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NEWS YOU CAN TRUST I **WEDNESDAY 02 JANUARY 2019 I VOL. 15, NO 215 I N300 g www. g @ g COMMODITIES Wheat farmers What the big 5 investment banks bank on govt support for price stability, off-take think of Nigeria, EM in 2019 TEMITAYO AYETOTO LOLADE AKINMURELE group is for a recovery in emerg- on the impact of a stronger dollar compared to other currencies, aving trudged through a ing market assets, particularly, in the early part of the year and Nigerian equities lost 18 percent, year that saw prices de- he central theme equities. volatile oil prices. as foreign capital fled emerging cline by 10.3 percent to in the investment JP Morgan Chase, however, While global growth acceler- markets on the back of rising H N130,000 per metric tonne and outlooks for 2019 by was the only one of the five ated, 2018 was harsh to emerg- interest rates in the United States limited off-taking channel con- Goldman Sachs, Bank investment banks surveyed by ing market assets, including and slower global growth. trolled by flour millers, Nigeria’s of America Merrill BusinessDay to adopt a cautious Nigerian equities. Although the wheat farmers are banking on Lynch, Morgan Stanley and Citi- Continues on page 4 T stance, as it cast a worrying look naira was relatively unscathed the federal governments inter- vention to open a new chapter L-R: Basirat in price stability and off-taking Adegbesan, of the cereal grain. mother of the The lack of price stability and first baby of the adequate off-taking has been a year; Bolanle source of concern for farmers Ambode, wife of the Lagos as the benchmark price fixed by State governor, millers only pared the profitabil- carrying the ity on local production, accord- baby of the ing Salim Saleh the President year; Jide Idris, Wheat Farmers Association of commissioner Nigeria (WFAN). for health, La- In 2017, millers and farmers gos State, and related on the basis of N145, Femi Onanuga, 000 metric tonne agreement but special adviser this was slashed to N130, 000 in to the Lagos what appeared an expensive deal State governor when import particularly from on primary the US at that time was cheaper at health care, $218 (N78, 480) per metric tonne. during the “There is no stability for wheat 2019 baby of the year born Continues on page 4 12:00am, weighs 3.7kg, at Lagos Island Inside Maternity in Lagos, yester- CBN inflation attitudes day. survey points to weaker Pic by Olawale Amoo economy P. 2 2 BUSINESS DAY g www. g @ g Wednesday 02 January 2019 NEWS Ghana leads Africa’s top economies in MSMEs’ contribution to GDP ISRAEL ODUBOLA ria are 37.1 million, while their contribution to GDP and export espite efforts by the earnings stood are 48.7 percent Nigerian government and 7.2 percent, respectively. to promote small Things seem to be auguring and medium-sized well for the Ghanaian economy, D(MSMEs) enterprises, Ghana is as GDP expanded by 7.4 per- leading the rest of Africa in the cent, year-on-year in the third contribution of these organisa- quarter of 2018, following a 5.4 tions to total output of goods and percent expansion in the previ- services, figures show. ous period. MSMEs contribute A BusinessDay analysis of the 70 percent to GDP in Ghana and contributions of MSMEs produc- account for 92 percent of busi- tion in five African economies nesses, data from Bank of Ghana showed that those in Ghana con- (BoG) showed. tributed more to GDP, compared Africa’s second largest econ- to Nigeria, South Africa, Kenya, omy, South Africa, recorded 2.2 and Egypt. percent growth in GDP in third According to International quarter of the year, up from 0.7 Picnickers having fun at the Apapa Amusement Park, during the 2019 New Year celebration in Lagos, yes- Finance Corporation (IFC), percent in the previous quarter. terday. Pic by Olawale Amoo MSMEs account for up to 90 According to the South African percent of all businesses in de- Ministry of Trade and Industry, veloping markets, and the ones MSMEs account for between 52 operating in the formal sector percent to 57 percent in GDP CBN inflation attitudes survey contribute about 60 percent to and 60 percent in employment. total employment and account In Egypt, Minister of Finance, for 40 percent of national income Mohammed Ma’it, said the in developing economies. achieved an increase in GDP points to weaker economy The Nigeria economy expand- of 5.3 percent in 2017/2018, up ed slightly by 1.81 percent in the from an average of 2.3 percent HOPE MOSES-ASHIKE support for price stability, as months was that prices would third quarter of last year, accord- between 2011 and 2014. In a majority (44.0 per cent) agreed inch up by 2.3 percent. From the ing to the National Bureau of disclosure made by the Gen- he Central Bank of that the economy will end up total responses, 48.2 percent of Statistics. Dikko Radda, Director- eral Authority for Investment Nigeria (CBN)’s infla- weaker. This is consistent with the respondents expected prices General, Small and Medium En- in Egypt, MSMEs account for tion attitudes survey the notion that inflation con- to rise by at least 3 per cent over terprises Development Agency of 80 percent of all enterprises, report for the fourth strains economic growth. the next 12 months, 14.3 per Nigeria (SMEDAN) said in 2018, but their contribution to GDP is quarter of 2018 is Godwin Emefiele, governor of cent expected prices to increase that MSMEs operating in Nige- below 25 percent. Tpointing to a weaker econo- the CBN, said in November 30, by more than 1 percent, but less my, as 44.0 percent of Nigerian 2018 that Nigeria’s rate of infla- than 3 per cent. However, 30.9 households have raised concern tion is projected to rise slightly to per cent of the respondents were that the economy would end up about 11.4 percent for the rest of optimistic that prices over the Why FG should change its weaker if inflation rate increase 2018 and towards mid-2019 and next 12 months would either go further. then moderate thereafter. down or remain the same. The Q4 2018 Inflation At- The Nigerian households The consumer price index, stance on business in 2019 titudes Survey was conducted asked how prices have changed (CPI) which measures infla- during the period November over the past 12 months, respon- tion increased by 11.28 percent ... anti-business perception hitting real estate 24 -December 7, 2018 from a dents gave a median answer of (year-on-year) in November sample size of 1770 households 3.8 per cent. The report show 2018. This is 0.02 percent points CHUKA UROKO or relocating to other African countries. randomly selected from 207 that 23.9 per cent of the total higher than the rate recorded in he federal government The expectation is that these Enumeration Areas (EAs) across respondents thought prices had October 2018 (11.26) percent, has a burden to correct developments might increase in the country, with a response rate gone down or not changed, 53.7 according to the National Bureau the impression that it tempo if the status quo persists of 99.2 percent. per cent felt that prices had risen of Statistics (NBS). is anti-business. This this new year and for real estate However, 14.2 per cent of by at least 3.0 per cent, while 17.0 On the issue of interest rates, Tsentiment has prevailed in some which is struggling at the mo- the respondents believe that percent felt that prices inched up the percentage of respondent quarters of the business com- ment, there are grave implica- the economy would be stron- by more than 1.0 per cent, but households who felt that inter- munity in the last three and half tions. The boom that this sector ger, 18.3 per cent said it would less than 3.0 per cent. Those that est rates had risen in the last 12 years. In some cases, those who witnessed in the past was as a make a little difference, while had no idea were 5.3 per cent. months declined by 0.7 points 22.8 per cent did not know. The On median expectation of could not cope with the changed result of the good business cli- Continues on page 4 business environment have had mate in the country before now. responses opined considerable price changes over the next 12 to relocate from the country. “Businesses leaving the coun- Experts cite as reasons for this try has implications for the impression the unfavourable tax property market; it means that policies, the continued delay in the high vacancy situation in the Nigeria’s terms of trade rose marginally signing the Petroleum Industry market is going to worsen; more Bill (PIB) into law to attract pri- buildings will be empty and that vate investment into that sector, will affect their market value,” in 2018 Q3, NBS report shows and punitive and anti-investor Roland Igbinoba, President/ policies as reflected in recent CEO, Pison Housing Company, ... motorcycles, motor spirit dominate imports cases involving government said in a telephone interview. value for its exports than it gives spirits, tobacco and some products. agencies and companies. The real estate sector in Nige- ADAMS SEGUN AMAECHI for its imports. Conversely, a value Similarly, advances in the all- The implication of this per- ria has been in negative growth igeria’s all-products terms lower than 100 percent indicates an region group export index which rose ceived stance of the government, territory for quite a while. In- of trade for Q3 2018 rose unfavourable terms of trade, as the by 1.05 percent following improved which does not support growth deed, the sector has been in marginally by 0.52 percent importing country has to exchange trade with Asia raised the all- region in both the services and real sec- recession for 11 consecutive as the indices averaged more of its product for the same terms of trade marginally by 0.10 per- tors of the economy, is that many quarters, long after the wider N99.29 in the quarter. Correspond- value of exports. cent, although the all-region group companies and individuals have economy exited recession in the ingly, the all- region group export The data which was released by import index rose in the same period had to leave the country, and second quarter of 2017. index rose by 1.05 percent with a the National Bureau of Statistics re- by 1.22 percent. many more may leave, depend- By the last count, it was esti- quarterly average of 101.73 owing to ported that the all-product terms of The all region terms of trade mated that over 300,000 square its surge in August. trade stood at 98.85, 99.64 and 99.37 surged 5.71 percent from 99.9 in July ing on what happens in the days in July, August and September of the to 105.6 in August while the index metres commercial and 200,000 The terms of trade (TOT) is a ra- and months ahead. tio of the price of a country’s export quarter, respectively. nosedived to 99.7 in September, a Besides the locals who are square metres residential real commodities relative to the price of The slight improvement in the decline of 5.59 percent from August. leaving the country, relocating estate space are unoccupied its imports commodities, expressed all-commodity terms of trade resulted Nigeria’s largest trading partners their children and putting them and, according to Broll Prop- in percentage terms. In other words, from a decrease of 1.76 percent in the for the quarter were India, China, in schools abroad, many expatri- erty Services’ recent (Q3,2018) it measures the worth of a country’s all-commodity group import price Spain, France, and the Netherlands, ates, especially those working in Viewpoint on the office market, exports in terms of its imports. index owing chiefly to cheaper vege- with crude petroleum and natural oil and gas, telecoms and other about 40,000 square meters of- An increase in the terms of trade table products and an increase of 1.26 gas, both primary products as Nige- service companies, are either re- fice space will be coming into over two periods or when the value percent in the all- commodity group ria’s main export while motor spirit turning to their home countries is greater than 100 percent indicates export price index which was driven (ordinary) and motorcycles account- Continues on page 4 that the country receives more by prices of foodstuffs, beverages, ed for the bulk of Nigeria’s imports. Wednesday 02 January 2019 C002D5556 BUSINESS DAY 3 4 BUSINESS DAY g www. g @ g Wednesday 02 January 2019 NEWS

global growth and capital flow dy- likely to reverse as investors diversify Chief Global Strategist at JP Morgan. What the big 5 investment banks think of... namics comes at a time when valu- away from the US market. However, Kelly admits that as Continued from page 1 aggregated using the MSCI EM and ations in EM are cheap. “Against this backdrop, we believe Chinese data stabilizes, the Fed “We turn bullish on EM local the markets and sectors that sold off pauses and the dollar’s climb revers- The New Year, however, holds GBI Indexes respectively. “The magnitude of this under- markets and raise EM credit to neu- most heavily in 2018 - but which still es later in the year, EM assets may better prospects for emerging mar- tral from bearish. have solid growth prospects - are finally have some room to take off. kets, as asset prices and market valuation is similar to what we ob- served in early 2016 and in the early “Our US economists expect the likely to outperform,” Bailin added. He however warns that as global expectations have adjusted sig- first quarter of 2019 to be the high Bank of America Merrill Lynch liquidity continues to be drained next nificantly lower versus a year ago, 2000s. Both periods were followed by good returns for EM currencies. point, which suggests that the biggest BoA Merrill Lynch Global Re- year, not all EM planes will fly at the offering a better deal and creating risk to our bullish local markets view search forecasts modest gains in same altitude. the potential for positive surprises. EM equities are trading at an at- tractive 25 percent discount to DM is in 1Q,” Lord added. equities and credit, a weaker dollar, “Investors are likely to continue Goldman Sachs On appetite for sovereign credit, widening credit spreads and a flat- being very selective, focusing on “Valuations look more attractive equities, while offering potentially higher expected earnings growth,” Lord said credit selection is impor- tening to inverted yield curve, signal- countries where economic growth after a challenging year for assets and tant in Sub Saharan Africa, as a lot ling a tighter squeeze on liquidity that differentials are widening versus de- we believe 2019 offers some impor- the Goldman team said. Morgan Stanley of the cheapness is on back of rising calls for higher levels of volatility. veloped markets, fiscal policy remains tant advantages relative to 2018,” the concerns about debt sustainability. This comes against a backdrop of responsible and external vulnerabili- asset management unit of Goldman The bearish run is over for emerg- ing markets, according to James Citigroup slowing, but still-healthy economic ties are kept in check,” Kelly said. Sachs said in an outlook report. Like the others, Citigroup expects growth; mild inflation, except in the Moving into 2019, Kelly thinks “We remain pro-risk heading into Lord, an investment strategist at Morgan Stanley, who says he sees the sharp emerging market equity U.S. where inflationary pressures bond yields may rise relative to stock 2019 until we see clearer signs of a underperformance in 2018 to re- are building; and a notable slowing dividend yields and earnings growth deterioration in fundamentals.” brighter days ahead where total fixed income returns should be compa- verse, at least partially in 2019. in global EPS growth from the torrid should slow, given that rising inter- Goldman has a “preference for “Underpinning our view is the pace of 2017 and 2018. est rates historically drag on equity equities, especially in emerging rable with 2017. “It has been hard slog for EM likelihood of on-going Asian growth JP Morgan Chase performance. markets, where the period of growth accompanied by contained inflation, JP Morgan was probably the most In conclusion, JP Morgan fin- moderation is likely behind us.” The investors in 2018 but we believe that markets have turned a corner and a moderating US growth limiting the conservative of the five banks in its gered good quality fixed income US-based bank however empha- extent of US rate rises and dollar outlook. exposure and dimming down credit sises dynamism and selectivity in better year waits ahead,” Lord said. According to Lord and his team, strength, and significant easing in Expectations of further dollar risk in 2019. The bank will maintain investing. China helping to offset most of the strength early in the year will likely equity exposure but also urges inves- Goldman also sees potential re- weaker growth outlook in the US should help to rebalance capital drag from trade tensions,” said David restrain EM assets, according to tors to stay diversified in anticipation turn particularly in Emerging Market Bailin, the Chief Investment Officer David Kelly, Managing Director and of elevated volatility. currencies. Based on estimates of fair flows back into EM that in recent quarters have left seeking the higher at the American investment bank. value, EM currencies appear under- Also, strongly bearish investor po- valued by 12 and 23 percent, when returns provided by USD assets. The expected rebalancing in sitioning – particularly in China – is CBN inflation attitudes survey points to... Continued from page 2 Responses on what the im- to 28.6 points in the current pact of a rise in interest rates in quarter when compared to 29.3 the short and medium terms points attained in Q3, 2018. On would have on prices showed the other hand, 9.0 per cent of that 35.2 per cent thought a rise respondents believed that in- in interest rates would make terest rates had fallen, 16.8 per prices in the street rise slowly in cent of the respondents were of the short term, as against 11.5 the opinion that the rates stayed per cent that disagreed. While about the same in the last 12 in the medium term, 33.6 per months, while 45.6 per cent of cent agreed that a rise in interest the households had no idea. rates would make prices in the The result revealed that more street rise slowly, 12.8 per cent households had no idea on the disagreed. direction of interest rate in the Analysts at the FSDH Mer- past 12 months. chant Bank limited believe that On the expected change in A peaceful election will ensure interest rates on bank loans and stability of the Nigerian economy savings over the next 12 months, and pave the way for the flow of some respondents (23.0 per investments, both Foreign Direct cent) were of the view that the Investments (FDIs) and Foreign rates will rise, while 17.4 per Portfolio Investments (FPIs) into cent believed that the rates will Nigeria. Certain longterm busi- fall. However, more respondents ness and investment decisions (59.6 per cent) of the respon- may be taken immediately after dents either expected no change the election if the current gov- Abiola Ajimobi, governor, Oyo State, presenting 2019 budget proposal at the Oyo State House of Assembly in Ibadan. NAN or had no idea. ernment retains power.

proved seeds, saying it needed new Wheat farmers bank on govt support for... varieties to update its quality. Why FG should change its stance on... Continued from page 1 to Mexico and Nigeria. But sadly for the However, Olabanji Oluwasina Continued from page 2 on them,” he posited. local wheat market, they have begun to Executive Director of Lake Chad MKO Balogun, CEO, Global pricing in the country and it is not Research Institute, Maiduguri, said the market this year. stable either on the international improve in recent weeks. Property and Facilities In- And in fact, Nigeria’s wheat im- the problem with wheat production Igbinoba stressed that there ternational Limited, agrees, market. But our off takers are flour does not lie in the seed variety but would be increased vacancy millers and they are not giving us ports in 2018/19 marketing year arguing that if people and (MY) are forecast at 5.4 million met- everything to do with the lack of rate in the Grade A office good prices. Selling at their offer is a political will to develop the crop as companies are leaving Nigeria, ric tonnes (MMT), up four percent market and his reason was it is not because of Buhari as loss for us,” Salem groused. is being done with rice. that the expatriates who were “For a farmer to sustain his busi- from the MY 2017/18 import figure president or his government’s of 5.2 million metric tonnes. This Although he admits that the Lake leaving the country coupled ness, he is supposed to have got N18, Chad Research Institute has the respon- alleged anti-business stance 000 per 100 kilogramme and in a is attributed to greater increase in with those who may leave in millers’ access to foreign exchange. sibility to release new variety every three or the likelihood of his return worse case, N15,000. But surprisingly years, he insist the variety currently the aftermath of the general to power after the February flour millers offered N13, 000.” What this means is that local pric- elections are the ones that rent ing may not experience an upward available to farmers (Norman) , was of elections. Global wheat prices inched good quality and could yield about two such office space. “People are leaving the higher at the end of November on review as being clamoured by farm- ers in that the renewed commitment metric tonnes per hectare. “The upper residential mar- country because of our econ- the heels of improved export de- He said Reyna 28, a high yielding ket will suffer the same fate mand and unfavourable weather of leading exporters is likely to make omy which is a rent-economy; import even more attractive. variety capable of 5.5 tonnes under because it is only the corpo- the economy is not standing on in some exporting countries but standard agronomic conditions, rates and expatriates that rent plunged by 0.12 percent to $5.24 Salem who described the grain a sustainable model, so people as a political crop urged the govern- with early maturity and good baking houses in that segment of the per bushel at the end of December qualities, is currently being multi- come from outside, make what on higher production from the ment to support local production market,” he said, adding that by establishing a guaranteed mini- plied in Jigawa and Abuja. they can make and move on. Black Sea region. even retail would continue to That is what is happening. The mum price between farmers and “Reyna 28 is another improved struggle because of the drop in The United States, a major export- variety but we didn’t have enough economy has a weak super er to Nigeria has been working hard millers or introduce interventions consumer purchasing power that can make up for the difference foundation seeds to multiply to structure,” he noted. to accelerate the below-average pace farmers and seed companies until which is affecting that space. Balogun also believes that of Hard Red Winter (HRW) exports to in pricing. However, what is happen- “For instance where a farmer is now. However, all these things we some of the companies react- attain its current export forecast of 8.7 are talking about are just paper work ing or is going to happen, ac- million tonnes (320 million bushels), seeking N15,000 and the off-taker is ing to the government’s stance insisting on N13,000, then the gov- except we can have the political cording to Igbinoba, is beyond on corruption. “Some of the according to the Foreign Agricultural will. The government has relegated ernment should augment the N2,000 election or Buhari as presi- companies that are leaving Service, United states Department of other crops for rice production which dent. “What we are looking at Agriculture (USDA). balance between. This will ensure the country are running away the farmers do not sell at a loss, while shouldn’t be so,” Olabanji said. here is political risk, but it goes As of November 29, HRW total com- He also substantiated the idea from the anti-graft stance of mitments inclusive of accumulated the buyer will not bear higher cost beyond that. Macro-economic the Buhari government which burden,” he explained. that government needs to subsidise factors also play a major role exports and outstanding sales were wheat processing in order to fix the is making Nigeria uncomfort- down compared to last year, particularly The association also craved for and so focus should be more government support in terms of im- shortfall in local wheat pricing. able for them. Wednesday 02 January 2019 C002D5556 BUSINESS DAY 5 6 BUSINESS DAY www.businessday.ng www.facebook.com/businessdayng @businessDayNG @Businessdayng Wednesday 02 January 2019 NEWS Sanwo-Olu assures on Lagos-Badagry Nigeria records 9% crude oil production in 2018 Expressway, Blue Line rail project completion … promises to stick to repayment agreement with JVs

