is then used for road mapping,<br />

structural planning and accurate<br />

representation of the surface area,<br />

which is in this case, Lagos state.<br />

Geographic information systems<br />

have been accepted all over<br />

the world, as an essential tool for<br />

effective decision making in urban<br />

and regional planning<br />

How the data is collected<br />

Unmanned Aerial Vehicles<br />

(UAVs), commonly referred to as<br />

(Drones), which is an aircraft piloted<br />

by remote control or onboard<br />

computer will be flown to capture<br />

imagery and provide accurate<br />

representation of Lagos State’s<br />

geography.<br />

The mapping is used in cartography<br />

(particularly in photogrammetric<br />

surveys, which are often<br />

the basis for topographic maps),<br />

land-use planning, archaeology,<br />

environmental studies, power line<br />

inspection, surveillance, commercial<br />

advertising, conveyancing, and<br />

artistic projects.<br />

Why Lagos state needs the<br />

data<br />

Orthophotos have a variety of<br />

uses, and once in digital format,<br />

they can be viewed and printed at<br />

various scales, which are extremely<br />

valuable in the development of<br />

land information systems and land<br />

use planning issues such as zoning,<br />

transportation, and agriculture.<br />

Things like natural resources<br />

management, land use and allocation,<br />

water inventory, environmental<br />

planning and management,<br />

natural hazards monitoring and<br />

modeling are better managed with<br />

accurate representation of the area<br />

through updated orthophotogrammetric<br />

data.<br />

2017. Capital remained strong with<br />

Capital Adequacy Ratio (CAR) of 27.4<br />

percent in spite of the implementation<br />

of IFRS 9.<br />

Return on Equity which measures<br />

a corporation’s profitability by revealing<br />

how much profit a company<br />

generates with the money shareholders<br />

have invested stood at 19.8<br />

percent in H1 <strong>2018</strong> from 14.9 percent<br />

in half year 2017.<br />

Return on Asset (ROA) a profitability<br />

metrics that measures how<br />

well a company is generating profits<br />

from its total assets stood at 3.0 percent<br />

from 1.9 percent in 2017.<br />

Earnings per Share (EPS) increased<br />

to N4.16 in H1 <strong>2018</strong> from<br />

N2.30 in H1 2017, representing 80.9<br />

percent growth year on year.<br />

Stanbic shares trading in Lagos<br />

are up 32 percent in the past year,<br />

compared to -0.24 percent return<br />

for the NSE all share index for the<br />

same period.<br />

Adam Nuru<br />

(r), managing<br />

director, First<br />

City Monument<br />

Bank (FCMB),<br />

with Abdurrazaq<br />

Balogun,<br />

executive<br />

secretary/CEO,<br />

Lagos State<br />

Security Trust<br />

Fund (LSSTF),<br />

during a courtesy<br />

visit to the<br />

management<br />

of FCMB by<br />

LSSTF at the<br />

bank’s head office<br />

in Lagos.<br />

Technological developments<br />

of recent years in the digital photogrammetry<br />

field have facilitated<br />

invention of reliable digital orthophotos,<br />

essential for various<br />

surveying and Geographic Information<br />

(GI) applications. These<br />

developments are driven by the<br />

demand for high resolution data for<br />

research and engineering projects<br />

-properties that digital orthophotos<br />

provide.<br />

The deal to procure Unmanned<br />

Aerial Vehicles for accurate representation<br />

of Lagos State’s geography<br />

was signed by Simon Melchior,<br />

chief executive officer of Asseco<br />

Software and Hakeem Fahm, Lagos<br />

State Commissioner for Science<br />

and Technology.<br />

As part of Asseco’s delivery of<br />

the UAVs, six UAV operators from<br />

Lagos State Ministry of Science and<br />

Technology will be trained and certified<br />

in Poland, to fly and maintain<br />

the UAVs in Lagos after delivery.<br />

With this development, a simulation<br />

environment has been deployed<br />

by Asseco in Lagos to train<br />

these operators in preparation for<br />

the training and certification in<br />

Continues on page 34


Tuesday <strong>21</strong> <strong>Aug</strong>ust <strong>2018</strong> BUSINESS DAY 3


Tuesday <strong>21</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

4 BUSINESS DAY


Tuesday <strong>21</strong> <strong>Aug</strong>ust <strong>2018</strong> BUSINESS DAY 5


Tuesday <strong>21</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

6 BUSINESS DAY<br />

C002D5556<br />

NEWS<br />

Investors beam searchlight on viable<br />

infrastructure projects in Africa<br />

MIKE OCHONMA<br />

Investec Bank of South<br />

Africa is considering investment<br />

in renewable<br />

energy, water desalination<br />

and treatment<br />

projects, and transportation<br />

infrastructure and speciality<br />

buildings in Africa.<br />

This new thinking is investor<br />

appetite for well-structured<br />

infrastructure projects<br />

on the continent, but needs<br />

clarity from governments on<br />

regulations and the various<br />

projects earmarked for development,<br />

Andre Wepener,<br />

head, specialist banking company,<br />

Investec Bank power<br />

and infrastructure finance<br />

sub-Saharan Africa, says.<br />

Wepener believes that<br />

Relief as Nigeria escapes FIFA ban<br />

ANTHONY NLEBEM<br />

The world football<br />

governing body,<br />

FIFA, yesterday suspended<br />

its planned<br />

ban of Nigeria from participating<br />

in its football activities.<br />

“FIFA received confirmations<br />

that the legitimate<br />

leadership of the NFF under<br />

President Amaju Melvin Pin-<br />

government’s social infrastructure<br />

development initiative<br />

to build schools, hospitals<br />

and clinics and prisons<br />

through PPPs will create investment<br />

opportunities for<br />

private investors.<br />

He says Investec has an<br />

appetite to provide debt funding<br />

and investment in renewable<br />

energy, water desalination,<br />

treatment and bulk<br />

water projects, transportation<br />

infrastructure, fuel infrastructure,<br />

and specialised buildings.<br />

They are also exploring<br />

opportunities to invest in alternative<br />

technologies such as<br />

energy from waste and utilityscale<br />

energy storage.<br />

He highlights the bankability<br />

of off-takers as a key<br />

risk associated with investnick<br />

and General Secretary<br />

Mohammed Sanusi has been<br />

given back effective control<br />

of the NFF and its offices.<br />

“In view of these circumstances,<br />

FIFA deems that the<br />

conditions set by the decision<br />

of the Bureau of the FIFA<br />

Council have now been met<br />

and consequently the suspension<br />

of the NFF will not<br />

take effect,” a statement from<br />

FIFA website read.<br />

ment in an infrastructure<br />

project as, if the off-taker fails<br />

to fulfil their contractual obligations,<br />

the project can ultimately<br />

fail.<br />

“As the procurement of<br />

infrastructure projects is becoming<br />

more competitive,<br />

developers have to structure<br />

their projects in more innovative<br />

ways, both technologically<br />

and financially to<br />

reduce costs and compete in<br />

the market,” Wepener says.<br />

Governments in Africa,<br />

he insists, must have to create<br />

a conducive environment<br />

in terms of a clear regulatory<br />

framework, policy certainty<br />

and transparent processes<br />

without corruption to unlock<br />

opportunities for private investment<br />

in infrastructure projects.<br />

FIFA also confirms that<br />

it would continue to closely<br />

monitor the situation in order<br />

to ensure that FIFA’s rules<br />

and regulations are fully adhered<br />

to.<br />

The Federal Government<br />

also yesterday issued statement<br />

recognising the Amaju<br />

Pinnick-led Nigeria Football<br />

Federation (NFF) board as<br />

the legitimate and recognised<br />

board.


Tuesday <strong>21</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

Smallholder farmers get NIRSAL<br />

improved insurance scheme<br />

ONYINYE NWACHUKWU, Abuja<br />

Nigeria Incentive-Based<br />

Risk Sharing<br />

System for<br />

Agricultural<br />

Lending (NIRSAL) has developed<br />

a new insurance<br />

product to better safeguard<br />

farmers against risks along<br />

the agric value chain.<br />

The product is especially<br />

targeted at smallholder<br />

farmers - the most vulnerable<br />

segment in the agricultural<br />

sector and the Nigerian<br />

population as a whole.<br />

The deployment of the<br />

product, which improves<br />

on its pioneering Area Yield<br />

Index Insurance (AYII)<br />

mechanism introduced last<br />

year, begins immediately<br />

with a pilot phase as part of<br />

NIRSAL’s operations in the<br />

CBN’s Anchor Borrowers<br />

Programme.<br />

While the cover provided<br />

by the earlier product was<br />

limited to yield insurance,<br />

the new insurance product,<br />

NIRSAL Comprehensive<br />

Index Insurance (NCII), is a<br />

combination of Yield Index,<br />

Price Index and Life Insurance,<br />

Anne Ihugba, head,<br />

corporate communications<br />

at the NIRSAL, said in a<br />

statement.<br />

“It is designed to mitigate<br />

the impact and losses of both<br />

yield risk and market price<br />

risk – fundamental risks<br />

associated with possible<br />

production shortfalls and<br />

the uncertainties of the marketplace,”<br />

Ihugba explained.<br />

The new insurance product,<br />

an innovative form of<br />

revenue insurance, is unique<br />

in Africa. It is also the first of<br />

such product to be achieved<br />

without government subsidies<br />

on the premium.<br />

Beyond the benefits to<br />

farmers, NCII’s comprehensive<br />

cover will also encourage<br />

financial institutions to<br />

lend more to primary production<br />

and ensure reduced<br />

premiums in comparison<br />

with the earlier version.<br />

This will also lead to an<br />

additional benefit – the<br />

eradication of premium<br />

subsidy, to free up government<br />

funds for intervention<br />

in other areas.<br />

Leveraging on its $30<br />

million insurance facility,<br />

NIRSAL’s goal is to expand<br />

insurance products and<br />

coverage for agricultural<br />

lending across the entire<br />

value chain by growing coverage<br />

from about 500,000<br />

to 3.8 million primary producers.<br />

Speaking on the development,<br />

Aliyu Abdulhameed,<br />

managing director, NIR-<br />

SAL, said the new insurance<br />

product was a testament to<br />

NIRSAL’s focus on expanding<br />

the frontiers of innovation<br />

in Nigerian agriculture<br />

in pursuit of practical and<br />

effective benefits.<br />

“At NIRSAL, our focus is<br />

on making positive impact at<br />

key points of the agricultural<br />

value chain that can trans-<br />

late to significantly higher<br />

and sustained productivity<br />

and food security for the<br />

country. In line with our<br />

mandate to de-risk Nigerian<br />

agriculture, this innovative<br />

insurance product will help<br />

to secure farmers against<br />

key risks in order to make<br />

agriculture more attractive<br />

and more profitable,” Abdulhameed<br />

said.<br />

He expressed his appreciation<br />

to NAICOM, NAIC<br />

and the insurance companies<br />

who collaborated with<br />

NIRSAL on the project.<br />

NCII was developed by<br />

the Corporation in conjunction<br />

with key partners<br />

- NAICOM (regulator of the<br />

insurance industry), NAIC<br />

(lead of the consortium<br />

of insurance on NIRSAL<br />

Anchor Borrowers Programme),<br />

and members of<br />

the consortium (Axa Mansard,<br />

IGI, Leadway, Royal<br />

Exchange), and Pula Advisors<br />

(consultant to NIRSAL<br />

on agricultural insurance).<br />

L-R: Oghenevwoke Ighure, executive director, digital services, <strong>BusinessDay</strong>; Chiamaka Osuchukwu, a participant; Feyi Olubodun,<br />

CEO, Insight Publicis/speaker; Gbenga Omolokun, COO, VFD Group/speaker, and Hameed Salman, a participant, at The CEO<br />

Apprentice, an entrepreneurship programme for teenagers organised by <strong>BusinessDay</strong> Media in Lagos. Pic by Pius Okeosisi<br />

Customs seizes 11,232 pieces of imported military outfit<br />

IGNATIUS CHUKWU & INNOCENT ETENG<br />

Customs officials in<br />

Onne, Rivers State,<br />

have impounded not<br />

less than 11,232 pieces<br />

of illegally imported military<br />

outfit and arrested an importer<br />

said to be under watch.<br />

The 11,232 is the total<br />

of a combination of different<br />

types of military wears<br />

ranging from t-shirts to caps,<br />

jungle boots and others hidden<br />

in a container that also<br />

contained civilian wears and<br />

other materials.<br />

Sanusi Umar, Custom’s<br />

assistant comptroller general,<br />

revealed this last week,<br />

while inspecting the seized<br />

materials at the Command’s<br />

office in Onne.<br />

Umar emphasised that<br />

the materials were seized<br />

because private individuals,<br />

groups and companies were<br />

legally prohibited from importing<br />

such.<br />

He said investigations into<br />

an earlier seized container of<br />

same materials imported by<br />

the same importer, in June,<br />

gave way to the recent seizure.<br />

The importer, identified<br />

as Ongwatabo Jerry, has been<br />

arrested and is under investigation,<br />

Umar said further.<br />

“After profiling the importer’s<br />

transactions, I am<br />

happy to inform you that<br />

we have arrested another<br />

container MRKU 4909151<br />

(1×40ft) belonging to the<br />

same company, Ehigocho Nigeria<br />

Limited with Ogwatabo<br />

Jerry as the prime suspect.<br />

“On examination, it was<br />

found to contain the following:<br />

620 sets of complete<br />

sewn military camouflage<br />

uniforms and caps, 10, 000<br />

pieces of inner military t-<br />

shirts, 512 pairs of military<br />

jungle boots. The said Ongwatabo<br />

is the sole importer<br />

that opened the form M for<br />

the importation of these two<br />

containers.<br />

“Let me use this opportunity<br />

to draw the attention<br />

of Nigerians (to the fact) that<br />

importation of any kind of<br />

military wears by any individual,<br />

company, or group<br />

is prohibited by Nigerian<br />

law under the Customs and<br />

Exercise Management Acts<br />

(CEMA),” he said.<br />

Governor Governor<br />

Obaseki of<br />

Edo State says the<br />

establishment of<br />

production centres across<br />

the state, which will share<br />

support infrastructure such<br />

as electricity, security and<br />

low-cost financing, will<br />

boost economic growth.<br />

Obaseki said this at a<br />

meeting with leaders of the<br />

All Progressives Congress<br />

(APC) in Edo South Senatorial<br />

District on Sunday<br />

in Benin City, the state<br />

capital. He told the party<br />

leaders that his administration<br />

was partnering private<br />

investors to establish production<br />

centres across the<br />

state beginning with Edo<br />

South Senatorial District.<br />

“This will boost economic<br />

growth, reduce cost<br />

of operations and create<br />

employment opportunities<br />

while enhancing econo-<br />

National Social Investment<br />

Office<br />

of the Presidency<br />

has disassociate<br />

the office from a message<br />

currently circulating on social<br />

media, conveying the<br />

impression that the disbursement<br />

of the repatriated<br />

money by the Swiss government,<br />

otherwise referred to<br />

as Abacha Loot, will commence<br />

in October with the<br />

TraderMoni Micro-Credit<br />

Loan Scheme.<br />

According to the message<br />

signed by Maryam<br />

Uwais, special adviser to<br />

the President on social<br />

investment, the ‘grant,’ derived<br />

from the recovered<br />

looted fund, is being anchored<br />

by Access Bank.<br />

The statement read in<br />

part: “The Federal Government<br />

had deemed it fit to<br />

grant it to Nigerians, especially<br />

small-scale business<br />

owners. The money will be<br />

paid to your account and<br />

you are to pay back within six<br />

Ogbeh lauds CBN’s single-digit interest on agric lending<br />

Minister of agriculture<br />

and<br />

rural development,<br />

Audu<br />

Ogbeh, has described as<br />

laudable the announcement<br />

last Thursday by the Central<br />

Bank of Nigeria (CBN) on the<br />

agreement between the CBN<br />

and the Bankers’ Committee<br />

to offer single-digit interest<br />

rate loans to operators in the<br />

agricultural and manufacturing<br />

sectors of the economy<br />

from commercial banks’<br />

Cash Reserve Requirement<br />

(CRR) with the apex bank.<br />

Considering the idea by<br />

the CBN, Ogbeh observed<br />

that this was a remarkable<br />

progress in government’s<br />

efforts towards boosting the<br />

real sector to which agricul-<br />

C002D5556<br />

Edo unveils strategy to mitigate operational cost<br />

for MSMEs, boost production scale, employment<br />

NSIO debunks fake news on Abacha loot<br />

ture was pivotal. This is expected<br />

to boost food security,<br />

employment creation and<br />

agro-industrial development.<br />

The minister also congratulated<br />

Vice President<br />

Yemi Osinbajo on the new<br />

policy reducing lending rates<br />

to Micro, Small and Medium<br />

scale Enterprises (MSMEs),<br />

noting that the CBN’s move<br />

was in compliance with the<br />

Presidential directive to<br />

lower lending rates to the<br />

productive sectors of the<br />

Nigerian economy, on which<br />

the minister had repeatedly<br />

assured Nigerians.<br />

That the central bank<br />

considered working with<br />

the Bankers’ Committee to<br />

finance agriculture from the<br />

commercial banks’ huge<br />

BUSINESS DAY<br />

7<br />

NEWS<br />

mies of scale,” he explained.<br />

He assured that efforts<br />

were being made to “expand<br />

opportunities for<br />

micro-credit of single-digit<br />

interest rate for women to<br />

encourage entrepreneurship<br />

and boost disposable<br />

income while improving<br />

the quality of lives of the<br />

beneficiaries.”<br />

In attendance were cabinet<br />

members, members<br />

of the Federal House of<br />

Representatives and leaders<br />

and representatives of<br />

the seven local government<br />

areas that make up the<br />

senatorial district, including<br />

women.<br />

The party leaders commended<br />

the focus of the administration<br />

and described<br />

the Ward Development Committees<br />

(WDCs) as a game<br />

changer, which they said were<br />

bringing the dividends of<br />

democracy to the grassroots.<br />

months. So, the programme<br />

is designated for small-scale<br />

business owners.<br />

“You are to walk into any<br />

Access Bank Branch ask<br />

them for Trade Form, which<br />

the Federal Government<br />

say they should give. Please<br />

note, it is free of charge, but<br />

Access Bank will ask you to<br />

pay N1200, for those who<br />

do not have Access Bank account,<br />

if you have an Access<br />

Bank account you don’t have<br />

to pay for any account opening<br />

and they will give you the<br />

form and fill.<br />

“It’s an instant form that<br />

you can fill and submit there<br />

immediately. Pls, go with a<br />

passport photograph, and<br />

your BVN number. I repeat,<br />

the form is free of charge.<br />

Don’t pay to anybody unless<br />

you want to open an Access<br />

Bank account, which is<br />

about N1,200 in other (sic) to<br />

make it fast. But if you have<br />

an account with access before<br />

its easy, they will link up<br />

your account with the form.”<br />

reserves, running into billions<br />

of naira, is a cause for<br />

optimism in the agricultural<br />

sector. This is more so as the<br />

single-digit interest rate of 9<br />

percent on long-term credit<br />

of a minimum tenor of seven<br />

years will support stable agricultural<br />

investment and<br />

predictable increase in food<br />

production.<br />

The multiplier effect of<br />

this initiative at a time of<br />

a restructured and recapitalised<br />

Bank of Agriculture<br />

(BoA) will be a reduction in<br />

uncertainties and avoidable<br />

risks in agricultural investments,<br />

where farmers will<br />

enjoy wider latitude of access<br />

to loans from either commercial<br />

banks or BoA with<br />

less hassles.


8 BUSINESS DAY C002D5556<br />

NEWS<br />

World Mosquito Day: Nigeria slowing<br />

global fight to wipe out mosquitoes<br />

ANTHONIA OBOKOH<br />

Nigeria suffers<br />

the world’s<br />

greatest malaria<br />

burden and<br />

accounts for a<br />

quarter of the burden of malaria<br />

epidemic globally with<br />

97 percent of the population<br />

at risk of contracting malaria,<br />

according to latest report by<br />

the World Health Organisation<br />

(WHO), indicating that<br />

the country is slowing down<br />

global efforts to control the<br />

spread of mosquitoes.<br />

Nigeria has made enormous<br />

strides in lowering the<br />

national impact of mosquitoes,<br />

which is responsible for<br />

spreading the diseases like<br />

malaria, dengue, chikungunya,<br />

zika, and encephalitis.<br />

According to the WHO,<br />

mosquitoes are the world’s<br />

deadliest animals, as these<br />

diseases cause a million<br />

losses (deaths) every year,<br />

worldwide.<br />

However, health experts<br />

say the major problem with<br />

the prevalence of malaria<br />

is that the mosquitoes and<br />

parasites that cause and<br />

spread the disease are developing<br />

resistance to the<br />

insecticides and antimalarial<br />

drugs used in fighting them.<br />

WHO defines resistance to<br />

insecticides as “an ability to<br />

tolerate doses of toxicants,<br />

which would prove lethal to<br />

the majority of individuals in<br />

a normal population of the<br />

same insect species.”<br />

Resistance arises from the<br />

selection of individuals able<br />

to survive and reproduce in<br />

an insecticide-treated environment<br />

or after being in<br />

contact with insecticides.<br />

World Mosquito Day is<br />

observed on <strong>Aug</strong>ust 20 to<br />

commemorate British doctor<br />

Sir Ronald Ross’ 1897 discovery<br />

that female mosquitoes<br />

were responsible for transmitting<br />

the malaria parasite.<br />

The yearly event creates<br />

awareness about the causes<br />

of malaria and how it can be<br />

prevented, as well as fundraising<br />

for research into the<br />

cure of malaria.<br />

Laz Eze, a public health<br />

expert, told <strong>BusinessDay</strong> that<br />

Nigeria could learn from the<br />

United States of America on<br />

how they tackle the spread of<br />

mosquitoes, saying it should<br />

be a joint effort to eradicate<br />

mosquitoes in the country.<br />

“The key is prevention,<br />

that is how it can be wiped<br />

out. The Federal Government<br />

need to increase its political<br />

will in support of the global<br />

effort, and also the masses<br />

complying on behavioural<br />

change in there various environments<br />

will help reduce<br />

the spreads of mosquitoes<br />

causing the huge burden of<br />

malaria in the country,” Eze<br />

said.<br />

Studies conducted by the<br />

Nigerian Institute of Medical<br />

Research (NIMR) reveal that<br />

there is high level of resistant<br />

mosquitoes in several states<br />

in Nigeria.<br />

Chris Bode, chief medical<br />

director, Lagos University<br />

Teaching Hospital (LUTH),<br />

Idi-Araba, Lagos, says Nigeria<br />

is among the countries that<br />

are still unable to eradicate<br />

malaria, although there has<br />

been renewed interest in researches<br />

and innovations in<br />

diagnostics methods, drugs<br />

productions and the developments<br />

I control measures<br />

to eradicate malaria.<br />

“Increase in the number<br />

of people who sleep under<br />

long-lasting insecticidal nets,<br />

or protected as well as diagnostic<br />

testing of children<br />

and treatment of pregnant<br />

women will contribute to significantly<br />

lowering incidence<br />

and mortality in Nigeria.<br />

Abduction of workers, cultism<br />

threaten businesses in Eket - Group<br />

AMAKA ANAGOR-EWUZIE<br />

Small and big businesses<br />

situated in Eket,<br />

Akwa Ibom State, are<br />

closing down their operations<br />

due to increasing insecurity<br />

in the area, Dominion<br />

Akpan, chairman, Eket<br />

Business Forum (EBF), says.<br />

Akpan, who disclosed this<br />

on Monday, said the recent<br />

abduction of ExxonMobil<br />

workers; incessant cultism,<br />

protests and other security<br />

concerns, had made Akwa<br />

Ibom’s second largest city<br />

none conducive for business.<br />

According to Akpan, “In<br />

July, the Police had to rescue<br />

19 ExxonMobil staff travelling<br />

from Port Harcourt for a<br />

crew change of duty at Qua<br />

Iboe Terminal. The abduction<br />

of the workers was very<br />

worrisome because it was<br />

said to have the blessing of<br />

some community leaders in<br />

the area. The suspected kidnappers<br />

reportedly draped<br />

sacks over their victims’<br />

heads as they took them to<br />

their hideout, but were rescued<br />

by the Police.<br />

“Cultism is also a huge<br />

blight on Eket. Eket, which<br />

has significant presence<br />

of workers of ExxonMobil,<br />

is among the four local<br />

government areas mostly<br />

affected by perennial cultkillings<br />

and related violence<br />

in the state. In June,<br />

cultists in the area killed<br />

three people. A contract<br />

worker with Mobil was<br />

among those killed. He was<br />

reportedly shot in the head<br />

at close range while drinking<br />

at a pub, somewhere in<br />

the city.”<br />

He said the cultists had<br />

also been terrorising businesses<br />

and residents of the<br />

area before 20 of them were<br />

arrested recently.<br />

“Earlier this year, youths<br />

under the aegis of Nigeria<br />

Youth Initiative Forum<br />

(NYIF) in Akwa Ibom State<br />

threatened ExxonMobil, demanding<br />

the employment<br />

of youths within the catchment<br />

area in contracting<br />

firms under the management<br />

of the multinational<br />

company or suffer disruption<br />

of their activities.<br />

“The youths threatened to<br />

barricade the Qua Iboe Terminal<br />

road and the Mobil airstrip<br />

should the company ignore<br />

their demand,” he said.<br />

The EBF chairman further<br />

disclosed that many businesses<br />

were moving out of<br />

Eket to other parts of the state<br />

and in some cases, to other<br />

parts of the country.<br />

Tuesday <strong>21</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

NECA lauds CBN’s<br />

single-digit loan<br />

to real sector<br />

JOSHUA BASSEY<br />

Nigeria Employers’<br />

Consultative Association<br />

(NECA)<br />

has lauded the<br />

Central Bank of Nigeria<br />

(CBN) on agreement reached<br />

with the Bankers’ Committee<br />

to offer single-digit interest<br />

rate loans to operators in the<br />

manufacturing and agricultural<br />

sectors of the economy,<br />

from commercial banks’<br />

Cash Reserve Requirement<br />

(CRR) with the apex bank.<br />

Olusegun Oshinowo, director-general<br />

of NECA, applauded<br />

the scheme, noting<br />

that it would aid the development<br />

of the real sector.<br />

Oshinowo, however,<br />

pointed out the need to extend<br />

the scheme beyond the<br />

real sector, saying, “Though<br />

the scheme is commencing<br />

with manufacturing and agricultural<br />

sectors, it should<br />

be extended to other sectors<br />

of the economy, especially<br />

sectors that would create jobs<br />

for the teeming youth population.<br />

We believe that the<br />

focus is to ensure the growth<br />

of the economy, especially<br />

now that we are out of recession<br />

and have achieved some<br />

stability.”


Tuesday <strong>21</strong> <strong>Aug</strong>ust <strong>2018</strong> C002D5556 BUSINESS DAY 9


Tuesday <strong>21</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

10 BUSINESS DAY<br />

C002D5556<br />

COMMENT<br />

MAZI SAM OHUABUNWA OFR<br />

sam@starteamconsult.com<br />

I<br />

have been in the United States<br />

of America attending family<br />

events and attempting a vacation.<br />

Before I left Nigeria, I was<br />

really downcast with the turn of<br />

events in country, especially the show<br />

of shame happening in the political<br />

circles: Rumours of planned decamping,<br />

mass decamping and some descamping;<br />

threats of impeachment and<br />

attempted impeachments in the midst<br />

of worsening insecurity and growing<br />

poverty. Nigerian politicians seem to<br />

be taking the people for a ride. For me<br />

the political environment in the country<br />

was unpleasant especially the high<br />

display of impunity and rascality by<br />

the security agencies. Naturally many<br />

people were blaming President Muhammadu<br />

Buhari (PMB) and his ruling<br />

APC party for fouling the environment.<br />

However, when I arrived the USA<br />

and turned on the TV and listened to<br />

what people were saying about President<br />

Donald Trump (PDT), I realized<br />

that the social and political environment<br />

in the USA was also agitated and<br />

for some very unpleasant, though for<br />

different reasons and circumstances.<br />

Just as many Nigerians were blaming<br />

PMB, so were many Americans that<br />

I spoke to or watched on TV pissed<br />

off with PDT. That got me thinking.<br />

Are there parallels, coincidences<br />

and differences between these two<br />

leaders who though are being heavily<br />

criticized by many today, also seem to<br />

enjoy cult following by group of others<br />

STRATEGY & POLICY<br />

MA JOHNSON<br />

Johnson is a marine project management<br />

consultant and Chartered Engineer. He is<br />

a Fellow of the Institute of Marine Engineering,<br />

Science and Technology, UK.<br />

“The transmission of knowledge and the<br />

capacity to sustain excellence, to produce<br />

relevant research results and to offer the<br />

society convincing and intelligent social<br />

criticism has been dwindling rapidly<br />

in our universities. This has resulted in<br />

societal stagnation rather than national<br />

development.” – Professor Eyitope<br />

Ogunbodede, Vice Chancellor, Obafemi<br />

Awolowo University, Ile Ife<br />

The above quote was sourced<br />

from a presentation delivered<br />

by the erudite professor of<br />

Preventive and Community<br />

Dentistry, Eyitope Ogunbodede at the<br />

First Rehoboth Dream Solid Foundation<br />

Annual Lecture <strong>2018</strong> edition which<br />

took place on 9 <strong>Aug</strong>ust at the Admiralty<br />

Conference Centre, Lagos. The paper<br />

titled “Public Education in the <strong>21</strong>st<br />

Century: A Reappraisal of the Nigerian<br />

Education System since Independence,”<br />

generated a debate regarding<br />

comment is free<br />

Send 800word comments to comment@businessdayonline.com<br />

Is there a common destiny between Buhari & Trump?<br />

who seem unfazed by the criticisms?<br />

First I noticed that both PMB and<br />

PDT are not mainstream politicians,<br />

though they have long nurtured the<br />

desire to rule. They are not chartered<br />

politicians like my sibling- Senator<br />

Mao. Yes, they have had long political<br />

affiliations but seem to lack<br />

normative political skills. Trump<br />

has been a real-estate businessman<br />

and TV personality while Buhari<br />

has been essentially a soldier. Even<br />

in their political affiliations, they<br />

have moved around. PDT was a<br />

Democrat at some point (up till 1987,<br />

2001-2009), Reform Party (1999-<br />

2001), Independent (2011-2012) and<br />

Republican (1987-1999, 2009-2011,<br />

2012-Present). He also had made<br />

some attempts to join the presidential<br />

race at three previous times and<br />

actually went through Reform Party<br />

primaries before dropping out and<br />

then finally making the bold and<br />

audacious bid in 2016 that brought<br />

him to the Presidency. PMB we know<br />

seized power through a military coup<br />

in December 1983 and was, in turn,<br />

overthrown in <strong>Aug</strong>ust 1985. He contested<br />

three times under two political<br />

platforms (2003-ANPP, 2007-ANPP,<br />

2011-CPC) before making the 4th<br />

and ultimate bid in 2015 on the APC<br />

platform that finally brought him to<br />

the presidency.<br />

Second, PDT is the oldest and<br />

wealthiest person to become President<br />

in America at age 70 just as PMB<br />

is the oldest person to become Nigeria’s<br />

civilian President at age 73. PMB<br />

was supported to become Nigerian<br />

President by Obama and he was the<br />

first African President to be invited<br />

to the White House by Trump. Third,<br />

both PMB and PDP won elections<br />

to the presidency against the run of<br />

play- coming from opposition parties<br />

and were heavily de marketed<br />

because of their past records.<br />

Fourth, both are strong willed<br />

and profess populist, protectionist<br />

Are there parallels,<br />

coincidences and<br />

differences between<br />

these two leaders<br />

who though are being<br />

heavily criticized by<br />

many today, also seem<br />

to enjoy cult following<br />

by group of others who<br />

seem unfazed by the<br />

criticisms?<br />

and nationalistic world views and currently<br />

have poor domestic ratings mostly<br />

for different reasons- PMB for poor<br />

security management, struggling and<br />

post-recession economy, one-sided<br />

anti-corruption fight and a rancorous<br />

political environment, while for PDT<br />

it is for his largely anti-American stand<br />

on many issues, his romance with Putin<br />

of Russia and the repudiation of global<br />

agreements- WTO, Paris climate agreements,<br />

Iran nuclear deal etc. He seems<br />

to be turning American values upside<br />

down, restricting freedom of speech<br />

and press freedom and currently has<br />

grave integrity challenges. Fifth, both<br />

have scant respect for diversity. In<br />

PMB’s security architecture and discretionary<br />

appointments, he has ignored<br />

the Southeast Nigeria and has focused<br />

heavily around his catchment area. The<br />

gains made by women in Jonathan’s era<br />

have been grossly eroded. Similarly,<br />

PDT has expressed racial preferences<br />

and in his White House, most of the<br />

faces are white and the colour and<br />

gender diversity built by Obama has<br />

been fully annihilated. PDT is accused<br />

of trying to re-establish white<br />

supremacy while PMB is accused of<br />

trying to establish a Fulani empire.<br />

On the flip side, PDT is loquacious<br />

but PMB is taciturn though both have<br />

to be kept on point, to avoid accidental<br />

discharges, which happens more with<br />

PDT as he often feels obliged to comment<br />

on every issue from his twitter<br />

account. PDT is very active, pushing<br />

his agenda and fighting through<br />

several unpopular policies, executive<br />

orders and social commentary, but<br />

PMB is restrained and seems more<br />

strategic than tactical.<br />

As it stands, both seem to be fighting<br />

battles for political survival. Both<br />

men are in their first terms and from<br />

all indications want to do second<br />

terms as allowed by their respective<br />

country’s constitutions. PDT is facing<br />

tough challenges. He is at logger<br />

heads with most of the international<br />

community, except perhaps Russia<br />

and Israel. He regards the European<br />

Union (EU) as adversaries or even<br />

enemies. He is at war with closest<br />

Neighbours - Mexico and Canada and<br />

has problem with NATO allies. He is<br />

currently undertaking an economic<br />

warfare with China using unheard of<br />

tariff spikes with China struggling to<br />

retaliate. He has exacerbated the Middle<br />

East tensions with his unilateral<br />

recognition of undivided Jerusalem<br />

as the capital of Israel, moving the US<br />

embassy from Tel Aviv to Jerusalem.<br />

He has repudiated the Iran nuclear<br />

deal and is currently on a shouting<br />

match with Tehran, recently opening<br />

another shouting frontier with Turkey.<br />

The international community would<br />

wish for a change of leadership in<br />

America by 2020 or preferably earlier.<br />

Naturally they share similar views<br />

with the Democratic Party and now<br />

An appraisal of public education in Nigeria<br />

the poor state of public education in<br />

the country.<br />

The gist of Ogunbodede’s presentation<br />

is that Nigerian educational<br />

institutions at all levels must undergo<br />

critical reforms and restructuring to<br />

enable them make meaningful contributions<br />

to national development in the<br />

Twenty-first Century. Certainly, this is<br />

not the first time one of our brilliant<br />

and intellectually gifted academic has<br />

drawn attention of policy makers to<br />

the fact that with technology changing<br />

rapidly, and the world becoming<br />

increasingly knowledge based, education<br />

has emerged as a key determinant<br />

of a nation’s economic development.<br />

The truth is that a country with low<br />

educational standard can never join<br />

the league of industrialized nations.<br />

As an observer and beneficiary<br />

of public education in Nigeria, one<br />

could assert that things have never<br />

been this bad with public primary,<br />

secondary and tertiary institutions in<br />

the country. Admittedly, it is not all bad<br />

news because the number of primary,<br />

secondary, and tertiary educational<br />

institutions have increased in the past<br />

four decades. These institutions have<br />

produced many brilliant students and<br />

outstanding teachers in the country. In<br />

the 1980s, Nigeria had 16 universities.<br />

Today, there are a total of 162 universities<br />

in Nigeria comprising 41 Federal,<br />

47 State and 74 private, at various levels<br />

of development and growth, according<br />

to Ogunbodede. There is no state<br />

of the federation that does not have<br />

more than one university. So whilst we<br />

‘<br />

’<br />

concede that progress has undoubtedly<br />

been made, serious question still remains<br />

about the quality of public education in<br />

Nigeria. A visit to any public primary,<br />

secondary, and tertiary institution will<br />

expose the level of decay and inadequacies<br />

of facilities. Yet, students are enrolled<br />

beyond the capacity of classrooms and<br />

other structures without a corresponding<br />

increase in the number of teachers.<br />

Budgetary allocation to public education<br />

is poor and on a downward trend in the<br />

past few years.<br />

Lecturers in public universities are<br />

neglected because of inadequate funds<br />

for research, conferences, and capacity<br />

building workshops. We now have a situation<br />

where competent and dedicated<br />

university administrators are endangered<br />

species. Teachers and lecturers are poorly<br />

rewarded such that most people consider<br />

academic work as the job of last resort.<br />

That is why most teachers and lecturers<br />

engage in parallel time consuming<br />

occupations which undermine their<br />

performance. For public education to<br />

thrive, every aspect of the society must<br />

be involved. Education is the prime<br />

mover of any given society and a critical<br />

factor for improving the quality of human<br />

resources. Education, either in private or<br />

public institutions takes input from several<br />

factors of the society and gives outputs<br />

to these factors. These factors include but<br />

not limited to culture, human and natural<br />

resources, nation’s historical background,<br />

industrial development strategy and<br />

leadership amongst others. These factors<br />

must be of higher standard before Nigeria<br />

can have quality education. What a na-<br />

tion provides as inputs into education<br />

is what she gets as outputs. It is a case<br />

of garbage-in, garbage-out (GIGO).<br />

Each factor, though discrete are at the<br />

same time mutually interdependent<br />

with other factors. Thus, a progress<br />

within any factor on its own or indeed<br />

a combination of a limited number of<br />

factors will not give rise to national development.<br />

The chances of success will<br />

rather increase if all factors including<br />

education are married together with the<br />

precision of a good orchestra.<br />

In order to have a high standard of<br />

public education, Nigeria must parade<br />

visionary leaders across the entire<br />

spectrum of the society. No nation can<br />

develop without visionary leaders. All<br />

things being equal, the probability of<br />

getting visionary leaders is higher in<br />

societies where the people are more<br />

educated and gifted than one peopled<br />

by dullards. Hence, the truism that nations<br />

get the leaders they deserve.<br />

When the culture is poor and investment<br />

in human resources is low,<br />

Nigeria cannot have quality education.<br />

The standard of education will not be<br />

high when there is disjointed national<br />

development strategies and policies.<br />

Therefore, national development is<br />

not merely the function of economic<br />

conditions alone but arises from the<br />

total situation within the society. Have<br />

we ever asked ourselves why poor societies<br />

remain poor? It is because those<br />

societies have neglected the cultural<br />

dimension to economic development. If<br />

a nation’s value system is poor, then she<br />

remains backward ad infinitum. Nigeria<br />

many conservative Republicans are<br />

even sharing this view. Last week<br />

President Jimmy Carter spoke, following<br />

earlier comments by George<br />

Bush and Ronald Reagan’s daughter<br />

and several other leading Republicans<br />

like Senator John McCain. Even the<br />

intelligence community has joined in<br />

raising the red flag against PDT. Everybody<br />

is waiting for special counsel,<br />

Robert Mueller’s report on Russia and<br />

related matters!<br />

Fortunately, PMB does not seem to<br />

have much problem with the international<br />

community, though Nigeria is<br />

holding Africa back in many respects,<br />

more so now with its reluctance to<br />

sign the African Continental Free<br />

trade Area (AfCFTA) pact. He is widely<br />

respected abroad and has been made<br />

the anti-corruption champion by the<br />

African Union (AU).<br />

But PMB has plenty of issues domestically,<br />

the greatest of them being<br />

his patent inability to secure the lives<br />

of Nigerian civilians. Life has always<br />

been cheap in Nigeria since 1966,<br />

when the Military, of which he was a<br />

key player, turned Nigerians against<br />

themselves. But in the last three years,<br />

life has become completely worthless<br />

in many parts of Nigeria. This coupled<br />

with the inability of his ruling party<br />

APC to either unite its members or<br />

cause the government to unite the<br />

people of Nigeria.<br />

Many Nigerians say that the country<br />

has never been as divided as it is<br />

today under PMB as ever it has been<br />

since the end of the Nigerian civil war<br />

in 1970. Coincidentally Many Americans<br />

say that America has never been<br />

as divided as it is today under PDT<br />

since the end of the American Civil<br />

war in 1865.<br />

Would this be worthy legacies for<br />

PMB & PDT? I would rather not.<br />

Send reactions to:<br />

comment@businessdayonline.com<br />

cannot be an industrialized economy<br />

without adapting its culture to modern<br />

industrial realities.<br />

Nigerians generally have not imbibed<br />

the culture of using scientific<br />

means to solve industrial, medical,<br />

governance and managerial problems<br />

etcetera. Many Nigerians have not accepted<br />

science, and technology as a<br />

way of life. Rather, most Nigerians have<br />

remained superstitious and animistic.<br />

We want miracle to happen in national<br />

development. But there is no short<br />

cut, the people must work diligently<br />

to achieve national development. As<br />

primary, secondary and tertiary institutions<br />

increase, education has<br />

not significantly changed how most<br />

Nigerians relate to the natural world.<br />

Public education can improve in Nigeria<br />

provided all other factors of the<br />

society mentioned above are of higher<br />

standard. Otherwise, Nigeria will not<br />

be able to develop highly skilled and<br />

technologically adroit citizens that will<br />

enable her transit from backwardness<br />

to industrialization. Time has come<br />

for state and federal governments to<br />

overhaul curricula of public schools,<br />

and provide adequate funds to enable<br />

these institutions prepare students who<br />

are pro-industry. Contributions from<br />

families, communities and the Organized<br />

Private Sector will go a long way to<br />

improving public education because<br />

state and federal governments cannot<br />

do it alone.<br />

Send reactions to:<br />

comment@businessdayonline.


