MARKETS AND COMMODITIES MONITOR News COMMODITIES EXCHANGE RATE FMDQ Close FX outlook: When Oil US $56.91 NSE Close BDC TRAVELEX FX Treasury bills FGN Bonds) $-N400 356 $/N 3M 6M 5Y 10Y 20Y can we expect GOLD $ 1,178.60 39.30 £ N598 N/A 0.00 0.08 0.67 0.02 0.10 0.05 uninterrupted supply COCOA $ 2,261.00 26,251.39 € N510 N/A 305.00 13.48 18.71 16.04 16.51 16.52 in the market? Page 8 FIFTEEN YEARS OF DEFENDING LIBERAL ECONOMIC THOUGHT

NEWS YOU CAN TRUST I ** MONDAY 09 JANUARY 2017 I VOL. 14, NO 262 I GN300 Slashed import GTBank, Okomu, Access, Dangote Cement, tariffs will cut production cost Zenith, top analysts’ stock picks for 2017 – Manufacturers ODINAKA ANUDU & AMAKA ANAGOR-EWUZIE

IHEANYI NWACHUKWU & INNOCENT UNAH ment Plc, and Zenith Bank Plc cent equity market return or available to BusinessDay, even anufacturers and trade are among some of analysts’ N603.68billion value loss in though in the first trading week experts predict that the espite a scaling- picks for year 2017. 2016, many stock buyers are into 2017, the share price of GT- MFederal Government’s back of expecta- Also found in the basket of eagerly searching for investment Bank lost N1.16 from year-open decision to slash import tariffs tions on a number most analysts’ stock picks are clues on some value stocks to level of N24.70 to close N23.54 on raw materials and machinery of listed compa- Flour Mills of Nigeria Plc, Nige- place their money on this year. Friday. will cut production costs, boost nies’ earnings, the rian Breweries Plc, Oando Plc, Guaranty Trust Bank Plc, Kayode Tinuoye, head re- input inflows and rejuvenate Dshares of Guaranty Trust Bank and FCMB Group Plc. resilient in the tier-one bank- search, financials, United Capital activity in Nigerian seaports. Plc, Okomu Oil Palm Plc, Ac- With investors still suffer- ing space, repeatedly occurred Plc, told BusinessDay that if “The inflation we are dealing cess Bank Plc, Dangote Ce- ing from a negative 6.17 per- in some analysts’ stock picks Continues on page 4 Continues on page 47 Weaker demand sees Herbert Wigwe leads interbank foreign most active bank CEOs exchange transactions on Twitter survey ... over 70% CEOs not on drop to 4-month low social network LOLADE AKINMURELE FRANK ELEANYA rading activity in Nigeria’s Spot foreign exchange he chief executive officer T(FX) market between the and managing director of banks and their clients for the TAccess Bank has the most week-ending December 30, active presence on popular so- 2016 stood at US$284.82 mil- cial media network, Twitter, as lion, the lowest weekly turno- over 70 percent of bank CEOs ver since September 16, 2016, Continues on page 47 according to data compiled by BusinessDay. Turnover in the aforemen- Nigeria to start building tioned week also represents Seated L-R: Ben Okoye, executive vice chairman, Brass Fertiliser & Petrochemical Company, with John Goodridge, BP’s head of market- a 62 percent decline from the ing and origination, Europe, Africa and Russia. Standing L-R: Gareth Hodder of White and Case LLP; Sanjay Patel of BFPCL; Mychael railway to decades- $512.59 million recorded the Obaseki, BP Nigeria; Tom Fox, BP London; Abhishank Jajur; Taylor Dejongh; Rema Shrestha and Alex Moulsdale, both of BP London, at the official signing of the $6 billion Methanol Offtake Agreement between Brass Fertiliser & Petrochemical Company (BFPCN) and BP Continues on page 47 Oil International Limited, at the London office of BP Oil International. delayed steel plant Page A11 2 Monday 09 January 2017 Monday 09 January 2017 3 4 BUSINESS DAY C002D5556 Monday 09 January 2017 NEWS Mills Nigeria Plc lost 1kobo in the Analysts at Cordros Capital are GTBank, Okomu, Access, Dangote Cement... first trading week into 2017, from also recommending Cadbury Plc. Briefs N18.49 to close Friday at N18.48. “We think Cadbury is presently Continued from page 1 (LPFO) is set to boost Dangote Cement Plc margins. Its stock ap- Flour Mills of Nigeria half-year under-priced, given that their fun- US jobs growth slows to 156,000 in December results shows that sales expanded damentals are good. The manage- profit from a possible come-back pears to be trading at a rich valua- US businesses added 156,000 of foreign portfolio investments tion”, said Dunn Loren Merrifield by 43 percent to N136billion. ment is always working on branding, “A diversified product portfo- formulation and it has a discount to jobs in December in the last (FPIs) post another round of for- research analysts. release of key economic data eign exchange reforms, GTBank’s lio by Flour Mill should support Nestle’s products. We expect that the “Although the management before Donald Trump is sworn strong long dollar position should of Dangote Cement Plc effected a growth in a challenging year”, market will shift away from Nestle be earnings-positive for the tier- significant price hike of around 39 United Capital analysts said. to Cadbury, given the challenged in as US President. one bank. percent for the Nigerian cement Zenith International Bank Plc disposable income of Nigerians. The amount of jobs created Okomu Oil Palm Plc followed, as market in late August, the com- is another value stock for inves- Moreover, the company has intro- fell from an upwardly revised the company is believed to ride on bination of slower sales growth in tors in 2017. Zenith Bank shares duced new products such as the 204,000 in November and came renewed focus and strong growth the three month ending September gained 2kobo into this year, from Trident sugar-free chewing gum” in below market expectations of in the agriculture sector. The share (relative to the months preceding N14.75 to N14.77. Zenith Bank’s Lafarge Wapco is among pre- 175,000 new roles. price of Okomu Oil steadied at the price review) and significantly nine months results came in strong ferred stocks for the year, as ana- N40.17 into the year 2017. higher fuel costs more than offset with profit after tax growing by 151 lysts forecast that they are going to Apple boss’s salary and bonuses fall percent to N83billion in the nine overcome their foreign exchange “Okomu’s strong sales growth the effect of the upward review in Apple chief executive Tim was mainly responsible for the prices,” according to FBNQuest’s months ended September. chalenges for the year and improve growth in earnings. We believe Tunde Abidoye. Another top pick stock is Ni- on their performance. Cook saw his salary and bonus the strong growth in palm oil sales Access Bank is another value gerian Breweries Plc. “Nigerian “The market has overreacted to slide in the last financial year, was mainly as a result of expan- stock for investors in 2017 which Breweries defensive attribute and the challenges and it is anticipated but his income from the sale of sion plans by the firm. In the past, analysts believe its good asset qual- foray into new low tier beer market that the factors that impeded their shares jumped dramatically. Okomu management expressed ity and strong non-interest revenue should support top-line growth, performance will be reversed in the Mr Cook was paid $8.75m plans to aggressively expand the will support the bank’s earnings, despite foreign exchange chal- first quarter of 2017. This will lead (£7.1m) in salary and bonus in company’s palm oil plantation. making its valuation also attractive. lenges and pressured consumer to improved performance, as the 2016, down from $10.3m the “We also suspect that weaker Access Bank shares gained 41kobo wallets”, United Capital analysts cement sector remains attractive.” previous year. competition from imports due this year, from year open price of said. Nigerian Breweries Plc lost United Capital also made the to foreign exchange devaluation, N5.87 to N6.28. N5.99 in the first trading week of list of stocks that can make inves- Samsung profit surges despite Note 7 battery fiasco 2017, from N147.99 to N142 tors money this year. helped Okomu gain share and Access Bank group’s financial Samsung Electronics has re- boosted its topline”, said the Ju- highlights in the nine months pe- United Bank for Africa Plc “High dividend payout which (UBA) is also another pick for we expect to be sustained makes ported a 50% profit surge in its moke Okeowo-led team of analysts riod to September 30 2016 show guidance for the fourth quarter at FBNQuest. Gross Earnings of N274.468billion analysts who say that the bank’s the stock an investor’s delight” said On an annualised basis, the from N257.590billion in the nine well diversified operations across analysts at Planet capital. despite the fiasco with its flag- nine months sales of Okomu Oil months period of 2015, an increase Africa give it a competitive edge African Prudential is also on ship Note 7 phone. Palm were on course to meeting of 7 percent. and dilute the headwinds in any the recommendation list. The earnings estimate is analysts’ consensus Full Year (FY) Profit Before Tax (PBT) in- particular market. “The stock moved by over 20 higher than analysts predicted estimates of N13.2billion. creased by 19 percent to N72 billion Dangote Sugar is another pre- percent last year and though there and would mark its highest On a nine-month basis, Okomu from N60.4 billion; while Profit After ferred stock for investors. “ The we expect mild profit taking by the quarterly profit since 2013.The sales grew by 41 percent year-on Tax (PAT) also rose by 19 percent to company is a big player in the beginning of the second quarter, South Korean tech giant said market and controls significant we are of the opinion that perfor- year. Profit before tax (PBT) and N57 billion from N48 billion. it expected to post 9.2tn won profit after tax (PAT) advanced by Another favoured stock is Flour market share. The tight foreign mance will be strong as the high exchange situation in neighbour- dividend payout of the previous ($7.8bn, £6.2bn) in operating wider margins of 100 percent and Mills of Nigeria Plc. The inclusion profit for the months from Sep- 89 percent respectively, due to the ing countries opened the market year is sustained.” of Flour Mills of Nigeria in the 2017 tember to December. strong sales growth. stock picks results from analysts’ in those countries to the company. Developments in the global Presco, which also operates in view that significant efforts at do- Earnings growth for the company oil market, liquidity level in the Trump says Toyota will face tariffs on cars made in Mexico the agricultural sector like Okomu mesticating input sources should is tight but better than that of other foreign exchange markets, and rea- oil, is also on the recommendation begin to pay off, thereby enabling consumer goods companies. The lignments in fiscal and monetary Donald Trump has tweeted list of investment analysts. the company to thrive despite company is a market leader and policies will dictate trading pattern that Toyota will face hefty tariffs “Their numbers are good and foreign exchange shortages. Flour therefore, a price maker” said ana- and performance of Nigerian stock on cars built in Mexico for the US Presco and Okomu both outper- lysts at Cordros capital. market in 2017. market if it builds Corollas south formed the market last year. The of the border. earnings potentials are impressive, The president-elect said the as demand for their products are Japanese company would be hit on the increase. There are limited with a “big border tax” if the plan imports of their products because of the foreign exchange issues. The went ahead. high prices of their product are reflected in the impressive margins Chinese fake bank founders jailed for swindling they posted in the last year. They A court in the Chinese city of are currently expanding their ca- Nanjing has jailed two men for pacity to meet increasing demand. swindling customers of their sav- Favourable government policies ings through a fake bank, state also mean that the companies’ media report. bottom line is poised for increase” The men, surnamed Zeng and said analysts at Cordros Capital. He, were found guilty of pocket- Research analysts at Capital ing 435m yuan (£51m; $63m) Bancorp Plc favoured Dangote Ce- from some 400 customers. ment Plc in their top stock picks for 2017. The top-line numbers of Dan- Strike will not stop BA passenger trips gote Cement Plc in its nine months British Airways says all cus- ended September 30, 2016 came in tomers will be able to fly to their strong, though the bottom-line was negatively affected by higher costs. destinations on Tuesday 10 Janu- In just four trading days into this ary and Wednesday 11 January, year, the share price of Dangote Ce- despite proposed industrial action ment Plc lost N6.99, from year open by Unite union cabin crew. level of N173.99 to N167. The airline says all flights to and “New pricing and complete L-R: Gladys Talabi, director, legal, Globacom; Riyad Mahrez, African Footballer of the year (Algeria); Solomon Dalung, sports minister, from London Gatwick and London elimination of Low Pour Fuel Oil and Issa Hayatou, president, CAF, during the 2016 edition of the Glo-CAF awards gala in Abuja. Pic by Tunde Adeniyi City airports will operate normally. Monday 09 January 2017 5 6 Monday 09 January 2017 Monday 09 January 2017 7 8 BUSINESS DAY C002D5556 Monday 09 January 2017 NEWS

NEWS ANALYSIS FX outlook: When can we expect uninterrupted supply in the market?

BISMARCH J. REWANE he exchange rate of N305/$ is neither a re- alistic nor an effective price of the currency Tat this time. This is because you cannot get dollars at this price unconditionally. In the parallel market, the naira is trading at N495/$, whilst transfers are go- ing at N505/$. Any market structure where system that will foster financial the same product is selling at market development and global different prices at the same time integration. He goes further to is described in economics as a point out that the adoption of price discriminating monopoly multiple exchange rates involves market structure. Typically this the use of different exchange rates market is characterized by bar- for different transactions (as is the riers to entry that allow those practice today, my words). Governor Muhammed Abubukar of Bauchi State (l), receiving the 2007-2015 reports from Salisu Lukman, chairman of with influence or connections It usually forms an important the High Power Committee on All Contracts Awarded in the state, at the Government House in Bauchi, at the weekend. to buy in the cheaper market, component of an interventionist e.g. N305/$ and sell in the more or state led economic develop- lucrative market, e.g. N500/$. ment model. The consequences This is what is probably happen- include pervasive state interven- ing right now (round tripping). tion in the economy, financial Nigerian coffee farmers struggle However, before we look repression, restrictive trade re- at the outlook for the naira in gimes and closed capital accounts. 2017, we need to examine the According to Charles, the benefits fundamentals that determine of multiple exchange rates are as peers reap high demand gains largely illusionary (as can be seen exchange rates. We also have in Nigeria today, again my words). World coffee demand is cur- production by a quarter to 49, with cheap funds and market to understand why Nigeria’s ODINAKA ANUDU attempt at unifying its exchange The costs are high in terms of rently above 150 million bags 475 metric tons, according to information. •Distortionary trade regimes, (of 60kg) in 2015 as against 135 government records. More than “Others from Vietnam and rates has proved abortive so far. n spite of high global de- The forex market is a product exchange controls leading to the million bags in 2011. The market 150,000 farmers are involved in even Kenya are enjoying because stunting of the export sector and mand for coffee and the value of the global market of cof- coffee production in Kenya. they have incentives. If we had of policy-making regulatory and commodity being the sec- market player interaction. Many reduced forex earnings fee is estimated at $100 billion. Vietnam earned $2.4 bil- been serious, we would have •Misallocation of resources ond most sought-after be- Nigeria produced 2,100 tons lion in 2015 on coffee export, earned a lot of dollars from cof- fundamentals go into the deter- sides oil, Nigerian farmers mination of an exchange rate. •Lower fiscal revenues and a of unroasted coffee in 2013, a creating jobs for more than 1 fee,” Ganduje said. “We need sup- smuggling boom areI struggling to plant coffee figure that is less than in 1966. million workers. Colombia is the port, and we also need to access These include balance of trade, •Rent seeking activities driv- seeds when peers in Ethiopia, The country recorded no export second-largest supplier of Ara- the market ourselves, because the terms of trade, investment Kenya, Brazil and Vietnam are flows and the international com- en by a complex set of admin- between January and July 2015, bica coffee after Brazil, earning what we have is that traders come istrative controls e.g. Travelex, reaping the gains of high com- at a point Ethiopia, an African $2.2 billion from annual export in and buy directly from farmers petitiveness of the economy. modity demand. There is also the interest rate/ BDCs, etc country with fewer than 100 mil- in 2015. who do not have the capacity What next and outlook “Coffee has always been a lion people, produced 174,000 The demand for coffee is and funds to explore the global inflation differential, which neglected industry in Nigeria. impacts the purchasing power For Nigeria to escape from tons of coffee, earning $1 billion driven by increased consump- market,” he said. this forex trap, the authorities There has not been support from export. tion of coffee in the United States The price of Robusta, Colom- parity of the currency. from the government in terms When a currency is ap- need to understand that there is Brazil, with about Nigeria’s by the Millennial, described as bian and Artaabica species have a need for a properly functioning of funding, provision of fertiliz- population (200m people) youths born between 1982 and risen above $200 per 50 kg bag. propriately priced, it will be ers and land acquisition, which in equilibrium and will have market. A well functioning forex earned $5.6 billion the same year 2000, which share more than one Euromonitor International market allows the exchange farmers in other countries en- while Colombia and Vietnam quarter of American population. said in 2016 that Nestlé Nigeria minimum deviation from the joy,” Ibrahim Sadiq, chairman, real equilibrium exchange rate rate to respond to market forces made $2.6 billion and $2.4 bil- The drought in Brazil, which Plc dominates coffee in Nigeria and reduce market distortions. National Coffee and Tea Asso- lion respectively the same year. used to be the biggest exporter in both retail volume and retail path. When you test the Nigerian ciation of Nigeria (NACOFTAN), case against a number of these Russia and Kazakhstan recently Kenya’s coffee earnings rose until 2016, raised coffee demand value terms with its Nescafé did this and their currencies told BusinessDay in a telephone 17 percent to $254.2 million and price, thus encouraging brand, controlling a 76 per- indicators, it is not far fetched to interview. see why the Nigerian currency sank for a short period and then during the 2013/14-crop season supplies from Vietnam and Co- cent retail value share in 2015. recovered sharply. On the other “Price was down some years due to improved production and lombia. A Taraba coffee farmer, Nestlé SA brands, imported by value is misaligned from its ago, so farmers felt there was monetary policy anchors. It is hand, Venezuela fell into the trap higher prices. Farmers in Kenya Usman Ganduje, told Business- third parties other than Nestlé and has become a basket case. no need planting it. What we benefited from subsidised fertil- Day that Nigeria has a lot of po- Nigeria Plc, make up another also clear why there has been need is government attention,” a slow but consistent erosion of The CBN will need to iser from the government during tential in coffee and can produce eight percent off-trade value •Eliminate or phase out reg- Sadiq said. the period, helping them to raise up to 10,000 tons if provided share of coffee. confidence in the naira. Rational investors and do- ulations that stifle market activity mestic economic agents always •Create a sense of two-way make decisions in their own risk in the market enlightened self-interest and •Reduce its market making Edo set up committee on proposed not because of emotional and role and stop indirect or overt irrational considerations. His- rate determination torically the Nigerian economy, •Increase market informa- LG harmonisation revenue bill and by implication the naira, has tion on the sources and uses of been a beneficiary of oil wind- foreign exchange •There must be liquidity, The committee has January Meanwhile, Edo State com- plore the people of Edo State to falls and a victim of oil shortfalls. IDRIS UMAR MOMOH, Benin History shows that after a wind- transparency and openness 15, 2017 to work out ‘’A bill for missioner of police, Haliru do the right thing and ensure •The CBN as a regulator must do State government on the State Local Government Gwandu, has assured residents that there is sanity. I will enforce fall, the naira remains relatively stable for an average of 5-6 years be firm in dealing with market Friday said it had set up uniform levies, rates, fees and of implementation of the ban on the order to the letter,’’ he said. infractions a committee to fine tune charges Law 2017,’’ and forward collection of revenue by private On his part, Ebonor Macau- before the next oil shock. Im- E mediately after every shock, Forex policies usually com- a proposed bill to harmonise same to the Edo State House of individuals as pronounced by lay, head of local government plement trade and investment revenue collection by local gov- Assembly for due consideration. the state governor. administration, Esan South the government embarks on adjustment measures including policies. The Nigerian govern- ernment councils in the state. Elamah also added that the Gwandu, who made the East, who spoke on behalf of ment will in 2017 strive towards Oseni Elamah, executive bill sought to eliminate cash as disclosure while speaking with other local government councils, a devaluation. However, since 2008 the shocks have become greater coordination of these chairman, Edo State Internal a means of revenue collection newsmen in Edo State Govern- commended the state governor policies, and will move from Revenue Service, disclosed and encouraged the use of Point ment House, said the command for the initiative. more frequent and shattering. The time frame of the shortfalls its current bias for a command shortly after meeting with the of Sale (POS) or revenue scratch would put in place 20 squads Macaulay said the state gov- economy monetary policy state governor, Godwin Obaseki, cards. that would ensure compliance ernment initiative would help has also been much longer and the impact more devastating. towards a mixed economy. I in Benin City, the state capital. According to Elamah, all to the pronouncement of the sanitise revenue collection in the believe that with oil prices at The state deputy governor, revenue consultant, agent or governor. state, saying the proposed har- Outlook for the naira in 2017 The naira under the current $55pb and production back up Philip Shaibu, will head the contractors have been prohib- “I will constitute 20 squads monisation revenue bill system to 2mbpd, the naira will slip in committee while other mem- ited from collecting any form of who will go round and ensure would enable the government market regulatory framework will remain unstable until the the interbank markets to N350- bers are Osarodion Ogie, secre- revenue on behalf of any of the there is diligence and compli- render quality services to the N380/$. It will fall in the parallel tary to the state government, the state government agencies or ance of the ban. You have heard people. market is allowed to operate efficiently. I wish to draw from a market to N520/$ before recov- executive chairman of Edo State local government. the pronouncement and I am The governor, Godwin ering sharply to N425/$. These Internal Revenue Service (Oseni “The committee seeks a sys- sure the people are happy. I can Obaseki, heads of local govern- paper delivered many years ago by Charles Enoch at a seminar projections are based in the Elamah) and three representa- tem that will be transparent, ac- also assure you that the police ment councils, Ministry of Local assumption that the market will tive of local government heads countable and treat Edo people will not rest on its oars. Government and the internal in Abuja. He said that investors were then excited that Nigeria be reformed and that sanity will from the three senatorial district, with dignity in the collection of “Very soon, I will hold a revenue service, attended the return to what is now essentially Elamah said. revenue,” he said. meeting with my DPOs. I im- meeting. was now willing to establish a unified flexible foreign exchange a foreign exchange asylum. Monday 09 January 2017 9 10 BUSINESS DAY C002D5556 Monday 09 January 2017 comment is free COMMENT Send 800word comments to [email protected] The budget and external loans cause of the adverse effect attached to it.’’ Indeed, when the then sharp contrast to the superlative reception aspects of the budget right. This requires Clearly, I did not oppose the loan. It is accorded ‘’foreign accountancy firms’’ dealing not only with figures but also a a highly sensitive and delicate matter. It is Minister of Finance, Chief with whom our government is so much vast amount of data. Fortunately, there are not a subject to be trifled with. Anthony Ani presented enamoured. It was to no avail that our numerous tools at our disposal - ranging J.K RANDLE It may interest you to know that my professional colleagues in the diaspora from econometrics; analytics; computer firm has been tracking Nigeria’s external his annual budget in 1995 demanded to know how much was paid models, financial modelling, to scenario Randle is Chairman/Chief ExecutiveJK loans since the first jumbo loan of U.S. $ for the services of foreign forensic audit planning and algorithms e.t.c. Randle Professional Services Chartered he publicly disclosed Accountants 1billion from the International Monetary consultants and what value was obtained. The assumptions on which the budget Fund [IMF] in 1978 during the tenure of that included in Nige- It bears repetition that the ethics of our is anchored must be realistic, transparent General Olusegun Obasanjo as the mili- profession would not permit us to divulge and sufficiently flexible to accommodate tary Head of State. Nigeria did not need ria’s external debt was an confidential matters in the public arena. unfolding changes. national newspaper recently the loan. Neither did we actually ask for amount of U.S. $1 billion Reticence and circumspection are the It is inevitable that we would have to quoted me as being opposed it. It was meant to be a stand-by credit in watchwords. We must not kill the prospects deal with the perennial contest between to the proposal by the Federal case of need. which was ostensibly bor- of hope and possibility of redemption. fiscal policy and monetary policy. Government of Nigeria to ob- We have over the years catalogued rowed by Nigeria but was Regardless, we must have a Plan B. It behoves the Governor of the Central tain an external loan of U.S. the subsequent loans and the fiasco of actually shared amongst Bank Mr. Godwin Emefiele to guard the A$30 billion. private sector loans that subsequently The intricacies of the external/domes- independence of the Bank and insulate What actually happened was that I metamorphosed into government loans eight prominent Nigeri- tic debts and the budget are like Siamese it from political interference regarding was called on the phone and asked for my and the shambles into which we were twins. Both require meticulous and skillful monetary policy –exchange rate; inflation comments. plunged via the Paris Club and London ans whom he declined to management. While it is true that man- rate and interest rate. The Chairman of the My two text messages regarding the Club debts that resulted in massive docu- name. The funds never aging the budget is not rocket science, United States of America’s Federal Reserve proposed US $30 billion loan were as mentary frauds accompanied by ‘’interest nevertheless it comes pretty close. Par- Bank, Janet Yellen is already preparing for follows: being charged on interest at compound reached Nigeria! Nobody ticularly having regard to the volatility of the threat posed by Mr. Donald J. Trump • ‘’Little drops of water make a interest.’’!! Perhaps we should add that the asked any questions the Nigerian political economy, the budget the President-elect with regard to the mighty OCEAN OF DEBT’’, and ‘’Cement Armada’’ and the detection of must be anchored on a thorough debate of independence of the Bank. Many of our • ‘’The devil is in the details- why rickety ships loaded with sawdust instead about such a the contending demands versus available most eminent economists have vigorously you need to borrow; the terms and tenor; of essential commodities, raw material weighty issue resources; and intellectual/professional argued that monetary policy is the pillar of Annan is the former secretary- what you plan to spend it on; and of course and machinery remain indelible in our rigour derived from intimate experience the economy. Where does that leave our general of the United Nations and a your absorptive capacity as well as the memory. of our nation’s economic history and a Ministry of Finance which is charged with recipient of the Nobel Peace Prize. means and wherewithal to pay back.’’ Indeed, when the then Minister of and the House of Representative over mat- very critical factor that is often ignored at fiscal policy? The answer is co-operation Consequently, there was no basis to Finance, Chief Anthony Ani presented ters such as; our peril- namely the unpredictability of and understanding between President support the allegation in the publication: his annual budget in 1995 he publicly • Fuel Subsidy the behaviour of Nigerians in economic Muhammadu Buhari; The Governor of “However, the concern of many of disclosed that included in Nigeria’s exter- • Joint Venture Cash Calls matters. For example, in most countries, the Central Bank of Nigeria, Mr Godwin those opposed to the loan request is that nal debt was an amount of U.S. $1 billion • Reserve Additional Bonus [RAB] when the price of an item increases, the Emefiele and The Minister of Finance, the Federal Government should be more which was ostensibly borrowed by Nige- • Floating Production Storage demand for it would drop. In Nigeria, it is MrsKemiAdeosun. Also, whichever way circumspect rather than throwing caution ria but was actually shared amongst eight Offshore [BONGA] sadly the reverse. we lean, we must admit that the budget to the wind. prominent Nigerians whom he declined • Abacha loot Right now, the more expensive the would require political tailwind if it is to One of those who share this sentiment to name. The funds never reached Nige- • Nigeria’s cash and other assets U.S. dollar is, the more the demand for it. fly. An essential ingredient of the tailwind is Bashorun J. K. Randle, renowned ac- ria! Nobody asked any questions about in foreign countries Besides, we have to contend with the is public trust. countant and public commentator. such a weighty issue. • Nigeria’s phantom debts [Exter- slew of scandals and corruption which To be continued next week In a chat with The Nation at the week- Apart from Nigeria’s external debts, nal and Domestic]. have gulped huge ‘’Intervention Funds’’ end, he said the country was better off not we have forwarded forensic audit reports The response has been resounding and ‘’Incentive Guarantees’’. Regardless, Send reactions to: accepting any loan at this point in time be- to the Federal Government; The Senate silence and subversive indifference in it is of utmost importance to get technical [email protected] Under the stand of problem is money

pushing and straining, he finally peoples in our society. Let us see among others, is single parenting The second perspective is that succeeded. As the peasant picked perspectives to maximise opportu- skill academy; Nanny for children problem will generate creative up his load of vegetables, he no- nities in problem. and Nanny mobile application for tension. Problem should gener- ticed a bag where the boulder had The first perspective is to believe busy single parent to source the ate creative tension that is able to been. The purse contained many that you are part of solution provid- services of quality nanny. compelled entrepreneur to design VICTOR MAMORA gold coins and a note from the ers. The belief you have will inform valuable and profitable solution. It king.”This is for the person who your association and commitment. Problem of water flooding: will not be easy to create value from Business people system consultant removed the boulder from the Entrepreneurs are solution provid- Poor drainage management problems without tension. & Columnist roadway.” ers. I will list below examples of cost Nigerians about =N=3 trillion Tension is condition of being Dear friend, there is oppor- problems prevalent in Nigeria and in the year 2012. The business op- hold in a state between two or more tunity in obstacle. Our nation possible business opportunities. portunity is to develop drainage forces, which are acting in opposi- is filled with obstacle but what Let me clearly state that another in- monitoring technology and appli- tion to each other. If you will solve do you see? Time and again, dicator for business opportunity is cation for ministries of environ- problem and create value, then be the wealthiest and social lead- change in trends. ment across the country and for ready for resistance. So make your ers in any society are those who Some time change in trend create private estates managers. decisions and move forward. make sense of obstacles and so- problems for people and those who The first best decision requires cial threat. You can help us solve are proactive in providing solution Problem of poor business fi- of you to make the best out of ten- the problem because leadership makes business leadership out of it. nancial accounting: sion is to keep focus on the vision is your calling too. Everybody is Change in age trend, fashion trend, This is prevalent among small of possible solution. a potential leader. Go ahead to technology trend, are to be watched scale business operators. I mean The second decision is to tell n ancient times, a king had solve the problem by starting a out for as opportunities for business. those who haves shops with one the truth about where you are at a boulder placed on a road- company. Here are listed below, problems or two employees. The business every stage of solving problem and way. Then he hid himself and I At a time in Nigeria, when tele- and business opportunities for you opportunity is mobile accounting reaching out for necessary support. watched to see if anyone would communications problem was to develop. application that can help put their I want to encourage you to take remove the huge rock. Some of obvious, many complained about books in proper shape. Also, it is a step now and help solve the prob- the king’s wealthiest merchants the services of NITEL (Nigeria Problem of unskilled gradu- an opportunity for mobile accoun- lem for us. Start with the problem and courtiers came by and simply Telecommunications Company). ates: tant services who move from shop that confronted you. Many people walked around it. It was a problem then but now a The business opportunity: Start to shop helping to manage those are facing the same problem as Many loudly blamed the king business opportunity for the pres- after graduate work place training books at a price. you. Don’t just loudly blame the for not keeping the roads clear, but ent investors. They solved that to prepare an average of about two Problem of poor political im- government but loudly provide the none did anything about getting problem at that level. millions graduates yearly for differ- age: solution. This is your season of op- the big stone out of the way. Then a I want to encourage you to ent sectors of the economy. Build The business opportunity is for portunity. You have the opportu- peasant came along carrying a load have a new perspective to prob- the company where corporate com- those who have interest in commu- nity to shine now. of vegetables. On approaching the lem. Problem is an opportunity panies can source skilled workers. nication, public relations, image boulder, the peasant laid down his to start a new business. There are management to create platforms burden and tried to move the stone different services that can be de- Problem of single parenting: for both online and classroom Send reactions to: to the side of the road. After much rived from problems confronting The business opportunity,training, and consultancy. [email protected] Monday 09 January 2017 C002D5556 BUSINESS DAY 11 comment is free Send 800word comments to comment@businessdayonline. COMMENT Taking back our nation: The one resolution that will matter this New Year as a rapid and wide-ranging devel- There has not been a not been a better time than now to in- while still conforming to relevant opment of our local industries and vest in local capacity, as well as build international laws. Nigerian com- service providers. It will also increase better time than now to or improve relevant production infra- panies and local contractors should the appeal of our local industries to structure. Firstly, due to the FOREX also study the procurement laws and foreign investment, especially when invest in local capacity, scarcity in Nigeria, investors from leverage on existing advantages for the targeted patronage is considered outside the country have the most companies that produce locally. On alongside our considerable market as well as build or im- bang for their buck right now. How- the private side, owners of businesses OBI PETER ADIGWE size, as well as our gateway status to prove relevant production ever, with the recent OPEC deal and should endeavour to stock and rec- sub-Saharan Africa. Medium term the increasing likelihood of a calm Ni- ommend locally made products and Adigwe is a Proponent of Systems’ Theory objectives that this initiative can help infrastructure. Nigerian and an Expert in Policy and Strategy ger Delta, the National FOREX issue services. In order to ensure that ev- achieve include the development may soon be resolved and this win- eryone one does their own bit, shop of local human and organisational companies and local con- dow may soon close. Secondly, policy attendants and clerks should also be here is no doubt that 2016 capacity in various developmental tractors should also study directives from the presidency are trained to identify the source of goods was a difficult year for sectors, as well as the stimulation of increasingly focused on improving and services, as well as endeavour to many Nigerians, on both relevant and ‘fit for purpose’ research the procurement laws patronage of goods and services pro- offer Nigerian products as first choice personal and organisa- to address contextual issues peculiar duced locally. This is part of govern- to customers. Customers, clients and tional levels. During the to the Nigerian setting. In the long and leverage on existing ment’s overall strategy for develop- consumers however represent the Tyear, the country’s economy slipped term, fidelity to this initiative will advantages for companies ing local industries. The implication most important part of the equation. into a recession. This together with ensure that Nigeria leverages on its is that as government programmes In tandem with the resolve to buy lo- the attendant terminations, factory significant population and position that produce locally unfold over the next few years, the cal so as to take back your Nation, you closures, retrenchments, and drop to develop an economy that is not policy milieu will most likely be more need to specifically ask for made-in in living standards occasioned by only self-sufficient in all critical areas, favourable for organisations produc- Nigeria products and services, and the inflation, meant that 2016 was but is also dominant in regional and when they resided in the UK. ing locally, compared to those that even when you are served, you must an ‘Annus Horribilis’ for many. This global politics and policy making. There are however some critics that rely on importation. Thirdly, a review verify by checking the label. New Year however presents an op- From personal experience, I will still insist on making comments of the current administration’s poli- Anecdotal evidence suggests that portunity for ordinary Nigerians like can attest to the quality of made-in- about the quality of Nigerian products cies will reveal that encouraging the in the face of adversity, most Nige- us to take back our country. I posit a Nigeria products in many sectors. I and services. Yes, I agree that there are patronage of local goods and services rians abdicate all responsibility and simple yet powerful New Year reso- bought my first house in Abuja when a few other sectors where more could is one area where there is significant defer to government for both blame lution that will enable us collectively Obasanjo and El Rufai auctioned be done to bring local products and coherence and consonance, amongst and solution. There is however in- pull our country out of the current government houses early in the last services to the highest international various arms as well as levels of gov- controvertible and empirical proof morass and set it firmly on the path decade. The building I bought was standards, but then, without the kind ernment. It therefore means that in that citizen-led initiatives such as the of greatness that I strongly believe literally on the verge of collapse and of patronage I propose, companies terms of patronising local goods and targeted patronage proposed here, that we can achieve. Although it has required rebuilding from scratch. will be hard pressed to make the sort of services, legislation from the Na- can lead to an about-face in national always been my modus operandi, Among the materials my contractors investment that would result in world tional Assembly is likely to dovetail fortunes. The entertainment industry, this year I will make a more deliber- used were Nigerian electrical cables. class quality. Besides, there are now a into policies from The Executive, and has witnessed a paradigm shift from ate and conscious effort to patronise These have lasted almost two de- range of strategies that can be used to vice versa. There is also emerging evi- being foreign-dominated just over made-in-Nigeria products and ser- cades now, whereas my contempo- increase accountability and respon- dence that a number of state govern- a decade ago, to the current setting, vices. I now enjoin all well-meaning raries have reported that the import- siveness, which will in turn help im- ments are developing various initia- where our tastes and proclivities in Nigerians and residents of our coun- ed ones they used have all melted or prove quality of local products and ser- tives along the lines of the resolution the sector are almost totally local. To- try to also make a point of requesting malfunctioned. Another similar but vices. Some of these include increased proposed here. These are just a few of day Nigerian music, film and comedy and ensuring that the products and even more important example re- activity by statutory agencies of gov- the points that Company Executives, is not only hugely patronised locally, services they patronise and commis- lates to locally produced medicines. ernment, review sections of relevant Board Members and Shareholders they are also a considerable foreign sion are local. Anyone who has kids knows that you websites and robust social media en- should consider, if they want to main- exchange earner and now contribute Earlier, I posited that this resolu- do not joke with their health right? gagement in the quality debate. Other tain or increase their market share in to our Gross Domestic Product. What tion, if adopted nationally, would Now fathom that despite the fact that strategies that exist elsewhere, which Nigeria. this means is that it is time enough to rescue us from the recession and en- my children were all born in Europe can be adopted in the Nigerian set- To ensure that government is stop waiting for only government to able us regain our greatness. Some and America, I have always preferred ting to further improve quality include faithful to the initiative being pushed rescue our economy, one simple New of the overarching policy objectives to administer made-in-Nigeria med- mystery shopping as well as ranking by the current administration, Di- Year resolution, taken in our hearts that can be achieved by increas- icines to them. I have so much faith websites and applications. rectors General, Permanent Secre- and in our homes can make our na- ing national consumption of locally and trust in our medicines that in ad- For those in charge of growth and taries and other Chief Executives tion great again. made products and services include dition to when they use our products development strategies for their com- of Government MDAs must ensure a reduction of our chronic depen- here in Nigeria, I have been known to panies and organisations, I also have a that Nigerian goods and services are Send reactions to: dence on foreign exchange, as well take Nigerian medicines for their use, free piece of advice to offer. There has favoured in procurement exercises, [email protected] Rekindling our hope in the milieu of hopelessness Nigerians who were disillusioned his cabinet are just like square pegs in sons why Nigeria’s economy has re- loo while trying to steal into Europe and disaffected with the bumbling round holes. lapsed into recession. As Nigerian’s and America. Yearly, thousands of political leadership of Goodluck His minister of sports is a master economy sinks deeper and deeper Nigerians die in boat mishaps on the Jonathan cast their lot with General of verbal faux pax, who advertises his into recession, he has continued Mediterranean Sea while migrating Muhammadu Buhari. Our electing ignorance and provincial mindset, to heap blames on the immediate to Europe. Those hopeless and hap- him the president of Nigeria was unashamedly. Yet, President Buhari past civilian administration for our less economic migrants had sold informed by our knowledge and has not deemed it fit to relieve him economic woes. Bashing Goodluck off their prized possessions to raise CHIEDU UCHE OKOYE awareness that he has great aversion of his job. Likewise, our minister of Jonathan has become his pastime. money for their deathly journey to for corruption. His public persona of finance is known more for her perfect Trying times like we in today’s Nige- Europe. a whistle-clean reformer helped his articulation of English words than for ria ought to bring out the leadership More so, Nigerians are known he paradox of Nigeria is that political cause, too. But, more im- proffering solutions to our economic qualities inherent in President Mu- and reputed for their long-suffering, it is a materially rich country portantly, APC’s campaign slogan problems. Are our economic prob- hammadu Buhari. forbearance, and love of life while Twhose millions of citizens live of change resonated with us dur- lems not beyond her ken? Oversea- But he has been wringing his encountering excruciating econom- below the breadline. The vast wealth ing that milieu of hopelessness and based Nigerians, who are qualified hands helplessly, and offering us ic hardship and other tribulations. of the country circulates in the hands disillusionment. So, Muhammadu and competent to hold ministerial empty promises that better days But today the story has changed. of corrupt political bourgeoisie, re- Buhari won the 2015 presidential posts, are sidestepped and passed lie ahead of us. Meanwhile, some They are embracing the hara-kiri op- tired military officers, and business election convincingly. over by President Buhari. companies and industries in Nige- tion. Our daily national newspapers tycoons, who have link with people While on the stump, he prom- But President Buhari appears to ria have folded us owing to the eco- are always filled with grisly tales and in the corridors of power. So we op- ised to fix Nigeria’s multifarious be an ethnic chauvinist and religious nomic recession, which has gripped gory pictures of people who commit- erate a capitalist system that is with- and hydra-headed problems like bigot, who sets store by party loyalty, our country. And some banks had ted suicide because they couldn’t out a human face. The gap between corruption, economic problem, in- ethnicity, and religion. That is why his laid off workers. The economic -re cope with the vicissitudes of life. the haves and the have- not is wide. frastructural rot, Boko Haram insur- war against graft is biased in favour cession buffeting Nigeria has come Many people who couldn’t bear the And it is still bourgeoning. gency, and others. of members of the ruling APC party. with the concomitant effect of the shame and pain of living in penury Sadly, our country is trapped in But he seems to be overwhelmed Some politicians who held high politi- skyrocketing prices of food items. committed suicide. the mud of economic backwardness by the complexity and enormity cal posts in the past PDP-led political Consequently, millions of Nigerians Are Nigerians not seized with and technological hiatus, in spite of of our national problems. A politi- administration are standing trials for who are low-income earners are the feelings of hopelessness and disil- its humongous human population, cian jostling for a high political of- corruption while some APC big guns hardest hit by this economic adver- lusionment now? Can anybody vast land mass, many waters, and fice ought to have a programme , who are accused of perpetrating cor- sity. glimpse a light at the end of the tun- equable weather conditions. Nigeria of actions ready, which he would rupt deeds, have not being arraigned, Now, many Nigerians scavenge nel? President Buhari should cease is called the giant of Africa, but it’s implement if he comes into power. not to talk of them giving up their high in the dust and refuse dumps for whining about the financial reckless- a giant with feet of clay. That’s why In Britain and America, their newly political posts, as we expected. The morsels of bread to eat. So feel- ness and imprudence of Dr. Jona- Kwame Nkrumah, a socialist philos- elected leaders named members fight against graft is gaining traction, ings of hopelessness reign supreme than’s administration and execute opher and former President of Gha- of their cabinets soon after being however. And stupendous sums of among us. Nigerians are despair- policies that can pull Nigeria out of na, called Nigeria a big for nothing elected into offices. But that’s not money had been recovered from cor- ing. They fear for the future, and are this economic recession and quag- country. It is a common knowledge the case with Buhari. A discombob- rupt politicians. But is the recovered not hopeful that things would turn mire. He should redeem his image that Nigeria has failed to realize its ulated man, his search for people money injected into our wobbling out for the better under this gov- by engaging in deeds that should re- potentialities owing to our past in- that would fill his cabinet could be and comatose economy to revive it? ernment. So millions of Nigerians kindle hope in our hearts. ept and corrupt political leaderships likened to looking for a needle in a It’s an indisputable fact that Bu- prefer any place outside Nigeria to and dictatorial military juntas. haystack. It took him eon period to hari’s economic policies, actions, Nigeria. Nigerian stowaways in ships Send reactions to: In the last presidential election, form his cabinet. And members of and inactions are some of the rea- and airplanes had met their water- [email protected] 12 BUSINESS DAY C002D5556 Monday 09 January 2017 EDITORIAL