OLUSOLA BELLO boss in his statement. …seeks professionals, business community support to build Lagos infrastructure Ughamadu said Baru sin- CHUKA UROKO pressway. smallest state in Nigeria with in 1999 to about N333 billion mid anxiety over gled out NPDC, the corpora- He adds that they would a land area of 3,577 square in 2017, it was still a lot lower crude oil glut world- tion’s upstream flagship com- s part of his prom- explore the realization of kilometres, which is just 0.4 than what was required to wide and the fear that pany, as the major contributor ised ‘THEME the Red line from Agbado to percent of total land area of build a Lagos of the residents’ the country may not to the Industry’s success story Lagos,’ which Marina, pointing out that, in Nigeria estimated at 923,768 dream. beA able to meet the 2.3 million in 2018, expressing enthusi- includes traffic preparing for rehabilitating square kilometres. “The government of San- barrels per day production as asm on the 52 per cent daily management various inner roads, the three The National Bureau of wo-Olu will explore options projected in the 2019 budget, crude oil production growth andA transportation, health Asphalt plants in the state Statistics (NBS) estimates that will increase the state’s the Nigerian National Petro- by the company vis-à-vis its and environment, education would be turned around and show that about 260,000 peo- IGR. But most importantly, leum Corporation (NNPC) 2017 performance. and technology, making La- made ready to put people to ple come into Lagos daily, and technology and rule of law will claims the country’s crude oil The NNPC boss in the end- gos a 21st Century economy, work in order to make state only about 20-25 percent goes play a bigger role in virtually was in the upward swing in of-year statement explained entertainment and tourism, roads motorable. back to their original places. every sector of our economy. 2018. that the average production Babajide Sanwo-Olu says, The governorship candi- This huge influx into the city It is these applications of tech- According to the NNPC, from NPDC’s operated as- if elected governor of Lagos date who spoke at the annual is overstretching the existing nology and rule of law that the daily production was about sets alone grew from an aver- State in 2019, he would tackle end of the year dinner and infrastructure and facilities, makes the difference between 2.09 million barrels in out-gone age of 108,000 of oil per day the state’s collapsing infra- award night organised by the leading to an urgent need for the advanced nations and the 2018, translating to a 9 percent (bod) in 2017 to 165,000bod structure head-on. Nigerian Institution of Civil the state to be innovative in developing worlds, such as increment, compared with the in 2018, describing the feat Sanwo-Olu, who is the Engineers, Lagos chapter, providing infrastructure. Nigeria”, he said in response to 2017 average daily production as the strongest production governorship candidate of where he was represented by Hamzat, who was the im- journalists’ questions. of 1.86 million barrels. growth within the Oil Indus- the All Progressives Congress his deputy, Obafemi Hamzat, mediate past commissioner “Our plan is to expand The corporation did not try in recent times, even as he (APC) in the state, assures that notes that Lagos as a megac- for works and infrastructure and improve on existing in- however disclose the exact added that it was worth being his government will move ity had serious infrastructure in the state, said he under- frastructure project. Govern- volume of crude oil and also celebrated. very fast to complete the on- challenge. stood the state’s infrastructure ment is a continuum and we the volume of condensate that He said NPDC’s equity pro- going Blue Line rail project Lagos population is cur- challenge very well, pointing will continue with existing does fall under the control of duction share which stands from Okokomaiko-Marina rently over 20 million with a out, however, that though projects to the benefit of La- OPEC quota produced. at 172,000bod, representing and, in the process, aggres- projected figure of close to the internally generated rev- gos. Our focus remains ‘To- According to Maikanti about 8 per cent of national sively prosecute the rehabili- 30 million in the next decade. enue (IGR) of the state has wards a Greater Lagos: A Col- Baru, group managing direc- daily production, was no less tation of Lagos Badagry Ex- This is despite it being the increased from N7.2 billion lective Effort,’” he assures. tor, NNPC, pitched against impressive, saying the desired the low-level daily crude oil results are outcomes of ini- production in 2016 and what tiatives his Management team obtains now, the nation had emplaced, among which, he maintained a line of consistent noted, are the Asset Manage- year-on-year improvement. ment Tea (AMT) structure, For the crude oil increment Strategic Financing, Units Au- and other milestones recorded tonomy and security architec- by the NNPC in the out-gone ture framework. 2018, who made the submis- Of the Industry milestones sion in a comprehensive end in the outgone year, the corpo- of year message to staff of the ration stated that $1.7 billion corporation, touted the new was saved by NNPC, with cor- business models his team had poration’s Joint Venture (JV) put in place in the national oil partners over a five-year tenor company’s old and new busi- repayment plan, saying already ness entitles as raison d’être for the corporation has defrayed the giant strides. $1.5 billion of the arrears. A press release signed by He made the promise that Ndu Ughamadu, NNPC group NNPC would stick to the Re- general manager, group public payment Agreement with the affairs division, said the Nige- JV Partners while transiting to rian Petroleum Development self-funding IJV modes with Company (NPDC), Nigerian the corporations partners, Gas Company (NGC), Pe- saying that tiding up the Cash troleum Products Marketing Call issues has led to increased Company (PPMC), Duke Oil, commitment and enthusiasm NIDAS and Integrated Data to invest in Nigerian Oil and Services Limited (IDSL), were Gas Industry even as it has also Godwin Obaseki, governor, Edo State (m); Ukinebo Dare, senior special assistant to the governor on skills development and job among the re-engineered boosted NNPC’s credit profile creation (l), and Feb Idahosa (r), during the governor’s inspection of an abandoned state-owned warehouse in Benin City, Edo State. companies listed by the NNPC internationally. Edo okays multipurpose production centres to boost activities of MSMEs Edo urges CP to investigate Benin n a concerted effort to States of America. include welding and fabri- support Micro, Small Senior special assistant cation, recycling and waste and Medium Enterpris- (SSA) to the Governor on management, polythene Ring Road shooting incident es (MSMEs) in the state Skills Development and Job makers, printing press, overnor Godwin ernor is disturbed by the dent at Ring Road hap- Ifor increased productivity, Creation, Ukinebo Dare, clothing factories, bakeries Obaseki of Edo incident and wants a clear pened during the frenzied the Edo State government said a number of production and confectionaries, pack- State has urged report on what actually celebration of the cross- through its skills develop- centres are going to be sited aging companies, among the Edo State transpired and the con- over to the New Year. It is ment platform, EdoJobs, in the three senatorial dis- others. The centre is fitted GCommissioner of Police, dition under which the alleged that a life was lost, with development partners, tricts of the state, noting that with factory space, security Johnson Kokumo, to inves- reported shooting took but we are yet to get the full are set for the launch of the the pilot centre is situated in and office space. tigate the shooting incident place.” detail of the incident from Edo Production Centre, a Benin City. She said there will be at Ring Road, Benin City, He noted that the the Police and other con- multipurpose, one-stop- She added that a stake- live-in desks for relevant on New Year’s Day, which Obaseki-led administra- cerned security agencies. shop for small businesses. holders’ meeting has been government agencies to en- reportedly claimed one life. tion had prioritised the se- “The governor has urged The centre is the brain- schedule for January 7, after gage, support and provide In a statement, spe- curity of life and property the police commissioner child of the Governor God- which different small and services to small businesses cial adviser on media and with the huge investment to investigate the incident win Obaseki-led adminis- medium business own- at the centre, noting that the communication strategy in the state’s security ar- thoroughly. I am confident tration and will be managed ers will be allowed into the agencies to be hosted are the to the governor, Crusoe chitecture and trust fund, that we will have the true in partnership with the centre, which is equipped Bank of Industry (BoI), Cor- Osagie, said, “The governor launched recently, and picture of what transpired Market Development for the with 24 hours electricity and porate Affairs Commission has asked the Police CP to would stop at nothing to after the investigation. I Niger Delta (MADE) II pro- other support structures to (CAC), National Agency for thoroughly investigate the get to the root of the Ring can assure you that the gramme, Benson Idahosa make them more produc- Food and Drug Administra- incident and assured that Road shooting incident. state government will take University (BIU) and the Des tive. tion and Control (NAFDAC), anyone found culpable will “Unconfirmed reports a decisive action on the Moines Area Community Small businesses expect- Edo Internal Revenue Ser- be brought to book.” trending on some news matter,” the governor’s aide College in Iowa, the United ed to be hosted at the centre vice (EIRS), among others. Osagie said, “The gov- platforms claim the inci- said. Wednesday 02 January 2019 www.businessday.ng www.facebook.com/businessdayng @businessDayNG @Businessdayng BUSINESS DAY 7 NEWS Joint venture, stock, bonds seen as viable As FG yet to transmit minimum financing options for ship acquisition wage executive bill to N/Assembly AMAKA ANAGOR-EWUZIE foreign ships that calls Nige- directly to these companies interest, has failed to disburse … labour, OPS warn of implication ria’s territorial waters. through primary or mezza- the funds till date. of strike on election, economy s commercial Speaking while present- nine financing. The CVFF was aimed at banks continue ing a paper tagged, ‘Innova- “Another financing op- promoting Nigerian ship JOSHUA BASSEY & KEHINDE AKINTOLA Council elections hold on Sat- to restrict lending tive Concepts and Sustain- tion for major players in the acquisition and ownership, urday, March 2, 2019, respec- to shipping com- able Approaches to Effective industry has been the capital ship charters, development ore than one tively. panies owing to Ship and Maritime Infra- market. The US and Norwe- of shipyards and other infra- month after re- In line with the communi- regulatoryA and risk manage- structure Financing in Nige- gian capital markets as well structure, ship construction, ceiving the report qué jointly issued by the three ment considerations, Nige- ria: A Critical Review,’ Fabian as the Norwegian bond mar- repairs and maintenance and of the National labour centres at a meeting rian ship owners have been MMinimum Wage Committee, held in Lagos state penulti- Ajogwu, a senior advocate of ket have been favourable for other schemes for the devel- advised to consider structures Nigeria, says traditional lend- shipping assets. The London opment of indigenous ton- the Presidency is yet to trans- mate week, all affiliate unions such as high-yield bonds, ers like banks have reduced markets are also looking to nage capacity. mit an executive bill to the Na- in public and private sectors joint venture partnership and their commitment to ship in- attract their first shipping In his view, Bashir Yusuf tional Assembly as procedure have affirmed readiness to capital market listing as viable frastructure projects follow- listings since 2006/2007,” he Jamoh, executive director, Fi- demand or name the high- join the nationwide strike. options to funding ship acqui- ing the financial crisis and says. nance and Administration of powered technical committee Fortune Obi, public rela- sition. their high aversion to risk to Ajogwu however advises NIMASA, lists lending from President Muhammadu Bu- tions officer of Petroleum Experts, who took turns take on such transactions. Nigerian ship owners to em- commercial banks, sole lend- hari promised to look into the and Natural Gas Senior Staff to assess the state of Nige- According to Ajogwu, brace International Financial ing & syndicated loans, pro- N30,000 recommended by the Association of Nigeria (PEN- ria’s shipping business at a access to credit remains a Reporting and Accounting posed maritime bank, CVFF, Ama Pepple-led committee. GASSAN), an affiliate of TUC, recent industry event tagged challenge for ship-owners Standards in order to be able NCDMB loans and leasing as This is also as the ultima- affirmed readiness to join the NISFCOE 2018, say Nigeria’s and other operators as very to attract other forms of fi- funding options for ship ac- tum issued by organised la- industrial action, urging the maritime industry is still at few Nigerian banks have the nance in the form of private quisition. bour to the Federal Govern- Federal Government to do the its infantile stages in terms financial and technical ca- equity, and be better posi- “Despite the huge poten- ment to transmit the report of needful in order to avert an- of funding and indigenous pacities to undertake such tioned to be listed on the tial in the Nigerian maritime the national minimum wage other economic crisis. participation, since local transactions; while high in- Stock Exchange. sector, harnessing these as- committee to the National As- Peter Ozo-Eson, the gen- shipping companies cannot terest rates and liquidity is- BusinessDay understands sets has been constrained sembly expired on December eral secretary of NLC, said the access the requisite funding sues keeps funding out of the that in 2017, the Federal Gov- due to the absence of an ef- 31, 2018, thus setting the stage position of the three labour to acquire ship infrastructure reach of the intending ship- ernment, which through the fective financing option. Fill- for a nationwide strike that centres remained sacrosanct. and do business. owners. Nigerian Maritime Admin- ing the funding gap therefore could cause severe damage to Disturbed by the develop- According to them, the Ajogwu discloses that istration and Safety Agency remains critical. Unless Nige- the fragile economy early in ment, the Nigeria Employ- volume of ship financing private equity funds now tar- (NIMASA) concluded plans ria takes the issue of ship fi- the New Year. ers’ Consultative Association transactions undertaken in gets small and medium sized to disburse $100 million nancing seriously, few foreign Checks by BusinessDay (NECA) has warned on the Nigeria is still very low de- shipping companies to en- Cabotage Vessel Financing firms will continue to domi- as of Monday, December 31, negative implication of the spite the increasing volume ter joint ventures with ship- Fund (CVFF) to indigenous nate activities in the shipping 2018 confirmed no executive proposed nationwide strike of trade and the number of owners and, sometimes lend ship owners at a single digit sector,” Jamoh warns. bill had been sent through the by the organised labour, say- senior special adviser to the ing that the Nigerian economy president on National Assem- cannot absorb any further bly matters (Senate and House shocks from such action. of Representatives). Timothy Olawale, director- The leadership of the three general of NECA, said the labour centre- Nigeria Labour economy was still struggling Congress (NLC); Trade Union from the impact of the recent Congress (TUC) and United recession and urged the Fed- Labour Congress (ULC), had eral Government to avert the rejected the president’s pro- proposed strike. posal to set up a technical “It is worrisome that in committee to assess the abil- a nation whose economy is ity of government to pay the still reeling under the effects N30,000 recommended by the of recent recession, govern- Ama Pepple committee, in- ment would needlessly further sisting that the report be trans- drag the economy into avoid- mitted to the National Assem- able abyss. The colossal loss bly on or before December 31, borne by businesses during 2018. the warning strike in Septem- Labour had since com- ber 2018 is yet to be recovered menced mobilisation of work- and further disruption of busi- ers and their civil society allies ness activities might sound the for a nationwide strike from death knell for many enter- January 8, 2019 to press home prises. their demand. The DG further expressed L-R: Folashade Atiba, legal secretary, The Diocese of Lagos; Adejoke Orelope-Adefilure, senior special assistant on Sustainable “We are reaching out to our worry at the indecisive dispo- Development Goals (SDGs) to President Buhari; Humphrey Bamisebi Olumakaiye, bishop of Diocese of Lagos, his wife Motunrayo, allies in the civil societies. We sition of the Federal Govern- and Segun Ajayi, deputy registrar, Diocese of Lagos, during the 2019 New Year service of the Cathedral Church Marina Lagos, are also discussing modalities ment towards concluding the yesterday. Pic by Olawale Amoo to make the strike effective and process leading to the imple- impactful should the govern- mentation of a new national ment failed to accede to our minimum wage. VAT generated in Q3 2018 jumped by 2.54% on quarter-on-quarter basis demand. Our demand clear; He said: “Globally, there is lion, down by N975 million Commerce and trading 2018 from N47.849 million transmit the N30,000 recom- a recognised and acceptable ISRAEL ODUBOLA from N32.458 billion gener- recorded a slight decrease in Q2 2018, the sector gen- mended by the National Mini- process of setting a National mum Wage Committee to the ata on the secto- ated in the second quarter of 0.68 percent quarter-on- erated the least amount of Minimum Wage as enshrined National Assembly for action,” ral distribution of2018. quarter from N16.108 bil- VAT in Q3 2018. in the ILO Convention 131. a member of the labour move- of Value-Added Out of the 24 sectors lion in Q2 2018 to N15.998 Building and construc- This process had been adopt- ment told BusinessDay. Tax (VAT) for Q2 covered in the report, 13 billion in Q3 2018. tion recorded the biggest ed in previous National Mini- Analysts observed that the Dand Q3 2018 showed that recorded a negative growth VAT generated from quarter-on-quarter decline mum Wage setting in Nigeria industrial action if carried out N273.50 billion was gener- (quarter-on-quarter) in VAT banks and financial institu- of 34.76% to N2.506 billion and was meticulously applied may truncate ongoing prepa- ated as VAT in Q3 2018 com- generated in Q3 2018 com- tions declined by 4.87% to in Q3 2016 compared to by the National Minimum ration for the 2019 general pared with N266.73 billion pared with the previous pe- N4.516 billion in Q3 2018 N3.841 billion and N3.246 Wage Committee inaugu- elections which is expected to generated in the second riod, the report shows. from N4.747 billion in the billion generated in the pre- rated by the President in De- commence in February, 2019. quarter and N269.79 bil- After manufacturing, pro- previous quarter. vious two quarters. cember 2017. According to the timetable lion generated in Q1 2018, fessional services and com- VAT realised from prop- Out of the total amount It was expected that follow- released by the Independent indicating a positive growth merce and trading generated erties and investments generated in Q3 2018, ing the submission of the Na- National Electoral Commis- of 2.54 percent quarter-on- the second and third highest surged by 18.8% to N1.278 N128.62 billion was gener- tional Minimum Wage Com- sion (INEC), the Presiden- quarter and 9.16 percent amount of VAT in the period billion in the period of con- ated as non-import VAT lo- mittee’s report to the President tial and National Assembly year-on-year. of concern. For professional cern from N1.075 billion in cally while N58.84 billion on Tuesday, November 6, elections hold on Saturday, BusinessDay analysis services, VAT generated rose the preceding quarter. was generated as non-im- 2018, expedited action would February 16, 2019 across the of the report found that quarter-on-quarter by 27.73 Although, VAT gener- port (foreign) VAT. The bal- be taken in transmitting a bill country. The Governorship, manufacturing generated percent to N25.567 billion in ated from mining expanded ance of N86.04 billion was to the National Assembly as State Houses of Assembly and the highest amount of VAT Q3 2018 from N20.016 billion by 10.14% quarter-on-quar- generated as NCS-Import promised by President Mu- Federal Capital Territory Area in Q3 2018 at N31.483 bil- in Q2 2018. ter to N52.701 million in Q3 VAT. hammadu Buhari.” 8 BUSINESS DAY www.businessday.ng www.facebook.com/businessdayng @businessDayNG @Businessdayng Wednesday 02 January 2019 NEWS Investment in technical education should top FG priority list in 2019 - experts Governor Obaseki’s New Year message s we usher in 2019, ing security in Edo. when juxtaposed against the ment generation, technical Samuel Eze, a student of there is every rea- Henceforth, up to 25% of KELECHI EWUZIE growing technological ad- education is being shunted to Yaba College of Technology, son to celebrate this the Security vote of the state s the Federal vances in the 21st Century. the back burner. Lagos, advocates for more gov- gift of a new Year will be committed to the Se- Ukachukwu urges the Fed- Adeoti opines that the role ernment support in infrastruc- andA to thank God Almighty curity Trust Fund. With the Government set- tles for business eral Government to support of technical education is to tural development, stating that not only for preserving us to contributions of Edo Citizens this year, con- this critical but overlooked provide a nation with human across the world, he is aware of see this new year, but more and commitments by private cerned educa- aspect of education, which ac- resources that will develop its the enormous role that techni- importantly for His mercy companies, we can stamp tionA experts have called on cording to him is the only key technologies, adding that the cal education plays in any na- and the achievements we re- out crimes from our dear government to priority in- to entrepreneurial develop- field is one of the surest ways tion desirous of achieving its corded in 2018. state and make it the safest vestment in technical educa- ment and employment gen- of making the economy richer, education goals. As we reflect on 2018, we place to live and do business. tion to boost youth empow- eration in the nation. prosperous and resourceful. “Technical education cov- have reasons to celebrate the We are still very commit- erment and job creation. He states that government “Government support for ers a wide spectrum of edu- modest achievements, which ted to the creation of jobs so They observe that over the should realise that technical good technical education is cational training programmes we accomplished despite the that we can keep our young years, government attention in education and vocational in- the best way to prepare a na- such as trade and commerce, challenges, which we still ones across the three sena- terms of investment have been stitutes and colleges are the tion for excellence. Without medicine and sciences, engi- face as a nation. torial districts engaged and channelled to conventional solutions to the present unem- this form of education, how neering and agriculture, which With assistance and sup- productive. Even though we universities to the exclusion of ployment challenge that the would people grow, develop are all essential to the develop- port of Mr President and the have created well over 77,000 other special institutions. nation is facing. and compete effectively in the ment of the human and natu- Federal Government, we jobs in the last two years, According to them, govern- According to Ukachukwu, rapidly changing global econ- ral resources of any forward- were able to pursue our goals including the over five hun- ment needs to have a rethink “If the youths acquire skill at omy?” he wonders. looking country,” he says. and ambition to make Edo dred graduate employment as the year 2019 progresses. an early stage before gradua- To him, “What is required Eze further explains that he State a model for economic into the Edo State Civil Ser- Maurice Ukachukwu, a tion, they can live productively in stemming this tide is a is convinced there are more development and good gov- vice, we plan to do more this teacher at Enugu State College when they channel such skill policy shift on the part of gov- career opportunities in fields ernance. year as we invest in produc- of Education Technical, says to various endeavour thereby ernment, which should be under technical education, for My priority as your gover- tion and processing centers the role of technical educa- helping their parents, commu- targeted at implementing the which reason he can not help nor is to ensure that we em- where artisans and entrepre- tion in national development nity and society at large.” technologies learnt by stu- wondering why government phasise and focus on poli- neurs can go and produce across the globe cannot be Yinka Adeoti, a profession- dents in the course of their has been rather slow in its ef- cies and programmes which goods and services. overemphasised, especially al in technical drawing, notes studies at polytechnics and forts to improve that aspect of will enhance the wellbeing With the rapid progress, that despite its role in employ- universities of technology.” education. of majority of our citizens by which we made with our creating the enabling envi- partners in our investments ronment and building the in the modular refinery, the necessary social and physical Benin Industrial and En- infrastructure for our people terprise Park and the Benin to achieve their aspirations. River Port, we expect that In order to achieve our construction will commence promise, we have contin- on the park this year and that ued to invest in those areas, the Modular refinery would which would make life better also be installed this year. for our people. We are very pleased with Education and healthcare the progress we have made received a lot of our attention in housing, especially with last year and we rolled out the construction of the 74 Edo Basic Education Sector hectares, 1,800-unit Emo- Transformation (EDOBEST). tan Garden Estate, where 100 EDOBEST has been hailed units are now ready for occu- locally and internationally pation. I encourage Edo Citi- as a revolution in Basic Edu- zens to take advantage of this cation in Nigeria with huge opportunity to own property potential to aid our children in this unique project. to learn. I thank the over We are mainstreaming 7,000 digital teachers who more women and physically are changing the future of our challenged persons in gov- Akinwunmi Ambode (2nd r), governor, Lagos State; Adeniji Kazeem (r), attorney general and commissioner for Justice; children and the hundreds of ernance, in our effort to cre- Anofiu Elegushi (2nd r), special adviser to the governor, Central Business District; Nurudeen Solaja-Saka (l), member, our school-based manage- ate an inclusive system that is Lagos State House of Assembly, and others, during the One Lagos Fiesta Grand Finale at the Eko Atlantic City, Victoria Island, Lagos, yesterday. ment committee members responsive to the needs and who have volunteered to aspirations of all classes of ensure that we change edu- people in our state. We dem- Elumelu Foundation opens applications for 5th cation outcome in Edo State. onstrated this recently when This year we expect to roll out I approved the employment EDOBEST in every public ba- of all persons living with dis- cycle of $100m entrepreneurship programme sic school in the state. abilities, that applied for civil he Tony Elumelu Outstanding African en- on-one mentoring; access the African economy, by Similarly, our desire to im- service jobs in the state. Foundation (TEF), trepreneurs running existing to TEFConnect; pan-Afri- building on the intelligence, prove healthcare of millions The Edo of our dream is a leading African- start-ups with high growth can meetups; TEF network skills and resourcefulness of Edo Citizens by emphasiz- a place where everyone can funded and founded potential and aspiring busi- membership; and participa- of Africans. I encourage all ing primary healthcare took actualise their God-given po- Tphilanthropy committed to ness owners with trans- tion at the annual TEF Entre- ambitious young Africans to off with the pilot of our first tential and contribute to our empowering African entre- formative ideas are invited preneurship Forum, the larg- take advantage of this unique 20 model PHCs equipped collective growth and devel- preneurs, is now accepting to apply. We are particularly est convening of the African opportunity.” with electricity, technology, opment as a nation. applications for the 2019 looking to grow representa- entrepreneurship ecosystem. The TEF Entrepreneur- properly trained health per- I must at this point com- cohort of the TEF Entrepre- tion from French, Arabic and Founder, Tony O. Elume- ship Programme is open to sonnel and adequate secu- mend the Omo N’ Oba N’ neurship Programme. Portuguese speakers, as well lu, stated: “The private sector citizens and legal residents of rity. The plan is to have 100 of Edo, Uku Akpolokpolo, Oba The programme is a as female entrepreneurs. must be the core driver of Af- all African countries, who run such PHCs in 2019. Ewuare II, for his fatherly 10-year, $100 million com- Inspired by Tony Elume- rica’s economic transforma- for-profit businesses based in We want Edo to be a cen- guidance, especially his sup- mitment to identify, train, lu’s economic philosophy of tion, but this sector cannot Africa that are no older than tre where we will be able to port for the fight against hu- mentor and fund 10,000 Africapitalism and his vision attain its full potential if en- three years. The deadline for access quality health care man trafficking and illegal African entrepreneurs. The to institutionalise luck and trepreneurs are left behind. applications submission is services, without the troubles migration in our state. programme’s objective is to democratise opportunity for We call on all stakeholders March 1, 2019. of travelling out. The New spe- The positive response of generate at least 1,000,000 a new generation of African – policymakers, business Applications will be cialist hospital will be opened the traditional institution, new jobs and create at least entrepreneurs, the Founda- leaders and development judged based on criteria in- this quarter under a Public the clergy, our mothers and $10 billion in new business tion has implemented one agencies – to actively commit cluding: feasibility, scalability Private Partnership (PPP) sisters in our various mar- revenue across Africa. of the most ambitious entre- to creating a better future for and potential for growth of management agreement. kets, the international com- Now in its fifth year, the preneurship programmes our young Africans who have the product/service; market In December, we munity and other stakehold- TEF Entrepreneurship Pro- globally. demonstrated intellect, skill, opportunity for the idea/busi- launched the New Edo State ers, to curtail the scourge of gramme has empowered Selected entrepreneurs and passion, to empower ness; financial understand- Security architecture, which human trafficking, has been 4,470 entrepreneurs, using from previous years have them to succeed because ing, leadership potential and is an innovative approach remarkable. These efforts a bespoke and robust selec- transformed their business- their success is Africa’s suc- entrepreneurial skills. to fight violent crimes in the have begun yielding suc- tion, training and implemen- es and their communities cess. Applicants can apply on State in a sustainable way by cess such that the European tation process to create vis- after gaining from the Pro- Parminder Vir, CEO, TEF, TEFConnect - www.tefcon- involving the communities Union announced that Edo ible and sustainable impact gramme’s 7 pillars: $5,000 said: “Our entrepreneurs il- nect.com - the largest digital in the security arrangements State has dropped from the across all 54 African coun- in seed capital; business lustrate the Foundation’s networking platform for Afri- and also getting the private first to sixth position, in ille- tries. development training; one- commitment to transform can entrepreneurs. sector to participate in fund- gal migration to Europe. Wednesday 02 January 2019 C002D5556 BUSINESS DAY 9 10 BUSINESS DAY C002D5556 Wednesday 02 January 2019 comment is free comment Send 800word comments to [email protected] Small Business handbook Key success factors for SMEs in 2019 cles hindering SME development cut jobs and put more pressure on projects, the lack of which is a major and growth. It hopes to promote the beleaguered households. Relat- cause of the financial starvation of the participation of SMEs in the ‘ edly, 2019 will bear the brunt of the SMEs, and of course, general self- formal economy of their respective As 2018 closes, there general elections activities, which improvement of SMEs’ internal countries, as well as in regional and is need for operators in have already negatively impacted processes is important. The time global trading spaces by tackling the economy. SMEs must therefore has come for SMEs to differentiate Emeka Osuji lack of access to markets and mar- the SME sector, which guard their loins and brace up for themselves and embrace creative Dr Emeka Osuji ket intelligence, stifling regulatory all sorts of negative externalities, thinking and innovation. School of Management and barriers and hostile environment. has the most positive including possible delays in the SMEs are not famous for their Social Sciences Domestically, several funding formation of cabinets, depending on customer-centricity. The need for Pan Atlantic University and capacity building initiatives impact on the masses, who wins the presidential election. repeat business has never been Lagos. [email protected] @Emyosuji have been implemented. The Cen- to brace up, rethink its All considered, growth may be mini- their priority. It is time for SMEs tral Bank, the Bankers Committee mal and there is no need to restate to hold on to the customers they and other stakeholders have estab- strategies and retool its that SMEs have little or no prospects have been able to garner. The only lished several on-lending facilities when an economy is stagnant. way to do this is first to know who for the benefit of SMEs. It is now operational modalities, The dividends of the failed strat- the customers are; listen to them a popular view that the availabil- egy of neglecting the Warri and Port and try to hear what they are say- ity of funds is no longer a major so as to maximally profit Harcourt ports and concentrating ing. This guides the development challenge of SMEs, even though from the opportunities almost all import trade in Lagos have and deployment of products and o much has been said and accessing such funds may still be come to roost. Almost all businesses services. Owing to the fact that also done concerning the a bit of a problem. It is most prob- that may arise in 2019 in the hitherto highbrow Apapa GRA we have never been interested in development of the SME able that this challenge prompted have shut down. Nobody of any whether the customer repeats or sector, not just in Nigeria the Central Bank to contemplate economic substance lives in Apapa disappears, we are unable to inno- but in several other parts the establishment of a nation-wide now, except hapless landlords with- vate. Need identification precedes Sof the world. At the African conti- government microfinance bank ’ out an alternative. The economy innovation. SMEs that close in on nental level, for instance, the Africa – an idea not supported by this population of about 29 million people of Lagos is bleeding but strangely their customers, listen to them and Union Commission (AUC), in its column. We have unsuccessfully is growing at the rate of 2.2 per cent the state is not complaining. Its constantly interact through various search for the evolution of “com- used that route before through the while its economy grew at the rate of economists seem to have little un- digital channels will be better able petitive, diversified and sustainable Peoples Bank. Besides, the scares 8.5 per cent in 2017–a surplus and the derstanding of the Apapa disaster to offer goods and services that economies in Africa underpinned of government’s incompetence in fastest in five years. Ghana was the on Lagos economy. Nigerians need meet customers’ needs. by dynamic, entrepreneurial and business is “everywhere dense” in first country in Sub-Saharan Africa to know why we neglected the ports The state of unemployment, industrial sectors that generate em- Nigeria to achieve the Millennium Develop- in the South-South to ruin Lagos. which hit 23 per cent in the third ployment, reduce poverty and foster As 2018 closes, there is need for ment Goal 1 - the target of reducing Even more important, SMEs quarter of 2018 is not likely to abate. social inclusion”, established the En- operators in the SME sector, which extreme poverty by half. We never must understand and embrace the It is probable that more entrepre- terprise Africa Network (EAN). The has the most positive impact on did. Ghana has also become a middle reality of the time – the world has neurs, willing and unwilling, from Network is a flagship initiative of the the masses, to brace up, rethink its income country. Although Nigeria is gone digital. Services are being mi- the ranks of those structured out AUC, which aims at implementing strategies and retool its operational not among the 37 Heavily Indebted grated to the digital space. There is of the formal sector by a stagnant the Business Development pillar of modalities, so as to maximally Poor Countries, debt service is gulp- no hiding place for those that hang economy, will throng the SME its Africa Master Plan for 2017-2021. profit from the opportunities that ing about a quarter of its 2019 budget on to the dying analogue age. On space. Competition will heighten The initiative would provide services may arise in 2019. In this regard, (N2.14 trillion). The problem is not this matter, there will be no standing and market shares will shrink. In es- relating to the developmental needs we attempt here to highlight some debt or its service but where the on the fence. One is either in or out. sence, SMEs should expect little or of African SMEs, including interna- of the attributes and strategies that money was put. Furthermore, exploration, discov- no special favours from government tional partnerships with the private must be manifest in the affairs of The oil market is still soft, with ery and deep utilization of digital beyond the hard-to-access financial sectors of other economic group- those SMEs that will click Cham- many traditional buyers of Nigeria’s platforms, the social media and packages still trending. There is ings, including the European private paign glasses this time in 2019. crude, including India, either slow- marketing strategies will be impera- also no need to wait and hope that sector. It will also offer advisory ser- Before that, a cursory look at some ing, looking elsewhere or seeking tive. In this regard, investment in governments will do what they say. vices for international growth as well aspects of the environment. alternative energy sources. Currently capacity development is vital. Many The only hope that makes sense is as support for business innovation. The Nigerian economy is grow- below 2millionbarrels/d output is free offerings have been made in the hope in God. Otherwise, hope The Enterprise Africa Network ing at less than 2 per cent per projected to reach 2.3 million bar- this area but operators must realize is the absence of strategy with an therefore becomes a strategic insti- annum as against its population, rels a day – some kind of miracle that there is actually no free lunch. A indeterminate outcome. tutional resource, to facilitate the currently estimated at 198 million jump. In short there is no certainty small training budget even if it is for realization of the objectives of the people and growing at a rate of 2.6 in this rapid production increase. the key man alone, is unavoidable. Send reactions to: AUC by confronting the key obsta- per cent – a growth deficit. Ghana’s This could negatively impact revenue, Continuous effort to create bankable [email protected]

Victoria Abuto Nigeria needs businessmen not bureaucrats

Abuto writes from Abuja and sent this We are in total and utter crisis: business and succeeding against all failed. He has failed to deliver on inefficient bureaucrat. piece via [email protected] The lack of jobs; crisis. The lack of the odds? Who enshrines democ- his two most basic pledges; se- Which brings us to the PDP. affordable healthcare; crisis. The racy, freedom, and productivity? curity and corruption. Today we Whether you like the party or not, lack of basic foodstuffs crisis. The There are many new and inter- are jobless and we are hopeless. Atiku gets things done. He may not endemic violence; crisis. And of esting candidates in the race this The president, of course, is not be the young Barack Obama we course, the bleeding jugular of our time around. But we all know that alone in his decision making ap- have all been dreaming of, but in igeria is a place of economy, our governance, and this is a two-horse race. It’s the APC paratus, yet despite a huge support a two horse race, he is the stronger firm beliefs. We be- our polity; corruption, the lynch- against the PDP, and no matter how network of supposed experts, the horse. He may not be perfect, but lieve in our religions pin of our contemporary crisis. many more acronyms are thrown military minded Buhari is making he is certainly the more likely firmly, dogmatically, When living in a truly exis- into the ring, or how many indi- no ground. Perhaps he is stuck in candidate to lead us out of these andN wholeheartedly. We believe tentially crisis, both on a national viduals put up billboards and com- the mindset of a leader of a military multiple crises in which we find in our family and tribal traditions and individual level, it is incum- mercials, the choice we are making government, blinding him from ourselves. Why? Because he is a and have great respect for where bent upon us all to first recognise lies between those two parties. It’s taking on board consultations from doer. A businessman. An entre- we come from. But one thing we that the status quo is unsustain- Buhari versus Atiku. ‘lower ranking officers’ or in this preneur. A man who understands don’t believe in is our politics, or able. Things must change. 99% The APC came to power four case advisors. Or perhaps, he has the pitfalls of the public sector, in fact our politicians. And quite of the country, who aren’t the years ago with grand promises, and been stifled by his years of experi- privatises where necessary, and rightly so. corrupted super wealthy, or the of course, the PDP are making the ence in public sector and military puts efficiency and productivity There is no firm ideology, no lucky heirs of a family fortune, same noises today. But if you are roles whereby bureaucracy places above all. left or right. Can you tell me what come home daily to their families like me and don’t trust promises, barriers to progress, and there And when we are mired in the difference is today between frustrated. or campaign pledges, if you think is nothing the so called decision crisis, struggling from day to day, the core ideas and worldviews of And for all those who recog- politicians are full of hot air, then maker can do about it. what could be more important for our leaders and the various can- nise that change is necessary, they look for something more substan- Whatever is the reason for a nation the size of Nigeria than didates? The answer is clearly no. must ask themselves, how will tial. Look directly at the candidate. Buhari’s failures, he has had his efficiency and productivity. It’s So when we go to vote in these that change come about? Who is Look at his character, look at his chance. He has failed. It is now time we had a businessman not historic elections, what are we qualified, experienced, and driven background, look at his experience. time to look beyond his failed lead- a bureaucrat. It’s time for change. looking for, if not ideology and to move this behemoth in the right Look for a track record! ership and the APC, and towards a ideas? Let’s remember what sort direction? Who understands the The current president has been leader’s whose track record is the Send reactions to: of state our country is in right now. economy. Who is experienced in at the helm twice already, and has polar opposite of the corrupt and [email protected] Wednesday 02 January 2019 C002D5556 BUSINESS DAY 11 comment is free comment Send 800word comments to [email protected] Character Matters with Daps Mindset always makes the difference

of giving in to that well worn mantra great majority are indeed grateful to outlook on life aren’t clogged up with of “this is Nigeria”. I get so tired of live in a society that works. Those who notions of limitations or impossibili- hearing that from those who feel this ‘ enjoy the benefits of a robust social ties and neither do they even stop to is it. Those who feel this is the best This society we complain welfare system wouldn’t want it any consider the very distinct possibility we should ever expect. Society as an about speaks of who we other way. They certainly wouldn’t of everything coming crashing down. Dapo Akande entity in itself doesn’t just decide this want to swap the comfort of regular They just do it and somehow it works. is how it wants to be. Whatever life it are. Let’s do something power supply for incessant darkness No wonder Mark Twain made this silly Graduate of the University of Surrey, UK, possesses and the colouration it takes and neither would they want the sounding but insightful comment: “All author of the acclaimed book: “The last fight: A personal journey to discovering on are implanted by us, its individual about who we are, motorable roads they have become you need in this life is ignorance and values.” components. Obediently, it assumes accustomed to to degenerate into confidence and then success is sure”. Contact: [email protected] the shape we collectively give it. The how we think, how we death traps. For this reason I would This, I believe is also why Jesus bible says: ”For as he thinketh in behave, how we treat only concede that we cannot change if Christ admonished in Matthew 18:2- his heart, so is he”. Otunba Subomi we were born corrupt. If Nigerians like 4 where he said, “Truly I tell you, Balogun thought in his heart, “yes it each other and let’s see you and I can change when we travel unless you change and become like o great mind has ever may not have been done before but I abroad, to adapt to a sane society, then little children, you will never enter the emerged as a result can set up a wholly Nigerian owned whether our nation will change here is possible too. kingdom of heaven”. Children exhibit a of its contentment to Merchant bank”. He refused to give After giving it regular and deep level of faith rare to find in adults. They remain within the con- in to the prevailing belief that it was remain the same reflection I’m utterly convinced that just believe. It is because of this pro- fines and conventions too much, too big, too difficult for a if indeed we want our children to pensity to believe and not doubt that Nof its time. To put it another way, Nigerian to do without the assistance embody the right values when they we need to teach them the way to go every great man goes ahead of his of a foreign partner. He refused to ’ grow up, if we want them to hold early enough. Once they are properly time and some measure of his great- accept that ” this is it”. No, he turned each other and let’s see whether our themselves to a higher standard and schooled to know right from wrong; to ness is his ability to drag his society a deaf ear to those who said it, “fine, nation will remain the same. I can as- if we want them to rejuvenate our so- pursue the cause of right always and out of the suffocating but altogether it can be done over there but this is sure you it will not. If things can work ciety, then we must catch them young. summarily dismiss the wrong, whether accepted norm by the scruff of the Nigeria”. Anyone fortunate enough elsewhere then they will work here. We must, during their formative years it is expedient or not, whether they are neck, into a new paradigm, a new to have heard or read his story will How do we proceed? By first pursuing infuse them correctly. being watched or not, whether they norm and an altogether novel way readily admit his remarkable success the common good. By learning to view As part of a continuous effort to can get away with it or not, then when of thinking. This is where greatness wasn’t a “miraculous” story of instant the success of your society as your suc- teach our children to be more respon- they grow up, with the help of God they often lies. Albert Einstein, Henry breakthrough much like the majority cess. That’s the crux of the matter. That sible, my wife and I insist they must will not depart from the right path. Ford, Walt Disney, Barak Obama, of Nigerian youths endlessly search is, for want of a better expression, the clear the kitchen rack of all washed Contrary to the erroneous position of Nelson Mandela and our very own for but is the culmination of dogged beginning and the end all. crockery after every meal, before the average Nigerian adult, I believe it Otunba Subomi Balogun (the first to determination, perseverance, great Nigerians are not inherently cor- washing another set. One simple can be done and that’s why I will end establish a wholly Nigerian merchant sacrifice, persistent hard work and rupt. I don’t care what anyone says, we reason amongst others is so there’ll with this quote: “Nothing splendid has bank) to name just a few, all believed the crowning of all these, the favour are not born with corruption running be enough room for the new set about ever been achieved except by those the impossible was indeed possible. of God. Thirty five years ago this through our veins. There is a latent but to be washed. Expectedly, as children, who dared believe that something The greatness of this time can pioneering mogul of our banking definite desire for things to be different many a time they forget. However, to inside them was superior to circum- begin with you and I. Not only when industry transformed the Nigerian but unfortunately many have come to our amazement every time they forget stances” – Bruce Barton new inventions are made or by win- mindset. We can do it again. see corruption as the only way to get to obey this instruction they somehow Changing the nation...one mind ning elections against all odds but by This society we complain about ahead. Nigerians who live abroad don’t creatively find space to accommodate at a time simply believing our noble cause for speaks of who we are. Let’s do some- desire for their country of residence to everything. Space that you and I would a better Nigeria, starting with a bet- thing about who we are, how we become corrupt. Admittedly there are almost certainly overlook. Why? In Send reactions to: ter you and I will succeed. Enough think, how we behave, how we treat a few bad eggs amongst them but the their innocence, their minds and [email protected]

Bankole Allibay

Dr. Allibay is the Global Social Per- Farmers and herdsmen clashes in Nigeria: formance Lead, Translantic Develop- ment Limited Crises cycle fuelled by sustainability gap

he term sustainability has both in terms of land mass and hu- ment in agricultural value chain livelihoods of the people, the future physical combat. long been tied to the con- man population. In the northern system. 90% of agricultural produce expansion plans and other critical Because of poor planning or cept of development and part of Nigeria, the average birth are consumed or sold without pro- issues such as the cattle route, the as it is in some cases, the lack of other esoteric narrative. rate is 6.3 - 7 per woman and due cessing. This drives a hydra-headed traditional land holding systems, it, the route designed / agreed by SustainabilityT is not particularly a to the high incidence of polygamy, challenge. First, it limits the food the social network parameters in stakeholders as cattle routes are trigger for crises and conflict but the average number of children per optionsfor the people due to lack of land holding among several oth- continually being encroached upon in some political circles and ethni- household is 10.5. Correspondingly, food sovereignty, which causes poor ers. Ultimately, lands are allocated by farmers and other actors, which cally sensitive arenas it has been the cumulative poverty rate in this dieting and malnutrition. Secondly, for political reasons without any obstructs the movement of cattle described as ethnic cleansing which part of the country is nearly 66%. it stagnates the economy because recourse to the plans of other stake- herders, affecting their livelihoods is the case of farmers and herdsmen Because agriculture is the main the value chain is supposed to cre- holders along the area – the growing and indirectly their survival. This conflict in Nigeria. This discussion stay of the Northern Nigeria econ- ate jobs which should naturally take number of subsistence farmers (due naturally triggers crises. Unfortu- paper establishes the nexus be- omy, very much like many Sahelian some households out of the direct to exceeding population growth nately, this situation, coupled with tween exceeding population growth countries in Africa, majority of the cultivation into value chain and without alternative livelihoods op- the proliferation of small arms across Africa, particularly Nigeria, population are farmers and they agro-processing, which should cre- tions) who are often usufruct title across the Sahelian nation due to the poor sustainability practices often farm unsustainably. They en- ate specialisation and knowledge holders, traditional land owners the uncontrolled exhaust from the and the weak investment in agri- gage in slash and burn techniques, transfer. By not investing in the value who own traditional lands on behalf Arab-Spring had helped create and cultural value chain, which creates often fail to conserve water, do not chain, the entire advantage to this of their people and in some case the sustain the Fulani Herdsmen and these conflicts that daily threaten engage in minimum tillage and ul- sector is lost. This then negatively throne they represent, the herders Famers Crises for the most part. national security in Nigeria. timately, cut down trees to increase drives further deforestation. who have age-long agreed access The entire chain of event in this About 68% of African population cultivatable areas. Consequently, Another independent agent in rights to grazing route and grazing discourserequiresurgent attention. engage in agriculture. Agriculture these practices encourage flood- this narrative is the lack of partici- reserves among several others, land It warrants a solution that is flexible here means direct cultivation of the ing and fast desert encroachment patory urban planning, or as it is in speculators for urbanisation, project enough to accommodate the needs earth – farming. About 66% of these which significantly reduces the many states, zero urban planning. developers, and several other actors. of all relevant stakeholders, in an farmers are only able to produce at amount of arable land, even in the This is another complex issue. The This unilateral decision of the organic manner to manage the crisis subsistence level, using crude farm medium term. Due to this scarcity law of eminent domain, an obvious state governors issuing land without etymologically. This would require implements (simple farm tools), of fertile arable land, the survival of character in the Nigerian 1999 Con- due consultation and adequate stra- significant capacity building, essen- poor quality seeds, suffer poor ac- the households drives them further stitution as evident in the land use tegic planning often lead to tram- tially on the need for family planning cess to markets (for the little they to deforestation which makes the decree 1978 is a major culprit here. pling on the interest of these other to address the issue of population are able to push to the market) situation worse. The State governorshave statutory stakeholders. Of these stakeholders, control. More so, there is an urgent and ultimately lose an average of On the leadership side, the right to give land on behalf of the farmer and herdsmen are the most need for land use management and 27% of their produce targeted at extension service system is weak. state for overriding public interests. concerned parties because their planning and equally important, the market. In Nigeria, specifically, Farmers are not taught on mini- This instrument is often used as a survival is dependent on access to investment in agricultural value approximately 70% of the about mum tillage systems or any other political tool, not necessarily a devel- land. Farming involve direct tillage chain and significant investment in 193million Nigerians are involved in sustainable farming practices to opmental tool, which arguably, is the of land, while and herding involv- afforestation to control desertifica- agriculture[1]. Significant percent- keep them from destroying the idea behind the concept. Often times ing livestock grazing on the land. In tion and further protect green areas. age of these farmers are found in the emerging forest areas to drive when these decisions are made, the most cases, they hold usufructuary Northern part of the country, which survival. A more strategic damage politicians override the existing land rights which when interest clashes, Send reactions to: [email protected] consists two thirdsof the country in this context is the lack of invest- use, the natural contours, the current they resort to confrontation and 12 BUSINESS DAY C002D5556 Wednesday 02 January 2019 Editorial

P ublis her/CEO Frank Aigbogun

editor Living in the past Patrick Atuanya ast month the Nige- turning point for industrialisation ever cost of repairs are incurred. work. This is despite several rian Senate passed but has become a sinking hole of This is a very faulty assumption be- commissioned turnaround main- DEPUTY EDITORS a bill to provide for government spending. It is gran- cause a buyer would pay a market tenance that ends up swallowing John Osadolor, Abuja the withdrawal of diose dream that has become a price for the plant, which would be Bill Okonedo billions of naira but fails to deliver $1 billion from the nightmare. Sadly, the Nigerian based on projections of potential refined products from the coun- ExcessL crude Account (ECA) for government is failing to wake up returns on the plant and not based try’s three refineries located in the completion of the Ajaokuta from the nightmare. For most pri- on what the government has spent Port Harcourt, Warri and Kaduna EXECUTIVE DIRECTOR, OPERATIONS Steel Company. The bill titled: vate businesses, when they make getting the plant into shape, if it with a combined capacity to refine Fabian Akagha An Act to Provide for the Ajao- a bad investment, the first advice ever gets into shape. 445,000 b/d. EXECUTIVE DIRECTOR, DIGITAL SERVICES kuta Steel Company Comple- is to cut your losses and run. In This means that, even where It must come to a point when Oghenevwoke Ighure tion Fund for the Speedy Com- the Nigerian government case, it the US$1 billion plus is sunk into the government must accept that pletion of the Project also puts is obvious that there is no cap on repairing the plant, there is no it has no capacity to run some of GENERAL MANAGER, ADVERT a stop to government’s planned the losses that the government guarantee that the government these assets that it keeps holding Adeola Ajewole concession of the steel plant. can make on an investment before would be able to recover the mon- on to. What is the benefit to the The bill, which had earlier been deciding when to cut and run. ey at the point of sale or even the government and the people of ADVERT MANAGER Ijeoma Ude passed by the House of Repre- It is difficult to understand the US$8 billion that has been sunk Nigeria that the government is sentatives, also makes provision rationale behind the National As- into the plant from construction holding on to assets that are con- FINANCE MANAGER that additional appropriation sembly’s decision to pass a special to date. Why this insistence on suming money that could be used Emeka Ifeanyi can be made from the budget, purpose bill to complete Ajaokuta. throwing good money after a bad to provide other social needs like and also loans and grants can be Why do you need a bill to complete investment? healthcare and education, when MANAGER, CONFERENCES & EVENTS taken by the federal government a plant? When the plant is com- Sadly, this attitude of hold- it could easily dispose of those Obiora Onyeaso to complete the Ajaokuta Steel pleted, what happens to the bill? ing onto a bad investment is not assets and allow the private sec- SUBSCRIPTIONS MANAGER mill. Effectively, the federal gov- Even more concerning in the bill totally strange. It is the same tor to turn it into a money making Patrick Ijegbai ernment is being given almost is the provision that the federal rationale that has inspired the venture that creates lucrative jobs a blank check to get Ajaokuta government must complete the federal government holding onto for Nigerians and boost revenues CIRCULATION MANAGER working again. repairs of the plant and make the refineries despite the fact that going to the government? John Okpaire This does not make sense. sure it starts ‘production at a very they have been making losses for The government has no busi- Since its inception in 1979, the significant stage’ before it can be more than two decades now. For ness in running a business. It is DIGITAL SALES MANAGER Linda Ochugbua Nigerian government has spent concessioned. In this case, the Na- more than two decades, the fed- not suited to doing so and the $8 billion on the plant and it is tional Assembly is assuming that, eral government has consistently sooner the government realises GM, BUSINESS DEVELOPMENT (North) yet to produce an ingot of steel. the purchase price of the Steel Mill shown that it has no capacity to that fact, the better for us all as Bashir Ibrahim Hassan It was built to be the nation’s would be enough to cover what- make the country’s refineries a country.

GM, BUSINESS DEVELOPMENT (South) Ignatius Chukwu

HEAD, HUMAN RESOURCES Adeola Obisesan

EDITORIAL ADVISORY BOARD Dick Kramer - Chairman Imo Itsueli Mohammed Hayatudeen Afolabi Oladele Vincent Maduka Keith Richards Opeyemi Agbaje Amina Oyagbola Bolanle Onagoruwa Fola Laoye Chuka Mordi Mezuo Nwuneli Charles Anudu Tunji Adegbesan Eyo Ekpo

Enquiries NEWS ROOM 08023165438 08169609331} Lagos 08033160837 Abuja ADVERTISING 01-2799108 08034743892 08033225506 SUBSCRIPTIONS 01-2799101 07032496069 07054563299 Mission OUR Core Values Statement BusinessDay avidly thrives on the mainstay of our core values of being The Fourth Estate, Credible, Independent, DIGITAL SERVICES Entrepreneurial and Purpose-Driven. 08026011296 To be a diversified provider of superior • The Fourth Estate: We take pride in being guarantors of liberal economic thought www.businessdayonline.com • Credible: We believe in the principle of being objective, fair and fact-based The Brook, business, financial and 6 Point Road, GRA, Apapa, Lagos, management intelligence • Independent: Our quest for liberal economic thought means that we are independent of private and public interests. Nigeria. across platforms acces- • Entrepreneurial: We constantly search for new opportunities, maintaining the highest ethical standards in all we do 01-2799100 sible to our customers • Purpose-Driven: We are committed to assembling a team of highly talented and motivated people that share Legal Advisers anywhere in the world. our vision, while treating them with respect and fairness. The Law Union www.businessdayonline.com Wednesday 02 January 2019 www.businessday.ng https://www.facebook.com/businessdayng @Businessdayng BUSINESS DAY 13 Leadership Shaping people into a team Will the Huawei arrest influence the US-China trade talks?