Tuesday <strong>21</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

COMMENT<br />

RAFIQ RAJI<br />

“Dr Raji is chief economist at Macroafricaintel.<br />

He was previously an<br />

Africa Economist at Standard Chartered<br />

Bank, London, UK. (Twitter: @<br />

DrRafiqRaji)”<br />

Four years ago, Fidelity<br />

Bank aimed to be Nigeria’s<br />

top tier 2 bank.<br />

It succeeded. Fidelity<br />

now aims to be a tier<br />

1 bank by 2022. Rated B- by Fitch<br />

and S&P Global Ratings, Fidelity<br />

has a total asset base of $4.4 billion,<br />

4.1 million bank accounts,<br />

1.5 million mobile customers,<br />

and more than 3,000 professional<br />

staff. It is ranked amongst the top<br />

10 banks in Nigeria, albeit with a<br />

market share of about 5 percent.<br />

C002D5556<br />

comment is free<br />

Fidelity bank: Steadily aiming high<br />

It is also reputed to be one of six<br />

Nigerian banks that conducts an<br />

interim audit of its financials and<br />

was the first to adopt a market<br />

reflective exchange rate for preparing<br />

them. Fidelity was also<br />

recently rated the 4th best bank<br />

in the retail segment by KPMG,<br />

a consultancy, in its 2017 Banking<br />

Industry Satisfaction Survey<br />

(BISS).The bank already maintains<br />

high standards for some<br />

regulatory metrics: its capital<br />

adequacy ratio was unchanged<br />

at 16 percent in its most recent<br />

reporting, above the regulatory<br />

minimum requirement of 15<br />

percent. Chief executive Nnamdi<br />

Okonkwo attributes the successes<br />

under his four-year stewardship<br />

thus far to a strong management<br />

team and well-motivated<br />

employees. In fact, Fidelity staff<br />

are believed to be one of the best<br />

remunerated in the industry. It<br />

also has perhaps the most genderfriendly<br />

top management team<br />

of any Nigerian bank, with three<br />

female executive directors.<br />

‘<br />

In fact, Fidelity staff are<br />

believed to be one of<br />

the best remunerated in<br />

the industry. It also has<br />

perhaps the most genderfriendly<br />

top management<br />

team of any Nigerian<br />

bank, with three female<br />

executive directors<br />

’<br />

Organic growth strategy<br />

How does Fidelity plan to operationalise<br />

its tier 1 ambitions?<br />

Okonkwo prefers an organic strategy,<br />

but would also consider acquisition<br />

opportunities if they align<br />

Send 800word comments to comment@businessdayonline.com<br />

with the bank’s strategy. Does<br />

Fidelity plan to raise new capital?<br />

There are no immediate plans to<br />

do so, the chief executive says in<br />

response. But it could seek funding<br />

in the local debt market during<br />

the course of the year. In any case,<br />

it sold a $400 million Eurobond<br />

in the 2017 financial year. Asked<br />

what his strategies for growth<br />

are, Okonkwo highlights three<br />

things: Digitisation, especially<br />

via its“Fidelity Mobile” platform,<br />

has attracted more than 1 million<br />

new customers in the past three<br />

years. In fact, digital banking now<br />

accounts for over 25 percent of<br />

the bank’s fee income. The bank<br />

is also counting on its digital<br />

banking platform to drive down<br />

the cost-to-income ratio to 50<br />

percent (72.7 percent in Q1 <strong>2018</strong>)<br />

by ensuring at least 90 percent of<br />

total transaction volumes are via<br />

digital channels.“We will enhance<br />

our robust electronic banking<br />

processes and products thereby<br />

deepening our hold on the retail<br />

and commercial markets, small<br />

BUSINESS DAY<br />

11<br />

and medium scale enterprises and<br />

niche corporate clientele”, Okonkwo<br />

told shareholders in May at the<br />

bank’s 30th Annual General Meeting<br />

(AGM) meeting in Lagos. For<br />

its SME clients, the bank plans an<br />

“SME Funding Fair” where it aims<br />

to fund as many SMEs as possible<br />

to the tune of N500 million. If successful,<br />

it would become an annual<br />

event, Okonkwo says. Bottomline,<br />

Fidelity aims to be the “go-to<br />

bank for SMEs”. Fidelity also sees<br />

growth potential in the fast moving<br />

consumer goods, manufacturing,<br />

retail and agriculture sectors and<br />

has set a <strong>2018</strong> loan growth target<br />

for these sectors of 10 percent.<br />

• The column is a partner statement<br />

I wrote for Fidelity Bank Plc following<br />

a business editors’ meeting with<br />

chief executive Nnamdi Okonkwo<br />

in June <strong>2018</strong>. It was published by<br />

African Business magazine in July<br />

<strong>2018</strong><br />

Send reactions to:<br />

comment@businessdayonline.com<br />

KEHINDE BAMIGBETAN<br />

BAMIGBETAN is Commissioner Ministry<br />

of Information & Strategy, Lagos state<br />

The set theory is a commonsensical<br />

heritage of<br />

arithmetic. By defining a<br />

selection from a universe<br />

as a set, it makes value judgments<br />

that could relate to the mass. The<br />

Economist Intelligence Unit, the<br />

research arm of the highly prestigious<br />

Economist newsmagazine experiments<br />

with the set theory every<br />

year. To execute its livability survey,<br />

it selects 140 cities out of millions of<br />

cities across the world. This means a<br />

set of 140 cities out of a million plus<br />

universe of cities.<br />

That a city qualifies to be among<br />

this chosen few is a loud announcement<br />

of its arrival in the league<br />

of international destinations of<br />

commerce, industry and tourism.<br />

It means it is being benchmarked<br />

in its region as the most important<br />

place people are likely to visit and<br />

companies are likely to open shop<br />

in that region. That is the positive<br />

message for Lagos: that its struggle<br />

to modernize its infrastructures and<br />

services has attracted the attention<br />

of the international players so much<br />

that is has been recommended for<br />

this study.<br />

Curious to know why and how<br />

Lagos got into the select group of<br />

140 cities, I sent a tweet to Roxanna<br />

Slavcheva, the head of the<br />

City Practices Unit of the EIU, who<br />

put together the research. Her reply:<br />

When the worst of the best is better than the rest<br />

“To answer your question simply,<br />

the inclusion of Lagos in the survey<br />

was motivated by client demand.<br />

Currently we have a fixed list of cities<br />

that we conduct the live ability<br />

survey for. The ranking is globally<br />

focused on business centres around<br />

the world. That is why our survey is<br />

global and seeks to quantify tangible<br />

challenges to lifestyle according<br />

to the same set of criteria across all<br />

140 locations.”<br />

The live ability report is an advisory<br />

data motivated by the need to<br />

give multinational companies seeking<br />

to send their staff to locations<br />

across the world a guide on what<br />

to pay them while there. How does<br />

the rating work? Read the EIU: “The<br />

concept of live ability is simple: it<br />

assesses which locations around<br />

the world provide the best or the<br />

worst living conditions. Assessing<br />

live ability has a broad range of uses,<br />

from benchmarking perceptions<br />

of development levels to assigning<br />

a hardship allowance as part of<br />

expatriate relocation packages. The<br />

Economist Intelligence Unit’s live<br />

ability rating quantifies the challenges<br />

that might be presented to<br />

an individual’s lifestyle in any given<br />

location, and allows for direct comparison<br />

between locations.<br />

Every city is assigned a rating<br />

of relative comfort for over 30<br />

qualitative and quantitative factors<br />

across five broad categories:<br />

stability; healthcare; culture and<br />

environment; education; and infrastructure.<br />

Each factor in each<br />

city is rated as acceptable, tolerable,<br />

uncomfortable, undesirable or intolerable.<br />

For qualitative indicators,<br />

a rating is awarded based on the<br />

judgment of in–house analysts and<br />

in–city contributors. For quantitative<br />

indicators, a rating is calculated<br />

based on the relative performance<br />

of a number of external data points.<br />

The scores are then compiled<br />

and weighted to provide a score of<br />

1–100, where 1 is considered intolerable<br />

and 100 is considered ideal.<br />

The live ability rating is provided both<br />

as an overall score and as a score for<br />

each category. To provide points of<br />

reference, the score is also given for<br />

each category relative to New York<br />

and an overall position in the ranking<br />

of 140 cities is provided.”<br />

The EIU, a private research consultancy,<br />

did not survey all the cities<br />

in the world. Rather, it looked at<br />

locations “around” the world. Therefore,<br />

it couldn’t have reported on an<br />

assignment it did not undertake. It<br />

chose 140 cities across regions and<br />

ranked them based on its live ability<br />

indicators such as social stability,<br />

healthcare, culture, environment,<br />

education and infrastructures. This<br />

report is an annual research product<br />

or book sold to countries, companies<br />

and individuals. In marketing the<br />

report to attract the patronage of this<br />

global clientele, the EIU put a nice<br />

spin on it by branding it as a “world”<br />

report.<br />

That is not the problem. The<br />

problem is that the media gullibly<br />

swallowed it hook, line and sinker<br />

and misrepresented a survey of 140<br />

cities as a survey of the world’s millions<br />

of cities. This hasty generalization<br />

is logically fallacious and calls to<br />

question the failure of rigour among<br />

the gatekeepers who are responsible<br />

for interrogating information disseminated<br />

by a company in a bid to<br />

sell its product before uploading for<br />

public consumption.<br />

It is more depressing that no<br />

controversy over the indices used<br />

is trending on Facebook, blogs and<br />

twitter handles of the country’s commentariat.<br />

For instance, this report<br />

uses New York, United States as its<br />

reference city. To demonstrate the<br />

contradictions of this modernization<br />

model which has been criticised by<br />

Third World scholars such as Samir<br />

Amir, Bade Onimode and others,<br />

resource mobilization influences the<br />

provision of infrastructures and services<br />

by cities. Considering prudent<br />

management as a constant factor<br />

between Lagos and New York, the<br />

massive difference in the resources<br />

available to both cities already<br />

shows which lags behind the others.<br />

In 2017, New York City Council<br />

budgeted $82.2 billion (N29.5 trillion).<br />

Same year, Lagos budgeted<br />

N7.2 trillion.<br />

Or consider population. With<br />

hourly migrant figure of 186 persons,<br />

Lagos chokes under a population<br />

weight of 22 million people.<br />

New York’s most current census<br />

of 2015 puts its population at 8,<br />

556,405. Let us add the increase over<br />

the years generously to estimate as<br />

10 million today. Matching both<br />

resource and the population for<br />

both cities, we can see where the<br />

pendulum swings. Vienna, the best<br />

of the report’s 140 countries, spent<br />

4 million US dollars to service its<br />

population of 1,800,000 residents<br />

in 2017.<br />

The failure to critically review the<br />

report from the perspective of economic<br />

development and appreciate<br />

the location of each of these cities<br />

in the international system of trade<br />

and development is a recent handicap<br />

of Nigeria’s media scholarship.<br />

It is indeed surprising that few, if<br />

any has bothered to read the report<br />

.The drawbacks in Lagos’ strive to<br />

catch up with the world such as<br />

the neglect it has suffered since the<br />

movement of the federal capital to<br />

Abuja and the denial of resources<br />

needed for its development due to<br />

its political distance from the party<br />

controlling the federal government<br />

for 16 years of the current democratic<br />

dispensation are well known.<br />

Today, 37 of the 57 local authorities<br />

of Lagos State still demand and<br />

deserve federal allocation.<br />

Despite these challenges, the reality<br />

is that Lagos is not resting on its<br />

oars. With the bold and daring push<br />

of its helmsmen-Bola Tinubu and<br />

Raji Fashola- since the resumption<br />

of democratic rule, the megacity has<br />

been experiencing transformation<br />

in all spheres and playing catch up<br />

with centuries –old metropoles. This<br />

momentum has been scaled up in<br />

the last three years under Governor<br />

Akinwunmi Ambode with the massive<br />

investment in infrastructures<br />

earning the city the description of “a<br />

huge construction site”.<br />

Lagos not only means business,<br />

it is reforming its processes digitally<br />

and humanly to set up shop as the<br />

most desirable destination for commerce,<br />

industry and tourism. The<br />

emerging landscape of the 10-lane<br />

Murtala Muhammed Airport Road,<br />

Oshodi Transportation Interchange,<br />

the JK Randle Cultural Centre, the<br />

development of waterways and rail<br />

infrastructures, Oshodi-Abule-Egba<br />

Bus Rapid Transport route and first<br />

DNA centre in West Africa gradually<br />

rises into view.<br />

But it is not all about brick and<br />

mortar. More powerful testimonies<br />

are being recorded in entrepreneurship<br />

as billions of credit to small and<br />

medium scale businesses through<br />

the Lagos State Employment Trust<br />

Fund drive the jobless from the<br />

streets to factories. The deployment<br />

of massive security personnel and<br />

equipment, including CCTV technology<br />

and street lights elongate the<br />

city’s business into the wee hours<br />

of the morning. Social inclusion<br />

policies have brought the disabled,<br />

the youth and the women closer to<br />

public resources. Town hall meetings<br />

have shown an administration<br />

committed to good governance and<br />

transparency. These have contributed<br />

to the resilience that was globally<br />

acknowledged last year.<br />

Ranking 138th among business<br />

locations across the world is the<br />

recognition that Lagos has left behind<br />

millions of many other cities,<br />

including the federal capital, Abuja,<br />

to be among the 140 demanded by<br />

businessmen. And that is enough<br />

reason to conclude that the allegedly<br />

worst city among the world’s best 140<br />

is, indeed, better than the rest.<br />

Send reactions to:<br />

comment@businessdayonline.com


12 BUSINESS DAY C002D5556 Tuesday <strong>21</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

Editorial<br />

PUBLISHER/CEO<br />

Frank Aigbogun<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, OPERATIONS<br />

Fabian Akagha<br />

EXECUTIVE DIRECTOR, DIGITAL SERVICES<br />

Oghenevwoke Ighure<br />

ADVERT MANAGER<br />

Adeola Ajewole<br />

FINANCE MANAGER<br />

Emeka Ifeanyi<br />

MANAGER, CONFERENCES & EVENTS<br />

Obiora Onyeaso<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 />

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 />

When a government adopts falsehood as policy<br />

When the global<br />

corruption<br />

watchdog,<br />

Transparency<br />

International<br />

(TI) released its 2017<br />

Corruption Perception Index<br />

(CPI), which ranked Nigeria<br />

148 out of 180 countries despite<br />

the efforts of the Buhari<br />

administration to tackle corruption<br />

in the country, the<br />

federal government went into<br />

denial mode, accusing TI of<br />

bias. After reeling off its own<br />

facts on fighting corruption<br />

in Nigeria, the presidency<br />

dismissed TI’s report as “a<br />

political distraction” given<br />

that some critics of his administration<br />

are patrons of<br />

the watchdog. It did not matter<br />

to the government that as<br />

an opposition party, it had<br />

consistently relied on TI’s<br />

ranking to discredit the previous<br />

government and position<br />

itself as a better alternative.<br />

The rational thing for the<br />

government to do if it disagreed<br />

with Nigeria’s ranking,<br />

is to fault the integrity of the<br />

primary data source (methodology)<br />

- which was not<br />

generated by the watchdog<br />

anyway – used for the study.<br />

But no, it did not. It couldn’t<br />

have anyway. Instead, it went<br />

the lazy way – attacking TI<br />

just because some of its board<br />

members, who are Nigerians<br />

and are within their rights to<br />

hold their personal views, are<br />

critics of the Buhari administration.<br />

What a shame!<br />

But if we thought that was the<br />

lowest the government could go,<br />

it descended further into outright<br />

lies when the Brookings Institution,<br />

drawing its data from the<br />

World Poverty Clock, released its<br />

report, showing that Nigeria has<br />

overtaken India as the country<br />

with the most people living in<br />

extreme poverty in the world.<br />

Details of the report shows that<br />

Nigeria now has over 87 million<br />

of its citizens living in extreme<br />

poverty compared to India’s<br />

with just 73 million. But whereas,<br />

India, with a population of 1.35<br />

billion, has continued to see a<br />

rapid decline in the number of<br />

its population leaving under<br />

extreme poverty, Nigeria, with<br />

just a population of under 200<br />

million, has continued to see its<br />

desperately poor population rising<br />

at an alarming rate. According<br />

to the report, extreme poverty<br />

is growing by six people every<br />

minute in Nigeria while poverty<br />

in India continues to fall.<br />

Pronto, the government<br />

rolled out its propaganda machines<br />

to counter the report<br />

with otherwise intelligent ministers<br />

coming to voice inanities<br />

and outright lies to refute a fact<br />

that is as clear as daylight. It did<br />

not bother the government that<br />

every rational individual with<br />

basic knowledge of economics<br />

can see clearly how its illconceived<br />

policies since 2015<br />

have been throwing millions of<br />

Nigerians into extreme poverty.<br />

Now, even more insulting to<br />

Nigerians is government’s feeble<br />

attempts to deny and fault a UN<br />

report that the Nigerian government<br />

had paid “huge ransom”<br />

for the release of the kidnapped<br />

Dapchi school girls in February.<br />

The report identified these<br />

ransom payments as the major<br />

factor fuelling the nefarious activities<br />

of Boko Haram and other<br />

terrorist groups in the region.<br />

Now, virtually everyone with<br />

knowledge of Boko Haram activities<br />

and the negotiations that<br />

went into the release of some<br />

of the Chibok and later Dapchi<br />

girls know that the Nigerian government<br />

has been paying ransoms<br />

to Boko Haram – and it is<br />

indeed these ransom payments<br />

that is fuelling further kidnaps<br />

by the sect and largely funding<br />

the activities of the terrorist sect.<br />

It therefore beggars belief that<br />

the government is trying to deny<br />

the obvious!<br />

From these instances, what<br />

is becoming clear is that the<br />

government has adopted a<br />

policy of deliberate falsehood<br />

and disinformation as a means<br />

of communication and it is doing<br />

great damage to the image of<br />

the country. These reports are<br />

results of carefully conducted<br />

research and facts gathered<br />

on the field by respected and<br />

apolitical international/global<br />

agencies. The reports are respected<br />

and accepted worldwide<br />

and most countries rely on<br />

them to formulate policies and<br />

or programmes. It therefore<br />

does not show us in good light<br />

when the Nigerian government<br />

tries to deny these reports just<br />

because they reveal inconvenient<br />

truths.<br />

The government may have<br />

come to power through propaganda,<br />

but it cannot continue<br />

to govern through propaganda<br />

while labelling all critical voices<br />

liars and agents of corruption.<br />

It may rely on propaganda to<br />

keep its support base, but it<br />

cannot rely on propaganda to<br />

gain international support and<br />

recognition. It’s rather making<br />

a mockery of the country and its<br />

intelligent people.<br />

Besides, the government’s<br />

belligerent attitude to factual<br />

reports and data about the<br />

country questions its capacity<br />

to listen to genuine criticisms<br />

and change course when it’s in<br />

the wrong. With a government<br />

that is impervious to criticism<br />

and accepts no wrong, Nigeria<br />

may be headed for the rocks<br />

except a miracle happens!<br />

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Tuesday <strong>21</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

C002D5556<br />

BUSINESS DAY<br />

13<br />

APCON board re-constitution litmus<br />

test for Ikechi Odigbo-led AAAN<br />

… Industry practitioners expecting actions<br />

Stories by Daniel Obi<br />

Media Business Editor<br />

Nigeria’s Integrated<br />

Marketing<br />

Communication<br />

industry<br />

is relying on<br />

Association of Advertising<br />

Agencies of Nigeria, AAAN to<br />

lead the pack in negotiating<br />

and convincing Buhari administration<br />

to re-constitute<br />

the board of Advertising Practitioners<br />

Council of Nigeria,<br />

APCON.<br />

The absence of the AP-<br />

CON board in the last three<br />

years has not allowed the advertising<br />

apex body to function<br />

at full capacity and this<br />

has cold implications for the<br />

advertising industry valued<br />

at about N150 billion.<br />

Statutorily, AAAN has the<br />

largest number of 10 members<br />

in the <strong>21</strong> board membership<br />

of APCON. Though,<br />

out of the 10, it has ceded one<br />

each to OAAN and MIPAN<br />

respectively.<br />

Recently, the new president<br />

of AAAN, Ikechi Odigbo<br />

promised that there are plans<br />

to push for the proper constitution<br />

of APCON council. He<br />

did not elaborate.<br />

When he took office at the<br />

association’s general meeting<br />

in Abeokuta last month,<br />

Ikechi said “there are plans<br />

to push for the proper constitution<br />

of the Advertising<br />

Practitioners’ Council of Nigeria<br />

(APCON) Council”. The<br />

statement is however not<br />

certain whether he is leveraging<br />

the previous president,<br />

Kayode Oluwasona’s plans or<br />

he wants to construct another<br />

strategy for this purpose<br />

under his administration.<br />

According to sources,<br />

the statement will amount<br />

to rhetoric if there are not<br />

enough influence and sway<br />

on the presidency in Abuja<br />

since government sees the<br />

constitution of APCON council<br />

as a political decision.<br />

Another possible move<br />

could be to wrest APCON<br />

from the tight fist of government,<br />

move for the amendment<br />

of the law and allow<br />

it to operate independently<br />

with industry funds, the<br />

source said. The industry is<br />

therefore watching on which<br />

way Ikechi goes to realize industry<br />

expectation.<br />

For over three year, AP-<br />

CON, Nigeria’s advertising<br />

apex regulatory body is yet<br />

to function at full capacity<br />

due to absence of a board.<br />

During his tenure, Kayode<br />

pushed the agenda for AP-<br />

CON council re-constitution<br />

vigorously. In July last year,<br />

Kayode led a delegation to<br />

the Vice President, Yemi Osinbajo<br />

to plead with him for<br />

the board to save advertising<br />

practitioners from undue exposure<br />

and protect the country’s<br />

image by re-constituting<br />

APCON council.<br />

Oluwasona recognized<br />

that the absence of APCON<br />

made it difficult for the country<br />

to achieve descent and<br />

progressive advertising. He<br />

recognised that the non-constitution<br />

of the council has<br />

had grave implications for the<br />

industry.<br />

“So you can imagine in<br />

the last three years APCON<br />

Rotary Club of Akowonjo earmarks project<br />

for execution, commissioning<br />

Rotary Club of Akowonjo,<br />

one of the<br />

clubs under the Rotary<br />

International,<br />

Nigeria, is set to commission<br />

various projects in the<br />

Alimosho Local Government<br />

Area of Akowonjo the club’s<br />

immediate catchment community<br />

which also is the<br />

largest local government in<br />

Lagos State. This is in line<br />

with the club’s promise to execute<br />

impactful projects for<br />

the <strong>2018</strong> to 2019 Rotary year.<br />

This revelation was<br />

Ikechi Odigbo<br />

made by the President of<br />

Rotary Club of Akowonjo,<br />

Rotarian Olabisi Taiwo<br />

during her investiture as<br />

the 3rd female president of<br />

the 33- year old club chattered<br />

by late Past Governor<br />

of Rotary International<br />

District 9110, Martin Itotoi<br />

recently at the Westown<br />

Hotels, Ikeja, Lagos.<br />

In an interview after the<br />

event, the president said<br />

all was set for the commissioning<br />

of some of the club’s<br />

projects in the Alimosho/<br />

Ijedi Iyoha<br />

Akowonjo area of the state by<br />

the District Governor, Rotarian<br />

Kola Sodipo.<br />

She identified the projects<br />

for commissioning<br />

to include the ICT facility<br />

at Abati/Rauf Aregbesola<br />

Primary School, Alimosho;<br />

Flag off of the <strong>2018</strong><br />

Adult Literacy Programme;<br />

launching of a new Adult<br />

Literacy Signage erected for<br />

the school by her club; Tree<br />

Planting at the school’s<br />

premises and donations to<br />

the Little Saints Orphanage,<br />

had barely had a council for<br />

longer than four months.<br />

And when the council is not<br />

there, our trade, our business,<br />

our industry actually<br />

suffers over exposure. The<br />

kind of campaigns, communication<br />

that is responsible,<br />

decent, progressive advertising<br />

cannot be achieved<br />

because it is the council that<br />

is set up to drive it.’’<br />

Kayode attributed the unwholesome<br />

campaigns seen<br />

in the last national elections<br />

happened because there was<br />

no regulatory body to control<br />

political advertising.<br />

Kayode has however<br />

handed over the baton to<br />

Ikechi to continue where he<br />

stopped. Advertisers are waiting<br />

for the next move on this<br />

objective.<br />

Shasha, Alimosho, Lagos.<br />

According to Taiwo, the<br />

District Governor’s visit will<br />

give the club an opportunity<br />

to raise funds towards further<br />

execution of other projects<br />

within the Rotary year. As<br />

she puts it, “after the day’s<br />

projects commissioning,<br />

the evening fellowship with<br />

the District Governor will<br />

culminate in an auction sale<br />

with the immediate proceeds<br />

going to District 9110 Educational<br />

and Welfare Endowment<br />

Fund (DEWEF)”.<br />

‘GEM’s mission is to<br />

enhance growth in light<br />

manufacturing industry’<br />

The last few decades<br />

have given birth to<br />

the rise of light manufacturing<br />

and this has<br />

in turn resulted in a dramatic<br />

rise to the country’s national<br />

income.<br />

It is not news that laborintensive<br />

industries provide<br />

growth opportunities and have<br />

become key economic drivers<br />

of many nations, this is why it is<br />

key to capture the opportunities<br />

arising from the relocation<br />

of light manufacturing from<br />

higher-income countries to<br />

lower income nations.<br />

To support this effort, GEM<br />

Project said it is investing in a<br />

number of initiatives including:<br />

Leather: Recognizing the<br />

important role of the leather<br />

sector to the Nigerian economy,<br />

the GEM Project said it<br />

is providing huge support in<br />

the development of the first<br />

Nigerian leather policy.<br />

“In line with Government’s<br />

commitment to diversifying<br />

the economy from oil to nonoil<br />

economy, and the position<br />

of leather as both domestic<br />

industrial raw material and<br />

export commodity, the GEM<br />

Project provided some expertise<br />

and funding to the multistakeholders’<br />

effort to produce<br />

the much overdue policy that<br />

will govern the operation of<br />

the leather industry in Nigeria.<br />

The draft policy, which was<br />

validated in Sokoto and Aba<br />

by relevant stakeholders has<br />

been submitted to relevant<br />

Ministries and awaits presentation<br />

at the Federal Executive<br />

Council for consideration and<br />

approval.<br />

Automotive Industry: One<br />

of the key sectors of development<br />

is transportation; GEM,<br />

in a statement said it provided<br />

support to this indus-<br />

try due to its huge potential<br />

for growth and job creation.<br />

“The current intervention is<br />

restricted to the automobile<br />

spare parts sub-sector, to assist<br />

the ever-growing need for<br />

vehicle spare parts across the<br />

country and government’s<br />

drive for import substitution<br />

responsibility. In a bid to start<br />

up the intervention with clear<br />

understanding of the value<br />

chain, GEM implemented an<br />

industry mapping of Nnewi<br />

automobile spare parts hubs,<br />

concluded a study on legality/licensing<br />

of replacement<br />

auto parts manufacturing in<br />

Nigeria (using Anambra and<br />

Kaduna as key areas of field<br />

research). The result of the<br />

survey reveals that most of<br />

the replacement parts produced<br />

by MSMEs in the Nigeria<br />

automobile spare parts<br />

industry are generic and do<br />

not infringe on the Original<br />

Equipment Manufacture’s<br />

(OEMs) Intellectual Property.<br />

In addition, GEM further<br />

said that it commissioned<br />

additional study in some<br />

other sub-sectors within the<br />

light manufacturing industry,<br />

aimed to spur investments and<br />

enhance their performance.<br />

The key objectives of the studies<br />

is to identify opportunities<br />

and market failure(s) for each<br />

sector with the focus of uncovering<br />

the potential areas for development<br />

through public and<br />

private sector investments. The<br />

study is therefore, expected to<br />

produce a market assessment<br />

report for the automotive /<br />

spare parts sector, the renewable<br />

energy industry and six<br />

(6) value chains in the Agroprocessing<br />

industry, which<br />

includes; Cocoa, Citrus, Cassava,<br />

Sugarcane, Tomatoes and<br />

Sesames.<br />

Star Beer extends<br />

millionaires campaign<br />

Star Lager Beer, has<br />

extended the Star<br />

United We Shine<br />

Millionaires Promo<br />

by another 30 days to allow<br />

for more consumers in<br />

more regions of the country<br />

to partake in the promo<br />

and win.<br />

The promo which was<br />

launched on the 15th of June,<br />

<strong>2018</strong> will now end on 15th<br />

of September, <strong>2018</strong> a month<br />

after the original end date.<br />

Consumers will continue<br />

to win prizes and millions of<br />

Naira from the crown corks<br />

of Limited Edition Bottles<br />

Of Star Lager with a winning<br />

code that is redeemable via a<br />

USSD dial of *566*20# .<br />

The Star Lager promo<br />

has on offer cash prizes<br />

of N1 million, N2 million,<br />

N5 million and the mega<br />

dream cash of N10 million<br />

for Star consumers across<br />

Nigeria. These are in addition<br />

to millions of free<br />

drinks and other items<br />

available for win.<br />

Designed to reward loyal<br />

consumers, Star Lager with<br />

this move, is reinforcing its<br />

commitment as a consumer<br />

focused brand.


Tuesday <strong>21</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

14 BUSINESS DAY<br />

C002D5556<br />

‘Experiential marketing is biggest tool<br />

to engage consumers for value’<br />

Owolabi Mustapha is the CEO of Maxxconnection, a five year old experiential marketing agency based in Lagos.<br />

Within five years of operation, it has made great strides in creating platforms for brands and consumers to interact<br />

with results to show. Owolabi said CMOs now appreciate the value experiential activity has brought to the marketing<br />

mix. He discussed other advantages and challenges the industry faces. Experts<br />

What is your assessment of<br />

the experiential marketing industry<br />

so far?<br />

Experiential marketing<br />

industry started<br />

very small some years<br />

back. Advertising and<br />

other segments of<br />

IMC had led the pack until about<br />

a decade ago when experiential<br />

took the center stage. Before experiential,<br />

CMOs of multinational<br />

were skeptical, about the value<br />

of experiential. But it is interesting<br />

to see these days that everybody<br />

now appreciates the value<br />

of what experiential has brought<br />

in the mix of marketing. Today,<br />

multinational now invest more<br />

in the experiential industry.<br />

Experiential was a major<br />

form of brands connection in<br />

70s, then it disappeared to resurface<br />

again in late 90s, what<br />

happened?<br />

It was not experiential that<br />

time. It was just promotional activity<br />

as part of advertising. The<br />

traditional advertising used to<br />

have promotional part. At that<br />

time, there were not really media<br />

independent agencies. The practice<br />

then used to be a one-stop<br />

shop where advertising agency<br />

used to have media and promotion<br />

department among others.<br />

With the evolving and dynamic<br />

world, the media has to change<br />

direction. Because of the evolution<br />

of media in conventional<br />

advertising, they had to carve out<br />

their niche out of advertising.<br />

It is argued that experiential<br />

activity is expensive in the basket<br />

of media, PR, advertising<br />

and digital, do you agree?<br />

Experiential is about value<br />

and value comes with cost. The<br />

argument whether it is expensive<br />

or not should not arise because<br />

experiential gives the most value.<br />

Others don’t translate to target<br />

engagement as experiential<br />

does. The value of experiential is<br />

not quantifiable.<br />

Another challenge is that<br />

experiential is limited in scope<br />

and operates in a particular<br />

area, what is your comment on<br />

this?<br />

In marketing, you need to<br />

identify the challenges that you<br />

want to address. After that you<br />

still need to distil your target audience.<br />

If my target audiences<br />

are in a particular area, I don’t<br />

need to waste time and resources<br />

being everywhere. If your target<br />

Owolabi Mustapha<br />

audience is the entire nation, of<br />

course experiential marketing<br />

can address it. There are different<br />

strategic approaches to address<br />

different challenges. Majority of<br />

multinational companies have<br />

more of experiential agencies<br />

working for them than the other<br />

agencies. This is global phenomenon.<br />

You can employ advertising<br />

to reach to mass audience and<br />

use PR to allow people read about<br />

the product but when it gets to<br />

the point that the product needs<br />

to be dropped directly to the people<br />

that need the service, it is experiential.<br />

The value comes when<br />

the people engage the product or<br />

buy it.<br />

To what level would you say<br />

the government has engaged<br />

experiential firms to deliver services<br />

to the citizens?<br />

It is interesting to know that<br />

some of the biggest campaigns<br />

from government are handled by<br />

experiential firms. For instance<br />

one of the biggest campaigns<br />

in Lagos is the count-down in<br />

December. This is a multi-million<br />

naira project. The activities<br />

around it are driven by experiential<br />

firms. For us, we have worked<br />

with a couple of state govern-<br />

ments in Nigeria. We have done<br />

lots of political campaigns. Other<br />

experiential firms are doing other<br />

activities for other states. Experiential<br />

marketing is one of the biggest<br />

tools to engage people for<br />

value.<br />

What is the place of measurement<br />

in experiential marketing<br />

activity as clients are<br />

passionate about impact?<br />

There are different approaches<br />

to measurement. It depends<br />

exactly on what you are measuring.<br />

If it is data, experiential<br />

marketing delivers it and that is<br />

why multinationals are engaging<br />

experiential agencies. Secondly,<br />

there is the connection and the<br />

experience which experiential<br />

gives. We are bringing experience<br />

that is uniquely designed for a<br />

particular product on the table.<br />

I repeat that experiential is not<br />

about cost but the value. Unique<br />

experience that comes with experiential<br />

marketing lives with the<br />

people and it leads to uptake. In<br />

terms of creativity, experiential<br />

agencies are doing very well. They<br />

come up with ingenious creativity.<br />

We have done job for a client<br />

that involves brand engagement,<br />

sales and CSR at the same time.<br />

Any other IMC segment will address<br />

just one of them but we<br />

addressed the three challenges.<br />

The Nigerian Bottling Company<br />

campaign of taking people off the<br />

street was conceptualized by us.<br />

It was an idea of taking people off<br />

the street without applying force<br />

by giving them opportunity to<br />

sell NBC products and rewarding<br />

them with N1m.<br />

You established Maxxconnection<br />

5 years ago, so what actually<br />

motivated you to start the<br />

firm?<br />

Movement is normal occurrence<br />

in human life either<br />

through challenges, the creative<br />

ingenuity and other couple<br />

of indices will determine movement.<br />

We looked at the industry<br />

and there were some quacks<br />

within the industry space, others<br />

are not tech driven and we<br />

thought that there was need for<br />

a unique agency that prides itself<br />

on creativity and technology.<br />

Our campaigns exhibit<br />

these features. Our Coca Cola<br />

campaign was example of really<br />

driving engagement.<br />

Your work on Campari drink<br />

was marvelous with Tuface as<br />

the ambassador. Could you talk<br />

more about it?<br />

In Maxxconnection, we take<br />

In marketing, you need to identify<br />

the challenges that you want to<br />

address. After that you still need to<br />

distil your target audience. If my<br />

target audiences are in a particular<br />

area, I don’t need to waste time and<br />

resources being everywhere<br />

research very seriously. Before<br />

any campaign, we engage thoroughly<br />

on research. Research<br />

gives you insight of what you<br />

want to do in the short, medium<br />

and long term period. We did<br />

extensive research on Campari<br />

as a brand. We looked at the journey<br />

of Campari and found that<br />

it was perceived as drink for the<br />

old. But these days, youth mix it<br />

with their beer. The campaign<br />

was driven on proper positioning<br />

of the drink as a youthful brand.<br />

Again, Trophy Beer is now everywhere<br />

but some years ago, it was<br />

perceived as Yoruba, Illesa drink.<br />

We are part of the success story of<br />

that brand today. The consumers<br />

are telling the story.<br />

How do you see experiential<br />

business in the next 5 years and<br />

where is the place of Maxxconnection?<br />

A whole lot of things will<br />

change for us and for the industry<br />

in the next 5 years. There will be<br />

a lot of strategic association and<br />

affiliation either local or foreign.<br />

Experiential will be placed in a<br />

better position as it is happening<br />

globally. There will be a lot of<br />

mergers and acquisitions in the<br />

industry. Also there will a lot of<br />

tech driven activities in the industry.<br />

Could you to talk more of<br />

your strength and challenges?<br />

We pride ourselves to be very<br />

young and this reflects on the<br />

employees. We believe that the<br />

power belongs to the youth and<br />

that is one of the strengths. We<br />

have also tried to retain most<br />

of our staff since inception. The<br />

challenges are enormous. It is<br />

a systemic and national problem.<br />

For instance the forex is not<br />

bringing strategic investment<br />

into the country. If this does not<br />

happen, it then limits most of the<br />

activities and number of clients<br />

for agencies. We have two clients<br />

that ought to have come in<br />

three years ago, and they are not<br />

certain about Nigeria’s system.<br />

Secondly electricity is a major<br />

challenge. It is costs us heavily<br />

to fuel the generator. There are a<br />

lot of unprofessional agencies in<br />

the industry and unfortunately,<br />

some clients still work with them<br />

because they charge ridiculous<br />

fees and some clients have got<br />

their fingers burnt. Financing<br />

and funding is a major challenge<br />

for the business as single interest<br />

rate is difficult.


Tuesday <strong>21</strong> <strong>Aug</strong>ust <strong>2018</strong> BUSINESS DAY 15<br />

COMPANIES<br />

& MARKETS<br />

Company news analysis and insight<br />

Nigerian Development<br />

Finance Institutions total<br />

assets up 36.8% to N1.3trn<br />

Pg. 16<br />

Ugandan authorities demand MTN listing<br />

on local bourse for license renewal<br />

CYNTHIA IKWUETOGHU<br />

Just like Nigeria, the<br />

Authorities in Uganda<br />

have asked MTN’s<br />

group to list some of<br />

its shares on the local<br />

stock exchange, Uganda Securities<br />

Exchange (USE) as<br />

a condition for renewing its<br />

operating license that is set<br />

to expire in October.<br />

Godfrey Mutabazi, head<br />

of Ugandan Communication<br />

Commission (UCC)<br />

told Reuters that Ugandans<br />

should be able to own a<br />

stake in MTN Uganda which<br />

has been in operation for 20<br />

years in the country.<br />

“We are evaluating the<br />

conditions of the license<br />

renewal and that is one of<br />

the points we are discussing.”<br />

Mutabazi said referring<br />

to a possible listing on USE.<br />

In addition, when he was<br />

asked if the condition was a<br />

prerequisite for prolonging<br />

MTN’s license, he replied<br />

saying it was right.<br />

“The firm had not shown<br />

any resentment to that proposal”,<br />

Mutabazi added.<br />

The firm has dominated<br />

the market in Uganda<br />

throughout its two decades<br />

in the East African country.<br />

It is the largest telecommunications<br />

firm by subscribers,<br />

followed by a unit of<br />

India’s Bharti Airtel and other<br />

smaller players.<br />

Adesola Adeduntan, managing director/chief executive officer, First Bank of Nigeria Limited (third right) flanked by some FirstBank<br />

customers, Ayo Daniyan (left), Mayowa Daniyan (second left), Onyejekwe Nnaemeka (third left), Nicholas Okonkwo (second right)<br />

and Safiyanu Faisa (right) at the FirstBank Voice of Customer held with the Retail Youth segment in Lagos recently<br />

The listing of MTN’s<br />

shares would cause a boost<br />

to the local stock exchange<br />

which is still quite small,<br />

with 16 firms as of July 2014.<br />

The local stock exchange had<br />

not attracted an Initial Public<br />

Offering (IPO) in Six years<br />

since its last IPO of Umeme<br />

(UMEM), a power distribution<br />

company on the USE in<br />

2012 until this month when a<br />

local drugs maker was listed<br />

on the exchange.<br />

“MTN is an investor here<br />

and they have been here for<br />

20 years...to go beyond, I<br />

would argue that they have<br />

been here long enough<br />

they should be identified as<br />

Ugandans and the only way<br />

to do that is to list so that<br />

Ugandans can have a stake<br />

in that company,” Mutabazi<br />

said.<br />

“They should warm to the<br />

government desire to have<br />

some of their shares listed.”<br />

Mutabazi concluded.<br />

Recently, MTN Uganda<br />

has faced criticism on social<br />

media platforms like Twitter<br />

and Facebook from some<br />

subscribers about data bundles<br />

getting used up quickly,<br />

does not download music<br />

and the firm not responding<br />

to their complaints.<br />

In May UCC said it<br />

would investigate MTN<br />

after criticism on social<br />

media about its mobile<br />

money policies. Mobile<br />

Money is a cell phoneborne<br />

service popular in<br />

Uganda and across East<br />

Africa that allows individuals<br />

to transmit cash<br />

between themselves and<br />

also quickly pay for goods<br />

and services.<br />

An extra headache for<br />

MTN and other telecoms<br />

in the country is also coming<br />

from a new tax measure<br />

on access to use of popular<br />

social media platforms like<br />

Facebook and WhatsApp<br />

which some analysts think<br />

will hurt growth in the sector.<br />

As part of the conditions<br />

of relinquishing part<br />

of MTN’s $5.2 billion fine,<br />

the company is expected to<br />

list on the Nigerian Stock<br />

Exchange. The Securities<br />

and Exchange Commission<br />

said recently it is awaiting the<br />

papers of MTN.<br />

According to the group’s<br />

financial results in 2017,<br />

MTN Uganda has a subscriber<br />

base of 10.7 million.<br />

It’s revenues for the year<br />

also surged by 10 percent to<br />

$356.34 million.<br />

Lifemate offers 55% discount on products<br />

in celebration of Eid El Mubarak<br />

MICHEAL ANI<br />

Nigeria’s leading furniture<br />

manufacturing<br />

company, Lifemate<br />

Furniture is<br />

offering 55 percent discounts<br />

on its products as part of activities<br />

to mark celebration of Eid<br />

El Mubarak. The Ileya promo<br />

which is promises to reward<br />

customers this celebration<br />

period, from range of products<br />

carefully designed to make life<br />

better for Nigerians.<br />

Derek Dai, managing director<br />

of Lifemate Nigeria<br />

Limited, while unveiling series<br />

of exciting packages to celebrate<br />

the Eid El Mubarak in<br />

Lagos said the company will<br />

continue to put the interest of<br />

the Nigerian people first as the<br />

company itself is a Nigerian<br />

company even though owned<br />

by Chinese investors.<br />

The furniture giant reiterated<br />

its commitment and<br />

determination to setting the<br />

pace in pushing for economic<br />

and social development in<br />

Nigeria through job creation<br />

and quality training to its staff<br />

across board.<br />

“We are relentlessly committed<br />

to unemployment<br />

reduction as we currently<br />

have over three thousand<br />

employees on our payroll”<br />

said Dai<br />

According to Dai, potentials<br />

of Nigeria are clear for the<br />

world to see. “The country is<br />

blessed with natural resources<br />

that aids production and we as<br />

a company will remain here<br />

contributing our quota to<br />

ensuring that Nigeria achieve<br />

her development and growth<br />

objectives” he concluded.<br />

The company in its culture<br />

of moving round major Nigerian<br />

cities for trade exhibitions<br />

is currently in Abeokuta, the<br />

Ogun state capital for trade<br />

exhibitions tagged “<strong>2018</strong> Lifemate<br />

Abeokuta Trade Fair”<br />

The exhibition took off 17th<br />

<strong>Aug</strong>ust and will run till 31st of<br />

<strong>Aug</strong>ust and as usual with trade<br />

exhibitions, all products on<br />

display comes with 50 percent<br />

discount during the fair.<br />

On his part, Midian Nanle<br />

the Ogun state chairman of<br />

union of civil engineering,<br />

construction, furniture and<br />

wood workers in Nigeria described<br />

Lifemate as a leader in<br />

the furniture space in Nigeria,<br />

offering quality office and<br />

home products that can stand<br />

the test of time.<br />

In the last 18 years the<br />

company since its entry into<br />

the Nigerian market has not<br />

looked back in driving innovation<br />

for the development<br />

and manufacturing of high<br />

quality home, office and<br />

outdoor furniture; sanitary<br />

wares; kitchen cabinets,<br />

massage chairs and other<br />

interior décor materials.<br />

Lifemate in line with its<br />

policy of easing access to its<br />

products has showrooms in<br />

Oregun, Lekki and Shoprite<br />

in Ikeja all in Lagos. Other<br />

showrooms are in Abuja, Port<br />

Harcourt, Ibadan and Warri.<br />

Use, payment for music royalties to be<br />

enforced in new copyright agreement<br />

Efforts to ensure that<br />

creative and talent<br />

is adequately<br />

rewarded in Nigeria’s<br />

music industry has<br />

received a boost with the<br />

reaching of a pact and signing<br />

a copyright contract for<br />

the exploitation of music in<br />

broadcasting and payment<br />

of royalties.<br />

The Broadcasting Organisations<br />

of Nigeria (BON)<br />

and the Musical Copyright<br />

Society Nigeria (MCSN), recently<br />

reached a pact and<br />

signed a copyright contract<br />

for the exploitation of music<br />

in broadcasting and payment<br />

of royalties.<br />

The contract was signed<br />

at a ceremony in Lagos between<br />

the managements of<br />

the MCSN led by its chairman,<br />

the legendary reggae<br />

Artiste, Pupa Orits Williki, and<br />

the chairman, BON Copyright<br />

Committee, Kenny<br />

Ogungbe, who stood in for<br />

BON chairman, John Momoh<br />

respectively.<br />

Ogungbe explained that<br />

by the agreement, BON has<br />

been granted what can be<br />

described as a blanket licence<br />

by MCSN for the use<br />

of music in broadcasting by<br />

its members.<br />

“BON as a law abiding<br />

organisation has signed this<br />

agreement today in fulfillment<br />

of the law regarding<br />

the use and payment of royalties<br />

for the exploitation<br />

of music on our platforms.<br />

And it is hoped that by this<br />

agreement,a glorious dawn<br />

is here for our musicians<br />

who have lived in penury for<br />

too long”.<br />

On his part, the chairman<br />

of MCSN, Orits Williki<br />

described the event as historic<br />

and declared that by the<br />

signing of the agreement the<br />

good times are here for musicians<br />

who have hitherto lived<br />

in penury.<br />

“I have always maintained<br />

that Nigerian musicians<br />

have no business with<br />

poverty if our copyrights<br />

are properly enforced. By<br />

this agreement,MCSN will<br />

ensure that all musicians<br />

are adequately rewarded<br />

for the exploitation of their<br />

w o r k s ”.<br />

The CEO, MCSN there<br />

invites all Musicians, including<br />

owners and managers<br />

of works as well as young,<br />

established and rising Artistes<br />

to join the Premier and<br />

Authentic copyright society<br />

with the largest Repertoire<br />

as it restructures to connect<br />

creativity with prosperity.


16<br />

BUSINESS DAY<br />

COMPANIES & MARKETS<br />

C002D5556<br />

Tuesday <strong>21</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

Nigerian Development Finance Institutions<br />

total assets up 36.8% to N1.3trn<br />

HOPE MOSES-ASHIKE<br />

The total assets<br />

of the even Development<br />

Finance<br />

Institutions<br />

(DFIs), including<br />

Development Bank of Nigeria<br />

(DBN) and the Nigeria<br />

Mortgage Refinancing Company<br />

(NMRC), increased<br />

significantly by 36.8 percent<br />

on a year-on-year basis, to<br />

N1.3 trillion at the end of<br />

December 2017.<br />

The other DFIs include<br />

Bank of Industry (BOI), the<br />

Federal Mortgage Bank of<br />

Nigeria (FMBN), Development<br />

Bank of Nigeria (DBN),<br />

the Nigerian Export-import<br />

Bank (NEXIM), the Bank of<br />

Agriculture (BOA), the Nigeria<br />

Mortgage Refinancing<br />

Company (NMRC) and The<br />

Infrastructure Bank (TIB).<br />

Analysis of the asset base<br />

by institutions indicated that<br />

the BOI accounted for 54.2<br />

percent of total assets, FMBN<br />

19.5 percent, the DBN 11.6<br />

percent, the NEXIM 5.6 percent,<br />

the BOA 5.3 percent,<br />

NMRC 3.2 percent, and TIB<br />

accounted for 0.6 per cent of<br />

total assets.<br />

Similarly, the paid-up<br />

capital of the sub-sector increased<br />

by 2.7 per cent (yearon-year),<br />

to N236.99 billion,<br />

at end-December 2017.<br />

The net loans and advances<br />

of the institutions also<br />

increased by <strong>21</strong>.3 percent to<br />

N693.75 billion in 2017, above<br />

N571.85 billion in 2016. The<br />

proportion of the industry net<br />

loans and advances, attributed<br />

to each institution, were:<br />

BOI, 73.3 percent; FMBN, 19.3<br />

percent; NEXIM, 5.6 percent;<br />

NMRC, 1.1 percent; BOA, 0.6<br />

percent; TIB, 0.1 percent; and<br />

DBN, 0.03 percent. The shareholders’<br />

fund increased to<br />

N247.31 billion in 2017, from<br />

N205.35 billion in 2016 due,<br />

mainly, to the consolidation<br />

of the financial data of the<br />

NMRC and the DBN.<br />

The draft annual report<br />

of the Central Bank of Nigeria<br />

(CBN) noted that the<br />

3rd Bi-annual Consultative<br />

Forum for the stakeholders<br />

of the Development Finance<br />

Institutions was held in Abuja<br />

in 2017.<br />

The Forum identified<br />

weak corporate governance,<br />

poor risk management and<br />

inadequate capital as major<br />

challenges confronting the<br />

sub-sector. The Forum recommended<br />

policy options<br />

to address the challenges,<br />

enjoined stakeholders to<br />

guard against mission drift<br />

and reiterated the need for<br />

them to pay-up outstanding<br />

equity contribution.<br />

The report disclosed that<br />

the total assets of the Nigeria<br />

Mortgage Refinance Company<br />

(NMRC) stood at N42.26<br />

billion at end-December<br />

2017, compared with N41.57<br />

billion at end-December<br />

2016. Similarly, refinanced<br />

mortgages increased by<br />

N0.15billion to N8.15 billion<br />

in 2017, above N8.0 billion in<br />

2016, reflecting the creation<br />

of additional mortgages.<br />

The adjusted capital of<br />

N9.693 billion was higher<br />

than the minimum capital<br />

requirement of N5.0 billion<br />

for the Company. Similarly,<br />

the capital adequacy ratio<br />

and adjusted capital to net<br />

credit were 139.83 and 1:1.84<br />

at the end of December 2017<br />

and complied with the regulatory<br />

minimum and maximum<br />

of 10 per cent and 1:10,<br />

respectively.<br />

Darling Nigeria street Catwalk across various locations in Lagos showing their new innovative range of hair products.<br />

Air Peace will unite Nigeria with flight operations - Onyema<br />

IFEOMA OKEKE<br />

Air Peace, one of Nigeria’s<br />

leading carriers,<br />

says it’s embarking on<br />

massive expansion of<br />

its domestic flight operations to<br />

close the gap in air travel across<br />

Nigeria and also build bridges of<br />

unity in Nigeria.<br />

Allen Onyema, chairman/<br />

chief executive officer of Air<br />

Peace made the remark in Kaduna<br />

in an address to mark the<br />

commencement of Air Peace’s<br />

daily flights from the Murtala<br />

Muhammed Airport, Lagos to<br />

the Kaduna International Airport.<br />

The launch of the airline’s<br />

Lagos-Kaduna service came<br />

exactly a week after the carrier<br />

started scheduled flights from Lagos,<br />

Abuja and Accra to Roberts<br />

International Airport, Monrovia,<br />

Liberia.<br />

Onyema, who was represented<br />

by Chris Iwarah, corporate<br />

communications manager,<br />

Air Peace described the launch<br />

of the carrier’s Lagos-Kaduna<br />

service as a “significant milestone<br />

in our vision to unite our<br />

dear country, Nigeria through<br />

air travel and lift the nation’s<br />

economy through trade facilitation<br />

and massive job creation.”<br />

He said the airline, which also<br />

launched its daily flights to Kano<br />

and Yola on February 12 and 15,<br />

<strong>2018</strong> respectively, was working<br />

on setting up mini-hubs across<br />

Nigeria and the West Coast of<br />

Africa to strategically fix the challenges<br />

of air travel.<br />

“Our plan”, he said, “is to<br />

massively expand our operations<br />

from our base in Lagos<br />

into mini-hubs across all regions<br />

of Nigeria and the West<br />

Coast of Africa. We assure you<br />

that the North of Nigeria will be<br />

one of the biggest beneficiaries<br />

of the massive expansion of<br />

our route network and fleet<br />

capacity. Since the first quarter<br />

of <strong>2018</strong>, we have begun to take<br />

delivery of the six 50-seater Embraer<br />

145 aircraft we recently<br />

acquired to serve cities with air<br />

transport difficulties under our<br />

subsidiary Air Peace Hopper.<br />

“There is no doubt that as<br />

the leading and biggest airline<br />

in Nigeria with a fleet size of 24<br />

aircraft, we are now more positioned<br />

to transform air travel<br />

experience in Nigeria, the West<br />

Coast of Africa and beyond.<br />

But more importantly, we are<br />

proud to use our flight services<br />

to build bridges of unity in Nigeria.<br />

We are not just achieving<br />

this by extending our flight op-<br />

erations across Nigeria without<br />

restriction, we also are doing so<br />

with our employment policy<br />

that does not discriminate on<br />

the grounds of religion, tribe<br />

and creed.”<br />

Onyema assured air travelers<br />

on the Lagos-Kaduna route of<br />

efficient, on-time and safe flight<br />

operations.<br />

“We are coming into the Kaduna<br />

route with a reputation for<br />

on-time performance and uncompromising<br />

stand on matters<br />

of safety. We promise to leverage<br />

the experience of our skilled staff<br />

and excellent business model to<br />

end the challenges of air travel on<br />

the Kaduna route and make Kaduna<br />

more accessible to leisure<br />

and business travellers,” he said.<br />

On his part, Shehu Idris, the<br />

emir of Zazzau, praised Air Peace<br />

for commencing flight operations<br />

to Kaduna.<br />

FBNQuest Merchant<br />

Bank assigned “A”<br />

rating by Agusto & Co<br />

MICHEAL ANI<br />

FBNQuest Merchant<br />

Bank, the investment<br />

banking and<br />

asset management<br />

subsidiary of FBN<br />

Holdings Plc has been assigned<br />

‘A’ rating by Agusto &<br />

Co. Limited, according to a<br />

statement published Friday,<br />

on the website of the rating<br />

agency.<br />

The rating agency said the<br />

rating reflects the bank’s affiliation<br />

with FBN Holdings,<br />

the non–operating holding<br />

company of one of the largest<br />

banking and financial services<br />

organisations in Africa with an<br />

asset base of N5.2 trillion(N15.7<br />

billion @ 358;331/$) as at 31<br />

December 2017.<br />

The bank was ranked first<br />

on local currency deposits of<br />

the five merchant banks operating<br />

in Nigeria as at FYE2017,<br />

but ranked fourth by total<br />

assets and contingents due<br />

to its experienced and stable<br />

management team which<br />

provides oversight of its daily<br />

operations.<br />

The rating recognises FB-<br />

NQuest MB’s good capitalisation<br />

and good profitability<br />

during the period, supported<br />

by its acceptable asset quality,<br />

investment banking expertise<br />

and trading activities.<br />

“Nonetheless, FBNQuest<br />

MB’s rating is constrained<br />

by concentration in its loan<br />

portfolio which renders it<br />

vulnerable to adverse changes<br />

in the performance of its lending<br />

sectors and obligors. The<br />

opinions expressed in this<br />

rating release do not represent<br />

investment or other advice<br />

and should therefore not<br />

be construed as such.” The<br />

rating agency said in a press<br />

statement.<br />

Agusto & Co is Nigeria’s<br />

first Credit Rating Agency and<br />

a Pan African leader in credit<br />

ratings and credit reports.<br />

It has assigned well over<br />

1,500 ratings across various<br />

sectors. Our ratings are globally<br />

accepted, and a wide client<br />

base utilizes our ratings as<br />

benchmark for business.<br />

FBNQuest Merchant Bank<br />

recently acted as Lead Financial<br />

Adviser & Issuing House<br />

on the Listing by Introduction<br />

of the entire issued and paidup<br />

ordinary shares of Notore<br />

Chemical Industries Plc on<br />

the Main Board of the Nigerian<br />

Stock Exchange (NSE).<br />

The transaction added to<br />

FBNQuest Merchant Bank’s<br />

impressive portfolio of clients<br />

it had supported. It also highlights<br />

its capabilities in the successful<br />

execution of sizeable<br />

capital market and commercial<br />

debt transactions. Kayode<br />

Akinkugbe, Managing Director<br />

of FBNQuest Merchant Bank<br />

said: “We are proud of the<br />

instrumental role FBNQuest<br />

Merchant Bank played in this<br />

transaction, and appreciate<br />

the trust Notore placed in us<br />

to assist them. Our clients<br />

remain our priority, and we<br />

strongly believe their success<br />

is our success.<br />

Lagos Digital Academy commits to<br />

empowering business professionals<br />

HOPE MOSES-ASHIKE<br />

The Lagos Digital Academy<br />

has launched a<br />

wide range of intensive<br />

and immersive digital<br />

marketing courses that empowers<br />

business professionals<br />

to make their products and<br />

services acceptable to potential<br />

consumers.<br />

Lagos Digital Academy is a<br />

social enterprise that is strongly<br />

committed to teaching and<br />

inspiring a new generation of<br />

digital professionals and entrepreneurs.<br />

Dotun Babatunde, founder/<br />

managing director, said digital<br />

marketing was key to the success<br />

of any organisation. He admitted<br />

that the emergence of the<br />

mobile phone in the Nigerian<br />

market had changed the ways<br />

and patterns of doing business.<br />

“How best can you reach<br />

your customers? No other platform<br />

can give you that direct<br />

personal access to consumers<br />

like the mobile phone. We have<br />

over 180 million Nigerians and<br />

averagely, people hold two to<br />

three network lines. In order to<br />

reach your consumers today,<br />

you have to be able to communicate<br />

with them on one-on-one<br />

basis,” Babatunde said.<br />

At the Lagos Digital Academy,<br />

participants are taught,<br />

guided and certifies by experienced<br />

practitioners from the<br />

digital marketing industry.<br />

Kunle Shittu, chief marketing<br />

officer, said training in digital<br />

marketing will lead to business<br />

growth, boost economic growth<br />

and enhance job creation.<br />

“We will be organising a free<br />

boot camp for Babcock University,<br />

University of Lagos and University<br />

of Ibadan. For us, we will<br />

not be charging them any fee; it<br />

is our own giving back initiative.<br />

They will make the necessary<br />

provision and we will take the<br />

training to their doorsteps. We<br />

will not rest until we have toured<br />

every university and polytechnic<br />

in Nigeria”, Shittu said.


