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BusinessDay 22 Aug 2018

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usinessday market monitor<br />

Commodities<br />

Brent Oil<br />

$72.23<br />

Cocoa<br />

US $2,194.00<br />

NSE<br />

Biggest Gainer<br />

Dangcem<br />

Biggest Loser<br />

NB<br />

N<strong>22</strong>9.5 4.32 pc N100<br />

-2.91 pc<br />

35,341.90<br />

Bitcoin<br />

₦2,291,402.96 +0.55 pc<br />

Powered by<br />

Everdon Bureau De Change<br />

Buy Sell<br />

$-N 357.00 360.00<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 **WEDNESDay <strong>22</strong> auGUST <strong>2018</strong> I vol. 15, no 123 I N300 @ g<br />

Capital importation<br />

slides on back<br />

of profit-taking,<br />

election fears<br />

Onyinye NwAChukwu, Conrad Omodiagbe,<br />

Abuja & ENDURANCE OKAFOR, Lagos<br />

Total Investment inflows<br />

into the Nigerian economy<br />

in the second quarter<br />

of <strong>2018</strong> slid to $5.513<br />

billion on the back of profit<br />

taking by some investors which<br />

took toll on the capital market<br />

coupled with fears of uncertainties<br />

surrounding the upcoming<br />

elections.<br />

Continues on page 38<br />

ISAAC ANYAOGU<br />

President Muhammadu Buhari yesterday, trekked over 800m from the prayer ground to his residence amid<br />

chanting of ‘Sai Baba’ by well-wishers in Daura, Katsina State.<br />

As Nigeria keeps oil investors hanging,<br />

peers implement key reforms<br />

Angola bars national oil company from regulator role<br />

Algeria mulls lower fiscal terms, ramps up gas investment<br />

New oil finds in Kenya, Senegal, Tanzania, Uganda bring competition<br />

Prospects for new investments<br />

in Nigeria’s<br />

oil sector does not<br />

look promising as the<br />

country’s inability to<br />

reform the sector could see it<br />

cede markets and new investments<br />

opportunities to its African<br />

peers who are currently<br />

embarking on deep reforms to<br />

make their sectors competitive.<br />

With weak fiscal terms, poorly<br />

regulated sector and lack of a<br />

competitive oil law, Nigeria’s<br />

improved oil sales has not translated<br />

into better value for the<br />

country’s 198million people.<br />

“The world around us is<br />

changing and the danger is that<br />

those of us in this part of the<br />

world who play ostrich, could<br />

be in a dangerous situation<br />

as time will pass quickly and<br />

others would move on,” warns<br />

Victor Eromosele, CEO of M.E<br />

Consulting.<br />

While the global oil industry<br />

is evolving, Nigeria’s laws have<br />

Continues on page 38<br />

Foreign airlines<br />

increase frequency<br />

<strong>22</strong>% on economic<br />

rebound, FX flexibility<br />

... now operate 300+<br />

weekly flights<br />

IFEOMA OKEKE<br />

Foreign airlines are increasing<br />

frequencies into Nigeria<br />

as a result of the in the<br />

country’s economy.<br />

In a recent data released<br />

by African Aviation Services<br />

Limited foreign airlines oper-<br />

Continues on page 38<br />

MARKETS<br />

Why Dangote Sugar<br />

is not having a<br />

sweet year<br />

Emeka Ucheaga & Omobola Adu<br />

Nigeria’s largest sugar<br />

refiner and retailer has<br />

seen revenue and operating<br />

profit drop by 29 percent<br />

and 17 percent respectively in<br />

the first half of <strong>2018</strong> off the back<br />

of a steady decline all year in<br />

Continues on page 38<br />

Inside<br />

US Embassy to<br />

reopen Abuja<br />

office on<br />

Friday P. 2


2 BUSINESS DAY<br />

C002D5556<br />

Wednesday <strong>22</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

NEWS<br />

Stanbic IBTC is top financial institution for capital inflows in Q2 <strong>2018</strong><br />

Omobola Adu, Sobechukwu Eze,<br />

Emeka Ucheaga & David Ibidapo<br />

Stanbic IBTC bank leads<br />

again in terms of the<br />

most amount of capital<br />

inflows into Nigeria<br />

through financial institutions<br />

in Q2 <strong>2018</strong> according to<br />

the data provided by the National<br />

Bureau of Statistics (NBS). Total<br />

capital inflows into Nigeria in Q2<br />

<strong>2018</strong> declined to $5.513 billion<br />

from $6.303 billion recorded in<br />

Q1 <strong>2018</strong>.<br />

Out of the $5.5 billion that<br />

US Embassy to reopen<br />

Abuja office on Friday<br />

IFEOMA OKEKE<br />

The U.S. Embassy has announced<br />

that operations<br />

will resume at its Abuja<br />

Consular office on Friday,<br />

<strong>Aug</strong>ust 24, <strong>2018</strong>.<br />

The embassy made the announcement<br />

yesterday in a statement<br />

on its official website https://<br />

ng.usembassy.gov/.<br />

“The U.S. Embassy in Abuja’s<br />

consular section will re-open on<br />

<strong>Aug</strong>ust 24 for full services for both<br />

visas and American Citizen Services<br />

(ACS). Please note that consular<br />

functions at the U.S. Consulate, Lagos<br />

were never affected and will<br />

continue as usual. We regret the<br />

inconvenience this interruption of<br />

service in Abuja has caused,” the<br />

statement read.<br />

FMBN rent-to-own housing<br />

gulps N65bn in 20 states<br />

Tony Ailemen, Abuja<br />

The Federal Mortgage of Nigeria,<br />

FMBN’s “rent to own<br />

“ housing projects have so<br />

far gulped over N65 billion<br />

with over 20 states benefiting from<br />

the projects.<br />

This is just as FMBN said the<br />

project designed to provide affordable<br />

houses for low income earners<br />

across the 36 states of the Federation<br />

will soon get approval from the<br />

National Economic Council, NEC.<br />

Managing Director of the Bank,<br />

Ahmed Dangiwa, stated this on<br />

Tuesday, after meeting with Vice<br />

President Yemi Osinbajo at the Presidential<br />

Villa, Abuja.<br />

Dangiwa who stated that they<br />

were at the Villa, to see Osinbajo as<br />

a follow up to their request for recapitalization,<br />

said they also briefed<br />

him on some of the activities so far<br />

rolled out , including the Rent to Own<br />

and the introduction of Equity contributions<br />

by the NHF which have<br />

just commenced.<br />

“What is new is that with the Rent to<br />

Own product, you don’t need to have<br />

any equity contribution and secondly,<br />

you enter into the house as a tenant<br />

and over years, it becomes your own<br />

just like owner occupier basis.<br />

The policy introduced by the<br />

FMBN to ease bottlenecks in housing<br />

ownership, is aimed at solving<br />

the problems of debt turnaround<br />

time, as well as eliminates the need<br />

for the off-takers to go through any<br />

flowed into Nigeria in Q2, about<br />

54.9 percent or $3 billion was<br />

imported through Stanbic IBTC<br />

bank. Although, the capital inflow<br />

through Stanbic IBTC bank declined<br />

by a marginal 0.92 percent<br />

in absolute terms, the proportion<br />

of capital inflow through the bank<br />

increased from 48.5 percent in Q1<br />

to 54.9 percent in Q2.<br />

Uchenna Ugah, a former banker<br />

in a Tier 1 bank told <strong>BusinessDay</strong><br />

that “the main reason why we see<br />

Stanbic IBTC dominating in the<br />

capital inflows is due to its status<br />

as an international bank which<br />

It also advised visa applicants<br />

whose appointments were cancelled<br />

during the temporary closure<br />

to expect to be contacted for<br />

rescheduling.<br />

“Visa and ACS applicants with<br />

scheduled appointments for <strong>Aug</strong>ust 24<br />

should come to the Embassy, as usual.<br />

Visa and ACS applicants with cancelled<br />

appointments between <strong>Aug</strong>ust<br />

13 and <strong>Aug</strong>ust 23 will be contacted by<br />

the Embassy for rescheduling.<br />

“Visa and ACS applicants who<br />

were requested by an officer to appear<br />

again for follow-up questions<br />

on existing applications should<br />

contact our office to arrange a new<br />

date,” it said.<br />

The embassy had announced a<br />

temporary closure of its Abuja office<br />

last week for reasons beyond<br />

its control.<br />

... MD seeks NEC’s support<br />

PMB to secure loans before getting<br />

the houses of their choice.<br />

According to him” You just find<br />

the estate that you want and you<br />

enter there in collaboration with<br />

your employer and then the house<br />

becomes your own.<br />

<strong>BusinessDay</strong> gathered that the<br />

projects are already going on in over<br />

20 states of the federation.<br />

Dangiwa said interested off- takers<br />

and contributors to the NHF can<br />

now go and choose the houses they<br />

want within those estates.<br />

“FMB offices within those states<br />

will then profile you and then send to<br />

the head office for approval.”<br />

“The Vice-President appreciated<br />

the efforts that we are making; he<br />

promised to take it to the National<br />

Economic Council meeting for further<br />

deliberations.<br />

“There is not much challenge<br />

apart from the fact that we want<br />

people to come in and know that<br />

NHF is working; to know that the<br />

estates are there for people to go and<br />

choose and then move in.”<br />

He disclosed that the bank had to<br />

seek recapitalisation because commercial<br />

banks have recapitalized<br />

over time, adding that “N5 billion has<br />

been the share capital of the bank but<br />

only N2.5 billion has been paid; even<br />

when other Private Mortgage Banks<br />

have capitalized over N5 billion.<br />

“With the recapitalization of N500<br />

billion, we will attract investment both<br />

local and informal; over ten times<br />

of that investment and it is going to<br />

reposition the bank properly,” he said.<br />

has stronger foreign currency accounts<br />

than other local banks, the<br />

transactions of many multinational<br />

companies are done in dollars<br />

and they would rather move their<br />

money through Stanbic than other<br />

local banks due to their easier access<br />

to foreign currency and short<br />

transaction execution time.”<br />

“A local bank would use various<br />

intermediaries and channels<br />

to transfer funds which could<br />

take a day or two, but using these<br />

international banks transactions<br />

are instantaneous. Another key<br />

reason is that foreign investors and<br />

multinationals are more comfortable<br />

doing international money<br />

transfers with international banks<br />

that they are already familiar with,”<br />

Ugah added.<br />

Other financial institutions,<br />

such as Standard Chartered Bank,<br />

Citibank, Rand Merchant Bank,<br />

Access Bank, Zenith Bank and<br />

Guaranty Trust Bank accounted<br />

for $817 million, $7<strong>22</strong> million,<br />

$<strong>22</strong>0 million, $198 million, $194<br />

million and $132 million of total<br />

R-L: President Vladimir<br />

Putin of Russia<br />

Federation; OPEC<br />

secretary general,<br />

Mohammed Sanusi<br />

Barkindo, and Karin<br />

Kneissl, the foreign<br />

minister of Austria,<br />

during her wedding<br />

ceremony in the<br />

mountains of Styria,<br />

lower Austria over<br />

the weekend.<br />

Oil prices gain after longest weekly loss in 3-Years<br />

DIPO OLADEHINDE<br />

Crude-oil prices gained<br />

to $72.60 on Tuesday<br />

after weeks of losses<br />

which were its highest<br />

in three years as traders ponder<br />

over threats to economic activity<br />

in emerging markets against<br />

global supply risks.<br />

Brent fell to a four-month low<br />

of $70.30 earlier in the week,<br />

down about 13 percent from<br />

a peak of $80.50 in mid-May,<br />

dragged lower by threats in<br />

emerging markets, slower buying<br />

from China, higher OPEC<br />

and Russian production and<br />

concern that trade wars will slow<br />

economic growth and cause<br />

global energy demand to contract.<br />

For Oil market, the latest<br />

flashpoint is the lira crisis in<br />

Turkey, which is dragging down<br />

other currencies sparking fears<br />

of an emerging market crisis<br />

capital inflows respectively into<br />

the country.<br />

A further examination of the<br />

statistics by comparing the capital<br />

inflows in Q2 <strong>2018</strong> to that of Q1<br />

<strong>2018</strong> shows that, capital inflows<br />

through Standard Chartered Bank<br />

declined by 11.30 percent, CitiBank<br />

increased by 43.05 percent,<br />

Rand Merchant Bank fell by 50.67<br />

percent, Access Bank decreased<br />

by 31.33 percent, Zenith Bank<br />

declined by 52.39 percent and<br />

Guaranty Trust Bank increased by<br />

19 percent.<br />

“Other local banks are trying to<br />

be more competitive in this market,<br />

opening branches outside of<br />

Nigeria. We have the likes of Zenith,<br />

Gtbank, and Access among others<br />

opening branches in the United<br />

Kingdom and China all with the<br />

goal for easier access of foreign<br />

currency,” Ugah concluded.<br />

Cumulatively, the amount of<br />

capital inflows through the six<br />

financial institutions and Stanbic<br />

IBTC bank declined from 92.19<br />

percent in Q1 <strong>2018</strong> to 90.71 per-<br />

which has been building for<br />

some time as the International<br />

Energy Agency (IEA) warned<br />

last week that the oil market has<br />

been “cooling down,” which was<br />

partly the result of a restoration<br />

of outages in Libya, but also a<br />

slowing of demand in the second<br />

and third quarters.<br />

For Saudi Arabia, the turmoil<br />

in emerging markets is another<br />

complication in an already testy<br />

environment. OPEC has sought<br />

to adjust production in response<br />

to the unknowns of the impact of<br />

U.S. sanctions on Iranian crude<br />

and the collapse in Venezuelan<br />

output.<br />

Also, the emerging-market<br />

worries were compounded by<br />

signs of slower growth in China,<br />

where the trade dispute with the<br />

U.S. has dimmed the economic<br />

outlook for the world’s secondlargest<br />

economy and its thirst<br />

for oil.<br />

Johnson Chukwu, CEO of<br />

cent in Q2 <strong>2018</strong>. The decline could<br />

be attributed to major increases in<br />

capital inflows through Diamond<br />

bank where capital inflows surged<br />

by 1052.13 percent.<br />

On the other side, capital importation<br />

through United Bank<br />

for Africa, Ecobank Nigeria, Union<br />

Bank of Nigeria, Diamond Bank<br />

and First Bank of Nigeria accounted<br />

for a total of $191 million<br />

in Nigeria in Q2 <strong>2018</strong>.<br />

<strong>BusinessDay</strong> analysis also<br />

shows that capital inflows from<br />

internationally owned banks in<br />

Nigeria (Stanbic IBTC Bank, Standard<br />

Chartered Bank, CitiBank<br />

and Rand Merchant Bank) in Q2<br />

was $4.787 billion, while capital<br />

inflows through Tier one banks<br />

(Access Bank, First Bank, Guaranty<br />

Trust Bank, United Bank for<br />

Africa and Zenith Bank) in Nigeria<br />

was $626 million and inflows<br />

through Tier two banks (Ecobank,<br />

Diamond Bank, Fidelity Bank,<br />

Union Bank of Nigeria and First<br />

City Monument Bank) in Nigeria<br />

was $95 million.<br />

Cowry Asset Management<br />

Limited said, “If the US and<br />

Chinese market slows down<br />

because of a trade war, the implication<br />

is that the demand for<br />

crude oil product will decline,<br />

which could affect Nigeria<br />

exports.”<br />

Managing director of Financial<br />

Derivatives Company Bismarck<br />

Rewane told <strong>BusinessDay</strong><br />

that if the two largest economies<br />

in the world are in a trade war,<br />

then we are likely to see the fall<br />

out.<br />

“So, if there is a trade war we<br />

are going to be caught one way<br />

or the other there might be some<br />

advantages and also disadvantages.<br />

But globally, the whole<br />

world will be affected,” Rewane,<br />

said by Phone.<br />

According to data obtained<br />

from the Bloomberg terminal,<br />

West Texas Intermediate futures<br />

rose 0.56percent to trade<br />

at $66.29.


Wednesday <strong>22</strong> <strong>Aug</strong>ust <strong>2018</strong> BUSINESS DAY 3


Wednesday <strong>22</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

4 BUSINESS DAY


Wednesday <strong>22</strong> <strong>Aug</strong>ust <strong>2018</strong> BUSINESS DAY 5


6 BUSINESS DAY C002D5556<br />

NEWS<br />

Edo urges collective action on forest<br />

preservation, seeks community buy-in<br />

Edo State governor,<br />

Godwin Obaseki,<br />

says his administration<br />

is committed<br />

to partnering<br />

relevant stakeholders to<br />

curb deforestation, calling on<br />

communities to desist from<br />

converting land marked as<br />

forest reserve for private use.<br />

The governor said this at<br />

the Stakeholder Workshop<br />

on Sustainable palm oil development<br />

in Edo State by<br />

Tropical Forest Alliance 2020<br />

Africa Palm Oil Initiative<br />

(TFA2020 APOI) in Benin<br />

City, noting that a bill for the<br />

establishment of a Forestry<br />

Commission, has been sent<br />

to the State House of Assembly<br />

for legislation, as part of<br />

effort to stem the depletion<br />

of the state’s forest reserves.<br />

He said, “We must do<br />

something about our forest<br />

to reclaim and preserve it<br />

from total depletion.”<br />

He explained that on assuming<br />

office as governor, he<br />

was worried over the spate of<br />

illegal logging that occurred<br />

between the late 1990s and<br />

early 2000s, noting, “We inherited<br />

a very robust forestry<br />

sector from our colonial<br />

masters, but over the years,<br />

mismanagement has led to<br />

its depletion.”<br />

The governor expressed<br />

optimism that at the end of<br />

the workshop, participants<br />

would proffer lasting solutions<br />

to issues relating to idle<br />

lands, indiscriminate transfer<br />

of reserved areas to private<br />

individuals, land management<br />

and use.<br />

“What do we do about<br />

host communities where we<br />

have forest reserves and they<br />

engage in sales of forest assets,<br />

thereby resulting in deforestation?”<br />

he questioned.<br />

He tasked participants<br />

to brainstorm on better<br />

ways of policing forest assets<br />

and called for capacity<br />

building for students of tertiary<br />

institutions to protect<br />

forest assets.<br />

He identified oil palm<br />

as a veritable agro-product,<br />

which when fully utilised,<br />

will turn the economic fortune<br />

of the state around.<br />

Joe Okogie, special adviser<br />

to the governor on agriculture<br />

and food security programme,<br />

urged participants<br />

at the workshop to utilise the<br />

opportunity and come up<br />

with workable solutions for<br />

addressing the challenges of<br />

deforestation.<br />

The representative of<br />

Proforest, Abraham Baffoe,<br />

noted that Tropical Forest<br />

Alliance (TFA) 2020 was a<br />

Private Public Partnership<br />

(PPP) that brings together<br />

government, the private sector<br />

and civil society organisations<br />

to eliminate deforestation<br />

from the supply chain<br />

in the production of palm oil,<br />

beef, soy, pulp and paper. He<br />

added that the participants<br />

were gathered to deliberate<br />

on tackling the challenges<br />

of deforestation, which is a<br />

global trend.<br />

Baffoe said as a global<br />

challenge, deforestation relates<br />

to agricultural plantation<br />

development, subsistence<br />

farming, bushfire/wild<br />

fire, charcoal production,<br />

illegal and unsustainable<br />

logging and population and<br />

development pressure.<br />

Speaking on the topic:<br />

“Sustainable, Responsible,<br />

Palm Oil Production by Nigerian<br />

Oil Palm Stakeholders,”<br />

the Managing Director<br />

of Okomu Oil Plc, Graham<br />

Hefer, charged stakeholders<br />

to be committed in ensuring<br />

that the objectives of<br />

TFA are realised.<br />

He identified areas where<br />

stakeholders need to demonstrate<br />

more commitment to<br />

include: transparency, long<br />

term economic and financial<br />

viability, conservation of natural<br />

resources and biodiversity,<br />

responsible consideration<br />

of employees and local<br />

communities, responsible<br />

development of new plantations<br />

and commitment to<br />

continuous improvement.<br />

Oyo State governor, Abiola Ajimobi (r), with some youths at the Eid Prayer Ground, in Ibadan, Oyo State, yesterday.<br />

Enyimba Economic City: Abia to compensate host communities<br />

GODFREY OFURUM, Aba<br />

Abia State government<br />

has promised<br />

to compensate host<br />

communities of the<br />

proposed Enyimba Economic<br />

City, Aba.<br />

Governor Okezie Ikpeazu<br />

made the pledge in Aba at<br />

a meeting with stakeholders<br />

of Ukwa East, Ukwa West<br />

and Ugwunagbo LGAs, landowners,<br />

where the Enyimba<br />

Economic City is to be sited,<br />

stating that he remained consistent<br />

in his vision, commitment<br />

and effort towards realising<br />

the project.<br />

According to Ikpeazu,<br />

the compensation will help<br />

to boost the commitment of<br />

the landowners who would<br />

also be co-drivers of the project,<br />

through the monitoring<br />

of every stage of its development.<br />

The governor urged the<br />

stakeholders to set up committees<br />

in their communities<br />

that would sensitise their people<br />

on the need to support the<br />

project, which he said would<br />

provide about 500,000 jobs to<br />

Abia citizens.<br />

He called on the youths of<br />

the areas to prepare and equip<br />

themselves educationally, in<br />

order to take up lucrative opportunities<br />

that would be available<br />

when the city was realised.<br />

He commended the<br />

stakeholders and traditional<br />

rulers, who appeared at<br />

several meetings held, to<br />

stress the benefits of giving<br />

their agricultural lands for<br />

industrial purposes, which<br />

would in turn provides sustainable<br />

opportunities to<br />

future generations.<br />

He announced that the<br />

major bottleneck of power<br />

supply to the city had been<br />

tackled and expressed joy<br />

over the readiness of the people<br />

to partner in the project.<br />

Uche Ihediwa, commissioner<br />

for lands and survey,<br />

explained that the ministry’s<br />

interaction with the 33<br />

communities involved had<br />

reached an advanced stage.<br />

He stated that the ministry<br />

was half-way through its<br />

second tour of the communities<br />

“preparatory to enumeration,<br />

valuation, compensation<br />

and commencement of<br />

construction.”<br />

HOPE MOSES-ASHIKE<br />

EMMANUEL NDUKUBA, Awka<br />

Anambra State<br />

commissioner for<br />

industry, trade<br />

and commerce,<br />

Christian Madubuko, has<br />

been commended for<br />

achieving some feat in recovery<br />

about N300 million<br />

within five months of assumption<br />

of office.<br />

Peter Ibida, chairman,<br />

Anambra State House of Assembly<br />

Committee on Commerce<br />

and Industry, made<br />

the commendation during<br />

an oversight function to the<br />

ministry by his committee.<br />

The committee was in<br />

the ministry to oversee the<br />

disbursement and implementation<br />

of 2017 budget,<br />

as well as to know the progress<br />

made in implementation<br />

of the <strong>2018</strong> budget.<br />

The lawmaker said most<br />

of the committee members<br />

incidentally were members<br />

of finance and appropriation,<br />

which handle the<br />

budget. He emphasised<br />

that in the course of appropriation,<br />

it was discovered<br />

that the ministry’s alloca-<br />

Federal Road Safety<br />

Corps (FRSC), Anambra<br />

State Command<br />

Mobile Court in Awka<br />

has convicted 34 motorists for<br />

various road traffic offences.<br />

Sunday Ajayi, sector<br />

commander of the Corps in<br />

the state, made the disclosure<br />

in Awka on Tuesday,<br />

saying the measure would<br />

go a long way to reduce road<br />

crashes and ensure safety of<br />

motorists and commuters<br />

on the highways.<br />

He explained that the mobile<br />

court was the best way to<br />

convict road traffic offenders,<br />

saying, “They receive fair<br />

hearing.”<br />

The offences committed included<br />

expired driver’s licence,<br />

seatbelt violation, and absence<br />

of fire extinguishers, number<br />

Wednesday <strong>22</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

Delta Economic Summit Group sets up global network of state indigenes<br />

Following increasing<br />

requests by Delta<br />

State indigenes for<br />

credible information<br />

about social and economic<br />

activities in the state, Delta<br />

Economic Summit Group<br />

(DESG) has created a platform<br />

called ecoVine, which<br />

is basically a global list of indigenes.<br />

EcoVine is open to Deltan<br />

professionals around the<br />

world, providing members<br />

with valuable social and<br />

economic information and<br />

networking opportunities.<br />

The platform gives Deltans<br />

an opportunity to become<br />

affiliate members of DESG<br />

at no cost. “Ants are successful<br />

creatures; because they<br />

Lawmaker commends commissioner for<br />

recovering N300m revenue in 5 months<br />

FRSC convicts 34 traffic offenders in Anambra<br />

EMMANUEL NDUKUBA, Awka<br />

know very well that the mind<br />

of the team is superior to<br />

the mind of the individual,”<br />

Ese Onosode, chairman of<br />

DESG, said.<br />

Once ecoVine is<br />

launched, DESG will publish<br />

informative content for the<br />

benefit of all Deltans through<br />

digital media and traditional<br />

platforms. ecoVine will be a<br />

reliable platform for accessing<br />

social and economic information<br />

on Delta State.<br />

DESG is a private sector<br />

led think tank established in<br />

2015 to promote socio-economic<br />

development in Delta<br />

State. It is a non-partisan, not<br />

for profit organisation of professionals<br />

of Deltan origin.<br />

The executives of the<br />

group include: Chukwuka<br />

Monye, director general, an<br />

tion was not disbursed and<br />

questioned the reason only<br />

N9 million was released of<br />

N974 million budgeted for<br />

the ministry.<br />

The chairman then<br />

urged the commissioner to<br />

pursue and get the amount<br />

appropriated to the ministry<br />

in order to build tangible<br />

projects, as legacy of the<br />

ministry in the state.<br />

The commissioner<br />

pleaded the committee to<br />

ensure that good amount<br />

would be budgeted next<br />

year to enhance the execution<br />

of capital projects.<br />

He said such projects<br />

would include expanding<br />

standardised international<br />

modern markets, encouraging<br />

industries to generate<br />

more employments for<br />

the youths, building integrated<br />

trade fair complex<br />

and other projects.<br />

“We want to organise this<br />

year’s Trade Fair in such a<br />

way that it will become a<br />

landmark, different from<br />

what it has been in the past,<br />

so as to attract what is happening<br />

in oversees here,’’ the<br />

commissioner said.<br />

plate and worn-out tyre.<br />

Others are failure to install<br />

speed limiting device,<br />

road obstruction, and assaulting<br />

of FRSC Marshal on<br />

duty as well as reckless driving<br />

among others.<br />

He restated the determination<br />

of the command to reduce<br />

the rate of road crashes<br />

in the state, adding that the<br />

mobile court proceedings<br />

would be a routine exercise.<br />

The commander admonished<br />

drivers to ascertain<br />

the condition of their vehicles<br />

before plying highways,<br />

desist from over speeding,<br />

overloading and dangerous<br />

overtaking especially during<br />

this rainy season.<br />

He said the mobile court<br />

gave the traffic offenders various<br />

jail terms ranging from<br />

two months in prison with<br />

option of fines.<br />

alumnus of University of Oxford<br />

and managing partner<br />

of Ciuci Consulting, a leading<br />

management consulting firm<br />

with a regional office in Delta<br />

State, and Brian Hammond,<br />

deputy director general, an<br />

alumnus of Imperial College,<br />

UK, and a financial expert<br />

and agripreneur with a<br />

3,500-hectare oil palm plantation<br />

in Delta State.<br />

Others are Isioma Udeozo,<br />

treasurer, expert in business<br />

development, establishing<br />

and managing strategic<br />

alliances and partnerships,<br />

and Hamilton Esi, public<br />

relations officer, a corporate<br />

communications expert<br />

who currently serves as the<br />

vice president for LEKOIL’s<br />

corporate communications<br />

function.


Wednesday <strong>22</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

90m Nigerians without electricity<br />

supply mean market for SHS<br />

STEPHEN ONYEKWELU<br />

The Solar Home<br />

Systems (SHS)<br />

market has gathered<br />

significant<br />

momentum and<br />

is transforming the lives of<br />

rural communities starved of<br />

electricity supply from the national<br />

grid, Beyond the Grid, a<br />

new documentary shows.<br />

According to the World<br />

Bank, nearly 1.5 billion people<br />

are estimated to lack electricity<br />

supply in the world, half<br />

are in Africa. Nigeria alone<br />

is estimated to have over 90<br />

million people living without<br />

electricity supply. This is potential<br />

market for SHS.<br />

“Osoogun in Oyo State is<br />

a rural community I recently<br />

documented. They are connected<br />

to the national grid,<br />

yet never enjoyed electricity.<br />

Sadly, no light for over<br />

one year, but now they’re<br />

very excited that SHS will be<br />

provided for them,” Adesoji<br />

Adejolu, creative director at<br />

Ultrashot, a media production<br />

and event streaming<br />

company, said on TweetChat<br />

under the aegis of #GridlessAfrica.<br />

Adejolu strives to use<br />

cinematic experience, #BeyondTheGridMovie<br />

to investigate<br />

the various ways<br />

decentralised renewable<br />

energy bridges electricity<br />

supply gaps and provides<br />

an alternative source of<br />

power in Nigeria.<br />

“In the next 5-10 years,<br />

I believe there will be a<br />

significant increase in the<br />

deployment of decentralised<br />

renewables in Nigeria<br />

and Africa especially in<br />

the off-grid areas ravaged<br />

by energy poverty. There<br />

is a huge market with a lot<br />

of economic potentials,”<br />

Adejolu said.<br />

Access to finance is one<br />

of the major limitations to<br />

the rapid development of<br />

solar energy in Africa. But<br />

while traditional methods<br />

of obtaining project capital<br />

can be very limiting. Today’s<br />

world of micro-investors on<br />

platforms such as Kickstarter<br />

and Indiegogo has paved the<br />

way for new platforms like<br />

SunExchange.<br />

“What that allows is for<br />

individuals like you and I<br />

too invest as much or as little<br />

without the constraints and<br />

hurdles banks throw at startup<br />

entrepreneurs. You can<br />

invest in a cell, a panel or an<br />

entire array,” David Hampson,<br />

emerging leader in the<br />

renewable energy sector said<br />

during <strong>Aug</strong>ust 9 TweetChat<br />

organised by Gridless Africa.<br />

With sustained investment<br />

and expansion, in<br />

ten years, there would be<br />

larger networks of micro-<br />

grids working together and<br />

independent from the grid.<br />

Maybe even integrate to the<br />

network. It would be like<br />

Europe during the 1800s with<br />

the industrial revolution and<br />

coal fired generation.<br />

“With low electrification<br />

rates across sub-Saharan Africa,<br />

micro-grids can provide<br />

a relief on existing networks<br />

and no longer need to transport<br />

electricity over great distances<br />

increasing efficiency.<br />

Generate where it is needed,”<br />

Hampson said.<br />

One example of where<br />

mini-grids are providing<br />

electricity and making lives<br />

better is Burundi. There, solar<br />

powered ovens are providing<br />

business opportunities for<br />

women. Not only economically<br />

with a bakery business,<br />

but also with no longer requiring<br />

firewood, quality of<br />

life/health increases due to<br />

no smoke inhalation.<br />

L-R: Melville Ebo, executive director, finance and corporate services, Federal Mortgage Bank (FMB); Rahimatu<br />

Aminu, executive director, FMB; Dangiwa Ahmed, managing director, FMB, and Vice President Yemi<br />

Osinbajo, during a visit to the Vice President by FMB executives at the Presidential Villa in Abuja.<br />

Government orders arrest of two-man fake motor licensing syndicate<br />

The Edo State government<br />

has ordered<br />

the arrest<br />

of two persons for<br />

allegedly operating a fake<br />

motor licensing syndicate<br />

and defrauding unsuspecting<br />

members of the public.<br />

The two suspects are Igbinidu<br />

Osagbemworhue<br />

and Austin Nwadili, who<br />

were allegedly processing<br />

fake motor licence and vehicle<br />

particulars.<br />

Emmanuel Orukpe, senior<br />

special assistant to the<br />

Governor on Security and<br />

Surveillance, said the suspects<br />

were apprehended<br />

when a team of surveillance<br />

operatives tracked them<br />

and uncovered their dealings<br />

in fake motor vehicle<br />

particulars.<br />

According to Orukpe,<br />

“The suspects in the course<br />

of a fresh negotiation for<br />

the production of drivers’<br />

licences were arrested. The<br />

two suspects who were arrested<br />

gave their names as<br />

Igbinidu Osagbemworhue<br />

and Austin Nwadili.<br />

“The suspects were<br />

searched on the spot and<br />

found with two sets of drivers’<br />

licences, bearing the<br />

name of one of the suspects,<br />

Austine Nwadili, suspected<br />

to be fake; Courier Service<br />

Report belonging to Mr Igbinidu,<br />

which was suspected<br />

to have been unlawfully<br />

obtained and one suspected<br />

fake PCRC ID Card bearing<br />

the name Igbinidu.”<br />

He said the suspects<br />

claimed that the documents<br />

were perfected by another<br />

suspect who hanged<br />

around the premises of the<br />

Board of Internal Revenue.<br />

He said investigations<br />

on the documents found<br />

on them showed that they<br />

were fake, as, “the two documents<br />

bear the same date,<br />

whereas the one with Reg.<br />

No. ASB372 RK was handed<br />

over before the one with No.<br />

EJ543 BEN. The Certificate<br />

of Road Worthiness seems<br />

to have originated from<br />

ML 9. The Road Worthiness<br />

Certificates for the two<br />

vehicles which were purported<br />

to have been issued<br />

on the same day were also<br />

from different booklets.”<br />

Nigeria had the lowest<br />

score of <strong>22</strong>.4 in<br />

Global Innovation<br />

Index (GII) 11th<br />

edition when compared with<br />

other top African countries,<br />

though it was an improvement<br />

from its previous score<br />

of 21.92 in 2017.<br />

South Africa led with<br />

35.1, following behind is<br />

Kenya and Morocco with a<br />

score of 31.1, Egypt (27.2),<br />

and Algeria (23.9).<br />

Tech hubs are popping<br />

all over Africa and high-level<br />

academic programs to train<br />

the next generation are being<br />

launched, yet Africa’s<br />

biggest economy had the<br />

lowest rate of innovation.<br />

The GII aims to capture<br />

the multi-dimensional facets<br />

of innovation and provide<br />

the tools that can assist<br />

in tailoring policies to<br />

promote long-term output<br />

growth, improved productivity,<br />

and job growth. The<br />

GII helps to create an environment<br />

in which innovation<br />

factors are continually<br />

evaluated.<br />

The report examined the<br />

innovation performance of<br />

126 countries with 80 indicators<br />

averaged to reflect the<br />

capacity for, and success in<br />

innovation.<br />

For Nigeria, market sophistication<br />

indicator score<br />

improved from 40.2 out of<br />

100 in 2017 to 41.7 in <strong>2018</strong>,<br />

Institutions improved from<br />

39.6 to 44.7, business sophistication<br />

score increased<br />

from 21.7 to 23.5, and<br />

Knowledge and Tech output<br />

increased from 9.9 to 10.3.<br />

On the other hand, Human<br />

capital and research<br />

declined from 15.1 to 12.9,<br />

infrastructure declined from<br />

28.2 to 26.5, and creative<br />

output declined from 19.9 to<br />

19.5 same period.<br />

With an average regionwide<br />

score of 25, only eight of<br />

the countries in the top 100<br />

World Mosquito Day: Edo urges sustained effort to end malaria scourge<br />

Governor Godwin<br />

Obaseki of Edo<br />

State has called for<br />

sustained effort by<br />

scientists, health workers and<br />

governments across the globe<br />

in championing the fight<br />

against malaria since the discovery<br />

that female mosquitoes<br />

are responsible for spread of<br />

the ailment between humans.<br />

The governor said this in<br />

commemoration of the World<br />

Mosquito Day celebrated<br />

across the world in honour of<br />

Sir Ronald Ross’s discovery<br />

that female mosquitoes are responsible<br />

for transmission of<br />

the disease between humans.<br />

Obaseki said efforts to<br />

curb the malaria scourge has<br />

recorded impressive result in<br />

Edo State, following the ag-<br />

C002D5556<br />

Nigeria ranks lowest in<br />

Global Innovation Index<br />

OGHOGHO EDOSOMWAN & CYNTHIA IKWUETOGHU<br />

gressive distribution of insecticidal<br />

nets across the state,<br />

pledging to exceed the previous<br />

distribution figures.<br />

He however stressed that<br />

much more work is needed by<br />

relevant stakeholders to bring<br />

succour to millions of people<br />

who are at risk of the disease.<br />

He said the state government<br />

is revamping the primary<br />

health care sector in the<br />

state to respond to the needs of<br />

the people, and to ensure necessary<br />

infrastructure is available<br />

to combat ailments such<br />

as malaria in rural areas.<br />

According to Obaseki, “As<br />

we mark World Mosquito Day,<br />

it presents another opportunity<br />

to reflect on the successes and<br />

failures recorded over the years<br />

in the fight against malaria.<br />

BUSINESS DAY<br />

7<br />

NEWS<br />

… SSA, least with 25 points<br />

were from Sub-Saharan Africa.<br />

Of the ten countries with<br />

the least success in innovation,<br />

eight were Sub-Saharan<br />

African countries.<br />

North America is the most<br />

innovative region with an<br />

average score of 56, Europe<br />

was not too far behind with a<br />

score of 47, SE Asia, E Asia &<br />

Oceania followed with a score<br />

of 44, N Africa & Western Asia<br />

with 34, Latin America & Caribbean<br />

with 30, and Central<br />

& Southern Asia with 28 and<br />

Sub-Saharan Africa with 25.<br />

However, there is a broad<br />

view that innovation in Africa<br />

prospers despite its environment<br />

as individuals from<br />

some of the most challenging<br />

environments figure out ways<br />

to tackle their problems.<br />

For example, this year’s<br />

Africa Prize for Engineering<br />

Innovation was awarded<br />

to Brian Gitta, a 24-year old<br />

Ugandan engineer for his<br />

invention of a bloodless malaria<br />

test and this month a<br />

team of five Nigerian schoolgirls<br />

picked up top prize at a<br />

Silicon Valley competition for<br />

their app which helps identify<br />

fake drugs.<br />

The core of the GII Report<br />

consists of a ranking of world<br />

economies’ innovation capabilities<br />

and results. Over<br />

the last ten years, the GII has<br />

established itself as a leading<br />

reference on innovation. Understanding<br />

in more detail<br />

the human aspects behind<br />

innovation is essential for the<br />

design of policies that help<br />

promote economic development<br />

and richer innovationprone<br />

environments locally.<br />

Recognising the key role of<br />

innovation as a driver of economic<br />

growth and prosperity,<br />

and the need for a broad horizontal<br />

vision of innovation<br />

applicable to developed and<br />

emerging economies, the GII<br />

includes indicators that go<br />

beyond the traditional measures<br />

of innovation such as the<br />

level of research and development.<br />

Scientists and governments<br />

have worked hard to deliver the<br />

drugs to millions of people and<br />

in containing the disease.<br />

“However, in the light of<br />

discoveries that the disease is<br />

resisting earlier proven remedies,<br />

there is need for sustained<br />

action and doubling<br />

of efforts by all concerned<br />

stakeholders. So, researchers,<br />

health workers and governments<br />

who have worked to reduce<br />

the impact of the disease<br />

are called upon to do more, to<br />

save more lives.”<br />

He noted that the state<br />

government’s campaign to<br />

revamp the state’s health care<br />

sector would ensure that the<br />

people are better prepared<br />

and receive adequate health<br />

care services.


8 BUSINESS DAY C002D5556<br />

NEWS<br />

Nigeria delays as Mexico’s petroleum<br />

sector reforms gather steam<br />

STEPHEN ONYEKWELU<br />

Nigeria wants to<br />

reform its petroleum<br />

sector as the<br />

Petroleum Industry<br />

Bill (PIB) indicates but<br />

foot drags while Mexico’s oil<br />

industry reforms pass economic<br />

and political tests.<br />

Nigeria has been seeking<br />

to reform its petroleum<br />

sector in order to attract the<br />

much needed foreign investment<br />

into its oil and gas sector,<br />

Mexico offers an example<br />

of a crude oil exporting<br />

nation that has tenaciously<br />

sought to re-invent its oil<br />

and gas sector through relevant<br />

legislations and constitutional<br />

amendments, to<br />

make the sector competitive<br />

and repositioned as an energy<br />

hub, taking advantage<br />

of the North America Free<br />

Trade Agreement (NAFTA).<br />

“Nigeria does not have<br />

an oil and gas industry. It is<br />

simply a country that produces<br />

and exports crude oil.<br />

To have a thriving oil and gas<br />

sector, a robust legal framework<br />

is needed,” Austin Avuru,<br />

CEO, Seplat, an indigenous<br />

upstream company,<br />

said at recent event in Lagos.<br />

In 2013, Mexico set out to<br />

reform its oil and gas sector<br />

through the Energy Reform<br />

initiative. This bore some<br />

fruits. The first to take advantage<br />

of the reforms will<br />

be Mexican business owners<br />

who will form the first<br />

generation of privately held<br />

energy companies to invest<br />

in hydrocarbons.<br />

For Mexico, the reform<br />

represents a paradigm shift.<br />

Gone is the dominance<br />

of state-owned Petroleos<br />

Mexicanos (PEMEX). There<br />

exists the potential to see<br />

increased investment in the<br />

energy sector and increased<br />

production from the current<br />

2.4 million barrels a day<br />

(mmpd), to 3mmpd in <strong>2018</strong><br />

and 3.5mmpd in 2025.<br />

However, Nigeria risks<br />

losing a chunk of money<br />

spent on international consultants,<br />

organising public<br />

hearings and thousands of<br />

hours work on the PIB as the<br />

race for 2019 elections takes<br />

the shine away from important<br />

legislations that will<br />

stop an estimated $15 billion<br />

annual investment loss to<br />

the economy.<br />

It was difficult passing an<br />

omnibus petroleum industry<br />

bill in the past 17 years<br />

until it was broken down<br />

into four aspects: the Petroleum<br />

Industry Governance<br />

Bill (PIGB), the Fiscal Regime<br />

Bill, the Upstream and<br />

Midstream Administration<br />

Bill and the Petroleum Revenue<br />

Bill, otherwise known as<br />

the host community aspect<br />

– with a decision to pass the<br />

less controversial ones first.<br />

“If they do not complete<br />

work on the bill, before the<br />

end of their tenure in 2019,<br />

they will have to start afresh<br />

and all the work done on the<br />

bills will be lost. This is not<br />

good news for the sector at<br />

all,” Uche Obi, managing<br />

partner of Lagos-based Alliance<br />

Law firm told Business-<br />

Day by phone.<br />

In contrast, Nigeria has<br />

been unable to attract significant<br />

investment in over a<br />

decade and projects including<br />

the 120,000bpd Zabazaba-Etan<br />

project; 140,000bpd<br />

Bosi project; 110,000bpd<br />

Uge project and 100,000bpd<br />

Nsiko Deepwater projects<br />

have not progressed. The<br />

one billion barrel Owowo<br />

field development is also<br />

waiting on the right fiscal<br />

terms among other conditions<br />

for it to reach a final<br />

investment decision.<br />

Furthermore, the Mexican<br />

government anticipates<br />

an additional one percent<br />

in Gross Domestic Product<br />

195 customers rewarded in Quickteller Delight promo<br />

Quickteller, the<br />

preferred portal<br />

for everyday<br />

payments in Nigeria,<br />

recently rewarded<br />

some of its esteemed customers<br />

at the Quickteller<br />

Delight promo draws held<br />

at the Interswitch Group<br />

head office in Lagos.<br />

Quickteller Delight<br />

promo is a reward initiative<br />

deliberately designed<br />

to give back to customers<br />

who have consistently<br />

made essential payments<br />

via the Quickteller website<br />

and mobile app. Staying<br />

true to Quickteller’s<br />

value proposition of making<br />

everyday payments<br />

easy, a total of 195 customers<br />

emerged as winners<br />

in eight categories<br />

via transparent electronic<br />

draws in line with predefined<br />

eligibility criteria.<br />

The eight promo categories<br />

were: electricity<br />

payments, cable TV subscriptions,<br />

fund transfers,<br />

toll payments, broadband<br />

internet payments, betting<br />

wallet funding, domestic<br />

flights payments<br />

and airtime recharge.<br />

Prizes won were threemonths<br />

DSTV premium<br />

subscription for 40<br />

winners, three-months<br />

broadband internet sub-<br />

scription for 40 winners,<br />

N20,000 e-Tag credit for<br />

20 winners and N50,000<br />

cash prize for 20 winners.<br />

Other prizes were<br />

N80,000 domestic flight<br />

tickets for five winners,<br />

N10,000 betting credit for<br />

40 winners, N19,200 electricity<br />

credit (post-paid<br />

and pre-paid) for 10 winners<br />

and N15,000 airtime<br />

value over three months<br />

for 20 winners.<br />

Speaking at the draws,<br />

Group Head, Digital<br />

Payments (Product and<br />

Marketing Management)<br />

at Interswitch, Adetayo<br />

Teluwo stated that the<br />

promo is an expression<br />

of the company’s appreciation<br />

to the customers.<br />

He said: “Our business<br />

revolves around our<br />

customers and we fully<br />

understand they are the<br />

centre of our universe.<br />

We really cannot do much<br />

without their consistent<br />

trust and belief in our offerings<br />

by way of patronage<br />

and loyalty. We owe<br />

it to our extensive biller<br />

network to continue to<br />

grow their business volumes.<br />

Quickteller Delight<br />

is a commitment on our<br />

part to fulfil our ‘everyday<br />

payments made easy’<br />

mandate”.<br />

Wednesday <strong>22</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

Maduabuchi Nnaji<br />

who won N50,000.00 in<br />

the promo said his excitement<br />

knew no bounds<br />

when he was contacted<br />

as one of the winners.<br />

“When I was making the<br />

transaction via Interswitch,<br />

I didn’t believe I<br />

was going to win. Thank<br />

you very much. I am very<br />

happy,” he said.<br />

The draws were conducted<br />

in the presence of<br />

representatives of the National<br />

Lottery Regulatory<br />

Commission (NLRC),<br />

Customer Protection<br />

Council (CPC) and the<br />

media.<br />

The Quickteller Delight<br />

promo ran from<br />

April 16 to July 31, <strong>2018</strong><br />

and offered customers<br />

an opportunity to choose<br />

the category within<br />

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Wednesday <strong>22</strong> <strong>Aug</strong>ust <strong>2018</strong> BUSINESS DAY 9


Wednesday <strong>22</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

10 BUSINESS DAY<br />

C002D5556<br />

COMMENT<br />

SMALL BUSINESS HANDBOOK<br />

EMEKA OSUJI<br />

Dr Emeka Osuji<br />

School of Management and<br />

Social Sciences<br />

Pan Atlantic University<br />

Lagos. eosuji@pau.edu.ng @Emyosuji<br />

Still in the conviction that<br />

our poverty reduction<br />

strategies will be better<br />

able to serve our needs<br />

and be more effective if<br />

we understand what is fuelling the<br />

scourge, we continue to name and<br />

if possible shame those institutions<br />

and phenomena, which we<br />

believe promote poverty and must<br />

change if we are to make progress<br />

with the fight against poverty. Our<br />

first culprit, identified last week,<br />

was the form of government –<br />

the presidential system - run as<br />

a winner-takes-all enterprise in<br />

Nigeria. We noted that the cost<br />

and unaccountable nature of that<br />

system sucks resources away from<br />

the people to a few mostly incompetent<br />

and unpatriotic self-seeking<br />

persons. By the political system we<br />

include all arms of government and<br />

the presidential system itself. With<br />

a judicial system that is anything<br />

but alert to protect the rights of<br />

citizens, the routing of the people<br />

by those who win political power<br />

is complete. This is more so in an<br />

environment where the legislature<br />

is weakened and dogged by credibility<br />

gaps evidenced by shameful<br />

carpet crossings and constituency<br />

comment is free<br />

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

Poverty generators and the challenge of microfinance<br />

(4): Unemployment and vanishing middle class<br />

projects, lack of transparency and<br />

evident self-interest of members.<br />

The result is the perpetuation of<br />

inequity, inequality and intense<br />

pressure on the middle class.<br />

The current political system,<br />

structure and process, which focus<br />

on the sharing of national wealth,<br />

without as much as an inkling of<br />

the idea of expanding the wealth,<br />

is a national disaster. A system that<br />

guarantees the security of criminals<br />

rather than that of its citizens;<br />

a system that has taken over 40<br />

years to contemplate economic<br />

diversification without as much as<br />

laying the first foundation stone for<br />

it; a system that awards national<br />

prestige to those who steal the<br />

most state resources and has no<br />

place for research, innovation and<br />

the intellect, is bound to produce<br />

the present chaos – tons of money<br />

in multiple currencies found in<br />

private homes and no convictions;<br />

failure of appointed and elected<br />

officials to deliver on the job but<br />

assured of the job security and<br />

re-election; fugitives running to<br />

the source of power as insurance<br />

against justice.<br />

The failure of the current system<br />

of governance, traceable to the<br />

presidential system of government<br />

and the structure of the federation,<br />

has begun to tilt us towards the<br />

unthinkable, a feeling of safety only<br />

among our clan. The freedom to<br />

loot and be honoured has led politicians<br />

to promise us hell if they are<br />

not elected allowed to stay in office.<br />

The juice is so sweet that many<br />

are prepared to burn down their<br />

states if their sons and daughters<br />

are not allowed to continue from<br />

‘<br />

Our inability to revive the<br />

middle class is hurting all<br />

classes. Despite this, small<br />

companies formed and run<br />

by the middle class have<br />

recently come under fire<br />

from the internal revenue<br />

agencies of both state and<br />

federal governments<br />

’<br />

where they stopped in sucking the<br />

people’s resources. As of now, only<br />

very few people endowed with the<br />

spirit of work still work in Nigeria.<br />

Most public officials are looking for<br />

what to take, from anywhere, because<br />

justice is long dead and any bit of it<br />

alive has a price in the market. This is<br />

what happens when you give signal<br />

that justice is variable. Any system<br />

that cannot guarantee justice has<br />

guaranteed poverty as the powerful<br />

exclude the weak.<br />

Today, the most important thing<br />

to some of us, especially the younger<br />

generation, is a share of political office.<br />

That shows the direction of our<br />

emphasis – access to the national<br />

till. We are all aware, self-interest<br />

and pretences apart, that the problem<br />

with Nigeria is not the age of it<br />

leaders, granted that the younger<br />

the leader, the more effective, but<br />

its political structure. The structure<br />

promotes incompetence and entitlement<br />

mentality rather than competition<br />

and innovation. It kills the<br />

spirit of patriotism and advances the<br />

tendency to tribe and clan. Surely,<br />

such a system could be hijacked by<br />

bigots and will not be healed only<br />

by the transfer of political power on<br />

the basis of age.Besides. A nation<br />

whose young people, who ought to<br />

be busy churning out inventions in<br />

STEM, obsess themselves with the<br />

thought of how to get into the murky<br />

corruption brigade of stealing and<br />

deceit calledNigerian politics has<br />

more coming. Whether the leader<br />

is young or old, Nigeria will not go<br />

far with its present expensive governance<br />

system that has no pace for<br />

merit but over rewards the cheat.<br />

The animal that bit the elders is still<br />

alive and will happily swallow the<br />

youths.<br />

Today, as we return to name<br />

the agents of poverty in Nigeria,<br />

we identify unemployment, arising<br />

from thecontracting labour market,<br />

manifesting in high and rising levels<br />

of family distress,as another major<br />

contributor to the poverty in Nigeria<br />

and the hardship of its people.<br />

Although high unemployment is a<br />

derivative of the failure of leadership,<br />

we single it out for emphasis.<br />

Unemployment is the absence of<br />

rewarding income earningengagement<br />

for labour.The nation is currently<br />

facing an unprecedented rise<br />

in drug abuse and deviant behaviour<br />

among the youth. Some people<br />

think there is something innate in<br />

these young people pushing them<br />

into these negative activities. The<br />

blame has been going round from<br />

poor parenting, the favourite fall<br />

guy, to unpatriotic behaviour of<br />

traders, who sell illicit substances.<br />

The truth is that these are at best,<br />

accessories or contributors to the<br />

malaise. The real culprit is frustration,<br />

bred by idleness and a feeling<br />

of failure. We may be investing but it<br />

our investment is below the critical<br />

mass that would jolt the economy<br />

through massive job creation.<br />

The key challenge in many families<br />

today is how to save their youngsters,<br />

who have worked hard to earn<br />

university degrees, from falling into<br />

depression. Some families have just<br />

created their first graduates. They<br />

sold land and other resources to<br />

pay the fees and now the state is not<br />

even doing anything. Government<br />

intention may be good but failure to<br />

convert it to tangible preoccupation<br />

for the youth is a disappointment.<br />

Our inability to revive the middle<br />

class is hurting all classes. Despite<br />

this, small companies formed and<br />

run by the middle class have recently<br />

come under fire from the<br />

internal revenue agencies of both<br />

state and federal governments.<br />

Instead of finding creative winwin<br />

strategies to raise taxes, and<br />

get enhanced compliance (knowing<br />

what happens to tax revenue<br />

in countries with unaccountable<br />

leadership) governments are going<br />

about sealing every imaginable<br />

small company for tax default.<br />

This increases the pressure on the<br />

middle class while worsening the<br />

unemployment problem.<br />

Send reactions to:<br />

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Good game, chaps...Part 2<br />