Clyde Prestowitz more likely to undermine the talks than lead to greater conces- he arrest of Meng sions. Wanzhou, chief fi- Of course, the president sub- nancial officer of the sequently has thrown doubt into Chinese technology the equation by stating that he company Huawei, would intervene to halt proceed- byT Canadian police upon the ings against Meng if he got a really request for extradition by the big trade deal from Xi. But the U.S. Federal Bureau of Investiga- fact is that the president does not tion has resulted in confusion have the authority to intervene regarding U.S.-China trade ne- in the legal proceedings against gotiations. Meng. So his statement seems Some believe hard-line na- to be something he thought of tional security elements of the subsequent to, rather than before, U.S. government ordered the the arrest. extradition request in order to A key part of the equation is sabotage the trade talks, or at Lighthizer’s strong insistence that least to disregard them in the the talks and the arrest are two historic tradition of U.S. national different and unrelated activities. security agencies putting their He knows the Chinese would concerns above trade issues. probably like the public to per- Some believe that President government. It has been the ben- tration’s trade negotiators led by situation. ceive that there is some kind of Donald Trump ordered the ex- eficiary of extensive government U.S. Trade Representative Robert Why didn’t Bolton inform the relationship because that would tradition request as a way of subsidies, contracts, protection, Lighthizer and Peter Navarro, president? One possible answer weaken his negotiating hand. So pressuring the Chinese President and, some say, government- an assistant to the president. is that he saw it was a case of the he is emphasizing that the talks Xi Jinping for further trade con- sponsored hacking of foreign They certainly didn’t want to FBI simply doing its job and thus and the arrest are not entangled. cessions. technology companies and of the sabotage themselves. Moreover, there was no reason to interrupt Since Lighthizer would be the big Some believe the U.S. has a U.S. government. since the timing of the arrest was the president, who was in the loser in the case of any entangle- vendetta against Huawei and The U.S. government has fortuitous, it was not something midst of discussions with Xi. An- ment, it is easy to believe he was senselessly got carried away by its charged Huawei with illegally that could have been purposely other is that Bolton is a national not part of any nefarious scheme. hatred in a way that may under- selling U.S. components to Iran, arranged to sabotage the trade security hawk who might prefer The degree to which the Chi- mine the trade discussion. and the FBI has been tracking talks. a breakdown in trade talks that nese government and the Trump As it happens, the truth is Huawei executives for the pur- If it’s true that Trump and might relieve pressure within administration allow Meng’s ar- almost certainly much less ex- pose of making an arrest. It was Lighthizer did not know of the the U.S. government to take rest to become part of the trade citing. fortuitous that Meng happened arrest in advance, it would raise more vigorous defense measures negotiations remains to be seen. I Let’s start with the last issue. to be in Canada when she was, the issue of why no one told them. against China. Or maybe it was a just hope that the Trump admin- It is true that the U.S. govern- but the FBI move was not made There are two possible explana- combination of the two. istration keeps them separate. ment has a deep concern about in a sudden fit of anger. The war- tions. One is that the FBI was What about the notion that Too many times in the past, the Huawei. But that concern is not rant for arrest had been out for focused on its case and simply the president ordered the arrest U.S. government has needlessly entirely without foundation. some time. didn’t think of the arrest in the precisely in order to wring more sacrificed crucial trade priorities Huawei is the world’s largest Did a group of national se- context of the trade talks. How- trade concessions from Xi? This to the goals or concerns of nation- telecommunications-equipment curity hawks deliberately try to ever, National Security Adviser is unlikely. First, the timing was al security agencies. It would be a maker. Its founder came from the sabotage the trade talks? The John Bolton was informed but unpredictable, and the president shame for that to happen again. People’s Liberation Army and has Chinese probably wouldn’t mind did not pass the information on could not have known in advance maintained a close relationship if this view were widely believed, to the president. Informing the that an arrest was even possible. Prestowitz is founder and presi- with the PLA as well as with other but it seems unlikely. For starters, national security adviser would Second, intertwining the arrest dent of the Economic Strategy security agencies of the Chinese the true hawks are the adminis- be a natural thing to do in this with the trade talks would be Institute in Washington, D.C.

c 2017 Harvard Business School Publishing Corp. Distributed by The New York Times Syndicate 14 BUSINESS DAY C002D5556 Wednesday 02 January 2019 In association with

[email protected] Nigeria’s agric output drags in 2018 as flood, insecurity stalls growth

Stories by Josephine Okojie beyond a level they could thrive. Furthermore, fungal diseases igeria’s agricultural usually become more rampant output for 2018 when extensive flooding overtakes declined, aided by the farms, making diseases and pests spate of insurgency in infestation rampant. the war-torn North- “During flood there’s a lot of EasternN states, farmers-herders fungi development, which leads crisis in the middle belt and floods to a lot of fungal diseases in crop that destroyed farmlands across the production,” said AfricanFarmer country. Mogaji, chief executive officer, X-ray Data from the National Bureau of Farms Limited. Statistics (NBS) GDP report shows In the four subsectors that makes that growth in the sector has been on up agricultural sector, growth in crop the decline since first quarter 2017, production contracted from 3.16 with marginal recorded growth only percent in q3 2017 to 1.87 percent in in the fourth quarter of the same year. q3 2018. Also, growth in the forestry The GDP report shows that subsector contracted from 3.9 percent growth in the sector contracted in q3 2017 to 3.6 in q3 2018. from 3.06 percent in q3 2017 to 1.91 The solutions proffered by experts percent in q3 2018 year on year. The to address the issue of flood include development is a major setback to the need to construct more and government’s efforts in boosting better drainage systems across food production in the country. said. The firm lost N23 million, yet no arrests officer, Oamsal Nigeria Limited, told the country, and more dams to be “The North-Central region has The continuous onslaught by were made and no compensation was BusinessDay. developed to take up water from become a den of herdsmen and herdsmen has led to the destruction given to it up till today. Similarly, the flood incident that presently overworked reservoirs. kidnappers,” said Dele Ogunlade, of agro raw materials and drop “We received no form of submerged farmlands across the The experts further pointed chief executive officer, Crest Agro in output of major crops such as compensation and up till now we are country also impacted on agricultural out the need for farmers to adopt Products. cassava, grains, oranges, mangoes unable to plant cassava. Farmers are output for the year. humidity resistant seeds and “If the issue of herdsmen is not and other commodities that serves still sceptical to farm because their This affected the country’s rice effective fungal chemicals, which addressed then we should be ready as food and inputs for manufacturers farms can be destroyed overnight production and this led to a shortfall they described as important in for a food crisis because a lot of in the food and beverage industry. by herdsmen and there is no form of the crop. managing crop loss. farmers are not farming large areas In 2016, 55 hectares of cassava of compensation either through According to experts when severe “We need to engage more seeds like before due to the high rate of farmland belonging to Oamsal Nigeria insurance or the government,” floods occur, farmers incur huge that are resistant to high humidity,” insecurity in the region,” Ogunlade Limited were destroyed by herdsmen. Oluwafemi Salami, chief executive losses, as their crops get submerged Mogaji said. Jumia Foods’ order volumes rise 120% Why Nigerian farmers are unable to on more offerings, payment options easily access fertilisers timely …launches late night delivery service espite the Nigerian- and the fertilisers companies,” said Morocco fertiliser deal Muhamed Hettiti, managing director, umia Foods, a market place for Jumia Party led to over 120 percent family. We have worked with our that has helped in OCP Africa Fertilisers Nigeria restaurant has recorded 120 increase in the volume of orders,” third party vendors to provide our increasing the country’s Limited in a chat with the Food Dlocal blending capacity and reduce and Agricultural Writers (FAWON) percent increase in its volume of Guy Futi, managing director, Jumia drivers with bikes and incentives to orders made on the platform in Foods said during a press briefing in improve on delivery time,” Futi said. the prices of fertilisers, farmers are members in Lagos recently. J2018 owing to the provision of more Lagos recently. Speaking on how the organisation still unable to easily access the soil “We have a challenge between the food offerings and payment options. “We are getting many assortments ensures that quality foods are being fertility booster as at when needed. ports and the blending units but we Jumia has also launched a late- as possible by bringing KFC, Krispy supplied in its market place by Farmers across the country have still have a bigger challenge after the night delivery service to enable Kreme amongst others on board. Our restaurant’s on board, he stated that continued to complain about the blending units. Farming is timely and customers to order food up until focus is to expand the food offerings Jumia conducts a routine checks on late arrival of fertilisers after farming if farmers do not get fertilisers at the midnight. and we have seen lots of sale on the vendors and restaurants as well as a processes have begun. right time, it will affect their output,” “We have been around for six Jumia party where clients can order monthly customer satisfaction survey. As a result, lots of farmers are Hettiti said. years and 2018 is our best year. The the kind of drinks they want from Chioma Odimegwu, head of forced to either grow their crops To provide a solution to the late night delivery combined with alcoholic to non-alcoholic drinks to marketing, Jumia Foods said “we without the application of sufficient challenge, he said that OCP has initiatives like greater customer their homes. are trying to be the convenient fertilisers or wait for the next planting established a one stop shop to be accessibility, more payment options, “Our delivery has been very option for people in places that is not season as farming is seasonal. sure that farmers get fertilisers easily. more locations, lunchtime deals, efficient through our push to convenient to easily get food to eat. Experts in the fertiliser industry One of the greatest problems seasonal deals and new related integrate the riders into the Jumia We are soliciting for restaurants that have attributed this to the poor confronting rural farmers and runs for 24 hours to ensure people network of fertiliser distribution communities in Nigeria is the get the options they want.” and the huge infrastructural gaps in absence of critical infrastructure On what to expect in 2019, the country. such as ‘motorable’ roads. Odimegwu said that operational According to them, fertilisers are Nigeria continues to suffer low efficiency will be an integral part of available in most blending plants, levels of agricultural productivity due the company’s focus in 2019. but the poor road network across to infrastructural deficit across the “In 2019, we are looking forward the country and the bulkiness of country. Due to the deplorable state to welcoming a new and exciting the product has made it difficult to of roads, agro dealers find it difficult restaurant/vendor on board within distribute to farmers timely. to transit fertilisers to the farms for the month. We will also be engaging They noted that the issue is even farmers. new partnerships across other more serious in some states compare “It is difficult to get fertilisers industries to provide added value to others and that the challenge despite we produce more now. The to customers, on-boarding more has made agro dealers spend more dealers keep promising to supply restaurants with longer and later on transportation of fertilisers to early but most times they do not. farmers. The fertilisers comes most time L-R: Guy Futi, managing director, Jumia Food; Chioma Odimegwu, head of open hours, more focus on corporate marketing and vendor success, Jumia Food and Jumia Party Nigeria; Omolara catering offerings, encouraging “There are lots of fertilisers in when we are a month or two into Adagunodo, managing director, Jumia Travel and Olukayode Kolawole, head- closer relationships with our the country but the distribution the season,” Ademola Olagoke, a public relations, Jumia Nigeria during a press briefing recently in Lagos. customers and restaurant vendors.” network is a big problem to farmers vegetable farmer in Ogun state said. Wednesday 02 January 2019 C002D5556 BUSINESS DAY 15

[email protected] Poor allocation, system failure stalls agric research potentials

farmers output,” said Baba adds. Josephine Okojie Yusuf Abubakar, executive The research institutes gricultural secretary, Agricultural have blamed the inability research Research Council of Nigeria of them to improve farmers institutes (ARCN). output on failed government operating in the Despite the country’s large structures that does not country have size of agriculture in relation allow effective and efficient failedA to provide technologies to other African nations, translation of what the that will improve farmers Nigeria lags behind its peers in researchers are doing to the output as low yield per hectare the sector in terms of research farmers. of most food and cash crop funding. According to Celestine still persists, Businessday For every $100 of Ikuenobe, director of investigations have shown. agricultural output, research, Nigerian Institute Analysts attribute the Nigeria invests only $0.42 of Oil Palm Research inability of agric research into agricultural research, (NIFOR), “despite poor institutes to reach its as compared to $0.94 and funding, we still provide some potentials to poor funding, $1.40 in Ghana and Uganda technologies for farmers but system failure, corruption respectively, according to a the government structures and total neglect of 2015 report by ActionAid. has failed to translate the the institutions by the “The agricultural research technologies to farmers. government. institutions in the country are Most of the seedlings According to them, there not working. They have not used by farmers across the is need for the government to improved farmers’ output in federation are imported from address this issue if it wants any way,” said Tunde Oyelola, other countries and this has agriculture to play a leading chairman, MAN Export led to the importation and role in the diversification Group. distribution of fake seeds in process. Nigeria has the highest the country. Many research “The research institutions agricultural research system institutes are redundant are underfunded and they lack in Africa though, in terms and are not conducting any basic facilities. Equipment these institutions. The money commensurate result. But today, the dream has of investments and number research. for research are obsolete or gets into private hands instead In its bid to increase become dead, the vision of researchers, with over “Because you don’t not in existence in many of of the research institutions,” agricultural productivity, blurred and the mission a 80 government and high produce, people smuggle these institutes,” said Micheal Ajala said. improve the lives of rural mere statement of expression education institutes and over or import various types of Oluwole Ajala, professor of Data obtained from the communities and make as majority of the institutes are 2,000 researchers engaged in vaccines into this country. We Seed Technology, Federal budgetary allocation to the Nigeria sufficient in food, mere shadow of themselves. research. However, official need more vaccines,” Audu University of Agriculture agricultural ministry shows the federal government “We have a total of fraud limits funds from Ogbe, Minister of Agriculture Abeokuta (FUNAAB). that the research institutions established various agric 13,000,000 staff members reaching their points of critical and Rural Development “Corruption is also a big get an average of N19.6 billion research institutes with and 90 percent of the yearly need. said to researchers when problem. Most of the money yearly in the last three years. a focus on food and cash allocation goes into salaries “Government needs to commissioning the Biosafety allocated to these institutions This means that the country crop, mandated to provide and emoluments. Only 10 fund them adequately level three laboratory at the in the budget doesn’t get to the cumulatively spent N59 technologies that will increase percent goes into research. because research is not cheap National Veterinary Research institutions. One third of the billion on research institutes farmers’ productivity and This is why the institutes have and to ensure that the funds Institute (NVRI), Vom total allocations finally get to in the last three years without boost food production. not been able to improve get to the institutions,” Oyelola recently.

Okitipupa oil palm bounces AFAN cautions FG against concession of silos, sale of BoA SIKIRAT SHEHU, Ilorin the excess at the point of farmers get more money and harvest at the minimum during the increase in price back, begins production unde Arosanyin, guarantee price to ensure of grains and commodities, government can release from Yomi Ayeleso, Akure technology would be bank account for six years. national technical that the farmers make profit deployed to further enhance Those working there are not adviser of the All and their investments in these strategic silos to cushion he Okitipupa Oil the production level of the oil effective and do not have the Farmers Association various farms. the effect and the burden Palm Company has palm company. focus of the company at heart. (AFAN)T has cautioned the “We expected government of increase in food crisis for bounced back to life Flanked by Taiwo Adewole, “In the last 16 years no Federal Government against to even create additional the average Nigeria to buy at and has commenced chief executive officer the dividend was declared and plan to concession silos in the storage centres in all the affordable prices. productionT after been in company and Kayode we are concerned about it. country and to sell the Bank of 774 local governments as On the purported plan to comatose for many years. Araloye ,a member of the The survival of the company Agriculture (BoA). being advocated by the last sell Bank of Agriculture, the The new management management committee , is paramount for us to make a Arosanyin, who stated administration and even AFAN chief explained that the committee of the Okitioupa oil Osomo noted that four areas viable company and compete this in an interview with incorporate the cold system advocacy at the last National palm Plc in Ondo state has said were identified to help return favourably in the industry. journalists in Ilorin, noted that where even the Fulanis that Council on Agriculture was that the company had been the company to profitability. “What we are doing is the expectation of farmers was have milk. that the bank should be restructured and repositioned He gave the areas as finance, corporate restructuring which that government would create “This milk can be bought recapitalised. for a better service delivery for operations, personnel and the is going to be continuous. Part more storage centres across and stored there and then “It was advocated that its customers. shareholders. of it was to get rid of ineffective the 774 local government people and the dairy people Bank of Agriculture needs Addressing journalists in “When we took over this and inefficient workers. Over councils across the country. and companies can come and to be recapitalised; ditto the Akure ,the Ondo state capital company few months ago, we 8.4 million bunches are Speaking with BusinessDay buy directly from these silos”, Bank of Industry because , Wale Osomo , director and quickly noticed four areas that lost annually. Our IGR has correspondent, he said “we he said. these two banks have critical chairman of the management needed to be worked upon. We improved over these months heard that the silos built by Arosanyin, who is a former roles to play if this country committee ,said about 12,474 discovered that the company and we are getting in touch the previous administration chairman of AFAN in Kogi said must move forward. hectares of the company was lacking adequate funding, with our shareholders,” he said. were going into concession, such plan amount to conflict “The Bank of Agriculture has suffered due to bad no internally generated He added that the company sales and leasing by this of opinion within the robust is to interface in primary management ,adding that the revenue, Illegal harvesters, was poised to provide government.” policy of addressing hunger. production to be able to new board was undergoing breakdown of the mills, and employment opportunities “We have thought “We felt that government give loans to rural farmers what he described as miss-management of fund. and be a catalyst for economic otherwise that this should have been able to at a single digit interest corporate restructuring. You would not believe the transformation in the area and government will spur food reactivate these silos and use rate. The bank presently is According to him, company does not have a the state at large. production and then mop it judiciously to ensure that undercapitalized”, he said. 16 BUSINESS DAY g www. g @ g Wednesday 02 January 2019 CITYFile Police arraign man over N1m land fraud he police in Kano have arraigned a 36-year man, Tahir Ahmad, for Tallegedly defrauding a man of N1 million. Ahmad, who resides at Darmanawa Quarters, Kano is facing a charge of forg- ery and cheating before a Senior Magis- trates’ Court in the Kano metropolis. The prosecutor, Yusuf Sale, told the court on Monday that one Salisu Garba of Ribado Road, Kano, reported the case at the Filin Hockey Police Station in Kano on December 15. Sale said the accused sold a plot of land situated at No. 637, Naibawa Quarters, Kano to the complainant at the sum of N1 million. “The accused collected the money and gave the complainant a fake document for the land,’’ he said. According to the prosecutor, the of- fences contravened Sections 320 and 362 of the Penal Code. The accused, however, pleaded not guilty to the charge. But Aminu Fagge, a senior magistrate, remanded the accused A man working on an Electricity pole at Moshood Abiola Way, Ebute Metta in Lagos. NAN in prison and adjourned the case until January7, 2019 for mention. (NAN) Ambode mourns Environmentalist warns Femi Pearse agos State governor Akinwunmi Ambode has expressed sadness Lover the demise of Ayodeji Femi- of epidemic in Lagos Pearse, founder of the popular Badagry resort, Whispering Palms. Femi-Pearse, a former provost, Lagos ... as Visionscape waste trucks disappear from roads University Teaching Hospital (LUTH), acting vice chancellor, University of Lagos JOSHUA BASSEY The company had come under se- Rago axis where cart pushers have vere criticisms by the public and par- turned the area into a huge dumpsite, (UNILAG) and prochancellor, Lagos State ticularly members of the Lagos State within a neighbourhood of over 4,000 University (LASU) died last Friday at the n Environmentalist, Glory age of 86. Williams has warned of the House of Assembly, who claimed the inhabitants. introduction of the company into the “It is unfortunate that most of the per- Ambode, in a statement by his Chief possibility of an epidemic in Press Secretary, Habib Aruna described various parts of Lagos State waste management system of the state petrators of this environmental nuisance the death of the late professor of medicine due to the indiscriminate by the executive, did not have their full are oblivious of their acts or inactions. Adumping of waste on major streets and endorsement. Following attacks on its “We must not wait until we are con- as a great loss to the academic community roads in the state. personnel and equipment, Visionscape sumed before we halt the ugly trend that as well as the hospitality industry. Williams, who spoke on environmental had threatened to withdraw its services is creeping into our living standards. “Professor Femi-Pearse was a man of conservation in Lagos, said the dumping from the state. “It is time both the public and private many parts. From the academic world of waste on major streets and roads es- Against the increasing heaps of waste social health workers go on to the field to the hospitality industry, he wrote his pecially in Okokomaiko area of the state in some parts of the state, Williams said and educate the masses on the dangers name in gold. His brilliance in the aca- was reaching an alarming rate and posed the government should urgently evolve of such actions,’’ Williams said. demia was well known as he contributed a threat to lives. measures to avert what she called loom- She called on the local and state au- in no small way in enhancing research The warning comes as the BusinessDay ing danger. thorities to move to action and forestall especially in the medical profession. that waste trucks owned by Visionscape, Williams said that, “it seems to have what she referred to as a human-induced “His contributions in the hospital- the municipal waste management com- become a tradition in many parts of the danger. ity industry cannot be underestimated. pany with which the state government state for people to dispose of their domes- Checks showed that heaps of refuse Through the popular Whispering Palms tic waste on the roads and the stench was have taken over Alaba Rago, a major link signed a deal last year to cart away refuse resort he founded with his late wife, he at- making life unbearable for both passersby road to the Alaba International Market, from the metropolis, are no longer on the tracted visitors and tourists to the ancient roads. and nearby residents. making the road impassable for motor- “The worst case scenario is the Alaba ists. town of Badagry and the State. He also spearheaded some community projects which today have greatly enhanced the standard of living in the town,” he said. Unidentified gunmen kill 4, injure 2 in Plateau The governor, while commiserating with the family of the late professor, urged nidentified gunmen have at- Gwom Nding village that at about 6 pm on duty. them to uphold the ideals he stood for tacked and killed four persons on Sunday, some unknown gunmen at- “Of the three injured persons taken and preserve the legacies which would in Nding community of Barkin tacked a Peugeot 504 Station Wagon on to the hospital, one later died while the continue to serve as an inspiration for Ladi local government area of the way to the village. remaining two are still receiving treat- generations to come. UPlateau State. “On receipt of the information, Aus- ment,” he said “His death is a sad loss especially com- Spokesperson of the police in the tin Agbonlahor, the Commissioner of The police spokesman said the ing a few months after the demise of his state, Terna Tyopev, who confirmed the Police in the state assembled a team command has commenced investi- wife, Ibilola. Indeed, a good man and a incident to journalists on Monday, said that went to the scene of crime but gation on the matter and called on great man has gone home, the State and the incident occurred Sunday evening. discovered on arrival that the attackers citizens with useful information that nation has lost a rare gem. I want to urge He said the villagers were attacked while had fled. could lead to the arrest of the perpe- returning to the village in a Peugeot 504 “The team found three persons mo- trators to urgently avail it to the police. the entire family to take solace in the fact station wagon. tionless and they were immediately taken He advised residents of the state to that he lived a well fulfilled life and his “At about 6: 15 pm, we received a to the Barkin Ladi General Hospital where be law abiding as they go about their sterling contributions would never be distress call from one Samson Bitrus of they were confirmed dead by the doctor lawful businesses. forgotten in a hurry. Wednesday 02 January 2019 www.businessday.ng https://www.facebook.com/businessdayng @Businessdayng @Businessdayng BUSINESS DAY 17

How CCNN, Unity Bank, COMPANIES Sterling Bank emerged best performing stocks in 2018 & MARKETS Pg. 18 COMPANY NEWS ANALYSIS AND INSIGHT MANUFACTURING Vitafoam hits 2yr high after N601.92m profit in 2018 OLUWASEGUN OLAKOYENIKAN as against 42,974 units and N158, 625 recorded at the close of business on Friday itafoam respectively. Nige- The recent surge in ria Plc, price puts Vitafoam manufac- as the eleventh best turers of performing stock for Vfoam and flexible/ the year after Cement rigid polyurethane Company of North- products, rose to the ern Nigeria, Unity highest in more than Bank, Sterling Bank, two years on Mon- Learn Africa NEM In- day on the floor of surance, Skye Bank, the Nigerian Stock Caverton Offshore Exchange (NSE), as Support Group, C&I investors cheered the Leasing, Continen- company’s impres- tal Re-Insurance and sive financial score- Fidson Healthcare. card. In the last two (2) Vitafoam shares years, Vitafoam re- gained 10 percent corded unimpres- to N4.40 per share sive financial perfor- to close for the year mance, posting a loss after the consumer of N127.69 million in goods firm declared 2017 down from a loss a profit of N601.93 after tax of N32.03 million; this brings million in 2017. its return for the year BusinessDay analy- to N19.53 billion as was largely driven of N127.69 million company’s profits to 33.33 percent. sis of the Vitafoam’s against N17.69 bil- by 56.85 percent in- posted in 2017 de- triggered its earn- The volume and financial statements lion recorded in the crease in the firm’s spite paying N191.03 ings per share to value of Vitafoam for the year ended previous year. operating profit to million as tax, this rise by 480 percent shares traded rose September 30, 2018 Profit before tax N2.09 billion. is about 32 percent to 57 kobo in 2018 significantly by 6,153 reveals the com- ballooned by 4,278 Vitafoam grew its increase when com- from a loss per share percent and 7,353 pany’s recorded a percent to N793.85 profit for the year pared with N145.82 of 15 kobo in 2017, percent on Monday strong financial per- million in 2018 from by 571 percent to million paid in the while net assets rose to 2.69 million units formance as revenue N18.13 million in the N601.92 million previous year. by 15.09 percent to and N11.82 million surged 10.38 percent previous year. This from a loss after tax The growth in the N3.88 billion.

APPOINTMENTS Edu Okeke replaces Ladipo as new Azura Power MD

LOLADE AKINMURELE independent power the mantle at a time joining Azura, Okeke Okeke’s promotion the power plant to plant, had told inves- when Nigeria turns headed the sub-sa- to MD, Azura broad- a local substation; tors in 2017 of a suc- to privately-financed haran Power genera- ened the composi- an 800m spur line du Okeke cession plan that will independent power tion sales division tion of its senior that connects to the will re- see him relieved by plants like the Azura of General Electric, management team country’s main gas sume as Okereke at the end of IPP to help end having joined the by promoting Fela pipeline network; managing 2018, who at the time decades of power American Conglom- Somoye and Vic- and a gas pressure director of was deputy manag- shortages that have erate in 2008 as tor Agboh to senior reduction and meter- EAzura Power Ltd in ing director. dogged businesses West Africa Regional manager status ear- ing station. the New Year as Da- “I have been and households, manager. He also lier in 2018. The construction vid Ladipo calls time tremendously proud as well as subdued had stints at Lafarge, The Azura-Edo IPP of the facility was on an eight year stay of the performance economic growth in Schlumbeger and is a 461 MW gas-fired completed in a re- at the helm. exhibited by Edu and Africa’s most popu- Guinness. open-cycle power cord 8 months ahead Ladipo, under the rest of the man- lous nation. He holds a BSc in plant near Benin of schedule and whose watch the agement team this Okeke joined Electronic Engineer- City, South of Nige- became fully opera- company developed, year. They’ve really Azura in 2014 as ing from the Uni- ria, in Edo state. The tional on 1 May 2018. built and commis- outdone themselves,” its Chief Operat- versity of Nigeria, facility comprises an During peak dispatch sioned the 461 Mega- Ladipo said in an ing Officer before Nsukka and an MBA open cycle gas tur- hours, the plant pro- Watts Azura-Edo email to Business- becoming Deputy from Imperial Col- bine power station; duces up to 10% of IPP, Nigeria’s first Day. Managing Direc- lege, London. a short transmis- all the power on the privately-financed Okeke takes up tor in 2016. Prior to In preparation for sion line connecting Nigerian Grid.

Edited by LOLADE AKINMURELE ([email protected]) Graphics: CHINEDUM ONYEMA 18 BUSINESS DAY www.businessday.ng https://www.facebook.com/businessdayng @Businessdayng @Businessdayng Wednesday 02 January 2019 COMPANIES & MARKETS MARKETS How CCNN, Unity Bank, Sterling Bank emerged best performing stocks in 2018

OLUWASEGUN OLAKOYENIKAN holders have given ap- proval to a planned he year 2018 merger between it and turned soar BUA Cement. for equity The merger raises investors as the total installed ca- the market pacity of the merged Trecords its worst per- entity to two million formance since 2009 metric tonnes per an- when the valuation of num, according to the listed stocks dipped by statement. The devel- 33.78 percent. opment also brings the In spite of the bear- total capacity of BUA’s ishness that took over cement operations to the Nigeria’s stock mar- eight million tonnes ket in the just conclud- per annum, follow- ed year, quoted stocks ing the group’s recent like Cement Company completion of its three of Nigeria (CCNN), million MTP Obu II Ce- Unity Bank and Ster- ment Plant in Okpella, ling Bank were able to Edo State, it said. show their tolerance Unity Bank Plc Taxpal debuts in Lagos to drive tax by withstanding the trailed with 84.91 per- downturn that caused cent return for the year L-R: Clement Osuji, chairman, CIBN Rivers State Branch; Uche Olowu, president/chairman of council, CIBN and Eze Noble Worlumanekwe, Oha- the market to shrink by to close at N1.07 per Omasi De 2nd, the paramount ruler of Rumuomasi, Oropotoma, Kingdom during the 2018 CIBN Rivers Stater Annual Bankers Dinners and Awards compliance 17.81 percent. share despite the com- Night held at The Arrium Event Centre, Port Harcourt, River State recently. CCNN emerged the pany’s unimpressive best performing stock financial performance for the year even as its in 2017 which saw the and similar income to 2017 down to N643.78 two lender notified its shares shed 2.76 per- bank recording nega- the matter told Busi- N20.51 billion. million in the review shareholders on plans cent to close at N19.40 tive capital. nessDay. Although the bank period, while post-tax to issue up N35 billion per share, return grew The stock recently The bank’s gross showed prudency by profit shed a whopping in Series 6 and Series by 110 percent after the recorded 6-day streak income for the first effectively reducing sum of N1.86 billion to 7 commercial paper last trading session of of gains to hit over nine months in 2018 its operating expenses N585.84 million. under its N100 billion the year. 5-month high after fell by 59.82 percent to N15.41 billion in Sterling Bank Plc commercial paper pro- The company had holding its 12th An- to N26.13 billion as the nine-month period was the third-best gramme that was es- in an emailed state- nual General Meeting against N65.03 bil- ended September 30, performing stock at tablished in 2016. ment made available to (AGM) on December lion recorded in the 2018 as against N18.62 the NSE in 2018, the “The proceeds of the BusinessDay Monday 17, 2018 and over in- same period in 2017. expended in the same stock appreciated by CPs are intended to disclosed that the Se- creasing hopes on pos- Net interest income period in 2017, but its 71.30 percent to close boost the working capi- curities and Exchange sible capital injection dropped sharply by profits were greatly at N1.85 per share on tal financing needs of Commission (SEC), aimed at stabilising, 74.23 percent to N9.93 washed off as profit Monday. the Bank,” the financial the Nigerian Stock Ex- a top executive of the billion from N38.52 before tax fell from Shares of Sterling institution said in a no- change (NSE), a Feder- bank who asked not to posted in 2017, largely N2.72 billion in the Bank began to rally tice filed at NSE. al High Court sitting in be named as he was not driven 67.52 percent first nine months of few days after the tier- Lagos, and the share- authorised to speak on shortfalls in interest

MARKETS Positive close to 2018 fails to mask year-long rout

SEGUN ADAMS lion at the beginning forecast for next year Diamond bank and proposed merger with gards dropping 9.30 rading ac- of the year, following until the elections are Nem insurance were Access bank. Subse- percent to close at tivities on political uncertain- concluded as political the hottest stocks for quently, Unity Bank 78k per share, while the floor of ties and hawkish rates uncertainties bother the day. and Linkage Assur- Equity Assurance and the Nigerian in the United States investors. There is Vitafoam Nig Plc. ance gained 9.18 per- Aiico insurance each TStock Exchange (NSE) which trimmed gains presently a risk off led the advancers after cent and 9.09 percent lost 9.09 percent and closed for the year on enjoyed in the 2017 sentiment towards the gaining 10 percent on respectively to close 8.70 percent to close Monday, 31 Decem- market rally. local bourse’’ Sam- its share price to close at N1.07 and 72k per at 20k and 0.63k per ber on positive note At the close of uel Sunday, a Lagos at N4.40 per share. share respectively. share. as the All Share Index trading for the year, based analyst at Unit- The rally followed its On the contrary, Across sectors, rose by 1.27 percent Industrial sector had ed Capital explained, declaration of N601.9 Stanbic Ibtc hold- the performance was to close at 31,430.50 lost the most, spiral- adding that: million profits after ings lost the most in bullish as all five points, moderating ling 37.34 percent ‘’Market should tax which was its best the day’s trading after sectors closed in the the YtD loss to 18 per- YtD while Consumer start rallying late Q1 performance in two depreciating 9.95 per- green. Oil and Gas cent. goods (23.28), Bank- 2018 and it should years. cent to close at N47.95 (3.73%) and Consumer Investors have lost ing sector (16.09%) close relatively up for Champion Brewries per share, while Forte Goods (1.42%) gained a whopping N1.9 tril- followed with Insur- the rest of the year as gained 9.94 percent to Oil lost 9.89 percent the most for the day lion in 2018 as market ance (9.25%) and US plans to be dovish close at N1.99 while to close at N28.70 per although with YtD capitalisation shed Oil and Gas (8.61%) with fed rates come Diamond Bank gained share. losses of 8.61 percent 13.88 percent to close performed relatively 2019.’’ 9.55 percent to sustain Neimeth interna- and 23.28 percent re- at N11.72 trillion com- better. Union diagnostic the price rally result- tional pharmaceuti- spectively. pared to N13.61 tril- ‘There is no certain and clinical services, ing from news of its cals joined the lag- Wednesday 02 January 2019 www.businessday.ng https://www.facebook.com/businessdayng @Businessdayng @Businessdayng BUSINESS DAY 19 COMPANIES & MARKETS Business Event TRAVEL How the indefinite shut down of US embassy affects you

mission into the Massachusetts IFEOMA OKEKE and Consulate-General, Lagos are unfortunately closed. Institute of Technology in Boston They will re-open once the except my visa. I had been sched- housands of Nigerians US government shutdown is uled to attend a visa interview from students to busi- resolved. Sorry for any inconve- early next month. However, with ness people who need nience to our valued patrons.” this recent development, I do not to travel to the United Thousands of Nigerians know what to do, especially as TStates anytime from now are are currently on the queue for school resumes soon” Chike, a stranded after the United States visa appointments to get the graduate of University of Ibadan embassy in Abuja and its con- United States visa for study, told BusinessDay. sulate in Lagos have been shut business, tourism, health and A travel expert who craved down with no specific timeline other purposes. However these anonymity told BusinessDay that L-R: Mark Okoye, Future Awards Africa Young Person Of The Year 2016; Biodun Shobanjo, chairman Troyka for re-opening. engagements may be put on hold this is not good for the economy Holdings; Samson Itodo, winner Of The Future Awards Africa For The Young Person Of The Year; Adebola The US embassy in Nigeria pending when the United States and business because a lot of Williams, co-founder, The Future Awards Africa, and Ngozi Nkwoji, Portfolio Manager, Non-Alcoholic brands, said in a Facebook post that the embassy reopens. businesses will be put on hold Nigerian Breweries Plc., presenting the Young Person Of The Year award at The Future Awards Africa 2018. development was caused by the Students who had come back as a result of this development. government shutdown in the US. to Nigeria to renew their visas are The travel expert further The statement read, “Due currently stranded over inability wondered how those with seri- to the current US government to get visa appointment dates. ous health challenges who had shutdown, the American centres “I have fulfilled almost every- referred to hospitals abroad will located in the embassy, Abuja thing needed to process my ad- cope with the situation.