Tuesday <strong>21</strong> <strong>Aug</strong>ust <strong>2018</strong> C002D5556 BUSINESS DAY 17


18 BUSINESS DAY C002D5556 Tuesday <strong>21</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

Harvard<br />

Business<br />

Review<br />

Tips<br />

&<br />

Talking Points<br />

TALKING POINTS<br />

Shopping Spree<br />

$20 billion: In the past year, China’s<br />

retail giant Alibaba and internet giant<br />

Tencent have invested more than a<br />

combined $20 billion to change the<br />

country’s consumer shopping habits.<br />

+<br />

A Digital Transformation<br />

Two-thirds: Nearly a decade ago,<br />

Xerox had begun heavily investing<br />

in new products and services for<br />

the digital age. By the end of 2011,<br />

two-thirds of the company’s revenues<br />

came from recent innovations.<br />

+<br />

Personal Development<br />

$11 billion: The thriving U.S. self-help<br />

industry is valued at an estimated<br />

$11 billion.<br />

+<br />

Women’s Worth<br />

$1.6 trillion: A study conducted by<br />

S&P Global reported that the American<br />

economy would be $1.6 trillion<br />

larger than it is today if female participation<br />

in the workforce had grown<br />

at the same pace as other advanced<br />

countries like Norway.<br />

+<br />

Looking Inward<br />

10%: Although 95% of people consider<br />

themselves self-aware, only 10%<br />

to 15% actually are, according to<br />

research from author Tasha Eurich.<br />

Does your team’s work style inconvenience remote employees?<br />

Life on a global team isn’t necessarily equitable.<br />

Employees far from headquarters<br />

often have less access to the team leader,<br />

and have to deal with regular inconveniences<br />

such as late night calls because they’re in a different<br />

time zone. As a manager, it’s your job to<br />

ensure that remote employees aren’t carrying<br />

an extra burden. Consider rotating the time of<br />

weekly team calls so that everyone takes a turn at<br />

having the meeting during regular business hours<br />

(or at the very least, find the least inconvenient<br />

time for your remote employees to participate.)<br />

Even small courtesies can help distant team members<br />

feel noticed, such as translating meeting times into all<br />

the time zones that your people work in. And schedule<br />

periodic off-sites for the whole team to get together and<br />

connect. If your budget allows, you can even hold these<br />

meetings in different locations around the globe.<br />

(Adapted from “How to Keep a Global Team Engaged,”<br />

by Andy Molinksy.)<br />

Solve Complex<br />

Problems by<br />

Expanding Your<br />

Thinking<br />

Too many leaders approach<br />

complex problems with eitheror<br />

thinking: The answer is right<br />

or wrong, good or bad, win or lose.<br />

To cultivate a nuanced perspective,<br />

challenge your understanding of the<br />

problem. Ask yourself, “What am I not<br />

seeing here?” and “What else might<br />

be true?” Don’t seek out answers that<br />

just confirm what you already know.<br />

It’s also helpful to tackle this kind of<br />

challenge first thing in the morning,<br />

when your mind is fresh. Spend at<br />

least an hour on it without interruption.<br />

The dedicated time ensures that<br />

you give a complex issue the attention<br />

it needs — attention that might<br />

otherwise be consumed by less intellectually<br />

demanding tasks. And as<br />

you work, pay attention to how you’re<br />

feeling. Embracing complexity is an<br />

emotional challenge in addition to a<br />

cognitive one. You’ll need to manage<br />

tough emotions like fear and anger<br />

and get yourself out of flight-or-fight<br />

mode so that you can think more<br />

expansively.<br />

(Adapted from “What It Takes to<br />

Think Deeply About Complex Problems,”<br />

by Tony Schwartz.)<br />

Set boundaries when collaborating with a perfectionist Read the room before your next meeting Instead of complaining about a colleague, talk to them<br />

It can be exhausting<br />

to work with<br />

perfectionists.<br />

Their unrelenting<br />

standards can lead<br />

to unnecessary<br />

stress, conflict and<br />

missed deadlines.<br />

So how do you collaborate<br />

productively<br />

with them? To start,<br />

don’t internalize their expectations.<br />

Perfectionists<br />

tend to equate time with<br />

quality, so when you think<br />

a project is good enough to<br />

be considered done, you’ll<br />

need to be thoughtful and<br />

diplomatic in explaining<br />

why. Talk about the<br />

benefits of spending time<br />

on other tasks instead of<br />

getting every detail right<br />

on this one. You should<br />

also set boundaries so that<br />

your colleague’s nitpicking<br />

doesn’t interfere with your<br />

progress. For example, if<br />

the person sends you a lot<br />

of emails, each with a different<br />

question or suggestion,<br />

you might decide to<br />

respond once per day, but<br />

that’s it. And finally, focus<br />

on building your working<br />

relationship. Having<br />

a strong relationship will<br />

assuage your colleague’s<br />

anxiety, which is often the<br />

root cause of perfectionism.<br />

(Adapted from “How to Collaborate<br />

With a Perfectionist,”<br />

by Alice Boyes.)<br />

c<br />

In every conversation<br />

at work,<br />

there’s the explicit<br />

discussion (the<br />

words being spoken<br />

out loud) and the<br />

tacit one — the<br />

things being communicated<br />

subtly.<br />

It’s important to know<br />

how to read a room so<br />

that you can understand<br />

what’s not being said.<br />

The best way to do this<br />

is to pay attention to the<br />

people in it. Note who’s<br />

next to whom, who’s relaxed,<br />

who’s not, who’s<br />

standing and who’s sitting.<br />

Look at their facial<br />

expressions, posture and<br />

body language. Does the<br />

mood in the room feel<br />

tense or relaxed? Then<br />

think about possible reasons<br />

for your colleagues’<br />

emotional states. What’s<br />

happening in their lives and<br />

jobs? This can be tricky if<br />

you don’t know the people<br />

in the room, but you can still<br />

come up with hypotheses.<br />

Then check those hypotheses<br />

by talking to colleagues in<br />

private. You might say something<br />

like, “In the meeting I<br />

saw you furrow your brow<br />

when discussion turned to<br />

the big project. How do you<br />

feel about it?”<br />

(Adapted from “Tips for<br />

Reading the Room Before a<br />

Meeting or Presentation,” by<br />

Rebecca Knight.)<br />

Let’s be honest:<br />

Sometimes<br />

complaining<br />

about a<br />

co-worker feels<br />

good. But although<br />

it helps you release<br />

pent-up emotions,<br />

venting is a sideways<br />

move. In<br />

other words, we<br />

usually complain<br />

to a friend or col-<br />

league — and we rarely confront the<br />

person we’re complaining about. So<br />

the next time you want to complain,<br />

try taking it to the source of the<br />

problem. For example, let’s say a<br />

co-worker yells in a meeting. Your<br />

first instinct might be to complain to<br />

another colleague about their brash<br />

behavior. Instead, take some time<br />

to calm down. Think about exactly<br />

what bothered you and what you<br />

want to complain about (it’s not<br />

OK to yell and disrespect others in<br />

2017 Harvard Business School Publishing Corp. Distributed by The New York Times Syndicate<br />

a meeting). Decide what you can<br />

do to shift the person’s behavior<br />

or improve the situation (perhaps<br />

saying, “Please don’t shout in meetings<br />

— let’s respect each other in our<br />

conversations”). And then follow<br />

through by speaking to the person<br />

directly.<br />

(Adapted from “The Next Time You<br />

Want to Complain at Work, Do This<br />

Instead,” by Peter Bregman.)<br />

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travelling abroad<br />

for vacation<br />

or studying abroad?<br />

We have you covered through CBN’s special<br />

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FirstBankofNigeria @FirstBankngr Firstbankngr FirstBankofNigeriaLtd @firstbanknigeria +FirstBankNigeria


Tuesday <strong>21</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

BUSINESS DAY 19<br />

BD<br />

TECH<br />

In association with<br />

IBM introduces AI-powered solution in Nigeria<br />

...Descassio deploys for employee productivity<br />

Stories by<br />

JUMOKE AKIYODE-LAWANSON<br />

IBM, one of the world’s leading<br />

technology companies,<br />

has made available its Watson<br />

Workspace, artificial<br />

intelligence (AI) powered<br />

solution that helps improve work<br />

productivity in Nigeria.<br />

The messaging application<br />

which is newly introduced in the<br />

country is said to substantially<br />

improve workplace efficiency<br />

through its integrated employee<br />

collaboration capabilities, such<br />

as enabling users to hold group<br />

conversations and share data files,<br />

can now be used by companies in<br />

Nigeria.<br />

Through its built-in artificial<br />

intelligence (AI) capabilities, the<br />

solution enables sales and technical<br />

teams to create workspaces<br />

where they can collaborate on all<br />

sales activities. Watson Workspace<br />

also enables companies to significantly<br />

reduce the time group<br />

members spend reading through<br />

conversations to obtain information<br />

relevant to them.<br />

Descasio, a leading cloud services<br />

provider in West Africa, has<br />

adopted IBM Watson Workspace<br />

to enhance its existing email services<br />

and provide a smart employee<br />

collaborating tool on desktop<br />

and mobile devices. The company<br />

was looking for an application that<br />

could enable smarter and seamless<br />

communication, helping their<br />

teams to focus on the strategic aspects<br />

of their business.<br />

”One of the things that really<br />

excites us about this platform is<br />

the ease with which we can build<br />

new solutions using APIs. We are<br />

now thinking about ways we can<br />

use IBM Watson APIs to create<br />

value-added solutions such as virtual<br />

assistants, which could help<br />

to automate repetitive tasks,” says<br />

Dele Nedd, Co-Founder and CEO,<br />

Descasio.<br />

“As a new reseller of the IBM’s<br />

Watson Workspace Essentials in<br />

West Africa, Descasio plans to<br />

sign on clients for this solution.<br />

To achieve this, the company is<br />

working with a team from IBM to<br />

integrate IBM Watson Workspace<br />

Microsoft launches app for secure group communication, staff management in Nigeria<br />

Microsoft has made<br />

available in Nigeria,<br />

a mobile application<br />

designed for large<br />

group communication, workflow<br />

management, reporting and analytics,<br />

integrated with Office 365,<br />

called ‘Kaizala Pro’.<br />

The app aims to improve the<br />

way businesses communicate and<br />

collaborate, as workers can interact<br />

whilst on the field, by sending<br />

messages, photos, video files, audio<br />

files, documents, polls, surveys, and<br />

other data which is protected by<br />

encryption in-transit through the<br />

mobile app.<br />

Akin Banuso, country general<br />

manager, Microsoft Nigeria, says<br />

the app addresses several challenges<br />

faced by many businesses across<br />

the country who manage field staff<br />

remotely.<br />

“Mobile technology is enabling<br />

businesses to embrace the fourth<br />

industrial revolution and digitally<br />

transform their operations. Microsoft<br />

Kaizala is ideal for organisations<br />

that need to communicate with<br />

large numbers of task workers to<br />

enhance business agility, collaboration,<br />

and organisational productivity,”<br />

Banuso says.<br />

Unlike other chat-based apps in<br />

the market, Kaizala extends beyond<br />

a mere communication function.<br />

Because many workers in the region<br />

often don’t have an email address,<br />

Kaizala only requires a mobile number<br />

to sign a user up. The appis also<br />

optimised to work on any network –<br />

including slow 2G networks.<br />

Kaizala provides actionable information<br />

through analytics and<br />

reports, while complying with industry<br />

security best practices. Managers<br />

can decide who has access<br />

to company data. All Kaizala data<br />

is stored in Microsoft Azure data<br />

centres,which adhere to industry<br />

standard security and compliance<br />

certifications.<br />

“This means only you and the<br />

people with whom you are communicating<br />

can see what you have sent<br />

them,” says Akin. “Microsoft Kaizala<br />

is currently Tier-A compliant and<br />

our engineers do not have access to<br />

any customer data.”<br />

“As we roll out Microsoft Kaizala<br />

in Nigeria, we hope to connect the<br />

complete value chain, including<br />

the unconnected parts of organisations.<br />

Microsoft’s vision for Kaizala<br />

is to empower every organisation<br />

and community to achieve more<br />

through purposeful chat,” Banuso<br />

adds.<br />

Some of Kaizala’s other unique<br />

features include the ability to communicate<br />

with and manage an<br />

unlimited number of users. This<br />

includes employees, front-line<br />

workers, customers, suppliers and<br />

citizens. Organisations can create<br />

flat,hierarchical or discoverable<br />

public groups in minutes from contact<br />

lists, directories or ad hoc sharing.<br />

For users in remote areas, the<br />

app is optimised to work on slow<br />

into its cloud services portfolio—<br />

enabling it to deliver the solution<br />

as a service to clients across the<br />

region” he adds<br />

Watson Workspace helps companies<br />

turn conversations into<br />

actionable insights, summarised<br />

information, prioritise next best<br />

actions and make recommendations<br />

enabling its employees to<br />

connect and collaborate with their<br />

teams and other work groups on<br />

any device. For example, the solution<br />

has enabled teams save up to<br />

30 minutes per team member on<br />

responding to issues relevant to<br />

their role. It also provides a full,<br />

searchable history of all conversations<br />

and one central place for all<br />

shared images and resources.<br />

“Organisations have seen a<br />

proliferation of tools and applications<br />

that employees use to get<br />

their jobs done at the workplace<br />

which has often caused information<br />

overload, interruptions and<br />

difficulty getting back into the<br />

flow of productivity. What IBM<br />

Watson Workspace does, is take<br />

away these pressures, allowing<br />

employees to focus on the activities<br />

that really matter,” says Dipo<br />

Faulkner, the Country General<br />

Manager of IBM Nigeria.<br />

2G networks and users don’t need<br />

an email address to sign up, only a<br />

mobile number.<br />

The app is also able to broadcast<br />

and collect information in a structured<br />

way through action cards. This<br />

includes sharing announcements -<br />

photos, videos or documents; hosting<br />

polls or surveys; assigning tasks;<br />

providing training content; marking<br />

attendance; and tracking workforces<br />

using location tracking.<br />

In addition, organisations are<br />

able to gather rich insights from<br />

data with built-in analytics. Organisations<br />

can view results in realtime,<br />

organise large amounts of information<br />

with an aggregated view<br />

of user responses and get reports at<br />

each level of the organisation.


20<br />

BUSINESS DAY<br />

BDTECH<br />

E-mail: jumoke.akiyode@businessdayonline.com<br />

Could a tech-enabled GIG economy unlock<br />

solutions to Nigeria’s employment deficit?<br />

BINA IDONIJE Guest writer<br />

18.8%. That is the<br />

official unemployment<br />

rate in Nigeria<br />

as of 2017 according<br />

to the National<br />

Bureau of Statistics. Anecdotal<br />

data off the street have<br />

long contested the accuracy<br />

and methodology of deriving<br />

the country’s unemployment<br />

numbers. Be that as it may,<br />

what cannot be contested<br />

is the fact that unemployment<br />

and underemployment<br />

contribute massively to the<br />

country’s socio-economic<br />

challenges.<br />

Across the world, a<br />

new type of labour force is<br />

emerging. They are termed<br />

“gig workers”; a derivative<br />

categorization for persons<br />

who make a living from the<br />

“gig economy” ecosystem.<br />

At a macro level, the gig<br />

economy, refers to work carried<br />

out outside the ambit<br />

of what is considered traditional<br />

employment, i.e. the<br />

equivalent of an 8- 5 job in<br />

Nigeria. It is mainly characterized<br />

by the following key<br />

attributes: i) short- term economic<br />

arrangement between<br />

the worker and the client;<br />

ii) Compensation is tied to<br />

specific tasks or projects, as<br />

opposed to a regular salary,<br />

and; iii) significant autonomy<br />

on the part of the worker.<br />

Taking these characteristics<br />

into consideration, it would<br />

seem disingenuous to postulate<br />

that this is an emerging<br />

labour force, as indeed,<br />

these characteristics are<br />

reflective of how work has<br />

been carried out in the informal<br />

labour sector since time<br />

immemorial. So, you may<br />

ask, what then is all this fuss<br />

The federal government<br />

has urged<br />

youths to leverage<br />

the knowledge of<br />

Information Communication<br />

Technology (ICT), to<br />

become employers of labour,<br />

so as to help tackle<br />

the issue of unemployment<br />

in the country.<br />

This call was made in Ile<br />

Ife, Osun state by the the<br />

Permanent Secretary, Federal<br />

Ministry of Labour and<br />

Productivity, Ibukun Odusote,<br />

while declaring open<br />

3rd Ife Youth Economic<br />

Summit and handover ceremony<br />

of Ife Digital Job<br />

L-R: Chioma Iwuchukwu-Nweke, general manager, Personal Health, Philips West Africa; Nicole Dix,<br />

business marketing manager (Kitchen Appliance Africa), Philips Personal Health; Nneka Agbata, Philips<br />

marketing officer, Personal Health West Africa and Justin Ugboro, partner account manager, Philips<br />

Personal Health, at the Philips <strong>2018</strong> Resellers event held in Lagos recently<br />

about a workforce which already<br />

existed prior to being<br />

attributed a fancy name like<br />

“gig work force”?<br />

The game-changing factor<br />

is Technology.<br />

Digital platforms are creating<br />

online marketplaces<br />

that efficiently connect providers<br />

of services with buyers<br />

of those services, in ways<br />

that have the potential to<br />

exponentially propel economies.<br />

McKinseyestimates<br />

that online talent platforms<br />

could improve global GDP<br />

by 2% by the year 2025, or<br />

put financially, add $2.7 trillion<br />

to global GDP. Global<br />

platforms that are already<br />

proving the ‘hype’ about the<br />

gig economy include: Uber,<br />

Deliveroo, Upwork, Task-<br />

Rabbit and Catalant. These<br />

platforms provide services<br />

ranging from transport, to<br />

food delivery, to profes-<br />

Nigerian youths urged to create jobs from ICT<br />

... As FG hands over Ife digital job centre to Ooni<br />

BOLADALE BAMIGBOLA, Osogbo<br />

sional services. Pretty much<br />

anyone can sign up to render<br />

their services, determine<br />

their own working hours,<br />

and earn money while being<br />

their own boss.<br />

Here in Africa, there are<br />

digital market places such<br />

as South Africa’s getTOD (an<br />

innovative mobile application<br />

offering on-demand<br />

services for electricians,<br />

plumbers, handy-men, tied<br />

to the clients locality); Kenya’s<br />

Mr. Green Africa (a<br />

waste recycling venture that<br />

leverages technology to empower<br />

waste pickers to earn<br />

a living); and Nigeria’s Jumia<br />

J-Force (independent sales<br />

consultants and logistics officials<br />

who help to bridge the<br />

internet access and e-commerce<br />

gap by bringing the<br />

online shopping experience<br />

offline to those without access).<br />

The ubiquity of mobile<br />

Centre constructed by the<br />

Federal Government.<br />

Speaking at the event<br />

with the theme: “Youth Unemployment<br />

and the Challenges<br />

of Enabling Empowerment<br />

-The way forward<br />

for Nigeria”, held in Oba<br />

Okunade Sijuwade Memorial<br />

Hall, Enuwa, Ile-Ife,<br />

Odusote enjoined the participants<br />

at the summit to<br />

tap into the golden opportunity<br />

that the ICT training<br />

offers them to become entrepreneurs.<br />

She disclosed that the<br />

administration of President<br />

Muhammadu Buhari would<br />

continue to support innovation<br />

and technology, stressing<br />

that the priority encouragement<br />

the administration<br />

is giving to Science, Technology,<br />

Engineering and<br />

Mathematics is aimed at using<br />

technology to stimulate<br />

the economy.<br />

Assuring the youth of<br />

the federal government’s<br />

preparedness to give them<br />

social protection, she described<br />

those ones among<br />

them following politicians<br />

as thugs as “compound<br />

fool”, adding that government<br />

would also ameliorate<br />

the sufferings of the<br />

unemployed youth by creating<br />

more jobs.<br />

Odusote then charged<br />

the trainers on the need<br />

devices amongst Nigerians<br />

makes technology-enabled<br />

marketplaces an even more<br />

attractive venture. Picture<br />

a courier delivery services<br />

platform, where freelancers<br />

can sign up to deliver packages<br />

around their neighborhood<br />

on the back of their own<br />

transportation arrangements<br />

and get paid a portion of the<br />

delivery fees. Such a service<br />

will likely provide cheaper<br />

rates and faster delivery times<br />

as compared to traditional<br />

courier, given the factors of<br />

scale and proximity.<br />

Imagine a platform that<br />

provides you as a client with<br />

a repository of artisans such<br />

as painters and carpenters<br />

in your vicinity, gives you an<br />

upfront view of their potential<br />

fees, and shows how well<br />

or poorly other users of their<br />

services have rated them, to<br />

assist you in making an informed<br />

choice. Imagine also,<br />

to teach the youths how to<br />

market their products online.<br />

She further disclosed<br />

that government and its<br />

agencies would purchase<br />

products of Ife ICT to encourage<br />

the participants.<br />

In his remarks, Ooni<br />

of Ife, Oba Enitan Ogunwusi,<br />

charged youths in<br />

the country to focus on<br />

the new trends of technology,<br />

adding that everybody<br />

looks onto them for a better<br />

future for the country.<br />

The monarch reminded<br />

the participants that the<br />

era of total reliance on<br />

government is gone, and<br />

opined that, with focus and<br />

resolve to be employers of<br />

the improved reach such a<br />

digital marketplace would<br />

afford those artisans, who,<br />

today, mostly rely on word<br />

of mouth of their relatively<br />

small circles, to get ‘gigs’.<br />

Think of this arrangement<br />

as the “organized informal<br />

sector”.<br />

In the midst of this optimism,<br />

one must reckon that<br />

for the average Nigerian, internet<br />

access remains a significant<br />

hurdle to meaningfully<br />

participate in a digital<br />

marketplace, and for startups,<br />

the incessant malaise<br />

of insufficient broadband<br />

persists. Nigerian digital<br />

platforms may want to consider<br />

the opportunities that<br />

lurk in leveraging sms/text<br />

messaging as an alternative<br />

tool in cognisance of the<br />

aforementioned connectivity<br />

constraints. Laudable<br />

contributions from the likes<br />

of Google Nigeria in looking<br />

to provide access to free wifi<br />

connection in over 200 locations<br />

in the country are welcome<br />

developments in this<br />

regards.<br />

The Gig economy, even<br />

in advanced countries, is<br />

still at nascent stages. Researchers<br />

and Scholars<br />

predict that the forthcoming<br />

decades will see the<br />

gig economy take a more<br />

dominant spot in global labour<br />

markets. The informal<br />

labour sector in Nigeria is<br />

overflowing with untapped<br />

opportunities to create a cohesive<br />

digital marketplace<br />

for artisans, masons, hair<br />

braiders, makeup artists and<br />

the likes.<br />

Bina Idonije is GE’s legal<br />

counsel responsible for the<br />

full spectrum of Labour &<br />

Employment matters in Sub-<br />

Sahara Africa.<br />

labour by the vast youthful<br />

populace Nigeria has, the<br />

challenge of unemployment<br />

could be effectively<br />

contained.<br />

In his goodwill address,<br />

the Director General/CEO,<br />

NITDA, Isa Ali Ibrahim<br />

Pantami, established link<br />

between ICT and employment,<br />

saying the success<br />

story of the Asian Tigers<br />

could be traced to revolutionary<br />

development in ICT.<br />

He added that acquisition<br />

of ICT skills has become<br />

a global requirement<br />

in employer-employee relations,<br />

while the growth<br />

and stability of the Nigerian<br />

economy is dependent<br />

Tuesday <strong>21</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

Patricia launches<br />

innovative<br />

e-commerce service<br />

JUMOKE AKIYODE-<br />

LAWANSON<br />

Patricia.com.ng,<br />

an information<br />

and communications<br />

technology<br />

firm has introduced a new<br />

e-commerce solution into<br />

the Nigerian market.<br />

The innovative service<br />

allows individuals to<br />

swap gift cards for cash<br />

while also giving them the<br />

opportunity to send gift<br />

items to loved ones in the<br />

United Kingdom, United<br />

States of America,Canada<br />

and some selected African<br />

and European countries.<br />

The ICT Company,<br />

which recently opened<br />

Room 19, an online luxury<br />

clothing store, has been<br />

described by industry<br />

watchers as one of the<br />

fastest growing e-commerce<br />

firms in Nigeria<br />

and Africa.<br />

Speaking at the launch<br />

of the new service in Lagos,<br />

Hanu Agbodje, CEO/<br />

founder of Patricia, said<br />

the company would continue<br />

to do things differently,<br />

question the norms,<br />

come up with innovations<br />

tailored to make life easier<br />

for Nigerians through<br />

technology.<br />

“At Patricia, we work to<br />

change the world because<br />

if we are to succeed, we<br />

have to change how online<br />

businesses are perceived<br />

in Nigeria. Simply<br />

put, our vision is to make<br />

the e-commerce systemsafe<br />

for all; to offer peace<br />

of mind to people who do<br />

business with Patricia”,<br />

Agbodje assured.<br />

on the employment of the<br />

youths.<br />

He advised participants<br />

in the training to realize<br />

that digital connectivity<br />

would expose them to opportunities<br />

in the global<br />

economy and urged them<br />

to tap into it.<br />

Earlier, in his welcome<br />

address, the Special Assistant<br />

to Ooni Ogunwusi on<br />

Youth Development and<br />

Wealth Creation, Olamide<br />

Awosunle disclosed that<br />

this year’s 6 weeks ICT training<br />

would afford 100 youth<br />

selected across the state to<br />

acquire ICT and business<br />

skills that will make them<br />

globally competitive.


Tuesday <strong>21</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

BUSINESS DAY <strong>21</strong><br />

EDUCATION<br />

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

Why science, technology education must<br />

drive much needed economy growth<br />

KELECHI EWUZIE<br />

The advancement<br />

in science and<br />

technology education<br />

across the<br />

globe has no doubt<br />

thrown up a lot of opportunities<br />

for forward looking<br />

economies to grow their human<br />

capital.<br />

It is quite obvious that<br />

without science and technology<br />

education, no country will<br />

forge ahead with advancement<br />

in innovations and state<br />

of the act discoveries that is<br />

shaping the future of virtually<br />

every sector of the economy.<br />

It is also true that the quality<br />

of science tech education a<br />

country has determines her<br />

economy as no country can<br />

grow more than the quality<br />

of her specialised education<br />

system.<br />

Education today more importantly<br />

as it relates to science<br />

and technology has assumed<br />

an entirely new frontier<br />

and approach, such that from<br />

an early stage of learning, it<br />

has become a norm to tutor<br />

next generation of leaders to<br />

embrace this <strong>21</strong> century learning<br />

style.<br />

While managers of the economy<br />

in Nigeria may claim to<br />

be funding development of<br />

education in the country, it is<br />

however important to note that<br />

building capacity in science<br />

and technology represents the<br />

driving forces in the current<br />

<strong>21</strong>st century and a such needs<br />

to be catered for.<br />

For meaningful development<br />

to take place in the economy,<br />

those who know in the<br />

field of education insist the<br />

issue of funding this specialised<br />

form of learning need to<br />

adequately taken care of by<br />

government.<br />

They observe that science<br />

and technology aspect of education<br />

has a repository of potentials<br />

capable of transforming<br />

economies and has been<br />

behind the advancements in<br />

developed countries.<br />

According to them, science<br />

and technology aspect<br />

of education has not received<br />

adequate attention needed<br />

to push the growth in Nigeria.<br />

Tolu Odugbemi, former vice<br />

chancellor, Ondo State university<br />

of Science and Technology,<br />

Okitipupa (OSUSTECH) said<br />

there is need for Nigeria to pay<br />

adequate attention to sciencebased<br />

education in order to<br />

achieve the needed develop-<br />

ment in the country.<br />

Odugbemi opines that universities<br />

and other higher<br />

institutions as innovation hubs<br />

have major roles to play in using<br />

science and technology to<br />

drive development in Science,<br />

technology , engineering and<br />

Mathematics.<br />

According to him, “Developing<br />

economies, such<br />

as ours, can only fast-track<br />

and/or leap frog their growth<br />

through targeted research and<br />

development. A practical way<br />

to do this is to do what is generically<br />

referred to as reverse<br />

engineering. It is these institutions<br />

that must provide the<br />

roadmap to circumvent those<br />

roadblocks to indigenous technology<br />

enhancement necessary<br />

for driving innovation and<br />

development of the nation.<br />

“The nation must be prepared<br />

to invest heavily in<br />

the higher education cutting<br />

across both the public and private<br />

the research facilities must<br />

orchestrate the brain power of<br />

the staff, take responsibility<br />

for training new generation of<br />

talents and participate in the<br />

transformation of the nation’s<br />

science and technology base.”<br />

He noted that the world<br />

has moved from commoditybased<br />

and military power<br />

ranking to knowledge economies/societies,<br />

adding that the<br />

paradigm shift is propelled by<br />

advancements made through<br />

science and technology innovations.<br />

Isaac Adeyemi, former vice<br />

chancellor, Bells University<br />

of technology, opines that<br />

universities in Nigeria must<br />

focus on the modernising of<br />

forces of the society, for the<br />

promotion of the “values of<br />

science and technology” and<br />

for mediating between the political<br />

and industrial spheres of<br />

national life.<br />

He called for a coherent<br />

national Science and Technology<br />

strategy with framework<br />

developed in consultation<br />

with the National Academies<br />

of Science to specify the national<br />

priorities for research<br />

and development with the<br />

appropriate funding commitment,<br />

while disclosing that<br />

countries like China followed<br />

this path some 50 years ago to<br />

transform their economy.<br />

NBC partners Rise networks to<br />

empower Nigerian Youths<br />

KELECHI EWUZIE<br />

Nigerian Bottling<br />

Company Limited,<br />

(NBC), has partnered<br />

with RISE<br />

Networks- Nigeria’s leading<br />

social enterprise to celebrate<br />

Nigerian youths as they join<br />

the rest of the world to celebrate<br />

<strong>2018</strong> United Nations International<br />

Youth Day which<br />

was held in Lagos.<br />

George Polymenakos,<br />

managing director, Nigerian<br />

Bottling Company while<br />

speaking at the event with<br />

the theme: Safe Spaces For<br />

Youth” said the partnership<br />

with RISE Network in the<br />

celebration of the <strong>2018</strong> International<br />

Youth Day is an<br />

affirmation of the company’s<br />

unflinching commitment to<br />

youth empowerment.<br />

Polymenakos who was<br />

represented by Sade Morgan,<br />

director, Legal, Public Affairs<br />

and Communications said<br />

that the youths lack no excuse<br />

not to unleash their potentials<br />

to bring about needed change<br />

and innovation given the level<br />

of endless possibilities that has<br />

been aided by the rise of technology<br />

in this era and time.<br />

Morgan stated that though<br />

there are challenges in the environment,<br />

it is imperative for<br />

them to brave the odds if they<br />

are keen on achieving their<br />

dream. She added” In the Nigerian<br />

Bottling Company Ltd<br />

and indeed, the entire Coca-<br />

Cola system, we believe in<br />

the power of young people.<br />

The theme of this year’s International<br />

Youth Day is “Safe<br />

Spaces for Youth”. Safe spaces<br />

motivate young people to<br />

engage in sports and leisure,<br />

governance issues and crossborder<br />

interactions, especially<br />

because of internet and digital<br />

penetration and convergence.<br />

As a company, we will<br />

continue to demonstrate our<br />

unwavering commitment to<br />

youth development in unequivocal<br />

terms. Our annual<br />

Management Trainee Programme,<br />

the Technical Training<br />

Centre, Summer ship<br />

Programme and the Youth<br />

Empowered Programme<br />

are all platforms open for<br />

Nigerian youths to explore<br />

opportunities for their personal,<br />

career and economic<br />

advancement”<br />

Toyosi Akerele-Ogunsiji,<br />

founder of Rise Networks and<br />

convener of the conference<br />

said that youths cannot afford<br />

to fold their arms in the<br />

face of limitless opportunities<br />

around urging them to<br />

get involved politically and<br />

invest their energy in productive<br />

causes that would bring<br />

about economic empowerment.<br />

In his own remarks,<br />

Tunji Bello, Secretary to the<br />

Lagos state Government who<br />

represented the Governor<br />

of Lagos state, observe that<br />

there cannot be meaningful<br />

development if government<br />

fails to invest in its youth.<br />

UNIDO reviews vocational training curriculum<br />

to boost employability in Ogun<br />

RAZAQ AYINLA, Abeokuta<br />

United Nations International<br />

Development<br />

Organisation<br />

(UNIDO) has<br />

moved to review vocational<br />

training curriculum operational<br />

in Ogun state with a<br />

view to boosting youth’s employability<br />

and self reliance.<br />

The need to review teaching<br />

methodology and logistics<br />

required in grooming and<br />

teaching world standard skills<br />

that boost self reliance, employability<br />

and ease of doing<br />

business becomes necessary<br />

as UNIDO partners Ogun<br />

state government to rejig<br />

instructions, practicals and<br />

demonstrations embedded in<br />

vocational training<br />

Francis Ukoh, UNIDO’s<br />

National Project Co-coordinator<br />

courses while speaking<br />

during a working visit to<br />

Ogun state on the proposed<br />

partnership noted that effort<br />

was ongoing to review vocational<br />

and entrepreneurial<br />

skills suitable for international<br />

standards that would not<br />

only boost employability and<br />

self reliance among youths,<br />

but would also improve ease<br />

of doing business in the state.<br />

Ukoh however, applauded<br />

State government’s initiative<br />

in the areas of skills and<br />

vocational acquisitions and<br />

its current efforts to review<br />

and modernize the curriculum,<br />

practicals and demonstrations<br />

applicable to entrepreneurial<br />

and vocational<br />

studies, just as he pledged<br />

the organisation’s support<br />

towards attaining its core<br />

objectives of human capital<br />

development.<br />

Modupe Mujota, commissioner<br />

for Education, Science<br />

and Technology expressed<br />

the State government’s readiness<br />

to partner with United<br />

Nations International Development<br />

Organisation (UNI-<br />

DO) on skills acquisition for<br />

its teeming populace.<br />

Mujota while addressing<br />

the UNIDO’s National<br />

Project Co-coordinator and<br />

members of the Association<br />

of Skilled and Vocational Artisans<br />

of Nigeria (ASVAN) in<br />

Abeokuta, said the proposed<br />

partnership would cover areas<br />

of logistics, such as venue,<br />

curriculum development for<br />

the training and resource persons.<br />

The commissioner observed<br />

that government’s<br />

support towards the initiative<br />

was borne out of its interest<br />

in promoting skills and vocational<br />

acquisition among<br />

the people, adding that the<br />

establishment of Institute of<br />

Technology, Idi-Aba, Abeokuta<br />

and investment in Technical<br />

and Vocational Education<br />

Training (TVET) through<br />

the State–owned Science and<br />

Technical Colleges, are all attestations<br />

to government’s<br />

effort to human capital development.


C002D5556<br />

Tuesday <strong>21</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

22 BUSINESS DAY<br />

EDUCATION INSIGHT<br />

OYIN EGBEYEMI<br />

Ho mework<br />

time may be<br />

viewed as the<br />

most daunting<br />

part of<br />

the day, both for children<br />

and parents. This period<br />

comes in towards the evening<br />

when all that children<br />

may want to do is play, sleep<br />

or watch television. At this<br />

time, some parents have<br />

only just returned from<br />

work and just want to have<br />

their dinner and relax, especially<br />

after a long stressful<br />

day and many hours in traffic.<br />

Some other parents who<br />

work longer hours may even<br />

miss this activity altogether.<br />

The importance of<br />

homework cannot be overemphasised.<br />

In addition<br />

Homework should be a collaborative effort<br />

to academic development,<br />

children stand to gain many<br />

benefits from this practice of<br />

taking a bit of school back<br />

home, and these benefits<br />

help develop life skills that<br />

can be applied in the real<br />

world.<br />

They learn some level of<br />

independence from carrying<br />

out tasks on their own;<br />

they build retentive memory<br />

by repeating activities<br />

from the day and applying<br />

the knowledge gained to<br />

additional exercises; they<br />

build organisational skills<br />

and learn to manage time<br />

effectively; they develop<br />

a sense of ownership and<br />

responsibility, and gain that<br />

feeling of accomplishment<br />

when they return to school<br />

after having completed their<br />

tasks; and so many more.<br />

From the schools’ and<br />

teachers’ perspectives, apart<br />

from it being an integral part<br />

of the curriculum, giving<br />

homework provides some<br />

form of feedback on the<br />

quality of the style of teaching<br />

and the effectiveness of<br />

delivery. It also forms an<br />

additional means of identifying<br />

children who may<br />

have learning challenges<br />

or those who may not be<br />

getting enough support<br />

from home.<br />

As great as the benefits<br />

that children stand to gain<br />

from homework are, they<br />

will only be achieved if this<br />

activity is carried out and<br />

monitored properly. From<br />

schools, setting appropriate<br />

assignments is key towards<br />

the children’s development.<br />

Appropriateness may be a<br />

broad concept, but it is up<br />

to the schools and teachers<br />

to determine what this is<br />

in line with the curriculum<br />

they apply, the level<br />

of their students’ development<br />

and educational standards.<br />

Homework should<br />

be stimulating enough to<br />

ensure that the children<br />

are exposed to a healthy<br />

challenge, which would<br />

task them, further aiding<br />

their learning abilities and<br />

knowledge growth.<br />

After children return<br />

their homework to school,<br />

follow up is also important.<br />

Corrections need to<br />

be made and delivered<br />

effectively. Wrong answers<br />

should not be punishable<br />

offences. Rather, children<br />

should be taught how to receive<br />

and accept constructive<br />

feedback.<br />

Support from the home<br />

is also extremely important<br />

when it comes to homework.<br />

Our current times<br />

are rather challenging, as<br />

parents spend more hours<br />

at work and may not be<br />

able to make enough time<br />

to help their children with<br />

their homework. While<br />

parents should strive to<br />

find this time, the reality<br />

is that they may not always<br />

be available.<br />

If they are not, it is imperative<br />

that a responsible<br />

adult or educated superior<br />

who is sufficiently<br />

knowledgeable supervises<br />

the homework sessions<br />

at home (grandparents,<br />

older siblings, afterschool<br />

services etc.). These support<br />

people should be able<br />

to assist with homework<br />

sessions, but also have to<br />

be mindful that they allow<br />

the children to do most of<br />

the work themselves. They<br />

should be patient with<br />

them and ensure that they<br />

do not give excessive leeway<br />

to the children such<br />

that they themselves end<br />

up answering the questions<br />

without getting the<br />

children to think for themselves<br />

and get the work<br />

done largely as a result<br />

their own abilities.<br />

When it comes to homework,<br />

a support tool that has<br />

recently become common<br />

and is of growing concern<br />

is the Internet. Google has<br />

literally become everyone’s<br />

best friend, for the reason<br />

that it has the answers to<br />

most questions.<br />

So people have gradually<br />

delegated their thinking<br />

process to computers.<br />

This same practice applies<br />

directly to homework. We<br />

need to be very careful that<br />

we ensure that our children<br />

do not abuse the availability<br />

of information online, and<br />

make more use of their own<br />

cognitive power to do their<br />

homework<br />

Additionally, giving children<br />

access to computers<br />

in general can be tricky<br />

because we may not be fully<br />

aware of what they get up<br />

to. Distractions from games<br />

and other leisure activities<br />

on the Internet may impair<br />

the children’s concentration<br />

on their homework.<br />

In order to minimise<br />

this, parent may contact<br />

Internet Service Providers<br />

to discuss restriction<br />

options on such websites.<br />

They could also ensure that<br />

computers at home are well<br />

placed in central areas so<br />

that children’s activities can<br />

be monitored whilst they<br />

use the computers.<br />

In order to reap the full<br />

benefits, homework should<br />

be a collaborative effort<br />

involving children, teachers<br />

and parents; with support<br />

of resources and other<br />

tools which add value to the<br />

process. Close attention and<br />

supervision are paramount<br />

in order for this to work the<br />

right way.<br />

Oyin Egbeyemi is an executive<br />

administrator at The Foreshore<br />

School, Ikoyi, Lagos.<br />

WOWBii Interactive deepens<br />

<strong>21</strong>st century learning in ABUAD<br />

KELECHI EWUZIE<br />

As part of its contribution<br />

to promote<br />

<strong>21</strong>st Century<br />

Learning in the institution<br />

across the country,<br />

the management of Wowbii<br />

Interactive has donated an<br />

Interactive Touch Screen<br />

to Afe Babalola University,<br />

Ado-Ekiti (ABUAD).<br />

Gbolahan Olayomi,<br />

founder, WOWBii Interactive<br />

while speaking at the<br />

presentation ceremony at<br />

the school said the company<br />

recognises ABUAD as an<br />

early adopter of technology<br />

and knows that the WOWBii<br />

experience will transform<br />

learning in the institution.<br />

Olayomi observes that<br />

as educational technology<br />

(EdTech) adoption drives<br />

new and more efficient<br />

learning styles, Wowbii<br />

Interactive is partnering<br />

with African institutions<br />

to change the narrative<br />

by introducing interactive<br />

touch screen displays in<br />

EdTech.<br />

Designed and built as<br />

a multi-touch interactive<br />

screen, the WOWBUD-<br />

DTM is an internet-ready<br />

platform offering a whiteboard<br />

and remote learning<br />

functionality with in-built<br />

Android and Windows operating<br />

systems.<br />

The WOWBUDDTM<br />

promotes real-time collaboration<br />

for Educators<br />

and Learners; allowing for<br />

flexibility in learning styles<br />

and techniques whilst encouraging<br />

creativity leveraging<br />

Technology. Wowbii<br />

Interactive seeks to transform<br />

the way Africa learns,<br />

one interactive panel at a<br />

time.<br />

Afe Babalola Founder<br />

of the university while acknowledging<br />

receipt of the<br />

WOWBUDDTM appreciated<br />

the WowBii team for<br />

their kind gesture towards<br />

ABUAD stating that the visit<br />

was timely.<br />

Babalola reiterated his<br />

commitment to transforming<br />

tertiary education in<br />

Nigeria and accepted the<br />

partnership offer; assuring<br />

both organisations of full<br />

adoption by Afe Babalola<br />

University.<br />

Afe Babalola University<br />

Ado Ekiti (ABUAD) is<br />

among innovative tertiary<br />

institutions in Nigeria that<br />

have adopted the WOWBii<br />

Touch screens alongside<br />

Covenant University, Ota<br />

and Mountain Top University,<br />

Ibafo.<br />

WASSCE’s outstanding<br />

student gets N9m<br />

scholarship to pursue<br />

academic goals<br />

KELECHI EWUZIE<br />

The Bridge House<br />

College, Ikoyi, Lagos<br />

has awarded<br />

a full scholarship<br />

worth N9 million to David<br />

Okorogheye Orisheneye, a<br />

15-year old May/June <strong>2018</strong><br />

West African Senior School<br />

Certificate Examinations<br />

(WASSCE) outstanding student<br />

to pursue a two-year<br />

Cambridge A’ Level course<br />

in the College.<br />

The scholarship award<br />

according to the sixth form<br />

college was in recognition<br />

of the brilliant performance<br />

of the prodigy, who<br />

in addition to obtaining a<br />

parallel A1 in all the nine<br />

subjects he wrote during<br />

the May/June <strong>2018</strong> West<br />

African Senior School<br />

Certificate Examinations<br />

(WASSCE), conducted by<br />

West African Examination<br />

Council also scored 332 in<br />

his JAMB.<br />

Carmen Latty, college<br />

administrator, in a letter<br />

conveying the news of the<br />

scholarship award to the recipient<br />

said the scholarship<br />

award was in fulfillment of<br />

BHC’s tradition to celebrate<br />

academic success and to encourage<br />

students to pursue<br />

academic goals.<br />

According to Latty, “Your<br />

very brilliant performance<br />

in the May/June <strong>2018</strong> WAS-<br />

SCE where you obtained<br />

9As in subjects including<br />

Mathematics, Chemistry<br />

and Physics and went on<br />

to score 332 in JAMB all at<br />

the age of 15 caught our<br />

attention.<br />

The N9 million scholarship<br />

will cover boarding,<br />

tuition, books and uniforms<br />

while the programme lasts<br />

from September 10, <strong>2018</strong> to<br />

June 20, 2020.<br />

“The Board of Directors,<br />

management and staff<br />

of Bridge House College<br />

heartily congratulate you<br />

and hereby offers you a<br />

full scholarship to pursue<br />

the two-year Cambridge<br />

A’ Level Course in the College<br />

effective September 10,<br />

<strong>2018</strong> to June 30, 2020”, the<br />

letter read.