DAPO AKANDE<br />

Dapo Akande, author of the acclaimed<br />

book, “The Last Flight...a<br />

personal journey to rediscovering<br />

values”, is also the Founder of<br />

MINDS Reform Initiative, a NGO<br />

focused Character Education.<br />

Contact:dapsakande25@gmail.com<br />

There are many lessons to<br />

take from our story. Losing<br />

a match or even losing<br />

anything else for that matter<br />

is not the end of the world. With<br />

discipline, perseverance, belief in<br />

yourself and the help of God you<br />

can succeed. The bible says: “Do you<br />

see someone diligent (or skilled) in<br />

their work? They will serve before<br />

kings; they will not serve before<br />

lowly officials.” The simple truth is<br />

that there are many who appear to<br />

be doing well who have actually attained<br />

that level of “success” in a less<br />

than honest manner. That’s why the<br />

good book says: “There is a way that<br />

seems right to a man but its end is<br />

the way of death.”<br />

This means if you’re diligent<br />

and skilful in what you do and you<br />

go on to establish a reputation<br />

of high integrity, your reputation<br />

will precede you. Sooner or later,<br />

people will know you as a person<br />

of character, of good reputation<br />

and as someone in full possession<br />

of the expertise required. With<br />

time this will begin to work for you.<br />

Teach your children to not be in a<br />

hurry. Character and reputation<br />

may take a little time to build but<br />

once people know you for it, favour<br />

will follow.<br />

Those of you who watch the<br />

Grand Slam tennis tournaments<br />

may have noticed that it’s obligatory<br />

after the final match for both<br />

the winner and the loser to make<br />

speeches, right there in the middle<br />

of the court. It is not expected<br />

that the loser, just because of the<br />

devastation of defeat, will refuse to<br />

show up or refuse to say wonderful<br />

things about his or her opponent,<br />

as is the usual practice. This is<br />

quite unlike the USA basketball<br />

team who refused to show up<br />

for the medal ceremonies at the<br />

Atlanta Olympics of 1996 because<br />

they came just 3rd. They expected<br />

gold to be handed to them as their<br />

entitlement and sulked when it<br />

wasn’t. Forgive me for all the sports<br />

analogies but believe it or not I was<br />

quite a keen sportsman myself and I<br />

know how all I learned from that experience<br />

shaped my outlook on life.<br />

I played Rugby, Football and Cricket<br />

for my school. In Rugby I went a little<br />

further by also playing for my county,<br />

Oxfordshire.<br />

Just like the USA Basketball team<br />

who were disappointingly sore losers,<br />

I will emphasise here that not<br />

all “oyibos” are exemplary figures of<br />

integrity. Far from it, though there<br />

is a lot we can learn from them as a<br />

people. A quick story.<br />

Before taking my “O” Levels, I<br />

told my dad that I wanted to change<br />

schools once I had concluded my “O”<br />

Level exams. He agreed and thereafter<br />

informed my current school at the<br />

time. The next term, by which time I<br />

had resumed at my new school, my<br />

former Headmaster wrote to my dad<br />

claiming that we had not informed<br />

them of my departure therefore we<br />

owed them one term’s school fees.<br />

As gentle as my dad was, he was<br />

having none of it. Of course we knew<br />

where this was all coming from. My<br />

immediate older brother, Banky, who<br />

happened to be the Head Boy and the<br />

Captain of just about all the school<br />

sports teams was in his final year<br />

and the Headmaster just couldn’t<br />

handle the thought of both Akandes<br />

leaving at the same time. Remarkably<br />

quickly, the whole situation took a<br />

dramatic turn for the worse as they<br />

threatened to take my dad to court<br />

but I was pleasantly surprised when<br />

my dad quite uncharacteristically<br />

told them to do their worst. Realising<br />

fairly quickly that they had no leg to<br />

stand on, they dropped the whole<br />

matter. Now the interesting thing is<br />

that we were scheduled to play an<br />

away Rugby match against them that<br />

same term and as the school’s senior<br />

team, it was customary for our Headmaster<br />

to attend all our matches,<br />

both home and away. There was no<br />

greater motivation for any school<br />

boy than to see your Headmaster<br />

on the touchline cheering you on<br />

but do you know what happened in<br />

this rather absurd case? He stayed<br />

back at school and sent his wife to<br />

represent him. As if the two Headmasters<br />

had conferred on the matter,<br />

my former Headmaster, though the<br />

host, also refused to show up for<br />

the match and he too sent his wife!<br />

The tension throughout our time<br />

on their premises was so thick you<br />

could cut through it with a knife!<br />

Gone were all the usual pleasantries<br />

accorded a visiting team. It was so<br />

bad that we were advised to skip the<br />

traditionally lavish post match Tea<br />

(lunch), which we naturally looked<br />

forward to and leave immediately.<br />

That is exactly what we did. Our joy<br />

though was that we gave them a<br />

complete thrashing, beating them<br />

by more than thirty points and to my<br />

personal satisfaction, I scored twelve<br />

out of those points.<br />

The purpose of this story is not to<br />

regale you with my sporting prowess<br />

as such but to bring out a very<br />

important point. We have already<br />

established through this story that<br />

integrity is not determined by the<br />

colour of one’s skin. Neither is it<br />

determined by tribe or even age. No,<br />

it’s a character trait that one must<br />

consciously work on to indoctrinate<br />

in oneself and work even harder to<br />

sustain at all times. Those who feel<br />

we’re condemned as a black nation<br />

to a perpetual state of backwardness<br />

and corruptive tendencies; those<br />

who always try to justify our negative<br />

traits with the customary “this<br />

is Nigeria” are just so wrong. From<br />

the story just told, it’s obvious that<br />

integrity is not just a white thing<br />

but if the best of their societies can<br />

adopt it as a way of life, so can we.<br />

It’s a mindset. It’s a decision that<br />

needs to be made both individually<br />

and collectively.<br />

To put it in a nutshell, integrity<br />

is not and should never be a matter<br />

of expedience. Your word should<br />

always be your word no matter the<br />

consequences as integrity is a constant.<br />

I end with this:<br />

“Live so that when your children<br />

think of Fairness, Caring and Integrity<br />

they think of you” - H Jackson<br />

Brown Jr<br />

Send reactions to:<br />

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Wednesday <strong>22</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

COMMENT<br />

CALEB ADEBAYO<br />

Caleb Adebayo is a lawyer and environmentalist.<br />

He is the founder of Earthplus,<br />

an environmental nonprofit organization<br />

in Lagos. He can be reached at calebadebayoc@gmail.com<br />

Africa’s richest man,<br />

Aliko Dangote, chair of<br />

Dangote Group, worth<br />

$14.1 billion according<br />

to Forbes as at March,<br />

<strong>2018</strong>, is set to float the world largest<br />

single-train oil refinery in Lagos,<br />

which would also include a petrochemical<br />

and urea fertilizer plant.<br />

He also has large investments up<br />

to hundreds of millions of dollars<br />

in the Nigerian coal industry; a<br />

major financier of the coal plant in<br />

Kogi and the reviving coal plant in<br />

Enugu. His cement factories across<br />

Nigeria are also powered by coal.<br />

While these projects bring about<br />

enormous economic benefits, the<br />

Nigerian government, the billionaire<br />

investor and various stakeholders<br />

seem to have turned a blind<br />

eye to the environmental effects of<br />

investing in these dirty fuels as well<br />

as the emission reduction commitments<br />

under the Paris agreement to<br />

which Nigeria is a signatory.<br />

President Muhammadu Buhari,<br />

in September 2016 while addressing<br />

one of the Side Events of the<br />

71st Session of the United Nations<br />

C002D5556<br />

BUSINESS DAY 11<br />

comment is free<br />

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

How Africa’s billionaire’s investments<br />

are contributing to climate change<br />

‘<br />

General Assembly (UNGA71)<br />

enthused “My signing of the Paris<br />

Agreement on Climate Change has<br />

demonstrated Nigeria’s commitment<br />

to a global effort to reverse<br />

the effects of the negative trend.”In<br />

December last year, at the One<br />

Planet Summit, President Buhari<br />

again stated that “Government is<br />

actively promoting technologies<br />

and practices such as sustainable<br />

land management, climate resilient<br />

agriculture, water efficiency,<br />

clean energy, and skills for reducing<br />

greenhouse gas emissions<br />

among others.”<br />

These statements clearly show<br />

continuing support for emission<br />

reduction and combating climate<br />

change, but are in stark contradistinction<br />

to the fossil fuel projects<br />

happening on a large scale in the<br />

country. The refinery project by<br />

Aliko Dangote, a project estimated<br />

to cost somewhere between $12<br />

billion to $18 billion is one of such<br />

projects, set to encourage and<br />

scale fossil fuel dependency for<br />

decades to come, while the coal<br />

projects are also contributing inch<br />

by inch to our increasing carbon<br />

profile. In a business conference<br />

in October, 2016, the billionaire<br />

admitted with regards to his cement<br />

companies that “ All our cement<br />

plants have been converted<br />

to coal” and that they would use 12,<br />

000 metric tonnes of coal per day.<br />

These developments are worrying,<br />

as they have increasingly<br />

negative effects on the environment<br />

and enhance the spate of<br />

climate change, which in turn is<br />

negatively affecting our agriculture,<br />

food security, health and<br />

A ‘Coal Kills’ report<br />

estimates that coal<br />

accounts for over 800,<br />

000 premature deaths<br />

every year around the<br />

world, and many million<br />

more serious and minor<br />

illnesses<br />

’<br />

economy. Apart from the effects<br />

on climate change, there are the<br />

adverse effects of fossil fuels on the<br />

immediate life of the communities;<br />

their livelihood, water, atmosphere<br />

and health.<br />

According to Greenpeace UK,<br />

globally, coal is the greatest climate<br />

threat we face. The Climate Reality<br />

project points out that while coal is<br />

one of the cheapest forms of energy,<br />

it is the dirtiest, and the one that<br />

contributes most to greenhouse gases.<br />

In a comparative study done by<br />

Elsevier, it was also discovered that<br />

coal has a high rate of related health<br />

hazards from the point of mining<br />

to preparation, transporting, waste<br />

storage and combustion. Crude oil<br />

closely follows behind, its havoc rap<br />

sheet already popular in Nigeria,<br />

especially in the Niger Delta.<br />

The story of the Okobo people<br />

in Kogi State where coal mining<br />

is done will immediately bring<br />

tears to one’s eyes. Okobo is a<br />

small town in the Enjema district<br />

of Ankpa local government in Kogi<br />

state where coal mining is done<br />

in Nigeria. The only stream in the<br />

community is polluted with the<br />

presence of heavy metals and the<br />

air is contaminated with carbon<br />

and coal particles. A Global Rights<br />

Nigeria report reveals that children<br />

and women, especially pregnant<br />

women are plagued with various<br />

illnesses and the death toll is on the<br />

rise. This suffering is what would<br />

be extended to the communities in<br />

Enugu where the coal power plant<br />

wants to be revived. A ‘Coal Kills’<br />

report estimates that coal accounts<br />

for over 800, 000 premature deaths<br />

every year around the world, and<br />

many million more serious and<br />

minor illnesses. The burning of<br />

coal in this community emits serious<br />

hazardous wastes that pollutes<br />

their water bodies, contaminate<br />

crops and release toxins into the<br />

atmosphere, thus damaging cardiovascular<br />

and nervous systems,<br />

increasing their risk of respiratory<br />

and heart diseases. It also releases<br />

a lot of hydrocarbons, especially<br />

methane and carbon dioxide that<br />

contribute to climate change,<br />

which in turn affects the health and<br />

livelihood of the people.<br />

The Niger Delta communities<br />

are no strangers to negative effects<br />

of oil exploration and production,<br />

as it has repeatedly taken its toll on<br />

their environment, health, water<br />

and livelihood. According to the<br />

Journal of Scientific Research and<br />

Reports, there is an average of about<br />

700 oil spills in the Niger Delta annually.<br />

The oil industry has also<br />

damaged the environment through<br />

the oil spills, gas flares and release<br />

of effluents and smog from refineries.<br />

Rivers State still continues to<br />

suffer from the black soot which<br />

has lasted since early 2017 as a<br />

result of the activities of refineries,<br />

among others, putting over six million<br />

people in danger of cancer and<br />

respiratory problems, according to<br />

experts, as well as releasing hydrocarbons<br />

into the atmosphere.<br />

With the realities of fossil fuel<br />

effects staring her in the face,<br />

should Nigeria then be encouraging<br />

investment in coal and oil, or<br />

in renewable energy forms that<br />

falls in stride with its international<br />

climate change commitments,<br />

and which are healthier and safer<br />

for the communities? No doubt,<br />

oil continues to provide most of<br />

the country’s revenue and foreign<br />

exchange earnings, and coal is a<br />

cheap way to industrialise, yet if<br />

Nigeria continues big billionaire<br />

investments in dirty energy, where<br />

then lies the fate of her sustainable<br />

development?<br />

Ahead of the 24thConference<br />

of Parties (COP 24) later this year,<br />

Nigeria has to come to a firm decision<br />

on whether it wants to follow<br />

through with its commitments<br />

under the Paris Agreement, and if it<br />

does, then certainly it cannot keep<br />

investing or encouraging investments<br />

in fossil fuels.<br />

Send reactions to:<br />

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ACCESS TO JUSTICE AND<br />

NETWORK ON POLICE<br />

REFORM IN NIGERIA<br />

(NOPRIN)<br />

On Tuesday 14th July,<br />

<strong>2018</strong> the Acting President,<br />

Yemi Osinbajo<br />

SAN, directed the Inspector<br />

General of Police (IGP),<br />

Ibrahim Idris, to immediately<br />

overhaul the management and<br />

activities of Special Anti-Robbery<br />

Squad (SARS) by ensuring that it<br />

becomes an intelligence-driven<br />

unit, restricted to the prevention<br />

and detection of armed robbery,<br />

kidnapping, apprehension of<br />

offenders linked to the stated<br />

offences, and nothing more. The<br />

Acting President also directed<br />

that any new Unit emerging from<br />

SARS must conduct its operations<br />

in strict adherence to the<br />

rule of law and observance of<br />

human rights.<br />

The presidential directive<br />

followed ceaseless outcries of<br />

Nigerians against the atrocities<br />

of SARS operatives. While we<br />

commend the intervention of<br />

the Acting President, we regret<br />

that it took this length of time<br />

Too little and too short: IGP measures overhauling<br />

SARS are too cosmetic to deliver real change!<br />

for Nigeria’s leadership to rise to<br />

the occasion and act. Had SARS<br />

been reformed sooner, it could<br />

have saved (possibly) hundreds<br />

of human lives lost to police<br />

violence each year and spared<br />

many Nigerians excruciating<br />

and harrowing encounters with<br />

SARS operatives. For more than<br />

three years, President Buhari’s<br />

government failed to address<br />

the escalating culture of impunity<br />

within the police force<br />

and protect Nigerian people<br />

from widespread and rampaging<br />

abuses of police power and<br />

the untold suffering it brought<br />

to them. This is in spite of the<br />

fact that the Nigerian Constitution<br />

provides that the “security<br />

and welfare of the government<br />

shall be the primary purpose of<br />

government” – Section 15.<br />

SARS, established in 1992 with<br />

the mandate of combating armed<br />

robbery and other related crimes<br />

quickly garnered notoriety for<br />

brutal violations of human rights<br />

- arbitrary arrests and detention,<br />

sexual harassment, barefaced<br />

extortions, torture and extrajudicial<br />

killings. The Presidential<br />

intervention was therefore, a long<br />

overdue but a welcome development.<br />

In compliance to the acting<br />

president’s order, the IGP has ordered<br />

the immediate overhauling<br />

of SARS nationwide, changing its<br />

nomenclature, its commanders<br />

and structure. He also promises a<br />

new set of “Standard Operational<br />

Guidelines and Procedures, and<br />

code of conduct for all FSARS<br />

personnel”. However, all of this<br />

is mostly a rehash of old, draft<br />

policy. Late last year, the IGP<br />

had promised that the SARS unit<br />

would be revamped, announcing<br />

measures similar to the ones he<br />

has now outlined, but the promised<br />

changes did not materialize<br />

and SARS personnel continued to<br />

prowl the Nigerian landscape with<br />

accustomed impunity.<br />

New measures fall short and<br />

cannot deliver sustainable change<br />

After a review of the IGP’s new<br />

“overhaul” order, A2Justice is<br />

convinced the measures come too<br />

short, and do not go far enough of<br />

what is needed to reform SARS, for<br />

the following reasons:<br />

1. The measures first of all appear<br />

like a knee-jerk reaction to<br />

the Presidential directive, having<br />

been announced just on the heels<br />

of the directive. Such speed does<br />

not provide evidence of thoughtful<br />

reflection, sober deliberation,<br />

wide and strategic consultation<br />

on an issue of such huge public<br />

importance. The IGP over-sped<br />

on the response in a way that<br />

questioned his genuineness of<br />

purpose.<br />

2. There are no measures<br />

of accountability for unlawful<br />

actions proposed in the new<br />

policies. The IGP offers the<br />

public,communication channels<br />

for reporting grievances against<br />

FSARS, but did not commit the<br />

police force to ensuring that every<br />

complaint made against FSARS<br />

operatives will be promptly and<br />

fairly investigated, and where<br />

substantiated, result in a definite<br />

outcome. It is important to note<br />

in this context, that the police<br />

force has always had communication<br />

lines for reporting unlawful<br />

or unprofessional behaviour of<br />

its officers. The problem is that,<br />

oftentimes, complaints, after<br />

they are made, draw a blank and<br />

those complained against do not<br />

get questioned or punished at<br />

the end of the day. Sometimes<br />

too, complainants are transposed<br />

into crime suspects to punish<br />

them for daring to complain. The<br />

proposition, therefore, to re-use<br />

this old template this time around<br />

without more,as a response to the<br />

presidential directive is clearlya<br />

no-brainer. The internal police<br />

complaint procedure is abjectly<br />

unreliable and uninspiring.<br />

3. The IGP also fails to offer<br />

concrete proposals for ensuring<br />

safeguards against abuse are effective:<br />

his new policy contains<br />

no measures/guarantees for:(a)<br />

protecting complainants; (b)<br />

ensuring complaints get fair and<br />

speedy consideration, and (c)<br />

complainants are not subjected to<br />

reprisal attacks or persecution by<br />

persons within the police system<br />

Note: The rest of this article continues<br />

in the online edition of<br />

Business Day @https://businessdayonline.com.<br />

Send reactions to:<br />

comment@businessdayonline.com


Wednesday <strong>22</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

12 BUSINESS DAY<br />

C002D5556<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 />

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GM, BUSINESS DEVELOPMENT (North)<br />

Bashir Ibrahim Hassan<br />

GM, BUSINESS DEVELOPMENT (South)<br />

Ignatius Chukwu<br />

HEAD, HUMAN RESOURCES<br />

Adeola Obisesan<br />

Kofi Atta Annan (1938 – <strong>2018</strong>)<br />

On Saturday <strong>Aug</strong>ust<br />

18, <strong>2018</strong>,<br />

the news broke<br />

of the passing<br />

on of one of the<br />

great sons of Africa and one<br />

time the Secretary-General of<br />

the United Nations Organisation,<br />

Kofi Atta Annan, aged 80.<br />

Annan was born in Kumasi,<br />

Ghana, where he had<br />

his initial education. He later<br />

moved to Geneva where he<br />

studied economics and international<br />

relations, from<br />

where he joined the UN in<br />

1962. Ever since then, he<br />

had worked with the global<br />

body until his retirement in<br />

2006. He worked for the UN<br />

in various capacities, first as<br />

a staff of the World Health<br />

Organisation (WHO), where<br />

he served as an administrative<br />

officer and as budget officer<br />

in Geneva, to being UN’s<br />

Secretary-General and later<br />

as a UN envoy to different<br />

parts of the world.<br />

Apart from working briefly<br />

with Ghana Tourist Development<br />

Company as its Managing<br />

Director in 1974, Annan’s<br />

working years were spent with<br />

the UN, working in various<br />

departments and organs. He<br />

worked as the Assistant Secretary-General<br />

in the Office of<br />

Human Resources Management<br />

and equally served as security<br />

coordinator. He also worked as<br />

Assistant Secretary-General for<br />

the Office of Programme, Planning,<br />

Budget and Finance.<br />

Upon his appointment as<br />

Secretary-General of the UN,<br />

Annan worked tirelessly to<br />

revitalise the United Nations,<br />

putting human rights and the<br />

search for peace, at the core of<br />

its mission. No wonder, his personal<br />

commitment motto to the<br />

world reads: “towards a fairer,<br />

more peaceful world.” This is<br />

why Miroslav Laják, President<br />

of the UN General Assembly,<br />

eulogised Annan as a man who<br />

“dedicated his life to making the<br />

world a better, more peaceful,<br />

and just place for all people.<br />

And in many ways, he is a symbol<br />

for the shared values of the<br />

United Nations”.<br />

He equally spearheaded the<br />

global fight against HIV/Aids<br />

both in and out of office and<br />

also championed the millennium<br />

development goals – the<br />

targets that spurred all leaders<br />

around the world to focus more<br />

on improving health and education<br />

for all their citizens.<br />

The seventh Secretary-General<br />

of the United Nations (UN),<br />

Annan was the only Secretary-<br />

General that was picked from<br />

the staff list of the organisation<br />

in the history of UN. In addition,<br />

he was the only sub-Saharan<br />

African to lead the UN.<br />

Annan dedicated his life to<br />

achieving peace, democracy,<br />

stability, security, equity, justice,<br />

human rights in the world.<br />

So effective was he that even<br />

after retirement, he remained<br />

active on the international<br />

stage, often being called upon<br />

to mediate and serve as peace<br />

envoy to troubled spots around<br />

the world. Notable among these<br />

nations were Syria, Afghanistan,<br />

among others. On the<br />

home from, his timely intervention<br />

on the post-election crisis<br />

in Kenya saved the country<br />

from plunging into war. No<br />

wonder, Kenya’s opposition<br />

leader RailaOdinga described<br />

Annan as “the man who stepped<br />

in and saved the country from<br />

collapse.”<br />

It was Annan that influenced<br />

and oversaw the transition of<br />

the then UN’s United Nations<br />

Protection Force (UNPROFOR)<br />

to a more dynamic and responsive<br />

Implementation Force<br />

(IFOR). Because of his unflinching<br />

efforts in bringing peace to<br />

the world and the fresh breath<br />

he brought to the peace keeping<br />

organisation, Annan was<br />

awarded the prestigious Nobel<br />

Peace Prize in 2001.<br />

Described as “of one of our<br />

greatest compatriots” by the<br />

Ghanaian President, Nana<br />

Akufo-Addo, Annan would be<br />

remembered for his fight for<br />

civil rights, and boldly taken on<br />

the new challenges of terrorism<br />

and Acquired Immune Deficiency<br />

Syndrome (AIDS). Annan<br />

was committed to bringing<br />

the UN closer to the people by<br />

collaborating with civil society<br />

to promote world peace.<br />

A man who dreamt of eradicating<br />

poverty from the world,<br />

Annan described his greatest<br />

achievement as the Millennium<br />

Development Goals which, for<br />

the first time, made poverty and<br />

child mortality its priority.<br />

His charisma, commitment<br />

and diplomatic gifts will be<br />

missed and his contributions<br />

forever remembered. Adieu,<br />

Kofi!<br />

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Keith Richards<br />

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Amina Oyagbola<br />

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Wednesday <strong>22</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

BUSINESS DAY 13<br />

COMPANIES<br />

& MARKETS<br />

Company news analysis and insight<br />

Experts task on policies drive access to<br />

mortgage, homeownership<br />

Experts at Stanbic IBTC<br />

Bank forum canvases right<br />

model for human capital<br />

development<br />

Pg. 14<br />

CHUKA UROKO<br />

Governments at<br />

both state and<br />

federal levels in<br />

Nigeria need to<br />

come up with a<br />

comprehensive policy that<br />

recognises average household<br />

income in order for more<br />

people to have access to mortgage<br />

and, by extension, improve<br />

homeownership level<br />

in the country, experts have<br />

canvassed.<br />

Nigeria has a staggering<br />

housing demand-supply gap<br />

and the experts have blamed<br />

this on lack of a functional<br />

mortgage system and absence<br />

of a social security system in<br />

the country. “Nigeria lacks<br />

a system that is dedicated to<br />

funding housing for low income<br />

families”, they maintain.<br />

“There are some basic<br />

problems with the mortgage<br />

system in Nigeria one of which<br />

is accessibility and the second<br />

is clarity. You find that when<br />

you approach a mortgage<br />

bank for loan, it will ask you for<br />

things that you cannot provide.<br />

So, mortgage is simply not accessible<br />

for those that actually<br />

need it”, Jideofor Michael, an<br />

estate developer, explained in<br />

an interview.<br />

“In terms of clarity, there is<br />

no unified system”, he added,<br />

noting that there is nowhere<br />

the government has published<br />

a mortgage rate which the<br />

mortgage banks have to use or<br />

a mortgage standard or process<br />

which the banks have to fit into.<br />

This means that there is no<br />

clarity in the mortgage system in<br />

Nigeria and if there is any such<br />

thing, it is not yet publicised<br />

and so people don’t know and,<br />

if people don’t know, it means<br />

such a process does not exist.<br />

Interest rate is another major<br />

problem in the mortgage system<br />

and this is because a borrower<br />

cannot take a long-term mortgage<br />

loan with double interest<br />

rate on low income.<br />

Interest rate is structured<br />

in such a way that if a home<br />

builder borrows at a 20-percent<br />

rate, and he is building at a<br />

slow pace with such a loan, the<br />

amount he will owe at the end<br />

will outstrip the growth of his<br />

salary, meaning that the rate is<br />

not viable. “The basic principle<br />

of a mortgage is that you must<br />

have steady income and in a<br />

gainful employment. You must<br />

be able to provide income in<br />

multiples for the property that<br />

will be built for your use. If your<br />

income is N4 million per annum,<br />

for instance, and the cost<br />

of the property is N30 million,<br />

unless you want to steal, you<br />

cannot afford that property”,<br />

Michael pointed out.<br />

The experts recommend<br />

L-R: Victor Okeugo, category manager, Liquid, TG Arla Dairy Nigeria; Rosette Agbor, category manager, Kids Nutrition; Ifunanya<br />

Obiakor, marketing manager; Ndidi Okoye, category manager, Chilled & Frozen; Nathaniel Adewusi, category manager, powder,<br />

and Anieno Adeyemi, digital manager, all of TG Arla after the dairy brand received Guinness World Record certification as the<br />

global record holder of the longest drinks-pouring relay…recently.<br />

legislation towards mortgage<br />

process, adding however that<br />

legislation depends on how it<br />

is applied. They explain that<br />

in some countries, a body is<br />

set up that manages mortgage<br />

subsidies. This body delivers<br />

mortgage either through banks<br />

or by itself.<br />

They also advise that the<br />

mortgage industry has to improve,<br />

and developers have<br />

to be encouraged to build<br />

mortgage-viable and ready<br />

properties just as mortgage<br />

interest rates have to be reduced<br />

to single digit and made<br />

available.<br />

“The whole process of securing<br />

mortgage has to be<br />

made clearer and more transparent,<br />

and the mortgage has<br />

to be available on the ‘retail<br />

high street’ such that every<br />

time you go out looking for it,<br />

you see it. In addition, developers<br />

should be encouraged<br />

to build across all property<br />

bands; simplicity needs to be<br />

introduced into the regulatory<br />

system to make it cheaper and<br />

faster to develop”, Paul Onwuanibe,<br />

group CEO, Landmark<br />

Group, canvassed in an<br />

interview.<br />

According to him, the import<br />

system needs to be tidied<br />

up to be faster, more efficient<br />

and less punitive to the building<br />

trade by allowing quality<br />

products in without attracting<br />

huge duties and red tape, hoping<br />

that this simplicity would<br />

reduce the cost of housing.<br />

Diamond Bank disburses N1bn in cash flowbased<br />

SME lending scheme<br />

Leading retail bank,<br />

Diamond Bank Plc,<br />

has again reiterated<br />

its support for Small<br />

and Medium-Scale Enterprises<br />

(SME) as the Bank<br />

announced disbursement<br />

of over N1 billion under the<br />

cash flow-based SME lending<br />

scheme.<br />

Launched in January 2017<br />

in partnership with the Women’s<br />

World Banking (WWB),<br />

the scheme features the Cash<br />

Flow-based MSME Lending<br />

Methodology, which has a<br />

strategic focus on cash flow,<br />

net asset capacity, character<br />

and business proficiency<br />

of SMEs as a means of determining<br />

their eligibility to<br />

access credit.<br />

Commenting on the<br />

remarkable achievement,<br />

Uzoma Dozie, chief executive<br />

officer, Diamond Bank<br />

Plc said, “This milestone is a<br />

demonstration of our resolve<br />

to develop innovative ways<br />

of advancing financial inclusion<br />

in Nigeria and a signal<br />

to many more successes to<br />

come as we push through<br />

our technology-driven retailfocused<br />

strategy, designed<br />

to position Diamond Bank<br />

as the most profitable and<br />

fastest growing retail bank<br />

franchise in Nigeria by the<br />

year 2020”.<br />

Under the lending<br />

scheme, the Bank was able to<br />

disburse a total of N267 Million<br />

during the pilot phase,<br />

while it disbursed N750 Million<br />

between June and <strong>Aug</strong>ust<br />

<strong>2018</strong>. Remarkably, all the<br />

loans disbursed under the<br />

scheme to the 550 small businesses<br />

are performing despite<br />

the recipients of the facilities<br />

being first-time borrowers.<br />

“We are confident that<br />

the future of retail banking<br />

belongs to banks with disruptive<br />

business models and<br />

solutions that deliver superior<br />

customer experience through<br />

strategic alliances, as well as<br />

create life-style-focused products,<br />

processes and channels.<br />

We pride our financial<br />

inclusion strategy as the most<br />

robust and customer-centric<br />

in the Nigerian banking<br />

industry and will achieve<br />

more milestones through<br />

data-based initiatives that<br />

are simply, Beyond Banking”,<br />

concludes Dozie.<br />

Diamond Bank Plc is<br />

Nigeria’s lead driver of financial<br />

inclusion, providing<br />

enhanced customer experience<br />

through innovation<br />

and technology. It is regarded<br />

as supporter of Small and<br />

Medium-Scale Enterprises<br />

through SME lending, capacity<br />

building, business<br />

seminars and workshops.<br />

Its mobile banking app, “Diamond<br />

Mobile”, currently<br />

has over three million active<br />

subscribers on its platform.<br />

Diamond Bank has over the<br />

years leveraged its underlying<br />

resilience to grow its asset<br />

base and to retain its key business<br />

relationships.<br />

Heritage Bank’s Next Titans Lagos<br />

audition attracts 1,000 entrepreneurs<br />

The Lagos audition of the<br />

Heritage Bank Plc’s foremost<br />

entrepreneurial reality TV<br />

show, popularly called the<br />

Next Titan, was held with no<br />

fewer than 1000 contestants<br />

in attendance. The enthusiastic<br />

contestants trooped<br />

to Excellence Hotel, Ogba,<br />

venue of the audition weekend,<br />

with expectation that<br />

luck would smile on them<br />

to win.<br />

Overwhelmed with the<br />

turnout, Chibuike Agu,<br />

head, Digital and Content<br />

of the Bank, commended the<br />

participants for their determination<br />

to take part in the<br />

annual contest. He advised<br />

the contestants to open their<br />

mind to the opportunities<br />

that would come their way<br />

while the reality show lasts.<br />

According to him, contestants<br />

would gain immensely<br />

from the programme; as he<br />

assured that no matter how<br />

short they may stay on the<br />

show, the experience gained<br />

would be useful in growing<br />

their start-up businesses.<br />

Agu therefore, described<br />

the reality TV show as a<br />

veritable platform, through<br />

which business ideas of<br />

young entrepreneurs are<br />

given the impetus required<br />

to take them to the next level.<br />

He said that was in agreement<br />

with the focus of Heritage<br />

Bank to assist Nigeria in<br />

growing small and medium<br />

scale businesses in different<br />

parts of the nation in attaining<br />

self sufficiency status<br />

and thereby create jobs for<br />

citizens and other residents.<br />

He assured that the financial<br />

powerhouse would<br />

not relent in supporting any<br />

investment initiative that<br />

shares characteristics with<br />

the Next Titan.<br />

In his remarks at the occasion,<br />

Mide Kunle-Akinlaja,<br />

executive producer, Next<br />

Titan TV Reality Show, commended<br />

Heritage Bank for its<br />

strong support to the annual<br />

reality show. He described<br />

the bank as a strong pillar behind<br />

the continued success<br />

of the generally-accepted<br />

TV reality show, which has<br />

impacted on numerous lives<br />

since its inception.<br />

Kunle-Akinlaja then<br />

charged the contestants<br />

to put in their best, as they<br />

have equal chance to emerge<br />

winner. He disclosed that the<br />

team for the programme this<br />

year is: ‘Brains, Charisma<br />

and Audacity’.<br />

The ambitious entrepreneurs<br />

need to demonstrate<br />

their entrepreneurial<br />

acumens with unbeatable<br />

business ideas, commercial<br />

insight and business savvy to<br />

stay out of eviction to win N<br />

5,000,000 and a brand new<br />

car for the support of their<br />

businesses.


14<br />

BUSINESS DAY<br />

COMPANIES & MARKETS<br />

C002D5556<br />

Wednesday <strong>22</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

Experts at Stanbic IBTC<br />

Bank forum canvases right<br />

model for human capital<br />

development<br />

HOPE MOSES-ASHIKE<br />

In a rapidly changing<br />

world, more so in the<br />

digital space, finding the<br />

right models to anchor<br />

human capital development<br />

will remain a paramount<br />

determinant of corporate success.<br />

This thinking underscores<br />

the Workplace Banking Seminar’<br />

organized by Stanbic IBTC<br />

Bank Plc, a member of Stanbic<br />

IBTC Holdings PLC, in Lagos.<br />

The seminar, with the<br />

theme ‘The Future of Work and<br />

the Role of Human Capital’, attracted<br />

participants from both<br />

the public and private sectors,<br />

including Human Resources<br />

Managers, Financial Service<br />

Institutions, Insurers, Fintechs,<br />

Government Agencies, Regulators,<br />

Private Equity and Venture<br />

Capital firms, amongst other<br />

players from diverse fields.<br />

In his opening comments,<br />

Chief Executive, Stanbic IBTC<br />

Bank PLC, Demola Sogunle,<br />

said by settling for a theme that<br />

seeks to unravel the future of<br />

work, the organization aims to<br />

prepare and equip its clientele<br />

for future success. Employee<br />

experience, just like customer<br />

experience, is imperative to<br />

drive corporate success. Therefore,<br />

workers must be sufficiently<br />

motivated, engaged and<br />

empowered, he stated.<br />

This objective underlines<br />

the numerous stakeholder<br />

engagements organized by<br />

the Stanbic IBTC Group to<br />

provide a platform to connect<br />

with clients and avail them with<br />

information to make informed<br />

decisions. As an institution<br />

designed to meet the financial<br />

needs of customers at every<br />

phase in life, Sogunle said the<br />

group would continuously offer<br />

value propositions to move<br />

people and businesses forward.<br />

Guest speaker, Boye Ademola,<br />

noted that the whole<br />

essence of digital application<br />

is to create intrinsic value. Any<br />

technology that does not generate<br />

value is worthless. Besides,<br />

value cannot be created without<br />

commensurate talent.<br />

Ademola, who is Partner &<br />

Lead for Digital Transformation<br />

Technology at KPMG,<br />

stated that the future of work<br />

has three crucial dimensions:<br />

workforce, workspace and<br />

work culture. These three elements<br />

are critical to attract<br />

the millennials, who would<br />

constitute the bulk of the future<br />

workforce. Nigeria for instance,<br />

has over 90 million of its population<br />

under 30 years of age and<br />

as the population increases,<br />

they would naturally trigger<br />

change. Already, the average<br />

age of millennial CEOs is in the<br />

30s. In meeting the demands of<br />

the future, there is the need for<br />

a paradigm shift from today’s<br />

work structure. Critical factors<br />

to drive this change include<br />

focus on value creation, agility,<br />

co-creation, co-option of<br />

millennials and appropriate<br />

operating models.<br />

The ‘Workplace Banking<br />

Seminar’, now in its fourth<br />

edition, comes on the heels of<br />

the Bank’s hugely successful<br />

financial planning sessions for<br />

Enterprises. The seminar hosts<br />

HR Heads drawn from various<br />

sectors and focuses on topical<br />

HR issues with a view to equipping<br />

the audience with vital<br />

skills and knowledge aimed at<br />

impacting Employee/Business<br />

efficiency, productivity, profitability,<br />

continuity, growth and<br />

sustainability.<br />

Nkolika Okoli, head, Personal<br />

Banking, Stanbic IBTC<br />

Bank PLC, said the Bank is<br />

constantly trying to add value,<br />

which goes beyond providing<br />

banking services to its<br />

customers. By looking at the<br />

whole spectrum of financial<br />

literacy drawn from the Stanbic<br />

IBTC Group expertise, Okoli<br />

stated that Stanbic IBTC Personal<br />

Banking business aims<br />

to equip Individuals with the<br />

knowledge required to attain<br />

financial freedom before retirement.<br />

Babatunde Macaulay, executive<br />

director, Personal & Business<br />

Banking, Stanbic IBTC<br />

Bank PLC, who gave the vote<br />

of thanks, said as a member<br />

of the Standard Bank Group,<br />

Africa’s largest bank by assets<br />

and earnings, Stanbic IBTC<br />

will continue to leverage on the<br />

155-year experience, expertise<br />

and strong financial clout of<br />

the mother brand to deliver superior<br />

sustainable shareholder<br />

value by meeting the needs of<br />

its clientele. “Our main goal is<br />

to continue to render best-inclass<br />

service to our customers<br />

who cut right across Nigeria’s<br />

socio-economic spectrum and<br />

play a leading role in supporting<br />

individuals, businesses and<br />

the Nigerian economy,”<br />

Ecobank rewards customers in Xpress<br />

account giveaway Campaign<br />

HOPE MOSES-ASHIKE<br />

Customers of Ecobank<br />

are getting rewarded<br />

for using their Xpress<br />

Account and transacting<br />

at Xpress Points in their<br />

neighbourhoods<br />

Philip Sonibare, the bank’s<br />

head of direct banking said the<br />

offer simply rewards customers<br />

for transacting on their Ecobank<br />

Xpress account. He said<br />

there are also instant gifts for<br />

transacting at Ecobank Xpress<br />

Points across the country.<br />

Responding to media questions<br />

in Lagos, he explained<br />

that the “Xpress Account Giveaway<br />

rewards customers who<br />

have opened an Xpress account<br />

via the Ecobank Mobile<br />

app or USSD code- *326#. Our<br />

checks show that many customers<br />

have opened Xpress<br />

account in the last few weeks as<br />

a result of the reward scheme.<br />

Opening the account is simple,<br />

without documentation or any<br />

need to visit the bank”.<br />

Sonibare emphasized that<br />

“with the Xpress account,<br />

one can buy airtime, transfer<br />

money to any bank account<br />

in the country, deposit and<br />

withdraw cash at any Xpress<br />

Agent Point, do cardless withdrawals<br />

(XpressCash) at either<br />

an Ecobank ATM or Xpress<br />

point location, as well as pay<br />

regular bills.”<br />

On the dynamics of the<br />

promo, Sonibare said, “the<br />

reward is in two categoriescash<br />

back and instant prizes<br />

at Xpress points. To be eligible<br />

for the cash back, customers<br />

need to make 3 transactions a<br />

week (cumulative minimum<br />

of N3, 000) to get cash back<br />

of N500 at the start of the following<br />

week. Customers who<br />

visit any of our Xpress points<br />

to carry out transactions will<br />

also receive instant free gifts<br />

provided the transaction value<br />

is up to N2, 000”<br />

He affirmed that customers<br />

could win as often as they<br />

transact as long as they meet<br />

the minimum requirements<br />

to qualify.<br />

Quickteller rewards 195 customers in<br />

new delight promo<br />

Quickteller, a leading<br />

portal for everyday<br />

payments in Nigeria<br />

has rewarded some<br />

of its esteemed customers at<br />

the Quickteller Delight promo<br />

draws held at the Interswitch<br />

Group head office in Lagos.<br />

Quickteller Delight promo is<br />

a reward initiative deliberately<br />

designed to give back to customers<br />

who have consistently<br />

made essential payments via the<br />

Quickteller website and mobile<br />

app. Staying true to Quickteller’s<br />

value proposition of making<br />

everyday payments easy, a total<br />

of 195 customers emerged as<br />

winners in eight categories via<br />

transparent electronic draws in<br />

line with predefined eligibility<br />

criteria.<br />

The eight promo categories<br />

were: electricity payments,<br />

cable TV subscriptions, fund<br />

transfers, toll payments, broadband<br />

internet payments, betting<br />

wallet funding, domestic flights<br />

payments and airtime recharge.<br />

Prizes won were threemonths<br />

DSTV premium subscription<br />

for 40 winners, threemonths<br />

broadband internet<br />

subscription for 40 winners,<br />

N20,000 e-Tag credit for 20 winners<br />

and N50,000 cash prize for<br />

20 winners. Other prizes were<br />

N80,000 domestic flight tickets<br />

for five winners, N10,000 betting<br />

credit for 40 winners, N19,200<br />

electricity credit (post-paid and<br />

pre-paid) for 10 winners and<br />

N15,000 airtime value over three<br />

months for 20 winners.<br />

Speaking at the draws,<br />

Group Head, Digital Payments<br />

(Product and Marketing Management)<br />

at Interswitch, Adetayo<br />

Teluwo stated that the<br />

promo is an expression of the<br />

company’s appreciation to<br />

the customers. He said: “Our<br />

business revolves around our<br />

customers and we fully understand<br />

they are the centre of our<br />

universe. We really cannot do<br />

much without their consistent<br />

trust and belief in our offerings<br />

by way of patronage and loyalty.<br />

We owe it to our extensive biller<br />

network to continue to grow<br />

their business volumes. Quickteller<br />

Delight is a commitment<br />

on our part to fulfil our ‘everyday<br />

payments made easy’ mandate”.<br />

Maduabuchi Nnaji who<br />

won N50, 000.00 in the promo<br />

said his excitement knew no<br />

bounds when he was contacted<br />

as one of the winners. “When I<br />

was making the transaction via<br />

Interswitch, I didn’t believe I<br />

was going to win. Thank you<br />

very much. I am very happy,”<br />

he said. The draws were conducted<br />

in the presence of representatives<br />

of the National Lottery<br />

Regulatory Commission<br />

(NLRC), Customer Protection<br />

Council (CPC) and the media.<br />

The Quickteller Delight<br />

promo ran from April 16 to July<br />

31, <strong>2018</strong> and offered customers<br />

an opportunity to choose<br />

the category within which they<br />

wanted to be rewarded.<br />

Quickteller, Nigeria’s leading<br />

consumer payments portal<br />

and one of the flagship payment<br />

brands of Interswitch, is a<br />

seamless, digital payments and<br />

commerce platform offering<br />

convenient access to an array of<br />

lifestyle services and utility payments<br />

via channels that matter<br />

to our diverse customers.


Wednesday <strong>22</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

Total Exploration concludes grassroots<br />

entrepreneurial training for 200 Rivers citizens<br />

Ignatius Chukwu & Innocent<br />

Total Exploration and<br />

Production Limited<br />

has concluded<br />

a grassroots entrepreneurial<br />

training<br />

started in January for about 200<br />

Rivers State indigenes who run<br />

small businesses.<br />

Tagged “Grassroots Entrepreneurial<br />

Programme for Egi<br />

Communities,” the event at Egi<br />

was the last of such trainings<br />

held in four of its host communities<br />

in the said local government,<br />

especially communities<br />

whose livelihoods were gravely<br />

affected by communal and cult<br />

crisis in recent times.<br />

The six months-long training<br />

- though with a break inbetween<br />

- being part of Total’s<br />

corporate social responsibility<br />

programmes, revolved around<br />

the principles of starting a<br />

business, record keeping, time<br />

management, business sustainability,<br />

growth, expansion<br />

Lagos Digital Academy commits to<br />

empowering business professionals<br />

amongst others.<br />

Also, the trainees are to be<br />

grouped and admitted into<br />

cooperative societies registered<br />

by Total for the purpose,<br />

through which beneficiaries<br />

would access Total’s-invested<br />

funding.<br />

According to Total’s Business<br />

and Enterprise Manager,<br />

Port Harcourt district, Philippe<br />

Desriac, the primary purpose of<br />

the programme is to diversify<br />

local economy - which for years<br />

has been oil-dependent - and<br />

to help the people chart a new<br />

course.<br />

“The training is a continuation<br />

of the company’s continued<br />

belief and commitment to<br />

the renewal and diversification<br />

of the Egi economy. This has<br />

become important because of<br />

the concerns that the greater<br />

part of the economic life within<br />

and around the Egi land has<br />

been focused on the oil and<br />

gas sector.<br />

“This is therefore the essence<br />

of the training: To prepare<br />

you for the future and<br />

give you the skills required to<br />

grow your micro-enterprises<br />

and create sustainable wealth<br />

into the future,” Desriac said.<br />

He said not only is it hoped<br />

that dependence on oil in Egi<br />

will drop through the programme,<br />

but that the initiative<br />

will facilitate an uptick in job<br />

creation.<br />

He pleaded with beneficiaries<br />

to make judicious use<br />

of the opportunity and not<br />

lag behind.<br />

“We therefore enjoin you<br />

to put to use in your various<br />

businesses the knowledge<br />

you have acquired these days<br />

so you can become successful<br />

businessmen and women for<br />

the fulfilment of this training<br />

vision. It is important for you<br />

to note that the wave into the<br />

future has begun and you cannot<br />

run the risk of being left<br />

behind. The tools are here for<br />

you and by embracing them,<br />

you are preparing yourself for<br />

the future,” he said.<br />

BUSINESS DAY 15<br />

COMPANIES & MARKETS<br />

Business Event<br />

L-R: David Idem, informal channel manager, MultiChoice Nigeria; Chidozie Bede-Nwokoye,<br />

marketing manager, GOtv; Daddy Shwokey, GOtv brand ambassador, and Akinola Salu, general<br />

manager, GOtv, during the Value Chains Engagement Session & Award party for Canvassers/M&Ps/<br />

Sabimen at Celebration Gardens Event Centre, Ikeja GRA, Lagos.<br />

HOPE MOSES-ASHIKE<br />

The Lagos Digital Academy<br />

has launched a wide<br />

range of intensive and<br />

immersive digital marketing<br />

courses that empowers<br />

business professionals to make<br />

their products and services acceptable<br />

to potential consumers.<br />

Lagos Digital Academy is a<br />

social enterprise that is strongly<br />

committed to teaching and inspiring<br />

a new generation of digital<br />

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 mobile<br />

phone in the Nigerian market<br />

had changed the ways and patterns<br />

of doing business. “How<br />

best can you reach your customers?<br />

No other platform can give<br />

you that direct personal access<br />

to consumers like the mobile<br />

phone. We have over 180 million<br />

Nigerians and averagely, people<br />

hold two to three network lines.<br />

In order to reach your consumers<br />

today, you have to be able to<br />

communicate with them on oneon-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.<br />

L-R: Vitalis Umeanadu, CWG Academy staff; Dennis Nwoye, CWG Academy Staff; Emmanuel<br />

Effiong, CWG Academy Coordinator; Henry Erigha, business director, financial services, CWG<br />

Plc; Rebecca Eke, CWG Academy Staff, and Eweje Oyeniyi, CWG Academy Staff, at Lagos<br />

Orientation Camp.<br />

International Breweries to empower<br />

entrepreneurs in product campaign<br />

Abdullateef Eniola-Giwa<br />

International Breweries Plc<br />

has announced the commencement<br />

of the 3rd edition<br />

of its Hero’s Foundation<br />

Kickstart Programme, a Corporate<br />

Social Investment initiative<br />

aimed at empowering and inspiring<br />

potential entrepreneurs<br />

in Nigeria.<br />

This year, the foundation is<br />

expanding to include more states<br />

and young entrepreneurs from<br />

Abia, Anambra, Benue, Delta,<br />

Ebonyi, Edo, Enugu, Imo, and<br />

Rivers states can now apply for<br />

a chance to participate in the<br />

programme.<br />

Muyiwa Ayojimi, company<br />

secretary / general counsel of International<br />

Breweries Plc, speaking<br />

at the media launch of the<br />

<strong>2018</strong> edition of the Hero’s Foundation<br />

Kickstart Programme in<br />

Onitsha said, the program was<br />

launched in 2016 to touch lives<br />

and inspire young people especially<br />

in the face of economic<br />

challenges in the country.<br />

“We initially kicked-off the<br />

programme with youths residing<br />

in the core south-eastern states of<br />

Abia, Anambra, Ebonyi, Enugu<br />

and Imo states; in 2017, we expanded<br />

our horizon to include<br />

Benue, Delta, and Edo states. I<br />

am proud to announce that this<br />

year we will be expanding further<br />

to include Rivers state to the list<br />

of participating states,” Ayojimi<br />

said. He further explained that<br />

the applications for the <strong>2018</strong><br />

edition of the programme are<br />

open to youths between 18 and<br />

35 years residing and doing business<br />

in the participating states.<br />

“Successful applicants will<br />

undergo a one-week intensive<br />

business training session with experts<br />

from the Nnamdi Azikiwe<br />

Business School, after which they<br />

will be required to develop and<br />

submit their business proposals.<br />

A team of judges will sift through<br />

the proposals based on their<br />

strength and sustainability. The<br />

final winners will be announced<br />

and given start-up/expansion<br />

fund at an award ceremony<br />

which will take place later in the<br />

year.” Ayojimi explained.<br />

Meanwhile since the Hero’s<br />

Foundation Kickstart programme<br />

commenced in 2016,<br />

64 enterprising entrepreneurs<br />

in participating states have been<br />

empowered with the sum of<br />

N132million, business training,<br />

and mentorship to turn their<br />

big ideas into sustainable businesses.<br />

L-R: Kunle Folarin, chairman, Nigerian Ports Consultative Council/keynote speaker; Mariam Afolabi,<br />

daughter and representative of Taiwo Afolabi; Adebayo Sarumi, former managing director, Nigerian<br />

Ports Authority, and chairman of the occasion, and Adewale Olawoyin, lecturer and staff adviser,<br />

maritime forum, UNILAG, at the third edition of the Taiwo Afolabi Annual Maritime Conference held<br />

at the Main Auditorium, University of Lagos.<br />

L-R: Tonne Marques, Senior Project Officer, Leadership Empowerment and Resource Network<br />

(LEARN); Anjola Obembe, LEARN student; Tope Ashiwaju, group public relations and events<br />

manager, Dufil Prima Foods Plc; Oke Olumide, LEARN student, Master, and Ronke Oguntoyinbo,<br />

chief operating officer, LEARN, during a cheque presentation by Indomie Instant Noodles to<br />

LEARN in Lagos.


Wednesday <strong>22</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

16 BUSINESS DAY


Politics<br />

& Policy<br />

Wednesday <strong>22</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

C002D5556<br />

BUSINESS DAY<br />

17<br />

Ortom Exit: Benue APC heading<br />

to rancorous guber primary<br />

JAMES KWEN, Abuja<br />

Even as the ruling All<br />

Progressive Congress,<br />

APC at the centre and in<br />

Benue State counted the<br />

defection of Governor<br />

Samuel Ortom as a blessing, there<br />

are strong indications his defection<br />

leaves bitter pills for the party.<br />

This is as the party is heading to<br />

a rancorous primary ahead of the<br />

2019 general elections more than<br />

what was obtainable in 2014.<br />

Prior to Ortom’s defection from<br />

the APC back to the People’s Democratic<br />

Party (PDP) on the account of<br />

an alleged red card issued him by<br />

an APC leader in Benue, the State<br />

Chapter of APC had during the last<br />

Congress unanimously endorsed<br />

him as its sole candidate in the<br />

2019 polls.<br />

But since Ortom dumped APC<br />

for the PDP there is an explosion<br />

of aspirants jostling for the party’s<br />

ticket, a development which portends<br />

danger for the party. As at<br />

last count no fewer than five politicians<br />

were struggling to clinch the<br />

ruling party’s governorship ticket<br />

in Benue state. They include; Emmanuel<br />

Jime, Asema Achado, Titus<br />

Zam, Akange Audu and Benjamin<br />

Adanyi.<br />

All the aspirants are men of<br />

timber and calibre in the Benue<br />

political circle and are eminently<br />

qualified to fly APC ticket and above<br />

all, they are from the same MINDA<br />

political bloc with Ortom where the<br />

governorship slot is zoned to base<br />

MIKE ABANG, Calabar<br />

The Federal Capital Territory<br />

High Court 14 has restrained<br />

the All Progressives Congress<br />

(APC) and members of the<br />

National Working Committee (NWC)<br />

and their agents from conducting any<br />

state congress, ward or local government<br />

congress in Cross River State in<br />

perpetuity pending the determination<br />

of the substantive suit.<br />

In a suit No FCT/HC/CV/106/<strong>2018</strong><br />

between Sylvester Okpo, APC Cross<br />

River Southern Senatorial Vice Chairman,<br />

Regina Takon, APC ex officio<br />

and Charles Esasim, APC Cross River<br />

State Youth Leader as plaintiffs and<br />

APC Nigeria as defendant, the Court<br />

ordered as follows and signed by Justice<br />

O.A Musa.<br />

“That an order is hereby made restraining<br />

the defendant either by itself,<br />

any committee, privies by whatever<br />

name called or any organ of the party<br />

except national convention, from purporting<br />

to nullify the congress of the<br />

Cross River State of the defendant or<br />

Ortom<br />

on the Tiv sharing formula.<br />

For instance, Jime was one time<br />

Speaker of the Benue State House<br />

of Assembly, two -term Member of<br />

the House of Representatives and<br />

currently the Managing Director,<br />

Nigeria Export Processing Zone,<br />

NEPZ. He was a leading aspirant at<br />

the APC Governorship primaries<br />

in 2014 when Ortom came at the<br />

eleventh hour and clinched the<br />

ticket via consensus arrangement<br />

orchestrated by leader of the party,<br />

George Akume.<br />

Achado is an accomplished Ar-<br />

Court restrains APC NWC from conducting<br />

another state congress in C/ River<br />

in any manner interfere, suspend or<br />

breach the rights and privileges of the<br />

claimants as the state executive officers,<br />

or other Local Government and<br />

Ward officers of the All Progressives<br />

Congress in Cross River State pending<br />

the determination of the substantive<br />

case in the originating summons.”<br />

It is hereby ordered that the time<br />

with which the defendant may enter<br />

appearances and file defense is<br />

abridged to 14 days from service of<br />

the originating process, that an order<br />

for accelerated hearing is hereby<br />

granted. Case was adjourned to 25th<br />

October, <strong>2018</strong> for definite hearing, the<br />

justice ruled.<br />

Speaking to Journalists on Monday<br />

at the APC Secretariat, Francis<br />

Ekpeyong Cross River State Secretary<br />

of APC, confirmed the injunction<br />

slammed on the party saying “I am<br />

here to address you holistically having<br />

observed that our brothers from<br />

the other side are struggling to annul<br />

congress who think that there is faction<br />

in APC Cross River State with some<br />

members of the NWC.<br />

chitect of national visibility and an<br />

investor in many sectors including<br />

banking, hospitality and agriculture.<br />

Politically, he had aspired to represent<br />

Benue North West in the Senate<br />

in 2003, Gwer East State Constituency<br />

in the Benue State House of<br />

Assembly in 2007 and Gwer East/<br />

Gwer West in the House of in 2015<br />

but did not win any of the election.<br />

Zam is the immediate past Special<br />

Adviser to Governor Ortom<br />

in charge of the Bureau for Local<br />

Government and Chieftaincy Affairs,<br />

former Chairman, Gwer West<br />

SIKIRAT SHEHU, Ilorin<br />

Local government council and also<br />

served as the Benue State Publicity<br />

Secretary and later Organising<br />

Secretary of the APC.<br />

Audu, who is the APC leader<br />

for Benue North West, is a retired<br />

Permanent Secretary and was one<br />

of the contenders for APC governorship<br />

ticket penultimate to the 2015<br />

general elections.<br />

Adanyi, a former Aide to Akume<br />

during his tenure as Governor is<br />

the current Member representing<br />

Makurdi South Constituency and<br />

was the Majority Leader of the<br />

Benue State House of Assembly<br />

before the crisis rocking the House.<br />

Benue APC is likely to have a<br />

crisis ridden Governorship primary<br />

because all the aspirants except<br />

Jime are deeply rooted in the Akume<br />

political dynasty, making it difficult<br />

to have a smooth exercise as all of<br />

them are expecting his backing.<br />

It was reported that when it became<br />

crystal clear that Ortom was<br />

no longer dancing to the political<br />

tune of Akume, he called Achado<br />

who is his henchman to join the race<br />

for APC governorship ticket and the<br />

later obliged.<br />

Analysts are also of the view<br />

that the others are inspired by the<br />

Benue APC leader to contest so that<br />

he would measure the popularity<br />

of each during consultations and<br />

campaigns ahead of the primaries<br />

then decide who would emerged<br />

the party’s flag bearer to ensure his<br />

party reclaim the governorship seat.<br />

Further arguments indicated that<br />

the many aspirants syndrome is a<br />

strategy adopted by the APC leader<br />

Saraki: Baraje warns APC, others against impeachment<br />

Former Acting National Chairman<br />

of the People’s Democratic<br />

Party (PDP), Kawu Baraje<br />

has warned the ruling All<br />

Progressives Congress (APC), which<br />

is seeking to impeach the President<br />

of the Senate, Bukola Saraki to desist<br />

from ‘playing God’, having tried their<br />

hands at least thrice to reach that goal<br />

without success.<br />

Baraje, who spoke with newsmen<br />

at the graduation ceremonies of his<br />

Baraje Centre for Arabic and Islamic<br />

Studies in Ilorin, Kwara State, said<br />

the only instruments to resolve all<br />

the problems is honesty, love from<br />

the grassroots, sincerity and rule of<br />

law not impeachment.<br />

He also warned the APC against<br />

using ‘Gestapo’ method to impeach<br />

Saraki and his Deputy, Ike Ekeremadu<br />

even as he advised them<br />

shelve the idea and accept that<br />

facts that having failed thrice to get<br />

the leaders of the Senate out of the<br />

se.,at; they need to submit to the<br />

will of God.<br />

He argued that Saraki had twice<br />

stepped down his presidential ambition<br />

in 2011 and 2015 to support<br />

former President Goodluck Jonathan<br />

and President Muhammadu<br />

Buhari and today “has what it takes<br />

to unite Nigeria.”<br />

According to Baraje, the decision<br />

by the Saraki group to be less<br />

combative in the war of attrition<br />

that has engulfed the political space<br />

must not be misconstrued for lack<br />

of boldness or what to say.<br />

“Saraki has been trying on being<br />

the President since 2011; if you<br />

remember he withdrew for then<br />

candidate Goodluck Jonathan in<br />

2011 and he also withdrew for the<br />

current President, Muhammadu<br />

Buhari in 2015 so for anyone with<br />

that ambition nothing is wrong to<br />

come forward to aspire.<br />

“Today he is the only candidate<br />

that can unite this country because<br />

the present situation we are in this<br />

country today unless we get a candidate<br />

who can unite us then we are<br />

in serious jeopardy,” he said.<br />

He alleged that some powerful<br />

to endear the party to the people<br />

so as to fill the vacuum created by<br />

the exit of Governor Ortom and<br />

other leaders like Barnabas Gemade,<br />

Benue North East Senator, Emmanuel<br />

Udende, Mark Gbillah, Dickson<br />

Tarkighir; Members of the House of<br />

Representatives, among others.<br />

Political pundits observed that<br />

the introduction of money bags<br />

such as Achado and Zam is to lure<br />

the people who have been impoverished<br />

by the non -payment of<br />

salaries by the then Ortom led APC<br />

government to change the narrative<br />

in favour of the ruling party but<br />

what remains uncertain is the fate<br />

of the APC after the primary when<br />

those who spend heavily do not get<br />

the ticket.<br />

Above all, the Emmanuel Jime<br />

factor portends grave danger for<br />

Benue APC ahead of the governorship<br />

primaries. Jime who was<br />

already winning the 2014 primary<br />

until the exercise was punctuated<br />

midway, is believed to have the<br />

backing of the APC National leadership/<br />

Presidency as he was asked<br />

by same to withdraw the suit he<br />

instituted against Ortom and was<br />

obviously going to oust the governor<br />

out of office after the 2019 polls.<br />

With Jime in the race and aspirants<br />

believed to be more loyal to<br />

Akume who has firm grip of APC<br />

structures/ delegates in Benue, the<br />

governorship primary is going to be<br />

nothing but a fight between Akume<br />

and National leadership of the party<br />

and should both insist their candidates<br />

must emerge, the primaries<br />

would be indeed rancorous!<br />

people within the APC are profiting<br />

from the war between the Executive<br />

and legislative arms of government,<br />

hence their constant subtle moves<br />

to ensure absence of peace between<br />

the two arms.<br />

Speaking further, he said: “As a<br />

politician you need to have a mind<br />

that is alive; I read the constitution<br />

and on impeachment the law is very<br />

clear that it is only two third of the<br />

senators and not two third of members<br />

present that can decide on the<br />

issue. Some of us are not trained to<br />

talk more but the fact that we don’t<br />

talk doesn’t mean we know less;<br />

people are saying many things on<br />

this issue that is really an insult to<br />

our collective sensibilities.<br />

“Some of us have experience<br />

leading political parties and we have<br />

gone through this kind of situation<br />

before and we know that resolving<br />

it is not by Gestapo method or just<br />

talking anyhow; we know that the<br />

conflict between them has continued<br />

unabated because some people<br />

are making profit from it and so they<br />

don’t want it to cease.


