BusinessDay 22 Aug 2018
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usinessday market monitor<br />
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FMDQ Close<br />
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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 />
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NGUS OCT.<br />
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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 />
which they wanted to be<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 />
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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 />
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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 />
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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 />
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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 />
Adeola Ajewole<br />
FINANCE MANAGER<br />
Emeka Ifeanyi<br />
MANAGER, CONFERENCES & EVENTS<br />
Obiora Onyeaso<br />
SUBSCRIPTIONS MANAGER<br />
Patrick Ijegbai<br />
CIRCULATION MANAGER<br />
John Okpaire<br />
GM, BUSINESS DEVELOPMENT (North)<br />
Bashir Ibrahim Hassan<br />
GM, BUSINESS DEVELOPMENT (South)<br />
Ignatius Chukwu<br />
HEAD, HUMAN RESOURCES<br />
Adeola Obisesan<br />
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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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.