BusinessDay 21 Aug 2018
Create successful ePaper yourself
Turn your PDF publications into a flip-book with our unique Google optimized e-Paper software.
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 />
ENQUIRIES<br />
NEWS ROOM<br />
08023165438<br />
08169609331<br />
} Lagos<br />
08033160837 Abuja<br />
ADVERTISING<br />
01-2799110<br />
08034743892<br />
SUBSCRIPTIONS<br />
01-2799101<br />
07032496069<br />
07054563299<br />
www.businessdayonline.com<br />
The Brook,<br />
6 Point Road, GRA, Apapa,<br />
Lagos, Nigeria.<br />
01-2799100<br />
LEGAL ADVISERS<br />
The Law Union<br />
MISSION<br />
STATEMENT<br />
To be a diversified<br />
provider of superior<br />
business, financial and<br />
management intelligence<br />
across platforms accessible<br />
to our customers<br />
anywhere in the world.<br />
OUR CORE VALUES<br />
<strong>BusinessDay</strong> avidly thrives on the mainstay of our core values of being The Fourth Estate, Credible, Independent,<br />
Entrepreneurial and Purpose-Driven.<br />
• The Fourth Estate: We take pride in being guarantors of liberal economic thought<br />
• Credible: We believe in the principle of being objective, fair and fact-based<br />
• Independent: Our quest for liberal economic thought means that we are independent of private and public interests.<br />
• Entrepreneurial: We constantly search for new opportunities, maintaining the highest ethical standards in all we do<br />
• Purpose-Driven: We are committed to assembling a team of highly talented and motivated people that share<br />
our vision, while treating them with respect and fairness.<br />
www.businessdayonline.com
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 />
Are you<br />
travelling abroad<br />
for vacation<br />
or studying abroad?<br />
We have you covered through CBN’s special<br />
intervention for specified retail invisible<br />
transactions.<br />
Visit any of our designated branches nationwide<br />
for your following invisible trade transactions:<br />
School Fees<br />
Pilgrimage & Other Travel Allowances (PTA and BTA)<br />
Medical Allowances<br />
We are here to serve you.<br />
*Terms and conditions apply<br />
www.firstbanknigeria.com<br />
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 />
Tel: +233243226596: email: mail@businessdayonline.com Advert Hotline: 08034743892. Subscriptions 01-2950687, 07045792677. Newsroom: 08169609331<br />
Editor: Anthony Osae-Brown. All correspondence to BusinessDAY Media Ltd., Box 1002, Festac Lagos. ISSN 1595 - 8590.