18 BUSINESS DAY C002D5556 Wednesday <strong>22</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

Politics<br />

& Policy<br />

2019: Buhari, Saraki naked fight: Who blinks first?<br />

INNOCENT ODOH, Abuja<br />

The disturbing war of<br />

words and the battle of<br />

wits between President<br />

Muhammadu Buhari<br />

led-Presidency backed<br />

by the leadership of the ruling All<br />

Progressives Congress (APC) led<br />

by Adams Oshiomhole, is in grim<br />

battle against the leadership of the<br />

National Assembly led by President<br />

of the Senate, Bukola Saraki.<br />

The political hostility has intensified<br />

barely six months to the 2019<br />

general elections and the crisis has<br />

not shown a sign of abetting, judging<br />

by the hardening of positions<br />

of the principal belligerents and<br />

their acolytes.<br />

This crisis is traceable to the<br />

circumstances that led to the emergence<br />

of Saraki as the President of<br />

the Senate in June 2015, where Saraki’s<br />

maneuvers and deft political<br />

calculations and alliance with the<br />

People’s Democratic Party (PDP)<br />

fetched him the coveted seat of the<br />

President of the Senate against the<br />

wishes of some APC bigwigs.<br />

Saraki then came under a flurry<br />

of corruption allegations, ranging<br />

from forging the Senate rules to his<br />

advantage, to the alleged false asset<br />

declaration. He was dragged before<br />

the Code of Conduct Tribunal (CCT)<br />

and was docked. The Buhari government<br />

probably sensing it would not<br />

make any headway in its quest to indict<br />

Saraki on account of the Senate<br />

rule withdrew the case. It however,<br />

continued to pursue that of false<br />

asset declaration until the Supreme<br />

Court ruled in July, <strong>2018</strong> that Saraki<br />

had no case to answer at the tribunal.<br />

Then the police started their own<br />

version and fingered Saraki as an<br />

alleged facilitator of the deadly Offa<br />

robbery incident, which left over 30<br />

people dead including a pregnant<br />

woman and some policemen. Even<br />

as the police are still investigating the<br />

matter, it appears there was no clear<br />

evidence directly linking the President<br />

of the Senate to the incident.<br />

The Presidency and the APC<br />

leadership then devised new ways<br />

to harm the integrity of Saraki and<br />

to undermine his leadership through<br />

plots to impeach and remove him<br />

from office. The plot was said to have<br />

been hatched by the party and the<br />

police but the execution was horribly<br />

implemented on July 24, when<br />

the alleged plot by the police to cage<br />

Saraki in his residence to stop him<br />

from presiding over the defection of<br />

some APC federal lawmakers failed.<br />

How the President of the Senate<br />

Buhari<br />

beat the security phalanx mounted<br />

to barricade his movement remains<br />

a mystery, but it was a big blow to<br />

the APC as the Kwara lawmaker<br />

emerged in the National Assembly<br />

to read a list of 14 Senators, who<br />

defected from the ruling party to<br />

the PDP, even as similar scenario<br />

was replicated on the same day (July<br />

24) in the House of Representatives<br />

where 37 members defected to the<br />

PDP and other parties. Barely a<br />

week later, Saraki in company of the<br />

Governor of Kwara state, Abdulfatah<br />

Ahmed, announced his defection to<br />

the PDP, an event that strengthened<br />

the APC wild indignation against<br />

him.<br />

Again, Saraki escaped another<br />

impeachment plot on <strong>Aug</strong>ust7,<br />

when hooded and well-armed men<br />

of the Directorate of the Security<br />

Service (DSS) invaded the National<br />

Assembly on the orders of the sacked<br />

DSS Director General, Lawal Daura,<br />

allegedly in cahoot with the APC<br />

leadership to instigate the impeachment<br />

of Saraki. The plan failed but<br />

since then neither the Presidency<br />

nor the APC leadership has given up<br />

hope to chase Saraki out of his seat<br />

as he has refused to yield their call<br />

for resignation.<br />

The Presidency commenced a<br />

new wave of the war on Sunday <strong>Aug</strong>ust<br />

19. In a statement signed by the<br />

Senior Special Assistant to the President<br />

on Media and Publicity, Malam<br />

Garba Shehu, the President said<br />

Bukola Saraki and the National Assembly<br />

should be held responsible<br />

for the delay in passing the supplementary<br />

budget for the Independent<br />

National Electoral Commission,<br />

INEC, for 2019 general elections.<br />

The Presidency noted that President<br />

Muhammadu Buhari reluctantly<br />

signed the <strong>2018</strong> budget into<br />

law after it had been distorted by the<br />

National Assembly stressing that the<br />

National Assembly delayed the <strong>2018</strong><br />

budget that was submitted on No-<br />

Saraki<br />

vember last year for seven months.<br />

It added that there was no way a<br />

supplementary budget could have<br />

been submitted without the passage<br />

of the main budget.<br />

The statement titled, “Senator<br />

Saraki, look at mirrow, it’s your face<br />

that’s in it”, the presidency absolved<br />

President Buhari from any blame in<br />

the supplementary budget delay.<br />

The statement read this, “The Presidency<br />

wishes to respond to the false<br />

accusations by Senator Bukola Saraki<br />

who alleged that President Muhammadu<br />

Buhari is to blame for the delay<br />

in approving the supplementary<br />

budget for INEC.<br />

“On the contrary, the Senate<br />

President should look into the mirror<br />

and what he will see is his own face.<br />

He is solely to be held responsible for<br />

deliberately driving the nation to this<br />

cliff edge as far as the preparations<br />

for next elections are concerned.<br />

“It is not true that INEC submitted<br />

their draft budget to the<br />

Presidency in February. No, it came<br />

much later but even then, this is<br />

not the real issue. The fact that<br />

their proposals came well after the<br />

President had laid his budget for<br />

the year <strong>2018</strong> before the National<br />

Assembly meant that their own will<br />

be sent as supplementary budget.<br />

This was clearly stated to them by<br />

the Minister of Budget and National<br />

Planning.<br />

“A supplementary budget cannot<br />

be submitted until the main budget<br />

is passed, and so the delay in passing<br />

the main budget was the reason<br />

for the delay. The National Assembly<br />

passed the <strong>2018</strong> budget seven<br />

months after the document was<br />

submitted to the National Assembly<br />

by President Buhari.<br />

“Unless someone has forgotten,<br />

the budget was submitted to the<br />

National Assembly and it took the<br />

Saraki-led National Assembly seven<br />

months to release it. There is no way<br />

President Buhari could have submit-<br />

ted a supplementary budget while<br />

the main one was still pending. It is<br />

never done. “Because Saraki did not<br />

return the main budget, we could not<br />

have submitted the supplementary<br />

one.<br />

“After the long delays, the President<br />

was pained to sign the much<br />

distorted, butchered and debauched<br />

document. In giving his assent,<br />

President Buhari said that he was<br />

compelled to sign the budget so as<br />

not to keep the economy continuously<br />

on a standstill.<br />

“In his words: “When I submitted<br />

the <strong>2018</strong> Budget proposals to the<br />

National Assembly on 7th November<br />

2017, I had hoped that the usual<br />

legislative review process would be<br />

quick, so as to move Nigeria towards<br />

a predictable January-December<br />

financial year.”<br />

“It is also worthy of note that this is<br />

the first time in Nigeria’s history that<br />

a government would bring together<br />

the cost of an election in one budget,<br />

with each agency involved invited to<br />

defend their portion of the budget<br />

before the National Assembly.<br />

“It is all part of the transparency<br />

that this government is known for.<br />

In the past, governments would<br />

approve INEC budgets and funding<br />

without a breakdown, often using<br />

ways and means to fund it not so<br />

under President Buhari,” the statement<br />

said.<br />

However, Saraki’s media team<br />

through Olu Onemola, the Special<br />

Assistant on New Media to the<br />

President of the Senate on Sunday<br />

replied the Presidency, saying that<br />

Buhari’s statement is ‘conscientious<br />

ignorance’ on full display.<br />

Onemola stated that despite the<br />

unforced errors on the part of the<br />

Executive, which failed to submit the<br />

general elections budget on time, the<br />

relevant committees of the National<br />

Assembly are still working assiduously<br />

to ensure that due process is<br />

followed in approving the President’s<br />

request.<br />

The Saraki media aide quoted the<br />

famous ‘Letter from Birmingham<br />

Jail’ of the much respected the Reverend<br />

Dr. Martin Luther King Jr. which<br />

stated that “Nothing in all the world<br />

is more dangerous than sincere ignorance<br />

and conscientious stupidity.”<br />

“It is necessary to begin this response<br />

to the Buhari Media Organization’s<br />

statement about the Senate<br />

President, Dr. Abubakar Bukola<br />

Saraki, by reminding us of this fact.<br />

This is because the statement issued<br />

in Abuja on Friday, <strong>Aug</strong>ust 17th, by<br />

the organization, is a careful and<br />

deliberate example of conscientious<br />

ignorance on full display.<br />

“By now, the Nigerian people are<br />

aware that the Executive branch<br />

could have submitted INEC’s 2019<br />

Election budget at the time it submitted<br />

the <strong>2018</strong> appropriations proposal<br />

last year. Furthermore, the Executive<br />

had from January till June this year to<br />

submit the budget request. However,<br />

due to a perceived lack of foresight,<br />

display of usual tardiness or an attempt<br />

to ensure that due process<br />

would not be followed, this request<br />

was submitted only a few days before<br />

the statutory National Assembly annual<br />

recess.<br />

“Regardless of this unforced error<br />

on the part of the Executive, the<br />

National Assembly has continued its<br />

work on this budget. As it stands: the<br />

relevant Senate and House Committees<br />

have held individual budgetary<br />

hearings with the INEC Chairman<br />

and all his Commissioners on this<br />

budget. They have also held followup<br />

Joint Committee meetings to<br />

carefully scrutinize the provisions<br />

of the budget.<br />

“Furthermore, the Joint Committees<br />

are now scheduled to meet on<br />

Monday when they are expected to<br />

come up with a Committee report<br />

that will be sent to the Appropriations<br />

Committee, which will spell out<br />

how to source the President’s virement<br />

request through the concerned<br />

MDAs,” the statement said.<br />

Saraki’s media aide also noted<br />

that any person or organization<br />

that is conversant with legislative<br />

due process would know that it is<br />

only after the Appropriations Committee<br />

has worked on the budget<br />

details that a plenary sitting is<br />

required to adopt the final report.<br />

He said that the President of the<br />

Senate, the Senate and the entire<br />

National Assembly, are committed<br />

to ensuring that the 2019 elections<br />

receive all necessary funding<br />

stressing however, that this should<br />

not be at the expense of due process<br />

and stated guidelines.<br />

…Senators denounce APC, back Saraki<br />

In their reactions the chairman,<br />

Senate Committee on Navy,<br />

Senator Isah Hamma Misau<br />

and his counterpart in the<br />

Committee on Banking, Finance<br />

and Other Financial Institutions,<br />

Senator Rafiu Adebayo Ibrahim<br />

have advised the All Progressives<br />

Congress (APC) and its leaders its<br />

incessant attempts at looking for<br />

scapegoats for the failure to fulfill<br />

their promises to the electorate by<br />

constantly blaming the President of<br />

the Senate Bukola Saraki.<br />

Misau and Rafiu in a joint statement<br />

at the weekend stated that<br />

the APC leaders have continued<br />

to whine about what Saraki did or<br />

did not do to ensure the Buhari<br />

government failed without caring<br />

whether it was reasonable to believe<br />

that one single individual who<br />

had been continuously assailed by<br />

the government would at the same<br />

time be in a position to ground the<br />

government.<br />

“APC leaders are being clever by<br />

half. They have spent most of the<br />

last 38 months harassing Saraki and<br />

sponsoring media attacks against<br />

him. Now that the man has been<br />

vindicated by the courts and he has<br />

decided to leave their party, they<br />

have devised another propaganda<br />

stunt to start heaping the blames<br />

of their failure to bring positive<br />

change to Nigeria on Saraki.<br />

“For three years of the APC<br />

administration, former President<br />

Goodluck Jonathan was the scapegoat<br />

they blamed. Now that it<br />

dawned on them that nobody is<br />

listening to that tale by moonlight<br />

again, their propaganda machinery<br />

has shifted focus to Saraki as<br />

the new man to blame. These are<br />

characters who cannot take responsibility<br />

for their inability to provide<br />

good governance as they promised.<br />

“Must these people blame<br />

somebody all the time? Were they<br />

elected to bring in positive change<br />

or to shift blames? It is irresponsible<br />

for people invested with<br />

popular mandate to always look<br />

for somebody to be held responsible<br />

for their failure to fulfill their<br />

promises and give expression to the<br />

mandate they were given.<br />

“Instead of concentrating on<br />

how to use the next six months before<br />

the general elections to hasten<br />

the completion of infrastructure<br />

projects, enunciation of policies and<br />

initiation of programmes which can<br />

improve the standard of living of the<br />

people and ameliorate the consistent<br />

failure of the last three years,<br />

the APC is now led by demagogues<br />

who seem not to care if they bring<br />

the entire country down.<br />

“The new leadership of the APC<br />

has continued to advertise the inability<br />

of the party to manage victory,<br />

their penchant for violence as<br />

a way of saving their faces and their<br />

lack of the much needed temperament<br />

to wield together a country<br />

with diverse culture, ethnicity and<br />

religion like Nigeria.


Wednesday <strong>22</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

C002D5556<br />

BUSINESS DAY<br />

19<br />

Politics<br />

& Policy<br />

How I will tackle poverty in AMAC/Bwari<br />

Federal Constituency- Female aspirant<br />

A female aspirant who desires to clinch the seat of the AMAC/ Federal Constituency of the Federal Capital Territory (FCT) in the<br />

House of Representatives, Zainab Marwa- Abubakar, has said if given the chance, she will offer a representation that will<br />

transform the lives of her constituents and reduce their poverty through strategic initiatives. In this interview with INNOCENT<br />

ODOH, the All Progressives Congress (APC) aspirant also said she stands with President Muhammadu Buhari and the APC for<br />

giving Nigeria a new direction of leadership despite the challenges the nation is facing. Excerpts:<br />

What motives you to contest under<br />

the ruling party the APC for the<br />

Bwari/AMAC Federal Constituency?My<br />

main motivation<br />

is service. I have<br />

a great interest in<br />

serving humanity in<br />

all spheres of social<br />

welfare, health, education, enlightenment<br />

and the like. I believe that<br />

the best way you can serve God is<br />

through serving people. My religion,<br />

Islam, tells me about serving people,<br />

generosity and caring for the less<br />

privileged.<br />

I realized that after so many<br />

years of working in the NGO world<br />

that probably doing it in a larger<br />

platform will expand my tentacles<br />

in the areas of service and that was<br />

when I fell in love with the idea of<br />

becoming a politician, the idea of<br />

becoming a member of the House<br />

of Representatives.<br />

You are in a very competitive race,<br />

so how far have you gone in making<br />

consultations with the stakeholders<br />

in your party and within your<br />

constituency, and how far do you<br />

think your effort will give you the<br />

ticket in your party?<br />

In terms of consultations, if you are<br />

talking about the primaries, we are<br />

trying our best. We have consulted<br />

with the people that matter while<br />

praying that God should help us<br />

because at the end of the day, power<br />

comes from God. As you said, it is<br />

very competitive we have about 9<br />

people competing for the same seat<br />

in the constituency.<br />

In concrete terms, what kind of<br />

representation will you offer the<br />

people of your constituency judging<br />

by so many of the challenges<br />

that they now have in the present<br />

time?<br />

As I said, I work with NGOs. I am the<br />

President of ZMACO Foundation<br />

and through the NGOs; we have undertaken<br />

so many programme and<br />

projects. When I meet with people<br />

in the FCT, I always tell them about<br />

the things that I have done in the<br />

past. When I am talking about my<br />

manifesto, I always mention what I<br />

know I can deliver based on my track<br />

record of service delivery, in terms to<br />

improving the quality of lives of those<br />

within AMAC and Bwari.<br />

We are focused on education<br />

especially that of children. When<br />

you go to schools these days you see<br />

they have become an eyesore, which<br />

is unacceptable in <strong>2018</strong>. We have to<br />

understand the fact that when you<br />

want your children to learn, they<br />

have to enjoy a level of comfort. That<br />

also shows that the Nigerian children<br />

are very resilient and amazing kids<br />

because they are able to learn and<br />

absorb information even in the direst<br />

circumstances. We want to provide<br />

Zainab<br />

the infrastructure and create conducive<br />

environment for learning.<br />

We have to also look at health.<br />

There was a lady that lost her three<br />

kids because of inadequate care in<br />

the hospital and I find that also unacceptable.<br />

I find out that so many<br />

of the health challenges in Nigeria<br />

right now and in the FCT are things<br />

that are avoidable. We have lack of<br />

free antenatal, lack of affordable<br />

education, lack of affordable health<br />

care and lack of enlightenment. We<br />

still have people who don’t go to hospital<br />

to give birth around the satellite<br />

towns in the FCT because they don’t<br />

have hope in the system the rather<br />

give birth at home. Women are dying<br />

every day from hemorrhage.<br />

So we have education in our<br />

mind, we have quality health care<br />

in our mind and we also have the<br />

issue of the People with Disabilities<br />

(PWDs). Most of the places you go to<br />

in the FCT have no facilities for PWDs<br />

whether you are blind or you cannot<br />

walk, or you cannot hear, there is<br />

hardly any facilities for them. When<br />

you go abroad, you find out that most<br />

of the bus stations have some sort<br />

of brail what the blind people use to<br />

read even on the road. We don’t have<br />

such things and I hope to develop<br />

them in FCT. We have people with<br />

disabilities but they are kept away<br />

as if they are not human. So we will<br />

work to address that.<br />

We also have issues do to with<br />

the environment. We have a really<br />

good programme called Operation<br />

Sweep and it deals with sanitizing<br />

the environment. Gone are the days<br />

when we cared about our environment,<br />

today see people living near<br />

gutters, near wastes and they don’t<br />

care because they are so used to not<br />

being cared for. You see people burning<br />

refuse day and night, so we have<br />

to put a stop to that. These wastes can<br />

be turned into treasure.<br />

You have women that are cooking<br />

with firewood and the black carbon is<br />

killing them. So some of these things<br />

we should look into and stop ignoring<br />

them. You can easily take these<br />

wastes, turn it into briket and the<br />

women can use it to cook. It does not<br />

emit the black carbon, it is safer, and<br />

it is cleaner for their health.<br />

We are also talking about empowerment<br />

for the women and the<br />

youth. Most of the initiatives that I<br />

see are people just buying grinding<br />

machine and tricycle (keke NAPEP)<br />

and throw them on people and they<br />

are forced to use them. What I want<br />

to offer is a ward-to-ward initiative<br />

and also a tailored –to- fit initiative.<br />

We need to really go and find out<br />

what people really want to do. We<br />

need to find out their passion in<br />

life. If I enjoy making hair and you<br />

give me grinding machine you have<br />

not really helped me because I will<br />

probably sell the machine and move<br />

on or the work will be so tedious for<br />

me. If you know that I want to be a<br />

hair stylist and you give me the things<br />

that a hair stylist needs, give me the<br />

necessary training, you will find out<br />

that I will do well because passion is<br />

very important.<br />

So by the grace of God the empowerment<br />

that we want to do for<br />

all the citizens of Abuja in skill acquisition<br />

will include those that we<br />

have interviewed and gotten to know<br />

what they want. But if we cannot give<br />

them the training immediately, we<br />

source the training. This is the age of<br />

technology everything is at the finger<br />

tips. We can easily train people on<br />

whatever they want to do; we can give<br />

them single digit interest soft loan,<br />

so that people can actually pay back.<br />

These are things that I have done<br />

with my NGO and these are things<br />

that I am 100% sure I can deliver and<br />

that is why I made these promises in<br />

my manifesto. I have so many plans<br />

and ideas but I am going to leave that<br />

till God puts me in the seat.<br />

Being a woman, you are faced with<br />

some challenges in this contest.<br />

What are these challenges?<br />

Everybody talk about funding. Funding<br />

is very important. Unfortunately<br />

in Nigeria today the name of the<br />

game is money politics. If you cannot<br />

play it you have to go home.<br />

Everything revolves around money<br />

and it is understandable. I did not<br />

understand it before but being in the<br />

game now, I understand. So funding<br />

is a very big issue but for me it is not<br />

the main issue. The main issue is not<br />

being taken seriously.<br />

When you come out to run for office<br />

in Nigeria especially as a woman,<br />

who perhaps lacks the financial or<br />

political clout like someone like me<br />

that is coming for the first time, you<br />

have this issue of not being taken<br />

seriously. Then when you speak you<br />

have to watch you words and watch<br />

your steps, there are so much stigma<br />

attached to being a female politician<br />

especially in the north being a Muslim<br />

woman. But these things don’t affect<br />

me at all because I have already put<br />

my mind to serving the people. As<br />

for the funding, we shall continue to<br />

agitate for international donors, government<br />

and private organisations<br />

to come to the aid of women that are<br />

really trying to make a difference.<br />

What I also think that is important<br />

is that the political parties should<br />

demonstrate gender equality as their<br />

main agenda. We also need the 35%<br />

female representation as the first<br />

lady is also agitating. We are trying<br />

to move against the current. I have a<br />

forum for female aspirants to run and<br />

trying to get us together under one<br />

umbrella for the APC and see how we<br />

can agitate for a better representation<br />

especially with the primaries coming<br />

in just over a month. But if God give<br />

me the grace, I will show them that<br />

a woman can deliver.<br />

With current state of the Nigerian<br />

economy, the insecurity and social<br />

tension being generated towards<br />

the2019 election, how would you<br />

rate the APC government under<br />

President Muhammadu Buhari in<br />

the last three years?<br />

I will honestly rate the party very<br />

highly. I commend President Muhammadu<br />

Buhari, I commend him<br />

whole heartedly because what we<br />

must appreciate is that sometimes<br />

when you want to start a journey,<br />

it may turn out differently. The<br />

President and his team and even<br />

Foreigners who do Compliance and<br />

Evaluation measures have said that<br />

the way Nigeria was to the where the<br />

President has brought us to be, he has<br />

done a good job.<br />

Talking about social tension, insecurity<br />

and the state of the economy,<br />

I believe that things have been bad<br />

and getting worse for some time<br />

now but it is not something that<br />

just emerged over night. I strongly<br />

believe that if given the chance to<br />

run another four years the President<br />

will bring Nigeria where we Nigerians<br />

want it to be. So I stand firmly behind<br />

the president, I stand firmly behind<br />

my party-APC and I encourage Nigerians<br />

to stand firmly behind our<br />

president, he is doing his best and<br />

he is doing some good work for us<br />

but we should not expect a miracle<br />

out of him. He has done his best from<br />

what he met on ground and now is<br />

the time for us to cast our hope and<br />

cast our hope for him.<br />

The APC has been in turmoil following<br />

the gale of defections that<br />

hit it in the run up to the 2019<br />

elections, especially the defection<br />

of the President of the Senate Bukola<br />

Saraki. This appears to have<br />

unsettled the party. Does this not<br />

portend danger for your party<br />

ahead of the elections?<br />

I don’t think this turmoil is good<br />

for my party or any party or even<br />

a household. Nigeria is a country<br />

where the political parties do not<br />

have distinct ideologies, so people<br />

tend to run from party to party. But<br />

the APC has more dignity, is more<br />

commendable than any other party<br />

in Nigeria and that is why I am proud<br />

to be a member of the APC. So even<br />

if half of the APC leaves it does not<br />

change anything. What is happening<br />

in APC is unfortunate but I really believe<br />

that the party will scale through;<br />

I believe that the same people that<br />

pushed the party from the beginning<br />

will continue to do so. But we should<br />

recruit more youths.<br />

If the APC fails to give you the ticket<br />

to contest the election will you go to<br />

another party?<br />

I have lion’s heart and a winner’s<br />

mentality, so anything that I do, I do<br />

with mind of winning. So I hope to<br />

win by the grace of God I will certainly<br />

win. But as you ask if I don’t get<br />

the party’s ticket will I go to another<br />

party and I say never. I am extremely<br />

loyal; I will remain with the APC.<br />

There is menace of vote buying<br />

threatening the democratic space.<br />

What is your reaction to this?<br />

With all due respect, the people at<br />

the grassroots are only remembered<br />

during election time. So that is the<br />

only time they can eat. So when<br />

person X is running for an election,<br />

he will look for people and give them<br />

10,000, 20,000 even some are sharing<br />

cars, sharing lots of money and what<br />

happened is when they win and the<br />

person gets to office, they completely<br />

forget the people because that 10,000<br />

has bought their votes. That is why<br />

the politicians neglect the welfare,<br />

education and health of the people.<br />

But 2019 will be different. The people<br />

will collect the money and vote their<br />

conscience.


20 BUSINESS DAY<br />

Financial Inclusion<br />

&<br />

INNOVATION<br />

Supported by:<br />

C002D5556<br />

Wednesday <strong>22</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

MTN’s 2.2m mobile money users<br />

show Nigeria lags its African peers<br />

HOPE MOSES-ASHIKE AND<br />

ENDURANCE OKAFOR<br />

MTN Nigeria<br />

with<br />

the highest<br />

subscriber<br />

base of 55.2<br />

million recorded 2.2 million<br />

active mobile money<br />

users in <strong>2018</strong>, second lowest<br />

among other African<br />

countries.<br />

The Nigeria arm of the<br />

South African company expanded<br />

its subscriber base<br />

by 5.6 percent from 52.11<br />

million in December 2017<br />

to 55.2 million in June <strong>2018</strong>.<br />

This was followed by the<br />

South Africa subsidiary with<br />

30.2 million subscribers.<br />

Stanley Jacob, president,<br />

committee of e-Business industry<br />

heads (CeBIH), said it<br />

may not be fair comparison<br />

to link the mobile money<br />

subscribers on MTN network<br />

to the overall lines on<br />

the network without bringing<br />

the total mobile money<br />

subscribers into the picture.<br />

The 2.2m mobile money<br />

subscribers could be an indication<br />

of the slow adoption<br />

of the mobile money ecosystem<br />

and has no relation<br />

to the network in question.<br />

“I believe that with the<br />

various initiatives from<br />

Banks and other payment<br />

operators, we are set to see<br />

an exponential growth in the<br />

number of mobile wallet and<br />

bank account holders - this<br />

would not be for MTN alone<br />

but across board growth and<br />

irrespective of the telcos”,<br />

Jacob said in an emailed<br />

response to <strong>BusinessDay</strong>.<br />

A breakdown of the MTN<br />

H1 <strong>2018</strong> report showed that<br />

MTN Ghana reported 7.9million<br />

or 33 percent out of the<br />

LBS customer segmentation study rips up conventional approach to financial inclusion<br />

OLUWATOSIN DOKUNMU<br />

One of the key findings<br />

of the Customer<br />

Segmentation<br />

study executed<br />

by the Lagos Business<br />

School (LBS) is that broader<br />

community engagement,<br />

including with religious institutions<br />

and informal social<br />

groups, is essential to<br />

driving financial inclusion<br />

in Nigeria.<br />

The study also identified<br />

the need for unconventional<br />

approaches to on-boarding<br />

financially excluded persons<br />

such as the use of livestock<br />

ownership as collateral for<br />

financing, amongst others.<br />

Six customer segments of<br />

financially excluded persons<br />

were identified in a new report<br />

by the Sustainable and<br />

Inclusive Digital Financial<br />

Services initiative (SIDFS) of<br />

the LBS, which was launched<br />

alongside an art exhibition<br />

and in partnership with<br />

Dalberg and the Bill and<br />

Melinda Gates Foundation.<br />

These are Vulnerable<br />

Believers, which form 12<br />

percent of the population;<br />

Resilient Savers, which form<br />

21 percent of the population;<br />

Dependent Individualists, <strong>22</strong><br />

percent of the population;<br />

Digital Youth, 19 percent of<br />

the population; Confident<br />

Optimists, 14 percent of the<br />

group’s 24 million active<br />

mobile money subscribers,<br />

MTN Uganda with 5.3 million<br />

or <strong>22</strong> percent occupied<br />

the second slot while Ivory<br />

Coast also outperformed<br />

Nigeria, having 2.5million<br />

subscribers, thereby leaving<br />

Nigeria to compete space<br />

with Cameroon.<br />

MTN Nigeria was only<br />

able to outperform Cameroon<br />

with 2.2 million active<br />

mobile subscribers, as the<br />

latter reported 1.2 million<br />

from December 2017 to June<br />

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

The Central Bank of Nigeria<br />

(CBN) gazette showed<br />

two models of mobile money<br />

services, including bank-led<br />

model and non-bank-led<br />

model. Nigeria has about<br />

21 mobile money operators,<br />

which comprised 15 nonbank<br />

operators and six bank<br />

operators.<br />

Analysts said this reflects<br />

low adoption of mobile<br />

money, which still hovers<br />

around one percent in Nigeria<br />

where the operation has<br />

been on since 2011.<br />

Johnson Chukwu, managing<br />

director/CEO, Cowry<br />

Asset Management limited,<br />

attributed the low adoption<br />

of mobile money in<br />

the country to a couple of<br />

factors, which include some<br />

infrastructural challenges<br />

and quality of data services.<br />

Chukwu said the supporting<br />

infrastructure that<br />

allows for massive embrace<br />

of mobile money is not there,<br />

adding that agent banks are<br />

not yet involved compared<br />

to other African countries.<br />

He noted that Nigeria still<br />

have has the highest level of<br />

illiteracy in terms of proportion<br />

and the country’s cash<br />

dependence if above the<br />

other countries.<br />

Mobile money market in<br />

the sub-Saharan region has<br />

evolved from primarily being<br />

used to top-up airtime<br />

and make person-to-person<br />

(P2P) transfers to becoming<br />

a platform that enables additional<br />

financial services,<br />

including bill payments,<br />

merchant payments and<br />

international remittances.<br />

Reacting to the development,<br />

Dolapo Ashiru, a Lagos-based<br />

financial analyst<br />

said, “for mobile money in<br />

Africa, people normally use<br />

the story of Mpesa in Kenya,<br />

but the peculiar thing about<br />

Mpesa is that it was telco-led<br />

with the use of Safaricom<br />

which drove mobile money.<br />

In Nigeria, the model is<br />

bank-led unlike Kenya that<br />

has a telco-led model which<br />

is why it has not really caught<br />

traction.”<br />

While MTN is increasingly<br />

getting involved in<br />

the Mobile Money market<br />

with MTN Mobile Money<br />

(MoMo), which is currently<br />

active in 14 different countries.<br />

The growth reported<br />

for MTN Nigeria was not<br />

enough to measure up to its<br />

African peers.<br />

Wale Okunrinboye, Head<br />

of Research at Sigma Pension<br />

while responding to the<br />

report said the regulatory<br />

environment in Nigeria is<br />

different from other Africa<br />

countries as such affected<br />

MTN Nigeria’s mobile money<br />

performance.<br />

“The regulators are being<br />

cautious about mobile<br />

money. I also think mobile<br />

money has struggled in Nigeria<br />

because the Central<br />

Bank has not encouraged the<br />

initiative. Also again there<br />

are competing products on<br />

ground already, as banks<br />

have mobile applications for<br />

conventional banking and<br />

population and lastly, Skeptical<br />

Cultivators which form<br />

12 percent of the population.<br />

Olayinka David-West, Academic<br />

Director and Senior<br />

Fellow at the Lagos Business<br />

School who also leads the<br />

Sustainable and Inclusive<br />

Digital Financial Services<br />

initiative, said, “one of the<br />

many challenges of Financial<br />

Service Providers (FSPs)<br />

is limited knowledge of customers,<br />

and as a result they<br />

often overlook high potential<br />

customers or misidentify<br />

their needs, and invest in<br />

products and channels that<br />

sometimes miss the mark.”<br />

“The customer segments<br />

presented in this study provide<br />

insights into the behavioural<br />

and attitudinal traits<br />

of the Bottom of the Pyramid<br />

(BoP) population, currently<br />

estimated at 75 percent of<br />

Nigeria’s population (about<br />

135 million persons), with a<br />

view to providing FSPs with<br />

correct information to create<br />

fit-for-use, segment-aligned<br />

digital financial products,”<br />

David-West added.<br />

Nneka Eze, Partner and<br />

Nigeria Director, Dalberg,<br />

said: “As part of our work<br />

to define a novel, globally<br />

applicable approach to segmentation,<br />

we conducted<br />

deep research in six countries<br />

across Africa and Asia.”<br />

“As with all the countries,<br />

USSD codes,” Okunrinboye<br />

told <strong>BusinessDay</strong> in a phone<br />

response.<br />

Despite having a less<br />

subscriber base than Africa’s<br />

most populous nation,<br />

Ghana, Uganda and Ivory<br />

Coast with 16,5 million, 10,5<br />

million and 11.3 million<br />

subscribers respectively,<br />

recorded more active mobile<br />

money users than Africa’s<br />

largest economy.<br />

“Most of these other<br />

countries have a telco-led<br />

mobile money operations<br />

but Nigeria has a bank-led<br />

model. So here, banks are<br />

involved in mobile money<br />

unlike the other countries<br />

where the MMOs are the<br />

ones taking the lead. I will<br />

also say that Nigeria banks<br />

have a strong banking structure<br />

unlike other African<br />

countries where inter-bank<br />

transfers are not seamless<br />

which is one of the reasons<br />

Mpesa made wave in Kenya,”<br />

Okunrinboye added.<br />

As compiled also from<br />

the MTN report, its mobile<br />

money platform now records<br />

about $6 billion transactions<br />

every month.<br />

Meanwhile, for the half<br />

year ended June <strong>2018</strong>, MTN<br />

Nigeria reported total revenues<br />

of 21 billion rand or<br />

(N567 billion), up 17 percent.<br />

The company also reported<br />

Earnings Before Interest,<br />

Taxation, Depreciation and<br />

Amortization (EBITDA) of<br />

9.09 billion of N246 billion<br />

with an EBITDA margin of 43<br />

percent up from 38.3 percent<br />

in June 2017.<br />

MTN Nigeria yesterday<br />

reiterated that it expects to<br />

list on the Nigerian Stock<br />

Exchange before the end of<br />

<strong>2018</strong>, subject to regulatory<br />

approvals and appropriate<br />

the Nigeria report introduces<br />

a novel approach to segmentation<br />

that integrates<br />

contextual, behavioral, and<br />

psychometric variables that<br />

is useful in identifying patterns,<br />

highlighting nuances<br />

and differences between<br />

people that may not be clear<br />

from their contexts alone.<br />

Overlaying a segmentation<br />

using behavioral and psychometric<br />

approaches with<br />

FSPs’ existing segmentation<br />

strategies, we identified opportunities<br />

to drive market<br />

share— reaching people that<br />

a broad demographic approach<br />

to the market may not<br />

reach or energize,” Eze said.<br />

In addition, the report<br />

market conditions. The MTN<br />

Group expects that any reduction<br />

in its ownership of<br />

MTN Nigeria will be limited.<br />

Meanwhile, mobile money<br />

is a mobile banking service<br />

that allows users to store<br />

and transfer money from<br />

their mobile wallet through<br />

the use of USSD in their<br />

mobile phones. It is an alternative<br />

way for the unbanked<br />

population of a country to<br />

have access to financial services.<br />

The term is also used<br />

for the broader realm of electronic<br />

commerce; it can refer<br />

to the use of a mobile device<br />

to purchase items, whether<br />

physical or electronic.<br />

On the way further in<br />

driving mobile money in<br />

Nigeria Dolapo said it is already<br />

too late for only telcos<br />

to drive it, considering CBN<br />

and banks have already taken<br />

the initiative in Nigeria.<br />

“The telcos have the platform<br />

and they know their<br />

subscribers which makes<br />

it easy for them to push<br />

the apps in their face. Ultimately,<br />

mobile money in<br />

Nigeria will also become<br />

popular it will just have to<br />

take a bit longer. To a large<br />

extent also, Nigerian banks<br />

are way more sophisticated<br />

than Kenyan banks which<br />

made it easy for them to<br />

breakthrough.” Dolapo concluded.<br />

As disclosed also in the<br />

MTN half year report, MTN<br />

Nigeria expects to list on the<br />

Nigerian Stock Exchange before<br />

the end of <strong>2018</strong>, subject<br />

to regulatory approvals and<br />

appropriate market conditions.<br />

“The MTN Group expects<br />

that any reduction in its<br />

ownership of MTN Nigeria<br />

will be limited,” the company<br />

said in its report.<br />

proffers principles on engaging<br />

with last mile customers<br />

based on motivation and<br />

adoption triggers uncovered.<br />

For instance, in dealing<br />

with Vulnerable Believers;<br />

people who are mostly<br />

lower middle-class to poor,<br />

religious, predominantly<br />

rural, with limited education,<br />

use financial services<br />

infrequently and struggle to<br />

pay bills; the report says the<br />

task is figuring out how FSPs,<br />

government or development<br />

organisations can leverage<br />

religious institutions as a<br />

channel for financial information<br />

and support and also<br />

Continues on page 21


Wednesday <strong>22</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

C002D5556<br />

BUSINESS DAY<br />

21<br />

Financial Inclusion<br />

& INNOVATION<br />

Supported by:<br />

<strong>BusinessDay</strong> Radio programme; Financial Inclusion Today<br />

Aired yesterday by 11:30am on Rhythm 93.7 FM<br />

Theme: How Fintech is driving<br />

financial inclusion in<br />

Nigeria<br />

With special guest; Tayo<br />

Oviosu, CEO of PAGA and<br />

<strong>BusinessDay</strong> analysts; Patrick<br />

Atuanya, Bala <strong>Aug</strong>ie,<br />

Lolade Akinmurele and Endurance<br />

Okafor. Anchored<br />

by Lehle Balde<br />

Speaking on the<br />

financial inclusion<br />

problems PAGA is<br />

solving in Nigeria,<br />

the Chief Executive,<br />

Tayo Oviosu said<br />

PAGA exists to solve two<br />

problems, one is how do we<br />

give people access to their<br />

money? The second is how<br />

do we enable people to use<br />

the money in a simple and<br />

convenient manner?<br />

“As you know, Nigeria is a<br />

cash driven society because<br />

POS devices do not work,<br />

network issues on the use<br />

of ATMs so many problems<br />

but it is even worse for those<br />

who are not banked. A lot<br />

of people end up earning<br />

money and put it in very<br />

unsafe places whether it is<br />

under the bed or with an<br />

ajo or esusu collector. So we<br />

exist to solve these two problems;<br />

how do you get access<br />

to your money and how do<br />

we make it seamless to use<br />

your money,” Oviosu said.<br />

When asked if one requires<br />

a bank account to<br />

use PAGA, the guest on the<br />

<strong>BusinessDay</strong> radio programme<br />

said no, “you do<br />

not need a bank account, we<br />

are a mobile money operator<br />

licensed by the Central<br />

Bank of Nigeria, so if you<br />

open your PAGA wallet by<br />

dialling *242# or by going<br />

to one of the PAGA agents<br />

across Nigeria, you can fund<br />

your wallet at a PAGA agent<br />

and save your money in the<br />

wallet and then you can use<br />

your money by using *242#<br />

or by using PAGA directly or<br />

going to an agent to do the<br />

transaction for you.”<br />

“If you do not have a<br />

bank, you can use PAGA,<br />

If you have a bank you can<br />

also use PAGA because you<br />

can link your bank accounts<br />

through PAGA, can save<br />

their cards on PAGA and<br />

transact even if they do not<br />

have cash on PAGA you can<br />

just say pick it up from my<br />

bank and the transaction<br />

goes through. What we have<br />

built is a wallet that gives<br />

convenience and simplicity<br />

both to the banked and<br />

unbanked population. It<br />

is about how we deliver<br />

simple access to use your<br />

money,” Oviosu added.<br />

On the transaction limits<br />

the Fintech CEO said<br />

CBN has created Know Your<br />

Customer (KYC) limits and<br />

they are in different tiers.<br />

For the first tier; the requirement<br />

to open an account is<br />

name and phone number<br />

and one can only have up<br />

to N300,000 in the account<br />

and transact N50,000 a day,<br />

so that works for most Nigerians.<br />

While for the other tier,<br />

one need everything to<br />

open bank account like the<br />

BVN, a proper identification<br />

etc. with this kind one can<br />

transact N5 million a day<br />

and can have an unlimited<br />

balance, Oviosu explained.<br />

Speaking on the achievements<br />

PAGA has made since<br />

inception, the Chief Executive<br />

of PAGA said the company<br />

started operations to<br />

the market in <strong>Aug</strong>ust, 2012<br />

and today they have almost<br />

9 million users on the platform<br />

and it has have over<br />

16,000 agents in every state<br />

across Nigeria.<br />

“Actually we are really<br />

proud that this year we are<br />

helping with some of the<br />

internally displaced people<br />

and the conditional cash<br />

transfers the government<br />

is giving to IDP which is<br />

another story of the interesting<br />

experiences we have<br />

had there.<br />

The lives we are touching<br />

in the local communities all<br />

over Nigeria, just making it<br />

simple for them to do the<br />

things that they want to<br />

do at the PAGA agents but<br />

the big push we are going<br />

to have very soon is about<br />

driving person-to-person<br />

payments and transfers,”<br />

Oviosu said.<br />

Speaking on Internally<br />

Displaced Persons, Oviosu<br />

said the company has<br />

engaged with the Federal<br />

government on a number of<br />

cash transfer programs and<br />

one of them is to internally<br />

displaced people coming<br />

out of the Boko Haram issues<br />

in Borno State, and one<br />

of the disbursement had to<br />

do in Borno state itself.<br />

“For someone to disburse<br />

cash he actually had<br />

to go there with the cash in<br />

this particular local government<br />

and had to go with<br />

security forces. So when the<br />

security forces stopped to<br />

camp, he stopped to camp<br />

as well so he actually took<br />

him two weeks to get to<br />

the location and eventually<br />

disburse the cash.”<br />

“One of the interesting<br />

things we are seeing with<br />

that program is that most<br />

of these people do not have<br />

phone numbers so most of<br />

them see mobile money as<br />

a platform where everybody<br />

needs a phone number, so<br />

we actually developed a<br />

solution and we are trying<br />

to get approval from the<br />

Central Bank to be able to<br />

address people who do not<br />

have phone numbers because<br />

there is still a significant<br />

number of people who<br />

do not have phone numbers<br />

or even if they have a phone<br />

there is no phone signal.<br />

So in line with solving the<br />

problem we have come up<br />

with a solution that I cannot<br />

disclose at the moment but<br />

we are hoping that CBN approves,”<br />

the guest explained.<br />

On how telcos can drive<br />

the growth of mobile money<br />

in Nigeria to help boost financial<br />

inclusion, the guest<br />

shared his position on the issue;<br />

“I think there are various<br />

roles for players to play to<br />

achieve the goals of financial<br />

inclusion, I think fundamentally<br />

there are two main risks<br />

that any government needs<br />

to be careful about, one<br />

is not to create a situation<br />

where there is any company<br />

that is too big to fail.”<br />

“I think the role that telecoms<br />

have to play here is the<br />

role of infrastructure and<br />

allowing people to run on<br />

their rails to offer their services.<br />

The other risk is that<br />

when a player is competing<br />

under the same channel<br />

that everybody else is trying<br />

to compete on as well that<br />

creates a very odd situation.<br />

In the last two years, All the<br />

banks have launched their<br />

USSD services, PAGA also<br />

launched it last year *242#,<br />

now imagine if a telecoms<br />

company was running its<br />

service on the same USSD<br />

channel it will raise questions<br />

about anti competitiveness<br />

and how do you<br />

solve that? I think the role<br />

the telecoms have to play<br />

is really around that access<br />

on the channel. There is<br />

another role that they could<br />

play which is around helping<br />

to build agent networks.”<br />

Oviosu further explained<br />

that he does not necessarily<br />

think it is a core competency<br />

of a telecoms operator when<br />

it comes to financial agents<br />

because these agents are<br />

very different than the airtime<br />

agents.<br />

“The guy you buy airtime<br />

from down the street does<br />

not have N50,000 for you to<br />

carry out a transaction so I<br />

do think we need to build<br />

more agent networks in<br />

Nigeria but I do not think<br />

that the telcos are in the best<br />

position to do so.”<br />

“So to achieve financial<br />

inclusion in Nigeria, I think<br />

there are three things that<br />

we need to do and I think the<br />

Central Bank is already making<br />

good progress in some<br />

of these things but we need<br />

some patience, Nigerians are<br />

very ‘let us get things done<br />

yesterday kind of people and<br />

I think we just need patience<br />

and we just need to be steady<br />

with your policy.<br />

The first thing we need to<br />

do and all these ideas I got<br />

from a recent trip to India<br />

to understand how they<br />

achieved 100 percent financial<br />

inclusion of households<br />

and 80 percent of individuals<br />

and what came out of<br />

there were these 3 ideas.<br />

One let us identify all individuals<br />

and residents in Nigeria<br />

and actually get their<br />

fingerprints then you can<br />

allow not just the financial<br />

institutions but other institutions<br />

access that database<br />

for verification. In India this<br />

strategy cut down the cost<br />

of KYC from $10 to $0.50,<br />

so just imagine if we could<br />

identify all Nigerians and<br />

the kind of innovations that<br />

will come out of that. The<br />

second thing we need to<br />

do is create a unified base<br />

account that everyone can<br />

open either with a bank or<br />

a mobile money operator.<br />

If you have a PAGA account,<br />

from that account you can<br />

send to any other bank instant<br />

real time and I can also<br />

receive money from any<br />

other bank, so it should be<br />

treated like any other bank<br />

account. That is how CBN<br />

looks at it but that is how the<br />

public should start looking<br />

at it, mobile money is just<br />

like me having a bank account<br />

it is the same against<br />

its benefits,” Oviosu noted.<br />

On the response of banks<br />

to PAGA platform he said<br />

recently the banks came<br />

together with the mobile<br />

money operators and super<br />

agents where they agreed<br />

to work together. The banks<br />

agreed to provide capital to<br />

rapidly expand and build<br />

agent networks, in return,<br />

the MMOs are to allow their<br />

agents do cash in cash out<br />

for all financial institutions<br />

and account opening and<br />

they agreed because of the<br />

mutual benefits.<br />

“We do not think our<br />

businesses are trying to<br />

kill or replace the banks,<br />

but rather partner with the<br />

bank to solve the problem<br />

of access and use. We do<br />

not care if the money seats<br />

in PAGA or in your bank account,<br />

what matters is about<br />

access and use.”<br />

“The banks have worked<br />

well with us and we are<br />

creating what we call the<br />

Shared Agent Network Expansion<br />

Facility (SANEF)<br />

with 12 companies participating.<br />

What the commercial<br />

banks alongside the<br />

CBN has done has been to<br />

provide us with the capital<br />

to expand our agent network<br />

particularly in Northern<br />

Nigeria. We are starting<br />

from the north we there are<br />

less agents and we are working<br />

downwards. With this<br />

new initiative, PAGA as a<br />

company has now changed<br />

its target of agents by 2020<br />

to 80,000 agents. We are<br />

currently at 16,000 and we<br />

expect a rapid expansion<br />

over the next couple of years<br />

to achieve those numbers,”<br />

the guest CEO explained on<br />

the show.<br />

LBS customer segmentation study rips ...<br />

Continued from page 20<br />

how to develop agricultural<br />

programs that allow this<br />

group to take control of their<br />

financial lives.<br />

Moreso, for Skeptical Cultivators,<br />

who draw on more<br />

people than average for support<br />

during emergencies, yet<br />

face difficulty raising emergency<br />

funds and distrust<br />

people in their communities,<br />

the task is how to encourage<br />

Mobile Network Operators<br />

(MNOs) to incentivise and<br />

facilitate greater phone ownership<br />

and usage by the segment,<br />

to improve access to<br />

services, provide daily liquidity,<br />

support financial planning<br />

and disciplined savings,<br />

build financial confidence<br />

and autonomy, and foster<br />

financial connections and<br />

access to emergency support.<br />

Similarly, for Dependent<br />

Individualists, who have the<br />

weakest financial health of<br />

all Nigerians, face high income<br />

volatility and are less<br />

likely than others to save,<br />

plan for managing expenses,<br />

or cover household expenses,<br />

have average cash-based<br />

financial behavior, but often<br />

own land and livestock, the<br />

task is to explore how their<br />

high livestock ownership<br />

can be used as collateral for<br />

agricultural financing and<br />

how to develop or extend<br />

agent networks sustainably<br />

that provides better access<br />

to formal financial services<br />

for the segment.<br />

The research study is the<br />

most representative of Nigerians<br />

with a sample size<br />

of 1,200 across the country.<br />

The study integrated<br />

three variable types into its<br />

segmentation approach to<br />

expand information about<br />

BoP consumers, strengthening<br />

typical approaches to<br />

segmentation.<br />

The Sustainable and Digital<br />

Financial Services Initiative<br />

of the Lagos Business<br />

School says it will continue<br />

to carry out research to aid in<br />

driving financial inclusion as<br />

a key indicator for meeting<br />

the Sustainable Development<br />

Goals (SDGs).