Tuesday <strong>21</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

23<br />

C002D5556 BUSINESS DAY<br />

Energy Report<br />

Oil & Gas Power Renewables Environment<br />

Ibadan Disco to start another phase of supply pre-paid meters<br />

… invests over N11.5bn in metering, network upgrade, rehabilitation<br />

OLUSOLA BELLO<br />

Electricity consumers<br />

under<br />

the jurisdiction<br />

of Ibadan Electricity<br />

Distribution<br />

Company ( IBEDC),<br />

who have paid for pre-paid<br />

meters but are yet to get,<br />

would be serviced latest<br />

by December this year, the<br />

management of the company<br />

says .<br />

The company says it is<br />

ready to meter all those that<br />

have paid for pre- paid meters<br />

but they must provide<br />

evidence of payment. The<br />

management stated this<br />

while conducting stakeholders<br />

and journalists round<br />

some of it facilities that had<br />

been upgraded to enhance<br />

steady power supply. It also<br />

showed them the over 11,<br />

000 pre - paid meters it said<br />

would be deployed to customers<br />

starting from this<br />

week.<br />

According to the company<br />

over N11.5billion has<br />

been invested in major capital<br />

projects such as metering,<br />

network upgrade and rehabilitation<br />

last six months.<br />

According to John Ayodele,<br />

the chief operating<br />

officer who represented<br />

John Donnachie, managing<br />

director/ceo of the company<br />

said:“As part of our<br />

unwavering commitment<br />

to our mission, distributing<br />

power, changing lives, we<br />

have in the past 6 months<br />

invested over N11.5 Billion<br />

in major capital projects.<br />

These span across our franchise<br />

area covering – Oyo,<br />

Ogun, Osun, Kwara; parts of<br />

Kogi, Niger and Ekiti States.<br />

These projects are major<br />

game changers for IBEDC<br />

as a business and for our<br />

esteemed customers, which<br />

have significantly improved<br />

our service delivery, quality<br />

and quantity of power<br />

supply”.<br />

He said recently, the<br />

company commenced the<br />

procurement and supply of<br />

10,000 Distribution Transformer<br />

(DT) Meters at a<br />

cost of N4 Billion. These DT<br />

Meters will greatly reduce<br />

the challenge of estimated<br />

bills and ensure customers<br />

without meters are billed<br />

more accurately through<br />

its energy audit, accounting<br />

functionalities, and above<br />

all, assist in our Technical,<br />

commercial and collection<br />

(TC&C) losses.<br />

To further reduce safety<br />

related accidents and top<br />

achieve the vision Zero and<br />

Safety culture of IBEDC,<br />

the board awarded a whopping<br />

sum of N1.47 Billion<br />

for a major overhaul of the<br />

Health, Safety and Environment<br />

department.<br />

How inefficient grid management is killing power generating plants<br />

The power sector is<br />

made up of three<br />

mutually exclusive,<br />

but necessary parts<br />

– generation, transmission,<br />

and distribution. Nigerians<br />

are all very much conversant<br />

with the operations<br />

of the electric generator<br />

or generating set (I better<br />

pass my neighbour or<br />

other bigger ones) which<br />

is made up of three parts<br />

– the generator itself (machine),<br />

an electrical cable<br />

or wire (transmission) that<br />

connects the generator to<br />

a control panel or fuse box<br />

through which the generated<br />

power is distributed to<br />

equipment (distribution).<br />

All electrical appliances<br />

have set conditions under<br />

which they function at optimal<br />

levels. Any fluctuations<br />

in these conditions can<br />

cause the appliances to run<br />

at a lower efficiency. Power<br />

generators,like the Hydros<br />

and thermals used in Nigeria,<br />

are no exception to this.<br />

Thermal power plants, like<br />

the gas turbines (GTs) are<br />

designed to operate optimally<br />

and efficiently at base<br />

load. Operations of these gas<br />

turbines at operating points,<br />

far away from their baseloads<br />

implies a reduction in<br />

efficiency or in other words<br />

an increase in consumption<br />

of gas by as much as 15-<br />

20%,a cost not recognized<br />

by NBET nor captured in<br />

the MYTO.<br />

This reduction in operating<br />

efficiency is in addition<br />

to the huge fatigue damage<br />

leading to higher O&M cost<br />

meted out on turbines due to<br />

ramping up and down over<br />

wide temperature swings. It<br />

is common knowledge that<br />

GenCo power stations have<br />

been used by TCN, via its<br />

subsidiary SO/NCC to stabilise<br />

the national grid with<br />

no compensations.<br />

Generally, the damaging<br />

effects includes: thermal<br />

stress on Steam Turbine<br />

Blades, creep of compressor<br />

and turbine blades, Cracks<br />

on exhaust sleeves, Irregular<br />

heating and cooling cycles<br />

of hot gas path components,<br />

Cracks in ceramic tiles of<br />

the combustion chamber,<br />

Defective gas control valves<br />

due to wear and tear etc.<br />

It is a no brainer that the<br />

grid cannot conveniently<br />

take over 4500MW without<br />

rejecting load. Generation<br />

above 5,000 MW may either<br />

be lost or rejected either<br />

by DisCos or transmission<br />

service provider (TSP) due<br />

to their inabilities largely<br />

caused by infrastructural<br />

challenges (Line cuts, Transformer<br />

faults and unavailability<br />

etc.) causing grid<br />

frequency to be very high.<br />

Furthermore, Power<br />

Generation Companies are<br />

increasingly facing lower capacity<br />

utilization (dispatch)<br />

being forced to operate their<br />

dispatched Turbines/machines<br />

far from the baseload<br />

settings sometimes even<br />

lower than 50% of rated<br />

capacity. On the plant level,<br />

less than 53% of average<br />

available power capacity is<br />

dispatched to the grid. For<br />

the month of April, <strong>2018</strong><br />

for instance, on a daily basis,<br />

GENCOS had an average<br />

available capacity of<br />

7485 MW but TCN could<br />

only transmit an average of<br />

3985MW which is about 53%<br />

of the available capacity. This<br />

data as published by TCN<br />

(SO/NCC) is presented in<br />

the table below.<br />

The project will deliver on<br />

over 60 critical need areas<br />

with major focus on procurement<br />

and deployment of<br />

PPEs, IPEs, signages, Labels<br />

and symbols. This project<br />

is expected to map the layouts<br />

of 114 Substations in<br />

order to develop conceptual<br />

site models, training<br />

on emergency techniques,<br />

solid waste and hazardous<br />

management programme,<br />

production of occupational<br />

health and safety environmental<br />

policies and framework<br />

for all technical and<br />

non-technical staff. In addition,<br />

it will ultimately aid us<br />

in attaining the certification<br />

required, thereby making<br />

us an internationally recognized<br />

health hazard compliant<br />

organisation.<br />

“In line with reducing<br />

the incidence of estimated<br />

bills, we have commenced<br />

our meter roll out with a<br />

1st batch of 48,470 Energy<br />

Meters of various ratings<br />

and capacities. This includes<br />

35,000 Single-Phase, 12,000<br />

Three-Phase, 1,470 Whole<br />

current, C.T-Operated and<br />

Statistical Meters all at a sum<br />

of N3.1 Billion, ahead of the<br />

MAP initiative currently being<br />

finalized by NERC and<br />

the Discos,” he said.<br />

The continuous metering<br />

of Maximum Demand customers<br />

is also in place with<br />

the development of 13 High<br />

Voltage Energy Meters and<br />

delivery of 912 Low Voltage<br />

Maximum Demand Energy<br />

Meters at a cost of N405 Million.<br />

To further support the<br />

huge metering expenditure,<br />

we have invested extensively<br />

in the supply and installation<br />

It is inexplicable that a<br />

country of over 180 million,<br />

is unable to utilise the<br />

GenCos available capacity<br />

of 7500MW, what then is the<br />

incentive for further capacity<br />

recovery and expansion?<br />

Despite GenCos efforts<br />

to increase their available<br />

capacity effectively nominating<br />

same on a daily basis,<br />

the SO has the “grid<br />

right” to instruct any GenCo<br />

to reduce or cut down on<br />

its nominated capacity. It<br />

should also be noted that<br />

for a GenCo to nominate<br />

Power utilisation for the month of April, <strong>2018</strong> for six thermal and two Hydro plants<br />

Olusola Bello, Team lead, Analysts: Isaac Anyaogu, Stephen Onyekwelu, Graphics: Joel Samson. Email: energyreport@businessdayonline.com, Tel: +234-8023020011; +234-7037817378;<br />

of Advanced Metering Infrastructure<br />

(AMI) Systems at<br />

over N1 Billion, this investment<br />

is critical to optimally<br />

implement the functionalities<br />

of DT Meters”. As we<br />

speak, we have recently received<br />

95% of CAPMI meters<br />

for deployment for those<br />

that paid.<br />

The managing Director/<br />

CEO informed that the ongoing<br />

Asset and Customer<br />

Enumeration (ACE) exercise<br />

estimated at a N5 Billion,<br />

is now fully rolled out<br />

across the franchise and is<br />

scheduled for completion<br />

early next year. The project<br />

on completion will greatly<br />

enhance service delivery<br />

by providing critical data<br />

needed for planning and<br />

provision of infrastructure,<br />

reduce estimated bills, improve<br />

the accuracy, enhance<br />

quality of power supply and<br />

quicker fault response rates.<br />

The pilot exercise at Elebu, (a<br />

community within Ibadan)<br />

has already identified additional<br />

customer population<br />

which is yielding fruits in<br />

terms of efficient customer<br />

service delivery.<br />

any capacity, it means effective<br />

commitments has been<br />

made as per gas and other<br />

equivalent overhead costs.<br />

This is a legitimate cost that<br />

must be recovered!<br />

Compelling a generator<br />

to ramp up and ramp down<br />

at unscheduled time affects<br />

it equivalent operating hours<br />

(EOH) and also stresses the<br />

internals of the machine<br />

thereby reducing the plants<br />

lifespan as well as attracts an<br />

associated costs, incurred<br />

in making such capacity<br />

available. Generating plants<br />

can no longer sustain these<br />

costs alone given the level<br />

of remittance in the market,<br />

which barely covers the operating<br />

cost.<br />

The only sane thing to<br />

do and save the sector from<br />

collapsing is for GenCos to<br />

shut down until when the<br />

networks (transmission and<br />

distribution) are efficient<br />

enough to take power and<br />

fully pay for both outstanding<br />

and current liabilities<br />

to GenCos. Section 12.6.6<br />

of the Grid code allows the<br />

Generator to disconnect the<br />

Generating Unit for reasons<br />

of safety of personnel, Apparatus,<br />

and/or Plant.


Tuesday <strong>21</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

24 BUSINESS DAY<br />

C002D5556<br />

Aramco charges Nigeria, other<br />

OPEC members to turn on the taps<br />

ISAAC ANYAOGU<br />

Saudi Aramco has<br />

charged other oil<br />

producers to ramp<br />

up production to<br />

offset $1 trillion investment<br />

loss since the market downturn<br />

began address declining<br />

production in matured<br />

fields.<br />

In the organisation’s<br />

latest report, Saudi Aramco<br />

Annual Review, Khalid Al-<br />

Falih, chairman of Aramco’s<br />

board said mature oil<br />

fields are seeing an increase<br />

in declining production<br />

rates, and this must be<br />

offset by continued investments<br />

in the industry if<br />

the world is to meet what<br />

is thought to be an 1-1.5<br />

million barrel per day annual<br />

demand growth rate<br />

in coming years.<br />

“To respond to this situation,<br />

significant new investments<br />

are required in<br />

additional capacity and<br />

expanded and upgraded<br />

infrastructure, as well as<br />

the development of pioneering<br />

technology to<br />

make petroleum energy<br />

more sustainable and accessible,”<br />

Al-Falih said in<br />

his opening message to the<br />

42-page report published<br />

on Friday.<br />

Aramco’s annual report<br />

cites the International Energy<br />

Agency’s World Energy<br />

Outlook 2017 New Policies<br />

Scenario estimates that call<br />

for a 30 percent increase<br />

in global energy needs between<br />

now and 2040.<br />

Saudi Aramco, for now<br />

the world’s top oil producer,<br />

is doing its part to meet this<br />

future demand, according<br />

to the report.<br />

“Saudi Aramco is committed<br />

to playing its unique<br />

part in meeting the world’s<br />

energy needs today and<br />

tomorrow by continuing<br />

to invest wisely throughout<br />

the cycle and across the<br />

value chain, reinforcing<br />

our preeminent leadership<br />

position in the industry,”<br />

Energy Report<br />

Nigeria ignores coal as Trump sets new emission rules to boost use<br />

…environmentalists fear rise in emissions<br />

STEPHEN ONYEKWELU<br />

Nigeria’s vast<br />

coal resource<br />

wastes away<br />

for inefficiency<br />

as<br />

the Trump administration<br />

plans to formally overhaul<br />

climate change regulations<br />

that would allow individual<br />

states to decide how, or even<br />

whether to curb carbon dioxide<br />

emissions from coal<br />

plants, come <strong>Aug</strong>ust <strong>21</strong>, according<br />

to three people who<br />

have seen the full proposal.<br />

The plan would also relax<br />

pollution rules for power<br />

plants that need upgrades.<br />

That, combined with allowing<br />

states to set their own<br />

rules, creates a serious risk<br />

that emissions, which had<br />

been falling, could start<br />

to rise again, according to<br />

environmentalists.<br />

The proposal, which<br />

President Trump is expected<br />

to highlight <strong>Aug</strong>ust<br />

<strong>21</strong>at a rally in West Virginia,<br />

amounts to the administration’s<br />

strongest and broadest<br />

effort yet to address<br />

what the president has long<br />

described as a regulatory<br />

“war on coal.”<br />

It would considerably<br />

weaken what is known<br />

as the Clean Power Plan,<br />

former President Barack<br />

Obama’s signature regulation<br />

for cutting planetwarming<br />

emissions at coalfired<br />

plants.<br />

Back to Africa’s most<br />

populous and energy hungry<br />

nation, Nigeria’s coal<br />

industry suffered a blow<br />

in the 1950s when oil was<br />

discovered. Up until this<br />

point, the Nigerian Railway<br />

Corporation was the largest<br />

consumer of coal in the<br />

country.<br />

However, after the discovery<br />

of oil, the Railway<br />

Corporation began to replace<br />

its coal burning trains<br />

with diesel-powered engines.<br />

An additional negative<br />

impact came when the<br />

Electricity Corporation of<br />

Nigeria began converting<br />

its power generation equipment<br />

from coal to diesel and<br />

gas as well.<br />

The Nigerian Civil War<br />

also negatively impacted<br />

coal production; many<br />

mines were abandoned<br />

during the war. Following<br />

the war, production never<br />

completely recovered and<br />

coal production levels were<br />

erratic.<br />

Attempts at mechanising<br />

production ended badly, as<br />

Al-Falih added.<br />

Aramco referenced its<br />

new discoveries in the Sakab<br />

and Zumul oil fields, as<br />

well as its gas reservoir find<br />

in Sahba field. Other projects<br />

in 2017 that Aramco has<br />

invested include Khurais<br />

field (300,000 bpd by <strong>2018</strong>),<br />

Fazran field (75,000 bpd<br />

by 2020), Dammam field<br />

(25,000 bpd by 20<strong>21</strong>; 75,000<br />

by 2026). Fadhili Gas Plant<br />

(start up 2019, 2.5 billion<br />

scfd), Hawiyah Gas Plant<br />

(1.1 billion scfd).<br />

However for OPEC producers<br />

in Africa especially<br />

Nigeria and Libya, this will<br />

be a tough call considering<br />

the internal crises in<br />

these countries. Libya has to<br />

check activities of different<br />

groups fighting for political<br />

and economic power.<br />

The challenge for Nigeria<br />

is to raise production by attracting<br />

new investments.<br />

But in order to do this, it<br />

must embark on deep reforms<br />

in a sector that is<br />

beset by challenges.<br />

both the implementation<br />

and maintenance of imported<br />

mining equipment<br />

proved troublesome, and<br />

hurt production. After the<br />

civil war, the Nigerian coal<br />

industry was not able to return<br />

to its peak production,<br />

this is hurting industries<br />

because the cost of electricity<br />

eats away profit margins.<br />

Against the backdrop of<br />

severe shortages in much<br />

needed supply of electricity,<br />

it is inevitable that Nigeria<br />

must move from rhetoric<br />

to concrete action in the<br />

OLUSOLA BELLO<br />

Following public<br />

scepticism over the<br />

execution of the<br />

Ajaokuta Kaduna –<br />

Kano gas pipeline projects<br />

the group managing director<br />

of the Nigerian National<br />

Petroleum Corporation<br />

(NNPC), Maikanti Baru has<br />

directed the Chinese Consortium<br />

and the NNPC team<br />

working on the Project to<br />

ensure timely finalization<br />

of the term sheet for the<br />

project’s contractor financing<br />

agreement<br />

The Chinese consortium<br />

is made up of Bank of China<br />

and Sinosure.<br />

Baru maikanti, who had<br />

to cut short his trip to Saudi<br />

Arabia for a stop-over in<br />

Dubai to meet with the Chi-<br />

NNPC want timely delivery of gas project<br />

development and addition<br />

of coal-fired electricity to<br />

the nation’s electricity supply<br />

mix.<br />

Two of the biggest cement<br />

markers in Nigeria,<br />

Dangote Cement Plc and<br />

Lafarge Plc have been investing<br />

massively in coal as<br />

source of energy to power<br />

its plants.<br />

“Companies are turning<br />

to coal for their energy<br />

needs. What we tend to forget<br />

is that coal as a major<br />

source of energy might not<br />

be clean and it is ultimately<br />

cheaper to use liquefied<br />

natural gas (LNG) rather<br />

than coal because of social<br />

and environmental<br />

concerns” Eddy van Den<br />

Broeke, founder of Abujabased<br />

Greenville Oil and<br />

Gas Limited said at a gas<br />

development roundtable<br />

in Lagos.<br />

Dangote Cement<br />

switched to using coal at its<br />

cement plants in response<br />

to disruption to gas supplies<br />

and to lower input<br />

costs. The cement producer<br />

uses 12,000 metric tonnes<br />

(MT/day) of coal. Ashaka<br />

Cement, a fully-owned subsidiary<br />

of Lafarge Africa,<br />

said coal accounted for 82<br />

percent of its power usage<br />

over the period, while work<br />

is ongoing on its 16-megawatt<br />

lignite-fired coal power<br />

plant at its factory in Gombe<br />

State.<br />

“Coal business is booming.<br />

I have some Chinese<br />

companies that need about<br />

a million metric tonnes<br />

(MT) of coal from me every<br />

month and I don’t meet up<br />

with the demand. Dangote<br />

Cement Plc is ready to buy<br />

up every piece of coal we<br />

excavate in Kogi state for its<br />

Obajana cement factory”<br />

Leo Nwankwo, a commodities<br />

analyst and trader told<br />

<strong>BusinessDay</strong>.<br />

“There are jobs to be<br />

created, when we develop<br />

our coal industry. I trade in<br />

commodities and coal is just<br />

one of the many commodities<br />

I trade in. When you visit<br />

our coal excavation sites in<br />

Kogi state and see the level<br />

of unemployment and poverty,<br />

I fear for this country.<br />

Let us focus on developing<br />

our economy and not let the<br />

shouts about clean energy<br />

deter us from creating jobs<br />

for our bulging youth population”<br />

Nwankwo said.<br />

Trump’s plan is the latest<br />

move in a string of efforts,<br />

including prodding<br />

grid operators to purchase<br />

more electricity from coal<br />

plants and asserting that<br />

coal plant retirements are<br />

threatening the reliability of<br />

the national power grid, to<br />

end what Trump has called<br />

his predecessor’s war on coal<br />

and a sure sign to the industry<br />

that the Trump administration<br />

still has its back, even as<br />

coal production continues<br />

to decline.<br />

nese consortium reiterated<br />

the need for both parties<br />

to ensure speedy conclusion<br />

on the details of the<br />

agreement towards its full<br />

execution during President<br />

Muhammadu Buhari’s state<br />

visit to China next month.<br />

The is scheduled to attend<br />

the Forum of China-Africa<br />

Cooperation (FOCAC)<br />

Summit holding from the<br />

1st to 4th September, <strong>2018</strong> in<br />

the Chinese capital, Beijing<br />

and it is expected that AKK<br />

Project will be top on Mr.<br />

President’s agenda.<br />

The NNPC had earlier<br />

clarified that the execution<br />

of the AKK gas pipeline<br />

project is progressing under<br />

the original concept of 100<br />

percent contractor financing<br />

model contrary to some<br />

media report of a possible<br />

resort to ‘’proceed of gas tariffs’’<br />

as new means of funding<br />

because of purported<br />

collapse of negotiation with<br />

Chinese lenders.<br />

The Corporation noted<br />

that the successful conclusion<br />

of the contractor<br />

financing terms would pave<br />

way for the historic groundbreaking<br />

ceremony which<br />

would take place after the<br />

conclusion of the front-end<br />

activities.<br />

Already the Corporation<br />

had concluded the<br />

vital Front End Engineering<br />

Design (FEED) and the<br />

Environmental Impact Assessment<br />

(EIA) report while<br />

work on the detailed engineering<br />

design is nearing<br />

conclusion.<br />

Upon completion within<br />

a projected 24-month<br />

window, the NNPC stated<br />

that the AKK gas pipeline<br />

would enable connectivity<br />

between the East, West and<br />

North, which is currently<br />

non-existent.<br />

It would also enable gas<br />

supply and utilization to key<br />

commercial centres in the<br />

Northern corridor of Nigeria<br />

with the attendant positive<br />

spin-off on power generation<br />

and industrial growth.


Tuesday <strong>21</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

C002D5556<br />

BUSINESS DAY<br />

25<br />

In association with<br />

RoI in prime office space under pressure<br />

as market continues to struggle<br />

…rich development pipeline means investors in for stiff competition<br />

CHUKA UROKO<br />

For investors in prime<br />

office market in the<br />

main cities of Nigeria<br />

notably Lagos, Abuja<br />

and Port Harcourt,<br />

improvement in macro-economic<br />

environment means<br />

little or nothing as the market’s<br />

continued struggle piles downward<br />

pressure on the return on<br />

their investment (RoI).<br />

Whereas increased supply<br />

from project completions and<br />

the rise and rise of co-working<br />

space is exerting a pull on demand<br />

in the Lagos market, security<br />

risks and environmental<br />

hazards in Port Harcourt sent<br />

office rents to their lowest in<br />

over five years.<br />

Grade-A office vacancies<br />

remain high and it appears<br />

the economy would need to<br />

strengthen much more to reverse<br />

this trend. The wait for the<br />

global brands looking to open<br />

up shop in Grade-A signature<br />

addresses worthy of their presence<br />

may be taking too long.<br />

As at the first half of this year<br />

(H1 <strong>2018</strong>), there was an average<br />

of 28 percent decline in office<br />

rents per square metres across<br />

the major cities. In the Central<br />

Business District (CBD) of Abuja,<br />

rents dropped 30 percent to<br />

N40/$0.11 per square metre per<br />

month down from N57/$0.16<br />

per square metre per month.<br />

On Olu Obasanjo Way in<br />

Port Harcourt, rents declined<br />

from N16/$0.04 per square<br />

metre per month in 2017 to<br />

N12.5/$0.03 per square metre<br />

per month in H1 <strong>2018</strong>, representing<br />

-23 percent drop.<br />

This is slightly better than the<br />

situation in Ikoyi, Lagos, where<br />

rents dropped -33 percent to<br />

N207/$0.57 per square metre<br />

in H1 <strong>2018</strong>, down from<br />

N309/$0.85 per square metre<br />

per month in 2017.<br />

The implication of this is that<br />

investors will be under pressure<br />

from their financiers who are<br />

no Father Christmas and so,<br />

would get their agreed repayment<br />

sum plus the interest in<br />

spite of the market situation.<br />

Those who are not exposed to<br />

bank credit may decide to stick<br />

to old rents, leading to high<br />

vacancy factor which, in turn,<br />

leads to depreciation and high<br />

maintenance cost.<br />

But, on the other hand,<br />

demand for grade B and smaller<br />

office space remained stable<br />

when compared with last year<br />

and, according to a new report<br />

by Northcourt Real Estate, coworking<br />

spaces continue to<br />

grow in popularity with a few<br />

service providers opening more<br />

locations.<br />

The report hopes that with<br />

increased flexibility in pricing<br />

and terms, a renewed focus on<br />

volume, partnerships and programmes<br />

will drive profitability.<br />

“The development pipeline<br />

remains rich and is much more<br />

active in comparison to H1<br />

2017. With over 100,000 square<br />

metres of office currently available<br />

for lease on the market,<br />

completions scheduled for<br />

<strong>2018</strong> already have significant<br />

competition for the few multinationals<br />

and big brands that<br />

can afford grade-A space, not<br />

accounting for the brands that<br />

are willing to settle for the more<br />

flexible and affordable co-work<br />

option”, said Tayo Odunsi,<br />

Northcourt’s CEO.<br />

The retail market also continued<br />

to struggle with shrinking<br />

middle class and dwindling<br />

purchasing power of the<br />

customer. It however, differs<br />

from the office market because<br />

stable exchange rate regime<br />

makes planning around operational<br />

costs and profit projections<br />

much more feasible<br />

for retailers. Local investors,<br />

emboldened to make further<br />

investments, softly opened the<br />

Next Mall in Port Harcourt and<br />

The Atlantic in Lagos and the<br />

Novare Central Mall in Abuja.<br />

Unlike the office market<br />

again, vacancy rates reduced<br />

largely across the Grade-A<br />

malls. For instance, The Palms<br />

and Ikeja City Mall had the<br />

lowest vacancies at 0 percent<br />

and 2 percent respectively.<br />

Novare Mall came in at 28 percent,<br />

down from 47 percent at<br />

the end of 2017. Artee’s Port<br />

Harcourt Mall, Big Treat and<br />

Genesis Centre had 8 percent,<br />

15 percent and 25 percent respectively.<br />

But whereas Ceddi Plaza<br />

and Gateway Mall in Abuja<br />

recorded <strong>21</strong> percent and 38<br />

percent respectively, Abuja’s<br />

largest mall – Jabi Lake<br />

(20,000square metres) recorded<br />

the highest vacancy rate in city<br />

at 40 percent and this was due<br />

to a number of stores that closed<br />

down in Q1 <strong>2018</strong> coupled with<br />

high rentals.<br />

These high vacancy rates<br />

find explanation in some international<br />

investors finding<br />

business conditions in Nigeria<br />

less favorable and are instead<br />

pursuing retail interests in<br />

Eastern Europe and Eastern<br />

Africa, local HNI’s (High Networth<br />

Individuals) who are<br />

not disturbed by currency risks<br />

amongst others, are moving<br />

into the retail space to make<br />

large-scale investments.<br />

“Outside purpose-built and<br />

A-grade malls, high street retail<br />

within central locations continue<br />

to experience high demand.<br />

Larger malls, though more appealing<br />

to international retailers<br />

due to better infrastructure, are<br />

less attractive to local brands<br />

due to higher rents and service<br />

charge costs, Odunsi noted.<br />

“Events, entertainment<br />

and leisure features continue<br />

to be a traffic pull for large<br />

malls with car park payments<br />

remaining a key income<br />

stream and a counter-weight<br />

to the pain of declined rents<br />

in major malls,” he added.<br />

Data from the Nigeria Bureau<br />

of Statistics (NBS) shows<br />

that payment channel transactions<br />

reached an all-time<br />

high of ₦86.1 trillion in 2017,<br />

representing a 32 percent<br />

increase from ₦65.1trillion<br />

recorded in 2016. Within this<br />

period too, online transactions<br />

came up thick, rising by 39.5<br />

percent from ₦132 billion in<br />

2016 to ₦185 billion a year later.<br />

“As such, it was only reasonable<br />

that online retailer,<br />

Konga, join forces with Yudala,<br />

an e-commerce company to<br />

become one of the largest online<br />

and ecommerce firms in<br />

Africa”, Odunsi said, pointing<br />

out however, that Jumia, a<br />

prominent player in Nigeria’s<br />

online retail space saw its adjusted<br />

loss before interest, tax,<br />

depreciation and amortisation<br />

widen to €80.7 million in the<br />

first nine months of 2017 even<br />

though revenues moved up to<br />

€57.3 million.<br />

Infrastructure<br />

Maintenance<br />

With<br />

Tunde Obileye<br />

Importance of key performance indicators in FM<br />

The role of a facilities<br />

manager in determining<br />

a facility’s performance<br />

is dependent on a holistic key<br />

performance indicator (KPI)<br />

approach and this is important<br />

for performance assessment.<br />

There are many KPIs that can be<br />

applied. However, the selected<br />

ones must be fit for purpose and<br />

must be calculated, analyzed and<br />

evaluated to allow for the future<br />

state of the facility to be acceptable<br />

to all stakeholders.<br />

A useful maintenance KPI<br />

drives reliability growth whilst<br />

guiding the choices for improving<br />

maintenance effectiveness<br />

and efficiency. The application<br />

of these KPIs allows the facilities<br />

manager to identify issues<br />

and helps in selecting the right<br />

strategy to support or correct the<br />

activities producing the results.<br />

Maintenance KPIs are of two<br />

types – those that improve maintenance<br />

impact on business<br />

performance and those that drive<br />

reliability. The KPIs assist the<br />

facilities manager to understand<br />

what maintenance is doing, what<br />

it is achieving and what more they<br />

can do to improve operational<br />

performance.<br />

Efficient maintenance is<br />

doing maintenance right so that<br />

higher equipment reliability<br />

and operational risk reductions<br />

are achieved with minimum<br />

resources and time. It is important<br />

that when a variety of maintenance<br />

KPIs is selected, they<br />

improve equipment reliability<br />

and maintenance performance<br />

and not simply indicate that<br />

problems exist.<br />

The facilities manager’s maintenance<br />

plan needs to support<br />

the business objectives and operating<br />

strategy. The best way<br />

to demonstrate this is to have<br />

a maintenance performance<br />

linked to the reasons for the<br />

company’s business. To develop<br />

maintenance KPIs require the<br />

creation of a KPI pathway from<br />

top to bottom which connects<br />

the operational activities with<br />

corporate goals.<br />

This clear connection enables<br />

everyone to see the benefits these<br />

maintenance activities bring to<br />

the built environment. In applying<br />

these KPIs, a facilities manager<br />

is able to identify opportunities<br />

as well as errors. As a result, the<br />

facilities manager in conjunction<br />

with senior management can<br />

correct problems expediently and<br />

take advantage of the opportunities<br />

to reduce cost.<br />

Some FM related<br />

KPIs to consider are:<br />

1)Preventive Maintenance Programme<br />

Compliance: This KPI<br />

gives a clear understanding of<br />

how much time is spent on completing<br />

preventive maintenance<br />

activities rather than constantly<br />

fire-fighting issues. It allows the<br />

facilities manager to recalibrate<br />

the work to become less reactive.<br />

A disciplined PM programme<br />

managed by a competent maintenance<br />

team will produce results<br />

and success may be measured<br />

by a 99 percent PM activities<br />

completed on time. This may be<br />

measured on a monthly basis to<br />

make changes in real time and<br />

reduced cost.<br />

2)Average Time To Complete<br />

Work Order: This helps the facilities<br />

manager to understand<br />

where gaps exist in the processes<br />

if a work order takes more than<br />

reasonable time to complete. For<br />

instance, a job of few hours takes<br />

two days to complete.<br />

It may also be used to determine<br />

skill gap within the maintenance<br />

team if a plumbing issue<br />

takes much longer to fix whilst<br />

an electrical issue is fixed on time.<br />

This KPI may indicate where work<br />

orders are held up in a process.<br />

Improvement can, therefore, be<br />

made.<br />

3)Total Number Of Work<br />

Orders: Tracking the number of<br />

completed work orders in a given<br />

period will assist in determining<br />

the maintenance team’s workload<br />

and overall productivity. It<br />

can also assist in justifying budget<br />

requests where there’s a need to<br />

increase staff strength as a result<br />

of increase in work orders.<br />

KPIs can answer numerous<br />

questions which, in turn, will<br />

make a facilities manager to<br />

continually improve and create<br />

business value. Finally, a facilities<br />

manager can help make facilities<br />

management a key partner in<br />

achieving organizational goals by<br />

knowing which KPIs to consider<br />

and how to relate them to overall<br />

business goals.


Tuesday <strong>21</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

26 BUSINESS DAY<br />

Why Nigeria’s 17m housing units deficit is no longer tenable<br />

…NBRRI sees need to rethink approach to housing<br />

Stories by CHUKA UROKO<br />

Nigeria and<br />

South Africa<br />

are Africa’s largest<br />

economies<br />

that differ significantly<br />

in terms of basic<br />

necessities of life including<br />

power supply and housing<br />

provision. This is why, for<br />

South Africa’s over 20,000<br />

mega watts of electricity, Nigeria<br />

is struggling with 5,000<br />

megawatts, and for the country’s<br />

2-3 million housing deficit,<br />

Nigeria has as high as 17<br />

million units.<br />

The federal mortgage bank<br />

of Nigeria (FMBN), the country’s<br />

apex mortgage, recently<br />

estimated the deficit at 17-20<br />

million units with potential<br />

cost (value) of N6 trillion ($16<br />

billion) and 900,000 annual<br />

unit deficit increase.<br />

But analysts argue that<br />

whether it is 17 million or<br />

20 million or whatever figure,<br />

the deficit as paraded by<br />

government and other housing<br />

sector stakeholders is no<br />

longer tenable, citing population<br />

growth and lack of data<br />

that captures annual housing<br />

deliveries and demolition/<br />

destruction.<br />

Nigeria’s population as<br />

at 2006, when the last headcount<br />

in the country was<br />

conducted, stands at 170 million.<br />

But World Bank’s annual<br />

growth rate estimates<br />

put Nigeria’s at 2.6 percent,<br />

meaning that from 2006 to<br />

date, the country’s population<br />

has increased significantly.<br />

“The 17 million units deficit<br />

is no longer tenable”, the<br />

Nigerian building and roads<br />

research institute (NBRRI)<br />

affirms, quoting findings by<br />

Worldometer, 2017, which<br />

notes that from 2012 to date,<br />

Nigeria’s population has increased<br />

from 168,240,403 to<br />

191,835,936, showing a significant<br />

increase of 23,595,533<br />

people to the population. And<br />

Expectation as Trinity Towers sets for market with innovations, standards in architecture<br />

Expectation is high in<br />

the commercial office<br />

market as more<br />

pipeline developments get<br />

ready to come to the market<br />

to offer new opportunities<br />

and viable options in terms<br />

of quality and variety<br />

One of such developments<br />

is the Trinity Towers<br />

which is getting set for the<br />

market with its new innovations<br />

and standards in<br />

architectural designs.<br />

An ultra modern office<br />

complex located in Oniru,<br />

Victoria Island extension<br />

in Lagos, Trinity Towers<br />

is a flagship project being<br />

promoted by The City of<br />

David, a parish of the Redeemed<br />

Christian Church<br />

that is five years ago.<br />

“The housing deficiency<br />

has, therefore, climbed and is<br />

likely to worsen in the nearest<br />

future if urgent steps are not<br />

taken by the government in<br />

conjunction with all stakeholders<br />

to address the problem”,<br />

Danladi Matawal, DG/<br />

CEO of the institute, said at a<br />

forum in Abuja.<br />

The World Bank in 2013<br />

stated that in order for Nigeria<br />

to keep up with the demand<br />

for housing, 700,000 houses<br />

annually are required to<br />

match growing population<br />

and urban migration but,<br />

according to Chudi Ubosi,<br />

an estate surveyor and valuer,<br />

annual housing delivery<br />

is less than 100,000 units.<br />

Erejuwa Gbadebo, CEO,<br />

International Real Estate<br />

Partnership (IREP), says<br />

Nigeria needs dependable<br />

data on its housing sector.<br />

“One of the biggest problems<br />

that we have is lack of data.<br />

People still quote 17 million<br />

units because there is no other<br />

data to prove or disprove it.<br />

We talk of homes demolished,<br />

burnt or new ones built, but<br />

the question is who is taking<br />

of God (RCCG) and it’s<br />

designed to provide space<br />

for a blend of worship, work<br />

and recreation.<br />

The edifice, which sits<br />

on 10,000 square metres,<br />

will have three towers<br />

each linked together and<br />

separated by corridors. Its<br />

special features include a<br />

helipad, garden terraces,<br />

gymnasium, 5000- seater<br />

auditorium, wellness center,<br />

and parking spaces for<br />

over 650 cars.<br />

Trinity Towers will be<br />

Nigeria’s first three-tower<br />

building, each tower rising<br />

13 floors to give what will<br />

be an integrated family<br />

centre in a neighbourhood<br />

steeped in history, yet at the<br />

record of the number of houses<br />

that are being built and the<br />

ones we are losing?”, Gbadebo<br />

queried in an interview.<br />

One of the first things the<br />

industry should do, she advised,<br />

is to start taking stock<br />

of what is available—what<br />

house-types are there and<br />

what they change hands for.<br />

“There should be a central<br />

system either online or from<br />

bodies such as Nigerian institution<br />

of estate surveyors<br />

and valuers, she said, adding,<br />

“there must be a way of<br />

capturing this data so that<br />

people can have accurate<br />

number so that we should<br />

not continue to fight a battle<br />

we may have won or will<br />

never win”.<br />

Housing data, which is<br />

taken for granted in other<br />

economies including South<br />

Africa, is still a big issue in<br />

Nigeria and that is why foreign<br />

direct investment in the<br />

housing sector, especially in<br />

the residential segment, is still<br />

in fits and starts because there<br />

is virtually nothing to guide<br />

potential investors.<br />

As a part of solutions to the<br />

deficit, Matawal canvasses a<br />

forefront of the future.<br />

Space, light and aesthetics<br />

make it a functional<br />

work of art, and its environmental<br />

credentials are<br />

impeccable with designs<br />

that maximise the use of<br />

natural light and ventilation<br />

with high efficiency<br />

glazing to reduce heat loss<br />

and reflect ultra-violet rays<br />

which will reduce demand<br />

on energy consumption.<br />

“This is a remarkable<br />

project for ITB Nigeria. The<br />

design and scope of the<br />

project with its attendant<br />

structural requirements<br />

speaks to our ability as a<br />

company to deliver excellent<br />

projects that set the<br />

standards for architecture<br />

paradigm shift in approach<br />

to providing housing from a<br />

conventional process base to<br />

more compartmentalised and<br />

adaptable strategies.<br />

“Conscious and timely<br />

efforts are required to adopt<br />

strategies that will significantly<br />

reduce the cost of building<br />

houses and I recommend<br />

the provision of affordable<br />

housing by harnessing and<br />

integrating alternative building<br />

technologies and building<br />

materials to reduce the cost<br />

of building houses in Nigeria”,<br />

he said.<br />

Building houses are highly<br />

capital intensive projects and<br />

a bulk of this capital is gulped<br />

up in procuring building materials<br />

which alone have been<br />

estimated to constitute 60<br />

percent of the construction<br />

cost. According to Matawal,<br />

besides the cost implications<br />

of undertaking high volumes<br />

of construction projects, there<br />

is also the sustainability issue,<br />

hence the need to consider<br />

alternative building materials<br />

and technologies that would<br />

be substitutes or complementary<br />

to conventional building<br />

materials.<br />

in Nigeria. It also reaffirms<br />

our position as leaders in<br />

the construction industry”,<br />

said George Makhoul, project<br />

manager at ITB Nigeria<br />

Limited.<br />

ITB Nigeria, an innovative<br />

construction company<br />

providing full and<br />

advanced integrated engineering<br />

and construction<br />

solutions to both private<br />

and public sectors, is the<br />

contractor on the Trinity<br />

Towers development.<br />

This iconic development<br />

boasts unequaled features<br />

and amenities. It is essentially<br />

a work of art brought<br />

to life with eco-friendly<br />

materials and proper utilization<br />

of natural light and<br />

Economics of concrete roads underpins<br />

need for more govt investment<br />

The economics of concrete<br />

roads pavement<br />

as reflected in their<br />

durability, safety, strength<br />

and cost-effectiveness in<br />

the long run underpins<br />

need for more governments’<br />

investment in that<br />

type of roads infrastructure<br />

provision.<br />

Concrete roads are exceptionally<br />

durable and<br />

mostly maintenancefree<br />

with expected life of<br />

30 - 40 years compared to<br />

2-15 years for bitumen or<br />

asphalt roads. Such roads<br />

are also easier to maintain,<br />

more eco-friendly and more<br />

economical in the long run<br />

as attested to by independent<br />

reports from multilateral<br />

organisations such as<br />

the World Bank.<br />

The need for government<br />

to make the switch to<br />

concrete roads pavement<br />

arises from the pitfalls of<br />

other alternatives which<br />

have very high failure rate<br />

and short lifespan.<br />

Available records show<br />

that Nigeria has the largest<br />

road network in West Africa<br />

and second largest in Sub-<br />

Saharan Africa (SSA). The<br />

total road network in the<br />

country is estimated to be<br />

between 195,000 kilometres<br />

and 198,000 kilometres and<br />

about 2,627 kilometres of<br />

the roads are dualised.<br />

Roads are owned by the<br />

three tiers of government in<br />

the country. Approximately<br />

18 percent is by the federal<br />

government, 16 percent by<br />

the state governments while<br />

66 percent is owned by local<br />

governments. The condition<br />

of these roads are so<br />

poor that only about 35<br />

percent of the network is<br />

motorable.<br />

This is why AG-Dangote<br />

Construction Company<br />

has called on governments<br />

ventilation. “We employed<br />

high efficiency glazing that<br />

reduces heat loss and reflects<br />

ultra-violet rays for<br />

lower energy consumption.<br />

Upon completion, Trinity<br />

Towers will, no doubt, be<br />

the ideal place for business<br />

and relaxation in Victoria<br />

Island”, Makhoul assured.<br />

The entire project is<br />

valued at N2 billion and<br />

it’s positioned to raise the<br />

bar for contemporary office<br />

and relaxation space<br />

in Nigeria. It boasts an interior<br />

that will position it<br />

as a prime residential and<br />

commercial property.<br />

Its 5000-seater concert<br />

hall will have automated<br />

and integrated lighting,<br />

at all levels to invest more<br />

in rigid pavement for road<br />

construction, emphasizing<br />

that concrete roads are<br />

more affordable, durable,<br />

safer and stronger.<br />

Ahmed Mansur, Dangote<br />

Group’s executive director,<br />

stakeholders management<br />

and corporate<br />

communications, made<br />

that call at this year’s Engineering<br />

Assembly of the<br />

Council for the Regulation<br />

of Engineering in Nigeria<br />

(COREN) with the theme,<br />

‘The Nigerian built industry:<br />

Building a sustainable<br />

structure with allied professionals’.<br />

Representative of the<br />

AG-Dangote at the event,<br />

Tunde Jimoh, pointed out,<br />

however, that the pavement<br />

type chosen depended on a<br />

number of factors, including<br />

expected traffic wheel loads,<br />

load repetition, cost of construction,<br />

and maintenance,<br />

among others.<br />

He said the AG Dangote<br />

was constructing the longest<br />

concrete road in the<br />

country located in Kogi<br />

State. The road, known as<br />

Obajana-Kabba Road, is a<br />

43-kilometre concrete road<br />

project due to be commissioned<br />

in December while<br />

another one, the 24km Itori-<br />

Ibese concrete road, has<br />

since been delivered.<br />

Jimoh, who is the company’s<br />

project manager,<br />

said the firm would also be<br />

delivering the concrete dual<br />

carriage Apapa Wharf Road<br />

in Lagos this month.“This<br />

vision of the development<br />

of concrete roads in Africa is<br />

being shared by more leaders<br />

and governments. The<br />

implementation of concrete<br />

roads can revolutionise infrastructural<br />

development<br />

in Nigeria and Africa as a<br />

whole,” he assured.<br />

sound and video system and<br />

state-of-the-art audiovisual<br />

facilities suitable for live<br />

broadcast. There are also<br />

indoor amusements for the<br />

kids, retail facility and cinema<br />

experience for all the<br />

family from the two cinema<br />

halls, recreational theme<br />

park and shopping Centre.<br />

Expectation is that when<br />

this property will be coming<br />

to the market, the economy<br />

should be on its way back to<br />

recovery. Gbenga Olaniyan,<br />

CEO, Estate Links, whose<br />

company is the project’s<br />

leasing agent, believes that<br />

in the next few months the<br />

economy won’t be what it<br />

is today, else Nigeria and<br />

its people will be in trouble.