PUBLISHER/CEO Frank Aigbogun CBN: Time to defend the integrity EDITOR-IN-CHIEF Prof. Onwuchekwa Jemie of our institutions EDITOR Anthony Osae-Brown f late, we have its powers to still control the N4.7 trillion - trillion — equal Bank, Janet Yellen is already been shout- forex market from the back to almost 50% of the FGN’s preparing for the threat posed DEPUTY EDITORS ing ourselves door without success. total domestic debt) and in by Mr. Donald J. Trump the John Omachonu True to type, the president clear violation of the Central John Osadolor, Abuja hoarse over President-elect with regard to the open take- has come out of recent to re- Bank Act of 2007 (Section the independence of the Bank. NEWS EDITOR Oover of the monetary policy state his opposition to the float- 38.2) which caps advances to But in Nigeria, the CBN Bill Okonedo powers of the Central Bank ing of the Naira and we have the FGN at 5% of last year’s governor appears to have been of Nigeria by the Nigerian seen the actions being taken, revenues. The Emir further intimidated into surrendering EXECUTIVE DIRECTOR, presidency and ignorant pol- including sending out security described the relationship the CBN to the politicians with- SALES AND MARKETING iticians and how the CBN operatives to arrest Bureau de between the federal govern- out much fight. This is most un- Kola Garuba governor has acquiesced to Change operators and being ment and the Central Bank as fortunate. The governor must the development without forced to sell the dollar at fixed unhealthy. realize that he has a sacred EXECUTIVE DIRECTOR, OPERATIONS Fabian Akagha much of a fight. prices to keep the exchange We need to restate that duty to defend the integrity of We are all witnesses to rate down. it is the duty of the Central such a critical national institu- EXECUTIVE DIRECTOR, DIGITAL SERVICES the various monetary policy This is highly unfortunate Bank governor to guard the tion and history will judge him Oghenevwoke Ighure comments of the president and is giving a very negative independence of the Bank harshly if he fails to or is even impression of the CBN and its and insulate it from political CHIEF FINANCE OFFICER and how the CBN has tallied seen to be actively collaborat- Folashade Odusanya along even when it was hurt- ability to independently deter- interference regarding mon- ing with those who seek to ing the country and leading mine the country’s monetary etary policy –exchange rate; illegally hijack the powers of MANAGER, SYSTEMS & CONTROL to a forex crisis. The polity is policies. inflation rate and interest the CBN. Emeka Ifeanyi also awash with the rumours Recall that late last year, rate. Investors and the market We are not unaware of the HEAD OF SALES, CONFERENCES that the CBN Governor had Muhammad Sanusi II, the generally frown upon political enormous coercive and ma- Rerhe Idonije to sign an undertaking that Emir of Kano and former gov- interferences with monetary nipulative powers of the Ni- in one year the Naira must ernor of the Central Bank of policy decisions and a critical gerian presidency. But that is SUBSCRIPTIONS MANAGER be restored to an exchange Nigeria, weighed in on the bi- component of the job of the no excuse to lamely surrender Patrick Ijegbai rate not exceeding 250 to the zarre economic management head of a central bank is to such a critical national institu- CIRCULATION MANAGER dollar before the President tactics of the federal govern- take active steps to defend the tion to politicians who have no John Okpaire reluctantly permitted the ment and the relationship be- independence and integrity of idea how to determine mon- partial floatation of the Naira tween the government and the the central bank in monetary etary policy. If the pressure is GM, BUSINESS DEVELOPMENT (North) Bashir Ibrahim Hassan in June 2016. As if to confirm Central Bank of Nigeria claim- policy matters. Already, the too much on him, he can do the rumours, the CBN has ing the CBN has been illegally Chairman of the United States the next honourable thing as GM, BUSINESS DEVELOPMENT (South) done literally everything in funding the government (up to of America’s Federal Reserve is done in saner climes - resign. Ignatius Chukwu

EDITORIAL ADVISORY BOARD Dick Kramer - Chairman Imo Itsueli Mohammed Hayatudeen Albert Alos Funke Osibodu Afolabi Oladele Dayo Lawuyi Vincent Maduka Wole Obayomi Maneesh Garg Keith Richards Opeyemi Agbaje Amina Oyagbola Bolanle Onagoruwa Fola Laoye Chuka Mordi Sim Shagaya Mezuo Nwuneli Emeka Emuwa Charles Anudu Tunji Adegbesan Eyo Ekpo

ENQUIRIES NEWS ROOM 08022238495 Lagos 08034009034} 08033160837 Abuja

ADVERTISING 01-2799110 08116759801 08082496194

SUBSCRIPTIONS 01-2799101 MISSION OUR CORE VALUES 07032496069 STATEMENT BusinessDay avidly thrives on the mainstay of our core values of being The Fourth Estate, Credible, Independent, 07054563299 Entrepreneurial and Purpose-Driven. To be a diversified • The Fourth Estate: We take pride in being guarantors of liberal economic thought www.businessdayonline.com provider of superior The Brook, business, financial and • Credible: We believe in the principle of being objective, fair and fact-based 6 Point Road, GRA, Apapa, management intelligence • Independent: Our quest for liberal economic thought means that we are independent of private and public interests. Lagos, 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 Monday 09 January 2017 C002D5556 BUSINESS DAY 13 How to access your retirement benefits under the Contributory COMPANIES Pension Scheme In association with & MARKETS P15 COMPANY NEWS ANALYSIS AND INSIGHT DAPPMA Power plants suffer on commends NNPC on fuel Nigeria’s gas contradiction supply ISAAC ANYAOGU plants, while output from hydro- This translates to an average flared. (NEITI) report on the review of he Depot and Petroleum power plants makes up about 30 daily supply of 945.00 mmscfd of Gas flare rate was 10.49% for NNPC’s monthly financial and Products Marketers As- per cent of total generation. gas to the domestic market and the month of October 2016 i.e. operations report released De- sociation (DAPPMA) has hile 12 power T NNPC October operations 2,978.80 mmscfd of gas supplied 728.70 mmscfd compared with cember 20, 2016 attributes low commended the Nigerian Na- stations could report say out of the 215.43 BCF of to the export market. average gas flare rate of 9.36% gas utilisation in Nigeria to the tional Petroleum Corporation not produce gas produced in, a total of 121.63 This implies that 56.46% of i.e. 669.68 mmscfd for the period absence of gas terms in Nigeria’s (NNPC) for ensuring a hitch- electricity during BCF of gas was commercialized the total gas produced was com- November 2015 to October 2016 PSCs which has forced down by free supply of petroleum prod- off-peak period comprising of 29.29 BCF and mercialized while the balance reports the NNPC. 19.6 per cent gas production in ucts across the country during Wduring the last holiday was due to 92.34 BCF for the domestic and of 43.54% was either re-injected, The Nigerian Extractive In- deep offshore between January the end of year holiday season. gas constraints, Nigerian National export market respectively. used as upstream fuel gas or dustries Transparency Initiatives 2015 and September 2016. Dapo Abiodun , Chairman of Petroleum Corporation (NNPC) DAPPMA, Dapo Abiodun, gave October operations report shows the commendation when he that 43.54% of gas produced was led a delegation of the group’s either re-injected, used as up- members on a courtesy call on stream fuel gas or flared. Maikanti Baru, the Group Man- This has been the trend in aging Director of NNPC. recent times as shown from an “In the past, we were import- analysis of NNPC monthly op- ing 70% of products while NNPC erations report which states that was importing 30%, being the nearly half of gas produced in supplier of last resort which is the country could not be com- their responsibility. They moved mercialised. to doing 50% and by November, The Nigeria Electricity Supply they were doing about 90% of Industry, NESI, citing statistics the volumes. from the National Control Centre, “So we have to come and Osogbo, stated that Afam IV-V, appreciate them because in Geregu Gas, Alaoji National Inte- spite of the constraints that got grated Power Project (NIPP), and them to take on the burden of Olorunsogo Gas plants could not increasing their importation produce a single megawatt (MW) from 30% to 50% and then 90%, on December 25, 2016. there were no hiccups, there Others that could not produce were no queues, there were a single megawatt (MW) on the no shortages. We think NNPC same day, include Odukpani NIPP, should be commended for that”, Okpai, Ibom Power, ASCO, AES, Mr Abiodun stated. Omoku, Rivers NIPP and Gbarain He said DAPPMA was con- power plants. cerned that despite the huge Due to gas constraints, 3,000 investments of its members megawatts of the nation’s power in the downstream, they were generation capacity idle. Nigeria L-R: Raheem Olabode, ED, CMC Connect Burson-Marsteller; Rufai Ladipo, MD/CEO, Agile Communications; Robyn de Villiers, chairman, not able to contribute much generates over 70 per cent of its Burson-Marsteller Africa; Yomi Badejo-Okusanya MD/CEO, CMC Connect Burson- Marsteller and Adefemi Adeniran, corporate communications to efficiency in the system as electricity from gas-fired power consultants at CMC Connect BM workshop on Communications in Lagos. certain operational exigencies have forced them to perform below capacity. More troubles for airport users as NIMET predicts weather deterioration According a statement signed by Ndu Ughamadu, … Airlines to delay, cancel more flights Nguru, Bauchi and Zaria are Asaba, Ibadan, Lagos, Akure, group general manager , NNPC’s expected to experience a fur- Owerri and Port Harcourt Public Affairs, Maikanti Baru IFEOMA OKEKE visibilities across the country Asaba, Jos, Minna, Abuja, ther reduction in horizontal are also expected to still be while speaking to the associa- especially over the north east- Makurdi, Gombe, Yelwa, La- visibilities to less than 1000m under the influence of thick to tion said NNPC was aware of the irlines and passengers ern parts. gos, Akure and Awka. in about 10 hours from time of moderate dust haze (visibility challenges being encountered may be facing difficult The implications of this Consequently, the agency issuance or less. 2-5km) and localized visibility in the subsector, stressing that, Atimes going forward as is that the industry may lose noted that the expected re- He noted that a further re- less than 1000m in the next he was hopeful, appropriate the Nigerian Meteorological more revenue as it realises duction in visibility due to duction in visibility is expected 24hrs.” government agencies would Agency (NIMET) last week an- about N2 billion daily from harmattan dust haze may over parts of the Central Cities It will be recalled that from come to their rescue soon. nounced further weather deteri- ticket sales. Experts say not cause cancellation and delay such as Abuja, Minna, Bida, 25th till 27th of December While thanking the associa- oration, which may lead to more less than 50percent of rev- of flights; saying this is for the Lafia, Jos, Makurdi, Lokoja, in 2016, MMA in Lagos operated tion for appreciating the efforts flight delays and cancellations. enues were lost since the de- safety of air travellers. thick dust haze condition with skeletal flights as a result of the of NNPC to ensure stable prod- The agency said that a fresh velopment Anthony Anuforom, Direc- visibilities of 1000m or less in weather. During the period the ucts supply nationwide during dust is been observed over The agency stated that tor-General of NIMET, said the next 18 hours or less from weather was hazy, no airline the holiday season, Maikanti western Chad and south east- moderate visibility is already that most parts of Northern time of issuance. could fly and passengers were Baru stated that the group was ern Niger republic which will being reported over Maidu- Cities such as, Katsina, Maidu- According to him, “South- delayed with colossal loss of part of the supply chain which further deteriorate horizontal guri, Kano, Nguru, Obudu, guri, Kano, Gusau, Damaturu, ern cities including Enugu, revenue to the operators. made the feat a reality. 14 BUSINESS DAY C002D5556 Monday 09 January 2017 COMPANIES & MARKETS Business Event Price of Kerosene up by 60 % in Kaduna he price of Kerosene, ning at a loss. gallon was selling for between an essential house- “More so, the product is N1,100 to N1,200 and suddenly hold commodity, has scarce. I had to part with extra there was a sharp increase to increased by 60 per money to be able to get the quan- N1,600 a gallon. In fact, in some cent in Kaduna, from tity I needed, ‘’she said. places, it is selling for N2,000. N1,100T a gallon in December, Another dealer, Sammy Bo- “I am urging the govern- 2016 to N1,600 in first week of dam, said that patronage had ment to look into our plight and January 2017. drastically reduced due to the urgently address the problem; Dealers of the product told hike in the price. otherwise there will be no hope the News Agency of Nigeria A consumer, Jamila Abubakar for a better life for a poor man in (NAN) in Kaduna on weekend, said that the sharp increase had this country,’’ she said. that the products suddenly be- made life very difficult for the Another consumer, Amen came scarce and expensive, common man and urged govern- Rabo, said he had turned to which was responsible for the ment to do something about it. firewood because kerosene was sharp increase in the price. “If not because we do not beyond his reach. One of the dealers, . Joyful have an option, nobody will use “I cannot afford to buy kero- Adeyemi, told NAN that she kerosene again. This is because sene, currently selling at N1,600. bought kerosene in December, firewood is equally expensive, I am using firewood as an alter- 2016 at N47,000 a drum and difficult to use and environmen- native, which is a bit cheaper L-R: Julia D. Lantieri, CEO, Alter Ego Project Group, Anna Kuzmina, Director, Alter Ego Italian Division, Larisa sells a gallon between N1,100 tally unfriendly, coupled with the compared with kerosene, with 10 Girenok, Head of Global Communication & PR, Alter Ego Project Group and Michael Owolabi, CEO, IL Bagno and N1,200. accompanying health risk. pieces selling for N100. at the launch of Africa’s first ever Alter Ego Private Atelier in Abuja recently. “Only for the price to increase “But we cannot continue like “Unfortunately for us, 10 piec- to N72, 000 a drum as at yes- this. Kerosene is an essential es of firewood cannot cook three terday. commodity and is becoming square meals for my family a day; “This change forced me to beyond the reach of a common we just have to manage because increase the price to N1,600 a man. kerosene is beyond our reach, ’’ gallon; otherwise, I will be run- “Just some few weeks ago, a Rabo said. Oil steady after gains on Saudi output cuts il prices were little slow production, according to a surprisingly large increase in US changed weekend after Gulf source familiar with Saudi gasoline and distillate inventories. Ogaining nearly one per oil policy. US. crude stocks dropped cent the day before on news that NYMEX crude for February sharply to end the year, the Energy Saudi Arabia had cut production delivery was at $53.69 a barrel Information Administration said, to meet OPEC’s agreement to by 0016 GMT, after closing up 50 with a draw of 7.1 million barrels. reduce output. cents on Thursday. However, stocks of gasoline Saudi Arabia has been curbing Brent crude for March delivery and distillates surged as refiners oil output in January by at least was yet to trade after settling up ramped up production to reduce 486,000 barrels per day (bpd) to 43 cents at 56.89 dollars a barrel. crude inventories, a year-end 10.058 million bpd, fully imple- Prices had fallen earlier on practice to avoid higher taxes. menting OPEC’s agreement to Thursday after data showed a (Reuters/NAN) L-R: Grace Omo-Lamai, human resources director, Nigerian Bottling Company (NBC); Ede Dafinone, Faniran returns as Payporte’s brand ambassador chairman, national executive council of the Nigerian Conservation Council (NCF); Sade Morgan, legal, public affairs & communications director, Nigerian Bottling Company (NBC), and Seye Morgan, CEO, Rihago Auction ayPorte.com, Nigeria’s commitment towards offering this partnership will further Limited, at a funding raising dinner organised by NCF, co-sponsored by NBC in Lagos. e-commerce company the highest quality products strengthen our brand’s image Pof the Year 2016, has an- and services to its customers and help us to reach out to more nounced the return of former with the aim of adding value consumers.” Bassey Added. Big Brother Africa housemate, to their needs. With this as- Head of Strategy and Plan- Tayo Faniran, as its Brand Am- sociation we at PayPorte are ning, PayPorte,Irene Kayoma, bassador. reaffirming our commitment to said,“We are happy to welcome Tayo will play a role in en- providing wide range of prod- Tayo Faniran back to the Pay- hancing PayPorte’s brand aspi- ucts that meets the lifestyles of Porte family. We believe he rations and values through his our target customers - young represents the hip, classic ur- association with the brand’s people who choose smarter ban lifestyle and vibes that our products and promotional and modern ways of living and customers are known for, along activities. desire quality products to meet with his personality and talent. Announcing the new deal their everyday needs” He has been a fantastic partner as brandambassador, the Chief “Tayo has huge acceptance and member of the PayPorte Executive Officer, PayPorte among our target market here family and we believe his com- Global Systems, Bassey Eyo, in Nigeria and outside the ing will help us as a brand in said, “PayPorte stands for its country. We are confident that moving to the new level.”

L-R: German Victor, GM, government & community affairs, Premium Steel & Mines Ltd; Chief Kpomah Solomon, chairman, Udu Local Government Council, Delta State; Prasanta Kumar Mishra, CEO, Premium Steel & Mines Ltd, his Wife Bidyut Prava , and Omene Esther, vice chairman, Udu Local Government Council, Delta State at the presentation ceremony of a fully fitted ultra-modern ambulance and 3 bedroom bungalow to the Udu LGA by Premium Steel & Mines Ltd.

L-R: Anthony Arabome, president/chairman of council; Gbemiga Owolabi, director, human resources, Airtel Nigeria; Sunday Adeyemi, registrar/CEO, Chartered Institute of Personnel Management of Nigeria (CIPM), and Victor Famuyibo, immediate past president, CIPM, during the conferment of fellowship award ceremony at the 48th Annual Conference of CIPM in Abuja. Monday 09 January 2017 C002D5556 BUSINESS DAY 15 COMPANIES & MARKETS How to access your retirement benefits under the Contributory Pension Scheme

STELLA ENECHE

he processing and collection of re- tirement benefits is the last phase of the Contributory PensionT Scheme (CPS). The Pension Reform Act (PRA) 2014 and the Regulations for the Ad- ministration of Retirement and Terminal Benefits, issued by the National Pension Commission make provision for the rules and procedures for retirement and accessing of retirement benefits. The Act stipulates that a Retire- ment Savings Account (RSA) holder shall access his/her RSA upon retirement or attaining the age of 50 years, whichever is later. By this provision, the Law recognises the contractual re- tirement age which an employee has signed with his employer, provided such an age is not less than 50 years. These include the general retirement age of 60 years or 35 years of service in the public sector; the attain- ment of 70 years for Academic Staff in the Professorial Cadre; or 65 years for non-academic Chinelo Anohu-Amazu staff as provided in the Universi- ties (Miscellaneous Provisions) of such include employees who are allowed. These groups may, tirement and terminal Benefits account details for payment of (Amendment) Act 2012. retire, disengage or are disen- with the approval of the Com- which requires that a potential pensions. Such an RSA holder may uti- gaged from employment on the mission, have temporary access retiree liaises with his PFA about When all the monies have lise the balance in the RSA for advice of a suitably qualified to their RSAs by withdrawing an six months to his retirement so as been credited to his RSA, the retirement benefits in two prin- physician or a properly consti- amount of money not exceeding to commence the process early retiree will be required to con- cipal modes. He may use such tuted medical board due to men- 25 percent of the total amount enough. The PFA is expected to tact or be invited by his PFA to balance for Programmed With- tal or physical incapacity as well credited to their respective RSAs. enlighten the intending retiree discuss the methods by which drawal with his PFA for monthly as total or permanent disability If and when this RSA holder on the features of programmed he intends to withdraw his re- or quarterly pensions calculated either of mind or body. Also in- secures another employment, withdrawal and annuity which tirement benefits and thereafter on the basis of an expected life cluded are employees who dis- the Law allows him/her to be are the two modes of withdraw- seek the Commission’s approval span; or to procure Annuity engage or are disengaged from reintegrated into the CPS. ing pension benefits. The RSA is for the payment of such benefits. for life from a Life Insurance employment before the age of In implementing these pro- expected to have been consoli- The whole of essence making Company licensed by the Na- 50 years and are unable to secure visions, the National Pension dated at the point of retirement preparations in advance is to tional Insurance Commission another employment within four Commission issued the Regula- by ensuring that all the compo- ensure that the retiree starts to (NAICOM), with monthly or months of such disengagement tion for Administration of Re- nents are present. These include collect his pension the month quarterly payments. Whichever the accrued pension rights), the following the month of his re- may be the option chosen by the contributions made under the tirement. retiree, he may withdraw a lump Where the retiree opts to pur- CPS (employer and employee Where the retiree opts to sum, provided that the amount portions) and the income gen- purchase retiree life annuity, he left shall be sufficient to procure chase retiree life annuity, he will be erated on the RSA to date by his will be required to obtain quotes a programmed fund withdraw- required to obtain quotes for an- PFA. for annuity from an approved als or annuity for life, in accor- The potential retiree would insurance company which will dance with extant guidelines nuity from an approved insurance be required to provide some be contained in a Provisional issued by the Commission from company which will be contained documents to assist the PFA Agreement to be submitted to time to time; to process his/her retirement the PFA for approval of the Com- The Law further provides in a Provisional Agreement to be benefits. Amongst these are the mission. that an employee shall not be submitted to the PFA for approval Retirement letter issued by the entitled to make any withdrawal employer and the Pay slip or from his RSA before attaining of the Commission any evidence of total monthly This article was first published on the age of 50 years, but give emolument. The retiree is also July 18, 2016. It is being repeated room for a few exceptions. One expected to provide his bank on demand by our readers. 16 Monday 09 January 2017 Monday 09 January 2017 17 18 BUSINESS DAY C002D5556 Monday 09 January 2017 In Association With

Many rupee returns Polishing the floor The high economic costs of India’s Supervisors put off finalising reforms to demonetisation bank-capital rules Disagreement over revisions The benefits of withdrawing 86% of the rupees in circulation remain elusive to Basel 3 cause delay OME banks find existing capital OST econo- requirements too taxing. To no mists might one’s surprise, on December hazard a 23rd Monte dei Paschi di Siena, guess that Sat present Italy’s fourth-biggest bank, voiding the asked the Italian state for help, having Mbulk of a country’s currency failed to raise from the private sector overnight would dent its im- €5bn ($5.2bn) in capital demanded by mediate growth prospects. On the European Central Bank before the November 8th India took this year’s end. Three days later Monte dei abstruse thought experiment Paschi said that the ECB had redone its sums—and concluded that the stricken into the real world, scrapping lender faced an even bigger shortfall, two banknotes which made of €8.8bn. up 86% of all rupees in circu- Plenty of other European banks—in lation. Predictably, the econ- far better nick than poor old Monte omy appears indeed to have dei Paschi, which is overloaded with been hobbled by the sudden bad loans—are grumbling that they “demonetisation”. Evidence of too may eventually have to find more the measure’s costs is mount- capital. They have spent years plump- ing, while the benefits look ing up cushions that the financial crisis ever more uncertain. showed to be worryingly thin, but fear that proposed adjustments to Basel 3, At least the new year has the latest global standards, will require brought a semblance of mon- tion. Consumers, companies tion. Firms’ investment pro- point, to under 7%, from an more. The Basel Committee on Bank- etary normality. For seven and investors all wobbled posals fell from an average of actual rate of 7.3% in the last ing Supervision, which draws up the weeks queues had snaked in late 2016. Fast-moving 2.4trn rupees ($35bn) a quar- full quarter before demoneti- standards, had hoped to agree on the around banks, the main way consumer goods, usually a ter to just 1.25trn rupees in sation. Other factors, such as revisions by the end of 2016. It’s not for Indians to exchange their reliable growth sector, re- the one just ended, according the rise in the oil price and the there yet: on January 3rd an imminent old notes for new ones or de- trenched by 1-1.5% in No- to Centre for Monitoring Indi- surge in the value of the dollar meeting of central-bank governors and posit them in their accounts. vember, according to Nielsen, an Economy, a data provider. after the election of Donald supervisors, to approve the changes, That is over, largely because a research group. Bigger-tick- As a result, corporate-credit Trump, are also at play. was postponed. the window to exchange et items seem to have been hit growth, already anaemic, has Whether the costs of the Anthony Atkinson, a British econo- money closed on December harder. Year-on-year sales at mist and expert on inequality, died on reached its lowest rate in at exercise justify the benefits January 1st 30th. The number of fresh Hero Motocorp, the biggest least 30 years (see chart). depends, of course, on what The amendments are intended notes that can be withdrawn purveyor of two-wheelers, All this amounts to “a sig- those benefits are. In his to reduce the variation in banks’ own from ATMs or bank counters slid by more than a third in nificant but not catastrophic” speech announcing the mea- calculations of risk-weighted assets is still curtailed, but the acute December. impact, says Shilan Shah of sure, Narendra Modi, the (RWAs), largely by restricting their use cash shortage is abating, at A survey of purchasing Capital Economics, a consul- prime minister, highlighted of in-house models. Under Basel rules, least in big cities. managers in manufacturing tancy. Annual GDP growth combating corruption and the ratio of a bank’s equity to its RWAs As data trickle through, so plunged from relative opti- forecasts for the fiscal year untaxed wealth. Gangsters are a key gauge of its strength: if lend- is evidence of the economic mism throughout 2016 to the ending in March have slipped ers are too sanguine about risk, their price paid for demonetisa- expectation of mild contrac- by around half a percentage Continues on page 19 Continues on page 19 Monday 09 January 2017 C002D5556 BUSINESS DAY 19 In Association With

Local difficulties Supervisors put... Continued from page 18 estimated RWAs will be too low and Sub-national currencies struggle to survive their reported capital ratios mislead- ingly high. From Brixton to New York, local-currency initiatives suffer from a lack of liquidity and trust The main obstacle to an agree- ment is the committee’s proposal of UCKED away in a corner of an “output floor”—a lower bound for banks’ RWAs—calculated as a per- Brixton, in south London, centage of the figure churned out by a a rainbow-coloured ATM “standardised” method. The higher the dispenses cash, looking percentage, the tighter the standard: a for all the world like any first version of the proposals suggested Tother. But the notes it spews out are 60-90%; a failed compromise last not pounds sterling. They are Brixton month proposed gradually raising it to pounds (B£). Not to be mistaken for 75% over four years, starting in 2021. silly Monopoly money, the Brixton American officials like the floor, pound can actually be spent, legally: believing that it limits banks’ ability to the currency, which has a fixed one- play games with the rules. European for-one exchange rate with sterling, is banks and officials don’t. Both the accepted at over 150 local shops and Association of German Banks and the businesses. It can even be used to pay Bundesbank, for example, want no local taxes. floor at all. They argue that internal Launched in 2009, this is one of models make capital calculations many such initiatives. Local currencies more, not less, sensitive to risk. have been adopted in other towns and America’s banks would be little cities in Britain, such as Bristol, Exeter affected; several European lenders and Totnes. Elsewhere, examples could be stung. That is partly because include the eusko, used in the French schemes also claim environmental from two decades ago, says its founder, to deal with two parallel currencies America has already installed floors in Basques; BerkShares, used in western benefits: stronger local businesses Paul Glover. imposes transaction costs—and those its domestic rules—and, Americans would add, its banks shaped up faster Massachusetts; and the Ithaca Hour, cut transport distances and carbon Local currencies face three hurdles. wanting to back local businesses can after the crisis. Europeans retort that it in Ithaca, New York. Barcelona plans emissions. First, they are relatively illiquid, being easily use the national currency. also reflects transatlantic differences an experiment in 2017. Such schemes But local currencies have a poor accepted only at willing local busi- All of which helps explain why in business models. European lenders aim to boost spending at local retail- record. Of over 80 launched in America nesses. They are, in effect, a form of local-currency circulation in most of tend to keep more residential mortgag- ers and suppliers, by encouraging since 1991, only a handful survive. self-imposed economic sanction, these places is very low. Just B£100,000 es on their books than American banks, the recirculation of money within a Elsewhere, the Guardiagrele simec narrowing the range of choice for ($123,000) circulates, for example, in which often sell them on; they also lend community. Because the currency in Italy, the Toronto dollar, the Stroud consumers and businesses. Second, an area of 300,000 people. That is too more to companies and for project is worthless outside its defined geo- pound and others are languishing or local-currency schemes suffer from a little to have much of an economic finance. All this may carry heavier risk- graphic area, holders spend it in the are already defunct. Even the Ithaca trust deficit: they are not backed by the impact one way or another. The odd- weights under the revised rules. neighbourhood, thus creating a “lo- Hour, the most hyped “success”, has central bank, so holders do not want to looking notes, however, do make good Officials are still aiming for agree- cal multiplier effect”. Backers of the seen its circulation fall precipitously risk having too much. Finally, having souvenirs. ment in the first quarter of 2017. That probably means fixing a floor, but how high? Omar Keenan and Kinner Lakhani, of Deutsche Bank, estimate Many rupee... most controversial. Now that Continued from page 18 that a 75% floor would increase the the demonetised bank notes RWAs (and hence reduce the capital and profiteers with suitcases are worthless, the govern- ratios) of 26 of the 34 listed European full of money would be left ment is intent on in effect banks they cover; at 60%, the number stranded. But reports suggest appropriating the proceeds. drops to ten, mainly in the Netherlands The procedure requires tram- and Nordic countries. that nearly 15trn rupees of Phasing in the rules would give the 15.4trn rupees taken out pling on the credibility of the Reserve Bank of India (RBI), banks time to adapt. Under the time- of circulation are now ac- table envisaged by the committee, counted for. So either the rich the central bank, which must they would have until 2025—almost weren’t hoarding as much first agree to dishonour the two decades after the world’s financial “black money” as was sup- promise, on all banknotes, system started to crack. If the stand-off posed, or they have proved to “pay the bearer” the value. continues, the repairs will take even adept at laundering it. The If it does so, “extinguishing” longer to complete. Indian press is full of tales of the notes and its liability household staff paid months for them, it can transfer an in advance in old notes, or of equivalent amount to the bankers agreeing to exchange government budget. vast sums illegally. With so much cash handed Fans of demonetisation in at banks, the amount re- point to three beneficial out- mitted to government by the comes. First, banks, laden RBI might amount to perhaps with fresh deposits, will lend 0.2-0.3% of GDP. Proceeds this money out and so boost from a tax-amnesty scheme the economy. Big banks cut for cash-hoarders may swell lending rates this week (quite the figure. Even so, it will not possibly nudged by govern- be enough to justify the costs ment, the largest shareholder of demonetisation—or even, balance-sheets of many in- something mentioned at the perhaps, the damage to the of most of them). But their dustrial customers. outset), as one reason for lending recently has not been reputation of the RBI, which Second, Indians will move demonetisation. Progress is already facing questions constrained by a lack of de- from living cash in hand into towards getting Indians to posits, so much as by insuf- about its independence. But the taxed formal economy. pay for things electronically is having imposed the costs, Mr ficient shareholder capital Mr Modi has recently pro- indeed being made, but from to absorb potential losses, Modi will be keen to trumpet moted the idea of a cash- an abysmally low base. whatever benefits he can find. and by the over-borrowed less, or “less-cash”, India (not The third upshot is the 20 BUSINESS DAY C002D5556 Monday 09 January 2017 In Association With In Association With