BANKING Moody says Nigeria risks weak investor confidence over political uncertainty …sees improved foreign-currency liquidity and rising loan quality

OLUWASEGUN OLAKOYENIKAN drive economic acceleration” Monetary Fund (IMF). in the country. In spite of these, the rating oody’s inves- Nigeria goes to the polls agency sees banks showing tors service, a next February to decide its strong financial resilience in L-R: Joshua Ajayi, editor-in-chief Brand Communicator; Yomi Badejo-Okusanya group chief executive officer, leading credit President among ruling Presi- 2019 but warned that tighten- CMC Connect; Uche Ajene, managing consultant, Quadrant MSL, and Nike McMedal, wife to Chairman NIPR rating and re- dent Muhammadu Buhari, ing global financial condi- Lagos State Chapter, at the Lagos PR Industry Gala and Awards (LaPRIGA) in Lagos. Msearch agency, said Nigeria former Vice President, Atiku tions are a key downside risk. could risk weak investor and Abubakar, the presidential It said although its outlook consumer confidence over flag bearer of the opposition for African banks is stable, political uncertainty and party and 57 other aspirants. risks are tilted to the down- social unrest. The country is also expected side even though external The global rating agency, to conduct elections for gov- shocks such as falling com- in its 2019 outlook on Af- ernors as well as state and modity prices, drought, or rica - banks and sovereigns, federal lawmakers. an escalation of global trade identified Nigeria alongside Growth in Africa’s largest wars, could hurt African cor- South Africa and Tanzania as economy stood at 1.81 per- porates and their ability to one of the African countries cent year-on-year in the third repay debt. bedevilled with such “an quarter of 2018, according to According to Moody’s out- ever-present” challenge. data by the National Bureau look, rising US interest rates As a result, Moody’s said of Statistics (NBS) and has leading to capital outflows Nigeria’s growth will be more been projected to hit 1.9 per- across emerging markets, subdued at 2.3 percent as cent in 2018 and 2.3 percent in conjunction with rising “more stable oil prices will in 2019 by the International government debt and cur- rency depreciation, could significantly harm banks’ Best performing listed companies and loan quality and access to foreign currency. the worst performers Higher oil prices and partial L-R: Ajuma Ademu, Modern Trade Manager, Indomie Relish; Ginny Tewatia, Brand Manager, Indomie Relish; Ado liberalisation of the foreign- Adams, participant in the Indomie Relish game, and Mary Talabi, Indomie Relish Sales Team Manager, Abuja, exchange market have eased during the official launch of Indomie Relish at the Jabi Lake Mall, Abuja. pressures on “unhedged” borrowers and normalized foreign-currency liquidity, according to the credit agency “Capital buffers are strong for the bigger banks, but weaker for smaller banks,” Moody’s forecasted adding that it expects most rated banks to maintain stable prof- itability, build up their capital buffers and retain ample local currency funding in 2019. “Asset risks will remain high, while we also expect some renewed tightening of foreign currency liquid- ity; banks are, however, in a better position to withstand pressures following efforts to reduce foreign-currency L-R: Funbi Emiola, RnB/soul musician; Chinwe Greg-Egu, brand manager, International Brands, and Source: Meristem lending.” Emmanuel Oriakhi, marketing director, NB Plc., at the Uncage Series in Lagos. 20 BUSINESS DAY C002D5556 Wednesday 02 January 2019 Wednesday 02 January 2019 www.businessday.ng www.facebook.com/businessdayng @businessDayNG @Businessdayng BUSINESS DAY 21 In Association with

Sterling Bank to extend credit facilities New Year begins with uncertainties to winners of empowerment scheme terling Bank Plc has has decided to sponsor the in banking, financial sector assured its customers second edition, adding that who participated and they will also extend credit Stories by Hope Moses-Ashike emerged winners in facilities to the winners of theS first edition of its youth the first edition and that such empowerment scheme. loans will be fast track within esterday, Tuesday This is coming as the two weeks. marked the begin- ning of another bank has unveiled the cham- He said, “Bright Jaja, the year for the banks pions of the recently con- CEO and founder of iCreate and other finan- cluded iCreate Skills Festival Skills Festival gives him hope cialY institutions with outlook and about ten of them would for the future of this coun- and expectations tied to the be representing Nigeria in try,” adding that, “there is an Nigerian political environ- Russia in 2019. on-going conversation about ment. The winners are Otareh which generation of Nigeri- The key event that will Alvin who won in the cook- ans will salvage this country. shape the Nigerian political ing category, Nejo Tolulope I have started to worry if my environment this year is the (graphics), Silas Adedoyin generation will be able to do general elections scheduled (web design), Patrick Obafe- it, which is debatable, it may to commence in February. mi (app development), or may not. But it is clear to “Should the political out- Barnabas Kudi (robotics), me that your generation will look go smoothly and the Afolabi Caleb Kayode (art), do it. chases worldwide, increased struggled with significant because of low customer parties accept the electoral Malissa Onojo (tailoring), “I have no doubt in my outcomes, there will be sta- by more than 20 percent in downward pressures due to confidence and increases in the first half of 2018, before the decline in economic con- NPLs. Yusuf Abdullahi (barbing), mind and I only need to meet bility in the economy, we will Kingsley Ihejirika (hair dress- one young man (Bright) and witness the return of foreign hitting a four-year high of fidence, mostly as a result of The CBN had said it would $86.07 a barrel in early Oc- pre-election activities. in due course take action that ing), Faiza Usman Adamu the belief he has in the future portfolio investors and the (make up), Joshua Olalekan of the country and the energy capital market recovery”, said tober. It traded at $53.23 per “The headwinds arewould directly bring bank- (carpentry), Oladoja Peter he brought to it as well as the Johnson Chukwu, managing barrel as at Monday. likely to continue in the ing services to rural com- director/CEO, Cowry Asset “We could see increases first quarter of 2019 with a munities through licensing (tilling), Kumshuan Talgang sacrifices he has made. I have Management limited. in default rates and the cur- turnaround expected for the of a national Micro Finance (plumbing) and Prince Isitua watched the project over the Chukwu told Business- rency should be subjected to rest of the year as the level Bank to be located in all lo- (bricklaying). last couple of months and I Day by phone that market re- devaluation”, he said adding of uncertainty reduces and cal governments in Nigeria, The bank had partnered have started to see some of covery could enhance further that if there is a policy shift, economic policy directions through which credit can be with iCreate Skill Fest 2018 to the winners come out and if there is a policy shift either the sector becomes more ro- become clearer”, Oyedele channeled to the country’s host the premier youth em- every single one of you have from a new government or bust. told BusinessDay. rural communities. “We will powerment festival in Abuja convinced me completely the existing one ruling again. Taiwo Oyedele, head of For the insurance sector, continue to explore ways in with the aim of transforming that generation that will sal- For the banking indus- tax and regulatory services, Chukwu said capitalisation partnering with the fiscal au- skill acquisition across the vage Nigeria is here,” Abuba- try, Chukwu said if oil prices PWC, said the banking sec- would be the major focus, thorities, on how we can best continent. kar said. should drop further, the tor faced many challenges in while the pension fund would provide farmers and SMES Speaking at a press con- The CEO who also com- sector may see an uptick in 2018 but managed to end the continue to grow; largely tied with the support they need ference in Lagos, Suleiman mended the winners, re- the Non-Performing Loans year without any major mis- to how the economy grows. to expand their operations”, Abubakar, Chief Executive marked that, “I don’t think haps, thanks in part to some He said the microfinance Godwin Emefiele, governor (NPLs) of banks. Officer of Sterling Bank, said we prepared you for this and interventions by the CBN. bank sub-sector would con- of CBN said in November at Brent Crude, the major I don’t think we gave you a The financial market tinue to be under pressure the bankers dinner. following the huge success of benchmark price for oil pur- the premier edition the bank ladder to climb up.” Heritage Bank growing business base with Ikoyi Club 38 s part of efforts to Bank, Abiodun Agbaje, re- across generations. Oduah, who also doubles Saturday of the month. M. Walsh emerged the grow its business marked that while the lender Also speaking, Joe Oduah, as CEO of 3M, a safety equip- He said only amateur overall net winner of the Oc- base, Heritage Bank could not do everything at the Chief Executive Officer of ment stockist and service cen- members who registered tober mug competition with Plc, has partnered same time, it was specifically Resource Churchill, one of tre and who has been playing when the portal is opened are 81- (12)=69 and was awarded withA Ikoyi Club 38 to host the looking at some events that the players who contested in in the tournament for about eligible to play and it is based a mug and also be entitled to monthly mugs competition of are educative and have high the competition, described ten years and won on several on handicaps, which is the rat- park his car in a special slot in the golf section. calibre of people to deal with, the mug competition as a occasions, said it is an inter- ing level of the players. the car park of the park for this Speaking at the event, Ifie adding that as a bank, they monthly tournament played esting tournament that brings He said handicap starts month. Sekibo managing director/ need to grow their business by members only, adding that all the amateurs players to- from one to 28 for men and In the division one, Walsh CEO of Heritage Bank, said base with the kind of people the winners are usually pre- gether to compete against one there are two categories. Cat- won with 81- (12)= 69, fol- the bank partnered the club that are at the event, who are sented with a gift, which is a another. egory one is from handicap lowed by C.E.O. Ekeocha with because, “we need to pitch high-calibre business people. mug. In his contribution, Fa- one to 13 while category two is 79 - (08)=71 as first runner- our tent where it matters, He said the event was He said it is a medal play, bian Kenni, manager of the from handicap 14 to 28. up, while in the division two, need to be visible and to put one where a lot of business which meant that the player Golf Section of the Ikoyi Club Each category produces Macaulay Magnus came first our footprint in the sands of people gathered together with the lowest net emerged 38, said the monthly mug two winners, that is, a win- with 91- (21)= 70 and. K. Ade- time.” in one place at the same the overall winner, which competition is a tradition in ner and a runner-up, making ribigbe was first runner-up Sekibo, who was repre- time, stressing that Heritage entitled him to a mug and a golf worldwide and is usually a total of four winners every with 88- (15)=73. The other sented by the Regional Head, Bank’s purpose is to create, special parking slot in the car done every month, either on month and each of them are winners were only awarded Lagos Island 2 of Heritage preserve and transfer wealth park of the club. the first Saturday or the last presented with mugs. with mugs respectively. 22 BUSINESS DAY C002D5556 Wednesday 02 January 2019

Shipping Logistics Maritime e-Commerce Dock labour: How NIMASA drives sustainable port operation Stories by ers union and stevedoring leaders of the Union will Uzoamaka Anagor-Ewuzie companies. continue to ensure the sus- NIMASA is statutorily tenance of peace and har- empowered under section mony in the maritime sector efore the cargo 27(1) (b) of NIMASA Act in the interest of the sector handling aspect 2007 to facilitate the NJIC and the Nigeria economy as of port business meetings, circulate signed a whole. The agreement, he was ceded to agreements and ensure said, means that the life of private termi- strict compliance on imple- dockworkers in the nation’s nalB operators in 2006, port mentation. While NJIC is seaport has come to stay. operations were constantly the body responsible for “Twelve years after the interrupted by industry un- negotiating and reviewing port was concessioned to rest executed by the then of minimum standards for private operators, the sea- members and leadership dock labour. port terminal operators of the Maritime Workers It was constituted in 2008 have substantially increased Union of Nigeria (MWUN). following the need to estab- the wages earned by dock- Most of the unrests that lish minimum standards for workers. We now enjoy took place at that time were the dockworkers after the better working conditions, L-R: Bolaji Sunmola, president of the National Association of Stevedoring Companies; Gambo fuelled by bitterness as a re- ports were concessioned Ahmed, chairman, National Joint Industrial Council (NJIC) and executive director, Maritime compared to what obtained sult of general poor welfare in 2006. Labour and Cabotage Services, NIMASA; Adewale Adeyanju, president general, Maritime in the pre-concession era. package given to dockwork- As the Federal Govern- Workers Union of Nigeria (MWUN), and Ibrahim Jibril, director, Maritime Labour Services Adeyanju, who lauded ers including poor salary, ment agency and a regulator Department of NIMASA, during the signing ceremony of the Collective Bargaining Agreement terminal operators for in- for dock labour by the NJIC in Lagos. poor retirement benefits as saddled with responsibility creasing the wages of dock- well as lack of guaranteed of overseeing the wellbeing workers in spite of the low pension scheme. of dockworkers for healthy that dockworkers will now Haastrup, chairman of the maritime sector. volume of import in the For instance, in 2006, port operations, NIMASA have retirement benefits. STOAN stated that without “We must all work to- country, listed issues of poor an average dockworker facilitated the establish- They would be gainfully dockworkers, there will be gether to ensure that the state of the port access road earned between N10, 000 ment of the National Joint employed and their retire- no ports, because the work- interest of dockworkers are as one of the operational to N20,000 per month, but Industrial Council (NJIC) ment benefits, pension and ers play a major role in the protected. It is a thing of joy challenges facing business today, research has shown for dockworkers in Nigeria, gratuity would be paid by development and growth of to see that our dockworkers of terminal operators. that the payroll of Nigerian as well as the recent signing terminal operators. the economy of the ports. are doing well and getting “The roads to the sea- dockworkers has improved of a Collective Bargaining Speaking at the signing “STOAN discovers that compensated. We com- ports have contributed to tremendously as many now Agreement (CBA), aimed ceremony in Lagos recently, to have smooth operations mend their leaders for the most of the problems that earn between N100, 000 and at improving the welfare of Gambo Ahmed, chairman in the port means to main- relationship with terminal our members are facing N150, 000 per month. dockworkers in line with of the NJIC, who doubles as tain good relationship with operators,” she said. today. Because of the bad Today, stoppage of ship international best practices. the executive director, Mari- dockworkers that discharg- She however assured roads, some of the vessels operation has become a The CBA provides for in- time Labour and Cabotage es the vessels – they are that terminal operators will that are supposed to come thing of the pass and dock- crease in wages, allowances, Services of NIMASA, said critical to our operations. It ensure that dockworkers to the port are sometimes workers, who in the past emoluments and benefits, that dockworkers are the is important to us that they are well compensated for diverted to neighbouring rarely know their employers, including payment of re- integral part of the maritime are well taken care of. We services rendered. countries,” he decried. now meet regularly with the dundancy and retirement business, hence the need to had the first requisition in On his part, Adewale Ad- Ibrahim Jibril, director, leadership of the Seaport benefits by terminal opera- prioritise their welfare. 2008 and every two years, eyanju, president general of Maritime Labour Servic- Terminal Operators Asso- tors to aged dockworkers. Ahmed, who represent- the stakeholders sit down the MWUN, said that with es of NIMASA, expressed ciation of Nigeria (STOAN). It also covers payment of ed the director general, to deliberate on how to the supervision of NIMASA that the agency believes The above listed devel- specified allowances to de- Dakuku Peterside, urged improve the wellbeing of through the NJIC initiative; that all parties will ensure opments were made pos- ceased dockworker’s next of operators to put the welfare dockworkers,” she said. the industry is witnessing full implementation of the sible by the unrelenting kin and pension contribu- of the dockworkers’ into According to her, the a new dawn even as he agreement. This, he said, efforts of the Nigerian Mari- tion scheme for dockwork- proper perspective in order initiative has brought about pleaded with all parties to will help the Ease of Doing time Administration and ers among others. to continue having healthy understanding among endeavour to fulfill their Business initiative of the Safety Agency (NIMASA) in BusinessDay under- maritime sector and ensure stakeholders in the ports obligations as contained in Federal Government as well partnership with terminal stands that the beauty robust economy. and also given room for the CBA agreement. as improved turnaround operators, maritime work- of this new agreement is In her view, Vicky peace and orderliness in the He also pledged that the time in port business. NIWA installs N2.5bn cargo equipment in Baro River Port he National In- Federal Executive Coun- that all the equipment will access road to Baro Port in Amendment Act. Management and Special land Waterways cil (FEC) to Messrs CGGC be ready in another one order to enable the contrac- The highlights of the event Duties); Bawa Zakari, for- Authority (NIWA) Global Projects Ltd, was week or two. He commend- tors move their equipment was the award of the best mer general manager, Audit said that it has completed but abandoned ed the contractors for a job to site and that has been Area office which went to the and White, who until his re- Tcompleted the installa- before the current manage- well done and the commu- achieved. Lagos Area office and best tirement was deputy general tion of new cargo handling ment resuscitated it for use. nity for being a good host, Meanwhile, Mamora staff of the year 2018 that was manager (Marine). equipment in Baro river Adeleke Olorunnimbe even as he encouraged them while delivering a speech given to Jethro John Jalgi, also In his response, on be- port, Niger State. Mamora, managing direc- to ensure the safety and se- at the NIWA 2018 end of from Lagos Area Office. half of the retired general Baro River Port, which tor of NIWA, said at the curity of the River Port. year party, which took place Also, three senior retired managers, Ojimba thanked is the flagship port in the weekend, that the river port, “The equipment at the at the NIWA headquarters managers and one deputy the organisers for consider- North, will be commissioned which is ready for commis- Port is first class and will promised to improve staff were all honoured by the ing them worthy of being in no distant time by Presi- sioning, would soon start bring glory not only to the Welfare. He said that the management and staff of honoured while Jethro John dent Muhammadu Buhari. operation. community and the state NIWA amendment Act is the Authority. They include Jalgi expressed gratitude to The contract for the River Mamora, who expressed but the entire nation. still with the National As- Festus Ojimba, former gen- the management and staff port, which was award- satisfaction with the work Recall that Mamora di- sembly and all efforts are eral manager Engineering of NIWA for recommending ed in 2011/12 at a cost of progress, received assur- rected the authority’s en- being made to ensure the Department; Elias Amago, him as the best staff of the N2,563,499,248.00 by the ance from the contractor gineers to rehabilitate the successful passage of the general manager (Project year 2018. Wednesday 02 January 2019 www.businessday.ng https://www.facebook.com/businessdayng @Businessdayng @Businessdayng BUSINESS DAY 23 Tax Issues VAT revenues still largest source of consumption tax revenues in OECD …as tax mix shifts further

IHEANYI NWACHUKWU cial Feature highlights ongoing convergence across the OECD to- ward higher tax levels, with greater alue Added Tax (VAT) reliance on corporate income tax revenues are stabilising (CIT), VAT and social security con- at a high level in Organi- tributions, and a slight downward sation for Economic shift in personal income taxes. Co-operation and De- The latest data confirms this velopment (OECD) countries. V convergence, with CIT, as a share Standard VAT rates in the of total taxes, now reaching its OECD reached a record level of highest levels since the global 19.2 percent on average in 2015 economic and financial crisis, and have remained stable since. increasing on average from 8.8per- Ten OECD countries now have a cent in 2015 to 9.0% in 2016. standard VAT rate above 22per- CIT revenues are still lower than cent, against only four in 2008. their peak in 2007 (11.1percent Most OECD countries have im- of total revenues), but are now plemented or announced meas- higher than at any point since ures to for the effective collection 2009 (8.7percent). Between 2015 of the VAT on the ever-rising and 2016, personal income tax volume of online sales to private revenues decreased from 24.1per- consumers by offshore vendors, cent to 23.8percent of total tax in line with the international VAT/ revenues. Goods and Services Tax (GST) The increase in the average guidelines and the BEPS Action els was seen in 19 of the 34 OECD 20.2percent of total tax revenue, plementing or considering base share of CIT was driven by in- 1 Report. countries that provided prelimi- on average in 2016. broadening measures to protect creases in revenues from CIT in 23 Tax revenues in advanced nary data for 2017, while tax-to- After experiencing an upward or increase VAT revenues. This countries in 2016, while the fall in economies have continued to GDP levels fell in the remaining trend since the economic crisis, includes increasing some reduced personal income tax was seen in increase, with taxes on compa- 15 countries. standard VAT rates stabilised at VAT rates, limiting or narrowing 20 countries. nies and personal consumption Tax-to-GDP levels are now 19.3percent on average in 2014 their scope and curbing VAT ex- In 2017, the largest increases representing an increasing share higher than their pre-crisis levels and have remained at this level emptions. A growing number of in the overall tax-to-GDP ratio of total tax revenues, according to in 21 countries, and all but eight since. Ten countries now have a tax authorities have implemented relative to 2016 were seen in Israel new OECD research. (Canada, Estonia, Hungary, Ire- standard VAT rate above 22per- or are considering implementa- (1.4 percentage points, due to tax The 2018 edition of the OECD’s land, Lithuania, Norway, Slovenia cent, against only four in 2008. tion of measures to tackle the reforms which increased revenues annual Revenue Statistics publica- and Sweden) have experienced an Two countries (Greece and Lux- challenges of collecting VAT on from taxes on income) and in the tion shows that the OECD average increase in their tax-to-GDP ratio embourg) increased their stand- the ever-rising volume of digital United States (1.3 percentage tax-to-GDP ratio rose slightly in since 2009. ard VAT rate between January sales, including sales by offshore points; due to the one-off deemed 2017, to 34.2percent, compared Consumption Tax Trends 2018 2015 and January 2018, while two vendors, in line with new OECD repatriation tax on foreign earn- to 34percent in 2016. The OECD highlights that value-added tax countries (Iceland and Israel) standards. ings, which increased revenues average is now higher than at any (VAT) revenues continue to be the reduced their standard VAT rate Revenue statistics also contains from property taxes). Nineteen previous point, including its ear- largest source of consumption tax over this period. a Special Feature that measures countries had increases but no lier peaks of 33.8percent in 2000 revenues in the OECD, and have With less scope to raise already the convergence of tax levels and other country had an increase of and 33.6percent in 2007. now reached an all-time high of relatively high standard VAT rates, tax structures in OECD countries more than one percentage point. An increase in tax-to-GDP lev- 6.8percent of GDP, representing countries are increasingly im- between 1995 and 2016. The Spe- Ease of Doing Business: Impact of multiplicity of tax audits (2)

ADEDOLAPO ADEBAYO; senior tax for providing tax refund to to one centralized authority. tax authority have to comply also alleviate the challenges adviser in KPMG Nigeria taxpayers who qualify for such. For ease of administration, with the provisions of the tax faced by tax authorities. Fur- The tax refund is verified by the central agency could have laws. There is no compliance thermore, the general popu- means of the audit conducted. teams in different regions who when taxes are imposed arbi- lace must be continuously he department also Therefore, there is no need for are able to carry out tax audits trarily, administered without educated on tax compliance handles tax audits to conduct a separate audit to on businesses in such regions. following set rules or stand- and tax laws must be regularly and reviews, pay- establish the accuracy of the The central agency should also ards and people are subject to reviewed and modified for ments of tax refunds tax refunds requested by the ensure that the audit pro- penal sanctions without due ease and minimal enforcement Twhile also enforcing the taxpayer. cess and methodologies are process. Absolute compliance costs. national minimum wage, For the Nigeria tax admin- consistently applied across the would mean that the taxpayer, The issue of multiplicity of administering anti-money istration environment to be all the regions. There should tax authority and their advi- tax audits continues to be a laundering registrations for more favorable for both foreign be no need for more than one sors would do the right thing challenge to Nigerian busi- Money Service Businesses and and local investments, there team to audit the records of a at the right time. A tax system nesses and by extension, the collection and publication of needs to be a simplification of company for either a tax re- should be simple in order to Nigerian economy. Conse- the trade-in-goods statistics. the tax system, better clarity fund or a general audit to make aid compliance. Where the tax quently, a quick resolution is The department is a one-stop about taxes that are payable it convenient for the taxpayer. system is unnecessarily com- required to ensure that this shop for taxes in the UK and and to whom it is due. Cen- This simplifies the process of plex, it increases the cost of head of the hydra is cut off. It this has its huge advantages. tralization of tax administra- compliance while also provid- administration for government is in the interest of not just the As a result, all forms of tax tion is also pivotal to achieving ing assurance on the tax to and cost of compliance for the businesses, but also that of audits are carried out by the progress in the area of tax ad- be paid, when it is to be paid, taxpayers. Government and the Nigerian same office and this removes ministration. Rather than have whom it is to be paid to and An increase in tax incen- economy, that businesses are the unnecessary burden of different agencies/ committees whom to discuss tax planning tives will encourage voluntary able to operate more efficiently having more than one au- drill companies and busi- positions with. compliance. Continuous and contribute their value to thority audit the records of nesses on their tax records and It should be recognized that, improvement in logistics for the economy without the ad- a business. In addition, the compliance, it is more effec- for adequate tax compliance to better record keeping, and bet- ditional burden of multiplicity HMRC has a standard process tive for companies to answer be achieved, both taxpayer and ter conditions of service would of tax audits. 24 BUSINESS DAY www.businessday.ng www.facebook.com/businessdayng @businessDayNG @Businessdayng Wednesday 02 January 2019

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Wapic Insurance boosts travel protection for international travellers nderwriting firm, Wapic payment of medicals bills or ac- Insurance Plc has un- cident sustained while travelling veiled an innovative or even cost of repatriation in a travel insurance prod- worst case scenario. Uuct specifically designed to cover “As we launch the Travel In- individuals against unforeseen surance product, Wapic plans incidents during international to invest in sensitizing our cus- travels. tomers and prospects about the Adeyinka Adekoya, chief ex- benefits of buying travel insur- ecutive officer of firm said the ance through our various digital product was unveiled after an channels. The idea is to increase extensive period of detailed review product awareness and patron- of consumer- detriment issues in age and also to elicit interest and travel insurance, stressing that the ongoing debate in the public product was released to ensure domain on the relevance and im- better consumer protection dur- portance of Travel Insurance for L-R: Humphrey Ozegbe, head, Human Resources; Tony Saiki, head, Oil and Gas; Daniel Braei, Ag managing director/CEO; ing travel. the protection of life and personal Joyce Ojemudia, general manager, marketing; and Moses Omoregbe, company secretary, all of Linkage Assurance Plc at the She posited that the firm pro- property,” she said. Company’s 2018 End of the Year Dinner and Awards Ceremony held in Lagos duced the product after thorough She said the firm will ensure investigation and engagement the engagement with the product with key stakeholders, adding is hassle-free, adding that sales of that the company is proud that the product will be done directly Allianz international ratings reaffirm the product addresses the is- to consumers through the firm’s sue of accessibility and that the digital platform and other touch product is pocket friendly and points, as well as through partner- capacity for specialty insurance pricing is based on duration of ship with leading digital channels, trip and destination, thereby ac- travel agencies, airlines, and other Stories by cording access to a varied range agencies within the travel value Modestus Anaesoronye of consumers. chain. She noted that the company’s Bode Ojeniyi, executive direc- lobal insurance giant, solid reputation for delivering top- tor of the firm said the goal of the Allianz, have reaffirmed notch insurance services, coupled company is to lead and transform capacity to bear special with institutional knowledge, customers experience, adding risks across continents quality and customer services, that the firm will leverage tech- following the release of makes the product an ideal travel nology and other superior tech- theirG 2018 international ratings. Best insurance option of choice. nical competencies to develop in class insurer financial strength Adekoya noted that the prod- products to enhance its value ratings - AA (‘Very Strong’) from uct covers compensation for in- proposition. Standard & Poor’s, A+ (‘Superior’) flight loss of checked-in luggage; “Wapic has an uncompro- from A.M. Best - reassure clients of compensation for delay of flight; mising commitment to our cus- financial security payment of medical assistance tomers’ peace of mind. This is “Currently we provide engineer- for illness or accident sustained evidence in our commitment to ing insurance for clients all over the while traveling; transport or re- continually improve the value we world, supporting them not only patriation for medical reasons for bring yo life ur customers through with flexible policy coverage, but the insured and/or family mem- offering inventive, customizable also with the backing of our AA S&P bers traveling with the insured; products that make travel safe and A+ A.M.Best credit ratings – en- and territories worldwide. An expe- insurance to Assistance services accidental death cover, transport and protect travel investments,” suring confidence for the long term”, rienced team of around 4,700 expert to Credit insurance and Global or repatriation of mortal remains he said. explains Chris van Gend, global staff, from risk consultants to claims business insurance. The Allianz of insured and emergency return He maintained that as at to- head of Engineering at Allianz. specialists make this possible Group manages over 650 billion to home following the death of a day, the travel insurance product He adds: “Our risk consulting, As a leading global insurance euros on behalf of its insurance close member. which features holistic cover- claims and underwriting teams are program provider, Allianz man- customers and an additional 1.4 “The ability to access pocket age for travelers to help protect among the most technically accom- ages 2500+ lead programs with trillion euros of third-party assets. friendly and sound travel insur- themselves, their belongings and plished of any major insurer and can approximately 19,000 local policies Allianz holds the leading position ance is critical for travelers to fully travel investments, is available for lead the largest engineering risks attached. for insurers in the Dow Jones enjoy their international trips with purchase via www.wapic.com. and construction projects across The Allianz Group -head- Sustainability Index and in 2017, peace of mind. Before we decided Bankole Bernard, National the globe, giving us a reputation quartered in Munich, Germany over 140,000 employees in more to launch this product, we had President, National Association of earned through years of practical - is one of the world’s leading than 70 countries achieved total observed over time very little or Nigeria Travel Agencies, said the experience. insurers and asset managers revenue of 126 billion euros and no awareness of travel insurance association will continue to part- Allianz’ Global Corporate and with more than 88 million retail an operating profit of 11 billion and its benefits and thus travelers ner Wapic and ensure customers Specialty (AGCS) boasts a network and corporate customers. Allianz euros for the Allianz Group. would be at a disadvantage if they get the best from the product. of offices in more than 70 countries customers benefit from a broad In July 2018, Nigerian insurer, ever had an emergency during He noted that the association plus network partners in other lo- range of personal and corpo- Ensure Insurance, was acquired by their trip. From simple issues such has over the years, built a robust cations that enables them service rate insurance services, ranging the Allianz Group and rebranded to as inflight or checked-in baggage relationship with the underwrit- clients in more than 210 countries from Property, Life and Health Allianz Nigeria in December 2018. loss or more complex issues such ing firm. 2015 Wednesday 02 January 2019 www.businessday.ng www.facebook.com/businessdayng @businessDayNG @Businessdayng BUSINESS DAY 25 Pension Today In Association with Contributors concerns and the answers wareness and con- fund monthly payment that tinuous education would not be less than 50 on the benefit percent of his monthly pay as and workings of at the date of his retirement. the country’s con- However, an employer may Atributory Pension Scheme choose to pay any other sev- (CPS) would go a long way in erance benefits (by whatever sustaining the achievements name called) over and above of the scheme and building the retirement benefits pay- more confidence for higher able to the employee subject penetration. to the terms and conditions Therefore, providing ex- of his employment. planations and answers to Should gratuity be includ- questions and concerns of ed in the actuarial valuation contributors and the larger for purposes of determining public is an issue that must be accrued pension rights to taken seriously by operators be transferred from the old and stakeholders. scheme into the RSA? Here, this edition will look If at the commencement at some of the questions raised of the Pension Reform Act by contributors and members 2004, the employee is entitled of the public and what opera- to gratuity (if he were to retire tors’ responses are: on that date), the gratuity shall How can I be sure that my be computed and included in contributions are safe? the actuarial valuation as part All those managing or of the accrued pension rights keeping custody of pension of such employee. funds and assets will be li- Are pension contribu- censed and continually regu- tions taxes free? lated and supervised by the Contributions to the new National Pension Commis- L-R: Onyii Wamah, head of Service, Abia State and Paddy Ezeala, regional manager, South East, Premium Pension Limited after a meeting on pension scheme are tax free. sion. the Contributory Pension Scheme recently in Umuahia Will tax be paid on the What is the guarantee profit made from trading with that the pension funds under has established the National form Act 2004 as amended which comprises of Repre- the employee moves on the the money in the retirement the CPS will be well managed Pension Commission and in 2014 a person can volun- sentatives of the Government, work for another employer savings account (RSA) and not diverted for other charged it with the responsibil- tarily retire or be compul- Nigeria Labour Congress, The for another year, his pension Tax will be paid on the purposes? ity of regulating and supervis- sorily retired before the age Nigerian Union of Pensioners contribution will be paid profit made from trading with The functions of the Pen- ing new pension scheme. of 50 years on the ground of and The Nigerian Employers by the second employer for the money in the Retirement sion Fund Administrator (PFA) Can the government take medical advice, permanent Consultative Association. another 1 year and it goes on Savings Account. and custodian are clearly spelt or use the money in my RSA disability or due to particu- Does the pension reform and on like that. How will I benefit from out in the Pension Reform Act for any purpose? lar terms and conditions of act reflect the application of When will I have access to the new pension scheme? 2014. The Act provides ad- The Government can- employment. If any person the principles of transpar- money in my RSA? The new pension scheme equate safeguards against the not temper with the pension retires under any of the fore- ency and accountability? Access to the RSA will only will ensure that you receive misuse of the pension funds funds in you RSA, because going circumstances, he is Yes. The new pension be allowed upon retirement. If your pension after retirement and assets by any operator. the Government cannot have entitled to withdraw from scheme entrenches the prin- an employee retires at the age without delay. What happens if a PFA access to the account. Besides, his RSA even though he was ciples of transparency and of 50 years or more he/she can How will the new pension fails or is liquidated? the Government is primarily under the age of 50 at such accountability as reflected in have immediate access to the scheme help the economy? The pension funds and as- concerned with ensuring the retirement; provided that, in the reporting requirement of RSA. similarly, if an employee There will be a huge pool sets in the Retirement Savings safety of the money in your the case of retirement due to the PFAs and PFCs to both the retires before the age of 50 of long term funds available Account (RSA) are kept by the RSA through the enforcement particular terms and condi- contributor and the National years due to mental or physical for investments, which will PFC and as such the liquida- of strict rules and regulations. tions of employment, the Pension Commission. An em- incapacity, he or she can have lead to national economic tion of the PFA will not affect Will inflation and devalu- contributor does not secure ployee has the right to choose immediate access to his/her development. the funds and assets. Besides, ation of the naira not erode another employment after who manages his RSA and the RSA. Whereas an employee How can I know what is every PFA is expected under the value of the pension con- four months from the last right to receive statements of who retires under the age of happening with my money? the Pension Reform Act 2014 tributions? employment. his account on quarterly basis 50 years in accordance with Pension Fund Administra- to maintain a statutory reserve It is the duty of the PFAs to What is the minimum of with details of contributions the terms and conditions of tors (PFAs) will issue regular funds as contingency fund to administer the contributions pension guaranteed under made and returns on invest- employment will not access statements of accounts and meet claims for which it may and invest in such a way that the new scheme? ments. the RSA until after four months profit from investments to the be liable as may be determined will ensure safe and reason- The minimum pension What is the minimum of such retirement if he/she employees. by National Pension Com- able returns on investment. guarantee shall be determined period required by an em- does not secure another em- Can I withdraw any por- mission. The reserve fund created by from time to time by the Na- ployee to qualify for pen- ployment. tion of the amount in my RSA Who can I complain to if the PFAs under the Act would tional Pension Commission. sion under the new pension Will gratuity be paid un- before retirement? I have a problem with a PFA? compensate for any erosion of Is there adequate repre- scheme? der the new scheme? Withdrawals from the RSA The Pension Act 2014 al- the value of the contributions. sentation of all stakeholders There is no qualifying Upon retirement, an can only be made upon re- lows any employee to com- How compulsory or vol- on the board of the commis- period for pension. If an em- employee can withdraw tirement. However, where an plain about any PFA to the Na- untary is retirement espe- sion, or is it dominated by ployee works for an employer a lump sum (by whatever employee makes additional tional Pension Commission. cially in the armed forces to government appointees? for one month, his pension name called) from the bal- of voluntary lump sum contri- What is the role of the be handled under the new There is adequate repre- contribution will be paid by ance standing to the credit butions into the RSA, he can government in the new pen- scheme, if this happens be- sentation of relevant stake- the employer into the em- of his/her RSA provided the withdraw such money before sion scheme? fore the age of 50 years? holders in the board of the Na- ployee’s retirement savings balance after the withdrawal retirement or attainment of the The federal Government Under the Pension Re- tional Pension Commission, account for that month. If could provide an annuity or age of 50 years.