C002D5556<br />

<strong>22</strong> BUSINESS DAY Wednesday <strong>22</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

In association with<br />

ag@businessdayonline.com<br />

Cotton: Can Nigeria regain<br />

production status through biotech?<br />

Stories by JOSEPHINE OKOJIE<br />

Nigeria has recently<br />

released two varieties<br />

of biotech cotton<br />

(Bt cotton), MRC<br />

7377BG11 and<br />

MRC7361BG11 in commercial<br />

quantity with the aim of boosting<br />

production of the crop through the<br />

technology.<br />

The Bt varieties are expected to<br />

bring succour to cotton farmers by<br />

increasing their yield per hectare<br />

from an average of 450kg per hectare<br />

to 4.2 per hectare and address<br />

issues of diseases and quality of the<br />

Nigerian cotton.<br />

According to Alex Akpa, director<br />

general, Biotechnology Development<br />

Agency (NABDA) during the<br />

release, the new Bt seed is resistant<br />

to bollworm complex and highly<br />

tolerant to suckling insect pest with<br />

fibre length of 30 to 30.5milmeters<br />

and fibre strength of 26.5 and 27<br />

grams/tenacity and micronaire<br />

strength 3.9 to 4.1 as well as boosting<br />

cotton production in the country.<br />

Akpa noted that the adoption<br />

of the Bt cotton in the country has<br />

a wider implication for the socioeconomic<br />

development of Nigeria<br />

as moribund textile industries have<br />

the hope of having a new lease of<br />

life as farmers increase production<br />

of the crop.<br />

Currently, Nigeria’s cotton<br />

industry is fast sliding towards<br />

extinction on account of the use of<br />

low quality seeds and a shrinking<br />

local market, despite the incentives<br />

of an alluring $3 trillion global<br />

industry.<br />

Experts have attributed the<br />

country’s low cotton quality and<br />

quantity as one of the factors<br />

responsible for the collapse of some<br />

textile businesses in the country.<br />

Data from the Ministry of<br />

Industry, Trade and Investment<br />

shows that between 1980 and 2016,<br />

about 145 companies operating in<br />

the textile sector had shut down, due<br />

to policy somersaults, poor research<br />

and development (R&D), lack of<br />

sufficient raw material, smuggling<br />

and poor power supply, among<br />

others.<br />

With adoption of high yielding<br />

cotton varieties farmers who have<br />

consequently shifted to growing<br />

other crops since cotton production<br />

became less attractive might return<br />

to farming the crop, experts stated.<br />

“With climate change affecting<br />

agriculture, I think there is need for<br />

intervention and that intervention<br />

should come from technology such<br />

as Bt cotton. The yield potential of<br />

Bt cotton are far more higher than<br />

what we are currently getting,” Anibe<br />

Achimugu, president, National<br />

Cotton Association of Nigeria<br />

(NACOTAN) told <strong>BusinessDay</strong> in a<br />

telephone interview<br />

“This will be a major improvement<br />

in yield and income for the farmers.<br />

All we need is to educate farmers<br />

adequately about Bt cotton through<br />

extension agents,” Achimugu said.<br />

He called for farmers sensitisation<br />

and continuous education on the<br />

technology in Nigeria.<br />

Nigeria’s cotton production is<br />

put at 51,000 metric tonnes on<br />

253,000 hectare, while global<br />

cotton consumption is put at 24<br />

million metric tonnes, according<br />

to International Cotton Advisory<br />

Committee (ICAC) 2016 data.<br />

What BT Cotton means?<br />

Traditional cotton hybrid seeds<br />

are a result of cross-pollination of<br />

two different but related plants but<br />

Bt cotton is created by genetically<br />

altering the cotton genome to<br />

express a microbial protein from<br />

the bacterium Bacillus thuringiensis.<br />

Today, top producers and<br />

suppliers of cotton to the global<br />

market have adopted Bt cotton<br />

varieties to boost their productivity.<br />

It was first approved for<br />

commercial use in the United States<br />

of America (USA) in 1995 and in 1997,<br />

China, top global cotton producer<br />

adopted BT cotton.<br />

In 2002, India, second largest<br />

producers of the crop adopted BT<br />

cotton varieties and in 2011, surpass<br />

China’s production.<br />

In Nigeria, the two newly released<br />

varieties are home grown and were<br />

developed by Mahyco Nigeria Pvt<br />

Limited in collaboration with the<br />

Institute for Agricultural Research,<br />

Ahmadu Bello University, Zaria.<br />

Controversies surrounding BT<br />

Cotton<br />

There have been controversies<br />

surrounding Bt cotton since its<br />

introduction in India, world’s second<br />

largest producers of the crop and<br />

Burkina Faso, Africa’s top cotton<br />

grower.<br />

Over the past three years, reports<br />

Oyo State, IITA seal pact to develop blueprint, establish agribusiness park<br />

The Oyo state government<br />

and the International<br />

Institute of Tropical<br />

Agriculture (IITA) and<br />

have signed a deal to develop<br />

an agricultural blueprint for the<br />

state, and the establishment of<br />

agribusiness park.<br />

According to a statement<br />

made available to <strong>BusinessDay</strong>,<br />

the agricultural blueprint will<br />

clearly outline the opportunities,<br />

weaknesses, threats and agenda<br />

for the state in the short, medium<br />

and long term to transform its<br />

agriculture.<br />

Also, the statements states<br />

that the agribusiness park would<br />

be developed in phases which<br />

include the development of an<br />

integrated cassava value chain<br />

in Gambari area of Oyo state on<br />

about 6,000 hectares.<br />

Similarly, the integrated<br />

agribusiness park include the<br />

construction and installation of<br />

machineries and the processing<br />

of start, ethanol amongst other<br />

by products of cassava as well<br />

as the marketing of the finished<br />

products to industries.<br />

According to Abiola Ajimobi,<br />

Oyo state Governor, the project<br />

will be funded by the state.<br />

“Our aim is to boost food<br />

production, create jobs and wealth<br />

for our people,” Governor Abiola<br />

Ajimobi, who was represented<br />

by Prince Oyewole Oyewumi<br />

Commissioner of Agriculture,<br />

at the funds release program<br />

recently.<br />

Initial investment for the<br />

first phase of the project will<br />

cost N55million, with additional<br />

investments expected to come in<br />

as implementation commences,<br />

the statement stated.<br />

Besides the development of<br />

an agric blueprint, the first phase<br />

will focus on the cultivation of<br />

between 50 – 150 hectares of<br />

cassava.<br />

DKenton Dashiell, deputy<br />

director-partnerships for delivery,<br />

IITA commended the state for<br />

engaging the institute and<br />

committing resources to finance<br />

the project.<br />

“We are glad to see Oyo State<br />

moving forward with an action<br />

plan to transform agriculture and<br />

are honored to be part of their<br />

team,” Dashiell said.<br />

Located in the south west<br />

Nigeria, Oyo state is characterized<br />

by Derived savannah in the north<br />

and Humid Forest in the south.<br />

These two agro-ecologies support<br />

a diversity of staple crops such<br />

as cassava, maize, soybean, yam,<br />

banana and plantains, and cash<br />

crops such as cashew and citrus<br />

among others.<br />

“The collaboration goes to<br />

show how Oyo state has become<br />

serious with agriculture,” Nteranya<br />

Sanginga, director general, IITA<br />

said in the statement.<br />

Under the policy component<br />

of the deal, IITA will work with<br />

the National Institute of Social<br />

and Economic Research (NISER),<br />

Oyo State Ministry of Agriculture,<br />

have emerged from the Indian dailies<br />

of the pink bollworm pest invasion<br />

becoming immune to Bollgard II – a<br />

genetically modified cotton strain<br />

introduced by Monsanto, a US agro<br />

chemical company.<br />

This compelled farmers to<br />

use more chemicals on the crops<br />

than required and forcing some to<br />

abandon the variety.<br />

Similarly, Monsanto introduced<br />

Bollgard II to farmers in Burkina Faso<br />

and the farmers agreed to a trail and<br />

the country introduced seeds with a<br />

genetically modified gene in 2008.<br />

The resulting cotton was pestfree,<br />

and the harvest more abundant.<br />

But there was a problem. While<br />

the bug-resistant genes produced<br />

more volume, the high quality, for<br />

which the country was known and<br />

patronized globally, fell.<br />

This forced a lot of smallholder<br />

cotton farmers to abandon the<br />

varieties and eventually, the<br />

government had to ban them.<br />

But experts have attributed<br />

the failure of Bt cotton varieties in<br />

these countries to farmers inability<br />

to adhere to protocols that were<br />

required in growing cotton.<br />

They emphasise the need for<br />

farmers education on the technology<br />

and the adoption of good agricultural<br />

practices in the production of the crop.<br />

“I researched the Indian and<br />

Burkina Faso cases and realise that<br />

is was failure of implementation<br />

of necessary protocols required.<br />

Farmers believe falsely that it is<br />

magic seed that you just plant and<br />

allow it to grow but that is not the<br />

case” ,” Achimugu who was earlier<br />

quoted said.<br />

“Bt cotton requires planting and<br />

following the necessary agronomy<br />

practices required for conventional<br />

seeds. It only require less chemical<br />

application because there are strains<br />

in the seeds that is suppose to fight<br />

against pest and diseases,” he added.<br />

and the Oyo State Agricultural<br />

Development Program.<br />

It is envisaged that the policy<br />

will drive the agricultural sector<br />

by attracting private capital to<br />

the state, and in fact making the<br />

state the most preferred agroallied<br />

investment destination in<br />

Nigeria.<br />

Alfred Dixon, director for<br />

development & delivery, IITA,<br />

described the event as a significant<br />

moment aimed at bringing<br />

genuine transformation to Oyo<br />

state in general, and resourcepoor<br />

farmers in particular.<br />

In the last eight years, the Oyo<br />

State government has embarked<br />

on reforms to transform its<br />

economy through diversification<br />

with emphasis on agriculture.


Wednesday <strong>22</strong> <strong>Aug</strong>ust <strong>2018</strong> C002D5556<br />

BUSINESS DAY 23<br />

ag@businessdayonline.com<br />

Low quality seeds, diseases limit Nigeria’s<br />

share of $30bn global nuts industry<br />

JOSEPHINE OKOJIE<br />

Despite the potential<br />

to share from the $30<br />

billion global nuts<br />

industry, Nigeria’s<br />

groundnut production<br />

is fast declining owing to low seeds<br />

and disease, both of which have<br />

combined to reduce farmers’<br />

productivity in recent years.<br />

“The biggest challenge<br />

confronting groundnut farmers<br />

is low yielding seed varieties. If<br />

farmers have access to improved<br />

technologies including seeds of<br />

improved varieties they will<br />

produce more and profitably, “said<br />

Hakeem Ayinde Ajeigbe, country<br />

representative, International Crops<br />

Research Institute for the Semi-<br />

Arid Tropics (ICRISAT) in an email<br />

response to questions.<br />

“We need to continue to invest<br />

in researches, extension, and<br />

seed systems as these activities<br />

will help increase production and<br />

productivity,” Ajeigbe said.<br />

Groundnut which use to be one<br />

JOSEPHINE OKOJIE<br />

Audu Ogbeh, Minister<br />

of Agriculture and<br />

Rural Development<br />

has commended the<br />

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

its agreement with the Bankers’<br />

Committee to offer single-digit<br />

interest rate loans to operators in<br />

the agricultural and manufacturing<br />

sectors of the economy from<br />

commercial banks’ Cash Reserve<br />

Requirement (CRR) that is reserved<br />

in the apex bank.<br />

Ogbeh stated that the agreement<br />

would be remarkable progress<br />

in government’s efforts towards<br />

boosting agricultural productivity<br />

and ensuring food security for<br />

Nigerians as well as other spin-offs<br />

to the economy.<br />

The minister also congratulates<br />

the Vice President Yemi Osinbajo<br />

on the new policy reducing lending<br />

rates to Micro, Small and Medium<br />

scale Enterprises (MSMEs),<br />

noting that the CBN’s move is in<br />

compliance with the presidential<br />

directive to lower lending rates<br />

to the productive sectors of the<br />

Nigerian economy on which the<br />

minister has repeatedly assured<br />

Nigerians.<br />

“That the central bank<br />

considered working with the<br />

Bankers’ Committee to finance<br />

agriculture from the commercial<br />

banks’ huge reserves, running<br />

into billions of naira, is a cause for<br />

optimism in the agricultural sector,”<br />

Ogbeh said in a statement made<br />

available to <strong>BusinessDay</strong>.<br />

“This is more so as the singledigit<br />

interest rate of nine per cent<br />

of Nigeria’s major cash crops in the<br />

80’s was not among the top five<br />

agricultural commodities exported<br />

in first quarter <strong>2018</strong>, data from the<br />

National Bureau of Statistics (NBS)<br />

Ogbeh commends CBN’s single-digit<br />

interest on agric lending<br />

on long-term credit of a minimum<br />

tenor of seven years will support<br />

stable agricultural investment<br />

and predictable increase in food<br />

production,” he added.<br />

The multiplier effect<br />

of this initiative at a time of a<br />

restructured and recapitalised<br />

Bank of Agriculture (BOA) will be<br />

a reduction in uncertainties and<br />

avoidable risks in agricultural<br />

investments where farmers will<br />

enjoy wider latitude of access to<br />

loans from either commercial<br />

banks or BOA with less hassles, the<br />

statement states.<br />

He described the cooperation<br />

of the banks with the CBN on<br />

the use of their CRR to support<br />

the agricultural sector through<br />

the single-digit lending as<br />

commendable.<br />

The minister regarded this<br />

as very encouraging even as the<br />

economy recovers.<br />

“This will help to revive many<br />

ailing and moribund projects and<br />

invigorate the weak ones that<br />

desperately need injection of funds<br />

to survive.<br />

Ogbeh stressed that one of<br />

the major challenges facing the<br />

country’s agricultural development<br />

and economic growth is high<br />

interest rate, stressing that singledigit<br />

interest lending rate for<br />

farmers and manufacturers in<br />

the country is the priority of this<br />

administration.<br />

Regretting that the high interest<br />

rate charged by commercial banks<br />

on loans to farmers was detrimental<br />

to the growth and development<br />

of agriculture, Ogbeh has even<br />

canvassed for as low as five per<br />

cent.<br />

Shows.<br />

Ever since the neglect, groundnut<br />

production fell from the country’s<br />

export list and as such small holder<br />

farmers, too, began to suffer economic<br />

hardship while the diseases infecting<br />

the crop aggravated over the years,<br />

occasioned by severe drought,<br />

experts say.<br />

Samuel Sando who farms seven<br />

hectares of groundnut in Benue state,<br />

said that his production of groundnut<br />

has been on the decline owing to<br />

poor seed varieties and diseases<br />

affecting production.<br />

“There are no good groundnut<br />

seeds in the market. Most of the ones<br />

we purchase are of low quality which<br />

gives us lower yield per hectare.<br />

Groundnut disease is also another<br />

big issue as we have been recording<br />

it yearly,” Sando said.<br />

Nigeria is the largest groundnut<br />

producer in Africa accounting<br />

for 30 percent of the total Africa’s<br />

production.<br />

Despite it neglect, the industrial<br />

crop continues to remain an<br />

important food component in the<br />

country as it serves as raw material<br />

for vegetable oil and source of protein<br />

for both humans and animals,<br />

experts say.<br />

A 100kg bag of groundnut now<br />

sells for N37,000 as against N42,800<br />

sold a year ago, showing a13 percent<br />

decrease in price. While a paint<br />

bucket of groundnut now sells for<br />

N1, 650 as against N1,900 a year ago.


Wednesday <strong>22</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

24 BUSINESS DAY<br />

C002D5556<br />

Leadership<br />

Shaping people into a team<br />

Worker representation on boards<br />

won’t work without trust<br />

Raffaella Sadun<br />

U.S. Sen. Elizabeth Warren<br />

has proposed a novel<br />

way to reform corporate<br />

governance in America. It would<br />

require companies with more<br />

than $1 billion in revenue to get a<br />

corporate charter from the federal<br />

government (rather than from an<br />

individual state), which in turn<br />

would require a commitment to<br />

a broad range of stakeholders,<br />

including not just shareholders<br />

but also employees and the communities<br />

in which the businesses<br />

operate. In addition, federally<br />

chartered companies would be<br />

required to let workers elect 40%<br />

of board members. There are other<br />

aspects of the proposal, including<br />

an aim to limit stock buybacks and<br />

stock-based compensation.<br />

Warren’s vision is to ensure that<br />

the success of U.S. companies is<br />

shared more broadly, rather than<br />

largely benefiting shareholders.<br />

But would it have that effect?<br />

The idea seems to be that having<br />

a more collaborative decisionmaking<br />

structure would cause better<br />

and more-equitable decisionmaking.<br />

Here the example of Germany<br />

is illustrative. For the past<br />

40 years, corporate governance in<br />

Germany has been based on the<br />

idea of co-determinance, in which<br />

workers have a say in company<br />

decision-making. Workers elect<br />

a substantial share of the board<br />

and form work councils, which<br />

are groups of employees, distinct<br />

from trade unions, empowered to<br />

consult with management about<br />

decisions. Germany’s co-determination<br />

model does seem to lead to<br />

a more equitable distribution of<br />

company profits, and so Germany<br />

is commonly cited as an example<br />

for why such an approach should<br />

be adopted in the United States.<br />

But it’s worth thinking hard<br />

about exactly how cause and effect<br />

works here before forcing companies<br />

to change their organizational<br />

structures. Collaborative struc-<br />

tures like the work councils in Germany<br />

may be a product of specific<br />

cultural values and norms. For<br />

instance, in places where there’s a<br />

high level of trust between workers<br />

and employers, these structures<br />

may be more likely to arise, and<br />

therefore more likely to succeed.<br />

If this is the case — and having observed<br />

companies that have strong<br />

equitable cultures, I believe that it<br />

is, generally speaking — then forcing<br />

firms to create these structures<br />

in places without those equitable<br />

norms would not necessarily have<br />

the desired results. It could even<br />

be counterproductive. In economics<br />

terms, corporate governance<br />

structure may be “endogenous,”<br />

meaning closely connected to and<br />

dependent on other factors, like<br />

culture, that policy cannot easily<br />

shape.<br />

c<br />

It’s also important to understand<br />

another reason that what<br />

works in one country may be<br />

completely ineffective in another:<br />

institutional differences.<br />

For example, many years ago<br />

Harvard’s Richard Freeman and<br />

Stanford’s Ed Lazear looked at<br />

Germany’s work councils. One of<br />

their conclusions was that work<br />

councils were effective, in part,<br />

thanks to the fact that Germany<br />

had a centralized wage-setting<br />

structure. As in many European<br />

countries, wages in Germany were<br />

primarily set through industrylevel<br />

negotiations, which meant<br />

that the worker councils were not<br />

primarily responsible for determining<br />

how much workers should<br />

be paid. As Freeman and Lazear<br />

wrote, “Councils fit better in labor<br />

relations systems where pay and<br />

other basic components of compensation<br />

are determined outside<br />

the enterprise (essentially bounding<br />

divisions of the rent) than in<br />

systems where firms set pay, and<br />

may help explain why councils are<br />

found largely in economies with<br />

relatively centralized collective<br />

bargaining.”<br />

By contrast, U.S. firms are primarily<br />

responsible for determining<br />

wages, which means that<br />

worker involvement in corporate<br />

governance is likely to be far more<br />

contentious.<br />

None of this means that the<br />

Warren proposal is necessarily<br />

a bad idea. Nonetheless, proponents<br />

of this sort of reform need to<br />

go into it with their eyes open, and<br />

take a skeptical view when considering<br />

the examples of countries<br />

with different cultures and labor<br />

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

market institutions.<br />

One response to this argument<br />

might be that the U.S. should embrace<br />

Warren’s proposal for worker<br />

representation on boards, but<br />

combine it with complementary<br />

labor market institutions along the<br />

lines of those in Europe, as well<br />

as efforts to change the culture.<br />

Perhaps. But those changes are<br />

hard, if not impossible, to make,<br />

and would be even in a world<br />

where there was the political will<br />

to attempt them.<br />

Raffaella Sadun is the Thomas S.<br />

Murphy associate professor of<br />

business administration at Harvard<br />

Business School.<br />

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Wednesday <strong>22</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

Pension Today<br />

C002D5556<br />

BUSINESS DAY<br />

In Association with<br />

25<br />

Reassessing role of stakeholders in<br />

developing the pension industry<br />

The nation’s pension industry has continued to record increased growth with<br />

different stakeholders playing their parts, with some doing excellently well, and<br />

some others underperforming. Here, Ivor Takor, executive director, Centre for Pension<br />

Rights Advocacy looks at their roles and proffered solutions.<br />

For Takor, there<br />

was no pension<br />

industry pre 2004<br />

pension reform in<br />

Nigeria. Pension<br />

schemes operated in both<br />

the public and private sector<br />

before the 2004 reforms,<br />

were burdened with a lot of<br />

problems. Principal among<br />

them was that the schemes<br />

were unregulated; Suffered<br />

from poor administrative<br />

structures; the public sector<br />

scheme was unfunded,<br />

causing it to become unsustainable,<br />

with an estimated<br />

N2 trillion deficit. In<br />

the private sector, with the<br />

exception of the National<br />

Social Insurance Trust<br />

Fund (NSITF), the schemes<br />

were as many as there were<br />

companies. They were voluntary,<br />

being products of<br />

collective agreements with<br />

no law backing them. Section<br />

1 of Pension Reform<br />

Act 2004, the forerunner of<br />

the current Pension Reform<br />

Act 2014 as well as section 3<br />

of the 2014 Act, established<br />

the Contributory Pension<br />

Scheme and made it to apply<br />

to employees of both the<br />

public and private sectors.<br />

Herein lies the beginning of<br />

the pension industry.<br />

The Act therefore laid<br />

down stakeholders in the<br />

pension industry and went<br />

ahead to set out the roles<br />

they are expected to play<br />

for the sustenance and development<br />

of the industry.<br />

The Act didn’t stop at laying<br />

down roles for stakeholders.<br />

It went further, to stipulate<br />

sanctions for non compliance.The<br />

stakeholders in<br />

the pension industry are the<br />

regulator, employers, em-<br />

ployees and the operators<br />

(Pension Fund Administrators<br />

(PFAs and PFCs).<br />

Section 17 of the Pension<br />

Reform Act 2014, which<br />

henceforth will be referred<br />

to as the Act, established the<br />

National Pension Commission<br />

(PenCom), while section<br />

18 states the objectives<br />

of PenCom to be, to enforce<br />

and administer the provisions<br />

of the Act; co-ordinate<br />

and enforce all other laws<br />

on pension and retirement<br />

benefits; and regulate, supervise<br />

and ensure the effective<br />

administration of<br />

pension matters and retirement<br />

benefits in Nigeria.<br />

Since the establishment<br />

of PenCom, the Commission<br />

has strived to achieve<br />

the objectives of the Act,<br />

effectively performed the<br />

functions given it in section<br />

23 and judiciously utilized<br />

the powers bestowed upon<br />

her in section 24.There is<br />

no other way to justify the<br />

establishment of the Commission<br />

and adequately<br />

highlighting the role she<br />

has played in the establishment<br />

and development of<br />

the pension industry than<br />

to point to a non existing industry<br />

in 2004, with a public<br />

sector pension deficit of N2<br />

trillion in 2004 to a pension<br />

industry with a pension assets<br />

of N8.23 trillion as at<br />

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

The Commission has<br />

succeeded in building and<br />

maintaining a culture of<br />

healthy compliance in the<br />

industry: This has not only<br />

helped the industry to stay<br />

out of trouble, but has built<br />

a reputation for the industry<br />

as being trust worthy,<br />

which has led to the continuous<br />

development of the<br />

industry. Being a friendly<br />

regulator, PenCom exposes<br />

draft guidelines to operators<br />

for inputs before finalizing<br />

them. There is a monthly<br />

consultative fora with licensed<br />

operators and holds<br />

regular consultations with<br />

the operators “union” the<br />

Pension Operators Association<br />

(PenOp).<br />

The next set of stakeholders<br />

in the industry is the<br />

employers. This is the group<br />

that provides the greatest<br />

challenge to the industry.<br />

Principal among the challenges<br />

being that of non<br />

compliance with the provisions<br />

of sections 4, 5 and 6<br />

of the Act, which deals with<br />

paying the contributions of<br />

the employer; deductions<br />

and timely remittances of<br />

both the pension contributions<br />

of the employer and<br />

employees pension deductions,<br />

as well as maintaining<br />

Group Life Insurance policy<br />

in favour of employees as<br />

provided for in section 4(5)<br />

of the Act. Governments,<br />

federal and states are the<br />

biggest employers of labour<br />

and also happen to be the<br />

greatest culprits in this regard.<br />

This will continue to<br />

be the greatest challenge<br />

the industry will be facing<br />

because owners of businesses<br />

in the private sector<br />

will continue to be greedy<br />

in their desire to maximize<br />

profit, while governments<br />

will continue to avoid the<br />

responsibility of adequately<br />

addressing the welfare of<br />

workers. The regulator and<br />

employees must do everything<br />

within their powers<br />

to get employers to comply<br />

with the provisions of the<br />

Act.<br />

The primary stakeholders<br />

in the pension industry<br />

are employees.Section 1<br />

paragraph ( c ) states one<br />

of the objectives of the Act<br />

“ensure that every person<br />

who worked in either the<br />

Public Service of the Federation,<br />

Federal Capital<br />

Territory, States and Local<br />

Governments or the Private<br />

Sector receives his retirement<br />

benefits as and when<br />

due. The Nigeria Labour<br />

Congress (NLC), the Trade<br />

Union Congress (TUC) and<br />

Industrial Unions, whose responsibility<br />

it is to campion<br />

the cause of improvement of<br />

the welfare of workers and<br />

pensioners, must be at the<br />

forefront of efforts to grow<br />

the industry. The labour<br />

movement should ensure<br />

that employees open Retirement<br />

Savings Accounts<br />

(RSAs) and understand salient<br />

sections of the Act that<br />

need their attention; and<br />

they should put pension<br />

issues as principal items for<br />

discussion/negotiations, in<br />

every meeting and negotiation<br />

with employers especially<br />

governments.<br />

The last but not the least<br />

stakeholders are the operator,<br />

Pension Fund Administrators<br />

(PFAs) and Pension<br />

Fund Custodians (PFC). The<br />

Act segregates the management<br />

and custody of pension<br />

fund. While PFAs are<br />

responsible for the management<br />

of the funds, the PFCs<br />

warehouse the funds and<br />

invest them in line with the<br />

directives of the PFAs, based<br />

on guidelines issued by Pen-<br />

Com. In an attempt aimed<br />

at insulating pension fund<br />

from fraud and forgeries, it<br />

is imbedded in the Act, a lot<br />

of compliance obligations<br />

for the operators, which the<br />

Act also empowers PenCom<br />

to enforce and apply sanctions<br />

for noncompliance.<br />

Operators will help in the<br />

continuous development of<br />

the industry if they comply<br />

with the provisions of the<br />

Act and all regulations and<br />

guidelines issued by Pen-<br />

Com; render good customers<br />

services and additional<br />

services.<br />

So far, the pension industry<br />

remains the most rapidly<br />

growing industry in the<br />

country and will remain so<br />

for a long time. This position<br />

will be strengthened when<br />

the micro pension targeted<br />

at getting the self employed<br />

in the informal sector to key<br />

into the Contributory Pension<br />

Scheme commences.<br />

RC634453<br />

Diamond Pension Fund Custodian Limited<br />

1A, Tiamiyu Savage Street, Victoria Island, Lagos State.<br />

Tel: 01-4613753, 2713680, 2713954<br />

Fax: 01-2713955<br />

Email: info@diamondpfc.com<br />

Website: www.diamondpfc.com<br />

This section is<br />

created to increase<br />

awarness and deepen<br />

knowledge about<br />

the contributory<br />

pension scheme.<br />

If you have enquiries<br />

or contributions,<br />

send to this e-mail:<br />

diamondpfcbusday@yahoo.com


Wednesday <strong>22</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

26 BUSINESS DAY<br />

C002D5556<br />

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

Brokerage fraternity advises against<br />

heating the polity ahead 2019 elections<br />

…raises concern over economic, business stability<br />

…commends FG on ‘Rent To Own Houses’ scheme<br />

…seeks compliance on building laws<br />

Stories by<br />

Modestus Anaesoronye<br />

To avoid instability in<br />

the economic and business<br />

environment, the<br />

brokerage fraternity of<br />

the Nigerian insurance<br />

industry, the Nigerian Council<br />

of Registered Insurance Brokers<br />

(NCRIB) has advised politicians to<br />

be conscious of their activities as<br />

the nation prepares for the 2019<br />

general elections.<br />

The Council believes that heating<br />

the polity will not only bring<br />

instability in the economy, it will<br />

impact negatively the inflow of<br />

investment into the country.<br />

Shola Tinubu, president and<br />

chairman of Council, NCRIB told<br />

journalist during a press briefing<br />

in Lagos that “though as a professional<br />

body, we must stay above<br />

party politics, but we are duty<br />

bound to positively impact on<br />

our political environment as it<br />

must not elude us that economy<br />

and politics are inextricably<br />

woven”.<br />

Tinubu said the Council would<br />

like to use this medium to enjoin<br />

Politicians to endeavor not to<br />

overheat the polity in view of the<br />

potential negative effects of such<br />

actions on the socio-economic<br />

development of the nation.<br />

“There is no better catalyst for<br />

investment in any economy than<br />

stability of the polity. Therefore,<br />

we enjoin our politicians to make<br />

the welfare and progress of the<br />

L-R:Tope Adaramola, assistant executive secretary of the Nigerian Council of Registered Insurance Brokers (NCRIB); Fatai<br />

Adegbenro, executive secretary; Shola Tinubu, president;. Ekeoma Ezeibe, honourable treasurer; and Tunde Oguntade,<br />

honourable auditor, at the NCRIB Press Conference held in Lagos on Monday<br />

nation and its people their primary<br />

agenda and the focus of their<br />

noted actions.”<br />

Tinubu, while commending<br />

the Federal Government’s Rentto-Own<br />

product designed to enhance<br />

affordability by eliminating<br />

the need for down payments and<br />

other costs associated with normal<br />

mortgage loan arrangements, he<br />

said this definitely will go a long<br />

way to address the housing deficit,<br />

a serious challenge that any government<br />

should tackle headlong.<br />

He however stated that, the<br />

Council wishes to enjoin the Federal<br />

Government, to ensure that<br />

in embarking on this laudable<br />

feat, insurance should be given its<br />

rightful place.<br />

“Section 64 & 65 of Insurance<br />

Act 2003 stipulates a Compulsory<br />

Insurance for ongoing construction<br />

projects. It therefore behoves<br />

the Federal Government to insist<br />

that appropriate insurance policies<br />

be in place for these houses at<br />

the construction stage, and for the<br />

win-win benefits the project holds<br />

for government, the allottees and<br />

their families.”<br />

The Federal Government it will<br />

be recalled recently announced<br />

that N197 billion has been spent<br />

to construct 26,002 houses across<br />

the country, while 13,953 homes<br />

across the country were also renovated.<br />

On the recent Tier based recapitalisation<br />

announced for underwriting<br />

firms in the country, the<br />

NCRIB boss noted that insurance<br />

companies would be looking at<br />

different options to respond before<br />

the deadline of January 1, 2019.<br />

“It is definite that several options<br />

would be contemplated by<br />

the companies, including the options<br />

of injection of capital, mergers<br />

and acquisitions. Whichever<br />

strategy chosen and no matter<br />

how disruptive, I would like to<br />

enjoin the companies to focus<br />

on how to grow the insurance<br />

industry as well as how to make<br />

insurance an imperative.<br />

“On the part of our Council, we<br />

have set relevant Committees in<br />

motion to see extent to which this<br />

new policy thrust would affect our<br />

members as the end consumers<br />

have begun to express concern as<br />

to the implications for them.<br />

“Anytime the insurers market<br />

goes into flux, the broking sector<br />

becomes challenged to guide<br />

clients to the best affordable security.”<br />

On a possible Tier based for<br />

insurance brokers, he said the<br />

Council is concerned that a new<br />

NAICOM guideline may be seeking<br />

to Tier Brokers, which is not<br />

seen as required since Brokers are<br />

professional firms and not risk carriers.<br />

“However we have confidence<br />

in the approach of the commission<br />

to ensure all aspects are fully discussed<br />

before decisions are made”.<br />

Policyholder examines role of stakeholders in building a stronger insurance industry<br />

From the perspective of a<br />

policyholder, Ivor Takor, executive<br />

director, Centre for<br />

Pension Rights Advocacy,<br />

reviews role of stakeholders in developing<br />

the insurance industry, indentifying<br />

policyholders; management<br />

and staff; shareholders or the owners<br />

of the company; and the regulator<br />

as critical stakeholders.<br />

According to him, “Policyholders<br />

are interested in proper protection<br />

and liability coverage. They look forward<br />

to the ability of the company to<br />

pay claims and that the product is of<br />

good value (premium vs risk transfer)<br />

and that premium is affordable.<br />

The management and staff look forward<br />

to profitability of the company,<br />

good career prospects and adequate<br />

compensation; while the shareholders<br />

or the owners of the company<br />

are interested in adequate returns<br />

on their equity and solvency of the<br />

company.”<br />

“While the regulator, the National<br />

Insurance Commission balance<br />

forces within the industry and ensures<br />

the solvency of the companies.<br />

It also ensures that the interest of<br />

policyholders is protected and that<br />

they are treated fairly and ensures<br />

that defaulting companies pay fines.”<br />

Curiously looking at the sector,<br />

he asked “what is the role of stakeholders<br />

in the development of the<br />

industry? My first reaction is that<br />

the insurance industry is a business<br />

industry, where business best practices<br />

and good governance will help<br />

in developing the industry. However,<br />

my second reaction is that the insurance<br />

industry plays a social role by<br />

providing financial protection to<br />

different segments of the economy.<br />

This social role therefore makes the<br />

industry very sensitive, requiring<br />

regulatory scrutiny.”<br />

Ivor Takor<br />

“The regulator in the industry<br />

needs to be practical. Not long ago,<br />

we read that the Federal Government<br />

has pegged the capital base of<br />

mega insurance firms at N15 billion.<br />

The regulator knows the industry<br />

better and has reasons for whatever<br />

decisions it takes, which I believe<br />

are for the growth and development<br />

of the industry. The regulator<br />

to me should be more interested in<br />

what companies are doing rather<br />

than how much capital they hold.<br />

To develop the industry, the regulator<br />

must enforce full disclosure.<br />

Shareholders, policyholders and<br />

the regulator must understand what<br />

companies are doing. If the regulator<br />

doesn’t understand what a company<br />

is doing, it will be difficult to protect<br />

the interest of stakeholders and the<br />

integrity of the industry. Therefore,<br />

what is not understood should not<br />

be allowed?”<br />

“The regulator needs to make sure<br />

that investors get the right type of information<br />

(true and fair) without that<br />

the industry will become less attractive<br />

to investors. Some policyholders<br />

are still not sure that insurance<br />

companies will pay claims when the<br />

need to do so arises. They still have<br />

a mind set on what some refer to as<br />

hidden clauses in insurance, which<br />

are brought to the attention of policyholders<br />

only when claims are made.<br />

Policyholders and maybe shareholders<br />

need to have sensible risk returns<br />

profiles otherwise the industry will<br />

not be viable in the long run.”<br />

“On the part of Management and<br />

employees, we are beginning to see<br />

some level of aggressive marketing<br />

as against what obtained in the past.<br />

This no doubt will go a long way<br />

in developing the industry. When<br />

claims are paid promptly, people<br />

will insure their insurable risks. On<br />

the other hand, if insurance companies<br />

have two faces, that is the face<br />

of a dove when marketing and the<br />

face of a lion when claims are due<br />

for payment, people will keep away<br />

from insurance companies and resort<br />

to insuring all their insurable<br />

risks with God through prayers. Premium<br />

should be affordable.”


Wednesday <strong>22</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

C002D5556<br />

BUSINESS DAY<br />

27<br />

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

Insurers emphasise trusts, innovation,<br />

response time in driving penetration<br />

Stories by<br />

Modestus Anaesoronye<br />

Insurance operators<br />

in the country have<br />

agreed that operators<br />

must build trust, bring<br />

in innovation in product<br />

design and distribution,<br />

as well as claims response<br />

time to increase acceptability<br />

and penetration. These<br />

were the views of Yetunde<br />

Ilori, director general, Nigerian<br />

Insurers (NIA); Moruf<br />

Apamapa, managing director/CEO,<br />

Sunu Assurances<br />

and Jide Orimolade, managing<br />

director/CEO, Law Union<br />

and Rock Insurance Plc.<br />

The texperts, who spoke at<br />

the 3rd National Conference<br />

of the National Association<br />

of Insurance and Pension<br />

Correspondents (NAIPCO)<br />

in Lagos, added that since<br />

the business of insurance<br />

is about utmost good faith,<br />

then, insurers must earn the<br />

trust of the people to deepen<br />

insurance penetration.<br />

The reason Nigerians<br />

are neglecting insurance,<br />

according to Yetunde Ilori,<br />

has to do with the negative<br />

perception they have about<br />

insurance services, stating<br />

that there is no regulatory<br />

enforcement of insurance<br />

unlike pension. Misconception<br />

and misrepresentation,<br />

she said, is another very serious<br />

problem that must be<br />

quickly addressed by operators<br />

in the sector.<br />

“It is high time insurers<br />

understand what the buyers<br />

are looking for; how do they<br />

want it as well as where do<br />

they want it so that this will<br />

drive a change in their behavioural<br />

pattern when it comes<br />

to deploying their limited<br />

resources,” she stated.<br />

Moreover, she said, if insurance<br />

products are readily<br />

accessible to the people, it<br />

will attract more people and<br />

that if it’s deployed through<br />

mobile phones and a familiar<br />

terrain such as the banks,<br />

people will take advantage of<br />

this and embrace insurance,<br />

thereby, deepening penetration<br />

as well contributing to<br />

nation’s economy.<br />

When developing insurance<br />

products, she said,<br />

innovation and creativity<br />

should be taken into consideration,<br />

noting that a product<br />

should be able to address<br />

the needs of the customer;<br />

it should be kept simply and<br />

flexible. She equally charged<br />

operators to offer bundled<br />

and complementary products<br />

that will make insurance<br />

attractive to Nigerians.<br />

She further stated that<br />

products should be scaled<br />

down in such a way that it<br />

addresses the immediate<br />

needs, she added that, insurance<br />

pricing should be<br />

scientific and commensurate<br />

discounts and incentives<br />

should be put in place so that<br />

people can love to enjoy it.<br />

“Insurance Companies,<br />

Association and Regulators<br />

should be responsive when<br />

it comes to complaints and<br />

disputes resolution. Those<br />

that sell insurance should be<br />

people that are knowledgeable<br />

and have high sense of<br />

honesty who will not deceive<br />

the buyers. Since Information<br />

and Communication<br />

Technology (ICT) is the in<br />

thing, insurance company<br />

should invest more in ICT so<br />

that people can leverage on<br />

that and be reached when<br />

they want it as they want it.”<br />

she stressed.<br />

On his part, Moruf Apampa<br />

said, insurers must know<br />

their customers, to be able<br />

to carve products that address<br />

their immediate needs,<br />

adding that, it is high time<br />

operators focus on the retail<br />

business.<br />

According to him, “the<br />

most important thing for us<br />

Climate change heightens need for<br />

disaster risk finance, insurance<br />

Insurance and Pension Stakeholders at a conference on “Role of Stakeholders in Developing the sectors in Lagos<br />

(insurance companies) to<br />

do is to actually first know<br />

our customers; how do we<br />

reach them and how to serve<br />

them because if you don’t<br />

know your customer, you<br />

can’t reach and serve them.<br />

Insurance penetration is currently<br />

below 1.5 per cent, and<br />

yet, operators are focusing<br />

on the corporate side of the<br />

business. What is happening<br />

to the retail side of the business;<br />

the market women; the<br />

trade associations? We need<br />

to identify these people and<br />

then device means to reach<br />

them.”<br />

Apampa stated that insurance<br />

policy rates might not<br />

necessarily be a challenge;<br />

he believes insurers are not<br />

doing enough to convince<br />

the people to buy insurance.<br />

“Okada rider can afford<br />

N2, 000 pepper soups in a day<br />

and the same Okada rider<br />

cannot afford to buy annual<br />

insurance for N1, 500. What<br />

we need to do as I said earlier,<br />

is to know these customers.<br />

Now, they are willing to pay,<br />

but how do we make them<br />

to pay? They only want two<br />

things, which are, investment<br />

and protection,” he stressed.<br />

He therefore urged underwriting<br />

firms to make<br />

their products accessible and<br />

attractive to these people, he<br />

called on operators to be responsive<br />

to claims settlement<br />

as these can go a long way to<br />

make Nigerians build their<br />

trust in insurance services.<br />

To him, “We have to be<br />

very fast in terms of paying<br />

claims. In terms of product<br />

innovation, I think we have to<br />

be very innovative. What kind<br />

of products are we churning<br />

out? Are these products really<br />

addressing the need of the<br />

people? These are questions<br />

that must be answered. The<br />

only thing we can give to<br />

these people is to get their<br />

trust and when you get their<br />

trust, they can give you their<br />

money.”<br />

Recent natural disasters<br />

across the world<br />

have raised concern<br />

on the need to prepare<br />

for impact of climate<br />

change with insurance for risk<br />

mitigation. While for many<br />

the extreme weather was no<br />

more than a mild inconvenience,<br />

for millions of smallscale<br />

farmers, their families<br />

and communities in vulnerable<br />

countries, climate change<br />

is already having a devastating<br />

impact. It is clear there is<br />

an urgent need for climate<br />

and disaster risk finance and<br />

insurance which can build<br />

resilience and help mitigate<br />

the worst effects, according a<br />

report on Insurance Impact<br />

Network.<br />

According to the recently-formed<br />

InsuResilience<br />

Global Partnership, 26 million<br />

people are forced into<br />

poverty each year as a result<br />

of climate-related disasters.<br />

The Insurance Development<br />

Forum (IDF), launched two<br />

years ago, estimates that 70<br />

percent of economic losses<br />

from natural hazards remain<br />

uninsured, and in middleand<br />

low-income countries<br />

the uninsured proportion of<br />

economic losses often exceeds<br />

90 percent.<br />

None of this is new to the<br />

MiN, whose members have<br />

been collaborating to ensure<br />

greater resilience through insurance<br />

cover for more than<br />

ten years. Working through a<br />

range of partnerships such as<br />

the UN Environment’s Principles<br />

for Sustainable Insurance<br />

(PSI) initiative, the MiN<br />

aims to close the insurance<br />

protection gap and build resilience<br />

to shocks through<br />

truly inclusive insurance.<br />

Since joining forces a year<br />

ago, the MiN and UN-PSI<br />

have worked together to support<br />

the development and<br />

expansion of sustainable,<br />

socially inclusive insurance<br />

services.<br />

Given the essential role<br />

that inclusive insurance<br />

can play in achieving the<br />

SDGs, it is small wonder<br />

that new organisations and<br />

partnerships are coming<br />

into play. It’s encouraging<br />

to see increasing collaboration<br />

between civil society,<br />

governments, UN agencies,<br />

insurance companies and<br />

regulators. Stephan Opitz<br />

of long-standing MiN member<br />

KfW Development Bank<br />

welcomes new initiatives<br />

“to develop comprehensive<br />

and complementary solutions<br />

for and with our partners<br />

from civil society and<br />

the private sector. Solutions<br />

to give quick support to people<br />

who need it most in situations<br />

that are threatening<br />

their livelihoods”<br />

Some, however, caution<br />

against focusing too much on<br />

insurance as a silver bullet to<br />

tackling climate change and<br />

natural disasters. Inclusive<br />

risk management strategies<br />

such as mitigation and prevention,<br />

which go ‘beyond<br />

insurance’ are just as important,<br />

says Josh Ling, director<br />

of Financial Inclusion at Mercy<br />

Corps, another member of<br />

the MiN. “Savings are an important<br />

tool to provide a buffer<br />

to smaller shocks, and can<br />

play a complementary role<br />

to insurance products. Risk<br />

mitigation solutions must be<br />

considered first and should<br />

seek ways to avoid the climate<br />

exposure altogether.”<br />

Bridging insurance gap<br />

through the schools<br />

The level of ignorance<br />

about the benefits<br />

of insurance and its<br />

role in the economic<br />

development of the society<br />

in this part of the world is no<br />

doubt very high. This accounts<br />

for why majority of<br />

the populace, even among<br />

the educated elite still do not<br />

find need for insurance or<br />

use insurance to protect their<br />

dependants or assets, despite<br />

the age of the industry in Nigeria.<br />

While this is a different<br />

situation in most advanced<br />

economies including South<br />

Africa, the case for Nigeria<br />

which has made the country<br />

one of the least insurance<br />

conscious countries in the<br />

continent in terms of penetration<br />

given its population,<br />

has continued to engage the<br />

thought of stakeholders.<br />

The challenge therefore<br />

has been on how best to build<br />

insurance culture such that<br />

right from childhood citizens<br />

would begin to understand<br />

and appreciate the importance<br />

of having protection<br />

through insurance.


Wednesday <strong>22</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

28 BUSINESS DAY<br />

In Association<br />

How CBN’s policies sustain inflation rate decline<br />

Although the Central Bank of Nigeria (CBN) is yet to achieve 6-9 percent inflation target band, its various policies<br />

and interventions have significantly brought down the rate at which prices increase over time.<br />

with<br />

HOPE MOSES-ASHIKE<br />

All economists<br />

agree that stagflation<br />

is a difficult<br />

condition<br />

for policymakers<br />

to deal with. Stagflation<br />

occurs when a country’s<br />

Gross Domestic Product<br />

(GDP) is falling or stagnant<br />

while unemployment and<br />

inflation are rising simultaneously.<br />

Some economists have<br />

argued that no single macroeconomic<br />

policy can address<br />

rising inflation and<br />

slow growth simultaneously,<br />

because fighting inflation<br />

may require implementing<br />

policies that might, in the<br />

short term, be inimical to<br />

economic growth, whereas<br />

expansionary policies to<br />

stimulate growth usually<br />

worsen inflation.<br />

Nigeria’s economy faced<br />

a classical case of “stagflation”<br />

when, according to<br />

figures from the National<br />

Bureau of Statistics (NBS),<br />

GDP growth decelerated by<br />

0.36 percent and 2.1 percent<br />

in the first and second quarters<br />

of 2016, respectively.<br />

Moreover, the rate of<br />

price inflation for the<br />

months of September and<br />

October 2016 were 17.9<br />

percent and 18.3 percent,<br />

respectively, while official<br />

statistics also indicate that<br />

the country’s unemployment<br />

rate increased to 12.1<br />

percent and 13.3 percent<br />

during the first and second<br />

quarters of 2016.<br />

During the period, there<br />

was over 70 percent drop<br />

in the price of crude oil,<br />

which contributes the largest<br />

share of the country’s<br />

foreign exchange reserves<br />

and Federal Government<br />

revenues. Nigeria slipped<br />

into recession for the first<br />

time in more than two decades<br />

in <strong>Aug</strong>ust 2016.<br />

The Central Bank of Nigeria<br />

(CBN) was faced with<br />

the challenge of implementing<br />

monetary policy<br />

during a period characterized<br />

by stagflation, high inflation<br />

with negative growth<br />

in real GDP.<br />

The CBN introduced<br />

various policies and interventions,<br />

which today have<br />

curbed tension and brought<br />

stability in the economy.<br />

Some of the policies<br />

include the adoption of<br />

demand management<br />

through the restriction of<br />

forex for imports of goods<br />

that can be produced in<br />

Nigeria and withdrawal<br />

of the de facto subsidy for<br />

the importation of 41 nonessential<br />

commodities with<br />

unfolding successes. The<br />

policy was vigorously criticised<br />

by stakeholders but<br />

has helped in reduction of<br />

import bills.<br />

The CBN also took a<br />

number of actions to stabilize<br />

the exchange rate<br />

amidst escalated pressures<br />

from speculators, bettors,<br />

round-trippers and rentseekers.<br />

The introduction<br />

of Investors-Exporters (I&E)<br />

FX Window in April 2017 increased<br />

the transparency of<br />

the market and has helped<br />

stabilise the rates.<br />

Recently, the CBN increased<br />

dollar sales to bureaux<br />

de change (BDCs) by<br />

50 percent, from $40,000<br />

twice weekly to $60,000<br />

thrice weekly. It also mandated<br />

all Deposit Money<br />

Banks (DMBs) to buy and<br />

sell foreign exchange to<br />

travellers (both customers<br />

and non-customers) over<br />

the counter upon presentation<br />

of relevant, valid travel<br />

documents such as visa and<br />

ticket.<br />

As part of its mandate to<br />

ensure monetary and price<br />

stability, the CBN embarked<br />

Godwin Emefiele. CBN, governor<br />

on a cycle of tightening to<br />

rein in inflation, with Monetray<br />

Policy Rate (MPR)<br />

hiked in July 2016 from 12<br />

percent to the prevailing 14<br />

percent.<br />

Godwin Emefiele, governor<br />

of CBN, had expected<br />

to see inflation rate drop<br />

to very low double-digit or<br />

high single-digit levels this<br />

year.<br />

As it is, the apex bank<br />

is not far from achieving<br />

single-digit inflation with<br />

the inflation rate currently<br />

at 11.14 percent.<br />

Nigeria’s inflation yearon-year<br />

slowed marginally<br />

to 11.14 percent in July from<br />

11.23 percent the previous<br />

month, but still remains<br />

well above the 6-9 percent<br />

preferred band.<br />

Taiwo Oyedele, head, Tax<br />

and Regulatory Services,<br />

PWC, said the stability of the<br />

exchange rate has helped to<br />

reduce imported inflationary<br />

pressures. Unfortunately<br />

but realistically, he said,<br />

the rising unemployment<br />

rate has a downward pressure<br />

on inflation coupled<br />

with the tight monetary<br />

policy measures of the CBN.<br />

“I expect the decline in<br />

inflation rate to continue<br />

but marginally such that<br />

it will be quite some time<br />

before we achieve a singledigit<br />

inflation rate,” Oyedele<br />

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

Uche Joe Uwaleke, professor<br />

of finance and capital<br />

markets/chair, banking<br />

and finance department,<br />

Nasarawa State University,<br />

Keffi, attributed the<br />

steady decline in inflation<br />

to favourable CBN policies<br />

including the introduction<br />

of the Investors and Exporters<br />

Window, tight monetary<br />

policy stance since July<br />

2016, regular intervention<br />

in the forex market on the<br />

strength of healthy external<br />

reserves, and strategic interventions<br />

in agriculture,<br />

notably the Anchor Borrower<br />

Programme.<br />

The Anchor Borrower<br />

Programme (ABP), which<br />

targets agriculture, is one<br />

of the CBN’s intervention<br />

prigrammes targeted at<br />

specific high-impact sectors<br />

in a bid to support the Federal<br />

Government in diversifying<br />

the economy away<br />

from over-dependence on<br />

oil revenues for financing<br />

the budget and source of<br />

FX inflows. It is consistent<br />

with the apex bank’s development<br />

agenda under<br />

Emefiele.<br />

The ABP is designed to<br />

support small-holder farmers<br />

by providing them with<br />

the requisite training, tools<br />

and funds at single-digit<br />

interest rates, which will enable<br />

improved cultivation of<br />

key agricultural items such<br />

as maize, soybeans, rice,<br />

cotton and wheat.<br />

The programme, which<br />

began in November 2015,<br />

also provides a ready market<br />

for farmers by linking<br />

them with credible off-takers<br />

and processors of their<br />

produce.<br />

Two years into its implementation,<br />

the programme<br />

has contributed to the creation<br />

of an estimated 890,000<br />

direct and 2.6 million indirect<br />

jobs.<br />

As at February this year,<br />

the CBN, in partnership<br />

with state governments<br />

and several private sector<br />

groups, had disbursed a<br />

cumulative sum of N55.526<br />

billion to over 250,000 farmers<br />

who cultivated almost<br />

300,000 hectares of farmland<br />

for rice, wheat, maize,<br />

cotton, soybeans, cassava.<br />

Apart from ABP, there<br />

are other initiatives - like<br />

the Commercial Agriculture<br />

Credit Scheme and Nigeria<br />

Incentive-Based Risk Sharing<br />

System for Agricultural<br />

Lending (NIRSAL) - which<br />

are proving to be successful<br />

in several states.<br />

The result of these policies<br />

and interventions is that<br />

currently, there has been<br />

steady decline in inflation,<br />

rebound in oil prices and<br />

increase in production level,<br />

as well as continued stability<br />

in the foreign exchange<br />

market.<br />

However, some analysts<br />

say it is unlikely for the rate<br />

to hit the single-digit line in<br />

<strong>2018</strong>, giving security issues<br />

in food producing states in<br />

Nigeria coupled with the<br />

wearing base effect as the<br />

reasons. FSDH Research<br />

said attaining single-digit<br />

inflation rate is now unlikely.<br />

Ayodele Akinwunmi,<br />

head of research, FSDH<br />

Merchant Bank Limited,<br />

said, the base effect is the<br />

major driver of the decline<br />

in the inflation rate. This<br />

means that prices of consumer<br />

good items increased<br />

at a slower rate in the current<br />

year than in the previous<br />

year.<br />

“The spike in the food<br />

prices in the last three<br />

months has shifted the inflation<br />

curve and we expect<br />

the inflation rate to remain<br />

around 11 percent for the<br />

remainin part of the year<br />

<strong>2018</strong>”, Akinwunmi said.<br />

Uwaleke of Nasarawa<br />

State University expects a<br />

reversal in the downward<br />

trajectory of headline inflation<br />

due to pre-election<br />

spending, implementation<br />

of the <strong>2018</strong> budget, public<br />

servants’ wage increase expected<br />

before the end of the<br />

year, waning base effects,<br />

negative impact of herdsmen<br />

attacks on farming<br />

communities if not checked,<br />

and global developments,<br />

especially the interest rates<br />

hike in the US which is triggering<br />

capital outflows and<br />

depleting external reserves.