SpecialA life less report: sweet Oil Nestlé looks for ways to boost stale growth as consumers snub unhealthy Its fightback includes chocolate with lower-calorie “hollow” sugar crystals, and healthier frozen food

ARGE food companies have the usual stuff. It will begin to put the long been among the world’s new ingredient in its chocolate in 2018. most solid, with reassuringly It is also proud of changes to the mil- consistent returns even in lions of frozen dinners it sells every week hard times. None would seem in America. Shoppers had been avoiding Lsteadier than Nestlé, based in the Swiss the frozen-food aisle. Nestlé first tried town of Vevey, on a lake near snowy discounts, and then in 2015 introduced peaks. For its 150th anniversary in 2016 new versions of its Lean Cuisine prod- it opened a new museum filled with ucts, stripping out unpalatable ingre- corporate heirlooms: the first written dients and replacing them with organic notes about a new product called milk ones. At Stouffer’s, another frozen brand, chocolate, laid out in black cursive; an Nestlé decided to target men with easy, old tin of Nescafé, used by soldiers as protein-packed meals that are more a stimulant in the second world war; nutritionally valuable. It worked—its and an early can of Henri Nestlé’s infant frozen-food sales in America grew faster. formula, which in 1867 saved the life of a In November 2015, they were 6% above premature baby. what they had been a year earlier. But It has come a long way since then. Bernstein’s Andrew Wood points out It sold goods worth nearly $90bn in 189 that the revival of frozen food now looks countries in 2015. Of the 30,000 cups of wobbly again. coffee sipped around the world each Nor is Nestlé ignoring 3G’s strategy second, Nestlé estimates, one-fifth are entirely: it is trying to trim expenses. “We cups of Nescafé. But the industry it are very much in an investment position, presides over is in upheaval. On Janu- not in a cost-cutting exercise,” says Mr ary 1st a new chief executive, Ulf Mark Roger, “but that doesn’t mean that we Schneider (pictured), took over. He is don’t want to be cost-efficient in what we the first outsider to get the top job since do.” One effort, which includes trimming 1922, and his background—running a food, has become harder. Mr Schneider waste at factories, is credited with sav- health-care firm, not selling chocolate will have to master online ways to mar- ing about SFr1.5bn ($1.5bn) a year. Last bars or frozen pizza—suggests the main ket and deliver its well-known brands. year Nestlé announced organisational source of worry for the business. The firm needs to coax customers to changes, such as consolidating procure- More and more consumers are pay more for premium products as ment, which will save about SFr2bn each snubbing packaged food’s sugar, salt ordinary ones get commoditised, and year from 2020. and unpronounceable preservatives. discounted by firms such as Germany’s Whatever else Mr Schneider has on Meanwhile, swarms of smaller firms, Lidl and Aldi. the menu for Nestlé, radical changes may emboldened by the ease of peddling The firm can still boast impressive be somewhat limited by the fact that so goods online, are touting supposedly staying power—its global market share many of those who built it into what it is healthier options. From 2011 to 2015 across its entire range of products has now are sticking around. Mr Bulcke is big sellers of consumer-packaged goods, remained near 20% for the past decade. expected to become the firm’s chairman. mainly food and drink companies, lost François-Xavier Roger, Nestlé’s chief The outgoing chairman, Peter Brabeck- three percentage points of market share financial officer, points out that the Letmathe, a former Nestlé chief execu- in America—a lot in the industry’s con- group’s sales growth in the first nine tive, may become honorary chairman. text—according to a study by the Boston months of 2016 was among the fastest Mr Bulcke, for one, seems sure that the Consulting Group, a consultancy, and of the top ten biggest food and drink company should maintain its emphasis IRI, a data provider. companies. Yet a detailed examination on the long term. He taps his hand on As super-sized companies swat at of its position by Sanford C. Bernstein, a the table, rattling some Nespresso cups, such tiny attackers, another foe is gaining research firm, shows that when growth as he insists that growth is still the key. ground. 3G, a Brazilian private-equity from acquisitions is excluded, it lost firm, likes to buy big, slow-growing share in all but three of its top 20 product food and drinks companies and slash categories between 2007 and 2015. Some their costs. Targets have included Kraft of its core offerings, such as bottled water and Heinz, two giants which 3G helped and single-serve coffee, fared the worst. merge into one group in 2015, as well as (Keurig, Nestlé’s arch-rival in coffee several of the world’s biggest brewers. pods, slurped share in America.) the outgoing chief executive and likely unit called Nestlé Health Science, for Other food companies are scrambling to Such results are likely to attract par- new chairman. He and his colleagues example, sells nutritional products for make cuts of their own, lest they become ticular censure from investors because of say that investment in health and related medical needs, such as vitamin-packed 3G’s next meal. That has prompted a Nestlé’s past heavy emphasis on growth innovation will produce strong growth drinks for the elderly and for cancer debate over whether such cuts wreck and market share which sometimes for years to come. Mr Schneider, who patients. It contributes less than 5% of firms’ growth prospects even further, or came at the expense of lower profits. used to run Fresenius, a German firm revenue. whether, in fact, they are best off wring- In 2015 its operating-profit margin was that offers kidney-dialysis products The firm has a research institute de- ing out profits and accepting that robust 15%, better than the 13% at Danone, a and services, will certainly emphasise voted to studying food’s role in the man- expansion is a thing of the past. French competitor, but far below the that message. Nestlé differentiates itself agement and prevention of disease—for Nestlé is not immune to such pres- 21% at Kraft-Heinz. Shareholders in from 3G, with its keen focus on cuts. Mr example, better understanding nutri- sures. In recent years it has often missed the firm are waiting to see whether Mr Roger says he respects what 3G does, but tion’s ability to promote brain health. It its goal of 5-6% sales growth. Excluding Schneider will shake things up. Some that “they have a strategy which is very may deliver growth but probably only in acquisitions, its numbers have not met want him to sell off businesses that different from ours.” the long term. Nestlé has also invested in investors’ expectations for 11 of the past seem most at risk of long-term decline, Still, few observers would call Nestlé young drugs firms, including one that is 17 quarters. In the most recent quarter, such as frozen food, as shoppers look a health company. Many of its products testing a treatment for ulcerative colitis. the firm registered organic sales growth for fresher fare. are perfectly healthy, including bottled More immediately rewarding may of 3.2%. Food for life? water and coffee. Many are not—milk be its efforts to make best-selling but Changing consumer tastes explain For now, Nestlé is defiant. “We chocolate and ice cream, to name but unhealthy foods a bit more wholesome. some of these shortfalls. So does a shift- started 150 years ago having a product two. And for now, the purest forms of In November the company said it had ing retail landscape. Managing a giant that actually—there’s symbolism there— Nestlé’s focus on health contribute created hollow sugar crystals that taste portfolio of brands, from KitKat and Nes- saved the life of a child,” says Paul Bulcke, relatively little to its sales. A business sweet but contain fewer calories than presso to DiGiorno pizza and Purina dog Monday 09 January 2017 C002D5556 BUSINESS DAY 21 Markets Intelligence Stocks Currencies Commodities Rates + Bonds Economics Funds Week Ahead Watchlist P.E

What’s driving Forte oil’s 116 Nigerian lenders may issue Marker Chatter and Flashbacks percent rally in 2 wks? bonds in 2017 to shore up on our calls capital Page 22 Page 23 Page 23 Analysis: ECONOMICS + FINANCE SHORT TAKES BOND ISSUANCE $430bn Nigeria plans to raise N340 These three stocks just billion to 430 billion ($1.12 billion to $1.41 billion) of local-currency bonds during the first quarter, the Debt Management Office said on Friday. The government of Africa’s big- gest economy has proposed a 2017 joined NSE 30 budget deficit of N2.36 billion for this year. The government hopes to fund it by borrowing N1.254 Conoil Plc: One year stock price trillion domestically and N1.067 BALA AUGIE trillion abroad. But the government has al- he Nigerian ready struggled to fund the 2016 Stock Exchange budget after a planned Eurobond released half sale and World Bank loan were year review of delayed. its major indi- ces.T BMI will take a look at EXTERNAL RESERVE reasons behind the inclu- sion of these stocks and the implication for investors. $26.15bn The NSE-30 and NSE In- There has been a steady dustrial Indices are modi- improvement in the country’s fied market capitalization current account balance as the index with the numbers of recent report by the Central included stocks fixed at 30 Bank of Nigeria (CBN) showed and 10, respectively. The that reserves had grown to Stocks are selected based $26.094 billion, signifying a on their market capitaliza- slow but steady improvement tion from the most liquid in the country’s current ac- sectors. count balance. In its latest review, the The growth in reserve was Nigerian Stock Exchange driven by the relative calm in the Nigeria Delta Region dropped off Diamond that was oil production rise. Bank Plc, Fidelity Bank The tranquillity also resulted Plc, and Sterling Bank Plc in improvement in foreign and included Conoil Plc, from accessing official for- margins increased to 48.55 company’s share price has of firms profit dipped by exchange earnings despite Okomu Oil Plc and Presco eign exchange market. percent in 2016 from 36.90 been growing in the past 20.34 percent to N510.73 forex scarcity. Plc. They are among the few percent the previous year. one year. billion while 7 of them re- It is unsurprising that firms that outperformed Net margins moved to Based on Bloomberg corded a cumulative loss of T-BILL AUCTION Conoil was included the the ASI NSE throughout 38.22 percent in 2016 from estimates, the company’s N140.19 billion as stated in index give its ability to last year and their expan- 28.38 percent last year on shares are trading on a cur- their third quarter results. record double digit growth sion plans signals share the back of an aggressive rent P/E of 7.16x (vs c.30x These firms make up N147.48 bn in profit and a steady divi- holders will reap bumper expansion in oil palm plan- for the consumer goods 87.50 percent of the total Nigeria’s central bank raised N147.48 billion ($484 mln) at a dend payment with an dividend and value of the tation. names). market capitalization of treasury bill sale on Wednesday, attractive yield. firm maximized. Okomu Valuation Okomu share price 9.02 trillion. higher than the N83.24 billion naira For Okomu and Prese- Oil, a major player in the Presco’s share price close at N40.17 while the The unimpressive per- it originally advertised, and yields co, the currency woes was industry, had third quarter closed at N40 as of 1:30 stock has gained +28.08 1 formance was due to a remained unchanged at the auction. a boon for these two firms EBITA surge by 83.30 per- pm on the floor of the ex- yr Return, compared with shortage of dollars, decrep- It sold three-month paper at 14 percent to raise N39 billion and as customers patronised cent to N5.33 billion while change. while P/E multiple stood it infrastructure, a weak offered 17.50 percent for six-month them because the central net income spiked by 89.50 One year return (1yr at 9.71x. currency and attacks by bills which fetched N23.02 billion. It bank stooped importers percent to N4.17 billion. Return) has gained +24.89 Last wasn’t rosy for the the Nigeria Delta Militant paid 18.68 percent for the one-year of 41 items of the product The company’s EBITA percent, which means the NSE 30 Index as the profit on oil facilities. bill worth N85.46 billion.

BusinessDay MARKETS INTELLIGENCE (Team lead: PATRICK ATUANYA - Analysts: BALA AUGIE, LOLADE AKINMURELE & INNOCENT UNAH, Graphics: GODWIN OKAFOR ) BMI provides in-depth analysis and data on industries, companies, stocks, currencies, fixed income/credit, economics, regulation and factors that influence investor’s decision-making Email the BMI team @ [email protected] 22 BUSINESS DAY C002D5556 Monday 09 January 2017 Markets Intelligence

BIG MOVER FICC What’s driving Forte oil’s 116 Nigerian bond yields percent rally in 2 wks? rally to 20-month high ...Bid to cover collapses to 0.3 on 5-year

LOLADE AKINMURELE ing space for debt servicing is spurring speculations that n a bid to move inves- yields on longer-term debt tors to the long end of its will surge higher so as to be yield curve to have some attractive enough for inves- wiggle room for debt ser- tors,” one fund manager told vicing, Nigeria offered BusinessDay. yieldsI as high as 16.24 percent Kemi Adeosun, the Finance and 16.43 for debt maturing minister noted in the fiscal in 2026 and 2036, the highest road-map that the country since March 2015. would rebalance its public The country’s yield curve debt portfolio with increased has been inverted in the last external borrowing to offset five months, as short-term high domestic borrowing costs. debt, like Treasury bills, re- Nigeria plans to raise N1.25 turned higher rates, at 18 per- trillion locally and N1.06 tril- cent, compared to long term lion externally, as stipulated in rates that hit a peak of 15 per- its 2017 budget. cent in November. Although yields on 10-year “When you close the year and 20-year bonds were at- by offering higher yields on tractive enough for investors, long-term debt paper, it is a Nigeria’s five-year bonds, at signal that it may surge further 15.8 percent, returned under- in 2017 as government will try subscribed as the bid to cover to incentivise long-term inves- ratio collapsed to 0.3. tors so as to buy time to meet Traders said investors de- its debt obligations,” Tajudeen manded 18 percent for the Ibrahim, head of research at 5-year bonds which was above investment firm Chapel Hill the mid-point at which the Denham said. Debt Management Office Fund managers who spoke (DMO) wanted to issue them. to BusinessDay said they ex- The DMO ended up raising pect 10 and 20-year bond N69.2 billion ($227 million) in yields to spike in 2017, as gov- bonds maturing in five, 10 and ernment compensates long 20 years’ time, N25.8 billion term investors, while attempt- less than the N95 billion it had ing to lure the short-term wanted. investors to make longer com- “It gives a sense that inves- mitments. tors are not so confident of the “The country’s 2017 fiscal country’s macro-economic road-map, which indicates that fundamentals in the next five the country would extend its years,” one bond trader who debt maturity to create breath- did not want to be named said.

PATRICK ATUANYA be deployed to refinance Relative Strength Index existing short term com- (RSI) indicator, which sig- hares of power mercial bank loan obliga- nals a pull-back, is immi- and petrol mar- tions and to finance its nent. keter Forte Oil retail outlet expansion. Fundamentally if the (FO) which trad- Forte Oil stock has been company can refinance its ed at 116.24 per cut in half in the past year short term debts with bond Sshare as of last ticker on as it deals with surging proceeds it should bode Friday is 127.21 percent finance costs and cost of well for the bottom line go- above the 52 week closing sales which led to a 35 per- ing forward. low of 53.7 set two weeks cent slide in net income as The company paid N3.5 ago on Nov 30, 2016. at Q3, 2016. billion to creditors as inter- Forte Oil Plc recently Should you buy FO est expense on bank loans raised N9 billion from the here? and overdrafts as at the capital market to support Looking at technical third quarter of 2016. its operation and drive its analysis Forte Oil has just We believe Forte Oil will expansion strategy. The blown past the 50 day mov- consolidate at these lev- bond is a 5 year fixed rate ing avergage which had els for a while before it issue and the first series served as resistance for attempts to move higher of its proposed N50 billion most of the year (see chart). again. bond issuance programme. The stock is however at Investors should wait for According to the compa- overbought levels on the the pullback. ny, the funds raised would Monday 09 January 2017 C002D5556 BUSINESS DAY 23 Markets Intelligence

ANALYSIS: FINANCIALS Nigerian lenders may issue bonds in 2017 to shore up capital Nigerian lenders: Bond issued in 2016 help increase lending. BALA AUGIE Wema Bank, a mid tier lender ore Nigerian plans to raise N20 billion ($65 banks may pa- million) bonds to finance the con- tronize the fixed struction of new branches. income markets Nigerian banks are grappling next year in or- an economic downturn as assets Mder to shore up capital and finance quality is getting poorer on the expansion plans after the current back of exposure to the oil and gas macroeconomic headwinds made sector. NPLs have approached the the equity market unattractive. amber level while huge write offs Lenders are already tapping are overwhelming profit. into the international bond mar- Analysts say it is expected that kets as the total planned issuance in the period of negative credit in 2016 stood at N138.62 billion cycle, where many businesses are ($454.54 million), data gathered by unable to pay interest on loans BMI shows. borrowed, lenders revenue earn- Analysts say such issuance by ings will receive a beating. banks will strengthen balance Nigeria’s economy is in its worst sheet and the ability to with stand recession in 25 years on the back the shocks caused by systematic of a 40 percent fall in the price of risk. oil and a severe dollar shortage. The current macroeconomic The economy contracted by 2.20 headwinds have implication on percent in the third quarter of asset quality of banks capital. Source BMI Research the year while the IMF forecasts Industry NPLs is in excess of GPD will shrink by 1.70 percent 12.0 percent with impairment 2 capital for banks and we may of a (N91.50 billion) $300m Euro- plete Tier II bond raising of at least by 2016. eating deep into banks earnings likely see more of the banks ex- bond which the bank promised N7.5 billion ($24.50 million) which A currency control imposed by and profitability as well as capi- ploring this option to up capital to use part of in refinancing its will help deleverage the balance the FG caused capital outflow as tal adequacy, according Robert adequacy going into 2017,” said $350 million Eurobond which is sheet. investors fled fretting that a sud- Omotunde Analyst at Afrinvest Omotosho. maturing in July 2017 as part of a United Bank for Africa (UBA), den devaluation of the currency West Africa. A breakdown of the aforemen- US$1 billion global medium term a tier 1 lender said it had raised would lead to loss of significant “Debt capital raising by way tioned figure shows Access Bank note programme. N20 billion ($65 million) in debt investment. of bond issuance qualifies as Tier Plc, a Tier lender, in October, 2016, First City Monument Bank to strengthen its capital base and successfully completed the raising (FCMB) Group Plc plans to com-

BMI BRIEFS Marker Chatter and Flashbacks on our calls PATRICK ATUANYA Call: Two weeks ago on MARKET CHATTER December 5th we said about major listed Ni- Mobil “We believe that gerian beer and while there is more upside beverage maker to close the deal acquisition Awill be coming to valuation gap, investors who the market pretty soon to have not already bought raise funds in a rights issue. the stock may wish to avoid While Equity prices have chasing it here. The easy collapses in Nigeria in the money has already have past two years stocks have been made on this one.” been in a Santa type rally for Verdict: Mobil Oil Nigeria the past few weeks which PLC (MOBIL: LAG), has sold may have encouraged the off by -20.65% since its 52- proposed issuance. week high of 340.00, set on Equity markets on Friday Dec 05, 2016. eked out a further gain of Investors should keep an 0.56 percent on Friday. eye out for the 50 day mov- Similarly, the Market Cap- ing average (near N213 per italization gained N52.07 bil- share) for a potential entry lion, or 0.57 percent to close point. at N9.14 trillion. Call: On November 21 Gains were largely led by we wrote that Stocks had ETI (+7.98%), CCNN (+4.95%), entered oversold territory Union Bank (+4.59%), Dan- noting that the “Market is gote Cement (3.02%) and currently trading at its 27- Oando (+1.17%). week low and has posted a FLASHBACK consistence 5-week bearish We have made some calls streak. according to its Relative happened in January, stocks rallied 4.7 percent since on BusinessDay Markets In- The broad market is now Strength Index (RSI), which rallied about 15 percent to November 21, closing at telligence (BMI) and it is only in oversold territory, the first is now below the 20 mark the 26,000 points mark.” 26,707.01 points on Friday. fair to once in a while look time since January this year, (see chart).The last time this Verdict: Stocks have back at what we said. 24 BUSINESS DAY C002D5556 Monday 09 January 2017 Monday 09 January 2017 C002D5556 BUSINESS DAY 25 CEO CEO INTERVIEW INTERVIEW Leadership, Strategy, Innovation, Style, Corporate Culture ‘Printing industry can generate huge funds, if properly harnessed’ The Nigerian printing industry is an enormous and promising industry suffering from serial challenges. BABATUNDE MARK-ANTHONY, CEO/managing director of JPAAC Printing and Packaging Limited takes a critical look at these challenges and other issues the printing sector is grappling with in this interview with PETER OLOWA, TELIAT SULE and PETER EHIGIATOR. Excerpts:

n the last few years, how has the government treated stakeholders in the printing industry? TheI Nigerian printing industry has a body that is called the Chartered Institute of Professional Printers of That material I gave Nigeria, (CIPPON). Over the years, to my graphic artist, it is like either the government does not know the importance of the the company that printing industry, or the ministers are not interested in the sector. As brought the work was a pioneer member of the institute, importing it before, we have had series of meetings with the previous ministers to highlight but now they can no the challenges facing the industry. Nigeria is in recession today, longer do so because and people are talking about diver- of the high exchange sification in agriculture and other sectors, but nobody seems to be rate. They brought the talking about the printing industry. This is an industry that can work here based on generate a lot of funds too; it can recommendation“ and save this country a lot of money. If you care to know, there is noth- they get the same result ing in this business that is locally sourced for. In printing, everything they get when printed is imported. Why is the govern- outside the country ment not looking into it? In fact, a nation without paper is no nation, because that is a major source of before, but right now they can no How many printing firms do we Paper Manufacturing Company in round and buy the paper mills and are facing in the industry. It also goes can compress the same machines reduce it to 65 - 70 and still label it information; information that goes longer do so because of the cost have in the country and can they Akwa Ibom State and Iwopin Paper make them work? beyond dollar exchange; the govern- and make them smaller sizes; you 80 grams for people to buy. But if down the record. Why are we not of importation and high exchange handle demand? Mill in Ogun State. The Federal Gov- The paper mill is not a business for ment needs to stop this anomaly in the will still get same result. you go there yourself, they will give paying attention to the industry? rate. They brought the work here It is not the question of the number of ernment invested so much in these an individual. It is expensive and it is printing industry and other sectors too. you the type of quality you want. I was listening to the minister of fi- based on recommendation and printing outfits we have. Our problem three companies. The Nigerian Paper government that can own a paper mill. Apart from China, India and school certificate, I will make sure ate the machines. If I am not satis- nance, Kemi Adeosun recently. While they get the same result they get is putting a square peg in a round Mills can be compared with any mill I know all the paper mills have been Is it true that most of the machines Germany what other countries What kind of training does one that you continue your education fied within the five years of training being asked a few questions, she ite- when printed outside the country. hole. If you have five and they all have in Brazil. If you are a staff of that sold since five years ago, but where are used here are from Germany? does Nigeria import printing need to become a professional in while you are working here. There that you can now handle printing mised what could be done to revive the capacity, they will deliver. But the company you do not go out looking they today? I think those that bought Before, the Germans dominated the machines from? the industry? are some of my staff who are doing work effectively, I will extend it to the economy and she mentioned What are the different segments question again is, has the government for anything. They had standard them must have realised now they printing equipment industry. But as of Brazil and United Kingdom also I must be very honest with you; the their part time programme in the six years. An illiterate can never be that the era of printing flamboyant in the printing industry? made an effort to see that we are not hospital, school for staff children, were mere liabilities; otherwise, they today, China, India and Brazil to men- produce good printing machines but industry is backward in so many higher institution. I encouraged a good printer. What is the need of brochures is over. This is because the We have commercial printing, like printing from outside the country? clubs, and so on. The same also goes should have been producing. tion a few, are also into manufacturing majority of the materials we use as at areas. Long before now, people and gave them the opportunity to an operator who cannot read? How government wants to save cost, which those who print invoices, receipt Take the minister of information for for Uku Iboku Paper Mills. Jebba was of printing equipment. I have some today come from China. Germany, who engaged themselves in printing do so, like my driver is now run- would he know when there is a mis- sounds very reasonable to me. booklets, etc. We also have the instance; how much does he know to produce craft liner; Uku Iboku was What can government do to help machines that I bought from China over Brazil and Indian used to dominate happened not to be professionals. ning his HND in accounting. take in a client’s work, he will go on No matter how you look at it, packaging, and packaging is also about the printing industry? The to produce newsprint, while Iwopin stakeholders in the industry? 10 years now, they are still working per- the market, though they are still very These were people who just joined Either you go to school or not, printing and the end result will be a computer cannot displace printing. divided into two segments. Each of minister of works may not know was to produce fine paper (bond and Government should consider giving fectly, and they work virtually on a daily much around but 9 out of 10 of print- the printing industry in order to once you are in my company, we waste of time and resources. Printing will remain, and technol- those segments can also be broken either. But give him somebody who blank paper). They were standard duty-free for all printing materials. They basis. There is a three-in-one machine ing materials used in Nigeria today make money. I am a professional. have to train you for five years on the ogy is advancing in this sector every down into light packaging and has worked in the print media as an mills that could compete with any should think of banning all printing I have, imported from China, it does come from China and India. Apart from my training in the UK, I job before you are allowed to oper- Do banks give the industry stake- year. For instance, if you want to heavy packaging. These are the cor- adviser, there will be a turn around. mill companies internationally. from abroad. The government should fuelling, embossing and cutting, and I have been to where they manu- worked for the Daily Times Group of holders credit facilities? hold a conference at an exact time rugated types- those who do cartons What bothers me is not even the For some time, Daily Times was also give Nigerians a chance. For in- we have been using it since the begin- facture quality paper in China. But Company for 20 years before I started Even if the banks are ready, I do and you want a programme imme- for packing fridges and other big fact that our people patronise for- using newsprint produced by Oku stance, if you have a book and you want ning of the year. Germans products are the funny thing is that, some of my own. We are backward as far as not think anybody will be ready to diately, there are machines that can products. In fact, a lot of corrugated eign printing industry, but let the Iboku. But some Nigeria business- the government press to print 1,000,000 good; there is no doubt about that. Their our importers will go there to tell training is concerned in the industry. collect any loan because of the high dish the programme out within the packaging companies in Nigeria bulk of it be done here in Nigeria. men killed Uku Iboku, when they copies, they will tell you they do not have machines are very big and expensive; them to reduce the quality because Over the years, I have trained interest rates. shortest time. are dead now due to forex issues; Government feels that secu- refused to use Uku Ibok newsprints, the capacity to print such volume of they have not been able to cut down the of cost. For instance, where you countless numbers of people For our members, we have set What are we doing to encourage the Indians and Lebanese used to rity documents should be printed claiming that Uku Iboku newsprint work, because they know they can print size of the machines they produced, but are supposed to have 80 grams of from my company. For instance, up a cooperative society under AS- those who are in the sector? A lot dominate this kind of business. abroad. Even if they are printed was not good enough. They said it abroad. This is a serious challenge we the Chinese and the Indian technologies paper, they will ask the Chinese to if you come in with a secondary SPON. We thought of how to assist of people come to see some of our We have the advertising part abroad, are they as secured as we was carrying spots and brownish, ourselves because of the hardship works and they say wow! They are of printing, like the billboards think? Some of these things printed etc. The same complaints were also in the economy, especially the amazed at the quality of product and so on. There is no how you out are more expensive than when made against Jebba and Iwopin. smaller printers. We decided to packs produced here. When you can start from printing without printed in Nigeria. Government Their mills’ forests had millennia float a cooperative society. We go into some of the shopping malls, getting a graphics, which is the should put good policies on ground planted everywhere. You will see have started giving out loans to pharmacies in Nigeria and see first step. If you want to be a good that can encourage and project local some of these trees if you are trav- members. There are some printers all those products, you would be printer, you must have a good industries to strive. Printing busi- elling to Benin, Edo State. Those who will get a job worth N300,000 thinking they were imported, but graphics setting as well. ness is capital intensive, the ma- trees today have become firewood. and they do not have N200,000 to they are done here locally. The technology today is taking chines, the paper, the ink and other If the government had managed execute the job, the cooperative We are not relenting on the qual- us into so many dimensions. For in- materials are now very expensive. those companies well, by now, we will help them to raise the money. ity of our prints, since we believe stance, there is a technology now that would have been self-sufficient in Now, even though the govern- that we must also always match with will print straight on your mounted Why can’t Nigeria produce some paper; that is just the truth. ment is in support of the coop- the international standard. Look, billboard against the conventional of these materials locally? erative society, how much are that material I gave to my graphic way of printing on flex before mount- About 10 to 15 years ago, we had Ni- Since there are huge opportuni- they putting into these cooperative artist to work on, the company that ing. It is a mobile printer. Now, to get gerian Paper Mills located at Jebba. ties for players in the industry, is societies to make sure that they are brought the work was importing it this facility is capital intensive. We had the Oku-Iboku Pulp and it not possible for CIPPON to rally functioning properly? 26 BUSINESS DAY Monday 09 January 2017 CITYFile Briefs Abia begins reconstruction of St. Pauls Road

Abia State government has started the reconstruction of St. Pauls Road, off Aba-Owerri road, to provide alternative route for motorists plying Ariaria and Ossisioma axis. It will also decongest traffic on Aba- Owerri and Faulks roads, as construction on Faulks road intensifies. Omenazu and Umuatako roads all in Umungasi, are also currently under rehabilitation, while adjoining Amaechi and Nwigwe streets, according to govern- ment sources, would take their turns in a matter of days. Benin-Ore Expressway: A Rigid pavement (cement) technology, few kilometres away from it was gathered, would be deployed to Okada Wonderland, diesel- enable the roads last longer and endure laden tanker went up in heavy traffic. flames, weekend, causing It is expected that these roads will a serious gridlock and leav- ing East-bound travellers further provide diversions away from stranded for hours. bad portions of Federal Government owned Aba-Owerri road, as well as, link Pic by Chuka Uroko patrons to Ariaria, through Faulks road and Omenazu. Police arrest 17 cultists in Rivers State Seventeen suspected cultists including NCC arrests 25 pirates, a female have been arrested in Ogale, Aleto and Onne areas of Rivers State following the raids on their hideouts by security operatives. The Divisional Police Officer (DPO) in seizes N76m goods charge of the Eleme Division, Amos Taiwo who paraded the suspects at the divisional headquarters at Ogale, Nchia Eleme, said JOSHUA BASSEY with agency report other major markets in the state. The commission, he added, also con- The seized goods include 350,000 ducted anti-piracy inspection in profes- that the operation led to the recovery of he Lagos Zonal Office of the copies of optical discs, home videos, sional print, publishing and CDs’ distri- several weapons including double barrels, Nigerian Copyright Commis- movies, musical works and literary books bution outlets within Lagos metropolis single barrels, AK 47, an axe, charms, and sion (NCC) says it arrested 25 suspected to have been pirated. where it made some seizures. sim cards and over 12 cartridges. suspected pirates and seized Ezeilo said the commission seized “Despite the financial constraints According to Taiwo, “we got informa- goods worth N76.6 million in N20 million worth of goods in March and confronting the commission, we will not tion that if we could arrest one Adamu T2016. N1.5million worth of goods in April at the fail to discharge our mandate, because Mohammed whose mother is from Eleme Obi Ezielo, the zonal manager of NCC Alaba market in Ojo. the eradication of piracy attitude is our and the father from Adamawa, we would said, at the weekend, in Lagos, that the ‘’In June, N5 million goods were seized utmost priority.” be able to get the notorious Benjamin commission also carried out several anti- at Shomolu, in July, N50 million worth of He noted that though 2016 was a Nwogu popularly known as “Lord Ben” piracy raids within the year under review. goods were also seized in Shomolu while challenging year for the commission, it because the suspects were said to be close- Ezielo listed the locations where the 25 in August, N50,000 worth of goods were nevertheless made it marks, just as he friends, the informant pleaded that his suspected pirates were arrested to include seized in Ajegunle Lamlad,” while some assured of determination to continue name should not be mentioned”. Alaba, Shomolu, Ajegunle and Ojo. The of the suspects had been charged to the to partner with relevant stakeholders to action, he said, was also extended to some Federal High Court in Lagos. further combat piracy in 2017. Youths jostle for Peace Corps recruitment in Ogun Consumers lament as kerosene price rises 60% in Kaduna Thousands of unemployed youths in Ogun are struggling to get the registration form of the Peace Corps of Nigeria at Asero he price of kerosene, an es- tity I needed, ‘’she said. and suddenly there was a sharp increase Housing Estate, Abeokuta. sential household commodity, Another dealer, Sammy Bodam, said to N1,600 a gallon. In fact, in some The bill to establish the Nigerian Peace Corps is awaiting President Muhammadu has increased by 60 percent in that patronage had drastically reduced places, it is selling for N2,000. Buhari’s assent. Kaduna, from N1,100 a gallon in due to the hike in the price. “I am urging the government to look The exercise which is being carried out TDecember, 2016 to N1,600 in first week A consumer, Jamila Abubakar said into our plight and urgently address the by the command to screen intending ca- of January 2017. that the sharp increase had made life problem; otherwise there will be no hope dets on medical, fitness, mental alertness, Dealers said at the weekend that the very difficult for the common man and for a better life for a poor man in this educational standard among others is led product suddenly became scarce and urged government to do something country,’’ she said. by the commandant of the Corps, Patriot expensive, which was responsible for the about it. Another consumer, Amen Rabo, said Olalekan Yusuff. The screening is a preliminary exercise sharp increase in the price. “If not because we do not have an he had turned to firewood because kero- before the one month intensive training One of the dealers, Joyful Adeyemi option, nobody will use kerosene again. sene was beyond his reach. of the corps, which would qualify the suc- said that she bought kerosene in Decem- This is because firewood is equally “I cannot afford to buy kerosene, cur- cessful cadets to be officers of the Peace ber, 2016 at N47,000 a drum and sold a expensive, difficult to use and environ- rently selling at N1,600. I am using fire- Corps of Nigeria. gallon between N1,100 and N1,200, “only mentally unfriendly, coupled with the wood as an alternative, which is cheaper Yusuff said the corps was a dignify for the price to suddenly jump to N72, accompanying health risk. But we can- compared with kerosene, with 10 pieces profession and would not recruit anybody 000 a drum. This change forced me to not continue like this. Kerosene is an selling for N100. Unfortunately for us, with criminal records. “We are peace loving body and we shall increase the price to N1,600 a gallon; essential commodity and is becoming 10 pieces of firewood cannot cook three continue to promote and maintain peace. otherwise, I will be running at a loss.” beyond the reach of a common man. square meals for my family a day; we She called on the federal and state “More so, the product is scarce. I had “Just some few weeks ago, a gallon just have to manage because kerosene governments to do more in terms of job to part with extra money to get the quan- was selling for between N1,100 to N1,200 is beyond our reach, ’’ Rabo said. NAN creation for the youths in the country in order to reduce crimes. NAN Monday 09 January 2017 C002D5556 BUSINESS DAY 27 • Savings • Travel • Debt & Borrowing This is M NEY • Utilities A daily guide to your Personal Finance • Managing your Tax Can you recession-proof your finances? provide you with a cush- little bit helps. Keep your ion in case of unexpected Don’t wait for your employer CV updated, even if you events. Job security is at aren’t job hunting. You an all-time low and many to develop you; indeed, many just never know when you companies have had to will need to send one out lay off staff, cut salaries or companies have cut back on training. in a hurry. even reduce work hours. Can you afford to re- How would you cope if You are your greatest asset and you tire? you lost 50% of your in- If you are close to re- come? This is precisely owe it to yourself to continue to tirement but it is clear when your emergency that you will not be able fund kicks in. Remember improve yourself by reading widely to finance a comfortable that your rainy-day funds and learning retirement with the cur- should be easily accessi- rent state of your financ- ble; you don’t want to sell es, if you are well, strong stock at a loss to pay for an strategy. Create multiple and able to add value, unexpected emergency. Invest in yourself streams of income consider postponing re- Ask yourself; could you When did you last in- There are only two tirement for a few years live off your savings for 6 vest in yourself? Don’t ways to make more mon- to give you more time to months? If you have no wait for your employer ey; to cut back on expens- put things in place. You savings, you really need to to develop you; indeed, es or to increase income. may well have 30 years in get started, bit-by- bit. many companies have Even if you feel that your retirement, almost as long Diversify your invest- cut back on training. You well-paid job is relatively as your working life; it has ments are your greatest asset secure, it is a good idea to be funded. Are all your invest- These are time-tested ith so Avoid taking on more and you owe it to yourself to have a back-up plan, “ ments in the stock mar- strategies that will hold much talk debt if you can help it; to continue to improve an alternate source of in- ket, in one company, or you in good stead during about the during a recession, debt yourself by reading widely come so that if one source in one currency. If all your times of recession and reces- obligations can be a huge and learning. Fortunately, is threatened, you have money is in one place it when things get back to sion it is drain, particularly if your there is so much informa- others to fall back on. As is almost impossible to normal. If you develop so easy to enter into the income has fallen or is not tion and great material long as there is no con- W mitigate risk. Seek profes- these habits and make new-year with a feeling increasing. online; you can enroll for flict of interest and your sional advice and review them a way of life, you of doom and gloom with It is time to consider some outstanding cours- employer is in the know, your investment portfolio will be much better pre- much anxiety about how cheaper more sustainable es that are relatively in- consider freelancing, and consider rebalancing pared for the next reces- it will affect you. Here is options. Ask yourself the expensive. Invest in your consulting or putting one if necessary. Asset classes sion; there certainly will some good news; these hard questions, answer network and the people of your talents to use on tend to perform different- be one. challenging times will them honestly, and give that you spend time with. the side. The “side hustle” ly. With a diversified port- end, but before they do, yourself peace of mind. Networking provides you is more important than folio, you are generally in Happy new year! there are some steps you with new ideas, opportu- ever for most people as it Have an Emergency a better position to ride can take to take the edge nities, and contacts. Ideal- is unlikely that your salary Fund the market volatility with- off the sting and dull its It might seem absurd to ly you should be network- will meet all your needs. It out being forced to sell at impact. say you need to continue ing all year round and not is also part of your back- Instagram and Twitter: @ a loss. Always think long to save but that is exactly only when you need assis- up plan should you lose mmwithnimi, Live below your term in your investment means what you need to do to tance badly. your day job. Every extra Facebook and Google+: There is no magic for- ‘Money Matters with Nimi’. mula to transform your www. personal finances. We will moneymatterswithnimi. all simply have to down com, or send us size and cut back and be an email info@ frugal and disciplined. moneymatterswithnimi. How much do you need com to live on? If you are a two- Nimi Akinkugbe has income couple, imagine extensive experience how much you could in private wealth save, if you managed to management. She live largely on one income seeks to empower and save the rest. people regarding If your rent is crippling, their finances and ask yourself; do you really offers frank, practical need all this space and insights to create a must you remain in this greater awareness area? Would your stand- and understanding of ard of living fall drastically personal finance. if you moved to a smaller For more personal apartment in a more af- finance tips, contact Nimi: fordable neighborhood? Email: info@ Do you need all that of- moneymatterswithnimi fice space or can you sub- Website: www. let part of it? Are you still moneymatterswithnimi. driving around in a fuel com guzzler every day? Are Twitter: @ your children in a school MMWITHNIMI that you cannot afford and Instagram: @ is their education causing MMWITHNIMI you to go into debt that is Facebook: spiraling out of control? MoneyMatterswithNimi 28 BUSINESS DAY Monday 09 January 2017 • Savings • Travel This is M NEY • Debt & Borrowing • Utilities A daily guide to your Personal Finance • Managing your Tax Surviving January financially after overspending in December