This section is created to increase awarness and deepen knowledge about RC634453 the contributory Diamond Pension Fund Custodian Limited pension scheme. 1A, Tiamiyu Savage Street, Victoria Island, Lagos State. If you have enquiries Tel: 01-4613753, 2713680, 2713954 or contributions, Fax: 01-2713955 send to this e-mail: Email: [email protected] [email protected] Website: www.diamondpfc.com 26 BUSINESS DAY www.businessday.ng www.facebook.com/businessdayng @businessDayNG @Businessdayng Wednesday 02 January 2019

E-mail: [email protected] Population is an advantage, but purchasing power of the consumer is critical to purchase of insurance - Kari Mohammed Kari, commissioner for Insurance in a recent interview with the communications team of The Nigerian Council of Registered Insurance Brokers shred his thoughts on recent developments in the insurance industry, and where the market is going. Modestus Anaesoronye reports. Excerpt:

Before the last government also, awareness of the benefits as the Commissioner to see induced recapitalization ex- of insurance. I am sure you are Insurance Sector as an Industry ercise, Insurance Industry aware that the insurance indus- Contributing immensely to the was being referred to as “poor try has commenced campaign growth of Nigeria economy, cousin” of Banking Sector, to make the consumers aware what is the Commission doing What is the situation now? of the benefits of Insurance. We to see this dream come true? hat terminology did believe that when this is done, it Those are the things we have not start in 2005, the will improve on the penetration, been doing recently. We have first ambitious re- the penetration does not only identified that, to improve the structuring of finan- depend on the population. How- penetration of insurance, you cial sector started in ever, there still a huge potential have to have a change of percep- earlyT 1990’s when IMF directed because of that population size tion of the consumers and all the restructuring of financial and that is why the industry now stakeholders. So working with sector, and government ap- is realizing they need to do more the market, we have agreed to do pointed Technical Committee retail, personal line of insurance the Marketing Awareness cam- on Privatization and Com- against the corporate, which has paign which had been started. mercialization (TCPC), and almost reach its limits, because We also identified that we need that committee dictated that you cannot go beyond what ex- to open more distribution chan- all financial operators, bank ists, but individual classes are nels, because at the moment, we and insurance industry were yet to be tapped into, and when use the basic which includes the asked to increase their capital, this is done, then the penetra- Brokers Channel and the Agency the banks did, but insurance tion will increase. Channels which is not seriously industry refused. They even Some Industry stakehold- explored. So we are introducing took government to court that ers believed that the industry many other channels through was when it started. When the is over regulated, what is your which business can come like bank recapitalized, the banks take on this? baccassurance, like NGOs, like have enough capital to even No, I don’t think so, go and Micro Insurance agents, and buy out insurance investment, ask any operator. They used to we are also open up to classes so they are not actually poor say over regulated three years of financial inclusion like micro cousins, they are children of ago, but not anymore. Insurance insurance, agric index insurance, banks. And the recapitalization is a business that is licensed, and and takaful, these are all new exercise of 2005/2007 was sup- any business that is licensed will Mohammed Kari, Commissioner for Insurance initiatives that have oppened in pose to mitigate that wide gap, have to be supervised. Regulator the last twelve months. We be- unfortunately, at the end of it, it set out the Operating rules and quacks in insurance. There were is helping us a long way, we lieved there is already optimum did not achieve what it was set ensures everybody operates days when you have certifica- are trying to conclude on our saturation from what can come out to achieve because, there within it. For example, majority tions and documents of insur- portal now to ensure every through the Brokers, so we are were lot of compromises along of drivers on the Nigerian roads ance companies that are not business is registered through looking for any other source, we the way, insurance companies are not licensed drivers, they just licensed in circulation, not any that portal, so illegal business have identified those sources, were given wavers, and were take car and drive, from being more. You find people faking can easily be identified. As it is we have released guidelines, we allowed to continue in business thought privately, most of them genuine company certificates, now, the policeman on the road have released new improved even while capital verification don’t go to driving school, no genuine company’s documents; has the ability to check whether guidelines of the operation of was required of some of them. learners permit, but the day the so, they cannot consider those insurance policy is genuine by such classes of insurance, and I The banks with their excessive VIO comes on the road to check, as quacks, you can just consider just using some technological believe it will have some impacts. capital were able to take interest they will complain of their dis- them as criminals. And they are gadgets, so we are getting there. Insurance Industry lacks ac- in insurance businesses, even turbance, that is the perception not part of, because a quack is Technology is helping us and curate Data, any step towards took control of eleven insurance of any illegal operator, so even a professional who doesn’t do the market associations are also the direction of having accurate companies, until CBN came out the licensed companies, who his job properly. Those are not working together to ensure that data to work with? with policy that they should had been licensed by regula- professionals, they just come they fight against such activities. If insurance need data to concentrate on banking busi- tor, you want them to have free into the industry to fleece on It is believed that one of the work with, they have to create ness, some of them divested, hand to operate without rule, it the big names that operate, and major challenges of Insurance their data. They have to ensure real divestment, some did not doesn’t work like that, that can you find most of the big names Industry today is the issue of they collect their data beyond do proper divestment. But that be dangerous. being counterfeited more than Risk Pricing, what precisely is what is expected from federal of- notwithstanding, any business It is a known fact that huge the small name. Technology the Industry doing to tackle this fice of statistics. And the indus- providing service like insurance management expenses in the challenge headlong? try, you can agree with me, has is a public figure, because it is books of Insurers are respon- It is not a matter of believe, it gone a long way to doing that, the business of risk taking and sible for their low profitability, is factual. That is why we have they have a database which they we believe that with the policy what is NAICOM doing to tackle It is not a‘ matter of released minimum premium use for motor insurance which we are just coming out with of this? believe, it is factual. rate for certain classes of busi- they have extended to marine categorizing insurance busi- If I may answer the second ness that we feel it is not up to insurance also. Virtually, all ve- ness into the area where they part of your question is to allude That is why we have the companies to just charge hicles insured on third party, you can operate, that problem will to the fact that, the industry was released minimum anything, because there are can check on phone whether be solved. recapitalized in 2007 and the some expectations to pay some it is genuine or not. But we as It is believed that Nigeria following year there was finan- premium rate for liabilities. If you don’t charge regulator are developing a portal with over 180 million popula- cial meltdown internationally,, certain classes of right premium, you will not be where every class of business tion should have a very robust which affected the insurance able to pay, your liabilities will will be registered through that insurance industry, why is the stock, with other stocks. Agreed, business that we not be able to meet your expec- portal, so at a glance, any day, industry still backward when some have marginally bounced feel it is not up tations. So we have already dic- you can know how many poli- compared with other develop- back, but the control of manage- tated, which has always been in cies are issued for how much, ing nations? ment is the responsibility of the to the companies the law, but never enforced, the how many claims are being paid, It does not only depend on board of directors, not that of to just charge minimum on certain classes of how long did it take, you can population, it is more depend- regulator. business. It is not in the interest know all that analysis. And with ent on spending power, which How should the industry anything, because of the companies to continue the synergy we have been trying is power of consumers. That of address the issue of Quacks there are some charging this, because it always to create between the regulator

Nigeria is much lower to some activities? has effect at the end of the day and operators, that is going to be expectations to pay on their ability to pay claims. So, of those countries we keep Who is a quack? There is a ‘ very easy when it’s completed, comparing Nigeria with; level of different between what people some liabilities that has been taken care of to a data is going to be available and education and enlightenment assumed as quack in other large extent. without data, you cannot make of the insured is a factor, and profession and those who are Obviously, it is your desire good projections. Wednesday 02 January 2019 www.businessday.ng www.facebook.com/businessdayng @businessDayNG @Businessdayng BUSINESS DAY 27 FEATURE Why CBN named Access Bank ‘Most Sustainable Bank of the Year’

FRANK ELEANYA of which is the extended maternity leave which is a first in our industry. We also recently hosted players entral Bank of Nigeria in the industry to a session put (CBN), the country’s together by the NSBP to advance apex bank has for over conversation about equality in the a decade advocated for workplace. All these things and players in the industry several more are not just activities toC think beyond just the numbers for us, but our contribution towards and making shareholders happy ensuring a safer, more equal and but also the environment they work inclusive society,” Omobolanle in as well as the people/customers Victor-Laniyan concluded. they serve so as to commit resources But this is only one of the several towards initiatives that seek to better areas, the Bank has shone. There are these sets. several others which speak largely This vision informed the bank’s to why the apex decided to honour support and enforcement of the it with the Most Sustainable Bank Nigerian Sustainable Banking Prin- of the Year title for the second year. ciples put together by Access Bank Worthy of note is the Bank’s pledge and scores of other global industry to donate 1% of its annual profit players. Years after the declaration, before tax, towards several sustain- practitioners in the industry have ability initiatives including the save continued to show commitment to paper agenda with which it has the cause, albeit on different levels, continued the ambitious move to but one of the few that have stayed reduce printing and paper use. The the course is the Herbert Wigwe-led adoption of solar as a viable alterna- financial institution which explains tive to powering some of its branch- the Bank’s recent grand victory, es is another initiative many have winning in all five (5) categories at described as noble, especially giving the 2018 edition of the Sustainability the clamor for corporate bodies and awards organized by the CBN. individual to choose environment The awards which was set up friendly options when need arises. primarily to reward banks who With this initiative, the Bank now have showed most commitment has about four branches and 413 in certain key areas especially CSR ATM points powered solely by solar and Sustainability, adjudged Access Omobolanle Victor-Laniyan, head of Sustainability, Access Bank and its early shutdown policy, has Bank for the second time in a row, resulted in about 11.37% reduction winner in four (4) categories in- in the diesel consumption. mitment to the ethos of Sustain- is yielding desired outcome one of bridging the economic gap between cluding Sustainable Transaction of On the economic front, the Bank ability and responsible banking which is this recognition from the men and women. One of such is the the Year (Oil and Gas), Sustainable is doing very well, extending sup- serve as a leverage in achieving Central Bank,” she added. adherence for the Central Bank of Transaction of the Year (Power), port to families via its Maternal these objective. We understand Looking critically at the category Nigeria’s directive of ensuring more Sustainable Transaction of the Year Health Service Support Scheme how important it is for us to con- of women economic empower- than 30 percent of its directors are (Women Economic Empowerment) which seeks to advance the course sider our people and planet even as ment, one of the four in which the women. Another is the W Power and Most Sustainable Bank of the of a healthy nation. Also, the Beta we yearn to make profit. Our deep Bank was adjudged best, Access loan, a product that offers business Year and second best in the category Mama Beta Pikin initiative provides respect for these three pillars guide Bank stays leading in this regard, women access to specialized loans of Best Sustainable Transaction in opportunities for mothers and their our activities daily and expectedly, launching initiatives that seek to as well as business mentorship Agriculture. children to access health insurance. through its W initiative which has In a recent interview with Busi- The same passion saw the Bank since empowered and educated nessDay, the Bank’s Head of Sus- break barriers to make remarkable over 55,000 women since inception. tainability, Omobolanle Victor- We have stayed true to feat in the social space, impacting According to Omobolanle Vic- Laniyan attributed the success to the our vision of creating an over 20,071,453 lives in over 853 premium placed on sustainability ‘ tor-Laniyan, winning the category communities through strategic part- is one of the highlights for the Bank and responsible business practice enabling environment nerships with over 358 NGOs. Inter- this year, seeing how actively it has by Access Bank. She expressed for all our customers to estingly, is the fact that the Bank’s continued to champion pro-women gratitude to the organizers for the staff clearly understand and have succeed irrespective of their initiatives. recognition and described it as a an interest in CSR as being pivotal “We have stayed true to our validation of the Bank’s leadership gender, and that is because to the organisation’s vision. They vision of creating an enabling en- position in the area of Sustainability happily apply themselves through we understand that the vironment for all our customers to and others. employee volunteering and have succeed irrespective of their gender, “This is not the first award we are power to create wealth is put in a total of 1,761,156 hours into and that is because we understand receiving this year for our efforts in 142 strategic community initiatives not gender based, however, that the power to create wealth is CSR and Sustainability, but this is across 6 geo-political zones. not gender based, however, we are certainly one that we sure cher- we are not oblivious of the As the year gradually winds not oblivious of the fact that women ish because it is from the industry down and companies take stock of fact that women in this part in this part of the world are largely regulator. A recognition as grand as how well they have fared, Access marginalised which explains why this reinstates the Bank’s position of the world are largely Bank has more reasons to cheer - we birthed a number of pro-women as a true industry leader and it sets and this isn’t because the Central marginalised which explains initiatives’’, she said. us up for more responsibility as the Bank of Nigeria honoured it with “Not just that, within the bank spotlight is now on us to keep up,” why we birthed a number of several awards - but because the are several policies to further pro- she said. Bank’s impact is being felt and its pro-women initiatives mote work-life balance of staff one “Access Bank’s uncommon com- ’ efforts recognized. 28 BUSINESS DAY www.businessday.ng www.facebook.com/businessdayng @businessDayNG @Businessdayng Wednesday 02 January 2019 INTERVIEW ‘CWG is in a new growth phase that meets expectation of our stakeholders’ Adewale Adeyipo, executive director, Sales and Marketing Development, CWG Plc has just been appointed the acting CEO of the Company. In this interview with Modestus Anaesoronye shared his thought on his previous role as executive director, Sales and Marketing through 2018, and how prepared he is to assume the new responsibility. Excerpt:

You were recently promoted that had been brewing in the last sultative Sales and Management in the company, what does the three years. at Discount Microcredit Finance job entail? I think this has been one very House in 2004. his position requires successful year, we have more Adewale is known for his me to be responsible products in the market, some knack in proffering diverse angles for the entire sales other products have gotten into on innovation and aggressive operations and en- their maturity state where we drive for new ideas, revenue gagement for existing can start to earn revenue; whilst generation, and market penetra- andT new product development; we have a whole bouquet of tion. Over the years in CWG and which ranges from conceptual- products that have been in R&D other engagements, his achieve- ization to market research, prod- for eighteen months and in 2018, ments range from identifying uct development, go-to market alone we have had over four to opportunities to sustaining and strategy and if necessary, partner- five of these products success- growing businesses and revenue ship with other stakeholders to fully launched into the market. streams. He has utilized his achieve the end result of generat- An example is our Smart Me- extensive leadership, business, ing incremental revenue /profit tering Utilities Solution which is and strategic planning experi- for the organization. our 4G WIFI enabled metering ence to identify and build teams In this role which you took solution; one we have worked responsible for developing busi- on early this year (2018) what on launching with other key nesses through both short and would you say has been the Stakeholders in alliance with the long-term initiatives most challenging times for you? Office of the Vice President, to Adewale holds a BSc in Com- I would say identifying op- be able to provide Independent puter Science from University portunities and ensuring delivery Power Plants using our Smart of Ilorin, he is an Alumni of to achieve speed to market is the Utility Systems in some strategic Lagos Business School (LBS), most challenge I have seen so far. markets in Nigeria. A few short with Management and Leader- With our current traditional way weeks ago, we were able to join ship trainings and Certifications of doing business, deploying new in the commissioning of the from several Institutions locally platforms timely requires a major Sura-Market Metering Project, and internationally; including cultural change in the delivery of in Lagos Island; that was one Lagos Business School, Busi- our services and I think we have major and successful project we ness School, Netherlands, Mas- successfully dealt with that and achieved this year. Our Enter- Adewale Adeyipo sachusetts Institute of Technol- we are doing very well right now. prise Resources Planning (ERP) ogy (MIT) and London Business How would you say CWG PLC platform which we call SMERP ably do not give it their all. 2019 you, yes, as CWG Plc overall is School has fared in the industry in the is also one major successful will be another interesting year like one very big family. There will Adewale has held several last half year? platform, which had been pre- for us as a country, which Is way be some tough times, but we are leadership positions including I dare say we have not done viously launched, but with key beyond the organization. So with all matured enough to know the Business Sector Director (CWG) badly, though we can do better. features for the Logistics Industry it comes a lot of anticipations and demands of each others roles, ap- for the Telecommunication arm It also depends on who is ask- launched this year. These and uncertainties; one major one are preciate the deadlines and work in 2010 and Business Director ing and what exactly you are many more projects which have the elections. We all know the with the organization’s key values (CWG) for PAN Africa Initiatives measuring and what yardstick been on for over 18 months, but risks and exposures these events in mind. I am very confident in 2014. The PAN Africa Initiatives you are measuring with. Look- have gained major traction this bring; yet in the midst of all these about the team here at CWG Plc was a brainchild, set to produce ing at the global products and year, gives me confidence to push also are the many opportunities. and of their support in ensuring CWG’s strategic delivery partner- services scale, CWG has been on for greater achievements to So, the best we could do as an that we deliver to the highest ships in 23 Africa operations. He able to joggle the market in the set the tone as the major player organization is to understand standards we preach and achieve had also previously served as a last twelve months with some in that field come 2019. our strength, create scenarios a more profitable organization. Director in Consultative Sales of the developmental initiatives So, we have heard that there for varying outcomes, good or Do you have the support of and Managed Services Engage- will be a change in CWG Man- bad and be prepared for it. So, your family also, with this new ments for Telecommunication agement come January and it is not so much fear, but more position? Companies I am very‘ confident sources have told us that you of being better prepared for any So, there are somethings you Adewale belongs to several will be assuming the post of economic ups and down. I think get immediately and there are organizations responsible for about the team the MD/CEO of CWG PLC, how as an organization we have been some other things you get as you social needs and welfare of young true is this? on this road many times before progress. With my family, sup- adults. A passion he is able to here at CWG Plc and Yes, you are not far from it, I and we clearly know what needs port is definite; but I cannot tell nurture through direct mentor- will be assuming the role of the to be done at times like this and you yet if they clearly understand ship, scholarships, sponsor- of their support Acting CEO from January 1st, I am sure CWG is prepared to what this entails. I however have ships, interventions and train- 2019 and that is because our cur- weather all outcomes that the a very supportive wife; I mean, ings across Nigeria. He is the in ensuring that rent CEO’s tenure has been con- year brings. she has been a very constant and co-convener of the New National cluded as at 31st December 2018 Would you say you have the strong pillar over the years. I am Initiative ‘Train a Child’ and also we deliver to the and he has decided to move over support of the staff of CWG sure she is capable and I could serves as a Facilitator at the CWG to some other very strategic line PLC? say that, yes, I have her support Academy set to further groom highest standards we up for the organization, coupled I have been around for a and backing when it comes to young Technology savvy Profes- with some other personal goals while, and I have been in CWG this. sionals. preach and achieve he has lined up. So the Board of PLC for over ten years, so I will Profile As John F Kennedy rightly said CWG PLC has appointed me to be working with individuals that Adewale Adeyipo is a pro- ‘Our progress as a Nation can be

a more profitable take over the reins as the Acting I know very well. People that ficient, technology enthusiast no swifter than our progress in

MD / CEO. I have had daily interactions and Business Executive with education. Free society cannot organization‘ Do you have any fears for with as a regular staff as well, extensive experience in Strategy, help the many who are poor, it 2019? delivered several projects and Management and Leadership. A cannot save the few who are rich’. If anybody tells you they do initiatives as a team; so, from proven tactician who began his Adewale Adeyipo is married and not have fears, then they prob- where I stand now, I would tell journey into professional Con- lives in Lagos, Nigeria. Wednesday 02 January 2019 www.businessday.ng www.facebook.com/businessdayng @businessDayNG @Businessdayng BUSINESS DAY 29 Markets + Finance ‘Providing proprietary research, commentary, analysis and financial news coverage unmatched in BD today’s market. Published weekly, Markets & Finance provides all the key intelligence you need.’ These charts show CCNN delivers higher return on investment for shareholders

In general, a higher fixed- by 96.69 percent to N4.01 billion pany as it was able to magnify BALA AUGIE asset turnover ratio indicates in September 2018, from N2.03 shareholders’earnings. billion the previous year, but CCNN’s gross profits were t is visible to the blind that a company has more ef- profit fell by 53.65 percent to up 65.13 percent to N8.62 bil- and audible to the deaf fectively utilized investment in N1.14 billion in 2016 from N2.46 lion in September 2018 from that Cement Company fixed assets to generate revenue. billion in 2015. N5.22 billion as at September of Northern Nigeria Financial performance 2016 was horrendous for 2017; this means the company is (CCNN) is of sound fi- for Q3 companies in Africa’s largest able to control cost attributable nancial health. For the first nine months I economy as a precipitous drop to projects. This is because the cement through September 2018, in oil price that stoked a severe Earnings before interest maker has been growing profit CCNN’s revenue increased by dollar scarcity and damped and taxation (EBIT) increased at a double digit since it re- 43.61 percent to N19.57 billion government revenue tipped by 96.57 percent to N5.74 bil- bound from a recession low; it from N13.62 billion the previ- the country in its first recession lion in the period under review has strong margins and the level ous year. in 25 years. from N2.92 billion the previous of debt in its capital structure The growth in revenue was However, a rebound in year. Profit before tax surged by does not expose it to financial largely driven by excellent dis- crude oil price and output 100.48 percent to N5.72 billion risk. tribution channel across the couple with the introduction of in September 2018 from N2.85 Its robust free cash flow country and a profilic marketing a flexible exchange rate system billion as at September 2017. means it can finance future ex- strategy. The growth is higher by the central bank helped the CCNN has utilized every pansion plans, reduce debt, and than peer rival Dangote cement country exist recession in the Naira invested in sales in gen- reward shareholders in form of and Lafarge Africa’s top line third and fourth quarter of 2017. erating higher profit as evidence dividend payment. uptick of 13.53 percent and 4.75 The rebound in economic in margin expansion amid a A first glimpse of the finan- percent respectively. activity was a boon to the com- tough and unpredictable mac- cial statement of CCNN shows CCNN’s net income spiked roeconomic environment. it grew third quarter net income Gross margins increased by 96.05 percent, this compares to 44.04 percent in September with Dangote Cement’s profit 2018 from 38.25 percent the growth of 2.61 percent, while previous year. Lafarge Africa recorded a loss Net profit margin increased of N10 billion as the company to 20.49 percent in September continues to grapple with ris- 2018 from 14.91 percent as at ing costs, mounting debt and September 2017. A 21 percent ebbing sales. net profit margin indicates that CCNN has consolidated its for every Naira generated by market share by merging with CCNN in sales, the company BUA owned Kalambaina Ce- kept N0.21 as profit. ment Company Limited Plant, A higher profit margin is in a deal consummated by the always desirable since it means Nigerian Stock Exchange (NSE). the company generates more With this merger, the new profits from the company’s entity will own a combined sales. 2 million metric tonnes per EBITA Margins increased to annum cement plant. This is 29.33 percent in the period un- because CCCN (subsidiary der review from 21.63 percent of BUA) has 500,000 metric the previous year while pre-tax tonnes per annum Sokoto ce- margin moved to 29.22 percent ment plant while Kalambaina in September 2018 as against owns the newly built 1.5million 20.92 percent as at September tonnes per annum Kalambaina 2017. CCNN is spending less cement plant in Sokoto State. to produce each unit of product Consolidating its cement as cost of sales ratio fell to 55.91 plant capacity means CCNN percent in September 2018 has consolidated its position compared to 61.67 percent as as a cost saver, as it has shifted at September 2017. from the use of the Low Pour The merger with Kalambai- Oil Fuel (LPFO) to coal - which na plant is expected to further is a cheaper source of energy to reduce costs and bolster profit power plant at factory. margin while shareholders Kalambaina Cement’s 1.5 wealth will be maximized. million metric tonnes per an- CCNN has utilized the re- num multi-fuel, which is pow- sources of its owners in gener- ered by coal, heavy oils and gas ating higher profit as return on will provide alternative source equity (ROE) increased to 23.49 of energy with limited down- percent in September 2018 from time while contemporaneously 14.20 percent as at September paving the way for further op- 2017. portunities for growth and The cement maker closed expansion. at N19.55 as of 2:00 pm Tues- CCNN has been efficient day, representing a gain of 9.83 in utilizing investment in fixed percent, valuing the company assets to generate revenue than at N24.56 billion. peer rivals. It is trading at 12 month The cement maker has a price to earnings ratio of 4.73 fixed asset turn on 1.45 times, times, which means its shares this is compares with Dangote are undervalued and there is Cement’s 0.57 times and La- room for investors to buy the farge Africa, 0.30 times earnings stock because it is cheap. respectively.

BD MARKETS + FINANCE Analysts: BALA AUGIE 30 BUSINESS DAY C002D5556 Wednesday 02 January 2019

APGA mourns its Benue, Taraba govs tackle boundary crimes National Organising Secretary, Mike Benjamin Agesan Makurdi Kwentoh enue State Governor, Samuel Ortom, and Innocent Odoh, Abuja his Taraba State coun- he All Progressives Grand terpart, Darius Ishaku Alliance (APGA) has ex- have taken steps to pressed deep shock at the curbB criminal activities in com- news of the passing away of munities along the border of the Tthe National Organising Secretary of two States. the party, Akunwata Mike Kwentoh, The two Governors at the week- describing it as “irreplaceable”. end led their various executive In a statement issued by the and security councils to a joint National Director of Publicity of security meeting at the Federal the party, Iheanacho Oguejiofor, in University, Wukari, where useful Abuja on Saturday, APGA National deliberations were made to com- Chairman, Ozonkpu Victor Ike Oye bat the criminal activities includ- said he never expected the news of ing kidnapping, armed robbery Kwentoh’s demise in spite of the fact that he was very sick. and banditry. Ortom Ishaku He said with deep pain that Governor Samuel Ortom reiter- Kwentoh died when his sagacity, ated the need for people of the two communities to untold hardship. panacea to the criminal activities Former Governor of Benue commitment, and experience were states to ensure peaceful coexist- He stated that he and his coun- in the area. State, Gabriel Suswam, and other most needed. ence especially at the border areas terpart were endangered species Governor Ishaku also acknowl- speakers from the two states sug- “Kwentoh was a strong pillar to and to expose criminal elements as a result of their stand for justice edged the efforts of the two state gested the constitution of secu- our party and we would miss his within their vicinities. and the sanctity of the constitu- governments to create employ- rity committees with membership wise counselling and dexterity”, He lamented the spate of kid- tion of the country adding that it ment opportunities for the youth drawn from among the various Oye said. nappings in the two states, point- would be unwise for the people of as a way of discouraging them communities to identify and ex- He recalled with deep pain the ing out that but for the cordial the two states to take arms against from engaging in criminality add- pose criminal elements among short telephone exchange he had working relationship that existed one another for whatever reason. ing that such will be sustained. other steps as solutions to the with the deceased early this week between him and his Taraba coun- Taraba State Governor, Ishaku The Tor Tiv, James Ayatse and insecurity in the two states. and said that nothing in his voice betrayed his sudden exit. terpart, the insecurity in the area had earlier decried the spate of the Aku Uka of Wukari, Sheka- Governors Ortom and Ishaku The APGA National Chairman would have been worse. criminality in the southern parts rau Angyu, represented by Tor later visited Abako and Sai in thanked God for a life of service the The Governor appealed for of his state which shares boundary Kwande and Garan Donga, Chiefs Benue and Dogon-Gawa in Taraba Late Kwentoh led having held key restraint even as he urged the with Benue State. Ambrose Iyortyer and Stephen where they preached peace to the positions in his community and our communities not to embark on He identified community based Bayonga, restated the commit- communities, saying they have a party, the statement added. reprisals on either side, saying intelligence gathering and col- ment of the traditional institutions bigger and common enemy which He prayed God to grant his soul doing so would only expose the laboration among security agen- to help combat criminality in their was insecurity and should not be eternal repose and the family the innocent members of the affected cies and all stakeholders as the domains. fighting among themselves. courage to bear the irreparable loss.

2019: Kwara Fulani community pledges support for Saraki Restructuring will set Nigeria back to his life time contributed immensely you 100 percent. When your father greatness, says traditional ruler SIKIRATSHEHU, Ilorin to the growth and development of was alive, he did a lot for us. We are ...Also supports creation of state police Kwara State. As a result of this, we ready to reciprocate Baba’s kind head of 2019 election, He said, “In the past Nigeria were the Fulani and Bororo are prepared gesture to us by supporting you, his Akinremi Feyisipo, Ibadan the Fulani community in to reciprocate the kind gesture of son. There is nothing anyone can adjudged very great and rich in every Kwara State has pledged the late Saraki by giving his son, do for us to vote for the people we aspect, commerce, culture, tradition traditional ruler in Ibadan, and united patriotic instincts and ac- its allegiance to the Presi- Bukola Saraki 100 percent support. don’t know.” Taye Ayorinde, has lent tions. Nigeria has no need to record Adent of the Senate, Abubakar Bu- “Baba Saraki loved and cared for Responding, Saraki, who was his voice to the call for the poverty in the midst of plenty of hu- kola Saraki. us, so, it’s natural that we should adored with Fulani’s hat thanked restructuring of the country, man resources, vegetation of different The Fulani community compris- also love and support his son who leaders and members of the Fulani sayingA failure to do this may lead Ni- types and mineral resources.” ing of the indigenous Fulani and is also following the footsteps of community for identifying with his geria sitting on a keg of gun powder. While insisting that more power Bororo assured Saraki of their sup- his father. leadership. Ayorinde who is the Baale of Ekot- should be devolved to the states with port ahead of forthcoming general Also speaking, the Secretary of While assuring them of his con- edo, Ibadan explained that with the Federal Government handing elections. Bororo/Fulani community, Usman tinued support, Saraki reminded restructuring the country will be set off most of its responsibilities, Baale The leaders of the Fulani com- Garba said: “We have been waiting them that the relationship which back on the path of greatness with Ayorinde said history should be re- munity, Garba Dembo (Jowuro for this day. We are going to support exists between them and the Saraki the states developing at their own introduced back to the curriculum pace, stating that those against re- in our schools so that the young Oyun) and Usman Garba( the Fu- political dynasty had been a long structuring do not want the progress lani/Bororo union’s secretary) gave ones can know where the country standing one. of the country as most of the states is coming from and where it is sup- the assurance at the weekend when “The Fulani community’s re- will go down. posed to be. they paid a solidarity visit to the lationship with Saraki political Speaking with journalists on what Speaking on other things that Saraki at his Iloffa, GRA residence dynasty has been a long standing he called, ‘Making Nigeria great the country needs to do to be great in Ilorin. one and it shall continue to flour- again’, said the country has been great again, he called for the adoption of Jowuro Oyun promised that his ish,” he added. in the past with Nigeria depending on Option A4 to elect political leaders people will deliver their votes 100 The President of the Senate as- agriculture from the Western region, in order to unite the country, stating percent to all Peoples Democratic sured his visitors and Nigerians in groundnut from the North and palm that the system encourages mutual Party’s (PDP) candidates in next general that the PDP government oil, tin and coal from the East. understanding, public and human According to him, the country relations in politics. year’s general elections. come 2019 will fulfill all its cam- is copying wrongly the American “We’re in full support of Bukola He said, “Religious intolerance will paign promises. federal system which is productive be banished during the primaries and Saraki. We gathered at the palace He emphasised the need for the with its states and people having the election. Our unity should be forged of the Emir of Ilorin, Ibrahim Sulu- people of Kwara state to vote for necessary environment to flourish, by making the Houses of Assembly Gambari from where we marched the PDP’s presidential candidate, noting that apart from Lagos and to be a part time basis as the present down to Saraki’s residence to assure AtikuAbubakar, because “PDP has probably Rivers States, virtually all American system of government is him of our 100 percent support. great plan for the people of the the states in the country are lagging too expensive for Nigeria and it en- “The late Olusola Saraki during Saraki s t a t e .” behind economically. courages corruption. Wednesday 02 January 2019 www.businessday.ng www.facebook.com/businessdayng @businessDayNG @Businessdayng BUSINESS DAY 31

Oil price drop shows why reforms are urgent

ODINAKA ANUDU

he price of Brent Crude has been on a downward trend, fluctuating between $50 and $55 per barrel Tin the last one week. Nigeria’s budget benchmark for crude oil is $60 per barrel, which is beginning to look unrealistic in the new year. Analysts believe that should Brent Crude trend lower than $50 per barrel, Nigeria may begin to brace up for 2016 crisis, which saw the economy go into recession and many firms exit. Nigeria is a mono-product economy, relying on crude oil for over 90 percent of foreign ex- change and 75 percent of revenue. The current government has made a series of efforts to di- versify the economy in terms of increased agric sector funding in rice production through the Anchor Borrowers Programme. However, this has not resulted in significant change in the economy as rice is just one commodity out countries, particularly the top Nigeria needs urgent reforms, from textile export annually. million metric tonnes. Assuming of many. In terms of jobs, for ex- three, are the liberalists and re- as any hit on the Brent Crude In 2016/17, Brazil, with almost that Nigeria was still controlling ample, unemployment rate rose to formists on the continent. Reforms could hurt manufacturers who Nigeria’s demographic size (209 45 per cent of the global palm oil 23.10 percent in the third quarter work,” Olu Fasan, international need greenback to import inputs. million),exported 28.15 million market last month, the country of 2018 from 18.8 percent in the trade negotiator and visiting fel- Manufacturers cut down on metric tonnes (MT), earning over should be producing 26.48 million second quarter of 2018, according low at the International Relations their local content in the first half $38 billion just from sugar. metric tonnes. Local demand is to latest date from the National Bu- Department of the London School (H1) of 2018, as domestic input Sugarcane alone contributed about 2.1 million metric tonnes, reau of Statistics (NBS). The gross of Economics (LSE), said on his sourcing fell by 4.12 percent due $43.8 billion to Brazil’s gross do- meaning that Nigeria would be domestic product (GDP) growth Twitter handle on January 1. to manufacturers’ decision to look mestic product (GDP) – equivalent able to satisfy local demand and in the third quarter of 2018 was Nigeria is still subsiding petrol, outwards for raw materials. to almost two percent of the entire still export 24.38 million tonnes, 1.8 percent, which is lower than with $1 billion set aside for it in Data from the Manufacturers Brazilian economy. Even India, earning $12.17 billion 2.11 percent reported in the fourth 2019 budget. This makes no sense Association of Nigeria (MAN) which was projected to grow as Today, the oil sector is yearning quarter of 2017. to analysts, especially when the show that local sourcing declined fast as Nigeria by the Goldman for reforms. Nigeria is yet unable to An analyst pointed out that an- subsidy benefits only the middle- from 60.72 percent in H1 of 2017 Sachs in 2012, is set to produce 35 use its gas conformably, yet the Pe- other reason why these activities class and the rich that can afford to 56.6 percent in the H1 of 2018. million tonnes of sugar next year. troleum Industry Bill is not passed. have not impacted the economy cars and generator sets. Nigeria The 56.6 percent represents 9.1 For Nigeria, data from the Na- The transport sector, notably is that some of the loans have not has 87 million people living below percentage fall from 65.7 percent tional Bureau of Statistics (NBS) sea and rail movements, need been repaid. $1.90 per day. By assumption, recorded in the second half (H2) show that the country earned urgent reforms. The non-oil “For that to make impact, farm- these people cannot afford gen- of 2017. N577 billion from total export sector needs reforms to bring ers must repay them and the loans erators and cars, with their basic “Local sourcing of raw-materi- in the first quarter of 2018 and in more foreign exchange. The must also be given to many more needs being food, shelter and als sourcing in the manufacturing N218.98 billion in the second stock market needs reforms people. The cycles have to be re- clothing. sector slowed in the first half of quarter (if you factor out what the after a string of losses in 2018. peated for it to make meaningful The country is also unable to 2018 with the exception of motor body calls ‘other oil exports’). This The insurance industry needs impact. Secondly, how much is sign the African Continental Free vehicle and miscellaneous assem- is about $2.20 billion for the half- reforms to contribute more to the loans when compared with Trade Area (AfCFTA) agreement, bly group. This may be adduced year of 2018. the GDP. The education sector the GDP?” John Boazue, an econo- which is easily the largest trade to the general sluggishness of the BudgIT carried out a simple needs reforms to produce qual- mist, asked. agreement since the World Trade economy and a renewed ability research in 2016 using data from ity graduates that meet the needs Nigeria urgently needs reforms Organisation (WTO) in 1994, tar- for importation of raw-materials Indexmundi, the United States De- of industry. The health sector in all sectors, with the next Presi- geted at creating a single market considering the tranquillity in the partment of Agriculture (USDA) needs urgent reforms to check dent likely to face worse economic for Africa’s 1.2 billion people and foreign exchange market,” MAN and Vetiva Research. It was found outbreak of diseases and reduce scenario. exposing each country to a $3.4 discloses. that Nigeria had a 45 per cent high death rates in hospitals that Countries like Ethiopia, Rwan- trillion opportunity. This portends danger to the share of world’s palm oil market look like glorified mortuaries, da and Ghana are growing by 8.5 Experts say the AfCFTA will Nigerian economy. in 1960. The numbers showed analysts say. percent, 7.8 percent and 7.6 per- likely raise Africa’s nominal GDP South Africa, Africa’s second that if Nigeria maintained its 45 “The next president needs cent respectively owing to reforms to $6.7 trillion by 2030 if all African largest economy, earned 164.9 percent share in 2016, it would reforms more than ever before. carried out by their governments. countries sign up. billion rand (about $13 billion) be earning $17.5 billion annu- The motto should be: Reform or “It is exciting to see three Afri- The treaty will liberalise 90 per- from exporting automobiles alone ally from just one product—palm die. This is why the next election can countries topping the list of cent of products produced in the in 2017, according to the 2018 Au- oil— assuming that it exported all should be about issues. We do not world’s fastest growing econo- continent. This means that a coun- tomotive Export Manual. of its output. As of October 2018, need a repeat of the 2016 experi- mies, and seven among 18 fastest try that is bound by the AfCFTA Bangladesh, often regarded as one ton of palm oil was around ence, where oil price fall crashed growing in the world. But it is also can only protect 10 percent of its one of the poorest countries in $499.15, using Malaysian prices. the whole economy,” said Ike worth noting that these African local industries. the world, rakes in $28 billion just Total palm oil output was 58.84 Ibeabuchi of MD services Limited. 32 BUSINESS DAY g www. g @ g Wednesday 02 January 2019