BUSINESS DAY<br />

C002D5556<br />

Wednesday <strong>22</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

29<br />

How Africa is<br />

winning battle<br />

to save mountain<br />

gorillas<br />

WhatsApp service<br />

connects Accor<br />

Hotel guests, staff<br />

Lagos Blue Rail<br />

to carry 400,000<br />

commuters daily<br />

Page 30 Page 30 Page 31<br />

Ford SA reaches Rangers assembly milestone<br />

Stories by MIKE OCHONMA<br />

Ford Motor Company of<br />

Southern Africa’s (FMC-<br />

SA’s) Silverton assembly<br />

plant, in Pretoria, has produced<br />

its 500,000th Ford<br />

Ranger. The Pick-up model has been<br />

one of the top-selling vehicles in the<br />

light commercial vehicle (LCV) segment<br />

in the country, as well as in the<br />

overall sales charts with the highest<br />

domestic sales figure of 3 333 units<br />

being achieved in July 2017.<br />

The Wildtrak 3.2 Double Cab<br />

half-millionth unit was painted in the<br />

model’s distinctive Pride Orange colour,<br />

and signifies the Ranger’s legacy<br />

since production started in 2011.<br />

In terms of export volumes, 8<br />

062 units were shipped from Silverton<br />

to customers in Europe, the<br />

Middle East and Africa in April this<br />

Toyota Motor Corp. posted a<br />

19 percent jump in quarterly<br />

profit, its best quarterly performance<br />

in two-and-a-half years,<br />

on the back of higher sales and cost<br />

reductions in Asia. Operating profit<br />

was 682.6 billion yen ($6.11 billion)<br />

for April-June, versus 574.3 billion<br />

yen a year earlier.<br />

Global retail vehicle sales rose<br />

1 percent to 2.6 million units in the<br />

quarter, boosted by an 8.5 percent<br />

lift in Asia. For the first six months,<br />

demand for the remodeled Camry<br />

helped to increase Chinese sales<br />

by 5.4 percent, while Thai sales<br />

jumped 26 percent. Together, sales<br />

in those countries helped drive a<br />

40.2 percent rise in first-quarter<br />

profit in Asia.<br />

In North America which is Toyota’s<br />

biggest regional market, sales<br />

rose 3.2 percent due to a rise in<br />

year. Combined local and export<br />

volumes for the month topped out<br />

at a record-breaking 10,434 units,<br />

making the Ranger the highest<br />

volume LCV model produced in<br />

South Africa.<br />

Reacting on the latest milestone,<br />

Ockert Berry , Ford Middle East and<br />

Africa Operations VP said; “The current<br />

Ford Ranger has been a remarkable<br />

success story for FMCSA, and<br />

we are delighted to have reached<br />

the 500,000 mark for this vehicle<br />

programme,”.<br />

“Early next year, we are set to<br />

launch the Ford Ranger Raptor,<br />

which will add a new chapter to<br />

the Ranger’s legacy in South Africa<br />

and across the region,” Berry highlighted.<br />

Ford invested more than R3-billion<br />

in its South African operations<br />

for the launch of the Ranger in 2011<br />

to cater for the South African market<br />

Toyota’s global profits records 19 percent growth<br />

demand for its pick-ups, including<br />

the Tacoma and Tundra. Still, profit<br />

in the region fell 29 percent as sales<br />

incentives continued to weigh.<br />

This report is focused on covering<br />

the latest autonomous driving trends<br />

and events. It includes an assessment<br />

of how far autonomous vehicle technology<br />

has advanced and what more<br />

is needed for deployment.<br />

In Japan, sales fell 6.3 percent,<br />

but profitability rose 24 percent due<br />

to cost reductions and an increase<br />

in vehicles made in Japan and exported<br />

overseas.<br />

The automaker maintained its<br />

full-year profit forecast to slip 4.2<br />

percent to 2.3 trillion yen, though<br />

it is now factoring in one U.S. dollar<br />

being worth 106 yen, from an<br />

earlier forecast of 105 yen. Overall,<br />

it still anticipates a stronger yen to<br />

offset the benefits of cost cutting and<br />

and exports to over 148 markets in<br />

Europe, the Middle East and Africa.<br />

It was followed with a further<br />

R3-billion investment in 2017 to<br />

expand production capacity to meet<br />

the growing worldwide demand for<br />

the Ranger, Berry added.<br />

“This reaffirms our role as an<br />

integral part of Ford’s global manufacturing<br />

network with world-class<br />

operations at the Silverton assembly<br />

plant and at the Struandale engine<br />

plant, in Port Elizabeth, which produces<br />

the Duratorq TDCi engines<br />

for the Ranger.”<br />

Ranger has introduced a range<br />

of safety, comfort and convenience<br />

features, including three generations<br />

of Ford’s SYNC infotainment<br />

system, as well as advanced driver<br />

assistance technologies, such as<br />

Adaptive Cruise Control and Lane<br />

Keeping System, which are standard<br />

on the Wildtrak model.<br />

record-high global vehicle sales.<br />

Meanwhile, Toyota is joining<br />

other carmakers in preparing for<br />

challenges ahead as sedan sales<br />

cool in the U.S. and the country’s<br />

trade war with China threatens to<br />

The performance delivered by<br />

its 2.2 l and 3.2 l Duratorq TDCi engines<br />

has equally contributed to its<br />

popularity, while the introduction of<br />

sophisticated automatic transmissions<br />

across a range of models and<br />

engine capacities has reshaped the<br />

buying patterns of customers in the<br />

pick-up segment.<br />

Traditionally long model-cycles<br />

associated with the LCV segment<br />

have been reduced with the Ranger,<br />

as regular feature and equipment<br />

upgrades over the past seven years<br />

have ensured that Ford’s pick-up<br />

range remains up to date.<br />

In 2015, the Ranger received a<br />

comprehensive update that saw<br />

the debut of more muscular styling,<br />

along with technology and feature<br />

enhancements that included<br />

SYNC3 and the subsequent addition<br />

of embedded navigation on highspec<br />

models.<br />

boost prices and weigh on demand.<br />

The Japanese company reduced<br />

costs by 60 billion yen ($540 million)<br />

in the first quarter and said it’ll<br />

continue to push for savings across<br />

its regions.<br />

Car freaks savour Kia’s<br />

new SSZ technology<br />

Kia Motors Corporation<br />

(KMC) has revealed for the<br />

first time, its next-generation<br />

Separated Sound Zone (SSZ)<br />

technology that allows each passenger<br />

of a vehicle to experience<br />

an audio stream tailored to their<br />

individual needs, including music,<br />

hands-free phone calls, and<br />

vehicle alerts, whilst maintaining<br />

a headphone-free social space<br />

where passengers can converse<br />

freely.<br />

The SSZ technology creates<br />

and controls the acoustic fields<br />

of the car, allowing the driver and<br />

each passenger to hear isolated<br />

sounds. The many speakers<br />

installed in the vehicle feature<br />

technology that uses scientific<br />

principles to reduce or increase<br />

audio levels of sound waves.<br />

This negates the overlap of<br />

sounds being heard in each seat,<br />

creating the same effect as current<br />

noise cancellation systems, but<br />

without the need for headphones.<br />

“Customers in the autonomous<br />

navigation era will demand<br />

increasingly customizable entertainment<br />

options within their<br />

vehicles, which includes technological<br />

innovations such as the<br />

Separated Sound System.” says<br />

Kang-duck Ih, Research Fellow at<br />

Kia’s NVH Research Lab.<br />

“I hope by providing drivers<br />

and passengers with tailored, independent<br />

audio spaces, they will<br />

experience a more comfortable<br />

and entertaining transportation<br />

environment.” Kang-duck Ih said.<br />

People’s musical tastes vary,<br />

so some passengers choose to use<br />

headphones during a journey to<br />

isolate their audio stream, but this<br />

also creates an unnecessary social<br />

barrier when interacting with<br />

other passengers.<br />

When travelling in a vehicle<br />

equipped with next-generation<br />

SSZ technology, each passenger<br />

can connect their smartphone via<br />

Bluetooth and listen to their own<br />

music without interference from,<br />

or interfering with other passenger’s<br />

audio streams.<br />

When the SSZ is utilized,<br />

hands-free phone calls can<br />

also be isolated to individual<br />

passengers, ensuring privacy<br />

when having important phone<br />

conversations on the move. This<br />

technology can eliminate unnecessary<br />

sounds for the passenger,<br />

but provide them for the driver.


Wednesday <strong>22</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

30 BUSINESS DAY<br />

C002D5556<br />

odern<br />

MTravel<br />

How Africa is winning battle<br />

to save mountain gorillas<br />

Stories by MIKE OCHONMA<br />

Travelling for holidays<br />

and business trips<br />

sometimes can be<br />

very pleasurable and<br />

exciting at the same<br />

time, and also very boring and<br />

uninteresting. Thant depends<br />

on how such trip or movement<br />

is planned.<br />

A recent survey of the critically<br />

endangered mountain gorilla has<br />

revealed that, it is the only great<br />

ape in the world whose population<br />

is rising. The census puts<br />

the wild population of mountain<br />

gorillas at 1,004 which is a 25 percent<br />

increase since 2010.<br />

Mountain gorillas have been<br />

the focus of concerted conservation<br />

efforts in recent decades<br />

and those endeavours appear to<br />

have been vindicated by the latest<br />

figures.<br />

The latest survey took place<br />

in the Virunga Massif, where the<br />

gorilla population is believed to<br />

have risen from 480 in 2010 to 604<br />

in <strong>2018</strong>. Add that to the 400 great<br />

apes living in Bwindi Impenetrable<br />

National Park and you have a<br />

wild population of just over 1,000.<br />

Mountain gorillas are found in<br />

only two locations in the world:<br />

Bwindi Impenetrable National<br />

Park in Uganda and the Virunga<br />

Massif, which straddles the border<br />

between Rwanda, Uganda and the<br />

Democratic Republic of Congo<br />

(DRC).<br />

David Attenborough, who famously<br />

filmed the great apes for<br />

the BBC in the 1970s, said: “When<br />

I first visited the mountain gorillas<br />

in 1979, the situation was dire; the<br />

Virgin Atlantic backs Heathrow border upgrade<br />

Virgin Atlantic has called on the<br />

border force to take action as<br />

the number of international<br />

visitors to the United Kingdom (UK)<br />

waiting more than two hours to clear<br />

immigration continues to increase.<br />

New figures reveal the force<br />

missed its target of a 45-minute wait<br />

or less for 95 per cent of visitors from<br />

outside the European Economic Area<br />

on 30 out of 31 days last month. In<br />

response Virgin is calling for urgent<br />

number of these remarkable animals<br />

was dreadfully small.<br />

“It is incredibly heartening<br />

therefore to see how the efforts of<br />

so many different groups – communities,<br />

governments, NGOs –<br />

have paid off. Now the challenge<br />

must be to ensure that these<br />

achievements are sustained long<br />

into the future.”<br />

Despite the good news, conservationists<br />

have warned that<br />

this is no time for complacency.<br />

While partaking in the Virunga<br />

Massif survey, teams found and<br />

destroyed more than 380 snares,<br />

which are set for antelope but often<br />

kill or maim mountain gorillas.<br />

Indeed, one of the primates was<br />

found dead in a snare.<br />

Furthermore, the effect of climate<br />

change, oil exploration and<br />

infrastructure development also<br />

pose a major threat to the apes,<br />

which, according to conservationists,<br />

face an increased risk of<br />

catching human-borne diseases.<br />

The results of the latest gorilla<br />

census would come as welcome<br />

news to some industry players like<br />

Dian Fossey, the conservationist<br />

who dedicated her life to protecting<br />

the great apes, long before<br />

their plight entered mainstream<br />

consciousness.<br />

The American zoologist travelled<br />

to East Africa in the 1960s<br />

and was so taken by mountain<br />

gorillas that she built a hut in the<br />

Rwandan side of the Virunga Massif<br />

so she could study them.<br />

Locals called her Nyiramacibiri<br />

– which means ‘woman who<br />

lives alone on the mountain’ – and<br />

many people thought she was<br />

bonkers.<br />

At the time, poaching was a<br />

action to reduce the waiting times and<br />

extend the welcome visitors deserve.<br />

Recent high-profile events such<br />

as the Royal Wedding and the<br />

favourable exchange rate have contributed<br />

to increased international<br />

visits in <strong>2018</strong>, and coupled with an<br />

under resourced border force has<br />

led to excessively long queue times<br />

at immigration, the airline argues.<br />

The longest queue time occurred<br />

on July 6, when non-EEA<br />

major threat to gorillas, whose<br />

body parts were often fashioned<br />

into grotesque souvenirs that were<br />

sold to tourists.<br />

Stunned at such horrors, Fossey<br />

launched a lonely campaign<br />

against poaching and illegal farming,<br />

another major threat to the<br />

apes.<br />

“At first, people didn’t like her.<br />

They thought she was denying<br />

them their rights to hunt and graze<br />

cattle in the forest,” said Francis<br />

Bayingana, a guide, who led me<br />

on a trek through Virunga Massif<br />

back in 2015.<br />

“But over time she started<br />

employing porters, trackers, researchers<br />

and they could see her<br />

methodology and started to like<br />

her.”<br />

But Fossey still had many enemies<br />

and on Boxing Day in 1985,<br />

she was fatally stabbed at her<br />

home. Nobody was ever prosecuted<br />

for her murder.<br />

Her death, however, marked a<br />

new epoch for gorilla protection.<br />

The small charity she set up to<br />

tackle poaching, the Digit Fund,<br />

grew into the Dian Fossey Gorilla<br />

Fund International, which now<br />

employs around 120 people.<br />

“Today, mountain gorilla numbers<br />

are looking much healthier,<br />

but this is no time for complacency,”<br />

said Alison Mollon, Director<br />

of Operations for Africa at Fauna<br />

& Flora International (FFI).<br />

“We need to remain extremely<br />

vigilant, particularly in light of<br />

the ever-present and growing<br />

threat posed by the transmission<br />

of human-borne diseases that are<br />

relatively innocuous for us, but<br />

potentially fatal to other primates.”<br />

He stated.<br />

WhatsApp service connects<br />

Accor Hotel guests, staff<br />

AccorHotels UK & Ireland<br />

has introduced new facility<br />

for guests to communicate<br />

with hotel staff using WhatsApp.<br />

What this means is that instead<br />

of being obliged to use the<br />

phone in their room to contact<br />

reception or other hotel facilities<br />

or services, they can now simply<br />

send a message via WhatsApp<br />

Messenger.<br />

The service sees guests given<br />

a dedicated mobile phone number<br />

with their room key card on<br />

arrival. A member of staff monitors<br />

requests which they can immediately<br />

respond to, whether<br />

for room service where offered,<br />

housekeeping, or a restaurant<br />

reservation.<br />

Because guests use their own<br />

mobile phones to message the<br />

hotel, they can make requests<br />

wherever they are in or out of<br />

the hotel, before, during or after<br />

their stay.<br />

The service is now available in<br />

around 90 per cent of the group’s<br />

hotels that are run from the mobile<br />

operating system introduced<br />

last year, and will be rolled out<br />

further at selected hotels in the<br />

portfolio.<br />

In the hotels where it was first<br />

trialled, it has generated positive<br />

feedback from guests, for whom<br />

the WhatsApp is an increasingly<br />

important method of communication.<br />

It has over 1.3 billion users<br />

queues.<br />

Craig Kreeger, chief executive of<br />

Virgin Atlantic, said: “This summer<br />

significant queues at border control<br />

mean that thousands of visitors<br />

have faced two-hour queues to get<br />

their passports checked, leaving<br />

them frustrated before they even<br />

started their trip.”<br />

He added: “We all agree that<br />

security and safety at our airports is<br />

vital and remains our top priority,<br />

worldwide.<br />

Thomas Dubaere, chief operating<br />

officer of AccorHotels<br />

northern Europe, commented:<br />

“Guests want to communicate<br />

using the methods they are<br />

most familiar with.<br />

“The use of WhatsApp has increased<br />

exponentially over the<br />

past few years and is a platform<br />

most of our guests tell us they<br />

feel very comfortable using, so<br />

enabling them to use it to order<br />

room service or ask reception<br />

a question is a logical step to<br />

ensuring they have the best possible<br />

experience in our hotels.”<br />

The move marks the latest<br />

phase in AccorHotels’ introduction<br />

of mobile technology to improve<br />

the guest and employee<br />

experience.<br />

In 2017 it began to run the<br />

ibis UK network from mobile<br />

devices, with employees welcoming<br />

and helping guests as<br />

well as managing their schedules<br />

from an app on their smartphones.<br />

This gives staff more time to<br />

assist guests and also enabled<br />

ibis to remove traditional reception<br />

desks altogether. The hotels<br />

also recently implemented digital<br />

technology that allows guests<br />

to order food and drink, process<br />

payment and be sent receipts<br />

from the same platform via their<br />

smartphones.<br />

but other countries are managing<br />

their borders more effectively.<br />

“At a time when the UK needs to<br />

show the world that, it is open for<br />

business, the government and border<br />

force need to provide a great first impression,<br />

for every visitor, every time.”<br />

British Airways chief executive<br />

Alex Cruz made a similar call last<br />

week. The government said it is deploying<br />

200 extra staff to Heathrow<br />

this summer to combat the queues.


Local and global rail news as it breaks<br />

Lagos Blue Rail to carry<br />

400,000 commuters daily<br />

MIKE OCHONMA<br />

As commuters in<br />

the Lagos metropolis<br />

along the<br />

densely populated<br />

Lagos-Badagry<br />

expressway battles with the<br />

daily challenges and rigour<br />

of travelling from one to the<br />

other along the corridor, there<br />

are hopes that with the completion<br />

of the rail project,<br />

passenger traffic along the<br />

axis will be reduced.<br />

Only recently, Alstom SA of<br />

France an agreement with the<br />

Lagos state government ) for<br />

both Phase 1 and Phase 2 of<br />

the Lagos Blue Line metro that<br />

is projected to carry 400,000<br />

passengers daily with capacity<br />

increased to 700,000 passengers<br />

daily at completion.<br />

The integration with existing<br />

transport systems like our<br />

bus or boat lines, and future<br />

metro lines will largely contribute<br />

to the global transport<br />

plan for Lagos to reduce traffic<br />

congestion and make the<br />

metropolis a smart city.<br />

With the increasing transport<br />

demand in the city, the<br />

Blue Line metro construction<br />

aims to address mobility challenges,<br />

stimulate economic<br />

growth and job creation while<br />

improving the environment<br />

and air quality of the city.<br />

Japan Railway studies driverless operation<br />

East Japan Railway<br />

Co has set up a team<br />

to develop plans for<br />

driverless operation, the<br />

Yomiuri Shimbun newspaper<br />

reports.<br />

Under the new thinking,<br />

trains would initially<br />

run with an onboard supervisor<br />

able to intervene<br />

in the event of an emergency,<br />

but in the longer<br />

term unattended operation<br />

is planned.<br />

JR East envisages that<br />

driverless operation<br />

The project is the first reference<br />

for Alstom in the country<br />

and coming up the hugely<br />

populated city of Lagos with<br />

an estimated <strong>22</strong> million inhabitants<br />

that is regularly<br />

confronted with very severe<br />

traffic congestion.<br />

And what this means to<br />

the commuting public and<br />

the Lagos state government is<br />

that, with time, the unregulated<br />

transportation mode along<br />

the corridor will be given a<br />

new lease of life and ensures<br />

that, the travelling gets to<br />

their different destinations in<br />

comfort and at an affordable<br />

transportation cost.<br />

For many years, the modern<br />

rail project handled by<br />

the Lagos State government,<br />

being the first of its kind the<br />

country’s very strategic and<br />

international route has experienced<br />

protracted delays<br />

that have left commuters<br />

frustrated as result of bad<br />

roads, unroadworthy vehicles<br />

and bad driving habits by<br />

motorists.<br />

When completed, the Blue<br />

Line will be composed of a 27<br />

kilometer line with 13 stations<br />

from Okokomaiko to Marina,<br />

while the phase 1 and 2 of<br />

the line will cover a distance<br />

of 12kilometers out of which<br />

4kilometer on viaduct and 5<br />

stations.<br />

The memorandum of understanding<br />

signed at the<br />

France-Nigeria Business Forum<br />

attended by Emmanuel<br />

Macron, President of France,<br />

and Akinwunmi Ambode,<br />

the executive governor Lagos<br />

State seeks to help extend the<br />

modernisation of transportation<br />

system in the state.Abiodun<br />

Dabiri, an engineer and<br />

the managing director, Lagos<br />

Metropolitan Area Transport<br />

Authority (LAMATA), the Blue<br />

Line said the project is of strategic<br />

importance for the city<br />

of Lagos as it allows people<br />

to travel safe and fast across<br />

longer distances.<br />

As part of Phase 1, Alstom<br />

will ensure the electrification<br />

of a portion of the line with<br />

third rail as well as substations.<br />

After phase 1, both<br />

Alstom and the state government<br />

intend to work jointly<br />

on Phase 2 of the project by<br />

structuring financing from<br />

Export Credit Agencies (ECA)<br />

to provide metro trains, CBTC<br />

based signalling, the operation<br />

and control centre, passenger<br />

information services<br />

and the ticketing system in<br />

the stations.<br />

Equipped with proven reliable<br />

and ecological solutions,<br />

the Blue Line will contribute<br />

to positioning the city among<br />

the showcases of sustainable<br />

mobility in Africa, stated<br />

Didier Pfleger, Senior Vice<br />

could help to mitigate<br />

staff shortages arising<br />

from the ageing workforce,<br />

and also reduce<br />

costs on loss-making<br />

rural lines.<br />

Conversion of existing<br />

lines to driverless<br />

operation would require<br />

the development of improved<br />

obstacle detectors,<br />

as well as elevating<br />

the tracks to provide<br />

President Middle East and<br />

Africa.<br />

Meanwhile, many<br />

Lagosians have criticised<br />

the slow pace of work on<br />

the on-going Lagos-Badagry<br />

blue rail project linking<br />

Marina and Okokomaiko<br />

to meet with the set out<br />

integrated transportation<br />

initiative of Lagos state.<br />

But the seriousness<br />

it desires to deliver it on<br />

record time has been described<br />

by many as one<br />

of the factors contributing<br />

to the piling up of traffic<br />

along the corridor which<br />

has become a recurring<br />

decimal.<br />

As at the time of filing<br />

this report, <strong>BusinessDay</strong>’s<br />

transport reporter who<br />

drives through the corridor<br />

can authoritatively<br />

report that hoodlums and<br />

destitutes have taken over<br />

the newly constructed rail<br />

terminals along the Lagos-<br />

Badagry expressway.<br />

Awarded since 2009<br />

to China Civil Engineering<br />

and Construction<br />

Company, (CCECC), the<br />

project involves the expansion<br />

of the previous<br />

four-lane highway to ten<br />

lanes as well as a metro<br />

rail line from Marina, to<br />

Orile-Iganmu all through<br />

to Okokomaiko.<br />

grade separation and<br />

installing platform<br />

screen doors at stations.<br />

Legal changes<br />

would also be needed<br />

Ṗilot schemes are<br />

proposed for the<br />

Yamanote Line in<br />

Tokyo, which does<br />

not share tracks with<br />

other services, and the<br />

Tohoku Shinkansen.<br />

African rail trips to explore<br />

The Shongololo<br />

Express; This luxury<br />

train of air-conditioned<br />

entirely en suite<br />

rooms with double or twin<br />

beds has to be the most comfortable<br />

way to see southern<br />

Africa – especially in a Royal<br />

Suite, which takes up half a<br />

carriage.<br />

The beautifully restored<br />

or appointed wood-panelled<br />

coaches include dining,<br />

lounge and observation<br />

cars, and there is a gift shop<br />

on board.<br />

Varying three to 15-day<br />

itineraries venture as far as<br />

Dar es Salaam in Tanzania,<br />

Victoria Falls in Zimbabwe<br />

and Swakopmund in Namibia,<br />

but the most frequent<br />

route is between Cape Town<br />

and Pretoria. Most trains begin<br />

or end at Rovos Rail’s own Capital<br />

Park station near Pretoria.<br />

Blue Train: South Africa’s<br />

national railway luxury train<br />

is one of the oldest, derived<br />

from trains introduced in 1923,<br />

though frequently replaced or<br />

upgraded to become more<br />

luxurious. Oscillating between<br />

Cape Town and Pretoria, the<br />

two train sets each include two<br />

lounge cars, dining cars and an<br />

observation car, and some of<br />

the all en suite cabins have the<br />

rare facility of wheels of a fullsized<br />

bath. Southbound trains<br />

break the journey at Kimberley<br />

for a visit to the Big Hole and<br />

its Diamond Mine Museum,<br />

while northbound trains stop<br />

Night Tube contributes £190m<br />

to London’s economy<br />

Passenger numbers on<br />

London’s Night Tube<br />

service grew to 8.7 million<br />

customers in its second<br />

year, up from 7.8 million in<br />

2016-17.<br />

A report released by<br />

London First and EY on<br />

<strong>Aug</strong>ust 17 showed the increase<br />

in demand means<br />

Night Tube helped to generate<br />

an additional £190m<br />

for London’s economy last<br />

year, a contribution that<br />

has increased by almost<br />

£20m from its first year of<br />

operation.<br />

The report says the service<br />

is projected to contribute<br />

£1.54bn over the<br />

next 10 years to the wider<br />

London economy, double<br />

the projections made before<br />

the service launched in <strong>Aug</strong>ust<br />

2016.<br />

Night Tube is also supporting<br />

more than 3900<br />

jobs, up 8.5 % from last year.<br />

The Night Tube runs on six<br />

at Matjiesfontein for a sherry in<br />

the Lord Milner Hotel, founded<br />

in 1884 by James Douglas<br />

Logan, a Scottish railwayman.<br />

Shongololo Express:<br />

Bought by Rovos Rail in 2016,<br />

the Shongololo Express is positioned<br />

to cater for those more<br />

concerned to see southern<br />

Africa than pay for an opulent<br />

train experience. Three 12 to<br />

15-day itineraries are on offer,<br />

traversing South Africa,<br />

Mozambique, Namibia, Swaziland<br />

and Zimbabwe. The 72<br />

guests are accommodated in<br />

two categories of en suite cabins<br />

with double or twin beds<br />

– Emerald has a small lounge<br />

area, Gold does not – and there<br />

is a bar car and observation<br />

car as well as dining cars. One<br />

of the itineraries offers golfing<br />

and other options, and all visit<br />

game, historic or archaeological<br />

sites.<br />

The first high-speed line<br />

in Morocco and Africa is due<br />

to open in mid-<strong>2018</strong> between<br />

Tangier and Kenitra, which<br />

will reduce the journey time<br />

between Tangier and Casablanca<br />

from nearly five hours<br />

to just over two hours with<br />

connections on to Marrakech.<br />

TGV Duplex trains have<br />

been adapted for the climate<br />

with more powerful air conditioning<br />

and filters to prevent<br />

sand penetration of equipment.<br />

Those wanting to reach<br />

Morocco overland can board<br />

ferries to Tangier in Algeciras<br />

or Barcelona.<br />

lines on Friday and Saturday<br />

nights and the early hours of<br />

Saturday and Sunday mornings.<br />

Transport for London<br />

(TfL) says passenger numbers<br />

have been higher than<br />

expected with almost 17<br />

million journeys so far, well<br />

above the 14 million forecast.<br />

Night services now also include<br />

the Night Overground,<br />

launched in December 2017.<br />

TfL says it will consider<br />

how best to introduce a similar<br />

service on the Docklands<br />

Light Railway (DLR) when<br />

the next operating contract<br />

is let in 2021, while the upgrade<br />

of the Circle, District,<br />

Hammersmith & City and<br />

Metropolitan lines will facilitate<br />

a night service on these<br />

lines once the programme is<br />

fully complete in 2023. Other<br />

plans will be kept under<br />

review to see where there is<br />

demand for further nighttime<br />

services.


32 BUSINESS DAY C002D5556<br />

Wednesday <strong>22</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

SHIPPING LOGISTICS MARITIME e-COMMERCE<br />

TAAM Conference: How lack of regulation, automation,<br />

naira depreciation drive high port charges<br />

UZOAMAKA ANAGOR-EWUZIE<br />

Twelve years after<br />

concession,<br />

maritime industry<br />

stakeholders<br />

on Friday, took<br />

turns to examine why cost<br />

of doing business at the nation’s<br />

seaports has remained<br />

high. They blamed lack of<br />

effective regulations and full<br />

automation as well as naira<br />

depreciation among others<br />

for high cost, and identified<br />

issues that require immediate<br />

attention, if cost must<br />

reduce.<br />

The Federal Government<br />

in 2006, embarked on<br />

port reform, which concessioned<br />

the cargo handling<br />

operations of the seaports to<br />

private terminal operators,<br />

leaving the Nigerian Ports<br />

Authority (NPA) to run the<br />

administrative aspect of the<br />

port on landlord model.<br />

This was aimed at ensuring<br />

service efficiency by<br />

growing investment in port<br />

infrastructure and superstructure;<br />

faster turnaround<br />

and reduce high cost associated<br />

with delays.<br />

Gathered at the third edition<br />

of the Taiwo Afolabi<br />

Annual Maritime (TAAM)<br />

Conference, held in Lagos<br />

on Friday, stakeholders say<br />

that while it took eight years<br />

for government to appoint<br />

an economic regulator for<br />

the port, there has not been<br />

effective ways of regulating<br />

the charges impose on<br />

port users by both service<br />

providers and government<br />

agencies.<br />

Obviously, the Nigerian<br />

Shippers’ Council (NSC)<br />

currently the port economic<br />

regulator is yet to fashion out<br />

ways to not only regulate the<br />

charges of the service providers,<br />

but to also regulate<br />

the one government agencies<br />

impose on port users.<br />

Pundits believed that<br />

the volume of investment<br />

made by private terminal<br />

operators, which to a large<br />

extent, has enthroned efficient<br />

operations and faster<br />

turnaround for vessels, come<br />

with high pricing for their<br />

services.<br />

But, according to them,<br />

such will not be said about<br />

the agencies at ports, as<br />

government that owes the<br />

trillions of naira accrue by<br />

the agencies, has failed to<br />

invest in infrastructure development<br />

as required by<br />

the concession agreement.<br />

This was evident in the state<br />

of roads around the ports.<br />

L-R: Kunle Folarin, chairman, Nigerian Ports Consultative Council and keynote speaker; Mariam<br />

Afolabi, representative of Taiwo Afolabi; Adebayo Sarumi, former managing director, Nigerian Ports<br />

Authority and chairman of the occasion, and Adewale Olawoyin, lecturer and staff adviser, Maritime<br />

Forum, Faculty of Law, University of Lagos at the third edition of the Taiwo Afolabi Annual Maritime<br />

Conference held in Lagos.<br />

Presenting the keynote<br />

address, themed: “Port<br />

Cost and Port Charges: A<br />

Recurring Decimal under<br />

Port Reform Regime,” Kunle<br />

Folarin, chairman of Port<br />

Consultative Council (PCC),<br />

who described port cost as<br />

collective responsibility of<br />

both the government and<br />

private sector operators, said<br />

cost and charges include the<br />

value of what port users pay<br />

to government agencies,<br />

terminal operators and other<br />

service providers for utilising<br />

port services.<br />

Cost, according to him,<br />

consist of the total charges<br />

paid per cargo, with Customs<br />

duty and taxes accounting<br />

for over 70 percent; terminal<br />

charges 13 percent; NPA<br />

charges accounting for less<br />

than one percent while storage<br />

and delivery charges accounts<br />

for about 65 percent<br />

of the total port cost.<br />

Folarin, who called for<br />

both commercial and technical<br />

regulations at the ports<br />

especially in setting up rules<br />

that must be carried out<br />

by the parties, questioned<br />

the inability to regulate the<br />

charges of agencies like the<br />

Standards Organisation of<br />

Nigeria (SON), NPA, Nigeria<br />

Drug Law Enforcement<br />

Agency (NDLEA) and others.<br />

At pre-concession era, the<br />

NPA, which was in charge of<br />

cargo handling at the port,<br />

found it difficult to invest<br />

in the acquisition of new<br />

cargo handling equipment<br />

because it was rendering<br />

subsidised services without<br />

making profit.<br />

Stakeholders believed<br />

that making use of tariff<br />

system that did not represent<br />

the current economic<br />

realities especially as regards<br />

to the cost of operation and<br />

foreign exchange rate, compel<br />

service providers to be<br />

in business without making<br />

profit.<br />

Adebayo Sarumi, former<br />

managing director of the<br />

NPA, who doubles as event<br />

chairman, said that in 2003<br />

NPA was using tariff, which<br />

Price Income and Productivity<br />

Board, approved in 1993,<br />

adding that the use of 1993<br />

tariff in 2004, made it difficult<br />

for the NPA to do port<br />

business gainfully.<br />

“For using outdated tariff<br />

system, the quality of the<br />

services rendered by the<br />

NPA suffered as the situation<br />

resulted to slow turnaround<br />

of ships; shallow channels;<br />

poor infrastructure development<br />

because the funds<br />

that would have been used<br />

to provide infrastructure<br />

was used to subsidised NPA<br />

services,” Sarumi stated.<br />

Sarumi disclosed that<br />

private terminal operators<br />

refused to use the tariff of<br />

the NPA because to manage<br />

the port better by ensuring<br />

faster turnaround time, efficient<br />

cargo delivery and<br />

acquire standard terminal<br />

equipment, the tariff system<br />

needed to change.<br />

“For instance, when NPA<br />

handed Apapa Container<br />

Terminal to APM Terminal,<br />

the only crane that was in the<br />

terminal was bought in 1978<br />

and was not operational for<br />

up to 10 years before concession.<br />

To start operation,<br />

APMT had to transfer 10 new<br />

cranes from Port Elizabeth<br />

to Apapa port and within a<br />

very short time, the situation<br />

improved.<br />

In his view, Hassan Bello,<br />

executive secretary of the<br />

NSC, who noted that Nigerian<br />

port has been categorised<br />

as one of the costliest<br />

in the region, blamed delays<br />

in positioning of containers<br />

for examination and gridlock<br />

for additional cost in doing<br />

business at the port.<br />

Represented by Cajethan<br />

Agu, deputy director, Monitoring<br />

and Enforcement of<br />

NSC, Bello said that the first<br />

attempt by the Council as<br />

port economic regulator,<br />

to bring sanity in the port,<br />

in terms of harmonising<br />

charges, met stiff opposition.<br />

Shippers’ Council believes<br />

that there was need<br />

to establish an effective and<br />

sustainable platform for the<br />

review of future port tariff.<br />

Automation is critical especially<br />

in the establishment<br />

of Single Window Platform,<br />

which has been embraced<br />

by almost all the ports in the<br />

West and Central Africa.<br />

Citing example, Bello<br />

stated that in Cotonou port,<br />

Single Window helped to<br />

reduce dwell time of cargo<br />

from 40 to less than 10 days;<br />

increased government revenue<br />

by more than 39 percent<br />

while trucks gained 23 percent<br />

transit time to the port.<br />

“Single Window is something<br />

that we cannot avoid<br />

because is only in Nigeria<br />

that there is no connectivity<br />

and integration among operators.<br />

The earlier we embrace<br />

automation, the faster<br />

we deal with the issue of cost<br />

reduction,” Bello added.<br />

From investors’ perspective,<br />

Henry Ajetumobi, executive<br />

director, SIFAX Off-<br />

Dock, who affirmed the need<br />

for the regulator to act as a<br />

third party between the service<br />

provider and consumers<br />

of the port services, stated<br />

that to have appropriate cost<br />

in the port, there was need<br />

for negotiation by all parties.<br />

Ajetumobi, who noted<br />

that Nigerian port reform<br />

was anchored on shared responsibilities<br />

of both public<br />

and private players, said<br />

that concession agreement<br />

expect terminal operators to<br />

have certain responsibilities<br />

while government deliver its<br />

side of the bargain.<br />

L-R: Kunle Folarin, chairman, Nigerian Ports Consultative Council and keynote speaker; Obiageli Obi,<br />

director-general, Nigerian Chamber of Shipping and one of the Panelists; Vicky Haastrup, chairman,<br />

Seaport Terminal Operators of Nigeria (STOAN) and executive vice chairman, ENL Consortium.<br />

“For instance, after concession,<br />

the terminal operators<br />

were supposed to meet<br />

a terminal with power and<br />

water supplied by the government.<br />

But, the reversed<br />

was the case as operators’<br />

operational cost increased as<br />

a result of sinking boreholes,<br />

acquiring generators and<br />

building power turbine. This<br />

added unanticipated cost on<br />

the operators,” he noted.<br />

Earlier in his opening remarks,<br />

Taiwo Afolabi, executive<br />

vice chairman of SIFAX<br />

Group in whose honour the<br />

conference was held, said<br />

that the issue of cost and<br />

charges at the port, has remained<br />

a major concern to<br />

service providers, port users<br />

and agencies at the ports.<br />

Represented by Mariam<br />

Afolabi, the SIFAX boss wondered<br />

what the appropriate<br />

cost and charge system that<br />

suit the port should be especially<br />

when the exchange<br />

rate during port concession<br />

was between N125-N130 to<br />

the dollar as against the current<br />

N362 to the dollar.<br />

Rhetorically, Afolabi<br />

questioned the right percentage<br />

the cost of services<br />

and charges should be adjusted<br />

to suit the economic<br />

realities in terms of exchange<br />

rate.<br />

At the end of conference,<br />

stakeholders agreed that<br />

having an un-bias umpire<br />

was needed to deal with<br />

the issue of port charges.<br />

Here, the regulator will be<br />

responsible for dealing with<br />

the issue around the legality<br />

of port charges and ensuring<br />

that charges have bearing on<br />

the economic realities.<br />

Also, they say there was<br />

need for political will to deal<br />

with the issue of cost in our<br />

ports such that the designated<br />

economic regulator<br />

will be backed with an act of<br />

the National Assembly.<br />

Sadly, the National Assembly<br />

started the process<br />

off enacting the Ports and<br />

Harbour bill, which has<br />

passed first, second and<br />

third readings, and requiring<br />

only concurrent reading<br />

by both Houses as well as<br />

Presidential Asset for the<br />

bill to become law, but one<br />

year after, nothing has been<br />

done on it.<br />

In addition, there is need<br />

to ensure that proper rates<br />

are set and players play by<br />

the rules, while the NPA<br />

needs to enthrone competition<br />

into terminal operation<br />

because free operation allow<br />

consumers to make choice<br />

and have better pricing.


Wednesday <strong>22</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

C002D5556<br />

BUSINESS DAY<br />

Tax Issues<br />

33<br />

Revisiting 16% tax-to-GDP ratio target<br />

… Analysts say target possible, signposts more work for FIRS<br />

IHEANYI NWACHUKWU & BUNMI BAILEY<br />

The Federal Inland Revenue<br />

Service (FIRS) target of increasing<br />

Nigeria’s tax-to-GPD to 16<br />

percent may sound wishful,<br />

but it is achievable according<br />

to analysts.<br />

If FIRS is able to achieve its projected<br />

targets, it would improve the country’s<br />

poor status of being one of the lowest taxto-GDP<br />

ranked in the world and be able to<br />

reach the rank of its peer African countries.<br />

According to World Bank, Nigeria’s tax<br />

to GDP ratio at 6percent is one of the poorest<br />

in Africa, which is significantly lower<br />

than Kenya (15.7 percent), South Africa at<br />

27percent; Ghana and Egypt at 16 percent<br />

and Morocco at <strong>22</strong> percent.<br />

“I think the target is more of an aspiration<br />

than actual reality. To grow tax revenue<br />

level from the current 6 percent to 16<br />

percent means that there will be about 200<br />

percent jump from where we are. Though<br />

something similar was achieved in Lagos<br />

but that is different because Lagos is small<br />

compare to the whole of Nigeria,” Bismarck<br />

Rewane, CEO, Financial Derivatives Company<br />

Limited said in a telephone response.<br />

“But it is doable given Fowler pedigree<br />

and what he has done in the past; we cannot<br />

rule it out completely. So it is possible,”<br />

Automating the processes of applying,<br />

documenting and defending<br />

transfer prices is clearly attractive,<br />

but is it feasible? The short answer is<br />

yes, writes Laurette von Grambusch and<br />

Ariana Kosyan<br />

Tax professionals should be aware that<br />

blockchain technology has the potential<br />

to revolutionize the taxation of transactions<br />

as well as their record-keeping, but<br />

we believe the technology even has the<br />

potential to automate many processes<br />

within the transfer pricing world. But first,<br />

a few blockchain basics.<br />

The signal achievement of blockchain<br />

technology is enabling the secure transfer<br />

of digital assets without a central<br />

authority, bank or any other mediator<br />

between the two parties to a transaction.<br />

A peer-to-peer network of computers<br />

equipped with cryptographic algorithms<br />

examines each new transaction, comes<br />

to a “consensus” about its validity, and<br />

either validates or rejects it. A nearly<br />

real-time record of transactions taking<br />

place through the network is visible to all<br />

participants, achieving unprecedented<br />

transparency.<br />

Three types of blockchains<br />

Public blockchains such as the ones<br />

that host cryptocurrencies require tremendous<br />

processing power.<br />

Companies wanting a smaller network<br />

create private blockchains, granting<br />

permissions to participants: read<br />

only, limited transactions, etc., as in a<br />

traditional corporate database. Notice<br />

that the company must re-introduce the<br />

central authority itself, but still benefits<br />

from blockchain’s unique accuracy and<br />

transparency, potentially also permitting<br />

Rewane concluded.<br />

Minister of Finance, Kemi Adeosun,<br />

said in an interview earlier this year in New<br />

York that Federal Government has made it<br />

as a focus to improve “our tax to GDP ratio<br />

from 6 percent where it currently is to par<br />

with other African countries.”<br />

“Most developed countries have 30 percent.<br />

So Nigeria’s 6 percent is very low. So<br />

we need to correct that and we have driven<br />

a number of initiatives to do this. We have<br />

Blockchain relevant for tax and transfer pricing<br />

real-time auditing by regulators.<br />

Finally, there is the consortium blockchain,<br />

common in banking, which may<br />

grant reading rights to many people or<br />

even everyone, but which limits the consensus<br />

mechanism to a few trusted parties,<br />

achieving faster processing.<br />

All three blockchain types support<br />

“smart contracts,” computer programs<br />

that self-execute the terms of an agreement<br />

when predefined conditions are met<br />

by transacting parties, greatly reducing<br />

or eliminating the costs of coordination,<br />

monitoring and enforcement. This is<br />

one of the features that differentiates a<br />

blockchain from a traditional database<br />

or an enterprise resource planning (ERP)<br />

system.<br />

A multitude of blockchain applications<br />

is springing up, and governments are<br />

thinking that blockchains can help address<br />

some of the challenges of taxing the<br />

digital economy. Estonia, Luxembourg,<br />

Singapore and India are among the first<br />

movers, and developing countries hope<br />

blockchain technology can help them<br />

leapfrog more-developed economies.<br />

In other words, if you have not seen it<br />

yet, you are likely to see blockchain soon<br />

on a cloud near you.<br />

Potential applications for transfer<br />

pricing<br />

Given the characteristics of blockchain,<br />

it’s not surprising that tax professionals<br />

are intuitively accepting the idea<br />

that value-added taxes (VATs) and other<br />

transaction taxes are candidates for management<br />

on a blockchain. How about<br />

transfer pricing?<br />

Considering the complexity of intercompany<br />

transactions and governments’<br />

set ourselves a target, we want to pursue<br />

that aggressively and all the revenue generating<br />

agencies especially Federal Inland<br />

Revenue Service (FIRS), States Internal<br />

Revenue Service are being equipped to<br />

really take on that task and we expect that<br />

to yield result,” she said.<br />

Speaking at a Greenwich Trust limited<br />

(GTL) event on <strong>Aug</strong>ust 3, <strong>2018</strong>, the chairman,<br />

FIRS, Babatunde Flower said, “Nigeria’s<br />

tax-to-GDP ratio is rising and should<br />

demand for transparency, automating<br />

the processes of applying, documenting<br />

and defending transfer prices is clearly<br />

attractive, but is it feasible?<br />

The short answer is yes. There is no<br />

reason a multinational enterprise (MNE)<br />

could not reliably use blockchain to<br />

track its intercompany transactions and<br />

to make payments according to preestablished,<br />

arm’s-length conditions via<br />

smart contracts, when the necessary conditions<br />

are met. Intangible assets could<br />

be tokenized, with a token representing<br />

the entire intangible asset or a defined<br />

fraction of it.<br />

This could prove especially valuable<br />

for transactions involving shared asset<br />

ownership, cost contribution arrangements<br />

and the application of profit split<br />

methods. Companies could also use<br />

blockchain technology to optimize intragroup<br />

treasury transactions including<br />

intra-group current accounts, cash pooling,<br />

other types of lending transactions<br />

and guarantees, among others.<br />

If a company’s vendors and customers<br />

are also invited to join a private blockchain,<br />

it can track and display an entire supply<br />

chain, complete with documentation and<br />

real-time visibility of all its transactions.<br />

It’s even possible that with blockchain’s<br />

increasing adoption, new sources of bigger<br />

and better data will enable a more<br />

frequent application of the comparable<br />

uncontrolled price method for establishing<br />

arm’s-length prices between MNEs<br />

and their subsidiaries and related groups.<br />

Tax needs to jump in<br />

While blockchain enthusiasm is still<br />

mostly in technology and cryptocurrency<br />

circles, the tax function needs to be an<br />

hit 16 percent to 20 percent by 2020.”<br />

Federal Inland Revenue Service (FIRS)<br />

according to <strong>BusinessDay</strong> calculations<br />

would need to generate tax revenue of<br />

N11.1 trillion, representing 176.8 percent<br />

increase from the N4trillion revenue the<br />

Service generated at the end of 2017 to<br />

achieve 16 percent tax-to-GDP target by<br />

2020 from the current estimated 6 percent.<br />

“Non-oil tax collection in Nigeria is<br />

presently very weak and well below the<br />

levels of structural and regional peer<br />

countries,” Hafez Ghanem, vice president,<br />

World Bank, said in an interview with<br />

BBGAfrica<br />

Johnson Chukwu, CEO, Cowry Asset<br />

Management Limited said,“ The target may<br />

be achievable in the long run if we continue<br />

to improve our tax collection net, improve<br />

our tax effectiveness and sanction those<br />

that fail to pay their taxes, then our taxto-<br />

GDP ratio will be increasing. Whether<br />

we achieve the 16-20 percent target is<br />

debatable.”<br />

The Voluntary Assets and Income Declaration<br />

Scheme (VAIDS) is one of the key<br />

policies being used by the Federal Government<br />

to reposition the Nigerian economy<br />

and correct inherited underdevelopment.<br />

In June, the Federal Government said<br />

that they had recovered about N30 billion<br />

from individuals and corporate establishments<br />

through the tax amnesty scheme.<br />

early participant to resolve questions<br />

such as:<br />

How can companies’ ERP data be made<br />

fit for blockchain?<br />

How will tax compliance change with<br />

blockchain?<br />

How will the scope of work with accountants<br />

and auditors change?<br />

Will blockchain solutions, potentially<br />

also cloud-based, be compatible with the<br />

bookkeeping requirements and regulations<br />

in each jurisdiction?<br />

While the technology is deemed to<br />

be secure, or at least more secure than<br />

others, questions around the correctness<br />

of the content remain. Governments<br />

may be eager to embrace greater<br />

transparency and the potential to perform<br />

real-time tax audits. But they may<br />

also be wary about the potential downsides,<br />

wondering if the use of private<br />

or consortium blockchains will indeed<br />

provide appropriate information and<br />

how harmful leaks of stored information<br />

may be prevented to comply with<br />

traditional secrecy for tax matters.<br />

So far, blockchain technology has<br />

received sensible praise and skepticism.<br />

We are thrilled by the challenge of understanding<br />

its promising implications for<br />

the tax world, and we urge our colleagues<br />

in the tax function to join in shaping this<br />

exciting future.<br />

Laurette von Grambusch is an associate<br />

partner in the International<br />

Tax practice of Ernst & Young GmbH<br />

Wirtschaftsprüfungsgesellschaft in<br />

Frankfurt, Germany; Ariana Kosyan is<br />

a senior manager in the Tax, Technology<br />

and Transformation practice of Ernst &<br />

Young LLP in London, United Kingdom.


PrivateEquity<br />

& fundraising<br />

34 BUSINESS DAY C002D5556 Wednesday <strong>22</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

Why Eaton bought 4% NEM insurance stake in N520mn deal<br />

LOLADE AKINMURELE<br />

Eaton Acquisitions<br />

Limited,<br />

an investment<br />

company that<br />

focuses on identifying<br />

listed companies<br />

with high growth potential<br />

and investing, has announced<br />

the completion<br />

of the purchase of 130<br />

million shares of NEM Insurance<br />

Plc, meaning the<br />

Nigeria-based investment<br />

firm now holds a 4 percent<br />

stake in the insurer.<br />

The purchase was made<br />

at N4 per share, representing<br />

a 40.35 percent premium<br />

over the insurance<br />

company’s closing price<br />

of N2.85 Monday. At N4,<br />

130 million shares is worth<br />

N520 million.<br />

The trade was negotiated<br />

between Stanbic<br />

IBTC stockbrokers, and<br />

TRW Stockbrokers, representing<br />

the seller and the<br />

buyer respectively.<br />

Olaleye Adeyinka,<br />

managing director and<br />

chief executive officer of<br />

Eaton said, “Our company<br />

seeks to acquire a strategic<br />

stake in companies with<br />

compelling growth trends<br />

in the last couple of years<br />

and NEM neatly falls into<br />

this category hence our<br />

interest in the Company.”<br />

“We intend to build a<br />

substantial stake in the<br />

company as our Board has<br />

approved the purchase of<br />

up to 10% of the company’s<br />

shares.<br />

“We have had positive<br />

interactions with the<br />

management of NEM and<br />

look forward to supporting<br />

the company to continue<br />

achieving consistent stellar<br />

performance,” Adeyinka<br />

said.<br />

Adeyinka stated that<br />

“we are long-term investors<br />

and believe that our<br />

confidence in the potentials<br />

and valuation of NEM<br />

is justified,” explaining the<br />

significant premium the<br />

company paid on the purchase.<br />

The “NEM” attraction<br />

Eaton Acquisitions Ltd<br />

is an investment company<br />

that focuses on identifying<br />

listed companies with<br />

high growth potentials and<br />

investing in the equities of<br />

such firms, for the purpose<br />

of enjoying capital appreciation<br />

as well as high<br />

dividend yields.<br />

Put into context, it is<br />

easy to see why Eaton was<br />

attracted to NEM insurance.<br />

NEM insurance was the<br />

best performing company<br />

amongst other companies<br />

on the NSE insurance<br />

index based on average<br />

growth in earnings in the<br />

past 5 years, according to<br />

Business Day analysis.<br />

The NSE Insurance index<br />

comprises of the most<br />

capitalised and liquid insurance<br />

companies. The<br />

index is designed to present<br />

a benchmark of the<br />

performance of the sector.<br />

NEM insurance saw<br />

its profits grow impressively<br />

by 603 percent from<br />

N395.06 million in 2013<br />

to N2.77 billion in 2017<br />

making the company seat<br />

comfortably on the top of<br />

the chart.<br />

In that period, the insurance<br />

company also saw its<br />

share price grow by 144<br />

percent, topping the chart<br />

as the best performing<br />

stock in the index. Stock<br />

price for the company grew<br />

from N0.68 in 2013 to N1.66<br />

in 2017.<br />

NEM’s average earnings<br />

growth lags its share price<br />

growth. This may lead to<br />

further share price gains<br />

in the future if investors<br />

determine that.<br />

The insurer’s stock price<br />

is currently up by almost 80<br />

percent, helping it top the<br />

chart of best performing<br />

insurance companies on a<br />

year to date basis.<br />

In the last 5 years,<br />

NEM’s total revenue grew<br />

8 percent on average with<br />

significant increase of 14<br />

percent between 2016 and<br />

2017. Also, claim expenses<br />

of the company declined by<br />

9 percent over the period<br />

under review.<br />

Perhaps its not so difficult<br />

to see why Eaton<br />

has made a move on NEM<br />

insurance as it adequately<br />

ticks all the boxes of the former’s<br />

investment strategy.<br />

<strong>BusinessDay</strong> PRIVATE EQUITY & FUNDRAISING (Team lead: LOLADE AKINMURELE - Analysts: MICHEAL ANI, DIPO OLADEHINDE, ENDURANCE OKAFOR, DAVID IBEMERE ... Graphics: samuel iduh )<br />

Businessday’s Private Equity and Fundraising section is a weekly publication that provides in-depth analysis on private equity trends and tracks deal activity in Nigeria.<br />

Email the PE & F team loladeakinmurele@gmail.com<br />

Continues on page 34


Wednesday <strong>22</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

PrivateEquity<br />

&fundraising<br />

MTN has no plans to sell<br />

stake in online retailer Jumia<br />

BUNMI BAILEY<br />

MTN Group,<br />

Africa’s biggest<br />

mobile<br />

operator, said<br />

on Thursday<br />

it has no plans to sell its investment<br />

in online shopping<br />

platform Jumia.<br />

“We currently have no<br />

plans to dispose of our investment<br />

in Jumia in the short<br />

term,” MTN Group spokeswoman<br />

said in an emailed<br />

response to questions,” MTN<br />

said<br />

This comes after Bloomberg,<br />

a foreign media agency<br />

reported that MTN is exploring<br />

a sale of shares in Jumia<br />

and was considering an initial<br />

public offering of the online<br />

retailer on the Nasdaq or New<br />

York Stock Exchange.<br />

MTN Group Ltd. is exploring<br />

a sale of shares in African<br />

online retailer Jumia and values<br />

the company at as much<br />

as $1 billion, according to people<br />

familiar with the matter.<br />

Africa’s largest wireless<br />

carrier is considering an initial<br />

public offering of the Amazon.<br />

Mines, a fintech<br />

startup that<br />

has developed<br />

a techenabled<br />

platform<br />

which allows partners in<br />

emerging markets to dispense<br />

credit, and subsequently tackle<br />

the challenge of little or no<br />

access to formal credit has<br />

closed a Series A round of $13<br />

million to fund operations in<br />

emerging markets.<br />

The funding round was<br />

led by The rise Fund, a global<br />

fund managed by TPG<br />

Growth. Also participating<br />

are Velocity Capital, Western<br />

Technology Investments,<br />

First Ally Capital, X/Seed<br />

Capital, NYCA Partners, Persistent<br />

capital, Singularity<br />

Investments, Trans Sahara Investments,<br />

and the Bank of<br />

Industry (BoI).<br />

Mines which has tested<br />

its platform in Nigeria, in-arguably<br />

one of the toughest<br />

markets in the world, says that<br />

this has spurred it to expand<br />

into similar markets, and will<br />

use its investment for talent acquisition<br />

, continued growth in<br />

Africa, and expansion to South<br />

America and South-East Asia.<br />

The Fintech Company provides<br />

a Credit-as-a-Service<br />

digital platform that enables<br />

institutions in emerging markets<br />

to offer credit products<br />

com Inc.-style business on the<br />

Nasdaq or New York Stock<br />

Exchange, said the people,<br />

who asked not to be named<br />

as the information isn’t public.<br />

Johannesburg-based MTN<br />

is the biggest shareholder<br />

in Jumia with a 40 percent<br />

stake, and smaller investors<br />

including German startup<br />

backer Rocket Internet SE<br />

are also open to selling stock,<br />

they said.<br />

Another option under<br />

consideration is a private sale<br />

of shares to new investors, according<br />

to the people. Jumia<br />

currently has an estimated<br />

enterprise value of about $1<br />

billion, they said, and has<br />

grown sales by between 70<br />

Mines closes $13m series A funding<br />

for digital credit platform growth<br />

Jumoke Akiyode-Lawanson<br />

COMPANIES & MARKETS<br />

to their customers; no smartphone<br />

is required. Leveraging<br />

their own data sets, domestic<br />

institutions are able to serve<br />

loans to customers ignored by<br />

available credit systems and<br />

open up entirely new revenue<br />

opportunities.<br />

According to Emeka Nwokah,<br />

CEO Mines, “There are<br />

more than 3 billion adults globally<br />

without access to credit.<br />

Our vision is that every one of<br />

them will have instant access<br />

to credit in the next 10 years.”<br />

“We believe the best way<br />

to realize this vision is to partner<br />

with banks, retailers and<br />

mobile operators and power<br />

digital credit products tailored<br />

to their markets so they can<br />

create the customers of tomorrow,<br />

today,” he adds.<br />

By mining high-volume<br />

data like phone records, bank<br />

records, and payment transactions<br />

in real-time, Mines<br />

can instantly assess credit risk<br />

in markets that lack robust<br />

credit bureau infrastructure. It<br />

then integrates its risk models<br />

with identity, origination, payments,<br />

loan lifecycle management,<br />

and customer service to<br />

form a holistic platform. The<br />

net result is a seamless user<br />

experience where partners’<br />

customers can apply for and<br />

receive a loan in less than 60<br />

seconds or make instant purchases<br />

with virtual or physical<br />

credit cards.<br />

can countries, and has added<br />

platforms for online hotel<br />

bookings and food delivery.<br />

A successful listing could<br />

help MTN reduce debt,<br />

which increased to 69.8 billion<br />

rand ($4.8 billion) as of<br />

the end of June, compared<br />

with 57.1 billion rand six<br />

months earlier. The rising<br />

liabilities contributed to a<br />

share-price slump when the<br />

carrier reported half-year<br />

earnings last week. The stock<br />

has fallen 27 percent this<br />

year, close to eight-year lows,<br />

valuing the company at 190<br />

billion rand.<br />

MTN operates in 21 countries<br />

across Africa and the<br />

Middle East. Nigeria is its<br />

biggest market with about 55<br />

million customers.<br />

Only about a third of Africa’s<br />

1.2 billion people have<br />

access to the internet, providing<br />

plenty of potential growth<br />

for Jumia as a listed company,<br />

said one of the people.<br />

Other Jumia shareholders<br />

include Goldman Sachs<br />

Group Inc., Millicom International<br />

Cellular SA and<br />

Orange SA.<br />

…plans to push funds into talent acquisition in emerging markets<br />

The company has hardened<br />

its proprietary technology<br />

in Nigeria where it has<br />

been used by over 1 million<br />

customers since launching in<br />

2017. It is now potentially a<br />

leading provider of consumer<br />

credit in the country, counting<br />

mobile operators 9mobile and<br />

Airtel, payment processors<br />

Interswitch and NIBSS, along<br />

with several banks amongst<br />

its partners.<br />

“What we have done differently<br />

is take Silicon Valley technology<br />

and built it into a product<br />

that is robust enough for<br />

emerging markets like Nigeria,<br />

Brazil, or Indonesia”, says Kunle<br />

Olukotun, Chief Scientist. “We<br />

can extend credit to all types of<br />

customers, including customers<br />

without smartphones or<br />

even bank accounts as these<br />

are the people who need credit<br />

the most.”<br />

As part of the financing,<br />

Yemi Lalude from TPG Growth<br />

and Willem Willemstein from<br />

Velocity Capital have joined<br />

Mines’ Board of Directors.<br />

Lalude says, “Mines combines<br />

world-class artificial<br />

intelligence and extensive use<br />

of data with a strong focus on<br />

local partnerships to build<br />

financial inclusion. We are<br />

excited to partner with them<br />

to drive financial access across<br />

the world.”<br />

Mines started out as a research<br />

project on high perforpercent<br />

and 90 percent annually<br />

since its inception in 2012.<br />

MTN “currently has no<br />

plans to dispose of its investment<br />

in Jumia in the short<br />

term,” a spokeswoman said<br />

in emailed comments Thursday.<br />

Jumia and Rocket declined<br />

to comment.<br />

Jumia was set up by<br />

French entrepreneurs Sacha<br />

Poignonnec and Jeremy<br />

Hodara in Lagos, Nigeria’s<br />

commercial capital, to take<br />

advantage of rising internet<br />

use in Africa and a lack of<br />

availability of consumergoods<br />

items such as designer<br />

watches and sunglasses. It<br />

has grown to have e-commerce<br />

operations in 14 Afrimance<br />

artificial intelligence<br />

led by Olukotun, a professor<br />

of computer engineering at<br />

Stanford University. It came to<br />

life after a chance meeting with<br />

Nwokah, a computer scientist<br />

working on big data projects<br />

at Amazon Web Services, after<br />

which they teamed up to direct<br />

the technology towards solving<br />

the grand challenge of financial<br />

access. Both founders grew<br />

up in Africa and understand<br />

the challenges facing technology<br />

companies trying to solve<br />

problems in emerging markets<br />

without a deep respect for the<br />

complexities of local culture,<br />

knowing they need to take<br />

a different approach. They<br />

have been joined by VP Commercial<br />

Adia Sowho, who has<br />

successfully scaled several<br />

digital financial services at one<br />

of Nigeria’s largest mobile operators,<br />

to grow the business.<br />

Sowho says “Scaling a<br />

digital product in Africa requires<br />

a deep understanding<br />

of two things – distribution<br />

and partnerships. In Nigeria,<br />

Mines has demonstrated that<br />

its platform is flexible enough<br />

to enable partners with consumer<br />

reach across the income<br />

pyramid, activate a wide swath<br />

of distribution channels, from<br />

rudimentary USSD to more<br />

advanced web-based ones.<br />

We look forward to building<br />

more partnerships in Nigeria<br />

and beyond”.<br />

C002D5556<br />

BUSINESS DAY<br />

Abraaj health fund investors tap<br />

AlixPartners to oversee breakup<br />

LOLADE AKINMURELE<br />

35<br />

Global management firm AlixPartners said it<br />

has been appointed by investors in the $1<br />

billion Abraaj Growth Markets Health Fund<br />

(AGHF), which include the Bill and Melinda Gates<br />

Foundation, CDC, and International Finance Corporation<br />

(IFC), to oversee the fund’s break up from<br />

the scandal-tainted Abraaj Group.<br />

In a statement last week, AlixPartners said it was<br />

working alongside the fund’s senior operational<br />

team and the provisional liquidators of Abraaj<br />

Investment Management Limited in search for a<br />

permanent replacement investment manager to<br />

manage the fund and ensure its continuity in delivering<br />

accessible, affordable and quality healthcare<br />

in developing countries.<br />

AlixPartners is the latest to be added to a growing<br />

list of consultancies brought in to sift through<br />

the wreckage of the Abraaj collapse, with Deloitte<br />

meanwhile tapped by regulators in Dubai.<br />

Colony Capital, TPG and Cerberus Capital Management<br />

were previously reported to be among<br />

those in the running for the AGHF.<br />

The AGHF provides affordable, quality healthcare<br />

to under-served low and middle-income<br />

patients throughout Sub-Saharan Africa and South<br />

Asia, with performance measured by both financial<br />

returns and development impact metrics.<br />

The fund has made a total of nine investments<br />

that include 25 operating hospitals, 17 clinics and<br />

32 diagnostic centres covering 1.9 million patients<br />

in India, Pakistan and Kenya, according to its website.<br />

Abraaj Holdings, once one of the developing<br />

world’s most influential investors which holds<br />

investments worth over $2 billion in sub-Saharan<br />

Africa alone, successfully filed for provisional<br />

liquidation in the Cayman Islands last month after<br />

battling allegations of misused funds.<br />

Abraaj, which once managed nearly $14 billion,<br />

started to come under closer investor scrutiny<br />

when it was accused earlier this year by institutional<br />

investors including the Bill & Melinda Gates<br />

Foundation of mismanaging the healthcare fund<br />

aimed at investing in hospitals and clinics in parts<br />

of Asia and Africa.<br />

The buyout firm’s woes aggravated when a pension<br />

fund based in Kuwait said in a legal filing that<br />

Abraaj was unable to repay a $100 million loan and<br />

asked that the firm be liquidated. Auctus, another<br />

creditor, said the firm owes it around $300 million.<br />

Following these developments, Abraaj filed for<br />

provisional liquidation to get time for debt restructuring.<br />

Initially slated last month to step in as interim<br />

fund manager after a period of earlier consultation<br />

with investors, the AlixPartners appointment had<br />

been delayed due to the liquidation order, but the<br />

firm will now seek to “ensure continuity and build a<br />

stable platform for the future,” Simon Appell, Managing<br />

Director for AlixPartners in London, said.<br />

“The Abraaj Growth Markets Health Fund is<br />

helping to deliver accessible, affordable and quality<br />

care for low and middle-income people in 10 of<br />

the largest cities in Sub Saharan Africa and South<br />

Asia, and we want to see that continue,” Appell<br />

stated.<br />

w“We are delighted that investors continue to<br />

support and finance the fund as it goes through<br />

this transition and thank management, portfolio<br />

company founders, and advisors for their assistance<br />

and support of the Fund’s mission.”