the month has already begun. sider selling some of the ex- FRANK ELEANYA Take an inventory of all the tra clothes you bought from money including the sources December and the ones you left. Also calculate the debt have not used for months. anuary for most people you brought into the New You will not only be saving often feel like waking Year. If you are unable to some crucial money but also up from a terrible hang- pay your debts talk to your decluttering your space. To over. It is nothing like creditors. be sure, excesses also include the feeling in Decem- Making a budget takes dis- throwing away food. Plan you berJ when bank accounts drip cipline. Determine you will meals carefully and use your with surplus – savings, profits keep an account for every- leftovers. from investments and yearly thing you are going to spend Pack homemade lunch- bonuses. The temptation to for the rest of the month. Put boxes to work; you will be overspend is usually high away an amount you want to surprised how much you and overwhelming and many save; it may be small because would have saved at the end willingly succumb. We binge you have not been pain, but of the month. on shopping, travel arrange- stick to it. If you have to change your ments, holiday parties, and Next step is to look around work shoes, try buying ‘Made many more as if January will you. Observe the unneces- in Nigeria’. Many of them never come. sary expenses you brought have really good quality and Well, January always into the New Year – some of you get two pairs to last you a comes and it is a long month them were probably gener- long while for the price of one to survive without money. ated during the holiday in foreign shoe. But if you must When it comes only those your bid to impress everyone. buy foreign shoes, do not who remembered to plan If you discover your regular insist on brand names when for it will be in a better finan- spending from last year sud- you clearly cannot afford it. cial position. But if you were denly increased it is proof you Use electricity and water among those worried about have accumulated new habits wisely. how to survive because you from the short time on holi- January is also a good time are starting to feel the pinch, day. It means time to readjust to reactivate your side hustle. here are some strategies you your life and expectations. Shake off the holiday fog and can use immediately. You may need to clear dig in. Reach out to your busi- Set a budget. It is not too out the excesses and save a ness network. It is time to roll late to start one even though lot of money doing so. Con- up the sleeves. Looking for a job? don’t forget the benefits! ob hunters often fixate My new job doesn’t have that there is still a lot of flex- on salary when looking a health plan, but there is a ibility in my schedule and for a job. After all, income wellness stipend. This well- that matters. is a very important piece ness stipend covers my health If you can find a job that ofJ your financial puzzle. How- insurance cost and my gym lets you telecommute two or ever, the reality is that salary membership. That’s a nice three times a week, that’s a isn’t everything. Sometimes perk and amounts to free major benefit that could help good benefits are worth a little money. your situation. Can you use bit of a salary cut. Retirement Account that time to save on child- I recently signed on for a Your company’s retire- care? Save money in other “real” job with Student Loan ment plan can be worth a ways? Have a better sched- Hero — my first such job in lot over time too. If your em- ule? Those improve your life more than a decade. Before ployer offers a retirement that money may not be able I made the leap back into the plan , that’s free money. Not to buy. world of salaried employ- only is it free money, but it’s Other Perks ment, though, I looked at the money that grows at a tax- Think about other ben- benefits and perks. advantaged rate over time. efits and perks that might Does it mean a slight pay This gives you a bigger benefit come with your job. Do you cut for me to do this job? The down the road. Work for a get a company car or Smart- answer was yes, but the ben- company with a solid match phone? Perhaps there is efits far outweigh what I’m policy, and your returns over on-site daycare. Maybe you giving up in income. time can more than make up can get healthy meals in the Help with Healthcare is for whatever you’re missing in cafeteria. Some companies a BIG Deal terms of annual salary. offer stipends for continued One of the biggest benefits Telecommuting learning or tuition reimburse- you receive when “working I consider this a major ment. Another benefit that is for the man” is healthcare, as perk for any job. One of the becoming increasing popular many employers offer subsi- reasons I decided to accept a is student loan repayment dized healthcare. This means job with a salary is that this is help. These perks can be a big your company pays for some all remote work. I don’t have deal for some people who can of your monthly premium, a commute. Honestly, my use them. reducing what you pay out lifestyle has barely changed Take a look at the benefits of pocket. The year I had at all since starting work. offered by your new job. Can benefits through my now-ex’s While I do have to plan to they help your lifestyle better work was amazing. We paid attend video conferencing than a mere salary bump? If half what we used to, and it meetings a couple times a so, take that into consider- came out of the paycheck, so week, and make time for ation when deciding between it felt like it wasn’t even there. other items, the reality is job offers. Monday 09 January 2017 C002D5556 BUSINESS DAY 29 BUSINESS DAY !""#$%%%& Monday 09 January 2017 Cowry Weekly Financial Markets Review & Outlook

Nigeria’s December Manufacturing PMI Rises to 52 Equities Market Close Bearish on Banking, Points, indicating Early Exit from Recession… Insurance, Industrial Stocks…

Nigeria’s manufacturing sector recorded expansion in business activity in the !e Nigerian bourse recorded a bearish week which resulted in the decrease month of December 2016 to break a string of contractions recorded in the preceding of overall market performance measures, NSE ASI and market capitalisation, by eleven months. !is was in spite of a tough operating macroeconomic environment impacted by scarce foreign exchange, high in#ation rate, low consumer demand and 232 bps each to 26,251.39 points and N9.03 trillion respectively. NSE 30 Index also decline in purchasing power. It may however be safe to speculate that the uptick decreased by 205 bps to 1,170.68 points. Meanwhile, total deals, total transacted in manufacturing is related to seasonal demand for goods and services during the volumes and Naira votes revved by 46.61%, 804.8% and 48.60% to 9,329 deals, Yuletide season. !e Manufacturing PMI leaped to 52.0 index points in December 3.67 billion shares and N5.53 billion respectively. All the sectored gauges closed in 2016 (as against 46 index points contraction registered in November 2016). !e negative territory – the NSE Banking Index, the NSE Insurance Index, NSE Consumer expansion in activity was mainly driven by increases in output as well as new Goods Index and the NSE Industrial Index decreased by 1.57%, 0.17%, 2.28% and demand – the respective indexes pointed to 57.6 and 51.8 from 46.9 and 45.1 recorded in the preceding month. Also, capacity constraints developed as supplier delivery 3.02% to close at 270.01 points, 126.08 points, 696.41 points and 1,547.19 points time lenghtened to 47.9 in the review month from 53.2 registered in the previous in average input prices also slowed to 64 points in December 2016 (from 66.8 respectively. !is week, we expect a mix of bargain hunting and pro$t taking activities. month. Manufacturers were able to trasfer some of the input in#ation to the $nal points in November 2016). Employment also contracted at a slower of 43.8 (from consumer as expansions in both input and output prices increased to 73.2 and 70.4 40.2) while backlogs of work contracted faster at 41.5 (from 42.4). Only eight of the in December 2016 from 71.2 and 65.7 in November 2016 respectively. Contractions eighteen non-manufacturing subsectors were in expansion territory. In a related in employment and backlog of work also slowed to 48.6 and 45.25 respectively from development, Nigeria’s Minister of Finance, Mrs Kemi Adeosun, on Wednesday, 40.6 and 45.2 recorded in the preceding month. Nine of the sixteen manuacturing communicated new policy measures in line with the provisions of the Economic subsectors were in expansion territory – with the Cement sub-sector, Food, beverage Community of West African States’ Common External Tari" (ECOWAS CET). !e & tobacco products sub-sector, and Textile, apparel, leather & footwear sub-sector ECOWAS CET (applicable to the 2017 to 2019 $scal periods) is composed of three registering the strongest expansions of 62.4, 59.9 and 56.8 respectively as against categories made up of an Import Adjustment Tax list of 173 tari" lines, a national list corresponding numbers of 57.4, 53.4 and 47.3 recorded in the preceding month. consisting of 91 items and an import prohibition list, which is applicable to certain On the other hand, the non-manufacturing sector remained in contraction territory goods originating from non-ECOWAS member states. !e policy, designed to as the composite non-manufacturing sector PMI stood at 47.1 points in December promote regional integration, should encourage Nigerian manufacturers with respect 2016, the twelfth consecutive month of contraction. !e contraction was however to the national list, while also promoting import substitution, as it reduced tari"s on slower than 42.8 points registered in November 2016. !e non-manufacturing certian imports of raw materials – from 10% to 5% – as well as on imported machinery sector recorded slower contractions in business activity and incoming business and equipment used in sectors such as agriculture, cement, hospitality, power, iron received as their respective indexes stood at 48.2 and 46.9 in the review month from and steel, solid minerals, textile and aviation – which will attract zero import duty. corresponding numbers of 43 and 42.3 recorded in the preceding month. Expansion Interbank Naira/Dollar Forex Rate Marginally Appreciates... Federal Government Moves to Quell In the just concluded week, Nigerian Naira appreciated against the greenback Violence in Southern Kaduna... at the interbank foreign exchange market by 0.12% to N314.625/USD. Elsewhere, the Naira depreciated at both the Bureau De Change and parallel (‘black’) market segments by 0.62% and 0.61% to N485/USD and N493/USD respectively. Meanwhile, the weekly movements in most dated forward contracts at the In the just concluded week, the Inspector-General of Police, Mr. Ibrahim interbank OTC segment implied relative stability of the Naira viz-a-viz the US Idris, on the orders of President Muhammadu Buhari, began an investigation greenback amid an increase in the foreign exchange reserves. External reserves into the recent violent clashes between Fulani herdsmen and southern Kaduna increased week-on-week by 1.69% to USD26.155 billion as at Wednesday, residents, which led to the deaths of many Southern Kaduna indigenes. According 04 January 2017. !e 1 month, 3 months, 6 months and 12 months forward to President Buhari’s spokesperson, Garba Shehu, the Nigerian army is also in contracts were stable at N305.25, N320.18/USD, N330.537/USD, N346.07/USD week. In the current week, we expect stability of the Naira/USD exchange rate the process of setting up two battalions in Southern Kaduna while the military and N378/USD respectively. However, spot rate appreciated by 0.08% to N305/ as the increasing Reserve spur con$dence on the ability of the Central Bank of USD as there was USD7.5 million intervention sales by CBN to banks during the continues to carry out air surveillance across #ash points of the area. Kaduna State Nigeria (CBN) to intervene more aggressively in the o%cial market window. Governor, Mallam Nasir El-Rufai, alleged that the attackers were herdsmen from neighbouring countries, who had returned to avenge attacks on their relatives and Interbank Interest Rates Moderates Amid livestock back in 2011. !e Catholic Church claimed that 808 people had been killed when bandits attacked four local government areas in Southern Kaduna; Liquidity Ease… however, the Police chief, Mr. Idris, disputed the $gure without stating o%cial In the just concluded week, treasury bills worth N125.845 billion matured casualty number. Meanwhile, Senate President Bukola Saraki, gave assurance that via primary market, viz: 91-day bills worth N28 billion, 182-day bills worth N42 the Senate would commence investigation into the latest killings in Southern Kaduna billion and 364-day bills worth N55.845 billion. !is was more than o"set by the upon resumption from recess on 10 January, 2017. It is disturbing to note that the treasury bills auctions during the week totalling N223.635 billion via primary set of invaders, in the name of herdsmen, have perennially been unrestrained in market, viz: 91-day bills worth N35 billion, 182-day bills worth N22 billion, and their acts of violence in di"erent parts of the country – the latest being Southern 364-day bills worth N115.845 billion; and via secondary market, viz: 184-day bills Kaduna. It is more worrisome that actions by the federal and state governments worth N20.992 billion and 352-day bills worth N29.798 billion. Marginal rates who are mainly responsible for securing lives and property have appeared to on the 91-day, 182-day and 364-day bills were stable at 14%, 17.50% and 18.68% be devoid of strong resolve to settle the trend once and for all. We hope that the respectively. Elsewhere, interbank rates decreased across all tenor buckets amid order issued by President Buhari will be enforced by the relevant law enforcement liquidity ease – NIBOR for overnight funds, 1month, 3 months and 6 months across all the maturities amid bargain hunting – yields on 1 month, 3 months and 6 months maturities fell to 11.66% (from 15.64%), 13.59% (from 16.64%) and agencies to prevent the situation from degenerating to the point where citizens will funds decreased w-o-w to 8.88% (from 10.04%), 15.23% (from 17.72%) and 17.60% be compelled to defend themselves, which is a short route to anarchy. In another (from 18.56%) respectively. However, the yield on 6 months rose to 22.23% (from 18.66% (from 19.65%) respectively. !is week, in the absence of any maturities 22.21%). Meanwhile, Nigerian Interbank Treasury Bills True Yields (NITTY) fell and auctions, we anticipate interbank lending rates to remain relatively stable. development, President Muhammadu Buhari administration, in line with its campaign promise, began payment of the N5,000 monthly stipend to the poorest and the most vulnerable in the country through the Conditional Cash Transfer OTC FGN Bonds Mostly Depreciate Amid Sell (CCT) scheme of its Social Investment Programme (SIP). First set of bene$ciaries Pressure… are from Borno, Kwara and Bauchi States. Other states in the $rst batch to bene$t from the CCT payments are Cross River, Niger, Kogi, Oyo, Ogun and Ekiti States. In the just concluded week, FGN bonds traded at the OTC segment depreciated in value for most maturities. !e 20-year, 10.00% FGN July 2030 debt 10-year, 16.39% FGN JAN 2022 debt, the 7-year and the 16.00% FGN JUN 2019 debt depreciated by N2.12, N1.00 and N0.76 respectively; their corresponding yields rose to 16.13% (from 15.60%), 16.24% (from 15.81%) and 16.17% (from 15.80%) respectively. Disclaimer However, the 5-year, 15.10% FGN APR 2017 debt appreciated by N0.16 while its !is report is produced by the Research Desk of Cowry Asset Manage- yield fell to 14.38 %( from 14.94%). Elsewhere, FGN Eurobonds traded on the ment Limited (COWRY) as a guideline for Clients that intend to invest in London Stock Exchange increased in value across all maturities amid buy pressure. securities on the basis of their own investment decision without relying !e 10-year, 6.75% JAN 28, 2021 bond, the 5-year, 5.13% JUL 12, 2018 bond and the completely on the information contained herein. !e opinion contained 10-year, 6.38% JUL 12, 2023 bond gained USD2.03 (yield fell to 5.67%), USD0.43 herein is for information purposes only and does not constitute any o"er (yield fell to 3.18%) and USD2.62 (yield fell to 6.36%) respectively. This week, or solicitation to enter into any trading transaction. While care has been we expect a mix of bargain hunting and pro$t taking at the OTC bond market. taken in preparing this document, no responsibility or liability whatsoever is accepted by any member of COWRY for errors, omission of facts, and any direct or consequential loss arising from the use of this report or its contents.

!"#$%&'(()*%&+,"-)&.(-"//(012,3"04&54&5,&&6$312%&78&920:2$%&;7<=

Cowry Asset Management Limited (Member of the Nigeria Stock Exchange) Plot 1319 Karimu Kotun, Victoria Island Lagos Tel: +234-1-2715008-9; +234-1-2716614-5 www.cowryasset.com Monday 09 January 2017 31 32 BUSINESS DAY C002D5556 Monday 09 January 2017 INSIGHT How states will spend in 2017 After a two-year lull, states in Nigeria are expanding their budgets, but the disparity among them is alarming, write OBODO EJIRO and KOSISO UGWUEDE.

ven though three lation size also fails to predict states (Ondo, Ad- what a state will spend in the amawa and Kebbi) following year. are yet to submit their The data suggests that oil proposed budgets for drives everything and is a good 2017,E there is a clear pattern in predictor of what a state would the figures that have been re- spend in the following year; leased by 33 others already. albeit this applies mostly to oil The figures suggest a pattern producing states. In the case of of uneven budgets that unmasks the non-oil producing states, the weaknesses in most of the econ- historical amount received from omies that makeup Nigeria. the federal monthly allocation is For instance, Lagos, which a more stable predictor of what has the smallest landmass but a states will spend in any year (as large population, has a budget opposed to the Internally Gener- that is N230 billion higher than ated Revenue). that of the five states that make up (This may explain why some South-East Nigeria. The budget of governors had an oil price and Lagos is also N31 billion higher output assumptions underlying than that of the six states that their budgets without concern make up the North-Central zone. for projected prices for cash Equally alarming is the fact crops within their domains). that Bayelsa, which is among In the last four decades, more the least populated and small- has been done to perfect the art est state in terms of landmass, of handing out subsidised farm has a budget that is N11 billion input (often financed with oil higher than that of Kano, even revenue) than has been done in though Kano is Nigeria’s most perfecting the process of collect- populated state. ing taxes on agric activities. On From the data, it is clear that the part of state governments, the the states are becoming bold burden of justifying the collec- again. This is the first time since tion of taxes, where roads leading 2015 that they have had the to farms are replete with craters, courage to raise their collective is heavy. budget. In 2016, 24 states cut their The deepest pockets in Nigeria budgets compared with what they spent the previous year, In 2017, 10 states will spend while in 2017, only 9 states did. In 54 percent of the total sum that nominal terms, the 33 states that all states are budgeting. The have released their 2017 budgets implication is that 10 states will plan to spend N6.22 trillion, as spend more than half of what against N5.98 trillion 36 states the other 23 states are going to spent in 2016. spend. (Note that this statement In 2013, 2014, 2015 and 2016, is based on figures that have been the states collectively spent released already). N6.62 trillion, N6.63 trillion, Lagos tops the list of big N5.98 trillion and N5.93 trillion, spenders with an approved respectively. budget of N813 billion. Oth- ers include Rivers (N470bn), When landmass is “Nothing” Cross Rivers (N301bn), Delta (N271bn), Bayelsa (N221bn), A major factor that has driven Ogun (N221bn), Kaduna the budget size of states in the (N215bn), Kano (N210bn), Oyo last half decade has not been (N207bn), and Sokoto (N205bn). landmass or population size. Most of the big spenders are In the 2016 financial year, the from the South. For instance, correlation between the size of a all the states in the South South state’s budget and its landmass except Edo, which earns the least was a mere -0.25, while in 2017 amount from the monthly 13 it is -0.26. What this suggests is percent derivation, fall into this government’s takings from agric category. outputs have not had the might Apart from the South South to determine how big a state’s states, the South West has a budget is. the ability to grow more crops budgets for the states that are size performs poorly when cor- number of states that have risen (In Nigeria, where landmass and perhaps rare more animals, predominantly agrarian). related with budget size. Popu- steadily along the yearly ex- is often touted for agric prowess, has not translated into bigger In the same vein, population penditure grid. Ogun is a brilliant Monday 09 January 2017 C002D5556 BUSINESS DAY 33 INSIGHT How states will spend in 2017

example. recurrent expenditure takes In 2012, Ogun had a moder- N141.1 billion. On its part, Cross ate budget of N187.9 billion, and River, which has the third largest this was grown to N210.35 billion budget, will spend N226.48 bil- in 2015. In 2017, Ogun plans to lion on capital expenditure while spend N211 billion. Lagos has recurrent expenditure has been followed the same trajectory, allocated N74.52 billion. growing expenditure from N485 Kaduna plans to expend billlion in 2012 to N813 billion N131.45 billion on capital ex- in 2017. penditure with N10.49 billion going into health, N44.48 billion Shallow pockets? into education while roads will On the flipside, Nassarawa get N24.5 billion, and N8.1 billion has the lowest budget in the will be expended on water and country with a proposed spend sanitation. of N68 billion. Other states Ogun dedicates N118.306 at the bottom of the grid in- billion to capital projects and clude Yobe (N69.3bn), Gombe N102.82 billion to recurrent (N86bn), Ekiti (N94bn), Abia expenditure. In Ogun, focus (N102.5bn), Enugu (N105bn), will mainly be on the education Kebbi (N107bn), Niger (N108bn), sector in 2017, as a bulk of the Taraba (N110bn), and Zamfara budget allocation, N47.06 billion, that plans to spend N115 billion. has been dedicated to the sec- Three states in this category tor. Healthcare and agricultural are located in Nigeria’s troubled developments will gulp N15.105 North East, (Taraba, Gombe billion and N11.610 billion, re- and Yobe). Their combined size spectively. Rural development of 128,743km2, exceeds that of and employment generation will South Korea which has a budget be supported with an allocation which is more than 15 times of N44.201 billion. bigger. Governor Seriake Dickson of Bayelsa State says his state will The capital, recurrent co- spend N5.9 billion on healthcare, nundrum N13.5 billion on road projects States will be spending more and N500 million on water and on deepening infrastructure sanitation projects. In the case this year. The states that have of Taraba, N60.8 billion will be released their budgets so far spent on capital projects with will be spending 58 percent on N4.9 billion dedicated to health, capital expenditure, while 42 N2.9 billion to education, N11.1 percent will go into recurrent billion to roads and N7.1 billion expenditure. That said, accord- to water and sanitation. ing to Ikechukwu Kelikume, a Imo has the highest budget senior lecturer at Pan African allocation in the Southeast- University, “what also matters is ern zone with a total budget of if what they budgeted is actually N131.14 billion. Capital pro- expended on the infrastructure jects in the state will gulp 59.03 they have said they will revamp.’’ percent (N77.41bn) while 40.9 From all indications, states percent (N53.73bn) has been al- are planning on expanding water located to recurrent expenditure. projects, expansion and exten- Borno, which is the worst hit sion of roads, healthcare and by Boko Haram, has allocated education. The states have also the bulk of its 2017 budget to indicated interest in improving restructuring its educational the quality of sanitation in their system. Governor Kashim Shet- domains. tima plans to spend N33 billion In 2017, Lagos has pegged its to rehabilitate school facilities capital expenditure at N507.816 across the state. billion. It plans to focus on road In presenting the budget construction, rehabilitation and tagged “Budget of Consolida- maintenance of infrastructure, tion, Restoration and Rebirth,” including water projects within the governor shows the direction the year. The sum of N56.31 bil- of reforms projected for 2017, lion has been devoted to the en- which is targeted at the restora- vironment, while health care and tion of Borno to its pre-Boko Har- education will get N57.29 billion am condition. In Borno, N19 bil- and N92.4 billion, respectively. lion will be devoted to the health With the second largest budg- sector, while reconstruction, et for any state in the country, rehabilitation and resettlement Rivers has allotted N329 billion have been allocated N13 billion to capital expenditure while and agriculture gets N7 billion. 34 BUSINESS DAY Monday 09 January 2017

StartTOOLKIT- FORU ENTREPRENEURSHIPp DIGEST A 2016 report by Price- waterhousecoopers (PwC) shows that the official list of approved taxes collected by 7 issues to shape SMEs in 2017 the three levels of government have risen from 39 to 61 in this administration. Some of the taxes are multiple in nature, ODINAKA ANUDU & say small business owners. JOSEPHINE OKOJIE “Taxation will play a big role in shaping SMEs this year. he outgone year The government is looking at was challenging ways to generate income for for Nigerian mi- its expenditure, and taxation cro, small and me- is the top on their list. This is dium enterprises going to affect the operations (MSMEs),T according to key of small businesses because stakeholders. taxation constitutes part of The sector faced numer- our production cost,” said Ab- ous challenges, ranging from dul Rasheed Yerima, assistant foreign exchange scarcity to director, Nigerian Association power outages. These chal- of Small and Medium Enter- lenges led to the closure of prises (NASME). 222 small businesses, shed- The state of infrastructure, ding 180,000 jobs, according especially power, is also a to a report released in August make-or-mar issue. If the 2016 by NOI Polls Limited in power minister Babatunde association with the Centre Fashola as well as generation, for the Studies of Economies transmission and distribution of Africa. companies get this sector This year, small business right this year, small busi- analysts and players have out- nesses will enjoy low running lined seven major issues that or production costs. will define the performance of Femi Egbesola, president, MSMEs. The first major issue Association of Small Business that will make or mar MSMEs, Owners of Nigeria (ASCON), according to stakeholders, said: “Infrastructure is an is the take-off or otherwise issue that would shape the of the Development Bank of activities of MSMEs in 2017. Nigeria (DBN). Power is a major challenge The Federal Government “One of the key issues that the Central Bank of Nigeria’s jobs and quicken Nigeria’s the country needs a stable that has crippled a lot of busi- reached an agreement with would shape MSMEs) is the N220 Billion MSME Fund economic recovery. exchange rate policy to guar- nesses. The government must the World Bank Group and new Development Bank of domiciled in banks. Third on the list is the sta- antee certainty in the business reform the power sector to other development partners Nigeria that will begin op- Many SMEs cannot access bility or otherwise of the for- environment. Opara said the improve supply for Nigerians.” in October 2016 for the release eration soon. The develop- this fund and those that can, eign exchange market. Many fourth key issue to shape Ike Ibeabuchi, CEO of MD of $1.3 billion for the take-off ment bank will address issues do so at over 21-22 percent, MSMEs are either importers SMEs this year is technology. Services Limited, said the of DBN this month, said Kemi around funding and collateral despite CBN’s insistence that of finished products or in- “Technology and innova- success or failure of the 2017 Adeosun, finance minister. for small businesses,” Friday banks should lend this fund at puts. A number of them have tion will shape MSMEs in budget implementation will The focus of DBN is to Opara, director for strate- nine percent, said Jon Kachik- foreign partnerships, while 2017. For small businesses to impact MSMEs. provide cheap funds for cash- gic partnership at Small and wu, chairman, SME Group of some are exporters and will be competitive, there must “If the Export Expansion strapped Nigerian SMEs to Medium Enterprises Devel- the Lagos Chamber of Com- need to take their dollars from be innovation. The world is Grant is released; if the roads enable them unleash their full opment Agency of Nigeria merce and Industry (LCCI). domiciliary accounts at the changing very fast as a result projects are executed; if the potential. (SMEDAN), told BusinessDay According to Tony Ujabi, going market rate. A continu- of technology,” said Opara. N15 billion for the recapi- Given the credit challenge in a telephone interview. an SME expert, if the CBN ation of instability in the FX The fifth point mentioned talisation of Bank of Industry facing small businesses in the The second major fac- succeeds in convincing com- market will limit the progress by stakeholders is taxation. and Bank of Agriculture is country, key stakeholders see tor that will determine the mercial banks managing this of MSMEs, while a change of The current economic crunch released, MSMEs will see the take-off of this bank as one performance of MSMEs this fund to lend more to SMEs at the current policy could spur is pushing governments at the opportunities for expansion. big win for both government year, according to stakehold- a much lower rate, small busi- small businesses, say analysts. federal, state and local levels Otherwise it will be the same and MSMEs in 2017. ers, is the disbursement of ness owners will provide more According to Friday Opara, into aggressive hunt for taxes. old story,” Ibeabuchi said. BoI commits N4bn to underserved micropreneurs through 23 MFBs ODINAKA ANUDU Announcing the presen- light manufacturing, food tested and trusted, given portunity by implementing including Abuja. tation of cheques to LAPO products (snacks, baker- that their non-performing exchange programmes Hajara Adeola, Lotus he Bank of In- MFB, Fortis MFB and Lotus ies, etc) beverages, solid loan ratios are at single- with the world’s bestdevel- Capital’s CEO, said the dustry (BoI) has MFB weekend in Lagos, minerals, services and ar- digit rates, adding that they opment finance instituions scheme will lift many Ni- devoted N4.23 bil- Waheed Olagunju, acting tisanal activities such as also have extensive cover- such as BNDS in Brazil, gerians out of poverty, en- lion to the under- managing director/CEO of wood and metal works, tai- age across the country. KFW in Germany and IDC abling them to make con- servedT and under-banked BoI, said project identifica- loring, and shoe-making, He stated that the in South Africa/ tribution to the economy. micro entrepreneurs at tion will be based on the among others. scheme aligns with the Also speaking, Godwin Tiko Okoye, CEO of For- the bottom of the pyramid comparative advantages of “The Bottom of the Pyr- employment and wealth Ehigiamusoe, managing tis MFB, said those at the through 23 microfinance various states of the federa- amid’ programme is es- creation objectives of the director, LAPO Microfi- bottom of the pyramid banks (MFBs). tion, including the Federal sentially aimed at poverty National Enterprise De- nance Bank, said the eco- have been neglected in Eleven of the 23 MFBs Capital Territory. reduction through job and velopment Programme nomic rebound can only the financial system, as have already disbursed While handing over the wealth creation focusing (NEDEP) of the Federal take place if the banks be- banks pay more attention N1.1 billion, while three cheques for N1 billion to on the rural micro-en- Government and will en- gin to engage Nigerians at to those at the middle and newly recruited MFBs have LAPO MFB, N500 million terprise operators with a able BoI to achieve its core the bottom of the pyramid. people at the top. been handed the sum of to Fortis MFB and N500 view to extending financial mandate of industrialisa- “The success will be “Once you get the bottom N2 billion for on-lending. billion to Lotus Capital inclusion to them,” Ola- tion by providing finance measured by the number right, you will get the econ- Nine other MFBs have Limited, Olagunju said ac- gunju said. for the economically ac- of people that are empow- omy right. I believe what we likewise been approved to tivities or industries to be He stated the develop- tive, yet financially exclud- ered,” Ehigiamusoe said, can achieve collectively will disburse N1.13 billion to financed include, but not ment partners (MFBs)that ed micro entrepreneurs. stressing that the fund will be greater than what BoI will micro entrepreneurs, the limited to, value addition are involved in the ‘Bottom According to him, the get to rural areas, as LAPO acheieve as a single institu- bank said weekend. in sectors like agriculture, of the Pyramid’ scheme are bank explores global op- has branches in 28 states, tion,” Okoye said. Monday 09 January 2017 BUSINESS DAY 35 Start-Up DIGEST Business Opportunity ‘I sell my online designs to Nigerians How to invest in oil palm production Financial aspect abroad, including foreigners’ OLUMAKINDE ONI We are recommending a 20 hectare plantation for a start. TOLULOPE ADEBUKOLA OGUNDOKUN is the founder and CEO of 20 hectare oil palm plantation can conveniently service a il palm is palm oil mill that will be established by the owner when Pawprint Limited. She is a graphic designer and an entrepreneur. In native to the plantation starts to fruit. this interview with JOSEPHINE OKOJIE, she reveals what inspired her West Africa. Nigeria used To establish a 20 hectare plantation a sum of N14,000,000 to establish her graphic business and reveals that she sells her designs to be the will be required broken down as follows: via online to Nigerians in the Diaspora, including foreigners. Oworld’s largest producer Pre-Investments N300,000 of oil palm before the Land Acquisition N7,500,000 Tell me a about yourself? crude oil boom era. Land Clearing/Preparation N3,000,000 y name is Malaysia has now taken Seedlings procurement Tolulope Ade- the leading position. Oil 120/hectare (2400 @ N500) N1,200,000 palm plantation and bukola Odu- Other Cultural practices @ dokun. I have allied industries is now N100,000/hectare N2,000,000 bachelor’sM degree in Bio- the main stay of Malaysian chemistry. I am a graphic economy. Malaysia came TOTA N14,000,000 artist. My graphics translate to Nigeria in the 70s to Various governments (Federal, States and Local) can into paper print and textile obtain oil palm seeds and also set up this project and lease it out to individuals and printing, so I am involved seedlings. corporate bodies on maturity. It is a way of diversifying the in both fashion and paper Oil palm can be used economy and also to create jobs and income opportunities merchandising business. in various ways; the leaves for Nigerians. It is also one of the strategies for food security Pawprint has two subsid- are used in making brooms in the country and also in line with the transformation iaries: Rhinestone Limited and as roofing materials agenda of the present Federal Government of Nigeria. and Addict. (in the rural areas). The What inspired you to go bark of the fond can be industrial raw materials year. into the business? peeled and woven into such as mosquito coils. Other requirements Making designs is my baskets. The uses to which oil include seedlings hobby. It was my passion The main trunk can be palm can be made seem procurement; this can be that led to the establish- split like sawn timbers and non exhaustive. This obtained from reputable ment of Pawprint Lim- used as part of building clearly indicates that nurseries. Prospective ited in 2008. In my quest materials. Palm wine investment made in the investors must engage the to improve my skills in can be obtained from establishment of oil palm services of Agricultural sketching and making de- oil palm, red palm oil is plantation is nothing but experts in the course of signs, I enrolled for free readily obtainable from the a wise one. The market establishing this project. online classes. After my fresh fruit bunches. When is guaranteed for all the Other cultural practices National Youth Service the fruit is processed the products of oil palm are planting, regular Corps, I worked for eleven residue obtained can be plantation in this era of weeding, pruning and months as a retail adviser used as fuel (for cooking global food crisis. fertilizer application. for Etisalat Nigeria. I started and fertilizer to improve Technical information Serious minded investors learning designs online, soil nutrient). Red palm To establish oil palm will be guided accordingly and doing printing on pa- oil is used in cooking, plantation, it involves in the implementation of pers, calendars and annual making soap, candle and Tolulope Adebukola Ogundokun getting a good site where this project. reports, but I soon realised margarine. Palm kernel rich, well drained acidic Income analysis that this was a seasonal oil can be extracted from soils are abundant. The A matured plantation business. So, I decided to business. Another challenge everyone who wants my the nut. soil should have adequate will start to give investor start designing for textiles I face is getting paid in dol- services. The residue obtainable quantities of potassium, five 5 tons per hectare because people wear cloths lars. I sell my designs online Most SMEs fail five in the process of palm magnesium and nitrogen. of red palm oil annually every day. This decision has to Nigerians in diaspora and years after starting. What kernel oil extraction Soil tests should therefore from the fourth year per brought a lot of cash flow even foreigners. They pay in has kept you for seven otherwise called palm be carried out to determine hectare. 100 metric tons into the business. I got a dollars but the banks would years? kernel cake is used as the nutrient status of the of oil can be obtained scholarship from Goldman credit my account in naira. When I started off as livestock feed. Palm kernel land. annually from 20 hectare Sachs to study Entrepre- I need the dollars to buy my a printer, I realised that oil is used in vegetable oil It is usually better to use plantation. A ton of red neurial Management in La- fabrics because I import 50 printing was seasonal. I de- and soap making. Palm the early maturing variety palm oil is a minimum of gos Business School. After percent of my fabrics and cided to go into designing Kernel shells are also called tenera, which bears N150,000. Gross revenue my scholarship, I won the source the other 50 percent for clothes. The business useful as energy source and fruits as from the fourth of N15 million is obtained Federal Government Youth locally. Infrastructure is also has survived seven years from red palm oil. Enterprise with Innovation a major challenge. I need because I increased my We can also get three in Nigeria (YOUWIN). I electricity to power my ma- product offerings. I am in metric tons of palm kernel used the grant to expand chines and the issue of poor the same line of business per hectare. This gives us my business and buy ma- electricity supply has been but I keep increasing my 60 tons from 20 hectares. chines for my rhinestone frustrating. I spend a lot on products to meet every- This translates to annual company. fuel and this has increased one’s needs. income of N4.2 million. Would you say the YOU- my production cost. What is your advice Total income realisable WIN programme helped What is your start-up to other entrepreneurs, is about N19.2 million your business? capital? especially the young ones while the annual operating It’s a very good initia- I started my business that want to venture into expense is put at N5.8 tive by the government. It with no capital. In print- your kind of business? million. helped in the expansion of ing, when you get a con- If you must continue This leaves us with net my business and the modes tract, your client pays you to stay in business, you income N13.4 million of payments were perfect. upfront so you are able to must constantly come out annually for the investor What challenges have do the job. I had nothing with products that meet for the rest of his/her live. you faced so far? when I started and now the needs of the people. I There are still other sources My biggest challenge is my business has grown decided to start designing of income such as palm my employees. Most Nige- tremendously. for others because people fronds and palm kernel rian artisans are not ready How would you say wear clothes every day and shells. Serious minded to work but they want to your business has grown this has brought a lot of investors can be assisted make money, defraud you since starting and who are cash flow into the business, in the realisation of this at all cost and run away your target clients? as I said earlier on. Now, I worth while investment. with your ideas. About 90 My business has grown make designs using stones Author’s contact: percent of my staff mem- tremendously since I start- for my clients on Aso-oke, Tel: 080-23058045, bers are from Benin Repub- ed and I have even opened T-shirts and other fabrics. 08152596985, 080- lic. I don’t like employing other lines of business. I keep introducing new 33660177 E-mail: Nigerians because all they I target corporate bod- products and expanding olumakindeoni@yahoo. want is to frustrate your ies, Aso-Oke vendors and my market base. com 36 BUSINESS DAY C002D5556 Monday 09 January 2017 In association with Harvard Business Review MondayMorning