Tuesday <strong>21</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

C002D5556<br />

BUSINESS DAY<br />

27<br />

FEATURE<br />

What happened to party’s internal democracy?<br />

Political stakeholders and Nigerians have in recent time expressed concern about the eroding internal democracy<br />

in the nation’s political parties, Iniobong Iwok, examines the issue and it implications for the country.<br />

In the recently concluded state<br />

congress of the ruling All Progressives<br />

Congress (APC), one<br />

of the grievances of some members<br />

of the APC in Lagos state<br />

for holding a parallel state congress<br />

was because of the refusal of the party<br />

leadership to give equal opportunity<br />

for all aspirants vying for positions in<br />

the party, imposition of candidates by<br />

the party’s leadership and abuse of the<br />

congress guidelines.<br />

Since the advent of the fourth republic<br />

in 1999, which also marked a<br />

return to democratic rule, after about<br />

fourteen years of military rule, there<br />

has been a return to party politics,<br />

while political parties have become<br />

a platform for politicians to contest<br />

elections in the country.<br />

However, one worrying trend over<br />

the years that has characterised party<br />

politics in the country is the party’s lack<br />

of internal democracy; which can be<br />

seen in the way candidates who becomes<br />

the flag bearer for these political<br />

parties during election are chosen.<br />

This trend often lead to crisis,<br />

distrust among party members; party<br />

structures have been hijacked by political<br />

leaders and state governors who<br />

turn themselves to semi –god, dictating<br />

who occupy a position, while party<br />

members seeking elective positions<br />

must get their support and blessing<br />

before clinching the ticket.<br />

In some cases the governor or few<br />

part leaders, and individuals who are<br />

classified as financials of these parties<br />

are often consulted when important<br />

decisions are to be taken.<br />

For instances , over the last three<br />

years since the APC assumed power,<br />

several state chapters of the party have<br />

been ploughed into internal crisis over<br />

control of party structure mostly by the<br />

governors and some chieftains of the<br />

party often leading to factionalisation<br />

of the party and eventual defection of<br />

the aggrieved members.<br />

Political researcher and Scholar,<br />

Michael Egbosiuba, accused state<br />

governors of hijacking political parties<br />

in the country to perpetuate their<br />

selfish agenda.<br />

“Some of the state governors have<br />

unprecedented sway over their state<br />

party machinery to the point of mandating<br />

the delegates to vote for a particular<br />

candidate. The governors highhanded<br />

approach over their state party<br />

has made it difficult for democracy to<br />

take root at the state and local level.<br />

Some House of Assembly members<br />

who disagrees with their state governors<br />

faces impeachment, suspension<br />

or expulsion from the House.<br />

“Some dissolves Local Government<br />

Areas where the chairman appears<br />

to be too independent even though<br />

they are supposed to be the third tier<br />

of government with separate budget.<br />

All Peoples Democratic Party (PDP)<br />

governors won re-election. Those who<br />

are term limited went as far as hand<br />

picking their successors”.<br />

Political scholar and writer, Michael<br />

Egbosiuba, berated state governors in<br />

the country for personalising and hijacking<br />

political party’s structures to<br />

perpetuate their selfish agenda.<br />

“Some of the state governors have<br />

unprecedented sway over their state<br />

Adams Oshiomhole<br />

party machinery to the point of mandating<br />

the delegates to vote for a particular<br />

candidate. The governors highhanded<br />

approach over their state party<br />

has made it difficult for democracy to<br />

take root at the state and local level.<br />

Some House of Assembly members<br />

who disagrees with their state governors<br />

faces impeachment, suspension<br />

or expulsion from the House.<br />

“Some dissolves Local Government<br />

Areas where the chairman appears<br />

to be too independent even though<br />

they are supposed to be the third tier<br />

of government with separate budget.<br />

All Peoples Democratic Party (PDP)<br />

governors won re-election. Those who<br />

are term limited went as far as hand<br />

picking their successors”.<br />

However, political analysts, Idowu<br />

Omolegan however believe political<br />

parties in the country have always<br />

lacked internal democracy from the<br />

first republic, stressing that it was kind<br />

of politics the early politician encouraged<br />

but had worsen in recent times.<br />

“Internal democracy with in political<br />

parties in Nigeria is nothing to write<br />

home about; I actually think over the<br />

years it has been institutionalised by<br />

our fore-fathers. In those days the likes<br />

of Azikiwe, Awolowo and co, may be<br />

with the exception of some northern<br />

politicians, they often handpicked<br />

those they want in positions. In the<br />

days of UPN if Awolowo wanted anybody<br />

to occupy any position he just<br />

point to who he want.<br />

“If you look at the history of the<br />

country, most of the political parties<br />

in the first republic were controlled<br />

by individuals and leaders, Akintola<br />

and co were in control. So the issue<br />

has been there since the country take<br />

over from the colonial masters. Except<br />

there is a change of approach and<br />

orientation among the political class;<br />

we may not be able to grow with this<br />

kind of politics.<br />

“Look at what happened in Ekiti;<br />

Fayose put his Deputy in office because;<br />

he was the one that would protect<br />

his interest when he leaves office.<br />

In the first republic the Sardauna of<br />

Sokoto choose Tafawa Balewa as the<br />

prime minister of the country against<br />

other people if Tafawa wanted to take<br />

any decision he run to Sardauna for<br />

consultations.<br />

Uche Secondus<br />

“Presently people take about Awoism<br />

what kind of ideology is that? And<br />

that is why you see them moving from<br />

one party to another. What is happening<br />

now is a minus to us. We need to<br />

change if we are to grow.<br />

However, former Deputy Speaker<br />

of the Lagos state House of Assembly<br />

Honourable, Toun Adediran, attributed<br />

greed and lack of contentment<br />

among the political elites for the<br />

scenarios, but stressed that the trend<br />

would change as democracy take it<br />

root in the country.<br />

“Everything depends on self-discipline,<br />

personally, I think a lot of our<br />

politicians are self-centred, they lack<br />

contentment, a lot of them believe everything<br />

should be for me alone, they<br />

are not patient and don’t think of the<br />

masses. That is why you see cross -carpeting<br />

everyday within the system, because<br />

when of you think you are qualify<br />

for a position and rather someone less<br />

qualified is chosen by a god-father; you<br />

would want to defect and go to a place<br />

where you are appreciated.<br />

“Thing are changing and would<br />

change as democracy take it root in the<br />

country. You saw what happened in<br />

the recent Ekiti governorship election,<br />

and now we have Osun governorship<br />

election coming soon, that is why the<br />

National chairman of the party have<br />

directed that we have an open system<br />

for the governorship primaries.<br />

“This is how things would change<br />

in the party; I think it would change<br />

gradually. But when you start favouring<br />

some people, they would say let us<br />

move to another party that is why we<br />

are having many political parties some<br />

of them should merge”.<br />

Also Lagos state chairman of the Alliance<br />

for Democracy (AD), and chairman<br />

of inter party alliance (IPAC), Kola<br />

Ajayi, attributed the increasing lack of<br />

democracy within political parties in<br />

the country, stressing that it had contributed<br />

to poor governance and make<br />

elected public office holders arrogant.<br />

“The internal democracy may not<br />

be there as you think, but we have it in<br />

the smaller parties; it is in our smaller<br />

parties, the major parties may not have<br />

it; if you complain they may hold the<br />

primaries and manipulate it to favour<br />

their loyalist”.<br />

“The trend portends danger, the<br />

future of the country look bleak,<br />

because it is through the parties that<br />

leaders that govern the country are<br />

emerge from. That is why a lot of them<br />

are misbehaving after winning election<br />

and assuming office; because they<br />

think they can only be answerable and<br />

loyal to the god-fathers only”<br />

Political scholar and writer, Michael<br />

Egbosiuba, berated state governors in<br />

the country for personalising and hijacking<br />

political party’s structures to<br />

perpetuate their selfish agenda.<br />

“Some of the state governors have<br />

unprecedented sway over their state<br />

party machinery to the point of mandating<br />

the delegates to vote for a particular<br />

candidate. The governors highhanded<br />

approach over their state party<br />

has made it difficult for democracy to<br />

take root at the state and local level.<br />

Some House of Assembly members<br />

who disagrees with their state governors<br />

faces impeachment, suspension<br />

or expulsion from the House.<br />

“Some dissolves Local Government<br />

Areas where the chairman appears<br />

to be too independent even though<br />

they are supposed to be the third tier<br />

of government with separate budget.<br />

All Peoples Democratic Party (PDP)<br />

governors won re-election. Those who<br />

are term limited went as far as hand<br />

picking their successors”.<br />

However, political analysts, Idowu<br />

Omolegan however believe political<br />

parties in the country have always<br />

lacked internal democracy form the<br />

first republic, stressing that it was kind<br />

of politics the early politician but had<br />

worsen.<br />

“Internal democracy with in political<br />

parties in Nigeria is nothing to write<br />

home about; I actually think over the<br />

years it has been institutionalised by<br />

our fore-fathers. In those days the likes<br />

of Azikiwe, Awolowo and co, may be<br />

with the exception of some northern<br />

politicians, they often handpicked<br />

those they want in positions. In the<br />

days of UPN if Awolowo wanted anybody<br />

to occupy any position he just<br />

point to who he want.<br />

“If you look at the history of the<br />

country, most of the political parties<br />

in the first republic were controlled<br />

by individuals and leaders, Akintola<br />

and co were in control. So the issue<br />

has been there since the country take<br />

over from the colonial masters. Except<br />

there is a change of approach and<br />

orientation among the political class;<br />

we may not be able to grow with this<br />

kind of politics.<br />

“Look at what happened in Ekiti;<br />

Fayose put his Deputy in office because;<br />

he was the one that would protect<br />

his interest when he leaves office.<br />

In the first republic the Sadauna of<br />

Sokoto choose Tafawa Balewa as the<br />

prime minister of the country against<br />

other people if Tafawa wanted to take<br />

any decision he run to Sadaruna for<br />

consultations.<br />

“Presently people take about Awoism<br />

what kind of ideology is that? And<br />

that is why you see them moving from<br />

one party to another. What is happening<br />

now is a minus to us. We need to<br />

change if we are to grow.<br />

However, former Deputy Speaker<br />

of the Lagos state House of Assembly<br />

Honourable, Toun Adediran,<br />

attributed greed and lack of contentment<br />

among the political elite for the<br />

scenarios, but stressed that the trend<br />

would change as democracy take it<br />

root in the country.<br />

“Everything depends on self-discipline,<br />

personally I think a lot of our<br />

politicians are self-centred, they lack<br />

contentment, a lot of them believe everything<br />

should be for me alone, they<br />

are not patient and don’t think of the<br />

masses. That is why you see cross -carpeting<br />

everyday within the system, because<br />

when of you think you are qualify<br />

for a position and rather someone less<br />

qualifies is chosen by a godfather; you<br />

would want to leave and go to a place<br />

where you are appreciated.<br />

“Thing are changing and would<br />

change as democracy take it root in the<br />

country. You saw what happened in<br />

the recent Ekiti governorship election,<br />

and now we have Osun governorship<br />

election coming soon, that is why the<br />

National chairman of the party have<br />

directed that we have an open system<br />

for the governorship primaries.<br />

“This is how things would change<br />

in the party; I think it would change<br />

gradually. But when you start favouring<br />

some people, they would say let us<br />

move to another party that is why we<br />

are having many political parties some<br />

of them should merge”.<br />

Also Lagos state chairman of the Alliance<br />

for Democracy (AD), and chairman<br />

of inter party alliance (IPAC), Kola<br />

Ajayi, attributed the increasing lack of<br />

democracy within political parties in<br />

the country, stressing that it had contributed<br />

to poor governance and make<br />

elected public office holders arrogant.<br />

“The internal democracy may not<br />

be there as you think, but we have it in<br />

the smaller parties; it is in our smaller<br />

parties, the major parties may not have<br />

it; if you complain they may hold the<br />

primaries and manipulate it to favour<br />

their loyalist”.<br />

“The trend portends danger, the<br />

future of the country look bleak,<br />

because it is through the parties<br />

that leaders that govern the country<br />

are emerge from. That is why a lot<br />

of them are misbehaving after winning<br />

election and assuming office;<br />

because they think they can only<br />

be answerable and loyal to the godfathers<br />

only”


Tuesday <strong>21</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

28 BUSINESS DAY<br />

C002D5556<br />

BD<br />

Markets + Finance<br />

‘Providing proprietary research, commentary, analysis and financial news coverage unmatched in<br />

today’s market. Published weekly, Markets & Finance provides all the key intelligence you need.’<br />

FBN Holdings Plc: Profit growth driven by<br />

increase in non-interest income<br />

BALA AUGIE<br />

First Bank Nigeria<br />

(FBN) Holdings<br />

Plc just released<br />

its half year ended<br />

June 30th <strong>2018</strong> financial<br />

results that showed<br />

improvement in key ratio<br />

as the lender is gradually<br />

surmounting the headwinds<br />

caused by an economic<br />

downturn of 2016.<br />

For example, there have<br />

been remarkable improvements<br />

in asset quality as non<br />

performing loans (NPLs)<br />

and impairment on financial<br />

assets dropped, thanks to an<br />

excellent risk management<br />

strategy.<br />

Electronic banking was<br />

also a major driver of revenue<br />

growth as FirstBank opened a<br />

digital laboratory as part of its<br />

strategy to drive innovation<br />

in the digital banking space.<br />

The stellar performance<br />

means shareholders will<br />

drink from wine poured from<br />

a flagon into a golden goblet<br />

as the company’s consistent<br />

earnings growth in 2918 will<br />

result in share appreciation,<br />

hence magnifying earnings.<br />

Growth in non interest<br />

income underpins revenue<br />

For the first six months<br />

through June <strong>2018</strong>, gross<br />

earnings grew by 1.60 percent<br />

to N293 billion from N288.8<br />

billion as at June 2017; driven<br />

by a <strong>21</strong>.40 percent growth in<br />

non interest income.<br />

On the other hand, interest<br />

income declined by 3 percent<br />

to N225.40 billion in June<br />

<strong>2018</strong> from N232.37 billion the<br />

previous year. The drop was<br />

due to declining yields on<br />

investment securities as short<br />

term government securities<br />

have fallen to around 11 percent<br />

and 13 percent from an<br />

all time high of between 18<br />

percent and 22 peecent in the<br />

most part of 2017.<br />

Noninterest income (NII)<br />

rose by <strong>21</strong>.4 percent year on<br />

year (y-o-y) to close at N61.3<br />

billion as at June <strong>2018</strong>.<br />

Adesola Kazeem Adeduntan, managing director,<br />

CEO, FBN Holdings Plc<br />

The primary drivers were<br />

improved revenue from electronic<br />

banking fees (+40.8<br />

percent), accounts maintenance<br />

(+40.7 percent), net<br />

insurance premium (+9.8<br />

percent) as well as foreign<br />

exchange income (+158.5<br />

percent).<br />

Fees and commission income<br />

(F&C) grew by 13.3<br />

percent y-o-y to N41.7 billion<br />

in June <strong>2018</strong> from N36.80 billion<br />

the previous year.<br />

Excluding FX revaluation<br />

gain, non interest income<br />

was up by 15 percent y-o-y<br />

indicating the underlying<br />

revenue generating capacity<br />

and reflecting the results of<br />

the ongoing digital banking<br />

initiatives.<br />

Fx gains, growth in E<br />

banking underpins profit<br />

Profit before tax increased<br />

by 14 percent to N38.90 billion<br />

in June <strong>2018</strong> from N35.60<br />

billion as at June 2017. Profit<br />

after tax increased by 22.70<br />

percent to N33.50 billion in<br />

June 2o18 as against N29.50<br />

billion as at June 2017.<br />

The growth in profit was<br />

largely driven by a reduction<br />

impairment charge and<br />

gains from foreign exchange<br />

transaction.<br />

Total operating expenses<br />

increased by 2.30 percent<br />

to N119.30 billion as at June<br />

<strong>2018</strong>, which is lower than<br />

the headline inflation rate of<br />

11.20 percent.<br />

Net interest margins decreased<br />

to 7.10 percent in<br />

the period under review from<br />

8.50 percent as June 2017 on<br />

the back of drop in short term<br />

government securities.<br />

Improvement in key<br />

profitability ratio<br />

FBN Holdings Plc has utilized<br />

the resources of shareholders<br />

in generating higher<br />

profit as return on average<br />

equity (ROE) increased to<br />

10.0 percent in June <strong>2018</strong><br />

from 9.90 percent the previous<br />

year.<br />

Similarly, return on average<br />

assets moved to 1.30 percent<br />

to N1.30 billion in June<br />

<strong>2018</strong> as against 1.2 percent as<br />

at June 2017.<br />

Excellent risk management<br />

strategy pays off as<br />

asset quality improves<br />

The lenders, nonperforming<br />

loans (NPLs) to gross<br />

loans reduced to 20.80 percent<br />

in June <strong>2018</strong> from 22.0<br />

percent as at June 2017,<br />

thanks to strong recovery<br />

and mediation.<br />

Nonperforming loans fell<br />

to N455.80 billion in June<br />

<strong>2018</strong> from N520.0 billion in<br />

the previous year.<br />

There has been improvement<br />

in loan book as impairment<br />

charges on financial<br />

charges reduced by 52.80<br />

percent to N52.80 billion in<br />

June <strong>2018</strong> as against N62.40<br />

billion the previous year.<br />

Cost of risk declined to 4.7<br />

percent in June <strong>2018</strong> from 5.5<br />

percent June 2017.<br />

Net gross loans and advances<br />

declined by 7.10 percent<br />

to N1.85 trillion in June<br />

<strong>2018</strong> from N2.0 trillion as at<br />

June 2017;<br />

The reduction in loans was<br />

due to moderated risk asset<br />

creation and pay down on<br />

existing facilities •<br />

98 percent of the Group<br />

loans and advances is accounted<br />

for by the Commercial<br />

Banking business, while<br />

the balance of 2% is from the<br />

Merchant Banking and Asset<br />

Management business •<br />

Deposits from customers<br />

were up 4.10 percent to N3.20<br />

trillion in the period under<br />

review from N3.10 trillion as<br />

at June 2017.<br />

“The Commercial Banking<br />

Group reported a relatively<br />

strong set of results<br />

and I am pleased to report<br />

consistent improvement towards<br />

our strategic objectives.<br />

This is reflected in a strong<br />

28.5% y-o-y increase in noninterest<br />

income, 15.5% y-o-y<br />

reduction in the impairment<br />

charge and a marginal increase<br />

of 0.9% y-o-y in operating<br />

expenses, despite the high<br />

inflationary environment. It<br />

is clear that our efforts to enhance<br />

our revenue generating<br />

capabilities, strengthen the<br />

risk management and control<br />

environment as well as to<br />

optimise efficiencies within<br />

our business are paying off,”<br />

said Adesola Adeduntan, the<br />

MD/CEO of FirstBank and its<br />

Subsidiaries.<br />

“We remain focused on<br />

maximizing the potential of<br />

our business, innovating to<br />

expand access to new markets<br />

and increasing the contribution<br />

of our international subsidiaries,<br />

using technology<br />

as a key enabler. We expect<br />

further improvements in the<br />

coming periods, from growth<br />

in the quality and yields of<br />

the loan book to enhanced<br />

remediation efforts, service<br />

delivery excellence and the<br />

risk and control environment.<br />

I am confident in the capacity<br />

of our business to deliver the<br />

expected results,” summed<br />

Adeduntan.<br />

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


Tuesday <strong>21</strong> <strong>Aug</strong>ust <strong>2018</strong> C002D5556 BUSINESS DAY 29


Tuesday <strong>21</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

30 BUSINESS DAY<br />

C002D5556<br />

Live @ the Stock exchange<br />

Prices for Securities Traded as of Monday 20 <strong>Aug</strong>ust <strong>2018</strong><br />

Company<br />

Company<br />

Market cap(nm) Price (N) Change Trades Volume Market cap(nm) Price (N) Change Trades Volume<br />

PRICES FOR MAIN BOARD SECURITIES (Equities)<br />

BANKING<br />

ACCESS BANK PLC. 274,815.73 9.50 -1.04 159 32,685,162<br />

UNITED BANK FOR AFRICA PLC 278,725.28 8.15 -2.40 359 42,720,793<br />

ZENITH INTERNATIONAL BANK PLC 686,013.39 <strong>21</strong>.85 -3.10 374 36,664,571<br />

892 112,070,526<br />

OTHER FINANCIAL INSTITUTIONS<br />

FBN HOLDINGS PLC 344,594.81 9.60 -2.04 233 15,581,441<br />

233 15,581,441<br />

1,125 127,651,967<br />

BUILDING MATERIALS<br />

DANGOTE CEMENT PLC 3,663,709.09 <strong>21</strong>5.00 4.32 86 1,147,239<br />

LAFARGE AFRICA PLC. 241,1<strong>21</strong>.31 27.80 - 15 26,678<br />

101 1,173,917<br />

101 1,173,917<br />

EXPLORATION AND PRODUCTION<br />

SEPLAT PETROLEUM DEVELOPMENT COMPANY LTD 382,488.96 650.00 - 13 3,513<br />

13 3,513<br />

13 3,513<br />

1,239 128,829,397<br />

CROP PRODUCTION<br />

FTN COCOA PROCESSORS PLC 440.00 0.20 - 0 0<br />

OKOMU OIL PALM PLC. 71,113.99 74.55 - 19 4,927<br />

PRESCO PLC 60,000.00 60.00 - 14 8,194<br />

33 13,1<strong>21</strong><br />

FISHING/HUNTING/TRAPPING<br />

ELLAH LAKES PLC. 511.20 4.26 - 0 0<br />

0 0<br />

LIVESTOCK/ANIMAL SPECIALTIES<br />

LIVESTOCK FEEDS PLC. 1,830.00 0.61 - 2 10,100<br />

2 10,100<br />

35 23,2<strong>21</strong><br />

DIVERSIFIED INDUSTRIES<br />

A.G. LEVENTIS NIGERIA PLC. 1,164.81 0.44 - 4 7,432<br />

JOHN HOLT PLC. 225.71 0.58 - 7 46,686<br />

S C O A NIG. PLC. 2,111.93 3.25 - 0 0<br />

TRANSNATIONAL CORPORATION OF NIGERIA PLC 45,525.75 1.12 -2.61 67 3,749,757<br />

U A C N PLC. 36,304.34 12.60 - 34 189,048<br />

112 3,992,923<br />

112 3,992,923<br />

BUILDING CONSTRUCTION<br />

ARBICO PLC. 711.32 4.79 - 0 0<br />

0 0<br />

INFRASTRUCTURE/HEAVY CONSTRUCTION<br />

JULIUS BERGER NIG. PLC. 33,000.00 25.00 - 14 34,975<br />

ROADS NIG PLC. 165.00 6.60 - 0 0<br />

14 34,975<br />

REAL ESTATE DEVELOPMENT<br />

UACN PROPERTY DEVELOPMENT CO. LIMITED 4,079.48 1.57 -8.19 14 668,896<br />

14 668,896<br />

REAL ESTATE INVESTMENT TRUSTS (REITS)<br />

SKYE SHELTER FUND PLC 1,900.00 95.00 - 0 0<br />

UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 11,300.89 45.20 - 0 0<br />

UPDC REAL ESTATE INVESTMENT TRUST 24,014.43 9.00 - 1 300<br />

1 300<br />

29 704,171<br />

AUTOMOBILES/AUTO PARTS<br />

DN TYRE & RUBBER PLC 954.53 0.20 - 0 0<br />

0 0<br />

BEVERAGES--BREWERS/DISTILLERS<br />

CHAMPION BREW. PLC. 14,406.27 1.84 - 5 13,840<br />

GOLDEN GUINEA BREW. PLC. 242.22 0.89 - 1 35,944<br />

GUINNESS NIG PLC 197,134.45 90.00 - <strong>21</strong> 131,079<br />

INTERNATIONAL BREWERIES PLC. 302,574.34 35.20 - 19 56,458<br />

NIGERIAN BREW. PLC. 799,690.<strong>21</strong> 100.00 -2.91 65 1,998,911<br />

111 2,236,232<br />

FOOD PRODUCTS<br />

DANGOTE FLOUR MILLS PLC 38,500.00 7.70 - 31 225,509<br />

DANGOTE SUGAR REFINERY PLC 177,600.00 14.80 -1.35 57 954,454<br />

FLOUR MILLS NIG. PLC. 88,158.16 <strong>21</strong>.50 -2.27 36 561,266<br />

HONEYWELL FLOUR MILL PLC 11,578.09 1.46 -7.59 28 1,180,725<br />

MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 1 500<br />

N NIG. FLOUR MILLS PLC. 1,158.30 6.50 - 1 279<br />

NASCON ALLIED INDUSTRIES PLC 52,988.77 20.00 - 19 320,938<br />

UNION DICON SALT PLC. 3,676.41 13.45 - 0 0<br />

173 3,243,671<br />

FOOD PRODUCTS--DIVERSIFIED<br />

CADBURY NIGERIA PLC. 18,969.84 10.10 1.00 15 355,592<br />

NESTLE NIGERIA PLC. 1,188,984.38 1,500.00 - 15 111,100<br />

30 466,692<br />

HOUSEHOLD DURABLES<br />

NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0<br />

VITAFOAM NIG PLC. 3,377.28 3.24 - 3 2,278<br />

3 2,278<br />

PERSONAL/HOUSEHOLD PRODUCTS<br />

P Z CUSSONS NIGERIA PLC. 51,814.73 13.05 -7.12 32 193,443<br />

UNILEVER NIGERIA PLC. 301,612.78 52.50 -4.55 34 322,127<br />

66 515,570<br />

383 6,464,443<br />

BANKING<br />

DIAMOND BANK PLC 25,708.03 1.11 1.83 63 4,104,629<br />

ECOBANK TRANSNATIONAL INCORPORATED 376,165.80 20.50 -2.61 63 2,707,180<br />

FIDELITY BANK PLC 46,939.17 1.62 -2.41 65 3,178,892<br />

GUARANTY TRUST BANK PLC. 1,087,482.07 36.95 -2.76 199 15,398,087<br />

JAIZ BANK PLC 15,616.05 0.53 -1.85 13 534,137<br />

SKYE BANK PLC 6,940.15 0.50 4.17 56 18,319,528<br />

STERLING BANK PLC. 37,427.54 1.30 3.17 22 3,349,572<br />

UNION BANK NIG.PLC. 161,620.18 5.55 - 26 293,685<br />

UNITY BANK PLC 9,234.58 0.79 -2.47 23 1,682,115<br />

WEMA BANK PLC. 25,073.40 0.65 - 15 80,645<br />

545 49,648,470<br />

INSURANCE CARRIERS, BROKERS AND SERVICES<br />

AFRICAN ALLIANCE INSURANCE COMPANY PLC 4,117.00 0.20 - 0 0<br />

AIICO INSURANCE PLC. 4,851.14 0.70 2.94 24 3,335,155<br />

AXAMANSARD INSURANCE PLC 26,775.00 2.55 - 9 137,898<br />

CONSOLIDATED HALLMARK INSURANCE PLC 2,100.00 0.30 - 2 500,000<br />

CONTINENTAL REINSURANCE PLC 14,5<strong>21</strong>.84 1.40 - 4 354,500<br />

CORNERSTONE INSURANCE COMPANY PLC. 3,387.79 0.23 - 6 73,265<br />

GOLDLINK INSURANCE PLC 2,411.47 0.53 - 0 0<br />

GREAT NIGERIAN INSURANCE PLC 1,913.74 0.50 - 0 0<br />

GUINEA INSURANCE PLC. 2,149.00 0.35 - 0 0<br />

INTERNATIONAL ENERGY INSURANCE COMPANY PLC 539.32 0.42 - 0 0<br />

LASACO ASSURANCE PLC. 2,343.50 0.32 3.23 7 250,710<br />

LAW UNION AND ROCK INS. PLC. 3,480.03 0.81 - 0 0<br />

LINKAGE ASSURANCE PLC 5,920.00 0.74 - 2 103,000<br />

MUTUAL BENEFITS ASSURANCE PLC. 2,400.00 0.30 - 6 199,018<br />

N.E.M INSURANCE CO (NIG) PLC. 15,049.43 2.85 - 15 456,734<br />

NIGER INSURANCE CO. PLC. 3,095.79 0.40 - 2 500,085<br />

PRESTIGE ASSURANCE CO. PLC. 2,175.92 0.57 - 1 1,000<br />

REGENCY ALLIANCE INSURANCE COMPANY PLC 1,600.50 0.24 4.35 5 1,602,173<br />

SOVEREIGN TRUST INSURANCE PLC 2,168.61 0.26 -3.85 13 997,100<br />

STANDARD ALLIANCE INSURANCE PLC. 5,422.63 0.42 - 0 0<br />

STANDARD TRUST ASSURANCE PLC 4,483.72 0.48 - 0 0<br />

SUNU ASSURANCES NIGERIA PLC. 2,800.00 0.20 - 1 50,<strong>21</strong>6<br />

UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 1 140<br />

UNIVERSAL INSURANCE COMPANY PLC 7,040.00 0.44 - 0 0<br />

VERITAS KAPITAL ASSURANCE PLC 3,605.33 0.26 - 0 0<br />

WAPIC INSURANCE PLC 4,550.13 0.34 -2.86 77 10,363,046<br />

175 18,924,040<br />

MICRO-FINANCE BANKS<br />

FORTIS MICROFINANCE BANK PLC 11,799.67 2.58 - 0 0<br />

NPF MICROFINANCE BANK PLC 3,658.62 1.60 - 11 622,000<br />

11 622,000<br />

MORTGAGE CARRIERS, BROKERS AND SERVICES<br />

ABBEY MORTGAGE BANK PLC 4,914.00 1.17 - 1 1,170<br />

ASO SAVINGS AND LOANS PLC 7,370.87 0.50 - 0 0<br />

INFINITY TRUST MORTGAGE BANK PLC 5,922.05 1.42 - 0 0<br />

RESORT SAVINGS & LOANS PLC 5,664.87 0.50 - 0 0<br />

UNION HOMES SAVINGS AND LOANS PLC. 2,949.22 3.02 - 0 0<br />

1 1,170<br />

OTHER FINANCIAL INSTITUTIONS<br />

AFRICA PRUDENTIAL PLC 8,100.00 4.05 - 31 368,328<br />

CUSTODIAN INVESTMENT PLC 30,762.15 5.23 - 10 13,742<br />

DEAP CAPITAL MANAGEMENT & TRUST PLC 660.00 0.44 - 0 0<br />

FCMB GROUP PLC. 35,644.88 1.80 5.88 38 775,089<br />

NIGERIA ENERYGY SECTOR FUND 411.91 552.20 - 0 0<br />

ROYAL EXCHANGE PLC. 1,389.25 0.27 - 1 1,000<br />

STANBIC IBTC HOLDINGS PLC 508,717.82 50.30 0.50 23 1,888,281<br />

UNITED CAPITAL PLC 16,920.00 2.82 -6.62 78 1,740,085<br />

ValuAlliance Value Fund 3,312.39 103.20 - 0 0<br />

181 4,786,525<br />

913 73,982,205<br />

HEALTHCARE PROVIDERS<br />

EKOCORP PLC. 1,680.29 3.37 - 0 0<br />

UNION DIAGNOSTIC & CLINICAL SERVICES PLC 1,030.41 0.29 - 3 104,000<br />

3 104,000<br />

MEDICAL SUPPLIES<br />

MORISON INDUSTRIES PLC. 544.04 0.55 - 0 0<br />

0 0<br />

PHARMACEUTICALS<br />

EVANS MEDICAL PLC. 366.17 0.50 - 0 0<br />

FIDSON HEALTHCARE PLC 9,225.00 6.15 - 2 5,700<br />

GLAXO SMITHKLINE CONSUMER NIG. PLC. 18,296.91 15.30 - <strong>21</strong> 133,755<br />

MAY & BAKER NIGERIA PLC. 2,234.40 2.28 - 13 188,787<br />

NEIMETH INTERNATIONAL PHARMACEUTICALS PLC 1,035.90 0.60 - 4 20,<strong>21</strong>5<br />

NIGERIA-GERMAN CHEMICALS PLC. 556.71 3.62 - 0 0<br />

PHARMA-DEKO PLC. 411.96 1.90 - 0 0<br />

40 348,457<br />

43 452,457<br />

COMPUTER BASED SYSTEMS<br />

COURTEVILLE BUSINESS SOLUTIONS PLC 710.40 0.20 - 0 0<br />

0 0<br />

COMPUTERS AND PERIPHERALS<br />

OMATEK VENTURES PLC 1,470.89 0.50 - 0 0<br />

0 0<br />

IT SERVICES<br />

CWG PLC 6,413.06 2.54 - 0 0<br />

NCR (NIGERIA) PLC. 680.40 6.30 - 2 598<br />

TRIPPLE GEE AND COMPANY PLC. 435.56 0.88 - 1 1,000<br />

3 1,598<br />

PROCESSING SYSTEMS<br />

CHAMS PLC 1,596.66 0.34 - 0 0<br />

E-TRANZACT INTERNATIONAL PLC 16,590.00 3.95 - 0 0<br />

0 0<br />

3 1,598<br />

BUILDING MATERIALS<br />

BERGER PAINTS PLC 1,898.34 6.55 - 6 28,580<br />

CAP PLC 19,845.00 28.35 - 4 3,015<br />

CEMENT CO. OF NORTH.NIG. PLC 38,831.34 30.90 - 0 0<br />

FIRST ALUMINIUM NIGERIA PLC 844.14 0.40 - 0 0<br />

MEYER PLC. 361.24 0.68 - 0 0<br />

PORTLAND PAINTS & PRODUCTS NIGERIA PLC 1,959.74 2.47 - 0 0<br />

PREMIER PAINTS PLC. 1,279.20 10.40 - 0 0<br />

10 31,595<br />

ELECTRONIC AND ELECTRICAL PRODUCTS<br />

AUSTIN LAZ & COMPANY PLC 2,256.91 2.09 - 0 0<br />

CUTIX PLC. 3,681.16 4.18 - 11 124,785<br />

11 124,785<br />

PACKAGING/CONTAINERS<br />

BETA GLASS PLC. 38,997.82 78.00 - 4 1,509<br />

GREIF NIGERIA PLC 388.02 9.10 - 0 0<br />

4 1,509<br />

AGRO-ALLIED & CHEMICALS<br />

NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 3 1,000,500<br />

3 1,000,500<br />

28 1,158,389<br />

CHEMICALS<br />

B.O.C. GASES PLC. 1,752.39 4.<strong>21</strong> - 1 5,400<br />

1 5,400<br />

METALS<br />

ALUMINIUM EXTRUSION IND. PLC. 1,803.64 8.20 - 0 0<br />

0 0<br />

MINING SERVICES<br />

MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 0 0<br />

0 0<br />

PAPER/FOREST PRODUCTS<br />

THOMAS WYATT NIG. PLC. 57.20 0.26 - 4 9,033<br />

4 9,033<br />

5 14,433<br />

ENERGY EQUIPMENT AND SERVICES<br />

JAPAUL OIL & MARITIME SERVICES PLC 1,628.30 0.26 -7.14 20 712,453<br />

20 712,453<br />

INTEGRATED OIL AND GAS SERVICES<br />

OANDO PLC 59,049.<strong>21</strong> 4.75 -3.06 76 1,068,449<br />

76 1,068,449<br />

PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS<br />

11 PLC 64,907.15 180.00 - 5 2,266<br />

CONOIL PLC 16,863.04 24.30 - 7 11,869<br />

ETERNA PLC. 8,<strong>21</strong>6.11 6.30 - 24 431,838<br />

FORTE OIL PLC. 29,957.07 23.00 -0.65 34 427,425<br />

MRS OIL NIGERIA PLC. 8,701.65 28.55 - 1 15<br />

TOTAL NIGERIA PLC. 62,132.50 183.00 - 10 5,472<br />

81 878,885<br />

177 2,659,787<br />

ADVERTISING<br />

AFROMEDIA PLC 2,<strong>21</strong>9.52 0.50 - 0 0<br />

0 0<br />

AIRLINES<br />

MEDVIEW AIRLINE PLC 18,818.75 1.93 - 0 0<br />

0 0<br />

AUTOMOBILE/AUTO PART RETAILERS<br />

R T BRISCOE PLC. 541.12 0.46 - 0 0<br />

0 0<br />

COURIER/FREIGHT/DELIVERY<br />

RED STAR EXPRESS PLC 3,360.13 5.70 - 0 0<br />

TRANS-NATIONWIDE EXPRESS PLC. 365.70 0.78 - 0 0<br />

0 0<br />

HOSPITALITY<br />

TANTALIZERS PLC 674.44 0.<strong>21</strong> - 0 0<br />

0 0<br />

HOTELS/LODGING<br />

CAPITAL HOTEL PLC 4,801.22 3.10 - 0 0<br />

IKEJA HOTEL PLC 5,799.84 2.79 - 5 201,200<br />

TOURIST COMPANY OF NIGERIA PLC. 7,862.53 3.50 - 0 0<br />

TRANSCORP HOTELS PLC 51,302.73 6.75 - 1 600<br />

6 201,800<br />

MEDIA/ENTERTAINMENT<br />

DAAR COMMUNICATIONS PLC 5,280.00 0.44 - 0 0<br />

0 0<br />

PRINTING/PUBLISHING<br />

ACADEMY PRESS PLC. 302.40 0.50 - 0 0<br />

LEARN AFRICA PLC 864.02 1.12 - 3 57,000


Tuesday <strong>21</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

BUSINESS DAY<br />

31


32 BUSINESS DAY<br />

Tuesday <strong>21</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

STRATEGYBRIEFING<br />

IDEAS THAT POWER High PERFORMANCE<br />

How to make your strategy work:<br />

Why 90% of strategies fail and what you can do about it<br />

BRIAN REUBEN<br />

Marketing forklore has it that<br />

years ago a new manager<br />

took over Parker Pens. His<br />

first action was to assemble<br />

the management board<br />

and ask them a very simple question: who<br />

is our major competitor?<br />

One by one the board members began<br />

to educate the boss with what they thought<br />

the answer was. One answered Shaeffer,<br />

since Schaeffer was in the ball pen business<br />

as they were. The boss shook his head, it was<br />

not Schaeffer. Shaeffer produced a pen very<br />

similar to the Parker. It had a good reputation<br />

for quality, had a similar stylish finish<br />

and quite expensive like Parker. The boss<br />

explained that although they compete to<br />

an extent with Shaeffer, they were not their<br />

main competitor.<br />

Another stepped forward and offered his<br />

opinion, ‘it is Biro’. Although Biro Swan was<br />

not marketing at the top of the market like<br />

Parker, this person thought that they both<br />

served the same purpose, which is writing<br />

and that way can be seen as their direct<br />

competitor. So now the market definition<br />

has now moved from quality fountain pens<br />

to writing implements. Under this consideration<br />

makers of pencils might also be<br />

considered as part of the competition. The<br />

new director was impressed. His people<br />

were beginning to think out of the box. But,<br />

no, Biro Swan was not.<br />

The board members became confused.<br />

One look at another. Minutes passed, the<br />

room was filled with much silence you could<br />

hear a pin drop. Another man summoned<br />

courage and stood up. Every eye was set<br />

on him. ‘Its the telephone! We are in the<br />

communication business. The telephone is<br />

fast gaining more wide spread use in recent<br />

years. People can either write with their<br />

pen or make a call.’ Everyone nodded, this<br />

must be it.<br />

The director looked up and smiled, apparently<br />

happy that his people were making<br />

use of their mind. Under this new model,<br />

typewriters and word processors form part<br />

of the competition. But again, it was not the<br />

telephone.<br />

Then the director offered his view of who<br />

their major competitor is. His answer will<br />

shock you. It was Ronson cigarette lighter!<br />

His explanation was that Parker was in the<br />

quality gift business rather than writing implement<br />

business. An analysis of the Parker<br />

sales revealed that people purchased the<br />

pens primarily as gift to other people.When<br />

they considered what to buy often a major<br />

alternative was a quality cigarette lighter and<br />

hence the definition of the market.<br />

The definition was the controlling factor<br />

in everything Parker did and how they did<br />

it. Packaging assumes a more important<br />

role, as does the development and maintenance<br />

of a superior quality image. Price<br />

is perhaps less important than might have<br />

been thought under alternative market<br />

definitions. Distribution (through the outlets<br />

where potential customers buy gifts) also<br />

becomes more important.<br />

The most important element of a marketing<br />

strategy is the definition of the market<br />

in which a business is. If you miss this, your<br />

business is going to be a matter of trial<br />

and error. There are three basic question<br />

every business leader must find the accurate<br />

answers to if strategy must be done right.<br />

The first one is who are we? What defines<br />

us? What do we call ourselves? This is the<br />

starting point. Clearly all high performing<br />

businesses have an accurate definition of<br />

themselves. It is the purpose of your business<br />

that defines your business. First you have to<br />

understand what business you are into and<br />

why you are in that business. This purpose<br />

is what is called mission, often summarized<br />

in a mission statement.<br />

But the mission itself is defined by the<br />

business you are into in the first place. The<br />

definition of the business you are in is what<br />

defines your whole strategic direction. You<br />

have to get this right if you are going to build<br />

a high performing business. The clearer your<br />

view of what business you are in, the wider<br />

your chances of building that business into<br />

a global giant.<br />

Consider Google(now officially Alphabet),<br />

in the beginning they set out to<br />

‘organize the world’s information and make<br />

it universally assessable.’ By this difinition<br />

Google could not consider Yahoo, Ask or<br />

AOL as its major competitor. They did not<br />

define themselves a search company and<br />

that has seen them go from the core search<br />

business to the android operating system<br />

to nascent businesses like self-driving cars.<br />

That also defined how they pursued their<br />

mission which is what is called strategy.<br />

In all situations and under all circumstances<br />

in any environment, any business<br />

can thrive. When businesses fail, its an<br />

indication that the leaders of that business<br />

have disconnected from what they should<br />

be about. As we recite the mantra of change<br />

in the business world everyday, its important<br />

we understand that there are things which<br />

cannot change after all. The basic drivers<br />

of business success are timeless. They are<br />

not affected by disruption or business uncertainties.<br />

In fact, it is the understanding<br />

of these basic principles that empowers a<br />

business to conquer the challenges in its<br />

environment and win as it ought to.<br />

So before you pay for another TV advert,<br />

before you bring in another business consultant<br />

or roll out a new product, sit down<br />

and ask yourself, ‘what business are we in?’<br />

And think this through. Don’t be in a haste.<br />

You can’t get any strategy right neither can<br />

you know who your competitors really are<br />

nor how to draw your strategic map except<br />

you have the accurate answer to this.<br />

The book Profit from the Core by<br />

Chris Zook and James Allen revealed that<br />

between 1988 and 1998, seven out of eight<br />

companies in a global sample of 1,854 large<br />

corporations failed to achieve profitable<br />

growth. This means that these companies<br />

were unable to deliver 5.5% annual real<br />

growth in revenues and earnings while<br />

earning their cost of capital. Yet 90% of the<br />

companies in the study had developed<br />

detailed strategic plans with much higher<br />

targets. Is it any surprise to know why business<br />

leaders have a problem with executing<br />

strategies? Forming strategies is not as<br />

important as defining your business in the<br />

first place. Interestingly no one else can do<br />

this for you. This is what you sit down with<br />

your board and resolve once and for all.<br />

No matter how long it takes to figure it out,<br />

it will always worth the while.<br />

Brian is an author, advisor to business leaders,<br />

keynote speaker and an entrepreneur. He has<br />

trained and advised senior executives at renowned<br />

organizations including Africa Reinsurance Corporation,<br />

UAC, United Securities Limited, Business-<br />

Day among others.<br />

Brian is the Director of <strong>BusinessDay</strong> Training and<br />

sits on the board of a number of organizations in<br />

Africa.<br />

This Page Is Open For Sponsorship, for details call 0708 234 5251.