Countering the ‘anointed’ successors syndrome in Nigeria politics sors and also go for any other In the same vein, Ibikun- of the APC. The outcome of the state primary offices of their choice, provided le Amosun who wanted his There is a consensus that the was a pointer to that effect. they ensured maximum support ‘anointed’ successor Adekunle All Progressive Congress state Consequently, Adams Osh- for the then president Goodluck Akinlade saw the emergence of primaries in Imo and Ogun iomhole, National Chairman of Jonathan. Dapo Abiodun as governorship states were bedeviled by many the APC, likened the behaviour The Peoples Democratic Party candidate to his chagrin. logistics challenges but what of Amosun as that of an emperor KELECHI EWUZIE (PDP) with majority of the states Since the results of the state bothers the populace in both who wanted to manipulate the and the central government for primary was made known, states is why the governors are party primaries to his advantage the past 16 years, allowed the Okorocha and Amosun have going about the situation the and also carpeted the Imo gover- ‘anointed’ successor arrange- been in a war of words with wrong way. nor for allegedly trying to create ment to keep the governors Adams Oshiomhole, National The premise is that no indi- a dynasty, saying it was an effort happy, while throwing internal Chairman of APC, for not let- vidual or governor can be greater in futility. democracy out the window. ting them have their way in the than the party under which they What they however fail to However, the emergence of choice of who to succeed them. rode to power. The situation is realise is that apart from the ollowing the return to the All Progressive Congress They even went as far as further worrisome because the fact that Okorocha and Amosun democratic govern- (APC) government appears to threatening to work against the performance of the governors themselves symbolically rep- ment in 1999, a lot of alter this practice ahead of the governorship candidates of the during their tenures in office in resent a fair spread of the geo- power consolidation 2019 for governors under the ruling party if the APC went the eyes of their masses leaves social and political tendencies strategies were adopt- current administration. ahead to field them. much to be desired. of the country, they owe their Fed by vocational politicians in The hope of Imo State Rochas Okorocha was quick to point Rochas Okorocha in the last present offices to the magnetic Nigeria to remain relevant in the Okorocha and his Ogun State out that what happened in the eight years as governor of Imo pull of the APC presidential can- scheme of things. counterpart, Ibikunle Amosun APC primaries in many states has struggled, if not failed to didate in 2015. One of such strategies preva- continuing in the unspoken presents an interesting scenario, improve the fortunes of the pen- As things stand, with the lent is the decision by incumbent arrangement ahead of the 2019 as the party that according to sioners and civil servants in Imo current in-fighting in the APC, governors whose tenure is about election hit a brick wall as the him is known for justice, equity state. This has left many in the along with the failure of the Fed- lapsing to foist a successor of leadership of the APC during and fairness, has been allegedly state in distress and they do not eral Government to deliver on their choice on the state not the state primaries picked can- dented by its National Chair- expect any improvement with its campaign promises, chances minding whether it was the wish didates that were not the choices man, Adams Oshiomhole. the candidate of the governor. are that if the ruling party fails of the electorate or not. of the governors. On his part, Amosun at sev- The same scenario played out to resolve the on- going crisis This trend played out signifi- It will be recalled that prior to eral press conferences, vowed in Ogun. What Amosun in his and prevail on both governors cantly under the Peoples Demo- the last APC State primaries, Ro- to use everything in his power pursuit of political godfather- to back down, the party stands cratic Party (PDP) especially chas Okorocha wanted his son to ensure the success of Akinlade ism failed to realize, was that a big chance of losing out to ahead of the 2015 elections, as In-law, Uche Nwosu to succeed and other aggrieved members in since the advent of democracy in the opposition in the states and some outgoing governors ap- him, but the party picked Hope their new party. He also said he Nigeria in 1999, no governor has this may cost the ruling party peared to have been given the Uzodinma as the governorship would not support Dapo Abio- successfully foisted his candi- millions of votes from Imo and go-ahead to pick their succes- flag bearer. dun, the governorship candidate date on the people of Ogun State. Ogun states. NEWS Imperative of increasing manufacturing sector’s contribution to GDP

OLUWAFUNKE ISHOLA, NAN of 2018, concerted efforts must be a target of two million jobs by 2020. mote transparency and efficiency in made to enhance manufacturing ANALYSIS In spite of the lofty objectives of the business environment, support or the Federal Government, sector’s growth and encourage new the ERGP of channeling more funds local contents in public procurement economic experts and even investments. Isemede, who was the former to priority sectors of the economy, and to improve the budget process. ordinary Nigerians, there Ahmed Mansur, president, MAN, director-general of Nigeria Asso- credit to the manufacturing sector These orders were meant to help is a yearning for a robust noted that the economy could not ciation of Chambers of Commerce, has been declining. in the recovery of many factories and Fmanufacturing sector that will drive grow sustainably without a strong Industry, Mines and Agriculture Muda Yusuf, director-general, to boost productivity in the manufac- the country’s economic growth and and competitive productive sector, (NACCIMA), said only manufactur- Lagos Chamber of Commerce and turing sector. development. saying that the manufacturing sector ing could provide sustainable mass Industry (LCCI), noted that access However, the orders are yet to But for that to become a reality, was the engine of economic diversi- jobs and living wages. to and cost of funds remained a big translate to tangible benefits, as there the contribution of the manufac- fication and growth. He said if the government created issue for many domestic investors. are several complaints as regards turing sector, which the National Mansur said a robust manufac- the enabling environment, the man- “With commercial bank lending compliance with the directives by Bureau of Statistics (NBS) said stood turing sector should be based on ufacturing sector would generate rate at between 20 to 35 per cent, the government agencies. at 8.84 percent as of third quarter of coherent and coordinated efforts adequate revenues for government private sector, especially the SMEs Hamma Kwajaffa, director-gen- 2018, must rise substantially. resulting from close collaboration to provide the needed infrastructure could not successfully access funds eral, Nigerian Textile Manufacturers Experts opine that for Nigeria between government and manu- for development. for their businesses. Association (NTMA), said many to be relevant in today’s dynamic facturers. Experts insist the contribution “We note the efforts of govern- manufacturers had a lot of unsold world, it must have a GDP tending He noted that efforts should be of manufacturing to GDP and em- ment through CBN and Bank of inventories due to lack of compli- towards a trillion dollars, with the geared to solving the electricity sup- ployment would have to increase Industry (BOI) to extend interven- ance of Ministries, Departments and manufacturing sector contributing ply challenge of the country, which significantly to provide quality jobs tion funds to business owners par- Agencies (MDAs) to the Executive at least 20 percent. represented a formidable problem to the teeming unemployed in the ticularly SMEs, however, there are Order on patronage of locally pro- Even that is by far short of the to manufacturers. country, which grew from 18.8 per- still pockets of issues with access to duced goods. 46 percent average contribution of Mansur stressed the need to re- cent in third quarter of 2017 to 23.1 funds,” he said. Kwajaffa said timelines on budget the manufacturing sector to GDP view and strengthen agricultural poli- percent in 2018. Yusuf said to spur growth in the process should be strictly adhered to in most emerging economies and cies, saying agriculture and manufac- To accelerate the development manufacturing sector, access to in order not to slow down economic developed countries. turing, through agro-allied industries, of the manufacturing sector, the credit at below 10 percent should be activities, adding that government The Manufacturers Association have huge potential for backward federal government introduced the made readily available and disburse- should work toward changing the of Nigeria (MAN) is worried that integration and job creation. Economic Recovery and Growth ments of approved loans by banks to belief that government policies are the sector that should propel job Also, John Isemede, United Na- Plan (ERGP) to make the economy customers should be fast tracked. not meant to be implemented. creation, productivity and economic tions Industrial Development Or- competitive and build a virile indus- Indeed, there is no shortage of Babatunde Ruwase, president, growth is encumbered with a series ganisation (UNIDO) consultant, said trialised nation. efforts by the Federal Government to LCCI, commended the government for of challenges. Nigeria should emulate China’s in- The goal of ERGP is to pursue rev the manufacturing sector. improving the business environment, Experts said although the Nige- dustrialisation drive that moved over manufacturing promotion policies For instance, on May 18, 2017, but noted that government should rian economy grew by 1.81 per cent 250 million people out of poverty and that would enable the sector contrib- President Muhammadu Buhari expedite action to implement ease of year-on-year in the third quarter unemployment within 20 years. ute 20 per cent to GDP and achieve signed three Executive Orders to pro- doing business at the nation’s ports. Wednesday 02 January 2019 C002D5556 BUSINESS DAY 33 Financial Inclusion & INNOVATION Supported by: ‘Ease of access to low-cost financial services on a daily basis is very vital’ Oluwatomi Ayorinde, CEO/Cofounder of CrowdForce shares insight on the role his company is playing in including more Nigerians into the financial cycle through its agent distribution network and how it recently enabled the creation of digital identities to over 1 million petty traders across Nigeria under the federal government’s TraderMoni project in this interview with Endurance Okafor.

Tell us about CrowdForce creation of digital identities and how it is impacting Ni- to over 1 million petty trad- What are the challenges geria’s financial inclusion ers across Nigeria under the that drag your objectives? rowdForce is federal government’s Tra- We deal with the same is- building Af- derMoni project, where we sues that plague most busi- rica’s Largest facilitated data enumera- ness in Nigeria. Poor regula- agent distribu- tion, trader onboarding and tions, low access to capital, tion network will be carry out loan dis- hiring good talent and many forC financial inclusion and bursement. This was made more. We would like to see penetrative market re- possible due to our network the government, banks and search. 94 percent of trans- of agents across Nigeria who other huge businesses em- actions in Africa are carried are strategically located in brace innovation faster and out offline and cash-based every ward in the country. support more technology- via retail outlets. By doing driven businesses like ours. this, we are making it possi- What kind of businesses do ble for businesses to deliver you focus on, and do you What can government do seamless services to the last have provisions for busi- assist a firm like yours? mile and also providing an nesses and corporates in Continue to create regula- offline distribution network rural area, especially those tions that enable businesses for businesses to thrive in in the northern part of the and banks prioritize mass Africa. country, considering the adoption of financial servic- exclusion rate is highest in es over short-term profits. As a global decentralised those regions? network of micro busi- We focus on retail outlets Going forward what are nesses, what are the means that have been existing for your plans in including with which you plan to 1 to 3 years and have a good more Nigerians into the achieve the set objective reputation in their com- financial space and are of bringing the unbanked munity. We however do not you looking at rolling out Oluwatomi Ayorinde and underbanked popu- exclude corporates. We are innovative products? lation to the digital econ- basis. While their profits are rate which is currently at vital. not region specific but we CrowdForce will stay true omy? marginal they are always 63.3 perecnt as compiled understand the opportunity to her vision of leveraging Micro businesses do close to open to making extra in- from EFInA? What have you done to to provide more inclusive blockchain to create a global $19 trillion in cash transac- come. At CrowdForce we are I think the 36.7 percent financial include Nigerian services in the North where network of micro businesses tions every year. These small leveraging mobile phones, financially excluded is still businesses and individuals the exclusion rate is highest. to facilitate low-cost cross- businesses are the bedrock blockchain technology and a very huge number. We into the cycle? border payments and remit- of any economy. They are these micro businesses to also cannot say that people We play our role by provid- What is your success level? tances. We will work with trusted and provide most deliver financial services to are financially included just ing the infrastructure (agent Today we have 7000 mer- technology startups to help of their services to the un- the mass market. because they have a bank network) for businesses chants on our network pro- them deliver their digital banked and underbanked. account. Ease of access to and banks to deliver digital viding financial inclusion services or collect payments They already deal with vol- What is your view of Nige- low-cost financial services services to the last mile. We services and penetrative from the mass market via umes of cash on a daily ria’s financial inclusion on a daily basis is also very also recently enabled the market research to FMCGs our agent network. FirstBank visit markets with financial inclusion

Endurance Okafor Ezirim, First Bank of Ni- “We encourage the are well trained to provide Meanwhile, in about 18 this channel are securely geria Group Head, eBusi- patronage of Firstmonie the FirstBank Gold Stan- months, the Firstmonie authenticated. ness, “with our Firstmonie Agents irrespective of the dard Services to customers,” Agent Network has expand- The agent banking mod- irst Bank, the big- Agents spread across the location as these Agents Ezirim said. ed to almost every Local el, which is in line with gest bank in Nigeria country, we are aggressive at Government Area in Nigeria the mandate of the Central by total deposits increasing the penetration (98 per cent coverage). Bank of Nigeria (CBN) is has extended its of financial services, espe- Firstmonie Agents are targeted at ensuring indi- Fagent banking campaign cially in the suburbs while positioned within rural and viduals and members of the to 14 major markets and significantly reducing the semi-urban locations across public, irrespective of their business points across the unbanked in the country.” the country to provide ba- literacy levels, familiarity country with the aim to in- The location visited in sic financial services such with technology or income clude more Nigerians into Delta state include; Og- as account opening, cash levels can access financial the financial cycle. bonogo Market, Koka Junc- deposit, cash withdrawals, services. The market activation tion, Bonsac Junction, Ibusa airtime purchase, bill pay- The FirstmonieAgent and awareness creation Junction, while in Calabar ments and much more to Channel delivers financial of the Firstmonie Agent in Cross River State, Mobil every Nigerian. Through services outside conven- Network spanned between Junction, Etagbor Junction, this channel, the Bank is tional bank branches, often November 24 and Decem- Watt Market, Marian and committed to providing using non-retail agents – ber 16, 2018, which was an Etim Edem Markets were convenient services that Firstmonie Agents – and intensive period of custom- the various location visited. endear trust, provide ease relying on technology such er engagement, education Swali, Tomba, Opolo and of access to financial prod- as point-of-sale (POS) ter- and by extension, financial Nembe communities in ucts, thereby saving time minals or mobile phones inclusion. Bayelsa state also got a feel and travel costs. Transac- for real time transaction According to Chuma of the campaign impact. tions carried out through processing. 34 BUSINESS DAY C002D5556 Wednesday 02 January 2019 LegalPerspectives With Odunayo Oyasiji Use of safeguard measure Locus Classicus Hartog v Colin & Shields in international trade [1939] 3 All ER 566 Meaning of Safeguard Mea- sure he defendants were rticle XIX of GATT 1994 and hide merchants with Safeguard Agreement regu- base in London, United late the operation of Safe- T A Kingdom. The plaintiff is guard measure. Safeguard under GATT/WTO is an instrument used a Belgian Furrier living in when there is an emergency in Brussels. The two parties dis- the form of sudden import surge cussed and agreed verbally which is causing injury or threat on the sale of Argentinian of injury to domestic industries hare skin at 10d per skin to the producing same products in the plaintiff. The defendant made importing country. Safeguard a mistake in the amount that measure is far less popular in use was quoted when sending the when compared to anti-dumping. written offer to the plaintiff. Under this trade defence instru- The way it was quoted was was aware of the real price ment, the party invoking safeguard quoted in extenso -“A Member by increased importation. based on the discussions be- measure is permitted to remove or may apply a safeguard measure to not even in the standard unit in the industry and it was far tween the parties. Therefore, adjust trade concessions in order to a product only if that Member has Criticism the plaintiff accepted the offer remedy the injury being suffered by determined… that such product Criticism of safeguard measure cheaper than what was orally the domestic industry. Safeguard is being imported into its terri- mostly relates to the ambiguity in agreed on. fraudulently. They also stated measure gives the local industry tory in such increased quantities, its wordings. Some of the wordings The plaintiff accepted the that based on the mistake and enough time to adjust to the foreign absolute or relative to domestic that have been categorized to be offer and sought to enforce the previous discussions with competition. Therefore, it’s a way of production, and under such con- ambiguous are “serious injury”, the offer as written in the of- the plaintiff the offer cannot buying time for the local industry ditions as to cause or threaten to “increased quantities” and the fer letter. He claimed for loss be held to be binding on the to develop enough muscle to face cause serious injury to the domes- requirement of a causal link be- of profit or in the alternative defendant. the might of foreign competition tic industry that produces like or tween the increase in quantities the difference between the The court held that the that might want to take over their directly competitive products” and injury to domestic industry. contract price and the mar- contract was void for mistake. market overnight. From the above, it is glaring For example, what is meant ket price at the time of the The court further stated that There is room for the imposi- that two elements must be pres- by increased import that causes the plaintiff must have been tion of provisional safeguard when ent- increased importation of the injury is unclear. Case laws have breach. The defendant sub- there are real threats and delay product and injury or threat of not been able to resolve this is- mitted that the offer sent to aware of the mistake as Hare might result in damage beyond injury to the domestic industry. It sue of increased import. More the plaintiff was by mistake. skin were generally sold per repairs. Provisional safeguard can was stated in US-Steel’s case that confusion has been occasioned They argued that the plaintiff piece. be in place for a period not longer Article 4(2) (a) further elaborates by the interpretation given to the than 200 days. Safeguard measure on what is expected to be done phrase in the case of Argentina can only be in place for 8 years in when trying to establish the two footwear where it was stated that Why banks usually ask that you a developed country while in a elements earlier pointed out in Ar- the phrase “is being imported” developing country it can be in ticle 2(1). Article 4(2) (a) states that requires the authorities to look operation for 10 years. – “In the investigation to deter- into recent imports and not just add your personal guarantee to Safeguard measure can be mine whether increased imports examine imports over a period of in the form of tariff or quota. have caused or are threatening to time to determine import surge. loans obtained by your company There must be compensation if cause serious injury to a domes- The appellate body did not state safeguard measure is in place for tic industry under the terms of how recent and in what quantity ompanies and individu- understanding, the personal three years i.e. the country using this Agreement, the competent the increase must be for safeguard als do take loans for dif- guarantee of directors of a bor- this measure must compensate authorities shall evaluate … the measure to be put in place. Cferent reasons. However, rowing company usually form the party it is being used against. rate and amount of the increase in Another area of confusion is it is common for banks to re- part of the documents required Compensation can be agreed be- imports of the product concerned what is meant by “serious injury.” quest for personal guarantee for lending to the company. tween parties. In a situation where in absolute and relative terms...” No precise definition exists for of the managing director of a With their personal guarantee, there is no agreement between The above suggests that all this phrase and what constitutes company as part of documenta- the bank can go after them for the parties, safeguard measure relevant factors should be put serious injury is not clear. The tion process for loans obtained the recovery of the loan. They gives room for retaliation by other into consideration when evalu- requirement for a causal link be- by the company. Why do they bear secondary liability as di- countries. Retaliation can be in the ating whether serious injury has tween increased importation and do this? The main reason is to rectors. This provides additional form of an increase in tariffs on occurred as a result of the import injury is also a complex one as products from the country that has surge. Article 4(2) (b) goes fur- other factors might be responsible make the alter ego (director) of security for the loan that was refused to compensate. ther to state that in establishing for injury to the domestic industry. the company to be liable for the granted. It also forms the basis a causal link between increased Although, Safeguard Agreement payment of the loan in a situa- why the names of directors ap- Elements to Establish importation of product and in- requires that a distinction is drawn tion where the company fails. pears on court processes filed Article 2(1) sets out the pre- jury, injury triggered by other el- between the injury caused by in- Ordinarily, a company as a for the recovery of debt (at least condition for the use of safeguard ements should be identified and creased import and other factors, legal person should bear the companies can sue and be sued measure. The said provision is separated from the injury caused how to go about this is not clear. implications of failure to pay in their names). up its debt. The liability of the When you are giving personal shareholders is limited to the guarantee for loans, have it at the amount they invested and can- back of your mind that you can DO YOU KNOW? not extend to their personal be held liable in case the original inted glass is prohibited for the purposes of this Act and must be noted that ‘good cause’ belongings. With the foregoing party defaults. in Nigeria except with the for such good cause as may be as used in section 1 quoted Tpermission of the right determined from time to time above was further clarified authorities. There have been ar- by the appropriate authority, under subsection 2 of section guments for and against the use no person shall cause any glass 1. The provision states that of tinted glass. Some believe that fitted on a motor vehicle to be- good cause means health or you do not need a permit if the (a) tinted; or (b) shaded; or (c) security reasons. Therefore, car was bought with tinted glass coloured lightly or thickly; or (d) you must be able to establish to (factory fitted). darkened; or (e) treated in any the police that you are seeking The position of the law is clear other way, so that the persons or permission to use tinted glass for under Motor Vehicle (Prohibi- objects in the motor vehicle are security or health reasons. This tion of Tinted Glass) Act. Its sec- rendered obscure or invisible.” is definitely not the case in our tion 1(1) states that “(1) Except Whatever the case is, you society. People get the permit with the permission of the ap- need the right permission to and use tinted glass for no justifi- propriate authority designated use a car with tinted glass. It able reason. Wednesday 02 January 2019 www.businessday.ng https://www.facebook.com/businessdayng @Businessdayng BUSINESS DAY 35 FT FINANCIAL TIMES World Business Newspaper Polish PM forecasts big changes for Brussels after EU elections Morawiecki urges dropping of rule of law case against Warsaw after ECJ decision

James Shotter of the May 23-26 elections. Polls indicate leading places for Matteo oland’s prime minister has Salvini’s League in Italy and Marine forecast this year’s Europe- Le Pen’s National Rally in France, as Pan elections will lead to big well as for Viktor Orban’s rightwing changes for Brussels and compared Fidesz party in Hungary, and the the controversy over the rule of Eurosceptic Alternative for Germany. law in his country with the travails An Ipsos poll in December forecast of French president Emmanuel that Mr Morawiecki’s Law and Justice Macron. party (PiS) would emerge as the larg- Mateusz Morawiecki called on est grouping in Poland. the EU to drop disciplinary proceed- Mr Morawiecki dismissed as ings over Warsaw’s contentious judi- “completely wrong” suggestions that cial reform and predicted that May’s central Europe was sliding towards elections, in which nationalist and authoritarianism, a characterisation Eurosceptic groups are expected to based on the clampdown on civil make gains, would have a “strong” society in Hungary, and contested impact on the bloc. judicial changes in Romania, as well “Brussels and the European as his own government’s battles with Commission need to be very recep- the EU over the rule of law. tive to what is going on in different “People from Brussels completely countries . . . The voice of different do not understand the situation in countries, and in particular central post-communist countries,” he said, European countries, will need to arguing that the PiS’s judicial over- Mateusz Morawiecki: ‘The EU as an institution needs reform . . . and when I speak to prime ministers from other countries, most of them agree that a serious revamp of procedures and institutions is needed’ be heard much more clearly,” Mr haul — which critics say is an assault Morawiecki said in an interview with on judicial independence — was but can you imagine if those brutal heads with Brussels for much of the come, Poland’s climbdown does not the Financial Times. needed to root out the last vestiges interventions would happen against past three years. Among the most address broader concerns about the “The EU as an institution needs of Poland’s communist past. demonstrators in Poland how loud contentious changes was the oust- judicial overhaul, including changes reform . . . and when I speak to prime He compared the controversy the voices would be in Brussels, in ing of about two dozen supreme to the constitutional tribunal and the ministers from other countries, most surrounding the Polish changes with Berlin or . . . maybe even Paris?” Mr court judges last summer. In a bid body that appoints Polish judges. of them agree that a serious revamp Mr Macron’s recent struggles with Morawiecki said. to make Warsaw reverse course, the As well as the case at the ECJ, of procedures and institutions is the gilets jaunes protests, which have “Just as every country has their European Commission took Poland Brussels is running a broader probe needed, but everyone is waiting for involved violent clashes between challenges, so we have our challenges to the European Court of Justice over into whether Poland complies with the European elections.” police and demonstrators. with the judiciary that hasn’t been the issue. The court told Warsaw the EU’s core values. The probe, Anti-establishment, nationalist, “When I look at what is happening reformed for the last 30 years.” to suspend the reform and Poland known as the Article 7 procedure, far-right parties have made advances in France, I wouldn’t say that France PiS’s overhaul of Poland’s judicial reinstated the judges in November. could theoretically lead to Warsaw’s in a range of EU countries ahead has an issue with the rule of law, system has left the party at logger- EU officials say that, while wel- EU voting rights being suspended. Netflix pulls episode of comedy Erik Prince to launch fund focused on electric car battery metals show in Saudi Arabia Blackwater founder to capitalise on the scramble for once niche metals across Africa Second episode of ‘Patriot Act with Hasan Minhaj’ criticised crown prince and Yemen war Henry Sanderson by China’s state-owned Citic and security to oil companies Group. in South Sudan. Ahmed Al Omran ogy and entertainment sectors through big investments by its Mr Prince said the new fund But it has also ventured into etflix has removed an epi- sovereign wealth fund, which rik Prince, the founder of would target unexplored depos- natural resources, investing in sode of a comedy show directly owns stakes in com- private security company its that could be brought into a bauxite mine in Guinea, and critical of Saudi Arabia panies such as Uber and many EBlackwater, is launching a production and then sold to discovering a copper and cobalt N fund to capitalise on the scram- larger mining companies. It will deposit in the Congo. after the internet streaming ser- other groups indirectly through vice received a complaint from its backing of Japan’s SoftBank ble for battery metals across look to sell its investments after A former Navy Seal who now the kingdom, renewing concerns Vision Fund. Africa and Asia, as the world’s four to five years, Mr Prince said. lives in Abu Dhabi, Mr Prince’s about government control over Later in the removed episode, largest carmakers gear up to go “ Chinese companies are not strong Chinese connections have freedom of expression on online Mr Minhaj criticised Silicon Val- electric. necessarily interested in the very up- helped with his mining invest- platforms. ley for “swimming in Saudi cash” Mr Prince, a campaign ad- stream exploration,” he said. “They ments. This year his mine in Guin- The second episode of Patriot and urged tech companies to viser to president Donald Trump want to buy something in produc- ea secured an agreement to supply Act with Hasan Minhaj focused stop taking investment from the and brother of US education tion which leaves that gap for us.” China’s state-owned aluminium on Saudi Arabia in the aftermath kingdom. secretary Betsy DeVos, aims to Over 60 per cent of the world’s producer Chalco with bauxite. of the killing of journalist Jamal The Saudi law has been previ- raise up to $500m to invest in cobalt supply comes from the Mr Prince, whose father Khashoggi and included criti- ously criticised by human rights the supply of metals such as DRC, one of the poorest coun- founded a company in West cism of Crown Prince Moham- groups as a tool to suppress cobalt, copper and lithium that tries in the world. Chinese com- Michigan that supplied the auto med bin Salman and the Saudi- free speech and has been used are needed for batteries. panies including Citic, Jinchuan industry, said carmakers will led military campaign in Yemen. to convict activists using social “For all the talk of our virtual Group and China Molybdenum need vast amounts of minerals “Now would be a good time media sites such as Twitter and world, the innovation, you can’t are some of the largest investors to fulfil their visions. to reassess our relationship with Facebook to criticise the govern- build those vehicles without min- in the African country. “When I see the R&D bud- Saudi Arabia. And I mean that as ment in recent years. erals that come from generally Mr Prince, who wrote an gets of all the major automakers a Muslim, and as an American,” The CITC did not immedi- weird, hard-to-access places,” Mr opinion piece about Libya for ploughing huge money into hy- Mr Minhaj said at the start of the ately respond to a request for Prince told the Financial Times. the FT in 2017, made his name brid or electric vehicles, I believe episode. He called the Yemen war comment, but Netflix defended Miners are pouring billions of as a private military contractor the demand curve for the unique “the biggest tragedy of the MBS its decision. “We strongly sup- dollars into developing deposits in Iraq and Afghanistan with minerals that make up an electric era”, referring to the crown prince port artistic freedom worldwide of the niche metals that will Blackwater, an operation that car and battery technology will by his initials. and only removed this episode be increasingly needed for the was eventually targeted by law- be enormously high over the Netflix confirmed that it had in Saudi Arabia after we had global car industry to switch to suits and connected to civilian coming years,” Mr Prince said. removed the episode in Saudi received a valid legal request — electric cars. deaths in Baghdad in 2007. He The Blackwater founder ad- Arabia last week, after the coun- and to comply with local law,” the One of the largest investors sold the company in 2010. vised Mr Trump on his election try’s Communications and Infor- company said. has been China, with Chinese Since then Mr Prince has run campaign and met a Russian fi- mation Technology Commission Netflix said the Saudi telecoms companies buying stakes in Frontier Services Group, which nancier with direct ties to Vladi- made a request to take it down regulator cited Article 6 of the deposits in the Democratic Re- provides security and logistics mir Putin’s family in the weeks because it allegedly violated the law as reason for the request. public of Congo and in Chile services to companies in un- leading up to the US president’s kingdom’s anti-cyber crime law. The article states that “produc- this year. Mr Prince also runs a stable countries. The company inauguration — a meeting that is Saudi Arabia has become an Hong Kong-listed security and has won contracts to provide now being examined by special influential player in the technol- Continues on page 36 logistics company that is backed anti-piracy support to Somalia counsel Robert Mueller. 36 BUSINESS DAY www.businessday.ng https://www.facebook.com/businessdayng @Businessdayng Wednesday 02 January 2019 FT NATIONAL NEWS Netflix pulls episode of Leading sides claim early comedy show in Saudi... success as Congo election Continued from page 35 count gets under way After 18 years in power many observers tion, preparation, transmission, believe ruling coalition will still succeed or storage of material impinging on public order, religious val- Tom Wilson ues, public morals, and privacy, he leading sides in Democratic through the information network Republic of Congo’s presi- or computers” is a crime punish- Tdential election both claimed able by up to five years in prison early success as the count got under and a fine not exceeding SR3m way on Monday, setting the stage for ($800,000). volatile days ahead as official results drift in. While the episode has been Ahead of Sunday’s historic elec- removed from Netflix, Saudi us- tion the only reliable polls gave ers can still watch it on the show’s opposition leader Martin Fayulu a official channel on YouTube. 28-point lead over President Joseph Activists and rights groups A plan put forward by the Democrats’ congressional leaders, Chuck Schumer and Nancy Pelosi, would create a five-week window for Kabila’s chosen successor, the former warn that some governments compromise on the issue of border security © Bloomberg interior minister Emmanuel Shadary. may abuse their legal procedures But after almost 18 years in power Democrats hatch plan to end shutdown and corner Trump many observers said they believed in order to deprive their citizens Mr Kabila’s ruling coalition would of basic freedoms and say com- Party aims to pass bills that would allow funding for federal agencies still win. panies should take a more nu- “There is absolutely no way Mr tember, except for the Department of anced approach when it comes James Politi Although the macroeconomic im- Shadary can lose”, Barnabe Kikaya, Homeland Security. That department, pact of government shutdowns tend Mr Kabila’s chief diplomatic ad- to addressing official takedown responsible for border security, would to be small, they can begin to bite if requests from undemocratic viser told the Financial Times, late emocrats on Capitol Hill are be funded only to February 8 — without they endure as federal employees and on Sunday at a building in the capital, states. planning a quick legislative blitz any new money for a wall — offering a government contractors experience Kinshasa, where the ruling party “Banning a comedy act that Dto try to end the US government five-week window for compromise on delayed payments and consumer and was running its own vote count. The brings valid criticism of a gov- shutdown, making the issue their first the issue. business confidence begins to wane. cavernous room was filled with banks ernment is a counterproductive order of business when they take partial There were no signs that the White Mr Trump’s calculation in refusing of phones and computers, as party control of Congress this week. House was prepared to accept the so- to back down on the border wall is that officials prepared to collate results measure and an affront to the The aim is to pressure President lution proposed by Ms Pelosi and Mr he cannot afford to concede defeat on freedom of expression that all from more than 1m ruling party elec- Donald Trump into caving in, as the Schumer, meaning a rapid conclusion one of his signature policies just as he tion observers nationwide. citizens deserve,” said Jillian C budgetary stand-off over the president’s of the budgetary stand-off was unlikely. begins preparing for his 2020 re-election Across town, Mr Fayulu said re- York, a director at the Electronic mooted border wall threatens to run “The Democrats, much as I sus- campaign, in which he will need a ports from the opposition’s observers Frontier Foundation. into a third week. pected, have allocated no money for a strong turnout from his conservative throughout the country indicated a The incident comes as online Nancy Pelosi, who is expected to new Wall,” Mr Trump wrote in a tweet base. massive vote for his campaign. “One lead the Democratic majority in the platforms and the technology on Tuesday morning. “So imaginative! In addition, he may be hoping thing is certain, what happened today House of Representatives starting on The problem is, without a Wall there can that the government shutdown could has organised the definitive departure companies behind them face Thursday, and Chuck Schumer, the be no real Border Security.” dominate the congressional agenda at increasing scrutiny over their of the Kabila regime,” Mr Fayulu said. party’s leader in the Senate, said in a The government shutdown prompt- a time when Democrats might other- “If Mr Shadary thinks he’s won, he’s public policy and relationship joint statement that they were prepar- ed Mr Trump to cancel his plans for a wise prefer to focus on launching their dreaming,” he said. with governments. ing to “take action to lead our country two-week stay at his Mar-a-Lago resort investigation into wrongdoing inside his The stakes are high. Congo has Saudi Arabia, where roughly out of this mess”. They said they would in Florida over the holiday period, and administration. only held four elections since inde- two-thirds of the population are work to pass separate bills that would heralds a new period of gridlock and But Democrats still believe they pendence from Belgium in 1960 and allow funding for the country’s federal confrontation between the president have the upper hand in the fight over has never had a transfer of power via under 30, represents a rapidly agencies. and Congress this year following the the shutdown, and their quick moves growing market for tech com- the ballot box. Mr Kabila, in office The US government has been Democratic takeover of the House in to tackle the issue are designed to cor- since 2001, was due to step down in panies, which can make them partially closed since December 22, the midterm elections. Despite some ner Mr Trump, as well as Republican 2016 but elections were delayed and cautious about upsetting the au- as Democrats and the White House misgivings among congressional Re- lawmakers in the Senate who are allies he held on to the presidency. thorities for fear of losing access sparred over Mr Trump’s insistence on publicans about Mr Trump and his of the president. Mr Fayulu, backed by the wealthy to affluent consumers. the inclusion of funding for a wall on policies over the past two years, the US Ms Pelosi and Mr Schumer said that opposition leaders Moise Katumbi the Mexican border, to fulfil one of his president had until now benefited from if Republican senators, including Mitch and Jean-Pierre Bemba — both ex- Twitter quietly fired a Saudi key pledges from the 2016 presidential a benign environment on Capitol Hill. McConnell, the majority leader in the engineer in 2015 after western cluded from the race — was one of the election campaign. Democrats have The shutdown has added to a new upper chamber, refused to support their few opposition candidates with the intelligence officials told the consistently said they opposed fund- phase of turmoil in Washington, amid legislation, they would be “complicit financial resources to run a genuinely company that the government ing a wall. volatility in financial markets, uncer- with President Trump in continuing national campaign, criss-crossing the had persuaded him to spy on The Democratic legislation due to be tainty over the fate of looming trade talks the Trump shutdown and in holding country in a private jet. the accounts of dissidents, ac- approved as soon as the new lawmakers with China and drama in US security the health and safety of the American Official results are not expected cording to the New York Times. are sworn in on Thursday would reopen policy following the resignation of Jim people and workers’ pay cheques hos- until January 6 but initial counts from all federal agencies until the end of Sep- Mattis as defence secretary. tage over the wall”. The company also warned of individual polling stations indicated “unusual activity” from Saudi that Mr Fayulu probably performed best in Kinshasa — a sprawling me- Arabia and China last November Mark Zuckerberg’s struggle to ‘fix’ social network Facebook tropolis of 11m people. The other after discovering a bug that could Embattled boss says group has ‘fundamentally altered’ its DNA after year of scandals main opposition candidate, Felix have revealed the country code of Tshisekedi, is the head of Congo’s big- tally altered our DNA to focus more to issue a major public apology, after users’ phone numbers. Hannah Kuchler gest opposition party but early results on preventing harm in all our services, the revelation of a massive leak of up to suggested he had not done as well as Experts say companies should and we’ve systematically shifted a large 87m users’ information to Cambridge be transparent about removing or ark Zuckerberg knows that he the lesser-known Mr Fayulu. portion of our company to work on Analytica, the data analytics firm that At two polling stations in a church restricting content, with a clear faces an uphill struggle to fix preventing harm.” worked for Donald Trump’s 2016 presi- Facebook. in Kinshasa’s Matete district, vote policy of conducting due dili- M Yet the changes may be too little, too dential campaign. counts pasted to the wall on Mon- As 2019 dawns, the social network’s gence on government requests late, as politicians increasingly ques- It was the first of many apologies the day showed Mr Fayulu had won 63 share price has lost more than a quarter tion the sheer size and influence of the social network would make throughout that follow legal procedures. of its value in the past year, employee per cent and 69 per cent of the vote “If they are not doing all these company. In the US, Democratic Con- the year, as it was repeatedly exposed respectively. morale has slumped and regulators on gressman David Cicilline, the incoming for failing to protect people’s data from things then they are not follow- both sides of the Atlantic are debating However, delays to voting due to chair of the House judiciary antitrust abuse, leading users, regulators and heavy rain meant turnout in both poll- ing established industry best whether to implement more stringent subcommittee, believes it is time for the politicians around the world to question rules for the virtual world it has built ing stations was less than 50 per cent. practice for being accountable government to step in. whether Mr Zuckerberg — who is also In other opposition bastions in and responsible in handling for 2bn people. “Facebook and the other large tech- Facebook’s chairman and controlling In a new year note published last the capital turnout was even lower. government demands to restrict nology platforms are incapable of regu- shareholder — was up to the job. At one polling station in the Limete week, Mr Zuckerberg admitted that he lating themselves,” he said. “There’s In November, members of parlia- content,” said Rebecca MacKin- had plenty of work still to do. But the stronghold of Mr Tshisekedi, vot- evidence of growing concentration ment from Argentina, Brazil, Canada, ers had to wait six hours for polls to non, director of the Ranking Facebook founder pointed to changes and influence in the marketplace — Ireland, Latvia, Singapore, France, Digital Rights project at the New such as employing 30,000 people open. To compensate, the voting and rising political power as a result Belgium and the UK rebuked Mr Zuck- station remained open until 2am the America Foundation. working on safety issues and investing of the tremendous concentration of erberg for refusing to be questioned by billions of dollars in security every year. next morning but only 33 per cent of Netflix said its policy of com- economic power.” an international committee on fake registered voters managed to place The company has also introduced Mr Zuckerberg began 2018 with news and disinformation that convened plying with local law was consis- new privacy options, and made tar- ballots, according to Joseph Matoka tent with how other US-based a New Year’s resolution to repair the in London. the senior election commission of- geted advertising more transparent by company, after the discovery of disinfor- By the end of the year, the com- companies operated, but it did publishing a database of political ads. ficial at the site. mation campaigns on its platform. He pany was the target of more criticism Across the country faulty or miss- not disclose information about “We’re a very different company pledged to pour investment into weed- for the way it handled the crises, today than we were in 2016, or even ing equipment and untested elec- how many government requests ing out Russian trolls, users spreading including hiring a PR firm to smear tronic voting machines introduced it received or how many were a year ago,” he wrote in a Facebook hate speech and fake news. opponents such as billionaire philan- post on Friday. “We’ve fundamen- this year for the first time led to chaotic acted upon in each jurisdiction. But by March, Facebook was forced thropist George Soros. scenes. Wednesday 02 January 2019 www.businessday.ng https://www.facebook.com/businessdayng @Businessdayng BUSINESS DAY 37 FINANCIAL TIMES COMPANIES & MARKETS @ FINANCIAL TIMES LIMITED Cleaning up steel is key to tackling climate change Technology to make grey metal green will not be rolled out commercially until 2030s