What so many strategists get wrong about digital disruption FREEK VERMEULEN rather than rely on a database, a matching platform or some udging by the headlines, other digital search function, digital is about to disrupt they understood that there’s no your industry. I don’t dis- substitute for really getting to agree. But in most busi- know people. They developed nesses, digital’s impact a team of about 20 partners Jwill be different from that faced who maintain relationships by behemoths like Amazon. and interact regularly with com, Google and Facebook. about 700 consultants and over Here are four guidelines for 300 major clients. managing the disruption. 4. Speed? Not so fast. 1. Winner doesn’t always If in a fast-changing indus- take all. try you change equally fast, Many digital business you’re likely to jump into all models rely on networks. The sorts of fads. Remember “Sec- more users and content pro- ond Life,” the online virtual viders that sign up, the better world? It was supposed to be the network. But networks are the next big thing. Dutch bank rarely exclusive. Travel to Sin- ING rapidly assembled a large gapore, for example, and you’ll team to explore the new tech- see why. Every taxi driver has nology, develop applications at least two mobile phones in geographic distance is less rel- and market its products in the est. online learning will render lec- her window: If a ride comes in evant today since we can now virtual world. “Second Life” 2. Complements aren’t tures obsolete and that brick- on one network, she will click communicate instantaneously turned out to be a fad, and substitutes. and-mortar colleges will be “accept” and turn the other off. with anyone, anywhere. But ING’s big investment came to More often than not, digital replaced by online universities. Similarly, most riders have at closeness still matters. The nothing. will complement a business However, this isn’t what seems least two apps on their smart- strategy consulting firm Eden (Freek Vermeulen is an as- rather replace it. Consider my to be happening. phone. When they need a ride, McCallum developed a busi- sociate professor of strategy own field of higher education. 3. Geography (still) mat- they use the app where a taxi is ness model based on a pool and entrepreneurship at the Many have proclaimed that ters. available quickest and cheap- of freelance consultants, but London Business School.) Some people assume that 80% of companies don’t know if their products contain conflict minerals

YONG H. KIM AND GERALD F. DAVIS dates that companies listed on party auditing system and has American stock markets dis- stopped doing business with s outsourcing has close whether their products dozens of smelters and refin- become an in- contain “conflict” minerals: ers. Industry groups have also creasingly com- tantalum, tin, tungsten and made progress in identifying mon approach gold originating in the Demo- conflict-free smelters in the to cutting costs, cratic Republic of Congo or region. Amany producers now rely adjoining countries. Trade Despite the real possibil- on globally dispersed supply in those minerals by armed ity of Dodd-Frank being “re- chains. Apple, for example, groups appeared to help fi- vamped” under the Trump works with at least 200 suppli- nance conflict in the region. administration, these efforts ers and 242 smelters and refin- We analyzed conflict min- are paying off. Prices of veri- eries around the world. It’s no erals reports submitted to the fied conflict-free minerals are wonder that so many consum- U.S. Security and Exchange reasonable doubt. Eighty per- 30,000 third-tier suppliers. now substantially higher than ers have no idea where their Commission for the past three cent admitted that they were A few firms, such as Intel, those of untraceable miner- favorite brands come from. years. Filing companies were unable to determine their raw recognized early on that the als. But are businesses any better primarily based in the United materials’ countries of origin. only way to tackle the prob- informed than their custom- States, but they also included One supply chain manager lem was to investigate the (Yong H. Kim is a doctoral ers? foreign firms listed on U.S. told us that his multinational smelters that process tanta- candidate at the University In 2010 the U.S. Congress stock markets. Only about 1% Fortune 500 company had lum and certify the ones that of Michigan’s Ross School of passed the Dodd-Frank Wall of the companies were able over 1,000 first-tier suppliers, rely on conflict-free sources. Business, where Gerald F. Da- Street Reform and Consumer to declare that their products who in turn had 8,000 second- Apple implemented a third- vis is a Protection Act, which man- were conflict-free beyond a tier suppliers, with perhaps (C) (2017) Harvard Business Review. Distributed by New York Times Syndicate Monday 09 January 2017 C002D5556 BUSINESS DAY 37 In association with

trade,” Jacobs said. REAL SECTOR WATCH He cautioned, however, that the expected improve- Experts predict manufacturing ment would depend on the effective implementation of the proposals highlighted in the budget as well as the quantum of dollars allocated rebound on oil price, 2017 budget to the manufacturing sector. Bassey Edem, national president of the Nigerian Stories by ODINAKA ANUDU Association of Chambers of Commerce, Industry, Mines xperts say the ris- and Agriculture (NACCIMA), ing crude oil price said the manufacturing sec- and the 2017 tor and the entire economy budget recently could get out of recession presented to the if the capital infrastructure NationalE Assembly by Nige- funds in the budget are spent ria’s President Muhammadu on railways, roads and power. Buhari could force manu- Edem said a rise in oil price facturing rebound and ease is good news for manufactur- the pains of stakeholders ers, stating that if the right this year. steps are taken the economy “Going by the budget could start seeing the light presentation and new year from the last quarter of 2017. message of Mr. President, Ifeanyi Okeleke, CEO of Ken- the manufacturing sector, francis Farms Limited, fore- and trade may perform better cast that there would likely this year, especially with the be less pressure on the foreign improvement we are seeing exchange market this year, in the crude oil price,” Frank with the oil price going north. Udemba Jacobs, president “Again, the 2017 budget of the Manufacturers As- has a lot of areas that show sociation of Nigeria (MAN), eign exchange inflows. Export Expansion Grant as sion Grant (EEG) in the form talisation of Bank of Industry, government commitment to told Real Sector Watch in an Higher dollar inflows well as the recapitalisation of tax credits to companies. resuscitation of the Export the real sector. This is a strong e-mail response to questions. mean more dollars for manu- of development banks in Fifteen billion naira was Expansion Grant (EEG), de- statement that the govern- The price of Brent Crude facturers to import machin- Nigeria. likewise voted for the re- velopment of local inputs ment sees the potential in was $56.47 per barrel last ery, spare parts, as well as While the 2017 budget capitalisation of the Bank for manufacturers and the the real sector. If you check Thursday, signifying about packaging and raw materials, set aside N50 billion for the of Industry and the Bank of emphasis on infrastructure export analysis of the third $20 rise from July of 2016. analysts say. expansion and development Agriculture. are some of the pronounce- quarter of 2016, you will see This signals that there could Similarly, the 2017 budget of new export processing and “The budget talked about ments made in the budget that agriculture, manufactur- be more dollar inflows this made provisions for N85 bil- special economic zones, it developing SME, manufac- presentation that tend to- ing and solid minerals played year, as crude oil remains lion for the revival of export also voted N20 billion for the turing and trade in so many wards the development of a key role,” Okeleke said. Nigeria’s major source of for- processing zones and the revival of the Export Expan- ways. For instance, recapi- SME, manufacturing and Manufacturers to expand local sourcing of raw materials in 2017

he foreign exchange “I can tell you that what their letters of credit in 2016 that the firm got only two sociation of Nigeria (MAN). business areas that were crisis of 2016 is forc- happened last year was an and were forced to wait for percent of its dollar needs However, Frank Jacobs largely dependent on for- ing a paradigm shift eye opener. Manufacturers 30 to 90 days to get dollars throughout August 2016. told BusinessDay recently eign exchange to businesses in the Nigerian now want to source more of needed for the importation Oke said Leventis Foods, that firms were going into whose raw materials could manufacturingT sector as their inputs in the country of raw materials, spare parts which used to produce 1.5 backward integration and be sourced at least 90 per cent many players have pledged and less from abroad,” said and inputs. million loaves of bread ev- seeking local alternatives to locally. to pay more attention to the Ike Ibeabuchi, CEO of MD Firms were likewise forced ery week by June 2015, now imported raw materials. Ikpong Umoh, chairman locally available inputs this Manufacturing Limited, a to halt production owing to churns out only 400,000 He said manufacturers of the Cosmetics and Toilet- year. producer of chemicals. the non-availability of raw loaves weekly because of were equally fabricating more ries Group of MAN and man- According to manufac- Manufacturers fought materials, pushing them into dollar challenge. local machinery that would aging director of Stellarchem turers who spoke with Real their biggest battle in the issuing sack letters to thou- The foreign exchange suit domestic inputs. Nigeria Limited, said he is Sector Watch, no company is outgone year as they battled sands of workers. crunch forced the closure of Abdulsamad Rabiu, chair- aware that some members of ready to go through the pains to get the scarcely available Joseph Babatunde Oke, 54 manufacturing firms in man, BUA Group, said in the group are doing a lot more of searching for dollars to im- foreign exchange from the immediate past chairman, the country in 2016, accord- a statement that the firm work to utilise the available port the majority of its inputs. local market. Firms opened A.G Leventis, complained ing to Frank Jacobs, president had gradually divested from local raw materials. of the Manufacturers As- 42

38 BUSINESS DAY C002D5556 Monday 09 January 2017 REAL SECTOR WATCH ‘Shoe makers in Aba are hindered by poor infrastructure’ OKECHUKWU WILLIAMS is the president of the Leather Producers Manufacturers Association of Abia State (LEPMAAS), an association of shoe, bag and belt makers in Aba. In this interview with GODFREY OFURUM in Aba, he explains why the association set up a loan monitory and recovery committee and stressed the need to improve infrastructure in the finished leather cluster in Abia State, among other issues.

hy did you Growth and Employment take-off by sponsoring the constitute in States (GEMS1). We also initial products and then a loan experienced difficulty in arrange the off-takers to monitoring people surrendering their patronise us. We expect andW recovering identities, but we even to determine the volume committee? advised them to put more of business that would go The institutions we are efforts in sensitising the through that chain. working with wanted to people. Common Facility be assured that we were And when they got into Centre (CFC) has been reliable and we felt also that the field, it wasn’t as easy as lying fallow for the past it was necessary to form they thought. The exercise 8 years. Why are your a formidable committee has dragged and what we are members not using that that wiould monitor the now doing is to re-strategise facility? beneficiaries to ensure they on the next approach. Leather production is complied with repayment We have hosted a website done sequentially. As a procedure. and we want to give room result, machines must be We want to make sure to members that are yet to within your workshop or that beneficiaries do not register, to so. very close to the workshop default with repayment. How is your relationship for effectiveness. How are beneficiaries with MADE? The cluster and the of the Bank of Agriculture Outside access to finance, location of the CFC are far (BoA) complying with they have also supported apart and that is the basic repayment? LEPMAAS in the training of reason why the facility is Compliance level has our members. They are also underutilised. However, been tremendous. People planning to encourage rural that place should not be are complying, especially women to go into finished seen as a production centre, beneficiaries of the 2nd leather goods marketing. but should be looked at as batch, facilitated by MADE. We are trying to partner with a training centre, so that The process of the the Common Facility Centre government can open it disbursement of the (CFC) in the project. up for training. Institutions first tranche, facilitated They want to do the initial and development partners by GEMS 1, was hasty. can use that facility to train The GEMS 1 project was people. wrapping up and they What are other wanted to strengthen their challenges faced by the report and so people were finished leather cluster? not properly educated on Our major challenge is the programme. So, some market access. Market is a took the loan, thinking it Most of our force and when it begins was a largesse. members have to develop, it goes with However reports on everything you are doing. the performance of the also been Even the standard and beneficiaries of the 2nd quality of our products go batch reveals serious able to keep with the market. So, when compliance, which could we start developing this be attributed to series of records and market, there will be market training on book-keeping, manage their for all classes of the society- organised by GEMS 1 and upper, middle and the lower Okechukwu Williams MADE. businesses class. From your experience, properly, an Looking at the cluster, it is how is the loan impacting a more complex thing to one. And since people enumeration. And we more of a death trap. It is not on your production? what we are doing here. It are interested in what we advised them to sensitise indication healthy, infrastructure wise. The impact is very is very difficult to determine are doing, I will plead on our members first, because I will tell you that Powerline positive, the production the standard of finished government to partner with the finished leather sector that the in the past two weeks has capacity of so many leather goods, because we relevant institutions to help in Aba is decentralised. intervention been without electricity. beneficiaries have don’t have the equipment in the standardisation of our We have 12 zones within And Powerline is the only improved. Most of our to determine quality. Some products. Ariaria and these clusters efforts of DFID zone with a motorable road. members have also been of the pieces of equipment How are your members have been in existence Other zones like Omenma, able to keep records and are in Kaduna at the Leather complying with the on- before the formation of through GEMS Plaza, and Umuehilegbu manage their businesses College. However, we are going enumeration of LEPMAAS. So, if you want to Industrial Market are not properly, an indication that making arrangement artisans in Aba? take up any activity within 1 and MADE are habitable, but people are the intervention efforts of with them to see whether Unfortunately the the cluster, it must be done paying off producing there daily. DFID through GEMS 1 and a branch of it could be compliance is very low, in consultation with the It is quite unfortunate MADE are paying off. established in Aba, to help because a lot of things administrative systems in that this cluster was not What are you doing to the Aba finished sector have happened within the the zones. actually designed for ensure standardisation operators. industry in the past. People But the Marketing Agency industrial purpose. And of your products to But as an operator, I can do not believe everything. was in a hurry to go into the that is why we are pleading enable them to compete identify a quality shoe from LEPMAAS was consulted exercise. LEPMAAS haven’t with the state government to favourably at the the materials used and the by the Abia Quality and done that on a pilot phase provide a conducive place international market? finishing. I can identify a Marketing Agency, which in two different occasions, for the finished leather Standardisation is new shoe sole and a recycled is responsible for the through the support of the sector. Monday 09 January 2017 C002D5556 BUSINESS DAY 39 Economic crime and the rule...

Continued from back page nomic and Financial Crimes benefit as a reward or in- Convention Against Trans- stitutional controls. Failure There is also the reality of Act 2004 defines an eco- ducement to sway or deflect national Organised Crime; to prosecute and sentence ‘path dependence’. Accord- without fear or favour and nomic crime as, “the non- the receiver from honest and the UN Convention Against often means that corrupt ing to an African wisdom resist any encroachments violent criminal and illicit impartial discharge of his Corruption; the Financial behaviour is treated with saying, “a bad habit that by governments or political activity committed with the duties”. This is a rather limit- Action Task Force Conven- not so much as a rap on the lasts more than a year may parties on their independ- objectives of earning wealth ing definition. Corruption is tion (FATF); UN Convention knuckles. In China grand turn into a custom”. Once ence as judges; (4) Lawyers illegally either individu- much more than bribery. It for the Suppression of the corruption attracts capital a society is set on a given of the world should preserve ally, or in a group… thereby involves influence peddling Traffic in Persons and of the punishment. It is treated as course, the collective mind- the independence of their violating existing legislation and various stratagems that Exploitation of the Prostitu- a violation of national secu- set, culture, institutions and profession, assert the rights governing the economic ac- defeat the goals of public tion of Others; and the Sto- rity. In Nigeria, by contrast, the orientation of dominant of the individual under the tivities of government and its policy. len Asset Recovery Initiative no member of the elite has elites would tend to follow Rule of Law and insist that administration”. Some of the Economic crime is a ma- of the World Bank. ever spent 10 years behind that trajectory, gathering a every accused is accorded offences listed include fraud, jor challenge for our country Globalisation and inter- bar for corruption or abuse momentum of its own. This a fair trial. narcotic drugs trafficking, as it is for many parts of the nationalisation have made of power. Nobody has ever would seem to conform to According to one defini- illegal arms dealing, illegal developing world. It thrives corruption to thrive more truly suffered disgrace for Sir Isaac Newton’s first law tion, economic crimes “refer oil bunkering, tax evasion, best where controls are lax; than before. Linked to the defrauding the state. And no of motion in physics which to illegal acts committed theft of intellectual prop- in an eco-system in which preceding is the collapse of one has ever been banned states: “In an initial refer- by an individual or a group erty, open market abuse, institutional state capture by our age-old traditional val- from holding public office ence frame, an object either of individuals to obtain a dumping of toxic wastes powerful groups encourages ues. In divided societies such because of bribery, fraud, remains at rest or continues financial or professional ad- and prohibited goods, fo- a politico-economic alliance as ours, corruption thrives corruption or other high to move at a constant veloc- vantage. In such crimes, the rex malpractices, currency between the state and the because there is no shared crimes of state. ity, unless acted upon by a offender’s principal motive counterfeiting, money laun- private sector in a manner sense of community and In our own context, I net force.” Nobel laureate is economic gain”. dering, embezzlement, brib- that robs both government no commonly shared mor- would say that the political Douglass North has noted Economic crime covers ery, looting and any form of and society. The British po- al purpose. The paradigm economy of the rentier state that path dependence is set of offences ranging from corrupt malpractices. litical philosopher, Isaiah of public choice theory in has an inherent propensity one of the most enduring bank frauds to tax evasion Although some authori- Berlin, put it down to what neoclassical economics pro- to generate a market for cor- features of economic his- and money laundering to ties would want to maintain he termed “the crooked vides yet another explana- ruption. Our oil depend- tory, in which the historical cybercrime, bribery, em- a strict distinction between timber of humanity”. tion for corruption. When a ent political economy has matrix of an economy and bezzlement, peddling of economic crime and cor- The problem we have is government official decides been based on collecting its institutional architecture influence for private en- ruption, I would prefer to not insufficiency of the laws, to engage in corrupt behav- rent from multinational oil constrain future choices richment, fraud, tax Eva- use them interchangeably. but, rather, that of imple- iour, it can be presumed to companies which is then while limiting the possibil- sion, identity theft, human To borrow the language of mentation. Apart from the be predicated on the basis shared out on a monthly ba- ity for altering the existing trafficking, drugs traffick- Venn diagram set theory criminal and penal codes, of rational calculations. He sis between the three tiers of trajectory. ing, insurance fraud, credit in mathematics, economic there are at least seven major would have calculated that government according to an card, cybercrime, advance crime should be viewed pieces of legislation against the returns from corrupt agreed formula. Much of the (Being the Abridged Text fee, trade offences, customs as a subset of corruption. economic crime. Nigeria behaviour outweigh both wealth from oil gave us the of an Address Delivered at fraud, smuggling, exchange As far as Nigerian law is is also a signatory to sev- the chances of being caught illusion of wealth which was the End-of-Year Dinner of control violations, money concerned, in the case of eral international treaties and costs of punishment not based on productivity or MIVE Legal Services (House laundering and currency Biobaku v Police, Bairamian, and conventions relating if they were every caught. disciplined application. In of Justice) at Prestige Hotel, counterfeiting. J. defined corruption as “the to prohibition of economic Corruption thrives where addition, the Dutch disease Kaduna, Tuesday 20 De- Section 46 of the Eco- receiving or offering of some crime. These include the UN there is an absence of in- syndrome was rampant. cember 2016). The 2017 Budget speech...

Continued from back page firms would have the incen- Adam Smith said that trade tive to produce quality goods restrictions cannot serve the opportunities to export pro- for export markets when they public interest. cessed agricultural products can easily take advantage of a Yet, President Buhari said and manufactured goods”. protected market at home? It that the “underlying philoso- So, if imports destroy jobs in is often said that “industries phy” of his government’s eco- Nigeria, won’t Nigeria’s ex- than can compete globally will nomic recovery and growth ports cause job losses in other thrive locally”. But companies plan is to use monetary, fiscal countries? How disingenuous! than cannot compete inter- and trade policy instruments Of course, in truth, Presi- nationally can only survive at “to promote import substitu- dent Buhari is instinctively home if propped up by gov- tion”. Essentially, this means mercantilist. He believes that ernment protection. They are exchange controls, import export is good, import is bad! zombie firms! bans and prohibitive tariffs; “Under my watch”, the presi- But when a government it means a closed economy! dent said, “we will grow what protects domestic industries These, you will remember, we eat and consume what we from international competi- dear readers, were the same make”. Really? Which country tion, it harms consumers and policies Buhari pursued ever does that? This is mer- the economy. This is because as military head of state in cantilist populism at its worst. protectionism transfers in- 1984/85. They failed woefully But, forget about the fallacy come from consumers to pro- then; they are unlikely to suc- of self-sufficiency, the idea ducers and distorts economic ceed now! Worryingly, Presi- that Nigeria can ban or put incentives. For example, in dent Buhari said in his speech: prohibitive tariffs on imports, a recent article in The Wash- “I will stand my ground and while also promoting its own ington Post, an economist maintain my position”. Clearly, exports, is like living in cloud argued that when the US im- the president doesn’t under- cuckoo land. It has no place posed restrictions on Japanese stand the power of economic in today’s globalised and in- cars in the 1980s, the policy incentives and the danger of terconnected world! created 44,100 US jobs. But economic distortions. What’s more, protection- the cost to consumers was To be clear, there’s nothing ism will also harm exports. $8.5 billion in higher prices. wrong with encouraging the According to the Lerner sym- Furthermore, as this cost re- use of Made-in-Nigeria goods, metry theorem, imports and duced what consumers spent but this must be achieved exports are the flip side of on other goods, there were through exhortation and same coin; and restrictions more job losses in other sec- market-based incentives and on imports act as restrictions tors of the economy than the not trade restrictions. Truth on exports. When you restrict additional jobs created in the is, only openness and com- imports, particularly of raw protected industries. So, here petition can help Nigeria’s materials, you raise produc- is the read-across. While the economy adjust, recover and tion costs in the industries Buhari government’s social grow. And the key tools are that use them, and hamper intervention programme is flexible exchange rate and their productivity and abil- intended to reduce poverty in trade liberalisation. President ity to compete and export. Nigeria, its protectionist poli- Buhari must learn the lessons Furthermore, protectionism cies will actually make more of economic history, including creates anti-export bias. Few Nigerians poorer! This is why from his own past! 40 BUSINESS DAY C002D5556 Monday 09 January 2017 LUXURY REAL ESTATE Aspen View: luxury for sophisticated investors Stories by ISAAC ANYAOGU he luxury market in highbrow areas of Lagos has options for high end investors who are into exqui- siteT luxury and these occupy the spectrum of choice luxury property. In recent times, there is an upsurge of luxury property for investors who want options that are quite luxurious but is afford- able especially for those hoping to raise families in a neighbour- hood that is decent yet chic. Aspen View aspires to live up this expectations. It comprises seven exclusive buildings set around beautiful landscaped gardens and walkways, strategi- cally located in Park View Ikoyi. Parkview Estate is a luxuri- ous suburb of Ikoyi in Lagos. It is bordered by Gerard Road and Banana Island. The estate is majorly residential. However, some private firms have offices and guest houses in the estate. cess to both Victoria Island and luxurious high-end finishes rage, expansive (4) four en-suite the private 2-car garage on the The estate also hosts several the mainland. and material specifications at bedrooms, one of which is a very ground floor up to the superbly hotels like Pearl Court Residence It is in this vicinity that As- international. Each Townhouse impressive master bedroom with appointed master penthouse. & Hotels, Parkview Astoria Hotel, pen View developments offer a display a signature sleek style, great proportions. The structure of the develop- Upperclass Suites and several spectacular 4-level urban abode sensible interior design with a The development features ment gives evidence of attention others for the sophisticated family or private elevator and terraces at opulent well lit surroundings to the least detail. This will be The development is just min- investor. each living and bedroom space. with well landscaped courtyards seen in the dedicated private utes from the heart of Lagos’ Aspen View is a joint devel- Each unit features (1) dedi- and garden and 24-Hr secu- elevators for each of the unit and most exclusive commercial and opment by Design Union and cated private elevator, 2-car ga- rity. Private elevators serve each designing living rooms with wide social districts as well as easy ac- Pacific Resources, and features 4-level townhouse going from spaces and quality finishing. Ambiance, space and functionality stands out Visage Apartments

esidential property upon which they are built during developments see more hours of each day and by investment deci- more people than a single-use sions fluctuate based building would be able to do. on the state of the Mixed-use developments are economyR and of the real estate on the rise in highbrow Lagos market and they often take the form of a In a rising markets, interest is single building, or several build- fired by different publicity -op ings or entire neighbourhoods. tions and terms employed by the Amenities at Visage Apart- developers but nothing is more ments property include a swim- effective than a development ming pool, a gym, garden areas, that oozes the aura of ambience, servants’ quarters, driver’s wait- functional spaces and a luxuri- ing room, standby generators, ous feel. water treatment plant amongst Visage Apartments promise others. just these in its multi-storey, “Those who live in these de- mix-build property development velopments do not have the of comprising 42 apartments same dependence on a car that on approximately 7,250 square people who live in traditional at Teslim Elias Close, Victoria neighbourhoods have because Island, Lagos. they can walk or bike to work “The Visage Apartments offer and to run many of their errands, a unique blend of quality urban making it easier for them to stay living, providing space, ambi- active and function without a ence and functionality with a vehicle,” stated Engineering luxurious feel. All the rooms Groupe, a blog on mixed use are large and very generous buildings. enabling maximum comfort and Located strategically within relaxation,” said a statement on the heart of the business hub the website of the developers. itself, it is a stone-throw from As a mixed-use development, Adeola Odeku Street, Federal industrial uses, where those and residential space into a sin- it blends residential, commer- that provides pedestrian con- Palace Hotel, Silver Bird Galleria, functions are physically and gle project, mixed-use develop- cial, cultural, institutional, or nections. and the new Eko Atlantic City. functionally integrated, and By incorporating retail, office, ments take advantage of the land Monday 09 January 2017 C002D5556 BUSINESS DAY 41

Read Ambitiously

pour tens of billions of dollars into investments in semiconductors How Samsung weathered the Galaxy Note 7 recall and display panels to make phones run faster, hold more storage and offer crisper images. Recent ad- TIMOTHY W. MARTIN & EUN-YOUNG JEONG vancements have made Samsung’s components more powerful than strong earnings forecast those of its competitors, making from Samsung Elec- Samsung an essential parts sup- tronics Co. on Friday plier for many of its rivals. offered a fresh remind- This friend-and-foe dynamic Trump tweets er of the company’s means Samsung can profit, for centralA place in the global technol- instance, even when a consumer threats, testing ogy supply chain. ditches a Galaxy phone for a com- Even with the recall of its pre- petitor’s product. mium Galaxy Note 7 smartphone “If Apple does well, Samsung Toyota in early October last year that benefits from that,” said Sanjeev cost it at least $5 billion, Samsung Rana, a senior analyst at CLSA, a early 30 years after Toyota projected profits for the last three brokerage, in Seoul. Motor Corp. opened its months of 2016 that would be the The smartphone slowdown, Nfirst U.S. car factory, the highest in more than three years. however, has left some firms vul- company again finds itself in the The boost in profits didn’t come nerable. For instance, LG Electron- position of having to prove its from its own lineup of premium ics Inc. said Friday that it expects worth as a local job creator after a smartphones, but rather from lion Korean won (US$7.76 billion) parts of devices not visible to most to report its largest quarterly loss tweet by President-elect Donald competitors like Apple Inc., Dell in seven years since the company Trump. Inc., HP Inc. and Sony Corp., in fourth-quarter operating profit consumers. also illustrates a shift in where tech Global smartphone shipments shifted its accounting standard After Mr. Trump said “No way!” whose smartphones, laptops and during the last three months of to Toyota’s plans to build a factory televisions rely on components industry profits originate. have slowed sharply, falling to an As recently as 2014, Samsung’s annual growth rate of less than 1% 2016. Analysts say the huge hit was in Mexico and threatened to slap manufactured by the South Korean most likely driven by its mobile a tariff on imported cars, shares technology giant. mobile phones were the cash cow. last year, according to a recent es- But with consumers no longer timate by research firm IDC, from division, which is projected to have in the world’s largest car maker Samsung’s ability to shake off bigger losses than its record loss in by market capitalization fell 1.7% the recall of 2.5 million Note 7 snapping up new phones every 10.4% in 2015 and 47% as recently year, the world’s biggest maker of as 2012. the previous quarter. On Friday, LG in Tokyo on Friday. smartphones last year shows how estimated that it would lose 35.3 The tweet sent a chill through even when the South Korean con- memory chips and smartphones Even as smartphones were sell- by shipments is finding that there ing strong, Suwon, South Korea- billion Korean won in the fourth the industry. Shares of major glomerate loses, it can still win. quarter of 2016. Japanese and South Korean auto Samsung’s Friday forecast of 9.2 tril- is plenty of profit to be made in the based Samsung continued to makers fell by as much as 3% on Friday, after the president-elect broadened his criticism of the auto industry to include a foreign China doubles down on defending its currency car maker with extensive opera- tions in the U.S. Mr. Trump had SAUMYA VAISHAMPAYAN Despite those moves, the yuan recently targeted General Motors weakened Friday both onshore Co. for importing some produc- hina continued to squeeze and off--falling 0.6% to 6.9230 tion from Mexico. the global market for the versus the dollar in the domes- Earlier this week he had wel- yuan Friday, sending the tic market and 1% to 6.8578 comed an announcement by Ford cost of borrowing the cur- in late trading in Hong Kong. Motor Co.—a Trump campaign Crency in overseas markets soaring That eroded some of the yuan’s target—to cancel a planned new to a near-record high. sharp appreciation from earlier plant in Mexico. Investors and analysts say the in the week, when the currency The Japanese government on nosebleed rates are likely to con- jumped 2.5% against the dollar in Friday moved to defend Toyota. tinue as China’s central bank bat- two days on the PBOC’s steps to “Toyota is here today because tles to keep the country’s currency tighten liquidity offshore. it strives to be a good corporate from weakening too far and fast. One of the primary targets of citizen of America,” Chief Cabinet The rate that banks charge the PBOC’s moves is investors each other in Hong Kong’s trying to bet on a decline in the Secretary Yoshihide Suga said, yuan by borrowing the currency echoing Toyota executives’ state- Apple CEO Cook’s 2016 pay lower overnight lending market for the yuan jumped to 61.3% on in Hong Kong, swapping it for ments the previous day. dollars and later swapping it back Many in Japan’s auto indus- Friday--the highest in a year and the second-highest level at a more favorable rate. That trade try remember the rancor from as tech giant misses targets becomes more expensive as yuan 1980s trade tensions, when U.S. on record. That rate was 38.3% the first prolonged slump in on Thursday, and has remained borrowing costs rise, which can politicians pointed the finger at AUSTEN HUFFORD force investors to abandon those inexpensive Japanese cars as the iPhone sales. The smartphone above 10% since Dec. 30. accounted for 63% of Apple’s Although that offshore yuan- bets by buying back yuan, in turn culprit behind layoffs in Detroit. pple Inc. said Chief driving the currency higher. Executive Tim Cook annual revenue, but growth lending rate isn’t set by the Peo- In 1988, as Toyota sought to ple’s Bank of China, the central “It’s super painful to hold short generate jobs and goodwill while and other top leaders in the market has slowed and positions in [the yuan] when the received less compen- consumer buying habits are bank can effectively control it by producing more cars closer to directing state lenders to with- funding costs are soaring as they points of sale, it began operat- sationA in 2016 as the company changing. Apple said it sold are at the moment,” says Christof- hold yuan from other banks, ing its largest manufacturing missed its revenue and profit 45.5 million iPhones in its fiscal something it has been doing fer Moltke-Leth, director of global plant outside Japan, churning out goals for the year. fourth quarter, 2.5 million fewer recently. sales trading at Saxo Capital Mar- Camrys made in Georgetown, Ky. According to a regulatory than a year earlier. The PBOC also set its daily kets in Singapore. About 70% of Toyotas now sold in filing on Friday, Apple said its Mr. Cook’s pay fell 15% last “fix”—the price that determines However, some investors say the U.S. are made locally. annual sales of $215.6 billion year versus a 9.6% average de- the yuan’s trading range in the Chinese officials could also be Toyota broke ground on the $1 were 3.7% below its target of cline for Apple’s other named domestic market—0.9% stronger anxious about the country’s billion Corolla plant in the central- against the U.S. dollar on Friday, foreign-exchange reserves, which $223.6 billion, and its operat- executives, as cash incentives have been falling as the central Mexican city of Guanajuato in ing income of $60 billion was make up a larger percentage of its biggest increase since 2005 November and plans to begin when the bank surprised markets bank taps them to defend its 0.5% short of the $60.3 billion his compensation. Pay for Chief currency. production there in 2019, targeting target. Financial Officer Luca Maestri by removing its dollar peg. 200,000 Corolla compact cars a As a result, company execu- fell 10% to $22.8 million, which year for the North American mar- tives didn’t get their full poten- includes about $20 million in ket. Production of the Corolla will tial cash incentive. In each of stock awards. move from Cambridge, Ontario, to In a filing last August, Mr. the new plant in Mexico, although the four preceding years, the Corolla cars will continue to be built executives got the maximum Cook said he received 1.26 at Toyota’s plant in Mississippi. total payout amount. In all, Mr. million Apple shares, valued Mr. Trump’s tweet appeared Cook received $8.75 million in around $135 million at the time, to confuse the new plant with total 2016 compensation, down that previously were restricted. Toyota’s existing Mexico facility in from $10.3 million in 2015. Mr. Cook earned the bulk of the Baja. Toyota said in September it Other executives also received shares by remaining CEO for planned to increase capacity at the lower pay. five years. He earned additional existing plant in Baja that makes Apple last year faced declin- shares because of Apple’s stock pickup trucks, but no sedans. ing revenue as it grappled with performance. 42 BUSINESS DAY C002D5556 Monday 09 January 2017