Tuesday <strong>21</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

Nigeria’s population: Asset or liability<br />

Continued from back page<br />

in the world, and yet, for<br />

much of the 19th and 20th<br />

Century, it lagged behind<br />

the West, and even its Asian<br />

neighbours, Japan and South<br />

Korea. Over the thirty-year<br />

period between 1960 and<br />

1990, China’s GDP per capita<br />

grew at an annualized rate<br />

of about 4.3% from about<br />

$90 to $318 despite having<br />

a population of over 1.1 billion<br />

by 1990. In fact, despite<br />

China’s superior population<br />

size, it was slightly poorer<br />

than Nigeria, which had a<br />

GDP per capita of $322 in<br />

1990. Additionally, Nigeria’s<br />

annualized GDP per capita<br />

growth rate, at 4.2%, was very<br />

similar to China’s. In effect,<br />

the Chinese and Nigerian<br />

economies performed very<br />

similarly over the 30-year<br />

period from 1960 to 1990<br />

and both countries were in<br />

a nearly identical position by<br />

the end of that period. Clearly,<br />

China’s large population<br />

was not enough to magically<br />

make it a prosperous nation.<br />

However, by 2016, China’s<br />

GDP per capita had grown to<br />

about $8000 while Nigeria’s<br />

was only a little over $2000<br />

- about a quarter of China’s<br />

(see Figure 1). How did the<br />

gap between two countries<br />

that were at par only 26 years<br />

ago become so large? The<br />

secret behind China’s spectacular<br />

economic growth<br />

over the last quarter century<br />

is in certain economic reforms<br />

that China took beginning<br />

in the late 1970s. After<br />

the death of Mao Zedong<br />

who had ruined China’s<br />

economy with disastrous<br />

policies and his tyrannical<br />

rule, Deng Xiaoping came<br />

to power in 1978 and soon<br />

after, he began to liberalize<br />

and modernize the Chinese<br />

economy.<br />

Among the important<br />

reforms that Deng Xiaoping<br />

undertook were de-collectivizing<br />

the agricultural sector,<br />

allowing private production<br />

by farmers; establishing Special<br />

Economic Zones (SEZs)<br />

such as Shenzhen where new<br />

free-market policies could<br />

be tested; allowing foreign<br />

investment; privatizing some<br />

state owned companies and<br />

removing price controls on<br />

some products. In addition<br />

to liberalizing the Chinese<br />

economy, Deng Xiaoping<br />

also reformed the Chinese<br />

educational system - increasing<br />

the focus on science and<br />

technology research and<br />

sending pupils to study<br />

abroad to develop skills that<br />

China did not have.<br />

Furthermore, these economic<br />

and education reforms<br />

and policies were underpinned<br />

by spectacular<br />

infrastructural development.<br />

According to the National<br />

Bureau of Statistics of China,<br />

railway mileage increased<br />

by about 39,000 km between<br />

1978 and 2010 while highway<br />

mileage more than tripled<br />

over the same period. Additionally,<br />

electricity consumption<br />

increased from 281 kWh<br />

per capita in 1980 to 3927 in<br />

$9,000 <br />

$8,000 <br />

$7,000 <br />

$6,000 <br />

$5,000 <br />

$4,000 <br />

$3,000 <br />

$2,000 <br />

$1,000 <br />

$0 <br />

1960 <br />

1962 <br />

1964 <br />

1966 <br />

1968 <br />

1970 <br />

1972 <br />

1974 <br />

1976 <br />

1978 <br />

1980 <br />

1982 <br />

1984 <br />

1986 <br />

1988 <br />

1990 <br />

1992 <br />

1994 <br />

1996 <br />

1998 <br />

2000 <br />

2002 <br />

2004 <br />

2006 <br />

2008 <br />

2010 <br />

2012 <br />

2014 <br />

2016 <br />

Figure 1: China’s GDP per capita diverged from Nigeria’s starting in 1990 leading<br />

to a large gulf in wealth between the two countries.<br />

Source: World Bank<br />

GDP Per Capita <br />

China <br />

Nigeria <br />

2014. More recently, in 2001,<br />

China has joined the World<br />

Trade Organization (WTO)<br />

in order to increase its exports<br />

and enable it to fully take part<br />

in the global economy.<br />

China’s extraordinary<br />

growth from a sleeping dragon<br />

to the second biggest<br />

economy in the world holds<br />

lessons for Nigeria - a large<br />

population is only an asset<br />

if proper investments are<br />

made, and the right policies<br />

are implemented. In contrast<br />

to China since 1978, Nigeria<br />

has failed to invest in the<br />

right areas. In comparison to<br />

China’s electric power consumption<br />

per capita growth<br />

of 1298% between 1980 and<br />

2014, Nigeria’s consumption<br />

only grew by 111%. From<br />

Figure 2, the divergence in<br />

real income per capita that<br />

occurred after 1990 is no<br />

surprise - China invested<br />

in increasing its productive<br />

capacity while Nigeria did<br />

not. Instead, Nigeria has<br />

mostly squandered its oil<br />

wealth on expanding the<br />

civil service and on paying<br />

debts, which did not build<br />

the infrastructure they were<br />

purportedly incurred for. The<br />

situation has not improved<br />

in recent years - Nigeria’s<br />

capital expenditure in 2016<br />

was only N173 billion or only<br />

3.9% of the total expenditure<br />

of N4.4 trillion.<br />

Nigeria’s record on human<br />

capital development<br />

is just as bad as its record<br />

on physical capital development.<br />

According to the<br />

NBS’s 2016 Social Statistics<br />

Report, in 2014 the number<br />

of children in primary<br />

school fell to 23.1 million<br />

from 24.19 million in 2013.<br />

We find this incredible, that<br />

in a country with a growing<br />

population of primary-school<br />

aged children, the number of<br />

children in primary school is<br />

dropping. Just as alarming<br />

is that, according UNICEF,<br />

there may be as many as 10.5<br />

million children out of school<br />

in Nigeria.<br />

The story is similar in the<br />

secondary and tertiary stages<br />

of education in Nigeria. The<br />

Social Statistics Report shows<br />

that in 2015 there were only<br />

1.475 million applications<br />

into a Nigerian university, a<br />

tiny fraction of the youth population<br />

in the country. Even<br />

worse, only 401,996 or 27.2%<br />

of these people gained admission<br />

into university. In a<br />

country with a population of<br />

180 million and a median age<br />

of 18.3 years, admitting only<br />

about 400,000 students into<br />

university in a year shows a<br />

criminal underinvestment<br />

in human capital. Worse,<br />

many argue that the quality of<br />

education, skills and learning<br />

acquired in these institutions<br />

is at best suspect, and<br />

at worst, non comparable to<br />

institutions in African countries<br />

such as South Africa<br />

and Egypt. According to the<br />

World Bank, Nigeria’s tertiary<br />

school enrolment in 2011 was<br />

10% of the eligible population.<br />

In Brazil, China, and<br />

India enrolment was 43%,<br />

25% and 22% respectively.<br />

% <br />

60 <br />

50 <br />

40 <br />

30 <br />

20 <br />

10 <br />

0 <br />

1981 <br />

1983 <br />

Gross Capital Formation as a % of GDP <br />

1985 <br />

1987 <br />

1989 <br />

1991 <br />

1993 <br />

1995 <br />

China <br />

1997 <br />

1999 <br />

2001 <br />

Nigeria <br />

BUSINESS DAY 33<br />

INSIGHT/INNOVATION<br />

2003 <br />

2005 <br />

2007 <br />

2009 <br />

2011 <br />

2013 <br />

2015 <br />

Figure 2: Gross capital formation (the net increase in physical assets) as a percentage<br />

of GDP in Nigeria and China from 1981 to 2015.<br />

Source: World Bank<br />

If Nigeria fails to reverse<br />

its current spending trends<br />

and redirect its spending<br />

towards the requisite areas<br />

- education, infrastructure<br />

and health - it will fail to take<br />

advantage of its expected<br />

population boom. The Nigerian<br />

economy will be unable<br />

to provide enough jobs for<br />

the rapidly growing numbers<br />

of young people, which could<br />

lead to an increase in criminal<br />

activities and the number<br />

of people seeking to migrate -<br />

both legally and illegally - out<br />

of Nigeria.<br />

The population bomb<br />

Nigeria’s population<br />

gerians aged 15 to 34 were<br />

either unemployed or underemployed.<br />

Looking at just<br />

those aged 15 to 24, the numbers<br />

are even worse with up<br />

to 67.3% either unemployed<br />

or underemployed. 50% of<br />

people with post-secondary<br />

qualifications in the labour<br />

force are either unemployed<br />

or underemployed (although<br />

this data is for the total labour<br />

force, not just the youth).<br />

The result is an army of<br />

out-of-school, out-of-work<br />

young men and women with<br />

no marketable skills and<br />

few prospects for improving<br />

their situations. This “army”,<br />

growth (quantity), without<br />

corresponding growth in productivity<br />

and income (quality),<br />

will continue to drive<br />

up competition for existing<br />

natural and fiscal resources.<br />

While there is a direct relationship<br />

between population<br />

and food, clothing, and<br />

housing challenges, there<br />

is an inverse relationship<br />

between rising incomes and<br />

those challenges. As incomes<br />

are squeezed, competition for<br />

available resources rises.<br />

Many of the conflicts we<br />

see today, though not caused,<br />

are underpinned by the competition<br />

for resources. In the<br />

context, unemployment is<br />

an indication that Nigeria’s<br />

young population is losing<br />

out. Following recession in<br />

2016, and subsequent slow<br />

recovery, 52.7 percent of Niwith<br />

hopelessness as their<br />

weapon, are responding with<br />

migration, both legally and<br />

illegally, robbery, advance<br />

fee fraud (419), and kidnapping;<br />

by abusing drugs such<br />

as codeine and Tramadol;<br />

or by engaging in militant<br />

activities in order to demand<br />

a larger share of government<br />

revenues. These outcomes<br />

are predictable in the context<br />

of “economics of conflict” that<br />

have been studied by economists<br />

such as Paul Collier of<br />

Oxford University, United<br />

Kingdom, and Karl Warneryd<br />

of Stockholm School of Economics,<br />

Sweden.<br />

Is manufacturing still a<br />

viable path to growth?<br />

Given current global economic<br />

and technology shifts,<br />

Nigeria’s necessary investments<br />

in education and infrastructure,<br />

does not necessarily<br />

confer on it the pattern of<br />

economic growth experienced<br />

in China. China grew at an annualized<br />

rate of 13.6% between<br />

1991 and 2016 by becoming<br />

the world’s manufacturing<br />

centre. Although it has recently<br />

begun moving into more hightech<br />

industries, the foundation<br />

of China’s economic growth<br />

was low-cost manufacturing<br />

for developed economies.<br />

However, as a result of technological<br />

advancements in<br />

robotics, additive manufacturing,<br />

and artificial intelligence,<br />

this path to growth might be<br />

closed soon.<br />

These technologies will<br />

make it easier and cheaper for<br />

developed countries to move<br />

manufacturing back to their<br />

own countries since machines<br />

and software programmes<br />

will take the place of human<br />

beings in the production process.<br />

With less reliance on<br />

human labour in manufacturing,<br />

having lower labour costs<br />

and a larger labour force will<br />

become less of an advantage<br />

for developing countries such<br />

as Nigeria. Even jobs outside<br />

manufacturing are vulnerable<br />

to technological change.<br />

However, despite the<br />

threat presented by these new<br />

technologies, Nigeria’s path to<br />

development will still include<br />

investing in education. After<br />

all, many of these technologies<br />

are in early stages of development<br />

and there is a small<br />

chance that they may end up<br />

not fulfilling the early potential<br />

they have shown. More<br />

likely though, these technologies<br />

will revolutionize manufacturing<br />

not by completely<br />

removing human beings from<br />

the production process but<br />

by complementing them. In<br />

such a world, highly educated<br />

people will work alongside<br />

these machines and the only<br />

way Nigeria can compete is<br />

if its workforce is highly educated.<br />

Furthermore, even if<br />

all manufacturing and even<br />

some service sector jobs become<br />

completely automated,<br />

a creative and highly skilled<br />

workforce will be needed to<br />

design further improvements<br />

to these technologies, and<br />

perhaps create new industries<br />

of the future.<br />

Just as Uber has made it<br />

harder for traditional taxi drivers<br />

to make a living, those who<br />

are able to operate a smartphone<br />

have seen new earnings<br />

opportunities opened<br />

up to them. To readers of<br />

<strong>BusinessDay</strong>, operating a<br />

smartphone might seem like<br />

a simple task, but for the 10.5<br />

million out of school children<br />

who have never learned<br />

to read, it is an impossible<br />

task, which locks them out of<br />

participating in many simple<br />

activities. To enable Nigerians<br />

to benefit from the economic<br />

opportunities that technology<br />

opens up, all Nigerian<br />

students will need to be taught<br />

basic literacy and numeracy<br />

skills. For Nigerians to be able<br />

to create these technologies,<br />

the number of Nigerians in<br />

higher education needs to be<br />

increased and the quality of<br />

education they receive needs<br />

to be improved.<br />

Towards a bright 2050<br />

In 1990, Nigeria and China<br />

had almost equal GDP per<br />

capitas. Now, there is a gulf<br />

between the two countries,<br />

which is widening every year.<br />

But the rapid progress that<br />

China has made in barely<br />

over a quarter of a century<br />

shows that Nigeria can have<br />

a bright tomorrow if it makes<br />

the right choices today. There<br />

are 32 years between <strong>2018</strong><br />

and 2050, a similar period<br />

to that during which China<br />

transformed its economy<br />

and the lives of its people. If<br />

Nigeria invests in educating<br />

and providing health services<br />

for its people, and building<br />

the infrastructure that they<br />

need to power their homes<br />

and factories or to transport<br />

themselves or their goods<br />

within and outside the country,<br />

then the Nigeria of 2050<br />

will be a rising economic<br />

power and a land of opportunities<br />

for its citizens.<br />

However, if it continues to<br />

spend the same way it has<br />

done in the past - with most<br />

spending going towards the<br />

bloated civil service, the political<br />

class, and their cronies<br />

- then it will squander the<br />

potential of its people, and<br />

turn what should have been<br />

a blessing into a curse.<br />

•Dr. Ogho Okiti is the<br />

former Chief Economist of<br />

Businessday, holds a PhD in<br />

economics and has served<br />

at the Uk Office of National<br />

Statistics and the office of<br />

the Chief economic Adviser<br />

to the President of Nigeria.


34 BUSINESS DAY<br />

C002D5556<br />

Tuesday <strong>21</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

NEWS<br />

Investors slam Buharinomics as markets...<br />

Continued from page 1<br />

“The Nigerian economy has<br />

been very unconducive for business<br />

since 2015 which can explain<br />

why stocks have performed so<br />

poorly since President Buhari defeated<br />

Goodluck Jonathan in the<br />

election polls. Economic growth<br />

slowed, political uncertainty increased,<br />

Nigeria experienced a<br />

currency crisis and insecurity in<br />

the north and middle belt held<br />

back market performance for<br />

most of the past 3 years,” said Faith<br />

Ogedengbe, Research Analyst,<br />

GDL Asset Management.<br />

Following the current President’s<br />

swearing in on May 29<br />

2015, it took six long months for<br />

the Presidency to name, screen<br />

and approve its cabinet members,<br />

a process that never exceeded 2<br />

months since 1999.<br />

The political uncertainty during<br />

this period pulled the index down<br />

by around 14.87 percent before the<br />

ministers were finally appointed in<br />

November 2015.<br />

More trouble followed in 2016<br />

as the problem moved from political<br />

to the economy.<br />

The continued decline in crude<br />

oil prices, followed by the first<br />

economic recession in 25 years<br />

weighed heavily on stock prices in<br />

2016. Also in 2016, Nigeria suffered<br />

the biggest currency devaluation<br />

since 1999 in 2016 when Naira to<br />

US Dollar exchange rate moved<br />

from the official figure of 197 N/$<br />

to 305 N/$. The inflation rate in<br />

the country doubled as a result<br />

of huge currency devaluation as<br />

inflation neared 20 percent at its<br />

L-R: Obinna Muogboh, faculty, Lagos Business School and Director of Programme, Management Development Institute;<br />

Oseyemwen Ndudi, participant at the programme; Bayo Aderiye, chairman, Health Service Commission, Lagos State;<br />

Rene Kiamba, senior manager, sub-Saharan Africa, Global Community Impact, Johnson & Johnson, and Nicole Zefran,<br />

communications and administrative officer, Global Business School Network, at the graduation ceremony for managers<br />

and leaders of healthcare organisations held at the Sojourner by Genesis Hotel, Lagos.<br />

Continued from page 1<br />

of the year, when it was 1.95 percent,<br />

Nigeria’s statistician-general Yemi<br />

Kale said in an interview with Arise<br />

TV aired on Saturday.<br />

While the information is still being<br />

calculated, “it is looking quite<br />

flat,” Kale said.<br />

“I expected the numbers should<br />

be much better. I think the economy<br />

is still struggling.”<br />

The statistics office is scheduled<br />

to release its second- quarter growth<br />

report on <strong>Aug</strong>. 27 as compiled from<br />

the NBS data release calendar.<br />

peak in 2016.<br />

As a result of the economic<br />

headwinds, 2016 became the year<br />

of the great loss for companies<br />

on the local bourse. A total of 17<br />

companies from the NSE 30 index<br />

reported significant losses on the<br />

books as the economy slumped to<br />

a full year negative growth of -1.6<br />

percent. NSE bellwethers that saw<br />

their earnings per share decline<br />

by over 50 percent in 2016 include<br />

Nestle Nigeria, Ecobank, Seplat,<br />

Transcorp, Guinness and PZ Cussons.<br />

Lafarge Africa and Nigerian<br />

Breweries saw their EPS decline by<br />

more than 25 percent.<br />

The stock market fell by around<br />

9.41 percent in the first five months<br />

of 2016 as the administration delayed<br />

5 months to pass an economic<br />

stimulus budget to pull the<br />

economy out of recession. The stock<br />

market rallied 4.56 percent till year<br />

end after the budget signing which<br />

helped to offset some of the losses<br />

earlier in the year, bringing the total<br />

market loss in 2016 to 5.27 percent.<br />

In 2017 as the economy rebounded<br />

to a full year growth of 0.8<br />

percent, the stock market rallied 42<br />

percent as investors got excited by<br />

the economic recovery story which<br />

was largely supported by the strong<br />

rebound in crude oil price.<br />

The stock market this year has<br />

given up a significant amount of<br />

its gains from last year as the NSE<br />

index is down 9.36 percent year to<br />

date largely due to the political upheaval<br />

in the country as the general<br />

elections draw closer.<br />

Stanbic IBTC bank said in an<br />

investor presentation published<br />

Nigeria’s economy struggles as NBS sees...<br />

Nigeria’s economy slumped after<br />

a 2014 crash in oil prices. It returned to<br />

growth in the second quarter of 2017 after<br />

shrinking in the previous five periods.<br />

The economic recovery story of<br />

Africa’s largest economy has been<br />

a tale of fragile growth, eroded purchasing<br />

power of households and<br />

unfriendly borrowing rates which<br />

have inhibited economic expansion.<br />

The International Monetary Fund<br />

(IMF) however expects the economy<br />

of Africa’s most populous nation to<br />

expand by 2.1 percent for <strong>2018</strong>, while<br />

the international organisation also<br />

projects the growth rate for Nigeria’s<br />

yesterday that it sees the political<br />

environment as a key risk to<br />

income in the second half of the<br />

year while International Monetary<br />

Fund (IMF) forecast economic<br />

growth in Nigeria this year will be<br />

2.1 percent a far cry from the periods<br />

between 1999 and 2014.<br />

The average economic growth<br />

during President Olusegun<br />

Obasanjo’s regime was 8.5 percent<br />

between 1999 and 2007. Under the<br />

stewardship of President Goodluck<br />

Jonathan between 2011 and 2015,<br />

Nigeria’s economy expanded an<br />

average of 4.7 percent, almost<br />

half the growth achieved by his<br />

predecessor.<br />

But under President Buhari, average<br />

economic growth fell to a paltry<br />

0.61 percent between 2015 and<br />

2017. If economic growth improves<br />

to 2.1 percent this year, average<br />

economic growth under Buhari<br />

will improve to 0.98 percent.<br />

In the last six months alone, the<br />

market is down 17.44 percent. With<br />

analysts expecting stock prices to decline<br />

further as political uncertainty<br />

ravages the stock market, it is not unlikely<br />

that come February at the day<br />

of election, the market performance<br />

under the current administration<br />

falls into negative territory.<br />

The NSE All Share Index<br />

dropped by around 602 points on<br />

Monday, representing a decline of<br />

1.71 percent as the market closed<br />

at 34,663.48 points.<br />

Similarly, the Market Capitalization<br />

decreased by N220.07 billion,<br />

closing at N12.65 trillion. The market<br />

dipped significantly on the first trading<br />

day since Buhari announced<br />

during the weekend that he returned<br />

to the country to jail more looters.<br />

GDP in 2019 to be 2.3 percent.<br />

The <strong>2018</strong> and 2019 GDP prediction<br />

for Nigeria is far less than the<br />

figures IMF forecasted for the Africa<br />

continent. The Washington-based organisation<br />

said in its World Economic<br />

Outlook that it expects the SSA region<br />

GDP to increase 3.8 percent in 2019.<br />

On whether or not the political<br />

uncertainties surrounding the forth<br />

coming election has effect on the<br />

economic growth, the statistician-<br />

General, Kale said the political season<br />

in Nigeria and for most developing<br />

countries always affect the economy<br />

and it could be positive or negative.<br />

“Positive in the sense that if the atmosphere<br />

is not too toxic, then there<br />

Tinubu nursing presidential ambition in...<br />

Continued from page 1<br />

This, he said, explains why Tinubu<br />

is supporting President Muhammadu<br />

Buhari’s re-election bid<br />

in 2019, with the hope that power<br />

will return to the South West in 2023.<br />

The latest revelations seemed to<br />

have cast a doubt on the promise by<br />

the Presidency that the Igbo would<br />

produce the President in 2023,<br />

should the region vote for Buhari in<br />

the next general election.<br />

The Senate President was reacting<br />

to a statement credited to Tinubu<br />

where he accused Saraki, Speaker of<br />

the House of Representatives, Yakubu<br />

Dogara and other defectors that<br />

left the APC to PDP on account of<br />

automatic tickets promised to them.<br />

In a statement personally signed<br />

by him on Monday, Saraki traced<br />

the sour relationship between him<br />

and Tinubu to his opposition to the<br />

Muslim-Muslim ticket when the ex-<br />

Lagos State governor wanted to be<br />

Buhari’s running mate in the build<br />

up to the 2015 general elections.<br />

Recalling the meetings he held<br />

with the APC stalwart to resolve the<br />

crisis in the party, Saraki said: “Tinubu<br />

himself will recall that during the<br />

various meetings he had with me at<br />

the time he was pursuing reconciliation<br />

within the party, I raised all the<br />

above issues. I can also vividly recall<br />

that he himself always expressed his<br />

displeasure with the style of the government<br />

and also mentioned that he<br />

had equally suffered disrespect from<br />

the same government which we all<br />

worked to put in office. I also made<br />

the point that whatever travails I have<br />

gone through in the last three years<br />

belong to the past and will definitely<br />

not shape my decisions now and in<br />

the future.<br />

will be increase in economic activities;<br />

people will be spending, politicians<br />

will be spending and there will<br />

be a bit more money in the hands of<br />

consumer and the economy tends to<br />

benefit from that,” Kale said.<br />

On the other hand, when the<br />

political season is toxic, “foreign<br />

investors will get scared, they will<br />

be taking their money, I think that<br />

is what is happening in the Nigeria<br />

stock Exchange (NSE), and for the local<br />

investors, they will apply the wait<br />

and see approach,” kale explained.<br />

Comparing Nigeria with the United<br />

States, Kale said Nigeria is unlike<br />

the U.S where investors know that<br />

despite the election uncertainties,<br />

“However, during those meetings,<br />

the point of disagreement<br />

between me and him is that while<br />

I expressed my worry that there is<br />

nothing on ground to assure me<br />

that the administrative style and<br />

attitude would change in the next<br />

four years in a manner that will enable<br />

us deliver the positive changes<br />

we promised to our people, he<br />

(Tinubu) expressed a strong opinion<br />

that he would rather ‘support a<br />

Buhari on the hospital stretcher’ to<br />

get a second term because in 2023,<br />

power will shift to the South-west.<br />

This Tinubu viewpoint was not only<br />

expressed to me but to several of my<br />

colleagues. So much for acting in<br />

national interest.<br />

“It is clear that while my own decision<br />

is based on protecting collective,<br />

national interest, Tinubu will rather<br />

live with the identified inadequacies<br />

in the government for the sake of fulfilling<br />

and preserving his presidential<br />

ambition in 2023. This new position<br />

of Tinubu has only demonstrated<br />

inconsistency, particularly when<br />

one reviews his antecedent over the<br />

years.”<br />

The Nation’s Number Three<br />

Citizen accused the Buhari administration<br />

of consistently treating<br />

the “legislature with contempt and<br />

acting as if the law making body<br />

should be an appendage of the<br />

Executive.”<br />

According to him, the government<br />

excluded many stakeholders<br />

who worked strenuously to get the<br />

administration into office and treated<br />

them like second-class citizens.<br />

He pointed out that the National<br />

Assembly has not been constructively<br />

engaged or carried along in key<br />

policy decisions, particularly those<br />

that require legislative approval.<br />

EXPLAINER: Lagos embarks on Geographic...<br />

Continued from page 2<br />

Poland and ongoing post-delivery<br />

training.<br />

Speaking at the signing of the<br />

MoU, Melchior said that, the<br />

project is currently the largest<br />

Geographic Information System<br />

(GIS) project in West Africa and a<br />

major export of technology from<br />

Europe to Nigeria.<br />

According to him, one of the<br />

key subjects discussed during<br />

the meeting was the pioneering<br />

nature of this project as the delivered<br />

UAVs constitute the most<br />

reliable, safest and cheapest way<br />

to accurately capture cadastral<br />

data less than 10cm accuracy on<br />

an ongoing basis.<br />

The Asseco CEO said that,<br />

“The platforms delivered have<br />

been internationally awarded in<br />

Poland, Australia and the United<br />

States. Their flights can be fully<br />

automated and they possess several<br />

emergency features, such as<br />

parachutes enabling repeated<br />

vertical landing.<br />

“The six operators of Lagos State<br />

Ministry of Science and Technology<br />

will constitute a competence hub in<br />

Lagos and Nigeria in this field.<br />

“The project is handled in full<br />

cooperation with the Nigerian Civil<br />

Aviation Authority and the Office<br />

of the National Security Adviser to<br />

ensure adherence to all applicable<br />

safety and control procedures,”<br />

Melchior said.<br />

Hakeem Fahm expressed appreciation<br />

to Asseco Software<br />

Nigeria for the professionalism and<br />

performance so far.<br />

“Beyond the strategic collaboration<br />

between Lagos State Ministry<br />

of Science and Technology and Asseco<br />

Software Nigeria, this project<br />

is a practical example of localisation<br />

of technology and knowledge<br />

transfer from Europe to Nigeria,”<br />

Fahm said.<br />

the economy is structured to work<br />

in a particular way and the system<br />

continues to work.<br />

“But in Nigeria we understand<br />

that the system and the virtual system<br />

are tied to whoever wins, so<br />

everybody is nervous; who is going<br />

to win? Will the person change the<br />

policy? And so when it gets toxic it<br />

has a way of squeezing the economy,”<br />

kale concluded.<br />

Nigeria’s rising political tensions<br />

leading to the 2019’s presidential<br />

elections and a broader emergingmarket<br />

sell off have taken a toll on<br />

its Stock Exchange.<br />

The local bourse has returned<br />

-7.59 percent year to date (YTD).


Tuesday <strong>21</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

Insight: How Oando, Seplat, Sahara, others...<br />

Continued from page 1<br />

oco Phillip’s Nigerian business<br />

in 2014 moved us from a small E&P<br />

player to one of Africa’s largest indigenous<br />

hydrocarbon producers,”<br />

Oando told <strong>BusinessDay</strong> by mail.<br />

During the industry downturn,<br />

Oando was protected by a $95/bbl<br />

hedge on approximately 50 percent<br />

of its oil production; the hedge was<br />

later reset to $65/bbl resulting in an<br />

inflow to the company of $238 million<br />

which was used to significantly<br />

pay down its debt.<br />

Going forward, Oando said it will<br />

continue to explore ways to protect<br />

its income streams against future oil<br />

price shocks.<br />

Oando major producing assets<br />

includes: Abo Field (OML 125), Ebendo<br />

OMLs 60-63, OML 125, OML<br />

56, Development Assets; OML 13,<br />

OML 90, OML 134, OML 131, OML<br />

122, OML 145; Exploration Assets;<br />

Exclusive Economic Zone (EEZ) 5,<br />

EEZ 12, OPL 3<strong>21</strong>, OPL 323, OPL 236,<br />

OPL 278, OPL 282.<br />

The company current production<br />

rate stands at 37,814 boepd (Oil 39<br />

percent, Natural Gas 53percent, and<br />

Natural Gas Liquid (NGL) 8percent).<br />

“We will continue to explore ways<br />

to grow production on our existing<br />

assets whilst also looking to take advantage<br />

of opportunities to acquire<br />

more assets to grow exponentially,”<br />

Oando told <strong>BusinessDay</strong>.<br />

In an attempt to reduce exposure<br />

to debt and increase profitability,<br />

Oando has been restructuring its<br />

debt profile since 2014 which has led<br />

to a reduction in debt by 74 percent<br />

from $2.5 billion to $656 million<br />

which was made possible through<br />

consistent pay down of debt and<br />

restructuring of existing debt, the<br />

company told <strong>BusinessDay</strong>.<br />

Seplat<br />

Although production was up<br />

year on year for Seplat Petroleum<br />

Development Company Plc in 2015,<br />

the significantly lower oil price<br />

realisation and downtime of the<br />

third party operated TransForcados<br />

System adversely impacted revenue<br />

and more than offset the higher gas<br />

volumes and prices.<br />

“Having been the most active<br />

driller in Nigeria in 2014 when we<br />

drilled 23 wells, we reduced our rigbased<br />

activity to eight development<br />

wells in 2015 (four oil and four gas<br />

wells) and one work-over of an oil<br />

well, all of which were at OMLs 4, 38<br />

and 41,” Stuart Connal, chief operating<br />

officer at Seplat said in 2016.<br />

In 2016, Seplat’s average total<br />

working interest production decreased<br />

year on year by 40 percent<br />

to 25,877 boepd. Prior to this, Seplat’s<br />

working interest production from<br />

mid-2015 to February 2016 averaged<br />

around 52,130 boepd.<br />

The year 2016 amounted to a<br />

revenue loss of 44 percent from N113<br />

billion in 2015 to N63 billion in 2016<br />

while it also recorded a post-tax loss<br />

up 449 percent in the sum N45 billion<br />

in 2016 from a N13 billion profit<br />

in 2015.<br />

In order to survive the turmoil,<br />

Seplat’s board embarked on portfolio<br />

expansion as investment were directed<br />

towards the gas business and<br />

in particular the Phase II expansion<br />

of processing capacity at the Oben<br />

gas plant.<br />

“I am particularly pleased to see<br />

the growth in our gas business which<br />

in 2016 exceeded the $100 million<br />

revenue milestone demonstrating<br />

its robustness and providing a solid<br />

base from which to grow,” Austin<br />

Avuru, CEO of Seplat said.<br />

Also, the board accelerated various<br />

initiatives to diversify risk by<br />

reducing its reliance on a single<br />

export route, both in the short and<br />

the long term.<br />

One such initiative is the barging<br />

solution that utilises its 100,000 bopd<br />

capacity pipeline to the Warri refinery<br />

from where crude is exported<br />

via barge. Barging commenced in<br />

May 2016 and by the end of the 2016<br />

3 MMbbls (1.4 MMbbls working<br />

interest) of Seplat crude had been<br />

monetised via this route. Going forward,<br />

the target is to export a gross<br />

average of 30,000 bopd on a regular<br />

basis, according to the firm.<br />

“We have now established a<br />

longer-term alternative export route<br />

via the Warri refinery jetty and are<br />

nearing completion of upgrade<br />

works to the infrastructure enabling<br />

a doubling of barging volumes to a<br />

steady 30,000 bopd gross during Q2<br />

2017,” Austin Avuru, CEO of Seplat<br />

said in 2016.<br />

Despite recording a 160 per cent<br />

growth in revenue from contracts<br />

with customers to N105 billion in<br />

half year <strong>2018</strong> from N40 billion in half<br />

year 2017; Seplat announced plans<br />

in July <strong>2018</strong> to further expand profitability<br />

and increase operations by<br />

drilling it first well in its OML 53 asset.<br />

Shoreline Natural Resources<br />

In order to survive the tough<br />

conditions of 2016 when oil prices<br />

were trading below $30 per barrel,<br />

Shoreline Natural Resources cut 35<br />

percent of its nearly 2,000 workers<br />

while it also halted plans to issue<br />

$500 million Eurobonds.<br />

Ladi Bada CEO of Shoreline said<br />

during the difficult periods of 2015<br />

and 2016 the company reinvested every<br />

profit generated back into other<br />

businesses within Nigeria.<br />

“We are more comfortable working<br />

with other local Nigerian firms<br />

to obtain services which has a huge<br />

multiplier effect on the economy,”<br />

Bada said.<br />

In a bid to develop the Oil Mining<br />

Lease 30 in the Niger Delta and<br />

access funds to refinance its existing<br />

debt, Shoreline natural resources<br />

in January <strong>2018</strong> made a $530 million<br />

agreement with Vitol Group in<br />

exchange for access to some of the<br />

oil it produces which provided the<br />

company with cash to refinance existing<br />

debt and further develop OML<br />

30 in Nigeria’s oil rich delta region.<br />

Chairman of Shoreline Group,<br />

Kola Karim, was quoted as saying<br />

that the “transformational” deal<br />

would enable the company to step<br />

up gross production to as much as<br />

100,000bpd over the next year.<br />

“Shoreline would seek to boost<br />

production to between 80,000 and<br />

100,000bpd this year,” Karim was<br />

quoted by Bloomberg to have said.<br />

Sahara Energy<br />

The triumvirate of Tonye Cole,<br />

Tope Shonubi and Ade Odunsi at Sahara<br />

Energy are carving a new niche<br />

in the oil and gas sector through<br />

some shrewd investment, hires and<br />

acquisitions.<br />

The global slump in prices of<br />

crude oil resulted in a significant reduction<br />

in upstream investment and<br />

Asharami Energy (Sahara Energy’s<br />

upstream firm) was not immune<br />

to this.<br />

“In managing risks, we have<br />

had to look internally to ensure that<br />

through creativity and innovation,<br />

we ventured into new countries,<br />

commencing operations in Tanzania,<br />

Zambia and looking at more<br />

opportunities in other countries,”<br />

Sahara Energy said in 2016.<br />

In 2016, Asharami Energy total<br />

C002D5556<br />

BUSINESS DAY<br />

35<br />

NEWS<br />

Late hour rush for Eid-e-Kabir ram at Diko Market, Suleja Local Government Area Council in Niger State.<br />

Pic by Tunde Adeniyi<br />

asset value at $257,392,000 was<br />

spent on the exploration, seismic<br />

acquisition and drilling of three<br />

commitment wells, as required by<br />

the production sharing agreement.<br />

Asharami Energy has 4 onshore<br />

assets and 2 deep offshore assets in<br />

Nigeria; a shallow offshore asset in<br />

Ghana and two deep offshore assets<br />

in Cote D’Ivoire.<br />

It operates all Nigerian assets<br />

except OML 18 where it is in partnership<br />

with Eroton while the company<br />

is also in partnership with Foxtrot<br />

on CI 500 asset and Petroci on CI<br />

502 asset in its investments in Cote<br />

D’Ivoire.<br />

“One of our major goals is to commence<br />

the lifting of past production<br />

entitlement of 1.1 million barrels in<br />

2017 on this asset which has proven<br />

reserves of 38.2 million barrels,”<br />

Asharami Energy said in 2016.<br />

Sahara Group which also has a<br />

downstream firm known as Asharami<br />

Synergy said in 2016 that the<br />

organization needs to improve the<br />

inherent inefficiencies within the<br />

value chain towards creating opportunities<br />

for continuous and lasting<br />

sustainability of its downstream<br />

business.<br />

“We leveraged on our capacities<br />

and capabilities gained through<br />

the operation of our independent<br />

affiliates to bridge the existing gap<br />

currently faced by the sector,” the<br />

CEO of Asharami Synergy Moroti<br />

Adedoyin-Adeyinka said in 2016.<br />

Reacting to how Asharami Synergy<br />

survived 2016, CEO of Asharami<br />

Synergy said the company increased<br />

its storage terminal located in Ibafon<br />

by an additional 19.5Million litre<br />

of tank storage for Premium Motor<br />

Spirit (PMS); Also, the company increased<br />

its aviation storage terminal<br />

located at Omagwa International airport<br />

in Port Harcourt Rivers State by<br />

replacing the temporary 100,000-liter<br />

mini tank storage with a two<br />

million litres tank storage towards<br />

increasing operations following the<br />

opening of the airport after a significant<br />

period of closure.<br />

“These expansions created additional<br />

opportunities to better serve our<br />

customers and deliver increased value<br />

to them,” Adedoyin-Adeyinka said.<br />

In 2015, Sahara Energy commenced<br />

the process of realigning its<br />

assets, operations, and relationships<br />

towards building partnerships that<br />

would create more synergy for its<br />

operations and for improved service<br />

delivery which continued through<br />

to 2016 after oil prices crashed,<br />

with the organization focusing on<br />

Governance and Compliance Management,<br />

Strategic Risk Management,<br />

Supply Chain Management<br />

Efficiency, Personal and Corporate<br />

Social Responsibility and its Future<br />

Investments.<br />

Sahara Group is a leading African<br />

Energy (power, oil, and gas) and<br />

Infrastructure Conglomerate with<br />

operating entities in over 10 countries<br />

across four continents - Africa,<br />

Europe, Asia and the Middle East.<br />

Forte Oil<br />

According to Julius Owotuga,<br />

Group Executive Director, Finance<br />

and Risk Management at Forte Oil<br />

the company managed its foreign<br />

exchange and subsidy exposure<br />

by reducing the importation of petroleum<br />

products for the year 2015<br />

which resulted to a 31 percent drop<br />

in the sales of fuel.<br />

He added further that “Other<br />

income increased by 190% due to<br />

income from investment in securities<br />

held to maturity, freight income<br />

from the 100 trucks acquired the<br />

previous financial year and sale of<br />

investment property”.<br />

The firm also exited its dollar denominated<br />

loans and converted same<br />

to Naira at prevailing exchange rates.<br />

The firm recorded a 50 percent<br />

decrease in 2016 profit after tax (PAT)<br />

to N2.9 billion from N5.8 billion in<br />

2015 despite growth in its revenue<br />

by 19 percent which rose to N148.6<br />

billion in 2016 from 2015 in N124.6<br />

billion.<br />

Aieto Group<br />

In March 2015, Aiteo Eastern E<br />

& P, a subsidiary of Aiteo Group, acquired<br />

SPDC’s interest in OML 29 as<br />

Total E&P Nigeria Limited and Nigerian<br />

Agip Oil Company Limited – the<br />

other joint venture partners – also assigned<br />

their 10 percent and 5 percent<br />

interests respectively to Aiteo, giving<br />

the company a 45 percent interest in<br />

OML 29.<br />

OML29 stretches over an area of<br />

983 square kilometres, and includes<br />

the Nembe, Santa Barbara and<br />

Okoroba Oil Fields, including related<br />

facilities such as the 97-kilometre<br />

Nembe Creek Trunk Line (NCTL). It<br />

also has a 100 kilometres long pipeline<br />

with a capacity of 600 thousand<br />

barrels per day.<br />

In a little over a year, Aiteo Group,<br />

a leading energy company in Nigeria,<br />

under the leadership of Benedict<br />

Peters has ramped up crude production<br />

to 90,000 bpd from an average<br />

production of the 23,000 bpd after<br />

acquiring OML 29 for $2.8 billion<br />

from Shell at a time when local oil<br />

companies struggled to manage<br />

divested assets.<br />

Conclusion<br />

The collapse of the oil price from<br />

mid-2014 created serious economic<br />

crisis for oil-reliant countries, including<br />

Nigeria.<br />

It also revealed woeful weaknesses<br />

in many indigenous oil and<br />

gas firms as many of the businesses<br />

turned out to be little more than<br />

briefcase companies.<br />

The oil and gas space is however<br />

still systemically important to Nigeria’s<br />

financial services sector.<br />

Data from Nigeria Bureau of<br />

Statistics (NBS) revealed in Q1 <strong>2018</strong>,<br />

the oil and gas sector received the<br />

highest credit allocation by banks of<br />

<strong>21</strong>.9 percent compared with 13.1 percent<br />

for manufacturing sector, or 9<br />

percent to governmental institutions.<br />

Further analysis showed credits<br />

allocation to oil and gas firm as<br />

always gained dominance ahead of<br />

other segments of the economy with<br />

an average of 16.6 percent worth of<br />

credit in 2015 which grew to 20.9<br />

percent in 2016 while 2017 allocation<br />

stood at <strong>21</strong>.9 percent.<br />

<strong>BusinessDay</strong> analysis revealed<br />

loans from Access bank to oil and gas<br />

companies of N533 billion accounted<br />

for 26 percent of its total loan of N2<br />

trillion in 2017. Access banks loans to<br />

oil and gas sector in 2017 increased<br />

by 7 percent when compared with<br />

N498billion of 2016 which had a 45<br />

percent increase compared to N345<br />

billion in 2015.<br />

First Bank loans to oil and gas<br />

firms in 2017 stood at N739 billion<br />

in 2017, which is 6 percent higher<br />

to N699billion of 2016 while Zenith<br />

bank loans to the oil and gas sector<br />

in 2017 stood at N660 billion which<br />

was 1 percent shy of N654 billion in<br />

2016 while 2015 loans to oil and gas<br />

sector stood at N362 billion.<br />

United Bank of Africa (UBA) loan<br />

to the oil and gas sector in 2017 stood<br />

at N361 billion compared to N363<br />

billion in 2016 while 2015 stood at<br />

N202 billion.<br />

Although the prices currently<br />

average within $70 to $73 per barrel,<br />

the apprehension about its continued<br />

sustainability is still substantial.<br />

Cees Uijlenhoed, financial director<br />

in First E&P in a recent interview<br />

with the Financial Times expects that<br />

by about 2020, based on a proven<br />

record of project development, there<br />

will be a handful of, maybe eight,<br />

strong Nigerian oil companies able to<br />

produce 100,000 barrels of oil a day.


Tuesday <strong>21</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

Four primary school teachers get all-expense paid<br />

trip to showcase Edo’s education reforms in Canada<br />

Four teachers championing<br />

the Edo Basic<br />

Education Sector<br />

Transformation (Edo-<br />

BEST) Programme in schools<br />

across Edo State have clinched<br />

an all-expense paid trip to Canada<br />

to attend and showcase the<br />

state public education reforms<br />

at the 27th edition of the Edo<br />

National Association Worldwide<br />

(ENAW) convention.<br />

The teachers are Idehen<br />

Ejiye Isaiah of Eguare Primary<br />

School, Ujiogba in Esan West<br />

Local Government Area (LGA);<br />

Erhabor Osasumwen Priscillia<br />

of Aisologun-Akenzua Primary<br />

School in Ikpoba-Okha LGA;<br />

Ogboko Edoghogho Yvonne<br />

of Okogbo Primary School,<br />

Okogbo, in Orhionmwon LGA,<br />

and Noragbon Enogie Osaru,<br />

head teacher, Emotan Primary<br />

School, Oredo LGA.<br />

The trip, according to the<br />

special adviser to the governor<br />

on Basic Education and chairman-designate,<br />

Edo State Universal<br />

Basic Education Board,<br />

Joan Osa Oviawe, is a form of<br />

motivation for the selected<br />

teachers, who will showcase in<br />

practical terms the reform by<br />

the Governor Godwin Obaseki-led<br />

administration to Edo<br />

people in the Diaspora.<br />

“SUBEB created an online<br />

portal two weeks ago, asking<br />

teachers in Edo State to apply<br />

or nominate someone for<br />

the all-expense paid trip to<br />

Toronto, Canada.<br />

“The criteria included that<br />

they should tell us about themselves<br />

and why they think they<br />

NNPC, First E&P sign GMoU with<br />

host communities in Bayelsa<br />

As part of its commitment<br />

to social<br />

performance and<br />

demonstration of<br />

value to its neighbouring<br />

communities within the Niger-Delta<br />

communities, the<br />

Nigerian National Petroleum<br />

Corporation (NNPC) and<br />

First Exploration and Petroleum<br />

Development Company<br />

Limited (FIRST E&P)<br />

joint venture have signed<br />

a global memorandum of<br />

understanding (GMoU) with<br />

the KEFFES Rural Development<br />

Foundation (KDRF) in<br />

Bayelsa State.<br />

The KRDF is the governing<br />

arm of the eight communities<br />

that have been identified as<br />

the communities to the Assets.<br />

The KEFFES communities<br />

comprise of Koluama 1,<br />

Koluama 2, Ezetu 1, Ezetu<br />

2, Foropa, and Fish Town,<br />

Ekeni and Sangana. “KEF-<br />

FES” is an acronym formed<br />

from the initial letter of the<br />

names of each of the eight<br />

communities.<br />

The GMoU is aimed at<br />

formalising the partnership<br />

between NNPC/FIRST E&P,<br />

KDRF and the Bayelsa State<br />

government as critical stakeholders<br />

in the development<br />

of oil mining leases 83 and 85<br />

(the Assets).<br />

FIRST E&P is Nigerian oil<br />

are the best for the trip. At the<br />

end, we got 89 entries. After<br />

screening we came up with the<br />

semi-final list. Those picked<br />

were made to face a panel. One<br />

Head Mistress, Noragbon and<br />

three teachers finally got the<br />

slot to represent Edo State in<br />

Canada after the final selection.<br />

Their passports were processed<br />

on Wednesday,” Oviawe said.<br />

In a message to the selected<br />

teachers, the SUBEB boss explained<br />

that the trip would<br />

be a mixture of educational<br />

and sightseeing experiences,<br />

as the teachers will meet with<br />

Edo people in Diaspora, visit<br />

schools in Canada and also key<br />

government functionaries.<br />

According to Oviawe, “You<br />

are going to Toronto on the<br />

Governor’s entourage to attend<br />

the annual convention<br />

of Edo people in Diaspora.<br />

By God’s grace, we will aim to<br />

leave by <strong>Aug</strong>ust 29. So, prepare<br />

yourself. After the convention,<br />

you will stay behind and will<br />

visit schools in Toronto and<br />

surrounding areas. If there is<br />

time, we will visit Ottawa, which<br />

is the Canadian capital.<br />

“We will do a tour of the<br />

Canadian Parliament and visit<br />

the residence of the Governor<br />

General of the country. The<br />

Governor General is the symbolic<br />

head of state of Canada,<br />

representing the Queen of England.<br />

If there is time, we may<br />

also visit Montreal, the French<br />

speaking part of Canada. Part<br />

of the school visit will be to<br />

observe their open day among<br />

other events.”<br />

and gas company established<br />

in 2011 and commenced operations<br />

in July 2012.<br />

At the signing ceremony<br />

held at the Ministry of Mineral<br />

Resources, Bayelsa State,<br />

the representatives of the<br />

eight communities expressed<br />

their delight with the GMoU,<br />

which seeks to among other<br />

things, encourage socio-economic<br />

development within<br />

the communities.<br />

Speaking on the rationale<br />

behind the GMoU, Emmanuel<br />

Etomi, general manager,<br />

corporate services, FIRST<br />

E&P, said the joint venture<br />

partners were interested in<br />

the wellbeing of their neighbouring<br />

communities and<br />

wish to contribute to their<br />

development.<br />

“We are particularly happy<br />

with our neighbouring<br />

communities represented<br />

here today. Since we opened<br />

conversation and started<br />

engagement with them, the<br />

response has been good.<br />

At every level of our development,<br />

we have ensured<br />

that the communities are involved<br />

because they are critical<br />

to our collective success.<br />

“As a company, we are<br />

particular about our social<br />

performance and interested<br />

in the good of all our valued<br />

community stakeholders”.<br />

C002D5556<br />

BUSINESS DAY<br />

A1<br />

NEWS<br />

Nigeria’s $3.9bn e-commerce<br />

industry to spur economic growth<br />

JUMOKE AKIYODE-LAWANSON<br />

Although e-commerce<br />

in Nigeria<br />

is predominantly<br />

urban, the industry<br />

recorded<br />

about $1.9 billion in 2016, and<br />

has been projected to reach<br />

an estimated $3.9 billion by<br />

2020 if the right regulations to<br />

guard online sales are put in<br />

place to match up with global<br />

standards, experts say.<br />

Electronic commerce is a<br />

thriving global industry and<br />

has become more popular<br />

in Nigeria with increased internet<br />

penetration and high<br />

numbers of smartphone ownership.<br />

In advanced climes<br />

where access to the internet,<br />

and of course, literacy levels<br />

stand at appreciable levels,<br />

e-commerce has become a<br />

lifestyle for many. Interestingly,<br />

global retail sales, of<br />

which e-commerce makes<br />

up a major part, is projected<br />

to rise further to an estimated<br />

$27 trillion by 2020.<br />

Osita Anthony Aboloma,<br />

director-general, Standards<br />

Organisation of Nigeria<br />

(SON), said earlier this year<br />

that Nigeria would only be<br />

able to benefit from the digital<br />

advantage of e-commerce,<br />

which could add a significant<br />

value to the country’s Gross<br />

Domestic Product (GDP), if<br />

the industry was well monitored<br />

to ensure optimal service.<br />

“With the increasing volumes<br />

of consumer complaints<br />

being received on the quality<br />

of products sold online by the<br />

SON, Consumer Protection<br />

Council (CPC) and other sister<br />

regulatory agencies, it has<br />

become necessary to have a<br />

robust regulatory framework<br />

in place for this sector.<br />

“For instance, products<br />

like mobile phones, electrical<br />

and electronic devices<br />

cannot be physically viewed<br />

and tested before purchase<br />

online, while the claims on<br />

what they can do have been<br />

found in many cases to be<br />

inaccurate or sometimes out<br />

rightly false,” Aboloma said.<br />

Also, at an e-commerce<br />

forum organised for government<br />

agency representatives<br />

and stakeholders earlier this<br />

year, the issues of lack of trust,<br />

security and safety and poor<br />

knowledge were all raised<br />

as challenges hindering the<br />

rapid growth of e-commerce<br />

in Nigeria.<br />

According to Ezekiel Oseni<br />

from the Bank of Industry<br />

(BoI) at the event, Nigeria<br />

does not have enough regu-<br />

L-R: Feyisayo Fatona-Ajayi, head of Lagos office, Nigerian Economic Summit Group (NESG); Lawrence Anukam, directorgeneral,<br />

National Environmental Standards and Regulations Enforcement Agency (NESREA); Christian Wessels, founder, Sunray<br />

Ventures; Folashade Ambrose-Medebem, director, communications, public affairs and sustainable development, Lafarge Africa;<br />

Jide Jadesimi, executive director, business development, LADOL, and Tunde Olatunji, chairman, house committee on industry,<br />

Osun State House of Assembly, at the NESG stakeholders’ workshop to unlock investments for a sustainable circular economy,<br />

in Nigeria held in Lagos.<br />

Pic by Olawale Amoo<br />

TCN tells BEDC localised tripping not its affairs<br />

HARRISON EDEH, Abuja<br />

Benin Electricity Distribution<br />

Company<br />

(BEDC) recently alleged<br />

that the national<br />

grid was highly unstable,<br />

with over 2,000 tripping in<br />

its network between January<br />

and July <strong>2018</strong>.<br />

In reply, the Transmission<br />

Company of Nigeria<br />

(TCN) says the alleged statement<br />

was clearly misleading<br />

because in the subsequent<br />

part of the same report,<br />

BEDC claimed significant<br />

improvement in its services,<br />

which could not have been<br />

possible if the national grid<br />

was weak as alleged.<br />

“BEDC has no imbedded<br />

generation hence it<br />

depends entirely on the<br />

national grid and could<br />

not have recorded such<br />

improvement if the national<br />

grid has not also improved,”<br />

TCN clarifies in a statement.<br />

According to the state-<br />

ment signed by Ndidi Mbah,<br />

general manager, public affairs<br />

of TCN, since the BEDC<br />

does not have embedded<br />

generation and does not own<br />

its own transmission network,<br />

achievements like improved<br />

electricity supply to over 54<br />

communities, provision of<br />

24-hour supply covering over<br />

20km in Asaba among others,<br />

though commendable, clearly<br />

cannot happen if the national<br />

grid was as problematic as alleged<br />

in the report.<br />

The statement further<br />

noted that TCN had good<br />

working relationship with<br />

BEDC management and that<br />

both companies were working<br />

towards improving power<br />

supply to BEDC consumers.<br />

TCN, hence, said it would<br />

not join issues nor engage<br />

in unnecessary blame game<br />

with BEDC; however, for the<br />

sake of clarity, most of the<br />

so-called 2,000 tripping were<br />

actually on 33/11kV feeders in<br />

BEDC’s network due to faults.<br />

MMA2 to witness disruption over<br />

termination of staff appointment<br />

IFEOMA OKEKE<br />

Operations of not<br />

less than five domestic<br />

airlines<br />

may be disrupted<br />

following the decision of the<br />

Air Transport Services Senior<br />

Staff Association of Nigeria<br />

(ATSSSAN) National Executive<br />

Council (NEC) to picket<br />

the activities of Bi-Courtney<br />

Aviation Services Limited<br />

(BASL), operator of MMA2,<br />

over termination of appointment<br />

of union members.<br />

In a communiqué issued<br />

to the media yesterday, ATSS-<br />

SAN states it condemns in the<br />

strongest terms the uncivil<br />

manner by which the management<br />

of BASL ingloriously<br />

terminated the appointment<br />

of 26 of its staff that voluntarily<br />

joined ATSSSAN.<br />

According to the communiqué,<br />

“The NEC commended<br />

the intervention of<br />

lation around e-commerce<br />

and so retailers often hide<br />

behind the anonymity of the<br />

online space to sell substandard<br />

goods to unsuspecting<br />

customers.<br />

“Apart from the five principles<br />

recently introduced<br />

by the CPC, which include<br />

among others, that any item<br />

to be sold online must have<br />

full disclosure of description<br />

to clearly state its colour, size<br />

and any relevant information;<br />

sellers must ensure consumer<br />

protection privacy, prompt<br />

respond time to complaints<br />

and redress and to ensure that<br />

consumers are not exploited.”<br />

Oseni also mentioned that<br />

the BoI would not support<br />

any substandard product to<br />

go into the market, unless<br />

it had met all the regulatory<br />

requirements.<br />

the State Security Services<br />

(Airport Command), the<br />

Airport Police Command,<br />

the Military Commandant<br />

(MMIA Airport) and the Nigerian<br />

Civil Aviation Authority<br />

(NCAA) for the roles they<br />

played in seeking amicable<br />

resolution of the issue.<br />

“NEC thus condemned<br />

the deliberate frustration of<br />

the efforts of above government<br />

agencies by the management<br />

of Bi-Courtney. To<br />

this end, the NEC resolved<br />

that if the management of<br />

Bi-Courtney does not recall<br />

the terminated staff and allow<br />

unfettered unionisation<br />

of wiling staff of the company<br />

within two weeks from<br />

the date of the publication<br />

of this communiqué, ATSS-<br />

SAN shall embark on a series<br />

disruption of operations at<br />

MMA2 until the management<br />

of BASL complies with<br />

its demands.”