36 BUSINESS DAY<br />

Wednesday <strong>22</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

Opinion<br />

Who is scared of public opinion...<br />

Continued from back page<br />

for a poll or survey? As far as<br />

social research is concerned,<br />

it is simply impracticable<br />

to have access to the entire<br />

180 million Nigerians, unless<br />

you’re on a mission to conduct<br />

a census. Census studies<br />

don’t come cheap. Nigeria’s<br />

last census was conducted in<br />

2006, and ought to be repeated<br />

every 10 years; however, due<br />

to financial constraints the<br />

country missed its 2016 census<br />

target and is still shopping<br />

for funds to conduct a fresh<br />

census. Notwithstanding,<br />

if the total population isn’t<br />

accessible, then we can rely<br />

on a research population. A<br />

research population is a welldefined<br />

collection of individuals<br />

or objects that have similar<br />

characteristics to the universe<br />

(total population), from which<br />

samples can be drawn for a<br />

poll. The next issue is then<br />

how the samples are drawn.<br />

Samples have to be selected<br />

randomly from the population.<br />

In other words, samples<br />

should be selected in such a<br />

way that every individual or<br />

object within the research<br />

population has an equal opportunity<br />

of being selected.<br />

This is called the principle of<br />

randomization.<br />

The concept of sampling<br />

As a pollster, one question<br />

I typically get asked borders<br />

on the issue of sample size –<br />

how can a mere 1,000 or 5,000<br />

sample size poll tell us what<br />

over 180 million Nigerians<br />

are thinking on a particular<br />

issue? My constant response<br />

to those who ask is simple –<br />

it isn’t about the size of the<br />

sample, but the selection of<br />

the sample. As we often quip<br />

in polling parlance, when you<br />

fall ill and visit the hospital,<br />

the lab scientist doesn’t need<br />

to draw out your entire blood<br />

to check what’s wrong with<br />

you. He simply takes a tiny<br />

little blood sample for the<br />

test. This is the exact principle<br />

applied in public opinion<br />

polling. We mustn’t sample<br />

1 Million Nigerians to know<br />

what Nigerians think on any<br />

matter. This concept has long<br />

been established in social sciences.<br />

In 1936, it was Gallup<br />

who demystified polling and<br />

dealt a major upset on the US<br />

presidential election prediction<br />

of Literary Digest. The<br />

magazine had sent out over 2<br />

million dummy ballots from<br />

vehicle registration database<br />

and telephone directories, at<br />

considerable time and cost,<br />

in order to predict the election<br />

result. Gallup, on the other<br />

hand, used a sample of only<br />

5,000 to predict that Roosevelt<br />

would take the lead in at least<br />

40 states and carry the popular<br />

vote by 56 percent to 44<br />

percent margin. Needless to<br />

say, it was a humiliating upset<br />

for Literary Digest, as Gallup<br />

succeeded in establishing<br />

that as far as survey sample<br />

size is concerned, more isn’t<br />

always better. Therefore, a<br />

scientifically selected sample<br />

of the general population was<br />

not only much cheaper and<br />

easier to handle, it would produce<br />

more accurate results.<br />

Good vs bad polls<br />

Without sounding academic,<br />

there are certain features<br />

that ought to be reported<br />

in poll reports to be ticked<br />

as good. Conversely, where<br />

they do not exist, the findings<br />

of such polls can simply<br />

be considered as bad polls.<br />

Organizations like American<br />

Association for Public<br />

Opinion Research (AAPOR)<br />

and the National Council<br />

for Public Polls (NCPP) have<br />

provided certain standards<br />

of disclosure to guide polling<br />

firms. While journalists and<br />

poll consumers may not be<br />

able to tell or assess the quality<br />

control criteria adopted on the<br />

poll; it is expected that good<br />

polls should provide information<br />

regarding:(1) Sampling<br />

(from what population was<br />

the sample selected?was data<br />

collected using a random or<br />

non-random sample? How<br />

many interviews were completed?),<br />

(2) Data collection<br />

(how was data collected? Was<br />

data collected using face-toface,<br />

telephone, web-based<br />

or SMS technique? (3)Question<br />

wording (were questions<br />

worded in a clear and neutral<br />

manner?), (4) Fielding dates<br />

(what were the specific dates<br />

of data collection?), and (5)<br />

Response rate (some sense<br />

of how many people were<br />

contacted and how many<br />

responded is always useful).<br />

I find most poll consumers<br />

are unaware of these<br />

features,consequently poll<br />

results and reports are simply<br />

interpreted based on the<br />

reader’s premonition and<br />

worldview. In Nigeria for instance,<br />

politicians are quick<br />

to celebrate polls that seem<br />

to be in line with their predisposition,<br />

and shoot down<br />

polls that do not conform.<br />

They are partly responsible<br />

for the proliferation of fake or<br />

bad polls, which seek to support<br />

their political leanings.<br />

Interestingly, there’s usually<br />

Remaking the university tradition: The town and gown...<br />

a seasonal upsurge in opinion<br />

polling activities and report released<br />

during an election year;<br />

and as we build up to 2019<br />

elections there would be many<br />

fly-by-night pollsters on the<br />

loose. The questions for discerning<br />

consumers of opinion<br />

poll reports should be – where<br />

have these pollsters been before<br />

now? Should we assume<br />

they are new or budding polling<br />

firms? And if they are, great!<br />

But would they continue their<br />

polling services after elections<br />

have come and gone?<br />

So, when next youfind<br />

yourself consuming the report<br />

from a public opinion<br />

poll, just before you hail it or<br />

shoot it down, depending on<br />

your socio-political leaning,<br />

be sure to spend a few more<br />

minutes to ascertain how it<br />

was conducted using some<br />

of the tips discussed above.<br />

That way, you would be better<br />

armed to judge for yourself if<br />

the poll should be given some<br />

attention or simply discarded<br />

as a mere academic exercise.<br />

Continued from back page<br />

the Universities of Ibadan<br />

and Ife, and the world class<br />

scholarship of intellectuals<br />

like Professors Biobaku,<br />

Aboyade, Aluko, Mabogunje,<br />

and others, into a<br />

regular Regional Economic<br />

Planning Advisory Committee<br />

(the A Club) and an<br />

Administrative Research<br />

Group. These two groups<br />

contained intellectually<br />

sound scholars and administratively<br />

experienced<br />

public officers whose sole<br />

responsibility was to dedicate<br />

time to analytic thinking<br />

and reflection on critical<br />

issues agitating the civil<br />

service at any given time.<br />

It would be difficult to<br />

convince any serious students<br />

of administrative<br />

history in Nigeria that the<br />

Awolowo-Adebo model<br />

that led to the transformation<br />

of the old Western<br />

region did not owe a significant<br />

debt to the sound<br />

insights Adebo was able<br />

to generate about the best<br />

administrative scenarios<br />

that ought to lead from<br />

policy conception to policy<br />

implementation for the<br />

government. And so for a<br />

long time, the big question<br />

for me has remained: If the<br />

town and gown strategy<br />

could work for the civil service,<br />

why not the university<br />

as an institutional platform<br />

for converting ideas, insights,<br />

discourses, debates,<br />

ideologies and paradigms<br />

into concrete development<br />

scenarios and alternatives<br />

from which the Nigerian<br />

government could choose?<br />

The town and gown collaboration<br />

is an idea that<br />

is too obvious to be called<br />

a truly revolutionary strategy.<br />

In other words, it is an<br />

idea that has been around<br />

for a long time now. It is<br />

one of the significant traditions<br />

around which Western<br />

universities are built.<br />

The truly astounding issue<br />

is that we have neglected<br />

its fundamental significance<br />

for far too long. And<br />

so we return to the idea of<br />

neighbourhood raised by<br />

Alice Waters. A university is<br />

sited in a specific context.<br />

And its relevance is determined<br />

by that context,<br />

and the university’s relationship<br />

with it. The first<br />

challenge therefore is how<br />

is the university situated,<br />

and what are the dynamics<br />

of its situatedness. If, for<br />

instance, a university, like<br />

the Ahmadu Bello University,<br />

Zaria is situated in the<br />

context of desertification,<br />

monarchical aristocracy<br />

and religious fundamentalism<br />

in the North, what<br />

are the expectations of the<br />

university’s situatedness?<br />

If another university like<br />

the Imo State University<br />

is grounded in a context<br />

of ecological degradation,<br />

what are we to expect from<br />

it?<br />

The neighbourhood of<br />

the university however<br />

goes beyond the dynamics<br />

of where it is situated.<br />

In a fundamental sense,<br />

it calls on the significant<br />

elements of the town to<br />

participate in its reflections<br />

on the state of affairs<br />

of the neighbourhood. It<br />

is a measure of arrogance<br />

that makes a university<br />

thinks that it has sufficient<br />

capacity to impose<br />

its thoughts and paradigms<br />

on the society without a<br />

corresponding collaboration<br />

with that society. The<br />

town and gown initiative<br />

ensures that the university<br />

draws on professional and<br />

scholarly elements to buttress<br />

its relevance towards<br />

the society. The university,<br />

in other words, engages<br />

with the society by inviting<br />

the society to engage with<br />

it. The city and the town<br />

have their own logic and<br />

rationality. The university<br />

has its own modus operandi.<br />

The critical point is<br />

to look for a mutual point<br />

of synergy. And that point<br />

is provided by what we can<br />

call the relevance factor.<br />

For a university to become<br />

a relevant sociopolitical<br />

institution, it must necessarily<br />

draw into itself<br />

thoughts, alternatives and<br />

contrary ideas that have<br />

the capacity to enliven and<br />

further reflections about<br />

the state of development<br />

in Nigeria. It must draw<br />

non-academic individuals,<br />

civil society elements,<br />

industries, organizations,<br />

and other sundry forces<br />

and counterforces.<br />

The cogent premise is<br />

that Nigeria’s postcolonial<br />

development impasse is<br />

too fundamental to be left<br />

to the university and its<br />

scholars and academics all<br />

alone. All hands must be on<br />

deck. And the university<br />

constitutes the best platform<br />

to host ongoing conversations<br />

and discourses<br />

that have the potentials<br />

of speaking solutions and<br />

directions to the government.<br />

It is precisely in this<br />

sense that I conceive my<br />

appointment as a professor<br />

of public administration<br />

even if it were merited on<br />

the strength of contributions<br />

to scholarship. The<br />

town and gown initiative<br />

for me is a whole complex<br />

dynamics of give and take.<br />

It is both side of the conversation<br />

immediately understanding<br />

its own limitations<br />

and its comparative<br />

advantages. In my own<br />

specific instance, I see the<br />

practice of public administration<br />

in Nigeria as having<br />

a lot to say to the study of<br />

administration which the<br />

university is a custodian.<br />

And someone like me who<br />

has spent about thirty years<br />

immersed in the intricacies<br />

of bureaucratic operations<br />

also have a lot to learn<br />

from the many theoretical<br />

frameworks of public administration<br />

intellectuals.<br />

And this is notwithstanding<br />

all the books I have published<br />

as an administration<br />

scholar.<br />

The town and gown paradigm<br />

pushes theory and<br />

practice to the boundary<br />

of logical collaboration.<br />

It is simply a way of saying<br />

theory without practice<br />

is blind while practice<br />

without theory is lame. A<br />

theory, says Nehru, must<br />

be tempered with reality.<br />

That is a huge responsibility<br />

for the university.<br />

And a good way to temper<br />

theory is to facilitate<br />

an active and proactive<br />

town and gown tradition<br />

that will constantly make<br />

the university a center of<br />

combustible research and<br />

development dynamics<br />

around which can emerge<br />

a huge intellectual industry<br />

that commands the attention<br />

of the Nigerian government.<br />

This is the core<br />

of the real challenge that<br />

confronts my professorship<br />

at the Lead City University—to<br />

complement the<br />

University’s tradition of<br />

town and gown conversation<br />

by facilitating a genuine<br />

deepening that brings<br />

in many more like me.<br />

Leonardo da Vinci once<br />

remarked: “He who loves<br />

practice without theory is<br />

like the sailor who boards<br />

ship without a rudder and<br />

compass and never knows<br />

where he may cast.” I hope<br />

that with my appointment,<br />

I will be at the forefront of<br />

the consolidation of this<br />

tradition that I hope will<br />

not only involve the Lead<br />

City University and the<br />

Ibadan School of Government<br />

and Public Policy, but<br />

will also increasingly draw<br />

other significant institutions<br />

into its fold.


Wednesday <strong>22</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

C002D5556<br />

BUSINESS DAY<br />

37<br />

News Extra<br />

BMO tackles Saraki on election budget<br />

President Muhammadu<br />

Buhari could not have<br />

submitted Budget for<br />

the 2019 elections earlier<br />

than he did, because of special<br />

circumstances surrounding the<br />

request, the Buhari Media Organszation<br />

(BMO) has said.<br />

The group said that the President<br />

could not be expected to<br />

make provision for a 2019 Budget<br />

item in the <strong>2018</strong> Proposal which<br />

he actually submitted to the National<br />

Assembly in 2017.<br />

BMO issued the statement<br />

while reacting to Senate President<br />

Bukola Saraki’s claim that<br />

the budget request for the 2019<br />

elections was submitted to the<br />

National Assembly late. Speaking<br />

through his online media<br />

aide, Saraki had alleged that the<br />

Executive was tardy in the submission<br />

of the request and that<br />

the request should have been<br />

submitted along with the <strong>2018</strong><br />

Buhari<br />

Appropriation Bill.<br />

The group, in a statement<br />

jointly signed by its Chairman,<br />

Niyi Akinsiju and Secretary, Cassidy<br />

Madueke, reminded Saraki<br />

that the Budget submitted in 2017<br />

was for the <strong>2018</strong> fiscal year.<br />

“Even that was not approved<br />

by the NASS until 6 months after.<br />

In any case, INEC would have<br />

needed time to prepare for its<br />

list of election expenses for 2019.<br />

Some key factors would need<br />

to be considered; such as the<br />

actual number of elections to be<br />

held in that year, the number of<br />

registered voters, the number of<br />

political parties to participate,<br />

and security assessments for the<br />

elections depending on how politicians<br />

have heated up the polity<br />

. All these information would be<br />

needed before INEC could prepare<br />

a budget of expenses for a<br />

2019 elections and that certainly<br />

could not have accompanied the<br />

<strong>2018</strong> Budget proposal submitted<br />

in 2017”.<br />

BMO said that President Buhari<br />

does not believe in voodoo<br />

arrangements and would always<br />

work with facts and verified<br />

figures.<br />

“Besides”, said the group, “it<br />

is standard practice globally for<br />

Executive branch of government<br />

to submit for virement or supplementary<br />

budget where it finds that<br />

it has to spend money on items not<br />

captured in its current budget”.<br />

The group asserted that “what<br />

we’re seeing is a parliament using<br />

its constitutional powers to<br />

politicise a very normal process of<br />

seeking approval by the executive,<br />

all in an attempt to misinform the<br />

public and whip up sympathy for<br />

its inability to work in the common<br />

interest of the people; all<br />

because of their own personal<br />

reasons and the fear of change of<br />

their own leadership”.<br />

2019: I want to correct bad representation<br />

in my constituency, says Onyenkwere<br />

Chima Uzoma Onyekwere,<br />

a House of Representatives<br />

aspirant for Ikwuano<br />

Umuahia Federal Constituency<br />

Abia State on the platform of<br />

the All Progressives Grand Alliance<br />

(APGA), has said that if voted into<br />

power in 2019, his agenda would be<br />

in the areas of health, education/inservice<br />

training, road infrastructure,<br />

empowerment of artisans, among<br />

other incentives.<br />

Onyekwere, while briefing select<br />

newsmen on his intention to run<br />

under APGA, described the People’s<br />

Democratic Party (PDP), particularly<br />

Abia State chapter, as a party<br />

run by a cartel.<br />

The aspirant, who is an IT guru<br />

and proprietor of Linkserve, described<br />

this scenario as sad and not<br />

political, and accused all state gov-<br />

ernors of PDP of high-jacking the<br />

party machinery at their respective<br />

states, hence, the choice of some of<br />

them to try to correct issues through<br />

APGA.<br />

“The governors control the party<br />

in their states as they appoint the<br />

chairmen of the party in their states<br />

who are not elected and the President<br />

at the centre appoints the national<br />

chairman of the party. That<br />

is not politics and it is sad,” he said.<br />

According to him, “APGA is the<br />

only party that has a reflection of<br />

what a party should look like and<br />

that is why we came to APGA. The<br />

party does extremely well as a political<br />

party and giving back to the<br />

party true dividend of democracy<br />

and is a model party with room for<br />

improvement.<br />

“In Abia State, the party is very<br />

strong and people from south east<br />

have identified themselves with<br />

the party as a leading party and is<br />

formidable in Abia”.<br />

He posited that most politicians<br />

in the state were loved not because<br />

of what they have done, but because<br />

of being in political positions for a<br />

long time.”<br />

Onyenkwere assured that he has<br />

all it takes to run for the constituency<br />

seat while advising Abians to<br />

“make sure your PVC is intact. Everybody’s<br />

vote will count and that is<br />

why people are buying others’ PVC<br />

now. If your votes will not count,<br />

people will not be investing money<br />

to buy the PVCs. Your PVC will help<br />

you enthrone a proper government<br />

that can help you earn in four years<br />

more than what they will buy your<br />

PVC with.”<br />

Kwara Speaker calls for prayers ahead 2019 polls<br />

SIKIRAT SHEHU, Ilorin<br />

Speaker, Kwara State House<br />

of Assembly, Ali Ahmad<br />

has felicitated with Muslims<br />

across the world for<br />

the celebration of Eid-el-Kabir,<br />

charging them to use the festivity<br />

to pray for peace and tranquility in<br />

the country ahead the forthcoming<br />

2019 general election.<br />

Ahmad, in a congratulatory<br />

message to Muslims issued by his<br />

Special Assistant on Media, Shuaib<br />

Abdulkadir, said the conduct of<br />

2019 polls would further prove to<br />

the world how the nation’s nascent<br />

democracy has developed.<br />

He noted that series of events<br />

happening in all the nooks and<br />

crannies of the country are testament<br />

to the fact that the elections<br />

could be threatened if adequate<br />

measures are not put in place.<br />

The Speaker, therefore, enjoined<br />

Nigerians, especially Muslims to<br />

use the period to embrace the<br />

virtues of love and sacrifice for<br />

the unity and development of the<br />

country.<br />

The lawmaker noted that Eid-el-<br />

Adha is very significant to Muslim<br />

faithful owing to the unforgettable<br />

and memorable events that led to<br />

the celebration as well as its countless<br />

spiritual blessings.<br />

He tasked Muslims to celebrate<br />

with modesty and offer ceaseless<br />

prayers for the country to surmount<br />

various challenges being<br />

encountered in all sectors.<br />

The Speaker also congratulated<br />

the Emir of Ilorin and Chairman,<br />

Council of Traditional Rulers,<br />

Kwara State, His Royal Highness,<br />

Ibrahim Sulu Gambari as well as<br />

the Islamic Scholars, praying that<br />

they witness many Eid- el- Kabir<br />

with good health and sound mind.<br />

2019: Widows endorse Ayade<br />

for second term in C’River<br />

MIKE ABANG, Calabar<br />

Ahead of the 2019 general<br />

election, widows numbering<br />

over 10,000 across<br />

the Southern Senatorial<br />

District of Cross River State have<br />

pledged to ensure that Governor Ben<br />

Ayade is returned in 2019.<br />

The widows, who came under the<br />

aegis of Southern Senatorial District<br />

Widows Association, converged<br />

on the premises of the Ministry of<br />

Women Affairs to express solidarity<br />

with the governor’s ambition. They<br />

sang songs praising Ayade for identifying<br />

with their plight.<br />

Coordinator of the group, Madam<br />

Grace Efiwat, in her remarks, commended<br />

the governor for “his love<br />

for widows” adding “this is the first<br />

time in the history of our state for<br />

government to create a department<br />

called Department of Widows Affairs<br />

with a personal assistant to advise<br />

and recommend to government on<br />

how to help solve widows’ many<br />

challenges. To Ayade, we say, carry<br />

go our digital governor”<br />

Efiwat said her group was particularly<br />

grateful to Ayade for making it<br />

possible for a widow, in the person<br />

of Abbey Ukpikpen, wife of the late<br />

Cross River State House of Assembly<br />

member, Stephen Ukpukpen, to<br />

emerge victorious in the just concluded<br />

by-election for Obudu State<br />

Constituency.<br />

Addressing the widows, Commissioner<br />

for Women Affairs, Stella<br />

Odey, commended them for their<br />

resolve to stand with the governor<br />

in 2019, saying the determination<br />

to endorse him was to reciprocate<br />

Ayade’s fatherly disposition of ensuring<br />

that widows’ condition of living<br />

were enhanced.<br />

“To prove that His Excellency has<br />

special place in his heart for widows,<br />

he established the Garment Factory<br />

of which more than 70 percent of<br />

workers there are widows so as to<br />

ameliorate the suffering of being left<br />

behind by a loving spouse.<br />

Challenge me and I will present facts to<br />

the world - Emmanuel dares Akpabio<br />

ANIEFIOK UDONQUAK, Uyo<br />

Akwa Ibom State Governor<br />

Udom Emmanuel has<br />

threatened to present to<br />

the world facts about former<br />

Governor Godswill Akpabio’s<br />

administration.<br />

Emmanuel, who challenged<br />

those speaking ills of him to come<br />

up openly, saying he is ready to<br />

spend his personal resources to hire<br />

international, national and local<br />

media to present facts to the world.<br />

At the grand endorsement rally in<br />

his honour at Onna Sports Stadium,<br />

Emmanuel said only such avenue<br />

would convince the whole world<br />

about who is who in the state.<br />

Apparently responding to Akpabio’s<br />

alleged attack on him, he said<br />

he was ready to spill the beans.<br />

“I have heard things, and I want<br />

to challenge any who thinks he has<br />

the truth to come out, I will use my<br />

personal money to hire CNN and<br />

other international media, AIT,<br />

Channels, NTA and AKBC, let’s<br />

present facts to Nigerians, let’s see<br />

who would tell the truth and who<br />

will also tell a lie”.<br />

“However, the issue on ground<br />

is Akwa Ibom, it’s about the development<br />

of this state, it’s about<br />

our children in public schools<br />

who are excelling in international<br />

competitions, it’s about the price of<br />

Udom Emmanuel<br />

food items that we have drastically<br />

dropped, it’s about the unity of this<br />

state which we believe in,” he said.<br />

He thanked the people of Eket<br />

Senatorial District for the endorsement<br />

and assured that the overwhelming<br />

encouragements from<br />

all parts of the state has indeed<br />

boosted his determination, not just<br />

to declare but to do more.<br />

He said his administration has<br />

within the last three years touched<br />

areas that were never touched in<br />

the state, he enumerated such areas<br />

to include; Mbo, Ini and other<br />

rural areas of the state which have<br />

been visited with dualised roads,<br />

improved healthcare facility, power<br />

infrastructure, International market<br />

and a modern sports facility in Eket.<br />

Chairman on the occasion and<br />

a former deputy governor Etim<br />

Okpoyo said he decided to come<br />

back to politics due to convincing<br />

evidences of performance by Udom<br />

Emmanuel “If I were not convinced,<br />

I would not have been here,” he said.


38 BUSINESS DAY<br />

C002D5556<br />

Wednesday <strong>22</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

NEWS<br />

Foreign airlines increase frequency <strong>22</strong>% on...<br />

Continued from page 1<br />

ate over 300 frequencies weekly<br />

into and out of Nigeria, equivalent<br />

to a <strong>22</strong> percent increase from about<br />

<strong>22</strong>0 weekly frequencies operated by<br />

foreign airlines two years ago.<br />

Ethiopian Airlines has the highest<br />

entry points into Nigeria, which<br />

is five airports. Ethiopian and ASKY<br />

together operate 54 frequencies<br />

weekly into Nigeria. British Airways<br />

and Virgin Atlantic operate 21 frequencies<br />

weekly into Nigeria.<br />

The breakdown further shows<br />

that African World Airways (AWA)<br />

has 49 frequencies per week; EgypAir<br />

with 16; Air France 15; Saudi Arabian<br />

Airways 13; Emirates 11; Lufthansa<br />

11; Air Cote d’Ivoire10; Qatar 9; South<br />

African Airways 7.<br />

Others are Delta, Royal Air Maroc,<br />

RwandAir, Sudan Airways, Turkish<br />

Airways, which enjoy seven frequencies<br />

without reciprocity from<br />

Nigerian airlines.<br />

Etihad has five frequencies; Fly<br />

Mid Africa has four frequencies;<br />

L-R: Daisy West, special adviser to Rivers State governor on beautification of parks and gardens; Emmanuel Emefiele, executive<br />

director, Sterling Bank; Roseline Konya, Rivers State commissioner for environment, and Daniel Okeke, MD/CEO, Express<br />

Concerns, during the unveiling of Sterling Bank’s Recycled Arts at Station Roundabout, Port Harcourt, Rivers State.<br />

As Nigeria keep oil investors hanging, peers...<br />

Continued from page 1<br />

failed to keep pace, hence a petroleum<br />

industry bill has not become<br />

law 17 years after it was initiated.<br />

The Nigerian National Petroleum<br />

Corporation (NNPC) is accused of<br />

being opaque, inefficient and unreceptive<br />

to reforms.<br />

But Nigeria’s African peers are<br />

not wavering. Last week, Angola announced<br />

it will set up a new regulator<br />

for the country’s oil industry as part<br />

of efforts to restructure state-owned<br />

Sonangol and revive falling oil and<br />

gas output. The South western African<br />

nation has seen oil production<br />

dip to 1.4million barrels per day<br />

(bpd) from 1.9million bpd.<br />

The regulatory role will be transferred<br />

from Sonangol to the National<br />

Agency of Petroleum and Gas in the<br />

first half of next year in a reorganization<br />

scheduled for completion<br />

in 2020, while Sonangol, which<br />

partners with Total SA and BP Plc<br />

to pump oil, will focus on the exploration,<br />

production, refining and<br />

distribution of oil and gas.<br />

Africa’s third biggest oil producer,<br />

Algeria is amending its national energy<br />

law to encourage upstream investments.<br />

The country is softening tough<br />

fiscal terms and increasing efficiency<br />

and speed of business processes to<br />

improve investor confidence.<br />

The country’s objective is to align<br />

reforms with the current energy<br />

market, striking a balance in technical<br />

and financial risks between<br />

Sonatrach, its national oil company<br />

and international investors. It also<br />

seeks to incentivise outside participation<br />

while simultaneously<br />

preserving oil rents.<br />

Experts say the country would<br />

amend its fiscal regime, allowing<br />

foreign partners to manage capital<br />

projects as opposed to the current<br />

law requiring Sonatrach to possess<br />

a 51 percent majority stake in all<br />

hydrocarbon projects.<br />

“The existing tax law, drafted during<br />

a high oil-price cycle, should be<br />

revised to account for lower oil prices.<br />

Algeria charges a 20% royalty on production,<br />

and this could be altered to<br />

12.5% and 16.25% subject to special<br />

conditions in the new law. Windfall<br />

taxes of 15-50%, pending the amount<br />

of production also apply, and may be<br />

targeted in the new law to encourage<br />

outside investment in exploration and<br />

development projects,” Rym Loucif,<br />

energy lawyer at Algiers office of<br />

French law firm Gide Loyrette Nouel,<br />

told an online gas journal.<br />

Other African oil producers including<br />

Ghana, Equatorial Guinea,<br />

Egypt and Mozambique are driving<br />

reforms in their oil sectors and positioning<br />

to attract new investments<br />

through competitive fiscal and regulatory<br />

frameworks.<br />

In its report for <strong>2018</strong>, the African<br />

Law and Business Summit <strong>2018</strong><br />

says that change has been rapid and<br />

widespread in Africa’s oil and gas<br />

landscape.<br />

“Until recently, for example, Kenya<br />

and many other African countries<br />

were solely oil importers and had no<br />

Middle East Airlines has four and<br />

AirItaly formerly Meridiana has three<br />

weekly flights to the country.<br />

Tayo Ojuri, an industry expert and<br />

Chief Executive Officer, Aglo Limited,<br />

an aviation support service told <strong>BusinessDay</strong><br />

that the airline business is often<br />

the first hit during recession and will<br />

improve once the economy recovers.<br />

Ojuri explained that the direct implication<br />

of improvement in the economy<br />

is that there will be increase in the purchasing<br />

power of people, which will<br />

enable them buy tickets to travel.<br />

A clear indication of this is that<br />

airlines are bringing in bigger aircraft,<br />

opening new routes and<br />

expanding fleet.<br />

Oil production recovered to 1.8<br />

million barrels as at January <strong>2018</strong>,<br />

according to OPEC data, from as low<br />

as 1.2 million barrels daily in the thick<br />

of militant disruptions.<br />

These factors contributed to lifting<br />

the economy from recession in the<br />

second quarter of 2017, according<br />

to the National Bureau of Statistics<br />

(NBS). The economy has consolidated<br />

its exit from recession after<br />

growing 0.8 percent in 2017 and 1.95<br />

percent in Q1, <strong>2018</strong> compared to a 1.6<br />

percent contraction the previous year.<br />

These developments are coming<br />

two years after foreign airlines operating<br />

in Nigeria had in excess $575<br />

million, trapped at the Central Bank<br />

of Nigeria (CBN).<br />

As the forex controls at the CBN<br />

lingered, some foreign airlines resorted<br />

to selling tickets in dollars or<br />

moved their ticketing operations to<br />

neighbouring countries to reduce<br />

the naira piles, while others like<br />

Iberia and United airlines stopped<br />

operations into Nigeria.<br />

Kola Olayinka, country manager,<br />

British Airways told <strong>BusinessDay</strong><br />

that “everything has been<br />

looking positive for Nigeria. We<br />

are a big, economy, people are<br />

investing and coming in. people<br />

want to invest in Nigeria because<br />

they know we have the numbers.<br />

Anyone who puts money will surely<br />

make money.”<br />

•Continues online at<br />

www.businessdayonline.com<br />

gas reserves of substance. However, a<br />

host of new finds, gradually entering<br />

into production, across Ghana, Kenya,<br />

Mozambique, Senegal and Mauritania,<br />

Tanzania and Uganda, have<br />

significantly boosted sub-Saharan<br />

Africa’s traditional upstream players.<br />

“Senegal, for instance, has seen<br />

investment from oil exploration<br />

companies, Cairn Energy and Kosmos<br />

Energy, respectively, discovering<br />

some of the largest offshore<br />

gas deposits between Senegal and<br />

neighbouring Mauritania’s territorial<br />

waters,” the report said.<br />

Egypt and Algeria are also ramping<br />

gas production.<br />

“Notably, almost 60% of Algeria’s<br />

oil exports were to Europe in 2016.<br />

As well as being the main supplier of<br />

natural gas to Spain last year, Algeria is<br />

one of the four or five largest providers<br />

of oil and gas to countries like France,<br />

Italy, Portugal, and even Germany.<br />

Similarly, in 2016, 86% of Libya’s oil<br />

exports were to Europe,” said Dele<br />

Kuti, global head of oil and gas for<br />

South Africa’s Standard Bank Group.<br />

According to Bank-Anthony<br />

Okoroafor, chairman of Petroleum<br />

Technology Association of Nigeria<br />

(PETAN, Africa has huge resource<br />

base comprising 128 billion barrels<br />

or 7.5 percent of world proven oil<br />

reserve, 503.3 Tcf (86.8 billion BoE)<br />

or 7.6 percent of world’s proven gas<br />

reserves and 26 billion barrels (Libya<br />

5th globally) of shale oil. Algeria (3rd<br />

globally) holds 707 Tcf or 121.9 billion<br />

BoE shale gas potential. Analysts<br />

say foreign investors are spoilt for<br />

choice and investment dollars will go<br />

to countries that are serious.<br />

Capital importation slides on back of profit...<br />

Continued from page 1<br />

The National Bureau of Statistics<br />

(NBS) confirmed Tuesday<br />

morning that total investment inflows<br />

in the second quarter showed<br />

some 12.53 percent decline from the<br />

previous quarter level, but a 207.62<br />

percent spike compared to the second<br />

quarter of 2017.<br />

“The decline recorded in the<br />

second quarter was as a result of a<br />

decline in Portfolio and Other Investments,<br />

which declined by 9.76% and<br />

24.07% respectively,” the NBS said in<br />

its capital importation report posted<br />

on its website.<br />

The largest amount of capital<br />

importation by type was however<br />

received through Portfolio investment,<br />

which accounted for 74.7<br />

percent or $4.1195b of total capital<br />

imported, followed by Other Investment,<br />

which accounted for 20.5<br />

percent or $1.132.8 bn.<br />

Foreign Direct Investment FDI,<br />

which the country earnestly yearns<br />

for to create jobs and boost the struggling<br />

economy rather accounted for<br />

just 4.7 percent or $261.4m of total<br />

capital imported for the quarter.<br />

The All-Share Index (ASI) increased<br />

marginally by 0.09 per cent<br />

to 38,278.55 in June, <strong>2018</strong>, from<br />

38,243.19 at end-December 2017.<br />

Market Capitalisation (MC) also<br />

increased by 1.89 per cent to N13.87<br />

trillion from N13.61 trillion at end-<br />

December 2017, according to the<br />

Central Bank of Nigeria (CBN).<br />

However, both the ASI and MC fell<br />

by 7.24 per cent, respectively, as at June<br />

29, <strong>2018</strong> compared with the level at end-<br />

April <strong>2018</strong>, “due majorly to profit taking<br />

activities of investors, and the effect of<br />

monetary policy normalization in the<br />

United States,” CBN governor Emefiele<br />

announced at the last Monetary Policy<br />

Committee (MPC) meeting of the bank.<br />

As confirmed by the NBS, Portfolio<br />

Investment remained the most<br />

significant component of total capital<br />

inflow into Nigeria in the second<br />

quarter of <strong>2018</strong>, although it contracted<br />

by 9.76 percent over quarter<br />

one, but a 434.64 percent growth<br />

Why Dangote Sugar is not having a sweet...<br />

Continued from page 1<br />

sugar prices.<br />

A surge in sugar production since<br />

last September when the European<br />

Union abolished production led to<br />

a supply glut causing sugar prices to<br />

drop 33 percent year to date.<br />

The resulting problem isn’t just<br />

local, it’s global. Reuters reports that<br />

at current price level, there is hardly a<br />

sugar company in Europe which can<br />

still produce at a break-even.<br />

Analysts expect the global sugar<br />

market to remain in surplus for at<br />

least two seasons and possibly longer<br />

following a sharp rise in production<br />

particularly in India and Thailand.<br />

This could cause revenue for sugar<br />

producing companies to continue<br />

to decline for the foreseeable future.<br />

In the first quarter of the year, Dangote<br />

Sugar acknowledged that the sharp<br />

decline in sugar prices was putting a<br />

strain on their financial performance<br />

but in the second quarter after performance<br />

failed to improve, they threw<br />

most of the blame in the profit shortfall<br />

on sugar smugglers and Apapa gridlock.<br />

According to a press release by<br />

the company, “The decline in sales<br />

volumes was due mainly to the<br />

continued presence of lower quality,<br />

unlicensed sugar being smuggled into<br />

the country and sold in key markets.<br />

It provides a ready alternative to trade<br />

customers who are not mindful of the<br />

quality implications of the product.<br />

Due to its lower price, it continues to<br />

exert a downward pressure on prices<br />

and sales volumes. Year on year there<br />

has been a reduction in the average<br />

compared to Q2, 2017 when $770.51<br />

million was reported.<br />

According to the statistics office,<br />

“The 9.76% Q-on-Q decrease was<br />

due to a fall in the largest sub-component--<br />

Money Market Instruments.<br />

“Capital Importation in the form<br />

of Money Market Instrument stood<br />

at $2,670.93 million in the second<br />

quarter, which was a 24.29% decrease<br />

over the previous quarter.”<br />

But Investments in both Equity<br />

and Bonds under Portfolio Investments<br />

steadily grew quarter-onquarter<br />

growth, with 49.43 percent<br />

and 19.13 percent respectively.<br />

Babatunde Fashola, Minister of<br />

Power, Works & Housing, a few months<br />

ago begged investors not to panic over<br />

the negative trend in the Nigerian Stock<br />

market assuring that the nation’s economic<br />

fundamentals remained strong.<br />

The NBS report indicated that<br />

in the second quarter of <strong>2018</strong>, total<br />

Foreign Direct Investment stood at<br />

$261.35m, growing by 5.97 percent<br />

from the first quarter of the year, but<br />

falling by 4.75 percent from the corresponding<br />

quarter of last year.<br />

“FDI represented only 5 percent of<br />

the total capital import,” the NBS stated.<br />

Equity Investment dominated<br />

FDI in the second quarter, accounting<br />

for 97.85 percent of total FDI<br />

received in the quarter.<br />

Other Investments amounted to<br />

$1.132 billion. “This category continued<br />

its decline since the beginning of 2017,<br />

from $1.526 billion in Q4, 2017 down to<br />

$1.491 billion in Q1, <strong>2018</strong>, and further<br />

falling by 24.07 percent in Q2, <strong>2018</strong>.<br />

“This category accounted for 20.5%<br />

of total Capital Importation in the second<br />

quarter of <strong>2018</strong>,” NBS explained,<br />

noting that as in previous periods,<br />

“Other Investment was dominated<br />

by Loans ($1.121 billion) which accounted<br />

for over 99% of Investments in<br />

that category in the reviewing quarter.<br />

“Other Claims fell sharply, from<br />

$<strong>22</strong>3.49 million in Q1 to $11.08 million<br />

in Q2. Trade Credits and Currency<br />

Deposits posted no inflow in<br />

the second quarter of <strong>2018</strong>,” the NBS<br />

said in the report.<br />

selling price (currently N13,160/50kg<br />

bag vs N16,170/50kg bag in 2017) as<br />

the impact by the downward trend in<br />

global sugar prices comes through.”<br />

“Also, the Apapa access road traffic<br />

gridlock has had an adverse impact<br />

on our logistics and product distribution<br />

activities. Group revenue decline<br />

by 29.2 percent was as a result of the<br />

decline in sales volume and price.<br />

Gross margin however showed a year<br />

on year improvement due to the positive<br />

impact of raw sugar purchases<br />

and efficiencies in energy utilisation.”<br />

Cost of sales declined year on year<br />

by around N31 billion percent due to a<br />

proportional drop of N31 billion in costs<br />

of purchasing raw materials. With sugar<br />

prices dropping rapidly, operational<br />

cost efficiency may be the best strategy<br />

to defend the firm’s profit margin.<br />

Dangote Sugar is down 26 percent<br />

this year, compared to the -9.36<br />

percent return in the broader market.<br />

“The stock is trading at only 5.01<br />

times trailing earnings, a significant<br />

discount to industry price to earnings<br />

ratio of 19.46. With the stock market<br />

shedding billions this year in losses, it<br />

is hard to place if the downward trend<br />

in Dangote Sugar is solely based on<br />

fundamental or if the stock also got<br />

caught in the broad based market selloff,”<br />

said Faith Ogedengbe, Research<br />

Analyst, GDL Asset Management.<br />

Dangote Sugar closed on Monday at<br />

N14.80 up 1.72 percent but the market<br />

consensus 12 months target price for<br />

the stock is currently N20.91, meaning<br />

analysts’ see a 41.2 percent upside in<br />

the stock price over the next one year.


Wednesday <strong>22</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

SOTA advocates for coalition of<br />

alternative political parties, aspirants<br />

Global speakers and<br />

regional representatives<br />

joined<br />

participants at The<br />

Summit of The Alternatives<br />

(SOTA) to call for young, gender<br />

sensitive, competent, capable<br />

and credible leadership<br />

through the 2019 elections in<br />

Nigeria.<br />

The two-day event focused<br />

on shaping narratives<br />

to redefine Nigeria’s political<br />

landscape through a coalition<br />

of credible alternatives.<br />

Held at the Musa Shehu<br />

Yar’Adua Centre, Abuja on<br />

<strong>Aug</strong>ust 15 and 16, the summit<br />

was a roundtable discussion<br />

to develop a national vision<br />

and strategy to ensure effective<br />

democracy and structuring<br />

guidelines to building a<br />

New Nigeria of our dream.<br />

And citizens are taking the<br />

lead in the framing of a New<br />

Nigeria of our dream.<br />

Giving the welcome address,<br />

convener of the Red<br />

Card Movement, Oby Ezekwensili,<br />

extensively introduced<br />

the idea behind the<br />

SOTA, emphasising on the<br />

need for a new Nigeria of our<br />

dream and the economic implication<br />

of having a visionary<br />

leadership, with character,<br />

competence and capacity.<br />

The summit comprised of<br />

influencers and thought leaders<br />

that have demonstrated<br />

model character, competence<br />

and capacity in their various<br />

fields, with a strong desire to<br />

build and remodel through<br />

active engagement in Nigeria’s<br />

political space.<br />

The first day kicked off<br />

with a keynote speech the ‘A<br />

Rallying Cry for an Alternative,’<br />

as speakers and partners<br />

made presentations that centred<br />

on the need for Nigeria to<br />

get it right and insist on leadership<br />

criteria of character,<br />

competence and capacity.<br />

The keynote speaker,<br />

Professor Lumumba, commended<br />

the efforts of the organisers<br />

for coming together<br />

to rescue Nigeria from political<br />

nightmare and by extension<br />

creating hope for Africa<br />

and Africans.<br />

According to Lumumba,<br />

“Nigeria is blessed with<br />

everything you can think of<br />

but leadership; Nigeria has<br />

showed its leadership position<br />

in the African region<br />

through various peace keeping<br />

operations in Liberia,<br />

Sierra Leone and mention it,<br />

Nigeria is the only link to Africa’s<br />

success.”<br />

The event also included<br />

panel discussions that further<br />

drove the new agenda<br />

for a new Nigeria. Campaign/<br />

Party Finance; Cultivating<br />

Grassroots Movements; Media<br />

Approaches to Elections;<br />

Nuances and Metrics of<br />

Youth and Women Inclusion<br />

in today’s Democracy; INEC:<br />

An Overview of Electoral<br />

Preparations in the areas of<br />

hardware, software and process;<br />

Youth Inclusion and<br />

Building a Political Brand.<br />

Anambra inaugurates N6m water project,<br />

tasks market leaders on good usage<br />

EMMANUEL NDUKUBA, Awka<br />

Governor Willie Obiano<br />

of Anambra<br />

State has inaugurated<br />

N6 million water<br />

project at Unubi, Nnewi South<br />

Local Government Area of the<br />

state. Member representing<br />

Nnewi South Constituency 1<br />

in Anambra State House of Assembly,<br />

Kingsley Iruba, sponsored<br />

the project.<br />

The borehole situated at<br />

Afor Unubi Market square<br />

measures 660 metres in depth,<br />

with sophisticated materials<br />

to serve for a long time. It<br />

has six big Geepee overhead<br />

tanks with an attached 5.5<br />

horsepower water-pumping<br />

machine. It also has a standby<br />

25KVA generator installed capacity<br />

to power the system.<br />

While inaugurating the<br />

project, Obiano said the essence<br />

of governance was to<br />

provide for the people what<br />

they could not provide for<br />

themselves.<br />

Obiano, who was represented<br />

by a former commissioner<br />

for information, Maja<br />

Umeh, noted that Iruba demonstrated<br />

excellent representation<br />

by his prompt response<br />

to the needs of his people.<br />

The governor while commending<br />

him for proper utilisation<br />

of constituency funds<br />

said he would always support<br />

the people of Nnewi to boost<br />

socio-economic activities in<br />

the area.<br />

“Nnewi South is one of<br />

the LGAs that have properly<br />

executed their N20 million<br />

Community Choose Your<br />

Project Initiative. I thank you<br />

for your immense support,<br />

especially in actualising my<br />

second term bid. What Mr<br />

Iruba accomplished shows<br />

good representation. “Iruba<br />

is `god send’ to the people of<br />

Nnewi South. The project will<br />

aid the people in improving<br />

sanitation and help to reduce<br />

challenges of water supply to<br />

the area,’’ Obiano said.<br />

Iruba explained that the<br />

essence of citing the water<br />

project at the market was to<br />

ensure a healthy environment.<br />

According to Iruba,<br />

during the construction of the<br />

borehole, it created direct and<br />

indirect jobs, as the labourers<br />

were from the community.<br />

“The community is expected<br />

to take ownership of<br />

the facility and generate revenue<br />

for the maintenance and<br />

sustainability of the project,’’<br />

he said.<br />

Traditional ruler of Unubi,<br />

Igwe Francis Umunnajiego,<br />

said it was unprecedented in<br />

the history of Unubi, confirming<br />

that no previous legislator<br />

had utilised his constituency<br />

allowance like Iruba.<br />

C002D5556<br />

BUSINESS DAY<br />

39<br />

NEWS<br />

Bank credit lowest in mining, quarrying sector<br />

OGHOGHO EDOSOMWAN<br />

Recent report released<br />

by the<br />

National Bureau<br />

of Statistics<br />

(NBS) shows<br />

that lending to the mining<br />

and quarrying sector is the<br />

lowest among other sector<br />

with 0.07 percent of total<br />

lending.<br />

This figure has been declining<br />

over the years from<br />

its peak of 1.66 percent<br />

in first quarter 2015 to its<br />

current figure. This however<br />

reveals a decline of<br />

approximately 96 percent.<br />

Nigeria is gifted with<br />

vast reserves of solid and<br />

industrial minerals, energy<br />

minerals and metals.<br />

The country was a major<br />

exporter of tin, columbite<br />

and coal in the 1960s to<br />

early 1970s. However, activities<br />

in this sector began<br />

to plummet significantly<br />

by mid-1970s as a result of<br />

a number of political and<br />

economic factors, especially<br />

the significant focus<br />

on crude oil production as<br />

a major source of foreign<br />

exchange for the country.<br />

The mining and quarrying<br />

sector (which consists<br />

of crude petroleum and<br />

natural gas, coal mining,<br />

metal ore and quarrying<br />

and other minerals sub-activities)<br />

grew nominally by<br />

84.02 percent year-on-year.<br />

The sector contributed<br />

13.92 percent to overall GDP<br />

in the first quarter of <strong>2018</strong>,<br />

higher than the 8.27 percent<br />

contribution recorded<br />

in first quarter 2017 and the<br />

8.50 percent recorded in Q4<br />

2017. This means the sector<br />

is improving and there is<br />

still room for further development.<br />

The Nigerian mining<br />

sector can be categorised<br />

according to the key<br />

activities in the sector,<br />

which is, exploration and<br />

mining (upstream), processing<br />

and beneficiation<br />

(midstream), and marketing<br />

and transportation<br />

(downstream). Only the<br />

upstream and downstream<br />

subsectors are currently<br />

active.<br />

While the downstream<br />

subsector is dominated<br />

by individuals and indigenous<br />

companies, the<br />

upstream subsector is<br />

dominated by small scale/<br />

artisanal miners, and local<br />

integrated manufacturing<br />

companies.<br />

On the reason for the<br />

L-R: Rotimi Adebari, human resources project coordinator, Association of Nigerian Electricity Distributors (ANED); Funke<br />

Osibodu, CEO, BEDC, and Abu Ejoor, executive director, commercial, at a media parley with on-air-personalities, online<br />

influencers and newspaper journalists across BEDC franchise states, in Benin City, Edo State.<br />

2019: Presidency replies Tambuwal as Buhari treks 800 metres<br />

The Presidency said<br />

President Muhammadu<br />

Buhari has<br />

demonstrated his fitness<br />

to run for a second term<br />

by trekking 800 metres from<br />

the Eid-praying ground in<br />

Daura to his private residence.<br />

The News Agency of Nigeria<br />

reports after the Eidprayers,<br />

President Buhari<br />

shunned protocol and opted<br />

to trek some 800 metres, acknowledging<br />

cheers from<br />

Nigerians, who lined up on<br />

his home route to catch a<br />

glimpse of him.<br />

One of the aspirants interested<br />

in the president’s office<br />

is Governor Aminu Tambuwal<br />

of Sokoto State. He said<br />

last week that the President<br />

was “too old’’ to continue to<br />

rule the country beyond 2019<br />

According to Tambuwal,<br />

President Buhari is just too<br />

old to be Nigeria’s leader, despite<br />

his integrity and impeccable<br />

character. Tambuwal<br />

stated this during a solidarity<br />

visit of students and youth in<br />

Sokoto, last week.<br />

Tambuwal said: “We love<br />

President Buhari and that<br />

was why we supported him<br />

in 2015 unconditionally, and<br />

while doing that, we are too<br />

sure that he will seek re-election<br />

after his first term, but<br />

when things are wrong we<br />

have to tell him.<br />

“We still believe in his integrity,<br />

patriotism and courage<br />

but these are not enough for a<br />

leader. We all know that there<br />

is a vacuum in the government<br />

occasioned by his disposition<br />

probably because of his old<br />

age or health condition.<br />

“That is why Nigerians are<br />

yearning for younger ones to<br />

lead this country.’’<br />

However, Garba Shehu, the<br />

President’s senior special assistant<br />

on media and publicity,<br />

said the trekking by the President<br />

was a positive response to<br />

Tambuwal’s diatribe.<br />

“I think there are two<br />

things here; one is to say that<br />

the President is responsive to<br />

the enormous support and<br />

commitment of his own people<br />

that had come out in their<br />

numbers to see him and he<br />

just decided that he couldn’t<br />

go on riding in a black vehicle<br />

and he came out and walked<br />

to the distance.<br />

“The second thing, he is<br />

curious that these days, one<br />

or two people who are aspiring<br />

to be president are campaigning<br />

on their youthfulness<br />

and good health.<br />

“I think the president has<br />

done one thing today – that<br />

CHANGE OF NAME<br />

I, formerly known and addressed<br />

as Mrs. Ogeh Eseoghene Esther<br />

now wish to be known and addressed<br />

as Mrs. Elisha-Enoch<br />

Eseoghene Esther. All former<br />

documents remain valid. General<br />

public please take note.<br />

CHANGE OF NAME<br />

I, formerly known and addressed<br />

as Ogeh Edwin now<br />

wish to be known and addressed<br />

as Mr.Elisha-Enoch<br />

Edwin God’sglory. All former<br />

documents remain valid. General<br />

public please take note.<br />

CHANGE OF NAME<br />

I, formerly known and addressed<br />

as Abah Francisca<br />

now wish to be known and<br />

addressed as Abah Ojorya<br />

Francisca. All former documents<br />

remain valid. General<br />

public please take note.<br />

decline in bank credit to<br />

this sector, Dolapo Ashiru,<br />

a Lagos-based analyst, told<br />

<strong>BusinessDay</strong>, “The figure<br />

you are seeing does not<br />

mean they do not get any<br />

form of lending at all. The<br />

major players are cement<br />

companies and most of the<br />

loans they obtain are foreign<br />

loans. Foreign banks<br />

lend them money, not<br />

necessarily local banks.”<br />

The second quarter<br />

GDP results released by<br />

NBS is a clear indication<br />

of better days for the Nigerian<br />

mining industry,<br />

which is experiencing a<br />

sustained improvement<br />

in its contribution to the<br />

national economy. Solid<br />

minerals and agriculture<br />

are the priority sectors for<br />

economic recovery set by<br />

the Federal Government.<br />

the issue is not how old one<br />

is but how fit he is ; how<br />

healthy he is”. Now that the<br />

president has proven his fitness<br />

and well-being to continue<br />

in office is a settled<br />

matter<br />

CHANGE OF NAME<br />

I, formerly known and addressed<br />

as Nat-Ofo <strong>Aug</strong>ustina<br />

Chidinma now wish to be<br />

known and addressed as Opara<br />

<strong>Aug</strong>ustina Chidinma. All former<br />

documents remain valid.<br />

General public please take note.<br />

CHANGE OF NAME<br />

I, formerly known and addressed<br />

as Majebi Ometere<br />

Esther now wish to be known<br />

and addressed as Mrs Ojelola<br />

Ometere Esther. All former<br />

documents remain valid. General<br />

public please take note.<br />

CHANGE OF NAME<br />

I, formerly known and addressed<br />

as Oyelu Akinwale<br />

Kolawole now wish to be known<br />

and addressed as Oyelu Victor<br />

Akinwale. All former documents<br />

remain valid. General<br />

public please take note.