Read Ambitiously Saudi Arabia cuts output in accordance with OPEC deal

BENOIT FAUCON & KEVIN BAXTER record in implementing produc- which will gather the oil ministers tion pullbacks, some analysts were of Iraq, Algeria, Oman, Qatar, Ku- audi Arabia has cut its skeptical members would abide by wait and the United Arab Emirates crude-oil production by their pledges. “will focus on a compliance mech- at least 486,000 barrels a Saudi Arabia “has complete- anism” for the implementation of day since October, said a ly implemented the cut—if not coordinated production cuts both person familiar with the more,” the person familiar with inside and outside OPEC. Skingdom’s output, bringing the Saudi output said. The person said The disclosures came on the world’s largest exporter of petro- the kingdom—the world’s largest same day that Saudi Arabia’s state- leum swiftly into line with OPEC’s oil exporter and the biggest pro- run oil company raised prices for deal to raise prices. ducer in OPEC—has reduced its customers in the Far East, a move The news come as the group’s production to about 10.058 million analysts took as a signal of the secretary-general said he would barrels a day, the amount it agreed kingdom’s firm intention to curtail hold informal talks with the King- to with OPEC. output. dom and six other oil producers Oil prices rose after The Wall The higher prices will hit some India expects growth to slow to 7.1% next week to assess the implemen- Street Journal reported the Saudi of Saudi Arabian Oil Co.’s key cus- tation of the production agreement. production figure, with Brent tomers in China, Japan and South RAYMOND ZHONG is scheduled to release another, Saudi Arabia agreed to cut its crude turning positive and rising Korea, where the Saudi kingdom more-complete forecast of annual output by 486,000 barrels a day to $56.57. believes demand is high enough to ndia said its economic expan- GDP on Feb. 28. But even that es- as part of an agreement struck by In an interview with The Wall absorb the price increase, said Ed- sion could slow to 7.1% in the timate might not fully capture the the Organization of the Petroleum Street Journal, OPEC’s secretary- ward Bell, a commodities analyst year ending March 31 from effect of the cash crunch on India’s Exporting Countries on Nov. 30 to general Mohammad Barkindo said from the Dubai-based Emirates 7.6% a year earlier, though vast and hard-to-measure informal reduce production by 1.2 million he would hold informal talks with NBD bank. Nearly two-thirds of Ianalysts warned that this estimate economy. barrels a day. The kingdom’s lead- Saudi oil minister Khalid Al-Falih, the company’s crude exports go to probably doesn’t reflect the full “Much of the data for the post- ers had said they would quickly who holds the group’s rotating the Far East, according to its 2015 impact of Prime Minister Naren- demonetization [period] is yet to implement their cuts, the biggest presidency, on the side an Abu annual report. dra Modi’s move in November to come,” said G.C. Manna, director- of any member in the 13-nation Dhabi oil conference on Jan 12- It is an indication that the com- cancel almost 90% of the country’s general of the Central Statistics Of- cartel. But, with OPEC’s patchy 13. Dr Barkindo said that the talks, pany, known as Aramco, is testing cash. fice. By the time the next estimate which regions can support higher The projection for gross domes- is released, he said, the effect of the prices, Mr. Bell said. tic product was released a month cash ban “will be clearer.” “Aramco is clearly looking to earlier than usual to accommodate Friday’s GDP estimate repre- maximize its revenue as it lowers the government’s decision to bring sents the first official data covering production by upping prices to its forward the annual budget an- the full breadth of the economy to main customer base,” said Mr. Bell. nouncement to Feb. 1. be released since Mr. Modi abrupt- Aramco didn’t respond to re- As a result, the growth estimate ly voided all 500- and 1,000-rupee quests for comment. wasn’t calculated using data from notes ($7.40 and $14.70) in No- After a two-year slump during after the cash invalidation on vember to drill out cash piles held which prices fell to 12-year lows corporations’ earnings, industrial by tax cheats and bribe-taking below $28 a barrel in 2016, the oil output, government spending and bureaucrats. But signs had been market has been buoyed by the others. Those won’t be available to pointing to a sharp slowdown. OPEC agreement. Prices have risen statisticians until later. Factory activity shrank in De- from the mid-$40 a barrel level in Friday’s number should there- cember for the first time in a year, November to the mid-$50s this fore be read “with extreme cau- according to the Nikkei India month. tion,” said Anubhuti Sahay, head Manufacturing Purchasing Man- of India research at Standard Char- agers’ Index. Nearly all of the coun- tered PLC. try’s car and motorcycle makers The Central Statistics Office reported a year-over-year decline Digital Dunkin’: Non-Tech firms crash CES, looking to Connect in shipments for the same month.

GEORGIA WELLS to introduce and seek feedback on Gary Shapiro, longtime president Opn, a connected cocktail library. and chief executive of the Con- Brokers once disdained independent advisers. Now they copy them t the world’s largest con- “We’re here to find people who sumer Technology Association, sumer electronics show might be interested in supplying which organizes the CES. MICHAEL WURSTHORN this week, Carnival cruise us with tech, or partnering with These nontech companies are lines, Dunkin’ Donuts us,” said the director of Pernod swept up by the same trends that xecutives at Wall Street’s andA the owner of Absolut vodka Ricard’s innovation group, Alain dominate the tech industry, such biggest brokerages for unveiled new technology and Dufosse. “The opportunities here as connected devices. They are years have dismissed in- swapped tips. are richer than a spirits industry looking at technology with the dependent financial ad- The CES event has long been conference, where it is the same hope that it could help boost sales. Evisers as unsophisticated rivals a gathering for tech geeks and old club.” Procter & Gamble Co.’s air- who worked out of strip malls. electronics manufacturers. With In recent years, technology freshener brand Febreze set up a technology reshaping many in- has seeped into many traditional booth on the show floor this week These registered investment dustries, more traditional compa- sectors, such as those interfac- to display its high-tech spritzer, advisers acted as fiduciaries re- advice. The moves, hastened nies are crashing the party. ing with consumers. “We saw a which began shipping last year quired to put clients’ best interests by a new retirement regulation French spirits company Per- convergence coming in different and connects with Alphabet Inc.’s ahead of their own, collected fees known as the fiduciary rule, are nod Ricard SA, the maker of Ab- industries” because of the growing Nest home-automation system to instead of commissions and didn’t the latest in an industry shift solut, is attending for the first time ubiquity of computer chips, said modulate scent release. receive compensation to promote since the financial crisis that Pernod Ricard’s connected one product over another. has taken brokers from ped- cocktail library, which the com- Brokers, meanwhile, were dling stocks to providing advice pany plans to launch next year, traditionally tasked with pushing for a fee. includes boxes of alcohol—in- stocks and bonds on investors cluding Absolut, Martell cognac For independent advisers, and Beefeater gin—that sit on a for a commission and held to the some of their key selling points smart tray and pair with an app looser standard of having only to are being co-opted. that provides directions on how ensure recommendations were “In the 1990s, it was easy to make cocktails. suitable. to compete and differentiate Cruise line operator Carnival The distinction is blurring as against the big brokerages be- Corp., whose chief executive Bank of America Corp.’s Merrill cause they were focused on delivered a keynote at the expo Lynch, J.P. Morgan Chase & Co. transactions and we only col- Thursday, this week unveiled a and other firms with brokerage lected fees,” said Christopher blue, coin-size wearable device outfits are moving to comply Cordaro, chief executive of Re- that travelers can put on a brace- with new retirement-advice gentAtlantic LLC, a fee-only let, necklace or in a pocket. It is regulations, boost profit and equipped with sensors so that adviser in Morristown, N.J. “Over people can locate family members take back market share by drop- time, their marketing materials onboard and pass security checks ping commissions in retirement looked more and more like what for getting on and off the ship accounts in favor of fee-based we tell our clients.” faster, for example. Monday 09 January 2017 C002D5556 BUSINESS DAY 43 44 BUSINESS DAY C002D5556 Monday 09 January 2017 Live @ the Stock exchange Prices for Securities Traded As At Friday 06 January 2017

Deals Current Quantity Value Company Symbol Price Traded Traded Company Market cap(nm) Price (N) Change Trades Volume

PRICES FOR MAIN BOARD SECURITIES (Equities) MICRO-FINANCE BANKS FORTIS MICROFINANCE BANK PLC 11,799.67 2.58 - 0 0 BANKING NPF MICROFINANCE BANK PLC 2,515.30 1.10 - 5 69,000 ZENITH INTERNATIONAL BANK PLC 463,726.21 14.77 1.86 171 20,814,786 5 69,000 171 20,814,786 MORTGAGE CARRIERS, BROKERS AND SERVICES OTHER FINANCIAL INSTITUTIONS ABBEY MORTGAGE BANK PLC 5,250.00 1.25 - 0 0 FBN HOLDINGS PLC 125,633.52 3.50 1.74 135 3,981,440 ASO SAVINGS AND LOANS PLC 7,370.87 0.50 - 0 0 135 3,981,440 INFINITY TRUST MORTGAGE BANK PLC 6,130.57 1.47 - 0 0 306 24,796,226 RESORT SAVINGS & LOANS PLC 5,664.87 0.50 - 0 0 UNION HOMES SAVINGS AND LOANS PLC. 2,949.22 3.02 - 0 0 BUILDING MATERIALS 0 0 DANGOTE CEMENT PLC 2,845,764.74 167.00 -0.01 23 64,437 OTHER FINANCIAL INSTITUTIONS 23 64,437 AFRICA PRUDENTIAL REGISTRARS PLC 6,040.00 3.02 0.67 36 857,083 23 64,437 CUSTODIAN AND ALLIED PLC 21,762.90 3.70 - 3 5,626 329 24,860,663 DEAP CAPITAL MANAGEMENT & TRUST PLC 750.00 0.50 - 1 60,000 FCMB GROUP PLC. 23,169.17 1.17 4.46 147 35,871,331 NIGERIA ENERYGY SECTOR FUND 411.91 552.20 - 0 0 ROYAL EXCHANGE PLC. 2,572.69 0.50 - 4 2,735 CROP PRODUCTION SIM CAPITAL ALLIANCE VALUE FUND 3,313.67 103.24 - 0 0 FTN COCOA PROCESSORS PLC 1,100.00 0.50 - 0 0 STANBIC IBTC HOLDINGS PLC 150,000.00 15.00 - 14 380,047 OKOMU OIL PALM PLC. 38,318.56 40.17 - 14 46,256 UNITED CAPITAL PLC 18,120.00 3.02 4.86 174 8,993,317 PRESCO PLC 40,100.00 40.10 - 18 184,136 379 46,170,139 32 230,392 1,231 107,190,534 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 511.20 4.26 - 0 0 HEALTHCARE PROVIDERS 0 0 EKOCORP PLC. 1,600.51 3.21 - 0 0 LIVESTOCK/ANIMAL SPECIALTIES UNION DIAGNOSTIC & CLINICAL SERVICES PLC 1,776.57 0.50 - 1 120,000 LIVESTOCK FEEDS PLC. 1,680.00 0.84 -4.55 15 484,563 1 120,000 15 484,563 MEDICAL SUPPLIES 47 714,955 MORISON INDUSTRIES PLC. 251.09 1.65 - 0 0 0 0 DIVERSIFIED INDUSTRIES PHARMACEUTICALS A.G. LEVENTIS NIGERIA PLC. 2,541.40 0.96 - 2 8,952 EVANS MEDICAL PLC. 366.17 0.50 - 2 3,100 CHELLARAMS PLC. 2,465.17 3.41 - 0 0 FIDSON HEALTHCARE PLC 1,995.00 1.33 - 2 4,655 JOHN HOLT PLC. 256.84 0.66 - 0 0 GLAXO SMITHKLINE CONSUMER NIG. PLC. 18,835.05 15.75 - 14 1,558,468 S C O A NIG. PLC. 2,449.84 3.77 - 0 0 MAY & BAKER NIGERIA PLC. 921.20 0.94 - 7 23,340 TRANSNATIONAL CORPORATION OF NIGERIA PLC 36,184.77 0.89 1.14 54 3,848,106 NEIMETH INTERNATIONAL PHARMACEUTICALS PLC 1,224.25 0.78 - 15 35,160 U A C N PLC. 31,963.18 16.64 -1.54 21 818,027 NIGERIA-GERMAN CHEMICALS PLC. 556.71 3.62 - 0 0 77 4,675,085 PHARMA-DEKO PLC. 385.94 1.78 - 4 51,545 77 4,675,085 44 1,676,268 45 1,796,268 BUILDING CONSTRUCTION ARBICO PLC. 711.32 4.79 - 0 0 COMPUTER BASED SYSTEMS 0 0 COURTEVILLE BUSINESS SOLUTIONS PLC 1,776.00 0.50 - 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION 0 0 JULIUS BERGER NIG. PLC. 50,925.60 38.58 - 9 5,200 COMPUTERS AND PERIPHERALS ROADS NIG PLC. 165.00 6.60 - 0 0 OMATEK VENTURES PLC 1,470.89 0.50 - 0 0 9 5,200 0 0 REAL ESTATE DEVELOPMENT ELECTRONIC COMMUNICATIONS SERVICES UACN PROPERTY DEVELOPMENT CO. LIMITED 5,156.25 3.00 -2.91 12 200,150 MTECH COMMUNICATIONS PLC 4,519.67 0.91 - 0 0 12 200,150 0 0 REAL ESTATE INVESTMENT TRUSTS (REITS) IT SERVICES SKYE SHELTER FUND PLC 2,000.00 100.00 - 0 0 CWG PLC 6,741.29 2.67 - 0 0 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 11,305.89 45.22 - 0 0 NCR (NIGERIA) PLC. 921.24 8.53 - 0 0 UPDC REAL ESTATE INVESTMENT TRUST 26,682.70 10.00 - 0 0 TRIPPLE GEE AND COMPANY PLC. 643.44 1.30 -4.41 5 10,675,404 5 10,675,404 0 0 PROCESSING SYSTEMS 21 205,350 CHAMS PLC 2,348.03 0.50 - 1 100,000 E-TRANZACT INTERNATIONAL PLC 21,000.00 5.00 - 0 0 AUTOMOBILES/AUTO PARTS 1 100,000 DN TYRE & RUBBER PLC 2,386.33 0.50 - 1 10,000 TELECOMMUNICATIONS SERVICES 1 10,000 MASS TELECOMMUNICATION INNOVATIONS NIGERIA PLC 2,446.80 0.50 - 0 0 BEVERAGES--BREWERS/DISTILLERS 0 0 CHAMPION BREW. PLC. 19,338.86 2.47 - 5 20,418 6 10,775,404 GOLDEN GUINEA BREW. PLC. 231.34 0.85 - 1 10,000 GUINNESS NIG PLC 120,471.06 80.00 1.39 40 61,549 BUILDING MATERIALS INTERNATIONAL BREWERIES PLC. 60,943.61 18.50 - 1 50 AFRICAN PAINTS (NIGERIA) PLC. 910.10 2.47 - 0 0 NIGERIAN BREW. PLC. 1,125,932.33 142.00 0.01 95 1,459,961 ASHAKA CEM PLC 25,596.95 11.43 - 8 29,806 142 1,551,978 BERGER PAINTS PLC 1,854.87 6.40 - 13 26,164 BEVERAGES--NON-ALCOHOLIC CAP PLC 23,100.00 33.00 - 51 432,250 7-UP BOTTLING COMP. PLC. 82,636.16 129.00 - 7 2,948 CEMENT CO. OF NORTH.NIG. PLC 5,441.41 4.33 -4.84 23 191,248 7 2,948 FIRST ALUMINIUM NIGERIA PLC 1,055.18 0.50 - 0 0 FOOD PRODUCTS LAFARGE AFRICA PLC. 218,595.41 40.00 - 63 560,041 DANGOTE FLOUR MILLS PLC 20,200.00 4.04 - 22 255,385 MEYER PLC. 282.75 0.87 - 1 5,951 DANGOTE SUGAR REFINERY PLC 71,880.00 5.99 - 16 72,303 PAINTS AND COATINGS MANUFACTURES PLC 515.39 0.65 - 0 0 FLOUR MILLS NIG. PLC. 48,495.90 18.48 - 30 140,510 PORTLAND PAINTS & PRODUCTS NIGERIA PLC 720.00 1.80 - 2 400 HONEYWELL FLOUR MILL PLC 10,229.95 1.29 -0.77 15 243,876 PREMIER PAINTS PLC. 1,277.97 10.39 - 0 0 161 1,245,860 MULTI-TREX INTEGRATED FOODS PLC 1,861.25 0.50 - 0 0 ELECTRONIC AND ELECTRICAL PRODUCTS N NIG. FLOUR MILLS PLC. 1,070.98 6.01 - 0 0 AUSTIN LAZ & COMPANY PLC 2,256.91 2.09 - 0 0 NASCON ALLIED INDUSTRIES PLC 22,520.23 8.50 - 4 9,475 CUTIX PLC. 1,664.45 1.89 - 2 15,000 U T C NIG. PLC. 616.69 0.50 - 0 0 2 15,000 UNION DICON SALT PLC. 4,283.22 15.67 - 0 0 PACKAGING/CONTAINERS 87 721,549 AVON CROWNCAPS & CONTAINERS 779.73 1.14 - 0 0 FOOD PRODUCTS--DIVERSIFIED BETA GLASS CO PLC. 14,999.16 30.00 - 1 5,000 CADBURY NIGERIA PLC. 17,842.92 9.50 -5.00 140 2,817,614 GREIF NIGERIA PLC 413.18 9.69 - 0 0 NESTLE NIGERIA PLC. 641,258.91 809.00 -0.12 38 202,725 1 5,000 178 3,020,339 164 1,265,860 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,858.35 29.33 - 0 0 CHEMICALS VITAFOAM NIG PLC. 2,522.54 2.42 -2.02 17 218,157 B.O.C. GASES PLC. 1,465.18 3.52 - 2 18,023 17 218,157 2 18,023 PERSONAL/HOUSEHOLD PRODUCTS METALS P Z CUSSONS NIGERIA PLC. 57,571.92 14.50 - 15 39,651 ALUMINIUM EXTRUSION IND. PLC. 2,144.57 9.75 - 0 0 UNILEVER NIGERIA PLC. 132,415.37 35.00 - 15 75,766 0 0 30 115,417 MINING SERVICES 462 5,640,388 MULTIVERSE MINING AND EXPLORATION PLC 2,130.97 0.50 - 1 5,000 1 5,000 BANKING PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 118.80 0.54 - 0 0 ACCESS BANK PLC. 181,667.66 6.28 2.28 199 7,481,417 0 0 DIAMOND BANK PLC 20,844.35 0.90 -1.11 38 5,479,717 3 23,023 ECOBANK TRANSNATIONAL INCORPORATED 180,743.08 9.85 1.23 88 17,144,388 FIDELITY BANK PLC 24,049.08 0.83 1.20 80 9,621,483 ENERGY EQUIPMENT AND SERVICES GUARANTY TRUST BANK PLC. 692,809.96 23.54 0.30 164 2,828,595 JAPAUL OIL & MARITIME SERVICES PLC 3,131.35 0.50 - 1 10,000 SKYE BANK PLC 6,940.15 0.50 - 4 144,998 1 10,000 STERLING BANK PLC. 20,153.29 0.70 2.86 72 12,075,728 INTEGRATED OIL AND GAS SERVICES UNION BANK NIG.PLC. 88,404.91 5.22 -4.92 36 1,030,299 OANDO PLC 56,442.36 4.69 3.30 90 51,133,231 UNITED BANK FOR AFRICA PLC 169,788.18 4.68 1.52 102 4,145,528 90 51,133,231 UNITY BANK PLC 6,779.82 0.58 - 0 0 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS WEMA BANK PLC. 20,444.47 0.53 - 3 10,856 BECO PETROLEUM PRODUCT PLC 1,858.49 0.50 - 0 0 786 59,963,009 CONOIL PLC 26,009.33 37.48 - 33 112,601 INSURANCE CARRIERS, BROKERS AND SERVICES ETERNA PLC. 4,303.68 3.30 3.13 16 954,011 AFRICAN ALLIANCE INSURANCE COMPANY PLC 10,292.50 0.50 - 0 0 FORTE OIL PLC. 104,953.93 80.58 -0.21 43 66,708 AIICO INSURANCE PLC. 4,296.73 0.62 - 8 81,591 MOBIL OIL NIG PLC. 95,575.77 265.05 -5.00 16 52,539 AXAMANSARD INSURANCE PLC 17,745.00 1.69 - 3 5,550 MRS OIL NIGERIA PLC. 10,982.47 43.24 - 6 765 CONSOLIDATED HALLMARK INSURANCE PLC 3,000.00 0.50 - 3 52,500 TOTAL NIGERIA PLC. 101,517.03 299.00 - 13 11,103 CONTINENTAL REINSURANCE PLC 10,372.74 1.00 - 13 339,000 127 1,197,727 EXPLORATION AND PRODUCTION CORNERSTONE INSURANCE COMPANY PLC. 7,364.75 0.50 - 1 967 EQUITY ASSURANCE PLC. 7,000.00 0.50 - 1 50,000 SEPLAT PETROLEUM DEVELOPMENT COMPANY LTD 214,103.30 379.99 - 1 20 1 20 GOLDLINK INSURANCE PLC 2,411.47 0.53 - 0 0 219 52,340,978 GREAT NIGERIAN INSURANCE PLC 1,913.74 0.50 - 0 0 GUINEA INSURANCE PLC. 3,070.00 0.50 - 2 49,850 ADVERTISING INTERNATIONAL ENERGY INSURANCE COMPANY PLC 642.04 0.50 - 1 11,666 AFROMEDIA PLC 2,219.52 0.50 - 0 0 LASACO ASSURANCE PLC. 3,661.72 0.50 - 1 95,000 0 0 LAW UNION AND ROCK INS. PLC. 2,749.86 0.80 - 2 1,500 AUTOMOBILE/AUTO PART RETAILERS LINKAGE ASSURANCE PLC 4,000.00 0.50 - 0 0 R T BRISCOE PLC. 588.18 0.50 - 0 0 MUTUAL BENEFITS ASSURANCE PLC. 4,000.00 0.50 - 0 0 0 0 N.E.M INSURANCE CO (NIG) PLC. 5,016.48 0.95 -5.00 3 51,200 COURIER/FREIGHT/DELIVERY NIGER INSURANCE CO. PLC. 3,869.74 0.50 - 2 900 RED STAR EXPRESS PLC 2,593.79 4.40 - 8 124,548 PRESTIGE ASSURANCE CO. PLC. 2,759.15 0.50 - 1 5,798 TRANS-NATIONWIDE EXPRESS PLC. 198.82 1.00 - 5 47,000 REGENCY ALLIANCE INSURANCE COMPANY PLC 3,334.38 0.50 - 0 0 13 171,548 SOVEREIGN TRUST INSURANCE PLC 4,170.41 0.50 - 0 0 HOSPITALITY STANDARD ALLIANCE INSURANCE PLC. 5,996.59 0.50 - 0 0 TANTALIZERS PLC 1,605.81 0.50 - 0 0 STANDARD TRUST ASSURANCE PLC 4,670.54 0.50 - 0 0 0 0 UNIC INSURANCE PLC. 1,291.15 0.50 - 0 0 HOTELS/LODGING UNITY KAPITAL ASSURANCE PLC 6,933.33 0.50 - 2 1,500 CAPITAL HOTEL PLC 5,420.73 3.50 - 0 0 UNIVERSAL INSURANCE COMPANY PLC 8,000.00 0.50 - 0 0 IKEJA HOTEL PLC 3,700.26 1.78 - 0 0 WAPIC INSURANCE PLC 6,825.20 0.51 -3.77 18 241,364 TOURIST COMPANY OF NIGERIA PLC. 7,885.00 3.51 - 0 0 61 988,386 TRANSCORP HOTELS PLC 37,850.01 4.98 - 1 5,000 1 5,000 Monday 09 January 2017 C002D5556 BUSINESS DAY 45 Live @ the Stock exchange FMDQ intensifies work on private company bonds listing …as Access Bank creates liquidity buffer with N35bn Commercial Papers quotation issuance in Nigeria’s fixed Stories by Iheanyi Nwachukwu the issuer, Access Bank issued CP notes and CP rates. She also lauded the strong investors’ per- income markets, pro- Plc, took place at the Programme; the signing contribution the bank ception towards corpo- vides further credence FMDQ offices on Janu- of the FMDQ CP Quo- was making to the devel- rates with strong fun- to Access Bank PLC’s MDQ OTC ary 5, 2016. Present at this tations Register by the opment of the Nigerian damentals and a good long-standing reputa- Securities Ex- Ceremony were, Herbert issuer, the Registration markets, highlighting track record like Access tion as a top-grade issuer. change has Wigwe, Group Manag- Members (co-sponsors that the positive impact Bank PLC. This issue We remain grateful to the again intensi- ing Director, Access Bank of the issue) and FMDQ; a quotation of this sort further demonstrates domestic institutional fied efforts at Plc ; Abubakar Jimoh, the presentation of the would have on the mar- the bank’s commit- investors – especially the Flisting private company Managing Director, Cor- CP Quotations Certifi- ket was not to be under- ment to continuously Nigerian pension fund bonds, as it commits onation Merchant Bank cate to the issuer and estimated. explore innovative fi- administrators – for their to providing transpar- Limited, and Ayo Fashi- the “guest of honour au- Following the sign- nancing options and overwhelming support, ent platform for Nige- na, Director, Investment tograph impression” by ing of the FMDQ CP consistently drive value and to the FMDQ Man- rian corporates to access Banking, Chapel Hill Ad- the issuer. Quotations Register and growth for its stake- agement and team, who Over-The-Counter debt visory Partners Limited, Wigwe noted that, “Ac- and the presentation of holders.” have efficiently worked capital liquidity. both representing the co- cess Bank Plc was able to the FMDQ CP Quota- Also speaking at the with us to ensure a timely Bola Onadele Koko, sponsors of the issues on raise N35 billion from the tions Certificate to the Ceremony, Ayo Fashina completion and quota- Managing Director/ the platform, and FMDQ money market, the larg- issuer, Abubakar Jimoh, noted that, “this largest tion of this CP issuance.” CEO, FMDQ OTC Secu- Registration Members est listed Commercial Pa- remarked that “there is ever commercial paper rities Exchange said at (under the Quotations per issuance ever in Ni- Access Bank Plc N35bil- category), among others. geria despite the current lion Commercial Pa- “In building a sustain- economic headwinds pers (CPs) quotation on able economy, FMDQ and prevailing tight li- FMDQ platform. recognises the potential quidity situation in the He noted that FMDQ of a fully-functional debt country.” ensures the cost of listing capital market (DCM), He noted further that: on its platform is “con- and will therefore con- “This indicates the high siderably down”, adding tinue to innovate and level of investor confi- that they are in discus- provide efficient ser- dence in the bank. These sion with Securities and vices and infrastructure, issues will allow us create Exchange Commission as may be necessary, to a liquidity buffer as we (SEC) for issuers to reg- support issuers and in- align our liquidity man- ister short-term bonds of vestors, towards achiev- agement to international 1-3 years. ing an operationally ex- best practice based on “In 2017, Derivatives cellent and competitive our internal Liquidity Ad- will become very impor- DCM”, he said. equacy Assessment Pro- tant to us. We are working “From streamlining of cess (ILAAP).This is par- on developing market for its processes to the de- ticularly important, given interest rate futures and livery of unrivalled ser- the prevailing macro en- T-Bills Futures,” Koko vices to the Nigerian debt vironment and its impact said. capital, foreign exchange on industry liquidity.” Interestingly, FMDQ (FX) and derivatives In recognition of the commenced this year’s markets, FMDQ is set to roles played by the co- activities with the com- continue championing sponsors of the CPs in memoration of the ad- and effectively support- the quotations process, mittance and quotation ing initiatives in line with presentations were also of the Access Bank Plc its product and market made to the respective N8.45 billion Series 1, development agenda to Registration Members. N4.22 billion Series 2 and further deepen and align Whilst welcoming N22.33 billion Series 3 the markets with interna- the guests, Tumi Sekoni, Commercial Paper (CP) tional standards, invari- Vice President & Divi- Notes under its N100bil- ably contributing to the sional Head, Marketing lion CP Programme on growth of the economy at & Business Development the OTC Exchange. large,” Koko stated. of FMDQ congratulated The commemoration, Key highlights of the Access Bank Plc on suc- in the form of a presti- CPs quotation included cessfully raising N35 bil- gious Quotation Cer- a Special Address by lion from the market at emony held in honour of Herbert Wigwe on the relatively competitive

Stock investors lost N215bn in first trading week

espite last Fri- ernment of Nigeria de- valued at N3.724 billion day’s first posi- clared Monday January 2, that exchanged hands the tive close into 2017 as Public Holiday for preceding week in 6,363 the year 2017, the New Year celebration. deals. Dstock investors at the Nige- Eighteen equities ap- The Financial Services rian bourse still lost about preciated in price during Industry (measured by vol- N215billion in the first the review week, lower ume) led the activity chart trading week. The Year-to- than 37 equities in the with 4.177 billion shares Date (ytd) return stood at preceding week. Thirty- valued at N5.306 billion minus 2.32 percent. one equities depreciated traded in 5,047 deals; thus The Nigerian Stock Ex- in price, higher than 21 contributing 96.71percent change (NSE) All-Share equities in the preced- and 71.94percent to the to- Index (ASI) which opened ing week, while 126 equi- tal equity turnover volume last week at 26,874.62 ties remained unchanged and value respectively. points depreciated to higher than 117 equities The Oil and Gas Indus- 26,251.39 points Friday, recorded in the preceding try followed with 65.827 down by 2.32 percent. week. million shares worth Also, the equities market The NSE recorded to- N594.522 million in 1,385 capitalisation decreased tal turnover of 4.319 bil- deals; and the Conglom- to N9.032 trillion, from lion shares worth N7.376 erates Industry with a N9.247 trillion. billion in 9,330 deals turnover of 26.487 million It was a brief trading in contrast to a total of shares worth N48.163 mil- week as the Federal Gov- 405.939 million shares lion in 299 deals. 46 BUSINESS DAY C002D5556 Monday 09 January 2017 AbujaCityBusiness COMPREHENSIVE COVERAGE OF NATION’S CAPITAL FCTA seeks $100m AfDB for BRT scheme

KEHINDE AKINTOLA, ABUJA functional high capacity buses into the city. loading as well as vandalisation of the city have been vandalized curity agents to also restrict for the scheme while 25 in- According to him, Abuja’s of traffic lights and enforcement and warned that all perpetra- the activities of scavengers to ederal Capital Terri- volved in bomb blast were not projected population of two of the use of pedestrian bridges. tors would be tracked down to dumpsites and arrest any of tory Administration serviceable. million has risen to seven mil- Speaking at the FCT Security face prosecution. them found roaming around (FACTS) has unveiled “This department is saddled lion, thereby resulting into over- Committee during the review The Minister also appreci- the city. plans to access $100 with the responsibility of su- stretched in. the activities of the year 2016 ated the support the FCT Ad- The Minister remarked that million loan from pervising multilateral funding This, he observed contrib- and proactively chart a new ministration has been enjoying commercial sex workers when AfricanF Development Bank projects in the transport sector uted to “touting activities and course for 2017. from the FCT Security Com- arrested would be taken to (AfDB) for the implementation of the FCTA. other social vices. These are According to him, the Mo- munity and called for closer col- Rehabilitation Centre Lugbe of its Bus Rapid Transit (BRT). “Such projects include: pro- multifarious problems to be bile Courts have been brought laboration in 2017 and beyond. for skill acquisition in order to Muhammad Bello, FCT vision of BRT between Eagles confronted in the medium in for immediate dispensation Bello reiterated that the FCT be more useful to themselves Minister has also approved re- Square to Auta Balifi in Na- term, but in the meantime, we of justice and appropriate pen- Administration this year would and the society. schedule bus services as part of sarawa state. Application has are going to embark on enforce- alty to serve as a deterrent. give serious attention to the Bello also directed the FCT efforts geared toward alleviating been made for a loan of $100 ment. The Committee resolved problems of traffic offenders, Police Commissioner and the the suffering of Nigerians and million from AfDB but has not H also clarified the conflict that vandalization of public illegal activities of commercial FCT Director of DSS to imme- workers living within the FCC been included in the Federal between FRSC and VIO on the utilities in the Federal Capi- motorcyclists, vandalization diately meet with the graded and neighbouring towns. Government borrowing plan. issuance of Driver’s licence, tal Territory must be stopped of public utilities, restricting traditional rulers in FCT as well Abdulhamid Suleiman, act- “Meanwhile, $95,000 CTF stressing that “FRSC has statu- forthwith, as the security agents of Keke Napep to designated as the Chairmen of the six Area ing Scretary of FCT Transport grant has been approved for tory role of issuing drivers li- would clamp down on any areas, which are the estates, Councils to strengthen collabo- Secretariat who disclosed this preparatory study of the pilot cence not VIO.” suspected vandal and be made among others. ration and fine-tune ways of while giving his stewardship BRT corridor which is between In the bid to forestall van- to face the full wrath of the law. The Minister emphasized getting useful intelligence from report in Abuja, explaimed that Eagles Square to Auta Balifi in dalisatiin of transport facility The Committee noted that that abandoned and uncom- the grassroots. the reschedule bus services Nasarawa state,” Suleiman said. across the territory, the Minister most of the traffic lights in the pleted buildings across the He advised the residents of has becomes operational along While stressing the need disclosed that five Magistrates Abuja metropolis have been Federal Capital City would be the Federal Capital Territory three major corridors along for adequate provision of infra- from the FCT Judiciary have vandalized, which has led to properly monitored and asked to pass any useful information Nyanya and Gwagwalada. structure, he noted that exist- been signal failure in such inter- their owners to take proper pos- they have on any security situ- According to him, Abuja ing infrastructure provided by assigned to head the newly changes. session as they would be held ation to the relevant Security Urban Management Transport the administration has been inaugurated Mobile Courts The Committee also re- responsible for any security Agencies nearest to them as well Company (AUMTCO) has 327 stretched due to influx of people that will prosecute illegal mo- gretted that most street lights breach in such places. as Traditional and Community tor parks and loading and off- especially those at the outskirts Bello also directed the se- leaders. Nigeria to establish one-stop shops in 119 Foreign – Onyeama