Michael Pooler would also need to become more or less emissions-neutral,” said Nicole ehind sand dunes on the Voigt of Boston Consulting Group. Dutch North Sea coastline, The goal of policymakers, who Bclouds of smoke and steam negotiated the UN Paris agree- billow from the mass of chimneys, ment on climate change in 2015, pipes and cranes that form the im- is to ensure global temperatures posing Ijmuiden steelworks. do not rise more than 2C above Deep inside this vast industrial pre-industrial levels. complex, which for almost a cen- Yet even as producers of the tury has churned out metal for cars, grey metal develop a spectrum of construction and food cans, an ex- new technologies, from dealing perimental project is under way — to with waste gases to rethinking core make steel cleaner and cheaper. metallurgical equations, experts say The plant’s owner, the Indian a large-scale decarbonisation of the conglomerate Tata, calls its novel industry remains decades away. The steel sector is the single largest industrial source of climate pollution process a “game changer” capable As a basic material central to of reducing both carbon dioxide the modern economy, which is emissions and energy consumption also the most traded commodity Upmarket slipper brand Mahabis enters administration by one-fifth. after oil, perhaps the greatest chal- London-based start-up gained brief fame through aggressive online marketing “There is a very big duty for us, lenge is to deliver so-called green as the steel industry, because we are steel at a competitive price. Leila Abboud the retailer, for everything from Mr Shah did not respond to re- one of the biggest CO2 producers,” “In principle there are tech- mattresses to razors can be difficult said Hans Fischer, the chief execu- quests for comment on Tuesday. nology routes to lower emissions ahabis, the maker of high- to sustain even if a brand shoots to The rise of Mahabis, like other tive of Tata Steel Europe. from steelmaking,” said David end slippers that gained notoriety quickly. But despite more than a decade direct-to-consumer brands, was en- Clarke, head of strategy and chief Mbrief fame by building a Mahabis, whose tagline was “slip- abled by online marketing, the wide of gestation, this new steelmaking technology officer at ArcelorMittal, minimalist, Scandinavian-inspired pers reinvented”, never reported any technology is unlikely to be rolled availability of contract manufacturers the world’s largest producer by ton- brand through aggressive online official revenue figures with Compa- that can make new products rapidly out on a commercial scale until at nage. The catch, he added, was that marketing, has gone into adminis- nies House since it was incorporated least the 2030s. and the advent of cheap computing “society would have to accept higher tration. in May 2015. Its unaudited financial infrastructure to do everything from “It’s not a financial reason, it is costs of steel production”. Ankur Shah, the 37-year-old statements as of end of June 2017 not an investment reason. In fact, run servers to process payments. The traditional method for mak- founder of the London-based start- showed that it had debts worth £2.6m Yet it remains to be seen how it’s for technical reasons that it takes ing iron and its tougher alloy steel, up, had touted his ambition to build to creditors coming due within a year. that long,” explained Mr Fischer. many of the new upstart direct- smelting raw materials at extremely the “the Nike of downtime” as re- According to the filings, Mr Shah was to-consumer brands will actually At a time of renewed interna- high temperatures, has not funda- cently as September in an interview the sole owner and director of the tional efforts to avert environmental prove to be viable businesses. Many mentally changed since the grey with the Times. His social media company. of the best known ones such as disaster, the slow pace of progress metal became widespread more savvy made Mahabis’s cozy-looking The company said it had been illustrates the huge task to overhaul Casper mattresses, Harry’s razors and than 150 years ago. Large blast slippers with the distinctive yellow forced to call in administrators from glasses manufacturer Warby Parker a monolithic sector that is the single furnaces rely on coke, a carbon- rubber sole ubiquitous on Instagram KRE Corporate Recovery once it en- largest industrial source of climate are private, venture capital-backed rich fuel made from coal, to reduce and Facebook. tered administration on December companies that do not disclose sales pollution. iron ore into liquid metal, which is He told the Times that Mahabis 27. “We have, for the moment, ceased Globally, steel is responsible for or profit numbers, making it difficult refined into steel. was on track for sales of “well over trading as the administrators take to gauge their sustainability. 7 per cent to 9 per cent of all direct Despite substantial efficiency £20m” in its third year of activity, and over the business. During the four emissions from fossil fuels, with Allbirds, a maker of eco-friendly, improvements over the years, the had sold more than a million pairs of years since we launched, we sold stripped down sneakers, for example, each tonne produced resulting in an laws of chemistry mean that carbon its slippers that retail for about £69. nearly a million pairs of slippers to average 1.83 tonnes of CO2, accord- recently raised $50m from venture dioxide is an unavoidable output of The exact reasons for Mahabis’s customers in over 100 countries; we capital funds to help it expand by ing to the World Steel Association. this reaction. collapse remain unknown, but its are all desperately disappointed at And as the world’s population opening more physical stores in the “There are two ways you could demise shows how the direct-to- this outcome,” said Mahabis on its US, as well in the UK and Asia. grows, demand is only predicted to reduce the carbon footprint,” said consumer model, which bypasses website. increase. Ms Voigt. “One is you avoid CO2 in “It’s very clear that if we want to the steel production, so you try to reach [emissions reduction targets] use either scrap, or something other and keep global warming to 2C, steel than carbon as a reductant agent. India’s renewable rush puts coal on the back burner Investment in the fossil fuel at a standstill as focus switches to green energy December was best month for global bonds in more than a year production in China, which is seek- global average, according to the New Safest fixed-income assets turned positive for the year as economic clouds gathered Simon Mundy ing to capitalise on the international Delhi-based Energy and Resources drive to cut emissions. This was Institute, with tens of millions of ndian power companies spent Robin Wigglesworth However, the equity market ruc- steadily making the cost of electricity households still lacking grid con- tions and fading optimism over the in- much of the past decade rushing from solar plants — once far more nections, and many more suffering to build coal-fired power plants lobal bond markets enjoyed ternational economic growth outlook I expensive than coal power — more highly inconsistent power supply. in anticipation of surging electricity their best month in more than for 2019 sent investors scrambling back competitive with plants running on The government has made the push demand as economic growth took off. a year in December, as rising into the safety of fixed income, lifting the dirtiest fossil fuel. In the 2017 for reliable, universally available G the Multiverse index by 1.7 per cent Now, many of those projects are financial year, newly added renew- electricity a key policy priority. concerns over the health of theglobal mired in deep financial distress and economy sent investors in search of in December. That is its best monthly able energy capacity overtook new The scale of the anticipated private investment in coal power has relatively safe assets. gain since July 2017, and pared its loss coal-fired capacity for the first time. growth in power demand meant ground to a near halt. The sector has The Santa Claus rally that was miss- for the year to 1.6 per cent. The renewable push attracted that coal would remain a vital part been hit by a host of problems: many ing from equity markets was in full “The US economy is slowing, and major investors such as Japan’s of the power mix, said Sajal Ghosh, plants have struggled to secure fuel swing in fixed income, bringing some will likely continue to slow as this long SoftBank, whose consortium last an energy economist at Gurgaon’s supplies, and to clinch deals to sell respite to battered debt investors. growth cycle simply runs out of gas,” year sealed a deal that stunned the Management Development In- their power to cash-strapped state The global bond market has been said Kevin Giddis, head of fixed income industry. It agreed to sell power stitute. In contrast with its heavy distribution companies. under intense pressure for most of at Raymond James. “The Fed will be on from a northern Indian solar park reliance on imported oil and gas, But the biggest driver of long- 2018, as economic growth fanned hold for the foreseeable future. They may for Rs2.44 per unit — well below the India has plentiful supplies of coal term uncertainty for the industry fears of inflation. The Federal Reserve not tighten at all in 2019, and may even cost of coal power, which typically in its eastern region. Until major is one that few anticipated 10 years kept raising US interest rates and ease if conditions deteriorate from here.” costs well over Rs3. advances are made in storage, large- ago: an explosive take-off in the re- shrinking its balance sheet, and the Underscoring the rising doubts This shift in the industry’s eco- scale coal power will be required to newable power sector, as India joins European Central Bank trimmed and over the economy and mounting nomics means that coal power — make up for the intermittent nature the global push to tackle climate ultimately ended its own bond-buying expectations that the Fed will have to once one of the hottest prospects of renewable electricity, with solar change by shifting towards green programme. ease back on its monetary tightening for Indian industrialists — is now a plants shutting down at night and energy. As a result, by mid-November the plans, the global bond market bounce space where most fear to tread. wind turbines falling quiet on still Soon after taking power in 2014, Bloomberg Barclays Multiverse index, has been powered by the safest bonds. “You’d have to be quite coura- days. Prime Minister Narendra Modi’s a broad gauge covering $53tn worth The yield on 10-year US Treasury geous to invest in coal at this point,” But the sector is already moving government set a target of increasing of government and corporate debt bonds has dipped from a seven-year said Navroz Dubash of New Delhi’s quickly to respond to the rapid shift India’s renewable energy capacity around the world, was nursing a 3.7 high of 3.26 per cent in early November Centre for Policy Research. “The in the relative economics of coal by 2022 to 175 gigawatts, equivalent per cent loss for the year. Although and on New Year’s eve it fell below 2.7 speed with which the story has re- and renewables. This year, state-run to 40 per cent of the country’s total modest compared to the decline in per cent for the first time since Febru- versed is quite astonishing.” NTPC — by far the biggest thermal power capacity at the time of the some equity markets, that put the ary, to end the year at 2.68 per cent. India’s move away from coal power producer in India — has announcement. global bond benchmark on track for That helped the overall US government power has big implications for the cancelled several plans for large Mr Modi’s ambitions were stoked its worst year in more than a decade, bond market to a 1.9 per cent gain global climate. Per capita electric- coal projects, including one for a by a dramatic fall in the price of solar and US bonds were heading for their in December, the best in almost two ity consumption by the country’s giant 4GW plant in southern Andhra panels after a huge expansion of worst year since 1994. years. Yields fall as bond prices rise. 1.3bn people is just 38 per cent of the Pradesh state. 38 BUSINESS DAY www.businessday.ng https://www.facebook.com/businessdayng @Businessdayng Wednesday 02 January 2019 FT ANALYSIS Brexit ‘bad or awful’ for UK economy in 2019, say economists Uncertainty expected to hit business investment and depress consumer spending support the economy if Brexit went Delphine Strauss and Gavin Jackson awry, but would otherwise keep policy on hold until a deal went through and ncertainty will hobble UK busi- then deliver a one quarter point rate ness investment and depress rise. Uconsumer spending in 2019, If Britain’s leading economists stunting long-term growth even if seem unremittingly gloomy, it is be- Britain manages to avoid a disorderly cause — as London School of Eco- Brexit, according to a poll of more than nomics professor Charles Goodhart 80 leading economists. put it — “we do not know what kind of The best the UK can expect over the Brexit outcome will emerge from the year is uninspiring growth remaining at fog”. Given the lack of clarity, the one its current level of about 1.5 per cent, near-certainty is that businesses will even if the economy eventually enjoys prepare for the worst. a modest rebound on the back of a deal “The UK economy now has to brace with the EU, the FT’s annual survey on itself for a hard landing,” said Rebecca the UK’s economic outlook suggests. Harding, a trade economist who runs A majority of the 81 economists, Coriolis Technologies. polled between December 17 and The slide in business investment 21, did not give a firm prediction for already visible in official data is likely growth in the coming year, despite last to become more severe in the first year correctly anticipating a slowdown quarter of 2019, as the date set for Brexit The future might not belong to China to 1.5 per cent growth in 2018. Many approaches, many respondents said. said forecasting for 2019 was impos- Rain Newton-Smith, chief econo- Replicating the success of other high-growth economies is about to become far harder sible given the “comprehensive” and mist at the CBI, said companies were we should. As with Japan in the “chronic” uncertainty that had become putting contingency plans in place, Martin Wolf the allocation of resources and slow “a way of life” in the UK, especially and “more of these plans would turn 1980s, the policies of ultra-high the rate of innovation and eco- when likely Brexit outcomes were bi- into reality, with jobs and investment o not extrapolate investment and rapid debt accu- nomic progress, even if an outright nary: either no deal or no Brexit. in the UK lost”. from the recent mulation, which kept China grow- financial crisis is avoided. “Given the political shambles . . . the Some of the respondents said the past. China has had ing so fast after the 2008 financial In sum, China may well fail to outlook is anything from lacklustre economy could already be stalling, as a hugely impressive crisis, make it vulnerable to a sharp replicate the success of other east to catastrophic, but who knows?” smaller businesses and households, four decades. After deceleration. said Diane Coyle, professor of public as well as larger companies, began to Asian high-growth economies, in policy at Cambridge. Nina Skero, head put plans on hold ahead of the March theirD triumph in the cold war, both Crucially, China’s investment becoming a high-income country of macroeconomics at the Centre for 29 exit date. the west and the cause of liberal rate, at 44 per cent of gross do- in short order. It will surely be far Economics and Business Research, However, others said a fall in invest- democracy have stumbled. Should mestic product in 2017, is unsus- harder for it to do so, because the said that whatever its long-term effects, ment in the first quarter would be offset we conclude that an autocratic tainably high. This extraordinary distortions in its economy are so “in 2019, Brexit will be either bad or by higher consumption, as businesses China is sure to become the world’s investment rate did maintain the large and the global environment awful for the UK economy”. and households hoard supplies in case The majority of those who ventured of disruption at borders. “I, for one, am dominant power in the next few growth of supply and demand after is going to be so much more hostile. decades? My answer is: no. That is the 2008 crisis. But China’s public Meanwhile, suggests Capital a possible future, not a certain one. capital stock per head is already far Economics, the arrival of robotics The view widely held in the bigger than Japan’s at comparable and artificial intelligence might 1980s that Japan would be “num- incomes per head. Slowing urban re-ignite productivity growth in ber one” turned out to be badly household formation means that the west and, above all, in the US. mistaken. In 1956, Nikita Khrush- fewer new homes now need to be If one wished to be optimistic, one chev, then first secretary of the built. Not surprisingly, returns on would also hope that experience Communist party of the Soviet investment have collapsed. In sum, of Donald Trump’s incompetence Union, told the west that “We investment-led growth must come and malevolence will be salutary. will bury you!” He proved utterly to an early end. His hardcore supporters are a mi- wrong. The examples of Japan and Because of its size, China has nority. Majorities of the disgusted the Soviet Union highlight three also hit the buffers on export- should win and then bring about frequent mistakes: extrapolating driven growth, at a lower level of the renewal of economic competi- from the recent past; assuming that income per head than other high- tion and social concern that the a period of rapid economic growth growth east Asian economies. The US needs. trade war with the US underlines Brexit uncertainty overshadows productivity, growth, sterling and the fate of the UK economy will be indefinitely sustained; The most interesting other under Prime Minister Theresa May © FT montage and exaggerating the benefits of this reality. China’s working-age economy is not Europe, which centralised direction over those of population is also declining. Given seems destined for a slow relative economic and political competi- the huge rise in debt as well, sus- a numerical forecast expected growth stockpiling,” Prof Coyle said. decline, but India, due to be the of no more than 1.5 per cent over the If there is a relatively smooth Brexit, tion. In the long run, the former is taining fast growth will be very world’s most populous country in course of 2019, against a backdrop most of those polled expect growth likely to become rigid and so brittle, hard. the near future. India is far poorer of a slowing global economic expan- to pick up later in the year. However, while the latter is likely to display Future demand will depend on than China and so still has great sion. With the scheduled EU exit set several respondents warned that Brexit flexibility and so self-renewal. the emergence of a mass-consum- potential for fast catch-up growth. for March 29, a significant minority brinkmanship was doing lasting dam- Today, the fiercest political and er market, while growth of supply Capital Economics forecasts 5-7 warned that the economy could stall age to the economy, with the pro- economic competition is between will require an upsurge in growth or shrink in the first quarter of the year longed uncertainty leading businesses per cent annual growth until 2040. if the government took Brexit talks to to take irreversible decisions. China and the US. A conventional of “total factor productivity” — a This is at least conceivable. India’s the wire, leading businesses to freeze “Business is now being told to pre- view is that by, say, 2040, China’s measure of innovation. Yet, in 2017, savings rates and entrepreneurial investments and consumers to delay pare for a no deal Brexit and increasing economy will be far bigger than private consumption was only 39 capacity are high enough to deliver spending. numbers will relocate some operations. that of the US, with India far smaller per cent of GDP. If it is to drive such a rate. It will need much policy A majority of respondents also said These decisions may not be reversed, still. But might this view be mis- demand, the savings rate must reform. But India’s politics are in- that despite continued wage growth, even in the event of the best possible lower inflation and a modest easing outcome for the economy, which would taken? Capital Economics, an in- tumble and the share of household creasingly focused on economic dependent research firm, answers incomes in GDP must jump. Nei- of austerity, consumers would feel be to remain in the EU,” said Marian performance. This does not guar- no better off by the end of 2019, with Bell, a former member of the monetary “yes”, arguing that China’s period ther will be easy to achieve. But the antee success. But it does make it anxiety setting in over Brexit’s poten- policy committee who runs the consul- of stellar outperformance might be biggest hurdle of all, especially to more likely. tial impact on jobs, house prices and tancy Alpha Economics. coming to an end quite soon. the needed upsurge in productivity Disheartened liberal democrats equity markets. Many respondents noted that even There are two powerful argu- growth, is the shift towards a more must not despair. The euphoria and Even the handful of economists if a disorderly Brexit was averted, un- ments why this view will prove to autocratic political system. hubris of the “unipolar moment” who believe Brexit will eventually certainty over the UK’s future trading be mistaken: first, China’s has great For one and a half decades, Chi- benefit the economy were cautious relations will limit the potential for a of the 1990s and early 2000s were about the short term outlook. Gerard rebound, with the UK unlikely to return potential for continuing catch-up na has benefited from the reforms grave mistakes. But the triumph Lyons, who has advocated a “man- to pre-referendum levels of growth or on the productivity levels of the introduced by Zhu Rongji, premier of despotism is still far from in- aged no deal”, said the economy “could to perform as well as its main trading most advanced countries; and, from 1998 to 2003. No comparable evitable. Autocracies can fail, just easily come to a standstill in the early partners. second, it has a proven ability to reforms have happened since his as democracies can thrive. China months” of 2019 and that plans should “Even if we sign a withdrawal agree- generate sustained rapid growth. time. Today, credit is still being confronts huge economic chal- be in place for both monetary and ment, I don’t believe this will unleash a It is brave to bet against both po- preferentially allocated to state fiscal stimulus in the second quarter. spree of business investment. The UK lenges. Meanwhile, democracies The respondents were divided is going to be approached generally tential and capacity. But, argues businesses, while state influence must learn from their mistakes and about the likelihood of any new fiscal on a ‘care and maintenance’ basis by Capital Economics, in its “Long- over large private businesses is focus on renewing their politics stimulus. They thought the Bank of multinationals,” said Mark Gregory, Term Global Economic Outlook”, growing. All this is likely to distort and policies. England would cut interest rates to chief economist at EY. Wednesday 02 January 2019 www.businessday.ng www.facebook.com/businessdayng @businessDayNG @Businessdayng BUSINESS DAY 39 NEWS Customers to access 3,100 Access-Diamond New Year: Experts want more focus on post oil economy Bank ATMs free by January 1 conomic experts ment to begin to think about only be for people at the bot- give tax holiday to direct for- say the way forward ways to raise money to finance tom so they can earn a decent eign investors, especially those HOPE MOSES-ASHIKE tive returns and a robust for Nigeria in 2019 the budget because we have living. It should not be for peo- that are creating jobs and capital position with 20.1 is to focus on post the largest economy in the ple at the middle or at the top. those that source for raw ma- ith effect from percent Capital Adequacy oil economy, build whole of Africa. “Lip service to agriculture and terials locally for production. yesterday, Janu- Ratio (CAR) as at 30 Septem- Einfrastructure and reduce cost “We need to focus on im- showmanship will lead us no- “Any manufacturing company ary 1, custom- ber 2018. We believe that of governance to revamp the port substitution for our agri- where; we need to improve on that is looking inward or that ers of Access this platform, together with BankW plc and Diamond Bank nation’s economy. cultural produces and export agriculture as well as construct wants to engage local farmers the two banks’ shared focus Lolade Adesola, Samson processed products instead of rural roads because we still in production of its raw ma- plc can have access to over on innovation, financial in- Olalere and Raji Rasaki, who raw materials. This will fetch us have produces perishing in the terials should be encouraged 3,100 Automated Teller Ma- clusion and sustainability, are economic experts, gave the more revenue. farms,” she said. through tax exemption,” Ra- chines (ATMs) free of charge. can bring benefits to Access advice in separate interviews “For instance, we need to The economist, however, saki said. This implies that custom- Bank and Diamond Bank with the News Agency of Ni- develop our dairy business; said there was need to reduce Olalere, however, said the ers can use any Diamond customers, staff and share- geria in Ibadan on Tuesday. people who are into milk pro- the size of the government to country’s focus should be on Bank ATMs without paying holders,” Herbert Wigwe, Adesola said there was need duction in the country have save cost of governance and post oil economy, considering the usual charges that apply group managing director/ for adjustments across board none of that milk produced in find other ways to increase the situation in the oil market on withdrawals from other CEO of Access Bank, said. so that the country could cope Nigeria; they import milk and revenue. Rasaki, in his submis- globally. banks’ ATMs. “In the memorandum well under the present eco- just package it into tins, mean- sion, said infrastructure devel- “For the leadership of this The Central Bank of Ni- of agreement to get into nomic realities of low revenue while we have cows in Nige- opment was key as well as cre- nation to take it to the next geria (CBN) on Septem- a merger with Diamond and high debt servicing. ria,” she said. ating conducive environment level, we must be thinking of ber 2014 reintroduced N65 Bank, we believe that the “The reality is that our rev- Adesola further stressed for foreign investors to boost what happens after oil fails in charge on transactions at combined enterprise will enue is not growing and the the need to improve on the rev- the economy. the global market and so we other bank’s ATM, known be a large diversified bank price of crude oil is below 50 enue generation, as the deficit “When we put infrastruc- must think about human capi- as remote-on us, after four with an extreme extensive dollars per barrel. The bottom in the 2019 budget was higher ture, in place, we will have the tal development. withdrawals. retail foot print. Together line is that the 2019 budget is than what was expected. “The influx of foreign investors; in “We have so many resourc- But with the merger of we will have 27 million cus- lower than that of 2018; the to- recurrent expenditure is 45 the past, the cost of running es untapped in this nation, the Access Bank and Diamond tomers which is basically tal amount of the budget is the per cent, meaning we will be business via power in Nigeria tourism sector and others are Bank in December 2018, the the largest customer base size of South Africa’s budget for borrowing to pay salaries and killed most of the manufactur- waiting to be explored. In the charge would not apply to of any bank in the conti- education. then there is a clamour for in- ing businesses. next five to 10 years, crude oil customers of these banks. nent, about 33,000 Point of “The revenue the country crease in minimum wage. Bor- “But now that we have im- will become irrelevant as far “Access Bank has a strong Sale, PoS, terminals, and made in 2018 when crude oil rowing to pay salaries itself is a proved on power generation as the world market is con- track record of acquisition 3,000 Automated Teller Ma- was sold for 70 dollars is not re- political exigency, which is not and distribution, a lot of com- cerned; new inventions that and integration and has a chines, ATMs, as well as 13 alistic in 2019, so there is need best economic solutions. panies are showing interest in require non-oil usage are gain- clear growth strategy. Access million mobile customers,” for creative people in govern- “Salary increase should coming back; government can ing ground,” Olalere said. Bank and Diamond Bank Wigwe said. have complementary op- Access Bank is a full- erations and similar values, service commercial bank and a merger with Diamond operating through branches Bank, with its leadership in and service outlets located digital and mobile-led retail in major centres primarily banking, could accelerate across Nigeria and sub-Sa- our strategy as a significant haran Africa, as well as the corporate and retail bank in United Kingdom (extension Nigeria and a Pan-African fi- to United Arab Emirates nancial services champion. (Dubai)), with representa- “Access Bank has a strong tive offices in China, Leba- financial profile with attrac- non, and India. Emotan Gardens: Subscribers rally family members, friends for more slots on back of impressive benefits ith work ad- ing on their friends and vancing on family members to also Emotan Gar- snap up units at the estate. dens, the real Edmund Igbinoba said estateW project being devel- the major guarantee on the oped by the Edo State gov- project is the government’s ernment through the Edo backing, which forecloses Development and Property any doubt on the deliver- Agency (EDPA) and Mixta ability of the project. He Nigeria, subscribers are added that the growing mobilising their close as- profile of the estate and the R-L: Amina Audu-Katagum, wife of Bauchi State deputy governor; Rabiatu Abdullahil, mother of the 2019 Baby-of-the-Year in sociates and family mem- actualisation of a number Bauchi State, and Rukaiya Ibrahim, Bauchi State commissioner for women affairs, during the visit of Audu-Katagum to the Baby- bers to snap up units in the of promises made by the of-the-Year at Bauchi State Teaching Hospital in Bauchi, yesterday. NAN estate to enjoy from its im- state government on the pressive benefits. project have motivated him The 1,800-unit afford- to encourage his associates Island Maternity recorded 3,493 births in 2018 able housing estate sits on to also take up units in the JOSHUA BASSEY a 74-hectare land in Upper project. … as governor’s wife welcomes first babies of 2019 Sokponba axis of Benin City According to Igbinoba, sland Maternity in Lagos born at the facility and two women, their babies and chil- water, and poor sanitation, as and offers a mix of housing “I am excited about the es- recorded a total of 3,493 other hospitals in the state. dren. She noted that govern- they contribute to childhood options. About 100 units of tate project for a number births in 2018, and on Tues- At the General Hospital, ment’s efforts in stemming mortality,” she said. the houses are ready for oc- of reasons, chief of which day began the New Year Somolu, a male child was also maternal and infant mortal- She urged expectant cupation, even as work in- is the state government’s Iwith early deliveries of two ba- born at 1.47 am, weighing 3kg ity would be slow if expectant mothers to maintain good tensifies on other phases of support, which has been bies at 12.00am and 12.01am, and two females at the Randle mothers did not go to the cen- hygiene and health- promot- the estate project. reaffirmed with the award respectively, to become first General Hospital, Surulere, at tres to use the facilities. ing lifestyle in pregnancy to A cross-section of sub- for reconstruction of the babies of 2019 in the state. 1.58am and 4:00am, weighing “I wish to note that the state ensure the wellbeing of their scribers on the project said Benin-Abraka Road. I am Of the 3,493 total births at 2kg and 2.7kg, respectively. government has continued to expected babies. that they are excited about also impressed with the rate the health facility in 2018, 111 Ambode, who visited the strengthen the health sector Jide Idris, the state commis- the prospect of living in the of development. were recorded as sets of twins, three hospitals to share the with the provision of neonatal sioner for health, said with the estate, which is a novel idea This is why I am asking 12 were triplets while one was joy of the new births with the care units, equipment and re- implementation of the Lagos by the state government, my people to join me in this quadruplet (four babies in families, advised pregnant sources to our state hospitals, State Health Scheme, more adding that they were call- journey at the estate.” one birth). women to patronise govern- to enhance the quality of ma- residents would have access to The first babies of 2019 ment health facilities for de- ternal and child care services improved health services. liveries. in our state,” she said. Idris said this would reduce CHANGE OF NAME CONFIRMATION OF NAME - a male and a female child, I, formerly known and addressed This is to inform the general public She explained that the in- She also appealed to moth- neonatal and infant mortality weighing 3.7kg and 2.8kg, re- as Talabi Sekinat Olabisi that Akalugwu Chikamnaele vestment being made by the ers to ensure they complete and ensure safe motherhood, spectively, were presented to now wish to be known and Maryjane and Akalugwu the wife of the state governor, government on infant and the full course of immunisa- noting that the plan of the state Chikamnaele Mary. refers to maternal health infrastruc- tion for their children to pre- government was to get all resi- addressed as Lawal Talabi same and one person. All former Bolanle Ambode, who arrived Sekinat Olabisi. All former the hospital yesterday morn- ture, could only be justified vent childhood killer diseases. dents into the health scheme documents bearing any of the documents remain valid. Gen- two names remain valid. General ing with lots of gifts for babies by commensurate use of “In addition, parents must and focus on the basic health- the modern facilities, by the avoid the use of contaminated care in the state. eral Public please take note. public please take note. 40 BUSINESS DAY www.businessday.ng www.facebook.com/businessdayng @businessDayNG @Businessdayng Wednesday 02 January 2019 WEST AFRICA ENERGY intelligence oil gas power Wednesday 02 January 2019 www.businessday.ng www.facebook.com/businessdayng @businessDayNG @Businessdayng BUSINESS DAY OIL

Nigeria: Total poised to start exports from Egina FPSO Page 42 POWER

Cote d’Ivoire: L-R: Temitope Oshuntuyi, SPE Nigeria, council member; Augusta Etim, senior production technologist at Eroton E & P; Onyebuchi Okereke, SPE Lagos section Cote d’Ivoire to chairperson; Niyi Afolabi, head, development & Wells at Eroton with Gabriel Bigwan, senior Geophysicist at Eroton E & P during the Society of Petroleum add 643MW of Engineers Lagos section monthly technical meeting held recently. power to grid by Debrief 2021 Page 44 What can Nigeria learn Market Insight from Angolan oil reforms?

FRANK UZUEGBUNAM of marginal fields to African new laws have been enacted, ing of the management of An- independents, have hit the including: The Natural Gas Reg- gola’s oil and gas industry. The books just as the oil price is ulatory Framework, which es- move is designed to improve ngola, in the last stabilizing, and Angola is al- tablishes policies for the mon- transparency, attract new in- one year has pur- ready attracting new interest etization of natural gas (both vestment and increase output. sued its oil reform from investors. associated and non-associated The reforms have also ad- with the kind of Lourenço has made key ap- gas) in existing and new con- dressed the downstream sector. zest Nigeria could pointments to shift the trajecto- cessions; Incentives for invest- The government has created Oil watchers see Anot must in all its effort in near- ry of the oil and gas sector. The ments, which vary from tax a task force to focus on down- ly 20 years to reforms its own oil Ministry of Mineral Resources reforms to contract reforms, to stream issues, similar to the $70/bbl in 2019 as industry through the Petroleum and Petroleum quickly put to- encourage economic explora- upstream task force. The task- Industry Bill (PIB). It is pro- gether a task force comprised tion and development of natu- force teams will focus on what recession fears fade jected that Angola’s economy is of both international and do- ral resources; Improved terms is needed to build a high con- set for recovery in 2019, in large mestic stakeholders, including to better allow for exploration version refinery in the Lobito Page 46 part due to a series of regulatory the Ministry of Finance, the Of- within development areas in municipality and a refinery in reforms opening the country to fice of the President, Sonangol, existing blocks. Cabinda. new investment. BP, Chevron, ENI, Esso, Equi- Considered one of the most Mega oil and gas projects President João Lourenço OPEC weekly basket price nor, and Total. The task force important changes to Angola’s have achieved final investment who took over mantle of lead- has proposed improvements in oil and gas sector, an indepen- decision since 2018, and sev- DAY PRICE ership in September 2017 several areas, including: simpli- dent regulator has been created eral more are headed for FID in focused on cleaning up cor- 20/12/18 53.92 fying the oil concessions man- to manage the country’s oil and 2019 and 2020. A new licensing ruption and implementing ag- agement process; implement- gas concessions, which were round is expected to attract new 19/12/18 55.13 gressive reforms to transform ing incentives for investment previously handled by the state- international explorers to the 18/12/18 56.08 the oil and gas sector and the in marginal fields; and creating owned Sonangol. The National country, as well as promote the economy. The reforms, which 17/12/18 58.24 a natural gas regulatory frame- Oil and Gas Agency is the new participation of Angola’s do- span from deep changes in tax work. granter and manager of conces- mestic sector by offering incen- 14/12/18 59.07 law to changes in concession By December 2018, several sions in a complete restructur- tives for marginal fields. Source: OPEC contracts and the opening 42 BUSINESS DAY www.businessday.ng www.facebook.com/businessdayng @businessDayNG @Businessdayng Wednesday 02 January 2019 WEST AFRICA Outlook oil Nigeria: Brief Total poised to start exports from Egina FPSO Ghana: 16 major oil companies apply for three otal SA is crude from a floating off- The extra supplies will duction when the country oil blocks in Ghana poised to shore production vessel arrive at an awkward mo- is meant to be restricting start exports have been scheduled for ment for an oil market supplies to help OPEC hana’s Energy of crude from February, according to that has seen prices for and its allies avert a glut. Ministry has an- a major new a copy of a loading pro- benchmark Brent and Egina is the first of a nounced that Toffshore field in Nigeria, gram for the new grade. West Texas Intermediate series of a projects that the Licensing GRound Committee, has adding to global supplies Initial exports should be grades plunge by more are intended to revive Ni- at a time when oil prices just over 100,000 bpd but than $30/bbl since early geria’s oil production into opened applications for prequalification received are plunging. could double in the fol- October. The project will the next decade, while from interested companies Shipments of Egina lowing months. also bolster Nigerian pro- also increasing the share who submitted Expression of output from offshore of Interest (EoI) for the facilities and thus mini- competitive bidding for mizing risks from sabo- three blocks. tage and crude theft. The three blocks are ergy Minister in-charge of Total, the field’s opera- (GH_WB_02, GH_WB_03 Petroleum, who observed tor, will handle shipments and GH_WB_04) in the the opening of the sealed from a $4 billion float- Western Basin and direct expressions of interest, ing production, storage negotiations in respect of “the high level of interest and offloading vessel, the two Blocks (GH_WB_0S shown by major Interna- and GH_WB_06), offshore tional Oil Companies in largest facility of its kind Ghana. our first licensing round is ever built by the French A statement issued by a vote of confidence in the major. the Energy Ministry said Ghanaian economy under Nigeria agreed on De- overall, 16 companies the leadership of President cember 7 to curb its out- with proven track records Nana Addo Dankwa Akufo- put when OPEC and allied submitted a total of 60 ap- Addo.” producers met in Vienna. plications. It said two of “Government is deter- The nation will have to cut the applications were in- mined to use a transpar- supplies starting in Janu- validated as they were for ent process as specified by ary by about 40,000 bpd Block GH_WB_01 which law to shortlist companies had been reserved for the that have the capacity and under the deal. Ghana National Petroleum will qualify based on pre- Nigerian crude pro- Corporation (GNPC). scribed criteria,” Dr Amin duction has dipped in The statement said in said. recent years and stood at line with this, 58 valid ap- The companies that ex- about 1.76 MMbpd in No- plications would be con- pressed interest include vember, according to esti- sidered for the next stage Tullow Oil, Total, ENI, mates. Exports of 200,000 of the process. It said the CAIRN, Harmony Oil and bpd would make Egina a number of applications re- Gas Corporation and EXX- bigger grade than all bar ceived shows a high level ONMOBIL. Others are three Nigerian crudes, of interest by international CNOOC, Qatar Petroleum, based on January load- companies in our Basins. BP, VITOL, Global Petro- The statement said ac- leum Group, AKER Energy, ing-program data com- cording to Mohammed First E&P, KOSMOS, SASOL piled by Bloomberg. Amin Adam, Deputy En- and EQUINOR.