BUSINESS DAY<br />

Wednesday <strong>22</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

FT FINANCIAL TIMES<br />

C002D5556<br />

A1<br />

World Business Newspaper<br />

Bill Gross’s bond fund<br />

hit by wave of investor<br />

redemptions<br />

Page A4<br />

Fed chief navigates treacherous<br />

political and economic waters<br />

Jay Powell’s first Jackson Hole address comes as<br />

Trump adds to wider debate on rates<br />

Sam Fleming<br />

On the surface, the economic<br />

backdrop to Jay<br />

Powell’s first Jackson<br />

Hole address as Federal<br />

Reserve chairman could<br />

hardly look much more benign.<br />

The US consumer is resurgent,<br />

economic growth is running at an<br />

annualised pace of more than 4 per<br />

cent, joblessness is hovering near<br />

50-year lows, and fiscal policy is set to<br />

deliver a further boost in the second<br />

half of the year.<br />

Recent Jackson Hole meetings<br />

hosted by the Kansas City Fed have<br />

been awash with talk of pedestrian<br />

economic expansions, stubbornly<br />

sub-par inflation and the limits of<br />

central banks’ growth-boosting powers.<br />

This time in Wyoming, however,<br />

debate is likely to focus on the steps<br />

Mr Powell must take to prevent overexuberance.<br />

The Fed chairman inherited a welltelegraphed<br />

and predictable strategy<br />

from Janet Yellen of gradually reining<br />

in stimulus. But as the year progresses<br />

and we head towards 2019, Mr Powell<br />

will have to start making some big<br />

calls of his own as he sets out plans<br />

for the next stage in the Fed’s exit from<br />

post-crisis monetary policy.<br />

Among the key questions are:<br />

where is the so-called neutral level of<br />

interest rates that neither suppresses<br />

nor propels growth; do rates need to<br />

be lifted into restrictive territory; how<br />

should the Fed factor in the threat of<br />

financial excesses; and when should<br />

the central bank stop shrinking its<br />

multitrillion dollar balance sheet?<br />

Mr Powell is having to navigate an<br />

increasingly restive political scene,<br />

with a president who is proving more<br />

than willing to publicly criticise his<br />

own appointee for lifting interest rates<br />

as the midterm elections approach.<br />

Those political landmines were<br />

evident again on Monday after Donald<br />

Trump said in an interview with<br />

Reuters that he was “not thrilled”<br />

with Mr Powell’s continuation of Ms<br />

Yellen’s path of gradual rate increases.<br />

“I’m not thrilled with his raising of<br />

interest rates, no. I’m not thrilled,” Mr<br />

Trump said.<br />

Tim Duy, a professor at the University<br />

of Oregon, said the Fed finds<br />

itself at a dangerous point. At similar<br />

stages of the economic cycle in the<br />

US and China to attempt revival of trade negotiations<br />

Neither country optimistic that Washington meeting will be successful<br />

Tom Mitchell, Demetri Sevastopulo and<br />

Tim Bradshaw<br />

A<br />

Chinese vice-commerce minister<br />

and US Treasury undersecretary<br />

will on Wednesday<br />

try to revive trade negotiations that<br />

ended acrimoniously after their<br />

bosses last met in May. But neither<br />

side is optimistic that the meeting in<br />

Washington, between teams led by<br />

Wang Shouwen and David Malpass,<br />

past, the US central bank had ended<br />

up over-tightening monetary policy,<br />

he argued, as it underestimated the<br />

delayed effects of past rate rises. The<br />

flattening of the yield curve, which<br />

is regarded by some as a possible<br />

harbinger of slowing growth, could<br />

be providing warning signs, he added.<br />

Other economists have argued<br />

that the Fed’s biggest mistake in the<br />

past has been to have too loose a<br />

policy and allow lending to run out<br />

of control.<br />

“We are moving towards a different<br />

point in the cycle where you are<br />

closer to neutral and the Fed has to<br />

make some harder decisions,” Mr<br />

Duy said.<br />

The agenda set by the Kansas City<br />

Fed for the meetings, which start in<br />

earnest on Friday and finish on Saturday,<br />

is not focused on the intricacies<br />

of short-term monetary policy. The<br />

organisers want to examine broader<br />

questions including increased market<br />

power of large corporations, the<br />

migration of retail to online, and the<br />

interaction between financial stability<br />

and bank competition.<br />

But central bankers will face an<br />

array of questions about the Fed’s<br />

plans — including their likely impact<br />

overseas. Emerging markets such as<br />

Turkey and Argentina are looking<br />

particularly vulnerable to rising US<br />

interest rates and the stronger dollar.<br />

Analysts, nevertheless, expect Mr<br />

Powell and his colleagues to continue<br />

gradually tightening policy as long as<br />

there are no deleterious effects for<br />

the US.<br />

Krishna Guha, vice-chairman of<br />

investment bank Evercore ISI, said<br />

in a note that he expected them to<br />

“express attentiveness to international<br />

developments” but also “emphasise<br />

the need . . . to balance international<br />

downside risks with strong US economic<br />

momentum and mediumterm<br />

domestic overheating risks”.<br />

The US also faces domestic hazards<br />

— including the possibility of<br />

damage to business sentiment from<br />

President Donald Trump’s trade<br />

battles. As things stand, however,<br />

the economy is on track to grow at a<br />

4.3 per cent annual rate in the third<br />

quarter, according to the Atlanta Fed.<br />

Research from Goldman Sachs suggests<br />

fiscal support for growth may<br />

by greater in the second half than it<br />

previously expected.<br />

can succeed where three earlier<br />

rounds failed.<br />

Liu He, China’s Vice-Premier,<br />

and Steven Mnuchin, US Treasury<br />

Secretary, said publicly after meeting<br />

in May that neither side would<br />

resort to tariffs while negotiations<br />

continued. But just days later Donald<br />

Trump announced his intention<br />

to proceed with punitive tariffs on<br />

Chinese industrial exports worth<br />

Continues on page A2<br />

Microsoft alleges new Russia hack targeting US political groups<br />

Kremlin-linked cell accused of phishing scheme using fake sites of Washington groups<br />

Hannah Kuchler<br />

Microsoft has uncovered six<br />

internet domains used by<br />

Kremlin-linked hackers<br />

that targeted Republican-leaning US<br />

political groups, in a sign Russian efforts<br />

to influence American politics<br />

are expanding ahead of midterm<br />

elections in November.<br />

The company said a group known<br />

as APT 28, also dubbed Fancy Bear<br />

or Strontium and linked to Russian<br />

military intelligence, created<br />

fake websites that mimicked web<br />

addresses of the US Senate and to<br />

two conservative non-profits, the<br />

International Republican Institute<br />

and the Hudson Institute.<br />

Although the IRI, which promotes<br />

democracy overseas, and the<br />

Hudson Institute, a Washingtonbased<br />

think-tank, have ties to Republicans,<br />

both have been critical of<br />

Russian president Vladimir Putin, a<br />

Air pollution: Why<br />

London struggles<br />

to breathe<br />

Page A4<br />

Jay Powell is having to steer through an increasingly restive political scene, with a president who is proving more than willing to publicly<br />

criticise his own appointee for lifting interest rates © Bloomberg<br />

Microsoft alleges new Russia hack targeting US political<br />

Kremlin-linked cell accused of phishing scheme using fake sites of Washington groups<br />

Hannah Kuchler<br />

Microsoft has uncovered six<br />

internet domains used by<br />

Kremlin-linked hackers<br />

that targeted Republican-leaning<br />

US political groups, in a sign Russian<br />

efforts to influence American<br />

politics are expanding ahead of<br />

midterm elections in November.<br />

The company said a group<br />

known as APT 28, also dubbed Fancy<br />

Bear or Strontium and linked to<br />

Russian military intelligence, created<br />

fake websites that mimicked<br />

web addresses of the US Senate and<br />

to two conservative non-profits, the<br />

International Republican Institute<br />

and the Hudson Institute.<br />

Although the IRI, which promotes<br />

democracy overseas, and<br />

the Hudson Institute, a Washington-based<br />

think-tank, have<br />

ties to Republicans, both have<br />

been critical of Russian president<br />

Vladimir Putin, a sign APT 28 is<br />

targeting any Kremlin detractors.<br />

Many previously documented<br />

Russian efforts have been focused<br />

at Democrats.<br />

A US court has given Microsoft<br />

permission to seize control of the<br />

six website domains as part of an<br />

ongoing case.<br />

Russia on Tuesday rejected<br />

the allegations. “The reaction is<br />

already traditional,” said Dmitry<br />

Peskov, spokesman for Mr Putin.<br />

“We don’t know what hackers they<br />

are talking about, we don’t know<br />

what the influence on the elections<br />

is supposed to consist of.”<br />

Moscow has consistently denied<br />

that it had any hand in attempts<br />

to manipulate elections in<br />

the US or elsewhere.<br />

However, in private, some Russian<br />

officials are more forthcoming.<br />

“We hacked your elections,<br />

and we will continue to do so,”<br />

said a former Kremlin official<br />

when asked about the prospects<br />

for Russian-US relations.<br />

Microsoft revealed its findings<br />

less than a month after Facebook<br />

announced it was working with<br />

sign APT 28 is targeting any Kremlin<br />

detractors. Many previously documented<br />

Russian efforts have been<br />

focused at Democrats.<br />

A US court has given Microsoft<br />

permission to seize control of the<br />

six website domains as part of an<br />

ongoing case.<br />

Russia on Tuesday rejected the<br />

allegations. “The reaction is already<br />

traditional,” said Dmitry Peskov,<br />

spokesman for Mr Putin. “We don’t<br />

know what hackers they are talking<br />

about, we don’t know what the influence<br />

on the elections is supposed to<br />

consist of.”<br />

Moscow has consistently denied<br />

that it had any hand in attempts to<br />

manipulate elections in the US or<br />

elsewhere.<br />

However, in private, some Russian<br />

officials are more forthcoming.<br />

“We hacked your elections, and<br />

we will continue to do so,” said a<br />

former Kremlin official when asked<br />

the FBI after uncovering efforts<br />

to use fake accounts to spread<br />

political disinformation ahead of<br />

the midterms, a campaign that has<br />

also been linked to the Kremlin.<br />

Russian hack attempt of US<br />

political groups explained<br />

The latest disclosures complicated<br />

efforts by President Donald<br />

Trump to discredit findings by US<br />

intelligence that Mr Putin worked<br />

to influence the 2016 presidential<br />

election.<br />

Although Mr Trump himself<br />

has repeatedly questioned the assessment,<br />

his own spy chiefs this<br />

month took the rare step of issuing<br />

a warning against “a pervasive<br />

messaging campaign by Russia<br />

to try to weaken and divide the<br />

United States”.<br />

Brad Smith, Microsoft president<br />

and chief legal officer, said<br />

attacks against democracy were<br />

broadening and warned of more<br />

attempts to undermine candidates<br />

and campaigns ahead of the November<br />

vote.<br />

about the prospects for Russian-US<br />

relations.<br />

Microsoft revealed its findings<br />

less than a month after Facebook<br />

announced it was working with the<br />

FBI after uncovering efforts to use<br />

fake accounts to spread political disinformation<br />

ahead of the midterms,<br />

a campaign that has also been linked<br />

to the Kremlin.<br />

Russian hack attempt of US political<br />

groups explained<br />

The latest disclosures complicated<br />

efforts by President Donald<br />

Trump to discredit findings by US<br />

intelligence that Mr Putin worked<br />

to influence the 2016 presidential<br />

election.<br />

Although Mr Trump himself has<br />

repeatedly questioned the assessment,<br />

his own spy chiefs this month<br />

took the rare step of issuing a warning<br />

against “a pervasive messaging<br />

campaign by Russia to try to weaken<br />

and divide the United States”.


Wednesday <strong>22</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

A2 BUSINESS DAY<br />

C002D5556<br />

FT<br />

US and China to<br />

attempt revival...<br />

Continued from page A1<br />

$50bn annually.<br />

In an interview with Reuters on<br />

Monday, Mr Trump said he had low<br />

expectations for this week’s talks and<br />

was in no rush to resolve the dispute.<br />

“I’m like [the Chinese],” he added. “I<br />

have a long horizon.”<br />

In private conversations, Beijing<br />

officials said that what they see as<br />

Mr Trump’s constant provocations<br />

— such as his recent threat to target<br />

additional Chinese exports worth<br />

$200bn with tariffs of up to 25 per<br />

cent— have made it extremely difficult<br />

for them to offer conciliatory<br />

gestures.<br />

They are also exasperated by the<br />

Trump administration’s good-cop,<br />

bad-cop approach to the negotiations<br />

personified by Mr Mnuchin<br />

and Robert Lighthizer, US Trade<br />

Representative.<br />

It is a negotiating tactic Chinese<br />

officials have learnt to see straight<br />

through. While Mr Mnuchin and<br />

other Treasury officials have indicated<br />

a willingness to negotiate a<br />

speedy end to the dispute, Mr Trump<br />

has repeatedly sided with the China<br />

hawks at the Office of the US Trade<br />

Representative. “We are not optimistic<br />

because we don’t think Trump is<br />

willing to compromise,” one Chinese<br />

official told the Financial Times.<br />

At best this week’s talks may lead<br />

to other, higher-level negotiations<br />

before Mr Trump decides to up the<br />

ante again.<br />

Mr Liu has engaged in three previous<br />

rounds of fruitless negotiations<br />

with the US since May, twice with Mr<br />

Mnuchin and once with Wilbur Ross,<br />

Commerce Secretary. Chinese officials,<br />

enraged at Mr Trump’s decision<br />

to proceed with tariffs, did not want to<br />

risk the possibility of the vice-premier<br />

facing another “embarrassment”.<br />

If the US president follows through<br />

on his threat to target an additional<br />

$200bn worth of Chinese exports, it<br />

will harden views in Beijing that a fullscale<br />

trade war between the world’s<br />

two largest economies is inevitable.<br />

“Trump is weaponising the US<br />

economy,” says Richard Yetsenga,<br />

research head at ANZ Bank in Sydney.<br />

“Because the US economy is<br />

so strong, he is banking on other<br />

countries to fold.”<br />

Xi faces off against Trump over<br />

trade<br />

According to Chinese and US<br />

officials, this week’s talks will centre<br />

on a list of more than 140 specific<br />

demands originally drafted by the<br />

Trump administration for the first<br />

round of trade talks in May. These<br />

included items such as the rapid approval<br />

of applications by Mastercard<br />

and Visa to enter China’s domestic<br />

payments market — and JPMorgan’s<br />

plans to take a majority stake in its<br />

Chinese securities joint venture.<br />

In private discussions with their<br />

US counterparts, Chinese officials<br />

have indicated that in less confrontational<br />

circumstances, they would<br />

be willing to either implement or<br />

discuss about two-thirds of the<br />

demands. They added that the rest,<br />

such as opening China’s cloud computing<br />

market to foreign companies,<br />

is off-limits because of national security<br />

and other concerns.<br />

But with Sino-US relations at<br />

their lowest point since Xi Jinping<br />

assumed power in 2013, Beijing is<br />

reluctant to offer even modest concessions<br />

to Washington that would<br />

advance the Chinese president’s own<br />

reform agenda.<br />

NATIONAL NEWS<br />

Angela Merkel is keen to show her support for EU efforts to diversify away from Russian gas © AFP<br />

Merkel backs efforts to find alternatives to Russian gas<br />

German chancellor to hold talks in Azerbaijan on boosting Caspian gas supplies to EU<br />

Guy Chazan<br />

Chancellor Angela Merkel<br />

will visit Azerbaijan this<br />

week for talks on boosting<br />

supplies of Caspian gas to Europe,<br />

as the US steps up pressure<br />

on Berlin over the Nord Stream 2<br />

pipeline that will bring gas directly<br />

from Russia to Germany.<br />

A senior German official said<br />

Germany had a “big interest” in<br />

developing the so-called “southern<br />

gas corridor” linking Azerbaijan<br />

to Europe via Turkey, pointing<br />

out that it was an important part<br />

of EU efforts to diversify the continent’s<br />

supply of gas and secure<br />

alternatives to energy imports<br />

from Russia.<br />

He said Germany would like to<br />

see the corridor expanded to take<br />

in gas from other states, such as<br />

Turkmenistan, Iran and Iraq.<br />

Ms Merkel is keen to show her<br />

support for EU efforts to diversify<br />

away from Russian gas amid growing<br />

criticism of Germany’s support<br />

for Nord Stream 2, a project<br />

that critics say will increase the<br />

continent’s reliance on Russian<br />

hydrocarbons.<br />

Nord Stream 2 will also allow<br />

Russia to bypass Ukraine’s gas<br />

pipeline system, depriving it of<br />

lucrative transit fees and leaving<br />

it more exposed to pressure from<br />

TSA art writing master class calls for application<br />

The Sole Adventurer (TSA)<br />

Cultural Foundation, a foundation<br />

set up for projects<br />

connecting culture, society and<br />

education, has call for applications<br />

for the TSA Art Writing Master Class.<br />

The master class will be facilitated<br />

by renowned Princeton University<br />

professor of Art History, Chika<br />

Okeke-Agulu.<br />

The master class is designed<br />

as an intensive programme for art<br />

writers and journalists with keen<br />

interest in advancing their craft of<br />

art writing. It is also set up to drive<br />

interactions between accomplished<br />

art professionals and a new generation<br />

of art writers, and to redirect<br />

critical thinking and writing in the<br />

West African art scenes.<br />

This first TSA art writing master<br />

class organised in partnership with<br />

the Goethe-Institut will take place<br />

from Tuesday 30th October to Saturday<br />

3rd November. Participants<br />

will be guided through a mastery of<br />

cognitive and linguistic elements in<br />

Moscow as it continues to fight<br />

Russia-backed separatists in the<br />

east of the country.<br />

Ms Merkel is visiting Baku as<br />

plans proceed to build a pipeline<br />

bringing gas from Azerbaijan’s vast<br />

Shah Deniz 2 field to the EU. The<br />

$40bn, 3,500km conduit is one of<br />

the biggest infrastructure projects<br />

in the global oil and gas industry.<br />

The German official welcomed<br />

an agreement reached earlier this<br />

month between the Caspian littoral<br />

states — Russia, Iran, Kazakhstan,<br />

Azerbaijan and Turkmenistan<br />

— on a legal framework for<br />

sharing the Caspian, the world’s<br />

largest inland body of water.<br />

He said the deal, which raised<br />

the prospect of an end to 27 years<br />

of diplomatic wrangling over the<br />

Caspian’s status, could turn out<br />

to be a “first step” towards the<br />

construction of a Trans-Caspian<br />

Pipeline that would bring gas<br />

from Turkmenistan to Azerbaijan<br />

— and thus “help to diversify”<br />

Europe’s energy imports.<br />

He stressed, however, that such<br />

a project would be “difficult”, and<br />

there were “other important legal<br />

issues that remain to be resolved”.<br />

Germany has come under<br />

mounting criticism over its role<br />

in the Nord Stream 2, a €9.5bn<br />

pipeline that will directly connect<br />

the world’s biggest exporter of<br />

art writing. There will be writing exercises,<br />

reviews of specific artworks<br />

and artists, visits to selected exhibitions<br />

showing in Lagos at this time<br />

and a final writing project that will<br />

be considered for publishing in notable<br />

print and online publications.<br />

Outstanding participants will have<br />

opportunities such as nominations<br />

for international residencies.<br />

The master class offers practising<br />

art writers/journalists the opportunity<br />

to hone their skills in art<br />

criticism, one-on-one sessions with<br />

the workshop facilitator, in-depth<br />

research on the craft of writing<br />

about the arts and developing content,<br />

argument, and a compelling<br />

voice in art writing.<br />

To be considered for the master<br />

class, applicants are required<br />

to have a portfolio of published<br />

writings in print and/or online<br />

publications, be an art writer and/<br />

or journalist from West African<br />

countries, have a post-secondary<br />

qualification, and be proficient in<br />

natural gas with Europe’s largest<br />

economy.<br />

The new line and the existing<br />

trans-Baltic link Nord Stream<br />

1 will together be able to carry<br />

110bn cubic metres a year of natural<br />

gas, enough to meet almost a<br />

quarter of total demand across<br />

the EU.<br />

How Russian gas became Europe’s<br />

most divisive commodity<br />

At the Nato summit in Brussels<br />

last month, US president Donald<br />

Trump fiercely criticised Nord<br />

Stream 2, saying Germany was<br />

buying so much Russian gas that it<br />

had become a “captive” of Moscow.<br />

Ms Merkel has addressed the<br />

criticism by seeking to win assurances<br />

from Russia that it would<br />

continue to send gas through the<br />

Ukrainian transit system even after<br />

Nord Stream 2 comes on line. The issue<br />

was one of the topics discussed<br />

by Ms Merkel and Russian president<br />

Vladimir Putin at their talks in<br />

Meseberg, the German government<br />

guest house, at the weekend.<br />

The EU and US have long championed<br />

the southern corridor as<br />

a way for Europe to reduce its<br />

dependence on Russian gas. The<br />

project, which will bring Caspian<br />

gas through three linked pipelines<br />

from Azerbaijan to southern Italy,<br />

has been designated one of the<br />

EU’s “priority projects”.<br />

both written and spoken English.<br />

Participants will be selected by<br />

independent art professionals who<br />

are not members of TSA Cultural<br />

Foundation and TSA Art Magazine<br />

The facilitator, Chika Okeke-<br />

Agulu is an artist, curator, critic<br />

and art historian. He is director of<br />

Graduate Studies, Department of<br />

Art and Archaeology at Princeton<br />

University, and specializes in classical,<br />

modern, and contemporary<br />

African and African Diaspora art<br />

history and theory.<br />

He previously taught at The<br />

Pennsylvania State University,<br />

University of Nigeria, Nsukka, and<br />

Yaba College of Technology, Lagos.<br />

He began his career in Lagos as an<br />

art critic for the newspapers African<br />

Concord, Daily Times and Guardian.<br />

His many awards include Frank<br />

Jewett Mather Award for Distinction<br />

in Art Criticism (2016), and Melville<br />

J. Herskovits Prize for the Most Important<br />

Scholarly Work in African<br />

Studies (2016).<br />

Journalists’ deaths highlight<br />

Russia’s moves into Africa<br />

Murder in the Central African Republic highlights<br />

Moscow’s latest geopolitical ambition<br />

Max Seddon and Tom Wilson<br />

The team of Russian journalists<br />

who flew into the Central African<br />

Republic last month were<br />

on a mission to investigate Moscow’s<br />

growing role in one of the world’s<br />

poorest nations.<br />

Days after arriving, the three men<br />

were murdered by unknown assailants.<br />

Their local driver told CAR<br />

authorities that they were killed at<br />

a roadside checkpoint by turbanwearing<br />

men speaking Arabic or a<br />

similar language.<br />

While the killings are still being<br />

investigated, the case highlights<br />

Russia’s increasing presence in the<br />

CAR, a country that has become a<br />

staging point for Moscow’s latest<br />

geopolitical ambition — a push<br />

into Africa.<br />

It has also raised questions about<br />

the nature of Russia’s involvement:<br />

the journalists were said by the<br />

publication who sent them to be<br />

looking into the CAR activities of a<br />

controversial Russian businessman<br />

with ties to the Kremlin.<br />

An influential backer of communism<br />

across Africa for decades,<br />

Moscow ceded influence to western<br />

rivals after the collapse of the<br />

Soviet Union. More recently, China<br />

has made huge inroads, investing<br />

$<strong>22</strong>0bn in 2014 alone.<br />

Now Russia’s move into the CAR<br />

— and in several other African nations<br />

— suggests a new willingness<br />

to re-engage and catch up for lost<br />

time. “We are well behind everyone,<br />

but it’s temporary,” said Evgeny<br />

Korendyasov, a former ambassador<br />

to a number of African countries.<br />

“Now we are trying to correct that<br />

and use our competitive advantage<br />

when we can.”<br />

So far this year Russia has struck<br />

military co-operation deals with<br />

the Democratic Republic of Congo,<br />

Ethiopia, Guinea and Mozambique.<br />

Others, including Nigeria and Angola,<br />

have agreed to buy arms from<br />

Moscow or are working with Russia<br />

to exploit mineral deposits.<br />

“We have the competitive advantage<br />

in the arms trade because we<br />

have a better cost-benefit ratio,” Mr<br />

Korendyasov said. “The Africans like<br />

that better because it is more at the<br />

level they can afford.”<br />

Russia’s involvement in the CAR<br />

began in December when a team<br />

of military instructors and 170 “civilian<br />

advisers” arrived in Bangui<br />

to train the country’s army and<br />

presidential guard. Nine weapons<br />

shipments have arrived in the CAR<br />

capital since.<br />

Though Faustin-Archange Touadéra,<br />

CAR president, has restored<br />

some semblance of government<br />

since taking power in 2016, 80 per<br />

cent of the country is still controlled<br />

by more than a dozen rebel groups.<br />

“Russia is intensifying its relationships<br />

in Africa and CAR is one<br />

of their entry points,” said Thierry<br />

Vircoulon, a central Africa expert<br />

with the International Crisis Group.<br />

“The government is weak so it’s an<br />

easy target.”<br />

After meeting Russia’s President<br />

Vladimir Putin in St Petersburg in<br />

June, Mr Touadéra expressed hopes<br />

for “more active co-operation”. His<br />

national security adviser is a Russian<br />

and Russians have formed part of his<br />

presidential guard.


Wednesday <strong>22</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

@ FINANCIAL TIMES LIMITED<br />

Bill Gross’s bond fund hit by<br />

wave of investor redemptions<br />

Legendary manager now oversees $1.2bn, compared with $300bn during peak<br />

Owen Walker<br />

Bill Gross, once renowned<br />

as the<br />

world’s top fixed-income<br />

manager, has<br />

seen his fund fall in<br />

value by 40 per cent this year<br />

as investors abandon the onetime<br />

“bond king” following<br />

an extended period of weak<br />

performance.<br />

Investors have withdrawn<br />

$834m from the Janus Henderson<br />

Global Unconstrained<br />

Bond fund, which now manages<br />

just $1.2bn, according to<br />

Morningstar, the data company.<br />

The latest outflows mark a<br />

fresh low point for a manager<br />

who once controlled a $300bn<br />

bond fund, the world’s largest,<br />

when he was employed<br />

by Pimco.<br />

“It is not surprising that he<br />

has not been able to attract the<br />

staggering levels of money he<br />

managed at Pimco,” said Randy<br />

Waesche, chief executive of Resource<br />

Management, a financial<br />

advice group. “Investors do not<br />

flock to funds that consistently<br />

lose money.”<br />

Mr Gross’s fund has now<br />

dropped to last place in Morningstar’s<br />

non-traditional bond<br />

fund category after recording<br />

negative returns of 6.5 per cent in<br />

the first seven months of the year.<br />

Bond funds have been ravaged<br />

this year as investors have<br />

fled in response to rising interest<br />

rates. Several top-selling funds<br />

from 2017 have haemorrhaged<br />

cash in the first six months of<br />

the year.<br />

It is unclear how much of the<br />

What has been labelled the<br />

most hated bull market<br />

in US history is poised to<br />

become the longest.<br />

As of Wednesday’s close, the<br />

benchmark S&P 500 will have gone<br />

3,453 days without a drop of 20 per<br />

cent or more, the decline typically<br />

associated with a bear market. That<br />

would put this rally past the length<br />

of the 1990-2000 one.<br />

Investors cite several factors behind<br />

the staying power of the latest<br />

bull run, including the depths from<br />

which the current rally began in the<br />

brutal aftermath of the financial<br />

crisis and the anaemic nature of the<br />

economic recovery.<br />

“That has caused interest rates<br />

and the Fed to be so much more<br />

accommodative for so much longer<br />

than other bull markets that it has<br />

helped to elongate it,” said William<br />

Smead, chief investment officer at<br />

Smead Capital Management.<br />

With central banks’ stimulus,<br />

rather than white-hot economic<br />

growth, fuelling the rise from the<br />

FINANCIAL TIMES<br />

C002D5556<br />

COMPANIES & MARKETS<br />

$1.2bn Mr Gross manages is on<br />

behalf of external clients. He<br />

personally invested $700m in the<br />

fund when he started running it<br />

four years ago.<br />

Mr Gross has been on the<br />

wrong end what he has called<br />

the “trade of the year”, betting<br />

that German government bond<br />

prices would fall as US Treasurys<br />

rise. His fund also lost more than<br />

3 per cent in value on a single day<br />

in May as fixed-income markets<br />

were rocked by the Italian financial<br />

crisis.<br />

Dick Weil, who recently become<br />

sole chief executive of Janus<br />

Henderson, this month told<br />

CNBC that Mr Gross had “made<br />

some bad bets”.<br />

Mr Weil, a former Pimco executive<br />

who was instrumental<br />

in bringing Mr Gross to Janus<br />

Capital in 2014, said at the time:<br />

“He believes still in his basic<br />

presumption that inflation is<br />

not going to get out of control.<br />

And so he hasn’t lost faith in his<br />

fundamental view. But he’s been<br />

wrong and wrong badly in the<br />

short term. And he’s accountable<br />

and we’re accountable for that.”<br />

Mr Waesche added: “Mr<br />

Gross will be remembered as<br />

one of many talented investment<br />

advisers that did well for a time,<br />

but ultimately lost to the vagaries<br />

of the market.”<br />

George Soros was one of Mr<br />

Gross’s early backers at Janus,<br />

but pulled $500m from the fund<br />

in 2015 as losses began to mount.<br />

Janus Henderson did not immediately<br />

respond to a request<br />

for a comment. The fund’s flows<br />

and performance data were first<br />

reported by Ignites, an FT news<br />

service.<br />

US bull market poised to become its longest<br />

S&P 500 is set to have gone 3,453 days without a drop of 20% or more<br />

Nicole Bullock<br />

post-crisis lows of March 2009,<br />

investors have been reluctant to<br />

embrace this Wall Street bull.<br />

“It has been the most hated bull<br />

market of all time — no one has ever<br />

wanted to believe in it,” said Barry<br />

Gill, head of active equities at UBS<br />

Asset Management. “A large part of<br />

the market has had that scepticism,<br />

largely driven by the unorthodox<br />

amount of monetary stimulus.”<br />

Gains for shares of technology<br />

companies, particularly the Faangs,<br />

have led the market in recent years.<br />

Investors betting on Facebook,<br />

Apple, Amazon, Netflix and Google’s<br />

parent Alphabet have reaped outsized<br />

rewards as their products and<br />

services became more integrated<br />

in people’s everyday lives over the<br />

past decade.<br />

While the 2009-<strong>2018</strong> bull market<br />

may become the longest, it is far<br />

from being the most lucrative.<br />

On an annualised basis, the gain<br />

would be about 16.5 per cent, compared<br />

with an average of <strong>22</strong> per cent<br />

for bull markets calculated by S&P<br />

500 Dow Jones Indices and 35.5 per<br />

cent for the 1932-1937 rally.<br />

Investors have been waiting for the president to bash a strong dollar<br />

Roger Blitz<br />

BUSINESS DAY<br />

A3<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 />

Federal Reserve now firmly a target of Trump’s ire<br />

Since November when Donald<br />

Trump nominated him as Federal<br />

Reserve chair, Jay Powell<br />

must have expected the president<br />

to criticise his performance.<br />

So the US president’s view, expressed<br />

in a Reuters interview on<br />

Monday, that he was “not thrilled”<br />

about rising interest rates, should<br />

be no surprise. “I’m a low-interestrate<br />

person,” said Mr Trump on<br />

the campaign stump in May 2016.<br />

Nor is it surprising that the<br />

president’s views on monetary<br />

policy are inconsistent. He often<br />

denounced the Fed over quantitative<br />

easing. In February 2016, Mr<br />

Trump said low interest rates were<br />

creating a “big, fat, juicy bubble”.<br />

Mr Powell might not be losing<br />

any sleep over the comments, but<br />

markets are — the dollar weakened.<br />

Rabobank analyst Jane Foley<br />

suggested two reasons: “the power<br />

of the president’s words” and a fall<br />

in the Fed’s credibility.<br />

The first is well known, even if<br />

investors should by now be anaesthetised<br />

to the president’s frequent<br />

IG Index, Europe’s largest online<br />

trading website, appeared in<br />

court on Tuesday to fight a claim<br />

that it encouraged a UK businessman<br />

to place “risky” trades that were<br />

“against his best interests”, wooing<br />

him with hospitality and gifts.<br />

Peter Quinn, a Manchesterbased<br />

businessman, is suing IG<br />

after he lost at least £2m making<br />

spread bets via IG between 2010<br />

and 2014.<br />

Spread bets allow traders to<br />

borrow money to bet on the price<br />

movements of underlying assets<br />

such as shares or currencies,<br />

without having to own them. Inexperienced<br />

traders can lose a lot<br />

of money through spread betting,<br />

making it the focus of a recent<br />

regulatory clampdown.<br />

Mr Quinn has accused IG of<br />

failing to adequately test the appropriateness<br />

of the products for him<br />

fulminations. The second preys<br />

on something that was always in<br />

investors’ minds when the president<br />

appointed Mr Powell — just<br />

how much of an influence would<br />

Mr Trump bring to bear on an<br />

institution whose independence<br />

is prized?<br />

Given the number of institutions<br />

Mr Trump has sought to<br />

undermine — from the FBI to the<br />

Department of Justice — it was<br />

surely only a matter of time before<br />

the Fed became a presidential<br />

target.<br />

His intervention promises to<br />

enliven coverage of Mr Powell’s<br />

speech at the central bankers’<br />

symposium at Jackson Hole in<br />

Wyoming, on Friday. But the<br />

impact will be more long-lasting<br />

because Mr Trump’s remark was<br />

not a one-off.<br />

Investors have been waiting for<br />

the White House to jawbone lower<br />

the ever-stronger dollar, which has<br />

been propelled higher by expectations<br />

of tighter Fed policy into<br />

2019. Not lost on investors in the<br />

Reuters interview were disparaging<br />

comments about the renminbi<br />

when he first opened his account<br />

with no previous spread betting<br />

experience, or at any later date.<br />

According to his claim, IG staff<br />

also “induced” him to continue<br />

spread betting after he had started<br />

to suffer big losses and demonstrated<br />

a “propensity to gamble”,<br />

by gifting him wines and inviting<br />

him to racing events for example.<br />

IG denies any wrongdoing, saying<br />

in court documents that any<br />

damage suffered by Mr Quinn was<br />

“wholly caused and/or contributed<br />

to by [his] negligence” when he<br />

chose to place the bets of his own<br />

accord.<br />

According to IG’s defence, Mr<br />

Quinn understood the risks he was<br />

taking and underwent a proper<br />

“onboarding” assessment. This<br />

included signing a customer agreement<br />

and agreeing that he had read<br />

the company’s risk disclosures.<br />

Giving evidence on Tuesday,<br />

Bridget Messer, IG’s chief commercial<br />

officer, told the court it<br />

and the euro being “manipulated”<br />

lower.<br />

Analysts were musing about<br />

how Mr Trump was probably<br />

looking beyond the midterm<br />

elections to his own re-election<br />

campaign to paint the Fed as just<br />

another establishment bad guy,<br />

so that when stock markets do fall<br />

and the economy turns down the<br />

president can deflect the blame.<br />

It clearly suits the president to<br />

create confrontation. Each time<br />

the Fed chair speaks publicly, investors<br />

and analysts will zero in on<br />

any attempt by Mr Powell to stiffen<br />

his central bank’s independence<br />

backbone. Which is why Gregory<br />

Perdon of Arbuthnot Latham expects<br />

Mr Powell to seek the moral<br />

high ground and “try to avoid at all<br />

costs a public bickering with the<br />

president. It would be very unFedlike<br />

to get into a spat.”<br />

Mr Powell would prefer investors<br />

also avoided distractions to<br />

focus on data in order to determine<br />

whether his interest rate<br />

policy stacks up. His problem is<br />

that the president has sowed a<br />

seed of doubt in their minds.<br />

IG Index fights claim it encouraged ‘risky’ trades<br />

Customer sues after losing at least £2m making spread bets between 2010 and 2014<br />

Hannah Murphy<br />

was not IG’s duty to stop a client<br />

“who understands the risks [and]<br />

knows what he’s doing” from trading<br />

based on “whether or not he is<br />

a bad or a good trader”.<br />

She said that Mr Quinn had not<br />

undergone a further appropriateness<br />

test at a later point when his<br />

account was upgraded, but that<br />

he would have passed this had he<br />

done so.<br />

While the company invited Mr<br />

Quinn to events and lunches, this<br />

also did not break any rules, IG<br />

said. Peter Hetherington, chief executive<br />

of IG, attended the hearing<br />

on Monday and Tuesday.<br />

Mr Quinn is claiming at least<br />

£2m in losses and damages in the<br />

civil case, which comes weeks after<br />

European regulators introduced<br />

tough restrictions on trading sites.<br />

The rules include reductions in the<br />

amount traders can borrow to increase<br />

their bets, as well as a ban on<br />

offering traders bonuses or other<br />

benefits if they open accounts.


A4 BUSINESS DAY<br />

C002D5556 Wednesday <strong>22</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

FT<br />

ANALYSIS<br />

Air pollution: Why London struggles to breathe<br />

The UK capital was a pioneer in limiting cars, but it is now almost as dirty as New Delhi or Beijing<br />

Leslie Hook and Steven Bernard<br />

don. But in terms of nitrogen dioxide,<br />

which inflames lungs and is linked<br />

to shorter life expectancy, London<br />

is nearly as bad as the Chinese and<br />

Indian capitals — and much worse<br />

than other developed cities such as<br />

New York or Madrid.<br />

This is despite dramatic shifts<br />

in transport policy with increased<br />

cycling and a congestion charge<br />

helping to reduce the number of vehicles<br />

on the roads in central London<br />

by 25 per cent in the past decade.<br />

Yet despite its pioneering schemes,<br />

road works, cycle lanes and the rise<br />

of private hire vehicles has slowed<br />

traffic to a crawl.<br />

“These are the trenches,” says<br />

Simon Birkett, a banker-turned-aircampaigner<br />

who founded Clean Air<br />

London, a non-profit organisation.<br />

“If you cannot tackle this problem,<br />

which is much more tangible for<br />

people, you can forget about other<br />

Four years ago Sophie<br />

Power was walking along<br />

Marylebone Road, thinking<br />

of the son she was<br />

pregnant with at the time.<br />

The buses, lorries and cabs clogging<br />

the central London thoroughfare<br />

make it one of the most polluted<br />

places in the UK.<br />

“I wondered how to protect him,”<br />

she says, pointing to a study that<br />

found children in polluted areas<br />

develop stunted lung capacity that<br />

is 8 to 10 per cent smaller as a result.<br />

“The pollution inevitably has an<br />

impact,” she says.<br />

Although London’s air often appears<br />

clear to the naked eye, the city<br />

has suffered from illegal levels of<br />

air pollution since 2010, with particularly<br />

dangerous levels of nitrogen<br />

dioxide, which comes mainly from<br />

diesel vehicles. This summer’s unusually<br />

hot and sunny weather has<br />

caused surges in ozone — produced<br />

when sunlight reacts with nitrogen<br />

dioxide — that have prompted multiple<br />

pollution warnings.<br />

While cities such as Beijing or<br />

New Delhi usually attract more<br />

headlines, the stubborn air pollution<br />

in London shows just how intractable<br />

the problem can be. Under some<br />

measures, such as extremely small<br />

air particles, the smog in New Delhi<br />

and Beijing is much worse than Lonproblems,”<br />

he says, pointing out<br />

that climate change is much more<br />

complex.<br />

With the growing amount of<br />

research and political attention<br />

focused on air pollution, experts<br />

sometimes draw analogies to the<br />

way the Great Smog of 1952 radically<br />

changed how the city thought about<br />

its air. “We are in a similar moment<br />

now,” says one local official. “It’s not<br />

as visible, but because the particles<br />

are so small, the actual health effects<br />

can be more significant.”<br />

Shirley Rodrigues, London’s<br />

deputy mayor, says the city has<br />

reached a “tipping point” in terms of<br />

taking action. “It’s not only [because<br />

of] the thousands of deaths brought<br />

on early, but also the pernicious,<br />

chronic illnesses that are costing the<br />

health service a lot of money,” she<br />

says. “It is affecting quality of life.”<br />

The slowest bus routes in London<br />

This urgency has been compounded<br />

by a series of lawsuits in<br />

which judges ruled the government<br />

was not doing enough to comply<br />

with the EU’s legally binding air pollution<br />

limits.<br />

Part of the reason for the shift is<br />

that a lot more is now known about<br />

how air pollution impacts human<br />

health: In London air pollution contributes<br />

to more than 9,000 premature<br />

deaths each year, according to a<br />

study by King’s College. This month<br />

researchers at Queen Mary University<br />

of London found that even very<br />

small amounts of pollution were<br />

linked to changes in heart structure.<br />

Ms Power’s concern about her<br />

own exposure to air pollution led her<br />

to launch an air filtration company,<br />

Airlabs, which has created pilot clean<br />

air zones at bus stops and in schools.<br />

Her second child, just three months<br />

old, has a personal air filter inside<br />

his pram.<br />

While London’s air monitoring<br />

stations show that pollution has been<br />

slowly improving in recent years by<br />

most measures, Ms Power points<br />

out that individual exposure can be<br />

much worse than the monitors suggest.<br />

“Overall, the picture in London<br />

is not getting materially better.”<br />

Sadiq Khan, who became mayor<br />

in 2016, has made fighting air pollution<br />

a key priority, with a new<br />

ultra-low emission zone for central<br />

London and a commitment to spend<br />

£800m on air quality initiatives over<br />

five years.<br />

Government modelling suggests<br />

that London air will not comply with<br />

legal limits until 2025.<br />

Car journey times in Central London<br />

are double the rest of the capital<br />

To understand how London’s air<br />

got so bad in the first place, look no<br />

further than Upper Thames Street,<br />

which stretches from London Bridge<br />

toward Blackfriars, near the riverbank.<br />

As fitness-minded runners jog<br />

by, a stream of slow-moving traffic,<br />

mostly lorries and vans delivering<br />

to the city, stops and starts ahead of<br />

a set of traffic lights.<br />

At an office building on the corner<br />

of Thames Street and Cousin<br />

Lane, the vials and tubes of the<br />

monitoring station protrude from<br />

an entrance. The data they gather<br />

show the highest pollution in all of<br />

London, with nitrogen dioxide levels<br />

exceeding critical levels more than<br />

120 times last year. (The legal limit<br />

is 18 times a year.) The City of London,<br />

the traditional financial district<br />

which is distinct from the Greater<br />

London Authority that covers the entire<br />

metropolis, is home to two of the<br />

five worst hotspots on this measure.<br />

City officials blame the Square<br />

Mile’s combination of medieval<br />

street design, high buildings, and<br />

persistent pollution from vehicle<br />

emissions. As in the rest of London,<br />

the congested traffic and diesel vehicles<br />

are two key culprits. “A lot of<br />

the pollution that we breathe on the<br />

streets around us, and the hotspots,<br />

are caused by diesel vehicles in<br />

London,” says Gary Fuller, the King’s<br />

College scientist who developed<br />

the London Air Quality Network of<br />

monitoring stations.<br />

London among the most polluted<br />

cities in the world by nitrogen<br />

dioxide<br />

When London missed the binding<br />

air quality EU limits that came<br />

into force in 2010, it was largely due<br />

to diesel vehicles, Mr Fuller says,<br />

because they emitted higher levels<br />

of nitrogen dioxide in the real world<br />

than in lab tests.<br />

The legacy of diesel, initially billed<br />

as a cleaner fuel because it produces<br />

less carbon dioxide, has plagued<br />

other European capitals such as<br />

Madrid and Paris.<br />

In London, congestion has<br />

compounded the effect of the<br />

diesel fumes. Traffic speeds in<br />

central London average eight<br />

miles per hour on weekdays —<br />

a figure that has decreased in<br />

recent years. Although the total<br />

number of vehicles entering central<br />

London has fallen by about<br />

30 per cent since the congestion<br />

charge was introduced, the number<br />

of private hire vehicles entering<br />

central London — where they<br />

are exempt from the charge — has<br />

more than quadrupled over the<br />

same period.<br />

“The medieval road system, if<br />

you look at the layout and the size<br />

of the roads, they were originally<br />

designed for horse and cart,” says<br />

Ruth Calderwood, City of London air<br />

quality manager.<br />

Road works, private hire vehicles<br />

and online delivery vans have<br />

all contributed to the congestion<br />

problem, according to Transport<br />

for London, which is considering<br />

whether to extend the congestion<br />

charge to private hire vehicles. The<br />

stop-and-go nature of congested<br />

traffic exacerbates vehicle emissions,<br />

which are often highest when<br />

a vehicle is accelerating.<br />

Political inaction has also played<br />

a part. But in the years since then,<br />

air pollution has not always been a<br />

high priority. When Boris Johnson<br />

was mayor, between 2008 and 2016,<br />

he scrapped an extension of the<br />

congestion zone, and delayed plans<br />

for a low-emission zone.<br />

Mr Khan, himself an asthma<br />

sufferer, has put pollution higher on<br />

the agenda. The congestion charge<br />

has been augmented by a T-charge<br />

on the most polluting vehicles (“T”<br />

stands for toxicity). That will be<br />

replaced next year by an “ultra-low<br />

emission zone” charging older vehicles.<br />

Since the beginning of the<br />

year, all new single-decker buses are<br />

zero-emission, and new taxis must<br />

be hybrid or electric.<br />

By some measures London’s<br />

air compares favourably with other<br />

cities<br />

But even as the new ultra-low<br />

emission zone penalises polluting<br />

vehicles, some environmental advocates<br />

say a more nuanced road<br />

system is needed, one that charges<br />

cars according to how much they<br />

drive, where they drive, and how<br />

much they emit.<br />

“We are sitting on a bit of a health<br />

time bomb here,” says Caroline Russell,<br />

a member of the London Assembly<br />

for Britain’s Green party. “We<br />

really need to be making sure people<br />

see how much better our lives could<br />

be if we had a less car-dependent<br />

transport system.”<br />

London’s NO2 levels are gradually<br />

improving<br />

Brexit could present a further<br />

challenge for London’s fight to clear<br />

its air, because EU laws have until<br />

now provided the strictest air quality<br />

standards that the UK is obliged<br />

to meet. Last month, a clean air bill<br />

was introduced in the House of Lords<br />

that would make clean air a human<br />

right, and mandate that air quality be<br />

taken into consideration with all new<br />

government policies.<br />

“The concern post-Brexit is that if<br />

that falls away, there is a real risk that<br />

ambition will fall away even further<br />

on this issue,” says Katie Nield, a<br />

lawyer with ClientEarth, a non-profit<br />

group.<br />

In May, the Department for Environment,<br />

Food and Rural Affairs<br />

released a draft clean air strategy<br />

that described air quality as the<br />

“largest environmental health risk”<br />

in the UK.