KEHINDE AKINTOLA & OYIN AMINU, deliver concrete economic operates a two-china policy benefit to the nation. nor recognises Taiwan as a igeria has con- “It is a pet project. It is sovereign country as being cluded plans for a matching making data insinuated in some quarters. the establish- base for our Foreign Direct Onyeama who noted ment of one-stop Investment (FDI) and export that Taiwan only had trade shopsN in the 119 Nigeria promotion. office in Nigeria and not foreign missions as part of “So this data base will diplomatic status, argued fdoets which would serve as essentially enable any Ni- that Nigeria recognised one to spur investments through gerian business to upload China and pursue one China information sharing and to our data base that could policy. elimination of bottlenecks. be managed from Foreign “It is not true that we Godfrey Onyeama, Min- Affairs together with the are operating a two China ister of Foreign Affairs who ministry of trade and invest- policies, a lot of people don’t disclosed this in Abuja, ment,” he said. know this. The issue is the explained that the initia- Onyeama assured that status of the office here; and tive would enable Nigeria’s all the information needed there were some difficul- products and investors to about what they want to ties that arose in relation to access the world market export and investment types that trade office here where easily and also enable for- would be readily available in there is possible to confuse eign investors have unfet- all the119 countries where the status. tered access to informed Nigeria has presence. “And so that is what we and genuine information “I felt that when we have are addressing now, to make concerning business op- presence in 119 countries it clear that is a trade office, portunities in Nigeria. it is fantastic advantage to it (Taiwan) does not have a The Minister explained push Nigerian products and diplomatic status, it is not a that the scheme would be businesses in 119 countries. separate country,” he said. implemented through a So we would like to present He said that China had matching-making data base a one-stop shop to export insisted on a particular aimed at promoting exports Nigerian goods. name for the province of and enhancing the country’s “And that whenever any Taiwan and so as not to con- Foreign Direct Investment business is uploaded in fuse it with China or has also (FDI). each of their countries they being a sovereign country According to Onyeama, have to seek for partners called China. the design was an economic and match that business According to him, this diplomacy which is a frame- person with a partner in is being also addressed, it work to address the severe that country to put in places required a lot of admin- economic challenges facing a business agreement,” he istrative steps on our side Nigeria. explained. and this was brought to our He said that Nigeria has On the controversy sur- notice by the Chinese gov- representations in 119 coun- rounding the country’s for- ernment and we are taking tries and the ministry could eign policy, the Minister ex- a step to address a repeated leverage on the advantage to plained that Nigeria neither story. Monday 09 January 2017 C002D5556 BUSINESS DAY 47 NEWS millennial also known as the ‘Gen Weaker demand sees interbank foreign... Herbert Wigwe leads most active bank CEOs... Y’ (born from 1977 to 1994) who are mostly dominant on Twitter. Modupe Continued from page 1 latest by March. Continued from page 1 had the most active presence on Ogunyemi, head Digital and Mobile Besides the US$1 Eurobond, the Twitter. Herbert Wigwe’s account @ previous week. abstain from the platform ac- and former Team Lead, Social Media Federal Government is also in negotia- HerbertOWigwe, created on Novem- at Access Bank, told BusinessDay that it A slump in trading activity was an- tions with different multilateral lending cording to a BusinessDay survey. ber 2014, has over 11,000 followers ticipated in the 3-day business week The survey was carried out to is very important for millennials that a institutions, including the World Bank, with 348 tweets made as at 5 Janu- bank CEO is engaging them on Twitter. cut short by Christmas festivities. the African Finance Development study how leaders of big corpora- ary, 2017. Uzoma Dozie who tweets Some market participants said tions are using various social media Millennials, she said will “relate Bank (AfDB), among other institu- from @Uzoma_Diamond created on more with a bank whose CEO they trading levels were soft, due to weak- tions, which is expected to translate platforms to engage their customers October 2013 has 2,664 followers and er foreign exchange demand from and helping their business brands to see more on their preferred social net- into increased dollar inflows. has made 168 tweets so far. work.” She also noted that it helps if the businesses, which had closed shop In November 2016, the AfDB gave reach a larger community. In terms While they may be ahead of their for the year and a disappointing in- of activity, Nigeria Twitter commu- CEO has an “acceptable persona”. That Nigeria US$600 million of an agreed peers in terms of engagement, fre- helps in the perception of the bank as flow of diaspora remittances. US$1 billion loan. The balance of nity ranks second with 350 million quency clearly is not their strong suit. Activity in the Spot foreign exchange geolocated tweets in 2015. a technology focused organisation. US$400 million will be given to the Herbert Wigwe’s 348 tweets come However, issues of privacy and market among banks for the same country this year. While many leaders across the at most two times a week, once per trading week revealed a 44 percent world are increasingly embracing twit- security may also be behind the bank The country also has an agree- day. Uzoma Dozie on the other hand CEOs apathy towards Twitter. A source decrease, as a total turnover of $24.68 ment in principle with the World Bank ter, with some employing a whole team tweets at least once a month. million (average daily turnover of $8.23 to manage their social media plat- at Fidelity Bank Plc who spoke to Busi- for a US$2.5 billion facility. The Fed- Meanwhile, CEOs without Twit- nessDay said the Twitter account of million) was recorded against the eral Government is expected to tap forms, including Twitter, a widespread ter accounts include Segun Agbaje $65.17 million total turnover (average apathy still exists among Nigeria bank the CEO Nnamdi Okonkwo has been into this agreement this year as part (GTB), Ade Ayeyemi (Ecobank), Peter hacked on several occasions and crimi- daily turnover of $13.03 million) re- of its US$30 billion borrowing plan. CEOs in the BusinessDay survey. Amangbo (Zenith), Akinsola Akin- ported the previous week, a market re- Ayeni Ekundaye, a social media nal elements also created fake handles Prepayment agreement signed femiwa (Heritage), Hassan Usman to deceive the bank’s customers. Hence port obtained by BusinessDay showed. with India for crude oil sales will also expert told BusinessDay that the CEOs (Jaiz), Adetokunbo Abiru (Skye); Eme- In the week-ended January 6, were being conservative because they the CEO’s handle @NMDOkonkwo bring in addition dollar inflows into ka Emuwa (Union); Phillip Ikeazor that has 150 followers has seen very 2017, the exchange rate in the Bu- the country in 2017. mostly are not very informed on how (Keystone); Bola Adesola (Standard reau-de-Change (BDC) market - powerful and relevant social media has little activity since it was created in 2014. The Minister of State for Petrole Chartered); Segun Oloketuyi (Wema); Kennedy Uzoka, CEO of United remained flat at N399 to the US$ um Resources, Ibe Kachikwu, has an become and also lack a clear under- Oluwatomi Somefun (Unity); and throughout the week, while the inter- agreement in principle with India for standing of the importance of online Bank for Africa (UBA) tweets from a Muhammed Jibrin Barde (SunTrust). protected account @UBAGMD to his bank market rate fell by 0.08 percent prepayments of up to US$15 billion reputation management. With the advent of the digital to close at N305 to the US$ against for the country’s crude oil. Some pay- “The next challenge will be for 625 followers. age, the focus of market influence Conservatism may be second the N305.25 close recorded at the ments on the back of this agreement the bank CEOs to understand the for many leaders is gradually and end of the previous week. are expected this year once finalised. power of communication and how steadily shifting to social media, nature to bank executives due to the As a result, the spread between the But the biggest source of im- to manage it. In addition, they do where over two billion people now sensitive nature of their business inter-bank and BDC exchange rates in- proved dollar inflows in 2017 will not see the difference between the practically live their lives. David and the fear of revealing vulnerable creased by 25 kobo to N94, representing come from higher crude oil produc- personality of the title MD of the Dubois, INSEAD Assistant Professor information that could cost share- a 0.27 percent increase from the spread tion and the higher prices of crude oil bank and the brand called the ‘bank’. of Marketing made the point in 2016 holders. Nevertheless, given the of N93.75 recorded the previous week. in the international markets. Furthermore, they do not see it as that the most influential CEOs today changing business landscape and In the OTC FX Futures mar- At an average crude oil price of part of the brand enhancement tool are social leaders, open to listening, continues customer movement to ket, contracts worth $88.81 million US$55 per barrel and average pro- for the bank,” Ekundaye said. engaging in dialogue with stakehold- new platforms, most experts agree traded in about 12 deals for the week- duction of 2.0mbpd, the country’s oil Out of the 19 CEOs surveyed, Ac- ers and responsive to their followers. with Ekundaye that it pays off in the ended January 6, 2017, compared to export earning is expected to rise by a cess Bank CEO Herbert Wigwe and One segment of the market that long run for a bank CEO to be more the previous week’s total of $128.61 minimum of US$11 billion, boosting Diamond Bank CEO Uzoma Dozie social CEOs may influence is the ‘social’ on Twitter. million traded in about six deals. external reserves and strengthening Nigeria’s foreign exchange mar- the capacity of the Central Bank of ket is reeling from low oil prices and Nigeria (CBN) to defend the currency. weak autonomous inflows. Despite Analysts at FBN Quest note that, a currency float in June, liquidity is “over time, other inflows will mate- yet to return to pre-2014 levels, al- rialise. These could include sizeable though inflows have since outpaced multilateral loans, an asset sale or two outflows since the float, which saw and advance payments for crude oil. the naira shed almost half its value. Ours is the scenario of the piecemeal Foreign investors have stood on solution to the exchange rate impasse. the sidelines of Nigeria’s interbank “ A number of transactions finally foreign exchange market because of trigger the autonomous inflows on the fear that the low dollar liquidity a scale to make the liberalisation in the market would make it difficult a reality. The regime may not be for them to repatriate the proceeds of floating but could then be termed whatever investment they bring in. “market-driven” (to use the CBN’s However, experts are betting that own words). This process would be there will be improved liquidity in 2017. more rapid, as the Egyptian example Vice President Yemi Improved liquidity is expected shows, if the FGN was prepared to Osinbajo (r) welcom- on the back of several initiatives take IMF loans. Such a step, however, ing Rev. Eric Ighalo, already taken by the government, is off-limits for historic reasons.” national president, which could translate into increased The improvement in inflows is Students Christian inflows of dollars into the country. therefore expected to trigger their Movement of Nigeria, The first source of major dollar in- return to the market, which would during a courtesy visit flow expected in early 2017 is the pro- ease the pressure on the naira. on the Vice President ceeds of the US$1 billion Eurobond The nation’s external reserves at the Presidential Vila which the Debt Management Office have been on a consistent rise since in Abuja. (DMO) and the Ministry of Finance November, rising to a two month have already finalised plans to issue high of US$26.2 billion on 5 January.

Slashed import tariffs will cut production... duction that is not readily available in year and this will help to boost the and not bungle the well-articulated the country can have its tariff reduced. volume of business activities in the procedures laid down by government But if it is available in the country in Continued from page 1 tariffs,” he said. port,” Anakebe added. by extorting money from shippers, which The Federal Government last sufficient quantity, you will be killing According to Jonathan Nicole, has been the practise in the past. with is fuelled by exchange rate week released a circular detailing local industries if you reduce duties,” president, Shippers Association of “The Current Adjustment Import and import duties,” said Muda Yu- a reduction in tariffs for some raw said Ibrahim Usman, chairman of the Lagos State, the new measure, if policy meant well. But a lot needs suf, director-general, Lagos Cham- materials from ten to five percent. Manufacturers Association of Nigeria sustained, will enable the key players to be done to encourage the ship- ber of Commerce and Industry Some of the raw materials which in the North-West. to participate fully in bringing com- pers of these commodities. One of (LCCI), in a telephone interview. benefitted include: malt extract, un- “Zero duty on machinery is fan- modities that would grow manufac- such is that trade facilitation needs “So the big thing is that the reduc- der natured ethyl alcohol for pharma- tastic, as it will reduce our cost of turing business in 2017. be replaced with revenue target tion of import tariff will reduce cost ceutical, organic composite solvents production. In terms of iron and The enforcement of these meas- syndrome popularly canvassed by of production for those using them and thinners; mixes alkylbenzenes; steel, this reduction is also good ures, according to him, will bring the Customs. Revenue collection as inputs. The fact is that import du- and industrial monocarboxylic fatty because we are still far away from back shippers’ confidence to Nigerian targets should be abolished as they ties on quite a number of inputs and acids, synthetic staple fibres, semi- where we should be. We are not yet seaports and also help them re-direct negate the World Trade Organisation products are still very high, especially finished products of iron or non-alloy producing sheet metals and a lot of their imports to the country. (WTO) requirements for free trade on the backdrop of high exchange steel, stranded wire ropes, grease for other products. So this will support “If all the measures are meticu- and movement of traders within the rate,” Yusuf said. treatment of textile materials. rehabilitation of bridges and other lously applied by government agen- ECOWAS Treaty,” he said. He explained that import duties Many of these commodities are infrastructure,” Usman said. cies operating in the nation’s sea- He further advised the Federal have ranked among the biggest chal- inputs in the pharmaceutical, food Tony Anakebe, managing director ports, there will be minimal increase Ministry of Finance to reduce the lenges facing the Nigerian economy, and beverages, chemical, as well as of Gold-Link Investment Limited, a in import volume in 2017, despite number of Federal Government citing the case of cars, for which the iron and steel industries. clearing and forwarding company, the fact that importation of goods agencies in the ports. duty is 70 percent. Machinery and equipment used commended the Federal Govern- such as cars will be very low due to Nicole further stated that there “A new Toyota Camry is now N17 in sectors such as agriculture, ce- ment for the move, adding that the the current 70 percent import duty is a need to encourage shippers by million and Kia soloon cars range ment, power, iron and steel, sol- new fiscal measures are good for the placed on vehicles coming through reducing the cost of doing business in between N5 million and N10 mil- id minerals and textile were also manufacturing sector. the ports,” Nicole said. Nigerian ports, especially in the area lion. Why? By the time you pay the pegged at zero import duty, accord- “We expect raw materials and Nicole further observed that the of reducing and streamlining the ship- 70 percent and other charges, you ing to the circular. agricultural equipment to flood the Nigeria Customs Service (NCS) needs ping and terminal charges, in line with have between 80 and 90 percent “Any raw material required for pro- ports by the second quarter of the to comply strictly with these measures international best practices. Monday 09 January 2017 A1 A2 BUSINESS DAY C002D5556 Monday 09 January 2017 NEWS FG considers conditional cash transfer to 1,000 days after: BFPCL signs $6bn methanol off-take pregnant mothers to avert maternal mortality Buhari recommits … as scheme could cost N20bn to implement agreement with BP Oil International “We have done a World Bank to return of Chibok HARRISON EDEH, Abuja survey and it is N5,000 from preg- schoolgirls rass Fertilizer and and the Central Bank of contribute to the country’s n a determined move targeted nancy to the delivery period. We Petrochemical Nigeria (CBN) as well as the self-sufficiency in fertilizer at addressing incidences of think it is big for the entire coun- Company Limited hard work and commitment and methanol-based indus- try. We say, even if it is N250x4 ELIZABETH ACHIBONG Imaternal and child mortality (BFPCL) has signed of the project developers. trial raw materials. in Nigeria, the Federal Govern- antennal periods. Each time they s Nigeria and the world Ba $6 billion off-take deal According to Okoye, the The Brass Fertilizer proj- ment is considering conditional come for post-vaccine, we also commemorate the with BP Oil International agreement is a significant ect has been designed to cash transfer to pregnant moth- give them.” 1,000th day of the abduc- Limited, a breakthrough in milestone in the develop- accommodate the yearning ers in a bid to attract more wom- Meanwhile, the minister not- A tion of over 200 Chibok school- en to ante-natal care and forestall ed that birth-count in Nigeria was the development of phase ment of the project, as it of the Niger Delta people girls, President Muhammadu avoidable deaths. currently put at 7 million, while one of the $4 billion Brass paves the way for financial through the provision of Buhari has reiterated the com- The conditional cash transfer maintaining that the initiative Fertilizer project. close on phase one of the employment and creation mitment of the Federal Govern- is one of the strategies the present was going to cost the government The contract, which was Brass Fertilizer project. The of business opportunities, ment to secure their release. administration would be adopt- around N20 billion, saying “I am signed at the London of- project is designed to be Okoye said. The project will Boko Haram insurgents ing to dissuade pregnant mothers currently discussing with the fice of BP Oil International built in two phases and employ about 15,000 work- took over 200 girls from the Gov- from patronising traditional birth SSA to the President on the SDG on December 22, 2016, is phase one, which is ex- ers during construction and ernment Secondary School, attendants. so that we could access it from for exclusive off-take of pected to come on stream 5,000 directly and indirectly Chibok, Borno State, on April “I don’t believe in traditional the Federal Government’s social methanol production from in 2020, will produce 1.66 during operations. 14, 2014. The government last birth attendants, why must we safety net programme. year secured the release of 21 phase one of the BFPCL million metric tons (mmt) He expressed his ap- allow them to deliver our women. “We need to draw women girls through negotiations with project in Brass, Bayelsa of methanol and 1.3mmt of preciation of the business It is the stopgap to fill a gap, but that away from traditional birth atten- their captors. The military also State, over a period of 10 urea per annum. relationship with BP, saying deficiency must be temporary. We dants, while ensuring that they rescued two others while the years. The agreement is a Phase One also includes the shareholders of BFPCL must continue to train midwives did not die because they want to others are still being held. key condition precedent for a dedicated export jetty were poised to meet im- so that a trained person delivers a give birth.” In a statement signed by securing the foreign direct and a 300mmscf/d gas pro- minently to approve the woman,” Isaac Adewole, minister While explaining govern- presidential spokesman, Femi investment from the project cessing plant. The project project EPC contractor and of health, said in Abuja. ment’s current position on the Ni- Adesina, the President said: lenders and international has also secured 25 years to take decisions on the While giving an insight into gerian Midwives Service Scheme “We are grateful to God that on investors. 300mmscf/d gas supply project financial close. government’s plan on the condi- (MSS), he said, “The MSS is there this landmark day, we are not tional cash transfer, Adewole said, and we are funding it. We put At the signing ceremo- from Shell Petroleum De- Top management staff completely in the depths of “Am also talking to the senior money there in 2016 budget and ny in London, Ben Okoye, velopment Company of of BFPCL of Nigeria, BP Oil despair, but buoyed with hope special assistant to Mr. President we are putting money again in executive vice chairman, Nigeria (SPDC-JV). International, White & Case that our daughters will yet on Sustainable Development 2017 .We are working hard to BFPCL, said “attracting a The Brass Fertilizer plant LLP of UK and Taylor De- rejoin their families and loved Goal. We are working on a pack- clear the arrears that we owed major international player is located in Brass Island, Jongh also of UK witnessed ones. Three of them have been age, and we might start with a few them in the past. When we came like BP bears testimony to Bayelsa State, and on com- the signing ceremony. recovered by our diligent mili- states for now. We want to begin in, we brought the MSS-retired the tremendous support for pletion is expected to gener- The BFPCL team was tary, while the freedom of 21 with conditional cash transfer for midwives to fill the gap. We are the project by the current ate an annual turnover of led by Okoye, while the BP others was secured through pregnant women, while looking still going to use them .I have administration of the Fed- $1.5 billion. The project is team was headed by John given approval to Sokoto, and engagement with their cap- extremely strategic to the at how we could attract them tors. We are hopeful that many eral Government of Nigeria, Goodridge, BP’s head of to antenatal services to forestall Kebbi to do community mid- the Nigerian National Petro- country’s agricultural and marketing and origination, wives so that we could train more more will still return as soon as incidences of maternal and child practicable.” leum Corporation (NNPC) industrial sectors. It will Europe, Africa and Russia. health. people to take over the job.” Monday 09 January 2017 A3 A4 Monday 09 January 2017 Monday 09 January 2017 C002D5556 BUSINESS DAY A5 FT FINANCIAL TIMES Insurers focus Online Economy - Policing the digital In association with on cyber security ratings cartels Page A7 Page A8

World Business Newspaper Billionaire rallies business to migrant cause

PATRICK MCGEE Dommermuth, an entrepreneur who has led the country’s largest s nearly a million corporate attempt to bring mi- refugees made their grants into the jobs market, says way to Germany in companies can help themselves 2015, people lined in the eyes of society if they play up at train stations a bigger part in integration. Ato welcome them, showering the “Trust has been lost in politics, arrivals with applause, cheering in the church, in banks and large and sweets. companies and even in Fifa,” he But 2016 was bookended by said before the attacks in Berlin. two events that displaced the The migrant crisis means “com- Willkommenskultur with fear. panies here have a good chance The year began with public out- to show they are part of society”, Angela Merkel rage after hundreds of women he said. in Cologne complained of being Mr Dommermuth, the found- molested on New Year’s Eve, er and chief executive of United describing the assailants as Arab Internet, Germany’s largest Inside Stanford’s boot camp for entrepreneurs or north African migrants who internet service provider, came had apparently co-ordinated the up with the idea of a platform JOHN THORNHILL those with time to absorb them. I could have wanted: smart, free- attacks on social networks. The for corporate Germany to pool Half the course focuses on clas- thinking, and committed. (Thanks, year ended with the Christmas resources and help to integrate itting in a cramped Lon- sic business-school case studies, in- guys!) market attack in Berlin, in which migrants in 2015. The initiative, don classroom on a Friday cluding McAfee, Uber, Qualcomm Some students told me they had 12 people were killed in an as- called Wir Zusammen, or We night listening to a pro- and Webvan. Some are taught by a less happy time, with domineer- sault apparently perpetrated by Together, was founded in Febru- fessor 5,300 miles away a rotating cast of Stanford staff in ing egos in their groups shutting a failed asylum seeker. analysingS a Japanese bento box London; others via a video link with down discussion. But the Stanford ary with 36 companies includ- As Germany grapples with ing Deutsche Post, Deutsche distribution company may not be the school’s Californian campus - a teachers do run weekly check-ins the consequences of Chancel- Telekom and Deutsche Bank. everyone’s idea of fun. I doubted it system that works surprisingly well. with the groups to try to steer them lor Angela Merkel’s open-door The issue of migrants became so would be mine. The rest involves working in a team in a good direction. policy, the role that the country’s controversial after the Cologne But such is the quality of the of six to develop a business idea, Harvesting feedback from the powerful corporate sector will attacks that some companies in- professors at the Stanford Graduate created and selected by the stu- students, I heard a lot of praise for play in assimilating and inte- volved in Wir Zusammen feared School of Business and the vital- dents, and then to pitch it to a panel the design of the programme and grating migrants has become a social media backlash among ity of the 42 students attending its of venture capitalists in London and the dynamism of the teaching staff, increasingly apparent. consumers. recent Ignite programme in the UK California. but there were questions over the Six months ago a survey Mr Dommermuth, who that those late-evening sessions The students on this start-up Silicon Valley-style fixation with found Germany’s leading com- stresses the effort is apolitical, became a highlight of my week. boot camp were from a wide range ideas capable of creating $1bn busi- panies had hired only 54 refu- responded by gathering more The course, which ran for seven of backgrounds, professions and nesses. Some students had more gees in full-time jobs. But Ralph participants in a show of unity. weekends out of 11 between Sep- nationalities, providing a lively modest ambitions to run smaller, tember and December, was de- mix of perspectives and experi- or not-for-profit, companies. signed as a nano-MBA for anyone ences. Their ideas ranged from interested in launching a business the commercial application of a Wages grow at fastest rate since project or setting up their own com- breakthrough industrial coating to pany. The emphasis is very much an Instagram-enabled travel app. on providing a methodology for For those working full time, 2009 and fuel talk of rate rise innovation, a subject I write about Ignite is a demanding programme. ADAM SAMSON the financial crisis. at the Financial Times. The Stanford staff estimate it in- US employment levels have Yossi Feinberg, a Stanford pro- volves 100 hours of coursework as S wage growth accel- recovered significantly since the fessor who runs the Ignite pro- well as 100 hours of preparation erated last month to depths of the crisis, with American gramme, says the course is a “pretty outside the classroom. That makes the quickest pace since companies adding 15m jobs since unique” blend of theory and prac- it a brutal experience for many 2009, underscoring ris- a 2010 low. The new data showed tice. “We do not aim to incubate participants, especially those with ingU inflationary pressure as Presi- the economy added a modest businesses. We incubate people,” families. But it is brutality with a dent Barack Obama prepares to 156,000 jobs in December, with the he says. “This is an effective way purpose. The idea is that students hand over the White House to unemployment rate rising slightly of acquiring the fundamentals understand the intense demands Donald Trump. to a still healthy 4.7 per cent. needed to start a new venture, a of launching a start-up. Average hourly earnings But wages have been far slower combination of teaching with an At $10,000, the course is not climbed 0.4 per cent in Decem- to recover, confounding econo- immersive, practical experience.” cheap but it is considerably cheaper ber from the previous month, mists and helping spark populist Each weekend, the programme than a full MBA. And if it stops you beating expectations for a 0.3 per anger in the hard-hit rust belt tackles a different aspect of busi- launching a business project that cent pick-up, the Labour depart- states that delivered Mr Trump the ness: entrepreneurship, strategy, is doomed at conception then it is ment said in the final employ- presidency. communications, marketing, logis- probably money - and time - well ment report before Mr Trump’s December’s jump in hourly tics, finance and law. It is very much spent. inauguration. earnings was the first real sign a crash course in the basics, skim- Your experience of the course The figure climbed 2.9 per cent strong job growth was beginning ming over a mass of information depends heavily on the students from December 2015, marking the to push wages higher. Yields on at great speed. Useful additional you work with. I was lucky that my swiftest year-on-year growth since government debt spiked after the material and links are provided for five team members were everything Continues on page A2 A6 BUSINESS DAY C002D5556 Monday 09 January 2017 FT NATIONAL NEWS In association with SMEs support automatic pension enrolment for low paid

JOSEPHINE CUMBO dium-sized businesses supported ployer are a combined 2 per cent, millions of the lower paid, mainly tomatic enrolment,” said Darren changing the rules to automati- set to rise to 8 per cent by 2019. women, missing out on an em- Philp, director of policy and market mall businesses have cally enrol those earning under But under current rules, those ployer pension contribution. engagement with The People’s shown a surprising level £10,000 a year into workplace earning less than £10,000 a year, The People’s Pension, a work- Pension. of support for bringing pensions. including millions of part-time place pension provider which “Their current exclusion affects low-paid staff into work- Since 2012, more than 7m workers, are excluded. commissioned the poll, said it was part-time workers, more likely to be place pensions, despite workers have been automatically Even though most workers have surprised at the enthusiasm for women, and their inclusion could the cost it would incur. S enrolled into a workplace pension the right to opt in to their company expanding automatic enrolment. over time go some way towards A survey by YouGov found that by their employer, where contribu- pension, this “earnings trigger” for “SMEs are supportive of lower tackling some of the inequalities 51 per cent of 676 small and me- tions from both employee and em- automatic enrolment has led to earners being brought into au- we have in our pensions system.” Wages grow at fastest... Former Iranian Continued from page A1 data were released, a signal inves- president tors are concerned the economy is heading for a period of higher Rafsanjani dies inflation for the first time since the crisis. NAJMEH BOZORGMEHR The Federal Reserve this week published minutes that showed kbar Hashemi Rafsan- several policymakers believe a jani, the former Iranian quickening economy and the president and one of the prospect of fiscal stimulus under a pillars of the Islamic re- Trump administration could force Apublic since the 1979 revolution, them to raise interest rates more has died of a heart attack aged 82, quickly. The new wage figures are state media have said. likely to solidify that sentiment The cleric, who had garnered among rate-setters. a reputation as a pragmatist poli- “If the [Federal Open Market tician and who sided with pro- Committee] was anxious about reform groups in recent years, was potential increases in US fiscal rushed to hospital yesterday. spending that boosts growth and His death will deal a blow to inflation, the payroll report will Iran’s reform-minded politicians do little to lessen that anxiety,” George Osborne as the country gears up for elec- said Dennis DeBusschere, head of tions in May with Hassan Rouhani, portfolio strategy at Evercore ISI. the centrist president, hoping to The yield on the policy-sen- China signals end of ‘golden age’ for UK ties secure a second term in the face of sitive two-year Treasury, which resistance from hardliners. exchanges had lost momen- sion to review the French-led moves in the opposite direction of JONATHAN FORD & JAMES KYNGE “No one can believe this has tum, damping prospects for £18bn Hinkley Point nuclear the price, jumped yesterday morn- happened and people who want eijing has cooled on a another Sino-British project power plant before going ing by 5 basis points to 1.22 per reforms in this country will be the series of high-profile advocated by former chan- ahead with the deal. Chinese cent, while the 10-year yield was first to feel the loss,” said Moham- projects aimed at cellor George Osborne, who state energy group CGN has a up 7 bps to 2.42 per cent. mad Atrianfar, a politician close to fostering closer ties made commercial ties with 33 per cent stake in Hinkley, The upswing in wage growth the Rafsanjani family. “Reformists Bwith the UK as concerns Beijing a centrepiece of his which it took with the aim of “is coming well before any fiscal will miss his unifying role.” mount that the “golden age” six-year tenure. winning the right to install its stimulus hits, and underscores Rafsanjani was one of the clos- between the two countries Chinese observers blame own technology in another the unusual timing and therefore est figures to Ayatollah Ruhollah lauded by the previous Brit- the changing mood in Beijing plant in Bradwell, Essex. inflationary influence that a fiscal Khomeini, leader of the Islamic ish government has waned. on several factors, including “Hinkley was good, but stimulus can have at this point revolution - in which he also Chinese officials said there uncertainties following Brit- we are concerned about what in the business cycle”, said Alan played an important part - and re- were no active plans to sell ain’s vote to leave the EU and comes after Hinkley with the Ruskin, an analyst at Deutsche mained at the heart of the regime further renminbi- denomi- China’s own domestic eco- other nuclear projects,” said Bank. despite backing reformers. nated sovereign bonds af- nomic concerns. But Theresa one Chinese official. Mr Trump has suggested the Analysts credit him with push- ter last summer’s landmark May’s government, which The Cameron government headline unemployment rate is ing for the landmark nuclear deal Rmb3bn ($430m) auction by has taken a more stand-off was criticised for being too masking a structural shift in the that Tehran signed with world the Chinese finance ministry, approach to China than that eager to appease Beijing to economy that has produced only powers in 2015, under which west- which had raised hopes about of David Cameron, her prede- win trade. But Mark Boleat, low-quality jobs, something that ern powers lifted many sanctions a series of follow-up deals as cessor as prime minister, has head of policy at the City of helped him garner support among on the republic. part of the internationalisa- weighed heavily on Chinese London Corporation, said blue-collar workers. An elder statesman of Iran’s tion of China’s currency. thinking. “In some areas of Mrs May’s indecision over Supporting Mr Trump’s argu- political landscape, he was seen “There is no timetable for our engagement, the Chinese Hinkley risked damaging ment, the labour force participa- as playing a balancing role that a second government bond side is taking a more wait- relations. tion rate, a gauge of the proportion helped galvanise the political issuance in London,” said one and-see attitude following One former British gov- of the working age population that establishment and stop it falling Chinese official. “In any case, the Brexit vote,” said a second ernment official said: “The has a job or is actively looking for into extremism, at either end of the next one that China issues Chinese official. “We do not Chinese are frustrated and I one, came in at 62.7 per cent in the political spectrum. overseas will probably go to feel the same level of enthusi- am not surprised.” December. Rafsanjani’s death will compli- another centre, with Hong asm from this government as The Treasury said that While it has recovered since cate an already tense power strug- Kong under consideration.” from the Cameron-Osborne chancellor Philip Hammond hitting a post-recession low of 62.4 gle between pro-reform groups In addition, Chinese finan- team.” had visited China more than per cent in 2015, it is well below and hardliners, who include con- ciers said a scheme to link the The Chinese singled out any other country since tak- its 66 per cent level before the servative clerics, the judiciary and London and Shanghai stock Mrs May’s abrupt July deci- ing office. downturn. the Revolutionary Guard.

INTERNATIONAL FUNDS TRANSFER Those who take tomorrow get ahead by staying ANYWHERE in charge of their transactions like never before. With our electronic funds transfer platform, you too can send money anywhere in the ANYHOW world quickly, safely, and conveniently.