Uganda: Uganda gives Tullow conditional approval to farm out stakes to Total, CNOOC

rene Muloni, Ugan- Muloni said after the Tullow believed it should substantial tax liabilities ment of Uganda on this to do another licensing da’s energy minister deal is finalised, Tullow not have to pay the as- and that this position is matter and the deal will round for vacant blocks said she had given would be a non-operator sessed Ugandan tax. supported by Uganda’s tax only complete when in 2020, but the number Tullow Oil condi- and Total would be the “As Tullow has stated laws,” he said. those negotiations are of blocks that would be Itional approval to sell part operator in the northern on a number of occa- “Tullow and its part- auctioned has yet to be brought to a satisfactory of its stake in Ugandan part of License Area 2, sions, we believe that this ners remain in discus- conclusion.” determined. oilfields to France’s Total while CNOOC Uganda deal should not attract sions with the Govern- Uganda discovered Muloni said Uganda’s and China’s CNOOC but would be the operator of commercial crude oil de- gross crude reserves had only after $167 million of the southern part of the posits in the west of the also been revised down- tax on the deal is paid. area. country near the border wards after new reser- London-listed Tullow “Given the above prog- with the Democratic Re- voir analyses, to 6 billion agreed early last year to ress, we now expect the public of Congo more barrels from 6.5 billion sell Total most of its stake licensed companies to than 10 years ago. previously. Recoverable in Ugandan fields for $900 undertake the final in- The start of commer- reserves remained at 1.4 million but CNOOC later vestment decision for the cial production has been billion barrels. exercised its pre-emption upstream projects before repeatedly delayed due The oil firms are -ex rights to buy half of the June 2019,” she said. to a lack of required in- pected to spend between Tullow assets on sale. The three firms cur- frastructure such as a $15 billion and $20 billion “I gave conditional rently each hold a 33.3 refinery and an export to develop Ugandan fields consent for this transac- percent stake in the fields pipeline. The govern- and the associated infra- tion, subject to payment and Tullow is now selling ment said last month structure and the East Af- of tax obligations, as as- 21.5 percent of its stake, that it now expects oil rican country is banking sessed by the Uganda which will be split equal- production to start in on that investment and Revenue Authority of ly between Total and 2021, a year later than potential proceeds from about $167 million,” Ener- CNOOC. previously expected. crude exports of about gy Minister Irene Muloni George Cazenove, Muloni said the gov- 200,000 barrels per day to said. Tullow spokesman said ernment also planned drive growth. Wednesday 02 January 2019 www.businessday.ng www.facebook.com/businessdayng @businessDayNG @Businessdayng BUSINESS DAY 43 WEST AFRICA gas ENERGY intelligence Brief Nigeria: Ghana: LPG marketers cautions against Fresh attempt to revive Ghana LNG project locating gas plants in fuel stations

hana has re- go handling system and vived plans for tank material package he Nigerian construction with Jiangnan Shipyard Association of of marine fa- Group,” a Chinese de- Liquefied Pe- Gcilities for handling liq- signer and developer of troleum Gas uefied natural gas (LNG) liquefied steamships, Marketers at the port of Tema with product tankers, chemi- (NALPGAM)T has urged the signing of agree- cal tankers, and bulk Department of Petro- ments for the construc- carriers. leum Resources (DPR) to tion of a floating regasifi- The TGE Marine’s stop approving locating of cation unit and an LNG barge-type FRU will have Liquefied Petroleum Gas terminal as the West a capacity of 28,000 cu m (LPG) plants in fuel sta- tions. African country seeks to and will be developed Nosakhare Ogieva- increase electricity sup- in parallel with a larger Okunbor, President of ply by 30 percent and floating storage unit ac- NALPGAM, told news- become the first to im- cording to the Germany men in Lagos that in- port the LNG in sub-Sa- contractor. Tema LNG stalling `ad-on skid gas haran Africa. could not immediately plant’ in fuel stations was Ghana’s government, confirm the cost of the dangerous urging DPR to which owns Ghana Na- 95-meter-long FRU with discontinue the approval tional Petroleum Corp. an annual capacity of 2.2 of selling or locating a gas plant in fuel stations. He said that both LPG, known as cooking gas, and fuel were highly in- flammable which needed than satisfactory compli- ”As matter of urgency, cannot open our eyes to be on separate entities, ance with minimum envi- the DPR should com- and watch for something adding that LPG cylin- ronmental safety require- mence dismantling of drastic to happen before ders were potentially and ments for the operations such gas plants in filling we raise alarm,” he said. highly hazardous. of those facilities. stations. Ogieva-Okunbor, how- The NALPGAM boss He said that there is no- “Most stations have ever, called on both the expressed worry over the where in the DPR guide- neglected the rules and Federal and State Govern- increasing number of fill- lines and regulations that regulation, they are now ments to live up to their ing stations engaged in stipulated operating gas locating gas plant in most responsibilities by check- selling of gas within the plant within fuel stations. stations across that states. mating the fuel stations. stations not minding the According to him, “Today, we see some He also said govern- hazardous implications. some filling station own- have cited plants close to ment should commence Ogieva-Okunbor said ers are in the habit of eateries’ kitchen within immediate demolition that the proliferation of installing ad-on gas ma- their stations and this is of such illegal gas plants fuel and gas-filling sta- chine later in their fuel dangerous while they are within such stations. tions across the country stations, but which was discharging gas and sell- ”The earlier govern- had raised safety con- not in the original build- ing fuel. ment and officials act fast, (GNPC), had said the million tpy. cerns, considering the less ing plans at the on-set. “We, the association, the better for Nigerians. LNG terminal project “The barge is a two- would take 18 months tank version with an in- to complete and enable dividual cylindrical tank Angola: delivery of 250 million size of 14,000 cu m,” TGE standard cubic feet/day Marine stated. Angola LNG restarts operations of gas for regasification. “Five modular com- Using Tema terminal pact regas skids will ngola LNG has 4. Multiple market sourc- minor intervention and one cargo has been load- processing infrastruc- provide a peak send-out resumed pro- es subsequently reported plant operations have ed. ture, the project prom- rate of 335 tonnes per duction after a that the plant had been now been resumed.” Trading sources did ises to supply enough hour or approximately halt to opera- shut down due to a minor Angola LNG’s plant not expect a significant Ations earlier this month, issue. has a capacity of 5.2 mil- market impact on spot gas for generation of 30 2.9 million tpy at a send- percent of Ghana total out pressure of 65 bar,” it a company source con- According to an email lion mt/year, and normal- prices, given the pervad- electricity demand. added. firmed. The last vessel to from the company, there ly produces between five ing ample availability of German-based TGE Meanwhile, China load from the plant was was “conducted a con- and six cargoes a month. spot cargoes in the Atlan- Marine Gas Engineer- Harbour Engineering the Malanje on December trolled shutdown for a So far, for December, only tic Basin over the past two ing GmbH said in mid- Co. has commenced months. September it had won construction of a marina Though the plant has a $350-million contract at Tema port that is cur- resumed the production for a floating regasifica- rently being expanded of LNG, there are current- tion unit (FRU) by Tema by the Chinese contrac- ly no vessels at the com- LNG Terminal Co. Lim- tor. The FRU is expected pany’s Soyo berth being ited, which is owned by to be delivered as early loaded. London-based private as first quarter of 2020. Two vessels, the Bar- equity firm Helios In- Gasfin, a member celona Knutsen and the vestment Partners and of the Tema LNG con- Gaslog Huston, are cur- China Harbor Engineer- sortium, which also in- rently in a holding pattern ing Co., an engineering cludes Gazprom Mar- off the Angolan coast. The contractor and subsid- keting & Trading Co., former has been in the iary of China Communi- has been mandated to area waiting for around cations Construction Co. oversee the supply of the six days, according to TGE Marine said the FRU and Floating Stor- Platts ship tracking data. contract involves the age Unit (FSU) respec- The later vessel arrived “design and supply car- tively. earlier this week. 44 BUSINESS DAY www.businessday.ng www.facebook.com/businessdayng @businessDayNG @Businessdayng Wednesday 02 January 2019 WEST AFRICA ENERGY intelligence power Iraq: Iraq gets 90-day Iran sanctions waiver from Washington to continue electricity

raq can continue elec- tion. Cutting that supply tricity and gas imports would be devastating for from Iran without Iraq’s economy and, con- violating US sanctions sidering the ferocity of underI an extension. Wash- summer power protests, ington appears satisfied would likely destabilize with Baghdad’s intention an already fragile political to reduce electricity and balance. gas imports, among other Around 1.25 Bcf/d is actions, and gave a 90-day imported by pipeline feed- waiver just as the previous ing three power plants in 45-day waiver expired. Diyala and Baghdad prov- This provides additional inces. Another 350 Mcf/d time for Iraq to determine is sent by pipeline to a ways to pay Iran for the power plant in Basra. Iraq imports in non-dollar de- is also fed a total of 1,000 nominations and avoiding MW of electricity via pow- Iranian banks. The finan- er lines from Iran. cial transactions techni- Negotiations began after cally violate sanctions, not the Trump administration power or gas purchases. made clear it would re-im- Cote d’Ivoire: Iraq stopped trading pose sanctions. Iraqi and in crude with Iran prior to Kurdistan region officials the November 5 snapback were also pressed to strike Cote d’Ivoire to add 643MW of of American sanctions, a deal to restart oil exports which otherwise would from federally controlled have violated sanctions. Kirkuk fields through the Iraq does not produce Kurdistan-controlled pipe- power to grid by 2021 enough power itself or line to Turkey, which began have enough feedstock for at nearly 100,000 b/d in ote d’Ivoire cently, the government turbine, expected to be capacity increase by 390 existing power plants. mid-November. plans to add said the 643 MW will be operational by the third MW by the third quarter Imports from Iran ac- It is unclear what spe- 643 mega- generated by expanding quarter of 2020, and a 74 of 2021 - a 247.9 billion count for nearly 30 per- cifically will be required watts (MW) Azito Energie’s power sta- MW steam turbine due to CFA franc project that will cent of Iraq’s 14,000 MW of of Iraq when the 90-day of power tion in Cote d’Ivoire, and begin operating the fol- include a 260 MW gas tur- daily electricity consump- waiver expires. toC its network by 2021, by increasing the capacity lowing year. bine and a 130 MW steam the government said, in of Ivorian electricity pro- Azito Energie is owned turbine 60 km (37 miles) a bid to meet domestic ducer CIPREL. by Guernsey-registered from the commercial cap- demand and boost elec- A 253 MW expansion emerging markets power ital Abidjan. tricity exports to the sur- of the Azito Energie plant company Globeleq and Cote d’Ivoire’s power rounding region. The worth 225.8 billion CFA IPS (West Africa), which is exports to neighbour- country which produces francs ($392.9 million) is majority held by the Aga ing countries fell by 26 most of its 2,200 MW of due to begin over the first Khan Fund for Economic percent last year to 1,225 power from oil and gas, quarter of 2019, it said. Development. gigawatt hours (GWh) due aims to generate 4,000 The project will in- CIPREL, a subsidiary to a decline in demand MW by 2020. clude a 179 MW gas of Eranove, will see its and capacity constraints. In a statement re-

South Africa: 500MW solar cell factory to open in Coega IDZ

frica’s first solar opment Corporation of “We are very excited cell factory has South Africa (IDC), which about the opportunities been inaugurat- will begin commercial op- that this new cell factory ed in the Coega eration in Q3 2019. opens up for our opera- AIndustrial Development “We have continuously tions in South Africa”, said Zone of Port Elizabeth, received purchase orders David Nunez Blundell, South Africa, along with for modules from our co-founder of Seraphim 200MW half-cell module 300MW factory in South Southern Africa. assembly expansion in Africa since it reached full Blundell added: “This Eastern Cape. production in Septem- plant will be the first of Jiangsu Seraphim So- ber; building our own cell its kind in Africa, and lar System Co. Ltd. (Sera- plant in South Africa is shall be a stepping stone phim), a world-class the ideal way to support towards the consolida- solar product manufac- our customer base by op- tion of a strong vertically- turer, recently made the timising our production integrated operation that announcement of the and reducing lead times” will see additional invest- 500MW solar cell factory, commented Polaris Li, ments materialising in the which will directly support President of Seraphim. near future. its growing module assem- “We are glad to coop- “Together with the bly plant already operating erate again with IDC, a module assembly expan- in Eastern Cape. professional and reliable sion, it will launch Sera- According to the manu- local partner. This new phim into a new stage of facturer, the new factory factory will strengthen evolution, strengthening and expansion is co-de- mutual interests and op- our value proposition to veloped by both Seraphim timise prosperity for our clients in the South Afri- and the Industrial Devel- stakeholders.” can and exports markets.” Wednesday 02 January 2019 www.businessday.ng www.facebook.com/businessdayng @businessDayNG @Businessdayng BUSINESS DAY 45 WEST AFRICA ENERGY intelligence finance people appointments Brief Royalty, Oil and Gas Executives, and Golfers French court fines oil group Total in Iran bribery case flock Bonny Island for NLNG Golf Classic igeria LNG The event was graced gration of the oil and gas rity as well as the social Paris court fined Limited by prominent royal fa- industry’s efforts to devel- development of Bonny French oil and played host thers of the Niger Delta; op Bonny Island. Island. gas group Total to over 100 chief executives from “Bonny Island is one Also, Engr. Simbi 500,000 euros golfers at NNPC, Shell, Mobil, Total, of the most important Wabote, Executive Secre- ($570,000)A for bribing itsN Residential Area golf NCDMB, PETAN and golf energy corridors in Af- tary of Nigerian Content foreign public officials in course, on Bonny Island. enthusiasts from various rica”, Attah said and as- Development Monitoring a case related to Iranian The two-day tournament clubs in Nigeria, as well sured participants that Board (NCDMB) com- contracts in 1997. is the 2nd edition of the as the host Bonny Island the event would become mended Nigeria LNG for Total, was charged NLNG MD’s Golf Classic. Golf Club. an annual year-end to the initiative, stating that with paying $30 million It attracted participants Speaking at the event, be held every Decem- “NLNG should do this under the cover of a con- from the IBB Golf Club, the MD of Nigeria LNG ber, given the positive continuously. It will re- sultancy contract to facili- Abuja; Port Harcourt Limited, Tony Attah de- impact it would have on ally bring people to see tate a deal for the South Golf Club, Kaduna Golf scribed the game of golf NLNG’s tourism vision NLNG as an organization Pars gas field more than Club (KGC), Ibori Golf as a business game. He for Bonny Island. In this that cares about people. two decades ago, which and Country Club, Asaba; said the NLNG MD’s Golf respect, he urged com- Just keep the golf course volved in any type of cor- the Paris prosecutor said Shell Warri Golf Club; Ru- Classic provides valuable panies on the Island to pristine and external par- ruption,” Pouyanne said. covered “corruption pay- muokwurushi Golf Club, opportunity for network- continue to partner on ties might even want to “However, given the ments”. Port Harcourt and Ikoyi ing, building bonds of emergency response to sponsor contests on this specific circumstances of Court documents said Golf Club, Lagos. friendship and the inte- ensure safety and secu- course.” that from around 1995 this case, which has been to 2004, at the request of already judged in the US an Iranian official cited and in which none of the as Medhi Hashemi Raf- individuals can defend sanjani, the son of Iran’s themselves, Total does former president Akbar not want to pursue it,” he Hashemi Rafsanjani, To- added. tal and intermediaries It is not the first time made illicit payments to that Total’s business with middlemen designated by Iran has ended in court. Medhi to help the com- In 2013 it agreed to pay pany. $398 million to settle a US Total’s Chairman and criminal and civil allega- Chief Executive Officer tion that it paid bribes Patrick Pouyanne said between 1995 and 2004 to in a statement after the win oil and gas contracts. ruling that the company This was billed as the would no longer pursue first coordinated action the matter because none by French and US law of the individuals under enforcement in a major investigation were still foreign bribery case and alive. at the time the Paris pros- “Anyone who knew ecutor recommended (former Total CEO) Chris- Total and its then CEO tophe de Margerie knows de Margerie face trial in France. (R-L) NLNG MD, Tony Attah presenting the tournament registeration pack to the Amanyanabo of Grand Bonny, King Edward Asimini that he would never be in- William Dappa Pepple Oil tanker owners scrap record number of ships

il tanker own- erage earnings in at least sudden surge in cargoes. bia and Russia began add- exporters lifted their com- the highest in 3 1/2 years, ers scrapped three decades. With the US poised to ing barrels to the market. bined output by about according to data from a record num- What those demor- impose sanctions on Iran Between May and No- 1.5 million barrels a day. the Baltic Exchange in ber of ships alized owners perhaps earlier this year, produc- vember, the world’s larg- American shipments are London. At the start of Othis year. Those who did failed to foresee was a ers including Saudi Ara- est and second-largest also soaring. As well as December, giant 2 mil- missed out on a sharp adding demand for ves- lion-barrel carrying ves- rally in rates. sels, the increased oil sup- sels were making $58,000 Owners purged a re- ply also drove down fuel from delivering Middle cord 100 of the industry’s prices -- the industry’s East oil to China, the most main crude carriers so far, single biggest expense. since at least the start of with most of that happen- For those owners 2017. West African rates ing in the first half of the who did not scrap, rates also surged. year, according to data jumped more than three- In transportation ca- from Clarkson Research fold from late September pacity terms, this year’s Services Ltd., part of the to mid-December, ac- scrapping is the highest world’s biggest shipbro- cording to Clarkson fig- since 1985. But the surge ker. That is no surprise, ures. in earnings doesn’t mean as up to September the Up in the North owners were wrong to vessels, which transport Sea, ships that move demolish -- even if some roughly 40 percent of the 600,000-barrel cargoes might have benefited world’s crude, were on earlier this week were from waiting a little lon- course for the worst av- earning $72,664 a day, ger to do so. 46 BUSINESS DAY www.businessday.ng www.facebook.com/businessdayng @businessDayNG @Businessdayng Wednesday 02 January 2019 WEST AFRICA marketinsight ENERGY intelligence Oil watchers see $70/bbl in 2019 as OPEC Flakes Russian OPEC coordinator recession fears fade Marshavin to leave energy ministry oman Marshavin, as head of the Department he world’s big- one of the Rus- for International Coopera- gest banks are sian Energy Min- tion, the sources said. reckoning on istry officials who Marshavin was part of orchestratedR the 2016 the team, headed by En- a rebound in oil prices next landmark deal with OPEC, ergy Minister Alexander yearT as fears of a recession is leaving his job, the en- Novak, which brokered prove misplaced. The Brent ergy ministry said. The a deal at the end of 2016 benchmark will average ministry said Marshavin with the Organization of $70/bbl in 2019, almost a was leaving the ministry the Petroleum Exporting third higher than its price. this month to take another Countries on oil produc- Despite plans by OPEC job but did not give more tion cuts. He had led the and its allies to limit pro- details. department since June duction next year to pre- “The order about Mar- 2016. vent a glut from forming, shavin’s resignation is The deal helped the oil’s fortunes have in- signed,” the ministry said global oil market to rebal- creasingly been driven by in a statement. Two gov- ance, while oil prices re- moves in financial assets ernment sources said Mar- covered. and concerns about the shavin may be taking up a Russian President global economy. How- role at the World Bank. Vladimir Putin honoured ever, analysts expect mar- Alexei Gospodarev Marshavin last year with kets are about to tighten on tightening monetary analysts anticipate that succeed. OPEC will begin from the ministry of indus- Russia’s Order of Friend- as growth stays strong, policy. world oil consumption implementing the curbs try and trade may take over ship. OPEC’s supply cuts kick Though, most commen- will continue to expand at this month, and leading in, and unintended losses tators are not seeing an ac- roughly the pace seen in member Saudi Arabia has in Venezuela and Iran es- tual recession biting the oil recent years, powered by pledged to slash output by calate. market next year, the medi- emerging economies such even more than it formally The recent weakness in an forecast of 24 oil analysts as China. agreed to. financial assets has been in a Bloomberg survey proj- And although doubts Some anticipate a vig- led by a darkening outlook ects that London-traded remain that OPEC will orous rally. The most bull- for the global economy Brent will average $70/bbl cut output deep enough ish forecasts in the survey, amid prolonged trade in 2019. The median fore- to prevent a surplus, the those of Morgan Stanley dispute between the US cast for WTI is $61.13. survey shows analysts are and Standard Chartered and China, and as the US In the absence of a se- confident that the group’s Plc, project that Brent will Federal Reserve embarks vere economic slump, most strategy will ultimately average $78/bbl.

Saudi Arabia needs $84/b oil price to balance 2019 budget Russia dashes plans to make its oil

audi Arabia will Analysts with Riyadh- ship with OPEC and its al- ed revenue figure, Riyadh market alliance with OPEC permanent require oil prices based investment bank lies led by Russia agreed still requires oil to trade ussian Energy lems in the market. higher than $84/b Al-Rajhi Capital said this month in Vienna to cut at $70/b, Al-Rajhi Capital Minister Alex- Energy ministers had to avoid running the budget implies a fis- a combined 1.2 million b/d estimated. Brent prices ander Novak been talking up progress anotherS deficit, analysts cal breakeven oil price of for the first six months of averaged about $71/b poured cold wa- toward the permanent warned after the kingdom $84/b for 2019, which is 2019, amid tepid demand in Q4 2018 but have slid terR on long-simmering arrangement as recently announced record govern- $27/b higher than the level growth and surging US spectacularly in recent plans to make Moscow’s as their meeting in Vi- ment spending in its state Brent futures were trading supplies. weeks due to fears of an alliance with OPEC and enna earlier in December budget for 2019. at present. Despite the weak oil oversupply and tepid de- other oil producers per- 2018. The budget calls for The budget figures spot- market, Saudi expects to- mand growth. manent. The group of However, Novak said spending of 1.106 trillion light the economic pres- tal government revenues Unless oil prices re- roughly two dozen pro- the prospects for that riyals ($350 billion) for the sures Saudi is under to to rise 9 percent to 975 bil- bound significantly then ducers has been man- plan now look dim, Re- year, up 7 percent from revive flagging oil prices lion riyals in the forthcom- the kingdom faces rising aging global petroleum uters reported. He said it 2018, despite oil prices regardless of the kingdom’s ing fiscal year, according to debt, or the demands to supply for the last two would create too much slumping in the fourth significant foreign curren- the Ministry of Finance. Oil drain its currency reserves. years in order to rebal- quarter and the kingdom cy reserves, which exceed revenues account for more The budget has been in the ance the market after a pledging to cut output as $500 billion. than 70 percent of the king- red since the oil price crash prolonged and punishing part of OPEC’s agreement The world’s largestdom’s total export income. in 2014, but the ministry oil price downturn. to balance the market. crude exporter in partner- To achieve its budget- said it expects the deficit to The effort succeeded shrink to zero by 2023. in shrinking global crude Boosted by a 3 percent stockpiles and boosting rise in crude exports, Saudi prices to four-year highs, Arabia’s 2018 oil revenues until the market sudden- ly crashed again in early came in at 608 billion riyals, October. The group has up 38 percent year on year, agreed to a fresh round the Ministry of Finance of output cuts that begin said. Meanwhile, non-oil January 1. revenues totaled 287 bil- For at least a year, red tape and expose the lion riyals, up 12 percent OPEC Secretary General non-OPEC members of year on year, as some of the Mohammed Barkindo the alliance to potential Vision 2030 economic di- discussed institutional- sanctions from the US versification efforts began izing the arrangement. government. to pay off. That would essentially “There is a consensus The rise in revenues al- form a supergroup of oil that there will be no such lowed Saudi Arabia to nar- producers comprised organization. That is be- row its 2018 deficit to 138 of the 14-nation OPEC, cause it requires addition- billion riyals, down from Russia and nine other oil- al bureaucratic brouhaha the ministry’s previous exporting nations, which in relation to financing, guidance in October of 148 would be able to more cartel, with the US side,” billion riyals. quickly respond to prob- Novak told reporters. Wednesday 02 January 2019 www.businessday.ng www.facebook.com/businessdayng @businessDayNG @Businessdayng BUSINESS DAY 47 WEST AFRICA ENERGY intelligence talking points

Unstable oil prices render Nigeria’s 2019 budget assumptions unrealistic

more conservative but overall budget increase production. Large projects have expenditure and over N800bn has been ISAAC ANYAOGU spending makes sense to me, because stalled including Shell’s plan to develop released for capital projects, according to it is lower than what was budgeted for 225,000 bpd Bonga South West/Aparo, analysis by Budgit, a non-profit campaign- igeria’s 2019 budget is pre- last year.” which has been unable to reach FID based ing for financial transparency in govern- mised on the production of On his part, Rafiq Raji, chief economist on disagreement over fiscal terms. The ment spending. 2.3million barrels per day at Macroafricaintel said the projections project has been suspended every year The government has drawn up the (bpd) and that oil prices are quite ambitious. “Crude oil produc- since 2016. budget to accommodate for possible in- will sell at the average price tion has been less than 2million bpd thus Other projects that have stalled in- crease in minimum wage and continued ofN $60 per barrel, and analysts say these far this year; latest about 1.7mbpd I think.” clude 120,000bpd Zabazaba-Etan project; payment of Niger Delta Amnesty which are not only too ambitious targets, but Raji adds “And even as OPEC and Rus- 140,000bpd Bosi project; 110,000bpd Uge will help to maintain oil production at falling oil prices could dampen with pro- sia are committed to production cuts, $60 project and 100,000bpd Nsiko deepwater current levels. jected export earnings. is likely closer to the upper limit of the project. The 1billion barrel Owowo field “If you look at it in the context of the In October of 2018, the price of Brent range of potential price increases.” development is also waiting on the right additional expenses, trying to budget crude rose $86 per barrel and in just six Crude oil prices averaged $49.49 per fiscal terms among other conditions. for minimum wage increase, and there weeks it crashed to $57 and analysts are barrel in 2015, $40.68 in 2016, $52.51 The Petroleum Industry Bill has still is a budget for Bank of Agriculture and not optimistic of a dramatic price rise. in 2017 and so far this year, has sold at not been passed after years in the national Industry to recapitalise them so they can JP Morgan Chase and the United States an average price of $71.2according to assembly further deterring new invest- give single digit loans, which I think makes Energy Information Agency are not opti- figures published by the Organisation of ments. sense and continue to fund Niger Delta mistic oil prices will rise above $60 next Petroleum Exporting Countries (OPEC). President Muhammadu Buhari in Amnesty plan, that’s fine too” Oyedele year cutting their previous forecasts of Oil prices currently are around $56, with Abuja told lawmakers that the total said. above $80. analysts projecting it will remain low for Federal Government’s budget for 2019 In 2019, Nigeria is budgeting to spend The implication for Nigeria is that ex- the medium to long-term. fiscal year was N8.83trillion which will N4.04 trillion as non-debt recurrent ex- port earnings from oil is likely to fall by Nigeria’s oil production fell to 1.2mil- be funded by revenue projection of penditure, N2.14 trillion for debt service at least 20 percent to $49billion next year lion barrel in 2015 following a militant N799.52bn from company income tax, N492.36 billion as statutory transfer, N120 from $61billion in 2018 if oil prices find a campaign by the Niger Delta insurgents value added tax of N229.34bn, cus- billion as sinking fund and capital expen- floor around an average price of $57 per prompting OPEC to grant Nigeria ex- toms duties of N302.5bn, recoveries of diture will gulp N2.031 trillion. barrel, indicating that budget assump- emption from a supply cap it agreed with N203.38bn, independent revenue of “But I don’t see how far the budget tions may be off the mark. non-members including Russia. Since N624.58bn, N710bn in sale of govern- spending will be at risk if the estimate of “It is too ambitious,” says Taiwo Oye- 2017, Nigeria’s production has recovered ment equities in joint ventures and other price barrel of crude oil and volume is dele, PwC head of tax said, “Nigeria’s slight above 1.5million barrels per day sundry incomes of N104.1bn. not attained, it can mean that our deficit average production figures for 2019 and reached a 1.7million barrels per day But so far this year, the government will be significantly be higher than what is is about 1.9 million; to be budgeting in November. has only spent N4.59tn in the 2018 budget budgeted and therefore the cost of funding 2.3million bpd is overly optimistic. I However, Nigeria has not made the framework as at September 2018 which the deficit will continue to go up which is would have loved to see something investments needed to grow reserves or represents 67 percent of the projected already high as it is” said Oyedele. BUSINESS DAY NEWS YOU CAN TRUST I WEDNESDAY 02 JANUARY 2018 www.businessday.ng https://www.facebook.com/businessdayng @Businessdayng @Businessdayng Opinion 2019: Key business risks and effective management strategies (1) risks that are external to a firm port, the top 10 risks include the strategy formulation and firms are created to take risks and can be national, regional foreign exchange, fiscal and execution. They work more as and as they say that the riskier or global. The global ones are monetary policy, regulatory a reactive unit that attends to it is, the higher the return, suc- risks that can cause signifi- risk, crude oil price, brand and To ensure growth and specific risk failures during the ceeding in a risky environment cant negative impacts across reputational risk, customer profitability‘ in 2019 execution of a firm’s strategy is therefore the ability of firms FRANKLIN NNAEMEKA NGWU (PHD) countries and industries if attrition, political and liquidity and beyond amidst and most of the time are more to take risks but effective in it occurs. While the known risks, insecurity and interest such innumerable disposed to risk avoidance mitigating the negative aspects Dr. Ngwu is a Senior Lecturer in of the risks. Strategy, Finance and Risk Man- global risks include failure of rate risks. As no proper sus- risks, our firms might than risk taking. This approach agement, Lagos Business School climate-change mitigation, tainable national mitigation is wrong and cannot guarantee Thisapproachrequires and a Member, Expert Network, complex regulatory demands, strategies were developed in need to rethink their the sustainable growth and firms to first scan, robustly World Economic Forum. E-mail: data fraud and cyber-attacks, 2018, almost all or most of the approach to strategy profitability of a firm in a pecu- understand and identify all [email protected] spread of infectious disease, top 2018 risks are still with us formulation and ex- liar environment such as ours. their possible risks and their weapons of mass destruc- and might likely escalate in ecution In a survey of risk awareness sources and then develop tion, water crises and pro- 2019. Moreover, irrespective and practice across firms in strategies (models or op- found social instability, the of whoever wins the presiden- Nigeria, the employees scored tions) to mitigate the risks. It ith the num- emerging ones include digital , an average of 2.5 out of 5 with a is an approach that rewards tial election, there are other the firms with the privilege ber of calls readiness and risk digitization, macro risks such as rising the best time to be a CEO in lower score of 2 in the financial to see different opportunities I have re- talent deficit and succession unsustainable debt, limited Nigeria. It is really a challeng- sector. inherent in the risks and then ceived re- challenges, changing cus- government revenue genera- ing and risky environment To ensure growth and prof- the insight to develop the ap- cently about tomer needs and challenges tion, unemployment, inflation which requires a rethink of itability in 2019 and beyond propriate strategic choices to Wthe uncertainties of 2019, I can of retaining customer loyalty. and food security that will strategy formulation and ex- amidst such innumerable exploit the risks and oppor- attest that Nigerian CEOs are The regional ones peculiar to affect both the country and ecution. While I appreciate risks, our firms might need to tunities. With the innovation really worried about known, Africa or West Africa include firms. In addition to the litany the challenges of CEOs in a rethink their approach to strat- of strategic choices and mod- emerging and unknown risks risks such as rising unemploy- of external risks, every firm is turbulent environment such egy formulation and execu- els to manage the risks and that might erode their growth ment, technology importa- also faced with some internal as Nigeria, my engagement tion. As strategy and risks can opportunities, some firms and profitability in 2019 and tion, voluntary and involun- risks such as internal fraud, with many of them reveals a be argued to be two sides of are able to see blue oceans beyond. Not only are they tary migration, lack of very employment practices and limited appreciation of the the same coin, strategy should of profitability while others worried because it is an elec- skilled labour force, failure of work place safety, damage risks they face and as such be developed mainly from a see only negative risks and tion year, they are concerned national governments and to physical assets, business their strategies fail when the risk orientation approach.Be- failures. Using this approach that irrespective of whoever fiscal crises etc. disruption and system failure, risks start to manifest. In many cause we are in a high risk en- helps firms to understand the wins the presidential election Of these three categories execution delivery and pro- firms, there is no risk unit vironment, the strategy should three key risks that can disrupt in Nigeria, there are inherent of external risks, the one that cess management. and where there is, they are not be that of risk avoidance, strategy which are demand risks that are somehow out- gives the CEOs in Nigeria the With such myriad of risks normally very separate from rather it should be one with risk, competitive risk and ca- side their powers to effectively greatest worry are the national and challenges, a friend who the strategy unit and most of a risk loving disposition but pability risk. To be continued. mitigate or manage. These are risks and in 2018 KPMG re- is a CEO lamented that it is not the times partially involved in with a caveat. Recalling that

THE PUBLIC SPHERE Desired attributes of Nigeria’s next CEO debating on a choice be- notmake decisions from such an envisioned fu- the CEO of Nigeria Inc. tween the contending the melange of ideas and ture. Communication is a lu- parties as well as that be- suggestions that he would Connectedness. The bricant of social relations tween the younger, new- The leader must be receive. The leader must leader should be a pan- and more so in managing breed candidates and the be quick to the draw, in- Nigerian networker with complex entities such as older established names quick to the‘ draw, formed and knowledgea- the willingness and ability states and governance in both the Peoples Dem- informed and knowl- ble. More than the stock of to reach out and engage units. Communication ocratic Party and the All knowledge that he brings all groups for the benefit does more. Progressives Congress. It edgeable. More than to the table, however, is of the country. The CEO For the government, CHIDO NWAKANMA is a tough call on citizens the stock of knowledge his receptivity to ideas of Nigeria Inc and States communication ensures because the lines are so and innovation. The edu- Unlimited must be team the buy-in and favourabil- Nwakanma is a Visiting Member that he brings to the builders. The notion of ity with constituents that of the BusinessDay Editorial blurred as not to make a cated man is not the man Board and serves on the Adjunct difference among the par- table, however, is his who knows all the answers the Governor or President earns continued legiti- Faculty at the School of Media ties. Many readily dismiss receptivity to ideas but the one who is willing as Superman is jaded and macy. Governments must and Communication, Pan Atlantic the chances of the new and able to seek out solu- untrue. Unfortunately, win the “legitimacy of University, Lagos. Email chidon- breed despite the sterling and innovation. The tions. In the Knowledge both the constitution and public authority” through [email protected]. credentials of some of educated man is not and Information Age, we years of practice dur- performance and the abil- them on face value. the man who knows need a leader who is ready ing military rule have ity to communicate that PDP gets the black to open himself and our conditioned the civil ser- performance both as a brush deservedly for its all the answers but country to know and to vice and other groups to vision and in feedback on he 2019 elections failings in 16 years at the the one who is willing drive the process. wait on the Governor or actual results. Govern- would be signifi- helm. The atrocious per- UK’s Department for the President. Our law ment leaders must have cant in several re- formance of the APC at and able to seek out International Devel- gives so many powers to the ability to articulate a spects. It would be the centre has equalled solutions opment has identified them. Then our culture clear vision for the coun- Tthe sixth general election the PDP in infamy. APC characteristics of good makes them monarchs. try as well as the policy since the return to civil has been an incubus on governance regimes. We need to change this choices and trade-offs democratic rule in 1999. the people, sucking the , They include state ca- culture. Instead, we need they have made on the Nigeria would be mark- energy of the citizenry pability —the extent to CEOs who are facilitators public’s behalf. ing 20 years of continu- overnight with its gross which leaders and gov- and team leaders. They Compassion. Nigeria’s ouscivilian government failure in various areas ernments canget things should build strong su- leader must have a heart in 2019. It is the longest including primarily the done; responsiveness— per teams. Super teams that cares for people. stretch in which we have economy, welfare, secu- tems, methods and teams. whether public bodies thrive because they have Kindness would make allowed choice,and the rity and the unity of the Managerial competence and institutions respond good leadership, share a him feel the pain and in- people have had a say in country. It is scandalous is a catch-all phrase to to the needs of citizens common goal, trust and sult that poverty throws who governs. how the party that spoke capture this. The man to and uphold their rights; respect team members, at our people and work By May 2019, new peo- so eloquently about the lead Nigeria must have and accountability—the have excellent commu- to drastically reduce the ple would take office in problems with the land some critical attributes. ability of citizens, civil nication, encourage and burden. We are running two tiers of government, has itself become the They apply for the men to society, and the private reinforce each other, are out of time in meeting the the federal and the states. problem of Nigeria. govern the states. sector to scrutinise pub- disciplined and demand Sustainable Development They would be the drivers Having tried many Competence. We need lic institutions and gov- balanced accountability. Goals after failing on most of what happens to most men and parties, I sub- a leader with the capacity ernments and to hold Communicator. A scores with the MDGs. of the federating units mit that the challenge to execute. Execution ca- them to account (DfID leader able to persuade, These are the attrib- of the country. In conse- before Nigeria is one of pacity is what gets things 2006, 22). convince and influence utes I consider critical. quence, there is an ongo- finding capable manag- done at the top. We do Conviction. The leader the majority to follow Dear reader, what should ing debate about choice. ers who would drive the not need a man who doo- must be a visionary with his vision and path is a our next leader bring to Citizens are mainly process of building sys- dles, prevaricates or can- the passion for driving significant attribute of the table, in your view?

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