Tuesday <strong>21</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

A2 BUSINESS DAY<br />

Access Bank Rateswatch<br />

KEY MACROECONOMIC INDICATORS<br />

Indicators Current Figures Comments<br />

GDP Growth (%) 1.95 Q1 <strong>2018</strong> — lower by 0.16% compared to 2.11% in Q4 2017<br />

Broad Money Supply (M2) (N’ trillion) 24.81 Decreased by 1.41% in June <strong>2018</strong> from N25.17 trillion in May’ <strong>2018</strong><br />

Credit to Private Sector (N’ trillion) 22.28 Increased by 0.34% in June <strong>2018</strong> from N22.<strong>21</strong> trillion in May’ <strong>2018</strong><br />

Currency in Circulation (N’ trillion) 1.90 Decreased by 1.56% in June <strong>2018</strong> from N1.93 trillion in May’ <strong>2018</strong><br />

Inflation rate (%) (y-o-y) 11.14 Decreased to 11.14% in July’ <strong>2018</strong> from 11.23% in June’ <strong>2018</strong><br />

Monetary Policy Rate (%) 14 Raised to 14% in July ’2016 from 12%<br />

Interest Rate (Asymmetrical Corridor) 14 (+2/-5) Lending rate changed to 16% & Deposit rate 9%<br />

External Reserves (US$ million) 46.46 <strong>Aug</strong>ust 15, <strong>2018</strong> figure — a decrease of 1.30% from <strong>Aug</strong>ust start<br />

Oil Price (US$/Barrel) 72.98 <strong>Aug</strong>ust 17, <strong>2018</strong> figure— an increase of 0.87% from the prior week<br />

Oil Production mbpd (OPEC) 1.67 July <strong>2018</strong> figure — an increase of 4% from June <strong>2018</strong> figure<br />

STOCK MARKET<br />

Indicators Friday Friday Change(%)<br />

17/08/18 10/08/18<br />

NSE ASI 35,266.29 35,446.47 (0.51)<br />

Market Cap(N’tr) 12.87 12.94 (0.51)<br />

Volume (bn) 0.27 0.19 41.08<br />

Value (N’bn) 2.72 2.03 33.94<br />

MONEY MARKET<br />

NIBOR<br />

Tenor Friday Rate Friday Rate Change<br />

(%) (%) (Basis Point)<br />

17/08/18 10/08/18<br />

OBB 7.3300 8.4200 (109)<br />

O/N 8.3300 9.2500 (92)<br />

CALL 8.1250 8.4000 (28)<br />

30 Days 12.4103 11.1140 130<br />

90 Days 13.2799 12.4048 88<br />

FOREIGN EXCHANGE MARKET<br />

Market Friday Friday<br />

1 Month<br />

(N/$) (N/$) Rate (N/$)<br />

17/08/18 10/08/18 17/07/18<br />

Official (N) 306.10 306.00 305.80<br />

Inter-Bank (N) 353.77 352.28 347.76<br />

BDC (N) 361.00 360.50 361.00<br />

Parallel (N) 360.00 360.00 360.00<br />

BOND MARKET<br />

AVERAGE YIELDS<br />

Tenor Friday Friday<br />

Change<br />

(%) (%) (Basis Point)<br />

17/08/18 10/08/18<br />

3-Year 0.00 0.00 0<br />

5-Year 14.41 13.96 45<br />

7-Year 14.74 14.10 64<br />

10-Year 14.52 14.01 51<br />

20-Year 14.79 14.33 46<br />

Disclaimer<br />

This report is based on information obtained from various sources believed to be<br />

reliable and no representation is made that it is accurate or complete. Reasonable care<br />

has been taken in preparing this document. Access Bank Plc shall not take responsibility<br />

or liability for errors or fact or for any opinion expressed herein .This document is for<br />

information purposes and private circulation only and may not be reproduced,<br />

distributed or published by any recipient for any purpose without prior express consent<br />

of Access Bank Plc.<br />

COMMODITIES MARKET<br />

Indicators 17/08/18<br />

1-week YTD<br />

Change Change<br />

(%) (%)<br />

Energy<br />

Crude Oil $/bbl) 72.98 0.87 13.22<br />

Natural Gas ($/MMBtu) 2.93 (0.68) (4.12)<br />

Agriculture<br />

Cocoa ($/MT) <strong>21</strong>44.00 0.66 10.74<br />

Coffee ($/lb.) 104.75 (1.97) (19.55)<br />

Cotton ($/lb.) 81.39 (7.08) 5.02<br />

Sugar ($/lb.) 10.29 (3.65) (32.88)<br />

Wheat ($/bu.) 569.75 (2.86) 31.43<br />

Metals<br />

Gold ($/t oz.) 1177.12 (2.79) (10.66)<br />

Silver ($/t oz.) 14.65 (4.68) (14.78)<br />

Copper ($/lb.) 261.15 (4.90) (20.33)<br />

NIGERIAN INTERBANK TREASURY BILLS TRUE YIELDS<br />

Tenor Friday Friday Change<br />

(%) (%) (Basis Point)<br />

17/08/18 10/08/18<br />

1 Mnth 10.42 9.89 53<br />

3 Mnths 11.67 11.30 37<br />

6 Mnths 13.05 12.79 26<br />

9 Mnths 12.93 12.71 22<br />

12 Mnths 13.24 12.69 55<br />

ACCESS BANK NIGERIAN GOV’T BOND INDEX<br />

Indicators Friday Friday Change<br />

(%) (%) (Basis Point)<br />

17/08/18 10/08/18<br />

Index 2,637.04 2,665.95 (1.08)<br />

Mkt Cap Gross (N'tr) 8.48 8.57 (1.10)<br />

Mkt Cap Net (N'tr) 5.40 5.51 (1.96)<br />

YTD return (%) 7.35 8.53 (1.18)<br />

YTD return (%)(US $) -48.03 -47.82<br />

TREASURY BILLS (MATURITIES)<br />

Tenor Amount Rate (%) Date<br />

(N' million)<br />

91 Day 3384.18 10 15-<strong>Aug</strong>-<strong>2018</strong><br />

182 Day 69,565.35 10.4 1-<strong>Aug</strong>-<strong>2018</strong><br />

364 Day 20,000.00 11.22 15-<strong>Aug</strong>-<strong>2018</strong><br />

(0.<strong>21</strong>)<br />

Market Analysis and Outlook: <strong>Aug</strong>ust 17 - <strong>Aug</strong>ust 24, <strong>2018</strong><br />

Global<br />

In the US, core consumer inflation accelerated to<br />

2.4% year-on-year (y-o-y) in July, up from 2.3%<br />

in June, data released by the Labour Department<br />

show. This is the highest in nearly 10 years and<br />

suggests that the Federal Reserve will remain on<br />

track to increase the policy rate in September.<br />

The acceleration in core inflation was mostly<br />

driven by steep increases in the rental cost of<br />

housing. Meanwhile, headline inflation reached<br />

2.9% y-o-y, similar to June and the highest rate in<br />

more than six years. In a separate development,<br />

China’s overall trade surplus narrowed to $28<br />

billion in July from $42 billion in June. Imports<br />

rose by 27.3% y-o-y, while exports increased by<br />

12.2% y-o-y. Steel product exports dropped by<br />

15% y-o-y in the wake of a 25% tariff introduced<br />

by the US. In contrast, aluminium products<br />

exports, now subject to a 10% tariff by the US,<br />

increased by more than 18%. On balance,<br />

imports were up on higher commodity<br />

shipments to China. One exception was soybean<br />

imports which fell by 26% y-o-y following the<br />

introduction of a 25% tariff by China on US<br />

soybeans. Elsewhere, in the Eurozone, gross<br />

domestic product (GDP) growth for the second<br />

quarter (Q2) was revised up as Germany and the<br />

Netherlands posted stronger-than-expected<br />

growth for the period. The Q2 GDP growth was<br />

revised upward to 0.4% quarter-on-quarter from<br />

the previous estimate of 0.3%, according to data<br />

released by Eurostat, the statistics agency of the<br />

European Union (EU). Analysts believe the<br />

upward revision to GDP growth in the second<br />

quarter will make policymakers at the European<br />

Central Bank more confident that they are right<br />

to be winding down their asset purchases.<br />

Domestic<br />

The Central Bank of Nigeria (CBN) and the<br />

Bankers’ Committee have agreed to provide<br />

single-digit interest rate loans to operators in<br />

the manufacturing and agricultural sectors of<br />

the economy. These loans are expected to be<br />

availed from commercial banks’ cash reserve<br />

requirement (CRR) with the apex bank. The CBN<br />

Governor had, at the last Monetary Policy<br />

Committee meeting held in July announced that<br />

the apex bank was working on the modalities for<br />

the scheme. Speaking at the end of the<br />

meeting, the Director of Banking Supervision<br />

stated that these loans are long term loans of<br />

seven years with two year moratorium on<br />

principal. He further stated that although<br />

agriculture and manufacturing are the initial<br />

sectors that are being considered, a bank can<br />

apply if there is a job-creating sector that the<br />

bank is operating in. In a separate development,<br />

Nigeria’s annual inflation rate dropped further<br />

to 11.14% year-on-year in July <strong>2018</strong>. The<br />

National Bureau of Statistics (NBS) disclosed<br />

this in its Consumer Price Index (CPI) report<br />

titled ‘CPI and Inflation Report July <strong>2018</strong>’,<br />

released last week. The decline is 0.09% points<br />

less than the rate recorded inJune <strong>2018</strong><br />

(11.23%) and represents an eighteenth<br />

consecutive disinflation in headline inflation<br />

year-on-year. Nigeria's inflation rate has<br />

continued to decline since February 2017 after<br />

reaching more than 12 year-high. According to<br />

the report,food index droppedat 12.85% in July<br />

<strong>2018</strong> compared to 12.98% in June <strong>2018</strong>,<br />

representing the tenth consecutive decline in<br />

year on year food inflation since September<br />

2017. Meanwhile, core inflation, which excludes<br />

the prices of volatile agricultural produce stood<br />

at 10.2% in July <strong>2018</strong>, down by 0.2% from the<br />

rate recorded in June <strong>2018</strong> (10.4%). This<br />

represents the 16th consecutive decline in year<br />

on year core inflation since March 2017.<br />

Stock Market<br />

The bearish trend in the local bourse was<br />

unrelenting last week as the equities market<br />

closed in the red owing to negative sentiment<br />

towards large cap stocks across sectors.<br />

Accordingly, the All Share Index (ASI) fell 0.51%<br />

week-on-week to settle at 35,266.29 points.<br />

Market capitalization also contracted N7 billion to<br />

close at N12.87 trillion. Investor sentiment<br />

remained shaky against the backdrop of a sell-off<br />

in emerging markets assets. This week, we<br />

expect the bearish performance to be sustained<br />

as investors continue to take profit following<br />

some less-than-stellar corporate scorecard<br />

releases.<br />

Money Market<br />

Money market rates trended downwards for<br />

th<br />

the week ended July 17 <strong>2018</strong> due to net inflow<br />

from Open Market Operations (OMO) of about<br />

N300 billion. Short-dated placements such as<br />

Open Buy Back (OBB) and Over Night (O/N)<br />

rates declined to 7.33% and 8.33% from 8.42%<br />

and 9.25% respectively the previous week.<br />

Longer dated placements witnessed mixed<br />

direction. Call rate declined to 8.13% from<br />

8.45, while the 30-day and 90-day NIBOR<br />

closed higher at 12.41% and 13.28% from<br />

11.11% and 12.40% the prior week. This week,<br />

the liquidity seen in the market is expected to<br />

prevail as OMO maturity of N364 billion hits the<br />

market next week.<br />

Foreign Exchange Market<br />

The local currency remained unchanged at the<br />

parallel market at N3620/$, same as the previous<br />

week. In contrast, at the interbank window and<br />

official market, the naira depreciated marginally<br />

by 0.42% and 0.03% to close at N353.77/$ and<br />

N306.10/$ from previous week. The relative<br />

stability of the local currency continues to be<br />

supported by the apex bank’s resolve to keep the<br />

currency exchange rate stable. This week, we<br />

envisage the naira remaining at prevailing levels.<br />

Bond Market<br />

Last week, average bond yields trended higher<br />

largely on account of selloffs from foreign<br />

investors, a fallout of the current risk-off<br />

sentiment towards emerging markets, owing to<br />

the crisis in Turkey . Yields on the five-, seven-,<br />

ten- and twenty-year debt papers settled higher<br />

at 14.41%, 14.74%, 14.52% and 14.79% from<br />

1 3 . 9 6 % , 1 4 . 1 0 % , 1 4 . 0 1 % a n d 1 4 . 3 3 %<br />

respectively the previous week. The Access Bank<br />

Bond index fell by 28.92 points to close at<br />

2,637.04 points from 2,665.95 points the<br />

previous week. This week we expect that the<br />

bearish sentiment in the market will persist as<br />

macro fundamentals have not changed.<br />

Commodities<br />

Oil prices retreated last week after government<br />

data showed a jump in stockpiles of US crude. US<br />

commercial crude inventories rose by 6.8 million<br />

barrels according to an Energy Information<br />

Administration report. Oil prices were also<br />

weighed down by the ongoing trade dispute<br />

between the United States and China which<br />

continues to feed concerns that global economic<br />

growth will slow and ultimately shrink demand for<br />

oil. The OPEC basket of crudes price$2.56, or 4%,<br />

to $69.47. In a similar vein, precious metals prices<br />

edged lower amid a widespread downdraft in the<br />

metals sector, fueled partly by a strengthening<br />

US dollar. Gold fell $33.76 or 2.79%, to $1,177.12<br />

an ounce,silver decreased 72 cents to $14.65 per<br />

ounce. This week, oil prices are likely to rise<br />

buoyed by reports that the US and China are to<br />

resume trade talks at the end of the month. For<br />

precious metals, prices may nudge higher<br />

following the announcement by Turkey’s Central<br />

Bank of a series of measures to offer liquidity and<br />

cut reserve requirement for banks, in a bid to save<br />

lira from its crisis driven by the US sanctions and<br />

doubled tariffs on silver and aluminum for 50%<br />

and 20% respectively.<br />

MONTHLY MACRO ECONOMIC FORECASTS<br />

Variables <strong>Aug</strong>’18 Sept’18 Oct’18<br />

Exchange Rate<br />

(Official) (N/$) 346.90 347.02 348<br />

Inflation Rate (%) 9.34 9.00 9.00<br />

Crude Oil Price<br />

(US$/Barrel) 76.75 76.00 77.00<br />

Sources: CBN, Financial Market Dealers Association of Nigeria, NSE and<br />

Access Bank Economic Intelligence Group computation.<br />

For enquiries, contact: Rotimi Peters (Team Lead, Economic Intelligence) (01) 271<strong>21</strong>23 rotimi.peters@accessbankplc.com


BUSINESS DAY<br />

Tuesday <strong>21</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

FT FINANCIAL TIMES<br />

C002D5556<br />

A3<br />

World Business Newspaper<br />

Former UBS worker calls for police investigation into alleged assault<br />

‘I want some form of justice — he wronged me’<br />

Laura Noonan<br />

Too close for comfort: The<br />

incestuous ties that bind<br />

auditors and watchdogs<br />

Page A4<br />

US banks tap the brakes<br />

on consumer credit<br />

Spending is up, but concern is growing<br />

over credit quality and profitability<br />

Robert Armstrong<br />

This is a good time to offer<br />

Americans credit. Economic<br />

growth is solid,<br />

unemployment is low,<br />

and wallets are open.<br />

In July, retail sales grew at a<br />

sturdy 6 per cent from the year<br />

before, faster than analysts had<br />

expected. The prosperity extends<br />

even to dowdy brick-and-mortar<br />

stores: Macy’s, the struggling department<br />

store chain, last week<br />

posted its third straight quarter<br />

of sales growth after several years<br />

of declines. Walmart, the vast<br />

discount retailer, reported its best<br />

quarterly sales growth in 10 years.<br />

At the other end of the price spectrum,<br />

Nordstrom, the upscale<br />

department store chain, reported<br />

a big jump in sales which drove its<br />

stock up 13 per cent.<br />

Nor does the spending seem to<br />

be especially reckless. When, at the<br />

beginning of last year, household<br />

debt surpassed its last peak, in 2008,<br />

many pundits speculated about the<br />

possibility of a new financial crisis.<br />

But US household debt — all $13.3tn<br />

of it, according to the New York Fed<br />

— is much lower, relative to both<br />

GDP and disposable income, than<br />

it was in the run-up to 2008.<br />

The big card-issuing banks are<br />

pleased. In second-quarter calls<br />

with analysts, JPMorgan highlighted<br />

that consumer purchases using their<br />

cards were up 11 per cent; Bank of<br />

America’s purchase growth was almost<br />

as high. Citigroup and Capital<br />

One pointed out loan balances were<br />

growing nicely.<br />

If the card business is picnic,<br />

though, it is a late summer picnic;<br />

the watermelon has already been<br />

served, and the skies are showing<br />

the early signs of darkening. The<br />

card issuers acknowledge that, as US<br />

consumers have gotten their mojo<br />

back, the competition for their business<br />

has become very competitive<br />

indeed. Savvy Millennials shuffle<br />

between cards to maximise rewards<br />

and introductory interest rates. Big<br />

spenders with good credit ratings<br />

are the prize in a “ rewards war”.<br />

At the same time, the current<br />

economic expansion, at the grand<br />

old age of nine years, is the second<br />

longest on record. That does not<br />

A former UBS employee has asked UK<br />

police to investigate an alleged sexual<br />

assault by a more senior colleague<br />

after deciding the bank had failed in<br />

its attempts to deal fairly with her case.<br />

After leaving UBS, the woman<br />

emailed the head of its investment<br />

bank, Andrea Orcel, to complain that<br />

she had been let down by the bank’s<br />

human resources department. That<br />

provide any particular reason to<br />

think it is near an end. But trees do<br />

not grow to the sky.<br />

The competitive heat and the<br />

length of the cycle are making themselves<br />

felt in industry-wide data.<br />

Measure of credit quality, while not<br />

flashing amber, are unmistakably<br />

headed in the wrong direction.<br />

Quarterly write-offs of bad credit<br />

card debt at US banks peaked at<br />

nearly $19bn in the first quarter of<br />

2010 and bottomed under $5bn in<br />

2015, according the FDIC. Since<br />

then they have crept back over $8bn.<br />

The rate at which credit card<br />

holders are falling delinquent, while<br />

still at a low level, has also been<br />

creeping up since 2015. Bankers<br />

dismiss these trends as the natural<br />

“seasoning” of credit card loan portfolios<br />

that have been rebuilt since<br />

the recovery. But the numbers show<br />

that it is growing harder to sell cards<br />

to high-quality customers.<br />

Last month, the Federal Reserve’s<br />

Board of Governors released<br />

its annual report of credit card<br />

banks’ profitability. It showed return<br />

on assets falling in 2017, for the<br />

fourth year in a row. At 3.4 per cent,<br />

it is a full third lower than it was in<br />

2013. The Fed noted that a moderate<br />

increase in provisions for losses<br />

cut into profits. More important,<br />

non-interest revenues — which are<br />

made up both of payments from<br />

merchants and the annual fees and<br />

penalty fees charged to card holders<br />

— are declining.<br />

Part of this is down to big merchants<br />

driving harder bargains with<br />

the banks and pushing down on<br />

fees. Costco, the big discount retailer,<br />

moved its branded cards from<br />

American Express to Citi last year,<br />

for example.<br />

“The banks are giving more to the<br />

merchants,” said Jason Goldberg, an<br />

analyst at Barclays.<br />

Another contributor to the<br />

squeeze in fee revenue is generous<br />

rewards offers for new customers,<br />

which are booked against revenue<br />

when the customer signs on.<br />

Finally, the compression of noninterest<br />

revenue is a long-term effect<br />

of the Credit Card Accountability Responsibility<br />

and Disclosure (CARD)<br />

act of 2009, a law that prohibited<br />

many punitive fees and limited the<br />

ability to raise customers’ rates.<br />

email became public and reported<br />

widely, including in the Financial<br />

Times.<br />

The alleged assault took place last<br />

September, just before accusations<br />

about the abusive behaviour of Hollywood<br />

producer Harvey Weinstein<br />

became public and triggered a wave<br />

of activism against sexual harassment.<br />

The bank’s internal investigation<br />

took place during months of height-<br />

Continues on page A4<br />

Tesla hit as JPMorgan lops a third off its share price target<br />

Analyst acts after concluding funding for a buyout was not ‘secured’<br />

MAMTA Badkar<br />

Tesla was hit on Monday after<br />

analysts at JPMorgan argued<br />

financing for a deal to go private<br />

has not been finalised, despite chief executive<br />

Elon Musk’s claim the funding<br />

had been “secured” earlier this month.<br />

Tesla shares were down about<br />

3 per cent at $297 in early trade on<br />

Monday, extending a 9 per cent drop<br />

on Friday.<br />

In a note, JPMorgan analyst Ryan<br />

Brinkman lowered his price target by<br />

37 per cent to $195. That had been<br />

his target before he raised it to $308<br />

on <strong>Aug</strong>ust 8 — a day after Mr Musk<br />

tweeted he had funding secured to<br />

take Tesla private at $420 a share,<br />

which sent the stock to a near record<br />

high.<br />

Now, with more information having<br />

come out about what Mr Musk<br />

meant by his statement over funding,<br />

the bank has moved its target back. Mr<br />

Stocks rally ahead of<br />

US-China trade talks<br />

and Fed minutes<br />

Page A5<br />

PepsiCo strikes $3.2bn deal to buy SodaStream<br />

Beverage and snacks group looks to continue health-conscious strategy for growth<br />

James Fontanella-Khan, Eric Platt and<br />

Arash Massoudi<br />

PepsiCo has agreed to buy SodaStream,<br />

the Israeli maker of<br />

home fizzy drink dispensers,<br />

for $3.2bn, just weeks after the US<br />

consumer group announced that its<br />

chief executive Indra Nooyi would<br />

step down this year.<br />

The acquisition of the healthconscious<br />

soda maker is a clear indication<br />

that Pepsi’s incoming chief<br />

executive, Ramon Laguarta, plans to<br />

continue developing the company in<br />

a similar direction as his predecessor.<br />

SodaStream fits with Pepsi’s<br />

broader strategy under Ms Nooyi’s<br />

12-year leadership, during which she<br />

switched the company’s focus from<br />

sugary sodas to healthier snacks and<br />

beverages.<br />

Nasdaq-listed SodaStream,<br />

which fashions itself as a health and<br />

wellness alternative to cola drinks,<br />

would complement Pepsi’s healthier<br />

options, which include the flavoured<br />

sparkling water brand Bubly and the<br />

fruit and vegetable snacks maker<br />

Bare Foods.<br />

“SodaStream is highly complementary<br />

and incremental to our<br />

business, adding to our growing<br />

water portfolio, while catalysing<br />

our ability to offer personalised inhome<br />

beverage solutions around the<br />

world,” said Mr Laguarta.<br />

Pepsi has agreed to pay $144 per<br />

share in cash, an 11 per cent premium<br />

to SodaStream’s current price of<br />

$129.85 after a sharp rally in the company’s<br />

shares since the start of <strong>Aug</strong>ust.<br />

The gains had been attributed to<br />

better than expected results, given no<br />

news of deal talks had become public<br />

before Monday’s announcement.<br />

The offer, which needs to be approved<br />

by SodaStream shareholders,<br />

is also a 32 per cent premium to the<br />

company’s 30-day volume-weighted<br />

average price.<br />

The transaction is the latest blockbuster<br />

takeover of an Israeli company<br />

since March 2017 when US chipmaker<br />

Intel paid $15.3bn to purchase<br />

Mobileye, which makes sensors<br />

that detect obstacles while driving<br />

that are critical to autonomous<br />

Brinkman also retained his “underweight”<br />

rating on the stock.<br />

“We are reverting to valuing Tesla<br />

shares on the basis of fundamentals<br />

alone, which entails a $113 reduction<br />

in our price target back to the $195<br />

level where it stood before our <strong>Aug</strong>ust<br />

8 note,” said Mr Brinkman wrote.<br />

“Our interpretation of subsequent<br />

events leads us to believe that funding<br />

was not secured for a going private<br />

transaction, nor was there any formal<br />

proposal,” he added.<br />

The Securities and Exchange<br />

Commission, the US regulator, has<br />

launched an investigation into Mr<br />

Musk’s tweet and a number of lawsuits<br />

have been filed on behalf of investors<br />

who bought Tesla shares in the wake of<br />

the founder’s Twitter pronouncement.<br />

“Am considering taking Tesla private<br />

at $420. Funding secured,” he<br />

wrote on <strong>Aug</strong>ust 7.<br />

Mr Musk’s tweet came hours after<br />

the Financial Times disclosed Saudi<br />

driving. Subsequent to that deal’s<br />

announcement, the US Securities<br />

and Exchange Commission pursued<br />

insider trading charges against two<br />

Israeli residents and two Americans<br />

after suspicious trading in Mobileye<br />

shares before the transaction.<br />

Global food and beverage companies<br />

have been carrying out a<br />

series of deals in recent years as they<br />

try to reposition their portfolios as<br />

health conscious consumers opt for<br />

fewer sugary drinks.<br />

Pepsi’s deal comes days after<br />

its main rival Coca-Cola agreed to<br />

buy a minority stake in BodyArmor,<br />

a sports drink maker backed<br />

by US basketball star Kobe Bryant.<br />

Coca-Cola’s move comes as it has<br />

struggled over the years to loosen the<br />

hold of Pepsi’s sports drink business<br />

Gatorade.<br />

SodaStream will continue to be<br />

led by its current chief executive,<br />

Daniel Birnbaum, as Pepsi aims to<br />

expand the Israeli company by giving<br />

it access to its strong global distribution,<br />

research and development<br />

firepower and marketing expertise.<br />

Arabia’s Public Investment Fund had<br />

amassed a stake of 3-5 per cent in the<br />

electric car maker this year. His comments<br />

unleashed a firestorm, with<br />

some critics and investors arguing it<br />

was time to take some pressure off<br />

Mr Musk.<br />

“The revelation the Saudi fund is<br />

subsequently asking Tesla for details<br />

of how the company would be taken<br />

private suggests to us that any deal is<br />

potentially far from even being formally<br />

proposed, which is different from<br />

our understanding on <strong>Aug</strong>ust 8 which<br />

was based on Mr. Musk’s statement on<br />

Twitter that, “Only reason why this is<br />

not certain is that it’s contingent on a<br />

shareholder vote”.<br />

Mr Musk, who has been struggling<br />

to overcome production bottlenecks<br />

and ramp up production of the mass<br />

market Model 3 vehicle, gave an<br />

emotional interview saying he was<br />

overworked. That sent Tesla shares<br />

sharply lower on Friday.


Tuesday <strong>21</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

A4 BUSINESS DAY<br />

C002D5556<br />

FT<br />

NATIONAL NEWS<br />

Former UBS worker calls for<br />

police investigation...<br />

Continued from page A3<br />

ened scrutiny of workplace culture<br />

and of corporate procedures for dealing<br />

with allegations of misconduct.<br />

UBS told the FT in July that it has<br />

“strong policies and procedures in<br />

place to handle such complaints<br />

and approach them with the utmost<br />

care”. UBS, like other banks, has programmes<br />

to attract and retain women<br />

and is committed to stamping out<br />

sexual harassment.<br />

But in an interview with the FT, the<br />

woman said she has decided to take it<br />

to the police. She alleges that she woke<br />

up on the morning after a September<br />

work drinks event, in an unfamiliar<br />

house with a colleague who was her<br />

senior. She had no memory of how<br />

she got there, but believed she had<br />

non-consensual sex. She says she<br />

left as quickly as she could, without<br />

causing an altercation.<br />

A graduate trainee at UBS, she<br />

went back to work on Monday and<br />

attended a training session. She then<br />

broke down after a comment from a<br />

colleague which she would usually<br />

have brushed off. A senior colleague<br />

took her aside and she says she told<br />

him what had happened, without<br />

revealing the identity of the man. He<br />

told her she needed to see human<br />

resources.<br />

“I was like, ‘I don’t want to see HR’, it<br />

was escalating really quickly ... I didn’t<br />

know what I wanted to do,” she says.<br />

She did give HR her account that<br />

afternoon; the following day she was<br />

called back and someone “slid a rape<br />

victim brochure towards me”. “It took<br />

me a long time to put that word [rape]<br />

to it,” the woman says.“ I don’t like that<br />

word at all.”<br />

HR staff promised an investigation<br />

and offered support. They also<br />

encouraged her to go to the police, she<br />

says. The woman says that on UBS’s<br />

advice she went to a specialist centre<br />

for people who have been sexually<br />

assaulted or raped. She spoke to a<br />

police unit there.<br />

Afterwards, she says, “I told them<br />

[UBS] that ‘the advice the police<br />

themselves have given me is to let<br />

you [UBS] deal with it because if<br />

the police deal with it, it will be an<br />

18-month long investigation’. It’s my<br />

word against his word essentially.<br />

“The police asked me what I<br />

wanted to come from this ...[I said] ‘I<br />

need him gone, I don’t want to work<br />

with him, I want some form of justice<br />

in that he wronged me and that’s not<br />

OK.’”<br />

She soon became concerned about<br />

the bank’s approach. UBS interviewed<br />

her friends, she says, saying that they<br />

wanted to make sure that the alleged<br />

assailant could not poke holes in her<br />

story. “They were asking [my friends]<br />

for messages and screenshots and asking<br />

whether I’m the type of girl who’d<br />

have a one-night stand,” she says.<br />

“UBS wouldn’t have asked all his<br />

friends, ‘is [name removed] a rapist’?<br />

But they were asking mine ‘does [the<br />

woman’s name] sleep around?’ It was<br />

an investigation into me even though<br />

I’m the complainant.”<br />

UBS declined to comment on the<br />

investigation — or give details of company<br />

policies on sexual harassment<br />

and assault. “We will not go into details<br />

due to employee confidentiality,” the<br />

bank said in a two-line response to<br />

the FT’s questions. “We remain confident<br />

in our policies and processes,<br />

but following significant cases we<br />

conduct a review and if we find any<br />

improvement opportunities we will<br />

implement them.”<br />

Too close for comfort: The incestuous ties<br />

that bind auditors and watchdogs<br />

Concerns that audit market is too beholden to the clients whose numbers it vets<br />

Madison Marriage and Jonathan Ford<br />

Stephen Haddrill has the look<br />

of a man with the weight of<br />

the world on his shoulders.<br />

At his most recent public appearances,<br />

the 62-year-old boss<br />

of Britain’s accounting watchdog<br />

appeared tired and grey.<br />

It is no surprise, given that the<br />

Financial Reporting Council has<br />

recently faced the most intense<br />

criticism of its 28-year history.<br />

There are questions over how long<br />

Mr Haddrill, who has run the<br />

regulator for the past decade, will<br />

remain in his job.<br />

Pressure has mounted following<br />

the collapse in January of one<br />

of Britain’s largest construction<br />

companies, Carillion.<br />

This triggered heavy criticism of<br />

Carillion’s auditor, KPMG, which<br />

gave the group’s accounts a clean<br />

bill of health just nine months before<br />

it unravelled.<br />

It also fuelled calls from academics,<br />

politicians and investors<br />

for a break-up of the audit market<br />

over concerns that the industry is<br />

too beholden to the clients whose<br />

numbers it vets.<br />

In the eyes of its critics, the FRC is<br />

part of the wider problem. Observers<br />

highlight the regulator’s close<br />

ties to the firms it supervises, its<br />

plodding approach to investigations<br />

and its record of levying what are<br />

seen as Mickey Mouse fines.<br />

The watchdog is now facing the<br />

possibility of its own demise after<br />

the UK government commissioned<br />

an independent review of its competence<br />

led by former civil servant<br />

Sir John Kingman. Mr Haddrill, who<br />

earned nearly £500,000 last year,<br />

making him one of Britain’s bestpaid<br />

public officials, is clinging on.<br />

The FRC is hardly the first accounting<br />

body to face a crisis of<br />

public confidence. Since the second<br />

world war, the US has had no fewer<br />

than three standard setting bodies:<br />

the Committee on Accounting<br />

Procedure (1939-59); the Accounting<br />

Principles Board (1959-73) and<br />

the present Financial Accounting<br />

Standards Board (FASB).<br />

Each of FASB’s predecessors met<br />

their demise in part over concerns<br />

about their lack of independence<br />

from private interests.<br />

Karthik Ramanna, professor of<br />

business and public policy at Oxford<br />

university’s Blavatnik School of Government,<br />

thinks accounting bodies<br />

face a special set of challenges.<br />

“These are highly technical areas<br />

that concern issues with low political<br />

salience,” he said. “They depend<br />

on deep experiential knowledge<br />

from practitioners and are prone<br />

to powerful and concentrated<br />

commercial interests. It is a model<br />

that is almost perfectly designed<br />

for regulatory capture.”<br />

This charge certainly tops the<br />

sheet for those challenging Britain’s<br />

FRC. Long criticised for its<br />

“light touch” when monitoring<br />

the Big Four audit firms, which<br />

include EY, PwC and Deloitte,<br />

the watchdog has come under<br />

fire over its investigation into the<br />

failure of HBOS, one of Britain’s<br />

largest banks.<br />

KPMG gave the institution’s<br />

accounts a clean bill of health in<br />

February 2008, eight months before<br />

HBOS collapsed and had to<br />

be rescued with a £20bn taxpayerfunded<br />

bailout. Yet the FRC then<br />

took eight years, and a great deal<br />

of political prodding, before it even<br />

launched an investigation.<br />

Its verdict last September cleared<br />

KPMG of misconduct after deciding<br />

that the HBOS audit did not fall<br />

“significantly short” of the standards<br />

to be expected.<br />

It later emerged that the regulator<br />

had raised the bar for proving<br />

misconduct in 2013. Instead of<br />

“falling short of standards”, firms<br />

had to fall “significantly short”. Paul<br />

George, a former KPMG partner,<br />

was executive director in charge of<br />

conduct at the regulator when the<br />

wording was changed.<br />

The verdict troubled observers,<br />

who fear that vested interests played<br />

a role in the outcome.<br />

These conflicts are not unique to<br />

Britain. Financial Times analysis of<br />

seven authorities involved in the audit<br />

market underlines their reliance<br />

on current and former Big Four staff.<br />

Take the European Financial<br />

Reporting Advisory Group, which<br />

advises the European Commission<br />

on accountancy rules. Nearly half<br />

of its 17 board members are current<br />

or former Big Four, as are nine of<br />

the 16 individuals on its technical<br />

working group.<br />

At the PCAOB, the US accounting<br />

regulator, two of its five board<br />

members are ex-Big Four. Four of<br />

the seven advisers to those board<br />

members are also alumni. South Africa’s<br />

accounting watchdog, which<br />

has similarly come under heavy<br />

scrutiny this year following high<br />

profile accounting scandals, has<br />

four former or current Big Four staffers<br />

on its board of seven.<br />

Few question that the world’s<br />

top accountants should have some<br />

input into the rules they apply;<br />

the question is where the balance<br />

should be struck.<br />

Erik Gordon, professor at the<br />

university of Michigan, describes<br />

the dilemma: “The overlap creates<br />

regulatory capture danger but excluding<br />

people from the Big Four<br />

would deprive regulatory bodies of<br />

many of the most expert and experienced<br />

people in the field,” he said.<br />

“There is no easy way out.”<br />

So how captured are the regulators?<br />

One perceived index of undue<br />

influence is the relatively low fines<br />

they levy on their industry. (These<br />

are important because investors<br />

have historically been loath to<br />

punish auditors for sloppy or inadequate<br />

work by removing their<br />

contract).<br />

The PCAOB is one of the toughest<br />

accounting watchdogs globally,<br />

having secured an $8m settlement<br />

from Deloitte Brazil in 2016. The<br />

FRC issued its own record penalty<br />

of £6.5m in June against PwC. The<br />

largest fines ever handed out by the<br />

Dutch, German and South African<br />

accounting watchdogs total €2.2m,<br />

€50,000 and R200,000 respectively.<br />

These pale in comparison to<br />

the penalties issued to banks and<br />

other financial services companies.<br />

In 2010, the US Securities and Exchange<br />

Commission issued a record<br />

$550m fine against Goldman Sachs,<br />

while the UK’s Financial Conduct<br />

Authority meted out a record £284m<br />

penalty in 2015.<br />

Some doubt whether such penalties<br />

really drive behaviour. As one<br />

investor points out, these are largely<br />

paid by insurers anyway, and even<br />

a tripled or quadrupled fine would<br />

be little more than a flea bite to any<br />

of the Big Four.<br />

As with banking, the suspicion<br />

is that individual sanctions may be<br />

more important. The FRC’s recent<br />

decision to effectively ban Steve<br />

Denison, the PwC auditor who<br />

signed off the accounts of BHS<br />

shortly before the retailer went into<br />

insolvency, for 15 years is regarded<br />

as much more of a nuclear sanction.<br />

“If a partner faces a lengthy or<br />

lifetime ban from the industry, that<br />

cuts into their lifetime earnings,”<br />

says Tim Bush, head of governance<br />

at the shareholder advisory group,<br />

Pirc. “It’s a much more serious<br />

sanction.”<br />

Eurozone hails Greece’s exit<br />

from bailout as end of crisis<br />

Country received €289bn of loans over eight<br />

years as economy collapsed<br />

Jim Brunsden and Mehreen Khan<br />

European leaders have heralded<br />

Greece’s exit from eight<br />

years of international bailouts<br />

as the end of the eurozone’s<br />

long financial crisis — while warning<br />

that Athens must stick to policy<br />

commitments it made in exchange<br />

for €289bn of loans.<br />

Monday was the final day of<br />

Greece’s third successive bailout<br />

programme, a period of financial<br />

aid stretching back to 2010. EU<br />

officials said the end of the bailout<br />

showed Greece’s turnround after it<br />

teetered on the brink of exiting the<br />

currency bloc in 2015.<br />

Pierre Moscovici, the EU’s commissioner<br />

for economic affairs, said<br />

it was a return to normality for the<br />

Greek people. “From today Greece<br />

will be treated like any other euro<br />

area country”, he said in Brussels.<br />

Mário Centeno, the president<br />

of the eurogroup of eurozone finance<br />

ministers, said Greece had<br />

“regained the control it fought for”<br />

during years of tough negotiations<br />

with its eurozone creditors.<br />

Greece is the final eurozone<br />

country to conclude a programme<br />

of emergency assistance. Similar<br />

help was given to Portugal, Ireland<br />

and Cyprus — but Greece’s crisis<br />

was of a different magnitude, with<br />

the size of the economy shrinking<br />

by a quarter. Youth unemployment<br />

rose to nearly 50 per cent and 40 per<br />

cent of the working age population<br />

was left at risk of poverty, according<br />

to the IMF.<br />

In Germany — which for many<br />

Greeks came to epitomise an obsession<br />

with austerity as a solution<br />

to the country’s woes — the end of<br />

the programme was welcomed by<br />

the government as proof that the<br />

years of financial aid had worked.<br />

“Greece’s salvation is also a<br />

sign of European solidarity,” Olaf<br />

Scholz, Germany’s centre-left finance<br />

minister, told Handelsblatt<br />

newspaper. “The conclusion of the<br />

Greece programme is a success.<br />

The bleak predictions of the prophets<br />

of doom have not come true.”<br />

Greece’s plans to celebrate the<br />

end of the bailout programmes<br />

were dropped as criticism mounted<br />

of the state emergency services’<br />

bungled handling last month of a<br />

devastating forest fire near Athens,<br />

which left 96 people dead.<br />

But a government official said<br />

Alexis Tsipras, the prime minister,<br />

planned a live television address<br />

on Tuesday from Ithaca, which<br />

the official said was chosen “for<br />

symbolic reasons”.<br />

In mythology Ithaca was the<br />

home of Odysseus, the hero who<br />

made a safe return after a tempestuous<br />

10-year journey according to<br />

Homer’s epic poem.<br />

Brussels underlined on Monday<br />

that Greece needed to persevere<br />

with reforms initiated during the<br />

crisis, such as a streamlining of<br />

civil court procedures and a new<br />

business licensing regime.<br />

The European Commission will<br />

lead a system of post-programme<br />

surveillance that will signal whether<br />

Greece is maintaining agreed<br />

deficit targets. Athens could potentially<br />

lose some of the debt relief<br />

it secured from other eurozone<br />

governments in a deal in June if the<br />

conditions are not met.


Tuesday <strong>21</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

@ FINANCIAL TIMES LIMITED<br />

Stocks rally ahead of US-China<br />

trade talks and Fed minutes<br />

Wall Street joins global advance but its pace cools, dollar holds firm<br />

Michael Hunter and<br />

Alice Woodhouse<br />

There is an optimistic feel<br />

to trade ahead of trade<br />

talks this week between<br />

the US and China, with<br />

the dollar remaining in<br />

demand and stock markets holding<br />

their nerve.<br />

On Wall Street, the S&P 500<br />

is inching ever closer towards<br />

January’s record high. European<br />

markets are outperforming while<br />

China’s stocks bounced up off their<br />

lowest point in almost two years.<br />

The dollar index is up 0.1 per<br />

cent at 96.15, while oil prices have<br />

found support even as the currency<br />

in which they are denominated<br />

rises. Brent crude is up 0.7 per cent<br />

at $72.35.<br />

A delegation led by Wang Shouwen,<br />

China’s vice-commerce<br />

minister, will conduct two days<br />

of talks in Washington starting on<br />

Wednesday, the first formal negotiations<br />

since the US imposed tariffs<br />

on $50bn of Chinese imports.<br />

“Investors will be hoping that<br />

negotiations between China and<br />

the US can start to break the trade<br />

tariff deadlock or at the very least<br />

open the door to a summit between<br />

President [Donald] Trump<br />

and President Xi [Jinping], which<br />

might begin to ease the pressure.”<br />

Rebecca O’Keeffe, Head of<br />

Investment at interactive investor<br />

Attention is also starting to turn<br />

to the minutes of the US Federal<br />

Reserve’s <strong>Aug</strong>ust monetary policy<br />

meeting, set to be released on<br />

Wednesday, and the meeting of<br />

global central bankers in Jackson<br />

Hole, Wyoming, from Thursday to<br />

Tianqi Lithium, China’s biggest<br />

producer of the battery raw<br />

material, has chosen Morgan<br />

Stanley and CLSA for a listing<br />

in Hong Kong to fund its $4.07bn<br />

purchase of a stake in Chile’s SQM,<br />

according to a prospectus.<br />

The Chengdu-based company<br />

said 90 per cent of the listing proceeds<br />

will be used to “partially repay<br />

debt” for the deal, which was announced<br />

in May. The rest will be for<br />

general corporate purposes, it said.<br />

Tianqi still needs regulatory approval<br />

for its purchase of Nutrien’s<br />

24 per cent stake in SQM, which will<br />

make it the second-largest shareholder<br />

in the company after Julio<br />

Ponce Lerou, a billionaire Chilean<br />

businessman. Tianqi said it has<br />

borrowed a total of $3.5bn to fund<br />

the deal.<br />

The transaction has raised concerns<br />

in Chile about Tianqi’s dominance<br />

in the lithium market. In June<br />

Chile’s national competition authority,<br />

the FNE, opened an investigation<br />

into the deal.<br />

“As a result, the SQM transaction<br />

might be delayed, modified or<br />

entirely blocked if the FNE determines<br />

that it entails antitrust risks<br />

and refers the SQM Transaction to<br />

the Chilean Antitrust Court,” Tianqi<br />

FINANCIAL TIMES<br />

C002D5556<br />

COMPANIES & MARKETS<br />

Saturday.<br />

Investors will be looking for<br />

more information on the Fed’s<br />

assessment of the economy, inflation<br />

and its take on trade.<br />

Equities<br />

Wall Street’s S&P 500 is up 0.1<br />

per cent in at 2,854, leaving it less<br />

than 0.7 per cent shy of the record<br />

high set in January at 2,872.87.<br />

The Europe-wide Stoxx 600 is<br />

up 0.8 per cent, with gains for industrial<br />

metals and mining stocks<br />

setting the pace.<br />

Frankfurt’s Xetra Dax 30 is up<br />

1.3 per cent and the FTSE 100 is<br />

0.6 per cent stronger.<br />

Mainland China’s indices<br />

bounced up off two-year lows<br />

after calls over the weekend from<br />

regulators urging banks to support<br />

infrastructure projects and<br />

exporters to bolster economic<br />

confidence.<br />

The CSI 300 index of Shanghai-<br />

and Shenzhen-listed stocks<br />

rose 1.2 per cent, its first rise in six<br />

sessions. The index has fallen by<br />

about 20 per cent for <strong>2018</strong>, tracking<br />

concerns about a slowing Chinese<br />

economy and the US-China trade<br />

war.<br />

Hong Kong’s Hang Seng rose<br />

1.4 per cent with technology and<br />

telecommunications stocks in<br />

demand. Japan’s Topix slipped<br />

0.3 per cent.<br />

Forex<br />

The Turkish lira is weaker by<br />

2.6 per cent at TL6.1694 per dollar<br />

following a tumultuous week and<br />

a sharp fall on Friday after rating<br />

agencies Moody’s and Standard &<br />

Poor’s downgraded Turkey’s debt<br />

deeper into non-investment grade<br />

territory.<br />

China’s largest lithium producer set<br />

for HK IPO to fund SQM purchase<br />

Henry Sanderson<br />

said in its listing prospectus filed in<br />

Hong Kong.<br />

Chengdu-based Tianqi mines<br />

lithium in China and also at the<br />

Greenbushes hard rock mine in<br />

Australia, the largest lithium mine<br />

in the world.<br />

The company has become “a<br />

critical supplier in the supply chain<br />

system of many key battery and EV<br />

OEMs around the world,” according<br />

to its prospectus.<br />

Tianqi said it aims to expand its<br />

business into Northeast Asia and<br />

Europe, “to strengthen our ties with<br />

top-tier end customers in lithiumbased<br />

new energy sectors such as EV<br />

and energy storage systems.”<br />

“We plan to enter into mediumto<br />

long-term supply contracts with<br />

industry leading international customers<br />

which have stringent requirements<br />

on product quality and<br />

consistency with strict accreditation<br />

processes,” it said.<br />

Demand for lithium is set to grow<br />

by 19.8 per cent a year up to 2027 due<br />

to growing sales of electric cars and<br />

greater of use of batteries for storage<br />

of renewable energy, Tianqi said,<br />

citing data from consultancy Roskill.<br />

But shares in lithium producers<br />

have declined this year, on concerns<br />

about an oversupply of the battery<br />

raw material. Shares in SQM have<br />

fallen 24 per cent year-to-date in<br />

New York.<br />

BUSINESS DAY<br />

Staff at UK’s second busiest airport write up flight departure details for several hours<br />

Josh Spero<br />

A5<br />

Wang Shouwen, China’s vice-commerce minister, is leading a delegation to Washington this week to discuss US-China trade relations ©<br />

Reuters<br />

Damaged cable forces Gatwick airport to switch to whiteboards<br />

Two days after a consumer<br />

survey showed UK aviation<br />

passenger satisfaction<br />

had fallen, a damaged<br />

cable at Gatwick, the country’s<br />

second busiest airport, led to<br />

staff writing flight departure<br />

gates on whiteboards for several<br />

hours on Monday.<br />

Telecoms company Vodafone<br />

apologised for the<br />

“problems”, which occurred<br />

in its network. It blamed it on<br />

“a damaged fibre cable”.<br />

Gatwick, which processed<br />

45.6m passengers in 2017,<br />

said: “Contingencies are<br />

working — we have whiteboards<br />

and friendly staff on<br />

hand to help, and tens of<br />

thousands of passengers have<br />

departed on time.” The cable<br />

was fixed by mid-afternoon<br />

after a five-hour outage.<br />

While some passengers<br />

took to social media to castigate<br />

the airport for the confusion,<br />

Chris Han, who was<br />

waiting at airport for a flight to<br />

Los Angeles, said: “It’s slightly<br />

chaotic, and pretty difficult to<br />

see what’s at the bottom of the<br />

whiteboards, but I think the<br />

Premier Oil will press ahead<br />

with the development of one<br />

of the largest undeveloped<br />

gas discoveries in the southern<br />

North Sea after the FTSE 250<br />

company secured backing from<br />

infrastructure investors.<br />

The oil and gas independent<br />

said on Monday it had sanctioned<br />

the development of its Tolmount<br />

Main gasfield, which is expected to<br />

produce its first gas by the end of<br />

2020 before reaching peak production<br />

by 20<strong>21</strong>. It will produce about<br />

500bn cubic feet of natural gas in<br />

total and around 58,000 barrels of<br />

oil equivalent a day at its peak —<br />

equivalent to close to 5 per cent<br />

of Britain’s domestic gas supplies.<br />

staff are doing a pretty decent<br />

job, all things considered.”<br />

The disruption came<br />

against a background of falling<br />

passenger happiness,<br />

according to the UK Aviation<br />

Consumer Survey. Overall<br />

satisfaction has dropped from<br />

90 per cent in March 2016<br />

to 83 per cent in April <strong>2018</strong>,<br />

and satisfaction with airport<br />

experience has declined from<br />

83 per cent to 78 per cent over<br />

the same period.<br />

The Civil Aviation Authority,<br />

which is now carrying<br />

out its next survey, said that<br />

it was too early to tell if results<br />

would worsen, given a<br />

summer of strikes by airline<br />

staff and air traffic controllers<br />

across Europe and long<br />

queues at border control.<br />

Tim Johnson, director at<br />

the CAA, said: “While we note<br />

that some of this summer’s<br />

operational challenges have<br />

been outside of the industry’s<br />

control, some remain within<br />

industry control.”<br />

At Heathrow, Britain’s busiest<br />

airport, Border Force has<br />

missed its target for passport<br />

holders from outside the Eu-<br />

The field could produce gas for<br />

between 10 to 15 years.<br />

The approval of Tolmount is<br />

the latest in a series of new investments<br />

announced by oil and<br />

gas companies in the North Sea<br />

as the region, traditionally one<br />

of the most expensive given its<br />

maturity, recovers from the crash<br />

in oil prices.<br />

Tolmount’s go-ahead marked<br />

“a major milestone” for Premier,<br />

said chief executive Tony Durrant.<br />

The company, he added, had also<br />

secured “an innovative financing<br />

structure” for the project that<br />

would minimise Premier’s capital<br />

expenditure.<br />

Under the terms of the deal<br />

Premier, which owns a 50 per cent<br />

stake in the field, will spend about<br />

ropean Economic Area for<br />

three years running. In June<br />

2013, 99.7 per cent of non-EEA<br />

passengers passed through<br />

Heathrow’s flagship Terminal<br />

5 in less than 45 minutes. In<br />

June of this year, just 76 per<br />

cent cleared passport control<br />

in the allotted time.<br />

At Gatwick, which has fewer<br />

non-EEA passengers than<br />

Heathrow, Border Force met<br />

its targets between November<br />

2017 and April of this year for<br />

both EEA and non-EEA passport<br />

holders.<br />

Earlier this year, the Financial<br />

Times reported that the<br />

owners of Gatwick airport had<br />

paid themselves dividends of<br />

£643m in the past year as they<br />

issued £650m of debt. The<br />

dividends were an increase<br />

of more than half a billion<br />

pounds on the previous year’s<br />

£125m total.<br />

Gatwick is owned by a consortium<br />

comprising private<br />

equity firm Global Infrastructure<br />

Partners, with 42 per cent;<br />

the Abu Dhabi Investment<br />

Authority, with 16 per cent, and<br />

pension funds from California,<br />

South Korea and Australia.<br />

Premier Oil gives green light to Tolmount field<br />

Development to begin at one of the North Sea’s largest undeveloped gas discoveries<br />

Sylvia Pfeifer<br />

$120m on developing the site,<br />

comprising of project management<br />

and development drilling costs.<br />

However, a joint venture between<br />

its partner Dana Petroleum, which<br />

owns the other 50 per cent, and<br />

CATS Management Limited, a UK<br />

gas infrastructure company owned<br />

by Antin Infrastructure Partners,<br />

will pay for the construction of<br />

a new platform and pipeline to<br />

export the gas to shore. In return<br />

Premier will pay a tariff for the<br />

transportation and processing of<br />

Tolmount gas through the infrastructure.<br />

The gas will be piped to the<br />

Easington terminal on the Yorkshire<br />

coast owned by Centrica,<br />

the energy company, which will<br />

process the gas.