ANYTIME 24

SECURE FAST AVAILABLE 24/7 Monday 09 January 2017 C002D5556 BUSINESS DAY A7 FINANCIAL TIMES In association with COMPANIES & MARKETS @ FINANCIAL TIMES LIMITED 2015 Insurers focus Saudi Aramco gets ready for ‘no ordinary IPO’ ANJLI RAVAL OIL & GAS CORRESPONDENT ers who are scrambling to secure Advisers are fully aware the work on the flotation say one IPO plans are being driven by year ago Mohammed bin thing is clear: this is no ordinary Prince Mohammed, the son of on cyber Salman, Saudi Arabia’s IPO. King Salman bin Abdul Aziz al deputy crown prince “This listing is different to Saud. and the power behind every other in terms of scale, the They say a successful flotation Athe throne, electrified the global nature of the offering, the uncer- is essential to the deputy crown security ratings energy industry by revealing tainties around it, the timeline, prince’s radical efforts to wean plans to float the world’s largest HANNAH KUCHLER Florida. With the market for cyber the process,” says one person who the kingdom off oil through his insurance forecast to grow to more oil producer. has discussed the IPO planning Vision 2030 programme, which hen a single cyber than $20bn by 2025, according to The ambitious proposal for with Saudi officials. “Nothing aims to diversify the Saudi econ- attack brought forecasts by Allianz, insurers are an initial public offering in state- about it is comparable.” omy and create jobs. down several looking for help to understand the owned Saudi Aramco is the cen- Saudi officials are seeking to The slump in oil prices since large websites in- fast-changing threat from hackers. trepiece of the hard-charging transform Saudi Aramco into the 2014 unleashed a sharp economic cluding Spotify, Stephen Boyer, co-founder of 31-year-old’s vision to overhaul world’s most valuable publicly slowdown that has prompted WTwitter and the New York Times, Bitsight, a rating company for cyber an economy seen as too heavily traded company, which they say criticism of the ruling royal fam- it highlighted a problem insurers security, counts seven of the top 10 dependent on natural resources. is worth about $2tn. ily by the citizens, and Prince have been puzzling over: how do global cyber security companies One year on from Prince Mo- Those close to the planning Mohammed wants to use the IPO you predict whether large com- among his clients. “I think cyber hammed’s statement of intent, say the sale of a 5 per cent stake proceeds for investments in non- panies will fall victim to a cyber insurance is probably the most im- many key issues are still to be should happen next year, al- oil industries - from technology attack all at once, like houses in a portant thing to happen in the cy- resolved: notably around the though the number of shares and manufacturing to tourism. hurricane? ber security world ever,” he said. “It precise shape of Saudi Aramco as sold could increase, and the IPO “The state can no longer afford The distributed denial of ser- will be transformational in the way a public company, its tax rate and timing could slip. to allow see-sawing [oil] prices to vice attack on Dyn, a provider of that insurance has transformed dividend policy, and where it will Saudi Aramco declined to disrupt its ability to govern,” says domain name services to large building codes and car safety.” take a stock market listing. comment. The Saudi royal court Jim Krane, a Middle East energy companies across the globe, Bitsight recently announced a But Saudi officials and advis- was unavailable for comment. expert. showed how companies in differ- fundraising of $40m, led by GGV ent industries and different parts Capital, as it expands to cater for of the world can be reliant on the insurers’ desire to know more same infrastructure. about the security weaknesses A new generation of cyber of their potential - and existing - security start-ups is trying to solve customers. this problem of a widespread It collects data on whether com- attack, helping insurers analyse panies appear already to be com- the risk of writing cyber security promised or it can monitor user policies for individual companies, behaviour, such as an employee how to price them and how to found to be downloading from balance their portfolio so they do peer-to-peer websites. It also col- not accidentally insure the cyber lects information on breaches from equivalent of all the houses in freedom of information requests. Paris store makes history with Sunday opening

HARRIET AGNEW the presidency, the wide-ranging measures were intended to boost esterday was a his- the flagging economy. toric day for Galeries These included establishing Lafayette in Paris. The international tourist zones in French department the French capital within which Ystore opened its doors to shop- businesses could strike deals with pers following a long and pain- unions to open every Sunday. ful battle over Sunday trading France’s grands magasins, as between its owners, trade unions the department stores of Paris are François Hollande and employees, illustrating the known, have been hurt by a slow- frustrations France faces in re- down in tourism - particularly forming its labour market. from Asia - as a result of terror- Britain cannot afford to get hung up on a transitional Brexit deal The store, which will open ism. They also face more compe- proposition . For one thing, such a every Sunday, expects the extra tition from online retailers. JONATHAN FORD cut-off point for Brexit two years request could immediately devour day to create 1,000 new jobs at Galeries Lafayette’s rivals are after the invocation of Article 50. It is t is always possible to paint any a large chunk of the May govern- its Boulevard Haussmann store following suit. Printemps, also a preference shared by Britain’s for- big, looming change as an even ment’s negotiating capital in the alone, forecasting that the ad- on Boulevard Haussmann, has mer EU ambassador Sir Ivan Rogers, bigger disaster in the making. exit discussions. Britain’s EU part- ditional 52 opening days each signed a deal with employees to who felt the need for such a deal so Wasn’t the introduction of ners would seize on it as a way to year will boost sales by 5 to 10 enable Sunday trading by the end strongly that it metaphorically set Europe’sI single currency once sup- advance their other demands, such per cent. of this quarter. his “hair on fire”. And that, in turn, posed to throw all existing financial as for a thumping €60bn financial Ninety-two per cent of em- Bon Marché on the Left Bank, led him to make it the pretext for his contracts into confusion? Wasn’t the settlement from the UK to seal the ployees at the store voted in which is owned by luxury group very public resignation last week. so-called Y2K bug going to cause all divorce. Understandably too, as favour of Sunday trading, and LVMH, will open its doors on It is easy to understand why our computer systems to crash? it would in effect signal Britain’s 62 per cent have volunteered to Sundays from March 19. producers would like as much time Well, the latest spectre to haunt inability to walk away from the EU work eight Sundays in 2017 - the And French workers could as possible to make any adjust- business opinion is the possibility without a trade deal. maximum authorised in the have more time for shopping at ments that Brexit might force upon that the UK might leave the EU with- So would the world end if Britain agreement between the unions weekends following the introduc- their businesses. Some have duly out a lengthy transitional arrange- exited the EU without an upfront and management. tion of separate laws concerning warned that they need to know the ment agreed well in advance with transitional arrangement, or would The move comes almost two the “right to disconnect” from outcome of negotiations before re- Brussels and all of its 27 European the country soldier on regardless? years after President François work email when not in the office. acting. But the potential outcomes partners. Well, the first thing that would hap- Hollande pushed through a From January 1, French or- are pretty clear and simple for most Bosses have been pushing for a pen is that the country would revert reform package of more busi- ganisations with more than 50 businesses. deal that would preserve the sub- to trading with its European neigh- ness-friendly policies. Named workers have ben obliged to start An upfront transitional agree- stance of the UK’s EU membership - bours on World Trade Organisation La loi Macron after Emmanuel negotiating with staff over times ment that would in effect pro- and its contributions to the Brussels terms. That could hurt both sides, Macron, who is now running as when they are not expected to long Britain’s EU membership by budget - well beyond the automatic but would scarcely be cataclysmic. an independent candidate for pick up their smartphones. years would be a very demanding A8 BUSINESS DAY C002D5556 Monday 09 January 2017 FT ANALYSIS In association with Online Economy - Policing the digital cartels

DAVID J LYNCH

rice-fixing is notoriously difficult to prosecute. With the rise of AI and algorithms capable of set- ting prices on their own, Pregulators face the new challenge of preventing collusion among machines. David Topkins is no John D Rock- efeller. But like the famed industri- alist, the unheralded ecommerce executive has stirred fundamental concerns about the laws of economic competition in the digital age. In the first criminal antitrust prosecution of its kind, Mr Topkins pleaded guilty in a San Francisco fed- eral court in 2015 to rigging prices for classic cinema posters sold through Amazon’s online marketplace. Even if the crime seems unre- markable, his method was revo- lutionary: Mr Topkins admitted to manipulating the market by pro- gramming customised algorithms to keep prices artificially high. Once his rivals agreed to the plan, the al- gorithm automatically maintained what prosecutors called “collusive, non-competitive prices” on printed wall art. Barack Obama As Topkins waits to learn his fate, US authorities and their European to change.” The OECD report said the big data falling prices. The government later As an example, he cites a German counterparts are beginning to grasp No evidence trail phenomenon “may pose serious sued, saying that the dinner talks - software application that tracks pet- the implications of these increas- For now, most regulators see this challenges to competition authori- the first of several over a four-year rol-pump prices. Preliminary results ingly powerful online tools. Mr as a future concern. But as pricing ties in the future, as it may be very period - showed that US Steel was suggest that the app discourages Topkins’ modest poster sales pale systems become ever more autono- difficult, if not impossible, to prove an illegal monopoly. price- cutting by retailers, keeping alongside the mighty Rockefeller mous, aspiring monopolists like Mr an intention to co-ordinate prices, Algorithms render obsolete the prices higher than they otherwise oil trust, whose 90 per cent share of Topkins eventually will not even at least using current antitrust tools”. need for such face-to-face plotting. would have been. As the algorithm the market prompted the nation’s need to speak to their competitors It added: “Particularly in the case Pricing tools scour the internet for instantly detects a petrol station price first antitrust law in 1890. But by to fix prices. Computers will do the of artificial intelligence, there is no competitors’ prices, prowl propri- cut, allowing competitors to match highlighting technologies capable colluding for them, either by using legal basis to attribute liability to a etary databases for relevant histori- the new price before consumers of distorting markets in unfamiliar the same algorithm or learning computer engineer for having pro- cal demand data, analyse digitised can shift to the discounter, there is ways, his prosecution is a digital from their interactions with other grammed a machine that eventually information and arrive at pricing no incentive for any vendor to cut in economy milestone. machines - all without leaving be- ‘self- learned’ to co-ordinate prices solutions within milliseconds - far the first place. “We will not tolerate anti-com- hind trails of incriminating emails with other machines.” faster than any flesh-and-blood “Algorithms are sharing informa- petitive conduct, whether it occurs or voicemails. President Barack Obama and merchant could. tion so quickly that consumers are in a smoke-filled room or over the “Finding ways to prevent col- leading Democrats such as Senator That should, in theory, result in not aware of the competition,” says internet using complex pricing al- lusion between self-learning algo- Elizabeth Warren have expressed lower prices and wider consumer Mr Stucke. “Two gas stations that are gorithms,” William Baer, principal rithms might be one of the biggest concerns about a broader decline choice. Algorithms raise antitrust across the street from each other are deputy associate attorney-general challenges that competition law en- in competition in the US economy. concerns only in certain circum- already familiar with this.” at the Department of Justice, insisted forcers have ever faced,” said a recent Last April, Mr Obama’s Council of stances, such as when they are This episode suggests that the when Topkins’ indictment was un- paper by the OECD, the Paris-based Economic Advisors released a report designed explicitly to facilitate col- availability of perfect information, sealed. club of mostly rich nations. that found growing market share lusion or parallel pricing moves by a hallmark of free market theory, Yet existing antitrust laws, pre- These digital tools automatically concentration in industries such as competitors. might harm rather than empower mised on human intent and action, calculate prices based on instanta- transportation, retail trade and insur- “If the goal is to do bad things, consumers. may be inadequate to prevent com- neous assessments of supply and de- ance, which it blamed for slowing automated systems and algorithms panies from abusing their market mand and a seller’s own instructions, growth in living standards. could help you do bad things faster,” power in the digital era, some ex- such as specific profit or price targets. The White House also said new says John Salch, technology leader perts say. Markets dominated by “ “We’re talking about a velocity regulations may be needed to ad- with PROS Holdings Inc, a Houston- robo-sellers,” or automated pricing of decision-making that isn’t really dress specific antitrust concerns in based pricing software company. bots, will not respond to the same human,” says Terrell McSweeny, a the digital economy. “Price transpar- He does not believe such strate- incentives or operate according to commissioner with the US Federal ency can in some settings facilitate gies are sustainable. But last year, the same rules as those managed Trade Commission. “All of the eco- tacit collusion by enabling firms to German regulators warned that the by people. nomic models are based on human see what other firms are charging, competition-inhibiting effects of These concerns suggest that the incentives and what we think hu- and hence easily detect any deviation sophisticated algorithms could be digital economy’s promise of lower mans rationally will do. It’s entirely from agreed-upon high prices,” the difficult to prosecute. A report by the prices and plentiful choice for con- possible that not all of that learning report said. UK’s House of Lords last year, citing sumers could evaporate. The rise of is necessarily applicable in some of Smoke-filled rooms “the potential for anti-competitive artificial intelligence and powerful these markets.” The classic example of industrial- behaviours” and “new forms of algorithms may instead create more First deployed in sectors such era price fixing dates back to a series collusion”, called for the European durable cartels that are able to main- as quantitative finance, the use of of dinners hosted amid the 1907 Commission to conduct additional tain higher prices at consumers’ ex- algorithms is now entrenched in financial panic by Elbert Gary, then research on algorithms’ effects on pense and in defiance of traditional the airline and hotel industries and chairman of US Steel. competition. enforcement regimes. on online retailers such as Amazon. In a narrow first-floor ballroom “It’s an immediate concern,” says “The stakes are a lot higher in They are also spreading rapidly to at New York’s Waldorf Astoria Hotel, Stucke, who along with his co-author the data-driven economy because other markets, including transpor- men controlling 90 per cent of the Ariel Ezrachi of Oxford university, of network effects,” says Maurice tation, healthcare and consumer nation’s steel output revealed to each briefed antitrust officials in Wash- Stucke, a former federal antitrust goods. Walmart’s $3.3bn acquisition other their respective wage rates, ington and Brussels late last year. prosecutor, who teaches at the Uni- of online retailer Jet.com in August prices and “all information concern- “We may have an anti-competitive versity of Tennessee’s College of Law. was driven partly by a desire to ing their business”, one attendee result without necessarily having an “Competition as we know it is going improve its algorithmic capabilities. recalled. Gary’s aim was to stabilise antitrust fix.” Monday 09 January 2017 A9 A10 Monday 09 January 2017 Monday 09 January 2017 C002D5556 BUSINESS DAY A11 NEWS Equities market pulls out of three-day losing streak followed with a 4.46 percent MOHAMMED JOSE gain, trailed by OANDO igerian equities (3.30%), ETERNA (3.13%) market at the and ACCESS (2.28%). close of the first Activity levels picked up business week on Friday with value traded eventuallyN pulled out from a rising from N898.7 million three-day losing streak on the on Thursday to N1.5 billion backdrop of bargain hunt- on Friday. Similarly, the ing activities. On Friday, the volume traded on Friday was All-Share-Index gained 0.15 210.2 million, up from 137.7 percent to close at 26,251.39 million on Thursday. These (26,212.09 Thursday). all transpired in 2,659 deals, Investor sentiment thus up from 2,488 on Thursday. far in the new year has re- Likewise, market capitali- mained soft as was the case sation closed at 9,032 trillion, on Friday, closing at 0.8x up from 9,018 trillion on as it paled compared with Thursday. a 1.06x market breadth on Conversely, CADBURY Thursday. This came on slid 5 percent to close at the back of 13 advancing N9.50 as it led the decliners’ stocks against 16 decliners. chart. Oil and gas player, Leading the band of gainers MOBIL, followed with a was UAC-PROP for the third similar decline of 5 per- consecutive time this week. cent, likewise NEM (5.00%), It closed at N3.02 (N2.88 which closed at N0.95. Trail- Rogers Nicholas, commander of operation Safe Haven (r), with Governor Simon Lalong of Plateau State, during the launch of Thursday) on account of a ing after were UBN (-4.92%) the Armed Forces Remembrance Day Emblem Appeal Fund at the Government House in Jos, at the weekend. 4.86 percent gain. FCMB and NAHCO (-4.90%). Nigeria to start building railway to Unauthorised courses: FG warns universities of agric, technology Made-In-Aba decades-delayed steel plant … directs JAMB to delist unrelated courses from specialised universities campaign as part of President Muham- were antithetical to their its portal and all candidates igeria plans to start HARRISON EDEH, Abuja construction this madu Buhari’s efforts to invest mandates. The government desirous of sitting for the attracts fresh month of a railway in mining, agriculture and noted as unfortunate the 2017 Universities Tertiary N ederal Government situation were universi- Matriculations Examina- orders worth linking its decades-delayed infrastructure. Government has directed that all ties of agriculture offer tion were advised not to Ajaokuta steel plant to iron- revenue from oil, which ac- counts for 90 percent of the specialised univer- programmes in law, man- be hoodwinked into such N750m ore mines and a port, as the sities are to stick to agement courses such as programmes as they were nation’s export earnings, has government accelerates ef- theirF core mandates they accounting, banking and illegal and not provided for forts to reduce the economy’s shrunk after crude prices fell were set up to carry and finance, business adminis- in the brochure. GODFREY OFURUM, Aba reliance on oil, Bloomberg from a peak reached in 2014 desist from running pro- tration, among others. JAMB in the statement reports. and as attacks on pipelines grammes that have no bear- As if that was not enough, said it had not commenced bia State government Julius Berger Nigeria Plc, in the Niger Delta curb pro- ing with their foundation. some institutions change the sales of the 2017 UTME says the Made-in-Aba which won a contract in 2009 duction. Specialised universities the nomenclature of some application forms, warning, marketing campaign, are set up to pursue specific of the courses to read, for “Candidates are urged to A to build a 275-kilometer (171- The new railroad will link which it embarked upon in mile) rail line, “should start the steel plant to an iron-ore courses/programmes to instance, banking engineer- exercise patience as JAMB 2016, has attracted fresh orders work very soon, and comple- mine in the central Kogi state, steer the need of manpower ing, accounting technology, is putting final preparations worth N750 million. in a particular sector of the among other names. This is towards commencing the tion is expected in about two as well as the port city of Warri Governor Okezie Ikpeazu, economy. Some of these an aberration and should sales. The delay has been years,” Ministry of Transport to the south and Kaduna state, who revealed this during the north of the capital. Once institutions include univer- be stopped with immedi- occasioned by the Board’s Permanent Secretary Sabiu sities of agric, universities ate effect, according to the desire to reduce to the bar- review of his administration’s complete, the government Zakari said in an interview of technologies, universities government. est minimum challenges activities in 2016, said the cam- from the capital, Abuja, on plans to hire a private op- of medicine, among others. In view of this ugly de- associated with the conduct paign yielded tremendous posi- Thursday. “We are deter- erator for the rail line, Zakari The Federal Government velopment, Adamu Adamu, of the Board’s examination. tive fruits and had brought to the mined to do this project that said. Several companies have in a statement observed minister of education, in “However, in the final fore the conscious efforts and has dragged on for 30 years.” expressed interest in the con- that these institutions had the statement directed the analysis, Nigerians should ingenuity of producers in Aba. Construction of the steel cession, he said, declining to derailed from their statu- Joint Admissions and Ma- note that admissions will Ikpeazu stated that the state plant on the banks of the Ni- name them. tory responsibility thereby triculation Board (JAMB) to be conducted within the government was able to get top ger river started in 1979 before Nigeria may this year running programmes that delete all such courses on stipulated timeline.” influencers in politics and enter- stalling, partly because of the spend about N213 billion tainment to sign-up as goodwill absence of a railway to carry ($688 million) developing ambassadors for Made-In-Aba raw materials and finished railroads, including the Aja- How beneficiaries of N5,000 stipend was selected products in the year under product. Now authorities are okuta-link project, according review, saying they intend to seeking to revive the project, to budget proposals. … as Kwara residents confirm receipt of pro-poor N5,000 monthly stipend graduate the campaign to cover years ago to identify most of the the entire chain of everything SIKRAT SHEHU, Ilorin community determines. Naira outlook brightens on rising foreign reserve beneficiaries in the pilot states, However, Kwara State gov- produced in Abia State in 2017, etails have emerged on as the World Bank was also an ernment has confirmed receipt to create new markets for prod- active agent in the entire process. of monthly national cash trans- ucts made in the state. HOPE MOSES-ASHIKE ward contracts were stable how the Federal Gov- at N305.25, N320.18/$, ernment determined According to Akande, “there fer of N5,000 meant to be paid to The governor also said that D is no way anyone can describe the poor masses in Nigeria from N330.537/$, N346.07/$ and ressure on the naira is ex- the beneficiaries of the Con- the state was partnering private N378/$, respectively. However, ditional Cash Transfer who the selection of the beneficiaries the Federal Government, just as developers to build an Abia pected to ease this week spot rate appreciated by 0.08 of the CCT as partisan, as the some residents who spoke with following a noticeable are now receiving the N5,000 Leather and Garment Industrial P percent to N305/$ as there monthly stipends across the beneficiaries from eight of the BusinessDay in Ilorin, the state City at Umukalika, while simul- accretion in foreign reserves by was $7.5 million intervention nine pilot states were picked capital, commended the pro- 4.88 percent to $26.22 billion as nine pilot states. taneously expanding existing sales by CBN to banks during In a press release, Laolu even before this administration poor gesture. of January 5, from $25.0 billion the week. came into office. Aminat Yahya-Bagudu, markets for those who would in December 15, 2016. Akande, senior special assistant not want to move to the new “We expect stability of the on media and publicity in the “First, the officials at Federal head of unit, Conditional In addition to this, the ex- location. naira/USD exchange rate as office of the Vice President, said level, working with the State Cash Transfer at the Kwara pected dollar supply to Bureau the increasing reserve spur officials, identify the poorest State Ministry of Women Af- Reeling out other achieve- De Changes (BDCs) by the the nine states were Bauchi, confidence on the ability of the Borno, Cross Rivers, Ekiti, Kwara, local government areas, using fairs and Social Development, ments of his administration International Money Transfer Central Bank of Nigeria (CBN) an existing poverty map for said 10,700 persons were in commerce and industry, Operators (IMTOs) will also Kogi, Niger, Osun and Oyo. to intervene more aggressively the State, then the LG officials currently benefiting from the the governor said, “The Aba help shore up the naira. Akande clarified that refer- in the official market window,” ence to Ogun instead of Osun, identify the poorest communi- pro-poor national conditional Mega Mall has been com- The nation’s currency has analysts at Cowry Asset Man- ties in the LGAs and we send cash transfer scheme estab- remained stable, closing at among the pilot states, in his pleted in partnership with agement Limited said. last press statement on the issue our teams there. lished by Federal Govern- N305/$ since last two week at “The first thing our team Greenfield Assets Limited, Up to May 31, the exchange was an error. ment to alleviate poverty. Umuahia Shoprite Mall was the interbank spot market, ac- rate was pegged to $/N199, rein- does after selection of the LGAs Yahya-Bagudu, who said cording to data from the FMDQ. In his press update on the completed and has been of- forcing CBN’s commitment to a progress of the Muhammadu is to select members of the NOA, the programme was part of the Naira depreciated at both managed FX rate. It depreciated the LGA and community offi- economic components de- ficially opened. Abia Hotels in the BDC and parallel market Buhari administration’s So- Aba has been privatised under in the parallel market, and fell to cial Investment Programmes cials to form the CBT team. Then signed by Federal Government segments by 0.62 percent and a historic low of N490/$, further we train the selected officials on to tackle poverty in the country, lease agreement and that at 0.61 percent to N485/$ and (SIP), at the weekend, Akande widening the gap between the explained how the Community- how to conduct Focus Group said the beneficiaries had started Umuahia has been upgraded. N493/$, respectively. parallel and interbank rates discussions at community level. receiving the payment of N5,000 The Ohiya Industrial Cluster The 1-month, 3-month, Based Targeting (CBT), model (which closed at N305.5/$). of the World Bank was used two These focus groups comprise monthly each from the Federal was expanded.” 6-month and 12-month for- of women, men, youth, as the Government. A12 BUSINESS DAY C002D5556 Monday 09 January 2017 NEWS Reps to debate 2017 budget estimates, embark on oversight functions ... resume plenary Tuesday KEHINDE AKINTOLA, Abuja tion, told BusinessDay that assigned to interface with the N7.298 trillion budget Federal Government on the estimates for 2017 fiscal year resolution, which seeks to arring last minute would be given necessary establish Military Battalion changes, members priority on resumption, as the in Southern Kaduna, would of the House of Rep- House would also continue brief the House on the steps resentatives are ex- debate on several bills at first taken so far. Bpected to resume legislative and second reading. Femi Gbajabiamila, major- activities tomorrow, when “When we resume, we ity leader, while giving insight they are expected to deliberate will be discussing some of on the 2017 budget, assured on the state of the nation. the bills that are already in that the 2016 Appropriations The lawmakers are also place. As you know, budget Act would elapsed on May 5, expected to embark on over- will be looked into, because it 2017. sight of various projects imple- remains our priority. “Therefore despite the lay- mented by the Ministries, “When we closed, a lot of ing of 2017 budget by Mr. Departments and Agencies things happened but we will President on the 14th day of (MDAs) as they await the be expecting the Committees December 2016, the life of the production of copies of the assigned to carry out legisla- 2016 budget only terminates 2017-budget proposal pre- tive actions on the Southern on May 5, 2017. The essence sented by President Muham- Kaduna crisis to brief us de- of this clarification is that the madu Buhari to the joint ses- tailed information. Committees of the House sion of the National Assembly “There are also several upon resumption in January before embarking on Christ- other issues that we’ll discuss 2017 will embark on rigorous mas and New Year recess. when we resume, I can assure oversight functions to en- Abdulrasak Namdas, you that,” Namdas said. sure that the Ministries and chairman, House Committee On the Southern Kaduna Government Agencies do not on Media and Public Affairs crisis, the House spokesman abandon the implementation via a telephone conversa- stressed that the Committee of the 2016 budget. Group asks Senate to reconsider, confirm Magu as EFFC boss OWEDE AGBAJILEKE, Abuja 2016, rejected the nomination Specifically, Agi pointed out of Magu as EFCC boss on the that some senators had joined s the National Assembly strength of a security report the ‘inglorious and dubious’ resumes from its three- from the Department of State group hell bent on killing Presi- week break on January Services (DSS), which labelled dent Buhari’s anti-corruption A war. 10, a group has called on the him as unfit for the job on ac- Senate to reconsider its stand count of corruption. The Senate, he warned, and confirm Ibrahim Magu But head of the group, should not become a clog in the as substantive chairman of Emma Agi, insisted that Magu wheel of progress in the Presi- the Economic and Financial should be confirmed, “Because dent’s fight against corruption. Crimes Commission (EFCC). the allegations against him “The wish and will of our be- The group under the aus- originate from dubious sources loved President Buhari should pices of Niger Delta Ex-Militants and therefore cannot stand the be respected and honoured for Positive Change in Nigeria test of time.” because whether the three arms made this known in a statement He called on the Senate to of government are equal, it is the issued in Abuja. stop playing politics and mischief Executive that is traditionally Recall that the upper legisla- with President Muhammadu held responsible for any failure, tive chamber had in December Buhari’s anti-corruption crusade. omission or commission. BUSINESS DAY NEWS YOU CAN TRUST I MONDAY 09 JANUARY 2017 C002D5556 THE WEALTH OF NATIONS Economic crime and the rule of law (Part 1) Economy, finance, banking, policy, world economics H. L. A. Hart and Ronald sources, Africans hold total the country was emerging they are the best of men”. versal application – it cannot Dworkin. So, I guess I could assets of between US$700 – from a tragic civil war. In the Age of Absolutism, be applied to some and not lay some legitimate claim to US$800 billion stashed away Seasoned chefs would Louis XIV of France could to others. Thirdly, the law being able to talk intelligibly in foreign bank vaults. It is tell us that there is simply boldly declare that, “l’état must be in conformity with on the subject of economic suspected that about US$200 no clean way of making c’est moi!” in the absolut- the precepts of natural jus- crime and the rule of law. billion of those funds belong sausages. Fighting corrup- ist state, government and tice. Fourth, laws must be The nineteenth century to Nigerians. tion is a messy business. the law were embodied in addressed to rational minds French novelist Honoré de The picture is even more It may sometimes appear the person of the monarch. and must be in accord with Balzac famously quipped unsettling for our country to undermine the rule of The solemn declaration rational reason. Fifth, the that, “behind every great Nigeria. It is estimated that law and human rights. I embodied in Magna Carta courts must be able to apply fortune there is a crime”. since the 1970s, we earned a guess the recent arrests of 1215 enshrined the princi- them impartially as well as Economic crime is the ex- staggering US$1 trillion from senior judges have made ple of government based on effectively. Sixth, law cannot OBADIAH MAILAFIA istential nightmare of our oil exports. However, due many of you rightly anxious the rule of laws rather than be inconsistent with other Mailafia is an economist with a era. According to the World to corruption, over US$400 about the clumsy methods the rule of arbitrary power. laws and must aim to serve DPhil from Oxford. He has also Bank, corruption, fraud billion has been frittered that have been deployed These principles became the common good. And last- served as deputy Governor of and bribery cost more than away. The 1994 Okigbo panel by anti-corruption agen- codified in the English Bill ly, law must ultimately aim the Central Bank of Nigeria. US$1.26 trillion annually for on the Reorganisation and cies. There are indeed some of Rights 1689. to promote and protect the +2348036590990 (SMS only) developing countries alone. Reform of the CBN revealed major issues that should Lord Denning, a favourite liberties of the individual. According to the High Level that a whopping US$12 bil- concern every citizen, not of law students throughout Even when a law restricts eing a non-law- Panel on Illicit Financial lion could not be properly just lawyers and judges. I be- the Commonwealth -- per- liberties, it should be for the yer, I feel quite Flows set up by the African accounted for by the erst- lieve that we do not need to haps the greatest English ultimate purpose of further intimidated Union and chaired by for- while military administra- deploy intimidating armed judge of the last 100 years -- enhancing human liberties. addressing an mer South African President tion of General Ibrahim state security forces to ar- declared Magna Carta to be In his words, “liberty can be audience heav- Thabo Mbeki, over the last 50 Babangida. I can tell you rest a judge. And I do not “the greatest constitutional restricted only for the sake of ily dominated by lawyers B years, Africa has lost in ex- that US$12 billion was a lot think government should document of all times – the liberty itself”. and high-powered judges. cess of US$1 trillion from il- of money then. It is a lot of disregard court orders. We foundation of the freedom The International Com- Among the Bakongo, it is licit outward financial flows. money now. must also never politicise of the individual against the mission of Jurists, in their said that “you do not teach Indeed, my former col- And according to the the arrest and prosecution of arbitrary authority of the 1955 Declaration at Athens, the paths of the forest to an leagues at the African De- London-based Royal Insti- corrupt officials. There must despot” reaffirmed, that, inter alia: old gorilla”. As most of you velopment Bank have es- tute of International Affairs be no sacred cows. The late Harvard politi- (1) The state is subject to probably know, my back- timated that an average of - Chatham House - Nigeri- So, what is the rule of law cal philosopher John Rawls the law; (2) Governments ground is in banking and the US$100 billion of capital ans, in collusion with foreign and why is it important in underlined the main under- should respect the rights economics and politics of flight leaves our continent shadowy characters, have the fight against economic pinnings of the rule of law. of the individual under the development. However, it so every year; a figure far in engaged in the plunder- crime? First, according to him, there Rule of Law and provide happens that I have an abid- excess of what Africa actually ing of our oil resources at a The philosopher Aristotle can be no offence without effective means for their ing interest in jurisprudence receives by way of foreign in- monthly average of US1 bil- famously remarked that in a a law (Nullum crimen sine enforcement; (3) Judges and legal theory; fascinated vestment, remittances from lion during the years 2007- state governed by law, “God lege). Law must be known should be guided by Rule of by thinkers as wide apart our Diaspora and Official 2014. It is no surprise why and reason alone rule”. By and expressly promulgated Law, protect and enforce it as St. Augustine of Hippo Development Assistance Nigerians today are poorer contrast, “passion perverts and its rules clearly defined. Regis, Aquinas, Ibn Rushd, (ODA). According to some than they were in 1970; when the minds of rulers, even if Second, law must be of uni- al-Farabi, Hugo Grotius, Continues on page 39 The 2017 Budget speech: Why Buhari’s economic ideas are wrong

resident Buhari’s believe in Nigeria”. But who change to import these raw 2015. Given that Nigeria has a makes imports cheaper, and, der around jobless”. First, this speech to the Nation- are in this category? Well, ac- materials. No government population of about 175 mil- of course, when most things is cheap populism, because, as al Assembly last De- cording to the president, they would deliberately harm in- lion, while South Africa has 52 become cheaper, people tend the Nigeria Industrial Revolu- cember on the 2017 include “manufacturers who dustries in this way, except in million, you would think that to buy more of them. Over the tion Plan makes clear, even the Pbudget was, for all intents and substituted imported goods Nigeria, where the president Nigeria should be importing years, a strong naira encour- public sector doesn’t patronise purposes, a lecture on his eco- for local materials”. So, by believes that manufacturers more goods and services than aged cheap imports, which Made-in-Nigeria products! Ig- nomic philosophy. The parts inference, any manufacturer who use imported inputs are South Africa, but it is not. In were paid for with scarce for- nore the hypocritical publicity of the speech in which the in Nigeria who uses or wants unpatriotic! fact, according to the World eign exchange. Now, let’s be gimmicks by key public offic- president set out his economic to use imported raw materials But why, you may ask, does Bank, Nigeria ranks only 34 clear, imports themselves are ers who are sudden converts ideas are far more significant is unpatriotic! What a strange the Buhari government pursue out of 137 major importing not the problem, but a pegged to Aba-made goods. The than those that dealt with thing for a president to say! All such an ideologically-back- nations. This doesn’t suggest a naira. And the solution is not to president’s statement is also the brass tacks of the 2017 over the world, manufacturers ward, economically-illiterate country that is heavily import- ban or restrict imports, which self-contradictory. The same budget. Those philosophical are expected to procure cheap and industry-destroying poli- dependent. is counterproductive, but to Buhari who so hates imports biases will have far-reaching and quality inputs from what- cy? Well, the president said in Of course, the government float your currency so that its also said in his speech that “We implications for the com- ever source(s) globally in order his speech that, “We wasted will point to the shortage of value can adjust and regulate must take advantage of current petitiveness and health of the to produce quality goods that our large foreign exchange foreign exchange. But are im- imports accordingly. For in- economy than a budget that can compete internationally. reserves to import nearly eve- ports the primary reason for stance, since the government Continues on page 39 is likely to be more honoured Of course, if cheap and qual- rything we consume” and, as Nigeria’s foreign exchange partially floated the naira, in the breach than in the ob- ity inputs are available locally, a result, “we saw our reserves problem? The answer is no! imports have reduced, be- GLOBAL servance. For instance, if the economic rationality demands eroded”. But how true are these The country is in a forex pickle cause the weak naira has made economy starts to recover that manufacturers should use claims? First, is Nigeria really because it depends on one imports more expensive. Yet, PERSPECTIVES this year, as some analysts them. But it defies economic an unusually import-depend- export, oil, which accounts the government has refused are forecasting, it will not be logic for any government to in- ent country? And, second, for about 95% of its foreign to allow the full flotation of because of the 2017 budget or sist that manufacturers should, are imports to blame for the exchange earnings. Nigeria is the naira. Indeed, recently, of any structural adjustment, willy-nilly, use local inputs. erosion of Nigeria’s foreign not generating enough foreign Buhari said: “I will resist the but because of oil price that Yet, this was the warped reserves? Let’s consider the exchange from non-oil ex- devaluation of the naira”. But is currently running at nearly philosophy that informed the two claims in turn. ports and foreign investment. the president can’t command $60 per barrel, well above the central bank’s misguided ex- A country’s openness to Inevitably, when the price of the markets as he can order budget’s benchmarked price clusion of 41 items from access trade is measured by the sum oil collapsed, the country’s the military. Markets react to of $42.5. But no economy to foreign exchange. Last year, of its trade (exports and im- foreign exchange earnings incentives, and one of them is should depend solely on such the minister of industry, trade ports) as a share of its GDP. For dipped significantly. But a a flexible, market-determined, exogenous factors. This is why, and investment, Okechukwu the sake of this discussion, let’s foreign exchange shortage is exchange rate. for me, it’s more useful to dis- Enelamah, admitted in a BBC look only at the import com- not a problem, even with im- Let’s face it, President Bu- cuss the president’s economic interview that the discred- ponent. According to World ports, unless it is accompanied hari has some strange ideas philosophy than details of the ited CBN forex ban has had Bank figures, Nigeria’s import by a fixed exchange rate. It’s about imports. For instance, OLU FASAN 2017 budget. “unintended consequences” of goods and services as a per- only when an exchange rate is he said in his speech: “By im- Now, let’s start with the because the 41 items include centage of its GDP in 2012 was pegged that imports pose a se- porting nearly everything, we Fasan, a London-based lawyer and political economist, is a first ideational theme in the essential raw material inputs. just 12.9%, and this dropped rious risk to a country’s foreign provide jobs for young men Visiting Fellow at the London president’s speech: patriotism. As a result, manufacturers to 10.8% in 2015. Compare exchange reserves. and women in the countries School of Economics. President Buhari talked about have suffered gravely because this with South Africa’s, which When a country’s currency that produce what we import, [email protected] “those patriotic Nigerians who they can’t obtain foreign ex- was 33% in 2013 and 32% in is too strong or overvalued, it while our young people wan- @olu_fasan

Published by BusinessDAY Media Ltd., The Brook, 6 Point Road, GRA, Apapa, Lagos. Ghana Office: Business Day Ghana Ltd; ABC Junction, near Guinness Ghana Limited, Achimota – Accra, Ghana. Tel: +233243226596: email: [email protected] Advert Hotline: 08116759801, 08082496194. Subscriptions 01-2950687, 07045792677. Newsroom: 08022238495 Editor: Anthony Osae-Brown. All correspondence to BusinessDAY Media Ltd., Box 1002, Festac Lagos. ISSN 1595 - 8590.