BUSINESS DAY<br />

Opinion<br />

BELL IHUA<br />

Dr. Bell Ihua is a public opinion<br />

polling expert and Chief Executive<br />

Officer at NOIPolls. He writes from<br />

Abuja.<br />

It was Falz the bahd guy<br />

who recently called out<br />

critics for “shooting down<br />

the messenger and missing<br />

the message”, as he responded<br />

to the backlash on<br />

his “This is Nigeria” video.<br />

Perhaps, this is new territory<br />

for Falz, but not so for social<br />

researchers and public opinion<br />

pollsters. We are often<br />

criticized for the results and<br />

findings of our polls; more so,<br />

by people who have neither<br />

read the research report nor<br />

understand the methodology<br />

adopted in conducting the<br />

poll, survey or research study.<br />

The rise or fall of any piece of<br />

research or public opinion<br />

poll lies in its methodology. In<br />

other words, what determines<br />

whether anyone should give<br />

a hoot about the findings of a<br />

poll or what confers credibility<br />

on any piece of research are<br />

NEWS YOU CAN TRUST I WEDNESDAY <strong>22</strong> AUGUST <strong>2018</strong><br />

Who is scared of public opinion polls?<br />

in its ability to answer some<br />

questions – how was the poll<br />

conducted? How was primary<br />

data collected? How were the<br />

questions worded? How representative<br />

is the data? What’s<br />

the sample size of the poll?<br />

And what’s the margin of error,<br />

amongst other questions.<br />

Public opinion polls are<br />

an essential part of the politics,<br />

democracy, markets and<br />

social life in developed societies.<br />

From political predictions<br />

and approval ratings, to titles<br />

of Hollywood movies and<br />

song-of-the-week picks, polls<br />

are tools used to measure and<br />

gauge public opinion on issues<br />

affecting the society. Let’s<br />

take a step backward to define<br />

“public opinion”; it simply<br />

refers to the mind, thought<br />

and expression of the general<br />

population on a particular issue<br />

or subject matter.<br />

Is public opinion polling<br />

new?<br />

Certainly not, polling isn’t<br />

new. It was Jacques Necker,<br />

French statesman and Finance<br />

Minister under King Louis XVI,<br />

who in the 18th century, first<br />

emphasized the importance<br />

of L’opinion publique, as he<br />

advocated for the publishing<br />

of government accounts<br />

and budgets in order to boost<br />

public confidence in the years<br />

preceding the French Revolution.<br />

However, public opinion<br />

polling was popularized in<br />

America. It was George Gallup,<br />

founder of the renowned Gallup<br />

Poll and father of public<br />

opinion polling, who in the<br />

1930s concluded that there<br />

was no difference between<br />

polling on toothpaste and<br />

politics. In recent times too,<br />

pollsters like Stanley Greenberg,<br />

have been hailed as<br />

the father of modern polling<br />

techniques and described as<br />

a man who doesn’t just have<br />

a finger on the people’s pulse,<br />

but has an IV injected into it.<br />

How useful are polls?<br />

For governance to be effective,<br />

it must be inclusive<br />

and participatory. Opinion<br />

polling is significant tool that<br />

can enhance inclusiveness<br />

and participation in governance.<br />

In the United States for<br />

instance, polling has become<br />

an entrenched part of democracy,<br />

as the need to understand<br />

what the public think is<br />

considered to be at the heart of<br />

governance. This disposition<br />

was aptly captured by Abraham<br />

Lincoln, who was quoted<br />

to have said “what I want to get<br />

done is what the people desire<br />

to have done, and the question<br />

for me is how to find that out<br />

exactly.” President Franklin<br />

When we say a poll is<br />

“scientific”, it simply<br />

means the poll has been<br />

conducted through a set<br />

of rigorous processes and<br />

quality control mechanism<br />

to produce certain<br />

results; and that those<br />

processes can be replicated<br />

to produce about<br />

the same result, with<br />

some level of confidence<br />

and percentage of replicability<br />

Roosevelt relied on pollsters<br />

like Emil Hurja and Princeton<br />

professor Hadley Cantrill to<br />

shape strategies and public<br />

policy; same with President JF<br />

Kennedy. Likewise, President<br />

Ronald Reagan’s White House<br />

relied on polling support from<br />

Dr. Richard Wirthlin; while<br />

Presidents Bill Clinton and<br />

George W. Bush relied heavily<br />

on the polling gurus like<br />

Jeremy Rosner, Justin Wallin<br />

and Al Quinlan. Apart from<br />

the United States, there’s evidence<br />

to suggest that several<br />

global leaders and members<br />

of parliament (MPs) have in<br />

the recent decades relied on<br />

opinion research to help shape<br />

public policyand reforms in<br />

their countries–from Prime<br />

Ministers Tony Blair and Julia<br />

Gillard, to Presidents Nelson<br />

Mandela, Mikheil Saakashvili,<br />

and Viktor Yushchenkoto<br />

mention a few.<br />

Conducting scientific<br />

polls<br />

Beyond media vox-pop<br />

and adhoc straw polls, which<br />

involve people responding<br />

to a set of questions without<br />

reference to how respondents<br />

are selected; there are certain<br />

indicators that can make a<br />

poll, survey or research study<br />

scientific. When we say a poll<br />

is “scientific”, it simply means<br />

the poll has been conducted<br />

through a set of rigorous processes<br />

and quality control<br />

mechanism to produce certain<br />

results; and that those<br />

processes can be replicated to<br />

produce about the same result,<br />

with some level of confidence<br />

C002D5556<br />

and percentage of replicability.<br />

Several terminologies can be<br />

associated with polling, such<br />

as: Research population, Sampling<br />

technique, Sample size,<br />

Fielding and data collection,<br />

CAPI and PAPI, Questionnaire<br />

design, Question wording,<br />

margin of error, randomization<br />

and stratification amongst<br />

others. These would normally<br />

make up a full module in a<br />

survey research course, or an<br />

article for another day. My<br />

intention isn’t to make readers<br />

polling experts from this one<br />

article; but to help demystify<br />

the myth often associated with<br />

public opinion polls in Nigeria,<br />

and appreciate what makes<br />

good versus bad polls. Consequently,<br />

I would like to touch<br />

on a few of those terminologies<br />

that I consider fundamental to<br />

public opinion polling.<br />

Research population<br />

All polls are based on samples<br />

drawn from larger populations.The<br />

purpose of every<br />

opinion poll is to attempt to use<br />

a sample to make inferences or<br />

form conclusions on the larger<br />

population. With a population<br />

of between 180 and 200 million<br />

Nigerians, is it possible to<br />

access the entire population<br />

Continues on page 36<br />

Remaking the university tradition: The town and gown model<br />

TUNJI OLAOPA, PHD<br />

Olaopa is Professor of Public<br />

Administration,<br />

Lead City University, Ibadan<br />

tolaopa2003@gmail.com<br />

tolaopa@isgpp.com.ng<br />

The university is<br />

one of the most<br />

fundamental of all<br />

institutions that a<br />

state can leverage as the<br />

turning point for its developmental<br />

efforts. In fact,<br />

the university is a key factor<br />

in the emergence of any developmental<br />

state worthy<br />

of its onions. This is not<br />

only because universities<br />

represent the human capital<br />

development citadel<br />

that defines the contribution<br />

of higher education to<br />

national development, but<br />

essentially also because<br />

universities are the interface<br />

any nation has to the<br />

emerging knowledge society.<br />

Permit me to outline<br />

two quotes that speak to<br />

my reflection about university<br />

tradition. The first<br />

quote is from Benjamin<br />

Disraeli, the former British<br />

prime minister: “A University<br />

should be a place<br />

of light, of liberty, and of<br />

learning.” Let us call this<br />

the idealist understanding<br />

of the university as a place<br />

of sublime thought where<br />

professors and students<br />

contemplate the forms<br />

of good, of the beautiful<br />

and the sublime. This is<br />

an institution that assists<br />

humans to cultivate noble<br />

and cultured conduct<br />

and attitude that goes into<br />

the making of an urbane<br />

intellectual. This was the<br />

original design derived<br />

from Plato’s Academy and<br />

Aristotle’s Lyceum; a place<br />

where people go to contemplate<br />

the universe and<br />

human existence.<br />

However, and like other<br />

human institutions, the<br />

university has also been<br />

subjected to several transformations<br />

arising from<br />

both the benign and tumultuous<br />

social changes that<br />

the human societies and<br />

political communities have<br />

witnessed over the centuries.<br />

Universities have been<br />

transformed from the con-<br />

It is a measure of arrogance<br />

that makes a<br />

university thinks that it<br />

has sufficient capacity to<br />

impose its thoughts and<br />

paradigms on the society<br />

without a corresponding<br />

collaboration with that<br />

society. The town and<br />

gown initiative ensures<br />

that the university draws<br />

on professional and<br />

scholarly elements to<br />

buttress its relevance<br />

towards the society<br />

templative Ivory Towers of<br />

Plato, Aristotle and the medieval<br />

period, to modern<br />

institutions responding to<br />

global capitalism and the<br />

consumerist culture.The<br />

university, in other words,<br />

has now been brought into<br />

serious conversation with<br />

its multiple and often complex<br />

environments. This is<br />

how Alice Waters graphically<br />

depicts the siting of<br />

a particular university:<br />

“I really appreciate the<br />

many neighbourhoods of<br />

Berkeley. There is still the<br />

butcher, the baker and the<br />

candlestick maker. And<br />

it has the University of<br />

California, which is the<br />

greatest gift, to my mind,<br />

to be close to it. It keeps<br />

the place alive.” In this<br />

instance, the University of<br />

California is brought into<br />

constant discourse with<br />

its neighbourhood, in the<br />

same way that most other<br />

universities sited within<br />

the cities are compelled to<br />

dialogue with them.<br />

The neighbourhood or<br />

town imperative becomes<br />

all the more accentuated<br />

when we also factor into<br />

the situation the context<br />

of development for any<br />

nation. The university in<br />

Nigeria is conditioned by<br />

the crisis of development<br />

in Africa. It is within this<br />

context of institutional<br />

reform to regenerate structures<br />

of development that<br />

I have situated myself as<br />

an administrative scholars<br />

and reform advocate. It has<br />

been obvious to me for a<br />

long time that higher education<br />

and the university<br />

specifically, have fundamental<br />

role to play in the<br />

reform architecture of the<br />

Nigerian state. It therefore<br />

seemed the right aspiration<br />

for me to desire to<br />

return to the university at<br />

some point in my career as<br />

a public servant. That point<br />

came in 2015 when I had to<br />

retire from the civil service.<br />

Retirement did not come<br />

as a surprise as I had been<br />

nursing the idea of setting<br />

up a structure within which<br />

administrative, intellectual<br />

and professional ideas<br />

about institutional reforms<br />

could have a space for<br />

synergy.<br />

When the Ibadan<br />

School of Government<br />

and Public Policy (ISGPP)<br />

came into existence, it<br />

contained the germ of an<br />

idea that seems to me to<br />

be similar to what Alice<br />

Waters meant when she<br />

narrated the geographical<br />

location of the University<br />

of California. ISGPP is conceived<br />

to be a center where<br />

town and gown meets, engages<br />

and collaborates on<br />

the reform issues that will<br />

enable the Nigerian state<br />

to perform better than it<br />

is presently doing for the<br />

sake of democratic governance<br />

and development.<br />

This town and gown tradition<br />

came to me easily. It is<br />

one of the most enduring<br />

lessons I learnt from the<br />

bureaucratic leadership<br />

acumen of Chief Simeon<br />

Adebo, and the administrative<br />

achievements of<br />

the old Western Region as<br />

an administrator/scholar.<br />

It was immediately obvious<br />

to Adebo that if he<br />

must succeed as the head<br />

of the civil service under<br />

the political astuteness of<br />

Chief Obafemi Awolowo,<br />

he needed more than the<br />

input of public servants<br />

in the translation of policies<br />

into concrete infrastructures<br />

that benefit the<br />

people. So, he leveraged<br />

the contiguous presence of<br />

Continues on page 36<br />

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WEST AFRICA<br />

ENERGY intelligence<br />

oil gas power<br />

Wednesday <strong>22</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

C002D5556<br />

BUSINESS DAY<br />

POLICY<br />

Saudi Aramco’s<br />

strategic<br />

positioning holds<br />

lessons for NNPC<br />

Page 5<br />

finance people<br />

appointments<br />

L-R: Layi Fatona, managing director, ND Western; Austin Avuru, MD/CEO, Seplat, Godswin Ihetu, out-going chairman, Petroleum Club and Tunde Afolabi, incoming<br />

chairman, Petroleum Club at the annual general meeting of the club in Lagos recently.<br />

Debrief<br />

When will Nigeria’s unsold<br />

Libyan crude still<br />

attracting hefty<br />

freight premiums<br />

Page 6<br />

OPEC weekly basket price<br />

DAY<br />

PRICE<br />

17/8/18 70.36<br />

10/8/18 71.88<br />

3/8/18 72.61<br />

27/7/18 72.81<br />

20/7/18 71.06<br />

Source: OPEC<br />

crude head for China?<br />

FRANK UZUEGBUNAM<br />

China’s biggest oil<br />

suppliers are the<br />

Middle East, Russia<br />

and West Africa but<br />

the United States<br />

has also become an important<br />

global supplier since it opened<br />

up its market for exports in<br />

2016. Right now, Chinese oil<br />

importers are shying away from<br />

buying US crude as they fear<br />

Beijing might soon exclude the<br />

commodity from its tariff list in<br />

a trade dispute between the two<br />

countries.<br />

Not a single tanker has loaded<br />

crude oil from the United<br />

States bound for China since<br />

the start of <strong>Aug</strong>ust, Thomson<br />

Reuters Eikon ship tracking<br />

data showed, compared with<br />

about 300,000 barrels per day<br />

(bpd) in June and July.<br />

It takes an average of 6<br />

months for crude imports from<br />

US to arrive China so the impact<br />

of the Asian country’s stoppage<br />

of oil imports from Trump’s<br />

country may not be reflecting in<br />

the market fundamentals now.<br />

Otherwise, there should be<br />

some impact on Nigeria’s loading<br />

programme now.<br />

Current loading programmes<br />

for Nigeria’s largest<br />

streams show an overhang of<br />

some 30 cargoes persisted from<br />

an originally planned 59 cargoes.<br />

Nigerian differentials has<br />

fallen enough to whittle down<br />

an overhang of unsold cargoes.<br />

Forcados and Bonny Light<br />

were offered at the same levels<br />

around $1.30 above dated Brent<br />

and $1.10 - 1.20 a barrel,<br />

October loading programmes<br />

for Bonny Light,<br />

Qua Iboe and Forcados show<br />

Qua Iboe will be down sharply<br />

at 183,000 bpd down from<br />

253,000 bpd in September.<br />

Bonny Light crude exports<br />

were set at 153,<strong>22</strong>6 barrels<br />

per day (bpd) for October on<br />

five cargoes, in line with September.<br />

Exports of Forcados<br />

crude oil set at 208,161 bpd<br />

for October on nine cargoes of<br />

different sizes, down slightly<br />

from September. The Bonga<br />

schedule has six cargoes for<br />

October.<br />

Can China snap these Nigeria’s<br />

crude overhang to replace<br />

US oil? As the face-off with US<br />

intensifies, China has been<br />

turning to the Middle East, West<br />

Africa and Latin America, according<br />

to shipping data and<br />

traders but how much of that<br />

extra demand is coming to Nigeria<br />

cannot be determined at<br />

this point.<br />

Last year, China imported an<br />

average of 1.48 million barrels<br />

a day from West Africa mainly<br />

from Angola and Nigeria.


Wednesday <strong>22</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

02 BUSINESS DAY<br />

C002D5556<br />

WEST AFRICA<br />

Outlook<br />

Brief<br />

Ghana:<br />

GRA to introduce new<br />

downstream tax model<br />

oil<br />

Sudan:<br />

Sudan wants India’s ONGC<br />

Videsh to withdraw arbitration<br />

over oil payment dues<br />

Sudan wants India’s<br />

ONGC Videsh Ltd<br />

(OVL) to withdraw<br />

arbitration proceedings<br />

against the African<br />

nation as it is making<br />

efforts to mitigate default<br />

on payment of dues, OVL<br />

said in a statement.<br />

Earlier, a Sudanese delegation<br />

including its finance<br />

and foreign affairs minister<br />

met ONGC officials seeking<br />

withdrawal of the arbitration<br />

proceedings. However,<br />

OVL said it would continue<br />

with the arbitration process<br />

and work simultaneously<br />

with Sudan to find out a<br />

suitable mechanism of resolving<br />

the issues.<br />

OVL, the foreign acquisition<br />

unit of Oil and Natural<br />

Gas Corp’s (ONGC),<br />

filed an arbitration claim<br />

earlier this year against the<br />

government of Sudan in a<br />

London court seeking to<br />

recover dues pending for<br />

years from a project hit by<br />

the breakaway of South Sudan<br />

in 2011.<br />

At the centre of the dispute<br />

is ONGC’s 25 percent<br />

stake that the company<br />

had acquired in the Greater<br />

Nile Oil Project (GNOP) in<br />

Sudan in 2003. Other stakeholders<br />

include China’s<br />

China National Petroleum<br />

Corp with a 40 percent<br />

stake and Malaysia’s Petronas<br />

with a 30 percent share.<br />

It will be recalled that<br />

ONGC Videsh Ltd, India’s<br />

flagship overseas oil investment<br />

firm, dragged Sudan<br />

to an international arbitration<br />

court to recover over<br />

$400 million in unpaid oil<br />

dues pending since 2011.<br />

The arbitration claim in<br />

a London court was meant<br />

to recover about $300 million<br />

for oil Sudan bought<br />

from its Greater Nile Oil<br />

Project and another $98.94<br />

million in unpaid pipeline<br />

rent lease.<br />

GNOP consisted of the<br />

upstream assets of on-land<br />

Blocks 1, 2 and 4 spread<br />

over 49,500 sq km in the<br />

Muglad Basin, located<br />

about 780 km South-West<br />

of the capital city of Khartoum<br />

in Sudan. The crude<br />

oil produced from oil field<br />

of GNOP is transported<br />

through a 1,504-km pipeline<br />

to Port Sudan at the<br />

Red Sea.<br />

Upon the secession of<br />

South Sudan from Sudan<br />

in July 2011, the contract<br />

areas of Blocks 1, 2 and 4<br />

which straddle between<br />

Sudan and South Sudan<br />

was split with a major share<br />

of production and reserves<br />

are now situated in South<br />

Sudan.<br />

The Petroleum<br />

Unit and Customs<br />

Division of<br />

the Ghana Revenue<br />

Authority<br />

is introducing a new<br />

model of tax collection for<br />

oil marketing companies<br />

(OMCs) in Ghana. According<br />

to the new system,<br />

OMCs are required to post<br />

their bond and bank guarantees<br />

as security for the<br />

recovery of taxes should<br />

they go out of business.<br />

“Some of the OMCs<br />

have gone into so much<br />

debt that they find it difficult<br />

paying their taxes.<br />

Co-operation has so far<br />

been good but the way<br />

forward now is to fall on<br />

their bonds and bank<br />

guarantees. Once you<br />

come to us under the<br />

bonding system we just<br />

made the deductions<br />

once you default,” Isaac<br />

Crentsil, Petroleum Unit<br />

and Customs Division<br />

commissioner said at a<br />

breakfast meeting in Accra.<br />

The new model is part<br />

of a strategy intended to<br />

reduce revenue leakages,<br />

especially in the petroleum<br />

sector, Crentsil added.<br />

Recently, Ghana’s National<br />

Petroleum Authority<br />

lifted the ban on eight oil<br />

Angola:<br />

Angola aims to boost oil output with new block sale agency<br />

Angola will launch<br />

National Agency<br />

of Petroleum and<br />

Gas, a new agency<br />

to handle oil concessions<br />

as President João Lourenço<br />

pushes ahead with<br />

reforms aimed at boosting<br />

production in Africa’s second<br />

biggest oil industry.<br />

The creation of a National<br />

Agency of Petroleum<br />

and Gas will come<br />

next year and its major<br />

objective will be to manage<br />

and sell oil blocks<br />

which will help to reduce<br />

the near total grip state<br />

energy firm Sonangol has<br />

over the sector.<br />

Since Lourenço became<br />

president in September,<br />

he has moved to overhaul<br />

Sonangol which has been<br />

criticised by transparency<br />

and rights groups for a lack<br />

of transparency as both<br />

producer and regulator.<br />

Angola hopes the shift<br />

will help reverse a decline<br />

in oil output in the OPEC<br />

member by reducing bureaucracy<br />

and speeding<br />

up the pace at which company<br />

investments can be<br />

approved.<br />

It is part of a series of<br />

measures taken by Lourenço<br />

aimed at revamping<br />

the sector, including tax<br />

breaks for the development<br />

of marginal fields<br />

and new legislation for gas<br />

rights.<br />

Angola’s oil production<br />

marketing and bulk distribution<br />

companies suspended<br />

for tax evasion.<br />

Organizers of the breakfast<br />

meeting, Ernst and<br />

Young, said the meeting<br />

with the Petroleum Commission,<br />

National Petroleum<br />

Authority (NPA)<br />

and the Ghana Revenue<br />

Authority (GRA) was to<br />

furnish the auditing firm<br />

with enough information<br />

on challenges facing the<br />

petroleum sector so as to<br />

meet them with practical<br />

solutions.<br />

The 8th Meet the<br />

Regulator Series by Tax,<br />

Transactions and Advisory<br />

Services, Ernst and<br />

Young Global Limited was<br />

aimed at assessing major<br />

challenges facing the petroleum<br />

sector which includes<br />

tax collection and<br />

local content.<br />

is expected to fall to 1.5<br />

million barrels per day in<br />

<strong>2018</strong> compared to 1.9 million<br />

barrels a decade ago.<br />

Without a spike in fresh<br />

investment, production<br />

is set to fall to 1 million<br />

barrels per day by 2023,<br />

according to the Ministry<br />

of Mineral Resources and<br />

Oil.<br />

The decline is partly<br />

due to a fall in crude prices<br />

and a lack of investment<br />

appetite from international<br />

majors given the high<br />

relative cost of production<br />

in Angola’s offshore fields.<br />

But the government has<br />

also concluded that a bottleneck<br />

in the approval of<br />

new projects at Sonangol<br />

under the previous management<br />

of Isabel dos Santos,<br />

daughter of Lourenço’s<br />

predecessor, was also responsible.


Wednesday <strong>22</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

gas<br />

Brief<br />

Egypt:<br />

Egypt to export gas starting<br />

January, says minister<br />

Egypt’s petroleum<br />

minister, Tarek El<br />

Molla, said that<br />

the country would<br />

begin exporting natural<br />

gas in January 2019 adding<br />

that the country would halt<br />

gas imports in October this<br />

year.<br />

“It will be the beginning<br />

of gas self-sufficiency, and<br />

we will begin exporting the<br />

surplus in January 2019,”<br />

he said. He gave no further<br />

details.<br />

Egypt aims to be a regional<br />

hub for the trade of<br />

liquefied natural gas (LNG)<br />

after a string of major discoveries<br />

in recent years including<br />

the giant Zohr offshore<br />

gas field which holds<br />

an estimated 30 trillion cubic<br />

feet of gas.<br />

Egypt is one of the biggest<br />

energy markets in the<br />

Africa with a relatively extensive<br />

energy infrastructure,<br />

especially for natural<br />

gas. In 2015, Egypt became<br />

a net gas importer after being<br />

a key North African gas<br />

exporter for a period of ten<br />

years. This unfortunate, but<br />

not unexpected, situation<br />

was the result of a decline<br />

in Egypt’s indigenous natu-<br />

ral gas production combined<br />

with a rapidly rising<br />

domestic gas demand<br />

driven mainly by large energy<br />

price subsidies. Major<br />

changes are presently taking<br />

place on the gas supply<br />

side which are significantly<br />

impacting on the country’s<br />

natural gas balance and the<br />

economy in general.<br />

Given the dominant<br />

position of natural gas in<br />

Egypt’s energy scene, the<br />

government needed to take<br />

urgent and drastic action to<br />

unlock Egypt’s gas supply<br />

potential.<br />

In 2013/2014, it started<br />

implementing a more favourable<br />

upstream development<br />

policy to reverse<br />

the country’s declining gas<br />

supply profile. New policy<br />

measures helped bring<br />

about the discovery of the<br />

Zohr field in 2015 and its<br />

fast-track development,<br />

and other gas discoveries<br />

(West Nile Delta, Greater<br />

Nooros, and Atoll) were<br />

made in recent years. Future<br />

supplies from all the<br />

newly discovered fields are<br />

expected to produce the<br />

equivalent of Egypt’s present<br />

natural gas output.<br />

C002D5556<br />

BUSINESS DAY<br />

03<br />

WEST AFRICA<br />

ENERGY intelligence<br />

NLNG Train 7 to increase FDI in Nigeria<br />

The Managing<br />

Director and<br />

Chief Executive<br />

Officer of<br />

Nigeria LNG<br />

Limited (NLNG), Tony Attah,<br />

said NLNG’s planned<br />

Train 7 Project, which will<br />

increase production output<br />

of its plant from <strong>22</strong> Million<br />

Tonnes Per Annum<br />

(MTPA) to 30 MTPA, will<br />

lift Foreign Direct Investment<br />

(FDI) in the country.<br />

He said this during the visit<br />

of the Honourable Minister<br />

of Finance, Kemi Adeosun,<br />

to the NLNG’s plant<br />

complex on Bonny Island,<br />

Rivers State.<br />

Briefing the Minister<br />

on NLNG’s operations and<br />

business, Attah said NLNG<br />

will be seeking an estimation<br />

of $7 billion from the<br />

global international markets<br />

to cover the construction<br />

of Train 7) (and investment<br />

in the upstream<br />

gas sector in Nigeria that<br />

will ensure the sustainability<br />

of feedgas supply to its<br />

existing trains (Trains 1 to<br />

6) and the new Train 7.<br />

“We are committed to<br />

our expansion goals of<br />

building an additional production<br />

train to our plant.<br />

We believe this will ensure<br />

our country becomes<br />

a country that has been<br />

able to unleash its gas po-<br />

tentials and one that is in<br />

a transitional state from<br />

an oil-based economy to<br />

a gas-based economy. We<br />

also hope that Train 7 will<br />

change the country’s revenue<br />

and foreign investment<br />

profile.”<br />

He remarked that only<br />

recently, NLNG commemorated<br />

the repayment of a<br />

$5.45 billion Shareholder<br />

loan. The consolidated<br />

loan contributed towards<br />

funding the Base Project,<br />

Expansion Project, NLNG<br />

Plus Project and Train<br />

6. The final repayment,<br />

which is a milestone for<br />

NLNG and Nigeria, sends<br />

a strong message to the<br />

world that Nigeria is ready<br />

for more foreign investments.<br />

He added that the economic<br />

impact of increased<br />

LNG production output<br />

will be significant, stating<br />

that since the start of<br />

our operations 19 years<br />

ago, NLNG has generated<br />

more than $90 billion in<br />

revenue and has paid over<br />

$16 billion dividends to the<br />

Global LNG:<br />

Prices edge up as focus switches to winter storage<br />

Asian liquefied<br />

natural gas (LNG)<br />

spot prices edged<br />

higher as attention<br />

shifted to cargoes for<br />

winter storage, though few<br />

shipments changed hands.<br />

LNG cargo prices for<br />

delivery in October LNG-<br />

AS were about $11.10 per<br />

million British thermal<br />

units (Btu), up from $11.<br />

September cargoes were<br />

still being sold, with prices<br />

assessed at $10.20 to<br />

$10.30 per mmBtu, up 20-<br />

30 cents.<br />

A prolonged heatwave<br />

through large areas of China<br />

and in Japan over the<br />

L-R: Salem Sallam, NLNG manager, Government Relations; Sadeeq Mai-Bornu, NLNG Deputy MD;<br />

Tony Attah, NLNG MD; Hon. minister of Finance, Kemi Adeosun; NLNG chairman, O.R. LongJohn;<br />

Board Member, Cordelia Agboti; and NLNG general manager, production, Tayo Oginni, during the<br />

Minister’s visit to NLNG Plant, Bonny Island…over the weekend.<br />

past month has kept prices<br />

above three-year highs,<br />

where they have been<br />

since April.<br />

A harsh winter in 2017-<br />

<strong>2018</strong>, compounded by<br />

soaring Chinese demand,<br />

sparked that long rally<br />

and the start of buying for<br />

this winter’s storage could<br />

maintain that trend.<br />

Multiple traders said<br />

that South Korean staterun<br />

utility KOGAS, the<br />

Federal Government, with<br />

respect to its 49 per cent<br />

shareholding in the company,<br />

held by Nigerian<br />

National Petroleum Corporation<br />

(NNPC). In addition,<br />

NLNG has paid some<br />

$13 Billion to the Federal<br />

Government for feedgas<br />

purchases and $6.5 billion<br />

in taxes as well.<br />

NLNG has also spent<br />

over $200 million on Corporate<br />

Social Responsibility<br />

(CSR) projects in the<br />

Niger Delta and the country<br />

as a whole.<br />

world’s second-largest<br />

single corporate buyer of<br />

LNG, waded into the market<br />

and bought a large<br />

number of cargoes after<br />

holding talks with sellers<br />

this month.<br />

Few Chinese buyers<br />

were seen having previously<br />

bought large volumes,<br />

and there could<br />

be future bottlenecks at<br />

some ports. Compared<br />

with Japan and Korea, the<br />

world’s number one and<br />

three LNG buyers, Chinese<br />

capacity for storage is<br />

relatively low, which also<br />

leaves it vulnerable during<br />

winter demand spikes.


Wednesday <strong>22</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

04 BUSINESS DAY<br />

C002D5556<br />

WEST AFRICA<br />

ENERGY intelligence<br />

ANALYSIS<br />

Angola kicks off oil reforms as Nigeria dithers<br />

DIPO OLADEHINDE<br />

Unlike Nigeria’s Muhammadu<br />

Buhari,<br />

Angola’s President<br />

João Lourenço<br />

have commenced<br />

oil reforms in its state-owned<br />

Sonangol with the aim of boosting<br />

production in Africa’s second<br />

biggest oil producing country.<br />

Since João Lourenço became<br />

president of Africa second largest<br />

producing oil country Angola<br />

in September last year, he<br />

has moved to overhaul state<br />

owned oil company, Sonangol,<br />

which has been criticised in<br />

time past by transparency and<br />

rights groups for a lack of transparency<br />

as both producer and<br />

regulator.<br />

In place of state-owned Sonangol,<br />

the Angolan government<br />

will create a National Oil<br />

and Gas Agency which will take<br />

on the role of the national concessionaire<br />

which will allow the<br />

agency to manage oil blocks,<br />

sell oil blocks and reduce the<br />

near total grip state energy firm<br />

Sonangol has over the sector.<br />

“A government that is new in<br />

Angola is already championing<br />

reforms in its oil sector while we<br />

have a government in Nigeria<br />

who has a Petroleum Industry<br />

Governance Bill (PIGB) right in<br />

his front but cannot sign it into<br />

law,” Ademola Henry, Team<br />

Leader at Facility for Oil Sector<br />

Transformation (FOSTER) said.<br />

On what it will mean for<br />

investment, “certainly investors<br />

will want to move more to<br />

Angola’s oil and gas industry<br />

where there are more regulatory<br />

efficiency than a place<br />

like Nigeria were there are still<br />

corruption lapses,” Henry told<br />

<strong>BusinessDay</strong> by Phone.<br />

Diamantino Azevedo Angola’s<br />

Oil Minister said Sonangol’s<br />

role as national concessionaire<br />

will be transferred to the National<br />

Agency of Petroleum and<br />

Gas in the first half of next year<br />

in a re-organisation scheduled<br />

for completion in 2020.<br />

“The agency will be tasked<br />

with conducting bids for new<br />

oil concessions, managing production-sharing<br />

agreements as<br />

well as representing the state<br />

in the sharing of profits from oil<br />

concessions,” Azevedo said in<br />

Luanda, Angola.<br />

Sonangol, which partners<br />

with companies including Total<br />

and BP to pump oil in the<br />

southwest African nation, will<br />

focus on the exploration, production<br />

as well as refining and<br />

distribution of oil and gas.<br />

The oil minister cited irregularities<br />

and excessive bureaucracy<br />

at oil-bloc tenders as<br />

some of the reasons for the decline.<br />

Sonangol will focus on its<br />

core business, making it more<br />

efficient and agile.<br />

According to the statement<br />

from the ministry, the restructuring<br />

of Sonangol will also<br />

involve the shedding of underperforming<br />

assets outside the<br />

oil sector in which the company<br />

invested during the oil boom<br />

as the new model is part of series<br />

of measures taken by Lourenço<br />

aimed at revamping the<br />

sector, including tax breaks for<br />

the development of marginal<br />

fields and new legislation for<br />

gas rights.<br />

Based on the new model, Sonangol’s<br />

will focus on the exploration<br />

and production of crude<br />

oil and natural gas, refining and<br />

liquefaction of gas, export and<br />

logistics and distribution of re-<br />

fined products and petrochemicals.<br />

“Angola and other African<br />

countries such as Ghana, Uganda,<br />

Tanzania and Mozambiq<br />

are borrowing from Nigeria’s<br />

PIB; so they are learning from<br />

us and putting it into actions<br />

while Nigeria continues to allow<br />

sentiment and patronage<br />

obstruct its own development,”<br />

Wumi Iledare, a Professor of Petroleum<br />

Economics and oil and<br />

gas expert said.<br />

The implementation of the<br />

new model was split into three<br />

stages, the first one, (until December<br />

<strong>2018</strong>) involves preparation<br />

for the transition, the<br />

second (January-June 2019)<br />

the transition itself and the<br />

third (July 2019 to December<br />

2020) focusing on optimisation<br />

and completion of the<br />

new model.<br />

“If these small African countries<br />

are efficiently utilizing<br />

what we rejected then it is very<br />

sad. That is why our NNPC is<br />

struggling and cannot compete<br />

with its peer that started at the<br />

same time,” Iledare said.<br />

The process of restructuring<br />

Sonangol, called the “Regeneration<br />

Programme” will be made<br />

public soon as Angola hopes<br />

the shift will help reverse a decline<br />

in oil output in the OPEC<br />

member by reducing bureaucracy<br />

and speeding up the pace<br />

at which company investments<br />

can be approved.<br />

“By this act alone, Angola<br />

will soon start attracting investment<br />

to its deep water assets<br />

which are not as prolific as that<br />

of Nigeria,” Iledare told <strong>BusinessDay</strong>.<br />

Stakeholders in Nigeria<br />

oil and gas sector have expressed<br />

fear that the fate that<br />

befell the PIB that was sent to<br />

ex-President Jonathan would<br />

not befall this PIGB awaiting<br />

president Buhari assent as the<br />

two were sent for assent on<br />

the year that precedes general<br />

elections.<br />

“We had a PIGB that was<br />

thoroughly debated, thoroughly<br />

analysed, and thoroughly<br />

scrutinised; right now nobody<br />

knows the fate of the bill,” Iledare<br />

lamented.<br />

In 2014, a harmonised Petroleum<br />

Industry Bill (PIB)<br />

consisting of all the four areas<br />

of governance, administration,<br />

fiscals and host community,<br />

was passed and sent to former<br />

President Goodluck Jonathan<br />

for assent a few months before<br />

the general elections. The bill<br />

went with the election while<br />

the country keeps licking the<br />

wounds that its non-approval<br />

inflicted on the entire economy<br />

of the Africa’s biggest crude exporter.<br />

“If we do not reform our<br />

oil and gas sector quickly, we<br />

would end up like Venezuela,”<br />

Iledare warned.


Wednesday <strong>22</strong> <strong>Aug</strong>ust <strong>2018</strong> C002D5556 BUSINESS DAY 05<br />

POLICY<br />

Saudi Aramco’s strategic positioning<br />

holds lessons for NNPC<br />

ISAAC ANYAOGU<br />

Saudi Aramco, the<br />

world’s biggest oil<br />

company is strategizing<br />

to take advantage<br />

of forecasted 1.5million<br />

barrels per day (bpd) oil<br />

demand growth through an<br />

integrated investment strategy<br />

that comprises the entire value<br />

chain as well as reducing its<br />

carbon footprint, something<br />

the Nigerian National Petroleum<br />

Corporation (NNPC) can<br />

take a cue from.<br />

In the organisation’s Annual<br />

Review published last week,<br />

Khalid Al-Falih, chairman of<br />

the board of directors outlined<br />

the company’s vision to deal<br />

with an increasingly volatile oil<br />

market.<br />

“Saudi Aramco is committed<br />

to playing its unique part<br />

in meeting the world’s energy<br />

needs today and tomorrow<br />

by continuing to invest wisely<br />

throughout the cycle and across<br />

the value chain, reinforcing our<br />

preeminent leadership position<br />

in the industry,” Al-Falih said in<br />

the report.<br />

This vision is premised on<br />

the fact that oil will still play<br />

a major role in meeting the<br />

world’s energy needs. But the<br />

world now expects that oil production<br />

does not compromise<br />

the environment. This informs<br />

the company’s plan to ramp investment<br />

aimed at reducing its<br />

carbon footprint.<br />

In October 2017, Amin H.<br />

Nasser, Saudi Aramco president<br />

and CEO, joined fellow<br />

oil and gas CEOs and key energy<br />

and climate leaders for<br />

the third annual meeting of the<br />

Oil and Gas Climate Initiative<br />

(OGCI), where they announced<br />

investments in promising lowemission<br />

technologies to be<br />

implemented by OGCI Climate<br />

Investments (OGCI CI), the investment<br />

arm of OGCI.<br />

Oil companies that will<br />

stay competitive would make<br />

sustainability a key part of<br />

its operations. Saudi Aramco<br />

says it is not only investing<br />

to further strengthen its premier<br />

upstream oil position,<br />

but wants to be world leader<br />

in the downstream segment of<br />

the business.<br />

“We are leveraging our excellence<br />

in research and innovation<br />

to address areas of<br />

strategic technology importance.<br />

These include advancing<br />

sustainable transport<br />

through the development of<br />

ultra-clean and integrated<br />

fuel engine systems of the future,<br />

and driving other highimpact<br />

solutions such as carbon<br />

capture, utilization, and<br />

storage as well as beneficial<br />

uses of carbon.<br />

“In addition, considering the<br />

projected rapidly growing role<br />

of cleaner natural gas, the company<br />

expects to double the domestic<br />

production of gas while<br />

taking steps to establish a profitable<br />

international gas business,”<br />

said Al-Falih.<br />

In Nigeria, the International<br />

Oil Companies are moving<br />

away from onshore fields to<br />

offshore production motivated<br />

by economics and pragmatism,<br />

in a region where oil assets are<br />

vulnerable to vandalisation.<br />

However, the NNPC does not<br />

have capacity to continue developing<br />

these fields.<br />

The Nigerian Petroleum<br />

Development Corporation<br />

(NPDC), a subsidiary of the<br />

NNPC handling production has<br />

been unable to vie for divestment<br />

deals in the sector. Analysts<br />

blame the poor form on<br />

dearth of capita and a cohesive<br />

strategy<br />

“Does NPDC have the funds<br />

to make big ticket investments<br />

at this time? Second, how attractive<br />

are these divestments?”<br />

said Rafiq Raji, chief economist<br />

at Macroafricaintel.<br />

According to the report,<br />

state-of-the-art refining and<br />

marketing manufacturing complexes<br />

continue to be implemented<br />

in the Kingdom and in<br />

the fast growing markets of Asia<br />

and the United States.<br />

Oil feedstocks are playing<br />

an increasingly larger role in<br />

the company’s petrochemicals<br />

production, which is on<br />

its way to becoming a worldclass<br />

business. In addition,<br />

differentiated and branded<br />

base lube oils, manufactured<br />

at wholly owned and joint<br />

venture facilities are moving<br />

toward a leading international<br />

position, said the Aramco’s<br />

boss.<br />

This presents a path to profitability<br />

for oil companies including<br />

the NNPC. An integrated<br />

approach including refining,<br />

petrochemicals and industrial<br />

development must be part of a<br />

cohesive strategy to deliver the<br />

best value to the country.


Wednesday <strong>22</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

06 BUSINESS DAY<br />

C002D5556<br />

WEST AFRICA<br />

ENERGY intelligence<br />

Brief<br />

Glencore/Qatar venture values<br />

its Rosneft stake at €7.4bn<br />

QHG Oil Ventures,<br />

a joint<br />

venture between<br />

Qatar<br />

Investment Authority and<br />

Glencore, has valued a<br />

14.2 percent stake in Rosneft,<br />

which it is selling, at<br />

€7.4 billion ($8.4 billion),<br />

a QHG financial statement<br />

showed.<br />

Under a deal sealed in<br />

May, Qatar Investment<br />

Authority (QIA) will buy<br />

the 14.16 percent stake in<br />

the Russian energy giant<br />

from the Singapore-based<br />

joint venture.<br />

The stake is now<br />

worth €4.94 per share,<br />

nancial statement, which<br />

covered the period between<br />

Dec. 8 2016 and<br />

May 31 <strong>2018</strong>, that it made<br />

a profit of more than €672<br />

million during that period,<br />

mostly from Rosneft<br />

dividends.<br />

The 2016 sale of the<br />

stake in Rosneft was<br />

trumpeted by the Kremlin<br />

at the time as a landmark<br />

deal and vote of<br />

confidence in the Russian<br />

economy, despite<br />

Western sanctions. But<br />

the deal, from the outset,<br />

was mired in unanswered<br />

questions about how it<br />

was structured.<br />

finance people<br />

appointments<br />

Libyan crude still attracting hefty freight premiums<br />

Many ship<br />

owners<br />

remain<br />

wary about<br />

transporting<br />

Libyan cargoes due<br />

to security concerns and<br />

these stems are attracting<br />

a hefty freight premium as<br />

a result. There has been a<br />

lot fighting around ports<br />

between rival militias in<br />

recent months, notably<br />

Es Sider and Ras Lanuf in<br />

June.<br />

Even though the situation<br />

is calm for now,<br />

concerns persist and, according<br />

to one shipowner,<br />

“some companies have to<br />

re-review their security policy<br />

and it takes them time<br />

to reconvene to discuss and<br />

clear.”<br />

There are three or four<br />

shipowners who will not<br />

call at Libyan ports and<br />

others will view cargoes on<br />

a case by case basis, said a<br />

shipbroker.<br />

This means that at<br />

times Libyan crude stems<br />

can attract a premium of<br />

Worldscale 2.5 - 10 points<br />

over cargoes loading from<br />

non-Libyan ports in cross-<br />

Mediterranean voyages,<br />

depending on how many<br />

Libya-capable vessels are<br />

open in the region, sources<br />

said.<br />

“We have no issues as<br />

long as we have a decent<br />

Libya clause but others<br />

have to go through the motions<br />

and see things stabilize,”<br />

said another shipowner.<br />

This clause will cover<br />

cancellation costs, such as<br />

bunkers expended on the<br />

voyage to the port and for<br />

waiting times.<br />

The other issue is the<br />

rivalry between the government<br />

in Tripoli and its<br />

counterpart in the east of<br />

the country, which also<br />

claims authority. This has<br />

threatened to potentially<br />

put shipowners at odds<br />

with the Tripoli-based<br />

NOC if they were to take a<br />

cargo being marketed by<br />

its rival in the east, sources<br />

said.<br />

Recently, the self-styled<br />

Libyan National Army took<br />

control of the eastern ports<br />

and prevented the NOC in<br />

Tripoli from exporting any<br />

cargoes, sources said. But<br />

since then, the outlook has<br />

improved, though, production<br />

remains vulnerable to<br />

sudden disruptions due to<br />

security, political uncertainty<br />

and even staffing issues.<br />

according to QHG’s<br />

statement, the first time<br />

it has filed a financial<br />

report. However, as QIA<br />

already indirectly owns<br />

part of the stake through<br />

the joint venture it is unclear<br />

how much it will<br />

pay for the stake.<br />

QHG was set up by<br />

QIA and Glencore in 2016<br />

to invest in Rosneft and<br />

it bought a 19.5 percent<br />

stake in the Russian company<br />

for €10.2 billion. In<br />

its statement, QHG said<br />

that stake was now valued<br />

at €10.4 billion, meaning<br />

it has changed little in<br />

value in two years.<br />

QHG also said in the fi-<br />

After the transaction<br />

was announced in 2016, it<br />

transpired that it was only<br />

an interim deal, and that<br />

a long-term buyer for the<br />

stake had yet to be found.<br />

Rosneft came close<br />

to concluding a deal<br />

with China’s CEFC last<br />

year, but that deal ran<br />

into trouble after CEFC<br />

founder and chairman Ye<br />

Jianming was put under<br />

investigation by Chinese<br />

authorities over suspected<br />

economic crimes.<br />

Eventually Qatar’s investment<br />

fund agreed to<br />

become the permanent<br />

owner, resulting in the<br />

sale agreement in May.<br />

The world’s biggest<br />

shipping company,<br />

A.P. Moller-<br />

Maersk, said it<br />

turned in a profit, but is<br />

now spinning off its drilling<br />

unit as a stand-alone<br />

company, marking its latest<br />

step toward a complete exit<br />

from the energy industry.<br />

Maersk, which owns the<br />

world’s biggest shipping<br />

operations and is working<br />

on turning itself into a pure<br />

transport company, said<br />

that the decision will take<br />

effect next year.<br />

Soren Skou, CEO, said<br />

management had explored<br />

“all options” for the drilling<br />

unit before deciding on a<br />

separate listing in the Danish<br />

capital. “We believe this<br />

will create the best value<br />

for our shareholders,” he<br />

said.<br />

The 114-year-old firm<br />

Maersk to offload drilling assets<br />

in latest move to exit energy<br />

has been planning a historic<br />

break with its conglomerate<br />

structure since<br />

the summer of 2016. Aside<br />

from turning its back on the<br />

oil and gas industry following<br />

the 2014 slump in prices,<br />

Maersk has also sold off<br />

shares in Danske Bank A/S<br />

and exited a grocery business<br />

to focus exclusively<br />

on the container transport<br />

industry that it dominates.<br />

As part of the prepara-<br />

tion for the new listing,<br />

debt financing of $1.5 billion<br />

from a group of international<br />

banks has been<br />

secured for Maersk Drilling<br />

“to ensure a strong capital<br />

structure,” the company<br />

said.<br />

Once Maersk Drilling<br />

becomes a separate company<br />

on the Nasdaq Copenhagen<br />

exchange, “a material<br />

part of the remaining<br />

Total SA shares” will be distributed<br />

to Maersk shareholders<br />

in the form of cash<br />

dividends, share buy-backs<br />

or as a distribution of the<br />

Total shares directly, the<br />

company said.


Wednesday 15 <strong>Aug</strong>ust <strong>2018</strong><br />

marketinsight<br />

Fading global<br />

trade and geopolitical<br />

concerns<br />

brought the<br />

price of crude oil<br />

back into positive territory<br />

but declined on the week<br />

on worries that oversupply<br />

would weigh on the<br />

US market while trade disputes<br />

and slowing global<br />

economic growth would<br />

dampen demand for oil.<br />

Brent crude oil futures<br />

settled up 40 cents, or 0.6<br />

percent, at $71.83 a barrel,<br />

after touching a high<br />

of $72.49 earlier in the<br />

session. US West Texas<br />

Intermediate crude futures<br />

(WTI) rose 45 cents<br />

or 0.7 percent, to $65.91,<br />

after touching a session<br />

high of $66.39. For the<br />

week, Brent was down 1.4<br />

percent, and US crude fell<br />

2.6 percent.<br />

Falling prices have<br />

weighed on funds with<br />

oil exposure. Two of the<br />

world’s largest energyfocused<br />

hedge funds, Andurand<br />

Capital and BBL<br />

Commodities, suffered<br />

double-digit percentage<br />

losses in July as oil prices<br />

plunged by the most in two<br />

Crude oil prices rebound<br />

as market tensions ease<br />

years.<br />

US government data<br />

showed a large build up<br />

in crude inventories, with<br />

production also increasing.<br />

The number of US oil<br />

drilling rigs, an indicator of<br />

future production, was un-<br />

changed this week at 869<br />

rigs, much higher than the<br />

763 rigs operating a year<br />

ago, according to energy<br />

company Baker Hughes.<br />

Another major drag<br />

on prices was the darkening<br />

economic outlook on<br />

trade tensions between the<br />

United States and China,<br />

and weakening emerging<br />

market currencies that are<br />

weighing on growth and<br />

fuel consumption, traders<br />

and analysts said.<br />

Despite the bearish factors,<br />

analysts said prices<br />

were prevented from falling<br />

further because of US<br />

sanctions against Iran,<br />

which target the financial<br />

sector from <strong>Aug</strong>ust and<br />

will include petroleum exports<br />

from November.<br />

“Iranian crude exports<br />

were still near 2 million<br />

barrels per day (bpd) in<br />

July and will likely begin to<br />

fall dramatically in <strong>Aug</strong>ust<br />

with financial sanctions<br />

taking effect. With oil export<br />

sanctions now three<br />

months out, we expect exports<br />

to fall by more than<br />

500,000 bpd by the end of<br />

3Q,” Jefferies said.<br />

Chinese oil importers shun US crude despite tariff reversal<br />

Chinese oil importers<br />

are shying<br />

away from buying<br />

US crude as<br />

they fear Beijing’s decision<br />

to exclude the commodity<br />

from its tariff list in a<br />

trade dispute between the<br />

world’s biggest economies<br />

may only be temporary.<br />

Not a single tanker has<br />

loaded crude oil from the<br />

United States bound for<br />

China since the start of<br />

<strong>Aug</strong>ust, Thomson Reuters<br />

Eikon ship tracking data<br />

showed, compared with<br />

about 300,000 barrels per<br />

day (bpd) in June and<br />

July.<br />

The United States and<br />

China have been locked in<br />

a tit-for-tat trade spat over<br />

the last few months, but<br />

crude was dropped from<br />

China’s final list of tariffs<br />

on $16 billion in US goods<br />

announced last week.<br />

The move underscored<br />

the growing importance of<br />

the United States as a key<br />

global oil producer and<br />

critical alternative supply<br />

source for top importer<br />

China.<br />

However, would-be<br />

buyers in China fret the<br />

commodity could be used<br />

as a bargaining chip in<br />

future negotiations with<br />

Washington, potentially<br />

getting added to tariff lists<br />

if the trade conflict takes a<br />

turn for the worse.<br />

“Since it takes months<br />

to get US crude (to China),<br />

this (not buying US shipments)<br />

is a precautionary<br />

measure to avoid any distressed<br />

selling in case the<br />

government puts tariffs on<br />

US crude oil,” said Sushant<br />

Gupta, research director at<br />

energy consultancy Wood<br />

Mackenzie.<br />

To replace US oil, China<br />

has been turning to the<br />

Middle East, West Africa<br />

and Latin America, according<br />

to shipping data<br />

and traders.<br />

Although China’s biggest<br />

oil suppliers are the<br />

Middle East, Russia and<br />

West Africa, the United<br />

States has become an important<br />

global supplier<br />

since it opened up its market<br />

for exports in 2016.<br />

C002D5556<br />

OPEC Flakes<br />

Iran told OPEC no<br />

member country<br />

should be allowed<br />

to take over another<br />

member’s share of oil exports,<br />

expressing Tehran’s<br />

concern about Saudi Arabia’s<br />

offer to pump more<br />

oil in the face of US sanctions<br />

on Iranian oil sales.<br />

In a meeting with<br />

OPEC Secretary-General<br />

Mohammad Barkindo,<br />

Kazem Gharibabadi, the<br />

permanent envoy to Vienna-based<br />

international<br />

organisations urged him<br />

to keep the group out of<br />

politics.<br />

“No country is allowed<br />

to take over the share of<br />

other members for production<br />

and exports of oil<br />

under any circumstance,<br />

and the OPEC Ministerial<br />

Conference has not issued<br />

any licence for such<br />

actions,” Gharibabadi, the<br />

permanent envoy to Vienna-based<br />

international<br />

organisations, said.<br />

US oil production<br />

is offsetting<br />

OPEC losses<br />

and keeping oil<br />

prices in check, though<br />

trends in fuel supplies are<br />

indicative of negativity, a<br />

trade group said.<br />

The US Energy Information<br />

Administration<br />

reported total crude oil<br />

production for the week<br />

ending <strong>Aug</strong>ust 10 at 10.9<br />

million barrels per day,<br />

meaning the United<br />

States is on par with Saudi<br />

Arabia in terms of global<br />

production leaders.<br />

BUSINESS DAY<br />

07<br />

WEST AFRICA<br />

ENERGY intelligence<br />

Iran says no OPEC member can take<br />

over its share of oil exports<br />

“Iran believes that<br />

OPEC should strongly<br />

support its members at<br />

this stage and stop the<br />

plots of countries trying<br />

to politicise this organisation,”<br />

Gharibabadi added.<br />

Regional rivals Saudi<br />

Arabia and Iran are involved<br />

in proxy wars,<br />

including in Yemen and<br />

Syria.<br />

Iran and other signatories<br />

of the nuclear deal,<br />

including Britain, France,<br />

Germany, Russia and<br />

China, have been working<br />

to find a way to salvage<br />

the agreement despite US<br />

pressures.<br />

US oil production offsetting OPEC losses<br />

“With total US liquid<br />

fuels production, up by<br />

more than 2.0 million<br />

bpd year-over-year, the<br />

United States has been<br />

the world’s only substantive<br />

source of oil production<br />

growth so far in <strong>2018</strong><br />

and more than compensated<br />

for production<br />

losses in some OPEC nations,”<br />

API Chief Economist<br />

Dean Foreman said<br />

in a statement.<br />

Of the 15 members of<br />

the Organization of Petroleum<br />

Exporting Countries,<br />

seven of them in July<br />

produced less on average<br />

than they did the previous<br />

month. OPEC members<br />

are voluntarily trimming<br />

production in an<br />

effort to support a market<br />

that was weakened significantly<br />

by a surplus in<br />

the five-year average in<br />

crude oil inventories held<br />

by the world’s leading industrialized<br />

economies.


Wednesday <strong>22</strong> <strong>Aug</strong>ust <strong>2018</strong><br />

08 BUSINESS DAY<br />

C002D5556<br />

WEST AFRICA<br />

ENERGY intelligence<br />

In association with<br />

New sulphur regulation bad news for shippers, boon for LNG<br />

talking points<br />

STEPHEN ONYEKWELU<br />

Liquefied Natural Gas has become<br />

a hot energy source because it<br />

is cleaner than other forms of<br />

non-renewable fossil fuel and it is<br />

likely to become a lot hotter in the<br />

coming years, thanks to the International<br />

Maritime Organisation (IMO).<br />

The new IMO decision to lower its global<br />

marine fuel sulphur limit to 0.5 percent in<br />

2020 could cost Nigerian shipping companies<br />

over N1.8trillion in installation costs for<br />

exhaust gas abatement systems, an option<br />

which seems the most practical to ensure<br />

compliance, <strong>BusinessDay</strong> had earlier reported.<br />

Earlier this year, the IMO announced its<br />

first ever long-term plan to reduce harmful<br />

emissions from maritime transport by introducing<br />

much stricter maximum sulphur<br />

emission limits. Now, a race is in the making<br />

between LNG fuelling terminals and<br />

gas-powered vessels, and this race will only<br />

intensify in the coming months.<br />

From 2020, only vessels using fuels<br />

with sulphur content of 0.5 percent or less<br />

will be allowed to roam the oceans, as per<br />

the IMO’s strategy aimed at cutting total<br />

carbon emissions from maritime transport<br />

by half by 2050. Those that use fuel<br />

with a higher sulphur content, the current<br />

limit is 3.5 percent, will only be allowed to<br />

remain in operation if they are equipped<br />

with emission-clearing equipment, which<br />

naturally costs money.<br />

So, what about the emissions-cleaning<br />

equipment, the so-called scrubbers that<br />

capture sulphur emissions? They can cost<br />

anywhere from $1 million to $5.7 million,<br />

which for many ship owners is unaffordable.<br />

Even so, Wartsila, which makes scrubbers,<br />

says that by 2020 around 2,000 ships will have<br />

them, however expensive they are. Still, 2,000<br />

out of 90,000 are not that much, oilprice.com<br />

reported.<br />

Most ships, Reuters authors Jonathan Saul<br />

and Nina Chestney write in a recent story on<br />

the topic, currently use fuel oil or marine gasoil,<br />

a lighter fuel, but both of these are much<br />

higher in sulphur content than LNG. In fact,<br />

industry estimates suggest LNG emits up to<br />

90-95 percent less sulphur oxide as well as<br />

nitrogen oxide, both toxic and both targeted<br />

in the IMO’s strategy.<br />

However, current ship bunkers are not<br />

designed to run on low sulphur fuel. Fuel<br />

oil, high in sulphur content, has traditionally<br />

been used by the shipping industry as bunker<br />

fuel. Nigerians own about 1,<strong>22</strong>7 vessels<br />

according to the Shipowners Association<br />

of Nigeria (SOAN), hence the fastest way to<br />

comply would be replacing the entire fleet for<br />

new ones which cost between $40m – $100m<br />

to acquire a single cargo ship.<br />

The University Maritime Advisory Services,<br />

a consultancy with the University<br />

College London, recently argued that the<br />

European Union’s efforts of promoting LNG<br />

for ships will not really make a climate change<br />

difference.<br />

In fact, the consultancy said, the shift to<br />

LNG, which includes building infrastructure<br />

and processing facilities, could even increase<br />

total emissions instead of reduce them, “depending<br />

on the fuel’s supply chain and use.”<br />

These conclusions have been challenged<br />

on the grounds that we are in the beginning of<br />

the LNG era, which means there is significant<br />

space for efficiency improvements in the supply<br />

chain and utilization of the fuel. This only<br />

makes the whole issue of maritime emission<br />

regulation all the more fascinating to follow<br />

but it does not solve the biggest problem for<br />

shipowners: they have two years to shift to<br />

LNG or buy a scrubber.

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