Politics & Policy<br />

A6 BUSINESS DAY C002D5556 Tuesday <strong>21</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

INEC condemns alleged extortion<br />

at voter registration centres<br />

… Vows to prosecute erring officials<br />

The Independent National<br />

Electoral Commission<br />

(INEC) has condemned<br />

any form of extortion of<br />

Nigerians in the on-going Continuous<br />

Voter Registration (CVR), vowing<br />

to prosecute any of its officials<br />

found to be involved in the act.<br />

In a release to the media by the<br />

commission’s Lagos office yesterday,<br />

signed by its Public Relations<br />

Officer (PRO), Femi Akinbiyi, reacting<br />

to an online media report,<br />

which stated that an official of the<br />

commission in a registration centre<br />

in Ikorodu Local Government Area<br />

INEC office, was colluding with<br />

touts demanding an amount of<br />

money from unsuspecting members<br />

of the public before facilitating<br />

their registration.<br />

The commission said it had<br />

set up a panel to investigate the<br />

claim, while the official had been<br />

withdrawn from the centre, stressing<br />

that it does not tolerate extortion<br />

and had on several occasions<br />

warned its officials against the act.<br />

Governor Udom Emmanuel of Akwa Ibom State and Senate President Bukola<br />

Saraki during a visit to the government house in Uyo<br />

The commissions said it recently<br />

arrested some touts engaging in illegal<br />

registration in certain parts of<br />

Lagos State following a tip-off, with<br />

the assistance of the officers from<br />

Department of Security Services<br />

(DSS), while apologising for any<br />

stress Nigerians may be encountering<br />

in the course of carrying out<br />

their registration.<br />

“Attention of the Independent<br />

National Electoral Commission<br />

(INEC) has been drawn to an online<br />

publication. In the said publication<br />

it was alleged that ‘some of<br />

the INEC officials in cohorts with<br />

touts illegally sneaked in people<br />

who had paid them N1,500.00 to<br />

fast-track their registration’ and<br />

one Prince Chucks was described<br />

as the link man.”<br />

According to the statement, “It<br />

is a fact that touts are around some<br />

of our CVR Centres going about<br />

with their nefarious activities, yet<br />

we have been doing everything<br />

possible to apprehend them and<br />

hand them over to law enforcement<br />

agencies for prosecution.<br />

The Commission few weeks ago<br />

with the assistance of the officers<br />

from DSS arrested some touts engaging<br />

in illegal registration in certain<br />

parts of Lagos State after tips off.<br />

“They will be prosecuted after<br />

the Police investigation. The Commission<br />

has zero tolerance for any<br />

form of extortion. Although, the<br />

Ikorodu matter is going through<br />

investigation.”<br />

Kwara targets 1.2m<br />

voters - INEC boss<br />

SIKIRAT SHEHU, Ilorin<br />

Garba Madami, the Kwara<br />

State Resident Commissioner<br />

of the Independent<br />

National Electoral<br />

Commission (INEC), has said that<br />

1.2 million eligible voters are expected<br />

from the state for the 2019<br />

general election but that so far,<br />

900,000 (nine hundred thousand)<br />

have done their registration.<br />

Madami also disclosed that<br />

only 160,000 residents have so far<br />

taken part in the ongoing Continuous<br />

Voter Registration (CVR)<br />

exercise across the state.<br />

The REC, who spoke during a<br />

courtesy visit to the Correspondents’<br />

Chapel of the state council<br />

of the Nigeria Union of Journalists<br />

(NUJ), said that about 315,000<br />

permanent voters’ cards (PVCs)<br />

are yet to be claimed by registered<br />

voters since 2015 in the state.<br />

He said that some strategies<br />

had been mapped out to address<br />

poor registration of voters.<br />

According to him, part of the<br />

strategies was to deploy officers<br />

to villages and rural areas of<br />

the state to register eligible voters<br />

as against local government<br />

headquarters where registration<br />

points were.<br />

Military commends Ortom over<br />

support to security operatives<br />

BENJAMIN AGESAN, Makurdi<br />

The Nigerian Military has<br />

commended Governor<br />

Samuel Ortom for timely<br />

and consistent support<br />

to enhance activities of Operation<br />

Whirl Stroke in Benue State.<br />

Force Commander of the operation,<br />

Major General Mutiu Yekini gave<br />

the commendation yesterday when<br />

he received Governor Ortom who visited<br />

the Air Force Hospital, Makurdi<br />

to see soldiers recently attacked by<br />

armed herdsmen while on operation.<br />

He noted with satisfaction the<br />

concern shown by the governor over<br />

the welfare of their men, stating that<br />

such would spur them to step up their<br />

operations.<br />

Major General Yekini assured<br />

the governor and the entire people<br />

of the state of the readiness of their<br />

operation to comb areas known to be<br />

hideouts for criminal herdsmen in the<br />

state and beyond.<br />

Also speaking, Governor Ortom<br />

applauded the Nigerian Army for the<br />

good work it had been doing since the<br />

operation was deployed to the state<br />

and urged it to maintain the tempo.<br />

He also acknowledged the Federal<br />

Government for deploying operation<br />

Whirl Stroke, pointing out that the<br />

performance by men of the operation<br />

had largely brought the attacks on<br />

Benue communities under control.<br />

He, on behalf of the government<br />

and people of the state, expressed<br />

sympathy over a member of the<br />

operation that had lost his life and<br />

others wounded during the attack<br />

and were receiving treatment in<br />

the hospital.<br />

INIOBONG IWOK<br />

…PDP, APC trade accusation as INEC suspends collation<br />

IGNATIUS CHUKWU AND INNOCENT<br />

ETENG, Port Harcourt<br />

Stop promoting violence - U.S Ambassador warns Nigerian leaders<br />

The United State Ambassador-at-Large<br />

for<br />

International Religious<br />

Freedom, Samuel<br />

Brownback, has warned Nigerian<br />

political office holders, civil<br />

society and religious leaders to<br />

avoid amplifying ethno-religious<br />

tension in the country but focus<br />

on peace building.<br />

Brownback stated this at a oneday<br />

national youths dialogue on<br />

ethno-religious tolerance organised<br />

by the U.S Consulate General<br />

in Lagos, which was in partnership<br />

with the African Youths<br />

Initiative for Crime Prevention<br />

(AYICRIP).<br />

Brownback, who had met with<br />

a group of religious leaders during<br />

a recent visit to Nigeria in June,<br />

Violence in local by-election raises anxiety in Rivers ahead 2019<br />

Violence took a centre<br />

stage at a by-election in<br />

Rivers State to replace<br />

a local parliamentarian<br />

but it provided a test of muscles<br />

for the two bitterest rival political<br />

parties in the fight to control the<br />

oil-rich state.<br />

The Independent National Electoral<br />

Commission (INEC) in the<br />

state suspended the election citing<br />

massive violence and disruption<br />

by rampaging groups, but this was<br />

at collation stage when one of the<br />

parties was already backslapping<br />

in advance.<br />

Both the ruling People’s Democratic<br />

Party (PDP) and the opposition<br />

All Progressives Congress<br />

(APC) have each accused the other<br />

of perpetrating violence and using<br />

different factions of the police to<br />

do its bidding.<br />

Observers said the preparedness<br />

by both parties to march for<br />

with force either with ‘youths’<br />

or police backers points to what<br />

may happen in few months time<br />

as 2019 general elections fast approach.<br />

Guns began early to boom<br />

on Election Day around Diobu as<br />

youths freely moved about chanting<br />

slogans and carrying out<br />

violent actions despite ban on<br />

movement.<br />

Later in the day, more shooting<br />

continued and teargas was heavy<br />

in Emenike Junction area. The police<br />

battled with hoodlums. Youths<br />

snatched bags and phones.<br />

INEC Obo Effanga announced<br />

suspension at collation stage and<br />

said miscreants and hoodlums<br />

backed by ‘heavily armed security<br />

operatives’ stormed the voting<br />

centres and destroyed, snatched<br />

and ruined voting materials and<br />

commended increased inter-faith<br />

engagement and dialogue in Nigeria,<br />

but noted that the country can<br />

do more to protect citizens’ rights<br />

to religious freedom.<br />

“When I visited Nigeria in June,<br />

I met with communities from all<br />

different faiths located all over<br />

the country and heard about how<br />

interfaith groups and people from<br />

every religion have come together<br />

to begin stopping the violence at<br />

the community level, which is a<br />

great starting point,” Brownback<br />

said.<br />

“However, we need to do better<br />

than just achieving tolerance; we<br />

need to truly care for each other.<br />

The people who stand for peace do<br />

not do this because they are from<br />

the same ethnic group, or because<br />

they share a common religion.<br />

They believe the lives of everyone<br />

card readers.<br />

In a state broadcast Sunday<br />

afternoon, the governor, Nyesom<br />

Wike, said the police failed<br />

completely. “Instead of providing<br />

security for voters and INEC officials<br />

the police brazenly colluded<br />

with political thugs of the APC to<br />

subvert the democratic process<br />

and denied the people of Port Harcourt<br />

Constituency III their rights<br />

to free, fair and credible elections.”<br />

He said while voting was underway,<br />

armed thugs from the APC<br />

moved freely from one polling unit<br />

to the other, violently assaulted<br />

voters and INEC officials and<br />

are sacred,” he said.<br />

Speaking earlier, the U.S. Consul-General,<br />

John Bray, reaffirmed<br />

the United States’ commitment<br />

to supporting initiatives that promote<br />

peace, while admonishing<br />

Nigerians to ensure that cyclical<br />

communal violence does not<br />

threaten national unity.<br />

“Each of us has a role to play in<br />

tramping down tensions between<br />

communities of all kinds,” Bray<br />

said.<br />

“It is in your hands to ensure<br />

that this tragic violence does not<br />

descend into broader ethnic and<br />

religious fighting, and a cycle of<br />

reprisals. We must all make sure<br />

that the fighting does not eat away<br />

at the fabric of Nigeria, the multireligious<br />

and multi-ethnic tolerance<br />

that makes this a great and<br />

unified nation,” Bray said.<br />

carted away election materials,<br />

including smart card readers and<br />

ballot boxes.”<br />

He squarely accused the state<br />

chairman of the APC of leading<br />

thugs to destroy materials.<br />

“Consequently, the thugs and<br />

their police accomplices successfully<br />

disrupted the bye-election in<br />

virtually all the 142 polling units<br />

across the 8 wards of the Constituency<br />

and caused bodily injuries to<br />

several innocent voters and INEC<br />

officials.”<br />

On the other hand, the APC said<br />

the governor’s chief of staff led<br />

PDP thugs to disrupt the election.


Tuesday <strong>21</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

C002D5556<br />

BUSINESS DAY<br />

A7<br />

AVIATION<br />

GUIDE<br />

in association with<br />

The untold story of Dana air<br />

Ifeoma Okeke<br />

The air transport narrative<br />

in Nigeria over the years<br />

has assumed different dimensions.<br />

Resultantly, it is becoming<br />

difficult to pass a verdict without<br />

looking at the twists and turns operators<br />

continue to navigate around in the<br />

last few decades.<br />

But, Nigeria’s aviation industry<br />

trajectory has been replete with challenges;<br />

albeit culminating in the bust<br />

and boom circles of many domestic<br />

carriers.<br />

However, a litany of operational<br />

and safety challenges continue to alter<br />

the stakes, with Nigeria contributing<br />

significantly to Africa’ s poor safety<br />

record.<br />

Verdict: Many aircraft fell off the<br />

skies between 2005, 2006 , including<br />

DANA Air’s 2012 air crash in Iju Ishaga<br />

area of Lagos.<br />

But, global coalition in stepping<br />

up regulation; enhanced safety management<br />

system and other measures<br />

being put in place has change the<br />

narrative.<br />

Apparently trying to get its act right<br />

following the loss of its aircraft in the<br />

crash the airline has since deployed<br />

appropriate strategies to get on the<br />

turf again.<br />

The airline like the seam proverbial<br />

Phoenix has not only risen from the<br />

dead but is recognised as one of the<br />

four top competitive domestic airlines<br />

in Nigeria. It still thrives to fulfil its mission<br />

to consolidate its operations, despite<br />

the backlash of the 2012 air crash.<br />

Airlines such as Nigeria Airways,<br />

ADC airline, Bellview Airline, Sossoliso<br />

Airlines and EAS which had also fallen<br />

from the skies claiming the lives of<br />

hundreds of people, never lived to tell<br />

the story.<br />

The question resonate is: What is<br />

Dana Air’s winning streak?<br />

To players both at home and<br />

abroad the lingering question lingers:<br />

What exactly did Dana Air do differently<br />

to get back its market share?<br />

It’s only apt to situate the Dana<br />

Air’s narrative as: ‘Experience is the<br />

best teacher.’<br />

Having flown over 2.7 million<br />

passengers in the last nine years of its<br />

operation in addition to receiving multiple<br />

awards for aviation excellence<br />

and corporate social responsibility,<br />

ducted by the Nigerian Civil Aviation<br />

Authority and its foreign partners – The<br />

Flight Safety Group, and is determined<br />

to reinforce our strategic route network<br />

within and beyond Nigeria.<br />

Special Services Unit/Pilot training<br />

Dana Air in furtherance of its<br />

much-vaunted customer- centric<br />

products, recently launched a Special<br />

Services Unit attend to passengers<br />

with special needs, urgent complaints,<br />

update passengers on current promos<br />

and benefits of Dana Miles at the airports<br />

in Lagos, Abuja, Port Harcourt,<br />

Uyo and Owerri.<br />

On the newly – introduced Special<br />

Services Unit, Obi said the airline introduced<br />

the Special Services Unit to<br />

further deepen customer service, offer<br />

multiple issue-solving options and<br />

provide seamless travel experience for<br />

our teeming guests.’’<br />

Following industry counsel by<br />

AIB on the need to train its pilots and<br />

crew regularly, Dana Air has swung<br />

into action in recruiting and training<br />

more Nigerian Pilots in Johannesburg,<br />

South Africa and Madrid –Spain, as<br />

part efforts towards contributing to<br />

the growth and development of the<br />

Nigerian aviation industry.<br />

According to Mbanuzuo, “Dana<br />

Air is committed to the growth and<br />

development of the Nigerian aviation<br />

industry. As at 2015, more than 500<br />

Nigerian pilots were unemployed but<br />

with our recruitment and frequent<br />

training both locally and abroad since<br />

2015, we have been able to reduce the<br />

number, by engaging these pilots and<br />

paying for their training in South Africa<br />

and Spain.<br />

“We will continue to encourage<br />

Dana Air was also unveiled as one of<br />

Nigeria’s 100 Most Respected Companies<br />

by Business Day Newspaper’s<br />

Research Unit. The airline is reputed<br />

for its innovative online products,<br />

world-class in-flight service and unrivalled<br />

on time performance.<br />

Over the years, the airline has<br />

gained the confidence of passengers<br />

in its unrivaled and unmatched on<br />

time departure in addition to payment<br />

of insurance claims to relatives of<br />

members that lost beloved members<br />

in the crash in Lagos.<br />

IOSA Certification<br />

The airline is definitely not taking<br />

safety for granted as it passed its<br />

International Operations Safety Audit<br />

(IOSA) and was admitted into the association’s<br />

global safety registry.<br />

This is as the airline is currently the<br />

newest member of the International<br />

Air Transport Association (IATA).<br />

Obi Mbanuzuo, the Accountable<br />

Manager of Dana Air, while responding<br />

to the airline’s recent achievement<br />

said,’’ becoming a member of IATA is<br />

a significant milestone for us at Dana<br />

Air and this only demonstrates our<br />

level of professionalism and commitment<br />

to operational efficiency in<br />

terms of providing our guests with<br />

safe, seamless and world-class air<br />

transport service in Nigeria.<br />

“Apart from the fact that this membership<br />

will further strengthen our<br />

relationship with other international<br />

airlines, we see it as an opportunity<br />

to take our amazing products to the<br />

global stage through interline and<br />

code-share agreements.’’<br />

NCAA audit<br />

Dana Air was the first airline to<br />

undergo an operational audit conprofessionalism<br />

in the industry and<br />

support our Nigerian Pilots to ensure<br />

constant growth and development in<br />

the industry.’’<br />

Top 50 brands in 2017<br />

In furtherance of its innovation,<br />

CSR, popularity, National spread and<br />

online engagement, Dana Air made<br />

the list of top 50 brands 2017 for the<br />

third time consecutively, at the Brands<br />

Nigeria Leadership Forum held recently<br />

at Oriental Hotels, Lagos.<br />

According to Taiwo Oluboyede, the<br />

CEO of Top 50 Brands Nigeria, Nigeria<br />

is becoming more attractive to investors<br />

across the world in spite of our<br />

many challenges.<br />

He said :” More people are coming<br />

to invest and there is need to provide<br />

information about corporate Nigeria.<br />

The Brands that have made it today are<br />

home-grown brands that have shown<br />

resilience, contributed to the economy<br />

of Nigeria, have good national spread,<br />

innovative and have good online engagement<br />

and popularity.’’<br />

Kingsley Ezenwa, the Communications<br />

Manager of Dana Air, while<br />

responding to the unveiling of Dana<br />

Air and Dana Group as one of Nigeria’s<br />

Top 50 brands for the 3rd time consecutively<br />

said, “we are highly honored<br />

to have been listed among the top 50<br />

brands in Nigeria. We are a responsible<br />

corporate citizen and giving back to the<br />

society, contributing positively to the<br />

economy of the country, and churning<br />

quality products are the ways we have<br />

shown commitment to the Nigerian<br />

dream. Our investment across Nigeria<br />

and in various sectors of the economy,<br />

speaks volume of our commitment to<br />

continue to provide jobs for our people<br />

and assist the government to achieve<br />

a positive growth trajectory in the<br />

economy.’<br />

“We are nine years plus in the<br />

aviation industry and we have shown<br />

massive resilience in spite of the<br />

multiple challenges, providing value<br />

added services at all times and our<br />

guests should expect an all-round<br />

improvement in <strong>2018</strong>.’’<br />

On the sampling of drinks on its<br />

flights, Ezenwa said, Dana Air is always<br />

open to giving more to its guests<br />

and partnering Ideas House to sample<br />

a new brand of soft drink on our flights<br />

is just another way of achieving this.’’<br />

Official airline of Akwa Ibom<br />

christmas carols festival<br />

The airline was also announced as<br />

the Official Airline of one of the biggest<br />

festivals in the world- The Akwa Ibom<br />

Christmas Carols Festival, which held<br />

on 22nd of December, 2017 at the Uyo<br />

Township Stadium, Akwa Ibom state.<br />

Aniekpeno Mkpanang, the Permanent<br />

Secretary, Akwa Ibom State<br />

Ministry of Culture and Tourism and<br />

Coordinator of the Festival, said: ‘The<br />

Akwa Ibom Christmas Carols Festival<br />

is one of the biggest and well-attended<br />

Festivals in the world and we are<br />

expecting over 20,000 artistes and<br />

visitors to fly in from other parts of the<br />

country, Africa and the world, hence<br />

the need to join ranks and partner<br />

with one of the most consistent Airlines<br />

in Nigeria right now to ensure a<br />

hitch-free, hassle free, seamless, and<br />

on-time travel for all our guests and<br />

visitors.’’<br />

Other CSR activities<br />

Dana Air has been supporting<br />

worthy causes since inception in <strong>2018</strong>.<br />

The airline has consistently carried<br />

out charity collection on board<br />

to support sickle cell patients, and<br />

has entered partnership relevant to<br />

carry out voluntary blood donation<br />

to those in need, and carrying out<br />

community development initiatives<br />

across the country.<br />

Dana Air has also supported the<br />

ravaged cities and displaced person<br />

in the north with household materials<br />

and food stuffs.<br />

The airline has been supporting<br />

various non-governmental Organisations<br />

(NGOs), particularly the Children<br />

Living with cancer foundation,<br />

EMAC cancer walk, Project pink Blue<br />

and many more for over 6 years now.<br />

Dana Air has been supporting their<br />

awareness initiatives, victims and free<br />

screening initiatives to date.


Tuesday <strong>21</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

A8 BUSINESS DAY<br />

C002D5556<br />

Live @ The Exchanges<br />

Top Gainers/Losers as at Monday 20 <strong>Aug</strong>ust <strong>2018</strong> Market Statistics as at Monday 20 <strong>Aug</strong>ust <strong>2018</strong><br />

GAINERS<br />

Company Opening Closing Change<br />

DANGCEM N220 N229.5 9.5<br />

AIRSERVICE N4.45 N4.85 0.4<br />

STANBIC N50.05 N50.3 0.25<br />

CADBURY N10 N10.1 0.1<br />

FCMB N1.7 N1.8 0.1<br />

LOSERS<br />

Company Opening Closing Change<br />

NB N103 N100 -3<br />

UNILEVER N55 N52.5 -2.5<br />

GUARANTY N38 N36.95 -1.05<br />

PZ N14.05 N13.05 -1<br />

ZENITHBANK N22.55 N<strong>21</strong>.85 -0.7<br />

ASI (Points) 35,341.90<br />

DEALS (Numbers) 3,054.00<br />

VOLUME (Numbers) 220,495,783.00<br />

VALUE (N billion) 3.187<br />

MARKET CAP (N Trn 12.902<br />

Customs Street edges lower by 1.71%<br />

...investors lose N2<strong>21</strong>bn in one day<br />

Stories by<br />

Iheanyi Nwachukwu<br />

Ni g e r i a<br />

stock index<br />

opened<br />

this week<br />

negative<br />

despite that some investors<br />

still raised wagers on<br />

stocks like Dangote Cement<br />

Plc, Airline Services<br />

& Logistics Plc, Stanbic<br />

IBTC Holdings Plc, FCMB<br />

Group Plc, and Cadbury<br />

Nigeria Plc. The Lagos<br />

Bourse was down by 1.71<br />

percent at the close of<br />

trading session on Monday<br />

<strong>Aug</strong>ust 20, <strong>2018</strong> as<br />

declining stocks outnumbered<br />

advancers.<br />

The Exchange’s trading<br />

statistics showed eleven<br />

stocks edged higher<br />

against 22 laggards, thus<br />

pushing Year-to-Date<br />

(YtD) negative returns<br />

higher to minus -9.36percent.<br />

“Given that the second-quarter<br />

(Q2) <strong>2018</strong><br />

earnings season is closing<br />

out, we expect geopolitical<br />

events and policy<br />

changes to impact more<br />

on global equity Indexes.<br />

However, in the near term,<br />

we expect the stronger<br />

economic outlook and<br />

double-digit earnings<br />

increases to provide support<br />

for rising stock prices<br />

in the U.S markets.<br />

“We also expect the<br />

market to remain largely<br />

downbeat in the local<br />

market due to a continued<br />

absence of bullish<br />

triggers. Also, we expect<br />

investors to take profit<br />

during early trades ahead<br />

of the holiday”, said the<br />

Kayode Tinuoye-led team<br />

of research analysts at<br />

United Capital Plc in their<br />

investment view for this<br />

week.<br />

The Nigerian stock<br />

market’s broad Index<br />

–the NSE All Share Index<br />

(ASI) depreciated by<br />

1.71percent to close at<br />

34,663.48points as against<br />

35,266.29 points at the beginning<br />

of trading while<br />

the value of listed equities<br />

measured as Market<br />

Capitalisation decreased<br />

from N12.875trillion to<br />

N12.654trillion, representing<br />

N2<strong>21</strong>billion decline.<br />

Despite the Dangote<br />

Cement-driven recovery<br />

witnessed last Friday,<br />

research analysts at Lagos-based<br />

Vetiva Capital<br />

Management foresee a<br />

return to negative territory<br />

this week “given that<br />

underlying investor apathy<br />

remains in the market”.<br />

They had expected milder<br />

losses on Monday <strong>Aug</strong>ust<br />

20, <strong>2018</strong> .<br />

In 3,054 deals, stock<br />

traders exchanged<br />

220,495,783 units valued<br />

at N3.187billion. Trading<br />

in banking stocks helped<br />

buoy market transaction<br />

volume. For instance,<br />

UBA Plc, Zenith Bank<br />

Plc, Access Bank Plc, Skye<br />

Bank Plc, and FBN Holdings<br />

Plc were the actively<br />

traded stocks on the Nigerian<br />

Stock Exchange on<br />

Monday.<br />

UBA and Access Bank<br />

Plc are among stocks in<br />

most analysts watch list as<br />

they are of the last Tier-1<br />

banking institutions that<br />

are yet to release their<br />

first-half (H1) <strong>2018</strong> financial<br />

statements.<br />

Dangote Cement Plc<br />

led the league of gainers<br />

after its share price<br />

increased from N220 to<br />

N229.5, up by N9.5 or<br />

4.32percent; while Airline<br />

Services & Logistics Plc<br />

advanced from N4.45 to<br />

N4.85, up by 40kobo or<br />

8.99percent.<br />

Stanbic IBTC Holdings<br />

Plc increased from N50.05<br />

to N50.3, up by 25kobo or<br />

0.50percent; FCMB Group<br />

Plc advanced from N1.7<br />

to N1.8, up by 10kobo or<br />

5.88percent; while Cadbury<br />

Nigeria Plc increased<br />

from N10 to N10.1, up by<br />

10kobo or 1percent.<br />

Nigerian Breweries<br />

Plc recorded the highest<br />

loss after its share price<br />

declined from N103 to<br />

N100, down by N3 or<br />

2.91percent; followed<br />

by Unilever Nigeria Plc<br />

which declined from N55<br />

to N52.5, down by N2.5 or<br />

4.55percent; and GTBank<br />

Plc which lost N1.05, from<br />

N38 to N36.95, down by<br />

2.76percent.<br />

Likewise, PZ Cussons<br />

Nigeria Plc stock price<br />

dropped from N14.05<br />

to N13.05, representing<br />

N1 or 7.12percent loss,<br />

while Zenith Bank Plc<br />

declined from N22.55 to<br />

N<strong>21</strong>.85, down by 70kobo<br />

or 3.10percent.<br />

RAK Unity Petroleum intensifies efforts to boost sales<br />

RAK Unity Petroleum<br />

Company<br />

Plc is determined<br />

to achieve its<br />

strategic objectives by<br />

driving growth inorganically<br />

through a merger<br />

or acquisition; thereby<br />

enabling the company<br />

to respond competitively<br />

to the emerging changes<br />

and trends in the business<br />

operating environment.<br />

As part of RAK Unity<br />

Petroleum Company<br />

Plc five-year business<br />

plan that commenced in<br />

January 2016, the company<br />

aims to boost sales<br />

through the production<br />

of branded lubricants and<br />

increase profit margins by<br />

investment in direct importation<br />

of Diesel (AGO).<br />

“There are currently<br />

ongoing plans to lease<br />

four new retail stations<br />

and refurbish the old retail<br />

stations. These plans will<br />

be executed on the back<br />

of the merger or acquisition,”<br />

Edo-Abasi Bassey<br />

Ukpong, chairman, RAK<br />

Unity Petroleum Company<br />

Plc told sharehold-<br />

ers at the company’s 15th<br />

annual general meeting<br />

held in Lagos on Thursday<br />

<strong>Aug</strong>ust 16, <strong>2018</strong>.<br />

He assured that going<br />

forward, with the anticipated<br />

improvement<br />

in the Nigerian economy<br />

facilitated by increasing<br />

oil production and revenue,<br />

growth in trade and<br />

investment, a stable and<br />

transparent FX market,<br />

“we will position your<br />

company to take advantage<br />

of opportunities and<br />

offer value to you.”<br />

“To continue to grow<br />

our business, despite<br />

the tough operating environment,<br />

RAK Unity<br />

Petroleum Company Plc<br />

board has begun a strategic<br />

review process of our<br />

business to evaluate all<br />

the options open to us to<br />

significantly improve our<br />

Moroti Adedoyin – Adeyinka, director, RAK Unity Petroleum Company Plc, James Ogungbemi,<br />

managing director, RAK Unity Petroleum Company Plc, Ukpong Edoabasi, chairman, RAK<br />

Unity Petroleum Company Plc, Oyindamola Ehiwere, company secretary, RAK Unity Petroleum<br />

company Plc at the company’s 15th annual general meeting in Lagos.<br />

company’s performance.<br />

Once the board has fully<br />

evaluated these options,<br />

we intend to return to you,<br />

our shareholders, to report<br />

on our new strategic<br />

direction,” Ukpong further<br />

told shareholders.<br />

At inception, the company<br />

had as its main object,<br />

the marketing of and<br />

distribution of petroleum<br />

products, purchased from<br />

the Nigerian National<br />

Petroleum Corporation<br />

(NNPC), within Nigeria<br />

and the West Africa sub<br />

region. The products distributed<br />

by the company<br />

include Petrol (PMS),<br />

AGO, Gas (LPG) and Kerosene<br />

(DPK).<br />

The company also distributes<br />

Engine Oil, Brake<br />

Fluid and Distilled Water.<br />

RAK Unity Petroleum<br />

Company Plc is listed on<br />

the Alternative Securities<br />

Market (ASeM) of the<br />

Nigerian Stock Exchange<br />

(NSE) and was the first indigenous<br />

petroleum company<br />

to be so listed.<br />

Toparte Nigeria Limited<br />

currently holds 85percent<br />

of the 56,624,893 issued<br />

share capital of RAK<br />

Unity Petroleum Company<br />

Plc and a diverse group<br />

of Nigerians hold the remaining<br />

15 percent.<br />

Robert Igwe, a shareholder<br />

said at the meeting<br />

that “the company<br />

has good board, management<br />

and staff. One good<br />

thing in any account is<br />

when retained earnings<br />

and shareholders fund are<br />

growing. With what I see<br />

in the account, I can only<br />

tell the company to keep<br />

it up. For the dividend, we<br />

will always ask for more.”<br />

Another shareholder<br />

Anthony Omojola said<br />

“The company revenue<br />

increase is a welcome<br />

development to us, the<br />

shareholders.” At the annual<br />

general meeting, the<br />

shareholders of RAK Unity<br />

Petroleum Company<br />

Plc received and adopted<br />

the audited accounts of<br />

the company for the year<br />

ended December 31, 2017<br />

together with the reports<br />

of the directors and the<br />

auditors thereon.


BUSINESS DAY<br />

INSIGHT/INNOVATION<br />

OGHO OKITI<br />

Dr. Okiti is the president,<br />

Time Economics Ltd<br />

@ Dr_Okiti 081.7153.0058<br />

A<br />

recent Brookings report found<br />

that Nigeria has overtaken India<br />

to become the country with the<br />

largest population of people<br />

living in extreme poverty. The<br />

report, authored by HomiKharas, Kristofer<br />

Hamel, and Martin Hofer, all associates of<br />

the World Data Lab (see Brookings.edu),<br />

claims that Nigeria has 87 million people in<br />

extreme poverty category and that this number<br />

is increasing by 6 people every minute.<br />

So, by the time you have finished reading<br />

this report, there will be 60 more Nigerians<br />

living in extreme poverty.<br />

The report was based on surveys conducted<br />

in April this year, recent economic<br />

growth data from the International Monetary<br />

Fund (IMF), and computed poverty<br />

trajectories for 188 countries in the world. It<br />

concluded that the rise in Nigeria’s poverty is<br />

driven by three parameters – low economic<br />

growth, high inequality, and population<br />

growth. Nigeria’s population growth rate,<br />

currently at 2.6 percent according to the<br />

World Bank, has been growing above Nigeria’s<br />

economic growth rate except for one<br />

quarter in the last three years. This report is<br />

thus one of many recent issues that demonstrate<br />

the seriousness of the implications of<br />

Nigeria’s population dynamics for poverty,<br />

growth and jobs.<br />

At the current growth rate, the United<br />

Nations Department of Economic and Social<br />

Affairs (UN DESA) estimates that Nigeria’s<br />

population will have grown to 410.6 million<br />

by 2050, making Nigeria the third most<br />

populous country in the world, after China<br />

and India. The median age of these 410.6<br />

million people is projected to be 22.5.<br />

In the past, many analysts and public<br />

officials have regarded Nigeria’s rising<br />

52.7%<br />

The percentage of<br />

Nigerians aged<br />

15-34 years who are either<br />

unemployed or under<br />

employed.<br />

population, especially young population,<br />

combined with its vast natural resources,<br />

as a concrete basis for the attraction of<br />

investments. This view was based on the<br />

notion that a rising population will feed,<br />

wear clothes and require shelter, all fundamental<br />

bases for investments. Also, a large<br />

and youthful population, it is argued, will<br />

provide a labour force that can turn Nigeria<br />

into the world’s next manufacturing centre.<br />

Expanding the argument, it is assumed<br />

that, with a large population, Nigeria can<br />

follow the established sustained economic<br />

NEWS YOU CAN TRUST I TUESDAY <strong>21</strong> AUGUST <strong>2018</strong> C002D5556<br />

10.5m<br />

The number of out school<br />

children in Nigeria,<br />

Africa’s<br />

largest oil exporter<br />

Nigeria’s population: Asset or liability<br />

growth pattern in developed economies of<br />

the movement of surplus labour from low<br />

productivity sections of the economy into<br />

high productivity ones, raising incomes,<br />

providing jobs, and provide a platform for<br />

sustained economic growth.<br />

However, that view is now being questioned.<br />

As Nigeria’s population continues<br />

to grow, the country is confronted with a<br />

combination of domestic and international<br />

developments that means that the growth of<br />

its population is now seen, more as a disaster<br />

waiting to happen, rather than a blessing.<br />

Technological changes, unpredictable and<br />

unsustainable economic policies, poor and<br />

weak education, out of school children, immigration<br />

dynamics and populist policies in<br />

the West are few of the dynamics that have<br />

the possibility of turning Nigeria’s population<br />

boom into an unmanageable doom.<br />

How many are there?<br />

According to the Nigeria Population<br />

Commission (NPC) and the National Bureau<br />

of Statistics (NBS), Nigeria’s population<br />

is currently approaching 200 million. The<br />

last census was conducted in 1991, following<br />

the promulgation of Decree 23 of 1989,<br />

which established the NPC. The results of<br />

the census, and that of the 2006 population<br />

and housing census that followed have<br />

never been widely accepted. Indeed, since<br />

the first Nigerian census in 1963, it is widely<br />

accepted that Nigeria has manipulated her<br />

population figures, and doubts have been<br />

cast on successive census. For instance,<br />

Yemi Kale, the Statistician General stated in<br />

a tweet that he doesn’t “think [the population<br />

figures] are correct” and has repeatedly<br />

called for a valid census to ascertain the<br />

correct population of the country.<br />

Nigeria’s census data figures is not only<br />

underpinned by irregularity, since it has<br />

not met the United Nations 10 year benchmark,<br />

but also lack of trust, due to political<br />

reasons, data fragmentation, poor data<br />

management, and Nigeria’s very week data<br />

on birth, deaths, and migration – three key<br />

parameters responsible for the dynamics<br />

of population. Therefore any extrapolations<br />

made on the assumption that Nigeria’s<br />

population is currently 190 million are suspect,<br />

given that it starts from a potentially<br />

inaccurate base.<br />

Notwithstanding, it is clear that Nigeria’s<br />

population is large, it is rising, growing rapidly,<br />

and that the majority of these people<br />

are young; driving up competition for scarce<br />

resources, and resulting in hunger, poor<br />

access to health care and education and<br />

high rate of unemployment and underemployment.<br />

This has been compounded by<br />

1.47m<br />

The number of applications<br />

Nigerian universities<br />

receive yearly out of which<br />

only about 400,000 are<br />

admitted.<br />

Zhexembayeva, a strategist and Founder<br />

of Chief Reinvention Officer, in her TEDx<br />

talk argued that “disruptive” inventions<br />

now happen every three and a half years,<br />

whereas it used to be over 30 years, just 20<br />

years ago. While these shifts are providing<br />

basis for increasing productivity and income<br />

growth, they are also driving the polarisation<br />

of the current and future of work, according<br />

to a May 2017 briefing of McKinsey Global<br />

Institute (MGI) – Technology, Jobs, and<br />

the Future of Work. We are now seeing a<br />

huge gulf of highly and lowly skilled work,<br />

inequality and unemployment.<br />

Indeed, in a developing and emerging<br />

economy like Nigeria with very low technology<br />

adoption, there are concrete examples<br />

that technology is displacing and changing<br />

the nature of work required. For instance,<br />

just in a matter of few years, the number<br />

This “army”, with hopelessness<br />

as their weapon,<br />

are responding with migration,<br />

both legally and<br />

illegally, robbery, advance<br />

fee fraud (419), and kidnapping;<br />

by abusing drugs<br />

such as codeine and Tramadol;<br />

or by engaging in<br />

militant activities in order<br />

to demand a larger share of<br />

government revenues<br />

of low skilled “recharge card” sellers that<br />

have been displaced by the emergence of<br />

the possibility to buy airtime on our phones<br />

from bank application platforms is huge. In<br />

Games Village, one of Nigeria’s largest enclosed<br />

estates, situated in Abuja, there used<br />

to be about 12 young men “fighting” for customers<br />

just two years ago. These days, you<br />

rarely see up to three, and they often sit idly.<br />

Similarly, the emergence of Uber, and<br />

its competitors such as Taxify, international<br />

ride sharing service providers, are driving<br />

unprecedented changes in commercial<br />

rides in Nigeria’s urban areas. Consequently,<br />

traditional taxi drivers, usually of middle age,<br />

are giving way to upwardly mobile youths<br />

taking advantage of the technology changes<br />

that underpin ride-sharing services. From a<br />

customer perspective, Uber and competitors<br />

alike such as Taxify are removing the challenges<br />

associated with traditional taxi such as<br />

haggling, unpredictable behaviour, anonymity<br />

and security problems associated with it.<br />

But technological changes do not happen<br />

in isolation. They are driving social,<br />

economic and cultural changes around the<br />

globe. As technological changes have made<br />

some jobs redundant while enabling outsourcing<br />

of others, there has been increasing<br />

discontent by working class people in developed<br />

countries, which has led to a marked<br />

cultural attitudinal change on immigration.<br />

The last decade has not only seen an increasingly<br />

hostile environment to immigration in<br />

Europe and the US, but this has coincided<br />

with rising unemployment and inequality<br />

in developing countries, which is in turn,<br />

driving up migration from these countries.<br />

For instance, according to Frontex, the<br />

European Border and Coast Guard Agency,<br />

between January 2016 and December 2017,<br />

56,120 Nigerians were detected attempting<br />

to illegally enter Europe. Many do not even<br />

reach Europe, and either die attempting to<br />

cross the Sahara, end up enslaved in Libya, or<br />

die crossing the Mediterranean. In addition<br />

to the Nigerians leaving illegally, increasing<br />

numbers of middle class professionals are<br />

migrating to Canada, the UK, and other countries<br />

where their skills are needed. According<br />

to the Canadian Government, the number<br />

of Nigerians admitted into Canada through<br />

its Express Entry program in 2016 was 1036,<br />

more than ten times the number in 2015.<br />

If technological changes and attitudinal<br />

changes in developed countries are imposed<br />

on Nigeria, soft, weak, and poor economic<br />

policies have certainly contributed to deliver<br />

disastrous job figures. According to the latest<br />

NBS unemployment report, 40% of all<br />

Nigerians, or 34 million people, were either<br />

unemployed or underemployed in the third<br />

quarter of 2017, demonstrating Nigeria’s inability<br />

to create jobs for its citizens. Worse, as<br />

bad as the figures look, our estimation is that<br />

the underemployment is double the current<br />

figures, when the number of redundant public<br />

sector employees is taken into consideration.<br />

For instance, whereas it is common to<br />

see 20 – 30 immigration officials at our Lagos<br />

and Abuja airports, all involved in checking<br />

passports, you typically find about 5 in bigger<br />

entry points in developed economies.<br />

Unemployment and underemployment<br />

is just one of the challenges that Nigerian<br />

youths face. Violent crimes ranging from<br />

kidnapping to robbery and terrorism have<br />

been on the rise in recent years. According<br />

to the NBS, the total number of reported<br />

crimes increased by 7% between 2016 and<br />

2017. Although there is no data available<br />

for the years before 2016, it is likely that the<br />

situation has worsened from earlier years<br />

given the economic deterioration since the<br />

data was published. As increasing numbers<br />

of young people look towards a bleak future<br />

with no light at the end of the tunnel many are<br />

choosing to escape Nigeria either physically<br />

or mentally. According to estimates by the<br />

Nigerian Senate, over three million bottles<br />

of cough syrup with codeine are consumed<br />

every day in just two states, Kano and Jigawa<br />

, while some ignoring the high possibility<br />

of kidnap, rape, slavery, and even death, to<br />

cross the Sahara and the Mediterranean for<br />

a chance at a better life in Europe.<br />

Demography is not destiny: Lessons<br />

from China<br />

In the future, therefore, population growth<br />

may not provide the platform for sustained<br />

economic growth as it did in the past. In theory,<br />

a young and large population should be an<br />

asset for Nigeria. Global manufacturing has<br />

tended to move from richer, more developed<br />

countries, which have high labour costs to<br />

poorer countries with lower labour costs and<br />

large labour forces. Therefore, given its low<br />

wages and large population, Nigeria should<br />

be able to attract a sizeable portion of global<br />

manufacturing from other more developed<br />

countries where wages are rising. Put another<br />

way, as countries develop, average wages rise,<br />

but capital becomes cheap. The movement<br />

of that capital towards cheap labour often<br />

leads to increases in growth, then incomes,<br />

then cheap capital in previously cheap labour<br />

countries.<br />

But this is not given. Policies matter.<br />

Demography is not destiny. Let us look at<br />

the Chinese example. In modern history,<br />

China has always had the largest population<br />

significant and serious economic shifts in<br />

the last two decades.<br />

Technology, jobs, and immigration<br />

Today, the economic shifts are strongly<br />

underlined by technology changes. More<br />

than ever before, these changes are having<br />

serious implications for the number, the<br />

nature, and the location of jobs. These technology<br />

shifts, underpinned by automation<br />

and digital platforms and similar innovations,<br />

are changing the face of work. They<br />

are peculiar because the shifts are faster,<br />

on a huge scale, and transnational. Nadya Continues on page 33<br />

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

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